Summit education services transition from niche market to mass market

Year 2016-2018 SUMMIT EDUCATION SERVICES TRANSITION FROM NICHE MARKET TO MASS MARKET Author : Le Ngoc Khanh Advisor : Dr Tran Thi Bich Hanh Hanoi, June 2018 Contents Introduction Theoretical background 2.1 What is marketing 2.1.1 Product 2.1.2 Price 2.1.3 Place 2.1.4 Promotion 10 2.2 2.2.1 Marketing in Education service 11 Education and education service 11 Methodology 12 3.1 Interview 12 3.1.1 Interview method 12 3.1.2 Interview conclusion 13 3.2 3.2.1 3.3 Secondary research: 14 Secondary data research: English learning in Vietnam 14 Primary research: Survey on target customers 17 3.3.1 Overview 17 3.3.2 Primary data research method 17 3.3.3 Sampling and collecting data 18 3.3.4 Results 19 3.3.5 Conclusion on data 26 Marketing plan for Summit Education Services 27 4.1 Vision and mission 27 4.1.1 Vision 27 4.1.2 Mission: 27 4.2 SWOT analysis 27 4.2.1 Strengths 28 4.2.2 Weaknesses 28 4.2.3 Threats 29 4.2.4 Opportunities 29 Table SWOT Matrix 29 Suggestions/ Recommendations: Marketing mix 31 5.1 Product 31 5.2 Price 32 5.3 Place 33 5.4 Promotion 33 REFERENCE 36 APPENDIX 37 Appendix Interview with CEO (in Vietnamese) 37 Appendix Questionnaire for primary research 40 Introduction Summit Education Corporation was founded in 2010, first as an English and Consultancy centre by Mrs Tran Phuong Hoa and Mr Myo Min It is one of the first centres in Hanoi that provide detailed consultancy service to students who wish to continue their higher education in the USA, and also the most successful During its eight- year- operation, Summit has been extremely successful in helping Vietnamese students to apply for entrance and financial aids at top universities, with the highest rate of successful applications in comparison with its competitors Summit also provides preparation courses for IELTS, TOEFL, SAT, ACT… for students Initially, the courses were part of the preparation for college application However, over the years, as the demand of studying for standardized tests increases, the courses that Summit offers have yield considerable profit for the company In recent years, Summit is currently going through an aggressive expansion; it is no longer a simple Consultancy centre, but an ambitious business aiming at becoming the leading corporation operating in the field of English education There are currently different centres: two (02) in Hanoi and two (02) in Ho Chi Minh City Due to the nature of the initial consultancy service, Summit was mostly popular among its target customers, who were talented students from middle class families in major cities It can be said that Summit has been operating in a niche market, and in order to develop and expand, it needs to change its marketing strategy to grasp a bigger market share In order to reach the aforementioned goal, different research ought to be carried out, since the pool of target customers as well as the way to conduct business of Summit, both need to be changed The research carried out in this report aims at exploring the market, the customers’ preference, as well as analysing the business of Summit education services Through a number of different research methods, the research’s ambition is to learn the difficulties of the management board, the trends of the market and customers’ expectations, along with the threats and opportunities it poses to businesses The research also learns the strengths and weaknesses of the business itself, and suggest the steps that the management board and marketing team can take to utilise the market opportunities and company’s strength to overcome the difficulties and problems After going through the theoretical background of some concepts, the report will present the results of the interview with the business owner, the primary research on the market of teaching and learning English, and finally, the primary research on the preference and expectations of the target customers of Summit when they want to expand to a mass market The report then use the results of the research to give out some recommendations to the business, especially when it comes to marketing strategy Theoretical background 2.1 What is marketing Dr Phillip Kotler, one of the world’s leading authorities on marketing gives definitions marketing below: - “ Marketing is the process by which an organization relates creatively, productively, and profitably to the marketplace” (Kotler, 1993) - “Marketing is the art of creating and satisfying customers at a profit (Kotler, 1993) - “ Marketing is getting the right goods and services to the right people at the right places at the right time at the right price with the right communications and promotion.” (Kotler, 1993) Marketing could also be understood as a management process, in which goods and services are provided to the customer through the coordination of different elements, or marketing mix Traditionally, these elements are called the 4Ps: Product, Price, Place and Promotion The four elements are unique, but interconnected and interdependent, and they help determine a clear and effective