The Australian cruise sector has witnessed significant growth in the last couple of years, relative to the wider tourism sector, mainly measured by total visitor nights. Statistics from the Australian department of tourism indicates that the tourism industry figures have been on the decline because of an unfavorable exchange difference. This paper explores the market for cruise sector players, and makes a critical analysis of various issues affecting the cruise sector, as well as the market segmentation and positioning of the various players in this industry.
The cruise liner market in Australia for the year 2013 will be composed mainly of the key major players that have been consistently serving the Australian cruise liner market for the last five years. These are mainly the largest global cruise liners who, as we are informed by the report are also the largest and most frequent players in the Australian industry. They include midrange style ships which include the Holland American liners and P&O Cruise Australia, Mega ships such as those operated by Princess Cruises, celebrity cruises, expedition style ships such as Coral Sea princess, Orion expeditions (Deloitte economic access, 2012).
These are poised to be the pace setters and industry drivers in this industry and are therefore expected to drive the sectoral revenues. This is because statistically, they are the largest players in the industry in terms of tourist volumes and nights.
Write a 250 word overview of the market in which these brands operate and produce a piechart showing relative market share
As previously stated, the market for cruise liners in Australia is booming, if statistics from the tourism board are anything to go by. Forward bookings reported for the year 2012 are a strong indicator that there is significant evidence of midterm growth of the sector. Industry statistics indicate that the expected growth in this segment should be within the region of 32%. Indications for the long term projections indicate that the market for cruise ships for the longer term is approximately likely to grow at least 7% more than the already achieved figures, mainly due to favorable economic conditions and industry dynamics.
The market is also influenced by the infrastructure in place to facilitate industry growth. According to Carnival Australia, port infrastructure, which is an ongoing issue for the Australian cruise sector is poised to be a game changer in the sector, with high revenues expected to stream in at a higher rate, with the expanded infrastructure. In fact, infrastructure and cost challenges are some of the expected market impediments in the market (Carnival corporation website)
The market for the cruise sector has also seen significant growth with cruise operators investing heavily on repositioning of cruising as a fun filled and safe as well as an affordable holiday choice for not only Australians but also other regional tourists at large. Some of the other inducements and marketing strategies that have been employed in the market include introduction of short cruises and other product innovations.
There is however a significant market potential, and this is demonstrated by the countries low market penetration. There is clearly a potential for penetration rates to improve. As the sizes and number of ships continue to grow, the ports are faced with capacity issues, and if these can be addressed, then it’s evident that there is still capacity to maximize on these revenues from cruising, over and above the current amounts (Cruise planners.com).
The global market for cruise industry has also undergone significant growth for the last couple of years. Estimates available at the European cruise council indicate that there is a growth of approximately 5%. The North American market has also shown significant growth, about 7% over the same five year period. Increasing demand for cruise holidays has been noted to be a key factor leading to the growth of the cruise capacity. Some of the strongest players in this sector include carnival, Costa cruises, AIDA, princess, Holland America, Royal Caribbean as well as celebrity liners. Their respective market shares are reflected in the pie chart below.
Using a chart or table, identify market segments reached by these brands usingdemographics, psychographics, usage and benefits sought. Annotate your chart.
Using a minimum of six brands operating in Australia, provide two positioning matrices (perceptual maps) with 150 word explanations for each. One map should use specific product features and benefits as the axes to highlight differential competitive benefits. The second should use market segmentation characteristics to show comparative market strength. Focus on one particular brand in your commentary as a point of comparison.
A positioning matrix is a tool for understanding the position of a service or product normally within the context of the overall market for similar services or products (Levi, 2007). In simple terms, this is a matrix that shows the position of the target product with regard to other services or products in the market.
This positioning matrix shows the quality of the cruise liner, as compared to the process of the same. The relationship shows that the better the quality of the cruise, the more expensive it is. Therefore, the most excusive crystal cruises which is a luxury cruise and is mainly an exclusive offer attracts the highest level of quality, and consequently the price.
Carnival which is considered a more elaborate, and comprehensive as well as most populous cruise, and therefore its quality and price are also expected to reflect on the matrix as shown. The others lie at intermediary levels and may not warrant a lot of attention.
