PROJECT REPORT ON

MARKETING OF SERVICES IN EDUCATION SECTOR

SUBMITTED BY:

Shweta Kumari, Sonia Charak, Tarun Chauhan, Srishti Suneja, Yukti Bhatia

MBA (GENERAL) 4th SEMESTER

SUBMITTED TO: Dr. Mani Shrestha

AMITY BUSINESS SCHOOL

AMITY UNIVERSITY

HARYANA

Education Service Sector and its structure

Education is the learning of knowledge, information and skills during the life. It lightens

our society from small villages to the developed city also. Education in India takes major

changes. As the time passes we had KASHI, TAKSHSHILA, and NALANDA one of the

most famous education institutes in the ancient world.

Today the model of education has changed from knowledge based to carrier based.

People study to secure carrier and not to get adequate knowledge. Knowledge is the

confident understanding of a subject with the ability to use it for a specific purpose while

the education is the approach to acquire the knowledge.

The growth in the personal disposable income of the Indians, growing contribution of the

services sector to India’s GDP thereby requiring greater number of qualified youths and

the increasing thrust of the Government of India to improve the country’s educational

system and eventually the literacy rates has resulted in manifold growth of the Indian

Educational sector since the last decade. India Ratings expects the Indian education

sector’s market size to increase to Rs 602,410 crore ($109.84 billion) by FY15 due to

the expected strong demand for quality education. Indian education sector’s market size

in FY12 is estimated to be Rs 341,180 crore.

The sector grew at a compounded annual growth rate of 16.5% during FY05-FY12. The

higher education (HE) segment was at 34.04% ($17.02billion) of the total size in FY10

and grew by a CAGR of 18.13% during FY04-FY10.

In today’s global environment, an accessible and high quality higher education system

is imperative for a nation’s economic progress. A sound higher education system

supports and enhances the process of economic and social development for a better

future.

Education sector – Structure

Today education system in India can be divided into many stages.

Pre- Primary - It consists of children of 3-5 years of age studying in nursery,

lower kindergarten and upper kindergarten. At this stage student is given

knowledge about school life and is taught to read and write some basic words.

Primary - It includes the age group of children of 6-11 years studying in classes

from first to fifth.

Middle - It consists of children studying in classes from sixth to eighth.

Secondary - it includes students studying in classes ninth and tenth.

Higher Secondary - Includes students studying in eleventh and twelfth classes.

Undergraduate - Here, a student goes through higher education, which is

completed in college. This course may vary according to the subject pursued by

the student. For medical student this stage is of four and a half years plus one

year of compulsory internship, while a simple graduate degree can be attained in

three years.

Postgraduate - After completing graduation a student may opt for post -

graduation to further add to his qualifications.

There are three principal levels of qualification within the higher education system in

India:

I. Graduation level

II. Post-graduation level

III. Doctoral degree.

Drivers of Educational Sector Growth

Higher education is the second largest opportunity in the Indian education sector. There

has been phenomenal growth of higher education in India since Independence. There

were only 20 universities and 500 colleges at the time of independence. These numbers

have increased by 26 times in the case of Universities and 66 times in the case of

colleges. Some of the other factors acting as growth drivers to the Higher education

sector are:-

Demographic advantage-

More than 50 per cent of the Indian population is under the age of 25, this leads

to increased demand for quality higher education and a skilled workforce.

Increasing affordability-

High income households (more than $10,500) are expected to increase from

5mn to 14mn by 2018 resulting in higher affordability. This will propel awareness

towards education as a priority and an essential tool for career growth.

Knowledge led economy-

The share of services in India has increased from 31 per cent in 1991 to 55 per

cent in 2010. This increase in the services sector has led to a steady increase in

the demand for an educated skilled workforce.

Women participation-

Young working population with a median age of 25 years, nuclear families, along

with emerging job opportunities in the services sector driven economy, have led

to an increase in the number of working women in India. The population of

working women is estimated to be more than 25 per cent by 2015.

Employment avenues-

Globalization has led to the increase in newer employment avenues. Industries

such as outsourcing, legal, retail, aviation, and so on, have increased

employment opportunities, and the demand for highly skilled manpower.

