Strategic positioning in higher education.

Harrison-Walker, L. Jean

INTRODUCTION

For many years, colleges have enjoyed a seller's market (Absher & Crawford, 1996). The baby boomers of the late 1940's through the early 1960's provided a large population from which to draw (Absher & Crawford, 1996). The shrinking supply of first-year college students, coupled with increased competition, led to a buyer's market in the 1990's (Lovelock & Weinberg, 1989). Since the 1990s, the situation has worsened. Addressing the University Board of Regents in August 2003 (Patton, 2003), outgoing University of Houston President Art Smith conceded, "There is a shift ongoing at this institution, in Texas, and across the nation concerning who pays for higher education. The move is away from taxpayers and state legislators to users."

It is widely acknowledged that today's environment is becoming more and more intensely competitive (Richardson, Nwankwo, & Richardson, 1995). Industries, like higher education, once considered safe from competitive forces are now finding themselves subjected to competition for the resources they once took for granted (Richardson, Nwankwo, & Richardson, 1995). Competition among academic institutions for students, faculty, and financial support is increasing (Karapetrovic, Rajamani, & Willborn, 1999). Furthermore, new non-university competitors in the form of industry and non-university educators have entered the higher education market (Friga, Bettis & Sullivan, 2003).

As competition has increased, so has the application of marketing in the field of higher education (Kotler, 1994; Kotler & Andreasen, 1991; Kotler & Fox, 1985). One critical application of marketing that is all too often neglected, misunderstood, and mismanaged is positioning. As noted by Kotler and Fox (1994, p.229):

 Many schools and institutions of higher education are fundamentally
 good and worthy, but they have done little to forge strong,
 individual identities for themselves. The institutions should
 strive to have a clear, positive image and a distinctive memorable
 identity.

The purpose of this paper is to enrich the marketing practices of academic institutions as they face increasing competition for students, faculty and funding by presenting a discussion of strategic positioning. Specifically, this paper defines the concept of positioning, explains its importance, distinguishes positioning from the similar psychological constructs of image and reputation, and discusses the application of positioning strategy as it pertains to institutions of higher education. The six-step process introduced by Aaker and Shansby (1982) is used to illustrate how universities should go about developing an effective positioning strategy to help them compete more successfully over the long term in an increasingly competitive marketplace.

POSITIONING AND ITS IMPORTANCE

Positioning has long been acknowledged as a core branding activity (Ries & Trout, 1981; Aaker & Shansby, 1982; DiMingo, 1988). Positioning is the act of designing an organization's offering and image to occupy a distinctive place in the target market's mind (Kotler, 2000). For example, Charmin is positioned as the soft bathroom tissue. Excedrin is positioned as the headache medicine. Nyquil is positioned as the nighttime cold medicine. MaltoMeal is positioned as the economy cereal brand. Grey Poupon is positioned as the expensive, top of the line mustard. Each of these brands holds a distinct position in its product category and the organization's product, promotion, distribution and pricing strategies are designed to communicate and support the brand's unique position.

The positioning decision is often the crucial strategic decision for a company or a brand because the position can be central to customers' perception and choice decisions. Further, since all the elements of the marketing program can potentially affect the position, it is usually necessary to use a positioning strategy as a focus for development of the marketing program. A clear positioning strategy can ensure that the elements of the marketing program are consistent and supportive. (Aaker & Shansby, 1982, p.56)

A university that has a distinct position is able to convey to prospective students what it is and what it stands for (Lowry & Owens, 2001). By directing all of its marketing efforts towards a desired position, a university maintains a coherence and unity in its activities and establishes a specific image (Lowry & Owens, 2001). Effective positioning focuses in what the target market perceives is important and not necessarily what university administrators believe is significant (Lowry & Owens, 2001).

