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$33.6
$68.2
$154.9
$242.3
$300.0
$25.3$11.0
19991979 1991 1994 1995 20031993 2004 est
99% 97%
47% 45% 43%35%
0%
20%
40%
60%
80%
100%
Brand Awareness
The Education Industry
• $900B – 2nd Largest Segment of US Economy
• Growing at 2x rate of inflation• High Degree of Consumer
dissatisfaction• Resulting in …
Education – Paradigm Shift – 1980From Castor Oil to
Monolithic, Institutionally Controlled, state provided, “free” education
Apartheid Education – Geographically defined education based on a citizen’s ability to pay for housing
Consumers exclusively relied on schools
Education – Paradigm Shift – 2004Cherry Chewable Cough Drops
Educational consumerism & deregulation are driving reform and opportunity
Schools, Non-profits and Businesses must change how, when and where they deliver education
Economics
High School Diploma
103% of Avg Salary
Manufacturing
73% of Avg Salary
Knowledge Based
1970 Today
28704
46800
70148
0
20000
40000
60000
80000
$ D
olla
rs
Annual Salary
High School AA Degree BA/BS MA/MS PHD
Government Policy
• No Child Left Behind – Standards based education
• 1980’s Medicare drove deregulation and reform - 11.5% of total healthcare spending
• The “Special Edification” of classroom instruction
The New Consumer
• Consumers Demand a voice in schools and education
$12B is spent on supplemental education products and services
1 out 6 children has left the traditional public schools - Charters, Private, Virtual Charter, Home Schooling
The New Consumer – Kids are now decision makers
Parents no longer tell kids what they are having for dinner ...They ask what their kids would like.
Kids 7 to 12 spend $8.9B/ year on products
Brands Matter
“I want it all! Tailor it to my kids’ needs! Deliver it online! ”
- How many moms under 40 have tattoos?
- What does POS mean to your 12 year old?
- What form of online music sold more songs than the Apple IPOD last year?
Teens now split their time 60% - TV 40% Internet
LeapFrogToys and Education
0
100
200
300
400
500
600
700
$ Dolla
rs (,0
00,0
00)
Revenues
19992000200120022003
Conclusions
• Education will follow the rest of the economy
• We must respond with programming, services, and products delivered in modalities that resonate with Consumers
• Brand, Marketing, Advertising, Technology, & Packaging will differentiate effective education from “castor oil” education