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Experiential marketing is this new way by making the customers living an experience through the creation of emotions.
Typology: Schemes and Mind Maps
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Elise ZAJDMAN
Student Umeå School of Business Spring Summer 2010 Master thesis, one-year, 15 hp
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& Elsa SNAKERS Experiential marketing and luxury goods’ consumers
ACKNOWLEDGEMENTS
First, we would like to thank Lætitia Courrier for her help. Thanks to her, we had the permission of Lancel to do the questionnaires in the stores. Furthermore, thanks to Julia Lafont, our interviewee, for the information she gave to us and the time she spent to answer our questions. We also would like to thank the director and salesperson of the stores, we did our research in, for the precious information they provided to us. Finally, we are thankful for the supervision of Maria Bengtsson who advised us on many points for our thesis. Her guidance was really helpful for our research.
Thank you,
Elsa Snakers Elise Zajdman
& Elsa SNAKERS Experiential marketing and luxury goods’ consumers
v & Elsa SNAKERS
Chapter : INRODUCTION
& Elsa SNAKERS Experiential marketing and luxury goods’ consumers
1. INRODUCTION
In the first chapter of this thesis, the context and the theories about experiential marketing are summarized briefly and are related to the topic of consumer behavior. It facilitates the understanding of our research. Then, the main issues and a gap will emanate leading to the statement of our problem and its objectives.
1.1. Background
Nowadays we are in a very competitive market where products have all very sustainable competitive advantages. It is difficult to find the differences between products. Finding a new way to reach this advantage of differentiation from one to another is becoming the key issue for companies to survive in this context. Traditional marketing strategies focusing on price or quality are not anymore a long-term source of differentiation and competitive advantage. Researchers advocate that one of the main routes to reach it is by a much stronger focus on the customer (Craig & Douglas, 2000; Peppers & Rogers, 2000; Farinet & Ploncher, 2002; Kotler & Keller, 2006). Therefore new trends of marketing with a stronger focus on consumers emerge. For example, the viral marketing focuses on the role of consumer in promotion, using the buzz concept and the words of mouth, the tribal marketing focuses on segmentation and the way the consumers group together according to what they like, the knowledge marketing which focuses on the empowerment of consumers and a mutual learning from each other. One growing trend in marketing concerns the consumers‘ emotions and the creation of experiences. In this perspective, the main idea is to develop the notion of Customer Relationship to the ‗‗continuous‘‘ concept of Customer Experience (Gentile & Spiller, 2007). In fact, according to Pine and Gilmore (1999) modern economies have evolved from the delivery of commodities to the delivery of goods, from the delivery of goods to the delivery of services, and are in the process of evolving to the delivery of experiences. Therefore, it becomes necessary to consider aspects that refer to the emotional and irrational side of customer behavior (Holbrook & Hirschman, 1982) and try to work with it.
Indeed, in consumer behavior, the consumer makes an evaluation of the product according to his beliefs or to his feelings. This is what we call an attitude. The weight the consumer gives either to his belief or to his feelings in the evaluation of the product is called the hierarchy of effects. Then, the evaluation of the product will lead to an intention regarding the product and this is what we call the behavior (Solomon, 2006). When the consumer has strong beliefs about the product and doesn‘t take into account his feelings, he has a standard hierarchy of effect leading to a cognitive attitude, which means a rational evaluation of the product. However, when the consumer listens to his feelings and is open to emotions, he has an experiential hierarchy of effects leading to a hedonic attitude, which means an affective evaluation of the product. Therefore, emotions and experiences could have a role in determining the customers‘ evaluation of the product by influencing his hierarchy of effects, which then influences their attitude and then their preference and intention to purchase.
Chapter : INRODUCTION
& Elsa SNAKERS Experiential marketing and luxury goods’ consumers
In fact, while the classical economic theory together with the standard hierarchy of effects, views the consumer as a logical thinker who has purchasing decisions based on Cartesian problem solving process, researchers have begun to stress out the importance of the emotional and non-Cartesian side of people in consumer behavior and purchase decisions process. In marketing, we can find the use of this new trend within the concept of experiential marketing.
