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Executive Summary:

The current study is concerned with evaluating the marketing environment of Sydney Business School located in Australia. The study reveals that investors, students, suppliers and creditors are the main elements of micro-environment of the business. On the other hand, it is observed that the intensity of market competition is high whereas both bargaining power of customers & threat from substitute products are moderate. However, threat from substitute products is also very high. The study further reveals that lack of suitable financing schemes, EMI options, PhD programs and internet based marketing practices are the main issues relating to the marketing mix of the business school. However, the issues can be overcome through implementation of PhD programs, scholarship & EMI options and social media marketing.

Table of Content

• Overview of the education industry in Australia
• Evaluation of marketing environment
• Micro-environment
• Macro-environment
• Customer behavior in education industry of Australia
• Assessment of marketing mix of the university
• Recommendations for further improvement
• Reference list

Overview of the Education Industry in Australia

International Education Segment plays a vital role in supporting Australian Education Industry strongly. The Education Industry has observed an observable improvement in the business since last couple of years. Commencement of pupils and enrolling in different educational courses like management studies and training on English language have ensured confirmed long term fortunes for Australian educational segment.

The last financial year 2014-15 observed export value from international education business to shoot up to AUS$ 18 billion. The immense growth can be contributed to the infrastructural support provided by Australian education system. The number of students enrolled in Australian universities who are from outside Australia can be accounted to more than one million. A major part of international students have enrolled in Management Education Courses at Australia.  The international students are supported by over 100,000 educational work forces.

Australian Bureau of Statistics (SBS) reported that the internal educational export segment has performed with more than 14% hike in business volume and income. In the view of Lymbersky and Christoph (2008), this make the international education Australia’s largest service export segment. The educational segment also provides a sustainable support to the local area of Australia being a strong contributor in generating new employment opportunities, developing infrastructural development, gaining grants and collaboration from national and international industries. The regional economy has been influenced by the development of international education.

The Austrian Government has started even better overall supporting system to ensure the growth in business is sustained and the enhancement of quality of education specifically for international students. Nudelman (2011) observed that the robustness of the policies and regulations related to the international studies are ensured unhindered innovation and enhancement of quality of education provided. Enhanced focus on reputation of the educational institutes is ensured as the same acts as the most gripping function in pulling global students to Australia.

The continual and large scale of growth has been observed by Australian Department of Education and Training (ADET) in the last financial year. The International students occupy the major percentage of Higher Education at Australia. Education related tour for international students and the cost of livelihood for these students have led to a major income source for Australian Government. Australia has gained third position in education export business following US and the UK.

The Universities get support in the innovative researches and developments mainly in the field of science and management. Educational Loans for studying at reputed educational institutes are funded by financial organizations. The Government supports the higher education system even for the management studies at Australia. Australian Education System provides 77 Master of Business Administration (MBA) Courses that are recognized across the globe. The tenure of the courses is one to two years of full time learning. In the view of Leonidou, Katsikeas and Morgan (2013), The MBA courses offered at Australia improve the capability of students pursuing the course to develop leadership capabilities to work effectively both as a team member as well as a leader. The communication skills are sharpened after attending the courses which helps in effective presentation, negotiation and development of interpersonal relationships. The courses offered at Australia mainly emphasize on Business policies and strategies, Accounting, Economics, Statistics and Data Analysis, Global business, Finance, Leadership, Marketing, Human Resource management, Organizational behavior and Operations.

Overview of Sydney Business School, Australia

The Sydney Business School (SBS) was established at Australia in the year 1920. The University started the journey as Faculty of Economics and the main emphasis was provided in the under graduate or post graduate studies of Economics. Bachelor’s Degree in Economics was introduced for the first time in the year 1914. After 11 years, SBS offered the Master Degree in Economics for the students. Gradually, the course extended to include the courses related to economics and social science. Both bachelor degree and master degree for the same were offered.

