Managing Tourism Organization
Cunard Cruise Line is a subsidiary of Carnival Corporation & Plc which is established in 1840 and operated by Carnival UK. The Cunard Cruise Line is a leading cruise line which is providing luxurious and high end quality products to its customers across the globe. The Cunard Cruise Line has recently formulated its marketing strategy which is not aligned with the corporate objectives and mission of the company that is providing luxurious travelling services. The current marketing strategy of the company focuses on providing luxury vacations and destinations; however, the Company also aims to serve the middle class segment of the society by offering them 4 stars cuisines (Jainchill, 2013). Therefore, the company aims to formulate an integrated marketing strategy that provides growth and profits to each and every product of the company.
The company is also facing numerous challenges and issues in its marketing operations; however, the report discusses the current marketing issues faced by the Cunard Cruise Line. The products analysis of the Cunard Cruise Line will help the company to determine either the long term or the short term strategy for the growth of the company. The integration of tactical and strategic marketing will not suitable for the brand image of the company and the company will not able to compete both 5-star and 4-star level target markets; therefore, the assignment will suggest the company to focus only on one product in which the company has also competitive advantage.
Cunard Cruise Line is offering four different products to its customers among which three products have similar marketing strategies and the target market. However, the QE2 which is called as Queen Elizabeth 2 is a luxurious product of the Cunard Cruise Line. QE2 also focuses on providing 5-start cruising with ultra deluxe facilities by its two ships Vista fjord and Saga fjord (Mouawad, 2012). The Cunard Cruise Line is also offering five star cruising abroad through its two ships; Sea Goddess I and Sea Goddess II. Moreover, the four-Stars abroad cruising is less formal and it is provided by two ships namely Cunard Princess and Cunard Countess.
Challenge for the Cunard Cruise Line
The luxurious product of the Cunard Cruise Line is providing somewhat disadvantage to the company as the company is facing tough competition from the other cruise lines. The other cruise lines are offering discount packages on their four-star abroad cruises and are spending less money on building their brand image. However, it is difficult for the Cunard Cruise Line to compete with the other cruise lines and offer discount packages while maintaining quality brand image (Morrison, 2013). In order to clearly understand the current challenges faced by Cunard Cruise Line, the assignment presents brief analysis of the marketing activities of the company.
The target market of the Cunard Cruise ships includes the upper and middle class of the society who are travelling oriented and well-educated. The QE2 brand targets filthy rich and old age customers who demands for luxurious services and are willing to pay higher prices for these products. This target group is highly conscious about the prices of the products and the lower of prices of the luxurious products means that these are low quality products; therefore, the Crude Cruise Line offers high quality luxurious products to its customers in high prices. If the company offers luxurious products in low or moderate prices then they may face decline in sales. The sales of the luxurious cruises are not affected by the environmental issues because there is an inelastic demand for the luxurious cruises (Martín, 2012). Moreover, the economic and financial recession can not impact the sales of the luxurious cruises because it has a niche target market which is always willing to pay higher prices for luxurious cruises like QE2.
The four-start ships target the younger consumers who have lower income levels and they are highly responsive to the price changes. These customers are more attracted towards discount packages and the budget prices of cruise ships. There is an elastic demand for these products and the cruise companies can increase their sales by offering lower prices to this target segment (Hall and Lew, 2009). Moreover, the decrease in the income level of this target segment will also decrease the sales of the cruise line companies and these customers will not be able to buy such cruise lines as offered by Cunard.
Cunard Cruise Line has been considered as a leading brand in the 5-Star cruise Line as they are operating for more than 150 years in the tourism industry. The company has an established brand image which is strongly associated with the quality and luxury of the Cruise ship facilities. However, the Cunard Cruise Line is facing intense competition in the Four-star market from a large number of competitors. The company spends millions of dollars to promote and market its brands in different regions of the world.
Target Market Strategy
The target market strategy of Cunard Cruise Lines for 4-star cruises is different from its competitors; they are offering services to young and married couples along with their children whereas the competitors are offering cheaper cruises to their target markets. The competitor cruise lines target consumers on the basis of their demographics while the Cunard just focuses on the high profile customers. In order to increase its market share and to create competitive advantage, the Cunard Cruise line needs to develop similar target markets as its competitor’s posses. By doing so, the company may damage the brand image of the company resulting in decreasing sales of the five star cruises.
According the BCG Matrix, the 5-Star luxury cruises of the Cunard Cruise Lines can be considered as a “Cash Cow” for the company. Luxurious and high end cruises do not generate high market growth for the company; however, the strong brand image of the Cunard Cruise Line help the company to gain highest market share in this segment (Candiotti & Levitt, 2013). The positioning strategy of the company should focus on this product line rather than the 4-stars product lines which will save the marketing resources of the company.
Most of the products offered by the Cunard have reached the maturity stage and are in decline; therefore, the marketing mix strategies of the company need to revise after careful evaluation for maximizing company’s profits. The sales of the 4 star products of the company are declining as they are not offering any discounts and packages to their customers like competitors. They are offering luxurious as well as discount products to their customers. The prices are also high and the distribution channels of the company are also effective.
Potential Strategies for the Problem
The Cunard Cruise Line should reformulate their marketing mix and marketing strategy for profits maximization and for maintaining its high end and luxurious brand image among its customers. The Cunard Cruise Lines need to develop a long term marketing strategy by changing its marketing mix strategies for achieving sustainable goals of the business. The company needs to focus on one product at a time and sell off the low profit margin products. The paper identifies the following potential alternatives for the ongoing problem in the company:
The Cunard Cruise Line needs to develop a long term marketing strategy by changing its marketing mix strategies for achieving sustainable goals of the business. The company needs to focus on one product at a time and sell off the low profit margin products.
