Pricing. Question. Pricing strategy of an educational institution Pricing and pricing strategy in an educational institution

Price is the most important component of the marketing mix, since only it contributes to the accumulation of funds by the university. All other marketing activities, including market research, advertising, etc., are costly. Price is also the main criterion for making consumer decisions and, therefore, an element of the competitiveness and image of an educational institution.

Prices for educational services should ensure the financial sustainability of the educational institution and be maximally focused on solving the social problems of higher education.

The essence of price is revealed through functions.

The functions of prices and how they are implemented vary depending on the nature of the economic environment in which they are used. However, a number of so-called primary price functions are quite universal and applicable in various fields, including the education system. These include accounting, distribution, social and regulatory functions.

Accounting function is predetermined by the very essence of the price and shows how much it costs society to satisfy a specific need for a particular educational service.

However, this function in market conditions cannot be reduced only to measuring costs. To withstand competition, a university must constantly monitor its costs, compare them with the costs of competitors and develop measures to increase the competitiveness of the educational services provided.

In market conditions, the marketing policies of manufacturers, including educational services, predetermine the pricing strategy. At the same time, pricing policy is the main component of marketing activities, which is confirmed by the interchangeability of pricing and marketing functions. Thus, the function of self-regulation of commodity-money processes is based on the formation of prices, the level of which corresponds to the equalization of supply and demand. It is the competitive equilibrium of prices that stimulates the development of market relations. This function is acceptable in the field of education, because the demand for educational services can act as the main price regulator.

A typical example is the current pricing strategy for the implementation of educational programs in law and finance. The costs of training specialists in the fields of law, economics, pedagogy, and sociology are lower compared to the costs of training specialists in the field of pharmacy, medicine, architecture, technological and technical profiles. Nevertheless, the existing demand for economic and legal specialties has led to the highest fees for training these specialists on a contractual basis.

Distributive function prices make it possible to redistribute demand for a particular educational program and influence the promotion of a particular specialty or the numerical reduction in personnel training in specialties that are not in demand in the labor market. However, the independence granted to universities and the lack of a planned distribution of graduates hinder the operation of the distribution function.

In revealing the importance of the distribution function, it should be noted that its impact varies depending on the environment of application. As a result of the research, some regularities were identified. Thus, in state universities, contract prices for training specialists are much higher in comparison with non-state universities operating in this region. At the same time, tuition fees for newly opened specialties are set on a contractual basis, lower than in other universities. This pricing strategy is justified and understandable. A higher price is set for the guarantees that a state university provides, namely: a stable position of the university, issuing a state-recognized diploma, providing a deferment from military service, etc. And lower tuition costs are set for newly opened specialties in order to conquer the market and seize the initiative .

Considering that state universities have an educational base and receive budget funding, their additional costs are recouped even at a lower price, and this ensures higher competition and increases the attractiveness of the specialty for applicants. This explains the significant difference in tuition fees in state and non-state educational institutions.

In the 2008/2009 academic year, the cost of education in state universities exceeded the prices of non-state universities by almost 30%.

In the 2009/2010 academic year, the cost of full-time education at non-state universities has practically not increased since the beginning of the academic year. The cost of training at state universities in the general field of study "Economics and Management" is presented in Appendix 5.

The cost of training varies sharply across regions of the Russian Federation, which is explained by the level of income and solvency of applicants and their parents.

Social function prices. The price level predetermines the structure and volume of educational services, affects the standard of living and consumer budget of the family of a student in the field of basic and additional vocational education.

An example of the implementation of social principles of pricing is the system of discounts in force in a number of universities: for applicants from large families who have a low average income per family member; when two or more members of the same family are studying at a university; upon loss of a breadwinner; having a high score upon admission; with the aim of stimulating excellent learning. In these cases, non-state universities set discounts from 15 to 25%. Such a flexible pricing policy makes it possible to make education accessible to low-income families and attract talented applicants.

Regulatory function prices are related to the impact of the market on all areas of economic activity. Constant price fluctuations not only inform about the state of affairs, but also regulate economic activity. A rising price is a signal to expand supply; the price falls - a signal to reduce it. Information provided by the market forces universities to reduce costs and improve the quality of educational services.

In a market economy, the importance of price functions has changed, some have been lost, and the effect of others is limited. Purely market regulators and stimulants are mainly used, which does not contribute to the creation of an effective pricing mechanism. Prices for educational services, as a rule, are not justified, they are set spontaneously with a focus on demand and competition in the relevant region, the principles of formation are ignored.

The basic principles of pricing in the field of education are:

scientific justification of prices;
target pricing;
continuous improvement of the pricing process.

The principle of scientific justification of prices in a market economy it is practically not used; the main “engine” is the market. The scientific principle lies in the study and use of economic laws of development of a market economy, such as the laws of value, demand and supply. The scientific justification is based on an analysis of market conditions and identification of factors influencing the price. In addition, there is a need for a clear, unified, justified system for the formation of costs and reasoned profit margins, ensuring the development of the material and technical base and stimulating the improvement of the quality of educational services.

Price development methods are determined depending on their appointments. Target priorities for different educational structures, differing in type, purpose, forms of education and other classification characteristics, have significant differences.

In the field of education, when determining tuition fees, it is necessary to be guided by the following goals:

make educational services accessible to the general public, taking into account their ability to pay;
attract applicants from other regions;
promote specialties necessary for the development of the region;
emphasize the prestige of the specialty and the university;
guarantee price stability for the entire period of study;
reduce prices for a one-time payment;
limit recruitment if there is a surplus of specialists in the labor market, etc.

