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1 | S e a s i d e F i l t e r i n g S y s t e m

Seaside Filtering SystemPreserving the Oceans. One Ship at a Time.

Team TwoKira Higgins

Paul LaraJackie Reyes

Roberto Ornelas

Business MarketingBus 306-82, Fall 2014

Professor Davis


Table of Contents

List of Tables and Figures…………………………………………………………………………4

Executive Summary……………………………………………………………………………….5

Market Analysis

Situation Analysis…………………………………………………………………………7

Market Summary…………………………………………………………………………..7

Geographics……………………………………………………………………………….8

Demographics……………………………………………………………………………..9

Psychographics…………………………………………………………………………..10

Market Needs…………………………………………………………………………….11

Market Trends……………………………………………………………………………11

Market Growth…………………………………………………………………………...13

SWOT Analysis………………………………………………………………………..14

Competition………………………………………………………………………………15

Product Offering……………………………………………………………………… . .15

Keys to Success…………………………………………………………………………..16

Critical Issues…………………………………………………………………………….17

Marketing Strategy

Marketing Strategy……………………………………………………………………….17

Mission…………………………………………………………………………………...18

Marketing Objectives…………………………………………………………………….18

Financial Objectives……………………………………………………………………..19

Target Markets…………………………………………………………………………...19


Positioning………………………………………………………………………………19

Strategies………………………………………………………………………………...21

Marketing Mix…………………………………………………………………………...22

Marketing Research……………………………………………………………………...23

Financials………………………………………………………………………………..24

Break-even Analysis……………………………………………………………………..24

Sales Forecast…………………………………………………………………………….25

Expense Forecast…………………………………………………………………………26

Controls…………………………………………………………………………………..26

Implementation…………………………………………………………………………..27

Marketing Organization………………………………………………………………….27

Contingency Planning……………………………………………………………………28

References………………………………………………………………………………………..29

Appendix A………………………………………………………………………………………31

Appendix B………………………………………………………………………………………33


List of Tables and Figures

Figure 1: Survey Question #10……………………………………………………………………9

Figure 2: Cruise Ship Passengers by Year……………………………………………………….12

Figure 3: Seaside Filtering System Process………………………………………………….......16

Figure 4: Oceana Certified Label………………………………………………………………...22

Figure 5: Production Costs Breakdown………………………………………………………….24

Figure 6: Marketing Costs Breakdown…………………………………………………………..24

Figure 7: Break-Even Analysis…………………………………………………………………..25

Figure 8: Sales Forecast………………………………………………………………………….25

Figure 9: Expense Forecast………………………………………………………………………26

Figure 10: Marketing Department Breakdown………………………………………………….28


Executive SummaryThe purpose of this report is to explain the marketing plan for the Seaside Filtering

System. Cruise ships are currently dumping grey water into the ocean negatively impacting the

environment. Seaside Filtering System is a grey-water filter system for cruise ships that will

allow cruise ships to refrain from dumping grey water into the ocean.

The system will enter into the market through Culligan International Company. Culligan

is known for water filters that are designed for home, business, and commercial use. Seaside

Filtering System will be a combination of Culligan products that are reinvented and redesigned

to meet the needs of cruise ships that are already making efforts to achieve sustainability. Having

said that, the Seaside Filtering System’s target clientele consists of companies within the cruise

industry.

Cruise ships are the targeted clientele so, the Seaside Filtering System will be marketed to

businesses rather than to consumers for the purchase of the system. The geographics of the

targeted clientele were selected based on Culligan’s division in Salinas, CA. The Seaside

Filtering System will first be marketed to cruise lines on the west coast. Now, even though

consumers are not the targeted market for the Seaside Filtering System, the marketers do plan on

influencing consumer opinion in order to convince cruise lines on the system.

Both businesses and consumers are currently making efforts to improve the

environmental footprint of human beings on the Earth. The marketers will strive to first, inform

the public on grey water dumping by cruise lines and then, earn their support to end grey water

dumping. Partnering with Oceana, a non-profit organization striving for ocean preservation, will

permit the promotion of the Seaside Filtering System as the best option for grey-water filtering.

The cruise industry and the number of environmentally conscious consumers are

expected to rise. So, the time is right for the Seaside Filtering System to enter the market. The

Seaside Filtering System preserves the ocean through one of its competitive advantages, which is

its ability to reuse and repurpose grey water, resulting in virtually no water being dumped into

the ocean. Price adjustments and certification for being an environmentally friendly product will

be utilized to convince cruise lines to purchase the system.

Seaside Filtering System will be priced at $2,000,000, which is less than the price for its

closest competing system named Zenon. It will be marketed using a direct market channel and


communicated through personal selling, public relations, and direct marketing. With a sales goal

of two systems a year, the Seaside Filtering System will be a profitable system for Culligan.

The Marketing department will consist of a North and South Sales team. The North Sales

team will have one technician and one representative, while the South Sales team will have three

technicians and two representatives. Consistent, transparent, and secure communication with

cruise lines will allow the marketing department to learn about new trends, opinions, and needs

of both the cruise industry and of the public. This new information will be necessary for the

marketers of the Seaside Filtering System to reposition the system within the market or adjust the

market plan if any issues emerge. The Seaside Filtering System will be marketed to deliver

superior customer value and to manage customer relationships because it is the best way to

achieve ocean preservation.


Marketing AnalysisSituation Analysis

Taking a vacation on a cruise ship has never been easier or more entertaining. These

vessels are traveling cities with the same kind of waste that comes from being on land. The

increase in the number and size of cruise ships is causing the pollution to worsen. To put it into

perspective, the first cruise ship in the 1900s had only 120 passenger rooms, whereas, the

modern cruise ships have thousands of rooms, over a dozen restaurants, multiple pools, water

slides, and zip lines (Delp, p.1).

The protection of our environment is becoming an increasing concern for consumers and

it could begin to affect the willingness of consumers to take a cruise with many of the companies

like Coast Cruises and Carnival Cruises. The largest concern for pollution is the dumping of grey

water into the oceans while at sea. Grey water is wash water “from your bathroom sinks,

showers, tubs, and washing machines,” (About Greywater Reuse, p.1). With all concerns for the

environment and the company’s profits in mind, a reliable solution is filtering and reusing the

grey water aboard.

