Students as Customers and Higher Education as Industry: A Review of the Literature and the Legal Implications

TLDR: In this article, the authors review the literature about students as customers and outline the ways in which commercial laws that protect all market participants whether they are customers or competitors or the general public may apply to the activities of universities.

Abstract: INTRODUCTION Higher education all over the world has undergone many changes over the last few decades. As some commentators have observed, "what was an enterprise of culture now displays the features of an enterprise culture in which education is a commodity" (Symes & Hopkins, 1994, p.47). Interest in quality issues in higher education is also a worldwide phenomenon (Wilson, 1996). Although the word 'customer' is being used apologetically by some commentators who frame it in quotation marks, it is being used ardently by others as the key to the vexed question of how we decided what quality is in universities (Baldwin, 1994, p.129). As universities are being required to be more responsive to the needs of their customers, the debate in the literature has mainly been about identifying exactly who is the customer in the higher education industry. It is common to view the student as the customer but this notion is by no means universally accepted either from an educational or a marketing perspective. The first part of this paper reviews the literature about students as customers. Given the difficulty in using the word customer to describe the student/university relationship, the debate must move away from identifying the customer and now focus on universities as service providers. In most jurisdictions, legislation implies certain terms into consumer contracts and ensures certain standards of business behaviour by, for example, prohibiting misleading conduct and anti-competitive conduct. The paper continues with an outline of the ways in which commercial laws that protect all market participants whether they are customers or competitors or the general public may apply to the activities of universities. STUDENTS AS CUSTOMERS: THE MARKETING AND MANAGEMENT PERSPECTIVE The term 'customer' is a central term in the quality movement known as Total Quality Management or TQM. Although it has been argued that TQM has a limited amount to offer higher education (Hall, 1996), the movement has also been embraced by others as potentially the solution as to how to improve the quality of the services provided by higher education institutions (Williams, 1993). One of the main themes of TQM is the importance of meeting customer needs. It has been argued that universities that do not treat their students as customers entitled to an efficient and high quality service will lose out to those that do (Williams, 1993, p.235). Although the idea of treating students as customers is controversial because of the implied shift in power, applying TQM in the classroom simply means that teachers should be more open to student feedback and should measure success by how well students are learning (Turner, 1995, p.108). However, Sirvanci (1996) stresses that there are some fundamental differences between customers and students. Customers are free to purchase goods and services and businesses do not restrict sales to a select group based on personal attributes. Yet universities restrict admissions and are not open to all prospective students even if the students are willing to pay the price being asked. Customers generally pay the price for the goods and services they purchase with their own funds. Students do not necessarily pay for their higher education themselves because tuition may be subsidised by taxpayers and often completely or partially paid by parents. Customers are also not required to prove merit. However, once admitted to a university, students are continually tested and graded and those who fail are required to repeat a course and are prevented from taking more advanced courses. As Hall (1996) comments, can there be any other markets where the supplier is able to take the customer's money, engage in a long and complex interaction with them and then refuse to give them the product that they want, the degree? It has been suggested that students are in fact the 'products' rather than the customers of the higher education industry. …