The Role of Product in the Higher Education Marketing Mix

Old-school marketing executives and new-school social media professionals alike learned the “4 P’s” early in their careers: the marketing mix of price, product, promotion, and place. While marketers have added to and tinkered with these pillars (conceiving of “7 P’s” and “4 C’s,” among other variations), the original 4 P’s have largely stood the test of time. However, the digital revolution and other emerging marketplace forces are calling into question the continued viability of a formula created half a century ago.

Price, product, promotion, and place have been part of the marketing reality since, presumably, humans first began engaging in commerce many eons ago. But these 4 P’s were first grouped together as a working model in the 1960s and have remained mostly intact over the decades.

But a lot has changed in the marketing industry since the “Mad Men” era—and we’re not just talking about hairstyles and fashion sense. The emergence of the social Internet—which is impacting every area of commerce—is disrupting the validity and interpretation of the time-tested marketing mix.

For higher education marketing professionals, it is time to re-evaluate the 4 P’s through a contemporary lens, not with the intent to discard the model entirely, but to update our understanding of its components for the realities of 2012.

The Product “P”

A recent article in Fast Company, titled “Why Do B-Schools Still Teach the Famed 4 P’s of Marketing, When Three Are Dead,” questions the viability of the marketing mix in today’s altered business landscape—one that bears little resemblance to the staid corporate culture of the 1960s. The authors argue that of the four venerable P’s, only product remains in today’s digitally driven economy.

“Let’s look at promotion,” they begin. “In recent years, we have seen the explosive growth of companies that don’t do any advertising at all. … The other P’s are just as dispensable. Place is obviously becoming less and less important as more commerce moves online. And price is also less of a potential strategic marketing advantage. With price comparison sites like Tripadvisor.com, Pricegrabber.com, and Bizrate.com, many companies are forced to let raw market forces determine the price of their products.”

As the importance of promotion, place, and price recede, product emerges as the last “P” standing: “The only real way for a company to build a growing brand is to design products and services that are so good that they become marketing vehicles in and of themselves.” This leads the authors to conclude that “the golden rule for today’s hyper-competitive and information-rich markets is this: The only way you can increase the value of your brand is by increasing the value of your offering.”

When it comes to the higher education sector’s marketing mix, all four elements appear to be alive and well, at least for the time being. But the Fast Company article highlights a shift that is sure to impact college and university marketing efforts for years to come: the increasing importance of its product in providing value.

Understanding Higher Education as a Product

In many ways, product has always been the most complicated of the 4 P’s in higher education. Place, price, and promotion are easier to identify. Price looms large in the public consciousness. Despite the rise of online education, as long as college campuses exist, then place will always be an obvious component. And though methods of promotion have changed over the years, it’s still an important part of the higher education marketing mix.

Product, however, has traditionally been more difficult to define. What is the product in higher education? Is it the student who receives a diploma at commencement? Is it the well-rounded, educated alumna who contributes to her community? Is it the overall college experience? What about the academic programs and student services? And how is a successful product defined? Is it with reference to retention rates? Student satisfaction? Starting salaries for graduates? Graduate school enrollment?

In reality, most or all of these elements influence how we think about the product in higher education, and yet none of them alone are sufficient; the higher education product is the sum of many parts.

Traditionally, liberal arts colleges in particular have had the luxury of describing their product in nuanced and intellectual terms. The founding of the liberal arts tradition was predicated on the concept that education in itself is an ideal worth pursuing. The outcome of a college education was primarily the formation of educated, open-minded individuals who were able to understand and contribute to the world around them; vocational preparation for specific career tracks was secondary to the formation of sound, active minds.

Yet what is clear in 2012 is that this idealistic understanding of higher education, and its purpose in society, is under pressure from nearly every angle. The digital revolution, a troubled and shifting economy, and new expectations from families and legislators are compelling higher education institutions to define their product in new terms. For the first time in decades (or perhaps ever), the value of a college degree is being called into question. Rising costs and shrinking budgets are reframing the higher education discussion, pushing measurable employment and financial outcomes to the forefront; pragmatism, at least for now, dominates the conversation.

Outcomes, Outcomes, Outcomes

What is true for other industries is also true for colleges and universities: The customer gets to decide how they perceive the product. And the “customers” in undergraduate higher education—prospective students and any family members or loan co-signers who help foot the bill—are making value judgments about its product based on results.

Higher education has become less an end in itself, and increasingly a means to an end—primarily a fulfilling, economically viable, stable career path. At the same time, legislators are taking notice of unsustainable cost increases and unmanageable student debt and mandating that colleges and universities provide evidence of measurable benefits for graduates. The question is, can higher education administrators deliver measurable outcomes without sacrificing their ideals about their product?

