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Marketing Theory: Experience Marketing and


Experiential Marketing

Article January 2012


DOI: 10.3846/bm.2012.063

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7th International Scientific Conference ISSN 2029-4441 print / ISSN 2029-929X online
Business and Management 2012 ISBN 978-609-457-116-9 CD
May 10-11, 2012, Vilnius, LITHUANIA doi:10.3846/bm.2012.063
http://www.bm.vgtu.lt
Vilnius Gediminas Technical University, 2012

MARKETING THEORY: EXPERIENCE MARKETING


AND EXPERIENTIAL MARKETING
Siiri Same1, Jorma Larimo2
1
Tallinn University of Technology, Ehitajate tee 5, EE-19086 Tallinn, Estonia
Email: siiri.same@ttu.ee; siiri.same@eas.ee
2
University of Vaasa, Wolffintie 34, FI- 65101 Vaasa, Finland
University of Tartu, Narva Road 4, EE-51009 Tartu, Estonia
Email: jorma.larimo@uwasa.fi

Abstract. Despite the fact that experiences are regarded as key concepts in marketing today, there are dif-
ferent views and interpretations about the content of terms. The main objective of this article is to analyse
the concepts of experience and experiential marketing. Based on the literature review the authors found
that experience marketing is a strategic and a broader term than experiential marketing. We define experi-
ence marketing as a strategic and holistic marketing of relevant (and meaningful) experiences, and expe-
riential marketing as a tactical tool that helps to do marketing experientially. At the end of the article a
conceptual model of experience marketing is proposed.

Keywords: experience marketing, experience, experiential marketing, customer experience, value.

Jel classification: D11, M31

1. Introduction sessment refer to lack of clarity in marketing lit-


erature with regard to what exactly constitutes an
Increasing amount of people are searching for
experience and the conflation of terms associated
meaning, happiness, sensations, new forms of ful-
with experience marketing. The seminal article
fillment and core values, which they often find in
and book Experiential marketing was written by
market offerings (Fortezza, Pencarelli 2011). Ex-
Schmitt in 1999. In the articles written by Schmitt
perience marketing is a new approach to marketing
(2009, 2010) ten years later the keyword is surpris-
and business. Compared to traditional marketing it
ingly experience marketing.
is an innovative and creative approach, and is go-
This article seeks to contribute to the existing
ing to be a major growth area in next years.
knowledge of experience marketing. The key re-
Already in 1999 Schmitt declared that we are
search questions are: 1) what are experience, ex-
in the middle of a revolution that will replace tra-
perience marketing, and experiential marketing?,
ditional feature-and-benefit (F&B) marketing with
2) what is the difference and relationship between
experiential marketing (Schmitt 1999 a). In 1998
the terms?, 3) how to conceptualize experience
Pine and Gilmore (1998) introduced experience
marketing? The goal of this theoretical article is
economy as the next economy following the ser-
based on the analysis of key concepts and earlier
vice economy. Experience is the main component
research in the field to propose a conceptual model
of experience marketing and according to LaSalle
of experience marketing.
and Britton (2003) and Schmitt (1999 a) it is key
The structure of the article is as follows. First,
marketing in future. Although experiences are re-
we provide an overview of key concepts of experi-
garded as key concepts in marketing today, there
ence and experiential marketing. Second, we ex-
are mixed views and interpretations about the con-
amine some theoretical approaches and formation
tent of terms. Experiences are seen in different
of experience marketing, and also relationships
ways and varying approaches are available. Some
between the terms. Finally, we propose the con-
terms are sometimes used as synonyms, for exam-
ceptual model of experience marketing to under-
ple confusion arises when defining experience
stand the essence of experience marketing and
marketing, experiential marketing, and customer
pave the way for further analysis and research.
experience management (CEM).
Tynan and McKechnie (2009) in the review
article Experience marketing: a review and reas-

