Decision Brief Case Study Carnival Cruise Lines

The Brief Incidents, background and information Facts bearing on problem Assumptions Course of Action (COA) Communications/PR Breakout groups Intro to Leger: 5 minutes Best practices for successful market research: 10 minutes Messaging (testing ideas and messaging): 15 minutes U&As: 15 minutes Communications/PR: 15 minutes Breakout groups: 10 minutes Presentation of breakouts: 5 minutes Wrap-up: 5 minutes

Incidents: On the afternoon of July 20, 1998, MS Ecstasy departed the Port of Miami, Florida, when a fire started in the main laundry room shortly after 17:00 hrs. As the Ecstasy attempted to reach an anchorage north of the Miami sea buoy, the vessel lost propulsion power and steering and began to drift. On September 19, 1999, the Carnival Tropicale’s engine room caught fire en route from Cozumel to Tampa. While disabled in the Gulf of Mexico, the ship was struck by Tropical Storm Harvey. No crew or guests were injured during the two days the Tropicale spent without propulsion. The ship was later sold and renamed the Ocean Dream. On November 8, 2010, a fire broke out in the generator room of the Carnival Splendor and the ship lost most of its power. The ship was adrift off the west coast of Mexico. The ship was towed to San Diego. On January 13, 2012, the Costa Concordia, operated by Costa Cruises (Carnival subsidiary), ran aground off Isola del Giglio, Tuscan. The ship capszied and partially sank, killing 32 people. Best practices in developing a recommendation for the type of market research starts with a request. Must have involvement from Nutricia at key points in the research to make each project successful. This is how we develop our recommendations – you tell us what you need to know and how it will be used. As a business partner, Leger is sometimes involved in defining the business objective There’s a difference between doing it, and doing it well

Incidents: In March 2012, the Costa Allegra, owned by Carnival Cruise Lines’ Costa Cruises subsidiary, suffered an engine room fire and went adrift in the Indian Ocean…. After several days adrift without power, the ship was towed to the Seychelles… No casualties were reported. On February 10, 2013, the Carnival Triumph, with over 3k passengers aboard, suffered an engine room fire, leaving the ship adrift for four days in the Gulf of Mexico. The ship was towed to Mobile, Alabama, docking on the evening of February 14. On March 14, 2013, the Carnival Dream experienced an emergency generator failure while docked in port at Philipsburg, St. Maarten …. On the morning of March 15, 2013, the Carnival Legend suffered a mechanical problem with one propulsion pod while at sea. The cruise line cancelled the Legend’s scheduled stop in Grand Cayman, and returned to Tampa, FL. Best practices in developing a recommendation for the type of market research starts with a request. Must have involvement from Nutricia at key points in the research to make each project successful. This is how we develop our recommendations – you tell us what you need to know and how it will be used. As a business partner, Leger is sometimes involved in defining the business objective There’s a difference between doing it, and doing it well

Costa Concordia

Costa Concordia

! Think in terms of the Digital Space Decision Brief Question: What does Carnival Cruise Lines do to stabilize the brand position, maintain brand equity, in addition to stabilizing topline revenue in light of the current and significant multiple ship challenges? What can be done to keep current customers and drive repeat visitation / purchase? Can Carnival use service/disaster recovery to improve brand position? Can Carnival possibly consider taking competitive share at this moment? Best practices in developing a recommendation for the type of market research starts with a request. Must have involvement from Nutricia at key points in the research to make each project successful. This is how we develop our recommendations – you tell us what you need to know and how it will be used. As a business partner, Leger is sometimes involved in defining the business objective There’s a difference between doing it, and doing it well ! Think in terms of the Digital Space

Cruise Industry – Market Overview

Cruise Industry – Market Overview In 2013, the total world wide cruise industry is estimated at $36.2 billion (a 4.5% increase over 2012) 20.9 million estimated annualized cruise passengers (a 3.3% increase in 2013 over 2012) Cruise passengers by source, 60.5% North America 27.0% Europe

Cruise Industry – Market Overview 50 Total Cruise Brands 10 Brands owned by Carnival Cruise Lines 48.4% market share 5 Brands owned by Royal Caribbean (RCCL) 23.3% market share

Cruise Industry – Brand by Market Share Carnival 21.1 Royal Caribbean 16.4 Norwegian 7.6 Costa 7.1 MSC Cruises 7.0 Princess 6.1 Aida 4.6 Celebrity 4.4 Holland America 3.3 Disney 2.5 All others below 2.0 Red = Carnival Cruise Lines Blue = Royal Caribbean

Financial Breakdown of Typical Cruiser The average per passenger per day is projected to be $200.85 $152.39 ticket price $49.47 on board spending Average cruise duration 8.5 days, median duration 7.0 days

