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Market
Promoting Hong Kong’s higher segmentations
education to Asian markets and strategies
Market segmentations and strategies
427
Alan C.K. Cheung
Johns Hopkins University, Baltimore, Maryland, USA, and
Timothy W.W. Yuen, Celeste Y.M. Yuen and Yin Cheong Cheng
Department of Educational Policy and Administration,
Hong Kong Institute of Education, Taipo, Hong Kong

Abstract
Purpose – The main purpose of this study is threefold: to analyze the current conditions of higher
education services offered in the three target markets; to conduct market segmentation analysis of
these markets; and to recommend the most appropriate market entry strategies for Hong Kong’s
education service providers.
Design/methodology/approach – The data for this project were obtained primarily by
questionnaire survey and interviews. The research team collected 1,370 questionnaires and
conducted a total of 121 individual and focus group interviews in the four studied cities – Mumbai,
New Delhi, Jakarta, and Kuala Lumpur.
Findings – The study found that there was a high unmet demand for higher education overseas and
that the visibility of Hong Kong’s higher education was relatively weak in these Asian markets. In
order to capture the continued rise of students in Asia, higher education institutions and the Hong
Kong government need to work together to analyze the potential markets critically and employ
marketing strategies sensibly. Several key recommendations have been provided based on the
findings.
Research limitations/implications – The study was undertaken in a few key cities in these three
target markets. However, findings from the study may generate insights into other cities with similar
characteristics in these countries and the Asian regions.
Practical implications – The paper suggests that decision makers at the institutional level and
government level seeking to enter these markets must pay attention to the importance of market
segmentation and the 4P variables in formulating their marketing strategies.
Originality/value – Few studies have examined the current condition of higher education services
in these three emerging Asian markets. The study provides some useful marketing information to
education decision makers in Hong Kong and elsewhere who may be interested in formulating
marketing strategies in these markets.
Keywords Hong Kong, Higher education, International marketing, Market segmentation
Paper type Research paper

Introduction
According to UNESCO, more students than ever are seeking higher education in many
countries, causing tertiary enrollment to jump by 77 percent over the past decade International Journal of Educational
(UNESCO, 2005). Bohm et al. (2002) also predicted that the global demand for higher Management
Vol. 24 No. 5, 2010
education would continue to rise and by 2005, there would be over 7 million students pp. 427-447
studying outside their home country, a 3.5 fold increase from 2000. Asia will represent q Emerald Group Publishing Limited
0951-354X
some 70 percent of the total global demand for international education. Exporting DOI 10.1108/09513541011055992
IJEM higher education services has become increasingly important for many developed
24,5 countries such as the UK, Australia, and Singapore in the past few decades. These
countries have both history and experience in exporting and promoting their higher
education. There is already a sizable non-local student population in each of these
countries. According to the latest statistics published by Institute of International
Education (2009), the UK and Australia had 376,190 and 202,448 non-local
428 undergraduate and graduate students studying in their countries in 2007,
respectively. These figures constitute 16 percent and 21 percent of the total higher
education enrollment in the UK and Australia, respectively. Like the UK and Australia,
the number of non-local students has been increasing in Singapore in the past two
decades, reaching 86,000 in 2007 (EDB Singapore, 2009).
Compared with the aforementioned and other countries, the number of non-local
student in Hong Kong is relatively few. It is estimated that there were about 9,000
non-local students studying in Hong Kong in 2007-2008 (University Grant Committee,
2007). Out of these 9,000 non-local students, about 90 percent of them were from
Mainland China. To achieve the goal of being the education hub of the region, in 2004
Dr Lam (2004), Chair of Hong Kong’s University Grant Committee, encouraged
universities to conduct more outreaching and promotional activities to recruit and
attract more non-local students, especially in South-east Asia to their campus. The
Hong Kong government is actually actively exploring the possibility of establishing a
center of education in its own soil. For example, at its fourth meeting held on 3 April
2009, the Task Force on Economic Challenges (n.d.) was assumed the responsibility for
studying how to further develop educational services, as one of the six major areas of
economic development.
To attract more non-local students, one must understand the needs and concerns of
these prospective students in these markets. Indeed market segmentation and
strategies are extremely important in the export of higher educational services
(Mazzarol and Soutar, 2001). As indicated previously that the major demand for
international education comes from Asia, the present study investigates the prospect of
Hong Kong in exporting educational services to three specific markets, namely
Indonesia, India, and Malaysia in the Asia Pacific region. Particular attention will be
paid to how segmentation and other market strategies can be employed to promote
Hong Kong’s educational services to these markets.

