VIRTUAL EXPERIENTIAL MARKETING AT MARRIOTT INTERNATIONAL, INC.:
AN EXAMINATION OF EFFECTS ON CONSUMER PURCHASE INTENTIONS
Heather Nicole Thomson
A Thesis Submitted to the
University of North Carolina Wilmington in Partial Fulfillment
of the Requirements for the Degree of
Master of Business Administration
Cameron School of Business
University of North Carolina Wilmington
2010
Approved by
Advisory Committee
Luisa Andreu
Martina G. Gallarza
Maria Jose Miquel
Vince Howe
Chair
Accepted by
DN: cn=Robert D. Roer, o=UNCW,
ou=Dean of the Graduate School &
Research, email=roer@uncw.edu,
c=US
Date: 2011.04.01 12:10:22 -04'00'
_____________________________
Dean, Graduate School
TABLE OF CONTENTS
ABSTRACT .............................................................................................................................. iv
LIST OF TABLES ...................................................................................................................... v
LIST OF FIGURES ................................................................................................................... vi
CHAPTER I. INTRODUCTION ................................................................................................. 1
I.1. Justification of the Selected Topic .................................................................................. 1
I.1.1. Academic Justification .............................................................................................. 1
I.1.2. Managerial and Socioeconomic Justification ............................................................. 2
I.2. General Objective and Specific Objectives ...................................................................... 3
I.3. Methodology .................................................................................................................. 3
I.4. Framework ..................................................................................................................... 4
CHAPTER II. LITERATURE REVIEW .................................................................................... 7
II.1. Experiential Marketing: A Postmodern Approach ......................................................... 7
II.1.1. Definition ................................................................................................................ 9
II.1.2. Physical Brand Environments................................................................................ 12
II.1.3. Experiential Event Marketing ................................................................................ 12
II.1.4. Experiential Retailing ............................................................................................ 14
II.1.5. Virtual Brand Environments ................................................................................... 16
II.2. The Customer Experience Creation Process ................................................................. 17
II.2.1. The Goal: Deliver Experiential Value ..................................................................... 18
II.2.2. Pre-Consumption and Purchase Intentions .............................................................. 19
II.2.3. Moment of Truth, Quality of Experience, and Satisfaction ..................................... 20
II.2.4. Post-Consumption and Brand Loyalty .................................................................... 21
II.3. Tourism Marketing: Marketing Experiences vs. Experiential Marketing ...................... 23
II.3.1. Marketing a Total Experience ................................................................................ 23
II.3.2. Offering Experiences.............................................................................................. 24
II.3.3. Creating Hotel Experiences to Build Brand Value ................................................. 26
CHAPTER III. APPLICATION TO MARRIOTT INTERNATIONAL, INC. ........................... 28
III.1. General Description of Marriott International, Inc. ..................................................... 28
III.1.1. SWOT Analysis .................................................................................................... 29
ii
III.2. Experiential Marketing in Marriott: Incorporating Exp. Mktg. into Tourism Mktg. ..... 36
III.2.1. Experiential Offerings ........................................................................................... 38
III.2.2. Experiential Marketing Campaigns ....................................................................... 39
III.2.3. Virtual Experiential Platforms ............................................................................... 40
III.3. Proposal for Improvement in Marriott ......................................................................... 41
CHAPTER IV. PROPOSAL ..................................................................................................... 44
IV.1. Objectives of Specific Proposal in Marriott................................................................. 44
IV.2. Basis for Empirical Research ...................................................................................... 44
IV.2.1. Schmitt‟s Strategic Experiential Models ............................................................... 45
IV.2.2. Experiential Value ................................................................................................ 48
IV.3. Hypotheses ................................................................................................................. 48
IV.3.1. Experiential Marketing and Experiential Value ..................................................... 48
IV.3.2. Experiential Value and Purchase Intentions .......................................................... 50
IV.4. Methodology .............................................................................................................. 51
IV.4.1. Survey Development ............................................................................................ 51
IV.4.2. Data Collection ..................................................................................................... 53
IV.4.3. Statistical Analysis ............................................................................................... 54
IV.4.4. Results .................................................................................................................. 56
CHAPTER V. CONCLUSION ................................................................................................. 67
V.1. Discussion of Results ................................................................................................... 67
V.2. Managerial Implications .............................................................................................. 69
V.3. Limitations .................................................................................................................. 72
V.4. Areas for Further Research .......................................................................................... 72
REFERENCES ......................................................................................................................... 75
APPENDIX .............................................................................................................................. 80
iii
ABSTRACT
The following Master Thesis explores the effects of experiential marketing on consumer
purchase intentions through perceived experiential value. The research application focuses on the
hospitality and lodging company, Marriott International, Inc. The Master Thesis is divided into 5
main sections. Firstly, we highlight in the introduction the interest to study this topic, as well as
general and specific objectives of the study. Section 2 focuses on a review of the literature
related to experiential marketing, highlighting the customer experience creation process and
experiential marketing as it relates to tourism marketing. Section 3 is an application of the
literature to an international lodging company, Marriott International, Inc. It is proposed that
based on the literature review and analysis of the company, virtual experiential marketing can
provide benefits such as providing added value and enticing positive purchase decisions. Section
4 consists of the survey-based methodology of the study to test this proposal to be able to
provide recommendations to business managers. This section includes the data analysis and
results of the applied empirical research exploring the relationship among virtual experiential
marketing, experiential value, and purchase intentions.
