They case can not be done as asked. We are only concerned with how royal carribean should position this new ship
in the market.
Hi. This paper needs to address market segmentation as well as targeting. These are some of the notes I have:
they should position the ship in the U.S. because in 2008, 10M of 13M cruise passengers world wide were from the
U.S. Also, the first full paragraph on pg. 2 says that 34M U.S. consumers intend to take a cruise in the next 3
years. While emerging markets are also a good possibility, the U.S. maket is by far the biggest opportunity for
them to take advantage of, and U.S. consumers will have more disposable income to spend on the ship.
The new ship has a 44% greater capacity than the current largest ships and the company should look to take
advantage of the largest ship in the largest market, whichis the U.S.
The next to last statement on pg 4 says that the company can earn extra revenue per passenger due to passenger’s
likelihood to stay on the ship because the ship is so large and has so many amenities that passengers don’t want
to or need to get off the ship.
I think due to the vastness of the ship that they can target several different markets. I think they can
successfully target contemporary, premium, and high end markets.
I also like the idea in the middle of pg 5. It says that the company should consider moving the ship around so
that consumers will know that the ship is only making a limited number of trips in one market, increasing the
To ensure that the Oasis of the Seas takes market share from competitor companies and not other Royal Caribbean
ships I think that the companys should target the premiuim and luxury segments and market the ship as a luxury
ship. If you look at Exhibit #3, Royal Caribbean is already part of the contemporary market but is not currently
part of the premium and luxury market. I think the company should target the premium and luxury markets and
ensure that it is taking market share from other companies since this ship will be the largest in the world and
very renowned and unique. Plus, since this ship is designed with more ammenities to keep the passengers on the
ship, those passengers should be more high end so they will spend as much money as possible while staying on the
I think the target psychographic markets it should target are explorers and marines from exhibit #8. Explorers
have disposable income and take four or more cruises per year. Marines are upscale and active young
Exhibit #10 also shows that Royal Caribbean is not already active in the premium and luxury markets.
Also, here are a few other notes…
This case represents the classic example of a mature organization in a growth industry, Royal Caribbean (RC),
with a unique, new product � the Oasis of the Seas (Oasis) � the largest (to date) cruise liner in the world �
creating the critical determination of how to segment, target, and position this new liner � and not cannibalize
its existing product line of cruise ships. The Oasis was launched in 2009 with an addition of 5,400 berths. At
almost the same time, RC deleted 2,274 berths on its �Sovereign of the Seas� liner, perhaps for refurbishment and
consolidation, and in anticipation of the Oasis as shown in Exhibit 2 of the case. (Mark)
Geographic: At the start, the first discussion of segmentation might be a geographic one. The name of the company
implies its operation in the Caribbean, but its advertised destinations in Exhibit 11 of the case study are
international in scope (Exhibit 11) (Mark), therefore eliminating the risk of brand dilution. The following
markets represent possible opportunities to expand the market segments offered to the consumers whose tastes have
become more global, perhaps because of increased access to knowledge of different countries and the globalization
of commerce. The growth of bed days in those markets is demonstrated from 2005 – 2009 (Mark) as shown in Exhibit
� SE Asia � 1248%
� Africa � 303%
� South Pacific � 370%
� Far East (Orient) � 202%
� World � 295%
� Indian Ocean � 960%
� Unclassified � 926%
These markets would require that RC determine whether the ports at those locations are big enough to accommodate
the Oasis, and whether the profitability would be worth contributing to the enhancement of those ports in an
economic venture with local leaders if they were not. While the bed days listed in this exhibit are not as high
as the traditional Caribbean and Mediterranean destinations, they represent an opportunity for RC to make an
unprecedented �splash� and create higher brand recognition in the growing segments with the massive and unique
Oasis. While the opportunity exists to be �first in the market� with the biggest ship, others may follow, and RC
might wish to take full advantage of this opportunity in as many geographic markets as they can negotiate the
ship. The economies of scale will dictate thus, just as are the Panamax freighters of the world.
Psychographic: Since the Oasis is so large, it is literally a conglomeration of communities which may appeal to
those who can take longer cruises to more international ports, to different income levels, and to different
interests. This might include the �Explorers� and the �Escapers� in particular. Together, they represent 50% of
the psychographic market as Exhibit 8 lists. (Mark) In addition, the Explorers and the Escapers may be cross-
segmented by the age cohort of the Baby Boomers, the Silent Generation, and the Gen X�ers, due to their varying
affluence. (Kotler) The income psychographic of these groups will vary and RC can design the ship�s �communities�
to the income status currently offered on different liners in their fleet, i.e. contemporary, premium, and luxury
� Exhibit 7. (Mark) Having said that, the luxury class might be difficult if for no other reason that the
discrimination required by this class and the separation they might desire from those with different tastes.
Having defined potential segments, then RC must develop the specific targeting used to reach these segments. If
the geographic segment is utilized then, then RC might wish to emphasize the world-wide travel agent approach and
advertising in countries that have the psychographic interests that would make the Oasis an appealing cruise
experience. In fact, Exhibit 4 indicates the annual passenger growth in foreign vs. North American has increased
almost 14%, compared to the North American market that has traditionally been the domain of RC. (Mark)
Correspondingly, in Exhibit 5, the average length of cruises have increased, which fits the income and travel
interests of the Explorers and Escapers we suggest segmenting. Interestingly, the North American passengers
demonstrate approximately one-third of the total passengers in the 2-5 day length of cruise from 1986 � 2008
category, which supports the notion that a world-wide targeting approach is viable, since two-thirds of the
market is still available to capture with longer cruises. (Mark).
As we can see, RC has not been capitalizing on the �Rest of the World� market (Exhibit 7) as has its biggest
competitor, Carnival Cruise Lines. The Oasis could attack some of that market share, and serve as the �forward
attack� on those markets, allowing RC to move in with its smaller ships. Even though RC had less than half the
capacity of the largest cruise line � Carnival � the Oasis may be able to make some inroads in the world market,
since it is somewhat underserved. All of that has changed. (Mark).
RC may wish to intensify its website with the �WHY NOT� campaign, which Oasis exemplifies to target the interests
of the segments. Perhaps targeting the ads to those who want the unlimited experiences of a �why not� company �
Exhibit 11 (Mark). The segmented markets are definitely at a point to ask �why not�. They have done it, and wish
to experience the rewards that the Oasis should offer them.
Interestingly, Exhibit 9 � �Reasons for having taken a cruise, by age and income�� support our proposed
segmentation and targeting approach. (Mark) For instance, the group, by income, that states �I love the
ocean/ships� is highest in the 35-54 and 55+ age groups, which supports our age cohorts above. The �multi-
destination� and �all inclusive� aspects by age, support the longer cruises and the international port emphasis in
our Geographic segment. (Mark)
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