480
S. Same, J. Larimo

2. Definitions of experience affective events that have a strong impact on the


perceiver.
As a concept and empirical phenomenon, experi-
Veijola (2002) describes two dimensions of
ence is not as established as other consumer and
experience: 1) experience (in German Erfahrung),
marketing concepts, such as choice, attitudes, con-
as already perceived or experienced, and 2) ex-
sumer satisfaction, or brand equity (Schmitt 2010).
perience (in German Erlebnis), not previously ex-
Poulsson and Kale (2004) observe that no attempt
perienced. Snel (2011) assures that Erlebnis is iso-
has been made to systematically define an experi-
lated and immediate, but Erfahrung is a continous
ence in marketing terms. The lack of clarity lies in
process of doing and undergoing, giving and tak-
different ways in which the term can be under-
ing, causes and consequences, action and reflec-
stood. Tynan and McKechnie (2009) explain that
tion, etc. German, Dutch, Estonian, Swedish,
experience is both a noun and a verb and it is
Norwegian, Finnish, and Japanese languages make
used variously to convey the process itself, par-
a distinction between these two words, but English
ticipating in the activity, the affect or way in
has only one word experience.
which an object, thought or emotion is felt through
Despite the frequent use by scholars of the
the senses or the mind, and even the outcome by
term experience, its definitions in the literature
way of a skill or learning. In addition, experi-
tend to focus on different elements (Table 1).
ences are even more complicated because there is
a difference between the simple pleasure of an or-
Table 1. Lexicon of experience
dinary or mundane experience and the enjoyment Authors Year Experience
of an extraordinary or flow experience (Car, Maslow 1964 Peak experience
Cova 2003). For example flow experiences de- Holbrook,
scribe a form of intrinsic motivation and are char- 1982 Experiential aspects
Hirschman
acterized as states of intense concentration, focus, Csikszentmihalyi 1990 Flow experience
and absolute absorption in challenging activity Extraordinary
Arnould, Price 1993
(Csikszentmihalyi 1990). experience
Carbone and Haeckel claim to have launched Customer experience
Carbone, Haeckel 1994
the experience movement in 1994 (cited in Ty- engineering
nan, McKechnie 2009), but Holbrook and Hirsch- Distinct economic offer-
Pine, Gilmore 1998 ing, memorable, experi-
man wrote already in 1982 an iconic article on the
ence economy
consumption experience. Thus, almost 30 years
Schmitt 1999 Experiential marketing
ago marketing researchers discovered the impor-
tance of experiential aspects of consumer behav- Commercial
Poulsson, Kale 2004
iour. Holbrook and Hirschman (1982) developed a experience
Boswijk,Thijssen, Meaning
useful model contrasting the differences between 2005
Peelen experience
the information-processing (rational) and the expe- Tarssanen, Experience pyramid,
riential view (irrational). 2007
Kylnen personal change
Car and Cova (2003) confirm that the con-
cept of experience is still ill-defined and in the In summary, experience is a complex and lay-
field of marketing we must use a typology of ered construct. There are even more dimensions
consumption experiences which goes beyond an Carbone and Haeckel (1994) explain that experi-
ideological view where every experience is ex- ence may be good or bad, lasting or fleeting, a
traordinary. Their analysis showed that in the so- random phenomenon or an engineered percep-
cial sciences and philosophy experience is defined tion.
as a subjective episode in the construction/trans- An experience as a noun is something that af-
formation of the individual with, however, an em- fects the way you feel or knowledge or skill from
phasis on the emotions and senses. By experience doing, seeing or feeling things. An adjective ex-
Carbone and Haeckel (1994) mean the "takeaway" periential means based on experience. That stre-
impression formed by people's encounters with sses the importance of experience as a basis of the
products, services, and businesses a perception area.
produced when humans consolidate sensory in-
formation.
Tarssanen and Kylnen (2007) define experi- 3. Experiential marketing
ence as emotional experience that can lead to per- According to Schmitt, the initiator of experiential
sonal change, Pine and Gilmore (1999) as memo- marketing, the framework of experiential market-
rable events, and Pitknen and Tuohino (2006) as ing has two aspects: 1) five types of experiences,

