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Threshold pricing in University continuing education Lamoureux, Marvin Eugene 1975

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THRESHOLD PRICING IN UNIVERSITY CONTINUING EDUCATION by MARVIN EUGENE LAMOUREUX B. Comm. (Economics) University of Montreal (Loyola College), Montreal, Que., 1962 M.Sc. (Marketing) San Jose State University, San Jose, C a l i f . , 1966 M.B.A. (Urban Land Economics) University of C a l i f o r n i a , Berkeley, C a l i f . , 1968 A DISSERTATION SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF EDUCATION i n the Faculty of Education. We accept t h i s d i s s e r t a t i o n as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA SEPTEMBER, 1975 In presenting th i s thes is in pa r t i a l fu l f i lment of the requirements for an advanced degree at the Univers i ty of B r i t i s h Columbia, I agree that the L ibrary sha l l make it f ree ly ava i lab le for reference and study. I further agree that permission for extensive copying of th i s thes is for scho lar ly purposes may be granted by the Head of my Department or by his representat ives. It is understood that copying or pub l i ca t i on of th is thesis for f i nanc ia l gain shal l not be allowed without my writ ten permission. Department of L ; j 4 I, •/ • . / / / j s t i ': -'^/ The Univers i ty of B r i t i s h Columbia 2075 Wesbrook Place Vancouver, Canada V6T 1W5 D a t e '/-V^'- z ^ , / / 7 i i ABSTRACT Three p r i c i n g methods: multi-stage, economic and threshold were reviewed r e l a t i v e to continuing education. Because threshold p r i c i n g ' s scope for course p r i c e development was so broad, i t became t h i s study's purpose to determine i f such a p r i c i n g method could be applied to continuing education. Three studies were conducted using University of B r i t i s h Columbia Continuing Education data. The f i r s t study analyzed 937 courses which either f a i l e d to m a t e r i a l i z e or were conducted. Mean course p r i c e s between both groups were not s i g n i f i c a n t . Course p r i c e and length i n t e r a c t i o n as each affected enrolment were also analyzed. Course length, not p r i c e , s i g n i f i c a n t l y affected enrolment. Centre course prices were therefore "acceptable" to the Centre's p a r t i c i p a n t s . A second study analyzed 119 general and p r o f e s s i o n a l education course p a r t i c i p a n t s to determine threshold p r i c i n g a t t i t u d e s . Although course p r i c e thresholds existed for both groups, i t was evident that each represented a d i s t i n c t market. S i g n i f i c a n t v a r i a t i o n s i n socio-economic variables and p r i c i n g attitudes occurred. A more d e t a i l e d study was then conducted using another 242 p r o f e s s i o n a l education course p a r t i c i p a n t s . Hypotheses based on threshold p r i c i n g theory were tested. S i g n i f i c a n t differences existed between the mean p r i c e of courses and p a r t i c i p a n t determined upper and lower bound p r i c e s . P o s i t i v e and s i g n i f i c a n t correlations occurred f o r selected "wealth" and "continuing education commitment" v a r i a b l e s , as both variables r e l a t e d to these upper and lower bound p r i c e s . P r i c e and imputed q u a l i t y attitudes about Centre courses were evident with only 8.5% of the pa r t i c i p a n t s wanting free courses. i i i C l a s s i f i c a t i o n o f t h e 242 p a r t i c i p a n t s i n t o t h r e e p a r t i c i p a n t -d e t e r m i n e d p r i c e - o r i e n t e d sub-markets ("top d o l l a r " , a v e r a g e , low) was s t a t i s t i c a l l y a c c o m p l i s h e d b u t p r o v e d i n a d e q u a t e f o r m a r k e t i n g d e c i s i o n p u r p o s e s . A l l t h r e e s t u d i e s d e f i n e d b e n e f i c i a l uses f o r b o t h market s e g m e n t a t i o n and t h r e s h o l d p r i c i n g as each r e l a t e s t o c o n t i n u i n g e d u c a t i o n . I t was s u g g e s t e d , however, t h a t f u r t h e r s t u d i e s be c o n d u c t e d t o b r o a d e n t h e scope of t h e s e d e c i s i o n t e c h n i q u e s . iv TABLE OF CONTENTS Page. T i t l e Page i Abstract 1 1 Acknowledgement 1 X Table of Contents i v L i s t of Tables v i i CHAPTER: I. INTRODUCTION 1 Background to the Problem 1 The Problem 3 Purpose 5 The Setting 6 Procedure 7 Plan of the Study 10 II . THEORETICAL BACKGROUND 12 Introduction 12 Economic Theory of Demand 14 Non-Economic Factors Related to Consumer Demand and P r i c e 20 C l a s s i f i c a t i o n of Consumer Products 22 Buyers' Subjective Perception of P r i c e 24 The Role of P r i c e i n the Marketing Process 33 P r i c i n g Goals and Pr i c e Determination 35 V CHAPTER: Page. I I . Multi-Stage Approach to P r i c i n g 41 cont'd. Summary 46 I I I . COURSE PRICES AND PARTICIPANT REACTION 48 Introduction 48 Purpose 48 Exploratory Hypotheses 49 Procedure 50 The P r i c i n g Strategy 51 P r i c i n g Strategy and P a r t i c i p a n t Behaviour 56 Length of Course versus Enrolment 60 Course Fee and Length versus Enrolment: An Interaction 62 Summary 67 IV. THE PILOT STUDY 69 Introduction 69 Purpose 69 Exploratory Hypotheses 70 Procedure 71 The Questionnaire: A Reappraisal 73 Respondents' Socio-Economic Composition 76 Community and Educational P a r t i c i p a t i o n 84 Program, I n s t i t u t i o n a l and Pr i c e Response Patterns 89 Summary - - Q Q v i CHAPTER: Page. V. THRESHOLD PRICING AND MARKET SEGMENTATION 102 Introduction 102 Purpose 102 Research Hypotheses 103 Procedure 106 Respondents' Socio-Economic Composition 107 Program and Institutional Response Patterns 109 Community and Educational Participation 115 Course Price Response . v 116 Price Thresholds and Market Segmentation 126 The Findings 129 Marketing Considerations for Continuing Education Administrators • 143 Summary 148 VI. SUMMARY AND CONCLUSIONS 150 Introduction 150 Summary 150 Conclusions 154 Implications 157 BIBLIOGRAPHY 162 INTERVIEWS 170 APPENDICES 171 v i i LIST OF TABLES TABLE: Page. 1. Fee Structure Variations between Pro f e s s i o n a l and General Courses 53 2. T-test between the P r i c e of "Go" and the Price of "No-go" Courses 59 3. The Relationship between Enrolment and Length of Course . 61 4. Correlation M a t r i x — P r o f e s s i o n a l Courses ... 64 5. C o r r e l a t i o n M a t r i x — G e n e r a l Courses 65 6. Percentage of Individuals i n Each Family Income Category 75 7. Percentage of Individuals i n Each Net Worth Category .... 75 8. Socio-Economic Composition - A H o t e l l i n g - T 2 Analysis .... 77 9. Analysis of P i l o t Study Respondents' M a r i t a l Status 78 10. Analysis of P i l o t Study Respondents' Employability 80 11. Respondents' Place of Residence 81 12. Respondents' Place of Residence 81 13. Income Levels 82 14. Sex Categories 83 15. Level of Organizational and Community P a r t i c i p a t i o n 85 16. Chapin S o c i a l P a r t i c i p a t i o n Scale Results 86 17. H o t e l l i n g - T 2 Analysis of the Chapin S o c i a l P a r t i c i p a t i o n Scale 87 18. H o t e l l i n g - T 2 Analysis of the Continuing Education P a r t i c i p a t i o n Scores 88 19. Program Responses - A H o t e l l i n g - T 2 Analysis 90 20. P a r t i c i p a n t s with Outside F i n a n c i a l Aid 92 v i i i TABLE: Page. 21. Location of F i n a n c i a l Aid 92 22. I n s t i t u t i o n a l Responses - A Hotelling-T2 Analysis 93 23. Reasons For Lack of Search 94 24. Search Procedures 95 25. Awareness Level of P a r t i c i p a n t s 96 26. Course P r i c e Considerations - A H o t e l l i n g - l 2 Analysis ... 97 27. Socio-Economic Composition of P a r t i c i p a n t s 108 28. Respondents' Place of Residence 109 29. Program Responses of Prof e s s i o n a l Course P a r t i c i p a n t s ... 110 30. Shopping Relationships between Behaviour and S e l f -Judgement 112 31. Reasons For Lack of Search 113 32. Pa r t i c i p a n t Attitude Toward Other I n s t i t u t i o n s 114 33. Relationship between Threshold Bound Prices and Part i c i p a n t "Wealth" Factors 119 34. Relationship between Threshold Bound Prices and Pa r t i c i p a n t Commitment to Continuing Education 121 35. Some Negative Relationships Toward Upper Bound Prices ... 123 36. Summary Output f or Three-Group Upper Bound Discriminant Analysis 130 37. Summary Output f or Three-Group Discriminant A n a l y s i s -Lower Bound P r i c e Schedule 132 38. Summary Output for Two-Group Discriminant A n a l y s i s -Upper Bound High Versus Lower Bound High Pric e Segments 134 39. Summary Output f or Two-Group Discriminant A n a l y s i s -Upper Bound Low Versus Lower Bound Low Pr i c e Segments .... 141 ix ACKNOWLEDGMENTS To the d i s s e r t a t i o n committee members who r e a l i z e d and accepted the study's complexity. To Dr. Gary Dickinson, who was instrumental i n the development of the study's format and design. To my fellow students, Nicholas Rubidge and Adrian Blunt, who, being gentlemen, gave s i g n i f i c a n t amounts of the i r time advising both myself and other graduate students about the Computing Centre programs. To a l l the people at the Centre f o r Continuing Education who supplied the information which made t h i s d i s s e r t a t i o n possible. 1 CHAPTER I INTRODUCTION BACKGROUND TO THE PROBLEM Administrators in adult education, unlike their counterparts in elementary or secondary education, are confronted by administrative problems far beyond those classified as "educational". Adult educators usually do not have "captured" markets or clientele which are made available by legal statute. Program offerings, except in specific instances, are not limited by a provincial department of education and institutional existence, in a financial sense, is not totally determined through an automatic government budgeting system. What, in fact, sets public adult education administrators apart from their peers i n elementary or secondary education may be defined within the concept of marginality. Adult education administrators must allow the institution to function on a daily basis and, at the same time, grow to meet expanding community needs, not as a formally recognized educational institution, but as an addendum to a legally statuted institution such as a secondary school system, community college or university. Administrators are therefore placed in a position rather analogous to that of a marketing manager. Both are faced with the problem of pricing products or services which must successfully compete for a portion of the consumer's budget. If either person i s unable to perform the marketing function successfully, the 2 institution does not remain financially flexible. This causes a restriction on the administration to meet operational needs and may lead to a curtailment of future growth. To overcome these marketing problems, the adult education administrator may adopt one of three general program pricing strategies. The f i r s t strategy places the administrator i n a conservative position with respect to his program offerings. He makes "safe" programs available to his potential clientele. These may include government-financed academic or vocational courses as well as popular general interest courses which have been successful in the past. His financial objective in this case would be to price courses so that a break-even point is virtua l l y assured. If there is a greater demand than expected for a specific course and a profit i s made, this unplanned profit could then be used for the development and presentation of programs which have a high probability of financial loss even though they may be definitely needed by a minority within the community. The second pricing strategy demands that the administrator act more like a product marketing manager. In this sense, he researches the needs of his potential clientele and determines their attitudes towards certain prices or price lines for groups of courses. Price determination i s not considered as just covering costs or earning a small profit; i t is developed to earn the highest possible monetary return. The third pricing strategy combines the two strategies as discussed above. Some educational programs are presented because they have proven themselves in the past and the administrator can anticipate the response. 3 In this area he may maximize his returns i f he wishes since he has a good "fee l " for the market demand. Other courses may be new and their potential participation unknown. Pricing strategy in these "non-safe" courses becomes a matter of decision-making related to market research, public relations and guess-work. Regardless of the pricing strategy, an adult education administrator must make correct pricing decisions so that planned financial returns from course fees, as well as pre-determined budgetary requests, allow him to: 1. Offer a wide range of courses which are needed by specific segments of the community, although these segments may not be able to afford such services; 2. Experiment with program offerings which would not normally be considered; 3. Penetrate markets which previously would have been considered too remote; 4. Acquire staff for new program development, and 5. Generally expand the services of the institution. (Lamoureux, 1975) THE PROBLEM Because of the importance of successfully pricing course offerings, adult education administrators should look beyond the decision-making scope embodied in the cost-related break-even attitude and begin to realize that the price of an educational offering i s not just to be defined as a cost factor to the potential consumer. (Leavitt, 1954) The course price 4 may a c t u a l l y be one of many subjective "cues", such as the i n s t i t u t i o n a l name or the type of educational o f f e r i n g , that the consumer uses i n order to formulate a dec i s i o n about the value of an expected purchase. (Andrews and Valenzi, 1971) Secondly, i f the course p r i c e i s derived mainly as a function of i n s t i t u t i o n a l costs such as i n s t r u c t o r wages, overhead, or stationery, then the f i n a l fee may not f a l l into an acceptable p r i c e range for the p o t e n t i a l p a r t i c i p a n t s ; that i s , the p a r t i c i p a n t s may consider the p r i c e either too high r e l a t i v e to the expected value, or too low and question the course's q u a l i t y . The l a t t e r observation has been r e f e r r e d to as the p r i n c i p l e of p r i c e and imputed q u a l i t y . (Scitovsky, 1945) Various consumer behaviour analysts have suggested that buyers have a notion of a f a i r p r i c e (actual or perceived) and that "the eventual purchaser perceives a band of prices above a p a r t i c u l a r p r i c e at which the a r t i c l e i s regarded as too expensive, and below another p r i c e , as con-s t i t u t i n g a r i s k of not giving adequate value. (Stoetzel, p. 71) Therefore, the general problem chosen for i n v e s t i g a t i o n was the existence and a p p l i c a b i l i t y of course p r i c e thresholds or ranges to the de c i s i o n -making framework of program planners and administrators, with s p e c i a l reference to u n i v e r s i t y continuing education programs. A s p e c i f i c research problem was also defined: do p r i c e thresholds a c t u a l l y occur around a "standard" p r i c e f o r continuing education courses? Before responding to the research question, i t was ant i c i p a t e d that an upper p r i c e threshold must e x i s t as suggested by economic theory and common business sense. However, throughout adult education l i t e r a t u r e i t i s generally implied that a zero d o l l a r low p r i c e threshold must be uppermost i n the p a r t i c i p a n t s ' minds. How could the p r i c e and imputed 5 qu a l i t y p r i n c i p l e possibly work? A f t e r a l l , something for nothing i s a very r a t i o n a l purchase d e c i s i o n . (Buchanan and Barksdale, 1975) PURPOSE The o v e r a l l purpose of the study was to define threshold p r i c i n g ' s a p p l i c a b i l i t y f o r continuing education course p r i c e determination by advancing research o r i g i n a l l y developed by Stoetzel (1970), Scitovsky (1945), and L e a v i t t (1954). Within the framework of t h i s broad structure, three s p e c i f i c research studies, each with a sub-purpose hierarchy, were pursued. The culmination of these research studies, as described below, accommodated the o v e r a l l purpose. 1. Course prices and p a r t i c i p a n t behaviour An overview of the course p r i c e d e c i s i o n process of the Centre for Continuing Education at the U n i v e r s i t y of B r i t i s h Columbia, a de s c r i p t i o n of p a r t i c i p a n t reaction to the resultant fee structure, and the examination of a non-price course enrolment factor were examined. The major purpose of t h i s a nalysis was to determine i f the Centre's p r i c i n g strategy generally conformed to standard p r a c t i c e s found i n adult education. I t was also necessary to determine i f the Centre's p r i c i n g strategy led to the development of course p r i c e s that were generally perceived as "acceptable", " f a i r " , or "standard" by the p a r t i c i p a n t s , and to determine i f a s p e c i f i c non-price "cue" s i g n i f i c a n t l y affected course enrolment. 6 2. Centre p a r t i c i p a n t s - a d e s c r i p t i v e analysis This research study's purpose was twofold. I t was necessary to determine i f the threshold p r i c e theory as well as the p r i c e and imputed q u a l i t y p r i n c i p l e existed f or non-service items, i n p a r t i c u l a r , continuing education courses. The products that had been previously analyzed included only non-service items, such as beer, carpets, and men's s u i t s . Secondly, i t was necessary to determine i f general and professional p a r t i c i p a n t s were a s i n g l e market, or constituted two separate markets. This was done to narrow the scope but increase the effectiveness of the t h i r d study. 3. Threshold p r i c i n g and market segmentation Based on the r e s u l t s obtained i n the second study, students attending professionally-designated non-credit courses i n education were in t e n s i v e l y analyzed. The study's general purpose was to determine i f p r i c e thresholds were e f f e c t i v e i n creating definable market segments which may be used for course p r i c e decision-making by continuing education administrators. THE SETTING The Un i v e r s i t y of B r i t i s h Columbia Centre for Continuing Education operates within administrative r e s t r i c t i o n s defined by the concept of marginality. I t s organizational influence within the structure of the University i s l e s s than that of an academic f a c u l t y , although the educational demands placed on the Centre's administrators and program planners normally surpass those of most academic f a c u l t i e s . 7 The Centre i s given a pre-determined operating budget with which i t presents faculty-approved academic c r e d i t courses to students who are completing a Bachelor's degree. At the same time, the Centre's program planners develop a wide range of non-credit educational o f f e r i n g s i n c l u d i n g courses, l e c t u r e s , seminars and panel discussions f o r i n d i v i d u a l s involved i n governmental, educational, and voluntary agencies and for the general p u b l i c . For the most part, these non-credit o f f e r i n g s have no p r e - a l l o t t e d budget and must be priced at l e a s t to pay for t h e i r operating and sundry costs and contribute to the growth of the organization. The program planners are therefore faced with b a s i c a l l y the same p r i c i n g and product-development decisions as private enterprise marketing managers. However, the Centre's administrators are not organized to determine i f t h e i r p r i c i n g philosophy as expressed through t h e i r p r i c i n g strategy and course prices i s acceptable to the p a r t i c i p a n t s . Furthermore, the Centre has yet to study the e f f e c t of course p r i c e changes ( e s p e c i a l l y increases) on t h e i r p a r t i c i p a n t s i n general or- p a r t i c u l a r segments of t h i s apparent heterogeneous market. PROCEDURE The research design may be defined as a combination of an exploratory design and d e s c r i p t i v e design. (Green and T u l l , 1970) I t i s exploratory because the outcome led- to:;a "more precise formulation of problems, including the i d e n t i f i c a t i o n of relevant v a r i a b l e s and the formulation of new hypotheses". (Green and T u l l , 1970, pp. 73-77) I t i s d e s c r i p t i v e 8 because the study was involved in "the description of the extent of association between two or more variables", (Green and T u l l , 1970, pp. 73-77) whereby these associations were, useful for predictive and speculative purposes. As mentioned previously, the research design was composed of three separate studies. The f i r s t study analyzed the price decision process used in the University of British Columbia Centre for Continuing Education to see i f i t fit t e d into the three-part price strategy paradigm described earlier. The study further described participant reaction to the Centre's fee structure i n an a p r i o r i sense, and, within this framework, determined i f a significant interaction occurred between course fees and course length as both affect course enrolments. The second study, referred to as the pilot study, was used to test the major questionnaire in order to determine i f there would be any administrative or analytical problems for the major study. Participant responses to specific questions were analyzed. This pi l o t study led to a redesigned questionnaire, as well as a decision to analyze only professional participants attending non-credit education courses. The third study was conducted within the framework derived from the previous two studies. Participants attending professional non-credit courses responded to the questionnaire. The data derived therefrom were analyzed, hypotheses were tested, and observations were made. A detailed description of the data analysis procedure i s presented in each chapter. However, some general comments about the procedure are presented below. 9 The data from each study were analyzed and hypotheses tested by various s t a t i s t i c a l techniques including: t - t e s t s , p a r t i a l c o r r e l a t i o n c o e f f i c i e n t s , h o t e l l i n g - t t e s t s , cross-tabulations and chi-square t e s t s , and multiple discriminant a n a l y s i s . The l a t t e r was useful f o r t h i s study because i t i s "pri m a r i l y a method of studying r e l a t i o n s h i p s among several groups", and, " i t also can provide a basis for c l a s s i f i c a t i o n of in d i v i d u a l s among several groups", or market segments. (Massey, 1965, p. 39) The dependent v a r i a b l e s used f o r t h i s c l a s s i f i c a t i o n (segmentation) purpose were p a r t i c i p a n t responses to two p r i c i n g questions. One question asked for a p r i c e below which the course's q u a l i t y would be suspect (lower bound p r i c e ) ; the second question asked for a course p r i c e which would be too expensive (upper bound p r i c e ) . ( F o u i l l e , 1970, p. 90) Using multiple discriminant a n a l y s i s , both upper and lower bound pr i c e categories were expressed as trichotomies. (Emry, p. 102) Therefore, both p r i c e categories were divided into three sub-categories: high, average, low, each sub-category being defined as a separate p a r t i c i p a n t market. The forward stepwise discriminant analysis was used to answer the question: "What c h a r a c t e r i s t i c s of an i n d i v i d u a l are associated to the way he responds to the upper bound p r i c e sub-categories and the lower bound p r i c e sub-categories within a s p e c i f i c type of pr o f e s s i o n a l non-c r e d i t program?" Or, i n s l i g h t l y d i f f e r e n t terms: "What c h a r a c t e r i s t i c s of the subjects w i l l discriminate between the members of the three-price sub-categories within both major p r i c e categories f o r a s p e c i f i c type of educational program?" 10 The u t i l i t y of linear discriminant functions as a s t a t i s t i c a l technique in Sociology has been illustrated by Brandow and Potter (1953), in Marketing Research by Green and Tull (1970), and Adult Education by Peterson (1971). In addition to identifying the discriminating independent variables, the forward stepwise discriminant analysis establishes linear discriminant functions with coefficients for each variable which contribute to the index score of each price group. (U.B.C. - BMD07M, 1973) In essence, this study expanded the use of threshold pricing theory into the domain of continuing education by describing the independent variables that affected participant perception of course prices and by determining the effectiveness of multiple discriminant analysis relative to price-based market segmentation development. PLAN OF THE STUDY Following this chapter is a review of the literature. This review covers the theoretical bases which form the underlying assumptions related to economic pricing, psychological pricing and market-place pricing. Chapter III, Course Prices and Participant Reaction, describes the pricing techniques currently used at the University of British Columbia Centre for Continuing Education. Course price strategy and participant reaction to the subsequent prices were analyzed to determine threshold and imputed quality formulations. 11 Chapter IV, The P i l o t Study, tested the proposed questionnaire to determine i f any administrative or a n a l y t i c a l problems could be discovered. A socio-economic, p a r t i c i p a t i o n and a t t i t u d e d e s c r i p t i o n of two major p a r t i c i p a n t segments (general and p r o f e s s i o n a l p a r t i c i p a n t s ) i s presented. From t h i s d e s c r i p t i o n , the p r o f e s s i o n a l segment was used for the major study. Chapter V, Threshold P r i c i n g and Marketing Segmentation, analyzed the professional p a r t i c i p a n t market to determine the administrative a p p l i c a b i l i t y of threshold p r i c i n g techniques and the p r i c e and imputed q u a l i t y p r i n c i p l e . Various sub-markets within the upper and lower bound p r i c e categories are segmented for more d e t a i l e d a n a l y s i s . Chapter VI, Summary and Conclusions, draws the complete study together to i n d i c a t e achievement of purpose and proposals for future areas of study. 12 CHAPTER I I THEORETICAL BACKGROUND INTRODUCTION The amount of adult education l i t e r a t u r e r e l a t e d to the p r i c i n g function i n marketing management i s extremely l i m i t e d . The reasons f o r thi s void may be found i n both marketing and adult education. Authors on marketing have not concerned themselves to the same degree with the marketing of services as the marketing of products. (Rathmell, 1975) Adult educators, on the other hand, have only recently been "expressing a need ... to develop marketing s k i l l s w i t h i n t h e i r own s t a f f or to seek the a i d of pr o f e s s i o n a l marketers i n the management, organization, and dissemination of information about t h e i r programs". (Buchanan and Barksdale, pp. 44-5) At the present time, t h i s l i t e r a t u r e v o i d i s f i l l i n g with some general marketing l i t e r a t u r e . (Kotler, 1975; Rathmell, 1974; Webster, 1974) Adult education has had one major study (Buchanan and Barksdale, 1975) with various regional probes into the subject matter. (Lamoureux, 1975) However, the future use of marketing concepts i n adult education appears to be expanding based on recent comments by authors i n the d i s c i p l i n e ... "they (extension administrators) need to become master craftsmen of marketing techniques i n order to manage e f f e c t i v e l y the transactions they are responsible f o r " . (Buchanan and Barksdale, pp. 44-5) 13 Theoretical Foundations The primary t h e o r e t i c a l foundation has been derived from a f i e l d of study most commonly ref e r r e d to as " p r i c i n g " . Controversy concerning the complex r o l e of p r i c e as a determinant of a purchase d e c i s i o n has led to two definable a l t e r n a t i v e s of ana l y s i s . (Shapiro, p. 14) The f i r s t a l t e r n a t i v e i s based on assumptions found i n economic demand theory, where p r i c e i s assumed to influence buyer choice because p r i c e serves as an indicat o r of purchase cost. That i s , the purchaser of the good or service i s assumed to have perfect information about the range of pr i c e s he faces as w e l l as a want s a t i s f a c t i o n matrix of comparable product or service a l t e r n a t i v e s . S a t i s f a c t i o n maximization f o r a given budget constraint can thus be attained. (Harper, pp. 1-4) The second a l t e r n a t i v e i s based upon consumer behaviour research, i n d i c a t i n g that there i s no simple explanation of how p r i c e influences i n d i v i d u a l buyer's purchase decisions. Consumer behaviour analysts therefore ask the following question: "Does the p r i c e of a product convey only the value to be exchanged (as i n economic theory), or does p r i c e also convey other information that i s used by the consumer?" (Gardner, p. 25) such as product or service quality? Further complications have been noted i f one assumes that p r i c e i s only one of many market ''cues" i n t e r a c t i n g with such factors as product or service c h a r a c t e r i s t i c s , i n s t i t u t i o n a l image, p r i o r purchase experience and promotional images. (Enis and Staffo r d , p. 57) Between these c o n f l i c t i n g p r i c e theories stands the continuing education program planner. He must, as h i s marketing function d i c t a t e s , make a p r i c i n g d e c i s i o n i n v o l v i n g h i s costs to produce the program as w e l l 14 as the p o t e n t i a l e f f e c t on the p a r t i c i p a n t s . ( L e s l i e , pp. 5-9) Whether to develop a p r i c i n g formula that has as i t s underlying philosophy a "cost to the consumer" framework, a competitive strategy framework, (Dean, p. 457) or a combination of both (Oxenfeldt, pp. 463-470) becomes a major administrative task. Plan of the Review The plan of t h i s chapter i s to review the l i t e r a t u r e found i n economic demand theory and consumer behaviour analysis as both r e l a t e to program p r i c i n g . The r o l e of marketing management as i t pertains to the continuing educator's program p r i c i n g function w i l l then be presented i n order to give an administrative framework for eventual p r i c i n g p o l i c i e s . ECONOMIC THEORY OF DEMAND Most economic texts (Samuelson and Scott, ch. 4; Leftwich, ch. 1) and marketing management texts (Stanton and Sommers, ch. 19; Kotler, ch. 14) cover economic demand theory i n rather d e t a i l e d fashion. " T r a d i t i o n a l economic theory", as expressed by Howard (p. 77) "provides an old and rigourous theory of buyer choice ... (which) ... i s cast more i n the framework of a s e l l e r p r e d i c t i n g a buyer's response than i s true of any of the other ( s o c i a l science) d i s c i p l i n e s " . In order to understand how economists generally deal with the complex factors r e l a t i n g to man's purchasing behaviour, one must r e a l i z e a most fundamental assumption i n economics—the p r i n c i p l e of r a t i o n a l i t y . 