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G5-C4 Cruise Ships A case study for Market Opportunity Analysis Group 5 Presented by: Mauricio Gonzales-quint Chantharas Kanchanakool Nina Krapf Vincent.

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Presentation on theme: "G5-C4 Cruise Ships A case study for Market Opportunity Analysis Group 5 Presented by: Mauricio Gonzales-quint Chantharas Kanchanakool Nina Krapf Vincent."— Presentation transcript:

1 G5-C4 Cruise Ships A case study for Market Opportunity Analysis Group 5 Presented by: Mauricio Gonzales-quint Chantharas Kanchanakool Nina Krapf Vincent G. Tenchavez Bui Thi Thuy Julia Vassiljeva

2 G5-C4 members Thuy Mauricio Nina Julia Vince Mod

3 G5-C4 I. Introduction of Case study II. Savvy Marketing helped fuel industry growth a.) Factors that helped change consumer perceptions b.) Ability of major competitors to understand market III. Types of Cruises, Benefits & Major competitors IV. Future Challenges V. Conclusion/Discussion Points outline

4 G5-C4 Introduction Vince

5 G5-C4 introduction Before the 1980’s Sea cruise was viewed as: dull and sedate vacation alternative for rich old people

6 G5-C4 introduction During the 1980’s Sea cruise perception changed: 8.5% annual growth most profitable 2005: 6M customers

7 G5-C4 introduction 2005, Carnival Corp. was the market share leader and parent of several lines: $2.3B net income $11.1 sales revenue 2009 forecast of 8% growth

8 G5-C4 introduction Problems 2002 – Cruise Industry slowed down: Terrorism Energy costs Harbor pollution

9 G5-C4 introduction Growth 2005 – Cruise Industry’s growth continued: 6M+ customers UK, Europe, Australia 2009 – forecast of 8% growth

10 G5-C4 Savvy Marketing Julia/Nina How?

11 G5-C4 Characteristics of the Cruise Vacation Industry Exceptional Value Proposition – Including transportation, accommodation, catering and entertainment for one all- inclusive competitive price Relatively Low Market Penetration Levels – About 20% of the U.S. population has ever taken a cruise, 9 to 10% in the UK and 4 to 5% in Europe. savvy marketing

12 G5-C4 Wide Appeal – 127 million potential cruise guests in North America. More than half of these individuals have expressed an interest in taking a cruise as a vacation alternative Positive Guest Demographics – Between 2005 and 2015, the number of people in the cruise industry's primary age group of 45 years and older are expected to grow by 24 million, or 20%, in the U.S. and Canada, and 20 million, or 15%, in the major Western European countries savvy marketing Characteristics of the Cruise Vacation Industry

13 G5-C4 High Guest Satisfaction Rates – North American cruise guests have a total satisfaction rate of 95%, including nearly 45% of cruise guests stating that they are extremely satisfied with the experience, which is defined in the surveys as the highest satisfaction rating of any vacation alternative they have experienced. Significant Growth Potential – The number of new cruise ships currently on order from shipyards indicates that cruise capacity is set to grow by 23% through 2012 savvy marketing Characteristics of the Cruise Vacation Industry

14 G5-C4 Carnival’s Income Merged with P&O Princess Cruises savvy marketing

15 G5-C4 Ships and passengers carried (Carnival) Passengers thous. savvy marketing

16 G5-C4 Building demand Building demand through strengthening all aspects of marketing programs Goal: to appeal wider variety of customer segments savvy marketing

17 G5-C4 Marketing steps Investments into physical facilities: casinos, shopping arcades, theatres, health spas, Internet, skating ring etc. Shorter and cheaper cruises More ports around the world More money spent on advertising and promotion programs savvy marketing

18 G5-C4 Understand the market: Understand, that wants and needs of customers are different in various age or social groups Focus on special interests, ideals and hobbies to fulfill their desires  gain new customers savvy marketing

19 G5-C4 How can you adapt ships for target groups: Create new ship designs – modern, comfortable and cozy Offer special comforts, bigger suites,… Serve special food and beverages – create new tastes and be creative to offer customers unknown things savvy marketing

