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Education UK Campaigns and Strategic Initiatives: Agent Strategy

March 2002

Education UK Developing the UKs International Education Agent Network

Prepared by: Jean Krasocki Education Consultant

Promotions and Partnerships (ECS), The British Council

Education UK Campaigns and Strategic Initiatives: Agent Strategy

March 2002

Contents
1. Introduction 1.1 1.2 Aims and objectives Methodology 3 3 3 3 3 3 4 4 4 5 5 6 6 6 9 10 11 11

2. Background 2.1 2.2 2.3 3 Definition The role of agents Financial arrangements

Market reviews summary of findings 3.1 3.2 3.3 3.4 Overall position and legal framework Current financial arrangements Alternative agents and market access routes Competitor country analysis

Conclusions and recommendations 4.1 4.2 4.3 4.4 4.5 Building agent capacity Encouraging UK institutions to make more effective use of agents Country focus Existing British Council placement scheme Financing agent support services

Appendices Appendix I Appendix II Appendix III Appendix IV Menu of Agent Services Agent Market Review: China Agent Market Review: India Agent Market Review: Japan

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Education UK Campaigns and Strategic Initiatives: Agent Strategy

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1
1.1

Introduction
Aims and objectives

This report, commissioned by the Education Counselling Service of the British Council, examines the role of education agents in the recruitment of international students to the UK and considers ways in which their use might be extended. Specifically the objectives are to: 1.2 identify how the agent networks need to be developed as a key part of the Education UK marketing brand campaign taking into account the likely impact of possible e-recruitment developments; identify the role of the British Council in developing the networks; develop flexible models for working effectively with agents which can be used in key countries for the benefit of UK recruitment in all sectors. Methodology

The fieldwork for this report was carried out in 2001. It included interviews in the UK with education providers representing all sectors, UK-based Council staff, education consultants and other industry contacts. Further information was obtained from contacts abroad, desk research and a questionnaire sent to all ECS supported and other selected overseas Council offices. In addition in-depth agents market reviews were undertaken in China, India and Japan. Reports on the role of agents in each of these three countries are contained in the country market reviews attached as Appendices II, III and VI respectively.

2
2.1

Background
Definition

In this report an education agent is defined as an individual, company or other organisation providing services on a commercial basis to help students and their parents gain places on study programmes overseas. Agents use a range of different titles to describe themselves, including student advisor, education consultant and representative. Most fall into one of three broad categories: education specialists who place students on behalf of one or more institutions; education specialists who place students but with no ties to any particular institution; non-education specialists, for example travel agents and publishers, who may offer overseas education placement services as a subsidiary activity.

Other individuals may work as education agents, or in a similar capacity, including alumni, parents and overseas-based staff running institutional in-country offices. 2.2 The role of agents

Agents have only a limited role in raising general interest in study abroad but they play a very important role as intermediaries helping to convert interest from students, particularly younger students (and their parents), into actual placements in institutions abroad. As such, agents are an important means of increasing access to overseas education markets.
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Education UK Campaigns and Strategic Initiatives: Agent Strategy

March 2002

In many countries students and parents use agents to arrange study abroad because they lack knowledge and understanding of overseas education systems. Even where students or their parents find suitable placements on their own, they often lack the confidence or time to complete the necessary formalities, especially visa application procedures, without help and choose to pay for assistance from an agent. In countries where many customers have limited English language skills, agents have an even more important role since they offer information and advice in the customers own language. In some cases agents are valued for the follow-up services they provide during the period of study abroad, for example liaison between parents and institutions, finding guardians and emergency support. Many agents also provide predeparture briefings on behalf of institutions. For institutions, use of reputable agents offers a cost-effective means of increasing outreach, especially in larger overseas markets. Where direct recruitment activities by overseas institutions are tightly controlled or limited, as in China for example, the value of a reputable agent is even more apparent. 2.3 Financial arrangements

The services agents provide to students may be paid for by the students themselves (their parents) or the overseas provider of the study programmes or both. Most agents representing institutions work on a commission basis and are paid an agreed percentage of the tuition fee received from each successfully placed student. The institution may also pay a retainer and/or contribute to the cost of promotional work undertaken by the agent on their behalf. Service fees collected from students vary enormously from a small fixed fee levied to deter nonserious customers to significant sums which cover a wide range of services embracing help to secure the education placement as well as such things as visa application assistance and the making of travel arrangements.

3
3.1

Market reviews summary of findings


Overall position and legal framework

In many countries there is huge variation in the quality and effectiveness of agents. This is especially the case in the less mature markets. In most countries there is no government or official control over agents and a free-for-all situation prevails. Even where an agents association exists, the element of self-regulation is often weak. Agents generally have a poor knowledge of UK education and this significantly limits UK growth in many markets. UK institutions find it hard to identify reliable agents with whom they would feel comfortable working. Similarly agents find it hard to link with UK institutional clients, or enough of them. Direct overtures made by agents to institutions are mostly ignored. Most of the successful arrangements have resulted from introductions made by key contacts. To be effective, agents need support from their institutional clients in terms of staff training, the provision of promotional materials, reasonable response times to applications/enquiries as well as participation in agent promotional events, presentations and interviews. Few UK institutions provide support to agents at the level needed to establish a successful relationship, although this does vary between the different education sectors.
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3.2

Current financial arrangements

Agents typically charge students (parents) service fees in addition to collecting commissions. Fees are market driven, high in less mature markets and reduce as the market gets more competitive. In some cases the services provided by agents are financed entirely by fees paid by students and their parents. This is normally the case where agents assist with applications made to top-ranking universities in the US and the UK. With some exceptions, commission rates paid by UK institutions vary little between source countries. UK HE providers generally pay 10% of the first year fee with rates offered by boarding schools, private language schools and FE colleges varying between 10% and 20% depending on the course. There is a growing trend in some countries for additional commission payments to be paid in respect of continuing students. Commission rates paid by Australian institutions are generally slightly higher than UK levels. UK institutions (especially universities and further education colleges) compare unfavourably with their competitor country counterparts because of the way commission payments are made, particularly on the grounds of slow payment. There is also another aspect of current UK financial practice that undermines agent relationships in two of the countries visited. In all competitor countries students are required to pay substantial deposits when they accept a place and in Australia it is also a pre-condition of visa issue. This means that should a student fail to take up an accepted place, (for reasons other than visa rejection) funds are still available to cover administrative expenses, including agents commission. However, few UK universities and public sector FE colleges collect deposits from students. In addition, since commission payments are usually withheld by UK institutions until student fees have been paid, the agent is required to shoulder most of the financial risk of student no-shows in the UK. 3.3 Alternative agents and market access routes

In some countries, education institutions (universities, colleges and schools) are keen to develop agency-type arrangements with overseas partners in order to provide progression routes and credit transfer to courses abroad or study abroad experience for their students. In effect, the institutions recruit for their overseas partners from among their own student bodies and sometimes more broadly. As an incentive the overseas partner sets aside funds, equivalent to the commission payments it would have paid to a commercial agent, for use by the institution. These funds are used in a number of ways, including staff development, and the provision of student scholarships or bursaries. For example, one university in China has agreements of this type with several UK universities. In each case 10% of the tuition fee income received from the students recruited is contributed to staff development funds held by the UK partners. Growing numbers of the Chinese Universitys staff are being sent to the UK to gain higher level qualifications at the UK partner institutions with the use of these funds. In Japan, an agreement of this kind between a Junior College and a UK FE college makes available funds to pay for field trips, additional classes and other activities which enhance the study abroad experience of the Japanese students. Some of the best agents for institutions, especially schools and colleges, are parents of current students. One such example is a parent who is also a well-connected government official. She helps her friends and contacts to send their children to the UK institution even handling visa and passport applications.
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3.4

Competitor country analysis

The situation is varied. In China no competitor country is better off than another as regards the degree to which agents are working effectively on their behalf. In other countries, India for example, Australia has a strong position and in Japan, the US has the advantage. The use of agents by Australian institutions is almost universal. Not surprisingly therefore, Australia is perceived as the clear leader in its effective use of agents, with the UK and the US in a distant second and third place respectively. This view is borne out by recent research1 into international undergraduate students studying in the UK, Australia and the USA. This found that 60% of students studying in Australia had used the services of agents, but only 15% of students in the UK and 10% of those in the US had done so. Importantly, the same research revealed that 80% of students who had used agents found them useful. A significant number of the agents interviewed for this report indicated that they found dealing with Australian institutions easier than those in the UK or the US. Faster turnaround of enquires and applications as well as a more businesslike approach to commission payments were the most frequently sighted reasons. In spite of its popularity with students, the US is not very active in any of the markets visited for this research and few institutions have commission agreements with agents. Nevertheless, many agents still work actively to place students on US courses with their fees covered by charges to students. There is some evidence that the British Councils counterpart organisations for competitor countries, especially those for Australia (AEI2), Canada (CECN3), and New Zealand are actively trying to build agent networks in some countries. They only commit limited resources to agent support activities, however, and most current activity is ad hoc. AEIs efforts to build agent networks for Australia are undermined in some countries by the existence of IDP4 offices that operate in direct competition with local agents.

