Commercialization of Higher Education: An Analysis

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The notion of a market for higher education is recognised as a global phenomenon and its application has encouraged academic debates on the central issues of degree to which higher education ought and can, support the knowledge economy. The marketisation, commercialisation of higher education is contentious. This is dangerous for the country in allowing the marketing concept to change institution’s mission not on educational or even economic grounds but on competitively defined marketing concepts. In first consider¬ing marketing in education we very swiftly articulate general questions such as : “just what makes our school or university different ?”, “who exactly are our customers ?”, and “how can we compete with other providers ?” Marketing in education is nevertheless receiving increasing attention in the educational mana¬gement literature. Educational systems face a wide array of chal¬lenges. including : (i) demographic change, (ii) economic development and liberalisation, (iii) technology, and (iv) all the facets of globalisation. There are in particular a number of forces shaping the direction of higher education toward an appreciation of the student as a ‘customer’ and consequently for higher education marketing. Probably fundamental to this trend has been the inability, or lack of desire, of governments to continue to fund universities without stringent accountability. The first step is for governments to intervene for the benefit of those on low incomes, rather than providers themselves being charged with this role.
1. Features of Services in Higher Education
Goods are first produced, then sold and then consumed, services are first sold, then produced and con¬sumed simultaneously. Marketing evolved through products to service, from buyers to customers and from exchanges to relationships. These ideas have currency now in most academic marketing literature but their application to education and especially higher education is very problematic. Consider the following features:
1. Student admission and retention, widening participation, recruit¬ment of star academics and fund raising through Research grants, endowments ar[d sponsorships all contribute to conceptualisa¬tion of the universities as busi¬nesses with a commercial ethos and mission. This approach has struggled within an ideology of consumerism to retain a distinc¬tive notion of education and has re-categorised higher education into a form that it is appropriate for its marketisation, thus making it more vulnerable to substitutable offerings. ,
2. In the educational context, marketing is necessarily linked to the ideology of the market as a decision making and resource allocating device deigned to be neutral to any claims other than merit. Yet the evidence in all but the most basic commodities is that the market fails to do this and distorts any moral value in the fairness of market distribu¬tion.
3. The bureaucratic, machine-like modern university where it is no longer customary to find teachers and students but rather ‘suppliers’ and ‘consumers’ with all that this system entails, where to be is to be an item of resource, an entity able to be used and marketed. The application of the concept of marketing to educa¬tion has tended to emphasise control of satisfaction and efficiency in the immediacy of the knowable present.
4. The university has now become ‘learning factory’. Commerciali-sation in recent years has embraced the technologies of the discipline and not fully ques¬tioned the direction of its travel. This has led to the operationali¬sation of customer needs as extrinsic and instrumental. The desire to make profits through the amoralism of the free market has encouraged this techne rather than phronesis as the guide to marketers’ judgements. In this marketers are culpable of replac¬ing well-being with a self serving notion of satisfaction.
5. Most private funded institutions of higher education now recog¬nise that it is indeed necessary to ‘market’ to Higher Education themselves. Educational institu¬tions are rapidly identifying themselves, conceptually and in their discourse^ as agents of national and international markets. This is indicative of a general shift from public social policy that construed higher education as a ‘public good’ to a position where social policy is viewed as an extension of self- interested economic policy.
6. Marketers envision higher educa¬tion marketing as advertising and promotion and see their role as promoting higher education as a commodity in an environ¬ment that is one of consumerism. Marketers saw students as thfeir prime target audience for their activities.
7. For centuries, universities were institutions that offered educa¬tion to those who could meet their prescribed entry qualifica¬tions. High student demand and scarcity of supply meant that it was a supply-side market : that is, universities had to do very little by way of advertising and promoting their institutions. This situation was supported, of course, by the fact that university education and secondary educa-
tion was sponsored or provided by the state. It was, in a sense, a monopoly market environment. But with the breakdown of state funded and controlled institu¬tional framework this monopoly and increased availability and variety of education options, the supply-side marketing approach may now appear obsolete. In its place has come a realisation that universities have to tailor their courses and education options to better suit the student-customer. A demand-side approach to university marketing has emer¬ged.
