Posted: May 25th, 2022

Cruise Customer Relationship Management

1. Should Carnival do CRM?

Carnival should definitely do CRM. Carnival obtained its identity as the fun ship when its maiden voyage ran onto a sandbar: the management team turned the disaster into a enjoyable experience for passengers by opening the bar for them. It was an inspired reaction to a difficult situationand it helped to earn the cruise line its reputation.

 

However, having developed over the decades and become a mid-tier line (neither on the cheap nor on the expensive sidethough it does offer an experience that competes just as well against any of the luxury brands), Carnival wants to expand its services to the untapped market in North Americai.e., all the people who have never been on a cruise before. To attract those customers and get one-time cruise customers to become repeat customers, CRM is necessary.

 

CRM is customer relationship management and it is data-dependent. That means it requires some assistance from the IT department in terms of gathering and organizing data on customers. By having all the data collected and accessed in one place, managers can see what guests are interested in, what made their experience good or bad, whether there is validity to their complaints, and whether they are customers that Carnival should go out of its way to attract back. IT and IS are ways to generate value creation by getting to know the customer better. It is that simple.

 

2. What impact/s can information systems have on the five competitive forces at Carnival?

IS can impact the five competitive forces at Carnival by providing CRM with information about the cruise lines guests that otherwise would not be available. Since Carnival is the fun cruise line, it pays to be able to know what makes the experience fun for its guests. Opening the bar for the stranded passengers on the maiden voyage may have been a fluke accident that helped create the lines image, but as the years pass management needs a way to be able to get in touch with its passengers once again. Barring a grounding on a sandbar, the Carnival Cruise line must use the tools that are out there to connect with customers. IS allows the cruise line to connect with passengers by generating information about them, collecting their data so that a profile is provided to managers, and enables the line to cater to the guests it seeks to win for repeat purchases.

 

IS allows for industry analysis, value chain analysis and customer service life cycle analysis (Piccoli, p. 235). Categorizing systems also enable the line to better understand its passengers by projecting models that will show the effect of specific actions towards a specific type of customer and how it will benefit the line. By analyzing the industry, Carnival can see what its competitors are doing so that it can match their output. By analyzing the value chain, Carnival can see how it is effectively creating value for the consumer, and by analyzing its own customer service life cycle, Carnival can see the progression of steps that a customer goes through when considering whether to purchase a ticket on Carnival Cruise. By anticipating that process, the Cruise line can better prepare the right pitch and product for the consumer and attract more business.

 

3. Give an example of how IS can impact at least one aspect of the value chain at Carnival.

IS could be used to attract vacationers to cruises by gathering data on how people from a specific demographic, region, or consumer group make decisions about where to go for vacation, what to do, what has the best offer, and why they choose that type of vacation. For example, if a mother and father who aged 35 have two children who are ages 2 and 4, they might prefer a vacation where they can have fun with the childrensomething like Disney World. So how can Carnival attract that family to the cruise? IS can provide the cruise line with a profile of the family, show information on what type of services the family often spends money on (whether or not Mom likes to go to spas, etc., and whether or not Dad likes to go to bars or shows). It can show how the parents spend money on the kids, and what types of fun activities they like to do.

 

If the findings of all this data reveal that there is a trend about what families like this do with their free time and their extra cash reserved for vacations, Carnival could adapt itself so that it offers these types of activities to the targeted consumer. It could advertise for instance to the female demographic with pictures of spas on the cruise and a relaxing massage that might be appealing, and in the same advertisement there could be something that shows the Dad entertaining the kids at a ball pit or at a fun park on the ship, at an in-door pool or at a show that the kids would enjoy. Then it could show a picture of Dad getting some me time at the bar or watching a sports game with other males. This type of marketing is targeted to appeal to everyone in the family and show that there is something fun for everyone to do on the cruise. If the families that IS profiles are interested in beaches, then the marketing could also show that of course the cruise line also stops at the beach.

 

What IS allows the company to do is gather and pool information about the targeted market, show what its consumer habits are and what the targets preferences are. The company can then adjust its offerings accordingly if the information reveals that this is a trend that is not being catered to by the other competitors. By focusing on this target and seeking to grow its consumer base, the company would achieve exponential growth year over yearall because the IS had made information available to the company about the consumer that it did not have before.

 

The customer service life cycle is facilitated by the implementation of IS because it allows the company to map the relationship between a firm and its customers and to identify the stages where customers are unsatisfied or receive substandard service (Value Creation with Information Services, n.d.). By finding out this information the company is better situated to respond to any circumstance or situation that might arise as a result of a customers experience on the ship. The goal is to build lasting relationships with customers so that they want to come back and want to bring their families and friends with them the next time around.

 

4. Discuss the upside potential of a CRM strategic initiative at Carnival.

The upside potential of a CRM strategic initiative at Carnival is that only 16% of the North American market had ever cruised, leaving a large untapped base of potential customers (Applegate, Kwortnik, Piccoli, 2006, p. 2). This means there is over 80% of the North American market still left to penetrate. This market moreover consists of vacationers who have never been on a cruise ship, so it is all about generating interest in this market and showing how much fun a first time experience on a cruise ship with Carnival can be.

 

For that reason, Carnival has to offer something for everyone. Using CRM, it has to get to know its customers and find a way to penetrate the rest of the market. It has to better understand these consumers and find out what they are looking for in a vacation experience. It could show that if vacationers are cost-conscious, a cruise line like Carnival really offers the most bang for the buck.

 

CRM also makes it possible to develop better relationships with customers so that they return to use the cruise line for their vacation needs again and again. Turning one-time travelers into frequent or constant travelers would add even more upside to adopting the CRM strategy.

 

CRM strategy opens doors for the cruise line in ways that otherwise would not be opened. Without having a strategy that allows the company to better get to know the consumer, there is no way to know what the customer wants, why the customer is there in the first place (maybe it was the price, maybe it was a sale, maybe it was the destination, maybe it was something to do with friends, maybe it was the amenities that had so much allure). The company has to find a way to know what the customer wants and then turn that information into more sales. That is what marketing is all about.

 

The upside potential of the CRM strategy is that the company can invest in the technology to gather information about consumers and then use that information to develop a way to better communicate with the consumer and show that the company truly cares about making sure the consumer has a good time. CRM strategies can ensure that the company does this in meaningful ways and not just in trite, generic ways. Finding out what would make the consumer happiesta free meal complimentary of the ship or a free show for being a loyal customerwould add to the upside potential of the CRM strategy. With the cruise line transporting more than 60,000 customers per day, there is so much market share there to tap into and compound exponentially that there is no reason not to use a CRM strategy to appeal to more consumers and connect with them in a direct way.

 

References

Applegate, L., Kwortnik, R., Piccoli, G. (2006). Carnival Cruise Lines. Harvard

Business School.

Piccoli, G. (n.d.). Value creation with information systems.

Value Creation with Information Systems. (n.d.). PowerPoint Presentation.

 

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