The most important pricing principle is continuous improvement of methods, calculations, reducing the labor intensity of determining prices, increasing the reliability of information support.

In modern economic theory, insufficient attention is paid to the principles of improving the price formation process, which has caused negative phenomena in the taxation system and the economy. These include significant errors in calculations, instability of payment, and inflation. Therefore, producers of educational services must be guided by the principles of improving the pricing process and monitoring the legality of setting prices and respecting the rights of the consumer of educational services.

In foreign economic theory, there are many price classifiers, which makes it possible to distinguish their different types. However, in the field of education, a limited number of prices are used: the price of selling educational services, the price is negotiated or contractual.

Pricing in education is the process of setting prices for educational services and products. To determine the price, a unified methodology is used, which is characterized by a set of basic provisions, principles and methods for determining the strategy, pricing concept, argumentation, price development and pricing policy management system.

In Fig. Figure 7.1 presents a diagram of the pricing mechanism in the field of educational services.

Rice. 7.1.

The economic literature widely presents the system of prices and their classification, but with all the variety of current prices, the issues of pricing for services in general and especially in the field of education are not fully covered.

The study of types of prices and methods of their calculation allows us to conclude that there are different definitions and characteristics of both types of prices and methods of their calculation. It should be noted that part of the conceptual apparatus was transferred from translated foreign literature, which is not always acceptable in the practice of a market economy; other definitions were inherited from the pre-perestroika planned economy.

Such conditions for pricing in the educational services market make it very difficult to theoretically substantiate pricing policy in the field of education, which previously did not exist at all.

The essence of pricing policy consists of selecting and maintaining the optimal price level in order for the university to achieve maximum success in the educational services market.

The development of the pricing policy of any educational institution is carried out in the following stages:

the capacity of the educational services market in the region is determined taking into account the demographic situation;
dynamics are studied and trends in the solvency of the population are identified;
a forecast of the need for specialists is made (labor market);
the indicators of competing structures are studied (student population, average annual enrollment, list of educational programs being implemented, tuition fees, staffing, availability of licenses and accreditations, material and technical base, etc.);
the planned costs for the implementation of educational programs are calculated according to costing items or cost elements (if these calculations are available, analyze them, make adjustments taking into account changes in costs and the influence of inflationary processes);
costs are calculated to be covered by profit (standard or target);
the contingent of students is determined by forms of education and specialties, taking into account the fulfillment of licensing requirements;
methods for calculating prices are justified;
price adjustments are made for individual programs or for a certain student population when using a system of discounts or price premiums; the validity period of prices and the conditions for their adjustment are determined;
prices are discussed at the academic council and approved by order.

In addition, when developing a pricing policy, it is necessary to take into account the method of calculating prices, the goals of the university, external and internal factors influencing pricing.

External factors influencing pricing– supply and demand in the educational market, state regulation of education, subjects of the market environment, competitors, etc. Most of the factors have already been discussed in the previous sections, so we will dwell in more detail on one of the most important factors influencing price formation – the demand for educational services.

The demand for educational services of a university is determined by the number of applications submitted. A university's admission plan for a specific specialty represents the university's proposal to meet demand. From a marketing point of view, the demand for an educational service is defined as the purchasing power of the population. In relation to the education sector, the law of demand states: the higher the price, the smaller the number of services for which there is demand, and vice versa, the lower the price, the more services are purchased by consumers. The demand for educational services can be depicted graphically in the form of a curve showing how many services, with changing prices and constant other things being equal, are purchased on the market over a certain period of time.

Example

Let's consider an example of constructing demand functions depending on consumer income and prices in the field of paid educational services.

When studying the dependence of demand for educational services (y) on income (g) at constant prices (R) Engel curves y = f(z) are constructed, the type of which depends on the type of goods and services (primary necessity, secondary necessity, luxury). Educational services can be classified as a group of essential goods and services, for which the Engel curve looks like a curve convex upward.

When choosing a demand function, you can use the so-called Tornqvist function, which for a given group of services has the form:

where z ≥ b.

This function, the graph of which is shown in Fig. 7.2, has a demand limit. At the same time, the demand for paid educational services appears only after the consumer’s income exceeds the value b. Parameter values a, b and the constants c in this demand function are determined empirically based on statistical data.

Rice. 7.2.

When studying the dependence of the demand for paid educational services on the price of these services (p) with a constant consumer income, the corresponding demand function is constructed on the basis of determining the profit P of an educational institution, which is expressed as:

where is the cost function.

Among the internal factors influencing pricing, training costs prevail. In modern economic theory (largely borrowed from Western countries), the term “costs” is gradually replacing the term “cost”. In business practice, these two concepts do not always act as synonyms, which is explained by the current accounting system, in which costs and costs are formed on different accounting accounts and are used in different areas of activity. Costs are formed in trade and public catering, and in industry and other areas (including education) the cost is determined.

Thus, the pricing policy of the university should be aimed at the break-even operation of higher educational institutions and the ability of buyers to purchase educational services at prices acceptable to them.

Zvereva N.V. Features of marketing educational services in the field of higher professional education (using the example of distance learning): abstract of thesis. dis. ...cand. econ. Sci. M.: VZFEI, 2007.

Modern problems of pricing in the OU market are among the most difficult to resolve for a number of reasons, and above all - under the influence of long-established and very strong traditions and stereotypes. Education in our country has traditionally, along with healthcare, been and is still perceived in society as a sphere of “free” services. And although, like any other budgetary sector, it is financed from the pockets of taxpayers, the external freeness of education has appeared in society for decades not just as something taken for granted, but even as an “advantage” of the existing social system.

