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Oceania Cruises’ History and Marketing Strategies Essay

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Updated: Jun 24th, 2020

Introduction

According to Oceania Cruises (2014), Oceania Cruises was established in 2002, and now it is the globe’s major high quality cruise-line in terms of classy, chic, and distinctive services; in addition, being the leader in destination cruising, the company travels in exceptional routes giving a fully enhanced touring-experience with the help of comfortable settings that provide unparalleled fashion and console. It is highly essential to state that currently Norwegian Cruise Line Holdings is the parent company of Oceania Cruises, as it has acquired Prestige Cruise Holdings (the former parent corporation of Oceania) in September 2014, making Oceania one of its leading subsidiary businesses, and strengthening the combined propensities and capacities to offer people the best possible services. The purpose of this paper is to discuss historical development, market segmentation strategy, competition, market penetration, destination development, onboard cruise operations, departmental management, and customer service of Oceania Cruises.

Historical development

Oceania Cruises (2012) noted that in 2002, Oceania Cruises started its journey and formed a fully innovative part of tour with stylish ships, lavish routes, comfy-accommodations, first-class food, and outstanding tailored-services, and today, it travels above 330 docks throughout the world on five triumphant ships that give people the chance to take pleasure in a cherished, sophisticated, and graceful touring-experience. Oceania Cruises (2012) further added that Bob Binder, Joe Watters, and Frank Del Rio established the company in January 2003 in Miami through contract with French government, and they bought three 684-traveller R-class-ships, which were made for obsolete Renaissance-Cruise-Line; the company’s vision was to convey top rated food, appealing country-club atmosphere, and victorious journeys to the most tempting places.

Oceania Cruises (2012) noted that within a short time, the company’s growth projections exceeded, and this was reflected through the fact that from just fourteen million US dollars capital in 2003, the company was able to gather about $850 million in February 2007; in addition, in April 2007, it contracted with Italy’s Fincantieri for constructing two novel 1250-passenger ships. It is suggested that in December 2007, it was decided that it would purchase Regent-Seven-Seas-Cruises from Carlson; moreover, the company in June 2010 declared a multi-million dollar plan to update three of its ships; however, it built and launched a new ship in February 2011, called Oceania-Cruises Marina, whereas in May 2012 it extended its cooking enhancement program. However, for a better understanding of the chronological development of Oceania Cruises, the table below provides a quick glimpse of the key developments that occurred each year since the company was first launched:

Historical development of Oceania Cruises

2002 The company was established by three industry experts
2003 In January, the company’s head office exposed in Miami; however, it is surprising that it started with less than twenty workers at that time
Five months later in June, Marcia, the spouse of originator Frank Del Rio, launched the earliest vessel of the company, called Regatta
2004 On the other hand, in March Virginia, the spouse of originator Joe, launched the second vessel of the company, called Insignia
2005 In June of this year the company came up with a fresh and bigger administrative centre Miami
Moreover, in November this year, Fana Holtz launched the third vessel of the company, named Nautica
2006 In July of this year, a novel reservations-hub was launched in the Colorado-Springs; however, later on in December, Joe turned out to be the beginning chairman, Frank turned out to be the chairman and CEO, and Bob Binder turned out to be the new president in this company
2007 In March and April of this year, the business ordered to make two brand new luxurious vessels, and later, Apollo Management purchased a major stake in the company
2008 In the very first month, Nautica made its first ever tour to Australia and New Zealand
2009 In March, the company started to work on improving the services and creating employment in the brand new vessel called Marina
2010 In February, the company started to adorn and create employment in another brand new vessel called Riviera
2011 In July, Riviera came up with its first journey and Kunal Kamlani became the new president
2012 Riviera completed its trial tour

Table 1: Historical development of Oceania Cruises. Source: Oceania Cruises (2012)

Market segmentation

It is highly essential for any business to profoundly consider its market segmentation strategy in order to target the correct customer base successfully and fully capture the particular prospective market with complete capacity (Dereskey, 2008). It is widely accepted that the market segmentation strategy of most cruise liners almost always focus on geographic segmentation, customer group segmentation, and cultural segmentation, as these are the only relevant form of segmentation strategies for them. Oceania Cruises has segmented its market focusing on geographic and customer group segmentation; it is notable that the company has focused only to set its tours at particular geographic locations, keeping in mind the demands of the customers in those particular places; this means that the company looks forward to satisfying and serving the customers base of certain geographic segments. It has been noted that the key geographic segments of the company have been designed precisely, which has been greatly reflected in the touring destinations of the company; for example, it includes Northern Europe, Scandinavia, South Pacific, South America, Greek Isles, Eastern-Mediterranean, Australia, Asia, Caribbean, Panama-Canal, Transoceanic Tours, Alaska, Canada, New-England, Grand-Tours, Global Cruises, and Western Mediterranean.