POSITIONING VERSUS IMAGE AND REPUTATION

Positioning (or rather, the related construct, position) is often misused interchangeably with the psychological constructs of image and reputation. While there are similarities among the constructs, there are also very important differences. Both "images and reputations are each formed through a continuous and multifaceted process and are the products of a multiple-variable impression formation process located at the interaction among an institution's issued signals or texts, as well as contextual and personal factors (Cornelissen & Thorpe, 2002, p. 175; see also Fombrun & Shanley, 1990; Williams & Moffitt, 1997). However, despite the similar process through which both images and reputations are formed, the two constructs are not the same. Images concern immediate impressions while reputations are more enduring over time (Grunig, 1993; Williams & Moffitt, 1997).

"An image is the immediate set of meanings inferred by a subject in confrontation/response to one or more signals from or about an institution. Put simply, it is the net result of the interaction of a subject's beliefs, ideas, feelings, and impressions about an institution at a single point in time." (Cornelissen & Thorpe, 2002, p. 175) "Corporate image is the immediate mental picture that audiences have of an organization," (Gray & Balmer, 1998, p.687). Wilbur (1988) confirmed that most institutions have distinguishable images.

"A reputation, on the other hand, is a subject's collective representation of past images of an institution (induced through either communication or past experience) established over time" (Cornelissen & Thorpe, 2002, p. 175). Corporate reputations typically evolve over time as a result of consistent performance, reinforced by effective communication, whereas images can be fashioned more quickly through well-conceived communication programmes (Gray & Balmer, 1998).

A brand's position is how it is perceived in the minds of consumers, relative to competitors. The characteristics of a good position for the brand are thought to be (1) perceived uniqueness (e.g. different from competitors), (2) prevalence (e.g. how many customers are aware of it), and (3) strength (Aaker, 1991). Unlike image, position evolves and, if managed effectively, becomes stronger over time. Furthermore, position differs from image in that it implies a frame of reference, the reference point usually being the competition (Aaker & Shansby, 1982). This is an important distinction since it is not sufficient for an organization to have a positive image; in order to be successful over the long term, the organization must be perceived more favorably than the competition. The concept of reputation is closely related to the marketing concept known as positioning in that both are enduring over time and difficult to change.

APPLICATION OF POSITIONING TO INSTITUTIONS OF HIGHER EDUCATION

Positioning results from the specific way in which the four key marketing variables of product, price, promotion, and place (referred to as the 4 Ps) are managed (Lowry & Owens, 2001). In a collegiate environment, product becomes academic programs, price is tuition and financial aid, promotion is the communications program, and place refers to the delivery system for academic programs (Lowry & Owens, 2001). The size of a school, class sizes, and the student faculty ratio are important elements of the academic delivery system (Lowry & Owens, 2001). The advertising, public relations, admissions materials, and other promotions of the institution should be coordinated to make a unified positioning statement (Lowry & Owens, 2001).

Aaker and Shansby (1982) identify a number of ways in which a positioning statement can be conceived. The six approaches to positioning are: (1) by attribute, (2) by use, (3) by user, (4) by product category, (5) by price/quality, and (6) competitive positioning. In the following paragraphs, each of the six approaches is illustrated first by using popular brand examples and then by providing examples from academia.

Positioning by Attribute

The most frequently used positioning base is associating the brand with a particular attribute, product feature, or user benefit. For example, Charmin is the soft bathroom tissue and Viva is the durable paper towel.

Rensselaer Polytechnic Institute in Troy, New York determined that technological creativity was the core value that made its school unique. Brown University positions itself as the relaxed, open-minded Ivy League college (Lowry & Owens, 2001). Columbia College of Chicago positions itself on the attribute of innovation in the arts with its positioning slogan "create ... change"

Organizations are often tempted to position themselves along multiple attributes. However, positioning strategies that involve a number of attributes can lead to a diluted brand position and confusion in the minds of consumers.

Positioning by Use

The second positioning base is by use. Nyquil is the nighttime cold medicine and Excedrin is the headache pain reliever. In academia, Cornell has distinguished itself as the university-of-choice for majors in hotel administration (Lowry & Owens, 2001).

Positioned by User

Positioning by user is the third positioning base. For a long time, Schaeffer beer was positioned for the heavy beer drinker. Pepsi distinguishes itself from Coke by positioning itself for the young at heart (the Pepsi generation).