The Seaside Filtering System is designed to require little space on the cruise ships that

filters the grey water being used into a containment tank that can be treated and reused for wash

water instead of being dumped into the oceans. In affiliation with Culligan International

Company, an industry leader in water filtration for homes, business, and commercial use, the

Seaside Filtering System will bring a new level of efficiency to cruise ships that is lacking in

other models like it on the market. This system is a great solution for both cruise ships and

consumer concerns.

Market Summary

The grey water dumping by cruise ships at sea is damaging marine life and indirectly

harming humans. The damages to the natural environment are becoming more and more

noticeable such as the Pacific Garbage Patch which “is a collection of marine debris in the North

Pacific Ocean,” (National Geographic, n.d.). The actual dumping of grey water is less noticeable

but if it continues, then the wonderful oceans people travel to visit won’t be worth the trip.

Creating filtering and treatment systems to reduce and even eliminate the dumping of grey water

is a solution. Other additional benefits includes saving water, protecting marine life, and food

supply. There is a need for Seaside Filtering Systems because the problem is not something that


can be undone easily. Cruise ships need to make efforts to prevent more damages.

Culligan International Company has been creating filters for home, business, and

commercial use for years and has many national accounts. “Culligan conditioning and soft water

solutions include water softeners, water filtration systems, reverse osmosis water filters, and

drinking water filters” (Culligan, p.1). Based on the company's experience, the marketers will

use Culligan’s established filtering products to create an effective five step filtering system as a

single product to offer. Along with Culligan’s development of the product, the Seaside Filtering

System will be represented as an Oceana approved-environmentally-safe and pollution-reducing-

product. Just as an organic product is certified by a separate company, Oceana will be an outside

certifier of the product to create greater value for cruise lines.

Waste water filtering systems are new to the market yet expensive for operation on all

cruise ships today. For example, Zenon is a filtering system on Holland-America cruise ships that

treats sewage and processes grey water by pumping it “into a tank and then filtered through a

bioreactor, in which bacteria reduce harmful toxins like chlorine, fecal matter and ammonia. By

the end of the process, Parks said, the water quality is close to that of drinking water,”

(Investigate West, para.8). This product can be found on many Holland American cruise liners

but are not being installed on any other company’s cruise ships probably do to the extremely high

contract prices.

The target market for the Seaside Filtering Systems includes the larger cruise line

companies such as Disney, Princess, Royal Caribbean Cruises, and others, that have the highest

number of vessels and the largest operations. The goal is to focus the market segment on the

companies, who have begun to feel the environmental concerns and have already taking steps to

prevent wastes ending up in the waterways. Eventually the goal would be to reach government

Navy vessels and small transport ships that currently dump grey water. The reason for choosing

to market to the larger ships first is to make a bigger difference now. These filtering systems will

make a difference across the board for the environment and all that live in it.

Geographics

The Seaside Filtering System is designed for the business-to-business market focusing on

large cruise line companies whose ports are located around the globe. Culligan's main offices are

in Rosemont, IL with a division in Salinas, CA. In the U.S., the marketers will introduce the

system on the West coast because it is closer to operations and will minimize costs while first


launching the product. The first target will be companies that stay at ports in Seattle, WA,

Astoria, OR, San Francisco, CA, and Los Angeles, CA. These companies include Disney Cruise

Lines, Princess Cruises, and Carnival Cruise Lines because they have already begun to make

some environmental friendly changes. Using the West coast as a beginning tester market,

marketers hope it will expand to the East coast of the U.S. and then global ports.

Demographics

The demographics are focused more toward consumers to use their reactions as an

influence for companies to implement the Seaside Filtering System. In a recent survey taken

online through web media, marketers have concluded that consumers would choose companies

implementing environmental friendly practices over companies that had none (refer to Figure 1).

It is important to recognize consumer buying power because, according to Cruise Market Watch

(n.d.), about 20% in all cruise ship customers are from 30 to 60 years old and 39% of passengers

have an income of $100,000-200,000 a year. These affluent passengers account for a large

percentage of the consumer market and can motivate cruise liners to implement environmentally

safer products to prevent pollution.

Figure 1: Survey Question #10


Psychographics

The marketers of the Seaside Filtering System have considered the lifestyles of both the

consumers and businesses, in order to strategize the filtering system’s entrance into the market.

Consumer value is important in the marketing of the filtering system because the marketers wish

to motivate the purchasing behavior of consumers towards cruise ships that possess the filtering

system and away from competitors that do not. Business lifestyles are important in the marketing

of the filtering system because it’s the cruise companies that are being targeted by the marketers

of the Seaside Filtering System. First, the consumer lifestyle variable for the marketing strategy

will be presented, then the business lifestyle variable.

Consumers are an important element in the marketing strategy of the Seaside Filtering

System. Danielle Fugere of Bluewater Network—a San Francisco division of the international

environmental group Friends of the Earth—was reported to have said on Hilton’s article for the

SFGate (2007) that cruise lines are mainly taking steps towards reducing their environnemental

footprint because people do not want to support cruise ships that are polluting the environment.

A large portion of Americans care for the preservation of oceans and if, not solely of the ocean

then, of the whole environment. Businesses would be wise to satisfy the expectations of these

consumers in order to strengthen their customer relationship and expand their customer value.

The filtering system is the best solution to the pollution. Cruise companies can lose customers if

they neglect consumer concerns.

Since cruise companies are the target group for the marketing of the Seaside Filtering

System, the lifestyles of the companies are of great importance. As mentioned in the market

summary section, there are cruise companies that now believe in the protection of the

environment and have taken measures to reduce their environmental footprint. This new lifestyle

of certain cruise companies to reduce their own environmental impact is the variable that the

marketers of the filtering system took into account when deciding on which segment of the

business market to target. However, the efficiency of the filtering system is a feature that may

intrigue other cruise ships, who are not necessarily looking to preserve the oceans but reduce

costs and perhaps preserve the environment in doing so. According to Brave New Leaf (2008),

“Fearmongering Eco-preneurs” exist and they are business owners who are mainly driven by

company profits when taking action to reduce his/her company’s environmental footprint.