Colleges and universities across the country have taken notice of the shifting winds.

Deborah Maue, associate vice president for marketing at DePaul University (Illinois), says the increased emphasis on outcomes is coming from all directions. “I think that if you read the news every day, you see the push for institutions to be more clear about outcomes. Are graduates getting good jobs and getting into prestigious graduate schools? Relatedly, I think that people are asking questions about value. At every cost tier, people want to know that they are getting a good value for their money,” says Maue.

Similarly, Michael Monhollon, who serves as the business school dean at Hardin-Simmons University (Texas), observes the emphasis on career-related outcomes firsthand when he meets with prospective undergraduate students and their families. “Everybody who visits campus asks about how much help there will be in finding that first job,” says Monhollon. “At a recent recruitment weekend, I gave prospective business students and their parents a survey to see what they hoped a business education would provide. The top five were instruction in: (1) how to find a job when I graduate, (2) how to make money, (3) how to think critically and solve problems, (4) how to analyze data to make better business decisions, and (5) how to start a business.”

The immediacy of Internet communications is placing further pressure on institutions to publish clear, measurable outcomes on their websites, where both prospective families and regulatory agencies can verify their claims—another trend that Monhollon has observed firsthand.

“The accrediting agencies want to know how assessment results are communicated to the public. The gold standard of transparency is a page on the university’s website,” explains Monhollon. “We’re doing more assessment and talking about the results with our prospects. We’re rebuilding our website to make more of the information immediately accessible to anyone who wants it. ”

Scott McKain, author of Collapse of Distinction, foresees the cementing of these twin marketplace forces of outcomes and immediacy. “The reality is the constituent base of all higher education institutions are going to be increasing their demands for achieving measurable—and improving—outcomes,” says McKain. “Legislators want their investment of tax dollars to create a more appealing business climate to increase the revenue base. Parents desire to know their investment will result in a career of distinction for their child. Students chose an institution based on many desired outcomes, both professional and personal. Donors seek to place their philanthropic efforts where they will receive enhanced outcomes as a result of their investment.”

And lest we forget, McKain reminds us that the increasing demand for immediacy, transparency, and measurable outcomes is not unique to higher education. “These trends are impacting and disrupting every institution of every type—from those in the higher education marketplace to Fortune 500 conglomerates; from religious institutions to small independent businesses. Much of this is being driven by expectations now generated by the desire for an instantaneous response associated with our online culture today,” observes McKain.

Seeking Distinction

What organizations everywhere must grapple with, says McKain, is how to establish distinction in turbulent and hyper-competitive environments. It is through distinction that colleges and universities will ultimately succeed in the disrupted marketplace that they currently find themselves in.

Matthew Shank, president of Marymount University (Virginia), agrees: “As a private institution, I believe competition is, by far, the greatest trend influencing our institution. Of course, to compete we have to differentiate ourselves, in part, through outcomes and communicate by being transparent. In our case, the other disruptive forces are legislation and the economy that constantly must be monitored.”

Despite the urgent need for brand awareness and distinction, McKain says that most colleges and universities currently fail to set themselves apart in the eyes of students and parents. “I see very few [higher education institutions] that are able to answer this simple question: ‘Why should a student select your institution instead of any other?’ You cannot differentiate what you cannot define. If you can’t answer the question, I just don’t think it’s reasonable to assume a student, or his or her parents, would be attracted to you.”

So the question facing higher education is how to provide a product that answers the new demands for real-world, quantifiable outcomes and immediate transparency, while at the same time establishing a distinct and lasting brand.

McKain offers a succinct answer: “The single most critical step any leader could take would simply be to ask in regard to every project and effort: ‘How will this action enhance the outcomes essential to the mission of our distinctive institution?’ ”

According to the senior higher education leaders that were interviewed for this article, the way forward requires clarity of purpose, brand consistency, innovation, and risk taking—without sacrificing the foundational liberal arts values that underpin what their institutions stand for.

“We have to excel at the things we can control—like services to students, hiring great faculty, having a strong curriculum—but also be ready for unexpected changes in the marketplace,” says Shank. “Setting tuition and tuition discounting, for example, must assess family perceptions, competition, and demand for our product.”

DePaul’s Deborah Maue says that establishing distinction requires letting go of the notion that your institution can be all things to all people.

“I think that institutions need to be very clear about what they are,” she advises. “At DePaul, we believe that ‘brand’ is a noun, not a verb. It’s not about ‘branding’ or ‘developing a brand.’ Any institution that’s been around more than a few years already has a brand. It’s about knowing what your brand is. This can be difficult, because defining what you are also means defining what you are not. The days of trying to be everything to everyone are over. That’s a scary thought, because it means potentially weeding people out early in the process. But they’re going to find out eventually, so you might as well tell them up front!”