15 This p r i n c i p l e i s characterized by the following points: (1) complete information, both present and future, about economic conditions are known to the r a t i o n a l man; (2) there are no i n s t i t u t i o n a l or psychological factors which impede action; (3) i n d i v i d u a l a c t i o n has no great influence on the p r i c e structure. (Katona, p. 59) Based on t h i s s i m p l i f i e d a p r i o r i system, economists have attempted to change various assumptions, introduce further complex f a c t o r s and develop more r e a l i s t i c models of consumer behaviour. T h e 6 e v a r i a t i o n s include the introduction of p r i c i n g behaviour by large scale producers such as mono-p o l i s t s (a telephone company) and o l i g o p o l i s t s ( s t e e l producers). Uncertainty about the p r o b a b i l i t y d i s t r i b u t i o n of future events has also caused economists to reformulate the assumption of complete information and foresight. (Luce and R a i f f a , ch. 1) Regardless of economic theory's steps toward market r e a l i t i e s , that part of economic theory r e l a t e d to consumer behaviour and therefore demand for products or services has s t i l l maintained the r a t i o n a l i t y assumptions. (Rogers and Ruchlin, pp. 4-8) These assumptions are manifested i n the form of the demand curve or, as i t i s also c a l l e d , the demand schedule. This schedule i s defined as "the demand for the amount of a p a r t i c u l a r good or service that consumers are w i l l i n g and able to buy at each p r i c e i n a set of possible p r i c e s during a s p e c i f i e d period". (Rogers and Ruchlin, pp. 35-6) The fundamental c h a r a c t e r i s t i c of demand theory i s the inverse r e l a t i o n s h i p between p r i c e and quantity demanded; that i s , as the program fee increases from $6 to $30 the enrolment l e v e l decreases (36 to 6 16 p a r t i c i p a n t s ) , and as the program fee decreases from $30 to $6, the enrolment l e v e l increases (.6 to 36 p a r t i c i p a n t s ) , because "more people substitute i t for other goods". (Samuelson and Scott, p. 58) A graphic representation of the demand schedule i s c a l l e d the demand curve. The inverse r e l a t i o n s h i p between program fee and enrolment l e v e l i s defined by the convex shape of the curve. This property i s given a name: "The law of downward sloping demand"; that i s , "when the p r i c e of a good i s r a i s e d (at the same time that a l l other things are held constant), l e s s of i t w i l l be demanded". (Samuelson and Scott, p. 59) Given the above "law", economic demand theory then derives i t s basic consumer buying behaviour analysis based on various forms of so-called demand e l a s t i c i t y . E l a s t i c i t y of demand i s used to analyze changes i n the quantity demanded given a v a r i a t i o n i n the p r i c e structure. This concept i s devised to in d i c a t e the degree of responsiveness of p a r t i c i p a n t s to changes i n the program fees. " I t depends p r i m a r i l y upon percentage changes and i s independent of the units used to measure (program enrolment) ... and ... (program f e e ) . " (Samuelson and Scott, p. 404) E l a s t i c i t y has a q u a l i t a t i v e d e f i n i t i o n using three a l t e r n a t i v e categories: 1. When a reduction i n program fees r a i s e s enrolment l e v e l so much that t o t a l revenue, or program fee per p a r t i c i p a n t m u l t i p l i e d by the number of p a r t i c i p a n t s , increases, one speaks of e l a s t i c demand; 2. When a reduction i n program fee r e s u l t s i n an exactly compensating increase i n program enrolment so as to leave t o t a l revenue unchanged, one speaks of unitary e l a s t i c i t y ; 17 3. When a reduction i n program fee r e s u l t s i n such a small percentage increase i n program enrolment such that t o t a l revenue a c t u a l l y decreases, one defines t h i s s i t u a t i o n as i n e l a s t i c demand. E l a s t i c i t y of demand has a numerical d e f i n i t i o n and i s calculated by the use of the following formula: e l a s t i c i t y = P e r c e n t a g e change i n enrolment percentage change i n program fee _ change i n enrolment . change i n program fee o r i g i n a l enrolment ' o r i g i n a l program fee The quantitative outcome i s then defined by the following c r i t e r i a : E l a s t i c i t y Value E l a s t i c i t y D escription Less than one I n e l a s t i c One Unitary E l a s t i c i t y Greater than one E l a s t i c As was mentioned previously, measures of e l a s t i c i t y bear a d i r e c t r e l a t i o n to revenue considerations. Total revenue (TR) for any enrolment was defined as the program fee m u l t i p l i e d by the number of p a r t i c i p a n t s for that p a r t i c u l a r l e v e l of fee requirement. Thus, for any given p r i c e change, the following r e l a t i o n s h i p between demand e l a s t i c i t y and t o t a l revenue p r e v a i l s : E l a s t i c i t y Value T o t a l Revenue A f t e r a Program Fee: Increase Decrease I n e l a s t i c Increases Decreases Unitary E l a s t i c i t y No change No change E l a s t i c Decreases Increases 18 By d e f i n i t i o n , an e l a s t i c demand curve (or schedule) implies that the quantity change i s proportionately larger than the p r i c e change. Therefore a p r i c e decrease from $30 to $24 which increases enrolment from 6 to 18 p a r t i c i p a n t s i s so great that the t o t a l revenue (TR) would, for example, increase from $180 to $432. The inverse could also occur; that i s , a p r i c e increase from $24 to $30 could cause a greater percentage decrease i n enrolment (18 to 6) leading to a decrease i n TR—$432 to $180. Unitary e l a s t i c i t y occurs when the program planner notices that a decrease i n a program fee causes no d e f i n i t e change i n h i s TR. A s i m i l a r occurrence appears i f the program planner were to r a i s e the program fee. Although enrolment would drop, the fee increase would o f f s e t any loss and the TR would remain the same. I n e l a s t i c i t y of demand occurs "when a percentage cut i n (the program) p r i c e evokes so small a percentage i n quantity (enrolment) as to make t o t a l revenue f a l l " . (Samuelson and Scott, p. 404) For example, the fee i s reduced from $18 to $12, and the enrolment increases from 24 to 30 pa r t i c i p a n t s . This increased enrolment i s so minimal that TR decreases from $432 to $360. The inverse s i t u a t i o n i s more i n t e r e s t i n g since the pa r t i c i p a n t s , although faced with a higher fee, s t i l l attend the program i n such numbers that the s l i g h t decrease i n enrolment—from 30 to 24 p a r t i c i p a n t s — i s more than o f f s e t by the larger percentage increase i n program fee—$12 to $18. Examples of a l l three consumer behaviour reactions can be found i n continuing education. (Lamoureux, 1973, p. 65) E l a s t i c demand occurs when p o t e n t i a l p a r t i c i p a n t s are able c l e a r l y to define a "good d e a l " offered by the i n s t i t u t i o n . (Scitovsky, p. 480) An example would be the one-day or 19 evening lectures that are o f f e r e d by the Centre. The average enrolments i n these programs are s i g n i f i c a n t l y higher than a l l other programs offered by the Centre. (Lamoureux, 1974, p. 26a) Unitary e l a s t i c i t y could occur f o r any s p e c i f i c type of program. The main point here i s that enrolment i s affected by p r i c e increases or decreases, but i n exactly the same proportion. This would be an i d e a l consumer behaviour r e a c t i o n i f the objective of the i n s t i t u t i o n were to increase enrolment without negatively a f f e c t i n g the budget. Demand e l a s t i c i t y i s the more i n t e r e s t i n g of the three behavioural reactions. Continuing educators can accept the fa c t that decreases i n program fees i d e a l l y should cause an i n f l u x of p a r t i c i p a n t s and increased t o t a l revenue, or, at the very l e a s t , increased enrolment with the same t o t a l revenue but a lower cost per p a r t i c i p a n t to present the program. What happens i n many cases, however, i s that the programs may be very popular i n a general i n t e r e s t sense such as Far East " r e l i g i o u s - t y p e " classes and the opportunity to ask "what the market w i l l bear" becomes evident. This popularity demand i s translated into economic theory as i n e l a s t i c demand because the p o t e n t i a l p a r t i c i p a n t s are w i l l i n g to pay higher program fees rather than not attending. The second type of program where i n e l a s t i c demand occurs i s the professional course. There i s a high and rather immediate p o t e n t i a l f or a monetary return on the part of the p a r t i c i p a n t s . They are therefore reluctant to withdraw from attending s p e c i f i c p r o f e s s i o n a l programs that may allow them to acquire a c e r t i f i c a t e or new l e v e l of p r o f i c i e n c y . In t h i s framework, the program planner should expect that r e l a t i v e l y high program fees w i l l not deter enrolment. 20 The previous observations about consumer behaviour would t h e o r e t i c a l l y lead to the development of demand curves "other things being equal". Thus, to decide on an enrolment demand schedule f o r a s p e c i f i c program or group of programs "we vary the p r i c e of ... (the program) ... and observe what would happen to i t s quantity bought (enrolment) at any one period of time i n which no other f a c t o r s are allowed to change so as to becloud our experiment". (Samuelson and Scott, pp. 64-5) In summary, therefore, t h i s form of ana l y s i s , along with v a r i a t i o n s incorporated i n the demand curve's e l a s t i c i t y f a c t o r s , t r i e s to determine changes i n the quantity demanded (enrolment) based s o l e l y on changes i n p r i c e . NON-ECONOMIC FACTORS RELATED TO CONSUMER DEMAND AND PRICE Although consumer demand analysis based on economic theory s t i l l exerts considerable influence, c r i t i c i s m of the basic postulates and re s u l t s derived therefrom have been voiced by economists, (Scitovsky, 1945; Monroe, 1973; Cooper, 1970) business and marketing analysts, (Bartels, 1962; Harper, 1966) and s o c i a l s c i e n t i s t s interested i n the re l a t i o n s h i p between p r i c e and consumer actions. (Stoetzel, 1970; Olander, 1970; Enis and Sta f f o r d , 1969) H i s t o r i c a l l y , the c o n f l i c t about the r e l a t i o n s h i p between p r i c e and quantity demanded commenced during the same time period that Adam Smith was wr i t i n g h i s th e s i s , Wealth of Nations (1776). Another economist, B e r n o u l l i ( c i r c a 1700's), noted that "... the subjective value of money or i t s ' u t i l i t y ' i s not nec e s s a r i l y the same as i t s monetary worth". 21 (Cooper, 1969, p. 112) This fundamental observation was generally-neglected and disregarded as A l f r e d Marshall (1890, Jevons (1871), Menger (1871) and Walras (1874) "independently and almost simultaneously ... (developed) ... the marginal u t i l i t y theory of value ... (leading to the c l a s s i c a l form) ... of demand analysis c o n s t i t u t i n g the main source of modern microeconomic thought". (Kotler, p. 102) However, within the same time period, Thorstein Veblen (1899), argued that "many purchases were motivated not by i n t r i n s i c needs or s a t i s f a c t i o n , so much as by the search for prestige". (Kotler, p. 108) These attempts to explain man's purchasing behaviour, not "as an economic un i t i n the market ... (but) ... as a consuming u n i t i n the market" (Bartels, p. 19) were being concurrently voiced by both businessmen and marketing academicians. The fragmented c r i t i c i s m against c l a s s i c a l demand theory was f i n a l l y acknowledged by economists when Tibor Scitovsky presented a major paper before the Marshall Society at Cambridge University on March 2, 1945. In t h i s widely acclaimed paper, Scitovsky made reference to a fundamental problem i n the r a t i o n a l i t y assumption by s t a t i n g that because of the wide range of products the shopper i s "no longer an expert shopper", and one must "judge q u a l i t y by indices of q u a l i t y " ; that i s , "the s i z e of the firm, i t s age" ... (and) ... " p r i c e ...". (Scitovsky, pp. 477-8) The above observations have had t h e i r impact i n two major areas of consumer behaviour r e s e a r c h — c l a s s i f i c a t i o n of consumer products and buyers' subjective perception of p r i c e . 22 CLASSIFICATION OF CONSUMER PRODUCTS As f a r as marketing management i s concerned, the reduced influence of p r i c e on consumer behaviour i n favour of a m u l t i p l e "cue" influence CSmith and Broome, pp. 520-8) Andrews and Valenzi, p. 649) has broadened the research r e l a t e d to the c l a s s i f i c a t i o n of consumer products. O r i g i n a l l y developed by Copeland (1924) f t h i s three-way typology of convenience goods, shopping goods and s p e c i a l t y goods, which i s "based on consumer buying habits rather than on consumer products", (Stanton and Sommers, p. 145) has found acceptance i n both business c i r c l e s and by marketing t h e o r i s t s . (Holton, pp. 53-6; Dommermuth and Cundiff, pp. 32-6) Often r e f e r r e d to as "one of the most venerable of marketing concepts" (Kaish, p. 28) i t "has proven u s e f u l i n the analysis of p r i c i n g , promotion and d i s t r i b u t i o n of goods problems". (Kaish, p. 28; Bucklin, p. 50) There are four b a s i c c r i t e r i a used to determine i f a product, or i n the case of continuing education program planners, a service, exhibits the c h a r a c t e r i s t i c s of one of the three c l a s s i f i c a t i o n types: 1. Importance — economically or p s y c h o l o g i c a l l y important purchases are capable of producing anxiety, l e s t a wrong d e c i s i o n i s made; 2. Functional performance differences — i f the goods under consideration have sharply d i f f e r i n g c h a r a c t e r i s t i c s , the consequences of a wrong decision w i l l be great, thus a heavy premium i s placed on accurate pre-decision search behaviour; 3. D i f f i c u l t y i n r e l a t i n g p h y s i c a l product q u a l i t i e s and performance differences — regardless of importance of the purchase and f u n c t i o n a l 23 differences, a consumer's shopping a c t i v i t y w i l l be worthwhile only i f he i s able to determine from the information a v a i l a b l e how the product w i l l perform; 4. Depth of assortments a v a i l a b l e — regardless of the i n d i v i d u a l ' s a b i l i t i e s to perceive and appraise a product's f u n c t i o n a l performance, there i s l i t t l e value i n r e f i n i n g one's image of the i d e a l product i f the market doesn't o f f e r i t . (Kaish, p. 51) Based on these c r i t e r i a , the d e f i n i t i o n s of the three consumer goods c l a s s i f i c a t i o n s , although varying somewhat among marketing t h e o r i s t s , are as follows: (Holton, p. 53; Kaish, p. 31; Dommermuth, and Cundiff, p. 32; Bucklin, p. 50) Convenience goods — "the s i g n i f i c a n t c h a r a c t e r i s t i c s of convenience goods are that the consumer has complete knowledge of the p a r t i c u l a r product (or i t s substitutes) which he wants before going out to buy i t and that i t i s purchased with a minimum of e f f o r t on h i s part"; Shopping goods — "are products for which the consumer usually wishes to compare q u a l i t y , p r i c e , and s t y l e i n several stores before purchasing. A key i d e n t i f y i n g c h a r a c t e r i s t i c , and the one which separates shopping goods from convenience goods, i s that for shopping goods the consumer lacks f u l l knowledge of pertinent product features before embarking upon the shopping t r i p " ; Specialty goods — "have been defined as those with unique c h a r a c t e r i s t i c s and/or brand i d e n t i f i c a t i o n for which a s i g n i f i c a n t group of buyers are h a b i t u a l l y w i l l i n g to make a s p e c i a l purchasing e f f o r t . " (Stanton and Sommers, p. 148) This p a r t i c u l a r goods c l a s s i f i c a t i o n has accepted the economists' theory of demand through the recognition of the convenience goods category. The c l a s s i f i c a t i o n has, however, expanded the unidimensional 24 consumer behaviour framework by taking note, as B e r n o u i l l i , Veblen and Scitovsky have done, that consumers may be confused and ignorant about goods and services, and, at the same time, these very consumers are w i l l i n g to use p r i c e as a "cue" for q u a l i t y . As a r e s u l t of this movement toward p r i c e and imputed q u a l i t y (Lambert, pp. 35-40), consumer behaviour analysts have also noted that consumers appear to develop p r i c e ranges or thresholds ( F o u i l l e , p. 89; Emry, p. 98; Adam, p. 75) when deciding about t h e i r p o t e n t i a l purchases. These research findings bear a close r e l a t i o n s h i p to the shopping and s p e c i a l t y goods categories, more so than the convenience goods category, and lead to the second major area of consumer behaviour research a t t r i b u t e d to Scitovsky's paper. BUYERS' SUBJECTIVE PERCEPTION OF PRICE Research evidence to be reviewed i n t h i s section w i l l be directed toward the question of whether buyers use p r i c e as an i n d i c a t o r of q u a l i t y . Following this introductory format, the review w i l l then be directed to determining "whether c e r t a i n perceptual phenomena r e l a t i n g sensory processes to p h y s i c a l s t i m u l i are analogous to p r i c e perception". (Monroe, 1973, p. 75) We are intere s t e d here i n the l i t e r a t u r e analyzing the existence of the s o - c a l l e d p r i c e thresholds. Price and Imputed Quality As Scitovsky noted, the buyer generally does not have complete information about the q u a l i t y of a l t e r n a t i v e product o f f e r i n g s , yet he 25 forms perceptions from the information a v a i l a b l e , therefore: "the habit of judging q u a l i t y by p r i c e , however, i s not n e c e s s a r i l y i r r a t i o n a l . I t merely implies a b e l i e f that p r i c e i s determined by the competitive i n t e r p l a y of the r a t i o n a l forces of supply and demand ...".(p. 478) 1. Single-cue studies Research into t h i s p r i c e - q u a l i t y phenomenon has followed two patterns. The f i r s t i s generally c a l l e d a "single-cue" study; (Engle, K o l l a t and Blackwell, p. 252) that i s , where only the d i f f e r e n t i a l information a v a i l a b l e to respondents was p r i c e . In one of the f i r s t experimental studies on t h i s r e l a t i o n s h i p , L e a v i t t (pp. 205-10) found that h i s subjects (30 A i r Force o f f i c e r s and 30 male and female graduate students) tended to choose higher priced items when: (1) p r i c e was the only information; (2) the products were perceived to be heterogeneous i n qu a l i t y , and (3) the p r i c e d i f f e r e n c e was large. The products studied were moth fla k e s , cooking sherry, razor blades and f l o o r wax. T u l l , Boring and Gonsior (pp. 186-191) r e p l i c a t e d L e a v i t t ' s study using table s a l t , a s p i r i n , f l o o r wax and l i q u i d shampoo. The same basic p r i c e - q u a l i t y r e l a t i o n s h i p occurred. In an extensive experiment, Shapiro found that for 600 women: (1) p r i c e was generally an i n d i c a t o r of q u a l i t y ; (2) p r i c e could not overcome product preferences; (3) the use of p r i c e to judge q u a l i t y was a generalized a t t i t u d e , and (4) p r i c e r e l i a n c e varied over products, but was more s i g n i f i c a n t i n s i t u a t i o n s of high r i s k , low self-confidence, and absence of other cues. Lambert (1970, p. 68; 1972, pp. 35-37) found that for 200 undergraduates the frequency of choosing high-priced brands 26 was p o s i t i v e l y correlated with perceived v a r i a t i o n s i n product q u a l i t y and perceived a b i l i t y to judge q u a l i t y . D i s t i n g u i s h i n g between the e f f e c t s of p r i c e as an indic a t o r of q u a l i t y on the perception of product attractiveness or on the perception of purchase o f f e r a t t r a c t i v e n e s s , Olander (pp. 50-69) experimentally tested the e f f e c t of p r i c e for household t e x t i l e s on more than 100 young women's perceptions of product a t t r a c t i v e n e s s . When consequences were rela t e d to pairwise choices, s i m i l a r towels were more often preferred when assigned a high p r i c e than when assigned a low p r i c e . The above studies have looked at p r i c e i n i s o l a t i o n and as the sole c r i t e r i o n of q u a l i t y judgements. A frequent c r i t i c i s m of these single-cue studies i s that when p r i c e i s the only information a v a i l a b l e , subjects-naturally associate p r i c e and q u a l i t y . But i n the world of the every-day consumer, there are more than j u s t p r i c e cues. 2. Multi-cue studies To overcome the c r i t i c i s m of the single-cue studies, other p r i c e -q u a l i t y studies have experimentally varied other cues i n a d d i t i o n to p r i c e . This procedure i s the second part of the p r i c e - q u a l i t y pattern and i s referred to as multi-cue studies, multi-cue i n the sense that p r i c e i s considered along with store name, brand name, promotional information. Using home economics students, housewives, carpet buyers and salesmen, Enis and S t a f f o r d (pp. 340-42) discovered that perception of the q u a l i t y of carpeting was d i r e c t l y r e l a t e d to p r i c e . Gardner's f i r s t p r i c e - q u a l i t y study attempted to answer two questions: (1) "does p r i c e a f f e c t estimates of product q u a l i t y for widely d i f f e r e n t types of products?"; (2) "does the p r i c e of a product convey 27 only the value to be exchanged or does p r i c e also convey other information that i s used by the consumer?" (p. 25) His products were s u i t s , s h i r t s and toothpaste, and he used an experimental design with u n i v e r s i t y students as subjects. His r e s u l t s were defined i n three separate statements: (1) " i t must be concluded that p r i c e does not a f f e c t the perception of q u a l i t y i n the same manner for d i f f e r e n t types of products"; (2) " t h i s study indicates that p r i c e c a r r i e s more information than j u s t the value to be exchanged"; (3) "conclusions by L e a v i t t (p. 205) and T u l l , Boring and Gonsior (p. 186) are seen to be v a l i d even though they imply a p r i c e -quality r e l a t i o n s h i p from preference behaviour rather than from actual statements of product q u a l i t y " , (p. 40) Although these studies provide evidence of a p o s i t i v e p r i c e - q u a l i t y r e l a t i o n s h i p , t h e i r r e s u l t s do imply that p r i c e may not be the dominant cue i n q u a l i t y perception. However, the diminished value of the p r i c e cue has not been a generalized f i n d i n g i n other multi-cue studies. Andrews and Valenzi noted that "when cues are drawn from more than one information domain, there i s a greater l i k e l i h o o d for an i n t e r a c t i o n among cues ...". (p. 649) The authors therefore asked 50 female students to rate the q u a l i t y of sweaters and shoes. Quality ratings for each product were obtained f i r s t f o r each cue presented separately (price, store name, brand name), then for a l l 27 v a r i a b l e combinations. The r e s u l t s indicated that the lower the p r i c e , the greater the influence of brand names, but i n combined qu a l i t y judgements, p r i c e was c l e a r l y the dominant cue. 28 3. Summary In summary, the a b i l i t y to determine the s p e c i f i c e f f e c t p r i c e has on buyers' perceptions of q u a l i t y i s complicated by the multitude of research designs and products tested, although Monroe notes the emergence of a "suggestion that brand name i s important and dominates p r i c e for r e l a t i v e l y inexpensive grocery products and beverages. For clo t h i n g , there i s an apparent increasing concern f o r p r i c e . " (1973, p. 73) Shapiro has responded to t h i s point i n a survey a r t i c l e by suggesting that "the important r o l e of p r i c e i n i n d i c a t i n g the q u a l i t y of many products can be explained i n four ways": (pp. 22-34) (1) "ease of measurement" where p r i c e i s used as a v a l i d cue given the maze of products; (2) " e f f o r t and s a t i s f a c t i o n " where high p r i c e and s a t i s f a c t i o n are psychologically r e l a t e d ; (3) "snob appeal" or the Thorstein Veblen theory of goods a c q u i s i t i o n where people l i k e to brag about what they bought and the item's p r i c e ; (4) "perception of r i s k " or the complete p r i c e and imputed a t t i t u d e — " y o u get what you pay f o r " . Thus, one may conclude that: "The evidence c i t e d i n f e r s that, at le a s t over some range of p r i c e s , demand i s greater f o r higher p r i c e s , and the demand curve has a p o s i t i v e slope." (Monroe, 1973, p. 73) Threshold P r i c i n g Scitovsky went a step further than j u s t d e f i n i n g what appeared to be a rather obvious and "not n e c e s s a r i l y i r r a t i o n a l " (p. 478) p r i c e - q u a l i t y r e l a t i o n s h i p . He also dealt with consumers' responsiveness to a 29 stimulus (price) and with p o t e n t i a l thresholds or bounds, "cheap and expensive" (p. 480) based on a " f a i r or normal p r i c e " , (p. 479) Even at t h i s early time i n the development of subjective p r i c e analysis, Scitovsky r e a l i z e d that p r i c e i s a more complex c r i t e r i o n than many a u t h o r i t i e s seem to f e e l . Consumers are often unaware of the exact prices for many products, and i t may be as many authors suggest, that there i s a range of acceptable p r i c e s . As long as p r i c e f a l l s within t h i s zone of i n d i f f e r e n c e , (Emry, p. 100) then p r i c e may not be much of a f a c t o r , although i t can become quite s i g n i f i c a n t when ranges are exceeded. I f t h i s point could be considered reasonable, then i t s s i g n i f i c a n c e for the marketing of continuing education services i s s i g n i f i c a n t . The p r i c e - q u a l i t y factor has been generally accepted for the higher priced goods. Continuing education programs are generally higher p r i c e d than convenience goods; therefore, a p r i c e - q u a l i t y consi-deration could be construed by the program planner. On the other hand, i f the p r i c e threshold concept e x i s t s , then one would have to assume that the program planner should only consider the value of the p r i c e - q u a l i t y r e l a t i o n s h i p s at e i t h e r end of the zone of i n d i f f e r e n c e since i t i s at these two points that the consumer decides either p o s i t i v e l y or negatively about the p r i c e and i t s r e l a t i o n s h i p to the item. (Adam, p. 84) Monroe and Venkatesan have defined threshold or l i m i t as "a point or region on a scale where a response s h i f t s from p o s i t i v e to negative, or negative to p o s i t i v e , as the case may be", (p. 346) Within the structure of p r i c e determination, Stoetzel states that "the eventual purchaser 30 perceives a band of p r i c e s above a p a r t i c u l a r p r i c e at which the a r t i c l e i s regarded as too expensive, and below another p r i c e , as c o n s t i t u t i n g a r i s k of not giving adequate value", (p. 71) As far as the framework within which the consumer develops the p r i c e range, Monroe points out that "the r e a c t i o n to the p r i c e stimulus i s subjective at best since subjects can be assumed to be reacting to that p r i c e r e l a t i v e to an e n t i r e set of purchase d e c i s i o n v a r i a b l e s " . (1971, p. 463) However, the primary research determining various consumer factors which may i d e n t i f y the upper and lower bounds of the p r i c e threshold for a given product, product l i n e , or group of s i m i l a r or competing products has not been pursued beyond r e l a t i n g the bounds estimations to a given p r i c e s t i m u l i . Furthermore, "the hypothesis of a standard p r i c e serving as an adaptation l e v e l for p r i c e judgements has not been d i r e c t l y tested ... (although) ... evidence does support the p l a u s i b i l i t y of t h i s hypothesis". (Monroe, 1973, p. 76) Shapiro (p. 25), continuing with Scitovsky's l i n e of thought about a f a i r or standard p r i c e , suggests that consumers w i l l not be expected to react to small p r i c e changes or p r i c e - q u a l i t y r e l a t i o n s h i p s unless there are perceptible p r i c e changes from the s o - c a l l e d norm. Gabor and Granger (1970, pp. 134-5), because of a p r i o r study of consumer p r i c e knowledge, stated that customers di d not enter the market with a s e r i e s of demand schedules as postulated by economic demand theory. What, i n f a c t , was occurring led them to restate Adam (1970) and Stoetzel's (1970) hypothesis that customers enter the market with two p r i c e l i m i t s , an upper and lower bound. 31 Olander also suggested that a buyer's p r i c e judgement i s influenced by h i s perception of p r e v a i l i n g market p r i c e s and h i s perception of the p r i c e most frequently charged. "I have gathered data ... which i n d i c a t e that the pattern of i n t e r a c t i o n between p r i c e and subjective q u a l i t y of the product i s influenced by the consumer's ideas about the p r i c e range i n the market and by what he thinks i s the price, most frequently charged." (p. 62) Olander was one of the f i r s t authors to r e a l i z e that p r i c e s e n s i t i v i t y based on a given market p r i c e l e v e l or consumer expectation about a p r i c e i s only a sub-analysis needing further expansion. McConnell found evidence that h i s subjects (college students and t h e i r f amilies) used the high p r i c e d brands of beer as a frame of reference for judging low and medium priced brands. "With a p h y s i c a l l y homogeneous product and unknown brand names, subjects perceived the highest priced brand as being a better q u a l i t y product than the other two brands." (October, 1968, p. 442) A maximum p r i c e observation was also derived by F o u i l l e (1970) who asked his subjects the following question: "What i s the p r i c e of the — item you buy?" (p. 96) Their responses correlated strongly with a question on the maximum p r i c e (r = .69), and l e s s strongly with the minimum p r i c e (r = .32). Kamen and Toman i n studying gasoline prices concluded that consumers do have a " f a i r p r i c e concept" (1970) and that consumers have p r i c e thresholds or zones below or above which they w i l l switch or regard the q u a l i t y of an item more than before. Peterson (1970) noted "that for a product about which there i s a lack of information (1) p r i c e would serve as a major determinant of q u a l i t y perception, and (2) the p r i c e perceived 32 qu a l i t y r e l a t i o n s h i p would be non-linear; that i s , there are sets of upper and lower p r i c e l i m i t s . Within these l i m i t s p r i c e may w e l l serve as an indicato r of q u a l i t y , but above and below them r e s p e c t i v e l y , the product w i l l be perceived as being too expensive or of questionable q u a l i t y " , (p. 525) In summary, Emry (1970) has been given c r e d i t for noting some important implications of threshold p r i c e theory: (Monroe, 1973) 1. "A p r i c e judgement i s a judgement of 'value f o r money' where value r e f e r s to use-value of some commodity f o r some person or persons." (p. 100) 2. "Price judgements are r e l a t i v e , not absolute; r e l a t i v e to what i s known of other p r i c e s as w e l l as being r e l a t i v e to the s i g n i f i c a n c e attached to the associated use values." (p. 100) 3. "There appears to be a 'normal' or standard p r i c e f o r each d i s c e r n i b l e q u a l i t y l e v e l i n each commodity c l a s s , and t h i s normal p r i c e tends to act as an anchor f o r judgements of i n d i v i d u a l p r i c e s . " (p. 100) 4. "There appears to be a range of tolerance or region of in d i f f e r e n c e about each such 'standard' and i t s associated q u a l i t y l e v e l . " (p. 100) 5. "The normal p r i c e or standard w i l l tend to be some average of the p r i c e s being charged f o r s i m i l a r commodities; that i s , prices are not judged i n i s o l a t i o n . " (p. 101) 6. "A further e f f e c t of the range i s that a s h i f t i n judgement of what i s a standard p r i c e i s more l i k e l y to occur when the range i s extended than when the range i s r e s t r i c t e d . " (p. 102) 33 7. "Despite the r e l a t i v e continuity of money scales (that i s , d i v i s i b l e to 1/2 pennies) prices w i l l be seen as a set of ordered categories (cheap-fair-dear) rather than as forming a continuum." (p. 102) THE ROLE OF PRICE IN THE MARKETING PROCESS The American Marketing Association has defined marketing as: "The performance of business a c t i v i t i e s that d i r e c t the flow of goods and services from producer to consumer or user." (Stanton and Sommers, 1972, p. 3) More recent l y , t h i s rather narrow d e f i n i t i o n (Kotler, pp. 13-14) has been revised to include the e f f e c t s of a p h i l o s o p h i c a l change occurring i n the f i e l d of marketing and i n marketing management. The ph i l o s o p h i c a l change has been referred to as the "marketing concept": "A managerial philosophy concerned with the mobilization, and co n t r o l of t o t a l corporate e f f o r t for the purpose of helping consumers solve selected problems i n ways compatible with planned enhancement of the p r o f i t p o s i t i o n of the fir m . " (King, p. 85) Thus, most marketing the o r i s t s have broadened the d e f i n i t i o n of marketing to read as follows: "Marketing i s a t o t a l system of i n t e r a c t i n g business a c t i v i t i e s designed to plan, p r i c e , promote and d i s t r i b u t e want-satisfying products and services to present and p o t e n t i a l customers." (Stanton and Sommers, pp. 3-4) 34 Based on t h i s systematic approach to marketing, the r o l e of p r i c e becomes a " c o n t r o l l a b l e v a r i a b l e " (McCarthy, pp. 38-40) i n the marketing system. It i s c o n t r o l l e d i n the sense that for most organizations, whether public or p r i v a t e , the marketing manager has a range or group of a l t e r n a t i v e p r i c e structures within which he may d i s t r i b u t e a good or service. There are, n a t u r a l l y , various constraints which must be considered: government regulations (public u t i l i t i e s ) ; competition ( s t e e l industry); an organization's costs or a l t e r n a t i v e l y , i t s budget l i m i t a t i o n s (continuing education), and the expected return on s a l e s . Given these r e s t r i c t i o n s , marketing authors have placed p r i c e , along with three other equally important v a r i a b l e s , into a four-way c l a s s i f i c a -t i o n c a l l e d the "marketing mix"; that i s , p r i c e , product, place and promotion. (Borden, p. 4) Each of the four v a r i a b l e s must be manipulated by the marketing manager i n order that a s u i t a b l e product or service i s made a v a i l a b l e at a s u i t a b l e l o c a t i o n and time, with adequate promotion and an acceptable p r i c e . Thus, the f i e l d of marketing has advanced from a purely sales o r i e n t a t i o n , with promotional overtones, (Bartels, pp. 60-63) to become a t o t a l systems approach concerning the organization of an i n s t i t u t i o n ' s f a c i l i t i e s with one basic goal i n mind: that of customer s a t i s f a c t i o n . No longer does one simply produce and hope to s e l l the given product. Rather, a concerted e f f o r t towards market research and product planning, combined with the marketing mix v a r i a b l e s , i s used to produce products or services that w i l l have a high p r o b a b i l i t y of being demanded at a l e v e l forecasted by the i n s t i t u t i o n . 35 PRICING GOALS AND PRICE DETERMINATION Inasmuch as p r i c e i s one of four major elements i n the marketing mix and i s i t s e l f the major topic for t h i s research project, one should assume that the other non-price component operations are, c e t e r i s paribus, being pursued. Given t h i s framework, the remaining portion of the chapter w i l l concentrate on r e l a t i n g the p r i c e v a r i a b l e to the o v e r a l l needs of the organization. This i s normally presented as a two-phase operation: determining p r i c i n g goals and developing a procedure for p r i c e determination. (Backman, pp. 250-54; Stanton and Sommers, pp. 394-405) P r i c i n g Goals Stanton and Sommers have noted that "management should decide upon objectives of p r i c i n g before determining the p r i c e i t s e l f " , (p. 397) Their premise i s based upon a comprehensive study of p r i c e p o l i c i e s and methods of p r i c e determination used by twenty large corporations. The study presented f i v e main goals concerning the p r i c i n g function: 1. Achieve target return on investment or on net sales; 2. S t a b i l i z e p r i c e s ; 3. Maintain or improve a target share of the market; 4. Meet or prevent competition; 5. P r i c i n g with product d i f f e r e n t i a t i o n . 36 The f i r s t four goals were c i t e d most often by the corporations. The f i f t h goal, which r e l a t e s more to the marketing concept than the f i r s t four, had started to gain popularity i n some of the major firms which were i n process of reorganizing t h e i r -marketing departments at the time of the survey. 1. Achieve target return on investment or net sales Target return on investment or net sales i s defined as "building a p r i c e structure designed to provide enough return on the c a p i t a l used for s p e c i f i c products, groups of products, or d i v i s i o n s so that sales revenue w i l l y i e l d a pre-determined average return f o r the e n t i r e company". CStanton and Sommers, p. 398) This p r i c i n g goal i s used mainly by large organizations which seek to determine the a d v i s a b i l i t y of investment i n a p a r t i c u l a r f a c i l i t y as compared with a l t e r n a t i v e investment opportunities. (Backman, pp. 265-6) L a n z i l l o t t i noted that t h i s goal was selected when one or both of two conditions were present. F i r s t , the organizations were leaders i n thei r industry, or they sold i n r e l a t i v e l y protected markets. Secondly, the goal was rel a t e d to new products and low unit p r i c e , high-volume, standardized items. 