Market Needs

Currently, there is a market need for a better grey-water treatment system than those

available today (Hilton, 2007). According to Oceana (2012), existing treatment systems are

inadequate and the dumping of untreated grey water from sinks and showers is allowable by

relaxed state and federal laws. These matters if prolonged can cause bacteria and pathogens to

endanger the coastal environment and marine life (Oceana, 2012). To put it into perspective, the

Department of Transportation was reported on the 2007 SFGate article by Hilton to have said,

“A cruise ship on a weeklong voyage with 3,000 passengers and workers generates, on average,

1 million gallons of grey water (water from sinks, showers, galleys, laundry and

cleaning activities).” But if the damages to marine life are not enough to intensify the demand for

a better treatment system, certain events have occurred that might force cruise companies to

supply their ships with the adequate equipment.

In 2004, former California governor, Arnold Schwarzenegger, signed into law two ocean

protection bills that now prohibit the cruise industry from dumping dirty water produced in sinks,

showers, and toilets into state waters (Oceana, 2012). So, the need for an improved method of

treating grey water is encouraged by the risk of receiving a fine if a company allows one of its

ships to violate an ocean protection law. Moreover, the cruise industry’s second largest company,

Royal Caribbean Cruise Lines, has been convinced by Oceana to improve its own practices for

treating dirty water. Royal Caribbean Cruise lines has set an ethical example for other cruise

companies to follow and encouraging the need for an improved treatment system. Additionally,

each cruise line is given a “Cruise Report Card” based on its environmental footprint by Friends

of the Earth (2013). The letter grade is posted on the organization’s website for the purpose of

informing the public of each cruise company’s unique environmental footprint. A bad letter

grade may cause a company to lose potential customers, encouraging a need for an improved

treatment system, so it can receive a better grade and regain its market share. In all, the potential

negative reactions from the public due to pollution encourage the need for a better treatment

system because of the possibility of losing market share.

Market Trends

The cruise industry has seen an increasing trend in the demand for cruises and in the

investment towards more cruise ships by cruise companies. According to Wind Rose Network

(2014), there has been an increase of 90 million passengers since 1980. In the years 2008 and


2009, there was a record of 13 million passengers and 13.5 million, respectively. The rise in the

number of passengers is not expected to stop and will go through the 21st century. The Figure 2,

found on Venipedia (n.d.), illustrates the increase in the number of passengers for the entire

cruise industry from the year 1997 to 2010. In the marketers’ opinion, the rise in the demand for

cruise services has caused cruise companies to invest in better cruise ships. According to Wind

Rose Network (2014), there is an ongoing multimillion investment by the cruise ship industry

towards vessels that contain state-of-the-art technology and are bigger than any cruise ship ever

known.

Figure 2: Cruise Ship Passengers by Year

Cruise ships are now capable of carrying more than 3,000 passengers, allowing cruise

companies to charge lower fares and provide shorter cruises. The ongoing improvements to

cruise ships are positioning the cruise lines to achieve low average costs of production. But in

order to achieve economies of scale, cruise companies must fill in those passenger spaces with

new customers and/or prior customers. Currently, there is an upward trend of customers

demanding sustainable company practices, as stated by Sustainability Front (2012). Cruise

companies are most likely aiming to fill in spaces on the ship with those customers demanding

sustainable practices by joining the “green cruising” trend.

“Green cruising,” a concept that, according to Paloti (2014), refers to the increasing trend

of more cruise companies making important improvements on its own environmental policies

and practices. For example, Carnival and Crystal Cruises have an onboard policy which states

that solid waste will either be incinerated onboard or disposed of on land. Furthermore, cruise

lines are educating its employees on important environmental issues and practices pertaining to


the cruise industry through training courses. Passengers are also welcomed to participate in the

movement by the cruise ships. They are informed of the disposal and recycling procedures of the

particular ship, and equipment is marked with the appropriate instructions. In all, almost every

cruise line has made some sort of change to its operations to eventually become a sustainable

cruise line (Paloti, 2014).

Market Growth

The Seaside Filtering System focuses on providing a cheaper approach to save and

repurpose grey water in Cruise Lines. Cruise ships expose the ocean to grey water, which in turn

harms ocean life. One option cruise liners want to consider is to put in an extra tank, but it

reduces space for guest cabins. “Ship designers had estimated that it would decrease passenger

by 15 percent to 20 percent to add the much larger tanks needed to store the grey water wastes.”

(Ethics of Management, p. 22). In addition, installing a new tank will be expensive.

The marketers have provided a new idea which is to install filters. With filtering the grey

water, ocean life will not be harmed, the water will be repurposed, and the cruise liners will not

pay an enormous amount for filters. Now, people who are concerned about the ocean life can

have a fabulous, environmental-friendly vacation in a cruise ship. Family vacations and eco-

tourism will increase in the market.

Currently, there are approximately 85 cruise ships that are based in Miami, Florida. They

offer three-, five-, or seven-day trips to Bermuda, Bahamas, Mexico, and other beautiful places.

These cruise ships will carry 2,000 to 3,000 passengers creating a lot of grey water which must

be disposed of (Ethics of Management, Pg. 21). According to Wind Rose Network (2007), cruise

liners have had an average 8.5% annual growth in the last 20 years and nearly 90 million

passengers since 1980; therefore cruise line business will grow for the upcoming years. “This

dynamic sector shows no sign of slowing down, with 13 and 13.5 million passengers in 2008 and

2009, compared with the 12.6 million in 2007” (Wind Rose Network, 2007). The market proves

to be healthy, but with our new product it will help gain more market share in this growing

industry.

According to LaRue Tone Hosmer, “Royal Caribbean Cruises say that they cannot afford

to carry tanks large enough to store all of the nonhuman wastes until they report to their home

port” (Ethics of Management, p. 22). When ships need to replenish their water supply for utility

purposes, they need to stop at near ports, in route to the final destination. With these frequent


stops, it can create a waste of time and money. If these ships would install the filtering system,

they would not be using as much water for nonhuman wastes. The entire purpose of the filter is

to reuse the grey water for utility purposes so that the cruise ships have enough clean water for

the guests.

SWOT Analysis

Strengths: Putting in an extra tank would increase Cruise Liners’ price because they would have

to eliminate rooms for travelers. A simple filter would not take as much space as a big tank.

