Lifestyle media strategy of the Dutch superyacht industry.

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Executive summary

In the following report I seek to address how to apply a tailored strategy in order to appeal to an illusive audience: billionaires. Not only does this involve analyzing the most recent global wealth distribution trends, but also getting a better understanding of the behavioral and psychographic patterns of these individuals, which form the most prominent customer base of the superyacht industry.

For companies in the luxury industry, an increasingly prevalent issue is how to effectively distinguish oneself from competition by crafting a compelling

narrative in an overcrowded media environment, existing of print and digital publications, as well as online marketing platforms such as social media. So the question becomes how differentiation can be achieved, as well as what new areas can be targeted? As exemplified in this report, an effective way of achieving this desired differentiation is by focusing on the customer

experience, defined as the internal and subjective response customers have to any direct or indirect contact with a company. As explored in this report, storytelling is a powerful instrument of the Dutch superyacht industry because of its rich maritime history.

This report will further elucidate another method of creating a competitive differentiator, which is optimizing the customer’s end-to-end journey. The benefit of adapting a journey-centric approach is that a customer’s behavioral patterns are examined after which a strategy is designed to enter this journey, for instance by means of a print publication as is the case for this report.

The goal of this report is to present a media strategy, which is designed to identify individuals or geographical locations that effect the decision-making process of potential buyers of superyachts. These individuals or areas are the focus for the distribution strategy of HISWA Holland Yachting Group’s

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1 The project

The goal of this company project is to identify individuals or processes that affect the decision-making process of potential buyers of superyachts. The goal of this company project is to identify individuals or processes that affect the decision-making process of potential buyers of superyachts. HISWA Holland Yachting Group’s tabloid was produced in order to reach buyers of yachts and to garner their interest in Dutch yachts. By targeting influencers of the decision-making process, the potential buyer can indirectly be reached and influenced.

1.1 Organizational overview

The Netherlands is one of the most highly regarded leaders of the

international superyacht industry. The HISWA Holland Yachting Group acts as a representative of the Dutch superyacht industry on behalf of 45 members in four categories:

! builders of sailing yachts ! builders of motor yachts ! marine equipment suppliers ! marine services

The collective marketing campaign for 2014 revolves around the message: ‘Think Yachts, Think Holland’, aimed at creating associative recognition in the consumer’s mind between yachts and Holland. The campaign’s primary goal is to increase international trade for its members by reaching customers in new markets. In order to trigger curiosity, the campaign is further

strengthened by a catchy ‘Start Thinking’ message used in its advertising campaign. The intention here is to encourage the audience to ‘start thinking’ about Dutch-built yachts. Both words are also connected to the overall ‘Think Yachts, Think Holland’ campaign message. Storytelling is an important aspect as well and based on personal stories by HISWA Holland Yachting Group members in relation to its core values: Heritage, Quirkiness, and Innovation.

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An important element of the marketing strategy is that a strong emphasis is placed on the lifestyle aspect of yachting as opposed to strictly on

superyachts themselves, as is the case with most competitors. In order to invigorate this strategic approach, a 32-page superyacht tabloid was

produced, titled “Dutch superyacht industry & lifestyle trends’. The purpose of the tabloid is twofold: a) emphasizing the strength of the Dutch superyacht industry with the goal to generate new leads for superyacht orders, as well as b) having a physical marketing presence at events, presentations and other affairs.

1.2 Project overview

This project was sparked by the launch of the superyacht tabloid as part of the lifestyle strategy. Furthermore, the company expressed the desire to receive an analysis of the latest superyacht business data and industry statistics. In addition to this, global wealth distribution should be closely monitored in order to determine which markets provide growth potential for the Dutch superyacht industry. Thus, the nature of this project is both to provide recent and hands-on market intelligence for the HISWA Holland Yachting Group, as well as to analyze academic frameworks that help create a deeper understanding of the mechanisms at stake.

As such, the deliverables for this project are as follows:

! A comprehensive market analysis on the industry as a whole with a specific focus on the five primary markets: the Netherlands, Germany, Italy, United States and China

! An analysis of global wealth distribution

! Implementation of the Lifestyle strategy: which events and media resources should be targeted in order to effectively reach prospective superyacht owners?

! Delivery of a Media Plan for 2014-2015 with regard to an efficient distribution of HISWA Holland Yachting Group’s superyacht tabloid

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Three steps were undertaken in order to establish a sufficient knowledge base from which the necessary intelligence could be derived in order to provide meaningful solutions:

1. In-depth interviews with industry executives in the yachting and luxury industry;

2. Research on recent concepts in state of the art literature; and

3. Analysis of market statistics and industry data, as well as luxury and industry trends.

1.3 Industry overview

The superyacht industry is considered by many to be the most luxurious industry on earth. The extravagant value of ‘made to measure’ luxury motor and sailing yachts make them an indispensable part of the world’s ultra wealthy and Hollywood elite, often portrayed in the media while cruising in Southern France, the Caribbean or other tropical locations. This report will provide an in-depth analysis of this mysterious, and fascinating industry in which the Netherlands plays a dominant role.

Although no industry standard for the definition of the word superyacht exists, for this report any yacht over 30 metres in length is considered a superyacht. The largest superyacht to date is 180 metre Azzam (see Figure 1), built by Lürssen shipyard in Germany for the president of the United Arab Emirates. She was delivered in 2013 for a price of $605 million after three years of construction. Additionally, the yacht will cost another $60 million, or 10% of its value, per year for maintenance costs to keep her afloat (CNN, 2013).

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Figure 1: 180 metre Azzam, the world’s largest superyacht

With over 400 years of maritime history and the capacity to design and

engineer some of the world’s most envied and prized yachts, the Netherlands is classed as one of the biggest players in the luxury custom-built yachting industry. The Netherlands ranked number one in the world in 2012 based on 18 delivered yachts with a turnover of $1.25 billion, representing a 26% of the global market share. In 2013, the Netherlands was ranked number two in the world for both total delivered yachts at 21, as well as for new superyacht orders, which were 29. For the ordered and delivered yachts within the Dutch market, there was an average length of 53 metres. The Netherlands was only surpassed by Italy with 62 orders, yet the Italian market had a somewhat smaller average yacht length of 41 metres (The SuperYacht Times, 2014).

1.4 Dutch yachting history

Several factors help explain the Netherlands’ indisputable reputation for top-tier quality in the industry, and history is certainly one of them. The country can lay claim to an impressive pedigree dating back to the 1600s when

oceanic endeavors led to the establishment of the Dutch East India Company (VOC) - the first corporation in the world. During this period, referred to by historians as the Golden Age, the Dutch were pioneers in sailing and

successfully conquering trade waves around the globe. In fact, in 1648, over half of all Europe’s trade was carried on Dutch ships. To this day, the

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Netherlands builds upon that reputation and remains at the frontline of yachting

innovations and performance.

