hurriance island outward bound school case analysis

1. Problem/Purpose of the Report: Mr. Chin, Marketing director of Hurricane Island Outward Bound School (HIOB), developed four marketing plans in 1987 to achieve following goals: Overall Goals: Continued growth and financial stability Marketing Objectives: delivering 2,700 students, 47,800 Student Program Days (SPDs) and $3. 4 million in revenues. Strategic Objectives: Maintain school leadership within the Outward Bound System and Build-off season business The main problem is the implementation of marketing plans with limited budget.

The purpose of this analysis: 1) to evaluate the strength and weaknesses of each marketing option 2). Recommend what option should be adopted, rejected, or modified and adopted. 2. Recommendations: -Invest in Professional Development Programs (PDPs), -Expand direct sales marketing and telemarketing. -Provide variety and flexibility in PDPs and attract companies for PDPs in off-business. -Enlarge Florida base to provide winter courses. -Shorten the length or decrease the number of offerings of less profitable courses. -Target consumers who had inquired or applied but not enrolled. Offer year round positions to the staff; assign them marketing or administrative work during off-peak season. 3. Analysis Market/Customer Analysis: Hurricane is largest in Student Program Days (SPDs) and Colorado has most students. Both schools contribute to 70% of the total business. Market segments: 1. Special programs: The demographics of these programs are young to middle aged male or female who lacks in confidence, emotionally weak and mentally undeveloped. These programs accounted for 23% Hurricane’s student, 32% student program days, 33% tuition revenues in 1985.

DMU are the officers at rehabilitation centers, municipal and government agencies. 2. Public courses: These programs primary target is young students of 14-19 years from Northeastern United States which includes 6 New England states and New York. DMUs are friends, family, students themselves and website, brochure etc. Public courses are further categorized as Maine Sea, Florida Sea, Winter Land and Summer Land. 3. Professional Development Programs: The demographics of these programs are professional executives ged from 25-55 years and are interested in working in teams, improving leadership and communication skills. DMU are the HR managers of different companies. In addition to above mentioned groups, there are six more buying groups:1) high school and college students, 2) Juniors, 3) municipal and agency contacts, 4) young professionals, 5) corporations, 6) Hurricane course alumni. Industry/Competition Analysis: Outward Bound is a non-profit organization responsible for providing excellence in wilderness teachings, raising funds, conducting publicity and advertising campaigns.

Hurricane, the sea school, was founded in 1964 with two missions 1) to provide safe, challenging and “Experimental” educational experiences in wilderness setting 2) to improve self esteem, confidence, teamwork and respect for the environment. Industry serves diverse markets. The competition for juniors is summer camps, for College students could be vacations, summer jobs and other wilderness experiences and for Industry is corporate trainings. All five schools face friendly rivalry among each other. Colorado is one of the biggest competitors for Hurricane as it enrolled the most students.

Based on competition and other environment factors Hurricane’s SPD and student utilization for 1986 is as below: Company – SWOT Analysis StrengthsWeaknesses Largest in SPDs and one of the leading schoolWeak financial position. Few strong competitors Colorado is one of the biggest competitor Highly qualified and certified staff Difficulty in offering yearly positions to staff. Old, reputed and expertise in outdoor activitiesFlorida base was too small Challenging but very safe environmentLow enrollment in off-peak season Strong alumni network

OpportunitiesThreats Strong geographic presence can help to capture a larger market. May not get qualified and trained staff members for contract positions. Generate corporate funding and donations by strong corporate tie-upsCompetition from summer camps, jobs, corporate trainings and other wilderness experiences PDP can generate high revenues and is a good opportunity to expand furtherColorado has highest enrollments, can take-up Hurricane market. Competition will likely increase in future Target consumer groups with which it had the most success in the past.

PDPs may drift away organization from its original mission. Conclusion: HIOB had small operating deficits of $162k after many years of large operating deficits till early 1980s. In 1986, school predicted that it would break even for the first time and accumulate revenues of over $5 million. However, HIOB is a non-profit school but it cannot take losses. It doesn’t want to make profits but want to atleast achieve break-even costs to increase the facilities, course offerings and excellence in learning. Evaluation of Marketing Strategies (4Ps): Product:

StrengthsWeaknesses Public courses are flexible, have variety of course offerings and locations. Low enrollments in off-peak season. PDPs are profitable. PDPs are not flexible and difficulty in staffing. Special Programs and PDPs have enrollments through out the year. Few programs are underutilized. Scholarship program to support Maine sea Conclusion: Attract companies for PDPs during off-season and make PDPs more flexible and provide more offerings. PDPs could be offered with customization to meet the different industries’ requirements.

For example, if one company wants leadership training and other company wants personality development training and third company wants communication skills training, HIOB may offer different PDPs and mix and match programs to fulfill the needs of organizations. Corporations are the biggest asset to the school as PDPs are highly profitable. To attract more companies, school could give attractive offers like enroll for one program and get 25% discount on another, or organize PDPs for 2-3 companies together which will not only provide training to executives but will also provide a strong platform for networking.

Moreover, special program and PDPs have enrollments year around, so school can convince them to enroll in courses anytime other than summer. This will help school to focus on public courses in summer. Place: Seminars and presentation at various places created awareness about the school and its programs. Prospective students at different locations were covered by direct marketing and direct mailing of school catalogs. School could also advertise at summer camps, corporate training camps, job fairs, sports and fun-activity clubs for Public courses and PDPs.