4
4.1

Conclusions and recommendations


Building agent capacity

The key element of an agent strategy for all three priority markets visited as part of this research project, and the main role for the British Council in those countries, is to build agent capacity to work on behalf of the UK. Specifically, efforts need to be focused on increasing the number, effectiveness and quality of agents working on behalf of UK providers in all relevant sectors. This can be achieved through training, information collection and dissemination as well as other activities aimed at developing the role of agents as marketing partners. It includes the provision of a range of chargeable services for agents. The evidence collected from other priority markets for UK education indicates that this is also the case in those markets where agents are an important feature of the market. In the case of the three markets visited and other relevant ECS supported offices, the need for the British Council to take the lead in agent capacity building is recognised explicitly in
1 2 3 4 International Student Decision Making - A review of the Asian Undergraduate Student Market, LD&A, 1997 & 2000 (research in 10 major source countries: China, Hong Kong, India, Indonesia, Japan, Malaysia, Singapore, Taiwan, Thailand and Sri Lanka) Australian Education International Canadian Education Centre Network IDP Education Australia, a company wholly owned by the Australian Universities, provides commercial placement services to students funded by commission payment from the receiving institutions. page 6

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Education UK Campaigns and Strategic Initiatives: Agent Strategy

March 2002

market development plans. The extent to which this is reflected in operational plans and current practice varies. Nevertheless some excellent work is underway and some of the best ideas and current practice identified have been incorporated in the proposals made in the following paragraphs. Agent training and information services The key elements of the proposed agent training and information services include: Seminars and up-dating sessions on topics of general interest as a way of engaging interest and building relationships with agents as well as developing their market knowledge. Examples of topics include visa regulations (when staff from the local visa sections would be asked to contribute), regulations for student working in the UK, specific UK products and other features such as the UCAS system. Depending on local circumstances these could be run on a programmed regular basis, as a form of agent-specific group counselling and/or an ad-hoc basis to take advantage of visitors (as the British Council India did, for example, with the UCAS representatives recent visit). The seminars could also be used as an opportunity to promote specific training for agents staff who undertake student counselling work (see below). UK familiarisation trips for agents new to UK business or considering UK business. The introduction of a specific training package for agent counsellors to develop UK product knowledge and sales skills. This would be a new package to be developed by ECS Manchester in collaboration with selected trial countries. Essentially it would be a simplified version of the Professional Award for Marketing British Education with an additional sales component. Delivery would be through British Council offices and/or distance delivery via the Internet as well as a component in the UK that incorporates familiarisation visits to UK providers. Providing access to agent specific information services on the local (and where appropriate central) British Council web-site. Ensuring that agents have access to and can make effective use of the existing education information resources available to advise potential students, such as the British Councils first steps visa guidance notes. Information collection and dissemination Any attempt by the British Council to introduce a formal recognition or accreditation scheme is likely to be counter-productive. Instead, it is recommended that the aim of the British Council should be actively to encourage the use of agents by students (as well as their parents) and UK institutions through the provision of improved and proactive information services. The key elements of the proposed services include: Development of agent databases to help students and institutions identify which agents best meet their needs Database for each country (or region/district if appropriate) to include: office location(s), business hours and contact details (mail, telephone, fax, email & web site), date established, company profile (self statement), services provided (including details of any fees & charges), UK institutions represented and/or product focus, whether advice & help can be provided to students generally (or only in regard to the institutions they represent), UK specialist or not, other countries represented, number of staff, total number of counsellors, number of counsellors dealing with UK study, numbers of students sent to the UK in the previous year, level of UK specific counsellor training, memberships of appropriate agent associations. At its simplest the student-focused information included in the database for a particular country (or region/district) would include details of all known agents providing services to students wishing to go to the UK and/or representing UK institutions who want to be included.
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In some countries it might be advisable or even necessary to specify additional criteria for inclusion on the sections of the database which is accessible to students (parents), such as a minimum number of referrals to the UK each year, and/or membership of an education agent accreditation body. Where appropriate, the database should include information only on legally recognised or accredited agents (e.g. China). Student (parent) focused information on agents should be made available, as far as is practicable, on a self-access basis in electronic form, where necessary in the local language(s), to enquirers at British Council offices & via web-sites. Where hard copy information is necessary, it needs to be simple and economical to produce to allow regular updating. Students should be able to access electronic information on a selective basis, such as office location, sector or institutional specialism etc. Hard copy information should be structured to reflect the most important local needs of students/parents and to favour the better agents/representatives. Reference to sources of agent information to be included in all relevant student publications and publicity materials. UK institution-focused information should be provided as an electronic directory for access via ECS subscriber handbooks and/or GETIS. Information provided to students needs to include details of the criteria used for inclusion in the database (or listings) and a disclaimer, which makes it clear that the British Council does not in any formal sense, recognise or accredit the agencies listed. Information would be collected mainly from agents/representatives themselves on an optin basis with simple verification checks being carried out by means of referrals to contracted UK providers, visits to agents premises etc. Initially the data made available to students will be restricted to factual information, which is easy to obtain and verify. However it is envisaged that the sophistication of the system could be developed as agent work progresses to include such things as student ratings on agents services.

Developing the role of agents as marketing partners Key activities and services for this purpose could include: Agent participation at British Council fairs/exhibitions under their own company name banner. The criteria under which Agents would be accepted as exhibitors needs to be clear and open. It may be necessary to restrict numbers and/or participation to UK specialist agents. Agent-run promotion seminars/presentations at British Council premises overseas. These would need to be run as information sessions on particular UK products or institutions and the criteria for accepting bookings clearly set out (could invite bids for participation in British Council set-out programme). This would extend arrangements such as British Council Japan has for the promotion of UK School Education run by Gabbitas Thring. Agent introduction events in-country. These might take the form of agent only sessions during education exhibitions/fairs (for example, the first two hours of an event) and/or the organisation of an agent fair or workshop alongside a promotional event. In the former case this would enable agents to talk to selected institutional representatives and in the latter provider representatives could talk to selected agents (as in the recent agents workshop organised by British Council Beijing). E-recruitment E-recruitment developments may, in the long-term, replace agents as a way forward, more so in some counties than others. However, at present, the evidence points to such developments complementing agent services by meeting the need for improved information outreach in
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order to generate interest in study in the UK (and competitor countries). The conversion of that interest into firm sales is likely to continue to depend on off-line, individually delivered, personal services from agents and the institutions, for the foreseeable future. Positioning the British Council in a supporting role For the British Council to be able to take on the role of agent capacity building in a particular market, it will be vital that it is not seen in any respect to be working as a competitor to the agents in that market. This implies that it will be counter-productive for British Council offices in priority markets to continue to offer, or set up new placement services on a commercial basis (i.e. a service supported by student fees and/or commissions) where these services compete directly with those offered by local agents. Similarly the efforts of the British Council to build agent capacity will be undermined if its criteria for dealing with some agents on a partial basis are not open, clear and justifiable. 4.2 Encouraging UK institutions to make more effective use of agents

In addition to developing agents capability to work for the UK, the securing of increased business from agents in some, if not all, markets will depend on increasing the range and number of UK products that they are able to offer to students (parents) on a commissionable basis. Understanding the role and value of agents Encouraging increased use of agents will depend on gaining wider acceptance and understanding among UK providers of the role and value of agents in student recruitment. It also depends on developing institutional capacity to use agents effectively through training initiatives, good practice guides, model agreements and the like. In particular, in line with the findings and recommendations of the Gilligan Report5, improved process management, a more professional approach to marketing as well as a more realistic, market view about service charges made by agents and recruitment costs generally, is required. The British Council (ECS) is ideally placed to take this agenda forward. It is recommended that the British Council progress one specific aspect of this agenda by encouraging UK institutions to consider collecting substantial deposits from students in specific countries as a prerequisite for the issue of the acceptance letters required for visa purposes. This will protect the interests of institutions and agents where student no-shows have become a particular problem. It would not preclude refunds of deposits to students who have genuine reasons for withdrawing from a study programme or who are refused visas. As an alternative to a cash payment by the student, a bank draft can be lodged with a third party or dispatched to the accepting institutions and cashed only when a visa had been issued or a student fails to enrol without adequate reason. This avoids unnecessary international money transfers in the event of visa refusal. The limitations of the British Council role The proposed focus of the British Council in-country effort on general agent capacity building described above will also encourage more UK institutions to work with agents, through the provision of improved information on reliable agents, in-country agent introductory events, familiarisation trips and the like. However, these measures will only encourage direct participation in any market by a limited number of providers which actively choose to focus on that market and are able and willing to invest the significant resources needed to develop
5 Realising our Potential, Professor Colin Gilligan, ECS 2000 page 9