481
MARKETING THEORY: EXPERIENCE MARKETING AND EXPERIENTIAL MARKETING

called strategic experiential modules (SEMs), 4. Experience marketing


which form the strategic underpinning of experien-
According to Leeflang (2011) one of the specific
tial marketing, and 2) experience providers (Ex-
topics that have not yet received enough attention
Pros), the tactical tools (Schmitt 1999b). Holbrook
is experience marketing.
(2000) criticizes Schmitt for positioning this rather
Experience marketing is generally based on
modest conceptual framework as a key strategic
experience economy theory. Pine and Gilmore
planning tool of experiential marketing. We stress
(1998) claim experiences to be the fourth eco-
that marketing planning tool is tactical, not strate-
nomic offering. They explain the progression of
gic. Experience marketing concept is based on ex-
value from commodities to experiences by show-
periences, not only on specific activities that are
ing how experiences differ from goods and ser-
experiential in nature.
vices (Table 2). Pine and Gilmore (1999, p. 12)
Car and Cova (2003) are critical towards
declare that while commodities are fungible,
American romanticism (Schmitt, Holbrook, Pine,
goods tangible, and services intangible, experi-
Gilmore, etc.) and confirm that this allowed Hol-
ences are memorable.
brook to propose the "logical sequence: romanti-
cism experiential consumption emotional Table 2. Economic distinctions (Source: adaptation of
responses pleasure, and to insist on the fact Pine and Gilmore (1998))
that in this experiential approach, sensations are Economic
more important than the consumers rational Goods Services Experiences
offering
thoughts. Economy Industrial Service Experience
Smilansky (2009) defines experiential market- Nature of
Tangible Intangible Memorable
ing as a process of identifying and satisfying cus- offering
tomer needs and aspirations profitably, engaging Key
Standardized Customized Personal
them through two-way communications that bring attribute
brand personalities to life and add value to the tar- Manu-
Seller Provider Stager
get audience. Experiential marketing helps to cre- facturer
ate experiences and emotions to the customers. In- Buyer User Client Guest
Factors of
ternational Experiential Marketing Association Features Benefits Sensations
demand
(2011) states that experiential marketing allows
customers to engage and interact with brands, prod-
ucts, and services in sensory ways. According to Experience economy (Exponomy) is of in-
You-Ming (2010), experiential marketing is a creasing focus. Although the concept was born in
communication method, which mainly raises cus- the business field in 1998, it has gone beyond its
tomers physical and emotional feelings. Hauser boundaries to tourism (Leighton 2007), retailing
(2007) describes experiential marketing as a holistic (Grewal et al. 2009; Verhoef et al. 2009), architec-
approach to the customer/brand relationship. ture, sports, branding (Brakus et al. 2009; Gentile
Cantone and Risitano (2011) confirm that et al. 2007), entertainment and arts (Petkus 2004),
many firms are adopting CEM strategies, in which urban planning, hospitality and other fields.
the role of emotions, feelings, sentiments, pas- Experience economy is also considered as a
sions and experiences are emphasized in con- main underpinning for customer experience man-
sumer-brand relationships. According to Yuan and agement (CEM). According to Schmitt (2003), the
Wu (2008), experiential marketing can be seen as term customer experience management repre-
a marketing tactic designed by a business to stage sents the discipline, methodology and/or process
the entire physical environment and the operation- used to comprehensively manage a customer's
al processes for its customers to experience. We cross-channel exposure, interaction and transaction
highlight that all these definitions indicate that ex- with a company, product, brand or service. CEM is
periential marketing is mainly related to emotions, more like a program (Cantone, Risitano 2011) or
feelings, and senses; and has less to do with cogni- schedule, based on five steps. The CEM strategies
tion and human intentions. impel the customers involvement at different lev-
When Schmitt (1999a) explains the idea of els (Gentile et al. 2007): rational, emotional, sen-
Pine and Gilmores (1998, 1999) experience econ- sorial, physical, and spiritual.
omy he uses the phrase experiential economy. It Walls et al. (2011) define consumer experi-
shows how those terms and words are used inter- ence as multidimensional takeaway impression
changeably. or outcome, based on the consumers willingness
and capacity to be affected and influenced by
physical and/or human interaction dimensions.

