Marketing Plan for Educomp

International Marketing Assignment Rajan Chugh PGDIYM

Contents
Executive Summary .................................................................... 3 The Challenge ............................................................................. 4 Competitor Analysis ................................................................... 5 SWOT analysis of Educomp ........................................................ 8 Market Segment for EDUCOMP ................................................. 9 Marketing Strategy for EDUCOMP ........................................... 10 Promotions ............................................................................... 12 Short & Long Term Projections ................................................. 13 Long-Term Projections.............................................................. 14 Conclusion: ............................................................................... 16

Executive Summary
The Indian education system is one of the largest in the world. It is divided into two major segments, core and non-core businesses. While, the core group has schools and higher education, the non-core business consists of pre-schools, vocational training and coaching classes. The education sector in India is also considered as one of the major areas for investments as the entire education system is going through a process of overhaul, as per a report Emerging Opportunities for Private and Foreign Participants in Higher Education released by PricewaterhouseCoopers (PwC). The private education sector is estimated to reach US$ 70 billion by 2013 and US$ 115 billion by 2018, according to consulting firm Technopak. Technopak sees enrollments in K-12 growing to 351 million, requiring an additional 34 million seats by 2018. This equals US$ 80 billion at US$ 2400 a seat. The year gone by has seen Educomp consolidating its position as the leading education ecosystem in India, serving the entire education value chain from preSchool, to K-12, to vocational & higher education'. Further, in line with Educomps strategy of continuous innovation and expansion, a paradigm shift in business strategy has been made in the year to ensure that it becomes a global organization providing education to people around the globe. Educomp today reaches out to a total of ~11.4 million students including 3.1 million in SmartClass, 8.2 million in Interactive Class Training, 35,000 in pre-schools and 24,000 in the high school space. In addition, the Company has over 230 centers for vocational and test prep business, over755 preschools, 43 high schools, 7 colleges and 2.4 million users of its various online businesses Recognizing the huge potential demand from Tier 2 and Tier 3 markets and the fact that, despite strong growth, the market penetration for a product like SmartClass among Indian schools is still 1.5%, Educomp has changed from BOOT to an 'Outright Sale' business in the SmartClass segment. This move aims to make Educomp a global company seeking its mission to provide quality education to different parts of world. This move aims to make the segment a capital-light and securitization -based one. It would also facilitate faster growth for educomp and establish it as a global brand.

The Challenge
More than 97% of future population growth will be in Asia, Africa, the Middle East, Latin America and the Caribbean. Accordingly, the workforce will be increasingly diverse and mobile, and it will include more women. But most people, in particular in developing countries, still lack access to educational opportunities, either because these opportunities are not available or unaffordable. Online education presents unique opportunities to overcome these issues of access. Education can be available at any location with an internet connection and computer. Courses are more affordable without the additional costs needed to maintain a traditional university. The greater convenience of online courses makes education available even to people who are working and supporting their families. For an organization like Educomp it is not a piece of cake to expand its business beyond borders, there are lots of challenges that are foreseen and a lot of others which cannot be captured here. A few of the challenges in pursuing the global aspiration for Educomp are as follow: Standardized Curriculum: A standardized curriculum based on learning outcomes would be necessary to globalize the education. The education imparted to students varies from university to university, country to country. In this versatile environment keeping up with this dynamic curriculum is a challenge in itself. Faculty orientation: Orientation of faculty and training them to impart education remotely is a task in itself. It is a very different environment for the teacher to be teaching to a Mic and a Camera instead of a whole group of students therefore orienting the teachers is a challenge since not all teachers would be able to perform their best. Support System: A strong academic and student support system whereby students receive active attention and support as they progress through their programs of study. There are some contextual challenges - including cultural misunderstandings - that arise now that online education connects instructors and students from all around the world and from very different cultures. In developing countries one is likely to find one or more of the following conditions:

Varying learning styles. For example, students tend to be less active learners styles. than in developed countries. Different academic standards. For example, using another's work may be standards. plagiarism in one culture but accepted practice in another. A preference for some degree of face-to-face interaction with faculty; that is, students prefer to have some interaction before and or during the course being and-or delivered rather than no interaction. Local relevance. For example, students welcome local examples or case studies . that they can relate to, thereby developing a global perspective that has local elate relevance. Cultural and language differences. These can sometimes lead to confusion or differences. offence. Different cultures. Faculty need to be sensitized and have some degree of . acculturation regarding context as hierarchies play out differently in a ng developing versus developed countries. Perceptions of online education. There is also an underlying perception that an education. online education, unless it is from a well known institution, is of poorer quality. well-known