Nature of Education Services

1. Intangibility-

Education like most ‘pure’ services is an intangible dominant service, impossible

to touch, see or feel. Evaluation of this service however can be obtained by

judging service content (curricula, course material, student workload, constituent

faculty) and the service delivery system. The consumer, based on these

evaluations, has a number of alternative choices before him and may make

selection on the basis of his own evaluation referrals, opinions sought from

others and of course a brand or corporate image of the organization providing

education. At the end of the service experience, the consumer gets something

tangible to show for his efforts i.e. a certificate or a grade card denoting his level

of proficiency at the given course/programme.

Education cannot be seen or touched and is often difficult to evaluate.

Precise standardization is difficult.

Education as a service cannot be patented.

2. Perishability-

Services are perishable and cannot be stored. To an extent, education displays

this characteristic which results in certain features.

Production and consumption are simultaneous activities: This is true of

most conventional teaching institutions where face to face teaching

necessitates simultaneous production and consumption. Open and distance

learning systems which make substantial use of technology, however, have

made it possible for production and consumption of the service to be carried

out at different times-the use of audio-video units and preparation of course

materials sent to the students across the consumer population, are designed

to meet the challenge posed by the perishability character of services.

No inventories can be build up: This is true of most services, as well as

education, as an unutilized service like a course on offer, or a lecture

scheduled to be delivered, cannot be stored, if there are no students enrolling

for the course or to attend the lecture. This factor opens up the challenge of

managing the service in the face of fluctuating demand. Nearly all universities

at one time or the other have faced the problem of overstaffing, when certain

disciplines went out of vogue, like pure sciences and post graduate courses in

languages. The marketing implications of perishability necessitate that a

better match between supply and demand for educational packages would

need to be made. Course design and course offers need to be preceded by a

need analysis of the target population before the decision to launch them is

made. This points towards the use of marketing research techniques for

service development (designing the course concept) and planning, but more

than that it necessitates a shift from ‘institution orientation’ to a student or

‘customer orientation’. Courses need not be offered because the institutions

have available expertise in an area or it is something that the institution has

been traditionally doing. In consonance with the marketing concept, the

capability of finding a better fit between the needs of the society and the

design of the offering, would define the difference between an effective and a

non-effective institution.

3. Inseparability-

Services are also characterized by the factor of inseparability in the sense that it

is usually impossible to separate a service from the person of the provider. In the

context of education, this translates into the need for the presence of the

performer (the instructor) when the service is to be performed and consumed.

This necessarily limits the scale of operations to the number of instructors

available, it also means that the distribution mode is more often than not direct in

the sense that no intermediaries are involved; the transfer of knowledge is

directly from the provider to the learner. As noted before, open learning systems

have overcome the characteristic of inseparability by incorporating the teacher

into the material and bringing about a separation between the producer and the

service. A direct marketing implication of this inseparability is the need for

obtaining/training more service providers as well as the need for more effective

scheduling of operations.

4. Heterogeneity

Heterogeneity in the context of services means that unlike product manufacturing

situations where design specifications can be minutely standardized and

followed, the standards of services, educational services included, would depend

upon who provides the service and how. This heterogenity of performance

renders service offers for the same basic “service product” from different

institutes vastly different from each other. Even though standardization of

courses according to some prescribed norms may be attained, it is difficult to

‘standardize’ individual performance i.e. that of the faculty resource person. That,

perhaps, is not even a desirable goal in education, but maintenance of a certain

quality standard across ‘performers’ certainly is. In the absence of accepted

quality standardization mechanisms in this context, it is the market forces alone,

which would force quality standards on education. Dwindling registrations in

institutions, snatching away of “market shares” by more effective competitors is

what is making institutions take a renewed look at quality of service delivery and

mechanisms for maintenance of standards. In terms of marketing implications,

the hetrogenity characteristic of educational services necessitates careful

personnel selection and planning, constant and careful monitoring of standards

which can provide cues to the prospective customers to aid choice of institutions.

Examples of these cues could be success rates of the placement programme,

the absorption of the institutions product in the job market, or the performance of

the pass-outs at other competitive examinations.

