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A question of economics
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gaijinalways



Joined: 29 Nov 2005
Posts: 2279

PostPosted: Wed Jun 06, 2007 7:29 am    Post subject: Reply with quote

Quote:
Long posts tend to kill threads, but Justin's comments here, I think, are really worth paying attention to. Perhaps he scared the others away?


Not always, it depend on the forum. One forum I used to post on the old timers there squealed if I posted more than 3 paragraphs, especially if they disagreed with what I was saying Surprised Twisted Evil Rolling Eyes .

There are some businesses that trade on their reputations, and it is not always the reputation of the teachers that they trade on. I currently work for the world's largest language school, and they believe anyone can teach. Their whole system is built on that, though for a quite a few years little had changed. Thery used to not advertise much, but that has changed as well as word of mouth hasn't brought in as many students as it used to.
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madison01



Joined: 01 Sep 2006
Posts: 40

PostPosted: Wed Jun 06, 2007 12:39 pm    Post subject: Reply with quote

I do intend on replying to Justin's questions and other comeents on this post but am verrrrry busy at the mo, I also want to post some observations of my own but want to get them right.

Hope you don't mind
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madison01



Joined: 01 Sep 2006
Posts: 40

PostPosted: Wed Jun 06, 2007 4:53 pm    Post subject: Reply with quote

This is going to be quite a long one, sorry.

Okay, I�ve had time to think about John and Justin�s comments and questions and think I can answer them.

Firstly, my background in EFL when I finished my English degree before that I finished a Business and Finance degree and worked in marketing then business management, my father owned his own business and I worked for him whilst studying, this is where I get most of my experience and understanding.

Secondly, I know nothing about South American EFL markets so can�t comment on your specific situations without knowing whether the market is emerging at the moment or has been up and running for some time, or reaching saturation point, any one of which would dramatically alter a pricing policy.

The way I have had to work in the past in all the businesses I have worked in is based on two key areas. 1. Profit Margins 2. Supply and Demand. Both of which will affect how something is priced in terms of its profit margins.

In the countries I have worked in the competition is high, supply either fulfils demand or outstrips it. This means your prices are vitally important. In countries where supply does not meet demand, prices can be higher and reputation is as important as price. I�m afraid your analogy of Jaguar and Honda is slightly out here Justin, Jaguar competed in a market with lower demand than Honda and it was its reputation that nearly killed it (Jaguar attempted to improve the profit margin and keep the prices high, never a good idea). Also, Wal-Mart supplies to a market of high demand therefore its prices have to be lower to compete with others selling to that market.

Like any business with competitors client turnover is inevitable, and reducing that number is extremely important, and reputation, word-of-mouth is the big daddy of marketing tools. Every school I have worked for wants a good reputation, but what is a good reputation in market of 100 schools for instance?

Most schools take the �nobody�s complaining all must be well� approach, rushing to fix a problem when it comes up rather than avoid the problem. I�m all for providing an excellent quality service and have worked at a school which aimed for and achieved that, however, the owner was also the DoS, a teacher, web designer and his profit margin was his salary, plus a bit more to protect its future. His salaries were high as were his standards, all teachers were DELTA minimum and had 3 years experience.

But, and it�s a big but, most school owner couldn�t hold a board marker the right way up, let alone walk into a room of 12 teenagers and teach them the 3rd conditional. Their motivation is entirely different, and in markets where competition is tight their viewpoint on what a good reputation is, is entirely different.

What is the alternative? Well, you seem to be in a very good position Justin, if profit is not the motive then the margins can be altered to suit delivery of a quality product.

There is no alternative under the current climate, in my opinion. The only thing that can�t reduce competition to a less damaging level is global standards and a clear measurable progression. There are so many schools selling so many kinds of products with no minimum standard to adhere to. And before anybody starts banging on about the BC, IATEFL, PASE or any other local body that purports to control standards at schools, please don�t. Everyone of them requires an payment to join and remain a member, everyone of them doesn�t fully enforce their criteria or set the benchmark too high because the number of schools wanting to be accredited would be drastically lower. Until there is an independent, non-financially dependent body accrediting standards across the board there will be no minimum standard. With no minimum standard any Tom, Dick or Harry can open up, use anybody to teach and drive down prices, which forces better schools to do so. The higher the number of schools the more likely you are to end up being paid less as a teacher.

I think I�ve covered everything.

It was a long one, Very sorry.
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John Hall



Joined: 16 Mar 2004
Posts: 452
Location: San Jose, Costa Rica

PostPosted: Thu Jun 07, 2007 6:19 pm    Post subject: Reply with quote

madison01 wrote:
I know nothing about South American EFL markets so can�t comment on your specific situations without knowing whether the market is emerging at the moment or has been up and running for some time, or reaching saturation point, any one of which would dramatically alter a pricing policy...

In countries where supply does not meet demand, prices can be higher and reputation is as important as price.