The concluding section provides a
discussion of the results as well as managerial implications for Marriott International, Inc. and
other lodging companies. On the basis of the previous work it can be concluded that virtual
experiential marketing induces positive purchase intentions through experiential value.
iv
LIST OF TABLES
Table
Page
1.
Realms of Experience in the Tourism and Hospitality Industry ........................................ 25
2.
SWOT Analysis............................................................................................................... 30
3.
Definition and Measurements of Each Concept................................................................ 46
4.
Strategic Experiential Modules‟ Definitions .................................................................... 47
5.
Summary of Literature Findings on Multidimensional Perceived
Value Measurements ....................................................................................................... 49
6.
Constructs and Corresponding Measurement Items .......................................................... 55
7.
Demographic Profile of Respondents ............................................................................... 58
8.
Principle Components Factor Analysis ............................................................................ 60
9.
Results of Reliability on Experiential Marketing, Experiential Value,
and Purchase Intentions ................................................................................................... 61
10.
Summary of Descriptive Statistics ................................................................................... 62
11.
Correlations Among Variables ......................................................................................... 62
12.
Regression Analysis Results ............................................................................................ 64
v
LIST OF FIGURES
Figure
Page
1.
Dimensions of the Tourism and Hospitality Experience ................................................... 25
2.
Image for Main Page of Video #1 .................................................................................... 52
3.
Image for Main Page of Video #2 .................................................................................... 52
Theoretical Framework of Experiential Marketing, Experiential Value,
4.
and Purchase Intentions ................................................................................................... 54
vi
CHAPTER I. INTRODUCTION
I.1. Justification of the Selected Topic
The topic for this paper was selected after reviewing academic journals and recent
articles from prior researchers and studies. The justification is based on academic theories as
well as managerial and socioeconomic theories which are explained in the following sections.
This study was performed to fulfill requirements of a Master‟s Thesis. A strong personal interest
in the topic was important to the researcher. Experiential marketing was chosen as the topic for
its innovativeness, real-life applications, and exciting appeal to the researcher.
I.1.1. Academic Justification
While prior researchers have explored the topic of experiential marketing, most studies
focus on conceptual thoughts and theories. Wood (2009) examines the growth of experiential
marketing, how experiential event marketing has evolved, and the need for an evaluation system.
Williams (2006) conceptualizes how the tourism industry is reacting to experiential marketing.
Gilmore and Pine (2002) explore experiential environments and introduce a model to implement
experiential brand environments. While these articles provide great insight, few researchers have
attempted to apply empirical research to the topic. Prior research has been done to evaluate how
consumers perceive experiential value and the outcomes of the added value (Keng, Huang,
Zheng, and Hsu, 2007; Moliner, Sanchez, Rodriquez, and Callarisa, 2007; Sandstrom,
Edvardsson, Kristensson, and Magnusson, 2008; Yuan and Wu, 2008). However, these studies
focus on customer experiences and few studies attempt to focus on actual experiential marketing
techniques used in the promotional strategies of a company. By empirically researching this
topic, and how consumers respond to experiential marketing methods, business managers will be
better able to understand effects and outcomes of experiential marketing. With this knowledge,
companies will be better able to design operations and marketing campaigns to receive the most
benefit and satisfaction from experiential marketing.
I.1.2. Managerial and Socioeconomic Justification
Experiential marketing has evolved over the years in response to a shift in thinking.
Unlike in the past when consumers sought products that rationally and functionally appealed to
them, consumers are now seeking out products that emotionally appeal to them as well.
Researchers specifically explain this as an effect of post modern society (Atwal and Williams,
2008).
In today‟s business economy which is consistently adapting to ever-changing trends,
marketing and its related research must also adapt. Increasing developments in information
technology, the importance of a valuable brand, and the universal presence of communications
and entertainment have all attributed for the shift in marketing from the traditional rationally
focused, to experientially focused (Schmitt, 1999).
Wood (2009) argues that “the consumer‟s desire for stimulating experiences is not new,
only the recognition by marketers that this desire can be successfully exploited through more
sophisticated experiential marketing techniques” (pg. 252). More and more companies are
beginning to see the importance of experiential marketing. Research conducted by a global
experiential marketing agency found that nontraditional marketing methods which combine
brands and products with lifestyle activities of consumers are most affective in appealing to the
large demographic of teenagers and young adults (Gen Y, 2005). Because of developments in
today‟s business markets and evolving consumer trends, young consumers value and welcome
2
experiential marketing into their decision making behaviors towards what they consider valuable
products and brands.
I.2. General Objective and Specific Objectives
General Objective:
Examine how consumers respond to experiential marketing techniques offered through a
company website and ultimately offer suggestions on how the features can be improved to
benefit the company.
Specific Objectives:
Identify affective components of experiential marketing utilized on Marriott‟s website in
relation to virtual tours and promotional videos.
