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Keeping customers for life

Gone are the days when the customers were satisfied on only having the product they wanted
for need fulfillment. As they became more educated about their rights they started demanding
products to be presented to them in a manner they would like to buy. This gave rise to
competition not at product levels but at service levels (good salesmen, choice & variety, after
sales service etc.). The one who could give in the best service was the winner. It became a
tool for brand building which was used to attract & retain customer loyalty.

Today’s customer is more aware, educated, has access to various markets thanks to
liberalization & globalization, has innumerable brands to choose from and ready availability
of required information, thus making him more demanding. It has become increasingly
difficult to appeal to their desires

Due to global competition & lot of awareness about new products & services, there is no
more loyalty towards one brand. To reach today’s customer, a brand has to do more than
provide a functional benefit, and it has to satisfy emotional needs.

Something like Experiential Marketing

….taking the brand beyond the FOUR P’s.

Experiential Marketing is everywhere. Marketing techniques that focus on customers’

experiences are turning up in all kinds of venues – from packaging to television advertising to
retail stores to websites – for products as diverse as mobile phones, coffee, cars & consulting.

Experiential marketing has become a trend in US & Europe, & it is now reaching emergent
economies in Asia.

Keeping customers for life

"Marketing is a social and managerial process by which individuals and groups obtain what
they need and want through creating and exchanging products and value with others."
(Kotler & Armstrong 1987)

The mission of marketing is satisfying customer needs. That takes place in a social context.
In developed societies marketing is needed in order to satisfy the needs of society's members.
Industry is the tool of society to produce products for the satisfaction of needs.

There are broad and narrow definitions of marketing. Different types of approaches to
marketing are needed when analysing the possibilities to improve marketing.

The process of planning and executing the conception, pricing, promotion, and distribution
of ideas, goods, and services to create exchanges that satisfy individual and organizational

The Evolution of Marketing over the Years

1. Production Era

2. Sales Era

3. Marketing Era

4. Relationship Era

5. Experiential Marketing

As the markets changed from a sellers market to a buyers market, the marketing also emerged
with new and innovative techniques to attract more and more customers and to help the
company survive in the competitive environment.

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1. Production Era (Prior to 1920's)

A time period during which firms emphasized manufacturing or producing

products, usually at the expense of marketing strategy

Providing the best or highest quality service is assumed to be an automatic

guarantee of success (The Better Mousetrap Fallacy). Business philosophy stresses
efficiency in production to make a quality product.

Little is known about customers; research is not given a high priority.

Production oriented: make product and then sell it (Henry Ford). Henry Ford’s
assembly line, stressing standardization and specialization

“A good product sells itself”

“Build a better mouse trap and the world will beat a path to your door”

2. Sales Era (between 1925 & early 1950's)

Creative advertising and selling will overcome consumer resistance and convince
them to buy

Assumes that consumers will resist purchasing non-essential goods and services,
attitude towards marketing is that creative advertising and personal selling are
required in order to overcome resistance and convince customers to buy.

Selling was main focus of marketing

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3. Marketing Era (early 1950's to early 1990’s)

Arose out of conversion from sellers market to buyer’s market and lead to evolution
of marketing concept

The customer is king find a need and fill it

Seller’s market-characterized by shortage of goods and services, buyer’s market-

characterized by abundance of goods and services.

Emergence of the Marketing Concept


4. Relationship Era (Began in 1990’s)

Long-term, value added relationships developed over time with customers and

Supply Chain Management played a very important role in this period as it brought
the Suppliers, the Company and the Customers together.

Strategic Alliances: partnership that creates competitive advantages

5. Experiential Marketing

Experience marketing changes marketers' view about what they are selling. Until recently,
they saw experience as a means to an end: a better way to sell a product or service.
Increasingly, it's the other way round: the product or service as a means of selling the

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Era’s of Marketing



Production Prior to 1920’s “A good product will sell itself”


Sales Prior to 1950’s “Creative advertising and selling will

convince consumers’ to buy.”

Marketing Since 1950’s “The customer is king! Find a need and fill

Relationship Began in 1990’s “Long term relationship with customers and

other partners lead to success”

“Relationship marketing is now giving way to Experiential Marketing, where the

experience stems right from the pre-purchase stage, to using the product, to dumping the
used product.''

Keeping customers for life



"Traditional marketing was developed in response to the industrial age, not the information,
branding and communications revolution we are facing today." - Bernd Schmitt

Conventional or traditional marketing presents an engineering-driven, rational, analytical

view of customers, products and competition. It is based on a features and benefits approach.
In this (traditional) model, consumers are thought to go through a considered decision-
making process, where each of the features or characteristics of a particular product or
service are seen to convey certain benefits, and these are all assessed by the potential
purchaser (either consciously or unconsciously). However, this is far too limited a way of
viewing the purchase decision, with excessive emphasis on the rational and logical elements
of the decision, and not enough on the emotional and irrational aspects involved in the

But like all big "new" ideas, the idea of experience marketing is not new. Companies such as
Disney have been ploughing this furrow for decades. Airlines have struggled with its
application for years. So have marketers worrying about customer service and those moments
of truth, when customer meets company. But there is a difference. Traditionally, marketers
have accepted that grocery, clothes, transport and banking companies sell groceries, clothes,
transport, and financial services - and that the entertainments industry sells pleasurable

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Traditional Marketing v/s Experiential Marketing

Traditional Marketing Experiential Marketing

Meeting customers needs Experience stems right from the pre-

Significance profitably through the 4 P’s of purchase stage, to using the product, to
marketing mix dumping the used product.

Attribute selling Stimulation of the senses, heart and

Focus mind.
Performance Characteristics
Sensory, emotional, cognitive.

Ration decision makers Rational and emotional

Customers Need, search, evaluation, Entertained, stimulated, emotional and

purchase. creatively challenged

Analytical, quantitative and Methods are eclectic

Methods verbal
Brands need to relate to something the
consumer cares about

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Fundamentals of Product and Services


Products are 'tangible objects that exist in both time and space. It can be described as artifacts
that supply the consumer with benefits, noting that production is usually separated by time
and place from consumption.


Services 'consist solely of acts or process(es), and exist in time only' They are intangible (i.e.
they do not occupy space) and, as such, they cannot be possessed; they can only be
experienced, created or participated in. There is direct interactivity between supplier and
customer, and the process of production and consumption is simultaneous.

Product-Service mix or Product-Service combinations

The relationship between products and services is complex. In practice the provision of
services involves a number of tangible and intangible elements, while the supply of products
relies on the culmination of a long chain of services. Products and services are therefore
intimately and symbiotically linked.

The idea of service-less products or product-less services is thus flawed. In reality there is a
spectrum from product-dominant entities (e.g. salt) to service-dominant entities (e.g.
teaching). The configuration (quantity and quality) of products and services supplied to meet
the demand for well being may be described as a product-service mix or product-service

The line between products & services is fast eroding. What once appeared to be a rigid
polarity now has become a hybrid: the servicization of products & the productization of

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Core Benefit

Basic Product

Expected Product

Augmented Product

Potential Product

Five Product Levels

In planning its market offering, a marketer needs to think through 5 levels of the product.
Each level adds to more customer value.

1. The most fundamental level is the core benefit: the fundamental service or benefit that
the customer is really buying. This indicates that the core benefit is offered in
satisfying the need of the customer.

2. At the second level , the marketer has to turn the core benefit into a basic product- the
tangible offering.

Keeping customers for life

3. At the third level, the marketer prepares an expected product, a set of attributes &
conditions buyers normally expect when they purchase the product.

4. At the fourth level, the marketer prepares an augmented product that exceeds
customer expectations.

5. At the fifth level stands the potential product, which encompasses all the possible
augmentations & transformations the product might undergo in future. Here is where
companies search for new ways to satisfy customers & distinguish their offer.

The demarcation line between these levels is slowly blurring away. So what was expected
product becomes basic product after some time.

The basic product or service to satisfy the core need remaining the same, the rest of the levels
are now being serviced through intangible benefits. This has become the distinguishing
feature between competitors. The more innovatively they provide these benefits the better
they become with respect to competition

Servicization of products

Eg: The large corner drugstore that stocks thousands of products, from cosmetics to
wristwatches. The products are for sale, but the store is actually marketing a service- the
convenience of having so much variety collected & arrayed in one location.

Productization of services

Eg: The Airlines, Banks, Insurance companies are creating tangible events, repetitive &
predictable exercises, standard & customizable packages that are product services. A frequent
flier is a product service.

What customers want most from a product is often qualitative & intangible, it is the service
that is integral to the product. Service is not an event it is the process of creating a customer
environment of information, assurance & comfort. This ultimately results in building brand

Successful companies add benefits to their offering that not only satisfy customer but also
surprise & delight them. Delighting is a matter of exceeding expectations.

Keeping customers for life

The Latest Marketing Mantra

In the new e- economy, products are passé: what matters is the experience. In a properly
created experience, the product becomes an accessory.

Experiential marketing is a concept that has worked wonders for companies and brands such
as Nokia mobile phones, Singapore Airlines, Haagen Dazs’ Icecream, Nike, Harley-
Davidson, and Coca-Cola.

Experiential marketing seems to be everywhere - from consumer packaged goods to

industrial and high-tech products. Not willing to be left behind, Indian companies are
catching up. Companies are using this concept for many different purposes: attracting
customers, developing new products, communicating with customers, improving sales
relations, designing retail spaces, and building web sites. More and more, marketers are
moving away from traditional "features and benefits" marketing and turning to experiential

Experiential marketing is part of the much wider "experience industry." SRI Consulting
Business Intelligence (SRIC-BI) first explored the experience industry in 1985, when U.S.
consumers were showing signs of boredom with consumer goods and had begun to seek
gratification through experiences. The report defined experience as "virtually anything one
can do to or with one's mind." Activities that satisfied this criterion spanned a broad range of
sectors, including education, travel, and entertainment. SRIC-BI analysts have continued to
monitor the progress of the experience industry and have recently identified experiential
marketing as a key, emerging component.

Keeping customers for life

Experiential Marketing
Experiential marketing is everywhere. In a wide variety of markets; from consumer packaged
goods to industrial and high-tech products, companies are using experiential marketing for
many different purposes like developing new products, communicating with customers,
improving sales relations, designing retail spaces, and building web sites. More and more,
marketers are moving away from traditional "features and benefits" marketing and turning to
experiential marketing.

Experiential Marketing is a revolution in marketing that focuses on the experiences of

customers. It entails shifting the focus from the rational basis for product purchase like value
and economy to a more emotion-led approach that appeals to intellect, curiosity and self-

What is experiential marketing? To begin to answer this question, let's first look at what
experiences are.

Experiences are private events that happen to people in response to some kind of stimulus.
Experiences are the result of observing or participating in events--whether these events are
real or virtual. Such experiences involve the entire living being--our senses, feelings, intellect
and bodies. Experiences involve both the rational and the emotional side of human beings.

Experiential marketers focus on consumption. For example, experiential marketers do not

think about isolated product categories such as "shampoo," "shaving cream," or "blow dryer."
Instead, they think about the consumption situation of "grooming in the bathroom," or
"renting a movie" or "trading stocks on the internet" and ask themselves what goods and
services fit into this consumption situation. Then they explore how packaging, advertising,
web sites, service, and other elements of marketing can enhance this consumption experience.

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Developments in technology have pushed experiential marketing to the height of media

attention and extended the range of experiences available both to the mass market and to
individual levels. Through developments in smell technology, companies are providing
customers with a greater sensory experience. Computer-game players are enjoying an
increasingly immersive, virtual experience. On-land shopping is becoming a more exciting
destinational experience, as retailers seek to provide experiences—active and passive—to
entice customers.

Experiential Marketing aims to create an experience that forges a bond between brand and
consumer. Companies are incorporating experience into the marketing mix in a variety of

Sensory Experience

Companies are increasingly harnessing touch, taste, and smell to complement sight and sound
in their marketing messages. Research from the University College of Wales in the United
Kingdom indicates that visitors are far more likely to recollect an environment accurately if
they encounter its smells again than if they encounter other sensory reminders. British
Airways has capitalized on this finding by spraying its first-class and business lounges at
New York and London airports with the scent of meadow grass. Marks & Spencer, the
troubled U.K. clothes retailer, installed an in-store display of fresh grass when it launched its
natural toiletries range and saw sales of its new product line go up.

