Telstra SWOT Analysis and Marketing Strategies

IntroductionTelstra Corporation is a telecommunications and information services company. It provides a range of services including fixed line services, Internet access, and business services. Telstra is the market leader in the telecommunication industry in Australia, with one of the most prominent brand names. However, its products and operating services face an increasing threat from competitors. An analysis with recommendations of Telstra marketing is necessary in order to improve its performance.

2.0 SWOT Analysis2.1 Strengths•Telstra is one of the biggest brands in Australia and dominates the leading business position of telecommunications and information services in this country.

•Telstra owns and operates an extensive network infrastructure which will give it a competitive advantage over industry rivals, whose networks fail to cover all of Australia, especially the remote and rural areas of the country.

•Telstra has the latest technology on mobile (Next G Network) and broadband (ADSL 2 Plus) to compete with other telecomm operators.

•Telstra has 115 owned Telstra branded stores and 153 licensed shops that are strategically located across Australia.

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2.2 Weaknesses•Telstra is lack of initiative to diversify internationally and limits its growth strategy.

•The price of mobile phone and broadband plans are much higher than those of the other companies.

•Telstra reduced fixed line advertising and invested a huge budget on promoting new products such as Next G Network.

•Telstra is keeping focusing on postpaid mobile phone plans rather than prepaid mobile phone.

2.3 Opportunities•Telstra is the Australian government's contracted data supplier. Through a government initiative, Telstra expanded its CDMA network to rural areas.

Therefore, the company has one of the most extensive CDMA networks in Australia.

•Telstra has expanded their services into a highly demanded section of the telecommunications market with the implementation of 3G. It leads to the increasing demand for broadband.

•The increasing demand for broadband has been a shift from dial-up to ADSL 2 Plus broadband connections. And apparently, it will be followed by the huge demand for the faster Internet access among the existing users.

2.4 Threats•The mobile phone market nearly reaches saturation in Australia.

•The customer behavior has significantly changed; Telstra will find it increasingly difficult to compete for new customers.

•Telecomm equipment was damaged by bushfires.

•ACCC mandated access to Telstra's local network by issuing local loop unbundling makes the competition fierce in Australian telecom market.

3.0 Marketing Situation Analysis3.1 Existing and Potential SegmentsIt is very important to define market in terms of segment, as it will facilitate fine-tuning the efforts to target the market.

Based on Telstra's marketing research, the target segments are aimed towards understanding and satisfying its customer needs (Shanahan 2006). As Telstra services a wide demographic of customers, its products are segmented according to the different target markets.

Telstra's core businesses are landlines, mobile phones, internet and information services. And its current segments are individual & family, small business, business enterprise and government. Basically, Telstra has covered most of the available segments in its businesses. For the future expansion of Telstra, the company should provide better services to the existing segmentations and also aim the international market.

Telstra could offer new services such as music downloads and streaming media, which require broadband access speeds, development of faster and cheaper broadband technologies, and government programs to extend broadband coverage. For mobile phone customers, Telstra could add more 3G content for diversities need. This changing trend would be one of the key growth drivers for Telstra.

As the biggest telecommunication provider in Australia, Telstra should extend its market internationally. Developing countries, such as China and India, are the potential market for Telstra in the Asia-Pacific region. And the target segments may include rural area (Farms), business and government.

3.2 Telstra Market PositioningTelstra's target segments are based on knowing customers and meeting their needs. And its positioning strategy is to express the valuable differences on products and services offered and create competitive advantages. To position Telstra and capture its target segments most effectively, the followings need to be taken into consideration:•Important: the key difference to promote is the scope and reliability of Telstra products and services.

•Distinctive: promote the distinctive features such as the easy access to broadband via mobile, Satellite, ADSL2 Plus and the extended features of using mobile phones.

•Superior: promote quality and the multi-functional applications of our products and that services are superior to most of our competitors.

•Communicable: the above mentioned features are communicable and customers can easily identify the differences.

•Affordable: the above mentioned competitive advantages offer high value benefits and our target market can afford the prices.

•Profitable: one of the key criterions for selecting the above competitive advantages is that the company can introduce them profitably.

4.0 Marketing objectives:The marketing objectives of Telstra for the future market are:•To segment the industry and focus upon the target customer group in the identified target region.

•To create public awareness programs targeted at these markets and position them accordingly.

•To position the company as unique, offering specific products to the target customers that satisfy their requirements.

•To continue international expansion and growth, particularly in Asia Pacific Region.

5.0 Marketing StrategiesThe 7 P's marketing strategy is the key element in marketing functions. All the marketing objectives mentioned above can be achieved in practice by improving the current existing marketing strategies5.1 ProductTelstra provides various products and services in the telecommunications industry. They are landlines, mobile phones and the internet.

Telstra must ensure that its products are meeting the needs of the customers. In a product life cycle, the different features of the product should be observed, such as quality assurance, technology and appearance. For instance, after the internet speed is observed to perform poorly through customers' experiences, Telstra need to keep the broadband innovate and improve the performance.

Telstra fiercely competes with the existing conventional mobile phone service providers, and the growing market and untapped potential will introduce Telstra to the more fierce competition. Accordingly, the point is to differentiate Telstra on the notion of customers' services and products innovation, and establish Telstra as a Modern high-tech telecomm company.

