3006 Marketing Services - Assignment: Telstra Services Analysis on Broadband Plans (Internet)

Cameron Palmar - S2935975

Kirk Gibson - S2974302
Nick Jaket - S2946274
Amanda Gomes - S5001547
Cameron Palmar | Kirk Gibson | Nick Jaket | Amanda Gomes

Tutor: Maria, Tutorial Time: Thursday 10 11 AM

Company Name: GOML Inc
Contents
Introduction................................................................................................................................. 3
Executive Summary...................................................................................................................... 4
3Cs Analysis................................................................................................................................ 5
Company Analysis...................................................................................................................... 5
Customer Analysis...................................................................................................................... 7
Competitor Analysis....................................................................................................................8
Analysis of Product Strategy.........................................................................................................9
Physical Evidence....................................................................................................................... 11
Service Blueprint........................................................................................................................ 12
Analysis of Customer Service Strategy........................................................................................13
Recommendations...................................................................................................................... 15
Conclusion................................................................................................................................. 17
References.................................................................................................................................. 18
Appendices................................................................................................................................. 20
Appendix 1.............................................................................................................................. 20
Appendix 2.............................................................................................................................. 21
Appendix 3.............................................................................................................................. 22
Appendix 4.............................................................................................................................. 23
Appendix 5 and 6..................................................................................................................... 24
Appendix 7.............................................................................................................................. 24

Cameron Palmar | Kirk Gibson | Nick Jaket | Amanda Gomes

Introduction
This report will be covering Telstra from a service analysis point of view regarding their
Broadband Internet plans. Telstra is the largest telecommunications company in Australia for
Broadband Internet service providing Australians with ADSL, ADSL 2 and NBN coverage. The
focus of this report will cover Telstras current service, pricing, and customer strategies;
company, customer, and competitor analysis, as well as a service blueprint and
recommendations the company should take into account based on the findings of this report.

Cameron Palmar | Kirk Gibson | Nick Jaket | Amanda Gomes

Executive Summary
Based on the findings of this report, key issues have been identified with Telstras Broadband
Internet service that arise from marketing strategies, execution and performance. The biggest
issues based on a case study includes the transition between ADSL and NBN driven homes with
consumers complaining about installation issues, modem malfunctions, and overall poor service.

In order for Telstra to accommodate all demographics theyve shifted its marketing from
company based profitability to a marketing based management with their new Next G Telstra
Plan allowing customers to personally engage with staff members and technicians to resolve
issues, promote new plans, and give special discounts.

Telstra currently consumers over 45% of the market for Broadband Internet in Australia with
competitors like TPG, iiNet and Optus controlling a mere 10-18% which demonstrates an
enormous grasp of consumer awareness when looking at company brand evaluations. A
recommendation to help the company move forward should include adjusting their Broadband
Internet plans to compete with its competitors by offering unlimited internet usage and
competitive pricing. With Optus controlling the second largest portion of the market share, their
unlimited plan is only $100 per month, whereas Telstra charges $115 for 1000GB.

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The last yet largest recommendation is to increase their customer service and customer loyalty.
Based on our findings in this report, many online reviews from customers show Telstra isnt
providing a great customer service experience by not satisfying their customers. Not only are the
reviews showing this information but Telstra was also recently fined $510,000 by the Australian
Communication and Media Authority for falling short of two benchmarks outlined in its
Customer Service Standards Guarantee.

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3Cs Analysis
Company Analysis
Telstra originates back to 1901 when the Postmaster Generals Department (PMG) was
established and thus is one of the longest marketing services for telecommunications and internet
providers within Australia (Telstra, 2015). Currently as it stands the companys brand and
positioning is recognisable across Australia and even parts of the world such as the US and
Britain. As a leader in the telecommunication service providers and PR with consumers, has
succeeded and propelled itself into the top 100 brands and global icons under the Millward
Brown association for recognising company brands, communicative strategies and media insight
(Brown, 2015). The company is even topping world renowned brands such as KFC, Woolworths
and even PayPal as seen in Fig 1.

This is a magnanimous award as the corporation demonstrates how their forms of effective
marketing strategies and services have ultimately been a pinnacle of their companys successful
strategies and KPI recognition. By utilising powerful customer service engagement via
telecommunications and in store promotions, Telstra clearly utilises its key strengths as a whole
for both consumers and the company.

