KPO Experts India has indicated that Knowledge Process Outsourcing (KPO) is a step ahead of Business Process Outsourcing (BPO), referring to it as a process chain consisting of high-value-added activities. The fulfillment of business objectives in a KPO engagement model depends to a large extent on domain knowledge, analytical and execution skills, and experience and business expertise. Traditionally, the strongest talking point for marketing the KPO concept was the price advantage that India offered. Cost-benefit used to be the primary value proposition in almost every KPO marketing strategy in earlier times, and was considered to be the major advantage, based on which India was likely to constitute the $17 bn global KPO market, as forecast by the National Association of Software and Services Companies (NASSCOM). However, the cost advantage is seen to be waning in recent times. Labor costs are increasing due to rising salaries and real estate rates are formidable, despite the recession. Hence, KPO firms have moved away from projecting the cost advantage as their primary value proposition to prospects, even as a whole new range of benefits from outsourcing have emerged, such as access to high-quality manpower on demand, subject matter expertise, scalable infrastructure, objective perspective in analytical services and streamlined processes. This paper explores some of the ways in which KPOs in India are presently marketing their services, whether and how their marketing techniques have changed in view of recession-induced challenges, and how KPOs are differentiating themselves vis-à-vis competition.

Perhaps the maximum opportunity for marketing that recession has brought is to the outsourcing segment. Call centers and plain Business Process Outsourcing (BPO) services have given way to the new high-value offering called Knowledge Process Outsourcing (KPO), which seems relatively unaffected by the recession, but not quite. Because of the higher margins associated with KPO services, a large number of BPOs, typically IT offshoots, have rolled out their KPO operations, augmenting competition in the industry. While outsourcing still holds profound strategic significance for companies that regularly outsource, major outsourcers that have suffered a financial impact have placed immense price pressure on Indian KPOs. While typical KPO marketing strategies, even before the recession, have always highlighted the cost-benefits of outsourcing knowledge processes, competition and pricing pressure during the recession have steered the focus of KPOs from traditional process innovation towards adopting and implementing novel marketing strategies. With major captive BPOs pulling out of the market due to burdening overheads, innovative approaches to marketing have become necessary in an attempt to survive, transform into third-party vendors, or embrace KPO service segments. Discussed below are some of the marketing challenges that Indian KPO companies had to face and also a discussion on some of the strategies companies adopted to retain/acquire customers and develop business.

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