Celebrity Cruises Case Study Essay

1050 Words Aug 17th, 2012 5 Pages
StudyBackground Celebrity Cruises was founded in 1989 by the Chandris Group, a Greek company originally in the shipping business. In 1997, the company merged with Royal Caribbean International to become part of Royal Caribbean Cruises Ltd. The parent company was determined to keep the two brand’s marketing and operations separate in order for each to target their own market segments. Royal Caribbean Cruises Ltd. operates not only Royal Caribbean Cruises but also Celebrity Cruises, Azamara Club Cruises, Pullmantur Cruises, CDF Croisieres de France, and TUI Cruises (Royal Caribbean Cruises Ltd., 2012). Celebrity Cruises is situated in the premium market segment between luxury cruise lines such as Crystal Cruises and mass-market lines …show more content…
Celebrity Cruises must take control of its cost structure. Labor is already the company’s biggest expense, with the food and beverage department accounting for almost half of a Millennium-class ship’s employees (Frei, 2005). Shipboard employees do not receive annualized salaries but are employed under contract. For wait and housekeeping staff, 95 percent of their salaries are paid for in tips. In order to stay competitive the compensation structure for staff should be changed so employees can remain loyal to the company while being motivated to deliver quality and standards of excellence.

Recommendations and Conclusions In order to retain customers and increase revenues Celebrity Cruises must first focus their marketing efforts on the Baby-boomer market using a focus strategy. The growth of multi-generational travel is expected to rise as baby-boomers travel more and more with their families. Baby boomers with their purchasing power allow grandparents to travel with their children and grandchildren allowing the family as a whole to vacation together. Celebrity Cruises will be able to serve this narrow target market more effectively and efficiently than trying to serve a broad market. This allows Celebrity Cruises to achieve a competitive advantage in its market segment by meeting specific customer needs. Once the company targets this market, they can use the surveys that are distributed to guests at the end of the cruise to measure satisfaction. The

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