For special courses, advertising at Vietnam veterans’ camps, meditation centers and hospitals could be beneficial. I would recommend expanding Florida base as it has a great potential to capture students and PDPs interest because of its amicable weather conditions for outdoor activities. Price: School charges non-refundable application and enrollment fee of $25 and $100 respectively. Tuition fee is due in 60 days before the beginning of the course. If course is oversubscribed, place students on waiting list. If student not admitted two weeks before the beginning of the course, he can get tuition refund or money credited to a future course. 986 Differential Pricing scheme: HIOB raised prices on introductory and adult courses, kept competitive prices on mature courses like Maine sea and lowered prices on off-peak courses. A tuition difference hardly varies by more than 15% between identical courses. Public course tuition ranges from $400 to $3800 per student and 20% receives financial aid. It is predicted that school would break even for the first time by offering courses to 3700 students in 70000 program days in 50 courses at any of the 13 sites. School prices had increased to 15% per year for years 1985 and 1986.

Promotion: HIOB had four marketing strategies of 1986 which are as follows: 1) Segmenting markets 2) Developing new prices 3) Changing the course mix 4) Assigning financial aid dollars to low-demand areas. StrengthsWeaknesses Target markets which gave successful results in the past. Upgrading of marketing function could drop enrollment as did in 1979, 1980. Offer scholarship to support Maine Sea and to Build off-season demand. Members were worried that marketing would “tell them what to do” or distort the concepts. Direct sales and telemarketing campaign, advertising and direct mailing hoped to increase enrollments.

Difficult to implement the course mix. Course inquires were routed through National to schools. 1987 Marketing Options: Total marketing expense allocation for 1987 was $308,000, out of which $54,000 was for marketing programs. 1. Expand “Alumni in Marketing” network: HIBO has alumni database of 25000 people, who had taken course in last 20 years. Alumni could help in identifying the interested groups and individuals and could also take part in presentations by doing publicity, helping with logistics and providing testimonials. School hired someone to manage AIM at $15,000 per year (assumption).

StrengthsWeaknesses Solid alumni network of 25000 people. If too few alumni were interested, the effort in reaching them might be wasted. Estimated that over half of the public inquires came from Alumni word of mouth. If too many alumni were interested, managing the network would be complicated. Could renew enthusiasm and generate donations and funds. If Volunteers were over-utilized, they might reduce donation on the grounds of their time. If AIM is successful, could be a great asset to marketing. If volunteers were under-utilized, they might lose enthusiasm.

The plan is in line with the school’s missionLess controllable and measurable Conclusion: The plan would cost $15,000 and return on investment is not clearly measurable. I would not recommend this option as the plan is less controllable and benefits generated would mostly be intangible. 2. Build Corporate Professional Development Program (PDP): StrengthsWeaknesses Focused and Profitable Difficult to get staff for PDPs. Building off-season business. Aimed at wrong target market, drifting from its original mission Effective program and results of the program were visible in the participants.

PDPs were not flexible. Conclusion: Hurricane can charge up to 200/SPD for corporate clients as compared to $75/SPD for public courses. 1986 projected revenues and SPDs for PDPs are 6. 3% (191800/3061415) and 3. 0% (1388/46869) respectively. The program would cost $31,000 which includes mailing cost of $1000 and PDP recruiter cost of $30,000. 225 more SPDs should be required to serve to cover $31,000. Return on investment from this plan was projected to be $200,000. I would highly recommend investing in this option as it has high returns to investment ratio of 6. 5:1 (200,000/31,000). 3.

Expand direct sales recruitment StrengthsWeaknesses Direct marketing is effective in pursuing people. Target population with desirable demographic traits, such as minority groups Used to fill the courses. Managers were not used to asking for contracts on the spot. Conclusion: The overall cost of adding two sub-recruiters would be $9000. Return on investment would be 17% of 1986 applications (600/3450) and 20% of 1986 enrollments (510/3540). I would recommend investing in this plan as low investment cost and good returns. 8 more students should be enrolled to cover investment of $9000. . Build telemarketing capabilities: The idea behind this plan was to call 500-1000 prospective students after they had applied and before they had enrolled. StrengthsWeaknesses Used to fill the coursesDifficulty in finding good telemarketers, calculating cost. Target population with desirable demographic traits, such as minority groups An Extended test would cost $6000. However, the returns were difficult to determine but still I would go with this option as investment in low and no complications and would give an idea for future investments.

Different groups have different views on the above four marketing tactics. Business orientedCourse oriented Concerned with revenues that public courses generateConcerned with number of students and SPDs and focused on filling the course Goals: 1) to reduce the school’s debt burden 2) to purchase certain properties critical to its operationsGoal is the growth instead of debt reduction. Alternative to the above four marketing tactics could be: 1) increase the price again in 1987. 2) alter the course mix or range of sites.

It is unclear how general prices would affect demand. Eliminating underutilized or unprofitable courses would be complex as many managers think that worth of a course should not be a judging on profitability. I recommend shortening or reducing the number of times such courses and utilizes resources from these programs to other profitable courses till school achieves sustainable growth and financial stability. Once school makes some surplus revenue then it can make efforts to maximize underutilized programs.

"Looking for a Similar Assignment? Order now and Get a Discount!