482
S. Same, J. Larimo

Experience marketing offers engaging, interac- the same time they use exactly the same definition
tive, and entertaining brand experiences. Brakus for experiential marketing.
et al. (2009) define brand experience as subjective,
internal consumer responses (sensations, feelings, 4.2. The difference between experience and
and cognitions) and behavioural responses evoked
experiential marketing
by brand-related stimuli that are part of a brands
design and identity, communications, and environ- The formation of experience marketing is a proc-
ments in which the brand is marketed or sold. ess from a stimulus up to a change in customer
Experience marketing is also related to con- behaviour, learning or attitude. Experiences occur
sumer behaviour theory. Consumer behaviour as a in response to some stimulation (Schmitt 1999a),
field has expanded to three dominant speciali- e.g. marketing mix. The stimulus can be interper-
zations (subfields): consumer information proce- sonal (between people) or intrapersonal (within a
ssing, consumer culture theory, and behavioural person); it can be marketing stimulus (e.g. 4P) or
decision theory (MacInnis, Folkes 2010). These environmental (e.g. economic, technological, cul-
subfields have all provided consumer insights on tural).
experiences. However, Schmitt (2010) regards that For its subjectivity experiences depend on the
also two other main marketing disciplines (mar- expectations and values of the customer (Tars-
keting strategy and marketing models) have also sanen, Kylnen 2007). Experience can involve a
contributed to experience marketing in addition to perception on which one builds his/her own state
consumer behaviour. of reality; a reality based on his/her interaction
According to Schmitt (2010) the key concepts with the environment (Fig. 1).
of experience marketing are: 1) experiential value,
2) different types of experiences, 3) the distinction
between ordinary and extraordinary experiences,
and 4) experience touchpoints. Consumer beha- Stimulus, Perception, Environ-
marketing mix values ment
viour and experience marketing fields are open to
adjoining disciplines, e.g. psychology, economics,
communications, sociology, anthropology, and Particular experience
Affection (what do you feel?)
culture. These fields may be useful to better under-
stand consumer behaviour and experience marke- Experiential marketing
ting.
Meaningful relationship Change
or satis-
4.1. Definition Life situation faction
To simplify, as the wording suggests, the focus in
experience marketing is on experience. The other Cognition
important components are the customer and ex- Affection Behav-
Conation iour
perience co-creation. Experience marketing can
create emotions by making entertainment for cus-
tomers, by allowing them to escape from the real- Meaningful experience
(what do you know, feel, want?) Value co-
ity, by educating them and giving them aesthetic
creation
objects or places to see (Pine, Gilmore 1999). Experience marketing
The diverse perspective and translations on ex-
perience has made it difficult to understand the con- Fig.1. The difference between experience and experien-
cept and also define experience marketing. There is tial marketing (Source: adaption of Leppiman, Same
no consensus today on what the term experience 2011)
marketing refers to, and the context in which it is
used. Lee et al. (2010) explain that experience mar- A customer creates meaning to all he/she per-
keting aims to request marketing staff to emphasize ceives. Experience represents a meaningful rela-
the overall experience quality for consumers passed tionship between a persons perceptional activity
by brands, including rational decision-making and and a life situation, and is of particular signifi-
sentimental consumption experience. Baron et al. cance to the person (Perttula 2007). When the cus-
(2009) define experience marketing as the creation tomer experiences something to be important, this
of a memorable episode based on a customers di- forms his/her life situations consisting of every-
rect personal participation or observation. But at thing he/she is in meaningful relationship (Leppi-
man, Same 2011). Experiences are formed out of

