Methodology

Sampling

We focused on the creation of brand equity through strategically formed holistic experiences. Therefore, holistic experience stagers should be the research target.

McDonald’s Corp. was then chosen because of its implementation of experiential marketing on September 2003. Experience stagers should have specific experience positioning, experience value promise, theme and memorabilia (Pine and Gilmore 1998; Schmitt 2003). McDonald’s experiential marketing focused on the experiential positioning “forever young” within the implementation theme of “ i’m lovin’ it ”.

Specific themes on sports, hip music, entertainment and fashion have been dedicated to the experiential value creation for customers. Forever young positioning came from the customers’ point of view from consumer insight collected through focus group,

Internet panel, or blogging, not from the company’s. The marketing appeal has shifted from you to I. The new strategy comes from brand journalism. Contemporary designs corresponded to sense strategy with providers such as bright lights, stylish interior designs. Offerings of dollar value corresponded to think strategy with providers such as dollar-valued meals, your combos in which you think the most dollar-valued meal choice. Vigor and happiness conform to feel strategy in which employees play the role of pleasing customers by smiles, joyful pictures, signs on the interior wall, and

recruiting information reads the happiest enterprise to partner with and the desire for employees who can bring happiness to people. Act strategy is manifest in terms of the company’s continuous efforts in promoting i-attitude, customer-focused ads to identify lifestyles of customers in McDonald’s. As for the relate strategy, customers and the company as a whole bond with the themed culture through the brand. All the elements

of integrated marketing communication were arranged with the focus of forever young (Gibson 2006; Sowa 2006; Arun 2007; Quinton 2008). The Mc Chronicles is a

consumer community dedicated to discussion and sharing of experiences in

McDonald’s. That customers actively discussed experiences implied McDonald’s role as experience stagers. In addition, discussing whether experiential approaches

revitalize McDonald’s brand that has long been traditional marketers is of much value.

McDonald’s has been the brand leader in the fast food chains with the strategic focus on brand loyalty to reflect long-term growth of the brand. Strongly positioned brands can be better suited for such consumer-based measures as Aaker’s brand equity (Sriram et al. 2007). The following dimensions of sampling procedure suggested by

international corporation researchers were reported (Short et al. 2002; Yang et al. 2006).

Sampling method was in-store personal interview by filling out questionnaires to reflect the importance of real situation in the experience researches and avoided distorted experiences (Schmitt 2003). Most of experiences occur during consumption (Lasalle and Briton 2004 ; Carbone 2004), which supersedes the influences of other phases (Petromilli and Michalczk 1999). Strategic experience modules scale is

appropriate for the survey of the effect of experience strategies. 7 trained interviewers performed the data collection, which lowers bias as more interviewers involved (Ruane 2005). Interviewers were recruited and carefully selected according to their

background. We offered high financial impetus to interviewers to stimulate their efforts.

During the interview with customers, confused items were neutrally explained; missing values were solved by reminding customers of the neglected items, thus no deletion of data. They were taught to avoid selecting respondents on personal preference to reduce

experiential marketing strategy for McDonald’s is customers between 18 to 34 years old. Hence, we selected them as our main target, following other customers. Sample representativeness was improved by disseminating questionnaires in 17 stores of northern and central Taiwan. The final sample consisted of 313 customers, which surpass the minimum requirement of SEM of at least 200 (Hatcher 1994). Response rate was around 80 percent reported by interviewers. Data collection duration is two months with no non-response bias detected under the multivariate test (Wilk’s λ=0.9763,p-value=0.1923). Finally, it is discreetly stated that the representativeness may suffer in nonprobablistic sampling. The research findings only apply to those interviewed. However, as we show later, the robust result of hierarchical linear modeling complemented this limitation by making the findings generalizable to the population in Taiwan.

