MKT 3510

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Feb 20, 2024

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MKT 3510 Customer Value and Relationship Term Project Group 5: Royal Caribbean Cruise Line Dr. Art T Weinstein April 25, 2023

Background Royal Caribbean Cruise Line is a global cruise vacation company that was founded in 1968 by a group of Norwegian shipping companies. The company is headquartered in Miami, Florida, and currently operates 27 ships that serve customers around the world. Its fleet includes some of the largest and most innovative ships in the world, such as the Symphony of the Seas, which can accommodate over 6,000 passengers. The company is committed to sustainability and has implemented several initiatives to reduce its environmental impact. It has installed advanced wastewater treatment systems on its ships, uses energy-efficient lighting and appliances, and has reduced its reliance on single-use plastics. Market Situation The cruise industry is extremely competitive, with numerous large firms competing for market share. Carnival Corporation, Norwegian Cruise Line, Princess Cruises, and MSC Cruises are among Royal Caribbean's main competitors. These competitors offer a variety of price points, destinations, and onboard amenities to attract customers. For example, Carnival Cruise Line is known for its affordable pricing and family-friendly atmosphere, while Norwegian Cruise Line has a reputation for offering a more premium experience with upscale dining and entertainment options. Princess Cruises caters to an older demographic with its more traditional cruise experience. In addition to these major competitors, Royal Caribbean also faces competition from smaller niche players and river cruise companies. Royal Caribbean has worked on innovation to maintain its market position, offering new ships with cutting-edge technology and a wide selection of onboard facilities and activities. Technology has played a vital role in the company’s growth and success. Many industry firsts

have been launched by the company, including the first rock climbing wall at sea, the first ice skating rink at sea, the first bionic bar, and the first surf simulator at sea. Royal Caribbean has also made significant investments in onboard technology, such as high-speed internet access, digital key technology, and mobile apps that enable guests to manage their cruise experience from their smartphones. To fulfill the demands of a varied range of travelers, the company offers a variety of cruise products and services. The fleet of ships operated by the corporation ranges from small, intimate vessels to enormous, resort-style ships capable of accommodating thousands of passengers. To cater to a wide range of tastes and interests, the firm provides a choice of culinary options, onboard activities and entertainment, and shore excursions. The Cruise Line welcomes a diverse range of passengers, including families with young children, couples, lone travelers, and groups of friends. Water parks, zip lines, Broadway-style performances, and exercise facilities are among the onboard amenities and activities available to appeal to a wide range of age groups and interests. To meet a variety of dietary needs and tastes, the cruise line also provides a variety of dining options, including specialty restaurants and casual eateries. Various economic developments, such as swings in fuel prices, changes in consumer buying patterns, and alterations in global economic conditions, have had an impact on the cruise business. Despite these obstacles, the company has expanded its fleet and introduced new itineraries to suit shifting consumer demand. To strengthen its bottom line, the corporation has also employed cost-cutting initiatives such as energy-efficient technologies and operational improvements. Segmentation and Positioning Royal Caribbean's target demographic is primarily domestic and international middle to upper-income households, with a focus on families with children and multi-generational groups.

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Another significant portion of the company’s frequent customers also includes the baby boomer generation. Passengers are described as adventure-seekers looking for a unique travel experience and repeat customers through its loyalty program, with a focus on providing a high-quality, memorable experience that keeps passengers coming back. The company's loyalty program, Crown & Anchor Society, rewards repeat customers with special perks and benefits, incentivizing them to book future cruises with Royal Caribbean. Similarly, it focuses on customers who are looking for a longer, more immersive travel experience, offering cruises that range from a few days to several weeks in length. Their target demographic may vary depending on the specific ship or itinerary. For example, the company's Oasis-class ships, which are some of the largest in the world, may attract a different demographic than its smaller, more intimate ships. Similarly, cruises to destinations like Alaska or Europe may attract a different demographic than cruises to the Caribbean or Mexico. Psychographic interests include interest in a unique travel experience, with a focus on adventure, excitement, and exploration. Their marketing efforts emphasize the thrill and excitement of cruising, highlighting onboard amenities like water parks, rock climbing walls, and zip lines, as well as shore excursions that offer opportunities for adventure and exploration. S-Q-I-P + Digital Findings (Highlights): SERVICE 1. Conducts and utilizes customer satisfaction surveys. After each cruise, Royal Caribbean gives a survey for customers to take, they use this information for their employees to assist the customers while on board. Leading to the next topic for service. 2. Customer service training is provided for all employees. Using the data collected from their customers, special customer service training is given to all employees, regardless of

their role. This shows that they care deeply about ensuring that their customers get the best customer service possible. “Royal Caribbean Cruise Ltd has created online, self- paced learning modules for the property-management software the company plans to introduce on the 35 ships in its Royal Caribbean International Celebrity Cruises and Azamara Club Cruises fleet” ( Emerald Publishing Limited, 2014 ). 3. Provides customers with a range of professional and technical assistance. Through their customer service training program, any employee on board their cruises can give excellent customer service to any customer who needs it. Meaning that requests for aid from the customer can be met by someone on board who is an expert in the field they need aid for. Royal Caribbean also has a vast FAQ page, allowing customers to get quick and easy answers to many different questions. 4. Provides a means for customers to comment or complain. Through the company’s vast FAQ page, Royal Caribbean does a great job at providing places for customers to give their input about their service. Not only that, but Royal Caribbean also has a way for customers to speak to support directly 24/7. QUALITY 1. Selecting vendors based on quality, not price. Royal Caribbean is very thorough when it comes to selecting any vendor or product to place on board their cruise lines. They strongly believe that if the quality is poor, customers will notice, and it will be more expensive to lose that customer than to simply purchase a vendor of higher quality. 2. Poor quality is expensive but good quality has a high return on investment. Following up on the previous point, Royal Caribbean believes that providing a low-quality product to the customer will achieve nothing but the loss of a customer. Gaining that customer back

will be more expensive than if they had simply spent the money on a higher-quality vendor. This shows that the company is willing to work hard to give guests the proper products and services the first time. 3. Committed to design quality. Based on the last point, Royal Caribbean is highly focused on giving their customers the highest quality products the first time they come to their cruise line. In a quote from Harri Kulovaara, the Executive Vice President of Royal Caribbean: “No one here wants to repeat what we did the year before. Every year it’s about working together to create something new, something that’s better than before. If we aren’t raising the bar, we aren’t operating at our highest potential.” 4. Monitors supplier/vendor performance. As Royal Caribbean places such high emphasis on giving their customers superior quality in their vendors, it is no surprise that Royal Caribbean puts a lot of work into ensuring that the vendors they choose are performing. IMAGE 1. Employees represent Royal Caribbean ideals. Through its hiring and training process, Royal Caribbean prides itself on its employees that are representatives of their ideals. 2. Royal Caribbean eliminates obvious examples of excess. Royal Caribbean spends a substantial amount of time on quality control and customer service, as such the company is very efficient when it comes to eliminating excess. They will always be quick to admit there is a problem and focus their efforts on resolving it for the customer. This ensures that their public image shows accountability and integrity, and that they truly care about their customers and how they are viewed. 3. Royal Caribbean uses systems thinking. Royal Caribbean has made it clear that they are dedicated to providing the utmost quality, through this, they have developed the mindset

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that no issue is isolated. This is why every single employee on their ships has to go through a customer service training course, as they believe that regardless of where the issue was for the customer, anyone in the company has the ability to aid in solving it. 4. Royal Caribbean encourages its employees to seek a positive work-life balance. This is something that the company does not explicitly focus on, but it is apparent that this is the case. Their website for careers states that their company provides a total rewards package aligned with health and wellness for each of their employees. They also provide aid for some of their employees to continue with their studies while working for them. The reason Royal Caribbean puts this much effort into their employees is because they focus on having top-notch quality and service, and they know that if their employees are not happy with their working conditions, these things will be impossible to achieve. PRICE 1. Royal Caribbean starts with the customer first when establishing their prices (2). Royal Caribbean is one of the costliest cruise lines, however, Royal Caribbean has stated that they take into consideration many factors when setting the price. Including ships, sailing dates, length of the cruises, how many guests are in each room, etc. Along with this, guests can always check the updated prices for any cruise on their website. 2. Royal Caribbean product or service is viewed as exceeding the expected benefits (2). This is certainly true as Royal Caribbean has always put the most effort into ensuring quality and service for their customers. However, I would say this does not always happen, as many customers reviews state that the cruise was expensive for what they received.

3. Royal Caribbean raises both quality and service to new levels. While they are on the pricier end of cruise lines, there is no doubt that the money is being put to good use. With the utmost emphasis being placed on quality and service for their customers, Royal Caribbean nearly always provides the best quality and service. Along with this, the vice president has stated that their permanent goal is to continue raising the bar for quality and service, stating that they are not reaching their potential if they aren’t raising the bar. 4. Royal Caribbean is value-adding. Throughout this analysis, it shows that Royal Caribbean focuses on ensuring the best quality and service for their customers. As such, these improvements will cost more money for the customer, however, it is usually viewed by the customers as worth the money. DIGITAL 1. Use of data. Royal Caribbean uses data to fuel the quality and service for their customers. Whether it is through monitoring their vendor’s performance and making decisions on whether to change or keep the same vendor. Along with using the data gathered from customers to continuously improve their customer service training. 2. Website. Royal Caribbean has a vast and in-depth website, allowing a customer to get to anything they could need when it comes to interacting with the company. Whether it be setting up a cruise, providing feedback, special deals, and even their sponsors. However, it can be a bit overwhelming due to the vastness of the website. 3. Personalization. Royal Caribbean does a great job at providing excellent value and service to their customers; however, this is something that they are lacking on. While they do have options for people to choose and personalize their cruise, these options are similar if not the same to what other cruise lines offer.

