ECONOMIC CRISIS- SURVIVAL & GROWTHEXPERIENTIAL MARKETING: A STRTEGY IN TOUGH TIME

Fati ShafaatArif SultanPreeti Sagar Pathak

Abstract

Complexity of modern business requires managers to strive for innovative strategies to acquire and retain customers in any product market field. As acquiring new customers is getting costlier in this crisis, business organizations have offered continuity/experience programmes to retain/reward existing customers and maintain relationships. Today experiential marketing is the new tool which brands like to follow. Whether durables, non-durable and FMCG or service sector, everyone wants to give an experience to their consumers. For e.g. if a consumer wants to buy a motorcycle, he would like to touch, feel, relate and experience the product, prior to buying the same. The product or service that a consumer experiences is really important for the company to create or change the mindset of the consumer. The number of promotional tools like kiosks, stalls, free sampling etc. have increased tremendously in the last decade. Even the consumer want to test the product prior to buying it for e.g. even a pack of biscuits. It’s the experience which is attracting the consumers towards the brand. In a market crowded with brands, models and multiple options, how could one create a difference – this was a challenge faced by many companies in the Indian market.  The focus on brands and the importance of brands is a growing trend amongst business owners and business managers in India. This is hardly surprising, because a strong brand experience is an asset for any business generating income and creating business value. Moving beyond traditional "features-and-benefits" marketing, Schmitt presents a revolutionary approach to marketing for the branding and information age. This article covers all the aspects of experiential marketing which helps the company to improve its growth & sustainability in this tough time.

Economic Crisis & its impact

The Economic crisis of 2007–2009 has been called by leading economists the worst financial crisis since the Great Depression of the 1930s. Economist Peter Morici has termed it "The Great Recession. It contributed to the failure of key businesses, declines in consumer wealth estimated in the trillions of U.S. dollars, substantial financial commitments incurred by governments, and a significant decline in economic activity. Many causes have been proposed, with varying weight assigned by experts. Both market-based and regulatory solutions have been implemented or are under consideration, while significant risks remain for the world economy over the 2010-2011 periods. The purchasing power of the mass of the population grows rather slowly under capitalism. There is thus a constant contradiction between the rapid growth of producing power and the much slower growth in consuming power in society. This periodically results in a crisis, in the inability of society to ensure that its consuming power matches its productive power. Periodic crises remain therefore an integral part of capitalism.

The challenging economy is putting consumer companies such as airlines, banks, and retailers in the difficult position of cutting back the service levels that customers have come to expect in recent years. These companies are closing retail locations, reducing hours of operation, and making do with less staff in stores and call centers.

Causes of Financial Crisis:

High government spending due to: Public subsidies for businesses Infrastructure spending Lack of fiscal discipline

Insufficient tax revenues (T) due to:

Poorly developed tax systems

Lack of tax enforcement

Money supply (M) growth too high due to:

Lack of independence of central bank

Political pressure on central bank to accommodate fiscal deficits

Pressure on Exchange Rates

CA deficit and inflation cause pressure in forex markets on currency to depreciate.

Government does not want that due to:

Higher import costs

Loss of prestige

Global Imbalances

Large mismatches in the current account positions

Poor Regulation

Shadow banking institutions Hedge Funds

Boom in the Housing Market

Speculation

Impacts of Economic Crisis Information Technology Investment Exchange Rate Foreign Exchange Outflow Stock Market Real Estate & Exports

Survival through Experiential Marketing

“Experience is a great teacher, as the saying goes - and most event pros would agree. After all, it’s from experience that we all learn what works and what doesn’t. The Value of "Moments of Truth"- It’s much harder, more expensive, and more time-consuming to get a new customer than to keep an existing one. “The value of physical interaction is six to 10 times more effective than a monologue.”—Neisser

‘A customer is the most important visitor. He is not dependent on us. We are dependent on him. He is not interruption on our work. He is the purpose of it. He is not an outsider on our business. He is a part of it. We are not doing a favor by serving him. He is doing us a favor by giving us the opportunity to do so’ - Mahatma Gandhi, 1890

