Pricing for higher education institutions

a value-based approach

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

Purpose – The purpose of this paper is to propose the concept of higher education institutions (HEIs) offering educational services based on value for money. The value is determined based on customers’ (i.e. students) expectations of the service and the costs in comparison to the competitors. Understanding the value and creating customer value are a means to attain competitive advantage and constitute the basis of price setting. Drawing upon this belief, as an initial step towards value-based pricing method, the possible value factors are suggested for calculating educational programme prices across HEIs. Design/methodology/approach – This is a conceptual paper introducing the value-based pricing approach in setting HEI tuition fees. Extending prior discussion on the demand for quality education and current financial challenges faced by HEIs, it introduces the concept pricing based upon customer perceived value (student/industry). Value-based pricing is deemed appropriate in view of the value of short tangible and intangible investment by both parties (students and HEIs) to differentiate in terms of setting the right price for the right university for the right student. Findings – The primary aim is to suggest the applicability of value-based pricing for HEIs, which is likely to be both relevant and fruitful for the sustainability of the sector. It represents a personal point of view; building upon a review of the literature, the paper extends the established knowledge one step further in terms of setting the right price for the right university, which is deemed worthy of further study and development. Originality/value – The paper will be of use to the management and policymakers in the education sector in searching for a contemporary pricing mechanism for higher education.

Original languageEnglish
Pages (from-to)929-940
Number of pages12
JournalInternational Journal of Educational Management
Volume30
Issue number6
DOIs
Publication statusPublished - 8 Aug 2016

Fingerprint

pricing
Values
education
customer
Higher education institutions
Pricing
educational offerings
student
tuition fee
university
Value-based pricing
educational program
Education
sustainability
industry
demand
methodology
costs
management

Keywords

  • Educational value factors
  • Value-based pricing

ASJC Scopus subject areas

  • Education
  • Organizational Behavior and Human Resource Management

Cite this

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title = "Pricing for higher education institutions: a value-based approach",
abstract = "Purpose – The purpose of this paper is to propose the concept of higher education institutions (HEIs) offering educational services based on value for money. The value is determined based on customers’ (i.e. students) expectations of the service and the costs in comparison to the competitors. Understanding the value and creating customer value are a means to attain competitive advantage and constitute the basis of price setting. Drawing upon this belief, as an initial step towards value-based pricing method, the possible value factors are suggested for calculating educational programme prices across HEIs. Design/methodology/approach – This is a conceptual paper introducing the value-based pricing approach in setting HEI tuition fees. Extending prior discussion on the demand for quality education and current financial challenges faced by HEIs, it introduces the concept pricing based upon customer perceived value (student/industry). Value-based pricing is deemed appropriate in view of the value of short tangible and intangible investment by both parties (students and HEIs) to differentiate in terms of setting the right price for the right university for the right student. Findings – The primary aim is to suggest the applicability of value-based pricing for HEIs, which is likely to be both relevant and fruitful for the sustainability of the sector. It represents a personal point of view; building upon a review of the literature, the paper extends the established knowledge one step further in terms of setting the right price for the right university, which is deemed worthy of further study and development. Originality/value – The paper will be of use to the management and policymakers in the education sector in searching for a contemporary pricing mechanism for higher education.",
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