Innovative Academic Products

One way in which colleges and universities are seeking to set themselves apart is through programmatic innovation. Unique degree programs that seek to prepare students for emerging professions and provide a path toward specific vocational outcomes are helping institutions appeal to students in new ways.

The New York Times education blog recently highlighted several universities that have unveiled new academic programs to target emerging industries and careers. In an article titled “Schools Try to Match the Jobless with 3.2 Million Jobs,” the Times featured new programs such as digital media marketing and global sustainability that are being offered alongside—and in some cases replacing—more traditional degrees. The article quotes Henry Miller, president of the American Association for Adult and Continuing Education.

“People have really been going where the money is,” Miller said. “The liberal arts and humanities kind of continuing education programs haven’t been as attractive to people. Schools haven’t worked as hard to keep them alive and enroll people in them, not nearly as much as programs that have some connection to workplace skills and professional development.”

Colleges are also exploring programs that prepare students for an increasingly globalized marketplace. Brown University (Rhode Island), for example, offers a joint M.B.A. with IE Business School in Madrid. Courses and programs that focus on geopolitical affairs and global business are emerging at numerous institutions.

These shifts are part of an effort by higher education institutions to more nimbly adapt to a shifting economy—to prepare students not only for where the jobs currently are, but also for those industries where employment opportunities will grow in the near future. According to The New York Times, there are millions of jobs waiting to be filled in emerging industries, yet higher education has been slow to shift its focus and training into these areas: “Even though nearly 13 million Americans are still out of work, many employers complain that they cannot find the right people to fill myriad job openings—for example, specialists in medical information technology or operators of computer-controlled manufacturing machinery. All told, the nation’s employers have 3.4 million job openings, according to the Bureau of Labor Statistics—a number of jobs that if filled could cut the unemployment rate, currently 8.3 percent, to around 6 percent.”

Hardin-Simmons recently introduced two new undergraduate business programs that focus on specific industries that promise growth and in which prospective students have expressed an interest: nonprofit management and public administration.

“The majors are different from more traditional majors in that they are not built around a functional area of business (such as accounting or management),” explains business school dean Monhollon. “Rather, they are multidisciplinary programs focused on applying business knowledge and skills in particular contexts—nonprofits and governmental entities.” The new programs distinguish Hardin-Simmons as one of the few faith-based institutions offering students direct training for these specific industries.

“Students look for colleges with courses tailored for their particular interests,” says Monhollon. “Often students interested in faith-based universities also have interest in nonprofit or government careers. These two new majors provide a useful combination of courses that students might have difficulty putting together otherwise.”

Monhollon says that the new business programs are part of the institution’s efforts to balance liberal arts values with practical, real-world vocational training.

“We need to embrace our inner trade school and recognize the need to help students choose a career path and develop the skills they will need for it,” he argues. “We can’t offer students knowledge for knowledge’s sake and leave it to them to figure out how and where it applies to building the kind of life they want to lead.”

At DePaul, a new push for relevant, outcomes-influenced degree programs “requires that faculty think about potential market size and positioning of new programs,” says Maue. “The proposals now include a ‘marketing strategy’ section that must be completed before a program is submitted for approval.”

Maue describes the strategy behind the new requirements: “I think that institutions need to think about program development in the context of the brand and the competitive marketplace. Historically, I think that programs were often developed based on faculty interest, without an understanding of whether there was a market for the program and whether graduates of the program would be able to find jobs. I don’t think that most institutions will have that luxury anymore. At the very least, they will need to factor market potential into their prioritization efforts, so that programs with bigger potential get more resources to ensure that they are successful.”

As institutions respond to a transitioning economy and seek to distinguish themselves with new innovative degree programs, they may also need to de-emphasize—and in some cases cut—existing programs. This is admittedly a difficult shift for many schools, says Maue. “Institutions will need to focus resources on high revenue and high growth programs, versus trying to support every program equally. That will be a challenge for most places, because it’s a change. But with limited resources in an increasingly competitive marketplace, institutions have to focus on the highest priority programs.”

Balancing Liberal Arts Values and Vocational Training

While colleges and universities grapple with new economic forces and changing public perceptions of their products, some higher education professionals fear that the pendulum will swing too far from core liberal arts ideals toward vocational training.

Marymount’s President Shank urges institutions to balance new demands with time-tested values. “Stay true to the liberal arts core; it will never go away, and nothing will prepare students better,” he says. “However, we must complement the liberal arts core with great programs that meet the workforce needs and industry demands of wherever we are located.”