Furthermore, the name ‘the Netherlands’ literally means “Low Country”, and only 50% of the land exceeds one meter or more above sea level. As such, the population has vast experience with boats of all shapes and sizes in order to thrive in its water-rich landscape. Globally admired for their dams, dikes, windmills and water management systems, the Dutch are in a constant battle against the sea. This involves tremendous feats of innovation, engineering and technology, which permeate throughout today’s yachting industry.

Lastly, with 12,000 maritime companies located within a 100-kilometer radius, the Netherlands possesses a unique geographical set up. It is a place where yacht builders are able to collaborate face-to-face with naval architects, marine engineers, equipment suppliers and specialized consultants. The abundance of yachting intelligence at such close proximity provides a unique vantage point unrivaled by international competition.

1.5 Conquering the United States

It was thanks to an experience in the United States that the Dutch boat industry was elevated to new heights. Prior to the start of World War II, the boating business had been healthy in the Netherlands. However, little money was left in the years after the war ended in 1945 and orders for pleasure yachts were hit hard. It was a collaboration between three of the country’s best-known shipyards that led to the founding of Feadship (First Export Association of Dutch Shipbuilders) in 1949. The intention for these yards to

From ‘Jacht’ to ‘Yacht’

It was the Dutch who invented the concept of yachting. The word ‘yacht’ originates from the Dutch word ‘jacht’, meaning ‘hunt’. Over time the concept of a yacht turned from a light navy vessel for chasing pirates, to a pleasure vessel used to convey wealthy Dutch merchants.

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enough wealth in the United States for their efforts to be feasible, and

secondly, the United States had no capability to build steel yachts at that time. This provided a massive opportunity for Feadship, which was an expert at building steel displacement yachts.

Feadship’s first joint initiative was to participate in the New York Boat Show of 1951. After much

deliberation, six Feadship yachts were transported across the Atlantic to be showcased in New York. Much to everyone’s surprise, all six ships were promptly sold at the show, allowing the team to travel back by airplane instead of by sea.

Over the years to come Feadship set a best-in-class standard for the global industry. The brand defined quality in their category, similar to what

Stradivarius did with its legendary violins (Tjan, 2009). Recognized as the world leader of custom-built luxury motoryachts, orders started coming in for both steel and aluminum yachts, mainly from the USA. Sizes were ever increasing and with that, so increased the desire for an ever higher standard of luxury. In the 1970s, Feadship was launching several yachts each year and the company was continuously at the forefront of innovations in both

technology and design. Its recognition as a luxury brand grew even more once captains of industry such as Henry Ford, Malcolm Forbes and presumably the Anheuser-Busch family started buying Feadships. This international success created business opportunities for other Dutch shipyards and helped boost sales and further develop the Netherlands’ powerful reputation it enjoys to this day.

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2 The global yachting market in 2014

In order to get an impression of the magnitude of the Dutch’s impact on the industry, we first need to have an understanding of the total global yachting market. The Dutch boatbuilding industry will be introduced, including some of the most powerful shipyards in the Netherlands. Recent economic challenges are explained, followed by an in-depth analysis of the primary global order markets: Netherlands, Germany, Italy, United States and China. Subsequently a more brief description will be given of five secondary order markets: Turkey, United Kingdom, France, Oceania and Rest of the World.

2.1 The Dutch boatbuilding industry

The Dutch boatbuilding industry exists of two extremes. One segment consists of world-renowned superyacht builders that export to the elite. In contrast, the other consists of numerous small shipyards that produce steel

Steve Jobs’ Venus superyacht

Superyacht Venus was launched in December 2012 at Feadship’s Royal De Vries shipyard in Aalsmeer, the Netherlands. Soon nicknamed ‘iBoat’ for its sleek, high tech design by renowned French architect Philippe Starck, Venus made headlines around the world and sent shockwaves through the yachting community. Although Feadship declined to confirm rumors that the yacht was commissioned by the late Steve Jobs, the founder of Apple Inc., the entrepreneur himself did tell his biographer, Walter Isaacson, that he was building a megayacht with Feadship that was “sleek and minimalist, like an Apple store.”

The yacht was impounded at the Port of Amsterdam on 21 December following a dispute over payments to mister Starck who claimed that Jobs' heirs owed him €3 million of his €9 million fee for the project. The matter was settled three days later by Jobs’ estate. (MegaYacht News, 2013)

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displacement motorboats, sloops and sailing boats to maneuver around the Dutch waterways and coast, mainly serving the domestic market. With this dual personality, the overall Dutch industry is a fragmented set of small

businesses serving narrow niches of the marine industry. According to Jeroen van den Heuvel at Dutch marine association HISWA, the marketing of these small businesses is one of the largest challenges facing the Dutch industry: “The Netherlands has lots of small companies and they have difficulties

promoting themselves”(IBI, 2014, p.34). This does not apply for leading Dutch superyacht firms, which manage solid marketing campaigns and have a sophisticated online presence.

2.2 The top yards

HISWA Holland Yachting Group has 45 members in total of which 14 are shipbuilders - all world-renowned yards specialized in superyacht

construction. As an illustration, in May 2014, Amsterdam hosted the World Superyacht Awards gala evening, which is considered to be the Oscars of the superyacht industry. Leading players, representatives and owners from the international world of superyachts came from all across the globe to collect a total of 27 prestigious Neptune trophies. Dutch yards won as many as seven prizes. No other country collected as many awards as the Netherlands (Boat International, 2014, p. 40). The following sections provide a brief description of five leading yards in the Netherlands: Feadship, Oceanco, Amels, Royal Huisman and Vitters.

2.2.1 Feadship

As described previously, Feadship has a vast history in the industry and is globally recognized as the most influential builder and designer of custom-built motor yachts. With over 1,200 employees, Feadship is the largest

organization in the world to specialize in superyachts. The company reported eight new orders in 2014 for a total length of 555 metres, or 69 metres on average (ShowBoats, 2014).

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2.2.2 Oceanco

Established in 1987, Oceanco is a privately owned custom yacht builder specialized in the niche 80+ metre market. The yard is currently building a new facility to allow for construction of projects up to 200 metres. Oceanco has 400 employees and six new superyacht orders for 2014, with an average yacht size of 95 metres (ShowBoats, 2014). Oceanco’s yacht, Nirvana, won the 2013 Best of the Best award during the World Superyacht Awards (Boat International, 2014, p. 40). Movie director Steven Spielberg owns an 86 metre Oceanco yacht named Seven Seas (see Figure 2). It is equipped with a special stabilizing system that reduces seasickness, from which Spielberg reportedly suffers.

Figure 2: Steven Spielberg’s 86 metre superyacht, Seven Seas, by Dutch yachtbuilder Oceanco

2.2.3 Amels

Amels was established in 1982, employs 225 workers and is located around 30 minutes by road from Amsterdam in the town of Vlissingen. The yard recently launched its largest yacht to date, the 83 metre project Amels 272. Amels introduced its revolutionary Limited Edition-range to bridge the gap between pure custom and semi-custom construction. This means these yachts aren’t entirely one of a kind, but have an existing design whereby the client can choose a high level of customization. This allows for a superior

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delivery time of half of the standard construction time. With 10 new

superyacht orders reported in 2014, Amels has the most orders of all Dutch yards.

