Carnival Cruise Lines Case Analysis
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Carnival Cruise Lines is the largest cruise company in North America and carries more than 60,000 passengers a week. The Carnival experience is the standard against what past cruisers judge their later cruise experiences. Carnival has captured the “fun” psychographic and has a strong reputation for an enjoyable, relaxed cruise. Furthermore, Carnival has a strong market expansion strategy for selling the mass-market cruise category and first-time cruisers. They have a clear vision and knowledge about the industry and a commitment to their brand essence, which is fun. Also, as an extension to their branding of the “fun” ships they are the low-price leaders. Because of their strong brand image they are able to achieve double-digit growth in the industry.
One area that Carnival needs to improve upon in order to stay competitive within the industry is information technology. Carnival has a large IS group, but the focus has been on maintenance and operations of the existing infrastructure. They had been collecting some customer data for a couple years, but were not doing anything with that data. In order to gain new customers they need to know who to market. By analyzing customer data they could find out who to focus their marketing efforts on. Carnival felt they did not have to be the IT innovator in the industry. I agree that they shouldn’t be the innovator, but they do need to focus more energy on keeping up with the competition.
Management at Carnival had been discussing what strategy to use in order to get a better feel for who their customers were and how to make them loyal customers. One option was to use CRM software. CRM had been a fad that had recently swept the industry, but due to Carnival’s conservative stance toward IT they did not follow suit. I think that CRM could definitely help Carnival gather and analyze customer data in order to gain new customers and keep existing customers. However, I don’t think that Carnival is at a point yet that CRM software would be a great benefit to them. CRM is very expensive and time consuming to implement. There are several things that Carnival needs to do in order to prepare for CRM.
First, they need to build out their IT team. Currently, they only have one employee focusing on data analysis. If the historical data they have isn’t accurate then the CRM software is useless. So they first need to get through the two years worth or data they have and verify its accuracy. They also need to make sure that the data they collect in the future is reliable accurate information. In the past there were not any checks and balances on data accuracy. They need to have a system that can gather the information automatically so that the risk of human error is eliminated or at least reduced.
Secondly, they need to take a look at the current systems they are using and make sure they can integrate everything into CRM. Some of the applications they use are custom developed so it may take some work on those systems in order to make them integrate with CRM. Implementing CRM is a very large project that can take many years to fully integrate. Since IT isn’t Carnival’s core competence they need to bring in a consultant so they can look into Carnival’s current IS infrastructure and make recommendations as to what Carnival can do to prepare for CRM. One thing they will definitely have to develop is a test environment. As they implement CRM across their current applications, they need to be able to work out the problems in a test environment before pushing it through to production.
Lastly, until recently Carnival hadn’t focused on direct relationships with customers. They relied upon travel agents to build the relationship with the customer. The sales force now needs to focus on direct relationships so that they can collect data to analyze. The CRM system is useless if they don’t have the customer information that goes into it. They should also look into how they could get the customer information that is being gathered by the travel agents sent back to them. Since such a large percentage of Carnival customers book through a travel agent it is important to have a way to collect that data.
After Carnival takes the above steps to prepare for CRM I think it would be a very useful tool to use to better understand who their customers are and market