2238554 hurricane island marketing plan
TRANSCRIPT
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HurricaneIsland
MarketingPlan
1986
TaigeZhang
ManagerialMarketing
Prof.JohnWright
3/8/2008
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Hurricane Island Marketing Plan
I. ExecutiveSummaryHurricaneIslandOutwardBound(HIOB)isonthevergeofmakinganoperationalprofitforthefirsttime
initshistorybecauseofrapidgrowingdemandandbettermanagement.Managementhasembraced
theideaofmarketingtoincreaseattendancebyteenager,corporateexecutives,andpeopleinneed.
WiththelaunchofProfessionalDevelopmentProgram(PDP),bettermarketingstrategies,andprogram
structurechanges,HIOBseekstobecomeconsistentlyprofitablewhilebenefitingsociety.
II.SituationAnalysisA. Marketsandcurrentmarketingstrategies
Compositionofcurrenttargetmarketsegmentsare:1)specialprograms:specificgroupssuchas
veterans,youthswithdisabilities,juveniledelinquents,substanceabusers.2)publiccourses:students
betweenages1419.Arecentlynewsegmentofthemarkethasbeendiscoveredwhichiscomprisedof
executivesandmanagers.PDPdesignedtoservicethismarkethasprovensuccessful.Graphshows
eachmarketscontributiontobusinessareascurrently.
HIOBscorporategoalsaretocontinuegrowthandattainfinancialstabilitywithafocustomaintainits
leadershipwithinNationalandreduceseasonalityeffects.Itsmissionistoprovidesafe,challenging
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educationalexperiencesinawildernesssetting,carefullystructuredtoimproveselfesteem,self
reliance,concernforothers,andcarefortheenvironment.
Currentmarketingstrategies:Nationalconductsthefundraising,publicity,andadvertisingforHIOBfor
amarketingfee.Themarketingtacticinstigatedin1980wasgrouppresentationsbystaff/faculty
volunteersat
other
schools
when
requested.
Other
strategies
included
direct
mail
marketing
in
which
theschoolcoursecatalogalongwithNationalscoursecatalog.Laterin1986,HIOBcreated4strategic
initiatives1)segmentingmarkets:1419yearoldsinnortheasternUS2)developingnewpricing:aiming
tosmoothseasonalitydemandandmaximizerevenuebyloweringpriceinoffseasonandincreasing
duringpeak3)changingcoursemixand4)assigningfinancialaiddollarstolowdemandareas.HIOB
usednewtacticssuchasusingdirectsalesrecruitertogivepresentationsatschools,groups,
associationsandbusinesses;targeteddirectmailtoprincipalsofpublicandprivatehighschools;
telemarketingtowardsprospectivestudentsthathaveexpressedinterest;andsalescallstomajor
corporationstoenrollinPDP.Theseeffortshavebeensomewhatsuccessful.
B.Performance
Markettrends:Therewereanincreasingnumberofpubliccoursestudents,whileexecutiveswere
interestedinprogramstobuildteamwork,leadership,communication,stressmanagementandgoal
setting.Peoplewerebecomingmoreawareoftheenvironmentandinterestedinselfimprovement.
Saleshistory:HIOBhashadsteadygrowthinsalesofbothpublicandspecialprogramcourses,buthas
alsoincurredadditionalcosts.
.
1986isforecasted
Profitability:HIOBhashistoricallybeenunprofitable.Ithasneverbrokenevenonanoperatingbasisand
hasreliedoncontributionstomakeuptheoperatingdeficits.RecentdatashowsthatHIOBisontrackto
possiblybreakevenforthefirsttimein1986.
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1986isforecasted.
III.OpportunitiesandThreatsA. Challengesorthreatstofuturemarketingactivities New,moreefficiententrantsthatengageinsimilarbusinessservices.ThiscouldtakemarketshareawayfromHIOBanddecreasesales.