Today in this competitive environment companies want to retain their customers because the value of physical interaction is six to 10 times more effective than a monologue. Many research studies have proven that the best way of creating and retaining the customers is by building strong brands experiences. Bernd Schmitt presents a battery of business cases to show how cutting-edge companies use "experience providers" such as visual identity, communication, product presence, Web sites, and service to create different types of customer experiences. The key goal of marketing is to develop deep, enduring relationships with all people or organizations that could directly or indirectly affect the success of the firm's marketing activities. Thus experiential relation marketing paves the way for attaining this goal. It is no longer enough to merely sell products and services today, successful business engage their customers on both intellectual and emotional levels. Long after a product has come and gone, long after a service has been delivered, customers will remember the experience they had in acquiring them. Today customers expect to interact with products in such a manner as to reveal their behavior, features and advantages. Schmitt shows how managers can create holistic experiences for their customers through brands that provide sensory, affective, and creative associations as well as lifestyle marketing and social identity campaigns. Experiential Marketing is in a way an extension of consumer oriented marketing. It uses brand relevant experiences to appeal to both the rational and emotional buying triggers of the intended audience. The customer experience has emerged as the single most important aspect in achieving success for companies across all industries (Peppers and Rogers 2005).

For example, Starbucks spent less than $10MM on advertising from 1987 to 1998 yet added over 2,000 new stores to accommodate growing sales. Starbucks popularity is based on the experience that drove its customers to highly recommend their store to friends and family. It refers to actual consumer experiences or interactions with products for the purpose of driving the sale of that product – i.e. marketing – not merely the consumer seeing idealized experiences in a TV, print, or radio ads.

Experiential marketing is the difference between telling people about features or benefits within the confines of the thirty-second TV spot and letting them experience it and get their A mindset. A focus on creating fresh connections between brands and consumers out in the world where things happen. Connections that lead to increased sales and brand loyalty. Experiential marketing is a way of creating interactivity and adding the value of life through participating customers in personal brand experience; they are to be involved the product development process. Experiential marketing is also about choosing customers, selling their dreams. Here dreams are not a product it is about experience. Experiential marketing creates interactivity with customers, is a key ingredient in building an emotional connection between a customer and a product/brand. Non-interactive marketing options confine customers to a “listening” mode; even if the presentation has some flair, the opportunity for a truly personal, customized experience is lost.

Another example of Experiential Marketing is Mahindra in India, Mahindra Tractors wanted to launch their Hy- TEC brand which was a strong hydraulic tractor aiming to help farmers saw the field. To show this technology to the farmers they engaged them through a technique in which sensors were fixed to the hydraulic and a large LCD monitor was placed for the farmers, which captured the movement of the cultivator on an ECG graph. This activity was easily understood and remembered by the farmers and the sales graph was tremendously increased. Take the case of PEPSI they are in business of creating experiences for consumers through events, placement of visicoolers, everything.

Experiential marketing has the ability to unite traditional communications, online communications and now in store/ in branch experience programs with category sales lifts that exceed 3% - 6%. IMS International research shows that mass marketing campaigns reach large numbers of target consumers, but experiential marketing campaigns have strong impact on them. Because of this interactive nature, experiential marketing allows brand benefits to be demonstrated live. More target customers go from exposure to recalling the experience to thinking differently about the brand, which elicits greater gains on both attitude and purchase behavior. For e.g.; Jet Airways has introduced a menu especially for diabetics, which make flying with them a pleasant experience for a person suffering from diabetes. The benefit for Jet: a loyal customer.

Experiential Marketing: Four Key Characteristics

A Focus on Customer Experience

In contrast to narrow focus on functional features & benefits, experiential marketing focuses on customer experiences. Experiences occur as a result of encountering, undergoing or living through things. Experiences provide sensory, emotional, cognitive, behavioral & relational values that replace functional values.

Focuses on Consumption as a Holistic ExperienceExperiential marketing do not think shampoo, shaving cream, soap and perfume. Instead they think ‘grooming in the bathroom’ and ask themselves what products fit into this consumption situation and how these products, their packaging, and their advertising prior to consumption can enhance the consumption experience.

Customers are Rational and Emotional AnimalFor an experiential marketer, customers are emotionally as well as rationally driven. That is while customers may frequently engage in rational choice; they are just as frequently driven by emotions because consumption experiences are often “directed toward the pursuit of fantasies, feelings and fun.” (Holbrook and Hischman 1982).

