Experiential Marketing

Understanding Varanasi Customers: A Case Study of Samsung & Nokia Mobile

Phone Store

A Project Report

submitted for

Research Methods & Methodology

By

Tage Nobin (48)

Under the guidance of

Dr. Ashutosh Mohan

FACULTY OF MANAGEMENT STUDIES

BANARAS HINDU UNIVERSITY

Abstract

Study was conducted basically on how experiential marketing (EM) affects

the buying pattern of the mobile phone customers. The study also covered the

impact of EM on repeat visit by customers; its acceptance based on gender &

the reasons for repeat visits when compared to store not using EM.

Research was carried out at two specialty store dealing mobile phones in

Varanasi, one of the most populated cities in India. Questionnaire using one to

one interview technique was used. Of 78 interviewed, 36 (EM) and 29 (NEM)

were selected for study on two specialty store, one set had experiential

marketing in practice & the other didn’t practise EM (NEM). Experiential

marketing impact was studied on parameters like feel good, friendly people and

ambience.

The study confirms the hypothesis that experiential marketing can make a

positive impact on the buying patterns of the customers. Word of mouth is

equally important for EM and NEM store. PR role is more important for EM

than NEM store. EM store have 31% repeat customers compared to 1% with

NEM store. This is significant comparative study on EM and NEM usage.

Customers are spending more time at these store due to EM approach.

Ambience of both store played important role. Females visited less compared to

male but repeat visit of females was on the higher side as they were more

influenced by EM.

Chapter 1

Introduction

Change is the buzz word that prevails today; come in new technologies,

communication, comes the changes the marketing too. There are competitions

where principles and actions of traditional marketing do not work. These

opportunities open the door for experiential marketing. Marketing-mix theory

focuses from the mechanical point of view (stimulus-reaction). The gap

between stimulus and reaction stands the process, the process wherein we can

incorporate the experience element. This very process stands as the pillar of the

so called experiential marketing. Marketers tend to engage consumers in a

memorable way, offering them extraordinary experiences. For them,

experiences provide consumers a way to engage physically, mentally,

emotionally, socially and spiritually in the consumption of the product or

service making the interaction meaningfully real.

India's mobile marketing space, which some analysts estimate at Rs 600

million ($11 million), is expected to grow 10-fold in the next five years. Mobile

marketing has started to grow rapidly in India as the brands see the

opportunities beyond just internet options.

Mobile phones are here to stay. It has definitely become the soul

companion of most of the people, right from using it as a simple watch to

handling ultra hi-tech stuffs. Purchasing a new mobile phone is something

which everyone enjoys. Going to a regular street side retailer for mobile phone,

customers come across dummy models where the features of the mobile phone

can only be read but not tested. There is definitely a gap which can be bridged

by the concept of experiential marketing.

Few showrooms have been developed which have come up with the

concept of letting the customers to get a hands-on experience of the features of

all the models available prior to buying of the same. Our study will focus on the

impact of this very experience of the customer.

Figure 1.1: Four factors for experiential marketing process

1.1 What is Experiential Marketing?

Experiential marketing is a discipline of marketing which allows users to

interact with a brand and its products or services firsthand, often in a controlled

environment. This area of marketing aims to appeal to emotions, logic and the

senses, and it provides an opportunity for customers to engage with a brand.

This engagement aims to diminish the disconnection between what a company

says about its offerings and what customers actually encounter.

1.1.1 Exploring the Notion ‘Experiential Marketing’

For researchers in consumer behaviour, an experience is above all a

personal occurrence, often with important emotional significance, founded on

the interaction with stimuli which are the products or services consumed. This

occurrence may lead to a transformation of the individual in the experiences

defined as extraordinary. Taking up the argument of sociology research in

consumer behaviour considers experience as a central element of the life of

today’s consumer, a consumer who is looking for sense. For the post-modern

consumer, consumption is not a mere act of devouring, destroying, or using

things. It is also not the end of the (central) economic cycle, but an act of

production of experiences and selves or self-images. Indeed, there is the

recognition of a growing quest on the part of the contemporary consumers for

immersion into varied experience more and more conceptualized as “embodied

experiences”.