Also, the cruise liners would be saving water and reusing it. The Seaside Filtering System, a

new, cost efficient product for cruise ships, would reduce the harm to ocean life. Culligan is a

well-known, international business that has helped many businesses and industries in the United

States. The proper equipment, like machines and filtering parts, are available for production.

Weaknesses: The Seaside Filtering System is still somewhat expensive: $2 million. Also, Culli-

gan doesn’t have the money to start production for the new filter. Nevertheless, installing the fil-

tering system in a ship can be time consuming, therefore Cruise ships can lose some revenue be-

cause their ships aren’t up and running. Moreover, the Seaside Filtering System requires mainte-

nance and Cruise ships must hire an employee in order to focus their time in keeping mainte-

nance for the filtering system.

Opportunities: An opportunity is that the market doesn’t have something like this new product

therefore we have the advantage to create a new filtering system. Also, Culligan prices the filter-

ing system lower than other filtering companies. Cruise ships can be environmentally responsible

and preserve the oceans and ocean life. Culligan has the opportunity to grow their business and

serve navy vessels with the new Seaside Filtering System. Finally, a positive external opportu-

nity is cruise ships dumping grey water because Culligan can introduce the Seaside Filtering Sys-

tem to Cruise liners.

Threats: The Seaside Filtering System price can increase due to some production changes that

Culligan may have. Also, variation in ship vessels might not be compatible with the system. An-

other threat is that Zaandam, a filtering system company, has a similar product like Culligan’s,

therefore they can take away some of Culligan’s customers. Government regulations can affect

the production of the filtering system.


Competition

The market of filters and water purifying technologies has only a few stand-out products.

Among these competitors are 3M Purification Inc., Calgon Carbon Corporation, and GE Infra-

structure Water and Process Technologies. Another important direct competitor is Zenon Envi-

ronmental Inc., which was acquired by GE Infrastructure Water and Process Technologies in

2006 (Bloomberg, n.d.). Although these companies offer filtration systems that purify water,

none really offer a system similar to that of the Seaside Filtering System.

After visiting the websites of Culligan’s closest competitors, it can be noted that most of

these suppliers market its products either online or directly with distributors. Marketers have de-

termined this was the case because most of the industrial products offer limited information

about the product and only offer certain specifications. In order to acquire an item or learn more

about it, customers must contact the companies. Prices were usually not available unless it was a

home product and no promotions were available.

According to the 3M Purification Inc. website (n.d.), 3M liquid and air filter products of-

fer a wide variety of products that provide solutions for residential, industrial and commercial

applications. The Calgon Carbon Corporation offers technology that has the capacity to treat wa-

ter into drinking water. This website, however, offers very limited product information and speci-

fications. It instead focuses on how its systems function. The main competitor for the Seaside

Filtering System is GE Water and Process Technologies and its acquired company, Zenon Envi-

ronmental Inc. GE Water and Process Technologies offers systems that treat water through meth-

ods such as reverse osmosis, but offer no products similar to the Seaside Filtering System. GE’s

marketing technique is very similar to that of Calgon Carbon; the website lists the various tech-

nologies and offers information about these processes, but no pricing or promotion.

Product Offering

The product is a system comprised of two containment tanks, two microfiber filtering

containers, pipes, and two filters. The main aspect of this system is the two filters that will distill

the contaminants from the grey water. The first filter will be designed to infiltrate bigger

contaminants such as dirt. The second filter will perform as a barrier for chemicals and bacteria.

This filter will also function as a water purifier. This system is intended to store bacteria and

chemicals in microfiber filtering containers that will hold them until the ship reaches port. At


port, the ship will dump the containers together with the rest of the waste. Please refer to figure

#3, to get a better of understanding of this process:

Figure 3: Seaside Filtering System Process

1. Used water (sinks, baths, showers, laundry, and galleys) is transferred to first containment tank

2. This water is then transferred to first filtering container 3. In the first filtering container, heavy contaminants are removed and kept in container while

water continues to flow to the second container4. In the second container the water is then filtered once more. This filter is designed to filter

smaller contaminants and treat the water. 5. Water is then transferred to the second containment tank. This water will then be available for

use once again. After step five, the purified water will make its way back into the ship’s system where

passengers will be able to use this water again to wash their hands, clothes, and take showers.

This system will revolutionize the way cruise ships handle their wastes, ultimately decreasing the

grey water pollution and helping sustain a safer environment.

Keys to Success

The Seaside Filtering system is reliant on being important to consumers and its partnering

businesses. To make this product a success the marketers are collaborating with Oceana, the

largest international ocean conservation and advocacy organization. This partnership will

help gain insight about environmental friendly practices, environmental friendly cruise liners and

other environmental aspects marketers are not currently aware of. This association would also

help improve Culligan’s image and gain recognition among many environmentally friendly orga-

nizations. Another key to success is gaining consumer awareness to drive the environmental de-

cision of cruise ships. For any business, consumer opinion is an important factor to success, es-

pecially with the growing environmental concerns. With the help of Oceana, the marketers plan


to enlighten consumers about environmental issues and influence the consumer opinions when

making choices to take vacations on cruise ships. These factors are not contingent for success but

will support the Seaside Filtering System and advance the growth of the product.

Critical Issues

Along with the factors to success come factors that may lead to failure. The factors that may

lead to success may also be the ones that lead to failure in this market. A possible hindering

factor includes Oceana failing to partner with Culligan and rejecting the product certification

idea.

If marketers fail to make a good impression to Oceana, the opportunity for successfully

marketing the product may drop substantially. No matter the industry, companies are always

trying to minimize costs to maximize profits. Implementing the Seaside Filtering System to the

cruise liners will be a huge investment for many of these companies and if the marketers don’t

have the support needed to force these companies to use our system, then it may fail. Oceana

provides the support needed through the certification of the product.

A second factor that may prevent success going into this market is if Oceana decides to

collaborate with us, but rejects the filtration system. Even if Oceana decides to collaborate and

offer resources that will help get the attention of the cruise liners, the product runs the risk of

failing to impress Oceana with the filtration concept. In order to prevent this from happening, the

Seaside Filtering System must be tested and go through several rigorous troubleshooting tests.

