Cunard Line Ltd. – Managing Integrated Marketing Communication

Cheryl (F11014)Ramya (F11045)

Abhishek (F11061)Sagar (F11100)

Swaruparani (F1116)Varun (F11120)

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

Cunard’s Ships

Unique Image and Positioning

Ship Name Category Features Sailing Locations Capacity

Queen Elisabeth II (QE2)

Luxury (5-star)

Ultra-luxury accommodations, Exquisite service

New York-Europe (Transatlantic), Caribbean. One round-the-world trip / year.

1,850 passengers

Sagafjord Luxury (5-star)

Ultra-luxury cruise, services same as QE2

Caribbean, Alaska, South Pacific (from North America). One round-the-world trip / year.

550 passengers

Vistafjord Luxury (5-star)

Ultra-luxury cruise, services same as QE2 Based in Europe 750 passengers

Cunard Countess Premium (4-star)

‘Casual’ cruise, Destination-oriented rather than on-board services

Well-known Caribbean ports 800 passengers

Cunard Princess Premium (4-star)

‘Casual’ cruise, Destination-oriented rather than on-board services

Europe, Mediterranean 800 passengers

Sea Goddess I Luxury (5-star)

For ‘Intimate’ ultimate deluxe cruising, formal ‘Wealthy’ atmosphere, little on-board entertainment, Very Expensive

6 months Caribbean, 6 months Europe Only 58 Couples

Sea Goddess II Luxury (5-star)

For ‘Intimate’ ultimate deluxe cruising, formal ‘Wealthy’ atmosphere, little on-board entertainment, Very Expensive

6 months Orient and South seas, 6 months Mediterranean

Only 58 Couples

• 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)

Year Cunard Luxury Segment (Projected Boardings/year)

1991 1,60,000

1992 1,72,800

1993 1,86,624

1994 2,01,554

1995 2,17,678

Integrated marketing toolsDirect Mail : 25%

Mass media advertising (magazines & newspapers)

Brochure & Travel agent co-operative spending

Public Relations & Promotional activities

Direct Mail

Pros• Used primarily as the

reservation deadlines approached.

• Intended to act as a ‘closure’

• Orientation was tactical

Cons• Unpredictable• Long lead times –low

response

Advertising Magazines• To create ‘look, touch and feel’ of

cruising• A strategic activity• Oriented to maintain & build long

term image & identity• Advertising appeal to emotions

and mindNewspapers

• Tactical marketing• To create immediate or near

term inquiry and sales

Brochures and travel agent

Brochures• To educate the potential

customer • To create desired image for

each ship

Travel agent• Understand the mindset of

customers and suggest the best option

• Can provide insight on service – safety/security.

Public relations

Pros• Cost effective way to reach the

market• Can use independent &

objective people to endorse the brand

• Higher credibility compared to advertising

• Makes advertising more visible – cuts through media clutter

• Significant word-of-mouth• Circumvents customer resistance

to marketing communications

Cons• Lack of control over media• Media time / space not

guaranteed• Difficult to integrate brand

tag lines / slogans• Evaluation metrics &

procedures not standardized

Promotional activities

• usually tactical actions, providing

• customers incentives to buy within a particular time,

• or to buy larger than normal amounts,

• or to try a new category or brand…

• Sales promotions appeal to pocket - give that extra reason/value to buy

Impending Organizational Alignment

Ships were to be regrouped according to type of cruise or 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