Literature review
McDonald and Dunbar (2004) explained that marketing is a process that comprises
defining markets; quantifying the needs of the customer groups (segments) within
these markets; and determining the value propositions to meet these needs. . .etc. In
brief, the marketing process first requires service providers to understand the market
with regards to its segments, particularly those of value to develop, and thereon
proceed to the planning of marketing strategies. Such marketing strategies are often
understood against the 4Ps: product, price, promotion, and place. Marketing analysis
can be of help when a country positions itself in exporting educational services.
Many market segments can be revealed by observing the attributes of certain
student groups (Gibbs and Knapp, 2002). Segmentation can be done in different ways:
benefit segmentation, demographic segmentation, and lifestyle segmentation. . .etc.
Once segmentation has been done, other marketing strategies can be developed to
facilitate market penetration. It was explained that in the case of the UK, for example, Market
learners, particularly mature students, behave like customers of service, and seek value segmentations
in the external worth of the credential awards. This will be an important factor for the
consideration of service providers. In a similar vein, Wong and Hamali (2006) and strategies
explained that in Malaysia higher education is sought largely for marketable skills and
that providers of higher education should have better information from employers to
avoid misfit between skills imparted and the need of the job market. 429
Marginson (2006, 2007) takes a wider perspective and argued that the global higher
education market can be stratified into elite and mass sectors. Elite sector represents
scarce positional goods that the market will snap up while price sensitivity will be low.
It is also important to note this top tier of the hierarchy is understood in terms of the
capacities of individual institutes while that of the mass sector is understood in terms
of the nation. It was also pointed out that an institution can be elitist locally but less so
globally. Taken carefully, such analysis will be of help when an exporting country and
its higher institutions are planning the marketing strategies, particularly in matters
relating to promotion, product design, and pricing.
The importance of market research as the basis of market mapping and that the
data collected through market research can be an effective guide to the making of
marketing decisions (Birn, 2004). Such data should best be generated from the market
directly if they are able to inform the decisions. It could be that different entry
strategies should be adopted for different markets even if they are in the same
geographical region. Mazzarol and Hosie (1996) for example argued that Australian
institutions need to treat Asian markets differently from those in the West. Even
within the Asian Region, it was suggested that differences should be found between
such markets as Hong Kong, Singapore, and Malaysia given their localized
characteristics. Following this line of argument, marketing strategies should be
hammered out based on research directly conducted to the targeted markets. Gibbs and
Knapp (2002) further suggested that in conducting research for marketing higher
education, the research methods used should dovetails with the tasks they are meant
for. In general, qualitative research like focus groups can serve diagnostic purpose but
cannot generate statistically valid response, which can best be achieved through
quantitative research, say a questionnaire survey. In fact, successful market research
may need a sensible mix of the two methods.
There is always a debate about the relationship between education and market. The
debate between Grace (1994) and Tooley (1994) about whether education should be a
public good or a commodity is an example in such reflection. This debate is often
accompanied by the discussion relating to choice and effectiveness (Gorard et al., 2003).
Much of these reflections are about controversies relating to the nature of education
and the provision of education services to the local population. Notwithstanding this,
the marketing theories and techniques originating from the private sector can certainly
be valuable reference to a country that tries to internationalize its tertiary education,
particularly so when such change is perceived to bring about benefits to both
individual institutes and the society as a whole.
Establishing the need for Hong Kong to do marketing study and adopt sensible
marketing strategies in her export of higher educational services in the Asian Region
leads us to one key question – which markets in Asia should be the focus of such
marketing study and planning? In this paper, it is argued that the marketing efforts
IJEM should initially be focused on three markets, namely: India, Malaysia, and Indonesia.
24,5 As mentioned previously, Asian region is likely to be an important part of the global
education market (Bohm et al., 2002). In Research Snapshot Number 26 (Australia
Education International, 2007), it revealed that India was the second most important
source market of international students to Australia, and third to the UK and Malaysia
came as the third and the forth of these countries respectively. In addition, both
430 Indonesia and Malaysia, have a sizable ethnic Chinese population and hence they too
can be potentially important to Hong Kong’s higher education export. In fact, India,
Malaysia, and Indonesia each has its ethnic community in Hong Kong.
The main objectives of the present study are of threefold:
(1) to analyze the current conditions of higher education services offered in the
three target markets;
(2) to conduct market segmentation analysis of these markets; and
(3) to recommend the most appropriate market entry strategies for Hong Kong’s
education service providers.

Certainly, the overall segmentation and marketing strategies Hong Kong may need to
consider should not rule out different initiatives undertaken on the individual institute
level. Sidhu (2006) for example has explained that universities may adopt unique
strategies in internationalization.

