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Project On

Customer Loyalty Through Experiential Marketing

Submitted to:

Shanto Banik

Assistant Professor

Department of Marketing,

University of Chittagong.

Submitted By:

Mohammad Ariful Islam

4th Year B.B.A

ID NO: 11304042

Session: 2010-11

Department of Marketing,

University of Chittagong.

Submission Date: july 30, 2016

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Table of contents:

Serial

no.

Subject Page

No

01. Abstract 04

02. Introduction 05

03. Conceptual Background 06-23

3.1 Definition of Experiential Marketing 06

3.2 Experience Marketing 11

3.3 The difference between experience and experiential marketing 14

3.4 Conceptual model of experience marketing 15

3.5 Definition of Customer Satisfaction 16

3.6 Definition of Customer Loyalty 18

3.7 Definition of Brand Image 21

3.8 The Relationship Among Experiential Marketing, Satisfaction

and Loyalty

22

3.9 The Relationship Among Experiential Marketing, Brand Image,

and Loyalty

23

04. Literature review 24-31

05. Customer experience antecedents and consequences 31- 38

5.1 Pre experience 31

5.2 Antecedents of customer experience 31

5.2.1 Brand Performance 32

5.2.2 Multichannel Interaction 33

5.2.3 Service Interface 34

5.2.4 Physical Environment 35

5.2.5 Social Environment 35

5.2.6 Price and Promotions 36

5.3 Customer Experience 36

5.4 Post Experience 37

5.5 The CEM Consequences: 37

5.5.1 Customer Satisfaction: The Immediate Result 37

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5.5.2 Customer Loyalty: The Important Upshot 38

5.5.3 Customer Equity 38

06. Role of Experiential Marketing in Competitive Marketing

Strategy

39

07. Events and Activities Promoting Experiential Marketing 39

08. Benefits of Experiential Marketing 41

09. Strategic and Organizational Issues: Experiential Marketing 42

10. Suggestions for Creating a Winning Experiential Marketing

Strategy in today's World

43

11. Deploying a Successful Experiential Marketing Campaign 44

12. Conclusion 46

13. Observations & Recommendations 46

14. References 48

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Topic: Customer Loyalty through Experiential Marketing

1. Abstract:

Consumers are constantly inundated with repetitive traditional advertising messages,

bombarding their lives, interrupting their TV shows and generally getting in the way. It is

true that if you see an ad enough times, it is likely that at some point when you are ready to

purchase, it will come to mind. That is not to say that consumers are buying because they

have a real emotional connection with the brand; usually it is simply because the brand that

shouted the loudest got their attention. This outdated approach to marketing communications

is dying, and fast.

Brands are realizing that to secure the lifetime value of their customers by gaining true

customer loyalty, they must give back. The relationships between brands and their target

audiences are being revolutionized. The new marketing era, the experiential marketing era,

focuses on giving target audiences a fabulous brand-relevant customer experience that adds

value to their lives, and ultimately makes the consumer remember the brand’s marketing –

not because it shouted the loudest, but because it gave them an unforgettable experience. [1]

Due to the rising of personal incomes and living standards, consumers are more focused on

their personal style and taste. Consumption patterns are also changed from the past

“agricultural economy” to ”industrial economy,” then to “ service economy,” and now to

“experiential economy.” Therefore, the concept of experiential marketing is getting more

important. In an uncertain economic climate, budget conscious marketers may be tempted to

neglect the long-term health of their brand. As a consequence, only the most robust and

resilient brands will survive. Key to their success will be willingness to embrace the

reciprocal nature of the relationships they build and develop with consumers. These are the

brands with the confidence to establish a conversation. They focus on shared interests to

build an empathetic understanding, and they appreciate the importance of a genuine two-way

dialogue. Most importantly, these brands see the value of experiential activities as the means

to connect with audiences in a more direct and empowering way. [2]

The sustainability of a company depends on loyalty of its customer. The customer satisfaction

and creating great experiential value for them is the company`s goal to create customer

loyalty. Consumers are not just willing to buy products, but are ready to experience them and

some will go so far that they will help companies build them. Therefore, experience is a

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central element of the life of today’s consumer (Schmitt, 2003). Positive experiences need to

become institutionalized within the system so that all touch points deliver the brand essence

(Shaw and Ivens, 2005). This ensures that there is no gap between the brand promise and the

brand delivery and attempts to connect consumers with brands in personally relevant and

memorable ways and also gives customers an opportunity to engage and interact with brands,

products, and services in sensory ways (Ponsonby-Mccabe and Boyle, 2006) [3].

2. Introduction:

There is a crest of revolution taking place in marketing. Each interaction is being asserted to

be more meaningful, personal and engaging. This movement, known as “experiential

marketing,” is being adopted everywhere. Most of the companies shifted from traditional

marketing and started creating experiences for their customers. Contrary to traditional

marketers, experiential marketers think their customers are not only rational but also

emotional human beings [4]. And according to one survey most of the respondents consider

the experiential marketing is the main subject of organizations [5]. Experiential marketing

examinations had an approximately ten years history but it is growing and developing rapidly

[5]. Schmitt is regarded the first person who stated the concept of experiential marketing.

Besides him, Pine and Gilmore stated experiences are the next step as developing of

economic value. [6] - [7]

Experiential marketing, sometimes called "engagement marketing," "event marketing",

"participation marketing," or "live marketing" is a marketing strategy that engages consumers

directly and invites and encourages them to participate in the development of a brand. Instead

of looking at customers as inactive message receivers, experiential marketers believe that

customers should be actively engaged in the production and co-formulation of marketing

plans and cultivating a relation with the brand. To empower this marketing revolution, there

is a revived focus on technologies and events that help in delivering brand experiences which

are highly interactive. [2]

One of main point in experiential marketing is using face-to-face communication method to

raise customers’ physical and emotional feelings. What does this feelings brings that

customers will expect to be relevant and interactive to some brands. By then they will

experience it enthusiastically and completely. [7]

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When consumers make a purchase of a product or service and turn out products or services

match or even surpass what he expects there will be a repeat purchase will establish the

existence of a loyalty to the product. So Before the formation of customer loyalty, there must

be the satisfaction of consumers because of the satisfaction that would later be assumed to be

an effect on customer loyalty.

According to Hasan (2008:83) customer loyalty is defined as a person who buys, especially

Those that buy regularly and repeatedly. Customer is a person who continuously and

repeatedly came to a similar place to satisfy his desire to have a product or obtain a service,

And pay for products or services. [8]

3.Conceptual Background:

3.1 Definition of Experiential Marketing:

Experience has been cited as important in marketing for a long time. Abbott (1955), cited in

Holbrook (2006, p. 40) said that: “What people really desire are not products, but satisfying

experiences”. Experiences were gained through activities that required physical objects for

the services. People wanted products because they wanted the experience which they hoped

the products would render. Dewey (1963) added the dimension of uniqueness and noted that

experiences involved a progression over time and the involvement and uniqueness made the

activity stand out from the ordinary.

A diversity of dictionary definitions of experience gave rise to some confusion. Collins

English Dictionary described experience as “The accumulation of knowledge or skill that

results from direct participation in events or activities” and “. . . the content of direct

observation or participation in an event” (Collins, 2007). The Oxford English Dictionary

stated that “Active participation in events or activities, leading to the accumulation of

knowledge or skill” (OUP, 2006). A more affective and process based definitions was

provided by the American Heritage Dictionary of the English Language (2006), which

defined experience as “The feeling of emotions and sensations as opposed to thinking” and “

involvement in what is happening rather than abstract reflection on an event”. [9]

The brand marketing guru, Professor Bernd Schmitt, was the first to introduce the concept of

experiential marketing. Viewing experiential marketing as an extension of traditional

marketing, he integrated various methods, concepts, and media used in products and

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marketing campaigns that involve or appeal to consumer experiences to propose the concept

of experiential marketing. He stressed that the ultimate goal of experiential marketing is to

create holistic experiences for customers and defined experiential marketing as a process or

technique of promoting a product and increasing its value by offering customers an

opportunity to observe or participate in events or activities where they may be motivated to

buy or agree with the concept behind the product. Experiential marketing is to create an

unique experience for customers and induce their purchase Intentions by getting them to

sense, feel, think, act, and relate. The focus of experiential Marketing is on customers. [10]

Experiences were private intangible events that occurred in response to some stimulation (e.g.

as provided by marketing efforts before and after purchase). They often resulted from direct

observation and/or participation in events. Schmitt provided a brief description of the five

types of customer experiences that form the basis of the Experiential Marketing Framework

(Schmitt, 1999). “Customer experience” indicates the value of something that impresses and

appeals, involving the senses and impressions of the user such as those the customer actually

feels directly and is impressed with when coming into contact with a company and a brand.

“Customer experience” was not an incidental value but an essential and intrinsic value where

the products and services were understood from the customer’s point-of-view as those

provided by the company and the brand. The objective of marketing, which created

„Customer experience‟ („Experiential marketing‟), was not to provide products and services

as tangible objects to customers, but to take the aspect of consuming in the context of the

customers‟ lifestyles and to interpret their consumption by appealing to their senses and

feelings in the process.

Schmitt (1999) further defined experiential marketing from the customers‟ perspective as

customers developing recognition and purchasing goods or services of a company or a brand

after they get experiences from attending activities and perceiving stimulations. Experiential

marketing, an emerging form of marketing, focuses not only on a product or a service but

also on an entire experience that a company creates for its customers. Compared with

traditional marketing, experiential marketing is focused more on the customers‟ experience

creation processes, including pre-purchase, moment-of-truth, and post-purchase (Schmitt,

1999). Experience is the main component of experiential marketing. Businesses usually

create special stages for customers to experience through different stimulations. As a result of

experiencing, customers have different perceptions and react to these stimulations. When

they walk into these stores, or even close to them, they develop varied perceptions about

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them. Customers‟ perceptions may be the outcome of marketing efforts that organizations

have made. . [9]

In Experiential Marketing, Schmitt (1999) integrated the concept of traditional marketing into

his view of experiential marketing and proposed a framework of experiential marketing that

can be used for customer experience management based on theories about individual

consumer psychology and social behavior. The conceptual framework of experiential

marketing consists of two elements:

1) Strategic Experiential Modules (SEMs)

2) Experience Providers (ExPros).