Methods and Tools are EclecticIn contrast to the analytical, qualitative, and verbal methodologies of traditional marketing the methods and tools of an experiential marketer are diverse and multi-faceted. In a word, experiential marketing is not bound to one to one methodological ideology, it is eclectic. They may be analytical and quantitative (such as eye-movement methodologies for measuring sensory impact of communication). Or they may be more intuitive and qualitative (such as brain-focusing techniques used for understanding creative thinking)

Key Drivers of Experiential Marketing

Experiential Marketing

Methods are eclectic

Customer Experience

Consumption is a holistic experience

Customers are rational and emotional animals

Fortunately there are new forces emerging in the marketplace - the Internet, social networking, grass roots programs have created a focus on consumer experience as paramount to doing business. And marketing must be based on the consumer experience and developing a relationship with your brand. In a retail environment, this could include lighting, background music, window displays, paint color and much more.

1. Make Immediate Sales

Events that integrate entertainment with the chance to try a product are very popular. For example, home parties can be used to give customers the opportunity to experience the benefits of a product they can't buy in stores. In the Jack Morton survey, nearly 85 percent of women said they would bring family or friends to a live marketing experience, and three-quarters said they'd tell others about it. It's the event itself that separates experiential marketing from traditional sampling (such as mailing a trial-size product to customers along with a coupon) because the fun and excitement of participating entices customers to buy.

2. Launch a New Product

Product launches can cost millions, but for small-business owners on more modest budgets, putting their product in front of just the right people can be a low-cost way to attain lift off. They can hold a party in a store or restaurant, for example, and invite their best prospects. And don't overlook the opportunity to include press, because for members of the media--just like other consumers--seeing is believing.

3. Stand out in a Competitive Field

Some products just need to be experienced first-hand. For example, one toy inventor was delighted to get his product placed in stores, but then it just sat on the shelves, lost among thousands of other products. It wasn't until he began experiential marketing--exhibiting at craft shows and taking his new toy to kid-friendly events--that the product took off. That's because children got to see it and play with it without other toys competing for attention. Products that are new and quite different can also benefit from experiential marketing at consumer or trade shows where customers can actually see them in action. It's easier to understand the benefits of a new technological product improvement, for example, when it's experienced rather than read about.

3. Get People talking

Like ripples in a stream, a positive product experience is sure to make waves with ensuing recommendations and endorsements. While your experiential marketing event may directly touch only a relatively small number of people, it has the added impact of building word-of-mouth. The Jack Morton survey revealed that eight out of 10 people who'd actually participated in experiential marketing in the past said they had told others about their experience. So not only will you have an effective interaction with customers and create a memorable experience with your product, you'll have the added bonus of positive word-of-mouth and an unofficial workforce of salespeople spreading the good word. Following are the other key reasons for movement of companies towards experiential marketing-

A Strategic Framework for Managing Experiences

This enables companies to strategically manage a customer's experience with a brand and by doing so, achieve a truly customer focused management concept. To accomplish this, a framework is required based on clearly defined company objectives. So far, the following five steps have been suggested in the literature that should help managers understand and manage the "customer experience":

The two most important concepts of experiential marketing are: strategic experiential modules (SEMS) and experience providers (Ex-Pros)

Strategic Experiential Modules SEMs

SEMs are used by the managers to create different types of customer experiences for their customers. The term module has been borrowed from recent work in cognitive science and the philosophy of mind to refer to circumscribed functional domains of the mind and behavior. The experiential modules to be managed in Experiential Marketing include sensory experience (SENSE), affective experience (FEEL), cognitive experience (THINK) , physical experiences, behaviors and lifestyles (ACT), and socio-identity experiences that result from relating to a reference group or culture (RELATE)

SENSEThe sense marketing appeals to the sense with the objective of creating sensory experiences, through sight, sound, touch, taste, and smell. SENSE marketing may be used to differentiate companies and products, to

Drivers towards

Experiential Marketing

Brand Image

Interactive Experience

Customer Satisfaction

Product Information

Emotional Connection

Market Demand

Perception

Creates Value & reduces customer acquisition cost

motivate customers and to add value to products through aesthetics or excitement. e.g.; Nokia mobile phones, Procter & Gamble's Tide Mountain Fresh detergent.

