Consumers of Affordable Private Schooling - Core Report

A study of parents in low-income communities in Hyderabad, India
Consumers of Affordable Private Schools
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 selfsustaining, 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. II. What is the consumer behavior of APS parents in choosing private schools? What is the most meaningful way to engage parents for the purpose of disseminating GMCs 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 GMCs 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
Delivery vehicles for the product
Form
Tangible presentation of the information
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 endconsumer.
Exhibit II Engaging the End-Consumers

Market Entrants
Business to Business (B2B) Business to EndConsumer (B2E-C)
Schools
Business to Consumer (B2C)
Parents
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 entrants 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 -
What are Affordable Private Schools?
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 worlds 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 reduced age group of 8-11 years) schools. are
3,4
(in the
in
private the
Affordable Private Schools are defined as self-sustaining private unsubsidized schools with monthly school fees up to ` 800 ($18)
Although
specific prevalence of private schooling among the poor has not been estimated yet, these schools.
we do know that a significant number of urban poor send their children to
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-indianurbanites-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
government schools have not met parents 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 growth and consistent increase in disposable incomes, a rising number of parents have transitioned from being beneficiaries of the public schooling system to consumers of private schooling services. In the current study, Affordable Private Schools are defined as selfsustaining, private, unsubsidized schools with monthly school fees up to `800 ($18). These schools are interchangeably referred to as APS 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 lowincome 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.
13
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-weincrease-the-availability-of-affordable-learning-tools-educational-for-children-in-thedeveloping-world/gallery/aps-info.pdf Accessed on September 20 2010
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 childs 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 GMCs 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. III. IV. V. Governance and Strategy Learning Environment Student Academic Achievement 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 GMCs 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 lowincome 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:
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 GMCs 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 childrens 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 Discusses APS parents reactions to GMCs School Rating Presents the synthesis of learnings on APS parents Articulates the next steps that a market entrant should take to engage APS parents
APS parents: School shoppers
Affordable Private School Ratings Synthesis of study findings
APS market entry
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 childs 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 -
APS parents: School shoppers
Understanding the consumer

APS parents, the consumers of Affordable Private Schools, are members of the working class. They are, for instance, domestic workers, autorickshaw drivers, cab drivers, plumbers, salespeople at retail malls, bank tellers, electricians, and cooks at dhabas (local restaurants). In short, they are the masses of India aspiring for greater social mobility. APS parents live in tightly communities. social networks knit These are
formed because their members live in the same neighborhood, or belong to the same caste share or village, the or same
occupation. These neighborhoods, locally called mohallas, are extended living spaces beyond the four walls of their residents homes. Their households frequently share commodities, meals, water sources, appliances, and the like. The social capital in these communities is usually life experience; the richer an individuals life experience, and the greater his or her maturity, the more his or her opinions count in the peer group. In a society where social hierarchies and stratifications are very apparent and difficult to breach, parents look at education as the key to enabling inter-generational social mobility, and providing their children with a better life. The top three categories of expenditure for APS households are, thus, food/groceries, living space expenses, and childrens education (see Exhibit III). A snapshot of data about APS parents is presented in Exhibit IV.
/APS parents: School shoppers - 24 -
Exhibit III Detailed household expenditure across categories

13% 20% 5% 13% 2% 4% 40% Festivals and entertainment and leisure 5% Food/ Grocery 4% Clothing/garments 7% House rent and electricity and water Education of children
Exhibit IV A snapshot of APS parents
80% of mothers are housewives

Only to having any savings; their average yearly savings were `6144 ($137) compared to an average annual expenditure of about `61859 ($1375)
50% of parents admitted
households have 4 or 5 members
70% of
At least
have electricity, a toilet, a gas stove, and cable TV
90% of households
About
form of access to a mobile phone
95% of parents had some
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 childs 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.
Pre-admission selection vs. Post-admission review

In pursuit of desired schooling outcomes, parents engage in the following broad stages of decision-making to choose a school.
Exhibit V Three stage school assessment process

