Indonesian students' perceptions of choice criteria in
the selection of a tertiary institution: strategic
implications
Mathew Joseph
Associate Professor of Marketing, Georgia College & State University, USA
Beatriz Joseph
Management Consultant, Macon, Georgia, USA
Introduction and background
Over the past several years reforms in higher education have been taking place in several countries around the world. In Australia, the 1998 West Review into higher education proposed a market-based model of funding which means that funding follows student demand. Proposals such as this have urged educational institutions to adopt a marketing orientation which was not present in this sector before. In an effort to attract more students, educational institutions from several countries including Australia, New Zealand, the USA and Canada have pursued a market development strategy by marketing their courses overseas. Figures show that the main markets for higher education are Malaysia, Singapore, Hong Kong and Indonesia, followed by India, Japan and Taiwan (Maslen, 1998a). However, the latest crash of the Asian stock markets could pose a threat to the continuing patronage of students from that part of the world. In Australia, the number of students visas being issued in some Asian countries has
decreased by 45 per cent (Maslen, 1998b), and, more specifically, an 80 per cent drop on visas issued to Malaysian students (Illing, 1998). Hence, it could be argued that Asian students are becoming more discerning customers, demanding better value for their money and that they are also becoming more selective in choosing an educational
institution.
Because of all these environmental factors facing educational institutions, they need to develop strategic options that will be responsive to the changes facing this sector. One of the steps in generating strategic options is customer analysis, which examines customer segmentation, motivations, and unmet needs. The
knowledge of what is important to customers can provide insights into what assets and skills are needed to compete and can form the bases of sustainable competitive advantages (Griffin and Hauser, 1993).
Taking the above into consideration, this research has focused on identification of the choice criteria Indonesian students consider important when choosing an educational institution.
Important attributes in the choice
of a tertiary institution
The issue of tertiary institution choice criteria has been widely researched (Baird, 1967; Bowers and Pugh, 1972; Murphy, 1981; Hossler, 1985; Webb, 1993; Joseph and Joseph, 1998) with varied results. In 1981, David Chapman developed a Model of Student College Choice which identified the three major external influences:
1 Significant persons: friends, parents, and high school personnel.
2 Fixed college characteristics: cost (financial aid), location, availability of programme.
3 College efforts to communicate with students: written information, campus visits and admissions/recruitment (Chapman, 1981).
Several other studies have addressed the issue of students' choice criteria and have identified several determinants. Baird (1967) concluded that good faculty, high academic standards and special programmes were what students were looking for. Bowers and Pugh (1972) identified good faculty and high standards as most important factors, while Chapman (1979) identified quality of the institution and cost as the most important elements. Murphy (1981) recognized academic reputation and cost as the determinants of college choice and Maguire and Lay (1981) named financial aid, peer influence, special programmes, size of the
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The International Journal of Educational Management 14/1 [2000] 40±44
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Keywords
Education, Students, Indonesia, Competitive strategy
Abstract
Intense competition for full-fee-paying foreign students in higher education in many countries man-dates the need for the identifica-tion of the criteria considered important by this customer group for the purpose of strategy devel-opment. Past research in this area has overlooked the needs of this important segment and has fo-cused mainly on either adminis-trators or the faculty's
institution, location, athletic facilities and social activities as the most important factors in choosing an educational institution. Discenzaet al. (1985) and Hossler (1985) named academic reputation, peer influence, financial assistance, and location as the most important factors. Joseph and Joseph (1998) identified academic and programme issues, cost of education, location and recreation facilities and peer and family influences as four of the most important factors that influence students' choice of tertiary institution.
Researchers including Litten (1980), Seneca and Taussig (1987) and Tierney (1983) have found that academically talented students are looking for different attributes when compared with average students. The former evaluate an institution based on the quality of their programmes while the latter, in addition to good programmes, are also interested in factors like physical appearance and social life. Joseph and Joseph (1998) found that male potential students give more importance to both the academic value of education and the social life available on campus than their female counterparts. This illustrates the scope for segmenting the market and approaching the recruitment of the distinct segments with tailor-made strategies.
Studies that look at the variables that influence business students' selection of tertiary institution (Houston, 1979; Kroneet al., 1983; Webb, 1993; Joseph and Joseph, 1998) point towards a wide range of choice criteria. The criteria that seem to be most important are programme-related issues such as flexibility and length of the programme, and reputation/prestige related issues. Cost-related issues seem to have more importance as years go by. Houston (1979) found they were at the bottom of the scale, while in Webb (1993) and Josephet al. (1998) they are one of the most important elements.
