TABLE OF CONTENTS
2. THE CRUISE INDUSTRY
2.1. A GLOBAL ANALYSIS
2.2. THE UK MARKET
3. THE ROYAL CARIBBEAN BRAND PORTFOLIO ANALYSIS
3.1. MARKET FORCES AND DYNAMICS
3.1.1. CUSTOMERS ANALYSIS
3.1.2. COMPETITORS ANALYSIS
3.2. BUSINESS STRATEGIES
3.3. BRAND EQUITIES AND IDENTITIES
3.3.1. ROYAL CARIBBEAN INTERNATIONAL
3.3.2. CELEBRITY CRUISES
3.3.3. AZAMARA CRUISES
3.4. THE BRAND PORTFOLIO AUDIT
3.4.1. THE RCCL HIERARCHY MODEL
3.4.2. THE BRAND RELATIONSHIP SPECTRUM
3.4.3. BRAND POSITIONING
Corporate brands are defined by many as one of the most fascinating phenomena of the 20th century’s business environment. In today’s reality they are also considered sometimes as a religion, a belief, or even a lifestyle; they are adored, venerated, and coveted, by people and organizations alike (Keller, 2008).
Balmer in his article Corporate Brands: what are they? What of them? (2003), defined corporate brands as a product of an organization's corporate strategy, mission, image, and activities, which communicates brand’s values and in the meantime affords a means of differentiation from their competitors. It is also said to enhance the esteem and loyalty of the stakeholders for the organization.
This paper will give an examination of the nature, the typology and the management of a well known corporate brand operating in the Tourism industry: Royal Caribbean Cruises Line Ltd (RCCL).
Adam Weaver in his article Complexity at sea: Managing brands within the cruise industry (2008), stresses how in the late eighties, corporate consolidation within the cruise industry, had as a result many cruise brands to be a part of a brand portfolio. In the complexity of the cruise industry, culture, languages and country of origins represent a major challenge for managers when adapting their brands across an international environment and portfolios are always bigger (Weaver, 2008).
Originally Royal Caribbean Cruise LTD’s strategy to overcome the complexity of this issue has been to opt for a Global brand strategy instead of a multiple decentralized local brands strategy, which on the other hand, has been Carnival Corporation’s main strategy, also main RCCL competitor, as well as market leader for the global cruise industry (Weaver, 2008).
However some of the latest operations made by RCCL have suggested a fundamental shift on RCCL brand strategy, which will be a focal point for the second part of this report. Before that, an indication about the size of the industry and an introduction of its main players will be essential in order to understand the dynamics that influence portfolio management strategies.
2. THE CRUISE INDUSTRY
2.1. A global analysis
The Shipping Statistics and Market Review (2009) indicated the cruise industry as the best flourishing segment of the Tourism market. Despite the global financial and economical crises that effected several sector in the global economy, the most of the cruise companies are winning declaring that customers gets the best values for money on their vessels, also suggesting a high demand for the industry (Statistical Publication, 2009).
Only a few numbers of large corporations dominate the cruise industry, which according to the latest data gathered from cruisemarketwatch.com (2010) it is estimated to be $26.78 billion in 2009, with figures indicating a 7.4% increase over 2010. The market leader is Carnival Corporation (CC), followed by the second biggest cruise company in the world: Royal Caribbean Cruise Line (RCCL). Companies’ flagships are respectively, Carnival Cruise Lines and Royal Caribbean International and together they count for the 53.6 and 24.8% of the global cruise ship market share (see Appendix for further details). The third most significant line internationally is MSC that detains the 4.8% of the global market share (www.cruisemarketwatch.com).
2.2. A focus on the UK market
According to Mintel (2009) the UK market is the second largest cruise market in the world after North America. It also accounts for 33% of the European market with more then 1.5 million of British passengers taking a cruise in 2008 (Mintel, 2009), a £2.40 billion market size and a 4% value of the total British vacation industry (www.businessweek.com).
Data suggest positive trends for the UK cruise market, with a dynamic growth that will push the market to £2.80 billion by the end of 2012 (Mintel, 2008). As a result, the UK market is becoming a main focus for some of the main global brands in the cruise industry (www.cruisemarketwatch.com).
Major cruise brands within the UK market are Carnival, Royal Caribbean International and Princess (Mintel, 2009). Carnival Corporation & plc. is the parent company for some of the UK’s main brands like P&O and Cunard. The company accounts for 50% of the market in terms of passenger capacity (Mintel, 2008).
The brands with a major focus on the UK market are P&O Cruise Cunard and Fred, but also Olsen and Thomson Cruises with a combined 7-8% of capacity share (Mintel, 2008). Royal Caribbean operates two ships on the UK market and is considerably gaining market share, and audience admiration, especially thanks to the innovativeness of their vessels and their marketing campaigns efforts (www.rcclemea.com).
