The pervasive role of prestige and limited consumer information form two of the central influences on the operation of the student market in higher education. The limited number of options available for colleges and universities to successfully compete and gain additional financial resources only amplifies the significance of prestige and the lack of information. Increasingly, the prestige and revenue potential of the student market takes prominence in internal decision-making at many institutions.  The result is that campus leaders feel compelled to engage in a high stakes competition for students to supplement declines in other sources of revenue— particularly state appropriations.

The value placed on rankings, most notably the U.S. News and World Report, within the student market is an attempt to determine the quality and prestige of an institution.

Various indices such as SAT scores, graduation rates, and the number of student fellowship winners that comprise the rankings are considered in decision-making on campus.

The prestige generation tied to rankings fuels the desire to recruit progressively more qualified student populations. The competition over this relatively small number of students forces administrators to implement programs they otherwise may be disinclined to support because of cost or mission.

The American system of academic prestige likewise limits the ability to evaluate or coordinate the activities within colleges and universities.

Administrators and faculty desire increased prestige not simply to enjoy the benefits, but also to prevent losing position relative to peer institutions. The result exacerbates the market’s inability to promote quality or price control within higher education.

This leaves institutions with the freedom “to define quality largely in terms of what they already deliver.”

Within this environment, the business community, state governments, and the general public question the lack of accountability of colleges and universities. Annual increases in tuition and at least the perception of inefficiency amplify demands for greater responsiveness.

The argument of these external constituencies calls on higher education to become more accountable to the customers and governments that support their continued operation.

With these intrinsic challenges, very little concrete or easily obtainable information exists for students to make informed decisions within the student market.

The philosophy behind a market-based system relies on informed consumers to serve an integral role in guaranteeing the self-regulation of markets.

The ability to judge quality and price not only rewards those providing high quality, cost sensitive goods, but also eliminates those who are not performing well.

Globalization blurs boundaries and complicates the information available to consumers.

Furthermore, traditional sources of consumer information often prove inadequate or unavailable given the complexities associated with globalization. As a result, companies operate more freely with limited influence from markets or consumers in this environment.

Similar trends occur within the higher education marketplace due to the lack of information for consumers. For example, online diploma mills thrive in an environment where determining product differentiation is complicated and technology aids the ability to avoid government regulation.

The growth of both non-profit and for-profit higher education institutions along with a dizzying array of academic programs confronts consumers seeking to make well-informed decisions regarding college.

All of these various components only serve to convolute the decision-making process for students seeking the best fit for their academic and professional aspirations.

The widespread availability of options presents a challenge to students in choosing a postsecondary option best suited to their needs.

Institutions present their academic programs and other services to meet the demand for education, training, and credentials.

Students wade through the plethora of choices to narrow to a list of potential options, particularly those considering selective institutions.

Given the limited information on higher education and the difficulty in predicting individual student choice, colleges and universities seek to control their image and brand in hope of managing or influencing student decisions.

At a basic level, the purpose of a brand is to create differentiation in the marketplace for consumers. The university brand becomes a valuable organization asset to develop and nurture as a result.

Institutions spend thousands on marketing consultants that predictably argue for complex, expensive, and comprehensive marketing plans.

Despite the incredible sums spent on branding and marketing, higher education fails to clearly delineate the differences that exist between institutions. Every school offers opportunities for exciting careers, boasts successful alumni, and sports a nationally ranked academic (or athletic) program.

As a result, marketing only perpetuates the information challenge for student consumers.

When making value-laden decisions as in the case of higher education, consumers respond differently to marketing as a result of the inherent beliefs and assumptions of each individual.

The hope of university branding is to mediate the relationship between the institution and consumer by clearly projecting an institutional identity reflective of the institution’s culture.

To this end, a brand can serve as a point of interaction between the university’s activities and the expectation of consumers.

Excerpt from The Escalation of Consumerism in Higher Education