Vietnam is a potential Market for Education Business Sector:

CHAPTER 1: INTRODUCTION

I. Background Information

3. Vietnam is a potential Market for Education Business Sector:

- A high number of population and a young population: According to the General Statistics Office of Viet Nam, an estimated 97 million inhabitants as of 10 April 2020. The population pyramid chart shows that Vietnam demography is skewed towards a young population with a statistic of 24 % for the age of younger than 15, and 68 % for the age of 16 – 64.

Figure 1.3: Vietnam Population in Mar 2020

- Non-public education development solutions are now available

The Government has promulgated the Resolution No. 35/NQ-CP (on June 4, 2019, on the strengthened mobilization of resources in the community for the development of education and training in the 2019 – 2025 period. To increase from 8.75% of non-public education institutions and 8.9% of students in these students in 2020 to 13.5%

and 16%, respectively, in 2025, the Government has recommended several following solutions:

 Completing the support regime to change from support for educational

institutions to support directly granted to policy beneficiaries, or from support according to the average dispensing mechanism to support under the state procurement mechanism;

 Reforming administrative procedures, simplifying documentation requirements for establishment and operation of non-public education institutions;

 Giving equal treatment and creating an environment of fair and transparent competitiveness, irrespective of public and non-public education institutions;

 Promoting grant of autonomy to public education institutions and encouraging them to exercise financial autonomy.

Figure 1.4: The number of Non-public students from 2015 to 2018 (source: https://moet.gov.vn/Pages/home.aspx)

- Increasing the number of Languages centres and language learners:

Table 1.1: The number of Languages Centre and learners from 2017 to 2019

Contents 2017-2018 2018-2019

Centre for Languages and IT Studies 2,854 3,974

Number of people study Languages 1,599,337 1,966,404 (source: https://moet.gov.vn/Pages/home.aspx)

- Number of non- public students from increased from 2001 – 2018

In recent years, there is an evolution of Non – public schools and non- public students accordingly. The reason the changes could be:

(1) Services are good and can be flexible. Non-public or Private educations are a kind of business sector that works for profits. They are flexible in services such as contact and working with parents via emails to update students' situations and

2015-2016 2015-2016 2016-2017 2017-2018

Number of Students

behaviour in class. Convenient payment systems likely transfer money to a school’s bank or pay by card. Particularly flexibility is shown in the opening hours and times of classes such as in public school, students need to be picked up at 4 pm while students can stay at private school until 6 pm, allowing parents to pick them up after work. Furthermore, with the development of technology, parents are reassured that they can see their children's activity through the camera system.

(2) Infrastructure: at private schools, facilities are usually spacious, new, and more modern than public schools. Because the capital is spent by the people, the school leaders have the right to renovate, repair, upgrade or build new buildings and new facilities for students' study.

(3) Study program: in order to compete with public universities, private universities often focus on upgrading facilities and their curriculum. Therefore, the programs at private schools are quite diverse and practical. Many private universities also associate with foreign universities and colleges, helping students to access advanced international education. They are also more open to exchanging knowledge and have the opportunity to receive an International degree upon graduation. Public universities have a more traditional training direction.

(4) Employment opportunities: typically, domestic businesses tend to favor applicants from public schools. However, for foreign companies, there is less importance placed on whether a candidate graduated from public or private universities because of the strength and experience you have. Therefore, learners who have been attending private schools have less concern about this issue.

9 II. Motivation and Objectives

In my career, I have more than ten years of experience in running businesses and managing teaching centres. I have more than eight years of experience in managing, training, and recruiting staff. I worked for 8 years at Shane English Vietnam (SEV), here, I used to work for positions of Teaching Assistant, Senior Teaching Assistant, Programme Advisor, Assitant School Manager, and School Manager. After SEV, I worked for three years at PSB College Vietnam as an Academic Services Manager. Both SEV and PSB College are the Foreign Direct Invested (FDI). During the period I was working in these places, the scenario was played out as:

- Boss: First you get more students in order to increase revenue, and that I will allocate you more budget for you to do marketing.