Customer service could be one of the competitive advantages. Therefore, Telstra should improve the ways to provide information or assistance such as through 3G phone broadband, S.M.S and video message to customers.

5.2 PriceTelstra seems to set prices higher than competitors on some of its products offered. This means that the firm is less willing to participate in price wars and is more willing to fix prices.

The pricing policy that Telstra chooses will reflect the market aimed at. Prices may be set to attract customers or to maximize profit. They may even be prepared to suffer from short-term losses in order to obtain a large market share. Telstra may use such pricing policies as cost based pricing (prices are based upon costs), market orientated pricing (prices are based upon the analysis of the market) and competition based pricing (prices are largely based on how competitors charge for their products).

5.3 PromotionTelstra would use promotion techniques to gain a competitive advantage. This could be done by above-the-line promotion (promotion through an independent media), such as television advertisements, newspaper advertisements, radio and posters advertisements, and below-the-line promotion (the firm has a degree of control over the methods it uses), such as personal selling, direct mailing, trade fairs and product endorsements.

Telstra has spent a lot of money on big name sponsorships such as Telstra Dome, Telstra Stadium and National Rugby League. However, sponsoring a name may not be the best way to attract customers. Telstra can reduce the expenditure on big name promotion and invest more money on advertising through other methods such as mobile phone S.M.S competition, blue tooth participation survey and live experience stories on Telstra's products.

5.4 PlaceTelstra stores are widely located throughout Australia. Telstra should keep up their efforts on good locating in order to gain a non-price competitive advantage over the other market providers.

For international market, it's good for Telstra to locate its own shops in the main cities of other countries rather than have a joint venture with local dealers. It will build up Telstra's image and brand recognition in those countries.

5.5 PeoplePeople with various non-English speaking backgrounds are employed by Telstra to serve consumers. That is a key element to satisfy the customers.

Telstra takes people into consideration in the marketing mix very seriously. Therefore, it should keep training staff in order to deal with customers better, and having the staff putting themselves in the customer's position to understand what the customers want and talking to the customers on the same level, for example, they should not use technical jargon to the customers.

5.6 Physical EvidenceEven though the good is intangible, the customer can still feel that the physical environment of the stores. This will be displayed by the outlay of the stores and the memorabilia such as Rugby team shirts in the case of Telstra.

The psychical evidence is very important because it will influence the customers' first impression to the products. The Telstra stores are clean and tidy. However, compared with Vodafone and Hutchison 3, Telstra stores are too crowded and packed in the city. Therefore, in order to gain a better image from customers, Telstra should re-arrange the products display and make more spaces for customers in peak hour times.

5.7 ProcessSometimes Telstra will have some survey to customers in order to provide better services. For example, customers will be asked about the projected time spent on the phone and what time they use the phone or international calls in order to find the best deal. However, this may be a hindrance to the customers, especially when they feel that too many questions are asked.

Telstra should consider the selling process as an important element, if it hopes that the customers can get their products as fast as possible and what the customers require. The mystery shopping revealed that customer was being pressurized by staff when purchasing a Telstra mobile phone. It resulted in an unenjoyable experience for the customer. Also, the new users took a longer time to apply for the latest technology next G network due to unfamiliarity with the new product.

Telstra should train staff to serve customers better in order to make the customers get the products they want without hassle. A more efficient way to purchase products and services on the Telstra website will also speed up the buying process.

6.0 Marketing Actions and ProcessesFor Telstra's future expansion and effective implementation of the marketing strategies mentioned above, the following marketing actions need to be executed:•Continuing to transform its corporate culture and assign an image ambassador to improve public relations with the corporate objective of serving the customers better.

•Establishing ongoing staff trainings in order to update new products' information and serve customers better•Promotions on innovative products and services including a range of data and information services such as wireless communications markets and 3G networks.

•Collecting data and feedback from customers and suggestions on products and services.

•Marketing selected international investment, acquisition and alliances, particularly with enterprises engaged in mobile telecommunications, data, the Internet or content-based businesses.

•Using its broadband capabilities to develop and market additional broadband applications and to further penetrate to the pay television market in Australia.

7.0 Marketing Measurement and Monitoring ProcessesTelstra can implement various measurement and monitoring techniques to achieve the marketing objectives better.

•Gain feedbacks from Telstra customers through questionnaires•Give feedbacks to employees on their performance through training•Regard service quality of the employees as a critical criterion in the motivation mechanism•Record the sales of each employee to indicate the efficiency respectively•Monitor customer and employee interactions during business operations•Measure the change in overseas market share8.0 ConclusionThe marketing strategies are prepared for achieving Telstra's marketing objectives. Currently Telstra has only few direct competitors. However, the untapped and potential market will certainly introduce Telstra to core competitors in the future.

The new Next G Network market is still in nascent stage and to be explored. The entry to this market gives Telstra many opportunities to explore and gain footage in the market but simultaneously it is accompanied by many challenges.

The growing concern about technology innovations will enhance the market growth in the future; this trend is a major input to the continuity in this business. Telstra still has to continue research and development to create better products with improved features.

9.0 References

Shanahan J. 2006, Consumer-centricity: An idea whose Time Has Come, Australian Marketing Institute, viewed on 5 December 2006, Optus, viewed 24 January 2007 Hutchison 3, viewed 24 January 2007, Telstra, viewed 24 January 2007 Vodafone, viewed 24 January 2007 < http://www.vodafone.com.au/>