1) Strategic Experiential Modules (SEMs):

Schmitt (1999) classified experience values into five modules as a strategic basis of

marketing activities.

(a) Sense marketing: Sense marketing is a way to touch the consumers emotions through

consumers experience that can be gained through the senses that they have product or service.

(b) Feel marketing: Feel marketing appealed to customers‟ inner feelings and emotions,

with the objective of creating affective experiences that ranged from mildly positive moods to

strong emotions of joy and pride. Most affection occurred during consumption. Therefore,

standard emotional advertising was often inappropriate because it did not target feelings

during consumption.

(c) Think marketing: Think marketing appealed to the intellect with the objective of

creating cognitive, problem-solving experiences that engaged customers‟ creativity. Think

appealed to engage customers‟ convergent and divergent thinking through surprise, intrigue,

and provocation.

(d) Act marketing: Act marketing aimed to affect bodily experiences, lifestyles, and

interactions. Act marketing enriched customers‟ lives by enhancing their physical

experiences.

(e) Relate marketing: Relate marketing related to one’s culture and the reference group that

can create a social identity. Relate marketing is about relative experience values that appealed

to individual self-realization.

The purpose of SEMs is to create effective forms of experiences for customers, allowing

them to have a unique encounter with the product, facility or service that is being promoted.

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SEMs refers to five forms of experiences, including sense, feel, think, act, and relate. ExPros

are strategic tools of marketing. They include communications, product presence, co-

branding, spatial environments, websites, and people. These strategic tools are helpful for

businesses to create a pleasant experience for customers, increase product values, and

enhance customer satisfaction and loyalty. According to Schmitt (1999), we define

experiential marketing as “a process of creating an experiential context where consumers are

allowed to sense, feel, think, act, and relate to the product promoted and have a pleasant

memory about this experience, resulting in increased product awareness and product value”.

[10]

According to Silverman (2004), there are 10 manifesto experiential marketing has which are:

experiential marketing should be able to predict one-on-one personal interactions between

consumers and marketers, to be in touch when the consumer has chosen a product, to clearly

ship benefits meaning for the consumer, based on individual experiences to achieve

innovative approaches and tactics to reach consumers and compelling ways, to implements

idealism that can increase individual customer and street-safety sufficient to release the

"grassroots activation". Experiential marketing is associated with authenticity. Experiential

marketing assumes that the world is all that concerns on the media and the universe is based

on the consumer base. Experiential marketers are demonstrated curiosity about strange things

of the world, others and the curiosity of all things. But keep in mind by marketers is that

experience cannot always be perceived by consumers if it is already often perceived.

According to Hamzah (2007), the positive influence between experiential marketing and

brand loyalty is through experiential marketing aspects such sense, feel, think, act and relate.

Fransisca (2007) says that experiential marketing is very effective for marketers to build

brand loyalty. Experiential marketing can have advantages in some situations, including

preventing the decline of brand, to differentiate the products with the products of competitors,

to create the image and the identity of the company, to promote innovation and

experimentation led to the purchase, and the most important thing is loyalty. In some studies

show that sense, feel, think, act and relate an indicator forming experiential marketing, but in

this study, the indicator increased to a variable forming experiential marketing to become

antecedence and consequence experiential marketing .[11]

Smilansky (2009) defines experiential marketing as a “process of identifying and satisfying

customer needs and aspirations profitably, engaging them through two-way communications

that bring brand personalities to life and add value to the tar-get audience”. Experiential

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marketing helps to create experiences and emotions to the customers. International

Experiential Marketing Association (2011) states that experiential marketing “allows

customers to engage and interact with brands, products, and services in sensory ways”.

According to You-Ming (2010), experiential marketing is a “communication method, which

mainly raises customers’ physical and emotional feelings”. Hauser (2007) describes

experiential marketing as a holistic approach to the customer/brand relationship.

Cantone and Risitano (2011) confirm that many firms are adopting CEM strategies, in which

„the role of emotions, feelings, sentiments, passions and experiences” are emphasized in con-

sumer-brand relationships.

According to Yuan and Wu (2008), experiential marketing can be seen as a marketing tactic

designed by a business to stage the entire physical environment and the operation-al

processes for its customers to experience.

We highlight that all these definitions indicate that experiential marketing is mainly related to

emotions, feelings, and senses; and has less to do with cognition and human intentions.

When Schmitt (1999a) explains the idea of Pine and Gilmore’s (1998, 1999) experience

economy he uses the phrase experiential economy. It shows how those terms and words are

used inter-changeably. [12]

Experiential marketing is the process of identifying and satisfying customer needs and

aspirations profitably, engaging them through two-way communications that bring brand

personalities to life and add value to the target audience:

Experiential marketing is an integrated methodology, always engaging target audiences

at their will through brand-relevant communications that add value.

The experiential marketing campaign is built around one big idea that should involve

two-way communication between the brand and the target audience in real time,

therefore featuring a live brand experience at its core.

The other marketing communications channels that are selected and integrated are the

amplification channels, which amplify the impact of the big idea (the live brand

experience)

Experiential marketing is any communication that has an emotional richness, and that allows

for some connection that isn’t there by the mere fact of communicating. Experiential

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marketing involves changing beliefs and behaviors. Unless you engage the communication

with an emotional trigger, it won’t work. It must bring you into the message. [1]

Finally we conclude that experiential marketing is a marketing concept that aims to establish

a loyal customer by touching the emotions of customers by creating positive experience and

give a feeling positive towards their services and products through sources such as the

external network, consumption, & standard set.

3.2 Experience Marketing:

According to Leeflang (2011) one of the specific topics that have not yet received enough

attention is experience marketing.

Experience marketing is generally based on experience economy theory. Pine and Gilmore

(1998) claim experiences to be the fourth economic offering. They explain the progression of

value from commodities to experiences by showing how experiences differ from goods and

ser-vices (Table 2). Pine and Gilmore (1999, p. 12) declare that “while commodities are

fungible, goods tangible, and services intangible, experiences are memorable”

Table: Economic Distinctions

Economic offering Goods Services Experiences

Economy Industrial Service Experience

Nature of offering Tangible Intangible Memorable

Key

attribute

Standardized Customized Personal

Seller Manu-facturer Provider Stager

Buyer User Client Guest

Factors of demand Features Benefits Sensations

Experience economy (Exponomy) is of in-creasing focus. Although the concept was born in

the business field in 1998, it has gone beyond its boundaries to tourism (Leighton 2007),

retailing (Grewal et al. 2009; Verhoef et al. 2009), architecture, sports, branding (Brakus et

al. 2009; Gentile et al. 2007), entertainment and arts (Petkus 2004), urban planning,

hospitality and other fields.

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Experience economy is also considered as a main underpinning for customer experience

management (CEM). According to Schmitt (2003), the term ‘customer experience

management’ represents the “discipline, methodology and/or process” used to

comprehensively manage a customer's cross-channel exposure, interaction and transaction

with a company, product, brand or service. CEM is more like a program (Cantone, Risitano

2011) or schedule, based on five steps. The CEM strategies impel the customer’s

involvement at different levels (Gentile et al. 2007): rational, emotional, sensorial, physical,

and spiritual.

Walls et al. (2011) define ‘consumer experience’ as “multidimensional takeaway impression

or outcome, based on the consumer’s willingness and capacity to be affected and influenced

by physical and/or human interaction dimensions”.

Experience marketing offers engaging, interactive, and entertaining brand experiences.

Brakus et al. (2009) define brand experience as “subjective, internal consumer responses

(sensations, feelings, and cognitions) and behavioral responses evoked by brand-related

stimuli” that are part of a brand’s design and identity, communications, and environments in

which the brand is marketed or sold.

Experience marketing is also related to consumer behavior theory. Consumer behavior as a

field has expanded to three dominant specializations (subfields): consumer information

processing, consumer culture theory, and behavioral decision theory (MacInnis, Folkes

2010). These subfields have all provided consumer insights on experiences. However,

Schmitt (2010) regards that also two other main marketing disciplines (marketing strategy

and marketing models) have also contributed to experience marketing in addition to

consumer behavior.

According to Schmitt (2010) the key concepts of experience marketing are: 1) experiential

value, 2) different types of experiences, 3) the distinction between ordinary and extraordinary

experiences, and 4) experience touch points. Consumer behavior and experience marketing

fields are open to adjoining disciplines, e.g. psychology, economics, communications,

sociology, anthropology, and culture. These fields may be useful to better under-stand

consumer behavior and experience marketing.

To simplify, as the wording suggests, the focus in experience marketing is on experience. The

other important components are the customer and experience co-creation. “Experience

marketing can create emotions by making entertainment for customers, by allowing them to

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escape from the reality, by educating them and giving them aesthetic objects or places to see”

(Pine, Gilmore 1999).

The diverse perspective and translations on experience has made it difficult to understand the

concept and also define experience marketing. There is no consensus today on what the term

‘experience marketing’ refers to, and the context in which it is used. Lee et al. (2010) explain

that experience marketing aims to request marketing staff to emphasize the overall experience

quality for consumers passed by brands, including rational decision-making and sentimental

consumption experience. Baron et al. (2009) define experience marketing as “the creation of

a memorable episode based on a customer´s direct personal participation or observation”. But

at the same time they use exactly the same definition for experiential marketing.

3.3 The difference between experience and experiential marketing:

The formation of experience marketing is a process from a stimulus up to a change in

customer behavior, learning or attitude. Experiences occur in response to some stimulation

(Schmitt 1999a), e.g. marketing mix. The stimulus can be interpersonal (between people) or

intrapersonal (within a person); it can be marketing stimulus (e.g. 4P) or environmental (e.g.

economic, technological, cultural).

For its subjectivity experiences depend on the expectations and values of the customer (Tars-

sanen, Keyline 2007). Experience can involve a perception on which one builds his/her own

state of reality; a reality based on his/her interaction with the environment (Fig. ).

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Fig.1. The difference between experience and experiential marketing (Source: adaption of

Leppiman, Same 2011)

A customer creates meaning to all he/she perceives. Experience represents a meaningful

relationship between a person’s perceptional activity and a life situation, and is of particular

significance to the person (Perttula 2007). When the customer experiences something to be

important, this forms his/her life situations consisting of every-thing he/she is in meaningful

relationship (Leppi-man, Same 2011). Experiences are formed out of these relationships and

life situations. Fortezza and Pencarelli (2011) call it “packaging moments of life”.