2. S t a b i l i z e d prices In some degree, t h i s goal i s a c o r o l l a r y to that of a target return on investment; that i s , p r i c e s t a b i l i t y i s one approach to a target return. This goal i s often found i n in d u s t r i e s where there are only a few competitors and p r i c e leadership by one organization predominates. Each 37 organization knows what products or services the other has av a i l a b l e , the market i s c l e a r l y definable, wide f l u c t u a t i o n s i n demand have been known to occur, and the market growth, under normal circumstances, could be described as steady or constant. A long-run p r i c i n g goal or p o l i c y i s therefore found most often. The organizations are w i l l i n g to forego maximizing p r o f i t s i n times of prosperity i f they are able to balance the l a t t e r with reasonable p r o f i t s i n less prosperous periods. (Stanton and Sommers, pp. 400-401) 3. Maintain or improve target share of market For some organizations, the major p r i c i n g goal i s to maintain (or increase) a given share of the market. This objective ensures that the marketing department i s focused on the flow of the market and that the organization knows almost immediately i f i t s market p o s i t i o n i s steady, decreasing or increasing. In some respects market share i s a better i n d i c a t i o n of organizational health than target return on investment, e s p e c i a l l y i n times of prosperity and increasing markets. (Stanton and Sommers, p. 401) A firm might be earning what management considers a reasonable return, but what i s reasonable may be based on a market consideration of some years ago. Unless management keeps f u l l y abreast of conditions i n an expanding market, t h i s reasonable p r o f i t may be too small (absolutely); the company may be getting a decreasing share of the market. 4. Meet or prevent competition In one sense when a company seeks simply through t r i a l and error to f i n d a p r i c e at which i t s output can be sold, one may almost say that 38 such a fir m has no p r i c i n g goal. At l e a s t i t has no con t r o l over the goal and the means used to reach i t . (Stanton and Sommers, p. 402) Preventing competition may e x i s t i n the short run but t h i s p r i c i n g goal normally needs c o l l u s i o n among firms w i t h i n an industry. This act i o n , w i t h i n a short period of time, would come w i t h i n Canadian Federal j u r i s d i c t i o n through the Combines Investigation Act. In a monopoly s i t u a t i o n where only one firm e x i s t s and i s , i n e f f e c t , the whole industry ( B r i t i s h Columbia Telephone) l e g i s l a t i o n has usually been passed to prevent misuse of the p r i c i n g function. 5. P r i c i n g through product d i f f e r e n t i a t i o n Organizations which consider the marketing concept as a v i a b l e philosophy towards developing new products or services must consider the development of a continuous product d i f f e r e n t i a t i o n course. The market i s considered a dynamic force that i s always under pressure to change. What was popular one year ago may not be popular today. Lead-times for product introduction are decreasing as fa s t as the markets are being s a t i s f i e d . This i s caused by excessive competition from domestic and foreign producers. (Stewart, pp. 167-174) If product d i f f e r e n t i a t i o n i s an organization's major goal for s u r v i v a l , then each product or service must be given a separate p r i c i n g consideration. The prices must i n t e r r e l a t e with the "image" of the organization as well as the past p r i c e structures used by the firm. 39 Procedure for Pric e Determination "The successful marketing of services to consumers i s r e l a t e d d i r e c t l y to the p r i c i n g practices of service firms. In most cases, consumers may choose between patronizing service establishments or performing services for themselves." (Parker, p. 38) The above statement has been repeated by various marketing authors i n many forms (Stanton and Sommers, p. 546) because Parker's comprehensive study of the service industry noted the c r i t i c a l l y important nature of consumer di s c r e t i o n a r y purchasing behaviour. In the case of most services, including continuing education, the customer may postpone h i s purchase, or even perform the service himself. Only r a r e l y does a p o t e n t i a l buyer of continuing education services face the s i t u a t i o n where he needs a program immediately. Another factor to consider i s that p r i c e v a r i a t i o n s such as markdowns or s p e c i a l deals, t r i a l o f f e r s or "three for the p r i c e of one" are not generally possible. I f there i s a lack of p a r t i c i p a n t s such that a program i s unable to pay for i t s minimum costs, a program planner cannot usually postpone the program for a week, drop the fee or make a v a i l a b l e some s p e c i a l deals and re-advertise the o f f e r i n g . The program i s either cancelled outright or continued as i s but at a f i n a n c i a l l o s s . Marketing authors (Stanton and Sommers, pp. 403-403; Oxenfeldt, 1966, pp. 125-133; James, pp. 521-532; Darden, pp. 29-33) have noted that there are three broad p r i c i n g methods generally i n use by marketing managers: complete p r i c i n g methods, p a r t i a l p r i c i n g methods and p r i c e l i n i n g p r i c i n g , 40 (Oxenfeldt, 1966, pp. 70-71) and "the basic methods of p r i c e determination for services are generally the same as those f or products". (Stanton and Sommers, p. 546) 1. Complete p r i c i n g method There are f i v e d i s t i n c t v a r i a t i o n s to the general method: (a) Cost-plus p r i c i n g — some margin or addi t i o n to a base cost of a service i s added to cover p r o f i t . This margin i s generally figured as a percentage of the cost although i t may be an absolute or constant d o l l a r f i g u r e . The percentage or d o l l a r f i g u r e usually remains over long periods of time. (Kelley, pp. 370-80) (b) F l e x i b l e markup method — i n place of a constant margin, t h i s method c a l l s for markup to be varied on the basis of several possible considerations such as new product introduction, cost variances, given state of demand. (Wentz, pp. 356-69) Cc) T r i a l and error or experimental p r i c i n g — "This method c a l l s for t r y i n g one or more p r i c e s that seem reasonable". (Oxenfeldt, p. 71) The p r i c e that f i n a l l y seems best a f t e r a t r i a l i s then used. ( F i e l d , Douglas and Torpey, pp. 261-8) (d) Research method of p r i c i n g — This "requires an i n v e s t i g a t i o n ... of the v a r i a t i o n s , options, preferences and purchase intentions of p o t e n t i a l consumers i n an e f f o r t to f i n d the p r i c e at which the desired l e v e l of sales would be attained". (Oxenfeldt, p. 71; also see Pratt, pp. 98-136) (e) I n t u i t i v e method of p r i c i n g — t h i s method involves r e l i a n c e on the p r i c e - s e t t e r ' s vague f e e l i n g s and hunches. (Parker, p. 42) 41 2. P a r t i a l p r i c i n g methods There are two p r i c i n g formats found i n t h i s method: (a) P r i c e maintenance, or adhering to the p r i c e that has been charged i n the past. The goal here appears to be s t a b i l i t y where f e a s i b l e . (Samuelson and Scott, pp. 547-48) (b) Pri c e leadership, or following the prices set by other firms. This i s consistent i n i n d u s t r i e s dominated by a few firms, where the products (steel) or services (medical services) are rather homogeneous and costs of production and marketing somewhat standard. (Parker, pp. 41-43) 3. Pric e l i n i n g p r i c i n g This "consists of maintaining a constant p r i c e over long periods of time, while changing the q u a l i t y of the product to r e f l e c t costs". (Oxenfeldt, 1966, p. 71) The determination of p r i c e by t h i s method involves "inverted p r i c i n g , which s t a r t s with a r e t a i l p r i c e goal and works back through d i s t r i b u t o r margins (where used) and s e l l i n g costs to necessary manufacturing costs, and hence to design and s e l e c t i o n of product that w i l l f i t into the product l i n e s t r a t e g i c a l l y " . (Dean, p.. 424) MULTI-STAGE APPROACH TO PRICING Each of the above p r i c i n g methods has been used, described and c r i t i c i z e d since the advent of marketing-oriented l i t e r a t u r e . (Bartels, pp. 47-69) It was not u n t i l the introduction and development of the marketing concept that t h e o r i s t s began to consider more systematized 42 approaches to p r i c i n g . The outcome of t h i s a n alysis has been the presentation of a "multi-stage approach to p r i c i n g " . (Oxenfeldt, 1960, pp. 123-134) F i r s t presented by Oxenfeldt i n an a r t i c l e for the Harvard Business Review, various authors have since adopted t h i s approach to product and service p r i c i n g since "no one procedure (as described above), generally acceptable by a l l companies, has yet been developed for determining base prices ...". (Stanton and Sommers, p. 403) Oxenfeldt's r a t i o n a l e f or the development of a multi-stage p r i c i n g process i s not to develop a one-price, mathematically elegant model into which unlimited and apparently free cost and demand data may be fed. Rather, his objective i s to reduce the p r o b a b i l i t y of a p r i c i n g error considering the modern dynamics of the market, the lack of t r u l y accurate cost and demand data, and the high cost of making a mistake using a p r i c i n g model too steeped i n theory. The s i x stages presented below are those of Oxenfeldt. (1966, pp. 73-76) As mentioned previously, most marketing authors have adopted t h i s mode of presentation as far as the development of a p r i c i n g methodology. I t should be pointed out, however, that each author has h i s own v a r i a t i o n . (Stanton and Sommers, pp. 403-408; Darden, pp. 29-33; Huegy, pp. 295-305) Selection of Market Targets Based on an analysis of the organization's "strengths and weaknesses, ^ a b i l i t i e s , resources, commitments, a s p i r a t i o n s , the p r e d i l e c t i o n s of 43 management, and the c a p a b i l i t i e s of r i v a l (organizations)", (1966, p. 73) the s e l e c t i o n of a p a r t i c u l a r market segment i s considered. The whole process of market segmentation i s considered as a f i r s t p r e r e q u i s i t e for a u s e f u l marketing strategy and a high p r o b a b i l i t y of f i n a n c i a l success. (Rich and J a i n , pp. 431-46) Without some knowledge of one's c a p a b i l i t i e s , a selected market, and expected competition, the development of an e f f e c t i v e marketing mix would be useless. (Smith, pp. 3-8) Selection of Brand ( I n s t i t u t i o n a l ) Image Brand image has been loos e l y defined as representing "a bundle of fe e l i n g s , a t t i t u d e s , and associations toward a brand ( i n our case ' i n s t i t u t i o n a l ' ) name, many of which are vague, emotional, and unconscious", (pxenfeldt, pp. 73-4) The s e l e c t i o n of an i n s t i t u t i o n a l image based on a selected market target i s mainly the r e s u l t of the i n s t i t u t i o n ' s own actions. For continuing educators, i t would represent the type of i n s t r u c t o r s , the l o c a t i o n of programs, the over r i d i n g image of the i n s t i t u t i o n and the p r i c e l e v e l of the program. Each f a c t o r contributes to the p o t e n t i a l p a r t i c i p a n t ' s a t t i t u d e about the q u a l i t y as w e l l as the approachability of the s p e c i f i c i n s t i t u t i o n . Thus, "a brand image exerts i t s greatest e f f e c t on the way customers perceive the product and whether they notice i t at a l l i n the welter of goods offered". (Oxenfeldt, pp. 73-4) 44 Composition of the Marketing Mix Since an i n s t i t u t i o n ' s brand image r e f l e c t s i t s marketing actions, past and present, the composition of the marketing mix and the place of pr i c e i n this structure becomes s i g n i f i c a n t . In integrating a marketing mix, the program planner assigns a r o l e to p r i c e i n the sense that he must decide whether appeals for p a r t i c i p a t i o n w i l l r e s t heavily on p r i c e inducements or on other marketing factors such as breadth and depth of program o f f e r i n g s , image of i n s t r u c t o r s , l o c a t i o n of program presentations. Without long-range consistency i n the development of the marketing mix, brand or i n s t i t u t i o n a l image may become confusing, negative, or without value as a marketing technique. (Borden, pp. 393-397) Selection of S p e c i f i c P r i c e P o l i c y The preceding three stages have assigned a s p e c i f i c r o l e to p r i c e concerning the development and e x p l o i t a t i o n of p a r t i c u l a r market targets. Program planners must now t r a n s l a t e t h i s r o l e into a p o l i c y regarding a product or service l i n e . Choice of a P r i c e Strategy Although i t may be d i f f i c u l t to draw a sharp l i n e between p o l i c y and strategy, i t i s possible and u s e f u l to make a q u a l i t y d i s t i n c t i o n between each. P o l i c i e s are developed as mentioned above, to deal with a wide range 45 of anticipated and foreseeable s i t u a t i o n s that are normally recurrent by nature. However, markets are frequently beset and dominated by s p e c i a l or random s i t u a t i o n s that basic p o l i c y was not designed to meet. For example: (a) the p r o v i n c i a l government may adopt a new p o l i c y toward continuing education; (b) a strong competitor may enter the market; (c) there may be a turnaround ( p o s i t i v e or negative) i n the l o c a l economy, or (d) a new p o l i c y concerning continuing education may appear from the u n i v e r s i t y executive. Therefore, " s p e c i a l s i t u a t i o n s l i k e these o r d i n a r i l y require an adjustment i n p r i c e and the formulation of a strategy to guide management i n s e t t i n g p r i c e during the time that the s p e c i a l s i t u a t i o n occurs". (Oxenfeldt, 1966, p. 132) The strategy or s t r a t e g i e s used should be compatible with the i n s t i t u t i o n ' s given commitments and resources, i t s market targets, i t s i n s t i t u t i o n a l image objectives, i t s convictions about the r e l a t i v e emphasis to attach to various elements i n the marketing mix, and i t s s p e c i f i c p r i c i n g p o l i c i e s . Selection of a S p e c i f i c P r i c e Once the program planner has taken into account h i s marketing targets, brand image, marketing mix, p r i c i n g p o l i c y and strategy, "he can afford to ignore everything but the c a l c u l a t i o n of costs and revenues". (Oxenfeldt, 1966, p. 132) This occurs because he has sharply circumscribed himself i n the s p e c i f i c sums that may be charged. 46 O x e n f e l d t has propounded two p r i m a r y methods o f p r i c e s e t t i n g . "The f i r s t method w o u l d be t o s e t t h e h i g h e s t p r i c e i n t h e a c c e p t a b l e r a n g e and r e d u c e i t i f s a l e s r e s i s t a n c e i s e n c o u n t e r e d . " ( p . 75) S e c o n d l y , a d i f f e r e n t i a l p r i c e i s s e t "whereby t h e f i r m w o u l d b a s e i t s p r i c e on t h e p r i c e s c h a r g e d by s e l e c t e d r i v a l s , p o s s i b l y m a i n t a i n i n g t h e d i f f e r e n t i a l t h a t p r e v a i l e d i n t h e p a s t " . (1966, p. 75) SUMMARY W i t h i n t h e c o n s t r u c t o f modern-day m a r k e t i n g t h o u g h t , p r i c e i s c o n s i d e r e d a more o r l e s s c o n t r o l l a b l e v a r i a b l e . I t i s c o n t r o l l a b l e and i n t e g r a t e d w i t h t h r e e o t h e r v a r i a b l e s : p r o d u c t p l a n n i n g , d i s t r i b u t i o n s y s t ems, and p r o m o t i o n a l programs, i n t o a s y s t e m c a l l e d t h e m a r k e t i n g mix. G i v e n t h e m a r k e t i n g m i x , t h e p r i c i n g p r o c e s s was p r e s e n t e d as a d u a l p r o c e d u r e . F i r s t , t h e d e t e r m i n a t i o n o f t h e p r i c i n g g o a l s and s e c o n d , t h e a c t u a l p r i c e d e t e r m i n a t i o n . F i v e p r i c i n g g o a l s were p r e s e n t e d as c u r r e n t l y d o m i n a t i n g most l a r g e c o r p o r a t i o n s . These i n c l u d e : (a) a c h i e v e t a r g e t r e t u r n on i n v e s t m e n t o r on n e t s a l e s ; (b) s t a b i l i z e p r i c e s ; ( c ) m a i n t a i n o r improve a t a r g e t s h a r e o f t h e m a r k e t ; (d) meet o r p r e v e n t c o m p e t i t i o n , and (e) p r i c i n g w i t h p r o d u c t d i f f e r e n t i a t i o n . The p r o c e d u r e f o r p r i c e d e t e r m i n a t i o n c o n s t i t u t e d t h r e e h i s t o r i c a l l y f u n d a m e n t a l methods: (a) c o m p l e t e p r i c i n g method; (b) p a r t i a l p r i c i n g method, and ( c ) p r i c e l i n i n g p r i c i n g . A new i n n o v a t i o n t o p r i c i n g was 47 d i s c u s s e d . R e f e r r e d t o as t h e " m u l t i - s t a g e a p p r o a c h t o p r i c i n g " , t h i s method had i t s f o r m u l a t i o n w i t h i n t h e growth and a c c e p t a n c e o f t h e m a r k e t i n g c o n c e p t . No l o n g e r was p r i c i n g c o n s i d e r e d t o be a o n e - p r i c e f o r m u l a t e d c o n s i d e r a t i o n ; r a t h e r , a s t e p - b y - s t e p method was t o be used t o r e d u c e t h e p r o b a b i l i t y o f p r i c i n g f a i l u r e and i n c r e a s e t h e awareness o f t h e o t h e r i n t e r r e l a t e d v a r i a b l e s o f t h e m a r k e t i n g mix. 48 CHAPTER III COURSE PRICES AND PARTICIPANT REACTION INTRODUCTION Chapters I and I I developed a conceptual framework for continuing education course p r i c i n g s t r a t e g i e s as w e l l as a t h e o r e t i c a l foundation describing the p o t e n t i a l a p p l i c a b i l i t y of p r i c e thresholds (ranges) to such p r i c i n g s t r a t e g i e s . In t h i s chapter a conventional format i s used to expand these t h e o r e t i c a l considerations by reconstructing the organizational environment within which prices are determined. (Backman, pp. 273-275) This analysis i s presented to give an overview of various technical and administrative constraints r e l a t i v e to a s p e c i f i c p r i c i n g process. Generalized consumer or p a r t i c i p a n t reaction to this organized process may then be observed within a defined p r i c i n g strategy. PURPOSE The study of course p r i c e s and p a r t i c i p a n t r e a c t i o n reported i n t h i s chapter involved four major objectives: 1. To describe the p r i c e decision process i n the U n i v e r s i t y of B r i t i s h Columbia Centre for Continuing Education i n order to determine i f the process can be placed within the three-part p r i c e strategy paradigm presented i n Chapter I; (see pp. 2-3) 49 2. To describe course p a r t i c i p a n t r e a c t i o n to the Centre's fee structure i n order to determine course fee a c c e p t a b i l i t y by the pa r t i c i p a n t s ; 3. To determine i f a s p e c i f i c non-price "cue" (length of course) presented by Verner and Neylan (p. 230) could be a major course enrolment fac t o r ; 4. To determine i f a s i g n i f i c a n t i n t e r a c t i o n occurs between course fee and course length as both may a f f e c t course enrolments. EXPLORATORY HYPOTHESES The hypotheses stated i n th i s chapter should not be considered as research hypotheses i n the s t r i c t sense. (Dickinson and Lamoureux, p. 85) Rather, one "... i s seeking information which w i l l enable him to formulate s p e c i f i c research questions and/or to state (research) hypotheses ...". (Green and T u l l , p. 73) The s p e c i f i c research hypotheses derived from th i s s e r i e s of projects and re l a t e d exploratory hypotheses are stated i n Chapter V. Hypothesis 3.1: The Centre for Continuing Education's p r i c i n g strategy conforms to a generally accepted strategy found wi t h i n the f i e l d of adult education. (Lamoureux, May 1975; Buttedahl, 1974) Hypothesis 3.2: The Centre for Continuing Education's p r i c i n g strategy leads to the development of course prices that are generally perceived as "acceptable", " f a i r " , or "standard" by the p a r t i c i p a n t s . (Verner, 1974) 50 Hypothesis 3.3: The length of a course has a greater e f f e c t on p o t e n t i a l p a r t i c i p a n t attendance at the Centre for Continuing Education than does course p r i c e . (Verner and Neylan, 1966) PROCEDURE Detail s of the Centre's p r i c i n g process, p r i c i n g mechanism, and p r i c i n g strategy were acquired from an interview with Dr. Knute Buttedahl, former Associate Director of the Centre. Based on these extensive discussions, the Centre's p r i c i n g strategy was placed into one of the p r i c i n g paradigm's sub-categories as delineated on pp. 3-4. Perceived a c c e p t a b i l i t y of the course prices offered by the Centre was determined by an analysis of 937 conducted ("go") and cancelled ("no-go") courses. They were offered during a two-year period and were composed of both general and p r o f e s s i o n a l courses. A t - t e s t between the mean p r i c e of successful courses and the mean p r i c e of courses that f a i l e d was conducted to determine i f s i g n i f i c a n t differences existed. I f no differences existed then the given p r i c e structure and strategy would be judged as "acceptable", " f a i r " , or "standard" by the p a r t i c i p a n t s . The i n t e r a c t i v e e f f e c t of course p r i c e and course length on p a r t i c i p a n t enrolment was analyzed using two s p e c i f i c t e s t s . P a r t i a l c o r r e l a t i o n analysis was used to n u l l i f y variance i n a dependent v a r i a b l e and determine the " r e a l " r e l a t i o n s h i p between course fee and enrolment. (Green and T u l l , p. 237) A multiple forward stepwise regression was used to pr e d i c t enrolment for fixed values of course length and course prices. (Bjerning, 1972) 51 THE PRICING STRATEGY The Centre's P r i c i n g Process Every three to f i v e years, program planners and Centre administrators meet to discuss the fee structure. Consideration i s given to changes i n d i r e c t or out-of-pocket costs as w e l l as overhead costs that have occurred since the previous fee structure decisions. Any cost v a r i a t i o n s that are expected to occur i n the foreseeable future are also discussed. Budget v a r i a t i o n s amounting to general additions and deletions or those r e l a t e d to s p e c i f i c content areas are analyzed for t h e i r impact on given program areas or p o t e n t i a l program considerations. For example, there was a substantial budget cut during the summer of 1973. The basic p r i c i n g formula was discussed i n r e l a t i o n to t h i s budget cut, although no d e f i n i t e fee structure changes were made. Feedback from p a r t i c i p a n t s i s given some weight i n the p r i c i n g process. If i t i s discovered that c e r t a i n courses draw a lower but highly interested socio-economic group, consideration i s given to lower than normal fees. Attempts are made to cut expenses for courses i n such cases. On the other hand, i f i t i s observed that a course may draw a p r o f e s s i o n a l group of p a r t i c i p a n t s whose educational expenses are being paid by t h e i r organizations, i t i s conceivable that higher than normal fees would be charged. Competition i n the l o c a l geographical area from other continuing education i n s t i t u t i o n s i s considered. Competitive p u b l i c i t y brochures are 52 s c r u t i n i z e d to determine i f such courses are d i f f e r e n t than, s i m i l a r to or exactly the same as the Centre's. From t h i s a n a l y s i s , fee v a r i a t i o n s among other adult education i n s t i t u t i o n s aid i n determining th e i r p o t e n t i a l e f f e c t on Centre enrolments. The f i n a l factor i n the p r i c e d e c i s i o n process may be defined as a general f e e l i n g or a t t i t u d e toward the o v e r a l l s i t u a t i o n as i t i s and as i t i s expected to be. A combined i n t u i t i v e knowledge of these professional program planners i s used to acquire "gut f e e l i n g s " about s p e c i f i c courses, fees and present fee structure. The above process has l e d to the present p r i c i n g philosophy which may be defined as a "minimum fee a t t i t u d e " ; that i s , the Centre "does not t r y to maximize p r o f i t " . The p r i c i n g philosophy, as accepted by the l a s t general fee structure meeting, has allowed the use of a basic p r i c i n g formula. There are three fundamental objectives to the formula: 1. To provide consistent guidelines for program planners; 2. To provide guidance so that one program area does not undercut (i n a p r i c e sense) another r e l a t e d program area; 3. To minimize negative p a r t i c i p a n t r e a c t i o n through consistency i n course fees. The p r i c i n g formula i s only a guideline and v a r i a t i o n s do and must occur. For example, as a r e s u l t of the 1973 budget cut, program planners have had a tendency to add an extra amount where possible and i n a rather ad hoc fashion. Furthermore, the tendency to r e l a t e the type of courses to the type of p a r t i c i p a n t s ; that i s , general versus p r o f e s s i o n a l programs, las allowed for more s e l e c t i v e p r i c e v a r i a t i o n s not r e l a t e d s o l e l y to zourse costs. 53 The outcome of these v a r i a t i o n s may be seen i n Table 1. General and professional fee schedules were s i g n i f i c a n t l y d i f f e r e n t (p<.005). General courses had a tendency to be priced below a fee of $21.00 (61.2%) rather than above t h i s amount (38.8%). Pr o f e s s i o n a l courses reversed t h i s fee structure with 60.5% of the courses priced above the $21.00 l e v e l , with 39.5% below $21.00. TABLE 1 FEE STRUCTURE VARIATIONS BETWEEN PROFESSIONAL AND GENERAL COURSES Fee Schedule General Courses Pro f e s s i o n a l Less than $6 7.8% 6.7% $ 6 - $ 9 12.1 9.5 $10 - $15 20.6 11.6 $16 - $20 20.7 10.7 $21 - $25 6.1 4.3 $26 - $30 8.1 8.8 $31 - $50 12.8 10.8 $51 or more 11.8 36.6 100.0% 100.0% x2=70.3; d.f.=7, p<.005 397 courses 328 courses Because a po r t i o n of the fee formula r e l a t e d to the number of in s t r u c t o r contact hours i t was suggested that the fee v a r i a t i o n s may be due to variances i n course length, that i s , the longer the courses, as 54 measured by contact hours, the greater the fees. A chi-square test between professional and general courses, as r e l a t e d to course length, indicated no s i g n i f i c a n t d i f f e r e n c e between both groups. Mechanics of Course P r i c e Determination The program planner has s i x basic steps for d e r i v i n g a course fee: 1. Define a need i n the community that may be s a t i s f i e d by some form of education program which could be given through the Centre; 2. Develop an idea about the type of course to be presented; 3. Form some general opinion about the nature of the p o t e n t i a l p a r t i c i p a n t s ; 4. Decide on the length of the course, that i s , the number of contact hours or sessions, date and place of the course, and i n s t r u c t o r ; 5. Prepare a rough budget to see i f the p o t e n t i a l course i s f i n a n c i a l l y f e a s i b l e (see Appendices A and B for copies of the budget forms). (a) Using the Course Information and Budget sheet, the v a r i a b l e and f i x e d costs are determined i n order; (b) Revenue i s estimated by determining the number of p o t e n t i a l p a r t i c i p a n t s , unless some pre-determined arrangement has been made with an i n s t i t u t i o n or organization. If grants or subsidies are a v a i l a b l e these are added into the revenue section; 6. Using a standard fee formula, the course fee i s determined by multiplying the number of contact hours for the course by one of two 55 d o l l a r f i g u r e s — o n e for p r o f e s s i o n a l courses and one for general courses. This d o l l a r f i g u r e i s compared with the expected expenses. I f the standard f i g u r e derived from the fee formula i s equal to or greater than the d o l l a r expenses (less grants, i f any) the course i s a p o t e n t i a l "go". Not a l l course fees f a l l w i t h i n the above range. Some must be priced at a lower l e v e l . This, however, does not mean that a course w i l l be cancelled. If the program planner can give a cr e d i t a b l e r a t i o n a l e for having the course, i t i s generally accepted by the Centre administrators. Summary and Conclusions A three-part p r i c i n g strategy f o r continuing education programs was previously developed. In essence, the program planner could use a backward p r i c i n g system whereby he only considers the r e l a t i o n s h i p between the out-of-pocket (variable) costs, the overhead (fixed) costs and the number of part i c i p a n t s needed to j u s t pay for the course (break-even p o i n t ) . No consideration i s given to course fee v a r i a t i o n s for d i f f e r e n t types of pa r t i c i p a n t s . Secondly, he could act somewhat l i k e a product marketing manager and, af t e r having analyzed the market f o r the course, construct a p r i c i n g schedule which not only a t t r a c t s the p a r t i c i p a n t s , but also earns the highest possible monetary return. F i n a l l y , he could, as most adult educators do, combine the above two st r a t e g i e s . On the one hand, the h i s t o r i c a l use of backward p r i c i n g by continuing education i n s t i t u t i o n s could be adopted as a safety feature; 56 whereas knowledge gained from some form of community-market an a l y s i s could aid the program planner i n developing s e l e c t i v e p r i c e schedules for p o t e n t i a l groups of p a r t i c i p a n t s . He would therefore combine the need to formally present a break-even factor for each course to s a t i s f y a philosophy of "reasonable p r i c e s " and at the same time, attempt to earn an acceptable rate of return. I t i s clear that the Un i v e r s i t y of B r i t i s h Columbia Centre for Continuing Education has organized i t s e l f around the t h i r d p r i c i n g strategy. (Hypothesis 3.1) As discussed above, the Centre works on a backward or break-even technique, but t h i s i s varied according to the type of p a r t i -cipant who may enrol i n the s p e c i f i c course. Thus, course prices are generally higher for the p r o f e s s i o n a l groups and lower for the general pu b l i c . (Table 1) PRICING STRATEGY AND PARTICIPANT BEHAVIOUR Price threshold theory states that upper and lower p r i c e bounds ex i s t around a consumer-determined "acceptable" or " f a i r " p r i c e (whether act u a l or perceived) for a product or service. Given the t h e o r e t i c a l base and analysis of the multitude of courses of f e r e d by the Centre, the following questions were posed: 1. Did the Centre's p r i c i n g strategy lead to course p r i c i n g that could be perceived as " f a i r " or "acceptable" by the pa r t i c i p a n t s ? 2. Could p r i c e , r e l a t i v e to other motivating f a c t o r s , (Boshier, 1967) be considered as generally non-significant when a p a r t i c i p a n t i s attempting to decide about attending a Centre course? (Verner and Neylan, 19-66) 57 The Study Information was obtained on 937 courses that were l i s t e d i n the Centre's various promotional brochures and year-end s t a t i s t i c a l summaries. These courses, in c l u d i n g "go's" and "no-go's", covered a period of two f i s c a l years (or 6 academic terms) between F a l l , 1971 and Summer, 1973. The a v a i l a b l e data included the following information: 1. Year of the course (a) 1971-1972 (b) 1972-1973 2. Term of the course (a) F a l l (b) Spring (c) Summer 3. Type of course (a) General (b) Professional 4. Course method (a) Series (b) Lecture (c) Short course 5. Location of the course presentation (a) University of B r i t i s h Columbia (b) Vancouver (c) Other 6. Number of contact hours 7. Enrolment i n the course 8. Price of the course 9. Course success or f a i l u r e 58 Both successful and unsuccessful courses included data from numbers 1, 2, 3, 4, 5, 8 and 9. Successful courses also included number of contact hours and enrolment i n the course (numbers 6 and 7). The data was transferred to coding forms and keypunched onto IBM data cards. Two s t a t i s t i c a l programs a v a i l a b l e i n the U n i v e r s i t y of B r i t i s h Columbia Computing Centre were u t i l i z e d . MV-TAB was used for cross-tabulations, chi-square tests and presentation of d e s c r i p t i v e information. TRIP was used to determine means, standard deviations, c o r r e l a t i o n s between variables and t - t e s t s . Course Price versus Enrolment Hypothesis 3.2 regarding the r e l a t i o n s h i p between p r i c e strategy and p a r t i c i p a n t perceptions about " f a i r n e s s " was analyzed by means of a t - t e s t on the p r i c e v a r i a b l e . Separate t - t e s t s were conducted f o r the two major non-credit course categories (General and Professional) since the Centre uses two p r i c i n g formulae. Further tests were conducted using three other sub-categories: Year, Term and Location. Table 2 presents t - t e s t (two-tail) data between "go" and "no-go" courses. In eleven out of t h i r t e e n t e s t s , there were no s i g n i f i c a n t d ifferences between the mean p r i c e of successful courses and the mean p r i c e of courses that f a i l e d . Hypothesis 3.2 i s therefore accepted. Based on the Centre's present fee structure, these data appear to ind i c a t e that prices have a secondary e f f e c t on enrolment. This, as p r i c e threshold theory states, occurs because the prices are w i t h i n a given range around 59 an "acceptable" course fee. Factors other than p r i c e appeared to cause various courses to f a i l or to succeed, and p o t e n t i a l p a r t i c i p a n t s may have decided to choose or not to choose a course because of many non-price "cues". TABLE 2 T-TEST BETWEEN THE PRICE OF "GO" AND THE PRICE OF "NO-GO" COURSES Professional Courses Year Term Location TOTAL Test Categories 1971- 72 1972- 73 F a l l Spring U.B.C. Vancouver T-Prob. .280 .173 .794 .038 1 .650 n/a .712 I 2 231 185 173 156 266 416 sig.<.05 Year Term Location rOTAL Test Categories 1971- 72 1972- 73 F a l l Spring U.B.C. Vancouver General Courses T-Prob, .742 .430 .338 .924 .0301 .476 .645 207 314 222 216 338 156 521 sig.