Cunard Line Ltd. Managing Integrated

Marketing Communication

Group 7Abhishek Navale | Anish Barjatya | Jyothish K Jose

Lipika Agarwal | Samaksh Chhabra | Shashank Kothari

ObjectivesMaintaining a balance between strategic

and tactical marketingTo achieve the right integrated marketing

mixDeciding between focusing on Cunard’s

brand image or the identity of individual ships

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Company Background

• Subsidiary of Trafalgar House, London based conglomerate

• Founded in 1840• Is now in the Luxury vacation business• Owns 7 ships. 5 in luxury category, 2 in

premium category

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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

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Industry and Cunard’s Segments• Cruise Industry: 4M boarding/Year• Luxury Segment : 8% Market Share overall• 10 luxury “5-star” ships worldwide; 5 with Cunard• 30 premium “4-star” ships; 2 with Cunard• 4-stars appealed to people who had travelled on 5-

stars and wanted a different experience• Due to recession and war, low capacity utilization;

heavy promotions and discounting in late 1991

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Customer Profile• User profile: Customers in their forties &

fifties, refined, very well-educated, rich, married, wealthy and heavy magazine readers

• Appeal was luxury experience & on-board entertainment

• Europe – 40%, N. America – 55%, Others – 5%

• 95% customers booked through travel agents

• 1990, 90% occupancy, 65% customers paid full rates. Now in 1991 , capacity exceeding demand

Inco

me 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

Cunard Marketing and Budget

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Direct Mail 25%

More tactical

Mass media advertising in magazines & newspapers

35% 70:30 (Strategic :

Tactical)

Public Relations & Promotional

activities5%

Tactical

Brochure & Travel agent co-operative

spending35%

(26.5% - Strategic, 8.5% -

Tactical)

•Sell the cruise benefits and experiences very tastefully

•Avoid anything in bad taste

•Excellence and Elegance

•Develop and maintain Cunard image

•Support each of the Planning Manager

Ap

pro

ac

h

Tactical: 50%Budget : $10

mn

Strategic: 50%

Budget : $10 mn

Awareness Comprehension Conviction Order Reorder

Effectiveness of Communication Tools

Advertising and Publicity Sales PromotionPersonal Selling

Need to reduce the percentage of mass media advertising in magazines and newspaper for tactical campaigns

Also budget for direct mail and promotional activities must be increased for tactical activities. Also reorder an important component in cruise industry (pg 5, line 1-2)

Reordering is better through direct

marketing/Sales

Promotion

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Existing Organizational Structure

Leslie

QE II Vistafjord Sagafjord Cunard Countess

Cunard Princess

Sea Goddess I

Sea Goddess II

• Each ship’s marketing planning manager had a budget for his ship• Leslie had created a common graphics approach to achieve integration• In magazine advertising, the corporate message logo and look were maintained and each ship had an individually tailored content

New Organizational Structure

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Leslie

Elegant 5 star crusing

QE II

Ultra deluxe crusing 5 star

Vistafjord Sagafjord

Less formal and less expensive

Cunard Countess

Cunard Princess

Yacht- like

Sea Goddess I Sea Godess II

• Each category would be oriented to a target market and would have a distinctive appeal• One executive would be responsible for both strategic and tactical planning for each group

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Old Structure

• Pros• All the ships under one umbrella brand of Cunard

• Consistent look inthe message used in both strategic & tactical communications

• Cons• Competitors are paying more attention towards marketing individual ships, something which is diificult

New Prospects

• Pros• Each business group would be able to focus its resources on a particular target market and with a specific product concept

• Travel agents would know each ship or group distinctively

• Cons• Dilution of the overall Cunard Brand developed over the years

• Less central control over the specifics of marketing communication

• Marketing integration would be difficult to maintain

4 star vs 5 star

Market share

• 5 star- 8%; Cunard has 50% Market Share

• 4 star – ?; Cunard has 6.67% of Market Share

Income level

• For 5 star, top 3% of income, people above 55

• For 4 star, top 20% of income, people above 45

Marketing

• For 4 stars there was a trend towards more promotional marketing activity

• Direct Marketing better for 5 star ships than 4 star ships

Size

• 30 ships of 4 star • 10 ships of 5 star

Cost

• 4 stars were about half the cost than 5 stars

Experience

• Different experiences on both ships

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Recommendations

WH

AT FOCUS ONLY ON

LUXURY SEGMENT – SUPPLY BASED

Remove 4 Star Category

SCA – Focus on luxury

WH

Y Luxury Vacation BusinessCovers all geographies & capacitiesAnnual Growth Rate is 10% for luxury segment till 1990. Cunard has 50% Market Share in Luxury. Only 6.67% in PremiumIncome group is largely immune to recessionCan grow the segment

HO

W

Upgrade 4 star ships to 5 star shipsThe discounts and promotions should happen personally rather than through mass mediaUse Travel agents to spread word about the image of CunardTactical through direct marketing, Strategic through magazines

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ALL THE BEST FOR MID TERMS