Written Article Review and Presentation



Graduate School of Business Program: SNHU School of Business Graduate Program Course Title : Marketing Strategies – MKT 500 Instructor: Jeannemarie Thorpe Due Date: Monday, February 16, 2004 Submission Date: Monday, February 16, 2004 Type of Assignment: Written Article Review and Presentation Title of Assignment: Online Marketing & University of Phoenix Student Name: Cevdet KIZIL Student Phone #s: (603) 626 9302 Student E-mail: [email protected] CERTIFICATION OF AUTHORSHIP

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Monday, February 16, 2004


MARKETING STRATEGIES – MKT 500 WRITTEN ARTICLE REVIEW AND PRESENTATION ONLINE MARKETING & UNIVERSITY OF PHOENIX Cevdet KIZIL (Graduate MBA) Southern New Hampshire University Marketing Strategies (MKT500) – Jeannemarie Thorpe February 16, 2004 Manchester, New Hampshire

Written Article Review and Presentation Online Marketing & University of Phoenix

My written article review and presentation will discuss online marketing and how it did help University of Phoenix to attract thousands of students and Apollo Group, the owner of the university to boost profits and increase its stock (Nasdaq: APOL) five hundred percent since January 2000. The history of online academic offerings goes back to 1998-1999 in which just over 100,000 students were enrolled. In 2002-2003 season, the number skyrocketed to 700,000 students while generating more than $3.5 billion in tuition dollars. Thus, some universities realizing the increasing demand trend for online education started to invest. Not all efforts did succeed of course. On the other hand, for-profit institutions (comprising %20 of total online enrollments) like Phoenix, Capella, DeVry and Strayer were victorious. The reason was simple, because they did spend great amounts of money for online marketing, their expenditures going up and up every year. Besides, they had no obligation to serve local and regional communities.

Fully online enrollment market share at degree granting institutions 20% 80% All other enrollments For-profit enrollments

University of Phoenix, headquartered in Arizona, had 63,000 online students in early 2003 which did equal to %45 of 140.000 total online students enrolled by for-profit

institutions. This meant that U. of Phoenix did serve %9 of United State’s fully online students. Today, U. of Phoenix’s growth increase rate is 80 percent, it operates in 31 states and the university has 72,230 students. Its stock (Nasdaq: UOPX) investors did generate millions and the founder, John G. Sperling is now the richest man in Arizona. So how did U. of Phoenix do it? First they did invest and then they did market it well online. University of Phoenix Online Expenditures: 1998 - $8, 1999 - $12, 2000 - $16, 2001 - $46, 2002 - $74. So they said: “It is there!” U. of Phoenix’s marketing slogans are: “One University. Many Ways to Earn Your Degree”, “University for Working Adults” and “University of Phoenix is the nation’s largest university”. Online programs of U. of Phoenix are advertised with different slogans: “Your future is just a few clicks away” and “America’s leading online university”. U. of Phoenix’s target market is clear. U. of Phoenix focuses on individuals who believe in life-long education, who are intellectual and familiar with using the internet. Also, the university mainly focuses on business, technology and global management education, so individuals who want to study these braches are included to the target market of U. of Phoenix. Additionally, adults willing to have their degrees in a short period (e.g. an undergraduate degree in 2-3 years) are aimed. Then, freshmen who are turned away from their original universities, students who are not able to get classes they need at public universities must be noted. Finally, people with families and heavy work loaded jobs which do not provide them flexibility are also considered as a target market by the university.

U. of Phoenix’s online education and marketing efforts are not appreciated by everyone of course. As an example, some say that the online education and marketing practices of U. of Phoenix are harmful because high quality education can not be provided through a for-profit subsidiary. New Jersey Education Association, The American Association of University Professors, American Federation of Teachers are the authorities known to have questioned the quality of programs. Plus, it was noted that only 1.5 percent of 170,000 faculty members of U. of Phoenix were full-time employees. On the opposite side, some disagree on this one and emphasize the benefits of online education and marketing practices by saying: “For-profit subsidiaries is another way of getting sufficient funding to institutions in order to have a successful online program.” Another resource also supports online education and marketing practices: “ The distance learning environment taps into the innovation of technology to offer a flexible and engaging adult learning opportunity. Students engaged in distance learning are able to learn anytime, anywhere, in a collaborative learning community. Online learning promotes the globalization of adult learning by opening the boundaries of learning.” Finally, it is said that because almost all of the institutions providing online education are accredited, it’s not logical to argue that implemented online advertisements are causing non-quality education.

As a result, some favor it and some do not, but it seems that online education and naturally online marketing will be implemented in increasing rates by the universities worldwide. The ones which will efficiently use this key marketing tool are expected to win like U. of Phoenix while others are predicted to continue struggling in the arena of highly competitive education environment.


1 Stokes, Peter J. (2003). Marketing Success: For-profit postsecondary institutions have a competitive advantage when establishing fully online academic offerings. The Greentree Gazette, 32. http://www.eduventures.com/pdf/freesamples/gtreegaz_july2003.pdf 2 Krebs, Arlene & Robinson, Regina. Ready for FOR-PROFIT Education? http://www.convergemag.com http://www.convergemag.com/Publications/CNVGMay00/FeatureForProfit/Featu reForProfit.shtm 3 Land, Denise L. (2002). Experiencing the Online Environment. USDLA Journal (Vol. 16 No.2) http://www.usdla.org http://www.usdla.org/html/journal/FEB02_Issue/article05.html 4 Greenspan, Robyn (2003). Reading, Writing, Pointing-And-Clicking. CyberAtlas http://cyberatlas.internet.com http://cyberatlas.internet.com/markets/education/article/0,,5951_2237481,00.html

5 Kirschner, Ann (2003). Phoenix Rising: Online Learning’s 600-Pound Gorilla Tangos With Textbook Publishers. Publishing Trends http://www.publishingtrends.com http://www.publishingtrends.com/copy/03/0310/0310phoenix.htm 6 Sodders, Lisa M.(2004). Some Give Up On UC, CSUN; Students Pushed To Commercial Schools. The Daily News of Los Angeles, NEWS Pg. N1 Lexis-Nexis Database (Accessed Through Shapiro Library Electronic Resources) http://web.lexis nexis.com/universe/document?_m=9791b642375355a07eb678bb9d76ab04&_doc num=1&wchp=dGLbVtb-zSkVA&_md5=941a242a4d5257859f68011a1d9b0d3b