Virtual Experience

Although fully immersive virtual environments may be some years away, sight, sound, and
touch technologies have enabled simple virtual environments. Among the online retailers that
have successfully used such technology is Lands' End. The U.S. clothing company introduced
a three-dimensional body-scanning service in mid-1999. Customers in the United States are
able to create a virtual body image of themselves and try on clothes at the company's Web
site. The initiative has proved such a success that Lands' End plans to roll out the service in
Europe in the second half of 2001.

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Another company that has used a virtual experience to target customers is the U.K. video-
rental chain Blockbuster. Blockbuster posted an icon in Virtual Zones, a joint Internet venture
between and Thus (formerly Scottish Telecom). Visitors to the zone (who have
already established a personal avatar for use in the zone) can click on the icon to enter a
contest. Blockbuster monitors the avatars that click on the icon and builds up profiles of
potential customers.

Destinational Experience

Retail marketing is moving into a new era as consumers' perceptions of retail destinations
evolve. On-land retailers, seeking to lure customers away from the online market, are
changing the retail experience. High on their agenda is the creation of destinational
experiences, which not only prompt shoppers to consume more but change the chore of
shopping to a leisurely, fun activity. Their strategy may bring the retail experience around full
circle, with a return to the "good old days" when shopping was a pleasurable activity.

NikeTown, for example, entices customers to its store by providing interactive, fun
experiences. Volkswagen in Germany has created a themed "city" in which potential
customers can stay for a couple of days and experience the company's brand. Other
companies are breaking the mold of traditional retail experiences. U.K. mortgage bank Abbey
National, has joined forces with Costa Coffee and Carphone Warehouse to offer customers a
relaxing banking experience.

Keeping customers for life

Experiential Marketing Architecture

Strategic Planning

Media Aggregation

Evaluation & planning

Presence Marketing & on site


Sponsorship Selection

Contract Negotiation


Keeping customers for life

Key characteristics Experiential Marketing - Jack Morton

Experiential Marketing helps marketers understand the intimate side of marketing. It shows
how to relate to customers in new ways to meet their specific needs. The result is increased
customer loyalty. Following are some of the characteristics of Experiential Marketing


Top experiential destinations for both men and women are shopping malls, stores and local
fairs or other public events. Women are significantly more likely to prefer these venues than
men; conversely, younger men are more likely to prefer sports events.


Consumers on average are willing to spend up to 14 minutes participating in an experiential

event. Women are willing to spend more time at experiences sited in malls (14.9 minutes),
store events (14.7 minutes) and fairs and public events (13.9 minutes). Across all categories,
consumers will spend the least amount of time at “destination” events where there’s strong
competition for attention (an average of 6 to 7 minutes), such as concerts or sports events.
However, even this engagement timeframe is dramatically longer than the 30-second
attention spans of most traditional media.


Overall, the weekend is the preferred time to participate in a marketing experience; women
appear to prefer daytime, while men favor evenings.

Attending With Friends And Family:

Women are more likely to participate in events along with other people—approaching
experiential marketing as a social outing. Women say they will participate in event marketing
opportunities “with friends” (58%) or “with other family members” (64%). Men of all ages

Keeping customers for life

are significantly more willing to attend events alone and are far more interested in self-
directed experiences such as kiosks.


Consumers indicate a strong preference to participate in an experience with relatively small

groups of people (one to 25 people). Generation Y consumers are significantly more open to
larger scale events (25 to 50 people), and men are significantly more likely than women to
attend an event with more than 100 people.

Prior Knowledge:

Consumers overwhelmingly say they would be most likely to participate in marketing

experiences showcasing products they have heard of but never tried (70%), followed not so
closely by products they already use (50%) and products they have never heard of (47%).
This finding highlights the importance of integrating marketing efforts and creating broad
awareness-building campaigns before launching experiential marketing efforts.


Consumers confirm that experiential marketing programs geared towards activities they have
a genuine affinity for are more likely to generate positive brand response. Three out of every
four consumers say they are much or somewhat more likely to try a product following an
event marketing experience if that experience was associated with something they have a
positive affinity for.

“Dazzle their five senses, stimulate their minds and touch their hearts”

“Dazzle Their Five Senses, Stimulate Their Minds & Touch Their Hearts”

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Applications of Experiential Marketing

Experiential marketing is being used in a great variety of different markets and industries.

Some of the most successful companies have turned to experiential marketing. Experiential
marketing can be used effectively in many situations, for example

Turning around a declining trend

In the theatre world Prithvi has long been a respected name. However, theatre is something
that appeals to a very select audience, more so with today’s need for instant entertainment.
Given this scenario, Prithvi still manages to attract a sizeable audience because watching a
play at Prithvi is an experience in itself. With its famous café (esp. it’s Irish coffee) and
system of having the audience sit on the floor in a circle around the actors, Prithvi ensures
that the audience has “felt” and not merely watched the play.

Cinemax, the movie theatre in Mumbai came up when cable TV was a rage and consumers
preferred to watch movies in the comfort of their homes rather than spend heavily in theatres
on tickets as well as refreshments. Nevertheless, Cinemax succeeded in catching the fancy of
the consumers. What was surprising was they managed to do this inspite of the fact that
tickets and refreshments were priced at a premium to other theatres. How did Cinemax
manage this?

Cinemax was the first to introduce the Dolby Sound System. During intervals, a live band
played audience’s requests. The seats were plush, the picture several degrees clearer, and the
air conditioning actually worked! This appealed to the segment that Cinemax was targetting -
tweens, teens, the youth and the yuppies – who were looking for experiences and not simply

Differentiating a product from its competitors

Experiential marketing aids in differentiating a company’s products from that of its

competitors. It goes beyond the traditional 4 P’s and provides customers with unforgettable
experience and hence resulting in customer delight. The IMAX Theater was the first one with

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the dome theater, and lots of consumers don’t go to IMAX just for a movie but to have a feel
good experience which it provides. Music retail outlets such Planet M and cybercafes
promoted by Satyam, Sify.

Creating an image and identity for a brand

the railway venture into holidaying experience “ The Palace on Wheels”

Promoting innovations

it promotes innovation as company’s search for new and improved ways of attracting new
customers and retaining the existing customers. Café Coffee Day pioneered in coffee bar
concept in India, Qwickys’ which introduced the concept of fun coffee shops in the South

Inducing trial and promoting loyal consumption

retail outlets such as Shopper’s Stop, the test drive offer from Hyundai.

Experiential marketing is also especially relevant to multinational companies building global

brands. An article in Newsweek magazine recently highlighted the challenges of marketing
products to global markets and pointed to the solution that many companies have hit on: "the
folks at Gillette, Coke, and MasterCard call it 'experiential marketing.'"

The best example for this would be McDonalds, the fast food chain which is famous for its
QSCV (Quality-Service-Cleanliness-Value) equation that is constant the world over and for
the fun-filled, young ambience. For the foreseeable future, leveraging customer loyalty will
be the primary means by which the most competitive companies will break away from the
pack. The degree to which a company delivers a desirable customer experience will largely
determine its success in the global marketplace.

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The Strategic Framework

There are 2 key concepts for managing customer experiences -------SEMs and ExPros.

Experiential Marketing is about how marketers can create a wide variety of experiences for
customers. These different types of experiences SEMs, or Strategic Experiential Modules
because each experience has its own specific structure and management principles.

Let's use the Experiential Grid to explore some of the key strategic issues in managing
customer experiences. In the rows of the Experiential Grid, you can see the five SEMs; in the
columns are the experience providers or ExPro's.







The Experience Grid

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There can be 5 different SEMs.

1. SENSE: Experiences involve sensory perception through sight, sound, touch, taste &
smell (eg. Nokia with its stylish & colorful mobile phones).

2. FEEL: Experiences involve affecting inner feelings and emotions & presents
emotional brand symbols (eg. Mickey Mouse or Hello kitty).

3. THINK: Experiences are creative and cognitive. They appeal to the intellect. It is
often found in corporate advertising campaigns (eg. GE’s we bring good things to

4. ACT: Experiences involve the physical, and may incorporate individual actions and
lifestyles (eg. Nike).

5. RELATE: Experiences result from connecting with a reference group or culture. It

expands beyond individual’s personal, private feelings. Relate experiences are
especially important in a collectivist society like China, which is a proud nation that
values family & group relations.

How do managers construct these experiences for customers?

They use what I call "experience providers," or ExPros.

The obvious ExPros include communications, visual and verbal identity & signage, product
presence, and co-branding.

Other ExPros are spatial environments, electronic media such as web sites, and people. These
different communication elements need to be managed consistently (over time) & coherently.

It should be clear by now that experiential marketing is very different from traditional
"features and benefits" marketing. By focusing on sensory, affective, and cognitive
experiences, as well as actions and relations, marketers can create experiential brands that
connect with the real lives of real customers.

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Building hybrids and holistic experiences

We have seen the five types of experiences or SEMs (strategic experiential modules):
SENSE, FEEL, THINK, ACT, and RELATE. These experiences are the foundation of
experiential marketing.

But smart marketers don't stop here. These SEMs can be combined to make up Hybrid
Experiences--for example, experiences that combine SENSE, FEEL AND THINK, or ACT

When we combine all five SEMs, we come up with what is called as a Holistic Experience.
Sony and Volkswagen's New Beetle have created and managed. Holistic Experiences.

The Holistic Experience

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Taking a general example of Cars:

Cars have to be functional, but that’s not all.

It has to look nice to the individual or family customer - that is Sense.

Cars can be a sense of pride & thus invoke Feel.

Even national pride that is Relate ( as Indica Car produced by telco did initially).

They can also make people Think & affect their lifestyles. I.e Act

Such holistic appeals can be created for anything from commodities such as tea (think about
the packaging of tea & display in store; the atmosphere of the tea house etc) to household
products & fashion items like leather goods or clothing (ie every successful fashion brand has
experiential appeal).

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How to do it?

Strategic issues

Intensifying V/S Enriching V/S
Diffusion Simplifying


Broadening V/S Connecting V/S
Focusing Separating

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The Making of Holistic Approach

There are four key issues in constructing hybrid and holistic experiences. These involve the
intensity, breadth, depth, and linkage of experiences.

1. The intensity issue (Intensifying vs. Diffusing) concerns individual grid cells. Should the
experience be enhanced or diffused? Let's say you are Hallmark Cards, and you are
creating a FEEL experience during the Hallmark Hall of Fame by showing a FEEL
commercial. What exactly is the right level of intensity to get viewers to dab their eyes
and feel good about Hallmark, without overdoing it and coming across as tacky?

2. The breadth issue (Enriching vs. Simplifying) concerns the management across ExPros.
Should an organization enrich a given experience by adding additional ExPros that
provide the same experience, or simplify the experience by concentrating it into certain
ExPros. Again, imagine you are Hallmark. Should your retail stores be experiential FEEL
environments in order to enrich customer experience, or should you limit your FEEL
approach to the cards themselves?

3. The depth issue (Broadening vs. Focusing) concerns the management across SEMs.
Should the organization broaden its experiential appeal from experiences to holistic
experiences or should it stick to one single experience. That is as the card maker, should
you post animation cards on the web, & add Think to Feel.

4. Finally the linkage issue (Connecting vs. Separating) concerns the interrelations among
SEMs as well as ExPros. This is a segmentation issue, i.e. , the question is: one consistent
experience for everyone or different experiences for different segments?

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There many other strategic issues such as

Brand architecture ---- has to do with corporate branding, as well as sub-branding and co-
branding. Companies that follow a corporate branding strategy should identify
experiential qualities for the company as a whole, as Virgin or the Body Shop have done
so successfully. A corporation that has created strong stand-alone brand identities may
forego experiential corporate branding, but it needs to manage the experiential
components of its products & brands very closely. One company that does both—
experiential branding at the product & at the corporate level is Swatch, the Swiss
manufacturer of casual watches.

Product innovation --involves new product introductions, brand extensions, and

partnership strategies. Here the experiential marketing approach are driven by 3 factors:

The degree to which the new product & extension category enhances the experiential
image of the company or brand

The degree to which new products & brand extensions add new experiences that can
be leveraged in additional new products & further brand extensions; and

The degree to which they help in the creation of holistic experiences.

Global Experiential Branding--- involves issues of standardization vs. localization. It

raises a range of complex issues, including:

Do customers in different countries expect & appreciate the same type of experience?

Are there cultural differences in preferences for types of SEMs? For eg: do customers
in one nation prefer FEEL, in a second nation THINK, & in the third one RELATE?

How about specific experiences?

Are certain nations more attuned to aesthetics in SENSE, while others love

Do some like nationalistic RELATE appeals but others global appeals?

Do different EXPro executions appeal to different countries?

