Consumers of Affordable Private Schooling by Enterprising Schools

Consumers of Affordable Private Schools A study of parents in low-income communities in Hyderabad, India November 2010

This study was funded by Gray Matters Capital and undertaken by BGM Policy Innovations Pvt. Ltd., herewith known as ‘Policy Innovations.’ The findings presented in this report are based on the inferences drawn from the observations given the study objectives and limited research scope. Policy Innovations is a public policy and social enterprise advisory firm based in India and its founders can be reached at: naveen@policyinnovations.in or sudarshan@policyinnovations.in Policy Innovations research team: Naveen Mandava, Sandhya Chari, Sharad Baliyan, Aditi Dimri and Sudarshan Gopalan of Policy Innovations. From Gray Matters Capital: Sarayu Natarajan, Molly McMahon and Pradeep Sharma

Table of Contents Executive Summary .......................................................................................................................... 4 What are Affordable Private Schools? ........................................................................................... 11 GMC School Rating tool ................................................................................................................. 15 Objectives of the study ...................................................................................................................18 Methodology .................................................................................................................................... 21 APS parents: School shoppers ....................................................................................................... 23 Understanding the consumer ................................................................................................... 24 Pre‐admission selection vs. Post‐admission review ............................................................... 27 What parameters do parents consider? .................................................................................... 28 Availability of schools ............................................................................................................ 29 Cost of schooling .................................................................................................................... 30 School quality ......................................................................................................................... 34 How do parents select schools? ................................................................................................ 37 Proxies of quality .................................................................................................................... 37 Information sources ............................................................................................................... 39 School visits ............................................................................................................................. 41 Knowledge gaps of APS consumers .......................................................................................... 42 Affordable Private School Ratings ................................................................................................. 43 What parents say about ratings ................................................................................................ 44 Synthesis of study findings ............................................................................................................ 50 APS consumers: myths and realities .......................................................................................... 51 Parental personas ....................................................................................................................... 54 APS market entry............................................................................................................................ 59 Product development: How to develop for the APS consumer ............................................. 60 Positioning: Why the APS consumer should know you ......................................................... 61 Marketing: How you should reach APS consumers ............................................................... 63 Annexures .................................................................................... Error! Bookmark not defined.

Executive Summary

Amidst the global initiatives to improve access to education, a new paradigm has emerged in the schooling system in India – Affordable Private Schools (APS). In a country enjoying robust GDP growth and a consistent increase in disposable income, APS has enabled a rising number of parents to transition from beneficiaries of the government school system to consumers of private schooling services. Private schools, generally associated with higher income communities, have become accessible to lower and lower‐middle income groups as well. Given the size of these income groups, the market for Affordable Private Schools has grown rapidly. The education market for the lower 60% of the population, by income distribution, has been estimated to be worth about $5.2 billion. With such rapid growth, questions about the quality of schooling imparted through APS have been raised. While Affordable Private Schools emerged as a result of unresponsive government schools, quality of APS has yet to be evaluated. Despite this lack of quality assurance, APS parents are active school shoppers. Given this, Gray Matters Capital (GMC) has created a rating system to provide third party information to parents regarding school quality. As a part of this effort, GMC seeks to understand the consumers of Affordable Private Schooling – APS parents. GMC is a charitable arm of Gray Ghost Ventures. One of their focus areas is to co‐create sustainable business models to increase the access and quality of education for the poor in India. In the current study, Affordable Private Schools are defined as self‐ sustaining, private, unsubsidized schools with monthly school fees up to `800 ($18). This study has been undertaken in Hyderabad in the state of Andhra Pradesh. Hyderabad is the sixth largest city in India and has a population of seven million. Recent empirical evidence shows that children from as much as Executive Summary ‐ 4 ‐

65% of households in low‐income areas of Hyderabad attend Affordable Private Schools. A substantial number of Affordable Private Schools have come up in the city in recent years, with estimates pegging this number at around 3000. OBJECTIVES As a part of their wider strategy on engaging with parents, GMC commissioned Policy Innovations to conduct an APS parent market research study focusing on two key questions: I.

What is the consumer behavior of APS parents in choosing private schools?

II.

What is the most meaningful way to engage parents for the purpose of disseminating GMC’s School Ratings? METHODOLOGY

The study was conducted using qualitative Design Research methodology, as well as quantitative survey techniques. Findings suggested that given the high degree of engagement required to understand APS parents, qualitative Design Research methods are better suited for learning about APS consumers. APS PARENTS – SCHOOL SHOPPERS Contrary to common perception, APS parents are not indifferent when it comes to making sound and informed decisions for their children. APS parents, like their better‐off counterparts, look to education as the key to social mobility and higher income. As consumers, these parents place a premium on education, and spend a significant proportion of their total expenditure on education. Nevertheless, given the lack of third party information, it was observed that APS parents rely on social networks as their primary sources of information. Perceptions rooted in social networks build rudimentary local brands for schools. Parents use these brand perceptions to identify appropriate schools within their area of consideration. In contrast to the common perception that parents do not give much importance to differentiating between APS schools, the Policy Innovations research team observed that parents had well defined perceptions about every school in their area.

Executive Summary ‐ 5 ‐

In choosing schools, APS parents make decisions using certain parameters. These parameters can be broken into three key areas presented below: •

Availability of schools o Neighborhood School Density

•

Cost of schooling o Fee transparency o Fee flexibility

•

School quality o Teacher quality o ‘Good’ academics o English and Computers o School reputation: A local brand o Infrastructure

Although measures of school quality are often not immediately discernable, parents seek to measure schools along each of these parameters. Consequently, to measure schools along certain lines, parents resort to proxies. These proxies are often created by parents informally measuring their children in daily activities. For example, parents sometimes determine whether a child is receiving good English education by seeing if the child can read news tickers on television. Thus parents experience a knowledge gap between perceived educational quality, and actual quality of schooling that their child receives. Our insights reveal a twofold knowledge gap: lack of access to credible and accurate information sources, and lack of awareness about other potential methods of evaluating schools. PERSONAS In order to better understand APS parents, our study used Cluster Analysis to create three representative personas. These personas breathe life into abstract consumer types, and help us make sense of their behaviors, attitudes, and goals. Having the personas in mind will make it easier to align goals and develop services for higher uptake by APS parents. These personas, Drivers, Enablers, and Passives, help simplify the myriad attributes associated with APS parents. Drivers Executive Summary ‐ 6 ‐

actively seek out high quality education by engaging with social networks, and considering schools farther away from home with potentially higher fees. Enablers also aspire to send their children to high quality schools, however are more constrained in their means to do so. Passives may have high aspirations, but lack the social networks to gain schooling information. They also lack the level of child engagement required for them to make sense of that schooling information. They are the most resource constrained, and often have to choose the closest, most affordable private school in their locality. RATINGS GMC’s School Ratings can help parents bridge their knowledge gap, and support more informed school choices. The study found that despite the fact that APS parents experienced difficulty in gathering and understanding information about school quality, they had not envisioned a solution in the form of ratings. Furthermore, the concept of ratings was not familiar to them – in any sphere of life. After finding analogous tools that APS parents could relate to, such as student report cards, the research team set out to gather data on what APS parents might find helpful in a rating tool. In order to map action onto this data, the Policy Innovations research team created a framework: ‘Concept ‐ Content ‐ Form ‐ Channel’ (CCFC), to develop a road map for high adoption. The Concept refers to conveying the idea that is the basis of an activity, in this case, a third‐party independent act of comparing schools based on a set of criteria. The next task is developing the set of parameters used to rate schools – the Content. The Form deals with arriving at the most intuitive way of presenting the information to a specific target audience. The Channel aspect delves into the most suitable modes of delivery for reaching the potential users.