483
MARKETING THEORY: EXPERIENCE MARKETING AND EXPERIENTIAL MARKETING

these relationships and life situations. Fortezza and meaning), emotional response (emotional experi-
Pencarelli (2011) call it packaging moments of ence), and aesthetic pleasure (aesthetic experience).
life. These experiences influence value co-creation, pur-
Experiences may result in changes in attitude chase decisions and behaviour.
or behaviour. Customer attitude consists of three At the level of meaning, cognition comes into
components: cognitive (mental images, understand- play. Desmet and Hekkert (2007) confirm that
ing, interpretations), affective (feelings, emotions), contrary to popular belief, an emotion is the result
and conative (intentions, actions, behaviour). The of a cognitive, though often automatic and uncon-
most common sequence that takes place when an scious, process.
attitude forms is cognitive affective cona-
tive (Clow, Baack 2007). This sequence can form
a meaningful and relevant experience. Meaningful Offering or stimulus Elements
experience is composed of feelings, knowledge of experi-
and beliefs (Leppiman, Same 2011). Thus, mean- ence
Customer
ingful experience is broader than particular, which Value to
is mainly related to emotions and feelings, as seen customers
on Fig. 1. A holistic experiential feeling may lead Interaction Experience
to changes in personal opinions and attitudes of a and value Value to
customer. Fig. 1 highlights that the platform of co-creation, company
experience marketing is strategic and larger than (and
Company (brand, behaviour)
experiential marketing.
product, service)
Value to
4.3. Conceptual model of experience marketing society
Actions and
An experience is important in business and tech- processes Levels of
nology because to the mind every economic offer- experience
ing is experienced (Van Doorn 2006). Experience Context, (meaning, emo-
environment tional response,
is broadly speaking an interaction between a com- aesthetic pleasure)
pany (brand/product/service) and a customer. Ex- Marketing mix
perience is shaped by the characteristics of the
customer and those of the product, company or
Fig. 2. Conceptual model of experience marketing
brand. Desmet and Hekkert (2007) explain that
all actions and processes that are involved, such
as physical actions and perceptual and cognitive The ultimate outcome for the company is e.g.
processes (e.g. perceiving, exploring, using, re- sales, value added, loyalty, etc. There is also out-
membering, comparing, and understanding), will come for the customer and ultimately to society.
contribute to the experience. Tynan and McKechnie (2009) assert that experi-
Consumer behaviour is influenced by internal ence marketing can deliver sensory, emotional,
influences, e.g. demographics, personality, motiva- cognitive, behavioural and relational value to cus-
tion, knowledge, attitudes, beliefs, and feelings. The tomers, to which social and information based
behaviour is also influenced by external influences, value can be added.
e.g. culture, past experience, lifestyle, marketing In 2007 the American Marketing Association
mix. Psychological factors include individuals mo- adopted a new official definition of marketing
tivation, perception, attitude and belief, while per- (Keefe 2008): Marketing is the activity, set of
sonal factors include income level, personality, age, institutions, and processes for creating, communi-
occupation, lifestyle, etc. In addition, the experience cating, delivering, and exchanging offerings that
is always influenced by the context environment have value for customers, clients, partners, and
in which the interaction takes place. society at large. This definition also supports the
model.
The most important parts of the model (Fig. 2)
are: 1) offering or stimulus, 2) interaction between
the customer and company, 3) experience and 5. Discussion
value co-creation, 4) value. We believe these are
Experience marketing is more complex than the
the cornerstones of experience marketing.
traditional marketing of the post-industrial era
Hekkert (2006) distinguishes three levels of ex- (Fortezza, Pencarelli 2011). We claim to have ex-
perience: attribution of meaning (experience of perience-driven organizations, experience-oriented