Marketing StrategyMarketing Strategy

Thousands of people, including fishermen across the world, rely on fish as consumption

or financial purposes. However, due to the dumping of grey water from cruise ships, the ocean

and ocean life have been contaminated by chemicals the grey water contains (Hosmer, L. 2008).

The Seaside Filtering System provides a solution for the problem of grey water, which will

benefit cruise ships and environmentally concerned organizations.

Cruise line companies are striving to become ethically responsible and environmentally

concerned consumers want an effective solution for grey water. The Culligan International

Company offers a cost-efficient product that will allow cruise lines to increase revenue and

relieve them of decreasing passenger capacity. Their cruise ships will be environmental friendly


and can welcome environmentally concerned consumers into their ships. Through the Seaside

Filtering System, cruise ships like Carnival Cruise, Princess Cruises, Disney Cruises, and many

more will develop a positive image towards environmentally concerned consumers. Also, the

filtering system will save water by reusing it ultimately preserving the ocean. The Seaside

Filtering System is specifically tailored to the target market mentioned in the following sections:

Demographic, Geographic, and Psychographic. With the Seaside Filtering System, no one will be

harmed.

Mission

Culligan’s mission is, to “Provide our customers the best water treatment products and

services available. We’ve seen nearly every water problem imaginable and have the perfect

solution for your unique water treatment needs” (Culligan, 2014). Through the Seaside Filtering

System, Culligan will astonish the market with a revolutionized new product that will treat

Cruise Ship’s grey water, and preserve the ocean and ocean life.

Marketing Objectives

Culligan’s primary objectives are to increase sales, create product awareness, develop

visual appeal, and preserve the oceans. Having a product that will not decrease passenger

capacity and welcome more environmentally concerned consumers cruise liners sales’ will

increase. Also, Culligan only focuses on home and business filter systems therefore by

manufacturing the Seaside Filtering System, Culligan will expand it’s horizons with cruise lines,

which will create greater revenue for Culligan. By increasing sales, Culligan will be able to

expand their work to other parts of the world and help other homes, businesses, and cruise lines.

Furthermore, before increasing sales for both Cruise lines and Culligan, word-of-mouth

must take action. Marketers must have oral communication with Cruise Liners and ports located

in the West Coast. The word-of-mouth must present the Seaside Filtering System’s capabilities,

purpose, and effectiveness. The Seaside Filtering System is a unique, sustainable, and cost-

efficient system that is designed for ships to decrease the dumping of grey water in the oceans

therefore creating a positive environmental impact. Nonetheless, surveys can also create

awareness of the Seaside Filtering Systems and its abilities.

Moreover, there will be a positive visual appeal towards Culligan and Cruise Lines

through the Seaside Filtering System. As mentioned before, if Culligan takes a different step as a

filtering company and produces the Seaside Filtering System, the marketers and public will see


Culligan as a company that doesn’t just focus in one particular thing but a company that is

willing to take a risk and market a product that is out of their boundaries. As for cruise lines,

buying and installing the Seaside Filtering System will lead Cruises to an environmentally

friendly path and therefore attract environmentally concerned consumers. Reducing the dumping

of grey water from Cruise lines will result in a positive visual appeal. Finally, Culligan

International Company along with Oceana wants to preserve the oceans and ocean life.

Financial Objectives

The goal is to begin installing the Seaside Filtering System in cruise ships in January of

2016. The planned forecast is to sell two contracts in the first year and two contracts in the

second. In the third year production will increase to three contracts. The system will be sold on a

contract for $2 million.

Target Markets

The marketers’ target market is cruise Line companies. Culligan plans to market to cruise

line businesses that are looking to make a change in the way their ships impact the environment.

Culligan has a division in Salinas, CA. which can be easily accessed for production and would

make the costs of production much less. The first targets would be cruise ships in the West Coast,

such as Disney Cruise, Carnival Cruise, Celebrity Cruise, and Princess Cruises, which all stay at

near ports like Seattle, WA. Astoria, OR., Los Angeles, CA., and San Francisco, CA. These

cruises have been striving to make some environmental changes. Moreover, Culligan plans to use

the Seaside Filtering Systems in cruise ships in order to respond to environmentally concerned

consumers. Focusing on the survey results, the consumer reactions will be used as an influence

for companies to buy the Seaside Filtering System. Due to the results, it has been concluded that

consumers would choose cruise line companies that are environmentally friendly rather than

companies who are not (refer back to Figure 1). With choosing cruise lines that are

environmentally friendly, companies that are not will lose revenue which is an asset for their

competitors. Therefore, cruise line companies cannot afford to lose revenue or consumers.

Positioning

Seaside Filtering System’s positioning statement will read as follows, “to cruise lines that

are already making efforts towards sustainable cruising, Seaside Filtering System is an environ-

mentally friendly water-filter system that cuts water costs by reusing and repurposing gray water


after it is filtered.” The marketers of the Seaside Filtering System will work with Oceana to earn

the system certification for being an environmentally friendly product. It will earn certification

because the system allows the ships to rarely have to dump grey water into the ocean. In compar-

ison to Zenon, a filter system available today and most comparable to Seaside Filtering System,

does not give cruise ships the ability to reuse water after it is filtered. Also, Zenon is a highly ex-

pensive filter system. One unit will cost the cruise line $2.5 million (needs citing). So, even if

Seaside Filtering System was sold at the break-even price, it would be inexpensive compared to

Zenon. Seaside Filtering System’s competitive advantages are being environmentally friendly;

helping the ship cut water costs, and being less expensive than other similar water-filter systems

(more-for-less positioning strategy).

Seaside Filtering System’s competitive advantages are important, distinctive, and supe-

rior. Important because Seaside Filtering System puts cruise lines, that purchase the system, one

step higher in becoming sustainable companies. The competitive advantages are distinctive be-

cause Seaside Filtering System is the only water-filter system for cruise ships that allows ships to

reuse and repurpose gray water after it has been filtered. They are superior because it cuts water

costs for cruise ships. Cruise ships could instead carry more water and a cheaper filtering system

as it only filters the water. However, this strategy to only carry and rid of clean water could result

in higher water costs for the ship, potential scrutiny from the public for still dumping water, and

no forward movement towards sustainability because it would still exhaust large amounts of wa-

ter. Not only are the competitive advantages important distinctive, and superior but they are com-

municable, preemptive, affordable, and profitable.

