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  Brands at Sea   Brands at Sea Brands at Sea: The Ups and Downs of the Cruise Industry  
In the $16 billion North American cruise business, Carnival has the lion’s share of the market at 55%, with Royal Caribbean second at 27% and Norwegian Cruise Line (NCL) third at 10%, according to Cruise Market Watch.

But in the choppy sea of brand differentiation, it is getting more difficult to tell Carnival from Royal Caribbean, and other cruise lines for that matter, given their similar routes, ships, and offerings. Both Carnival and Royal Caribbean, for example, travel to Alaska, the Bahamas, Bermuda, Canada, the Caribbean, Europe, Hawaii, and Mexico. (Royal Caribbean does go further afield, including such destinations as Asia, Australia, and South America.)

The ships themselves create even more brand confusion as cruise lines battle for supremacy in mind-boggling amenities. Royal Caribbean offers rock-climbing walls, miniature golf courses, ice skating rinks, surf parks, and zip lines. Carnival counters with water parks, jogging tracks, resort pools, adults-only retreats, and seaside theatres. Both cruise lines have a dazzling array of on-board entertainment, children’s and teens activities, and dining options.

Royal Caribbean is widely regarded as the cruise line that upped the ante when it re-positioned cruising as an adventurous, contemporary vacation that happened to be on board a ship; in fact, they were the first to add rock-climbing walls and ice skating rinks. More importantly, Royal Caribbean branded itself in a completely different way from its competitors, with television ads that featured rock music, youthful cruise customers having the time of their lives, and the theme “Get Out There.”

In the early days of the Royal Caribbean campaign, from 2000 to 2004, unaided brand awareness increased more than 30 percent, brand preference increased 30 percent, and loyalty program enrollment increased 90 percent. The average age of Royal Caribbean’s first-time cruising customer dropped from 44 years of age in 2000 to 36 years of age in 2004.*

Previously, cruise line brands were competing for the same customers – retirees, honeymooners, and people who liked to sit around and eat. Ironically, when Royal Caribbean expanded the market for cruises, the industry had to reinvent itself to compete head-to-head once again, but now with a whole different audience in mind – hence the ever more extravagant on-board activities.

After nine years, Royal Caribbean has moved away from “Get Out There,” but it is still pitching adventure with its current advertising. Carnival recently re-branded itself as the cruise line that is “Fun For All. All For Fun.” Carnival’s ads, in fact, are somewhat reminiscent of the youthful energy of Royal Caribbean’s original ads, perhaps because Carnival hired Royal Caribbean’s former ad agency for a makeover. NCL tries to differentiate itself with a concept it calls “Freestyle Cruising” – essentially pitching the freedom to do whatever you want on your cruise vacation.

Indeed, every cruise line seems to have its own way of basically saying the same thing: Cruising makes a great vacation. The good news is cruising has become cool again. While the industry couldn’t help but be affected by the economic downturn of 2008-2009, cruise lines continue to grow. A total of 13.445 million are forecast to have taken cruises last year, according to the Cruise Line International Association (CLIA), about 77 percent of them U.S. and Canadian residents. (Official final numbers aren’t in yet.)

CLIA forecasts a total of 14.3 million passengers in 2010, 10.7 million from North America and 3.6 million from international locations, an increase of 6.4 percent. CLIA says direct and indirect spending from cruise ship passengers accounted for an impact on the U.S. economy of over $40 billion in 2008.

Remarkably, cruise lines continue to build more ships, making them larger and more stupendous than ever. Fourteen new ships were introduced in 2009, and twelve more are scheduled for this year. Royal Caribbean will be adding “Allure of the Seas” (5,400 passengers), Carnival will launch “Carnival Dream” (3,600 passengers), and NCL will introduce “Epic” (4,200 passengers). According to CLIA, at least 23 new ocean-going vessels will appear between 2010 and 2012.

CLIA member cruise lines see a number of trends in 2010 that will continue to shape this dynamic industry. They note that theme cruises, such as music, food and wine cruises, are increasing in popularity, shipboard spas are attracting cruisers, and on-board speakers for enhanced enrichment programs are gaining traction. As for anticipated passengers, cruise lines expect baby boomers and repeat cruisers to be the biggest growth markets this year.

Cruise lines also say they’ve been boosting their marketing efforts for 2010. Of course, that includes the use of social media. Carnival, for example, has consolidated all of its blogs at a site called Best Blogs at Sea [], uses Flickr to post photos, has a YouTube channel, maintains a Facebook page, and actively uses a Twitter account, reports

Cruise lines will continue to fight for market share. They’ll need to find ways to break out of the mold and convince potential passengers to pick their ships and destinations over other cruise lines’ similar offerings – and also, over other vacation options. As they enter the critical winter cruise season, cruise line brands will undoubtedly have their ups and downs.

* Data from The Breakaway Brand by Francis J. Kelly III and Barry Silverstein (McGraw-Hill, 2005)    



Barry Silverstein has been a frequent brandchannel contributor since 2007. He has thirty years of advertising and marketing experience and is currently a freelance writer and marketing consultant. He founded and ran his own direct marketing agency and held executive positions with Epsilon, a leading database marketing firm and Arnold, a major ad agency. Silverstein is the author of three marketing books, including the McGraw-Hill book, The Breakaway Brand, which he co-authored with Arnold CEO Fran Kelly.

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