Value Creation Sustaínability and Performance MyAssignmenthelp.com

Question: Discuss about the Value Creation Sustanability and Performance. Answer: Introduction. Service marketing is the analysis of marketing of services which are intangible, inseparable and homogenous(Lovelock, 2012). Services need much more marketing effort due to the fact that they cannot be touched or separated from the producer. Telstra is Australias largest telecommunications company. Main product offering of the firm are telecommunication services like voice, internet access, pay televisions etc.(Telstra, 2017). Telstra has consolidated its market position by making various acquisitions and enjoys 51% market share in Australian markets. On the product life cycle the telecommunication services offered by Telstra are on the growth stage because there is a huge, continuous and growing market for mobile telecommunication and internet access. Environmental Analysis and Scan of Business of Telstra An assessment of external environment helps in understanding the various external factors which affect a business(Bamford West, 2012). Following is an assessment of external environment of Telstra. A SWOT analysis helps in assessing the strengths and weaknesses of a firm and its products(Aaker McLoughlin, 2010). Following is a SWOT analysis of Telstra. Strengths Huge brand recognition recall and brand loyalty High quality and strong network making internet access easy High marketing and advertising strength High level of research and product innovation especially in hardware development Weaknesses Changing digital technology is leading high research and innovation cost High marketing cost due to high competition from international players like Vodafone Lack of product differentiation due to homogeneity of services High supply side and infrastructure cost due maintenances and setting up telecommunication servers Opportunities There is a growth opportunity as the mobile handset and digital device market is growing due to which there is growth in demand for telecommunication services Growth in number of people aspiring for better networks and internet speed Growth opportunity in emerging markets as disposable income of people is rising there Tie up with Samsung for telecommunication plans has a opened huge opportunity Threats There is a huge competition with Vodafone who are giving plans at lower costs High marketing cost can lead to lessening of financial support to server maintenance People switch brands very easily as differentiation is less as it is a service and switching cost is low Table -1: Source Made by Author (2017) Adapted from Telstra, (2017) Therefore a SWOT gives a clear picture of where a firm stands in the industry and offers guidelines for the way forward. Pestle analysis PESTLE (political, economic, social, technological, environmental and legal) is an analysis to understand the external environment which affects a business(Alkhafaji, 2013). Following is the PESTLE analysis for Telstra- Political- The Australian political system promotes the telecommunication industry(Telstra, 2017). However, the firms need to take licence to set up a telecommunication business in Australia(Government of Australia, 2017). Government also monitors inappropriate content hosted on the internet service provided by these firms. Economic The ongoing innovation in telecom sector have led to an unprecedented growth in demand for telecom services. This growth in demand is expected to rise (budde.com.au, 2017), However, recessionary pressures may make the growth a little sluggish in the short period. Social- The current youth considers it fashionable to own digital devices. This is propelling the trend for purchase of telecommunication services like data.(Telstra, 2017). Additionally, peer group influences brand choice for purchase of data. Hence, firms need to convince youth to purchase from them. Technological- This industry is highly technology driven(Telstra, 2017). To set up and maintain the business, the firm needs to spend on hosting servers, communication towers and innovation and research. Environmental- There is no visible harms from telecommunication services to environment. However, there are certain concerns of some researchers about harmful radiations emitted during use of these services which may harm human tissues.(National Cancer Research Institute, 2014) Legal- Australian Communications and Media Authority(ACMA) regulate the telecommunications industry(Government of Australia, 2017). The authority puts regulations on spam call and regulates the do not disturb system. The firms have to abide by customer privacy norms and all the work regulations pertaining to workforce like safety at work, anti-discrimination etc. Therefore, PESTLE analysis allows a firm to analyse the external environment and formulate strategies to work with in this environment. Set of decision making elements that a firm uses to attain the goals and objectives of marketing are known as marketing mix.(Bateson, 2010) . Products which are tangible have four key marketing mix concepts which are important for decision making. These are product, place, price and promotion(Armstrong, 2012). However, services are different as they are intangible, inseparable and offer an experience as a product. Therefore, services marketing have three additional concepts in the marketing mix and these are physical evidence, process and people. Analysis of 7Ps of service marketing for Telstra and Summary of Issues underlying these 7Ps Product- Product is the need satisfying offer that the company gives to the customer(Mudie, 2013). Services are intangible products and ownership is not separated from the owner; only the experience of the product is sold (Looy, 2013). The products of Telstra are voice and data services. The major issue underlying this element is the homogeneity element(Fisk, 2013). That is, competitors products are almost similar. To solve this issue the firm focuses on quality of service maintenance and excels in the network it provides. Price- Again homogeneity of products makes the customer perceive the products as similar. This leads to the issue of adequate pricing(Looy, 2013). Firm tries to keep pricing which is at per brand positioning and is perceived as genuine by the customer(Fisk, 2013). As the telecom industry is highly competitive, Telstra has to keep competitive and penetrative pricing(Telstra, 2017). This helps in attracting customers. Additionally, discounts on usage of data and voice are being given to attract and retain customers. However, quality of service is one aspect which can help the company in keeping prices above the computers price. Place- Place is the medium through which people purchase the services(Bateson, 2010). Place can be virtual or real. Telstra has its own galleries and outlets to activate the service(Telstra, 2017). The issue with place is that the service is a continuous service hence, it is important to provide convenience of purchase of service to the customer (Telstra, 2017). For