Hurricane Island Marketing Analysis presented by Harvard Business Review

Essay by katyvereenUniversity, Master'sB-, November 2007

download word file, 2 pages 5.0

SituationPhillip Chin (Marketing Director) for HI (Hurricane Island) is in the midst of formulating the 1987 marketing budget. Of the many options for fulfilling next year’s corporate goals, supporting the PDP (Professional Development Program) represents a clear path toward meeting the school’s leadership strategic objective.

AnalysisPDP participants consist of highly homogenous corporate groups that seek an alternative to “in-house” training. HI’s superior instructors and facilities provide a challenging environment whereby corporate participants demonstrate greater managerial abilities, such as confidence and communications, than they had prior the training.

Although corporate programs are highly competitive Chin believes it can garner up to $200 per SPD (Student Program Day) even though 1986’s average rate is about $137. PDP is in a high-growth phase, and in 1986 the program experienced a 45% increase in student enrollment (158 vs. 230).

The cost of a PDP SPD contains three variables—direct, overhead, and marketing. At present, marketing the PDP is handled by Chin and Robert Weiler (VP), but they are too busy to continue this effort, and have mandated a full-time recruiter.

As a result of management’s desire to capture $200,000 in gross revenue, the average total cost per SPD ranges from $112 to $144.

Some of HI’s managers voice apprehension about the PDP. They remark that corporate programs could be interfering with the school’s mission. HI could lose its donor base if it does not strike a balance with PDP.

RecommendationsIn its 1987 budget, HI should consider increasing the average PDP SPD from $137 to $144. This figure satisfies several criteria. First, the figure complies with the expectations for $200,000 annual gross revenues via a full-time marketing recruiter as cited by Chin and Weiler. Second, it is under Chin’s $200 cap, and yields nearly $65,000 in profit. Third, it limits the amount of PDP...