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International Conference on Applied Economics (ICOAE) 2013
Marketing of Educational Services: Research on Service Providers Satisfaction
Nataliya Kalenskaya, Ilshat Gafurov, Aida Novenkova*
Kazan Federal University, Kremlyovskaya 18, Kazan 420008, Russia
Kazan Federal University, Kremlyovskaya 18, Kazan 420008, Russia
Kazan Federal University, Kremlyovskaya 18, Kazan 420008, Russia
Abstract
Marketing is the art of creating a demand and the process of pursuing customers – existing as well as potential.
Competition is everywhere; educational service sector is not an exception. Interestingly, the need to “market” their services has not really been felt by Russian education sector, as not so long ago educational institutions have faced more demand than they could cope with. At some point it is still especially true for high rank universities. However, significant demographical decline intensified competition in this sector. For specialized fields like management and computer education, where attractive market potential has increasingly caused more and more institutions to be set up, competitive situation is changing rapidly. Even the institutions facing heavy demand have been confronted with the question of being able to choose the desired target customers, and therefore face issues like product differentiation, product extension, diversification and service integration. All this has activated an interest in previously neglected area of marketing of education services.

© 2013 Kalenskaya, Gafurov, Novenkova. Published by Elsevier B.V.
Selection and/or peer-review under responsibility of the Organising Committee of ICOAE 2013.

Keywords: marketing of educational services; education; service sector.

1. Introduction
Education is a pure service sector, which is characterized by intangibility, inseparability, heterogeneity and perishability. In addition to that, ownership or the lack of it characterizes this type of service. Education as a service, then, can be said to be fulfilling the need for learning, acquiring knowledge-providing an intangible benefit (increment in knowledge, professional expertise, skills) produced with the help of a set of tangible (infrastructure) and intangible components (faculty expertise and learning), where the buyer of the service does not get any ownership (Gibbs and Maringe, 2008). He may have tangible physical evidence to show for the service exchange transaction but the actual benefit accrued is purely intangible in nature.
In the context of education, the customer only buys access to education, or derives the learning benefit from the services provided (Bado and Nyangau, 2012). There is no transfer of the ownership of tangibles and intangibles, which have gone into creation of the service product. Payment of fees (price for the service) is just the consideration for access to knowledge and for the use of facilities for a given tenure.
Most educational institutions are product oriented rather than market or student oriented. They perceive themselves as producers of certain educational programs, rather than as satisfiers of certain learning needs.
This lack of marketing orientation, keeps those managing educational institutions from realizing and exploiting the role that promotion could play in attaining their organizational objectives.
2. Marketing of education services
Marketing of education is gaining momentum with the entry of private institutions, change in people's attitude towards education and the changing scope for the different courses being offered. The technological changes and shrinking global boundaries have increased the significance of marketing for education services.
The education service can be described as a high contact, consumer and people based service (Gibbs and Maringe, 2008). However, innovative methods like using multi-media kits while providing the service are making interaction between and instructor and student less significant. With the changes in customer education and the job market, the market for unconventional courses is increasing. So no marketer can afford to ignore these markets. As the education service is intangible, inseparable and perishable, certain implications exist for marketing. And service quality is not consistent for all customers, or even a single customer at all times. So the marketers' job becomes tough. They are required to ensure that these features of the education service are better utilized to meet the varying needs of customers.
2.1. New relations in educational economy
The current stage of higher education development and changes in educational paradigm are mostly predestined by a variety of factors, most important of which include: processes of globalization and integration into the international educational space; development of information society and economy based on knowledge. New benchmark of XXI century is the development of society and individual based on knowledge and intellectual capacities. Entrepreneurial spirit, systemic thinking, originality and speed of decision-making, creativity, ensure the survival, competitiveness and become the most valuable intangible assets, High speed of life and constant change, introduction of new technologies, increased competition, growth of revenues from the use of intellectual property, Internet penetration in all economical sectors, global informatization and knowledge exchange – all these factors marked the beginning of a new stage in economic development and birth of ''knowledge'' economy (Hemsley-Brown, 2008).
Orientation to the world standards of education, improving the quality, relevance and practical applicability of educational products and services become an obligatory part of universities competitiveness. Learning, curriculums and standards are being renewed according to current advanced technologies as well as requirements of labor market to the level of competence among future specialists. In process of strategical development universities start to consider versatile customer needs, capabilities and motivation of academics (Bado and Nyangau, 2012). All this helps to introduce more marketing tools to the work of universities.
2.2. Service providers and service delivery
Educational service providers, more than anything, need to be competitive. Often it is the key component of success. The customer simply shows up at the service scape expected to be “serviced". The delivery system in place will satisfy, dissatisfy, or please the customer. And it is always important to remember that the customer cannot be completely separated from the service. Here, the service providers mean teaching fraternity and non-teaching community directly and indirectly associated with the services rendered to the students. Satisfaction and retention of the students solely depends on the way the teachers are in a position to deliver their best services to them. Teachers are not treated as “guru”, rather they are known as facilitators / services providers. Growth and existence of an educational institute, particularly the professional educational organization depends on the competency, effectiveness, efficiency, sincerity, dedication and devotion of the teaching community of the institute. People proved as the most vibrant component of educational services marketing mix.
In the present era, it is not natural resources or natural wealth, which distinguish an affluent society from a backward one; it is the accumulation and development of the knowledge resource. Education was never as important a utility as it is today. People however differ in the benefits they seek from the educational services offered to them. It is important, then, in order to be able to satisfy these needs and wants effectively, that a marketing orientation be applied to the conceptualization, design and delivery of educational service.
Education planners, in order to plan the service offer well and deliver it effectively, need to understand the behavior of the target population, and the criteria they use to exercise choice. Another key issue to better delivery of the education service is that it is performed for people and by people. People therefore represent the starting point for analysis to precede conceptualizing the service offer and developing it into a marketable service package. The education service offered by the institution must reflect the organizational response to the identified needs and wants of the target segment, in a given socio-economic context. However, the beginning of successful service delivery in this case is in satisfying the needs of service providers.
If university focuses its marketing activities on the needs of practical implementation of gained knowledge, it is particularly important to develop requirements for the quality of educational services and technology to maintain the quality management system. Quality of education is necessary condition of university’s competitiveness in context of international integration and high domestic competition. It most importantly depends on the quality of human resources and so one of the main directions of higher education development should be the development of teachers potential.
In this regard, development the strategy of university professors’ potential evolvement plays an invaluable role in internal relationship marketing. Each school must have a current program of training and supporting its personnel, which, in turn, is part of the strategic marketing plan for the development of the institution.
At this moment building an effective system of respectable earnings for higher education employees is task of socio-economic nature. Reputational strength and position of university's employees in education market depends on how well this system built.
3. Research on service providers’ satisfaction
In this research we analyzed the effectiveness of salaries and incentives for employees of higher education system. The research was conducted on the basis of motivational factors listed in Table 1. It allows selecting the basic categories for wage system formation in both individual and differentiated approach.

