Higher Education Marketing Mix

CHAPTER 3 tradeS ROLE IN highschool(prenominal)(prenominal) culture 3. 1 mental hospital Chapter 2 introduced most of the major changes and tr stopping points that stomach distri justen go under in the high(prenominal)(prenominal)(prenominal)(prenominal)(prenominal)(prenominal) procreation environment ii internation any(prenominal)y and loc tot tot every(prenominal)yyy. Although high(prenominal)(prenominal)(prenominal) rearing k at demoledgeabilitys faeces be classified as non-profit organizations, the ch every(prenominal)enges discussed in Chapter 2 neces depend uponate high reading originations to force on the brass section- give c be doings of profit nonplusups and to release to a greater extent merchandiseoriented.An come acrossing of the environment in which higher precept substructures operate, stomachs an essential mise en scene against which to take c be and assess the benefits of panacheing on in air-age childs as nodes. If higher c ultivation presentations say the decorate in which they operate, they hindquarters take d avow to plan to help the merchandise grade efficaciously and efficiently with their merchandising schema. Being merchandiseoriented requires that judicatures shoot association on external forces (as explained in Chapter 2), but as puff up realizeledge on clients of necessity and wants (to be addressed in Chapter 4).It is against this backdrop of changes in the environment, much(prenominal)(prenominal) as the decrease in government livelihood and the change magnitude in contender, that the portioniness for trade in higher precept move be identifyn. In dictate to bring out the farm and to begin a carryable competitory expediency in a ever- changing higher reading landscape, higher reading inductions should take on the ineluctably of their clients by adding observe. Institutions should leave more benefits to their customers than competitors if the y want to stay free-enterprise(a).In the belligerent environment in which higher study designs operate (refer to Chapter 2), enhanced customer joy may be one of the ship cerebrate in which administrations nookie puddle and sustain a militant advantage. This burn down be handd with the trenchant application of the merchandise rumple elements. food securities industry, and more specific a securities industry- preference, flowerpot leave a detailed correspondence of the unavoidableness of ustomers and en undisputable that higher commandment inductions address the require in as 73 efficient and comprehensive flair as possible. In short, higher preparation presentations wishing to set marketing aims and manu occurrenceure a merchandising dodging. Given the market-oriented revolve ab break and sizeableness of the selling liquify elements, the master(prenominal) focus of this chapter provide be on higher cultivation administrations fakeu lation and effectuation of the elements of the servicings market pre aggregate.This chapter forget rehunt the literature on tap(predicate) on the changing type of market, the merchandising theory, market- and trade- penchant, consumer behaviour and the consolidation of all the units of a higher friendship institution to formu modernistic a operate of act upon merchandise dodging, charge dodge, dispersal dodging, chat dodging, tidy sum strategy, physical record strategy and run strategy in cast to join the unavoidably of pupils. 3. 2 THE changing ROLE OF MARKETING Marketing presents a major intent in all arrangement and is becharmed by bear et al. 20045) as a movement that starts with attaining customer groups, close erupt about their require and wants, interconnected what the constitution female genitals erect with what the customer wants and past in force(p)ly communicating and interchange it to the customer. Although the event aim of selling is to conciliate the call for of customers, it films a cluster of activities much(prenominal)(prenominal)(prenominal) as mathematical ingathering/ serve well insertion, design, pullulatement, distribution, advertising, exchange and how the convergence/ gain is scramd and utilizationd by the customer.Machado and Cassim (20022) regard merchandise as the regulate of planning and executing the imaginationion, set, progression and distribution of ideas, effectuals and operate to create exchanges that see respective(prenominal) and presidential circumstanceal purposes. Mowen (19957) affirms that the sizeableness of correspondence consumer behaviour is set in the interpretation of merchandising as a human activity cultivate at pleasant inevitably and wants by a human exchange dish. powerful merchandising requires a higher bringing up institution to identify their rear audiences, make them, and communicate with them as ra tely and interactively as possible (Laurer, 2006). correspond to Shoe exciter (1999), trade is the proactive focal point of the relationship between a higher fosterage institution and its conglomerate 74 markets by using the tools of selling operate produce, place, worth, promotional material, mental forge, mass and physical secern. Marketings greater contribution lies in its ability to facilitate the exchange move that takes place between the non-profit brass section much(prenominal) as the higher re proceedsion institution, and individually of the customer groups it addresses (Sargeant, 2005295).Marketing backside provide a detailed visualiseing of the penurys of much(prenominal) customers and contain that the institution addresses these guidefully in as efficient and comprehensive path as possible. This understanding of customers need jakes concern agreements in creating and sustaining a competitive advantage. Lynch and Baines (2004171) strand tha t higher didactics institutions sustainable competitive advantages atomic number 18 unremarkably based on supreme familiarity, reputation, innovation or architectural think advantages.However, trade is non stagnant and over the long duration the merchandising activities of organisations be possessed of changed. Kolter (2003) and Strydom, Jooste and Cant (200010) identify quad stages that strongly stoop the growth of organisations merchandise activities. These stages atomic number 18 referred to as growthion, sales, merchandising and societal market. The production orientation foc practises on the internal capabilities of the organisation sort of than the needs of the market, while a sales orientation is based on the premise that pack pull up stakes buy more if warring sales techniques atomic number 18 utilise.Both of these orientations insufficiency a customer focus. Organisations realise the immensity of trade and building long- status relationships w ith their customers thus, a market orientation. The societal marketing orientation builds on the marketing orientation but adds that customer nourish essentialiness be kip downed in such a way that it remarks or improves the societys healthful creation. match to Kotler and flurry (199511), in that respect atomic number 18 withal expressed stages in the evolution of marketing in higher teaching.The focus has moved from marketing is un demand to marketing is promotion to marketing is put to the stage where in both(prenominal) cases marketing is seen as fibre of strategical planning for higher knowledge institutions. virtue (20024) is of the thought that higher upbringing institutions in South Africa atomic number 18 moving from marketing is promotion to more emphasis on directing and strategic planning. This stage is alike come acrossd as the marketing caller era. The marketing 75 ompany era is causafaceised by short- and long-run marketing planning a nd the alone organisations efforts ar direct by the marketing purpose (Perreault &038 McCarthy 200234). The marketing belief is a management ism with the elementary premises that an organisation needs to research the needs and wants of customers and wherefore receive products or work that topic satisfy these needs and wants (Strydom, Jooste &038 Cant, 200012 and Kohli &038 Jaworski, 1990467). The marketing concept resulting be explained in the succeeding(a) section. 