Executive Summary ‐ 7 ‐

Exhibit I – The Concept‐Content‐Form‐Channel framework Idea of the information product

Information contained

Concept

Content

Channel

Form Tangible presentation of the information

Delivery vehicles for the product

NEXT STEPS Learnings from GMC ratings as a case study can be extrapolated for the larger group of APS service providers. The earlier findings inform three strategic steps for potential APS market entrants: •

Product Development How to develop for the APS consumer

•

Positioning Why the APS consumer should know you

•

Marketing How you should reach APS consumers

These entrants could be service providers, school chains, private investors, foundations etc. Any market entrant should focus on key aspects of product development, positioning, and marketing to ensure high demand by parents, and thereby high adoption rates amongst schools. Executive Summary ‐ 8 ‐

How to Develop for the Consumer •

Market entrants should be ready to shed assumptions based on other consumer environments, and know that APS consumers may not immediately understand the premise of the product or service being offered.

•

Feature development, resonating with APS parents, is necessary but not sufficient to ensure adoption. Successful adoption will be based on how those features come together to create a user experience – the Form.

Why the APS Consumer should know you •

Market entrants to APS parent market must be cognizant of their end‐ consumer.

Exhibit II – Engaging the End‐Consumers Market Entrants Business to

Business to End‐

Business (B2B)

Consumer (B2E‐C)

Schools

Parents Business to Consumer (B2C)

•

APS services operate on a B2B model with schools, but have parents as the end‐consumer. Parents ultimately drive demand and make decisions about which school services they will consume.

•

Creating a brand with APS parents will guide parents to actively demand schools to employ services from particular service providers. Executive Summary ‐ 9 ‐

This will drive up the market entrant’s demand in the overall APS sector. How you should reach APS Consumers •

Trends are prevalent in the APS parent market. English and computers have become common school characteristics as a result of this phenomenon.

•

Market entrants should create trends for APS parents to adopt their services.

•

New school services should aspire to have similar traction, by gaining adoption from better‐off individuals in the community.

•

Market entrants should reach parents through their children as children have the ability to pre‐approve services for parents.

Executive Summary ‐ 10 ‐

W What are a Afffordaable Privatee Scho ools?

The objective of the United Nations Millennium Development Goal for education is to ensure that all children have access to primary education by 2015. In line with this, a number of government‐driven programs have been launched so that the world’s 1.9 billion children in developing countries gain access to quality schooling. 1 In the midst of these initiatives, a new paradigm in K‐12 schooling services has has emerged over the past decade – Affordable Private Schools. Private schooling, generally associated with wealthy and elite communities, has started tapping into the aspirations of low‐income communities in developing countries. In India, private school markets are developing for the rich and the poor alike. An interesting statistic showcases the extent of this reach. In the United States about 5.9 million children (in the 5‐18 age group) attend private schools.2 By comparison, 13 million children in India (in the reduced age group of 8‐11 years)

are 3,4

schools.

private

Although

Affordable Private Schools are

the

defined as self‐sustaining private

specific prevalence of private

unsubsidized schools with monthly

schooling among the poor

school fees up to ` 800 ($18)

has not been estimated yet, we do know that a significant number of urban poor send their children to these schools. Over 70% of the urban Indian population belongs to the lower and lower‐middle income groups.5 With this demographic as a target market, the Affordable Private Schools sector has experienced rapid growth over the

UNICEF, “Children living in Poverty,” http://www.unicef.org/sowc05/english/poverty.html (accessed September 12, 2010) 2 National Center for Education Statistics “Fast facts,” NCES http://nces.ed.gov/fastfacts/display.asp?id=65 (accessed September 12, 2010) 3 Based on the figures of 200 million in the age group 6‐14, 120 million children enrolled and 24% of children aged 8‐11 are in private unaided schools 4 Desai, S., Dubey, A., Vanneman, R. & Banjeri, R. (2008) Private Schooling in India: A New Educational Landscape. Brookings‐NCAER, India Policy Forum 5 Juxt Consult. “'Demographic' & 'Psychographic' profiling of urban Indian consumers by their SEC segmentation” http://www.slideshare.net/JuxtConsult/snapshot‐juxt‐indian‐ urbanites‐study‐2010 (accessed September 21, 2009).

/What are Affordable Private Schools? ‐ 12 ‐

last two decades.6,7,8 The education market for the lower 60% of the population, by income distribution, has been estimated to be worth about $5.2 billion.9 This growth and transformation of private schooling has been made possible only because school entrepreneurs are catering to the most price‐sensitive of consumers. Affordable Private Schools manifest the quintessential entrepreneurial trait of providing services in line with consumer demand, and value addition at every price point. With more parents from lower income groups willing to pay for what they perceive to be quality schooling services, this sector has realized a sustainable and scalable model in schooling. With such rapid growth, questions about the quality of schooling imparted through Affordable Private Schools have been raised. It has been observed that there is a great degree of variation in the quality,10,11,12 and there is also plenty of scope for improvement. This observation should be understood within the context of a market that caters to parents whose only choice is between Affordable Private Schools and government schools. The government schools in India have been associated with high rates of teacher absenteeism and non‐responsiveness to parental demands. For example, 6

Around 50% of children in urban India and 20% in rural India go to private schools. Karthik Muralidharan The State and the Market in Education Delivery http://www.schoolchoice.in/scnc2009/ppts/Karthik%20Muralidharan.ppt 7 At the rural all‐India level, private school enrolment increased from 16.3% in 2005 to around 21.8% in 2009 — a rise of around 34%. Wilima Wadhwa http://www.livemint.com/2010/01/18203525/Education8217s‐big‐faceoff.html 8 Geeta Gandhi Kingdon in her study mentions that in urban India, 61 per cent of all the increase in total primary school enrolment in the period 1986‐1993 was ‘absorbed’ by private schools Kingdon, G. G. (2005) Private and Public Schooling: The Indian Experience. Paper presented at the Conference, Mobilizing the Private Sector for Public Education, Co‐sponsored by the World Bank, Kennedy School of Government, Harvard University, October 5‐6, 2005 9 Kubzansky, M., Frandano, P., & Karamchandani, A. (2009) Emerging Markets, Emerging Models: Market‐Based Solutions to the Challenges of Global Poverty. Monitor Group 10 Desai, S., Dubey, A., Vanneman, R. & Banjeri, R. (2008) Private Schooling in India: A New Educational Landscape. Brookings‐NCAER, India Policy Forum 11 Tooley J, Dixon P, Shamsan Y, Schagen I. The relative quality and cost‐effectiveness of private and public schools for low‐income families: a case study in a developing country. School Effectiveness and School Improvement 2010, 21(2), 117‐144 12 Kingdon, Geeta, 1996a. “The quality and efficiency of private and public education: a case study of urban India”, Oxford Bulletin of Economics and Statistics, 58.1, 57‐81

/What are Affordable Private Schools? ‐ 13 ‐

government schools have not met parent’s demands for English as the language of instruction (English‐medium education, as it is called in local parlance). In a country enjoying robust GDP growth and a consistent increase in disposable income, a rising number of parents have transitioned from being beneficiaries of the government school system to consumers of private schooling services. In a country enjoying robust GDP

In the current study, Affordable

growth and consistent increase in

Private Schools are defined as self‐

disposable incomes, a rising

sustaining, private, unsubsidized

number of parents have

schools with monthly school fees up

transitioned from being

to `800 ($18). These schools are

beneficiaries of the public

interchangeably referred to as APS

schooling system to consumers of private schooling services.

or private schools in this report. This study has been undertaken in Hyderabad. Hyderabad, in the state of Andhra Pradesh, is the sixth

largest city in India and has a population of seven million.13 One in three residents of Hyderabad belongs to the urban poor.14 Recent empirical evidence shows that children from as many as 65% of households in low‐ income areas of Hyderabad attend Affordable Private Schools.15 A substantial number of Affordable Private Schools have come up in the city in recent years, with estimates pegging this number at around 3000.16 The study sheds light on consumers experiencing the emerging APS phenomenon – an everyday reality for millions of households in India.

http://www.hudahyd.org/ (accessed September 21, 2010) City Development Plan Chapter 5 Urban Poverty http://www.ghmc.gov.in/downloads/cdpdefault.asp 15 Tooley, James, and Dixon, Pauline (2005) Private education is good for the poor: A study of private schools serving the poor in low‐income countries, Washington DC: Cato Institute. 16 Affordable Private Schools in Hyderabad. http://openideo.com/open/how‐might‐we‐ increase‐the‐availability‐of‐affordable‐learning‐tools‐educational‐for‐children‐in‐the‐ developing‐world/gallery/aps‐info.pdf Accessed on September 20 2010 14