The vast majority of studies dealing with choice criteria have used a US sample and some, such as Joseph and Joseph (1998), a New Zealand one. It could be argued that there is very little cultural distance between these samples; however, the purpose of this study is to extend the literature on choice criteria in higher education from a different cultural framework ± namely Indonesia.
Methodology
The first stage in the process involved an assessment of the appropriateness of the New Zealand university model in an Indonesian setting. This was deemed important as the
model was initially developed for the New Zealand educational environment (Joseph and Joseph, 1998). A first step in this stage involved a series of focus groups using overseas high school students attending school in New Zealand, to assess the appropriateness of the evaluation attributes found in the New Zealand study. The results of the focus groups indicated that these attributes were for an Indonesian student sample. The next step in this stage was to assess the nomological validity of the model (through the use of factor analysis), and the discriminant validity of the model (through an examination of the rotated factor scores across all of the identified factors). The questionnaire contained three sections: 1 the potential students' perceptions of an
excellent tertiary institution; 2 the ranking of the most important
attributes;
3 a series of demographic information on the participants.
The 17 items of the questionnaire had response categories of 1 ± strongly disagree, 2 ± disagree, 3 ± undecided, 4 ± agree and 5 ± strongly agree.
The second stage involved surveying a random sample of 200 students in the central part of Indonesia. Local high schools were randomly selected and contacted to participate in this study. The students surveyed all expressed an interest in higher education at an overseas university. Of questionnaires returned 110 were usable giving a response rate of 55 per cent. Male/ female breakdown is as follows: 80 males and 30 females.
Results
The summary of means (Table I) shows that students placed a high degree of importance on all items in the five dimensions. All items had a mean score of above 3.6 except for one item ``Peer and family influences'' (2.99).
The comparison of means between males and females (Table II) did not reveal any significant differences except for two items ``Reasonable entry requirements'' and ``Information provided to choose area of study''. This shows that females place more importance in these items than their male counterparts.
Respondents were also asked to rank the different dimensions in order of importance (Table III). The rank order shows that 58.9 per cent of the respondents indicated ``Course and career information'' as the most important dimension followed by ``Physical aspects and facilities'', ``Cost of education'',
Mathew Joseph and Beatriz Joseph Indonesian students' perceptions of choice criteria in the selection of a tertiary institution: strategic implications
``Degree (content and structure'', and ``Value of education''.
Table IV shows the rotated factor scores. The eigenvalue for factor five is 1.07 and 63 per cent of the total variance is attributable to the first five factors. Thus, a model with five factors may be adequate to represent the data. The factors identified are ``Academic resources'', ``Physical facilities'', ``Course and entry requirements'', ``Location'', and ``General influences''.
Conclusions and strategic
implications
Educational administrators should note that all the attributes identified in this study are considered important by the Indonesian students in this study. These attributes should be taken into consideration when targeting and promoting services to overseas students.
The most important factors identified by the students are ``Course and career information'' and ``Physical aspects and facilities''. These are critical issues that must be kept in mind when educational
institutions are trying to create sustainable competitive advantages in which their marketing strategies should be based. From a positioning standpoint, institutions should aim towards strengthening their position in overseas markets by providing information about their courses to potential overseas students. Information should also be made available on the Internet as this is becoming a popular source of information for students. Participating in educational fairs is another way of increasing awareness of the courses offered as well as being a good forum for discussing career opportunities. Educational institutions should also encourage the formation of overseas branches of their alumni associations. These branches could prove very valuable as channels for the distribution of information which could influence the opinion of the families and peers of potential students.
