Tuesday, March 24, 2009

20% Discount

Trying to get more students from southern Illinois, SIUC will be giving students from this area a 2o% discount on tuition. In marketing, we say that price is the easiest thing to compete on. If I want to compete with you on it, all I have to do is cut my price to be equal or near yours and, assuming I have a superior product, people will buy my product over your's.

Unfortunately, students are not perceiving SIUC as offering a superior product or they would be flocking here, as they did up until the early 1990s. When you start competing on price, which, despite the tone of the press release, is what SIUC has been doing with its recent moves, you get studetns focused on price first and quality of education second. That's not a good basis on which to revitalize the university. You improve the quality of the product and students will come back to the university.

1 comment:

  1. My marketing class was filled with admonitions against competing on price. The professor’s philosophy was that you shouldn’t start a price war unless you know you can win. I was taught that you should compete on price only if you have a sustainable advantage over your competition that lets you deliver at a lower price.
    With SIUC’s union contracts and maintenance backlog, I don’t think it has a sustainable price advantage. I’m still thinking about the answers for SIUC to some basic questions from my marketing class.
    What can you do better than your competition?
    How does that core competency provide value for your customers?

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