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Who does it?

Company examples

One of the most exciting new trends in experiential marketing has been in retail space, such
as Nike Town. The space of Niketowns suggest a gym or stadium, with turnstiles at the
entrance, or wooden floors reminiscent of a basketball court, and protective caging
surrounding equipment. And fully integrated into this space is the Nike swoosh.

Another great example of experiential marketing comes from Coca-Cola. This soft-drink
giant has made a strong entry into the Chinese market, where they have chosen an intensely
experiential approach for their product.

The Chinese name for "Coca-Cola" means "tastes good and makes you happy." In Shanghai,
"Coca Cola" outdoor displays are displayed all along Shanghai's famous shopping strip,
Nanjing Road.

Another area of great experiential marketing is in new technology products, such as mobile
phones, laptops and palmtops. The "road warrior" outfit, like I'm wearing here, is constantly
being updated through technological advances that create new experiences for customers.

Finally, in retail outlets and services, people are extremely important in providing
experiences to customers. In consumption situations, face-to-face interactions are the most
important cause of strong feelings.

A brilliant example is Victoria Gallegos, formerly a sales associate with the high-end fashion
designer Prada on Madison Avenue in New York. Victoria is an expert at creating powerful
and positive consumption experiences for her clients. At Prada, Victoria generated $2 million
in annual sales--a figure way above the industry average.

It is not necessary to limit the experiential marketing to a retail store or to one particular
location. Experiential marketing can also be practiced without having a retail outlet or a store.
It can be added to company’s advertising, Brand promotion or just by adding the SEM’s to
the 4 P’s of marketing.

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Positioning the Experiential Brand….

….through packaging

In the era of new found requirements of the customer, positioning is more important than ever
to brands, and therefore the visual and verbal expression of the brand is strategic work.
Strong brands sometimes even build a culture. Disney, Nickelodeon, Starbucks, and many
brands successfully form a culture around their brand. Understanding the way identity
impacts the way customers sense, feel, think about, relate to, and act with their brand is
salient to the ongoing supremacy these products enjoy.

Lets see the current trends in package design, and how does experiential marketing fit in.

The experience of the brand often begins with the package design. An attractive profile
and graphic design at the point of purchase are the first step in engaging a consumer.We then
must provide nuanced details and textures which the consumer discovers in picking up the
product. We call this the "in-hand" experience.

Many leading packaged goods companies have long recognized that package design is a
strategic issue in their communication program. A package design has a very specific
mission. It must present an attitude consistent with the brand's aspirational character and it
must disseminate information in a hierarchical context that facilitates the purchase. New
assumptions in brand identity development, however, suggest that we must more fully
address the total experiential presence of the brand in the consumer's life. A skin care
product and its package, for instance, are seen in a sensory context to include the visual
experience, the tactile experience, and in the dispensing of the product how the fragrance is
experienced. Attention to detail in the carton, the bottle itself, and the presentation of the
entire landscape of products at the point of purchase are all part of brand building today via

Keeping customers for life

Package design can no longer be a stand-alone item in a brand's communication

program. In-store merchandising and packaging are still central to the brand equation.
Increasingly direct-to-consumer vehicles are fundamental to building great brands. Mass
media is still important, but increasingly interactive media are providing new and potentially
more personal exposures for brands. The new assumptions about brand identity require that
we consider brand identity as an asset we "bank" in a visual database. We then enable
deployment across media and geography. Packaging, in many ways, remains the most iconic
representation of the brand, but it must now be part of a larger brand identity franchise.

Keeping customers for life

Brand Building Experiences …

Providing extensive information, especially using media advertising, cannot duplicate the
impact of customers’ personal experience with a brand.

The experiences create a relationship that goes beyond the loyalty generated by any objective
assessment of a brand’s value.

The following instances will give an idea of the kind of experience marketing actually taking
place in the world.

Cadbury’s Theme park in Bournville, England

Cadbury has taken what was once a simple chocolate-factory tour & turned it into a theme
park journey through the history of chocolate & the history of Cadbury- complete with a
museum, a restaurant, a partial tour of the packaging plant, & a “chocolate event” store.
Visitors are greeted & entertained, they learn about the origin of cocoa & chocolate, the life
of the Mayan & Aztec Indians, how chocolate reached Europe, & how John Cadbury’s
empire began & grew.

The company invested 5.8 million pounds to build this Cadbury World in 1990. For visitors,
the Cadbury brand became something more than the product.—the theme park offers
hundreds of opportunities to sample the company’s extensive line of chocolates products.

Thus Cadbury World vividly links the taste experience to the brand’s history. This idea
contributed to 1996 naming of the Cadbury as the most admired company in the UK.

Cadbury World has proved that an entertaining, heritage-linked experience can be a

cornerstone of brand building.

Keeping customers for life

Nestle’s Casa Buitoni Club

Nestle’s Buitoni is a 169 year old Italian pasta company & brand. In 1991, it proposed a way
to build a base of loyal Buitoni customers: the Casa Buitoni Club.

Nestle’s strategy was that Buitoni would become a helpful authority on Italian food- a brand
& company to which consumers could turn fore advice on the many varieties of pasta & their

The first stage of the Buitoni marketing effort, was designed to strengthen brand awareness &
create a core database of consumers interested in

getting involved in Italian cooking. Buitoni gave free recipe booklets to anyone who
responded to its offers. Other brand support in that initial stage included in-store sampling,
sponsorship, a road show with many sampling activities etc. The integrated communications
campaign with a tag line Share the Italian Love of Food resulted in a database of more than
2,00,000 consumers.

Then later the households in the database were invited to join the Casa Buitoni Club. Those
responding received an Italian-lifestyle information packet & a full color quarterly newsletter,
pasta recipes & discount vouchers. Membership benefits also included a toll-free number for
anyone wanting cooking advice or suggestions. In addition there were sweepstakes, gourmet-
cooking weekends, the opportunity to sample new product, merchandise offered against proof
of purchase & suggestions on planning pasta feasts.

Thus there is brand building power in getting the customer involved in a larger experience
when using a product.

Keeping customers for life

Experiential Marketing: A Brand Leaders’ View

The buzz about experiential marketing has been rising at a steady pace since the mid- to late-
1990s. The buzz is now practically deafening. Below, a selection of articles published in
September 2003 on the topic of experiential marketing reveals that this leading-edge strategy
to build brands and stimulate sales just keeps growing in importance and impact.

“Companies that focus on customer experience are among the most successful and profitable
organizations.” (Business Line)

“Companies spent the 20th century managing efficiencies. They must spend the 21st century
managing experiences.” (Evening News)

“71% of senior executives in the US and UK agree that the customer experience is the next
big battleground.” (NZ Marketing)

“The steady growth of experiential activity is one of the key trends of below-the-line
marketing, with a recent survey highlighting the importance to marketers of the concept of
brand experience. Nearly 70% said it was relevant or highly relevant to their sector…”

“Clients are looking for short-term delivery of results [and asking for] an effect on sales
within eight weeks. ‘Face-to-face can turn things around that quickly and show impact on a
short-term basis.” (Marketing)

“Experiential branding is not just about attracting attention. It is also about making a brand
as deeply relevant to the customer at that moment-of-truth as possible.” (Brand Strategy)

“In 1985, a commercial on peak-time TV could have reached over 40% of the population.
Today the same commercial would only reach 15%.” (NZ Marketing)

“In the future, experiential marketing will create the emotional link to brands. Television will
remind people the brand exists. Other media will drive sales.” (NZ Marketing)

“People really do want to squeeze the Charmin. And the better the experience, the more often
people will want to repeat it.” (The Detroit News)

Keeping customers for life

10 rules to create and manage experiential brands

-By Bernd Schmitt.

1. Experiences don't just happen; they need to be planned - In that planning process, be
creative; use surprise, intrigue and, at times, provocation. Shake things up.

2. Think about the customer experience first - and then about the functional features and
benefits of your brand.

3. Be obsessive about the details of the experience - Traditional satisfaction models are
missing the sensory, gut-feel, brain blasting, all-body, all-feeling, all-mind "EJ" experience.
(EJ=Exultant Jubilate.) Let the customer delight in exultant jubilation!

4. Find the "duck" for your brand - More than five years ago, When Bernd Schmitt stayed for
the first time in the Conrad Hotel in Hong Kong. In the
bathroom on the rim of the bathtub they had placed a bright
yellow rubber duck with a red mouth. Bernd Schmitt fell in love
with the idea (and the duck) immediately. This little duck has
become part of his life; He mentioned it in his speeches. They
have really struck a chord with this little duck. It's the one thing
that Bernd Schmitt would always remember when he thought
about the hotel -- and it becomes the starting point of remembering the entire hotel
experience. The lesson here? Every company needs to have a duck for its brand. That is, a
little element that triggers, frames, summarizes, stylizes the experience.

5. Think consumption situation, not product - That is, "grooming in the bathroom," not
"razor." "Casual meal," not "hot dog." "Travel," not "transportation." Move along the socio-

6. Strive for "holistic experiences" - that dazzle the senses, appeal to the heart, challenge the
intellect, are relevant to people's lifestyles and provide relational, i.e., social identity appeal.

Keeping customers for life

7. Profile and track experiential impact with the Experiential Grid - Profile different types of
experiences (SENSE, FEEL, THINK, ACT, and RELATE) across experience providers
(logos, ads, packaging, advertising, web sites etc.)

8. Use methodologies eclectically - Some methods may be quantitative (questionnaire

analyses or log it); others qualitative (a day in the life of the customer). Some may be verbal
(focus group); others visual (digital camera techniques). Some may be conducted in artificial
lab settings; others in pubs or cafes. Anything goes! Be explorative and creative, and worry
about reliability, validity and methodological sophistication later.

9. Consider how the experience changes - when extending the brand into new categories,
onto the web, around the globe. Ask yourself how the brand be leveraged in a new category,
in an electronic medium, in a different culture through experiential strategies.

10. Add dynamism and "Dionysianism" to your company and brand - Most organization and
brand owners are too timid, too slow, and too bureaucratic. The term "Dionysian" is
associated with the ecstatic, the passionate, the creative. Let this spirit breathe in your
organization, and watch how things change.

Keeping customers for life

Need for Experiential Marketing - The New Indian Consumer

Today the Indian consumer is simply not what she was earlier. Then, she did not have a
choice. If she had a choice, she did not buy Indian products, after all why buy Indian when
you can buy better quality ‘imported goods’? Now, the average Indian has a choice and
what’s more she expects value for her money -and if you don’t give it to her she’ll simply
find it elsewhere.

Consumers have now moved beyond quality and satisfaction to talk about the entire
experience. It’s a much more extended notion of satisfaction. They want good value, but they
also want to be entertained, stimulated, emotionally affected, and creatively challenged.

In this era of intense competition and globalization, where every organization, big and small,
is vying for a slice of the market and the mind, traditional product attributes like cost and
quality are easily replicated. Consider what happened to one of HLL’s largest selling brands,
Fair & Lovely – CavinKare easily replicated the product by launching FairEver and made a
huge dent in HLL’s armour. A brand must therefore face the challenge of information
overload; the new price-value equation where it is not just the tangible and intangible benefits
but also the overall experience that will drive the purchase decision; and enormous
investment in the brand process, not in terms of valuation of shares, but in terms of brand

Providing experience does not mean creating a big bang event or even a series of small ones
for products that are low key or even those that are not at all high-involvement, its still
possible to get the customer to spend time & energy with the brand. Take packaging: how a
product come to a consumer can be very good experience. Lots of products come in packages
that are engaging perhaps in unwrapping or in reading information on the package.

Keeping customers for life

Experiential Marketing in India

As brand strategist Shombit Sengupta observes, “In India there is hardly any culture for
branding… Indian companies have immense latent talent “

Experiential Marketing has to play a key role in brand building initiatives in Indian
corporations. It is a key approach for bringing latent value to the fore.

Many Indian organizations have now started giving way to the experience part of their
marketing efforts. Compared to the corporations in the West who are far ahead than us in this
regard we have a long way to go & also most of the things to be learnt

Lets look at few companies in India trying to bring experience to the fore.


On the Ahmedabad- Gandhinagar highway seeks to take you back to your roots. The entire
ambience is like a village – mud walls, food served in earthen vessels to customers sitting on
the mud floors, stewards dressed like typical villagers, and a well thrown in for added effect.
In fact, the only thing modern about Vishala is the prices! Customers flock to this restaurant
and it is actually a MUST-SEE for foreigners.