4. Use of digital technologies. Royal Caribbean overall does a great job at using digital technologies, they have used technology for the ease of their customers and to provide value. As stated in an interview with Major Highfield, Director of Digital Product at Royal Caribbean, they have a four-step journey for their customers. Starting off with their website, allowing them to easily find a cruise that interests them and book it. Secondly, they plan for their cruise, Royal Caribbean offers many excursions and uses their website to walk them through the options available. Thirdly, Royal Caribbean helps the customer manage their cruise while they are on it, whether it be changing excursions, understanding what is available on board, etc. Lastly, they have a procedure for when their customer finishes their cruise, Royal Caribbean will remind them of what they did throughout the cruise, and how they can do it again whenever they wish. Recommendations: Customers are heavily satisfied with Royal Caribbean's service, image, and quality, which demonstrates the company's success in these areas. Some passengers believe that the cruise could be lower in cost given what is provided. It would be an excellent move for this company to let their current or potential customers know that their money is allowing for improvements in service and quality, which is crucial as service is the most important aspect of SQIP. Consumers are more inclined to believe that their spendings are worthwhile when they are aware where their money is going, especially if they’re getting outstanding service out of it. Proposed customer value: Customer Value Propositions are meant to distinguish businesses from other companies and set them apart, which Royal Caribbean's does. They are acknowledged as one of the most ethically conscious companies. Employees are dedicated to always acting appropriately. Royal

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Caribbean has an excellent Customer Value Proposition statement to show their values which is “Make good choices.” This reflects the previous recommendations made. As this company allocates more money towards service and quality, their statement and morals show it. Relationship marketing strategies and ideas: Loyalty Program : Royal Caribbean's loyalty program, the Crown & Anchor Society, rewards loyal customers with exclusive benefits, such as priority boarding, access to exclusive events, discounts, and free onboard amenities. This program is designed to make customers feel valued and appreciated, encouraging them to book with Royal Caribbean again in the future. Personalization : Royal Caribbean uses data analytics from their previous customers, developing customer profiling and providing a personalized experience for each guest. After collecting information about their customer's preferences and behaviors, the company Royal Caribbean can customize its services to each guest's individual needs and desires. Social Media Engagement : Royal Caribbean has a strong social media development including different platforms, which actively engages with customers through content and programs. Currently, the company uses social media to communicate and connect with customers, share important information about events and on-board updates. This space also gives them the benefit of having constant feedback. Customer relationship ideas : 1. Connect the health and wellness mindset with their service. Offering personalized dining experiences, such as custom menus based on customer dietary restrictions and preferences. Adding group and individual exercise classes, partnering with exporters to meet other customer needs.

2. Implement a customer feedback program for specific areas of experience including on- board stores, having a clear background of what their customers like to buy or would like to have on the cruise. 3. Improve in reducing response times for customer inquiries., giving effective and efficient solutions for their customers. They could develop a program for their workers to have better systems, while including technology. 4. Host additional live events and meetups for Royal Caribbean customers, both onboard and on land, to build a sense of community and foster customer relationships for different age groups. 5. Disclose any additional fees including gratuity before boarding, showing transparency and the complete budget a customer should have for getting into the full experience.

References: Royal Caribbean Company: Business Strategy Analysis - 2003 Words | Report Example . (2020, October 17). Free Essays. https://ivypanda.com/essays/royal-caribbean-company- business-strategy-analysis/ Vision | RCCL Investors . (n.d.). https://www.rclinvestor.com/about-us/23-2/#:~:text=We %20always%20provide%20service%20with,is%20brought%20to%20our%20attention. Market Share | Cruise Market Watch . (n.d.). https://cruisemarketwatch.com/market-share/ Weinstein, Bishard, Flack, Sturgeon, A., Autumn, Rebecca, Kaeleigh. (2022). How Royal Caribbean Navigates Stormy Seas: A Customer Value Analysis. Journal of Creating Value . Royal Caribbean: Business Model, SWOT Analysis & Competitors 2023 . (n.d.). GITNUX. https://blog.gitnux.com/companies/royal-caribbean/ Pro, E. (n.d.). Royal Caribbean Cruises Marketing Process / Customer Value Analysis . embapro.com. https://embapro.com/frontpage/marketingprocesscoanalysis/32047-royal- caribbean-cruises Matousek, M. (2019, December 16). Royal Caribbean uses this psychological trick to get you to spend more money. Business Insider . https://www.businessinsider.com/how-royal- caribbean-gets-customers-spend-more-money-2018-4 Royal Caribbean Group. (2022, September 7). Our history - Royal Caribbean Group . https://www.royalcaribbeangroup.com/our-history/ Wikipedia contributors. (2023). Royal Caribbean International. Wikipedia . https://en.wikipedia.org/wiki/Royal_Caribbean_International

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