Price Led Market? Price Led Marketing?

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Price Led Market?Price Led Marketing?
E john.c_at_callen-associates.com M 07903 757739
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The Consumers Price/Cost matrix

• More than price
• Financial fees
• Academic entry grade currency
• Indirect accommodation/living costs
• Discounts/incentives
  scholarships/bursaries
• Opportunity Costs
• Work ltgt Time ltgt Alternatives
• Price (or Value) Bandwidths
• Potential for differential markets to emerge

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Pricing 2012
6k
9k
?
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Pricing Research

• 4 main Consumer market methods
• Concept Test
• Van Westendorp
• Brand Price Trade offs
• Conjoint analysis
• (B2B mainly qual)
• Optimal conditions
• Clear framework/s and reference points
• Equilibrium
• Tangible sets of features and benefits
• Comparability

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Pricing Research

• 4 main Consumer market methods
• Concept Test
• Van Westendorp
• Brand Price Trade offs
• Conjoint analysis
• (B2B mainly qual)
• Optimal conditions
• Clear framework/s and reference points
• Equilibrium
• Tangible sets of features and benefits
• Comparability

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• Little real insight to be gained from Pricing
  Research

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Pricing Strategies

• Competitive/Entrepreneurial
• Competitive
• Price leadership
• Target pricing
• Limit pricing
• Predatory
• High-low pricing (ranging)
• Premium
• Decoy
• Penetration
• Creaming or skimming
• Loss leader
• Dynamic
• Price discrimination

• Cost
• Cost-plus
• Marginal-cost
• Contribution margin-based
• Absorption pricing
• Consumer
• Market-oriented
• Value Based
• Psychological
• Channel
• Retail ltgt Direct/Online

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Pricing outlook now

• Offa deadline for gt 6k HEIs by mid April
• Fee setting likely to be guided by
• HEI
• Cost Plus ... Plus, Plus, Plus
• Price leaders ltgt Followers
• Fear of ve Price Position
• State
• Politics
• Funding
• Offa
• NSP
• et al

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Pricing 2012 ???
6k
9k
?
9k
8k
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Price Differentials ???

Probably not significant enough for a Price
Oriented Market
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Price Impacts on Demand

• Looking Forward
• Uni of Leicester
• Slight but real decline at 7k Segmentation
  impacts
• Sutton Trust
• Marked Decline Lower socio-econ groups more debt
  averse
• Euro RSCG Heist
• HEPI

• Looking Back
• BIS from 3k base
• Fees 1k pa gtgt - 4.4 demand
• Finance 1k pa gtgt c. 2.5 demand

- 1.9 per 1k

• Exponential Effect ???

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- 5 gtgtgt - 20 ??

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Price Impacts on DemandMACRO and Segment
Variables
Price
Perceived Total Cost
Sponsor/Parent Support
Fundability/Payability/Deferability
Debt Aversion
Perceived Value of a Degree
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Price Impacts on DemandMACRO and Segment
Variables
Price
Perceived Total Cost
Sponsor/Parent Support
Fundability/Payability/Deferability
Debt Aversion
Perceived Value of a Degree
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National ltgt HEI Segment cross-mapping

• Price ltgt Value Bandwidths
• Demographics
• Attitudes
• Geographic catchments
• Parents/Influencers
• University Brand
• Subject area
• Course
• Changing as information issued/assimilated

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and consumer understanding and attitudes
Dig that Data
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Hoover effect ....
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Hoover effectPremium Brand Preference
When price makes little difference ...
Premium wins (other things )
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Value MarketingAspirant Consumers
HEPIs Unmet demand?
Echelons
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Hard times coming

• The Demographic Dip
• Recession disposable income graduate job
  prospects
• Increasing graduate debt gt impacts on PG demand
• Greater competition for overseas markets
• UK Visa controls
• Drives to third leg incomes gtgtgt more competition
• Declining training and RD budgets
• Decline in charitable donations
• ELQs
• Govt/HEFCE Funding packages
• Confusion

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Hard times coming

• David Willetts 1
• Funding for teaching to follow student choices
• Assumed average fee of 7,500.
• Otherwise further offsets in HEFCE grant
• Reconfigurations for ITT and Nursing/Health
• Student Visa
• REF et al?
• Transparency
• Unistats, NSS and TRAC gtgtgtgt KIS 17 points
• Incl contact time, costs, outcomes

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Harder times coming

• David Willetts 2
• Public Sector Modernisation (White Paper to
  follow)
• Most powerful driver of reform let new providers
  (worldwide) into the system
• Removal of current barriers
• Allow alternative providers to access student
  loans and grants system
• Allow external degree awarding bodies (BTEC)
• Encourage FEIs/Employer and award body groups
• Protect FEI (franchised?) interests in HE
  provision
• Review options to freeing up numbers (off the
  books)
• A price that represents good value
• Our ambition is to make this framework
• as de-regulatory as we can

