Academic journal article Academy of Marketing Studies Journal

Assessing Customer Value in Segmented Cruise Markets: A Modelling Study on Japan and Taiwan

Academic journal article Academy of Marketing Studies Journal

Assessing Customer Value in Segmented Cruise Markets: A Modelling Study on Japan and Taiwan

Article excerpt

INTRODUCTION

Since the 1980s, the cruise market has grown annually by 7.2%, establishing itself as a significant niche within the global tourism industry. In 2015, the number of cruise passengers reached 23 million, with Asia accounting for 6% of the global cruise market (FCCA, 2015). With cruise companies becoming increasingly aware of the potential economic importance of Asian cruise tourists and their specific needs, we are witnessing a rapid development of this sector in Asia. Potential demand, coupled with a high customer loyalty, is an important market indicator for future growth. Learning from the successful implementation of cruising in North America, it is evident that success depends partly on attracting repeat consumers and maximizing cruise revenue, both of which are definitely key to maintaining cruise sustainability in the Asian market. The continued success of a company is based on future transactions, making it essential to look into the various aspects that comprise both current and future customer value of cruise passengers as a prominent aspect of total market potential.

In terms of destination development, Taiwan offers competitive advantages to support the cruise industry, as a result of the growing Asia-Pacific market, geographic location and current port standards (Chen, 2016). On the other hand, it is also noted that governmental and private investments are currently still somewhat lacking to develop this potential and further studies are needed in order to fully understand the development opportunities. From a consumer perspective, Chen et al. (2016) found that Japanese and Taiwanese cruise tourists have a strong demand for cruising and a high willingness-to-pay (WTP), indicating local market potential. Hur and Adler (2013) explored the perception of cruise tourism among South Korean travelers and concluded there are significant opportunities for further development. In order to understand the full range of market demand, both current and future intentions need to be accounted for. Past research has traditionally framed such market value either in terms of current willingness to pay, or in terms of intention to repeat or positive word of mouth (e.g. Baker & Fulford, 2016; Wang et al., 2014; Yi et al. 2014). There is an opportunity to develop further insights into customer value by combining both willingness to pay and behavioral intention aspects, not only from a scientific perspective but also from a policy perspective. In particular, this information could fill gaps in cruise-theoretical research, and also provide beneficial knowledge to cruise companies' practice. Against this background, our study focusses on two empirical questions: (a) Which variables will affect the customer value (over the next 3 years)?; and (b) How can we further distinguish the market to identify the potentially most valuable marketing segments? Both empirical questions will be investigated on a sample of Japanese and Taiwanese cruise tourists, incorporating two important and more mature Asia-Pacific markets.

THEORETICAL BACKGROUND

The Concept of Customer Value

Customer valuation is one of most important topics in the field of marketing, and in tourism research is strongly related to tourists' plans to revisit. This study builds on empirical works on cruise tourism and tourism in general, which have examined the factors related to tourists' intentions to revisit and willingness-to-pay (WTP).

Models such as repeat purchase probability (Frank, 1962; Kuehn and Day, 1964; Jacoby and Kyner, 1973; Jacoby and Chestnut, 1978), and repurchase measurement models (Urban et. al., 1983; Grover and Srinivasan, 1987; Colombo and Morrison, 1989) take into account probability assessments as a predictor of customer value, since intention to revisit alone does not necessarily translates into actual behavior. In addition, the 'recencyfrequency-monetary' model (RFM), as one of the most commonly adopted approaches, infers future behavior from past behavior via: (i) recency, i. …

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