Determine the effectiveness that components of Marriott‟s virtual experiential marketing
(sense perception, feel perception, think perception, and act perception) have on
experiential value (emotional value and functional value) according to consumers.
Determine the effect that experiential value perceived through Marriott‟s virtual
experiential marketing has on users‟ purchase intentions.
Determine whether consumers respond more positively to experiential marketing
techniques delivered through interactive portals (virtual tours) or through standard media
sources (promotional videos).
I.3. Methodology
The methodology for this paper was survey based. It consisted of developing an online
survey to be distributed to potential consumers of a hotel brand.
3
The survey measured
effectiveness of experiential marketing perceptions on perceived experiential value as well as the
effects of perceived experiential value on purchase intentions. A sample survey was collected
from 22 respondents and addressed respondents‟ concerns, confusions, and suggestions of the
questionnaire. Reliability of the scales was also assessed during pretesting using Cronbach‟s
alpha. A final version of the survey was electronically distributed and filled out with 150
complete and usable surveys being returned for analysis. Factor structures and Cronbach‟s alpha
were assessed to test the discriminant validity and reliability of the measures. Descriptive
statistics and correlations among variables were calculated to analyze the measures. Regression
analysis was performed to determine the relationships among concepts.
Conclusions and
managerial implications were then drawn from the analysis.
I.4. Framework
The framework of this paper is divided in to five sections: introduction, review of the
literature, company application, proposal, and conclusion. The first section, the introduction,
introduces the paper by explaining the justification of the selected topic with both academic and
managerial explanations. It also lists the general and specific objectives of the paper along with
introducing the methodology of the research.
The literature review, section two, examines and discusses the main topic, experiential
marketing.
It analyzes the evolvement of experiential marketing from past researchers‟
perspective as well as touching on the topic of existing experiential marketing methods such as
experiential retailing, experiential events, and virtual brand environments. Next, the literature
review focuses on the customer experience creation process and how experiential marketing can
be used to enhance this through consumption phases of a product or service. It states that the
4
ultimate value of creating an experience for a customer is to add value while enticing purchasing
decisions, instilling customer satisfaction, and building brand loyalty (Mathwick, Malhotra, and
Rigdon, 2001; Study Shows Value, 2007; Williams, 2006; Xu and Chan, 2009). Finally, this
section explores the literature on tourism marketing as it is related to experiential marketing.
This section provides a basic description of tourism marketing and what kinds of experiences are
offered to customers, as well as mentions the benefits and challenges of using experiential
marketing in the tourism industry.
The third section focuses on applying the literary research to a company. The company
with which this research will be applied is Marriott International, Inc. (Marriott). First, this
section provides a general description of Marriott, followed by a SWOT analysis. Then, based
on the literature review and the company analysis, a proposal for improvement is introduced. It
is proposed that Marriott should take advantage of its abilities to utilize virtual experiential
marketing techniques through its innovative website in order to improve its efforts and
operations by determining what aspects of experiential marketing consumers are most responsive
to.
The fourth section, the proposal, first states specific objectives to be reached from
conducting this research. This is followed by an explanation of the theoretical framework
including definitions of the constructs and measures. Hypotheses are defined in the section to
present a prediction of the results. Next, the methodology is presented consisting of survey
development, data collection, and statistical analysis. The statistical analysis assesses a profile of
the participants, reliability, validity, correlations, and descriptive statistics. Regression analysis
concludes this section by analyzing which hypotheses were supported and which hypotheses
5
were rejected. A short discussion of the results examining the results analysis concludes this
section.
Finally, the last section concludes the paper with conclusion and managerial implications.
The first part of this section assesses the objectives of the paper by making conclusions based on
the results.
Managerial implications are drawn from the conclusions and results to offer
suggestions for improvement in Marriott‟s virtual experiential marketing as well as advantages
and disadvantages of the applied research. The section is concluded with limitations of the
process and research as well as possible areas for further research.
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CHAPTER II. LITERATURE REVIEW
II.1. Experiential Marketing: A Postmodern Approach
Experiential marketing has been argued to be an effect of postmodernism.
Postmodernism can be defined as a western philosophy that breaks away from the modern,
traditional way of thinking as a functional and rational process. Any thinking or behavior which
takes on a new approach, veering away from the traditional, functional way of thinking, can be
considered an effect of postmodern society (Atwal and Williams, 2008). This effect is very
much related to not only the evolving function and purpose of marketing but also consumer
consumption. Contemporary marketing has seen the effects of a postmodernism society from the
implementation of innovative techniques used in order to appeal to a new generation of
consumers who are more interested in the experience offered and the emotions and memories
taken away from that experience. The most popular and recent technique to achieve this appeal
is experiential marketing (Experiential, 2008).
Schmitt (1999), a pioneer of experiential marketing, explains it as “mov[ing] away from
traditional „features-and-benefits‟ marketing toward creating experiences for customers” (p. 53).
Schmitt (1999) argues that this post modern shift in thinking can be attributed to three recent
developments in the business market: the ever increasing presence of information technology,
supremacy and importance of a valuable brand, and omnipresence of communications and
entertainment. These simultaneous occurrences in the business world have had a direct effect on
how companies market their brands, forcing them to shift gears into the experiential mode.
