Global Marketing: Telstra - Essay Example

Global Marketing Individual Case Study (Telstra) Table of Content Introduction 3 2. Company and Product or products description 4 3. Analysis of the market 5 4. Marketing strategies 8 4.1 Promotion strategy 9 4.2 Distribution strategy 10 4.3 Sales strategy 11 5. Recommendations 11 References 13 1. Introduction Organizations which want to optimize their growth, reach and profit cannot remain “static”, restricted to minimum geographical territories. They need to keep on entering new territories breaking both geographical ‘boundaries’ as well as economical ‘boundaries’, thereby expanding their reach and emerging successful. With many countries opening up their markets and with every firm wanting to expand their reach, there are viable and optimum opportunities for the firms. To optimally tap the opportunities, organizations entering foreign territories have to come up with various strategies particularly marketing strategies according to the situation prevailing in those foreign markets. Every foreign market or country will exhibit certain unique political, social and economic conditions, along with different clients’ base, competitors, prospective employees, etc, etc. These distinct aspects will give rise to many opportunities as well as challenges, which many aid as well as block the firms’ success. These distinct aspects will be visible in many countries including the Asian country of India and thus, those aspects could act as an advantage as well as a challenge for the organisations entering it particularly Telstra, who is planning to enter it with optimum marketing strategies. Among the many departments, which constitute an organization, the marketing department’s role is omnipresent and crucial, as it can only boost an organization through various strategies. With every organization wanting to expand their reach and make an imprint in various markets, there will be optimum opportunities for it, to start that expansion drive. So, when the organization has enough opportunities, it can set targets and formulate various strategies to achieve those targets and thereby beat off the competitors. Every organization’s survival and success in the light of stiff competition hinges on the success of its main or flagship product. It is the ‘key’ that opens the door of success or profit. For an organization to survive in a competitive market, and to increase its profits in an optimum manner, its products have to be marketed optimally. The marketing department had to put in an extra effort to formulate strategies to reach the customer’s minds. So, this paper will discuss the marketing strategies, Australian company Telstra should implement in India, if it wants Telstra mobile phones or handsets to have a successful launch. 2. Company and Product or products description Telstra, telecommunications and media company, was formerly under the control of the Australian government under the name Telecom Australia. However, privatisation was carried out in stages from 1997 till 2006, and it became an independent identity under the brand name of Telstra. The name Telstra was derived and coined from the word “Telecommunication Australia” (i.e. TEL was derived from Telecommunication and STRA was from Australia). Headquartered in Melbourne, Telstra operates in various sectors of telecommunication and media industry. It is the largest provider of both local and long distance telephone services, mobile services, dialup, wireless, DSL and cable internet access in Australia. (mediaman.com.au). Although, Telstra is mainly into telecommunication services providing the mobile services that can be accessed in any popular handsets for majority of the Australian population, it diversified and entered the hardware segment. That is, Telstra also started manufacturing and selling specific mobile phones or handsets under the brand name of Telstra Next G. These mobile phones, sold by Telstra along with other well known ones, is a sturdy and successful phone in Australia, thus having good potential in other countries including India. This phone was launched in Australia in early 2000’s and because of its success, India is also in Telstra’s radar, because of its large market. Telstra is planning to make a re-entry into Indias telecommunication market, after close to nine years. Telstra went out of India in 2008, due to problems in the nature of owning the enterprise. However, with this re-entry, Telstra apart from introducing itself in the services market, can also introduce its handsets for the Indian customers. The company also has permission to undertake installation and maintenance of hardwares like mobile handsets and software systems in India and provide administrative and marketing support to Telstra joint ventures in the country. (Mukherjee). 3. Analysis of the market Advent of Globalisation and its related events is having positive impacts on the economic sphere of many countries including India, at it functioned as the catalyst for optimum economic development. That is, these countries as part of globalisation drive have opened up their local markets to foreign companies, with enticing schemes and benefits. With India also carrying out pro-globalisation drive, it has become a key target market in the radar of many foreign companies. India became part of globalisation drive in early 1990’s, when then Central government took some policy decisions favouring the entry of foreign firms in certain sectors. “India has been pursuing the Mode 1 Globalisation strategy since the economic reforms began under P.V. Narasimha Rao and Manmohan Singh in 1991. Despite several changes of government and difficulties in implementation, the essential aspects of this international economic strategy have been maintained (Sen 2000). All types of MNC’s have entered or entering the Indian Market, including a tremendous