Thus, the question of the price of educational services (with the exception of payment for tutoring services, preparatory courses, and various illegal forms of payment) for the population of the country virtually did not exist. In practice, this also applied to enterprises as consumers of specialist personnel, since even the formal introduction at the end of the eighties of a fee for trained specialists in the amount of three thousand rubles not only did not mean the formation of the real price of educational institutions, but also did not lead to the mandatory receipt of transferred funds into the accounts of specific educational institutions. institutions.

In fact, the exclusive seller and buyer of the OU was the same single subject - the state represented by governing bodies, incl. - education and higher education. It was this circumstance that obscured the problems of pricing for OU and excluded the very possibility of establishing a real price as a result of negotiations between buyers (consumers) and sellers (producers) of OU. The lack of prices, in turn, preserved the situation when other, non-price factors of consumer choice did not work, and above all - stimulation of the promotion of services, market organization of their distribution, etc. Educational institutions were practically not interested in proactively expanding the volume of services provided or improving their quality , in the reconstruction and renewal of funds, etc.

And today the divide between supporters and opponents of market approaches to education lies on the issue of recognizing the appropriateness and progressiveness of the very concept of “market price of educational services” (which is unjustifiably replaced by the polemical “price of education”). The opposing argument, in particular, somehow uses the social attractiveness of maintaining free access to education for low-income segments of the population, as well as the not unreasonable fear that the commercialization of educational institutions will provoke them towards the cheap (both in terms of cost and social value) " certification", entertainment, narrow pragmatism, departure from the tasks of ensuring the fundamentality and humanization of education. However, the actual non-increase and, even more so, reduction in government spending on education needs in the absence of market, price relations between consumers and educational institutions producers practically leads to the same sad consequences, the main of which is a decrease in demands on the quality and efficiency of education and the inevitable growth in this regard lack of demand for the OU.

Stereotypes and traditions in relation to the price problems of educational institutions

As experts rightly point out, the most common to this day is a very one-dimensional approach to evaluating activities in the field of education: for example, according to the criterion of the amount of expenses (with budget funding this is only possible with an increase in the number of students), or according to the expected, but practically not calculated benefits " for the whole society." Under the latter, which were also called “needs of the national economy,” often hidden only the benefits and priorities that were quoted among the authorities and government structures.

In this regard, almost all known, and especially all actually used methods for determining the cost targets of educational institutions, and in particular, training specialists, were aimed at organizing (or changing) the relations between educational institutions, on the one hand, and government education authorities, those who financed them from the budget, on the other hand. These methods essentially did not take into account the actual demand for educational institutions, especially since we were not talking about effective demand, but about their personnel status, abstracted from the financial situation of consumers, as it was presented to industry management bodies.

The initial basis of these methods, in the best case (that is, if the calculations were actually carried out), was the calculation of the cost of training, training a specialist of a certain profile by an average educational institution of a certain level, and the methods themselves fit well into the general category of “list pricing method.”

The list price method is also known in a market economy. Its general scheme can be represented by formula (3):

C =	WITH

	1 - N p

P - selling price of goods (services); C is the total cost of a unit of goods (services); Np - planned rate of profit, in decimal shares of sales volume.

At its core, this is the simplest pricing method, which is the addition of an amount corresponding to a given percentage of profit to the calculated cost of production. This is how the so-called the primary price, which subsequently acts as an object of management in the pricing strategy.

This method is popular in cases (in developed markets) if sellers, for some reason, are not competent enough in marketing and are much more aware of the cost of production and sales of products than of consumer demand and its conditions. For them, directly “linking” the price to the cost of production is very tempting, because simplifies pricing to the point of automatic use of the above formula.

Another reason for the prevalence of this method is the comparability of prices in structure, which makes it possible to operate with prices for products of a diverse range and minimizes competition between goods within it.

It is also believed that this method is the most reliable for both the seller and the buyer: when demand intensifies, the buyer is protected from the seller’s attempts to “take too much” from him, and sellers can always be guaranteed to return the invested capital. This method is generally the simplest and easiest in both pricing and price control.

However, the market is well aware of the fundamental limitations of this pricing method. Its first and main drawback is that it does not take into account demand as such and therefore cannot lead to a balance in the relationship between demand and supply of goods and services.

Secondly, it clearly directs manufacturers and wholesalers and resellers to inflate the cost of products, which, with a fixed rate of profit, becomes the most convenient way to increase its mass.

Thirdly, and this is also important, the determination of the level of profit margin (which is included in the formula) occurs subjectively, largely voluntarily, and, as a rule, at the highest levels of management, preserving the power of management structures over production, and especially over consumers. All these features are recognizable and clearly appear in the portrait of an administrative-command economy. The list price method is its “native” method: it is based on the production cost of products and leaves out the scope of market priorities.

E. N. Popov and T. A. Evstigneeva classified the methods we used for calculating the cost of training specialists (see diagram in Fig. 24). As can be seen from the diagram, three main classification criteria are used:

the nature of the initial information used (according to fact, according to plan and according to approved standards);
the number of cost distribution bases used between costing objects, which are understood as
students of various categories (with one or more cost distribution bases);
characteristic features of the methods (reliance on: the number of students that can be reduced to full-time education; on staffing standards; on standards for expense items; on the specific labor intensity of the curriculum in the specialty of training).

The authors of this classification propose to determine the price of specialist training also within the framework of the price list method, with the peculiarity that the profitability standard is determined in relation not to the full cost, but to the wage fund, which, in their opinion, will eliminate the interest of educational institutions in inflating the costs of materialized labor. In particular, the standard price (Pi) for training a specialist in the i-th specialty is determined by them using formula (4):

C i = C i +	р x З i

	100

Ci - full standard cost of training a specialist; Zi is the basic salary, which is one of the components of the cost Ci; p - profitability standard to the basic salary.

