Hi-Tech Marketing blog

Why Hi-Tech Marketing Jobs will Move to India

It has been over 25 years since hi-tech R&D jobs started to move to India. However, technology marketing jobs have not moved and stayed mostly in the US. One of the principal reasons for that was that there was a very limited market for hi-tech products in India that time. The other reason was economic - it just did not make sense to move these jobs overseas at the time. In addition, communication channels were very limited, meaning marketers would have no effective way of communicating with their customers unless they were local. Lastly, technology marketing requires a different skillset that was not available in India then. Technology marketing involves businesses selling complex technology products such as semiconductors, EDA/enterprise software, and high performance computing, networking and storage systems to other businesses. As you can imagine, it's a little different than selling toothpaste, or even a TV to a consumer. 

However, things are now changing. First off, Indian market for hi-tech is growing due to the huge growth in Telecom infrastructure, locally designed and manufactured electronic equipment (handsets/consumer electronics, etc.), R&D hubs of multi-national companies, and defence. This has required that most global hi-tech players such as Intel, Cisco, Nokia, Texas Instruments, HP, Symantec invest in sales and marketing staff to support the local customer. In addition, technical skillset of the local professionals is evolving. Most of the people marketing tech products in the US/EU or Japan have made the transition to marketing from engineering. This is the key difference between them and other marketers, who may have classical MBA degrees with no technical education. Technology marketers need to understand the technology they are selling in order to speak the customer's language. Engineers tend to trust people who have previous engineering experience. This skillset is now available in India.

However, the most important reasons why this shift will occur are economical and technological. Due the long running recession in the western markets, most companies have trimmed their marketing staff. The expectation, or perhaps hope, was that the marketers still left standing could be highly compensated and be more productive. While compensations have increased by almost 50% over the last decade, the productivity has not. See this link for an analysis. This is where the law of comparative advantages comes into play. Initially discussed by Adam Smith, it was further expounded by David Ricardo in 1817. In short, the theory is that "why make when you can buy cheaper", an idea proven many times over since the time it was proposed. Indian marketing professionals sitting in India can perform the technology marketing roles more effectively even if they are not more productive on a one to one basis. This is also the exact same reason why technology jobs started and are still being outsourced to India.

A favorite refrain from marketing management is that they need the marketers where the market is. True, but the market itself is moving. While the US remains the largest market for technology products, rest of the world is fast catching up and will overtake the US market in the next few years. Technical innovations have lowered the cost of technology so much that you can make a telephone call from India to anywhere in the world for almost no cost, thanks to the vast networks that connect the world's computers and phones. Calls made using the voice over IP technology are now as good as those made over traditional phone lines. Very soon, the technology will allow video conferencing to get close to the feel of a face to face meeting. Already, Cisco Systems is claiming that its Telepresence technology is as good as face to face meeting. Marketers in India can stay in close touch with the factory, sales offices and customers worldwide just as well as they had been doing from the US or other places.  Some travel will be required, but a typical US based technology marketing person probably spends 50% of travel budget on overseas travel in addition to local travel. Plus, it is probably easier to travel to EU, Japan, China, Korea and other emerging markets from India than the US. 



The location change is going to happen just in the same way that software jobs started getting outsourced to India. Indian schools and technical professionals would do well to get ready for this coming shift as it opens up new opportunities not seen here before.

Has Marketing Productivity Increased Enough Since 2000?

Hi-Tech marketing professionals are now making about 50% more than what they used to make ten years ago, at least in the Silicon Valley, for comparable jobs. While that is great, the question that should be asked is, has their productivity also gone up by 50% as well?

People are certainly busier than they were ever before. Prior to the internet bubble burst, most people worked during office hours with some flexibility. Weekends and late hours were normally reserved for product or campaign launches. The super-workoholics would get into work at 7am or earlier and leave at 7. But, for the most part, that was the end of it. Once you went home, you forgot about work and did what you wanted to do. You could work from home in theory, but internet connections were slow, WiFi did not exist, and laptops were not quite prevalent. Oh yes, and push e-mail had not been invented.

Compare this to today; the first thing a marketing guy does today after rising from bed is to check his Blackberry/iPhone or any other device that supports push mail. All critical items are addressed or bookmarked to be addressed using the laptop before getting ready. Laptop comes out with breakfast and everything that can be resolved without meeting folks in the office is resolved. Then its on to the office and into a series of endless meetings and conference calls that seem to end only at 5pm. Real work often starts at this time and continues till you get home and there is no fixed end time. Real work for marketing people is thinking up marketing strategies, planning campaigns, and generating content for their products, services, groups, which you cannot do while stuck in a meeting. Even at home, before you go to bed, important e-mails are answered or presentations for staff meetings created. Marketing professionals are practically working for 12-14 hours a day, or roughly 50% more busy compared to the 8-9 hour days.

But, does that mean they are more productive? Best measure of marketing productivity is really the sales, so we will need to look at where we were 10 years ago compared to now. If corporate sales are also up 50%, it is easy to prove that productivity has also gone up. Look at the attached spreadsheet to see how many of the renowned Silicon Valley hi-tech businesses have done vis a vis annual sales from 2000 to 2010. The table clearly shows that barring a few companies, most companies have not been able to grow at least 50%, while some have actually regressed. It is very clear from this list that the companies that grew did so because they were able to find new markets, whether through acquisition or through organic growth.