/What are Affordable Private Schools? ‐ 14 ‐

GMC School Rating tool

The development of quality assessment measures has not matched the pace of the rapidly growing APS sector. This new sector lacks a healthy flow of information that is crucial to a budding ecosystem. For example, schools are judged by Grade 10 exam (similar to high school graduation exams or standardized tests) pass rates, rather than by understanding learning levels throughout a child’s education. Schools also have limited financial systems and do not regularly report their data. As a result of this information asymmetry, the market lacks industry standards, scope for comparison, and aggregate sector information. Gray Matters Capital (GMC) has thus undertaken development of a school rating system to make information more easily available and the schools’ operations more transparent. GMC is a charitable arm of Gray Ghost Ventures, a social investment company that seeks to invest in visionary people, with an emphasis on microfinance and education. GMC uses philanthropic capital to research and co‐create initiatives with partners in developing countries to build sustainable, replicable business models, for the benefit of underserved populations. One of GMC’s focus areas is to increase the access and quality of primary and secondary education for the poor in India. Rating tools in other sectors allow consumers to compare options across certain standard metrics. School rating is no different; it aims to give parents an opportunity to be more informed consumers of school services. GMC School Rating has the potential to align ecosystem stakeholders around common standards. The GMC School Rating tool objectively examines five key areas: I. II.

Governance and Strategy Learning Environment

III.

Student Academic Achievement

IV.

Parent Engagement

Financial System & Performance

GMC School Rating tool ‐ 16 ‐

In each of the five key areas, the tool uses select information from a variety of sources. The evaluation of Governance, Parent Engagement, and Financial Systems rely on pre‐selected criteria, and use group discussions or in‐depth interviews. Evaluation of Student Achievement and Learning Environment rely on assessments of students and teachers. The GMC School Rating tool will allow APS consumers to compare the quality of one school to that of other schools or industry benchmarks. APS Consumers can also use it to better understand the performance of individual schools. GMC will present the information in a non‐threatening comparative framework that highlights effective practices through a benchmarking process. The most compelling performance benchmark would be the school itself; to compare a school against itself over time would allow for measuring continuous progress. The design and implementation of GMC’s rating system will take into account APS consumers and will be guided by research on how they select schools.

GMC School Rating tool ‐ 17 ‐

Objectives of the study

There have been very few studies which have looked at how low‐ income parents choose schools for their children. There have been even fewer attempts to enable APS parents to make better schooling decisions in the presence of options. As a part of its wider strategy on engaging with parents, GMC commissioned Policy Innovations to conduct an APS parent market research study focusing on two key questions:

What is the consumer behavior of APS parents in choosing private schools?

II.

What is the most meaningful way to engage parents for the purpose of disseminating GMC’s School Ratings?

Based on the scope of these key questions, five areas were outlined to direct the analyses for the qualitative and quantitative phases. A. What are the socio‐economic backgrounds of APS parents? B. How do APS parents choose between school offerings? C. How do APS parents measure learning outcomes of their children? D. How do APS parents engage with their children’s education? E. What is the most meaningful way to use a school rating to engage APS parents?

Objectives of the study ‐ 19 ‐

Information on APS parents and GMC School Ratings is presented in the following five sections: Section heading Methodology

Content Presents the methodology used for learning about APS consumers Describes how the APS parent acts as an active consumer while

choosing schooling services for his or her children

Affordable Private School Ratings Synthesis of study findings APS market entryError! Reference source not found.

Discusses APS parents’ reactions to GMC’s School Rating Presents the synthesis of learnings on APS parents Articulates the next steps that a market entrant should take to engage APS parents

For the study, an APS child was defined on the basis of an annual school fee expenditure of up to `9,600 per year ($216) per child. There are also private aided schools in India that operate under private management with government aid but, we have not classified them as APSs in this study.

Objectives of the study ‐ 20 ‐

Methodology

There are a variety of methods to study and understand consumers, ranging from case studies to field trials. In this study the research team has used both Design Research methods and traditional market surveys. The methodology used to study APS parents has to consider the biases of parents attempting to meet social expectations (perhaps by trying to appear concerned about a child’s education). For example, APS parents do not want to be perceived as fee driven, even if the reality is that their schooling decisions are based on affordability. In addition, education as a consumption service in the APS segment is unique because of the emotional value that parents attach to it. The Policy Innovations research team found that Design Research methods were the most appropriate to understand APS parents. While traditional surveys could be used, they were extremely limited in their ability to capture the depth and breadth of the APS parent market. Researching APS parents requires a high degree of engagement and behavior observation, which basic interviews and survey questionnaires are not able to achieve. Survey questionnaires can provide high level factual information, but only Design Research can tap into behaviors, attitudes, and goals. Of the wide variety of Design Research tools, the following were employed: contextual interviews, proxy experiences, and personas. Design Research has the added advantage of including methods that enable the introduction of a prototype into an environment and gauging reactions to it. These methods proved very useful for learning about parental reaction to school ratings. Personas were developed on the basis of insights from Design Research. Quantitative methods of Cluster Analysis were used to validate the personas. We chose Design Research and Cluster Analysis, based on their fit with and relevance to the scope of the project. The methodology for the study is described in full in Annexure I. The report also seeks to stimulate debate around the methodologies used to study APS consumers, and aims to inspire future application of enriched frameworks to map APS consumer behavior. Methodology ‐ 22 ‐

AP PS parrents: School sho opperrs

Un nderstanding g the consum c mer APS parents A , the consumers of Afffordable Priivate Schools, are mem mbers of th he working class. Theey are, forr instance, domestic workers, auto‐ a ricksh haw driverss, cab driveers, plumbeers, salespeeople at rettail malls, bank b tellers, electriciaans, and cooks at dhab bas (local restaurants) r ). In short, they are th he masses of India aspiiring for greeater social mobility. APS parents A s live in tightlly

knit

comm munities.

These

sociall network ks are formeed becausee their memb bers live in the same neighborho ood, or belon ng to the same caste or villag ge, or share

the

same

occup pation. Theese neighbo orhoods, lo ocally called d ‘mohallass,’ are exten nded living g spaces beyond the four wallls of theirr residents’’ homes. Their T houseeholds frequ uently share commodiities, meals,, water sourrces, applian nces, and the t like. The T social capital in n these com mmunities is usuallyy life experrience; the r richer an in ndividual’s l life experience, and th he greater h his or her m maturity, thee more his o or her opiniions count i in the peer group. In n a societty where social s hieraarchies and d stratificaations are very apparrent and diifficult to breach, b pareents look at a education n as the keey to enablling inter‐g generational social mo obility, and d providing g their chilldren with a ‘better life.’ The top three categories of expend diture for APS houseeholds are, thus, food/groceries, living spacce expenses, and child dren’s educaation (see Exhibit IIII). A snapsshot of daata about APS A paren nts is presented in Exh hibit IV.

/APS paren nts: School s shoppers ‐ 224 ‐

Exhibit III – Detailed household expenditure across categories 5%

13%

Food/ Grocery 4% Clothing/garments

20%

13%

House rent and electricity and water Education of children

Festivals and entertainment and leisure

40%

Exhibit IV – A snapshot of APS parents

80% of mothers are housewives

Only

70% of households have 4 or 5 members

At least

50% of parents admitted

to having any savings; their average yearly savings were `6144 ($137) compared to an average annual expenditure of about `61859 ($1375)

90% of households

have electricity, a toilet, a gas stove, and cable TV

About

95% of parents had some

form of access to a mobile phone

/APS parents: School shoppers ‐ 25 ‐

Given their socioeconomic backgrounds, APS parents are often portrayed as illiterate, ignorant, and indifferent, especially in the context of making sound and informed decisions for their children. Some of the stereotypes that we noted at the beginning of the study were: •

Parents from low‐income communities do not send their children to private schools

•

Parents from low‐income communities do not prioritize expenditure on education

•

APS parents are not highly engaged in their child’s education

•

APS parents are only concerned about primary schooling and employability in the short‐term

•

Parents in low‐income communities are not active consumers of private schooling

•

Most low‐income parents choose any school as long as they can afford the fees and do not differentiate on various parameters of school quality

•

Parents are not looking for information on school quality

•

Parents will not be able to comprehend or act upon packaged information about school quality

The APS Parent Study began with these perceptions and assumptions. Mapping the motivations and behaviors of APS parents led to an understanding of their decision‐making process in choosing or ‘shopping’ for suitable schools.

