Bernd Schmitt, PhD, Robert D Calkins Professor of International Business and executive director of the Center on Global Brand Leadership at Columbia Business School in New York, told delegates at the 2nd African Experiential Marketing Summit he was glad to hear that experiential marketing is alive and kicking in Africa.
When he wrote his first book Experiential Marketing in 1999, no one was really using the term 'experiential' at that point - branding was done internally and no one was really interested in the experience of the brand.
By the end of the 1990s, companies had figured out their branding approach. Then they figured out that this wasn't enough, and the next step was to create an experience around the brand. Out of this came the experiential marketing movement with the essence of the experience for the customer in the interaction and getting a sense of the actual brand. "Over the last 10 years, we've seen a revolution and companies want to figure out what the experience should be; it's a very dynamic and hot movement going on globally," says Schmitt.
Schmitt used the following examples of companies that have focused on the experience: Apple, Mini, Starbucks, Singapore Airlines, W Hotels, Pinkberry.
Starting with Apple, not everything they've done is experiential, but everything they've done is with the experience of the brand which also allows them to be creative. What Apple did was focus on the experience, not the technology with the iPod. Apple realised they needed to provide relevant features but looked at the iPods as lifestyle products and not as pieces of technology. Apple thinks about the little aspects of design, the packaging, the contact points with the customers - the Apple Store, for example. "Marketers need to pay attention to these small details," says Schmitt.
Schmitt talked about 'experiential marketing' in the car business - hot models on top of a perfectly lit car at a motor show! Mini, of course, came in and turned the 'experiential' motor show aspect on its head and do everything differently and highly interactive. Mini's lifestyle magazine is also not about the car engines and features but on the lifestyle of the city in which its customers live. With a very different approach to the car industry, in six years, it has sold over one million cars.
Starbucks totally shook up the coffee business. "Starbucks taught us a language, and while their coffee is nothing extraordinary, it is the experience that matters here - a third space between home and office - with its atmosphere, the variety of coffees etc. Starbucks can charge a huge premium price for the coffee because of the experience of the environment. That is what you pay for," says Schmitt.
W Hotels is part of a huge chain of premium hotels - Western, Sheraton etc. They felt that modern travellers aged 20-45 years old, need something else other than a business centre and a few restaurants etc. Modern travellers want to have some fun - they want to pamper themselves at a spa, go to a cool bar etc, much like boutique hotels. A lot of the look and feel of W Hotels, are like many boutique hotels.
Singapore Airlines has been a highly successful airline for many years. "When it launches a new service or product, they always think big. Its new first class offers passengers their own room. They provide a great experience," says Schmitt.
Pinkberry is a frozen yoghurt company in the US. They have a limited product line - two flavours and then add some nuts or fruit on top on it. The store has Philip Starck furniture, it's a straightforward contemporary store that works really well.
"How does a brand fit into a consumer's lifestyle - what does the customer want, how can a brand help the customer enrich their lives," says Schmitt. This is how brands must think now.
Does experience make a difference?
"As experience increases so do the positive impressions and the purchasing intentions. When you are using experiential communications at every level of exposure you get higher awareness. But you can't fool customers with great customer engagement and then have a lousy product. In a scenario where products are basically the same, this is where experiential marketing comes into its own," says Schmitt.
Schmitt says that experiential marketing is poles apart from traditional marketing. Experiential focuses on customer experience with a focus on purchase and consumption, the research is about customer insight and looking at the fact that customers are rational and emotional. It also means a move from a product focus to a consumption situation while looking at the socio-cultural environment.
A key concept, according to Schmitt, is that of experience providers: communications, product, environments, events & sponsorships, people, visual/verbal identity and website. Broadly speaking, if you're in charge of a brand, these are the concepts you have to look at, as these create the experience and you have to look at them comprehensively and in an integrated way. There are five strategic experiential modules: sense, think, act, relate and feel.