<.05 tote: i f T-Prob. i s <.05, i t i s usually concluded that the sample means are s i g n i f i c a n t l y d i f f e r e n t . = number of courses 60 LENGTH OF COURSE VERSUS ENROLMENT Verner and Neylan examined attendance patterns for various kinds of public school adult education courses. Their r e s u l t s c l e a r l y pointed out that course length influences attendance. "Furthermore, no course studied achieved complete attendance at any time ... the data show a mean percentage loss of 30% i n a l l courses". (Verner and Neylan, p. 239) It was of i n t e r e s t to extend the Verner and Neylan study by analyzing the e f f e c t s of course length on in i t i a l . e n r o l m e n t . Inasmuch as the previous study aided program planners concerned with the behavioural c h a r a c t e r i s t i c s of p a r t i c i p a n t s a f t e r they entered a course, i t would also be h e l p f u l to understand the p o t e n t i a l r e l a t i o n s h i p between course length and p a r t i c i p a n t behaviour before the "purchase" of a continuing education course. I f i t i s found that course length causes the same basic negative r e a c t i o n " i n p a r t i c i p a n t behaviour before enrolment as i t has shown to do while p a r t i c i p a n t s are a c t u a l l y enrolled i n courses, then a case could be advanced for short intensive courses over those with a broad scope and lengthy contact hours. \nalys i s An inverse and s i g n i f i c a n t r e l a t i o n s h i p between enrolment and length Df course appears to be generally substantiated. (Table 3) A l l p r o f e s s i o n a l zourse c o r r e l a t i o n s r e l a t i n g length and enrolment l e v e l were negative with light out of eleven s i g n i f i c a n t . Six are s i g n i f i c a n t at the P<.01 l e v e l , and 61 TABLE 3 THE RELATIONSHIP BETWEEN ENROLMENT AND LENGTH OF COURSE Professional Courses Enrolment Categories r3 N 2 P i Year 1971-72 -.26 178 <.01 1972-73 -.19 150 <.05 Term F a l l -.30 126 <.01 Spring -.27 128 <.01 Summer -.06 74 Method Series -.26 151 <.01 Short Lecture n/a n/a Short Course -.09 167 Location U.B.C. -.22 201 <.01 Vancouver -.11 51 Other -.27 76 <.05 TOTAL -.23 328 <.01 General Courses Year 1971-72 -.28 225 <.01 1972-73 .30 163 <.01 Term F a l l -.27 175 <.01 Spring -.28 153 <.01 Summer -.33 60 <.01 Method Series -.21 344 <.01 Short Lecture n/a n/a Short Course -.27 27 Location U.B.C. -.28 248 <.01 Vancouver -.35 122 <.01 Other n/a n/a TOTAL -.28 388 <.01 Where: p<.01 and <.05 = s i g n i f i c a n t d i f f e r e n c e N = number r = c o r r e l a t i o n c o e f f i c i e n t 62 two at the p<.05 l e v e l . The general course c o r r e l a t i o n s follow a s i m i l a r pattern. A l l c o r r e l a t i o n s were negative with nine out of ten s i g n i f i c a n t at the p<.01 l e v e l . Given these outcomes, one must consider that the Verner and Neylan observations are also r e f l e c t e d i n a p o t e n t i a l p a r t i c i p a n t pre-enrolment decision process. (Hypothesis 3.3) COURSE FEE AND LENGTH VERSUS ENROLMENT: AN INTERACTION The previous analyses have inquired into the r e l a t i o n s h i p between two variables that were suspected as being major determinants of course enrolment and acceptance. Summary conclusions would indi c a t e that course length was the predominant v a r i a b l e between the two; however, the tests were conducted separately using two d i s t i n c t s t a t i s t i c a l methods. Two further s t a t i s t i c a l tests were therefore used to determine s i g n i f i c a n t e f f e c t s on course enrolment based on an i n t e r a c t i o n between course fee and length. The Tests The f i r s t test was a p a r t i a l c o r r e l a t i o n a n a l y s i s . Since the data were of an ex post facto nature i n which two s p e c i f i c independent variables (course fee and length) have occurred, p a r t i a l c o r r e l a t i o n analysis was used to n u l l i f y variance -in a dependent v a r i a b l e (course enrolment) that was presumably "caused" by one or more independent v a r i a b l e s which are 63 extraneous to the p a r t i c u l a r r e l a t i o n under consideration. In t h i s study the extraneous independent v a r i a b l e was course length, and th i s v a r i a b l e was controlled i n order to ascertain the " r e a l " r e l a t i o n s h i p between course fees and enrolment. The formula for the c o e f f i c i e n t of p a r t i a l c o r r e l a t i o n i s : (Green and T u l l , p. 237) t"12 ~ r 1 3 r 2 3 r 1 2 . 3 = 0 —===-1 - r f 3 1 - r £ 3 where: r j 2 = p r i c e by number of p a r t i c i p a n t s (enrolment) r13 = p r i c e by length of course r 2 3 = enrolment by length of course The second s t a t i s t i c a l method was a mult i p l e forward stepwise regression a n a l y s i s , that i s , the construction of a l i n e a r estimating equation for p r e d i c t i n g enrolment (Y) for f i x e d values of course length (X^) and course fees (X 2) . Expressed a l g e b r a i c a l l y , the model i s : Y = a + BiXx + g 2X 2 where: a = mean of Y population when X^ and X 2 are zero = change i n Y population mean per unit change i n X} g 2 = change i n Y population mean per un i t change i n X 2 The objective was twofold: (1) to determine i f e i t h e r independent variable occurred i n the equation, which would mean that the s p e c i f i c variable was s i g n i f i c a n t i n i t s e f f e c t upon the dependent v a r i a b l e (course enrolment), and (2) to determine i f the s i g n i f i c a n t independent v a r i a b l e riad a negative or p o s i t i v e e f f e c t upon the dependent v a r i a b l e . 64 The Professional Courses A TRIP computer run was used to determine the c o r r e l a t i o n matrix as shown i n Table 4. The r e l a t i o n s h i p between course fee and course enrolment, c o n t r o l l i n g f o r course length, was negative but not s t a t i s t i c a l l y s i g n i f i c a n t . Therefore, the p r i c i n g formula as presently used f o r profes-s i o n a l courses had no s i g n i f i c a n t negative e f f e c t on course enrolment. A regression analysis also rejected p r i c e as a s i g n i f i c a n t l y contributing independent v a r i a b l e toward course enrolment. The equation derived i s as follows: Y = 60.781(-)1.2238(Xi) where: X1 = length of course and: R 2 = .0519 C s i g n i f i c a n t at p<.05) Variables Contact Hours Enrolment Fee Therefore: r^2 r13 And: r 1 2 . 3 N (number) d.f. P TABLE 4 CORRELATION MATRIX—PROFESSIONAL COURSES Contact Hours 1.0 C-).2246 .6705 = (-).1914 .6705 r 2 3 = (-).2246 (-).0580 326 329 not s i g n i f i c a n t Enrolment 1.0 (-).1914 Fee 1.0 65 Therefore, where both independent va r i a b l e s were allowed to i n t e r a c t with each other to determine the combined e f f e c t on course enrolment, course length CXi) not only predominated over course fee (X2), but course fee had so l i t t l e e f f e c t as to be rejected by the s t a t i s t i c a l procedure. The General Courses A TRIP computer run was used to determine the c o r r e l a t i o n matrix as shown i n Table 5. Once again the r e l a t i o n s h i p between course fee and enrolment was not s t a t i s t i c a l l y s i g n i f i c a n t , so the p r i c i n g formula as presently used for the general i n t e r e s t courses had no o v e r a l l e f f e c t on course enrolment. TABLE 5 CORRELATION MATRIX—GENERAL COURSES Variables Contact Hours Enrolment Fee Therefore: r } 2  r13 r2 3 And: Contact Hours 1.0 C-).2757 .8183 C-).2229 .8183 (-).2757 r12.3 = -0050 N = 395 d.f. = 392 p = not s i g n i f i c a n t Enrolment 1.0 C-).2229 Fee 1.0 66 A regression analysis also rejected p r i c e as a s i g n i f i c a n t l y c ontributing independent v a r i a b l e . The equation derived i s as follows: Y = 74.5064(-)2.1471(X 1) where: X x = length of course and: R 2 = .076 ( s i g n i f i c a n t at p<.05) Again, course length proved to be the only s i g n i f i c a n t independent v a r i a b l e when allowed to i n t e r a c t with course fee i n determining course enrolment. The p a r t i a l c o r r e l a t i o n s t a t i s t i c a l method was also used to test the re l a t i o n s h i p between contact hours and enrolment, but c o n t r o l l i n g the e f f e c t of p r i c e . For both p r o f e s s i o n a l and general courses, the o v e r a l l r e s u l t s obtained i n t h i s chapter coincided. Length of course negatively affected course enrolment, and t h i s e f f e c t , unlike that of course fee, was s i g n i f i c a n t . P r o f e s s i o n a l Courses: R23.1 = C-).1409 where p<.01 General Courses : R23.1 = (-).1784 where p<.01 67 F u r t h e r Comments As w i t h many c o n t i n u i n g e d u c a t i o n i n s t i t u t i o n s , t h e C e n t r e w i l l a d v e r t i s e c o u r s e s w i t h l i m i t e d e n r o l m e n t s . The e f f e c t o f t h e s e c o u r s e s upon t h e p r e v i o u s n e g a t i v e r e l a t i o n s h i p s between e n r o l m e n t and c o u r s e l e n g t h was t h e r e f o r e c o n s i d e r e d . U n f o r t u n a t e l y d a t a was u n a v a i l a b l e t o answer any s p e c i f i c q u e s t i o n s r e l a t e d t o t h e f o l l o w i n g p o i n t s : CI) t h e p e r c e n t a g e o f a l l c o u r s e s w i t h l i m i t e d e n r o l m e n t s ; C2) d i d any c o u r s e s r e a c h t h e s e l i m i t s ; i f y e s , how many, and (3) a l t h o u g h l i m i t s were r e a c h e d , were p a r t i c i p a n t s a c t u a l l y t u r n e d away, e x t r a c o u r s e s o f f e r e d , or some a l t e r n a t i v e r o u t e t a k e n . A d m i n i s t r a t o r s a t t h e C e n t r e were uneasy about a t t e m p t i n g t o answer t h e s e q u e s t i o n s and s u g g e s t e d t h a t i t w o u l d e n t a i l a c o m p l e t e l y new s t u d y on t h e p a r t o f a r e s e a r c h a n a l y s t , and e x t r a a d m i n i s t r a t i v e s t a f f on t h e C e n t r e ' s p a r t t o keep t h e s e r e c o r d s . From an a d m i n i s t r a t i v e v i e w p o i n t , t h e v a l u e o f such knowledge was q u e s t i o n e d . I n summary, i t i s assumed f o r t h i s s t u d y t h a t s u c h c o u r s e s had no s i g n i f i c a n t e f f e c t upon t h e above c o r r e l a t i o n s . SUMMARY The a n a l y s i s o f d a t a i n d i c a t e d t h a t p a r t i c i p a n t s ' b e h a v i o u r toward c o u r s e s was, a t l e a s t f o r t h e C e n t r e o f C o n t i n u i n g E d u c a t i o n , n o t s i g n i f i c a n t l y d i c t a t e d b y c o u r s e f e e s . T - t e s t s between c o u r s e s t h a t f a i l e d t o m a t e r i a l i z e (no-go's) and t h e c o u r s e s t h a t d i d go were u s e d t o p r e s e n t 68 t h i s f i n d i n g . Tests using p a r t i a l c o r r e l a t i o n c o e f f i c i e n t s and multiple forward stepwise regression techniques gave further v a l i d a t i o n to th i s observation. The Centre's p r i c i n g strategy therefore appears to coincide with the Centre's p r i c i n g philosophy (Hypothesis 3.1) and the p r i c i n g attitudes as expressed within the f i e l d of adult education (Hypothesis 3.2). Length of course, as suggested by Verner and Neylan, was used as a basis to study a second r e l a t i o n s h i p : that of length of course versus p a r t i c i p a n t behaviour, or, more s p e c i f i c a l l y , p o t e n t i a l f o r enrolment. Not only did course length negatively a f f e c t p a r t i c i p a n t attendance while the course was i n progress as expressed by Verner and Neylan, the study presented i n t h i s chapter concluded that course length had the same basic negative e f f e c t on p o t e n t i a l p a r t i c i p a n t s when the l a t t e r considered enrolment into a course (Hypothesis 3.3). P a r t i a l c o r r e l a t i o n and multiple regression techniques were used to develop and v a l i d a t e these fin d i n g s . In summary, the course fees as developed through the standardized formula at the Centre for Continuing Education had l i t t l e or no adverse e f f e c t on course enrolment, and, as suggested by threshold theory, the fees did not approach any upper or lower boundary. They were, i n f a c t , within the acceptable range f o r the majority of p a r t i c i p a n t s . 69 CHAPTER IV THE PILOT STUDY INTRODUCTION A questionnaire was developed f o r random d i s t r i b u t i o n to p a r t i c i p a n t s attending the Un i v e r s i t y of B r i t i s h Columbia Centre f o r Continuing Education's 1974 Summer Session. This p i l o t study was deemed necessary because the questionnaire was rather extensive and may have included questions which would have alienated or confused the respondents. PURPOSE There were eight objectives f o r the p i l o t study: 1. To determine i f there would be any d i f f i c u l t y r e l a t e d to the questionnaire d i s t r i b u t i o n ; 2. To determine i f respondents had d i f f i c u l t y understanding how to respond to the questionnaire; 3. To determine the lead time between d i s t r i b u t i o n of the questionnaire and f i n a l analysis of the data; 4. To determine i f the costs r e l a t e d to d i s t r i b u t i o n , a c q u i s i t i o n and analysis of data were beyond the resources of the project; 5. To a n t i c i p a t e where respondents may refuse to cooperate i n answering s p e c i f i c questions (areas of non-response); 70 6. To make preliminary data runs using selected computer programs to a n t i c i p a t e any format problems; 7. To acquire some preliminary knowledge about the nature of part i c i p a n t s attending the Centre; 8. To determine i f both professional and general p a r t i c i p a n t s , or ju s t one of the market segments, should be studied i n the major a n a l y s i s . EXPLORATORY HYPOTHESES As explained previously, the hypotheses f o r the p i l o t study were exploratory i n nature and aided i n the development of research hypotheses for the major study presented i n the next chapter. Hypothesis 4.1: Upper and lower bound p r i c e thresholds e x i s t f o r pa r t i c i p a n t s attending continuing education courses. (Enis and Stafford, 1969) Hypothesis 4.2: The concept of p r i c e and imputed q u a l i t y e x i s t s for continuing education p a r t i c i p a n t s . (McConnell, 1968) Hypothesis 4.3: Continuing education p a r t i c i p a n t s e x h i b i t a generally high propensity toward educational p a r t i c i p a t i o n . ( M i l l e r , 1970) Hypothesis 4.4: Continuing education p a r t i c i p a n t s e x h i b i t a generally high propensity toward community and other types of s o c i a l p a r t i c i p a t i o n . ( M i l l e r , 1970) Hypothesis 4.5: Continuing education 1 p a r t i c i p a n t s perceive themselves as having a good self-image concerning t h e i r a b i l i t y to discriminate among course o f f e r i n g s . (Brown, 1971) 71 Hypothesis 4.6: Continuing education p a r t i c i p a n t s are consistent when judging the value of courses offered by r e l a t e d types of educational i n s t i t u t i o n s . (Brown, 1968) Hypothesis 4.7: Continuing education p a r t i c i p a n t s perceive themselves as devoting a considerable amount of time and e f f o r t i n searching for a l t e r n a t i v e course offerings among various educational i n s t i t u t i o n s . (Dommermuth, 1967) Hypothesis 4.8: P a r t i c i p a n t s ' a t t i t u d e s about continuing education are s i m i l a r to those noted elsewhere. (Adolph and Whaley, 1967) Hypothesis 4.9: General and p r o f e s s i o n a l continuing education p a r t i c i p a n t s have d i f f e r i n g a t t i t u d e s about course p r i c e s and i n r e a l i t y are two d i f f e r e n t market segments. (Stanton and Sommers, 1972) PROCEDURE F i f t e e n courses were randomly chosen from 56 courses a v a i l a b l e during the 19.74 Summer Session. The courses were drawn from two broad categories and included: Professional Category (7 courses) Rocky Mountain F i e l d t r i p Intermediate Science Curriculum Studies Special Education Services i n Sweden Woodcut Printmaking Wall Hanging Workshop Spinning and Dyeing Workshop Cameras i n the Classroom 72 General Category C8 courses] Exploration in Drawing Tapestry Workshop Respiration for Relaxation Prose Writing Workshop An Educational Travel Program Pottery Workshop Antogeine Feedback Training Education-travel Showcase The courses involved both a wide range of content and tuition f e e s — free of charge to $235.00 for general courses, and $30.00 to $60.00 for professional courses. Distribution and Collection Procedure Participants were chosen randomly from each class. The reasons for the study and the specific procedures for f i l l i n g out the questionnaire were explained to the respondents, who took the questionnaire home and returned the completed form within one week. The respondents were also asked to c r i t i c i z e the content and form of specific questions both in writing and orally. The written portion included notes and letters returned with the questionnaire as well as direct responses on the questionnaire. The respondents met with the researcher and discussed problems or points they considered important or confusing. A total of 119 respondents completed and reacted to the questionnaire. Professional courses contributed 49 respondents and general courses 70 respondents. 73 Data Analysis Each questionnaire that contained some form of c r i t i c i s m was analyzed. This procedure allowed for judgements about questionnaire d i s t r i b u t i o n techniques, questionnaire layout and p a r t i c i p a n t confusion, a l i e n a t i o n and reaction to s p e c i f i c questions. The objective was to develop a higher l e v e l of questionnaire acceptance among the p a r t i c i p a n t s . Analysis of the p a r t i c i p a n t s ' socio-economic f a c t o r s , general response patterns and p a r t i c i p a t i o n patterns was conducted using various s t a t i s t i c a l tests a v a i l a b l e through the U n i v e r s i t y of B r i t i s h Columbia Computing Centre programs. The s p e c i f i c analyses included chi-square t e s t s , h o t e l l i n g - t 2 t e s t s , and cross-tabulations for d e s c r i p t i v e presentations. THE QUESTIONNAIRE: A REAPPRAISAL The p i l o t study questionnaire was analyzed to determine problem areas that needed to be corrected for the f i n a l study. Six major changes were made: 1. During the proposal stage, i t was assumed that S t a t i s t i c s Canada would have socio-economic data a v a i l a b l e for the census t r a c t s . The l a t t e r would have been compared with information derived from the study to determine i f the Centre for Continuing Education c l i e n t e l e represented th e i r geographic population bases. Unfortunately, the respondents came from many census t r a c t s and there were too few from each t r a c t . These questions were therefore eliminated. 74 2. Data on family income l e v e l s (referred to as "income" throughout the d i s s e r t a t i o n ) were c o l l e c t e d on an o r d i n a l scale as i t was presumed that asking for s p e c i f i c incomes might be unacceptable. The o r a l discussions with the respondents indicated that t h i s fear was u n j u s t i f i e d . Furthermore, a s t a t i s t i c a l judgement problem arose when too many i n d i v i d u a l s placed themselves into the three highest income categories. These three categories had respective d i f f e r e n c e s of $3,000, $5,000 and i n f i n i t y , which would have l e d to an even more questionable a n a l y s i s . (Table 6) It was therefore decided to ask the respondents f o r t h e i r s p e c i f i c taxable income. 3. It was f e l t that " i n t e r e s t i n g " v a r i a t i o n s might ex i s t between income and net worth. This p r o p o s i t i o n proved unworkable because 80% or more of the respondents ind i c a t e d net worth i n the f i r s t two categories: " l e s s than $50,000, or $50,000 to $100,000". (Table 7) This question was eliminated. 4. The study attempted to place continuing education services into a marketing-based product c l a s s i f i c a t i o n as described on pages 22-24. (See question 14 i n Appendix C.) Unfortunately, these questions caused great conceptual confusion r e s u l t i n g i n a high rate of non-response and were therefore eliminated. 5. A l l 119 subjects responded p o s i t i v e l y to the "Recent Continuing Education P a r t i c i p a n t " question because t h e i r present course was included. Et was decided to ask only for p r i o r p a r t i c i p a t i o n since many subjects >ecame confused and d i d not include t h e i r present course. 75 TABLE 6 PERCENTAGE OF INDIVIDUALS IN EACH FAMILY INCOME CATEGORY Income Levels Less than $ 2,000 $ 2,000 3,999 4,000 - 5,999 6,000 7,999 8,000 9,999 10,000 - 11,999 12,000 - 14,999 15,000 - 19,999 20,000 or greater T o t a l General Professional P a r t i c i p a n t s P a r t i c i p a n t s Combined 7.81% 2.17% 5.45% 7.81 2.17 5.45 9.38 6.52 8.81 6.25 -9- 3.64 10.94 4.35 8.18 14.06 17.39 15.45 9.38 28.26 17.27 14.06 19.57 16.36 20.31 19.57 20.02 100.00% 100.00% 100.00% N = 64 N = 46 N = 110 TABLE 7 PERCENTAGE OF INDIVIDUALS IN EACH NET WORTH CATEGORY Income General Professional Levels Pa r t i c i p a n t s P a r t i c i p a n t s Combined Less than $ 50,000 59.32% 67.50% 62.63% $ 50,000 - 99,999 22.03 20.00 21.21 100,000 - 149,999 6.78 7.50 7.07 150,000 - 199,999 1.69 2.50 2.02 200,000 - 249,999 1.69 . 2.50 2.02 250,000 - 299,999 -e- -e- -Q-300,000 - 349,999 1.69 -e- 1.01 350,000 - 399,999 3.39 -e- 2.02 400,000 or greater 3.39 -G- 2.02 Total 100.00% 100.00% 100.00% N = 59 N = 40 N = 99 76 6. In order to v a l i d a t e responses to p a r t i c i p a t i o n questions, two questions were asked at the beginning of the major questionnaire concerning the respondents' p a r t i c i p a t i o n i n two types of a c t i v i t i e s . If the respondents indicated that they were p a r t i c i p a t i n g i n either community or continuing education a c t i v i t i e s and then refused to respond to the more d e t a i l e d p a r t i c i p a t i o n question, i t was considered as a non-response to the p a r t i c i p a t i o n questions. In summary, the p i l o t study was successful i n a t t a i n i n g i t s administrative objectives. Confusing and misleading questions were improved or eliminated without reducing a n a l y t i c a l content. The questionnaire for the major study benefited by looking l e s s c l u t t e r e d for the respondents and becoming more amenable f o r a n a l y s i s . Lead time between d i s t r i b u t i o n and f i n a l analysis was judged adequate and project costs acceptable. RESPONDENTS' SOCIO-ECONOMIC COMPOSITION Based on r e s u l t s derived from h o t e l l i n g - t 2 tests (Table 8) and c h i -square tests, eight of the ten socio-economic v a r i a b l e s d i f f e r e d s i g n i f i c a n t l y between pr o f e s s i o n a l and general p a r t i c i p a n t s . These variables included: m a r i t a l status, age, years of formal schooling, Dccupational status, employability, distance t r a v e l l e d to the course, Location of residence and income l e v e l s . 77 Professional p a r t i c i p a n t s who attended continuing education courses, when compared with general course p a r t i c i p a n t s , had a greater tendency to be married (64.6% versus 40.0%); were younger (35.3 years versus 38.8 years); had more years of formal education (16.3 years versus 14.6 years); were involved i n positions having a higher occupational status (67.5 points versus 52.2 p o i n t s ) ; were employed more (87.5% employed versus 62.3% employed); t r a v e l l e d a greater distance to get to the courses (26.3 miles versus 8.7 miles); did not come from Vancouver (31.3% versus 77.1%), and had higher income l e v e l s . No s i g n i f i c a n t d i f f e r e n c e occurred for number of dependents and sex of the p a r t i c i p a n t s . TABLE 8 SOCIO-ECONOMIC COMPOSITION A HOTELLING-T2 ANALYSIS Socio-Economic Factors Age Formal Schooling Occupational Status Distance Travelled Number of Dependents General P a r t i c i p a n t s 38.8 years 14.6 years 52.2 points 8.7 miles .4 persons P r o f e s s i o n a l P a r t i c i p a n t s 35.3 years 16.3 years 67.5 points 26.3 miles 1.5 persons Difference Between the Means  3.53 1 - 1.76 1 -15.30 1 -17.53 1 - 1.01 p<.05 ( s i g n i f i c a n t difference) 78 Ma r i t a l Status General p a r t i c i p a n t s were somewhat more evenly d i s t r i b u t e d between the s i n g l e and married categories (41.4% and 40.0%) than were professional students (22.9% and 64.6%). This uneven d i s t r i b u t i o n , when tested by chi-square, denoted a s i g n i f i c a n t d i f f e r e n c e between the two p a r t i c i p a n t groups. (Table 9) TABLE 9 ANALYSIS OF PHOT STUDY RESPONDENTS' MARITAL STATUS General Pa r t i c i p a n t s Professional P a r t i c i p a n t s Combined M a r i t a l Status 41.4% 40.0 18.6 22.9% 64.6 12.5 33.9% 50.0 16.1 Single Married 0ther2 100.0% 100.0% 100.0% N = 70 N = 48 N = 118 ^p^.05 C s i g n i f i c a n t d i f f e r e n c e ) ; d . f . ^ d i v o r c e d , widowed, s e p a r a t e d = 2; X 2 = 6.9 79 Age A h o t e l l i n g - t 2 test between the mean ages of both p a r t i c i p a n t groups indicated that general p a r t i c i p a n t s had a mean age of 38.8 years (s.d. = 17.1 years) and were s i g n i f i c a n t l y older than p r o f e s s i o n a l p a r t i c i p a n t s who had a mean age of 35.3 years (s.d. = 12.8 years). Their respective standard deviations also indicated that the general p a r t i c i p a n t s were drawn from a wider age spectrum. (Table 8) Formal Schooling Professional p a r t i c i p a n t s had a mean of 16.3 years of formal schooling (s.d. = 2.6 years) which was s i g n i f i c a n t l y more than general p a r t i c i p a n t s (X = 14.6 years; s.d. = 3.4 years). Upon re-analysis of the questionnaire i t was discovered that there was a concentration of school teachers taking professional courses. There were also a number of home-makers concentrated i n the general courses. Occupational Status and Employability Using the Blishen Occupational Class Scale i t was determined that professional p a r t i c i p a n t s with a mean of 67.5 points (s.d. = 8.9 points) rated s i g n i f i c a n t l y higher with respect to status of t h e i r occupations than d i d general p a r t i c i p a n t s (X = 52.2 points; s.d. = 14.2 p o i n t s ) . 80 The variance i n the standard deviation between both groups va l i d a t e d th employment concentration found i n the pro f e s s i o n a l category. (Table 8) A generally accepted r e l a t i o n s h i p between occupational status and years of formal schooling also appeared to be va l i d a t e d . (Blishen, 1958) TABLE 10 ANALYSIS OF PILOT STUDY RESPONDENTS' EMPLOYABILITY General Professional P a r t i c i p a n t s P a r t i c i p a n t s Combined Employability Employed 62.3% 87.5% 72.6% Unemployed 37.7 12.5 27.4 100.0% 100.0% 100.0% N = 69 N = 48 N = 117 p<.01 ( s i g n i f i c a n t d i f f e r e n c e ) ; d.f. = 1; X 2 = 7.80 Place of Residence and Distance Travelled General p a r t i c i p a n t s were mostly from Vancouver (Table 11) and consequently t r a v e l l e d l e s s distance to attend courses than p r o f e s s i o n a l p a r t i c i p a n t s . (Table 8) A chi-square test on place of residence revealed a s i g n i f i c a n t d i f f e r e n c e between the two p a r t i c i p a n t groups. (Table 11) Dnly 31.3% of professional p a r t i c i p a n t s l i v e d i n Vancouver, whereas 77.1% Df the general p a r t i c i p a n t s were from Vancouver. 81 TABLE 11 RESPONDENTS' PLACE OF RESIDENCE Place of Residence Vancouver Other Total General P a r t i c i p a n t s 77.1% 22.9 Professional P a r t i c i p a n t s 31.3% 68.7 100.0% ' N = 70 100.0% N = 48 p<.05 ( s i g n i f i c a n t d i f f e r e n c e ) ; d.f. = 1; X 2 = 22.85 Combined 58.5% 41.5 100.0% N = 118 Professional p a r t i c i p a n t s averaged 26.3 miles (s.d. = 30.7 miles) and general p a r t i c i p a n t s averaged 8.7 miles (s.d. = 11.3 m i l e s ) . The standard deviations also r e f l e c t the wide variance i n r e s i d e n t i a l locations r e l a t e d to p r o f e s s i o n a l p a r t i c i p a n t s . The d i s t r i b u t i o n of respondents by place of residence i s shown below. (Table 12) TABLE 12 RESPONDENTS' PLACE OF RESIDENCE Place of General Professional Residence Par t i c i p a n t s P a r t i c i p a n t s Combined Vancouver 77.1% 31.3% 58.5% North Shore 11.4 10.4 11.0 Burnaby 4.3 4.2 4.2 New Westminster -e- 6.3 2.5 Port Coquitlam 4.2 and Coquitlam - 9 - 1.7 Richmond, Delta 1.4 and Surrey 10.4 5.1 Lower Fraser Valley -e- 4.2 1.7 Upper Fraser V a l l e y 2.9 2.1 2.5 Other 2.9 27.1 12.7 Total 100.0% 100.0% 100.0% N = 70 N = 48 N = 118 82 Income Levels When the o r i g i n a l nine income categories (found i n Table 6) were reduced to f i v e , a chi-square test determined that a s i g n i f i c a n t d i f f e r e n c e occurred between the two p a r t i c i p a n t groups. TABLE 13 INCOME LEVELS Income Levels Less than $ 6,000 $ 6,000 - 9,999 10,000 - 14,999 15,000 - 19,999 20,000 or greater Total General P a r t i c i p a n t s 25.00% 17.19 23.44 14.06 20.31 100.00% Professional P a r t i c i p a n t s 10.86% 4.35 45.65 19.57 19.57 100.00% Combined 19.08% 11.82 32.72 16.36 20.02 100.00% N = 64 N = 46 N = 110 p<.05 ( s i g n i f i c a n t d i f f e r e n c e ) ; d.f. = 4; X 2 = 11.05 General p a r t i c i p a n t s were concentrated either i n the two lower income categories (42.19%) or the two upper income categories (34.37%). Professional p a r t i c i p a n t s were concentrated i n the middle income category (45.65%) or the two upper income categories (39.14%). In comparing the variances, the outcome c l e a r l y indicates that p r o f e s s i o n a l p a r t i c i p a n t s earned s i g n i f i c a n t l y greater family incomes than general p a r t i c i p a n t s . 83 Number of Dependents The mean number of dependents declared by the p r o f e s s i o n a l (X = 1 .5 persons; s.d. = 3.5 persons) and general p a r t i c i p a n t s (X = .4 persons; s.d. = .9 persons) was not s i g n i f i c a n t l y d i f f e r e n t . (Table 8) Although there was a s i g n i f i c a n t d i f f e r e n c e between both groups concerning marital status, those p a r t i c i p a n t s who were married, divorced or who merely indicated dependents remained s i m i l a r . A chi-square test between groups of p a r t i c i p a n t s (Table 14) indicated that involvement i n the courses by males and females was s i m i l a r and no s t a t i s t i c a l l y s i g n i f i c a n t differences occurred. Sex TABLE 14 SEX CATEGORIES1 Sex General P a r t i c i p a n t s Professional P a r t i c i p a n t s Combined Male Female 72.5% 27.5 61.4% 38.6 68.1% 31.9 Total 100.0% 100.0% 100.0% N = 69 N = 44 N = 113 !no s i g n i f i c a n t d i f f e r e n c e ; d.f. = 1; X 2 = 1.05 84 Conclusion As stated by Evans (1959) t r a d i t i o n a l market research incorporating "variables such as age, income, race, sex or geographic l o c a t i o n are used to describe markets ..." and "... explain and predict purchase behaviour", (p. 340) Given t h i s d e c i s i o n framework, the r e s u l t s of the analysis of pa r t i c i p a n t socio-economic c h a r a c t e r i s t i c s indicated that the two groups appeared to represent two market segments. Key v a r i a b l e s such as formal schooling, income l e v e l s , age, employability (employed versus not employed), occupational status and m a r i t a l status would seem to confirm Hypothesis 4.9. COMMUNITY AND EDUCATIONAL PARTICIPATION Two major questions r e l a t i n g to p a r t i c i p a t i o n were pursued. One question asked about the respondents' p a r t i c i p a t i o n i n continuing education programs within one year p r i o r to the course they were presently taking. The other question r e f e r r e d to involvement i n organization and community a c t i v i t i e s at the time of the survey. Both questions used a response format based on Chapin's S o c i a l P a r t i c i p a t i o n Scale. ( M i l l e r , 1970, pp. 245-250) The second question (organizational a c t i v i t i e s ) was a d i r e c t copy; the f i r s t question (educational a c t i v i t i e s ) used a modified version. 85 Organizational P a r t i c i p a t i o n TABLE 15 LEVEL OF ORGANIZATIONAL AND COMMUNITY PARTICIPATION1 General P a r t i c i p a n t s Professional Participants Combined 12.1 points (X) 23.3 points (X) 16.8 points (X) 15.5 points (s.d.) 20.5 points (s.d.) 18.5 points (s.d.) N = 65 N = 47 N = 112 1p<.05 ( s i g n i f i c a n t difference) Table 15 has been put into the context of Chapin's research r e s u l t s for a more meaningful i n t e r p r e t a t i o n . (Table 16) The p r o f e s s i o n a l group responded i n the same manner, i f not somewhat higher than was reported by Chapin (23.3 points versus Chapin's 20.0 p o i n t s ) . The general group was i n Chapin's " s k i l l e d " range (12.1 points versus Chapin's 12.0 p o i n t s ) . These scores bear strong a s s o c i a t i o n to the r e s u l t s obtained i n Table 8 where the occupational status between both groups was analyzed. In that case, the p r o f e s s i o n a l group (67.5 points) also varied s i g n i f i c a n t l y from the general group (52.2 p o i n t s ) . 86 TABLE 16 CHAPIN SOCIAL PARTICIPATION SCALE RESULTS Categories Point Score Professional 20 points Managerial and Proprietary 20 points C l e r i c a l 16 points S k i l l e d 12 points Semiskilled 8 points Unskilled 4 points A h o t e l l i n g - t z test was used to determine s i g n i f i c a n t variances between both p a r t i c i p a n t groups for t h i s present study. Sub-categories from within each p a r t i c i p a t i o n scale were used for t h i s t e s t . The t o t a l number of organizations w i t h i n which the respondents p a r t i c i p a t e d , whether l o c a l or n a t i o n a l , was not s i g n i f i c a n t l y d i f f e r e n t between the groups. There were, however, four sub-categories which varied s i g n i f i c a n t l y : (1) frequency of attendance; (2) f i n a n c i a l contributions; (3) committee p a r t i c i p a t i o n , and (4) p a r t i c i p a t i o n as an o f f i c e r i n the organization. In a l l these categories, the p r o f e s sional group surpassed the general group. (Table 17) 87 TABLE 17 HOTELLING-T2 ANALYSIS OF THE CHAPIN SOCIAL PARTICIPATION SCALE Variables Total Organizations Local Organizations National Organizations Attendance Levels F i n a n c i a l Contributions Committee P a r t i c i p a t i o n O ffices Held T o t a l Points General Participants X Score 1.86 1.08 0.79 2.60 5.08 1.49 1.15 12.10 *p<.05 ( s i g n i f i c a n t difference) Educational P a r t i c i p a t i o n P r o f e s s i o n a l P a r t i c i p a n t s X Score 2.87 1.02 1.89 4.81 7.40 4.43 3.72 23.30 Difference Between The Means - 1.01 .06 - 1.11 - 2.21* - 2.33* - 2.95* - 2.57* -11.14* A format s i m i l a r to the Chapin S o c i a l P a r t i c i p a t i o n Scale was used for the an a l y s i s of continuing education p a r t i c i p a t i o n a c t i v i t i e s . The subjects were asked i f the s p e c i f i c courses were general or p r o f e s s i o n a l i n t h e i r o r i e n t a t i o n ; i f they completed and paid for the courses; how many hours they p a r t i c i p a t e d i n continuing education; and i f they formally p a r t i c i p a t e d i n a course's i n s t r u c t i o n or planning. The h o t e l l i n g - t 2 test was used to compare the pro f e s s i o n a l and general groups f o r the various sub-categories of the scale. (Table 18) 88 TABLE 18 H0TELL1NG--T 2 ANALYSIS OF THE CONTINUING EDUCATION PARTICIPATION SCORES General Professional D ifference P a r t i c i p a n t s P a r t i c i p a n t s Between The Variables X Score X Score Means Total Courses 3.26 2.33 .93 General Courses 2.54 0.98 1.56* Professional Courses 0.71 1.37 - .65 Completed Courses 6.17 4.49 1.68* Personally Paid 7.82 5.39 2.44* Instruction Function 0.97 1.20 - .23 Development Function 0.79 1.20 - .42 Hours i n Attendance 81.39 126.40 -45.00* Total Points 17.45 14.78 2.71* *p<.05 ( s i g n i f i c a n t difference) No s i g n i f i c a n t d i f f e r e n c e s occurred i n the mean number of courses attended and eit h e r group's p a r t i c i p a t i o n i n the i n s t r u c t i o n and development functions. The general group had a greater tendency to complete the courses and pay for t u i t i o n themselves. The completion factor appears to r e l a t e to the length of the pr o f e s s i o n a l courses i n that each p r o f e s s i o n a l p a r t i c i p a n t attended an average of 126.4 hours per course whereas each general p a r t i c i p a n t attended an average of 81.4 hours per course. 