Reversalinconsumerbehavioraltrends.Ifconsumersstopengaginginoutdoorsummeractivities,optingforwork,vacation,andschoolinstead,HIOBmaynotbeabletostayin
business.
Riskofoutsidefundinganddonationsdryingup.Currently,HIOBreliesondonationsandoutsidefundingtostayafloatwhichmeansiftheadditionalcapitalwasreducedordiscontinued,itmay
notbeabletosurvive.
B. Opportunity PDPoffersaprofitablenewmarketusingslightlymodifiedcoreproducts.Afterexperimentingwiththeprogram,itseemsthatPDPcanprovidehighermargins,morerevenue,andmoredays
ofoperation.
Developmentofnewservicesandproducts.Withyearsofexperience,HIOBisinapositiontodevelop
new
programs
and
training
activities
in
new
locations
and
athletic
areas.
Corporatetieinsandsponsorship/fundingopportunities.Theyareinapositiontoleveragecorporatedonationsandsponsorshipsvianewcorporateclientsandbusiness.
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IV.EnvironmentalA. Legal,political,andregulatoryfactors
HIOBhasrelativelylittlelegal,political,andregulatoryfactorsrelevanttotheirbusiness.Theyhavea
goodsafetyrecord,arelegallyestablished,donotbreakanylaws,donotseekgovernmentfunding,and
aremostly
unregulated.
B. SocialandculturalfactorsIntermsofsocialandculturalfactors,HIOBappealstopeoplethatcareabouttheenvironmentand
enjoytheoutdoors.Itislikelytherewillnotbeashortageofpeopleseekingoutdooreducation,self
improvement,andphysicalactivity.
C. EconomicfactorsIftheeconomyisgrowing,peoplewillhavemoredisposableincometodowhattheyenjoy.Businesses
canaffordtoprovidetrainingprogramssuchasPDPfortheiremployees.However,ifeconomic
conditionsweretoturnadverse,itislikelythatdemandforHIOBproductswillbesuppressed.
D. CompetitivefactorsCurrentlytherearefewdirectcompetitorsbesidesotherOBschools.However,thatmaychangeifHIOB
becomemorepopularandprofitable.Forpubliccourses,HIOBhasindirectcompetitionwithsummer
camps,vacations,summerjobs.SpecialProgramshavecompetitionwithotherrehabilitationcenters
andrecoveryprograms.PDPhascompetitionwithconferences,universities,certificateprograms,and
othercorporatetrainingprograms.Itislikelycompetitionwillincreaseinthefuture.
E. TechnologicalfactorsTechnological
factors
can
help
reduce
costs
for
HIOBs
operations
and
marketing.
For
example,
HIOB
can
purchasenewequipmentforlowerprices,targetconsumersmoreefficiently,andreducestaff.
However,technologycanalsotakeawaymarketshareasitoffersnewalternativesforconsumers.For
example,corporationsmaychoosetotraintheiremployeestoworkwithnewcomputerprograms
insteadofaugmentinginterpersonalskills.
V.CompanyStrengthsandWeaknessesA. Financialresources
HIOBhas
aweak
financial
position
as
aresult
of
never
making
an
operating
profit.
In
1985,
its
assets
totaled$3,981,000andtotalrevenueamountedto$4,954,000,whiletotalliabilitieswereequalto
$1,443,000. AlthoughHIOBdoesnthaveagreatamountofdebt,itwillhavedifficultyborrowingmoney
becauseofitsinabilitytogenerateaprofit.However,financialconditionsareimprovingthoughits
marketingefforts,increasinginprices,andprogrammodifications.In1985,itnarroweditslossto
$162,000andmanagementpredictsthatHIOBwillsoonbeprofitable.Themarketingbudgetallocated
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for1987was$308,000or6.22%of1985stotalrevenueor10.06%ofits1986projectedrevenuefrom
publiccourses.
