Introduction
Optus Company is a communication company that provides various communication services to about seven million consumers in Australia every day. The various services that the company provides include mobile, all telephone services (international and local), business network services, internet and satellite services and subscription television. The merge of Sing Tel and Optus in 2001 has helped Optus to become the leading company in Australia to become active in infrastructural base development.
Optus has specialize in four main business areas and these include; Optus Consumer( whose main aim is to ensure that the services that the consumers are getting are of good value and quality), Optus Business (which is more focused on the alternative access services and ensuring anew level of communication mobility to corporate and government clients), Optus Small and Medium Business (that provide telecommunication services to small and medium businesses) and finally the Optus Wholesale and Satellite (whose aim it to provide services and capacity to other telecommunication and communication companies) (Loundon, 2000).
The major challenge facing Optus Company is over- Expectations in consumer adoption rate of the new technology, services and market growth. Initially, more money was put into spending and investment and large increase in wireless adoption, pc sale and internet sale were realised.
However, this did not take long as people were unable to adapt to the new technology and this brought under-performed expectations. Even with the merging of the Optus Company and Sing Tel Company, the consumer adoption to the new technology that the merged company provided was low. This posed a great challenge to the Optus Company which had high expectation of consumer adaptation to the new technology (Wayne &Deborah, 1999).
Market segmentation
Market segmentation can be termed as dividing the market according to their demographic, geographic, behavioral, psychographic and technological variables (Loundon, 2000).
When using consumer behavior to segment the market, various tools are used and these include:
Benefit Sought
In benefit sought tool, the consumers tend to be grouped according to the benefit that they are seeking to get from that particular product. For instance, in the case of Australian market the consumers will tend to be grouped in various groups according to the benefit they get from the communication companies. These groups of consumers will subscribe to particular telecommunication and Communication Company according to the benefit they get. For instance, if one company have low international calling rate, a group of consumers that make international calls will subscribe to this company other than subscribing to other companies that provide the same service but at a higher price (Wayne &Deborah, 1999).
Product Usage Rate
In product usage, the market is segmented according to the rate of consumption of a certain product or service by the consumer. In the market, different people use certain product with a different rate and thus they will purchase the specific product that they frequently use. There are those consumers that use a certain product more regularly and other who use the same product less frequently. For instance, there are those people that use internet every day thus their rate of use is very high and there are those that use it twice a week. Thus the market of internet will be divided into high rate users and low rate users (Mc Graw, 2005).
Brand Loyalty
This market segmentation tool tend to group the consumers according to their commitments to purchase, repurchase and continue to use a certain product or service. The consumer may also promote that certain product to his or her friends and encourage them to purchase that product. This group of consumer will purchase the product despite the high costs as compared to others who will buy other products in case the product they were using has a higher price. In the Australian market, there are those people that use a certain product despite the increased price because they feel satisfied when using that product. For instance, in the telecommunication sector a consumer can go on using the subscribed television even if the company has increased the cost per month (Loundon, 2000).
Product End Use
This market segmentation tools tend to segment the market depending on the ability of a product to meet the needs of the last user. In the market, when a product has been sold by the producers, it passes through different channel before reaching the end user. Thus the consumers will be divided according to the ability of a product or a service to meet the needs of the last consumer. For instance, in the Australian market the market may be segment according to the ability of certain communication service to give satisfaction to the last user.
The Readiness to Buy
A market can be segmented by use of this tool in that there are a group of individuals who are ready to purchase certain product and there are those individuals who are not ready to purchase any certain product. For instance, if a new product has been introduced in the market, there is a group of individuals who will be willing and ready to purchase that product and there will be another group who will not be ready to purchase that certain product.
Decision Making Unit
In purchasing a product, various groups including a group of employees, family members, members of an organization and technical specialist are required. In purchasing of information system and production equipment a technical expert is required to give advice. Thus a market can be divided on the group of people that one seeks information from before purchasing a product (Mc Graw, 2005).
Profitability
The Australian market can be divided in terms of profitability in that when the costs of bringing the product or the services to the consumer is lower than the price of the product or service then a profit is realised. In the market there are different people who offer different prices to the same commodity or service and the producer incur different cost in the delivery of the same product or service to the different people. Thus the producer may look at the profit they gain from bringing or providing a certain product or service to certain group of people and segment the market according to profit gained (Wayne &Deborah, 1999).
Income Status
This is the last consumer behavior tool of segmenting a market and it involves segmenting a market according to the income they get. Different people have different scales of income; there are those that have a high income, medium and a low income. The higher the income of a consumer the more he or she purchase expensive and complicated goods and services, and the lower the income the less expensive and complicated goods and services a consumer purchases. Thus consumers can be grouped on their income status (Mc Graw, 2005).
