2010-11 Marketing Plan

CONTENTS

Marketing Background

Company/Product Review 3

Pricing/Competitive Analysis 4

Problems/Opportunities 5

Marketing Plan

Target Market 5

Sales Objectives 6

Marketing Goals and Strategies 6

Positioning Strategy 6

Marketing Mix Implementation Tools 7

Marketing Plan Budget and Calendar 8

Appendix 10

Kayla Lounsbery
Charles Wetzel

2
Company and Product Review
Our client is the cruise giant Royal Caribbean. Royal was established in 1968 by
three major Norwegian shipping companies: Anders Wilhemsen & Company, I.M.
Skauge & Company and Gotaas Larsen. Two years later, the first Royal Caribbean ship,
Song of Norway, entered service on the high seas. In 1993, the company went public on
the New York Stock Exchange under the symbol, “RCL.”
Royal Caribbean offers its customers a choice between six different classes of
ships and offers 36 different variations of sailing vessels in North America and six more
worldwide. Destinations range from Alaska, parts of Asia and down to Australia and
Hawaii; as well as the Bahamas, Bermuda, Caribbean islands, Mexico, Panama, Eastern
coastlines of South America, and transatlantic voyages.
The company’s vision is to be constantly associated with excellence. On their
website, the company details that their focus begins on employees delivering their best to
customers (guests) which generate returns for stakeholders that enhance their respective
communities. The ongoing philosophy that the company credits their success to is the
question: “Why Not?” This idea pioneered Royal’s decision to “stretch” their Song of
Norway ship to add a 42% increase in passenger capacity, in 1978.
The “Why Not?” philosophy has also inspired ad campaigns in the early 2000’s
that aimed at juxtaposing numerous on-and-offshore activities, such as: “Why not ice
skate on the equator and climb mountains at sea?” The company ran one minute
television ads accompanied by 40 print ads in newspapers across the country.
As of 2010, Royal Caribbean now maintains the international commercial cruise
industry’s 2nd largest market share of 22%, and their total worth has continued to
burgeon.

*courtesy of CruiseMarketWatch

3
Pricing & Competitive Analysis
Based on the on CruiseMarketWatch’s 2010 analysis, Carnival dominates the
commercial cruise market worldwide. We believe it would be beneficial to Royal
Caribbean if we compare them to the industry leader using both price and market
comparisons.
For an accurate understanding of Royal Caribbean’s pricing, our firm compared
rates to that of Carnival by narrowing downing the numerous options consumers have
when booking a cruise. First, we focused on only destinations within the Caribbean Sea.
This destination is a top attractor for new-to-moderate cruise costumers and offers plenty
of opportunity for healthy corporate competition. Secondly, we narrowed the cruise
length down to 3-6 nights. This choice reflects the moderate choice between both short
and long extremes between cruise lengths. Finally, we decided to use Travelocity, in the
same way traveling consumers might use to do their own expense-comparisons.

Price-per-night Comparison on 3-6 Night Cruise in Caribbean During 2010 (Travelocity)

Lowest cost Highest Cost
Royal Caribbean $57.00 $228.00
Carnival $42.00 $116.00

Our findings show that Royal Caribbean was almost equal in cost to Carnival on
cruise that had less stops and supported shorter traveling durations. When the days began
to equal up to almost a week, the price division split dramatically and Royal Caribbean
became twice as expensive of an experience as offered by Carnival. When compared to
Royal Caribbean’s own web pricing, the numbers remained the same.
Why there is such a distinguishable leap in pricing is not made explicitly clear by
Travelocity’s website. Upon further investigation, the two ships cater to different
demographics: Carnival’s ship focuses on amenities for families; especially children.
Royal Caribbean’s ship boasts kid-friendly amenities as well, but put more emphasis on
the quality of the suites and entertainment rooms that sound more directed toward adults.
Royal Caribbean adds more stipulations that can affect the price of a cruise:
Royal Caribbean International reserves the right to impose a fuel supplement on all guests if the
price of West Texas Intermediate fuel exceeds $65.00 per barrel. The fuel supplement for 1st and
2nd guests would be no more than $10 per guest per day, to a maximum of $140 per cruise; and
for additional guests would be no more than $5 per person per day, to a maximum of $70 per
cruise.

Price comparisons reveal a small handful of differences that separate Carnival and
Royal Caribbean, but a deeper understanding of the consumer who pays these prices is
integral to our firm’s formulation of Royal’s problems and opportunities. To retrieve our
deeper understanding, our firm is consulting MRI’s Fall 2008 analysis of cruise lines
used in the last three years. This study covers every demographical breakdown that our
marketing firm needs to bring Carnival’s and Royal’s differences to light. Areas of focus
we want to address are Age, Education, Household income, Region, Child age, Race, and
various media quintiles. Within each focus, we will compare index figures to show areas
of strength and weakness. (See Appendix for details).