The Seaside Filtering System’s competitive advantages are also communicable, preemp-

tive, affordable, and profitable. They are communicable as they are physically noticeable and

will be explicitly stated when the Seaside Filtering System is presented to potential buyers. Pre-

emptive because competitors will have to find a unique or better way to keep their company

costs down to support a price that can compete with the Seaside Filtering System’s price. The

competitive advantages are more affordable than similar filter systems available for cruise ships

because the Seaside Filtering System is less inexpensive than those other systems.


Strategies

The marketers of the Seaside Filtering System will manipulate the marketing mix through

price adjustments. Seaside Filtering System’s price will be lowered for potential clients if the

client agrees to purchase more than three systems under a single contract. Moreover, Culligan’s

partnership with Oceana for the promotion of the Seaside Filtering System will include grants to

cruise lines who agree to surrender their old grey-water filter upon purchasing the Seaside Filter-

ing System. Both these price adjustments are strategies to increase the number of ships out at sea

that possess a Seaside Filtering System.

Increasing the number of ships that possess a Seaside Filter System allows Culligan to

achieve its marketing objectives. The more cruise ships that have Culligan’s water-filter system

means more revenue for Culligan and stronger preservation of the oceans. Nonetheless, the other

two marketing objectives, creating product awareness and visual appeal, will also be accom-

plished through these price adjustments. Product awareness will be created because the goodwill

that Culligan achieves through lower prices and excellent customer-relationship management al-

low Culligan to reach customers that are usually on the National Do Not Call registry or simply

unwelcoming of random advertisements. Moreover, the Seaside Filtering System’s ability to pre-

serve the ocean will create an ocean friendly image for cruise lines and the more ships that carry

the system the better the ocean will be.

An important strategic factor for the Seaside Filtering System is giving cruise ships that

use the product a special certified label. This label would be placed on the cruise line’s website,

cruise ships, advertisements, etc. Creating a label would appeal to consumers, especially those

who are aware of the current environmental issues. The label would have a stamp that states to

be “Oceana certified” with a note stating that the cruise liner supports the project of “non grey

water dumping.” Additionally, the label will contain a small message explaining that, the “cruise

ship operates using special filtration systems certified by Oceana to be environmentally

friendly.” With the creation of this label cruise ships can differentiate its service and appeal to

consumers with an image of an environmental friendly company. The marketers hope that the as-

sociation that is developed with Oceana can become an important factor to the success of the

Seaside Filtering System.


Figure 4: Oceana Certified Label

Marketing Mix

Price:

Seaside Filtering System will be priced in a contract at $2,000,000. The price for one Sea-

side Filtering System was determined by first adding together the estimated costs production

costs of a system and marketing costs of the brand. The base price in dollars is $1,697,758.70.

The dollar amount was then compared against prices for systems that are similar to Seaside Fil-

tering System and available in the market today to determine the final selling price for a single

unit that allows for profit. By striving towards a goal of two systems a year, Seaside Filtering

System will reach a profit of approximately $455,000 every year. Culligan’s costs for its current

water-filter systems began the price calculation for Seaside Filtering System. This is because

Seaside Filtering System is simply a merged product of particular existing Culligan products that

were reinvent and redesign to fit cruise ship needs.

Distribution:

Seaside Filtering System will be distributed using a direct marketing channel. Culligan

will not be using any intermediaries or third parties for the offering, installing, or distributing of

the Seaside Filtering System. Through its suitable departments Culligan will be engaging in the

information, promotion, contact, matching, negotiation, physical distribution, financing, and risk

taking activities associated with Seaside Filtering System.

In order to purchase a Seaside Filtering System, business-customers will be required to

communicate directly with Culligan. The order for a system may be placed by using Culligan’s


official website or by calling the warehouse in Salinas, CA via telephone. Culligan will transport

the system by company vehicles or train to the cruise ship’s location.

The direct marketing channel was chosen because it is time- and cost-efficient for cruise

lines. Direct communication with Culligan allows installation on cruise ships to begin sooner

than if any intermediaries was involved. No intermediaries also means lower market prices be-

cause Culligan will not have to pay commission or other costs related to selling and/or holding of

a Seaside Filter System to intermediaries.

Marketing Communications:

The marketers of the Seaside have chosen to create personal selling, public relations, and

direct marketing strategies to communicate the Seaside Filtering System to target consumers.

Personal selling will be mandatory because presentations, phone calls, and meetings will be

Culligan’s only methods of informing and persuading offers to clients. Nonetheless, it also

positions Culligan to manage and build customer relationships, which can lead to win-win

transactions and future business for Culligan. Public relations because part of the marketing

strategy is to capture the acceptance of many environmentally conscious consumers in order to

attract the interests of cruise lines aspiring to operate sustainable cruise ships. Direct marketing is

a promotion tool that will be utilized by the marketers to have an interactive relationship with its

clients. In all, the marketing promotion tools are methods for directly communicating with guests

to supply them with important information regarding the environment and the competitive

advantages of Seaside Filtering System.

Marketing Research

The marketers of the Seaside Filtering System obtained information and data for the mar-

keting of the system through primary and secondary research. Primary research consisted of a

survey in which 81 people responded. Secondary research was conducted by analyzing web arti-

cles, webpages, and web documents. Further research will need to be conducted to understand

the environmental opinions of consumers. Information that will be useful in determining what

new needs cruise lines are experiencing as well as what cruise lines care about. Data about the

conditions of the ocean will also be mandatory to obtain because the marketers will need to un-

derstand if it is achieving its marketing objective of preserving the ocean. And lastly, the mar-


keters would be wise to research what new markets it can enter once all cruise ships become sus-

tainable companies.

Financials

Break-even Analysis

Below are the break-even analyses for both production and marketing costs. In order to

calculate a break-even volume and minimum price to cover estimated expenses, both are

included in the third chart.

