Issues Faced by Cunard• Allotting the budget for marketing communications and branding• Maintaining uniformity in communications efforts• Finding the balance between tactical and strategic branding• Effect on branding strategy due to organizational change• Retaining current brand image and staying ahead of competition
Cunard as a Luxury Brand• Price and service diffrential between Cunard and its competitors – White Star Service• Occupies ‘upper-range’ brand level• Protected by high entry barriers, namely price• Aesthetic service dimensions – elegance, formal ‘class’ system• Known by all, consumed by few• Brand has sustained itself after creator’s demise• Threats?
Is Cunard A Strong Brand?• Queen Elizabeth II as the flagship• Providing 5 star and 4 star facilities• Different types of ships under the Cunard Brand (Big Ships eg QE II, yatch)• Effect of Cunard Brand on perceived quality• The Cunard Brand is as strong as the Brand QE II.
Brand Identity - Cunard• Inner Core - Luxury, style, service• Outer Core: – Product Scope: Cruise, Travel, Entertainment – Personality: Luxurious, exotic, fun, adventurous – Slogan: “We are not the best because we’re the oldest, We’re the oldest because we’re the best” – Culture: Very British and Proper
– Image: Suave, classy, royalty, celebrity – Price/quality: Niche market, sophisticated, High- class – Association: Wealth, elegance, style, special- occasions – User profile: Customers in their forties & fifties, refined, very well-educated, rich, married• Value Proposition: Legacy & tradition, distinguished service and sophistication
SailingShip Name Category Features Capacity Locations New York-EuropeQueen Elisabeth II Luxury (5- Ultra-luxury accommodations, (Transatlantic), 1,850 (QE2) star) Exquisite service Caribbean. One round- passengers the-world trip / year. Caribbean, Alaska, South Pacific (from Luxury (5- Ultra-luxury cruise, services Sagafjord North America). One 550 passengers star) same as QE2 round-the-world trip / year. Ultra-luxury cruise, services Luxury (5- Vistafjord same as QE2 Based in Europe 750 passengers star) ‘Casual’ cruise, Destination- Premium (4- Well-known CaribbeanCunard Countess oriented rather than on-board 800 passengers star) ports services ‘Casual’ cruise, Destination- Premium (4- Cunard Princess oriented rather than on-board Europe, Mediterranean 800 passengers star) services For ‘Intimate’ ultimate deluxe Luxury (5- cruising, formal ‘Wealthy’ 6 months Caribbean, 6 Sea Goddess I Only 58 Couples star) atmosphere, little on-board months Europe entertainment, Very Expensive For ‘Intimate’ ultimate deluxe cruising, formal ‘Wealthy’ 6 months Orient and Luxury (5- Sea Goddess II atmosphere, little on-board South seas, 6 months Only 58 Couples star) entertainment, Very Expensive Mediterranean
• Customer Profile - 60% United States passengers, rest from Europe and others parts of the world.• Target Segments – Very well educated, married individuals, heavy magazine readers. – Luxury (5-star) category: People over 55 years of age, top 3% - 5% income. – Premium (4-star) category: People above 45 years of age, upper 20% - 25% income. Year 1991 data Income 20th percentile $ 16,580 Median (50th percentile) $ 39,679 80th percentile $ 74,759 95th percentile $ 126, 969
• Market Share Expected Growth – Pre-1991 average compounded growth rate 10% – Overall cruise industry: 4 million boardings/year – Luxury segment (8% of total): 3,20,000 boardings/year – Cunard’s 50% market-share: 1,60,000 boardings/year – Growth rate decline post-1991 due to Iraq war, capacity > demand (assumption: 8% growth rate) Cunard Luxury Segment Year (Projected Boardings/year) 1991 1,60,000 1992 1,72,800 1993 1,86,624 1994 2,01,554 1995 2,17,678
Direct MailPros Cons• Used primarily as the • Unpredictable reservation deadlines • Long lead times –low approached. response• Intended to act as a ‘closure’• Orientation was tactical
AdvertisingMagazines• To create ‘look, touch and feel’ of cruising• A strategic activity• Oriented to maintain & build long term image & identity• Advertising appeal to emotions and mind Newspapers• Tactical marketing• To create immediate or near term inquiry and sales
Brochures and travel agentBrochures Travel agent• To educate the potential • Understand the mindset of customer customers and suggest the• To create desired image for best option each ship • Can provide insight on service – safety/security.
Public relationsPros Cons• Cost effective way to reach the • Lack of control over media market• Can use independent & objective • Media time / space not people to endorse the brand guaranteed• Higher credibility compared to • Difficult to integrate brand advertising• Makes advertising more visible – tag lines / slogans cuts through media clutter • Evaluation metrics &• Significant word-of-mouth procedures not• Circumvents customer resistance standardized to marketing communications
Promotional activities• usually tactical • Sales promotions appeal to actions, providing pocket - give that extra• customers incentives to buy reason/value to buy within a particular time,• or to buy larger than normal amounts,• or to try a new category or brand…
Impending Organizational AlignmentShips were to be regrouped according to type of cruiseor type of services offered:• Elegant 5 star cruising –QE2• Ultra Deluxe cruising 5 -star• Less formal, somewhat less expensive cruising (destination oriented; 4 star) –the cunard countes: and the cunard princess• Yacht-like (luxury cruising; 5-star)-Sea Godess 1 and Sea Godess 2
Pros• Executive for each group for strategy and tactical planning• Orientation towards target market• Specificity of product concept and message• Ease of understanding for travel agents
Cons• Further Dilution of Cunard brand• Resources use more for developing consumer knowledge towards individual products (groups)• Marketing communication to become less central• Difficult to integrate and maintain marketing communication for all groups and products• Might undo efforts put in last several years in integrating marketing communication.
Risks for Luxury Cruise Liners• Fuel prices• Bargaining power of Travel agents.• Changing tastes and preferences of consumers• Political scenario (eg 1991 Iraq war)• Sea piracy• Accidents
Conclusion• What are they competing against?? – Get away to Bahamas , Caribbean ; Castles in Europe.• Does an umbrella brand make sense?? – Each ship has its own ads , the umbrella brand is orphaned due to disconnect between the various ships• What is the face of Cunard Ltd? – The Queen Elizabeth 2 was their strongest point; considered the finest in the world
Way forward• Concentrate on 5 star luxury ships like the QE2• Be the pinnacle of luxury in sea cruises and don’t dilute the brand image• If the 4 star services and small ships are making profits start a sub brand which has no association with the main brand ( Like Taj group of hotels )• Or else get rid of the small ships and get ships similar to the QE2 to consolidate the position