3. THE BRAND PORTFOLIO ANALYSIS
Considering the complexity and the context–specific nature of the portfolios, there are not exacting main guides for a good approach to brand portfolio management (Aaker, 2000). However, thanks to a framework taken from the Aaker’s book Brand Portfolio Strategy (2000), the report delineated some of the areas that will lead to the development of background information that will consequently guide to the identification of some of the RCCL portfolio options and issues and relative adaptations, which are the focus of coursework N2. According to Aaker (2000), the areas to look at are: Market Forces & Dynamics, Business Strategy, Brand Equities and Identities and Brand Portfolio Audit.
3.1. Market Forces & Dynamics
In this paragraph the report will take an analysis of the market forces and the dynamics of the market place, that it will eventually present insights for further analysis of strategies and recognition of opportunities. The analysis takes advantage of the 3C’s business module to analyse the main factors in strategic management: Customers, Competitors and Corporation (www.lacpa.org.lb).
3.1.1. Customers analysis
According to Mintel, almost a third of the UK population would consider cruising, but the sense of being trapped, having nothing to do and the perception of the cruise to be something for old people, closes the doors to an untapped potential that needs to be stimulated (Mintel, 2008). Furthermore it has been recognized by Mintel (2008), that once people have cruised then they tend to cruise again and again.
According to the www.cruisemarketwatch.com, one of the main website utilized by travel agencies (www.travelagentcentral.com), the cruise market is segmented around variables such as Geographic (Country of Origin, Language, Culture), Economic & Demographic (Income, age, Life stage, education, social status), and Psychographic (Interests, Life goals...), which if combined they outline the following market segments:
Abbildung in dieser Leseprobe nicht enthalten
Main RCCL direct competitor within the market place is Carnival Corporation. Over time it has been given the name of “Carnivores”, for the acquisition of a total of 16 cruise-line brands in the last 20 years (Vogel, 2009). According to Aaker (2009) each brand has different equities and provides benefits to a different market segment. The decentralized structure is a key element of CC strategy together with its brands autonomy and price autonomy.
As stated by Aaker (2000), when looking at the competitors it is useful to get relevant insights when comparing the different strategies. Findings from Michael P. Vogel’s article ‘ The economics of US cruise companies’ European brand strategies’ (2009), have highlighted the most significant differences between the two main players of the cruise industry. As opposition to its main competitor, RCCL global brands adopt a mainly centralized brand structure, uniform pricing and a globally marketed capacity (Vogel, 2009).
However when analysing competitors there is another sector to be taken in consideration: the indirect competitors, as suggested by Masterson and Pickton (2004). RCCL indirect competitors are considered by this report to be those types of holidays taken by customers instead of a cruise. A graph on the appendix (Image N3) will give a picture of the UK best preferences when selecting a vacation abroad. Taking from there, the indirect competitors for RCCL are: Hotels and Resorts, sky resorts, coach tours, golfing, lakes and mountain, backpacking, multi-country tour, Safari, Health Spas, Theme park, Boating holidays (Mintel, 2008). The substitute competitors are for example the purchase of a new car, or a new house, that will make the consumers to think of skipping vacations for that year.
Brief history: Royal Caribbean International was founded in 1968. The present parent corporation, Royal Caribbean Cruises Ltd., was integrated on July 23, 1985 in the Republic of Liberia under the Business Corporation Act of Liberia (Annual Report, 2008). Historically the primary focus of the RCCL was the North American cruise market with only two main Global Brands: Royal Caribbean International (RCI) and Celebrity Cruises, a brands acquired in 1989.
The company has acquired the Azamara Cruises in 2007 offering a “deluxe” cruise experience and then more recently the two brands Pullmantur and CDF Croisières de France for respectively the Spanish and the French market. It also has a 50% venture with TUI AG, which operates the brand TUI Cruises within the German market (The Annual Report, 2008).
Market segment: The RCCL mainly serves the contemporary, premium and deluxe segments of the cruise vacation industry, also including the budget and luxury segments. All of the vessels operate on a selection of international itineraries that call on something like 425 destinations (The Annual Report, 2008).
The Vision: “Our vision is to empower and enable our Employees, to deliver the best vacation experience to our Guests, thereby generating superior returns to our Stakeholders and enhancing the wellbeing of our Communities” (The Annual Report, 2008).
3.2. Business strategies
The last European Cruise Council Conference for the expansion of the cruise industry in Europe had seen the majority of the executives extremely excited about the enormous opportunities Europe has to offer a source for the market as well as a main destination for the future of the market (www.prowsedge.com).