2.2.4 Royal Huisman

Established in 1884, family-owned shipyard Royal Huisman is located in the geographical heart of the Netherlands and employs 380 workers. Winning a total of 25 global superyacht awards for their latest ten yachts is a clear indication of Royal Huisman’s reputation for excellence and performance. As such, the yard was awarded the “Royal” honor in 1984 in recognition of 100 years of quality and excellence. The yard is working on two new orders in 2014 with an average length of 47 metres.

2.2.5 Vitters Shipyard

Established in 1990, Vitters Shipyard has become one of the world’s leading builders of modern custom sailing and motor yachts. The yard won two World Superyacht Awards in May 2014: ‘Best sailing yacht in 40m+ size range’ and ‘Advanced design and high quality

construction’. Vitters is working on two new yachts in 2014, both 46 metres in length (Vitters Shipyard, 2014).

2.3 Impact of the financial economic crisis

The past few years have proven that the superyacht industry is not immune to an economic downturn. After a peak for the industry in 2008, superyacht orders were hit by the global financial crisis causing numerous clients to delay or cancel projects. Sales of new yachts stood at $3.5 billion in 2012, down from $5.4 billion in 2008 (Camper & Nicholsons, 2013).

Photo: Award Winning 46 metre yacht Ganesha by Vitters Shipyard

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Gladly however, the crisis did not have the same effect on all markets. Although Europe experienced a temporary fall in demand, it has 545 superyacht orders in build-phase for 2014 and remains the market leader with a significant

advantage. Also, certain geographical areas such as Asia were better

supported by development and

therefore experienced less discomfort. Asia has 80 superyachts in-build for 2014.

The various market segments reacted to the crisis in different ways as well: the superyacht sector continued to grow around the world, while contrastingly, demand for smaller boats of up to 12 metres in length plummeted. And while everyone has been affected in some way, there are new signs of an

increasing number of clients returning to the post-recession, tentative-recovery market that we are currently experiencing.

2.4 New superyacht orders

One of the most significant measurements of the superyacht industry is the amount of new orders per year. A new order doesn’t just provide employment for the shipyard, but also for countless suppliers, designers and more. A total of 159 new orders were reported in 2013, which is a 5,3% increase over orders in 2012. When broken down, this equals to 145 motor yachts (91%) and 14 sailing yachts with an average size per order of 45.1 metres.

Source: The Superyacht Annual Report 2014 545 80 ₅₁ 30 ₇ 0 100 200 300 400 500 600

Europe Asia Rest of the world

USA Oceania

YACHTS IN-BUILD AS OF JANUARY 2014

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In fact, the total number of orders for 2013 is higher than 159 since additional contracts are known to have been signed in Germany and Italy. Due to the

secretive nature of the industry however, it remains difficult to ascertain what type of orders these are since no further

details have been released to the public for confidentiality reasons.

2.5 Conclusions

! Total superyachts in build are back to a healthy level in 2014

! Dutch yachts won a total of seven prizes at the 2014 Global Superyacht Awards in recognition of their design, innovation, and performance. ! Feadship, Oceanco and Royal Huisman are some of the most leading

global yards

! Although temporarily impacted by the global financial crisis, the superyacht industry continued to grow, while smaller boat segments were hit

! New superyacht orders came to 159 in 2013. That represents a 5.3% increase over the previous year

145 14

TOTAL SUPERYACHT ORDERS 2013

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2.6 Global superyacht markets

In order to effectuate an understanding of the global superyacht industry, an analysis was conducted for the industry’s ten most significant superyacht markets, illustrated below. Italy produces the most yachts in the world, followed by the Netherlands, Turkey and the collective of ‘rest of the world’.

Source: The Superyacht Annual Report 2014

Source: Superyacht Times, 2014

Italy’s highest output in the industry translates to its highest value delivery, closely followed by Germany, which produces just a fraction of Italy’s yachts, but at much higher lengths. The Netherlands claimed the world leadership position in 2012. 0 20 40 60 80 100 120 140 160 151 51 51 51 30 29 ₂₄ 15 7 ₃ SUPERYACHT PROJECTS IN-BUILD IN 2014

0 500 1000 1500 Italy Germany Netherlan ds United States Turkey 1004 944 983 2013 2012 2011 VALUE OF SUPERYACHT DELIVERIES

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2.7 Prominent order markets

Ideally, all ten global markets would be analyzed in-depth. For this report however, a selection of the five most prominent markets was made, which will be analyzed in detail. A less extensive analysis will be provided for the five remaining markets.

2.7.1

The Netherlands

Total yachts delivered to date 598 Total length overall of yachts delivered to date 27,335m Number of yachts delivered in 2013 21 Number of yachts in build as of Jan 2014 51 Average length overall of yachts in build 2014 56.5m Source: Annual superyacht report 2014

The strength of the Dutch market is irrefutable and considered the home of yacht builders without comparison. Dutch order books are enjoying a healthy 2014 and several suppliers are reporting market share growth and expansion of operations, as became evident on a press tour for international media specialists organized by HISWA Holland Yachting Group in May 2014 (The Superyacht Report, 2014, p.53).

Orders for 100+ metre yachts reported record growth in 2014, from 14 projects in 2013 to 19 projects in 2014 globally, according to the 2014 Show Boats Global Order Book. The Netherlands is keeping up with this trend and for the first time, the 100-metre barrier will be broken in 2014 with the launch of Feadship’s 102 metre Hull 808, a secret project. Feadship is looking at opportunities to further increase their production length, but the possibilities at the production facility at De Kaag are limited because of a series of twelve consecutive locks that yachts need to pass through in order to reach open water. Modifications to these locks have already been made over the past years, but they have now reached their maximum capacity and cannot be further enlarged. Therefore the company would have to move to a new location altogether, which would be a complicated operation. Oceanco is

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reportedly working on a 115 metre project as well and have increased their building facility to receive projects of up to 200 metres. The average length of Dutch projects in build is 57 metres for the year 2014. The Netherlands is only surpassed by Germany and Australia’s average length of 81 metres. The average value of Dutch superyachts delivered in 2013 was $60.6 million, according to The SuperYacht Times (2014).

The Netherlands was home to 1,290 Ultra High Net Worth Individuals (those with a minimum net worth of $30 million) in 2013, representing a total wealth of $175 billion (a 9.4% growth compared to 2012), according to Wealth-X and UBS.