strategy to successfully bring a product to a market 2.1.1 Product A product is an item provided by a business to satisfiy a need or a desire of the customers It can either be a physical, tangible item, or an intangible service The product is produced at a cost and therefore, made available to the customers at a price Depends on the nature of the product, it will follow a distinctive lifecycle, and by analysing this lifecycle, a company can choose the right strategy to develop, launch and promote the product A successful product has to fulfill a specific need of the market It must, as the minimum requirement, be able to perform its promised function The communication to users and potential customers regarding its benefits and features must be clear and honest Branding is another important feature for a product Developing a product into a brand helps increase customer loyalty and differentiate the product, making it a stand out 2.1.2 Price There can be several strategies to determine the price of a product or service Good pricing strategy helps to determine the price point at which profits on sales of products or services can be maximized When setting prices, a business owner needs to consider a wide range of factors including production and distribution costs, competitor offerings, positioning strategies and the business’ target customer base Some of the pricing strategies include: - Pricing at a Premium In premium pricing, businesses set costs higher than their cometitors Premium pricing is often most effective in the early days of a product’s life cycle, and ideal for small businesses that sell unique goods Because customers need to perceive products as being worth the higher price tag, a business must work hard to create a value perception Along with creating a highquality product, owners should ensure their marketing efforts, the product’s packaging and the store’s décor all combine to support the premium price - Market Penetration Pricing Penetration strategies aim to attract buyers by offering lower prices on goods and services While many new companies use this technique to draw attention away from their competition, penetration pricing does tend to result in an initial loss of income for the business Over time, however, the increase in awareness can drive profits and help small businesses to stand out from the crowd In the long run, after sufficiently penetrating a market, companies often wind up raising their prices to better reflect the state of their position within the market - Economy Pricing Used by a wide range of businesses including generic food suppliers and discount retailers, economy pricing aims to attract the most price-conscious of consumers With this strategy, businesses minimize the costs associated with marketing and production in order to keep product prices down As a result, customers can purchase the products they need without frills However, the technique can be dangerous for small businesses Because small businesses lack the sales volume of larger companies, they may struggle to generate a sufficient profit when prices are too low Still, selectively tailoring discounts to most loyal customers can be a great way to guarantee their patronage - Market Skimming Pricing Designed to help businesses maximize sales on new products and services, price skimming involves setting rates high during the introductory phase The company then lowers prices gradually as competitor goods appear on the market One of the benefits of price skimming is that it allows businesses to maximize profits on early adopters before dropping prices to attract more price-sensitive consumers Not only does price skimming help a small business recoup its development costs, but it also creates an illusion of quality and exclusivity when your item is first introduced to the marketplace - Psychology Pricing Psychology pricing refers to techniques that marketers use to encourage customers to respond on emotional levels rather than logical ones Marketers using this practice set the price of the product slightly lower than rounded number, believing that the customers would perceived the price of the product lower than they really are This practice is most commonly seen in the sale of consumer goods - Bundle Pricing With bundle pricing, small businesses sell multiple products for a lower rate than consumers would face if they purchased each item individually Bundle pricing is more effective for companies that sell complimentary products 2.1.3 Place Placement or distribution is a very important part of the product mix definition as the product or service must be in a place that is accessible to potential buyers There are many distribution strategies, including: ● Intensive distribution ● Exclusive distribution ● Selective distribution ● Franchising 2.1.4 Promotion Promotion is a very important component of marketing as it can boost brand recognition and sales Promotion is comprised of various elements like: ● Sales Organization ● Public Relations ● Advertising ● Sales Promotion Advertising typically covers communication methods that are paid for like