Business Constraints to Evaluate International Marketing
Executive summary: International marketing is a difficult aspect of business as it involves the consideration of variable parameters. In case of higher education, which is deemed very useful to professionally grow in today’s world, understanding the international educational laws and conditions is essential. It would be better to determine the environment of the country which is being selected for the expansion of the business. The viability and acceptance of the business is dependent on these conditions and would in turn contribute to the success of the venture. Given the current lack of professional higher education opportunities in Africa, the company might find it useful to recruit 1000 students. The variables of business constraints are considered and discussed in the report which will help evaluating the usefulness of the international marketing.
Higher education or tertiary education is essential nowadays to survive in the expanding globalization needs. The advancement of the market and industry needs require higher skills in the labour market which can only be obtained through higher education. The social and economic development of the nation is dependent on the number of population completing tertiary education. The application of knowledge fosters the innovation and increased workforce skill reduces the global and social challenges. OECD pointed out that the investment towards knowledge would create the prospect for generating high-income employment opportunities which are important for developing countries. In this report, the strategy would include considering a low high education country like South Africa.
1. Identify a highly potential market to recruit 1000 international undergraduate and postgraduate students for your institution
International marketing is very important for business expansion in any industry. It is essential that the international marketing manager is aware of the complexities regarding language, legal barrier, resources, and cultural differences before taking a business international (Kotabe et al., 2013). It is also important to be empathetic towards cultural, language and knowledge differences between two countries. In context to the given scenario, the development of the strategy for recruitment of undergraduate and postgraduate students for higher education institute in Australia the similar elements are applicable. In the international business market segmentation strategies provide the business owners with the opportunity to recognise the consumers depending on the preference, culture, behaviour, and characteristics which impact the purchase decision. Market segmentation in higher education and learning is not well defined since the decision making styles of the students are difficult to determine. This was pointed out by Hemsley-Brown & Oplatka (2015) that higher education institutes had inequitable business outcomes when market segmentation was conducted based on the ethnicity, racial, religious and socio-economic background.
A recent article published in News24 reported that the education quality in South Africa is poor compared to the rest of the countries in OECD (Robinson, 2019). The reports also highlight that the professional standards of the teachers are very low where absenteeism was observed in 10% of the teaching faculty and 79% had lower quality knowledge than what they teach in primary schools. A study conducted by Kehdinga George Fomunyam (2018) investigated 6 universities in the South African Region to assess the quality of learning and teaching. The findings of the research showed that there were vast numbers of challenges in the South African Universities which lowered the quality of education. Essential resources and basic skills were lacking among lecturers in the universities. The practices of Higher Education set by the South African Government with respect to quality of education have no practical representation in the current state. Therefore, students belonging to Middle to high-income groups in South Africa would be useful for the institute. The current state of the country where low employment skills are prevalent, the South African students would be attracted to the prospect of having an international level of higher education.
2. Explain the reasons as to why it is an attractive market for your institution with relevant theories and literature, and demographic, economic and socio-cultural and political data and figures
According to the statistical data from the OECD, South Africa has the lowest rate of tertiary education (Population with tertiary education, 2017). These countries have around 6% individuals between 25 to 34-year-olds with only secondary education. Older adults between the ages of 55 to 64-year-olds have 8% in total who did not receive any tertiary education or higher skills training.
Fig 1: Population with Tertiary Education IN OECD countries
Source: (OECD data, 2019)
The latest reports from the OECD suggest that younger generation is now attaining higher education services where three-quarters of the population between 25 to 34-year-olds achieved higher education (Education at a Glance 2018: OECD Indicators, 2018). However, the overall population of the highly educated people in South Africa remains the lowest among the OECD countries. The report also suggests that the number of the population ranging from the 20-24 age group in 2017 were neither employed or enrolled in any higher education institutes was the highest among OECD countries. However, the percentage of employment in for candidates holding tertiary education certificates was close to the OECD average of 84% in South Africa.
In comparison to the percentage of 25 to 34-year-olds in Australia who opt for higher education was found to be 52% (Population with tertiary education, 2017). This could be highlighted by the fact that the education system in Australia is higher in quality and contributing to the development of the nation. Therefore the prospect of obtaining a standard international education system in tertiary learning might be attractive to the South African students in their domestic land.
Fig 2: Number of full-time students by field of study
Source: (Statistics on Post-School Education and Training in South Africa, 2018)
The contact mode of learning was more popular among students were found to be 60%, 39.8% for distance mode of education for foreign national students. Out of all the full-time equivalent study modes 72.7% were admitted through contact mode, 27.3% for distance learning. The maximum enrolments were made in the science, engineering, and technology related higher studies. The second most popular higher education service was business and management was chosen.
There are certain drawbacks in the South African system as pointed out by the study (Hemsley-Brown & Oplatka, 2018). The three levels of education, below secondary, upper secondary and tertiary education. The most common level of education among the South African population was up to the upper secondary education. Very less part of the population opted for higher education services in the location.
Fig 3: Adult Education level of OECD countries
Source: (OECD data, 2019)
Fig 4: Type of educational qualifications from 2009-2016 in South Africa
Source: (Statistics on Post-School Education and Training in South Africa, 2018)
The trend of higher education services seemed to be moving in the upwards direction stably since 2009 up to 2016 in South Africa. Mainly undergraduate studies were the choice of study in public higher education institutes which increased up to 104.3% from 2009-2016. More people were opting for master’s degrees calculating up to 31% increase, followed by 30% increased in undergraduate enrolment.
The economic developments impact the tendency for higher education services in many countries. The aid from the government in participating to create a stable education structure is essential for the growth of the nation.
