2238554 hurricane island marketing plan

8/8/2019 2238554 Hurricane Island Marketing Plan

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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.

2238554 hurricane island marketing plan

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