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7th International Scientific Conference
“Business and Management 2012”
May 10-11, 2012, Vilnius, LITHUANIA
ISSN 2029-4441 print / ISSN 2029-929X online
ISBN 978-609-457-116-9 CD
doi:10.3846/bm.2012.063
http://www.bm.vgtu.lt
© Vilnius Gediminas Technical University, 2012
480
MARKETING THEORY: EXPERIENCE MARKETING
AND EXPERIENTIAL MARKETING
Siiri Same1, Jorma Larimo2
1Tallinn University of Technology, Ehitajate tee 5, EE-19086 Tallinn, Estonia
Email: siiri.same@ttu.ee; siiri.same@eas.ee
2University of Vaasa, Wolffintie 34, FI- 65101 Vaasa, Finland
University of Tartu, Narva Road 4, EE-51009 Tartu, Estonia
Email: jorma.larimo@uwasa.fi
Abstract. Despite the fact that experiences are regarded as key concepts in marketing today, there are dif-
ferent views and interpretations about the content of terms. The main objective of this article is to analyse
the concepts of experience and experiential marketing. Based on the literature review the authors found
that experience marketing is a strategic and a broader term than experiential marketing. We define experi-
ence marketing as a strategic and holistic marketing of relevant (and meaningful) experiences, and expe-
riential marketing as a tactical tool that helps to do marketing experientially. At the end of the article a
conceptual model of experience marketing is proposed.
Keywords: experience marketing, experience, experiential marketing, customer experience, value.
Jel classification: D11, M31
1. Introduction
Increasing amount of people are searching for
meaning, happiness, sensations, new forms of ful-
fillment and core values, which they often find in
market offerings (Fortezza, Pencarelli 2011). Ex-
perience marketing is a new approach to marketing
and business. Compared to traditional marketing it
is an innovative and creative approach, and is go-
ing to be a major growth area in next years.
Already in 1999 Schmitt declared that we are
in the middle of a revolution that will replace tra-
ditional feature-and-benefit (F&B) marketing with
experiential marketing (Schmitt 1999 a). In 1998
Pine and Gilmore (1998) introduced experience
economy as the next economy following the ser-
vice economy. Experience is the main component
of experience marketing and according to LaSalle
and Britton (2003) and Schmitt (1999 a) it is key
marketing in future. Although experiences are re-
garded as key concepts in marketing today, there
are mixed views and interpretations about the con-
tent of terms. Experiences are seen in different
ways and varying approaches are available. Some
terms are sometimes used as synonyms, for exam-
ple confusion arises when defining experience
marketing, experiential marketing, and customer
experience management (CEM).
Tynan and McKechnie (2009) in the review
article “Experience marketing: a review and reas-
sessment” refer to lack of clarity in marketing lit-
erature with regard to “what exactly constitutes an
experience and the conflation of terms associated
with experience marketing”. The seminal article
and book “Experiential marketing” was written by
Schmitt in 1999. In the articles written by Schmitt
(2009, 2010) ten years later the keyword is surpris-
ingly experience marketing.
This article seeks to contribute to the existing
knowledge of experience marketing. The key re-
search questions are: 1) what are experience, ex-
perience marketing, and experiential marketing?,
2) what is the difference and relationship between
the terms?, 3) how to conceptualize experience
marketing? The goal of this theoretical article is
based on the analysis of key concepts and earlier
research in the field to propose a conceptual model
of experience marketing.
The structure of the article is as follows. First,
we provide an overview of key concepts of experi-
ence and experiential marketing. Second, we ex-
amine some theoretical approaches and formation
of experience marketing, and also relationships
between the terms. Finally, we propose the con-
ceptual model of experience marketing to under-
stand the essence of experience marketing and
pave the way for further analysis and research.
S. Same, J. Larimo
481
2. Definitions of experience
As a concept and empirical phenomenon, experi-
ence is not as established as other consumer and
marketing concepts, such as choice, attitudes, con-
sumer satisfaction, or brand equity (Schmitt 2010).
