1. Managing Integrated Marketing Communications
Cunard line , Ltd.
Managing Integrated Marketing Communications
MKT 642
By:John Dehmardan

2. Background Subsidiary of Trafalgar House
Cruise and steamship business since 1840
Advent of jet travel
Luxury vacation business

3. 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

4. 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

5. 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

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

7. 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

8. Sea Goddess I & II
Yacht-like ships for “intimate” ultimate deluxe cruising
Atmosphere of wealthy person’s yacht
Capacity of only 58 couples
$ 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

10. Queen Elizabeth II

11. Queen Victoria

12. Coronia

13. The Industry and Cunard’s 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
Cunard’s demographics:
- 40% sailed from Europe
- 55% sailed from North America
- 5% from other places

14. The Industry and Cunard’s Segments
60% of the company’s 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

15. The Industry and Cunard’s Segments
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

16. 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

17. Cunard Marketing and Marketing Communication
Direct mail- 25%
Mass media advertising- 35%
70% strategic
30% tactical
Currently 50-50

18. Cunard Marketing and Marketing Communication
Brochures and Travel Agent Co-operative Spending- 35%
Public relations and promotional
activities- 5%

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

20. First dilemma 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

21. Company’s 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
Not a very good idea

22. 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

23. 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

24. Happy holiday