Marketing Proposals for the Cruise Ship industry - Research Proposal Example

Marketing Cruises in Times of Recession The cruise industry is one of the most lucrative industries which have altered drastically over the years due to changing consumer trend, demand, and external environment. This has greatly impacted cruise companies spanning from North America to Europe. In the UK especially, the passenger population has declined, and the industry is hard hit by the current recession. For this reason, the following study proposes a new approach to marketing to revive the cruise line customers by understanding their behaviour, motivation and preferences. The study shall adopt a qualitative approach with open discussion as the basis for studying consumers, and theoretical frameworks for interpreting them. Key words: cruise industry, marketing, consumer behaviour Introduction Background While the American cruise industry has had a head start, the European Cruise Council (ECC) claims that Europe recently has become the centre of gravity for the cruise industry of the world with a record of 4 million travellers. The United Kingdom has one of the largest sources of market for European cruises which has a share of 1.3 million passengers for the year 2007 (ETN, 2008). However, with the setting in of global recession, the UK cruise industry has also been hard hit with a fall in travellers overseas as compared to other countries in Europe. Companies which deal with cruise tours have been hard hit with no option but to continue with scheduled tours. Industrialists consider these situations grave, and are of the view that they should shut down supply by cancelling bookings. Others, owners of cruise lines such as Carnival, Seatrade, and MSC Cruises especially, are of the view that companies need to continue in order to survive the meltdown (holidayinsider.com, 2009). In such hard times, it is critical that companies change their approaches to management and marketing. This is a tricky business when considering the structure and operation of cruise businesses. By and large the cruise ship industry has been one of the fastest growing industries with a brief history of growth stemming from during 1970s in the North America, even though its origin had been European. The style of service delivery, product, management and plans for tours are different from the usual customer service oriented industries. This is because the nature of the cruise industry is perishable; that is once the cruise is underway the value of the room booked ends. Cruise lines depend entirely on their passengers to generate revenue as well as operation. It is highly demand elastic which makes it one of the most volatile industries in the world. Companies, have to spend months to market and promote their cruise tours in order to secure maximum capacity on the ship. But when the economic climate is uncertain they are hard hit decline in number of passengers, loss of revenue, and some even shut down (ETN, 2009). Due to this customer-driven nature of cruise companies, its marketing approach and strategies should focus on customers and their satisfaction. Aims and Objectives The researcher proposes a study which involves the understanding of cruise customers, and how cruise companies can tailor their products and services to meet their customer requirements. The researcher aims to achieve the following objectives: - To categorize, study and understand cruise customers including consumer psychology, preferences, motivation and buying behaviours. - To understand how cruise companies go about marketing their products and services. - To find the gaps which exist between customers and companies including market positioning, niche and delivering customer value - To outline a generic marketing strategy for cruise companies to secure future customers The purpose of the above objectives is to communicate to cruise companies that they can improve on their current deteriorating situation by capitalising on alternative marketing approaches. Rationale Cruise companies spend months of preparation including building and launching ships, marketing cabins on the cruise ship through extensive campaigns, and booking systems in order to secure maximum passenger capacity before they endeavour on tours. It is only prudent that cruise companies should be focus-driven. With the current recession and wary consumers in mind, companies should use their marketing strategies as keys for reviving the demoralized consumers. This is the basis for the researchers proposed study. Research Questions By using an interpretative approach to research, the researcher proposes the following hypothesis questions as guides. The researcher considers the interpretative methodology best in this case because it would help reach the logical conclusions behind cruise line business frameworks, while the epistemology approach of studying consumers shall form the basis for devising pragmatic marketing strategies. Some of the research questions that the research aims to answer are: i. What are the nature of passenger psychology and buying behaviour which govern the marketing strategies adopted by cruise lines today? ii. Is there a gap in these marketing strategies, and if yes, how can cruise companies overcome them to deliver value to their customers? iii. Will concepts of marketing mix, customer value, and sustainable tourism apply to cruise industry? Brief Literature Review A brief literature review indicates that the cruise industry of Europe differs from that of the North American in their culture, entertainment line-up, language, and even marketing approach (cruisemates.com, 2009). This has great implications on the service delivery. Cruise companies in Europe earlier during the 20th century focussed on bargain prices for travelling from one point of the world to another. Tour qualities were categorized according to the size of the