Outsourcing of marketing activities to fuel BPO growth in India

Friday, 19 September 2003, 07:00 Hrs
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NEW DELHI: More and more global companies are looking to outsourcing their sales and marketing activities to India, creating new opportunities for the country's money-spinning business process outsourcing (BPO) firms.

Manufacturing and a host of other traditional firms worldwide, foraying into new areas or expanding to other geographies, are finding outsourcing of marketing activities to be a strategic tool, says India's premier IT lobby group.

Marketing activities include delivery of services such as content, campaign outsourcing and consulting that requires enterprises to persuade or communicate with customers, said the National Association of Software and Service Companies (Nasscom).

"The primary objective of marketing services are to build brand awareness, interact with customers and prospects, and strengthen existing customer relationships," said a Nasscom report made available to IANS.

India's vast pool of English-speaking and cheap manpower, educational system and training programmes have helped transform the country into a global outsourcing hub.

The rapidly growing BPO industry has virtually turned the country into an electronic housekeeper to the world, taking care of a host of routine activities for multinational giants.

More than a quarter of Fortune 500 companies like General Electric, American Express, British Airways, HSBC and Citibank are shifting their back office operations to India.

The marketing services segment within the BPO sector is expected to grow because of advances in technology coupled with changes in perception of the role of marketing, the report added.

The worldwide opportunity for marketing through BPO was $76.7 billion in 2001. It is expected to increase at a compounded annual growth rate of 7.2 percent to $108.3 billion in 2006, says Nasscom.

The U.S. market for outsourced sales and marketing services touched $46.9 billion in 2001 and is expected to be worth $60.8 billion in 2006, registering a compounded annual growth rate of 5.3 percent.

"The U.S. holds the largest market share for outsourced marketing services. This is largely due to the fact that the country is more open to outsourcing overall as compared with international markets," said the report.

"Highest growth is expected in the Asia-Pacific region. However, it is anticipated that much of this activity will focus on certain pieces of market services such as direct marketing rather than on branding activities," it said.

On roadblocks that can restrict a sharp growth in outsourcing of marketing activities in the Indian BPO industry, the Nasscom report said that there were some characteristics of the marketing function that could not be changed.

It says although firms may turn to third parties to help them integrate technology and marketing efforts, "the fact is that e-marketing services are still emerging and, to date, have been somewhat isolated from the traditional world".

Source: IANS
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