Marketing Case Study: An Analysis of Optus' Strategies and Issues

This case study examines the marketing strategies and challenges faced by Optus, a major telecommunications company. The analysis covers Optus's history, including its acquisition by SingTel and its partnerships, such as the one with the Australian Open. The study delves into Optus's business segments, including mobile voice, internet, and data services, and its subsidiary brands like Boost Mobile and Virgin Mobile Australia. It explores the company's strengths, such as its size and reliability, and weaknesses, like a smaller market share compared to global competitors. Opportunities, such as the increasing internet usage, and threats, including competition from Telstra, Vodafone, and MVNO providers, are also assessed. The case study further analyzes Optus's market research efforts, including its launch of new services and its use of both primary and secondary research methods, including interviews, surveys, and social media analysis to understand customer preferences and market trends. The study highlights the importance of understanding factors such as economic and political factors, and the impact of technological advancements, mergers and acquisitions, and government regulations on Optus's business operations.

Marketing 1
Marketing
Case of OPTUS Company
Student Name:
Number:
Instructor’s Name
Date of Submission

Marketing 2
Issue One
Singapore Telecommunication known as SingTel owns Optus. It became a subsidiary in
2001 after SingTel took over Cable and Wireless Optus Pty Limited. Its mission highlights the
company’s desire to achieve its vision by countering barriers and building partnerships by
ensuring that customers, employees and shareholders get value that is a crucial aspect for
business growth. For example, Optus is in a ten year partnership with the Australian Open and
since 2001, it has been supporting Tennis is Australia. The partnership requires Optus to provide
the Australian Open staff and media with updated technology, free Wi-Fi and network reception
boost for visitors and fans of the game. Through this partnership and providing these services,
Optus has established itself as the only telecommunication partner with the Australian Open and
Tennis in Australia. It has inspired many people and has accumulated numerous fans
strengthening its bond with the Australian public. In the 2013/ 2014 financial year, Optus
focused on offering quality services, simple products and establishing a strong network. The
strategy was still upheld in the 2014/ 2015 financial year and the advertising campaign strategy
was based on building a positive ‘yes’ notion for the business services, products and customer
support provided. Today, Optus has its subsidiary brands including Boost Mobile and Virgin
Mobile Australia. The company operates and owns networks and infrastructure and it resells
products from its main supplier, Telstra. The two main products offered include the NBN service
and entertainment bundles. Optus’ strategy for television advertising is focused on daytime
advertising since between 10 am and 5 pm; more than 50 percent of its sports are aired. The
products offered since entrainment bundles target youths and young families influence this.
Currently, Optus has introduced new technologies to make sure they are competitive with Telstra
and the rest of the telecommunication industry. However, this has not worked well for them

Marketing 3
since customer satisfaction has greatly reduced since the new technology is frustrating customers
(Shire, 2017). This is repelling new prospects.
The company operates in four main business areas. Such segments include local and long
distance services, mobile voice, high speed and dial up internet. Furthermore, it also specializes
in data and Wi-Fi service, communication service to corporate and government clients including
satellite, internet, e-business, mobile, voice, data, hosting and call centers (De Ridder and James,
2013). Optus television offers 77 channels of digital TV, Optus SMB provides medium and small
business customers providing services and products including those from Optus customers.
Optus satellite and wholesale offers services for third party telecommunication service providers,
operates through its entirely owned Virgin Mobile Australia, and provides 2G, VOIP, and 3G
services to their customers. Since it offers numerous products and services suitable for every
customer, Optus has become Australia’s most recognized brand.
Issue 2
The company’s large size is one of its strengths since it is supported by SingTel to offer
reliable and fast services. However, compared to global competitors, it has a smaller market
share and this is a major weakness. Internet usage increases daily and this presents an excellent
opportunity for the company. Optus offers services directly to end users who include small
businesses, residential customers, wholesalers and corporate customers who retail them, as
service providers. Optus’ customers are looking for smart and trendy devices and the company
positioned itself as a provider of smart and trendy technology when Telstra ceased retail
competition (Cowan, 2013). Optus undertook a far more sophisticated approach to customer
acquisition and the best marketing strategies in the industry, being the first in the IPhone market.