Methods
The data for this project were obtained primarily by questionnaire survey and
individual and focus-group interviews. The research team collected 1,370
questionnaires and conducted a total of 121 individual and focus group interviews
in the four studied cities – Mumbai, New Delhi, Jakarta, and Kuala Lumpur between
April 2007 and January 2008. Respondents included prospective students, school
principals, university professors, local higher education service providers, and key
policy makers of these cities. Both convenience and snowball sampling methods were
used for questionnaire survey and interviews through the assistance from local
schools, colleagues, and professional networks in these four studied cities. The
breakdowns of questionnaire survey and interviews conducted in each city are shown
in Table I.
The questionnaire survey had a total of 28 questions covering the following five
major areas:
(1) reasons for pursuing higher education overseas, including types of degrees and
overseas countries preferred;
(2) types of educational services;
(3) facilitating and hindering factors affecting the decisions to study in Hong Kong;
(4) knowledge of promotional activities of Hong Kong’s higher education; and
(5) personal demographic information.

In addition, the interview guide consisted of 12 open-ended follow-up questions

covering all major areas stated in the questionnaire survey.
 Market
Cities, countries
Mumbai, New Delhi, Jakarta, Kuala Lumpur, segmentations
India India Indonesia Malaysia and strategies
Education expo
Questionnaire surveys (student
and parents) 187 248 220 245 431
FGI with students (5-7 per group) 3 9 3 6
Parents 2 4-5 4-5 8
Loan officers 0 2 0 0
Education consultants 4 5 3 3
Competitors 6 7 6 6
Potential partners 3 3 3 4
Local community
Questionnaire surveys (students) 90 63 83 234
Potential partners 3 1 3 5
High school principals/
representatives 1 0 2 3 Table I.
Government officials 0 1 3 1 Data collected in
FGI with students 0 0 0 4 target cities

Findings
This section reports some of the findings from our questionnaire survey and interviews
conducted in the four cities. These findings will inform the discussion of marketing
strategies which Hong Kong should adopt in the next section.

Reasons for pursuing higher education overseas

Demand for overseas higher education. The findings of this study were consistent with
the broad literature that there seems to be a great demand for overseas higher
education in all four studied cities. Over 80 percent of the students surveyed at the
education expos in these cities indicated that they were planning to study overseas.
The findings of our in-depth interviews with students in these four cities also confirm
the survey findings. Interviews with prospective students, parents, and educators
helped identified the main reasons for the surveyed students to choose to study
overseas. They were:
.
failing to obtain a university place at a local university due to keen competition
or a lack of university places in their hometown areas;
.
believing that a degree from overseas would make them more competitive in the
marketplace on graduation; and
.
not satisfying with local higher education.

In short, both the questionnaire survey and in-depth interviews suggested that there is
an unmet demand for higher education in these Asian markets.
Types of degrees preferred. In terms of types of degrees preferred, both
undergraduate and graduate programs were welcomed by the surveyed students in
Jakarta, Mumbai, New Delhi, and Kuala Lumpur. Over 50 percent of all respondents
said that they preferred getting a graduate degree from an overseas institution to a
IJEM local one. As for undergraduate degrees, the percentage was a bit lower, with an
24,5 average of 32 percent.
In general, there was a higher demand for graduate degree than undergraduate
degree in all cities except in Kuala Lumpur. Nevertheless, a demand for graduate (41
percent) and undergraduate degree (42 percent) was equally keen in Kuala Lumpur.
Based on our interviews with prospective students in these three target markets, one
432 of the major reasons for choosing studying graduate programs over undergraduate
programs overseas was closely related to the duration of the study and the associated
costs. Most interviewees said that it was more expensive to study undergraduate
programs because it would normally take four years while it would only take one to
two full years for graduate programs in overseas. In addition, more scholarships and
financial assistantships are available for graduate studies than for the undergraduate.
It has been the case that since 2001/2002, international graduate students
outnumbered international undergraduate students in 2006/2007. Research shows
that among the international students, 45 percent were doing graduate 41 percent
undergraduates and 14 percent non-degree/certificate studies or student on optional
practical training (Chow and Marcus, 2008). But it is noteworthy that, as revealed in
our findings, around 23 percent of all respondents in Kuala Lumpur expressed an
interest in pursuing a sub-degree in overseas. In addition, it is worth mentioning that
sub-degree programs and vocational studies are prevalent and popular in Malaysia
(see Figure 1).
Countries/cities preferred. Regarding countries/cities preferred when studying
overseas, a great majority of students surveyed and interviewed in all four cities
preferred Western countries like the UK, the USA and Australia. Over 80 percent of
students surveyed said that Western countries including the UK, the USA and
Australia were their preferred countries of study. Only 11-26 percent preferred
Singapore and 7-17 percent preferred Hong Kong. However, more respondents (26
percent) in Kuala Lumpur than other cities indicated their preference on Singapore and
Hong Kong. Based on our interviews, it may probably be due to a sizeable Chinese
population in the city. In addition, Singapore and Hong Kong become attractive due to