- Sale staff: First you should do Marketing, get more students to know about us, thenwe can get more students for you.

Experienced from this story, questions are raised “Which came first the chicken or the egg”?

Marketing first or students?

Like other business sectors, Education Business and English Language Schools nowadays have to face more competition. This essentially means that there are more schools but fewer students. So, what is a suitable MKT strategy for English Language Schools or Education Business? How can the schools use certain resources to develop their Marketing and improve their business?

III. Purpose of Studies

1. To understand the Education Business and English Language School field in Vietnam.

2. To evaluate Marketing strategy for Education Business and English Language Schools.

3. To offer suggestions for English Schools.

4. To manage an English school or an Education Business in the future.

10 IV. Research Procedure

With the research topic ‘A study of Marketing Strategy for Education Business – The case of Shane English Vietnam’, Research methods to be used are: observation method, survey/

interview methods, qualitative analysis, and the comparison method. The research procedure included 6 steps as follows:

# Step 1: Introduction: Clarify the research background, research motivations, research objectives, and the research procedure.

# Step 2: Literature Review: Briefs of English Language schools in Vietnam, review of Marketing Strategy and SWOT, and Resource Based-view.

# Step 3: Research Methods: Describe the research methodology of the case study

# Step 4: Major of Findings: Introductions of Shane English Vietnam; SWOT, Resource Based-view, and Marketing Strategy at Shane English Vietnam currently.

# Step 5: Conclusion and further studies: Finding marketing methods for the education sector, practical implements, limitations of the research, and further research expectations.

Figure 1.5: Research Procedure

CHAPTER 2: LITERATURE REVIEW

I. English Language School

An English language school is a place where one studies the English language. Students vary widely by age, educational background, and work experience. Further, at language school, students usually select a specific course according to their language proficiency. According to the CEFR, six language levels define students' language proficiency base on their speaking, writing, and reading skills such as Beginner, Elementary, Pre-intermediate, Intermediate, Upper-intermediate, and Advanced. Students will be then arranged at the course that matches their skills.

An English school consists of 5 following components:

1) Structure

As a general rule, a new student is evaluated by a placement test which enables teachers to determine which is the most appropriate level for the student. Courses can be organized in groups or for individuals according to students’ demands.

2) Organization

Most language schools are private and for-profit organizations. Tuition fees vary depending on a multitude of factors such as local cost of living, exchange rates, and demand for the language in the area where a school is located. Language schools can be either independent entities or corporate franchises.

3) Teachers

Teachers are either English native speakers or formal qualifications to become a language teacher, however, they vary by school or country. Teachers may have graduated with a B.A, Master's degree, or a Ph.D. Pedagogy. Experience and strong

teaching skills are the priority criteria during the recruitment of the language school's teachers.

4) Qualifications

Students in each course and at each level need to sit in the internal exam before moving up to the level. Besides, most students will sit an international language exam and receive an internationally recognized qualification. That could help students in national students such as to get exemption of English Entry test at Primary, Secondary, High Schools, and Universities. An International English certificate is an advantage or priority of entry requirements at the works. Additionally, a certificate of English is a condition that is not able to be missed for any applying for studies abroad, …

5) International language exams

English Language schools commonly offer specific programs to those wishing to prepare for internationally recognized language exams such as:

 TOEIC: Test of English for International Communication

 TOEFL: Test of English as a Foreign Language

 IELTS: International English Language Testing System

 Cambridge English Language Assessment

II. Marketing Theories – The Marketing Mix

1. Marketing Definitions

Currently, there are thousands of marketing definitions. However, these definitions are not really different, and, interestingly, none of them are considered to be unique. This is due to the face the authors of the marketing definitions have their views. Some definitions of typical organizations and individuals may be given:

- According to the American Marketing Association (AMA): "Marketing is the performance of business activities that direct the flow of goods and services from producers to consumers." (Approved 1935). And: "Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large"

(Approved 2017).