What’s so great about Vishala? Is it the impeccable service, the quality of the offering or the
so- called upmarket tag? Not really, after all in a city like Ahmedabad there are innumerable
restaurants offering these and much more. Inspite of this, people are willing to drive down
from the city, never mind the far-flung location. In the Jet Age, where every minute counts
why would anyone drive miles to “simply eat? Because Vishala is not about “eating”; Vishala
is an experience, which you will savor long after it’s over.

Keeping customers for life

Planet M

In order to differentiate itself from competitors, Times group came up with the idea of Planet
M. It is not just a retail music store but an experience in itself. It provides the customers with
a wide variety in terms of Audio cassettes, CD Roms, Educational CDs etc.

A lot of promotional events are conducted every now & then to entertain customers. New
album launches, Celebrity signatory events, dance or singing contests for audiences, inviting
new budding talents for shows etc. There is a separate DJ mix counter available where people
can demand their request to be played at a nominal charge. A small stage is provided for
anyone who wishes to dance. There are music boxes everywhere around to let people enjoy
the music before buying. TVs are hung around with latest song clippings.

All this provisions are made not with extra cost to the purchaser.

Even if you don’t buy anything you can spend time without being disturbed by the in store
salespeople. All in all it is just a wonderful experience to be there at Planet M.

Keeping customers for life

Shoppers Stop

The popular chain of departmental stores in India promoted by the Raheja Group is an
organization attempting to give the customer a full-fledged shopping experience It
advertising punch line is – Feel the experience while you shop

It is a very spacious store with merchandise arranged in different sections say male, ladies &
kids. The customer can pick up the merchandise, feel it try it & then decide to buy. There is
no interference from the sales people. The customer is given enough space & time to make
his choice.

It also runs promotional events & contests for engaging the customer while he is shopping.
The recent one was – Buy & Fly to 7 Wonders of the world. For this the store was decorated
with miniature replicas of the 7 wonders & antiques from different parts of the world. The
customer thoroughly enjoys this experience while gaining some information.

Thus even if it a little expensive, people looking for something more than just the product
prefer to shop at Shoppers Stop.

At Shoppers Stop it is not just --Buying but enjoying while buying.

Keeping customers for life

Club HP

Can you imagine that even a very low involvement commodity like petrol can also move
towards providing an experiential environment? Yes this is happening in India.

It started with having super markets at petrol pump stations where people could purchase
small consumer items like snacks, chocolates, soft drinks.

Now India’s very own Hindustan Petroleum has promoted the idea of Club HP for its retail
distribution. The big box which indicates the level of petrol filled (digital Amount &
quantity) has the lower part which is a empty space ie. a waste, so now all the HP Petrol
Pump Stations will store consumer items in these empty boxes, like soft drinks, chocolates,
spare parts, snacks etc.. so the next time you go to the HP pump, do not forget to have a look
at the merchandise just below the indicating machine

Now the petrol pump is no more only a routine gas filling station but a more interesting place
to be.

Keeping customers for life

Entertainment experience - Hungama

Among those who have used the concept of experiential marketing in a big way in India is
Hungama which conceptualised and executed a number of integrated promotion plans and
also managed to get visibility and retention value for their products. Of Hungama's numerous
promotions, those that stand out in recent memory include the SMS contests for Hollywood
movies like Tomb Raider 2 and 2Fast 2Furious.

Another turnkey integrated plan took shape when movie, mobile, Internet and coke came
together to create a special promo for Bollywood movie Kuch Na Kaho where a movie zone
was created on Reliance India Mobile's (RIM) R World service. The movie zone offered a
contest sponsored by Coca-Cola where a select number of RIM consumers could win a
chance to spend an evening with Bollywood's numero uno actress, Aishwarya Rai. Hungama,
which created the site, claims that it received over 30,000 hits within two hours of activation.

Though experiential marketing has been more visible

in entertainment, it is not restricted to just that.
Financial institutions are jumping into the fray as well.
Western Union Money Transfer and Ramesh Sippy
Productions got Hungama to do an 'In Film' branding
for the movie Kuch Na Kaho along with promoting the
film on its website.

The Promotions and Marketing Awards for Asia (PMAA) held in Singapore in July 2003
recognised the emergence of this concept in its various award categories where Hungama
bagged the Gold for Best Multi-disciplined Promotion Campaign and Best Use of New
Media, and a Silver for Best Marketing Campaign (for using Movies & Sport as a discipline).

Again at the All India Promo Awards held in New Delhi on 10 September 2003, Hungama
bagged the Best Event Award for SPEED Run 2003 which was a motor sport event for the
promotion of Bharat Petroleum's hi-performance hi-octane petrol, Speed. Also, at the
prestigious Abby Gold awards 2003 held in Mumbai, Hungama was the youngest agency to
bag two Abby Gold awards in Digital marketing.

Keeping customers for life

Advertising for Experiential Marketing

Today, a brand's ultimate duty is not `need fulfillment', but `experience satisfaction'.

If an organization in involved in providing experiential product to the customer, the

advertising also should take the emotional platform to make it concurrent in the entire brand
building efforts.

Take for instance the following

The concept of Experiential marketing has been best exploited by Maruti Esteem in its
advertising. Consider the child who is scared that his father will pull him up for poor results
and therefore wants him inside the car at any cost. The child is confident, probably from his
father’s past behavior, that “Dad’s always in a good mood when he’s driving his Maruti
Esteem” and that the experience of driving the car is one he enjoys.

Maruti especially has been ‘forced’ by market conditions to pull up it’s socks because new
entrants like Hyundai and Daewoo started marketing experiences and not cars, by allowing
customers test drives.

The McDonalds advertisement showing a small kid who fails to recite poetry at a school
event can do it confidently at McDonalds This emotional ad indicated the kind of
environment provided by McDonald outlets that allows people to express themselves It really
shows the emotional relationship McDonald tries to build with its customers.

Its second ad where this family shifts to another place &the kids feel that they will miss
McDonalds are shown smiling at finding out the Mc outlet when he opens the window in the
new apartment also tries to relate the brand with the kid.

Keeping customers for life

Environments are an important source of customer stimulation and providing positive

What are Experience Worlds?

Experience worlds are specific worlds (stages) which produce complex connections in a three
dimensional way. The visitors to those worlds can actively tour through these worlds and
have new experiences in a playful way. The reason to produce those worlds is not to
entertain customers; it is to integrate them into an experience. Therefore customers will be
addressed through all five senses. The use of several stimuli like sound, text, pictures, etc.
makes it possible to send the same message in multiple ways and therefore make the
experience more effective.

How Experience Worlds Influence Customers?

The perception and effects of the environment are less controlled from cognitive processes.
The environment influences the customer’s behavior with emotional reactions. According to
Mehrabin (an environmental psychologist) we have the following framework: ‘‘A definite
environment causes a certain emotional reaction from a human being. This reaction causes
the human being to get closer to or stay further away from this environment.’’ An
environment, which is rare, strange, or surprising, is compared to environments without these
qualities and recognized as more stimulating. The level of customer excitement (activation)
depends on the degree of this recognized stimulation. How can we produce situations, which
are perceived as an experience? In other words: How can we stage experiences? These
questions will be addressed in the next chapter.

Keeping customers for life

Experience: More than Entertainment, an Additional Framework

As already mentioned, staging experiences is not about entertaining customers; it’s about
engaging them. It’s not only connecting entertainment and experience to gain an added value.
There are other factors, which create experience. And they differ in their uses and how
customers perceive them. Pine and Gilmor developed a useful framework (experience realms)
that describes different experience factors and how they work and interact. They describe two
main dimensions: customer participation and the connection or environmental relationship.
These dimensions are reflected in the two axes of Figure given below.


Entertainment Educational
Passive Participation Active Participation
Esthetic Escapist


Keeping customers for life

On the left side of the X-axis, we have ‘‘passive participation,’’ meaning a customer is not
directly affecting or influencing the performance. This happens when you watch a TV show
or a drama in the theatre. On the opposite side, we have ‘‘active participation’’ meaning
customers are directly influencing the performance that yields the experience. This happens
when you are playing football on a team, or when you play a videogame. On the Y-axis, we
have absorption, which means occupying a customer’s attention by bringing the experience
into his mind, e.g. watching a movie. Immersion means becoming physically (or virtually) a
part of the experience itself, e.g. playing an action game like Quake.

Connecting these dimensions defines the four areas of experience:

Estheticism and

Entertainment is described as passively absorbed through senses, like viewing a

performance, listening to music, or reading for pleasure.

With education experience, a guest absorbs the event unfolding before him while actively
participating. To increase the knowledge and/or skills of the customer, events must engage
his mind and/or body in the case of physical training. Think of edutainment programs like
ADDI, which teaches children in math, or explorative technical museums where you can
interact with physical phenomenon.

Escapist experience involves much higher immersion than all other categories. In this
framework, you can see that it is the direct polar opposite of pure entertainment. A participant
in an escapist experience is completely immersed in it ----- an actively involved participant.
Environments, which meet this demand, are theme parks, casinos, virtual reality headsets,
massive multi-user games, or even chat rooms. The individual becomes an actor, able to
affect the actual performance.

Keeping customers for life

In esthetic experiences, customers immerse themselves in an event or environment but

remain passive, in and leave the environment untouched. For example, sitting in a Starbuck’s
café enjoying the pictures on the wall or visiting a museum.

Customers in an educational experience want to learn, in a escapist experience want to do, in

an entertainment experience want to “sense”, in an esthetic experience just want to be there.

If we combine this framework with the results from the activation theory described in the
chapter ‘‘What Makes Humans Buy?’’ the escapist should be the highest activated customer
and therefore most open to receive and process messages, and act. If we look on the
dimensions separately, this is definitely the case. But the power of this model lies in the
combination of all four dimensions. If you see the framework as a telescopic sight, you create
the best customer experience when you meet him in the center of the model.
This results in high customer activation. We create customer experiences through combining the four
dimensions. Of course it’s not always possible to implement all four dimensions, but we should try to make the
customer experience as rich as possible.

Keeping customers for life

Case of Cutting Edge Experience – Walt Disney

Walt Disney was a genius that first explored the power of combining different experiences,
and realized it in Disneyland (1955), and in the end of the 1970s in Disney World, the first
theme park in the world. The original idea was to create an amusement park ‘‘like a cartoon
which immerses the audience’’. This approach resulted in a consistent orchestration of theme
rides like the Peter Pan flight within themed areas such as Fantasyland and Frontierland.

The following statement from Walt Disney convinced the investors to make his vision real.
‘‘It will be a place for people to find happiness [e.g. through entertainment] and knowledge. It
will be a place for parents and children to share pleasant times [esthetic] in another company:
a place for teachers and pupils to discover greater ways of understanding [education] and

Here the older generation can recapture the nostalgia of days gone by, and the younger
generation can savor the challenge of the future [escapist].’’

Using all four dimensions of experience realms framework created a sustainable success. But
even Disney’s imagination would have been stretched to envision just how far and wide the
legacy of his creation would spread. In 2000 the whole theme park market worldwide was
worth $13.8 billion. From 1990 to 2000 there was an increase of theme parks from 225 to
340, representing a growth of 51%. In 1990, global admissions totaled 300 million; in 2000,
545 million visits were made to theme parks, which is an increase of 82 %. The following is
another successful example of using experiences to attract customers.

Keeping customers for life

The Virtualization of Experience Worlds: ‘‘What is the Matrix?’’

In the definition of experience, one part of it says: Experiences often result from direct
observation and/or participating in the event --- whether they are real, dreamlike or virtual. It
is already mentioned as observation (Entertainment) and participation (Escape and Educate),
but not the notion of ‘‘virtual’’. What does virtual mean? Is there something like virtual
experience worlds and can they influence customer behavior in the same way as real worlds?

What is Virtual? What is Virtual Reality?

Virtual: says: In general, virtual means the quality of affecting something without actually
being that something.

The Langenscheid dictionary gives the following definitions:

Virtual means only imaginary, seeming, or an apparent creation of not catchable picture.
Virtual refers simply to something that exists, but is not real.

In the movie, ‘‘The Matrix,’’ people experience living in a normal world, but there is no
normal world at all (see the description of the movie in the next chapter). If we think about
virtual experience worlds, one key topic, which immediately comes up, is virtual reality

Keeping customers for life

Virtual Reality (VR):

Virtual reality is the simulation of a real or imagined environment that can be experienced
visually in the three dimensions of width, height, and depth and that may additionally provide
an interactive experience visually in full real-time motion with sound and possibly with
tactile and other forms of feedback. Virtual reality can be divided into:
The simulation of real environments such as the interior of a building or a car often with
the purpose of training or education.
The development of an imagined environment, typically for a game or educational
adventure (2002, whatis?com).

