marketing higher education

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!

marketing higher education


©1999 TOPOR CONSULTING GROUP INTERNATIONAL