1986€

€ €
€
€ € € € € € € € €
Hurricane€Island€
Marketing€Plan€
€
Taige€Zhang€ Managerial€Marketing€ Prof.€John€Wright€ 3/8/2008€ €
Hurricane€Island€Marketing€Plan€
I. Executive€Summary€
€ Hurricane€Island€Outward€Bound€(HIOB)€is€on€the€verge€of€making€an€operational€profit€for
ecause€of€rapid€growing€demand€and€better€management.€Management€has€embraced€ the€idea€of€
ttendance€by€teenager,€corporate€executives,€and€people€in€need.€ With€the€launch€of€Profes
t€Program€(PDP),€better€marketing€strategies,€and€program€ structure€changes,€HIOB€seeks€to
tly€profitable€while€benefiting€society.€
II. Situation€Analysis€
€
A. Markets€and€current€marketing€strategies€
€ Composition€of€current€target€market€segments€are:€1)€special€programs:€specific€groups€s
ths€with€disabilities,€juvenile€delinquents,€substance€abusers.€2)€public€courses:€students
s€14‐19.€A€recently€new€segment€of€the€market€has€been€discovered€which€is€comprised€of€ ex
gned€to€service€this€market—has€proven€successful.€Graph€shows€ each€market’s€contribution€
ntly.€
€ € HIOB’s€corporate€goals€are€to€continue€growth€and€attain€financial€stability€with€a€foc
p€within€National€and€reduce€seasonality€effects.€Its€mission€is€to€provide€safe,€challengi
educational€experiences€in€a€wilderness€setting,€carefully€structured€to€improve€self‐estee
ce,€concern€for€others,€and€care€for€the€environment.€€ Current€marketing€strategies:€Natio
aising,€publicity,€and€advertising€for€HIOB€for€ a€marketing€fee.€The€marketing€tactic€inst
p€presentations€by€staff/faculty€ volunteers€at€other€schools€when€requested.€Other€strateg
rect€mail€marketing€in€which€ the€school€course€catalog€along€with€National’s€course€catalo
ted€4€strategic€ initiatives€1)€segmenting€markets:€14‐19€year€olds€in€northeastern€US€2)€d
ming€ to€smooth€seasonality€demand€and€maximize€revenue€by€lowering€price€in€off€season€and
k€3)€changing€course€mix€and€4)€assigning€financial€aid€dollars€to€low€demand€areas.€HIOB€
rect€sales€recruiter€to€give€presentations€at€schools,€groups,€ associations€and€businesses
ct€mail€to€principals€of€public€and€private€high€schools;€ telemarketing€towards€prospectiv
e€expressed€interest;€and€sales€calls€to€major€ corporations€to€enroll€in€PDP.€These€effort
essful.€
B. Performance€
€ Market€trends:€There€were€an€increasing€number€of€public€course€students,€while€executive
rograms€to€build€teamwork,€leadership,€communication,€stress€management€and€goal€ setting.€
oming€more€aware€of€the€environment€and€interested€in€self‐improvement.€€ Sales€history:€HI
ales€of€both€public€and€special€program€courses,€but€has€ also€incurred€additional€costs.€€
.
€1986€is€forecasted€
€
Profitability:€HIOB€has€historically€been€unprofitable.€It€has€never€broken€even€on€an€oper
lied€on€contributions€to€make€up€the€operating€deficits.€Recent€data€shows€that€HIOB€is€on€
n€for€the€first€time€in€1986.€€
€ 1986€is€forecasted.€
III.Opportunities€and€Threats€€
A. Challenges€or€threats€to€future€marketing€activities€
• New,€more€efficient€entrants€that€engage€in€similar€business€services.€This€could€take€ma
B€and€decrease€sales.€ €Reversal€in€consumer€behavioral€trends.€If€consumers€stop€engaging€
vities,€opting€for€work,€vacation,€and€school€instead,€HIOB€may€not€be€able€to€stay€in€ bus
ng€and€donations€drying€up.€Currently,€HIOB€relies€on€donations€and€outside€ funding€to€sta
dditional€capital€was€reduced€or€discontinued,€it€may€ not€be€able€to€survive.€
•
•
B. Opportunity€€
• PDP€offers€a€profitable€new€market€using€slightly€modified€core€products.€After€experimen
m,€it€seems€that€PDP€can€provide€higher€margins,€more€revenue,€and€more€days€ of€operation.