Fig 5: Economy spent by the government for education
Source: (South Africa | UNESCO UIS, 2017)
The government of South Africa has begun spending 4.87% of their GDP for education improvement in the country which has now increased to 6.13%. The total expenditure of the government for education was 18.73% which has remained more or less unchanged over the decade.
Fig 6: Education spending in Australia
Source: (OECD data, 2019)
This statistical data shows that Australia the government spends 7,112 USD for each student for early childhood education. Similarly, for tertiary education, each student is provided 20,344 USD in the country.
3. Identify the pros and cons of the most useful market entry modes for your institution, and decide on the one entry mode strategy for your institution that would be the best fit to recruit international students from that market
Various market entry strategies are undertaken by business enterprises as not one particular kind of strategy works in favour of internal marketing. Villar, Alegre & Pla-Barber (2014) believed that direct exporting is the most appropriate strategy to be undertaken when focussing on a particular target market and some other times joint ventures would be the most appropriate. There are several factors which impact the decision of choosing a strategy for international market entry. These factors could be the degree of adaptation, tariff rates, transportation cost, marketing cost etc. which make the business successful.
The institute could enter the aforesaid market with joint venture strategies where they introduce vocational training courses by collaborating with existing universities. The company can also opt for outsourcing strategies to provided distance education to the students in Asian and African countries. Lastly, after the acquisition of the consumer base, franchising can be started to open new campuses in the target area.
Joint Venture strategies are usually the preferred safer option for companies wanting to enter the international market. The international company could share management and ownership with an indigenous company in the internal target market to achieve common objectives and expand their operations internationally (Kotabe et al., 2013). There are certain advantages of joint venturing in foreign markets like increased competence in technology sharing, optimisation of resource management and mutual learning from two organisational cultures. Alternatively, there would be a prospect of conflict among the two companies if unequal proportions of investments are made. It might be expensive for small scale business enterprises to bear the cost. These joint ventures could be inhibited by the current political and cultural stability in the international market. Lastly, there could be internal conflicts between the management which would hamper the progress.
Outsourcing could be a cost-effective approach for business enterprises to transfer their business services to foreign countries. This task is done conducted internally but rather by external suppliers into the foreign market (Kotabe et al., 2013). The advantage of such an approach is the swiftness of the delivery of the business services in the foreign market. The supportive operations would not need much focus which can be shifted to the core processes. The risk of low business output is reduced in this case. Lastly, the cost of infiltrating the internal market would be reduced. The disadvantages, on the other hand, are the risk of exposure of confidential business data into the market, underlying cost and lack of international consumer focus.
Franchising provides the parent company with the advantage of being paid royalty money from the semi-independent business owners in the international market. This is done in lieu of identification and trademark under the parent company with the selling the services (Kotabe et al., 2013). The advantage of such a strategy is that the risk is much less compared to other strategies, the expertise of the franchiser will provide easier market entry and the employees would motivate with the brand recognition. The disadvantage is the trade secrets would be possible to contain by the parent company where the franchiser might become the competition and lastly the incompetency of the franchiser would disrupt the goodwill of the parent company.
4. Design a framework of the recruitment networks and channels, including relevant people/position/role and the key tasks to be performed
The choice of distribution strategy in the international marketing business is necessary is an important factor for the success of the business. In case the company can hire a public relations agent for obtaining the proper insight into the students. Public relations provide the exposure of the business into the international market. The PR firms provide knowledge of marketing communication marketing communications, as well as obtain media and government relations in the foreign market (Herhausen et al., 2015). They also provide the medium to reach an influential audience, via social media, and advertisement media. Social media can be used as a source of gaining the attention of students and can be a very effective distribution channel. Content sites can be utilised as a distribution channel to attract the young target student base. Consultancy services are also another distribution channel for the college because the students would be directly referred to the new college via the consultancy.
Fig 7: Higher Education Marketing Strategy
Source: (Biberhofer, 2019)
The company can build its reputation in the target market to gain the trust of local people. Next, invest in marketing strategies to obtain a consumer base. Lastly, the enrolment strategies could be provided to select and recruit students.
5. Design the promotional mix strategies both for the international student market and the channel members with an objective to recruit 1000 international undergraduate and postgraduate students for your institution for 2019.
There certain unique barriers for entering into the higher education market internally. These obstacles could be the representation of the brand voice as well as wide demographic reach in a cross-cultural setting. The integrated promotional campaign needs to be organised in order to strengthen the consistency of the reach. The utilisation of a mixture of marketing communication channels might be helpful for the business organisation. Since internet traffic is strong in South Africa and the number of internet users in the country 29.3 million which is 54% of the total population internet based marketing channels would be effective (South Africa — The World Factbook, 2017).
Pay-per-click is a form of integrated marketing strategy which would provide the business organisation to reach target markets and directly link the website of the business (Khatri et al., 2015). This peripheral strategy is effective in providing the influx of visitors into the business enterprises’ website which provides the visitor with the unlimited directory search options.
Social media influence would also be an effective strategy to attract the students since the target audience are mostly teenagers (Khatri et al., 2015). This is a fast and effective promotional mix strategy for providing business distribution.
Advertisements can be an effective method of accessing the target audience on a mass scale. The television commercials, as well as content website commercials, might be helpful for the organisation.
The idea of the international level of higher education is something that South African students might be attracted to. The current higher education system in the country was statistically analysed to be lower in quality than other OCED countries. Additionally, the incidence of tertiary education was the lowest in South Africa among all other OECD countries. The Australian university might be benefitted from the entry into such a country. Implementation of appropriate international market entry strategies like joint venturing, franchising, and outsourcing might be effective strategies which come with own advantage and disadvantages. The effective promotional and distribution strategies would make the business successful in the South African market.