Managing Integrated Marketing Communications Cunard line , Ltd. Managing Integrated Marketing Communications MKT 642 By:John Dehmardan

Background Subsidiary of Trafalgar House Cruise and steamship business since 1840 Advent of jet travel Luxury vacation business

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

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

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

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

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

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

Queen Elizabeth II

Queen Victoria

Coronia

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

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

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

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

Cunard Marketing and Marketing Communication Direct mail- 25% Mass media advertising- 35% 70% strategic 30% tactical Currently 50-50

Cunard Marketing and Marketing Communication Brochures and Travel Agent Co-operative Spending- 35% Public relations and promotional activities- 5%

First dilemma “Sale-oriented” format with more emphasis on price for tactical advertising? - Price = revenues - Flexible pricing policy Market changes Purchase occasions Target segments

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

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

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

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

Happy holiday