Traditional marketing mainly sees consumers as more rational decision-makers who care about functional features and benefits. In contrast, experiential marketers view consumers as irrational and emotional human beings who are concerned with achieving pleasurable experiences. Therefore experiential marketers offer customers memorable experiences in order to achieve competitive advantage and customer satisfaction (Pine & Gilmore, 1999). Those memorable experiences are created by different tools that aimed to create emotions into the customers. Experiential marketing can create emotions to the consumer by making entertainment for customers, by allowing them to escape from the reality, by educating them and giving them aesthetic objects or places to see (Pine & Gilmore, 1999). Five different types of experiences that marketers can create with their tools for customers are distinguished: sensory experience (SENSE); affective experience (FEEL); creative cognitive experiences (THINK); physical experiences, behaviors and lifestyles (ACT); and social-identity experiences that result from relating to a reference group or culture (RELATE) (Schmitt, 1999).
The store, together with internet, is the main area where this experiential marketing should be developed. Indeed, consumers spend more and more time doing shopping (Codeluppi, 2001) therefore it is where the marketing will have the most of impact. Moreover it is the main place where companies can interact with their consumers. Thanks to the store, companies could create two of the experiential marketing concepts which are entertainment and escapist by designing the shop with a special atmosphere. Aesthetic can be reached by the design of the product but as well with the design of the store with a beautiful architecture, furniture, colors and decoration. The last which is education is created by the communication and can also be inside the store. Many companies have already begun to offer experience through amazing concept store with a unique thematic like Starbucks or Nature&Découverte. Those stores well trigger emotions and experience to customer and influence their purchase decision (Codeluppi, 2001).
Since Pine and Gilmore (1999) several studies on experiential marketing have been conducted. One of those (Atwall & Williams, 2 008 , p.342) suggests that the experiential marketing should be used in the luxury field because ―it is clear that the fact that many luxury goods are almost always experiential puts luxury marketers in a unique position to apply the principles of experiential marketing to their activities‖. However, it underlined the issue that ‗simply having an intrinsically, inherently experiential offering is very different from actively and deliberately marketing that offer in an experiential manner‘ (Atwall & Williams, 2008 , p.342). The authors say that because they think that some luxury companies which pretend to use experiential marketing are just simply repeating traditional marketing. They don‘t realise that in reality the emotions are just the result of their products and not their environment. In fact, the luxury product is itself (intrinsically) an experience.
Chapter : INRODUCTION
& Elsa SNAKERS Experiential marketing and luxury goods’ consumers
investigate, by adding this issue. In other words we would like to investigate if experiential marketing can be useful for less affective people in the luxury field as those people don‘t feel the emotions the product intrinsically creates.
1.2. Problem statement
As we explained previously, experiential marketing has for goal to create emotions to the customer that leads to enjoy an experience for the consumer and leads its evaluation of the product positively, influencing his intentions. It will be very useful for products as utilitarian products of everyday life. However, luxury products trigger emotions and experiences themselves, as object, without any environment‘s help. It is aesthetic products, created by the genius of very talented designers in wonderful materials. Luxury products are like works of Art and allow people to travel in their mind, to escape. So, as they are experiential products intrinsically, we would like to know if using experiential marketing for selling those products is really useful. Does it increase the emotions that the customers feel already for the product?
Moreover, according to researchers, some people are less sensitive to emotions and aesthetic than others. Therefore we would like to know if experiential marketing is useful for those people. Those cognitive people certainly don‘t feel emotions for the luxury product itself; they buy it for the quality, the usefulness, the image. If the luxury product is put ahead by experiential marketing, we would like to know if it will create emotions to these cognitive people and change their evaluation of the product (attitude) and intention (behavior). Do the emotions created by experiential marketing make the cognitive people forget the primary reasons for which they wanted to purchase a product (information gathering, advice of people…)? Will they follow their emotions that lead to irrational purchase decision like affective people? Does it increase the purchase intention? To summarize, our study will examine if the experiential marketing is useful for the marketing of luxury goods and if yes, we will find in which case, and for which kind of people.
