February 1999 // Letters to the Editor
An Analysis of Trends in Online Education
by Nancy Levenburg
Note: This article was originally published in The Technology Source (http://ts.mivu.org/) as: Nancy Levenburg "An Analysis of Trends in Online Education" The Technology Source, February 1999. Available online at http://ts.mivu.org/default.asp?show=article&id=1034. The article is reprinted here with permission of the publisher.

In "Online Learning Trends and the Online Learning Paradox," Paul Shrivastava (Shrivastava, 1999) contends that enrollments in online education programs and courses are lagging behind expectations. According to Shrivastava, "the learners are simply not there in the numbers predicted." His data is based on "casual conversation with dozens of providers." Shrivastava asked in his article if anyone can offer an explanation for why "the revolution is not happening."

Shrivastava must be talking to different people than I am. The people I'm talking to, including some at the University of Phoenix, the only institution he specifically cited, convey quite the opposite impression. From what I've been told, the University of Phoenix's online program represents the fastest growing segment of their enrollment. So perhaps this is a question of whether the online education "glass" is perceived as half-empty or half-full.

Rather than writing a "he said/she said" piece, however, I am presenting a perspective which maintains that a well-documented marketing concept offers an explanation for enrollment patterns in online education. It is called the product lifecycle.

Quite simply, the product lifecycle concept holds that a new product (good or service) innovation moves through a series of fairly predictable stages, from development and testing to introduction, growth, maturity, and decline. The introduction period is characterized by slowly growing sales as the idea takes hold among innovators. This period is also typified by frequent product modifications and limited distribution, among other factors. Marketing and advertising costs are often high; profits are usually negative.

If we look at the history of online education enrollments on an industry-wide basis, it is probably accurate that "sales" (enrollments) have been growing at a fairly slow pace. This is normal; the literature on the adoption process and diffusion (the process by which the adoption of an innovation spreads) indicates that new concepts are first accepted by "innovators," those individuals (typically less than five percent of the population) who are willing to accept risks, tend to be above-average in education and income levels, and are exposed to outside influences (e.g., scientific sources and experts) in forming opinions and making buying decisions. In fact, the number of graduate-level degree programs offered online may reflect the fact that educational providers have chosen this specific group as their primary target market.

After market introduction, a new product moves into a "growth" stage, which is characterized by steeply increasing sales. Profits also turn from negative to positive. During this stage, the new product concept takes root among "early adopters." These customers may be influenced in their purchasing decision (online enrollment) by innovators with online education knowledge and experience. They typically rely more on word-of-mouth recommendations than innovators do in forming opinions. In fact, according to Lamb, Hair, and McDaniel (1994), they are "more oriented to the local community, in contrast to the innovator's worldly outlook."

During the market growth stage, many competitors enter the market; in fact, depending on the perceptions associated with industry profits, they may be very "quick to the trough," as one Continuing Education administrator phrased it. A quick look through the databases published by the Open University's International Centre for Distance Learning, the Globewide Network Academy or the University of Texas' World Lecture Hall reveals hundreds of educational providers offering thousands of online courses. The latter phase of this growth stage, in fact, is sometimes referred to as "saturation," since the market is, literally, saturated with providers.

As a result, the promotional focus shifts during the growth stage from stimulating primary demand ("enroll in online classes") to selective demand ("enroll in online classes from XYZ University"). As competition intensifies, the product's price (and related profits) may fall. Some providers may choose (or be forced) to withdraw from the market; however, we see no signs of this yet in online education.

Therefore, it is my belief that online education has just recently entered the growth stage of the product lifecycle. In fact, I will make a prediction concerning methods of competition in online education markets: I believe that as providers' offerings proliferate over the next few years, they will be differentiated based on three factors: (1) reputation of the institution; (2) price, or tuition costs; and (3) speed-time required to complete a program or course.

The rate at which new product innovations are adopted (and the related slope of the product lifecycle curve during the growth stage) depends on several factors, including the relative advantage the innovation has over existing alternatives, trialability of the product, compatibility with existing attitudes and beliefs, observability, and complexity. In general, the more the innovation is viewed as superior to existing alternatives, the easier it is to understand and try, and the greater the compatibility with existing attitudes and values, the faster will be the adoption process. In the case of online education, since taking classes that are not delivered "on ground" is a substantial departure from traditional delivery methods and models in higher education, compatibility and perceived complexity could be factors that are slowing the rate of adoption of online classes. This may be particularly relevant if online education is perceived as somewhat complex by the traditional educator, since s/he is in a position to influence student interest and enrollments.

Perhaps some institutions' reluctance to give hearty support to online education also offers an explanation for any less-than-hoped-for enrollments. If the "salespeople" (administrators, faculty members, support personnel) are not themselves sold on the concept, why should the customers be? The fact is that many faculty members remain skeptical about the quality of online education, are leery of anyone who has online credentials, and, in general, espouse lukewarm support for the process...at best. Since prospective online learners are dependent on educational providers to inform them about their new offerings, if that information is absent or negative, it is doubtful that prospective new learners will develop enough interest to enroll in online classes. As an analogy, I never knew that I had a need for cruise control in my car until I drove a car with cruise control. It is up to educational providers to furnish this informational experience, and in this respect, FAQs about online classes (e.g., www.baker.edu) and online course previews (e.g., http://www.cel.cmich.edu/preview/) are excellent promotional tactics.

Shrivastava also voices concern that there is no single model or even set of models for effective online learning. In response, I might ask: is there a single model or set of models for effective face-to-face learning? Or does it depend instead on the particular subject matter and learning objectives, the instructor's preferences and resources, learners' skills, motivations and resources, and so on? It seems to me that just as there is no single model for how a course should be taught, there is no single model for how online learning should occur. Due to the nature and characteristics of the technology itself, however, it seems to lend itself well to facilitating implementation of a variety of instructional strategies, including discussing, explaining, writing, depicting, interviewing, researching, and more. In fact, nearly any instructional strategy that is successful in a face-to-face environment can be applied, with minimal creativity, in an online learning environment.

Additionally, in any new field, the body of literature probably lags behind the acquisition of knowledge. With respect to online education (and distance education in general), that body of knowledge is present...and it is growing. Journals such as the American Journal of Distance Education and The Technology Source are devoted to the pedagogy of distance education and fostering the development of that body of knowledge. Conferences such as EDUCOM, Syllabus, Tele-learning, and the University of Wisconsin's annual Conference on Distance Learning and Teaching are also good sources of new thought and empirical research on the practice of distance learning. In addition, such organizations as the Council for Higher Education Accreditation (CHEA) are closely examining the issue of accreditation in distance education. "Quality Indicators and Distance Learning," in fact, is the focus of CHEA's Jan. 30 to Feb. 2, 1999, conference in San Diego.

In conclusion, it seems to me that there is no paradox in online education. Like retail sales via the Internet, doom-and-gloom forecasters predicted that it would never happen. The 1998 holiday season, however, proved them wrong, demonstrating that consumers are shopping online and sales and profits can occur via the Internet. Shrivastava should remember that such innovations as the automobile, airplane, telephone, and computer were once thought to be "dead horses," too.

As a result, I think that a better question is this: If we are, in fact, at the beginning of the growth phase of online education's product lifecycle, how ready and well-positioned will an institution be to compete when the competition really heats up?


Lamb, C.W., Jr., Hair, J.F., Jr. and McDaniel, C. (1994). Principles of Marketing. 2nd ed. Cincinnati, OH: South-Western Publishing Co., p. 321.

Shrivastava, P. (Jan. 1999). Online learning trends and the online learning paradox. The Technology Source. http://technologysource.org/?view=article&id=225

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