Primary macroenvironment forces affecting education are technological forces. In the 21st century the process of learning has changed from traditional learning system to a rich environment enhanced by audio and visual devices, supplied by various kinds of media and highly individualized (Barbour & Barbour & Scully, 2008). The whole approach to information has changed: rapid progress is many spheres and availability of vast informational databases make abilities to aggregate information and abilities to quickly master existing knowledge more important than any particular set of knowledge.
As a result of technological development, three types of educational institutions have emerged: brick (traditional), click (virtual), brick-and-click (combined) (Barbour & Barbour & Scully, 2008). The focus of education has shifted from teaching to learning and personal ability to acquire knowledge. Technology has inevitably changed marketing environment in education.
Market Force 2
Second large change of marketing environment was performed by economic forces, and by economic globalization in particular. Economy and life in the US are becoming more and more tied to international economy (Pride & Ferrell, 2010). Educational instructions have to compete not only at the national level, but in the global marketplace. Universities have also become more open and diverse: almost every higher educational institution has international department. Graduates of US universities also have to compete in the global markets: currently many companies are using outsourcing, thus increasing pressure on US employees. World economy is tending towards a new distribution of labor between countries, and universities are to play a defining role in the competitive position of US at the global market of labor. New educational partnerships, understanding of the tightening global competition and challenges posed by the new globalized specialization of labor force are caused by economic globalization.
Market Force 3
Cultural forces are the third factor of marketing environment driver for education. Here two important factors can be determined: increasing diversity of US population and the decreasing role of degrees and diplomas. Ethic and cultural mix of US population is becoming more and more diverse, and the importance of multicultural programs, educational initiatives for immigrants and English-language learners as well as retraining programs and programs for working adults is increasing (Pride & Ferrell, 2010). At the same time, as the number of educational providers is growing due to lower entry barriers, public value of degrees and educational achievements is replaced by the importance of competencies and skills of a particular person (Barbour & Barbour & Scully, 2008). Thus, educational programs are likely to become more focused, more diverse and less time-consuming. With growing consumer power in education, this tendency is inevitable and correlates with the rapid changes taking place in virtually every sphere of human life.
Strategies to Overcome the Threats
Overall, rapid development of communication technologies and globalization have changed the requirements to education, and competitive landscape in educational services has rapidly evolved during the last decade. From the position of Porter’s 5 forces analysis (Pride & Ferrell, 2010), it is possible to identify such causes of these changes:
- competitive rivalry has increased due to a growing number of online/distant educational service providers and greater availability of educational services due to technological development;
- threat of new entrants has increased with the invent of new methods of learning and with the progress of telecommunications;
- bargaining power of customers has increased as a result of these changes and due to increased easiness of switching between educational providers, while bargaining power of suppliers has significantly declined.
In order to develop a marketing strategy, it is necessary to determine controllable marketing factors and to adjust them to exploiting or mitigating environmental forces. For service organizations, primary controllable factors are not only the traditional four Ps (product, price, promotion and place) (Pride & Ferrell, 2010), but also service marketing additional three Ps (physical evidence, participants and process of service assembly) (Fisk & Grove & Joby, 2007).
Existing threats for providers of educational services include the growing competition and new means of learning provided by virtual learning organizations, greater exposure to global markets (and therefore another increase of competition) and potentially dropping interest to “traditional” degrees. Among possible strategic adjustments to environmental conditions there are hyperactive, reactive and proactive (defensive and offensive) strategies (Fisk & Grove & Joby, 2007). Currently the majority of educational institutions adopt reactive strategies – respond to the environmental changes slowly and/or when it is impossible not to react to changes (Fisk & Grove & Joby, 2007). In contrast, educational organizations have to develop at least defensive strategies with regard to threats, including diverse educational programs and easy access to educational programs for all groups of population (including working adults, gifted children, mothers, international students, people with disabilities etc.). Thus, educational products have to become diverse, place – combined real and virtual training, and pricing should be adjusted to be competitive at the international area.
Strategies to Capitalize on the Opportunities
The combination of external and internal factors involved in environmental scanning for the sphere of education also present a variety of opportunities closely linked to above-mentioned threats. Exposure to the global markets and the growing need for more focused educational programs provide chances for adopting offensive strategies and capturing new market niches. First of all, educational institutions should use the achievements of US education to win a large segment of international education market. Secondly, they should create short-time and/or retraining educational programs providing the skills and competencies for job roles popular at the labor market. Cooperation with major companies and closer integration of education and employers should become essential part of a proactive marketing strategy. Finally, educational institutions should determine the advantages of US labor at the global marketplace, and adjust their programs accordingly.
Earlier, educational industry had a comparatively low need for performing analysis of internal and external environment and developing a sound marketing strategy. The impact of marketing environment forces such as technological, economical and cultural forces has changed the situation, and educational institutions should be aware of these changes. Increasing competition and globalized educational environment require appropriate marketing response from educational organizations, and the latter should utilize proactive (defensive and offensive) strategies in order to become economically effective.
Barbour, C. & Barbour, N.H. & Scully, P.A. (2008). Families, Schools, and Communities: Building Partnerships for Educating Children. Pearson Education.
Fisk, R.P. & Grove, S.J. & Joby, J. (2007). Interactive Services Marketing. Cengage Learning.
Pride, W.M. & Ferrell, O.C. (2010). Foundations of Marketing. Cengage Learning.