Poulsson and Kale (2004) observe that no attempt
has been made to systematically define an experi-
ence in marketing terms. The lack of clarity lies in
different ways in which the term can be under-
stood. Tynan and McKechnie (2009) explain that
experience is both a noun and a verb and “it is
used variously to convey the process itself, par-
ticipating in the activity, the affect or way in
which an object, thought or emotion is felt through
the senses or the mind, and even the outcome by
way of a skill or learning”. In addition, experi-
ences are even more complicated because there is
a difference between the simple pleasure of an or-
dinary or mundane experience and the enjoyment
of an extraordinary or flow experience (Carù,
Cova 2003). For example flow experiences de-
scribe a form of intrinsic motivation and are char-
acterized as states of intense concentration, focus,
and absolute absorption in challenging activity
(Csikszentmihalyi 1990).
Carbone and Haeckel claim to have launched
the “experience movement” in 1994 (cited in Ty-
nan, McKechnie 2009), but Holbrook and Hirsch-
man wrote already in 1982 an iconic article on the
consumption experience. Thus, almost 30 years
ago marketing researchers discovered the impor-
tance of experiential aspects of consumer behav-
iour. Holbrook and Hirschman (1982) developed a
useful model contrasting the differences between
the information-processing (rational) and the expe-
riential view (irrational).
Carù and Cova (2003) confirm that the con-
cept of experience is still ill-defined and in the
field of marketing we must use a “typology of
consumption experiences which goes beyond an
ideological view” where every experience is ex-
traordinary. Their analysis showed that in the so-
cial sciences and philosophy experience is defined
as a “subjective episode in the construction/trans-
formation of the individual with, however, an em-
phasis on the emotions and senses”. By experience
Carbone and Haeckel (1994) mean the "takeaway"
impression formed by people's encounters with
products, services, and businesses – a perception
produced when humans consolidate sensory in-
formation.
Tarssanen and Kylänen (2007) define experi-
ence as “emotional experience that can lead to per-
sonal change“, Pine and Gilmore (1999) as memo-
rable events, and Pitkänen and Tuohino (2006) as
affective events that have a strong impact on the
perceiver.
Veijola (2002) describes two dimensions of
experience: 1) experience (in German Erfahrung),
as already perceived or experienced, and 2) ex-
perience (in German Erlebnis), not previously ex-
perienced. Snel (2011) assures that Erlebnis is iso-
lated and immediate, but Erfahrung is a continous
process of doing and undergoing, giving and tak-
ing, causes and consequences, action and reflec-
tion, etc. German, Dutch, Estonian, Swedish,
Norwegian, Finnish, and Japanese languages make
a distinction between these two words, but English
has only one word ‘experience’.
Despite the frequent use by scholars of the
term ‘experience’, its definitions in the literature
tend to focus on different elements (Table 1).
Table 1. Lexicon of experience
Authors
Year
Experience
Maslow
1964
Peak experience
Holbrook,
Hirschman
1982 Experiential aspects
Csikszentmihalyi
1990
Flow experience
Arnould, Price 1993
Extraordinary
experience
Carbone, Haeckel 1994
Customer experience
engineering
Pine, Gilmore 1998
Distinct economic offer-
ing, memorable, experi-
ence economy
Schmitt 1999 Experiential marketing
Poulsson, Kale 2004
Commercial
experience
Boswijk,Thijssen,
Peelen
2005
Meaning
experience
Tarssanen,
Kylänen
2007
Experience pyramid,
personal change
In summary, experience is a complex and lay-
ered construct. There are even more dimensions –
Carbone and Haeckel (1994) explain that experi-
ence “may be good or bad, lasting or fleeting, a
random phenomenon or an engineered percep-
tion”.
An experience as a noun is something that af-
fects the way you feel or knowledge or skill from
doing, seeing or feeling things. An adjective ‘ex-
periential’ means based on experience. That stre-
sses the importance of experience as a basis of the
area.
3. Experiential marketing
According to Schmitt, the initiator of experiential
marketing, the framework of experiential market-
ing has two aspects: 1) five types of experiences,
MARKETING THEORY: EXPERIENCE MARKETING AND EXPERIENTIAL MARKETING
482
called strategic experiential modules (SEMs),
which form the strategic underpinning of experien-
tial marketing, and 2) experience providers (Ex-
Pros), the tactical tools (Schmitt 1999b). Holbrook
(2000) criticizes Schmitt for positioning this rather
modest conceptual framework as “a key strategic
planning tool” of experiential marketing. We stress
that marketing planning tool is tactical, not strate-
gic. Experience marketing concept is based on ex-
periences, not only on specific activities that are
experiential in nature.