The authors of the methodology recommend taking the “p” value equal to 50% for all educational institutions, regardless of their profile and place in the system of continuous education. They admit that in terms of profit, this is equivalent to a profitability ratio to cost equal to 20% (with the share of basic wages in cost equal to 40%). At the same time, their standard cost structure looks like this:

wages (with social security charges) - 48%;
payment of scholarships to students, on average - 25%;
costs for replenishment of wear and tear and major repairs of fixed assets of universities - about 16%;
costs for ensuring the functioning of the university - 11%, incl. about 60% of the latter amount is office and business expenses.

The attempt to “appease the appetites” of educational institutions in relation to materialized labor, carried out by the authors of the methodology, in our opinion, cannot be considered adequate either to the situation in education as a whole (i.e. in the target sense), or in terms of the proposed procedure (in the instrumental sense).

The methodology actually calls for education to the antediluvian “work on the knees”, without the use of new equipment, computers, buildings, etc., because When spending on these items, the overall level of profitability will be forced to decline.

The counterargument, which is that with an increase in the capital-labor ratio, labor productivity increases and fewer workers will be needed, which is quite natural for the sphere of material production, does not work in relation to education. The fact that new computer classes, overhead projectors or multimedia tools appear in schools or universities will not actually reduce the number of required teachers or teachers - the quality of education will simply improve. This is especially true for the construction of educational buildings and social and cultural facilities.

It is also clear that the proposed calculation technology, which places the amount of profit in an exclusive direct dependence on the amount of labor costs, would provoke their overestimation no less than a similar dependence on material costs.

The saddest thing is that the emphasis placed in this methodology was put into practice in conditions of a severe shortage of budget funds actually transferred to educational institutions. In particular, in mid-1995, higher education institutions were forced to direct all funds received from the budget exclusively to wages, although this was in no way related to the profitability indicator.

So, we have before us an approach that prioritizes the cost of educational institutions for an educational institution and supplements it with a certain certain (including standard) level of profitability. Of course, timely analysis of the evolving cost of production, its rationing and forecasting is an integral and obligatory part of working out the financial side of any business. However, in a mature market, the selling price of any product depends not only on the level of cost (often also dictating its limitations), but also on many other factors that were left out of consideration in this case. Therefore, the question is not from which part of the cost it is more expedient to calculate the selling price of the op-amp, but that the market dictates completely different requirements here.

Price calculation methods that are still widespread in the domestic education system are a clear manifestation of the classical production and sales orientation of a company that sells what it is easier for it to produce (or what it is ordered to produce by a higher management body) and asks for the price for these products that she manages (or is again told) to fix it. Such a pricing policy can only be costly. What does the market offer? Commercial educational institutions demonstrate a very wide variation in the selling prices of their services, even within the same training profile and the same duration of training. Thus, according to the MGIMO School of International Business, the prices offered by Russian business schools are as follows: short seminars (1-5 days) cost 5-20 dollars per day, medium-term programs (1-3 months) - 10-40 dollars per day week, long-term courses (3-10 months) - $30-125 per month, MBA programs (Master of Business Administration, with a duration of study offered in capital educational institutions from 9 months to one and a half years) - $2000-8000 per program. All prices are per listener (although, of course, they may depend on the level of staffing of the group), as of 1993.

How to understand whether these prices are high or not? Compared to world standards, they look ambiguous. So, for example, the cost of tuition and necessary books at the best (ranked) American universities (excluding payment for accommodation, transportation, etc.) in 1995 was (in US dollars): Yale University (Connecticut) - 18,100 Princeton University ( New Jersey) - 18.380 Harvard University (Massachusetts) - 19.820 Massachusetts Institute of Technology - 18.655 Stanford University (California) - 17.328 Dartmouth College (New Hampshire) - 18.834 Rice University (Texas) - 9.250.

There are other examples. The cost of tuition for the ten-month Harvard Business School International Teachers Program (which will be discussed in more detail in the next chapter) in 1988 was 2661.4 British pounds sterling.

The cost structure of this program may also be instructive. It should immediately be noted that part of the costs associated with the admission of students is variable and depends on their number, while the other, primarily teachers’ salaries and administrative expenses, is practically unchanged.

Thus, salaries of teachers and program directors amounted to 42%, administrative expenses - about 29%, payment for transportation services and housing - about 12%, printing services and office expenses - about 11%, audit and legal services - less than 2%. The balance of funds at the end of the year was 4.5%, but it should be noted that in the income structure over 5%, i.e. A slightly larger amount is bank interest income on invested capital.

It is clear that the cost structure of foreign and domestic educational institutions differs quite significantly for many reasons. At the same time, market orientation in pricing comes from fundamentally different positions. An acceptable selling price is determined from the perspective of the benefits provided to the consumer who receives the product. This takes into account both its newly discovered opportunities and the inevitable costs that the consumer will be forced to make after purchasing the product for its normal consumption. Marketing looks at selling price primarily from the consumer's perspective. What might these positions be for OS consumers?

Send your good work in the knowledge base is simple. Use the form below

Students, graduate students, young scientists who use the knowledge base in their studies and work will be very grateful to you.