Moreover, it is also required for Oceania Cruises to segment its customer groups properly in order to react to market needs aptly. According to CLIA (2011), among the citizens of the USA, seventy three million people possess prior cruising experience and thirty six million (who belong to the main target segment that is, those who are above the age of twenty-five and have an earning of above 40,000 dollars) of 133 million, expressed the possibility that they have possibility to trip again. These groups of people form the customer segments of the company and in most of the cases, as it has been indicated, these people have high-income levels and financial capabilities; therefore, during the customer group segmentation, Oceania Cruises has targeted the higher income earners.

Competition

Oceania Cruises has to compete with both direct and indirect upper-premium cruise lines; in addition, presence of intense competition in local market could affect on the return on investment. Main competitors in local market includes Avalon Waterways, American Cruise Lines, Carnival Cruise Lines, Celebration Cruise Line, Paul Gauguin Cruises, Quark Expeditions, Regent Seven Seas Cruises, Royal Caribbean International, Seabourn Cruise Line, Viking Cruises and so on; however, the following table gives more information about competitors of this company:

Major Companies Key characteristics
Azamara Club Cruises This company started operation in 2007 and it is an upper-premium cruise line owned by the Norwegian-American; it provides offer luxury Mediterranean, European, and South American cruises; however, it is a subsidiary of Royal Caribbean Cruises (Azamara Club Cruises, 2014)
Celebrity Cruises Celebrity Cruises was founded in 1988 and it operated as a subsidiary of Royal Caribbean Cruises from 1997; it applies innovative ideas to modernize business operation in the industry (Celebrity Cruises, 2014);
Holland America Line It is a British-American owned cruise line, which started its operation in 1873; however, it is subsidiary of Carnival Corporation & plc since 1989 (Holland America Line, 2014).
Disney Cruise Line The company was incorporated in 1996, which holds about 3% share of the worldwide cruise market;
Royal Caribbean International It is second largest company, which generates profit about $607million in 2012 (Yahoo Finance, 2014)

Table 2: Direct and indirect competitors of Oceania Cruises. Source: Self generated

Market Penetration

Johnson, Seholes & Whittington (2008) and Thompson, & Strickland (2008) stated that market penetration is an effective approach when any company operates business in existing markets more deeply with existing products; however, Oceania Cruises sails to more than 330 ports all over the world and it has opportunity to penetrate more intensely into an existing customer base without conducting any internal modification. At the same time, management team and decision makers of Oceania Cruises need to concentrate on the key challenges to operate business in the existing market, such as, customer satisfaction rate in the present destination, competition in existing market, threats of new entrants, financial position of the target customers, return on investment, and so on.

Destination development

Destination development would be suitable step for sophisticated travelers while it would decide to sail in a new port with present product line; however, Oceania Cruises is a market leader of upper-premium cruise lines for which it has strong brand image to the customers. In addition, sophisticated travelers are looking for the best service and Oceania Cruises focus on cuisine, comfort, service, and outstanding value to attract the customers, who like to enjoy the best cuisine at sea, warm and personalized service along with a destination experience. Here, it is mentioned that destination development is one of the main strategy of this cruise line; at the same time, Norwegian Cruise Line Holdings Limited is a diversified cruise operator and it is now parent company Oceania Cruises. Chrusciel (2014) stated that this company had already selected 12 new destinations as part of its destination development project; however, following tables provide more information in this regard:

Destination Country
Jeju South Korea
Luderitz Namibia
Cooktown Australia
Boracay Island Philippines

Table 3: New destinations Oceania Cruises. Source: self generated from Chrusciel (2014)

Ship Destination
Nautica It offers service in eight itineraries (most of the new destination in Asia and Africa) with many overnights in ports, such as, Singapore, Tokyo, and Namibia
Marina Two back-to-back South America sailings; key features include elegant accommodations, impeccable service and destination-driven itineraries
Riviera It will sail in the Eastern and Western Caribbean
Regatta It will traverse North, South and Central America; main features are stylish accommodations, outstanding service, and gourmet culinary experiences

Table 4: Destinations by ship. Source: self generated from Chrusciel (2014)

Onboard cruise operations (organization, departmental management, and customer service)

