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.