Figure 1.
Types of degrees preferred
shared similar cultural heritages and close geographical proximity to their home Market
countries. segmentations
According to our interviews, students in general in these four target cities felt that
Western education was superior to other Asian countries like Hong Kong and and strategies
Singapore. One of the main reasons is that students in these markets believed that the
UK and the USA were the leaders in higher education. One student group in India best
summed up this general perception by saying, “Both the USA and the UK are the two 433
best countries when it comes to higher education. These countries are also the leaders
in several disciplines such as medicine, engineering, and business. In addition, there
are also abundant job opportunities.” The data provided by the Australia Education
International (2007) also matched with our findings. In 2005-2006, the number of
annual enrolments of Indian students in the USA was 76,503; the UK, 19,250 and
Australia, 25,431 respectively (see Figure 2).

Types of educational services

In terms of areas of study, the most popular majors based on our returned
questionnaires were, in order of ranking, business studies, medicine, engineering, and
computer sciences among survey respondents in Jakarta, New Delhi, and Mumbai
(Figure 3). In Jakarta, there was also a demand (23 percent) in social sciences such as
psychology, political sciences, and sociology. Unlike the above three cities, medicine
and engineering were what most of the respondents preferred in Kuala Lumpur in
addition to business studies. These findings again were consistent with those of other
studies. According to Institute of International Education (2008), business, engineering,
physical sciences, and computer sciences were the top five majors among international
students in the USA.

Factors facilitating or hindering students to study in Hong Kong

General understanding of Hong Kong’s higher education. In terms of survey samples’
general understanding of Hong Kong’s higher education, the findings suggested that
they only had limited knowledge of it. In other words, Hong Kong’s higher education

Figure 2.
Countries preferred
IJEM
24,5

434

Figure 3.
Top four majors preferred

was not at all well known in these four cities (Figure 4). For example, close to 80 percent
of all respondents from these four cities mentioned that they knew little about Hong
Kong higher education system.
Results of our focus group interviews in these cities also found a similar response.
During focus group interviews with students in these countries, most said that Hong
Kong was a well-known financial center in Asia but in terms of higher education, they
hardly say much of it as compared to other countries like Singapore, the UK, the USA,
and Australia.
Overall impression of Hong Kong’s higher education. It is interesting to note that
though most students were not familiar with higher education in Hong Kong, they had
a good overall impression of Hong Kong’s higher education. An average of 30 percent

Figure 4.
General understanding of
Hong Kong higher
education
of all respondents said their impression had been good or very good toward Hong Market
Kong’s higher education; approximately 45 percent said no idea; and about 24 percent segmentations
said average and not so good. Nonetheless, more respondents said they had no idea
than they said very good and good, and average and not so good. In our interviews and strategies
with students in these target markets, when asked why they had good impression of
Hong Kong’s higher education, the majority of respondents said that Hong Kong was
one of the most well-known and successful cities in the world, it must have a great 435
higher education system to support its prosperity (see Figure 5).
Preferred financial assistance. Another consistent pattern found among four cities
is the importance of offering scholarships to these students. The majority of
respondents said scholarship was the type of financial assistantships they would
hope to receive when studying overseas (Figure 6). Though respondents from all four
cities mentioned that scholarships was important to them when considering studying
overseas, the percentage of respondents was much higher in Jakarta and Kuala
Lumpur (over 77 percent) than in the other two cities in India (about 55 percent). In
terms of offering low interest loans, there was also a significant difference among the
four cities. Only 5 percent of students in Jakarta expressed the importance of having a
low interest loan to support their studies. A much higher percentage (10 percent to 30
percent) of respondents in India and Malaysia specified that low interest loan was
important to finance their further education overseas. As observed from the field
work conducted in the two cities in India, there was a strong presence of loan
companies and banks offering low-interest loans to target students at the expos.
When interviewing with students in Kuala Lumpur, many students expressed that
the Singaporean government offers a very low-interest loan to non-local students as
well. This finding highlights the importance of offering low-interest loan, and
possibly at the government level, in exporting higher education to these target
markets, especially in India.

Figure 5.
Overall impression of
Hong Kong’s higher
education
IJEM
24,5

436

Figure 6.
Financial assistantship
preferred

Furthermore, similar findings were found during interviews with students and
government officials in all four cities. One student group interviewed in Mumbai
mentioned that they would not be able to study abroad without scholarships because
tuition fees plus living costs would create a huge financial burden on their families. In
addition to scholarships, these students suggested that the university should also offer
on-campus job or assistantships to international students because it will not only help
pay the bill, but more importantly, it will broaden their learning and cultural horizons
in overseas.

