Consumer Behavior Assignment

Consumer Behavior towards Higher

Education

A buyer behavior perspective of higher education

Submitted By –

Khyati Singh

17FMPCJHD01010

MBA IV
Abstract

Institutions/courses are frequently now subject to the same kind of consumerist pressures typical of a
highly marketised environment. In the United Kingdom, for example, students are increasingly
demonstrating customer-like behaviour and are now demanding even more ‘value’ from institutions.

Value, though, is a slippery concept and has proven problematic both in terms of its conceptualisation
and measurement. There is a relationship between student value and higher education.

The students adopt decision making and information search process for choosing university courses or
higher education.

Keywords

Keywords: Marketing, higher education; student value; student as consumer

Higher education as an open market system

The higher education in operates as a deregulated ‘industry’ providing educational products to informed
and discerning buyers (students). Implicitly, there is a market driven system of higher education that
exists.

However, it is argued that the ‘market’ for higher education may not be an economic one and that a
marketing paradigm might be more appropriate for understanding the choices made by students in
selecting a university to attend.

The concept of the market in marketing theory is somewhat different to the economic definition. The
term ‘market’ in marketing theory is a group of actual and potential buyers of goods, services and ideas -
therefore people can be target markets.

Marketing strategies are designed to influence the behaviour of actual and potential consumers.
Consumers are clearly defined, their needs and wants are understood and products are designed which
meet those needs and wants. Thus, the underlying assumption in any marketing situation is that ‘the
customer is king’.

On the other hand, the open market conception of higher education is built on the assumption that
prospective students are able (and willing) to make rational choices about which institution will provide
them with the ‘right’ education to meet their needs.
Educational choice – an overview

In the educational literature, several authors have approached the problem of student choice
from very different perspectives.

The model developed by Chapman (1981) contains many of the elements proposed by
authors in the consumer behaviour domain. Chapman proposes that essential elements in the
college choice model are:

· The characteristics of the student, including level and type of aspiration, socioeconomic
status and student performance
· The influence of institutional characteristics on the decision to attend (criteria
for choice), and
· The communication efforts of the institutions in attracting students.

The process of choosing an institution comprises some student characteristics that are not
necessarily considered within the consumer behavior domain. For example, students have
aspirations and attitudes to life (not just products) which affect the decision to attend a particular
institution.
It is these student (consumer) characteristics which makes the decision making process in
choosing an institution unique and quite different to that of choosing a product.

Institutional services such as universities, hospitals and government services are in a unique
position, as the decision to attend may not be made by the ‘consumer.’ For example, the
decision to attend a particular university is not only dependent on the student’s choice but
also may be informally made by the student’s antecedent subject selection. Furthermore, the
university will ‘select’ students who are likely to succeed within the study environment, and
who meet selection criteria within a competitive context.

This potential selection of customers presents unique marketing problems as students face a
paradox when choosing an institution. The student will choose to apply to an institution that
they know in advance the probability of acceptance into. The student will nominate those
institutions where the odds are most acceptable and which will maximise the potential
returns (socially or economically). The ability to attend an institution is affected by the
combination of factors such as capability of the student and their economic capacity to
attend. Students will not willingly choose to apply to an institution where they face being
rejected by the admissions process. Therefore - “I will choose the university that chooses
me.” It is unlikely that this circumstance exists in other marketing situations. Therefore, the
literature and models developed for buyer behaviour of consumer goods are not sufficient for
the context of an institutional service.
How students choose educational institutions: a new
research problem

The decision making process of students making choices needs to be explored if the key
question is to be answered - Do students make rational ‘buying’ choices about their institutions?

Rational or not, it is undeniable that students are currently making choices. Further, if institutions
wish to become marketing oriented, they should understand how those choices are made.
In order to examine how students choose an educational institution, it is necessary to identify
a process that is commensurate with university choice. To understand how someone chooses
a course, it is also necessary to comprehend what is chosen, and why it is chosen. In addition,
the student’s ability to enter upon a decision making process will affect the final decision.

For example, a student’s capacity to search for information, assimilate material and choose
between similar alternatives will also affect the final decision.
To examine this process in the context of higher education we need to look at several issues.
The discussion begins with why a student chooses an institution as the research into higher
education choice has focussed in that area.

Why do students choose a particular institution?

Information search leads to the ability of the consumer to establish criteria by which they may
evaluate alternatives. The criteria can be considered as why people choose between products.
Further, the criteria for selecting an institution are the variables an individual considers as
important to the choice decision. These variables will be of varying importance to the consumer.
Criteria that have been demonstrated to be relevant to educational choice are:

1. Curriculum and course availability

2. Location/ distance from home
3. Relevance of course to chosen career path
4. Reputation of the institution
5. Job placement and careers counselling
6. Costs associated with attendance
7. Admission criteria
8. Prestige and status of the institution
9. Educational facilities
10. Campus size and type
11. Extra curricular opportunities such as clubs, sports, etc
12. Campus facilities
13. Student welfare programs
14. Teaching and research staff, qualifications and experience.
The criteria will be ranked differently depending on the level of motivation to search for
information, the decision making capability of the consumer and the level and type of
information search activity undertaken by the prospective consumer.

How do students choose from among many alternatives?

However, before students can choose between competing alternatives, they must be aware of
what is available. In addition, there is the implied decision making process through which
consumers may arrive at possible choice outcomes. This assertion is based on the assumption
4 The criteria students use for developing a preference between institutions is discussed further
in Chapter Four.
9
that prospective consumers make active choices about the products that they eventually
choose to purchase. The questions then arise:
· How do students choose between alternatives?
· How do students search for information about alternatives?
· How are students influenced in their information search behaviour?
· How are students able to make an appropriate decision about a product as
complex as an educational institution?
· How do students judge the information that they obtain in the information
search process?