2.7.2

1.10.2 Germany

Total yachts delivered to date 250 Total length overall of yachts delivered to date 14,338m Number of yachts delivered in 2013 5

Number of yachts in build as of Jan 2014 24 Average length overall of yachts in build 2014 80.6m Source: Annual superyacht report 2014

With the launch of Lürssen’s 180 metre Azzam, Germany set a new industry standard and confirmed its leadership position in ‘mega’ superyacht

construction. Germany has delivered 250 yachts to date, of which 66 were in the 70+ metre segment. Germany dominates the 2014 Boat International Top 200 largest Superyachts in the world list. Six yachts in the top 10 are German built, of which five were built by Lürssen. Germany also takes the lead in the top 200 with 70 yachts, followed by the Netherlands with 52 yachts (Boat International, 2014).

With an average new-build Length Overall (LOA) of 80.6 metres in 2014, Germany crushes the 47.8 metre overall industry average. However,

Germany has a limited production and delivered just 5 superyachts in 2013, compared to 21 in the Netherlands and 60 in Italy. Highly custom-built

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motoryachts remain the focus for Germany for 2014 and beyond (The Superyacht Annual Report, 2014).

Germany was home to 17,820 Ultra High Net Worth Individuals (those with a minimum net worth of $30 million) in 2013, representing a total wealth of $2,345 billion. Combined total wealth of these individuals increased by as much as 14.4% compared to 2012. Germany is only surpassed by the United States with regard to these figures and was the second wealthiest country in the world in 2013, according to Wealth-X and UBS.

The average value of German superyachts delivered in 2013 was $257.7 million, according to The SuperYacht Times (2014).

2.7.3

1.10.3 Italy

Total yachts delivered to date 1,415 Total length overall of yachts delivered to date 53,478m Number of yachts delivered in 2013 60 Number of yachts in build as of Jan 2014 151 Average length overall of yachts in build 2014 44.6m Source: Annual superyacht report 2014

At 1,415 launches to date and 151 yachts in build in 2014, Italy is the superyacht industry’s world leader. However, at 44.6 metres, the average length per Italian yacht is lower than that of most European yards. Only 24 Italian yachts appear in Boat International’s Top 200 list of

largest superyachts, of which six are in the top 100 (Boat International, 2014). 121 ₂₅₀

1,415 598

312

TOTAL YACHTS DELIVERED

France Germany Italy Netherland s

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Despite the fact that few Italian shipyards have secured new orders, industry analysts feel confident that 2014 will be the exit of the current crisis. Italy’s craftsmanship in many industries is recognized worldwide with brands such as Ferrari and Riva. This results in a high demand from the Asian market. Also, three heavyweight Chinese conglomerates have significantly impacted the Italian boat industry over the past two years by acquiring majority and minority shares in three of Italy’s most iconic yacht brands: Sanlorenzo, Sunseeker ad Ferretti, ranked as numbers 2, 3 and 5 respectively in the 2014 Global Order Book. All three owners have ambitious plans for their shipyards, whereby Sunseeker’s approach is most notable. Wang Jianlin, China’s richest man in 2013 according to The World’s Billionaires by Forbes, plans to dramatically increase production from 180 yachts a year to a potential 370 yachts a year in order to meet Chinese demand. In order to construct yachts specifically for the Chinese market, a proposal for a Sunseeker factory is in development. Jianlin’s plans also include the construction of three 300-berth marinas, each with a Sunseeker Club (International Boat Industry, p. 40, 2014). It will be interesting to see what growth opportunities this increased involvement in Asia will offer for Italian yards. The majority of Italian orders are motorboat projects.

Italy was home to 2,075 Ultra High Net Worth Individuals in 2013,

representing a total wealth of $235 billion (a 6.8% growth compared to 2012), according to Wealth-X and UBS.

The average value of Italian superyachts delivered in 2013 was $21 million, according to The SuperYacht Times (2014).

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2.7.4

1.10.4 The United States of America

Total yachts delivered to date 817 Total overall length of yachts delivered to date 30,920m Number of yachts delivered in 2013 10 Number of yachts in build as of Jan 2014 30 Average overall length of yachts in build 2014 47 Source: Annual superyacht report 2014

The USA has a passion, a tradition and a natural affinity for yachting, whether as an owner or as a professional working in the industry. With 44% of the world’s superyachts owned by Americans, as well as with one quarter of the world’s billionaires in one country (515), the United States is a primary target base for the yachting industry as a whole, both in terms of numbers of clients and in terms of major industry suppliers, shipyards and brokers (Wealth-X and UBS, 2013).

The total economic impact of the industry is $36.7 billion. Every superyacht afloat in US waters sends an economic ripple effect down the supply chain, as illustrated below.

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For the first time since 2008, the outlook for the overall US boat industry is positive. An 8-9% gain of unit sales is expected for 2014, which is a good indicator of post-recession recovery. However, the recovery is still a shadow of the pre-downturn years. The state of order books of boat builders is a mixed bag with some doing very well and others struggling. Overall, new-boat sales are at about 60% of their peak in 2006 of about 280,000 boats per year. Interestingly, in the recreation boat industry the two areas with most

significant growth for brands such as Sea Ray, Bayliner and Meridian are: 1) new outboard engines and 2) large yachts. Luxury brand Chris Craft is also recovering well and back at 75% of its pre-downturn sales. However, the middle-market sterndrive brands have been hit by a deceleration of sales.

For builders of highly lucrative luxury motoryachts in the 10 to 30-metre segment, North America is the strongest export market. Although still only at about 25% of its pre-recession size with sales of around 200 units per year, this market is making a comeback. Euro-style yachts dominate the market and although US builders Sea Ray and Marquis have attempted to capture market share, they met stiff competition from Italian and UK brands such as Ferretti, Azimut, Benetti and Princess Yachts.

The United States’ superyacht sector made a comeback in 2013. There was an overall increase of demand for deferred maintenance and refit services due to new owners coming into the marketplace. Superyacht owners have started investing in their yachts again now that the economy is picking up. The refit business is expecting an extra boost this year since a record amount of 275 yachts were delivered in 2008. Many of those will be ready for their five-year refit in 2014. Additionally, the 34th America’s Cup and Louis Vuitton Cup held in San Francisco caused a surge of refit work for American yards for those yachts that traveled to the USA for the event (Verdon, 2014, p. 18).

With 30 superyachts in build as of January 2014, the United States ranks fourth on the list of most projects under construction after Italy, the

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In 2013, delivered yachts had an average length of 37.8 metres, while yachts in build in 2014 have an average length of 47 metres. The third largest

superyacht ever built in the USA was launched in 2013, the 66 metre Invictus by Delta Marine. The largest US-built yacht is the 86 metre Cakewalk,

launched in 2010 by Derecktor Shipyards in New York.

The United States is the wealthiest country in the world with a total of 65,505 Ultra High Net Worth Individuals in 2013, representing a total wealth of $9,085 billion (a 9.7% growth compared to 2012), according to Wealth-X and UBS.

The average value of the American superyachts delivered in 2013 was $26.2 million, according to The SuperYacht Times (2014).

