Marketing Communications Planning For Cunard - Case Study Example

Marketing Communications Planning For Cunard Line Ltd. Executive Summary Cunard Line Ltd., after being in the business for the past 150 years, is facing new challenges – in the form of competitor’s aggressive advertising and changing perceptions about leisure and travel. The well-preserved corporate image, that was earlier sufficient to complete occupancy, is no longer as potent. It is felt at Cunard that more attention and importance should be given towards tactical communications geared towards getting customers. However, this is also viewed as a threat to the corporate identity and brand image of the organization. Another dilemma facing Cunard is weather to use an approach that focuses on the brand “Cunard”, or to promote individual ships. Promoting individual ships will benefit the organization by making the customers aware of specific services, and hence translating this awareness into sales. This again is viewed as a potential threat to the overall corporate identity of Cunard – the possibilities of segregated communications working non-synergistically, is very true. An analysis of the market, customers, and intermediaries, and of the budget allocation reveals that Cunard should make a move towards more tactical communication-mix. While it should use an integrated approach in all its activities, it is also desirable that individual ships should continue to feature prominently. An innovative approach to direct marketing, sales promotion, and customer interactions is also advisable. Introduction Cunard Line Ltd. has an illustrious heritage of providing travel services worldwide for the past 150 years. Once singled out as an essential means of travel, this shipping line has now re-positioned itself as a luxury vacation service provider. With its fleet of five 5-star luxury ships including the famous QE2, and two 4-star premium ones, Cunard is the market leader in this section of the industry. With only 5 other ships in the category, that too belonging to different owners, Conard is able to claim 0.12 million boardings per year. The Present Marketing Communication Objectives and Strategies This success has been rightly attributed to Cunard’s corporate culture that emphasizes upon high quality operations and service, as well as on preserving an elegant corporate image through advertising and direct mail. From spotless on-board services, (that include services of elite valets, personalized accommodation for individual tastes and preferences, and loads of entertainment, shopping and fun), to the high-brow, glossy market communications - everything is streamlined towards creating a quality brand. Till the 90s, Cunard was managing its communications so as to enhance the overall corporate identity, while distancing itself from hard sell approach taken up by its competitors. It was using an array of communications tools, integrated in appeal and look – judiciously developed by Leslie and her team to forward the communication objectives. By 1992 it was realized that more tactical ingredients have to be utilized to ensure sales and lead generation. Leslie was facing a dilemma as the shift towards such an approach would involve appealing with price and discounts – and thus leading to a possible dilution of the painstakingly constructed suave corporate identity. This was further complicated by the imminent corporate structural re-organization that would re-align the ships into 4 groups and give greater freedom to individual group-managers towards marketing and promotion. This again was feared to generate a breakdown in the holistic and integrated marketing communications, and be replaced with a group based approach. Recommendations for Integrated Marketing Communications According to the American Association of Advertising Agencies, Integrated Marketing Communications (IMC) is “a concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communications disciplines (for example, general advertising, direct response, sales promotion and public relations) and combines these disciplines to provide clarity, consistency, and maximum communications’ impact through the seamless integration of discrete messages.” (Philip Kotler, 2000). As can be seen, Leslie has succeeded in using different types of communications with an integrated approach – the four-color ads in magazines, and the same look being maintained in brochures and direct mail letters. All the print ads extol the image of Cunard, though the newspaper and direct mail ones also emphasis upon price and create an urgency so as to induce sales. Moreover the guidelines that Leslie’s group prepared on the 150th anniversary of Cunard also asks the employees to use specific signature, logo, and images on all corporate correspondence, and promotional programs. Creating a consistency in all communications, or developing ‘One-voice Marketing Communications’ is just one aspect of IMC. The tougher challenge is to present ‘Integrated Communications’ - to simultaneously achieve targeted communication goals like building image, and also lead to some behavioral action – like trial or repurchase. (Batra R, John G Myers and David A Aaker. 