Consumer Behaviour Analysis of Telstra in the Telecom Industry of Australia

This article analyzes the consumer behaviour of the telecom industry in Australia with a focus on Telstra. It discusses the nature of the industry, the target market, and situational issues influencing consumer decision making and brand switching behaviour. The article also provides recommendations for sustainable marketing solutions to Telstra.

Marketing Consumer Behaviour
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Contents
Introduction................................................................................................................................3
Nature of industry/ Market and buyer decision making behaviour............................................3
Company overview of Telstra....................................................................................................4
The target market.......................................................................................................................4
Situational issues influencing consumer decision making and brand switching behaviour......4
Recommendations of sustainable marketing solution to Telstra................................................5
References..................................................................................................................................6
Appendix....................................................................................................................................7
Appendix A : Questionnaire for survey on consumer decision making and brand switching in
telecom sector in Australia.........................................................................................................7
Appendix B: Data analysis of the responses of the survey.......................................................7
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Introduction
Consumer buyer behaviour analyses is the process of understanding the buying pattern of the
final customer of a firm (Kengtho, 2011). A firm needs to understand buyer behaviour in
order to create a marketing strategy to target the customer in a particular way.
Telecommunication and mobile phone industry is rapidly growing and major players need to
understand determinants of buyer behaviour to increase their market share and to generate
greater demand for their product.
Nature of industry/ Market and buyer decision making behaviour
Major tool through which marketers identify consumer behaviour is through the consumer
decision making process (Ammi, 2013) . As per consumer behaviour theory, consumer first
identifies a need. Then he seeks information. Further, various alternatives are evaluated, then
the purchase is made. This is followed by post purchase assessment of the product.
Telecommunication and mobile phone industry is a growing industry in Australia. (ACCC
report, 2018) Telecommunication has become a basis need of business and public throughout
the world. Therefore, this sector has seen unprecedented growth in the last decade due to
huge consumer need identification.
Revenues from the Telecom industry were reported to be around $43 Billion in 2017 (IBIS,
2018) . The telecom operators are growing at a rate of 1% and are expected to grow steadily
over the next five years. Industry operates in price-based competition with maximum players
offering additional value-added services over capped plans (IBIS, 2018).
Telstra is the market leader with 50% market share in local market (IBIS, 2018). However,
the market is homogenous in nature where there is not much difference in the service
provided by all operators (IBIS, 2018). Additionally, high technology cost poses as an entry
barrier making the industry oligopolistic in nature (IBIS, 2018). Therefore, there is very high
competition between a few firms like Telstra, Vodafone and Optus.
Consumer decision making process in service industries is determine by service quality,
service delivery speed, price, offers and peer group preferences (Altinay, 2015).As per
studies conducted on the telecommunication sector of Australia, the major factors which
decides buying patterns are service quality, data speed and price. Customers also focus on
offers while purchasing telecom products (Bhatti, Abareshi, & Pittayachawan, 2016)
Additionally, peer group pressures cause brand switching. This happens mostly among
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students’ group where new offer on a product may cause the customers to switch to another
brand (Islam, D’Alessandro, & Furner, 2016). Therefore, to create sustained customer choice
in its favour, Telstra needs to focus on service quality and offers.
Company overview of Telstra
Telstra is one of the most important and largest telecom services operators in Australia. The
firm offers telecommunication products like voice, internet access, pay televisions etc.
(Telstra, 2018).Telstra has created a huge market presence through acquisition of smaller
providers and enjoys 50% market share in the country (IBIS, 2018). The firm has well
developed infrastructure like telecommunication servers, towers operational facilities etc
(Telstra, 2018).
The company has been heavily investing in new technologies like fibre to the node network,
LTE 4G and mobile broadband to induce increased service quality so that customers continue
to choose its services (Telstra, 2018). The market for high speed mobile technology is on the
rise; hence, Telstra has an opportunity to get consumers of its competitors to switch brands
Nature of product in this market is homogenous (Altinay, 2015). That is, basic product
offered by various brands is similar. Hence, the firm needs to give increased attention to
service quality to continue to influence consumer decision making process in a positive way.
