Experiential Marketing

Understanding Varanasi Customers: A Case Study of Samsung & Nokia Mobile Phone Store

A Project Report
submitted for

Research Methods & Methodology

By

Tage Nobin (48)

Under the guidance of

Dr. Ashutosh Mohan

FACULTY OF MANAGEMENT STUDIES BANARAS HINDU UNIVERSITY

Abstract
Study was conducted basically on how experiential marketing (EM) affects the buying pattern of the mobile phone customers. The study also covered the impact of EM on repeat visit by customers; its acceptance based on gender & the reasons for repeat visits when compared to store not using EM. Research was carried out at two specialty store dealing mobile phones in Varanasi, one of the most populated cities in India. Questionnaire using one to one interview technique was used. Of 78 interviewed, 36 (EM) and 29 (NEM) were selected for study on two specialty store, one set had experiential marketing in practice & the other didnt practise EM (NEM). Experiential marketing impact was studied on parameters like feel good, friendly people and ambience. The study confirms the hypothesis that experiential marketing can make a positive impact on the buying patterns of the customers. Word of mouth is equally important for EM and NEM store. PR role is more important for EM than NEM store. EM store have 31% repeat customers compared to 1% with NEM store. This is significant comparative study on EM and NEM usage. Customers are spending more time at these store due to EM approach. Ambience of both store played important role. Females visited less compared to male but repeat visit of females was on the higher side as they were more influenced by EM.

Chapter 1 Introduction
Change is the buzz word that prevails today; come in new technologies, communication, comes the changes the marketing too. There are competitions where principles and actions of traditional marketing do not work. These opportunities open the door for experiential marketing. Marketing-mix theory focuses from the mechanical point of view (stimulus-reaction). The gap between stimulus and reaction stands the process, the process wherein we can incorporate the experience element. This very process stands as the pillar of the so called experiential marketing. Marketers tend to engage consumers in a memorable way, offering them extraordinary experiences. For them, experiences provide consumers a way to engage physically, mentally, emotionally, socially and spiritually in the consumption of the product or service making the interaction meaningfully real. India's mobile marketing space, which some analysts estimate at Rs 600 million ($11 million), is expected to grow 10-fold in the next five years. Mobile marketing has started to grow rapidly in India as the brands see the opportunities beyond just internet options. Mobile phones are here to stay. It has definitely become the soul companion of most of the people, right from using it as a simple watch to handling ultra hi-tech stuffs. Purchasing a new mobile phone is something which everyone enjoys. Going to a regular street side retailer for mobile phone, customers come across dummy models where the features of the mobile phone can only be read but not tested. There is definitely a gap which can be bridged by the concept of experiential marketing. Few showrooms have been developed which have come up with the concept of letting the customers to get a hands-on experience of the features of all the models available prior to buying of the same. Our study will focus on the impact of this very experience of the customer.

Figure 1.1: Four factors for experiential marketing process

1.1 What is Experiential Marketing?

Experiential marketing is a discipline of marketing which allows users to interact with a brand and its products or services firsthand, often in a controlled environment. This area of marketing aims to appeal to emotions, logic and the senses, and it provides an opportunity for customers to engage with a brand. This engagement aims to diminish the disconnection between what a company says about its offerings and what customers actually encounter. 1.1.1 Exploring the Notion Experiential Marketing For researchers in consumer behaviour, an experience is above all a personal occurrence, often with important emotional significance, founded on the interaction with stimuli which are the products or services consumed. This occurrence may lead to a transformation of the individual in the experiences defined as extraordinary. Taking up the argument of sociology research in consumer behaviour considers experience as a central element of the life of todays consumer, a consumer who is looking for sense. For the post-modern consumer, consumption is not a mere act of devouring, destroying, or using things. It is also not the end of the (central) economic cycle, but an act of production of experiences and selves or self-images. Indeed, there is the

