critical issues in marketing assignment (actual)

UGB 309; Critical Issues In Marketing; Michael Winship

Critical Issues In Marketing

Module Code; UGB 309

Case Study – Higher Education

Name; Michael Winship

Student Number; 090993152

Module Tutor; Joel Arnott1


Table of Contents

List of Appendices Page Three

1.0Introduction Page Four

2.0Main Issue one – Value Page Five

2.1 Graduate Unemployment Page Six

3.0Main Issue Two – Customer Relationship Management Page Eleven

4.0Main Issues Three – Market Orientation Page Fourteen

5.0 Conclusion Page Sixteen

5.1 Three main issues of marketing for higher education sum up Page Eighteen

6.0Bibliography Page Nineteen

7.0References Page Nineteen

7.1 Websites Page Nineteen

7.2Journals Page Twenty One

7.3 Newspaper / Magazine Articles Page Twenty Two

2


List of Appendices

Figure 1.1 Youth Unemployment

Figure 1.2 Higher Education Income

Figure 1.3 Doyle Value Ladder

Figure 1.4 UCAS Application Data

Figure 1.5 Unskilled Workers Unemployment

Figure 1.6 Sources of Income for HE Institutions

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1.0Introduction

‘Universities are becoming increasingly angry about the government's assault on

academic values and its indifference to the social consequences’ (Guardian.co.uk)

‘European HE suffers from efficiency problems but offers wide accessibility to students

from all backgrounds’ (Education Economics. May 2011)

This report is written amongst a backdrop of higher education reforms that have seen

fee rises in much of the UK and led to a wide range of cuts in the higher education

sector by the UK Government as part of a comprehensive spending review. In light of

the spending review cuts many higher education institutions have decided to not offer

particular courses and has led to a restraint on the number of students they can take on.

The aim of this report is to look at some of the critical issues of marketing that are

affecting the higher education sector in the UK and to examine why these are affecting

the sector. Comparisons will be made in this report with other countries who offer higher

education to try and make some recommendations as to what the UK needs to do in

order to try and remain competitive to potential students from outside of the UK.

In 2012 higher education is regarded as a luxury by some simply due to the amount that

it costs to go to university and study for a degree. The current system that allows

students to pay back tuition fees and loans once they are earning over 15,000 a year is

heading for an overhaul but is it really worth the overhaul in tuition fees and the

repayment system in light of increased effectiveness in other education system around

the world?

Recent unemployment figures in the UK have now raised the importance of gaining an

edge in an ever competitive job market which a higher education qualification will be

able to help with. Whilst the last set of employment figures saw a drop in

unemployment this looks to be a temporary reprieve.

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2.0Main Issue One – Value

The first main issue of marketing for this report is value. Value plays a huge part in

university life for many students.

Value can be defined by many different authors as the following;

Definition Author Journal Reference

The Value construct has

become more prominent in

marketing academia and

practice

Eggert and Ulaga Customer Percieved Value

(2002)

Value is considered to be

the central point of creating

competitive advantage and

long-term success of

business organisations

Khalifa Customer value: a review of

recent literature and an

integrative configuration

(2004)

Although definitions vary

slightly across study

contexts, relationship

quality is typically assessed

through some combination

of commitment, satisfaction

and trust.

Eggert and Ulaga Relationship Value and

Relationship Quality (2006)

Value has played a key role in the higher education debate as many people are asking

whether higher education is value for money, with some universities charging up to

9.000 a year for an undergraduate degree. It is now cheaper to study for a postgraduate

degree then a first degree in the UK although this is different in Scotland and Wales

where students who are from the area pay no fees or reduced fees.

(www.timeshighereducation.co.uk/)

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2.1 Graduate Unemployment

Value in higher education is an ever growing debate as more and more people are

asking whether the rise in tuition fees is worth the investment as there is no guarantee

of a job once you have completed your degree. Recent figures from the office for

national statistics which can be seen in figure 1.1 illustrate this point.