There is fast development in the virtual reality area --- accessories for home video game
systems, arcade machines, and even VR theme parks. Using virtual reality, we can explore
distant places easily, enter dangerous environments safely, and experience past, future and
fictional worlds from the comfort of our homes and offices. This may create a future in which
there still is a Disney and we still pay $30, but there is no Land. The simulation of the reality
[in the sense of indirect environment experience???] will be characterized by a three
dimensional appearance, a multiple sensory attraction, and the possibility of walking through
this environment. In the near future, it will be possible to integrate scent and haptic stimuli.

‘‘The Matrix’’, shows a virtually experienced world perfectly. Humans live in a normal
world, they go working, make friends, love and die in the same way we do, but they only
think they live in a normal world. In reality, they are prisoners of a computer program, the
Matrix that simulates the world. These humans are damned to live in little boxes only
‘‘dreaming’’ their lives. The only reason for their existence is that they produce energy
(through living) for the ruling class of machines. Within the Matrix, there is no real life,
everything is virtual, but humans perceive it as real. Of course, this is a Hollywood
exaggeration, but it shows you the possibilities of the near future.
Five years ago we would met our banker once every week. We had to fill in transfer orders,
change standing orders, and buy and trade stocks. To do it we had to go to the bank
physically. Today we see our banker once a year, and thanks to the Internet, we can do all
financial transactions from home via my computer. This saves our time, and the bank a lot of

Keeping customers for life

Another example: How many letters did we write and post five years ago? And how many do
we write and post today? E-mail has replaced the process of writing letters, buying stamps
and bringing the letter to the post office. This development is killing the letter delivery
business. These examples show that humans are willing to accept virtual environments.

Are these examples of VR? Of course, we don’t have three dimensions, but we have a
complete virtualization of a real environment.

I would like to broaden the above definition. In my opinion it is not always necessary to
visualize the real world like it is. There are many cases where it would be a disadvantage to
try to do that. In this sense, each website is a piece of VR.

At least it is a virtual world.

Comparison of Consumer Behavior in Real and in Virtual Worlds

As already mentioned people are actively searching for new experiences whether they are
real or virtual. The interesting point for human beings in the differentiation between real and
virtual is the degree of fun and excitement the specific experience can deliver. If you compare
the possibilities to have consumer experience in real or virtual world we can summarize as
follows: The more consumer experiences are stored in the longer term the more the sources
of experiences blur. From this key finding, Peter Weinberg concludes that the explanation of
consumer behavior in virtual worlds adheres to the same principles as in the real world.

Keeping customers for life

Virtual Experience Worlds: a Broader View

‘‘Entertainment enjoys a far more expansive definition in online media than it has historically
in off-line media. Consumers instinctively cited portals, auctions, news, and file sharing as
favorite entertainment (experience) destinations in a survey. Successful online entertainment
programming encourages consumer participation, cultivates obsession, and thrives on hyper-
dynamic updates.’’ In the sense of Pine and Gilmor, I would suggest replacing the word
entertainment with the word experience. The task in this chapter is to give you a general
overview of how to create compelling online experiences. Here I will not talk about fancy VR
environments with head mounted displays. Rather, I will discuss what I call flat screen
applications like ecommerce solutions, communication based applications and information
platforms, all types of virtual experience.

Keeping customers for life

The mission statement:

"To be the best Café chain in the country by offering a world-class coffee
experience at affordable prices."

Keeping customers for life

The Coffee Experience

Let’s use coffee to simplify the economics of what we call the "experiential marketing
phenomenon" and to illustrate the four stages.

The "commodity" version would be the ordinary ground coffee in a can that costs about 10
cents a cup. It ruled in the old days, but now it is off age people don’t prefer that very much.

Whole coffee beans, ground yourself at the grocery store, are fresher, taste better and smell
great. For that added value, the "goods" cost more than twice as much.

Research on coffee says that two out of three cups of coffee currently consumed are not
home-brewed. They're bought at a "service" establishment. So 7-11 will buy the fresh beans
at 25 cents a cup, sell the steaming hot coffee for 75 cents a cup, and you're happy to pay for
the convenience.

Now here comes the coffee "experience." People are almost religious about Starbuck's, and
they don't think twice about paying $3 for a cup of coffee. Why? It's the look of the shop, the
feel of the cups, the jazz music, and the barristas who know their beans. The coffee is just a
prop, and the service the stage on which to create the coffee-drinking experience.

The core competency for

Commodities companies is extracting

Goods companies - Creating features

Service companies - Delivering benefits.

Starbuck's has entire divisions of people who do nothing but manage the experience.
That's a core competency of the company. It's the thing the company does well.

Keeping customers for life


Few years before when somebody spoke about a coffee shop the first thing that came to my
mind was Central perk - the coffee shop we got to see in Friends (Sitcom from US) but today
the scenario has changed, thanks to Café Coffee day. Central perk is no where near my mind
when people talk about a coffee shop.

A pioneer of the coffee Bar concept in India, Café Cofee Day was first started in Bangalore at
present it operates 91 cafes across 15 cities. Besides coffee both hot and cold the menu offers
cool drinks such as Granitas, Smoothies, Sodas and Fruit juices. If this is not enough Ice
creams, Sundaes, Pastries, Pizza, Burgers, Samosa etc find a place in the menu. The Waiters
are very friendly. The speed of service depends on the density of the crowd.

Cafe Coffee Day started the cafe revolution in India. Creating spaces where the young and
young at heart could meet. And be themselves. Cafe Coffee Day is about fun, freedom and
being among one's friends.

With its “we belong” ambience and modest prices coffee day has become a favorite hangout
among the coffee crowd.

Keeping customers for life

The Beginning
The first Café Coffee Day was opened in Brigade Road in 1996, Bangalore's busiest shopping
area. At that time, the café culture had still not arrived in India. In that sense, Café Coffee
Day is the pioneer of the concept in India. Over the years Café Coffee Day currently owns
and operates 147 Cafés in all major cities in India. The ABC chain also started cybercafes in
Prestige Meridien, MG Road, and in the heart of Indiranagar. Later, the nomenclature and
business-accent changed; the chains of cybercafes are now called "Café Coffee Day".

Café Coffee Day is part of India's largest coffee conglomerate, Amalgamated Bean Coffee
Trading Company Ltd. (ABCTCL), a Rs. 250 crore ISO 9002 certified company and the first
to roll out the ‘coffee bar’ concept in India with its first café in Bangalore. Café Coffee Day
serves the coffee it grows on its 5,000 acres of coffee estates and is India's only vertically
integrated coffee company. Café Coffee Day’s menu ranges from hot and cold coffees to
several exotic international coffees, food items, desserts and pastries. In addition, exciting
merchandise such as caps, T - shirts, mugs, badges etc are available at the cafés. The coffee is
attractively priced between Rs. 16/- and Rs. 65/- while food items and desserts are priced
between Rs. 15/- and Rs. 60/-.

Café Coffee Day is…

Café Coffee Day is …where one can just sit thinking, be what you are. Somewhere
you can go to relax & unwind. It’s a place one starts owning over a period of time. It
becomes a place for meetings, dialogues, social interactions.

So it is not a coffee business instead their business is Experience.

They are not only satisfied with providing a nice coffee to customers but are of a long term
vision of owning the customers through their Marketing of Experience in terms of ambience,
nice-to-talk Café, nice music etc.

Keeping customers for life

Significance Of The Logo



The significance of the Colours

RED stands for leadership and vitality. It also stands for passion (… for coffee).

The GREEN stroke harks back to our coffee growing heritage and the coffee plantations that
we own.

The significance of the Text, Fonts and Swirl

Café is noticeably larger than the rest of the text inside the logo box. This denotes that Café
Coffee Day pioneered the café concept in India way back in 1996. Café Coffee Day would
like to own the word “café” in the minds of its customers. When one thinks of a café its got to
be Café Coffee Day. The font used for “Café” is called SLURRY. The font looks as though
the letters have congealed out of a liquid. It gives the impression that the word is still forming
itself and evolving into something new and something better constantly. This is the
characteristic of Café Coffee Day’s customers and this is the characteristic that the brand too
wants to adopt.

The upward SWIRL inside the logo box stands for the invigorating and uplifting nature of
coffee and the ambience at café Coffee Day.

Keeping customers for life

Customer Profile of CCD

The customers of Café Coffee Day are mainly youngsters and people who are young-at-heart,
better read & sensitive to fine music. The location was also much closer where youngsters
gather around like near colleges, railway stations etc.

Gender Profile of customers




According to the company source 60% of their customers were male and 40% female. And
also the men preferred the evening time and girls mainly opted for day timings rather than the

Keeping customers for life

Age Profile of customers

40 37.9


24 23.4
Percentage (%)




5.3 5.3

15-19 20-24 25-29 30-34 35-44 >45
Age Group
Source: Company Website

From the above graph it is very clear that majority of Café Coffee Day customers are from
the age group of 15-30. Almost 80% of café coffee day’s customer’s fall under the age group
of 15-30 as shown in the graph above

The “Generation Y” was the one who accepted the concept of Coffee Bars rather than the
traditional way of having coffee at home.

It is not yet popular with elderly and mid-aged people as they are more comfortable with the
traditional way of having coffee at home rather than spending a awful lot of money in coffee
bars. They are much more satisfied with the local Coffee/Chai walla’s.

With the help of experiential marketing this attitude of middle age and elderly people can
definitely altered to the need of the marketers.

Keeping customers for life

Promotional Activities Carried On By Café Coffee Day

Café Coffee Day’s Café Citizens Program

Customer loyalty program to reward customers

Café Coffee Day Started its Café Citizenship Program from July 1, 2002, any customer who
bills a minimum of Rs. 100 on a single bill is automatically eligible for membership to the
"Café Citizens Program". However, if a customer has billed less than Rs 100, he/she can pay
Rs. 25, irrespective of the bill amount and avail membership to the "Café Citizens Program".

The Café Citizens Card entitles members to a 10% discount on all food and beverage bills for
one year from the month of membership. Through the "Café Citizens Program", members
will also receive surprise gifts when they reach total billing amounts (across Café Coffee
Days outlets) of Rs. 2,500 (1st milestone), Rs. 5,000 (2nd milestone) and Rs 10,000 (3rd
milestone) respectively. Members can track their total billing spend at any Café Coffee Day
outlet across the country. The Program also entitles members to get special offers and
invitations from Café Coffee Day.

Keeping customers for life

Coffee Day Take Away

Hot beverages for those on the move

Grab a Cup… Chalte Chalte

Coffee Day Take Away machines are sleek and ergonomically designed, which dispense
fresh, hot and hygienic Filter Coffee, milk, regular or flavoured tea, and can be placed very
conveniently at any indoor or outdoor location requiring no more than 2 x 2 sq. ft. of space.
The beverages dispensed from these machines are served in disposable cups made of bio-
degradable paper with a spill-proof lid making it very convenient for people to sip and enjoy
their favorite hot beverage on the move. Each serving of filter coffee or tea is economically
priced at Rs. 3/- per cup with the added assurance of the ingredients being fresh and prepared
hygienically. The ingredients are supplied directly by Take Away's Beverages division and
the vending machines are routinely maintained for cleanliness and correct dispensing
measure by its strong service network. The filter coffee decoction is prepared exclusively at a
specialized coffee laboratory in Chikmaglur, Karnataka, and checked for consistency in taste
and quality by a team of coffee tasting experts employed by Take Away's parent company
Amalgamated Bean Coffee Trading Co. Ltd., India's largest coffee conglomerate.

Keeping customers for life

Café Coffee Day - Book Café

On January 15, 2004 Café Coffee Day introduced a Book Café section in the very popular
Sector 35C outlet in the Chandigarh.

The café promises to give the people a greater coffee experience, which encompasses
providing for books to suit their special interests. Café Coffee Day has entered into an
agreement with ‘Book Café’, a bookstore chain, to have their various books and periodicals
inside the Café Coffee Day premises. The 1100 square feet of the café serves as a cozy
reading corner where customers can leisurely browse through or purchase a wonderful
selection of books while sipping their favorite coffee. With a seating capacity of 50+, the café
has a friendly and youthful ambience and serves a delicious range of coffee recipes and

A similar café has also been launched in Patiala today. The café spread across an area of 1200
square feet along with its mouth-watering range of coffee and food provides for a special
corner for book lovers.

