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ESOMAR Newbrief, October 1999

New Thinking

The Experience Economy

B Joseph Pine II and James H Gilmore believe that consumers buy experiences as well as goods and services. Their book, The Experience Economy: work is theatre and every business a stage; published by the Harvard Business School Press; suggests that companies should focus on the experience customers have while using their goods, surrounding goods with experiences that make using them more memorable.

They identify six ways manufacturers can increase demand for their goods in the Experience Economy.

  • Embedding goods in an experiential brand i.e. create a brand image emphasising the experience surrounding the purchase, use or ownership of the good e.g. Nike, Intel Inside, Harley-Davidson.

  • Producing goods experience stagers need. As the demand for experiences grows, so too will the demand for those goods that help enable experiences. This includes goods affecting the senses as well as those propping the event, especially memorabilia.

  • Sensorialising goods i.e. adding elements that enhance consumers’ sensory interaction with them. In addition to obvious goods in this category such as CDs and videos, companies can sensorialise any product by explicitly accentuating the sensations created from its use.

  • Making goods scarce e.g. Beanie Babies. By making the stuffed animals scarce, Ty Inc heightens the experience of possessing one.

  • Forming a goods club. By forming a dub, companies can charge customers for accessing their goods.

  • Staging a goods event. Many manufacturers stage their own experiences when they add museums, amusement parks or other attractions to their factory output: e.g. Cadbury World. Goodyear World of Rubber, Legoland. Not every manufacturer can turn extra space into a paid-for event, but any company can recast production as a plant tour e.g. glass and china factories showing how the products are made. The consumer can be drawn into the process of designing, producing, packaging or delivering the good.

According to Pine and Gilmore the alternative to embracing consumers desires for experiences is to be commoditised.

Through the Loop Consulting Ltd, a UK Marketing Consultancy, has done similar work on the Brand Experience. This is the process of taking brand values and creating from them a “live-the--brand” environment where the consumer becomes more immersed in the brand experience itself, enabling new areas of association and engagement to be introduced. This can work on a number of levels:

  • The experience adds a new communications channel that surrounds the consumer e.g. factory visits and event marketing; Disney World and local Disney stores; NikeTown stores; Starbucks coffee shops; 'Cha' tea shops; Café Nescafé.

  • The experience adds a service element to the product providing a stronger offer e.g. SmithKline Beecham's Nicorette Web site which provides information and a service element to smokers who wish to stop smoking.

  • The experience allows the brand to be extended across seemingly unrelated products and services as the brand is more important than the individual product or service capabilities e.g. Virgin.

When many brand values have become too artificial, too remote and too easily copied, it is time, according to Through the Loop, to look hard at the Brand Experience which seeks to immerse the consumers in the brand and connect rather than distance them.

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