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Out of Box Consulting Out of the Box Consulting Nick DUrbano Kevin Gardner Gregory Karan Shanmugarajah Adam Skoreyko A3.

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Presentation on theme: "Out of Box Consulting Out of the Box Consulting Nick DUrbano Kevin Gardner Gregory Karan Shanmugarajah Adam Skoreyko A3."— Presentation transcript:

1 Out of Box Consulting Out of the Box Consulting Nick DUrbano Kevin Gardner Gregory Karan Shanmugarajah Adam Skoreyko A3

2 Out of Box Consulting Roadmap Recession Strategy New Value Proposition Europe Expansion Conclusion Out of the Box Consulting Recession Strategy New Value Proposition Premium European Leader Trough Peak Recovery Economic implications Pricing strategy Reallocate capacity New markets & demographics A culture of tech & green Positioning New marketing plan Capacity outlook Goals Deliverables

3 Out of Box Consulting Recession Out of the Box Consulting Recession Strategy New Value Proposition Europe Expansion Conclusion

4 Out of Box Consulting Recession Out of the Box Consulting So far we are approximately 17 months into the recession Cant time the market Plan for 5 years, Expect 2 years Abnormal recession, Abnormal consumer response Recession Strategy New Value Proposition Europe Expansion Conclusion

5 Out of Box Consulting Recession Out of the Box Consulting So far we are approximately 17 months into the recession Cant time the market Plan for 5 years, Expect 2 years Abnormal recession, Abnormal consumer response Recession Strategy New Value Proposition Europe Expansion Conclusion

6 Out of Box Consulting Recession Value Proposition Out of the Box Consulting CommunicateMaintain Value Premium Image Recession Strategy New Value Proposition Europe Expansion Conclusion

7 Out of Box Consulting Recession Value Proposition Out of the Box Consulting Objectives Spur Demand Increase Margins Spur Demand: Maintain Loyalty (USA) Too difficult to acquire new customers Induce returning visits Increase Margins Increase yield/customer Separation from deep discount pricing Recession Strategy New Value Proposition Europe Expansion Conclusion

8 Out of Box Consulting Recession Value Proposition Out of the Box Consulting Objectives Spur Demand Increase Margins Communication Strategy Thank You for Being a Loyal HAL Customer Attract existing customers Leverage DRM and CRM systems Thank you letters Less discounts and more on-board amenities to attract customers Free credits (casino, stores, drinks, excursions) Recession Strategy New Value Proposition Europe Expansion Conclusion

9 Out of Box Consulting Recession Value Proposition Out of the Box Consulting Objectives Spur Demand Redistribute Supply Redeploy vessel to Europe Specifically the Noordam No balance sheet space for buying Lower opportunity cost Good fit with European market Increase Margins Reducing Supply Reduce Need to Discount Leads to higher price point Preserves brands prestige factor Recession Strategy New Value Proposition Europe Expansion Conclusion

10 Out of Box Consulting Roadmap Recession Strategy New Value Proposition Europe Expansion Conclusion Out of the Box Consulting Recession Strategy New Value Proposition Premium European Leader Trough Peak Recovery Economic implications Pricing strategy Reallocate capacity New markets & demographics A culture of tech & green Positioning New marketing plan Capacity outlook Goals Deliverables

11 Out of Box Consulting New Value Proposition Out of the Box Consulting Heavy Investment in IT & New Forms of Communication Twitter Social networking ning.com Custom log-in page on ship CRM to customize delivery New Customer Demographics Baby Boomers (Euro) Affluent emerging professionals New Value Technology & Environment Create a culture of technology Recession Strategy New Value Proposition Europe Expansion Conclusion

12 Out of Box Consulting New Value Proposition Out of the Box Consulting Flight/Hotel 205kg/day Cruise 230kg/day Fort Lauderdale and Copenhagen shore power upgrades Water Purification Soy Inks Ship to Shelter New Customer Demographics Baby Boomers (Euro) Affluent emerging professionals New Value Technology & Environment Option to purchase off-sets Green Initiatives: Taking a Leadership Role Promote environmental efforts Recession Strategy New Value Proposition Europe Expansion Conclusion

13 Out of Box Consulting Roadmap Recession Strategy New Value Proposition Europe Expansion Conclusion Out of the Box Consulting Recession Strategy New Value Proposition Premium European Leader Trough Peak Recovery Economic implications Pricing strategy Reallocate capacity New markets & demographics A culture of tech & green Positioning New marketing plan Capacity outlook Goals Deliverables