Selection Ask peers for information on affordable schools in the neighborhood Get more information about these schools Shortlist schools based on information available (fees, commute, etc) Admission Visit 1or 2 of the top schools shortlisted Negotiate fees Enroll child in school Review Assess child's progress Be alert to problems with school quality Compare with peer group decisions
Parents apply differing parameters when choosing a new school versus when evaluating the performance of a current school. For example, while selecting a school, the main parameters may be: peer endorsement of the school, one-time admission charges, and Grade 10 (standardized test) results. However, when a child is already enrolled in a particular school, parents may give more importance to observed learning assessments, such as the ability to speak English, take initiative in completing homework, and obtain good marks. They also consider the costs of switching to another school. In addition, a parents opinion of school performance appears to be tied in with perceived teacher quality.
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 openended 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
Exhibit VI Top parameters for school assessment

Teacher quality Parameter of school assessment Good academics English & Computer subjects Proximity Reputation Infrastructure Fee flexibility 0% 11% 10% 20% 30% 40% 50% 60% 70% 80% 90% 38% 35% 47% 53% 64% 76%
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.
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

7,000 Average annual school fees (in Rupees) 6,000 5,000 4,000 3,000 2,000 1,000 0 Kindergarten Primary Grade level Secondary 3,692 4,024 6,250
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
10000 9000 8000 7000 Rupees 6000 5000 4000 3000 2000 1000 0 School Sundries Term fees Monthly (Textbooks fees etc.) Exam fees Total school fees Private tuition Private schooling expenditure 3429 1698 1447 7145 572 8913 1767
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 childs 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.
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% Percentage of sconsidered ample of respective surveys 80% 70% 60% 50% 40% 30% 20% 10% 0% Typical Urban Indian household (Source: Max-NCAER study, 2008) Typical APS Indian household 45% 41% 17% 5% 11% 9% 6% 7% 5% 20% 5% 4% 12% 13% Others Healthcare Transportation and leisure Education Housing & utilities Apparel 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 childs 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 schools 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
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.
The reputation of the school owner (also known as school correspondent or the principal) is one of the key parameters driving school brand. The owners are local brands in themselves, and are gauged in terms of the following: Qualified or experienced
Perceptions rooted in social networks build rudimentary local brands for schools.
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 childs 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.
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
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 gauging schools
Fee flexibility Infrastructure Reputation Close to home English + Computers
Ability to gauge
Yes Yes Yes Yes Partially
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 Childrens opinions Teacher qualifications and experience Sensitive to child Authoritative disciplines child Articulate knows how to communicate in English Teacher turnover Teacher training Childs academic achievement
Good academics
No
Teaching quality
No
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
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 childs 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 social networks. Parents also directly ask students for opinions about teachers and schools. These opinions are corrected against the parents own perception of whether the child is 'clever, dull, hard-working, or a About 56% of APS parents surveyed agreed that they would send their child to a school solely based on recommendations local social networks. from
shirker. To corroborate their own childs opinion of specific aspects, they question other students who attend the same school. This provides them with a composite image of the schools 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
Neighborhood students and their parents Teachers canvassing Information brochure of schools Poster/Pamphlet /Graphic formats Teachers/ principals they know Newspaper Meeting teachers/ principal by visiting each schools Television Radio
Overall %age
90.73 30.94 23.62 17.34 15.7 11.51 9.27 8.82 0.45
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 considered 1 2 3 4 5 6 1 59% 14% 5% 1% 1% 0% 2 0 4% 5% 6% 2% 1% Schools visited 3 0 0 1% 1% 1% 0 4 0 0 0 1% 1% 1% 5 0 0 0 0 1% 1% 6 0 0 0 0 0 1%
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 schools 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.
Affordable Private School Ratings
GMCs 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. GMCs 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 product Information contained
Concept
Content
Channel
Delivery vehicles for the product
Form
Tangible presentation of the information
Affordable Private School Ratings - 45 -
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.
Exhibit XIV Existing channels are preferred sources for SRC

Percentagee of APS parents (multiple response)
80 70 60 50 40 30 20 10 0
21 25 29 34 42
70
74
73
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.
Exhibit XV Willingness to pay for School ratings

