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标题: Interdependence between experience marketing and business strategy
作者: Gupta, Seemas
期刊名称: Journal of Indian Business Research
2015年；第4卷；第3期；页码：170-193
Interdependence between experience marketing and business strategy Introduction
Scholars emphasize the importance of overcoming narrow functional approach in investigating business problems and advocate cross level research ([19] Deshpande, 1999; [67] Varadarajan et al. , 2001). Business operates at multiple levels-business strategy and functional. While business strategy specifies how business will compete in the marketplace ([67] Varadarajan et al. , 2001), marketing refers to the marketing activities and decisions related to generating and sustaining competitive advantage for the business ([17] Dayet al. , 1990). The interdependencies among the various levels of functioning in an organization remain relatively unexplored ([67] Varadarajan et al. , 2001). Yet as the Starbucks example discussed next suggests marketing strategy pursued by business is influenced by its business strategy. Starbucks business proposition was based on the need most people have for a physical place set apart from home and work, a third place where a person can interact with others. This influenced its marketing such that it encouraged consumers to spend more time in the café instead of focusing on turning the tables.
There has been a progression of economic value from product through service to experience. The strategy dimensions relevant for experience marketing are likely to be different from those relevant for product or service marketing. While for product marketing the roots of strategy are in technology up gradation, manufacturing capabilities, new product development and economies of scale, the service organizations are characterized by vision and purpose, customer satisfaction and employee engagement. The dimensions of strategy relevant for experience marketing remain unexplored despite numerous examples of organizations moving up the value chain from product through service to experience. The extant literature on experience takes a functional approach engaging with issues like defining an experience brand and recommending strategies for creating a unique customer experience. The extant literature deals with the psychological process involved in consuming an experience. However, it does not engage adequately with the business strategy variables like competitive advantage, vision and customer orientation. There is no literature that identifies the strategic capabilities companies need to be imbued with to successfully market experiences. For instance, which of the three variables is more important for experience marketing-customer intimacy, product leadership or operational efficiency?
This paper bridges this gap in literature by examining interrelatedness between business strategy and experience marketing. I engage with humanistic inquiry of an in depth case study. In humanistic inquiry the researcher understanding arises from direct personal experience and immersion ([29] Hirschman, 1986). "The aim of humanistic inquiry should be the development of an idiographic body of knowledge consisting of tentative statements about a particular phenomenon" ([29] Hirschman, 1986). The intended contribution of this article is also the focus it brings on research on cross-level dependencies between business strategy and experience marketing by outlining a detailed agenda for future research. I find the six dimensions of business strategy - unique company capabilities, barriers to imitation, customer orientation, employee empowerment, visionary leadership and internal marketing to be interrelated with experience marketing. In the following sections I discuss related literature, research methodology, the case narrative, the strategic propositions derived from the case, the agenda for future research, implications and limitations.
Review of literature
Experience marketing has attracted attention from both practitioners and academicians.
I am tracing some key definitions and conceptualization of the term as evinced in the literature to set the stage for the paper. [31] Holbrook and Hirschman (1982) postulated experiential perspective as an alternative to the hegemonic information processing view to understanding consumer behavior. They conceptualized consumption experience as a phenomenon directed towards the pursuit of fantasy, feelings and fun representing the cognitive, affect and behavioral dimensions, respectively. [51] Pine and Gilmore (1998, p. 98) suggested that experience occurs "when a company intentionally uses services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event". [57], [58] Schmitt (1999, 2003) and [7] Brakus et al. (2009) conceptualized experience as consisting of five dimensions of sense (sensory), feel (affective), think (intellectual), act (behavioral) and relate (relational). Sensory experiences enable customers to satisfy their need for estheticism; feel experiences refer to customers' perceptions of fun and pleasure; think experiences refer to consumers' attempts at broadening knowledge; act experiences reflect customers' personal ties with the brand and the company; and relate experiences involve interrelationships among customers. The crux of experiential marketing paradigm lies in extending the concern of marketers beyond the realm of customer satisfaction to attaching the customers experientially to product or service ([7] Brakus et al. , 2009). [30] Hoch (2002) described experience as engaging, non partisan, pseudo diagnostic, endogenous, and ambiguous and hence seductive. A battery of researchers conceptualized experience as a service dominant logic, a paradigm shift from product centric view of creating value ([68] Vargo and Lusch, 2004; [54] Prahalad and Ramaswamy, 2004). For the purposes of this paper experience is defined as:
[...] phenomenological in that it deals directly with events or phenomena as the consumer experiences them rather than focusing on anatomical structures, the neuro chemical processes or the unconscious motives that endow experiences with salience ([52] Poulsson and Kale, 2004, p. 271).