television advertisements, radio commercials, print media, and internet advertisements In recent times, the trend is to shift advertising from the offline to the online world Public relations, are communications that are typically not paid for This includes press releases, exhibitions, sponsorship deals, seminars, conferences, and events Word of mouth is also a type of product promotion Word of mouth is an informal communication about the benefits of the product by satisfied customers and ordinary individuals The sales staff plays a very important role in public relations and word of mouth Word of mouth can also be information, feelings and ideas people publish on the internet, especially Social media 10 of business among some groups, competitors such as younger students or adult - Competitors learners more experience with students from - Difficult to maintain current service with quality and even reputation due to the lack of other age advantages group in can winning have the market share teachers and administrators Suggestions/ Recommendations: Marketing mix 5.1 Product - Courses: + Continue to deliver quality consistent courses, especially preparation courses for standardised tests for students who wish to continue their higher education abroad + Develop courses for beginner and intermediate level students who not yet have the level of English that matches the current courses of Summit + Develop TOEIC and Business English courses, as well as Comprehension and Communication courses for older students who needs to study English for their career + Continue to hand out reports at the beginning and the end of courses so that the students feel like they are being communicated with, and that the teachers care for their progress - Teachers: 31 + Recruit experienced, well- qualified teachers from top universities; or foreign teachers with qualifications and experience with the courses; + Have teachers participate in training programmes, both before and on the job; + For younger classes, teachers should be asked to communicate with parents through class reports - Material: + Have a competent academic team, in charge of preparing for the materials used in classroom; + Introduce new forms of media: computers; audio, movies… to enrich the existent material being used in the classroom - Staff: + Recruit competent administrative staff to handle the increase number of students + Give trainings to the staff so they can help the teachers and students before, during and after the course - Facilities: + Keep the facilities in good conditions; + Consider introduce new teaching aid equipment to the classroom, especially for classes with younger students 5.2 Price - Consider having a various price ranges for different courses For existing pool of students, who belongs to the niche market and who are interested in test preparation courses, or academic courses to prepare for higher study, the price could remain higher than average Courses for younger students, adults 32 who wishes to attend courses for their jobs and career, the price should be set lower 5.3 Place - During expansion, Summit should choose the venues in more populated areas in centre districts - For the new pool of customers, Summit can consider opening their centres in districts with a lot of universities like Cau Giay, Thanh Xuan, Hai Ba Trung… - Car park/ motorbike parking area as well as the accessibility of the place must come into consideration 5.4 Promotion - Summit should definitely recruit more effective sales people, and develop a better promotion plan The plan should consist of the following: + A larger, more effective sales team who have the ability to interact effectively with potential students from different age group, with different demands + Investment in social media marketing, especially in interfaces like Facebook, Zalo, Twitter and Instagram + Content marketing on the website as well as on social media interfaces + Since word of mouth is an important source of information, Summit should issue vouchers and develop policy to encourage reference, especially between family members and friends of the students Conclusion 33 As stated by the business owner, it is crucial for the business to move from the niche market to the mass market, since the business is blooming and reaching maturity after years operating in the education market Results from primary research show that it is, indeed, the time to change, since the market is undergoing massive grow in demand, and the company should expand their business and occupy a larger market share before the market reaches saturation The study suggests that there should be several changes when it comes to the marketing strategy of Summit when they want a transition from the Niche market to the Mass market, since the nature of the two market is different in many different aspects Overall, it can be concluded that Summit should diversify their courses and the prices of the courses they offer At the same time, Summit needs to continue to keep their service quality consistent, since the quality of their courses is the foundation of their