4.04 16.14 14.95 4.04 3.29
6.88
27.8 22.87
>= Rs100 Rs 21 - Rs 30
Rs 51 - < Rs100 Rs 11 - Rs 20
Rs 41 - Rs 50 <= Rs 10
Rs 31 - Rs 40 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.
Text-based content will not be useful as most APS parents are barely literate. o Parents noted that they primarily use their phones for voice features as they are unable to read SMSs.
Sign-based content may be used but symbols adopted must be relevant to the parental mental model and the cultural context. o Symbols, colors, and often have religious, political, and social connotations. Inadequate testing and research in this area risks alienating segments of APS consumers, and hindering mass adoption.
No single common language is used across Hyderabad. o A number of colloquial words are used to ascribe certain qualities to schools. See Exhibit XVI
Exhibit XVI APS qualifiers in local parlance
Synthesis of study findings
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 personas 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
About 45% of APS parents belong to lower-income groups, along

with 29% from middle-income groups and 26% from higherincome groups.
Low-income communities will not prioritize expenditure on education
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 childs education
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
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 childrens higher education.
Parents in low-income communities are not active consumers of private schooling
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
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
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.
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 GMCs parent engagement strategy. APS parents behave as active consumers and are well aware of their choices. If they were not active consumers, the introduction of a rating tool would APS parents behave as active consumers and are well aware about their choices
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.
17
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.
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 14% of their total expenditure. Anu studied up to Grade 10, and Ravi, up to Grade 12. They have high aspirations for their children, Ajay and Veena. They are also regularly asked for advice about private schools in the neighborhood. Ravis School shopping characteristics: Priority parameters: Good academics & Good staff members Above all, Ravi wants the best school possible, whether it is in his immediate locality or not Regular discussions with neighborhood parents and children Meet with teachers to gain information about schools They become information sources themselves after seeking out this information Consider and visit one school has decided upon the school through social networks Ravis School Rating Traction: Would find a school rating card somewhat helpful Would look for schools academic quality, teacher performance and exam results Would be willing to pay around `31 for the card School Decision Mentality: Aspirations: High Degree of Constraint: Low Engagement with Social Network: High Number of Schools Considered: Low Number of Schools Visited: Low Most Important School Characteristics: Good academics, good staff members Ravis Personal Statistics: Occupation: Factory Supervisor Beautician Place of Origin: Hyderabad Household: 4 members in total /
Name: Anjum Persona : Enabler
Why should my child lose a year of schooling due to my inability to pay fees in time?
Anjum and her husband Aftab are natives of Hyderabad. They stay in an urban area; she is a housewife, and he runs a small grocery shop. Aftab typically earns about `6500 per month, and each month they spend approximately `780 on education-related expenses. Education-related spending constitutes nearly 13% of their total expenditure. Anjum studied up to Grade 5, and her husband studied up to Grade 8. Despite not having higher education levels themselves, they have high aspirations for their daughter, Noor. Anjums School shopping characteristics: Priority parameters: Good academics, Computer facilities & English medium Above all, Anjum will look for the best school in her neighborhood. She is unlikely to consider options beyond what her social circle chooses. Relies heavily on her social network for information Considered one school, and consequently, visited one school prior to admission Anjums School Rating Traction: Would find a school rating card somewhat helpful Would value information on whether the school is good for academics Would be willing to pay around `25 for the card Anjums Personal Statistics: Occupations: Housewife / Shop Owner Place of Origin: Hyderabad Household: 6 members in total School Decision Mentality: Aspirations: High Degree of Constraint: Medium Engagement with Social Network: Medium-High Number of Schools Considered: Low Number of Schools Visited: Low Most Important School Characteristics: Good academics, English, computer facilities
Name: Venkat Persona : Passive
I dont have any education, but I would like to admit my child into a nearby English Medium school
Venkat and his family migrated to Hyderabad a few years ago from Ponduru, a town in rural Andhra Pradesh. His wife does not work outside the home, so he supports his family singlehandedly through his work as a chai wallah (tea stall worker). Venkat typically earns about `5500 per month, and each month he spends over `550 on education related expenses. These expenses make up 11% of his total expenditure. While he and his wife received no formal schooling, they aspire to send their 8-year-old son, Rajesh, to a private school. Venkats School shopping characteristics: Priority parameters: English medium instruction, School reputation & Proximity Above all, Venkat wants an English medium private school that he can afford and is close to his home His preferred school features are not related to more holistic measures of school environment and facilities. Considered three schools and personally visited two before making his final selection Venkats School Rating Traction: Would find a school rating card helpful Would value information on school facilities and discipline Would be willing to pay around `20 for the card Venkats Personal Statistics: Occupation: Chai Wallah (tea stall worker) Place of Origin: Ponduru Household: 7 members in total School Decision Mentality: Aspirations: Medium Degree of Constraint: High Engagement with Social Network: Low Number of Schools Considered: High Number of Schools Visited: High Most Important School Characteristics: Teaching quality, reputation, English medium,
APS market entry
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 intuitively communicate what the product provides, without need for additional explanation Research methodology, should be used to engineer the user experience the Form (see page 48). Market entrants should develop several prototypes of their product 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 endconsumers (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 (B2B) Business to EndConsumer (B2E-C)
Schools
Business to Consumer (B2C)
Parents
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 -
Marketing: How you should reach APS consumers

