Carnival Cruise Lines Case Study

Carnival Cruise Lines Case Study

1. Case Overview

Carnival Cruise Lines is a British-American owned cruise line. It was founded by Ted Arison in 1972. It has two headquarters, one in Miami, and another in London, UK. The Carnival Corporation owns largest fleet in the world with 12 cruise lines and 75 ships operating most voyages in North America, UK, Australia, New Zealand, Spain, Germany and Brazil.

Cruise vacationing was the fastest-growing category of the North American leisure travel industry. (Piccoli, 2012)By catching this chance, Carnival Cruise Lines created a concept called “Full Ships” to attract more customers. Now the company has possessed more than 50% of the market share. The company makes money from ticket sales as well as on-board revenue from gambling, shore excursions, bar revenues, and other amenities. Its strategy like strong partnership with travel agencies, a low cost price differentiation, and a strong brand image among a wide spectrum of ages help it obtain the title of "World Most popular Cruise Line”.

2. Problem Statement

Since we have already known that Carnival Cruise Lines has the biggest market share, it has a large and various client base. According to research by Cruise Lines International Association (CLIA), the industry’s main trade association, the average cruiser was 50 years old and affluent, with a household income of $99,000 per year. Cruisers were typically married and sailed with their spouses (78%). More than half (54%) had taken their first cruise within the past five years and, on average, took 2.6 cruises in this time period. (Piccoli, 2012) However, Carnival cruisers are relatively young with the average age of lower than 46. And its customers have more diversity, ranging from families, singles, honeymooners to multigenerational families. Besides, in terms to the characters of cruisers, almost one third of them are first-timers. To some cruisers, even more than 50% are first-timers. Among those returning guests in Carnival Cruise Lines, two thirds were repeaters to the brand, however rest of them were still new to it. So how to retain the customers becomes a serious problem.

The information systems (IS) group at Carnival is applied from booking tickets to the final debarkation of the ships. With the help of the systems, Carnival has gathered large amount of data. Now the problem becomes that how to analyze. For example, the modern Sail & Sign card was all encompassing, serving as a pass to board/deboard the ship and to sign up for excursions, as well as acting like a credit card to pay for anything purchased onboard and against which gratuities were automatically charged. (Piccoli, 2012) However, despite the data gathered by sail & sign card, the company still didn’t know customers preferences. It is clear these date is very essential and helpful to improve customers’ retention.

Now the company considered whether to implement CRM system?

3. Analysis

      My stand is it should apply CRM system in the daily operation. By making this choice, I take two criteria into consideration: cost and impact. The cost includes two parts: the implementation cost and the cost on customers. The impact also consists of two part: can the customers perceive the improved quality after the application and can the company reach the customer’ expectation and improve customers’ retention. Here I will use the Strategic Impact Grid to analyze what if it decides to implement the system.

        The main advantage offered by the strategic impact grid is its ability to enable simultaneous evaluation of the firm’s current and future information system’s needs. This is achieved by plotting the firm on the following two dimensions: the current need for reliable information systems and the future need for new information system functionalities.(Piccoli, 2012)

Current Need for CRM Systems: First of all, CRM system has no conflict with current system. On the contrary, other system will also benefit from it, since it will provide Carnival with much customer information which they have not utilized before. For instance, the shore side computer system will first look into the CRM system and find if he or she is a repeat guest. If so, based on the previous experience, the CRM system can help customers save time on this section. Second, the ability to access to customers buying patterns, the ability to offer the correct products to the correct customers, higher qualities of service and loyalty programs are just some of the strategic advantages they can gain from correctly implementing this. For the shipboard systems, the crew can get these information so that they can better serve the customers. What’s more, the failure of CRM system will not cast the bad influence on the current system.