You don't have to be king of the world to travel on these queens of the seas.

A venerable name in ocean travel, Cunard Line is the last surviving operator of scheduled luxury ocean liner service. Its fleet consists of Queen Victoria (1,980 berths) and the recently added Queen Elizabeth (2,068 berths), which took its maiden voyage in October 2010. The Cunard vessels offer transatlantic service between the UK and the US, as well as cruises in the Asia/Pacific region, the Caribbean, Europe, and around the world. Most of its passengers come from Australia, Germany, North America, and the UK. Founded in 1839, Cunard is part of cruise ship operator Carnival. Cunard, the world's oldest luxury line company, is confronted with several key issues involving its marketing and marketing communications strategy. One concerns the balance between image/positioning advertising and short-term-oriented promotional advertising/communications on behalf of each individual Cunard ship (i.e., "pull" vs. "push" communications). Related to this is the overall mix of marketing communications tools used by Cunard--media advertising, direct marketing, etc. Another issue is the emphasis in marketing communications between focus on the Cunard corporate identity and focus on the identity of the individual ships. The organizational setting is one of integrating marketing communications for the company and its products. Impacting consideration of the issues is a period of economic conditions adversely affecting sales, along with the effects of the U.S.-Iraq conflict on consumer leisure travel.

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

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

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 Vistafjord: Five star cruiser It was based in Europe and was used primarily in that part of the world Capacity of 750 passengers

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

Sea Goddess I & II Yacht-like ships for intimate ultimate deluxe cruising Atmosphere of wealthy persons 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

The Industry and Cunards 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

Cunards demographics: - 40% sailed from Europe - 55% sailed from North America - 5% from other places

60% of the companys 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 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

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 Direct mail- 25% Mass media advertising- 35% 70% strategic 30% tactical Currently 50-50

Brochures and Travel Agent Co-operative Spending- 35% Public relations and promotional activities- 5%

First dilemma
Sale-oriented format with more emphasis on price for tactical advertising? - Price = revenues - Flexible pricing policy Market changes Purchase occasions Target segments 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

Companys 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

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

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

Learning Objective
To stimulate discussion of: 1) "push" vs. "pull" marketing communications in the setting of an expensive consumer service, and 2) the balance between corporate vs. individual "products" (i.e., ships) as the focus of marketing.