Figure 1.1 Graduate Unemployment

www.ons.gov.uk

Figure 1.1 shows that over the course of the last couple of years with the impact of

spending reviews by the UK government and the double dip recession that has hit the

UK (Guardian.co.uk) graduate employment has fallen to a level with non graduates a

sign that employers believe having higher education qualifications is not as important as

it once was.

‘Around one new graduate in every five available to work is unemployed’

(www.ons.gov.uk)

6

http://www.ons.gov.uk/


Figure 1.2 Higher Education Income

www.hesa.ac.uk

Figure 1.2 shows an important trend in that most revenue for universities is generated

through full time undergraduate students from home and EU countries. This figure

would support the argument for higher tuition fees in the UK as if most income is

generated through this way and universities need more money in light of spending cuts

this would be the sensible and logical way. However in different counties of the UK

other types of students provide the most form of income for universities. The question

that can be raised in light of this figure is whether there is the need for tuition fees to be

risen by so much in light of how much revenue is generated from full time courses.

7

http://www.hesa.ac.uk/


Figure 1.3 Doyle’s Value Ladder

Customer Innovation

Deliver economic value to the customer

Quality product with excellent Service

High-quality product

Product that meets requirements

Added Value

Price and Competition

Figure 1.3 shows Doyle’s value ladder which is highly applicable for universities in the

2012 climate with a high amount of competition between universities this ladder is

crucial in making sure that students are aware of the value that their chosen university

offers them.

2.2 Implications of Value for HE

The implications of value for higher education institutions within the UK have already

begun to hit. The rising cost of tuition fees appears to have put potential students off

from undertaking a higher education course.

‘The number of applicants overall has fallen by 6.4%. This is a more marked fall than

last time tuition fees trebled, in 2006. Then, when fees rose from £1,000 to £3,000,

applications fell by 4.5% for applicants from within and outside the UK. The following

year, applicants rebounded by 7.1% and after that, in 2009, applications were up by

10%’ (Guardian.co.uk)

Figure 1.4 shows that applications for university are down by around 6% in light of

higher tuition fees a sign that people believe higher education is not as valuable and as

affordable as once was.

Figure 1.4 UCAS Applications Data

8


Docs.google.com

Some countries around the world are also questioning whether a university degree is

still worth it. One educational establishment Cedefop believes that by 2020 only 37% of

available jobs will require a higher education qualification. (worldcrunch.com)

In light of what has been mentioned about value being a critical marketing issue towards

higher education a university degree can still be considered a worthwhile investment in

light of recent unemployment statistics surrounding unskilled workers. The issue of is

university worth the investment was also highlighted in a recent newspaper article (The

Times Newspaper, May 2011) which wonders why over the last forty years

governments have become less clear about the purpose of higher education in the UK.

This article also raised the point that the ‘young will question whether 9,000 a year is a

justifiable investment’

Figure 1.5 shows a recent figure surrounding employment of unskilled workers, it shows

that 14% of unskilled workers are out of jobs, it shows the unemployment rate in a

number of different areas of the European Union.

Highlighting the issue that a degree can still be considered a good investment for future

careers although more work is needed to try and convince those who have been put of

applying for university due to a rise in tuition fees.

Figure 1.5 Unskilled Workers Unemployment

9


www.cedefop.europa.eu

Figure 1.6 Sources of Income for HE Institutions

www.keynote.co.uk

This chart above in figure 1.6 is different to figure 1.2 as this chart details how and

where HE institutions obtain their funding from. It shows that in the most recent figures

that were available from 2004/2005 that most universities obtained most of their funding

from council grants. This was the most popular way for universities to find money ahead

of research council and other sources.