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and support their own agents/representation. The direct results of this work, in terms of increased student recruitment may be slow to emerge. In addition in most markets, this action alone may not capture sufficient interest from agents to convince them that the significantly increased investment in UK training and promotion work that is needed to accelerate UK market development would be worthwhile. Encouraging a wider range of institutions to work with agents Success in reaching the targets of the Prime Ministers Initiative in some countries is dependent on achieving a broader spread of international students across the UK system and in turn this depends on finding ways of helping and encouraging a wider range of institutions to work with agents. In particular, this applies to smaller institutions, such as schools and colleges with the capacity to admit only a small number of students from any particular source country, or those that want to work with agents in a limited way (for particular products for example). However it also applies to larger institutions that aspire to a broader recruitment base but whose direct marketing efforts are, of necessity, concentrated in a limited number of countries. In these circumstances institutions can be encouraged to use one of the growing number of agent management and student placement services which are being established by private companies. British Council offices overseas may also wish to consider offering specific product focused services which bring together a group of agents and a group of UK institutions for the purpose of promoting products that are most in demand in a particular market. The China EFL summer school model is a good example. Although some institutions are reluctant to work with commercial agents overseas, they may be keen to establish agency partnerships with overseas universities, colleges or schools, where commission payments are used for academic purposes. British Council offices overseas can play a key role in identifying institutions that want links of this kind. 4.3 Country focus

Of the 23 countries designated as priority 1 and priority 2 in the Prime Ministers initiative, where work for the Education UK marketing brand campaign is concentrated, some 17 are countries where agents play a key role in accessing the market. It is recommended that agent development work be concentrated in these countries. The relative priority which needs to be given agent development work within each of these 17 countries will vary and can be assigned by taking into account: each countrys priority status for the Education UK Brand campaign; the relative importance of agents in accessing its market; and the likely impact of UK agent development work in that country on the overall recruitment targets for the PMs initiative. Using these criteria the seventeen countries can be assigned one of four priority levels. The suggested priority level for agent development work for each country is: Priority 1: Brazil China India Japan Russia Priority 2 Korea Indonesia Pakistan Turkey Taiwan Thailand Priority 3 Cyprus Mexico Vietnam Priority 4 Hong Kong Singapore Malaysia

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4.4

Existing British Council placement scheme

This report concentrates on the countries designated as priority 1 and priority 2 as part of the Prime Minsters Initiative. With the exception of Brazil (Recife office), Russia, Turkey and the Gulf States, these countries do not offer British Council placement services. Where placement services are offered by the British Council in significant source markets, agents perceive this as unfair competition even though the number of students placed via Council schemes is very modest. Where this is the situation, it is likely to be detrimental to the longterm interests of the UK market. At worst it may encourage a shift in the business focus of agents to competitor countries. Certainly, such schemes make it more difficult for the British Council offices concerned to take on the wider and potentially more fruitful role of agent capacity building where this is thought to be desirable. In these locations consideration should be given to phasing out the British Council placement scheme and developing a range of support services for agents. 4.5 Financing agent support services

Many of the proposed services for agents and UK providers are labour intensive and have significant resource implications. While ECS subscribers and the British Council might be willing to contribute pump-priming funds for agent services, it is unrealistic to expect them to be funded in this way on a continuing basis. A costed menu of services will be needed in each country as well as for services provided centrally by ECS in the UK. A sample menu of services, including a suggested basis for establishing charges is attached as Appendix I. In new markets where agents are at early stage of development, the provision of such services on a subsidised basis can be justified as the means of engaging agent interest in the UK to accelerate market growth. As markets become more sophisticated, the commercial value of the services that the British Council can provide will rise and charges to agents should be adjusted accordingly. It is recommended that agent training be funded, at least in part, by means of charges to agents and sponsorship where this is possible or appropriate. Where activities are subsidised initially, the aim should be for them to become wholly, or mainly, self-financing in the long term, at least on a direct cost-recovery basis. The pricing of agent training activities generally and counsellor training specifically, as well as other chargeable services, will need to be tailored to local needs taking into account the current level of market development and maturity.

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Appendix I
Menu of Agent Services
Services for UK providers: Access to the British Council database of information on agents Sample agent agreements tailored to the local circumstances and market Referral of students to agents Tailored, in-country visit programmes, for one or more institutions, as an introduction to prospective partners (chargeable) Special agent session incorporated into an education exhibition or other promotional event (costs incorporated as part of main event or offered for a supplementary fee as appropriate) Services for Agents Listing on the British Council information database for students and UK providers (free) Attendance at updating seminars, (chargeable- direct cost recovery basis only, for example, cost of venue hire and refreshments) Agents newsletter/listserv (free or small subscription) Agents information database/website (free or as a subscription service, password protected) Provision of Education UK materials to support agent marketing of the UK as a study destination, including materials in electronic format downloadable from agents database/website (basic supply free, additional requirements chargeable- direct cost recovery basis only) Counsellor training (chargeable) Agent participation in education exhibitions under their own company name banner (chargeable) Agent advertisements incorporated in event promotion campaigns and special publications (chargeable) Display of Agents' brochures in British Council offices (chargeable) Agent run promotion seminars at British Council premises (chargeable) Profile on British Council website (alongside student information on Agents) with direct link to agents own site (chargeable) Individual tailored UK familiarisation trip, including introduction to prospective partners (chargeable) Placement advice to help to agents identify appropriate placements for individual students (subscription service) Central support from the British Council for UK providers Training seminars on working with agents (chargeable- direct cost recovery basis only, for example, cost of venue hire and refreshments) Development and publication of a good practice guide on working with agents

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Appendix I: Menu of Agent Services page 1

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Central support from the British Council UK for overseas offices Development of training package for agent counsellors (variation of the British Council training package for education counsellors) Training and updating seminar packages down-loadable from the British Council Intranet (offices could contribute material from recent sessions they have run) Development of a model code of practice for agents that could be translated as appropriate & tailored to local circumstances by overseas offices Development of model agent agreements that can be translated as appropriate & tailored to local circumstances by overseas offices Development of a database system for agent information.

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Appendix I: Menu of Agent Services page 2

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Appendix II

Agent Market Review: China


1. Background and legal position

The rapid growth of the self-funded overseas study market in China in the 1990s was accompanied by an equally rapid growth in the number of agencies providing services to help students arrange study abroad. By 1999 there were several thousand agents in operation. While many agents provided a valuable service, there were growing Government concerns about the activities of less scrupulous operators who were exploiting students and their parents. This was only one of the Governments many concerns about the growth of overseas education. Other major concerns included the brain-drain effects of the outflow of such large numbers of young people as well as the negative impact on Chinas capital reserves. Although self-funded study abroad is seen as crucial to the development and modernisation of Chinas economy, it became clear that the Government felt that the market should be much more tightly regulated. In response to these issue surrounding education agents the Government intoduced a licensing scheme in late 1999 which included strict new regulations and provided a detailed regulatory framework for the establishment, operation and supervision of agencies in China1. With the introduction of the new regulations, any agency wishing to continue operating was required to apply for a licence. Licences have been strictly limited so that even after three rounds of applications (in March 2002) there were only 228 licensed agents throughout China. Four agents have licences that permit them to operate nation-wide but the rest have licences that only allow them to operate in a particular province, autonomous region or municipality. In spite of the new regulations the agent situation is far from clear and it is still difficult to find reliable, effective agents in China. Although the regulations were introduced to protect students, they also seemed designed to protect the market for weaker government-owned businesses. Some government agencies, which have been criticised for being bureaucratic and inefficient as well as providing inadequate financial incentives for their staff, have been able to obtain licences while applications from many better private agents have been unsuccessful.

The Administration of Self-funded Overseas Study Agency Services Regulations and Implementing Rules, full details are included in the GETIS profile for China. See http://www.britishcouncil.org/promotion/getis/subs/china/agents.htm (ECS member or GETIS login required).
Appendix II: Agent Market Review China page 1

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Inevitably in China, some agents have sought to circumvent the regulations. Many agents who have been unable to get licences are still in business either illegally or by operating in partnership with a licensed agent under some form of sub-licence agreement. The regulations do not provide for sub-licensees so that sub-licensees are often referred to as departments of the recognised agents. They operate on the basis of some form of commission or service fee share arrangement. Since most agents in China charge students (or their parents) substantial service fees in additional to collecting commissions, a popular model is for the parent licensee to collect the service fee while the sub-licensee collects commissions from the overseas partners The new regulations have had little effect on the level of professionalism amongst agents and as yet there is no formal agents association or professional body. Forged documentation is still rife with the AEI2 office in Beijing, for example, reporting that 20% of Australian student visa applications made via agents include forged documents. Few agents are felt to have a strong enough education focus and there is only limited UK product knowledge generally amongst agents. The heads of many agencies have little or no English, which makes it difficult for UK providers to work with them unless they are able to send a Mandarin-speaking representative to conduct negations. At the same time agents have complained that they have difficulty in finding enough UK institutional clients, especially at the pre-university level. Direct overtures made by agents to UK institutions are mostly ignored. Nevertheless there are signs that the situation is improving. Agent training initiatives from the British Council and its counterparts from competitor countries have been received enthusiatically. There are also tentative moves towards the formation of an agents association by a small group of Beijing-based agents who meet together regularly to exchange ideas.

2.