Marketing 4
To maintain its current market position, and to expand its market share, Optus has
adopted some alliances. In 2006, on 26thJanuary, Optus acquired 74.15 percent of Virgin Mobile
Australia Pty Limited (VMA) for 30 million dollars from the Virgin Group. This boosted Optus’
shares in VMA to 100 percent. Virgin enterprises limited gave Optus a license, to use the Virgin
Mobile brand for 15 years in Australia. Using this brand, Optus got an opportunity to increase
the products and services it offers to the target market. In 2005, Optus also acquired Alp west to
widen its business and customer base through cloud computing (Tara, 2013, 70). The company is
also in partnership with Uecomm, the alliance was established in 2004 and in 2006, and it
formed a partnership with Cross Network for information technology services and network
services. It also in partnership with IBM.
Even though Optus uses the mobile sector as its main market, its market share is under
pressure. Over the past year, Optus has been the main provider in the mobile market but
Vodafone Australia came in and cut the market share in the wholesale market in an effort to
build its network. Telstra also presents huge competition since it resells 4G services. Australia
has 18.28 million active mobile services and 15.7 percent of them got their services from an
MVNO provider. This accounts for 2.9 million users. MVNO also presents competition since it
targets profitable new customers that would stay away from Optus (Ramli, 2015). Telstra targets
low cost customers since it offers Boost Mobile Service and through the Virgin Mobile, Optus
targets younger subscribers. Optus should invest more if it is to stay ahead of this competition
since the rivals are using fiber optic cable to have direct access to customers. Mobile technology
is also evolving daily and if Optus is left behind, it will lose customers. Mergers and acquisition
are also common and this cuts the market share (Hunt, 2018b). Optus also faces a threat of
possible intruders since companies such as JB hi-Fi and Harvey Norman that retail entertainment

Marketing 5
and technology may emulate Best Buy’s strategy, which is the main retailer in the United States.
The companies may build a strategic wholesale relationship with Cleanwire, the wireless
Broadband service provider where Best Buy will provide mobile internet service to customers
using clean wire 4g network, under the Best Buy customer service. Through the purchase of
wholesale access from the national broadband network to sell the retailer’s branded broadband
service to the customer, directly, the intermediary role of traditional telecommunication
companies will be eradicated (Ridder, 2013). NBN’s open wholesale model and the requirement
for uniform access pricing for retail providers will also reduce the barrier for entering the
broadband market for low stream providers and upstream suppliers (Ramli, 2015). This will
create a new platform for new competitors to enter the retail broadband market making it more
competitive for Optus.
Optus should take heed of other factors including economic factors that cover inflation,
interest rates and taxes. The economic aspects affect pricing plans offered to customers (Nagle,
2016). Moreover, more houses are being built meaning that more people will need
telecommunication services and products. This may influence price depending on the customers
in the area, location and demand. Government regulation is a huge political factor since on one
hand; the government is on pressure to recognize the internet a basic human right since it is used
in people’s day to day life (Wicker, 2013; Fulgoni, 2018). There is a huge battle between net
neutrality since customers believe that the government and service providers should treat internet
data the same way. Neutrality would prevent Optus from practices such as throttling data and
internet speeds. Technology is advancing daily. For example, telephone companies use copper
for their fiber wire. Phones are also becoming smaller and more powerful shifting the telecom
business into a primarily wireless business. Basic services in a phone such as caller ID,