The target market
The target market for Telstra includes all the people who like to use cellular technologies. It
includes students, young professionals, business houses, housewives, working women and
people from all walks of life (Telstra, 2018). Therefore, the firm can use segmentation
strategies to pinpoint its target market.
Segmentation is dividing the market into smaller groups based on similar attributes (Ferrel,
2012). The firm can use demographic segmentation and include different cellular and data
plans for college students and young professionals (Ferrel, 2012). For students the firm can
have offers on night time data and for young professionals the firm can give corporate
packages for employees including high speed data. Similarly, the firm can have different data
plans as per neds for urban and semi urban areas in tune with geographical segmentation.
Situational issues influencing consumer decision making and brand switching behaviour
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To identify various situational issues in consumer behaviour for telecom users, a survey was
conducted during this research. 100 respondents were chosen as a sample for this research by
using convenience sampling method (Brown, 2013). These respondents were between 20-50
years of age. 50 of them were students while 50 were professionals of both genders. The
questionnaire of this survey and the data analysis is attached in the appendix. Following were
the major findings of this survey
 Cellular technology and cellular services are considered to be very important aspect of
life by customers. Hence, the market is expected to grow further.
 Telstra is the most frequently used service provider. However, propel think that there
is enough choice in the market for cellular services.
 Service quality is considered as the most important feature of a cellular service. 40%
people thought service quality to be very important deciding factor while purchasing a
cellular service. On the other hand, 30% considered brand name followed by price
which was chosen by 20% people. Peer group influences was found to have least
impact on consumers decision process.
 If the current situation continues 70% people said they would not like to switch
brands. However, a whopping 70% said that if competitor gave better service quality,
they would change their service operator. However, only 30% said they will change
their service provider if the competitor gave lower prices. Peer group was the least
influential method of inducing brand switching.
 People got most impressed by television advertising while selecting a service provider
Recommendations for sustainable marketing solution to Telstra
Telstra is the current market leader and the most trusted brand in the Austinian market
(ACCC report, 2018). However, the customer is very conscious about service quality and
considers it as the most important decision-making factor. Additionally, customer can switch
from competitor’s brand if Telstra gives better service quality. Therefore, the firm should
focus on innovation and technology to improve service quality. This will help it in increasing
its customer base and influencing customer decision making process. Emphasis on service
quality will help in inducing brand switching among rival firm’s customer which will in turn
help in formulating a sustainable marketing strategy.
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References
ACCC report. (2018, December 2). ACCC telecommunications report | ACCC. Retrieved
from ACCC: https://www.accc.gov.au/publications/accc-telecommunications-report
Altinay, L. (2015). Enhancing Customer Experience in the Service Industry: A Global
Perspective. Cambridge: Cambridge Scholars Publishing.
Ammi, C. (2013). Global Consumer Behavior. New Jersey: John Wiley & Sons,.
Bhatti, H. S., Abareshi, A., & Pittayachawan, S. (2016). An Empirical Examination of
Customer Retention in Mobile Telecommunication Services in Australia. ICE-B, 72-
77.
Brown, T. J. (2013). Basic Marketing Research. New York: Cengage Learning,.
Ferrel, O. (2012). Marketing Strategy. New York: Cengage Learning.
IBIS. (2018, Dec 3). Telecommunications Services - Australia Market Research Report.
Retrieved from IBISworld: https://www.ibisworld.com.au/industry-trends/market-
research-reports/information-media-telecommunications/services/
telecommunications-services.html
Islam, M. Z., D’Alessandro, S., & Furner, M. (2016). Brand switching pattern discovery by
data mining techniques for the telecommunication industry in Australia. Australasian
Journal of Information Systems, 20, 20-25.
Kengtho, W. (2011). Consumer Buying Behaviour. Berlin: GRIN Verlag.
Telstra. (2018, Dec 3). About Us. Retrieved from Telstra: https://www.telstra.com.au/
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Appendix
Appendix A: Questionnaire for survey on consumer decision making and brand
switching in telecom sector in Australia.
Appendix B: Data analysis of the responses of the survey
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