Lesson 2.1: The 4E Strategies to Differentiate
Your Business From Competitors
Lesson 2.2: Making Offerings Memorable Through
Experience Economy Strategies
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Competitive advantage is:
• A distinct combination of offerings that
customers want and only you can uniquely
provide
• What makes your business more attractive than
your competition
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How small businesses develop
competitive advantages:
• Traditional ways:
– Delivering goods to customers better, cheaper, or
faster
• Non-traditional ways:
– Enhancing customers’ experiences as a way of
creating value for them
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Experiences as a key competitive
resource for small businesses because
they:
• Can be very unique
• Are hard to copy
• Are difficult for larger firms to effectively deliver
on a personal customer level
• Can be personalized and flexible
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According to Pine & Gilmore, a “better”
business means having:
• Differentiated offerings from competitors, such
as experiences
• High quality goods and services
Retail
“Escapist” – Harry Potter party
Pegasus & Pendragon Books:
Berkeley, CA
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om/
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Experiential offerings can:
• Address a higher level of customer value
• Uniquely position and differentiate your small
business
• Create value for your business
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A differentiation strategy must:
• Offer a competitive advantage
• Attract customers by positioning offerings in a
unique and distinctive way
• Be truly different in the eyes and mind of the
customer
• Be of value to the customer
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Diagram for creating a unique combination
of offerings to achieve differentiation
Adapted from: Kotler, P. (1997). Marketing Management: Analysis, Planning, Implementation, and
Control. Upper Saddle River, NJ: Prentice Hall.
Pine, B.J., & Gilmore, J.H. (1999). The Experience Economy: Work is Theatre and Every Business a
Stage. Boston, MA: Harvard Business School Press.
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Using the diagram from Pine & Gilmore’s
theater example:
• Consider the following:
– Goods are like props
– Services can be seen as the stage
– Personnel are the actors
– Experiences are added to each element
• All of the elements must work in coordination
with each other for the “play” to be a hit
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When considering your differentiation
strategy, you must keep in mind:
• All elements make sense and hinge on a
common theme
• How your customer experiences the theme
• All of the details that support your theme taken
into account
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Making something memorable means to
make a positive experience easy to recall
or remember at will
As a business owner, you should aim to
make your business memorable
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Experiences that may come to mind
when you say, “I remember when….”
• Situation of personal significance such as
– Getting engaged
– Winning an award
• Rarity, surprise, or suspense such as
– Spotting a mountain lion when on a neighborhood
walk
– An acrobatic circus show
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Experiences that may come to mind
when you say, “I remember when….”
• Special design or sensory features such as
– Decorations of a party or holiday
– Incredible natural beauty of nature like the colors of a
setting sun
• Intensity of emotion such as
– A really scary roller coaster ride
– An exciting moment in sports
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Memorable experiences lead to Word-of
Mouth (WOM) advertising, which is:
• Positive communication by the customer to
friends and relatives
• A cost effective promotional strategy
• Often referred to as “free advertising”
• Considered a more persuasive message when
coming from a trusted source
• Likely to reduce perceived risk associated with
patronizing a new business
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Creating memorable experiences
requires the following specific techniques:
• Repetition of information
• Personally relevant experiences
• Making sense of unexpected information
• Physical performance of an action rather than
simply observing
• Multi-sensory (e.g., sight, smell, sound)
experiences
• Emotionally arousing experiences
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Memory making techniques are
embedded in Pine & Gilmore’s experience
economy strategies by:
• Creating a theme and harmonizing the cues
around the theme reinforcing the business
message
• Offering educational and escapist experiences
that actively engage the customer
• Providing rich, multi-sensory settings
• Arousing customers’ emotions
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