Jukebox at Café Coffee Day

For your listening pleasure

Bangalore, June 22, 2002 - Café Coffee Day has introduced the touch screen digital Jukebox
for the listening pleasure of its customers in all its café's across the country. The Jukebox
called "Q Jam" allows customers to choose the songs they want to hear. Qjam has been
manufactured by Real Image Media Technologies, a Mumbai based concern.

The touch screen digital Jukebox is operated by a remote server and each can store about
1500 tracks. The digital database is divided into categories like - music by genre, artist,
album, mood, favourites, new releases and top numbers in English and Hindi can be chosen.
The dial up facility enables the Jukebox to automatically download new songs from the
server the following day. Therefore new songs are played each day.

Keeping customers for life

Even without any customer interaction, the Jukebox plays songs continuously, but what has
been a big hit with the customers is that it plays requests and also offers a facility to dedicate
a song. The user-friendly touch-screen interface guides the user step-by-step through song
selection and dedication. If the user does not select any song, the Jukebox will pick up songs
at random from its database and play them.

Besides the company’s promotional programs Café Coffee Day also does promotional
Champaign for other popular brands. Two caselets of such promotion are as follows:

Levis Low Rise Campaign

Objective: Launch of a new pair of jeans which was very low at the waist, and thus very
"sexy" in its appeal.

Duration: April 20th 2003 - June 20th 2003.


Extensive branding at all Café Coffee Day outlets across India, using tent cards,
danglers, posters, table mats, door & bill folder stickers etc

Creation of a special drink called "6 inches below", containing Iced Eskimo coffee
on the top, crushed cookies in the middle & ice cream at the bottom, to depict that
all good things are found 6 inches below the navel.

A special website-driven contest with the 1st prize being an all-expenses-paid trip
to New Zealand

Result: Over 15,000 coffees sold within 2 months, which is a record in itself for any
single product sale. Besides this, there were close to 10,000 entries into the contest!

Keeping customers for life

Himalaya Honey Campaign

Objective: Promote a boring product such as honey with the young TA at Café Coffee
Day, using the health platform

Duration: October 27th 2003 - January 26th 2004.


Innovatively re-designing the main menu card in the shape of a Himalaya

Honey bottle, leading to immediate recall.

Co-branding of the regular Cappuccino as Honey Cappuccino (using actual

Himalaya Honey) & launch of 3 other product, with Himalaya honey topping
(a cold coffee & 2 desserts)

Result: A record no. of 30,000+ Honey Cappuccinos were sold in the 3 month activity
period, leading to the introduction of Honey Cappuccino as a permanent product on the
Café Coffee Day menu

In the same manner Café Coffee Day has done promotional campaigns for
Sugar free

Keeping customers for life

The objective of the research was to find out the consumers acceptance of experiential
marketing strategies adopted by Café Coffee Day.

The primary research was done by questionnaire method. A questionnaire was distributed
randomly to a sample size of 50 respondents out of which 30 were college students and
remaining 20 were young executives under the age of 30.

According to the information provided by the company approximately 85% of their

customers were under 30 years of age.

Hence the research was restricted to respondents under 30 years of age.

Students and Executives were selected randomly.

The breakup of sample size

Sample Siz e Bre akup



Young Executives Students

Keeping customers for life

Have you visited any of the following places?

CCD Pizza Hut

Barista Others


If others specify ____________________________________________________



15 14
10 8

CCD Barista Mcdonalds Pizzahut Others

Students Executives

Keeping customers for life

This question was put forth to find out the interest of consumers in the experience marketing.

We can clearly see that there is a positive response from both students and executives for
emerging experience providers and in case of McDonalds we see that all the respondents
have visited McDonalds. Mainly CCD is popular among the students as it has an affordable

Among the others there were some national players and regional players like

Smokin Joe’s

Domino’s Pizza


There is a clear indication from the respondents that customers are ready to accept the change
from normal restaurants to experiential marketers. They are ready to spend little more for the
experience they get apart from the basic product. That is the reason why McDonalds is
getting more exposure than our traditional restaurants.

Keeping customers for life

How frequently do you visit CCD (Café Coffee Day)?

9 9
8 8
4 4
Once a fortnight Once a month Once in 2-3 Months Rarely

Students Executives

It was seen that students are more likely to visit Café Coffee Day more frequently i.e. once a
fortnight or once a month. Most of the executives visit Café Coffee Day rarely. This is a clear
indication there are more awareness among students than among the executives.

Keeping customers for life

What factors influence you to go to Café Coffee Day?

Quality Experience

Ambience Service

Price Brand Name

20 18

15 14
10 8
6 6 6
5 4 4
Quality Ambience Price Shopping Service Brand Name

Students Executives

Price played a vital role among the factors that influences the respondents to go to Café
coffee day as the price of café coffee day was reasonable as compared to its competitors.

Maximum students preferred the price of Café Coffee Day rather than the quality, ambience
and the other factors, this shows that they can make a lot of improvements in designing such
an ambience that appeals to the customers senses and attract more customers and retain the
existing customers

Price attracts most of the customers to visit Café Coffee Day. This shows that price
dominates the ambience and other services at Café Coffee Day this indicates that the
company pays pretty less attention to other factors.

Keeping customers for life

What do you like most about CCD?

F&B Music

Service Others


6 6
6 5 5
F&B Service Experience Music

Students Executives

Café Coffee Day was very successful in attracting the customers with their basic product i.e.
its coffee and other dishes but it failed in offering the customers with the experience.
Experience plays a very important role. As the experience is what lets customer differentiate
between two same kinds of products.

If a customer has a good experience in Café coffee day, it is sure that he is going to come
again for the experience.

Basic product also plays a very important role but if he gets the same coffee elsewhere with
better experience customers won’t mind paying more for the competitors services.

Keeping customers for life

How much do you spend at a time?

Upto50 100-150

50-100 150&above

16 15
6 6
6 5
4 3 3
students Executives

Upto 50 50-100 100-150 150 & above

Most of the students spent between the range of 50-100 Rupees at once at Café Coffee
Day, while for executives 40% of the executives spent between the range of 100-150.

Most of the items in café coffee day falls under the range of 50-100, this could be the
reason why 50% of students fall under this range.

Keeping customers for life

Would you pay a little extra price for the experience (added services) you receive at



no yes

This is a very important aspect for marketers to consider as it shows that the
customers today want experience rather than just the basic product. The generation Y
customers are very much ready to pay more if the get a good experience along with
the basic product.

Keeping customers for life

How much do you think is the extra price justified or fair?

10 9

8 7
6 6
6 5 5


vary fair fair not fair totally unfair

Students Executives

More than 60% of the student marked that the extra price would be unfair.

Even though the quality of the product was good as per the respondents they were not ready
to pay any extra amount for other added services.

Even though they gave importance to added services they were not ready to pay the price for
it. This also shows that the market is price sensitive.

This shows that the customers were not much attracted by the ambience or they also did not
have a memorable experience at café coffee day.

If they were relating to the product in any manner they would not mind paying a little extra
for the added services they could get from café coffee day.

Keeping customers for life

Would you encourage having more of shopping experience over the basic product or service?

20 19
16 15
12 11
6 5
Yes No
Students Executives

16 out of 30 students preferred to have more shopping over the basic product i.e. coffee. This
shows that Café Coffee Day can have more products that attract the consumers and give them
the choice of the customers wants.

There is a clear warning that the consumers focus on basic product is reducing and they are
looking for experience and they want something more than the basic product and some more
products to have some more shopping experience.

Keeping customers for life

How important do you think are the added services (experience /ambience) over & above the
basic product or service?

Very important Not important

Important Unnecessary



very important Important Not important Unecessary

Students Executives

Both the students and executives considered the added services important. But it is also seen
that even though the executives and students considered the added services important they
were not ready to pay the price for it. This shows the price sensitive nature of the

Keeping customers for life

Have you heard about Café Citizen Program?

30 28





5 3

Yes No

Students Executives

Rarely any respondent knew about the café coffee day’s café citizenship program. This shows
the low promotion of the program by the company. The idea is good but it is not
communicated to the customers effectively. Experiential marketing must be accompanied
with other marketing concepts to make Experiential marketing a Holistic experience to the
customers. This shows that there is low awareness created by the company for the product.

Even the respondents who knew about the café coffee day’s café citizenship program, didn’t
own a card for themselves, they have come to know about the program from their relatives or
friends and not from the company itself. This shows the lack of effort from the company for
creating awareness.

Keeping customers for life

If they installed a video jukebox, would you consider spending some more time and money in





10 9

Yes No

Students Executives

Most of the youngsters visit Café Coffee Day more often. Hence it would be more profitable
to install video jukebox to attract these youngsters. The video jukebox can be used to show
popular and current albums or just can have a list of CD’s of the customer’s choice, which
customers can select and play for themselves according to their mood and need.

From the it was found out that the music played in Café Coffee Day did not interest most of
the customers, this can be overcome by having a system where customers can request the
song of their choice or something that going with the mood.

Keeping customers for life

Would you like to read books while drinking coffee at CCD?






Yes , 9 Yes


No, 11

Students did not have much of interest for books or reading materials they were much more
interested in live interactions or video jukebox facility rather than reading books at a coffee

Keeping customers for life

What more added services would you like to have in CCD?




5 3
2 2

Video games Pinball Internet Others

Students Executives

This graph shows that having internet facility at café bars would definitely attract
more consumers and also give them good experience. But there is also a threat that
this would the focus completely from the basic product.

As majority of consumers are Generation Y consumers they are more interested in

these interactive fun environment than a boring normal coffee shop.

Keeping customers for life

Research Summary

The research was carried on with the objective to find out the consumers acceptance of
experiential marketing strategies adopted by Café Coffee Day.

From the survey it is clearly seen that respondents have given a green signal to the
experiential marketing. Now it is up to the marketer to use experiential marketing
strategies to attract the consumers and provide them with experiences that will
become an unforgettable memory to the consumer and makes the consumer loyal
towards the company.

The people who visited café coffee Day are not much satisfied with the ambience and
the music that is being played, they must play soft music rather than the normal TV
songs that is being played at some selected bars of Café Coffee Day

Customers of Café Coffee Day were more satisfied with the price of the product, which
shows that they focus more on their 4 P’s rather than focusing on the ambience and
environment they provide to their customers. Café Coffee day is successful in satisfying
customers needs, but not giving them experience.

Experiential Marketing - Where greater value lies in the intangible than the tangible

When you customize a product it becomes a service, when you customize a service it
becomes an experience.

Keeping customers for life

Before a business can consider an experience marketing approach, it has to be clear what its
brand essence really is. It has to demonstrate everything it’s about. It is both emotional and
functional. The essence or brand

Proposition question is the hardest. The functional essence, [what the product does], is easy,
but there also needs to be a timeless emotional essence. The best way to create a brand
experience is to do something out of the ordinary for your audience. Make it touch their soul.

Many goods encompass more than one experiential aspect, opening up areas for
differentiation. Apparel manufacturers, for instance, could focus on the wearing experience,
the cleaning experience, and perhaps even the hanging or drawering experience. Other
industries might create the briefcasing experience, the wastebasketing experience, or the
mask-taping experience. If the manufacturer starts thinking in these terms ‘inging’ his things,
he'll soon be surrounding his goods with services that add value to the activity of using them
and then perhaps surrounding those services with experiences that make using them more

Whatever the concept, the future will be about extending connections through offering an
experience as the companies search for ever more-creative ways to connect with their
valuable customers (who take five times more marketing spending to attract than to retain).

Café Coffee Day

Product : Coffee

Experience : Coffee-Drinking Experience

According to the research Café Coffee Day is successful in portraying their products
functions and benefits, but not in providing the customers with an emotional experience of re-
freshening experience of a coffee.

Keeping customers for life

In India the competition for coffee bars is not very intense. It is pretty easy now to get profit
but when the competition increases it would be very difficult to get even the normal profit.
To avoid such a danger situation steps have to be taken in the initial stage.


MANY No. of Sellers ONE

Pure Monopolistic
Oligopoly Monopoly
Competition Competition

# of Sellers Many Sellers Large Few One

Product Homogeneous Differentiated Similar Unique

Barriers No Barriers No Barriers High Huge

Mkt Power None Little Lots Infinite

And also global players like Starbucks thinking of entering India our local player – Café
Coffee Day have to be double alert from such major threats.

Café Coffee Day operates in an Oligopoly Market

The main characteristics of this market are :

Very few sellers

Similar products

Keeping customers for life

In an oligopoly market the products are similar. Hence customer finds it difficult to
differentiate the company’s Product from those of the competitors. This is where experiential
marketing plays a very vital role.