The role of agents in China

In spite of the difficulties, overseas education providers need to work with agents in China since direct access to the international education market is strictly limited. The tightly controlled nature of the market means that foreign enterprises, including overseas education institutions, are not allowed to undertake independent direct marketing and promotion work in China. There is some hope that this situation may change following Chinas entry to the WTO. However, since education falls outside the scope of the initial WTO agreement there is little hope that there will be any move to free-up the international education market in China for at least five years.

Australian Education International, a division of the Australian Government Department of Education, Science and Training (DEST, is responsible for the generic promotion of Australian education abroad.
Appendix II: Agent Market Review China page 2

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While it is possible for Chinese students to arrange study overseas without the help of an agent, it is clear that many, especially younger students and their parents, prefer to use the services of agents and find them helpful. Generally, Chinese students and parents use agents because they lack knowledge and understanding of overseas education systems. Even where students or their parents find suitable placements on their own, they often lack the confidence or time to complete the necessary formalities, especially visa application procedures, without help. Typically this means they choose to pay for assistance from an agent. In China since many customers, particularly parents, have only limited English language skills, agents play an important role since they offer information and advice in Chinese as well as vital follow-up services during the period of study abroad, including liaison with overseas institutions and emergency support. At present Chinese education agents are mainly involved in promoting long-term overseas study options at the schools, FE and HE levels. Little of their work is focused on promoting ELT products at present, mainly because of visa restrictions. ELT preparation courses for older students have to be offered as part of a formal study plan leading to an academic or vocational qualification in order to satisfy visa requirements for most destination countries, including the UK. This situation is changing mainly as a result of the growing demand for overseas ELT summer schools for young learners. Although some agents specialise in promoting study opportunities in one country, including several UK specialists, the majority of licensed agents in China work with institutional clients in several destination countries. However most agent operations were organised so that they had specialist departments and staff for each destination country.

3.

Financial arrangements

Most agents in China charge students (parents) service fees in addition to collecting commissions from overseas institutions. The level of agents service fees varies enormously, as do the services they provide, although most service fees cover visa facilitation. The rates quoted by agents interviewed for this research varied from 8000 RMB (about 6703) for placement on a language-training course of 6 months duration or longer up to 16,500 RMB (about 1,390) for placement on a degree course. According to AEI, service fees can be as high as 50,000 RMB (about 4,200). One agent had differential fees according to the destination country to reflect the varying amount of work needed to facilitate visa applications for those destinations. The lowest fee was 10,000 RMB (about 840) for placement on a UK degree programme and the highest was 16,500 RMB (about 1390) for help to gain a degree place in Canada. The high level of agent service fees in China reflects the early stage of the markets development and a lack of competition. The situation has been exacerbated, at least in the short-term, by the Governments new agent regulations, which has severely restricted the number of recognised agents. As the number of recognised agents increases competition between agencies is expected to intensify and service fees are likely to fall.

at the current exchange rate of 1=11.9 RMB


Appendix II: Agent Market Review China page 3

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March 2002

Commission rates paid by overseas institutions to Chinese agents are similar to those applicable in the other countries surveyed. UK HE providers generally pay 10% of the tuition fee (first year fee only for longer courses) with rates offered by schools and FE colleges varying between 10% and 20% of the tuition fee depending on course type, duration and other factors.

4.

Alternative agents and market access routes

In China, apart from the use of licensed education agents there are significant opportunities to develop recruitment partnerships with education institutions. Some Chinese universities, colleges and schools are keen to develop agency-type arrangements with overseas partners in order to provide progression routes and credit transfer to courses abroad or study abroad experience for their students. In effect, the institutions recruit for their overseas partners from amongst their own student bodies and sometimes more broadly. As an incentive the overseas partner sets aside funds, equivalent to the commission payments it would have paid to a commercial agent, for use by the institution. These funds are used in a number of ways, including staff development, and the provision of student scholarships or bursaries. The Guangdong University of Foreign Studies (GUFS), for example, has agreements of this type with several UK universities. In each case 10% of the tuition fee income received from the students recruited is contributed to staff development funds held by the UK partners. Growing numbers of GUFS staff are being sent to the UK to gain higher level qualifications at the UK partner institutions using these funds. A specialist business and computing college in Beijing has a similar agreement with a UK FE college with the commission payments generated under the arrangement used to fund student scholarships. As in other countries there are also opportunities in China to develop recruitment partnerships with alumni or, in the case of schools and colleges, parents of current students. One institution indicated that one of its best Chinese agents is a parent of a current student who is also a well-connected government official. She helps her friends and contacts to send their children to the UK institution even handling visa and passport applications. Although the agent receives commission payments, since the work is done as a favour to friends and contacts on an informal basis, the institution concerned feels that the arrangement is unlikely to fall foul of the Governments agent regulations. This opinion has not been tested however.

Education Counselling Service

Appendix II: Agent Market Review China page 4

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March 2002

5.

Competitor relationships with agents

In China no competitor country is substantially better off than another as regards the degree to which agents are working effectively on their behalf. This is mainly a reflection of the general lack of professionalism amongst agents at present. The UK currently has some advantage in this market since in comparison to the other main anglophone destinations, (the USA, Canada and Australia) agents perceive UK student visas to be the easiest and quickest to obtain. Chinese agents are keen to work with UK partners as a result. This perception may have changed in Australias favour as a result of the new visa regulations that it introduced in July 2001 (see 5.2 below). However, the introduction on a trial basis of a UK visa fast tracking service for agents in March 2002 is likely to mean the UK has regained its advantage. 5.1 USA

In spite of the popularity of the USA as a study destination, relatively few US institutions are actively working with Chinese education agents. There is a strong general perception in China that getting a US visa is almost impossible for self-funded students and this has discouraged agents from seeking contracts with US providers. The ACEE (American Centre for Educational Exchange) which forms part of the US diplomatic mission in China and inter alia provides information about study opportunities in the US, is making no attempt to change this perception and has no dealings with agents. Its efforts are focused on promoting scholarship-funded postgraduate opportunities to graduates of Chinas top universities and promulgating information about visa processes to encourage potential students to make their own applications for study places and visas directly. 5.2 Australia

A few of the Chinese agents interviewed for this review indicated that they find dealing with Australian institutions to be easier than those in the UK. While this was much less strongly expressed in China than in other countries visited, the reasons were the same. They included the faster turnaround of enquires and applications as well as a more business-like approach to commission payments. In spite of this, the difficulty of obtaining study visas for certain courses in Australia has made some agents less keen to work with Australian providers. With a relaxation of visa regulations in July 2001 this is likely to change. Previously Chinese students were required to achieve an IELTS score of 6.5 in order to obtain an Australian student visa irrespective of the level and type of course they intended to pursue. Under the new regulations IELTS requirements are now set at appropriate levels for the course and level of intended study so that, for example, lower scores are required for school study or foundation courses where language training forms an integral part of the study programme.

Education Counselling Service

Appendix II: Agent Market Review China page 5

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The organisation with responsibly for promoting Australian education in China, AEI, undertakes only limited agent development work such as running occasional training workshops to highlight changes in the visa application procedures and regulations. AEI accepts that the use of agents is necessary to gain access to the market in China, and advises Australian providers accordingly. However, AEI does not offer advice to institutions about the agents it considers to be the most reputable and/or effective nor does it provide students with any information about agents. Controversially, it has been advising Australian institutions that unlicensed agents are likely to be as good or better than the licensed agents. 5.3 Canada

The organisation with responsibly for promoting Canadian education in China is the Canadian Education Centre Network (CECN) office based in the Canadian Embassy in Beijing. The CECN office currently concentrates its limited resources on the provision of student information services and running promotional events. At present its agent development work is limited to the selection and funding of between 8 and 10 Chinese agents to attend an agent fair in Canada in November each year. This annual fair, which is similar to the ARELS Agent workshop held in the UK each year, brings together selected agents from all the key markets for Canadian education to meet Canadian providers and attend seminars and workshop to update their product and country knowledge. Familiarisation visits to Canadian institutions are also organised for the agents during their stay in Canada. In recognition of the importance of agents in China, especially as a means of accessing potential school and college students, the CECN office in China indicated that it intend to scale up its agent development work. It plans, among other things, to run agent training seminars and offer a range of improved information services for agents. One of its key objectives is to broaden the range of agents working for Canada. Currently most agents working for Canada are run by Canadian Chinese.

6.

E-recruitment

The importance of the Internet as a source of study abroad information in China is increasing rapidly but few believe that e-recruitment initiatives will replace agents in the foreseeable future. At present, the evidence points to such developments complementing agent services in China by meeting the need for improved information about study abroad opportunities in the UK (and competitor countries) in order to generate interest in individual providers. The conversion of interest into firm sales is likely to continue to depend on off-line, individually delivered, personal services from agents and the institutions, for the foreseeable future

Education Counselling Service

Appendix II: Agent Market Review China page 6

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March 2002

The collaboration between 263.net, one of the most popular Chinese portals for young people in the age group targeted by the Education UK campaign, and the China Education Service Centre (CESC), one of the biggest government-run education agencies, is typical of current developments. 263.net has an education sub-site that contains general information about education abroad in most destination countries. The British Council has provided the UK content for this site. Enquires generated by the 263.net site are serviced by CESC and there is some form of commission or service-fee share arrangement between the two organisation in respect of the resulting student placements. 263 is now trying to work directly with institutions in the main overseas destinations (the UK Australia, Canada, the USA and New Zealand). It is offering institutions an opportunity to include a profile on the site and to receive enquiries from the site for a one-off annual fee. 263.net hopes to move towards a system of commission on sales-leads generated via the site.