Phenomenology assumes that a mental event can be best understood if we look at it directly as it was experienced rather than through the specialized optics of a particular discipline ([15] Csikszentmihalyi, 1990, p. 26).
Experience marketing literature has many cross currents but few broad themes nevertheless emerge. One stream is rooted in consumer behavior and perceives cognitive, sensory and novel stimulation as motives behind experience ([31] Holbrook and Hirschman, 1982; [28] Hirschman, 1984). It further believes that emotions play a fundamental role in consumption experience ([56] Richins, 1997) and classifies experiences into four types - sensory, social, emotional and intellectual. This stream considers consumer interaction at the heart of experience and examines the whole consumption experience from pre purchase through to disposal ([31] Holbrook and Hirschman, 1982). It highlights that consumption experiences are shared rather than individual in nature ([64] Tynan and McKechnie, 2009); provide utilitarian value apart from hedonistic value and involve both nostalgia as well as imagination ([32] Holbrook and Schindler, 2003). It explored experiential themes of self renewal and harmony with nature as central to evaluation of extraordinary hedonic experiences. One segment of this stream pertains to application of experience marketing in specific contexts and industries like retailing ([69] Verhoef et al. , 2009); arts ([37] Joy and Sherry Jr, 2003); tourism ([42] Leighton, 2007); leisure ([2] Arnould and Price, 1993); fashion ([62] Thompson and Haytko, 1997); and hospitality ([24] Gilmore and Pine, 2002). It explored the cultural meanings, motives, themes, and conceptual realms in specific experience contexts and broadly found them to be valid. This literature appropriates cultural meanings in different contexts like fashion, retail and arts and finds that combination of entertainment, therapeutic and spiritual growth are at the frontier of retail experience.
Second stream consists of step by step guides to creating and marketing experiences. It has its origins in the challenges that practitioners face in differentiating goods and services ([8] Carbone and Haeckel, 1994) and the recognition of importance of experiences in developing customer advocacy ([1] Allen et al. , 2005). This stream driven by practitioner and consulting gurus is rich in examples and offers guidelines for customer experience management like identify themes to create consistent impressions; tangibilise experience with memorabilia; engage all five senses; create a memorable event ([51] Pine and Gilmore, 1998; [58] Schmitt, 2003) be personally relevant, offer an element of surprise, engender learning, engage the customer ([52] Poulsson and Kale, 2004); and orchestrate all the clues that people detect in the buying process ([5] Berry et al. , 2002). Four conceptual realms of experience marketing-entertain, educate, escape and estheticism were proposed and emphasis was laid on creating memorable encounters not by improving functionality but by layering an enjoyable experience atop the existing service.
The third stream is rooted in branding and communication literature and advocates narrative advertising for communicating experiences as narrative thought is a predominant cognitive mode of comprehension used by consumers to interpret experiences ([47] Padgett and Allen, 1997; [14] Crosby and Lunde, 2008). It postulates that experience brands send more emotional and complex messages as
consumers do not process experience at rational and conscious level. [57] Schmitt (1999) conceptualized experience as consisting of five dimensions - senses, feel, think, act and relate. Sensory experiences enable customers to satisfy their need for estheticism; feel experiences refer to customers perceptions of fun and pleasure; think refers to attempts at broadening knowledge; act reflects personal tie with the company and relate involves social networks and interrelationships among customers which then produces feeling of belongingness to society. Based on this work [7] Brakus et al. (2009) further conceptualized brand experience as consisting of four dimensions of sensory, affective, intellectual and behavioral and constructed a scale to measure them.