B. PhysicalHIOBisheadquarteredinRockland,MaineandhadsitesinFlorida,NewYork,NewHampshire,and
Maryland.Its
geographical
growth
had
outstripped
its
ability
to
manage
it,
but
HIOB
has
recently
put
in
placecompetentmanagementtodrivetheschoolintoprofitability.Itsstronggeographicpresencegives
itthepotentialittocapturealargermarketandgaingreaterawareness.
C. HumanresourcesIn1985,HIOBcreatedvicepresidentrolestotakeoverdaytodayoperatingresponsibilities.Previously,
itlackedhumanresourcesformarketingandpublicrelationsbutin1986,itrecruitedamarketing
directortomanagethebrandanddrivesales.HIOBhasastrongprogrambecauseofitshighquality
instructorswhowerecertifiedandhighlycompetent.However,staffturnoverhasbeenaproblem
becauseofthedramaticseasonalityofthebusiness.Itwasunabletohirefulltimestaffandthus,
neededto
exert
much
effort
in
recruiting
instructors
for
several
months
of
work
each
season.
D. IntangibleHIOBhasmuchintangiblestrengthsuchasgoodwill,vision,andastrongnetwork.Thoughitsyearsof
business,ithadbuiltasolidreputationforconsistentlydeliveringhighqualitytrainingprograms.Ithas
establishedavaluablealumninetworkandrecruitedanactive,successfulboardofdirectors.This
strengthgivesHIOBthecapacitytogeneratenewbusiness,obtaindonations,andgainnewcustomers.
Ithasastrongcorporatecultureandstakeholdersthatbelieveinitscorporatevaluesandmission.This
isbothastrengthandaweaknessbecauseemployeesthatbelieveinthefirmworkharderandmorein
theinterestofthebusiness,butabusinessthatonlyseekstobenefitsocietycannotsurvivewithout
generating
income
and
positive
cash
flows.
E. ExperienceandexpertiseHIOBhasagreatsafetyrecordandreputation.Ithasalong,excellenthistoryandistheleadingOB
school.Inbusinesssince1964,HIOBsuccessfullygrewitsstudentbase,courseofferings,locations,and
staff.HIOBhasyearsofexperienceandexpertiseinoutdooractivitiessuchassailing,rafting,cycling,
etc.Theyhavehonedtheirprogramstobeeffectiveandrewarding.
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VI. MarketingObjectiveThemarketingobjectiveistoachieveaconsistentpositivenetincomebyincreasingtotalrevenuesby
15%yearlyandlaunchingthePDP.
VII. MarketingStrategiesThestrategytoachieveourobjectiveisto1)marketmoreefficientlytotheyouthmarket,2)develop
thecorporatemarkets,and3)adapttheprogramstructureforgreaterefficiencyandreducecosts.
Specifically:
NewMarketDevelopment:
IncreasetherevenuecontributionfromPDPfrom0%to32% IncreasePDPstudentsfrom0%to15%ofthetotalstudents
ProgramStructure:
IncreasethePDPprogramto10%oftotalProgramdays ReducePDPandSpecialProgramsduringpeakseasonandincreaseinoffseason.
A. TargetmarketThreetargetmarketsegments
i. PublicCourses:Teenagers(EstimatedMarketSize12.5Million)a. Demographic:Agesbetween1419,middletoupperclassfamily,boys,single,ownssportingequipment
b. Geographic:Maine,Florida,Florida,NewYork,NewHampshire,Maryland,andotherlarge
cities
in
east
coast
of
USA
c. Behavioral:Activelifestyle,pursuesmanyextracurricularactivities,playssportsd. Psychological:Enjoyoutdoors,dedicatedtoselfimprovement,likesachallenge
ii. SpecialPrograms:PeopleinRehabilitation(EstimatedMarketSize0.05Million)a. Demographic:Agesbetween2049,lowertomiddleclass,single,unemployed
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b. Geographic:Maine,Florida,Florida,NewYork,NewHampshire,andMarylandc. Behavioral:Unhealthylifestyle,seekinghelpd. Psychological:Notstrongminded,recovering,antisocial
iii. PDP:Corporateexecutives(EstimatedMarketSize0.1Million)a. Demographic:Agesbetween2849,middletoupperincomebracket,white,married,ownssportingandoutdoorequipment
b. Geographic:EastCoastofAmericac. Behavioral:engagesinexerciseandoutdooractivities,traveling,busylifestyle,involvedinphilanthropy,community,orvolunteering
d. Psychological:Enjoyoutdoors,dedicatedlearningandselfimprovement,likeschallenges
Thedesiredcontributiontostudents,programdays,andrevenuefromeachmarketsegmentis
illustratedbelow.