FEELFEEL marketing appeals to customer’s inner feelings and emotions, with the objective of creating affective experiences that ranges from mildly positive moods linked to a brand (e.g.; for a non-involving, non-durable grocery brand or service or industrial product) to strong emotions of joy and pride (e.g.; for a consumer durable, technology, or social marketing campaign) e.g.; Hallmark, Campbell's Soup

THINKTHINK marketing appeals to the intellectual with the objective of creating cognitive problem-solving experiences that engage customers’ creativity. THINK appeals to target customer’s convergent and divergent thinking through surprise, intrigue, and provocation. A good example of think campaign is Microsoft’s campaign, “Where Do You Want to Go Today?” e.g.; Apple Computer's revival

ACTACT marketing enriches customer’s lives by targeting their physical experiences, showing them alternative ways of doing things (e.g.; in business-to-business and industrial markets), alternative lifestyles and interactions. E.g.; “Nike’s Just Do It” has become a classic of ACT Gillette's Mach3marketing.

RELATERELATE marketing contains aspects of SENSE, FEEL, THINK, and ACT marketing. However RELATE marketing expands beyond the individual’s personal, private feelings, thus relating the individual to something outside his/her private feeling. RELATE campaigns appeal to the individual’s desire for self improvement (e.g.; a future “ideal self” that he or she wants to relate to). E.g.; Tommy Hilfiger

The Implementation Tools of Experiential Marketing: Ex-Pros

The implementation of the strategic SENSE, FEEL, THINK, ACT, & RELATE modules occurs by means of what Schmidt call “experience providers” (or Ex-Pros). Ex-Pros include communications, visual and verbal identity and signage, product presence, co-branding, spatial environments, electronic media, and people. To create an experience, Ex-Pros must be managed in three ways: (1) coherently (i.e.; in an integrated fashion); (2) consistently over time, and (3) by paying attention to detail and using each Ex-Pro to its fullest potential for creating the experience. These are the most important ingredients of experiential marketing Marketers who leverage experiential marketing to generate word of mouth need to be passionate advocates of delivering not just buzz-generating experiences but good buzz-generating experiences. There’s an old saying that if you have a good experience, you’ll tell two friends, but if you have a bad one, you’ll tell ten.

E x-P r o s

Enriching vs. Simplifying

SENSE

FEEL ConnectingBroadening Vs

THINK Focusing

ACT

Intensifying

Vs

Diffusing

RELATE Separating

Why Experiential Marketing

Creative experiential marketing, when applied correctly, will lead to greater impact for the consumer, increased effectiveness for the advertiser, and even cost savings relative to traditional advertising or marketing techniques. Through experiential marketing and live experiences with products & services greater number of customers are more satisfied with the sales experience, leading to increased customer satisfaction and brand loyalty. Today’s competitive world is marked by declining customer loyalty and organizations that need to gain a competitive edge have to see world through their customer’s eyes. They need the new mantra called Customer Experience Management to influence the customer minds to favor one brand over the other. The focus should be to create pleasant experiences at every touch point. Powerful experiences will linger in the customer’s mind which persuades them to make frequent visits and become advocates of the brand. A customer with a positive experience is sure to give good feedback on the brand to his friends and colleagues. Customer Experience Management (CEM) can help a company to create customer advocates, and as a result, help acquire and retain customers and drive profit margins. With Responsive CEM, a business organization can:

Increase revenue and profit margins by identifying new revenue opportunities

Reduce customer churn by using customer insights delivered to companies desktop to improve customer experiences.

Maximize up-sell and cross-sell opportunities by listening to customers.

Improve decision making by accessing real-time customer information from the front lines.

Minimizes marketing and sales costs by reducing customer acquisition cost and increased customer loyalty in terms of increased visits.

Minimize risk of customer defection and program failure

Identify at-risk customers before they defect to competitors. Increase the likelihood of success of corporate programs by reacting immediately to real-time customer

insights into new product or service.

Respond to changing business realities by identifying behavior patterns directly from the most powerful asset—the customer—and reacting accordingly.

Enhance corporate & brand reputation

Improves customers’ perceptions by allowing them to communicate with the company how they want and when they want, showing them that their feedback is important.

Deliver the promises by gaining a holistic view of customers’ experiences as they relate to all parts of the business, and measuring how all employees—from sales to tech support—are delivering that promise.

Build and increase advocacy by providing consistency in what the is delivering.

Reduces Employees Turnover

Offers employees the power of making decisions and solving customer problems at the point of interaction itself without having to go over to his or her manager or management committee.

Ensures decrease in HR training and recruiting costs as the employees attrition is very less compared to organizations without CEM.

