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Carnival Cruise Lines

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on 11 November 2014

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Transcript of Carnival Cruise Lines

Molly Kane, Rachel Wahl, Meredith Zingale, Dan Enriquez & Ian Hackett

Where are we now?
Summary
Industry
Cruise Industry or Vacation Industry?
Where are we going?
How did Carnival’s management build the line into the dominant brand in the industry?
History
Increase First time Customers
How are we going to get there?
Gain repeat customers
What is CRM?
Takeaways
Should Carnival do “CRM?” What would CRM look like at Carnival?
What does CRM mean to Carnival’s management?
SWOT Analysis
Do Carnival’s competitors use CRM? Explain
How did Carnival attempt to build customer loyalty?
Ted Arison, 1972
Market share growth
Exhibit 3
How did Carnival appeal to the 84% of Americans who had never cruised before?
Hurricanes and bad weather
Rising cost of fuel
Who thinks this a good approach?
Less disposable income available
Strengths
Weaknesses
Opportunities
Threats
Offer more destinations
1)Different color "Sail and Sign" card
-First timers get regular card
-Repeat get gold card
2)Avoided excessive expenditure
-no extra discounts or gifts
-employees recognize card and inquire about past cruises
> If customer had negative experience, crew can offer consolation gifts to win back loyalty
3)Carnival Vacation Club points
-purchased points used over 5 years
>locks in future purchase
Increase CRM
Competition
Marketing Myopia principle:
too narrow definition of the market prevents from foreseeing threats from substitution
Vacation Industry Competition:
1972- Ted Arison formed Carnival Cruise
Mardi Gras made the companies first voyage
1975- Carnival purchases Empress of Britain
1982- Tropicale, new cruise ship
sparks multi-billion-dollar shipbuilding
1984 - Carnival becomes first cruise line to advertise on network television with Kathie Lee Gifford
1987- “Most Popular Cruise Line in the World”
1987- IPO, 20% of common stock to kick start acquisition
1989 - Purchased Holland America Line
1990- Fantasy enters the fleet
1992- Carnival acquires Seabourn Cruise Line

1)Low-fare cruises in the "contemporary" category
-Appealed to lower-income vacationers than competitors
2)Limited extra expenditure on repeat customers
-standardized experience becomes industry comparison
3)Introduction of short cruises
-allowed for consumers to "test" cruise experience
4)Broad marketing techniques and focus on travel agents
Who thinks this was a good strategy?
Customer Relationship Management:
-Understand customer desires
>"Fun Ships", hotels with activities
>Port stops to see destinations along journey
-Build brand equity
>Exceed customer expectations
>Become industry standard
-Standardize product
>Cut excess time downtime (embark/disembark)
-Allow for "augmentation" of experience
>Dining/Drinks
>Spa/Massages
>Casinos
-Specialized marketing
-Consolation for customers who had poor experience
Should Carnival adopt a CRM strategy?

Yes, to gain brand loyalty and market share.
- 33% are repeat cruisers
- Maximize customer database and info
- Differentiate through CRM
What would the strategy look like at Carnival?
Tie into overall corporate strategy
- Robust online loyalty program
- Gather relevant info: i.e. travel patterns, eating habits, activities
- Tailor specific promotions
“CRM has been a four-letter word around here. But it’s not CRM itself. It’s this concept of big bang. Look at the low success rate of many companies who tried this big-bang CRM approach.” - Brenda Yester, VP Rev. Management
CRM & Management
- Viewed generally as cost ineffective
- Growth through first time cruisers
Only 16% of market has cruised
- Resistance in top management
Increased fuel prices
Porters Force Analysis
lots of competition
lots of competition
Exceptional vacation experiences to carnival customers
"Fun Ship" for a variety of occasions (2)
46 years old with varying relationship status
Information systems
1994- The parent company renamed itself Carnival Corporation
1996 - Carnival Destiny is launched as the first passenger vessel to exceed 100,000 tons
1997- Costa Cruises
1998 – Elation, the first new cruise ship deployed on the West Coast
1998- Cunard Line
1998- Carnival Paradise becomes only non smoking cruise ship
2002- Carnival Conquest becomes the largest "Fun Ship"
2005 – Carnival Liberty (conquest), the line's first-ever Mediterranean cruises.
2006- Ramesh Krishnamurthy jumped off his balcony on Carnival Legend
2007- David Ritcheson jumps off the Carnival Ecstasy and dies
2009- Carnival Dream becomes the largest "Fun Ship" ever built
History Continued
Full transcript