Florida's St. Leo College is positioned as the weekend college. Its target market is working adult students who have not finished college (Lowry & Owens, 2001). Heritage College (Toppenish, WA) focuses on multicultural populations that have been educationally isolated--notably, the Native Americans who live in the Yakima Valley (Sevier, 2002).

Positioning by Product Category

Some brands position themselves as belonging to a product category that they really do not belong to. I Don't Believe It's Not Butter positions itself as a butter. Seven-Up began associating itself with cola beverages in an effort to break free from consumer perceptions that Seven Up was a mixer rather than a soft drink.

The University of Phoenix is a corporate university that positions itself as a member of the university community. In fact, the University of Phoenix is a for-profit organization owned by Apollo Communications, a distance learning company.

Positioning by Price/Quality

In many product categories, some brands offer more in terms of service, features, or performance; a higher price and prestigious communication strategies serve to signal this higher quality to the customer (Aaker & Shansby, 1982). For example, Grey Poupon distinguishes itself as the top of the line mustard. Other brands distinguish themselves as the no-frills, low price alternative. Taking this approach, Malt-o-Meal is recognized as the economy brand among cereals.

In the academic world, the University of Michigan is often called "The Harvard of the Midwest." The University claims to be the largest pre-medicine and pre-law university in the country and to have the largest yearly research expenditure of any university in the United States. It is one of two colleges to have both engineering and medical schools ranked in the U.S.'s top ten. Michigan also has the highest tuition of any American state school.

Competitive Positioning

In all positioning strategies, the position implies a frame of reference, the reference point usually being the competition (Aaker & Shansby, 1982). However, some brands choose to make a successful competitor the reference point as the positioning strategy. The classic example of competitive positioning is the one used by Avis rental cars. Avis positioned itself as "number 2." Consumers fully understood that the number 1 company in rental cars was Hertz. Avis wanted to make sure that when consumers thought about Hertz as a provider of rental cars, they would also consider Avis. Being number 2 meant that Avis would try harder to please the customer.

On occasion, universities may use this positioning base as a means of associating themselves with more prestigious institutions. In 1988, Marion College in Marion, Indiana changes its name to Indiana Wesleyan University to associate itself with other elite Wesleyan Universities, such as those in Connecticut, Illinois, and Ohio (Lowry & Owens, 2001).

THE USE OF MULTIPLE POSITIONS

Just as with the temptation by organizations to position themselves along multiple attributes, organizations are also tempted to use multiple positioning bases. In other words, there is a tendency to try to be all things to all people. Not only would such an approach be difficult to implement, but it leads to a confused perception in consumers' minds. Effective positioning requires perceived uniqueness (the one and only brand associated with the particular positioning base), strength (a strong and clear association with the positioning base), and prevalence (whereby the majority of targeted consumers are aware of the brand's position.

MANAGERIAL IMPLICATIONS

In order to develop a positioning strategy, institutions must (1) determine what key attributes students use in comparing institutions and which attributes are most important and (2) identify the relative positions of the institution and its competitors on the important attributes (Kotler & Fox, 1994). In keeping with this general approach, Aaker and Shansby (1982) present a six-step process for developing a positioning strategy. The first step is to identify the competitors. An institution's competitors are anything that might receive the attention of a potential student as an alternative to the institution's offer (Kotler & Fox, 1994). In most cases, there will be a primary group of competitors and one or more secondary competitors (Aaker & Shansby, 1982). For example, a particular university often competes with other local colleges and universities. They may also compete with distant domestic and international universities as well as online programs that are targeting the same student populations. One way to identify competitors is to ask students what other academic institutions they considered. For example, Boston College asked all accepted applicants to list all the schools to which they applied (Kotler & Fox, 1994).

