Education business needs a different marketing mix
Education business needs a different marketing mix
Satyasuryawan, Contributor, Jakarta
Every parent shares a common wish for their children: to
provide them with the best education possible. Their willingness
to pay for their children's education at the best institutions,
however, are varied.
"The willingness to pay for education in Indonesia is still
low," said Antarina S.F. Amir, managing director of High/Scope
Indonesia, a U.S.-based institution that provides education and
conducts a research in this area.
Sometimes payment is not the real problem, as each family has
different priorities and budget allocations, especially in
regards to preschool education. Many parents believe that school
fees should not be costly. Parents, especially new ones, prefer
to spend most of their earnings on other items such as home
renovations, new cars, or trips abroad.
In general, parents do not realize the significance of
preschool education for children in their early years. Therefore,
since the inception of High/Scope, Antarina has been busy
convincing parents that good education must be conducted
correctly from the earliest possible stage of childhood. Of
course, a lot of money will be needed, especially because much of
the funds will go to the training of qualified teachers, the
provision of excellent educational facilities, and the
preparation of a curriculum that has been tried and tested
thoroughly.
Eventually, of course it is the parents who must shoulder
these educational costs. Now, are parents really willing "to
spend" their money on this? Those managing educational
institutions continuously face this problem. To be more precise,
the question is: what would be the most proper way to market
educational services without sacrificing idealism?
Many parents send their children to study abroad, for example
to the U.S., Australia, or Great Britain. They believe that
educational quality in these countries is far better than at
home. It is also this perception that played a major influential
role when preschool educational institutions introduced
themselves under foreign names such as Tutor Time, Kiddies
Planet, Kinderland, Tumbletots, Cambridge or High/Scope.
Each institution claims their program is the best. We may
dismiss any doubts we have, given that they are here under the
franchise model from the U.S., so the quality should be better
than average with an established managerial system.
Of course, each of these schools has its own characteristics
as well.
The educational concept of "active learning" applied at
High/Scope, for example, does not just adopt the curriculum from
the U.S., as the institution also draws up its own program based
on the local culture. Classes -- from preschool up to the sixth
grade -- are arranged for group learning to provide a pleasant
atmosphere, far from the boredom of conventional schooling. The
school provides complete auxiliary facilities for writing, games,
motor exercises, and computers. Also, the school is provided with
facilities for games, mini basketball and soccer fields and a
swimming pool. With a low teacher-student ratio, teachers are
trained and provided with a concept on the significance of their
Students' development without treating them merely as objects.
"Every child deserves a quality, happy preschool education,"
said Meera Joseph, Head of Kinderland. Kinderland's programs, she
added, enhances the social, physical, emotional, intellectual,
and moral developments of a child.
Meanwhile, Kiddie Planet's principal, Soraya Fernandes, said
that the school's program is a melting of the international
traditional approach -- teacher-directed -- and the Montessori
method, which is child-directed to fully prepare the children for
life.
Likewise, Tutor Time, which only has programs for children up
to the age of six, applies the concept of "learning by playing."
This school seems to have transferred the children's playground
from their homes to the school. "The children regard Tutor Time
as their own playground and they have lots of fun all the time,"
said its marketing manager, Vivian Sabas. The school also has an
arena where children can get acquainted with adult life. For
example, the school provides facilities so that the children can
play roles as shop owners, firemen, or cleaning-service people.
Owing to these kinds of rich facilities, school fees at
franchised schools are generally higher than in local schools.
For a pupil at High/Scope, the parent must spend Rp 1.25 million
a month. At Tutor Time, the fee is almost twice as much, with an
additional entrance fee which must be paid upon enrollment. Most
of this money will be used to pay qualified teachers and cover
the franchise fee in the country of origin.
As the school fees are high, the market segment becomes
limited to only the middle and upper classes. That's why
High/Scope was first established in Pondok Indah, an elite
residential area. Only a small portion of its pupils, which
number about 600, are foreign citizens. Pupils of foreign
citizenship mostly come from Asian countries like Japan, Korea,
or Taiwan. Otherwise, their parents are Indonesians married to
Westerners.
At Tutor Time, the segmentation is even sharper. The school
was first set up in Kemang, where residents are usually
expatriate. The fee is charged in U.S. dollars and at some of its
branches, is higher than the rupiah rates.
For people of this social class, expensive school fees -- with
guaranteed educational quality and super-comprehensive facilities
-- are no problem at all. However, not all rich parents are
interested in sending their children to these schools, because
they think the costs for education are just exorbitant.
Understandably, given this condition, promotion by advertising
-- both above or below the line -- will not be too effective.
Advertisement only works during the initial stages of a school,
or when a completely new school is opened. Sometimes, to
introduce and promote the school, the management joins an
exhibition or give a performance of its pupils at public places
such as malls.
Consumers in these middle to upper classes are inflexible when
it comes to prices, and as such, they will not be lured only by
promises given in advertisements. Concrete evidence or references
from close circles, such as families or friends, will be more
convincing to them. They would like to know whether the teachers
and the school management will treat their children hospitably,
encourage the children when they are low in spirit or treat them
well when they have a minor accident at school. The experiences
of friends or families whose children go to these schools will be
a more effective promotional activity than advertising in the
mass media.
The attraction of franchised schools is also great because of
their popularity in the countries of origin. Expatriates look at
no other option as they already have preliminary information
about the relevant schools in their own countries.
About 60 to 70 percent of parents who send their children to
High/Scope based their decisions on references from their close
friends or relatives. From this "word-of-mouth" type of
promotion, High/Scope, which started out with only 5 pupils, has
been able to recruit at least 100 pupils in less than a year. In
order to fulfill the demands of an expanding student body, it
opens at least one branch every year. A present, it has four sub-
franchisees in Jakarta and it will establish more in Bali,
Surabaya, and Kalimantan.
As for Tutor Time, it is now established in 7 locations, with
3 sub-franchisees. Its pupils number about 500.
With all these varied activities, whether they realize it or
not, school managements have implemented a marketing mix in
providing education. Of course, they will strongly object to
being called business agents.
In fact, they have designed a unique educational product with
characteristics that are quite different from their rivals'. They
set their school fee levels in such a way so that the schools can
generate funds to continue their existence. They also determine
the market segmentation and choose the right location for this
segmentation. Then they promote the schools effectively, namely
by word of mouth.