
Developing a higher education marketing paradigm
Marketing Segmentation: Making the match between institutional "product"
offering and target audience
by Bob Topor
1998
Marketing is exchange
The process of evaluating the service offering as well as the target
audience to whom the exchange offering is directed is the PROCESS of
marketing. Understanding the exchange offering (service, "product," or item
to be marketed) as it is perceived by a target audience is key to marketing
success. Understanding target audience perceptions of competition as
compared to perceptions of offerings from your academy helps to complete
marketing's cyclical process.
Divide and conquer!
Evaluating and organizing attributes of the exchange offering, researching
attributes as they are perceived by target audience in relation to
competition is crucial. Developing strategies, both marketing and
communications, based on marketing research information is an important
part of the overall higher education marketing paradigm. Segmenting, or
dividing audiences based on common characteristics, is necessary in order
to deliver the offering and its attributes in ways that are significant to
the potential receiver.
Communicating these attributes, as perceived by a target audience member,
in terms and ways that are meaningful to her or him is particularly
important. Finally, evaluating aspects of the marketing exchange process is
necessary in order to plan to execute the same or equivalent offerings.
This cyclical, evolutionary process is the essence of marketing.
Balancing these variables, developing a paradigm that allows each aspect of
the marketing project to remain in control and balance is the
responsibility of the higher education marketer. Market segmentation,
dividing, understanding, and creating cohesive sets of target market
audiences should play a key part in your marketing efforts. It's the best
way to begin to dissect the often complex set of variables one finds in
marketing higher education.
Key segmentation concepts
Target audience segmentation assumes heterogeneity in users' preferences
and, ultimately, choices for services and offerings. Research has verified
and validated the accuracy of using a market segmentational approach. In
fact, recent research suggests ways to segment markets (former, current and
potential) that have become quite esoteric-ways that begin to address the
psychology of the target audience; going well beyond simple numerical and
demographic characteristics.
Preference heterogeneity for services and offerings can be related to
either person (target audience) variables or to situational variables (type
of offerings, institutional attributes, functional aspects of the "product"
being marketed). The ability to classify, differentiate and segment
attributes without giving up market segment cohesiveness remains a key idea
to the higher education marketer.
Variables for target audiences may focus on demographic characteristics,
psychographic (lifestyle) characteristics, service usage, loyalty to
institution, etc. Increasingly, due to the development of the personal
computer, segmentation information is available in previously unimaginable
ways.
Segmentation may focus attention on perception of values and perceived
quality and preferences based on interaction experience(s). Frequency of
interaction is a contributor to target audience perceptional evolutionary
positions. This idea of exposures and frequency of exposures will play a
more and more important marketing role as you focus attention on
understanding perceptions of your market segments.
Institutions may decide to react to, or possibly produce, preference
heterogeneity by modifying offerings' attributes including price-actual
monetary costs or expenditure of time and effort on the part of
users-promotional strategies, location of offerings, etc. The fact that the
provider is able to modify offerings based on users' perceptional analysis
provides heretofore unavailable opportunities for marketing. Historically
this has been a very difficult "pill" for higher education to swallow. The
ability to achieve product significance based on target market research
will become more and more important as audiences shrink and pressures
build. You may find that old attitudes and encumbrances give way to new
approaches ("product" analysis).
Advantages to the academy: productivity
Higher education academies should be motivated to research, plan and
execute market segmentation if the net result (advantage) exceeds what the
result would be without such modification and input effort. This idea of
productivity, benefit, achievement and related accountability is important
to recognize, especially for academies suffering from declining pools,
diminishing resources, budgetary problems, tightening markets (development)
or reduced opportunities.
An institution's modification of its offerings/services/marketing mix
includes service aspect addition/deletion decisions as well as the
repositioning of current services. The idea of a "mix" of offerings and the
ability to arrange, in hierarchical order, the marketing effectiveness for
each mix component (as perceived by target markets) is a fairly new idea
for higher education.
Use competition to know yourself
Market segmentation, perceived services attributes, institutional image,
positioning of the academy as it relates to audience perceptions of your
school in comparison to competing institutions, form important parts of
your marketing mix. How well you understand your marketplace, your
offerings, perceptions and attitudes of external audiences, related
strategies, internal realities and the competitive environment in which you
find your academy play an important part in forming the basis of your
marketing paradigm (plan) and resultant actions.
Nothing is certain but change
It is important to note that this idea of a marketing paradigm based on
target audience segmentation is not static but ever-changing. Factors of
many sorts can affect the balance. The only "given" is the fact that change
is inevitable and on-going. What you did yesterday may not be appropriate
for today. At this point in this newsletter article you may be tempted to
think "How will I ever be able to succeed given the fact that there seem to
be so many uncertainties?" That's where the idea of marketing segmentation
comes in.
Rather than thinking of your audiences as some sort of undefined melange of
potential users, attendees, donors, students, grantors, supporters or
benefactors, you are able, using market segmentation, to divide and define
external and internal targets. As well, and possibly more importantly, you
are able to use these segmentation ideas to define attributes of your
institution, its offerings, services, "products," and outreach efforts as
you target each segment. Marketing segmentation cuts both ways; externally
(target audience definition) and internally (product and service definition
as perceived by targeted audiences). The wise marketer knows that it's as
important to understand internal offerings and the provider (your academy)
as it is the target audience member, her and his wants, needs and
perceptions.
New research techniques such as conjoint analysis provide the higher
education marketer with opportunities to test the potential effectiveness
of a selected class of marketing strategies. Using information focusing on
preferences and comparative attribute evaluation research tools allow for
evaluative framework. The development of user friendly and relatively
inexpensive software provides opportunities for the application of conjoint
analysis that includes a variety of variables in choice simulation and in
user segmentation. This sophisticated research process allows for searching
the best profile in what may be hundreds of thousands or even millions of
possible attribute-level combinations. The degree of sophistication and the
level of possible combinations at first may seem mind-boggling. However,
this form of research (conjoint analysis) allows you to develop a marketing
plan and an action strategy much more scientifically, much more defendable,
with a much greater potential for success. As well the outcome can be
evaluated and refined as marketing efforts continue.
For decades people working in higher education have been stifled by the
apparent complexity and political difficulty associated with the academy.
"Ivory towers" have long been the butt of many jokes suggesting academic
thinking that is lofty and, often, without apparent benefit. The use of
target audience segmentation provides a powerful way to break through that
seemingly impenetrable veneer. It gives you, the educational marketer, a
tool that has its basis in reality; one that is powerful and very difficult
to discount!

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