Competitor Analysis
NIIT Limited: National Institute of Information Technology Limited is a global al computer education company in business since 1981. The company is listed on . the National Stock Exchange and Bombay Stock Exchange of India. The company provides training for individuals, enterprises, schools and colleges. It has its presence in 40 countries worldwide. NIIT generates its revenue mainly from its IT arms and the Training arm. raining

NIIT Revenue
18% 40% Multimedia Software 42% Training

Benefits of NIIT E-Learning Learning: o o High Return on Investment for investors and patrons. Just in-Time trainings, ready modules to be presented to customers Time

o o o o o o o o o o o

Standard courseware and curriculum Chalks out professional development path Full fills mandatory training days requirements Measure and track training effectiveness Hands-on experience etc. Extremely aggressive advertisement Top ITs companies associated Scholarship Programs Brand building through various events in educational institutions and else where. Course customization Association with top B-schools and universities.

NIITs Marketing Strategy:

Capital Structure o Debt to Equity ratio, an important measure of balance sheet strength, has been high for Educomp historically. However, in the fiscal year ended March-2010, the company was able to bring down its debt-to-equity ratio. Debt equity ratio for Educomp is 0.6 for the financial year ended 2010, while the same is 0.8 for NIIT. The interesting part here is that Educomp brought down the ratio not through the repayment of debt. On the other hand, it diluted its equity through a Qualified Institutional Placement or a QIP.

Return on Equity o Return on Equity (ROE) has always been higher for Educomp as compared to NIIT. Average ROE for Educomp has been around 15.2% (from FY05 to FY10), while the same has been 8.6% for NIIT. Educomp has been able to translate its stellar performance at profit levels into higher ROE as well. This shows that Educomp could utilize the raised capital in an efficient way to generate the profit at net level.

Valuations o To compare the valuations of both the stocks, we have used the popular price to earnings (PE) ratio. The stock of Educomp has always traded at a higher PE multiple as compared to NIIT. Educomp appears to be commanding a premium thanks to its stellar performance in terms of the financial numbers.

SWOT analysis of Educomp

Strength: o o o o o o o o o o First Mover advantage. Develop Content in regional language Huge subscriber base Innovations Easy to understand Expanded into developing educational products that were employment oriented. Low prices against competitors Expansion through Acquisitions and Joint ventures abroad. Integration and diversification strategies. Training of teachers acted as a barrier to new entrants. Shortage of teachers and NCLB helped it in tapping tutorial markets (SES).

Weakness: o o o o o o o Requires trained staff so less teachers are available. Devotion of time by female teachers. Govt. Schools low spending on infrastructure Awareness about other products than SMARTCLASS. Dependency for technical support. Changes require investment Charges on per student basis. Dependent on number of students Dependent on reputation of school o Less acceptability in society.

Opportunities: o o o o o o o NCLB ( No Child Left Behind) act in US. Emerging IT era. Lack of standardize and high quality education in tier III town. Shortage of over 2 lakh schools in country. Increased Government focus on education. Rising income of middle class segment & education priority for Indian parents. Analysts expected company to register string growth despite of slowdown in economy across globe.

Threats: o o o o o o o Its a capital intensive business. The technology might become obsolete with time Being an emerging and growing business it invites competition. Analysts felt that the payments from government could be delayed. Risk of change of government every four years. Risk of change of policies with change in government or otherwise. Gaining acceptance in tier II and tier III cities.

Market Segment for EDUCOMP

Educomp is a leader in several of the market segments it operates in. It has created and owns the largest content library for K K-12. It is the largest Professional Development Company, a leading ICT (Information Communication Technology) Solutions Company, and the pioneer in education process outsourcing in India. Educomp, the only Education Ecosystem Company in India, has a portfolio of fast growing brands. The flagship products for EDUCOMP businesses of School Learning Solutions: smartclass and Edureach lead the growth of our business in India. EDUCOMP is the market leaders in their segments of private and government schools respectively. The Smartclass is a teacher led educational content solution that dramatically teacher-led improves learning outcomes in private schools.

