Case Critique by Group 6 - Section D

Cunard Line Ltd: Managing Integrated Marketing Communications

 Case - Cunard Line Ltd: Managing Integrated Marketing Communications

Case Facts
 Cunard Line Ltd was a wholly owned subsidiary of a large London-based conglomerate,
Trafalgar House
 It has been in the cruise and streamline business since it was founded in 1840
 It was widely considered to be the last of the great steamship lines and successfully adapted
to the contemporary marketplace
 The growth of convenient airplane service on international routes changed the basic
character of the business to Luxury Vacation Business where customers were treated to
wide variety of activities, entertainment and sumptuous food while being at sea
 Offered 7 cruising ships- 5 (luxury 5-star) [QE 2, Sagafjord, Vistafjord, Sea Goddess 1 & Sea
Goddess 2] & 2 (premium 4-star) [Cunard Countess & Cunard Princess]
 60% of the company’s business was with passengers domiciled in the United States
 Cunard’s luxury segment market share constituted 50% of 8% of luxury segment of 4 million
total boardings per year

Q1. Should Cunard use a more ‘sale-oriented’ format with more emphasis on price for its tactical
advertising?

It is important for Cunard to have an effective marketing strategy by focusing more on sales-oriented
advertising and promotion. The strategy applied should not put a financial burden on the company.

 Particularly newspaper advertising and direct mail mediums can be used in order to promote
the company and the ships
 The team can directly contact the previous customers identified by the organizational
database
 Price-oriented offers can be provided to the customers inorder to attract them
 The use of integrated marketing communications is required as it makes efficient use of
different marketing and advertising techniques
 More messages which are tactical in nature can be used in place of strategic messages to
attract price-conscious people

Q2. Is your judgement consistent, or will it change depending upon the economic environment?

It is important for Cunard to effectively position the brand in relation to its competitors

 It is important for the company to employ approaches that intend to sell the cruise benefits
and experiences very tastefully, and carefully avoiding anything that might be viewed as
‘glitzy’ or hard sell
 A right balance between strategic and tactical advertising needs to be maintained
 A sustainable brand image and identity in the minds of customers need to be maintained
 Other aspects apart from price also should be known to the customer in case of normal
environment condition
 In normal economic times, look and feel should be communicated through the
advertisements- through use of graphics and other visuals
  Use of integrated marketing communication is also important to answer all customer
questions

Q3. Make a comment about the focus of marketing communications: between the overall Cunard
identity and image, and the identity and image of the individual ships?

 Focus of the marketing communications should be on both the advertisements instead of

focusing on one of the company and individual ships
 The primary focus should be on the identity and image of individual ships which will fulfil
short term goals along with increasing the sales and new customers
 Focus should be on the brand identity of the customers which will create a strong brand
image and eventually positive associations with the brand image, this will be helpful in the
long run for the company
 Common graphics approach should be the first step
 A very distinctive approach to the layout of magazine advertising should be introduced and
along with that full-page portion of the advertisement with glossy, elegant, four-color
photographs should be continued to use

Q4. Which marketing communications elements do you believe should receive greater/lesser
emphasis by Cunard? Why? Specifically, what about the role of direct marketing?

The marketing communication elements for Cunard ships were as follows:

 Direct mail – 25%

 Mass Media Advertising in magazines and newspapers- 35% (of this 70% was traditionally
considered strategic and 30% tactical, but in 1991-1992 the mix was closer to half and half)
 Brochures and Travel Agent Co-operative Spending-35%
 Public Relations and Promotional Activities-5%

The current market scenario including economic trends, the industry capacity exceeding the
demand, and the geopolitical landscape meant that the cruise companies were affected badly. The
consequence of this was that discounting and price promotions that were prevalent in other
industries were being employed in the luxury and premium sector to fill out empty cabins. While
Cunard Line was able to create a brand image of its own in the minds of the consumers, tactical
marketing was required to close sales in the short term. This means that in the current state ‘Direct
Mail’ and ‘Newspaper Advertising’ were to be given greater importance. This however doesn’t
mean that the other elements of communication should be ignored.