That is, in fact, the situation in Costa Rica.
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jpvanderwerf2001



Joined: 02 Oct 2003
Posts: 1117
Location: New York

PostPosted: Fri Jun 08, 2007 3:37 am    Post subject: Reply with quote

Demand outstrips supply quite clearly here in the Russian Far East, at least for the time being. This is why I'm trying to take advantage of the market as quickly and effectively as possible.

This is a market where foreign investment is currently tenuous (at best) and--with the EFL industry--new. The first, obviously, seems detrimental to EFL professionals, but the second--coupled with many Russians' desires to immigrate--give me substantial hope.

Being a new market, there are very few qualified native teachers here (you can count them on one hand). As one such teacher, I can tell you that the students are acutely aware of the quality of their education, and do not put up with sub-standard English teaching (or any teaching--for long at least). Also, most students could care less if their teacher is white/black, short/tall, blonde/auburn, as long as they learn English. Perhaps these points have to do with Russia's strong educational expectations and its geographic and cultural proximity to the West.

I know a few students who have ceased coming to my school because they weren't given classes with teachers they deemed "good". Part of this may have been a bias against my non-native colleagues, but mostly it was because they expected a good product for the substantial money they'd spent. Management is well aware of this, and compensate the most effective teachers accordingly--while, of course, making a profit. (Of course, I'm not making millions, but I make more than twice as much as I've ever made in my seven years in the industry, and have enough for a flat, travel and creature comforts.)

I see several scenarios for the future of the EFL industry here in the RFE, and only one-- a government crackdown of some sort-- seems bleak to me. To reiterate, customers here simply won't settle for low-quality instruction; they also are willing to pay a good deal for high-quality teaching.

Therefore, if you have a market where many customers have substantial disposable income, and demand outstrips supply (yet cost of living is comparatively low), you have a win-win situation for both the school and the teacher.

All of this is perhaps distinct from the situation in S. Korea and China, where the looks of the teacher often = the quality of the perceived education. It is places like those, IMO, where the "fly-by-nighters" who look "right" will always offer a cheap alternative to high-quality EFL instruction. Which means, of course, that school owners can (and will) pay their teachers far less. And why not?: Expectations might be far lower.
In more "discriminating" markets (pardon the pun), however, I don't see this as the case; the RFE, IMO, is one such place.

Just my $.02. Sorry for the long post for anyone who's made it this far!
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waxwing



Joined: 29 Jun 2003
Posts: 719
Location: China

PostPosted: Fri Jun 08, 2007 8:39 am    Post subject: Reply with quote

jpvanderwerf2001 wrote:
Demand outstrips supply quite clearly here in the Russian Far East, at least for the time being. This is why I'm trying to take advantage of the market as quickly and effectively as possible.

This is a market where foreign investment is currently tenuous (at best) and--with the EFL industry--new. The first, obviously, seems detrimental to EFL professionals, but the second--coupled with many Russians' desires to immigrate--give me substantial hope.


Interesting to hear from you out there. About foreign investment, what is the situation with regard to the Chinese in Vladivostok? Obviously there has been a heavy far east influence for some while, i.e. Japanese, Korean and Chinese. But how is the new resurgence of China affecting the situation? And how are Putin's policies about foreign workers affecting the situation? Is there much racial tension? I have a certain interest in the area from having worked both in Russia and Harbin.

You probably know there is quite a flood of young Russians from the Dalnii Vostok trying to find work, study and generally make a life for themselves by heading south. Are you finding a lot of students are switching to learning Chinese rather than English?
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jpvanderwerf2001



Joined: 02 Oct 2003
Posts: 1117
Location: New York

PostPosted: Wed Jun 13, 2007 6:00 am    Post subject: Reply with quote

Interesting to hear from you out there.

Thanks! Cool

About foreign investment, what is the situation with regard to the Chinese in Vladivostok?

Well, generally, Russians here dispise the Chinese. I'm not sure if that's news, though! In terms of foreign investment, however, Chinese nationals have a great deal of small-business and labor-placement "concerns" here in Vladivostok.

Obviously there has been a heavy far east influence for some while, i.e. Japanese, Korean and Chinese. But how is the new resurgence of China affecting the situation?

"China" is everywhere here in Vlad. There're great numbers of Chinese nationals doing a great deal of labor (and, curiously, fixing shoes). Most of the goods available (at least the goods you don't have to pay out of your nose for) are Chinese. This might have to do with the fact that Russia produces very little, however. Chinese interests are much more apparent than S. Korean and Japanese, IMO.

And how are Putin's policies about foreign workers affecting the situation?

Interesting question. Of course, when one goes to the "Chinese markets" and now--amazingly, as if appearing from the vapor--most of the sellers are semi- or full-blown babushkas (where they were once Chinese nationals), one can see the change. However, Chinese interests still own the kiosks in question (or so I've been told). This seems to be true for Caucasian and Middle Asian concerns as well.

Is there much racial tension?