/APS parents: School shoppers ‐ 26 ‐

Pre-ad dmissio on seleection vs. P Post-ad dmissio on review In n pursuit of desired schooling g outcomess, parents engage in n the follow wing broad stages of deecision‐mak king to choo ose a schoo ol.

Exhibit V – Three e stage scchool asse essment process Selection • Askk peers for info formation on affo fordable schhools in the neighborhood • Gett more info formation aboout these schhools • Shoortlist schhools based on information avaailable (fees, com mmute, etc)

A Admission • Visit 1or 1 2 of the topp schools shortliisted • Negottiate fees • Enroll child in schooll

Review • Assess chiild's progress • Be alert too problems with school quality • Compare with peer groupp decisions

Parents appl P ly differing parameters when cho oosing a new w school veersus when n evaluating g the perforrmance of a current school. s For example, while w selectting a school, the maiin parameteers may be: peer endo orsement of the schoo ol, one‐tim me admissio on charges, and Grad de 10 (stan ndardized test) resultts. However, when a child is alrready enrolled in a paarticular sch hool, paren nts may givee more imp portance to observed leearning ‘asssessments,’ such as thee ability to speak Engliish, take iniitiative in c completing homework,, and obtain n good maarks. They also a consid der the costts of switch hing to ano other schoo ol. In additiion, a paren nt’s opinion n of school p performancce appears t to be tied in n with percceived teach her quality.

/APS paren nts: School s shoppers ‐ 227 ‐

Variations in the decision making process occur because of differing attitudes, education levels, income characteristics, and other contextual factors. Despite this, there are in general a few key parameters that drive the school shopping process. These parameters have been highlighted based on their prevalence and intensity among APS households.

What parameters do parents consider? As consumers, APS parents have well‐defined expectations from schools. Depending on their preferences, parents look to schools to inculcate communication skills and discipline‐related traits and/or provide high value addition in terms of overall employability. The major expectations for children attending school are listed below: •

Improved cognitive abilities

•

Better command over non‐native language, especially English

•

Self‐discipline

•

School graduation or completion of high school

•

Monetizable skills

To better understand these expectations, APS parents were asked open‐ ended questions about parameters they used to select the schools their children currently attend. Specific features like “Teaching quality,” as well as more composite parameters like “Good academics,” received the maximum positive responses. The way parents evaluate schools is akin to the way consumers evaluate services. APS consumers use three key parameters to drive their selection of schools: 1. Availability of schools 2. Cost of schooling 3. School quality

/APS parents: School shoppers ‐ 28 ‐

Exhibit VI – Top parameters for school assessment Parameter of school assessment

Teacher quality

76%

Good academics

64%

English & Computer subjects

53%

Proximity

47%

Reputation

38%

Infrastructure

35%

Fee flexibility

11% 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Percentage of APS parents

Availability of schools Neighborhood school density The choice an APS parent makes is influenced by the density of schools in the neighborhood. Parents’ aspirations motivate them to stretch their wallets in spending on transportation to school. This enables their child to access a good education, in their view. Proof of this is seen in the peri‐urban areas of Hyderabad which have a low density of Affordable Private Schools. In these areas, parents often choose to send their children further away to schools by bus, a relatively expensive form of transportation. Conversely, in areas with a higher density of private schools, parents choose from schools within a 1 km radius and an average travel time of 10 minutes. A variety of neighborhood factors affect the choice of a school. For example, if getting to a school requires crossing a road with heavy traffic, that school will not be considered, given the danger to children. Parents who are highly concerned about schooling are insistent on sending their children to a better area with a school they perceive to be good, even if the school is further away from home.

/APS parents: School shoppers ‐ 29 ‐

Cost of schooling APS parents are extremely price‐sensitive consumers. They consider schools across a spectrum varying from extreme affordability to feature richness. Parents who choose the former, desire the lowest cost private school, whereas parents choosing the latter display an aspiration for the most suitable among various Affordable Private Schools. In terms of schooling services, they associate higher school fees with higher academic quality. During the process of school selection, one of the first filters used to shortlist schools in the neighborhood is the cost of schooling. Once parents are comfortable with a particular price band, and have identified schools that fall within it, they proceed to assess those schools across other parameters. As presented in Exhibit VII, the price band is dependent on, among other things, the grade level their child is joining.

Exhibit VII – School fees vary considerably with Grade level Average annual school fees (in Rupees)

7,000

6,250

6,000 5,000 4,000

3,692

4,024

3,000 2,000 1,000 0 Kindergarten

Primary Grade level

/APS parents: School shoppers ‐ 30 ‐

Secondary

Fee transparency Parents frequently express their concerns about the opacity of different categories of fees charged by schools. Schools are perceived to be seldom transparent in communication of fees other than the basic monthly school fees. Some schools mandate that certain items (e.g. school belts) must be purchased by the parents. The school may have a monopoly on supplying

Exhibit VIII – School monthly fees make up a portion of the total fees 8913

10000

1767

9000 7145

8000 7000

1447

Rupees

6000

1698

5000 4000

572

3429

3000 2000 1000 0 Sundries Term fees School Monthly (Textbooks etc.) fees

Exam fees

Total school fees

Private tuition

Private schooling expenditure

Education expenditure category

these items (e.g. a curriculum book supplied only by the school), thereby enabling it to charge higher prices for them. As seen in Exhibit VIII, ‘school monthly fees’ make up only about 48 % of the total payment made to the school for a single child’s education. Since schools have differing fee categories, this percentage will vary across schools. There can also be wide variation in this percentage depending on the degree of concession afforded to parents, the discount(s) provided to a single household sending more than one child to the same school.

/APS parents: School shoppers ‐ 31 ‐

Apart from the periodic payment that needs to be made to the schools, almost all schools require a ‘donation’ amount at the time of admission. The ‘donation’ amount is a mandatory one‐time payment for the admission of a child into a given school. This was observed to be a common practice across private schools, but it may differ from area to area. The average ‘donation’ amount was observed to be about `2613, which is a significant portion of average monthly household expenditure (`5476) and average monthly household savings (`512). Therefore, this ‘donation’ amount is a significant switching cost. The fee categories that parents might have to spend on to send their child to school include: •

Base fee (APS families, especially those from the lower income groups, complained that this fee is charged even for the two summer months during which the school is closed)

•

Donation / one‐time admission fee

•

Term fee or exam fee (either usually charged three times a year)

•

Annual fee

•

Sundry fees (uniform and books can often only be purchased through the school)

•

Transport costs and facilities fee (for computer lab, library, etc)

Some schools have started announcing an ‘all‐inclusive’ package to the parents, but this was a nascent trend at the time of this study.

Fee flexibility The majority of APS households run on a short budget window with irregular income. In addition, household cash flows may be restricted as a result of economic shocks (such as illness and the resultant expensive treatment required). Considering that APS parents stretch themselves more for education (Exhibit IX), these economic shocks often tend to have a direct impact on education. This acutely affects their ability to pay fees monthly, as is often mandated by schools. APS parents expect empathy and

/APS parents: School shoppers ‐ 32 ‐

flexibility from schools with regard to fee payment. They develop negative views about schools that are inflexible or ‘tight’ in this regard. During the study, parents often spoke about schools that would punish children or send children back home if fees were not paid in time. Parents, therefore, enquire about schools in their neighborhood that charge monthly fees within their budget, the flexibility of these schools with regard to their fee payment schedule, and the extra costs they would have to bear in addition to the monthly fees.