Steering away from the “traditional approach” to marketing, consisting of a focus on functional
features and benefits, a narrow definition of product category and competition, a view of
customers as rational decision makers, and analytical, quantitative, and verbal methods and tools,
experiential marketing encompasses four new characteristics (Schmitt, 1999).
In the article
“Experiential Marketing,” Schmitt (1999) identifies the key characteristics of experiential
marketing: a focus on customer experience, a focus on consumption as a holistic experience, a
view on customers as rational and emotional animals, and the use of eclectic methods and tools.
The first pioneers of experiential marketing, Gilmore and Pine (2002), derived this new
approach to marketing and business in general from the evolution of The Experience Economy.
The Experience Economy refers to the idea that modern economy is transitioning from
marketing services to marketing experiences by delivering “experiential market offerings” that
engage customers with a good or service so that the experience is memorable (Petkus, 2002, pg.
50). In The Experience Economy, not only can a customer purchase a good, or receive a service,
but they can also acquire an experience. For example, when a consumer goes to a music concert
or music festival, they receive a good, service, and experience. The goods received are any
souvenirs, items, food, etc. bought at the concert. The services received are commodities such as
parking, use of bathroom facilities, food and beverage services, and employee assistance. But
the most important part of the music concert is the experience received, such as the feelings and
emotions obtained from the performance, and the lasting memories made because this is what is
remembered and taken away from the event. The experience is what companies in numerous
industries are beginning to market to consumers in order to build a brand.
Not only do
companies market how great a product is and the benefits it offers, but the main focus is put on
the experience it provides.
Gilmore and Pine (2002) expand the experiential concept by defining four realms of
experience: entertainment, education, aesthetic, and escapist. Each realm involves different
8
degrees of customer participation (passive of active) and interaction (absorption or immersion).
For example, entertainment involves passive participation and senses of the customer.
A
customer can simply sit back and view, or sense, the service being provided while at a music
concert or theatre performance.
Education involves more active participation where the
customer interacts and exercises his or her mind by learning, as seen in a museum visit or
gaining knowledge from a lecture. The aesthetic and escapist realms focus on the customer
immersing themselves in the experience. For the escapist realm, the customer becomes part of
the experience by doing things to interact physically with the service, such as actively
participating in a water sports, like jet skis or water skiing. The aesthetic realm involves a
passive immersion which does not influence the environment and where the sensory stimuli are
intense. The aesthetic realm can be considered to be a stronger degree of the entertainment
dimension, where a consumer views an actively engages themselves in an art exhibit. These four
realms are not mutually exclusive, though Gilmore and Pine (2002) note that a service can only
be enhanced by incorporating multiple realms into the experience market offering (Petkus,
2002). This concept, along with a more in depth look at the four realms, will be discussed in
more detail in following sections of the paper.
II.1.1. Definition
Several explanations of experiential marketing will be explored throughout this literature
review. A summary of definitions from prior researchers and academics is displayed below, in no
particular order, to further introduce the concept of experiential marketing.
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a marketing tactic designed by a business to stage the entire physical environment
and the operational processes for its customers to experience (Yuan and Wu,
2008, p. 388)
a technique resulting in customers‟ developing recognition and/or purchasing
goods or services from a company or brand after they experience activities and
perceive stimulations (Schmitt, 1999; Yuan and Wu, 2008, p. 391)
“mov[ing] away from traditional „features-and-benefits‟ marketing toward
creating experiences for customers” while including a focus on customer
experience, a focus on consumption as a holistic experience, a view on customers
as rational and emotional animals, and the use of eclectic methods and tools
(Schmitt, 1999, p. 53)
marketing experiences by delivering “experiential market offerings” that engage
customers with a good or service so that the experience is memorable (Petkus,
2002, pg. 50)
involving the target audience in an active experience in which the potential
consumers interact with a brand in a public space, physical or virtual, created as a
brand environment by the marketers (Experiential, 2008)
“a personal occurrence with emotional significance created by an interaction with
the product or brand related stimuli” resulting in “something extremely significant
and unforgettable for the consumer immersed into the experience” (Wood, 2009,
pg. 250)
“experiential marketing is the opposite of traditional marketing in that the
emphasis is on the consumer‟s experience, the importance of the consumption
10
situation, and consideration of both the logical and emotional aspects of the
customer” (Chou, 2009, pg. 995)
a communication tool which “create[s] absorbing venues – real or virtual places –
where customers can try out offerings, as they immerse themselves in the
experience” (Gilmore and Pine, 2002, pg. 5)
For the purpose of this study, experiential marketing will be defined as:
a communication tool providing the opportunity for a consumer to experience a personal,
emotional, unique, and memorable occurrence in which the consumer interacts with a brand by
being immersed into an environment (physical or virtual) created by brand marketers (Wood,
2009; Experiential, 2008; Gilmore and Pine, 2002)
The underlined portions of the definition signify the main concepts of experiential
marketing which are emphasized in Wood‟s (2009) definition listed above. The most basic
concept of experiential marketing is that the consumer is physically or emotionally interacting
with a brand instead of just simply viewing an advertisement as would be carried out with
traditional marketing. Marketing campaigns must also be considered emotional, unique, and
unforgettable in order to be considered experiential and to differentiate from traditional methods.