1.3. Purpose and research objectives
Our research will focus on the results of this application of experiential marketing in the luxury domain. The purpose of this research is to measure the extent to which the application of experiential marketing can affect the emotions and the behavior of luxury goods‘ consumers and especially cognitive persons. Our research question is: Does experiential marketing affect the behaviour of luxury goods‘ consumers?
We found a luxury French company (Lancel) that already uses experiential marketing with its stores, and we want to use it for our research: knowing if experiential marketing affects the behaviour of the consumer of Lancel, does it have better results than
Chapter : INRODUCTION
& Elsa SNAKERS Experiential marketing and luxury goods’ consumers
traditional marketing, does it only affect sensible persons, by comparing the new stores with the old ones.
1.4. Terms definitions:
In this part, we will define the most important terms we will need for our research.
Experiential Marketing: views consumers as rational and emotional human beings who are concerned with achieving pleasurable experiences. It offers customers memorable experiences in order to achieve competitive advantage and customer satisfaction (Pine & Gilmore, 1999). Those memorable experiences are created by different tools. The aim of experiential marketing is to make entertainment for customers, to allow them escape the reality, to educate them and give them aesthetic objects or places to see (Pine & Gilmore, 1999). Five different types of experiences that marketers can create with their tools for customers are distinguished: sensory experience (SENSE); affective experience (FEEL); cognitive experiences (THINK); physical experiences, behaviors and lifestyles (ACT); and social-identity experiences that result from relating to a reference group or culture (RELATE) (Schmitt, 1999).
Emotion: a mental state of readiness that arises from cognitive appraisals of events or thoughts; has a phenomenological tone; is accompanied by physiological processes; is often expressed physically (e.g. in gestures, posture, facial features); and may result in specific actions to affirm or cope with the emotions, depending on its nature and meaning for the person having it (Bagozzi et al, 1999).
Hedonic Consumption: refers to consumers‘ multisensory images, fantasies and emotional arousal in using products (Hirschman & Holbrook, 1982)
Attitude: a lasting, general evaluation of people (including oneself), objects or issues. Those people, objects, advertisement or issue are called ―attitude object‖. (Solomon et al, 2006).
Cognition: the beliefs a consumer has about an attitude object (Solomon et al, 2006).
Affect: the ways a consumer feels about an attitude object (Solomon et al, 2006)
Behaviour : involve the person‘s intention to do something regarding the attitude object (Solomon et al, 2006)
1.5. Disposition of the thesis
In figure 1, we illustrate the path the reader will follow through the reading of our thesis. The introduction describes the context in which experiential marketing is
Chapter : THEORETICAL METHODOLOGY
& Elsa SNAKERS Experiential marketing and luxury goods’ consumers
2. THEORETICAL METHODOLOGY
This chapter presents our methodology in a theoretical perspective. It allows understanding what approaches we have taken when conducting our research and why.
2.1. Epistemology and ontology
Our study will be based on naturalistic assumption. Indeed, our research regards the real world which we are going to describe by theories and explain our point of view by scientific approach, analysis of data and knowledge.
The naturalistic assumption covers three assumptions which have to be taken. These assumptions are on the ontology, on the epistemology and on the methodology (Bryman & Bell, 2007). The ontology is a branch of metaphysics which studies the nature of reality (Kent, 2007). It answers these questions: are social entities objective entities that have a reality externally to social actors or are social entities considered social constructions raised up from the perceptions and actions of social actors? (Bryman & Bell, 2007) The epistemology concerns the knowledge. In philosophy it is the study of the knowledge. Epistemology is “an area of philosophy that is concerned with how knowledge is established” (Kent, 2007, p. 565). A central issue in epistemology is the question of whether or not the society should be examined according to the same rules and procedures as the natural sciences.
For the ontology assumption, we chose to see the social world with the point of view of the constructionism rather than with the one of objectivism. Indeed, constructivism states that social phenomena are in a constant state of revision, that the social reality is not definitive and that the knowledge is viewed as indeterminate contrary to objectivism which views that social phenomena have an existence that is independent of social actors (Bryman & Bell, 2007). As the luxury field is constantly changing because it is based on trends and fashion, we can say that our main ontological position is constructionism, because social actors have an important play role in the way luxury evolve.