The long-term and short-term goals of the Cunard Cruise lines are not clearly mentioned; however, the assignment identifies the long-term and short term goals of the company. The long term goals of the Cunard Cruise are to enhance and maintain the quality brand image of the company and to offer high end cruise facilities to its customers whereas, the short-term goals of the company are focusing on competing with the other cruise lines for 4-star products. By competing for the short term period, the company may increase its profits; however, the adoption of this strategy on long term basis may damage the brand reputation of the company.
The marketing strategy of the company should be developed on the basis of long term goals of the organization (Johanson, 2013). The company should not invest on its four start cruises as it is a low profit and slow growth market segment. The company shouldn’t heavily invest on the advertising and promotion of the 4-star products; however, they need to save their marketing resources for the high end customer segment. The company should develop high quality ads for QE2 and 5-star ships and publish them in magazines for targeting more customers. This will help the company to reduce its advertising cost by 50% and focus more on strategic marketing rather than tactical marketing. The company should develop strong relationships with its customer by using different communication channels such as the direct mail and should take their customer’s feedback. The company will also strengthen its activities with the companies which can provide information related to customer’s demographics, history and buying behaviour of the customers so that the company will offer products and services which match the needs and demands of the customers. The company should stop its budget or low price cruises and just focus on the luxurious and high price products. This strategy will maintain the luxury brand image of the company and the high prices of the cruises will not impact the demand of the luxury cruise ships. The company will be able to provide more efficient and high quality accommodations to its customers by just focusing on the 5 star cruises. The company will use a centralised marketing strategy for serving this target market and there will be no need for separate marketing managers for each ship.
The Cunard Cruise Line needs to develop an integrated marketing campaign that utilizes both strategic and tactical marketing approaches.
The integrated marketing campaign will help the company to achieve both tactical and strategic goals of the organization. This strategy will improve and maintain the quality brand image of the company; however, it is also important for the company to offer budget cruises to its customers. The marketing strategies of the companies also affect the other marketing strategies negatively (Holmes and Smith, 2012). In the same way, the brand image of the company will damage, if there will be separate marketing manager and marketing campaigns for different ships. The integrated marketing campaign will help the company to build strong image among its customers with strong and consistent advertisements.
The analysis of the potential alternatives recommend that the Cunard Cruise Lines should sell off the 4-star ships and only focus on the 5-star ships as they cannot compete in the 4-star market segment on long term basis. If they will offer discount packages and cut prices, it will ruin their brand image in front of the target segment of the 5 star ships. Therefore, the development of a long term strategy for high end products is an appropriate strategy for the company.
The UK tourism industry is a profitable and high growth industry; however, the companies operating in the tourism industry are also facing numerous challenges and problems in their business operations (Lemmetyinen and Go, 2009). The assignment highlights the issues in the marketing operations of the Cunard Cruise Lines for its different product lines. The company is famous for its luxurious and high end brand image in the cruise ship lines but it also offers low cost products to its customers. The company cannot offer discounts and packages for its 4-star products as it may damage their luxurious brand image; therefore, the company wants to develop an integrated marketing campaign which helps the company to achieve desired goals and objectives of the company. After analysing the marketing operations and marketing strategies of the company, the assignment recommend the Cunard Cruise line to sell off the 4-star product line and just invest on the 5-start cruising products as the company has a strong international image as a luxury product. There is also very low level competition in this market segment which helps the company to improve its distribution channels through strategic marketing approach.
List of References
Candiotti , S. & Levitt, R. (2013). Investigators find fire clues aboard crippled carnival triumph. CNN Travel. Available from http://www.cnn.com/2013/02/17/travel/cruise-ship-fire [Accessed 3 February 2016]
Hall, C.M. and Lew, A.A. (2009). Understanding and managing tourism impacts: An integrated approach. Routledge.
Holmes, K. and Smith, K. (2012). Managing volunteers in tourism. Routledge.
Jainchill, J. (2013). Carnival triumph fallout not affecting prices at other lines. USA Today. Available from http://www.usatoday.com/story/cruiselog/2013/04/10/carnival-triumph-fare-prices/2070555/ [Accessed 3 February 2016]
Johanson, M. (2013). Are cruise ships safe? carnival cruises’ triumphant fall from grace raises the question of whether cruise vacations are too risky. International Business Times. Available from http://www.ibtimes.com/are-cruise-ships-safe-carnival-cruises-triumphant-fall-grace-raises-question-whether-cruise-1170573 [Accessed 3 February 2016]
Lemmetyinen, A. and Go, F.M. (2009). The key capabilities required for managing tourism business networks. Tourism Management, vol. 30, no. 1, pp. 31-40.
Martín, H. (2012). Safety concerns may slow cruise industr'ys growth. Los Angeles Times. Available from http://articles.latimes.com/2012/jan/18/business/la-fi-cruise-industry-20120118 [Accessed 3 February 2016]
Morrison, A.M. (2013). Marketing and managing tourism destinations. Routled
Mouawad, J. (2012). Industry weighs effect of ship accident. New York Times. Available from http://www.nytimes.com/2012/01/18/business/cruise-industry-weighs-effect-of-costa-concordias-grounding.html?_r=0 [Accessed 3 February 2016]