Carù and Cova (2003) are critical towards
American romanticism (Schmitt, Holbrook, Pine,
Gilmore, etc.) and confirm that this allowed Hol-
brook to propose the "logical sequence: ‘romanti-
cism → experiential consumption → emotional
responses → pleasure’, and to insist on the fact
that in this experiential approach, sensations are
more important than the consumers’ rational
thoughts”.
Smilansky (2009) defines experiential market-
ing as a “process of identifying and satisfying cus-
tomer needs and aspirations profitably, engaging
them through two-way communications that bring
brand personalities to life and add value to the tar-
get audience”. Experiential marketing helps to cre-
ate experiences and emotions to the customers. In-
ternational Experiential Marketing Association
(2011) states that experiential marketing “allows
customers to engage and interact with brands, prod-
ucts, and services in sensory ways”. According to
You-Ming (2010), experiential marketing is a
“communication method, which mainly raises cus-
tomers’ physical and emotional feelings”. Hauser
(2007) describes experiential marketing as a holistic
approach to the customer/brand relationship.
Cantone and Risitano (2011) confirm that
many firms are adopting CEM strategies, in which
„the role of emotions, feelings, sentiments, pas-
sions and experiences” are emphasized in con-
sumer-brand relationships. According to Yuan and
Wu (2008), experiential marketing can be seen as
a marketing tactic designed by a business to stage
the entire physical environment and the operation-
al processes for its customers to experience. We
highlight that all these definitions indicate that ex-
periential marketing is mainly related to emotions,
feelings, and senses; and has less to do with cogni-
tion and human intentions.
When Schmitt (1999a) explains the idea of
Pine and Gilmore’s (1998, 1999) experience econ-
omy he uses the phrase experiential economy. It
shows how those terms and words are used inter-
changeably.
4. Experience marketing
According to Leeflang (2011) one of the specific
topics that have not yet received enough attention
is experience marketing.
Experience marketing is generally based on
experience economy theory. Pine and Gilmore
(1998) claim experiences to be the fourth eco-
nomic offering. They explain the progression of
value from commodities to experiences by show-
ing how experiences differ from goods and ser-
vices (Table 2). Pine and Gilmore (1999, p. 12)
declare that “while commodities are fungible,
goods tangible, and services intangible, experi-
ences are memorable”.
Table 2. Economic distinctions (Source: adaptation of
Pine and Gilmore (1998))
Economic
offering
Goods Services Experiences
Economy
Industrial
Service
Experience
Nature of
offering
Tangible Intangible Memorable
Key
attribute
Standardized
Customized
Personal
Seller
Manu-
facturer
Provider Stager
Buyer
User
Client
Guest
Factors of
demand
Features Benefits Sensations
Experience economy (Exponomy) is of in-
creasing focus. Although the concept was born in
the business field in 1998, it has gone beyond its
boundaries to tourism (Leighton 2007), retailing
(Grewal et al. 2009; Verhoef et al. 2009), architec-
ture, sports, branding (Brakus et al. 2009; Gentile
et al. 2007), entertainment and arts (Petkus 2004),
urban planning, hospitality and other fields.
Experience economy is also considered as a
main underpinning for customer experience man-
agement (CEM). According to Schmitt (2003), the
term ‘customer experience management’ repre-
sents the “discipline, methodology and/or process”
used to comprehensively manage a customer's
cross-channel exposure, interaction and transaction
with a company, product, brand or service. CEM is
more like a program (Cantone, Risitano 2011) or
schedule, based on five steps. The CEM strategies
impel the customer’s involvement at different lev-
els (Gentile et al. 2007): rational, emotional, sen-
sorial, physical, and spiritual.
Walls et al. (2011) define ‘consumer experi-
ence’ as “multidimensional takeaway impression
or outcome, based on the consumer’s willingness
and capacity to be affected and influenced by
physical and/or human interaction dimensions”.