For each school listed, students indicated whether or not they were accepted. Students who decided against attending Boston College were asked the name of the school they planned to attend. The researchers focused on college choices of students who were accepted at both Boston College and a competitor and who thus had a real choice. (Kotler & Fox 1994, p.175)

The second step is to determine how each of the competitors is perceived and evaluated. In other words, what product associations (expressed as product attributes, user groups, and use contexts) do students use in evaluating the different academic institutions? For example, universities may be considered formal and impersonal or friendly and personal, safe or vulnerable, attended by socialites or attended by partiers, used for advancing knowledge or used to get paper in hand, diverse or homogenous, rigid or accommodating, used as an end in itself or used as a stepping stone, and so forth.

The next step is to determine the positions currently held by all competing institutions, including the institution conducting the research. For each institution, students may be asked to respond to questions such as: (1) With respect to other academic institutions, I would consider ABC university to be (list attributes identified in step 2); (2) I would expect the typical student at ABC university to be (list user groups identified in step 2); and (3) ABC university is most appropriate for (list uses identified in step 2). The institution would also want to determine which of the attributes, user groups, and uses are considered important and which serve to effectively distinguish one institution from another. However, planners must keep in mind that students enrolled at their institution are likely to rate their school higher than those institutions they did not choose to attend (Kotler & Fox, 1994).

The fourth step is to analyze the student base. Subgroups within the student population may hold different perceptions of the institutions. Students may be classified into segments defined by the product associations they consider most important. Next, the institution must decide on its positioning strategy.

Positioning usually means that an overt decision is being made to concentrate only on certain segments. Such an approach requires commitment and discipline because it is not easy to turn your back on potential buyers. Yet, the effect of generating a distinct, meaningful position is to focus on the target segments and not be constrained by the reaction of other segments. (Aaker & Shansby, 1982, p.61)

Because choosing a position is generally tied to the target market decision, an economic analysis that takes into account the potential size of each segment, the probability of penetration, and the projected contribution dollars that may be derived from each segment should be conducted. A second critical consideration in selecting a position for a university is to make sure it can deliver what it promises--and commit to doing so over the long term. For example, a university that positions itself as the personal university where students feel at home and develop personal relationships with faculty cannot then increase class sizes or move to online classes. Such moves would destroy the institution's unique position (and often it's competitive advantage), and have a negative impact on the institution's reputation for integrity.

The final step is to monitor the organization's position over time and make adjustments to the marketing strategy as may become necessary. In some instances, companies find it necessary to reposition their brands when either the company fails to achieve the desired position in consumers' minds or when the positioning base is no longer important to consumers. Crest toothpaste, originally positioned as the number one cavity fighter, likely found that cavity fighting became less an issue for consumers as fluoride was added to public supplies of drinking water and twice-yearly fluoride treatments became the norm at children's dental visits.

When it comes to marketing in any organization, there is always the money issue. Positioning--and the marketing plan necessary to develop and support the positioning strategy--takes up a large amount of organizational resources, in both management time and money (Romaniuk, 2001). According to John McGualey, president of Ghehrung Associates in Keene, New Hampshire, "Many universities make the mistake of spending too little on marketing ... A moderately sized corporation spends more on marketing than any college or university. It's endemic to higher education institutions to spend very little on marketing," (Bisoux, 2003). As explained by Firstenberg (1991, p.33), "For decades the driving force in designing a university program has been its internal sense of the educational value of its components. Shaping a university to compete more effectively against specific competitors is rarely factored into the decision making."

Furthermore, spending money on marketing in higher education can be highly controversial. One political issue for universities is the potential backlash of diverting scarce funds into a positioning 'exercise' rather than improving other resources (see Firstenberg, 1991; Lewis, 2003). University stakeholders must be made to recognize the crucial aspect of effective positioning and its long-term implications in this increasingly competitive academic marketplace--and the catch-22 situation they will likely face by not developing, implementing and supporting an effective positioning strategy.

Institutions that fail to secure a strong competitive position will lose funding and in turn, will be forced to slash their academic programs, facing diminishing quality with little room for maneuver. But institutions that take competitive positioning seriously will find their market niche and be able to offer quality educational services. (Firstenberg, 1991, p.33)

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L. Jean Harrison-Walker, The University of Houston--Clear Lake