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Value Marketing ???
Its the Economy Stupid
Price
EQ.
Volume
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New Market Conditions

• Supply and Demand NOT in equilibrium
• NOT filling places/containing demand
• Mission NOT caretaking the public purse
• Away from managing budgets
• Need to Survive and Thrive
• Attract/Optimise Demand to Capacity
• Differentiate through VALUE /or PRICE
• Generate PROFITS
• Towards Investment and Return
• Operational ltgt Cultural

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Marketing Fitness
Market Fitness
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Marketing Fitness

• Maximise (Current) Position and Proposition
• Brand Position
• Benefits and Features
• Values
• Service
• Bursaries/Scholarships/Offa/NSP et al
• Investigate the Product until it reveals its
  Truth
• Optimise and Integrate Channel Effectiveness
• Advertising
• PR/Comms
• Key literature
• Web site ltgt e-marketing/comms ltgt e-service
• Conversion ltgt Admissions ltgt CRM
• Schools Liaison ltgt Widening Participation

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Marketing Fitness

• Portfolio Review and Development
• International
• Part-time
• Market Research
• Business Stream Development
• International
• Part-time
• Postgraduate
• Third Stream Alumni and Fundraising B2B

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Competitors and Positions Identification and
Analysis

• Data Analysis
• UCAS, HESA/Heidi
• Brit. Council
• Et al
• Published benchmarks
• League Tables
• Other/specific published comparators, guides etc
• Positioning
• Aggregation of messaging/inputs for consumer
  perceptions
• Specific Competitor Analysis
• Product/s
• Services/Resources
• Position/s and Proposition/s
• Features and Benefits
• Perceptions Research
• Competition ltgt Comparison ltgt
  Competitiveness

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From intangible to more tangible value?

• Partnerships/collaborations
• Endorsement/s
• Sponsorship
• Business engagement
• Adding value to student cvs
• Admin Service
• Pastoral service (the student life gtgt affinity)
• Academic Service
• Quality underpinnings/evidences
• Mode student attendance efficiency

Satisfaction Preference
Perceived Value of a Degree
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Marketing Function Fitness
Corporate/Business Requirements and
Support Mission, Corp. Strategy/Plan VC and
SMT Authority Policy as required
Support/Partner Functions Engaged and
supporting appropriate Marketing needs
Internal Clients Corporate Faculty Departments P
rof Services
Marketing Leadership Analysis Objectives Strateg
y Operations Systems
MC Functions/Svcs Relate to Clients and
Markets/Audiences Clear Delivery of Objectives,
Strategies and Plans
Markets and Audiences External Internal

• But largely
• More effectively doing what were already doing
• ... or ... doing what we should be doing!

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Market Fitness
Corporate/Business Requirements and
Support Mission, Corp. Strategy/Plan VC and
SMT Authority Policy as required

Support/Partner Functions Engaged and
supporting appropriate Marketing needs
Internal Clients Corporate Faculty Departments P
rof Services
The Change Agenda
Marketing Leadership Analysis Objectives Strateg
y Operations Systems
MC Functions/Svcs Relate to Clients and
Markets/Audiences Clear Delivery of Objectives,
Strategies and Plans
Markets and Audiences External Internal
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Market Fitness

• Product MUST be on the agenda
• Innovation
• Portfolio relevance
• Content
• Quality ltgt Evidenced Credentials
• Mode
• Duration
• Service
• Cost gtgtgt Price
• Value
• Benefit from increased empathy ??

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Echelon Strategies/Tactics
Hoover tactics
Defend Hoover tactics
Defend Extend Innovate
Correlations to Change/Innovation ?
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Brand PreferenceCompetitive

• In XXX conditions
• and YYY circumstances,
• I would prefer to have that brands product over
  the others that are available.

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Composite Position/Strategy
Lead Proposition Brand Substance
Delivery through Theme or activity
Delivery through Theme or activity
Delivery through Theme or activity
Delivery through Theme or activity
Common Features/Benefits
Foundation in Operations
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A time to Drive Change

• Kotters first two steps
• 1. Establish a Sense of Urgency
• Research the Market
• Analyse the Competition
• Identify and discuss (potential) crises and
  opportunities
• 2. Create a Coalition
• Powerful and Influential group that leads
• Work as a team
• gtgtgt vision, empowerment, early wins,
  consolidation

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EXTERNAL
Brand Delivery
Product and Service
INTERNAL
Iterative and Parallel development
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READERS
Shared Beliefs and Goals
WRITERS
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STUDENTS
Shared Beliefs and Goals
Metroville University
LECTURERS and Prof. SERVICES
Buckingham BPP Open Birkbeck
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Good Marketing delivers in the Hard Times

• What you did yesterday has put you where you are
  today
• What you do today, needs to put you where you
  want to be tomorrow
• Selling ... and adding value ... for today
• ... as a component of ...
• Marketing for tomorrow

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Price Led Market?Price Led Marketing?
E john.c_at_callen-associates.com M 07903 757739