Marketing Strategy of P & O Cruises - Case Study Example

P & O CRUISES Introduction P & Cruise is a leading Cruise line based in the UK. It joins with Carnival Corporation making them two of the most known and most successful organizations in the UK. The company operates in more than 90 countries reaching more than 225 destinations in these countries. The company is also proud of operating more than 6 cruises including Arcadia, Artemis, Aurora, Oceana, Oriana, and Ventura. It records a high number of passengers which averages more than 2050. (Allison and Jude, 1997) This success has been achieved through a constant plough back strategy which has ensured constant investment and improvement of the conditions of the ships and target destinations. It has followed marine environmental rules closely to ensure that there is minimal marine pollution resulting from its operation. It is seeking to expand by buying in and merging with other companies to provide quality services to its customers. (James et al., 2001) Market challenges the company is likely to face in the next 12 months In its operation, P & O Cruises has used the best market strategies to reach its customers in all parts of the world. It success in marketing has been one of the pillars that have promoted its success. It has put into consideration its products and services in relation to the price it charges. In its marketing strategy, the company has provided products aimed at segmentations in the market. It has different packages aimed for individuals or for the whole family. Through effective promotion strategy, the company has been able to become a leader in the market. (Linda, 2000) In the next 12 months, the company will be faced by various marketing challenges which may affect its operation. Its success in marketing seems threatened by some factors that are beyond its control. As per PESTEL analysis, these problems can be classified in different categories which interact to influence the environment under which the company operates. The political and legal environment is very important in the operation of any business. The political environment influences the environment which further determines consumer confidence in the business. One of the challenges that the company is facing is political instability. It will be difficult for the company to guarantee its customers safe destinations with the current wave of political instability that many countries are facing in the world. Political instability in most tourist destinations especially in Africa and Middle East is a big challenge that the company has to overcome. With such instable political environment, many people will not prefer to stay on board for a long time and hence long distance cruising will be seriously affected. The rise of pirates in most waters especially around the Indian Ocean and other oceans poses big obstacle for the business. Many of these pirates like those in Somalia waters are due to political instability. Restoration of political stabilities in many areas of the world will be very instrumental in ensuring that the company can expand its destinations and hence provide more destinations to their customers. This is an aspect of innovation and provision of new packages which is an important marketing strategy. The political and legal procedure involved in the upgrading of the port facilities also poses a great challenge for the company in a bid to carry out a proper marketing strategy. Many of the ports facilities are quite dilapidated and there is need to have quality ports if the company will have to market itself competitively. Pegging it success on provision of quality services to the customers, the company is faced with the challenge of ensuring that it keeps to the promised standard amid dilapidated facilities. In many countries there are government policies and procedures that govern the cruise industry that makes it hard for the company to operate. These policies are very crucial in determining how the company packages its products and services. (Robert, 1999) In the economical environment there are a number of challenges that are going to affect the way the company markets itself in the world. With such a wide operation network, its operations will be affected by several microeconomic changes that are taking place. One of the most economic challenges the company may face in the next one year of its operation will be crises in the government. These crises determine the economic environment under which the company will operate. Internal stability in the government is very crucial in determining the stability of the environment under which the company will conduct its business. Crisis in the government affects economic policies which ensure that there is an enabling environment for the business to market itself. (Stacey, 2000) Another economic challenge that the company is bound to face is increasing fuel taxes. These taxes may affect the pricing policy of the company which at times may lead to customer dissatisfaction. With the crisis in the Middle East seemingly not ending, there will still be increasing oil prices and the trend shows that the prices are set to increase. This means that the company many be forced to raise its prices in the future in order to operate at a reasonable profit margin. Fluctuating exchange rates is another economic challenge that the company will face in the future. The pricing policy is so much determinant of the stability of the exchange rate and with the current trend in major currencies, the company may be forced to vary its prices from time to time. (Jolene, 2000) In the social environment, the company may face marketing challenge since the change in fashion may greatly affect demand. The company will face a challenge of making packages that keeps with the current changes taking place in the social market. World fashion is changing fast and consumers are not paying loyalty to one brand anymore. With increased competition, a company is bound to stay in the market depending on how it manages to create a competitive edge over other competitors. The change in social activities is another challenge that the company is bound to face in marketing. Cruise touring as a social activity may soon be overtaken by another activity depending on the changing market demands and fashion. The current social and security threat posed by terrorism is another challenge that will affect the marketing strategy of the company. (David and Joachimsthaler, 1999) In the technological environment, the company will face challenges in ensuring that it remains up to date in provision of its services according to the changing technology. It will face a