2000.). This is precisely the challenge that Leslie is currently facing. But, instead of seeing it as a trade-off between the two – building image and inducing sales, or what Cuunard calls strategic versus tactical communications – the remedy should be sought in utilizing both the approaches. Secondly, the possible encroachment of individual group’s identity and thus obliteration of the overall corporate image, too can be prevented – by integrating the individual group’s marketing managers into the communication planning efforts. The communication mix used by Conard is being utilized at the cognitive level (through magazine ads and brochures to create awareness and educate the prospects), at the affective level (by creating an image of quality and elegance through magazine ads, direct mail letters, etc.), and at the connative level (by promotional activities, personal selling and price promotions). (Levidge J. Robert and Gary A. Steiner, 1961). Till now, Conard’s communication expenditure has been biased towards the first – the cognitive level. By carefully crafting magazine ads, and strategically placing them in magazines (the prospective customers were heavy magazine readers), Cunard hoped to build up awareness and liking for its ships and services. This, however was done by ignoring the other levels, especially the connative level, that help in materializing the actual sales. A look at the expenditure on the communication mix reveals that equal amounts (35%) are being spent on mass media advertising, and brochures and travel agents. Another 25% is being spent on direct mail and remaining 5% on promotional activities and PR. This break-up of expenses is per ship. An additional $ 5,00,000 is spent on building the corporate image for Cunard. This is in confrontation with the facts that maximum sales are sealed through travel agents (95%), and that the promotional activity undertaken by Conard in 1992 (the one-day sale) was highly successful. This background hints at the need for a greater allotment to be made to these two modes of communications. The travel agents appear to be providing a very useful link in the Cunard’s marketing efforts. There is a need to give more attention to the travel agents - currently Conard is spending only 5% of the overall budget towards maintaining contacts and promotions with the travel agents – though, around 95% of the bookings are materialized through them. This, by simple logic implies that a major budget of tactical communications should be targeted at these agents. Currently, Cunard is using its sales force and newspaper ads to press the travel agents towards influencing the customers. Cunard can spend some amount of the budget for targeting the agents themselves – by offering discounts, freebees, gifts and coupons – and also hard selling them through price-promotion schemes. This can be done while maintaining the corporate image in the minds of the customers through magazine ads that do not emphasize on effecting immediate sales – and leaving the task of persuasion to the travel agents. Secondly, instead of viewing PR and promotional sales activities as mundane or detrimental to the image, Cunard should shift the nature of the promotional activity – instead of undertaking hard selling through coupons and discounts, Cunard can take a more subtle approach – it can organize token talks/conferences related to cruising, destination or vacation topics; regular-customer’s get-togethers; and celebrity interactions. In addition to fortifying the elegant and classy image of the ship-liner, such occasions can be used for announcing some discounts or price cuts too. Thirdly, since direct marketing is considered largely tactical, the direct mail message can be presented as a news update letter, instead of a sales letter. Cunard can call it a newsletter and thus use it to elaborate upon price discounts, to create an urgency, and to present a persuasive case for using Cunard’s services over the competitors’. The newsletter can be used to inform customers about their chance to participate in lotteries, sweepstakes etc., and also offer them discounts for providing referrals. In this manner, Cunard’s database can be further enriched, while at the same time, the organization can also create a sense of participation in the customer’s mind – hence generating an eagerness to avail of its services. In addition to the above, Cunard must tap into the new media technologies – through TV and web advertising. The Television ads can be directed towards brand building, and showcasing the different ships while still maintaining a cohesive identity for the organization. Cunard can use the Internet for advertising through google ads (which are automated to streamline with consumer searches) as well as by building a