89 Summary Professional p a r t i c i p a n t s devoted s i g n i f i c a n t l y more e f f o r t to s o c i a l p a r t i c i p a t i o n than d i d general p a r t i c i p a n t s (23.20 points versus 12.10 poi n t s ) . The reverse occurred for educational p a r t i c i p a t i o n . The professional p a r t i c i p a n t s ' mean score of 14.78 points was s i g n i f i c a n t l y less than the general p a r t i c i p a n t score of 17.45 points. PROGRAM, INSTITUTIONAL AND PRICE RESPONSE PATTERNS Respondents were asked to i n d i c a t e t h e i r attitudes about the following: (1) the course they were attending; (2) comparable courses i n other educational i n s t i t u t i o n s ; (3) course p r i c e ; (4) consumer search and awareness; (5) use of outside f i n a n c i a l a i d ; (6) reasons f o r attending Centre courses; (7) t h e i r need (economic or personal) f o r attending Centre courses, and (8) t h e i r a b i l i t y to judge among competing courses. This combination of p a r t i c i p a t i o n data and marketing research information was deemed necessary to determine factors which may influence consumer attitudes about the course p r i c e structure of the Centre. Table 19 summarizes the p a r t i c i p a n t s ' program responses. Score v a r i a t i o n s between both groups for a l l f i v e f a c t ors were s t a t i s t i c a l l y n o n - s i g n i f i c a n t . Both p a r t i c i p a n t groups appraised themselves as: devoting a reasonable amount of time to planning t h e i r course purchase; s a t i s f y i n g personal rather than economic needs, and having a f a i r to good a b i l i t y when pre-judging a course's c h a r a c t e r i s t i c s or competition. 90 TABLE 19 PROGRAM RESPONSES A HOTELLING-T2 ANALYSIS Difference General Professional Between The Factors P a r t i c i p a n t s P a r t i c i p a n t s Means-*-Index Score 2 Index Score 2 Planning E f f o r t 5.17 points 4.66 points .51 Personal Need S a t i s f a c t i o n 6.30 points 6.55 points -.26 Economic Need S a t i s f a c t i o n 2.05 points 2.00 points .05 Pre-Judgement A b i l i t y 6.57 points 6.57 points .00 A b i l i t y to Judge a Competing Course 6.12 points 6.38 points -.26 iNone of the f a c t o r s showed s i g n i f i c a n t mean differences between p a r t i c i p a n t groups. 2Scores had a range of 0-9 (lowest to highest). Program Responses The amount of e f f o r t that p a r t i c i p a n t s devoted to planning t h e i r course "purchase" remained consistent between both groups and was defined by the p a r t i c i p a n t s as "the usual amount" (5 points on the index score). This may be interpreted through the goods c l a s s i f i c a t i o n concept (Stanton and Sommers, 1973) where consumers perceive the purchase as either shopping or s p e c i a l t y . In either case the amount of purchase pre-planning i s neither t r i v i a l nor extraordinary. 91 Both groups decided that the courses s a t i s f i e d a personal rather than an economic need. With 3.0 s i g n i f y i n g a "below average" index score i t was rather s u r p r i s i n g that professional p a r t i c i p a n t s did not define t h e i r courses as s a t i s f y i n g an economic (2.00) rather than a personal need (6.55). The p a r t i c i p a n t s f e l t that t h e i r a b i l i t y to pre-judge a course's c h a r a c t e r i s t i c s was rather good. In other words, they personally did not f e e l uneasy about a p o t e n t i a l course before entering i t and were confident about t h e i r own decision-making procedure as i t r e l a t e d to course content, objectives, and q u a l i t y . Both groups had i d e n t i c a l index scores of 6.57 where 7.0 meant "good". The same judgemental outcomes occurred when the p a r t i c i p a n t s were asked to rate t h e i r a b i l i t y to judge the di f f e r e n c e between s i m i l a r types of continuing education courses offered at d i f f e r e n t l o c a l educational i n s t i t u t i o n s . C l e a r l y , the Centre p a r t i c i p a n t s perceived themselves as rather good consumer shoppers when deciding upon a continuing education course and a s p e c i f i c i n s t i t u t i o n . Hypotheses 4.5 and 4.6 are therefore accepted. F i n a n c i a l Assistance The p r o f e s s i o n a l p a r t i c i p a n t s had a greater propensity to have t h e i r fees paid by others (23.4% versus 12.1% - Table 20). Who a c t u a l l y paid for the program fees was asked as an open-ended response question. The responses were c l a s s i f i e d into three major categories. (Table 21) 92 TABLE 20 PARTICIPANTS WITH OUTSIDE FINANCIAL AID Yes No General P a r t i c i p a n t s 12.1% 87.9 Total 100.0% N = 66 p<.01; d.f. = 1; X 2 = 6.64 Professional Participants 23.4% 76.6 100.0% N = 47 Combined 16.8% 83.2 100.0% N - 113 TABLE 21 LOCATION OF FINANCIAL AID School D i s t r i c t Relatives Local Association Total General P a r t i c i p a n t s 13.0% 87.0 -9-100.0% N = 7 Professional Participants 90.0% -9-10.0 100.0% N = 10 Combined 58.7% 35.3 6.0 100.0% N = 17 It i s evident that those p a r t i c i p a n t s who had t h e i r fees paid were either school teachers or dependents. Ninety per cent of the p r o f e s s i o n a l group who obtained fee payments received them from t h e i r school d i s t r i c t . The general group obtained t h e i r fee payments from r e l a t i v e s (87.0%) or a school d i s t r i c t (13.0%). 93 I n s t i t u t i o n a l Responses Participants were asked to rate other types of i n s t i t u t i o n s r e l a t i v e to s i m i l a r course o f f e r i n g s as against the U n i v e r s i t y of B r i t i s h Columbia Centre for Continuing Education equivalent. (Table 22) The reason for t h e i r non-search a t t i t u d e was asked within the structure of the same question by an open-ended technique. Nine d i s t i n c t response categories were i d e n t i f i e d from 92 responses. (Table 23) TABLE 22 INSTITUTIONAL RESPONSES A HOTELLING—T2 ANALYSIS I n s t i t u t i o n a l Ty^e General P a r t i c i p a n t s Professional Participants Difference Between The Means 1 Index Score 2 Index Score 2 Community Colleges High Schools Community Centres Private Schools 4.88 points 3.99 points 3.82 points 4.73 points 4.87 points 4.15 points 4.09 points 5.00 points .01 -.17 -.27 -.27 None of the factors showed s i g n i f i c a n t mean differences between pa r t i c i p a n t groups. 2Where: 4.00-6.99 points = "no d i f f e r e n c e " 1.00-3.99 points = " s i g n i f i c a n t l y worse" (term used i n questionnaire) Over 20% of the general and 28% of the p r o f e s s i o n a l p a r t i c i p a n t s "assumed no other i n s t i t u t i o n s offered the courses". Added to the l a t t e r response, the f e e l i n g that "the University of B r i t i s h Columbia's o f f e r i n g 94 was much superior" increased the two percentages to over 37% for general p a r t i c i p a n t s and 35% for pro f e s s i o n a l p a r t i c i p a n t s . D i r e c t a d v e r t i s i n g and promotion appeared to have l i t t l e e f f e c t , although the U n i v e r s i t y of B r i t i s h Columbia's image may be considered as part of the o v e r a l l promotional presentation. (Stanton and Sommers, pp. 1-35) Both groups had s i m i l a r attitudes about a l l four i n s t i t u t i o n s . They agreed that community colleges and pr i v a t e profit-making i n s t i t u t i o n s could o f f e r s i m i l a r courses, although some differences might be expected. The high schools and community centres fared somewhat poorly and bordered on the lower end of the "no d i f f e r e n c e " zone and toward the " s i g n i f i c a n t l y worse" zone. TABLE 23 REASONS FOR LACK OF SEARCH General Pro f e s s i o n a l Reasons Pa r t i c i p a n t s P a r t i c i p a n t s Combined Assumed no other i n s t i t u t i o n s 20.8% 28.2% 23.9% offered course No time 7.6 -9- 4.4 Previous experience made me 17.0 7.7 13.0 f e e l U.B.C. was superior Because of the i n s t r u c t o r 15.1 15.4 15.2 Location of U.B.C. 13.3 7.7 9.8 No p a r t i c u l a r reason 13.2 15.4 14.1 Timing of the o f f e r i n g 7.6 15.9 10.9 Advertising 5.7 7.7 6.5 Recommendation 1.9 2.6 2.2 Total 100.0% 100.0% 100.0% N = 53 N = 39 N = 92 95 The study attempted to determine i f the subjects a c t u a l l y searched for other competing i n s t i t u t i o n s . I t was quite c l e a r that neither group placed much e f f o r t into f i n d i n g other i n s t i t u t i o n s that offered equivalent courses. (Table 24) TABLE 24 SEARCH PROCEDURES General P a r t i c i p a n t s Professional Participants Combined Yes 18.75% 23.19% 26.96% No 81.25 76.81 73.04 Total 100.00% 100.00% 100.00% N = 69 N = 48 N = 117 p » no s i g n i f i c a n t d i f f e r e n c e ; d.f. = 1; X 2 - 1.54 Both groups showed l i t t l e awareness (25.0%) about courses offered by other educational i n s t i t u t i o n s . (Table 25) This r e s u l t c l o s e l y r e l a t e d to the p a r t i c i p a n t s ' search procedures, where only 27% of the p a r t i c i p a n t s even bothered to look f o r a l t e r n a t i v e educational i n s t i t u t i o n s . There appeared to be l i t t l e doubt about the e f f e c t of the U n i v e r s i t y of B r i t i s h Columbia's "image" on t h e i r decision-making. The p a r t i c i p a n t s who were aware of other educational i n s t i t u t i o n s o f f e r i n g equivalent courses indicated an average of 2.13 competitive courses, (s.d. = 2.03) This f i g u r e varied between 2.00 courses (s.d. = 1.06) for general p a r t i c i p a n t s , and 2.29 courses (s.d. = 2.88) for p r o f e s s i o n a l p a r t i c i p a n t s . These v a r i a t i o n s between the two groups were not s t a t i s t i c a l l y s i g n i f i c a n t . 96 TABLE 25 AWARENESS LEVEL OF PARTICIPANTS General P a r t i c i p a n t s Professional P a r t i c i p a n t s Combined Yes 26.5% 23.4% 25.0% No 73.5 76.6 75.0 Total 100.0% 100.0% 100.0% N = 68 N = 47 N = 115 p = no s i g n i f i c a n t d i f f e r e n c e ; d.f. = 1; X =1.48 Based on the information re l a t e d to lack of p a r t i c i p a n t "search" and "awareness", Hypothesis 4.7 i s rejected for both groups. P r i c i n g Responses Pa r t i c i p a n t s were asked to ind i c a t e high and low p r i c e thresholds for the course they were attending. This question gave the f i r s t c l e a r evidence, other than the demographic s t a t i s t i c s , that the general and professional p a r t i c i p a n t s represented two d i s t i n c t marketing groups. It also indicated that a d i f f e r e n t p r i c i n g a t t i t u d e separated the two groups of p a r t i c i p a n t s . (Table 26) 97 TABLE 26 Pr i c e Factors High P r i c e Threshold Low Price Threshold A b i l i t y to Judge Fees COURSE PRICE CONSIDERATIONS A HOTELLING-T2 ANALYSIS General P a r t i c i p a n t s $ 46.20 12.47 5.31 p o i n t s 2 P r o f e s s i o n a l P a r t i c i p a n t s $ 66.22 20.64 5.49 points Difference Between The Means - 20.03 1 - 8.17 1 .18 lp<.05 ( s i g n i f i c a n t difference) 2where: 5 = " f a i r " and 7 = "good" Although both groups indicated that a p r i c e range existed, the general group's high threshold p r i c e ($46.20) was below the average pri c e f o r the courses themselves ($52.10). Furthermore, only 71.4% answered the threshold p r i c e question, whereas 91.8% of the p r o f e s s i o n a l group responded. Some 68.6% of the general group responded to the low p r i c e threshold, with 79.6% of the professional group responding to t h i s threshold p r i c e . The second d i f f e r e n t i a t i o n between the groups occurred i n the average prices and standard deviations. The pr o f e s s i o n a l group had a tighter p r i c e range ($41.20 average p r i c e and an $11.80 standard deviation) than the general group ($52.10 average p r i c e and a $71.90 standard d e v i a t i o n ) . 98 P r i c i n g a t t i t u d e s of the professional group varied d i s t i n c t l y from the general group. The p r i c e range existed for the p r o f e s s i o n a l group ($66.20 to $20.60) which r e f l e c t e d the f i r s t part of threshold p r i c i n g theory. The average p r i c e f or each course was between the upper and lower thresholds ($41.20) which r e f l e c t e d the second p o r t i o n of threshold p r i c i n g theory. As mentioned previously, the general group reacted as the f i r s t portion of the theory indicated and had a p r i c e range ($46.20 to $12.50); however, the average course p r i c e f e l l out of t h i s range ($51.10). In summary, the general p a r t i c i p a n t s were w i l l i n g to pay the given course fee, but f e l t that such courses should be priced somewhat lower than at present. P r o f e s s i o n a l p a r t i c i p a n t s appeared to take a more "price and imputed q u a l i t y " approach. They defined a price-value r e l a t i o n s h i p and tended to f e e l that p r o f e s s i o n a l courses, i n order to be worth th e i r while, should have been priced at some l e v e l other than f r e e to ensure q u a l i t y . Hypothesis 4.2 i s therefore accepted for p r o f e s s i o n a l p a r t i c i p a n t s and accepted i n a q u a l i f i e d sense for general p a r t i c i p a n t s . Hypothesis 4.1 i s accepted for both groups. The p a r t i c i p a n t s ' self-perceived a b i l i t y to judge a course's value and place i n the competitive market was further enhanced by t h i s s e l f -perceived a b i l i t y to estimate a course's p r i c e . (Table 26) Although the scores were somewhat lower than those presented i n Table 19 (Pre-judgement a b i l i t i e s ) the responses were into the " f a i r " category. Once again, both groups had a r e l a t i v e l y high s e l f - a p p r a i s a l of t h e i r a b i l i t i e s to judge course o f f e r i n g s even though th e i r shopping methodologies did not substantiate t h i s perception. (Hypothesis 4.5) 99 Attitudes Toward Continuing Education Responses to a question regarding general a t t i t u d e s about continuing education suggested that i t was highly regarded by both groups of pa r t i c i p a n t s , with l i t t l e v a r i a t i o n between or within the groups. The mean r a t i n g on a nine point a t t i t u d e scale was 8.34 for general course part i c i p a n t s and 8.45 for pro f e s s i o n a l course respondents. The standard deviations were 1.02 and 0.94 re s p e c t i v e l y . The h o t e l l i n g - t 2 value was not s t a t i s t i c a l l y s i g n i f i c a n t . As the mean scores were close to the maximum obtainable, both groups c l e a r l y possessed strongly favourable attitudes toward continuing education. Attitudes toward continuing education were also analyzed using the Adolph and Whaley scale (1967). A score of 8.60 was the maximum obtainable on that scale, and the group of respondents used i n the construction of that scale had a mean score of 6.97 (s.d. = .54). By comparison, the par t i c i p a n t s i n p r o f e s s i o n a l courses had a mean score of 7.02 (s.d. = 0.49) and general i n t e r e s t course p a r t i c i p a n t s had a mean score of 6.94 (s.d. = 0.58). These data support the generalized a t t i t u d e measure reported above, and i n d i c a t e strongly favourable a t t i t u d e s on the part of both groups of p a r t i c i p a n t s . Hypothesis 4.8 i s therefore accepted. SUMMARY A h o t e l l i n g - t 2 a n a l y s i s was performed on the t o t a l data to give an overview of the socio-economic, p r i c e , a t t i t u d e , judgement and other responses demonstrated by the respondents. 100 S i g n i f i c a n t differences between the two groups occurred i n eight out of the ten socio-economic v a r i a b l e s : age, formal schooling, employability, occupational status, distance t r a v e l l e d to the course, m a r i t a l status, l o c a t i o n of residence, and income l e v e l s . S i g n i f i c a n t d i f f e r e n c e s between the sex composition of the groups and the number of dependents per respondent i n each group were found not to e x i s t . A l l other judgemental questions concerning the respondents' a b i l i t y to determine the value of other i n s t i t u t i o n s , and p o t e n t i a l courses, economic and personal need l e v e l s , and continuing education per se were found not to d i f f e r between the two groups. Both groups had a low response to the amount of search they conducted before taking a course. They had b a s i c a l l y the same reasons for not searching for other competing i n s t i t u t i o n s , and both groups were equally unaware of s i m i l a r courses being offered by other l o c a l educational i n s t i t u t i o n s . P r ofessional p a r t i c i p a n t s had a greater tendency to acquire outside f i n a n c i a l a i d . The s i g n i f i c a n t d i f f e r e n c e r e l a t e d to t h i s v a r i a b l e was the source of the f i n a n c i a l a i d . General p a r t i c i p a n t s received most of the i r a i d from r e l a t i v e s (87%) and p r o f e s s i o n a l p a r t i c i p a n t s received aid from school d i s t r i c t s (90.0%). The major source of differences between the two groups, other than their socio-economic c h a r a c t e r i s t i c s , was t h e i r r e a c t i o n to the p r i c e threshold concept. It i s quite clear that p r o f e s s i o n a l p a r t i c i p a n t s embraced the " p r i c e and imputed q u a l i t y " foundation of threshold p r i c i n g , whereas the general p a r t i c i p a n t s accepted p r i c e thresholds as given but s t i l l f e l t that t h e i r courses should have been given at a lower p r i c e . 101 The " p r i c e and imputed q u a l i t y " f a c t o r , although major f o r one group, was minimized for the other; that i s , the general course p a r t i c i p a n t s . Although both groups had the same basic judgemental a t t i t u d e s about continuing education, t h e i r demographic c h a r a c t e r i s t i c s and t h e i r p r i c e a t t i t u d e variance caused the groups to be defined as two d i s t i n c t consumer markets f o r the services offered by the U n i v e r s i t y of B r i t i s h Columbia Centre for Continuing Education. Hypothesis 4.9 i s therefore accepted. 102 CHAPTER V THRESHOLD PRICING AND MARKET SEGMENTATION INTRODUCTION The previous chapters explored and elaborated the conceptual and research framework f or t h i s study. That p a r t i c i p a n t s i n p r o f e s s i o n a l non-credit education courses appeared s i g n i f i c a n t l y d i f f e r e n t from t h e i r general non-credit course counterparts led to a closer examination of pa r t i c i p a n t s attending p r o f e s s i o n a l non-credit education courses, with p a r t i c u l a r reference to market segment considerations. Two hundred and forty-two p a r t i c i p a n t s i n eleven courses completed the questionnaire. This selected course range and p a r t i c i p a n t s i z e allowed a d e f i n i t i o n of selected socio-economic f a c t o r s , education and community p a r t i c i p a t i o n c h a r a c t e r i s t i c s , and a general p r i c i n g a t t i t u d e — a l l i n greater d e t a i l than i n the p i l o t study. PURPOSE This study b u i l d s upon the previous two studies. Its main purpose i s to give continuing education administrators one s p e c i f i c framework for developing definable market segments as expressed through p a r t i c i p a n t s ' p r i c i n g a t t i t u d e s , that i s , high and low p r i c e threshold determinations. Secondly, hypotheses derived from the previous projects 103 and l i t e r a t u r e review are formulated to respond d i r e c t l y to the research question, (see p. 4) T h i r d l y , a d e t a i l e d analysis of p a r t i c i p a n t s attending p r o f e s s i o n a l non-credit education courses at the Centre f o r Continuing Education i s presented to describe t h i s "market mix". (Stanton and Sommers, pp. 25-26) La s t l y , the r e s u l t s of hypotheses t e s t i n g and d e s c r i p t i o n of the part i c i p a n t s l e d to considerations for further research on continuing education p a r t i c i p a n t reactions to program p r i c e s t r a t e g i e s and resultant course p r i c e s . RESEARCH HYPOTHESES Hypothesis 5.1: There w i l l be a s i g n i f i c a n t d i f f e r e n c e between the price of the non-credit p r o f e s s i o n a l education courses and the par t i c i p a n t designated upper bound p r i c e for these courses, (reference: Hypothesis 4.1) Hypothesis 5.2: There w i l l be a s i g n i f i c a n t d i f f e r e n c e between the price of the non-credit p r o f e s s i o n a l education courses and the par t i c i p a n t designated lower bound p r i c e f o r these courses, (reference: Hypothesis 4.1) Hypothesis 5.3: P a r t i c i p a n t s w i l l designate s i g n i f i c a n t l y more non-zero d o l l a r ($) lower bound p r i c e s than zero d o l l a r ($) lower bound p r i c e s , (reference: Hypothesis 4.2) 104 Hypothesis 5.4: P a r t i c i p a n t s ' scores concerning t h e i r s e l f - p e r c e i v e d a b i l i t y to pre-judge courses, competition and course fees w i l l be s i g n i f i c a n t l y and p o s i t i v e l y associated with t h e i r attempts to search for and be aware of s i m i l a r course o f f e r i n g s , (reference: Hypothesis 4.5) Hypothesis 5.5: There w i l l be no s i g n i f i c a n t d i f f e r e n c e between the p a r t i c i p a n t s ' a t t i t u d e score about continuing education and the scores obtained i n a previous study by Adolph and Whaley. (reference: Hypothesis 4.8) The following hypotheses expand on the information gained from the p i l o t study and p r i c i n g l i t e r a t u r e . The hypotheses w i l l t e s t f o r more det a i l e d r e l a t i o n s h i p s between the p r i c e threshold scores and various socio-economic, a t t i t u d e and p a r t i c i p a t i o n scores. Hypothesis 5.6: High and low p r i c e threshold scores w i l l c o r r e l a t e s i g n i f i c a n t l y and p o s i t i v e l y with the p a r t i c i p a n t s ' : Wealth Hypothesis 5.6a: Employability status. Hypothesis 5.6b: Job status score (Blishen Index). Hypothesis 5.6c: Income. Hypothesis 5.6d: Receiving of fee payments from an outside source. Commitment to Continuing Education Hypothesis 5.6e: Total hours devoted to continuing education. Hypothesis 5.6f: Personal need score, (Shapiro, p. 22) Hypothesis 5.6g: Economic need score. (Shapiro, p. 22) Hypothesis 5.6h: A t t i t u d e toward continuing education score. (Adolph and whaley Index) Hypothesis 5.6i: Place of residence. 105 Hypothesis 5.7; High and low p r i c e threshold scores w i l l c o r r e l a t e s i g n i f i c a n t l y and p o s i t i v e l y with the p r i c e of courses. ( F o u i l l e , p. 96; Emry, p. 100) Hypothesis 5.8; High p r i c e threshold scores w i l l c o r r e l a t e s i g n i f i c a n t l y and negatively with the p a r t i c i p a n t s ' : Hypothesis 5.8a: Atti t u d e s about each of the four r e l a t e d educational i n s t i t u t i o n s , that i s , community colleges, adult night schools, community centres and proprietary schools. (Enis and Stafford) Hypothesis 5.8b: A b i l i t y to p r e d i c t the course fee. (Shapiro, p. 20) Hypothesis 5.8c: A b i l i t y to pre-judge the course c h a r a c t e r i s t i c s . (Shapiro, p. 20) Hypothesis 5.8d: A b i l i t y to judge a competing course. Hypothesis 5.9; The three p a r t i c i p a n t segments (high, average, low) i d e n t i f i e d f o r the upper bound p r i c e threshold w i l l have s i g n i f i c a n t l y d i f f e r e n t multiple discriminant c l a s s i f i c a t i o n s . Hypothesis 5.10: The three p a r t i c i p a n t segments (high, average, low) i d e n t i f i e d for the lower bound p r i c e threshold w i l l have s i g n i f i c a n t l y d i f f e r e n t multiple discriminant c l a s s i f i c a t i o n s . Hypothesis 5.11: The three p a r t i c i p a n t segments (high, average, low) w i l l have associated multiple discriminant c l a s s i f i c a t i o n s between the upper and lower bound p r i c e thresholds: Hypothesis 5.11a; The upper bound high p r i c e consumer segment w i l l not d i f f e r s i g n i f i c a n t l y from the lower bound high p r i c e consumer segment. 106 Hypothesis 5.11b: The upper bound w i l l not d i f f e r s i g n i f i c a n t l y from consumer segment. Hypothesis 5.11c: The upper bound w i l l not d i f f e r s i g n i f i c a n t l y from consumer segment. average p r i c e consumer segment the lower bound average p r i c e low p r i c e consumer segment the lower bound low p r i c e PROCEDURE The following eleven p r o f e s s i o n a l education non-credit short courses offered by the Centre were used for t h i s study: Classroom Management For Teachers Computer Course For High School Teachers The Adult And Learning C h i l d In Group Settings Music and Movement: R e a l i z i n g Your Own C r e a t i v i t y The Young C h i l d In Society Exploring C r e a t i v i t y With Young Children Teaching With Feelings: Understanding Emotions Elements of Instruction Technology of In s t r u c t i o n Reading Improvement Writing Improvement A l l p a r t i c i p a n t s i n each course completed the major study questionnaire. (Appendix D) D i s t r i b u t i o n and C o l l e c t i o n Procedure Permission was obtained from the course i n s t r u c t o r to explain the study's objectives and to give completion i n s t r u c t i o n s and a pick-up schedule to the p a r t i c i p a n t s . This explanation was accomplished on the 107 f i r s t day of c l a s s . The p a r t i c i p a n t s took the questionnaire home and returned i t on the following cl a s s day. The major study questionnaire caused no apparent conceptual or completion problems for the p a r t i c i p a n t s . Data Analysis Three separate computer programs were used to t e s t hypotheses and provide a d e s c r i p t i o n of the p a r t i c i p a n t s attending the courses. MV-TAB and TRIP were used to develop d e s c r i p t i v e data, i n c l u d i n g percentage d i s t r i b u t i o n s , t - t e s t s , means, standard deviations and c o r r e l a t i o n c o e f f i c i e n t s . BMD:07M was used to derive market segmentati multiple regression descriptions of the segmentations, and s i g n i f i c a n t d i f f e r e n c e c r i t e r i a f o r each market segment. RESPONDENTS' SOCIO-ECONOMIC COMPOSITION Par t i c i p a n t s attending p r o f e s s i o n a l non-credit education courses at the Centre averaged 31 years of age (s.d. = 10.6 years); were responsible for more than one dependent; attended 14 years of formal schooling (s.d. = 4.7 years); obtained 62.1 points (s.d. = 13.4 points) on the Blishen Occupational Status Index; t r a v e l l e d an average of 13.8 miles (s.d. = 15.5 miles) to attend the classes, and had an average income of $14,473 (s.d. = $8,699). Sixty-nine per cent of the respondents declared $12,000 or greater annual incomes. (Table 27) 108 TABLE 27 SOCIO-ECONOMIC COMPOSITION OF PARTICIPANTS Socio-Economic Factors  Age Dependents Formal Schooling Occupational Status Distance Travelled Income Mean Scores 30.96 years 1.28 persons 13.60 years 62.12 points 13.83 miles $14,473 Standard Deviations 10.63 years 1.95 persons 4.69 years 13.43 points 15.49 miles $8,699 Number of Respondents 190 231 230 204 242 214 Part i c i p a n t s had a greater tendency to be married (57%) rather than si n g l e (37%) or "other" (6%). More males (55%) than females (45%) attended the Centre's summer program; however, wide v a r i a t i o n s occurred among the separate courses. Seventy per cent of the p a r t i c i p a n t s indicated they were employed at the time of course attendance while 30% were unemployed. Although the d a i l y t r a v e l l i n g distance averaged 13.8 miles, 24 per cent of the p a r t i c i p a n t s were not from the lower mainland but l i v i n g on or near the campus f o r a course's duration. A presentation of permanent places of residence i s given below. (Table 28) 109 TABLE 28 RESPONDENTS' PLACE OF RESIDENCE Vancouver 37.27% North Shore 12.03 Burnaby 6.22 New Westminster 2.07 Port Coquitlam and ^ Coquitlam Richmond, Delta and 10 37 Surrey Lower Fraser Valley 2.49 Upper Fraser V a l l e y 2.49 Other 24.07 100.00% In summary, p a r t i c i p a n t s attending the 1974 Centre summer program of courses were generally middle class Canadians. Most were above 30 years old, were college educated, held non-labouring jobs, and earned an above-average income. PROGRAM AND INSTITUTIONAL RESPONSE PATTERNS This study asked the respondents to present th e i r a t t i t u d e s about the following: (1) the course they were attending; (2) comparable courses i n other educational i n s t i t u t i o n s ; (3) consumer search and awareness l e v e l s ; (4) economic and personal needs r e l a t e d to the courses; (5) a b i l i t y to judge among competing courses, and (6) a t t i t u d e s about continuing education. The combination of p a r t i c i p a t i o n data and marketing research information aided i n the determination of f a c t o r s a f f e c t i n g course p r i c e a t t i t u d e s and the t e s t i n g of Hypotheses 5.4 and 5.5. 110 Program Response The p a r t i c i p a n t s ' expected s a t i s f a c t i o n to be derived from a course was more personal (7.09 points) than economic (4.83 p o i n t s ) . With 5.0 points s i g n i f y i n g "average" and 7.0 points "above average", the par t i c i p a n t s appeared to be rather d e f i n i t e on this f a c t o r . (Table 29) The p a r t i c i p a n t s ' general s e l f - r a t e d a b i l i t y to pre-judge courses (5.42 points), course fees (4.54 points) and competition (5.34 points) were a l l rather constant and rated at a " f a i r " l e v e l . Thus, they are somewhat ambivalent about themselves as consumers of the s e r v i c e . This observation would give some j u s t i f i c a t i o n for c l a s s i f y i n g continuing education courses as "shopping goods". (Stanton and Sommers, p. 147) These courses may therefore be rather susceptible to the psychological aspects of p r i c i n g , threshold p r i c e considerations and a p r i c e and imputed q u a l i t y value judgement. (Enis and Stafford, p. 340) TABLE 29 PROGRAM RESPONSES OF PROFESSIONAL COURSE PARTICIPANTS Factors Mean Score Standard Deviation Number Personal need s a t i s f a c t i o n 7.09 1.55 235 Economic need s a t i s f a c t i o n 4.83 2.57 235 Pre-judgement a b i l i t y 5.42 1.65 233 A b i l i t y to judge a competing course 5.34 1.68 227 A b i l i t y to p r e d i c t a course fee 4.54 1.62 228 I l l Two rather obvious reasons were found for the f e e l i n g s of indecisiveness: (1) lack of "search" for a l t e r n a t i v e s courses given by competing educational i n s t i t u t i o n s , and (2) lack of a general awareness about the a v a i l a b i l i t y of other courses. Only 37% of the part i c i p a n t s attempted to search for a l t e r n a t i v e courses, and only 25% of the p a r t i c i p a n t s were aware of courses given by other i n s t i t u t i o n s . These l a t t e r respondents noted j u s t over one other competing i n s t i t u t i o n . Hypothesis 5.4: P a r t i c i p a n t s ' scores concerning t h e i r self-perceived a b i l i t y to pre-judge courses, competition and course fees w i l l be s i g n i f i c a n t l y and p o s i t i v e l y associated with p a r t i c i p a n t attempts to search for and be aware of s i m i l a r course o f f e r i n g s . I t has been stated that knowledge about the goods or ser v i c e s a v a i l a b l e on the market i s d i r e c t l y r e l a t e d to the consumers' amount of search and l e v e l of competitive awareness. (Brown, 1971) Hypothesis 5.4 tested t h i s r e l a t i o n s h i p by r e l a t i n g the p a r t i c i p a n t s ' search and awareness factors to t h e i r self-perceived a b i l i t i e s concerning continuing education se r v i c e s . The p a r t i c i p a n t s were asked two questions: Did they search for any other services, and were they aware of any other services? The "yes" - "no" responses were given dummy va r i a b l e designations and c o r r e l a t i o n c o e f f i c i e n t s between these two outcomes and the three consumer s e l f -judgement factors were derived. (Table 30) 112 TABLE 30 SHOPPING RELATIONSHIPS BETWEEN BEHAVIOUR AND SELF-JUDGEMENT Search Awareness r r Pre-judgement a b i l i t y .081 .056 A b i l i t y to judge a competing course .107 3 .220 1 A b i l i t y to p r e d i c t a course fee .220 Where: 1 = p<.01 2 = p<.05 3 = p<.10 Search and awareness, although p o s i t i v e l y r e l a t e d to a b i l i t y to pre-judge a course's c h a r a c t e r i s t i c s , were not s t a t i s t i c a l l y s i g n i f i c a n t . Awareness of other courses was the dominating factor a f f e c t i n g the p a r t i c i p a n t s ' f e e l i n g s about their a b i l i t y to judge other competing courses and pr e d i c t course fees (p<.01). The f a c t that p a r t i c i p a n t s a c t u a l l y took time to search for other courses s i g n i f i c a n t l y a f f e c t e d t h e i r perceived a b i l i t y to pr e d i c t a course fee (p<.05), and, to a l e s s e r degree, a b i l i t y to judge competing courses (p<.10). Hypothesis 5.4 i s , except i n the case of pre-judgement a b i l i t y , therefore generally accepted. The p a r t i c i p a n t s were asked why they attempted no search procedure. This was an open-ended question and the r e s u l t s are categorized below. (Table 31) 113 TABLE 31 REASONS FOR LACK OF SEARCH Assumed no other i n s t i t u t i o n s offered the course 26% No time to look 7 Previous experience made me f e e l the U n i v e r s i t y ^ of B r i t i s h Columbia was superior Because of the i n s t r u c t o r 1 Location of the U n i v e r s i t y of B r i t i s h Columbia 16 No p a r t i c u l a r reason 17 Timing of o f f e r i n g 2 Advertising 1 Recommendation or ordered to go to the ^ University of B r i t i s h Columbia Tot a l 100% The University of B r i t i s h Columbia's "image" as a superior educational i n s t i t u t i o n dominated d i r e c t l y or i n d i r e c t l y , the p a r t i c i p a n t s ' reasons for not "shopping". F i f t y - s i x per cent of the reasons r e l a t e d to "assumed no other i n s t i t u t i o n s " (26%), "previous experience" (13%) and "recommended or ordered" (17%). If " l o c a t i o n " (16%) i s included, the t o t a l increases to 72%. I n s t i t u t i o n a l Response In order to give some scope to the comparison of i n s t i t u t i o n s , p a r t i c i p a n t s were asked to r a t e four others. (Table 32) Although the r e s u l t s were somewhat inconclusive, i t i s apparent that no other i n s t i t u t i o n a l type i s considered superior to the Centre for Continuing Education, and a l l , except community colleges, r a t e at the lower end of "no d i f f e r e n c e " or d i r e c t l y i n " s i g n i f i c a n t l y worse". 