For those institutions which are currently strongly positioned in the market, a
protective and defensive strategy is Table I
Summary of the means
Category Importance
Cost of education
Reasonable cost 3.71
Accommodation at reasonable cost 3.81
Degree (content and structure)
Wide range of courses 3.81
Reasonable entry requirements 3.78
Specialist programmes 3.97
Physical aspects, facilities and resources
Ideal location 3.62
Environment conducive to learning 4.28 Superb recreation and other facilities 3.70
Good social life on campus 3.87
Necessary resources available 4.36
Clean and safe environment 4.14
Good faculty 4.01
Value of education
Reputable degree programme 4.33
Academic value 3.83
Course and career information
Information given on career opportunities 4.19 Information provided to choose area of
study
3.85
Peer and family influences 2.99
Table II
Comparison of means
Category Male Female P-value
Cost of education
Reasonable cost 3.67 3.80 NS
Accommodation at reasonable cost 3.71 4.10 NS
Degree (content and structure)
Wide range of courses 3.82 3.76 NS
Reasonable entry requirements 3.67 4.13 0.03
Specialist programmes 3.83 4.40 NS
Physical aspects, facilities and resources
Ideal location 3.56 3.80 NS
Environment conducive to learning 4.21 4.48 NS
Superb recreation and other facilities 3.62 3.93 NS
Good social life on campus 3.72 4.33 NS
Necessary resources available 4.29 4.56 NS
Clean and safe environment 4.06 4.36 NS
Good faculty 3.94 4.26 NS
Value of education
Reputable degree programme 4.24 4.63 NS
Academic value 3.79 3.96 NS
Course and career information
Information given on career opportunities 4.13 4.40 NS Information provided to choose area of study 3.67 4.40 0.001
Peer and family influences 3.10 2.66 NS
Table III Importance
Rank Category Percentage
1 Course and career information 58.9 2 Physical aspects and facilities 41.7
3 Cost of education 26.2
4 Degree (content and structure) 34.3
5 Value of education 50.0
Mathew Joseph and Beatriz Joseph Indonesian students' perceptions of choice criteria in the selection of a tertiary institution: strategic implications
suggested. They could pre-empt competitive moves by introducing another service positioned to appeal to the same market segment. An example of this is the twinning arrangements between universities and overseas institutions, in which students who want to pursue a degree can do part of their studies in their home institution and then transfer to an overseas university. Another possible defence strategy is the offering of programmes in different countries. The latter could prove especially beneficial to overcome the potential problems that the Asian currency crisis could pose to tertiary institution with a high percentage of Asian students. Although this strategy cannibalizes the market of the established service, in the long run it is better for an institution to compete with itself than to lose customers to other service providers (Joseph and Joseph, 1998).
The comparison of mean responses between males and females in the Indonesian sample indicates that females place more importance in the information provided to choose an area of study and on institutions having reasonable entry requirements than their male counterparts. These elements must be kept in mind by those that address potential students in those markets.
This study points towards the need to develop different strategies for different markets. It also highlights the importance of understanding the need to identify the
important attributes that potential students consider when choosing a tertiary
institution. If educational institutions are to develop strategies that will attract a
sustainable share of the market, they need to know their customers, understand their needs and develop strategies to satisfy those needs.
Owing to the strategic implications of the Asian crisis, educational institutions need to explore other avenues for continuing growth. Institutions could develop other product offerings, such as professional development courses for executives as well as distance education (i.e. offering courses through the Internet). These strategic options could attract a larger share of the education market. They could also implement market development strategies by offering their existing services to new markets ± for example, Latin America, Africa, and Europe.
It is also important to look for neglected domestic submarkets, such as women returning to the workforce, retrenched executives and people running businesses from home, whose educational needs are often overlooked to cater for more traditional markets which are perceived as being more lucrative.
Going offshore to capture a larger share of the education market is a strategy that the vast majority of educational institutions have adopted. However, if they are to succeed in the long term they must understand the need for identifying the attributes that potential overseas students consider important when choosing an overseas institution for pursuing a higher degree.
References
Baird, L. (1967), ``The educational tools of college bound youth'',American College Testing Program Research Report, Iowa.
Bowers, T. and Pugh, R. (1972), ``A comparison of factors underlying college choice by students and parents'',American Educational Research Association Annual Meeting.
Chapman, R. (1979), ``Pricing policy and the college choice process'',Research in Higher Education, Vol. 10 No. 37, p. 57.
Chapman, D. (1981), ``A model of student college choice'',Journal of Higher Education, Vol. 52, pp. 490-505.
Discenza, R., Ferguson, J. and Wisner, R. (1985), ``Marketing higher education: using a situation analysis to identify prospective student needs in today's competitive environment'',NASPA, Vol. 22, pp. 18-25. Griffin, A. and Houser, J. (1993), ``The voice of the
customer'',Marketing Science, Winter, pp. 1-27.
