Introduction
Pricing is a set of calculations involving the product’s value and costs that allows attracting customers with a reasonable offer while providing profits for the business. For this new learning platform targeting Computer Science studies, the price should be below a cost of a University degree in North America but above the cost of studies offered by competitors—Coursera and edX. Hence, it will be premium when compared to other learning platforms but economy pricing when compared to offline studies. The objective of charging a premium over Coursera and edX’s services is justified by extensive support and face to face communication with educators that these learning platforms do not offer. This paper outlines the pricing strategy and objectives for the new product and presents the marketing activities calendar and budget.
Price Point, Strategies, Objectives
Premium pricing is a tactic under which the service charges more for its offer when compared to the competition. According to Huseyin and Topaloglu (2019), the best way of selecting a pricing model is to base it on concrete data, for example, about demand. However, in many cases, there is not enough information about the potential demand because the product is new to the market. This is the case with this new online platform since although there is competition from major online learning sites, none of them focuses on one type of degree. The pricing for this new development, therefore, will be based on the data about edX and Coursera, as well as some assumptions about the target audience.
The previous parts of the thesis assignment show that the average prices for a degree program offered by edX and Coursera are between $447 and $1344. The variance is attributed to the type of degree, duration of the program, and a number of academic credits. The comparable program titled “Computer Science Fundamentals” offered by edX in partnership with NYU costs $447 per six months of studies. Since the new platform will offer more support and cooperation between educators and learners, the duration of the program should be longer, for example, one year, and the price should be set higher to account for the additional benefits a learner will access. The price point for this product is at $2000 per course program that will provide a learner with a degree at the end of their studies.
Pricing Strategy
The justification for the premium pricing is the demand for computer science degrees, the high salary of these specialists upon graduation, and the additional services that the new platform will offer to its consumers. According to the US National Bureau of Labor and Statistics, the demand for employees in the computer science field will increase by 13% until 2026 (as cited in “Are computer science jobs in demand? ” n.d.). Moreover, the global shortage of skilled workers in this field was estimated at 1.1 million people in 2020. This deficit will continue to increase, which implies that the demand for degrees in computer science will be popular among learners as well.
Under premium pricing, the service charges more when compared to its competition, allowing for higher margins. According to Simon and Fassnacht (2019), premium pricing is a solid strategy for companies that have a strong competitive advantage. In the case of this platform, the advantage is evident since the vast majority of the learners partaking in an online course never finish it, and only 10% succeed, as was discussed previously. This platform will help learners complete their degrees because they will communicate with their educators and support staff and will be engaged in learning through homework. Hence, the learners will pay a premium for a better studying experience, apart from the high-quality knowledge they will receive.
Finally, premium pricing implies that the targeted audience is not a mass market. With Massive Open Online Courses (MOOC) such as Coursera and edX, the target audience is broad. For this new platform, since the focus is narrower and the courses will be suitable only for people interested in computer sciences, the service is more niche. In the case of MOOCs, economical pricing is justifiable because the profit is reached through low margins and a large number of participants (Simon & Fassnacht, 2019). With a niche service, the profit can be reached by having higher prices.
Objectives
The premium pricing aims to allow the platform to have distinctive features that are an evident advantage when compared to the competition. Premium also allows spending enough on overhead costs, including marketing and sales (Simon & Fassnacht, 2019). This is because the profit margin is sufficient. Finally, this approach allows maximizing short-run profits and monetary sales, which will be necessary to cover the investment in technology and marketing. The objectives of the pricing strategy are:
- Provide a higher quality of learning experiences
- Allow students to communicate with their professors
- Integrate technology that makes the studies easier
- Provide technical support to students
- Review homework and conduct tests
- Work in partnership with a University that will issue a degree
- Account for the investment in technology and marketing
- Obtain high-profit margins
Marketing Activities
Since this is an online learning platform, the majority of marketing activities will be online. Apart from social media and targeted advertising, it is vital to raise awareness about this service through educational videos, which will help the viewers understand the purpose and benefits of this learning platform. Youtube, for example, has a plethora of “study with me” or “how I became a programmer” videos. Partnerships with people who upload this content can help raise awareness about this platform among the audiences interested in learning about computer science. For example, the individuals who routinely upload videos showing how they study computer science have the credibility and trust of the audience and can become brand ambassadors for this new platform.
Apart from this, it is vital to utilize social media marketing, including content for blogs and social media posts. These posts will help learners get familiar with the platform and will include tips on how to study. Finally, offline marketing should be used, for example, billboard advertisements and meetings at high schools. Below is the list of offline and online marketing activities that will be a part of promoting the new online learning platform:
- Content creation for the blog and social media accounts
- Targeted ads
- Partnership with Youtubers who have learning-oriented channels
- Offline meetings in highschools
- Billboard ads
One Year Calendar
This calendar presented as Table 1 shows the dates and marketing activities plan of execution. At the initial stages, the website, blog, and social media accounts should be filled with content, such as texts, photos, and videos. The blog and website content have to be optimized according to SEO standards, which will allow receiving organic traffic (Papagiannis, 2020). The targeted advertisement should be campaign should be launched in March because, by this time, the social media accounts and blog will have enough content to not appear black and unuseful to potential customers. The initial marketing campaigns will allow to test the platform and attract learners for the term starting in March. This is why billboards and highschool meetings will be important before the March term as they will allow familiarise the students with the learning platform’s brand.
Subsequent activities will focus on attracting learners for the September semester and will include feedback and content with the initial group of learners. Due to the fact that the first group will be a test for the platform, the company should offer a 20% discount, which should also attract users since this platform is new. These students will be asked to participate in the creation of video content, for example, to discuss their experience and to film “study with me” videos with Youtube influencers. Notably, when selecting influencers for partnership, it is best to choose people who have less than 1 million followers, the macro and micro influences (Alassani & Göretz, 2019). These individuals have more trust and typically create content in one niche.
Table 1. Marketing activities calendar (created by the author).
Budget
The budget for the launch and two marketing campaigns targeted towards two semesters, Spring and Ayuterm, will cost the business approximately $27,000. Table 2 is the budget for these marketing activities based on findings from open sources and estimations. The majority of the spending is allocated to the Youtube influencers because the company will be able to build its brand using the trust and engagement of followers that these influencers already have.
Table 2. Online learning platform marketing budget (created by the author).
Summary
In conclusion, this paper addresses the pricing of the new learning platform for Computer Science studies. This platform will apply a premium strategy because it will offer features and study practices that competitors do not have. With this approach, the company will have higher margins, obtaining more short-term profits. Additionally, high margins will allow spending enough on marketing activities and other overhead costs. In total, the marketing budget for a year is $27,000.
References
Alassani R. & Göretz J. (2019) Product placements by micro and macro influencers on Instagram. In G. Meiselwitz (Ed.), Social computing and social media (pp. 15-20). Springer.
Are computer science jobs in demand. (n.d.). Web.
Gallego G. & Topaloglu H. (2019). Online learning. Revenue management and pricing analytics. International Series in Operations Research & Management Science, 279, 275-289. Web.
Papagiannis, N. (2020). Effective SEO and content marketing. Wiley.
Simon, H. & Fassnacht, F. (2019). Price management: strategy, analysis, decision, implementation. Springer.