However, Telstra has also demonstrated some forms of weakness with their marketing strategies,
execution and performance as indicated by reports from consumers. Steve J, on his case study of
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Telco Customer Service Madness expresses, Telstra is faced by many challenges including
consumer and businesses propagated issues. One major issue is the transition between NBN
driven homes and those who cannot be supported over the multitude of decades (J, 2012). This
relates to the actual service Telstra provides and what they are unable to provide to consumers
specifically with installation issues, modem malfunctions and overall poor service. As these are
minute issues, in the eyes of the consumers it can have a detrimental effect on the overall
perception of both the brand and the company and thus should be prioritised as a serious issue in
customer service.

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Customer Analysis
Consumer profiles for Telstra have been extremely broad ranging from young children using
mobile phone internet plans to even elderly men and women using generic 1GB data plans per
month. Due to the immense target market and segmented demographics, Telstra recently has
shifted its marketing mix approach from company based profitability to a MBM (Marketing
Based Management) front as seen in Fig 2 (AFRBIZ, 2014).

This allows the company to cater for an enormous range of demographics and psychographics
and in order to achieve this, the company introduced a networking plan in October of 2006
known as the Next G Telstra Plan. This new plan caters for all customers no matter what
subsidiary category they fall under (range of age, knowledge on telecommunications and even
where they are located in Australia). The plan helps consumers across Australia personally
engage with staff members and technicians to resolve issues with Telstra based products or
services and also announce promotional activities and specials for each brand loyal consumer.
This form of consumer trend is even being used in todays society over a decade later and is still
successfully working for the company, however with the evolution of the internet and
telecommunications, an evaluation of their marketing mix and services would be a wise choice to
sustain the business for new consumers.

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Competitor Analysis
Compared to other companies, Telstra remains to be the strongest company for
telecommunications and internet service providers. Optus, iiNet and TPG are also strong
competitors yet are nothing in comparison to Telstras market shares and consumer intake. As
indicated below by Fig 3, Telstra consumes over 45% of market shares for marketing services
against other competitors which is an immense lead (Research, 2014).

As another comparison between companies, Telstra also remains true to its goals of focusing on
communication and services for its customers rather than the business itself. As indicated by Fig
4, a comparative positioning table compared to other companies details that Telstra holds over 25
to 30% of the fastest speed connections with their subsidiary plans for BigPond fibre optic and
4G network (Dobbie, 2012). Clearly Telstra has a strong lead in the internet and
telecommunications category however should be wary of other competitors such as iiNet and
Optus who are amplifying and catering new strategies for consumers to change consumer
opinions on favourable brands.

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Analysis of Product Strategy

Telstras core service is telecommunications and information services company. They offer a
wide range of services such as: phone/tablet plans, home broadband, entertainment, Telstra Air
and home phones which are offered to each customer individually from each sector: personal,
small business and business and enterprise.

With respect to the core product, Telstra also offers bundle packages for customers who are
looking for everything in one. These bundle packages include: 3 home broadband data top ups,
home network gateway, Telstra Air and Telstra Broadband Protect. These all help out the
customer in ways of feeling safe and providing them with convenience.

Telstra is currently partnered with PayPal, which allows for easy bill payment. Telstra is also
partnered with Hey Presto! which allows the consumer to watch all of their favourite movies
and shows. The partnership allows Telstra to offer consumers Presto TV, Presto Movies and
Presto Entertainment on any of their product offerings. (Tsiatsias, 2015)

To improve their competitive position, Telstra should offer unlimited internet just like their
competitor and consider their pricing strategy. They should also focus on making their website
user friendly, some terms that were used on the website are not familiar to people who arent
knowledgeable in the internet area.

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Analysis of Pricing Strategy

Telstra currently has three different plans to choose from for home broadband, they range from
small to large. Plans begin at $75 per month for 100 GB and go up to $115 per month for 1000
GB, there is also an additional charge of $192 if professional installation is needed. (Telstra,
2015) This puts Telstra at a disadvantage compared to other companies due to the fact that they
do not offer an unlimited data package. Comparing Optus to Telstra, it seems that Optus provides
a better value-based pricing system. Optus has two broadband options: $80 per month for 200GB
and $100 per month for unlimited internet. Optus also has a much lower connection charge
which is set at $70 for connection and $20 for delivery. (Optus, 2015) Consumers will look at
Optus as the better choice, due to the unlimited option being $15 cheaper. The problem Telstra
currently has is that their price ranges are not competitive with their other competitors such as
Optus. This puts them at a disadvantage because people will go for the company that is able to
give them a better deal.

