Learn that dirty word

The new fees market is about to kick off, but is your university match fit? asks Mike Goldstein

Those who spend Saturdays watching "the beautiful game" will be familiar with a chant often directed at referees: "You don't know what you're doing!"

This popular statement of incredulity at decisions made by those who should know better could apply to the Government's tuition fees policy.

Surely policymakers (and those vice-chancellors egging them on) did not anticipate the impending confusion in the sector.

Institutions have been left holding the baby, making massively important strategic decisions on fee levels, bursaries, scholarships and service enhancements to a time-scale that allows only rudimentary market research.

All universities need to raise money from fees. But some fear that charging the maximum might deter their target audience, forsake their missions and leave them worse off.

Conversely, some will set top-level fees to signal that they are top quality. They worry that lower fees will brand them poor quality.

Most universities already set their academic prices (entrance requirements) as high as they realistically can to attract those who believe high price denotes high quality.

Market research seems to support a link between fee levels and perception of quality.

Applicants expect institutions lower down league tables to charge less than those higher up.

But, in truth, we are guessing the likely impact. This is not simply about fees.

Prospective students will ask what they will get for £3,000 at one institution compared with, say, £2,000 elsewhere.

Studies suggest they will examine websites and prospectuses more closely than ever.

Institutions, therefore, need to know now, before they publish their prospectuses, what prospective students will look for if they are to present themselves in the best light.

Some have done their research, asking if treats such as free laptops, use of fitness centres, or even lower student-to-staff ratios would make the difference.

But questioning 16-year-olds on what their thoughts will be in two years is risky.

Bursaries and scholarships may prove to be the discriminating factors, as these represent cash in hand - but evidence for this is slim.

It is astonishing that a sector with research as a core activity has undertaken so little research into the market.

The stakes are daunting. Universities must finalise their fees and bursary arrangements for 2006-07 entry now, for publication next month.

They will have about 18 months to gauge reaction.

Levels of 2005-06 entries won't give much of a clue, so institutions will need to monitor attendance at open days and 2006-07 applications - and carry out regular market research.

Some managers could find interest in their university waning because fees have been set too high. They would not be able to reduce fees or improve benefits packages during the application cycle for fear of damaging their reputation. Those who set too low a fee will also be in difficulty as they won't have the money to throw at the problem.

Clearing is such a minor activity that changes made at that stage will have a marginal impact. And if things go wrong, it will be difficult to decide whether to change fees for the following cycle - 2007-08 fees and bursaries will be set well before 2006-07 entry levels are known.

There are further marketing issues arising from the impact of variable fees on recruitment from mainland Europe, franchising and part-time fees - with employers being charged about £25 rather than £10 a credit, Pounds 500 instead of £200 a module.

Understanding and developing markets has become a critical part of institutional development. Universities are realising that marketing is not a dirty word.

Marketing must be brought in from the cold and be placed at the centre of strategic planning in institutions.

Certainly market research is needed to guide the critical decisions now called for.

Universities must know what they are doing even if the policy-makers - like Saturday's men in black - do not.

Mike Goldstein recently retired as vice-chancellor of Coventry University and is chairman of education marketing company Heist.