Brand building has been a fascinating topic for me for a long time. We all know of venerable brands in different industries: Coca Cola, IBM, Apple...As so many things, brand building has accelerated in the time of digital marketing-- think of Google, Facebook, Twitter which have become household names in much shorter time periods than traditional brands. Consider which well known university brands come to mind for you first when you think of universities--- we'll get back to your thoughts later and let's compare notes at the end of the blog.
What is a brand?
Let's turn to Seth Godin - one of the most creative marketers I know.
"Here's my definition: A brand is the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another. If the consumer (whether it’s a business, a buyer, a voter or a donor) doesn’t pay a premium, make a selection or spread the word, then no brand value exists for that consumer.
A brand's value is merely the sum total of how much extra people will pay, or how often they choose, the expectations, memories, stories and relationships of one brand over the alternatives.
A brand used to be something else. It used to be a logo or a design or a wrapper. Today, that’s a shadow of the brand, something that might mark the brand’s existence. But just as it takes more than a hat to be a cowboy, it takes more than a designer prattling on about texture to make a brand. If you’ve never heard of it, if you wouldn’t choose it, if you don’t recommend it, then there is no brand, at least not for you." continue to read on Seth Godin's blog
How important is brand building for universities? It is critical and most colleges and universities are local brands, which has served colleges well since most of their recruitment has traditionally been derived from a narrow geographic range.
First let's remember that the U.S. has more than 2,000 four-year colleges and an additional 2,000 two-year colleges. These figures already tell you that we are dealing with a highly fragmented market. The famous 8 Ivy League Universities educate only 0.4 percent of all undergraduate students.
The U.S. is fortunate to have developed the most significant global "super brands" such as Harvard, MIT and Stanford. Wasn't one of those brands on your mind when I asked you to think of a university? And, you probably thought of your own university (alma mater or employer) and maybe a local one?
Mentioning any other brand from here on will be rather subjective or we resort to the (in)famous US World Report rankings. The U.S. has many other large national brands such as Carnegie Mellon, NYU, Columbia, Penn, and so forth. Additionally there are other academically driven brands and sports driven brands such as the Big Ten schools.
We know that competition among universities is heating up. The increased enrollment pressure is driven by a number of factors: for public universities state funding is declining and hence pressure to raise tuition revenue is increasing. At the same time, tuition increases can be less and less passed on to the consumer (students and parents) since they cannot afford it. Furthermore, demographics are not working in many institutions' favor in certain regions of the U.S., in particular the Midwest and Northeast. The Northeast also has had traditionally more private non-profit universities which are increasingly unable to maintain adequate student enrollment. In the demographically growing regions, ethnic groups such as Latino Americans are increasing and they have, unfortunately, a lower propensity to attend college at this stage. So universites are fanning out across the country and fortunately for our business they are looking around the world to increase their recruitment radius, trying to attract students from more schools and regions to their campuses.
Now enter technology, online courses, and MOOCS which will introduce a new dynamic into the marketing environment. Universities will compete for scale and will not be limited by physical or other enrollment limitations. The for-profit universities have already shown that marketing scale can build national brands -- and the University of Phoenix has done a good job with creating a national brand.
By the way, the marketing budgets and capabilities of the largest for-profit universities dwarf the capabilities and budgets of most non-profit and public universities.
Let's go back to Seth Godin's definition and the set of expectations a brand builds. It's that brand promise that creates competitive advantage. A university -- and any other service or product -- has to deliver on that promise otherwise that advantage will quickly disappear. A brand gives you a differentiator, what you stand for, who you attract. We could all give lots of examples. One of my favorite examples are two chains of supermarkets. Aldi is a huge German supermarket chain. If you have not experienced Aldi in your area here is my description: cheap, decent quality, no service, sterile, pack your boxes, return your cart or you'll lose a quarter.
Trader Joe's: Character, unique food, fun, specialties, eclectic.
You can guess which store I prefer.
Now try to give such a description of a university you know or have heard of. That's the challenge with college marketing -- with relatively few exceptions admissions officers have to market plain vanilla education. They all do their best to differentiate using geography, rankings (national or regional), university accolades, etc. but in the end universities offer a similar fare. I am not saying that there are no differences and that it does not matter where you go to school. Clearly the student body, the faculty, the location and the price all matter. Though research shows what matters most for a student is to complete their degree! But we are focusing on marketing of universities. Few universities are able and willing to reduce their scope of academic programing and create a highly differentiated and unique product.
Internationally, brand building and a distinct offering is even more helpful. International students do not have the geographic affinity that U.S. students have to their region. Though it is important to note that the U.S. is most popular destination for most international students and larger cities have an advantage.
Online -- the next university course or degree is only a click away. Brands driven by clear differentiation will win.
Harvard business strategist, Michael Porter, puts it right: There are only two types of competitive advantage in the business world: price or differentiation. Remember my example of Aldi and Trader Joe's --- they clearly execute on their competitive advantage. Go ahead colleges, pick your advantage.