The epistemology taken in our study is interpretivism and positivism. Interpretivism means that there is a fundamental difference between the study of people and society and the world around them. Interpretivism involves that the world is socially constructed. It is composed by individuals that have different vision of the reality based on their own values, and varies overtime due the fluctuation of social interactions (Bryman & Bell, 2007). It is the contrary of the positivism approach for which the world is constructed with laws and elements that are measurable, independent from social factors and that can be studied with an objective point of view (Bryman & Bell, 2007). Our research is based on both of these views because it relies on consumers who may be rational and irrational at the same time, so our research studies people and society and that is why it can be viewed as interpretisvist. However, we also measure emotions in our questionnaires thanks to scientific made scales, so we base our measurement on scientific rules and that is why we can say that our research is based on
Chapter : THEORETICAL METHODOLOGY
& Elsa SNAKERS Experiential marketing and luxury goods’ consumers
positivism. It is not the realism approach which states that we can understand the social world if we identify through practical and theoretical work of social sciences the structures that generate this social world (Bhaskar, 1989). We chose interpretivism because it respects the diversity between people and as our study states that there are cognitive and affective people, it reflects better our view. Nevertheless, the measurement of the emotions is based on scientific rules so that is why our research is also a positivist one.
Now that the ontology and the epistemology of our research have been explained, we will tell you what our research strategy and design are.
2.2. Research strategy
We are doing a quantitative and a qualitative research because by using these two methods we are going to understand better the issue we are dealing with (Bryman & Bell, 2003). By mixing the methods we compensate the limitations of each method (Kent, 2007). We will do interviews on the managers of Lancel who designed the new concept of store and we will do a survey on the customers of Lancel in the new and in the old stores.
The survey enables us to collect a large number of data in a limited time that is why we chose to do questionnaires. The questionnaires enable us to measure the emotions, social status and demographical data of people entering the stores. Furthermore, we chose to do interviews on managers of Lancel to better understand and explain their new concept of store which integrates experiential marketing.
2.3. Research design
Our research has a deductive approach. Indeed, we are starting our research from studies already done and from theories already wrote. Thanks to these studies and especially the one on luxury (Atwal & Williams, 2009), we found our hypotheses. So, as we are starting from theories to observe and confirm it, we are having a deductive research approach.
The nature of our research is more exploratory but also descriptive and causal. Indeed, most researches are in fact a combination of exploration, description and investigation (Kent, 2007). Our research has an exploratory nature because at the end it will have generated information, insights and understandings about the marketing experience of luxury goods and how it affects customers‘ emotions. In our research we also describe the new concept of store of Lancel, so we describe what experiential marketing in this particular situation is. We also do an investigation by searching if it is luxury goods, experiential marketing or both which create emotions to customers. We also try to know if cognitive people feel more emotions in the store using experiential marketing than in the one which does not. We can know all that thanks to our qualitative and quantitative data analyses.
Chapter : THEORETICAL METHODOLOGY
& Elsa SNAKERS Experiential marketing and luxury goods’ consumers
In three seconds, her hierarchy of effect changed and she passed from an attitude based on cognition to an attitude based on hedonic consumption. Here her emotions really led her attitude.
Quite the same experience of strong emotions happened to Elise when buying CDs in a disc stores. Usually when she enters a disc store, she says to herself ―don‘t buy more than one disc because you don‘t have too much money to spend on that.‖ She has a cognitive attitude at the beginning, but then she begins to look at what is exposed like the new discs which recently were launched, then she looks at what the disc salespersons like when there are things like ―advised by the salesperson‖ on the disc. She also looks at the covers, when a cover seems interesting like a lot of color or a lot of paintings, she will expect to hear quite psychedelic songs in this CD; or if she sees a cover with a photography new wave or minimalist, she will expect to hear some indie songs in that CD. However, she has strong knowledge about the artists before hearing them. She may have read something about them in a music magazine or on a music website. So her approach is still cognitive. After that, she will listen the different CDs she has chosen to hear and it happens really often that she loves them all and she doesn‘t want to choose between them, she wants to buy them all, because when listening them she feels emotions, it remembers her some moments of her childhood, some trips, some good moments spent with her friends. She can feel sad or happy while she listens to just a song… Really often, she goes out of the store with all the CDs she listened, because her emotions were too strong and she couldn‘t resist not buying them all. She listened to her emotions more than to her thoughts.