challenge of marketing itself as having most competitive port terminal facilities and other support facilities. The changing technology requires that even on board, a customer can go on with their normal life. This will require installation of up to date communication and information technology equipments to ensure that customers are as comfortable as possible. Unless the company achieves all this, it will find it difficult for it to market itself effectively. The company will need to undertake massive installation of the above equipments in order to make it the leading choice for all customers. (Carlson, 2003) In the legal environment, the company will be faced by a challenge of new legislations that are coming up due to changing environment. There are new stiff legislations which are coming up due to fight on terrorism and due to other issues which may have negative impact on the industry. The changing environment will also be challenge to the operation of the company. Climate change has brought about changing environment which may lead to making some changes in the operation environment. The change of wind patterns in the ocean may be a challenge in the future. Growth strategies The company must come up with marketing strategies that will enable it create a niche in the market. It must carry out market research data in order to come up with potential markets. It must ensure that it comes up with new strategies in order to penetrate new markets. After settling in the new market, it must expand the range of products and services offered in the market and later diversify the range of these products and services. (Ramanathon, 1992) The first important approach the company can use is market penetration. Market penetration can be achieved by ensuring that there is more advertisement order to create customer awareness. Already the company is using any available means of public advertisement. It uses newspapers like Metro, The Times, The New York Times, The Telegraph, and others. It also carries direct mailing to reach more potential customers. It uses magazines around the world to place advertisement and TV channels like ITV, Channel 4 and BBC and an assortment of other Radios. However the company should carry out more publicity in order to ensure that it penetrates as many new markets as possible. In line with this the company must come up with proper market penetration strategies. Already it has proposed merging with other existing lines or buying them in order to penetrate new markets. This can be used as a good strategy since it will enable the company to acquire dominance in other markets which would have been otherwise difficult for them to penetrate. In order to ensure that the company satisfies its customers it will need to expand its range of products. This will be necessary in order to ensure that there is more variety for the customer to choose from. The company is bound to achieve product expansions when it launches the Ventura in April 2008. This will be a super ship which will increase the carrying capacity by more than 30%. This will ensure that the company can take in more people on board which will enhance the concept of creating a competitive social activity as part of marketing approach. Ventura will come with the most stylish and luxurious holiday packages to various destinations around the world. (Gloria, 2003) Product expansions will come in line with the need to install new technologies in the market which will ensure that it provides quality services coming along with the expanded products. Product expansion will be also requires developing new packages which will ensure that it targets different segments of the population. This means it will have to come up with products from different age categories and create different areas of specialties for these ages. Already it has in place family packages but there is need to go further and introduce more variety in the services. To ensure that there is market newness, the company will also need to expand its market. This is important to ensure that it increases the size of the company in order tot have the lowest break even points in the industry. The company has already expressed its interest in Asia and European markets. This will ensure that the company has more destinations for its customers and at the same time it will tap more potential customer in these new destination who may interested in visiting the old markets. As mentioned earlier, the company has show a desire to merge with other existing companies in order to make it easier for it to penetrate new markets. Due to economic development and rise of a large middle class, Europe and Asia are particularly new markets that the company should be targeting but also it should ensure that it also operates in other markets in Middle East and other places in the world. After expanding in new markets, penetrating the markets and expanding its products, the company will also be required to create diversification in the range of products services, offers and other aspects of operation. This will be in line with offering high quality services to ensure customer satisfaction. Diversification in price will mean that the company will offer more competitive prices from its current range of £99 to £9046. It should also introduce a variety of booking discounts and perhaps look into providing free booking for children. The methods of payment also need to be diversified to make it easier for customer to make their payments. Currently the company provides various means of payment like post, credit cards, and others. The company must come up with new promotion strategies. The company has been carrying out promotions on the packages to ensure that customers get the packages at reduced prices. In the promotion strategies the company should embark on training its marketing staff in order to gain more skills on sales. It should also think of giving incentives to the marketing staff in order for them to target more customers. This means that the promotion strategies will be aimed at the customers and also the staff on the company. The most recommended strategy for the business is product expansion coupled with diversification of services and products. This will ensure that there is increasing application of new technologies in the provision of services and products for the company. These strategies will also ensure that the company acquires new markets and at the same time provides new and diversified product. The justification of this double approach strategy is important since acquiring new markets without provision of new and diverse products and services is almost the same as keeping loyalty to the old