14 Out of Box Consulting Carnival Product Portfolio Out of the Box Consulting Cruise LineCategorySourcingNumber of Ships CarnivalContemporaryNorth America22 PrincessPremiumNorth America17 HALHigh PremiumNorth America14 Costa CruisesHigh ContemporaryItaly, France, Spain6 AIDAMid ContemporaryGermany5 Cunard LineLow LuxuryUnited Kingdom3 IberocrucerosMid ContemporarySpain, Brazil3 SeabournLuxuryNorth America3 P&OPremiumUnited Kingdom2 P&O AustraliaPremiumAustralia, N.Z.2 HAL can expand to Europe and not hurt Carnivals structure Recession Strategy New Value Proposition Europe Expansion Conclusion

15 Out of Box Consulting What European Countries? Out of the Box Consulting HAL already present in Denmark BMW Metric used as a sanity check Recession Strategy New Value Proposition Europe Expansion Conclusion Legend 3 = High 1 = Low

16 Out of Box Consulting Positioning Map in Europe Out of the Box Consulting Luxury Premium Contemporary NorwayU.K.GermanyFranceSpain Segment Country Hapag-Llyod (4) Phoenix Reisen (1) Fred Olsen (5) Pullmantar (6) Thomson (5) CDF Croisière France (1) Discover (1) Transocean (1) Norwegian (11) MSC (9) MSC (9) MSC (9) MSC (9) MSC (9) Azamara (2) HALs Zone of Strategic Fit Recession Strategy New Value Proposition Europe Expansion Conclusion

17 Out of Box Consulting Marketing in Europe Out of the Box Consulting How do Europeans choose their vacations? #1 Word of Mouth: 29.3% #4 Travel Agents: 11.4% What type of holidays would travelers give up? #1 Winter: 41.6% #2 None: 18.8% Most important consideration when selecting? #1 Value: 33% #2 Price: 16% Main European periods for holiday travel? #1 August: 27% #2 July 24% Recession Strategy New Value Proposition Europe Expansion Conclusion

18 Out of Box Consulting Marketing in Europe Out of the Box Consulting Goals Objective Strategic Focus Tactics Positioning Premium GO-TO European Cruise Line Recession Strategy New Value Proposition Europe Expansion Conclusion

19 Out of Box Consulting Marketing in Europe Out of the Box Consulting Goal Objectives Strategic Focus Tactics Create Brand Awareness Limited brand equity Need to generate buzz Gain Distribution Networks Leverage Carnivals other lines Travel agents less important Online vacation websites Drive to Website Best reach in international market Recession Strategy New Value Proposition Europe Expansion Conclusion

20 Out of Box Consulting Marketing in Europe Out of the Box Consulting Goal Objectives Strategic Focus Tactics Carnival (CCL) Fits with cluster strategy Leverage CCLs current operations in Europe Holland America Line Up-Selling is a key focus Value proposition Recession Strategy New Value Proposition Europe Expansion Conclusion

21 Out of Box Consulting Marketing in Europe Out of the Box Consulting Goal Objectives Strategic Focus Tactics Features? Destinations Activities Testimonials Big Idea: The Cube Where? Metropolitan cities High traffic areas How are you attracting people? Pixmen Teaser: Web (Whats in the Cube?) Interactive 3-D Tiles on the floor Walk around and see different images Recession Strategy New Value Proposition Europe Expansion Conclusion

22 Out of Box Consulting The Cube Marketing Concept Out of the Box Consulting Whats in the Cube? Created by Sid Lee Inc. Ad agency Successes in New York Boston Recession Strategy New Value Proposition Europe Expansion Conclusion

23 Out of Box Consulting European + Premium Capacity Recession Strategy New Value Proposition Europe Expansion Conclusion

24 Out of Box Consulting Carnival Total Capacity Recession Strategy New Value Proposition Europe Expansion Conclusion

25 Out of Box Consulting Final Thoughts Out of the Box Consulting Recession Strategy New Value Proposition Europe Expansion Increasing margins Survival and positioning for growth Prepare for Europe Leverage technology and green European marketing plan Recession Strategy New Value Proposition Europe Expansion Conclusion Holland America Line Market leader for Europe in premium division

26 Out of Box Consulting Holland America Line Out of the Box Consulting No matter where you go, enjoy excellence. Thank you very much! Any Questions?