Ways of Creating Delightful Experience

In a highly competitive business environment, new or innovative products or services cannot be long –term differentiators for organizations. The solution lies in enhancing the customer experience to create a relationship that goes beyond the loyalty generated by any objective assessment of a brand’s value. This is because ultimately the power of brand lies in the minds of the customers, in what they have experienced and learned about a brand over a period of time. Delightful customer experience results in revenue to the organization and more profits. In order to create delightful experience to the customer and make them brand loyal, companies must focus on the following mantras;

1. Create a Customer Experience StrategyThe strategy includes- developing a strong workforce to interact with customers, processes that are proactive and focused on the customer requirements, and the right type of technology that drives automation and effectiveness to the organization’s value chain. E.g.; Kaya Skin Clinic of Marico Industries has a unique way of creating new experience that goes beyond just selling their skin care products and services. The company has hired renowned dermatologist who view the individuals visiting their clinics as ‘experiences’ and not as patients.

2. Empower the Customer Focused Workforce

Customer experience can be created only through an integrated workforce that well trained empowered and properly communicated through a systematic process. The employee should be motivated to understand and deliver the right type of customer experience that the organization wants to create. Cognizant, one of the IT majors celebrates its major milestones with employees usually by giving them a choice of gifts, such as TVs, DVDs, and Music Systems etc. This is because company believes that employees delight is the basis for creating great customer experience.

3. Automate for Efficiency and Customer Satisfaction

The modern way of communication through mobile phones, the personal digital assistant, e-mail, speech recognition and other advanced technologies have now become a part of everyone’s life. These tools have improvised the customer relationship. Automated systems allows the company to establish a primary contact point for the customers to use in placing orders, resolving conflicts and learning how to use the product.

4. Provide Anywhere and Anytime Access

Today customers interact with a company through a variety of channels, from stores to call centers, and the web. To effectively manage these interactions, companies need to integrate information, processes and policies across all channels so that the customers can access them. Companies can develop an integrated system, preferably through Electronic Data Interchange (EDI), for processing orders.

5. Make it Personal

The growth of any business is associated with the strong customer base it creates over a period of time. People show loyalty to those organizations which make them feel important. So in order to create a positive customer experience, companies should view personal contacts, not as a one time affair, but as a means to establish a long-term relationship.

6. Enable Proactive Customer Interaction

Proactive customer care is a practice that is designed to pre-empt inbound calls and lessen call volume by delivering valuable information to the customer before the customer feels a need to make a call to the company. Southwest Airlines has a unique way of dealing with its customers. It formed a team of workforce, namely “Customer Service Communication Team”, to deal with its customers.

7. Evaluate and Monitor for Continuous Improvement

By identifying the most profitable customers, companies can develop proactive strategies that maximize revenue potential. Meeting such customer’s expectations maximizes the life time value of the company from such customers. Even if these services cost the company more, it helps to reinforce the company’s brand identity and customer value proposition. Continuous monitoring and real time reporting allows managers to solve individual problems and increase customer satisfaction.

Current Trends on Experiential Marketing

The study, the Experiential Marketing Survey conducted by Sponsorship Research International (SRI) for Jack Morton Worldwide, found that 43 percent of women rated experiential marketing the most likely to cause them to purchase a product or service quickly, compared to traditional advertising channels (20 percent) and direct mail (37 percent). Generation Y respondents aged 18-23 of both genders also rated experiential marketing the medium of choice for influencing purchases, at 36 percent--just ahead of direct mail and traditional advertising (33 and 32percent respectively). Following figure shows the above findings-

Source: Sponsorship Research International for Jack Morton Worldwide (2005)

According to the survey, the top two factors that make experiential marketing more enjoyable for consumers are on-site representation and the ability to share the experience with others. Respondents also preferred smaller events in intimate settings to large events with too many people. Nearly 9 out of 10 consumers agreed that participating in a live event marketing experience would make them more receptive to further advertising supporting the brand they were engaged with.

Research conducted by Cap Gemini Ernst & Young on car buyers

Plastindia 2009 Beats all records at a recession hit marketplace.AC Nielsen-ORG MARG ranks this triennial expo at par with any other International Fairs, the second best plastics fair in the world”

Plastindia 2009, promoted by Plastindia Foundation, has organized a six-day event at Pragati Maidan, New Delhi, from February 4 and 9. This received an overwhelming response from exhibitors all around the world including India There were about 20 ‘country?Pavilions’ at PLASTINDIA 2009. AC Nielsen -ORG Marg. pioneer in market research in India has ranked this triennial expo at par with any other International Fairs and now\the second best plastics fair in the world.Participated in big numbers at the mega event and availed the benefits of theInternational platform. One of the ITPO officials confirmed over 17 crores of revenue towards space at Pragati Maidan by Plast India Foundation, making the event the second biggest after India International Trade Fair at Pragati Maidan.

