The cruise industry, hit hard by COVID-19 and post-pandemic restrictions is now as popular as ever. Cruises are capturing the hearts and dollars of a new cohort. And, the cruise industry is following some evergreen principles of marketing: a market is specific people with specific wants in specific contexts.
A recent conversation with a consultant and colleague who advises high-flying, funds-seeking, tech companies, indicated that start-ups have little patience for marketing principles. The need for speed to implement world-altering visions takes precedence over understanding basic success factors such as knowing for whom this innovation is designed, why does that customer (or the world) actually need this innovation and how, when and where will this customer (the world) use this innovation.
Lack of desire to understand the power of brands and marketing is symptomatic of the new basis for creation and selling. But, there will be costs for ignoring the fundamentals of marketing and branding. The adage is that no one remembers how quickly the resolution; they remember the quality of the resolution.
Knowing the who x why x how, when, where of your product or service is a basic. This knowledge comes from market segmentation.
There is a virtuous, profitable loop to consider. Market segmentation is foundational for effective marketing. Identifying markets and market potential are the underlying premises of market segmentation. Segmentation knowledge underpins customer-based strategy creation. Customer-based strategies help brands generate brand value. Brand value generates shareholder value. It is best to have the fundamental knowledge upfront. Without knowing the market, an entrepreneurial group runs the risk of waking up and finding that there are no users or buyers, no interest and no shareholder value.
A fundamental principle for understanding market segmentation is that people have different needs and behave differently depending on the situation. In other words, what people want is a function of who they are, why they want the product or service and how, when, where they use the product or service. Superior understanding of the consumer in this “cubic” manner provides outstanding competitive advantage. Segmentation recognizes that not everyone is the same; will want the same things; will use products and services in the same context.
To succeed, marketers must have superior understanding of the consumer, of their wants and the occasions in which they have these wants. This understanding along with associated, strategic actions leads to enduring profitable growth.
The hot-shot, jargon-spouters might take a look at just what is a market.
A market is a want. If there is no want, there is no market. If a want is incorrectly defined, then the market is incorrectly defined. If it is a global want, there is a global market. If it is a growing want, it is a growing market.
No matter how you describe “digital” it is not a want, not a market. People do not wake up in the morning and say, “I want digital.” They have a want and digital may be how to deliver the want or it may be the way the consultant describes the business model.
Take the time to know your prime prospect and your prime prospects’ wants.
Look at markets flexibly, challenging the status quo. Our goal must be to identify market opportunities before our competitors do and to be clever enough to take advantage of these opportunities.
So, maybe the newer, tech companies and other fast-moving industries seeking cash infusions are rejecting serious market knowledge. But, if these companies want to learn how critical marketing principles are to innovation and generating enduring profitable growth, look no further than the established, suddenly hot, cruise business.
The cruise industry is leveraging the who x why x context approach. The full-tilt entertainment, exercise, theme park, buffet-laden, all-day cuisine, floating resorts are refocusing and rebranding some of their products to address a growing group of customers unlike the current core customer “cruisers.” The cruise industry sees a new market. And, the cruise industry is acting on this knowledge.
According to The Wall Street Journal, younger people are increasingly choosing cruises for vacations. To optimize this news, the cruise lines such as Royal Caribbean, Carnival and Norwegian are rapidly adapting their offerings to meet the parameters of this new market.
Extrapolating from the reporting. It appears that the cruise lines are focusing on the “who x why x context” to profitably satisfy and grow the new market.
Here is how the cruise lines define this new market.
Who?
Rather than just using age, the cruise lines are decoding these new travelers as people who seek unique, adult-like experiences, such as spending time on private islands. These new cruisers care about money – not frugality, per se, but making sure their dollars buy as much experience as possible. In other words, they care about getting a really big bang for their bucks, even though these individuals have money to spend. These new younger cruisers also value their time to the extent that they are disinterested in long voyages. These vacationers want the energy of a sea cruise packed into a time frame to match their schedules. And, these travelers seek the feeling and the status of an upscale, premium experience that only older rich people might otherwise afford. The younger cruisers are people who are eager to travel differently. These individuals like trying new ways to travel.
Why?
The cruise lines recognize that a vacation at a hotel has a lot of extra fees and might require other monies spent on off-premises places. Hotels and land-based resorts (even if the living quarters are on stilts) raised prices and fees after Covid-19. As did airlines which are needed to fly to the destinations. Younger cruisers believe the return on vacation investment will be greater and more valuable on a cruise rather than locking in to a hotel vacation. A cruise is an experience in and of itself, always moving, one long party, 24-7 refreshments and activities and opening new premium places to play. A cruise with private islands epitomizes the concept of a get-away, a fun-filled, exciting weekend. Further, although there is the privacy of some of the destinations, a cruise is also a social experience.
Context (how, when, where)?
The cruise lines see that the context for these new travelers is the long weekend (3-4 days) with adult-only, party-atmosphere experiences, on private islands with beach club amenities such as swim-up bars and DJ’s. Ship-based vacations that are like yachting but you do not own the yacht.
Simply put, the new cruise market – the growing want – has these three parameters:
Younger people who seek to affordable different travel
And, who want a social yet private energy-filled get-away experience
That is a long weekend premium party
Think Lenny Kravitz’ lyrics to Fly Away:
Let’s fade into the sun
Let your spirit fly
Where we are one
Just for a little fun
Oh, oh, oh yeah
… I want to get away
I want to fly away
Yeah, yeah, yeah
Of course, age is important for this market. Yet, the cruise lines know that the who x why x context parameters describe the new market in ways that provide incredibly detailed direction for R&D. As the CFO of Carnival told The Wall Street Journal, “We’re not focused on age, per se. But, we’re focused on the target market and usually there’s an age range for the target market.”
Royal Caribbean told The Wall Street Journal that one in two passengers are between 27 and 44 years old or younger. So, along with Baby Boomers, cruises are attracting twenty-somethings. Royal Caribbean’s CFO reported that to optimize this new market, Royal Caribbean intends to “cultivate the next generation of cruisers.” A cruise trade group indicated that “Millennials combined with Gen Z (12 to 27 years old) account for 36%” of those taking cruises.
If you do not think this new market is a big change for the cruise lines, take a look at the 1972 cast of the movie The Poseidon Adventure, a disaster film about a cruise that goes upside down, literally. Shelley Winters, Ernest Borgnine, Gene Hackman, Jack Albertson, Leslie Nielsen and more. To be fair, there were three ingenues in the film, but the overall groups of stars were not young cruise customers.
In order to find competitive advantage in our fast-paced changing world, it is imperative that companies have the clearest understanding of their customers from all dimensions: what they buy, who they are, why they buy, how, when and where they use. Leverage this understanding. Use 3-dimensional market segmentation as the first critical step.
Contributed to Branding Strategy Insider by: Joan Kiddon, Partner, The Blake Project, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I
At The Blake Project, we help clients worldwide, in all stages of development, define or redefine and articulate what makes them competitive at critical moments of change, including defining a vision that propels their businesses and brands forward. Please email us to learn how we can help you compete differently.
Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Growth and Brand Education
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