assessing the effect of marketing tactics on parents

ASSESSING THE EFFECT OF MARKETING TACTICS ONPARENTS’ ATTITUDES AND BEHAVIOURSChung-Kai LiLing Tung University, TaiwanChia-Hung HungLing Tung University, TaiwanMartin C KaoLing Tung University, TaiwanAbstract: This study attempts to investigate how selected <strong>marketing</strong> <strong>tactics</strong> can enhancecustomer loyalty in <strong>the</strong> educational context. Building on extant research, <strong>the</strong> authors proposean integrated framework in which <strong>marketing</strong> <strong>tactics</strong> are related to perceived school image,which in turn influences customer loyalty. A questionnaire is constructed, and data arecollected from 1200 parents <strong>of</strong> schoolchildren studying in 60 elementary schools in Taiwan.Structural equation modeling is applied to analyze <strong>the</strong> data. The results show that promotion<strong>tactics</strong> have <strong>the</strong> most influence on school image, and that school image is an <strong>effect</strong> predictor<strong>of</strong> parents’ behavior. The management implications <strong>of</strong> <strong>the</strong>se findings and suggestions forfuture research are subsequently discussed. Keywords: <strong>marketing</strong> <strong>tactics</strong>; corporate image;customer loyaltyINTRODUCTIONEducational markets have been introduced into compulsory education in many Westerncountries throughout <strong>the</strong> 1980s and 1990s (Oplatka and Hemsley-Brown 2004); however, thistopic is hardly discussed in Eastern countries. In Taiwan, for instance, schools currently facemore competitive environments due to <strong>the</strong> dramatic decrease in birth rate, that is, <strong>the</strong> drop inbirth population from 324,980 to 205,721 in <strong>the</strong> past decade (Ministry <strong>of</strong> <strong>the</strong> Interior 2007).Thus, <strong>the</strong> survival <strong>of</strong> many schools is dependent on <strong>the</strong>ir capacity to retain or increase <strong>the</strong>recruitment <strong>of</strong> students. In education studies, a long research tradition exists that deals with<strong>the</strong> subject <strong>of</strong> student loyalty (Helgesen and Nesset 2007; Hennig-Thurau, Langer, andHansen 2001). However, empirical research which focuses on <strong>the</strong> incorporation <strong>of</strong> <strong>marketing</strong>activities in schools in order to improve school image and thus successfully retain and recruitstudents is scarce.The existing literature <strong>of</strong>fers a wide range <strong>of</strong> antecedents for corporate image, but <strong>the</strong>researcher disagrees as to which one best captures <strong>the</strong> characteristics <strong>of</strong> corporate image thatinfluence performance (Odekerken-Schroder, De Wulf, and Schumacher 2003). For <strong>the</strong>current study, we focus on a few key elements <strong>of</strong> <strong>marketing</strong> <strong>tactics</strong>. In particular, we select1

product mix, people mix, price mix, place mix, and promotion mix as a representative set <strong>of</strong><strong>marketing</strong> programs. Knowing how certain <strong>marketing</strong> <strong>tactics</strong> contribute to school image and<strong>the</strong>n to consumer attitudes and behavior will enable school principals to develop <strong>effect</strong>ive<strong>marketing</strong> plans.In this article, we seek to answer <strong>the</strong> following research questions: (1) Which <strong>marketing</strong>strategies are most <strong>effect</strong>ive for building school image? And (2) Does school image asmediating variable <strong>effect</strong>ive in influencing parents’ loyalty?CONCEPTUAL MODEL AND HYPOTHESESThe main purpose <strong>of</strong> our study was to investigate <strong>the</strong> relationship between school<strong>marketing</strong> <strong>tactics</strong> and parents’ loyalty. Figure 1 depicts <strong>the</strong> research model underlying ourstudy. We delineated our model into two portions. Portion 1 deals with parents’ perceived<strong>marketing</strong> <strong>tactics</strong> and <strong>the</strong>ir <strong>effect</strong> on school image. Portion 2 includes school image aspredictors <strong>of</strong> parents’ loyalty. We present below <strong>the</strong> literature review and <strong>the</strong> hypo<strong>the</strong>sesdeveloped.Marketing <strong>tactics</strong>1. Product mix2. People mix3. Price mix4. Place mix5. Promotion mixH1School imageH2Parents’ loyaltyFigure 1: Conceptual modelResearch Hypo<strong>the</strong>sesMarketing <strong>tactics</strong> and school imageKolter and Fox (1995) defined educational <strong>marketing</strong> as “<strong>the</strong> analysis, planning,implementation, and control <strong>of</strong> carefully formulated programs designed to bring aboutvoluntary exchanges <strong>of</strong> values with a target market to achieve organizational objects.”In this study, we investigated parents’ perceptions <strong>of</strong> five selected strategic <strong>marketing</strong>elements, namely, product, people, price, place, and promotion. The selected factors do notembrace all types <strong>of</strong> <strong>marketing</strong> efforts but are representative enough <strong>of</strong> <strong>the</strong> efforts and <strong>the</strong>formation <strong>of</strong> school image.Product mix. Product mix in this study refers to school infrastructure such as <strong>the</strong> library,computers, and teaching facilities. Price et al.’s (2003) study showed that students’perceptions <strong>of</strong> a university’s facilities are one <strong>of</strong> <strong>the</strong> main influences for <strong>the</strong>ir choice <strong>of</strong> school.O<strong>the</strong>r empirical studies support <strong>the</strong> view that satisfaction with <strong>the</strong> facilities and equipment is2