Five different types of experiences or ‘strategic experience modules’ (SEMs)

may be identified as follows:

1. SENSE: These are sensual and tangible aspects of a product or

experience that appeal to the five senses of sight, sound, scent, taste and

touch. Sense experiences are particularly useful to differentiate products

or services, to motivate potential customers, and to create a sense of value

in the mind of the purchaser.

2. FEEL: Feel marketing is devoted to inducing affect (i.e. the creation of

moods and emotions) that adhere to the company and brand. Clearly,

positive or negative feelings toward a product or service will influence

the extent to which it is consumed.

3. THINK: The objective of think marketing is to encourage customers to

engage in elaborative and creative thinking that may result in a re-

evaluation of the company and products.

4. ACT: Act marketing is oriented towards the creation of experiences

through behaviour on the part of the customer, either privately or in the

company of others. The goal is to change long-term behaviour and habits

in favour of the particular product or service.

5. RELATE: Relate marketing expands beyond the individual's private

sensations, feelings, cognitions and actions by relating the individual self

to the broader social and cultural context reflected in a brand. In other

words, relate marketing plays upon the identification of self with the

context and associations bound up in the product or service used.

Chapter 2

Problems and Issues

Experiential marketing is often seen as working only on external factors –

improving the value that customers get. But there has to be similar in

consideration for the employee experience. There is very limited work done in

India due to lack of creation of rational experiential approach meant for

consumer in absence of understanding of emotions. Very few organizations are

practicing the concept. Therefore, it will be interesting to find out the effect of

the same in marketing by studying the practices of the marketers.

Some of the major problems faced by today’s organizations in practicing

experiential marketing include the following factors:

2.1. Implementation Process

Nowadays each organization has its own methods and policies of

implementing a strategy or tools. Experiential marketing process may (Sense,

Feel, Think, Act & Relate) involve “strategic planning” which includes 5

strategic experiential modules. Taking one or more combination of this may

differ on company’s own perception and product/service category. Hence,

implementation process may differ which may lead to discrepancies.

2.2. Cost involved

Experiential Marketing requires high cost involvement. Cost involved is

too high for an organization to recover in short time. So, a firm with high

resource backing may be able to sustain better in competition. A newly entered

firm in the market may not be able to compete well with existing firm with this

type of marketing. All the cost put in and expenses incurred may not always

provide positive or better results. Results may be negative and lead to losses.

2.3. Time factor

No fixed period is decided for which experiential marketing can be carried

out. It requires to be followed for a long period. If not continued, it may not

have the desired impact and results will vary on negative side from expected

results. Experiential marketing has problems but right selection of process and

proper planning may lead to effective execution which will in turn lead to

positive impact on minds of the customers. Other elements of marketing still

matter like pricing, service quality, promotional activities and personnel etc.

How experiential marketing is placed in context of other ‘P’ of marketing? Can

experiential marketing overcome the inhibition factor of purchase of value

conscious customers? How can it help in generating extra pull to generate sales

compared to those who are not doing the experiential marketing? Experience

marketing can be useful in building brands. In pharmaceutical industry it is

common practice to demonstrate, make the doctor taste & feel the product in

order to generate prescriptions from doctors.

Therefore this study was conducted by keeping the following objectives:

1. Primary objective: To understand the impact of experiential marketing in

context of Samsung and Nokia mobile phone store in Varanasi.

2. Secondary objective:

- How can EM help in repeat visits?

- Understanding the causative factor for repeat visit by consumers.

- Impact of EM on gender acceptance.

Chapter 3

Research methodology

3.1. Research Design

This research was carried out in Varanasi. One store viz. Samsung Smart

Phone Cafe, implementing experiential marketing (EM) & another store viz.

Nokia Priority Outlet who were not using experiential marketing (NEM) were

selected for comparative study. Nokia Priority is a mobile phone retailer

positioned itself as an exclusive mobile phone store with products ranging from

the basic to high end models. It doesn’t practise experiential marketing strategy.

They are typical store where customers simply transact and do not experience

the effect of experiential marketing. They let the customers play with some

dummy models which are basically features typed but non-functional. On the

other hand, Samsung Smart Phone Cafe has itself earned its niche customers by

positioning itself as a life style mobile phone store with large spacious layout

with bright cheerful interior that encourages people to stay & browse through

the various original models. Soft music added ambience to browsing through

the different models. Simple innovations such as methodical classifications,

clear signage, electronic enquiry desk, attractive display makes looking at the

phone models more pleasant. They have well trained people. Both the stores are

leading store in their respective areas.