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B. Marketingmix
ProductNew
higher
level
public
courses
will
be
created
for
students
who
have
taken
previous
courses.
These
courseswillstrengthenandaddontotheskillstaughtinpreviousclasses.Higherlevelcourseswould
inducerepeatpurchasesandenhancethevalueofcustomers.Inaddition,somecourseswouldbe
certificationcoursesmakingthestudentsupongraduationsemiqualifiedtobeHIOBinstructors.This
wouldimprovethestaffturnoverproblemsasHIOBwouldcreatepotentialinstructorswhoarepre
screenedandalreadyhavearelationshipwithHIOB. Topgraduateswouldbeofferedaninstructor
positionforthefollowingsummerandsincetheyarefamiliarwithandhavealreadytakenseveralHIOB
courses,trainingtheseinstructorswouldbelesscostly.
SpecialProgramswillrunalmostentirelyduringtheoffseasonbecausemostoftheirstudentssuchas
veterans
arent
restricted
by
school
schedules.
This
leaves
the
summer
season
to
generate
the
most
revenuefromteenagersattendingpubliccourses.NinetypercentofPDPcourseswillalsobescheduled
torunfromSeptembertoMayforsimilarreasons.Sincecorporationshaverelativelyinflexible
schedulesanddotrainingallyearround,HIOBwillbeaccommodatingtobusinessschedulesbut
mandatecompaniestobookfarinadvance.ThisgivesHIOBampleroomtoplanandmanageits
resources,reducingcosts.
Anewwaitinglistforstudentswhocantaffordpubliccoursesatfullpricewillbecreated.Studentson
thelistwouldpayalowerfeeifthereisroomleftovertoinsuredemandandtoservelowincome
families.Awishlistwillbemadeavailabletotheseandlesswelloffstudents.Studentsonthewishlist
wouldbesponsoredbycorporateexecutives,alumni,andbenefactors.
AtrialprogramcalledFamilyUnityProgram(FUP)gearedtowardscouplesandfamiliesfacingmarital
problemswillbetestedfromJuly1987toMayof1988.Inlightofincreasingdivorcerates,itwouldbe
prudenttoexplorethisnewmarketdevelopmentopportunity.Itisalsoaveryethicalandnoblecauseto
savemarriages.Thispilotprogramwillnotbeincludedinthemarketingbudget.
PDPwouldbepositionedasapremiumproductforcorporationsthatdesiresuperioremployeeswho
trustoneanotherandworkswelltogether.Publiccourseswouldbeamassmarketproductgeared
towardsteenagersthatwantanalternativetosummercamporschool.Specialprogramswouldbe
positionedasaneffectivemassmarketproductthataidsintherehabilitationofthoseintrouble.
PeopleTherewillbesomefulltimeinstructorsthatarekeptallyearbecauseofthechangesinprogram
structuretoalleviatetheseasonalityeffects.Moreinstructorswouldstillneedtobetrainedandhired
duringthesummer.Asmentioned,higherlevelcourseswouldbeagreatpooltorecruitinstructors
from.Newlyhiredmanagementcanincreasetheefficiencyofoperationsthroughbettermanagement
andallocationofresources.
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PriceThepriceofpubliccourseswillbeincreasedby15%asplanned.Inaddition,thetuitionforSpecial
Programswillbeincreasedby15%andPDPby25%fromtrialPDP.Certaincoursesmaybediscounted
duringoffseason.Higherlevelcourseswouldbediscountedtoenticerepeatpurchasesandstudentsto
becomeinstructors.
