Carnival Cruise Lines Case

1. How did CCL’s management build the line into the dominant brand in the industry?

The company had long practiced a successful market-expansion strategy, with growth fueled by selling the mass-market cruise category to first-time cruisers. Less emphasis had been placed on repeat business. Though the segment of potential first-timers remained large, competition for the midmarket vacation dollar was fierce. Carnival had amassed a large past-cruiser database, though the company had done little with it to date.

One driver of carnival’s success was a clear vision about the industry it operated in and unwavering commitment to the brand essence.

Product design of “fun ship” depended on providing quality cruise vacations that exceed customer expectations and needs, Carnival considered it as one of its critical success factors.

Carnival’s conservative stance toward IT was also thought to have paid dividends due to the low success rate of many companies who tried the CRM approach.

2. Should CCL develop a CRM strategy? Why, and for what purpose?

Yes, because they want to know their customers better by analyzing data with the purpose of gaining new customers and increasing the loyalty from existing customers. Carnival was just beginning to experiment with loyalty program to incent customers to spend more money on board; and there was growing recognition at carnival of the value of business intelligence about customers to solve complaints. Also, the firm had the experience of a sophisticated revenue management group since 1999 that is using inventory, pricing and booking data to optimally price each cruise and understand performance of agents.

3. How should CCL approach the implementation of a CRM strategy?

Currently, CCL only devoted a fraction of a full-time equivalent employee to customer data analysis, though several data analytic projects were currently in the work. Basically CCL should take into consideration the following: (1) Hire or contract specialized consultants to help in the implementation; (2) Verify the accuracy of past data, so it won’t be useful; (3) Implementation of Infrastructure (ie: data warehouse); (4) Integration of custom-developed system into the CRM and new infrastructure.

4. What else should CCL do to leverage customer data for enhancing the guest experience and the company’s bottom line?

Carnival profile customer is well defined, so the customer data could be used to enhance the customer's experience by doing the following: (1) Based on age and marital status of customers, special suitable activities can be offered, like excursions and spa services which were profitable; also a discount could be included; (2) Customer feedback of satisfaction can be useful to make the necessary adjustments to the

quality of service; we want previous customers to refer others; (3) Focus on information of repeater guesses, who spend more money, and give that information to the call centers to enhance service.