3.2. Survey Methods

Personal interview involving face to face basis was utilized. Questionnaire

technique was used as a tool to gather information. The questionnaire focused

on reasons for visiting store, how much time is spent in these store, what can be

contributory factors for repeat visits & is there any difference between the store

who are using experiential marketing & those who are not using experiential

marketing. 5 personnel were involved. The survey took about 18 days.

Permission for conducting the research was given by managers of these stores.

Care was taken to note down the telephone numbers of respondents. This was

verified & in complete questionnaire forms were rejected. Out of 43 forms

(from the first case) of the store practising experimental marketing 36 forms

were selected. Similarly, 29 out of 35 forms of the store not practising

experiential marketing were selected.

3.3. Sampling

It was a comparative study where in two groups of people were selected.

One group belonged to store using experiential marketing & other was NEM

store that used purely transactional marketing. 36 people were in Group I (store

using experiential marketing) & 29 were in Group II (store not using

experiential marketing). 61% of the participants were males though males were

more in experiential marketing store (70%) compared to non experiential

marketing store (51%). 51% were graduates compared to 49% who were

undergraduates. This is given in Table 3.1.

EM NEM Grand Total

Samsung Store Nokia Store

Male 25 (70%) 15 (51%) 40 (61%)

Female 11 (30%) 14 (49%) 25 (39%)

Total 36(100%) 29 (100%) 65 (100%)

Graduate & above 20 (56%) 13 (44%) 33 (51%)

Under graduate and lower 16 (44%) 16 (56%) 32 (49%)

Total 36 (100%) 29 (100%) 65 (100%)

Table 3.1: Customer profile visiting the store

Chapter 4

Results and discussion

4.1. Study 1

The study was a comparative one and involved two segments. Segment 1,

studied the store using experiential marketing (EM). Samsung Smart Phone

Cafe is a leading store practising experiential marketing (EM). The store got the

best retail store award for their innovative approach. Customers were asked

about the reasons for visiting this store; hence word of mouth (32%) was named

the main reason. Other reasons which compelled the customers to visit the store

were the marketing efforts to generate pull through advertising in press (25%),

new arrival information (26%) & PR write up in press (12%). Press advertising

predominantly generated the pull. The location of these store generated only 5%

of customers pull on an overall basis.

68% of the persons who visited these store were first-times. However, 32%

were the repeat visitors. This is significant, as it shows that experiential

marketing brings back the customers. This is reflected in Table 4.1.

EM Store NEM Store

Samsung Nokia

First Visit 24 28

Repeat visit on

monthly basis

12 1

Total 36 29

Table 4.1: Repeat visit frequency

Repeat visits could be due to formation of an impression in experiential

marketing as it creates memorable sensory stimuli. This is more important as

these store improve touch points and connect to consumer through experiential

marketing. Experiential retailing means making connection with consumer who

comes to interactive store for more than merchandizing. This in fact many times

may overcome the inhibition factor of purchase of valuable conscious

customers. The repeat visit by customer is mainly created due to the stimuli &

emotions generated. The benefits of experiential retailing include an enormous

impact on brand equity a great psychological lift. The entire process could be

explained in Figures 4.1, 4.2.

Customers Store practising EM Fed good customers

Repeat

visits

Figure 4.1: Enhancing sales through experiential marketing approach

Friendly store

Ambience

Providing memorable

experience

Press Ads

PR

New arrival

information

Word of mouth

Location

Figure 4.2: Experiential marketing- new dimension

Experiential frame work can be developed in six steps which include

developing a cohesive team, forming impression, eliminating distraction,

providing memorable experience, ensuring all senses engaged and soliciting

feedback. Research on reasons for repeat visit indicated that ambience (34%),

feel good (37%), friendly people (29%) were the important factors which

motivated them to come again.

These factors created better interaction between consumer and store.

Experiential retailing means making connection with consumer more than

merchandizing. Therefore, designing experiential curve can attract the

customer’s attention and imagination. Experiential environment is an essential

source of competitive advantage which is difficult to be imitated and

substituted. Repeat visitors gender analysis revealed that 38% were females on

an overall basis.

