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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

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Cunard line ltd l.jpg

Cunard line , Ltd.

Managing Integrated Marketing Communications

MKT 642

By:John Dehmardan


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Background

  • Subsidiary of Trafalgar House

  • Cruise and steamship business since 1840

  • Advent of jet travel

  • Luxury vacation business


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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


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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


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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


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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


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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


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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


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Queen Elizabeth II


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Queen Victoria


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Coronia


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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


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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


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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


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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


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Cunard Marketing and Marketing Communication

  • Direct mail- 25%

  • Mass media advertising- 35%

    • 70% strategic

    • 30% tactical

    • Currently 50-50


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Cunard Marketing and Marketing Communication

  • Brochures and Travel Agent Co-operative Spending- 35%

  • Public relations and promotional

    activities- 5%


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First dilemma

  • “Sale-oriented” format with more emphasis on price for tactical advertising?

    - Price = revenues

    - Flexible pricing policy

    Market changes

    Purchase occasions

    Target segments


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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


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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


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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


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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


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Happy holiday


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