Segmenting cruise passengers with price sensitivity

Abstract

It has been suggested that discounted cruises have degraded the industry's standards (Berlitz Guide to Cruising and Cruise Ships, Berlitz, Princeton, NJ, 1994), and that value-oriented cruise lines are gaining a competitive advantage over "high-end" cruises (http://www.cruisinformationservice.co.uk/press/factsheetdetail.aspx?id=45). This use of price discounting has created new challenges for the cruise industry, as they have attracted a more price-sensitive market than they have in the past. Thus, the purpose of the current study was to segment cruise passengers based on their price sensitivity to determine if price-sensitive markets are desirable. Results revealed that less price-sensitive visitors are more likely to spend more, while visitors who were more price sensitive were more likely to positively evaluate their experiences. Both theoretical and managerial implications are discussed.