cabins, menus, and stops they made according to Dickinson and Vladimir (2007). However, as lifestyles, consumer behaviours and cruise ships have changed over the years the demand has also subsequently altered for more elaborate services on board the ship. Cruises as products have to cater to the high expectations of customers in terms of on-board activities, themes, concepts, design, and destinations in order to meet the satisfaction of consumers ("Cruise Industry Overview" 2005). Cruise companies, according to Cartwright and Baird (1999) have to devise elaborate marketing strategies to secure their customers such as loyalty clubs, customer surveys, promotion, and pricing strategies. Companies pay particular attention to the customer responses in order to tailor their services and products to their satisfaction such as offer of luxury, ease of travel, entertainment, safety and interesting destination (Cartright and Baird, 1999). Unlike other types of holiday products, cruises are highly perishable. A cruise is "a total seagoing holiday package that combines destinations and entertainment in a seamless package" and it does not necessarily be of everyones taste, according to Cartright and Baird, 1999). In order to ensure that their products stand out among a small crowd of consumers, cruise companies need to emphasize on the physical appearance (the grandeur of the ship) and marketing communication (capitalising on the customers interests) (LaBonte, 2008). However, Klein (2003) is of the view that cruise passengers are different than the usual retail service customers. They might be tight on money because they are retirees. They might passengers who have been gifted with a cruise ticket. Others are on honeymoons, and do not have the budget to overspend. Whereas on a cruise ship, the problem with the product line is that they tend to over charge because of the "added services" which at times prohibit passengers from achieving complete satisfaction. This leaves a negative impression on the customers, and liable for the long-term negative marketing of the cruise line (Klein, 2003). These aspects suggest, cruise customers are unique, and need to be catered to in a different manner. To effectively satisfy them, their expectations, requirements, and psychology must be understood before cruise companies can honestly communicate of the same through their marketing strategy. Research Design To carry out the study, the researcher proposes adoption of a qualitative approach as this is congruent with the research rationale. A qualitative approach helps one to understand, use theories and adapt it to a practical problem solving situation. Theoretical frameworks which are important for setting the structure of the marketing strategies are important for studying consumer behaviours. For this purpose, the researcher shall use secondary resources such as journals, books, articles online, and magazines to form the theoretical framework upon which primary data shall be studied. Primary data shall include a small sampling of cruise passengers who will form an epistemology study, and help in acquiring information on consumer behaviour, preferences and motivation. The researcher shall keep the sampling small for an open group discussion so that it would help the researcher delve into their psychology and why they choose cruises for holidays. The researcher however shall rely on the secondary data for studying companies trend in marketing approach and analysis. This approach the researcher feels is limiting as it will be generic and does not offer other alternative approaches for marketing adopted by some other cruise companies Practical and ethical Issues The researcher shall be conducting an open group discussion which shall be a bit difficult to achieve because of they will have to be conducted on email. This will limit the scope of face to face discussion. Nevertheless, this is a cheap option for a student, and shall still achieve the same results. Furthermore, it would help in retaining responders anonymity which is a major concern for most participants who volunteer in such discussions. Research Plan The following timeline shall be adopted by the researcher for conducting the study. November 2009: Research proposal December 2009: Survey for open discussion, tabulation and result compilation January 2009: Compilation of dissertation Chapter 1 and 2, submission February 2009: Correction of Chapter 1, 2; submission of Chapter 3 and 4. March 2009: Correction of Chapter 3 and 4; submission of 5. April 2009: Review of overall dissertation and submission after correction References Cartright, R. and Baird, C. (1999) The development and growth of the cruise industry. Butterworth-Heinemann Ltd. CLIA (2005) Cruise Industry Overview: Marketing Edition. Cruise Lines International Association. Accessed on 1 November, 2009 from: http://www.cruising.org/press/overview/ind_overview.cfm Cruisemates.com (2009) "Cruising Europe" ETurboNews. Online accessed on 1 November 2009 from: http://www.eturbonews.com/10548/cruising-europe Dickinson, B. and Vladimir, A. (2007) Selling the sea: an inside look at the cruise industry. John Wiley & Sons. Eturbonews (2009) "Cruise industry revolves around Europe May 02, 2008. Online accessed on 1 November 2009 from: http://www.eturbonews.com/2357/cruise-industry-revolves-around-europe Eturbonews (2009) "European tourism takes a beating in 2009". Online accessed on 1 November 2009 from:http://www.eturbonews.com/10855/european-tourism-takes-beating-2009 Holidayinsiders.com (2009) "Is the bottom falling out of cruise market?" Online accessed on 1 November 2009 from: http://www.eturbonews.com/7290/bottom-falling-out-cruise-market Klein, R. A. (2003) Cruise ship blues: the underside of the cruise ship industry. New Society Publishers. LaBonte, D. A. (2008) Shiny Objects Marketing: Using Simple Human Instincts to Make Your Brand. John Wiley & Sons Read More