positively related to overall school satisfaction (Friedman, Bobrowski, and Geraci 2006),which in turn enhances students’ loyalty (Helgesen and Nesset 2007). Palacio, Meneses, andPerez’s (2002) study also showed that <strong>the</strong> facility component <strong>of</strong> cognitive image positivelyand significantly influences <strong>the</strong> overall image <strong>of</strong> <strong>the</strong> university.People mix. People mix in this study refers to teachers’ ability, skill, knowledge,experience, and care for <strong>the</strong> students. Douglas, Douglas, and Barnes (2006) asserted that <strong>the</strong>most important aspects that influence students’ satisfaction were associated with teaching andlearning, while a number <strong>of</strong> scholars support <strong>the</strong> view that teachers’ ability, communication,and expertise are positively related to overall school satisfaction (Friedman, Bobrowski, andGeraci 2006; Marzo-Navarro, Pedraja-Iglesias, and Rivera-Torres 2005) which in turnenhances students’ loyalty (Helgesen and Nesset 2007). Palacio, Meneses, and Perez’s (2002)study also showed that <strong>the</strong> teaching staff component <strong>of</strong> cognitive image positively andsignificantly influences <strong>the</strong> overall image <strong>of</strong> <strong>the</strong> university. Services are delivered to <strong>the</strong>student by <strong>the</strong> teacher, and this moment <strong>of</strong> truth can make or break a university’s image(Banwet and Datta 2003).Price mix. According to <strong>the</strong> Ministry <strong>of</strong> Education (MOE), all elementary schools inTaiwan are to charge <strong>the</strong> same tuition fee. Therefore, price mix in this study will provide avariety <strong>of</strong> scholarships and bursary. Marzo-Navarro, Pedraja-Iglesias, and Rivera-Torres(2005) showed that enrolment is <strong>the</strong> element that has an impact on student satisfaction, andthis satisfaction explains <strong>the</strong> intent to recommend <strong>the</strong> courses.Place mix. Place mix in this study refers to whe<strong>the</strong>r <strong>the</strong> school’s location is accessible andtraffic is convenient. Place appears as a heterogeneous phenomenon, which is created by eachschool at each place. Although it is a way <strong>of</strong> combining local and distant resources, locationconvenience reduces <strong>the</strong> time parents and students must travel back and forth from schoolevery day, thus perceiving more value from <strong>the</strong> school. The increased value results mostlyfrom <strong>the</strong> reduction in time sacrifices that <strong>the</strong> parents must make to escort <strong>the</strong> child to school.Such increased value leads to <strong>the</strong> parents’ greater perceived school image (Yoo, Donthu, andLee 2000). Although <strong>the</strong>re is a lack <strong>of</strong> empirical evidence to support this relationship, itappears logical that place mix is associated with school image.Promotion mix. In this study, promotion mix refers to <strong>the</strong> information sharing withparents via formal or informal media (e.g., leaflets, letters, brochures, Internet portals, or PTAmeetings). Most schools engage in press and non-press public relations. It is largely evidentthat schools in many countries that adopted educational market policies expended much effortin gaining enhanced press coverage <strong>of</strong> <strong>the</strong>ir activities in order to promote <strong>the</strong>ir image andrecruit prospective students (Oplatka and Hemsley-Brown 2004).School image can be formed by various constituencies about many different entities and is<strong>the</strong> result <strong>of</strong> an accumulated process which incorporates experience over time, diverseinformation, and <strong>marketing</strong> activities <strong>of</strong> <strong>the</strong> school. The established and developed school3