7.

Current British Council work with agents in China

The British Council China gives a high priority to agent development work because agents are such an important means of market access in China. The Council recognised at an early stage that unless the general level of professionalism of education agents was raised substantially it would be difficult for any UK provider to develop effective marketing partnerships with Chinese agents. At the same time, because of the vast scale of the demand for overseas education in China, the Council also recognised that achieving the present target numbers depends on being able to secure a wide distribution of Chinese students amongst UK providers. This means encouraging more UK providers to work with agents in China. The Council has therefore focused its efforts on increasing the number, effectiveness and quality of agents working on behalf of UK providers in all relevant sectors. At present all services to agents are provided free of charge. Specific agent development activities in China have included: Organising training workshops for licensed agents. By July 2001, the Council had run seminars in eight cities attracting over 350 participants from 102 agencies, representing more than half of all licensed agencies. The provision of hard copy Education UK materials to support agent marketing of the UK as a study destination. The development of a password-protected agent network web site providing agents with information about the UK, counselling support as well as down-loadable promotional materials. Organising agent workshops or fairs alongside in-country promotion events to facilitate the introduction of agents to UK providers and vice versa. Producing regional agent directories to provide UK institutions with detailed background information about all licensed agents. Providing information for students to direct them to the licensed agents that can help arrange study abroad in the UK. This includes details of the UK institutions represented by each agent as well an indication of whether the agent(s) can help students to apply to any UK institution or only those with which it has a commission agreement.

Education Counselling Service

Appendix II: Agent Market Review China page 7

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Another Council project in China, primarily aimed at developing the market for UK English language summer schools, is also having a positive spin-off on the Councils work with agents. Under this project, the Council is helping agents to foster working relations with accredited English language schools which clearly demonstrates the Councils value as a marketing partner to agent in China. In comparison with other countries the Council in China does have two distinct advantages which have eased the way for the Council to position itself in a supporting role for agent development work. First, the introduction of the Government licensing scheme for agents means that the Council has no problem selecting agents to work with. It can focus all its efforts on recognised agents and at present there is only a limited number of such agents. Second, since the Council operation in China is new and it does not offer education counselling or commercial services, such as education placement and English language training, the Council has never been seen as a competitor to agents in China Not withstanding its advantages, the Council in China has made very rapid and impressive progress in its agent development work. As a result it has already built strong relations with a significant number of the licensed agents. Initial feedback from agents has been very positive and it is clear that the services that the Council provides are both valued and in line with current agent needs and expectations. Much of the Councils work in China provides a model of good practice that can be adapted to help progress agent development work in other key markets.

8.

Future Council agent development work in China

The Council in China plans to build on the foundations it has laid by extending its range of professional development activities for agents. This includes undertaking further agent training, providing enhanced information services and opportunities for professional networking as well as organising further events to introduce agents to potential UK client institutions. In a new market such as China where agents are at early stage of development, the provision of free or subsidised agent services can be justified as the means of engaging agent interest in the UK to accelerate market growth. As the market develops, the commercial value of the services that the British Council can provide will rise and charges to agents should be adjusted accordingly. To ensure that agent support activities can be sustained in China in the long term therefore, it will be necessary to establish a basis for the staged introduction of charges to agents and providers for some agent services and to begin recovering some of the costs involved.

Education Counselling Service

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In addition, it is recommended that the Council consider the following to further support its agent development work: Posting electronic versions of the Councils regional agent directories on the GETIS web site to facilitate access by UK providers to the detailed information that the Council already has available about licensed agents. Undertaking a market survey to identifying potential alternative agents for UK providers. (i.e. Chinese education institutions who may be interested in fostering links with UK providers and directing students to them under a similar arrangement to those established with UK providers by the Guangdong University of Foreign Studies or by the specialist computing college in Beijing (see section 4). Offering agent monitoring services to individual UK providers (mystery shopping, collection & translation of printed adverts etc.)
JK March 2002

Education Counselling Service

Appendix II: Agent Market Review China page 9

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Appendix III
Agent Market Review: India
1. Background

The rapid growth of the overseas study market in India since 1990 has been accompanied by a proliferation of education agencies established to provide services to help Indian students arrange study abroad. There are now many hundreds of education agents operating throughout India. These range from large, well-established businesses, with several years experience in the international education market and branch offices in most major cites, to new, shoe-string operations with little experience in the field. While some agents provide a valuable service, there are many less scrupulous operators who exploit students and their parents or perpetuate visa fraud. The general reputation of agents in the India market is very mixed as a consequence. Although there is general concern about the situation, there have been no official moves to regulate the activities of education agents and none are expected. There is no formal professional body for education agents and the only agents association is AAERI,1 a grouping of over 140 agents that are working with Australian providers. This was formed at the instigation of the Delhi-based AEI office2, rather than by the agents themselves, with the aim of improving the service standards and recognition of agents working for Australian providers. However, AAERI has done little to promote the professional development of its members or control their activities. This means that AAERI membership is currently of questionable value as a means of identifying reputable agents even though its members are supposed to work to specified quality guidelines. Forged documentation and attempted visa fraud is rife in India and Australia has one of the highest visa rejection rates for Indian students even though many rejected students have been assisted by AAERI members. The current agent situation is far from clear and the general level of professionalism amongst agents in India is low. There is only limited UK product knowledge amongst agents, largely because there are relatively few agents working for UK providers in comparison to the numbers directing students to Australia and the USA. UK providers find it difficult to find reliable and effective agents in India. At the same time agents have complained that they have difficulty in finding enough UK institutional clients. Direct overtures made by agents to UK institutions are mostly ignored. Nevertheless the situation is improving, mainly as a result of the intensifying competition among agents.

Association of Australian Education Representatives in India. Branch offices of agents with national coverage have separate member status. The current membership of 142 comprises 106 agent organisations and 36 branch offices. 2 Australian Education International, a division of the Australian Government Department of Education, Science and Training, is responsible for the generic promotion of Australian education abroad.
Education Counselling Service Appendix III: Agent Market Review: India page 1

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2.

The role of agents in India

In spite of the difficulties, overseas education providers find it useful to work with agents in India to increase their outreach in the India market and provide the level of admissions assistance that many Indian students feel they need. While many Indian students arrange study overseas without the help of an agent, especially postgraduates, it is clear that others, in particular younger students and their parents, prefer to use the services of agents and find them helpful. Generally, Indian students and parents use agents because they lack knowledge and understanding of overseas education systems. However, even where students find suitable placements on their own, they often lack the confidence or time to complete the necessary formalities, especially visa application procedures, without help. The service culture in India is such that the rich expect someone to do the work for them and they expect very high levels of service. Typically this means they choose to pay for assistance from an agent. In India some parent customers also value the service of agents for the follow-up services they offer during the period of study abroad, including liaison with overseas institutions and emergency support. Indian education agents are primarily involved in promoting long-term overseas study options at the FE and HE level. All but a very small minority from the elite classes complete their school education in India and the majority of students that can afford further and higher education study abroad are educated in English-medium institutions in India. This mean that little agent work is focused on promoting ELT products and school programmes. There are many types of agent in India including Travel agents who also arrange study abroad as a side line Immigration agents who also arrange study abroad as a side line Other people who run an overseas education advisory services as a side line to their main business Education specialists Locally employed institutional representatives, including some who are alumni of the institution they represent. Some agents specialise in promoting study opportunities in one country, although there are few UK specialists. The majority of agents in India work with institutional clients in several destination countries. Some agents have representative offices overseas. By western standard, the office accommodation of most education agents is very poor and few agencies have well-trained staff. The vast majority of study abroad counsellors employed by agencies in India are young women. As a result, few agencies are prepared to invest in counsellor training since it is still the convention in India for most women to leave work when they have a family. Some agencies also fear that counsellor training may encourage staff to leave and start up competitor businesses.

Education Counselling Service

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3.

Financial arrangements

The majority of agents in India charge students (parents) service fees in addition to collecting commissions. The levels of agents service fees vary enormously, as do the services they provide. In general, however the level of agent service fees in India has been falling as the market has become more competitive and mature. Most agents now offer free general information and advice. They only charge service fees at the application stage and for additional services. Where students apply to institutions represented by the agents, service charges for application assistance, if any, generally take the form of a small fee to cover administrative costs, (such as postage and fax charges) or to deter non-serious applicants. Where students request help with applications to institutions that are not represented by the agents, as is the case for applications to many US universities, the fee charged is typically very much higher. Fees usually vary according to the level and type of course and the number of applications made. Fees for additional definable services such as making travel arrangements, visa facilitation and other follow up services are normally levied separately Commission rates paid by overseas institutions to Indian agents are similar to those applicable in the other countries surveyed. UK HE providers generally pay 10% of the tuition fee (first year fee only for longer courses) with rates offered by schools and FE colleges varying between 10% and 20% of the tuition fee depending on course type, duration.