Edureach, providing turnkey solutions for computer aided learning in

government schools, is the only company in India to have content in 11 regional languages across 14 states in India. EDUCOMP 3, the one on one learning system, is designed with the power of , highly evolved classroom strategies using cutting edge technology.

Marketing Strategy for EDUCOMP

Educomp is the largest Education Company in India and the only company spread across the entire education ecosystem. From schools to skills; Educomp group empowers over 19.4 million learners and educators across ~29,000 schools to imagine, think and create a better future. uture. EDUCOMP has established itself as a trusted name in India; the next step would be to go GLOBAL. EDUCOMP should launch its flagship product Educomp Smart class to other developing countries to start with like Sri Lanka, Singapore, South-Africa etc. Sri-Lanka, South

Product: Educomp Smart class

Educomp smartclass is a first of its kind, teacher led educational content based teacher-led solution that has dramatically improved learning outcomes in Private Schools. Powered by Indias largest Digital Content library of curriculum mapped, multimedia rich, 3D curriculum-mapped, content; smartclass is today a market leader in this domain. The number of Educomp smartclass enabled schools grows at almost 10 schools a day.

The smartclass Class Transformation System (or CTS) and the smartclass Digital Teaching System (or DTS) are the biggest and most innovative initiatives in the space of digital classroom content and digital classroom hardware respectively. The CTS broadens the choice of teaching tools available with the teacher beyond invaluable rich 3D Animations to bring abstract concepts to life. The arsenal of solutions now available for teachers also includes tools like ready to use MCQs, Virtual Laboratory of Simulations, Work Sheets, Mindmaps, Teaching Ideas, Real Life Applications, Topic Synopsis, Web links and Diagram Maker. The CTS poised as the next generation of Educomp smartclass in schools, is the revolutionary leap forward in enabling excellence in schools. Pricing EDUCOMP Smart Class: The pricing of the EDUCOMP products remains robust, the average selling price per classroom for the quarter coming in at Rs. 4.04 lakh, this excludes the additional classrooms sold to existing schools. Despite the noise around the competition, schools across the country prefer imparting education through SmartClass or any other product, because of superior quality of the content, comprehensiveness of the library, ease of product use, state-of-the-art technology and product infrastructure, and unmatched after sales customer service. The prices of the services provided are very competitive, since the customer base of EDUCOMP is very large as compared to any other player in the market it can fluctuate the prices of the whole market. Because of economies of scale Educomp is able to provide services at a lower price without compromising with the quality of delivery. Now when EDUCOMP is trying to move across borders, there would be number of markets where such technologies do not exists EDUCOMP would have the first mover advantage and set the stage for future. Initially when Educomp starts its operation in any market where it is the first mover it will have to study the market before entering for questions such as what is the average income of people in that market, what is the level of education being imparted to students in the educational institutions etc. It will also have to take care of other regulations in the market like number of hours a student can spend in school. However to enter the market initially the pricing could be kept on the lower side but with time when the EDUCOMP becomes an established brand the prices could be increased by introducing new features and facilities.

Placing EDUCOMP Smart Class (Distribution): As EDUCOMP is ramping up and spreading its wings into the overseas marking, it is good for Educomp to select a more robust distribution system than the traditional one. o Make the web more powerful: Need to make Educomp website more powerful and more self-explanatory where schools can come in and register them and can pay their license fee online. o Rope in more Partners: Currently Educomp doesnt have much presence in the global market and will also take time to make more presence. So creating partners will help Educomp in making presence earlier. o Online accessibility: Make Educomp more accessible online so that users can register online even if Educomp or its partner is not available in their area. This helping Educomp in reaching to remote areas where making partners is quite difficult.

Promotions
o Online Advertising: More and more people are coming to internet and it is very essential to reach out to your online audience and make online presence through online advertising. Google AdSense is one of the good ideas to start with. o Social Media: Facebook is one of the best examples we have for Social Media. More than 100 million users are on Facebook and access it on regular basis. Educomp needs be on the social website and make people more aware about its products and courses. It can start with online contest to make its audience more engaging. Online event through the Educomps own technology. o Event and Seminars: More Events and Seminars need to be conducted as it will create a momentum and make people more aware about the product and the technology. Free online live events and road shows are good idea for Event and Seminars.

