I n 1972, the Mardi Gras , an old transatlantic cruise ship, went on its maiden

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In 1972, the Mardi Gras, an old transatlantic cruise ship, went on its maiden voyage for Carnival Cruise Lines. Carnival was hosting 300 travel agents on the Mardi Gras, hoping to set up a distribution network that would fill up its cruises in the coming years. The Mardi Gras ran aground, sinking the hopes of its owners. It was not until 1975 that the ship sailed again. Ted Arson, a founder of Norwegian Cruise Lines, purchased Carnival for $1, assumed the company's debt, and quickly turned it into a. profitable venture.

The tired Mardi Gras could not compete directly with the luxury cruise liners of Royal Viking, Holland America, Princess, Sitmar, Royal Caribbean, and Norwegian Caribbean Lines. The Mardi Gras was older and less efficient than its competition. To reduce fuel consumption, the ship had to operate at slower speeds, making fewer port calls than liners owned by competitors. Arison was able to convert this obstacle into a new approach for marketing cruises. Instead of promoting exotic ports of call, his company created the idea of the "fun ship" and promoted it. The fun ship had nightclubs, a casino, shows, twenty-four-hour room service and enough activities to keep passengers busy. The ship itself became the destination. Carnival also went after less sophisticated first-time cruise passengers, forging a new market segment that included families with household incomes of $25,000 to $35,000. While other cruise lines competed for the older, more sophisticated market, with incomes of $50,000 plus, Carnival brought cruising to the blue-collar market. Its three- and four-day cruises allowed the first-time passenger to try cruising without spending a great deal of time or money.

Carnival had identified a new market for cruises. Recognizing that only 5 percent of the population had at that time taken a cruise, Carnival went after the segment that the other cruise lines were ignoring

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