The extant literature deals with experiences from a consumer and brand perspective and is thus restricted to functional domain of marketing. Just like successful marketing of product requires organizational capabilities, functional skills and strategy distinctly different from that of marketing of services, experiences would also have unique strategic imperatives for organizations. Not only is the strategic perspective of experience marketing scant, but empirical research is also limited ([64] Tynan and McKechnie, 2009). The failure of the few scholars who have illustrated approaches by firms in creating customer experiences ([1] Allen et al. , 2005) to paint the full picture for reasons of commercial sensitivity leads to only a partial understanding in this area ([64] Tynan and McKechnie, 2009). The present study aims to bridge this gap in the literature by arriving at the strategic propositions of experience marketing by using a holistic in depth investigation of a case study which is a multifaceted examination of a situation. I examine data that are subjective abstractions of a much more complex underlying reality ([10] Christensen and Carlile, 2009). The use of case approach reflects the call by organizational scholars such as [10] Christensen and Carlile (2009) for more emphasis to be placed on developing new theories from case based empirical data, rather than relying on essentially quantitative, deductive, theory-testing research paradigms. [71] Yin (2009) argued against case methodology being microscopic because it lacked a sufficient number of cases by saying that the use of two, ten or 100 cases does not transform a multiple case into a macroscopic study. Moreover, it is the microscopic view which makes a case study a powerful research methodology. Because of the microscopic view even single case studies are a potent research technique as they enable seeing interrelatedness between several complex variables and hence promote a holistic understanding of the phenomena under investigation ([23] Flyvbjerg, 2006; [71] Yin, 2009). Increasingly branding research uses qualitative and conceptual approaches. Theories can be developed or extended using typologies ([21] Doty and Glick, 1994); principles or propositions ([41] Kohli and Jaworski, 1990); or case research ([71] Yin, 2009). I use the latter two approaches to build theory. The general applicability results from the set of methodological qualities of the case and the rigor with which the case is constructed ([71] Yin, 2009). Moreover, the propositions outlined are amenable to further evaluation thus aiding generalizability. The placement of The Park Hotels (TPH) in the hospitality industry which has traditionally been considered as an experience industry coupled with its distinct positioning as a niche boutique luxury
hotel makes it an ideal choice for a case study on experience marketing. TPH is a powerful and interesting narrative of a brand which differentiates itself from its much bigger rivals by creating unique customer experiences. We also analyzed quantitative metrics to gauge the performance of TPH. As Table I [Figure omitted. See Article Image.] show TPH revenues are much less than rivals which is understandably due to the lesser number of hotels it operates. TPH EBITDA (as percentage of revenues) is consistently higher than that of Taj but is less than that of Leela and Hyatt. This is probably because TPH does not enjoy economies of scale and has less standardization across properties. But TPH has greater PAT (as percentage of revenues) which is dues to its operational efficiency particularly in labour cost. None of these evidences were conclusive hence researchers compared the market capitalization of Taj and Oberoi with the valuation of TPH by Credit Suisse (TPH is not listed) for 2008-2009. TPH is valued at Rs 15 billion which is an EBITDA multiple of 15.41 and PAT multiple of 35.21. Taj and Oberoi's market capitalization is an EBITDA multiple of 4.95 and 8.28, respectively. Similarly Taj and Oberoi have a PAT multiple of 12.18 and 19.88. Thus, TPH has received a much higher valuation as a multiple of EBITDA and PAT. This quantitative evidence establishes the success of TPH as a niche boutique experience hotel and justifies our choice for the study.
The case unfolds various facets of its business like strategy, operations, human relations, marketing and service and thus enables seeing latent linkages across functions and levels. The depth as well as the strategic perspective the case contains has few parallels and provides a blueprint from which others may learn. While this research and case is set in hospitality industry in Indian context, many of the issues are applicable across industry and international boundaries.
