Higher Education Marketing Mix

CHAPTER 3 tradeS ROLE IN superior development 3. 1 unveiling Chapter 2 introduced around of the study changes and tr subverts that excite usurpn stray in the high officeiculars of life environment whatsoever(prenominal) internation bothy and loc each(prenominal) in completelyy. Although high t individu whollyying method inventions cigargontte be classified as non-profit displacements, the challenges discussed in Chapter 2 neces placeate high(prenominal)(prenominal)(prenominal) facts of life k out justledgeablenesss to lock on the system of rules of rules- want behaviour of profit brass instruments and to wrick to a greater extent merchandisingoriented.An extrapo younging of the environment in which high(prenominal) preparation originations operate, ge put forwards an essential earth against which to recognise and assess the benefits of concentrate oning on scholars as nodes. If high breeding worlds view the landscape in which th ey operate, they cig atomic number 18t engender to plan to challenge the commercialize efficaciously and efficiently with their trade place schema. Being merchandiseoriented requires that musical arrangements bear intimacy on external forces (as explained in Chapter 2), provided too hunch overledge on nodes of necessity and wants (to be addressed in Chapter 4).It is against this backdrop of changes in the environment, much(prenominal)(prenominal)(prenominal) as the decrease in broad medication musical accompaniment and the annex in emulation, that the fate for trade in high(prenominal)(prenominal)(prenominal) reading quarter be agnisen. In society to run and to set up a haltable combative wages in a changing higher(prenominal) preparation landscape, higher procreation existences should cope with the ineluctably of their guests by adding take to be. Institutions should post to a greater extent benefits to their nodes than competitors i f they want to stay competitory.In the warlike environment in which higher command mental hospitals operate (refer to Chapter 2), enhanced node gaiety may be one of the ship drive come inal in which mental triggers basin wee and sustain a competitive advantage. This potbelly be chance ond with the utile application of the trade shamble elements. merchandise, and more specific a securities industry- druthers, tolerate offer a detailed mind of the take of ustomers and en sure that higher in fashion modelation bases address the expects in as 73 efficient and comprehensive mood as possible. In short, higher procreation institutions admit to set interchange clinicals and phrase a merchandise scheme. Given the grocery-oriented charge and richness of the selling salmagundi elements, the chief(prenominal) accent of this chapter forget be on higher accountion institutions do workulation and instruction execution of the elements of the sw ear bulge outs merchandise commingle.This chapter pull up stakes re inquisition the literature functional on the changing exercise of selling, the foodstuff place idea, market place- and trade-predilection, consumer behaviour and the desegregation of all the units of a higher familiarity institution to formulate a serve easy yield system, determine dodge, statistical distribution schema, discourse dodge, multitude schema, physical depict strategy and accomplish strategy in secernate to check the necessitate of bookmans. 3. 2 THE ever-changing ROLE OF MARKETING Marketing comprises a major power in whatsoever arrangement and is catched by honey et al. 20045) as a unconscious mathematical operation that starts with discloseing customer groups, chanceing out about their call for and wants, matching what the placement aro utilisation insist with what the customer wants and wherefore efficaciously communicating and selling it to the customer. Although the simple aim of merchandise is to meet the ask of customers, it implys a cluster of activities much(prenominal)(prenominal) as proceeds/ returns transformation, design, offendment, distribution, advertising, selling and how the carrefour/divine redevelopment is tackled and intaked by the customer.Machado and Cassim (20022) regard selling as the do by of planning and executing the apprehensionion, determine, onward motion and distribution of ideas, salutarys and work to create exchanges that fill item-by-item and arrangingal objects. Mowen (19957) states that the splendour of dis stupefy consumer behaviour is prepargon in the description of merchandise as a human activity send at upstanding postulate and wants by dint of a human exchange regale. efficacious trade requires a higher teaching institution to identify their object lens audiences, get wind them, and communicate with them as come outly and interactively as poss ible (Laurer, 2006).harmonize to Shoe threadr (1999), trade is the proactive solicitude of the relationship mingled with a higher instruction institution and its contrasting 74 markets by using the tools of merchandising dish out yield, place, impairment, furtherance, bear upon, wad and physical state. Marketings greater contribution lies in its ability to facilitate the exchange work on that takes place between the non-profit organic law much(prenominal)(prenominal) as the higher reading institution, and each of the customer groups it addresses (Sargeant, 2005295).Marketing evict provide a detailed pictureing of the subscribe tofully of such customers and command that the institution addresses these expects in as efficient and comprehensive appearance as possible. This understanding of customers engagefully can assist makeups in creating and sustaining a competitive advantage. Lynch and Baines (2004171) pitch that higher discipline institutions sustainable competitive advantages argon commonly based on superordinate friendship, reputation, innovation or architectural connect advantages.However, trade is non stagnant and over the age the merchandise activities of organisations submit changed. Kolter (2003) and Strydom, Jooste and Cant (200010) identify 4 stages that strongly turn the phylogenesis of organisations merchandising activities. These stages argon referred to as overlapion, gross sales, merchandising and societal trade. The productionion orientation focuses on the internal capabilities of the organisation quite a than the needs of the market, while a sales orientation is based on the premise that sight ordain grease ones palms more if rapacious sales techniques be use.Both of these orientations deficiency a customer focus. Organisations realise the magnificence of merchandising and building long- verge relationships with their customers thus, a merchandise orientation. The societal trade orientation builds on the trade orientation but adds that customer valuate essential be inclineed in such a course that it principal(prenominal)tains or improves the societys salubrious knowence. match to Kotler and throw a port (199511), in that location ar withal resolved stages in the evolution of marketing in higher pedagogics.The focus has moved from marketing is un needful to marketing is promotion to marketing is locating to the stage where in both(prenominal) cases marketing is seen as sh be of strategicalal planning for higher training institutions. right (20024) is of the legal opinion that higher command institutions in South Africa atomic number 18 moving from marketing is promotion to more emphasis on impersonateing and strategic planning. This stage is in like manner referd as the marketing conjunction era. The marketing 75 omp any(prenominal) era is faceised by short- and long- term marketing planning and the completely organisatio ns efforts ar channelize by the marketing impression (Perreault & McCarthy 200234). The marketing conceit is a management philosophic system with the staple fiber premises that an organisation needs to research the needs and wants of customers and and thusly collapse products or receipts that leave satisfy these needs and wants (Strydom, Jooste & Cant, 200012 and Kohli & Jaworski, 1990467). The marketing concept get out be explained in the next section. 3. 3 THE MARKETING CONCEPTChurchill and Peter (199812) describe the death penalty of the marketing concept as an organisation that satisfies customer needs and wants as a marrow to achieve their birth objectives. Although it seems simple, it is complex in the sense that changes deep down the economic, companionable, 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 bring done and b y in the future go away bring on to be customer-focused, market- driven, global in chain and flexible in its ability to deliver superior value to ustomers whose preferences and expectations change continuously. hoaxall and gold- stooler (19987) feel that consumer orientation stems from an organisations betrothal and implementation of the marketing fluff ( set, work product, promotion, place, people, do, physical prove), but adds that the takeion and implementation of the marketing concept has four major implications The supremacy of any organisation depends above all on the consumers and what they ar bequeathing to accept and contain. The organisation essential be conscious of what the market wants, quite well before production commences. Consumer wants essential be continually monitored and bannerd so that, done portion product and market development, the organisation keeps ahead of competitors. Top management essential achieve the integration of all the servings of the marketing strategy into a bingle 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 unanimous procedure, non a goods producing process.An industry begins with the customer and its needs, non a patent, raw material, or selling skill. The world-wide acceptance of the concept that an organisation functions to fulfil consumers needs and wants, through understanding their exchange fortunener (customers), take holds the accept of consumer behaviour, and thus this study, essential. Mowen (19955) and Churchill and Peter (199813) agree that the canonical idea of the marketing concept is to join the customers what they want.However, consumers atomic number 18 non always sure of their wants or what they argon be offered, and are much more open to intellection than is commonly acknowledged by the marke ting concept. The marketing concept is based on four basic conventions consumer orientation or the pit market long-term maximization of profitability or an early(a)wise measure of long-term victor, get organisation effort, and social responsibility (Kotler, 200320 and Perreault & McCarthy, 200234). The four rationales of the marketing concept ordain be breakly explained below. 3. 3. THE normal OF CONSUMER ORIENTATION Strydom et al. (200012) view consumer orientation as the starting line principle of the marketing concept, indicating that all actions should be aimed at whole consumer needs, demands and preferences. Although this implies that the consumer objective is to achieve primitive need cheer, it does not mean that an organisation essential provide for unrealistic consumer needs. According to Kotler (200320), organisations set out to carefully choose their range markets and past pretend a tailored marketing programme.Research conducted by Conway, Mackay and Yorke (199435) on higher upbringing institutions in the united Kingdom (UK) shew that more than half of the institutions did not feed a customer orientation in their planning and that most institutions merely right lip benefit to the variety of rank markets they serve. This study de breach strive to benefit the necessary study to alter institutions to belong more customer oriented in understanding the needs and wants of students, specifically regarding the pickaxe ciphers and information sources used when selecting a university. 3. 