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Problems/Opportunities
We feel the biggest problem Royal Caribbean faces is the narrowly defined box it
finds itself in. Its target audience is too specific, too narrow. Having the second highest
share of the market, Royal Caribbean is far from a niche cruise line. Royal Caribbean
should be the loyal opposition, preying on Carnival’s (the market leader) customers,
swaying them onto Royal Caribbean ships.
However, with the problems of a narrowly defined target and number-two-status
come certain opportunities. Phlea Marketing suggests that Royal Caribbean broaden its
target market to younger and ethnically diverse audiences, particularly the African
American market, in addition to their current target range. According to MRI’s Fall 2008
Product report looking at Royal Caribbean and Carnival cruise lines of the last three
years, the areas of younger adults and African Americans are where Carnival shows a
clear advantage over Royal Caribbean with African Americans being 36% more likely
than the average person to ride with Carnival and 6% less likely to ride Royal Caribbean
and adults ages 25-34 being 15% more likely to choose Carnival and 22% less likely to
choose Royal Caribbean. By directing our advertising efforts to this expanded target, we
hope to lure some of Carnival’s share of these demographics.

Target Market
Since we are seeking to diversify our target audience, the range of the target
audience will seem expansive but is still effectively grounded in research from MRI’s
Fall 2008 report. It shows that married couples are far more likely than any group to take
a cruise. Therefore, we are targeting families and married couples without children.
Royal Caribbean’s current clientele range in ages from 35-65+. However, to
acquire some of that younger Carnival market, our targeted demographic must expand to
25-65+. This age range still complies with our target being of married/family age.
A household income of $60,000 is desirable. This income level is lower than the
typical Royal Caribbean traveler, but it is a common income of riders of Carnival.
This number is also ideal because younger married couples without children and this
amount of income would still have a high level of disposable income available for
vacationing.
It is also important to make sure we are targeting an ethnically diverse audience,
especially including the African American market. Being currently at such a disadvantage
in this demographic, Royal Caribbean has a lot to gain.
The southern U.S. should also be targeted a bit more heavily. As MRI shows,
southerners are more likely than any other geographic region to take a cruise.
As far as psychographics are concerned, our target is largely a group of
“experiencers.” They love the outdoors. They are active and adventurous. Though they
have a full-time job they still make the time to be active and enjoy nature. They run. They
golf. All the while, our target is a hard-working, money-making group. They keep a
careful eye on the financial world and are fiscally responsible. They learn towards the
conservative side of things, likely a product of wanting to protect the substantial income
and assets they have acquired. They are heavy users of the internet, so they are
technologically savvy. However, they still enjoy the simple pleasure and luxury of
holding a beautiful full-color magazine. Overall, our target strives for the ideal balance
between work and play.

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 Obviously, and perhaps above all things, we want to target people who love to
travel. We will find them, whatever their demographic or psychographic, in what they
read, what they watch and what they listen to.

Sales Objectives
  Our marketing and sales goals need to reflect a worthwhile invest of the 
$50,000,000 budget allocated for this project. We believe that by targeting our 
underdeveloped markets, we can see returns equal to/and greater than our initial 
investment.  
  Markets we wish to add growth include two main foci: the 25‐34 age group and the 
black community that have substantially higher representation in Carnival. By increasing 
both demographics within Royal Caribbean by 10%, the campaign pays for itself in one 
year. Here’s our logic: 
‐ Increase black community participation by 10% from the current 587,000 
‐ Increase 25‐34 age demographic participation by 10% from current 759,000. 
‐ This adds 75,900 + 58,700   =   134,600 new Royal Caribbean customers 
At a conservative estimate of $200‐$400 tickets, these new customers will yield 
Royal Caribbean: 
‐ $26,920,000‐$53,840,000 in extra sales within the first year. 
All these factors assume the new customers take only one cruise for the year with 
Royal Caribbean. This leaves Royal Caribbean with room left for other areas to also grow 
and see repeated use, adding further to overall gain in a single year. 
 