8. The consequence of the demand- side approach is that presentation materials and marketing encoun¬ters are now increasingly focussed on the benefits of university education as perceived by the student. Students are no longer led to feel that the univer¬sity is doing them a favour in accepting them. Quite the reverse, universities now seek out new students by attracting them to* the ‘quality’ of education, the ‘recognition’ and ‘standing’ of the degree programme, the ‘teacher-student ratios’, and the value added extras such as student life, student support services, exchange programmes and security and safety in the university. Above all, of course, universities now find themselves having to defend the employ¬ment potential of their degrees as a primary marketing tool. In short, the student-customer is wanting results and in approach-ing a higher education option asks the fundamental question, ‘what can I get out of it ?’
2. The Essence of Higher Education
Education is a right for all and not one that needs to be traded through the market mechanism. It is a moral obligation to enable indivi¬duals to realize their potentials through their personal freedoms and, in a culture that values the notion of humanity, to be precursor to engag¬ing in informed economic activity. Experts make strong argument for the provision of basic freedom so as to allow, in a democratic environ¬ment, the practices of civil rights and political liberties. Our concern about the invasiveness of the markets and its demands on higher education institutions to be successful through commoditisation, packaging and selling courses as products became acute. An injustice for those excluded from higher education, those enticed through provocative advertising and those promised something that the marketing has to interest in providing educated people.
One should look at the deve-lopment of higher education from the perspective of transformative educa¬tion rather than the market seeking an alternative of a marketing created model of higher education. This is one based on a notion of practical wisdom or phronesis. Gadamer define phronesis as a form of moral knowledge that offers an intentiona- lity to act. The theme of phronesis and its link is established in Aristotle through the common goal of educa¬tion and phronesis as human well¬being.
University produces both private goods (i.e., education, employment) public goods (e.g., research output, a better educated workforce; and social benefits for society). Student may not be fully aware of the externalities or spill-over benefits such as investment in education and in society as a whole, and therefore it has always been thought reasonable that govern¬ment should contribute towards the cost of such societal benefits.
3. Marketing in Higher Edu-cation
Marketization in education refers to the adoption of free market prac¬tices in running colleges and univer¬sities. These include : (i) the business practices of cutting production costs, (ii) abandoning courses and program¬mes not in demand howsoever they are important for the country and the society, (iii) offering more popular programmes and facilities, and (iv) advertising to increase brand image, sales and the profit margins : such business language and culture was unfamiliar in HE decades ago.
The cornerstone of most market¬ing planning had been the 4 Ps and the concept’s expansion as an alliterative device. Consider three ‘pillars’ that can support the notion of relationship marketing in education. These are learners’ ‘existential trust’ in the learning process, learners’ tem¬porality and learners self confidence as a learner and practitioner. When marketing-particularly advertising- has a primary intent to persuade rather than inform. The issue of the marketisation of education began to focus on the nature of education and the moral implications of marketing.
Market is successfully turning the university into a manufacturer of economic value for the student and surplus value to the exploiters. The whole structure of present day higher education rests with the edifice of profit maximisation and fundamen¬tally the system lacks quality of education.
There are eight conditions for a market and all of these conditions tend to facilitate competition between institutions and organisations and place an emphasis on freedom to make decisions. From a providers’ point of view they should have : (i) freedom of entry to the market¬place; (ii) freedom to specify the product; (iii) freedom to use resour¬ces; and (iv) to determine prices. From a consumer point of view :
(i) customers should have freedom to choose a provider and the product;
(ii) have adequate information about the costs and the quality; (iii) should be paying directly, and (iv) prices should cover costs.
4. Conflicts of Marketisation in Higher Education
There is a feeling of discontent with the shifting towards the market philosophy. This is based on the veracity of what might be offered to the students within a transformative model of higher education, with the purpose of increasing the public good, is difficult to configure from the existing marketing models. In the social context the market orientation debate the reduced the level of trust in higher education, polarised the value of the reputation of institutions and damaged the collective percep¬tion of the level of the awards achieved by students.
The main generic disadvantage of the free-market economy is the unequal distribution of wealth. The limitations of the theory of markets are that: (i) higher education ‘confers both collective (public) and indivi-
dual (private) benefits’; (ii) there are difficulties in obtaining and dissemi-nating proper information about quality; and (iii) the amount of ‘product differentiation can be a problem by virtue of the product life cycle’. Further, there lies the potential for producing policy conflict and confusion based on : (i) opposing goals; (ii) opposing motivations; (iii) the problem of price and value; (iv) the notion of excellence;’ whether -government-control increases or decreases; and (v) serious concerns about the social polarisation effects of markets. The goals of education and the market are contradictory in significant respects.