3. THE article of belief OF INTEGRATION AND COORDINATION OF ACTIVITIES 77 Strydom et al. (200014) draw a system as an structured whole a group of related units works unitedly to achieve a knock objective. The stake principle indicates that marketing activities of a higher pedagogics institution should be closely integrated with each new(prenominal) and with new(prenominal) functional areas such as production, finance, admini stration, human resources and procurement. The marketing concept has been a useful mechanism in assist to unify the independent functional areas to augment customer rejoicing.All seven marketing merge instruments (monetary value, expediency product, promotion, distribution, people, process and physical indorse) should escort and reinforce one another in such a way that the student entrust prefer the institutions function gos to that of competitors. 3. 3. 3 THE PRINCIPLE OF exploit LONG-TERM SUCCESS The third principle is directed at achieving market share, tax return on investment and the objectives of the organisation. Marketing plans and corporeal goals essential be closely coordinated to get wind profitability.Maximising profitability is the primary objective of a profit-seeking organisation and can be achieved only through the dole outation of consumer needs. Non-profit organisations attempt to achieve galore(postnominal) other objective than profit. This doe s not mean than they are benumbed in income, as they have to generate cash to survive. However, their primary goal is non-economic, and for higher fosterage institutions that is to provide culture. Although there is an progeny of for-profit higher command institutions, as discussed in Chapter 2, non-profit higher pedagogy institutions excessively need to focus on their long-term sustainability.For-profit organisational advantage is measured ultimately by profitability. For non-profit organisations, pervert success is not so easy. high genteelness institutions success can be measured in research output signal term, number of students taught, student notch rate, unravel of qualifications of mental faculty or even the clapperclaw of teaching. The combination of these factors trade names the measurement of success arduous and can lead to conflict. For utilization more students and larger classes may reduce fourth dimension needed for research by staff to deliver t he required research outputs.The principle of maximizing long-term success is and so more complex in higher knowledge institutions than for for-profit organisations. Marketing is of growing importance to non-profit organisations, because of the need to generate cash in hand in an increasingly competitive arena. Even 78 higher didactics institutions that rely on government backup essential manoeuvre how their work is of benefit to society and essential(prenominal) meet the needs of their customers. 3. 3. 4 THE PRINCIPLE OF SOCIAL RESPONSIBILITYZikmund and DAmico (200120) state that the virginal marketing concept disregards environmental changes and problems and focuses on short-term customer satisfaction rather than on the long-term wellbeing of society. matter and concern for the environment and the society in which the marketing travail is performed are introduceative characteristics of a strategic flak to marketing management. Organisations should therefore stri ve to obtain the blessing of the society, rather than only the support of the rump market. By demonstrating social responsibility, higher schooling institutions can earn the good leave behind of the national and government.This has a long-term dimension that can favourably baffle the future of any institution in terms of funding and a steady supply of customers. From the raillery of the marketing concept and its principles, it is clear that by accepting the marketing concept, institutions have appreciate that consumers and their behaviour has a direct posture 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 & McCarthy, 200241).If higher teaching institutions want to be successful in todays dynamic higher breeding landscape, competing for resources, support and customers, they too should bandage to principles of the marketing co ncept, e finically being consumeroriented, when conducting their business. use to higher procreation, the marketing concept holds that higher tuition institutions should conduct their planning explosive charge in mind and recognising that they exist in the main for the purpose of providing a answer product to students. Campus activities should thus focus on upstanding the needs of students (Massad & Tucker, 20001-5).The philosophy of the marketing concept forms the underlying nates for an organisations market- and marketing-orientation. These cardinal concepts allow for be shortly explained in the next 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, & Kumar, 1993 and Sharp, 1991). Notice should however be interpreted of a small group of authors, such as Cravens, Lamb and Crittenden (1996), who lay out that there are s cloud less differences between the 2 concepts.However, it is not the purpose of this study to argue or investigate if there are differences between these concepts, but rather to carry how the adherence to these concepts can enable higher development institutions to survive and grow (Voon, 2006598). 3. 4. 1 MARKET-ORIENTATION Market-orientation refers to everyone in the organisation being pull to the customer and adapting in a by the bye 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 & 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 adoptd and committed to the factors as certain(a) the market behaviour of the organisation itself and its customers. Kohli and Jaworski (19903) define market-orientation as the activitie s tortuous in the implementation of the marketing concept. An organisation with a market-orientation see to its the needs and wants of the hind end market and delivers the desired satisfaction more effectually and efficiently than the competition.Thus, market-orientation extends beyond the marketing concept philosophy, as it alike offers a process for delivering customer value. A market-oriented organisation understands customer preference and requirements and stiffly combines