Has Education become Commoditised?

Commoditisation is a process whereby difference is eroded and competition becomes solely price based. Commoditisation occurs when diversity decreases between competing products or services. It happens with food, furniture and motor cars. When different shops are selling different vegetables to each other, price doesn’t matter so much; because people will choose to buy from the shop that is the only supplier of the vegetable they want.  This is a basic marketing concept.

However, commoditisation is now affecting education offer generic products with organisations competition on price rather than good quality education and services.

Education was once less regulated. There were lots of different universities and colleges offering lots of different courses, taught in different ways. Some may have been more theoretical, some practical, following various psychological theories of learning. Students chose the course that best suited them and what they were looking for.

Then some bright spark thought it would be nice to have a “national curriculum”.  This has happened in lots of different countries, such as Australia and the UK.  The same courses, certificates, diplomas and so on are offered across the whole country.  A particular concept of learning (eg. competency based) is adopted and teachers are restricted to teaching within the confines of that concept.   Teachers are told what and how to teach. If they do not conform to these “rules”, then their teaching is criticised and they may even lose their job.  Auditing becomes increasingly controlling. Teachers are less empowered to vary how and what they teach, and to modify their approach to individual students. As a result, the diversity of what can be offered by education institutions becomes increasingly confined, and the points of difference between different institutions decreases.

This trend toward reduced diversity in education has resulted in a trend toward commoditisation; and that then can leave institutions increasingly focused of price as a point of difference when trying to recruit students.

The way to avoid commoditisation is to find and develop points of difference outside of price. Examples of how to do this may involve focusing on:

  1. Unique or Rare Services – The National Curriculum or other nationwide training requirements can reduce the ability of education providers to offer unique or rare services.Not everyone wants to study the same things. Our world has become increasingly specialised.At one time, a person would go into a cobblers and the cobbler would talk to the customer, measure their feet, make their shoes and sell them. Today, shoes are often made in factories, where a person may only create one part of the shoe, perhaps the heel.This has meant that increasingly people require specialist knowledge and training. BUT our education services have become increasingly generic, offering the same courses to everyone throughout the country.Why? Education providers will often receive funding from the government or other official bodies. That funding often relates to specific courses detailed in the national curriculum. So education providers will often, of course, focus on the courses that will get them money from the government. As a result, more unique or rare courses will not be offered. A college may have the opportunity of 100 new students on the same course, compared to ten on a specialist course. They will either not offer the specialist course at all, or price it at an expensive rate to make it worth their while. Probably pricing it out of the ability of many students.

    Unfortunately, this means that specialist knowledge and training can be hard for students to obtain.  A sad example is Botany. Since 1988, the number of universities in America offer Botany course has reduced by half. Students are increasingly encouraged to study more technologically modern courses. However, the Journal Nature said “U.S. universities find that demand for botanists exceeds supply." There is no logic. More botanists are required to meet demand, but less universities are offering the course and less students are therefore studying it! There is no logic to this.   

    To avoid commoditisation in education, education providers must continue to offer specialist, rare and required courses to ensure that our learners are being educated in a wide range of subjects. We should also remember that as a race, humans need to also maintain essential knowledge, such as botany, to continue to grow and develop and survive.

  2. Market segmentation is the activity of dividing a market into subgroups depending on shared characteristics. In education, this could be different groups of consumers, such as parents and pupils. Today, the market for education is far more complex.We have child learners, teenager learners, adult learners, parents, online learners, face to face learners, blended learners, students looking for short microcourses, those looking for longer qualifications, those who want free courses, those who are willing to spend.Market segmentation means marketing to specific groups, but with education, it is not a case of one size fits all (which we will come on to more shortly).When providing educational services and courses, we need to focus on particular market segments, not as a way to get the price right, but as a way to make sure that we are offering them the services and courses that they need to get the best education for them.What suits a teenager learner will not necessarily suit an adult learner with a young family and limited time to study.When looking at the market, education providers should not be focussing on where they can sell their courses and for how much, but on targeting specific groups to ensure that they receive the education that they require.
  3. Differentiation – Another way to avoid commoditisation is through differentiation of learning and education.Differentiated learning means that the processing, content, sense of ideas, teaching materials and so on enable all students to learn effectively, no matter their ability. Students vary according to motivation, interests, language, gender, socioeconomic status and culture. Considering the needs of individuals in the classroom or in their learning means that students learn more effectively and respond more positively to the educational experience. The one size fits all philosophy that tends to exist in the commoditised educational market of today does not fit all or even anyone.
  4. How are Bundled – Finally, how educational materials are bundled is also influenced by the commoditisation of the educational industry. Before we look further into this, what do we actually mean by a bundle? A bundle can mean a bunch or parcel or packet. So when we look at education in this way, it can be the packet or parcel of learning provided to a student.However, to bundle can also mean to push something hastily or forcibly, which is where we seem to be with the education industry today, pushing bundles of courses onto students who may not want them, and without proper care and attention by the education providers. Good educators will provide a packet of learning for the student that meets their needs, not the needs of the education provider.

To consider any of the factors above and to avoid commoditisation, the answer is really to make sure that the bundle or services or courses or education that we offer are to suit the student not to suit what the education provider wants. 

Many mainstream education providers may have become commoditised, without even realising what has happened to them. They are struggling to survive. Others (sometimes new players in the industry) are taking advantage of this landscape. If a large business, with excessive cash liquidity, has a desire to capture market share in a commoditised market; they can do that relatively easily by being willing to take a financial loss for a while. Once they have eliminated competition, and gained market share, they can then raise prices and begin making profit. Some would argue this is already happening in education.

The long term implications of a commoditised education market can be a real problem though. Diversity of educational opportunity can decrease, and that can lead to a decreasing capacity in the graduate population to be innovative. The scope of the skill set among the population may be diminished, and the number of people who can approach problems in different ways can be reduced.

Eventually, needs are likely to cause a move back to a more diversified education system, but in the meantime, the disruption caused may be unnecessarily problematic.

John Mason Principal ACS Distance Education   November 2019

www.acs.edu.au

 

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