S. Same, J. Larimo
483
Experience marketing offers engaging, interac-
tive, and entertaining brand experiences. Brakus
et al. (2009) define brand experience as “subjective,
internal consumer responses (sensations, feelings,
and cognitions) and behavioural responses evoked
by brand-related stimuli” that are part of a brand’s
design and identity, communications, and environ-
ments in which the brand is marketed or sold.
Experience marketing is also related to con-
sumer behaviour theory. Consumer behaviour as a
field has expanded to three dominant speciali-
zations (subfields): consumer information proce-
ssing, consumer culture theory, and behavioural
decision theory (MacInnis, Folkes 2010). These
subfields have all provided consumer insights on
experiences. However, Schmitt (2010) regards that
also two other main marketing disciplines (mar-
keting strategy and marketing models) have also
contributed to experience marketing in addition to
consumer behaviour.
According to Schmitt (2010) the key concepts
of experience marketing are: 1) experiential value,
2) different types of experiences, 3) the distinction
between ordinary and extraordinary experiences,
and 4) experience touchpoints. Consumer beha-
viour and experience marketing fields are open to
adjoining disciplines, e.g. psychology, economics,
communications, sociology, anthropology, and
culture. These fields may be useful to better under-
stand consumer behaviour and experience marke-
ting.
4.1. Definition
To simplify, as the wording suggests, the focus in
experience marketing is on experience. The other
important components are the customer and ex-
perience co-creation. “Experience marketing can
create emotions by making entertainment for cus-
tomers, by allowing them to escape from the real-
ity, by educating them and giving them aesthetic
objects or places to see” (Pine, Gilmore 1999).
The diverse perspective and translations on ex-
perience has made it difficult to understand the con-
cept and also define experience marketing. There is
no consensus today on what the term ‘experience
marketing’ refers to, and the context in which it is
used. Lee et al. (2010) explain that experience mar-
keting aims to request marketing staff to emphasize
the overall experience quality for consumers passed
by brands, including rational decision-making and
sentimental consumption experience. Baron et al.
(2009) define experience marketing as “the creation
of a memorable episode based on a customer´s di-
rect personal participation or observation”. But at
the same time they use exactly the same definition
for experiential marketing.
4.2. The difference between experience and
experiential marketing
The formation of experience marketing is a proc-
ess from a stimulus up to a change in customer
behaviour, learning or attitude. Experiences occur
in response to some stimulation (Schmitt 1999a),
e.g. marketing mix. The stimulus can be interper-
sonal (between people) or intrapersonal (within a
person); it can be marketing stimulus (e.g. 4P) or
environmental (e.g. economic, technological, cul-
tural).
For its subjectivity experiences depend on the
expectations and values of the customer (Tars-
sanen, Kylänen 2007). Experience can involve a
perception on which one builds his/her own state
of reality; a reality based on his/her interaction
with the environment (Fig. 1).
Environ-
ment
Fig.1. The difference between experience and experien-
tial marketing (Source: adaption of Leppiman, Same
2011)
A customer creates meaning to all he/she per-
ceives. Experience represents a meaningful rela-
tionship between a person’s perceptional activity
and a life situation, and is of particular signifi-
cance to the person (Perttula 2007). When the cus-
tomer experiences something to be important, this
forms his/her life situations consisting of every-
thing he/she is in meaningful relationship (Leppi-
man, Same 2011). Experiences are formed out of
Stimulus,
marketing mix
Perception,
values
Meaningful relationship
Life situation
Meaningful experience
(what do you know, feel, want?)
Experience marketing
Behav-
iour
Change
or satis-
faction
Cognition
Affection
Conation
Value co-
creation
Affection
Particular experience
(what do you feel?)
Experiential marketing
MARKETING THEORY: EXPERIENCE MARKETING AND EXPERIENTIAL MARKETING
484
these relationships and life situations. Fortezza and
Pencarelli (2011) call it “packaging moments of
life”.