Research constructs and measurement

Holistic experiences

The complete, holistic nature of experience forms presented by Schmitt (1999) served as a better measure of holistic experiences. The scale had expert validity now that Schmitt was the presenters and guru of experiential marketing. The scale also passed the validity and reliability thresholds. Strategic experience modules are the focal key to success of customer experience management. Operationalized as the total effect of Strategic experience modules planned by the company, the effect will reflect on customer-perceived Strategic experience modules. Therefore, it is the customer experience from the strategic perspective. Experience forms are measured by three items respectively. Holistic effect planned by the company must be perceived by customers to justify its effectiveness. Holistic experience is an experience hybrid, justifying its second order factor role in the analysis.

Brand equity

10 items of scale of multi-dimensional brand equity was cross-culturally

The scale was appropriate for Chinese people to use compared with other scales in that samples included Americans, Koreans, and American-Koreans. Aaker’s view of customer-perceived brand equity dominates the core concept of the scale development process, more suited for our research issues. One of product

categories used in the scale developing process concerned sports, which matches the theme of McDonald’s. The scale had gone through high validity, reliability assessment plus parsimony, taking effectiveness and efficiency into account. There are 2 items for perceived quality, 3 items for brand loyalty, and 5 items for brand awareness and associations. Original scale indicated problems of high correlation between some constructs in the 4 dimension factor structure, thus making brand awareness and brand associations combined to solve this problem, with validity and reliability passing. We followed suit to conform to their 3 dimension factor structure. We added one item of perceived quality to solve possible low reliability under only two items. The item is proposed by Yoo and Donthu in their previous empirical testing of marketing elements on brand equity (Yoo et al. 2000). The operationalization of all dimensions is listed as follows. Brand awareness is consumer’s recognition and recall toward a brand. Brand associations are anything related to the brand in consumer’s mind. Perceived quality is the overall evaluation

Consumer’s affective dimension toward a brand

Functional clues delivered functional benefits whereas people, mechanic clues delivered affective benefits in the experience context (Carbone 2004). Perceived quality is predominantly functional evaluation toward an object (Aaker 1996).

Therefore, adding the evaluation of consumers on the affective benefit is a must to enhance the completeness of experience research. We select the affective

dimension of consumers toward a brand to complement the utilitarian evaluation of perceived quality with the soft part (Voss et al. 2003). Under consumer’s attitude toward the brand, there are affective and utilitarian dimensions. Perceived quality reflects utilitarian dimensions due to the focus on functional parts. Therefore, we added affective dimensions into our framework to reflect affect in response to the experiences as Voss proposed. Operationalizaion is the affect occurring through experience with a brand or product. 5 items are for this construct. In addition, according to focus group discussion and affective strategy of McDonald’s, we discovered these items of fun, exciting, delighted, thrilling, and enjoyable corresponded well.

Back translation was used to ensure translation validity. Two bilingual students mastering marketing field were chosen. One is Canadian-Taiwanese, and the other is Taiwanese. According to self-report, both of them were fast food lovers themselves and they were familiar with fast food chains, thus appropriate

candidates for translation. During the translation process, disagreements were solved through discussion to reach consensus. The agreed translated scale was further examined through pretest with the other 10 consumers of McDonald’s.

Pretest and focus group

Focus group interview was conducted to ensure the quality of the

back-translated scale and lower the bias due to different cultural backgrounds (Wolff et al. 1993). 10 loyal customers of McDonald’s were selected based on their self-reported experiences with the company and fast food chains. They were brought into a fleet store of McDonald’s in Taipei city where focus group interview was conducted to creation of authentic sense. The real experience motifs can be better reflected in the authentic situation (Foxall 1996; Schmitt 2003). Seats were arranged without much noise to avoid possible intervention. Interview procedures were as follows. Participants interacted as normal before they finished their meals.

