MARKETING THE INDUSTRY SEGMENTS 4.03 Explain the cruise industry.

MKT-IT-6. Students will analyze the transportation options and modes of travel available to facilitate travel to various destinations including modes of travel as a destination such as the cruise, air, and rail industries. a. Differentiate the major types of passenger cruise ships and the kinds of accommodations, products, and services each cruise line typically offers. b. Discuss the similarities between a cruise ship and a hotel destination. c. Compare and contrast the various forms of ground transportation (i.e., trains, busses, and cars) and their impact on the industry. d. Examine the history of the airline industry emphasizing the economic impact of airline hubs on cities. e. Discuss the challenges facing the modes of transportation.

The cruise experience… Floating resorts or all-inclusive vacations Includes transportation, meals, lodging, recreation, and entertainment Service is equal for all passengers. Itineraries, destinations, and cabin locations are the main factors segmenting the cruise industry. Cruise lines offer diverse itineraries to appeal to different markets.

Cruise Market Segments Mass market Middle market Luxury market

Mass Market Passengers in this category have income from $20,000- $39,000. Carnival Cruises are popular with this market.

Middle Market Passengers in this category have income from $40,000-$59,000. This is the largest portion of the cruise market. Princess Cruises and Norwegian Cruises are popular with this market.

Luxury Market Passengers in this category have income in excess of $60,000. This market level offers superior service and cuisine. Seabourn Spirit and the Radisson Diamond serve this market.

GRT: Gross registered tonnage; the amount of enclosed space on a ship; one GRT is equal to 100 cubic feet. Space ratio: The amount of space per passenger on a cruise ship. The space ratio is a guide to the market level of a ship. A ratio of 35 or higher indicates a capacious ship. Space ratio = GRT/Number of passengers

Accommodations… *The location of a cabin on a cruise ship may be the only distinction that separates passengers. Larger staterooms are on upper decks. Suites have separate bedroom and lounge/living areas. Some rooms on top decks have a terrace. Cabins on the upper decks are the most expensive.

Accommodations… (cont.) Cabins located on the outside of the upper decks have portholes (windows). Cabins located on the inside and lower decks have no windows. Cabins are designed for efficient use of space.

Elements of a cruise… Embarkation No cash needed Security checks Meals Daily program

Embarkation… Cruises are usually circle trips, departing and returning to the same port city, known as the embarkation point.

No cash needed… Prior to setting sail, passengers give an imprint of their credit card to open an account on board the ship. All purchases on board the ship are charged to the account. Passengers settle their charges at the end of the trip. Passengers without credit cards must make a cash deposit prior to setting sail.

Security checks… Cruise passengers are required to go through a security check. Some ships issue passengers a plastic card that serves as their cabin key, boarding pass, and ID for coming back from visiting a port of call.

Meals… Formal and informal dining Seating arrangements may be for 2 or 10 Menus may be theme related or haute cuisine Buffet service available for casual dining Pizza bars, ice cream bars, and other treats available throughout the day Midnight buffets are a festive occasion Room service available Special appetizer parties on first and last nights of a cruise

Reservations for the dining room… One seating allows passengers to dine anytime during serving hours. Early or late seating requires passengers to dine at a set time.

Daily program… Each night, the program activities for the subsequent day is put in the passengers room. This information helps passengers plan their activities.

Cruise passengers… Active. With the variety of activities on a ship, it is easy to stay busy. Families. Special activities are designed for children so parents can relax and enjoy themselves. Gamblers. Casinos offer entertainment for passengers interested in playing. Those celebrating an event. Special occasions are often celebrated on cruise ships.

Cruise passengers… (cont.) International travelers. Cruise itineraries satisfy travelers who want to experience the appeal of other countries. Those who wish to relax. Passengers decide whether or not to participate in activities. Pools are available for lounging and sunning, and spas are available at an extra expense. Singles. Ships provide the opportunity to meet others.

Cruise passengers… (cont.) Those with special interests. Cruise lines have developed theme cruises to appeal to many special interest groups, i.e., whale watching, wine tasting, etc.

Popular cruise destinations… Bahamas Baltic Sea Bermuda The Caribbean Mediterranean South America Alaska

Air-sea packages… Transportation to the embarkation port may be included with a cruise package. By packaging the flight and cruise together, passengers only have to communicate with one company regarding their reservations. If flights are delayed, the ship may delay sailing to wait for the bulk of passengers, or passengers may be flown to meet the ship at the next port. Shuttle service between the airport and the port is usually included.

Marketing strategies used by industry… Many cruises are promoted through agencies. Cruise lines have sales teams who go to individual agencies to assist with advertising and sales promotion of their cruise line. Sales incentives are offered to agents to influence them to promote one cruise line over another. Brochures are the main promotional tool. Websites provide an opportunity for a timely response. Social network sites such as Facebook and Twitter

Marketing strategies used by industry… Sales promotion items used on ships include glassware, cruise line clothing, towels, and other souvenirs in the gift shops. Cruise lines utilize television advertising to reach mass markets and magazines to cater to particular market segments. Direct mailings are frequently used to follow up with cruise customers, and is used to deliver newsletters and alert cruisers of upcoming specials.

Trends in the cruise industry… Has remained strong despite 9/11/01 Rapidly growing segment Safer ship designs due to technology Individual ships marketed to specific target markets Navigational aids can pinpoint ship location at all times Niche marketing Baby boomer travel

Economic Benefit of the Cruise Industry in Georgia (2008) Georgia accounted for $663 million in cruise industry direct spending in Georgia ranks seventh in the nation for industry expenditures. The cruise industrys spending generated 8,902 jobs and $435 million in income for Georgia workers. With no direct cruise operations, Georgia is a major source market for cruise passengers. Resident cruise passengers totaled 273,000, nearly three percent of U.S. resident passengers. Tourism-related businesses such as tour operators, airlines, hotels, restaurants and providers of ground transportation were the beneficiaries of 17 percent of the cruise industry spending, receiving $111 million.

A Selection of Cruise Industry Strategic Business Partners (CLIA Executive Partners) in Georgia Milliken Carpet Unisource Worldwide, Inc. The Coca-Cola Company

Nationwide, the Cruise Industry Generates… $40.2 billion in total economic benefits $19.07 billion in direct spending by the cruise lines and passengers on U.S. goods and services 357,710 total U.S. jobs generated by cruise expenditures $16.18 billion in total wages for U.S. employees

Cruise Facts About 12 million passengers worldwide took cruises in 2007 U.S. ports handle about 75% of all embarkations The Caribbean is the top cruise destination A typical cruise is about 7 days long Approximately 78% of cruise passengers are U.S. residents