This positioning matrix graphs the various market participants with regard to the market segmentation elements. The specialty cruises which include (Cruise west and Orient line) is seen to be segmented to indicate that it takes a longer period (3-20days) but has the least number of crew, a clear indication of the exclusivity of the cruise, as well as the class of the members (Trout & Rivkin,1996) .
The first class cruise, is depicted as having the highest number of crew, ranging from 3000-5000, indicating a segment of the market that is price conscious and would rather spend less money for lesser luxury than the vice versa.
Competitive advantages as compared to other service providers in the market as per the models
On the first matrix which pits the various players with regard to quality vs. the prices, it’s important to note that for the particular clienteles, there are differences in preference with regard to prices as well as quality of services offered in any of the cruise lines. An important consideration is whether the benefit being discussed is to the cruise liners or the customer. In case we dwell on the clientele, it’s important to choose the carnival brand, for the simple reason that while it may not offer the necessary luxury, it can carry many passengers and therefore a lower price. Additionally, cruising is a fun activity when people are more, than when they are few and therefore this strength is important in determining the cruise liner.
In terms of market segmentation as shown in matrix ii, it’s important to note that customer preferences with regard to the number of days that the cruise liners take is a key consideration for planning purposes. The first class market segment will be more profitable, and also cheap to the cruisers. This is corroborated by the market share segment shown in the queries above, where carnivore is leading in terms of market share even in the market today (Levi,2007).
Potential customer experience at carnivore cruisers
Tom and Helen in their cruise ship
When Helen and Tom got married early last year, they could not go for holiday/honeymoon since Helen was expecting their first born child. The couple had mulled over the idea of going on holiday, but then an emergency scan on Helen showed that their unborn baby was not lying well in the mother’s womb, and therefore the risk they would assume by going on holiday when such an emergency issue had been discovered was too much.
The baby came five months after the wedding and the family was overjoyed, although the baby was jaundiced and had to be incubated for a week. The parenting journey that awaited them was something that they had not anticipated as new parents. In fact, Helen was so busy with taking care of their son that she had to resign from her current job, just to be home with her son, and this therefore meant that Tom now had to work really hard at the cake store, so as to put food on the table.
During all these years, tom had planned a secret holiday for him and his wife only, but had never revealed that to his wife, and so when the baby was one year, and could now be left with the house help, Tom felt that this was the right time to surprise his wife. He requested her to pack her bags, and his too, for a one week holiday, in an undisclosed location. Of course Helen was dying with curiosity, about where she was being taken. When Tom mentioned that they were going for cruising for that one week, Helen could not hide her joy, as this is something that she had only either read on the newspapers or watched on the popular TV channel, National Geographic.
Throughout the Carnival cruiser, they had a lot of fun, and had time to bond, and spend time together, something that they had not done in a long time since Tom had been too busy. Interestingly for them, the whole trip cost them just $3,000 all inclusive. This is something that they both could not believe. They now plan to go cruising again at their second wedding anniversary next year.
A cruise like no other, a once in a life time experience. Come, and experience our ocean cruise story, where value and fun is guaranteed. We provide 3-7 night itineraries, great food, sports and other extracurricular activities, but above all, we provide the best customer service to suit your needs.
Cruise planners. Adapted from http://www.cruise4lovers.com/
Positioning matrix: adapted from http://www.smartdraw.com/resources/glossary/positioning-matrix/
Deloitte economic access (2012) the economic contribution of the cruise sector of Australia. Carnival, Australia
Cruise Down Under: adapted from http://www.cruisingdownunder.com.au/?gclid=CIn705Sq77oCFQ1f3god2QcAnw
Levi, K. (2007) "Differentiate or Diminish: The Art and Necessity of Business Positioning", (March 2007), p. 9
Trout, J. and Rivkin, S. (1996) The New Positioning : The latest on the worlds #1 business strategy, McGraw Hill, New York, 1996, ISBN 0-07-065291-
Carnival corporation website. Adapted from: http://phx.corporate-ir.net/phoenix.zhtml?c=200767&p=irol-products