Coffee have to fulfill its basic function – taste & refresh, but there must be other experiences
attached to it to make the coffee drinking experience memorable to the consumers.

The ambience must be very good and has to look nice to the individual or family customer -
that is Sense.

Having a cup of coffee at Café Coffee Day can be a sense of pride & thus invoke Feel.

Then being a member at Café Coffee Day’s Café Citizenship Program makes the customers
proud among others and the customers has a sense of belongingness to the Café Coffee Day -
that is Relate.

They can also make people Think & affect their lifestyles. i.e Act

Café Coffee Day must create such a holistic experience using all the 5 above mentioned
SEM’s. These SEM’s are provided through various experience providers (ExPro’s) like:


Communicating the desired message to the consumers can be a difficult job and it also
must be done with great care because a very small mistake can make the consumers
interpret the message in a negative way and turn down your product. The Café
Citizenship program by Café Coffee Day was not much popular among the customers of
Café Coffee Day. Awareness of the program was very less.

An intensive promotion Champaign must be carried on to make people aware of the

Program and to communicate the advantages of having the Café Citizen Card.

Keeping customers for life


In traditional marketing products had the main focus and services were considered to be
as secondary aspect of the product? There is a shift in this thinking; experiential
marketing says that product is secondary to the experience offered by the company.

That does not mean that a poor quality product can sell. If the quality of the product is not
good it affects the experience the consumer has.

Café Coffee Day has a very good quality product. The price of the product is also
reasonable as compared to the competitors.


The following factors contribute to the environment of any Coffee Bar.

Colors Weights
Scents Materials
Process Curves
Procedures Transitions
Placement Forms
Artifacts Tastes and
Heights Products

The environment plays a vital role in providing a positive experience to the consumers.

At Café Coffee Day the environment is good, but they must have a theme that is preferred
by the consumers. The theme must not be restricted only to the environment; it must be
conveyed in the advertisements, the ambience must also reflect this theme.

From the research it was seen that the music played in Café Coffee Day does not interest
most of the consumers. There must be a system where customers can make their own
choice of music to be played in the background, this might interest the consumers.

But during busy seasons it is preferred that soft music is played as there would be lot of
customers and each customer’s preference is different from one another.

Keeping customers for life


People are the most important asset of any organization. In coffee bars when customers
come in contact with the bartenders it is called the moment of truth. If the customer feels
left out in any way this would create a negative impression about the company in the
consumers mind.

Café Coffee Day have to strive hard to make their people give good service or provide
nice experience to the customers. They have to train their employees to handle customers.
They should also be quick in providing the right services at the right time.

Once when I visited Café Coffee Day (Andheri); the bartender was not able to operate the
computer to get the bill for me. He tried it thrice but all the three times came with a wrong

These kinds of incidents generate bad experience for customers. Hence these kind of
incidents must be avoided and the employees must be very well known about each and
every aspect of the bar and its customers.

Keeping customers for life

Some guidelines for devising an experience marketing strategy for CCD:

Creating a consistent theme that resonates through the entire experience – Design
stores that are unique, special and distinctive. Having special events, themes or store
layout so that it engages all the senses of the customer and leaves a lasting impression
can create this distinctiveness.

Building the experience platform- The platform must be such that the customer must
feel comfortable and relate themselves to the product offered. Not only that but also
the customers must have a sense of belongingness to the environment.

The ‘Insperience’ Experience:

Insperience is a studio by Whirlpool and KitchenAid Brands in Atlanta, United States. The
Insperience Studio provides an interactive experience where consumers can learn about
new and exciting products by Whirlpool and KitchenAid Brands. The studio has equipped
kitchens where people can try out the latest Whirlpool and KitchenAid brand home
appliances. It invites shoppers to bring chores with them. It acts as a learning laboratory
for the company to study what the consumers actually want.

Layering the theme with positive cues and easy-to-follow signs.

Eliminating negative cues that distract or contradict the theme – A very aspect because
negative cues might irritate the customer, to avoid any negative cues. At Café Coffee
Day according to the customers view the music is not very good and distract the
moment spent in the Café. Hence it is advisable to have soft music rather than having
the normal TV music.

Offering memorabilia that commemorates the experience.

Keeping customers for life

Seeking to engage all five senses- All the five senses must be included

The experience should complement the character of the business. Crossword goes for
literary events that not only enhances customer experience but also drives up sales of
the store. Same is Foodworld, which enhances the customer experience by the small
cafeteria it has in front of the store. It provides lots of revenues and also results in sales
in the store.

Where possible, engage all the five senses like the two examples quoted in the paper.
Most retailers are able to engage no more than two senses and thus end up with just a
low cost differentiation strategy that is no more a competitive advantage in the present
technology driven environment.

Reaffirm the experience with a take-away / promotional item. Crossword provides

bookmarks and weekly newsletters that make the customer feel pampered and cared
for. Foodworld provides discount coupons on future purchases.

Select your target and profitable customers for promotional schemes like the Books
Reward Programme of Crossword. Do not offer promotions to all consumers.

Try and incorporate entertainment, educational, aesthetic or escapist elements in the


And the last but the most important strategy is to engage the customer. The strongest
form of experiential marketing will still involve the active participation of the target
customers in the promotional events.

Keeping customers for life

The Experience organization

Most organizations are not set up for managing experiences properly. Even if an organization
is market-oriented, it does not mean it takes customer experiences seriously. Many are very
functionally oriented, & operation focused, chasing ISO 9002 criteria, which often take out
any bit of creativity & true innovation.

What is needed for creating an experience-oriented organization is not really a new

organizational chart but a new spirit that pervades the organizational culture.

An organization that is serious about experiential marketing places an emphasis on creativity

& innovation, treats the creativity & innovativeness displayed by its employees as a critical
intellectual capital. Such an organization provides a pleasant work environment & offers
employees opportunities for experiential growth as part of their career.

Finally, through collaborating with external agencies ( communication firms, identity firms &
consultants) it guarantees integration of its messages across different “experience providers”.
It is quite different from the short term oriented, typical organization that values order,
structure & purely analytical thinking.

Traditional marketing has provided a valuable set of strategies, implementation tools &
methodologies for the industrial age & the early stages of consumer age. Now that we have
entered a new era, it is necessary to consider how the traditional features & benefits approach
may need to be supplemented with experiential marketing approaches. This is important
particularly in India- a market in which consumers are learning very fast, thus leapfrogging
some of the consumer stages that we may have seen in other markets.

Keeping customers for life

The Need of the Hour

Although a few Indian companies are making an attempt to incorporate this concept,
experiential marketing has a long way to go. Here the customer often has to grapple with
shoddy services, indifferent attitude of service staff and often, substandard products. In this
scenario, expecting an entire experience to be created specially for him may seem like asking
for too much. But if Indian companies are to succeed in the fast changing market place where
the customer is getting a taste of international standards and is slowly refusing to settle for
anything less, experiential marketing is the ideal tool.

Standing at the cutting edge of marketing innovation, experiential marketing helps

organizations build relationships by learning to become experience providers – making their
company or brand a sensory experience.

Keeping customers for life

"An experience occurs when a company uses services as the stage - and goods as props - for
engaging individuals in a way that creates a memorable event."

- Joseph Pine and James Gilmore, the Experience Economy, Harvard Business Review.

Marketing flounders at many companies today. The causes range from the demise of mass
markets, the ineffectiveness of many traditional forms of advertising and the seeming failure
of many businesses to use the World Wide Web as an effective marketing vehicle. In
response, consultants flood bookstores with new marketing concepts offered as cure-alls,
including attention marketing, guerilla marketing, permission marketing, viral marketing and
even emotion marketing. Each concept may have something valuable to say about how the
environment has changed but none really addresses the core problem: People have become
relatively immune to messages broadcast at them.

There’s no question that marketing is more challenging than ever. The media has become
more fragmented. Customers are increasingly media savvy and media weary. There are now
freethinking customers who don’t fit neatly into researchers’ tick boxes.

Consumers have changed the way they respond. No one has time anymore. Everything has to
be done quickly. If it's not entertaining them or engaging them or evoking emotion, they're
not paying attention. So if a product has to be sold or the needle has to be moved in any way,
focus has to be on how one is going to attract that consumer. And if the company is not
creating an experience, it is not attracting the consumer of today.

Customers don't remember the event; they remember the experience. It's not the page they
just touched, its how they feel after they touched it or looked at it or read it. It's all about

An ongoing emotional attachment between brand and customer is the ultimate aim of
experience marketing, in an era where marketers struggle with audience connection in a
cluttered world. The delivery is through a unique experience which can only be created by the
brand – giving brand owners a higher control. These in turn allow people to understand the
brand at another level by being active – rather than passive-in relation to the brand.

Keeping customers for life


Humans have always needed myth. Myth has always played a vital role in human societies in
providing meaning and order. However, since the Age of Enlightenment, humans have come
to rely on myths less and less, or so they think. Today’s society tends to devalue the
relevancy and important of myth in people’s lives. While the tradition of oral storytelling has
all but disappeared, myth is apparent in Western societies now more than ever. Now, the
medium has changed. Elders retelling myth around the fire may not happen any longer, but
myths are retold daily in movie theaters, in books, on stage, and in the commercial
propaganda that surrounds communities via radio, television, billboards, newspapers, and
direct mail pieces, to name only a few. Myths help people make sense of the world around
them. Current society’s devaluation of myth is mainly due to a compelling belief that myth
means something that is not true. However, many myths deal with a deeper understanding, or
truth, about the human condition. In Silverblatt’s Approaches to Media Literacy, the author
states that “regardless of whether myths are factually accurate accounts of historical events,
myths speak to an inner truth in a way that science cannot” (144). It is irrelevant whether a
myth is true or false. What matters is the deeper meaning the myth can bring to the human

One of the functions of myth is to provide meaning to human life and experience. Assistant
Professor of Marketing at Harvard Business School, Douglas B. Holt helps explain the
transition of myths into icons:

Simple stories with compelling characters and resonant plots, myths help us make sense of
the world. They provide ideals to live by, and they work to resolve life’s most vexing
questions. Icons are encapsulated myths. They are powerful because they deliver myths to
us in a tangible form, thereby making them more accessible. Very often, these icons are
people, not objects or brands. Consider the cultural heroes that have helped shape
Hollywood: Marilyn Monroe and James Dean; and, political activists like Martin Luther
King, Jr.; other celebrity figures like Princess Di; even fictional characters like Superman.
The commercialization of myth is a tricky formula for marketers to attempt. The best
marketers identify a myth that can grow with a brand and with the changing times and thus

Keeping customers for life

the changing consumer. When a brand creates myth successfully, consumers come to see the
myth as the embodiment of the product. The consumer buys the brand to consume the myth,
thereby forging a relationship with the brand.

Apple’s Mac users consume the myth of the creative, tech-rebel equipped to make battle in
the new cyber-economy. Marlboro smokers consume the myth of what Silverblatt terms the
“rugged individualist” and the mythic concept of the Frontier. It is the embodiment of the
Western cowboy, intent on living life on his terms and his terms only (183). Sprite has
successfully used the myth of the urban "gangsta," a variation of the rugged individualist set
in a new frontier, the inner-city ghetto. Embodying this myth allows Sprite to connect with
an urban consumer, a highly-coveted consumer group. Buying a Sprite is a consumer’s
passport into an “urban,” outlaw experience, without actually having to live an urban outlaw
life. Consider the throngs of young, white suburban youth buying the experience of urban
life which in reality is beyond their realm of reality.

Brands that successfully package their brand as the embodiment of a myth, a myth that is
desirable and somewhat achievable for consumers, compete to be known as icons with the
marketing world. Holt classifies the competitive environment as “myth markets.”

It is in myth markets that brands compete to become icons. The winners of these markets,
become icons; they are the greatest performers of the greatest myths, and they bask in the
kind of glory bestowed on those who have the prophetic and charismatic power to provide
cultural leadership in times of great need.

According to Holt, the most common American cultural myth that is used successfully by
brand managers is the myth of rebellion. Americans are known for their doubt and distrust of
authority and political systems. Whether it is due to the country’s initial beginnings as group,
banded together as rebels against a colonialist Britain or as more of an individual effort,
patriots forging a new life in a new, uncharted wild; Americans are inherently suspicious of
authority. The iconic figures in American folklore, literature, and cinematic history, live

Keeping customers for life

according to a set of beliefs that violate generally accepted commercial, cultural and political
systems. The rebel in the Wild West takes the law into his own hands, the slacker in
subculture Xtreme sports doesn’t accept conformity or authority, the hip hop, “pimp-daddy”
of the ghetto defies economic standards by redefining capitalism on his own terms.