114 TABLE 32 PARTICIPANT ATTITUDE TOWARD OTHER INSTITUTIONS I n s t i t u t i o n a l Type Mean Score Standard Deviation Number of Respondents Community Colleges 4.97 1.07 236 High Schools 4.41 1.32 237 Community Centres 3.80 1.40 230 Private Schools 4.24 1.70 226 Where: 4.00 - 6.99 points = "no d i f f e r e n c e " 1.00 - 3.99 points = " s i g n i f i c a n t l y worse" P a r t i c i p a n t a t t i t u d e s about continuing education were rated at a mean of 7.57 (s.d. = 6.31) using the Adolph and Whaley scale (1967). A score of 8.70 i s the maximum obtainable on that scale, and the o r i g i n a l group of respondents used by Adolph and Whaley i n the construction of that scale had a mean score of 6.97 (s.d. = .54). Hypothesis 5.5: There w i l l be no s i g n i f i c a n t d i f f e r e n c e between the p a r t i c i p a n t s ' a t t i t u d e score about continuing education and the scores obtained i n a previous study. (Adolph and Whaley, p. 153) This hypothesis was tested using a "difference between means" t e s t . (Freund and Williams, pp. 237-239) It was rejec t e d . These data indicated a very favourable a t t i t u d e about continuing education among the p a r t i c i p a n t s i n p r o f e s s i o n a l courses. 115 Summary The courses o f f e r e d through the Centre may be c l a s s i f i e d i n marketing terms as "shopping goods". Their value, c h a r a c t e r i s t i c s , p r i c e and competitive factors were not c l e a r l y understood by the users. The l a t t e r point was, to some extent, modified by the l a c k of search and low l e v e l of competitive awareness displayed by the p a r t i c i p a n t s . (Hypothesis 5.5) It was also apparent that the perceived superior image of the U n i v e r s i t y of B r i t i s h Columbia Centre for Continuing Education i n h i b i t s the users' desires to search for or be aware of a l t e r n a t i v e course o f f e r i n g s . F i n a l l y , the p a r t i c i p a n t s had a very strong and p o s i t i v e a t t i t u d e about continuing education (Hypothesis 5.6), and, i n t h i s respect, attended Centre courses with needs which were more personal than economic i n nature. COMMUNITY AND EDUCATIONAL PARTICIPATION Using the Chapin S o c i a l P a r t i c i p a t i o n Scale ( M i l l e r , 1970) for the community p a r t i c i p a t i o n measurement, and a modified Chapin Scale for the educational p a r t i c i p a n t measurement, the p a r t i c i p a n t s were scored r e l a t i v e to t h e i r involvement i n the indicated a c t i v i t i e s . The community p a r t i c i p a t i o n score averaged 12.05 (s.d. = 15.27) and educational p a r t i c i p a t i o n averaged 16.27 (s.d. = 14.72). In terms of Chapin's categories (Table 16), community p a r t i c i p a t i o n would be rated 116 i n the " s k i l l e d " category, and the education p a r t i c i p a t i o n i n the " c l e r i c a l " category. The l a t i t u d e present i n the standard deviation scores indicated that i n d i v i d u a l responses were widely v a r i e d . The p a r t i c i p a t i o n i n educational a c t i v i t i e s (16.27 points) was s i g n i f i c a n t l y greater than p a r t i c i p a t i o n i n community a c t i v i t i e s (12.05 p o i n t s ) , (t-prob. = .003; d.f. = 455) I t should be pointed out, however, that the questionnaires were somewhat d i f f e r e n t and tested two separate p a r t i c i p a n t dimensions. O v e r a l l p a r t i c i p a t i o n rather than comparisons should therefore be the d e s c r i p t o r . COURSE PRICE RESPONSE The l a t t e r p ortion of t h i s chapter i s composed of two main sections. The f i r s t deals with the b a s i c r e l a t i o n s h i p s that occurred between the pr i c e thresholds and various socio-economic, program and i n s t i t u t i o n a l f a c t o r s . These r e l a t i o n s h i p s were used to test the various hypotheses derived from the l i t e r a t u r e review and the p i l o t study. The second section deals with problems r e l a t i n g to market segmentation. An attempt was made to derive d i s t i n c t market c l a s s i f i c a t i o n s through the use of multiple discriminant analysis based on threshold p r i c e formulations. Once the segmentations were i d e n t i f i e d , a d e s c r i p t i o n of the "top d o l l a r " and average markets were presented. Such de s c r i p t i o n s and segmentation processes should aid continuing education administrators i n determining methods to develop a complete marketing mix ( p r i c e , product, place and promotion) to a t t r a c t s p e c i f i c markets to t h e i r i n s t i t u t i o n s . 117 P r i c i n g and the Adult P a r t i c i p a n t 1. Relationships between a "standard" p r i c e and upper and lower bound p r i c e s . Threshold p r i c i n g theory states that the p r i c e range which includes both the upper and lower bound prices should vary around a "standard" product p r i c e . For th i s study the "standard" product p r i c e was the mean p r i c e charged for a l l courses attended by the p a r t i c i p a n t s . The upper bound and lower bound prices were the mean scores obtained from the p a r t i c i p a n t s ' response when they were asked to present both an upper and lower bound p r i c e for the course they were attending. Although the l i t e r a t u r e does not s p e c i f i c a l l y state that the upper and lower bound prices should vary s i g n i f i c a n t l y from the mean p r i c e of the good or ser v i c e , i t has been tested for such an occurrence. This would give some r e l i a b i l i t y to the observations made previously about the p a r t i c i p a n t s ' " f a i r " or "acceptable" perception of the Centre's course p r i c e s . I f there was a s i g n i f i c a n t d i f f e r e n c e between the mean course p r i c e and the upper and lower bound pr i c e s , with p a r t i c u l a r reference to the upper bound p r i c e , then r a i s i n g the course fees to some degree would not a f f e c t attendance to such an extent that t o t a l revenue would drop. In economic theory terms, the demand curve would be c l a s s i f i e d as " i n e l a s t i c " . Hypothesis 5.1: There w i l l be a s i g n i f i c a n t d i f f e r e n c e between the p r i c e of the professional non-credit education courses and the p a r t i c i p a n t designated upper bound p r i c e for these courses. 118 Hypothesis 5.2: There w i l l be a s i g n i f i c a n t d i f f e r e n c e between the p r i c e of the pro f e s s i o n a l non-credit education courses and the p a r t i c i p a n t designated lower bound p r i c e f o r these courses. T-tests between the mean course p r i c e and the separate upper and lower bound mean prices were conducted. Given a t-prob. of <.001 (d.f. = 259) between the mean course p r i c e and the mean upper bound p r i c e , Hypothesis 5.1 was therefore accepted. Hypothesis 5.2 was also accepted based on a t-prob. <.001 (d.f. = 264) between the mean course price and the mean lower bound p r i c e . F o u i l l e (p. 96) and Emry (p. 100) have observed that consumer determined upper and lower bound thresholds are f u n c t i o n a l l y r e l a t e d to the p r i c e of the good or service under discussion, or at l e a s t some average of r e l a t e d goods. Therefore, i f the good i s perceived as being i n a class of expensive items, then the threshold range w i l l r e l a t e to that higher p r i c e framework. If the p r i c e class i s perceived as inexpensive (gum, soda pop) then the threshold range w i l l r e l a t e to that lower p r i c e l e v e l . To judge i f continuing education courses also show thi s p r i c e c l a s s - t h r e s h o l d p r i c e r e l a t i o n s h i p i t was predicted that: Hypothesis 5.7: High and low p r i c e threshold scores w i l l s i g n i f i c a n t l y and p o s i t i v e l y c o r r e l a t e with the pric e of the courses. The c o r r e l a t i o n c o e f f i c i e n t between the mean course p r i c e and the pa r t i c i p a n t determined mean upper bound p r i c e was r = .53 (p<.01); and between the mean course p r i c e and the mean lower bound p r i c e was r = .39 (p<.01). Hypothesis 5.7 was therefore accepted. 119 2. Relationships between threshold p r i c e s and p a r t i c i p a n t factors P a r t i c i p a n t s ' choice of both high and low p r i c e threshold bounds may be associated with t h e i r l e v e l of wealth and t h e i r commitment to continuing education. To test these two generalizations, nine separate hypotheses were developed, four r e l a t e d to wealth and f i v e r e l a t e d to continuing education commitment. Wealth High and low p r i c e threshold scores w i l l c o r r e l a t e p o s i t i v e l y and s i g n i f i c a n t l y with the p a r t i c i p a n t s ' Hypothesis 5.6a: Employability status. Hypothesis 5.6b: Job status score. (Blishen Index) Hypothesis 5.6c: Income. Hypothesis 5.6d: Payment of fees by some other source. TABLE 33 RELATIONSHIP BETWEEN THRESHOLD BOUND PRICES AND PARTICIPANT "WEALTH" FACTORS Upper Bound Pr i c e Lower Bound Price r r Employability status .351 .261 Job status score (Blishen Index) .321 .241 Income .182 .133 Payment of fees by some other source .181 .11 Where: 1 = p<.01; 2 = p<.02; 3 = p<.10 120 The p a r t i c i p a n t s ' choice of an upper bound p r i c e i s c l e a r l y r e l a t e d to a l l four "wealth" f a c t o r s . The lower bound p r i c e had the same re l a t i o n s h i p as the upper bound p r i c e as far as employability status and job status score was concerned (p<.01). The r e l a t i o n s h i p was not quite as strong with the income (p<.10 versus p<.02) and fee payment (p = not s i g n i f i c a n t versus p<.01) f a c t o r s . Commitment to Continuing Education High and low p r i c e threshold scores w i l l c o r r e l a t e p o s i t i v e l y and s i g n i f i c a n t l y with the p a r t i c i p a n t s ' Hypothesis 5.6e; T o t a l hours devoted to continuing education. Hypothesis 5.6f; Personal need score. Hypothesis 5.6g: Economic need score. Hypothesis 5.6h; A t t i t u d e toward continuing education. (Adolph and Whaley Index) Hypothesis 5 . 6 i ; Place of residence. Commitment to continuing education consisted of f i v e f a c t o r s . I t was expected that strength of involvement i n continuing education would be re l a t e d to t o t a l hours devoted to continuing education (Hypothesis 5.6e), a t t i t u d e toward continuing education (Hypothesis 5.6h) and place of residence (Hypothesis 5 . 6 i ) . Place of residence rather than distance t r a v e l l e d was used because the l a t t e r was obscured by so many p a r t i c i p a n t s from beyond the lower mainland. P a r t i c i p a n t s were divided into two groups: those who resided i n the lower mainland and those who resided elsewhere, (see Table 28) Both groups were given dummy v a r i a b l e designations for test purposes. 121 Personal need (Hypothesis 5.6f) and economic need (Hypothesis 5.6g) are a form of more d i r e c t commitment with the s p e c i f i c course and the type of value the p a r t i c i p a n t expected to derive from that course. TABLE 34 RELATIONSHIP BETWEEN THRESHOLD BOUND PRICES AND PARTICIPANT COMMITMENT TO CONTINUING EDUCATION Upper Bound Price Lower Bound Price r r T o tal hours devoted to continuing education .20 1 .22 1 Personal need score .01 .09 Economic need score .142 .133 Attitude toward continuing education .04 .05 Place of residence .33 1 .25 1 Where: 1 = p<.01; 2 = p<.05; 3 = p<.10 Total hours devoted to continuing education (p<.01), place of residence (p<.01) and economic need score (.05>p<.10) s i g n i f i c a n t l y correlated with p a r t i c i p a n t responses to both upper and lower bound p r i c e considerations. The Adolph and Whaley Index and personal need score appeared to have l i t t l e a s s o c i a t i v e value with respect to p r i c e boundaries. 122 3. Some negative considerations To t h i s point, p o s i t i v e p a r t i c i p a n t f a c t o r s r e l a t e d to the upper and lower bound p r i c e determination have been tested. There are, however, some p o t e n t i a l l y negative factors which should be considered. The f i r s t negative factor would be p a r t i c i p a n t a t t i t u d e about other educational i n s t i t u t i o n s ; that i s , the more p o s i t i v e they are about the educational o f f e r i n g of a competing i n s t i t u t i o n the les s l i k e l y they would show any d i r e c t i o n toward a high l e v e l f o r the upper bound p r i c e schedule for Centre courses. A b i l i t y to pr e d i c t course fees, pre-judge course c h a r a c t e r i s t i c s and judge competition would also be negatively r e l a t e d to p a r t i c i p a n t desire to present high upper bound prices since confidence i n t h e i r judgement would suppress extremely high p r i c e presentations. It was hypothesized that high p r i c e threshold scores would c o r r e l a t e negatively and s i g n i f i c a n t l y with the p a r t i c i p a n t s ' Hypothesis 5.8a: Attitudes about each of the four r e l a t e d educational i n s t i t u t i o n s . Hypothesis 5.8b Hypothesis 5.8c Hypothesis 5.8d A b i l i t y to predict t h e i r course fee. A b i l i t y to pre-judge the course c h a r a c t e r i s t i c s . A b i l i t y to judge a competing course. 123 TABLE 35 SOME NEGATIVE RELATIONSHIPS TOWARD UPPER BOUND PRICES r Community College .07 High School -.181 Community Centre -.162 Private Profit-making School -.143 Pre-judgement A b i l i t y -.221 A b i l i t y to pre d i c t a course fee -.133 A b i l i t y to judge a competing course -.03 Where: 1 = p<.01 2 = p<.02 3 = p<.05 Other than the community college and a b i l i t y to judge a competing course which were not s i g n i f i c a n t , a l l other f a c t o r s were negatively and s i g n i f i c a n t l y r e l a t e d to p a r t i c i p a n t s ' determination of a high p r i c e bound score. Attitudes about t h e i r pre-judgement a b i l i t y and high schools had the highest negative c o r r e l a t i o n (p<.01), followed by community centres (p<.02), p r i v a t e profit-making schools (p<.05), and a b i l i t y to pred i c t a course's fee (p<.05). C l e a r l y a p o s i t i v e a t t i t u d e about other i n s t i t u t i o n s a f f e c t e d the maximum that p a r t i c i p a n t s would be w i l l i n g to pay for a course. 124 P r i c e and Imputed Quality One of the foundations of threshold p r i c i n g i s the acceptance of a p r i c e and imputed q u a l i t y a t t i t u d e by a consumer of products or services. It was assumed that the i n d i v i d u a l , when asked to designate a lower bound p r i c e threshold, w i l l not state a $0 l e v e l . He w i l l , i n f a c t , begin to suspect the value of an item (or service) i f i t i s ava i l a b l e f o r free . Hypothesis 5.3: P a r t i c i p a n t s w i l l designate s i g n i f i c a n t l y more non-zero d o l l a r ($) lower bound pr i c e s than zero d o l l a r C$) lower bound p r i c e s . A simple count of those p a r t i c i p a n t s who stated a $0 d o l l a r lower bound p r i c e , as against a l l others, revealed that they were i n the minority, c o n s t i t u t i n g only 8.5% of the respondents. I t would therefore appear that the p r i c e and imputed q u a l i t y concept exists for the professional courses offered at the Centre. Summary The tests of hypotheses determined that the "standard" program pr i c e was s i g n i f i c a n t l y d i f f e r e n t from the p a r t i c i p a n t designated upper and lower bound p r i c e schedules (Hypotheses 5.1 and 5.2); that the threshold p r i c e structure s i g n i f i c a n t l y varied with the course p r i c e (Hypothesis 5.7); and that an apparent p r i c e and imputed q u a l i t y attitude existed r e l a t i v e to the Centre's p r o f e s s i o n a l courses. (Hypothesis 5.3). 125 P a r t i c i p a n t s ' upper bound p r i c e designations were p o s i t i v e l y and s i g n i f i c a n t l y affected by: (1) the f a c t that they were employed rather than unemployed (Hypothesis 5.6a); (2) t h e i r job status score on the Blishen Index (Hypothesis 5.6b); (3) th e i r income (Hypothesis 5.6c); (4) the f a c t that some other source paid th e i r fees (Hypothesis 5.6d); (5) the number of hours devoted to continuing education over the l a s t year (Hypothesis 5.6e); (6) t h e i r economic need score (Hypothesis 5.6g), and (7) t h e i r place of residence (Hypothesis 5.6i). S i g n i f i c a n t but negative r e l a t i o n s h i p s occurred r e l a t i v e to p a r t i c i p a n t s ' a t t i t u d e s about: (1) other educational i n s t i t u t i o n s — h i g h school adult programs, community centres and p r i v a t e profit-making s c h o o l s — e x c l u d i n g community colleges (Hypothesis 5.8a); (2) a b i l i t y to pre-judge course character-i s t i c s (Hypothesis 5.8c), and (3) a b i l i t y to p r e d i c t a course fee (Hypothesis 5.8b). P a r t i c i p a n t s ' lower bound p r i c e choices were p o s i t i v e l y and s i g n i f i c a n t l y affected by: (1) the f a c t that they were employed (Hypothesis 5.6a); (2) t h e i r job status on the Blishen Index (Hypothesis 5.6b); (3) the number of hours devoted to continuing education over the l a s t year (Hypothesis 5.6e); (4) t h e i r place of residence (Hypothesis 5.6e), and to a l e s s e r degree, (5) t h e i r income (Hypothesis 5.6c), and (6) t h e i r economic need score (Hypothesis 5.6g). In general, the t h e o r e t i c a l foundations of threshold p r i c i n g appear to be applicable to p r o f e s s i o n a l continuing education courses offered by the Centre for Continuing Education. 126 PRICE THRESHOLDS AND MARKET SEGMENTATION The establishment of the existence of p r i c e thresholds which has occurred through the previous two chapters and p r i o r section of t h i s chapter must now be r e l a t e d to the market de c i s i o n needs of continuing education administrators. An accepted procedure for t h i s i s found i n marketing management and i s referred to as "market segmentation". (Kotler, pp. 165-168) Market segmentation, the most recent idea for guiding marketing strategy, s t a r t s not with d i s t i n g u i s h i n g product p o s s i b i l i t i e s , but rather with d i s t i n g u i s h i n g customer needs or i n t e r e s t s . Market segmentation i s the sub-dividing of a market into homogeneous subsets of customers, where any subset may conceivably be selected as a market target to be reached with a d i s t i n c t market-ing mix. The power of t h i s concept i s that i n an age of intense competition for the mass market, i n d i v i d u a l s e l l e r s may prosper through c r e a t i v e l y serving s p e c i f i c market segments (markettes, or l i t t l e markets) whose needs are imperfectly s a t i s f i e d by the mass-market o f f e r i n g s . (Kotler, p. 166) Direct benefits to continuing education administrators from t h i s marketing process include: (1) they are " i n a better p o s i t i o n to spot and compare marketing opportunities"; (p. 168) (2) they can use t h e i r "knowledge of the marketing response differences of the various market segments to guide the a l l o c a t i o n of t h e i r t o t a l marketing budget"; (p. 168) and (3) they "can make f i n e r adjustments of t h e i r product and narketing appeals", (p. 168) 127 Basis f or the Segmentation Process Both the upper and the lower bound p r i c e schedules were the s t a r t i n g points for segmenting a l l the p a r t i c i p a n t s (market). I t was hypothesized that three definable and s t a t i s t i c a l l y s i g n i f i c a n t p a r t i c i p a n t markets (referred to as markets) existed f o r the upper bound p r i c e threshold (Hypothesis 5.9) and the lower bound p r i c e threshold. (Hypothesis 5.10) These three market segments were c a l l e d high, average and low. High was defined as that market which conceivably would be w i l l i n g to pay the highest amount for continuing education services; low was that market which was not w i l l i n g to pay the so-called "top d o l l a r " f o r these services, and average was that market which appeared not to be committed to e i t h e r extreme. It was further hypothesized that the three market segments repre-senting both p r i c e boundaries would not d i f f e r . (Hypotheses 5.11a, 5.11b, 5.11c) That i s , the upper bound high p r i c e segment would be s u b s t a n t i a l l y the same as the lower bound high p r i c e segment, the upper average s i m i l a r to the lower average, and the upper bound low p r i c e segment s i m i l a r to the lower bound low p r i c e segment. Marketing S i g n i f i c a n c e versus S t a t i s t i c a l S i g n i f i c a n c e The procedure used for determining i f the segments were s i g n i f i c a n t l y d i f f e r e n t was m u l t i p l e discriminant a n a l y s i s . If the segments were judged to be s i g n i f i c a n t l y d i f f e r e n t , then a d e s c r i p t i o n of each market was 128 presented. I t was t h i s market d e s c r i p t i o n that would i n t e r e s t the continuing education administrator as i t gave the f i r s t clue to the development of a marketing mix. Unfortunately, what i s s t a t i s t i c a l l y s i g n i f i c a n t may have no substantive s i g n i f i c a n c e f o r marketing decisions. Most market discriminant analyses s t a r t with a pre-determined market segmentation, for example, the i n d i v i d u a l s l i s t e n i n g to three types of radio stations - rock, c l a s s i c a l , and western. (Niassey, pp. 39-46) Data are acquired about each group and subjected to multiple discriminant a n a l y s i s . The groups may prove to be s i g n i f i c a n t l y d i f f e r e n t , but the v a r i a b l e s which caused the s i g n i f i c a n t d ifferences may be of l i t t l e value for marketing decisions. This study did not have the advantage of a pre-determined market segment c l a s s i f i c a t i o n as explained above. Rather, an attempt was made to define, from a c l e a r l y homogeneous market ( a l l i n d i v i d u a l s i n a p r i c e bound), three separate price-oriented markets. The process was somewhat subjective and the f i n a l groups used for segmentation d i s c r i m i n a t i o n r e f l e c t e d t h i s exploratory framework. The m u l t i p l e discriminant c l a s s i -f i c a t i o n s proved to a large extent to be s t a t i s t i c a l l y s i g n i f i c a n t , but caution must be exercised concerning t h e i r s i g n i f i c a n c e for marketing decisions. 129 THE FINDINGS Segmenting the Upper Bound P r i c e Schedule The f i r s t analysis attempted to develop three c l a s s i f i c a t i o n s f or the homogeneous upper bound p r i c e boundary, and the discriminant c l a s s i -f i c a t i o n was s t a t i s t i c a l l y s i g n i f i c a n t (F-prob.<.001). Seven predictor variables were assigned to the discriminant functions: awareness of the number of competing i n s t i t u t i o n s ; a t t i t u d e toward continuing education; miles t r a v e l l e d to a c l a s s ; a t t i t u d e about a community centre; p a r t i c i p a t i o n i n l o c a l organizations (absolute number); m a r i t a l status, and number of points received for p a r t i c i p a n t payment of courses. (Table 36) The value of the discriminant c o e f f i c i e n t s were used to i n d i c a t e the most important independent v a r i a b l e s . A t t i t u d e about community centres had the highest r a t i n g for both l i n e a r functions of the indepen-dent v a r i a b l e s . The a c t u a l p r e d i c t i v e accuracy of the discriminant functions was c l a s s i f i e d as 61.61%. The c l a s s i f i c a t i o n was s t a t i s t i c a l l y s i g n i f i c a n t (F-prob.<.001) based on p r o b a b i l i t y d i s t r i b u t i o n s of either 33.33% i f three groups were considered, or 11.1% i f a l l nine p o t e n t i a l categories were considered. From a marketing viewpoint, the d i f f e r e n t i a t i o n between the upper bound high and low categories was somewhat unsatisfactory with only 15.9% of the upper bound high c l a s s i f i e d into high, and 36.1% of the upper bound low c l a s s i f i e d into low. The m i s c l a s s i f i c a t i o n s into the average 130 TABLE 36 1 SUMMARY OUTPUT FOR THREE-GROUP UPPER BOUND DISCRIMINANT ANALYSIS Step V a r i a b l e V a r i a b l e F-Value to Enter Degrees of Number Entered Number or to Remove Freedom 1 Awareness - number of competing 1 6.54 2; 208 i n s t i t u t i o n s 2 A t t i t u d e toward 2 Q 7 continuing education 3 Miles t r a v e l l e d 4 > 3 Q to c l a s s 4 Attitude about a , . o n 0 4 4.39 2; 205 community centre 5 P a r t i c i p a t i o n i n ^ 3 9 l o c a l organization 6 M a r i t a l status 6 4.40 2; 203 7 Number of points for courses paid by 7 3.19 2; 202 pa r t i c i p a n t DISCRIMINANT FUNCTIONS-COOLEY AND LOHNES COEFFICIENTS Variable Number Function #1 Function #2 1 .049 -.240 2 -.018 .045 3 -.189 .269 4 .883 .926 5 -.323 -.065 6 .055 .786 7 -.272 -.042 -Format for Tables 36, 37 i s from: Green and T u l l , p. 386. 131 CLASSIFICATION MATRIX-PREDICTED Upper Bound Upper Bound Upper Bound T o t a l High Average Low  Upper Bound High 15.9% 70.5% 13.6% 100% Upper Bound Average 5.0% 88.3% 6.7% 100% Upper Bound Low 6.4% 57.5% 36.1% 100% segment appeared to cause the greatest problem and gave some i n d i c a t i o n that, for marketing purposes, the p a r t i c i p a n t s may have been rather homogeneous. However, because of t h i s study's exploratory nature the segmentation process i s continued below i n order to i n d i c a t e both be n e f i t s and drawbacks from s e l f - d e f i n e d market groups. Hypothesis 5.9 was s t a t i s t i c a l l y accepted, but unacceptable for marketing d e c i s i o n purposes. Segmenting the Lower Bound P r i c e Schedule The predictor v a r i a b l e s for the lower bound d i s c r i m i n a t i o n process were: awareness of the number of competing i n s t i t u t i o n s ; a b i l i t y to predict a course fee; income, and p a r t i c i p a t i o n i n organizations. Based on the value associated with the independent v a r i a b l e c o e f f i c i e n t s , the awareness of the number of competing i n s t i t u t i o n s was the most powerful discriminant v a r i a b l e . (Table 37) The c l a s s i f i c a t i o n matrix was s t a t i s t i c a l l y s i g n i f i c a n t (F-prob.<.001) Once again, the average category drew from the two other categories and l e f t doubt as to the segmentation's worth r e l a t i v e to a marketing d e c i s i o n . 132 TABLE 37 SUMMARY OUTPUT FOR THREE-GROUP DISCRIMINANT ANALYSIS-LOWER BOUND PRICE SCHEDULE Step Number 3 4 Variable Variable Entered Number Awareness - number of competing 1 i n s t i t u t i o n s A b i l i t y to p r e d i c t a course fee Income Points received f o r organization attendance 2 3 4 F-Value to Enter or to Remove 10.89 4.02 4.11 4.18 Degrees of Freedom 2; 183 2; 182 2; 181 2; 180 DISCRIMINANT FUNCTIONS-COOLEY AND LOHNES COEFFICIENTS Variable Number Function #1 Function #2 1 2 3 4 -.988 .149 .001 -.051 .975 -.062 .005 -.212 CLASSIFICATION MATRIX-PREDICTED Lower Bound High Lower Bound Average Lower Bound Low Lower Bound High 0% 1.5% 3.3% Lower Bound Average 95.5% 93.3% 80.0% Lower Bound Low 4.5% 5.2% 16.7% To t a l 100.0% 100.0% 100.0% 133 Hypothesis 5.10 was accepted s t a t i s t i c a l l y and 69.9% of the cases were c l a s s i f i e d c o r r e c t l y , although one must conclude that the segmentation was unacceptable from a marketing viewpoint. Relationships Between the Three Upper Bound Sub-markets and the Three  Lower Bound Sub-markets The obje c t i v e of the two previous sections was to determine i f three separate sub-markets existed f o r both upper and lower bound p r i c e schedules. This section's objective was to determine i f there were any uniformity of markets between the upper and lower bound high prices as one market, the average p r i c e group as a second market, and the low p r i c e group as a t h i r d market. In e f f e c t , the three sub-markets for both the upper and lower bound p r i c e schedules may represent separate markets, that i s , the o v e r a l l high, average and low p r i c e markets. 1. The high p r i c e sub-market A research hypothesis has been defined for t h i s s p e c i f i c a n a l ysis: Hypothesis 5.11a: The upper bound high p r i c e consumer segment w i l l not d i f f e r s i g n i f i c a n t l y from the lower bound high p r i c e consumer segment. The objective was not to a t t a i n s u b s t a n t i a l l y d i f f e r e n t groups but to assess the degree of uniformity between the high p r i c e sub-markets of both the upper and lower bound p r i c e schedules. The r e s u l t s of the multiple discriminant analysis are presented i n Table 38. P r o b a b i l i t i e s f o r predicted c l a s s i f i c a t i o n were 50%. The 134 number of cases that were c o r r e c t l y c l a s s i f i e d was only 65.15%. This rather small d i f f e r e n c e of 15.15% between chance s e l e c t i o n and s t a t i s t i c a l s e l e c t i o n , although s i g n i f i c a n t (F-prob.<.01581), and the overlap of the lower bound high p r i c e market segment onto the upper bound high segment (86.4%) indicates a rather homogeneous market of "top d o l l a r " p a r t i c i p a n t s . TABLE 38 SUMMARY OUTPUT FOR TWO-GROUP DISCRIMINANT ANALYSIS UPPER BOUND HIGH VERSUS LOWER BOUND HIGH PRICE SEGMENTS Step Variable Variable F-Value to Enter Degrees of Number Entered Number or to Remove Freedom 1 A b i l i t y to pr e d i c t , . , a course fee 1 6 ' 0 6 ^ 6 4 DISCRIMINANT FUNCTI0NS-C00LEY AND LOHNES COEFFICIENTS Variable Function #1 1 -1.0 CLASSIFICATION MATRIX-PREDICTED1 Upper Bound Lower Bound Total High High  Upper Bound High 90.9% 9.1% 100.0% Lower Bound High 86.4% 13.6% 100.0% •significant at F-prob.<.01581 and 65.15% of the cases c o r r e c t l y c l a s s i f i e d . 135 Hypothesis 5.11a, although not s t a t i s t i c a l l y accepted, was considered acceptable given the nature of the study, the overlap of the two market segments, and the rather low (65.15%) s t a t i s t i c a l c l a s s i f i c a t i o n . Only one independent v a r i a b l e had a high enough F-value to be retained i n the l i n e a r discriminant function. A b i l i t y to p r e d i c t a course fee accounted for the complete s t a t i s t i c a l c l a s s i f i c a t i o n matrix i n Table 38. 2. Description of the high p r i c e sub-market Beyond the hypotheses t e s t i n g r e l a t i v e to threshold p r i c e theory and the conceptual determination of market segments based on a threshold p r i c i n g format, t h i s study's concern was to describe a p o t e n t i a l l y l u c r a t i v e market for continuing education administrators — t h e high p r i c e or "top d o l l a r " market. The d e s c r i p t i o n presented i n the following paragraphs includes previously discussed socio-economic v a r i a b l e s , as w e l l as p a r t i c i p a n t responses to various program, i n s t i t u t i o n a l and p a r t i c i p a n t factors as the l a t t e r r e l a t e to the "top d o l l a r " market. Socio-economic variables These p a r t i c i p a n t s had an average age of 30.9 years (s.d. = 11.8 years); were responsible for more than one dependent (s.d. = 1.8 dependents); had had 13.8 years of schooling (s.d. = 2.3 years); received 62.0 points on the Blishen Index (s.d. = 14.9 p o i n t s ) , and had an average income of $14,949 (s.d. = $8,005) with 78% declaring an income of greater than $12,000 per year. They t r a v e l l e d an average of 12.1 miles 136 (s.d. = 15.2 miles) to c l a s s , resided outside of Vancouver C 5 6 % versus 44%), were employed (71% versus 29%), and were married (51.5%) rather than s i n g l e (36.4%) or other (12.1%). Females and males were evenly represented (50% for each category). Program, i n s t i t u t i o n a l , and p a r t i c i p a t i o n responses They perceived the courses as s a t i s f y i n g a personal (X = 7.2; s.d. = 1.7) rather than an economic need (X = 5.0; s.d. = 2.5). Their judgemental a b i l i t i e s r e l a t i v e to course c h a r a c t e r i s t i c s (X = 5.3; s.d. = 1.7), other i n s t i t u t i o n s (X = 5.2; s.d. = 1.8), and course fee p r e d i c t i o n (X = 4.6; s.d. = 1.6) were a l l comparable and classed as " f a i r " . Their a t t i t u d e about community colleges (X = 4.8; s.d. = 1.3), high schools (X = 4.1; s.d. = 1.4), community centres (X = 3.5; s.d. = 1.5) and pr i v a t e profit-making i n s t i t u t i o n s (X = 4.1; s.d. = 1.7) l e f t the U n i v e r s i t y of B r i t i s h Columbia Centre for Continuing Education i n a very superior p o s i t i o n . A l l mean scores r e l a t e d to these other i n s t i t u t i o n s were on the low end of the "no d i f f e r e n c e " a t t i t u d e (4.00 -6.99) or into the " s i g n i f i c a n t l y worse" (<4.00) a t t i t u d e category. Only 41% of the high p r i c e p a r t i c i p a n t s attempted any consumer search for a l t e r n a t i v e courses and only 18% were even aware of a l t e r n a t i v e l o c a t i o n s . Their a t t i t u d e about continuing education was very favourable (X = 7.1 points; s.d. = .5 p o i n t s ) . The low standard deviation indicated a high degree of a t t i t u d e conformity. They p a r t i c i p a t e d i n p r i o r 137 continuing education events (X = 14.3 points; s.d. = 12.0 points) to a greater extent than community events (X = 12.4 Chapin points; 15.8 Chapin p o i n t s ) . The s i z a b l e v a r i a t i o n r e f l e c t e d i n both standard deviations indicated wide i n d i v i d u a l d i f f e r e n c e s . 