recognition of a growing quest on the part of the contemporary consumers for immersion into varied experience more and more conceptualized as embodied experiences. Five different types of experiences or strategic experience modules (SEMs) may be identified as follows: 1. SENSE: These are sensual and tangible aspects of a product or experience that appeal to the five senses of sight, sound, scent, taste and touch. Sense experiences are particularly useful to differentiate products or services, to motivate potential customers, and to create a sense of value in the mind of the purchaser. 2. FEEL: Feel marketing is devoted to inducing affect (i.e. the creation of moods and emotions) that adhere to the company and brand. Clearly, positive or negative feelings toward a product or service will influence the extent to which it is consumed. 3. THINK: The objective of think marketing is to encourage customers to engage in elaborative and creative thinking that may result in a reevaluation of the company and products. 4. ACT: Act marketing is oriented towards the creation of experiences through behaviour on the part of the customer, either privately or in the company of others. The goal is to change long-term behaviour and habits in favour of the particular product or service. 5. RELATE: Relate marketing expands beyond the individual's private sensations, feelings, cognitions and actions by relating the individual self to the broader social and cultural context reflected in a brand. In other words, relate marketing plays upon the identification of self with the context and associations bound up in the product or service used.

Chapter 2 Problems and Issues

Experiential marketing is often seen as working only on external factors improving the value that customers get. But there has to be similar in consideration for the employee experience. There is very limited work done in India due to lack of creation of rational experiential approach meant for consumer in absence of understanding of emotions. Very few organizations are practicing the concept. Therefore, it will be interesting to find out the effect of the same in marketing by studying the practices of the marketers. Some of the major problems faced by todays organizations in practicing experiential marketing include the following factors:

2.1. Implementation Process

Nowadays each organization has its own methods and policies of implementing a strategy or tools. Experiential marketing process may (Sense, Feel, Think, Act & Relate) involve strategic planning which includes 5 strategic experiential modules. Taking one or more combination of this may differ on companys own perception and product/service category. Hence, implementation process may differ which may lead to discrepancies.

2.2. Cost involved

Experiential Marketing requires high cost involvement. Cost involved is too high for an organization to recover in short time. So, a firm with high resource backing may be able to sustain better in competition. A newly entered firm in the market may not be able to compete well with existing firm with this type of marketing. All the cost put in and expenses incurred may not always provide positive or better results. Results may be negative and lead to losses.

2.3. Time factor

No fixed period is decided for which experiential marketing can be carried out. It requires to be followed for a long period. If not continued, it may not have the desired impact and results will vary on negative side from expected results. Experiential marketing has problems but right selection of process and proper planning may lead to effective execution which will in turn lead to positive impact on minds of the customers. Other elements of marketing still matter like pricing, service quality, promotional activities and personnel etc. How experiential marketing is placed in context of other P of marketing? Can experiential marketing overcome the inhibition factor of purchase of value conscious customers? How can it help in generating extra pull to generate sales compared to those who are not doing the experiential marketing? Experience marketing can be useful in building brands. In pharmaceutical industry it is common practice to demonstrate, make the doctor taste & feel the product in order to generate prescriptions from doctors. Therefore this study was conducted by keeping the following objectives: 1. Primary objective: To understand the impact of experiential marketing in context of Samsung and Nokia mobile phone store in Varanasi. 2. Secondary objective: - How can EM help in repeat visits? - Understanding the causative factor for repeat visit by consumers. - Impact of EM on gender acceptance.

Chapter 3 Research methodology

3.1. Research Design
This research was carried out in Varanasi. One store viz. Samsung Smart Phone Cafe, implementing experiential marketing (EM) & another store viz. Nokia Priority Outlet who were not using experiential marketing (NEM) were selected for comparative study. Nokia Priority is a mobile phone retailer positioned itself as an exclusive mobile phone store with products ranging from the basic to high end models. It doesnt practise experiential marketing strategy. They are typical store where customers simply transact and do not experience the effect of experiential marketing. They let the customers play with some dummy models which are basically features typed but non-functional. On the other hand, Samsung Smart Phone Cafe has itself earned its niche customers by positioning itself as a life style mobile phone store with large spacious layout with bright cheerful interior that encourages people to stay & browse through the various original models. Soft music added ambience to browsing through the different models. Simple innovations such as methodical classifications, clear signage, electronic enquiry desk, attractive display makes looking at the phone models more pleasant. They have well trained people. Both the stores are leading store in their respective areas.