Similar documents

Formation of pricing policy is an important part of marketing. Distinctive features of pricing in different markets. Features of supply and demand in the service sector. Stages of calculating the price of a service. Scheme of pricing strategy in the services market.

abstract, added 11/15/2010

Prices and pricing: theoretical aspects of the problem. Types of prices. Pricing methods. Pricing strategies. Pricing strategies. Market price analysis. Selecting a pricing method. The price of balance. Discount strategy.

course work, added 02/26/2003

Fundamentals, principles and methods of pricing. The economic state of the country in the field of pricing. Pricing strategy in marketing conditions. Price as a marketing tool. Selecting a pricing method. Marketing pricing policy.

test, added 10/20/2010

Price policy. Pricing in different markets. Pricing. Definition of demand. Cost estimation. Analysis of prices and products of competitors. Selecting a pricing method. Setting the final price. Components of marketing.

course work, added 04/09/2005

Setting the price. Pricing. Definition of demand. Cost estimation. Selecting a pricing method. Final pricing. Price adaptation. Reaction to changes in prices of competitors and consumers. Response to price changes by competitors.

course work, added 10/19/2008

Price - stages, goals and pricing strategies. Price elasticity of demand and their ranges. Fixed and variable costs. Setting price based on target profit. Types of competition. Selecting a pricing method and setting a base price.

lecture, added 04/12/2009

Characteristics of price-forming factors. Sources of information for price analysis. The essence of the cost pricing mechanism. Administrative methods of setting prices and positioning of new products. Price flexibility at different stages of the “life cycle”.

lecture, added 01/20/2012

Basic concepts and price qualification. Strategic goals and pricing methods, the basis of its formation in various markets. Analysis of pricing of the enterprise Sharya Mineral Water LLC. Recommendations for choosing a method for determining the price of a product.

course work, added 10/21/2012

Pricing strategy is the institution’s choice of the possible dynamics of changes in the price of services in market conditions that best corresponds to the organization’s goals. The demand for educational services is formed under the influence of changes in the labor market and subsequent changes in public opinion about the prestige and profitability of professions. This explains the inertia of demand for educational services, that is, the delay in the reaction of consumers of educational services in relation to changes in the labor market - the “time lag”. The cycle of changes in demand for educational services can be about 10 years. Major changes in the economy and labor market cause huge waves of fluctuations in demand in the educational services market. The sensitivity of demand for various professions to changes in economics and politics varies and depends on the characteristics of the profession. Increased demand for specialties in economics, management and law creates “big waves” that lead to an overproduction of specialists and can cause a crisis for educational institutions. Betting on these specialties can generate significant income in the short term, but requires caution when planning the university's work in a strategic direction.

In addition to considering these issues, the educational institution must conduct a more in-depth analysis. It is necessary to determine the stage of the life cycle of your educational services, the significance of each educational service within the range of specialties of the educational institution, the intentions and resources of competitors, as well as possible reactions of citizens to price changes. However, it is not always possible for an educational institution to conduct a comprehensive analysis of alternatives when prices change. The competitor most likely spent quite a long time preparing for the decision to change prices, and the educational institution needs to respond to this step within several days. Almost the only way to reduce the time it takes to decide on retaliatory measures is to predict in advance the possible price maneuvers of a competitor and prepare in advance possible retaliatory measures for each of them.

There are various options for responding to the actions of competitors. Thus, if an educational institution determines that a competitor has lowered its price and that this pricing maneuver is likely to have a negative impact on the number of applicants, it can decide to keep the price and profit at the current level. An educational institution may assume that by leaving the price at the same level, it will still not lose a significant share of the market, but by lowering its price, it will lose a significant part of the profit. An educational institution can take a wait-and-see approach, postponing retaliatory measures until such time as it has more information about the results of a competitor's pricing maneuver. At this point, the educational institution may be willing to go so far as to retain more profitable clients and lose less affluent ones to a competitor. The main argument against such a retention strategy is that during the “waiting” period, the competitor can strengthen its position and begin to act more confidently, while the educational institution will miss the moment to take retaliatory measures.

If an educational institution determines that an effective response is possible and necessary, it should pursue one of three response options.

1. SPECIFICS OF SETTING PRICES FOR EDUCATIONAL SERVICES

The pricing policy of a university concerns vital aspects of its existence and further development. Pricing is a conceptual expression of the strategic goals of the university. It reflects the nature of the services produced, their characteristics and the characteristics of the corresponding market.

In general terms, services have distinctive features from goods. They:

intangible (do not have physical form, weight, volume);
inseparable from the consumer (they are of an individual nature of consumption, they cannot be separated from the source. The teacher cannot provide the service if there are no students);
unstorable (they cannot be accumulated and transported). It is really impossible to create a stock, store and store educational services. Educational and methodological materials, books, textbooks, monographs, dictionaries are an encoding of the main provisions, opinions and intentions of the author. But educational services are always a process in which the decisive role is played by university staff and the consumer (teacher - student);
inseparable in production and consumption (they exist simultaneously);
unstable in quality (they cannot be repeated or standardized; quality depends on who, when, where and how the service is provided);
have no property (lack of ownership). Services are not, unlike goods, anyone's property.

The material and technical capabilities of the educational process are limited.

It is impossible to accurately predict demand for educational services. This is even more true regarding a new educational service (novelty). Demand for this service is almost impossible to predict. It is impossible to actually test the new product. Bringing such services to the market is always fraught with risk.

Educational services relate to the socio-cultural sphere of society. And this area determines the characteristics of supply and demand as fundamental factors in determining prices.

Firstly, the demand for educational services is always individual and precedes their production. In other words, it is almost impossible to prepare in advance and produce the service in the form in which there is demand for it.

The inseparability of supply and demand determines the local nature of the services market. Moscow universities are much better equipped and staffed than peripheral ones. It is Moscow universities that determine the upper limit for tuition fees.

