Cunard Line Ltd.

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Cunard Line, Ltd. Entered in the cruise and steamship business in 1840 and currently offers cruising on seven ships with 5 in the luxury category and 2 in the premium category. Each cruise has its own distinctive image and positioning. As far as its customers are concerned 95% of the customers are from America and Europe. The total cruise industry consisted of approx. 4 million boardings per year. Of this luxury segment comprised 8% that is 320 thousand. Cunard estimates that it has a 50 % market share in that segment which leads to 160 thousand boardings. The price per boarding ona luxury ship varies with high season and low season but on an average we can take that to be approx. $8000 per person. Therefore total revenue from luxury segment for Cunard can be estimated at $1.28 billion. After years of service and earning a reputed brand name for Cunard it faces some major problems. Firstly by 1991 the industry capacity was exceeding demand. As a result a price war started which was further aggravated by the worldwide recession of 1990 and aggressive promotional efforts by the competitors. Since increasing pressure was put on tactical marketing to generate short term sales it has to make sure that in the process it should maintain the effectiveness, integration and co-ordination of Cunard’s marketing communication efforts. Then another major issue was the budgeting. This situation arose as the company is coming up with a major reorganization. Earlier each ship was marketed by a single marketing planning executive. Now 4 groups are made with one executive assigned to each of the ships. Now the problem arose of how to market with Cunard name as umbrella as well as promoting each ship individually and how the budget should be allocated. First of all there is a clear need for tactical marketing as the pressure from competitors is increasing. Therefore to generate sales and continuous revenues Cunard has to enter in discounting and price promotion activities. Yes it’s...
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