current success They also need to invest in the venue where they open the centres and focus on the effective promotion channels It is worth to note, however, that any studies have limitations, and this study is no exception Due to the time constraints and limit resource, this study had to use a combination of secondary research result with the primary research result The primary research did not go in depth when it comes to explaining the underlying reasons of the customers’ expectations, and could not determine which of the expectations are more important to the business One of the problems that the business owner raised during the interview was quality management; in other words, how to maintain consistent quality throughout the system during the process of expansion This problem was not covered in this study due to the fact that this report deals mainly with problems regarding the marketing strategies of the business 34 Future studies in depth about the underlying reasons of customers’ expectations as well as the importance of different expectations to the business needs to be carried out During expansion of Summit, there should also be reports and study into the problem of quality control between different centres, since it is a crucial part of success in the expansion 35 REFERENCE Philip Kotler, Marketing Management: Analysis, Planning, Implementation, and Control, 7th ed (Upper Saddle River, NJ: Prentice Hall, 1991), 31 http://www.businessdictionary.com/definition/education.html “Conducting in-depth Interviews: A Guide for Designing and Conducting InDepth Interviews”, Pathfinder International Tool Series Boyce, C., & Neale, P (2006) Conducting in- depth interviews: A guide for designing and conducting in- depth interviews for evaluation input https://qandme.net/vi/baibaocao/Khao-sat-ve-viec-hoc-tieng-Anh-o-VietNam.html Malhotra, N K., Kim, S S., & Patil, A (2006) Common method variance in IS research: A comparison of alternative approaches and a reanalysis of past research Management science, 52(12), 1865–1883 Felix Maringe, Paul Gibbs (2008) Marketing higher education Alan Sarsby (2016) SWOT Analysis Jare Keengwe, Justus G Mbae, Grace Onchwari (2016) Handbook of research on Global Issues in Next- generation teacher education 36 APPENDIX Appendix Interview with CEO (in Vietnamese) Chị cho em biết định hướng phát triển công ty khơng ạ? Summit bình thường biết đến tập học sinh elite trường chuyên Ams hay Chuyên ngữ Giờ muốn làm mass phải có sách thay đổi marketing Ví dụ Summit có lớp Summit Junior cho bạn cấp để chuẩn bị Tiếng Anh cho bạn, sau lên cấp bạn bắt đầu học IELTS, TOEFL, SAT… Muốn nhiều cháu khơng thể word of mouth hay event tập trung số trường Ngày trước Summit có tổ chức số test prep trường, phải cạnh tranh trực tiếp với ILA, VUS… nên phải làm marketing khác Ví dụ IELTS phổ biến, không phận nhỏ người học du học xưa Nhu cầu học nhiều hơn, trường giỏi nên nhận diện thương hiệu cần rộng Tóm lại phải transition từ kiểu marketing cho niche market sang làm cho thị trường rộng Theo chị đánh giá đâu mạnh Summit? Thế mạnh Summit trung tâm tư vấn giáo dục có uy tín Việt Nam Mình có tỉ lệ apply thành công 100%, số lượng học sinh du học Mỹ trường top 50 đứng đầu ln Ngồi Summit cịn dẫn đầu số lượng học viên đạt điểm TOEFL SAT Thành tích kì thi IELTS ACT học viên Summit tốt Ngồi mạnh giáo trình, tài liệu giáo viên đầu tư Summit có giáo viên Việt Nam nước phối hợp dạy luyện thi tư 37 vấn du học Mình tuyển chọn giáo viên kĩ, nên trình độ giáo viên nhìn chung so với trung tâm khác tốt Em hỏi TP HCM lại chạy thêm brand Blue Mountain khơng ạ? À hồi liên quan tới việc muốn có thêm cơng ty để số cổ đơng có hội góp vốn, định làm dòng thấp cho tư vấn du học với số sản phẩm không lẫn với Summit Nhưng sau thấy không cần thiết lắm, nên phát triển Summit mạnh em Về nghiên cứu thị trường theo định hướng Summit tiến hành nghiên cứu chưa ạ? Cũng không cần nghiên cứu đâu Summit chưa nghiên cứu đối thủ, mà marketing có số phương thức Bây Summit chạy thêm Facebook ad, làm thêm event, đến tiếp cận trực tiếp thêm nhiều trường, tìm cách lấy thêm data, build đội sale lớn hơn, aggressive hơn… Bọn chị quan tâm mở thêm số tỉnh nên chuẩn bị dần Cũng tiếp cận dần trường chuyên tỉnh giàu giàu miền Bắc gần Hà Nội Trước mắt quận Long Biên, Cầu Giấy, Hà Đông… Nói chung bây giờ, tốn quản lý chất lượng cho đồng căng marketing nhiều, chị chưa dám mở nhiều Thách thức lớn mà Summit phải đối mặt ạ? Đầu tiên việc cần mở rộng market chị nói vừa Muốn phát triển phải mở rộng, cịn để lỡ hội, qua vài năm thị trường bão hòa khơng phát triển Cịn q trình mở rộng phải tìm cách trì chất lượng giáo dục tốt, Summit khơng nhiều trung tâm khác, khơng thể hứa hẹn chụp giật lợi nhuận Rồi lúc mở rộng cần có thêm nhiều giáo viên Giáo viên Summit trình độ cao phần lớn làm bán thời gian, nên số lượng nhiều mà 38 cần thiếu Tuyển khơng phải đơn giản, khơng phải đủ trình độ để dạy theo tiêu chuẩn Ngồi nguồn giáo viên nước ngồi chất lượng sẵn, giáo viên nước ngồi khơng ổn định giáo viên Việt Nam Vừa có số giáo viên tốt Summit định nước, làm chị chị quản lý học thuật tìm người thay vất vả Đối với