3. The average p r i c e sub-market A research hypothesis has been defined f o r t h i s s p e c i f i c a n a l ysis: Hypothesis 5.12b: The upper bound average p r i c e consumer segment w i l l not d i f f e r s i g n i f i c a n t l y from the lower bound average p r i c e consumer segment. As with the high p r i c e sub-market, a multiple discriminant t e s t between the upper bound average p r i c e sub-market and the lower bound average p r i c e sub-market was conducted to determine i f these two average markets had a high degree of uniformity. There was no c l a s s i f i c a t i o n matrix developed f or the o v e r a l l average p r i c e market. In other words, they were, as between the upper and lower bound p r i c e schedules, one and the same market. Hypothesis 5.11b i s therefore accepted s t a t i s t i c a l l y (F-prob.>.05) and w i t h i n the exploratory structure of t h i s study. 4. Description of the average p r i c e market The d e s c r i p t i o n of t h i s market follows the same twofold breakdown as the high p r i c e market. Socio-economic v a r i a b l e s These p a r t i c i p a n t s had an average age of 29.9 years (s.d. = 10.8 years); were responsible for more than one dependent (s.d. = 2.2 depen-dents); had had 13.8 years of schooling (s.d. = 5.9 years); received 138 61.2 points on the Blishen Index (s.d. = 14.1 points), and had an average income of $14,939 (s.d. = $9,498). They travelled an average of 12.3 miles (s.d. - 13.2 miles) to class, resided outside of Vancouver (62.0% versus 3 8 . 0 % ) , were employed (67.7% versus 3 1 . 3 % ) , and were married (53.5%) rather than single (41.3%) or other ( 5 . 2 % ) . There were more males C62.1%) than females ( 3 7 . 9 % ) . Program, institutional, and participation responses They perceived the courses as satisfying a personal (X = 7.1; s.d. = 1.5) rather than an economic need (X = 5.1; s.d. = 2 . 5 ) . Their judgemental a b i l i t i e s relative to course characteristics (X = 5.4; s.d. = 1.6), other institutions (X = 5.3; s.d. = 1 . 6 ) , and course fee prediction (X = 4.6; s.d. = 1.5) were a l l classed i n the " f a i r " range. Their attitude about community colleges (X = 5.0; s.d. = 1.0), high schools (X = 4.4; s.d. = 1.3), community centres (X = 3.8; s.d. = 1.4), and private profit-making institutions (X = 4.2; s.d. = 1.7) varied from "significantly worse" to "no difference". Once again, no other institution was considered superior to the Centre. Only 37% of the average price participants attempted any consumer search for alternative courses and only 28.9% were even aware of alternative locations. Their attitude about continuing education was very favourable (X = 8.0 points; s.d. = 8.7 points), although the large standard deviation indicated a large variance within this price group. 139 They p a r t i c i p a t e d i n p r i o r continuing education events (X = 15.8 points; s.d. = 14.1 points) to a greater extent than community events (X = 10.9 Chapin points; s.d. = 13.6 Chapin p o i n t s ) . The s i z a b l e v a r i a t i o n r e f l e c t e d i n both standard deviations indicated wide i n d i v i d u a l d i f f e r e n c e s . 5. The low p r i c e sub-market A research hypothesis has been defined for this s p e c i f i c a n a l y s i s : Hypothesis 5.11c: The upper bound low p r i c e consumer segment w i l l not d i f f e r s i g n i f i c a n t l y from the lower bound low p r i c e consumer segment. As with the other two p r i c e sub-markets, a mul t i p l e discriminant analysis was conducted between the upper bound low p r i c e market segment and the lower bound p r i c e low p r i c e market segment. The objective was to determine some l e v e l of uniformity between the two sub-markets. Unlike the other two t e s t s , there was l i t t l e or no uniformity. S t a t i s t i c a l l y , the data were s i g n i f i c a n t l y separate (F-prob.<.001). The c l a s s i f i c a t i o n matrix produced 76.62 c o r r e c t l y c l a s s i f i e d cases, and there was only a comparably minor overlap between the upper bound low market and the lower bound low market (19.1%). The overlap f i g u r e was somewhat higher between the lower bound low market and the upper bound low market (30.0%). (Table 39) Hypothesis 5.11c would therefore have to be rejected both s t a t i s t i c a l l y and i n an exploratory sense. 140 There were f i v e d i s c r i m i n a t i n g v a r i a b l e s : awareness of the number of competing i n s t i t u t i o n s ; a b i l i t y to p r e d i c t a course fee; a t t i t u d e about a community centre; age of the p a r t i c i p a n t , and the number of national organizations within which the p a r t i c i p a n t held a membership. The most di s c r i m i n a t i n g v a r i a b l e was the p a r t i c i p a n t s ' awareness of the number of competing i n s t i t u t i o n s . Because the low p r i c e market segments were not considered uniform as between the upper and lower bound p r i c e schedules, a combined d e s c r i p t i o n of this market i s not presented. From a marketing stand-point, a completely separate analysis of the two low p r i c e markets would be necessary and that i s beyond the o r i g i n a l purpose and scope of t h i s study. In r e l a t i o n to the l a t t e r observation, i t should be noted that uniformity considerations within the high or "top d o l l a r " and the average markets constitute the most important as w e l l as the l a r g e s t portion of p a r t i c i p a n t s attending the Centre. 141 TABLE 39 SUMMARY OUTPUT FOR TWO-GROUP DISCRIMINANT ANALYSIS UPPER BOUND LOW VERSUS LOWER BOUND LOW PRICE SEGMENTS Step Number 4 5 Variable Entered Awareness - number of competing i n s t i t u t i o n s A b i l i t y to p r e d i c t a course fee A t t i t u d e about a community centre Age Number of national organization memberships Variable Number 3 4 F-Value to Enter or to Remove 17.33 6.94 6.46 4.51 6.63 Degrees of Freedom 1; 75 1; 74 1; 73 1; 72 1; 71 DISCRIMINANT FUNCTIONS-COOLEY AND LOHNES COEFFICIENTS Variable 1 2 3 4 5 Function #1 .971 -.131 -.119 -.026 .162 CLASSIFICATION MATRIX-PREDICTED^ Upper Bound Low Lower Bound Low Upper Bound Low  80.99% 30.0% Lower Bound Low  19.1% 70.0% Total 100.0% 100.0% s i g n i f i c a n t at F-prob.<.001 and 76.62% of the cases c o r r e c t l y c l a s s i f i e d . 142 Suramary The objective of t h i s s ection was t h r e e f o l d : (1) to determine i f an apparently homogeneous continuing education market could be segmented based upon p a r t i c i p a n t derived upper and lower bound p r i c e schedules; (2) to determine i f multiple discriminant analysis i s an applicable s t a t i s t i c a l segmentation technique, and (3) to determine i f the segmenta-t i o n data derived from the above process would be usable for marketing decisions by continuing education administrators. Objective one was developed to derive a "top d o l l a r " market r e l a t i v e to p rofessional education courses given at the Centre. Although the segmentation process was pursued based on p a r t i c i p a n t derived p r i c e thresholds i t appeared that t h i s form of segmentation development proved unworkable and forms of segmentation other than the "top d o l l a r " frame-work should be considered. The use of multiple discriminant analysis to determine the segmentation c l a s s i f i c a t i o n s and s i g n i f i c a n t independent variables was more than adequate. I t i s suggested that t h i s s t a t i s t i c a l methodology be pursued using other segmentation frameworks. Although the data were s t a t i s t i c a l l y v a l i d , the r e s u l t s , due to n i s c l a s s i f i c a t i o n into the "average" segments, proved to be unworkable For marketing decisions. I t was obvious that care must be taken when translating s t a t i s t i c a l l y s i g n i f i c a n t information i n t o a d e c i s i o n cramework for marketing. 143 MARKETING CONSIDERATIONS FOR CONTINUING EDUCATION ADMINISTRATORS Various continuing education-related marketing considerations are presented w i t h i n a str u c t u r e formulated by the study's major purpose, and the a p p l i c a t i o n of a s p e c i f i c marketing technique to data derived from the study's p a r t i c i p a n t s . The study's major purpose as stated i n Chapter I was to determine i f the t h e o r e t i c a l foundations described i n threshold p r i c i n g were applicable to continuing education courses, i n p a r t i c u l a r , those of the Uni v e r s i t y of B r i t i s h Columbia Centre for Continuing Education. Based on r e s u l t s derived from Chapters I I I , IV and V i t would appear that a threshold p r i c i n g a t t i t u d e e x i s t s for p a r t i c i p a n t s attending both professional and general courses, with p a r t i c u l a r emphasis given to professional p a r t i c i p a n t s . This threshold p r i c i n g a t t i t u d e has s p e c i f i c marketing outcomes f or continuing education: 1. Pric e should not be considered as the sole purchasing determinant. In the development of a marketing strategy f o r various courses, the continuing education administrator should now begin to r e a l i z e that course p r i c e i s only one of many consumer purchase d e c i s i o n "cues" or c r i t e r i a . Course length, for example, was shown to be a general purchase determinant. The consumer image of the educational i n s t i t u t i o n also affected consumer a t t i t u d e about the value of a course. This l a t t e r cue was e s p e c i a l l y r e f l e c t e d i n rather low search and awareness l e v e l s exhibited by Centre p a r t i c i p a n t s ; 144 2. Consumer acceptance of a p r i c e and imputed q u a l i t y a t t i t u d e about continuing education courses also expands the marketing scope of continuing education administrators. No longer must administrators take a p h i l o s o p h i c a l or administrative stand that the "cheaper the b e t t e r " i s a t o t a l , complete or t r u l y v a l i d marketing strategy. In f a c t , j u s t the opposite may be true. I t was c l e a r for both general and p r o f e s s i o n a l courses that the p a r t i c i p a n t s may have suspected course q u a l i t y or value i f too low a p r i c e was advertised; 3. A market c o r o l l a r y to the above i s the "state of the economy". Given the high i n f l a t i o n rate and budget r e s t r i c t i o n s faced by continuing education i n s t i t u t i o n s , and given the f a c t that most p a r t i c i p a n t s are generally aware of both s i t u a t i o n s , t h i s would be an i d e a l time to consider rather large ( r e l a t i v e l y and absolutely) course fee increases for a wide range of p r o f e s s i o n a l courses; 4. There were a large number of p a r t i c i p a n t s taking p r o f e s s i o n a l education courses who had t h e i r fees paid by some other i n s t i t u t i o n (34.19%). This point, along with an i n f l a t i o n a r y psychology, i n s t i t u -t i o n a l budgetary needs and a participant-based p r i c e and imputed q u a l i t y consensus, would i n d i c a t e that a more aggressive p r i c i n g strategy should be considered. Furthermore, p a r t i c i p a n t s ' incomes have r i s e n and are r i s i n g at f a s t e r rates than course fees. In economic terms, t h i s simply means that p a r t i c i p a n t s have more d i s c r e t i o n a r y income to spend on equivalent consumption goods such as stage plays, movies, or courses given by other i n s t i t u t i o n s . Therefore, the Centre's revenue should r e f l e c t these various income increases, i n s t i t u t i o n a l l y paid t u i t i o n s , and non-price consumption cues. 145 5. The existence of "rough" p r i c e thresholds rather than elegantly-defined demand curves expands continuing education administrators' p r i c e marketing strategy. They do not have to attempt to determine one "good" or completely acceptable course fee. Rather the range between the upper and lower bound thresholds allows a wider p r i c i n g l a t i t u d e and a greater opportunity to increase t o t a l revenue. This l a t t e r point occurs because the administrators have a consumer determined p r i c e range with which to base normal cost r e l a t e d p r i c i n g schedules. They could note i f a course pr i c e f e l l to either extreme of the p r i c e range and then decide whether the course p r i c e would be acceptable. Although the f i v e examples given above do not exhaust the marketing considerations r e l a t e d to the study's purpose, they should give d i r e c t i o n s to continuing education administrators r e l a t i v e to an expanding use of a consumer based p r i c i n g strategy. The second marketing outcome i s the a p p l i c a b i l i t y of multiple discriminant analysis to market segment creation as determined from p a r t i c i p a n t responses to threshold p r i c e schedules. Although the general use of multiple discriminant analysis i n marketing has been amply proven by various marketing research authors, i t was Morrison who delineated the implementation problems: "When the analysis i s f i n i s h e d , three questions need to be answered. How w e l l did we c l a s s i f y the i n d i v i d u a l s ? Which va r i a b l e s were most e f f e c t i v e i n d i s c r i m i n a t i n g among the d i f f e r e n t classes? How can the answers to the f i r s t two questions be used to help set and implement marketing plans? This l a s t point i s important because one can often do a study and get excellent c l a s s i f i c a t i o n , i d e n t i f y the v a r i a b l e s that do the d i s c r i m i n a t i n g , and yet have very l i t t l e idea as to how these r e s u l t s can be used." (p. 2-442) 146 Morrison's three generalized implementation problems assumed, as have most authors, that the market segmentations were pre-determined. This study, however, was not given pre-determined market segments. Rather, a homogeneous group of p a r t i c i p a n t s taking professional education courses at the Centre were divided based on responses to questions rel a t e d to upper and lower bound p r i c e thresholds for s p e c i f i c courses. Given t h i s explanation about the reformulation of the segmentation procedure, a response to Morrison's implementation paradigm i s presented below. C l a s s i f i c a t i o n of i n d i v i d u a l s w i t h i n each bound p r i c e schedule was, from a marketing viewpoint, somewhat inadequate. The c l a s s i f i c a t i o n d i d not produce mutually exhaustive segments, although the preliminary c l a s s i f i c a t i o n d i d produce three s t a t i s t i c a l l y s i g n i f i c a n t d i f f e r e n t segments. When the three upper and lower bound segments were recombined to produce three o v e r a l l market segments: "top d o l l a r " , average, and low, the same basic m i s c l a s s i f i c a t i o n problem, except for the average market, occurred. In response to Morrison's f i r s t questions: "How w e l l did we c l a s s i f y the i n d i v i d u a l s ? " , the response would have to be rather poorly. Morrison's question about the independent v a r i a b l e s which discriminate most e f f e c t l y was pursued f o r the sake of the study's exploratory nature although the m i s c l a s s i f i c a t i o n r e s u l t s tended to negate the f i n d i n g s . The t h i r d implementation question may be answered at two l e v e l s , one related to t h i s study, and the second r e l a t e d to generalized needs of continuing education administrators. As f a r as the f i r s t i s concerned 147 the marketing a p p l i c a b i l i t y i s rather l i m i t e d . The segmentation procedure was not t o t a l l y successful. Although the groups were, for the most part, s t a t i s t i c a l l y adequate, any marketing value based on the regression c o e f f i c i e n t s and segment descriptions was not that valuable. From a p r i c e strategy viewpoint i t would appear that p a r t i c i p a n t s attending p r o f e s s i o n a l education courses at the Centre are a rather homogeneous population. At the second l e v e l , the use of market segmentation and the use of multiple discriminant analysis to analyze the segments may be more i n t e r e s t i n g and more v a l i d . That i s , i f as other authors have stated, the marketing manager, or for our purposes, the continuing education administrator, i s given rather s e l f - e v i d e n t market segmentations (based on type of course for example) then the segmentation r e s u l t s could be more valuable for marketing mix needs. The segmentation data made av a i l a b l e through multiple discriminant analysis would allow continuing education administrators to determine a number of market-related f a c t o r s . These factors would include the vast array of marketing information a v a i l a b l e i n a demographic, a t t i t u d e , or some other form. This would allow the administrator to develop a p a r t i c i p a n t p r o f i l e which i n turn would aid i n the use of a v a l i d marketing mix. In conclusion, administrators would acquire information leading to a more systematized method of course development, determining course p r i c e s , l o c a t i o n of presentation and promotional techniques. 148 SUMMARY Chapter V had three primary objectives: (1) to describe the p a r t i c i p a n t s attending p r o f e s s i o n a l education non-credit courses during the Centre for Continuing Education summer session; (2) to v a l i d a t e the threshold p r i c i n g ' s t h e o r e t i c a l framework r e l a t i v e to p u b l i c sector services (education courses), and (3) to determine i f three s t a t i s t i c a l l y s i g n i f i c a n t market segments (high, average, low) could be derived from two homogeneous markets (upper bound and lower bound p r i c e thresholds), and that the segmented markets p o t e n t i a l l y aid continuing education administrators i n determining a marketing strategy. The p a r t i c i p a n t d e s c r i p t i o n included forty-three v a r i a b l e s covering socio-economic, a t t i t u d e and p a r t i c i p a t i o n f a c t o r s . P r i o r to t h i s study, p r i c e threshold studies and theory b u i l d i n g r e l a t e d s o l e l y to goods (not services) from the p r i v a t e industry sector. This study attempted to advance the analysis and test the theory r e l a t i v e to services and the public sector of the economy. It survived the transference with s t a t i s t i c a l ease. The outgrowth of market segments derived from the p a r t i c i p a n t s ' p r i c i n g a t t i t u d e s adequately substantiated s t a t i s t i c a l l y d i f f e r e n t market c l a s s i f i c a t i o n s (high, average, low) within both upper and lower p r i c e boundaries; however, the segments' marketing s i g n i f i c a n c e proved to be le s s valuable. A d e s c r i p t i o n of the two o v e r a l l markets (high and average) was presented to give a socio-economic and p a r t i c i p a n t r e a c t i o n overview to these segments. 149 Marketing implementation of threshold p r i c i n g theory and p a r t i c i p a n t determined market segments developed through multiple discriminant analysis was explored. I t was clear that threshold p r i c e considerations opened a vast array of continuing education marketing s t r a t e g i e s . The p a r t i c i p a n t determined p r i c e segmentations were not as successful. The marketing implementations were clear but i t was suggested that other forms of market segmentation be considered, although the use of a multiple discriminant technique to analyze these segments would s t i l l remain an appropriate s t a t i s t i c a l t o o l . 150 CHAPTER VI SUMMARY AND CONCLUSIONS INTRODUCTION This chapter draws together the previous f i v e chapters through a summary of the presented material. Conclusions derived from the findings and hypotheses follow the summary. Implications with respect to the marketing management needs of continuing education administrators as these needs r e l a t e to threshold p r i c i n g , market segmentation and the marketing mix complete the chapter. SUMMARY Continuing education administrators may be compared with t h e i r marketing management counterparts i n business and industry. Both are faced with market i d e n t i f i c a t i o n and s a t i s f a c t i o n problems. Both must suc c e s s f u l l y compete for a portion of the consumer's budget i n order to remain v i a b l e as service-producing i n s t i t u t i o n s . To resolve these marketing problems, continuing education administrators must present courses to the market at the proper time, i n the proper l o c a t i o n , with an adequate amount of p u b l i c i t y , and with an acceptable p r i c e . Although four factors within the marketing mix (product, place, promotion and price) bear equal weight, the main focus of t h i s project has been with p r i c e . Continuing educators must look 151 beyond the "backward co s t i n g " approach to p r i c i n g and begin to adopt a marketing concept framework. That i s , they must t r y to f i n d out what consumers are w i l l i n g to pay and then determine i f that p r i c e covers both f i x e d and v a r i a b l e costs. Several p r i c i n g methods, including two with a t h e o r e t i c a l foundation (economic and threshold) and one with a marketing management foundation, were reviewed. Because of i t s p o t e n t i a l l y broad a p p l i c a b i l i t y to the marketing of continuing education services, threshold p r i c i n g was used as the basis of t h i s study. The general problem was to determine that threshold p r i c i n g not only existed f o r continuing education courses, but was applicable to the a c t u a l administrative decision-making structure. A research problem was defined: "do p r i c e thresholds a c t u a l l y occur around a 'standard' p r i c e f or continuing education courses?" The research design for t h i s study was c l a s s i f i e d by Green and T u l l as an exploratory design combined with a d e s c r i p t i v e design. I t was considered exploratory because the r e s u l t s l e d to "more precise formulation of problems, including the i d e n t i f i c a t i o n of relevant v a r i a b l e s and the formulation of new hypotheses", (pp. 73-4) I t was considered d e s c r i p t i v e because the study was involved i n "the d e s c r i p t i o n of the extent of ass o c i a t i o n between two or more v a r i a b l e s " , (p. 74) whereby these associations became useful for p r e d i c t i v e and speculative purposes. Based on a review of the l i t e r a t u r e and discussions with several continuing educators, i t was decided to conduct three separate studies — e a c h b u i l d i n g upon the other. The f i r s t two studies were formulated 152 using exploratory hypotheses developed from the l i t e r a t u r e review. The t h i r d study was framed i n research hypotheses and attempted to integrate the t h e o r e t i c a l foundations of threshold p r i c i n g with the use of market segmentation a n a l y s i s . The f i r s t study analyzed the p r i c e d e c i s i o n model used i n the U n i v e r s i t y of B r i t i s h Columbia Centre for Continuing Education to deter-mine i f t h e i r p r i c i n g model f i t into a generalized three-part p r i c e strategy paradigm. The t h i r d p r i c e strategy, or the combined marketing and backward costing strategy, was used. The study also analyzed consumer reaction to t h i s p r i c i n g strategy and found that l i t t l e or no adverse e f f e c t on enrolment could be detected. I t was determined through the use of multiple regression and p a r t i a l c o r r e l a t i o n s t a t i s t i c a l techniques that course length played a major negative r o l e i n deterring enrolment. Within the structure of threshold p r i c e theory, i t was therefore suggested that the Centre's p r i c i n g strategy produced p a r t i c i p a n t perceived " f a i r " or "acceptable" p r i c e s and that these p r i c e s did not approach any upper or lower boundary. The second, or p i l o t study, was developed to answer both administra-t i v e and a n a l y t i c a l problems as they r e l a t e d to the major study. Administratively, i t was necessary to determine the various d i s t r i b u t i o n , a c q u i s i t i o n and analysis problems that must be overcome. A n a l y t i c a l l y , i t was necessary to determine with various exploratory hypotheses, the t h e o r e t i c a l framework presented through threshold p r i c i n g . It was also necessary to determine i f the so-called general p a r t i c i p a n t market was 153 the same as or d i f f e r e n t from the p r o f e s s i o n a l p a r t i c i p a n t market. They proved to be rather d i s t i n c t markets, and i t was decided to study the p r o f e s s i o n a l rather than the general market i n the major study. The t h i r d study was the culmination of the previous two studies and used research rather than exploratory hypotheses. I t was determined that p r o f e s s i o n a l continuing education courses r e a d i l y followed the theory of threshold p r i c i n g . S i g n i f i c a n c e tests were generally confirmed for a v a r i e t y of research hypotheses. P a r t i c i p a n t derived pricing-based market segmentation tests using a multiple discriminant technique enabled the discernment of three s t a t i s t i c a l l y separate markets (high-average-low) for both the upper and lower p r i c e boundaries. When the two high, two average and two low scores were combined to produce an o v e r a l l high (or "top d o l l a r " ) market, average market and low market, the f i r s t two produced i d e n t i f i a b l y uniform e n t i t i e s , but the low o v e r a l l market was not uniformly c l a s s i f i e d . Although the segmented markets were s t a t i s t i c a l l y acceptable, an overlap of cases c l a s s i f i e d into the average segment did not allow adequate data formulation for marketing decisions. I t was suggested that the use of m u l t i p l e discriminant a n a l y s i s provided more than enough data for a wide range of marketing decisions, but that such decisions and data formulation should be developed using other forms of p a r t i c i p a t i o n segmentation. In conclusion, the t h i r d study c l e a r l y indicated that threshold p r i c i n g was applicable and workable as a marketing mix technique for continuing education administrators. 154 CONCLUSIONS The presentation of conclusions follows the hypotheses presented i n each chapter. Inasmuch as the hypotheses were divided into exploratory and research, the conclusions follow the same d i v i s i o n . Exploratory Hypotheses The Un i v e r s i t y of B r i t i s h Columbia Centre f o r Continuing Education's p r i c i n g strategy for courses coincided with i t s own p r i c i n g philosophy (Hypothesis 3.1) as w e l l as the p r i c i n g a t t i t u d e s generally expressed within the f i e l d of adult education (Hypothesis 3.2). P a r t i c i p a n t decision-making concerning attendance indicated that length of course, not p r i c e , s i g n i f i c a n t l y a f f e c t e d p o t e n t i a l attendance i n a negative way. (Hypothesis 3.3) The existence of upper and lower bound p r i c e thresholds f o r both general and professional course p a r t i c i p a n t s was c l e a r l y confirmed f o r the l a t t e r , although somewhat l e s s c l e a r l y f o r the former. The same outcome occurred for the p r i c e and imputed q u a l i t y concept. (Hypotheses 4.1, 4.2) Continuing education p a r t i c i p a n t s had a high propensity toward p a r t i c i p a t i o n i n continuing education and community organizations. The general p a r t i c i p a n t s were more involved with educational p a r t i c i p a t i o n , the professional p a r t i c i p a n t s with community p a r t i c i p a t i o n . (Hypotheses 4.3, 4.4) 155 Continuing education p a r t i c i p a n t s perceived themselves as having a good self-image concerning t h e i r a b i l i t i e s to discriminate among course o f f e r i n g s , and were consistent when judging the value of courses offered by other educational i n s t i t u t i o n s . (Hypotheses 4.5, 4.6) They also had a high regard for continuing education i t s e l f . (Hypothesis 4,8) Continuing education p a r t i c i p a n t s did not comparison shop for a l t e r n a t i v e courses given by other educational i n s t i t u t i o n s . (Hypothesis 4.7) This f i n d i n g i s probably r e l a t e d to the o v e r a l l superior image of the U n i v e r s i t y of B r i t i s h Columbia as an educational i n s t i t u t i o n . F i n a l l y , i t was determined that general and pro f e s s i o n a l course p a r t i c i p a n t s represented two d i s t i n c t markets and should be studied separately. (Hypothesis 4.9) Research Hypotheses S t a t i s t i c a l l y s i g n i f i c a n t differences occurred between p a r t i c i p a n t -designated mean upper and lower bound p r i c e s and the mean course p r i c e s . (Hypotheses 5.1, 5.2) This observation confirmed that p r i c e thresholds do e x i s t for pu b l i c sector continuing education se r v i c e s . That the high and low p r i c e thresholds s i g n i f i c a n t l y and p o s i t i v e l y correlated with the course p r i c e merely gave further evidence f o r the existence of threshold. (Hypothesis 5.7) The concept of p r i c e and imputed q u a l i t y was amply exhibited (Hypothesis 5.3) and disproved a commonly-held notion that p a r t i c i p a n t s want free programs. 156 P a r t i c i p a n t s ' desire to search for and become aware of a l t e r n a t i v e courses provided by other educational i n s t i t u t i o n s s i g n i f i c a n t l y affected th e i r s elf-perceived a b i l i t y to judge a competing course and predict a course fee. (Hypothesis 5.A) This may be interpreted to mean that consumer self-confidence r e l a t i v e to shopping behaviour r i s e s when search i s conducted. Participants showed a high propensity f o r both educational p a r t i c i p a t i o n and community organization p a r t i c i p a t i o n . This point was re-confirmed with t h e i r highly favourable a t t i t u d e s toward continuing education. (Hypothesis 5.5) Various "wealth" factors correlated s i g n i f i c a n t l y and p o s i t i v e l y with the p a r t i c i p a n t s ' choice of upper and lower bound p r i c e s . Employability status (Hypothesis 6a) and Blishen scores (Hypothesis 6b) were the strongest c o r r e l a t e s , followed by p a r t i c i p a n t income (Hypothesis 6c) and the f a c t that p a r t i c i p a n t s had t h e i r fees paid by another person or organization. (Hypothesis 6d) It was further suggested that "commitment to continuing education" factors would have a s i g n i f i c a n t and p o s i t i v e e f f e c t on the p a r t i c i p a n t s ' choice of upper and lower bound thresholds. Total hours devoted to continuing education, (Hypothesis 6e) economic need score, (Hypothesis 6f) and place of residence were s i g n i f i c a n t f a c t o r s . (Hypothesis 6g) Personal need score, (Hypothesis 6h) and a t t i t u d e toward continuing education (Hypothesis 6i) were not s i g n i f i c a n t c o r r e l a t e s . Negative factors were also presented r e l a t i v e to t h e i r e f f e c t on the upper bound p r i c e . A t t i t u d e toward high schools, community centres and private profit-making schools s i g n i f i c a n t l y and negatively affected 157 p a r t i c i p a n t s ' high, p r i c e designation. (Hypothesis 5.8a) Pre-judgement a b i l i t y (Hypothesis 5.8b) and a b i l i t y to pr e d i c t a course fee, (Hypothesis 5.8c) but not a b i l i t y to judge a competing course, (Hypothesis 5.8d) also had negative e f f e c t s . The market segmentation process divided the upper and lower homogeneous boundaries into three s t a t i s t i c a l l y separate sub-markets (high-average-low). (Hypotheses 5.10, 5.11) When the d i v i s i o n and reformulation took place to determine i f there were three separate and definable markets c a l l e d the "top d o l l a r " (high) market, average market and low market, the segmentation process adequately i d e n t i f i e d the f i r s t two markets (Hypotheses 5.12a, 5.12b) but not the low market. (Hypothesis 5.12c) Unfortunately, the value of t h i s s p e c i f i c segmentation process for marketing decision-making was of l e s s value than the segmentation process i t s e l f . IMPLICATIONS There were three major perspectives derived from t h i s study within which continuing education administrators may develop, s e l e c t and evaluate marketing p r i c e s t r a t e g i e s . These perspectives and t h e i r p o t e n t i a l e f f e c t on professional non-credit course p r i c i n g are discussed i n t h i s section. 1. Continuing education courses as "shopping goods" Throughout the study i t became cl e a r that continuing education non-credit professional and, to the same extent, general courses could be c l a s s i f i e d as "shopping goods". The courses represented t h i s marketing 158 category for four reasons: (1) the p a r t i c i p a n t s d e f i n i t e l y lacked " f u l l knowledge of pertinent product features"; (Stanton and Sommers, p. 147) (2) there were few, i f any, bases f o r p r i c e comparison; (3) once the par t i c i p a n t s f e l t that they had found the r i g h t course, they were not too worried about the p r i c e , provided i t was reasonable and f e l l within some p a r t i c i p a n t defined threshold, and (4) the importance of the r e t a i l e r (university) and i t s image were very important. The marketing p r i c e implications r e l a t e d to the shopping goods c l a s s i f i c a t i o n are considerable. Because there were few bases for comparison, that i s , l i t t l e or no d i r e c t competition, and because the par t i c i p a n t s appeared generally incapable of acquiring f u l l knowledge about comparative course c h a r a c t e r i s t i c s , once they found the " r i g h t course" there was a good chance that the course was purchased. In both marketing and economic terms t h i s means that the demand for the service tends to be i n e l a s t i c and that the p r i c e of any p a r t i c u l a r course could probably be s i g n i f i c a n t l y r a i s e d without a corresponding decrease i n enrolment. The value of the u n i v e r s i t y ' s image i s considerable f o r th i s "good's" c l a s s i f i c a t i o n . Since the comparison procedure was d i f f i c u l t , p a r t i c i p a n t s had a tendency to look for best approximations when deciding on value to be received. The perceived q u a l i t y of the i n s t i t u t i o n was a strong influence on the shoppers' perception of the course's value. Given the above, the continuing education administrator should expect that "trading on" an i n s t i t u t i o n ' s name could allow f o r course p r i c e increases without a s i g n i f i c a n t enrolment l o s s , at l e a s t f o r p a r t i c i p a n t s already f a m i l i a r with the i n s t i t u t i o n . 