Project Marketing By Three Organizations

Marketing By, For, And Of The Project

SKEMA Business School, Lille, France, Univ Lille Nord de France, LSMRC

Abstract

Within the project marketing literature, there has been an ongoing discussion about whether project marketing is part of project management or vice versa. In this paper, we take a new perspective on this discussion. It can be said that there are three organizations involved in the management of projects: two permanent organizations, the parent and the contractor; and one temporary organization, the project itself. The view that project marketing is part of project management is the marketing of the project to the project’s stakeholders. It is part of stakeholder engagement. The view that project management is part of project marketing is marketing for the project by the contractor for this and future projects. It is part of portfolio management; the contractor manages the portfolio of client contracts, and part of that is winning new work. The project marketing literature has not traditionally taken the third perspective: the marketing of the project by the parent. The investor may need to market the project, its output, and outcome at the six stages of the project and investment process: concept, feasibility, design, execution, commissioning, and operation to win financial, political, and public backing for this and future projects. As part of a larger research project into project marketing, in this paper we review the literature on marketing by the project and for the project, and propose a model for marketing of the project. To date, very little research has been performed on this third element of project marketing.

Keywords: project marketing; stakeholder engagement; portfolio management; client engagement; project support

Introduction

Project marketing is a concept still in development. Current competitive pressures require organizations to adopt a higher degree of market orientation for their projects and to build and maintain strong relationships with their stakeholders, customers, financial and political backers, and the general public (Pinto & Rouhiainen, 2001; Davis & Pharro, 2003). Recent studies have broadened the way of looking at this field by incorporating customer-based approaches moving closer to the view adopted by project marketing (Cova & Salle, 2005, Turner, Huemann, Anbari, & Bredillet, 2010). If we study project marketing and its adoption in the practical world, we see how the worlds of project marketing and project management overlap.

Marketing methods and practices are described by several associations through their bodies of knowledge (Chartered Institute of Marketing, 2014; American Marketing Association, 2014). Marketing is the promotion and selling of products and services and is everything that you do to reach and persuade prospects. The Chartered Institute of Marketing (2014) suggests marketing is the management process through which we identify, anticipate, and satisfy customer requirements profitability. Kotler & Lane (2008) define marketing as “satisfying needs and wants through an exchange process.” The American Marketing Association (2014) describes marketing a process for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Marketing is not about providing products or service, but is about providing benefits to meet the changing needs of customers. Project participants need to identify, anticipate, and satisfy customer requirements (Dalcher, 2014) and to satisfy customers’ needs through a process of exchange. However, there is a very low appreciation of the importance of project marketing among project practitioners (Patel, 2010). To help improve this appreciation, we aim to conduct further research into the nature of project marketing.

Project marketing adopts a marketing perspective on projects. According to the view adopted by researchers in project marketing, project marketing includes project management and sets projects in the wider context of the project business and project portfolio (Cova & Hoskins, 1997; Cova, Ghauri, & Salle, 2002; Tikkanen, Kujala, & Artto, 2003; Skaates and Tikkanen, 2003; Lecoeuvre-Soudain & Deshayes, 2006; and Blomquist & Wilson, 2007). On the other hand, project managers identify project marketing as a project management task (Gareis, 2005, 2006; Turner et al., 2010). They believe that project marketing is one of the roles of a project manager.

Winch (2014) has introduced a model which suggests that there are three organizations involved in the management of projects as shown in Figure 1:

  • Project: a temporary organization
  • Contractor: a project-based permanent organization
  • Initiator: an operations-based permanent organization

We use the word initiator for the third organization. This is the organization that identifies the opportunity for the project, initiates the project process, and provides the finance for its implementation. It may or may not be the eventual owner of the output from the project. A property development company, for instance, may develop a building but immediately sell it upon project completion. Within the initiating organization, there will be a sponsor, the person who first identifies the project opportunity and argues for its implementation, and the investor who provides the finance for the project.

