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Industry Spotlight: The brand premium for Chanel and Harvard

The classic illustration of the power of brand is perfume – expensive perfumes may cost just a few dollars to produce but can be sold for more than $500 due to the cachet afforded by the brand.

David Malan’s Computer Science course at Harvard, CSCI E-50, provides an interesting parallel in the education world. It’s available for free through EdX, or you can pay $75 for an EdX completion certificate (provided you successfully complete the course). Or you can pay $2200 and get Harvard credit.

Here’s the kicker – in all three cases, it’s the same exact course experience for the student. The only difference, besides the price, is whether there is a credential, and, if so, the name of the organization issuing the credential.

It’s no secret that an Ivy League credential carries intangible value above and beyond the sheer quality of the education that lies behind it. The era of the MOOC provides a stark illustration of that brand premium — given a fixed product, consumers seem willing to pay a 2800% premium for the Harvard name, as opposed to an EdX credential. A bit like perfume.