It is also important to take note that while every interaction must consist of Gilmore and Pine‟s
(2002) experience dimensions in order to provide a memorable experience, it is also equally
important for businesses to affectively market these experiences. One way in which firms have
successfully done this is by creating experiential places called brand environments (Experiential,
2008).
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II.1.2. Physical Brand Environments
Not only do businesses promote the experience a product or service will provide, an
actual experience is now being incorporated into marketing techniques used to build a brand‟s
image. Aside from what features, benefits, and experiences to promote, the question of how to
market these attributes can be achieved through experiential marketing.
The experiential
marketing aspect of creating experiences to promote a brand has appeared more and more over
the past decade. This aspect takes on a new approach of involving the target audience in an
active experience in which the potential consumers interact with a brand in a public space
created as a brand environment by the marketers (Experiential, 2008). Some general examples
include a goal area at a sports match covered in a brand name where a participant can win a free
gift after attempting to shoot a goal. Or more specifically, when travel web site Expedia held an
event called Expedia Blue Sky Day in London where people were encouraged to paint or draw
on one of the blue canvases set up around the London square (Experiential, 2008). The brand
environment can be physical or virtual as long as it creates a place for the consumer to interact
with the brand on an emotional and participative level (Ponsonby-McCabe and Boyle, 2006).
II.1.3. Experiential Event Marketing
One of the most recent trends in carrying out experiential marketing is to create a brand
space at a live event, such as musical concerts/festivals, sporting events, or to create an event
purely for the brand (Wood, 2009; Experiential, 2008).
Wood (2009) defines experiential
marketing as an interaction between a consumer and a brand which creates a memorable, unique,
and emotional experience. For this to translate into experiential event marketing, Wood (2009)
states that brands incorporate live events into their marketing communications strategy, allowing
12
“audiences [to] interact with a product or brand face to face” in order to “generate short-term
impact but also build long term changes in attitude and belief” (pg. 248). Some examples of
when marketing events (live occurrences designed to communicate a message to a target
audience) can be utilized include product launches, publicity events, product sampling, and
competitions/contests (Wood, 2009). For these events to be considered experiential, the target
audience has the opportunity to actually participate and interact with the brand. For example, at
a live event created around a competition, participants can enter into a contest and expose
themselves and others to a brand, for example Red Bull‟s flying machines, where customers
design and construct apparatuses to see which ones fly the best (Wood, 2009).
Another example of experiential event marketing is created events, when a company
creates an event specifically for a brand, and develops the event to carry the values and image of
the brand. One example of this is Guinness‟ Witness Festival held in Ireland (Wood, 2009). At
this event, Guinness created a sister brand called Witness to appeal to the 18-24 year old target
group showing a decreasing consumption of Guinness products. Witness, in collaboration with
the music department of an international marketing agency, is the host of music festivals and
music events in Ireland. It was proposed that the sister brand, although promoting Guinness,
would give the Guinness brand a separate and new identity, in hopes to increase interest in the
Guinness brand (Moor, 2003).
As marketing experts have tried to keep up with changing times by expanding their
marketing mix to include experiential features and methods, live experiential events have
become a more and more important tool in developing and building a brand (Flack, 2007).
Marketers are learning to move away from traditional marketing techniques in which
advertisements force commercial messages, specifically through television media, often times
13
annoying and interrupting the viewing audience. With changing preferences of consumers, and
new technologies like TiVo, which allow viewers to fast forward through commercials,
companies are establishing live experiential events as part of marketing mixes to appeal to
consumers who are seeking more than just a message from a brand (Flack, 2007; Gen Y, 2005;
Hien, 2007). These changing consumers specifically include those that fall into the Generation
Y category. Generation Y consists of teenagers and college students which make up nearly one
third of the United States population and have a spending power of approximately $170 billion.
In a survey conducted by Jack Morton Worldwide, one of the largest experiential marketing
agencies, it was found that Generation Y consumers respond more strongly to live marketing
events than to traditional media, like TV, print ads, and the internet.
The generation Y
demographic is used to having advertisements imposed on them through television or the internet
that they disregard it, causing experiential marketing to have more of an impact on their
opinions. Live, experiential events are able to differentiate brands in their minds, deliver more
than a message, initiate conversations, and spread word of mouth (Gen Y, 2005).
II.1.4. Experiential Retailing
Experiential marketing campaigns generally fit into one of the following categories:
experiential retailing, experiential events marketing, or experiential branding (Petkus, 2002).
Gilmore and Pine (2002) define experiential marketing as a communication tool which “create[s]
absorbing venues – real or virtual places – where customers can try out offerings, as they
immerse themselves in the experience” (pg. 5). So for a firm that is trying to bring a brand to the
retail market, it is very important that the firm considers much more than simply what its product
has to offer but rather, how can an experience be implemented into the customers‟ retail
14
encounter.
