The role of customers has changed from traditional to new owing to macro or specific environmental factors, as shown in table 1, giving rise to overwhelmingly disparate traits from their predecessors shown in table 2. The transition will dominate consumers’ shopping styles in North America, Europe, and Asia in ten years. Therefore, marketing based on those traits caters to the heart of new consumers and is apt to succeed (Lewis and Bridger 2000). The supreme power of new consumers drive the advent of consumers’ realm and so do consumer-focused management philosophies (Austin and Aitchison 2003; Prahalad 2004), including marketing concept, customer satisfaction, customer relationship management , and recently emerging customer experience management. All consumers have a quest for authenticity. The desire for authenticity drives the advent of experience economy (Pine and Gilmore 1998, 2007).
One way to offering authenticity is to stage valued experiences. Customer experience management conforms to this trend and becomes a better way to cater to new
customers’ traits and provide authenticity.
In the experience economy, customers seek impressive shopping experiences in the consumption process, not such fundamental aspects as product attributes, functions, and basic benefits (utilitarian features). Schmitt (1999) presented concepts and theories of experiential marketing including strategic experiential modules and experiential providers by integrating literatures on customer experience, sociology, psychology and the like.
Table1. Drivers from traditional to new customers
Drivers Descriptions Impact on customers References
Society ‧ Consumption for desires above
physiological needs
‧ Change of consumer sensitivity
Treasuring the value added
brought from the brand or
product, authenticity
Lewis and Bridger 2000; Pine
and Gilmore 2007
Economy ‧ The evolution of economic values to
experiences
‧ Commercialization of service
‧ Economic depression
Wanting valued experiences or
choices of dollar value (low
cost, fashion, prestige, or trend)
Pine and Gilmore 1998
Grewel et al. 2009
Technology Rapid developments of the Internet, virtual
simulation, integrated electronic media,
media fragmentation
More accessible to acquire and
share information
Austin and Aitchison 2003;
Lewis and Bridger 2000;Schmitt
1999, 2004; Pine and Gilmore
1998
Competition Aggravating competition due to
commercialization of brands and media
bombarding
More choices of consumers and
more resistance to mass media
Schmitt 1999, 2004; Pine and
Gilmore 1998
Pressure
groups
The rise of organizations for consumers’
rights, anti-media, and brand communities
The rise of consumerism and
resistance to mass media
Austin and Aitchison 2003
Table2. Comparison of traits between traditional and new consumers (Pine and Gilmore 2007; Lewis and Bridger 2000)
Traditional consumers New consumers
Seeking convenience Seeking authenticity
More passive More active
Conforming to the public Seeking personal styles
Less participatory More participatory
Compliance The right to control
Schmitt urged enterprise operators designing brilliant customer experiences to create value for customers by elaborately combining strategic experience modules and experience providers. Building on these spirits, other process perspectives of experiential design such as time dimensions of physical experiences, experience engagement process, and experience bow complemented with experiential matrix to refine customer experience management. Followers including academicians and practitioners agree on experience value creation both for customers and enterprises. By staging valued experiences, customers get indulged in the sweet spot, states of multiple sensory pleasure (Pine and Gilmore 1998), become a wholly person- the ultimate goal of human beings (Lasalle and Britton 2004). With staging sweet experiences enterprise operators will benefit from customers’ loyal behaviors, inclusive of repeated purchase, positive WOM, long-term partnership-being a partner in staging experiences and/or active in defining and implementing their experience motives for enterprises. At that time, customers are employees, and vice versa (Pine and Gilmore 1998, 2007; Schmitt 1999, 2003, 2004; Smith and Wheeler 2003; Carbone 2004; Lasalle and Britton 2004).
The aforementioned enhanced the long-term financial performance for enterprises. In addition, it is due to the complex and original nature of experiences that generates inimitability, rareness, and further competitive advantage for enterprises(Smith and Wheeler 2002). Therefore, enterprises must take the initiative to manage customer experience to obtain their gifts.
As to the applications of customer experience to the business management, it serves as means to building brand equity in experiential marketing (Schmitt 1999 2003).
Customer experience revitalizes and enhances the original brand assets (Carbone 2004).
Brand equity is either coined by wholly new experience designs or reinforced by
integrating new experience designs to the old brand (Smith and Wheeler 2002). The power of brand consists in the hearts of customers, inclusive of all the experiences and feelings by interacting with the brand on a long term basis (Leone at al. 2006). The aforesaid stresses it is of abundant value for enterprises to apply customer experiences to the creation of brand value. Enterprise players need to assess the relationship between their customer experiences and brand values continuously to ensure customer
experiences can enhance brand values.
Brand equity is the most important and comprehensive brand asset set, used for measurement of the enterprise’s brand value for itself. Not until David Aaker put forward the term brand equity in 1990 had this vague term been clearly defined. In addition to measurement of value, brand equity can benefit enterprises in many ways.