2.7.5

Asia

Total yachts delivered to date 200 Total overall length of yachts delivered to date 7,718m Number of yachts delivered in 2013 9 Number of yachts in build as of Jan 2014 29 Average overall length of yachts in build 2014 40.4m Source: Annual superyacht report 2014

Asia

The Asian market is showing interesting developments. As an illustration, in 2011, just 3.3% of all yachts delivered worldwide were for Asian owners, but just one year later this amount increased to 11.4% (Camper & Nicholsons report page 14).

China’s challenges and opportunities

As world leader in the consumption of luxury goods and with the highest number of billionaires in the world after the United States (CNN, 2014), the superyacht industry has high expectations for China. After all, translating the appreciation of exclusivity and excellence into an appetite for superyachts

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could provide exceptional opportunities for the industry. However, this translation proves fairly complicated for several reasons.

Challenges

! The recent government clampdown on luxury spending to fight corruption has caused China’s wealthy to keep a low profile. Also, a flight of monetary assets to Hong Kong and other places is expected because of China’s ongoing economic credit crunch.

! A new consumption tax for China’s wealthy was announced during the writing of this report. Superyachts and private jet owners are said to be among those affected. Current tax burdens for foreign-built luxury yachts are already 43% of the yacht’s value.

! Cultural blocks to boating will take time to change. A cultural fear of water in combination with a cultural aversion to suntanning (white skin is a status symbol), pose challenges. The latest trend to fight sun tanning is the ‘facekini’, as reported by the Financial Ttimes (2014).

! Chinese have a different concept of yachting lifestyle. They generally use yachts for entertainment purposes rather than family outings. Adapting yachts for the Chinese market is therefore essential. “If you don’t have a karaoke machine or a mahjong table, you won’t sell a boat to the Chinese” (Kavanagh, 2013, p.31).

! Wealthy Chinese often do not see leisure as virtuous and prefer to work instead (Kavanagh, 2013, p.32).

Opportunities

! The Chinese market is still in its infancy in terms of yachting lifestyle and ownership relative to other wealthy nations. Chinese own just 9% of all superyachts. On the supply side yacht sales in China totaled €0.2 billion, of which just €96 million were from superyachts in 2012.” (Kavanagh, 2013, p.30)

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! Feadship was the first European shipbuilder to deliver a fully-modified superyacht to a Chinese owner in 2013, the 45 metre Blue Sky (Feadship, 2014)

! The size of Chinese-built yachts is increasing with expertise and control from Taiwan, Hong Kong, Europe and the US. The 88.8 metre Illusion will be China’s largest yacht to date. By using only top European suppliers such as Rolls-Royce engines, the preconceptions about inferior Chinese quality is combatted (Superyacht News, 2014)

China’s largest superyacht to date, the 88.8 metre Illusion, is set to be delivered in 2015 by Pride Mega Yachts

! China was home to 10,675 ultra high net worth individuals (UHNWIs) in 2013, representing a total wealth of $1,515 billion (-4.1% growth compared to 2012). The average value of Chinese superyachts delivered in 2013 was $9.1 million, according to SuperYacht Times (2014).

Asia China

UHNW population 44.505 10.675 Total wealth (billions) $6.590 $1.515 Total change

compared to 2012 % 5.4% -4.1%

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2.7.6 Conclusions for Netherlands, Germany, Italy, United States and Asia

! Orders for yachts of 100+ metres in length continue to grow globally: from 14 projects in 2013 to 19 in 2014, which is an increase of 36%.

! Feadship will break the 100-metre barrier for the first time in 2014.

! Germany is set to build the longest yachts in the world in 2014: 81 metres on average, followed by the Netherlands with 57 metres on average. ! Italy is set to build the most projects in the world in 2014: 151 yachts. The

average length of the Italian projects is 45m.

! Over the past two years Chinese investors have taken majority and minority shares in shipbuilders San Lorenzo, Ferretti and Sunseeker, indicating their increased ambitions for the industry.

! With most billionaires on earth, 515, the USA remains the dominant target market for the superyacht industry.

! With 30 yachts in build in 2014, the US ranks fourth on the global project list, indicating the country is gaining more control over the industry. ! The delivery of China’s largest yacht to date in 2015, 88.8m Illusion,

indicates the improved production capabilities of Chinese yards.

! Asia’s wealth is predicted to overtake that of the United States by 2024, suggesting that the Asian market for yacht owners may be a key growth market in the coming years. This assumption must be tempered by the fact that there are certain cultural barriers to Asian yacht consumption.

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2.8 Secondary order markets

2.8.1

Turkey

With 51 orders in build as of January 2014, Turkey is considered a serious player in the market. Their 2014 orders are matched by the Netherlands (51) and only surpassed by Italy with 151 orders in build. Also with regard to average length of orders overall, Turkey’s 47.3 metres is only exceeded by Germany (80.6 metres), Oceania (61.3 metres) and France (55.6 metres). Even with the total amount of orders of the before-mentioned countries combined, 31 orders is considerably less than Turkey’s 51. Turkey therefore poses a serious threat to Dutch shipbuilders, particularly because of their price competitiveness.

Interestingly enough, in addition to the supply side, Turkey also had the second highest rate of superyacht ownership in the world in 2012. Of all superyachts delivered that year, 16 were for Turkish owners according to Camper and Nicholsons’ 2013 report. The United States leads with 17 yachts delivered, followed by Russia at 16, level with Turkey. For this reason, the Turkish consumer market provides great opportunities for the Dutch.

Turkey was home to 900 Ultra High Net Worth Individuals in 2013, representing a total wealth of $105 billion (a 10.5% growth compared to 2012), according to Wealth-X and UBS.

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2.8.2

United Kingdom

Two of the largest and most established UK brands, Sunseeker and Princess Yachts play a predominant role in the United Kingdom’s 2014 order book. With 15 yachts in build, the volume is level with deliveries in 2013.

Traditionally, those brands build higher volumes in the 15-25-metre segment. For 30+ metres, the historic market has had the following distribution:

! 235 yachts with a length of 30-40 metres ! 48 yachts with a length of 40-50 metres ! 22 yachts with a length of 50-60 metres ! 7 yachts with a length of 70+ metres

Henk Wiekens, Managing Director of Pendennis, provides a useful overview of the UK market space: “As a whole, the 2012-2013 UK superyacht industry survey showed a rise of nearly four percent in turnover to £460 million. UK companies were extremely successful in the numerous awards allocated throughout the year – 40 metre Princess M Class was a world superyacht award winner in May 2013 and Pendennis won numerous awards for the refit of M/Y A2” (The Superyacht Annual Report, Issue 50, 2014). Also, 7

superyachts were delivered to owners from the United Kingdom in 2012, which represents fourth place on the list of superyacht ownership for the year (Camper and Nicholsons The (Super)Yacht Report 2013, page 12).