Experiences may result in changes in attitude or behavior. Customer attitude consists of three

components:

1) Cognitive (mental images, understanding, interpretations),

2) Affective (feelings, emotions), and

3) Conative (intentions, actions, behavior).

The most common sequence that takes place when an attitude forms is cognitive → affective

→ cognitive.

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(Clow, Baack 2007). This sequence can form a meaningful and relevant experience.

Meaningful experience is composed of feelings, knowledge and beliefs (Leppiman, Same

2011). Thus, meaningful experience is broader than particular, which is mainly related to

emotions and feelings, as seen on Fig. 1. A holistic experiential feeling may lead to changes

in personal opinions and attitudes of a customer. Fig. 1 highlights that the platform of

experience marketing is strategic and larger than experiential marketing.

3.4 Conceptual model of experience marketing:

An experience is important in business and technology because to the mind every economic

offering is experienced (Van Doorn 2006). Experience is broadly speaking an interaction

between a company (brand/product/service) and a customer. Experience is shaped by the

characteristics of the customer and those of the product, company or brand. Desmet and

Hekkert (2007) explain that “all actions and processes that are involved, such as physical

actions and perceptual and cognitive processes (e.g. perceiving, exploring, using,

remembering, comparing, and understanding), will contribute to the experience”.

Consumer behavior is influenced by internal influences, e.g. demographics, personality,

motivation, knowledge, attitudes, beliefs, and feelings. The behavior is also influenced by

external influences, e.g. culture, past experience, lifestyle, marketing mix. Psychological

factors include individual’s motivation, perception, attitude and belief, while personal factors

include income level, personality, age, occupation, lifestyle, etc. In addition, the experience is

always influenced by the context – environment in which the interaction takes place.

The most important parts of the model (Fig. 2) are: 1) offering or stimulus, 2) interaction

between the customer and company, 3) experience and value co-creation, 4) value. We

believe these are the cornerstones of experience marketing.

Hekkert (2006) distinguishes three levels of experience: attribution of meaning (experience of

meaning), emotional response (emotional experience), and aesthetic pleasure (aesthetic

experience). These experiences influence value co-creation, purchase decisions and behavior.

At the level of meaning, cognition comes into play. Desmet and Hekkert (2007) confirm that

contrary to popular belief, “an emotion is the result of a cognitive, though often automatic

and unconscious, process”.

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Fig. 2. Conceptual model of experience marketing

The ultimate outcome for the company is e.g. sales, value added, loyalty, etc. There is also

out-come for the customer and ultimately to society. Tynan and McKechnie (2009) assert that

experience marketing can deliver sensory, emotional, cognitive, behavioral and relational

value to customers, to which social and information based value can be added.

In 2007 the American Marketing Association adopted a new official definition of marketing

(Keefe 2008): “Marketing is the activity, set of institutions, and processes for creating,

communicating, delivering, and exchanging offerings that have value for customers, clients,

partners, and society at large.” This definition also supports the model. [12]

3.5 Definition of Customer Satisfaction :

It is a frequent term used in marketing, it can be measured how the service or product meet

the expectation of customer. There are a number of ways to improve customers satisfaction.

The key is making sure all customers have a pleasant experience. Crating and retaining

satisfied customer is essential for the success of business. Fonvielle (1997) argued that high

customer satisfaction is a competitive advantage for business because it contributes to

repetitive purchasing .Researchers have pointed that the higher customer satisfaction the

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higher will be customer loyalty ,intention of repetitive purchasing ,positive word of mouth

and market share (Fornell1992) [52]

Fornell (1992) stated that customer satisfaction is an accumulated and experience-based

attitude. Customer satisfaction is a feeling that can be directly evaluated. It is the result of

customers’ comparison between the expected and actual performance of a product or service.

Known as the Father of Modern Marketing, Kotler (1996) pointed out that customer

satisfaction is a function of the difference between the perceived performance and

expectation. Therefore, customer satisfaction is the level of delight or disappointment

deriving from the comparison between perceptions of the characteristics or performances of a

product and personal anticipations. Kotler (1999) also suggested that the level pleasure with a

product is a result of comparison between perceived performances and individual

expectations. Pine and Gilmore (1998) mentioned in The Experience Economy that customer

satisfaction is evaluated based on customers’ experience with the product and depends largely

on customer's evaluation of individual experiences with the product relative to expectations

of its quality. Oliver (1999) argued that customer satisfaction is the degree to which

customers’ expectations of a product or service are fulfilled and can reflect the consistency

between the anticipated and actual performances of the product or service. According to

Schmitt (1999), higher customer value leads to higher customer satisfaction. Wei (2002)

provided a simple approach to increasing customer satisfaction. It is to identify the needs of

customers and satisfy them. In other words, it is to understand customers’ expectations of a

company, product or its employees, manage to meet the expectations earlier than competitors,

and improve weaknesses through constant evaluations from customers’ perspective to win

customers’ trust and lifetime loyalty. Assaf et al. (2011) mentioned that understanding how to

satisfy customers is critical to transformation of available information into effective

marketing strategies and future development of the organization. Higher customer

satisfaction can result in a higher organizational revenue. To sum up, despite the variety of

definitions of customer satisfaction, scholars generally agreed that customer satisfaction is

related to the difference between anticipated and actual performances, and customer

satisfaction is crucial to corporate profits. [10]

Customer satisfaction is a gab between expectation before purchasing and realistic experience

after expenditure. This is common to all in marketing literature everything is not finished

after selling process [56]. The overall attitudes of customers is generally influenced by their

satisfaction level.

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According to another definition customer satisfaction is realization degree of expected

product advantages is the key point. And this point shows the degree of stability between

expectation and actual results. [55]

The definition of customer satisfaction varies depending on the perspective of looking at the

customer satisfaction and stands for a state in which the trust of customers toward products or

services is continued as a result of coping with desire and expectation of customers as much

as possible. In other words, customer satisfaction can be defined as a state in which

repurchase of products or services takes place as result by coping with desire and expectation

of customers in addition to the continued trust of customers or a state of satisfying the needs

and expectations of customers. Lee, Seong Su has defined satisfaction as an evaluation after

the purchase of certain service coming after the consumption experience and defined

customer satisfaction as general satisfaction which customers experience in the process of

receiving services from the vendor.

Meanwhile, according to Yi, You Jai, Lee, Cheong Lim, not only customer satisfaction is

the greatest task of businesses today and plays very important role as a customer related

activity, but its importance is getting highlighted as competition is getting intensified. Cho,

Seong Gil, Kim, Hae Ryong, Cho, Chun Bong have stated that satisfied customers generally

repurchase, become regular customers and word of mouth effect by satisfied customers create

new customers. Jeong, Hee Young has also stated that good services for customers can

lead to customer satisfaction, customers get to revisit if satisfied and the customer who

revisit become regular customers so that the sales of company gets increased. [57]

3.6 Definition of Customer Loyalty:

“Loyalty” is an old idea in business and marketing dating back to at least the 1940s. Brown

(1952) was the first scholar who empirically studied loyalty in customer. Focusing more on

customer behavior, Brown (1952) associated customer loyalty with the repeat purchase

behavior of customers. According to Dick and Basu (1994), customer loyalty plays a pivotal

role in creating profits, and it can be viewed as the strength of the relationship between an

individual’s relative attitude and their repeat patronage. Jones and Sasser (1995) identified

two types of customer loyalty: long-term loyalty and short-term loyalty. Long-term loyalty is

true loyalty, with which customers are not easily influenced by external factors to change

their view about a product or service. Short-term loyalty, as literally suggests, may easily

vanish when customers find or are given a better choice. Frederick (1996) argued that

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creating customer value is the fundamental approach to corporate success. This is because

increased customer value leads to higher loyalty, and loyalty in turn can lead to higher

growth, profits, and customer value.

According to Oliver (1997), loyalty is “a deeply held commitment to buy or repatronize a

preferred product or service consistently in the future, despite situational influences and

marketing efforts having the potential to cause switching behavior”. Chen (2008) mentioned

that loyalty exists when customers feel satisfied with a product and have intentions to

repurchase and spread positive word-of-mouth about the product. Lin (2011) viewed

customer loyalty as a commitment to use, repurchase, cross-purchase or recommend products

or services of a particular brand. Based on the above definitions, we define customer loyalty

as the “degree to which consumers feel satisfied with a website, product or service and show

their support for it in attitudinal, behavioral, and the general aspects”.. [10]

A loyal customer is a customer who repurchases from the same service provider whenever

possible, who continues to recommend and who maintains a positive attitude towards the

service provider. Customer remains to be loyal to the service or product as far as he is getting

good service from them. According to Butcher et al., (2001) excluding repeat purchase, four

dimensions of loyalty can be distinguished in the service literature:

1 - positive word-of-mouth,

2 - resistance to switch,

3 - identifying with the service and

4 - preference for a particular service provider.

We can build customer loyalty by treating people how they want to be treated. Customer

loyalty is both an attitudinal and behavioral tendency to favor one brand over all others,

weather due to satisfaction with product or service, its convenience or performance or simply

familiarity and comfort with the brand. Customer loyalty encourages consumers to shop of

wallet, and feel positive about a shopping experience, helping attract consumer to familiar

brands in the face of a competitive environment.

The term customer loyalty is used to describe the behavior of repeat customers, as well as

those that offer good ratings, reviews, or testimonials. Some customers do a particular

company a great service by offering favorable word of mouth publicity regarding a product,

telling friends and family, thus adding them to the number of loyal customers. However,

20

customer loyalty includes much more. It is a process, a program, or a group of programs

geared toward keeping a client happy so he or she will provide more business. [52]

Oliver [58] defines loyalty as a deeply held commitment to rebuy or repatronize a preferred

product/service consistently in the future, thereby causing repetitive same-brand or same-

brand set purchasing, despite situational influences and marketing efforts having the potential

to cause switching behaviors. Although frequent usage and satisfaction with a product or

service are frequently associated with loyalty, they by themselves insufficiently serve as the

precursors to loyalty. The customer’s attitude toward a service or product (brand) including

attitudinal preference and commitment has a greater impact on forming loyalty [59].

