Executive Summary
Carnival struggles from an image problem. The past success of the company as the purveyor of “fun” inadvertently created an image that made Carnival cruise ships less attractive to more discerning clients. The goal of the company has always been to change the perception of its target market. As a result, the company invested heavily in conventional mass media campaigns in order to get its message across. The only problem was that corporate executives failed to understand the dynamics of mass media-fueled campaigns. Without a doubt, the message is beamed to many households, nevertheless, it is difficult to ascertain if the specific message was able to communicate directly to the intended recipient. The best way to go about it is to leverage the power of social media platforms.
The use of social media platforms provides a cost-efficient way to communicate directly with the intended recipient. Carnival executives must understand the power of social media to facilitate the transfer of ideas to a specific group of individuals. Use Facebook, Twitter, and Instagram to initiate interaction with the target market.
Introduction
Carnival wants to increase its market share and revenue by targeting prospective clients who can afford to travel on a cruise and enjoy the type of services offered by the company (Enz, 2009). However, the company struggled to enhance its image, even after a costly investment into a conventional mass media campaign. Corporate executives must learn how to use social media platforms to improve the company’s capability to reach out to their target market in the most cost-efficient way.
Problem Statement
Carnival suffers from an image problem, and so the target market views Carnival cruise ships as the preferred choice of young passengers. As a result, the company cannot increase its revenue by attracting those that are within the 40 to 50 year old social demographic.
Analysis: SWOT; External and Internal Analysis; and PEST Analysis
The strength of Carnival is in its ability to offer affordable cruise packages to the general public. The weakness of the brand is the negative perception of the target market and the travel agents. It is viewed as a fun ship for twenty year olds. The image that lingered in the mind of the stakeholders and prospective customers are the mismanaged cruise ships of yesteryears. However, the company has the opportunity to tap into new markets as corporate leaders invested in new ships and adopted new business models. Nevertheless, Royal Caribbean poses the greatest threat for the company, because it is perceived as the provider of high-quality service for more discerning clients.
The company struggles to define its identity. This problem is due to the pressure created by outside forces. The company has the resources to make improvements to its current business model. However, it finds an uphill battle in the desire to change the public’s perception of the company. Nevertheless, Carnival has the manpower and other resources to dominate the cruise industry. The company has to be wary of competitors. On the positive side, there is a high-barrier for entry, therefore, there is no serious competitor that will emerge in the next few years, and company executives only need to worry about the effect of Royal Caribbean’s competitive advantage over Carnival.
There are no political factors that could derail Carnival’s plan for expansion and the implementation of strategies to increase its market share. With regard to the economy, Carnival expects to ride the spectacular growth of the industry (Page, 2015). With regard to the social aspect of the business, company executives must learn how to improve their connection with prospective clients. When it comes to technological factors, Carnival leveraged technological advancements in ship building design to develop ships that will cater to the needs of customers (Browne, 2005).
Alternatives
- Carnival can copy the business model of Royal Caribbean. Pro: It will allow the company to increase its revenue by attracting customers with deeper pockets and more discerning taste. Con: It will distort the company image and may lead to loyal customers dissatisfaction.
- Carnival increases the budget and the intensity of its mass media campaigns. Pro: It will increase awareness regarding the company’s new capabilities and offerings. Con: A mass media blitz is not cost-efficient, because the company will have a difficult time to ascertain if the advertisement campaigns were able to reach the intended target audience.
- Carnival must leverage the power of social media to reach out to target audience. Pro: Social media platforms like Facebook, Twitter and Instagram enable the Carnival Company to reach out to prospective clients. Con: Carnival executive are unfamiliar with the effective strategies that can be developed using social media platforms.
Recommendation
The best way to go forward is to leverage the power of social media. Carnival must go this route to connect with the target market in a more meaningful way.
Implementation
Corporate executives must study the core principles of social media platforms in relation to the development of customer relationship. In the traditional mass marketing scheme of the past, the ability to communicate a specific set of information targeted at an individual is almost an impossible task. Thus, the costly mass media blitz generate inefficient results.
Social media platforms like Facebook, Twitter, and Instagram are different from conventional mass media companies. However, the way it works favors the intended outcome of Carnival. The effective use of social media platforms provides opportunities for loyal customers, new customers, and prospective clients to interact with each other. Through the use of social media platforms, the company can get its message across to the intended audience. They will discuss the cruise ships, the services, and amenities that will dispel any negative or false assumptions about the company.
The best way to accomplish these goals is to use social media to develop a unique customer relationship management mechanism. For example, the company creates contests and other reward schemes that are exclusive to its members and followers. The company can sponsor a contest and the prize for winning is a trip for two using any of the cruise ships under the Carnival brand.
The company must invest in a website that connects to a blog and social media tools. Customers are encouraged to upload photos and to send their comments via social media tools. Thus, the activity starts with a few people sharing photos about their recent cruise adventure, and at the end of the day there are hundreds of people who either made comments or saw the pictures that they posted via social media. This process significantly increases the number of people who will be made aware of the products and services offered by the company. They are also given the ability to communicate directly with the employees or the marketing team directly under the Carnival brand. Unscrupulous travel agents who are not concerned with the long-term goals of the company will never victimize prospective customers again.
References
Browne, R. (2005). Profiles of popular culture. WI: Wisconsin University Press.
Enz, C. (2009). Hospitality strategic management. New Jersey: Wiley & Sons.
Page, S. (2015). Tourism management. New York: Routledge.