Store practising experiential marketing (Repeat Visit)

Samsung Store

Male 7

Female 5

Total 12

Table 4.2: Gender analysis of repeat visit customers

Reinforcement by

experience

Create cognitive

experience and brand

registration in mind

Integrate customer

learning with employee

Trigger the war-

rational v/s emotional

behaviour

Create environment in

which customers can

react

Consumer decisions are

influenced by emotions

Repeat Visit Total Visit

Male 7 28% 25

Female 5 45% 11

Total 12 34% 36 (100%)

Table 4.3: Gender analysis

Thus the study confirms that experiential marketing helps in building

brand which eventually helps in repeat visit. This finally results in creating a

positive impact on the sale of products. It also gives explicit reasons for repeat

visit.

3.2. Study 2

The second segment was the undertaking the research on consumer

behaviour profile of those customers who visited the store which did not

implement EM and how they were different. It also gave an insight on gender

segment analysis of the store not implementing experiential marketing (NEM).

This study was a comparative one and its object was to investigate where the

store not implementing EM have any impact on customers in terms of repeat

visits.

This store basically has transactional marketing and is frequented due to

word of mouth (44%), location (37%), and hand bills (18%). Satisfaction or

dissatisfaction with a product or service is probably the single most widely

studied and confirmed antecedent of word of mouth in marketing mobile

phones.Word of mouth promotion (WOM) is in more practice for store not

using EM compared to EM using store. WOM creates new customer for non-

EM store but does not create repeat customers when compared to EM-store.

This is significant as NEM store customers were new and only 1% were repeat

customers as given in Table 4.1.

Locations play an important role in non-EM store. Hand bill promotion

(19%) is an important medium for promotion of non-EM store as given in Table

2. Most of the respondents (99%) were first-timers and had not come earlier.

This is in contrast to store using EM where repeat visit was 32%. This is a

significant finding of EM on customers revisiting the place. This comparison is

statistically significant.

Conclusion

The present study was conducted in Varanasi. Two stores dealing in

mobile phones were selected. The selection of these stores was based on the

practices and value addition given by these stores. The study explored the

impact of experiential marketing (EM) and tried to evaluate the same on repeat

visit of customer and whether gender has any role. This was compared with the

store that does not use Experiential Marketing.

The study covered 36 (Experiential Marketing store) and 29 (not using EM

store) respondents. Both groups of store were strongly placed as specialty store.

Study indicated that specialty store have more opportunities to try experiential

marketing (EM). The word of mouth (WOM) was equally important for EM

store and NEM store. This was 32% and 38% respectively. Print media do bring

people to these stores. PR is more important to EM store compared to NEM

store. Conventional method like hand bill and location are other two important

factors for NEM store to pull the customers. In order of importance location for

EM store was 5% compared to 37% for NEM store. Repeat visit for customers

for EM store was 32% when compared to 1% of NEM store. Repeat visits

reasons were ambience, feel good, friendly people. Ambience could be due to

facilities provided at this store like table & chair to read, music headphone, cool

environment. This was further enhanced by friendly people at this store.

Female visiting again compared to male is less in store using EM. However,

visit for females was 41% compared to 28%. This is significant. This could be

due to right brain of female that is more active compared to left brain of male.

EM touched the emotional cord of female more than male.

Limitation and Scope for further study

The study was conducted only in selected region of Varanasi city. No

doubt, Varanasi is the one of the most populated city in India but our sample

size may not represent totally the entire population. Also the demographic

factor may play some role. Purchase value of the customers could not be

ascertained due to confidentiality of data as per the store manager. Even

experiential marketing practices differ from product to product, as we can see in

case of Nokia Priority and Samsung store. The comparison of marketing

practices in Nokia Priority and Samsung store is somewhat unjustified as Nokia

Priority store deals with mobile phones ranging from basic to high end models.

Whereas, Samsung Smart Phone Cafe only deals with only high end models of

mobile phones. A further research will be useful if these data can be correlated

with respect to culture and religion. It will be also interesting to study the

impact of word of mouth on bringing in new customers to store. Total customer

experience using different parameters could throw still better insight.