Secondly, the process of price formation is due to their high social significance. Therefore, the state subsidizes a number of universities, mostly state-owned. Purely market tools for organizing the activities of these universities are not always effective, which is why they strive to be closer to the budget. There is a need for a combination of free and paid services, and the trend of price discrimination towards certain consumer groups continues.

In this regard, university marketing management has two directions: marketing of a non-profit structure and marketing of its commercial structure. We mainly study the second one.

Thirdly, the sphere of educational services is characterized by asymmetry of information. A consumer who does not have reliable information about the quality of the service offered considers its price as an indicator of quality and reliability.

The nature of the market in which it appears has a significant influence on the process of setting prices for educational services, the choice of marketing strategy and pricing policy of a university.

Schematically, the market for educational services looks like this (Fig. 1).

Picture 1
Scheme of the educational services market

The market for educational services is all potential consumers seeking to satisfy their educational needs and capable of entering into an exchange relationship with the seller.

In relation to higher education, an educational service (product) is understood as the process of obtaining a certain set of knowledge and practical methods of applying it, capable of satisfying the individual’s need for his professional status and growth.

This article reflects the practical experience of the formation and implementation of the pricing strategy and policy of the Russian State University for the Humanities.

Universities have long acted as independent operators in the educational services market. State universities, having lost 100% budget funding and received relative economic freedom in return, are commercializing their activities.

Currently, the educational services market is monopolistic in nature with elements of oligopolistic competition.

2. CONCEPT OF PRICE IN THE MARKETING MIX SYSTEM

Pricing is the process of setting a price. There are two types of prices for educational services.

The demand price, i.e. the maximum price that consumers would be willing to pay.
The offer price is the minimum price for which the manufacturer would agree to sell its services. Ideally, these prices would satisfy both parties. But in practice, especially in market conditions, this usually does not happen.

By not finding the optimal balance, the manufacturer loses more than the buyer. Having failed to further take effective measures to reduce costs and conserve resources, the manufacturer must eventually stop production or abandon the production of this type of service.

The price to the consumer is more than a certain amount of money that the seller asks for. The price includes other than just monetary elements. This includes risk, reliability, evidence of quality, etc. The perception of price largely depends on the information about the product that the buyer has.

It may seem that the target group of consumers is well aware of the current prices of competitors and other universities for the same educational services and rationally makes decisions about purchasing a more advantageous priced service. Many studies show that consumers perceive price as an indicator of quality. This is explained by the same asymmetry of consumer awareness about the quality of educational services. Here, promotion of a trademark or brand can play an exceptional role.

The marketing strategy traditionally relies on its 4 “Ps”; for educational services, the boundaries of the marketing mix are wider; we use the 7 “Ps” (personal, process, physical surround), and the seventh component is the educational environment (the physical space where the service is provided).

This is what the marketing mix of educational services looks like (Fig. 2).

Figure 2

3. ANALYSIS OF THE PRICE ENVIRONMENT

Analysis of the demographic, economic and social environment provides a reliable guide to the correct approach to pricing. Changing environmental characteristics influence tactical decisions regarding price adjustments.

The main cost elements of setting prices are the costs of remunerating teaching and administrative personnel and the costs of maintaining and equipping classrooms and buildings. Any change in fixed or variable expenses, be it an increase in tax rates, an increase in utility bills, an increase in salaries, or bonus rates affects the level of profitability.

The environmental factors influencing prices include the main ones: type of educational institution (university), buyers, competitors, and other entities. On this basis, a pricing strategy, a specific price and tactical maneuvers are built.

Type of educational institution (university)

We rely on an analysis of the practical application of pricing at the Russian State University for the Humanities, which trains specialists with higher education in more than 30 specialties.

Buyers

Buyers have different reactions to prices, which depend not only on their different awareness of services, but also on their social status, the role that the purchased service can play in their personal plans and life goals. The main social composition of our target audience is people with middle class status, of which 80% belong to the group with an income of 150 to 300 dollars per person per family, 20% of them have an income of more than 300 dollars per person. These data were obtained through surveys of applicants and university students. When analyzing the forecast, we used research data from the analytical group of the Expert magazine (report “The Middle Class in the Education Market”).

Compared to 2001, the solvency of our target audience in 2002 increased. According to Expert magazine, 50% of families in Moscow believe that their financial situation has improved, and about 60% highly assess their financial capabilities. At the same time, most of them are ready to pay for a second higher education, graduate school and additional business education.

In February-March 2002, during the spring wave of the “Middle Class Lifestyle” research project, 3,040 respondents representing 3,040 families and households were surveyed in 16 of the country’s largest cities.

The main criterion for selecting respondents was an income level exceeding $150 per month for each family member (Fig. 3).

Figure 3
Distribution of respondents by income level at the beginning of 2002 in the 16 largest cities of the country (income per family member per month)

In total, in Russia at the beginning of 2002, 10-11 million families (20-22% of the total number of Russian families) had incomes from 150 to 1,000 dollars per month for each family member. The information obtained allows us to extend the conclusions obtained during the analysis of survey data to these 10-11 million families.

Of interest are the obtained data on preferences for investing in the education of funds depending on the amount of income per family member (Table 1).

Table 1
“Would you like your children to receive an education?” (Distribution depending on income in US dollars per family member per month, %)

These figures indicate that average Russians prefer higher education for themselves and their children. Among these categories, 14.8% of respondents are willing to pay for business education, and 18% are willing to pay for two higher education degrees.

The vast majority of respondents (more than 90%) want their children to receive higher education.

30% would like their children to receive a higher education in the humanities.

Among those whose income is less than $400 per month for each family member, 31% want a liberal arts education for their children; among those whose income is more than $600, only 18%.