High brand equity creates a powerful strategic asset, and barriers to entry for
competition (Aaker 1991), increases cash flows, reflecting in the increase of market share, profit and in the decrease of marketing costs (Simon and Sullivan 1993), adds value to the firm’s asset (Kamakura and Russel 1993), makes follow-up effective marketing programs possible such as successful brand extensions (Blackston 1992;
Bridges 1992), enhanced efficiency(Smith 1991), makes good permanent, cumulative sales effect (Slotegraaf and Pauwels 2008), attracts human capital for job applicants’
expectations of higher training, promotion, learning opportunities (Delvecchio et al.
2007), leaves much response elasticity for firms to confront marketing activities of competitors(Kish, Riskey, and Kerin 2001), and resists service failure regardless of the practice of service recovery(Brady et al. 2008). The aforementioned benefits indicate the importance of effectively manage your brand to create brand value. In response to
decision-making process, or express a person’s traits or self-image especially important for new consumers (Keller 1993). Therefore, brand equity is also both symbolically important and time-saving tools for consumers.
In sum, consumers attain the very experience motifs or get the sense of authenticity whereas enterprises benefit from staging experiences around the experience value promise made in response to motifs in terms of gifts. That is, experience management can create value both for consumers and enterprises. Despite the quest for customer experience management, there are few quantitative researches in this field. Qualitative studies designed for understanding the basic essence and descriptions of experiences are numerous, making it possible to understand customers’ inner world of experiences.
However, knowing the why, how questions without a scientific examination is perilous.
More research on the evaluation of the effect of experience strategies planned by the stagers is suggested by Schmitt to complement qualitative researches such as focus groups, in-depth interviews, or ethnographies, especially for the experience strategies on the creation of brand equity. In 2009, the concept of customer experience was formally defined in Journal of Retailing along with some suggested research directions. It is important to understand the relationship between customer experience and perception of the retailing brand. There is a gap which suggests empirically testing the relationship between experience-based retailing strategies and the corresponding retailing
performance metrics (Virhoef et al. 2009). Evaluation of metrics of brand value and customer retention is necessary for retailers to further improve their performance
(Petersen et al. 2009; Grewal et al. 2009). Following this research stream, filling the gap, we empirically test a conceptual framework of experience-based brand equity by
integrating vital theories and concepts presented by academicians and practitioners in the experience, brand, and consumer psychology fields. In this study, experience-based
brand equity creation framework is to use experience strategies perceived by customers to create brand equity. Our research purposes are as follows.
The first purpose is to connect experience strategies to brand equity and simultaneously clarify possible relationship among relevant dimensions, which can
create value both for consumers and enterprises. In response to experience stewardship suggested by Carbone (2004), to better understand customer experiences as the basis of experience planning, more understanding on the relationship among customer cognition, affect, and physical action toward the brand is indispensable. Brand researcherssuggested possible relationship among brand equity dimensions (Aaker 1991; Yoo and Donthu 2001). Experience researchers suggested the possibility that experience
strategies influence consumers’ cognitive, affective, and conative responses toward the brand, with no clear relationship identified among them (Schmitt 1999; Carbone 2004).
Also, knowing the relationship can serve as the main focus of customer experience management systems as shown in managerial implication. As you can see in literature review, we will integrate relevant theories to construct two integrated models that will be compared. In turn, we will select a better one to further clarify the relationship among relevant dimensions.
The second purpose is to examine the effectiveness of experience-based
strategies. Based on the relationship mentioned above, we suggest possible routes and
the best route to attain the final goal of experiential marketing-brand loyalty in this study. Knowing them will benefit experience managers to plan experience strategies.The third purpose is to present the way for resource allocation under holistic experiences strategies. The success of experience-based strategies lies in the control of
procedural efficiency (Verhoef et al. 2009). Strategic resource allocation maysubsequently affect corresponding efficiency of touchpoint arrangements. Enterprises all have limited resources. Hence, efficiency of experience-based strategies is desired. To the best of the author’s knowledge, this topic has not been discussed in the customer experience field. In our study, we will allocate strategic resources of different experience modules based on customers’ perception of experiences.
Experience-based brand equity differed from traditional brand management systems in that customers’ experience motifs prioritize. Traditionally brand building process follows strategic brand analysis, brand identity, consistent unique selling propositions and positioning, integrated marketing communication, and finally brand equity creation and controls (Aaker 1991, 1996; Keller 1993). In the process, customers never or seldom rank first (Carbone 2004; Schmitt 2003; Smith and Wheeler 2003). The problem lies in the alignment between the ideal value proposed by managers and the experiences perceived by customers (Nasution and Mavondo 2008). Traditional brand building is to the manipulation of customers’ perception by company’s considerations what experiential brand building is to the manipulation of business strategies by customers’ inner world (Blackwell, Miniard, and Engel 2006). Under the experience economy, the active role of customers justifies traditional brand building process may fade away in attaining company’s goals (Lewis and Bridger 2000; Austin and Aitchison 2003; Carbone 2004). Therefore, experience-based brand building may emerge. It is the experiences perceived by customers that create brand- related responses, not the
evaluation of strategic effect by experts or top managers. The point will be always on customers’ experiences, which we will stress in the conclusion.