These experiences we had about emotions are important to know why we studied that subject of emotions and experiential marketing. Elsa was touched by the aesthetic of the product and the relation it has thanks the history of the brand or the touch it had on her skin. Elise was touched by the visual which can be related to the aesthetic and by the sense (what she listened), by the relation (with what the song was related for her: childhood, friends, sadness, happiness…).
We were both touched by the emotions the products produce intrinsically. This was the departure point of our subject for our thesis: the power of aesthetic in the creation of emotions that lead to the purchase decision. However, when we began to search for articles and books about this subject, we discovered experiential marketing trend. We didn‘t know this trend and we found it very interesting because it deals with marketing and emotions. Finally, we found a gap between aesthetic product and experiential marketing and we decided to base our subject on it because it goes further than our first idea and deals with something new.
Chapter : LITTERATURE REVIEW
& Elsa SNAKERS Experiential marketing and luxury goods’ consumers
3. LITTERATURE REVIEW
This chapter will introduce into the different theories that are important within our thesis. A presentation of previous researches in consumer behavior theories, affective intensity, experiential marketing and marketing strategy theories implications will be given to understand the issue of our research. We finalized this chapter by the creation of a hypothetical model which is the guideline of our research. .
3.1. Attitudes in consumer behavior
Consumer behavior is the study of mainly why and how people buy or not a product. It endeavors to understand the buyer‘s decision making process. Belch and Belch (2007, p. 105) define consumer behavior as 'the process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and desires'.
The decision making process has five main steps. Firstly, there is the ―problem recognition » in which consumer perceives a need and becomes motivated to solve a problem. Secondly, there is the ―information search » in which consumer searches for information to make a purchase decision. Thirdly there is the ―alternative evaluation » where consumer compares various brands and products and evaluates the products. Finally there is the ―purchase decision » in which consumer decides which brand to purchase.
What is relevant for our subject is the stage of ―alternative evaluation‖. Indeed, this stage is associated with attitude formation. Belch and Belch (2007, p.117) note that attitudes are 'learned predispositions' towards an object. Attitudes comprise both cognitive and affective elements - that is both what you think and how you feel about something and this will lead to evaluation of the product. Moreover, according to Baron & Byrne (1987), an attitude is a general evaluation of people, object, advertisement or issue and these people, object, advertisement or issue are called ―attitude object‖.
Most researchers agree that an attitude has three components: affect, behavior and cognition. Affect refers to the way a consumer feels about an attitude object. Behavior involves the person‘s intentions to do something regarding to an attitude object. Cognition refers to the beliefs a consumer has about an attitude object (Solomon, 2006). These three components of an attitude can be remembered as the ABC model of attitude. This model highlights the interrelationships between knowing, feeling and doing. In fact, consumer‘s attitudes toward a product can‘t be determined only by identifying their beliefs about it. While all three components of an attitude are important, their relative importance will fluctuate depending upon a consumer‘s level of motivation with regard to the attitude object. Attitude researchers have developed the concept of hierarchy of effects to explain the relative impact of the three components. Each hierarchy indicates that a sequence of steps occurs to lead to an attitude. Three
Chapter : LITTERATURE REVIEW
& Elsa SNAKERS Experiential marketing and luxury goods’ consumers
paradox: the more important the product is for consumers, the more important many of the marketing stimuli are.