5. Ownership-

Ownership or the lack of it also characterizes service. In the context of education,

the customer only buys access to education, or derives the learning benefit from

the services provided. There is no transfer of the ownership of tangibles and

intangibles which have gone into creation of the service product. Payment of fees

(price for the service) is just the consideration for access to knowledge and for

the use of facilities for a given tenure.

Flower of services in education Industry

Flower of services refer to a well-formed package of total services with all the

supplementary services being well formulated along with the core services. The various

petals of the flower are:-

Information

A marketer needs to provide adequate information to his employess and his

customers. This information is general information provided through various

communication channels.

In education industry information is provided with the help of:

Marketing agents

Seminars

Web sites

Print media

Radio

Television

Events

Consultancy

This is additional customized information provided to the potential customers by

the service provider. In the education sector it is provided by institute’s

consultants.

Order taking

Order taking should be done without mistakes. In education sector it is related

with taking admissions and the further process. It is generally done through its

website or through the staff.

Hospitality

Hospitality is a very pretty petal, reflecting pleasure at meeting new customers

and greeting old ones when they return. Hospitality finds its full expression in

face to face encounters with the students and parents during admission process.

Safe keeping

It is the process and procedures used by marketers to safe guard and to maintain

secrecy. In institutes the data of the students is very important. The data should

be stored properly and should be available to the staff only. Example – in Amity

University all data of the students are stored on Amizone (Amity intranet).

Exceptional

Exceptional service means services over and above customer’s expectations. It

is related with campus facilities, student accommodation, infrastructure etc.

Payment

In education sector, payment of fees is normally done through demand drafts and

cheques.

The Service marketing Challenges and implications for marketers in

Education sector

Third-Party Accountability-

Universities must maintain credibility with parents, donors, alumni, employers

and other stake holders

Client Uncertainty-

It’s documented that consumers of big-ticket items can feel buyer’s remorse, so

most salespeople follow up shortly after the sale to ensure customers are

comfortable with their decision and to counteract any extreme fears. After a

student makes the major decision about which college to attend, key units within

the university, such as student development, the business office and the

academic department, must maintain contact to reinforce that the student’s

decision was wise and valid. Little or no contact between the time of acceptance

and reporting for class can result in a student changing his or her mind.

Experience is Essential-

The university’s “brand” is based on quality, which often translates into faculty

with vast teaching experience. However, especially in business-related

disciplines, this must also translate into real-world experiences. Marketers must

be able to accurately convey this balance.

Limited Distinctiveness-

Although universities know they must find the unique attributes that make their

institution distinctive, claims for universities within the same category, such as

faith-based liberal arts colleges, may sound very similar: “academic rigor,

personal attention, and the teaching of values and ethics.”

Maintaining Quality Control-

All service industries experience variability in quality control because the humans

delivering the service can be inconsistent transaction to transaction and person

to person. Quality at a university depends not only on behavior and competence

of all faculty and staff it depends on the behavior of the students who become

alumni – a key indicator of reputation.

Making Doers Into Sellers-

Faculty can be highly effective in the recruiting process but may be resistant to

this role that seems outside their area of responsibility.

Allocating Faculty and Staff Time to Marketing-

Even if faculties are resistant the university will benefit from a culture shift toward

involving everyone in marketing efforts to the extent that this expectation is made

explicit in job descriptions.

Reorienting the Reactive to the Proactive-

“The orientation of most institutions of higher education is naturally reactive

rather than proactive. In most colleges and universities, marketers are tasked

with marketing the institution as it is. This is who we are and what we offer,

administrators tell the marketers. Promote it.”

Conflicting Views on Advertising-

Traditionally, some in higher education equate marketing with advertising and

feel that at the worst, advertising cheapens the university image and puts it on

par with for-profit educational institutions. At the best, it wastes scares

institutional resources that could be channeled toward academic programs.

Others believe it is a valuable tool for educating potential students and donors

about the university’s benefits.

A Limited Marketing Knowledge Base-

Every faculty and staff member must have a basic grasp of marketing principles

to achieve the levels of service required to effectively market the university.

Marketers in general do not have solid base of knowledge regarding the

marketing of services and that higher education is even more specialized.

Marketers who come from an environment of marketing goods must become

familiar with the politics and stakeholder groups in an academic setting. Likewise,

faculty and staff who have had no exposure to marketing concepts need basic

training.