20 G5-C4 Offer special activities related to the target group: sports, music, relaxing, SPA, ……  tailor all these things to the target group (demographic, social, lifestyle, age,….) savvy marketing How can you adapt ships for target groups:

21 G5-C4 Examples of special arrangements: P&O Princess – cruise in the Mediterranean:  younger couples  Sports and educational activities like: scuba diving, gourmet cooking, wine tasting “Romantic cruises”: honeymooners savvy marketing

22 G5-C4 Cruises for single crowd Cruises for families with young children:  multiroom suites  supervised activities  children are not bored and parents can enjoy holidays …. Traditional target group cruises:  couples in the 50s and 60s savvy marketing Examples of special arrangements:

23 G5-C4 Cruises Types, Benefits, Competitors Thuy/Mod

24 G5-C4 Carnival Cruise line Carnival Cruise Lines is the largest and most popular cruise line in the world Each Carnival vessel features at least three swimming pools, a full gambling casino, on-board duty free shopping, as well as a "Nautica Spa" health and fitness facility, and "Camp Carnival" cruises

25 G5-C4 Royal Caribbean Royal Caribbean cruise ship is like a recreation center, a grand hotel, an art gallery, several restaurants a seaside resort... all rolled into one Where else can you experience gourmet dining, enjoy first class entertainment, be pampered in spacious accommodations - all under one-roof cruises

26 G5-C4 Norwegian Cruise Line With Norwegian Cruise Line, Freestyle Cruising is all about flexibility and freedom. Freedom from stress. Freedom from schedules. Freedom to create your own vacation. On an NCL cruise, you can eat where you want, when you want, with whom you want. And with up to 13 different restaurants and dining rooms on board. On NCL, you're always free to whatever: + Freestyle Accommodations + Freestyle Dining + Freestyle Fun cruises

27 G5-C4 Holland America Holland America Cruise Line offers a diverse range of activities that are consistent across their ships: fitness workouts, art tours and wine tastings, for example. In addition, tea is served each afternoon. Evening entertainment includes many options, such as dancing, movies and Las Vegas-style revues. cruises

28 G5-C4 P&O Princess Princess has raised cruising to a whole new level, with spacious and accommodating ships packed with amenities. With two to three main dining rooms, warm and intimate in scale, and two to three spectacular theatres for a choice of entertainment nightly cruises

29 G5-C4 Types of Cruises RatesAmenities/ Benefits Major Competitors Contemporary / Resort class 150-$300 Value-oriented cruise of 3-7 days; casual environment, deck, pool space; activities, sports; sit-down and buffet- style meals. Carnival. Royal Caribbean, Norwegian Cruise Line Premium$250-$600 Semiformal, premium- quality Cruises of 7 days cruises; more space and service; theme lounges, theaters, cigar bars; activities, games, fitness facilities; premium food and beverage offerings. Holland America, P&O Princess. Benefits Offered and Major Competitors cruises

30 G5-C4 Luxury Type Rates: $600 to $1,500 Amenities/Benefits: Cruises emphasize greater choice of food, beverages, and entertainment options in a more formal atmosphere; more spacious and luxurious accommodations; more exotic itineraries cruises

31 G5-C4 Major Competitors Cunard Line, Crystal Cruises cruises

32 G5-C4 Founded in 1840 as the British and North American Royal Mail Steam Packet Company before gradually adapted itself to become one of the world’s largest passenger lines and had provided year-round service until 1968 before changing itself to concentrate on cruising and summer transatlantic voyages for vacationers Cunard - British-American owned cruise lines cruises

33 G5-C4 cruises

34 G5-C4 Wholly owned by Nippon Yusen Kaisha (NYK), the largest shipping company in the world Luxurious cruise ship line founded in 1988 and notable for its 2 medium- sized, high-end ships cruises

35 G5-C4 Rates: $1,000 plus Amenities/Benefits: Exclusive, yacht-like environment with only 100-200 passengers; high staff-to-customer ratio allows highly individualized service cruises Exclusive Type