All three types of organization are involved in the marketing of projects. Our proposal is as follows:

  1. Project marketing being part of project management is marketing of the project to its stakeholders and is part of the stakeholder engagement process.
  2. Project management being part of project marketing is marketing done by the contractor for this and future projects undertaken by the client, and is part of the management of the project business and the project portfolio comprising the contractor’s business.
  3. The third element has been ignored by the project marketing literature up until now. The initiator has to market the project at six stages of the project and investment process: concept, feasibility, design, execution, commissioning, and operations, (Turner et al., 2010; Turner, 2014), to win support for this and future projects from its supporters including financial and political backers and the general public.
Three organizations involved in the management and marketing of projects, after Winch (2014)

Figure 1: Three organizations involved in the management and marketing of projects, after Winch (2014).

In this paper, we review the literature on project marketing. In the following two sections, we explore project marketing from the perspectives of project management and project marketing researchers. We also consider the relationship between project marketing and project portfolio management. However, there is little literature on marketing from the perspective of the initiator. Therefore, as a basis for our future research, we develop a model for marketing of the project by the initiator at the six stages of the project and investment process.

Project Marketing from the Perspective of Project Management Researchers: Marketing by the Project

The project management community views a project in several ways (Turner et al., 2010):

  • As a system, (Cleland & King, 1983; Kerzner, 2009)
  • As a process, (Garies & Stummer, 2008; Turner & Huemann, 2014; Turner, 2014)
  • As a temporary organization, (Turner & Müller, 2003)
  • As a social construct, (Gareis, 2005; Turner et al., 2010)

A project can be viewed as a temporary endeavor undertaken to create a unique product, service, or result, (Project Management Institute, 2013), as a time and cost-constrained operation to realize a set of defined deliverables according to defined requirements, (International Project Management Association, 2006), as a management environment that is created for the purpose of delivering one or more business products according to a specified business case, (Office of Government Commerce, 2009), or as a temporary organization to which resources are assigned to deliver beneficial change, (Turner & Müller, 2003). According to these views, a project is depicted as an agency for change, a temporary organization, an operation, and a management environment. They all see the project as being strictly limited in time, as shown in Figure 2, starting with the process of project assignment through the project charter and finishing with the commissioning of the project’s output.

The project management process, (after Gareis, 2005, 2006)

Figure 2: The project management process, (after Gareis, 2005, 2006).

According to this view, the project marketing process starts after the project assignment and stops before the project approval phase. Project marketing is a part of the project management process. During the project start process, the preproject phase, information is transferred top-down, using the project charter, and includes the project objectives, project plans, project organizational design, team building information and activities, risk management and analysis, social construction of the project, development plans of project context relationships, initial project marketing, and creation of the initial project management documentation (Gareis, 2005; Turner, 2014). The project coordination process is a continuous process that ensures project performance, existence of sufficient information for project team members and continuous support for completion of work packages. Project controlling analyzes the project status, redevelopment of the project organization and culture, reanalysis of project objectives, and redesign of project context relationships. This process also executes project marketing actions (Gareis, 2006). A project discontinuity can be described as a project crisis, opportunity, or phase transition. Project close-down covers the planning and completion of all the remaining project tasks, project evaluation, dissolving project team, initiation of the post-project phase, and transfer of the lessons learned to the permanent organization. At this phase, project environment relationships are dissolved (Turner, 2014), and project marketing actions begin to close down.

During this entire process from project assignment to project approval, project marketing is practiced in parallel to project coordination. However, by this view, there is no mention of project marketing between two projects whereas we see that marketers suggest this is an essential phase where relationships and communication must be maintained to identify a new project’s opportunities and ensure continuous activity by the company.

Project management researchers believe the project marketing process ensures appropriate management attention and minimize conflicts in the project and in the relationships with relevant environments. According to this view, project marketing can be defined as project-related communication with relevant project environments (Turner et al., 2010; Müller & Turner, 2010). The basis for the field of marketing can be found in the project environment analysis and development of the project culture (Müller & Turner, 2010). They emphasize the importance of understanding project environment analysis in addition to organizational and project culture. They identify key components of project marketing such as, negotiating the fuzzy front end, structuring the project solution, managing stakeholder relationships, identifying the interrelationships of marketing and project management, and marketing in the project based firm (Gareis, 2006).