4.

Competitor relationships with agents

The use of agents by Australian institutions is almost universal and in India agents facilitate about 80% of all Australian student visa applications. A significant number of the agents interviewed for this review indicated that they found dealing with Australian institutions easier than those in the UK or the US. Faster turnaround of enquires and applications as well as a more businesslike approach to commission payments were the most frequently quoted reasons. Not surprisingly therefore, Australia has a very strong position in the India market as regards the effective use of agents. Its position is not, however, unassailable. The increased difficulty of obtaining study visas for certain courses in Australia following the introduction of new visa regulations in July 2001 (see 4.2 below) means that agents are seeking to develop arrangements with competitor country providers. 4.1 USA

In spite of the popularity of the USA as a study destination, relatively few US universities have commission agreements with Indian education agents. Nevertheless, many agents still work actively to place students on US degree courses with their fees covered by charges to students. There is a strong general perception in India that getting a US visa for FE level study is almost impossible for self-funded students and this has discouraged agents from seeking contracts with US community colleges. The United States Education Foundation in India3, the US government-supported agency that provides information about study
3

An office of IIE (International Education and Exchange) within USEFI provides the US education information service.
Appendix III: Agent Market Review: India page 3

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March 2002

opportunities in the US from four office in the, makes no attempt to change this perception. It has no dealings with agents and its efforts are mainly focused on promoting scholarshipfunded postgraduate opportunities to graduates of Indias top universities. 4.2 Australia

Australia achieved spectacular success in the India market, especially in the FE sector, by developing an extensive and effective network of over 130 agents covering the geographical areas where demand was greatest. Private sector FE institutions in and around Sydney and Melbourne have especially benefited from the agents work. In 2000 these institutions accounted for 45% of all Indian student enrolments in Australia. Australias reliance on agents and the dominance of its private institutions in the market has not been without problems. It has generated the perception that Australian institutions are entirely commercially driven. This, combined with adverse publicity about the activities of some less scrupulous agents, has undermined efforts to raise the profile of Australia as a high quality education provider. In addition, a significant number of Indian students recruited to private FE colleges contravened their student visa conditions. The visa rejection rate increased significantly as a result leading to the tail-off in FE student numbers evident in the 2000 enrolment statistics and the introduction of the new visa regulations in July 2001. The new visa regulations place additional barriers in the way of Indian student applicants. This has seriously undermined Australias competitive advantage in all segments of the India market but especially in the market for FE products. As a result, many students are now seeking alternative study destinations and many agents who have been recruiting successfully for Australian providers are now looking to replace their lost Australian business by working with clients in other countries. Canada and New Zealand as well as the UK are potential beneficiaries of this significant change in the market conditions. The strong IDP4 presence in India also undermines Australias relations with Indian agents and is seen as another factor contributing to the trend for Indian agents to seek clients in competitor countries. IDP has five offices in India that offer a commercial placement service on behalf of all Australian providers active in the India market in direct competition to local agents. IDPs services to students, which include information and enrolment assistance as well as visa facilitation, are free of charge. Since IDP also organises the main Australian education exhibitions in India, it is seen as the official representative or agent of Australian institutions in India. Many local agents believe that this quasi-official status gives IDP a significant and unfair advantage in the market. Certainly, with the entry of IDP to the India market competition between agents intensified, driving down agents service charges to students. The organisation with responsibly for the generic promotion of Australian education in India, AEI, believes that the use of local agents is necessary to gain access to the market in India and advises Australian providers accordingly. AEI has undertaken extensive agent development work in India, which included identifying potential agents, running training
4

IDP Education Australia, a company wholly owed by Australian universities provides student advisory and recruitment services on a commission basis in 35 countries to all Australian universities and over 200 colleges, schools and English language institutes.
Appendix III: Agent Market Review: India page 4

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March 2002

workshops to increase product knowledge and highlight regulation changes as well as providing the administrative and financial support to establish AAERI. However, AEI does not offer advice to institutions identifying the agents it considers to be the most reputable and/or effective. This lack of discrimination has led to the engagement of some less scrupulous agents to work on behalf of Australian institutions and this is now undermining Australias recruitment efforts. Certainly in its enthusiasm to develop a wide agent network as quickly as possible AEI encouraged all agents it identified to enrol in AAERI without undertaking any background and quality control checks. In turn Australian institutions have engaged the services of these agents without adequate checks on their suitability. The result is that AAERI is now seen as little more than a talking shop that lends an air of respectability to some unscrupulous operators. Although efforts are being made by some members to clean up the association and expel those acting badly it is proving difficult to introduce the controls and sanctions. The agent information AEI provides to students is limited to the contact details of the agents that represent particular institutions. 4.3 Canada

The organisation with responsibly for promoting Canadian education in India is the Canadian Education Centre Network (CECN) office based in the Canadian Embassy in Delhi, which was established in 1997. The CECN office currently concentrates its limited resources on the provision of student information services and running promotional events. It does not undertake any agent development work, although this is under review. At present only a minority of agents work with Canadian institutions and most that do are specialist Canadian immigration agents.

5.

E-recruitment

The Internet has been an important source of information on postgraduate study opportunities abroad for Indian students for several years. Its importance as a source of general study abroad information in India is increasing rapidly. However, few believe that e-recruitment initiatives will replace agents in the foreseeable future. At present, the evidence points to such developments complementing agent services in India by meeting the need for improved information about study abroad opportunities in the UK (and competitor countries) in order to generate interest in individual providers. The conversion of interest into firm sales is likely to continue to depend on off-line, individually delivered, personal services from agents and the institutions, for the foreseeable future A number of e-companies are moving to offer study abroad services although this is not the core business of any of the organisations concerned. The approach taken by Learning Universe, a pioneering e-learning and education organisation in India, is typical of current developments. Its core business is providing paid access to e-learning materials via the Internet (www.egurucool.com) to middle class people aged between 14 and 24. This same group, which includes most potential study abroad students, is also the target audience for the Education UK campaign. Learning Universe plans to establish a study abroad page linked to its egurucool.com site. Initially the site will provide general study abroad

Education Counselling Service

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information but development plans include the provision of on-line counselling and on-line application processing. Education agents are behind other e-recruitment initiatives. Typical of these is www.edcucationmatch.com which is an offshoot of ECO (Education Concepts and Options Pvt. Ltd.), an agent specialising in helping students secure placements in US universities. The site offers overseas institutions the opportunity to post information on the site and provides a link to their own web site for an annual subscription payment. The site includes information on a selection of subscribers from all the main overseas destinations. An optional off-line enquiry follow-up service is offered via ECO.

6.

Current British Council work with agents in India

The Councils ultimate aim is the building of agent capacity to work on behalf of UK HE and FE providers, specifically to increase the number, effectiveness and quality of these agents. The Council recognised, however, that before beginning to interest a wider network of agents it would be necessary to first build effective working relationships with agents already working with UK providers. In the past the British Council Indias relations with agents were poor. The Councils hands-off approach to commercial education agents working for UK clients meant that it was perceived as being disapproving of agents and, since it was unwilling to work with them, obstructive. In addition, because it provided free education counselling and services such as fast track visa processing, the agents also viewed the Council as a competitor. Much of the Councils initial work with agents in India has therefore been directed towards changing these negative perceptions and repositioning it in a supporting role to the main agents that already represent UK providers. This has included: Compiling lists of agents by region including details of all the UK institutions they represent. Making the lists of agents available to students in hard copy format as well as on the India pages of the Education UK website. Organising training workshops and up-dating seminars for agents. This has included a presentation from a visiting UCAS representative and from visa office staff. Accepting advertisements from agents in British Council India education promotion publications. Allowing agents to participate in British Education Exhibitions and promotional events as representatives of their UK client institutions. Welcoming agents onto Council premises to conduct promotional talks and predeparture briefings on behalf of their UK client institutions. These events are promoted in the name of the client UK institutions and bookings have to be made by the UK provider. Encouraging agents to send new counselling staff to the Councils regular group counselling sessions to learn about the basics of UK education. Organising a familiarisation trip for a group of agents to visit Scottish institutions interested in the India market.

Education Counselling Service

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Some services are provided free of charge such as inclusion in the agent listing on the Education UK web site, while some are charged at commercial rates, for example advertising space in Council publications. Other activities are offered on a partial costrecovery basis including the training workshops for example where a small charge is levied to cover refreshments and when necessary venue hire. Considering its difficult starting position, the Council in India has made good progress with its agent development work. It has already built strong relationships with all major agencies currently working with UK clients. It is clear from the feedback that most agents now have a positive perception of the Council, value the services that have been introduced and recognise the benefits of working in partnership with the Council. The agents are very keen to look for new ways to collaborate to mutual advantage.

7.