27 Out of Box Consulting Appendices Out of the Box Consulting Roadmap SAP History Recession outlook Balance Recession: Object. Recession: Demand Technology Sustainability Product Portfolio What Countries? Positioning Map Marketing: EuroData Marketing: Goal Marketing: Objective Marketing: Strategy Marketing: Tactics Marketing: Cube Conclusion Why not the BRIC Information Source Holiday Draw Backs Considerations Cruise Sales Region Green Marketing Risks & Mitigations MTKG: Germany MKTG: U.K. MKTG: Norway MKTG: Spain MKTG: France Carbon Credit Recession: Margins On-shore Power Social Networking Capacity

28 Out of Box Consulting Why not the BRIC? Out of the Box Consulting Ibero acquisition covers contemporary segment HAL in Brazil would oversaturate market Doesnt fit premium status Brazil Political Instability Would have to create everything from scratch Russia Little port access Difficult to gain Indian consumers Doesnt fit premium status India Negative growth in the region Lack of spillover Doesnt fit premium status China

29 Out of Box Consulting Information Source Out of the Box Consulting

30 Out of Box Consulting Holiday Draw Backs Out of the Box Consulting

31 Out of Box Consulting Most Important Consideration Out of the Box Consulting

32 Out of Box Consulting Cruise Sales by Region Out of the Box Consulting Cruise Value Sales US$ million2006 US$ millionaverage growth North America 19, Western Europe 5, Asia Pacific 3, Latin America Australasia Eastern Europe Africa and Middle East Source: Marketing

33 Out of Box Consulting How to market sustainability Out of the Box Consulting MediumExecution Web -Larger Section on sustainability - Initiatives taken -Introduce carbon off-set program Public Relations - Press Release when new initiatives begin - Invite media members to cruise - Incentive to promote The Cube - Sustainability square - all the advantages of HAL

34 Out of Box Consulting Marketing in Germany Out of the Box Consulting HAL is Octoberfest 365 Days a year Tagline Berlin-Hauptbahnof Station Stuttgart Cube Location Die Unterschrift der Exzellenz Slogan Translation

35 Out of Box Consulting Marketing in U.K. Out of the Box Consulting Even the Queen thinks HAL is great value Tagline London Waterloo Birmingham New Street Railway Station Cube Location N/A Slogan Translation

36 Out of Box Consulting Marketing in Norway Out of the Box Consulting The ship that gives you an even better quality of life. Tagline Oslo Central Station Bergen Train Station Cube Location En signatur på eksellense Slogan Translation

37 Out of Box Consulting Marketing in Spain Out of the Box Consulting Why run with the bulls when you can soar the seas Tagline Madrid Atocha Train Station Barcelona: Sants Station Cube Location Una firma de excelencia Slogan Translation

38 Out of Box Consulting Marketing in France Out of the Box Consulting Since 1895, HAL has aged like French Wine. Tagline Paris: Gare Du Nord Marseille: Saint-Charles Cube Location Une Signature dExcellence Slogan Translation

39 Average House Carbon Level/365 days= 2800kg/365 = 7.7kg/day Average Air Travel Level= 1971 kg CO2 Total for Air Travel and Home for 10 days= 2048 kg CO2 Carbon Level per Day at Sea = 230 kg C02 Total for Sea Travel for 10 days= 2300 kg CO2 Source: Center for Alternative Technology Carbon Credit

40 Out of Box Consulting On-shore Power Terminal 91 is currently scheduled to go on-line in Seattle at the end of April 2009 Average savings of 87 tons of CO2 per call with Holland America in 2006 Reduced pollution can be accounted for because when in port, emissions from the ship can be eliminated thanks to the shore power, according to the Port of Seattle. Lighting, pumps, ventilation, and refrigerators are a few of cruise ships major power users that can take advantage of the new technology.

41 Out of Box Consulting Social Networking Ning.com offers a customizable social networking front-end that can be used as an alternative to a external solution Ability to integrate into the existing website and servers for HAL Can be used in conjunction with a log-in screen aboard HAL vessels Twitter can be used pre-trip, during trip and post-trip in different capacities Pre-trip implementation would involve itinerary updates and travel warnings During trip implementation would allow activity updates and potential up sells Post-trip would involve survey follow-ups and alerts about future trips and promotions

42 Out of Box Consulting Risks & Mitigation Impact Probability Timing Ship is delayed in production Fuel costs Seasonality Pirates MetricsRisks Terrorism

43 Out of Box Consulting Risks & Mitigation Ship is delayed in production Creates backlog in capacity Opportunity + refund costs Apply a heavy penalty for delayed contracts ImpactProbabilityTiming

44 Out of Box Consulting Risks & Mitigation Fuel costs Large fluctuations in price Unpredictable Fuel surcharge – hedge – repurchase ImpactProbabilityTiming

45 Out of Box Consulting Risks & Mitigation Seasonality Leads to wide shifts in demand Uneven capacity utilization and scheduling problems Expand coverage to other areas of Europe & Caribbean ImpactProbabilityTiming

46 Out of Box Consulting Risks & Mitigation Pirates Increasing activity Increase in violence Ensure due diligence for dangerous routes with the Navy ImpactProbabilityTiming

47 Out of Box Consulting Risks & Mitigation Terrorism Potential target with huge impact Operation in hostile environment Create a system of best practices to ensure appropriate protocol and training ImpactProbabilityTiming

48 Out of Box Consulting Various Comparative Capacity Totals


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