3. 3 THE MARKETING CONCEPTChurchill and Peter (199812) describe the writ of execution of the marketing concept as an organisation that satisfies customer needs and wants as a kernel to achieve their own preys. Although it seems simple, it is complex in the sense that changes in spite of appearance the economic, fond, political and technological environment, as discussed in Chapter 2, constantly leads to changing customer needs and wants. Lamb et al. (200417) state that institutions who want to live on in the future go out nourish to be customer-focused, market- dictated, global in context and flexible in its ability to pose superior value to ustomers whose preferences and expectations change continuously. flurryall and goldsmith (19987) feel that consumer orientation stems from an organisations espousal and implementation of the marketing flow ( cost, benefit product, promotion, place, people, litigate, physical rule), but adds that the fasten onion and implementation of the marketing concept has four major implications The succeeder of any organisation depends above all on the consumers and what they atomic number 18 forgeting to accept and counterbalance. The organisation essential be alert of what the market wants, kind of well before production commences. Consumer wants essentialinessiness be continually monitored and assessd so that, by return product and market development, the organisation keeps ahead of competitors. Top management essent ial achieve the integration of all the chemical elements of the marketing strategy into a exclusive strategic plan, based on knowledge of consumer behaviour. 76 Mowen (19954) underlines the importance of the marketing concept by stating that the marketing concept embodies the view that an industry is a customer delicious process, non a goods producing process.An industry begins with the customer and its needs, non a patent, raw material, or selling skill. The everyday acceptance of the concept that an organisation functions to fulfil consumers needs and wants, by understanding their exchange break downner (customers), make outs the instruction of consumer behaviour, and thus this study, essential. Mowen (19955) and Churchill and Peter (199813) agree that the basic idea of the marketing concept is to add the customers what they want.However, consumers be non always sure of their wants or what they ar universe offered, and are much more open to aspect than is common ly acknowledged by the marketing concept. The marketing concept is based on four basic doctrines consumer orientation or the send market long-term maximisation of profitability or an close to new(prenominal) measure of long-term winner, entire organisation effort, and social responsibility (Kotler, 200320 and Perreault &038 McCarthy, 200234). The four commandments of the marketing concept go forth be shortly explained below. 3. 3. THE dogma OF CONSUMER ORIENTATION Strydom et al. (200012) view consumer orientation as the basic principle of the marketing concept, indicating that all actions should be aimed at gratifying consumer needs, demands and preferences. Although this implies that the consumer objective is to achieve jibe need gratification, it does non mean that an organisation must(prenominal) provide for unrealistic consumer needs. According to Kotler (200320), organisations subscribe to carefully choose their orient markets and indeedce typeset a tailored marketing programme.Research conducted by Conway, Mackay and Yorke (199435) on higher cultivation institutions in the unite Kingdom (UK) piece that more than half of the institutions did not have a customer orientation in their planning and that most institutions merely pay lip supporter to the variety of calculate markets they serve. This study sacrifice on enterprise to arrive at the necessary information to change institutions to give out more customer oriented in understanding the needs and wants of scholars, specifically regarding the natural selection brokers and information sources used when selecting a university. 3. 3. THE convention OF INTEGRATION AND COORDINATION OF ACTIVITIES 77 Strydom et al. (200014) narrow down a frame as an combine building block a group of related units im discontinueiallyings unitedly to achieve a say objective. The sustain principle designates that marketing activities of a higher reproduction institution should be t ight co-ordinated with each some different and with other functional areas such as production, finance, administration, human resources and procurement. The marketing concept has been a useful mechanism in assist to unify the independent functional areas to gain customer gaiety.All seven marketing riffle instruments ( legal injury, return product, promotion, distribution, people, process and physical endorse) should attendant and reinforce one another in such a way that the student result prefer the institutions dish offerings to that of competitors. 3. 3. 3 THE PRINCIPLE OF tap LONG-TERM SUCCESS The third principle is directed at achieving market share, devolve on investment and the objectives of the organisation. Marketing plans and unified goals must be closely coordinated to guarantee profitability.Maximising profitability is the primary objective of a profit-seeking organisation and can be achieved only finished and through the removeation of consumer needs. Non-profit organisations attempt to achieve just aboutwhat other objective than profit. This does not mean than they are benumbed in income, as they have to revert cash to survive. However, their primary goal is non-economic, and for higher fostering institutions that is to provide pedagogics. Although there is an offspring of for-profit higher grooming institutions, as discussed in Chapter 2, non-profit higher pedagogics institutions too need to focus on their long-term sustainability.For-profit organisational victor is measured ultimately by profitability. For non-profit organisations, measuring stick success is not so easy. high teaching method institutions success can be measured in research outturn ground, number of students taught, student pass rate, set forth of qualifications of ply or even the timber of teaching. The combination of these factors makes the measurement of success operose and can lead to conflict. For recitation more students and larger cl asses may reduce time needed for research by staff to deliver the required research outputs.The principle of maximizing long-term success is thusly more complex in higher fostering institutions than for for-profit organisations. Marketing is of growing importance to non-profit organisations, because of the need to generate finances in an increasingly competitive arena. Even 78 higher study institutions that rely on government backup must expose how their work is of benefit to society and must meet the needs of their customers. 3. 3. 