Future Council agent development work in India

The Council plans to extend the services it offers to the agents that work with UK providers including undertaking further training, and providing enhanced information services. Its major challenge, however, is to generate interest in the UK from new agencies and to ensure that those agencies can provide quality services for UK providers as well as prospective students. As a first step the Council needs to work towards building a database of all agents operating in India and identifying the reputable operators who are interested in working with UK providers. Comprehensive details of the best prospective agents can them be incorporated into the database of information made available to UK providers and a the agents concerned given access to the full range of British Council agent services. The required information will need to be collected by means of a combination of: Desk research to identify who the agents are together with their basic contact details. Questionnaire sent to agents to ascertain their interest in working with the UK and to collect basic factual information (such as length of time in business, number of staff, countries/institutions represented, service charges to students etc.). A programme of visits to agents premises by Council staff to assess, among other things, the suitability of the office location and infrastructure as well as the level of knowledge and professionalism of counselling staff. Close liaison with the visa offices will be necessary in developing this database to ensure that any intelligence they have concerning the reliability and reputation of particular agents is taken into account. In addition, it is recommended that the Council consider the following to further support its agent development work: The provision of hard copy Education UK materials to support agent marketing of the UK as a study destination. The inclusion of agent profiles on the British Council website with direct link to the agents own sites. This would be a chargeable service open to any agent listed in the information available to students. The development of a password-protected agent network web site providing agents with information about the UK, counselling support as well as down-loadable promotional materials.
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The introduction of an Agents newsletter/listserv (as a free or subscription service). Organising agent workshops or fairs alongside in-country promotion events to facilitate the introduction of agents to UK providers and vice versa. These would be free to agents with the costs incorporated as part of main event or offered for a supplementary fee to UK providers as appropriate. Offering agent monitoring services to individual UK providers (mystery shopping, monitoring of printed promotional materials including press adverts etc.).

The Council has already established a sound basis for the charges it makes for agent services. This provides a useful model for other countries. To ensure that agent support activities can be sustained in the long term, however, it will be necessary to keep under review the basis and level of any charges made to agents and providers and when necessary to adjust the charge levels to reflect market conditions. One of the major challenges facing the BC in India is to help improve the general reputation of agents amongst potential students and their parents. To contribute to this aim one option would be to encourage the agents working for the UK to establish a formal association of their own. Any move to establish a UK only association along the lines of AAERI, however would not be welcomed by the agents. This is partly because the value of AAERI is in question and partly because many agents dealing with Australian as well as UK providers would need to be members of both associations. It is therefore recommend that the Council should encourage the formation of an All-India agent association or professional body that would be dedicated to the professional development of education agents, irrespective of the country focus of the agents work. The Council could support such an association through the provision of training and information services for its members, and offer advice on such matters as the establishment of membership criteria and a code of good practice. However, if the association is to be successful, the agents must drive it themselves. The Council support and encouragement should therefore exclude any direct financial assistance for the associations establishment and operation. In addition it would be inappropriate for Council staff to take on any ex officio executive role in the organisation.

JK March 2002

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Appendix IV
Agent Market Review: Japan
1. Background and legal position

The Japanese market for overseas education is well established and highly competitive. It is by far the largest international education market in the world and by far the most diverse. In 2000, there were upwards of 65,000 Japanese students enrolled on long term Englishmedium HE, FE and school programmes abroad and very large numbers of students undertaking ELT programmes of various kinds each year. One estimate puts the number of ELT students at over 600,0001. The market contracted as a result of the Asian economic recession, with the market for short ELT programmes particularly affected. In spite of the continuing economic difficulties in Japan, although the ELT market remains depressed, the market for longer study programmes has shown signs of recovery. The prospects are for modest growth in overall HE and FE numbers at least into the medium term with numbers levelling out in the long term. At present the USA dominates the market in all sectors. Commercial education agents and representatives play a very significant role in the Japanese market with the majority of students going abroad for study using the services of agents. For FE, Schools and ELT sector products, agents are the single most important means of gaining access to the market. There are estimated to be over 700 agents operating in Japan but their quality is very variable. The best agents are highly professional and provide excellent service to students (and their parents) as well as to their client institutions. The less reputable agents provide a poor service to their clients but there is little evidence of any significant fraudulent activity to circumvent visa regulations, as occurs in other markets. There are no specific government regulations for education agents although those who are also registered as travel agents are covered by government controls that regulate the travel industry in Japan. In addition in the case of any serious complaint against an agent, students and their parents would have recourse to seek compensation under Japanese consumer law. In addition the importance of word of mouth recommendations to any business in Japan engenders a high level of self-regulation in the system. There is no formal professional body for education agents in Japan although there is one agent association established to promote overseas study and professional standards amongst its members. This is the JAOS (Japan Association Overseas Study)2. Although it has only 23 members they include some of the largest agencies, which have branch offices in all major cities. JAOS is also well connected internationally and is a member of FELCA

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GETIS Education and Training Market Plan for Japan JAOS web site: www.jaos.gr.jp
Appendix IV: Agent Market Review Japan page 1

Education Counselling Service

Education UK Campaigns and Strategic Initiatives: Agent Strategy

March 2002

(Federation of Education and Language Consultants)3 a recently formed international alliance of 12 national associations from Europe and Asia.

2.

The role of agents in Japan

Although some Japanese students arrange study overseas independently, it is clear that the vast majority of students and their parents (in the order of 75%4), prefer to use the services of agents especially when arranging language-study trips abroad. In general agents have a good reputation in the Japanese market. Agents in Japan provide counselling advice to potential students and arrange placements at selected institutions. The majority of education agents are also travel agents with the remainder typically having close links with travel agencies. This enables them to offer students a complete service including selection of institution, help with application as well as full travel and insurance packages. In addition most agents offer follow up services, sometimes delivered via local representatives based in the destination countries. These services include liaison with overseas institutions and emergency support. In a market that operates mainly in Japanese, agents services are highly valued, particularly by parents who want reassurance that their offspring will be looked after while they are abroad come any eventuality. Costs in Japan are considerably higher than in other overseas markets with the cost of advertising and promotion work being particularly expensive. For overseas institutions, a good local agent can help keep these costs to a minimum. Some agents are part of very large commercial companies which give them access to excellent publicity outlets. A number also organise in-country exhibitions for the institutions they represent. In addition since it takes time and effort to cultivate the contacts necessary for success in the Japanese education market the appointment of reputable and competent local agents can offer an effective short-cut to market penetration. There are many different types of agent in Japan. These range from travel agents that have a specialist study travel department to agents that concentrate on arranging study tours for groups from schools, colleges or universities. Business for agents in the later category is in decline because of a move by a growing number of Japanese institutions to make their own arrangements for group study tours directly with overseas providers. Some agents specialise in a particular market segment or sector and these include small highly exclusive agents that offer a personally tailored service. Provider employed representatives based in Japan, who work on behalf of one or a small group of institutions, are also relatively common. A particular feature of the Japan market is the large number of specialist publications dedicated to study abroad, some of which are published by the major agencies. The publishing companies that produce the remainder often also offer student placement services.
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FELCA web site: www.felca.org

75% of Japanese students going to Canada are placed through intermediaries (Education Marketing in Japan, 1998, Department of Foreign Affairs and International Trade, Canada). British Council Japan estimate that a similar proportion of students going to the UK use agents.
Appendix IV: Agent Market Review Japan page 2

Education Counselling Service

Education UK Campaigns and Strategic Initiatives: Agent Strategy

March 2002

Japanese education agents are involved in promoting all types of study abroad programmes, at all levels. This includes short and long-term overseas ELT as well as school, FE and HE programmes. A major part of many agents work is focused on promoting short-term ELT products and there are still some that specialise exclusively in this market segment. Since numbers in this sector have been in decline, increasingly agents are now looking to expand their product range and to devote more time to the promotion of long-term study options where the market is still relatively buoyant. While some agents specialise in promoting study opportunities in one destination country, including several UK specialists, most agents represent institutions from a number of countries. The USA tends to provide Japanese agents with the majority of their business because of its dominant position in the market. There is a very high level of US product knowledge as a result. In contrast there is only limited UK product knowledge amongst agents in Japan.

3.

Financial arrangements

The majority of agents in Japan charge service fees to students (parents) in addition to receiving commission payments from overseas institutions. This is still the case even for some of the dedicated locally employed institutional representatives. Given that Japanese customers demand and need high levels of personal service and that operating costs in Japan are very high the fees can usually be justified. Sometimes the service fees cover value-added services such as visa facilitation, funds transfer for payment of tuition fees or travel arrangements and, in the case of schools placements, for example, guardianship arrangements. Fee levels vary although they usually fall in the range 50,000 Yen to 100,000 Yen (about 260 to 5305) for ELT and are typically around 400,000 Yen (about 2,100) for degree course placements. Much higher fees apply in the case of specialist agents that offer an exclusive tailor-made service. The best agents publish clear statements of applicable charges, and the charges are usually commensurate with the level of service they provide. However, as a result of the growing competition between agents in combination with the recession that has made students more costconscious, service fee levels are being driven down. This is making commission payments more important and there may be pressure from the agents to increase the rates. Commission rates paid by overseas institutions to Japanese agents are similar to those applicable in the other countries surveyed. UK HE providers generally pay 10% of the tuition fee (first year fee only for longer courses) with rates offered by schools and FE colleges varying between 10% and 20% of the tuition fee depending on course type, duration and other factors.

