Trends, insights and research to inform growth and innovation strategies in international higher education.

October 31, 2009

Education Branding: Positioning is Primal

What image comes to your mind when you think of IIM and IIPM (or Harvard and University of Phoenix in the US context)? Even though one might not have been a part of either IIM or IIPM, one would have fairly consistent opinions about these institutions. Such is the nature of education branding--deeply etched in the minds of the people. Its intangible, highly perception driven and builds over time.

Jack Trout said that "positioning is how you differentiate yourself in the mind of your prospect." This is primal to the education marketing. Of course, positioning is just the beginning of the branding, it also follow-through by delivering whatever is promised.

Indian private education sector has grown rapidly in last decade and it is expected to grow at annual rate of 15-20%. This means more clutter, competition and challenges in differentiating. In this context, institutions should start focusing on strategically building their educational brands as it takes significant investment of time and resources to get the desired results. Given below are few recommendations for institutional brand building:

1. Understanding students' behavior and their decision-making process: Decision-making for pursuing higher education is involves complex buying behavior and high levels of involvement that result from expense (time and money), significant brand differences, and infrequent buying (Nicholls 1995). This process is further complicated by the inherent gap between students' aspirations with ability. While majority aspires to join IITs, only a handful would be able to finally make it. Likewise, their is a hierarchy of choice (compromise) of institutions and students search for their best fit. This leads to the next point--where do you figure in that search list of student and why?

2.Segment and position: Most institutions do not have a conscious and well-thought plan of action about what is their target segment and how do they want to reach this segment? Lockwood and Hadd in their article Building a Brand in Higher Education state that "Institutions that want to actively manage their education brand must first consider how the marketplace perceives their brand promise." For example, IIM are prestige enhancing institutions while IIPM is a revenue maximizing institution--very different segments, very different positioning.

3. Leverage the power of association: Education is a knowledge service and hence people associated with the institution are the most important brand asset. This includes borad members, administrators, faculty, students and alumni. This is especially important for the institutions which are prestige seeking as compared to revenue maximizing. For example, ISB and GLIM have fast-paced their reputation building process by leveraging the power of associating with leading corporate leaders, global universities and star professors.

4. Bridge the gap between promise and delivery: Finally, in an environment where perceptions are shaped by rankings and online social media, institutions tend of overpromise their internal capability and underestimate the influence of external factors. Most institutions fall short of delivering their brand promise resulting in dissatisfied product and customer. (education is again unique in the sense that student is both the product and the customer of the service). Thus, institutions need to consciously work on building supporting systems and processes to deliver the experience.

Dean Ajit Rangnekar of ISB in an interview with Business India identified the biggest challenge for a new institution as the "absolute clarity on how it [educational institution] intends to position itself in the market". He advised "a new institution to stake a new, real position (not an advertisement creation) that clearly distinguishes itself from others."

Positioning is central to the process of education branding and institution building. In these times of changing expectations, even institutions which have been in existence for a while, may have to reposition themselves. Likewise, new institutions should systematically study their segment and position themselves somewhere in this spectrum of pretige enhancing and revenue maximizing approaches. This requires clear articulation of positioning strategy so that institution can build a coherent and successful brand over time.
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October 17, 2009

For-profit, online education and private equity

The synergy between for-profit education, online education and private equity has worked well in the US education market where they all have served as a catalyst for each other. A recent article in the USA Today states that "Online education is a growing industry in the United States with estimated revenues of $12 billion at a dozen or so for-profit companies that provide primarily online learning." This sector had been witnessing double digit growth (nearly 20%) and achieved 13% growth last year. For-profit institutions are aggressive marketing machines with nimbleness of adapting to the demands of the economy by innovating and offering new courses. For example, the recent ad campaign of Kaplan University clearly questions the value of conventional educational model.

Undoubtedly, growth of for-profit institutions in the US indicates that there is a segment that needs flexibility, technology and career-oriented education. But, there is also some of criticism about the sector including inferior academic preparation of the graduates and reports of unscrupulous and unprofessional activities. A blog on Wall Street Journal also highlighted the perils of a private equity backed education. It states that the performance of three private equity led education companies which went for IPO within last one year are now showing lackluster performance.

Trends in the US for-profit higher education has lessons for the Indian private higher education sector too. Online higher education driven by private investment can solve immense problems of:
- access to higher education as it leverages power of technology for scalability and reach
- skill gap as it may offer courses which are aligned with the market needs
- availability of capital as government can not provide for all the funding

However, the biggest challenge for India remains the policy framework which does not recognizes "for-profit" education. This is limiting the prospects for innovative forms of online learning delivery and funding from private equity which would like to fund scalable and efficient ventures.