The consumers who are likely to adopt Optus Company are the consumer that are seeking a specific benefit from the company, for instance the consumers that are looking for a company that will offer both international telephony and local telephony and since the company offer this services the consumer can adopt it. Another group of consumers likely to adopt Optus Company are those that have a high profitability and a high income, this is so because the company is seeking to make money while still providing services to the consumers. Another group that is likely to adopt Optus Company is the group that has a brand loyalty; these are the consumers that will always purchase the products and services of the company (Loundon, 2000).
Motivation for Consumers to seek Association with the Optus Company
The consumer behavior theory can be explained can be in terms of the law of Diminishing Marginal Utility which suggest that consumers will spend all their income so that the last coin used earn the same amount of utility thus ensuring that the marginal Utility per coin is equivalent to the product or services purchased. On the other hand, motivating a consumer involves changing his or her views on certain product or services that the company is offering. Motivating a consumer is technique that has been entangled in the pricing and quality of the product and services the company is offering.
For a consumer to be motivated to use a certain product or service, he or she must be sure that the money he is going to pay for that product or service will cater for the satisfaction of his or her need. For instance, Optus Company should ensure its subscribers that the services that they are offering are of the best quality as compared to the services that the other companies are offering. If Optus Company reduces the prices of the services and products they are offering more people will subscribe with them. This is because when prices are low the consumers are encouraged to purchase the product or the service at an affordable price.
Another way likely to motivate consumers to be associated with the Optus Company is when the company has a good reputation in the market. If Optus can have a good reputation in the Australian Market, more consumers will want to be associated with it. This can only happen if the company provides the best services at an affordable price to the consumers who then promote the company by praising their product and services and thus the company’s reputation is raised (Wayne &Deborah, 1999).
Trends that impact on purchasing trend
There are a number of trends that impact on the purchasing trends of mobile phones in Australia and these include;
Economic trends, when the economy of a country changes the profitability and the success of a company is affected. This then affect the availability of capital, the cost of a product and the demand of that particular product. When the economy of a country goes up, the demand of product goes up, for instance, if the economy of Australia goes up the demand of mobile phones and other product will up. This is because, when the economy improves the economic status of an individual rises and this allows him or her to purchase other goods. However, when the economy of a country goes down, the economic status of an individual lowers and thus he or she has less money to dispose and thus their demand will go down as well (Loundon, 2000).
Another trend that affects the purchasing trend is the Political Trend; political trend affect government decisions and the economy of that country at large. Governments can decide to impose more tax on the imported goods and this means an increase to the price of imported good. Mobile phones are not an exception and any decision to increase the tax on imported goods may lead to decrease in the demand of mobile phones and this means less phones will be purchased. On the other hand, a decrease in the tax of the imported goods leads to increases in the purchase of all the imported goods. To add to this, political instability of a country may lead to decline in the economic status of that particular country which may then lead to low economic status of all individuals and this mean a low purchasing power of the citizens (Mc Graw, 2005).
Socio-Cultural Trend also impact on the purchasing trend of a product. Socio-cultural trends include all the demands, taste and preferences of an individual which vary according to fashion and available income of that individual. Different individuals have different taste and preferences and thus they purchase different commodities and services. For instance, in the mobile market different individuals will purchase different label of mobile phones for example Nokia, Siemens among other depending on their taste, preference and income.
To add to this, the age, religion and affluence of the individual affect the demand of a particular product or service. This so because different age groups have a demand on a certain type of mobile phone and thus they will tend to purchase more of that particular phone than any other age group (Wayne &Deborah, 1999).
Technological Trend is another factor that affects the purchasing trend. Improved technology of one product leads to its increased purchase. For instance, in mobile market, when a phone has added feature as compared to the other, consumers tend to purchase that phone more than the other available phones despite cost of that particular phone, for example, if a phone has a camera and is expensive than the other phones which do not have, consumers will tend to purchase more of the camera phone than the other low price phones. To add to this, when technology of certain commodities improve consumer will purchase more of this product than any other product) (Loundon, 2000).
For the marketing managers to raise awareness of their products in the market of Australia, they need to look at a certain group of individual who require their services. They should look at the economic status of that particular group and thus set a price that is that is relevant to the target group. By so doing, they ensure that the targeted market has been covered and that the price of their products and services are in the range of their target consumers.
This makes their products (mobile phones) become popular with a certain group of individuals and thus increasing the market knowledge of their product. The marketing managers should also ensure that their products and services are upto date with the current technology, for instance, if currently in the world all phones have internet services, they should ensure that their products have been fitted with internet services. This will help with raising awareness of their product in the marker as their product will have a competitive advantage over the other companies’ products (Mc Graw, 2005).