Although markets are seductive because they promote autonomy enabling all participants to make decisions for themselves—markets are also myopic, offering people what they want rather than what society might identify as a need. The market, therefore, masks social bias—it reproduces the inequalities which consumers bring to the market place. The market is, therefore, a crude mechanism for social selection and reinforces the pre-existing social class order of wealth and privileged.
Although non-profit higher education at large has been slow to adopt many practices that are standard in the corporate setting. However, the culture of the Univer¬sity has begun to change. Ultimately the goal always was and always will be to serve the student by making available an education that opens personal and professional doors. Within this framework, the possibil¬ities are limitless. Although efficient at producing some products and services, however, the free market system often fails to produce effective education.
5. Globalisation and Higher Education
The last few decades have seen major changes taking place in univer¬sity sectors across the world. Two of the most important have been the Marketisation and International- lisation of higher education, both of which have been driven by the phenomenon of globalisation. Marketisation has largely been the result of the liberalisation of world economies which have sought to open up and exploit trading oppor-tunities between nations beyond national borders without the tradi¬tional fuss and restrictions imposed by previous state controlled regimes. National institutions including those in higher educations increasingly operated within a free trade and profit motivated environment and government across the world began to reduce spending as individual intuitions had to gradually take over financial responsibility for running their own organisations. Many factors like : (i) choice, (ii) competition, (iii) league tables, (iv) consumerism, (v) private purchase of education services, (vi) customer satisfaction, (vii) loyalty, (viii) value, (ix) supply and (x) demand and customer centeredness dominated the new education discourses as institutions made the transitions from state constrained to freely operating orga¬nisations.
Added to this is the emergence of the Internet and the unlimited possibilities this offers to global learning options. Not only will universities everywhere come to offer online instruction to students on campus, but also off campus. The notion of geo-centric learning, as understood for thousands of years, becomes considerably weaker. In the very near future may be it wil| no longer matter where a person lives or studies. People will perhaps no longer travel to the geographical location of the university in order to gain a degree as lectures, tutorials and assignments are communicated through computer services. So, essen¬tially, education is becoming a border¬less commodity and marketing an international exercise.
The Internet and global commu-nication have specific implications for global marketing and this will be an increasingly important aspect of the evolution of university education and the marketing process.
6. Issues in Higher Educa¬tion Marketing
As education is being redefined, so is business and even government. It would seem that business and commercial prospects are growing in their dominance of social life, yet business itself is having to come to terms with the power of knowledge and communication. The manage¬ment of information and communi¬cations management are going to be fundamental issues for business schools to address in the future. Marketing strategy has a number of distinct components, conventionally referred to as the five Ps : product, place or distribution strategies, pric¬ing, promotion, and people.
Product—The economic and social environment has driven the emergence of an impressive array of educational products (programmes of teaching, research, consultancy and others). Groups of closely related programmes, perhaps offered by the same departments/faculties or offered to the same target audiences, constitute the product lines. The product mix is critical as it will strongly shape the image of the whole institution in the eyes of the consumer and the public at large, the relative balance between teaching, research and other activities in an institution’s product mix is a funda-mental decision. The most funda¬mental question to ask about a particular product is ‘what is its essence or core ?’ i.e., what exactly is the customer seeking ? What precise need is being satisfied ?
Place or Distribution : For
higher education this translates into questions about the location and design of campuses and even the number and distribution of cam¬puses. Programme delivery has to be
considered  where do students
study to complete their programme ? On one or more campuses ? At home ? At work ? All of these ? What resources and materials have to be made available for each of these options ? Developments in IT and communications are powerful tools which can be used to create a wide array of distribution options for educational institutions.
Pricing—This refers to both the explicit and hidden prices the customers has to pay. How are price objectives set and what objectives are selected ? Is maximisation of profit, market size or cost recovery going to shape pricing decisions ? These objectives are not always consistent. The next stage is to select a pricing strategy. Should this be one based mainly on costs, or in demand, or alternatively on what the competition is doing ?
Promotion—Whatever the
quality of a programme, it is of little value if people do not get to hear about it. Communications have to be designed to convey appropriate messages to prospective customers, the tools available to do this have never been more varied, but cost- effectiveness will undoubtedly be a primary concern and makes choice of the medium of communication and of timing an important task. It is appro¬priate to emphasize the enormous opportunities of the Internet in this respect.