The study courses were gradually extended throughout 1980s and the 1990s.  The Faculty of Business and Economics introduced the Bachelors’ degree in Commerce which was a combination of Finance, Accounts and Marketing in the year 1993. In 1998, 4 year B.Com Course was introduces which was a combination of business studies with study of humanities, science and arts.

In the year 1999, the Faculty of Economics, the earlier SBS started the study courses on the review of administrative and academic segments of studies. The emphasis on technological and physical sciences, financial resources and scholarship were provided to researches. The study results were utilized to enhance the study materials and improve the capability of the technical and administrative personnel of the institute. The academic course materials were thoroughly reviewed and the overall academic course and support services involved were improved. IT enabled infrastructure and student oriented service platforms were developed and focus on the services provided. Client oriented administration on student services were established.

Master degree courses are offered at SBS with unique traits which are highly popular internationally. Courses on Transport management and International Business management were introduced in 1995 and popularized. In 2010, SBS introduced the Global Executive Master of Business Administration (GEMBA) which targeted the executive officers with more than 10 years of experience. The course developed the leadership capabilities of the executives. In the year 2013, the most advanced course of SBS, the Sydney Master of Business Administration (MBA) course was introduced with focus on developing the students personally and professionally.

Evaluation of Marketing Environment

Marketing environment refers to the key factors which influence the decision making process and performance of an organization. In other words, marketing environment or business environment can be viewed as the set of elements within which an organization operates. In this context, Glanz, Bader and Iyer (2012) stated that marketing environment can be segregated into micro and macro environment. Here, it is important to note that the micro-environmental factors influence the performance or functioning of a particular firm whereas changes in macro environment affects all the firms operating in the concerned market or sector.

Micro-environment:

Investors:

Investors are the persons or parties making financial contribution into an organization. The main investors of SBS are shareholders and trustees. Shareholders of SBS can be classified into equity and preference shareholders. On the other hand, trustees make donations for the growth of the universities. High Net worth Individual (HNWI) and other influential parties are the main trustees of SBS.

Customers or Students:

Students seeking to pursue management program are the main customers of SBS. The university offers management education at both graduation and post graduate level. In addition, the University has also started Executive management program for working professionals. Thus, the customers of the Universities comprise of a wide range of students from diversified background.

Suppliers:

In the view of Luther, William (2001), selection of appropriate suppliers and strong relationship with them is vital for the smooth functioning of an organization. The suppliers of SBS mainly offers printing & stationeries, food materials, toiletries and other items necessary for the daily operations of the University. SBS has a standard code of conduct developed for its suppliers. On the other hand, works related to building repair, renovation, painting and electrical works are outsourced to multiple vendors. SBS also has arrangements with transportation companies to provide transportation services to both students and academic staffs.

Creditors:

The main creditors of SBS are banks, financial institutions and suppliers as well. The University obtains funds necessary for further expansion or modernization of its infrastructure through banks and financial institutions. These are long-term in nature. On the other hand, suppliers offer short-term credit to the firm.

Competitors:

The competitors of SBS can be classified into direct and indirect competitors. Direct competitors of the University are other business schools offering management education whereas indirect competitors are the Universities offering other types of graduate and post-graduate programs.

Macro-environment:

Two popular tools for macro environmental analysis namely PESTLE and Porter’s five forces analysis have been used in the current scenario:

PESTEL:

Political:

The political condition in Australia is quite stable. There are various types of subsidies and exemptions related to tax payments that are allowed by the Australian government (Zhang and Chen, 2015). In addition, stability in government is yet another positive side of the political environment of Australia. The government seeks to offer a strong support to the education bodies at both national and international level.

Economic:

The economic conditions of Australia can be considered as quite stable. Though the country suffered the negative effects of the global financial crisis like inflation, unemployment, credit problems, liquidity crunch and job loss but active involvement of the government has shown considerable recovery from the global recession. In addition, the cost of living in Brisbane, Melbourne and Perth are comparatively lower than other cities in developed nations like the UK, US and others. The standard of living is quite high in the country. As mentioned by Hiebing, Roman and Scott (2003), the Australian government has ensured controlled inflation level, rise in employment rates, increase in exchange rate and rise in employment rates.