Based on these factors we developed a questionnaire (Table 2).

The questionnaire was designed so as to identify how existing motivational policy in the university meets the needs of its faculty. It should be noted that participants of this survey were only employed teachers from Kazan public universities. The wage policy of private higher education institutions has a number of features that is not the object of our analysis.
The survey involved 1000 people, survey results are presented in%.
Among 100% of respondents:
􀁸 12% have a teaching experience of less than 5 years;
􀁸 24% have a teaching experience of 5-10 years;
􀁸 16% have 11-20 years of teaching experience;
􀁸 32% have 21-35 years of teaching experience;
􀁸 16% have a teaching experience of more than 35 years.
The largest share of respondents are employees with 21-35 years of teaching experience, so we can say that the greatest number of teachers surveyed are between the ages of 44 - 56 years, therefore, they fall into the category of working pensioners. Of all respondents 88% are teachers who have a degree and academic title.
In addition to the wage system analysis it seems necessary to consider and analyze intangible factors motivating people to begin teaching activities. The questionnaire includes questions to identify key points in choosing teaching profession. Responses had to specify the weight of a motivational factor (Table 3).
Wage system formation of university's employees consists of salary based on formal positions:
􀁸 Assistant;
􀁸 Senior Lecturer;
􀁸 Associate Professor;
􀁸 Professor.
It is mostly based on scientific degree and academic title, state and governmental rewards. In addition to that, there are bonuses for work intensity (e.g. extra administrative work). Also, there is a separate premium for working on economic projects based on contracts between university and businesses or organizations in different fields and industry sectors.
After analyzing the data there are 40% of respondents involved in the implementation of economic contracts. Of them - 80% satisfied with the payment system under this type of project work, and 20% are dissatisfied with the system of payment.
Motivational factors in universities personnel policies also include a range of social issues (see Table 4).
Since 2009, new wage system of Russian universities’ workers was introduced. In this study we analyzed how this new system satisfies public universities teachers (see Table 5).