s€and€products.€With€years€of€experience,€HIOB€is€in€a€position€to€ develop€new€programs€an
cations€and€athletic€areas.€ Corporate€tie‐ins€and€sponsorship/funding€opportunities.€They€
o€leverage€ corporate€donations€and€sponsorships€via€new€corporate€clients€and€business.€
•
•
IV. €Environmental€€
A. Legal,€political,€and€regulatory€factors€
HIOB€has€relatively€little€legal,€political,€and€regulatory€factors€relevant€to€their€busin
d€safety€record,€are€legally€established,€do€not€break€any€laws,€do€not€seek€government€fun
ulated.€€ €
B. Social€and€cultural€factors€
In€terms€of€social€and€cultural€factors,€HIOB€appeals€to€people€that€care€about€the€environ
s.€It€is€likely€there€will€not€be€a€shortage€of€people€seeking€outdoor€education,€self€ imp
vity.€
C. Economic€factors€
If€the€economy€is€growing,€people€will€have€more€disposable€income€to€do€what€they€enjoy.€B
ide€training€programs€such€as€PDP€for€their€employees.€However,€if€economic€ conditions€wer
kely€that€demand€for€HIOB€products€will€be€suppressed.€€
D. Competitive€factors€
Currently€there€are€few€direct€competitors€besides€other€OB€schools.€However,€that€may€chan
opular€and€profitable.€For€public€courses,€HIOB€has€indirect€competition€with€summer€ camps
er€jobs.€Special€Programs€have€competition€with€other€rehabilitation€centers€ and€recovery€
ompetition€with€conferences,€universities,€certificate€programs,€and€ other€corporate€train
ams.€It€is€likely€competition€will€increase€in€the€future.€
E. Technological€factors€
Technological€factors€can€help€reduce€costs€for€HIOB’s€operations€and€marketing.€For€exampl
ew€equipment€for€lower€prices,€target€consumers€more€efficiently,€and€reduce€staff.€ Howeve
lso€take€away€market€share€as€it€offers€new€alternatives€for€consumers.€For€ example,€corpo
in€their€employees€to€work€with€new€computer€programs€ instead€of€augmenting€interpersonal€
V. Company€Strengths€and€Weaknesses€
A. Financial€resources€
HIOB€has€a€weak€financial€position€as€a€result€of€never€making€an€operating€profit.€In€1985
000€and€total€revenue€amounted€to€$4,954,000,€while€total€liabilities€were€equal€to€ $1,443
esn’t€have€a€great€amount€of€debt,€it€will€have€difficulty€borrowing€money€ because€of€its€
owever,€financial€conditions€are€improving€though€its€ marketing€efforts,€increasing€in€pri
m€modifications.€In€1985,€it€narrowed€its€loss€to€ $162,000€and€management€predicts€that€HI
e.€The€marketing€budget€allocated€
for€1987€was€$308,000€or€6.22%€of€1985’s€total€revenue€or€10.06%€of€its€1986€projected€reve
B. Physical€
HIOB€is€headquartered€in€Rockland,€Maine€and€had€sites€in€Florida,€New€York,€New€Hampshire,
aphical€growth€had€outstripped€its€ability€to€manage€it,€but€HIOB€has€recently€put€in€ plac
rive€the€school€into€profitability.€Its€strong€geographic€presence€gives€ it€the€potential€
rket€and€gain€greater€awareness.€€
C. Human€resources€€
In€1985,€HIOB€created€vice€president€roles€to€take€over€day‐today€operating€responsibilitie
cked€human€resources€for€marketing€and€public€relations€but€in€1986,€it€recruited€a€marketi
e€brand€and€drive€sales.€HIOB€has€a€strong€program€because€of€its€high€quality€ instructors
y€competent.€However,€staff€turnover€has€been€a€problem€ because€of€the€dramatic€seasonalit
nable€to€hire€full€time€staff€and€thus,€ needed€to€exert€much€effort€in€recruiting€instruct
k€each€season.€
D. Intangible€
HIOB€has€much€intangible€strength€such€as€goodwill,€vision,€and€a€strong€network.€Though€it
d€built€a€solid€reputation€for€consistently€delivering€high€quality€training€programs.€It€h
uable€alumni€network€and€recruited€an€active,€successful€board€of€directors.€This€ strength
ity€to€generate€new€business,€obtain€donations,€and€gain€new€customers.€ It€has€a€strong€co
holders€that€believe€in€its€corporate€values€and€mission.€This€ is€both€a€strength€and€a€we
at€believe€in€the€firm€work€harder€and€more€in€ the€interest€of€the€business,€but€a€busines
y€cannot€survive€without€ generating€income€and€positive€cash€flows.€
E. Experience€and€expertise€
HIOB€has€a€great€safety€record€and€reputation.€It€has€a€long,€excellent€history€and€is€the€
ince€1964,€HIOB€successfully€grew€its€student€base,€course€offerings,€locations,€and€ staff
erience€and€expertise€in€outdoor€activities€such€as€sailing,€rafting,€cycling,€ etc.€They€h
ams€to€be€effective€and€rewarding.€ € € € € € € € €
VI. €€ Marketing€Objective€
€ The€marketing€objective€is€to€achieve€a€consistent€positive€net€income€by€increasing€tota
nd€launching€the€PDP.€
VII.
