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Price Led Market? Price Led Marketing?

Price Led Market? Price Led Marketing?. E: john.c@callen-associates.com M: 07903 757739. The Consumer’s Price/Cost matrix. More than £ price: Financial: fees Academic: entry grade ‘currency’ Indirect: accommodation/living costs

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Price Led Market? Price Led Marketing?

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  1. Price Led Market?Price Led Marketing? E: john.c@callen-associates.com M: 07903 757739

  2. The Consumer’s Price/Cost matrix More than £ price: Financial: fees Academic: entry grade ‘currency’ Indirect: accommodation/living costs Discounts/incentives: scholarships/bursaries Opportunity Costs Work <> Time <> Alternatives Price (or Value) ‘Bandwidths’ Potential for differential markets to emerge

  3. Pricing 2012 £6k £9k £ ?

  4. £ 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

  5. £ 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

  6. Little real insight to be gained from Pricing Research

  7. Pricing Strategies Cost Cost-plus Marginal-cost Contribution margin-based Absorption pricing Consumer Market-oriented Value Based Psychological Channel Retail <> Direct/Online • 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

  8. £ Pricing outlook now Offa deadline for > £6k HEIs by mid April Fee setting likely to be guided by: HEI Cost Plus ... Plus, Plus, Plus Price leaders <> Followers Fear of –ve Price Position State Politics Funding Offa NSP et al

  9. £ Pricing 2012 ??? £6k £9k £ ? £8k £9k

  10. £ Price Differentials ??? Probably not significant enough for a Price Oriented Market

  11. £ 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 >> - 4.4% demand • Finance: + £1k pa >> + c. 2.5% demand - 1.9% per £1k Exponential Effect ???

  12. - 5% >>> - 20% ??

  13. £ Price Impacts on DemandMACRO and Segment Variables £ Price £ Perceived Total Cost £ Sponsor/Parent Support Fundability/Payability/Deferability Debt Aversion Perceived Value of a Degree

  14. £ Price Impacts on DemandMACRO and Segment Variables £ Price £ Perceived Total Cost £ Sponsor/Parent Support Fundability/Payability/Deferability Debt Aversion Perceived Value of a Degree

  15. Price <> Value ‘Bandwidths’: Demographics Attitudes Geographic catchments Parents/Influencers University Brand Subject area Course Changing as information issued/assimilated National <> HEI Segment cross-mapping

  16. … and consumer understanding and attitudes Dig that Data

  17. ‘Hoover effect’ ....

  18. ‘Hoover effect’:Premium Brand Preference When £ price makes little difference ... ‘Premium’ wins (other things =)

  19. ‘Value’ MarketingAspirant Consumers HEPI’s Unmet demand? ‘Echelons’

  20. Hard times coming • The Demographic Dip • Recession: disposable income; graduate job prospects • Increasing graduate debt > impacts on PG demand • Greater competition for overseas markets • UK Visa controls • Drives to third leg incomes >>> more competition • Declining training and R&D budgets • Decline in charitable donations • ELQs • Govt/HEFCE Funding packages • Confusion

  21. 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 >>>> KIS 17 points • Incl contact time, costs, outcomes

  22. 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’

  23. ‘Value’ Marketing ??? ‘It’s the Economy Stupid’ Price EQ. Volume

  24. 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 <> Cultural

  25. Marketing Fitness Market Fitness

  26. 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 <> e-marketing/comms <> e-service Conversion <> Admissions <> CRM Schools Liaison <> Widening Participation

  27. Marketing Fitness Portfolio Review and Development International Part-time Market Research Business Stream Development International Part-time Postgraduate Third Stream: Alumni and Fundraising; B2B

  28. Competitors and PositionsIdentification 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 <> Comparison <> Competitiveness

  29. 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 >> affinity) • Academic Service • Quality underpinnings/evidences • Mode: student attendance ‘efficiency’ Satisfaction Preference Perceived Value of a Degree

  30. Marketing Function Fitness But largely: More effectively doing what we’re already doing ... or ... doing what we should be doing! 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 Prof Services Marketing: Leadership Analysis Objectives Strategy Operations Systems M&C Functions/Svcs Relate to Clients and Markets/Audiences Clear Delivery of Objectives, Strategies and Plans Markets and Audiences: External Internal

  31. 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 Prof Services The Change Agenda Marketing: Leadership Analysis Objectives Strategy Operations Systems M&C Functions/Svcs Relate to Clients and Markets/Audiences Clear Delivery of Objectives, Strategies and Plans Markets and Audiences: External Internal

  32. Market Fitness Product MUST be on the agenda Innovation • Portfolio relevance • Content • Quality <> Evidenced Credentials • Mode • Duration • Service • Cost >>> Price • Value • Benefit from increased empathy ??

  33. ‘Echelon’ Strategies/Tactics Hoover tactics Defend Hoover tactics Defend Extend Innovate Correlations to Change/Innovation ?

  34. Brand PreferenceCompetitive In XXX conditions and YYY circumstances, I would prefer to have that brand’s product over the others that are available.

  35. 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

  36. A time to Drive Change • Kotter’s first two steps: • 1. Establish a Sense of Urgency • Research the Market • Analyse the Competition • Identify and discuss (potential) crises and opportunities • 2. Createa Coalition • Powerful and Influential group that leads • Work as a team • >>> vision, empowerment, early wins, consolidation

  37. EXTERNAL Brand Delivery Product and Service INTERNAL Iterative and Parallel development

  38. Shared Beliefs and Goals READERS WRITERS

  39. Shared Beliefs and Goals STUDENTS Metroville University LECTURERS and Prof. SERVICES Buckingham; BPP; Open; Birkbeck

  40. 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

  41. Price Led Market?Price Led Marketing? E: john.c@callen-associates.com M: 07903 757739

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