Different Companies Implementing Experiential Marketing

Indian Experiences: We have Indian experiences in this context-

1. The launching of SHELL brand of two wheeler oil-SHELL 21. The objective was to provide certain experience which ad could not provide or deliver. The USP was purity, colorless, odorless. They carried out these experiences in 25-30 cities with the oil. Two wheeler driver could see, smell through experiences, this was done in petrol pumps. Over 16 lacks consumers went through these experiences. It was measured as parameter of trials and repeat purchase rate.

2. Hindustan Lever is one of the best examples of the mind shift that explains experiential marketing. They targeted children for PEPSODENT in 96. They decided to take the pepsodent experience through a positive dentist interaction. They targeted schools all over the country. They did in the following manner: a) They hired dentists who gave personal and audio visual interaction b) Taught about brushing, good oral habits. c) Check ups, given colorful edutainment booklets. d) Given dental forms to kids. e) Setting up kiosks with touch screen where a kid can have all queries, experiences.

Preference Response (%)

HUL did these experiences in 25 cities targeted 2.5 million kids. These exercises forged a new personalized relationship with kids where pepsodent is being seen as high brand recall product & identified itself with coral care. HUL is also doing these experiences with VIM dishwasher brand.

3. Rebook India In May 1999 consumers were encouraged to try out Reebok’s premium brand DMX shoes. They created related posters merchandise a site were customers was blind folded to cut out visual distraction, given a walkman to cut out noise. DMX placed in one put, in another foot is his. Then he was asked to take a walk & feel the shoe. Feedback was taken in a form. They targeted 8793 consumers from there converted 708 consumers as their purchaser.

4. NIIT: This institute wanted to change its image from career building course provider to high tech provider. It launched ‘Java Cafes’ in engineering colleges after sending volunteers to targeted colleges to quiz students on their interest. They devised one hrs workshop with presentation on these, which could be done the net. They were given computers with coffee. The idea was to create association bondage with students; they can take something which they have experienced here. NIIT extended 20 colleges 70% of participants are registered. With this NIIT created an experience in life with promise – high touch.

5. Hutch: Used the surprise element in its DM initiatives by sending a bunch of toffees strung together like crackers to its customers on the occasion of Diwali.

6. ICICI: Another noteworthy example cited is that of a database generation exercise by ICICI. Evidently, a good database goes a long way in direct marketing. In this regard, drawing competitions were organized in schools and a database of parents was created for the ICICI Safety Bonds campaign. This campaign went on to win the Golden Lion at Cannes.

7. TVS: Recently, TVS launched a wedding campaign promoting its bikes, to capture the maximum target audience as the wedding season swept entire Uttar Pradesh and Bihar. Wedding theme based mobile vans were used to create awareness and promote the newly launched bikes, namely, StaR sports and StaR city (ES spoke variant) across 50 districts. The marketing tool was a success, generating more than 50,000 enquiries in 1000 days. This campaign created an instant buzz for TVS in Uttar Pradesh.

8. Whirlpool: To further exemplify, Whirlpool a renowned name in consumer durable market, launched a campaign for Punjab, Haryana, Gujarat and Maharashtra. The audience experienced the brand functions via road shows, kiosks and interactive sessions. This promotion generated over 600 enquires in 75 days.

9. Provogue: Nikhil Chaturvedi, managing director of ACME Clothing, which owns the fashion brand Provogue, believes that the concept of experiential marketing is about touch and feel. He says that Provogue has already embarked on a strategy to give the consumers a different experience from the brand. It has started a Lounge bar, which is a retail outlet that doubles up as a bar at night. This concept, believes Mr. Chaturvedi, is aimed at creating a different experience for a brand which is essentially into clothing. ‘‘We also had fashion shows where only women were invited. This enabled us to give a different experience to our target audience and also gave us an upmarket image,’’ says Mr. Chaturvedi.