Marketing 6
voicemail are covered and people want internet access all the time and data has to be added to
mobile plans. Cars and buses Wi-Fi, meaning that Optus should invest more in technological
development in terms of laptops, computers and smart phones (Colley, 2013; Osterwalder, et al.,
2014). Optus is also bound to legal factors especially government policies applying to customers
and monopolies. Optus can import and export telecom products such as smart phones boosting
development in technological devices.
Issue 3
Over the years, it has been clear that Optus does a lot research to know what the
customers want and to know the state of the market. In 2005, the company launched the Push to
talk services to target the 18 to 34 year old customers. The service allowed mobile customers to
chat with five other people at once. Optus described the experience as. “Letting you use your
phone like a walkie talkie.” The company disclosed that in their market research, the 18 to 34
year old customers said they want more than just voice calls and SMS. They wanted to
communicate with their group interactively, quickly and easily. (Optus Mobile Md Allen) In
2014, Paul O’Sullivan the company’s chief country officer said that there were 12 million
customers living in Australia and Optus is willing to lose more revenue in the short term as they
build their customer base. Mr. O’Sullivan said that regional and rural customers accounted for
approximately 40 percent of over 30.2 million mobile subscribers in Australia (Mackay,
2014).According to him, this presents a huge opportunity since the main competitors’ market
share in the area is disproportionate.
Optus gathered this information through market research to get an idea of the kinds of
new services and products that can be profitable. Optus collects data through primary research.
They conduct interviews to customers through telephone or face to face, they offer surveys

Marketing 7
online or through email, they give questionnaires online or through mail (Gian, 2018). The
company uses focus groups, they sample potential clients or customers and they get their
different views. The questions are focused on gathering information on factors that customers
consider when buying a product or service, what they like or hate about the current products and
services in the market, the places they need improvements and what they are ready to pay for a
product or service. Optus also collects secondary research that is meant to analyze data that has
been published previously. Through secondary data, Optus identifies its competitors, they can
establish benchmarks and they can rule out their target segments. The segments include people
who are in the target market (Hunt, 2018). They include people living in a particular lifestyle,
and those that have certain behavioral patterns or those who fall into a certain age group. For
example, with the push to talk service, Optus targeted people aged between 18 and 34 because
they liked interacting with their friends more efficiently. Optus’ network bundles are also
cheaper because they are meant for the young people.
Data can be collected quantitatively or qualitatively. Quantitative data collection methods
use mathematical analysis and they use a larger sample size. The results from the quantitative
data collected unveil statistical differences (Mooi, 2014). Optus gets quantitative results from
web analytics in their websites. The information collected helps it determine where the leads are
coming from and how long visitors are staying in the page and from which page. Qualitative
methods use smaller sample sizes and they assist the company in polishing up their quantitative
methods of research. Optus uses it to solve their problems and to learn about customers’ opinion,
beliefs and values, they use interviews.
However, qualitative research, even though it is essential it is mostly expensive. Optus
has to invest a lot of money and time to interview customers from all over Australia. Therefore,

Marketing 8
it is using social media for this purpose. Platforms such as Twitter and Facebook contain a lot of
information and Optus can use it to know the population that supports its brand in terms of
gender, age, social views, social groups and hobbies (Sadausakas, 2014). Furthermore, over 75
percent of the people who follow a company in social media are already customers while the rest
know about the company from peers or advertisements and want to shop with them (McGivern,
2013). Optus studies comments of loyal followers to come up with a notion of how and why
customers are using their service and products, when they are using them and for what. Optus
uses the feedback to restructure its brand image, and marketing campaigns. On social media,
people are also more open and Optus knows why other people do not buy their products and
services, and why other companies have a competitive advantage (Smith, 2014).
Issue 4
As a competitor, Optus is powerful; and it has established its market position. It has
adopted the Open Network that has boosted its coverage in the Australian market to 96 percent.
Customers have different expectations for Optus and Telstra and Optus can use this to their
advantaged. Since Telstra is the leading company, Australians expect that it should have 100
percent coverage. Even though Optus had financial and technical support from SingTel, its
success has mainly been boosted by CSR, which has nurtured positive public relations (McGrath,
2013, 90). Optus also promptly responds to customers’ needs and they quickly respond to
competitor’s strikes. Since it is well established, Optus should target businesses, residential
customers, and the government. Optus can comfortably meet their needs for updated technology
and since Wi-Fi has become a basic need, Optus can gain a huge market share.
Optus value proposition for its customers should be customer experience. Optus should
be committed to boost customer loyalty and customer satisfaction by providing quality products,

