Service Operations Management - Celebrity Cruises - Case Study Example

Service Operations Management - Celebrity Cruises Case Study Executive Summary Celebrity Cruises was founded as a shipping company in Greece, in 1989, before merging with Royal Caribbean International in 1997 to form Royal Caribbean Cruises. Celebrity Cruises provides for an upscale experience at reasonable prices with additional propositions of connection, enrichment and rejuvenation. However, given the highly competitive nature of the cruise shipping line industry, the marketing strategy employed by celebrity Cruises is, at best, indistinct since it finds it difficult to find ways of creating and maintaining customer loyalty while also working towards increasing revenues. Celebrity Cruises has an ambiguous strategy for marketing that lacks focus in attracting new customers and improving the loyalty of previous customers. First, celebrity Cruises must start by identifying clear marketing positions to source for additional potential customers. Secondly, their customer service is also failing them. Additionally, their services are getting old and need to be revitalized to attract new customers. Finally, their product also lacks consistency. To deal with these issues, Celebrity Cruises must alter its marketing strategy to place more emphasis on customer service. Pricing also requires to be changed to emphasize upgrades with added value rather than dollars off discounts. Finally, the employees need to be re-trained in customer service provision. Background The Chandris Group started celebrity Cruises in 1989 in Greece, originally as a shipping company. The company merged in 1997 with Royal Caribbean International to form the Royal Caribbean Cruises Ltd. in order for the two companies to target their particular market segments, the parent company decided to separate the two brand companies’ operations and marketing. Royal Caribbean Cruises Ltd. also operates TUI cruises, CDF Croisiseres de France, Pullmantur Cruises, Azamara Club cruises, Celebrity Cruises and Royal Caribbean Cruises (Dowling 11). “Celebrity cruises” is placed in between mass-market shipping lines like Carnival Cruise Lines and luxury shipping cruise lines like Crystal Cruises in the premium segment of the market. Moreover, Celebrity Cruises provides for an upscale experience at reasonable prices with additional propositions of connection, enrichment and rejuvenation. However, given the highly competitive nature of the cruise shipping line industry, the marketing strategy employed by celebrity Cruises is, at best, indistinct since it finds it difficult to find ways of creating and maintaining customer loyalty while also working towards increasing revenues. Problem Statement Celebrity Cruises is in possession of a marketing strategy, which is ambiguous and that has no focus on attracting customers and fumbles with increasing or improving customer loyalty. Analysis Celebrity Cruises needs to develop aspects of their operations, as well as transform them if they are to increase their market share (Vogel et al 22). First, celebrity Cruises must start by identifying clear marketing positions to source for additional potential customers. While Celebrity cruises has done a commendable job in appealing to their prospective customers, their marketing initiatives still require to be fine-tuned and implemented. Celebrity cruises needs to be able direct their efforts at marketing towards the correct market segment, which, in this case, is the multi-generational market and baby-boomers market. Baby boomers make up a large population of United States with one-fourth of the population in the US being aged between forty two and sixty in 2006 (Vogel et al 24). Celebrity Cruises is also missing out by choosing not to market to the people in the thirty to forty age bracket. While this has the ability to alienate the older crowd who like travelling on cruise ships, there will be some classy ones in this generation who are already used to dining in fine restaurants and knowledgeable in theater etiquette. For this generation X segment, Celebrity Cruises might be a better choice compared to other cruise lines. Celebrity Cruise’s customer service is also another failing area of their marketing strategy. Most complaints regarding customer service that have to do with Celebrity cruise are related to the quality of customer service before passengers embark on the cruise (Vogel et al 25). Once the clients are already on board, the customer service is excellent. Attempts to contact customer service via email or calls are normally serviced in a pedestrian manner, with Celebrity Cruise’s emphasis most definitely being on the on-board customer. They lack automated responses that could give customers the hope that they will be contacted later and when the calls do go through, the replies are inconsistent, which could be as a result of multiple customer care attendants coupled by the lack of a credible customer database. This results in the attendants failing to keep proper track of customer information. Through this, a client can get different responses to the same question. Their customer service department requires being streamlined and professionalized. Celebrity Cruises also lacks in additional activities that will be attractive to customers. While they do offer some exotic activities like drink tasting, karaoke, and bingo, which are a favorite pastime for the baby-boomer generation, it would be advisable to provide additional activities for the younger generation cruisers, for example, on runs featuring multiple sea days (Mancini 21). Most of the activities offered by the cruise line are targeted at an older demographic, and they need to come up with activities that could enhance their reputation for elegance and class. Another drawback as far as their customer service is concerned is the consistency of their product. There have been complaints regarding the inconsistencies to be found in celebrity Cruises’ product. A crucial area of concern is their food menu, which has remained the same, with the dining room menus, especially, having been the same for quite a while (Mancini 22). For repeat cruisers, the same menus can become quite repetitive and erode customer satisfaction, thus customer loyalty. They could also do with varying their entertainment in order to cater for multi-generational cruise line clients. Entertainment and activities are a central concept of the cruise line industry and, as such, require to be addressed with the objective of improving customer satisfaction and increasing value. Recommendations and Solutions The biggest challenge at Celebrity cruises has to do with its marketing strategy, with an emphasis on customer service. The marketing plan, therefore, needs to shift to a more targeted and integrated marketing strategy from one of mass communication (Fitzsimmons & Mona 54). Celebrity Cruises should build up its business by brand advertising to an integrated marketing program that builds awareness, as well as generates bookings and additional bookings within the customer segment that has been identified. This should see it move away from its current advertising that cannot justify investments made to build awareness. This strategy should take advantage of the database that is almost nearing completion (Dowling 76). The strategy should also focus on building increased loyalty among already existing clients. There are also changes required to other areas in order to support the above strategy. Pricing requires to be changed so as to emphasize upgrades with added value rather than dollars off discounts (Frei et al 39). Trade management requires to be altered to increase sales force specialization since the sales force has been dual branded for the period since the merger. This should allow increased focus on the key accounts at Celebrity Cruises. The onboard product also requires to be changed, for example, diversification of the menu, in order to reinforce and strengthen this new positioning. Problems with the customer service can be resolved via additional training of the staff and the speedy completion of the new customer database. With added respect and professionalism from the customer care attendants, then this issue will be solved. It is important to add that they could take a leaf from their on-board customer care, which is superb. For example, if one were to book an excursion trip at their excursion desk and then discover that the tickets given were meant for a different time than the one that had been reserved, Celebrity Cruises should be able to handle it with professionalism rather than just giving the client an alternative ticket. While this will solve the problem, it will not create a strong sense of customer loyalty. Works Cited Dowling, Ross. Cruise ship tourism. Wallingford: CABI, 2006. Print. Fitzsimmons, James. & Mona, Fitzsimmons. Service management: operations, strategy, and information technology. Boston: McGraw-Hill/Irwin, 2006. Print. Frei, Frances. Corey, Hajim. & Christian, Hempell. Celebrity Cruises, Inc., a taste of luxury. Boston: Harvard Business School Publishing, 2010. Print. Mancini, Marc. Cruising: a guide to the cruise line industry. Clifton Park: Delmar Learning, cop., 2009. Print. Vogel, Michael. Alexis, Papathanassis. & Ben, Wolber. The business and management of ocean cruises. Cambridge: CABI, 2012. Print. Read More