After all participants finished meals, back-translated questionnaires were

distributed, and filled out. In turn, interviewers addressed the research objectives and procedures. Think aloud method was conducted to each item respectively to ascertain the consistency of the meaning for each item between interviewers and respondents (Patten 2001). Disagreements were solved by consensus on the appropriate translation of confused items. In the end, we inquired other potential demographic, psychographic, and behavioral variables that may influence brand equity based on their knowledge as fast food consumers. They were candidates of control variables in this research. Frequent motives, age should be included. When the interview was over, gratitude accompanied them home. The questionnaire modified after pretest was discussed with people in charge of the back translation to ensure double checking.

not inclusive of all dimensions of marketing activities, marketing elements of 4P must be the paradigm of traditional marketing. They are representative of the past marketing activities (Yoo et al. 2000). Traditional marketing activities must be controlled for before the pure effects of experience strategies emerge. McDonald’s main brand-building marketing element before the inclusion of new experience positioning has been all about advertising. Advertising expenditure had positive effect on all dimensions of brand equity (Yoo et al. 2000). It has been the main, traditional way of building brand equity. McDonald’s had been the heavy mass media performer before the introduction of the new experience positioning. It is suggested that ads invoke consumers’ affect toward the given product or brand (Solomon 2009). Advertising expenditure is measured by 3 items and perceived by customers in that ads should be perceived before take effect. Higher price indicated signals of higher quality (Yoo et al. 2000). According to the inferential belief of price to quality, higher price indicates higher quality (Blackwell, Miniard, and Engel 2006). Price is perceived by customers and measured by three items. Real price levels are reflected and determined by customer perception. According to the focus group pretest, respondents suggested advertisement, price to be included for compared to others, McDonald’s ads have been intensive, and McDonald’s offered the lowered price, but price deals, channel density not included, for all the fast feeders do the same. Channel density is the fundamental of fast food chains with lower strategic change room. Consumers have deemed it basic, thus little potential for boosting brand equity. Price deals focus on short-term behavior learning to boost sales. In terms of long-term strategic focus of experiential marketing related researches, price deals are excluded. Also, evidence showed sales promotions had no influence on brand equity (Sriram Balachander and Kalwani 2007).

Loyalty segments were divided into true loyals, split loyals, and brand

switchers (Kotler and Keller 2006). Different loyal levels may influence perceived quality and brand loyalty (Aaker 1996). Gender had been taken into account when developing their parsimonious brand equity scale (Yoo and Donthu 2001).

Different levels of age and race may result in different perceptions of forms of experiences and different corresponding effects (Arnold et al. 2005). The types of motives may influence perception of experiences for consumers (Foxall et al.

1996). Levels of motives may impact attitudes toward an object for consumers (Solomon 2009). However, motives should change with different situations. Vital types of motives were extracted through the focus group interview, resulting in three types-just dining, being with friends, and reading. The option denoting other choices was included to satisfy infinity rule of items. Some of the respondents indicated brand equity were long-run metrics, making it important to measure frequent motives to reflect long-term motives, not just motives. The above summarized gender, age, frequent motives, and loyalty segments should be included in the categorical control variables in our study. Race was excluded for Taiwan consisted of mostly Taiwanese people.

Analytical method

Two-step analysis was conducted as procedures of covariance-based structural equation modeling. The sheer advantage of SEM is simultaneously estimating parameters, resulting in a more accurate, reliable result. Measurement

composite reliability, variance-extracted estimates, Cronbach’ Alpha examined to attain respective thresholds. Structural models empirically test hypothesized latent path relationship under integrated models 1 and 2, respectively. Three-step

comparison method was used to select a better model (Rust et al. 1995; Huh et al.

2009). The decomposition of mediating effects is to be discussed to understand which route dominates in boosting brand loyalty-the final goal of brand equity and experiential marketing. We present possible strategic resource allocations for McDonald’s based on the empirical result by performing Chi-square difference tests. Mostly, the results will be confirmed by conducting cross validation among eight random subsamples to avoid data-driven analysis. All the subsequent analyses will base on the whole sample.