Marketing Plan for Carnival Cruise Lines Marketing Plan

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Carnival Corporation (NYS: CCL), which is formally known as Carnival Cruise Line, operates the largest cruise line in the leisure cruise industry and the world. Carnival Cruise Line was founded in 1972 by a Jewish immigrant Ted Arison and today is today managed by his son, Mickey Arison. Carnival continues to be the most aggressive marketer and industry consolidator of the travel cruise industry with eleven brands supported through multiple acquisitions over the last twenty years. As of today, the company operates 97 cruise ships with passenger capacity of 180,746 distributed across its range of eleven brands that operate in North America, Europe, Australia, New Zealand, Asia and South America. Carnival's cruise brands include the following; Carnival Cruise Lines, Princess Cruises, Costa Cruises, Holland America Line, P&O Cruises, AIDA Cruises, Cunard Line, Ibero Cruises, Ocean Village, P&O Cruises Australia and The Yachts of Seabourn. Carnival also owns two of the more dominant cruse operations companies in the Alaska and Yukon Territory of Canada, Holland America Tours and Princess Tours. As of the close of their latest fiscal year, Carnival reported $13.1B in revenues and $2.1B in Net Income. For an analysis of the company's financial performance using five years of income statement data, please see Table 1: Carnival Corp. (NYS: CCL) Income Statement Analysis. What is remarkable about this company is that it has continued to attain profitability even in the midst of a global economic recession. For an analysis of their key financial ratios, please see Table 2: Carnival Corp. (NYS: CCL) Ratio Analysis. This analysis indicates that Return on Assets (ROA) continues to flat line and gradually drop over the last five years, and Sales-Per-Employee over the last two years has seen a gradual drop. These indicate that greater efficiencies are needed within operations to increase the Return on Assets (ROA) and also more eclectic and higher-margin excursions and tours for clients to increase Revenue-Per-Employee. These are concerns that need to drive the development of an effective marketing plan that will increase asset utilization efficiency and higher profitability at the same time.

Carnival is the current leader in the cruise industry, enjoying a market share exceeding 50% with numerous growth opportunities and continued expansion anticipated. The company is ideally positioned to continue dominating cruise vacations, and the shifting demographics of baby boomers over 50 who have higher discretionary incomes also is proving to be a powerful catalyst for future growth. The global economy has been struggling for nearly two years but Carnival customers have continued to cruise. After a dip in revenues in 2008, increased travel volume (and cruise purchases) are anticipated for the next two years. Carnival has four new ships on order. They will be joining the fleet in 2013 and 2014. Carnival is developing plans to expand its international offerings, particularly in Asia. Carnival's market position of its Fun Ships at the low-end of the market has led academic researchers to calling it the "Wal-Mart" of cruising (Kwortnik, 2006) which other researchers contend does not have an entirely positive connotation (Dev, 2006). Carnival plays fast and loose with specials and pricing programs at the low-end of their Fun Ships line and this has connoted, perhaps at times unjustifiably, that the quality of these cruises is not as exceptional as they could be. The price-quality relationships in services offerings are often seen as a viable perceptual cue by customers of the value that a service delivers over time (Boyle, Lathrop, 2009). As a result, at the low-end of the Carnival market, the company enjoys elasticity of demand based on aggressive pricing and exceptionally high sales rates even in the midst of a recession, yet also battles price erosion and a negative connotation to their brand (Dev, 2006).

Carnival needs to create a unified marketing strategy that integrates the strongest and most relevant benefits and positioning factors of each of the eleven brands provide, while also alleviating the reputation of being cheap in terms of quality at the low-end of their product line. There is a difference between cheap and low-cost yet high quality (Boyle, Lathrop, 2009). Carnival, through an integrated marketing communications strategy, needs to strike that balance and drive up the occupancy of their cruises to increase profitability and greater returns on their assets.