vấn đề marketing, Summit có gặp phải khó khăn khơng ạ? Thật định hướng Summit ban đầu hoạt động thị trường rộng Cái sức ép thị trường, phải phát triển thơi, đội ngũ marketing chưa chuẩn bị tốt Bây Summit tập trung vào chương trình events Summit trường học, ngồi cho chạy thêm số chương trình promotions khác để thu hút thêm học sinh đến Nhưng nhìn chung team marketing chưa mạnh số bên khác, dù uy tín chất lượng Ngồi học sinh đại chúng có khác biệt so với học sinh thị trường ngách Summit dự định mở thêm số lớp dạy TOEIC tiếng Anh để phục vụ nhóm đối tượng lớn tuổi, mà đặc điểm họ có nhiều khác, nên giáo viên tư vấn viên chưa có nhiều kinh nghiệm Đối với bạn học sinh lớp bé Thật chưa thể nhận dạy bạn tiểu học mẫu giáo Chị hi vọng đẩy mạnh tuyển sinh bạn khối 2, nhiều bạn có tiếng Anh tốt từ nhỏ, với gia đình đầu tư cho bạn chuẩn bị du học từ sớm Nhưng mà muốn phải có chuẩn bị tài liệu, giáo trình, giáo viên, sở vật chất nữa… Em cảm ơn chị nhiều ạ! 39 Appendix Questionnaire for primary research Questionnaire: Ideal English course Summit Education Services would like to send our greeting to you We are conducting a survey to learn about your preference when it comes to choosing and English course The information you provide would be invaluable to us when it comes to building a suitable English course for our students This questionnaire would take about minutes to finish We thank you for your help Why are you studying English? A For career or job B To prepare for higher education C To travel abroad D It's a hobby E For other purposes What is your current English level? A Beginner B Pre- intermediate C Intermediate D Advanced What courses are you interested in? A IELTS Preparation courses B TOEFL Preparation courses C SAT Preparation courses 40 D Basic Academic English courses E Other courses What would be the suitable length for a lesson? A From 1.30h to 2h B From 2h to 2.30h C From 2.30 to 3h D More than 3h How long you think a course should last? A weeks B 10 weeks C 12 weeks D 14 weeks What you think is the most important factor of an effective English course? A Teacher B Material C Facilities D Classmates E Other factors When it comes to teachers, what you think are the most important factors? A Experience B Qualifications C Personality D Knowledge E Others 41 How many students should there be in a class? A Less than 10 students B From 10 to 15 students C From 15 to 20 students D More than 20 students What skill are you most looking forwards to improve? A Speaking B Listening C Reading D Writing 10 How you choose an English school? A.Variety of program B Good reputation C Native english speaker as teachers D Having Vietnamese teachers E Easy to access F Cost G Class schedule H Others 11 Have you ever heard about the brand Summit? A Yes B No 12 If your answer to the previous question is yes , from which source did you know about Summit A From the social media B From Summit's events 42 C From other people D From other media 13 Have you ever interacted with a Summit sale person? A Yes B No 14 If your answer to the previous question is yes, how did the sale person interact with you? A Via email B Via phone call C Via social media D Via anpther way 15 If your answer to the previous question is 'yes', how would you describe the experience? A Very pleasant B Pleasant C Unpleasant D Very unpleasant 16 What is the farthest distance would you travel to join an English class? A less than 5km B from to 10km C From 10 to 15 km D More than 15 km 17 What would be the ideal price you would pay per hour? A Less than 100,000 VND B From 100,000 to 200,000 VND C From 200,000 to 300,000 VND D More than 300,000 VND 43 18 How likely would you consider joining an English course provided by Summit? A I'm not going to join any English courses by Summit B It's unlikely that I will join an English course by Summit C I would consider joining an English course by Summit D I will join an English course by Summit 19 Where you live? A Ba Đình B Bắc Từ Liêm C Cầu Giấy D Đống Đa E Hà Đông F Hai Bà Trưng G Hoàn Kiếm H Hoàng Mai I Long Biên J Nam Từ Liêm K Thanh Xuân L Tây Hồ 20 What is your age? A Less than 16 B From 16 to 18 C From 18 to 20 D More than 20 21 What is your job? A School student B University student 44 C Full time employed D Part time employed E Home maker F Unemployed 22 What is your gender? A Male B Female 23 What is your income? A I have no income B Less than VND million B VND to VND million C VND to VND million D VND to VND 10 miillion E More than 10 million 45 ... several changes when it comes to the marketing strategy of Summit when they want a transition from the Niche market to the Mass market, since the nature of the two market is different in many different... for the business to move from the niche market to the mass market, since the business is blooming and reaching maturity after years operating in the education market Results from primary research... Weaknesses - Lack of marketing strategy for mass marketing - Marketing and sale team is not large or ‘aggressive’ enough to pursuit a mass marketing program - Having operated in the Niche market with