Returning
students
will
receive
a10%
discount
in
pricing.
These
price
increases
wouldnotlikelydecreasedemandverymuchespeciallyinthepeakseason.Waitinglistandwishlist
corporatesponsorshipprogramwouldsupplementdemandifitfell.
PromotionHIOBshoulduseadifferentiatedpromotionstrategytoeffectivelytargetitsthreetargetsegments.
PublicCourses(Primarilypullstrategy)o Introduce10%discounttoreturningstudentso Give10%discountvoucherstograduatesfamilyandfriendso Placeposters,ads,andsignsatsporting,gun,fishing,andotheroutdoorrelatedstoreso DistributeflyersatRV,boating,camping,gun,andcarshowso Developrelationshipwithlocalsportingstoresandgive5%discountswithpurchasefromthosestores.Inreturn,thosestoresprovidefreepromotion
o AdvertiseinoutdoormagazinesreadbyparentssuchasOutsideandmagazinesreadbyteenageboyssuchasSportIllustratedforKids
o Senddirectmailandbrochurestoschoolteachers,counselors,andPTA.Complementwithfollowuppresentationsandinvitationtoopendays.
o Createopendaysforpotentialstudentstolookatthefacilitiesandgetabetterideaoftheprogram.Onsiterecruiterswouldgivetoursofthesite,explaintheprogram,and
givetheoptiontoenroll.Paststudentswouldprovidetestimonials.
SpecialPrograms(primarilypushstrategy)o IncreasenewcustomersbydevelopingrelationshipswithgroupssuchastheVeteransHospital,
Alcoholics
Anonymous,
rehabilitation
centers,
government
correctional
facilities,etc.
o CreateReunionDayswhichinvitepastparticipantstoreturnforonedaythefollowingyearforapicnicorbarbeque.Theyareinvitedtobringfriendsandfamilyandthiswould
providetheopportunitytoacquirenewcustomersthroughreferralaspreviousstudents
arelikelytobefriendswithpeoplewithsimilarproblems.
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PDP(primarilyapushstrategy)o IncreasenewcustomersbydevelopingrelationshipswithcorporationssuchasXerox,GE,Shell,Citigroup,etc.Useexistingnetworkofalumniandboardofdirectorstogain
referralsandnewbusiness.
o AdvertiseinmagazinesreadbycorporateexecutivessuchasFortune,Economist,andBusinessweek.
PlaceCourseswillbedistributedatexistingHIOBsitesinMaine,Florida,Florida,NewYork,NewHampshire,
andMaryland.
Process
Forpublic
courses,
after
groups
have
shown
interest
in
attending
HIOB,
recruiters
would
be
sent
out
to
explainandenrollstudents.IndividualsthathavecontactedHIOBwillreceiveanapplication,course
scheduleandaninvitationtoattendanopenday,inadditiontobeingrecordedintoitsdatabaseand
contactedperiodicallyregardingcourseseveryyear.Oncetheapplicanthasreturnedtheformswith
nonrefundablefeeanddeposit,theschoolwouldsendfurtherdetailsinpreparationforthecourseand
requirethestudenttopassaphysicalexam.Ifcoursesarefull,paidstudentswouldbeputonapriority
waitinglistwhichgivesthempreferenceovertheregularwaitinglist.Atthefinishofacourse,students
areadvisedfilloutsurveysabouttheirexperienceandmakesuggestionsforimprovement.Theywillalso
thenbeofferedtheopportunitytotakehigherlevelcourses,enrollfornextyearata10%discount,sign
upfortheHIOBorNationalnewsletter,andpickupvouchersforfamilyandfriendsdiscounts.
ForSpecialPrograms,recruitmentwouldbedonemostlythroughgroupsandagencies.Afterthecourse,
participantswouldbeaskedtofilloutasurveyandtosignupforReunionDay.
