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Ocean Village is UK-based and is uses the differentiated experience of offering families the opportunity to define their own cruise itinerary (Kwortnik, 2006). There is freedom as to when passengers will eat, what they choose to participate in, and the concept focuses on breaking out of the mold of highly predictable and regimented cruise programs. The two remaining brands, P&O Cruises Australia and the Yachts of Seabourn, each have highly differentiated experiences they market as well. The P&O Cruises Australia concentrates on the natural wonders of that region of the world and bringing Australian hospitality to the cruise experience. The Yachts of Seabourn are the high-end, luxury line from Carnival and have catered to the top 1% of incomes worldwide as a viable cruise vacation option, and as a result are often perceived as a completely different company (Dev, 2006).
The organizational structure to support these brands is decentralized (Kwortnik, 2006) and concentrates on brand-level visibility into selling, profits and market share performance. The eleven brands' internal cultures vary in terms of their adoption and use of metrics to manage their businesses, with the European brands being more focused on quantifying performance (Vogel, 2009) yet all do use a series of benchmarks and scorecards to evaluate progress towards marketing and selling objectives. Each brand also has daily overview of revenue generated on each line of excursions and onboard ship programs (Prosser, Leisen, 2003) which for Carnival is approximately 34% of all profits in 2009 (Carnival, 2009).
The Customer Environment
The approaches to customer segmentation strategy vary significantly across the spectrum of eleven Carnival brands, from the high-end Yachts of Seaborne that use advertising to connote a nearly chartered cruising experience to the use of price discounting for the Carnival Fun Ships (Kwortnik, 2006). The company executives have often mentioned to the press and financial analysts that the core demographic of 50+ customers are the most loyal yet also the most demanding in terms of an eclectic series of excursions and entertainment options (Ward, 2008). The prime demographic of Carnival are baby boomers, and the income levels that many members of this demographic ensure enough disposable income to finance a seven to ten day cruise and spending on excursions and add-on programs (Hudson, 2010). The low-end Carnival Fun Ships anchor the youngest demographic segment that the company sells into with cruise packages and excursions. This segment of the company's customer base has the highest expectations for unique and varied experiences with shore excursions and programs at a low price (Prosser, Leisen, 2003). The younger groups of customers up to those in the 35- to 45-year-old age segment are the most prevalent in the Carnival customer base, but nearly as profitable as the 50+ baby boomer segment (Dev, 2006). Compounding Carnival's challenges in this market are the very youth-oriented mindset in the European market and the focus on experiences and adventure over luxury and predictability (Vogel, 2009). Despite the luxury that baby boomers expect, the direction of the broader market is focused more on eco-friendly cruising that low carbon footprint ships that leave virtually no trace on the environment. The psychographics of the younger, more affluent cruising population is re-ordering the priorities of each aspect of cruise marketing and program development (Dev, 2006). The early adopter aspects of cruise programs and excursions need to also be effectively marketed to the baby boomer, using the appeal of youth and vitality. Often the most profitable segments of the cruise industry, those above 50, have significantly less energy or willingness to try new excursions. The challenge for Carnival is to position the more profitable excursions and entire cruise programs to appeal to baby boomers while the company uses these strategies to attract me customers. In this sense, the marketing for Carnival is being pulled in two separate directions at once. One the one hand the need for creating a series of programs that will appeal to the younger, more environmentally focused and aware customers while also marketing the concept of vitality to the older, more affluent baby boomer segment is critical to the long-term success of the company.
The External Environment
The rising price of oil, subprime mortgage meltdown and global economic recession have made the last three years of the cruise industry very challenging from a profitability standpoint (Ward, 2008). Making these conditions even more challenging has been the fact that demographics continue to shift, unabated, between the most popular cruise segment of 35- to 45-year-olds and the most profitable, those 50 and above. If the economic challenges were not enough, Carnival and its competitors in the cruise industry continue to face extensive new tax regulations globally in each of the countries they choose to base operations in, with taxes being particularly high in Europe (Vogel, 2009). The environmental regulations that the company is facing globally will eventually force them to report their carbon footprint and emissions over time (Rivas, 2009). Combining the effects of the global economic environment and increased costs of compliance to tax regulations and environmental standards create one of the most challenging environments for Carnival in decades (Ward, 2008).
In contrast to the constraints that Carnival and all members of the cruise industry face, they also have exceptional opportunities based on the rapidly changing technological landscape that they can capitalize on with greater services (Polikarpov, 2009). Despite the perception that curse passengers want to disconnect digitally from their lives, there are very large, highly profitable market segments that concentrate on staying always connected, whether that be through Wi-Fi on their phones to the use of 3G wireless tablets like the Apple iPad or laptops (Dev, 2006). Traditional cruise customers however see digital access onboard as an intrusion to their lives and a distraction, while the perception is markedly different for younger, more connected and social network-active cruise passengers (Polikarpov, 2009). Carnival will need to tread a fine line in this area as well, as they seek to capture a greater share of market in the 35 -- 45 segments while again not distancing or alienating the 50+ segments with new technology. Segmenting the use of technology and offering the opportunity to stay connected while onboard a ship cannot be done by just brand alone, it must be done by role and psychographics of each audience onboard a given ship, taking into account the expectations the brands connote (Dev, 2006). The external environment is forcing greater levels of segmentation and more precise definitions of key markets and audiences than has ever been the case in the past. (Kwortnik, 2006). Increasingly all cruise operators are having to take a much more focused, granular approach to defining they market segments, and within segments, by audience, often relying on psychographics and attitudinal data to assist in making the delineations (Kwortnik, 2006).
The combined effect of all these factors and the uncertainty that surround them also lead many cruise companies and providers to embrace analytics and the use of information technologies more than they ever have in the past (Boyle, Lathrop, 2009). One of the most common areas these companies concentrate on is developed a common measure of perceived service performance using the SERVQUAL standards and methodologies that are pervasively used throughout hospitality industries (Pan, Kuo, 2010). Copying with uncertainty by concentrating on analytics is the most common approach cruise companies take in anticipating and competing in their global markets. More discussion of SERVQUAL and its role in the evaluation and control aspects of this marketing plan, including its use in marketing audits will be provide at the end of this plan.
The SWOT is a strategic planning method that is used to evaluate the strengths, weaknesses, opportunities, and threats (SWOT) of Carnival Cruise Company as a profitable business. The following defines what a SWOT analysis is.
Strengths: These are the attributes of the person or company that is helpful to achieving the objective.
Weaknesses: These are the attributes of the person or company that is harmful to achieving the objective.
Opportunities: This is the external condition or conditions that are helpful to achieving the objective.
Threats: This is the external conditions which could do damage to the objective.
The ability to create experiential value through segmented marketing (Dev, 2006) and also define unique value propositions based on price for each of the cruise brands (Kwortnik, 2006). Carnival is a leading marketer in this industry and has as a result won many awards for their marketing programs.
Exceptional revenue stability despite an exceptionally severe global economic recession has been achieved by stabilizing key areas of the company's operations. For a five-year analysis of the company's Net Income statements see Table 1 Carnival Corp. (NYS: CCL) Income Statement Analysis in the appendix. There is also a five-year ratio analysis of the company in the appendix titled Table 2: Carnival Corp. (NYS: CCL) Ratio Analysis. The company has been profitable for the last five years despite a deep global economic recession.
The ability to translate the need customers have for unique experiences…[continue]
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