At Beloit College (Wisconsin), senior leadership is seeking a balance between learning for its own sake and vocational training. Sociology professor Charles Westerberg, who serves as Beloit’s associate dean of the college and director of its Liberal Arts in Practice Center, believes that liberal arts colleges too often make an unnecessary choice between these two divergent schools of thought.

“We have watched other liberal arts colleges commit to one end of this dichotomy or the other (with a majority placing greater emphasis on vocational training),” observes Westerberg. “At Beloit, we reject the notion that you have to choose. We believe that liberal learning, when coupled with experience, provides the best educational outcomes.”

Beloit provides students with a range of vocational and training resources through its Liberal Arts in Practice Center—including access to jobs and internships, résumé and interview coaching, and entrepreneurial advice and resources. Additionally, the Center provides around $50,000 in funding opportunities for students who are engaged in unpaid internships or academic projects.

Westerberg believes that these programs help students to connect the dots between classic classroom learning and positive vocational outcomes. “If you can, one, connect the classroom and beyond-the-classroom learning you do; two, transfer knowledge and skills between the two learning venues; and three, reflect on and synthesize the learning experiences you have, we believe you will be in a position to be successful in whatever professional direction you wish to pursue,” he says. “So, in essence, we believe that by focusing on what we are calling the ‘liberal arts in practice,’ we can offer a distinctive educational experience in a marketplace that currently seems to be making a false choice between liberal learning or vocational training.”

Beloit has further enhanced its learning offerings beyond the classroom through a biannual advising practicum. During the one-day event, classes are cancelled for the day and students are invited to participate in workshops and departmental sessions that explore a range of topics related to life after college. During the first practicum in November 2011, seminars addressed topics such as, “Why am I in college?” and “Fact: Liberal arts graduates can get jobs.” Students also heard from alumni about their career paths and vocational choices. Though the day’s activities were optional for upperclassmen, Westerberg says that students attended the events enthusiastically and that the campus community became excited about the next advising practicum this spring.

Ultimately, Westerberg and his Beloit colleagues believe that the solution for providing a distinctive, results-oriented product lies in adding value to the institution’s existing liberal arts curriculum—not in drastically altering the nature of the classroom experience.

“We believe that as a liberal arts college with a long history of curricular innovation, Beloit College is in a unique position to explode the dichotomy between learning for its own sake and vocational training,” Westerberg says.

Facing the Future

The challenges facing higher education in the 21st century are significant. The recent economic crisis has disrupted industry and government alike, and there is a broadly accepted sense that we may never return to the lofty levels of prosperity that the nation experienced before the great recession—or at least not during our lifetimes. Similarly, the digital revolution that has already rattled—and in some cases ravaged—entire industries continues to gain speed. The social web and the shift to always-connected mobile computing will continue to alter every area of our lives and will greatly dictate the economic landscape in the future.

Influential business writer, blogger, and futurist Seth Godin said something in a January 2012 interview in University Advancement that should cause every higher education professional to lose sleep at night: “The business of higher education is going to change as much in the next decade as newspapers did in the prior one.”

Consider for a moment the nation’s shrinking print circulations, skeletal newsrooms, and defunct newspapers—not to mention the general crisis of purpose and confidence in the journalism industry. Apply even a small percentage of that same upheaval to higher education, and higher education administrators must come to the sober realization that colleges and universities are in a historically challenging and potentially defining period.

Yet even amidst storm clouds, there is much to be confident about. Higher education has been around for centuries—and has survived and thrived in more difficult times. The pursuit of education, knowledge, and skills is an essential element of healthy, free societies. Higher education remains a noble and worthy cause—and though it’s delivery methods may change, the need for its “product” is as strong as ever.

Sidebar: McKain’s “Four C’s” of Distinction

Scott McKain, author of the influential business book Collapse of Distinction, identifies four cornerstones of distinctive organizations:

Clarity. Distinctive organizations are crystal clear about their mission and what creates competitive space for them in the marketplace. Their mission informs everything they do.

Creativity. Distinctive organizations often find a single, isolated point where they can execute something wildly different from their competitors. Think of Enterprise Rent-A-Car bringing the car to the customer, rather than making them pick it up for themselves, for example.

Communication. Highly distinctive organizations communicate in narrative—through compelling stories rather than by delivering facts, figures, and reports. It’s not that the audience doesn’t desire detail, but in the social marketplace, people want to be captivated by stories that they can share with others.

Customer Experience Focus. Finally, distinctive organizations display a sincere customer experience focus. They not only concentrate on the customer (or student or parent), but they also consistently show empathy toward their constituents. They care obsessively about the customer experience.