Macro Analysis Of Telecommunication Industry In Australia

Executive Summary

The telecommunication industry is the most booming industry across the world and in Australia too. It is very important for telecommunication industry to analyse its micro environment and macro environment. Microenvironment consists of the organisation's various departments, competitors, customers, marketing intermediaries and publics. The microenvironment represents the strengths and weaknesses of the organisation. The organisation has partial control over the factors of its microenvironment.

The macro environment consists of the factors such as demographic, economic, natural, technological, political and cultural environments of the market place. These environments represent opportunities and threats of the organisation and the organisation do not have control over them. This report further discusses about the demographic factors in terms of the ageing population, its geographic shifts, education level and family structure of the population.

Furthermore, the report illustrates the economic environment based upon the difference in income and their spending patterns. Natural factors such as shortage of resources, the increase in the prices, increase in pollution and government' approach towards wise use of natural resources. Moreover, Technological innovations and their effects on marketing environment are discussed in context. Political factors such as government regulations and policies are briefly discussed next. This report briefly explains the Telecommunications Act 1997 regulating the telecommunication industry.

Finally, the cultural values and beliefs of people are illustrated to explore the effect on their buying behaviour.

1.0 Introduction

There have been substantial changes in Telecommunication industry in Australia in last 20 years. The telecommunication industry is no more the Government monopoly. So there is a very strong competition in telecommunication industry among industry giants such as Telstra, Optus, Vodafone and 3 Mobile. Technical developments have brought increase in types of services offered, which includes telephone, mobile, internet and data transfer services, pay TV and video conferencing and many more. The Australian telecommunication market is fairly complex because of its characteristics. The important factors to be considered are its geographical size, multi-cultural population, continued government control over Telstra etc (Daly A. E., 2001).

While deciding the marketing strategy, it is very important to consider micro and macro environment factors of the marketing environment. A company's marketing environment consists of persons and factors outside the marketing activity which may affect the marketing strategies. The marketing environment is made up of two parts: The Microenvironment and The Macro environment.

Microenvironment consists of the forces which help the organisation to serve its customers in a better way. The organisation usually has some control over these factors. Microenvironment consists of various departments of the organisation itself, competitors, marketing intermediaries, customers and publics (Kotler, Brown, Adam, Burton, & Armstrong, 2007, p.163)

The components of the micro environment work in an external environment which forms the opportunities and threats for the organisation or any particular industry. The company needs to consider those forces in its external environment. The macro environment consists of six factors which are listed below.

* Demographic environment

* Economic environment

* Natural environment

* Technological environment

* Political environment

* Cultural environment (Kotler, Brown, Adam, Burton, & Armstrong, 2007, p.163)

2.0 Demographic Environment

The study of Demographic environment consists of human population in terms of age, sex, location, occupation, race and other differences. Demographic environment is very important to design the marketing strategy, because this distinguishes the demands of the customers according to the demographic factors. World's population is now over 6.4 billion and is expected to be more than 8 billions by 2028. The main growth is in countries like China, India and Brazil. Thus these markets are being very popular for organisations. Australia represents only half a percent of the world's population with 20.55 million and a rise if 1.2% per annum (Kotler, Brown, Adam, Burton, & Armstrong, 2007, p.167-168).

2.1 Ageing Population of Australia

Australia's population is expected to be between 24.9 to 33.4 million by 2051 which includes the birth rate, overseas migration and deaths. The age composition of Australia will change because of the ageing of the population. In year 2004, 13% of Australia's population was aged over 65 years, which is expected to rise to nearly 27% in 2051. On other hand, the population with an age under 15 years will decrease from 20% in 2004 to 13% in 2015 due to lower fertility rate (Australian Bureau of Statistics, 2007).

Lower birth rate and higher life expectancy has brought the increase in the proportion of the ageing population. The baby boom period will also make a considerable impact on businesses. Because the baby boom period, the proportion of people aged over 60 will rise from 11.9% in 1996 to 29.9% in 2050. Thus, it seems that the baby boom will make a big market in future and will be a core target for telecommunication industry (Kotler, Brown, Adam, Burton, & Armstrong, 2007, p.170-175).

Most of the telecommunication industries have started targeting the people with age of over 60 years. As the need of people varies with the increase in age, telecommunication companies need to customise their products accordingly, for example, giving pensioners' discounts.

2.2 The changing family

There is an increased trend of single parent house holds in Australia. In 2001, there were less than 10% adults living alone. This figure has increased to more than 30% in 2004; the market is increasing rapidly for telecommunication industry for the people living alone. As more people live alone and separate to their family members, there will be more demand for communication (Rix, 2004, p.38).

2.3 Geographic

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