What is it that students choose when they choose an institution

to attend?

Students choose particular institutions and courses (what they choose) for particular reasons
(why they choose).

However, marketers would question the value of knowledge that focuses on what people
choose unless there was a willingness to adapt the product to the needs of the consumer.
Marketers of educational institutions are unlikely to change the what for a particular group of
Students. Indeed, they are more likely to attempt to attract the type of
student the institution has the greatest capability of satisfying.

Another question arises:

What decisions can be made and are there categories of decision? For example,
do students choose between career, course and/or institution?
In some respects, this last question has already been answered. However, the Australian
context is very different to that in the USA and the UK where the extant literature is
grounded. In the USA and the UK, students tend to choose between institutions and then
make decisions about specific courses within the institutions. In Australia, the decision is
made according to course and the institution is a secondary consideration.
Thus, in the USA the university is considered as both the brand and the
product. Whereas in Australia, the university would be considered as a brand5 and the
courses are the products within the brand name. Choices are made at the terminal course
level, for example, between degree programs which lead to careers in accounting.

The case for student value as customer value

The consumer concept is relevant to students, and that a marketing discourse is appropriate to their
concerns. Students are not customers but, rather, that they can be customers. And if students do
occasionally demonstrate customer-like behaviour; and if – as they manifestly do - university
managements construe them collectively as a source of revenue; then ‘customer’ becomes a legitimate
frame of reference and analysis – and value, then, becomes an issue of shared concern.

The major customer value concepts are –

1. Attributes only – product/service features that consumers find to be of benefit, or value

2. Outcomes only – benefits, or value, that consumers derive from their association with an offering

3. Value for money - a readily rationalised balance of benefits and sacrifices, usually based on price and
attributes (plus the more obvious outcomes).

4. Net Value - a complex, intuitively balanced combination of all benefits (outcomes and/or attributes)
and all sacrifices (monetary and/or non-monetary) perceived to be associated with a particular offering.

5. Cheapest option - bargain, usually focused on minimum possible sacrifice.

Ideal Net Value equation –

Results for the Customer

Practical outcomes
Knowledge/learning
Transferable skills
Business understanding
Time/money management
Social outcomes
Life experience
Friendships
Social status
Familiarity with different cultures
Strategic outcomes
Degree
Employment opportunities
Networking opportunities
Further education opportunities
 Corporate pipeline
Personal outcomes
Self-actualisation/fulfilment
Confidence
Independence
Personal development/maturity
Please parents/significant others

Service Attributes

Lifestyle facilitators
Local sustenance (Cafés, shops)
Local services (Banking, print shop,
insurance)
Transport links
Accommodation Office
Support services
Personal counseling
Financial advice
Health centre
Students union
International office
Lifestyle enhancers
City centre campus
City life
Cultural variety
Gym/sports facilities
Personal freedom
Student’s Union
Academic support
Library
Language programmes
Internet/pc access
Teaching staff
Administration
Career Enhancers
Placement/internship
University business
initiatives
Careers office

Price
Course/tuition fees

Acquisition and Relationship Costs

Lifestyle facilitators
Local sustenance (Cafés, shops)
Local services (Banking, print shop,
insurance)
Transport links
 Accommodation Office
Support services
Personal counselling
Financial advice
Health centre
Students union
International office
Lifestyle enhancers
City centre campus
City life
Cultural variety
Gym/sports facilities
Personal freedom
Student’s Union
Lost opportunity:
Work experience/wages
Travel/other social and
entertainment
Starting family/establishing
stable relationships
Subsistence:
Rent
Daily transport
Occasional travel
Utilities
Food and entertainment
Telephone costs
Effort
University work
(revision/examinations,
coursework)
Loss of home
comforts/fending for yourself
Part-time work
Travel between
classes/buildings
Direct learning costs
Books
Stationary
Print costs
IT (laptop, etc.)
Psychological costs
Academic stress (workload,
deadlines, fear of failure)
Financial worries/debt
Homesickness
Pressure on personal
relationships
Weight of expectation from
family/friends
Personal expectations
Pressure to socialise
Other Acquisition costs
Pre-course study
 Loss of privacy (communal
living)
Leaving ‘safe’/familiar
environment
Crime
Cultural/social prejudice
Weather

Adapted value equation

Net Value = Results for the Service attributes

Customer (or
service outcomes)

Price Acquisition and

relationship costs

Hypothetical research framework used to frame the discussion of how students

choose higher education
Conclusions

Thus, the criteria that have been demonstrated to be relevant to educational choice are mainly:

1. Curriculum and course availability

2. Location/ distance from home
3. Relevance of course to chosen career path
4. Reputation of the institution
5. Job placement and careers counselling
6. Costs associated with attendance
7. Admission criteria
8. Prestige and status of the institution
9. Educational facilities
10. Campus size and type
11. Extra curricular opportunities such as clubs, sports, etc
12. Campus facilities
13. Student welfare programs
14. Teaching and research staff, qualifications and experience.
15. The characteristics of the student, including level and type of aspiration, socioeconomic
status and student performance
16.The influence of institutional characteristics on the decision to attend (criteria
for choice), and
17.The communication efforts of the institutions in attracting students.

Therefore, the criteria will be ranked differently depending on the level of motivation to search
for information, the decision making capability of the consumer and the level and type of
information search activity undertaken by the prospective consumer.