image can be rapidly improved by technological breakthroughs and unexpected achievementsor, conversely, be destroyed by neglect <strong>of</strong> <strong>the</strong> needs and expectations <strong>of</strong> various parents whointeract with <strong>the</strong> school (Nguyen and Leblanc 2001). Therefore, school image can beenhanced. when parents are satisfied with <strong>the</strong> perceived school <strong>marketing</strong> activities. Thus, <strong>the</strong>first hypo<strong>the</strong>sis is as follows:H1a-e: A selected school <strong>marketing</strong> mix element, that is, (H1a) product, (H1b) people, (H1c)price, (H1d) place, and (H1e) promotion, is positively related to school image.School image and parents’ loyaltyThe development, maintenance, and enhancement <strong>of</strong> customer loyalty toward a firm’sproducts or services are generally seen as <strong>the</strong> central thrust <strong>of</strong> <strong>marketing</strong> activities (Dick andBasu 1994). Higher customer loyalty implies higher market share and pr<strong>of</strong>itability (Chaudhuriand Holbrook 2001; Fornell and Wernerfelt 1988; Reichheld, Markey, and Hopton 2000). Thisincreased customer loyalty can also help lower <strong>marketing</strong> costs, solicit more customers, and<strong>effect</strong>ively operate trading leverage (Aaker 1997). Moreover, loyal customers foster positiveword-<strong>of</strong>-mouth promotion, advocacy, and customer referrals (Dick and Basu 1994). It is nosurprise <strong>the</strong>n that companies want to retain and develop <strong>the</strong>ir loyal customers.Paralleling <strong>the</strong> related concept <strong>of</strong> customer loyalty, parents’ loyalty contains an attitudinaland a behavioral component (Dick and Basu 1994). The term “parents’ loyalty” means thatparents hold a deep commitment to register at a preferred educational institution consistentlyin <strong>the</strong> future, to provide positive word <strong>of</strong> mouth, to recommend <strong>the</strong> service to o<strong>the</strong>rs, and toencourage o<strong>the</strong>rs to use <strong>the</strong> service (Zeithaml, Berry, and Parasuraman 1996). Due to <strong>the</strong>present critical educational situation (e.g., supply exceeds demand) in Taiwan, it is thusimportant that parents are committed to <strong>the</strong> educational institution. Loyal parents who will let<strong>the</strong>ir child study at <strong>the</strong> same primary school until <strong>the</strong>ir education is complete can be goodadvocates – recommending <strong>the</strong> school to o<strong>the</strong>r parents and encouraging o<strong>the</strong>r children tostudy <strong>the</strong>re – thus helping to attract new students.Parents form an image <strong>of</strong> <strong>the</strong> school based on <strong>the</strong> associations <strong>the</strong>y remember with respectto that school. Therefore, school image is <strong>the</strong> result <strong>of</strong> an aggregate process by which parentscompare and contrast <strong>the</strong> various attributes <strong>of</strong> schools.Numerous scholars assert that corporate image is associated with customers’ accumulatedexperiences and market communication with <strong>the</strong> products and services such that <strong>the</strong> morefavorable <strong>the</strong> corporate image, <strong>the</strong> more customers will perceive quality, value, andsatisfaction, and <strong>the</strong> more loyalty <strong>the</strong>y will have to <strong>the</strong> company (Andreassen and Lindestand1998a; Johnson et al. 2001). In relation to this, Oliver (1996) asserted that attitudes arefunctionally related to customer behavioral intentions, which predict actual behavior.Therefore, perceptions <strong>of</strong> school image form attitudes which in turn influence parents’ loyalty,4

