Budgets and marketing plans

An educational programme may have a very well-articulated concept, and quality assurance procedures in place, but its success depends very much on revenues and financial constraints. As it becomes more and more difficult to secure the financial resources, with adult education institutions having to rely to a larger extent on the money they bring in from sources other than public ones, it has almost become a must to attract more fee-paying students, and to

135 convince employers and other sponsoring bodies to invest. As institutions cannot afford to deliver programmes with negative balances of income, a careful calculation of the budget is needed, as well as successful marketing plans, able to attract clients. In a competitive market, and given the voluntary nature of adults’ participation in educational programmes (especially in gen-eral programmes, where potential participants are not affiliated with the sponsoring organisation), it is important to communicate to various organisa-tions and publics what the programmes are about, to convince them of the importance and usefulness of these topics, and to develop and maintain the credibility that will ensure adequate participation.

Generally, adult educators are reluctant to draw up budgets, considering themselves not competent in this matter. Nevertheless, they need to know the nature of the expenses needed, and that information is provided by a special-ised department of the institution which produces a form for adult educators to fill in, differentiating the types of costs occurred.

There are three main categories of costs for each programme: develop-ment costs, delivery costs, and evaluation costs. To these costs, the general costs of the institution, related to the utilities needed for maintaining the building(s), the transversal costs (marketing, administration and accounting, public relations, library, website and digital infrastructure, overheads, print-ing, and other common services provided) have to be added. Each category includes costs related to the staff (internal and external, not only the teaching staff, but also the IT specialist, administrators, support staff, management and programme planners, etc.), instructional and promotional materials (differen-tiated by type of materials), equipment (for general use, but also special equipment for use in courses, together with other tools), facilities (special services, social/ entertainment areas, library, parking, etc.). Depending on the course format, other direct costs may be added to this list: travel, food, ac-commodation, renting, learning platforms, and the like.

Keyword: Types of costs

Direct and indirect costs: Direct programme costs are funds actually spent to support programme activities (teaching and support staff sala-ries, production and copying of instructional materials, equipment, translations, learning platforms, travel, etc.). Indirect costs are those expenses not attributable to individual programmes but necessary to maintain the programme as a whole (space, utilities, management and administration, insurances, equipment, overheads, design, marketing studies and campaigns, etc.). Sometimes, direct costs can become indi-rect costs, and vice versa, depending on the programme and the facili-ties of the organisation. For instance, if courses are delivered inside the institution, the costs for the rooms are indirect costs, whereas renting out course space in other buildings would be a direct cost. The same can be said about equipment, learning platforms, and so on.

Fixed and variable expenses: Fixed expenses are those items that usual-ly remain stable, regardless of the number of participants or whether the programme is actually held or cancelled (e.g. marketing, develop-ment costs), whereas variable costs are those that depend on the num-ber of participants who sign up for the course (materials, travel, meals, etc.). Development costs are direct costs, covered over a few years pro-gramme operation, not only during the first year. The boundary be-tween these types of costs is also variable regarding staff. For instance, even though staff costs are usually considered fixed expenses, they can become variable expenses if the fee increases with the number of par-ticipants, for example.

Profit. Profit refers to making money. The (long term) overall profita-bility of the organisation is another aspect to be added here.

Return on investment (ROI): ROI describes the profits (or savings) that programme activities generate in relation to the total programme costs. A negative ROI means that the organisation is not making enough of a profit to justify the expenditure required for the pro-gramme. The more positive the ROI percentage, the better it is.

Cost-benefit analysis. The costs of education and training programmes are related to the benefits they produce. These benefits are spelled out in monetary terms to determine the economic viability and efficiency of a programme. The cost side of the equation is often easier to count than the benefits one, as benefits are often difficult to quantify and account for in financial terms (see also Caffarella, 2002, pp. 305–307).

When calculating programme budgets, it is important to differentiate be-tween:

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• programme funding: This depends on the type of institution (for-profit versus non-profit), and its policies and regulations (e.g. whether pro-gramme fees are charged or whether there are organisational subsidies, public funds, sponsorship funds, grants, auxiliary sales and financial promotions, or miscellaneous incomes such as fundraising, royalties, in-kind contributions, etc.).

• the accounting system: costs per unit, per hour, per participant, or costs per travel and subsistence, or the way budget records are kept, how the cash-flow is ensured

• recovery and risk costs (e.g. when a programme has to be cancelled be-cause the minimum number of participants has not been reached, or due to other objective reasons; or when the costs exceed the projected budget, or when revenue is lower than expected). Strategies need to be put in place for reducing costs (e.g. shorten the programme, employ less expen-sive formats and materials, introduce other schemes for supporting par-ticipants’ attendance, reducing the number of staff or facilities, consider-ing subcontractconsider-ing options, etc.), includconsider-ing the option of modifyconsider-ing con-tracts with participants or sponsoring bodies.