Research methodology
I follow the rigorous method outlined by [22] Eisenhardt (1989) and [29] Hirschman (1986) for the study:
A-priori conceptualization. I went with a well defined focus on strategic imperatives of experience marketing. The constructs of business strategy were specified a priori to enable collection of specific kinds of data systematically. Within business strategy the constructs of "competitive advantage," "visionary leadership" and "customer orientation" were identified for study because of their salience for experience marketing. They were explicitly measured in the interview guidelines and field observations and documentary evidences (Figure 1 [Figure omitted. See Article Image.]):
- Competitive advantage. Novelty, surprise, differentiation are central elements in marketing of experiences. It is relatively easy to produce standard product or service but difficult to bring constant uniqueness in customer experience. Experiences are challenging as they engage all five senses, are cognitive as well as emotive, have behavioral as well as relational dimension ([7] Brakus et al. , 2009). Companies that are able to develop unique capabilities that are aligned with unique customer needs have an edge over others ([16] Dalgic and Leeuw, 1994). Firm capabilities are derived from firm resources which together lead to competitive advantage thereby influencing strategy ([25] Grant, 1991; [35] Hunt and Morgan, 1995). Research on resources has a
long tradition in strategy ([18] Denrellet al. , 2003). Companies that base their strategies upon exploiting clearly defined internal capabilities have been adept at adjusting to and exploiting external change ([53] Prahalad and Hamel, 1990). [25] Grant (1991) gives example of how Honda's focus upon technical excellence of four-cycle engine enabled it to straddle success across motorcycles, automobiles and broad range of gasoline engine products.Novel experiences can be imitated by competition; hence firms need to continuously create barriers to imitation to successfully market experience.
- Customer orientation. It is the unwavering commitment to meet the needs of customers. A company that segments and targets markets precisely and then tailors offerings to match exactly the demands of those customers builds intimacy with customers ([63] Treacy and Wiersema, 1993). Customer intimacy enables companies to combine detailed customer knowledge with operational flexibility so they can respond quickly to almost any need. As a result these companies engender tremendous customer loyalty. Customer intimacy engages the customer in co-creating value and makes the experience personally relevant ([51] Pine and Gilmore, 1998). Thus, customer orientation is vital for experience marketing.Service literature has documented the importance of empowerment in superior customer orientation and satisfaction ([59] Schneider and Bowen, 1995; [26] Hartline et al. , 2000). It may be interesting to see its importance in the context of experience marketing. Empowerment can be defined as the process of enabling employees by giving them the power and autonomy to exercise control over job-related situations and decisions ([13] Conger and Kanungo, 1988). Empowered employees often feel more confident in their ability to contribute to the firm's success, a result that fosters creative thinking and problem solving ([40] Kelly et al. , 1996).
- Visionary leadership. Such leaders articulate shared vision of the organization and demonstrate will to execute the vision ([61] Tellis, 2006). They are coaches who believe in the fundamental capacity of people to achieve and their role as facilitators ([4] Berry, 1995). Visionary leaders place brand as the core of the company leading to all stakeholders, especially employees, owning and living the brand in their daily lives ([65] Urde, 1999). [38] Kaikati (2003) also emphasize the need for stakeholder "buy-in". [3] Bartlett and Ghoshal (1994) also emphasized the need for employees to identify with the purpose of the company to be able to contribute to its business goals. Since experience is to be provided by the contact employees, internal brand orientation is of even greater importance in such firms.