The Pleasant Company, creator of the American Girl dolls and franchise, has
successfully brought their product in to the retail industry through the development of the
innovative The American Girl Place. At The American Girl Place, visitors and shoppers can
enjoy a theatre production, eat a cozy café to sip tea with lunch or dinner, take part in a photo
shoot to have their own picture displayed on the cover of an American Girl magazine, and even
get their doll‟s hair styled at the hair salon (Gilmore and Pine, 2002). A visit to The American
Girl Place obviously offers much more to consumers than walking into a store and browsing
products. At The American Girl Place customers go to get the full experience of cherishing an
American Girl doll and enjoying a mother-daughter day. In turn they spend hundreds of dollars
in the process on experiences and memorabilia of those experiences (Gilmore and Pine, 2002).
Other examples of experiential retailing include Recreational Equipment Inc.‟s (REI)
flagship venue store where customers can pay to climb a mountain wall or utilize the bicycle
track or walking trails. Gilmore and Pine (2002) define flagship venues as one or more main
locations in which more activities or experiences are offered to customers than the average basic
retail store. REI‟s flagship venue in Seattle, Washington has come to be known as a tourist
attraction because of the experiences it offers aside from its normal product offerings. Other
brands which have developed flagship venues include Nike (Niketown), Heineken (Heineken
Experience in Amsterdam), and General Mills (Cereal Adventure at the Mall of American)
(Gilmore and Pine, 2002).
Gilmore and Pine (2002) lay out a structure, called the Location Hierarchy Model, for
businesses to follow for developing successful experiential retail outlets, or what they refer to as
customer experience places. The guidelines are as follows: establish a flagship venue, steal the
resources from traditional marketing, use your creative team for R & D, and follow the location
15
hierarchy model to determine the most beneficial place for marketing experiences.
In the
Location Hierarchy Model, five levels are identified for physical locations and five levels are
identified for virtual locations, which mirror the five physical levels.
It is emphasized that is
important to create a portfolio of experiences around a brand instead of just relying on one.
Virtual brand places open up a whole new market to the concept of experiential marketing,
which can either supplement a physical experience, or stand alone as a unique experience.
II.1.5. Virtual Brand Environments
In a postmodern society and a high tech digital environment, it is impractical to overlook
the virtual component of experiential marketing (Simmons, 2008). Through the World Wide
Web, many organizations have created virtual brand places through websites or other social
networking media outlets, such as Facebook and MySpace.
But as mentioned before,
experiential marketing is more than just providing information and same concepts apply to
virtual experiences.
These websites, or virtual brand places, must involve the actions and
emotions of the participating visitor through memorable interactions in order to be defined as
using experiential marketing. Integrating digital and experiential techniques to create virtual
brand environments can be very beneficial. “For example, through posting photography on a
micro site or offering the opportunity to win tickets online” a physical or live experience is
extended past the experience alone, drawing a consumer into the website to experience the brand
virtually (Wilkerson, 2009).
Vans, an American-based manufacturer of skating gear, particularly shoes and apparel,
successfully utilizes the World Wide Web as a way to integrate virtual experiences with physical
ones by streaming videos from its skate parks. Vans Skateparks are skate ramps and obstacles
16
located in public spaces like malls. Videos from Vans Skateparks are streamed on the Vans
website so the audience that cannot be physically present can still participate and enjoy and view
the action taking place. In this case, the videos are used as a “pre-show” to get customers
interested in what is going on at the skate parks, creating anticipation and encouraging them to
try out the live experience (Gilmore and Pine, 2002). Vans also uses its website to facilitate
“post-show” experiences by “document[ing] every one of its Warped Tour stops online,
complete with artist list and a gallery of photos” (Gilmore and Pine, 2002, pg. 9). This keeps its
customers engaged even after the experience at the live event, sponsored by Vans, enhancing the
feelings and emotions acquired to be more memorable and unique for the customer.
As seen from the Vans example, using digital technologies to create a customer
experience can facilitate measurement of consumer activity, while also being useful in the pre
consumption and post consumption phases (Hein, 2007; Wilkerson, 2009). While a physical
brand environment may catch a consumer‟s attention and engage them with the brand, the
following digital experience can continue to build and deepen the relationship (Hein, 2007).
Apple, BMW, and Sony are examples of companies which have utilized their websites as a place
to create an experience. These companies use online training modules and courses to engage the
customer pre and post purchase (Cleaver, 2006). However, in pre and post purchase situations, it
is important to note that the experience must stay relevant, and keep in line with the experiential
marketing fundamental characteristics of engaging, memorable, and unique (Wilkerson, 2009).
II.2. The Customer Experience Creation Process
In order to generate the most desired outcomes (i.e. product purchase, brand loyalty)
using experiential marketing, it must be implemented into every phase of consumption. Unlike
17
traditional marketing, experiential marketing “is focused more on the customers‟ experience
creation processes, including pre-purchase, moment-of-truth, and post-purchase (Schmitt, 1999;
Yuan and Wu, 2008, pg. 388). Creating an experience must be all encompassing, providing
value throughout the service delivery by considering each moment of truth and each interaction
proceeding and following that moment of truth (Leighton, 2007).
II.2.1. The Goal: Deliver Experiential Value
First and foremost, consumption of a product must provide a customer with some type of
value, whether it is emotional, rational, functional, economical, social, conditional, etc. The
value provided by an experience has been coined the term experiential value. Experiential value
offers both extrinsic and intrinsic benefits (Mathwick, Malhotra, and Rigdon, 2001).