Promotional activities of Hong Kong’s higher education

Visibility of Hong Kong’s higher education. As indicated previously, the findings
revealed that the visibility of Hong Kong’s higher education was very low in these all
four cities. Likewise, the overall impression of promotional activities of Hong Kong’s
higher education in all four cities was not visible either (Figure 7). A high percentage of

Figure 7.
Visibility of Hong Kong
higher education
the respondents (75 percent) in these cities stated that they were either not being Market
informed or the activities were not visible to them. segmentations
These findings were confirmed by our qualitative data generated from interviews
conducted in various cities. One of the parents interviewed in Jakarta said that she had and strategies
been attending this kind of education in Indonesia expos for several years and yet it
was the first time that Hong Kong had a booth there in Indonesia to promote higher
education. One government official also advised that in order to make Hong Kong’s 437
higher education more visible in Indonesia, proactive promotional activities including
marketing on TV, internet, or education expos were felt necessary and essential. In
addition, one education consultant at the expos in Mumbai agreed that the visibility of
Hong Kong’s higher education was very low in India. In contrast, Singapore has been
actively promoting their higher education in India in the past few years, according to
this consultant. He continued to say that if Hong Kong wanted to attract more non-local
students, it has to be strategic in order to compete with other experienced countries.
Preferred channels. Regarding the preferred channels to obtain information of
studying overseas, the majority of respondents (75 percent) first considered Internet
(Figure 8). Then, approximately 30 percent of the respondents specified exhibitions; 20
percent newspaper; 18 percent TV, and 18 percent friends and relatives were their
preferred channels. In Kuala Lumpur, approximately 24 percent of all respondents
chose teachers as their preferred channel. It is interesting to note that when
interviewing with principals in these target markets, we were told that more and more
overseas universities were working directly with individual schools by paying regular
visits and giving presentation to prospective students and their parents at their
schools. Many principals interviewed in these cities agreed that the aforementioned
promotional activities were very effective channels to reach out to target students and
parents and to disseminate useful information of overseas institutions to them.

Figure 8.
Preferred channels to
obtain information
IJEM The decision of studying higher education. As indicated in Figure 9, the decision of
24,5 studying higher education overseas was more likely made jointly by parents and the
student concerned (65 percent). Only 21 percent of survey respondents said the decision
was made solely by students concerned and only 11 percent solely by parents. Most
students interviewed in these four cities also confirmed the findings. During a focus
group interview with students in Kuala Lumpur, almost all students mentioned that
438 when planning for doing higher education overseas, the decision would definitely be
made jointly by them and their parents since their parents were the ones who would
support them financially.

Other observations
In addition to the aforementioned findings, the research team had a few additional
observations from our fieldwork. First, based on our observations at the expos and our
interviews with various stakeholders, we noticed that bank loan was very common in
India, but not in Indonesia and Malaysia. When attending the expos in both cities in
India, we noticed that lending institutions had a strong presence at these expos.
Second, it is worth mentioning that there were approximately 50 degree programs
offered by universities in Hong Kong were recognized by the Malaysian government.
However, we could not obtain such information in the other two target markets.
Finally, a sizable population in Jakarta and Kuala Lumpur is of Chinese descent.
About 62 percent of survey respondents (both at onsite expos and in the offsite
community) in Kuala Lumpur claimed themselves to be Chinese ethnic group. Based on
our interviews, we learned that these Chinese ethnic were generally well off and more
inclined to study aboard. For example, there are approximately five million ethnic
Chinese in Indonesia. Out of the 20,000 Indonesian students studying aboard, half of
them are ethnic Chinese. In Malaysia, there are approximately six million Chinese.
A good portion of these Chinese was studying in Chinese Independent Schools run by
private organizations. Based on one of our interviews with a Chinese high school
principal, a high percentage of these students were in fact planning to study overseas.
For example in 2005, out of the 6,000 Chinese high school graduates, approximately 30
percent chose to study abroad. In contrast, there are very few ethnic Chinese living in
these two cities in India.

Figure 9.
Decision maker when
choosing higher education
overseas
A discussion of market entry strategies Market
The following section will be focusing on identifying some of the market entry segmentations
strategies using the 4Ps framework. According to McCarthy (2001), marketing
decisions generally fall into the following four categories, namely product, price, place, and strategies
and promotion, also known as the 4Ps or marketing mix. The term “product” refers to
tangible, physical products and services. Place refers to the channels of distribution
that serve as the means for getting the product to the target customers. Price is the 439
amount that target consumers are willing to pay for the product or services provided.
In the context of marketing mix, promotion represents the various aspects of
marketing strategies.
This widely accepted 4Ps classification offers a simple framework for organizing
our marketing decisions and strategies. The 4Ps is illustrated in the following diagram
(Figure 10).
The following market entry strategies are recommended for Hong Kong HEIs
intending to export their higher education services to these target markets.

