Bob Dickinson, the retired former chief of Carnival Cruise Lines who helped build the Carnival empire with his marketing and branding savvy, called last week to offer a little lesson on marketing and branding.
The impromptu class came in response to an article I wrote posing the question of whether rock-bottom cruise prices were rendering brand messages less effective.
Dickinson's response, unequivocally, was no.
"It could appear at first blush that severe pricing is undermining product identities, but the reality based on all history is quite the opposite," he said.
He said that over the last 35 years, since the industry's nascent days, various cruise lines have grown or faltered based on both their product delivery and marketing prowess.
And they did this through several economic downturns that produced similarly price-driven economies, he said.
"As recently as 1984, NCL was America's favorite cruise line. It was No. 1 from 1967 to 1984. And now it is the distant third, and it's all about branding," he said. "Carnival was the runt, and now it's the brand leader and the profitability leader."
"If your brand power isn't positive, no amount of price come-on will get people to buy it," he added.
Dickinson explained that because cruise lines operate a "price to fill" model, unlike airlines or hotels, marketing has always balanced brand messaging with tactical offers.
"From the earliest days, we've always been tactical in the sense that we can't afford not to be," he said. "Once you are in a model that says you will fill your ship every time, you are by definition going to be tactical."
"Branding is made up of three components: product delivery, imagery and price," he said. "They are all co-equal, because you can have a great product delivery but if you are unknown, who knows about you? And if your price point is too high, nobody cares. They are all inextricably interwoven."
As for three travel agent surveys that overwhelmingly found price to be the most important determining factor in a cruise purchase, Dickinson said that brand perceptions already exist in the consumer's mind before he or she ever contacts a travel agent.
At that point, price could have been the driving factor, he said. But he also added that "an agent survey has nothing to do with consumer reality."
"To be blunt, there is frequently a large gap between agent perception and the reality of consumer thought," Dickinson said. "If you are a successful agent and you know how to sell, the difference between perception and reality narrows or is nonexistent.
"The vast majority of agents are not salespeople," he explained. "They make assumptions about consumers that are frequently incorrect. ... Except in rare instances, consumers simply are not driven by price alone. Brand power has to be considered."
Dickinson concluded by posing this question:
"If there were a cruise line that had the lowest price to the right destination and had the best availability, based on the surveys you cited, that cruise line would fill all its cabins no matter what," he said. "Well, what if that cruise line was called Swine Flu Cruises?
"No price point would fill that cruise. That is the power of branding."