People8 0.748 (19.878) 0.560Price mix Price1 0.564 0.318 0.8424Price2 0.660 (14.968) 0.436Price3 0.816 (15.336) 0.666Price4 0.799 (15.076) 0.639Price5 0.736 (14.353) 0.541Place mix Place1 0.545 0.297 0.7480Place2 0.803 (14.262) 0.645Place3 0.827 (13.346) 0.683Promotion mix Promotion1 0.677 0.459 0.8743Promotion2 0.740 (21.456) 0.547Promotion3 0.727 (17.428) 0.529Promotion4 0.751 (17.610) 0.564Promotion5 0.772 (18.031) 0.595Promotion6 0.672 (16.338) 0.452School image reputation 0.938 0.880 0.9333credibility 0.933(45.470) 0.871Parents’ loyalty Intention1 0.847 0.718 0.9505Intention2 0.873(39.554) 0.762WOM1 0.887(30.374) 0.786WOM2 0.918(32.454) 0.843WOM3 0.904(32.516) 0.817χ 2 =951.484 (p=0.001) df=462 χ 2 / df=2.059 GFI=0.930 AGFI=0.915 RMSEA=0.037RMR=0.020 NFI=0.948 CFI=0.972 IFI=0.972Product 1Table2 confirmatory factor analysis --- discriminant validity1 2 3 4 5 6 7People 0.543 a (0.013) b 1Price 0.544(0.014) 0.625(0.013) 1Place 0.495(0.014) 0.451(0.012) 0.548(0.014) 1Promotion 0.546(0.016) 0.499(0.013) 0.598(0.016) 0.627(0.017) 1Image 0.597(0.016) 0.606(0.014) 0.620(0.016) 0.584(0.016) 0.694(0.018) 1Loyalty 0.518(0.017) 0.535(0.014) 0.569(0.016) 0.513(0.016) 0.604(0.018) 0.846(0.020) 1Note: a : correlation between constructsb : standard errorsA common test <strong>of</strong> discriminant validity is determining whe<strong>the</strong>r <strong>the</strong> confidence intervalaround two constructs’ correlation includes 1 (Chiou and Droge 2006; Smith and Barclay1997). None <strong>of</strong> <strong>the</strong> 21 confidence intervals included 1 (see Table 2). Ano<strong>the</strong>r common testinvolves comparing a model in which each pair <strong>of</strong> interfactor correlations is constrained to 17

and compared to an unconstrained model (Anderson and Gerbing 1988). In all 21 cases, <strong>the</strong>constrained model fits significantly worse, and <strong>the</strong> difference in χ 2 was significant. Therefore,discriminant validity was supported.Structural modelThe structural model results for overall fit were χ 2 (df) = 1001.951(468), p

Table 3 Tests <strong>of</strong> <strong>the</strong> Hypo<strong>the</strong>sespathCoefficients (T-value) conclusionRelationships <strong>of</strong> school <strong>marketing</strong> mix to school imageHypo<strong>the</strong>sis 1a:product school image (+) 0.161 *** (3.881) supportHypo<strong>the</strong>sis 1b: people school image (+) 0.214 *** (5.600) supportHypo<strong>the</strong>sis 1c: Price school image (+) 0.133 ** (3.010) supportHypo<strong>the</strong>sis 1d: Place school image (+) 0.121 *** (2.906) supportHypo<strong>the</strong>sis 1e: Promotion school image (+) 0.345 *** (7.466) supportHypo<strong>the</strong>sis 4: School image parents’ loyalty 0.850 *** (26.787) supportNotes: * p< 0.05; ** p< 0.01; *** p< 0.001CONCLUSION AND IMPLICATIONSThis study contributes to <strong>the</strong> explanations <strong>of</strong> <strong>the</strong> <strong>effect</strong>s <strong>of</strong> selected <strong>marketing</strong> strategy onparents’ loyalty by explicating <strong>the</strong> consequences or outcomes. Specifically, we investigated<strong>the</strong> relational linkage between five perceived <strong>marketing</strong> activities and parents’ loyalty through<strong>the</strong> mediating role <strong>of</strong> school image and found some important implications for <strong>the</strong> formation<strong>of</strong> parents’ loyalty to elementary schools.Impact <strong>of</strong> <strong>marketing</strong> <strong>tactics</strong> on school imageAs to <strong>the</strong> first research problem, we found that all selected <strong>marketing</strong> strategies posefavorable influences on parents associated with school image. Empirical results indicated that<strong>the</strong> higher <strong>the</strong> parents’ perception <strong>of</strong> <strong>marketing</strong> efforts, <strong>the</strong> more favorable <strong>the</strong> school imagewill be. However, <strong>the</strong> influences are different as among those selected <strong>marketing</strong> strategies,promotion <strong>tactics</strong> are <strong>the</strong> most significant factors influencing school image, followed by price<strong>tactics</strong>, people <strong>tactics</strong>, and product <strong>tactics</strong>. Meanwhile, place <strong>tactics</strong> had <strong>the</strong> weakest <strong>effect</strong>s.School image is complicated because it is based on multiple experiences, facts, episodes,and information, and it <strong>the</strong>refore takes a long time to develop (Yoo, Donthu, and Lee 2000).In this study, we found that school image can develop through physical facilities andequipment; teachers’ skill, ability, and knowledge; financial aid; location convenient to access;brochures; internet postings; or symposium. Our study showed <strong>the</strong> importance and <strong>the</strong> roles <strong>of</strong>various <strong>marketing</strong> efforts in building a favorable school image. As such, school principals canrelate <strong>the</strong>se findings to <strong>the</strong>ir image-building strategies.The question <strong>of</strong> whe<strong>the</strong>r schools should engage in <strong>marketing</strong> activities remains undercontradictory perceptions and emerging dilemmas (Oplatka and Hemsley-Brown 2004). In <strong>the</strong>highly competitive and rapidly changing education system, survival becomes one <strong>of</strong> <strong>the</strong> mostimportant goals for schools. In o<strong>the</strong>r words, how to maintain or even enhance school imagehas become an important success indicator for schools (Zeithaml, Berry, and Parasuraman1996). The empirical results <strong>of</strong> this study showed that a school’s dedication in <strong>the</strong> practice <strong>of</strong><strong>marketing</strong> mix is worthwhile as <strong>the</strong> perceptions <strong>of</strong> <strong>marketing</strong> investment are beneficial toward9

