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The Key Success Factors in Marketing

Paper Type: Free Essay Subject: Business
Wordcount: 5471 words Published: 1st Jan 2015

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Today, the world is evolving at a fast pace due to the technological advancements. Higher education, as in the case of many other sectors, has witnessed tremendous changes in different aspects with respect to the ways of delivering education to students. For the past years, there has been an increasing social demand for post graduate programs especially in the developing countries such as United Arab Emirates (Australian International Education Conference, 2007). Moreover, in order to meet the needs of that demand and compete at a worldwide scale, higher education institutions are going global and engaging in what is known as cross-border education through opening abroad branches (Fadzil & Munira, 2008; Nicolescu 2009). With the purpose to attract students for admission at high education institutions, marketing has become a vital part of their strategy plan that should “pursue greater mission differentiation to streamline their services and better respond to the changing needs of their constituencies” (Benjamin & Carroll, 1998).

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Marketing education still faces a quite number of challenges due to the nature of education itself, where marketing concepts applied to the education sector do not operate as being applied in the business sector (Nicolescu, 2009). However, according to Mazzarol (1998) there exist a number of key success factors that contribute to the success of education marketing. Factors related to the institution’s image, resources, quality of provided services, and possession of international strategic alliances. Moreover, competition among higher education institutions have increased dramatically; thus, the quality of services provided by those institutions has to meet the perceptions of the customers – in this case, the students (Raposo & Al Ves, 2005).

This paper will examine how universities market their education services across borders in a professional manner. It will address the obstacles that educational institutions face especially marketing their education as a foreign campus offering the same level of education as the main campus abroad and whether it has accreditation or not by the local authorities.

Purpose of Study

Market Research Objective

The main objective of this study is to identify the key success factors in the marketing for educational institutions that offer postgraduate programs. Also, it discusses the importance of incorporating marketing into the strategy plan of high education institutions as well as addressing the limitations that marketing education faces in the process of promoting for education services. Mainly, the study will be answering the following research questions as stated below:

Market Research Questions:

Would there be any significance of implementing a strategy plan for higher education institutions?

What marketing techniques would be most successful in targeting the hearts and minds of students seeking higher education?

Does accreditation represent a serious problem for a campus branch? What would be the alternatives to overcome such problems?

What are the services or facilities that would be offered in marketing education?

Does the quality of the education services provided by education institutions meet with the perceptions and expectations of students?

Structure of the Paper

The structure of this paper is divided as follows: first, it presents a literature review that has been done based on an extensive research on marketing higher education and cross-border education. Also, the literature review visits strategic planning for marketing education and in addition to the measurement of the students’ expectations of education services. Second, the paper presents the research methodology that has been utilized in this study. Third, it evaluates and analyzes the data gathered using SPSS statistical package software tool. Finally, the study presents the limitations of the study, recommendations and future action, and conclusion.

Literature Review

For the past years, an extensive number of literature and researches have been conducted on the growth of the higher education sector due to the technological advancements that have occurred. Furthermore, due to the increasing social demand for higher education, a more competitive environment has been created for higher education institutions that have crossed borders and transformed more into a global trade (Nicolescu, 2009; Fadzil & Munira, 2008; Raposo & Al Ves, 2005; Lerner, 1999). In order to create a competitive edge over others, higher education institutions realized the importance of being engaged in a strategic planning process (Lerner, 1999) through the application of marketing concepts to their education services (Nicolescu, 2009); thus, satisfying their targeted market segment expectations, i.e., the students’ perceptions.

Importance of Strategic Planning to Higher Education

A variety of forces influence higher education sector that has created a number of challenges for institutions promoting for higher education. Such forces include the increasing social demand for higher education (Fadzil & Munira, 2008; Martin, 2007; Lerner, 1999) accompanied with a decrease in government funding; in addition to the emergence of new models of higher education in the recent years (Lerner, 1999). These facts compel universities for devising an effective and well-defined strategy plan. A strategy plan will enable a higher education institution to identify its competitive edge and place within the environment (Lerner, 1999). Lerner (1999) continues and quotes “Institutions of higher education that do not rethink their roles, responsibilities, and structures… can expect a very difficult time in the next decade and next generation. Some will not survive. Most will be expected to do much more with far less” (Glassman et al., n.d.). Historically, strategy has military roots and according to Merriam Webster’s dictionary, it is defined as “the science and art of employing the political, economic, psychological, and military forces of a nation or group of nations to afford the maximum support to adopted policies in peace or war”. When applied in business context, a strategy plan for an organization usually aims towards attaining competitive advantage (Lerner, 1999). Moreover, during the past decade due to the emerging challenges, many higher education institutions have engaged in strategic planning in order to confront the changes in their internal and external environment (Lerner, 1999) and “adapt to the rapidly shifting environment” (Rowley, Lujan, & Dolence, 1997).