Exhibit IX – APS parents assign a larger share of their expenditure to education 100%

90%

17%

80%

Percentage of sconsidered ample of respective surveys

5% 4% 12%

70% 60%

11% 9% 6%

50%

13%

20%

7% 5%

40%

45%

Transportation and leisure Education Apparel

41%

10% 0% Typical Urban Indian household (Source: Max-NCAER study, 2008)

Typical APS Indian household

/APS parents: School shoppers ‐ 33 ‐

Healthcare

Housing & utilities

30% 20%

Others

Food & Beverages

School quality Teacher quality For most APS parents, a school is best understood through its teachers. Parents interact with schools through meeting with teachers, and they indirectly measure teachers through their child’s learning levels. Parents expect teachers to be qualified, sensitive, authoritative, articulate, and vouched for by students. As a result, parents often seek to learn about the quality of teachers. Considering that parents are not as literate as the teachers, they are unable to assess teachers through direct interaction. In fact, parents often feel intimidated by teachers, a feeling that is sometimes fostered by teachers themselves. Therefore, APS parents gain information about teachers through their children, and other students in their social network. School owners recognize the importance of teacher quality, and view teachers as a school’s primary asset. Nevertheless, schools tend to cut costs when it comes to hiring good teachers – better teachers require higher salaries. Schools that do not invest in retaining their teachers or in teacher qualifications develop a negative reputation over time. This leads to high teacher turnover rates, which implies teacher absence, and little ability to build strong student‐teacher relationships. Low teacher quality and high teacher turnover are factors that may lead parents to decide to exit a particular school.

Good academics ‘Good academics’ is the core of parental desire in school quality. The more educated the parent, the more parameters he or she would use to holistically understand academic quality. In discussing this holistic quality, parents often use the word ‘good.’ For APS parents, ‘academics’ is comprised of both discipline and subject study. Parents expect the school to impart

/APS parents: School shoppers ‐ 34 ‐

certain habits of self discipline and initiative in completing homework, as well as enable academic achievement. While academic achievement is often taken for granted as a parameter in school choice, it is worth a special mention here because one of the perceptions of APS parents is that they may not have a strong focus on academic achievement. Parents citing this as a driver of school selection, shows a mental shift from being satisfied with basic school enrollment, to seeking academic achievement within a particular school. Parents have no real means of assessing this, and use proxies instead.

English and computer subjects APS parents view English communication and computer skill acquisition as a direct contributor to future income. Many parents specifically cited computer facilities and English medium instruction as determinants of school selection. In fact, they see English and computer literacy as a springboard for economic and social mobility. They also mentioned that the presence of computer facilities and computer teaching contributed positively to the school brand image.

School reputation as a local brand In contrast to the common perception that parents do not give much importance to differentiating between APS schools, the research team observed that parents had well‐defined ideas on the image of every school in their area. Schools had a particular reputation in their immediate neighborhood. Schools could possess various kinds of reputations: ‘good for academics’; ‘discipline maintained well’; ‘cost‐effective.’ Interactions with social networks confirm these perceptions, and solidify reputations. Perceptions rooted in social networks build rudimentary local brands for schools.

/APS parents: School shoppers ‐ 35 ‐

The reputation of the school owner (also known as school correspondent or

Perceptions rooted in

the principal) is one of the key parameters

social networks build

driving school brand. The owners are

rudimentary local brands

local brands in themselves, and are

for schools.

gauged in terms of the following: •

Qualified

experienced

–

School leaders are expected to be relatively well‐qualified and have substantial teaching experience, either in another school or as a private tuition teacher. •

Empathetic towards parents – Parents expect APS leaders to empathize with them and understand their constraints, as most of these leaders belong to the same community and are aware of the circumstances in which these parents bring up their children.

•

Strict disciplinarian – The cultivation of self‐discipline in a child is one of the most important expectations of APS parents from private schooling. A school leader who is justifiably strict with their children is appreciated. Having said that, we observed that parents frown upon anybody from schools (principal or teachers) administering corporal punishment. Also, parents expect the school to be proactive in acting on and giving feedback about a child’s absenteeism.

•

Trustworthy – School leaders are expected to have good moral character and be reliable. Mothers with girl children were especially concerned about this parameter for safety reasons.

/APS parents: School shoppers ‐ 36 ‐

Infrastructure Parents show a preference to send their children to schools that convey a sense of stability through fixed infrastructure, the bigger the better. Parents often speak of big schools with a degree of respect. Often, the more crowded the school, the more popular it is deemed to be, notwithstanding a low teacher‐student ratio. Computer infrastructure on school premises (either for teaching or staff purposes) is also seen as a symbol of sophistication, and a step towards fulfilling aspirations. Schools using rented premises convey instability and therefore, this contributes to a negative image. Parents mentioned that instances of such schools shutting down resulted in high switching costs, as transferring their children to a different school involves admission fees, new school uniforms, and ’donations’ charges.

How do parents select schools? Having understood what parameters parents use to make decisions, we aim to understand how they assess schools along those parameters.

Proxies of quality Performance along certain parameters can be seen directly, such as fees, proximity to home, and computer facilities in a school. Other parameters, however, are more difficult to assess. Parents have a difficult time directly perceiving teaching quality, spoken English, computer skills, and ‘good academics.’ In order to understand how schools measure along these lines, parents use proxies that indicate performance. Often, the

/APS parents: School shoppers ‐ 37 ‐

behavior of the child at home permits parents to make certain inferences about what is happening at school.

Exhibit X – Proxies for school selection parameter Parameters for

Ability to

gauging schools Fee flexibility

gauge Yes

‐

Infrastructure

Yes

‐

Reputation

Yes

‐

Close to home

Yes

‐

English +

Partially

Computers

Good academics

Proxies used

•

Read advertisements or posters out loud

•

Read tickers on TV

•

Recite English lessons /poems,

•

Proficient in general knowledge

•

Degree of self‐motivation to do homework

•

Cleanliness demonstrated by child

•

Child academic achievement

•

Tangible items: homework, school diaries and progress reports

Teaching quality

•

Children’s opinions

•

Teacher qualifications and experience

•

Sensitive to child

•

Authoritative – disciplines child

•

Articulate – knows how to communicate in English

•

Teacher turnover

•

Teacher training

•

Child’s academic achievement

Parents use two key proxies to assess child learning (see Exhibit X). The first focuses on behavioral manifestations, such as discipline, the degree of self‐motivation in completing homework, and cleanliness demonstrated by

/APS parents: School shoppers ‐ 38 ‐

the child. The second looks at how the child understands and implements the subject content learnt at school. Parents often use tangible items such as homework, school diaries, and progress reports as methods of regular communication with the schools. We also regularly came across parents who used the child’s ability to read advertisements, posters, and tickers on television to indicate language skills. In fact, children who are able to recite English lessons/poems, or even articulate general knowledge, are regarded as ‘clever’ by neighborhood parents. The development of such skills in children is attributed to the school. Although the existing proxies may not be the ideal way to assess school quality, objectives and constraints drive parents to use them. However, there is ample space to capitalize on parents’ keen desire to become aware of better avenues for assessment.

Information sources Parents get information about parameters of school selection, or proxies for the same through various sources. Exhibit XI shows the main sources of information used by parents. Due to a lack of formal sources of information, parents tend to fall back on feedback provided by students or by their social networks. Parents predominantly (90%) source information from their social networks at ‘one degree of separation,’ such as family, friends, and landlords. About 56% of APS parents surveyed agreed that they would send their child to a school solely based on recommendations from local

About 56% of APS parents

social networks.

surveyed agreed that they would send their child to a

Parents also directly ask students for

school solely based on

opinions about teachers and schools.

recommendations

These opinions are corrected against the

local social networks.

parents’ own perception of whether the child is 'clever,’ ‘dull,’ ‘hard‐working,’ or a

/APS parents: School shoppers ‐ 39 ‐

from

‘shirker.’ To corroborate their own child’s opinion of specific aspects, they question other students who attend the same school. This provides them with a composite image of the school’s quality. In fact, when we spoke to parents beyond the APS community, we found that parents in the middle and higher income categories also exhibit the same behavior. All parents rely significantly on feedback about schools from students. The only other significant source of information is the school itself. Schools disseminate information in the community through brochures, and teachers who are sent out across the neighborhood to talk to parents about the advantages their school offers.

