Competitive advantage through marketing education
by Dr Chris Baumann and Dr Francis Yue
Business and marketing education always has a key theme across all courses depending on the current state of the economy. When I (the first author) did my undergraduate degree in the 1990s, that theme was cost cutting and cost control. Then when I did my MBA in Canada, that theme was ‘competitive advantage’, and now it seems in Australia we focus on sustainability. My recent teaching for Macquarie University in our Hong Kong program made me rethink the priorities in business and marketing education.
Sustainability is important, but sustainability of what? No doubt environmental concerns must be a focus in society, but increasingly the question is also how to create sustainability of economic progression for countries and firms alike. In order to prepare future leaders for an increasingly competitive global environment, business education must play a key role in generating a competitive advantage, and Hong Kong is an interesting role model in this regard.
Marketing in Hong Kong is fiercely competitive, reflecting equally competitive East Asian markets in Mainland China, Taiwan, and also Korea and Japan. Students in East Asia are exposed to intense competition starting from their elementary school right through to their high school days, often peaking in rigorous university entrance exams. Once accepted into university programs, students face competition for scholarships and top of the class rankings that will ultimately lead to postgraduate studies or a top job upon graduation.
Table 1: Distribution of educational attainment of Hong Kong population aged 15+
Source: Education Bureau, Government of the Hong Kong Special Administrative Region
Table 2: Australian education participation rates (by age)
Source: Australian Bureau of Statistics (May 2011 data)
While in Hong Kong the percentage of the adult population attaining post-secondary degrees has increased from 15.8% in 2006 to 19.6% in 2011 (Table 1), in contrast an astonishing 40.4% of 20 to 24 year olds in Australia study at the tertiary level (Table 2). This also means that competition in Hong Kong is much fiercer in terms of university entry, much fiercer within the program, and fiercer to obtain funding for postgraduate studies such as a Master or Doctoral degrees.
The competitive environment in Hong Kong’s education system ultimately results in a very competitive workforce since the entire education and business system focuses on performance. For example at Cathay Pacific, Hong Kong’s major airline, each and every flight attendant is selected and trained to aspire to provide a service resulting in full customer satisfaction and ultimately customer loyalty. The goal is to be better than the competition. This service-oriented attitude and behaviour in turn creates a competitive advantage for the airline, and ultimately, if all firms generate such competitive advantages, then global competitiveness for Hong Kong is achieved.
Australian education focuses less on competition but has a strong emphasis on social inclusion and opening avenues for students to apply for some form of special consideration when performance is weak due to personal circumstances. In East Asia, in contrast, special consideration is only granted due to medical emergencies, and the difference in competitiveness is also reflected in the diverging performance evaluation systems.
Grading can follow either a ‘norm referencing approach’ or a ‘criterion referencing approach’. Norm referenced assessments ultimately rank students’ performance, resulting in a bell curve (or normal distribution). This means that performance is assessed relative to other students and as such is competitive. In contrast, the criterion referencing approach assesses students’ performance based on clearly stated criteria and standards. Under this approach, performance is assessed in absolute terms, regardless of other students, and is thus generally less competitive.
Performance of students at Australian universities is often based on the less-competitive criterion referencing method, but in Hong Kong, performance is generally assessed based on the norm referencing approach. The question is, however, which system reflects the global competitive business and marketing environment more accurately, where in simple terms, Employee A has to be better than Employee B, and Firm A has to be better than Firm B?
At Cathay Pacific (where employees have experienced the norm referencing approach while at school/university), each flight attendant goes out of their way to please, to be better than the competition. Contrast this to my recent experience on a Qantas flight. When passengers boarded the plane, flight attendants gathered in the galley for a private chat, but there was little formal greeting of passengers. Based on the criterion referencing approach, Qantas flight attendants get a tick for this attitude and behaviour. They were wearing the required uniform and were present on board: criteria fulfilled. But from a norm referencing approach (so putting their performance in relation to the competition), there was insufficient greeting of passengers with no offering of help with finding seats or storing luggage. Impeccable customer service, however, is standard with competing award-winning Asian carriers such as Cathay Pacific, Asiana (in Korea) or Singapore Airlines that all understand their key competitive advantage: a positive and memorable in-flight experience.
Why is the level of service quality in East Asia so high, so competitive? The East Asian education system focuses on performance and discipline, preparing students for a competitive business and marketing environment. Educators in Hong Kong/China, Korea and Singapore understand that intelligence and acquiring knowledge and skills are no longer sufficient to be globally competitive. Education needs to reflect the competitive environment to prepare students for a fiercely competitive workforce and business environment. Education and corporate training need to instil a ‘passion to perform’ such as is showcased in Asian hospitality at airlines, hotels and restaurants.
Education ought to prepare graduates to generate future competitive advantages, and such preparation must occur at various levels: schools, universities, and corporate training. If education passes on a positive performance (and service) attitude, aspiration, professional manners and courtesy, then economic sustainability can be achieved through the creation of competitive advantages.
Dr Chris Baumann is a senior lecturer at Macquarie University in Sydney, Australia. His research includes customer loyalty, competitiveness in education and society, ethnic marketing, and East Asia (China and Korea). He has been appointed as a visiting professor at Seoul National University (SNU) in South Korea and at Aarhus University in Denmark.
Dr Francis Yue is a senior lecturer at City University of Hong Kong and a programme leader at SCOPE (School of Continuing and Professional Education). His research interests include assessment of student performance and customer relationship management.