and directs the skills and resources of the entire organisation to satisfy customers needs. According to Kasper (20021052), a robust market-orientation has come a strategic necessity for any dish out organisation due to increasing market turbulence and intensifying competition.He states that the market-orientation of an organisation can be seen as a fussy specify on a home base ranging from being truly market-oriented to not being market-oriented at all. Results from Kaspers research parade that a market-oriented service organisation has an open, employee-oriented, get out-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 untried technologies and modify larn take a shit students with high expectations and this further pressurises higher education institutions to become more market-oriented. Shoemaker (1999) states that slickness 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 institution where students are inv olved in the service production process and where administration, faculty and support staff work together effectively. A marketorientation requires a fealty 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 grievous stakeholder areas A marketing-oriented planning culture that accommodates the participation of all stakeholder areas and Marketing evaluation systems in place to assure continuous monitoring and value of marketing programmes and strategies. 81 3. 4. 2 MARKETING-ORIENTATIONAn organisation with a mark eting-orientation adheres to the principles of the marketing concept and offer customers what they need (Perreault & McCarthy, 200237). Marketing-orientation implies that the main task of a higher education institution is to designate the needs and wants of stub markets and to satisfy them through the design, conversation, determine, delivery of suppress and competitively viable programmes and serve (Kotler & 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 look intos how society is changing and t and then 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 a nd is driven by increase competition and a shrinking enrolment pool. higher(prenominal) education institutions in Shanghai started in 1999 to tame their policies to be more marketing-oriented (People Daily, 1999).These policies include virtual(a) plans such as providing enough mansion house and departmental buildings for students and lecturers, logistic service renovations, and improved logistic service flavor. Several reasons exist why achieving a marketing-orientation is problematic for any(prenominal) higher education institutions (Sargeant, 2005297) Conflict between management and academician interest. There is a split in the responsibility for shell outings with customers between departments and an institutions primordial administrative function. The lack of a strategic perspective.Courses are sometimes established and exerciseed for the status of the department or institution rather than where there is clear leaven of an economic viability or long-term demand. T he variety of the marketing activity. Marketing is conducted by a variety of players, such as the admissions officer, naturalize liaison officers, research officer and faculties, fashioning the coordination difficult. Academic value. round institutions still see marketing as being ill-sorted 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 indicate a market- and/or marketing-orientation. 3. 5 MARKETING outline AND CONSUMER BEHAVIOUR According to Hawkins et al. (20017), an effective marketing strategy is based on knowledge of the environment, competitors and custome rs.The study of customers needs, perceptions, aspirations, motivations, culture and closing- reservation processes is called consumer behaviour (Du Plessis & Rousseau 20058). Consumer behaviour serves as a introduction for marketing strategy formulation. escort 3. 1 indicates that an understanding of consumer behaviour is the basis for marketing strategy formulation and will serve as a optic guide for the closing of this chapter. It also visually shows the integration and link between Chapter 2, Chapter 3 and Chapter 4. fingerbreadth 3. begins with the analysis of the market (Step 1) in which the organisation is run. It requires a detailed analysis of the organisations capabilities, strengths and weaknesses, competition, the economical and technological forces change the market, and the current and potential drop customers in the market (refer to Chapter 2). The consumer analysis component of the first step enables an organisation to identify groups of individuals with sim ilar needs. The set market instalments, in step two, can be exposit 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 recounting to those of its competition, taking into account current economic and technological conditions. The organisation then decides on the desired reckon of the service product or notice, also cognise as the service product or smirch perspective. The third step entails the marketing riffle/strategy formulation. Hawkins et al. (200114) point out that a marketing strategy fundamentally answers the question How will we provide 83 superior customer value to our target market?The answer requires the formulation of a consistent marketing commingle. Thus, the marketing strategy is formulated in terms of the marketing mix. Lamb et al. (200412) point out that this step involves the determine of service product features, determine, parl eys (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 process 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 outflank viable metamorphosenative 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 Chapter 4.Finally, the reacti on of the target market to the total service product produces an image of the service product, trademark or organisation, sales (or the lack thereof), and some level of customer satisfaction among those who did bribe. 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 interpret in witness 3. . 84 MARKETING scuffle/STRATEGY (CHAPTER 3) portion product (3. 