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Market Segments And Decision Making Of Telstra

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Question:

Discuss about the Market Segments and Decision Making of Telstra.
 
 

Answer:

Introduction:

Telstra Corporation Limited (Telstra) is known as Australia’s largest telecommunication company. It is renowned as the pioneer in providing 3G and 4G services in Australia. It is famous for establishing and operating telecommunication networks and market voice. It offers mobiles, internet connection, pay television service and other entertaining services to its consumers. It has been founded in 1975. Headquarter of Telstra is situated in Melbourne, Australia. Telstra is known for its efficient service and embracing new changes to provide its customer quality service. Telstra is associated with Olympic Games and Para Olympic Games (Gardell, 2014). It has been nominated as the communication partner to provide high-level communication infrastructure for mobile, telephone and high definition television. According to the management, this collaboration will be beneficial to promote the brand name of Telstra in Australia and Asia-Pacific region. Telstra is spreading its network in global market as well. Telstra has built its offices in nine Asian Countries, United Kingdom and United States.  The main objective of Telstra is to flourish the organization and lead the global communication industry. Telstra is implementing new strategies to provide more efficient service to its customer. In order to pay more attention to its customer Telstra is structured into five strategic business units and three corporate centre functions. Telstra has transformed its culture from being a government dominated organization to a private corporate company. It has developed new corporate culture within and outside the organization. It is increasing its workforce day by day to influence the productivity and maintain the market demand. They are trying to maintain the discipline within the organization to establish Telstra as a powerful and efficient service provider in the telecommunication world ("Telstra.com.au", 2017).

The following article has reviewed different marketing segments of Telstra and identified the target market of the organization and the strong competitions of the organization. It has presented a position map of the organization to provide a transparent view of the Organization.

 

Industry Trends:

The scenario of telecommunication industry has been changed in Australia. According to some reports, the telecommunication industry of Australia is getting stronger day by day. The earned revenue has been reached over $42 billion in past few years (Noel, 2015). Second tier providers are majorly responsible for the drastic success of telecommunication industry. The number of second tier providers has been grown over 10% in last few decades. The leading communication organizations are facing difficulties due to these second tier service providers. Although Telstra is considered as the leading telecommunication company in Australian telecommunication industry, it is also facing various obstacles due to the rise of second tier service providers. Due to this type of market communication, the price of the fixed line and mobile voice services has driven down in the telecommunication industry (Gardell, 2014). It has influenced the growth of the mobile broadband market. The leading organizations like- Telstra, Vodafone, Optus are having trouble due to the growth of such practices. However, they are also enforcing new techniques to maintain the satisfaction level of the buyers. Australian broadband sector is improving due to the implementation of new and innovative technologies. This type of improvement has been considered as beneficial for both service providers and the consumers (Liu, 2014).

Being a leading telecommunication industry of Australia, Telstra offers a wide range of telecom services in all over Australia. This telecom services encompass mobile voice services, telecommunication networks, internet service and television network and so on. Telstra is still dominating the local telecommunication market of Australia (Crouch & Davies, 2013). Telstra has taken number of strategic investment policies; this innovative step has strengthened the position of Telstra in e-health services market. Telstra has invested more than $5 billion in over three years in its mobile network service. Telstra has increased the mobile network speed up to 600 mb. Telstra has implemented various new techniques like e-health to enhance the market demand and the level of customer satisfaction. Telstra is committed to invest more than $3 billion in coming three years to enhance the concentration on the customers and provide them quality service. The sales ration of Telstra has been increased to eighteen percent. Telstra is considered as a giant in telecommunication industry of Australia (Grechyn & McShane, 2017). It not only preserves a strong financial background but it has owned a strong position in the business world by taking remarkable initiatives in business development. It always welcomes new and innovative business ideas and technologies. Telstra has successfully set a strong image among the industry by maintaining a healthy relation with both the conventional and modern communication system.

 

Pestle Analysis:

Political Factor: Telstra, being a leading telecommunication company in Australia often faces various issues related to regulations. Government often wants to dominate the organization and run the organization accordingly. However, it is one of the major political issues faced by Telstra.

Economical Factor: Although, Telstra is an economically sound organization, but the emergence of tax rates, inflation affects the financial structure of the organization. The service charges are also increasing due to the rise of production cost. It may lead the organization to meet an unwelcomed consequence (Pallegedara & Warren, 2016).

Social Factor: The growth of telecommunication is restricted to the urban areas. Internet and other mobile services have become an integral part of the human life. The only reliable source that can provide these supports to the people is the telecommunication industry. The natives of rural areas also expect this help form the telecommunication companies. Thus, it is one of the key issues that Telstra is experiencing every now and then.

Technological Factor: Smart phones, voicemails have become very important part of everyone’s life. In this modern era, people demand internet connection in every step of their life. Wi-Fi has been established into buses and cars also. Such practices has increased the production cost of Telstra. It is a key challenge for the organization.

