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Higher education and the power of choice: Incumbents should consider strategies used in consumer marketing industries - EY - Australia

Higher education and the power of choice

Incumbents should consider consumer marketing strategies

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"Our actual teaching and student experience exceed our brand in most dimensions — we need to find a way to shift the market's perception..."Deputy Vice-Chancellor, dual sector university

In a more competitive, consumer-driven market, universities may need to consider fundamental transformations of their business models and student experience. Strategies and techniques used in other industries, for example, multi brand strategies and psychographic segmentation, may be worth considering.

Multi brand strategies

Universities could consider creating sub-brands in order to target new student segments without diluting the position of the core brand. For example, tier 1 institutions could create an alternative brand and delivery model to reap the benefit of ’mass market’ volumes and at the same time protect their reputation as world-class research institutions.

Alternatively, tier 2 institutions whose brands have a negative market perception might create a new ’premium’ brand to open up or grow new segments.

Companies in other industries, for example, Qantas and Toyota, have successfully deployed multi-brand strategies to compete with low-cost competitors or go ’up-market’.

Psychographic segmentation

Psychographic segmentation is an approach to winning in consumer markets that says an enterprise must (a) understand and select a target set of consumers based on a range of demographic factors (for example, age, gender, and socio-economic status) and psychological drivers (attitudes, behaviours, and preferences); and (b) build the product offerings, customer experience, brand and marketing strategy around the needs and preferences of the chosen segment(s).

Australian universities have deployed the principles of psychographic segmentation to varying degrees. Many have defined target students using the principles of psychographic segmentation, but few have aligned the full range of programs, student experience, brand and marketing to the needs and preferences of chosen segments.

In an increasingly competitive, consumer-driven market the risk will remain of an incumbent competitor, or new entrant, winning market share by getting ’closer’ to the student and developing new programs or experiences that more closely match to students’ needs and preferences.

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