Exhibit XI – Social networks are the main info source

Information Source

Overall %age

Neighborhood students and their parents

90.73

Teachers canvassing

30.94

Information brochure of schools

23.62

Poster/Pamphlet /Graphic formats

17.34

Teachers/ principals they know

15.7

Newspaper

11.51

Meeting teachers/ principal by visiting each schools

9.27

Television

8.82

Radio

0.45

/APS parents: School shoppers ‐ 40 ‐

School visits The key indicators of the extent of school shopping undertaken by APS parents are: the number of schools they consider, and how many they actually visit prior to admission. Parents consider schools for admission when they fulfill their preliminary short‐listing requirements. These are, generally, distance to the school and fee range. For schools which are short‐listed, parents try to obtain more information on factors such as reputation of the school, quality of academics, and teacher quality. School visits are used to assess the infrastructure in the school and negotiate the fee amount and payment terms with the principal. It is observed that about 80% of parents (see Exhibit XII) visit only one school, indicating that a vast majority of parents have already made their choice by the time they visit schools.

Exhibit XII – School visits are at low levels

Schools visited

Schools considered

59%

14%

/APS parents: School shoppers ‐ 41 ‐

Knowledge gaps of APS consumers Our insights reveal a twofold knowledge gap: lack of access to credible and accurate information sources, and lack of awareness about other potential methods of evaluating schools. Parents’ primary sources of information, social networks and children, are biased and unscientific in assessing school quality. Also, the information they receive is a weak proxy of the school quality measures. Nevertheless, children remain the main window of insight into the happenings at school, and therefore, the most important medium to assess a school’s quality. Currently parents are accustomed to, and even satisfied with the information they receive, because they are unable to conceptualize any other option. They make school choices with the existing knowledge gaps and accept these gaps as a feature of their lives.

/APS parents: School shoppers ‐ 42 ‐

Afforrdablee Privvate Scchool Ratin ngs

GMC’s School Ratings can help parents bridge their knowledge gap and support more informed school choices. As mentioned earlier, parents have to resort to proxies for certain measures of school quality ‐ 'Computers + English,' 'Good Academics,' and 'Teaching Quality.' Ratings will provide valuable information on these parameters so that APS consumers no longer have to rely on proxies alone. The provision of information also allows for parents to turn to established measures of school quality, and use benchmarks to compare school performance. GMC’s School Ratings crystallize a demand for quality education, thereby creating a signaling effect to schools. This tight feedback loop will potentially create better accountability of Affordable Private Schools to parents, their paying customers.

What parents say about ratings APS consumers were unfamiliar with the idea of a rating tool. Only the usage of appropriate metaphors helped them understand the concept of the tool, and revealed strong opinions on what they would value in school ratings. In the initial stages of the study, parents were interviewed about school ratings. Because there is no equivalent of a rating model in any sphere of their lives, the idea and the explanation of the tool did not resonate with them. The concept of a third‐party source of independent information to enable comparison between products or services does not exist in their mind‐space. Due to a lack of response, the metaphor of a school report card was used to explain the concept of School Ratings. The research team explained that the school report card was equivalent to a student report card, but instead of comparing students to each other, it would compare schools. This metaphor allowed APS parents to understand the idea of school ratings Affordable Private School Ratings ‐ 44 ‐

and allowed a few key parameters to emerge as priority areas for parents with regard to a school rating tool. The challenges in developing a school rating product are two‐fold: first, create a pioneering product and second, introduce the concept of the product to the target audience. The research team created a framework: ‘Concept ‐ Content ‐ Form ‐ Channel’ (CCFC), to develop a road map for high adoption. The Concept refers to conveying the idea that is the basis of an activity, in this case, a third‐party independent act of comparing schools based on a set of criteria. The next task is developing the set of parameters used to rate schools – the Content. The Form deals with arriving at the most intuitive way of presenting the information to a specific target audience. The Channel aspect delves into the most suitable modes of delivery for reaching the potential users.

Exhibit XIII – The Concept‐Content‐Form‐Channel Idea of the

Information

information

contained

product

Concept

Content

Channel

Form

Delivery vehicles for the product

Affordable Private School Ratings ‐ 45 ‐

Tangible presentation of the information

The concept of school rating In this study, we used the metaphor of school report card to convey the Concept of the School Rating tool. When introducing school ratings, parents argued that there is no value to a rating system that would compare any two schools, as the school with higher fees is bound to have higher quality. This feedback led to modification such that schools in a neighborhood would be compared within a price‐band. A majority of the parents (85%) mentioned that it would be helpful to have a school report card.

Desired content in the rating tool The Content part of the rating tool can be derived on the basis of the parameters discussed in a previous section. APS parents particularly find value with regard to three parameters of a school: the quality of academics (38%), performance of teachers and their teaching quality (31%) and the nature of school facilities (30%). Parents tend to ask for information that they are unable to currently assess. Information on factors such as teacher quality and student strength cannot be gauged by parents using their current abilities or networks. Therefore, they see the potential for third party information on these parameters.

Ways to disseminate the ratings GMC attempts the challenging task of introducing the new concept of sharing local school information on a large scale. This information must be disseminated through a channel such that it reaches every APS parent. To understand what channels parents would be receptive to, the study asked

Affordable Private School Ratings ‐ 46 ‐

APS consumers how they would most prefer to access the ratings (see Exhibit XIV. Unlike other rating systems which are commonly accessed through the web or via SMS, school ratings will have to be disseminated through alternative methods. APS parents cited private tuitions, stationery shops, and school registration forms as preferable channels for receiving third‐party rating information.

Percentagee of APS parents (multiple response)

Exhibit XIV – Existing channels are preferred sources for SRC 80

70 60 42

50 40 30

20 10 0

Preferred sources of information to get SRC

The cost of disseminating the rating information varies based on the channel. If the ratings are to be scalable, costs may eventually have to be shared by the parent. The study asked if parents would be willing to pay for ratings, and more than 96% of parents expressed a willingness to pay. While there is a wide range of amounts parents are willing to pay – from `5 to `150 – the average amount is `30.

Affordable Private School Ratings ‐ 47 ‐

Exhibit XV – Willingness to pay for School ratings

4.04

3.29

16.14 14.95

6.88

27.8 22.87

>= Rs100

Rs 51 ‐ < Rs100

Rs 41 ‐ Rs 50

Rs 31 ‐ Rs 40

Rs 21 ‐ Rs 30

Rs 11 ‐ Rs 20

<= Rs 10

DKCS

The packaging and presentation of ratings This report does not fully address the presentation, or the Form aspect of the School Ratings. However, feedback on initial thoughts on the presentation was collected from parents. These initial findings can feed into further research to finalize how the School Ratings should look, feel, and read. Exploratory discussions with parents revealed noteworthy points: •

Conventional symbols may not work in this setting. o For example, while ‘5 stars’ may represent high school quality, it will also be associated with higher cost/fees.

•

The rating symbol should not be easily replicated to maintain credibility and integrity of the GMC School Rating brand. o A ‘GMC Flag,’ that would symbolize a rated school can be easily recreated and flown by non‐rated schools.

Affordable Private School Ratings ‐ 48 ‐

•

Text‐based co ontent will n not be usefful as most A APS parentts are barely literatee. o Parentts noted thaat they prim marily use t their phonees for voice f features as t they are unaable to read d SMSs.

•

Sig gn‐based co ontent mayy be used but b symbolss adopted must m be relevant to t the pareental mentaal model and the culltural con ntext. o Symbo ols, colors, a and often have religiou us, political,, and social c connotation ns. Inadequ uate testing and researcch in this arrea risks alienating seg gments of APS A consum mers, and hin ndering maass adoption n.