Service mix of educational services

Product-

In case of educational services, the product means the students and the services

means the intangible offers (like the course itself, the services rendered by the faculty

etc.) made by the educational institutions. Here, services make the product of an

institute. Through the products and services the educational institutions promotes their

organization and develop the brand value in the competitive market.

Price-

The price is the amount a student pays for the services availed by him or her. It is

determined by a number of factors including competition, service quality, placement,

reputation of the institution, private or public ownership, infrastructure, facilities

provided, location of the institute, mode of education, brand name of the educational

institution etc. Here, price reflects the quality of services provided to the students.

Hence, it can be used as marketing tool by the institutions.

Place-

Place represents the location where an educational institute is established. It is often

referred to as the service Center. If the institute is located at a Metro city, it will provide

much more competitive edge, than if it is located in rural place. So, place is also a vital

promotional tool for them.

Promotion-

Promotion represents all of the communications that a service provider uses in the

marketplace. Promotion has a few distinct elements such as advertising, public

relations, word of mouth, point of sale, publicity, direct & web marketing, etc.

Educational institute emphasizes mainly on two components of promotion viz.

advertising and web-based marketing, rather than all. As far as promotion tool is

concerned, positive word-of-mouth communication has been found the best tool for

them.

People-

Here, the people mean teaching fraternity and non-teaching community directly and

indirectly associated with the services rendered to the students. Satisfaction and

retention of the students solely depends on the way the teachers are in a position to

deliver their best services to them. Teachers are not treated as ‘guru’, rather they are

known as facilitators / services providers. Growth and existence of an educational

institute, particularly the professional educational organization depends on the

competency, effectiveness, efficiency, sincerity, dedication and devotion of the teaching

community of the institute. People proved as the most vibrant component of educational

services marketing mix.

Process-

The procedures, mechanisms and flow of activities which lead to an exchange of value

are called the process. The way service providers render services to the students, plays

a pivotal role in gaining the competitive advantages. If the service process is hassle

free, simple, understandable, student friendly and technology based, it will definitely

make the institution with difference. Examples might include the way a student is treated

by a staff member and rendered service by a teacher, or the length of time a student

has to wait to get services from them.

Physical Evidence-

It is the direct sensory experience of a service that allows a student to measure whether

he or she has received adequate facilities by the educational institution. Examples might

include the physical environment in which service is delivered, the physical facilities

provided and the infrastructure created by the organization for them. It might include

state-of-art technology, building, total ambience, parking facility, playground,

gymnasium, swimming pool, indoor stadium, transportation facility, hostel, AC class

room facility, computer laboratory, canteen, library, number of books and journals,

different modern teaching aid etc. All of these play a crucial role in marketing of

educational institute.

Student’s expectations for educational service

Students (and parents) expectations are now high and these include:

Flexibility and choice in the delivery of education.

Access to cutting edge technology.

A two way communication process between them and with the university.

To be consulted about the learning experience.

Accurate information about their courses, assessment procedures, complaints

process, etc.

Honesty with respect to whether their needs can be met or not.

Quality and professionalism in the provision of services.

Access to suitably qualified teachers and appropriate learning support.

Value of study to career prospects.

Gap in Education sector

Gap 1: Educational institutions do not know the expectations of the students.

Gap 2: Institutions are not having the desired service designs and standards to meet

the requirements of the students.

Gap 3: Educational institutions are not delivering service standards as required to

deliver.

Gap 4: They are not matching performance they are supposed to show and promises

communicated to the students.

Gap 5: There are lot of differences between expectations of the students and their

perceptions, which is known as Customer Gap.

Approaches to minimize gaps

Once gaps are identified, the educational institute should take some corrective

measures to minimize those gaps. First, they should realize the expectations of the

students and try to meet the same accordingly, if meet, customized services are to be

rendered. Secondly, the institute should design the services which are market and

student oriented. Thirdly, service quality and appropriate delivery process need to

maintain properly. Fourthly, institute ought to keep the promises communicated by

them. Fifthly, they must not allow creating any expectation and perception gap in the

mind of their students. Marketing strategy should be adopted which are exclusive for

student / customer satisfaction. The Consumer-Centric Business approach should be

the appropriate path for them.