Steps in a Strategic Planning Process:

Every education institution designs its own unique strategy plan in order to achieve its designated objectives; nevertheless, every successful strategic model includes the following steps (Figure 1):

Figure 1: Strategy Plan Process Model

Vision: the first step in any strategy plan is to identify the higher education institution’s vision that indicates the reason for the institution’s existence.

Mission: identifies “major goals and performance objectives” (Lerner, 1999). It is often known as Mission Statement that describes the core values of the organization in order distinguish it from other competitors.

Environmental Scan: after setting the vision and mission, the higher education institution is ought to study its environment and analyze the external and internal factors that influence its performance. An assessment model called the SWOT analysis model is normally conducted in order to help an organization identify its internal strengths and weaknesses, as well as the external environment’s threats and opportunities. Consequently, once a higher education institution conducts the SWOT analysis, it will be able to know its weakness or areas for improvement and make use of its strength areas in order to create a competitive advantage over other similar institutions. Also, analyzing the external environment will enable the higher education institution to know its competitors, explore new education trends, and utilize any technological advancement brought into the education field (Lerner, 1999). This will ensure that the strategy designed for the institution provides best alignment between its internal situation and external environment (Hill & Jones, 1992). Moreover, education institutions can carry out a more comprehensive analysis known as Porter’s Five Forces Model that evaluates the risk of new competitors entering the industry, the bargaining power of buyers, the threat of potential substitutes, the bargaining power of suppliers, and degree of rivalry between existing competitors (Porter, 1985). A number of academicians have applied Porter’s model in higher education planning, such as Dobni and Dobni (1996) who have applied the model to Canadian university-based business schools. This has enabled Dobni and Dobni (1996) to reveal the existence of a gap between the student’s expectations of education services and what is really being provided to them. The five forces of porter’s model as relevant to higher education institution can be defined as follows:

First Force: the threat of new entrants, where new or existing corporations offer products or services similar that what already exists in the market. For instance, education institutions feel the threat of competition with community colleges that offer a four-year degree which is already provided by universities. According to Martinez and Wolverton (2009), several factors define the potential for a new competitor to enter into the education marketplace such as:

Economies of Scale: this concept can be applied to a whole campus or single classroom. For instance, in the case where a certain a college offers an entry-level physics course in a lecture hall with 100 seats but only 50 are occupied, then there is the cost of enrolling the remaining number of students. This can be argued to be efficient but ineffective, so there is a need to have balance between what is efficient and effective Martinez and Wolverton, 2009).

Capital Requirements: deals with the financial investments made in the process of production / delivery of a product or service. For instance, traditional higher education institutions invest millions of dollars in classroom buildings, laboratories, student centers, libraries, technological support systems, etc…This makes it difficult for new organizations to enter the market of traditional higher education (Martinez and Wolverton, 2009). However, a number of universities, such as Capella University and Walden University, have managed to cut capital costs through offering degree programs over the Internet with the same quality and professionalism.

Competitor reaction: reflects the case where barriers are created for any new entrants into the higher education market, such as when comprehensive universities suggest offering certain doctoral programs.

Level of buyer resistance: this occurs when new market entrants face buyer’s resistance regarding new product or service. For instance, Middlesex University Dubai might face two forms of buyer resistance: (1) students seeking a master’s degree are concerned whether employers consider such a degree from Middlesex University as equivalent to that of a traditional university; (2) students looking for a master’s degree that will allow them to continue for a PHD program might be skeptical whether the master’s degree from Middlesex University Dubai is going to be perceived in positive manner by faculty of traditional doctoral programs.

Second Force: the intensity of rivalry among existing institutions in the higher education sector is quite obvious in competing for students, faculty, funds for research and other contributions by donors and state (Lerner 1999). Moreover, some non-profit education institutions have diverted to internet based strategies in order to attract new students. This marketing strategy is charged for the generated number of hits, whose cost is more increasing overtime (Blumenstyk, 2006). Two factors have a direct impact on this force:

Profile of existing players whereby the number of type of institutions in any education market define the profile of existing players, i.e. define the competitive actions for every party (Martinez and Wolverton, 2009).