market which can also be lost in the long term if new products are not put in place. (Anon, 1997) Expansions of products and diversification As has been mentioned the company is very young in the industry having existed since 2003. This means that in order to beat other competitors it will have to provide new products from the existing ones in order to attract and keep new and old customers. This will definitely be achieved through building of new cruise lines and acquiring of new ships to offers different holiday packages. This translates to designing different new packages. (Kim, 1999) The company has responded very well in this case through Ventura cruises. This is the segment where the company needs to stress more in its product expansion strategy. Ventura cruise is the largest ever built cruise ship aimed for British markets. It was specifically designed to offer family packages. Due to its large size and carrying capacity, the Ventura is able to offer superior services than other and hence is preferred by many. It also has rooms that are designed for family settings. This cruise offers more destinations in that world that other cruise lines. This is to be reinforced by the expected arrival of Super Ship Ventura in April 2008 which everybody is sure will revolutionize the cruise industry in Britain. With a carrying capacity of more than 30 percent than the original Ventura Cruise ships, this new ship will definitely be in a position to provide more efficient services than others. It will be expected to offer passengers more comfortable holiday vacations to various destinations than the existing ones. These strategies can be achieved by designing various objectives that can be attained within a specified time. These objectives must be in line with marketing strategy since they will be aimed at reaching customers. The following objectives can be achieved by the company in line with its products expansion strategy. (Bill, 1998) (i) It must be able to offer competitive prices in line with its operation. Currently the company is offering a competitive price within the range of £99 to £9046. This illustrates the variety in prices that the company is able to offer. The objective of Ventura in fulfilling customer satisfaction should be to offer the most competitive price for its service. This will ensure that people find value for their money in line with the products offered. Offering discounts is another way that can be used to enhance price competitiveness for the company.(Benady, 2005) (ii) Training its staff in order to offer quality services to ensure that it meets the expectations. Currently the company has in place strategies which ensure that it trains its 1200 crew and officers in aspects of operation. It carries out a recruits and training to mould the personality of its service staff. There should be a customer care program which ensures that maximum attention is paid to the customers and both the staff and customers are satisfied. The company has already put in place strategies which have ensured that customer service is developed for passenger’s satisfaction. (Thomas, 1998) (iii) Targeting more destination places in order to offer variety of products to the customers. The company is already operating in more than 27 channels in many parts of the world in Europe, Caribbean and other areas. This also ensures that the cruise links with coaches, car parking and 3 different fly cruises. This is diversified products and services which need to be expanded further. (iv). Enhancing technology in its operation to ensure that customers feel more comfortable while on board. This includes providing internet research in the cruise and also its use in booking. It also means providing more online and phone services while on bond. With the current trend of achievement in Ventura, the above objective can be achieved With a 28% sales increase this means the cruise can achieve more and meet the set objectives. (v). Increase the percentage of customers in the vacation market and increase repeat customers. This will be achieved through diversified marketing and effective promotion strategies. (vi). Design more promotions in line with keeping the “Fun Ship” theme and involve more entertainments for customers. This will ensure that customers have a memorable cruise experience. What can be done to achieve this? There must be proper mechanism put in place in order to achieve the above objectives. Proper advertisement will be very effective in ensuring that the company meets the above objectives. Marketing should be followed by physical presence of the company in the market. Hence it must ensure that it penetrates the new markets even before advertising its services. At the same time it will need to carry out survey in order to establish what the market demand more in order to be able to provide services tailored to their demands. Conclusion For the company to be ahead in the industry, it has to come up with new marketing strategies. This will be achieved by ensuring that it targets new markets in order to expand its customer base. The company must come up with new packages and diversify its products and services in order to ensure that customers are satisfied with its services. Appendices (i) Growth Strategies Reference: Allison, M. & Jude, K. (1997): Strategic Planning. New York: Wiley Anon, W. (1997): Export Packaging management, Business Review, Issue 2 Benady, A. (2005). Global Selling Strategies; Financial Times, February 2005 Bill, B. (1998). Strategic marketing for digital; Chicago: Lincolnwood. Carlson, A. (2003). Globalization and entrepreneurship; Policy Review, March 2003 David, A. & Joachimsthaler, E. (1999): Branding. Harvard University Press Gloria, B (2003). Managing Product Development; Cambridge: Harvard Press James, C., Barbara, D., & Terk, N. (2001): Steps in Strategic Planning. New York: Wiley. Jolene, P. (2000). Goals and Strategists in Marketing; Oxford: Oxford University Kim, C. (1999). Management Strategies; Journal of Business Strategy, Vol. 5(9): 89-100 Legal Information. Retrieved from, http://www.pocruises.com/pocruising/booking-conditions.aspx on 2nd February 2008 Linda, D. (2000). Braking for Growth; Retrieved from, http://www.echoinggreen.org/resource/orgdev/carr1.htm on 2nd February 2008 P & O Cruises. Retrieved from, http://www.pocruises.com/pocruising/Home.aspx on 2nd February 2008 Ramanathon, K. & Larry, P. (1992): Management Control. New York: Wiley Robert, D. (1999). Managing non-profit organization; Westport: Greenwood Press Stacey, C. (2000). SWOT Analysis. Journal of computers, Vol. 22(1): 34-56 Thomas, D. (1998). Developing new markets; London: Chapman & Hall. Read More