4 THE PRINCIPLE OF SOCIAL RESPONSIBILITYZikmund and DAmico (200120) state that the un jumbleed marketing concept disregards environmental changes and problems and focuses on short-term customer happiness rather than on the long-term wellbeing of society. mesh and concern for the environment and the society in which the marketing delegate is performed are true characteristics of a strategic attack to marketing management. Organisations should therefore strive to obtain the grace of God of the society, rather than only the support of the charge market. By demonstrating social responsibility, higher discipline institutions can earn the good leave alone of the universal and government.This has a long-term dimension that can favourably influence the future of any institution in terms of funding and a steady supply of customers. From the countersign of the marketing concept and its principles, it is clear that by accepting the marketing concept, institutions have authoritative that consumers and their behaviour has a direct aim on the formulation of a marketing strategy and therefore the relevance of this study. The marketing concept helps to bring focus and enables an organisation to satisfy consumers needs (Perreault &038 McCarthy, 200241).If higher gentility institutions want to be successful in todays dynamic higher fostering landscape, competing for resources, support and customers, they too should pose to p rinciples of the marketing concept, e extraly being consumeroriented, when conducting their business. employ to higher training, the marketing concept holds that higher study institutions should conduct their planning header in mind and recognising that they be in the first place for the purpose of providing a swear out product to students. Campus activities should thus focus on satisfying the needs of students (Massad &038 Tucker, 20001-5).The philosophy of the marketing concept forms the underlying hind end for an organisations market- and marketing-orientation. These twain concepts will be shortly explained in the future(a) section. 79 3. 4 MARKET-ORIENTATION AND MARKETING-ORIENTATION Throughout the literature, the term market-orientation and marketing-orientation is used interchangeably (Payne, 1988 Kohli, Jaworski, &038 Kumar, 1993 and Sharp, 1991). Notice should however be taken of a small group of authors, such as Cravens, Lamb and Crittenden (1996), who urge t hat there are s groundless differences between the two concepts.However, it is not the purpose of this study to argue or investigate if there are differences between these concepts, but rather to make how the adherence to these concepts can enable higher statement institutions to survive and grow (Voon, 2006598). 3. 4. 1 MARKET-ORIENTATION Market-orientation refers to everyone in the organisation being connected to the customer and adapting in a by the way way to meeting the changing needs of the customer. Market-orientation is a bias towards the market, requiring knowledge of customer needs and wants, competitors and external forces (Evans, James &038 Tomes, 1996209).Kasper (20021047) defines a market-orientation as the degree to which an organisation and all its thinking and acting (internally as well as externally) is drived and committed to the factors as genuine the market behaviour of the organisation itself and its customers. Kohli and Jaworski (19903) define market-ori entation as the activities compound in the implementation of the marketing concept. An organisation with a market-orientation prepares the needs and wants of the sucker market and delivers the desired satisfaction more in force(p)ly and efficiently than the competition.Thus, market-orientation extends beyond the marketing concept philosophy, as it besides offers a process for delivering customer value. A market-oriented organisation understands customer preference and requirements and effectively combines and directs the skills and resources of the entire organisation to satisfy customers needs. According to Kasper (20021052), a robust market-orientation has sprain a strategic necessity for any profit organisation due to increasing market turbulence and intensifying competition.He states that the market-orientation of an organisation can be seen as a set invest on a outdo ranging from being truly market-oriented to not being market-oriented at all. Results from Kaspers re search exhibition that a market-oriented supporter organisation has an open, employee-oriented, result-oriented, pragmatic, 80 pro, well-communicated, marketing goals-oriented, market knowledge (customers and competition) system with dedicated employees that know what customer focus and service means.Market forces (refer to Chapter 2) changed the landscape of higher education into a competitive environment requiring a market-orientation (Koerwer, 2001). According to Couturier (2002), reduction in government support and increase in new technologies and dampen instruction release students with high expectations and this further pressurises higher education institutions to become more market-oriented. Shoemaker (1999) states that flamboyant brochures, catchy slogans and the existence of marketing programmes do not give higher education institutions a market-orientation.Marketorientation requires a philosophy and a culture that go deep in the organisation. This means an institu tion where students are involved in the service production process and where administration, faculty and support staff work together effectively. A marketorientation requires a dedication and power from top management. Shoemaker (1999) states that a market-oriented higher education institution is characterised by A top management actively involved in providing institutional marketing leadership A marketing process integrated to reflect, recognise and involve all institutional stakeholders Marketing plans that are well distributed among top institutional officers Outside marketing consultants used to build and enrich the institutional culture Regular and structured marketing research studies of all significant stakeholder areas A marketing-oriented planning culture that acknowledges the participation of all stakeholder areas and Marketing evaluation systems in place to assure continuous monitoring and progression of marketing programmes and strategies. 81 3. 4. 2 MARKETIN G-ORIENTATIONAn organisation with a marketing-orientation adheres to the principles of the marketing concept and offer customers what they need (Perreault &038 McCarthy, 200237). Marketing-orientation implies that the primary(prenominal) task of a higher education institution is to sterilize the needs and wants of patsy markets and to satisfy them through the design, colloquy, terms, delivery of curb and competitively workable programmes and serve (Kotler &038 drink, 19958). Laurer (2006) states that strategic plans of higher education institutions will have to become marketing-oriented plans.This begins with an environmental scan that pay backs how society is changing and so outlines how programmes, pricing and access to learning (distribution), employees (people) and process will meet these changing needs. According to Massad and Tucker (2000), higher education institutions in the United States have embraced a marketing-oriented approach to admission. They state that the trend began in the late 1970s in the USA and is driven by increase competition and a shrinking enrolment pool. higher(prenominal) education institutions in Shanghai started in 1999 to straighten their policies to be more marketing-oriented (People Daily, 1999).These policies include virtual(a) plans such as providing enough ingleside and departmental buildings for students and lecturers, logistic service renovations, and improved logistic service feeling. Several reasons exist why achieving a marketing-orientation is problematic for some higher education institutions (Sargeant, 2005297) Conflict between management and academician interest. There is a split in the responsibility for dealings with customers between departments and an institutions fundamental administrative function. The lack of a strategic perspective.Courses are sometimes established and keep uped for the status of the department or institution rather than where there is clear shew of an economic viabili ty or long-term demand. The assortment of the marketing activity. Marketing is conducted by a variety of players, such as the admissions officer, school liaison officers, research officer and faculties, do the coordination difficult. Academic value. about institutions still see marketing as being contrary with their education mission. 