How To Build Cruise Profits

Research Paper (postgraduate) from the year 2008 in the subject Business economics - Business Management, Corporate Governance, London Business School (London Business School / INSEAD), language: English, abstract: This report examines the subject of profitable growth in the modern cruise industry by comparing the financial and operating performance and the management practices of the two leading cruise operators, Carnival and Royal Caribbean, over the twelve-year period from 1996 to 2007. During the past 40 years the cruise industry has evolved from a form of mere transoceanic transportation to an alternative vacation at sea. Despite growing at a CAGR of 7.7% since 1980, the penetration rate for the cruise industry is only 17%. In North America alone the cruise industry generated $20.6 billion in 2006. By comparison, the lodging industry in North America generated revenues of $133.4 billion during the same year. The cruise industry remains a relatively young industry. This is proven by the fact that, of the 168 million passengers that have cruised globally since 1990, 72% cruised in the past ten years and 43% in the past five years alone. The cruise industry has continually expanded to meet or boost demand: 40 new ships were built in the 1980s, 80 new ships were built in the 1990s, and 46 new ships are scheduled to enter the global market within the next four years. Even though there are more than 30 brands of cruise lines, only two companies dominate this industry: Carnival Corp & Plc (CCL) and Royal Caribbean Cruises Ltd (RCL). The cruise industry remains highly segmented by product-with a variety of brands targeting a wide array of price points, consumer needs, and itineraries-but by the end of 2007 Carnival and Royal Caribbean alone controlled about two-thirds of the global capacity, with shares of 45% and 21% respectively. Back in 1987, their estimated combined share of global capacity was only 11%. Up until 2000, Carnival and Royal Caribbean followed a

An expert in market forecasting identifies 15 major trends that are changing American business, and shows entrepreneurs and corporate managers how to capitalize on them.

Examines several aspects of the cruise industry: where it started, how it got to where it is, and where it's headed?

Completely updated and revised, Cruise Ship Tourism, 2nd Edition covers the economic, social and environmental impacts of cruising, combining the latest knowledge and research to provide a comprehensive account of the subject. Despite the industry growing rapidly, there is a substantial gap in the related literature, and this book addresses the key issues for researchers, students and industry professionals. A valuable 'one-stop-shop' for those interested in cruise ships and maritime tourism, this new edition from major names in the field is also an invaluable resource for anyone concerned more widely with tourism and business development.

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Cruises are also a great vacation option because of their diverse onboard activities suitable for all ages. Many ships feature thrilling waterslides, sky-high rock climbing walls, outdoor sports courts, buzzing arcades, interactive game shows, and much, much more. It is no surprise why voyaging out on a cruise ship is the utmost best vacation option when contrasted to all the alternative vacation options. Cruises offer vacationers unprecedented conveniences, unlimited access to ample onboard amenities, and the chance to visit multiple destinations without entirely mortgaging away your future to do so. In other words, cruises offer reasonable pricing for a memorable vacation experience and also offer all the luxuries that you eminently desire to be provided to you while vacationing. Embarking on a cruise ship as a passenger ultimately culminates in creating an indelible, captivating, and stimulating vacation experience, especially on the newer cruise ships that have more sensational activities than you can ever possibly experience.

The business of cruise tourism in recent years has commanded news media attention especially on issues of environmental pollution, passenger safety and worker rights, yet consumer interest in cruise vacations has not been adversely affected by negative publicity and it continues to grow at an average of 8-9% per annum. This unique mode of business focusing on the production and consumption of pleasure at sea and on land offers us an unprecedented opportunity to analyze the manner in which ongoing economic restructuring processes to bring about free markets in goods, services and labour can and does involve both life on land and at sea. This interdisciplinary analysis elicits an examination of states' relationship to the maritime regulatory structure governing ship ownership, management and operations, cruise lines' business strategies, development of port communities to capture cruise-related revenue, changing leisure consumption patterns and meanings, and the employment of foreign migrant workers as seafarers.

Cruises are also a great vacation option because of their diverse onboard activities suitable for all ages. Many ships feature thrilling waterslides, sky-high rock climbing walls, outdoor sports courts, buzzing arcades, interactive game shows, and much, much more. It is no surprise why voyaging out on a cruise ship is the utmost best vacation option when contrasted to all the alternative vacation options. Cruises offer vacationers unprecedented conveniences, unlimited access to ample onboard amenities, and the chance to visit multiple destinations without entirely mortgaging away your future to do so. In other words, cruises offer reasonable pricing for a memorable vacation experience and also offer all the luxuries that you eminently desire to be provided to you while vacationing. Embarking on a cruise ship as a passenger ultimately culminates in creating an indelible, captivating, and stimulating vacation experience, especially on the newer cruise ships that have more sensational activities than you can ever possibly experience.

“This is a milestone book in marketing. Most companies claim they are focused on customers, but even those who are, probably do not take a scientific approach to customer management. Professor V. Kumar is the acknowledged expert on the science of customer management. This important book raises all the key questions in managing customers, provides the analytical tools for optimization, and illustrates these tools with a number of company examples.” —Philip Kotler, S. C. Johnson Distinguished Professor of International Marketing, Kellogg School of Management, Northwestern University “Delivering lasting client value is at the heart of profitable businesses today. Managing Customers for Profit provides a compelling, empirically-tested approach to significantly enhance traditional customer relationship management initiatives. I highly recommend this book to all those interested in cultivating lasting profitable growth relationships with current and future clients.” —Tim Bohling, Vice President, Market Intelligence, IBM Americas “Executives are too often guided by backward-looking, short-term metrics. This book shows how a focus on Customer Lifetime Value (CLV) can change management toward long-term results by providing a fresh perspective on customer targeting, retention, and loyalty. Highly recommended—it shows you the way toward strategic customer thinking.” —Dave Aaker, Vice-Chairman, Prophet, Author of Brand Portfolio Strategy This book shows you how. Leading marketing expert V. Kumar shows how to use Customer Lifetime Value (CLV) to target customers with higher profit potential…manage and reward existing customers based on their profitability…and invest in high-profit customers to prevent attrition and ensure future profitability. Kumar introduces customer-centric approaches to allocating marketing resources for maximum effectiveness…pitching the right products to the right customers at the right time…determining when a customer is likely to leave, and whether to intervene…managing multichannel shopping… even calculating a customer’s referral value. Drawing on his extensive experience consulting with world-class marketing organizations, Kumar illuminates the challenges of transitioning from a product-centric to a customer-centric approach and presents proven solutions. Simply put, this book’s techniques offer marketing executives a complete framework for linking their investments to business value—and maximizing the lifetime value of every single customer. Foreword xiii Preface xv Acknowledgments xviii About the Author xix Chapter 1: Introduction 1 Chapter 2: Maximizing Profitability 11 Chapter 3: Customer Selection Metrics 29 Chapter 4: Managing Customer Profitability 59 Chapter 5: Maximizing Customer Profitability 75 Chapter 6: Managing Loyalty and Profitability Simultaneously 93 Chapter 7: Optimal Allocation of Resources across Marketing and Communication Strategies 113 Chapter 8: Pitching the Right Product to the Right Customer at the Right Time 127 Chapter 9: Preventing Attrition of Customers 143 Chapter 10: Managing Multichannel Shoppers 163 Chapter 11: Linking Investments in Branding to Customer Profitability 187 Chapter 12: Acquiring Profitable Customers 205 Chapter 13: Managing Customer Referral Behavior 223 Chapter 14: Organizational and Implementation Challenges 249 Chapter 15: The Future of Customer Management 267 Index 283