36 G5-C4 cruises Major Competitors Seabourn, Silversea, Swan Hellenic

37 G5-C4 A luxury cruise line that operates four luxury, all-suite cruise ships that sail itineraries all around the world throughout the year. Silversea provides its guests an option called Personalised Voyages, a cruise industry first. This program allows guests to choose their own embarkation and disembarkation ports, essentially allowing them to create their own voyages. cruises

38 G5-C4 The company refers to itself as The Yachts of Seabourn. Seabourn specialises in small yachts, small enough to fit in many exotic ports around the world that large cruise ships can't reach. Seabourn Cruise Line is an ultra luxury cruise line operates all around the world, from short seven day Caribbean cruises to exotic 100+ day cruises. It is owned by Carnival Corporation, part of the "World's Leading Cruise Lines" marketing group, Passengers typically range in ages from the 40s to the 60s, but children are still welcome. cruises

39 G5-C4 Each cruise itinerary is a unique, cultural travel experience, blending world-class sites with smaller, off the beaten track destinations. It also invites distinguished guest lecturers to travel along the trips as to deliver lectures in accordance with the destinations. A British cruise line specialising in tours of historical or cultural interest aimed at the upper end of the cruise market. cruises

40 G5-C4 Future Challenges Mauricio

41 G5-C4 terrorist attacks and political unrest around the world disrupted industry revenues in 2002 and may to do so in the future. high energy cost may squeeze industry profits future challenges In spite of past success, the global cruise industry may face some icebergs on the horizon:

42 G5-C4 One of the industry’s biggest potential challenges is over-capacity The substantial growth and profits cruise lines enjoyed during 1990´s spurred them build more bigger ships at an increasing rate future challenges

43 G5-C4 The primary challenge is: to increase the growth in passengers booking to fill the growing capacity and recoup the huge investment in new ships. One way to do this: Is to develop long-term relationships with past customers in the hopes of generating more repeat business future challenges

44 G5-C4 CARNIVAL, for instance, OFFERS: Substantial DISCOUNT to PAST customers future challenges

45 G5-C4 Given that the vast majority of vacationers around the world have never gone on a cruise, however, the greatest potential for growth involves converting nonusers into new customers But attracting new customers will require an even better UNDERSTANDING OF WHAT THOSE PEOPLE WANT from a vacation and how they make their leisure purchase decisions. future challenges

46 G5-C4 Discussion Points Group 5

47 G5-C4 1.) Should the cruise vacation industry switch to younger generation customers or concentrate on older customers segment? discussion points

48 G5-C4 discussion points The cruise vacation industry should not SWITCH to younger generation customers. But rather, this industry should REATAIN older generation customers while at the same time EXPAND and CATER to the younger customers.

49 G5-C4 Population is getting older. Older people tend to have more money than youngsters and are more willing to spend their vacation in comfort and luxury. Should certainly invent special cruises for younger groups of people with plenty of entertainment and sport facilities, but this should be rather exception than a rule, i.g. a short school trip, seminars, bachelor party etc. discussion points

50 G5-C4 2.) According to surveys, the rate of people booking trips for holidays shrinks… What are the reasons for that and how can companies offering ship cruises hold their level of customers? discussion points

51 G5-C4 Reasons:  Financial crisis  people are afraid of spending money  Economy slows down  salaries shrink, or don’t rise at the same level as inflation  Fear of terror attacks  people stay in their own countries not to risk their lives  Fear of diseases like H1N1 discussion points

52 G5-C4 How to hold level: Special promotions for past customers Cheaper cruises Better safety guidelines Better health arrangements against diseases More service Higher quality standards More money for marketing, research and development  to be able to totally fulfill customers needs discussion points

53 G5-C4 3.) With the worldwide economy fluctuating and prices of goods and services going up, should cruise lines follow suit and bring the prices of luxury and high- end vacation packages down ? discussion points

54 G5-C4 Cruise lines should retain prices of luxury and high end vacation packages. They may opt to cut costs without sacrificing the quality of their product to keep up with the times. This is because luxury and high end packages cater to a certain market niche – those who are not price sensitive and are willing to spend for such luxury. discussion points

55 G5-C4 Thank you!!!


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