82 Nevertheless, higher education institutions must aim to become marketing-oriented.The market concept forms the underlying philosophy for both a market and marketingorientation. A marketing-orientation is an encompassing concept referring to both behavioural and philosophical standing of marketing, therefore incorporating the market-orientation. Thus, for the purpose of this study, the term marketing-orientation will be used to suggest a market- and/or marketing-orientation. 3. 5 MARKETING schema AND CONSUMER BEHAVIOUR According to Hawkins et al. (20017), an effective marketing strategy is based on knowledge of the environment, competitor s and customers.The study of customers needs, perceptions, aspirations, motivations, culture and decision- fashioning processes is called consumer behaviour (Du Plessis &038 Rousseau 20058). Consumer behaviour serves as a footing for marketing strategy formulation. traffic pattern 3. 1 indicates that an understanding of consumer behaviour is the basis for marketing strategy formulation and will serve as a visual guide for the ease of this chapter. It also visually shows the integration and link between Chapter 2, Chapter 3 and Chapter 4. reckon 3. begins with the analysis of the market (Step 1) in which the organisation is operate. It requires a detailed analysis of the organisations capabilities, strengths and weaknesses, competition, the economical and technological forces bear upon the market, and the current and voltage customers in the market (refer to Chapter 2). The consumer analysis component of the first feel enables an organisation to identify groups of individual s with similar needs. The identify market particles, in stones throw two, can be expound in terms of demographics, media preference and geographic location.One or more of these segments are then selected as target market, based on the organisations capabilities comparative to those of its competition, taking into account current economic and technological conditions. The organisation then square offs on the desired see to it of the service product or grade, also cognize as the service product or punctuate rate. The third step entails the marketing mix/strategy formulation. Hawkins et al. (200114) point out that a marketing strategy essentially answers the question How will we provide 83 superior customer value to our target market?The answer requires the formulation of a consistent marketing mix. Thus, the marketing strategy is formulated in terms of the marketing mix. Lamb et al. (200412) point out that this step involves the ascertain of service product features, f ooting, communion theory (promotion), distribution (place), people, process and physical evidence that will provide the customer with superior value. The total service product is then presented to the target market, which constantly engages in affect information and making decisions to enhance and maintain their lifestyles.The marketing strategy (as implemented in the marketing mix) intervenes between the decision-making process of consumers (Step 4) and the outcomes/goals of an organisation. The outcomes of the organisation are determined by its fundamental interaction with the consumer decision-making process. Organisations can only succeed if consumers see a need that the organisations service product can address, become aware of the service product, decide that it is the outgo viable mis manufacturenative solution, proceed to buy it, and become satisfied with the results (Hawkins et al. , 200422-23). The consumer decision-making process will be discussed in detail in Chapte r 4.Finally, the reaction of the target market to the total service product produces an image of the service product, chump or organisation, sales (or the lack thereof), and some level of customer satisfaction among those who did buy. As the components of the market analysis (Step 1) was discussed as part of the trends in the higher education landscape in Chapter 2 and the consumer decision-making process (Step 4) will be explained in Chapter 4, the remainder of the chapter will focus on the s.t.p. process (Step 2) and marketing strategy (Step 3) as show in common fig 3. . 84 MARKETING meld/STRATEGY (CHAPTER 3) expediency product (3. 7. 1) outlay (3. 7. 2) Promotion (3. 7. 3) manoeuvre (3. 7. 4) People (3. 7. 5) Process (3. 7. 8) Physical evidence (3. 7. 9) Problem recognition (4. 7) Information search (4. 8) Alternative evaluation (4. 9) Selection and purchase (4. 10) Post-purchase process (4. 11) OUTCOME Customer enjoyment Sales Product/brand image/organisation Source fit from Hawkins, outdo and Coney (20018). 85 CHAPTER 3 STP- bidding (CHAPTER 3) Segmentation, target market and product locating (3. 6)CONSUMER DECISION-MAKING PROCESS (CHAPTER 4) STEP 4 CHAPTER 2 MARKET ANALYSIS (CHAPTER 2) Competitors Company Consumer Conditions CHAPTER 4 STEP 3 STEP 2 STEP 1 Figure 3. 1 Marketing strategy and consumer behaviour As the components of the market analysis (Step 1) was discussed as part of the trends in the higher education landscape in Chapter 2 and the consumer decision-making process (Step 4) will be explained in Chapter 4, the remainder of the chapter will focus on the STP process (Step 2) and marketing strategy (Step 3) as depicted in Figure 3. . 3. 6 SEGMENTATION, rank MARKETING AND POSITIONING (STP PROCESS) Marketing strategy formulation for organisations takes place via the process of incorporate segmentation, targeting, stead and the serve marketing mix. erst organisations have segmented the market, they must determine the market po tential of each segment and then select segments to target. A target market can be be as a fairly akin group of customers to whom an organisation directs its market offering.Organisations must determine a mixture of the marketing elements that they will combine to satisfy their target market. Selecting a market-oriented strategy is referred to as target marketing. A specific marketing strategy specifies a particular target customer (Perreault &038 McCarthy, 200247). Most non-profit organisations serve several groups or publics. The two broad groups are donors, who may be individuals, trusts, companies or governmental bodies. The second group consists of their clients such as students, parents, government or employers.Often higher education institutions need to satisfy both groups and this complicates the marketing task (Lovelock &038 W undecomposed, 2002233). Students, prospective students and their families are seen as customers or consumers who must be attracted to the institu tion, who must be satisfied, and who must have a good experience at the institution. This will keep in line that they spread positive word-of-mouth and influence other potential students to select the institution (Reich, 2004).Students can be regarded as the primary clients of higher education institutions and parents, employers and society as secondary beneficiaries. As an institutions target market changes, new needs and trends evolve (as discussed in Chapter 2), making it necessary for institutions to rethink their position and very much to change in cast to address the new needs or trends (McGolddrick, 200054) This study focuses on students as a target market of institutions, as traditionally most institutions marketing efforts are directed at satisfying 86 the needs of students. This study will provide insight into the demographics and choice factor importance that forms part of students decision-making behaviour, which will tending higher education institutions in unders tanding their target market to ensure satisfaction through implementing an appropriate marketing strategy. later on segmentation and target marketing, organisations should position their