Case Analysis –

Carnival Cruise Lines

Contents ​Background
​Changes
​SWOT analysis
​Question
​Criteria
​Alternatives
​Recommendation
​Implementation
Contents are linked to respective pages

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Background
Key current facts about Carnival Cruise Lines

• Founded in 1972, Carnival Cruise Lines is the largest cruise company in North
America and carries more than 60,000 passengers a week
• The Carnival Corporation portfolio of 12 cruise lines and 75 ships covered each of the
four North American market segments (contemporary (mass market), premium,
destination (specialty), and luxury) as well as Europe
• It captured the psychographic of fun
• Most of the cruisers are first-timers and the rate of repeat cruisers were low
• Carnival had created a large past-cruiser database, though the company had done
little with the data

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Changes
External factors and the threats it poses to Carnival Cruise Lines
The Cruise industry has evolved
rapidly and competition for the mid-
market dollar was significantly high.
Apart from the competition, other
factors like natural calamities, post
9/11 pricing pressures contributed to
the external change factor for the
company
The use of information technology
was a major factor globally across
most of the industries even though
the concept of data warehousing was
new.
Information technology was used by
the competitors
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SWOT analysis is important
before we focus on the goal to
better understand the situation
​Strength
• Dominant market share
• 98% guest satisfaction rating
• Focusing on all segments of customers
• Has accumulated a large past-cruiser database
​Opportunity
• Only 16% of the North American market had
ever cruised, leaving a large untapped base of
potential customers
• Carnival is beginning to experiment with loyalty
programs (Carnival Vacation Club)
​Weakness
• Less than 20% of guests who cruised
Carnival during the past 7 years returned
more than once
• Dependence on travel agents
​Threats
• Globally higher competition with use of IT
• Direct rival of Carnival – Royal Caribbean
• Friction in evolving cruise distribution channels,
where a growing direct-market effort will upset
travel agents
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Question How can Carnival Cruise Lines
maximize their potential to increase
customer targeting, acquisition, and
customer retention using CRM?

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Criteria
These three are close-ended questions that can help decide which alternative meets most of the criteria

Criteria 1 Criteria 2 Criteria 3

Will the chosen Will the chosen Will the chosen
strategy ensure strategy help strategy support
maximum profitability management create a customer targeting,
with the use of current comprehensive profile acquisition, and
resources? and 360-degree view retention?
of the customers?

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Alternatives
Alternatives can be creating a new strategy or retain the existing one with few changes which possibly can
increase profits, there are three alternatives…

Alternative 1 Alternative 2 Alternative 3

Maintain the Status Improve the existing Implementing CRM
Quo Consumer response across departments
system (CRS) and leverage its
substantial access to
data

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Recommendation
Evaluating alternatives with criteria to check which has more positives and can be recommended for
implementation
​Selected Alternative,
detailed ahead
​Alternative 1 ​Alternative 2 ​Alternative 3
​Maintain the Status Quo ​Improve the existing ​Implementing CRM across
Consumer response departments and leverage its
​Criteria system (CRS) substantial access to data

​Will the chosen strategy ​No, Maintaining the current ​Maybe, this strategy will ​Yes, this strategy will create
ensure maximum system cannot maximum some perks than present maximum potential with the
profitability with the use of profitability of current but not maximum use of current resources
current resources? resources profitability

​Will the chosen strategy ​No, the data is separated in ​No, this strategy cannot ​Yes, it will be easy for
help management create a different departments create a comprehensive management to create and
comprehensive profile and profile access a comprehensive
360° view of customers? profile and 360° view

​Will the chosen strategy ​No, the current strategy ​No, this strategy could help ​Yes, it will increase customer
support customer focuses more on first-time in customer retention but targeting, acquisition, and
targeting, acquisition and cruisers than repeaters not with enough caliber retention
retention?

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Implementation (1/3)
Detailed insights about the selected alternative and the changes which can be made to achieve improved
profitability as soon as possible, the company needs to incorporate as per the detailed timeline

Alternative 3 i.e., Implementing CRM across departments and leverage

its substantial access to data is recommended for implementation
• Advanced CRM system should be implemented than off-the-shelf
Information System (IS) with use of some existing process like ‘Sail
and Sign’ to be even more successful. Click on image
to refer current
• The data from Shoreside computer system, Shipboard computer IS infrastructure

system, and from all other resources including external resources like
agents need to be consolidated to build a comprehensive profile
• This will make it easy to have a 360° view of customers and then this
customer data can be utilized for marketing and sales processes to facilitate
return customers and maximize repurchase rate (also reducing customer
acquisition cost)
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Implementation (2/3)
Detailed insights about the selected alternative and the changes which can be made to achieve improved
profitability as soon as possible, the company needs to incorporate as per the detailed timeline

• The consolidated customer data will provide a base for strategic CRM decisions
and insights for various actions like campaign management where marketers
can use the data to develop customer engagement with Carnival by
personalized communications and offers.
• Developing a strong customer engagement practice will have the possibility of
gradually reducing customer churn rate, increasing retention and CLV even
though the repeat-purchase rate in this industry is comparatively low
• With the customer satisfaction rate of 98%, little improvement on marketing the
current Loyalty program (Carnival vacation club) to customers could lead to
better Business performance
• Use Predictive analysis to help identify prospects (potential customers)

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Implementation (3/3)
Detailed insights about the selected alternative and the changes which can be made to achieve improved
profitability as soon as possible, the company needs to incorporate as per the detailed timeline

• Customer portfolio management and Market segmentation is an important

method for offering differentiated value propositions supported by different
relationship management strategies
• When a customer registers a problem through any channel, it is better to focus
on providing a customized solution to increase customer satisfaction and
value proposition

​Immediate ​Process Future

​Getting the company ready ​Implementing CRM ​Resulting in good customer

as per recommendations retention and more profits

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Thank you

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For reference

Carnival’s
present IS
infrastructure

Click here to return to

implementation slide

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