Social:

The number of migrants from foreign nations is rising rapidly in Australia. In this context, Leonidou, Katsikeas and Morgan (2013) observed that there exists a high degree of consciousness among the Australian people regarding education. Thus, the people in Australia make the best possible efforts and investments for higher education of their children. In addition, higher education is encouraged for both male and female students in the society.

Technological:

There have been major transformations in the technological environment in context of the education sector of Australia. As mentioned by Droege, Lane and Casile (2013), there has been significant rise in the use of internet based marketing among the educational institutes in Australia. Widely use of Smartphone among customers can be considered as the main reason for educational institutes to promote respective brands through internet based marketing tactics like social media marketing. On the other hand, more and more number of educational universities are using online admission system that allows students to apply for courses from any part of the world.

Environmental:

In the view of Mintz and Currim (2013), scarcity of water is a major problem in Australia. This has even adversely affected the quality of water in the country. People are often required to purchase mineral water bottles for drinking purpose. On the other hand, deforestation has badly affected the soil quality in Australia. However, the Australian government has been taking various measures to resolve these issues and control industrial pollution.

Legal:

The legal environment in Australia is quite tough as in addition to an agreement in writing other forms of communication like emails or messaging can also have legal bindings on the involved parties. Recently, the Australian government has raised the level of minimum wages in the country. Furthermore, the Australian government seems to have a strong focus on eliminating gender and other forms of discrimination in the education and job sectors.

Porter’s Five Forces Model:

Intensity of market competition:

The intensity of market competition can be considered as quite high for SBS. This is mainly because of the sharp rise in the number of educational institutes in the country in the past two decades. Furthermore, there are already some premier management schools like Monash University, Melbourne business school and others which are giving tough competition to SBS.

Bargaining power of customers:

In present context, the students can be considered as the customers. The bargaining power of the customers can be considered as moderate. This is mainly because of the high switching cost prevalent in the education sector. SBS is one of the top 10 business schools in Australia having strong reputation for providing good quality management education. This helps in preventing the bargaining power of the students from getting too high.

Bargaining power of suppliers:

The bargaining power of suppliers are low for SBS because the suppliers always want to have contracts with reputed organizations like SBS to improve their own brand image. Suppliers usually look for long-term business associations with organizations like SBS. This often helps the organization to obtain discounts on bulk purchase from the suppliers.

Threat of new entrants:

The threat to new entrants is moderate in the education sector. In this context, Lymbersky and Christoph (2008) stated that opening a new business school in Australia requires huge capital investment along to strong brand name. However, the Australian government is highly supportive towards new educational institutes in the country. Certain exemptions are also available to potential business schools in relation to licensing and taxation.

Threat of substitute products:

The threat from substitute products is quite high for SBS. This can be explained by the presence of a large number of courses offered by various Universities and Institutes in Australia. In fact, there has been a strong demand for nursing, hotel management and architecture courses in Australia (Schorsch, 2009).

Customer Behavior in Education Industry of Australia:

There is a strong demand for management courses in Australia. However, the demand for new specializations in management education has risen among the students. On the other hand, top Universities like SBS usually have strong demand among the students. International students mainly come in Australia for getting premium education and prestigious degrees. This is what is offered by SBS. Furthermore, students tend to often comprise choice of specialties for getting admission into reputed business schools like SBS.

Assessment of Marketing Mix of the University:

Product:

Product refers to the main offerings made by a company to its customers. In fact, customers pay price for buying and using the product. Here, it is essential to observe that the core-offerings made by a company can be tangible or intangible in nature. In current scenario, the main offerings made by SBS is the management education and thus the organization operates in the service sector called the education sector. Product is considered as the major element in the marketing mix strategy as the focus of customers are primarily on the main product or service for which the actual price is paid.