Day [60] suggests that two dimensions comprise loyalty: behavior and attitude. The

behavioral dimension is characterized by consequential actions (i.e., as a result of loyalty),

such as repeat purchases, share of wallet (i.e., value a customer places on a brand) and word

of mouth.In contrast, the attitudinal dimension includes formative behaviors as commitment,

a desire to maintain a valued relationship trust, a willingness to rely on an exchange partner

in whom one has confidence and embodies integrity and reliability in the relationship and a

strong emotional attachment that reflects a customer’s bond with a brand. Customer loyal

results from the development of attitude and leads to positive behaviors.

The significance of customer loyalty lies in the competitive advantages a business gains.

Most notably, loyal customers tend not to consider alternatives or shop for lower prices.

When tied to loyalty programs, customer loyalty can increase business revenue and total

customer market share. For example, Reichheld and Sasser said that a 5 percent increase in

customer retention may result in a 25 to 95 percent net present value increase in profits as

observed over 14 industries. Moreover, the retention costs have been reported at five times

less than acquisition costs of new customers [61]

Customer loyalty is all about attracting the right customer, getting them to buy, buy often,

buy in higher quantities and bring you even more customers. It is indispensable variable in

business success.The general characteristics of loyal customers are as below:

(1) expanding more money in buying goods or service of a company.

(2) stimuleting others to buy goods or service of a company.

(3) trusting that it is valuable to buy goods or service of a company.

21

Customer loyalty is defined by many conceptions in the field of marketing science.

According to one, loyal customers are not required to be satisfied but satisfied customers are

liable to loyal customers. On the other edge we know customer satisfaction is a primary

subject to raise customer loyalty an both for enhancing business effectiveness.

Companies try to build loyalty by…

• keeping touch with customers using email marketing, thank you

cards and more.

• treating your team well so they treat your customers well.

• showing that you care and remembering what they like and don’t

like.

• rewarding them for choosing you over your competitors.

• truly giving a damn about them and figuring out how to make them more success, happy

and joyful. In short, we can build customer loyalty by treating people how they want to be

treated. [7]

3.7 Definition of Brand Image

Brand image is becoming the dominant thing in the current era of globalization. Brand image

to be one important factor in the competition and is a valuable corporate asset. According to

the American Marketing Associations (AMA), (2014) brand is a name, term, sign, symbol; or

design or guide of things - it is intended to provide the identity of the goods or services made

or provided a seller or group of sellers and to differentiate them from the goods or services

supplied competitors.

Brand image is part of the consideration set which affect customer preferences in selecting

the brand and making purchasing decisions. Brand image is also very influential in creating a

competitive advantage through the minds of consumer’s capabilities. Brand image used to

provide product differentiation from competitors. This is the symbol of the brand created or

attribute that is the identity of the brand itself and for its customers. According to Peter and

Olson (1996) the brand is something that is formed in the mind of the customer and has the

power to form the trust of customers.

Aaker (1991) says that a brand is a distinguishing name and/or symbol (such as a logo, trade-

mark, or package design) intended to identify the goods or services of either one seller or a

group of sellers, and to differentiate reviews those goods or services from reviews those

competitors. Therefore, the brand function is to help consumers in early recognition of the

22

origin of the products and protect the producers and consumers of the competitors who are

trying to provide similar products. Kotler (2003) mentioned that the function of brand is to

identify the goods or services of persons or groups of presenters and differentiate with similar

products from other renderers.

Kertajaya (2004) and Douglas (2006) expressed the opinion that the level of customer loyalty

is a process that has been constantly evolving since 1970. Loyalty became a destination for

strategic market planning in the long term and are also used as the basis for developing a

sustainable competitive advantage that can be realized through marketing efforts. Kotler

(2014) defines brand loyalty as a deep commitment to buy back or re-subscribe to a product

or service selected for the future, a way to buy the same brand again and again or buy a bunch

of the same brand over and over again despite situational influences and business ventures

marketing potentially because switching behavior.

Douglas (2006) says that brand loyalty is a fundamental concept in strategic marketing;

customer's brand loyalty can create an advantage in marketing with word of mouth referrals

and resistance in the greater competition. Yoo et al (2000) and Arjun & Morris (2001)

defined brand loyalty within the meaning of the conditions in which consumers have a

positive attitude toward a brand, commitment to the brand, and intend keeping future

purchases. The occurrence of brand loyalty in customer caused by the influence of

satisfaction or dissatisfaction with the brand accumulated continuously in addition to the

perception of the quality of the product. [11]

3.8 The Relationship Among Experiential Marketing, Satisfaction and Loyalty:

The concept of experimental marketing was first proposed by Schmitt in 1999. He believed

that after making some observations or participating in certain events, consumers receive

certain stimulations that trigger their motivations to recognize or perform the act of

purchasing. Schmitt (1999) proposed the concept of strategic experiential modules as the

basic strategies for marketing. The objective is to create various experimental marketing for

consumers, including five experimental factors on how they sense, feel, think, act, and relate.

He especially pointed out that companies are no longer simply offering products or services;

they also need to create a consumer experience with the ultimate goal of creating an overall

experience for consumers. Enhancing the experience during the purchasing process can help

to maintain custom loyalty. Many studies in the past also confirmed that experimental

marketing can promote the improvement in customer satisfaction (Tsaur, 2007; Lee, Hsiao

23

and Yang, 2011; Alkilani, Ling and Abzakh, 2013), which subsequently affects customer

loyalty (Lee and Chang, 2012). In other words, customer satisfaction plays the role of the

mediating variable during the process where experimental marketing promotes the increase in

customer loyalty.

3.9 The Relationship Among Experiential Marketing, Brand Image, and Loyalty:

Brand image refers to the awareness of consumer products, thoughts, feelings, and

evaluations (Friedmann and Lessig, 1987; Kotler and Pfoertsch, 2006; Roy and Banerjee,

2007). When consumers are buying a product, they can directly reflect all the associated

information about the brand, as well as the recognition of the brand, in order to derive the

quality of the product, and then stimulate their purchasing behavior (Sierra, Heiser and

Williams, 2010). For companies, brand image can be used to distinguish various products and

services offered by each company (Smith and Wheler, 2005; Subramaniam, Al Mamun,

Permarupan, and Zainol, 2014). The key for brand studies is to find or develop a powerful

image, and then use the subsequent brand propagation to enhance it (Ulusua, 2011). As a

result, brand image is a key factor for establishing the relationship between the company and

its consumers. In terms of the composition of the brand image, from the perspective of

consumer interests, Park, Jaworski and Macinnis (1986) proposed three factors: the

functional factor, symbolic factor, and experimental factor.

24

4. Literature review:

Life interaction between the companies and customers can lead to emotional attachment,

where the ability to solve problems in a problem-solving marketing creates brands and

promotes results for the business. This requires more than just an attempt to be able to create

the right experience for a brand. The concept of experiential marketing is a concept that is

acceptable at all levels to create perfection and benefits towards the experiences, (Gilmore,

2003; Petkus, 2004; Hannam, 2004; Steenhouse, 2003)

Pine and Gilmore (2005) stated that a paradigm shift changing the economics of the service

due to experience on the modern economy has evolved from a commodity to a goods

delivery. Goods in services in the process has evolved in an experience; Service is becoming

more increases with necessity of consumer perception on the lack of competitive advantage,

together with satisfaction; Transferring experiential markets that offer close engagement with

consumers in a memorable thing; All the action of an organization that contributes all the

actions of the organizations that can contribute to experience on what is offered in

experiential marketing.

Experiential marketing is an approach in marketing that have actually done since the times

first until now by the marketers. Schmitt (2000) and Palupi (2001) says the essence of

shifting the traditional marketing approach to experiential marketing approach due to the

development of three factors in the business world where information technology exists, the

sophistication of the technology revolution can create an experience in a person and share

them with others anywhere for example share them with media computers, cell phones, etc.

The second factor is the hallmarks of the brand through sophistication of information

technologies about the brand which can be widely spread through various media globally.

When there is control on a product or service from different characters which are no longer

functional but meaningful as a creator of experience for consumers. As for the last factor

which causes the shift is the large number of communications and entertainment everywhere,

it results in all current products and services to be branded to large number of people. It can

equally be used for marketing form of communication and entertainment devices while will

create experience for consumers (Schmitt, 2000).

According to Schmitt (2000) and Li (2008), wherever is experiential marketing developed by

5 and 5 subjects included in the Strategic Experiences Modules namely: sense of feel, think,

act and relate. Sense influences by sight, sound, taste and smell; feel influenced by emotion

25

and feeling; think influenced by convergent, divergent, surprise, intrigue and, provocation;

act is influenced by the interaction, action and lifestyle, relate is affected by idealizing self,

others and the culture. Meanwhile, Widdis (2001) says that consumers now have a direction

on features and its benefits, product quality and brand image positive. It communicates reality

as possible, marketing campaign can bring a brand to life by communicating a sense of

consumers, touched his heart and stimulating their minds.

Kotler & Keller (2014), Schmitt (2000) explained that the customer experience can be done

through experience providers (facilities / tools that provide / supply the experience for the

customer) the following: Communications: advertising, public relations, annual reports,

brochures, newsletters and analogs. 2. Visual-verbal identity: brand name, logo, signage,

vehicle as transportation. 3. Product presence: product design, packaging, point-of-sale

displays. 4. Co-branding: event marketing, Sponsorships, alliances and partnership

(partnership), Licensing (patent), advertising on TV or cinema. 5. Environments: retail and

public spaces, trade booths, corporate buildings, interior offices and factories. 6. Web sites

and electronic media: the company website, the site of products and services, CD-ROMs,

automated emails, online advertising, intranets. 7. People: sale people, representative’s

customer service, technical support, Repair providers (repair service), company

spokespersons, CEOs and executives involved.

Experiential marketing can have advantages in some situations, including preventing the

decline of brand, to differentiate the products with the products of competitors, to create the

image and the identity of the company, to promote innovation and lead trial, purchase, and

the most important thing is loyalty, (Schmitt, 2000).

According to Mc. Farlane (2008), Managing Director of Ogilvy Action Analyst stated that

experiential marketing brings emotions consumers can create consumer purchasing decisions.

