Carnival Harvard Case Essay

1537 words - 7 pages

Alicia Trezza
Zak Jones

Carnival Cruise Lines
1. Conduct a SWOT analysis for Carnival: what are its strengths, weaknesses, opportunities and threats? In doing so, please evaluate its major competitors.
- Carnival has 75 ships in its fleet and is continuing to brand the company as the “fun ships”
- There are large barriers of entry into the cruise businesses. Ships are extremely costly and time consuming to build.
- Carnival cruises provide a vacation that includes all activities, food, beverages and transportation to multiple destinations in one low price, appealing the budget friendly cruisers.
- Carnival builds it ships specifically for entertainment and fun, the most ...view middle of the document...

- The cruise industry is growing. More and more people are looking for all-inclusive vacations that include several destinations. This fits Carnival’s marketing strategy of mass marketing to first-time cruisers.
- With Carnivals vast network, there is ample opportunity for Carnival to develop new cruise courses to appeal to more vacationers.
- Opportunity to build relationships with customers while providing them with fun vacations. Can use this to build a CRM database.
- Carnival has millions of customers in their database. This gives them the opportunity to build a direct marketing campaign aimed at getting repeat customers. Vacationers who have cruised with Carnival before spend less time speaking with customer service and are more likely to buy upgraded packages, increasing revenue.
- Carnival cruises’ operations can be threatened by weather, the economy, terrorist and piracy attacks and new broadcasts of cruise ship accidents and problems, regardless of which cruise line.
- Competition is fierce. While entrants are limited, there are 10 major brands serving the North American market.
- Old misperceptions of a low end, poorly run cruise line still linger. Carnival has changed and updated their fleet but many cruisers still shy away from Carnival because of their experiences over a decade ago

2. How did management build Carnival into the dominant brand in the industry?
Management built Carnival into the dominant brand in the industry by branding it as the “fun ship” line. Vacationers are looking for fun trips to give them a break from reality. Additionally, there is a growing trend for more diverse trips. Carnival was able to build on this using their value proposition, described in greater detail in question number 3.

Since customer loyalty throughout the industry is low, Carnival focuses on appealing to first-time cruisers. They use an acquisition strategy, gaining new customers to fill each ship. The company even provides short trips, allowing first timers to test the waters. With a variety of activities from rock climbing, pools, and casinos, Carnival trips have activities for everyone. Additionally, Carnival recognized the shift in cruise demographics from the start. In the 1970s, cruisers were generally older, however, there was a growing trend of young singles and young families taking cruises. Carnival developed cruises from the start with these new customers in mind.

3. In a succinct manner, state Carnival's value proposition?
Carnival’s value proposition was to be a cheaper alternative to land vacations at all inclusive resorts while providing a variety of activities and destinations in one trip. Carnival was the “fun ship”, providing contemporary vacationing to first-time and repeat cruisers. Because customer retention is low, Carnival uses a more traditional style of marketing, focusing on the short-term customer.

Each brand under the Carnival umbrella remained independent,...

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