Category Wars: Cruise Lines Fight Commodity Image Amid Sea of Discounts, Options

Going on an ocean voyage used to be the trip of a lifetime, typically taken by retirees who had money in the bank and time to spare. But cruise lines are now targeting younger consumers with the allure of discount pitches, shorter planning and energetic atmospheres.

The entry of ships with ever-increasing capacity has turned cruising into a commodity. As such, marketers are focusing on more tactical marketing because passengers increasingly are buying discounted trips relatively closer to the time they want to sail. Consequently .Carnival's second quarter yield declined 5.3% while Royal Caribbean's is expected to drop 5-7% this year.

"Cruise lines have killed their own marketing with discounting," said Murray Markin, president of consultancy Strategic Decisions, Boynton Beach, Fla. "How many big ticket products are out there that you buy more of because the price went down?"

"There is a lack of differentiation," acknowledged Dan Hanrahan, svp-marketing at Royal Caribbean, the world's No. 2 cruise line behind Carnival. After Norwegian Cruise Line added Freestyle Cruising in mid-2000, other brands adopted flexible dress and dining options. "Marketing has to bring in new people. I think the approach to Freestyle and choice is good, and those brands have done a good job with it, but it's marketing that moves people between brands rather than creates new users," he said.

RC helped to change the staid image of cruising with its three-year-old campaign, via Arnold Worldwide, Boston, featuring in-line skating, rock climbing and swimming with stingrays, all played against Iggy Pop's "Lust for Life." The effort lowered RC's average passenger age to 42 versus the late 40s, per the company, and motivated the cruise line to switch its official tag to mirror the campaign's theme, "Get out there."

Carnival's Cunard Line is modernizing its brand while emphasizing its 160-year plus heritage. Ads for the Queen Mary 2, the largest passenger liner ever constructed, launch in January 2004, via TBWA\ Chiat\Day, N.Y., ahead of the ship's summer maiden voyage. The pitch: an adventure for affluent consumers supported by the line's "The most famous ocean liners in the world" tag eyeing Cunard traditionalists, who average 62 years old.

"We are a capacity-driven business and that is bringing more ad spending, which generates higher levels of awareness and creates a propensity among consumers to put cruising on the agenda," said David Gevanthor, vp-marketing.