Influence of industry context on industry growth which determines the variables that play a major role in defining the context of operations of higher education. These variables are related to what is known as (PESTEL) analysis, which identifies the political, economic, social, technological, environmental, and legal connections to the education market. For instance, most often political and economic variables determine the amount of funding for the education sector; hence, any strategy should take into consideration the effect of the economic climate (Martinez and Wolverton, 2009) and consider exit strategies especially after global economic crisis of 2009 (Wurzburg, 2009). Also, another important factor deals with demographics that shape the social force, where demographic growth is considered to be as an opportunity to increase the institutions market share of attracting more students (Martinez and Wolverton, 2009; Lerner, 1999). Moreover, investments in technological innovations for teaching and academic research continue to improve the competitive position of higher education institutions (“The future of higher education,” 2008; Goodyear, 1998).

Third Force: The threat of substitutes. In higher education, what distinguishes between a substitute offering and a duplicate one is the means of delivering that education course, whereby substitute programs continue to penetrate the market due to the low investment requirements or failure to capitalize on economies of scale (Martinez and Wolverton, 2009). Martinez and Wolverton (2009) emphasize on the fact that traditional education institutions should take into account the emergence of training companies or centers although such centers do not stand as direct competitors but at least as potential substitutes.

Fourth Force: Bargaining power of buyers. For higher education institutions, main buyers of their education services are students and their parents (Martinez and Wolverton, 2009). Furthermore, higher education analyzes the bargaining power of buyers through two parameters: information and choices. Information about universities is provided through reports published by accrediting agencies, state governments, and other renowned third parties like U.S. News & World Report, in addition to the fact that institutions publish periodic information about their services. Students usually take such information into account and hence higher education institutions “base their strategic efforts on enhancing their standing in the popular journal rankings” (Martinez and Wolverton, 2009). The second parameter is choice which is to a great extent dependant on the profile of the institution itself. According to Porter (1980), as the number of choice increases, so does the bargaining power of customers. Nowadays, students have a big pool of institutions from which to choose for higher education studies which increasing the level of their bargaining power.

Fifth Force: Bargaining power of suppliers. Martinez and Wolverton (2009) argue that competition among institutions is often linked to the power of suppliers. The main suppliers of education services in colleges and universities are faculty; hence, the more specialized and highly educated the faculty members are, the more is the bargaining power of suppliers to compete in education marketplace (Lerner, 1999).

Many universities have found those models useful due to their adaptability and flexibility.

Strategy Formulation: the next stage of the strategic plan process is to undergo strategy formulation. The information obtained from the environmental scan is to be utilized in order to produce a clear set of recommendations for making the institution more successful (Mitchell, 2003; Bradford et al., 2000). According to Mitchell (2003), this includes modifying the current objectives and strategies in order to create persistent competitive advantages.

Strategy Implementation: the next phase is to implement the strategy, which can be achieved through a set of programs (Figure 2). According to Bradborf et al. (2000), implementation also involves the organization’s resources and motivation of employees in order to accomplish the predefined strategic objectives.

Figure 2: Strategy Plan Components (Evans, 2009)

A successful strategy depends on the way it is being implemented (Bradford et al., 2000; Lerner 1999). Moreover, communication of the strategy plan should be clear and simple since in most cases, mainly in large organization, the people who formulate the strategy differ from those implementing it; therefore, to avoid any ambiguity or confusion, the strategy should be communicated to all concerned parties emphasizing on the importance and essence of having the strategy as a means of measuring the performance of the organization (Bradford et al., 2000). As shown in figure 2, a strategy plan is composed of several components at different levels. At the top of the pyramid there is the mission and vision, and then come goals, objectives, initiatives, measures and targets that are developed in order to achieve the organization’s mission and vision. Goals stand for long term periods and relate directly to the mission, whereas objectives are for short term periods and have an indirect connection to the mission of the organization (Evans, 2009). Education institutions should focus on achieving the strategic goals in order to assure reaching the desired outcome supporting the existence of the institution, i.e. the mission. Also, institutions primarily are ought to achieve strategic objectives as they describe short term periods and consequently affect the accomplishment of goals on the long run. Moreover, in order to achieve an objective, a set of initiatives is linked to every objective. Every initiative is more like a program consisting of a set of action steps that contribute to the achievement of the initiative itself. Every component in the strategic planning process has a person responsible assigned towards achieving its preset target (Evans, 2009; Lerner 1999). This will aid in measuring the performance of the individuals, departments, and institutions. Hence, for a higher education institution to be successful in the implementation of its strategy plan, a clear communication of the plan should be made and responsibilities should be assigned to the involved personnel with clear action steps that once accomplished will yield towards the achievement of the goals of the strategy plan and make the institution in a proactive state to encounter any challenges that might rise (Lerner, 1999; Martinez and Wolverton, 2000).