€
Marketing€Strategies€€
The€strategy€to€achieve€our€objective€is€to€1)€market€more€efficiently€to€the€youth€market,
rkets,€and€3)€adapt€the€program€structure€for€greater€efficiency€and€reduce€costs.€ Specifi
velopment:€ • • Increase€the€revenue€contribution€from€PDP€from€0%€to€32%€ Increase€PDP€stu
tudents€
Program€Structure:€ • • € Increase€the€PDP€program€to€10%€of€total€Program€days€ Reduce€PDP
ak€season€and€increase€in€off€season.€
A. Target€market€
€ Three€target€market€segments€ i. Public€Courses:€Teenagers€(Estimated€Market€Size€12.5€Mi
graphic:€Ages€between€14‐19,€middle€to€upper€class€family,€boys,€single,€owns€ sporting€equ
ic:€Maine,€Florida,€Florida,€New€York,€New€Hampshire,€Maryland,€and€other€ large€cities€in€
avioral:€Active€lifestyle,€pursues€many€extracurricular€activities,€plays€sports€ d. Psycho
:€Enjoy€outdoors,€dedicated€to€self‐improvement,€likes€a€challenge€ ii. Special€Programs:€P
tation€(Estimated€Market€Size€0.05€Million)€ a. Demographic:€Ages€between€20‐49,€lower€to€m
,€unemployed€
b. Geographic:€Maine,€Florida,€Florida,€New€York,€New€Hampshire,€and€Maryland€ c. Behaviora
y€lifestyle,€seeking€help€ d. Psychological:€Not€strong€minded,€recovering,€anti‐social€ ii
rate€executives€(Estimated€Market€Size€0.1€Million)€ a. Demographic:€Ages€between€28‐49,€mi
e€bracket,€white,€married,€ owns€sporting€and€outdoor€equipment€ b. Geographic:€East€Coast€
havioral:€engages€in€exercise€and€outdoor€activities,€traveling,€busy€lifestyle,€involved€
py,€community,€or€volunteering€ d. Psychological:€Enjoy€outdoors,€dedicated€learning€and€se
ent,€likes€ challenges€ The€desired€contribution€to€students,€program€days,€and€revenue€fro
nt€is€ illustrated€below.€€
€ € € €
B. Marketing€mix€
€
Product€€
New€higher‐level€public€courses€will€be€created€for€students€who€have€taken€previous€course
rengthen€and€add€on€to€the€skills€taught€in€previous€classes.€Higher‐level€courses€would€ i
d€enhance€the€value€of€customers.€In€addition,€some€courses€would€be€ certification€courses
on€graduation€semi‐qualified€to€be€HIOB€instructors.€This€ would€improve€the€staff€turnover
reate€potential€instructors€who€are€pre‐ screened€and€already€have€a€relationship€with€HIOB
ffered€an€instructor€ position€for€the€following€summer€and€since€they€are€familiar€with€an
ral€HIOB€ courses,€training€these€instructors€would€be€less€costly.€ Special€Programs€will€
uring€the€off€season€because€most€of€their€students€such€as€ veterans€aren’t€restricted€by€
es€the€summer€season€to€generate€the€most€ revenue€from€teenagers€attending€public€courses.