You can argue that the industry has been going through a tough time since the internet bubble burst sometime in 2001 and hasn't had a chance to recover from the great recession of 2008. However, that argument doesn't fly as it is the job of the marketing department to find new markets and customers not just during the good times, but also during trying times, in order to improve revenues.

So, what is our conclusion? While marketing folks have certainly been incredibly busy, they have not been productive enough to justify 50% increase in their salaries. We will look at the effects of this phenomenon in the next article.

Footnotes:

1. I have not considered Microsoft, HP, Dell, Apple, Yahoo, Google and Amazon in this list as essentially they are consumer companies and require a different type of marketing effort.
2. Oracle would have still grown, but not by 164% had it not been for the Sun Microsystems acquisition.
3. Xilinx growth is skewed as its biggest quarter during the bubble was counted in 2001 numbers
4. Amazingly, marketing folks at AMD and Mentor have been doing better than folks at Intel and Cadence.
5. Cypress should be in the growth column if not for the Sun Power spin-off.

 

What is Marketing?

Now that we have established that I am a Marketing guy, let's look at what that really means. At its highest level, Marketing is the art of creating a favorable place for your product in the the customer's mind. Why do you need to create a favorable place for your product? The answer is quite obvious - if you are in the business of selling anything - product, services or even ideas, you need to convince your customer. Unless the customer is convinced that your wares are making a compelling difference in his life/work, he will not bite.

Thing to note is that a customer is not always someone external to your organization, but can be internal too. For example, purchasing departments within large companies have engineering or R&D groups as their customers. Customers need not be individuals; many times businesses market and sell products to other businesses - this is known as B2B marketing as opposed to B2C marketing. There is a distinct difference between how you market to individuals and how you market to businesses. Sometimes, it is even possible that your customer may not even pay for your wares. NGOs often need to convince people that the initiatives they are fighting for are just causes and in this case ordinary citizens become the customers of the NGO. As you can see, every organization, be it a business, Government department, NGO or School, needs to create a favorable place for their merchandise in the customer's mind.

Now, what is this favorable place? It really is a good perception about your product in the customer's mind. If you get there, the customer is going to be more likely to buy. I am loosely using the term product here, but you can replace it with whatever you are selling. This is where Marketing comes in. Lots of entrepreneurs think that Marketing is a waste of money and it would be better spent on R&D. However, if you get into business with that mindset, your likelihood of tasting success is greatly reduced. Ram Shriram, a veteran VC and founding investor in Google says that US based product companies typically spend 1/3 budget on R&D and 2/3 on Sales and Marketing. In the Indian context that ratio is likely to be 1/10 on R&D and the rest on Sales and Marketing (Thanks Amit Paranjape for the note), though Sales will eat up a major chunk of the budget. This is not to say that you have to go for full bore Marketing from the initial get go; your campaign must be linked to and measured against your corporate goals.

Marketing must employ all the tools within its arsenal when going about creating this favorable impression. It must use a smart strategy to create a compelling need and then work out tactics to execute that strategy. It must effectively use all channels available at its disposal to communicate with the customer; web, social media, ads, direct marketing, trade shows, article placements and others to create a buzz about the product. It must work together with the Sales and Distribution teams to make sure that the same message is being delivered to the customer regardless of the channel. Finally, it must do constant strategy reviews and improve upon what is not working. However, before doing all that, Marketing must create a position for the product in the market. What is product positioning? We will look at that in detail in the next blog.

While Marketing is in charge of building up the perception, the product must be able to back it up - it takes no time for all the hard earned efforts to go down the drain if the product quality is poor. Case in point, Toyota; their failure to come clean about quality issues for a number of years has created a huge impact on their top and bottom lines and a company that prided itself on quality is now grasping at straws. They will eventually climb out of the hole but it is going to take a lot of hard work. Ford also got similarly grilled a few years ago because their SUVs used to roll over injuring/killing occupants, but now you don't hear a peep about it. How did they manage to do it? They employed very good marketing tactics and backed it up with a number of technical improvements that helped with the stability.

Ultimately, your businesses is going to be successful if all departments are working together and delivering a great product experience which goes a long way in creating that favorable place.

What do I mean when I say I have a marketing company?

Whenever I meet new people, they obviously ask me what I do for a living. When I was employed, the answer was real easy. However, since I moved to Pune to start Markonix in 2006, I was stumped - how do I explain to people what I did for a living?

The whole idea behind Markonix was to utilize India's educated English speaking talent to reduce Marketing costs for companies in the developed world, be it strategy, campaign or collateral. But, how do you explain that to people who are not marketing savvy? I tried various approaches; I said I was a marketing consultant or that I have a marketing company or sometimes even "I don't do anything". Why?Because the next round of questions would invariably prolong the pain. Most people in India had no idea as to what a Marketing consultant does while Silicon Valley folks take a dim view of marketing consultants, many times rightfully so. Also in India, Marketing is akin to distribution and I have been asked many times what my line card looks like.

The idea behind this blog is to really tell people what Marketing is and what it is not. I also want to share the experiences I have had in working with hi-tech companies over the last so many years and hopefully marketers around the globe can get something out of it.

More on marketing in a short while ...