There is an increasing sense of optimism in Indian among emerging models of formal and informal educational enterprises which are gaining attention of investors. Manipal Universal Learning (administrative arm of Manipal Education) is one interesting and effective model which is exploring IPO.

There are also implications for designing and delivering an offering which optimizes affordability, prestige and flexibility. For example, U21Global is the only venture with some visibility in the for-profit online higher education space in India (Manipal owns 50% of U21). However, U21Global is under pressure to prove its value after eight years of launch.

More than ten years back, The New York Times covered a story about the emergence of for-profit online learning model in the US. Since then it has seen some high profile failures like Columbia's Fathom and other mega successes like Kaplan Higher Education. This clearly indicates that it is primal to get the business model for for-profit education correct. Prof. Fried in his recent article on the future of for-profit higher education concludes that "Higher education is a large, mature industry that is being reshaped by innovation. While some of the innovation is in technology, the primary innovation is in business models. For-profits are at the fore-front in developing and implementing these innovative models."

Likewise in India, apart from the supportive regulatory and investment enviornment, ability to create a sustainable and competitive business model, would distinguish between success and failure of the synergy between private equity, online learning and for-profit education.
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October 07, 2009

Education: The IBM Way

IBM Smarter Planet initiative notes that the world continues to get smaller and flatter, and now the planet needs to get "smarter." It highlights the need to solve some of the most pressing problems of the world by leveraging technology.

Education is one such domain which is getting "smarter" by technology and has intricate relationship with the overall improvement of quality of life. IBM's approach to develop Education for a Smarter Planet emphasizes that "smarter education will reshape learning not around administrative processes, but around the two key components of any education system: the student and the teacher." This is important as it suggests that next wave of efficiency in education will come from adaptablity of learning processes instead of inflexibility of unversity administrative systems.

The Future of Learning paper identifies five key challenges (see Figure) which impacts students, workers and institutions.

One of these five challenges is preparing talent for the service economy. While the economy and technology is changing at a fast pace education systems and learning processes have lagged behind. This is resulting in gaps between the knowledge and skills required by the economy and what is delivered by the education system. According to a McKinsey report "The growing complextity of economic activity seen in, for example, global supply chains, just-in-time production, and increasingly precise customer segmentation and channel strategies, has led to higher demand for advanced skills." It adds that "Education is the most important mediator of future labour and supply and demand."

In line with meeting the demand for the future skills and talent for the service economy, IBM is also advancing an interdisciplinary initiative of Service Science, Management, and Engineering (SSME) which focuses on “the application of scientific, management, and engineering disciplines to tasks that one organization (service provider) beneficially performs for and with another (service client)” (Spohrer, et al.).

As a part of my PhD dissertation, I developed a competency-based curriculum for a master’s program in SSME. Here I surveyed industry professionals and faculty members to identify a competency model for service science professionals and developed a curriculum blueprint that may deliver required comepetencies.

Education is integral to the human capital development and increasingly technology is catalyzing the process of change. IBM Smarter Planet initiative for education focuses on improving quality of learning and talent, and raises important issues, and proposes relevant solutions. However, it would be interesting to see how IBM brings the change and implements its approaches to create a smarter planet.
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October 04, 2009

Innovation Universities in India: Research and Quality Gets Attention

The XIth five-year plan (2007-2012) envisages establishment of 14 innovation universities in India, aimed at world-class standards. The concept note on innovation universities states that "These Universities would be at the fount[sic] of making India the global knowledge hub and set benchmarks for excellence for other Central and State Universities. The first and foremost criterion for a University to be termed world class is the quality and excellence of its research, recognised by society and peers in the academic world."

It is encouraging to see that finally research, quality and innovation are gaining attention in education policy and investment from the Indian government. The concept note emphasizes on two primary "innovative" aspects 1) need of more reliable and credible admissions processes and 2) autonomy in administration, teaching and research. Both these factors are deeply intertwined with the political control and it would be interesting to see how much of the concept note's recommendations are actually implemented by government.

To implement the plan in a more feasible and faster manner, government is also considering establishing some of these 14 universities using private public partnership model. The minister of education, Mr. Kapil Sibal, also plans to reach out to globally reputed institutions and forge academic and research partnerships for establishing these innovation universities. Attracting private investment and partnering with global universities could definitely serve as catalyst for establishment of innovation universities.

While the concept of innovation universities is very encouraging for Indian higher education, it has its set of challenges and limitations. For example, the execution of this project is not an easy taks in terms of raising resources and allocating them to efficient use. There are others who critique the proposal of innovation universities and suggest that there is a need to raise the quality of all universities gradually instead of few universities radically.

There is a no doubt that Indian higher education is in dire need of exemplars of quality and research beyond IITs and IIMs. Proposal to establish innovation universities is a positive step and will create competitive pressure for top private and public universities to integrate research and quality in their academic offerings.
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