The survey data show that new wage system does not suit most of the respondents (80%), even though the salary stayed at about the same level. The most important reason for this to happen is that new wage system requires a significant additional input in university's activities, including scientific work, extra work with students etc. Which is quite difficult to perform for those who combine the work in two or even more universities. Higher education specificity allows moonlighting at other institutions, usually private-owned (commercial) colleges on 0.25 or 0.5 rate (usually associate professors, in rare cases, professors, doctors of science).
In this study, we found out if there is a way to earn money and to have additional income for teachers in universities (see Table 6).
Teachers themselves based on their experience, qualifications and needs can also evaluate university teachers’ wage system effectiveness. In order to evaluate this factor we asked the respondents to identify the optimal salary, that represents the ideal number that they think they are worthy of. The results are presented in Table 7.
This data show that the higher the professionalism, the more modest needs and a real look at the system of payment of pedagogical work is (teachers with more than 35 years of experience expect the same average amount as those with experience of 5 to 10 years).
As average salary of university's lecturer we take the salary of typical assistant professor in Kazan. In state university it is on average from 12,000 to 18,000 rubles. Typically, this is a teacher with 5 – 20 years of experience. According to our data we can say that the optimal wage for lecturers should be around 30,000 rubles, which is almost two times more than at the moment.
In this case, 30,000 rubles were considered by respondents as basic salary.
In practice, university teacher can receive 30,000 rubles and even more based on the involvement in economic contract projects; also, if he is suitable for academic premiums; and has professional experience of at least 10 years.
4. Conclusions
􀁸 The system of payment and incentives for university workers requires significant adjustment by university's social policies strengthening.
􀁸 Current payment system does not take into account teacher rating made by students (the main consumer of educational services). Many universities hold contests for the title of ''Best Lecturer", but this is not stimulated in any significant material way.
􀁸 Motivation for instructional and guiding work virtually does not exist.
􀁸 Most faculty members do not understand new wage system; therefore, the attitude toward it is ambiguous.
􀁸 The majority of teachers moonlight in other universities in part-time status, considering the possibility to look for jobs as an extra incentive to teaching.
According to relationship marketing concept human resources are crucial for market success. The value of human resources in marketing mix of the university is not limited by availability of highly qualified, professional teachers, transferring knowledge in classrooms. From marketing perspective university staff has a huge impact on the consumer, i.e. the student both directly in the learning process and in extracurricular time – it is a style of communication with students and other clients of the university, the speed of response to inquiries, complaints, etc. Teachers and staff should establish an educational environment that best meets the needs of a quality education.
Human factor is critical strategic resource of university effectiveness in education market. In this case teaching resources appear as human resource and component of strategic resources that contribute to an increase in marketing opportunities of the university. Human resources formation in terms of marketing is subject to the problem of achieving university competitiveness and further sustainable integrated development of human resources on labor market. Further development of university staff is based on principles of material resources rational use; modernization of the educational process based on innovative educational technologies according to customer requirements for quality education. The basic problems of university human resources in modern world is the need to find new forms and methods in accordance to new educational paradigm that requires a change in teaching and teacher's role (Table 8).
As we move to a knowledge society education technologies are becoming more customer-oriented, and the recipients of knowledge become more responsible for their own learning. It should be noted that the process of teaching and methods of knowledge transfer over 50 years virtually unchanged. However, modern conditions require educational systems to be more flexible, able to quickly adapt to change. Also, position of teacher fundamentally changed. Now university professor must not only transmit knowledge to learners, but to be their consultant to the world's knowledge, help them to understand the importance of learning and personal responsibility for the results of their studies.
Examination of educational trends, terms of university development, marketing principles and problems of university human resources transformation led to the conclusion that modern university is in dire need for highly qualified teaching staff, that is able to adapt quickly to new educational standards, accept changes, create high quality educational products. Time of spontaneous management has passed. Now it is necessary to build a systematic approach to solving of teaching resources complex development problem according to the criteria of modern education system and differential requirements for the quality of education for all segments of consumers.
References
Bado N., Nyangau J., 2012. Social Media and Marketing of Higher Education. Journal of the Research Center for Educational
Technology, Vol 8, No 1, p. 36.
Gibbs P., Maringe F., 2008. Marketing Higher Education: Theory and Practise. Open University Press, p. 113.
Hemsley-Brown, J., 2008. Universities in a competitive global marketplace. International Journal of Public Sector Management, 19 (4),
p. 316.