- The Chartered Institute of Marketing (CIM): "The management process responsible for identifying, anticipating and satisfying customer requirements profitably".

- Philip Kotler’s definition of Marketing is – “Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with other”.

- ‘Marketing is engaging customers and managing profitable customer relationships. The twofold goal of marketing is to attract new customers by promising superior value and to keep and grow current customers by delivering satisfaction’. (Armstrong 32)

- In the words of Cundiff and Still – “Marketing is the term used to describe collectively those business functions most directly concerned with the demand stimulating and demand-fulfilling activities of the business enterprise”.

Thus, we can say, Marketing is selling what the market needs, not selling what we have.

2. Marketing strategy

A strategy is the overall decisions and actions related to the selection of facilities and the allocation of resources to achieve a certain goal. Strategy can also be defined through a variety of factors such as tasks, selection of areas of activity, complementarity of resources, operational and tactical options, priorities. and prepare for unexpected situations to complete the set tasks.

There are three levels of strategy: Company-level strategy, business unit-level strategy, and functional strategy. Marketing strategy is a functional strategy. Marketing strategy is a logical point system, reasonable, as a basis for directing an organizational unit, calculating how to solve your Marketing tasks. It includes specific strategies for target markets, for the Marketing complex and marketing costs.

3. Marketing Mix – 7Ps

The marketing mix –referred to as the 4Ps of Product, Price, Place, and Promotion – was originally proposed by Jerome McCarthy (1960). It is still used as an essential part of formulating and implementing marketing strategy by many practitioners. The popularity of the mix as a guide for the application of marketing techniques is driven by the apparent simplicity of the framework. However, in the 1980s the 4Ps were challenged for not referencing the importance of customer service. The result was that the mix was extended to 7Ps, which include three further elements (the service mix) that better reflect service delivery: People, Process and Physical evidence (Booms and Bitner, 1981). Some writers argue that the service mix should be subsumed within the 4Ps. Since the 1990s there have been more changes in marketing thinking and research and the outcome has been a shift in emphasis in the application of the marketing mix towards the development of relationship building. Some writers even argue that this is a paradigm shift altering the underlying marketing philosophy guiding the application of marketing tools and concepts (Berry, 2008). Whereas others suggest the move to more relationship-orientated marketing is in response to growing customer demands and increasingly complex technology-driven trading environments (Singh et al., 2011) (Singh, Agrariya and Deepali, 2011).

Figure 2.1: Marketing Mix Matrix – 7Ps (1) Product:

According to Hollensen (2014), Products, or services, are the vital ingredients of the market offering and are the vehicles for providing customer satisfaction.

Thus, we can understand a product is built or manufactured to meet the needs of a certain group of people. Products in 7Ps marketing may be intangible or intangible because they may be in the form of services or goods. Make sure that the products designed and manufactured meet the needs and keep up with the consumer trends of the market targeting. Therefore, during the product development phase, marketers must conduct a series of extensive research on the product life cycle they are creating.

Figure 2.2: Product Life Cycle

(Source: Marketing Management Textbook, Hollensen (2014)

In developing the right product, we have to answer the following questions:

What does the customer want from the service or product? How will the customer use it? Where will the client use it? What’s the name of the product?

How is your product/service different from the products of your competitors?

(2) Price:

Hollensen (2014) mentioned: Pricing is the only element of the marketing mix to generate revenue. However, price affects not only the profit through its impact on revenue, it also affects the quantity sold through its influence on demand.

The price of a product is simply understand is the amount that customers have to pay to use it. Adjusting the price of products will have a major impact on the overall marketing strategy. At the same time, it also greatly affects the sales and demand of the product. If the company is new to the market and has not made a name for itself, the target customers will not be willing to pay a high price.

While they may be willing to pay a large sum in the future, it will be difficult to do so at the start-up stage.