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Physical Evidence
Telstra presents its physical store in a clean a modernistic manner. Outlets generally follow a
racetrack composition, meaning that consumers can navigate the store without interruption or
obstruction and explore all services on offer. Telstras store design caters indicatively towards all
aspects of the Telstra franchise (ISP, Tablets, phones, etc) to maximise efficiency and allocation
of store space.

Telstras online store has a different feel and presence to it than its physical counterpart. Telstra's
web page follows the webpage formula known as F-shaped Pattern The F pattern is the way
people read content displayed on a webpage, by reading and analysing the most important
information at the top, followed by additional information under the main heading.
Telstra also segments their webpage domains to allow easier navigation for consumers so
potential phone buyers are not looking at home internet deals.

The colours of the webpage do not clutter or juxtapose any other content on the page. The most
important information is displayed at the top of the page under the navigation bar, this is for easy
access for majority of users. Every option is labelled clearly and if a specific option cannot be
view there is a search bar. The main service of Telstra being an ISP is foregrounded heavily on
this personal page compared to Telstra's landing page
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Cameron Palmar | Kirk Gibson | Nick Jaket | Amanda Gomes

Service Blueprint

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Fig 7: Blueprint Service indicating physical evidence, customer action, contact employee (visible
/ invisible) and support process procedures.
Analysis of Customer Service Strategy
A large reason why customer service is important is because it can help increase customer loyalty
which is a very helpful factor in this type of industry. Great customer service keeps customers
around and without great customer service, consumers are more likely to switch to other
providers who treat them with the respect they are looking for. Telstra states on their website that
they are committed to getting to know their customers and meeting their telecommunication
needs (Telstra, 2015), but this does not show that they are keen on providing a great customer
experience. According to many online reviews, Telstras customer service department is lacking
extremely. Although Telstra is available 24 hours and 7 days a week for their consumer problems
and questions they are still not completely satisfying their consumers. According to
productreview.com, Telstra's customer service is not their only problem. There are numerous
complains about slow ADSL and poor connection problems as well. Their service recovery
strategies seem to fail repeatedly for consumers. For example: many consumers have complained
about not being able to have someone come in and fix the problem, but still get billed for the
technicians time regardless. Via reviews, it seems Telstra does not have a personal level
connection with their consumers. In the past, Telstra has been in trouble with the Australian
Communication and Media Authority (ACMA) for not meeting service standards. They were
recently fined $510 000 just as they fell short of the two benchmarks outlined in its Customer
Service Standards Guarantee. (McTaggart, 2015)
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There is a large amount of reviews on Telstra that are not very inviting to any new prospect
customers. Telstra also has not taken the chance to comment on any reviews and apologise for
any of the issues that consumers have experienced in the past, which also looks terrible on the
company. It is not hard for Telstra to see that they are not doing well in the customer service
sector and they do need improvement. This can be done with the help of management and setting
goals for the year to put more focus on their customer service.

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Recommendations

The first recommendations for Telstra would be to adjust their pricing on Broadband Internet
plans to compete with its competitors as indicated by 3C analysis. Currently Optus, iiNet and
TPG all offer unlimited Broadband Internet packages ranging from $60-100 a month, whereas
Telstra doesnt have an unlimited package and still charges more money per month than its
competitors. With Broadband Internet prices becoming more competitive, Telstra will need to
adjust its pricing or itll lose a large chunk of the market share. Telstra can adjust this issue by
offering an unlimited Broadband Internet plan for $100 per month regardless of whether its an
ADSL, ADSL2 or NBN connection.

Secondly, another recommendation for Telstra includes increasing their level of customer
service. With many current and previous consumers making complaints online, as well as Telstra
being fined by the Australian Communication and Media Authority, their lack of overall
customer service is beginning to damage their reputation and future customer base. In order to
combat this and try to revive its reputation Telstra must improve its customer service by teaching
its staff how to deal with angry customers, complaints, and staying true to their Customer Service
Standards Guarantee. If Telstra is not 100% sure it can provide a certain standard of customer
service, altering their Customer Service Standards Guarantee is something that needs to be
considered.

