Cunard cruise industry analysis
...the CLIA recorded a whopping 7.2 million passenger cruise traffic in the first three quarters of this year alone (including more than 6 million North Americans), placing the industry on pace for another record-setting year. For North American Cruise Passenger traffic growth over the years, please refer to Exhibit 3. Furthermore, in order to handle the capacity for the increased demand, the industry plans to see 13 new cruise ships this year, as well as 34 new cruise ships in 2004 which will result in an increase in the level of competition. The industry is dominated by four major companies, The Carnival Corporation, Norwegian Cruise Lines, Royal Caribbean International, and Princess Cruises, that dominate over 85% of the market. The remainder of the industry is shared amongst smaller operators such as Cunard Cruise Lines and the luxury operators such as Crystal Cruises, Silverseas Cruises and Radisson Seven Seas Cruises. Needless to say, competition in this industry is fierce. With 4 major cruise lines dominating the market, and over 30 different brand names for consumers to choose from, staying on top in this industry is extremely difficult. Consumers rely heavily on their travel agents to assist them in deciding which cruise line would be best suited for their needs; the 'uncruised' passenger has difficulty in telling one brand of cruise ships from another. For this reason, marketing is a very important key to success in this industry; differentiation is key. Cruise lines have to recognize that they need to create brand awareness and get their names into consumers' minds before the consumers call their travel agents to book a cruise. Segmentation, Targeting, Positioning: Segmentation: As evidenced in the prices that the Cunard Cruise Line considers include demographics such as the average income level of its customers. Geographic factors include the urbanity of the region and its proximity to transportation, and some psychographics and behavioral factors they consider include lifestyle and attitudes towards vacations. The Cunard Cruise Line segments the market appealing to the middle to upper-class population as cruises tend to be expensive, in addition to the fact that there are travel costs to be factored in as well. Cunard is able to attract people from all over the world by setting up travel accommodations for them. By being able to book their trip online through the Cunard website or other travel specific websites, or by being able to go into a travel agency and inquire about the cruises, it has given people all over the world an opportunity to experience something enjoyable. Targeting: The Cunard Cruise Line uses these segmentation factors to form their target market. The potential market is every person in the world that is interested in spending time out and would consider a cruise as a vacationing experience. The available market are the people with an interest in taking a voyage on a cruise, but also have a level of income which allows them to afford the premium prices Cunard charges. The cruise differentiates itself from other cruise lines as being a very upbeat vacation experience. There is always something to do, and someone taking part in it. Cunard appeals to upbeat people who enjoy taking cruises. It differentiates itself from the competitors by having a lot of activities to do on and off board. Positioning: The Cunard Cruise Line positions itself using a number of distinct dimensions that differentiates them from their competitors. These elements are their core competitive strategies and their keys to success. They include an extensive, creative, and upbeat itinerary with superior customer service and highly dedicated and competent staff. Their facilities, food, and rooms are among the best in the industry, offering great value to the customer. Cunard further strives to position themselves as the leader by offering the very best and most creative activities, a unique and adventurous experience, and high quality service to go along with the Cunard name. The ships are truly one of a kind. The company has its own culture consisting of rich heritage, traditions, quality standards, and values that create a unique environment for all involved. Cunard prides itself in the service it provides and in their employees, and thus an employee commits himself to certain characteristics when going to work everyday, in order to make the experience of a vacation possible. Performance in this context stresses the entertainment, and excellence the company wants to be synonymous for Cunard. Marketing Strategy Cunard Cruise Line is one of oldest competitor in the industry. It has created a unique strategy that is directly tied to The Queens of England. Cunard's marketing strategy is also internal. They struggle hard in order for their employees to enjoy their work. Cunard's employees are guided with the notion that they should feel responsible for the happiness of others. Cunard offers jobs that give their employees a different way of life. Cunard has created a new philosophy of life; it built a second family for the employees, with co-workers and with the customers themselves, building extremely strong ties all together. Cunard means seeing extremes come together, professionalism and exoticism, self-discovery and intercultural exchange. As a Cunard Cruise Line employee, one follows the Cunard attitude, which means making life more attractive, imagining another way of spending time, enjoying leisure and work, beyond cultural and social barriers. It means giving preference to human values by building links and ways to genuinely meet people. The Cunard Cruise Line employees are the core of the Cunard Cruise Line concept, because they share the same frame of mind, the philosophy of generosity, the smile, the willingness, and the joy to live....the Cunard attitude. By recruiting great employees they are able to offer their exceptional service and build new loyal customers. Pricing To follow up on their strategy Cunard Cruise Line is offering complimentary airfare and waving all shipboard gratuities on many of its itineraries. This is absolutely unheard of in the cruise line industry and is meant to boost customer favorability and interest. Ship fares for the 2005 World cruise include round trip air transportation from 102 North American cities, including airport-pier ground transfers. Business class upgrades are being offered to customers depending upon which category they are cruising in. All guests sailing for 88 days or longer will fly in First Class and will receive complimentary gratuities. Cunard is also offering discounts for anyone who has cruised previously with Cunard or any other major cruise line. These types of deals are not very common in this industry. Experience with other cruise lines show that guests always arrange for their own airfare. Gratuities can be charged in excess of $10.00 per-person-per-day to cover the cabin stewards’ fees, as well as the head waiters’ tips. Also, cruise lines never give you discounts or points for being a past guest on another cruise line, however, they may give you deals if you’ve cruised with their cruise line before. Their prices for a 10 day cruise, starting at just $1,379 per person, are very comparable and, in some cases, below what it would cost to take a 10 day Caribbean cruise on Carnival or Royal Caribbean.450 dollars. Cunard's pricing strategy is designed to maint...