At the current exchange rate of 1=189 Yen (28 March 2002)


Appendix IV: Agent Market Review Japan page 3

Education Counselling Service

Education UK Campaigns and Strategic Initiatives: Agent Strategy

March 2002

4.

Alternative agents and market access routes

In Japan, as mentioned above (section 2), there are increasing opportunities to develop recruitment partnerships with education institutions. Some Japanese universities, and colleges are keen to develop agency-type arrangements with overseas partners in order to offer study abroad experience for their students. In effect, the institutions recruit for their overseas partners from amongst their own student bodies and sometimes more broadly. As an incentive the overseas partner sets aside funds, equivalent to the commission payments it would have paid to a commercial agent, for use by the institution. These funds are used in a number of ways, including the provision of student scholarships, bursaries or additional social programmes and tours. As in other countries there are also opportunities in Japan to develop recruitment partnerships with alumni or, in the case of schools and colleges, parents of current students.

5.

Competitor relationships with agents

Many of the Japanese agents interviewed for this review indicated that with the exception of private sector providers in the UK they find dealing with US and Australian institutions to be easier than those in the UK. Faster turnaround of enquires and applications as well as a more business-like approach to commission payments were the most frequently quoted reasons. Several agents indicated that were unwilling to work with public sector ELT providers in the UK after poor experiences in the past. This places the UK at a significant disadvantage in the Japanese market in comparison to its major competitors. 5.1 USA

The USA has a position of considerable strength in the Japanese education market. The structure of the Japanese education system was modelled on the USAs and it has extensive academic links in all sectors, including well-established alumni networks. The US cultural influence in Japan is pervasive. This is reflected in the Japanese preference for American rather than British English and familiarity with US patterns of education and professional qualifications which make it easy for Japanese students to move between the two systems. As in other countries there is no generic marketing of US education in Japan and there is only a limited US education information service. The competition for the UK comes from the large number of US universities, colleges and language schools working to promote their programmes via agents and link institutions. The majority of agents work to promote education in the USA and more than half of their business is directed to the USA. As a consequence there is a very high level of US product knowledge amongst agents. Nevertheless, while the USA has many advantages in the Japanese market, there is an increasing perception in Japan that the USA is a dangerous country in which to live and study. This perception was heightened in the wake of the events of 11 September. As a result Japanese customers are increasing willing to consider alternative destinations.

Education Counselling Service

Appendix IV: Agent Market Review Japan page 4

Education UK Campaigns and Strategic Initiatives: Agent Strategy

March 2002

5.2

Australia

An active AEI6 operation supports the promotion of Australian education in Japan concentrating on generic promotion and support of the agent network. It provides only basic information services to students from its embassy-based office in Tokyo. IDP7 is not represented in Japan but there is widespread and effective use of agents by Australian institutions. AEI, undertakes only limited agent development work such as running occasional training workshops to highlight changes in the visa application procedures and regulations. AEI accepts that the use of agents is necessary to gain access to the market in Japan, and advises Australian providers accordingly. It maintains a list of agents for use by institutions although it does not offer advice to institutions about the agents it considers to be the most reputable and/or effective. The information AEI provides students about agents is limited to the names of those representing particular institutions. 5.3 Canada

Japan is regarded as an important source market for Canada although it has not established a CECN8 in Japan to undertake proactive generic promotion. Limited information and marketing support services are provided from the Canadian Embassy in Tokyo by the Academic Relations Officer. Canadian institutions are encouraged to work with agents as well as establishing institutional links. Limited agent support activities are undertaken including running occasional training workshops. The Embassy does not run any formal recognition scheme or recommend particular agents. However it has compiled a listing of potential agents for use by Canadian institutions and this is used for regular mailings of information and generic promotional materials. The embassy mainly concentrates it cultivation efforts on JAOS members.

6.

E-recruitment

The Internet plays a very active and increasingly important role in the dissemination of study abroad information to Japanese students but few believe that e-recruitment initiatives will replace agents in the foreseeable future. At present, the evidence points to such developments complementing face to face agent services in Japan by meeting the need for much more detailed information in Japanese about study abroad opportunities in the UK (and competitor countries) in order to generate interest in individual providers. Material needs to be posted in Japanese to reach students and parents effectively. The conversion of interest into firm sales is likely to continue to depend on off-line, individually delivered personal services from agents and the institutions.

Australian Education International, a division of the Australian Government Department of Education, Science and Training (DEST). 7 IDP Education Australia, a company wholly owed by Australian universities provides student advisory and recruitment services on a commission basis in 35 countries to all Australian universities and over 200 colleges, schools and English language institutes. 8 Canadian Education Centre Network
Education Counselling Service Appendix IV: Agent Market Review Japan page 5

Education UK Campaigns and Strategic Initiatives: Agent Strategy

March 2002

The e-recruitment initiatives of the major education agents and publishers involved in the study abroad market are typical of current developments. Their sites are designed primarily to service general enquires and steer serious customers towards the off-line services of the agents.

7.

Current British Council work with agents in Japan

The British Council in Japan is keen to build stronger relations with agents and to encourage them to work on behalf of UK providers. Specifically it aims to increase the number and effectiveness of these agents by increasing their UK product knowledge. The Council recognised however, that before beginning to interest a wider network of agents it would be necessary to first build effective working relationships with agents already working with UK providers. In the past the British Council in Japan took a hands-off approach to commercial education agents working for UK clients. This has led to a perception by some agents that the Council disapproves of their work and is generally unsupportive. In addition, because it provides free education counselling as well as services such as BUPS9 and ran an ELT placement scheme on a pilot basis in the past, some agents also view the Council as a competitor. Specific agent development activities in Japan have included: The compilation of an agents listing by region including contact details and their sector specialisations (ELT, FE, HE or schools) of all agents currently known to be working on behalf of UK providers. Inclusion of the agent list on GETIS for access by UK providers. Participating in promotional events organised by agents as seminar speakers, exhibitors etc. Running occasional briefing and updating seminars for interested agents. Invitations are sent to all agents known to be working with UK providers. Running an annual series of seminars to promote schools education in the UK in collaboration with a specialist schools agent. The agent pays hire charges for the use of Council premises for these events as well as bearing most of the costs of advertising and promotion. The provision of hard copy Education UK materials to selected agents to support their marketing of the UK as a study destination. Accepting advertisements from agents in British Council Japan education promotion publications. At present however, students using the Councils Education Counselling service that express an interest in a particular institution are not generally given the details of the relevant agent(s) although they are referred to Japan-based institutional representatives.

The British Universities Placement Scheme, run by the British Councils Direct English Teaching operation. This is an English language and study skills training programme to prepare students for study in the UK and includes assistance to gain a UK course placement.
Appendix IV: Agent Market Review Japan page 6

Education Counselling Service

Education UK Campaigns and Strategic Initiatives: Agent Strategy

March 2002

8.

Future Council agent development work in Japan

As a result of its work so far the British Council is now viewed more positively by agents in Japan. However it is clear that there is some way to go before the Council is regarded amongst agents as a valued marketing partner. The Council in Japan plans to move further in this direction by extending its range of professional development activities for agents. In particular, plans are in hand to providing enhanced UK information services and training including: The introduction of an agents newsletter/listserv. The establishment of a regular programme of updating and briefing seminars for agents. In addition it is recommended that the Council consider the following to further support its agent development work: Extending the current regional agent listing to provide UK institutions with more detailed background information about all major agents, including the names of agents current UK clients, details of other countries represented, approximate number of placements to the UK and elsewhere. Providing information for students to direct them to the agents that can help arrange study abroad in the UK. This includes details of the UK institutions represented by each agent as well an indication of whether the agent can help students to apply to any UK institution or only those with which it has a commission agreement. Welcoming more agents onto Council premises to conduct promotional talks and predeparture briefings on behalf of their UK client institutions or as part of the Councils regular programme of specialist promotional talks. These events could be promoted in the name of the client UK institutions and either they or the agent could make bookings. The inclusion of agent profiles on the British Council website with direct links to agents own sites. This would be a chargeable service open to any agent listed in the information available to students. The development of an agent network web site providing agents with information about the UK, counselling support as well as down-loadable promotional materials. Undertaking a market survey to identify potential alternative agents for UK providers. (I.e. Japanese education institutions who may be interested in fostering links with UK providers for the purpose of directing students to them under a similar arrangement to those already established with some UK providers [see section 4]. As a starting point the Council can use its existing database of Japanese institutions interested in fostering general links with UK providers.) Offering agent monitoring services to individual UK providers (mystery shopping, collection & translation of printed adverts etc.)

In a mature market such as Japan where agents activities are well-developed, the provision of free or heavily subsidised agent services would be difficult to justify. The commercial value of the services that the British Council can provide should be easy to establish and charges for agent services should be made accordingly. To ensure that agent support activities can be sustained in Japan in the long term it will be necessary to keep the basis of charges to agents and providers under review.
JK March 2002
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