Product
In terms of product, the key question for the present study should be addressed is the
types and ranges of higher education services that Hong Kong could provide to these
prospective students in these three target markets.
It is clear that there is a high demand for various majors at both undergraduate and
graduate levels. It is therefore recommended that both undergraduate and taught
postgraduate programs should be the first priorities in terms of the level of studies in
these three target markets.
Sub-degree or diploma programs would be the second priority. Among the three
target markets, the findings suggested that quite a number of prospective students in
Malaysia were interested in overseas studies at the sub-degree level, both with
academic and vocational orientations. This seemed to be a huge potential market
especially if these programs could be linked to top-up undergraduate programs that,
with an additional one to two years, can award students with first degree of Hong
Kong or overseas universities.

Figure 10.
The marketing mix
IJEM In order to cater for the diverse and unmet international education demands, it is also
24,5 recommended that the higher education institutions should strengthen and diversify
their existing program pathways to accommodate for a wide range of
sub-degree/diploma graduates. This is also a common practice of the competitors to
provide flexible pathways to international students to finish their degree study. In
addition, the development of degrees of professional and vocational education (PVE)
440 may also be considered.
In addition, some of these majors such as business, medicine, and engineering are
internationally well-known (Cheung et al., 2009). With reference to the findings, the
following specific programs are recommended for consideration of attracting non-local
students from the three target markets:
.
Business: Mumbai, New Delhi, Jakarta and Kuala Lumpur.
.
Medicine: Mumbai, New Delhi, Jakarta and Kuala Lumpur.
.
Engineering: Mumbai and New Delhi.
. Computer Science: Mumbai and Jakarta.
.
Social Sciences: Jakarta.
.
Creative Arts: New Delhi and Kuala Lumpur.

When considering the aforementioned recommendations, individual HEIs should take

into consideration of the respective merits, cost, and other constraints associated with
supplying these programs in these three target markets. As Western universities are
widely considered to be of premium quality in these target cities, collaboration between
Hong Kong’s universities with renowned Western institutes in the offering of
programs could be a way to make the service more attractive in such markets.
It is important that the higher education service should be based on the unique
strengths of Hong Kong. For example, Hong Kong is a safe, international financial
center and it has excellent infrastructure. It also has a long history of engaging in
international trade and is well-connected with the globe. Hong Kong is also near to the
mainland which is of increasing importance in global trade and business opportunities.
Although Hong Kong is a new player in exporting its higher education standard is
competitive to the target markets. It is easy for students studying in Hong Kong to
engage in academic and other exchanges in the mainland. Taken together, Hong Kong
has its advantages to provide internship programs in different multi-national
corporations, particularly those that have business connection with the mainland.

