Cunard Line Notes

 

Cunard Line

V.P.: Eleanor Leslie Senior VP for world marketing ans Sales: Ronald Santangelo The Company and its ships:

  Cunard Line was a whole owned subsidiary of Trafalgar House, a large la rge London based

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conglomerate

  It had been into cruise and steamship business since its founding in 1840   Prior to arrival of Jet travel, the firm was a worldwide important provider of travel

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services specially between North America and Europe.

  The growth in the convenient international airplane services had changed basic

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character of its business.

  Cunard now was in Luxury Vacation Business

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On

board services and recreation constituted most of the appeal of Cunard Clientel

though destination was still part of service providing specially in Caribbean cruises v ariety of activities, entertainment e ntertainment and sumptuous sumptuous (lavish)   Customer were treated to variety

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food while they were at sea.

  Appeal to customers was experience luxury and fun while on the cruising among

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different vacation-oriented ports.

  Cunard offered cruising on 7 ships, 5 were luxury category (5 star) and 2 were in

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premium category (4 Star) Each had distince image and positioning

a)  QE2: finest cruise ship in the world, ultra luxury accommodation, exquisite services, one

round trip to world each year, 1850 passengers, between New York-Europe and in

Caribbean  b) 

Ultra deluxe, Sagafjord and Vistafjord: positioned as ultra-luxury cruise and sevices

appx. Of same level as QE2, 550-750 passenger, SF- Carribbean, Alaska and South pesific, and one round the world trip, VF for within Europe. c)  Counard Countess and Cunard Princess: less formal and less expensive- 4star cruis ship,

positioned as casual, marketing for- destination, 800 pasengers, CC in 1992 for famous Caribbean ports, CP in Mediterrarean Med iterrarean and Europe  d)  Sea Godesses 1 and Sea Godesses: yatch like ship for intimate ultimate deluxe cruising ships, capacity- 58 couples, attempted to create wealthy persons yatch, less on-

 

board entertainment entertainment but charged $800 person similar to QE2 and twice of (b). SG1- 6 months in Caribbean and six months in Europe, SG2- six months in Orient and South Seas and Six months in Caribbean. e)  60% of business form customers domiciled in US f)  95% booked cruise from travel agents Passengers: 

Place Europe North America Other places around the globe

Percentage of Passengers 40% 55% 5%

The Industry and Cunard Segment

  Overall cruise industry: 4 mn boarding per year   Luxury Segment: 8% of total- in this segment Cunard estimated to have 50% of share other than Cunard 5 Star ships, Seaborne-2, Royal Wiking-2   Luxury ship category was small- 10, other

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and Crystal- 1

 

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Other

than that, the top grade cabin in 30, 4star ships were of 5 star level (arnd 5 of 40 cabin per vessel) ---30*5= 150 5 star cabin in 4 star cruisemainly appealed to ppl who hav travelled in 5 star b4 bt wants something different/where 5 star is nt goin this yr

  Major difference b/w 5 and 4 star- dining arrangements- 5star- one table reserved for entire

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meal and more personalized services compare to 4 star

  Prices

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Cruise

Peak Season

Off

Season

Luxury QE2 Cunard Countless and Princess

$ 3000-15000 for 13 days $1700-6500

$2400-12000 for 13 days

  For 20 yrs prior to 1990, the luxury segment had grown avg compounded rate of 10/yr   Portion of this industry---supply chain driven   IN 1990cunard90% 1990cunard90% of occupancy, occupancy, out of all passenger, some 65% paid full prices   By late 1991it 1991it was apparent that industry capacity was exceeding demand---Iraq war

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effected companies with Europe and Mediterrarean Mediterrarean traveldiscounting and price promotion were employed in luxury and premium sector to fill empty cabins Cunard Marketing and Marketing Communication

 

  Cunard successcorporate successcorporate culture which defined the manner in which both ship operations and

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marketing communication were executed.

  ELEGA ELEGANCE NCE and EXCELENCE should dominate all other things   In the operation end---excellence end---excellence in service and avoid anything bad in tasts   For marketing---it means employing approaches intend to sell the cruise benefits and

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experience very tastefully and carefully avoiding anything whick look glitzy or hard sell

  All external marketing communication?   Its mission was to develop and maintain Cunards image and support each planning manager of 

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curises in their marketing activities.

  Half of maktng communication budget was for strategic (for developing brand or building

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distinctive image of each ship) and rest was for tactical (for bookin on particular cruise)

 

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Discussion among executives: more should b spent on improving short term sales stimulations

and sales promotions

  Marketing communication activities were budget by ships    Major communication agents

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Agents Direct Mail Mass media adv in magazines and newspaper Brochure and Travel Agent Co-operative Co-operative Spending Public Relation and Promotiona Promotionall Activities Activities

Percentage 25 35 35 5

Target Market: 

  Luxury ship: 55 yr old- top 3-5% income   4 Star- 45 yr old---top 20-25% of income   Target market individuals were very well educated, married and heavy magazine readers

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Media and Message: 

  Goal of Magzine advertisement for cruise was to create look, touch, feel of a cruise on a

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particular ship 

  Through four colour advertisement advertisement: ship, its food, its activities and its satisfied customers---

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Leslie considered it to be strategic adv for long term image of ship and their cunard identity 

 

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Direct

Marketingused as reservation deadling for curise approachedintende approachedintended d to act as

closer thus more tactical  

   

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Brochures: to

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Newpapermainly

Direct

educate potential customers and create desired image for ship  tacticall use 

Marketing: Page 4 

  Data base management vital part of targeting prospects for cruise   Mainly effective for 5 star shipalmost equal to media adv

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Budgeting: 

  The marketing and budgeting process was bottom-up   Each ships mktng planning mgr assembled the budget which included sales revenue targets and

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detailed marketing expenditure

 

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In addition to each ships

Integrating

       

budget $500,000 $500,000 was spent on Cunards Corporate Corporate Name

Marketing Communication:

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There should be common common look and feel to cunard all promotional efforts efforts

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Establishement and support of  Umbrella brand  

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Need to achieve consistent look b/w strategic and tactical marketing

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Pressure to create more sale oriented adv and promotions particularly in news paper adv and direct mailmore price oriented approach

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To try to achieve integrated mkting cmommunicationsevera cmommunicationseverall mechanics and devices

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First-

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Leslie also secured chairmans support for this

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Page plus a column size for its magazine adv. Page 6, para 4

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Corporate message, look, logo were maintained and each had invidiuval ship tailored message

create common graphics

Current Concern: 

  Main concerntactical promotion   Pressure to use more promotional efforts to support short term sales   Temptation to move away from high brow image created by magazine adv. To T o make

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adv. more action oriented

  To achive this devoted 25% of budget to direct mkting to close the sales   These mailing were design to create emergency while maitaing the canards image

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  Use integrated communication to achieve tactical goalseg one day sale undertaken s un was sent to all travel agents in five cold   On 26th Feb: mailgram Cruising to the sun

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cities, Minnapolis, Chikago, Albany, Buffalo and Rochester and NY--- more infor page 7 para 1

  One day sale was huge success---revenue ten times greater than cost u rgency and persuasiveness of price promotional adv without   Problem: How to create urgency

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detracting carefully crafted CUnard image.

     

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