Introduction:

Type of products:

Industry structure:

People employed in the industry

Growth rate:

Import export

Regulatory

Policies

Ministry

Budget implication

Importance of service in IT industry

8 p of service marketing:

8 Ps of Service marketing:

Product:

 IT services

 BPO services

I’m concentrating on: IT services

Types of product: mainly 3 types

Application software includes end-user applications of computers such as word processors or video

games, and ERP software for groups of users.

System software includes operating systems, which govern computing resources.

Today[when?] large[quantify] applications running on remote machines such as Websites are considered[by
 whom?]
 to be system software, because[citation needed] the end-user interface is generally through a graphical
user interface, such as a web browser.

Programming software usually provides tools to assist a programmer in writing computer programs, and

software using different programming languages in a more convenient way. The tools include:

 Compilers
 Debuggers
 Interpreters
 Linkers
 Text editors

An Integrated development environment (IDE) is a single application that attempts to manage all these
functions..

Others include, testware, firmware, programming tools, device drivers etc..which are part of system
software and application softwares only

For these softwares 2 types of services are offered:

Customized products development and maintenance services : Solution is provided by

making some changes in the software to meet customer requirement or making it
specially for the client: E.g: website development, DSS, MIS for different organizations

Packaged products services: Already developed products- standardized product, e.g.:

SAP’s ERP, MS Office- application softwares

: further: software development- prob definition, requirement study, analysis, design,

coding, testing, implementation, maintenance- individual service or turn key projects.

I’m going to consider turnkey projects services as my area of focus.

 Testware is software for testing hardware or a software package, Firmware is low-level software often
stored on electrically programmable memory devices. Firmware is given its name because it is
treated like hardware and run ("executed") by other software programs.

Place and time: delivery of service depends on the type of product and client base and type.

E.G. if packaged product, can be available online at companies website for online shopping
services, problems can be resolved online, or they may be available at specific electronic
stores. E.g: Kaspersky anti-virus available at Electronic stores.

If service is for customized product, delivery involves more human interaction as

understanding customer requirements is the most crucial task of all operations. For that,
one has to be in constant touch with the client at each and every stage and it follows
continous feedback procedure from client’s side.

Also, the major IT market segment is software export segment. In projects involving
outsourcing of IT services, Engineers have to go onsite for understanding client
requirements and co-ordinate with their in house technical team and delivering the final
service. so, place and time varies depending on type of product and IT service the
organization is dealing with.

Price:

Packaged products: Fix price depending on sales potential, distribution charges and othe
costs just same as any other finished products. But It is a one time cost for development
and then they have to invest for just little modification based on customer feedback..wat we
see version of softwares.. so, the cost is divided among customer market and hence not
charged full as thousands or lakhs of rupees.
Customized: varies depending on type of project, experise required, length of code, and
resource costs. The client has to bear the full cost of development of the software.

In IT industry, if it is dealing with software export services then price is paid by the client
on monthly or weekly basis in terms of givin the fix amount per month for number of
employees hired by the SW company to work on the project of that particular client.

Cocomo model

How much will customers pay to use the software?

How much do competitors charge? 
How much is the software worth to customers? 
what are the differences between the products? 
How does your software stack up? 
How much competition is there?
What is the market saturation? 
How do you define your product and market?
How does the software compare to freeware? 
How much would the software cost to develop by another company? 
What were the actual development costs or time involved? 
What kind of software is it?

Upgrade Pricing 
Many developers leave money on the table when pricing software upgrades. This is a common mistake. Existing customers
are an excellent source of revenue. Charge a nominal fee for version upgrades.

OEM Pricing 
OEM stands for Original Equipment Manufacturer and it is when a company sells products (including software) under its own
label, that include technology licensed from another vendor. Volume is critical for OEM deals to be profitable. In most OEM
negotiations profit margins are small but quantities are large.

Educational or Nonprofit Discounts

It is not uncommon to provide educational discounts, or discounts to non-profits. There is no "typical" educational
discounts. Discounts can vary from 10% to 90% off of the list price. If this is a market segment you sell to, keep a discount
value in mind when setting the price, as many non-profits and educational institutions are accustom to receiving discounts,
and may be put off by not receiving one.

Reseller Discounts 
Resellers can extend your sales force. When settling on a price it is important to consider the role resellers will take in the
products success. If the application is priced too inexpensively, resellers will not have an incentive to recommend the
software - nor will their be much margin for you to share with these resellers.
Promotion: depends on type of software.. packaged softwares are promoted as products
whereas customized softwares are promoted as services.. as in software development,
implement and maintenance services.

- Place of promotion: packaged: advertised: B2B, B2C, E.g: Anti-virus, ERP

systems.

 Customized: B2B selling and hence promotion is done at

places where maximum Business people hang out.

Selling is done through cold calling or through references

or brand name. now, small scale Software companies have
started promoting their customized services like website
building through online advertisements and leaflets.

Mainly they promote themselves using their own website

through client testimonials.

