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Mardi GrasMardi GrasMardi GrasMardi GrasCarnival had identified a new market for cruises. Recognizing that only 5 percent of the population had at that time taken a cruise, Carnival went after the segment that the other cruise lines were ignoring?the middle and lower-middle class. Carnival positioned itself as a destination vacation, competing against other vacation spots, such as Disneyland or Hawaii, rather than other cruise lines. Carnival defined its market as the 150 million people who take vacations, rather than the 10 million people, who take cruises. Today, Carnival’s biggest competitors are Las Vegas and Disney World.Once Carnival dominated the younger age market segment, they realized that as their customers grew older and wanted a different style of cruise they had nothing to offer them. Carnival Corporation, the parent company of Carnival Cruise Lines, has purchased other cruise lines to expand its market base. They have elected to operate the cruise lines as independent brands, with each brand being strong in a particular target market. Their latest acquisition was Costa Cruises in 1997. Costa is Europe’s number one cruise line and is renowned for its excellent food and service provided by its Italian crews. Another acquisition was Holland American, a deluxe cruise line with an excellent reputation for food and service that has a clientele with an average age of 55. In the luxury end, Carnival purchased Seabourn, a cruise line of three 200-passenger ships featuring a yacht-like experience and personal service. For the more adventurous, Carnival formed Windstar Cruises by acquiring a 148-passenger sail-cruise ship that visit exotic ports such as Tahiti, Costa Rica, and the yacht harbors of the Caribbean.The Carnival brand is undergoing rapid expansion. Carnival has added at least one new ship since 1998, with three ships added in 2002. Carnival is also changing with the times. As more families travel, they are expanding their Camp Carnival program and providing alternative dining such a pizza restaurant aimed at families and children. Earlier in the book, we mentioned that families are taking shorter vacations; Carnival has responded by adding more under-seven-day cruises. Today about half of Carnival’s 2 million-plus passengers opt for a cruise of five days or less. Along with shorter cruises, Carnival is now sailing from sixteen ports in the United States, making it easier for vacationers to get to their cruise ships.Bob Dickinson, president of Carnival Cruises, states most vacation products use demographic segmentation, while Carnival uses psychographic segmentation. Passengers that fit Carnival’s psychographic profile are vacationers that travel to Orlando, Las Vegas, and all-inclusive resorts. It is an excellent example of a hospitality company that understands and uses market segmentation. By identifying a market opportunity and targeting a segment that the competition had neglected, Carnival was able to grow into the largest cruise line in the world. Carnival used the profits and expertise gained from serving this segment to acquire other cruise lines that serve different segments. Carnival continues to refine its segmentation strategy and is now using one of the most sophisticated types of segmentation, psychographics. Carnival has a good understanding of who its customers are and what they want. It is continually refining its product to provide the activities and amenities its passengers want.How many positioning strategies can you identify??

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