According Yue.et.al., (2007), the existence of positive influence between experiential

marketing and brand loyalty through experiential marketing aspects such as sense, feel, think,

act and relate. Schmitt (1999), Fransisca (2007), Hamzah (2007), Munson (2001), Pullen

(2001), Palupi (2001) Petkus(2004), Hannam (2004) and Stenhouse (2003), said that the

experiential marketing is very effective for marketers to build brand loyalty through sense

feel, think, act and relate. Brands have to draw on all the factors that can increase your brand

image and brand awareness, keeping the memorable experiences that affect the spirit of the

word of mouth and loyalty. This experience created bigotry in the minds of consumers (Wolf,

1999). Customer perceived experience is unique and gives a different impact in the marketing

26

process. With the rise of the modern retail market in Indonesia, followed by rapid growth and

competition between large companies such as Alfa, macro, Carrefour, Giant, Hypermarket,

Lotte, Seven Eleven and others, gave rise to a high competition to gain customer loyalty. On

the other hand, the existence of a wide variety of modern shops in this form, resulting in

diverse customer expectations toward the services and facilities provided these stores. Not all

products capable of providing experiential marketing, because only product/service

categories established premium have differentiation to the upscale segment of the customer.

(Rhenald Kasali, 2001 into Palupi, 2001), but it was rejected by Goni (2001) into Palupi

(2001) said that all of product/service enable to giving experiential marketing. [11]

In recent years, there has been increased interest in building and enhancing customer

experience among researchers and practitioners. Companies are shifting their attention and

efforts from premium prices or superior quality to memorable experiences. Also, the value

created by memorable or unique customer experiences and emotions exert significant impact

on organizational performance in terms of customer satisfaction, retention and loyalty.

Experiential marketing is the new approach which views marketing as an experience and

treats consumption like a total experiment, by taking cognizance of the rational and emotional

aspects of consumption using eclectic methods.

We are in the era of ‘experience economy’ and the main concern and preoccupation of

proactive organization is how to create total experience and unique value system for

customers, which necessitate the need to understand the life of customer from perspective of

their shopping experience. Experiences is inherent in the mind of everyone, and may result

into physical, emotional, and cognitive activities which invariably may generate strong

feelings that the customer might take away. Experience tends to come from the interaction of

personal minds and events, and thus no two experiences may be the same in any occasion

(Schmitt, 1999).

Schmitt (2003) distinguishes between five types of experience that marketers can create for

customers to include; sensory experience (sense), affective experience (feel), creative

cognitive experience (think), physical experience, behaviors and lifestyles (act), and social-

identity experience, all relating to a reference group or culture (relate). The author posits that

the ultimate goal of experiential marketing is to create holistic experience that seek to

integrate all these individual types of experiences into total customer experience.

According to Pine and Gilmore (1999), economic development is generating a new and

dynamic era of experiences, which challenge the traditional sales approach focusing on

27

product sales and service offering. And in order to enhance consumers' emotional

connections to the brand and provide a point of differentiation in a competitive oligopoly,

retailers have turned their attention to creating memorable retail experiences, which try to

appeal to consumers at both physical as well as psychological levels.

The emergence and spread of shopping malls, supermarkets and hypermarkets in both

developed and developing countries, heightened competition for consumers’ spendable or

discretionary incomes. There are therefore more choices available for consumers than ever

before. In such a situation retailers seeks to develop business strategies that focus on creating

and maintaining customers, by offering customers a differentiated shopping experience.

The term "Experiential Marketing" refers to actual customer experience with the

product/service that drive sales and increase brand image and awareness. When done right,

it's the most powerful technique to win brand loyalty. Olorunniwo et al., (2006) concluded

that customer experience is related to behavioral intentions and connecting the audience with

the authentic nature of the brand is one of the prime goal of experiential marketing. This is

achieved through participation in personally relevant, credible and memorable encounters.

Shopping has been considered a search process where shoppers would like to ensure that they

make the right decisions. In addition, they also intend to derive emotional satisfaction

(Tauber, 1972). It has been found that a high level of brand awareness may not translate into

sales. Proactive organization should consider every visit of the shopper as a distinct encounter

and a moment of truth. Unless the interaction is satisfactory, the next visit may not

guaranteed. Therefore, if the store does not provide a compelling reason for a repeat

patronage, the amount of purchase per visit may likely decline (Zeithaml, 1998).

The concept of experiential marketing appears to have resonated with practitioners and

academicians alike. However, research work on customer experience appears to be in its

infancy, compared to other service related topics such as service quality and loyalty.

Furthermore, customer experience as a concept is considered by some practitioners as

applicable and relevant to entertainment industry (Zomerdijk and Voss, 2010). However, in

view of the dynamic nature of consumer behavior, whatever the service (or product) a

customer is buying or receiving, the customer will have an experience; good, bad or

indifferent. In other word, exchange of goods or services always comes with an experience

(Carbone and Haecke, 1994) whilst shopping encounters for instance, even for a mundane

product or service provide an opportunity for emotional engagement (Berry and Carbone,

2007)

28

The growing significance of experiential marketing has resulted into diverse and fascinating

study on the concept (e.g. Csikzentmihalyi, 1997; Schmitt 1999; Pine and Gilmore 1999;

Holbrook, 2000; Arnould et al., 2002; Caru and Cova, 2003 to mention a few). However, the

dynamics of consumer behavior have necessitated the need for more papers. With few

exceptions, the existing experiential retail literature has focused mainly on the isolated testing

of static design elements (i.e. atmospherics, ambient conditions, and services cape

architecture) of retail stores (Turley and Milliman, 2000). McCole (2004) in particular

recognizes this dearth of academic research in the areas of experiential and event marketing

as an indication of the division between academia and business and calls for marketing theory

in these areas to be more closely aligned with practice.

Similarly, Gupta, (2003) identified a lack of systemic body of knowledge and conceptual

framework on which to base scientific inquiry as a key tenet of experiential marketing. The

current study seeks to address some of these gaps in the literature.

Experience as defined within the realm of management is a personal occurrence with

emotional significance created by an interaction with product or brand related stimuli

(Holbrook and Hirschman, 1982). For this to become experiential marketing the result must

be “something extremely significant and unforgettable for the consumer immersed in the

experience” (Caru and Cova, 2003, p. 273).

According to Schmitt (1999) experiential marketing is how to get customers to sense, feel,

think, act, and relate with the company and brands. Customer satisfaction is a key outcome of

experiential marketing and is defined as the “customer fulfillment response” which is an

evaluation as well as an emotion-based response to a service. It is an indication of the

customer’s belief on the probability or possibility of a service leading to a positive feeling.

And positive affect is positively and negatively related to satisfaction (Liljander and

Strandvik, 1997).

Experiential marketing involves the marketing of a product or service through experience and

in the process the customer becomes emotionally involved and connected with the object of

the experience (Marthurs, 1971). A well designed experience engages the attention and

emotion of the consumer, and becomes memorable and allows for a free interpretation, as it is

non-partisan (Hoch, 2002). In contrast to traditional marketing which focuses on gaining

customer satisfaction, experiential marketing creates emotional attachment for the consumers

(McCole, 2004). The sensory or emotional element of a total experience has a greater impact

29

on shaping consumer preferences than the product or service attributes Zaltman (2003). The

benefits of a positive experience include the value it provides the consumer (Babin et al.,

1994; Holbrook, 1999) and the potential for building customer loyalty (Pine and Gilmore,

1998; Gobe and Zyman, 2001).

Experiential retail strategies facilitate the creation of emotional attachments, which help

customers obtain a higher degree of possessive control over in-store activities (Schmitt,

2003). These strategies allow consumers to become immersed within the holistic experience

design, which often creates a flow of experiences (Csikszentmihalyi, 1997). Affective

reaction based on an interaction with an object can be described as a person’s subjective

perception or judgment about whether such interaction will change his or her core affect or

his or her emotion toward the object. Cognitive reaction toward interacting with the object

involves cognitive reasoning or appraisal, and is a consumer assessment of the purchase

implications for his/her well being. Cognitive and affective reactions towards an object can

be quite different, for example: one might appraise taking garlic as good and useful for one’s

health, nevertheless, one can at the same time consider it unpleasant due to its smell and taste.

Experiential events can turn out to create both consumer and consumption experiences and

can by far more effective in attaining communication goals. Caru and Cova (2003)

conceptualization of experience, and Csikzentmihalyi (1997) experience typology and 7 ‘I’s

of Wood and Masterman (2007) may serve as a useful framework for evaluating the

effectiveness of an event by developing measures that relates to the level of challenges,

newness, surprise, and matching it with the audience’s prior experience and skill level.

However, the usefulness of measuring these attributes of the event depends upon the

assumption and belief that an event that is strong in those attributes will effectively create a

memorable and potentially behavior changing experience.

The strategic experiential marketing framework consists of five strategic experiential models

which create different forms of experience for customers. The five bases of the strategic

experiential modules are: (1) Sensory experience: the sensory experience of customers

towards experiential media includes visual, auditory, olfactory and tactile response results.

(2) Emotional experience: the inner emotion and sense of customers raised by experience

media. (3) Thinking experience: customers' thoughts on the surprise and enlightenment

provoked by experience media. (4) Action experience: is the avenue through which

experience media, linked customers so that they can acquire social identity and sense of

30

belonging. (5) Related experience for customers: is actualizes through the experience of

media production links, and to social recognition. [71]

Yang [2009] explored in experiential marketing the various constructs of “sense marketing”,

and discovered using regression model, the correlations between the variables of “repurchase

intention” and “customer satisfaction”. It was concluded that the sense of experiential

marketing is a crucial factor and significant correlation between repurchase intention and

consumer satisfaction was also shown by each construct of sense marketing.

Srinivasan and Srivastava, examined and analyzed the various facets of experiential

marketing, from the view point of both the consumer’s as well as the marketer’s. It was

proposed that the retailers are required to work on the ecological aspects to increase the level

of satisfaction and promote the return of customers. Mall developers and retailers should

provide customers with more benign offers and a conclusive buying experience which is

based on ‘visual’ merchandising, that is, sound, sight, taste, touch and smell. Ming [2] tested

the effects of experiential marketing on consumers’ satisfaction by using relationship quality

as the disturbance variable. He found that the experiential marketing do improve customers’

loyalty. In order to implement experiential marketing strategies, it is necessary to think about

whether the method can effectively improve customers’ experiential value at the same time.