For the professional educational institutes suitable placement for students after

completion of the course should be the first and foremost consideration. Later on,

placement can be used as a marketing tool for the institution. Whenever loopholes are

identified, institute should act very quickly to resolve it. Student Relationship

Management (SRM) must be maintained systematically for the long run benefit of the

institution. Alumni are the most important stakeholder and the greatest contributor for

the organization. Fair treatment to all the present and former students is very necessary

because of the fact that they act like non-paid brand ambassadors of the institute.

Honest student appraisal can make an institute with difference. During appraisal

process, halo effect, leniency effect, stringent effect, regency effect, primacy effect,

central tendency effect, stereotyping, etc. ought to be avoided. During service delivery

time quality and customization should be the ‘mantra’ to the service provider. Market

driven services must be offered to the students. Service providers ought to welcome

and encourage feedback from the students to dissolve all the grievances among them.

Service blueprint of Education Sector

MARKETING STRATEGY AND EDUCATION

Some directions for marketing strategy for education may, however, be drawn keeping

in mind the special characteristics of education as an intangible dominant, people

based, high contact consumer service. These are outlined below.

1. The dominantly intangible nature of education service may make the consumer’s

choice of competitive offers more difficult.

2. In case of delivery systems where the performance of the service demands the

presence of the instructor, marketing of education would need to be localized and

offer the consumer a more restricted choice. Of course, as institutions build up

their “pull” in the market, consumers are willing to relocate themselves to avail of

the service.

3. Perishability may prevent storage of the service product and may add risk and

uncertainty to the marketing of education, especially in the event of fluctuating

demand for courses/instructors/disciplines.

It is also important to develop an understanding of the criteria prospective students

apply when they choose between competing institutions. A study in the Indian

context, for management education, reveals that some of the criteria used by

students to choose between institutions were:

Reputation of the institution,

Number of applicants keen to enroll in the course,

Past success rate of placement,

Faculty expertise,

Width of specialization offered,

Infrastructural facilities, and

Fees.

Identification of criteria used to differentiate between competing offers may lead

institutions to lay emphasis on developing competing strengths and creating perceived

differences between their offers and the competitor’s offer.

Pricing of the Education Service

Pricing decisions for the service offer are of a major importance and should ideally be

related to achievement of marketing and organizational goals. Pricing of the educational

offer however, typically represented as ‘tuition fees’, is subject to certain constraints and

characteristics.

Most educational institutions, in fact all public institutions like the Universities, institutes

of technology, medical and engineering colleges, come under the category of services

where price are subject to public regulation. In all such cases the price element is not

controllable by the marketer, instead it becomes a subject matter of public policy, where

political, environmental and social considerations take priority over purely economic

considerations. Prices may be based on the ability to pay (fee structure relating to

parents’ income in case of Universities) or some socially desirable goals (total fee

exemption for women candidates in states like Rajasthan and Gujarat). Autonomous

institutions also subject themselves to formal self-regulation of price for example, the

institutions like AICWA, and ICWAI are subject to institutional regulations relating to fee

structures which they decide for themselves. On the other hand private institutions,

typically in specialized fields like medicine, engineering, computers and management

tend to price their services on what the market would bear. As most of these institutions

operate in subject fields where demand far exceeds supply, prices charged depend

upon economic condition, consumer feelings about prices, buyer need urgency,

competition in the market place, level of demand etc.

Heterogeneity of services and different pricing considerations used by different types of

institutions make price a less important determinant of consumer choice in educational

services. The more the services are homogenous (undergraduate, graduate courses in

the basic disciplines) the more competitive would tend to be the pricing. Another

generalization that can be drawn from product marketing is that the more unique the

education service offer, the greater would be the ability of the providers to vary prices

according to the buying capacity of the consumer population.

Differential pricing, based on the consumer’s willingness to pay may also be utilized for

the education service. The practice of charging different fees for the sponsored

candidates and the non-sponsored ones is common in professional courses, so is the

practice of charging differential fees from full time and part time evening participants of

the study programme.

SERVICE QUALITY DIMENSIONS

5 dimensions of service quality are:-

Reliability:- It is the ability to perform the promised service dependably and accurately

Example- Like in education sector, universities promise quality education to students, grooming students well and successfully imparting practical knowledge to the students ,but if they are not doing what they promise to do, then they cannot be considered reliable.