3.2. Survey Methods

Personal interview involving face to face basis was utilized. Questionnaire technique was used as a tool to gather information. The questionnaire focused on reasons for visiting store, how much time is spent in these store, what can be contributory factors for repeat visits & is there any difference between the store who are using experiential marketing & those who are not using experiential marketing. 5 personnel were involved. The survey took about 18 days. Permission for conducting the research was given by managers of these stores. Care was taken to note down the telephone numbers of respondents. This was verified & in complete questionnaire forms were rejected. Out of 43 forms (from the first case) of the store practising experimental marketing 36 forms were selected. Similarly, 29 out of 35 forms of the store not practising experiential marketing were selected.

3.3. Sampling
It was a comparative study where in two groups of people were selected. One group belonged to store using experiential marketing & other was NEM store that used purely transactional marketing. 36 people were in Group I (store using experiential marketing) & 29 were in Group II (store not using experiential marketing). 61% of the participants were males though males were more in experiential marketing store (70%) compared to non experiential marketing store (51%). 51% were graduates compared to 49% who were undergraduates. This is given in Table 3.1. EM Samsung Store 25 (70%) 11 (30%) 36(100%) 20 (56%) 16 (44%) 36 (100%) NEM Nokia Store 15 (51%) 14 (49%) 29 (100%) 13 (44%) 16 (56%) 29 (100%) Grand Total 40 (61%) 25 (39%) 65 (100%) 33 (51%) 32 (49%) 65 (100%)

Male Female Total Graduate & above Under graduate and lower Total

Table 3.1: Customer profile visiting the store

Chapter 4 Results and discussion

4.1. Study 1
The study was a comparative one and involved two segments. Segment 1, studied the store using experiential marketing (EM). Samsung Smart Phone Cafe is a leading store practising experiential marketing (EM). The store got the best retail store award for their innovative approach. Customers were asked about the reasons for visiting this store; hence word of mouth (32%) was named the main reason. Other reasons which compelled the customers to visit the store were the marketing efforts to generate pull through advertising in press (25%), new arrival information (26%) & PR write up in press (12%). Press advertising predominantly generated the pull. The location of these store generated only 5% of customers pull on an overall basis. 68% of the persons who visited these store were first-times. However, 32% were the repeat visitors. This is significant, as it shows that experiential marketing brings back the customers. This is reflected in Table 4.1. EM Store Samsung 24 12 36 Table 4.1: Repeat visit frequency NEM Store Nokia 28 1 29

First Visit Repeat visit on monthly basis Total

Repeat visits could be due to formation of an impression in experiential marketing as it creates memorable sensory stimuli. This is more important as these store improve touch points and connect to consumer through experiential marketing. Experiential retailing means making connection with consumer who comes to interactive store for more than merchandizing. This in fact many times may overcome the inhibition factor of purchase of valuable conscious customers. The repeat visit by customer is mainly created due to the stimuli & emotions generated. The benefits of experiential retailing include an enormous impact on brand equity a great psychological lift. The entire process could be explained in Figures 4.1, 4.2.

Customers

Store practising EM

Fed good customers Repeat visits

Press Ads PR New arrival information Word of mouth Location

Friendly store Ambience Providing memorable experience

Figure 4.1: Enhancing sales through experiential marketing approach

Reinforcement by experience

Create environment in which customers can react

Integrate customer learning with employee

Consumer decisions are influenced by emotions

Trigger the warrational v/s emotional behaviour

Create cognitive experience and brand registration in mind

Figure 4.2: Experiential marketing- new dimension

Experiential frame work can be developed in six steps which include developing a cohesive team, forming impression, eliminating distraction, providing memorable experience, ensuring all senses engaged and soliciting feedback. Research on reasons for repeat visit indicated that ambience (34%), feel good (37%), friendly people (29%) were the important factors which motivated them to come again. These factors created better interaction between consumer and store. Experiential retailing means making connection with consumer more than merchandizing. Therefore, designing experiential curve can attract the customers attention and imagination. Experiential environment is an essential source of competitive advantage which is difficult to be imitated and substituted. Repeat visitors gender analysis revealed that 38% were females on an overall basis. Store practising experiential marketing (Repeat Visit) Samsung Store Male 7 Female 5 Total 12 Table 4.2: Gender analysis of repeat visit customers