Figure 5: Productions Cost Breakdowns

Break-Even AnalysisProduction Costs Breakdown

Contract Price Per Unit: $2,000,000Fixed Costs Per Month Per Year

Rent (45,501 SF warehouse) $ 30,334.00 $ 364,008.00 Utilities $ 11,375.00 $ 136,503.00 Equipment $ 12,167.00 $ 146,000.00 Maintenance $ 5,688.00 $ 68,252.00

Total Fixed Costs $ 59,564.00 $ 714,768.00 Variable Costs Per Unit

Raw Materials $ 6,275.00 Wages $ 375,000.00 Transportation $ 11,402.00 Assembly $ 31,250.00 Installation $ 56,582.00

Total Variable Costs $ 480,509.00

Figure 6: Marketing Cost Breakdowns

Break-Even AnalysisMarketing Costs Breakdown

Contract Price Per Unit: $2,000,000Fixed Marketing Costs Per Month Per Year

Rent (3000 SF of warehouse) $ 2,000.00 $ 24,000.00 Employee Salaries $ 43,750.00 $ 525,000.00 Advertising Production $ 1,666.00 $ 20,000.00 Other Misc. $ 1,500.00 $ 18,000.00

Total Fixed Marketing Costs $ 48,916.00 $ 587,000.00 Variable Marketing Costs Cost Per Unit

PR Operating Expenses $ 3,250.00 Travel $ 6,000.00


Personal Selling $ 5,000.00 Total Variable Marketing Costs $ 14,250.00

The marketers have calculated that in order to break even there needs to be one sale in the

first year and minimum revenue of $1,697,758.70. The production and financial goals for the

first year exceed the expected break-even points.

Figure 7: Break-Even Analysis

Break-Even AnalysisIncludes Both Cost Breakdown Calculations

Sales Price $ 2,000,000.00 Fixed Cost $ 1,277,768.00 Variable Costs $ 494,759.00 Break-Even in Units 0.85Break-Even in Dollars $ 1,697,758.70

Sales Forecast

The prepared sales forecast below shows the company’s goal to sell two units in the first

two years and then increase production in the third year. The system in sold in a contract at a

price of $2 million and in order to accommodate the company’s expenses and cruise line

company’s interest there will be a division of payments over two financial quarters. A total 55%

of the sales price in required at signing and the remaining 45% will be due upon final instillation

of the system. This forecast allows Culligan to gain a profit of $454,946 in the first year.

Figure 8: Sales Forecast

Sales ForecastContract Price Per Unit: $2,000,000Year 1 2016 Q1 Q2 Q3 Q4 Total

Sales per unit 1 1 2

Revenue $ 1,100,000.00 $ 900,000.00 $ 1,100,000.00 $ 900,000.00 $ 4,000,000.00 Year 2 2017

Sales per unit 2

Revenue $ 4,000,000.00 Year 3 2018

Sales per unit 3


Revenue $ 6,000,000.00

Expense Forecasts

The office space for the marketing team consisting of seven people will use 3,000 square

feet of space in the production warehouse. The employee’s salaries average at $75,000 per year

per employee. The advertising production and other fixed costs cover costs involved with web

design and maintenance as well as any product or service used in direct marketing by personnel.

Travel and personal selling expenses are variable based on where the intended clients are being

contacted and what stage of the marketing process the company is in. As the company will

expand and increase product production, the expenses will increase as well as include new costs

for calculations.

Figure 9: Expense Forecast

Expense ForecastFixed Marketing Costs Per Year

Rent (3000 SF of warehouse) $ 24,000.00 Employee Salaries $ 525,000.00 Advertising Production $ 20,000.00 Other Misc. $ 18,000.00

Total Fixed Marketing Costs $ 587,000.00 Variable Marketing Costs Per Unit

Travel $ 6,000.00 Personal Selling $ 5,000.00

Total Variable Marketing Costs $ 11,000.00

Controls

To monitor the progress of the various marketing objectives, marketers will conduct

surveys to measure company and product awareness, analyze revenues to measure if there’s an

increase in consumers, and reach out to Oceana to help study and measure the quality of marine

life.

The first objective is to create Company and Product awareness for consumers to

understand the goals of the company. Marketers will conduct two different surveys; one will be

aimed at cruise liners, the other will measure consumer awareness. These surveys will


differentiate, as the objective is to gain insight from the different parties and understand whether

the product is gaining recognition.

The second objective is to increase the revenue of cruise liners. The idea is that

consumers will be more prone to choose a cruise liner that uses this filter system over a cruise

line that doesn’t. We will measure this by analyzing and comparing revenues to cruise lines that

don’t have this system in place.

The third and most important objective is to preserve the oceans. Measuring such

objective will be difficult, but with the help of Oceana marketers will be able to conduct research

experiments to measure water waste in the oceans. Oceana will conduct experiment to measure

waste in the oceans with the most traffic before these filters are implemented and after they are

deployed.

Implementation

To being the implementation process of Culligan’s Seaside filtering system, Culligan

must first contact manufacturers for the parts and materials needed to build the filtering system.

Once the filtering system is constructed, the system will undergo vigorous troubleshooting tests

to ensure the filters are working properly and the water moves from one container to another

adequately. While being tested, it is important the system operates remarkably well. If the system

doesn’t meet the standards set by the company and Oceana, modifications will be necessary.

Upon completion, the Seaside filtering system will be showcased and presented to cruise liners.

When Culligan gains the interest of cruise liners, contracts and offers will be discussed. If

cruise liners plan to implement this system on five or more ships, they will receive a special

offer. When writing contracts only those systems that have been down-paid for will be

manufactured, this will ensure extra units are not produced, and will allow Culligan to keep costs

down.

The company will keep track and monitor the filtering systems to ensure they are working

properly and analyze and document the different variables including filtration quality, product

awareness, and cruise line revenues. The implementation process will be long, but working

diligently the goals set by Culligan and Oceana will be accomplished.

Marketing Organization

For Business-to-business marketing, it is important to build a team of representatives to

better assist the needs of this market. The Seaside filtering system will not be mass-produced, but


will require agents to be very knowledgeable and technical. Insightful individuals will be hired to

complement the work of sales representatives. Since this is a new product that requires educating

consumers, personal selling will be crucial. Personal selling will help consumers to better

understand how this product works and the advantages of integrating such system. The personal

selling team will be composed of technicians and representatives what will contact cruise liners

and will explain how this system works. Below is a chart of the marketing department.