People—Trend towards mana-gerialism to more entrepreneurial organisations and to markets, mean that a reconsideration of human resource issues is necessary. In the new organisational environment of higher education a whole new set of skills are now at a premium which were not previously part of the academic curriculum vita. They include, for example entrepreneur¬ship, communications and informa¬tion technology, financial manage¬ment, contracts management, and of course, all aspects of marketing.
The process of change required to cope in the new environment involves far more than simple changes in terminology [e.g., students redefined as customers).
7. The Future of Higher Education Marketing
William Annandale forecasts some trends and techniques that will be centred to HE strategy on the years to come. He predicts high flying marketers joining the sector and has made five predictions for the future of HE marketing. Universities are not the same, but that is not always how it seems to the outside world. Many traditional universities, both redbrick and post-war new universities, make very similar claims, based on teach¬ing and research, and offer very similar courses. Post-1992 universities tend to be oriented more towards the world of work and have a more vocational leaning. The supply side of higher education is, therefore, crowded with groups of broadly similar offerings. A fundamental change in the attitudes and behaviour of students, parents, and schools^
in a much more financial and com-mercial edge than has historically been the case. The five predictions about the future of HE marketing are :
(i) HEIs will become increas-ingly divergent and differentiated : All HEIs need to think clearly about their proposition and how they can differentiate themselves, particularly those that do not currently have a strong rationale. Importantly, this should be addressed from the pers¬pective of target audiences : an outside in rather than inside-out approach.
(ii) Investment will increase significantly-—An increase in invest¬ment in higher education marketing and communications, both regarding staffing and activity, this will become an upsurge in the coming years, as competition for students intensifies.
(iii) Marketing high-fliers will be attracted to HEIs—A number of HEIs will seek to recruit from outside the sector, to access a new and different skill base, take on learnings from other markets and try to move their marketing on to a different level.
(iv) The use of Customer Rela¬tionship Management (CRM) will become widespread—A CRM approach and technology allows HEIs to create and manage relationships with applicants, students and alumni. This is already the practice of some universities.
(v) Measurement of marketing effectiveness and return on invest-ment will become increasingly the norm—Measurements such as ‘value for money’ and ‘effectiveness of individual activities’ being typically mentioned. As investment increases, HEIs will need to focus more atten¬tion on outcomes and how greater effectiveness and efficiency can be achieved, and where resources are best deployed. Effectiveness measure-ment should be one of the first ques¬tions in a marketing plan. Measuring marketing effectiveness and return on marketing investment is notoriously difficult.
Creating a mass education system that retains the notion of prestige and operating a market system that seeks
because of socio-economic factors is a challenge, especially at low cost to the consumer. Conflict is likely to ensure based on notions of fairness and equity. As HE begins to move towards not just McDonaldisation but simultaneous the Louis Vuittonisa- tion. Given that HE is ‘baggage’ that an individual cannot simply replace by walking into a high-street store, the outcome of a free (unregulated) HE market could be long-term social dissatisfaction and mistrust of the social good of HE.
With the increasing focus in education on responding to the demands of those with the ability to pay and increasing stress on the 3E’s of economy, efficiency and effective¬ness, it is perhaps sad that the fourth ‘E’ for equity has gone out of fashion. The changes that are taking place are so immense that they are actually creating a new civilization. While, the agricultural era was replaced by the dominance of industrialisation, so now the world is witnessing the emergence of the information age. The flow and management of information now define the world economy. The flow of money is preceded and controlled by the flow and management of information. “What is happening is nothing short of global revolution. A quantum leap in social intelligence. We are the final generation of an old civilization and the first generation of a new one.”
Knowledge and management of knowledge is the fuel for the emer¬gence of a new-world era. In this new world, knowledge replaces money as wealth. When property was the symbol of wealth in the agricultural era and money was the symbol of wealth in the industrial era, so now knowledge is the symbol of wealth in the information era. Accordingly, wealth and poverty are redefined as the poor are not those who have no money but those who have know¬ledge. The ‘have nots’ are redefined as the ‘know nots’. This, of course, has tremendous implications for education, information management and government initiatives in build¬ing information and human infra¬structure. Finally, success in the mar¬ket is based, in the end, on differences rather than similarities between alter¬native providers


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