Some of the strongest brands in today’s economy have successfully packaged a cultural myth
into an iconic brand. Brands like Nike, Harley Davidson, Apple, Volkswagen and Mountain
Dew are completely synchronized with mythic icons; consumers are buying the experience of
the myth rather than the actual product. As this level of marketing, the product is more of a
“detail” to the experience that is being marketed to consumers. When consumers are asked to
explain what Nike means, their adjectives used to describe the brand rarely reference
anything about the shoes or the apparel. The adjectives symbolize a lifestyle or an attitude:
freedom, high intensity, no boundaries, power, respect, strength, courage, heart, and
individualism. The Nike brand managers use this synchronicity to their advantage, using
their identification with a certain lifestyle in translating that experience into several products,
shoes, clothing, equipment, even retail – transforming a retail outlet, Niketown, into an
athletic or even non-athlete’s fitness dream. These marketers are selling the experience, not
the product, which flies in the face of traditional marketing practices. The product is a side
note. If that does not seem believable, consider the Harley experience.

Keeping customers for life


"King of the road"

Harley-Davidson began in a shed, went to war, became the symbol of

American individualism and ended up "king of the road".

Keeping customers for life


“Motorcycles are simple. No doors. No roof. No bumpers. When it’s cold, you’re cold. When
it rains, you’re wet. And after a long ride, whether you have traveled a stretch of road that
takes your breath away with its beauty or almost kills you, you have been through something
profound with your bike, and you fall in love with it. The love is evident at rallies that draw
half a million riders to stand around and gawk at their machines. It is evident in the tears
bikers shed after finishing cross-country trips.”

After Harley experience, it is easy to see that it is more than a motorcycle or bike, it is about
the relationship a rider forges with that piece of machinery underneath them and what that
machine can bring into their life: roads never traveled, sights unseen, and experiences
unlived. It brings a spiritual level to the owner’s life. Many riders equate their Harley
experience as a level of spiritualism.

The Beginning
Founded in 1903, H-D is the only major US player in the global motorcycle market. It served
every major war of the past 100 years and received four Navy ‘E’ awards 4 for excellence in
wartime production. It was the soldiers who started the H-D biker culture. When soldiers
returned home from war, they bought H-D because they had fallen in love with bike. They
started riding H-D with strong national pride. To some, it was even a remembrance of their
fellow soldiers who had perished for the freedom of US citizens. From these evolved the
rough and tough breed of bikers with their leather jackets, tattoos, and long hair. H-D built up
a distinctive brand image and dominated the US motorcycle industry for many decades.
People were the only sustainable competitive advantage. To retain the customers H-D
changed its strategy from selling products to selling community. H-D owners were a diverse
bunch, from CEOs to construction workers. To build emotional bonds with them, the Harley
Owners Groups (HOG) was created in 1983. The company emphasized that customers could
buy any brand of motorcycle, but if they bought from competitors, riders would not get the
rallies and events. They would not have the camaraderie that came with a H-D motorcycle.

Keeping customers for life

Harley Owners Group (HOG)

In 1983, the Harley Owners Group (HOG) was established to build a community of
customers, who could share their H-D experiences. A person buying a H-D motorcycle
received a free one-year membership of the HOG. Customers joined local, dealer-sponsored
HOG chapters each with unique activities and personalities to customize their HOG
experiences. HOG chapters conducted national rallies, touring rallies and state rallies. These
rallies encouraged people to share the excitement of riding. The people (taking demonstration
rides) had the opportunity to ask questions, register their bikes and buy merchandise.

Consider the fanaticism of the Harley owner. As Pine and Gilmore put it, “How many other
company logos do you see tattooed on users’ bodies?” Alec Wilkenson wrote in The New
York Times: “If you ride a Harley, you are member of a brotherhood, if you don’t, you are
not.” And, with any brotherhood, there is a price of entry. In many Harley riders’ cases, the
price of entry into that exclusive club is getting the Harley logo emblazoned in skin tissue on
a forearm or chest.

Harley Davidson is a way of life. According to Bernd Schmitt, author of Experiential

Marketing, “Consumers see Harley is a part of their identity.” From the bikes themselves to
the branded clothing to the tattoos, Harley in one brand name encompasses a lifestyle. This
lifestyle cuts across all societal levels – from the Hell’s Angels to the Harley HOG (member
of the Harley Owner’s Group) to the top-level corporate executive to even royalty. Even the
late King Hussein owned a Harley; an Arab king living the embodiment of an American

Keeping customers for life

rebel. Photographer Anne Leibovitz photographed the king and his wife Queen Noor on the
king’s motorcycle in the Jordan dessert (Noor, 242j). The photograph shows King Hussein
“buying” into the experience of Harley, wind in his hair, the dessert whipping past him, he
owns the road.

Analyzing Harley Davidson’s use of the rebel myth through a mythic approach shows how
true Harley Davidson has remained to the characterization of this American myth, building
upon that story, and cultivating a brotherhood of riders who now embody that myth through
the purchase of an iconic brand. Harley Davidson uses a variety of media to convey their
rebel myth. The brand not only has traditional media at their fingertips in the form of
television, radio, print and billboards, they also have the luxury of actual people wearing their
brand in the form of clothing and tattoos. Another strong tool in the Harley arsenal is word of
mouth. One of the strengths of an iconic brand is the product owners or consumers, in this
case, the riders.

Consistency in Advertisements

In order to appeal to the serious Harley HOG, the advertising campaign and brand
communication has remained consistent throughout several years. Since the buy-back from
American Machine & Foundry, the marketer has maintained a consistent voice throughout
their communication. As always, the bike is one of the featured images in the advertisement.
Most Harley ads depict an open road, far-reaching landscapes and put the reader into the
driver’s seat, allowing them to experience the sights of a Harley rider. The bike, at all times,
looks its absolute best. Its chrome gleaming in the sunlight, not one fleck of mud or dirt
defiles this priceless piece of art. The bike, or the art, in the advertisement almost pops off
the print ad or outdoor board; the viewer can almost feel the vibration of the motorcycle
underneath them. The motorcycle leads the experience, keep in mind that the owners are
called “riders” not “drivers.” The bike leads the consumer onto the open road, leading them
down a path that holds unknown sights, sounds, smells and tastes that only a Harley man (or
woman) can handle. Remember, that even the corporate executives want to be considered
“bad boys” around the water cooler.

Keeping customers for life

The media plays a large role in mythologizing process, like people and events. The rider in
Harley advertising is depicted as ultra-cool, always in control, a man among men. Hair
blowing in the wind, leather jacket and jeans, sunglasses on, a Harley rider is the ultimate
embodiment of every bad boy and rebel without a cause all rolled into one. Everyone wants a
piece of that action. Why are people drawn to this experience? Despite the rebel image, the
loner, Harley riders want to belong to something, something larger than their self. Some draw
parallels between theology and materialism in this case.

Robert Jay Lifton, a psychiatrist and author of The Protean Self: Human Resilience in an Age
of Fragmentation says: “We all need to be something larger than ourselves. If you’re part
of, say, Harley-Davidson, you can feel that this movement has existed before you were born
and will continue beyond your finite life span”

The advertising campaign for Harley Davidson contains the mythic theme of the Frontier and
its evolution into the Myth of the Old West. According to Silverblatt, “the myth of the
frontier was…associated with abundance and opportunity. America was blessed with
seemingly boundless resources” (177). This is translated into the idealization of the open
road for the Harley rider. Controlling one’s destiny sitting atop a vibrating piece of
machinery is an evolution from the days of the Old West, sitting atop a fiery steed.

Once the brand has successfully embodied myth, conveying that myth to the masses is the
next hurdle. While selling experiences is the key to success, mass marketing is still the name
of the game. How the iconic brand is spread through mass marketing is important because
the brand risks dilution if the communication sways from the myth. The diffusion of
innovations theory plays an important role in creating experiences for consumers with brands,
commonly called experiential marketing.

Keeping customers for life

Experiential marketing is distinct in four key ways:

It focuses on consumer experiences

Treats consumption as a holistic experience

Recognizes both the rational and emotional drivers of consumption, and

Uses eclectic methodologies.

With regard to the definition of experiential marketing, it’s important to state that it is the
consumer who is participating in the experience (consumers aren’t always mentioned in the
industry definition). The industry definition often leaves out the importance of the brand
being part of the experience, rather than just a “sponsor” of it. However, it is vitally
important to involve the brand, support the positioning and provide peer-to-peer interaction.
Therefore, a better definition, and one coined by Schupp Company, a full service advertising
agency in St. Louis, is:

Experiential marketing

Achieving specific marketing objectives by providing the consumer with a unique experience
that involves the brand, supports the brand positioning, and seeks to link the consumer to the
brand through positive one-on-one interaction.

Keeping customers for life

The goal is to leverage first-hand interaction (with the product) to form a lasting bond with
the brand. This can be accomplished in many different ways. The key, however, is creating
an experience for consumers that they will remember beyond that initial experience and will
be recalled during consideration of repeat brand purchases. Additionally, this is best
accomplished through an integrated, one-voice approach. If consumers receive the same
message from every point-of-contact with the brand, the better they will retain that memory
of the experience.

Consumers build loyalty by having an ongoing relationship with that product or brand. As
with any human relationship, those relationships begin with conversations, in many cases,
intimate conversations. It is vitally important that consumers feel that their opinions are
trusted and heard within the company.

Harley Davidson has done a great job listening to the needs and wants to riders and dealers.
Some within the corporate structure may say that, actually, the brand is manipulated too often
by the consumer base, but a relationship has been forged and the flow of communication
continues with the brand and the fans. Conversations that are positive, that make the
consumer want to further that relationship and continue the partnership that has been created.

And those conversations are what good marketers, like Harley Davidson, try to create when
they market experiences. Trying to have one-on-one conversations with consumers on a mass
level. That is the trick, making consumers believe they have had a personal, intimate
experience or conversation with a product while trying to touch as many people as possible to
make it worth the money. Harley, like Nike and other iconic brands, provides an experience
far beyond selling a commodity.

Harley has successfully packaged their brand in the embodiment of a tried and true American
myth, the rebel, an evolution of the Western outlaw. The brand communicated that mythical
embodiment through a consistent level of communication and the understanding of selling
experiences to a wide cross-section of consumers.

The brand, bordering on a cult, has captured the imagination of riders and wanna-be riders
around the world. You don’t even need the motorcycle to live the Harley life. A leather
jacket with Harley Davidson emblazoned on the back allows a consumer to buy the
experience of Harley life for a far less expensive price tag.

Keeping customers for life

Myths help people make sense of the world around them and identify with something that is
larger than themselves. Some may liken it to a consumer’s need for something larger than
life, a spiritual need to connect with other people and a theology of a road warrior attitude
and lifestyle. Harley Davidson delivers this level of spiritual enlightenment to their dedicated
fan base and for even those who will never buy a motorcycle; they can buy into that
enlightenment and become a part of a rebel community, if even for a little bit.

Keeping customers for life

Many marketing issues are not a problem of the logo or the advertising. These are customer
experience issues. To address these issues effectively requires more than policing of
corporate identity standards or soul-searching about the company’s values and the meaning of
its brands. What is needed is, first, an original understanding of the customer’s experiential
world and, second, the creation of a differentiated strategy platform that can be implemented
in an innovative fashion. Great brands are the result of great, and consistent, customer’s

Experts believe that experiential marketing will continue to grow over the coming decade,
becoming a central marketing component for every brand that wants to lead in the
marketplace. That confidence is based on what we see in our own business, what experts are
hearing from clients and what they believe is the unique value that experiential marketing

Yet it is believed that experiential marketing will grow at the expense of other, more
traditional marketing disciplines. Experiential marketing is not a substitute for broadcast and
print advertising - rather, it's a powerful partner. Companies that are successful in leveraging
this new marketing strategy will be those who understand how to integrate experiential
marketing as a counterpart to their advertising and direct marketing buys. It can also be said
that the collaborative potential of cross-discipline sister agencies within the major holding
companies will be a major boon to marketers and the agencies themselves.

In sum, what attracts customers to any company and sustains their loyalty to its products,
services, and brands, is the customer experience. That experience encompasses products,
service, communications, and every interaction the customer has with the company.

Keeping customers for life


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Brand Management (Harvard collection)