484
S. Same, J. Larimo

strategy and experience-based activities using the the terms. Experience is an economic offering and
word experience, but still many authors use ex- an interaction between the company/brand/service,
periential marketing (for the whole approach) and customer, who perceive and meaningfully ex-
while knowing that everything is based on experi- perience it. Experience marketing is strategic (cus-
ences. As for parts of speech, experience is a tomer-centric) and holistic marketing of relevant
noun and a verb, while experiential is an adjec- (and meaningful) experiences that takes into ac-
tive. The companys marketing approach and ac- count the affective, cognitive and conative per-
tivities can be experiential in nature, but every- spectives of consumption experience. Experiential
thing is based on experience(s) or driven by marketing as a marketing planning tool is con-
experiences. The authors of this article recommend cerned on tactical and operational level actions
the wider use of the term experience marketing, where the main question is how to do marketing
because at the broadest level it is strategic market- (campaign) experientially.
ing, a field of study, a broader concept referring to Experience marketing is strategic marketing
the world of experiences. In this article the term management and is used to manage customer in-
strategic marketing is used in reference to the field teraction, cross-channel exposure, and value co-
of study and marketing strategy in reference to the creation. We found that experiential marketing
organizational strategy construct and the latter focuses on tactical and operational level actions
may be defined as organizations integrated pat- where the main question is how to do marketing
tern of decisions (Varadarajan 2010). experientially. To be successful, Poulsson and
Experiential marketing is part of experience Kale (2004) argue that a marketing experience
marketing. Experiential marketing is a tactical, should have personal relevance for the customer,
rather than a strategic approach that marketers be novel, offer an element of surprise, engender
should consider central to their integrated market- learning and engage the customer.
ing communications plans, including techniques, Fig. 1 presents the formation of experience
which are part of the core experience marketing marketing and should assist marketing profession-
strategy. Experiential marketing shows us the als to understand the difference between the terms.
ways how managers can create experiences Here are two important dimensions: experiential
(Schmitt 2003). Smilansky (2009) explains that marketing (connected to particular experience and
experiential strategy is the campaigns main con- affection) and experience marketing (connected to
cept. Through the best practices Smilansky (2009), meaningful experience; cognition, affection, and
Schmitt (2003), and other authors show how to conation). Our analysis of the literature leads us to
involve and engage the audience. conclude that experience marketing is more com-
We can conclude that experiential marketing is prehensive in scope and strategic in nature than
limited in scope, and more executive in nature, e.g. experiential marketing. Experience marketing is
it may consist of a single campaign or involve only holistic and seeks to understand the value of cus-
one media channel. The focus of experiential mar- tomer experiences and besides affective perspec-
keting is on specific business objectives, largely tives regards cognitive and conative perspectives.
on creating or modifying the environments in This observation is important in order to under-
which customers interact. Tactical decisions are stand the difference between the terms.
marketing mix decisions (e.g. promotion, commu- The conceptual model (Fig. 2) is a figurative
nication) and they define how the strategic deci- representation of the domain and thus attempts to
sions will be implemented (Varadarajan 2010). explain the essence of experience marketing. The
Everything marketers do is experiential at some model should assist marketing professionals to
level from the brand identity creation to the pack- understand the essence of experience marketing.
aging, store design, media communication, or Web The consensus on what does and does not
site. These are tactical decisions and activities. Ex- constitute experience marketing and what distin-
perience marketing is strategic marketing of experi- guishes it from other fields is far from clear. Fur-
ences (according to Pine and Gilmore (2002) the ther empirical research is needed to analyse the
experience is the marketing). Experiential market- specific dimensions of experience marketing and
ing helps to market experiences, answers the ques- explore the relationships between the elements.
tion how to do marketing experientially. More research is needed to fully understand the
experience construct and its impact on customers.
For example, according to Walls et al. (2011), ad-
6. Conclusions ditional exploration is needed to understand the
Drawing from the extant literature and considering relationship between experiences, emotions, cog-
all most relevant scientific contributions we define nition, and multisensory elements. Also openness

485
MARKETING THEORY: EXPERIENCE MARKETING AND EXPERIENTIAL MARKETING

to adjoining disciplines can add insights to experi- Experience Components that Co-create Value with
ence marketing. the Customer, European Management Journal
Finally, we proposed a conceptual model of 25(5): 395410.
experience marketing that should be tested empiri- http://dx.doi.org/10.1016/j.emj.2007.08.005
cally. Marketers need to understand the conceptual Gilmore, J. H.; Pine, B. I. 2002. Customer experience
framework and principles of experience market- places: the new offering frontier, Strategy and
Leadership 30(4): 411.
ing, because experience marketing is the only way
http://dx.doi.org/10.1108/10878570210435306
to gain competitive advantage in tough competi-
Grewal, D.; Levy, M.; Kumar, V. 2009. Customer ex-
tion. From the companys perspective it is useful perience management in Retailing: An organizing
as a differentiation strategy. Experience marketing framework, Journal of Retailing 85(1): 114.
can lead to greater impact for the customer, in- http://dx.doi.org/10.1016/j.jretai.2009.01.001
creased effectiveness, and even cost savings com- Hauser, E. 2007. Brandweek: Experiential Marketing,
pared to traditional marketing. in Experiential Marketing Forum. 26 July 2007.
Available from Internet:
http://ixma.org/articles/brandweek072607.pdf
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