Table IV
Rotated factor scores
Factor 1 (Academic resources) Information provided to choose area
of study
0.71899
Academic value 0.69031
Information given on career opportunities 0.67762
Reputable degree programme 0.67365
Good faculty 0.66457
Good social life on campus 0.56051
Superb recreation and other facilities 0.52212
Factor 2 (Physical facilities)
Necessary physical resources available 0.79246 Accommodation at reasonable cost 0.67328 Environment conducive to learning 0.51409
Factor 3 (Courses and entry requirements)
Wide range of courses 0.71109
Reasonable entry requirements 0.56001
Factor 4 (General influences)
Peer and family 0.76461
Reasonable cost 0.55937
Specialist programmes 0.46076
Factor 5 (Location)
Ideal location 0.81378
Clean and safe environment 0.70609
Mathew Joseph and Beatriz Joseph Indonesian students' perceptions of choice criteria in the selection of a tertiary institution: strategic implications
Hossler, D. (1985), ``A research overview of student college choice'',Association for the Study of Higher Education, Chicago, IL. Houston, M. (1979), ``Cognitive structure and
information search patterns of prospective graduate business students'',Advances in Consumer Research, Vol. VII, October, pp. 552-7.
Illing, D. (1998), ``Malaysian visas drop 80pc'',The Australian, 1 July.
Joseph, M. and Joseph, B. (1998), ``Identifying need of potential students in tertiary education for strategy development'',Quality Assurance in Education, Vol. 6 No. 2, pp. 90-6. Krone, F., Gilly, M., Zeithaml, V. and Lamb, C.
(1983), ``Factors influencing the graduate business school decision'',American Marketing Association Educators' Proceedings, Chicago, IL.
Litten, L. (1980), ``Marketing higher education'', Journal of Higher Education, Vol. 51 No. 4, pp. 40-59.
Maguire, J. and Lay, R. (1981), ``Modelling the college choice: image and decision'',College and University, Vol. 56, pp. 113-26.
Maslen, G. (1998a), ``AIEF points to growth in new markets'',Campus Review, Vol. 8 No. 11, 25-31 March, p. 4.
Maslen, G. (1998b), ``Swinburne joins offshore uni rush'',Campus Review, Vol. 8 No. 11, 25-31 March, p. 4.
Murphy, P. (1981), ``Consumer buying roles in college choice'',College and University, Vol. 56, pp. 140-50.
Seneca, J. and Taussig, M. (1987), ``The effects of tuition and financial aid on the enrolment decision at a state university'',Research in Higher Education, Vol. 26, August, pp. 337-62. Tierney, M. (1983), ``Student college choice sets:
toward an empirical characterization'',
Research in Higher Education, Vol. 18, pp. 271-84.
Webb, M. (1993), ``Variables influencing graduate business students' college selections'',College and University, Vol. 68 No. 1, pp. 38-46.
Further reading
Anderson, E. and Sullivan, M. (1993), ``The antecedents and consequences of customer satisfaction for firms'',Marketing Science, Vol. 12, pp. 125-43.
Berry, L. and Parasuraman, A. (1992),
``Prescriptions of a service quality revolution in America'',Organisational Dynamics, Vol. 20 No. 4, pp. 5-15.
Cook, R. and Zallocco, R. (1983), ``Predicting university preference and attendance'', Research in Higher Education, Vol. 19 No. 2, pp. 197-211.
Cronin, J. and Taylor, S. (1992), ``Measuring service quality: a reexamination and extension'',Journal of Marketing, Vol. 56, July, pp. 55-68.
Ford, J., Joseph, M. and Joseph, B. (1998), ``An importance-performance analysis of service quality in education: a comparison of New Zealand and United States business students'', accepted for publication inThe Journal of Services Marketing.
Ortinau, D. and Anderson, R. (1986), ``College students' post-purchase educational
satisfaction/dissatisfaction decision process: a conceptual model'',AMA Educators' Proceedings, Chicago, IL.
Ortinau, D., Anderson, R. and Klippel, R. (1987), ``The impact of student involvement and expectancy beliefs on course/faculty evaluations'',AMA Educators' Proceedings, Chicago, IL, pp. 266-71.
Mathew Joseph and Beatriz Joseph Indonesian students' perceptions of choice criteria in the selection of a tertiary institution: strategic implications