Male Female Total

Repeat Visit 7 5 12

28% 45% 34%

Total Visit 25 11 36 (100%)

Table 4.3: Gender analysis

Thus the study confirms that experiential marketing helps in building brand which eventually helps in repeat visit. This finally results in creating a positive impact on the sale of products. It also gives explicit reasons for repeat visit.

3.2. Study 2
The second segment was the undertaking the research on consumer behaviour profile of those customers who visited the store which did not implement EM and how they were different. It also gave an insight on gender segment analysis of the store not implementing experiential marketing (NEM). This study was a comparative one and its object was to investigate where the store not implementing EM have any impact on customers in terms of repeat visits. This store basically has transactional marketing and is frequented due to word of mouth (44%), location (37%), and hand bills (18%). Satisfaction or dissatisfaction with a product or service is probably the single most widely studied and confirmed antecedent of word of mouth in marketing mobile phones.Word of mouth promotion (WOM) is in more practice for store not using EM compared to EM using store. WOM creates new customer for nonEM store but does not create repeat customers when compared to EM-store. This is significant as NEM store customers were new and only 1% were repeat customers as given in Table 4.1. Locations play an important role in non-EM store. Hand bill promotion (19%) is an important medium for promotion of non-EM store as given in Table 2. Most of the respondents (99%) were first-timers and had not come earlier. This is in contrast to store using EM where repeat visit was 32%. This is a significant finding of EM on customers revisiting the place. This comparison is statistically significant.

Conclusion
The present study was conducted in Varanasi. Two stores dealing in mobile phones were selected. The selection of these stores was based on the practices and value addition given by these stores. The study explored the impact of experiential marketing (EM) and tried to evaluate the same on repeat visit of customer and whether gender has any role. This was compared with the store that does not use Experiential Marketing. The study covered 36 (Experiential Marketing store) and 29 (not using EM store) respondents. Both groups of store were strongly placed as specialty store. Study indicated that specialty store have more opportunities to try experiential marketing (EM). The word of mouth (WOM) was equally important for EM store and NEM store. This was 32% and 38% respectively. Print media do bring people to these stores. PR is more important to EM store compared to NEM store. Conventional method like hand bill and location are other two important factors for NEM store to pull the customers. In order of importance location for EM store was 5% compared to 37% for NEM store. Repeat visit for customers for EM store was 32% when compared to 1% of NEM store. Repeat visits reasons were ambience, feel good, friendly people. Ambience could be due to facilities provided at this store like table & chair to read, music headphone, cool environment. This was further enhanced by friendly people at this store. Female visiting again compared to male is less in store using EM. However, visit for females was 41% compared to 28%. This is significant. This could be due to right brain of female that is more active compared to left brain of male. EM touched the emotional cord of female more than male.

Limitation and Scope for further study

The study was conducted only in selected region of Varanasi city. No doubt, Varanasi is the one of the most populated city in India but our sample size may not represent totally the entire population. Also the demographic factor may play some role. Purchase value of the customers could not be ascertained due to confidentiality of data as per the store manager. Even experiential marketing practices differ from product to product, as we can see in case of Nokia Priority and Samsung store. The comparison of marketing practices in Nokia Priority and Samsung store is somewhat unjustified as Nokia Priority store deals with mobile phones ranging from basic to high end models. Whereas, Samsung Smart Phone Cafe only deals with only high end models of mobile phones. A further research will be useful if these data can be correlated with respect to culture and religion. It will be also interesting to study the impact of word of mouth on bringing in new customers to store. Total customer experience using different parameters could throw still better insight.