The objective of project marketing is to communicate strategies to the project environments (Turner et al., 2010, Müller & Turner, 2010). All project marketing actions have the purpose of building trust, informing and developing consensus with the environment, and contributing to the integration of all activities; and is therefore part of the stakeholder engagement process (Eskerod, 2013; Huemann, Eskerod, & Wenninger, 2014; Turner, 2014). In projects, we can notice the difference between object-oriented marketing activities (such as cost/benefit of the project results) and process-oriented activities. Project marketing should be performed by all members of the project organization. Accomplishing these goals requires a new orientation of the project managers’ roles and responsibilities. The project managers now also have marketing responsibilities, (Turner et al., 2010, Müller & Turner, 2010).

Project Marketing from the Perspective of Project Marketing Researchers: Marketing for the Project

Through project marketing, a firm manages multiple projects for a given client, focusing on the long-term consequences of the portfolio of projects it manages for the customer’s business. Project marketing researchers (including: Cova & Hoskins, 1997; Cova et al., 2002; Tikkanen et al., 2003; Skaates, 2003; Lecoeuvre-Soudain & Deshayes, 2006; and Blomquist & Wilson, 2007) claim that while project management deals with organizational and management issues, project marketing deals with sales and marketing issues of projects. They define a project strictly from the marketing perspective, suggesting that a project is a complex transaction covering a package of products, services, and works specifically designed to create capital assets that produce benefits for a buyer over an extended period of time (Cova & Salle, 2005). They emphasize that the project concept must be redefined to encompass the management of projects, (Morris, 1997), including the activities from the very early preproject phase to the very late post-project phase.

These broader time frames have diverse origins (Cova & Salle, 2005):

  • Customer-based approach to project management
  • Supply chain management
  • Project strategic orientation

This definition forms the basis of their view of project marketing. Project marketing focused on a customer-based approach helps build and maintain long-lasting relationships with key clients avoiding short-term opportunism. Project marketing also builds and maintains relationships between several projects for the same customer. Cova et al. (2002) propose that project marketing is supported by the following key elements:

  1. A marketing process in three phases:
  • Independent of any project
  • Pre-tender
  • Tender preparation
  1. The existence of three pertinent levels of analysis and decision:
  • Milieu
  • Client
  • Project
  1. The management of business and nonbusiness actors
  2. The management of a supplier’s rational position and functional position
  3. Risk or uncertainty as the driver of behavior of the actors
  4. Solutions as a means to create value for the customer

Figure 3 illustrates the project marketing process through the three phases (Cova et al., 2002). This suggests that strategy is the prerequisite for developing the project marketing process. The “independent of any project” phase should help emerging projects to be detected among the customers. The marketing approach here is defined as anticipation. The next stage is the pre-tender stage where project screening should take into consideration project characteristics and strategic intent. Once the project has been screened and requirements reviewed, we enter into the project development phase. The tender preparation phase begins with the bid to tender with negotiation and contract phases following soon after (Cova et al., 2002).

The project marketing process as viewed by the project marketing literature, (after Cova et al., 2002)

Figure 3: The project marketing process as viewed by the project marketing literature, (after Cova et al., 2002)

Cova et al. (2002) also suggest that there are three distinguishing features of project marketing:

  1. D: The discontinuity of demand for projects
  2. U: The uniqueness of each project in technical, financial, and socio-political terms
  3. C: The complexity of each individual project in terms of the number of actors involved throughout the supply process.

According to this school of thought, the first goal of the project marketing process is to win the contract. Project marketing, however, is a continuous process that occurs during the realization and project follow-up phases. The follow-up phase, which occurs after the project has been delivered, is very crucial since this determines customer satisfaction, key account development, and its success will reduce the discontinuity of project activities (Lecoeuvre-Soudain & Deshayes, 2006; Cova et al., 2002). For this reason Lecoeuvre-Soudain & Deshayes (2006) added a fourth phase to the project marketing process—the post-project phase shown in Figure 4, providing the following four phases of project marketing:

  1. Preproject Marketing: The project does not exist yet, but the supplier anticipates the customer’s requirements, develops themes for the potential bid (Bernink, 1995), and maintains the relationship with the client.
  2. Marketing at the Start of the Project: The supplier starts with co-construction of rules beside and within the network of influential relationships.
  3. Ongoing Project Marketing: The supplier, client, and subcontractors proceed with re-negotiation, modifications, follow-up, and meetings following one another with constant relationship exchanges until the end of the project.
  4. Creating the Conditions for Future Projects: The supplier maintains the relationship with the client, through logistics support and dormant relationships which enables the supplier to manage discontinuity in project business and prepare for future projects.
Four phases of project marketing (after Lecoeuvre-Soudain & Deshayes, 2006)