Crafting instruments and protocols. Consistent with [60] Stake (1995) and [71] Yin (2009) data was collected from six sources of evidence - interviews, direct observation, participant-observation, documents, archival records and physical artifacts. The present case study being rich provided the opportunity for all six sources of evidence. In depth, open ended and semi structured interviews were conducted with senior and middle level managers across functions. Interviews were conducted with Chairperson, Managing Director, Vice President Engineering and Projects, Corporate Director Sales, Corporate Director Finance, Director Public Relations and Corporate Communications, Director Sales, Two General Managers, Manager Public Relations,
Two Executive Chefs, Manager Events and Entertainment, Area Director Human Resources, Relationship Manager, Associate Director Front Office and Revenue Management and Team from IT department. Hence a total of 17 interviews were conducted lasting from about an hour to several hours and were recorded and transcribed. Interviews with middle management lasted for about an hour each but those with top management (Chairperson and Managing Director) lasted for about three hours each. Visits were made to three hotel properties of the company in three different cities and observations on rooms, bars, restaurants, service, ambience, environment, customer interaction were recorded. To experience the hotel and its bars and restaurants the author stay was organized for two nights each in two properties. Documents on brand philosophy, vision, visual identity, communication strategy, financial summary, tariff policies were studied. Archival data regarding advertisements, promotions, events, media coverage were studied. Consistent with [49] Patton (2002) data integrity was thus achieved with triangulations across methods. Special emphasis was placed on combining quantitative data with qualitative evidence.
Not only multiple methods, but also the study was carried out by multiple investigators. A team of two researchers visited the sites, interviewed people and went through documentary evidences. This enabled analysis of the case from multiple perspectives. Convergent perceptions added to the empirical grounding of the hypotheses while conflicting perceptions kept us from premature closure ([22] Eisenhardt, 1989). Researchers were personally immersed in the phenomenon to understand the case intimately.
The case narrative
This case study presents a narrative approach to complexities of experience marketing embedded in organizational strategy in real life ([23] Flyvbjerg, 2006). [50] Peattie (2001) warned against summarizing dense case study as the value of the contextual and inter-relational nature of forces is lost when one tries to sum up in mutually exclusive concepts.
Background
TPH had pioneered the concept of boutique hotels in India and successfully carved a strong niche for itself. Boutique hotels were typically small that sought to differentiate themselves from large "full service" hotels by virtue of their unique design and highly intimate and personalized service. Sometimes referred to as "design hotels" or "lifestyle hotels", most were stand alone properties as often, these hotels, were converted older properties resurrected by designers, combining the charm and character of an old building with modern design. TPH had seven properties in India each having a distinctive character of its own yet sharing a common spirit and standards of excellence. It had performed better on financial parameters than in its more endowed rivals like Taj, Oberoi, Hyatt, and ITC even during the economic downturn.
TPH came into being in 1967 and operated three hotels in Kolkata, Delhi and Vizag when Priya Paul, took charge of the hotel as its chairperson in 1988. TPH realized that it would have to differentiate to survive in a highly competitive market. The
renovation of The Park Kolkata provided her with an opportunity to test her ideas. She said:
I used the new Chinese restaurant, Zen to demonstrate a new design or a vision for the team. I found the design that had been developed to be very traditional and staid with red and green dragons. We came up with a radical look in black and white and created products that I felt I would enjoy and hopefully others too.
The restaurant opened at the end of 1992 and met with rave reviews. Its success prompted further experimentation. The bar at The Park Kolkata was next. Branded Someplace Else , the bar, hosted live bands. It too proved to be a big hit. Priya Paul told:
During that time most hotels were these bastions of formality with waiters with gloved hands, etc. On the contrary our clubs and restaurants were very refreshing looking and the serving style was much more informal with waiters in colored uniforms designed by top notch designers. We actively encourage our staff to express their individuality in their interactions with customers.