Legal Factor: Telecommunication industries often various legal issues related to government and their consumers. It can harm the reputation of the whole organization. It is considered as one of the major challenge for the organization.

Environmental Factor: Global warming and climate change is one of the biggest villains for Telstra. It harms the employment strategy of the organization. Telecom industries are often accused as the villain to harm the environment for implementing new technologies. This is considered as the challenge for Telstra.

 

Market Segments Overall:

Demographic variables: Telstra considers various age groups, gender and income groups while constructing their strategies. An exemplary example of such strategy is their special SMS plan for the younger generation. Telstra has introduced this plan to attract the youth of the society who message their friends frequently. Telstra has offered various plans for different income group. Telstra has concentrated on both the genders of the society. As female are fond of the designs and colours, Telstra has offered them some mobiles according to their choice. On other hand, Telstra has introduced some mobiles that consist of various features for their mail purchasers (Taylor, 2015).

Geographic Variables: Telstra has divided their customers based on the cities and states. According to the management of Telstra, the geographic condition plays a vital role in market demand, for example- Melbourne has more working class people, on the other hand small districts like Albany has different type of people. Telstra has established various marketing strategy for everyone. An exemplary example of such strategy of Telstra is their 3G plan. Telstra offers their 3G service to the big cities only, as this plan is costly and unaffordable for the lower income group. Telstra authority is aware of the fact that they can draw the attention of maximum number of potential customer in the major cities.

Psychographic Variable: Psychographic variable is mainly based on the different class of the society, life style and personality.  Telstra has paid special attention to psychographic variable. They have introduced various plans for different group of the society. An exemplary example of such plan is their SMS plan for the fun seekers. Telstra has offered their service to the high achiever groups who wants to stay updated and and use latest techniques. Telstra has provided their services to the people for whom family comes first.

Behaviouristic Variable: Telstra has focussed on the tow type of consumers- low usage customer, big spender. They have introduced their 3G service for the high usage consumers and message scheme for the low usage customer (Rapp & Stroup, 2016).

Target Market: Primary target market of Telstra is the people of major cities. Maximum number of people who live in the big cities are working and fond of new technologies. Telstra has taken them as the primary target market. Telstra has introduced new services for them like 3G service (Khachaturian, 2015).

Secondary Target Market: Secondary target market of Telstra is the lower income group. They have introduced some schemes in an affordable price.

Primary Segment and Decision Making:

The demand of the primary target market has a great impact on the decision making process of the organization (Nagendra & Kansal, 2015). Telstra has concentrated on the demand of their primary target market. They embrace new technologies and techniques to influence the demand of their purchasers. The primary segment of Telstra is the working professionals. The maximum numbers of people of working class are very much fond of technologies. It has influenced the Telstra management to make some efficient strategies to fulfil their demand (Heenetigala, & Lokuwaduge, 2013). Telstra is known as the pioneer of 3G and 4G services in Australia. They have introduced these services to meet the expectation level of their primary target market. Telstra pays close attention to the requirements of their consumers. They have introduced new and innovative mobile phone with unique features for the customers who are interested in new technologies (Congedo, 2016).

 

Competition:

Telecommunication companies of Australia are giving a tough competition to each other. All the organizations are implementing new technologies to enhance the market demand and satisfaction level of consumers. There is a huge competition between all the leading telecommunication companies regarding mobile networks. Almost all the companies are offering 3G and 4G services to their consumers (Pavlidis & Hawkins, 2015). All most all the telecommunication organizations claim to cover the maximum geographic area. It means they cover 99% area of the total land mass. However, it is often evident that people are suffering from poor network service. The major competitors of Telstra are Optus and Vodafone. The growth of the two tire service providers are also considered as the biggest challenge for the other leading companies in the telecommunication world of Australia (Perumal & Walker, 2014).

Optus is considered as the major rival of Telstra. Although Telstra is the leading company in the telecommunication industry of Australia, it is facing various difficulties due to the rise of Optus (Crouch & Davies, 2013). Optus has set an unique example by offering a mix of Frequency Division Duplex (FDD) and Time Division Duplex. Optus possess lesser spectrum holdings than Telstra, but Telstra has a wide range of holdings. The speed of Telstra is higher than Optus. On other hand, the service price of Telstra is higher than Optus (Middleton & Park, 2014). Optus is restricted within the capital city to provide it service. On other hand, Telstra is covering a wide range of geographic area. Optus has named its 4G network service as “4G plus”. It is an easy, informal and pure marketing term and easy to remember than Telstra’s “4GX”. The market share of Telstra is consecutively decreasing. It helps the competitors to create pressure on Telstra. However, Telstra is still leading the industry by sixty percent of total market share (Wilken et al., 2015).

