Group 4-Education Sector

                                                   : Group 4 : Education Industry:

“Education comes with a price.”

These days providing a quality education is not only questioning the class of the mass but also the number of kids a family leaving a jeopardy of what would be the cost of their upbringging along with a dream of quality education.This issue is serious due to price hikes in the educational institutes every passing year.

 Select the Price Objective:

The kind of world class infrastructure,experienced faculties and the quality of  students that the IIMs have, has led to the position that they are in today.The different companies visiting IIMs give a package as close to lakhs and to maintain the same the fee structure is revised every year owing to the increase in the cost of education along with infrastructure maintainence,salary revision of the faculties and upgradation of facilities to the students.

The institute's location,different culture mix of students,brand name,competitive exposure,companies visiting,maintainance of ranks in top 10 are a few more factors that decide upon the pricing strategies.

To maintain the name of the brand the institute also spends on the students in terms of

ñ  Scholarships.

ñ  Intercollege events.

ñ  Educational trips.

ñ  Seminars.

ñ  Guest lectures.

ñ  Intra college events.

ñ  Electricity and maintainance.

ñ  Residential programs

ñ  Exam fees

ñ  Books and stationaries.

ñ  Salaries to staff and non-staff employees.

Analyse Competitor Price Mix:

Every year, India's most prestigious B-schools make a revision in their fee structure. In many cases even the number of seats increase in every B-school.One thing that students must understand the hike in fee is due to inflation or other infrastructural changes in the change. However, there are many banks that lend education loans to students at a very reasonable interest rate. Given below is the fees of different B-schools :

Top B-schools	Fee for 2011-13
IIM Ahmedabad	Rs 14.4 lakh
IIM Bangalore	Rs 13 lakh
IIM Calcutta	Rs 13.5 lakh
IIM Lucknow	Rs 8 lakh
IIM Kozhikode	Rs 10 lakh
IIM Indore	Rs 12 lakh
IIM Indore	Rs 12 lakh
IIM Shillong	Rs 10 lakh
IIM Rohtak	Rs 9 lakh
IIM Jaipur	Rs 9 lakh
IIM Ranchi	Rs 9 lakh
IIFT	Rs 10 lakh
FMS	Rs 21,000 (approx)
SPJIMR	Rs 8.7 lakh
XLRI	Rs 12 lakh

Select pricing Method:

 There are 4 types of the Pricing methods:

ñ   Cost Plus Pricing

ñ  Target return Pricing

ñ  Value based Pricing

ñ  Psychological Pricing

 

IIM have chosen a mix of Target return Pricing and Psychological Pricing.

In Target Return Pricing, set your price to achieve a target return-on-investment (ROI). For example, let's use the same situation as above, and assume that you have Rs.10,000 invested in the company. Your expected sales volume is 1,000 units in the first year. You want to recoup all your investment in the first year, so you need to make Rs.10,000 profit on 1,000 units, or Rs.10 profit per unit, giving you again a price of Rs.60 per unit.

This is just a technique to understand Target return pricing.Students come up with a mindset of having an IIM tag and are hence, psychologically ready to get associated with this brand even at a cost of high fees.

Selecting final price :

The final pricing is basically that you easily recover the cost and achieve the profit margins that you have decided for the institute.

Submitted by:

Group Members                                                                    Roll No

Priyamvada Khatri                                                                      95

Akshay Visveshwaran                                                     84

Ashmita Mazumder                                                                    72

Roshan Vailaya                                                                           64

Tulika Shukla                                                                              119

Vikas Chamarthi                                                                         105