The United Kingdom was home to 10,910 Ultra High Net Worth Individuals in 2013, representing a total wealth of $1,375 billion (a 3.8% growth compared to 2012), according to Wealth-X and UBS.

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2.8.3

France

Total yachts delivered to date 121 Total overall length of yachts delivered to date 4,338 Number of yachts delivered in 2013 0 Number of yachts in build as of Jan 2014 3 Average overall length of yachts in build 2014 55.6m Source: Annual superyacht report 2014

Despite its highly respectable image in the luxury industry, the French superyacht industry plays a fairly insignificant role in the international

superyacht scene with zero deliveries in 2013 and three yachts in build as of January 2014. Other than its respectable average length of 55.6 metres for yachts in build in 2014, France has few bragging rights in the industry. Just two French yachts are listed in Boat International’s Top 200 Largest Yachts with the largest being 75 metres in length. Interesting to mention is that the largest luxury firm in the world, Louis Vuitton Moët Hennessy (LVMH),

acquired Royal van Lent in 2008. It remains to be seen what this will bring to the French superyacht industry in the future (LVMH, 2008).

(http://www.lvmh.com/press/383)

France was home to 4,490 Ultra High Net Worth Individuals in 2013, representing a total wealth of $525 billion (a 10.5% growth compared to 2012), according to Wealth-X and UBS.

2.8.4

Oceania (Australia & New Zealand) Aus NZ

Total yachts delivered to date 97 92

Total overall length of yachts delivered to date 3,874m 3,620m Number of yachts delivered in 2013 0 2 Number of yachts in build as of Jan 2014 3 4 Average overall length of yachts in build 2014 80.6m 42m Source: Annual superyacht report 2014

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The islands of Australia and New Zealand have a deep-rooted love for the ocean and boating has traditionally been a popular pastime. However, with less than one hundred superyachts produced in either country, the industry is relatively small on a global scale. In 2014 though, Australia managed to build four yachts with an impressive average length of 81 metres.

The mining boom is winding down at a faster pace than previously expected, which results in Oceania’s economic growth for the near future expected to be flat. However, Australia is home to 29 billionaires and has increasing numbers of Australian high net worth individuals that are able to afford yachts. This provides opportunities for the superyacht industry’s future since the buying potential is palpable (Superyacht News, 2014).

Although New Zealand’s economy is booming, the record-high dollar is

slowing exports and consequently the superyacht sector. With just four yachts in build in 2014, the sector mainly survived the economic downturn with refit work on existing and visiting superyachts. In 2013, 600 yachts visited New Zealand, of which 37 were superyachts. Those yachts can provide from NZ$ 2 million up to NZ$10 million on refits. Overall the outlook is positive: according to McMullen & Wing shipyard, “we’re certainly seeing improvements at the enquiry level” (IBI, Aug Sep, page 14-19).

Australia had 3,405 UHNWIs in 2013, representing a total wealth of $415 billion (a 1.2% growth compared to 2012). New Zealand was home to 510 Ultra High Net Worth Individuals in 2013, representing a total wealth of $65 billion (a 6.6% growth compared to 2012), according to Wealth-X and UBS.

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2.8.5

Rest of the World

Total yachts delivered to date 649 Total overall length of yachts delivered to date 25,504 Number of yachts delivered in 2013 13 Number of yachts in build as of Jan 2014 51 Average overall length of yachts in build 2014 41m Source: Annual superyacht report 2014

What can basically be concluded from the above chart is that a total of 51 yachts of 41 metres in average length are in build at shipyards in markets comprising the rest of the world, including Taiwan, Japan, United Arab Emirates, Denmark.

2.9 Conclusions for Turkey, UK, France, Oceania and Rest of the World ! Turkey had the second highest amount of superyacht owners in the world

in 2013. It also matches the Netherlands’ yachts in-build in 2014: 51 yachts ! Lower costs offer Turkish yards a price advantage over Dutch yards

! The UK has 15 yachts in-build, mostly by Sunseeker and Princess Yachts ! France has just three yachts in-build, yet of significant length: 56 metres ! Home to 29 billionaires, Australia is an interesting opportunity for market

growth. The country is building three projects with an average length of 80 metres

! New Zealand’s record-high dollar is slowing its exports and superyacht market down. It has four yachts in build in 2014.

! 51 yachts are produced in markets other than those analyzed

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3 Global wealth distribution trends

The average value of a superyacht was $26.3 million in 2013 (Superyacht Times, 2014). At that price level, superyacht ownership is a luxury for those at the highest level of the wealth hierarchy. An in-depth analysis of global wealth distribution was conducted to determine which areas contain most collective buying power and therefore provide most potential for growth of the

superyacht industry.

3.1 Ultra High Net Worth Individuals

A term commonly used in wealth reports is Ultra High Net Worth Individuals (UHNWIs). These are individuals with a minimum of $30 million in

accumulated assets. There were nearly 200,000 UHNWIs in the world in 2013 with a total net worth of $28 trillion.

North America contained most wealth per country with aggregated net worth of $9,680 and 70,485 UHNWIs. All continents reported increases of UHNWIs in 2013, except for South America (-4.1%). Europe reported most growth at 10.4%, followed by North America and Asia.

Source: Wealth-X and UBS World Ultra Wealth Report 2013

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3.2 The top 0.01% of wealth

The top 0.01% wealth category is superyacht buyers’ territory. The top 1% category can be divided as follows:

! Top 0.01% defined as the Ultra Rich with wealth of above $100 million

! Top 0.1% defined as the Very Rich with wealth of above $20 million ! Top 1% to 0.1% defined as the Rich with wealth of $4-$20 million

As becomes evident from the graph below, the top 1%-0.1% has remained relatively stable in the last several decades, whereas the top 0.1%-0.01% category of superwealth showed the most growth up until 2012. In fact, those who had $100 million in the mid-1980s owned just over 4% of global wealth. However, their share of wealth nearly tripled by 2012, jumping to

approximately 11%, according to a recent paper by economists Emmanuel Saez and Gabriel Zucman (Credit Suisse, 2013).

Source: Saez and Zucman, 2014

The outlook for the wealthy is positive. According to the Boston Consulting Group, the ultra rich are expected to see their wealth grow by over 9% a year between 2012 and 2017 (CNN, 2014).

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3.3 Billionaires

It seems that the global financial crisis has been beneficial for billionaires. The world had 2,170 billionaires with a total net worth of $6.5 trillion in 2013,

according to Wealth-X and UBS World Ultra Wealth Report 2013. This implies that total net worth has more than doubled since the start of the crisis in 2009 when it was $3.1 trillion. With a majority of superyacht owners coming from newly found wealth, it is interesting to mention that 65% of all billionaires are self-made. The remaining 35% hass inherited or partially inherited wealth.