Management education is the main offerings made by SBS to the students. This comprises of graduate, post-graduate and executive level programs. In this context, Nudelman (2011) mentioned that the quality of main product or service determines the long-term sustainability & growth of a company. SBS is regarded as one of the best Universities in Australia. However, lack of doctoral programs and limited specializations offered in MBA are the main limitations of SBS. The University focuses on increasing the current number of courses and programs offered to the students. On the other hand, the University focuses on hiring the most qualified and experienced faculty members from around the globe. In addition, the University provides the best possible infrastructure to increase the quality of management education. Management Development Programs are conducted at periodic intervals by the University to sharpen the skills of the future managers.

Price:

Price is the money paid by a customer for buying a particular goods or service from a company. Thus, price is also termed as the selling price. Pricing decisions adopted by an organization has a strong impact on the buying decisions of the customers. On the other hand, customers mostly give high consideration to the price to be paid for acquiring a product or service as this affects the economic status of the customers. In present context, the course fees paid by the students to SBS can be considered as the price for pursuing management education from the school. An organization can adopt various pricing strategies and approaches to induce customers towards the product or services offered by it.

SBS seems to be following a premium pricing strategy. The University ranks in the top 10 business schools in Australia having decades of experience and reputation in Australia. These factors allow SBS to charge premium course fees from both national and international students. There seems to be a lack of scholarships and flexible payment options that might threaten the long-term survival of the organization. SBS seem to be following a differentiation strategy as mentioned by Michael Porter. The University is focused on delivering superior quality of management education along with world-class infrastructure rather than focusing on reducing course fees.

Place:

Place refers to the physical location at which the exchange of goods or service takes place between buyer and seller against specified selling price. In current scenario, the business school itself is the place where the management education is provided.

SBS provides management education through its main building located in Sydney, Australia. The University does not have any major branches or educational wings in Australia. This is often viewed as a problem for the students. Opening new branches in other areas or cities might help the organization in reaching out to more students.

Promotion:

Promotion is that element of the marketing mix which is concerned with the advertising of products and services by an organization. The main purpose of promotion is to increase the sales of products or service and enhance brand awareness.

SBS promotes its brand mainly through advertisements in business magazines, educational magazines, newspapers and television. There is very limited involvement of social media and other modern marketing tactics that could have helped the University in enhancing its competitive edge over the rivals. Social media marketing has become highly popular in the corporate and across countries as it offers two-way communication process between the seller and buyer. Furthermore, SBS can benefit from the positive word of mouth by indulging more in social media marketing.

Recommendations for Further Improvement

Following strategies could help SBS in improving its marketing mix strategies:

Introduction of PhD Programs & Increasing Specializations:

SBS could start its PhD programs. Here, it is advisable for SBS to start doctoral programs at both full-time and part-time basis. This could help in attracting more number of students. In addition, the current number of specializations in MBA can be increased by incorporating the following ones:

• Information technology
• Operations management
• Wealth Management
• Entrepreneurship
• Agriculture management
• Banking & Insurance
• International business
• General management

Implementing Scholarship and EMI Schemes:

The University needs to focus on introducing scholarships for meritorious students as this could help in improving the brand image of the University along with helping to meet its Corporate Social Responsibilities (CSR). In addition, SBS can enter into tie-ups with leading banks for allowing students to pay course fees in Equated Monthly Installments (EMI). The strategy can help students in overcoming financial barriers to education. It is further advisable for SBS to concentrate on physically challenged students and students belong from financially challenged families.

Integrated Marketing Communication Program:

It is high time for SBS to develop an Integrated Marketing Communications Programme (IMCP) involving both traditional and internet based marketing techniques. Social media marketing is highly popular among young people and can allow the University to connect to large number of people within seconds. The most suitable elements of the integrated marketing mix for SBS could be press release, public relations, hoardings, television, social media marketing, online blogs and similar others.

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