urses€will€also€be€scheduled€ to€run€from€September€to€May€for€similar€reasons.€Since€corpo
nflexible€ schedules€and€do€training€all€year€round,€HIOB€will€be€accommodating€to€business
te€companies€to€book€far€in€advance.€This€gives€HIOB€ample€room€to€plan€and€manage€its€ res
iting€list€for€students€who€can’t€afford€public€courses€at€full€price€will€be€created.€Stud
ee€if€there€is€room€left€over€to€insure€demand€and€to€serve€low€income€ families.€A€wish€li
ss€well€off€students.€Students€on€the€wish€list€ would€be€sponsored€by€corporate€executives
rs.€€ A€trial€program€called€Family€Unity€Program€(FUP)€geared€towards€couples€and€families
ms€will€be€tested€from€July€1987€to€May€of€1988.€In€light€of€increasing€divorce€rates,€it€w
rket€development€opportunity.€It€is€also€a€very€ethical€and€noble€cause€to€ save€marriages.
t€be€included€in€the€marketing€budget.€ PDP€would€be€positioned€as€a€premium€product€for€co
rior€employees€who€ trust€one€another€and€works€well€together.€Public€courses€would€be€a€ma
owards€teenagers€that€want€an€alternative€to€summer€camp€or€school.€Special€programs€would€
ctive€mass€market€product€that€aids€in€the€rehabilitation€of€those€in€trouble.€
People€
There€will€be€some€full€time€instructors€that€are€kept€all€year€because€of€the€changes€in€p
e€the€seasonality€effects.€More€instructors€would€still€need€to€be€trained€and€hired€ durin
d,€higher‐level€courses€would€be€a€great€pool€to€recruit€instructors€ from.€Newly€hired€man
ficiency€of€operations€through€better€management€ and€allocation€of€resources.€€
Price€
The€price€of€public€courses€will€be€increased€by€15%€as€planned.€In€addition,€the€tuition€f
creased€by€15%€and€PDP€by€25%€from€trial€PDP.€Certain€courses€may€be€discounted€ during€off
ould€be€discounted€to€entice€repeat€purchases€and€students€to€ become€instructors.€Returnin
eive€a€10%€discount€in€pricing.€These€price€increases€ would€not€likely€decrease€demand€ver
ak€season.€Waiting€list€and€wish€list€ corporate€sponsorship€program€would€supplement€deman
Promotion€
HIOB€should€use€a€differentiated€promotion€strategy€to€effectively€target€its€three€target€
urses€(Primarily€“pull€strategy)€ o o o o o Introduce€10%€discount€to€returning€students€€
ouchers€to€graduates’€family€and€friends€€€ €Place€posters,€ads,€and€signs€at€sporting,€gun
ted€stores€ Distribute€flyers€at€RV,€boating,€camping,€gun,€and€car€shows€ Develop€relation
ing€stores€and€give€5%€discounts€with€purchase€ from€those€stores.€In€return,€those€stores€
dvertise€in€outdoor€magazines€read€by€parents€such€as€Outside€and€magazines€read€by€ teenag
rated€for€Kids€ Send€direct€mail€and€brochures€to€school€teachers,€counselors,€and€PTA.€Com
resentations€and€invitation€to€“open”€days.€ Create€“open”€days€for€potential€students€to€l
r€idea€of€ the€program.€On€site€recruiters€would€give€tours€of€the€site,€explain€the€progra
.€Past€students€would€provide€testimonials.€
o
o
o
•
Special€Programs€(primarily€push€strategy)€ o Increase€new€customers€by€developing€relation
oups€such€as€the€Veterans€ Hospital,€Alcoholics€Anonymous,€rehabilitation€centers,€governme
onal€ facilities,€etc.€€ Create€Reunion€Days€which€invite€past€participants€to€return€for€o
r€for€a€picnic€or€barbeque.€They€are€invited€to€bring€friends€and€family€and€this€would€ pr
e€new€customers€through€referral€as€previous€students€ are€likely€to€be€friends€with€people
o
•
PDP€(primarily€a€push€strategy)€ o Increase€new€customers€by€developing€relationships€with€
ch€as€Xerox,€ GE,€Shell,€Citigroup,€etc.€Use€existing€network€of€alumni€and€board€of€direct
w€business.€€ Advertise€in€magazines€read€by€corporate€executives€such€as€Fortune,€Economis
k.€€
o
Place€
Courses€will€be€distributed€at€existing€HIOB€sites€in€Maine,€Florida,€Florida,€New€York,€Ne
and.€€
Process€
For€public€courses,€after€groups€have€shown€interest€in€attending€HIOB,€recruiters€would€be