Service providers should ride existing trends among APS parents to effectively foray into the APS market. Market entrants can get a sense of what parents value and how trends might develop by looking at the graph below. We captured parents priorities for skill development (see Exhibit XVIII) by understanding what they would choose in the event of an increase in income in their household. We see that computer courses and computer ownership, factors that drive skill acquisition and market employability, are a high priority.
Exhibit XVIII Revelations about Parental aspirations
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 parents 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.

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Consumers of Affordable Private Schooling - Core Report

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A study of parents in low-income communities in Hyderabad, India

Consumers of Affordable Private Schools

Exhibit I The Concept-Content-Form-Channel framework

Exhibit II Engaging the End-Consumers

What are Affordable Private Schools?

we do know that a significant number of urban poor send their children to

/What are Affordable Private Schools? - 12 -

/What are Affordable Private Schools? - 13 -

/What are Affordable Private Schools? - 14 -

GMC School Rating tool

GMC School Rating tool - 16 -

GMC School Rating tool - 17 -

Objectives of the study

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

Objectives of the study - 19 -

APS parents: School shoppers

Affordable Private School Ratings Synthesis of study findings

APS market entry

Objectives of the study - 20 -

APS parents: School shoppers

Understanding the consumer

/APS parents: School shoppers - 24 -

Exhibit III Detailed household expenditure across categories

Exhibit IV A snapshot of APS parents

80% of mothers are housewives

50% of parents admitted

households have 4 or 5 members

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

form of access to a mobile phone

95% of parents had some

/APS parents: School shoppers - 25 -

/APS parents: School shoppers - 26 -

Pre-admission selection vs. Post-admission review

Exhibit V Three stage school assessment process

/APS parents: School shoppers - 27 -

What parameters do parents consider?

/APS parents: School shoppers - 28 -

Exhibit VI Top parameters for school assessment

Percentage of APS parents

/APS parents: School shoppers - 29 -

Exhibit VII School fees vary considerably with Grade level

/APS parents: School shoppers - 30 -

Education expenditure category

/APS parents: School shoppers - 31 -

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

/APS parents: School shoppers - 33 -

/APS parents: School shoppers - 34 -

English and computer subjects

School reputation as a local brand

/APS parents: School shoppers - 35 -

/APS parents: School shoppers - 36 -

How do parents select schools?

/APS parents: School shoppers - 37 -

Exhibit X Proxies for school selection parameter

/APS parents: School shoppers - 38 -

/APS parents: School shoppers - 39 -

Exhibit XI Social networks are the main info source

/APS parents: School shoppers - 40 -

Exhibit XII School visits are at low levels

/APS parents: School shoppers - 41 -

Knowledge gaps of APS consumers

/APS parents: School shoppers - 42 -

Affordable Private School Ratings

What parents say about ratings