Case Analysis

Cunard Line, Ltd.:- Managing Integrated

Marketing Communication
Problem Statement:The brand image of a 150 year old luxury cruise company is at stake, due to the unfavorable
conditions existing in the external market like, competitiveness, economic downturn, wars etc.
and the proposed structural changes within the organization, which is so long an integrated
model that built the brand as a whole, is now being worked upon to look after individual
segments.
The problem in overcoming the external market conditions, by promoting the sales through
various discounts and offers, is that, they being positioned as a luxury service and catering the
needs of niche segment, pushing the product to people leads to an overall brand dilution.
The potential problem in promoting each segment individually is that, the consistent message
that promoted the brand as a whole, through integrated communication channel, may be
disrupted. Each team concentrating on their segment might tend to miss essence of Cunard
brand as a whole, leading to brand dilution.

Unfortunately the problem statement is not evident from this write-up.

Case Facts:Cunad Line Ltd is one of the market leaders in luxury cruise (5-Star) industry with 50% of total
market share. The 150 year old organization offers cruising on seven ships. Five of them are
luxury (5-star) category (QE 2, Sagafjord, Vistafjord, Sea Godess I, and Sea Godess II) and two
of them are in premium (4-star) category (Cunard Countess and Cunard Princess).
For 20 years the luxury segment of the cruise business which is generally considered to be
supply driven had grown at a compounded rate of 10%. In last few years Cunards ships has
attained 90% occupancy which is much better when compared with its competitors, but in recent
times the industry capacity has exceeded the demand. This in turn has forced the companies to
use discounts and offers to increase occupancy.
Half of Cunards marketing budget of $20 million was considered strategic and the rest were
classified tactical. The current breakdown of the major communication elements are Direct mail
(25%), Mass Media Advertising Magazines and Newspapers (35%), Brochures and Travel Agent
spending (35%) and PR and Promotional activities (5%).

Your goal should be to extend each of these case facts towards an interesting
implication. Ask yourself, after each sentence, so what does this imply to the protagonist
and to CUNARD. The answer to the question, is the analytical extension I am alluding
to.

Case Analysis:The passenger in Cunard ship is well-educated, married and they would be in the top 5%
income for luxury and top 25% income for premium products. Price for 5-star segment is elastic,
as lower price would indicate lower quality, wealthier people would move away from the product.
When environmental issues are considered the segment is elastic as the external changes
would affect the choice of wealthy people to invest.
Cunard has a relative market share of 50% in the 5-star segment and the luxury segment
market is growing at a rate of 10%, hence it can be classified as Cash Cow and since the 4star market segment is saturated, there is no growth in this segment, this can be classified as a
Dog in accordance to the BCG matrix.

Alternatives:-

1. Discontinue 4-Star Segment and Concentrate only on 5-Star Segment

Cunard should sell off cruise lines in the 4-star market. Concentrating on
the 4-star market would help in the short run but for long term profits
Cunard should focus on the 5-star market segment.
Positives: - Brand image will be maintained.
Negatives: - They will lose on their short term benefits.

Even in the long run. Several consumer upgrade from 4-star to 5-star in due course of
time. Closing down one of the luxury segment will decrease that overall pie for you

2. Concentrating on tactical needs without affecting the brand

More efforts should be taken to achieve the tactical goals like the one
day sale. Revenue attributed to the effort was estimated at approximately
10 times greater than the cost. Also care should be taken not to dilute the
brand image in doing so.
Positives: - It will benefit the company in the current adverse market
conditions.
Negatives: - Pricing power of the company gets affected.
More evaluation and communication design should be assessed and suggested. Specific
suggestion and implications for/from communication practice of CUNARD should be exposed
here.

3. Adding new ships/Upgrading 4-star ships to 5-star

New ships could be bought to add to the 5-star cruising lines or the 4-star
cruising lines could be upgraded to 5-star level. The significant difference
between both the shiops is only in the dining arrangements.
Positives: - Result in increase in the market presence, thereby
increasing the Brand value, with additional revenue.
Negatives: - Huge upfront investment, in the current economic conditions
is questionable.

Is broadening the base of 5-star a real issue? Or, is threat to the current utilization. You
should try help CLL as to how it can increase the utilization of its ship? Should it be
bothered about current utilization? ..tactical or strategic? If tactical, how to accomplish
without diluting the strategic objectives?

4. Modifying 4-star ships to suit distinctive lifestyle

The layout and style of the ships could be modified to adhere to the
passenger experience and a distinctive lifestyle to reflect the vessels
heritage and tradition
Positives: - It will attract new customers and revenue.
Negatives: - Additional expense.

Good one! Implications for communication needs to be discussed

Recommendations:You did not compare cross alternatives. So how can you prioritize the alternatives?
Concentrate more on 5-star cruise lines for longer term profits. Cunard has the advantage of
well-established international luxury brand image and experience in selling and providing luxury
cruises over its competitors. If they have consistent strategic marketing in the right distribution
channels, Cunard will have only little competition in the 5-star market.
Regular passengers could be targeted through Cunards database and analytics to reduce
tactical Marketing spends.
Instead of offering discounts to the all prospective customers, they can perform a Targeted
direct marketing.
Overall Evaluation
Please following formatting instructions provided in the outline. You should have evaluated the business
in light of the existing communication strategy; suggested alteration in business philosophy and therefore
communication strategy; and, then offered an invigorated communication plan for at least one of the
alternative. I hope you will agree that currently you have missed a few critical aspects of the case,
especially, the essence and importance of communication. While I appreciate your first effort, I hope you

will keep up the good work and try incorporate some of the suggestions from me and the critique.
Looking forward to your improvements as you move ahead in the course.
Score
Sl. # Evaluation head
1
Presentation and adherence to formatting instructions
2
Identification of problem
3
Presentation of case facts in an analytical and rich manner
4
Generation of Alternatives and their Evaluation
5
Recommendation and their genesis
Total obtained out of 60 Marks

Marks available
5
10
15
20
10

Marks earned
3
6
11
15
6
41