Cruise Industry

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MBA 623| North American Cruise Industry|

Table of Contents
Executive Summary2
Cruise Industry Overview2
Market Overview and Structure2
Industry and Customer Segments5
Target Market Analysis7
Carnival Cruise Lines7
Target Market Analysis7
Positioning Strategy7
Royal Caribbean Cruise Lines8
Target Market Analysis8
Positioning Strategy9
Norwegian Cruise Lines9
Target Market Analysis10
Positioning Strategy10
Disney Cruise Lines11
Target Market Analysis11
Positioning Strategy11
Business Opportunities11
Appendix 1: Market and Customer Segmentation Figures13
Appendix 2: Cruise Line Positioning and Target Marketing Selection Figures16
Appendix 3: Perceptual Maps18
Bibliography:23

Executive Summary
The North American cruise industry is the most exciting growth category in the entire leisure market. Ships are not viewed just as a means of transport, but as floating resorts that compete with land-based counterparts such as restaurants, bars, shopping centers, entertainment venues, etc. The revival of cruising has taken place in the past four decades and today it forms a small but growing segment in the global tourism industry. As a young industry, it has had an average annual passenger growth rate of 7.2%. The North American cruise market is estimated at $17.46 billion. Currently, the Baby Boomer generation is the primary target market of the cruise industry. However, a younger group (Echo) of the population is becoming more active, which opens up more business opportunities for the cruise industry. The cruise industry is dominated by three main players – Carnival Corporation, Royal Caribbean Cruises, and Norwegian Cruise Line (NCL). Disney has also entered the market by leveraging their established brand. These companies control approximately 94% of the market. The cruise industry is relatively difficult to enter and exit due to extremely high purchasing and selling cost of cruise ships. The four major players have well invested themselves in the market by positioning their cruise lines in four different segments – First class, Premium class, Luxury class and Specialty class. As the market has grown and become saturated in several areas, innovation and brand image are vital elements in order to remain competitive. Cruise lines will look to various opportunities to continue their growth. A focus on the business/conference segment could open up a new market for cruise lines as they could potentially offer similar amenities as major hotel and conference centers throughout the United States. Theme-based cruises targeting large groups, such as political parties, fraternity/sorority groups, religious assemblies, or class reunions could offer other business prospects. Finally, increasing the number of ships in their fleet, as well as increased embarkation ports may provide new and unique travel experiences and open the cruise experience to a wealth of new customers. Cruise Industry Overview

Overview of the Cruise Industry
A cruise is defined as “to make a trip by sea in a liner for pleasure, usually calling at a number of ports”. It is characterized by the ship being similar to a mobile resort, which transports passengers from place to place. Today, ships are not viewed just as a means of transport, but as floating resorts, that compete with their land-based counterparts with restaurants, bars, sports facilities, shopping centers, entertainment venues, communication centers, etc. Cabins are becoming larger and more luxurious. The trend is for more cabins to have windows and/or balconies. The revival of cruising has taken place in the last four decades and today it forms a small but growing segment in the global tourism industry. In regard to its size within the industry, cruise ships account for only 0.6% of the hotel beds offered worldwide. However, the industry is now growing rapidly and is one of the major areas of tourism growth. The total...
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