Positioning Map for Telstra:

The positioning map of Telstra is defining two major sector of the organization- Competition of the organization and the involvement of primary segment in the decision making process of the organization. As per the earlier discussion it can be stated that Primary segment plays a vital role in influencing the decision making process of the organization. The presented figure of positioning map is displaying the active involvement of primary target market in constructing the strategies (Smith, 2015).

Therefore, it can be seen in the presented framework that the major competitors of Telstra are Optus and Vodafone.  They are giving tough competition to the leading telecommunication organization of Australia, Telstra. They are offering same services like Telstra and trying to reach to the maximum number of people.

Conclusion:

As per the previous discussion, it can be stated that Telstra has set a milestone in the telecommunication industry. It has brought some revolutionary changes in the history of telecommunication network. It provides its customer a wide range of services like- mobile network, broadband services, pay television network and mobile sets. Telstra always concentrate on the requirement of their buyer. The authority of Telstra considers the influence of geographic, behavioural, psychographic and demographic aspect while establishing and implementing new strategies of communication. Telstra is well known for embracing new and unique techniques to improve the productivity and enhancing the market demand. The primary target market of Telstra is the working class and the youth and secondary target market is the low-income group. Telstra has offered various schemes for both the market segment. In spite of being the leading organization in the world of telecommunication, Telstra often faces various obstacles to achieve the target due to the rise of the two major rivals – Optus and Vodafone. These two companies are also renowned for their efficient and affordable service.  Apart from the competitors, there are several other political, economical, legal, environmental, social challenges are being faced by the authority of Telstra every now and then. To overcome those challenges Telstra must maintain a healthy atmosphere within and outside of the organization. They must pay special attention to such challenges that can demotivate the growth of their organization. Telstra needs to boost its productivity to meet the increasing market demand of the consumers. It must implement some more efficient strategies to beat the competitors to achieve the target market.

 

References

Attachment, B. (2013). Extending remote and rural cellular mobile.

Congedo, P. (2016). Functional or Structural Separation to Deal with Vertical Foreclosure Effects in the Electronic Communications Industry. Rivista Italiana di Antitrust/Italian Antitrust Review, 2(3).

Crouch, A., & Davies, S. (2013). A coordinated satellite and terrestrial microwave backhaul for cellular mobile in remote and regional Australia. Australian Journal of Telecommunications and the Digital Economy, 1(1), 2.

Crouch, A., & Davies, S. (2013). Backhaul for remote cellular mobile. Australian Journal of Telecommunications and the Digital Economy, 1(1).

Gardell, B. (2014). Information and Communication Technology: Slovenia's Catalyst for Economic Growth.

Grechyn, V., & McShane, I. (2017). What Influences International Differences in Broadband Prices?. Australian Journal of Telecommunications and the Digital Economy, 4(4), 89-105.

Heenetigala, K., & Lokuwaduge, C. S. D. S. (2013). Directors Duties and Responsibilities towards other Stakeholders: A Discussion of Case Studies on Corporate Disasters. Journal of Business Systems, Governance and Ethics, 8(1), 51-58.

Khachaturian, T. (2015). Services Trade Restrictions and Company Profits: Telecommunications.

Liu, A. (2014). Climate Change Securities Disclosures in Australia.

Middleton, C., & Park, S. (2014). Waiting for the national broadband network: Challenges of connectivity in regional Australia.

Nagendra, A., & Kansal, S. (2015). Reducing Carbon Footprint through Green HRM. SAMVAD, 8.

Noel, A. (2015). A great result but Telstra is facing threats

Pallegedara, D., & Warren, M. (2016, January). Unauthorised Disclosure of Organisational Information through Social Media: A Policy Perspective. In IDIMC 2016: Exploring our digital shadow: from data to intelligence (pp. 86-93). LISU.

Pavlidis, K., & Hawkins, W. (2015). Affordability and 21st century telecommunications services. Australian Journal of Telecommunications and the Digital Economy, 3(2), 27.

Perumal, S., & Walker, R. (2014). Challenges faced by communication providers in meeting regulatory requirements: Analysis of equivalence of input and functional separation.

Rapp, K., & Stroup, C. (2016). How Can Organizations Adopt and Measure Design Thinking Process?.

Smith, N. N. (2015). Thai and Australian foreign business law and the impact of the Thailand Australia FTA. J. Int't Com. L. & Tech., 10, 22

Taylor, C. R. (2015). United States Company Law as it Impacts Corporate Environmental Behaviour, with Emphasis on Climate Change.

Telstra - mobile phones, prepaid phones, broadband, internet, home phones, business phones. (2017). Telstra.com.au.

Wilken, R., Kennedy, J., Arnold, M., Gibbs, M., & Nansen, B. (2015). Framing the NBN: An analysis of newspaper representations. Communication, Politics & Culture, 47(3), 55

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