cunard line ltd
TRANSCRIPT
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Cunard line , Ltd.
Managing Integrated Marketing Communications
MKT 642
By:John Dehmardan
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Background
• Subsidiary of Trafalgar House
• Cruise and steamship business since 1840
• Advent of jet travel
• Luxury vacation business
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The Ships
• Cunard offered cruising on seven ships
• Luxury (5-star) category:
- Queen Elizabeth 2, Sagafjord, Vistafjord, Sea Goddess I, Sea Goddess II
• Premium ( 4-Star) category
- Cunard Countess and Cunard Princess
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Queen Elizabeth II
• The finest cruise ship in the world• Offered ultra-luxury accommodations and exquisite
service • Capacity of 1850 passengers• It was marked as the ultimate in cruising• Traveled between New York and Europe • It was also used in the Caribbean• High season:$3000 to $15000 per person• Low season:$2400 to $12000 per person
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Sagafjord and Vistafjord
• Ultra-deluxe five-star cruisers
• Positioned as ultra-luxury cruisers and offered services at the same level as QE 2
• Sagafjord: Primarily out of American ports to the Caribbean, Alaska and the South Pacific
• One annual round-the-world cruise
• Capacity of approximately 550
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Sagafjord and Vistafjord
• Vistafjord: Five star cruiser
• It was based in Europe and was used primarily in that part of the world
• Capacity of 750 passengers
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Cunard Countess and Princess
• Considered 4-Star (premium) cruise ships• Less formal and less expensively priced• Positioned as casual• Marketing for them tended to be more oriented to their
destinations• Capacity of approximately 800 passengers• Countess: Cruise among Caribbean ports• Princess: Mediterranean and Europe • High season: Range from $1700 to $6500
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Sea Goddess I & II • Yacht-like ships for “intimate” ultimate deluxe
cruising
• Atmosphere of wealthy person’s yacht
• Capacity of only 58 couples
• $800.00 per person per day
• Sea goddess I:six months in Europe and six months in Caribbean
• Sea goddess II: six months in orient and six months in the Mediterranean
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Queen Elizabeth II
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Queen Victoria
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Coronia
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The Industry and Cunard’s Segments
• Cruise industry: 4 million boardings / year
• Luxury segment: (5-star) approximately 8%
• 10 luxury ships worldwide (5 Cunard ships)
- Cunard has about 50% market share
• Cunard’s demographics:
- 40% sailed from Europe
- 55% sailed from North America
- 5% from other places
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The Industry and Cunard’s Segments
• 60% of the company’s business with passengers domiciled in the United States
• 95% of customers book their cruises through travel agents
• Cunard cruise ships consistently achieve approximately 90% occupancy
• 65% of passengers pay full list price
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The Industry and Cunard’s Segments
• Luxury segment: Supply driven
- As more luxury ships come into service, there is a stream of additional customers available to purchase cabins
• Growth at an average compounded rate of 10% per year
• Overcapacity
• Discounting and price promotions
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Cunard Marketing and Marketing Communication
• Cunard success: Excellence and elegance
• Marketing Communications Mission: to develop and
maintain Cunard image and to support each of the ships planning managers in their marketing activities ( 100% )
• Marketing budget: $20 million
- 50% strategic, 50% tactical
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Cunard Marketing and Marketing Communication
• Direct mail- 25%
• Mass media advertising- 35%– 70% strategic– 30% tactical– Currently 50-50
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Cunard Marketing and Marketing Communication
• Brochures and Travel Agent Co-operative Spending- 35%
• Public relations and promotional
activities- 5%
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First dilemma
• “Sale-oriented” format with more emphasis on price for tactical advertising?
- Price = revenues
- Flexible pricing policy
Market changes
Purchase occasions
Target segments
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First dilemma
• Possible conflicts with strategic objectives
• Creating a balance between brand image and tactical promotional efforts
- Magazines : Building brand and develop a distinctive image
- Newspapers: Tactical marketing to create short-term sales
- Direct mail
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Company’s Image vs. Individual Ships’
• Directly related to the new organizational restructuring
- Each group is semi-independent
- An executive responsible for strategic and tactical planning to for each ship
• Not a very good idea
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Which marketing communications elements?
• Increasing competition: Requires increase in promotional efforts
- Increase promotional activities
“one-day sale”
- Direct mail: stimulate demand, inform high potential prospect, and “close the sale”
• Travel agents spending (35%) : Internet
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Success of the “One-day sale”
• Should engage in more “sales-oriented ” efforts
• Negative impact on brand equity
• Frequent aggressive sales promotions should be avoided
- Targeted
- In response to aggressive price cuttings
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