Goals and Strategies:
Royal Caribbean remains number two behind Carnival. One approach Royal 
Caribbean could take is to appeal more heavily to the company’s core customer base. 
However, this option does not recognize areas for improvement and growth by solely 
depending on a core demographic that already invests in the company. By examining the 
marketing areas that Carnival exceeds Royal Caribbean, goals for improvement become 
evident.  
Our firm wants to diversify the people used in Royal Caribbean’s commercials and 
promotional materials (and homepage) in hopes of appealing to customers who may be 
familiar with cruises, but are new to Royal Caribbean. We believe this can be done 
inclusively, without sacrificing any of their customer base.  
We aim to resonate with: 
‐ Age, race, and demographics that have comparably higher index ratings under 
Carnival than they do under Royal Caribbean 
‐ Families with HHI > $60,000 
‐ Internet and TV users who both embody and/or exceed the prior  
‐ Core Royal Caribbean users who expect premium standards 
To accomplish this in our marketing implementation, we want to feature younger, 
more multi‐racial models who are enjoying sophistication that the older (and whiter) 
groups have enjoyed in Royal’s 40+ year legacy. Media vehicles used to bring Royal’s new 
appeal could include a heavy combination of primetime and standard television, 
supplemented by national magazine and regional out‐of‐home materials. 
 
Positioning Strategy
To achieve our objectives, Royal Caribbean needs to be repositioned in the minds
of our target audience. The transition must be made from Royal Caribbean seeming to be

6
a stuffy cruise line solely for well-to-do white families and older couples to a feeling that
Royal Caribbean is fun for everyone. We want an all inclusive client base.
In this hunt for younger and culturally/ethnically diverse cruise-goers, we need to
make sure not to alienate current customers or make them feel like “the place is being
taken over.” All-inclusive includes current Royal Caribbean customers, so it is important
to maintain our preferable position in their minds while still attracting these new
demographics.
To go about this there are a couple strategies we can use. We can target them all
at once through mass media or in segments through more niche media sources. But in
either of these methods of reaching certain groups within the target audience, the
advertisements should depict a group of cruise-goers that is representative of our target
and what should be taken away is that Royal Caribbean is a fun, enjoyable cruise line
where everyone can feel welcome and attain that much-needed relaxation and escape.

Marketing Mix Implementation Tools

Several tools are at our disposal to bring about the increase in sales we want to see
for Royal Caribbean. First, some work needs to be done in the areas of brand identity and
brand image. Royal Caribbean needs to change the way it presents itself. To reach these
demographics newly added to their target market, they need to present themselves in a
way pleasing to these groups while still satisfying current customers. Obviously, a new
advertising campaign is needed to achieve this, one that emphasizes diversity and fun.
Perhaps a new tagline that fits with the desired image is in order to use in conjunction
with the current slogan, one that can display the new fun side to Royal Caribbean.
All this brand image work is designed ultimately to lead to a change in brand
identity as perceived by the target market. This change or repositioning desired is
explained in detail in the previous section. The desired brand image and position in the
target’s minds is that Royal Caribbean is a fun, enjoyable cruise line where everyone can
feel welcome and attain that much-needed relaxation and escape.
A change in advertising message can also aid Royal Caribbean in achieving its
goals. This message will be conveyed through the ads themselves. We want the message
to reflect the new position we wish to achieve in the targets minds. Not only can the
message be shown in the ad, with people of different races, cultures and family
composition and size, all enjoying what Royal Caribbean has to offer, but the message
can also be changed with the addition of a new tagline for the campaign. Something
along the lines of “fun for everyone,” except much more clever and creative that a great
creative team working for Royal Caribbean can polish. The language of the ads should
also speak to the target. The copy should make a nod to the hard work the target puts and
suggest that Royal Caribbean would be their perfect fun escape full of adventure. The
imagery of the advertisements should depict the amenities and activities Royal Caribbean
has that would be particularly intriguing to the target audience. Among these could be a
driving range or golf course, rock climbing, a pool area or anything active. Also, and
emphasis should be put on the relaxing fun things that these hard-working people deserve
to enjoy, such as any spas or cocktail lounges.
The advertising media used will be a mix of internet, national television, and
magazine advertisements and local promotion in areas throughout the southern region of
the U.S. using outdoor advertising and regional magazines.