10

http://www.cedefop.europa.eu/


3.0Main Issue Two – Customer Relationship Management

There have been a number of different definitions used over the years to try and define

what customer relationship management is


Customer relationship

management (CRM) is a

set of practices that provide

a consolidated, integrated

view of customers across

all business areas to

ensure that each

customer receives the

highest level of service

Seeman Using information systems

to improve the student –

school relationship

Relationship marketing

shifts the focus of the

marketing exchange from

transactions to relationships

Rowley Building Brand Webs

Customer relationship management is important in everyday business let alone just in

the higher education sector. In higher education the relationship between the university

and the student is greater than some people may think. The relationship between

university and the student starts way before the student even enrolls at university and

normally starts when a student is deciding what university to go to. Once a relationship

between a student and a university has begun it is very unlikely that a student will

choose to go to another institution and will continue the relationship through university

life.

In 2012 the relationship between a student and the university that they enrol at is placed

under more emphasis in order to try and find out whether the cost of tuition fees are

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worth paying in order to receive a good standard and level of education. Recent reports

have indicated that since the last rise in tuition fees in 2006 the level of teaching given

to students has not changed and the rise in tuition fees back then was not needed. The

same amount of concern could be given in today’s debate into the cost as will the rise to

9,000 a year provide more teaching time and more support it is unlikely with the amount

of teaching each specific lecturer has to carry out. (BBC News)

Customer relationship management between the student and the university is one of the

many factors of university that is crucial to maintaining the bond and ensuring that both

the student and the university can get what they can out of the relationship. Essentially

the student wants the university to be able to help them be able to pass and graduate

although many people have questioned how teachers can motivate students and

themselves when the future for higher education looks bleak. (Times Higher Education)

Some universities face losses meaning that some courses may not continue to be

offered to potential students which hinder the relationship between the university and

the student, prompting the potential student to look elsewhere for the course that they

want to to study. (Times Higher Education.co.uk)

A diverse range of applications from students from different countries also has hindered

the customer relationship between the student and the HE Institution as different

cultures need additional support and more support then home countries may need.

In order for universities to continue to remain competitive the relationship between

themselves and students needs to be developed to ensure that all students are

receiving the help and support that they pay their tuition fees for. Some students may

be put off from university but this is one way in which students may think about the

positives about higher education.

Figure 1.7 Overseas Students in Full Time Higher Education in the UK

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www.keynote.co.uk

Figure 1.7 showcases the amount of overseas students who are studying for a HE

qualification in the UK what is symbolizes is that with an increase of student who are

from overseas at UK HE institution this puts further pressure on the already negative

impact of relationship management between the student and the university.

What can be said is that the quality of higher education in the UK shows signs of being

for the better as recently it was reported that the UK higher education system is the 10 th

best in the world. (BBC News) This allows for people from overseas nations to want to

use the UK’S higher education system for a great quality course to further their career

and academic qualifications.

4.0 Main Issue Three – Market Orientation

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The culture that most

effectively creates the

necessary behaviours for

the creation of superior

value for buyers, and, thus,

continuous performance for

the business.

Slater and Narver The effect of a Market

Orientation on a Business

Profitibility. (1990)

The basic principle is

adapting to the market

environment

Kholi and Jaworski Market Orientation; The

Construct, Research

Propositions and

Managerial Implications

(1990)

Market orientation is a big issue for Universities in 2012 and going forward the rise of

tuition fees and government spending cuts has meant that MO is now a lot different

from the last time tuition fees went up in 2006. Kholi and Jaworski stated in 1990 that

the basic principle to market orientation is ‘adapting to the market environment’, the

market environment for universities is tough. A lot of competition means universities

now have to offer an array of benefits and services for students to want to use that

university. The first week of university for any student i.e freshers week is normally the

starting point to offering the student what they are after and trying to ensure that they

can beat what the market is offering them.

Slater and Narver mention in the effect of a Market Orientation on a Business Profitibility

journal how market orientation is all about the culture that ‘creates behaviours for the

creation of superior value’ universities can respond to this by through the societies and

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student union that offer events for students outside of the normal curriculum and

timetable for lectures and seminars. They can also respond to this through the vast

array of choice students have when picking certain subject and also when picking

module choices. Module choices can happen through certain courses at university such

as generic courses.

