GRE v. GMAT: Battle of the B-School Gatekeepers

Friday, August 28th, 2009

Until recently, the GMAT exam had a virtual monopoly over business school standardized exams:

That all changed on Jan. 1, 2006, when GMAC cut its ties with the Educational Testing Service (ETS), with whom it had a decades-long partnership to develop and deliver the GMAT exam, moving instead to a new testing administrator, Pearson VUE. The severing of ties meant that ETS no longer had to abide by a noncompete clause with GMAC, giving it the green light to court business school admissions officers and promote the GRE as an alternative exam. Under the previous agreement between ETS and GMAC, this type of activity was forbidden.

“Once they ended the contract with us, we were able to move into this market,” says David Payne, head of the GRE program for ETS.

To capitalize on the opportunity, ETS has been aggressively marketing the GRE to B-school admissions officers in recent months, placing advertising campaigns in key business publications, paying visits to business schools admissions teams, and developing new testing tools that it hopes will convince more schools to use the GRE, says Payne. ETS has also been promoting the exam as a more affordable option for students; it costs $150 to take the GRE, versus $250 for the GMAT.

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