•

No o single com mmon langu uage is used d across Hyd derabad. o A num mber of co olloquial words w are used u to asccribe certain n qualities t o schools. S See Exhibit XVI

Ex xhibit XVII – APS qu ualifiers i in local p parlance

Afffordable Privvate Schooll Ratings ‐ 4 49 ‐

Syntheesis off stud dy find dings

This study began with certain perceptions about APS parents. They were commonly described as apathetic, ignorant, and lacking aspiration. As the study progressed, these perceptions were slowly revealed to be myths. In contrast, APS consumers were found to be driven, discriminating, and active in school shopping. There are various dimensions along which to categorize APS consumers. They vary on the basis of aspirations, constraints, and desire for school features. In order to make all these facets actionable, we developed three personas – Drivers, Enablers, and Passives ‐ to represent APS parents. We can put ourselves in a persona’s shoes to understand their perspectives on private schools and school ratings. In engaging with parents, GMC should use a twofold strategy: − First, understand the consumer. Getting inside the mind of the consumer through the personas is the best way to learn about their needs and, more importantly, aspirations. The market segments that these personas represent are crucial to creating customized messaging that will result in adoption of school ratings. − Second, GMC has to develop a credible brand so that it becomes a household name for its pioneering efforts in rating school.

APS consumers: myths and realities Before grouping APS parents into their personas, we make note of common traits among APS consumers. These dispel the prevalent perceptions of APS parents.

Synthesis of study findings ‐ 51 ‐

Low‐income communities do not send their children to private

schools

9 About 45% of APS parents belong to lower‐income groups, along

with 29% from middle‐income groups and 26% from higher‐ income groups.

Low‐income communities will not prioritize expenditure on

education

9 On an average, households in urban India spend about 9% of

their total expenditure on education. APS parents (who responded to questions on educational expenditure) spend an average of 13%, reflecting their aspirations.

APS parents are not much engaged in their child’s education

9 Most parents (90%) do engage actively with their children, with

varying frequencies.

APS parents are only concerned about primary schooling and

employability in the short‐term

9 APS consumers value schooling, higher education, and skill

development. Completion of schooling is a clear desire and priority. However, this depends on income constraints and parental perceptions about the ability of the child. With an emphasis on schooling, parents are keen on skills that enhance employability. They also seek to save for their children’s higher education.

Parents in low‐income communities are not active consumers

of private schooling

9 APS parents associate each school in their neighborhood with a

particular image and reputation. They compare these characteristics along with fees and teaching quality within their social networks. Thus, they view themselves as consumers, and understand the idea of choice.

Most low‐income parents choose any school as long as they can afford the fees and do not differentiate on various parameters of schooling quality

Synthesis of study findings ‐ 52 ‐

9 APS consumers discriminate to varying degrees with regard to prices. There is a segment for which price is the key parameter; parents in this segment expect fee flexibility. There is also a section of APS parents for whom price is a necessary but not determining factor.

Parents are not looking for information about school quality

9 APS parents rely on students as sources of school information. Since parents are often not able to directly gauge teacher or school quality, they assess these through children. While there are biases inherent to this method, parents do trust children as reliable and credible sources of information.

9 APS parents do not depend on independent third party sources for price and other features of the schooling service, but frequently use immediate social networks to inform their

decisions. Most parents use their social networks to bring the list of considered schools down to a final one or two. In the absence of social networks, we find that parents do consider and visit more schools.

APS parents face social expectations that influence their opinions and actions. In qualitative conversations, parents mentioned low levels of attendance at PTA meetings, and claimed that fee amounts were a key parameter in school selection. In quantitative research, by contrast, parents reported relatively high PTA attendance, and did not cite fees as a strong parameter in choosing a school. This difference arises because parents want to project an image that they are meeting social expectations regarding education. Such social expectations should inform GMC’s parent engagement strategy. APS parents behave as active consumers and are well aware of

APS parents behave as active

their choices. If they were not

consumers and are well aware

active

consumers,

the

about their choices

introduction of a rating tool would

Synthesis of study findings ‐ 53 ‐

require a huge change in mind‐set regarding the ability to exercise choice. Given APS parents behave as consumers and not passive beneficiaries, GMC does not have to change mindsets in order to encourage rating adoption – instead it has to engage in a process of education about the rating tool. We recommend an awareness building phase for APS parents that will bring about awareness of the rating tool, additional parameters for assessing school quality, and how the tool can be used.

Parental personas GMC can develop an effective actionable engagement strategy with parents through the usage of personas. “Personas put a face on to user/market research in a way that turns data and observations [from market research] into usable knowledge”17. The majority of the APS parents can be grouped within three distinct personas: Drivers, Enablers and Passives. In order to bring these personas to life, a representative character was chosen for each. Venkat is a Passive; Anjum, an Enabler; and Ravi, a Driver. These personas breathe life into abstract consumers, and help us make sense of their behaviors, attitudes, and goals. Seeing the world through the eyes of a persona makes it easier to sense Personas breathe life into abstract consumer segments, and help us make sense of their behaviors, attitudes, and goals

what features of a school rating would resonate with them, and what actions they might take to incorporate school rating into their lives. They also help us simulate parental reactions at different stages of adoption of the school rating product. For example, we can ask a question like

Mulder, S., Yaar, Z.: The User Is Always Right: A Practical Guide to Creating and Using Personas for the Web. Page 14. New Riders Press: 2005.

Synthesis of study findings ‐ 54 ‐

‘Would Anjum use this?’ in thinking about feature development. Having the personas in mind will make it easier to align goals and develop services for higher uptake by APS parents. Each of the personas enables us to capture insights related to the needs, aspirations, and behaviors of groups of APS parents. In particular, Drivers 'drive' their children to better schools. They have access to strong social networks, and are the least monetarily constrained. They are relatively well educated – Driver fathers generally have studied up to Grade 10 and work in non‐manual labor jobs, while Driver mothers often have some schooling. They value education in a holistic way. They expect schools to provide English and computer literacy, and to also have good teachers and overall ‘good academics.’ They are willing to travel outside their immediate area for the sake of a better school. Enablers exhibit many of the same qualities as Drivers, but to a lesser degree. They are motivated to engage with their children and push them into good schools ‐ 'enable' them ‐ but often lack the means. On average, they too have had some schooling; however they are more likely to have studied up to Grade 5 or Grade 8. They are somewhat financially constrained and do not venture long distances away for school. They too have strong social networks which they use to gather information about schools. Passives are those who are motivated to send their children to good schools, but are passive about engaging with their children. They are the most monetarily constrained and often have had no schooling at all. Since they are usually migrants – shifting to Hyderabad from other parts of Andhra Pradesh ‐ they lack cohesive social networks. They may have strong aspirations, and get information about schools in different ways. In particular, they visit more schools in person than Drivers and Enablers because they lack social networks to provide them with information about schools.

Synthesis of study findings ‐ 55 ‐

Name: Ravi Persona : Driver

“I have to send my child to school by bus because none of the schools in my area have good academics.”

Ravi and Anu have been living in Hyderabad all their lives. They live in the Old City, where she is a beautician, and he is a factory supervisor. Together, they typically earn about `7500 per month, and each month they spend approximately `1050 on education related expenses. Education related spending constitutes nearly

Ravi’s Personal Statistics: Occupation: Factory Supervisor / 14% of their total expenditure. Anu studied up to Grade 10, and Beautician Ravi, up to Grade 12. They have high aspirations for their Place of Origin: Hyderabad children, Ajay and Veena. They are also regularly asked for advice Household: 4 members in total about private schools in the neighborhood. School Decision Mentality: Ravi’s School shopping characteristics: Aspirations: High 9 Priority parameters: Good academics & Good staff members Degree of Constraint: Low Engagement with Social Network: 9 Above all, Ravi wants the best school possible, whether it is in his immediate locality High or not Number of Schools Considered: Low 9 Regular discussions with neighborhood parents and children Number of Schools Visited: Low Most Important School 9 Meet with teachers to gain information about schools Characteristics: 9 They become information sources themselves after seeking out this information Good academics, good staff members 9 Consider and visit one school – has decided upon the school through social networks Ravi’s School Rating Traction:

Would find a school rating card somewhat helpful

Would look for school’s academic quality, teacher performance and exam results

Would be willing to pay around `31 for the card

Nam me: Anju um Perssona : Enabler E

“Why s should my child d lose a year of f schooling due e to my inability y to pay fees in n time?”