There are however many challenges to attaining this strategy goals. First, there is the continual factors of a global economic slowdown, increasing labor costs, the instability of fuel costs, and the threat of terrorism and piracy. There is also the threat of new environmental regulations and tax implications in the nations they have operations bases in. Carnival's main objective is to attain greater market share, both by encouraging and evangelizing cruising as a viable vacation alternative, and through marketing strategies and the use of analytics, raid their competitor's customer bases for the most profitable customers immediately. Striking a balance between sustainability and green or eco-tourism on the one hand and highly unique, tailored travel programs on the other. Carnival is successful in a down economy because it is slowly embracing the concept of first creating an experience for the cruising customer and enriching it with unique excursions and opportunities to add to the experience as the customer chooses either on the ship or previously while planning the cruise (Vogel, 2009). The combining of unique experiences that are authentic creates a very strong marketing message for anyone selling into the baby boomer market (Hudson, 2010). For Carnival, they need to strike a balance between the breadth and variety of shore excursions which according to the 2009 annual report, generate 34% of company profits (Carnival, 2009) while at the same time working to ensure these experiences are highly authentic and real is critical to their future success. To attain these objectives, Carnival has taken a multifaceted approach which includes increased the engagement of employees in planning future product development. Brainstorming and Voice of the Cruiser (Carnival, 2009) programs have also been put into place to better understand the needs of customers. With the global economy showing signs of rejuvenation, Carnival is well positioned to take advantage of emerging growth that will be fueled by the demographic shift to more affluent baby boomers taking vacations and experimenting with cruising, often for the first time. Carnival continues to be one of the most evangelistic companies in this industry, seeing a definite correlation of their ongoing marketing efforts to the results achieved with attracting couples and families who have never been on a cruise before (Carnival, 2009).

Situation Analysis

An assessment of Carnivals internal environment, customer environment, and external environment are all addressed in this section of the marketing plan. The internal environment specifically concentrates on a review of current goals and objectives, marketing strategy and performance, organizational resources assessment and a review of the cultural and structural issues of Carnival today. The customer environment and external environment included the competitive landscape, economic growth and stability, political trends and socio-cultural trends are also included in this section.

Internal Environment

Carnival's eleven brands each have different goals and objectives as each has a significantly different brand image and experience they are marketing (Kwortnik, 2006). The flagship brand, Carnival Cruise Lines, is oriented more towards price-conscious consumers and seeks to create an experience of affordable luxury. The second, Princess Cruises, is designed more for the mainstream demographics of 34- to 45-year-olds who view cruising as a viable vacation alternative. This specific brand has also been very successful with the 45 -- 55 age demographic with their offerings of cruises to Alaska and throughout the Pacific Northwest. Carnival acquired Costa Cruises earlier in their history to gain greater market share in Mediterranean and Caribbean ports that could accommodate smaller ships. Costa has an excellent reputation as a cruise operator serving the smaller ports of these regions and has created a unique sailing experience that appeals to younger consumers new to cruising (Dev, 2006). The next brand is unique and differentiated by its strong market share in the Pacific Northwest, Alaska and European cruise markets. Holland America is considered a premium brand in the Carnival product portfolio and as a result caters older, more affluent customers, the majority of which are over 50. The focus one educational and insightful tours and excursions with little if any physical exertion is the focus of the Holland America brand, which has high level of loyalty in its core markets. P&O Cruises, AIDA Cruises, and the Cunard Line all are mainstream brands that concentrate on the core demographic segments of the market (Dev, 2006). Since acquiring each of these, Carnival has created a unique geographic and experience-based marketing position for each of these brads. This is an area of the product strategy that illustrates how an integrated marketing communications strategy is needed for more effectively coordinating marketing strategies across all brands. Ibero was formed in 2007 through a joint venture of Carnival and Orizonia Corporation. Ibero serves the Spanish markets throughout the Mediterranean and South America, and operates… [END OF PREVIEW] . . . READ MORE

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Marketing Plan for Carnival Cruise Lines.  (2010, August 7).  Retrieved October 17, 2021, from

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"Marketing Plan for Carnival Cruise Lines."  August 7, 2010.  Accessed October 17, 2021.