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Evaluation & Control: the final stage of the process model deals with monitoring the current strategic plan in order to introduce any refinements and adjustments that might be needed (Bradford et al., 2000). The evaluation of objectives, initiatives, action plans, and programs has to be carried out periodically in order to assess the success of the strategic plan (Lerner, 1999). This periodic evaluation will put more control on the measuring the effect of specific action plans for achieving the stated goals and objectives towards accomplishing the institution’s vision and mission (Rowley, Lujan, & Dolence, 1997). Nowadays, with the technological advancements, higher education institutions can install a software tool in place for automating their strategy plan and monitoring the performance of individuals and departments periodically (Evans, 2009). This automation process will create more transparency as the strategy plan will be communicated to all concerned parties and can be accessed by all related personnel responsible for completing their assigned tasks, which make people more involved in the strategy plan of the institution and realize that the success of the education institution depends on their success. Higher education institutions should always measure their current performance against previously defined targets and expectations in order to be able to face any emerging trends and changes that may have an influence on the desired outcomes (Lerner, 1999).

Marketing of Higher Education: Success Factors and Limitations

In the recent years, the higher education sector has been impacted by many changes that has influenced its policy, structure, governance and status (Nicolescu, 2009), in addition to the great advancements brought by technology (“The future of higher education”, 2008). All of these changes play a major role in shaping the future of higher education and transforming it more into a global trade (Fadzil and Munira, 2008), where according to Nicolescu (2009) and Mazzarol (1998) marketing concepts and approaches are also applicable to higher education sector; hence, considering higher education as a marketable service like many other “professional services” (Morgan, 1991).

Applying marketing concepts to the higher education sector ascends from the need to satisfy the increasing social demand for higher education (Martin, 2008; Lerner, 1999). Moreover, nowadays education institutions are seeking for more effective means through the adoption of more market-oriented forms of operations in order to survive in a rapidly evolving competitive market (Nicolescu, 2009; Fadzil and Munira, 2008). It has been widely accepted that marketing concepts are applied to business sector for promoting products and service (Kotler, 1991); however, due to the rapid changes and technological innovations, higher education has been internationalized (Knight and Altbach, 2006) and transformed into a global trade and is no different than any other business services provided. According to Kotler (1991) there exist five concepts for an organization to conduct its marketing activity: the product concept, the production concept, the selling concept, the marketing concept, and the societal marketing concept. Nicolescu (2009) indicates that the higher education institutions will be mainly interested in the last two concepts in order to accomplish the institution’s strategic goals where Kotler (1991) emphasizes on the fact that “The marketing concept holds that the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfaction more effectively and efficiently than competitors”. The marketing approach emphasizes on the customer’s needs and wants and finding out means in order to satisfy those needs and wants; therefore, other concepts should be taken into consideration such as:

market segmentation: used to identify different target markets in order to specify which consumers to address with the products and/or services;

consumer behavior: identifies the consumers need and want, and the process of their buying decisional process.

positioning strategy: a strategy developed after segmentation of the market in order to differentiate the organization among competitors. A higher education institution should develop a strategy that gives it a competitive edge over other universities and enhances its position in the market through getting an advanced academic rank among world-class universities.

marketing mix activities: the information gathered in previous steps will be used in producing products and services to satisfy the needs and wants of consumers, which according to Hemsle et al. (2006) will be later marketed using the basic activities of the marketing mix:

product policy: envisions the delivery of products and services with respect to consumers expectations. In the case of higher education sector, this refers to the services offered such as teaching and research;

pricing policy: it deals with setting the prices for the educational services as well as it describes the exchange of ownership of the product or service, whereby in consumers’ perspective pricing reflects the value of perceived quality of the product/service in return to the paid price. It deals with setting the prices for educational services;

distribution policy: refers to the means utilized by organizations in order to deliver available product/service to consumers. However, with respect to the higher education sector, this concept is not applicable at all;

promotion policy: deals with the ways of communication (such as advertising, personal selling, public relations) between the organization and the targeted markets. In higher education sector, it involves disseminating information about the higher education institution and its services in order to attract more students.

These marketing concepts applied in the business world has also been found useful and applicable in the higher education sector, where it is being applied by many universities in order to gain a competitive advantage (Hemsley et al., 2006). Education institutions are making use of the marketing ideas due to the fact that education in most countries is considered as a non-profit sector unlike the business sector, and besides the fact that higher education is a service itself; thus, all marketing concepts applied to the marketing of services apply to higher education as well (Nicolescu, 2009). In higher education sector, the targeted markets include students, employers, and society who are considered to be the main stakeholders of the higher education services (Maringe, 2006). Students are considered to be the principal customers of such services, whereas, employers are treated as secondary consumers (Stensaker and D’Andrea, 2007; Hemsley et al., 2006). The layer of stakeholders of the higher education sector can also be expanded to include the parents, the government, and other funding bodies (Chapleo, 2004; Kantanen, 2007). However, Nicolescu (2009) indicates that each of these stakeholders has its set of needs and wants which “do not totally coincide” and has to be satisfied, which complicates the marketing activities. Consequently, one of the limitations that education institutions confront while adopting marketing approaches is the difficulty of applying marketing segmentation and targeting to all stakeholders. Nevertheless, focus should be on the primary consumers of education services, i.e. the students (Nicolescu, 2009).

