Prince: Pre-School Education Industry

The future of the pre-school education industry in the next five or ten years – one is tempted to say the market will be saturated, fragmented, and run mostly by individual on the basis of sole-proprietorship. This is because the industry is less-regulated by the government, and any Tom, Dick and Harry with a diploma in Montessori teaching will be able to start their own kindergarten somewhere within the residential areas. All it requires is a small start-up capital. With the growing number of converted corner-house into kindergartens in the market, eventually, they will have to fight for the dwindling market share with smaller portions among shareholders.

One must understand that the essence of a kindergarten business is no longer about child play, but it is about providing quality pre-school education. The young and emerging executives in Malaysia are brought-up with different family-value under the society, and the trend in this society puts parental planning importantly, hence the fewer off springs. The urge towards setting-up small family has led to the growing parental concern on their children’s education, and for this reason, parents are becoming demanding and pushy with their child’s interest.

Nowadays, parents are better-paid and have more saving with fewer children in the family. They are willing to enrol their kids in luxurious-kindergarten with better teaching qualities and for the better environment for children developmental needs. Some parents are already paying as much as RM 1,000 monthly for a half-day program in kindergarten. Unfortunately, there are only a number of ideal-kindergartens around, and those kindergartens are yet considered as providing the best quality.

‘Kindergartens no longer able to sustain with routine-marketing-activities, they need to change’

The marketing gimmicks for kindergarten are remarkably predictable. They often engaged in routine marketing activities such as open day, banner advertisement, and brochures distribution while established kindergartens such as Smart-Readers and Q-Dees will leverage on economies of scale to invest in newspaper advertisement. Nevertheless, most kindergartens are engaging in passive marketing activities; it is a passive branding approach. Some kindergartens believe that branding is achievable when the products enjoy a significant presence in the market for a long duration; that time is the factor, thus, requires neither creativity nor innovation for these branding activities.

Parent loyalty is nurtured through the relationship of the principal with parents. The way the relationship is bridged is called the ‘principal-parent-relationship'. It is the personal relationship of the parents with principal alone. However, with the ability of the principal alone, it is impossible to serve every parent.

Kindergartens lack of the knowledge to build strategic response to face the changing demography, and their shallow marketing and management knowledge does not make any significant contribution to the recruitment and branding activities, as well as to the whole kindergarten industry.

‘Kindergartens need to move toward corporativism’

There are hundreds of kindergartens locked in the markets, whose operation is still described as ‘individually-approach’. It is still a long way for the industry to move toward ‘corporativism’. For kindergartens to outperform competitors, they cannot rely solely on routine marketing activities alone, but also areas to build their internal-strength. There are a few areas which a kindergarten can improve to create competencies, and most importantly, becoming the market leader.

‘Service Quality is your competency’

Organizations are looking forward to transform their services into one of their competencies because they believe that service quality is one of the criteria to becoming a successful organization. Similarly, Kindergartens should improve their service quality because tip-top service quality allows kindergartens to market their product more effectively, and to be outstanding among the competitors, most crucially, it ensures parent-children satisfaction.

Quality service means responding to parents’ enquiry and complaint tactfully within a certain timeframe. Kindergarten can create positions such as a Parent Liaison Officers, whom take responsibilities to communicate with parents and becoming a bridge between the academic team and parents. Parent Liaison Officers can eventually help to give constructive comments to improve academic standards based on their understanding of parents’ need.

Children are the end-users whom emotions and moods are deeply associated with kindergarten. Therefore, at the end of the day, children are the reflection of your quality. With this, kindergartens must ensure that children are happy, safe and healthy in the campus, i.e., the food provided must be under strict nutrition control and the campus must be able to ensure children’s safety with constant monitoring through CCTV.

‘Strong Academic Team strengthens your market position’’

Kindergartens cannot be competitive without a strong academic team. The academic team is the heart of kindergartens and it helps to produce the desired results. Not forgetting children are the product, and that quality refers to the ability of children to read and write well, thus, a good academic team contributes to quality product, and kindergartens can compete remarkably well if the academic team do markedly better.

Kindergarten is an educational service, which requires human capital. They must ensure employees are satisfied with the organization in order to have high degree of parent-satisfaction. Kindergartens can introduce share-ownership or partnership program as one of the employees’ retention strategy. They can also create the position of ‘Vice Principal Trainee’ to train the teachers for future expansion needs; in addition, it is also part of career advancement pathway for teachers.

HR function also plays an important role in determining the quality of the academic team. They need to be more cautious in recruitment services, and set minimum criteria for recruitment function to perform effectively. It is also crucial for kindergarten to improve their productivity through extensive training to get the most out of each and every academic staffs. Kindergarten should also provide continuous training to enhance their knowledge in customer service, childcare skill and classroom management skill.

‘Economies of Scale rely on the size of Kindergarten’

‘Size does matter’, of course, you cannot expect children to grow up in a confined environment. The campus environment must be conducive. Furthermore, bigger kindergartens can leverage on their economies of scale, and it determines the number of children that can be recruited.

‘Parent-Children Relationship Management & Online CCTV’

Investment in computer system is a must to ensure smooth flow of day-to-day operation. Kindergartens need a computer-system that is able to access by every department for different purposes.

For example, Administration department can use the system to record children data such as allergy, personal doctor or family contact number; Account and Finance Department can utilize the system to check transaction and payment history; Marketing department can use the system for direct mailing and performing parent-children profiling; while Academic team can provide constant update on children performance through the system. Upon emergency, system can also help to swiftly look up on the children information.

In addition, the system must be able to integrate with kindergarten web-system to allow parents to access to their children record-book online. Kindergartens can also invest in online CCTV as a value added services for parents; parents can then log in with their password and user name to observe the teachers conducting the class.

‘The Business Model marks the difference between Coffee Bean and Traditional Coffee Shop in the market’

There is a different if you compare Seven-Eleven outlets with the traditional grocery store around the corner. They may be selling the same groceries in the shop but with different brands, and most crucially, Seven-Eleven is able to expand in quick-pace.

This is attributing to the good business model. Seven-Eleven is adopting a model called the ‘Retail Business Model’. Another good example; you can expect the same service, product and design in every McDonald outlet. It is neither Machine nor ‘Ronald McDonald’! It is because they have the business-model! McDonald planted their model from outlet to outlets, creating the similarity and standardization in each outlet.

Similarly, Kindergartens need to have a business model for expansion and move forward to becoming a corporate entity. They can start with designing policy handbook, and guidelines for each different department.

Each department will have to generate a policy that congruent with organizations’ vision. The policy handbook will be planted in the new outlets. Employees from the headquarters will be sent to the new outlet to ensure the model is properly planted. Employees must understand the policy thoroughly in order to uphold the quality of the kindergartens. The policy handbook will also guide the outlet employees in handling day-to-day routine to ensure smooth flow of operation. It also helps to maintain certain degree of service quality which benchmarks the headquarters.

The changing demography will affect the kindergarten industry totality. Hence, kindergartens need to strategically response to the changes by building their brand in the market; through the systematization of the business-operation, consolidation of the academic team, building service quality, nurturing creativity in marketing, and last but not least, the application of the correct business model.