Lesson 4. Assessing Experience Economy Strategies of the Business

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• Lesson 4.1 A 4E-based Marketing Plan to Help
  Define the Firms Position and Image
• Lesson 4.2 4E-based Strategy Formulation
• Lesson 4.3 Strategy Implementation and Evaluation

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A marketing plan is important in order to

• Align all marketing activities with the firms
  mission statement and long-term strategic plans
• Help operators/owners to review and think
  objectively through all steps in the marketing
  process

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A marketing plan is important in order to

• Assist in the budgeting process to match
  resources with marketing objectives
• Create a process to monitor actual against
  expected results
• Help position the firm competitively in the
  marketplace

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Building blocks of a 4E-based marketing plan
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Components of the 4E-based strategy formulation
include

• Mission statement
• Situation analysis
• Segmenting, marketing, and positioning

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The business mission statement should express an
organizations

• Purpose
• Approach to managing the business
• Primary offerings
• Target customers
• Concerns for employees and the community

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The situation analysis

• Refers to collecting, analyzing, and interpreting
  information and trends that affect the company
• An operator needs to constantly monitor these
  trends and conditions to estimate how the changes
  may affect the business
• Identifies current organizational strengths and
  weaknesses and emerging opportunities and threats
  (referred to as a SWOT analysis)
• Helps operators determine the direction of their
  business, including the use of the 4Es

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For a 4E-based situation analysis consists of

• Internal audit of offerings
• Market trends analysis
• Market potential analysis
• Competitive analysis

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Internal audit of offerings Evaluating the 4Ps

• Identify current strengths and weaknesses
  including the 4Es offered to the customer
• Evaluate the 4Ps in conjunction with the 4Es
• 4Ps of the firm Property, Product Presentation,
  Promotions, and People

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The 4Ps Property

• Property becomes the stage for the business,
  including buildings and interiors, where
  customers interact with goods or partake of a
  service

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The 4Ps Property

• Property relatively permanent (i.e., physical
  and time-wise permanence) business assets such
  as
• Architectural design elements
• Interior design elements
• Landscape design elements
• Business name or location signage
• Artwork
• Business vehicles

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The 4Ps Product Presentation

• Product Presentation elements enrich the
  experience for the customer, and goods and
  services are enhanced through sensory elements
  (e.g., music, scent) and physical elements (e.g.,
  display units, props)

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The 4Ps Product Presentation

• Product Presentation easily changeable elements
  of the setting that surround and enhance goods or
  services including
• Display units and props
• Product labels
• Product samples
• In-store signage
• Presentation materials, such as
• Packaging, wrapping paper for retail products
• Tableware, table linens, menus for food service
• Bedding and linens for BBs
• Music
• Scents and tastes

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The 4 Ps Promotions

• Promotions announce and emphasize the
  experiential aspects of the business
• Promotions informational outlets and activities
  for publicizing/promoting the business offering
  or name including
• Advertisements
• Brochures or catalogs
• Banners
• Newsletters
• Stationary and business cards
• Press releases
• Public relations and special events

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The 4Ps People

• People refers to the interaction of the customer
  with the staff, which has a potential to create
  experiential offerings for the business
• People qualities of staff and/or customers that
  affect customer experience including
• Physical appearance, such as
• Staff uniforms or costumes
• Hairstyles and grooming
• Interpersonal behavior, such as
• Warmth, humor, interpersonal communication skills
• Displaying or sharing of knowledge, skills, or
  experiences

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Market trends are identified by analyzing

• Customer behavior trends and preference for the
  key business offerings (e.g., 4Es) of the
  business
• Trends among business competitors emerging new
  competitors, modifications of offerings by key
  competitors, and new product developments
• Industry trends industry standards of
  offerings, general direction of industry
  movement, and other changes within the industry

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Information on trends obtained from

• Chambers of commerce
• Convention and visitors bureaus
• Universities
• Government agencies, such as small business
  development centers
• Trade associations
• Commercial organizations, such as marketing
  research firms and advertising agencies

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Market potential analysis

• Total demand estimates for the business offerings
  through a logical process
• Estimates expressed in concrete terms such as
  percent, number, and dollar

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Competitive advantage analysis SWOT analysis

• SWOT analysis Strengths, Weaknesses,
  Opportunities, and Threats
• Strengths and Weakness of the business identified
  from the internal audits
• Opportunities and Threats to the business
  identified from market trends/potential and
  competitive analyses

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Segmenting, targeting, and positioning

• Market Segmenting grouping customers based on
  their common characteristics, such as needs and
  preference
• Targeting being focused on the chosen market
  segments, which have been evaluated carefully for
  profit potential

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Segmenting, targeting, and positioning

• Positioning placing a business clearly in the
  minds of customers by instilling a strong,
  salient, and positive image

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Positioning begins with

• Development of a strong theme that fits
• Mission and core offerings (4Es in particular)
• Target markets needs and preferences
• Effective differentiation from those of
  competitors

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Components of the 4E strategy implementation and
evaluation

• Setting marketing objectives and strategies
• Developing a budget and allocating resources
• Creating a marketing control plan

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Marketing objectives and strategies are

• Achievable and realistic
• Expressed in clear numeric terms such as dollars,
  percent, number, or other quantitative measures
• Time-specific--containing a specific business
  deadline for achieving the goals
• Partially achieved by adding 4E strategies

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Marketing strategies

• 4E offering strategies
• Pricing strategies
• Advertising strategies

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What are 4E offering strategies?

• Encompassing tangible goods, instrumental
  services, and the 4Ps (Property, Product
  Presentation, Promotional Application, and
  People) that contribute to the experiential
  offering
• (Re)designing or selecting goods, services, and
  experiences to better meet the needs and
  preferences of the selected target market
  segments
• Addressing the SWOT for your organization
• Thinking about how you can specifically enhance
  value for the customer through 4E aspects of your
  total offerings

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Guiding principle for the 4E offering strategy by
Pine and Gilmore (1999)

• Theme the experience
• Harmonize impressions with positive cues
• Eliminate negative cues
• Mix in memorabilia
• Engage the five senses

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Pricing strategies

• Affect the demand for a business offering and
  becomes an unavoidable focus of competition
• Should be done carefully in a way to maximize
  profit margin and, at the same time, minimize the
  customers switch to competitors
• Need to include the new business offering
• Should reflect how much customers are willing to
  pay for the new offerings
• Are determined by trial and error in many cases

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Advertising strategies

• Create the customers initial expectations about
  the companys offerings and such expectations
  bring the customer to the business
• Should best reflect the business offerings,
  especially the newly added 4E elements
• Must be consistent with the positioning theme
• Must be convincing to the chosen target customer
  groups

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Budget development and allocation of resources

• Should be as detailed and realistic as possible
• Must provide information on costs of materials at
  the unit level of materials planned for
  improvements
• Needs to include the advertising budget in the
  final marketing budget

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The marketing control plan

• Provides a roadmap for proposed marketing actions
• The operator must develop a master chart that
  shows detailed time plans for implementing the
  suggested actions from above, and should include
• Each proposed marketing actions implementation
• Time sequence and time frame of each action
  implementation
• Plans to check the progress and measure the major
  implementation outcomes