Experiences may result in changes in attitude
or behaviour. Customer attitude consists of three
components: cognitive (mental images, understand-
ing, interpretations), affective (feelings, emotions),
and conative (intentions, actions, behaviour). “The
most common sequence that takes place when an
attitude forms is cognitive → affective → cona-
tive” (Clow, Baack 2007). This sequence can form
a meaningful and relevant experience. Meaningful
experience is composed of feelings, knowledge
and beliefs (Leppiman, Same 2011). Thus, mean-
ingful experience is broader than particular, which
is mainly related to emotions and feelings, as seen
on Fig. 1. A holistic experiential feeling may lead
to changes in personal opinions and attitudes of a
customer. Fig. 1 highlights that the platform of
experience marketing is strategic and larger than
experiential marketing.
4.3. Conceptual model of experience marketing
An experience is important in business and tech-
nology because to the mind every economic offer-
ing is experienced (Van Doorn 2006). Experience
is broadly speaking an interaction between a com-
pany (brand/product/service) and a customer. Ex-
perience is shaped by the characteristics of the
customer and those of the product, company or
brand. Desmet and Hekkert (2007) explain that
“all actions and processes that are involved, such
as physical actions and perceptual and cognitive
processes (e.g. perceiving, exploring, using, re-
membering, comparing, and understanding), will
contribute to the experience”.
Consumer behaviour is influenced by internal
influences, e.g. demographics, personality, motiva-
tion, knowledge, attitudes, beliefs, and feelings. The
behaviour is also influenced by external influences,
e.g. culture, past experience, lifestyle, marketing
mix. Psychological factors include individual’s mo-
tivation, perception, attitude and belief, while per-
sonal factors include income level, personality, age,
occupation, lifestyle, etc. In addition, the experience
is always influenced by the context – environment
in which the interaction takes place.
The most important parts of the model (Fig. 2)
are: 1) offering or stimulus, 2) interaction between
the customer and company, 3) experience and
value co-creation, 4) value. We believe these are
the cornerstones of experience marketing.
Hekkert (2006) distinguishes three levels of ex-
perience: attribution of meaning (experience of
meaning), emotional response (emotional experi-
ence), and aesthetic pleasure (aesthetic experience).
These experiences influence value co-creation, pur-
chase decisions and behaviour.
At the level of meaning, cognition comes into
play. Desmet and Hekkert (2007) confirm that
contrary to popular belief, “an emotion is the result
of a cognitive, though often automatic and uncon-
scious, process”.
Fig. 2. Conceptual model of experience marketing
The ultimate outcome for the company is e.g.
sales, value added, loyalty, etc. There is also out-
come for the customer and ultimately to society.
Tynan and McKechnie (2009) assert that experi-
ence marketing can deliver sensory, emotional,
cognitive, behavioural and relational value to cus-
tomers, to which social and information based
value can be added.
In 2007 the American Marketing Association
adopted a new official definition of marketing
(Keefe 2008): “Marketing is the activity, set of
institutions, and processes for creating, communi-
cating, delivering, and exchanging offerings that
have value for customers, clients, partners, and
society at large.” This definition also supports the
model.
5. Discussion
Experience marketing is more complex than the
traditional marketing of the post-industrial era
(Fortezza, Pencarelli 2011). We claim to have ex-
perience-driven organizations, experience-oriented
Customer
Interaction
Elements
of experi-
ence
Value to
customers
Value to
company
Actions and
processes
Company (brand,
product, service)
Context,
environment
Experience
and v
alue
co-creation,
(and
behaviour)
Value to
society
Levels of
experience
(meaning, emo-
tional response,
aesthetic pleasure)
Offering or stimulus
Marketing mix
S. Same, J. Larimo
485
strategy and experience-based activities using the
word ‘experience’, but still many authors use ex-
periential marketing (for the whole approach)
while knowing that everything is based on experi-
ences. As for parts of speech, ‘experience’ is a
noun and a verb, while ‘experiential’ is an adjec-
tive. The company’s marketing approach and ac-
tivities can be experiential in nature, but every-
thing is based on experience(s) or driven by
experiences. The authors of this article recommend
the wider use of the term ‘experience marketing’,
because at the broadest level it is strategic market-
ing, a field of study, a broader concept referring to
the “world of experiences”. In this article the term
strategic marketing is used in reference to the field
of study and marketing strategy in reference to the
organizational strategy construct and the latter
may be defined as organization’s integrated pat-
tern of decisions (Varadarajan 2010).