<strong>the</strong> enhancement <strong>of</strong> <strong>the</strong> school’s image. Thus, building distinctive positions is a successfulstrategy for enhancing competitiveness in educational institutions.Impact <strong>of</strong> school image on parents’ loyaltyAs to <strong>the</strong> second research problem, customers with positive perceptions <strong>of</strong> <strong>marketing</strong>effort were more likely to have a favorable school image, which in turn enhances parents’positive word-<strong>of</strong>-mouth and retention. The results suggested that school image and act asuseful tools for predicting parents’ loyalty.School image could support or destroy consumers’ beliefs <strong>of</strong> acquiring value, <strong>the</strong>rebydirectly influencing customer attitude and behavior (Abdullah, Al-Nasser, and Husain 2000).Hence, school image may function as a precursor or gatekeeper to more extensiveelaborations. When <strong>the</strong> school image is favorable, <strong>the</strong> positive impression enhances <strong>the</strong>possibility <strong>of</strong> repurchase and positive word-<strong>of</strong>-mouth.ImplicationsThis study has made several contributions to <strong>the</strong> literature. First, we built an integratedframework by shedding light on <strong>the</strong> <strong>effect</strong>s <strong>of</strong> <strong>marketing</strong> mix strategies on school image, andcustomer loyalty. We also demonstrated that different <strong>marketing</strong> <strong>tactics</strong> have a differentialimpact on school image. Second, <strong>the</strong> empirical results found that school image has a strongerinfluence on parents’ loyalty, and that ei<strong>the</strong>r one-way or two-way communication has <strong>the</strong>strongest <strong>effect</strong> on enhancing positive school image. Thus, communication is one <strong>of</strong> <strong>the</strong> mostimportant platforms on which school image may be built. Third, this study could enrich <strong>the</strong>body <strong>of</strong> knowledge in customer loyalty by providing empirical support to <strong>the</strong> <strong>effect</strong>s <strong>of</strong><strong>marketing</strong> mix strategies on school image and loyalty <strong>effect</strong>iveness.In terms <strong>of</strong> implications for managers in <strong>the</strong> services industry, a favorable image can leadto customer loyalty. We found that image is very important in service companies. Image hasintangible aspects that are not easy to be duplicated by competitors and hence play <strong>the</strong> mostprominent roles in <strong>the</strong> explanation <strong>of</strong> future loyalties. Those schools that have a strong,distinctive image will be more successful in facing <strong>the</strong>ir competitors. In order to build afavorable image facilitate desirable outcomes, it is essential to identify first <strong>the</strong> targetcustomers and <strong>the</strong>n design and develop more suitable and <strong>effect</strong>ive <strong>marketing</strong> strategies sothat <strong>the</strong> <strong>marketing</strong> efforts can be recognized by <strong>the</strong> customers; thus, <strong>the</strong> fur<strong>the</strong>r enhancement<strong>of</strong> a positive image will lead to desirable outcomes. Simply stated, schools that depend onword-<strong>of</strong>-mouth strategies to recruit new students or on loyalty strategies to retain existingstudents should carefully analyze, plan, and implement <strong>effect</strong>ive <strong>marketing</strong> programs. Insummary, <strong>the</strong> empirical results suggest that <strong>effect</strong>ively managing <strong>marketing</strong> activities isimportant as this can help <strong>the</strong> company gain favorable advantage over its competitors byimproving quality.10

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