By Jayashree Nandi
In April 2008 when the world was beginning to feel the heat of economic recession, Chennai-based brothers Vinod and Pramod Harith gave up their marketing jobs with leading companies and invested about Rs 30 lakh to set up CMO Axis.
The category in which their firm could be pigeonholed was the newest outsourcing business to take its first steps in the country then – Marketing Process Outsourcing (MPO).
The brothers claim CMO Axis to be the first MPO of India. What does an MPO do? It’s a single unit taking care of all the marketing functions of a client. It takes care of all those marketing needs which would have otherwise been distributed among different agencies -PR, marketing consultancy, branding, research and more. A client is saved the trouble of hiring multiple agencies for all these jobs.
There are now quite a few MPOs in the country and most of them largely cater to the smaller businesses.
Though MPOs continue to be relatively anonymous entities in a field dominated by BPOs, KPOs and LPOs, CMO Axis has already made it to the prestigious Datamonitor’s Black Book of Outsourcing that lists top global Sales and Marketing Outsourcing (SMO) vendors.
In the book’s 2010 list published last year, it was the only Indian company to find mention, sharing space with the likes of SMO service providers like Genpact and SMO enablers like Google, Hewlett-Packard and IBM to name a few. ”We work with small and medium enterprises (SMEs), who often do not have the muscle to carry out the marketing properly. We suggest that they concentrate on their core function while we take the ownership for their marketing,” says Vinod, who was the global head of marketing communications for Wipro Technologies before he set up CMO Axis.
His brother Pramod, who was heading strategic marketing for the HR firm MeritTrac when he changed track, says that it wasn’t easy in the beginning as people thought they were crazy. “Even we were apprehensive. Most of our clients had to be explained what an MPO was. But marketing is something that doesn’t stop, even during recession.
The MPO alternative helped businesses cut costs and still carry out marketing,” he says. The Harith brothers were proverbially at the right place at the right time and within 12-16 months their company became profitable.
It now boasts of 25 clients, with four of them abroad. “The demand in the international market has prompted us to start operations in the US and the Middle East this year,” explains Pramod.
The MPO model is catching attention of entrepreneurs across the country now, though it is still in its infancy. Last year, Delhi-based Wital See started operating as an MPO. Jyoti Narain, executive director of this new startup says, “Right now, we cater to SMEs only as this sector presents a huge potential for MPOs but in future we may look at other businesses, too.” Narain, who heads a team of about 100, is also trying to tie-up with micro manufacturers of various products, including those in rural areas, to help them reach customers across India.
As MPOs are a relatively new segment of the Indian market and evolving continuously, there is no data to sum up the size of the sector. Narain conjectures it to be approximately Rs 1,200 crore to Rs 1,500 crore. ”Many MPOs do not categorise themselves as one because MPO as a management philosophy has gained momentum only recently,” he explains. Kapil Kashyap, business head of Delhi-based MPO Brandbaron, says that though the concept is new, Indian businesses are warming up to it. ”A lot of agencies are beginning to rebrand themselves as MPOs and many clients choose us over individual agencies when we pitch ourselves as a single stop for everything from market research to retail merchandising, response management, promotional events and PR,” he says. Brandbaron, with offices in Mumbai and Bangalore too, is targeting not just SMEs but also blue chip companies.
The biggest thing that differentiates a BPO from an MPO is that while the former largely caters to offshore clients, the latter’s target clients are Indian and mostly SMEs. With the SME sector supported well by figures -it contributes about 45% to the industrial output and 40% to the exports and is projected to grow at about 20% in the next few years – the MPOs have a huge potential to tap. And deliver, they say, they will.
Source: Economic Times