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And finally, Telstra should focus primarily on re-evaluating the sustainability of the company by
managing its approach to consumers and competitors. By aiming to provide excellent service for
customers through catered needs and goods while providing a sustainable and profitable
networking plan such as the Next G concept, Telstra will ultimately succeed at beating its
competitors in the broadband category.

Cameron Palmar | Kirk Gibson | Nick Jaket | Amanda Gomes

Conclusion
In conclusion Telstra is a strong telecommunications company with a large presence within
Australia, however being the biggest company doesnt always make you the best company.
Throughout this report, service issues have been outlined that Telstra needs to work on in order
to remain a large player in the telecommunications sector of Australia. Increasing their customer
service standards as well as becoming more competitive in terms of pricing and packages
available are issues Telstra needs to address in order to continue to bring in new customers, as
well as satisfy their current customers. If Telstra fails to address the issues outlined in this report,
they will lose their market share and potentially no longer control the Broadband Internet market
share within Australia.

Cameron Palmar | Kirk Gibson | Nick Jaket | Amanda Gomes

References
AFRBIZ. (2014). Telstra: Implementing Market Based management. Retrieved from
Financial Review Case Studies: With Business News: http://www.afrbiz.com.au/casestudies/telstra-implementing-market-based-management/Page-1.html
Agius, A (2015, August 7). 10 Marketing Tactics to Help You Convert ... - Skyword.
Retrieved October 6, 2015, from http://www.skyword.com/contentstandard/enterprisemarketing/10-marketing-tactics-to-help-you-convert-prospects-to-customers/.

Brown, M. (2015). Top 100 Brands . Retrieved from Millward Brown:

https://www.millwardbrown.com/BrandZ/2015/Global/2015_BrandZ_Top100_Chart.pdf
Dobbie, P. (2012, September 20th). Up to Speed: Telstra Still hard to Beat. Retrieved
from ZDNet: http://www.zdnet.com/article/up-to-speed-telstra-still-hard-to-beat/
J, S. (2012, October 4th). Telco Customer Service Madness: Case Study. Retrieved from
Steve J On It: http://stevej-on-it.blogspot.com.au/2012/10/telco-customer-servicemadness-and-nbn.html

McTaggart, D. (2014, January 13). Telstra cops fine for poor service. Retrieved October
5, 2015, from https://www.yourlifechoices.com.au/news/telstra-cops-fine-for-poorservice
Optus. (n.d.). Retrieved September 25, 2015, from http://www.optus.com.au/
Cameron Palmar | Kirk Gibson | Nick Jaket | Amanda Gomes

(2014). Physical Evidence Marketing Mix | Marketing Teacher. Retrieved September

16, 2015, from http://www.marketingteacher.com/physical-evidence-marketing-mix/.
Research, M. (2014). Telstra Market Shares Competitors. Sydney: The Australian.
TSIATSIAS, M. (2015, March 3). Hey Presto! Your favourite TV shows and movies in
the palm of your hands. Retrieved September 25, 2015, from
http://exchange.telstra.com.au/2015/03/03/hey-presto-your-favourite-tv-shows-andmovies-in-the-palm-of-your-hands/
Telstra. (2015). About Telstra. Retrieved from Telstra:
http://www.telstra.com.au/abouttelstra/company-overview/history/telstra-story/
Telstra - mobile phones, prepaid phones, broadband, internet, home phones, business
phones. (n.d.). Retrieved September 25, 2015, from https://www.telstra.com.au/

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Appendices
Appendix 1

Fig 1:
Millward Brown Brand Recognition Top 100: Telstra being above KFC, Woolworths and
PayPal. (Brown, 2015)

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Appendix 2

Fig 2:
Adjusting to a Consumer Market instead of Company Based. MBM Focused.
(AFRBIZ, 2014).

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Appendix 3

Fig 3:
Market Share and Revenue comparison for Telstra between competitors
(Research, 2014).

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Appendix 4

Fig 4:
Comparison of competitors Speed Coverage (Telstra = 4G and BigPond Fibre / DSL).
(Dobbie, 2012).

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Appendix 5 and 6

Fig 5:

Fig 6:

Overhead display of racetrack format

Simplistic representation of the F pattern

(Physical Evidence, 2014)

(Agius A, 2015)

Appendix 7
Service Blueprint as seen in the previous section.

Cameron Palmar | Kirk Gibson | Nick Jaket | Amanda Gomes