Marketing 9
services, and marketing in a transparent and responsible manner. Customer experience will
benefit Optus as it is still trying to dominate the market. Satisfied customers cease considering
price as their main determiner for purchase (Blankson, et al., 2013). A satisfied customer will
always come back even though the price increases because they are looking for something more
and they feel valued (Lopez, 2014). In addition, they tend to bring other customers with them
through referrals since their feelings and opinions about Optus influence others positively and
negatively. An unhappy customer can easily damage Optus’ brand since they only have to post
their poor experience on social media and potential and existing customers will form a bad
opinion about the company (Laroche, 2013). Optus’ positioning statement for the target market
should be centered on network speed and exclusive content. Customers want to get value for
their money and if they will get fast speed, they have to watch content that is worth their time
(Tully, 2013).
Issue 5
To undertake this market strategy, Optus should focus on product, price, place, people
and promotion as its marketing mix (Kotler, 2015, 60). Even though Optus is known for offering
mobile and broadband network, it should diversify its products to include consumer goods such
as smart phones, laptops, ipads and other electronic gadgets to blend the new and old
technologies. They can also offer consultancy services and business solutions to sip into different
markets. Optus should also adopt new technology as soon as it comes up to stay ahead of
competition and to make sure it offers quality products and services. Optus is a leading
telecommunication company in Australia and in the industry; prices of services and products are
highly sensitive. Rivals can adopt unique pricing strategies that may give them a competitive

Marketing 10
advantage. Hence, Optus can use bundle pricing for most of the services such as broadband and
internet services that have different offers depending on the customer’s utility rate (Yan, 2015).
To stay ahead of competition, Optus should also follow a competitive based price
strategy, cutting down the cost of services and products after competitors do so, to retain
customers. Place mainly covers the distribution channels and Optus should adopt a channel that
has the least conflict (Moriarty, et al., 2014). Different distribution channels can be used based
on the products or services but direct mode of communication such as emails, posts, leaflets and
door-to-door sales are the best. Optus targets its customer through social media platforms and
through its websites. Promotion is also important for the marketing strategy to succeed.
Advertisements are important, Optus should promote through radios, television, the internet,
billboards (Price, et al. 2013) .Optus should also promote through its website, and it should offer
discounts and offers to retain and attract customers.
However, Optus should make sure that promotion is transparent since the company has
been previously accused of conducting deceptive and misleading advertisement campaigns of
their broadband offers (Moriaty, 2014). According to the Australian Competition and Customer
Commission, Optus’ advertisement stated that the offers were faster and there was no limit that
user could achieve. The advertisement did not indicate what Optus was offering to customers and
it created a misunderstanding on connection speed and quota limit. Sponsorship can also be a
good promotion tactic where Optus can sponsor concerts, sports teams and other activities
(Huang, 201). Customer feedback should be derived from social media platforms such as
Facebook. People are also a major element of the marketing mix since service in the
telecommunication industry mainly involves interaction among people (Hajli, 2014; Armstrong,
et al., 2015). Optus should efficiently use its resources to satisfy customers. They can train their

Marketing 11
employees and make sure they are well equipped with new technology to offer up notch service
(Setia, 2013).
Optus should constantly conduct market research to understand customer needs better
and know issues that customers need addressed and what they expect. This will make sure that
Optus responds promptly to market changes and stay ahead of rivals. The company should also
maintain the cable network to offer quality service and at affordable prices attracting new
customers and retaining the customers, they have. Competing in the current telecommunication
industry is challenging since the market is saturated especially since new technology is
developed every day. Moreover, new entrants come in daily posing more competition and to
survive, Optus should upgrade their technology to make sure they are not faced out.

