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MBA project course creates new marketing strategy for Africa’s Train of Hope

Train of Hope ThumbnailThere was never any doubt that the Transnet-Phelophepa train was a worthy cause.

For 14 years, it has traveled across South Africa, delivering an array of health care services ranging from primary care to meeting dental, eye, and pharmaceutical needs for people at 37 stops across the rural landscape.

But when organizers sought sponsorship to help pay for the charity’s services, they ran into roadblocks. So they turned to MBA students at the Tepper School of Business for fresh ideas to keep the mission on track.

The connection happened when 2006 Tepper graduate Alistair Rock, who serves on the board of what was then known as The American Friends of the Phelophepa, approached his alma mater about the possibility of using the charity for a project course. John Mather, Executive Director, Masters Programs and Teaching Professor of Marketing, took him up on the idea.

Students were tasked with finding ways to leverage the charity’s existing donors and identifying new fund-raising opportunities. That involved both primary and secondary research into the best practices of the nonprofit industry.

“The overall goal was to deliver a comprehensive three-year strategic marketing plan,” says Eric Sisak, an MBA 2009 candidate who was part of the seven-student team, which also included Victoria Guscoff, Isaac Harris, Nikki Levy, Aaron Nelson, Brian Patterson, and Catherine Stange. “The [later] goal was to take it from just being a recommendation to getting them about one-third through the execution of it.”

In researching the project, the students learned that acquiring new donors was more expensive and less effective than soliciting from existing donors. That led to a recommendation that the charity switch from an acquisition to a retention model, flip-flopping the organization’s existing format, which channeled 80 percent of its resources on getting new donors, and 20 percent on existing sources.

Another major recommendation was renaming the charity to Train of Hope, which had been a tag line the organization had used in the past.

“One of the things that came up over and over was the name was a problem,” says Sisak. “People had a hard time saying it, and there wasn’t a lot of recall and transfer. Charity people were reluctant to recommend it because they stumbled over the name.”

Students simplified the logo, designed a new Web site — www.trainofhope.org — and rewrote the annual report.

Other recommendations included looking for new corporate sponsorships and donations from foundations, as well as strengthening existing corporate relationships with Colgate and Swiss pharmaceutical company Roche.

The proposals were well-received, and Sisak says the team worked to bring the charity about one-third of the way through executing the group’s plan. Charity contact Cathe Kruger was so pleased with the work that she invited the student group to attend Train of Hope’s annual gala, where they met Archbishop Desmond Tutu, one of the train’s patrons. Future plans may include a summer internship for a Tepper School student at the charity.

Sisak says the students welcomed the opportunity to apply classroom theories to an important cause. They forecast the future volume of each of the train’s services using 14 years’ worth of historical data and time series forecasting, which helped shape their recommendations on which services the organization should emphasize.

The strategic plan was written with the help of entrepreneurship classes by taught by Art Boni, John R. Thorne Chair of Entrepreneurship; Associate Teaching Professor of Entrepreneurship; and Director, Donald H. Jones Center for Entrepreneurship.

“He gives you a disciplined approach to tackling an ambiguous problem, which is what we were facing,” Sisak says.

The group also based its tiered pricing options on Web site user self-selection: Users tell the group how much they’re willing to pay, and the organization suggests a variety of options from that price range, a concept taught by Baohong Sun, Associate Professor of Marketing.

From the project’s inception, alumnus Rock’s goal was to create a win-win for both the students and the charity, a goal Sisak says they accomplished.

“The charity received a thorough strategic marketing plan, and we, as students, were able to do MBA-type consulting work. It was an awesome experience for all of us,” he said.

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Mark D. Burd

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Tepper School of Business
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mdburd@andrew.cmu.edu
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