In 2012 with the current economic climate as it is universities face more and more

pressure to try and adapt to what it is that there students are wanting. The news is filled

with doom and gloom about the economy and how businesses are going to the wall with

the consequences of the double dip recession which is a sign that not all families will be

able to cope or even afford some of the huge amount of debt that their children are

likely to get into as a result of entering higher education

5.0Conclusion

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This report into higher education in the UK and beyond has shown what the critical

areas of marketing are in terms of higher education. It can be said that all of the three

main critical issues identified within this report play their own part in being significant

enough to the higher education sector. Arguably the most important critical issue

however is value as the argument to whether universities can provide value for money

will continue for many years after this report has been written. The issue of 9,000 a year

for tuition fees will continue to remain controversial in light of other countries that can

provide a higher quality of education at a much cheaper rate. Customer relationship

management is also a major issue for higher education with more and more students

wanting a service and teaching that is going to justify paying the 9,000 a year in tuition

fees.

Higher education in the UK remains more of a system in which the rich in society can

pay for their fees whilst the more poor off have to rely on a student loan to pay. There

are still considerable questions that need to be answered in order for the main critical

issues of marketing, that have been mentioned in this report to be analyzed enough to

determine whether these have put potential students off from studying at university.

What can be said from this report is that due to the rise in higher education tuition fees

the government did stipulate that in order for universities to charge the maximum of

9,000 a year they had to meet certain obligation that were set out by the office for fair

access. The office for fair access said all universities in the UK should be able to

provide access to those students that have special conditions that prevent them from

going to university. A range of scholarships and bursaries should also be made

available to try and help students, repayment will only commence once graduate

students are earning over 21,000 a year under the new system.

Challenges remain for the higher education sector within the UK as the fallout from the

government spending review begins to unravel and applications to universities within

the UK decline. Universities need to be robust enough to cope with some of the mass

fall out and the amount of revenue that looks set to decline as a result.

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The fact that some universities have already set out ways in which they can help poor

and disadvantaged students is a sign that they are going to do all that they can to try

and ensure that no student can’t be given access to higher education within the UK..

To conclude all of this report university is now more competitive than ever before having

the top grades from A Levels does not guarantee you a place at university and with

growing anger towards 9,000 a year tuition fees some may argue that there are other

ways of getting yourself employability skills and be able to make yourself employable.

Universities need to do more to encourage potential students to go to university and not

be put off by the rise, and make sure more can be done to attract those who would not

normally want to go to university and who would think that they would ever get to

university in the first place.

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5.1 Three main issues sum up

What this diagram shows is that all of the critical aspects of marketing that have been

mentioned within this report need to work with one another in order for students and

universities to remain competitive with one another.

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Critical Issues of Marketing for Higher Education Sector

Value

Tuition Fees

Student Support

CRM

Employment

Relationship

Market Orientation

Long Term

Creativity

Student


6.0Bibliography

http://www.bbc.co.uk/news/education-18021904 - Date Accessed 15th May 2012

http://www.bbc.co.uk/news/education-17537558 - Date Accessed 29th March

2012



http://www.bbc.co.uk/news/uk-england-18093787 - Date Accessed 17th May

2012

http://www.hefce.ac.uk/ - Date Accessed 15th May 2012

http://www.guardian.co.uk/education/2012/mar/29/squeezed-middle-universities-

lack-of-students - Date Accessed 29th March 2012

http://www.guardian.co.uk/education/mortarboard/2012/mar/28/students-need-

grades-before-applying-to-university - Date Accessed 29th March 2012

http://www.ons.gov.uk/ons/taxonomy/index.html?