Place
According to the World Trade Organizations (WTO)’s General Agreement on Trade in
Services (GATS), there are two general modes of exports when it comes to supplying
education services from a country to another. They are inbound mode and outbound
mode. In addition, a third mode (mixed mode) has been identified for the present study.
In the context of the present study, inbound mode refers to the consumption of Hong
Kong’s higher education by overseas students in Hong Kong. On the other hand,
outbound mode refers to the consumption of Hong Kong’s higher education services by
these overseas students in their home country. Students in mixed mode would split
their study time between Hong Kong and their home country.
 Inbound mode. It is recommended that inbound mode should be given the first Market
priority. According to our on-site education expo interviewing data, parents and segmentations
students indicated that they preferred to study overseas to twining studies purely
taught locally. Some interviewees felt that the outbound programs were not as good as and strategies
the inbound programs due to a lack of international exposure and overseas faculty
members.
To make these programs more competitive to non-local students, it is recommended 441
that higher education institutions in Hong Kong should allow flexible intakes and
multiple pathways to accommodate the diverse educational systems of students from
these target markets. According to on-site education expo interviews of secondary
schools and potential partners in Malaysia, for example, students would be admitted to
overseas institutions either in Spring or in Fall. Another critical factor for attracting
non-local students is to establish a credit transfer system between HEIs.
Furthermore, in order to provide a safe and multi-culturally sensitive campus to
non-local students, it is recommended that Hong Kong higher education institutions
should set up an international student office to provide one-stop on-campus support
services to non-local students, ranging from orientation of university life,
accommodation (home stay), library facilities, language support, academic and
personal counseling services.
Mixed mode. In addition to inbound mode, HEIs in Hong Kong may also consider
offering mixed mode as a secondary priority to prospective students in these three
target markets. Individual HEIs who are able to sustain the scheme of mixed mode
may decide when to launch it. Based on the overall findings of this study, some
respondents were in favor of a mixed mode approach to study an overseas degree. The
advantages of the mixed mode include familiar educational setting, more affordable
tuition fees and staying close with family members during the major trunk of studies
and gaining overseas exposure/internship. Hence it is recommended that a mixed mode
should be offered in different structures to accommodate diverse needs of non-local
students such as doing the first two years of studies locally while spending the final
year overseas (2 þ 1). These measures will make our joint programs more competitive
and affordable. Although some respondents opted for doing the whole overseas degree
locally (3 þ 0) this seems to be less attractive in the long run.
For the sake of quality assurance, it is important to have a proper quality
assurance/qualification accreditation mechanism. Curriculum monitoring and the
physical presence of professors to deliver the services within the territory of the
member would be important. Preferably, the joint programs will be taught by local
faculty members of high caliber and with international exposure. Besides, the frequent
communications between the degree offered institutions and the market academics on
program quality issues will be critical to address the quality assurance issues.
Outbound mode. The third priority or a lower priority would be outbound mode, i.e.
foreign institutions offer degree program locally in these target markets. Similar to
mixed mode, individual HEIs may decide when to launch it should they find
themselves able to sustain such scheme of outbound mode. Based on our survey and
interviews, there is also a high demand for outbound mode. In order to build a Hong
Kong brand and uphold its academic rigorousness, it is recommended that attempts to
develop outbound programs should begin as partnership with renowned overseas
institutions in the target markets. To facilitate this, the first step will be to strengthen
IJEM the current academic and student exchange programs between Hong Kong and the
24,5 target markets.
In line with the practices of our competitors in exporting higher education in the
target markets and the demand for outbound mode, the next steps would be
collaborating with renowned higher institutions in the target markets to offer joint
programs.
442
Price
Among the 4Ps, price is always an important factor for these prospective students to
consider when pursuing education overseas. As Singapore appears to be one of the
most popular destinations of providing higher education services to the target markets
and our key competitor, it is important to make our tuition costs as comparable as to
that of Singapore to remain competitive. It is noteworthy that although Singapore’s full
tuition fees may be high, its government is keen to provide grants and scholarships to
reduce the financial burden of non-local students.
In line with the current practices of competitors, such as Singapore, financial aids
should be given to outstanding non-local students. As the Singaporean government
also offers low interest loans to non-local students, the Hong Kong government may
also consider whether it should work with banks to provide loans for non-local
students. In the case of India where banking institutions are often making loans to help
Indian students to seek overseas study, attempts should be made to work with these
lending institutions to make sure students who are planning to pursue overseas
education in Hong Kong are qualified for such loan.
Price differentiation (including providing more favorable rate to students from
less-developed countries) is also recommended for consideration. This may help to
attract non-local students in the target markets to choose Hong Kong as their potential
destination. Moreover, bursaries for non-local eligible applicants are also important to
encourage them to consider Hong Kong as their potential destination for higher
education. Besides, to help non-local students to finance their studies and gain more
exposure to Hong Kong society, restrictions on studentship and part-time work should
be relaxed.

