In 1970, Italian Gianluigi Aponte founded the Mediterranean Shipping Company (MSC) with one used ship (boat) and just $5,000 in capital to move shipments between Europe and Africa. Despite a challenging environment, MSC has since prospered and grown to become the worlds second-largest container operator behind Maersk, with a fleet of over 400 ships and operations in 150 countries.

MSC started operating passenger cruises in 1989. By 2003 they had recognized that they could not successfully compete in the growing cruising sector with the low-cost second-hand ship approach that had worked so well in their shipping container division, so they decided to invest in new-ships.

Today they have 12 new luxury cruise ships in operation and are the worlds fourth-largest cruise operator and the leading cruise brand in Europe. They plan to become the worlds third-largest cruise line by 2025.

Because of the superior technology of airplanes, business in cruise travel and boats went down. Cruise ships essentially continued targeting old retired people mainly.

Because of this decline in business, major cruise operators started to consider how they could compete in the broader holiday market. They certainly didnt have the speed advantages of airlines, nor did they have the facilities of hotels and resortsso how could they compete?

The answer lay in the reinvention of the industry to be halfway between a form of transport and a resort, essentially repositioning cruise ships from transportation vehicles to mobile holiday destinations. This has been delivered over time through the design of new, larger ships that incorporate shops, restaurants and bars, entertainment, swimming pools, waterslides, casinos, movie theaters, and even rock climbing and ice skating.

The bulk of the cabins are now constructed on the outside of the ships, where most of them have their own balcony. These resort-style facilities, combined with the experience of visiting several countries during a one-week cruise, help provide consumers with a unique holiday experience that cannot be directly matched by their non-cruise competitors.

Demand has substantially increased. By 2004, there were 9 million passengers worldwide and an estimated 24 million people on cruises in 2016. The significant increase in passenger numbers is a result of improved cruise ship facilities, the increased choice of destinations, the growing word-of-mouth influence of satisfied customers, and an overall reduction in price.

MSC Cruises tends to focus on the family market segment for shorter cruises and the seniors market segment for longer cruises. And coming from an Italian heritage, they are quite Mediterranean-inspired, providing more basic on-board facilities rather than water slides and rock climbing. In order to attract family groups, they offer children travel free packages along with kids clubs and a family games room.

When deciding on a holiday, consumers are no longer reliant on travel agents and instead use review websites such as TripAdvisor to help guide their decisions. They have a greater affinity for shopping around and comparing deals, making them more price sensitive than ever before. This is why cruises usually offer a completely packaged experience, including accommodation, food, entertainment, shopping, casinos, spas, fitness centers, activities, kids clubs, and the opportunity to meet new people.

One of the biggest challenges MSC faces is getting their pricing right, against competitors from other cruise lines and from an array of traditional holiday solutions, such as resorts, theme parks, and tour operators. In addition, in todays Internet-based world, consumers are better informed and are looking for new experiences and, of course, great value.

1. List and explain the steps involved in developing effective marketing communications and apply each of those steps to MSC cruises. (20 points)

2. Describe, in details, the marketing mix of MSC. Give details for every step based on the case and propose ideas for parts that do not appear in the case. Justify your answers.

a. Describe the services offered by MSC, indicating the 4 characteristics that apply to it. (10 points)

b. Define the pricing strategy (or strategies) that you would suggest for MSC services. Justify your answer. (10 points)

c. In your opinion, which promotional mix plan should they follow? Define each strategy you will propose and indicate why you chose it. (10 points)

d. Which distribution channels are they using? Is it direct or indirect? Explain your answer. (10 points)

3. Each product/service go through a life cycle, although its exact shape and length is not known in advance. Briefly list and explain the phases and indicate where MSC stands. Justify your answer. (10 points)