Among those who themselves have a higher education in the humanities, 43% want the same education for their children. But among those who have a higher technical education, only 22% want their children to receive a higher education in the humanities.

Competition

The effectiveness of pricing depends not only on consumer demand and buyer response, but also on the competitive behavior of the university itself and other participants in the educational services market.

It is known that the structure of the market depends on the number of sellers and the degree of differentiation of services.

When determining prices, the prices of competing universities of the same type play a major role. Of course, sales growth can only be achieved by reducing competitors' sales volumes and reducing their market share. Real price wars in the education market are not so far away, given the approaching critical phase of the demographic situation in the country.

For successful competitive strategy and tactics, it is necessary to constantly monitor competitors' prices and their pricing maneuvers.

The difference between your own price level and the prices of competitors is revealed through the presence of significant competitive advantages.

The most significant ones are those related to costs and the unique characteristics of the service.

A cost advantage may be that the service can be produced or distributed at a lower unit price than competitors. This opportunity is provided by the state status of the university, its favorable location, established teaching staff, research base, unique specialties, etc.

The uniqueness of services depends on their value characteristics. For example, at the Russian State University for the Humanities there are unique specialties and specializations such as: artificial intelligence in the humanities, sociology of marketing, sociology of politics, business PR and advertising, organization and technology of information security. The value characteristics of these services make it possible to set prices for them higher than those of competitors.

In a number of leading specialties at the Russian State University for the Humanities, we compete with 7-8 universities. In other specialties, the number of competing universities reaches 15-17 in Moscow.

There remains high demand for such specialties as law, economics, management, management, psychology, marketing, advertising, and information technology. Our market share for most of these services is insignificant and does not allow us to count on high demand. In this case, prices for these specialties do not exceed the prices of market leaders. At the same time, we have a high market share in popular specialties such as document management, information security, psychology, sociology, and archival science.

Other subjects

These include, first of all, government agencies, the Ministry of Education of the Russian Federation.

Certain laws and regulations impose legal restrictions or expand the legal capabilities of other market operators. Prohibitive or restrictive activities indirectly or directly affect pricing strategy. This is especially noticeable in the regulation of financial relationships in the structure of distribution channels of educational services (partners, representative offices, branches in the regions).

4. PRICING OBJECTIVES

Analysis of the macroenvironment of price functioning significantly influences the setting of pricing goals.

The goals of the university, like its strategy, stem from its mission.

Here is an approximate set of goals in pricing educational services of a university:

Profit maximization, return on investment, targeting different market segments.
Cost reductions, cost recovery
Maximizing market share, containing the market.
Focus on demand, increasing sales volumes, using flexible prices for services within the product line.
Focus on competitors' prices.
Striving for social justice.

Often several goals are used, and then management is required to clearly agree on them. We focused on the last three.

5. STRATEGY AND PRICING TACTICS

Pricing strategies can vary, but they all depend on two main factors:

characteristics of target markets;
goals of the university (segmentation, competition, price flexibility within the product line).

Customer segments are difficult to define, but a strategy aimed at consumer demand is the most preferable.

In practice, the most common strategies can be found:

a sharp reduction in prices for services relative to prices offered by other universities;
offering customers to pay full price for the entire set of services (including additional ones) and at the same time benefit from discounts.

Many universities (usually commercial ones) offer their products (specialties) of lower quality, but at an inflated price. Managers of these universities are confident that uninformed consumers will take these inflated prices as an indicator of quality.

Institutions that offer a wide range of educational products and services, for example, universities use differentiated prices. Thus, the price for some services is set lower than for services that are in high demand, for example, law, global economics, management and entrepreneurship.

A wide portfolio of services is also characterized by an image pricing strategy. Status consumers acquire the version of the specialty that they value higher than others. For example, art history, applied linguistics, philology of ancient culture.

The so-called combined pricing deserves special attention. This strategy bundles several specializations into one package at a price. Its use is justified both by differences in consumer preferences and by their uncertainty in choosing a specific service. Here, different products will be offered at different retail and wholesale prices in one package.

The most accessible method is to calculate a markup on the average cost of services. All universities use this method. It can be easily calculated as a cost plus profit model. Economists use it especially often, since it’s easy to calculate your expenses and make a markup. It can be considered universal if there is no serious price competition, and if there is confidence that buyers will pay exactly this amount of money.

What does the manager do if the price and offer fail to match? He studies the structure, quantity of demand, its elasticity from price changes.

The relationship between the amount of demand for a specific service and its price is expressed by a demand curve, which, in accordance with the law of demand, has a negative slope.

The slope of the demand curve, its elasticity, determines the size of the price reduction required to increase demand by 1%. It is known that if the curve has a steep slope, a significant reduction in price is required to reach the point where demand is 1% more. Conversely, if the demand curve is flat, you can limit yourself to a slight decrease in price (Fig. 4).

Figure 4
Graph of elasticity of demand curve

Several measurements of price elasticity for specialties in 2001 and 2002 were carried out. Prices for some specialties were changed in 2002. For some positions they were raised to 35%, for others they were reduced. We recorded an adequate consumer reaction. Sensitivity to prices for educational services exceeded all our expectations. Buyers responded to some specialties with a sharp decline in demand, which required the price to be reduced to a level below 2001 and slightly reduced for some other items.

In practice, the price setting method linked to the demand price is widely used. Marketing managers collect information about the prices of nearby competitors and determine the “price ceiling” for a given service, that is, the amount that consumers are willing to pay. Based on the “ceiling”, a price is set, of course, not lower than the cost price.