nroll€students.€Individuals€that€have€contacted€HIOB€will€receive€an€application,€course€ s
tation€to€attend€an€“open€day”,€in€addition€to€being€recorded€into€its€database€and€ contac
urses€every€year.€Once€the€applicant€has€returned€the€forms€with€ non‐refundable€fee€and€de
d€further€details€in€preparation€for€the€course€and€ require€the€student€to€pass€a€physical
d€students€would€be€put€on€a€priority€ waiting€list€which€gives€them€preference€over€the€re
sh€of€a€course,€students€ are€advised€fill€out€surveys€about€their€experience€and€make€sugg
.€They€will€also€ then€be€offered€the€opportunity€to€take€higher‐level€courses,€enroll€for€
up€for€the€HIOB€or€National€newsletter,€and€pick€up€vouchers€for€family€and€friends€discoun
ecruitment€would€be€done€mostly€through€groups€and€agencies.€After€the€course,€ participant
l€out€a€survey€and€to€sign€up€for€Reunion€Day.€€ For€PDP,€recruitment€would€mostly€be€done€
nt,€and€referrals.€ Individuals€who€contact€HIOB€would€be€sent€a€persuasive€pamphlet€on€the
program.€After€corporate€executives€have€completed€the€PDP€course,€they€will€be€asked€if€th
ger€to€complete€a€similar€program.€They€would€be€likely€to€sponsor€kids€after€they€have€ ex
is€would€boost€volume€and€enhance€the€value€of€corporate€customers.€ They€would€also€be€off
ds€discounts.€€
€ Physical€Presence€€
“Open”€days€are€days€potential€students€are€invited€to€go€on€a€tour€of€a€particular€HIOB€si
y€can€see€the€facilities,€equipment,€and€location.€These€days€also€
coincide€with€the€last€day€of€courses€so€they€can€meet€instructors€and€recent€graduates€and
nions.€€
VIII. Financial€Projections€and€Budgets€€
A. Delineation€of€expenses€
€ Depending€on€the€budget,€the€funds€for€various€marketing€tactics€will€be€allocated€accord
arketing€Initiative€ Public€Courses€ Posters,€ads,€signs€at€stores€ Flyers€at€shows€ Store€
e€ads€ Direct€Mail€ School€Presentations€ "Open"€days€ Program€Subtotal€ Special€Program€ D
ships€with€groups€ Reunion€Days€ Program€Subtotal€ PDP€ Develop€relationships€with€companie
Program€Subtotal€ Total€ € € € € € € € € Percent€of€Budget€ €€ 15%€ 10%€ 2%€ 8%€ 10%€ 5%€ 5
B. Estimates€of€Revenue€€
€ HIOB€is€expected€to€be€profitable€by€1987€assuming€the€15%€growth€in€total€revenue€and€10
988€data€are€projected.€
€
€
IX. Controls€and€Evaluation€ €
Management€would€track€the€efficiency€of€the€various€marketing€tactics€by€determining€how€s
out€HIOB€and€what€ultimately€influenced€their€decisions€to€enroll.€Enrollment€capacity€and€
e€evaluated€to€see€if€program€structure€changes€were€effective.€Finally,€ profitability€and
orts€would€be€evaluated.€€
X. Risks€and€Contingences€
€ Although€some€risks€such€as€changes€in€trends€and€growing€competition€were€delineated€in€
al€notable€risks€in€implementing€the€marketing€strategy€described.€Primarily,€changing€ the
ure€to€include€more€PDP€program€days€and€scheduling€can€cause€volatility€in€ revenues;€howe
e€still€comes€from€public€courses€which€have€not€been€ modified,€this€reduces€the€extent€of
ere€is€risk€that€the€marketing€budget€is€spread€too€thinly€and€not€focused€enough€to€genera
ing€is€a€recent€initiative€at€HIOB,€it€can€be€seen€as€an€exploratory€step€in€determining€ w
n€reaching€and€attracting€students.€Future€marketing€dollars€will€be€ allocated€contingent€
veness.€In€addition,€how€much€increased€demand€will€be€created€is€ hard€to€predict€and€thus
r€production.€ Risk€also€lies€inherently€in€developing€a€new€market.€Although€PDP€has€been€
ssful,€it€is€uncertain€how€much€demand€there€is,€price€sensitivity,€and€time€required€for€a
e€PDP€must€be€booked€far€in€advance,€risk€is€mitigated€as€management€has€more€time€to€ adju
s€not€meet€expectations€after€several€years,€it€can€be€slowly€phased€out.€€If€established€t
o€reduce€seasonality€and€boost€revenue.€Another€alternative€is€to€simply€ shutdown€all€non‐
s€during€off‐season€and€focus€on€public€courses.€