Price considers cheaper prices of cooperatives products compared to other shops, Discount, Credit purchase, Adoption of commodities‟ prices to members‟ expectations, Purchase by installments. Market penetration pricing, Market skimming pricing, Neutral pricing are the three major pricing strategies, and these are the important questions that people should ask themself when they are setting the product price: What will be the quantity demanded at any given price? What will the effect of changes in price be on sales volume? How much did it cost you to make the product? What is the customers’ perceived product value? Do you think that a slight price decrease could significantly increase your market share? Can the current price of the product compete with the price of the product’s competitors?

(3) Place

A place or distribution channel - an important part of the marketing mix definition. You must locate and distribute the product where it is easy to reach the potential goal. This often requires a deep understanding of the market. From there, you will find distribution channels that can connect directly with your target customers. Intensive distribution, Exclusive distribution, Selective distribution, Franchising are considered as distribution strategies

The questions should be made in order to develop the distribution strategy:

Where do your clients look for your service or product? Do they shop in a mall, in the supermarket, or online? How do you access the different distribution channels? Do you need a strong sales force? Do you need to attend trade fairs?

Do you need to sell online?

(4) Promotion

Promotion is a very important component of marketing because it can improve brand awareness and sales. Promotion is comprised of various parts such as Sales Organization, Public Relations, Advertising and Sales Promotion

In creating an effective product promotion strategy, you need to answer the following questions: How can you send marketing messages to your potential clients? When is the best time to promote your product/service? Will you reach your potential clients through television ads? Is it best to use social media in promoting the product/ service? What is the promotion strategies of your competitors?

(5) People

People include both the target market and people directly related to the business.

For people, thorough research is important to find out if enough people in your target market are in demand for certain types of products & services. or not.

Employees of the company are very important in marketing. They are service providers.

(6) Process

The process of marketing 7P is one of the important elements of marketing.

System and organizational process affecting service deployment. So make sure you have a suitable process to minimize costs. Minimizing here can be your entire sales channel, payment system, …

(7) Physical Evidence

Because the characteristic of the service industry is that the business abstraction needs "tangible" evidence to make it easier for customers to visualize the services provided. Also, physical evidence in 7p marketing is related to the branding of businesses and their products are perceived in the market. It is

physical evidence of the presence and establishment of a business. One concept of this is branding.

4. Digital Marketing Mix

‘The use of the Internet and other digital media and technology to support ‘modern marketing’ has given rise to a bewildering range of labels and jargon created by both academics and professionals. It has been called digital marketing, Internet marketing, e-marketing and web e-marketing’ (Chaffey & Chadwick, 2016). In other words, ‘Evaluating the opportunities provided by the Internet for varying the marketing mix is a useful framework for assessing current and future digital marketing strategy’. (Chaffey &

Chadwick, 2016, p. 293).

Digital marketing affects all aspects of the traditional and service marketing mix:

Table 2.1: Elements of Digital Marketing Mix

(textbook: Digital Marketing - Strategy, Implementation and Practice)

(1) Product:

The product variable of the marketing mix refers to the characteristics of a product, service, or brand. With the popularity of YouTubers rapidly increasing, companies are now paying them to sponsor their products by making unboxing videos. On the

website, you can make your product stand out by using indicative imagery. The main implications of the Internet for the product element of the digital marketing mix are 1.

options for varying the core product; 2. options for offering digital products; 3.

options for changing the extended product; 4. conducting research online; 5. speed of new product development; 6. speed of new product diffusion (Chaffey & Chadwick, 2016, p. 256).

(2) Price:

Focussing on the implications for setting prices in digital markets; new pricing models and strategies. The Internet leads to price transparency and commoditization and hence lower prices. Dynamic pricing gives the ability to test prices or to offer differential pricing for different segments or in response to variations in demand (Chaffey & Chadwick, 2016, p. 293). New pricing models such as auctions are available. There are many pricing strategies you can implement on your website, which will make your products stand out to your customers: Discount codes, Online vouchers, Price cutting, Packages and bundles,…These techniques have worked very successfully on websites in the past. The main implications of the Internet for the price aspect of the Digital Marketing mix are:1. increased price transparency and its implications on differential pricing (a supplier can use the technology for differential

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