The cost of higher education in the US has risen sharply over the past decade. As of 2020, a college degree costs on average $12,000 to $50,000 per year. Are you wondering why a college degree in the US costs so much? One of the forces driving the cost of education is the need by universities to earn profits to fund prestigious projects. Based on how things are today and how universities operate nowadays, it is clear that US universities are luxury brands. As the management of universities continues in their quest to build luxurious brands, parents and sponsors are receiving repercussions. Today, families are overstretched, and students have to borrow and re-borrow to acquire prestigious certifications from luxurious universities.
In this post, we look at different reasons why US universities are luxury brands. You will learn that various strategies that the university managements are adopting, contribute so much to making the universities luxury brands.
1. They Charge Fees Based on Their Value Proposition
The US universities have coined value statements that suggest they are providing graduates with 80% of the skills they would require at the workplace. Unfortunately, the same institutions do not live to the expectations. Employers will tell you that only 40% of university graduates arrive with the skills required for entry-level jobs. Thus, instead of producing market-ready graduates, the institutions are channeling half-baked graduates.
The fact that the US universities are coming up with strong value propositions just to attract enrollments from the students is highly regrettable. The boards of management at various institutions have focused on generating more revenue through building brands that appear prestigious, hence worthy of the asking price. Ultimately, it is clear that universities are luxury brands, hoping to charge more based on the value proposition rather than what they are capable of producing. It is for the same reason; several universities have ignored the requests to revise their fees even after the switch to online classes, following the pandemic.
2. They Emphasize Scarcity
Just like other global brands, the universities in the US have created a notion of scarcity, to create competition. Therefore, in the advertisements of upcoming enrollments, the universities say only limited slots available. Consequently, students who consider a university degree crucial to their success in life, will compete for the limited slots, and end up paying top dollar to secure a place at the prestigious university. Placing pressure on the student so that they can make an emotional decision, is another reason US universities are luxury brands.
The Universities Build Their Brand Based on the success of Alumni
Have you asked yourself why Universities do not highlight how many of their students ended up jobless for a decade? Instead, they focus on how many have held public offices and those that have turned out successful entrepreneurs. Well, no one likes being associated with failure. However, if the institutions of higher learning wanted to be fair enough, they should consider giving full statistics rather than just notable alumni. The reason for associating with the successful alumni is to attract the attention of many students, who compete for the “limited slots” available at the university. Students should also consider that success is dependent on their own effort, and not lured into thinking that so and so is successful because they attended certain universities.
Conclusion
Ideally, the fault is all on how the universities market their courses to students. Creating an element of scarcity, charging fees based on value proposition, and building brand success based on the success of alumni are some of the top marketing strategies used by the universities in the US. Ultimately, the universities have become luxury brands, and only for those who can afford or qualify for a student loan.
- Jessica Sun (2020). Why Universities Are the Ultimate Luxury Brands, bettermarketing.pub
- Scott Galloway (2019). NYU professor Scott Galloway says that when it comes to success, ‘conflating luck and talent is dangerous’, businessinsider.com