Assurance:- It is the knowledge and courtesy of the employees and their ability to convey trust and confidence

Example:- Counselors in universities, they interact with the student and get the student’s background noted and thus help in choosing them the correct field accordingly and convince them by telling the students about how the university will be helpful to them in imparting them with the right skills.

Tangibles:- They are the physical facilities, equipment and appearance of personnel which signifies quality

Example:- In universities tangibles are seminar rooms, laboratories, libraries, lecture rooms which are critical tangibles

Empathy:- It is the caring and individualized attention to the customer

Example:-Like in amity university, each student is enrolled with a mentor who guides the students on regular basis personally as well as professionally

Responsiveness:-It is the willingness to help the customer and provide them with prompt service

Example:- Like in amity hostel, when one lodges a complaint like electric complaints or plumbing complaints, such things are taken care of and there is prompt service to such complaints, so one can say that the hostel staff is responsive to the student’s complaints

TYPES OF CUSTOMER COMPLAINT ACTIONS:-

A dissatisfied customer may choose to complain on the spot to the service provider. Example:- In amity university, when the hostel wi-fi does not work, we complain about it to the IT department directly

Some customers choose not to complain directly to the provider but rather spread negative word of mouth about the company to friends, relatives and coworkers. Example:- like in amity university, when we are assured of 100% placement assistance and when we do not get the same, we are dissatisfied and thus the students as well as parents spread negative word of mouth for the university

TYPES OF COMPLAINERS:-

1. Passives:-They are group of customers who are least likely to take any action. They are unlikely to say anything to the provider, less likely than others to spread negative word of mouth, and unlikely to complain to a third party. They think that the consequences will not merit the time and effort they will expend. Example:- Some students take whatever they are being provided with like in amity hostel mess the quality of food has degraded from before, so whenever there is a hostel mess meeting, such students do not come to the mess to resolve the problem nor do they spread negative word of mouth

2. Voicers:-These customers actively complain to the service provider, but they are less likely to spread negative word of mouth, to switch patronage or to go to the third parties with their complaints. Example:- in amity university, whenever students face any problem regarding conveyance when they are required to appear for job placement interviews, they complain for it to the CRC Department

3. Irates:-These consumers are likely to engage in negative word of mouth to friends and relatives and to switch providers than are others.Example:- Some students may switch to another mentor instead of being with its designated mentor/guide when student feels that the designated mentor is not able to guide him/her properly

4. Activists:-These consumers are characterized by above average propensity to complain on all dimensions: they will complain to the provider, they will tell others and they are more likely than any other group to complain to third parties. Example:- when giving overall feedback about the university, the students or parents may complain to the university itself an tell them about negative points of the university, and are more likely to complain to their friends and relatives and share their bad experiences that they had with the university.

SERVICE GUARANTEES

It is an assurance of the quality of or length of use to be expected from service offered for sale , often with a promise of reimbursement. A good guarantee is unconditional, easy to understand, meaningful, easy to invoke, and easy to collect.

Example:- Amity University gives guarantee of 100% placement assistance .And it gives guarantee of 100% scholarship to students who get 90% and above in Xth and XIIth standard.

IMPACT OF SERVICE FAILURE AND RECOVERY

Service recovery refers to the actions taken by the organization in response to a service failure. Failures occur for all kinds of reasons- the service may be unavailable when promised, it may be delivered late or too slowly, the outcome may be incorrect or poorly executed, or employees may be rude or uncaring. All these types of failures bring about negative feelings and responses from customers.

Left unfixed, they can result in customers leaving, telling other customers about their negative experiences, and even challenging the organization through consumer rights organization or legal channels.

And resolving customer problems effectively has a strong impact on customer satisfaction, loyalty and bottom line performance.

Example:- In few education institutions, like in MBA degree course there is an option for the students either to opt for dual degree or major-minor combination of electives. But at the time of implementation of such, the students are left with no other choice than to choose from the electives that the university offers. This is a service failure on the part of the university.

And such service failure can be recovered by telling the students about such things at the time of counseling, or otherwise proper rules and regulations should be mentioned in the brochure.