LB5202 SP21: Market Segmentation Literature Review and Optus Case

This report begins with a literature review of market segmentation, exploring its definition, importance, and various types, including demographic, geographic, psychographic, and behavioral segmentation. The review synthesizes insights from six academic articles, critically analyzing the strengths, weaknesses, and theoretical foundations of the existing research. Following the literature review, the report presents a case study analysis of Optus, a major telecommunications company. The analysis examines Optus's target market, segmentation strategies, and marketing innovations, such as the "My Optus" app, within the context of the literature review's findings. The report concludes by emphasizing the significance of market segmentation in developing effective marketing strategies and adapting to market dynamics.

Running Head : LITERATURE REVIEWAND CASE ANALYSIS
Literature Review and Case Analysis
Name of the Student
Name of the University
Author Note

Introduction
It is found that most of the companies are in the rush of focusing on the customers within
their capability along with the information of the customers. The market is for dividing into
groups of the consumers which are called segments having distinct requirements and needs. The
strategy of dividing the market in few homogenous groups is referred to as segmentation
(Brotspies & Weinstein, 2019). The segmentation as a strategy is being used by companies that
have mass marketing phenomena. The purpose of the segmentation is the marketing energy
consideration along with the force on subdivision for gaining a comparative advantage within the
particular segment. The marketers should put effort on understanding the requirements of
particular target market so that they can deliver the same (Goyat, 2011).. The needs can further
be described in terms of the basic human requirements such as water food near entertainment and
clothing. These are the needs which turn into wants when they are directed to the particular
objects which might satisfy their needs. In this paper, there will be a short literature review
which will incorporate 6 academic articles regarding market segmentation. The literature review
will help in describing, summarizing and evaluating the existing information regarding the
selected topic that is market segmentation. It will be the critical analysis of the strength and
weaknesses along with the theoretical basis of the recent knowledge. After that, the company
will be selected for undertaking a short case study analysis from the perspectives of the extracted
findings of the literature review based on market segmentation. The selected company is Optus
telecommunication company. The Optus telecommunications company is the second largest
telecommunication company which is owned by the Singaporean firm Syntel. The company
trades physically under the Optus brand during maintaining few wholly owned brands as Virgin

mobile, Australia in the market of mobile telephone in order to provide the services. Optus owns
and operates its own network infrastructure and then uses the wholesale services of the national
broadband network along with Telstra. The paper will end with the proper conclusion.
The Literature Review
The concept of market segmentation
The market segmentation is actually the research which determines the way an
Organization divides the customers that are the cohorts into the smaller groups founded on the
characteristics as income, age, trades, personality (Melancon & Dalakas, 2018). These are the
segments which can be used later for optimizing the products along with advertising to various
customers. Through understanding the market segment, one can leverage the targeting in
products, the marketing strategies and the Sales (Hatheway, Kwan & Zheng, 2017).. The
creations in the marketing Communications is the advanced targeting and add messaging on the
digital platforms as Google and Facebook having used segmentation helping for better response
rates and causing lower costs. The market segments mother can power the product development
cycle through informing the way one can create the product offering for various segments as
high income versus low-income, men vs. women.
Importance of market segmentation
The segmentation helps marketers in identifying particular groups of customers, the
behavior of whom is different from the other people. This helps the companies in adjusting their
marketing mix catering to the specific needs of various market segments. There have emerged
few particular segmentation bases being the most popular in the segmentation studies such as the
Geographic segmentation, the psychographic segmentation, the demographic segmentation and
the behavioral segmentation (Jia, Wang & Xiong, 2017).. The segmentation based that is

selected for subdividing market depends on different factors as the type of product, the method
of distribution, the nature of demand, the media which is available for the market communication
along with the motivations of the buyers.
The type of market segmentation
The demographic segmentation is the classification which is based on the individual
attributes such as the geography, the education level, the gender, the income level. The decision
criteria in demographic segmentation are applicable to people who have smaller business or who
are running the first project. The Geographic segmentation is based on the region such as the
country, the continent the neighborhood or state (Dibb & Simkin, 2016). It further depends on
the size of Metropolitan area that is segmented as per the population size, the density of the
population and climate. The psychographic segmentation is founded on the aspirations,
attributes, the individual values and some other criteria. The example of the psychographic
segmentation is the lifestyle, the values, opinions, the personality traits (Sarti, Darnall & Testa,
2018).. The companies target the customers founded on the values, the lifestyles under the
psychographic segmentation. The behavioral segmentation is the classification related to the
behaviors as Technology use, the product uses. For example, the purchase decision, the uses
benefit, the types of occasion and others. Through the segmentation, the company wants to target
the consumers founded on the particular purchasing behavior.
It is further found from studies that there are different factors which can be highly
responsible for the traditional market segmentation and the modern world. It is revealed through
study that the earlier demographic factors which were found very best for the segmentation are
no longer that much effective in the FMCG sector specifically. Surprisingly there is an effect of
the gender along with educated or non educated consumers on the personal care product