Tools used in Experiential Marketing

Experiential marketing often involves events, contests, interactive campaigns to promote, however holistic experiential marketing considers the experience delivered to the customer through the purchase or use of the product or service.Companies undertake a broad range of experiential marketing activities, the most popular being-

Sponsorship Field Marketing;

Free Sampling;

Road Shows;

Test marketing;

Events;

Contests;

Interactive Campaigns;

Exhibition

1-to-1 Meeting

Interactive Displays

Thematic Elements

Immersive Environment (Colours, Sounds &Lighting)

Kiosk

For example, HUL is launching a kiosk of Lipton Tea and Maybelline’s multimarket tour to promote sensational lip colour in a 52 foot tractor trailer converted into 3,800 square feet beauty studio in New York. Olay gets vigorous in boosting consumers market in 2007 with ‘Experiential-Marketing’ strategy unveiling the new ‘Olay White Radiance Intensive Cream’         Olay gets vigorous in boosting consumers market in 2007 with ‘Experiential-Marketing’ strategy unveiling the new ‘Olay White Radiance Intensive Cream’ with 3 Diva brand ambassadors ‘Mai-Natalie-Amm’ to challenge a long-lasting natural fair skin experience nationwide.

Risk Factors

Its primary drawbacks were expensive to implement and needing a strong commitment in terms of resources; time; logistics and management. It is difficult to control and difficult to measure were also put forward by the detractors. Few companies were considered to do it effectively and it is seen as an expensive way to reach customers if there are not clear links between the brand and the chosen event or events. Slight mistake makes the program fail. As everybody knows that experiences are intangible so designing delightful brand image is really a challenge for a company.

Challenges for Companies practicing Experiential Marketing

Experiential marketing's main challenge, when facing off with field marketing, is its search for a new metric to measure effectiveness. Keeping the message consistent is challenging, particularly across sales teams, channel partners, online and offline venues, and sometimes over long sales cycles.

Identification of the most profitable customers Managerial philosophy,

Technology

Lack of agreement and Cooperation across functions is the biggest challenge in improving customer experience,

Missed Commitments to Customers,

Disappointment and Disillusion,

Fear of bad Word-of-Mouth Communication,

Lost sales and lower market share

Conclusion

Indian markets are getting more complex and demanding, mass media is working less and less. It is clear that in the current marketing approach companies want to make their customers advocate of their products it can only be possible through brand experience. Currently experiential marketing holds 15% of the total advertising expenditure which is expected to grow by another 10% in the coming years. Durable fraternity would spend almost 60% of their advertising budgets on experiential promotions. It is obvious that the most profitable customers in any organization account for almost 30% of a firms profitability. Looking at these staggering statistics it is no wonder that customer retention is high up on the list of organization essentials. The customer centric strategy of the decade - CEM achieves customer loyalty with ease. This is because in CEM customer relationship is the focal point of success. In researches found that 43% of the marketers anticipate increasing their marketing budgets over the next two-three years with only 12% foreseeing a decrease. According to a new research study carried out by international marketing services group MICE Group. Spending in this area is set to grow as marketing budget holders now believe that it offers considerable advantages over other marketing tools, especially in building brand loyalty and encouraging word-of-mouth recommendation amongst consumers. The majority of respondents (80 per cent) described experience-based activities as being important within their marketing mix, accounting for around one third of their entire marketing budget; a percentage set to rise in the future. The future for experiential marketing looks bright; with 62% agreeing that it will be "one of the big growth areas in marketing over the next five years". In spite of being risky, companies regularly increases their budget in organizing live experiences, road shows, tractor trailers, and many more.

References

Journals

P. Sreekumar, Customer Retention “A Paradigm Shift from CRM to Total CEM”: Marketing Mastermind Journal, July 2008, pp.16-18

CT Sam Luther, Seven Mantras for Creating Delightful Experience: Advertising Express, Aug 2009: Icfai University Press, pp. 39-46.

V.U. Vinit, “Building Customer Loyalty”: Marketing Mastermind July, 2008: Icfai University Press, pp.39-42.

Journal of Marketing Management, 1999, 15, 53-67

Books

Gordon, Kim. T., “Seeing is believing. Get customers to buy your products by giving them a first-hand experience”

Websites

http://www.thehindubusinessline.com/bline/catalyst/2009/04/23/stories/2009042350020100.htm

http/enc/Wikipedia.org.com

© 2009 ResponseTek Networks Corp.

Distributed by PR Newswire on behalf of MICE Group plc.

Press release local -- Tue 6 Mar 2007 17:26:17. Bangkok--6 Mar--Arc Worldwide