Also, sometimes, for packaged softwares, beta version is

given to end users for free trial.. that serves two purposes:

1. Testing and feedback of software

2. promotion of software

Physical environment: important is infrastructure to provide services. Technology up

gradation requireres great infrastructure support to provide world class services as for IT
industry quality is very important and some of the companies have achieved six sigma
standard so for them infrastructure is very important.
Another thing, at back side, where engg work, they do not come in client contact directly,
so for them comfortable environment in office is important as flexible work hours id the
common practice is IT industry. Uniform- non formal are allowed at back end. Only client
servicing people are required to dress in formals.

Major market, overseas and out sourcing gives major revenue, great communication
network and infrastructure is required.

For them certificates of CMM level and quality are very important.

Facilities at big IT companies are like five star hotels, provide lounge, sports rooms,
cafeteria, gym, everything to maintain motivation level and provide comfort to employees
as employee creates brand value through commendable work.

Process: process is very crucial in IT industry..specifically for software development. It

involves different stages and they have different models of development depending on type
of project and client requirements. Specific model is the set of processes followed in a
particular order.

Also, for reengineering they have different processes. Evidence of which is CMM level
certification.

Capability Maturity Model

The Capability Maturity Model (CMM) was originally developed as a tool for objectively assessing the
ability of government contractors' processes to perform a contracted software project. Though the CMM
comes from the field of software development, it is used as a general model to aid in improving
organizational business processes in diverse areas; for example in software engineering, system
engineering, project management, software maintenance, risk management, system
acquisition, information technology (IT), services, business processes generally, and human capital
management. The CMM has been used extensively worldwide in government offices, commerce, industry
and software development organizations.[citation needed]
People:

IT industry has the highest number of engineers working for it in India. Different skill sets.

Technology is core to IT industry but developing that is in hands of people only. For IT,
understanding client req is the most crucial aspect bcz if requirement analysis will go
wrong then the whole project will lose purpose and result will be altogether different. So,
people are even more important than technology itself in IT industry.

According to one article I read, featuring interview of a CEO of an IT company, there are
so many institutes in India who provide programming language training or run computer
program training and those trained people can be hired and trained for the company
within just 3 months and they can deliver equally good performance but they don’t want
their clients to perceive that this is the org which takes such NIIT programmers who are
non engineers hence, question mark on quality..and so they hire from engg colleges only.
This shows how much important people are in IT industry.

Productivity and quality :

IT companies have generally common practice of training employees before taking them on
their regular payroll.

They conduct regular tests during this training period and give a fix number of chances for
improvement but if the trainee fails, he is not taken on job.. this ensures higher quality
output from employees and much better production capacity of the employee.

Also, six sigma approach is used by big IT companies. E.G Infosys has six sigma approach
for support projects and software development. Infy BPO has won global Six sigma award
for business improvement in transactional processes.

Highest number of intellectual people engaged in the industry, best in terms of

remuneration to achieve maximum productivity and quality.
Category of service: Information processing.

3- stage model for Service consumption:

Pre purchase stage:

-customers seek solutions to aroused needs:

IT is crucial for every business today. One or the other way, softwares are part of
regular life. Need websites, anti-virus, data base services, MIS, DSS, ERP, MS office
and such packages, OS, etc.. so, need is aroused.

So many vendors, need to search information for best software solution in best price.

- evaluate available options:

Search attributes: price, technology used, people qualification, quality assurance,

service promises, guarantee, licensing, infrastructure, reliability of vendor, references,
testimonials.

Experience attributes: dealing with personnel, service response, time to serve, ease
of use, easy navigation, soothing to eyes and clearly defined functions, training
provision for the software.

Credence attributes: maintenance of system. Can’t evaluate because no fix time as

to when the system will crash next.
Perceived risks and risk reduction:

Service guarantee and performance of system: performance: testing reports.. take test
conditions from clients and show him result..anothe way is: show pilot software.. follow
prototype model of development, make basic format and bacis functions, demonstrate
and if changes required take them continuously. Or use incremental model, keep on
taking feedback continuously and keep on developing and making change continuously.
This way, you can assure robustness and performance.

Service guarantee: maintenance contracts and provision of upgraded versions for free
or little charge.

Understand customers’ expectation:

Expectation model:

Service encounter: high contact: because for requirement collection, prototype

development, pilot demo, continuous requirement changes, implementation and
maintenance. But the most time is taken during development stage- which is non-
encounter stage. So, it is high contact service.

Post purchase stage:

Giving the right functionality with right technology and right amount of training will
give client satisfaction. Another very important thing is taking time to time review
about the system, flaws and updating them- and if any error or crash- serving them
provides high customer satisfaction. Also, generally, Companies give repeat orders to
the same companies so it is important to give right service or companies may switch.
E.g: Infosys’ first project ws a support project from the client of Patni frm where these
7 co-founders came. Patni failed to satisfy and these people took advantage of good
personal relations with the client.

GAP model: