Thread: Brand Building vs. Commodity Pricing

In the July 9th issue of Travel Trade, Seth Gittlitz had a thoughtful editorial commentary titled "Cruise Lines Need Brand Building Strategies, Not Commodity Pricing." A couple of things he said especially struck me.

He noted what commodity pricing has done to the airlines. This "melts the brands and erodes loyalty." All are about the same, offering substantially the same classes of service. Frequent flier programs really don't drive loyalty. Whoever has the cheapest price sells the seat. Branding is the most important strategy being lost in all this.

Cruise lines do far more for the travelers than airlines, and offer a wide variety of experiences -- different sized ships, cabins, ports, etc. A trip on one cruise line is very different from another.

"Passengers should respect the cruise line's brands, and learn how many choices are available to them," Gittlitz said. I think he hit the nail on the head. I'd love to see HAL focus on what makes her product special and work to further enhance that ... and not try to become all things to all people and dilute their brand.

A great post, JH!!! I agree with it wholeheartedly. Flying has become a modern form cruising in steerage - it's just for less time. I certainly don't want that to happen to the cruise industry!

I totally agree Jim but I also can see that the Bean Counters are working overtime in this area. I think HAL has known for years that they have a niche but as they keep their Mariners Happy and returning each time a Mariner returns they spend less and less money on board. Carnival the parent company learned a long time ago that the most profit is made on the first time cruiser who is having fun. They want every souviner, they want to gamble, they want to go to the spa and they MUST have pictures from all those special moments. So HAL in order to to keep our fairs competive also has to attract those first time cruisers. There starts that trying to offer all things to all people. HAL does not trun a profit on most of the S and R Class ships if they are lucky they break even. In recent years it has been the Vista Class that has turned the bigger profits allowing all of us to not look to the competition because HAL has raised their prices so much. Unfortunately as time goes on I think we will see HAL doing more things like the others in order to stay competive. I admit I am not happy with this but I also do not want to see the price of what I pay for a cruise double.

There was a time when we were loyal to just one airline. Not anymore. Especially since the number of flights from our airport down 60%!!! And there are very few direct flights. So now we hunt for the airline with the best schedule for us.

Bean counters -- HAL has them. And what laffnvegas said, Mariners are spending a lot less - they spend less on alcohol, pictures, etc. While the newbie cruisers do spend more money as they want those pictures, spas (I have never done one), etc. Thus HAL is spending more money attracking new cruisers and won't even consider giving all time Mariners a break in pricing or anything else. JMO

Originally Posted by laffnvegas

... allowing all of us to not look to the competition because HAL has raised their prices so much.

And this is the heart of the issue. If price drives us to another brand, then we toss loyalty to the side and push the cruise line into the same box with the airlines.

So that raises another question. If we Mariners appreciate the HAL product we've experienced over the past decade or more, how much more will we be willing to pay to keep it? We, as Mariners, have a role in this, too, don't we? Other lines charge significantly more than HAL, but people do it regularly because they are willing to pay the fare for what they feel they get ... an experience above the "mass market."

Therein is the educated consumer part. I may like to drive a Lexus, but cannot afford one. A Kia is the best I can do. I have to understand that they are different, and not purchase a Kia then expect the dealer to equip it like a Lexus. And that's what many HAL cruisers seem to be trying to do ... buy one product then demand it be changed into something else.

Am I making sense?

Jim- Everytime I cruise on an S class or R class ship, I am generally paying more for the privilege, especially if I want a veranda. Because there are not as many balconies, balcony cabins are generally priced higher pp and rarely, if ever, is there a drop in price. I believe at present I am paying more for the privilege vs. a verandah on another 2000+ person ship.
I actually find HAL to be more expensive generally that Celebrity, yet I still choose to sail HAL.
And since we Mariners still return without the perks HAL will not add any additonal benefits to it's loyalty program. JMHO

P.S. Jim -Frus for the topic! Thx!