Role of direct marketing – Direct marketing and associated database activities were becoming more
and more important for Cunard Lines for the following reasons:

 It helped in better targeting and communication planning

 Through consumer profiling, Cunard was able to narrow its targeting efforts
 They designed curated and customized mailing packages for different cohorts of customers
based on the information they had available to them
 It helped close the deal better as receptiveness by the prospects through direct mailing was
enhanced
 It helped close the deal by creating a sense of urgency
Q5. Discuss the implications of the success of the "one-day sale" for Cunard.

The one-day sale was a mailgram that was sent on 26 th February 1992 to all the key travel agents in
the five ‘cold cities’: Minneapolis, Chicago, Albany, Buffalo, and Rochester, N.Y. promoting “Cruising
to the sun”. It alerted the agents to watch for an important announcement in the upcoming Sunday
newspaper. The Sunday communication announced a special price break if the reader acted ‘now’.

The following Monday, the special one-day sale also received mentions on television shows in the
five cities, creating more awareness of the campaign. This was in sync with the Cunard sales force
which was “blitzing” travel agents in the selected cities.

While the “one-day sale” was a huge success with revenue attributed to the effort being
approximately ten times greater than the cost there were a few apprehensions along the
replicability of the promotion. The reasons for that were:

 The continued use of promotional devices may dilute Cunard’s carefully nurtured image
 The challenge was to create urgency and persuasiveness of price-promotional advertising
without harming the brand image

Q6. What effects do you expect the impending organizational change to have on marketing
communications at Cunard?

Let’s first look at what is the impending organizational change.

Till that time, each ship was marketed by a marketing planning executive, who acted as a product
manager for a particular ship. He was responsible for the ship's revenue, pricing, marketing efforts,
and gross margin. While the responsibility was with the planning executive, the development and
execution of advertising programs were done by the marketing communication staff.

As for the alignment, ships were grouped into 4 groups according to the type of cruise and services
offered and each group will have an executive responsible for both strategic and tactical planning.

 Elegant, 5-star cruising- the QE 2

 Ultra-deluxe cruising 5-star Sagafjord and Vistafjord
 Less formal, somewhat less expensive cruising (destination oriented; 4-star) the Cunard
Countess and the Cunard Princess
 Yacht-like (luxury cruising; 5-star)- Sea Goddess I and Sea Goddess II

While each group would be able to focus its resources on a particular target market with a
specific product concept and message, this organizational model might lead to the dilution of
Cunard’s brand image as the effort would be focused on individual ship/service rather than the
entire brand as a whole.

Secondly, with the profit responsibility now vesting with the executive for that group, there
would be less central control over marketing communications.

Thirdly, the integration of communication among the different groups will be difficult to
maintain.
Q7. Prioritize and address the challenges.

The key challenges facing Leslie regarding the future strategy of Cunard are:

 To maintain the effectiveness, integration, and coordination of Cunard's marketing

communications efforts
 To achieve immediate sales result through short-term, promotional vehicles while ensuring
that the brand image is not diluted
 Budgeting for the corporate Cunard effort

The key challenge for the company seems to be first, to achieve immediate sales in the short run
through tactical marketing planning. While building upon its overall image through a group effort,
considering the current external and internal environment, it is also important to focus on closing
sales in the short run. For this, the company has to resort to price promotional strategies as the
competitors have also resorted to such measures to boost their sales. Like the ad, Leslie saw in the
newspaper “$1,000 off" sale on all of their (4-star) Bermuda and Caribbean cruises.

Some of the ways to increase sales while not compromising on the brand image:

 Providing reward points rather than direct price offers

 Providing flash sales but in limited frequency
 Complementary offers rather than direct price promotions