What is wrong with Indian private engineering institutes – a marketing perspective?

Engineering along with medical has remained a career of choice for most Indian kids. An average Indian may not be aware of the difference between a prime minister and a president but is very much aware of the respect he earns in case he becomes an ‘Engineer Babu’. These conditions, however, are changing off-late, a recent joke by a friend went like this ‘ thirty years ago you could get the address of an engineer in a city just by knowing his name, twenty years ago you could get the address in his locality by his name, ten years ago in his immediate neighborhood but today with an engineer in every second home even the exact address might not be of help'. India has seen a major jump in its engineering education infrastructure in the last two decades. Data says that engineering colleges have jumped from around two hundred in the nineties to around five thousand in the twenty-first century with over twenty lakh students coming out every year with an engineering degree. Another survey by ‘aspiring minds’ says that only 1.4% can actually write a proper software code. The result is obvious, every day you may hear a host of engineering colleges shutting down the shutters.

So why is the situation so bad, what is wrong with the private engineering colleges? Let us check the same with a marketing perspective applying the five P theory i.e. product, people, price, place, and promotion.

1.      Product: Common place knowledge is that the demand of a product is inversely proportional to its supply. I.e. the more the supply the less the demand. This is actually what is happening with the engineering degree programs in India. With over 5000 institutes to cater to an approx 20 lakhs seats you get an average strength of 400 students per college, a four year bench strength means total strength of 1600 in a year if the college is operating on a 100% capacity and with an average fees of 90000/- the total revenue being approx. 14.5 Crores. These being the higher limit imagine the plight of colleges operating at a subprime capacity. Which brings us to the main question what is the product differentiation? All these colleges are selling the same degree affiliated with some technical university. For an employer, the value of the degree is the same for assessment purpose hence his presence in the campus recruitment drive is limited to the A class institutes. The remaining pass-outs of the B / C class Institute can be seen participating in recruitment fairs or attending interviews for all kind of jobs ranging from sales to BPO. The primary reason for this is the lack of will to create a product differentiation, i.e. to establish compelling quantitative and qualitative factors which differentiate their course from the course being offered by their peers. You will find most of the institutes following me too strategy where their input into the course is limited to a technical tie-up with Microsoft or an IBM without even a faint idea as to how it will be of help. The basic thought missing here is a long term strategy as to how to establish their Institute as a reputed institute in the field they are offering and to give enough weight age to the degree program that not only makes the candidates take their qualification seriously but even the organizations find value in the students of the institute and hence scramble to hire them at a salary comparable to the A class institutes. The writing is clear on the wall, piece meal efforts won’t help. You need to be serious about developing your institute to be globally competitive and result oriented in terms of the output in form of the professionals coming out of the class year after year.

2.      People: this refers to both the internal and external consumers of the institute i.e. the companies hiring your student, the students themselves and the faculties. In a general management sense there is a lot of expectation gap in terms of the students we are recruiting and the faculties we are making available to train them. A major reason behind this is market driven, and severely restricts the choices an institute has but there are other reasons too, most often an institute is too much inward looking and fails to spread its message to the wider cross-section. This results in low inquiries and hence lower choice in terms of quality of admissions. Another issue is in terms of people delivering the course i.e. the faculties. Most of the faculties in private institutes are fresher with little inclination to teach and even lesser inclination towards research. Many of such faculties come from a medium class background with a million dollar dream in their eyes and are forced to join education due to lack of suitable openings. This practice also emanates from the fact that teaching in private institute is still not a very lucrative career option in India. So apart from working on the quality of students, the institute needs to work on the quality of faculties also by ensuring that the perks and compensation are lucrative enough to motivate and attract the best talent into the teaching field.  

3.      Price: Off late most of the institutes have started depending upon the state / central scholarship schemes to break even, this may be a decent strategy to remain afloat however in the long term it will have a severely detrimental impact on the quality of people in the institute and the long term prospects of the organization will be marred forever. Many institutes have also started promoting lower fees for general students to fill their seats, this way they are not only impacting their own reputation but are giving dent to the whole education system. Please note that using price as a promotional strategy sends distress signals in the market which often results in the brand getting stereotyped and loses relevance for an upscale customer.

4.      Place: Place often refers to both your place of business i.e. your location as well as your markets where you search and service your consumers. Now how many Indian institutions are well recognized in markets outside India? If you will see there is a huge market in the Middle East, central Asia, South East Asia and the Africa which is not having enough alternatives. Being a predominantly English speaking country with a low living cost India is in a unique position to service these markets, but how much effort is being done to tap these markets by establishing a strong brand presence is a big question. Most of the Indian institutes in the north are too busy fighting for the central and East Indian market and are ignoring the entire continent.

5.      Promotion: is the final and the most important factor which is missing in the overall strategy of the Indian private institutes. Imagine how many times do you see the hoarding or paper ad of your neighborhood engineering college except during the admission season? How many colleges make news headlines with their placement efforts or with some research activity that is conducted by their students? Overall the entire sales and marketing department of the institute goes hibernating during the year minus the admission season, and this, in my opinion, forms the basic of the problem. Most of the times an Institute management thinks that marketing is a limited period exercise to be conducted one month after the board exams are declared or during the declaration of the JEE result while this may be true partially the fact stands that actually, the brand building effort happens during the so called off season only. Unless you are active during this off season you will not be able to score high on the student’s list of choices and hence the student will most probably choose an institute either near to his home or the one chosen by his friend because he hardly knows you. What an Institute needs is a round the year marketing effort and brand presence as well as brand building exercise. What is most interesting is that only when you decide to go for a brand building exercise would you be serious regarding the remaining inputs needed to strengthen your brand, your skill development activities will be more regular, your placement effort will be more robust and your delivery part would be more value oriented. No one asks for a discount from an IIM, that is more because of the brand rather than the actual experience. So while making a brand equivalent to IIM may be a difficult exercise, it is not impossible with the right focus, the right strategy, and right acumen.

In the end, I would like to say that India with an annual addition of around 20 million new lives India remains one of the best markets for higher education. All that is needed is a more professional approach to ensure that the sagging fortunes of the education industry could be revived. I invite your opinion about the article. Please feel free to share your views in the comment section or call me at 9560609050 for a discussion. Regards