Post by Group Founder, Keith Hampson
Brand extension is a marketing strategy that involves drawing on the strength of your organization’s brand in one market in order to gain a foothold in a second market. In consumer markets, companies like Virgin have made brand extension a core of their growth strategy; ideally, entry into each new market is made easier by the brand equity built in other markets.
Colleges practice brand extension, too. (Unlike the Virgin Corp. President, university presidents don’t don costumes or jump from planes to promote their brand extension efforts. Not yet.) Some of the more common types of brand extension include offering training to corporations (b2b), online education by brick-and-mortar institutions, and the construction of satellite campuses. But colleges are typically cautious about leveraging their brands. Reputation is all-important.
There are, though, creative uses of brands in higher education. Consider the following examples:
Durham University (UK) partners with the consulting firm KPMG to design and deliver undergraduate business programs. Students receive funding from KPMG during their studies and can be confident that the curriculum is informed by the needs of a major employer in the space. Demand for the program is strong, and the model is expected to be deployed at other universities. The value of this partnership to the students – and indirectly to Durham – is largely based on KPMG’s brand. The value would be less substantial had Durham partnered with a collection of independent consultants, even if the curriculum was as good and financial assistance similar.
The New York Times Knowledge Network takes a similar approach by partnering with traditional colleges and universities to offer workshops, courses and programs to the adult market.
In 2012, Vogue – a Conde Nast publication – will open a college in London focussed on (no surprise) fashion and design. It’s hard to imagine prospective students interested in this line of work won’t be interested in getting as close to Vogue – and all that it represents – as they possibly can. Unlike KPMG, Vogue/Conde Nast is skipping the traditional partnership model and taking its brand directly to the market.
The university systems of Texas, Washington, and Indiana have joined forces with WGU (Western Governors University) to extend each state’s capacity in online education (e.g. WGU-Indiana). These states have no shortage of colleges and universities, but have nevertheless taken the unusual step of acquiring the operations (and brand) of an existing university. Although many institutions have partnerships with other institutions, the WGU partnership model is different: first, it’s a partnership between (multiple) state systems and a single institution from other states. Second, colleges typically choose partners that have enjoy similar levels of status and are not direct competitors (e.g. NYU’s Stern (a business school) has an alliance with the LSE, UK and HEC, France).
Pearson Education recently launched OpenClass, a new Learning Management System. The platform made headlines for two reasons: it’s free and tech giant Google is involved. I venture that the interest in this platform is greatly enhanced by Google’s involvement. Although few people at this time know what this platform can or can’t do, there is widespread appreciation of what the Google brand “means” in this market place. Google, unlike Pearson, is considered an icon of technology innovation – a value of great relevance to the CIO’s and other decision-makers that Pearson is seeking to serve. Despite being the world’s largest education brand, Pearson is borrowing the credibility of the Google brand to advance its own. (It’s worth noting that Google’s role in the OpenClass product may be less than originally understood, as suggested by Jeff Young’s article in the Chronicle.)
Lasting only a couple of years before closing in 2010, Meritus University was the Apollo Group’s attempt to set up a fully online university in Canada. From the start, Meritus’ initiative in Canada was working against the tide: tuition in Canada is relatively low (although average tuition discounting is lower than in the U.S.), the region in which Meritus set up – the Maritimes – has a declining student population, and Canadian students are less familiar and comfortable with proprietary colleges.
Apollo isn’t the only U.S. publicly traded company to examine the Canadian market. Others have been attracted by the similarity of the Canadian and U.S. educational systems (which can make it easier for the U.S. institutions to leverage their existing curriculum investments), an accommodating student-loan system, U.S. marketing efforts reach into Canada easily, and most of the population is english-speaking. Meritus sought, then, to serve both the Canadian and overseas markets – particularly Asia.
The decision to not use the well-established University of Phoenix brand reflected, insiders told me, a desire to have the Meritus brand, in time, be understood as a “Canadian brand” – especially in the eyes of students outside of North America. “Canada”, then, was part of the brand strategy at Apollo. Apollo was borrowing the equity of an education brand without that brand actively participating in the exchange.
Posted in: Business Models