There is racial tension, indeed; but, as far as I can tell, it's mostly one-sided: Russians have a vehement disdain for Chinese people. IMO, Russians dislike the Chinese for a few reasons: 1) Chinese nationals are hard workers; 2) They work for lower wages; 3) They produce inferior-quality goods (ironically, Russians line up to buy said goods, or take mini-vacations for cheap shopping in Sufenhei); and 4) A whole host of culturally ignorant, xenophobic and racist reasons. That being said, I think Russian/Chinese violence is rare (don't quote me).

I have a certain interest in the area from having worked both in Russia and Harbin.

You probably know there is quite a flood of young Russians from the Dalnii Vostok trying to find work, study and generally make a life for themselves by heading south. Are you finding a lot of students are switching to learning Chinese rather than English?

I don't know about switching, but a good number of my students learn English and Chinese (or Japanese). And, yes, you are right, I know of a number of students who are heading to Shanghai and Beijing (and Seoul for that matter) to study.
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waxwing



Joined: 29 Jun 2003
Posts: 719
Location: China

PostPosted: Wed Jun 13, 2007 8:47 am    Post subject: Reply with quote

Yes, the traditional perception of the Chinese by Russians is "khitrii" (cunning), they have a mistrust of them. I guess it's a bit like our old idea of them being "inscrutable".

It's very telling crossing the border on the Trans-Manchurian at (Manzhouli? I think that's the name). The difference between the sense of decay and neglect on the Russian side, and the order and industry on the Chinese side - as well as population density!

Suifenhe: got to be one of the strangest places on Earth. I enjoyed confusing the Chinese store owners (all of whom speak fluent-ish Russian) by chatting with them in Russian and then telling them I was from England. They'd never seen a white person who wasn't Russian Smile

As to learning both English and Chinese, I can see the appeal, but I don't envy them trying it! Tall order! Although in Harbin I met one or two young Russians who had achieved this, some of them taught English, and well (EFL teachers make the sign of the cross at this point Smile )

Anyway, if you can speak English, Chinese, Russian, and one Romance language (let's say Spanish) you're pretty much covered everywhere in the world (with the possible exception of Arabia..).

Do you think the Dalnii Vostok (Russian Far East) is going to "become" Chinese, in any sense? I think it will happen by stealth irrespective of Moscow's edicts, personally. Over many, many years of course.


PS What is a semi-babushka? Does such an exotic creature really exist? Smile
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jpvanderwerf2001



Joined: 02 Oct 2003
Posts: 1117
Location: New York

PostPosted: Fri Jun 15, 2007 2:49 am    Post subject: Reply with quote

waxwing wrote:
Yes, the traditional perception of the Chinese by Russians is "khitrii" (cunning), they have a mistrust of them. I guess it's a bit like our old idea of them being "inscrutable".

Exactly. It has a lot to do, IMO, with the fact that the Chinese work their tail off and go home at night to their families; as opposed to cutting as many corners as they can to make a buck, and then heading to the banya when their pockets are full.

It's very telling crossing the border on the Trans-Manchurian at (Manzhouli? I think that's the name). The difference between the sense of decay and neglect on the Russian side, and the order and industry on the Chinese side - as well as population density!

It is. But no matter how nice the Chinese cities get they'll never be as "good" as Russian ones. How could they be? I mean, really? Wink

Suifenhe: got to be one of the strangest places on Earth. I enjoyed confusing the Chinese store owners (all of whom speak fluent-ish Russian) by chatting with them in Russian and then telling them I was from England. They'd never seen a white person who wasn't Russian Smile

I love going to Sufenhei, because the Chinese sellers love me. I simply speak English and the entire floor staff is over smiling and poking at me; they readily leave their surly Russian customers to come "practice" their English. It's hilarious. When I tell my Russian friends of my warm reception in Sufenhei, they look at me flabberghasted and wonder aloud "why?". And the city is patently bizarre.

As to learning both English and Chinese, I can see the appeal, but I don't envy them trying it! Tall order! Although in Harbin I met one or two young Russians who had achieved this, some of them taught English, and well (EFL teachers make the sign of the cross at this point Smile )

Anyway, if you can speak English, Chinese, Russian, and one Romance language (let's say Spanish) you're pretty much covered everywhere in the world (with the possible exception of Arabia..).

Do you think the Dalnii Vostok (Russian Far East) is going to "become" Chinese, in any sense? I think it will happen by stealth irrespective of Moscow's edicts, personally. Over many, many years of course.

My Russian friends are always talking of the "takeover" by the Chinese. They fully believe that China has designs on their city/region. All the while--as they complain--I'm thinking just how many improvements the Chinese would make within the first six weeks of taking over this place. Perhaps it'd be a blessing?! (Don't tell my Russian friends this! Laughing


PS What is a semi-babushka? Does such an exotic creature really exist? Smile

They do. You have to look very carefully, however. I even have a few pictures of them, but am afraid to publish them because of the potential subsequent hysteria. Semi-babushkas are akin to the infamous yeti sightings in the wooded areas of the taiga, and can be most easily recognized by their huge hair-sprayed coifs, the jumbo, sequined floral-patterned sweaters resting on their backs, and at least 2 cm of facial hair growing out of at least one mole. Beware.
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