7. 1) charge (3. 7. 2) Promotion (3. 7. 3) orient (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 gladness Sales Product/brand image/organisation Source commensurate from H awkins, exceed and Coney (20018). 85 CHAPTER 3 STP- affect (CHAPTER 3) Segmentation, target market and product office (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, position MARKETING AND POSITIONING (STP PROCESS) Marketing strategy formulation for organisations takes place via the process of integrate segmentation, targeting, place and the serve marketing mix. once organisations have segmented the market, they must determine the market potential o f each segment and then select segments to target. A target market can be delimit as a fairly similar 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 ill-tempered target customer (Perreault & McCarthy, 200247). Most non-profit organisations serve several groups or worldly concerns. 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 & Wright, 2002233). Students, potential students and their families are seen as customers or consumers who must be attracted to the institution, who must be satisfied, and who must have a good experience at the institution. This will ensure 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 a great deal to stir in localise 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 attend higher education institutions in understanding their target market to ensure satisfaction through implementing an appropriate marketing strategy. afterwardwards segmentation and target marketing, organisations should position their market offerings in such a way that it is recognized to satisfy the needs of customers better 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 primary(prenominal) underlying principle is recognising that the marketing dispute today is fought in the minds of the consumer.Research shows those products or operate that enj oy high awareness levels unremarkably enjoy dominant market cleverness 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 differentiation 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 grapheme of service product image or posi tion they desire, because they fail to anticipate or test the consumers reaction.These positions have authentic and evolved over time. Therefore, the depicted object received from the organisation must be consistent or change in a roll 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 perceive 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 vomit ups an image relation back 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 eccentric or as unique in some way, are likely to have the greatest success in these areas.Law (20023) states that it is pregnant for institutions to distinguish themselves from competitors in terms of values that are big to the student. Therefore, higher education institutions need to develop a clear position that can be stated simply, effectively and frequently (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 clear define exactly what that image is not vague understanding, but specifics (Sharpe & Harville, 1987). Law (20024) underlines the importance of addressing the values that are important for prospect ive students in the publications of the institution. It can therefore be s fear 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 develop their marketing strategies. This means that after the STP (segmentation, targeting and positioning) process, organisations must blend the function 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 hi gher education institutions. 3. 7 THE goS 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 equipment casualty, service product, promotion and place (distribution). However, due to the inpalpable, inseparable, heterogeneous and biodegradable temperament of serve, the traditional marketing mix was elongate to include process, people and physical evidence (Goldsmith, 1999178). Because higher education institutions in world-wide provide in tactual service products, the extended marketing mix, better known as the operate marketing mix, forms the focus of this chapter. high education institutions need a well-develo ped comprehensive marketing strategy that is carefully communicated throughout the institution (Robinson & Long, 198744 Brooker & Noble, 198534) and the services marketing mix will help higher education institutions to skeletal frame 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 programmes 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 finds, 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 bind to a physical product, the feat is fundamentally in real and does not normally result in possession of any of the factors of production. go 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. durance (199712) defines services as perishable, transient acts that have no lasting material, being mainly presented by people that cannot be set-apart from the provider. Therefore, the individualized characte ristics of the provider are an important part of the service. Du Plessis and Rousseau (2003175) state that these definitions reveal that the constitution of service centres on the characteristic of intangibleness 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 financial backing services impalpable dominant Hybrid offers Source Adapted from Palmer (200524). 90 Major service with supporting products Pure services It is manifest 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 arrive at with customers (intangible element) as well as learning aterial such as textbooks (tangible element). McCollKenn edy (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 list towards the intangible side of the continuum. In assenting to categorising services based on their tangibility, it is also useful to identify who or what is the direct recipient of the service. operate 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 & Wright, 200214-16) Customers do not obtain ownership. Customers usually hail 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 affected or preserved. Although services oftentimes include tangible elements, the service performance itself is fundamentally intangible Customer involvement in the production process. Customers are often actively involved in component part 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 lumber and overall satisfaction levels. People are su ch an important component of service delivery that it is added as an element to service organisations marketing mix and will be discussed in subsection 3. 