CEO RCCL Richard Fain statement “we continue to expand our presence in Europe, a key focus for the company” makes it clear. The product-market scope for the corporation at the moment is the European market (www.royalcaribbean.com)
RCCL is adapting a brand strategy that has gone from a Global to, according to the latest RCCL brand acquisition, a more local brand strategy. In fact despite the efforts of RCCL to increase its presence in the European market by pushing the established global brand RCI, Celebrity Cruises and the acquisition of the third global brand Azamara Cruises, the European performances had not been satisfactory until the actual acquisition of the Spanish and the French “local” brands (Vogel, 2009).
RCCL has combined the three Global brands with two local, a strategy that according to Vogel (2009), can be called “glocal”, a hybrid of local and global. The scheme below it gives a clearer vision of the concept just mentioned.
illustration not visible in this excerpt
Michael P. Vogel (2009)
For the relevance of this report only three of the RCC Ltd brands portfolio will be taken into further analysis, selecting only those that are currently active within the UK market: Royal Caribbean International, Celebrity Cruises and Azamara Cruises.
3.3. Brand Equity and Identities
Brand equities will influence what portfolio strategy is optimal or feasible (Aaker, 2000). For example the identifications of the main element of Brand Equity and the Identity of each brand can help the report to discover areas of strengths and weakness. Also by analyzing each single brand, the report aims to find out more about each brands role within the portfolio and their position in the market place.
3.3.1. Royal Caribbean International (RCI)
Royal Caribbean International is a global cruise brand with 21 ships presently in service and one under construction (Mintel, 2010). The brand has position at the upper end of the contemporary segment of the cruise vacation industry, although because the high quality can also reach premium segments. For this reason the RCI is also able to attain the broadest market coverage of any other cruises (The Annual Report, 2008).
Francis Kelly has included the RCI brand in his book The Breakaway Brand: How Great Brands Stand Out (2005), stating that Royal Caribbean has become a category on one in the cruises industry - a breakaway brand that stands apart from others in its own category and often stands out as a model brand that transcend categories (Kelly, 2005).
Brand truth: Royal Caribbean brand offers a rich vacation experience from on board excitement and fun to off board adventure and action (Kelly, 2005).
Target Audience: Vacation enthusiasts, active adults seeking excitement and adventure. RCI are not stereotypical cruise passengers, but they like climbing, surfing, and ice-skating and take unique offshore excursions (Kelly, 2005). According to the company’s Annual Report (2008), main target are also first-time cruisers and experienced looking for new experiences. On regard of the customer segmentation presented in the previous chapter, Explorers, Marines and Little Mermaids are the closest matches to RCI target audience.
The identity: With the launch of the new vessel “Oasis of the Seas”, the biggest and most innovative ship in the world, RCI has revolutionized once more the cruise experience. So it did its identity; with the new brand concept: The nation of why not, RCI is giving a new promise: anything is possible on board of the RCI. More accordingly the new identity is floating nation where customers can do whatever they want, from ice-skating, to rock wall climbing (www.marketwire.com).
The RCI is a brand that is constantly looking to be on the edge of the innovation. It has product brands with unique features: the rock-climbing wall on board of many of the vessels had become an iconic feature of the brand itself, as much as the surf simulator and the Viking Crown Lounge, a signature design component of every RCI cruise ships (Weaver, 2008).
3.3.2. Celebrity Cruises.
Celebrity Cruises is a premium brand that offer personalized service, outstanding dining, and a sophisticated, upscale cruise experience. It has been elected four times “Top Cruise Ships in the World” in the large-ship category, as voted by the readers of Condé Nast Traveller (www.celebrity.com).
Brand truth: Celebrity Cruises delivers intimate experience on-board upscale ships (Weaver, 2008).
Celebrity Cruises offers a global cruise experience by providing a variety of cruise lengths and itineraries to premium destinations throughout the world. Celebrity Cruises is also the only major cruise line to operate a ship in the Galapagos Islands, Celebrity Xpedition (Brand Identity Guidelines, 2009).
The target audience: the most of the Celebrity cruisers are experienced cruisers. They are approximately 40 to 60 years old, boom generation who is ready for a little of “me time”, active community forward thinking people. They are also sophisticated and looking for qualitative experience (Brand Identity Guidelines, 2009). On relation to the customer segmentation they are more likely to be Explorers, Admirals, Little Mermaids, Escapers.
The identity: “The Celebrity “X” has always stood for one thing: First in quality” (The traveller, 2009). The letter X within the logo, come from the Greek alphabet, as “X” is the first letter in the Greek spelling of Chandris, is the face of the brand, with a strong recall, and a very powerful graphic (Brand Identity Guide Line, 2009). It also communicates sophistication and a sense of exclusiveness, which increase loyalty to current customers and set the brand a part from its competitors.
- Quote paper
- BA Global Marketing Matteo Fabbi (Author), 2010, Royal Caribbean Cruise Line (RCCL) - A Brand Portfolio Analysis, Munich, GRIN Verlag, https://www.grin.com/document/180656