LB5202 Essay: Market Segmentation of Telstra Analysis

This essay delves into the concept of market segmentation, exploring its theoretical underpinnings through a literature review and applying these principles to a case study of Telstra. The essay begins with a concise introduction, followed by a review of relevant literature that examines various aspects ...Read More

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“MARKETING SEGMENTATION OF TELSTRA”
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Table of Contents
Introduction......................................................................................................................................2
Literature review..............................................................................................................................2
Case Study analysis.........................................................................................................................4
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

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Introduction
The aim of the essay is provide brief discussion about literature review which is based on
the Market segmentation topic. As defined by Dolnicar, Grün, & Leisch, Marketing
segmentation theory is the theory which describes that short as well as long term interest rate has
no connection from each other (Dolnicar, Grün, & Leisch, 2018). It assumes that the prevailing
short term interest rate and all the bonds and securities which are for long term is considered
individually. Furthermore, this discussion is followed by examining the case study which focuses
on finding that “how Market segmentation theory is applied in the case study of Telstra”.
Literature review
The literature review is discussed through examining the three themes that is “Market
segmentation theory”, “Application of marketing segmentation”, “Importance of marketing
segmentation”. So that it provides clear understanding regarding the use of marketing
segmentation theory in company.
Researchers revealed that bonds which are from the diverse maturities leads in affecting
the trading in the different market (Dolnicar, Grün, & Leisch, 2018). Therefore, authors revealed
that it reduce the cost and expenditure of the company. This is due to the reason because it
supports the company to select the target group and market for the products and services
company is offering the product. The study revealed that market segmentation is considered the
approach in which the company segmented the market into the smaller group of buyers which
has differences in the needs, behavior, spending capacity so that the operation of the company
conduct accordingly (Goyat, 2011). However, in comparison to this market segmentation theory
supports in defining the market so that target customers pay for the premium services offered to
them by the company.
The marketing segmentation is applied in the companies when the company segmented
their market by focusing on the product and services which is offered by the company (Burgess,
Sellitto, Cox, & Buultjens, 2015). In this the segmentation of the products and services is done
the needs, behavior and geographically aspect, in this the homogenous products also segmented

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according to the similarity of the features and price of the product. However, in similarity to this
authors revealed that market segmentation theory is adopted by companies in Australia because
of segmenting the market into diverse sections which can be result as “positive segmentation”,
“negative segmentation” as well as “top-down segmentation” (MacDermott, 2018). Telstra also
segment the market based on the geographic, psychographic n which the company include the
psychology, needs and requirement of the customer (Schram, Friel, Freeman, Fisher, Baum, &
Harris, 2018).
The authors revealed that market segmentation theory is important because of allowing
the business to reach to the target customers easily which all is interested in buying the product
and services of the company (Tesfamicael, Liu, Foo, & Caelli, 2017). Through this it leads in
reducing the wastage of the organization by declining the resources and cost of segmenting the
market of the product as well as also results in optimum utilization of resources. However, in
comparison to this author revealed that marketing segmentation is considered as strategic
planning and focuses on making decisions by providing the knowledge to the company regarding
the marketing opportunities and supports in improving the efficiency of marketing and provide
benefits to the company about the knowledge of consumers and marketing programs.
Furthermore, the case study of Telstra is discussed in relation to marketing segmentation theory
(Cooper & Burrell, 2015).
SOURCE: (Schram, Friel, Freeman, Fisher, Baum, & Harris, 2018)

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Case Study analysis
Telstra is the telecommunication company of Australia which offers internet services,
data services to the customers. This is revealed that company provide quality services to the
customers by providing adequate product to the appropriate customers at the right place
according to their needs and requirement (Moorhead, 2015). This supports the company
increasing the revenue of the company which includes that in the 2017, the profit of the company
is $26 million. This is because of adopting the market segmentation theory.
It is because the estimation revealed in the earlier year the profits of the company does
not increasing because of dynamic environment that is changes in the customer behavior and due
to several competitors in the marketplace (Gregory, 2018). In the year 2015, the company face
challenge of not meeting the requirements of the customers which also increase other issues
which includes reduce competitive position and reduce the knowledge of the company regarding
the consumer’s demands. Therefore, through market segmentation theory the company
segmented the market and customers according to demographic variables that is segmented
according to age, gender as well as income of the consumers. In this company also concentrate
on the female needs for the design and color of the mobile. (Schram, Friel, Freeman, Fisher,
Baum, & Harris, 2018)
Furthermore, the company also does segmentation according to geographic variables in
which customers of Telstra is divided among the cities and states and revealed that Melbourne
has more business class consumers (Goggin, Hollier, & Hawkins, 2017). Therefore, the company
mainly offers 3G services in more of large areas, so that it becomes affordable by all the
consumers. The other variables and aspects for which the company focuses on is the
psychographic variables in which the company include psychology of the customers their needs,
buying capacity and focus on the lifestyle and personality of consumers.

