Problem Statement
Celebrity Cruises needs to increase demand for the services it provides and to become a successful niche player again. Increased competition led to the decrease of clients and emergency of empty rooms, which means that the organization fails to gain expected revenue. Its marketing strategy is outdated and requires reconsideration and improvement.
Situation Analysis
- Initiatives implemented to attract customers are not effective (those developed in 1999-2000 were more successful than those applied in 2000-2001 (see Exhibit)).
- The competitive landscape altered as the demand decreased, but the number of ships increased.
- Operational aspects of new interventions and changes in pricing strategy are not well-developed.
Alternatives
- Instead of focusing on marketing strategy, Celebrity Cruises may alter only prices. Cheaper services will attract clients while more expensive services will provide an opportunity to gain expected revenue faster. However, potential profit will not be reached, and the current market segment is likely to refuse to pay more.
- Celebrity Cruises may focus on advertising so that more people learn about their services, but with no other changes, this intervention is not likely to provide expected results.
Recommendation
The company’s marketing strategy should be improved for its services to become more attractive. Services should be focused on the current needs and expectations of the targeted market. Even though some existing clients may oppose changes, the opportunity to overcome alterations in the competitive landscape will increase, and an opportunity to provide extra rooms will be considered.
Implementation Plan
- A clear marketing position should be developed.
- Needs and demands of baby boomers and multigenerational segment (targeted market) are to be discussed (1 month).
- Current operations should be reconsidered so that unnecessary services are eliminated, and those that appeal to the targeted market emphasized (2 months). It is beneficial to conduct a questionnaire to receive clients’ feedback.
- Appropriate pricing should be developed (2 weeks). No critical gaps between services should be observed.
- Promotion should be diverse to reach different populations (very active during the first six months). Traditional advertisements should be aligned with the usage of social media.
Exhibit