Carefully budgeting revenues and expenses is vital for the organisation.

Since many budget items depend very much on the number of participants that will sign up for the programme, a careful financial and marketing strat-egy is to be put in place when determining course fees, payment policies, and special promotions. We need to decide whether to ask for high fees, or require a minimum enrolment figure, whether to offer packaged fees for groups or members of the institution, and the like. All of this depends very much on the participants’ profile, on additional sources that might have been secured, and so on. The marketing strategy has to be designed accord-ingly.

The aim of the marketing strategy, in simple terms, is to make a pro-gramme visible, widely known, and attractive in order to ensure adequate participation. Just as with any other good or commodity that people have to pay for, adult education organisations have to create a need for their ‘prod-uct’: it has to convince consumers of its value, trustworthiness, importance, and usefulness – in other words, convince them to actually purchase it. To create the image of a credible, attractive, and useful product, the marketing campaign has to highlight the success of the programme (stories told by the former participants, for example, have been shown to have the highest im-pact, as they are addressed directly to their peers, to future participants, mak-ing for a credible source of information), but also to be very familiar with the

addressees, their interests, and needs in order to build a message that will match their experiences and desires.

In Chapter 3.4, while listing the various marketing studies for diagnosing needs, we pointed out the approaches for finding out not only about target group needs but also about how these needs are addressed by competitors (e.g. by positioning studies), noticing the solutions they developed to address a similar audience. Such market studies are needed not only to identify a market niche but also to find out how potential clients may be attracted, and thus how parts of the market already occupied may be (re-)claimed. Thus an analysis of the wider context, including one’s competitors, but, more impor-tantly, the potential audience, is ensured by monitoring competitors’ websites and advertising channels, by conducting focus groups or interviews with former and potential participants to find out which messages and advertising channels have an impact on them (i.e. analysing the target audience), by sur-veying databases and sources that provide additional information about the target audience (e.g. its size; people’s educational, social, and professional background; constraints on their attendance; location; special requirements;

attitudes; motivation for enrolling in the programme, affordable costs, etc.), and by approaching individuals and corporate clients.

A good picture of the potential audience and their life contexts allows marketing specialists and programme planners to create a convincing descrip-tion of the product (i.e. one that matches the audience’s needs), to determine where to place and promote the product, and to point out solutions that may help potential participants overcome constraints and barriers to participation (e.g. costs). The ‘four P’s’ – product, price, promotion, and place – are the four key aspects of the marketing mix that need to be sorted out.

The available channels for promoting the programme, as well as the pro-motional materials and strategies, are diverse and well known. The range from brochures, flyers, websites, audio and video spots, newspapers and magazine announcements, postcards, catalogues, posters, e-mails, and the like all the way to more sophisticated instruments like ‘testing’ sessions, storytelling, celebrat-ing success, exhibitions, personal sales, articles, student forums, and so on.

Nowadays, the tools for media communication are becoming more sophisti-cated and widespread (e.g. social media like Facebook, Twitter, etc.), allowing us to keep a better record of their target audience penetration and reach (e.g. by using a special software, we can track our promotional e-mails and find out how many recipients have opened it in the first place, have followed the em-bedded links, or downloaded the brochure).

But for all of the sophistication of today’s promotional channels and strategies, they will not do any good unless we have a convincing product –

139 one that can be communicated simply and in visually appealing ways with the help of designers, graphic artists, and communication experts, who can make the product ‘speak’ to the audience, using fewer words and more po-werful images that emphasise its benefits in an energetic way.

To do so, professional marketing specialists need to be contracted, creat-ing expenses that have to be considered while makcreat-ing the programme budget.

In a competitive consumer market society, however, professional marketing is essential: even if the programme is well designed, addressing educational needs in an admirable way, it might fail to attract the targeted audience unless it is well communicated.

Exercises and tasks

Exercise 1

Try to formulate the didactic approach for one of the programmes presented as examples in Chapter 7.1 (or for another programme you are more familiar with – possibly even a programme you recently attended). Completing the following form (you may add or delete individual aspects, as you see fit) [see also Caffarella, 2002, p. 302, for variations of the exercise]:

Title:

Date and time (you may use a separate column for the estimated time allotted to each learning unit):

Learning objec-tives

Content head-ing

Instructional techniques

Resources and equipment needed

Room(s)/ space ar-rangements

Assessment plan:

Teachers:

Format:

Exercise 2

Suggest two alternative formats for the abovementioned course, and give ar-guments to support your choices.

Exercise 3

Does the form provided for completing the first exercise need to be adapted if we plan a face-to-face course taught on a weekly basis, or a series of monthly conferences in a museum, including the occasion of launching new exhibi-tions? If so, please explain how.

Task

Please create a marketing plan for a course or programme of your choice (de-scribe it briefly), explaining which channels for disseminating information about the course you consider to be most effective for reaching your target audience.