One of the main characteristics of determining the consumer behavior in higher education deals with studying student expectations, which are seen as an important source of information (Sander et al., 2000). Moreover, due to the technological innovations (“The future of higher education”, 2008), applicants to higher education are more informed which yields in making “rational choices of higher education courses and institutions” as stated by Baldwin and James (2000). Hence, it is essential to measure the extent of satisfaction of having students’ expectations meet with the perceptions of the actual performance (Nicolescu, 2009). Nonetheless, Temple and Shattock (2007) identify another limitation in applying marketing to higher education sector as compared to the business sector, which deals with the fact the most students are considered as one-time consumers.

Key Success Factors

An education institution should devise positioning strategies (Lerner, 1999) to differentiate itself from other competitors. In the higher education sector, the key success factors for achieving international success and acquiring an adequate world-class position often involve the following aspects (Nicolescu, 2009; Fadzil and Munira, 2008; Mazzarol, 1998):

Institutional Image & Reputation: a higher education institution should be able to communicate its mission to its clients, mainly the students, in order to create a suitable image that reaches their hearts and minds (Hemsley et al., 2006). Such an image will reflect the unique identity of the institution in delivering education services in a distinctive way (Nicolescu, 2009). Niclescu (2009) states that higher education institutions are widely using the branding marketing concept:

For higher education institutions, it is more common to define concepts such as an image and reputation rather than defining it in the form of a brand. Reputation is usually something that is built through time (Chapleo et al., 2007), while an image reflects the immediate “set of meanings associated with a particular institution” (Kantanen, 2007). Thus, reputation would seem more appropriate for higher education sector rather than the branding concept.

Nicloescu (2009) stresses on the fact that branding for higher education institutions seems to be a complicated task due to the existence of multiple stakeholders; however, Huisman (2007) states that this is recommended by some since it shows universities from different perspectives with multiple images simultaneously.

Quality of higher education services: it is a critical indicator of customer satisfaction. As it has been mentioned previously, education sector has multiple stakeholders each with its own needs to be fulfilled; however, the direct involved parties in ensuring and evaluating the quality of education services are the students and the teachers (Temple and Shattock, 2007). Furthermore, students’ satisfaction is linked to the way they receive the education services and whether it meets their expectations. Thus, the expertise of the staff is a critical factor in ensuring the quality of education services where students often select a course based on the professor’s reputation (Hughes, 1988).

Building global strategic alliances or coalitions: Porter and Fuller (1986) stress on the significance of building strategic partnerships, alliances, or coalitions for higher education institutions in the international markets. Mazzarol (1998) states that this will enable education institutions to gain benefits economies of scale, reduction of risk, different types of access (to distribution channels, capital, local knowledge etc…), in addition to for better chances of competition at a global scale. Therefore, many universities have engaged in cross-border education that involves different aspects of collaboration and selecting the most appropriate partners (Fadzil and Munira, 2008).

Possession of offshore teaching programs, and recruiting offices: the technological advancements have a great impact on the higher education sector (“The future of higher education”, 2008) where it facilitated transferring education expertise across the globe in a more easy way.

Innovation: one of the objectives set in a strategy plan is to increase employee empowerment where they are encouraged to be more creative and use innovation in order to develop a competitive advantage (Quinn, 1985; Lerner, 1999). Goodyear (1998) argues that in order to achieve sustainable innovation, universities are to increase investments in the information and communication technologies (ICT) infrastructure for building a better student learning environment.

Effective use of information technology: Goodyear (1998) has studied the education sector in the UK for the last 30-40 years and found out that there was a revolution in the way education is being delivered to students nowadays. This is due to the technological innovations that have a significant influence on teaching methodologies (“The future of higher education”, 2008). Moreover, commitment to advanced technologies will aid in attracting more strategic partners and alliances.

Financial resources:

Ability to offer a broad range of courses / programs: it is essential for educational institutions to offer a wide range of courses and programs in response to the increasing demand for higher education (Fadzil & Munira, 2008; Martin, 2007; Lerner, 1999). Moreover, in order to be more competitive in the market


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