Experiential marketing is part of experience
marketing. Experiential marketing is a tactical,
rather than a strategic approach that marketers
should consider central to their integrated market-
ing communications plans, including techniques,
which are part of the core experience marketing
strategy. Experiential marketing shows us the
ways how managers can create experiences
(Schmitt 2003). Smilansky (2009) explains that
experiential strategy is the campaign’s main con-
cept. Through the best practices Smilansky (2009),
Schmitt (2003), and other authors show how to
involve and engage the audience.
We can conclude that experiential marketing is
limited in scope, and more executive in nature, e.g.
it may consist of a single campaign or involve only
one media channel. The focus of experiential mar-
keting is on specific business objectives, largely
on creating or modifying the environments in
which customers interact. Tactical decisions are
marketing mix decisions (e.g. promotion, commu-
nication) and they define how the strategic deci-
sions will be implemented (Varadarajan 2010).
Everything marketers do is experiential at some
level – from the brand identity creation to the pack-
aging, store design, media communication, or Web
site. These are tactical decisions and activities. Ex-
perience marketing is strategic marketing of experi-
ences (according to Pine and Gilmore (2002) the
experience is the marketing). Experiential market-
ing helps to market experiences, answers the ques-
tion how to do marketing experientially.
6. Conclusions
Drawing from the extant literature and considering
all most relevant scientific contributions we define
the terms. Experience is an economic offering and
an interaction between the company/brand/service,
and customer, who perceive and meaningfully ex-
perience it. Experience marketing is strategic (cus-
tomer-centric) and holistic marketing of relevant
(and meaningful) experiences that takes into ac-
count the affective, cognitive and conative per-
spectives of consumption experience. Experiential
marketing as a marketing planning tool is con-
cerned on tactical and operational level actions
where the main question is how to do marketing
(campaign) experientially.
Experience marketing is strategic marketing
management and is used to manage customer in-
teraction, cross-channel exposure, and value co-
creation. We found that experiential marketing
focuses on tactical and operational level actions
where the main question is how to do marketing
experientially. To be successful, Poulsson and
Kale (2004) argue that a marketing experience
should have personal relevance for the customer,
be novel, offer an element of surprise, engender
learning and engage the customer.
Fig. 1 presents the formation of experience
marketing and should assist marketing profession-
als to understand the difference between the terms.
Here are two important dimensions: experiential
marketing (connected to particular experience and
affection) and experience marketing (connected to
meaningful experience; cognition, affection, and
conation). Our analysis of the literature leads us to
conclude that experience marketing is more com-
prehensive in scope and strategic in nature than
experiential marketing. Experience marketing is
holistic and seeks to understand the value of cus-
tomer experiences and besides affective perspec-
tives regards cognitive and conative perspectives.
This observation is important in order to under-
stand the difference between the terms.
The conceptual model (Fig. 2) is a figurative
representation of the domain and thus attempts to
explain the essence of experience marketing. The
model should assist marketing professionals to
understand the essence of experience marketing.
The consensus on what does and does not
constitute experience marketing and what distin-
guishes it from other fields is far from clear. Fur-
ther empirical research is needed to analyse the
specific dimensions of experience marketing and
explore the relationships between the elements.
More research is needed to fully understand the
experience construct and its impact on customers.
For example, according to Walls et al. (2011), ad-
ditional exploration is needed to understand the
relationship between experiences, emotions, cog-
nition, and multisensory elements. Also openness
MARKETING THEORY: EXPERIENCE MARKETING AND EXPERIENTIAL MARKETING
486
to adjoining disciplines can add insights to experi-
ence marketing.
Finally, we proposed a conceptual model of
experience marketing that should be tested empiri-
cally. Marketers need to understand the conceptual
framework and principles of experience market-
ing, because experience marketing is the only way
to gain competitive advantage in tough competi-
tion. From the company’s perspective it is useful
as a differentiation strategy. Experience marketing
can lead to greater impact for the customer, in-
creased effectiveness, and even cost savings com-
pared to traditional marketing.
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