flow of mobile companies and service providers, making India has one of the largest markets of mobile phones. “The mobile service has seen phenomenal growth since 2000. Currently there are an estimated 201.29 million mobile phone users in India compared to 39.73 million fixed line subscribers” (racindia.com 2008). With the good brand name for Telstra and India being the booming market for mobile phones, Telstra brand of mobile phones can have a smooth and effective launch, if certain marketing and distribution strategies are implemented. With Information technology opening up many opportunities in India, and with many youths getting high value employment in IT majors, the purchasing power of the target customer base of 18-35 age group people have accentuated very much. With economy sizably due to the IT boom, a sizable proportion of people or target customers have been slotted into the bracket of high range buyers. “A democracy of more than 1 billion people, many profiting from a reformed economy, India is turning itself into a primary player in the global marketplace” (Time.com, 2006). From the days when the median monthly income of a family or that of the earning member stood at $60, it has started reaching around $125. But, when professionals, business people and youths, who form the crux of the mobile phone market, are taken into consideration, the median salary will hover around $500. This optimised median salary among the target customer base can augur well for the success of Telstra brand of phones. The target customer base of IT professionals, business people and youths of India see mobile phones as one of the key part of their lives and for which they can spend sizable amount of their income. Among the target segment, IT professionals are mostly up-to-date with the current development in every field especially electronic filed, particularly mobile phones. This is because, apart from their technical knowledge about electronic equipments, mobile phones, their related softwares etc, many of the IT professionals have good knowledge about the happenings in Australia. That is, as IT professionals particularly the BPO (Business Process Outsourcing) component, cater to the Australia market and they have good knowledge about the many things that have the tag of “made in Australia” from businesses, people’s tastes, cricket, as well as current news, issues or even phenomenon etc. “Infosys Technologies, Indias second-largest software services firm by sales, said on Tuesday it had won a new IT outsourcing contract from Telstra Corp (TLS.AX), Australias top phone company. Telstra has awarded application development and maintenance services contracts to Infosys.” (reuters.com). So, with this background, they will also be exposed to the brand name of Telstra (along with its early exposure, when Telstra operated in India). So, this beforehand knowledge will entice the professionals to go for Telstra brand of phones, when it is launched in India. The business people will also see the internet enabled Telstra phones as one of the aids that will give them various functionalities, while on the move. Youth of India are keeping pace with the youth of the other countries in many aspects, and so they want to own a Telstra phones as well. Like in Australia, this target segment of IT professionals, businessman and youths ranging 18-35, could be one of the productive and profitable target markets for Telstra phones. Indian market receives most of the world’s latest mobile models, as soon as their worldwide launch. All the top brands from Nokia, Sony Ericsson, Motorola, Blackberry to the iPhone are craving a niche from themselves in the vast Indian Market. So, the strength of these competitors is that they have already established their base and garnered a sizable market, through a well established brand image. By reaching various sections of population through marketing and distribution strategies, these mobile phone have built a solid base, which will not be easy dismantle. The weakness of these existing competitors is that, they have not introduced their touch sensitive models in good numbers except iPhone. All these companies are introducing their touch phones now only, and so Telstra with its touch phones can optimally target the customers. Also, all the models of the competitors are not that internet friendly, thus Telstra can market its Next G models by concentrating on that aspect. 4. Marketing strategies When Telstra plans to launch its brand of Next G models in India, pricing is one of the crucial aspects, which had to be given a lot of focus as part of its marketing strategies. That is, Telstra should set an apt price, which should not be very high to the India market and at the same time should not restrict its profits. The two factors Telstra had to keep in mind before setting the price is the purchasing power of the Indian customers and importantly the price of the competitors’ model. As discussed above, the median salary of the prospective customer base is around $500, so the pricing could be kept around 100 to 200 dollars. Indian Mobile phone market is saddled with models priced in the range $100 - $200, offering somewhat similar features. So, Telstra handsets’ price of $100 to $200 will not be vastly inflated when compared to other models and could entice the customers. Importantly that price range would give Google an upper hand over its competitors. In India, iPhone was launched only this year and its price was set at $800 for its basic model. This price was considered by many customers has quite high. So, if Telstra set its brand of phones in the $100 to $200 bracket, it could entice more customers. That is, prospective customers who want to go for a superior smartphone, but thinks iPhone’s price is quite high will surely go for Telstra mobile phones. 