Yuan and Wu (2008) have identified the two most important factors of experiential value
to be emotional value and functional value. Since research on experiential value is limited, Yuan
and Wu (2008) base their statements off of literature on customer value, with emotional and
functional value being the two most important factors of customer value. Chou (2009) mentions
that both logical and emotional aspects of the customer must be considered when delivering
experiential marketing. Functional value is “a basic value delivered to customers” offering
extrinsic benefits (Yuan and Wu, 2008, pg. 392). Emotional value “refers to the feeling or
emotional reaction that customers gain during and after experience” offering intrinsic benefits
and delivered through experiential marketing (Yuan and Wu, 2008, pg. 392). Research done by
Roig, Garcia, Tena, and Monzonis (2006) also show functional and emotional value as the most
noted components of perceived value. Sandstrom, Edvardsson, Kristensson, and Magnusson
(2008) mention that the best way to create value is to provide emotional and functional value.
18
II.2.2. Pre-Consumption and Purchase Intentions
“Research undertaken by SRI, an international market research organization, found that
experiential marketing drove faster results than traditional methods, with consumers suggesting it
led to quick positive purchase decisions” (Williams, 2006, pg. 486).
The first step of developing a successful brand is building brand awareness. Building
brand awareness takes place after creating a brand that is comprised of valuable and unique
attributes targeted towards a particular group of consumers of which marketers must make that
group aware of the product‟s existence (Ponsonby-McCabe and Boyle, 2006). Firms typically
build brand awareness through activities including advertising, sales promotions, and public
relations (Ponsonby-McCabe and Boyle, 2006).
Experiential marketing can be especially
beneficial when incorporated into these activities which take place during the pre-consumption
phase because it engages the consumer and gets them emotionally interested in the product more
so than traditional marketing. It is the customer‟s initial interaction with the brand from which
they will base future behavioral decisions on. For example, tourist attractions such as theme
parks and museums use interactive games and activities on a website to get the consumer excited
and anxious about the experience.
At these attractions, such as The London Eye, the experience
begins pre-visit, when a visitor accesses a website to gather information and learn more about the
experience (Leighton, 2007).
When these pre-visits are designed to involve visitor interaction
and utilize virtual experiential marketing, the e-servicescape (an online environment of a service
delivery) is able to gain trust and motivate the potential consumer, ultimately affecting purchase
intentions (Harris and Goode, 2007).
19
II.2.3. Moment of Truth, Quality of Experience, and Satisfaction
“Customers in the hotel industry are concerned with whether their experiences have a unique
character and are personalized, homely, of quality, and value-added....The emotional and
experiential attributes are thought to be associated with quality of experience, which measures
hotel guests‟ perceptions of the extent to which their socio-psychological needs have been
fulfilled” (Xu and Chan, 2009, pg. 179).
The most important phase of an experience is during consumption, when a customer has
the most direct contact with a brand. Customers are generally more trusting of direct experiences
rather than indirect experience received from possibly biased parties (Xu and Chan, 2009).
Consequently, the key moment of truth is during the actual service consumption when the
consumer is receiving the core service offering. For instance in a restaurant setting customers
primarily base their satisfaction or dissatisfaction on the service received during the meal instead
of actions that took place before the meal (choosing a restaurant, viewing the restaurant‟s
website, arriving at the restaurant) and after the meal (follow up service such as filling out a
survey or receiving emails). It is at this point during consumption of the core service that the
consumer is most likely to either be satisfied (expectations are met or succeeded) or unsatisfied
(expectations are not met), depending on the quality of the experience (Yuan and Wu, 2008).
Direct experience with a product primarily takes place during consumption and the
quality of that experience is mainly evaluated based on service performance (Xu and Chan,
2009). Service performance, described as consisting of “three primary dimensions includ[ing]
interaction between service providers and consumers, the physical environment, and outcomes”
is the major determinant of quality of experience” (Xu and Chan, 2009, pg. 181). Therefore, it
can be stated that service performance delivered during the physical consumption of a product, is
20
an integral component of service consumption in which experiential marketing can be
implemented. Hotel guests in particular access their satisfaction on “emotional and experiential
attributes…associated with quality of experience, which measures hotel guests‟ perceptions of
the extent to which their socio-psychological needs have been fulfilled” (Xu and Chan, 2009, pg.
179). Xu and Chan (2009) suggest a theory that “service performance functions as an important
way of imparting Quality of Experience, or experiential brand image of hotel guests” (pg. 182).
This theory supports the importance of delivering a high quality experience during consumption
of the core service in order to differentiate a brand and to create value and satisfaction, which
aside from creating a unique experience, can be greatly enhanced through experiential marketing.
II.2.4. Post-Consumption and Brand Loyalty
“Experiential marketing is increasing in value and thus a growing method of promotion used by
companies to reach customers, according to a study released in early March by event marketing
firm TBA Global…..The survey found that experiential marketing is the most effective way for
companies to develop a bond with customers” (Study Shows Value, 2007).
The final phase of consumption takes place post purchase in which consumers can reflect
on their experiences.