ForPDP,recruitmentwouldmostlybedonethroughdealingwithHR,topmanagement,andreferrals.
IndividualswhocontactHIOBwouldbesentapersuasivepamphletonthebenefitsofthetraining
program.AftercorporateexecutiveshavecompletedthePDPcourse,theywillbeaskediftheywantto
sponsorateenagertocompleteasimilarprogram.Theywouldbelikelytosponsorkidsaftertheyhave
experienceditthemselves.Thiswouldboostvolumeandenhancethevalueofcorporatecustomers.
Theywouldalsobeofferedthe10%familyandfriendsdiscounts.
PhysicalPresence
OpendaysaredayspotentialstudentsareinvitedtogoonatourofaparticularHIOBsiteandgeta
betterideaoftheprogram.Theycanseethefacilities,equipment,andlocation.Thesedaysalso
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coincidewiththelastdayofcoursessotheycanmeetinstructorsandrecentgraduatesandheartheir
thoughtsandopinions.
VIII. FinancialProjectionsandBudgetsA. Delineationofexpenses
Dependingonthebudget,thefundsforvariousmarketingtacticswillbeallocatedaccordingtothetable
below.MarketingInitiative PercentofBudgetPublicCoursesPosters,ads,signsatstores 15%
Flyersatshows 10%
StoreAlliance 2%
Magazineads 8%
DirectMail 10%
SchoolPresentations 5%
"Open"days 5%
ProgramSubtotal 55%
SpecialProgramDeveloprelationshipswithgroups 10%
ReunionDays 5%
ProgramSubtotal 15%
PDPDeveloprelationshipswithcompanies 20%
Magazineads 10%
ProgramSubtotal 30%
Total 100%
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B. EstimatesofRevenueHIOBisexpectedtobeprofitableby1987assumingthe15%growthintotalrevenueand10%growthin
totalexpenses.19861988dataareprojected.
IX.ControlsandEvaluationManagementwouldtracktheefficiencyofthevariousmarketingtacticsbydetermininghowstudents
foundoutaboutHIOBandwhatultimatelyinfluencedtheirdecisionstoenroll.Enrollmentcapacityand
programdayswouldbeevaluatedtoseeifprogramstructurechangeswereeffective.Finally,
profitabilityandROIofmarketingeffortswouldbeevaluated.
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X. RisksandContingencesAlthoughsomeriskssuchaschangesintrendsandgrowingcompetitionweredelineatedinthreats,
thereareseveralnotablerisksinimplementingthemarketingstrategydescribed.Primarily,changing
theprogramstructuretoincludemorePDPprogramdaysandschedulingcancausevolatilityin
revenues;however,sincemostofrevenuestillcomesfrompubliccourseswhichhavenotbeen
modified,thisreducestheextentoftherevenuevolatility.
Thereisriskthatthemarketingbudgetisspreadtoothinlyandnotfocusedenoughtogeneratestrong
results.AsmarketingisarecentinitiativeatHIOB,itcanbeseenasanexploratorystepindetermining
whichmethodsaremosteffectiveinreachingandattractingstudents.Futuremarketingdollarswillbe
allocatedcontingentontacticeffectiveness.Inaddition,howmuchincreaseddemandwillbecreatedis
hardtopredictandthusthereisarealriskofoverorunderproduction.
Riskalsoliesinherentlyindevelopinganewmarket.AlthoughPDPhasbeentestedandfoundtobe
successful,it
is
uncertain
how
much
demand
there
is,
price
sensitivity,
and
time
required
for
adoption.
However,sincePDPmustbebookedfarinadvance,riskismitigatedasmanagementhasmoretimeto
adjustoutputaccordingly.
IfPDPdoesnotmeetexpectationsafterseveralyears,itcanbeslowlyphasedout. Ifestablishedtobe
viable,FUPcanbelaunchedtoreduceseasonalityandboostrevenue.Anotheralternativeistosimply
shutdownallnonmarketingoperationsduringoffseasonandfocusonpubliccourses.