Figure 4: Four phases of project marketing (after Lecoeuvre-Soudain & Deshayes, 2006)

Project marketing researchers (Cova & Hoskins, 1997; Cova et al., 2002; Tikkanen et al., 2003; Skaates, 2003; Lecoeuvre-Soudain & Deshayes, 2006; and Blomquist & Wilson, 2007) consider overcoming demand-related discontinuity to be one of the major strategic issues in project marketing. After a project has been completed, a so-called dormant relationship begins where there is a possibility of future needs for improvements or replacements regarding the project or the requirement of certain expertise possessed by the supplier. This dormant phase is important not only in identifying project opportunities but also in building and sustaining relationships between the buyer and the seller. This phase of discontinuity is very important as relationships here are maintained by social and informational exchange throughout the phase and affect future business (Skaates & Tikkanen, 2002).

Project Portfolio Management

Before we consider project marketing from the perspective of the investor, we consider project portfolio management with links to the two perspectives we have seen, which leads into marketing from the perspective of the initiator. We saw that project marketing as envisaged by marketers starts with organizational strategy and continues after the project, but in the view of the project management community, it begins with project assignment and finishes with the project. Some people from the project management community may disagree with this limited view of project management, saying the definition of the project goes back to the identification of the idea for the asset it produces in corporate strategy and continues to the eventual decommissioning of the asset. But we must differentiate between the project and the investment, or asset it produces, (Gareis, 2005). Gareis differentiates between the project process and the investment process, Figure 5. The project is the temporary organization required to deliver the asset. It begins with project assignment and ends with project closure as illustrated in Figure 2, and project management only encompasses those stages. Therefore if project marketing is only viewed as a task of project management, it can only encompass those stages and not the “independent of any project,” “pre tender,” and “tender preparation” phases.

The project process versus the investment process, after Gareis (2005)

Figure 5: The project process versus the investment process, after Gareis (2005)

We can also differentiate between project management and the management of projects (Morris, 1997). The management of projects, includes project portfolio management that links corporate strategy to project management (Morris & Jamieson, 2008; Turner, 2014), and includes the “independent of any project” and post-completion phases. Therefore in trying to achieve a greater overlap between project marketing as viewed by the project marketing and project management communities, perhaps we need to consider project portfolio management. The pre- and post-project phases of project marketing as viewed by the marketers will take place at the project portfolio level.

A project portfolio is a collection of projects that are carried out in the same business unit, sharing the similar strategic objectives and the same resource pool, (Rad & Levin 2006; Turner, 2014). Portfolio management is considered to be a dynamic decision-making process with a list of active projects in the business that is constantly updated and revised. In managing a project-based firm, project portfolio management focuses on the potential and risks that project initiatives and projects carry for the success of the future business. It should therefore include searching for new customers, maintenance of the milieu and project capability, and screening of projects, as envisaged in Figure 3. It should also include logistics support of past projects and the maintenance of relationships with customers as envisaged by Figure 4. Additionally, emphasis is given on managing the company’s strategic portfolio of projects at an aggregate level (Rad & Levin 2006), which includes project prioritization, project review, project realignment, and project reprioritization

Project portfolio management is a strategic approach concerned with the enterprise as a whole. It is a management process responsible for identifying, anticipating, and satisfying customer requirements profitability, which is marketing as defined by the Chartered Institute of Marketing (2014), and so brings project marketing within the realm of the portfolio manager. Portfolio management is much more encompassing than project or program management and involves “identifying enterprise opportunities, selecting the projects to help fulfill these opportunities, planning and executing these projects, and continually assessing the benefits of these projects to organizational success” (Rad & Levin, 2006). Continuous monitoring of each project’s contribution and alignment to the enterprise goals are a key part of project portfolio management (Rad & Levin, 2006). A primary objective of project portfolio management includes maximizing the value of the portfolio, balancing portfolio in many dimensions, and linking to strategy that reflects alignment between projects, strategic content, and resource allocation intended in the strategy of business. This covers the “independent of any project” and “post-project phases in Figures 3 and 4.