Interestingly, the report also revealed a quantification of the average spend by billionaires on luxury assets:

! $78 million on real estate for an average of four homes ! $22 million on yachts

! $16 million on private planes ! $14 million on art

There seems to be a direct

correlation between UHNW luxury assets and the distribution of wealth in North America, Europe and Asia. Most luxury assets are located where most wealth is accumulated. With the future growth expectations for Asia, it will be interesting to analyze this distribution in the future.

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3.4 Trillionaires

When focusing on the über wealthy, ‘billionaire’ is currently the superior title for the highest level of wealth. However, if financial forecasters are correct and if the world’s greatest fortunes continue to grow at their current rate, it is expected that one of the world’s super-rich elite could be the first to enter a

new wealth category by 2039: trillionaires (The Telegraph, 2014).

Credit Suisse wrote in its annual Global Wealth Report last year that

according to their best estimate, the world is likely to have eleven trillionaires

within the next 40 years. For illustration purposes, one trillion dollars is $1,000,000,000,000. The most eligible person to become the world’s first trillionaire is almost certainly based in the United States, where wealth accumulation is most acute. The report also states that “if this scenario unfolds, then billionaires will be commonplace,” which would obviously be a favorable outlook for the superyacht industry since wealth accumulation is correlated with yacht consumerism (Credit Suisse, 2013, p. 120).

3.5 The United States: captain of wealth

With a total net worth of $2,064 billion the United States is the wealthiest country in the world. A total of 515 billionaires call the United States home, which is nearly 25% of all billionaires worldwide (CNN, 2014). Americans claim eight positions in the top ten of the 2014 Forbes World Billionaires list (Forbes, 2014). Bill Gates still holds the top spot as wealthiest person on earth with an estimated $84.8 billion in total assets as of 29 August 2014 (Bloomberg, 2014).

Beside billionaires, the United States has over 3,000 households in the $100 million-plus category (Saez, Zucman 2014). On top of that, the country also has the highest concentration of UHNW in the world that accounts for one-third of the world’s global UHNW population and wealth. When looking at the wealth distribution for the North American continent, the United States clearly dominates, holding 93% of the area’s wealth. The United States reported an impressive growth of wealth of nearly 10% in 2013 compared to 2012. As a continent, North American wealth grew by 9%.

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North America United States

UHNW population 70.485 65.505 Total wealth (billions) $9.680 $9.085 Total change

compared to 2012 % 9% 9.7%

Source: Wealth-X and UBS World Ultra Wealth Report 2013

Unrest in Russia

With 108 billionaires in the country and a total net worth of $342 billion, Russian oligarchs and billionaire clients have recently been among the top buyers on the yacht market. But there is a worrying factor, which has become increasingly evident through the annexation of Crimea, the crisis in Ukraine and the alleged downing of commercial airliner MH17. These incidents have severely cooled diplomatic ties between Russia and the rest of the world and its impact on the superyacht industry remains to be seen in the near future. Another trend to watch in light of the recent conflicts is the exacerbated exodus of capital (between $100 bn and $200 bn) and talent from the country with investors moving capital abroad and intellectuals pursuing careers abroad.

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4 Design of the lifestyle strategy

Lifestyle is one of the most widely used concepts in the field of marketing communications. Lifestyle research is therefore conducted on a large scale to try and profile psychographic consumer profiles that indicate where people spend time and what they spend their money on (Ma, 2004). Luxury

marketers design their marketing communications strategy to persuade potential consumers that using their company’s products and becoming ‘part of the brand’ will allow them to experience an exclusive lifestyle.

4.1 Luxury lifestyle brands

One of the masters of a lifestyle luxury brand is Ralph Lauren. The company has effectively managed to create a world of its own and craft a compelling narrative, largely achieved by storytelling. Ralph Lauren’s stores, website, magazine and TV channel are all designed to draw people into the brand’s sculpted universe of style, success and adventure. According to Ralph Lauren, Founder, Chairman and CEO, “Ralph Lauren has always stood for providing quality products, creating worlds and inviting people to take part in our dream” (Ralph Lauren, 2014).

Producer of some of the most desirable timepieces in the industry, Rolex is another company whose legendary status as a watchmaker is largely built on heritage, quality and lifestyle. Sean Connery wearing its Submariner watch as James Bond, as well as strapping a watch to a submarine are all deliberate marketing initiatives that have helped ‘load’ the brand power, resulting in global communities of Rolex aficionados and aspirers. And although competitive watchmakers produce beautiful products as well, very few can deliver a brand experience attained when wearing a Rolex.

4.2 Iconic brand experience

Managing customer experience is of great essence for the superyacht industry. The unique Dutch pedigree has elevated some of the most

respected Dutch shipyards to iconic status. As such, it is essential to realize that the buyer’s interest may not solely be on the delivery of performance, but rather to experience what the brand stands for. This understanding should be

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the foundation for the lifestyle strategy for this segment. “The impressive market power is based on a kind of customer value we don’t think about very often: Icons are valued because, through them, people get to experience powerful myths,” according to Holt (2003).

4.3 Understanding customer experience

Good customer relationships are at the heart of every business’ success. Customer Relationship Management (CRM) is a widely practiced technique specifically developed for companies to gain a better understanding of their customers’ needs, wants and behavior. The idea of CRM is that it helps businesses to gain insight into the behavior of customers. It also helps as a tool to estimate the value of those customers. With these insights companies are able to better serve their customers according to their preferences with the goal of further increasing revenues from that customer. In short, CRM tracks customer actions after their purchase by means of point-of-sales data, market research or the automated tracking of sales.

However, prior to being able to start building a good relationship with clients in the first place, a company’s first concern should be: what is the quality of my customers’ experiences? This is what initiates the entire customer interaction since customer experience encompasses every aspect of a company’s offering – advertising, product packaging, ease of use, and the quality of customer care. When purchasing a yacht, a whole series of experiences occur prior to the actual delivery, which is often three years after the first drawings of the yacht. As such, customer experience is the internal and subjective response customers have to any direct or indirect contact with a company (Meyer and Schwager, 2007).

It is often challenging for companies to understand the significance of Customer Experience Management (CEM) and why it is something they should be concerned about. While few companies made a conscious effort to zero-in on customer experience, many have tried to gather data in order to analyze customer satisfaction. This is a missed opportunity since analyzing

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the puzzle and is a reactive approach to the customers’ experience as opposed to a proactive approach by focusing on the customer experience process.

A customer satisfaction score is interesting for a company or department to have, although it merely indicates that the customer’s expectations have been successfully met by the customer’s experiences. What it doesn’t explain however is what contributed to achieving this score. Customers get exposed to a series of experiences during the purchasing process and each element contributes to the overall satisfaction score. In order to truly understand how satisfaction is achieved, a company will need to deconstruct the customer process into its component experiences. To do this successfully, customers need to be asked about every single one of their consecutive experiences leading up to the eventual purchasing moment, and beyond.

The ultimate way for companies to gain full control over managing their customers’ experiences is by creating a closed-loop process that consists of every function of the entire process, whereby industry individuals are made responsible for their particular functions. This way the customer’s entire experience loop is managed in an optimal fashion and customer satisfaction can be maximized.