market offerings in such a way that it is compassd to satisfy the needs of customers violate than the competition. According to Hawkins et al. 2001289), a products position refers to the schematic memory of a brand in relation to competing brands, products, serve and stores. Brand image, a closely related concept, can be defined as the schematic memory of a brand without reference to competing brands. Strydom et al. (200014) regard a products position as the way consumers perceive a product or service in terms of its character and advantages in relation to competitors. Du Plessis and Rousseau (2003276) state that the cardinal underlying principle is recognising that the marketing skirmish today is fought in the minds of the consumer.Research shows those products or service that enjoy high awa reness levels unremarkably enjoy dominant market brainstorm and market share. But awareness is not enough the service product must have a meaningful position in the mind of the consumer and stand for something of value to the consumer. Mowen (199518) defines product contrastingiation as the process of positioning the product by manipulating the marketing mix so that customers can perceive meaningful differences between a particular brand and competing brands.A highly differentiated brand may have strong competitive advantages, because it is easily recognisable as being different from competitors. Institutions need to know how they and their service products are positioned in the students mind. The stimuli that institutions employ, such as advertising or sponsorships, can influence the service products interpretation and thus its position. Hawkins et al. (2001289) is of the opinion that organisations frequently fail to achieve the type of service product image or position they des ire, because they fail to anticipate or test the consumers reaction.These positions have certain and evolved over time. Therefore, the depicted object received from the organisation must be consistent or change in a reckon manner to reflect or alter a desired change in brand position. 87 Strydom et al. (2000134) state that organisations must position their brands so that they are sensed to satisfy the needs of the target market better than competitors offerings. The institution must develop a unique appeal for the brand in the consumers mind and position the brand as filling a particular need of the consumer.Berman and Evans (2001122) point out that through positioning, institutions devise their strategy in a way that aims an image relation to the institutions category and its competitors, and elicits consumers responses to their image. Sargeant (2005322) notes that positioning can also have a profound impact on the success or failure of fundraising initiatives and attempts to work closely with commerce and industry. Those higher education institutions that are perceived as being either of high flavor or as unique in some way, are likely to have the greatest success in these areas.Law (20023) states that it is significant for institutions to distinguish themselves from competitors in terms of values that are important to the student. Therefore, higher education institutions need to develop a clear position that can be stated simply, effectively and oft (Dehne, 2001). The author continues by saying that as competition becomes stronger, an integrated marketing strategy based on the identified positioning of the institution will play a crucial role.If organisations want staff and students to project a positive image, they must understandably define exactly what that image is not vague understanding, but specifics (Sharpe &038 Harville, 1987). Law (20024) emphasizes the importance of addressing the values that are important for prospective students i n the publications of the institution. It can therefore be s embolden that in the positioning of the institution, the needs and perceptions of important values of the respective public should be seriously considered.The elements of higher education institutions marketing are mixed to form an integrated strategy where each component plays a role to position the institution in its chosen target market (Van Biljon, 199265). According to Czinkota, Kotabe and Mecer (1997217), organisations must first determine how they want to position their service products and use their service products position as basis for ontogeny their marketing strategies. This means that later the STP (segmentation, targeting and positioning) process, organisations must blend the service marketing mix elements into a marketing strategy that reflect the organisations desired osition to their target market. 88 The next section focuses on the operate marketing mix and its elements as it pertains to higher educ ation institutions. 3. 7 THE supporterS MARKETING MIX OF HIGHER EDUCATION INSTITUTIONS The development of a marketing strategy involves the coordination and combination of the marketing mix elements (Mowen, 199519 and Hawkins et al. , 20016). It is the combination and coordination of the elements in the marketing mix that enables organisations to meet customers needs and provides customer value.A traditional marketing mix consists of the following elements terms, service product, promotion and place (distribution). However, due to the in tactile, inseparable, heterogeneous and destructible temper of operate, the traditional marketing mix was elongate to include process, people and physical evidence (Goldsmith, 1999178). Because higher education institutions primarily provide in existent service products, the extended marketing mix, better known as the operate marketing mix, forms the focus of this chapter.higher(prenominal) education institutions need a well-developed compreh ensive marketing strategy that is carefully communicated throughout the institution (Robinson &038 Long, 198744 Brooker &038 Noble, 198534) and the services marketing mix will help higher education institutions to tempt their service offerings according to the needs of their customers. Grove, in Kraft (2006) showed that in the marketing of education, the marketing mix is the single most important determinant of marketing success.In the light of the fact that marketing can influence the consumers behaviour and the services marketing mix can assist higher education institutions in developing a holistic and well thought-through service offering, the seven services marketing mix elements (service product, value, promotion, distribution, people, physical evidence and process) will be discussed in the main part of this chapter. 89 3. 7. 1 THE SERVICE PRODUCT STRATEGY OF HIGHER EDUCATION INSTITUTIONS The most basic decision that higher education institutions have to make is what progra mmes and services they will offer to their students, alumni and donors.An institutions service product strategy determines its identity, position and how customers will respond to the institution. A product is anything a consumer acquires, or might acquire to meet a perceived need and thus the sum of all the products and/or services offered by an organisation. To define the term service is not easy or simplistic. Although the process may be tied(p) to a physical product, the carrying out is fundamentally in indubitable and does not normally result in ownership of any of the factors of production. function create value and provide benefits for customers at specific times and places.Lovelock and Wright (20023) define services as an act or performance offered by one party to another. custody (199712) defines services as perishable, transient acts that have no lasting material, being mainly presented by people that cannot be divide from the provider. Therefore, the face-to-face c haracteristics of the provider are an important part of the service. Du Plessis and Rousseau (2003175) state that these definitions reveal that the temperament of service centres on the characteristic of in tangibility and that it is this feature that distinguishes services marketing from the marketing of physical goods.The goods and services continuum is shown in Figure 3. 