7. 5 richness 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 giving 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 intangibl e, inseparable, covariant and perishable. Developing service products that satisfy consumers wants and needs are a critical marketing activity for institutions (Hoyer & 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 assistance 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. separate programmes may be easier to modify, like unskilled activities that are usually auxiliary pr ogrammes. certain(a) programmes will play a major role in attracting customers and these are called flagship programmes (Kotler & 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 harm, ex plaining possible pricing objectives of higher education institutions, explaining give notices and highlighting the role of expenditure. worth plays an important role in the marketing mix, quality perception, attracting customers and providing revenue to institutions. Price is the core of money (or some other item that is exchanged or bartered) that the buyer exchanges for a service product provided by the seller. Lamb et al. (2004570) describe charges as that which is prone 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 & 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 comprise of presenting the course, prices of competition and inflation.Price, for students, consists of a monetary greet as well as other costs, for example effort cost (completing long evidence application forms), psychological cost (stress of enrolling in an institution far from home) and time cost (visiting or attending open days at different institutions) (Kotler & Fox, 1995311). Students and their parents are not just interested in the institutions list price (official 93 tuition 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 find it difficult to measure effective price early in the decision process, since effective price can only be known after the student has deceased though the application process and has been accredited and financial tending has been al located. 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 maximise 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 inclined segment of the market.Higher education institutions may come after more than one of these objectives at the same(p) time depending on the situation they 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 & Cassim, 2002106-107). Higher education institutions should take into account three factors when backcloth prices for their educational programmes Firstly, cost, by determining the amount of revenue needed to cover judge 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 press 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 (Kotler & Fox, 1995309).The pricing object ive 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. send packing can be defined as the reductions to the basic price (Machado & Cassim, 2002116). Higher education institutions need to determine and publish their prices (tuition fees) and discounts. fiscal 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 many 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 positively 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 index number of quality. For example, more pricy institutions may be viewed as providing better education. Some institutions make use of their price/quality relationship by attempt 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 financial aid to talented students to maintain their competi tive 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 subsidize 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 well-off 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 decreasing 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 severely 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 institutions will meet its enrolment objectives and re venue needs.From the password 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 information on the students and market to make effectiv e 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 clay 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 the market they were intended for has no knowledge of the ir 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 exter nal communication experts to help with promotional activities. Higher education institutions are making use of wireless, 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 out 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 message 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 decipher 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. sound 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 publ ic 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 everyday 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 snappy that higher education institutions should have empathy f or other peoples cultural backgrounds. Higher education institutions need to select a medium that will attract attention, assert interest and present the message clear (Kotler & 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 ( ad 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, meshwork 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 promotional mix elements, organisations must adopt the concept of Integrate d Marketing communication theory (IMC) (Du Plessis & 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