Lee, Hsaio and Yang [3] explored the relationship among customer satisfaction, customer

loyalty, service quality, and experiential marketing for a number of shopping malls situated in

Taiwan. It was found that service quality and experiential marketing has a significantly

positive impact on customer satisfaction. Also, customer satisfaction, service quality and

experiential marketing have a significantly positive impact on customer loyalty.

Luo, Chen, Ching and Liu [4] tested the relationship between five elements (sense, pleasure,

flow, interaction and community relationship) of virtual experiential marketing (VEM) and

consumer browse and buying intentions and consumer loyalty. They also examined the

moderating effects between the customer intentions and VEM elements.

To test the suggested model, a survey of those consumers who repeatedly visited two online

stores of games was conducted. Because VEM is limited in its sensory engagement, four

VEM elements (interaction, pleasure, flow and community relationship) were identified that

increase browse and purchase intentions and support the success of experiential marketing,

customer loyalty, on the Internet. It was also found that the web design plays an important

role in empowering the four VEM elements.

31

Anggie and Haryanto [5] studied the influence of the experiential marketing, approach

behavior and olfactory towards purchase intention. It was found that, in order to create a

purchase intention, the retailers should develop approach behavior and experiential marketing

through olfactory first. The application of an appropriate retail environment (i.e. olfactory)

will create an experiential marketing. This experience will lead to approach or positive

behavior and finally push customer purchase intention.

Cannenterre, Mou, Moul, Bernadac and Ghor [6] examined how do experiential marketing

helps companies in innovating and attracting consumers? They found that that companies

have to build a whole strategy to implement Experiential Marketing such as: well define their

target market, which tools to use and what the impacts they will have on their business. This

marketing strategy has an influence on how customers react and buy things. More

importantly, consumers are looking for experience. It will lead to an added‐value for the

customers. Tsai and Yeh [7] attempted to explore the effects of both the “qualia” and

experiential marketing on the brand image, customer satisfaction, and customer loyalty and

concluded that both the “qualia” and experiential marketing have significantly positive

effects on the brand image, customer satisfaction, and customer loyalty. [2]

5. Customer experience antecedents and consequences

5.1 Pre experience:

This is the first stage in CEM process. In this stage customers prepare for consumption and

also anticipate the consumption process by first imagining about the experience, searching for

relevant information about the type of experience they would want and finally planning and

budgeting for the experience (Arnould et al, 2004).

5.2 Antecedents of customer experience:

Experiences help form attitudes. Attitudes are not stable over time. Good experiences result

in favorable attitudes. However consistent positive experiences reinforce feelings for the

brand. Recall of experience results in attitude towards selected elements of the overall

experience and this influences attitude towards brand

32

Figure 1: Conceptual Model of Customer experience antecedents and consequences

5.2.1 Brand Performance

The product is also the touch point likely to create the strongest emotional reaction, because it

is in the product experience that brand promise is fulfilled. The product itself is the most

valuable customer touch point, and creating a positive experience here is essential to building

customer loyalty (Garrett, 2006). In literature, brand attributes and performance leading to

development of customer relationship, has not been much explored. Brands help to develop

attitudes which in turn influence behavior. Majority of the research has focused on quality

aspect of brand performance and effect of development of attitudes. Customer perception of

belief and attitudes towards a product is shaped by product performance but only few studies

integrate it with emotional framework which helps in building sustaining relationships with

33

customers. Customer attitudes are formed by customer experiences which are sum total of

product performance, packaging and display as well as point of purchase perceptions. Only

very few authors like Billeter et al, (2011) have studied the link between product purchase

and usage experience. Their studies were based on products that require skills to use, such as

computers, cell phones, and sports equipment where consumers purchase and usage decisions

often depend on their prediction of the speed with which they will master the relevant skills.

Clatworthy, (2012) underlines the importance of aligning the customer experience to the

company brand and suggests how this can be achieved. By the help of analytical work and

experience prototyping the author tries to develop service personality and analyze service

touch point. The major outcome of the work is the development of process model which

connects brand congruence, project team cohesiveness and experiential result. It proposes the

involvement of brand in NSD (New Service Development). Authors like Hellier et al, (2003)

conclude that satisfaction is the overall level of contentment and pleasure resulting from

experience with the service or product.

5.2.2 Multichannel Interaction

The goal of multichannel customer management is customer acquisition, development and

retention. Multichannel customer management involves the design, deployment, co-

ordination and evaluation of all the channels through which the companies and its customers

interact. Authors Neslin et al, (2006) identify five major challenges which should be

addressed by practitioners to increase multichannel customer management affectivity. These

include the following: (a) data integration, (b) understanding consumer behavior, (c) channel

evaluation, (d) allocation of resources across channels, and (e) coordination of channel

strategies. Schmitt,( 2003) extends experiential marketing to include excellent customer

experiences with the brand at all touch points including alternative channels which result in

high customer equity. Integration of channels promotes better customer experiences at these

touch points as companies are increasingly embracing both online and offline channels. On

their work on apparel manufacturer, Venkatesan et al, (2007) conclude that the greatest

influence on second-channel adoption duration is the frequency-related interaction

characteristics. Integrated channels facilitate the protection of knowledge-based assets and

high levels of interaction with customers (McNaughton and Bell, 2001).The role of channel

integration and management for better customer response has been propounded by Li et al,

(2011) whereby they propose a customer response model. This model identifies how

customer demands evolve for various products, the multidimensional roles of cross-selling

solicitations for education, advertising, and promotion and customer’s heterogeneous

34

preference for communication channels. Customers view a solution as a set of customer–

supplier relational processes comprising (1) customer requirements definition, (2)

customization and integration of goods and/or services and (3) their deployment, and (4) post

deployment customer support, all of which are aimed at meeting customer’s business needs

(Tuli et al, 2007). Multi channel integration requires structural changes in an organization and

also changes in customer behavior. It is, from a firm’s point of view a strategic issue

(Hughes, 2006).

5.2.3 Service Interface

Emphasis of academic literature has almost entirely been on interpersonal dynamics of

service encounters. Some authors like Meuter et al, (2000) have focused their research on

customer interaction with technology based self service delivery options. Customers

experience a variety of negative emotions when service failure occurs. Interestingly,

customer’s perception plays an important role here. The type of reaction depends on the

customer’s perception of why the service failure occurred. Behavioral outcomes associated

with service recovery therefore depend directly on the negative emotion and indirectly on the

customer's perception of the cause (Harrison-Walker, 2012).

Customers elicit a sense of comfort from service encounters and overall comfort positively

impacts both overall quality and customer satisfaction, and this ultimately leads to positive

word-of-mouth (Lloyd and Luk, 2011). To provide better customer experiences companies

try to incorporate such elements in the service design. The application to a multimedia

service highlights how CEM can facilitate the work of multidisciplinary design teams by

providing insights to service design and by shifting focus from single experience elements to

their orchestration. (Teixeira et al, 2012).Academic literature has extensively focused on

healthcare and improvements of customer experiences in this industry. In their studies on

private surgical services Orava and Touminen, (2002), concluded that the surgical procedure

itself is not the most important element, but that, it must be supplemented by quality

dimensions in both output and process throughout the whole surgical service process. Some

authors like Ashill et al, (2005) have studied the front line service recovery process in

hospitals and conclude that managers can improve experiences in health care settings by

designing for frontline service recovery excellence. Service interface has a major effect on

experience which leads to brand experience recall resulting in perceptions which ultimately

shape attitudes.

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5.2.4 Physical Environment

Physical environment is also an important contributor to shaping the customer experience.

Swanson and Davis, (2003) pointed out that when customers find contact employees more

responsible for the experience, what is delivered is most important for evaluation of service

quality. When management is thought to be responsible, how service is delivered becomes

important. When responsibility is perceived to be shared between contact employees and

management, the physical environment may play a larger role in influencing consumer’s

satisfaction with the service experience. Customer experience is profoundly affected by

physical evidence particularly the service escape. This is inclusive of experiences which are

spectacular (e.g.travel adventure), routine (e.g. bus ride) or meaningful (e.g. weddings). In all

the cases, the customers would find experiences satisfying, meaningful and emotionally

connecting if the physical evidence delivered by the company positively influences

experience flow (Zeithaml et al, 2006).

5.2.5 Social Environment

Social environment is inclusive of interaction with other customers in retail setting and is also

inclusive of interaction with other customers in online applications, platforms and media

which aim to facilitate sharing of content. Social media network is important because there is

interaction between consumer and community and these result in immediate and interactive

communication (Miller et al, 2009). Ideally, companies expect a customer to interact with

them regarding product or service concern however, in reality customers usually rely on peer

to peer interaction as a source for company information. This is also the most trusted source.

Since peer to peer interactions are one of the major influencers, companies should try to

cultivate peer to peer communities. This helps to get feedback and lets satisfied customers

share positive feedback. Also, negative feedback helps companies address issues which might

otherwise go unaddressed (Mandell, 2012).

Moore and Capella, (2005) in their research on customer to customer interaction (CCI) in

high personal contact setting in different salons concluded that the salon atmospherics had an

important role in the formation of CCI which in turn influenced satisfaction, loyalty and

positive word-of-mouth. Academic literature could explore even more relationship between

customer to customer interaction and experience formation.

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5.2.6 Price and Promotions

Although reduced prices are incentives for purchase, there is a direct relation between

customer experience and pricing effects. When companies focus only on reducing costs to

support lower prices and show little or no sensitivity to experiences which customers have,

they may actually be decreasing the value of their offerings (Berry et al, 2002). The

importance of sensory experience cannot be underestimated. If customer if burdened with

factors like long waiting lines, disorganized store, then this can outweigh customer’s

consideration for price.

5.3 Customer Experience:

In academic literature, classification of experiences have been done is different ways. It is

classified into sensory, emotional, rational, pragmatic and relational (Gentile et al., 2007).

The goods, services, or anything else customers can see, smell, taste, hear, or perceive while

interacting with service systems constitute clues (Berry and Carbone, 2007), which directly

affects the experience the customer perceives or forms. Customers experience a range of

clues which help them generate a set of impressions. The impressions that customers have,

may be extremely obvious or subliminal. They may occur or may be designed. Clues help

form impressions which become experiences. Experiences are reinforced by positive or

negative clues. Clues may be performance based or context based. Performance clues are

based on functions of product or service. Context clues are more related to atmospherics

which involves sight, sound, touch, taste and smell. Positive customer experiences can be

derived by systematically engineering the clues. Clues also help to differentiate experiences.