Marketing 12
References
Armstrong, G., Kotler, P., Harker, M. and Brennan, R. (2015) Marketing: An introduction.
Pearson Education.
Blankson, C., Cowan, K., Crawford, J., Kalafatis, S., Singh, J. and Coffee, S. (2013) A review of
the relationships and impact of market orientation and market positioning on organisational
performance. Journal of Strategic Marketing, 21(6), pp.499-512.
Colley, D. and AITKEN, S. (2013), April. The" Right to the Internet" is a Right to the City:
public spheres, virtual commons and social movements online and in the street. In Annual
Meetings of the Association of American Geographers, Los Angeles.
De Ridder, J. and James, B. (2013) Affordable retail pricing on the NBN. Australian Journal of
Telecommunications and the Digital Economy, 1(1), p.5.
Fulgoni, G. M. (2018) Are you Targeting Too Much? Effective Marketing Strategies for Brands.
Journal of Advertising Research, Vol. 58 Issue 1, p8-11.
Hajli, M.N. (2014) A study of the impact of social media on consumers. International Journal of
Market Research, 56(3), pp.387-404.
Huang, R. and Sarigöllü, E. (2014) How brand awareness relates to market outcome, brand
equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp. 113-132)
Springer, New York, NY.
Hunt, S. D. (2018a) The prospects for marketing strategy and the marketing discipline in Era V:
is the prognosis promising or problematic? Journal of Marketing Management. Vol. 34 Issue 1/2,
p86-95.
Hunt, S. D. (2018b) Advancing marketing strategy in the marketing discipline and beyond: from
promise, to neglect, to prominence, to fragment (to promise?). Journal of Marketing
Management. Vol. 34 Issue 1/2, p16-51.
Laroche, M., Habibi, M.R. and Richard, M.O. (2013) To be or not to be in social media: How
social media affect brand loyalty. International Journal of Information Management, 33(1),
pp.76-82.
Lopez, S. (2014) Value-based Marketing Strategy : Pricing and Costs for Relationship Marketing
Series: Series in Business & Finance. Wilmington, Del: Vernon Press. 2014
Mackay, M.M. and Weidlich, O. (2014) Australian mobile phone lifestyle index. Australia:
AIMIA-The Digital Industry Association of Australia.
McGivern, Y. (2013) The practice of market research: an introduction. Pearson Higher Ed.
McGrath, R.G. (2013) The end of competitive advantage: How to keep your strategy moving as
fast as your business. Harvard Business Review Press.

Marketing 13
Moriarty, S., Mitchell, N.D., Wells, W.D., Crawford, R., Brennan, L. and Spence-Stone, R.
(2014) Advertising: Principles and practice. Pearson Australia.
Nagle, T.T., Hogan, J. and Zale, J. (2016) The Strategy and Tactics of Pricing: New
International Edition. Routledge.
Osterwalder, A., Pigneur, Y., Bernarda, G. and Smith, A. (2014) Value proposition design: How
to create products and services customers want. John Wiley & Sons.
Price, W.P., Kalsow, R.G. and Willner, L.B., Keen Personal Media Inc. (2013) Audiovisual
system and method for displaying segmented advertisements tailored to the characteristic
viewing preferences of a user. U.S. Patent 8,417,566.
Ramli, D. (2015) Optus mobile subscriber base falls as Telstra, Vodafone step up competition.
The Sydney Morning Herald, 13.
Setia, P., Venkatesh, V. and Joglekar, S. (2013) Leveraging digital technologies: How
information quality leads to localized capabilities and customer service performance. Mis
Quarterly, 37(2)
Shire, K., Holtgrewe, U. and Kerst, C. (2017) Re-organizing customer service work: an
introduction. Re-organizing Service Work: Call Centres in Germany and Britain: Call Centres in
Germany and Britain, p.1.
Tully, S. (2014) A Human Right to Access the Internet? Problems and Prospects. Human Rights
Law Review, 14(2), pp.175-195.
Wicker, S.B. and Santoso, S.M. (2013) Access to the internet is a human right. Communications
of the ACM, 56(6), pp.43-46.
Yan, R., Myers, C., Wang, J. and Ghose, S. (2014) Bundling products to success: The influence
of complementarity and advertising. Journal of Retailing and Consumer Services, 21(1), pp.48-
53.

Marketing 14