In 2013 Carnival Corporation reported $72 million, or $0.09 per share, down from $159 million, or $0.20 per share, in the same quarter of 2013. Carnival’s major competitors include Royal Caribbean Cruises and Norwegian Cruise Lines. These two companies have successfully profiting off of the problems that Carnival is having. While Carnival’s declined by 2%, Royal Caribbean & Norwegian experienced increases of 4% and 2% respectively. “In terms of valuation, Carnival seems to be the cheapest among the trio with a price to earnings ratio of 18.07 times, compared to Norwegian Cruise Line’s 82.78 and Royal Caribbean’s 155.69” (The Motley Fool, 2013). If Carnival Cruise Lines does not make significant efforts to reverse the effects of recent events on customer perception, they will continue to lose money. This will further reduce consumers’ perceptions of the brand and may have a downward spiral effect. We believe that by evaluating public opinion, effects of improved safety, as well as possible additions of amenities, Carnival Cruise Lines canrestore their reputation as a high-quality and safe cruise line.
4LITERATURE REVIEWPublic OpinionAccording to an article written by Jane Sutton, consumer perception of Carnival Cruise Lines is dismal. Even after the damage control that the Carnival Corporation tried to in sue, the overall “ripple effect, “ is the lasting impression that has been left on the minds of the public (Sutton, 2013). In additionthe cruise industry in general is beginning to have a bad reputation. Issues with other cruise lines “spill over” and customers are afraid to trust any cruise line. This makes it hard for any cruise line to bounce back. Because Carnival has had multiple incidents within a short period of time, they have been negatively affected more than most (Scuffham & Young, 2013). Media coverage of cruise incidents has further impacted consumers’ perceptions. For example, a CNN exclusive article went in depth to say that, the cruise line knew about the dangers of the fire that caused the engines to give out and the sewage problem. Based on the article, now it is believed that the whole accident could have been prevented. Also it shows a reflection on the company, making it now seem that they were too lazy or negligent to check the ship be it left dock (Griffin & Bronstein, 2013). Customer SatisfactionFor a long period after the Carnival Cruise Line incident, the company has had trouble convincing customers to book cruises. In initial response, Carnival continually lowered rates with the intention of increasing sales. This method proved to be unsuccessful. After re-evaluating, Carnival realized that simply decreasing prices was not the solution. They also needed to implement additional measures in order to regain consumer confidence. Carnival Cruise Lines began doing an exceptional job of addressing their previous issues and attempting to make them right. However, it is our belief that there is still more that can be done to further improve their current situation. Problems in customer