4.4 Managing customer experience

Meyer and Schwager (2007) developed a framework consisting of three types of customer monitoring that help create a process for managing customers’ experiences:

! past patterns: captures a recent experience

! present patterns: tracks current relationships and experience issues with an eye toward identifying future opportunities ! potential patterns: targets inquiries to unveil and test future

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Each pattern is designed to gather and analyze data in a specific manner in order to yield different types of insights as described in the below framework by Meyer & Schwager.

Source: Meyer and Schwager, Understanding Customer Experience, HBR, 2007

4.5 The end-to-end customer journey

Although CEM provides interesting insights, a different approach for managing customer experience is considered more suitable for the highly individual and specific superyacht industry: the customer’s end-to-end journey. The reason for this is twofold:

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1) Customer experience management is predominantly measured at points of customer interaction (touch points), whereas adapting a journey-centric approach is more focused on a tailored approach for each situation on its own; and

2) Identifying journeys can help create a competitive differentiator (Duncan et al, 2013).

The goal of this company project is to identify individuals or processes that affect the decision-making process of potential buyers of superyachts. HISWA Holland Yachting Group’s tabloid was produced in order to reach buyers of yachts and to garner their interest in Dutch yachts. By targeting influencers of the decision-making process, the potential buyer can indirectly be reached and influenced.

4.6 Think Yachts, Think Holland

As touched upon in a previous section, the HISWA Holland Yachting Group’s goal is to reach new target markets and increase awareness of the Dutch superyacht industry. A challenge when targeting new markets for a product as specific as superyachts is that the needs and wants of the ‘new’ customer base will be too heterogeneous. This is where the concept of market segmentation comes in. According to Smith (1956), this is the process of dividing the total market into several homogeneous groups with similar product or service interests, and similar needs and desires.

A prerequisite for the success of the campaign is the implementation of two fundamental changes with the goal to differentiate HISWA Holland Yachting Group from competition:

1) An increased focus on lifestyle as opposed to purely on yachting, which is what competitors are predominantly focused on; and

2) A wider focus on the customer experience process leading up to the purchase of a yacht, allowing HISWA to identify the decision-making process and key influencing factors.

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Both the increased focus on lifestyle, as well as the focus on customer experience will hereby be analyzed in detail as to provide recommendations for a successful implementation of the new marketing strategy.

4.7 Influencers of the decision-making process

By means of interviews with leading industry officials, as well as by means of market research, four key-influencers of a superyacht buyer’s decision-making process were identified. In order of importance, these are:

! Superyacht captains, or superyacht charter captains ! Yacht brokers

! Naval architects ! Crew

Identifying individuals that can influence the purchase decision of a

superyacht buyer is vital information for the media strategy. By targeting these individuals as a reader audience for HISWA Holland Yachting Group’s

superyacht tabloid, an indirect or possibly even direct influence can be exercised on potential buyers of superyachts.

4.7.1 The influence of captains

Naturally, no yacht owner is the same and a standardized decision-making process exists. That being said, all interviewees emphasized the importance of captains in the final purchasing decision. After all, captains are the ones who sail the yachts and know every detail about their performance. Captains are also involved with the entire construction process and actually live on-sight during the entire construction period - three years on average for most Dutch shipyards. Because of their experience, their opinion is crucial for owners who are considering buying a new yacht. For individuals that do not own a yacht yet, charter captains are crucial. Most superyacht owners have some experience with chartering yachts during vacations. Once the idea sprouts to shift from chartering to ownership, the greatest point of reference is the potential owner’s charter captains. The owner’s personal experience with a yacht is of great importance as well, naturally.

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4.7.2 Superyacht brokers

Superyacht brokers also play a vital role since they have a great influence in what they recommend their clients to charter. If a broker recommends

chartering a Dutch yacht, the chances of the owner eventually purchasing a Dutch yacht after a positive chartering experience are considerable, as indicated by two representatives of Dutch shipyards. It also became evident through the project research that naval architects can play a crucial role in the process leading up to the commissioning of a superyacht. This is mostly because of their in-depth and qualitative knowledge of yachts.

4.7.3 Naval architects

Because of their ability to, literally, make an owner’s dream come true, architects were mentioned as a source of influence and inspiration for potential owners. Discussing yacht designs with a naval architect can help buyers decide on the type of yacht, design and functionality, as well as the recommended shipbuilder.

4.7.4 Crew

Lastly, crew has a surprisingly powerful influence on potential buyers. A good crew that creates a pleasant ambience on board is a vital element of the passengers’ overall yachting experience, which can influence the purchase decision.

4.8 Luxury lifestyle print publications

In order to provide useful recommendations for a media plan with regard to HISWA Holland Yachting Group’s lifestyle approach for their superyacht tabloid, an understanding of the current high-end luxury lifestyle publications market first needs to be established. The following seven international

publications specifically target the ultra wealthy and provide coverage on art, fashion, exclusive automobiles, private aviation and other luxury accessories.

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Exclusive publications Company Demographic s male/female Average House Hold Income Circulatio n 1/1 page net advertising rate

Robb Report Robb Report 74% / 26% $595.128 105.000 $30.218

Forbes Magazine Forbes 65% / 35% $609.515 900.000 $148.220

Nonstop Magazine Gulfstream 70% / 30%

$250 million

to $10 billion 42.500 $9.550

Elite Traveler

Magazine Elite Traveler 60% / 40% $41 million 101.641 $43.475

Centurion

Magazine American Express 56% / 44% $6.7 million 74.900 $47.900

How To Spend It Financial Times 62% / 38% $2.1 million 412.952 $33.600

WSJ Magazine

Wall Street

Journal 60% / 40% $276.441 1.338.222 $134.840

For their 2014 marketing campaign, HISWA Holland Yachting Group chose two of these publications to advertise their ‘Think Yachts, Think Holland’ ad campaign: Nonstop Magazine and Elite Traveler Magazine. Both magazines have a specific focus on private aviation, which, with prices for private aircraft ranging anywhere from $10 million up to $100+ million, obviously have a close connection to the superyacht industry.

Elite Traveler ‘s readership has a household income (HHI) of $41 million with a circulation of over 100.000 copies and a readership that is predominantly male (60%). Superior aircraft manufacturer Gulfstream Aerospace publishes its bi-annual Nonstop Magazine, which is sent directly to the buyers of its aircraft, including royal families and business tycoons the world over. This translates into a highly affluent readership with a HHI of between $250 million and $10 billion. Circulation is 42,500 copies worldwide.

4.9 Superyacht print publications

Apart from a lifestyle approach, superyachts are the core of HISWA Holland Yachting Group’s business and, as such, superyacht publications are

essential to empower the campaign. The world’s most renowned superyacht publications are limited to the following: Boat International, ShowBoats, Superyachts and Invictus. HISWA Holland Yachting Group chose Boat