School and Colleges Educomp needs to make schools and colleges aware Colleges: about the content it has developed and educate them how this multimedia content can help them creating cla classroom more interactive.

Televisions: Most of us still watch television and advertising there is also a televisions good idea to keep the audience aware about the product and technology invented by Educomp.

Short & Long Term Projections

Nearly 12 million post-secondary students in the United States take some or all of secondary their classes online right now. But this number will skyrocket to more than 22 million in the next five years, according to data released recently by research firm Ambient Insight. According to Ambient Insight Chief Research Officer Sam S. Adkins, already some 1.25 million students in higher education programs take all of their classes online, while another 10.65 take some of their classes online. The two groups are still classes outnumbered by students who take all of their courses in physical classrooms, which Ambient Insight reckoned at 15.14 million as of 2009.

Across all segments, the market for electronic learning products and services, at present, is $16.7 billion. According to the report, this will grow at a compound annual growth rate of 7.4 percent over the next five years to $23.8 billion in 2014

Short-Term Projections: o High costs of infrastructure: The cost for initial setup across the borders is expected to be high. The factors that attribute towards high costs towards the initial setup of offices, hiring people, visiting prospective clients etc. The cost of internet infrastructure, including an internet server with software, and a high speed internet connection. These technologies are currently expensive, but will drop dramatically as computers and internet access become cheaper and as more and more people join the course, the fixed cost per person would drop. o High Costs of Course development: The cost of online course development is higher initially than in the long run. Even though course modules may be re-used, they must be created in the first instance of their use. Similarly, instructional management software must be purchased and designed, and configured. o Human Resource: The human cost, both as needed for course development, and also, as needed for training and learning how to work in the new environment, is higher at first. o Dim Response: The initial response to the offerings may not be good enough since people are always skeptical to change and would not accept it very easily, so the initial revenue is expected to be low but the costs might be high in first few months.

Long-Term Projections
As the online education will grow the actual initial cost will drop dramatically. Reduction in Infrastructure Cost: As more and more students would study online the need of physical classroom will be dropped hence the cost of building infrastructure will lower down.

Content creation cost: Once the era is changed to the online education era more and more content creators would come into the market and that would leads to more competition that leads to less content creation cost. Personalized Courses: The cost of course offerings will decrease as courses are increasingly personalized, because instructor communications will become less frequent and more focused. The most significant savings will be realized as the class and course based models are abandoned. Improved training costs: Producing learning content is time consuming whether its online or not. With e-learning, each time the course is accessed your return on investment improves because you are dividing the fixed production costs by number of uses. You also have savings through decreased travel, reduced material, and hopefully improved (and more efficient) performance. Decreased material costs: Lets say you have to train how to arrange equipment in a sterile environment like an operating room. If you had to use the real environment, it would be costly. Even setting up a fake environment has material costs and labor. By creating the environment online and letting the learner practice, you never have to worry about the costs associated with set up, use, and clean up. Increased productivity: Because e-learning is not bound by geography or time, you can control trainings impact on production by training people during down times. In addition, with the current economy, youre asking people to do more with less. So elearning is a great way to give them the tools and skills needed to enhance their performance. Standardization: You may have a great facilitator, but thats no guarantee that the courses are presented the same across sessions. E-learning allows you to create a standardized process and consistency in the delivery of content. It also compresses delivery time. Ive combined e-learning courses with facilitated sessions. E-learning delivered consistent content. Live sessions were interactive case studies that applied the information

Conclusion:
Infrastructure cost is rising day by day that creating difficulties in building schools and education institutes everywhere. Even if somehow we are able to build more schools and colleges, still the quality education is required and unfortunately it is very difficult to find qualified trainers/teachers afterwards. To bring the quality education to the masses is quite difficult in this scenario and time consuming. Online Education or e-Learning can solve this problem. The only investment we need is the IT-infrastructure. It can produce great results by decreasing costs and improving performance. Also, unlike a onetime classroom session, the e-learning course is available for others. This includes the static e-learning course as well as any ongoing conversations in networked communities. E-Learning has huge potential and can solve the Education problems in developed and developing countries. Educomp should start its operations in developing countries in Africa and continue building more values in India and the other Global markets.

Thank you!