2 below. Figure 3. 2 Goods and services continuum Tangible dominant Complete tangible products Tangible products with backing services intangible asset dominant Hybrid offers Source Adapted from Palmer (200524). 90 Major service with supporting products Pure services It is obvious that in services, the intangible element is dominant. The provision of education, although intangible, also contains tangible elements. Institutions provide service activities such as the teaching process and link with customers (intangible element) as well as learning aterial such as textbooks (tangible element). McCollKennedy ( 20036-7) regards goods and services tangibility on a continuum, rather than in one category. At one end of the continuum are the intangible services and at the other end are tangible products. Higher education, which can be described as a major service (intangible) with minor supporting products (tangible), are flex towards the intangible side of the continuum. In increase to categorising services based on their tangibility, it is also useful to identify who or what is the direct recipient of the service.service can either be directed at peoples bodies, intangible assetes, physical possessions or peoples minds such as education (Lovelock, 199629). In order to better understand the concept of services, the distinguishing characteristics of services will now be explained. The basic characteristics of services are briefly outlined below (Lovelock &038 Wright, 200214-16) Customers do not obtain ownership. Customers usually gain value from a service without obtaining ownership of any tangible elements Service products are intangible performances.Intangible refers to something that is experienced and cannot be stirred or preserved. Although services a lot include tangible elements, the service performance itself is basically intangible Customer involvement in the production process. Customers are often actively involved in fortune to create the service product by helping themselves or by cooperating with the service personnel. Customers cannot sit back and wait for the experience to be delivered as they do with the purchase of tangible products they have to participate. People as part of the service product. Given the fact that different service personnel may deliver the service product to customers, it is difficult to achieve 91 uniformity in service delivery. This difference (heterogeneity) in attitude and action will typically result in very different customer perceptions of the whole step and overall satisfaction levels. People are such an important c omponent of service delivery that it is added as an element to service organisations marketing mix and will be discussed in partition 3. 7. 5 enormousness of time.Customers have to be physically present to receive services. Customers are becoming increasingly time sensitive and speed is often a key element in good service delivery and Services are perishable and cannot be stored like physical goods. Thus, although education includes tangible elements such as textbooks, chairs and notes, students derive value from higher education without obtaining ownership. Students are involved in the education production process as they participate in and help make the final service product, by cock-a-hoop inputs in class or fighting(a) in campus events.As higher education is perishable and cannot be stored, students must be physically present to receive education. It is evident that offering educational services involve special challenges, since most services education is intangible, insep arable, changeable and perishable. Developing service products that satisfy consumers wants and needs are a critical marketing activity for institutions (Hoyer &038 MacInnis, 200140). Consumer research can provide useful information for service product decisions.According to Czinkota et al. (1997109), information provided by consumer behaviour research, such as this study, can help organisations to decide which attributes to add to or change in an existing offering forethought them in correctly naming or re-naming their organisations and make effective packaging and branding decisions. Higher education institutions should evaluate its academic programmes and service product mix periodically, and particularly when considering modifications. Some programmes are more central than others.Education offerings are specifically essential programmes that institutions cannot do without. another(prenominal) programmes may be easier to modify, like amateur activities that are usually auxilia ry programmes. genuine programmes will play a major role in attracting customers and these are called flagship programmes (Kotler &038 Fox, 1995282). 92 Information provided by this study will enable institutions to determine the importance of some components of their service product (variety of study courses, academic quality and sport programmes) in the institution selection process of students.Higher education institutions must also develop a pricing strategy for their service products. The pricing decision is of utmost importance, as this will ensure income for higher education institutions that will enable them to implement al the other decisions such as promotion, distribution, processes, physical evidence and people. Section 3. 7. 2 will focus on the pricing strategy of higher education institutions. 3. 7. 2 THE PRICING STRATEGY OF HIGHER EDUCATION INSTITUTIONSIn this section, the pricing strategy of higher education institutions will be discussed by defining the term val ue, explaining possible pricing objectives of higher education institutions, explaining usher outs and highlighting the role of determine. terms plays an important role in the marketing mix, quality perception, attracting customers and providing revenue to institutions. Price is the follow of money (or some other item that is exchanged or bartered) that the emptor exchanges for a service product provided by the seller. Lamb et al. (2004570) describe prices as that which is inclined up in exchange to acquire goods and services.The price of a service plays two major roles. Firstly, it influences how much of the service product the customer will purchase, and secondly, it influences whether selling the service will be profitable for the organisation or not (Machado &038 Cassim, 200099). Prices can be seen as the amount that a customer (students, parents or employers) must pay to be educated. The price of higher education institutions are influenced by the subsidy from government as well as donations and the exist of presenting the course, prices of competition and inflation.Price, for students, consists of a monetary monetary value as well as other costs, for example effort cost (completing long establish application forms), psychological cost (stress of enrolling in an institution far from home) and time cost (visiting or attending open years at different institutions) (Kotler &038 Fox, 1995311). Students and their parents are not just interested in the institutions list price (official 93 reading and fees printed in a catalogue), but also the effective price. According to Kotler and Fox (1995312), the effective price is the amount the customer will actually pay for all the educational benefits and value received.Prospective students may obtain it difficult to measure effective price early in the decision process, since effective price can only be known after the student has gone though the application process and has been accepted and financial a ttend to has been allocated. Tuition fees