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 The internet ads will run on the sites most used by the target. These sites include
most all travel planning sites. Other areas of interest to the target are financial websites,
Yahoo, Overstock.com and news websites, particularly Fox News. A combination of
banner and skyscraper ads, some with animation allowing a variety of scenes to be shown
will be most attractive.
The television spots will run on both cable and network television during both
daytime and primetime hours. This medium is the best for showing and saying all that
Royal Caribbean has to offer. The visual aspect of Royal Caribbean is incredibly
important as is being able to show a variety of people to our target, making television
they perfect medium to invest most of our dollars. According to MRI’s Fall 2008 report,
our target is not the heaviest television user, falling mainly in the second and third
quintile, but there are certain stations where index numbers are incredibly high for this
group of people. For cable stations, the Travel Channel, National Geographic, BET,
Centric, the Golf Channel, ESPN, TLC and Fox news, receive high viewership from our
target and are ideal places to reach them and Fox is the network television channel to best
reach the target.
The national magazine campaign will include magazines that cover our targets
wide range of interests. Magazines could include, but are not limited to, Black Enterprise,
Cycle World, Endless Vacation, Esquire, Essence, Forbes, Golf, Modern Bride, National
Geographic Adventure, Runner’s World and Smart Money.
For the regional campaign in the South, outdoor advertising on billboards will be
utilized in the larger cities, such as Dallas, New Orleans, Miami and other cities of
similar size. We would want them in the downtown areas of these cities where are target
is likely to work and along the major commuting routes to catch them on their way to and
from work. The regional magazines will include, but are not limited to, Coastal Living,
Southern Living, Southwest Spirit and Texas Monthly.
We feel this selection of media and particular vehicles encompasses both the
current customers of Royal Caribbean and the new demographics we seek. There is a
balance between the active recreational side of the target and the hard-working, fiscally-
responsible side. There are also vehicles specific to our new younger and ethnically
diverse target, such as BET, Black Enterprise, Essence, TLC, ESPN and Modern Bride.
 
Schedule & Budget
Our firm has chosen a pulsing schedule to combine both the necessary repetition
and commitment of a continuous schedule along with the emphasis and dynamism of a
flight schedule. Because the campaign is allocated for one year, our firm wants to set
establish Royal Caribbean in the minds of the consumer six months prior to the height of
the vacationing season (May-August). Families and younger couples alike will be
planning summer vacations as early as November and December.
We believe it would be pertinent to begin a heavy and consistent television
campaign beginning in September, progressing up through November where we would
suggest Royal Caribbean maintain ad intensity until the New Year. From this point
forward, television scheduling begins to wane and supplemental materials in magazines
and out-of-home can begin adding dimension and emphasis on demographics we wish to
directly increase participation. All three campaigns begin to increase in frequency
beginning in March to attract last-minute consumers.

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 Royal should maintain ad intensity again for most of the Spring and Summer
months and presumably ending in August for a full 1-year cycle.

MONTHS

MEDIA Sept - Nov Nov - Jan Jan - Mar Mar - Aug

Television Begin a Heavy ad Moderate ad Heavy ad
low-medium presence. presence. presence.
reach. Build frequency Continue Build
Build building reach & frequency
frequency frequency.

Magazine none Begin a Continue with Heavy ad

low-medium medium reach. presence.
reach. Build frequency Build
Build frequency Focus on key frequency
Focus on key demographic
demographic
OOH none Begin a Continue with Heavy ad
low-medium medium reach. presence.
reach. Build freq. Build freq. Build
Focus on key Focus on key frequency
demographic demographic

BUDGET ALLOCATION

MEDIA MONTHS TOTALS

Sept - Nov Nov - Jan Jan - Mar Mar - Aug
Television 10% 20% 10% 20% 60%
Magazine - 8% 10% 12% 30%
OOH - 2.5% 2.5% 5% 10%

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 APPENDIX

Ages
140

120

100
Index Numbers

80
Royal Caribbean
60
Carnival
40

20

0
18‐24 25‐34 35‐44 45‐54 55‐64 65+

Education
180
160
Index Numbers

140
120
100
80
60
40
Royal Caribbean
20
0 Carnival

10
 Household Income
250

200
Index Numbers

150

100
Royal Caribbean
50
Carnival

Census Region
160

140

120

100

80 Royal Caribbean

60 Carnival

40

20

0
North East South Midwest West

11
 Child Ages
120

100

80

60
Royal Caribbean

40 Carnival

20

0
<12  12‐23  <2 years <6 years 2‐5  6‐11  12‐17 
months months years years years

Race
160
140
120
100
80
60
40
20 Royal Caribbean
Carnival
0

12
 Royal Caribbean
160

140

120

100
Internet
80
Magazines
60 TV (total)
TV (Primetime)
40

20

0
Quintile  I  Quintile  II Quintile  III Quintile  IV Quintile  V 
(Heavy) (Light)

Carnival
160

140

120

100
Internet
80
Magazines
60 TV (total)
40 TV (Primetime)

20

0
Quintile  I  Quintile  II Quintile  III Quintile  IV Quintile  V 
(Heavy) (Light)

13