3.1.3. The experiential hierarchy
In recent years researchers have begun to stress the significance of emotional response as a central aspect of an attitude. According to the experiential hierarchy of effects, consumers act on basis of their emotional reactions. This perspective highlights the idea that attitudes can be strongly influenced by intangible product attribute such as package design, and by consumers‘ reactions to stimuli such as advertising and even the brand name. Resulting attitudes will be affected by consumers‘ hedonic motivations, such as how the product makes them feel or the fun its use will provide.
One important debate about the experiential hierarchy concerns the independence of cognition and affects (Anand et al, 1998). Two psychologists have very different opinions regarding the subject. On the one hand, Lazarus (1982) defends the cognitive- affective model and argues that an affective judgment is the last step in a series of cognitive processes and also that affect depends on cognition that may occur at the unconscious level. There is first the sensory registration of stimuli and the use of useful information from the memory to categorize these stimuli (Anand et al, 1998). On the other hand Zajonc (1980), according to the independence hypothesis, takes the position that affect and cognition are two separate, partly independent systems: affective response does not require always prior cognition. However the results from the article of Anand, Holbrook and Stephens (1998) tend to advance that the cognitive-affective model, over the independence hypothesis, is an explanation for the formation of affective judgment (Anand et al, 1998). Moreover, we have to understand that the independent hypothesis does not eliminate the role of cognition in experience. It simply balanced the traditional, rational emphasis on decision-making by paying more attention to the impact of aesthetic, subjective experience (Solomon, 1998).
This type of holistic processing is more likely to occur when the product it perceived as primarily expressive or delivers sensory pleasure rather than utilitarian benefits (Mittal, 1980).It is the case of luxury product and this is why we decide to focus on it. Moreover, other theories argue that this processing is also more likely to occur for some people rather other. It depends to their degree of sensibility.
3.2. Affective intensity
As we just saw above, the cognitive and affective process act in interaction, but some researchers argue that the level depends of people. Some give priority to their cognitive resources and other to their affective resources. This is a review of the literature on this subject.
According to Lagier (2002), there is an Aesthetic style (see figure 3.2) defined as the personnel way for a consumer to perceive the aesthetic and experiential dimension of an object, to react about an aesthetic or cultural stimulus. It builds his final attitude. She says that according to our antecedent, we are cognitive or affective persons. So, in
Chapter : LITTERATURE REVIEW
& Elsa SNAKERS Experiential marketing and luxury goods’ consumers
reaction to an aesthetic or cultural stimulus, it leads to the mobilization of individual resources, cognitive or affective. The consequences are Cartesian attitude for cognitive people or the research of emotions, sensations and pleasure for affective people. Moreover, for Genette (1997), aesthetic objects only can create aesthetic experience if the receiver has a physical or technical capacity of reception. Then, according to Larsen (1984), there is an affective intensity. The affective intensity is an individual and structural component that has been presented since the childhood. It is an aptitude which enables to precise the force of reaction in front of emotional stimuli. It appeared like an important variable for the marketing researchers interested by affective reactions. Indeed, according to the author, it allows to explain individual differences in the intensity of their answer to the same emotional stimuli. He says that it is a regular and stable trend of the individuals that happen with all emotions. Individual who feel positive emotions strongly will also feel negative emotions strongly. Also, it is not linked to the frequency with which individual feels affective reaction but the way they feel it.
Thereby some people are affective (they cry during movies…) so they are predisposed to feel strong emotion that surpass their cognition contrary to some other people. Those consumers are very sensitive to aestheticism and perception. They have cognitive thought process without seeing the product. They are sure of their beliefs but when they see the product, this cognition is dominated by emotions. In a marketing point of view, it means that the stimuli that create emotion must be valorized to catch their attention. More than physiological stimuli (touch, hearing, etc…) they must stimulate psychological resources, emotions and feelings. This is where experiential marketing will intervene.
Figure 3.2 Conceptual framework of the perception of art and luxury products, Godey & Lagier, 2005, p
Cognitive style
Affective style
Mobilisation of individual cognitive ressources
Mobilisation of individual affective ressources
Comparison of the object with references Underdstanding, interpretation of the object ( color, design, composition..) Area of exposition Price, financial value
Research of sensations, emotions, pleasure escape Ask for discovery, adventure Want of variety