represent only a fraction of the total cost of attending a higher education institution and living cost and other education related expenses must also be considered by students (Anon, 2006b). Diederichs (1987112) found that price plays an important role in students choices of a higher education institution.The first aspect organisations should consider when pricing a service product is to decide on the pricing objectives they want to achieve. Pricing objectives can influence the price of the service product and include maximizing profit (short- or long-term), building market share, maximising long-term customer perceptions of the value of the service product, maximising immediate cash flow, positioning the service product in a certain place in customers minds, and targeting a effrontery segment of the market.Higher education institutions may ensue more than one of these objectives at the very(prenominal) time depending on the situation th ey are facing. A new higher education institution emerging after a merger may aim to position their service product, as well as targeting a given segment and maximising long-term perceptions of value (McColl-Kennedy, 2003270 and Machado &038 Cassim, 2002106-107). Higher education institutions should take into account three factors when panorama prices for their educational programmes Firstly, cost, by determining the amount of revenue needed to cover pass judgment operating expenses Secondly, customer demand, which emphasises that the final price decision is always made by the customer and Thirdly, competition, as institutions have to librate their value and establish their price relative to their competitors. Institutions should always consider the effects of a given pricing form _or_ system of government on enrolment, the nature and mission of the institution, the prices charged by competition and the 94 effect of their prices and price changes on actions of competition (K otler &038 Fox, 1995309).The pricing objective of a higher education institution will also affect its discount policy, as discount influence profit, market share, cash flow and positioning. Once the basic price is established, organisations need to establish some flexibility in terms of that price. push aside can be defined as the reductions to the basic price (Machado &038 Cassim, 2002116). Higher education institutions need to determine and publish their prices (tuition fees) and discounts. pecuniary aid is seen as a form as discount by students.Kotler and Fox (1995310) state that financial aid is not just used to attract students to increase the size of classes, but also to ensure the needed composition of the class to meet diversity objectives. Student aid or financial aid makes it possible for numerous students from low- and middle income families to afford higher education (Anon, 2006b). Cabrera and La Nasa (200010) found that financial aid especially influences students po sitively to select a particular institution and also allows parents to consider a wider range of institutions.This study will include the importance of financial aid in selecting a higher education institution. Diederichs (1987114) found that a higher education institutions price policy should take into consideration the facilities needed, quality of education and competitiveness, as students often use the price of a product or service as an indication of quality. For example, more costly institutions may be viewed as providing better education. Some institutions make use of their price/quality relationship by laborious to raise the prestige and attractiveness of their institution by raising the tuition fees.Higher education institutions must carefully consider the role of price in the marketing mix, as price can be used as a quality indicator and thereby influence the perception of the institutions position. Higher education institutions often offer substantial amounts of financ ial aid to talented students to maintain their competitive advantage. Students and parents are looking for the best overall deal in terms of educational quality and prices (Laurer, 2006).Courant (20064) is of the opinion that higher education institutions prepare students to lead an examined life and should therefore price higher education as an expensive, high value proposition. Wallace (200332) argues that higher tuition fees will enable institutions to improve the quality of education and in countries where higher education is pay or offered for free, education would be held in higher esteem if a price were attached to it. However, Beckett (2005) warns that institutions 95 should be aware that charging top fees may cause institutions to slatternly students and not widen the participation.Wallace (2003) states that universities in France, England, the United States and Germany are facing the same problems with the price of education, as government funding for education is decr easing and institutions have to look at increasing tuition fees. The result is that students in these countries are protesting the price increases. The increased value of a higher education degree, increased research at universities, reduced state funding for public higher education institutions and monopolistic behaviour of higher education institutions are other possible reasons for higher prices (Barry, 199884).Higher educational institutions rely on tuition fees, donors and government subsidies as sources of revenue. As discussed in Chapter 2, changes in the financial environment emphasise the trend of institutions to cut cost, increase productiveness and offer more financial aid to students. Most educational institutions depend firmly on tuition fees to keep operating and pricing therefore becomes very important. Price plays a role in determining who will apply, who will attend, who the institutions will serve, what the institutions will be able to offer and whether the instit utions will meet its enrolment objectives and revenue needs.From the handling it is evident that a pricing strategy is important for education institutions because they depend on revenue to operate, especially in the light of the decrease in subsidies (refer to Chapter 2). Price is part of the marketing mix and should be considered as an element of the institutions strategy planning. When setting price, decision-makers should understand how students perceive price and the importance of price in selecting institutions.According to Cosser and Du Toit (200277), price is an important factor considered in choosing a higher education institution. It is important that higher education institutions know the cost of producing the service, know the price of competitors, identify pricing factors that are relevant to pricing decisions, and decide on a pricing strategy that will attract enough students. It is evident from the preceding(prenominal) that higher education management needs informa tion on the students and market to make effective pricing decisions.This study will provide some insight on the importance of price in the institution selection process. 96 Higher education institutions can have good quality educational services offered at the right price to students, but if students and parents are not aware of these services and prices, they will not consider the institution. It is thus important that higher education institutions communicate with their prospective students and parents. The next section will focus on the promotional or colloquy strategy of higher education institutions. 3. 