According to Oceania Cruises (2013), the onboard cruise operation organization, departmental management, and customer service of the company is highly efficient as the company affords the most top quality customer services through effective organization of tasks and schedules and apt administration of its departments. This has been reflected through the fact that the company is growing enormously since its formation in 2002, in terms of assets, properties, market share, and net profit. Such success indicators provide the idea that the company is attending an increasingly larger group of customers in recent years, and the customers are returning to the company for spending further cruise vacation again and again after being satisfied with the customer service, operation organization, and departmental management when they toured with Oceania Cruises for the first time. However, a detailed discussion of the onboard cruise operation organization, departmental administration, and customer service of the business has been provided in the table below:

Onboard cruise operations organization, department management, and customer service
Handy room service To provide ultimate ease to the customers by means of proper operational management, the room service department admiringly works 24 hours every day
Regular dry-clean & laundry services Regular dry-clean and laundry services are given on the ship and it is notable that both regular and stated services are obtainable with a further invoice
Emergency medical service organization on the ship All the vessels are fully equipped with adequate medical conveniences ran by global health professionals; however, normal Emergency-Room prices do relate here as these are ran by the vessel’s health professionals’ department
Amusement department An extensive range of amusements are proved on the ship by the concerned department
Wireless Internet package and IT infrastructure Wireless Internet service is accessible all through the vessels; in addition, there are extensive IT facilities organized and managed by the IT segment of the company; to be precise, sixteen computers are obtainable in the Cyber Cafe, along with two extra computers in the library
Operations of the Casino The casino gives Roulette, Blackjack, and Poker; it is important to state that even though the casino services timetable could differ every day, the human resources of the concerned department will ensure that the casino is run and organized appropriately
Security services In case of any illegal activity on the ship, customers can instantly call 911 or Guests Service Desk to stop the offence; this would mean that along with the Security Department, the human resources of the vessel can also gather and protect the essential information
Best Cuisine The company has appointed that most skilled and hard-working team of chefs, assistant chefs, waiters, and nutrition specialists, ensuring that the team delivers the finest and top rated cuisine services in the world; in order to fulfill this aim, the concerned departments work 24/7 in every vessel, employing their highest efforts in ensuring apt organization and management
Flawless communication It is also the task of the IT department of the company to ensure the flawlessness of communications between the employees of the ship and the passengers through the deployment of high tech infrastructures and correct management

Table 5: Customer service and operations management onboard. Source: Oceania Cruises (2013)

Departmental Management

President and COO of Prestige Cruise, Kunal is responsible for every matter to make sure successful operation of Oceania Cruises; however, Kunal has long experience to serve as a CFO for Prestige, which helps the company to ensure well corporate governance for the future development. The Senior Vice President Sherman supervises revenue management for Oceania Cruises; Executive Vice President ‘Michael Flesch’ is responsible for all issues related with shipboard operations, for instance, controls hotel, food & beverage, entertainment and onboard revenue; moreover, he has duty to scrutinize Oceania’s continuous development program to offer products with unparalleled quality and ensure continual enhancement of the guest scheme. President, The Senior Vice President and Executive Vice President are responsible for increasing value for its shareholders, develop operational strategies and implement business expansion plan; in addition, they are concentrating on the internal an external threats, such as, skills development of the crews, adaptation of new technology, avoid unusual accidents and so on. Andrew Stuart holds different position in Oceania Cruises; however, he is accountable for International sales, exceptional value, and quality for guests; in addition, he serves the company to develop and strengthen its relationships with travel agents, investment in long-term travel partner success and brand positioning of the company.

Conclusion

From the above discussion, it can be argued that Oceania Cruises is a market leader of upper-premium cruise lines, which has operated business with five large ships and sailed to about 330 ports around the world. It has opportunity to expand business in the destination with existing products and it has scope to apply new market penetration strategy to increase number of travelers from the new destination.

Reference List

Azamara Club Cruises. (2014). Luxury Cruise Vacations with Azamara Club Cruises. Web.

Celebrity Cruises. (2014). . Web.

Chrusciel, B. (2014). . Web.

CLIA. (2011). CLIA’s 2011 Cruise Market Profile Study Reports Positive Consumer Attitudes. Web.

Dereskey, H. (2008). International management, managing across borders & cultures, Web.

Holland America Line. (2014). New Cruise Ships – Holland America Line. Web.

Johnson, G., Seholes, K., & Whittington, R. (2008). Exploring Corporate Strategy: Text & Cases. London, UK: FT Prentrice Hall.

Oceania Cruises. (2012). A History of Oceania Cruises. Web.

Oceania Cruises. (2013). Frequently Asked Questions. Web.

Oceania Cruises. (2014). Company Profile. Web.

Thompson, A., & Strickland, A. (2008). Strategic Management. Delhi, India: Tata McGraw- Hill.

Yahoo Finance. (2014). , Web.

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