159 The question then becomes: "Should the U n i v e r s i t y of B r i t i s h Columbia Centre for Continuing Education administrators take advantage of the shopping goods category assumptions?" The response to questions concerning p a r t i c i p a n t s ' i n a b i l i t y to make c e r t a i n market judgements, th e i r lack of search for and awareness of competitive i n s t i t u t i o n s , and t h e i r dependency on the "image" of the U n i v e r s i t y of B r i t i s h Columbia weigh heavily i n the Centre's favour. C l e a r l y , i t i s i n a dominant p r i c i n g p o s i t i o n . The general demand for the Centre's services i s rather i n e l a s t i c and the p a r t i c i p a n t s perceived no v i a b l e competition. Although the Centre could probably r a i s e i t s course p r i c e s sub-s t a n t i a l l y without a corresponding enrolment decrease, i t remains to be determined whether the shopping goods c l a s s i f i c a t i o n i s applicable to other forms of continuing education offered by other u n i v e r s i t i e s , community colleges, high school adult programs, community centres, and proprietary schools. I t could be that the Centre i s i n a unique marketing p o s i t i o n , not generalizable to other i n s t i t u t i o n s o f f e r i n g continuing education. 2. The existence of threshold p r i c e s i n continuing education A u n i l a t e r a l p r i c i n g strategy that depends s o l e l y on a backward costing approach to course p r i c e s has two major f a u l t s : (1) i t may create a p r i c i n g schedule that f a l l s out of a consumer acceptable p r i c e threshold, and (2) i t may not allow the i n s t i t u t i o n to gain the highest possible revenue from courses. By considering that the p r i c e of a course i s not j u s t a cost for the consumer, but also a "cue" as to the course's value, then a l t e r n a t i v e consumer-oriented p r i c i n g strategies which are not so mechanical as formula-based strategies could be considered. 160 The use o f d e f i n a b l e p r i c e l i m i t s f o r s p e c i f i c c o u r s e s o r groups o f r e l a t e d c o u r s e s p r o v i d e s an u n d e r s t a n d i n g o f consumer p r i c i n g b e h a v i o u r t h a t has w i d e r b o u n d a r i e s and t h e r e f o r e g r e a t e r p o t e n t i a l f o r m a r k e t i n g p r i c e d e c i s i o n s . The v a r i a t i o n s between t h e upper bound mean and l o w e r bound mean p r i c e s c h e d u l e s , when t h e y were compared w i t h t h e mean c o u r s e p r i c e s c h e d u l e , c l e a r l y i n d i c a t e d t h a t t h e C e n t r e had a d e f i n i t e o p p o r t u n i t y to change a number o f c o u r s e p r i c e s i f t h e y w i s h e d . However, w i t h t h e i r f o r m u l a - b a s e d f e e s t r u c t u r e most C e n t r e a d m i n i s t r a t o r s were u n a b l e t o know how t h e m a j o r i t y o f p a r t i c i p a n t s would r e a c t t o c o u r s e p r i c e changes ( p a r t i c u l a r l y i n c r e a s e s ) . T h e i r d e c i s i o n f l e x i b i l i t y was r e d u c e d and, as a consequence, t h e i r m a r k e t i n g e f f i c i e n c y was r e d u c e d . A l t h o u g h p r i c e t h r e s h o l d s were s t a t i s t i c a l l y d e f i n a b l e and a p r i c e and imputed q u a l i t y f a c t o r a t t r i b u t e d t o t h e C e n t r e ' s e d u c a t i o n a l o f f e r i n g s , i t i s n o t known i f t h i s p r i c i n g t h e o r y i s g e n e r a l i z e d t h r o u g h o u t c o n t i n u i n g e d u c a t i o n . The g e n e r a l a p p l i c a b i l i t y o f t h r e s h o l d p r i c i n g i n e d u c a t i o n w o u l d need to be examined by r e - t e s t i n g t h e p o s i t i v e and n e g a t i v e p a r t i c i p a n t f a c t o r s r e l a t e d t o t h e upper bound p r i c e t h r e s h o l d as w e l l as t h e v a r i a t i o n s between t h e t h r e s h o l d bounds and c o u r s e means. 3. The use o f m a r k e t s e g m e n t a t i o n T h r e s h o l d p r i c e c o n s i d e r a t i o n s and goods c l a s s i f i c a t i o n p aradigms a r e adequate frameworks f o r p r i c i n g s t r a t e g y ; however, t h e key m a r k e t i n g q u e s t i o n r e m a i n s : "Who a r e t h e consumers?" o r , i n t h e c a s e o f c o n t i n u i n g e d u c a tion;: "Who a r e t h e p a r t i c i p a n t s ? " 161 Market segmentation increases the awareness of the continuing education administrators r e l a t i v e to heterogeneous markets faced by th e i r i n s t i t u t i o n . The e f f i c i e n t and e f f e c t i v e use of threshold p r i c i n g methods wit h i n a goods c l a s s i f i c a t i o n can only be attained i f administrators understand who the p a r t i c i p a n t s are* when they would l i k e l y purchase the service, and why and where they would purchase the service. Unfortunately, any large organization that presents a v a r i e t y of goods or services to the public cannot assume that the market i s homogeneous. Various sub-markets must be i d e n t i f i e d f o r a marketing mix to be e f f e c t i v e . One form of market segmentation was i d e n t i f i e d f o r t h i s study. Although the outcome of th i s segmentation process produced s t a t i s t i c a l l y i d e n t i f i a b l e markets, the marking importance of these sub-markets can only be r e a l i z e d when a continuing education administrator acts by developing a marketing mix and evaluating the r e s u l t s r e l a t i v e to the standard procedures used previously. Other forms of market segmentation (demographic, psychological, economic) need to be developed for the Centre as w e l l as other i n s t i t u t i o n a l forms of continuing education. 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Journal of Marketing, V o l . 26 (January, 191621, pp. 57-61. 72. Monroe, Kent. "Buyers' Subjective Perception of P r i c e s . " Journal of Marketing Research, V ol. 10 (February, 1973), pp. 70-80. 73. . "Measuring P r i c e Thresholds by Psychophysics and Latitudes of Acceptance." Journal of Marketing Research, Vol. 8 (November, 1971), pp. 460-464. 74. . "Psychophysics of Pr i c e s : A Reappraisal." Journal of Marketing Research, V o l . 8 (May, 1971), pp. 248-250. 75. Monroe, Kent and Peter LaPlaca. "What are the Benefits of Unit P r i c i n g ? " Journal of Marketing, V ol. 36 (July, 1972), pp. 16-22. 76. Monroe, Kent and M. Venkatesan. "The Concept of P r i c e Limits and Psychophysical Measurement: A Laboratory Experiment." Proceedings, F a l l Conference, American Marketing Association, 1969, pp. 345-351. 77. Morrison, Donald G. "Discriminant A n a l y s i s . " i n Robert Ferber, E d i t o r . Handbook of Marketing Research. New York, N.Y-.: McGraw-Hill Book Company, 1974, pp. 2-442 to 2-458. 78. Olander, Folke. "The Influence of P r i c e on the Consumer's Evaluation of Products and Purchases." Taylor and W i l l s , op. c i t . , pp. 50-69. 79. O v e r a l l , John and James K l e t t . Applied M u l t i v a r i a t e A n a l y s i s . Toronto: McGraw-Hill, 1972. 80. Oxenfeldt, A l f r e d R. "Multi-Stage Approach to P r i c i n g . " Harvard Business Review, (July-August, 1960), pp. 125-133. 81. . P r i c i n g For Marketing Executives. Belmont, C a l i f o r n i a : Wadsworth Publishing Co., 1966. 82. Parker, Donald D. The Marketing Of Consumer Services. Seattle, Washington: Bureau of Business Research, Un i v e r s i t y of Washington, 1960. 83. Parsons, T a l c o t t . "Suggestions for a S o c i o l o g i c a l Approach to the Theory of Organizations." i n Amitai E t z o i n i , E d i t o r . Complex  Organizations. New York: Holt, Rinehart and Winston, Inc., 1962, pp. 35-47. 84. Pessmier, Edgar. "An Experimental Method for Estimating Demand." Journal of Business, V ol. 33 (October, 1960), pp. 373-383. 168 85. Pessmier, Edgar and Richard Teach. " P r i c i n g Experiments, Scaling Consumer Preferences, and Pre d i c t i n g Consumer Behavior." Proceedings, F a l l Conference, American Marketing Association, 1966, pp. 541-557. 86. Peterson, Kenneth. "The Influence of Evaluative Conditions and Pre-Conference Contact On P a r t i c i p a n t s ' Evaluation of a Conference." Unpublished Masters' Thesis, Vancouver: Adult Education Research Centre, Un i v e r s i t y of B r i t i s h Columbia, 1971. 87. Peterson, Robert. "The Price-Perceived Quality Relationship: Experimental Evidence." Journal of Marketing Research, V o l . 7 (November, 1970), pp. 525-528. 88. P r a t t , Robert W. "Consumer Behavior: Some Psychological Aspects." i n Schwartz, E d i t o r . op_. c i t . , pp. 98-136. 89. Rae, V i t h a l a . 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"Product Development." i n Schwartz. op_. c i t . , pp. 163-212. 102. Stoetzel, Jean. "Ps y c h o l o g i c a l / S o c i o l o g i c a l Aspects of P r i c e . " i n Taylor and W i l l s . op_. c i t . , pp. 70-74. 103. T u l l , Donald, R.A. Boring, and M.H. Gonsior. "A Note on the Relationship on P r i c e and Imputed Quality." Journal of  Business, Vol. 37 ( A p r i l , 1964), pp. 186-191. 104. UBC - BMD074, Stepwise Discriminant Analysis. Vancouver, B.C.: University of B r i t i s h Columbia Computing Centre, 1973. 105. Verner, Coolie and Margaret Neyland. "Patterns of Attendance i n Adult Night School Courses." Canadian Education and Research  Digest, Vol. 6 (September, 1966), pp. 230-240. 106. Webster, J.R., Frederick. S o c i a l Aspects of Marketing. Englewood C l i f f s , N.J.: P r e n t i c e - H a l l , Inc., 1974. 107. Wells, William and Leonard LoSciuto. "Direct Observations of Purchasing Behavior." Journal of Marketing Research, V o l . 3 (August, 1966), pp. 227-233. 108. Wentz, Theodore. "Realism i n P r i c i n g A n a l y s i s . " i n Gordon and W i l l s , E d i t o r s . op_. c i t . , pp. 356-369. 109. Wetmore, Wayne C. and Gary Dickinson. "An Economic Approach to the Evaluation of General Interest Adult Education Programs." Unpublished Manuscript, Vancouver, B.C.: Adult Education Research Centre, U n i v e r s i t y of B.C., 1974. 170 INTERVIEWS 1. Blunt, Adrian. Adult Education Research Centre, U n i v e r s i t y of B r i t i s h Columbia, Vancouver, B.C., January 10, 1975. 2. Buttedahl, Knute. Associate D i r e c t o r , Centre for Continuing Education, U n i v e r s i t y of B r i t i s h Columbia, Vancouver, B.C., February 14, 1974. 3. Rusnell, Dale. Adult Education Research Centre, U n i v e r s i t y of B r i t i s h Columbia, Vancouver, B.C., J u l y 4, 1974. 4. Verner, Dr. Coolie. Professor of Adult Education, Adult Education Research Centre, University of B r i t i s h Columbia, Vancouver, B.C., A p r i l 3, 1974. 171 APPENDICES APPENDIX A — Guidelines For Honoraria, Expenses And Fees APPENDIX B — Course Expense Sheet APPENDIX C — P i l o t Study Questionnaire APPENDIX D — Major Study Questionnaire A P P E N D I X A September 1, 1967 MOT FOR PUBLICATION GUIDELINES FOR HONORARIA, EXPENSES AND FEES HONORARIA AND ALLOWABLE EXPENSES Faculty and local off-campus resource people - for programs located on Campus, Vancouver, West Vancouver, North Vancouver, Burnaby, New Westminster and Richmond) -Type of Session Remuneration Expenses 1. Evening Classes $25.00 per even (a) General Courses (b) Professional Courses $22.50 per hour 2. Seminars, Short Courses ng Two or more lectures: $5.00 per evening deducted from remuner-ation and paid by separate expense cheque (a) Single presentation (i.e. one hour plus discussion or panel participation (b) "(a)" plus cont-inued involvement (c) half day involve-ment (d) half day plus con-tinued involvement (e) continuous a l l day involvement $25.00 to $35.00 $35.00 to $50.00 $35.00 to $50.00 $40.00 to $75.00 $100.00 Accommodation: Itemized expenses up to $25.00 per day. Travel: Car mileage at 10c per mile (up to a maximum equivalent to ai r economy fare), economy ai r , train, ferry Visitors: Faculty and non-Faculty - covers outside visitors participating in Vancouver area programs, as well as local people being sent out into Province) -Base remuneration upon seminar and short course rates above, plus additional ( i f required) to compensate for time spent in travelling. NEGOTIABLE. REGISTRATION FEES Minimum for a l l t y p e s of i n s t r u c t i o n - Evening c l a s s e s , Seminars, Short courses, Conferences -NOTE: Cost of materials, meals, e t c . to be added to f e e . MARKERS' REMUNERATION (Minimums) $2 .00 per hour for objective test items. $3.00 per hour for test items which require marker to use professional judgment. CHAIRMEN A. Faculty 0 to $10.00 p e r e v e n i n g (a) General Courses $1.25 per hour of i n s t r u c t i o n (b) Professional Courses $2.50 per hour of i n s t r u c t i o n 0 to $50.00 per day B. Students $7.50 per evening or hal f day $15.00 f o r a f u l l day INVIGILATING I n v i g i l a t i n g examinations $5.00 per hour SATURDAY EMPLOYMENT No "weekend d i f f e r e n t i a l " for Saturday employment. A P P E N D I X B T i t l e : Short ( 'Ourse/Scnilnar Dates : Or Term Classes; Date of F i r s t Meeting Total Hours of Instruction: l o c a t i o n : Supervisor: No. of Sessions: Fee: $ Names of Resource People: Honoraria Budget Travel Expenses P u b l i c i t y P r i n t i n g Advfirt,is.pmejq£&. I'rv; [ ; _ f , J a n i t o r A u d i o V i s u a l Services h Super.vJ.snr ' a Expense &-JLra.vcJL Special Food Services Registration Staff P a y r o l l .-Expenses Other Expenses ( L i s t program materials, xeroxing, nrorpPfHnpc; j p r r . ^ Date Description Requisition $ Contingencies (to cover items not .SI IK-TOTAL predicted above) Mark up Items: Mimeographing Expenses 'Envelopes & Pos t a ge flverhead_$3Q_.pex_.cour.sxii Supcrvisor-Lfi-M^-Fk-u p JPIAL-AaLic i p a Uxd^KxpiULSiis-Anticipated Revenue . <? $ (3 $ G r a n t or 'Subsidy TOTAL Revenue Anticipated BALANCE COMMENTS Date of Submission: Approved: APPEND1X C 1974 CONTINUING EDUCATION PARTICIPATION STUDY U.B.C. ADULT EDUCATION RESEARCH CENTRE '1-4 jL 5-8 _ -11 _ 12-14 _ 15-17 _ | 13-20 _ 21-23 _ 24-26 _ 27-29 _ 30-32 _ 33-35 _ 36-38 39-41 42-44 1. What i s your marital status? S i n g l e _ M a r r l e d _ O t h e r _ (2.) Your Sex? Female^ M a l e _ (3.) Age_ 4. Number of Dependents? (5.) Number of years of formal schooling? |  t occupation?(if unemployed, r e t i r e d , housewife or student, please indie 6. What i s your presen 7. If you are unemployed, r e t i r e d , a housewife, student or otherwise not involved in a job please indicate your most recent occupation? I 8. What i s the distance you normally have to travel to get to each session of the programme you are now attending? miles. 9. In what c i t y do you presently reside? 10. Please indicate the name of the street or avenue where you presently reside? 11. Please indicate the nearest cross-street or avenue where you presently reside?" 12. What i s your t o t a l income for 1973?(notej_ i f you are a dependent, or i f your income was part of.' a combined family unit such as husband and wife, please use the income for the combined family uni t ) : less than $2,000 $2,000 to $3,999 $4,000 to $5,999 $ 6,000 to $ 7,999_ $ 8,000 to $ 9,999 $10,000 to $11,999" $12,000 to $14,999_ $15,000 to $19,999_ $20,000 or greater_ p.3. What was your total net worth on January 1, 1974? (note: this i s defined as t o t a l personal assets minus t o t a l personal l i a b i l i t i e s — i f you are a dependent, or i f your net worth was part of a combined family unit such as a husband and wife, please use the combined family net worth figure): less than $50,000 $ 50,000 to $ 99,000~ $100,000 to $149,000_ $150,000 to $199,000 $200,000 to $249,000"" $250,000 to $299,000" $300,000 to $349,000_ $350,000 to $399,000_ $400,000 or greater THE FOLLOWING QUESTIONS (numbers 14 to 23) REFER TO THE PROGRAMME YOU ARE PRESENTLY ATTENDINC THROUGH THE U.B.C. CONTINUING EDUCATION CENTRE 14. Considering the amount of time and ef f o r t you devote to planning(deciding about) the purchase of various personal goods, please indicate a s p e c i f i c personal good that c l o s e l y equals the amount " of time and effort you devoted to planning whether or not you were going to attend this programme: 15. Please rate the time and e f f o r t devoted to planning(deciding about) the purchase of the item mentioned in Question #14 above r e l a t i v e to the amount of time and e f f o r t you generally devote to the purchase of other personal goods: '* ( c i r c l e only one of the numbers) Considerable More Than The Usual Less Than Usual Amount Usual Very L i t t l e 8 3 1 45-46 47 L6. How would you rate the importance of this programme in s a t i s f y i n g a personal need or needs? Very Above Average Below Important Average Importance Average Unimportant 9 8 7 6 5 4 3 2 1 17.How would you rate the importance of this programme in sa t i s f y i n g an economic or f i n a n c i a l need(s)? Very Above Average Below Important Average Importance Average Unimportant 9 8 7 6 5 4 3 2 1 |l8. Before you started attending thi s programme how would you have rated your a b i l i t y to corre c t l y pre-judge the programme's c h a r a c t e r i s t i c s , that i s , programme content, objectives, q u a l i t y , etc.? Very Good Good Fair Poor Very Poor 9 * 7 6 5 4 3 2 1 48 149 50 19. If a programme l i k e this was offered at the i n s t i t u t i o n s l i s t e d below, how d i f f e r e n t would you expect i t to be? (a) a community college: S i g n i f i c a n t l y Better No Different S i g n i f i c a n t l y Worse 9 8 7 6 5 4 3 2 1 (b) a high school adult education i n s t i t u t i o n : S i g n i f i c a n t l y Better No Different S i g n i f i c a n t l y Worse 9 8 7 6 5 4 3 2 1 51 (c) a community centre: S i g n i f i c a n t l y Better No Different 9 8 7 6 5 4 (d) a private profit-making i n s t i t u t i o n : S i g n i f i c a n t l y Better No Different 9 8 7 6 5 4 S i g n i f i c a n t l y Worse 3 2 1 S i g n i f i c a n t l y Worse 3 2 1 53 54 20. When you were thinking about attending this programme did you attempt to find out i f some other local educational i n s t i t u t i o n offered a similar programme? Yes No If NO, why not? 21. When you were thinking about attending this programme were you actually aware of similar programmes being offered by other l o c a l educational institutions? Yes No If YES, how many i n s t i t u t i o n s were involved? 22. Is some other person, group, i n s t i t u t i o n , etc, paying for a l l or some portion of your programme fee(tutition)? Yes No . If YES, who i s the other party? 23. When you were thinking about attending this programme: (a) above what fe e ( t u t i t i o n ) would you have considered i t too expensive? (b) below what f e e ( t u t i t i o n ) would you have f e l t that i t may have been of poor quality? $_ 24. How would you rate your a b i l i t y to judge the difference between similar types of continuing education programmes that you may be interested in but which are offered by d i f f e r e n t l o c a l educational in s t i t u t i o n s ? Very Good 9 Good 7 Fair 5 Poor 3 Very Poor 2 1 25. How would you rate your a b i l i t y to correctly guess the fee for a continuing education programme that you may be interested in assuming that the programme description did not include the fee? Very Good Good Fair Poor Very Poor 9 8 7 6 5 4 3 2 1 26. "My general attitude toward continuing education could be c l a s s i f i e d as:" Strongly Favorable to Continuing Education Netural 5 Strongly Against Continuing Education 27. Please make an "X" beside only those statement with which you agree: (a (b (c (d (e (f (g (h ( i (j (k (1 (m (n (o (P (q: (r (s (t (u (v (w (x Continuing education i s the answer to unemployment: Continuing education requires too much time and e f f o r t : Adults learn as e a s i l y as childern: The benefits of continuing education are too obscure to J u s t i f y i t : The need for continuing education must exist since there are peoDle who have benefited by Continuing education broadens the mind: Continuing education Increased one's self-confidence: Learning a b i l i t y remains constant throughout one's l i f e t i m e : Continuing education i s Just as important as the education of childern: Adults cannot memorize as ea s i l y as childern: Continuing education never has and never w i l l do anything for me: Continuing education f u l f i l l s personality needs: Continuing education i s unnecessary since one can get a l l the information needed from books: I think the controversy over continuing education i s a l i t t l e exaggerated as to the seriousness of the need: Canada should invest far more money in continuing education The need for continuing education i s greatly exaggerated by those who stand to gain most from i t , l i k e teachers and p o l i t i c i a n s : Continuing education i s fine i f you have the time: Most continuing education programmes are too expensive: We are investing just about the right amount of money in our continuing education programmes; Continuing education courses lack content and waste time on non-essentials: Continuing one's education has become too much of a status symbol: Learning a b i l i t y reaches a peak before middle-age and declines only s l i g h t l y thereafter: Continuing education must be terminated immediately: Continuing education i s just another l i a b i l i t y to the taxpayers: i t : 55-56 57 58-59 60-61 62-63 64 65-66 67-68 69-70 71-72 73-74 75 76 77 78-80 = h A . 3 2-3 4-5 6-7 8-9 28. WE WOULD LIKE TO KNOW ABOUT YOUR RECENT CONTINUING EDUCATION PARTICIPATION ACTIVITIES: INSTRUCTIONS: We would l i k e you to l i s t a l l the continuing education programmes i n which you have participated since JULY 1, 1973. You should include a l l programmes offered by r e l i g i o u s , educational, p o l i t i c a l , community centre, governmental, etc. i n s t i t u t i o n s , as well as any in-service or on-the-job training you have taken through your place of employment. Include any programmes that you are presently attending. Please read the seperate Instructions for each column as represented in TABLE I below: COLUMN 1: write-in the name of the i n s t i t u t i o n - i f you wish to keep this anonymous please do so but continue to f i l l - i n the rest of the columns for the unnamed i n s t i t u t i o n . COLUMN 2: write-in a "G" i f the programme was of general interest, or a "P" i f i t was a professional programme re l a t i n g to your career(present or future). COLUMN 3: enter an "X" i f you completed the programme, or for those programmes you are now attending, you intend to complete — otherwise leave the column blank. COLUMN 4: enter an "X i f you receive no_ reimbursement for the fee (tutition) whatsoever -otherwise leave the column blank(that i s , i f you are p a r t i a l l y ot t o t a l l y reimbursed) COLUMN 5: enter an "X" i f you formally participated in the instruction of the programme -otherwise leave the column blank. COLUMN 6: enter an "X" i f you formally helped i n the planning or development of the programme -otherwise leave the column blank. COLUMN 7: indicate the to t a l number of instruction hours for the programme, TABLE I f 15-16 17-18 19-20 21-22 23-24 25-26 27-28 . 29-30 . . 31-32 _ 33-34 _ 35-36 .INSTITUTIONS Columns: 1 29. WE WOULD LIKE TO KNOW YOUR ORGANIZATIONAL ACTIVITIES AT THIS TIME: INSTRUCTIONS: Please read the d e f i n i t i o n below and follow the - as represented in TABLE II below. instructions for each column DEFINITION: An organization means some active and organized grouping, usually but not necessairly. i n the community or neighborhood of residence, such as a club, lodge, business, p o l i t i c a l , professional, r e l i g i o u s organization, labour union, etc. NOTE: please l i s t only those organizatio ns with which you are presently Involved, COLUMN l i write-in the name of the organization — i f you wish to keep this anonymous please do so but continue to f i l l - i n the rest of the columns for the unnamed organization. COLUMN 2; enter the l e t t e r "L" i f the membership i s in a lo c a l group, or the l e t t e r "N" i f the membership i s in a l o c a l unit of some pr o v i n c i a l , national or international group. COLUMN 3: enter i n this column the mere fact of attendence by an " X " - leave blank i f not attending. COLUMN A: enter in this column the mere fact of fi n a n c i a l contributions, including dues or membership fees by an "X" - leave blank i f you are not making f i n a n c i a l contributions. 37-38 39-40 41-42 43-44 15-46 47-48 49-50 51-52 53 COLUMN 5: enter in this column the mere fact of committee membership with an "X" - leave ; blank i f you are not a committee member. COLUMN 6: enter i n this column the mere fact that you hold an o f f i c e with an "X" - leave blank i f you do not hold an o f f i c e TABLE II ORGANIZATIONS Columns: 1 2 3 4 5 6 54-80 i 3 2-3 4-5 6-7 8-9 10-11 12-13 14-15 16-17 18-19 20-21 22-23 24-25 26-27 28-30 31-33 _ 34-36 _ [37-39 _ 0-80 APPENDIX D 1. What i s your m a r i t a l status? Single Married (2) Your sex? Female Male (3) Age 10. 11. 12. 13. 14. 15. Other Number of dependents? years. (5) Number of years of formal schooling? 6. What i s your present occupation? (If unemployed, r e t i r e d , housewife or student, please i n d i c a t e ) : 7. I f you are unemployed, r e t i r e d , a housewife, student or otherwise not involved i n a job please i n d i c a t e your most recent occupation. 8. What i s the distance you normally have to t r a v e l to get to each sess of the programme r e l a t e d to t h i s study? ___ miles. 9. In what c i t y do you presently reside? What i s your t o t a l income f o r 1974? (Note: I f you are a dependent, or i f your income was part of a combined family u n i t such as husband and wife, please use the income for the combined family u n i t ) : $ Other than the programme r e l a t e d to t h i s study, have you attended any continuing education courses since February 1, 1974? This would i n c l u d e any programme offered by r e l i g i o u s , educational, p o l i t i c a l , community, business, and governmental i n s t i t u t i o n s , as w e l l as any on-the-job or i n - s e r v i c e courses. Yes No Are you presently involved i n o r g a n i z a t i o n a l or community a c t i v i t i e s ? This would include membership or a c t i v i t y r e l a t e d to a club, lodge, or p o l i t i c a l , p r o f e s s i o n a l , r e l i g i o u s , union, etc. organization Yes No The following questions (numbers 13 to 20) r e f e r to the progran r e l a t e d to t h i s study. How would you rate the importance of t h i s programme i n s a t i s f y i n g a personal need or needs? Very Important Above Average 7 Average Importance Below Average 3 Unimportant 1 How would you rate the importance of t h i s programme i n s a t i s f y i n g an economic or f i n a n c i a l need(s)? Very Important Above Average Average Importance Below Average Unimportant 9 8 7 ' 6 5 4 3 2 1 Before you s t a r t e d attending t h i s programme how would you have rated your a b i l i t y to c o r r e c t l y pre-judge the programme's c h a r a c t e r i s t i c s , that i s , programme content, o b j e c t i v e s , q u a l i t y , etc.? Very Good Good F a i r Poor 9 8 7 6 5 4 3 Very Poor 1 16. If a programme l i k e t h i s was offered at the i n s t i t u t i o n s l i s t e d below, how d i f f e r e n t would you expect i t to be? (a) a community c o l l e g e : S i g n i f i c a n t l y Better No D i f f e r e n t S i g n i f i c a n t l y Worse 9 8 7 6 5 4 3 2 1 (b) a high school a d u l t education i n s t i t u t i o n : S i g n i f i c a n t l y Better No D i f f e r e n t S i g n i f i c a n t l y Worse 9 8 7 6 5 4 3 2 1 I - 2 3-4 5-6 — 7-8 — 9-10 I I - 1 2 ~ 13 14-15 16-17 18-19 20-21 22-23 24-25 26-27 28-29 30-31 j'—33 34-35 36-37 38 39-40 41-42 43-47 48 49 50 51 52 17. 18. 19. 20. 21. 22. 23. (c) a community centre: S i g n i f i c a n t l y Better No D i f f e r e n t 9 8 7 6 5 4 (d) a p r i v a t e profit-making I n s t i t u t i o n : S i g n i f i c a n t l y Better 9 8 7 No D i f f e r e n t 5 4 S i g n i f i c a n t l y Worse 3 2 1 S i g n i f i c a n t l y Worse 3 2 - 1 When you were thinking about attending t h i s programme d i d you attempt to f i n d out i f some other l o c a l educational i n s t i t u t e o f f e r e d a s i m i l a r programme? Yes No I f NO, why not? When you were thi n k i n g about attending t h i s programme were you a c t u a l l y aware of s i m i l a r programmes being o f f e r e d by other l o c a l educational i n s t i t u t i o n s ? Yes No. If YES, how many i n s t i t u t i o n s were involved? Is some other person, group, i n s t i t u t i o n , etc. paying for a l l or some port i o n of your programme fee ( t u i t i o n ) ? Yes No . I f YES, who i s the other party? When you were thinking about attending t h i s programme: (a) above what fee ( t u i t i o n ) would you have considered i t too expensive? $ (b) below what fee ( t u i t i o n ) would you have f e l t that i t may have been of poor q u a l i t y ? $ How would you rate your a b i l i t y to judge the d i f f e r e n c e between s i m i l a r types of continuing education programmes that you may be i n t e r e s t e d i n but which are o f f e r e d by d i f f e r e n t l o c a l educational i n s t i t u t i o n s ? Very Good 9 Good 7 F a i r 5 Poor 3 Very Poor 1 How would you rate your a b i l i t y to c o r r e c t l y guess the fee f o r a continuing education programme that you may be i n t e r e s t e d i n assuming that the programme d e s c r i p t i o n d i d not include the fee? Very Good Good F a i r Poor Very Poor 9 8 7 6 5 4 3 2 1 "My general a t t i t u d e toward continuing education could be c l a s s i f i e d as:" Strongly Favorable to Continuing Education Neutral Strongly Against Continuing Education 53 54 55 56 57 58 59 60 61 62 63 64 65-66 67-68 69 70-71 72-73 74 75 76 77 _ 78-80 1 1-2-3 _ 4-5 _ 6-7 _ 8-9 _ 10-11 12-13 14 24. Please make an "X" beside only those statements with which you agree: Continuing education i s the answer to unemployment: Continuing education requires too much time and e f f o r t : Adults l e a r n as e a s i l y as c h i l d r e n : (a) (b) (c) (d) (e) (f) (8) (h) (i) ( j ) (k) (1) ( m ) (n) (o) (P) (q) (r) (u) (v) (w) (x) The b e n e f i t s of continuing education are too obsecure to j u s t i f y i t : The need f o r continuing education must e x i s t since there are people who have benefited by i t : Continuing education broadens the mind: Continuing education increases one's s e l f - c o n f i d e n c e : Learning a b i l i t y remains constant throughout one's l i f e t i m e : Continuing education i s j u s t as important as the education of c h i l d r e n : Adults cannot memorize as e a s i l y as c h i l d r e n : Continuing education never has and never w i l l do anything f o r me: Continuing education f u l f i l l s p e r s o n a l i t y needs: Continuing education i s unnecessary since one can get a l l the information needed from books: I think the controversy over continuing education i s a l i t t l e exaggerated as to the seriousness of the need: B.C. should invest f a r more money i n continuing education: The need f o r continuing education i s g r e a t l y exaggerated by those who stand to gain most from i t , l i k e teachers and p o l i t i c i a n s : Continuing education i s f i n e i f you have the time: Most continuing education programmes are too expensive: _;  continuing education programmes: Continuing education courses lack content and waste time <>•• non-e s s e n t i a l s : Continuing one's education has become too much of a status symbol: Learning a b i l i t y reaches a peak before middle-age and declines only s l i g h t l y t h e r e a f t e r : •> Continuing education must be terminated immediately: Continuing education i s j u s t another l i a b i l i t y to the" taxpayers: 26. WE WOULD LIKE TO KNOW YOUR ORGANIZATIONAL ACTIVITIES AT THIS TIME: INSTRUCTIONS: Please read the d e f i n i t i o n below and follow the i n s t r u c t i o n s f o r each column as represented i n TABLE I I below. DEFINITION: An or g a n i z a t i o n means some a c t i v e and organized grouping, u s u a l l y but not n e c e s s a r i l y i n the community or neighborhood of residence, such as a club, lodge, business, p o l i t i c a l , p r o f e s s i o n a l , r e l i g i o u s o r ganization, labour union, e t c . NOTE: Please l i s t only those organizations with which you are presently involved. COLUMN 1: write i n the name of the organization — i f you wish to keep t h i s anonymous please do so but continue to f i l l i n the r e s t of the columns f o r the unnamed org a n i z a t i o n . COLUMN 2: enter the l e t t e r "L" i f the membership i s i n a l o c a l group, or the l e t t e r "N" i f the membership i s i n a l o c a l unit of some p r o v i n c i a l , n a t i o n a l or i n t e r n a t i o n a l group. COLUMN 3: enter i n t h i s column the mere f a c t of attendance by an "X" -leave blank i f not attending. COLUMN h: enter i n t h i s column the mere f a c t of f i n a n c i a l c o n t r i b u t i o n s , i n c l u d i n g dues or membership fees by an "X" - leave blank i f you are not making f i n a n c i a l c o n t r i b u t i o n s . COLUMN 5: enter i n t h i s column the mere f a c t of committee membership with an "X" - leave blank i f you are not a committee member. COLUMN 6: enter i n t h i s column the mere f a c t that you hold an o f f i c e with an "X" - leave blank i f you do not hold an o f f i c e . TABLE II Columns: ORGANIZATIONS 1 37-38 _ . 39-40 _ . •1-42 _ _ 4- 5-46 ^7_48 _ _ V9-50 _ . 51-52 _ , 53 _ 54 - 80 L-2 6 3-4 5- 6 7-8 _ __ ?-10 Ll-12 _ L3-14 15-16 _ L7-18 _ L9-20 21-22 J3-24 25-26 _ £7-28 £ 9 - 3 0 31-32 33-34 35-36 37-38 39-40 41-42 3-44 5-46 " 7-48 " +9-50 " 31-52 33-54 : 55-56 . 37-58 39-60 £1-80 25. WE WOULD LIKE TO KNOW ABOUT YOUR RECENT CONTINUING EDUCATION PARTICIPATION ACTIVITIES INSTRUCTIONS: We would l i k e you to l i s t a l l the continuing education programmes i n which you have p a r t i c i p a t e d since Feb. 1, 1974. You should include a l l programmes o f f e r e d by r e l i g i o u s , educational, p o l i t i c a l , community centre, governmental, e t c . i n s t i t u t i o n s , as w e l l as any i n - s e r v i c e or on-the-job t r a i n i n g you have taken through your place of employment. Include any programmes that you are presently attending other than the one r e l a t e d to t h i s study. Please read the separate i n s t r u c t i o n s f o r each column as represented i n TABLE I below: COLUMN 1: write i n the name of the i n s t i t u t i o n - i f you wish to keep t h i s anonymous please do so but continue to f i l l i n the r e s t of the columns f o r the unnamed i n s t i t u t i o n . COLUMN 2: wri t e i n a "G" i f the programme was of general i n t e r e s t , or a "P" i f i t was a p r o f e s s i o n a l programme r e l a t i n g to your career (present or f u t u r e ) . COLUMN 3: enter an "X" i f you completed the programme, or f o r those programmes you are now attending, you expect to complete — otherwise leave the column blank. COLUMN 4: enter an "X" i f you receive no reimbursement f o r the fee (tu i t i o n ) , whatsoever - otherwise leave the column blank. COLUMN 5: enter an "X" i f you formally p a r t i c i p a t e d i n the i n s t r u c t i o n of the programme - otherwise leave the column blank. COLUMN 6: enter an "X" i f you formally helped i n the planning or development of the programme - otherwise leave the column blank. COLUMN 7: i n d i c a t e the t o t a l number of i n s t r u c t i o n hours f o r the programme. TABLE I INSTITUTIONS Columns: 1 2 3 4 5 6 7 15-16 17-18 19-20 21-22 23-24 25-26 27-28 29- 30 31-32 33-34 35-36 

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