If clues are not managed properly they also provide negative perception. Novak et al, (2000)

suggests an intuitive and logical way to analyze customer experiences by scrutinizing a

customer’s flow through e-brokerage systems with the first layer pertaining to the physical

and relational components in a service system (e.g., clues). After perceiving performance on

the basis of the service system, a customer develops a cognitive state of the flow experience,

which denotes the next layer of customer experiences and determines satisfaction with the

service. Berry et al,(2002) have identified three categories of clues in service experience

namely- functional clues, mechanic clues and human clues. According to them functional

clues correspond to technical quality of service while mechanic clues relate to design and

ambient factors like layout equipment, color and lighting. Human clues include service

employee behavior. Some authors like Pine and Gilmore, (1999) classified customer

experience into four parts i.e. entertainment, educational, escapist and esthetic. On the other

hand Gentile et al, (2007) have classified customer experience into six categories: sensorial,

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emotional, cognitive, pragmatic, lifestyle and relational. This is the most comprehensive

classification of customer experiences. Customers seek out functional value leading to

rational economic consumer choices driven by utilitarian meaning (Arnould et al, 2004).

5.4 Post Experience:

After the purchase is made product consumption happens. It could happen that consumption

is made in more than one occasion. Every consumption occasion is another moment of truth.

Hence there could be one or multiple moments of truth. The second moment of truth involves

use, handling and actual consumption post purchase. Since, at this stage it involves separation

of purchase and consumption, the benefits that influence customer satisfaction may be

different in the first and second moments of truth. When a customer has a positive experience

it creates enjoyment. In the process customers learn and develop new skills. Customer may

also experience nostalgia and display behavior of nostalgic reminiscing when reliving it

(Schindler and Holbrook, 2003). Not only this, customers also engage in fantasizing about

how the experience was or could have been in other context or to other customers. Service

firms are now making extensive use of post experience survey questionnaires to elicit the

feedback of customers on quality, satisfaction and repurchase behavior to improve

experiences. In satisfaction research, consumption emotions are generally assessed at the

retrospective, global level, once the service transaction is over. Typically, at the end of a

service transaction, the same survey will assess the overall intensity of various emotions, in

conjunction with measures of perceived performance and satisfaction (Dube and Menon,

2000). Dholakia et al, (2010) in their research found that such surveys have the potential to

evoke question-behavior effects (QBE) on participating customers and suggest that its impact

on firm revenues is positive.

5.5 The CEM Consequences:

5.5.1 Customer Satisfaction: The Immediate Result

An important antecedent of loyalty is customer satisfaction. Several authors have reported the

impact of customer satisfaction on repurchase behavior (Sambandam and Lord, 1995;

LaBarbera and Mazursky, 1983), repurchase intent (Anderson and Sullivan, 1993; Cronin et

al., 2000). Customer satisfaction resulting in loyalty has been covered extensively in

literature. But is not the only variable which results in loyalty. Image and loyalty studies have

received less attention. Studies that integrate image, loyalty and customer satisfaction are

even rare. Experience plays an important role because image changes with positive or

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negative customer experience. However customer experience with product or service results

in customer satisfaction which results in loyalty.

5.5.2 Customer Loyalty: The Important Upshot

Wong and Sohal, (2003) in their research on a large chain department store concluded that

service quality is positively associated with customer loyalty, and that the relationship

between the two is stronger at the company level, rather than at the interpersonal level. It was

also noted that at the company level the main predictor of customer loyalty was tangibles

while at the interpersonal level it was empathy. Interpersonal relationship quality enhanced

customer satisfaction with the service firm but was also directly linked to loyalty to the firm

and positive word-of-mouth about the firm (Macintosh, 2007) .Firms engage in customer

satisfaction surveys with the end goal of measuring customer satisfaction. There is the belief

that high satisfaction would result in high loyalty and repeat purchase. Authors Bennet and

Thiele, (2004) argue that high level of satisfaction does not always result in high level of

loyalty. Customers become loyal because of experiences they have, as a result of quality

control processes and relationship management initiatives (Garret,2006). CEM strategy helps

to deliver increased loyalty, increased growth and financially optimal performance.

5.5.3 Customer Equity

For firms, customer relationships could be a source of major intangible assets. There is a need

to address the issues in managing and harnessing such relationships based equity, for superior

competitive advantage and financial performance (Bejou and Iyer, 2006). Rust et al, (2000)

have defined customer equity as a subtotal of "the discounted lifetime values of all

customers". According to the authors, the customer equity is made up of three drivers: value

equity (the customer’s objective assessment of the brand's utility, based on perceptions of

what is given up, for what is received), brand equity (the customer‟s subjective and

intangible assessment of the brand, above and beyond its objectively perceived value), and

retention equity (the customer’s tendency to stick with the brand, above and beyond his or her

objective and subjective assessments of the brand). Authors Biedenbach and Marell, (2010)

in their studies concluded that customer experience has a positive effect on all dimensions of

brand equity such as brand awareness, brand associations, perceived quality and brand

loyalty. The study advances the findings from previous research indicating that customer

experience affects brand attitudes. The concepts of customer equity and brand equity are

highly related.The two concepts can have an interactive effect such that marketing actions to

improve customer equity can also improve brand equity and vice versa (Keiningham et al.

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2005). Schmitt, (2003) propounded the theory that customer equity is CEM outcome through

the three dimensions of customer acquisition, customer retention and add-on selling. [72]

6. Role of Experiential Marketing in Competitive Marketing Strategy:

The principle of competitive plan is to achieve a sustainable competitive advantage and

thereby improve business performance. One of the main goals of marketing strategy is to

improve the firm’s long-term financial performance. Therefore, the competitive marketing

strategy helps in improving the firm’s financial performance by the way of Sustainable

Competitive Advantages (SCA).

For a resource to become a source of SCA, there are four essential requirements. It must be

valuable, imperfectly imitable, exceptional among competitors and for this resource skill

there must not be any parallel substitutes. These sources result in positional competitive gain

i.e., differentiation of the product and its low cost, which in turn leads to greater long-term

market and financial performance. Creating competitive marketing strategies also involves,

understanding relationships between the marketing mix elements as well as finding out the

impact of competitive and market surroundings on marketing mix formulation. In relation to

this, a model has stated the relationship between prices, promotion expenditures and product

quality levels and to review how industry structure impacts the formulation of marketing mix.

Here comes the role of experiential marketing. Experiential marketing serves as intermediary

for the sustenance of positional gains and influences the stimulus of market and competitive

conditions on the formation of the marketing mix. A crucial element of firm’s marketing

strategy is firm’s relationships with customers, competitors and with channel members.

7. Events and Activities Promoting Experiential Marketing:

Experiential marketing employs a large number of events and activities. However, Tie-ins

with sports events are among the most popular and effective types of experiential marketing.

The following are some examples:

anchor for a sponsor village that includes everything from the world’s largest plasma TV

screen to fortune tellers and tattoo parlors, all brand-backed. Sponsoring marketers include

PlayStation, Slim Jim, Toyota, Vans, and Verizon Wireless, among others.

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-Miami

Speedway, M&T Bank Stadium in Baltimore, and several other sports venues. The party

decks give Miller Lite a permanent branded entertainment area.

Local social events are another form of experiential marketing. The following are some

examples:

•Borders book stores has offered a wide range of free events, including fitness and recreation

clinics, seminars on diet options, singles nights, wellness fairs, and yoga classes.

which feature stuffed game, artificial trout streams, and restaurants.

evening run. Afterward the members of the Niketown Running Club socialize in the store

over refreshments. Nike’s staff keeps track of performances, hailing members who have

logged more than 100 miles.

tours.

At the Whole Foods supermarket in Seattle, shoppers take part in a singles night the first

Friday of every month. The store’s marketing staff organizes a wine tasting with snacks.

Participants can opt to wear a red or blue ribbon to indicate whether they are looking for a

male or a female partner.

pular experiential marketing tool. The following are some examples:

house parties. Produced by marketing services House Party, Hershey staged 10,200 House of

Bliss parties over the April 25, 2008, weekend. At each event, hosts invited friends and

family to share personal stories of bliss while sampling Hershey’s Bliss products. More than

129,000 people attended the parties, about which there were more than 15,000 blog entries

sponsored for about 300 guests a pool party at a midtown Manhattan hotel.

Experiential Marketing by Brands in India

Following are some of the examples of events organized by some brands to enhance

experiential marketing in India:

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Homeshop18: Homeshop 18, which is actually a home-shopping television channel, has

started first mobile aided, virtual shopping experience in India. At Terminal 3 of IGI Airport,

New Delhi, the virtual wall displays a variety of products that can be bought by the

passengers by way of scanning the QR codes of products on their cell phones. They are

channeled to the website from where they can get the delivery of product directly at their

doorstep and also pay the price on delivery.

Mahindra Monastery Escape: To give the credible Himalayan experience to adventure

admirers, SUVs of Mahindra are off on the current Mahindra Monastery Escape campaign.

This journey from Delhi to Leh, is an annual event and is pointed as the ‘drive of a lifetime’,

becoming increasingly popular year by year.

Coca-Cola: Coca-Cola applied ‘Small World Machines’ placed in malls in Lahore and

New Delhi to bring together the folk of India and Pakistan. By 3D touch-screens, customers

in both nations were motivated for interaction with

their counterparts. They were enabled to join hands, draw peace signs, wave and even dance

together. The machine disbursed a can of Coca-Cola to both of them at the end of it.The

‘Open Happiness’ concept was taken to a completely new level by this activity.

Puma Social Club: The Puma Social Club located in Bengaluru is a latest and attractive

spot for the ‘after-hours athlete’ to hang out in. It offers beverages, food, a Super Mario

console, quirky gizmos, and even a breathalyzer machine to test if the athlete can drive home

himself. Puma Social is augmenting the fact that Puma isn’t just a sports brand; it’s a sports

lifestyle brand.

8. Benefits of Experiential Marketing:

Experiential marketing engages consumers and encourages them to engage in the

development of a brand. Consumer engagement is the definitive point in which a consumer

and a brand link up in order to offer a real experience which is related to the core values of

the brand. It is a long term network that needs to be improved over time.

Firstly, experiential marketing is a tremendous stance for bringing a brand personality to life.