Sher, it surprises me to hear you say Celebrity is Cheaper but I guess where I have compared them was Alaska. I know you got an unbelieveable deal but that was the very beginning of the season. I also do not think it is fair to compare Celebrity to HAL's S and R Class ships because those ships are a lot smaller and less passengers. The only fair comparison is the Vista Class ships. Unfortunately Celebrity does not go to the Mexican Riviera, actually other than Alaska they do not cruise where I can go other than the Caribbean and if I am flying to the East Coast it will be to jump on a HAL ships.

I pulled up a September cruise on Celebrity (I wanted to compare going out of Seattle but could not find a 7 day Celebrity out of Seattle) So I chose Vancouver comparing the Zuiderdam to the Infinity. I did not use the actual ship's web site but an on line TA that usually has competive pricing.

Here is the break down for the Infinity
Inside Oceanview Balcony Suite
Sun, Sep 02
Sun, Sep 02
$899
$1109
$1499
$2399
Sun, Sep 09
Sun, Sep 09
$819
$1099
$1249
$2299



Here is the Zuiderdam
Inside Oceanview Balcony Suite
Sat, Sep 22
Sat, Sep 22
$774
$839
$1459
$1639


Now granted the Zuiderdam is later in the month but she is also sold out earlier and Celebrity looks to have plenty of cabins and those are her last 2 cruises of the year.

I have looked numerous times just for the heck of it and always found Celebrity to be several hundred more. Plus Celebrity has very few 7 days cruises which is really the only thing I can take. Because they have fewer ones they sell out quicker and charge a lot more. I just tried to compare Oct 08 for our Eurodam they do not even have a 7 day listed so I went to Feb 08 and found all across the board that Celebrity was a lot more in all categories than the Westerdam or the Zuiderdam for the same ports. I would really like to try Celebrity but I am not willing to pay a lot more when I know I love HAL.

I have got it figured for what I save on HAL it is what Celebrity is giving to their repeat passengers. I think in the long run I would rather save the money up front

Granted HAL is not overly generous to their Mariners but I think they are trying. The new Mariner lunch was very nice and definitely better than just shoving us into the showroom for a free drink.

Jim .... Thanks for starting this interesting thread!

Lisa .... Exactly my thoughts on this :

Originally Posted by laffnvegas

I totally agree Jim but I also can see that the Bean Counters are working overtime in this area. I think HAL has known for years that they have a niche but as they keep their Mariners Happy and returning each time a Mariner returns they spend less and less money on board. Carnival the parent company learned a long time ago that the most profit is made on the first time cruiser who is having fun. They want every souviner, they want to gamble, they want to go to the spa and they MUST have pictures from all those special moments. So HAL in order to to keep our fairs competive also has to attract those first time cruisers.

We had lunch with two couples (both were long time cruisers) on a recent cruise who told they always had way under $100 on their On Board Account at the end of their cruises (not counting their auto tip add on). This was a 14-Night cruise!

They liked to drink but they NEVER ordered anything (not even a bottle of wine with dinner) ... but took advantage of every free function. They might walk around the town on a port stop but they never took an excursion ... not even a taxi on their own. Basically, they just stayed on the ship and spent absolutely NO money!

OK ... so we very seldom buy the photos, etc. any longer BUT we certainly do have whatever we want to drink and normally have wine with dinner. Also, we enjoy taking shore excursions ... either thru the ship or on our own. Yes, we still go to the casino several times on a cruise. (The casino expects our donation!)

If we couldn't spend money on a ship doing the things we enjoy, we'd rather stay home!!!!!

Even though we are an example of long time cruisers who are still profitable to a cruise line ... the NEW CRUISER is almost ALWAYS a "money machine" because they HAVE to have and do everything!

I agree with Jim's thoughts on this topic, without being a Mariner (but I hope to be soon). This won't be our first cruise, so as seasoned cruisers we spend less on the fluff. Every line wants those newbies. Unfortunately we never get off a 7 day cruise with only $100 on our bill, but we do have a great time.