Pricing strategy fundamentals and applications

Business - Marketing: Pricing Strategy

Cruise Industry

The cruise industry is the largest current traveling and vacationing sector among every other division in this particular market. The growth that has befallen this entire industry has been utterly overwhelming. The shear amount of families, couples, groups and individuals taking cruises has risen to nearly triple the amount it was merely 10 years ago. With no signs of slowing down, particularly since the industry is consistently adding more conveniences, luxuries, attractions and price packages, he cruise industry will likely continue its upward growth and impose the ideals of necessary product paralleling to the growth of demand. According to the Cruise Lines International Association's claim that the passenger levels are increasing at an average of nearly 25% - 50% per year (CLIA, 2007), the next few years may prove difficult for the fleets of cruise ships that can no longer accept every booking due to overcrowding and the lack of capabilities to accommodate the rapidity of growth.

The following graphs depict the actual numbers calculated for the growth of the cruise industry:

ANNUAL PASSENGERS

Day or More Market)

RECENT GROWTH TRENDS

Company:____ Royal Caribbean Cruises

Destination: ____Ensenada, Mexico ____ port:____ San Diego, Catalina Island, & Ensenada, Mexico____ duration of cruise: ____4____ days.

Enter the prices you have noted in the table below:

Week of 1.start date of the cruise

2.inteiror cabin price ($)

3.ocrean view cabin price ($)

1.nov19

____$1,300 for two adults C/P_ ____$1,650 for two adults O/V

2.Dec24

____$2050_(2) C/P

____$2,555 (2) O/V

3..Dec31

____$2,200 (2) C/P

____$2,850 (2) O/v

4.Jan21

____$2050_(2) C/P

2555 (2) O/V

5.Feb11

____$1,700 (2) C/P

____$2,000 (2) O/P

6.Mar24

____ ____$1,300 for two adults C/P_ ____$1,650 for two adults O/V

7.Ar21

_$1,300 for two adults C/P_ ____$1,650 for two adults O/V

8.May 19

_$1,300 for two adults C/P_ ____$1,650 for two adults O/V

9.June23

____$1,550

____$1,900

10.July1

____$2,200 (2) C/P

____$2,850 (2) O/v

11.Aug25

____$2050_(2) C/P

____$2,555 (2) O/V

12.Sept 22

____$1,550

____$1,900

13.Oct29

____$1,300 for two adults C/P_ ____$1,650 for two adults O/V

This company appears to raise their fares when passengers are most likely to be vacationing -i.e. holidays, summers, etc. This is a clever and effective example of a pricing strategy to earn the most capital when passengers are immanent. Some price drops are likely to be marketed during the higher cost times in order to entice passengers to compare to what they had paid when the prices were higher.

If you have to make plans for taking a cruise in December 2008, when will you book your tickets.

Mark only one choice) a.

A one week before travel b. two weeks before travel c. 1 month before travel d. 3 months before travel e. 6-month before travel f. 12 months before travel.