Managing client relationship in B2B service markets - Indian software industry

Abstract

The Indian Software Industry has seen an unprecedented growth in the past decade. This growth was accompanied by an emergence of many new companies. Presently there are more than 30 companies in India with manpower of more than 1000. This leads to the need of differentiating the company vis-à-vis competitors. Maintaining a profitable client relationship remains the core strategy of most of the firms. Though much research has been conducted in the customer relationship management, this was mainly limited to the product market. A few researchers have contributed to the client relationship in B2B markets but the client relationship in Indian IT industry, which comes under service marketing, remains mostly untouched. B2B marketing is different from B2C marketing in many aspects. In B2C marketing, price and the product are the important factors. Whereas, in B2B transactions, the three top factors in making a buying decision are (1) reputation, (2) referrals and (3) references. Price is a distant fourth. B2B businesses usually have small number of clientele and there is high amount of customization of the offerings. The scale of the deals is usually high with long sale cycle. Also there are different kinds of stakeholders involved in a B2B purchase. Coming to services in B2B segment, things become more complicated because of the intangible nature of the offering. This leads to different perceptions of value and quality. We propose to study the various aspects of the relationships between the Indian software firms and their clients (mainly retail organizations and banks) in maintaining the relationship. We plan to use the “Integrated model for Buyer and Supplier relationship”, suggested by Jagadish N. Sheth and Atul Parvatiyar in their book “Handbook of Relationship Management”, as a reference to evaluate the various strategies adopted by the software firms. This will form the basis of our framework formulation. Hence the main objectives of this Contemporary Concerns Study are to: 􀂃 To study the parameters critical to the client relationship in a B2B service market. 3• To analyze the client relationship management strategies followed by Indian Software Firms • To suggest a framework that is applicable for B2B service marketing.