Higher Education, Product Differentiation, and Toothpaste

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Do you remember when there was just one type of toothpaste? You would walk down the aisle at the store and select from a few major brands and possibly a generic brand or two. Today there are several brands carrying different versions of whitening toothpaste, baking soda toothpaste, toothpaste with scope, different flavors (vanilla, cinnamon, mint, lemon, and many more), toothpaste for kids, toothpaste for adults, tartar control, sensitive teeth toothpaste, gels, striped (mixed gel and paste), and endless combinations of all-of-the-above. Higher Education is clearly offering a much more complex service than toothpaste, but there are some basic principles here that we can still learn from.

The premise is based on market differentiation and specialization. Institutions now have more options than ever to differentiate what they have to offer the student (although it isn't always the student that is the true customer, it could be their employer, a grant underwriter, or the government). Focused Degrees/Certificates and delivery modes (face-to-face, online learning, or blended learning) are the more obvious ways to differentiate, but there are also many variations of these that we've seen in the marketplace. For example, a variation of face-to-face in a blended program could be to fly professors to a different location for the face-to-face portion.

Focused degree types have been around for quite some time, but there has been an increase of these specialized programs in recent years. This is probably the most clear-cut example of how higher education can differentiate their "product." Some recent examples:

• Loyola University Chicago - Recently announced a specialized MBA in Strategic Financial Services
• University of Illinois Springfield - Recently announced a Graduate Certificate in Homeland Security
• Boston University - Online Program for Financial Planners

It took decades for the toothpaste market to splice like it has in the past decade. This typically happens as a result of increased competition. With competition in higher education increasing and coming from so many areas, this is a trend that will likely continue. Institutions may even tap into new funding resources with this strategy. Ultimately though, it always results in benefiting the end-user, which in this case the student should benefit through more choice and specialized programs that can meet their needs better.