The theory of market segmentation is straightforward, and as marketers we understand how it works in principle. Sometimes, however, it is only when we observe segmentation done badly that the lesson truly becomes clear. In this blog, Dr Margaret Hyde uses the cruise industry as a rich and instructive case study for exploring how companies approach segmentation, targeting, and positioning — and what happens when they get it wrong.
Segmenting the Cruising Market
When most people think about cruising, they imagine sailing through the Mediterranean or the Caribbean — beautiful scenery, blue skies, and an all-inclusive experience that can mean very different things to very different people. Huge luxury ships with bars, restaurants, and activities keep guests entertained around the clock. Families, older travellers, and younger couples may all find something to enjoy — which might lead one to conclude that cruising is, essentially, a mass market product. There is something for everyone.
In reality, it is not that simple. The cruise sector can be broken down into four broadly distinct offerings:
- Large ship cruises: Differentiated strategies targeting young families, older people, and the mid-income bracket. Positioning: fun and affordable.
- Small cruises: Differentiated strategies targeting older people with mid to higher range disposable income. Positioning: more personal and mid-range pricing.
- River cruises: Concentrated strategies targeting the 50+ market with higher disposable income. Positioning: relaxing and premium.
- Expedition cruises: Niche strategies targeting the middle-aged to older market, adventurous travellers, and those with higher levels of disposable income. Positioning: adventure and premium.
Segmenting the market for larger ships may suggest that an undifferentiated approach — essentially a mass marketing strategy — is most relevant. These ships attract young families who value the range of activities, safe entertainment, and the freedom for children to be amused independently. Then there are more mature, middle-aged, or senior travellers who are seeking a more relaxed, sophisticated experience.
The contrast between Cunard and Virgin Voyages illustrates this distinction clearly. The names of the ships themselves signal their positioning: Cunard conveys comfort and tradition, evoking the great British Queens, luxury, and heritage. Virgin, by contrast, projects a more party-oriented atmosphere with appeal to younger travellers and families. Cunard is more sophisticated and more expensive; Virgin is accessible and fun. Both adopt differentiated strategies, but their market segment definitions are quite distinct.
With the largest ships now carrying up to 7,000 passengers, there is a market for those who prefer smaller vessels — where a more personalised service is possible and access to smaller, more intimate ports of call is part of the appeal. These ships may, though not always, be more luxurious. The size of the vessels means that there is not the range of entertainment or facilities available on massive ships, which suggests a more targeted approach — usually towards the older market, where the benefits sought are those of the ports of call rather than on-board entertainment. This is a more differentiated strategy, but with a tighter definition for the market segments based on age, lifestyle, and income.
How River Cruising Differs
The river cruise is another highly popular category within the sector. It is a product normally targeted at the 50+ age group, offering luxury accommodation, fine dining, and access to historic towns via organised excursions. On many river cruise itineraries, children under the age of 18 are not permitted — a clear and deliberate targeting decision that reflects the experience the product is designed to deliver.
An instructive example of what can go wrong occurred when one river cruise company, still recovering from the impact of the pandemic, attempted to adopt a more family-oriented approach and allowed a number of young children on board. The result was not a success. The children were disruptive, taking over the pool area. The ship was not large enough to offer separate entertainment for children and adults simultaneously, and the excursions were not suited to all age groups.
The company's usual market — passengers seeking a leisurely, sophisticated experience — was disenfranchised. A conversation with the cruise director confirmed that the attempt to diversify and attract family patronage had satisfied neither audience: not the children, and not the regular passengers. It is a clear example of what happens when segmentation and targeting become confused, and the conflicting desires of diverse groups result in a service offering that meets nobody's needs fully.
Niche Segmentation: The Expedition Cruise Market
At the other end of the spectrum sits the expedition cruise — a product that has been growing in popularity in recent years. These are cruises built around visits to remote locations: smaller communities, wildlife habitats, natural environments, and places of scientific or geographical significance. Specialists — geoscientists, naturalists, historians, and local experts — are often on board to deliver lectures and guided experiences, adding a layer of educational depth that differentiates the product entirely from mainstream cruising.
The way in which expedition cruise companies position themselves is deliberate and highly focused. Pricing is high, reflecting the element of adventure and exclusivity. The targeting is concentrated on what marketers might describe as the silver pound — mature travellers with higher disposable income, retired or semi-retired, whose children have left home and who are seeking meaningful, immersive experiences rather than conventional holidays. As the population ages and international travel becomes increasingly accessible, this is likely to remain a growing segment.
What the Cruise Industry Teaches Us About Segmentation
First impressions may suggest that the cruise sector — particularly as increasingly large ships continue to be launched — operates as a single mass market. This analysis demonstrates that the reality is far more complex. The sector contains multiple distinct markets, each with its own segmentation logic, targeting approach, and positioning strategy. When those strategies are applied well, the result is a product that resonates deeply with its intended audience. When they are misapplied — as the river cruise example illustrates — the consequences are commercial and reputational.
The cruise industry is a particularly useful case study for marketing students and practitioners precisely because its segmentation decisions are so visible. The names of ships, the imagery in brochures, the pricing structures, and the on-board experience are all tangible expressions of strategic positioning choices — making it an ideal sector through which to explore the real-world application of segmentation, targeting, and positioning theory.
How Professional Academy Supports Your Journey
Developing a thorough understanding of market segmentation, targeting, and positioning is a core component of professional marketing education. At Professional Academy, we offer the full range of CIM Marketing Qualifications — from the CIM Level 3 Foundation Certificate through to the CIM Level 6 Diploma in Professional Marketing — providing structured, industry-recognised pathways for marketers at every stage of their career.
All CIM qualifications are assessed through assignments and case studies, giving learners the opportunity to apply marketing theory directly to real-world business contexts — exactly the kind of analytical thinking that this blog demonstrates. To find out more about our CIM programmes and which level is right for you, get in touch with our team today.