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SOURCE: (Moorhead, 2015)
The company provide new plan such as SMS plan to the youngsters and flow new trends
for the groups who wants to remain updated. The behavioral variable is also included in the
marketing segmentation of Telstra because in this it targets both higher and lower usage
consumes (Gregory, 2018). Therefore, in this company offer 3G and other message scheme
services to the consumers. This supports in increasing the number of customers for the company
in the year 2017 that is the revenue of company was up to $26 million and supports in earning
more operating income which includes it was up to $6.2 billion (Burgess, Sellitto, Cox, &
Buultjens, 2015).

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Telstra Revenue
SOURCE: (Statista, 2019)
This strategy also supports the company to follow the procedure that is to target market
and understand the needs of the market. Through this the knowledge of the consumers to Telstra
increases and also supports in gaining advantage of new opportunities this result in increasing the
customer loyalty towards the company in the year 2016. The cost and expenditure of the
company also reduces because of concentrating on the niche market through using specialized
approach.
Conclusion
From the above case analysis and discussion it is concluded that:-
 Marketing segmentation differentiates the long term as well as short term interest. In this
theory company focuses on dividing the consumers according to the needs and
requirement of the customers.
 In the year 2015, Telstra faced from various challenges, but major challenge is not
meeting the needs and requirements of the consumers. Due to this various other issues
increased that is reducing the sales and decrease customer loyalty.
 To overcome, this issue company adopts market segmentation theory in which segments
the products and services according to the psychographic, behavioral, geographic and

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several other variables. This is done through offering 3G services to the large areas and
offer message scheme to lower areas, by this company target both the areas. Furthermore
according to psychographic variable company also offer SMS plan to target the
youngsters. This leads in affecting the company in positive manner and increase profits
which is in the year 2017 it was $26 million and supports in raising customer loyalty.
References

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Burgess, S., Sellitto, C., Cox, C., & Buultjens, J. (2015). Strategies for adopting consumer‐generated
media in small‐sized to medium‐sized tourism enterprises. International Journal of Tourism
Research , 17 (5), 432-441.
Cooper, R., & Burrell, G. (2015). Modernism, postmodernism and organizational analysis: An
introduction. In For Robert Cooper , 149-175.
Dolnicar, S., Grün, B., & Leisch, F. (2018). Market Segmentation Analysis: Understanding It, Doing
It, and Making It Useful. Germany: Springer.
Goggin, G., Hollier, S., & Hawkins, W. (2017). Internet accessibility and disability policy: lessons
for digital inclusion and equality from Australia. Internet Policy Review , 6 (1).
Goyat, S. (2011). The basis of market segmentation: a critical review of literature. European Journal
of Business and Management , 3 (9), 45-52.
Gregory, M. A. (2018). Australian wholesale telecommunications reforms. Australian Journal of
Telecommunications and the Digital Economy , 6 (2), 1.
MacDermott, T. (2018). The collective dimension of federal anti-discrimination proceedings in
Australia: Shifting the burden from individual litigants. International Journal of
Discrimination and the Law , 18 (1), 22-39.
Moorhead, S. (2015). Ericsson celebrates 125 years in Australia. Australian Journal of
Telecommunications and the Digital Economy , 3 (4), 1.
Schram, A., Friel, S., Freeman, T., Fisher, M., Baum, F., & Harris, P. (2018). Digital Infrastructure
as a Determinant of Health Equity: An Australian Case Study of the Implementation of the
National Broadband Network. Australian Journal of Public Administration , 77 (4), 829-842.
Tesfamicael, A. D., Liu, V., Foo, E., & Caelli, W. (2017). Modeling for performance and security
balanced trading communication systems in the cloud. In 2017 IEEE 36th International
Performance Computing and Communications Conference (IPCCC) , 1-7.