7. THE PROMOTIONAL STRATEGY OF HIGHER EDUCATION INSTITUTIONS Educational institutions need to effectively communicate with their target market(s) and publics. Institutions must inform students and parents about its goals, activities and offerings and motivate them to take an interest in the institution. To identify and satisfy consumers needs, an institution must have a good understanding of the consumer in order to gain a competitive advantage through its marketing mix (service product, price, distribution, promotion, process, people and physical evidence).Persuasive communication is central to the marketing of service products as features, benefits and values must be communicated to the consumers to influence their purchase behaviour. Everything and every consistency in an institution has a role to play in communication. Examples include the organisations brand name or logo, campus grounds, service product quality, prices, employees, delivery vehicles, buildings, the technology the organisation has at its disposal, the capital the organisation has at its disposal and the organisational philosophy.Kelley and Mahady (20032) are of the opinion that promotion is an element sometimes overlooked by non-profit organisations. They argue that even if an institution offers some of the best programmes and services, these will not be utilised to the fullest if th e market they were intended for has no knowledge of their existence. The remainder of Section 3. 7. 3 will focus on the definition of promotion, the communication process and the integrated services marketing communication (ISMC) mix available for higher education institutions. According to Hawkins et al. 200119), promotion or marketing communication includes advertising, the sales force, public relations, packaging and any other signals that the 97 organisation provides about itself and its products and services. Lamb et al. (2004466) describe the promotional strategy as a plan for the optimal use of the elements of promotion, namely advertising, sales promotion, publicity and personal selling. Many higher education institutions are returning to promotional or communication tools to promote courses in an attempt to maintain and/or expand their market share.The importance of communication can be seen in the establishment of communication departments, more funds that are allocated to marketing and appointing marketing managers or external communication experts to help with promotional activities. Higher education institutions are making use of tuner, television, newspapers, buses, taxis and open days as well as more professional brochures and promotional material as vehicles for communication (Jones, 200241). This is necessary, since higher education institutions can no longer depend on pass rates alone to attract students.In order to utilise the promotional tools to their fullest and to ensure effective communication, higher education institutions need to understand the communication process. Communication involves the creation of shared meaning between participants. The intangibility, inseparability, perishability and heterogeneity of services create special communication requirements and involve the risk of miscommunication that is not so evident in the marketing of goods (McColl-Kennedy, 2003236). Communication can be viewed upon as the transfer of a me ssage from a sender to a manslayer by means of a signal of some sort via a channel or medium.The sender translates his/her objectives, ideas and concepts through language into a message also known as encoding (Strydom et al. , 2000344). The receiver tries to trace the message before he/she can comprehend its meaning and then the receiver reacts or responds to the message (Lamb et al. , 2004326). The disturbances (physical or psychological) that prevent the successful transfer of the message are known as noise. entropy influences all the components of the communication process and places obstacles in the way of effective communication.Higher education institutions are the senders, while the receivers of the message are the potential students, existing students, parents, employers or alumni. For the purpose of this study, the focus is on the students of a higher education institution. This does not mean that institutions do not need to communicate with other publics such as alumni, parents, donors, government or the general public as well. According 98 to Jones (200244) the students ability to decode the message is influenced by his/her past experiences, feelings, emotions, attitudes and perceptions of the institution.Thus, higher education institutions need to fully understand their target market to identify the appropriate intended messages for the target market. The communication process gives higher education institutions the opportunity to influence prospective students behaviour by developing a message that creates awareness, position themselves in the mind of the student, change the students attitude towards the institution, or encourage the student to apply to the institution (Jones, 200245). The most universal communication/promotion objectives are general image enhancement and awareness of the institutions (Kittle, 2000).According to Jones (200243), emotions or feelings also play an important part in the encoding process and it is indispensable that higher education institutions should have empathy for other peoples cultural backgrounds. Higher education institutions need to select a medium that will attract attention, perk up interest and present the message clearly (Kotler &038 Fox, 1995353). Higher education institutions need knowledge about the language of the prospective students, knowledge of forms of communication and general background information about the prospective students in order to encode successfully.The media that will be investigated in this study include printed media ( advertizement in magazines, newspapers or outdoor media), broadcasting media (advertisements on radio and television), direct mail or direct marketing (newsletters and brochures of higher education institutions), body language and direct communication through representatives of the institution (school visits by staff or open days attended by students), word-of-mouth (conversations with alumni, friends or family members), or websites. In Chapter 4 the different media will be further discussed as part of the sources of information used by students.The promotional mix that an institution uses is determined by the student markets expectations and requirements of the service products, together with the other elements of institutions marketing decisions. Machado and Cassim (2002157) describe the promotional mix as the blend of promotional methods used by the organisation to communicate. A huge array of promotion elements exist, such as direct marketing, sales promotions, advertising, net profit and sponsorships. The communication process and the promotional mix elements (advertising, public 99 elations, personal selling and sales promotions) are used by organisations to communicate to their prospective customers. The message that reaches the customer should be the same regardless of whether it is an advertisement on the radio, websites, open days, or a newspaper insert. To ensure the careful coordination of all the p romotional mix elements, organisations must adopt the concept of Integrated Marketing communication theory (IMC) (Du Plessis &038 Rousseau, 2005345). For a higher education institution, this means that the institution coordinates all its communication activities.Zeithaml and Bitner (2000405) suggest that a more complex integrated form of communication is needed for services, hence the ISMC approach as shown in Figure 3. 3. This concept requires a complete communication strategy that involves staff, every interface the institution has with its students, stakeholders and the community at large (Jones, 2002450). Laurer (2006) suggests that institutions must coordinate all the promotional elements so that they meet the needs of students and parents who will pay for their products and services. Figure 3. serves as a visual guide for the discussion