website for itself. This website can be used for tactical communications, directly targeting customers with information on schedules, prices, and concessions. Cunard’s organizational structure, the existing as well as the new one, requires that marketing managers be made responsible for setting the revenue, sales, and the margins’ forecasts. These group managers are then made answerable to the actual returns. However, the marketing communications planning is done on a top down approach, with Leslie’s office building up the details of plan as well as execution. As a part of the integrated marketing communication effort, these individual group managers should also be involved in the decision making process. If delegation is not preferred, at least their inputs must be incorporated into the overall plan. It is these ground operatives who come in maximum contact with the customers and the crew, and are thus able to pick up moods and nuances that the top or corporate level executives might miss. Leslie’s fears about the resources being used for individual groups promotion are ill-founded, as repeatedly it has been maintained that marketing communications (as also the sales force targets, approach, and arguments to be employed by them) are completely into the hands of her own group. Instead of worrying about disintegration of the overall image of Conard, the need is for integrating the marketing aspects (that the marketing managers oversee) of the organization with the communications (that is at present, solely Leslie’s responsibility). Cunard can benefit by re-assigning the media budget eg. paying more attention to the travel agents, using TV and web ads, and newsletters. This will nevertheless involve a greater commitment to the tactical strategies. However, the tactical communications need not dilute the overall corporate image of Conard. This can be done by modifying the actual content of the tactical communication activity. Promotional sales should be carried out under the semblance of elite get-to-gathers or token lectures, and direct mails should be toned as newsletters. Cunard has to accept the fact that now not only its competitors are flexing a hard selling muscle, they are doing it in such a manner as to overload the customers’ minds with information targeted at persuasive selling. Maintaining a corporate image is just not enough – translating it into occupancy is what matters now amid the tough competition. With the change in communication speeds, and the availability of a wide variety of choices for customers, it becomes even more imperative that Conard should make a foray into hard-selling, even if its tradition do not present a precedent. It should also realize that its customers being educated, they would welcome additional information (even if its about price discounts), as they would like to base their decision on facts and not simply on emotional preference for Conard. Conclusion It is essential that Cunard is able to present a consolidated and integrated front – blending immediate benefits with the background of an elite image, and aiming for mind-share (positioning the Conard’s image high on liking) as well as pocket-share (getting customers). (Sherlekar, S. A. 2001.). While the organization is doing a very good job of promoting the overall image, it definitely requires a makeover in its tactical communications. While it is recommended that Cunard continue to promote individual ships, all communications should be loaded with the dual objective of maintaing image, and promoting sales. What is required is for Cunard to formulate a strategy that simultaneously preserves its identity and promotes the benefits/services of individual ships/groups. Also, a change in the budget allocation should be made – by spending more on elements like direct mail, brochures, travel agents promotion, PR and personal selling. But Cunard is cautioned to use these tools innovatively – so as not to dilute it’s image of elegance and propriety. References 1. Philip Kotler, 2000, Managing Integrated Marketing Communication, in Marketing Management, pp. 550-568, Prentice-Hall of India Pvt. Ltd., India. 2. Batra R, John G Myers and David A Aaker. 2000. Integrated Marketing Communications in Advertising Management, pp. 72-106, Pretince-Hall of India Pvt. Ltd., India. 3. Levide, J Robert, and Gary A. Steiner, Levidge and Steiner’s Hieracrchy of Consumer Response Model, in A Model for Prospective Management of Advertising Effectiveness, Journal of Marketing, pp. 61. 1961. 4. Sherlekar, S. A., 2001, IMC in Modern Marketing, Himalaya Publishing House, India. Bibliography 1. Marketing Communications in Management Set 6 (main), Brilliant Tutorials, 2003, Brilliant Tutorials Pvt. Ltd., India. 2. Tony Yeshin, Integrated Marketing Communications, at http://books.google.co.in/books?ie=UTF-8&vid=ISBN0750619236&id=JrAscbNarWIC&dq=explain+Integrated+Marketing+Communications&lpg=PA3&pg=PA4&sig=cs-_d82xjOMk4ojjkG9kbzO46lA. Accessed on 8th March 2006. Read More