It is close to the method of setting prices “based on competitor prices.” Its essence is that a marketer, studying the educational services market, determines which universities are its leaders and which are outsiders. In the future, when forming your own price, you can focus on the current price level. This method is known as “following the competitor.” Analyzing their own capabilities (expenses), managers compare their products in terms of quality, perceived value by consumers (brand, location, etc.) relative to competitors' prices. The prices set in this way may be higher or lower than the prices of other market operators for similar types of educational services (specialties and specializations, second higher education, MBA, postgraduate studies, courses, etc.).

Another pricing method is the flat and flexible pricing policy. Without changing the price for a long time, the university demonstrates its stability in the provision of services, while the number of services in one product line may change. A flexible pricing policy is the establishment of various discounts or markups. The price here varies depending on the provision of services, but not depending on who purchases them.

When setting the final price, the psychological aspects of its perception by the buyer are taken into account (unrounded prices, only in rubles).

Price is the only element of the marketing mix that directly generates income; its other components contribute only to expenses.

Pricing policy is a complex problem, the solution of which must take into account macro- and microenvironmental factors (costs, demand, competition), including past own mistakes and mistakes.

The key method of pricing in marketing is to study the positions and opinions of customers, their perception of the value of the service. Here it is important to determine the needs and assessments that express the relationship between prices and product value.

When pricing based on perceived value, the main thing is to capture the consumer's point of view of the brand.

Information obtained from consumers regarding their approach to evaluating services and the benefits they believe they will receive in the future is essential. Thus, during surveys of representatives of the target audience, data was obtained on their planned costs of education.

For the marketing of educational services, the importance of the sociocultural factor increases significantly. Social roles and statuses that consumers strive for largely determine their choice and determine their attitude towards the price of a service. Educational services in purchasing behavior are considered not just as an exchange of money for a specific set of knowledge, but as an exchange for individual, personal, social benefits, and for the lifestyle that they may have in the future.

Pricing in this case should take into account not simply and not so much the traditional cost characteristics of production and provision of educational services (cost and profit, markup), but rather the significance of the brand and its assessment by representatives of the target audience.

The brand, awareness of its influence on the emotional, psychological behavior (not only cognitive) of consumers, significantly changes the existing traditional ideas about the pricing of educational services.

Familiarization with a specific brand of a university, which has a reliable and high reputation, becomes decisive for the consumer when he decides to part with his money. One can strongly adhere to the view that the brand, as an added value, will increasingly determine the final price of a university’s educational service.

This indicates increasing competition in the education market, increasing the role of university marketing communications, positioning of its services, and the formation and strengthening of its unique brand.

To estimate future demand, you can use some other forecasting methods: expert assessment; market testing; assessment of demand by intermediaries, etc. The general limitation of all these and other methods is that pricing managers for educational services cannot control the final prices on the market. Prices are difficult to change after concluding a contract for the purchase of a service; they cannot be promptly adjusted.

The strategy determines the long-term structuring of prices, and the tactics determine their prompt change (price discounts). For example, strategic pricing may have the goal of increasing overall sales in the long term (for example, if the classroom fund allows, you can strive to recruit as many students as possible for a paid form of education), while price discounts are measures to stimulate sales, they relate to pricing tactics.

The most valuable thing here is getting the immediate effect of the stimulating price reduction. The positive response to incentives is greater than to advertising, and the costs cost nothing.

This tactic brings good effect when it is brought to the consumer through the media. This is where the real seasonal advertising fever begins. This is the time when all media outlets make good money.

This is what the proposal form looks like for prices for majors and specializations, presented by the marketing and advertising department to the university management (Table 2).

table 2
Offer form for prices for specialties and specializations

DAY DEPARTMENT

Speciality,

direction

(specialization)

budget places

who applied for a paid form

Tuition price (thousand $)

Price increase 2000 to 2001,%

Total amount for specialty 2002

Required number of people 2002-2003

high, medium, low

New price

6. CONCLUSIONS

Recently, universities have increasingly begun to pay attention to pricing policy.

A pricing strategy can bring the desired result if systematic work is carried out to analyze the state of the internal and external environment, taking into account its changing market opportunities. If marketing deeply and firmly penetrates the consciousness of top education managers, it becomes a reliable tool for achieving the main goals of the university. This can be done when the different interests and needs of target groups of end customers, price maneuvers of competitors and taking into account their current prices are taken into account. Where competitive opportunities are constantly monitored, price sensitivity of various consumer groups is analyzed, and media and PR campaigns are thought out and balanced, success is much higher.

Pricing practices used in actual operations are sometimes still inconsistent with the marketing approach. Consumers, target audiences, clients (students) do not become the main reference point in the strategic planning of universities. Managers are confident that their educational services are of high quality, and the main obstacle to their successful dissemination is ignorance and low culture of consumers and clients. Marketing research is ignored and the purpose of marketing is seen solely as sales promotion. Top management of some universities and line managers of educational structures still have a philistine understanding of advertising and public relations. Until now, they are confident that everything is going well for them without any advertising, nothing needs to be changed.

It’s strange that an article about pricing in a university should end with this. But we have to admit that the marketing strategy is not yet in demand in universities to the proper extent and, perhaps, an analysis of the practical experience of the marketing and advertising department of the Russian State University for the Humanities will become a positive example. Sources

Kotler F. et al. Fundamentals of Marketing. M., 2000.
Esipov V. Prices and pricing. Textbook for universities. St. Petersburg, 1999.
Egorshin A.P. Management, marketing and economics of education. Textbook. N. Novgorod: Nizhny Novgorod Institute of Management and Business, 2001.
Marketing. Reader. St. Petersburg, 2002.
Middle class in the education market. Project of the magazine "Expert", 2002.