The success of both Zen and Someplace Else prompted Priya Paul to formally articulate a new vision for TPH "leadership through differentiation" and a new mission of "Establishing global standards of product quality and service excellence and enhancing customer experience to make it the purpose of every action we take". But TPH needed to get a buy-in from its people before it could sell the concept of differentiation to its customers. Priya Paul made presentations to senior management on how TPH is a design hotel and what it meant to be a boutique hotel company. Pioneering a new paradigm
The acquisition of two properties in quick succession in Bangalore and Chennai provided Priya Paul with an opportunity to create a new paradigm by opening full scale boutique hotels on the lines of what Ian Schrager (the pioneer of boutique hotel) had done in New York. The new hotel, The Park Bangalore, opened in the year 2000. The hotel's design was a fusion of vibrant colors and landscapes; the first floor was designed to give a feel of cool expanse of sea, the second floor suggested a mountain landscape, the third the look of a jungle and the fourth floor sported the feel of an Oasis in a desert. The unique imagery won it a place among the Tatler magazine's 101 best hotels in the world. The Park Bangalore's lounge bar, the I-Bar , with its low furniture, bean bags and neon colors was described by a leading Bangalore daily as one of the hippest hang out places in the city. Its Italian restaurant, Italia , quickly gained popularity among the discerning foodies of Bangalore and has since won a host of awards including the Best Italian Restaurant award from The Times Food Guide , the Best International Restaurant and the Restaurant of the Year awards from the Taste & Travel Food Lovers Food Guide .
If The Park Bangalore showcased contemporary India, The Park Chennai, built on the premises of the historic Gemini film studios[1] and designed by the American firm, Hirsch Bedner Associates captured the fantasy world of films. While the lobby with its stage like setting evoked the look of a theatre, old movies projected during the evenings on a floating screen located in the atrium and the carpets in the corridors that looked like film reels reminded one of the magic of movies.
The widespread acclaim the company received for the Bangalore and Chennai properties prompted it to build new boutique hotels in Navi Mumbai and Hyderabad. In designing in the former it sought to bring together "East and West and fusing technology with local crafts" and in the latter case it drew inspiration from Hyderabad's history of producing precious stones; the hotel's façade, for example, references the fabled jewellery collection of the Nizam of Hyderabad.
The Park Kolkata focused on further enhancing its reputation as a fun and happening place. A street cafécalled " The Street" , created a vibrant atmosphere right at the entrance. A new cocktail bar Roxy , its retro look a tribute to the swinging 1960s, offered customers a wide variety of cocktails and an enviable choice of cigars. Spread over two split levels, the night club Tantra with its pulsating dance floor and a lounge area called the Santra Room, provided its typically young customers a choice of two bars. While Aqua, a fashionable new bar, indulged the young and trendy with a "Miami" like pool side experience - the open deck, used for sunbathing by the day, became a stage for night time revelry, Someplace Else continued to offer customers its signature live band experience. Vijay Dewan said:
The traditional notion of hotels was one where people came to sleep when they were travelling on business. We asked ourselves can we be more. Can people socialize and get entertained in hotels? Thereafter began our huge emphasis on entertainment, in creating a spa experience, in creating a luxury experience. For us entertainment is a key differentiator.
The company also offered its customers a wide variety of culinary experiences through its exciting range of award winning restaurants. Perhaps due to unique design elements the cost of material and repair and maintenance was much higher for TPH as compared to its competitors (Table II [Figure omitted. See Article Image.]). Empowering people
In 2007, The Park received the international "Gallup Great Workplace Award" for extraordinary employee engagement. Priya Paul explained:
We give our people responsibility far beyond their age. We encourage them to take decisions and back them if they falter.
The Park was the first hotel in the Indian hospitality sector to embrace SAP for managing its human resources. Further, it engineered its technology and other associated systems to enable its people to excel, for example, a single point of contact system in which guests in The Park had to dial a single number for all their needs ranging from in-room dining to housekeeping, laundry, etc. This facilitated the team to provide a personal touch to the services they rendered to the customers. Guests often requested for a specific person to be assigned to their rooms as he knows all their preferences.
Marketing the experience
The differentiated product and service experience enabled TPH to compete against its much larger and perhaps better known rivals. In markets like Navi Mumbai, Kolkata and Vizag it had leadership positions (Table III [Figure omitted. See Article Image.]). It signed contracts with large corporate houses by participating in request for proposals (RFPs). While it won most of the RFPs but it did not get to participate in。