Program to Improve Private Early Education (PIPE)
Motivations Driving Affordable Private School Owners
Affordable Private School (APS) owners are likely to invest in educational products and services if they see an opportunity to differentiate their school in their hyper-competitive micro-market.
FSG introduced education products and services to over 100 APS administrators and conducted detailed interviews with 40 APS administrators to develop a comprehensive understanding of how APS administrators make purchase decisions.
Key insights on the motivations, challenges, and buying behavior of affordable private school owners in India include:
- APSs are generally run by individuals or families who often do not have educational qualifications. Most APSs are standalone schools, and not part of a chain.
- The APS market is highly fragmented and schools heavily rely on word-of-mouth publicity to attract new students.
- FSG estimates that there are 130,000 – 160,000 APSs in urban India.
- Pre-primary classes contribute to more than 90 percent of new enrollments every year.
- APSs tend to be run as businesses, and decisions regarding the school are driven by their impacts on revenue and cost. A well running APS can make a profit of over INR 1.5 million annually (about USD $25,000).
- APS administrators have a deep understanding of their customers and their payment capacities and aim to provide education at an affordable price point.
- APS administrators know that many parents judge quality based on easily visible factors such as Class 10 results, the English language skills of the child, or the presence of technology in the school.
- APS administrators are keen to adopt interventions that help differentiate their school from competition, such as English classes.
- APS administrators have the final say, over teachers and principals, in selecting products and services for the school. They tend to pick products and services that are affordable, align with their parents’ motivations, and can be easily integrated into the school’s operations.
Learn more about APS owner motivations, challenges, and buying behavior here.