When a consumer is engaged with the brand he has an impressive understanding of intricate

brand values and will affiliate the product with that personality, also he would connect with

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the lifestyle and aspiration aims of the consumer resulting in strengthening the relationship

and genuine connection between the consumer and the brand.

Secondly, it helps in creating brand advocacy as experiential marketing focuses on increasing

customer loyalty and strengthens brand relationships through personal recommendations that

are the result of consumer’s sentiments and emotions that the brand experience supplemented

value and associated with them through pertinent interaction.

Thirdly, there are few products in the market that have to compete in the drenched sector,

where differentiating between such product features is sometimes a difficult task .In such a

situation by creating a brand experience, it helps to form an emotional bond with its target

consumers, and these consumers are more expected to develop brand loyalty to that product,

allowing the business to have a stable market share and avoid relying on sales promotions.

9. Strategic and Organizational Issues: Experiential Marketing:

Although experiential marketing provides a large number of benefits, yet it is not easy to

adopt it. It involves some strategic and organizational issues, which are as follows:

Strategic Issues:

Brand Architecture

One of the major issues covered under experiential marketing is brand architecture as it is

projected to the suppliers and consumers. Characteristically a company that has very

towering corporate visibility like Sony or Ford should not only build for itself an experiential

identity but for its brands and products also it must build experiential identities, and these

should not collide with the corporate identity. A corporation that has formed a strong stand-

alone brand individuality (General Motors) may give up experiential branding because it has

lower visibility as a corporation, but still there is a need to manage the experiential

distinctiveness of its products and brands.

Innovative Products, Brand Expansion and Partnership Strategies

Using the traditional approach, the main objective of new product development is adding new

features and benefits to the product and improving the old technologies to form an innovative

product. New product and brand extension decisions using the approach of experiential

marketing are driven by the extent to which these new products and brand extension

categories improves the experiential representation of the organization, the extent to which

43

these new products and brand extensions accumulate new experiences which may be

leveraged in supplementary new products and also the extent to which they help in the

formation of holistic experiences.

These considerations will also influence the choice of other firms for strategic partnership.

For example, the decision of Daimler-Benz and Swatch to create a joint venture and to

manufacture a the Smart Car was influenced by the experiential considerations.

This Smart Car was a new automotive contribution that was experiential from outset to end

being the combination of the best of its parents’ world. The Smart is perceived as a

completely new product-an innovative way out to the tribulations of city driving.

Organizational Issues

Experiential Marketing focuses on the vital strategic issues, but it also requires organizational

changes, i.e., creating a new spirit that pervades the complete organizational culture which is

termed as "the Dionysian organization" where the managers concentrates on what experience

they want to create in the long term for their customer by inventing interesting ideas. Also

they motivate their employees to freely express themselves and challenge them to create new

techniques and methodologies through innovation thoughts and prevailing management

practices. Creativity and Innovation are the main ingredients of forming a Dionysian

organization. Also, the experience-oriented firm treats innovativeness and creativity

presented by its employees as its most significant intellectual capital. The organizations who

want to make outstanding experiential programs may rely on expertise which manages these

programs in an integrated fashion.

10. Suggestions for Creating a Winning Experiential Marketing Strategy in

today's World:

A predominantly popular and efficient way for firms to associate with their target

audiences is by the way of experiential marketing which is simply a matter of forming a

series of events that allow the marketer's product to get into the hands of the consumer and

lets them directly touch, taste or learn about it. Brand consciousness can be increased through

experiential marketing campaigns for a large range of products and services, ranging from

packaged goods to even financial services. Before taking over a larger segment of market

share a marketer should focus on the following points:

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Knowing the Brand: It is vital to have a clear idea about the brand i.e., to know what the

brand stands for and what message it wants to convey to the customers. This is very essential,

especially when associating with the audience by way of an experiential marketing event.

Consistency Is Key: One should make sure of the creative team which is hired, should be

provided with the materials from all of the conventional above-the-line drives including

billboards, print ads, TV commercials and radio spots. It is crucial to keep the same message

across all channels. When it comes to the product, irrespective of what they're reading about,

seeing, listening to or experiencing.

Number of events in a Campaign: A single event cannot make the campaign effective .The

marketer should undertake certain amount of events so that the campaign will be really

effective and yield expected outcome and results.

Integrate social media from the initial stage: The interaction and growth of social media,

mobile and content marketing provide a right environment for experiential marketing. It is

important to reach to the millions which can only be done through the social media, and

which will ensure the deliverance of the message to a much wider audience.

Pay Attention To The Response: The most important aspect of experiential marketing is that

customer reaction is immediately known to the marketer. If the message is not clear, it can be

changed for the second event. Therefore, the marketer is required to pay attention to the

customer feedback and adjusting the event accordingly as soon as possible [8-35]. [2]

11. Deploying a Successful Experiential Marketing Campaign:

Every company wants to create that “A-ha!” moment when the brand goes from recognized

to internalized in the customer’s mind. But before you can reap these rewards, you need to set

the stage for a successful experiential marketing campaign.

Here are six steps to get you on the right track:

1. Start with the end in mind: Visualize what successful experiential marketing would

look like for your business. What actions do you want to influence? Do you want to

push a one-time customer to become a lifelong brand advocate? By envisioning an

ideal event beforehand, you can better replicate those results in real life.

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2. Pinpoint your audience: After you’ve defined success, think about who you want to

reach. Would experiential marketing work best for young adults using your product

— perhaps technophiles or a specific political group? Understand your client base so

you can put the right message in front of the right people.

3. Tap into your audience’s lifestyle habits: Talk to your customers, and learn when

they’re most open to engagement. This will tell you whether you want to focus your

efforts on in-store experiences, such as RFI tagging and on-location promotions, or

off-site branding at concerts, sporting events, fairs, or festivals.

4. Determine the best way to bring your brand to life: Not all experiential marketing

looks like marketing — to many customers, these events are somewhere to hang out,

have fun, and explore. You can bring your experience to audiences via mobile vehicle

tours with traveling brand ambassadors. Having brand ambassadors walk attendees

through the event or frame it in a particular context will shape their brand perceptions

and evoke a best-in-class feel.

You could also implement engaging games and experiences in your store or throw a big event

and invite everyone to attend. If your priority is quantity over quality, consider mobilizing a

street team and doing sampling to distribute product quickly or provide further education.

5. Integrate your marketing resources: Bring other marketing methods into your

experiential campaign. Broadcast your event through social media, television, and

even print media. Aim to gather data on your site and continue the conversation

before and after the event.

6. Partner with an agency: Find an agency that understands your brand, can

realistically handle your event needs, and is compatible with you and your team.

Make sure the agency has a defined process to help you through the discovery phase

so you can identify where the true opportunity lies and make the most of it.

Experiential marketing isn’t meant to get people thinking more frequently about a brand or

product. It’s meant to leave a lasting brand impression on consumers so when they want to

express themselves, they choose to do so through the brand that best understands them. And

with a targeted, thoughtful approach to experiential marketing, that brand can be yours.

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12. Conclusion:

In general, the paper looked at the relationships between experiential marketing, purchase

behavior, experiential value and customer loyalty. From the findings, the relationships

between experiential marketing, purchase behavior, experiential value and customer loyalty

were found to be positive and significant. Experiential marketing and experiential value were

the most significant predictors.

Based on the above discussion, combine with the strategic experiential module analysis we

conclude that Experiential marketing has a great impact on customer loyalty. It is therefore

also concluded that the effect of the strategic experiences modules on experiential marketing

and the influence of experiential marketing to the customer's brand loyalty can be realized at

least through five (5) basic processes, namely:

a) Sense is the first essential element in implementing of experiential marketing.

b) Feel is the second variable that affects the realization of experiential marketing through a

process and mechanism for gradual strategy, directed and continuous.

c) Think a third element that is important in experiential marketing which shows that the

influence of think of the customer's brand.

d) The Act is a fourth important element in experiential marketing which indicates that the

effect of the act on the customer's brand loyalty begins with how the Act gives the dominant

strategic impact on the improvement of experiential marketing

e) Relate is a fifth element which is important in experiential which shows that the effect

relate to the customer's brand loyalty begins with how Relate dominant strategic impact on

the improvement of experiential marketing.

13. Observations & Recommendations:

On the basis of above discussion, the following observations & recommendations are made:

1. According to the discussion, experiential marketing and experiential value were found to

be the major predictors of customer loyalty. Therefore, the management of any businesses

should put a lot of emphasis on the extensive use of experiential marketing and value to grow

customer loyalty. This can be carried out by putting in place.

2. According to the discussion on the relationships between the experiential marketing and

customer loyalty, positive and significant relationships were observed. Therefore, the

47

management needs to put a lot of attention on the significant relationships as these will have a

positive effect on the attitudinal, behavioral and cognitive aspects of customer loyalty.

3. Any company need to give close attention to their customers day to day activities ,

customers buying activities, customers perceptions about particular products & on the basis

of that observing activities need to design various engagement programs to make the

customers loyal.

4. There are a number of opportunities for strategy review in regard to experiential marketing,

purchase behavior and experiential value to improve customer loyalty. The management

should therefore, assess regularly the performance level of the company in regard to

customer loyalty and carry out review of the strategies being used to promote loyalty through

experiential marketing and value.

5. There are two types of loyalty, Short term & long term. Long term loyalty generate more

profit for the organization than short term loyalty. Through experiential marketing in

maximum case long term loyalty is ensured.

6. Do you know why everyone loves a repeat customer? Because it costs your business less

to keep a current customer than it does to find a replacement. In fact, according to one survey

[73] 70 percent of companies reported spending less to retain a customer than to create one.

7. Despite this fact, only 30 percent of companies indicated that they were “very committed”

to relationship-focused marketing. It’s not that businesses don’t want loyal customers; they

just don’t know the best way to create them.

8. Experiential marketing gives customers a closer look at your product and brand and can

funnel enormous benefits back to your company.

9. According to one survey [74], 96 percent of customers said these events made them more

likely to purchase the promoted products, and 74 percent of event participants left with more

positive opinions of the brand. Furthermore, brands that use experiential marketing

techniques saw dramatic increases in ROI last year versus the year before.

10. So the experiential marketing is a great variable to make a customer loyal to a brand. To

ensure maximum profit any company need to consider this matter very properly.

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