Paper framework

1
Paper framework

• Survey on board of two ships of MSC
  (Mediterranean Shipping Cruise)
• Ships present in two different market
• Mediterranean
• Caribbean
• Testing shipping strategy by changing pricing
  system offered
• Applying demand elasticity approach to test
  previous hypothesis

2
Melody-Lirica ships market operation
MSC (Mediterranean
Shipping Cruise)
Melody Mediterranean market
Lirica Carebbean Market
3
Survey structure

• Lirica sample of 795 passengers on board the ship
• Melody sample of 560 passengers on board the
  ships
• Different numbers of category on board the ships
• Necessity of category homogenization
• Strong limitations of sample dimension

4
Melody ship passenger composition in
Mediterrenean market nationality
5
Lirica ship passenger composition in Caribbean
market nationality
6
Melody ship passenger composition in
Mediterranean market age
7
Lirica ship passenger composition in Caribbean
market age
8
Melody ship passenger composition in
Mediterranean market professional status
9
Lirica ship passenger composition in Caribbean
market professional status
10
Passengers composition on board the ships

• Europeans passengers evidence a different choice
  criteria on two markets
• medium age of passengers opposite category
  choosing
• Managers seem to like last high cost category in
  both market

11
Utility function of logit model

• Vcat 1-3 b1income b2ageb3p1b4asa1
  
• Vcat 4-6 b1income b2ageb3p2b5asa2
  
• Vcat 7 b1income b2ageb3p3b6asa3
  
• Vcat 8 b1income b2ageb3p4b7asa4
  
• Vcat 9 b1income b2ageb3p5b8asa5
  
• Vcat 10-11-12 b1income b2ageb3p6
• V utility function
• Cat category of shups pricing
• Asa specific constant
• B coefficient from maimum lekelihood applòication

12
Results of application

• Direct and crossed point elasticity for Melody
  prices
• Ep1-3 4.91 direct
• Ep1-3 -0.84 cross (as regard 4-6 category)
• Ep1-3 -1.01 cross (as regard 10-12)
• Ep 1-3 -0.72 cross ( as regard 5-7)
• -----------------------------------------
• -----------------------------------------

13
Conclusion

• Market strongly characterized by oligopolistic
  form
• Direct point elasticity is positive and high
• Crossed point elasticity is negative and low
• Generally crossed point elasticity is near one to
  mean a variation of the price of one category
  implies a proportional variation of the
  competing category of the same sign