Anjum m and her husbaand Aftab are natives of Hyderab bad. They stay in an u urban area; she is a housewife, a and he runs a sm mall grocery shop. A Aftab typically e earns about `650 00 per month, aand each month they sp pend approximaately `780 on ed ducation‐related expenses. Educaation‐related speending constituttes nearly 13% off their total expenditure. Anjum s tudied up to Graade 5, and her h husband studied d up to G Grade 8. Despitee not having hig gher education l levels themsselves, they havee high aspiration ns for their daug ghter, Noor.

Anjum’s Perrsonal Statisticcs: Occupation ns: Housewife / S Shop Owner Place of Oriigin: Hyderabad d Household:: 6 members in t total School Deciision Mentality y: Aspirations: High

A Anjum’s School l shopping characteristics:

Degree of Constraint: Med dium

9 Priority p parameters: Goo od academics, C Computer facilitiies & English meedium

Engagemen nt with Social N Network:

9 Above alll, Anjum will look for the best s school in her neighborhood. She is unlikely to

Medium‐Hig gh

considerr options beyond d what her sociaal circle chooses..

Number of S Schools Consid dered: Low

9 Relies heeavily on her soccial network for information

Number of S Schools Visited d: Low

9 Considerred one school, and consequenttly, visited one s school prior to admission

Most Imporrtant School Characteristics: Good acad demics,

A Anjum’s School l Rating Tractiion:

English, com mputer facilities

Would fi find a school ratiing card somewh hat helpful

Would v value information on whether th he school is good d for academics

Would b be willing to pay y around `25 for the card

Syn nthesis of studyy findings ‐ 57 ‐

Nam me: Ven nkat Perssona : Passive

“I don’tt have any educcation, but I wo ould like to adm mit my c child into a nea arby English M Medium school””

Venkat an nd his family mig grated to Hyderrabad a few years ago from Ponduru, a town in rural A Andhra Pradesh h. His wife does not work outside th he home, so he s supports his fam mily singlehanded dly through his work as a chai wallah (teaa stall worker). V Venkat typically earns about `5500 per month, and eacch month he speends over `550 o on education

related exxpenses. These exxpenses make u up 11% of his totaal expenditure. While he and his wife received no formall schooling, theyy aspire to send their 8‐yeaar‐old son, Rajesh, to a private s school. V Venkat’s Schoo ol shopping cha aracteristics: 9 Priority p parameters: Eng glish medium in nstruction, Schoo ol reputation & Proximity 9 Above alll, Venkat wantss an English med dium private sch hool that he can afford and is close to h his home 9 His prefeerred school feattures are not rellated to more ho olistic measures of school environm ment and facilitiies. 9 Considerred three schoolls and personallyy visited two before making his final selection V Venkat’s Schoo ol Rating Traction:

Would fi find a school ratiing card helpful

Would v value information on school faciilities and discip pline

Would b be willing to pay y around `20 for the card

Venkat’s Perrsonal Statisticcs: Occupation n: Chai Wallah (tea stall worker) Place of Oriigin: Ponduru Household:: 7 members in t total School Deciision Mentality y: Aspirations: Medium Degree of Constraint: High h Engagemen nt with Social N Network: Low Number of S Schools Consid dered: High Number of S Schools Visited d: High Most Important School Characteristics: Teachin ng quality, reputation, E English medium m,

Syn nthesis of studyy findings ‐ 58 ‐

AP PS maarket entryy

The market for Affordable Private Schools, while informal, may be defined as a sector in itself. Given the demand exhibited earlier in this report, market entrants should have an informed strategy regarding the ways to tap into this market. The earlier findings inform three strategic steps for potential APS market entrants: •

Product Development How to develop for the APS consumer

•

Positioning Why the APS consumer should know you

•

Marketing How you should reach APS consumers

These entrants could be service providers, school chains, private investors, foundations etc. Any market entrant should focus on key relevant aspects of product development, positioning, and marketing to ensure high demand by parents, and thereby high adoption rates amongst schools.

Product development: How to develop for the APS consumer Market entrants should be ready to shed assumptions based on other consumer environments. After testing the rating tool, we found that APS parents did not understand that there could be an objective independent comparison of products or services. Market entrants should note that their service offerings may encounter a similar lack of familiarity in the market. Entrants should test whether APS parents understand the concept behind the particular product or service when embarking on product development. APS market entry ‐ 60 ‐

Market entrants must develop features that resonate with APS consumers. Feature development, however, is necessary but not sufficient to ensure adoption. Successful adoption will be based on how those features come together to create an intuitive user experience. Service prototyping, based on Design The Form should

Research methodology, should be used to

intuitively communicate

engineer the user experience – the Form

what the product provides,

(see page 48). Market entrants should

without need for

develop several prototypes of their product

additional explanation

or service, and conduct tests to determine what will achieve success with this set of

consumers. The Form should intuitively communicate what the product provides, without need for additional explanation. The Form of the product needs to ride on the appropriate Channel for maximizing the coverage of the market. After initial testing, the study found that APS parents have unique ways of accessing information. In particular, SMS and other ‘one‐to‐many’ channels are not a key means of information delivery for APS parents (see page 46). Existing channels of information may find higher traction, and one may have to discover unconventional and non‐formal channels to reach APS parents.

Positioning: Why the APS consumer should know you Education service providers, intending to enter the APS market, should be cognizant of their end‐consumers ‐ APS parents. These parents, along with their children, are the final consumers of education services. Although service providers operate on a business to business (B2B) model with APS market entry ‐ 61 ‐

schools, it is paramount that they make themselves known to their end‐ consumers (B2E‐C). Traction with parents is essential for driving demand for their specific services. This strategy, is similar to the one adopted by Intel Corporation for the ‘Intel inside’ campaign.

Exhibit XVII – Engaging the End‐Consumer Market

Entrants Business to

Business to End‐

Business (B2B)

Consumer (B2E‐C)

Schools

Parents Business to

Consumer (B2C)

Through increased awareness of service provider brands, parents will begin to demand particular services (and service providers) from schools. Evidence of parameters used for school selection suggests that parents are likely to demand education services that operate along parameters they value (see Exhibit VI). GMC in particular, has the opportunity to respond to one of the three dimensions along which parents choose schools. As mentioned, parents look at availability, cost, and quality in school selection. GMC has the potential to engage with parents with regard to school quality. Specifically, evidence from this study suggests that parents ascribe value (a certain willingness to pay) to receiving third party information about school quality (ratings). This makes a case for GMC to brand itself directly for the APS parent market, so that parents demand that the schools they consider be GMC rated. APS market entry ‐ 62 ‐

Marketin ng: How you sh hould reach r A co APS onsumeers Service provviders shou uld ride exiisting trend ds among APS A parentts to effecttively foray into the AP PS market. Market entr M ants can geet a sense o of what pareents value a and how trrends mightt develop by looking g at the graph g below w. We cap ptured parrents’ prioriities for skiill developm ment (see Exhibit E XVIII) by undeerstanding what w they w would choo ose in the evvent of an i ncrease in i income in t their househ hold. We seee that com mputer courrses and co omputer ow wnership, faactors that d drive skill a acquisition and markett employabiility, are a h high priorityy.

E Exhibit XV VIII – Rev velationss about Pa arental aspiration ns

APS mark ket entry ‐ 6 63 ‐

Parents enroll their children in private schools, expecting certain basic educational outcomes. Beyond these, they see development of particular skills as integral to economic mobility. English has taken off as a result of the perceived correlation between high income and English. Recently, parents have adopted computers as a priority, because of the same correlation. We could even say that 'Computers is the new English'. In general, low‐income people emulate their ‘more successful,’ higher income peers. For service providers to successfully market themselves, they must understand these parental trends. Services have to gain traction in social networks to become a trend in the same way as English and computer literacy. APS consumers, like other parents, follow trends adopted by their better‐off peers. Services have to be picked up by these better‐off members of the community so that there is diffusion from them to the larger group of APS parents. In addition, services must be received favorably by a parent’s main source of school information – students. Services must first be accepted by children in order for them to be adopted by parents. Since child endorsement of services is crucial, service providers must approach parents through their children. With children and better‐off community members as key information channels, service providers will create a brand presence in the mind space of APS parents.

APS market entry ‐ 64 ‐

APS market entry ‐ 65 ‐