Carnival Corporation Public company (Carnival Corp & plc) Global HQ – Doral, Florida (Miami) with European HQ in Southhampton, England World’s oldest passenger cruise line Trace origins back to Peninsular and Oriental Steam Navigation Company – P&O introduced first passenger ships in 1844 Carnival is one of the two largest holding ocmpies incorporated in Panama

Carnival Corporation Initially formed in 1972 under “Carnival Cruise Lines” name, changed to Carnival Corporation in 1993 NYSE listed – CCL IPO 1987 Micky Arison and family owns 47% of company stock Provided capital for expansion through acquisition Holland America Line (1989) Seabourn Cruise Lines (1992) Cunard Line (1998) Costa Cruises (2000)

Carnival Cruise Decision Brief Business Case World’s largest cruise ship operator 48.4% global market share for Carnival portfolio Carnival brand accounts for 24 ships and 21.1% of world market share (in 2013) 11 cruise line brand 100 ships 190,000 lower berths Executive control of each brand is by geo location, Carnival Corp, North America Carnival UK, in UK (including, Princess Cruises, Cunard) Costa Cruises, rest of

Carnival Brand Portfolio AIDA Cruises, Germany Carnival Cruise Lines, United States Costa Cruises, Italy Cunard Line, UK Holland America, USA Ibero Cruises, Spain P&O Cruises, UK P&O Cruises Australia, Australia Princess Cruises, USA Seabourn Cruise Line, USA

Carnival Brand Elements Carnival was a pioneer in the concept of shorter, less expensive cruises Its ships are known for their Las Vegas-style décor and entertainment. The line calls its ships The Fun Ships, and there are a wide range of activities offered on board Its trademark is the funnel, which is red, white and blue and shaped like a whale’s tail

Decision Brief Question: What does Carnival Cruise Lines do to stabilize the brand position, maintain brand equity, in addition to stabilizing topline revenue in light of the current and significant multiple ship challenges? Define Business Objective Research Discussion Define Parameters Best practices in developing a recommendation for the type of market research starts with a request. Must have involvement from Nutricia at key points in the research to make each project successful. This is how we develop our recommendations – you tell us what you need to know and how it will be used. As a business partner, Leger is sometimes involved in defining the business objective There’s a difference between doing it, and doing it well How to Support Business Decisions Develop Research Recommendations Multi-stage research plan to take Carnival from unformed ideas to launch-ready messages

BEST PRACTICES FOR MARKET RESEARCH: IDENTIFYING QUALITY RESPONDENT TARGETS Get feedback from customers at different adoption stages. Non-cruiser, Unaware Non-cruiser, Aware Light Cruiser Heavy Cruiser Best practices in developing a recommendation for the type of market research starts with a request. Must have involvement from Nutricia at key points in the research to make each project successful. This is how we develop our recommendations – you tell us what you need to know and how it will be used. As a business partner, Leger is sometimes involved in defining the business objective There’s a difference between doing it, and doing it well

1 2 3 Platform Development New Product Launches Reputation PR / Communications Platform Development New Product Launches Reputation 1 2 3

PR / Communications New Brand or Messaging Launches Identify the need in the marketplace Find the media hook Trend towards targeted media 1 2 3 Meant for media release – there is a different set of practices that you go through when preparing the data Fail-safe approach to designing a questionnaire, know what you want to say before you design the questionnaire – this will help to find the hook

PR / Communications Reputation “What concerns me is not the way things are, but rather the way people think they are.“   A company is more than a collection of its tangible assets. It is even more than the intellectual capital of its employees. How a corporation is perceived by the public can be worth more to a company than all its other tangible and intangible assets put together. When you lose your reputation, you lose a whole lot more than your reputation.

PR / Communications Reputation % Good Opinions % Bad Opinions Reputation Score The reputation scores are based on the following question: Do you have a GOOD OPINION, a BAD OPINION, or you DON'T KNOW the following companies? The Reputation Formula: Increase compliance Crisis Management Why?

PR / Communications Reputation Increased reputation Increased comfort with taking a cruise Increased recommendation Reputation and comfort with taking a cruise with the following lines: Illustrative Data Only

Decision Brief Question: What does Carnival Cruise Lines do to stabilize the brand position, maintain brand equity, in addition to stabilizing topline revenue in light of the current and significant multiple ship challenges? What can be done to keep current customers and drive repeat visitation / purchase? Can Carnival use service/disaster recovery to improve brand position? Can Carnival possibly consider taking competitive share at this moment? Best practices in developing a recommendation for the type of market research starts with a request. Must have involvement from Nutricia at key points in the research to make each project successful. This is how we develop our recommendations – you tell us what you need to know and how it will be used. As a business partner, Leger is sometimes involved in defining the business objective There’s a difference between doing it, and doing it well

Sample Starting Point: Sources www.carnival.com www.cruisemarketwatch.com