Figure 10: Marketing Department Breakdown

Since a lot of the cruise liners operate on the southern region of the West the South sales

team will be bigger than that of the North. The North team will be situated in Oregon will it will

focus on cruise liners that sail to Alaska. The southern team will operate from Los Angeles.

These teams will work closely with each other and will set goals to meet by the end of each

quarter. It will also be important to hold meetings with both teams to keep each team up to date

on how they’re doing and share experiences.

Contingency Planning

The most difficult process for the Seaside filtering system is gaining Oceana’s support

and creating a regulation that will force cruise liners to use better filtering systems. By creating a

regulation cruise liners will have no option, but to improve their filtering systems. This will

ultimately influence the increase of Culligan consumers. However, creating and passing such

regulation requires a long and difficult process. This is a major difficulty and Culligan will have

no choice, but to wait and be patient. Culligan also runs the risk of the filtering system failing

and having to spend more than what was initially anticipated. If the company faces the issue of


producing a defective product, an alternative path Culligan can take is to market the system as

one that filters the water and instead of recycling the water back to the ship; it can be dumped

into the water. Although the intention of the filtering system is not to dump the water, this

alternative will still address the environmental issue, as the water being dumped will be cleaner.


References

3M. (n.d.). Retrieved October 17, 2014, from http://solutions.3m.com/wps/portal/3M/

en_US/3M-Purification-Inc/3MPI-US/

About Greywater. (2014, January 1). Reuse. Retrieved October 6, 2014, from

http://greywateraction.org/content/about-greywater-reuse

Brave New Leaf (2008, March 07). The 12 kinds of environmentalists. Brave New Leaf

Retrieved from http://www.bravenewleaf.com/environment/2008/03/the-12-kinds-of.html

Bloomberg. (n.d.). Company overview of ZENON Environmental Inc. Retrieved October 16,

2014, from http://investing.businessweek.com/research/stocks/private/snapshot.asp?

privcapId=877418

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http://www.cruisemarketwatch.com/market/

Culligan. (2013, January 1). Retrieved October 16, 2014, from http://www.culligan.com/

Culligan. (2014, January 1). Feel Safe Knowing. Retrieved November 24, 2014, from

http://www.culligannation.com/

Friends of the Earth. (2013). 2013 Cruise report card. Friends of the Earth. Retrieved from

http://www.foe.org/cruise-report-card

National Geographic. (n.d.). Great pacific garbage patch. Retrieved October 6, 2014, from

http://education.nationalgeographic.com/education/encyclopedia/great-pacific-garbage-

patch/?ar_a=1

Hilton, S. (2007, October 18). Cruise lines tackle challenge of reducing waste, protecting oceans.

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challenge-of-reducing-waste-2534432.php.

http://www.sfgate.com/travel/article/Cruise-lines-tackle-

http://www.culligan.com/

http://www.cruisemarketwatch.com/market/

http://investing.businessweek.com/research/stocks/private/snapshot.asp

http://greywateraction.org/content/about-greywater-reuse

http://solutions.3m.com/wps/portal/3M/


Hosmer, L. (2008). The ethics of management (6th ed., pp. 21-22). New York, NY:

McGraw-Hill Companies.

Investigate West. (2010, June 16). A below-deck look at recycling and wastewater treatment on

Holland America's Zaandam. Retrieved October 6, 2014, from

http://www.invw.org/node/1063

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www.cruisecritic.com/articles.cfm?ID=528

Oceana. (2012). Cruise ship pollution: overview. Oceana. Retrieved from http://oceana.org/en/

our-work/stop-ocean-pollution/cruise-ship-pollution/overview

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view.html


Appendix A: Vacation on a Cruise Ship Survey

What's your age range? *o 18-25

o 26-33

o 34-41

o 42-49

o 50-57

o 58-65

o 66+

What is your occupation? *o Student

o Full time employee

o Retired

o Other:______________

How aware are you of our environmental issues? *

1 2 3 4 5

Not aware Very aware

Are your purchasing decisions impacted by your environmental awareness? *

1 2 3 4 5

Not at all Most Definitely

Have you been on a cruise ship in the last 5 years? o Yes

o No

If yes, do you remember the name of the cruise ship? __________________________


If no, would you like to or are you planning to have a vacation on a cruise ship? o Yes

o No

Are you aware of the dumping of "grey water" by cruise ships? (Grey water is created by showers, sinks, dishwashers and laundries in the cruise ships which contains contaminates that are dumped into our oceans causing damages to the environment.)

o Yeso No

Now that you know a little bit about the environmental concerns related to cruise ships, would you still consider going on vacation on a cruise ship? *

o Yes

o No

If, a cruise company began implementing environmental friendly practices, would you use the services from this company rather than one that didn't? *

o Yes

o No


Appendix B: Financials Calculations

Production Costs

Rent:

1520 Moffett St, Salinas CA,

45,501 SF

Estimated at $8/SF

Utilities:

Estimated at $3/SF of 45,501 SF

Equipment:

Estimated at $400/Day running 365 days a year

Maintenance:

Estimated at $1.50/SF on 45,501 SF

Raw Materials:

Based on current Culligan Products

$800 filtering systems, $2,500 each tank (total of 2), $200 pipes, $275 pumps

Wages:

Employees- 25 personnel earning $15/Hour

Transportation:

Local and Semi trucks for transportation.

Based on 2 local trucks averaging 15 mpg at $3.25 gas price/ gallon driving 100

miles/week

And 1 Semi truck for larger transportation averaging 7 mpg at $3.25 gas price/gallon


driving 2000 miles/week

Assembly:

Estimated on production of $250/day per 125 days of production

Installation:

Estimated for a 2 week installation

Transportation costs- $582

Labor- $6000

Misc. Costs- $50,000

Marketing Costs

Rent:

Included in production rent, offices using 3,000 SF of 45,501SF warehouse.

Salaries:

Total of 7 employees in marketing department each averaging $75,000 per year

Adv Production:

Web Design and maintenance- $7,000

Direct Marketing- $13,000

PR Opt Expenses:

Estimated $3,250

Travel:

Based on long distance travel expenses for 2 people totaling $7,000

Advertising:

Based on costs for production information, models, material per year totaling $10,000

rornelasbus306.weebly.com · web viewsales forecast contract price per unit: $2,000,000 year 1 2016...

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