Project Marketing from the Perspective of the Initiator: Marketing of the Project

The third organization involved in the management of projects is the project imitator—the organization that (a) identifies the project opportunity where an asset can be built or a change undertaken that will provide benefit,(b) initiates the work of the project to build that asset; and (c) provides the finances. Very little has been written about this element of project marketing. Marketing by the project takes place within the project as illustrated in Figure 2, and is a process of trying to engage the stakeholder with the project. Marketing for the project is performed by the contractor to persuade potential clients that they have the competence to do projects and that they can deliver projects which will provide value to the client. The process by which this is accomplished is illustrated in Figures 3 and 4.

Figure 5 illustrates that the project process is part of an overall investment process. The project’s output is produced during the project process and provides returns through the operation and maintenance phase. The investor needs to market the project output and the products or services it delivers—the outcome— through the investment process. Figure 6 illustrates a project process attributed to Turner (2014). First this shows that the project produces results on several levels:

  1. The output: This is the new asset which the project produces.
  2. The outcome: The output is operated to provide products or services which provide benefit. These can take several forms. On an internal project, the initiator is the owner who sells the project outcome to his or her own company, and obtains benefit from the internal operation of the asset. On an external project, the initiator is also the owner; however the owner sells the project outcome to external parties and obtains benefit from the revenue stream. On a development project, the initiator sells the output to a new owner. The initiator’s outcome is the one-off payment, from which benefit is obtained. The new owner may then operate the new asset internally or externally..
  3. The goals: Operation of the outcome may, with time, lead to the attainment of higher level strategic goals, which will provide higher levels of performance improvement and benefit.

Figure 6 also illustrates several stages of the investment (or management of projects) process. Concept, feasibility and front-end design cover the pre-project phase in Figure 5. Execution (which includes detail design) and close-out cover the “project” phase in Figure 5. Operation and maintenance follow close-out. The investor may want to market the output, outcome and goals through all these stages:

The project and investment process and three levels of project results

Figure 6: The project and investment process and three levels of project results.

Very little has been written about the marketing of project’s output and outcome. Marketing of the output itself—or the product made by it during commissioning and early operation— can be covered by standard marketing theory. But we believe further research can be done into marketing during the pre-project and early project phases, and marketing during the operation phase, to win political or public support for future projects. Early work on marketing during the pre-project and early project phases was done by Foreman (1996). However since Foreman was looking at internal marketing, she mainly focused on one part of the initiating organization—marketing the project to other parts of the same organization—and so to an extent, it fell under stakeholder engagement.

We propose that further research be undertaken on marketing by the project initiator, and therefore propose the model in Table 1 as the basis for this research as follows:

  1. Concept: The sponsor identifies a problem or opportunity, suggests that a new asset can be built to solve the problem or exploit the opportunity in a way where the expected benefit will justify the expected cost. A potential investor needs to be persuaded to support the concept, by showing them that the investment will provide adequate returns. An investor needs to be persuaded to finance the feasibility stage against the potential benefits. Political or public support needs to be obtained for infrastructure projects. An example in the United Kingdom is the HS2 project, to build a high speed line to the North of the country. The wrong message was pitched to the country. The public doesn’t think it is worth £50 billion (US$83 billion) to reduce the travel time to Birmingham by ten minutes, but might be feel it is justified by the potential economic development.
  2. Feasibility: The feasibility of the concept is shown and the initial business plan developed. The interest of the investor needs to be maintained, and the investor needs to be persuaded to provide financing for front-end design by being shown that the potential returns still justify the cost. Political and public support needs to be maintained for infrastructure projects.
  3. Front-end design: The business plan is further developed. The investor needs to be persuaded to provide the finance for execution, by being further persuaded of the efficacy of the proposal to provide adequate returns. Political and public support needs to be maintained for infrastructure projects.
  4. Execution: As money is spent, the investor’s commitment may waiver. The commitment needs to be maintained. If the project doesn’t progress as expected, especially if it becomes overspent, political and public support must be maintained.
  5. Commissioning: A developer will try to sell the asset. Otherwise an internal or external market needs to be developed for the outcome. In the case of the developer or external marketing, it will be covered by standard marketing theory. In the case of the internal market it will be covered by the work of Foreman (1996).
  6. Operation: If the outcome is being sold, the market for that product must continue to be developed. Also the value of this new asset may need to be demonstrated to win political or public support for future projects.