purchase. Hence there is no requirement of developing effective marketing segmentation because
it is more connected with the gender of the purchaser (Liu et al., 2019).. There is also a study
which shows that market segmentation is one such necessity which can directly affect the
company and make huge profits for it. There is a need of theoretical foundation for the market
segmentation that can help the FMCG companies segment the market for gaining fruitful results.
Studies show that the techniques of market segmentation depend on the descriptive factors
pertaining to purchasers and not those efficient predictors of the buying behavior of future
(Goyat, 2011).
The case analysis
The case study organization is Optus Telecommunication Company which operates
mainly as its own network infrastructure to provide some services. It further makes use of the
services of national broadband network and Telstra. Then it provides the wholesale services
having incorporated the 4G mobile and the satellite with providing the wireless internet services.
It is considered to be the biggest satellite wholesaler in Australia (Optus.com.au. 2020).. It is
found that the major target market of Optus mobile aligns primarily with the business group
specifically the corporate offices along with the residential group.

Also according to the demographic segmentation of the Optus mobile market the residence who
are under the age group of 15 to 40 years are the biggest target group for this specific brand. Also
people who are middle aged and have high income level are the target group for this specific
brand. In Australia, the mobile access rates are regulated by the government. Optus is also found
to be creating the proactive self service experience through My Optus app which helps in
knowing the bill of the month along with integrating insights around the data individual has used.
It also allows one to pay through the app in simple ways and there are also options of buying
Optus perks through this app.

It can be said that through this techniques the company is targeting the millennial
segment of the market that have less time for bill payment related activities and prefer to pay
online. Significantly Optus is aimed at rebranding itself as a mobile and fixed commodity
provider to the mobile led entertainment company. The generation between the age group of 15
to 40 or 50 is highly benefited by these services of this company and helps the company to
double its revenues. Although there is revenue pressures on the telco’s from developing
competitive intensity the rules and regulations and they are trying to find ways to differentiate
and innovate themselves. It is important that the company is making use of market segmentation
up to hire rates and modifying its Strategies and marketing innovations based on the
segmentation and the demands of the customers (Daellenbach, Parkinson & Krisjanous, 2018). A

company like Optus is creating example for the other emerging companies in the telco industry.
It is following the rule of market segmentation that is ‘divide-and-conquer’ and it is dividing the
market as per their needs and updated requirements and is on the verge of conquering the
industry. They are differentiating their products and services for meeting the customer desire
(Goyat, 2011). It is redesigning and rebranding itself for meeting the market needs focusing on
the most responsive segments for becoming the market leader
Conclusion
Therefore it can be said that the market segmentation is a practice of dividing the market
into some approachable groups having created subjects of the market founded on the needs, the
demographics, the common interest spread, along with some other psychographic and the
behavioral criteria that are used for the better understanding of the target audience. There are
different parts of market segmentation and each part is applicable to different scenario. There are
differences between the traditional and the modern market segmentation techniques and the
marketers should take note of some challenges they might face during segmenting the market.
However, the importance of market segmentation will stay intact and it will be an essential part
of the preparation of marketing mix of Companies.

References
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and strategic insights. Journal of Strategic Marketing, 27(2), 164-176.
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Daellenbach, K., Parkinson, J., & Krisjanous, J. (2018). Just how prepared are you? An
application of marketing segmentation and theory of planned behavior for disaster
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Dibb, S., & Simkin, L. (2016). Market segmentation and segment strategy. Marketing theory: A
student text, 251-279. ISBN- 97B-1-47390-400-2
Goyat, S. (2011). The basis of market segmentation: a critical review of literature. European
Journal of Business and Management, 3(9), 45-54.
Hatheway, F., Kwan, A., & Zheng, H. (2017). An empirical analysis of market segmentation on
US equity markets. Journal of Financial and Quantitative Analysis, 52(6), 2399-2427.
DOI: https://doi.org/10.1017/S0022109017000849
Jia, C., Wang, Y., & Xiong, W. (2017). Market segmentation and differential reactions of local
and foreign investors to analyst recommendations. The Review of Financial
Studies, 30(9), 2972-3008. doi.org/10.1093/rfs/hhx010
Liu, J., Liao, X., Huang, W., & Liao, X. (2019). Market segmentation: A multiple criteria
approach combining preference analysis and segmentation decision. Omega, 83, 1-13.
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