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Cruising Experience

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As an Italian company there is a great opportunity to sell brands like Prada and Armani

January 15, 2013- 

Costa’s ability to create distinctive products for individual markets sets it apart, says Norbert Stiekema, executive vice president, sales and marketing for Costa Crociere. “We think differently about all our markets and try to analyse what they are looking for from an itinerary, from a food and entertainment perspective and, of course, language. Without becoming ‘vanilla’, we try to make our itineraries something special for all of them.”

With two ships in China from summer 2013 (up from one at present), confidence in the prospects of building a cruise source market in this region are high, says Stiekema. “We believe there is significant growth in the future for Asia. Our main source market in the region is China, where we are increasing capacity and working to capture the demand we are trying to create in that market. That’s a position we will further develop.”

The need for a market-specific approach is evidenced by the considerable range of cultures that exist within Asia, says Stiekema. “To people who live in the region, the Chinese and the Japanese are as different from one another as the Italians from the Germans.” These differences will be catered to through solutions such as different menus on the same ship.

Costa has spent time learning what its Chinese cruise customers are looking for, says Stiekema. “Firstly, they travel with their extended families, so from a pricing and marketing perspective we have to think differently about their needs. Secondly, they love shopping, not for cheap goods but for quality. Obviously we have a great opportunity, as an Italian company, to upgrade the shops to sell brands like Prada and Armani, with a couple of French brands too. This helps us position ourselves as Italian/European against the competition over there and be closer to what our guests are looking for.”

The big question mark in any market, admits Stiekema, is what people are prepared to pay for a holiday. “If we are able to explain the beauty of a cruise, the unique experience, there will be more demand for it. If there is more demand, prices will go up. If we are bad at explaining it – if there remains a thought that a cruise is just a form of transportation – it’s going to be more challenging.” In developing markets such as Asia, travel agents are crucial to helping sell the relatively new concept of cruising – not always a simple proposition, as agents are state-owned. “The cooperation of the agencies is absolutely key because they play an important role in explaining what cruising is about.”

This communication is essential in a region where many people are taking holidays for the first time. The concept of ‘holidays’ that developed in Europe in the 1950s is not fully understood, says Stiekema. “In China, people’s first holiday will not be a cruise; it will probably be a visit to Hong Kong or Japan. Then maybe they would go to Paris or London, and only then go on a cruise. We have to work with the trade to make sure that people who have been taking these types of holidays are offered a cruise.”

Despite the excitement of growing these ‘uncruised’ markets, Stiekema is quick to add: “For us the main focus is still Europe. We are Europe’s number one cruise company and that’s a position that we need to develop further.” The challenge in Europe is to introduce cruising to a younger target market, says Stiekema. “In Europe, I think growth will continue because more and more people will recognise that cruising is not only for older people. They will see the tremendous value that a cruise is offering from a holiday perspective – being able in one or two weeks to see so many different places in a luxurious way without leaving your hotel room is obviously very attractive. Looking at the world from a ship is not like looking at the world from a coach or a car.”

Managing the introduction of new source markets adds significant levels of complexity to the pricing and sales system used to process the new business. Costa’s global pricing system is similar to those used by airlines but with added complexity to take account of cruises with multiple board levels, explains Stiekema. Revenue management takes place behind the scenes and the complexities of the pricing system are hidden from the prospective guest booking a cruise. Costa uses a tailor-made version of the PROS revenue management system’s Cruise and Maritime software. “We are very flexible with our pricing and have made a major investment in our revenue management system. We link service to pricing, with four categories of offer,” he says. “The system is simplified, to allow the customer to make the choice.”

Costa adheres to three main business priorities, says Stiekema: to drive demand via itinerary planning, segmentation and positioning; to ‘harvest’ by supporting the trade with training systems, direct channels, call centres and the web; and to optimise capacity. These principles, and the activities they involve, will be central to the task of building new and often complex source markets for the brand.

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