Promotion
Promotion represents the various aspects of marketing communications and perhaps
has become the most important component among the 4Ps. Overall findings of the
study clearly indicated that Hong Kong was not well known to the respondents in these
target markets. In contrast, Singapore, Hong Kong’s key competitor, has been
campaigning aggressively in these target markets in the past few years. In addition,
more and more countries are stepping up their effort in promoting their higher
education overseas. As Gibbs and Knapp (2002) mentioned, “A survey indicated
governments spent about 6% of their overall budget on educational marketing.” To
facilitate the export of Hong Kong higher education services, the Hong Kong
government and HEIs should increase the visibility of Hong Kong’s higher education
in these target markets. Based on the key findings, the following four promotional
strategies are recommended for consideration.
Focusing on uniqueness and strengths of our products. First and foremost, Hong
Kong should focus on its uniqueness and strengths, which include programs with high
international rankings, China factors, international components, and rigorous quality Market
assurance mechanism when promoting Hong Kong’s higher education in these target segmentations
markets (Cheung et al., 2009). Individual higher education institutions in Hong Kong
should also tap into the overall strengths when marketing their programs overseas. and strategies
Working with local agents and local popular web site in the target markets. Second,
promotional activities on the internet should be one of our primary focuses.
Approximately 70 percent of all student respondents said that Internet was their 443
preferred channel to obtain information about overseas education. While Singapore
has established substantial networks with local agents in the target markets’ popular
web sites, Hong Kong is hidden from major sources of information providers. To
achieve this, it is recommended that higher education institutions should work with
local agents and local popular web sites (e.g. local major newspapers, education web
sites) to create hyperlinks and to provide advertisements in promoting higher
education in Hong Kong to students in these target markets via local web sites.
Making a concerted effort in participating in education events overseas. Third, based
on our findings education expos were described as one of the most effective channels
by respondents. At the Star Expo held in Kuala Lumpur in January 2008, for example,
the Singaporean higher education institutions led by a government coordinated body
(Education Services Division of the Singapore Tourism Board) set up their booths with
uniform color code (green) and took up one complete alley. In addition to HEIs,
government agencies such as Immigration Department and Education Department
were also present. This impressive presence allowed potential students to gather
information and make enquires to different Singaporean programs on the same spot.
Though individual higher education institutions from Hong Kong also appeared at the
same expos, since their booths were distant apart the visibility was very low as
compared to Singapore. It is therefore recommended that all HEIs should work with a
designated agency to organize and participate in on-site international education fairs
and expos to increase the visibility of Hong Kong’s higher education as a whole in
these target markets.
Reaching out to other stakeholders such as parents by using other more traditional
channels. Fourth, as indicated previously, studying abroad is usually a joint decision.
Thus we need to reach out to different stakeholders by using different channels. The
needs of parents, relatives and teachers should also be included in promotion
strategies. Media outlets such as the television, local major papers (e.g. Star in
Malaysia) and cinemas are also the popular means of promotion.
Working with schools directly. Finally, both institutional and people networking are
important means as words of mouth are one of the effective ways to reach
stakeholders. Based on our interviews with several principals in these target markets,
working with schools directly is also an effective promotional strategies. It is
recommended that conducting informational sessions and seminars on Hong Kong’s
higher education by faculty members from various higher education institutions in
selected target schools and cities could be useful.
The aforementioned promotional strategies will no doubt raise the visibility of Hong
Kong’s higher education in these target markets. However, in order to optimize the
cost-effectiveness of the selected channels in promoting education services and
attracting non-local students, cost factor should be taken into consideration in
prioritizing the preferred information channels for Hong Kong’s HEIs.
IJEM Targeting cities with high Chinese population. As mentioned in previous section,
24,5 there is a sizable Chinese population in the target markets, especially in Malaysia and
Indonesia. It is therefore recommended that cities with high Chinese population should
also be the focus. Below highlights five targeted cities in each of these target markets:
(1) Malaysia (see Figure 11):
444 .
Ipoh (70 percent).
. Petaling Jaya (55 percent).
.
Kuala Lumpur (44 percent).
.
George Town, Penang (47 percent).
.
Kuching, Sarawak (38 percent).
(2) Indonesia (see Figure 12):
.
Medan (10 percent).

Figure 11.
Malaysian Chinese
population in the
recommended cities

Figure 12.
Indonesian Chinese
population in the
recommended cities
 .
Semarang (10 percent). Market
.
Surabaya (7 percent). segmentations
.
Jakarta (6 percent). and strategies
.
Bandung (5 percent).

It will be a help if Hong Kong can establish ties with ethnic Chinese association in the
target cities, particularly those working with education, an example of which is the
445
United Chinese School Committees Association of Malaysia.

Conclusions
This study has highlighted the current conditions of the three target markets and
provided an overview of a market segmentation analysis. In addition, several market
entry strategies have been made to better position Hong Kong in exporting education
services in these emerging markets. Based on both quantitative and qualitative
findings, the study found the importance of market segmentation and the 4Ps variables
in formulating marketing strategies in these Asian markets. It is hoped that this study
can provide useful reference to education decision makers in Hong Kong and elsewhere
who may be interested in exporting educational services to these target markets.
Although the Hong Kong government and HEIs have been stepping up their efforts
in promoting their higher education overseas in the last three years, more needs to be
done in order to compete in these heated markets. As a late starter, Hong Kong has to
analyze the potential markets critically and employ marketing strategies sensibly if
she is to establish herself as a regional hub of higher educational services in Asia.
Careful marketing is particularly crucial given that competitors like the UK, Australia,
and Singapore are already well established in the region and each of these countries is
assisted in marketing by the research efforts of their specialized agencies. In the case of
Singapore, the Education Strategic Marketing Department of the Education Services
Division works on competitive analysis and research (Singapore Education, n.d.). In a
similar token, the Australian Education International of Australia also studies market
trends on behalf of its country (Australia Education International, n.d.). These efforts
in return support the developing of appropriate marketing strategies to penetrate the
markets in the Asian Region. In fact, the three countries have been very successful in
exporting their higher educational services. Exporting education service, for example,
has already become Australia’s third largest export (Luke, 2005). Indeed further
research into consumer behaviors and market intelligence are essential. Alertness to
the changing demand of the unemployment needs of the target markets, as well as the
strategies adopted by successful competitors, can also be important. As Mazzarol and
Soutar (2001) argued that to improve the information on segmentation in international
education, rigorous research into consumer behaviors is a must.

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Corresponding author
Alan C.K. Cheung can be contacted at: acheung@jhu.edu

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