critical issues in marketing assignment (actual)
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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
UGB 309; Critical Issues In Marketing; Michael Winship
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
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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)
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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.
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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
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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
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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.
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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
Definition Author Journal Reference
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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Definition Author Journal Reference
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
UGB 309; Critical Issues In Marketing; Michael Winship
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/education-14758464 - Date Accessed 16th May 2012
http://www.bbc.co.uk/news/education-16787948 - Date Accessed 16th May 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
http://www.bbc.co.uk/news/education-18060226 - Date Accessed 17th 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§ioncode=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
http://www.bbc.co.uk/news/education-18021904 - Date Accessed 16th 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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