this purpose the firm sells the service through its outlets, website and through retailers. Promotion-As the product is homogenous and inseparable, the major issue with promotion is the customer convincing aspect. Due to this, the firm needs to convey unique points of the product to the customer (Fisk, 2013). As the target audience of the firm are people of all income, classes and ages the firm has a wide range of promotional activities(Telstra, 2017). It promotes through television and print advertising(Telstra, 2017). There is also discount on consequent data and voice recharges. The firm excels in network quality; hence, that is the focal point of its promotional activities. Physical Evidence- As services are intangible; firms need to project certain physical cues to customers so that they can associate with the service(Bateson, 2010). Physical evidence is the cues and the tangible elements which are associated with the service (Wirtz, 2012). The actual service which Telstra provides is telecommunication and data. The problem with telecom services is that it is a pure service and does not have many tangible evidences to support its existence like hospitality or aviation services have(Telstra, 2017). To increase its tangibility the firms uses logo, tagline and jingles to convey service tangibility to customers. The firm tries to depict the philosophy of the company via the tagline Its how we connect. The firm also tries to create relationship with customers through customer service. Process- Process involves the service delivery procedure (Wirtz, 2012). The process of service delivery starts for Telstra when the customer purchases a sim card and decides on the type of voice and data service he wants(Telstra, 2017). The service is activated after a few hours and the customer can get voice and data service as per network availability. The issue is that as service is continuous, the customer needs to be made aware about bill payments and refills(Telstra, 2017). Telstra does this through awareness campaign and promotion of virtual medium for the same. People- Service delivery is highly manpower oriented. People are human resources who are involved in proper delivery of the service(Payne, 2012). The issue which the firm faces is that telecom is a highly technical service. Therefore, there is a competition in the labour market to get skilled technicians(Telstra, 2017). To get good manpower the firm has attractive recruitment policies and in-house training. Therefore, through the 7Ps Telstra is able to deliver the service to customers with an emphasis of quality. Recommendations for Improvement of Service Delivery Telstra is a growing business firm and has been able to survive in tough competition. However, there is always a scope for improvement. Following are some recommendations for improvement in 7Ps of marketing of Telstra which the firm can use to grow even faster and generate completive advantage. Telstra can extend its product line and include direct to home television service in its product offering. This will increase the customer base of its product and help the company in generating more revenues. Telstra should also invest more on servers and other infrastructure so that the reach of the firm grows and network becomes stronger. Additionally, the firm can think of venturing into global markets with its current products. 2 Telstra should focus on increasing its distribution network. It can do so by increasing the place component of the marketing mix. The firm can open stores at super markets and sell via tie up with super market chains. They can also tie up with retail stores and provide the service through them. Telstra should also promote virtual selling and emphasise on purchasing of data and voice services through its website. 3 The firm can use price bundling and offer discount to people who purchase both voice and data. Additionally, discount should be given for large data purchase. Also customers who purchase data consistently for a long time can be offered lower tariffs. This will increase brand loyalty, 4 The firm uses many promotional techniques such as advertising and sales promotion. The firm should also use social media to generate more reviews, feedback and comments. The firm does have a social media page; however, it is not updated frequently. Through social media engagement the firm can increase customer relationship and get active feedback on services. 5 The firm should invest more in technology and research in order to provide uninterrupted voice and data services. Further emphasis should be given to server maintenance so that customers dont switch over to other competitors. Additionally, the process should be made even simpler by reducing service activation time and emphases on virtual bill payment and recharges. 6 Customer service is very important in service delivery as service is people oriented. Therefore, training should be made even more intensive. Employees should be given transferability skills training. Additionally, Telstra should make sure that it hires skilled manpower so that quality of service delivery can be maintained. 7 Services are intangible hence the firm needs to use physical cues to convey their product offering to the customer. Telstra uses lot of physical evidences like its tag line, messages and logo. However, its logo and tagline is not as popular as some of its competitors like Vodafone. Telstra should advertise in such a way that its logo and tagline generates brand recall. Additionally, associating service delivery with a cartoon or fantasy character can enhance physical evidence. Therefore, through these recommendations Telstra can further improve its brand image and customer loyalty. Planning the service marketing through an assessment of marketing mix and environment can assist Telstra in achieving greater competitive advantage and survive in a highly competitive and a challenging industry. Service marketing can also help the firm in its further growth in the industry. References Aaker, D. A. McLoughlin, D., (2010) Strategic Market Management: Global Perspectiv. New Jersey: John Wiley Sons. Alkhafaji, A., (2013) Strategic Management: Formulation, Implementation, and Control in a Dynamic Environment. New York: Routledge. Armstrong, G., (2012) Marketing: An Introduction. New Delhi: Pearson Education. Bamford, C. E. West, P. G., (2012) Strategic Management : value creation, sustanability, and performance. New York: Cengage Learning. Bateson, J. E. G., (2010) Services Marketing. 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National Cancer Research Institute, (2014) Cell phones and cancer risk. [Online] Available at: https://www.cancer.gov/cancertopics/factsheet/Risk/cellphones Payne, A., (2012) Marketing Planning for Services. New York: Routledge. Stevens, R., (2012) Marketing Management: Text and Cases. New Jersy: Routledge. Telstra, (2017) About Us. [Online] Available at: https://www.telstra.com.au/ [Accessed 8 May 2017]. Wirtz, J., (2012) Essentials of Services Marketing. New Jersey: FT Press.