Jul 11, 2011

Market-Based Services

My wife is an avid tennis player. She recently took part in a product development focus group conducted by Nike after one of her morning matches at her club. The focus group was designed to hone in on specific attributes of tennis gear desired by consumers. Some of the questions asked included:

What colors do you seek in a tennis bag?

What are some of the key functions that you desire in a racket case?

If we were to produce tennis balls, would it better if there were four balls as opposed to three in each can? Would you be more likely to buy these balls if they were made from recycled materials?

This sort of study is called market-based product development. It is based solely on gathering intelligence from consumer preferences and pricing thresholds and then tailoring a product to them. Novel idea? Not really, except to the education industry.

Rather than qualify an industry segment of consumers who desire a specific product with specific attributes at a specific price, the education industry practices a completely different model. The education industry invariably builds the program that they think people need (not want) and the structure and costs associated with it. Then, they charge admissions and marketing staffs with the daunting challenge of finding demographics that actually want and will pay for these programs. This is called product-based program development and it is inherent to the education world.

Which approach is best? For education, it is probably a hybrid of the two models. We know that education favors inherent values that must be built into an education philosophy. And we also know that most private institutions struggle with finding an adequate consumer base. The problem we see is that too few educational institutions using market-based intelligence in building their programs.

What are your thoughts? Which is your school practicing – market-based or product-based program development? And, what works best?