4.1 Promotion strategy When it comes to promotion as part of the marketing strategies, Telstra could centre its marketing strategy mainly on Television and Television Ads. TV’s have become one of the indispensable parts of many Indian lives having a widespread reach. “India has strongly emerged as the third largest television market in the world. From having one public service broadcaster during the earlier days to over 350 channels available today and moving on towards having over 700 channels by 2009.” (Sticwel). So, it would be better for Telstra to increase TV ads while launching the product. While producing TV ads, Telstra should take care that the ads have a pan-Indian appeal because India is a land of diversity with different religions, languages, people etc. Also, in India, ads with celebrities have a lot more reach and most of the mobile companies and providers are using celebrities ranging film stars to cricketers (Like in Australia, Cricket is the most popular sport in India – with many of the Indian cricketers having a demigod status). “Using movie stars and cricketers to advertise their products, MNCs gained an extraordinary reach in the subcontinent – in India” (Crickk, 2007). So, if these strategies are implemented in the initial stages itself, Telstra brand of phones will have a good opening and which will translate into good profits. The marketing strategy of holding demo in retail stores has not been a common feature in India. Mobile phones in India are mostly brought on the basis of TV ads and word of mouth publicity, so the demos may not work. Also, Telstra brand of phone with all its good features will be slotted in the “middle to upper range” in comparison with the lower basic models, so a good proportion of customers will be professionals, business people and youths from economically sound background, mostly in the age-group of 18-35. These groups of customers will mainly expect personalized demos, not the common demos in the retail stores. So, to achieve the objective of a successful launch, Telstra should increase TV ads integrating the above discussed concepts. 4.2 Distribution strategy When it comes to the distribution part of the marketing strategy, Telstra has number of options. India has good number of carriers and service providers both of indigenous nature and foreign affiliations like Airtel, Vodafone, Reliance, Aircel, etc. Among these carriers, no one dominates the market, each having their own share of the market. So, it would be advisable for Telstra to launch its phones with the capability to operate in multi-platforms, under different carriers or providers. The problem with launching on a single platform is that not all people will be members of that provider and would not wish to join it, dumping their current provider. So, Telstra should not commit the mistake of limiting carriers and distribution centres. Also, as India is large geographically and diverse culturally, it would not be easy for Telstra to single-handedly handle all the parts of distribution. So, it would be better for Telstra to have local tie-ups to distribute its phones. With this type of distribution, Telstra will be able to handle more movement of its phones. 4.3 Sales strategy Then, when it comes to sales support to the customers, these same distribution partners can play a major role. That is, apart from selling the phones, the subsequent services can be provided by these local dealers or franchise or partners with backing in the form of technical know-how and training from Telstra. And when this arrangement succeeds, there will more queries and the local population could indulge in mass buying. So, if Telstra increases the resources singularly or in alliances with other providers it will be able to cater to the mass buying. And when Telstra moves out of the stores in a fast manner a good sales volume can be achieved. The profits garnered from the Indian sales could contribute a good portion of the worldwide profits of Telstra. Importantly, they could also achieve double digit market share in the initial stage itself. 5. Recommendations For many organizations, ubiquitous presence is the key because every organization will aim to spread to as many countries as possible. To get a stronghold in any country, understanding that country’s market, competitors, etc is an important task to do. So, when a product enters the market because of a common and worldwide phenomenon like Globalisation, it has got the easy pathway or door to enter a country, where immense opportunities exist. But, after entering the country, no common phenomenon will help the organization to sell its products or services, the organization on its own had to implement optimal marketing strategies to survive the local market and achieve success. Likewise, if Telstra wants to successfully launch its mobile phones, it has to come up with optimal marketing strategies, considering all the India centric aspects. References Crick, E 2007, Cricket and Indian National Consciousness, viewed on April 5, 2010 http://www.ipcs.org/IPCS-ResearchPaper9-EmilyCrick.pdf mediaman.com.au, Telstra, viewed on April 6, 2010 http://www.mediaman.com.au/profiles/bigpond.html Mukherjee, A, Govt says no to Telstras Net telephony plan, viewed on April 5, 2010 http://www.thehindubusinessline.com/bline/2004/10/04/stories/2004100402770100.htm racindia.com 2008, Communications in India, viewed on April 6, 2010 http://www.racindia.com/239 reuters.com, India Infosys wins outsourcing deal from Telstra, viewed on April 5, 2010 http://www.reuters.com/article/idUSBOM48878820090609 Sen, C. 2000, Globalisation, India and East Asia, viewed on April 5, 2010 http://india-seminar.com/2000/487/487%20chiranjib%20sen.htm time.com. 2006, India Ascending, viewed on April 6, 2010 http://www.time.com/time/magazine/article/0,9171,1215479,00.html sticwel.com. Television Advertising, viewed on April 5, 2010 http://www.sticwel.com/ Read More