nscl=Higher+Education+Students –Date Accessed 29th March 2012

http://www.telegraph.co.uk/education/universityeducation/8735057/More-than-

one-in-four-graduates-fail-to-find-work.html - Date Accessed 16th May 2012

7.0References

7.1Websites

http://www.guardian.co.uk/education/2011/dec/05/higher-education-reforms-

university-anger - Date Accessed 23rd March 2012

www.timeshighereducation.co.uk/story.asp?storycode=417251 – Date Accessed

23rd March 2012

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http://www.ons.gov.uk/ons/dcp171776_259049.pdf - Date Accessed 16th May

2012

http://www.guardian.co.uk/business/2012/apr/25/uk-sinks-double-dip-recession-

gdp - Date Accessed 16th May 2012

www.hesa.ac.uk/content/view/2445/393/ -Date Accessed 15th May 2012

http://www.guardian.co.uk/news/datablog/2012/jan/04/ucas-applications-drop-

tuition-fees?intcmp=239#data – Date Accessed 16th May 2012

https://docs.google.com/spreadsheet/ccc?

key=0AonYZs4MzlZbdEFQMFl6Mkx0UG1PZ0FvclkxbHBGNnc#gid=0 – Date

Accessed 16th May 2012

http://worldcrunch.com/european-decline-university-degree-still-worth-it/4952 -

Date Accessed 16th May 2012

www.cedefop.europa.eu/EN/articles/19851.aspx - Date Accessed 16th May 2012


https://www.keynote.co.uk/market-intelligence/view/product/1067/issues-in-

higher-education-funding/chapter/5/strategic-overview - Date Accessed 17th May

2012

http://www.timeshighereducation.co.uk/story.asp?

storyCode=416111&sectioncode=26 – Date Accessed 16th May 2012

https://www.keynote.co.uk/market-intelligence/view/product/1067/issues-in-

higher-education-funding/chapter/8/promotion-and-advertising - Date Accessed

17th May 2012


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7.2Journals

Tomasso A, (2011), Performances and spending efficiency in higher education: a

European comparison through non-parametric approaches, Education

Economics, Vol. 19. No 2, Pp 100- 224

Eggert, A., Ulaga, W., (2002), ‘Customer Perceived Value: A substitute for

satisfaction in business markets?’, Journal of Business and Industrial Marketing,

Vol. 17 No. 2/3, pp. 107-118

Khalifa, A.Z., (2004), ‘Customer value: a review of recent literature and an

integrative configuration’, Management Decision, Vol. 42 No. 5, pp. 645-666

Ulaga, W., Eggert, A., (2006), ‘Relationship value and relationship quality-

Broadening the nomological network of business-to-business relationships’,

European Journal of Marketing, Vol. 40 No. 3/4, pp. 311-32

Rowley, J., (2005), ‘Building brand webs - Customer relationship management

through the Tesco Clubcard loyalty scheme’, International Journal of Retail &

Distribution Management, Vol. 33 No. 3, pp. 194-206

Seeman, E.D., O’Hara, M., (2006), ‘Customer relationship management in higher

education - Using information systems to improve the student-school

relationship’, Campus-Wide Information Systems, Vol. 23 No. 1, pp. 24-34

Narver, C J, Slater F S, (1990) The Effect of a Market Orientation of a Business

Profitibility, Journal of Marketing, Pages 20 -35

Kohil, A K, Jaworski J B, (1990) Market Orientation; The Construct, Research

Propositions and Managerial Implications, Volume 54, Pages 1- 16

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7.3Newspaper / Magazine Articles

Freedman, M., Scott Paul, J. (2011), Is university worth the investment?, The

Times, 27th May

Lampl, P. (2010), High fees and deep cuts are a toxic mixture, The Times, 24th

November

Boxall, M. (2011), Logic essential in debate about university marketplace, The

Times, 22nd April

Kelly G, (2012), How can teachers inspire when the future is bleak?, The Times

Higher Education Supplement, 27th April

Total word count (Excluding Bibliography, References and Appendices) =2,867

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critical issues in marketing assignment (actual)

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