Table 1: Marketing of the project’s output by the investor

Project stage Aim of Marketing Examples
Concept

Win support for the initial project concept

Obtain political and public support

Gain the interest of a potential investor

Obtain funding for feasibility

Winning public support for infrastructure projects.

For instance with HS2, persuading that:

oTraveling to Birmingham 10 minutes more quickly is worth £50 billion ($US83 billion)

oEconomic regeneration of the north of England is worth £50 billion

Feasibility

Maintain support for the project concept

Maintain political and public support

Obtain funding for front-end design

Front end-design

Convince interested parties in the efficacy of the proposal

Maintain political and public support

Obtain funding for detail design and execution

Execution Maintain political and public support
Close-out

Sell the project’s output

Establish a market for the outcome

Sell a newly built building to an investment company, or to an owner/occupier

Develop a market for a new product

Operation

Establish a market for the product made by the project’s output

Prove to the public or political sponsors the value of the product and obtain support for future projects

Use standard marketing

Use NASA’s marketing of project Curiosity

Conclusion

To date, the project marketing literature has focused on just two elements of project marketing: (a) marketing by the project to engage with stakeholders, and (b) marketing for the project by the contractor. The marketers try to demonstrate to the client that they have the competence to do their projects and try to win these and future projects. Based on these two elements of project marketing, there has been a debate in the literature about whether project marketing is part of project management, or project management is part of project marketing. However, we propose that they are two distinct elements for project marketing. The first element is marketing by the project itself, and the second is marketing by the contractor for current and future work as part of the project business and the portfolio of projects in progress.

Based on the work of Winch (2014) we proposed that there is third party involved in the marketing of projects, the project initiator, and that it needs to market the new asset the project will develop, the project output, and the products or services provided by that output, the project outcome, and that they can do this at several stages during the project or investment process. We provided an initial model of what this may entail as a basis for future research we plan to do.

References

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Patel, K. (2010). PhD Thesis, SKEMA Business School.

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Laurence Lecoeuvre, PhD, was formerly an international director within the industrial sector and car industry (1984-2001). She joined SkEMA Business School in 2001. After a few years as Business Programs Director, she became director of the Project Management Department. As a member of the Board of Directors, associate dean in charge of the coordination of the doctoral programs of the group, Laurence is piloting the PhD and the DBA in Programme and Project Management.

Laurence mainly teaches research methodology to MBA and PhD/DBA students, especially qualitative research and data interpretation, and system modeling. She also teaches project management fundamentals, project marketing, and management of stakeholders to master programs. Laurence is also involved in executive education.

Her PhD (2005, at Ecole Centrale Paris) focused on the links between project marketing and project management, in the business to business sector. She continues to develop research on the topic of project marketing and also on governance. She received “Habilitation to Direct Research” (HDR) (accreditation to supervise research) in 2009 at Lille University of Health and Law.

Laurence publishes in international journals and publishes books and chapters with renowned colleagues in the area of project management. Topics of interest include project marketing, sustainable project performance, and project governance.

Rodney Turner, PhD, is a professor of project management at Kingston Business School and at SKEMA Business School, in Lille France, where he is scientific director for the PhD in project and program management. He is also an adjunct professor at the University of Technology Sydney. Rodney is the author or editor of eighteen books and editor of The International Journal of Project Management. His research areas cover project management in small to medium enterprises, management of complex projects, governance of project management, including ethics and trust, project leadership, and human resource management in the project-oriented firm. Rodney is vice president, Honorary Fellow of the UK’s Association for Project Management, and Honorary Fellow and former president and chairman of the International Project Management Association. He received a life-time research achievement award form PMI in 2004 and IPMA in 2012.

©2014 Project Management Institute Research and Education Conference

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  • PM Network

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    By Fister Gale, Sarah Las tasas de adopción de tecnología financiera entre los consumidores casi se han duplicado cada dos años desde 2015, y el ritmo solo se aceleró durante la pandemia.

  • PM Network

    The Future of Learning member content open

    By Fister Gale, Sarah, More than 1 billion children in at least 185 countries were impacted by school closures related to the global pandemic last year.

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