Three aspects of the post-consumption experience include product
evaluation, product-elicited affect, and product satisfaction or more simply stated evaluations,
feelings, and satisfaction (Mano, 1993). With each of these aspects being affected by postconsumption experiences, it is important that firms establish a system providing meaning and
value to a customer by extending the brand beyond the core offering (Mano, 1993; Wilkerson,
2009). Achieving loyalty is a crucial goal of branding and also a major post consumption effect
(Bigne, Matilla, and Andres, 2005; Ponsonby-McCabe and Boyle, 2006).
21
Brand loyalty, the final stage in the brand building process, is when a consumer
establishes that he/she is completely satisfied and will continue to only purchase a particular
brand and not purchase from the competitors of that brand (Ponsonby-McCabe and Boyle, 2006).
It is after actual consumption in which a customer decides how satisfied they are with their
experience and whether or not they want to be loyal to the brand by making repeat purchases and
spreading positive word of mouth, or instead move on to another brand with different offerings.
Ponsonby-McCabe and Boyle (2006) state that brand loyalty “will only occur if consumers‟
consumption experience of the item offer them apparently unique value” (pg. 179). This concept
emphasizes the extent to which a consumption experience, particularly moments of truth and
post-consumption, has an effect on brand loyalty.
Post consumption efforts such as follow up emails and social media conversations are
ways in which a company can extend an experience after the service has been consumed. In an
experiential marketing campaign “it is vital to cultivate follow-up activity that keeps consumers
engaged with the brand” and to “maintain the momentum” (Wilkerson, 2009, pg.40). The Ben &
Jerry‟s premium ice cream brand offers customers incentives post-purchase consisting of a free
ice cream voucher to visit the website and promote loyalty measures (Wilkerson, 2009).
Guinness‟ Witnness music event is a prime example of how post-consumption efforts can
maintain the momentum of the core experience. Guinness created a website as an additional
form of experiential marketing used to extend the Witnness brand beyond the experience of the
actual festival. The website allows attendees of the event to post and view photos, send e-cards,
and post messages to create and share their memories with others. The posting of messages also
allows for Guinness and Witnness to receive qualitative feedback about the event (Moor, 2003).
Follow-up activity performed during post-consumption can provide relevant information
22
concerning customer data, allowing firms to evaluate a campaign and providing insight into
future endeavors, as well as actively enforcing long term customer relationships, or in other
words, recruiting and maintaining loyal customers (Wilkerson, 2009).
II.3. Tourism Marketing: Marketing Experiences vs. Experiential Marketing
II.3.1. Marketing a Total Experience
Marketing in every industry presents similar goals that are accompanied by unique and
challenging obstacles; which customers to target, how to market the product, what differentiates
the brand, etc. The tourism, lodging, and hospitality industries constantly face these decisions.
Tourism marketing aims to promote a destination, whether it is a location, resort, hotel, cruise, or
a vacation package, by selling an image of a place and an experience that goes along with it by
personally relating it to customers (Williams, 2006). Over the years, tourism marketing has
become more complex because “it is no longer concerned simply with representing or conveying
an image of a place, but with attempting to sell an experience of a place by explicitly relating to
the lifestyles of consumers” (Hannam, 2004, p. 256).
The unique concept about tourism and hospitality marketing is that the product is purely
experiential. Yet marketers are still using traditional methods to promote the product (Williams,
2006).
As mentioned earlier, when promoting a product offering an emotional experience to
consumers, it can be very beneficial to incorporate an actual experience into the marketing
strategy. Hotel marketers must then face tough questions regarding what, when, and how to
utilize experiential marketing in each consumption phase to make promotional efforts interactive
23
instead of just simply advertising and providing an experience at some point during the
customer‟s consumption process (Williams, 2006).
II.3.2. Offering Experiences
It is a tendency for tourism firms to offer experiences and the opportunity for customers
to create memories through these offered experiences, and less of a tendency for tourism firms to
market those offerings through an experiential method (Williams, 2006).
Williams (2006)
explains the current connection between experiential marketing and tourism marketing in the
following statement:
It is clear that the fact that their product is almost always experiential puts tourism and
hospitality marketers in a unique position to apply the principles of experiential
marketing to their activities.
The problem is that simply having an intrinsically,
inherently experiential offering is very different from actively and deliberately marketing
that offer in an experiential manner (p. 487).
It is important to first explain what types of experiences the tourism sector offers to
customers. Williams (2006) introduces four dimensions of the tourism and hospitality experience
as related to Gilmore and Pine‟s aforementioned four realms of experience: entertainment,
educational, esthetic, and escapist. Figure 1 depicts these dimensions on two axes, passive/active
participation and absorption/immersion, followed by Table 1 explaining the graph.
The sweet spot in Figure 1 symbolizes where the four realms meet and where consumers
are exposed to all four kinds of experiences. The most affective and successful experiences
incorporate each realm, as seen through the example of Disney World, which pays discrete
attention to employees, environment, operations, and customers in order to emphasize the
24
Figure 1. Dimensions of the Tourism and Hospitality Experience
Source: Williams (2006)
Table 1. Realms of Experience in the Tourism and Hospitality Industry
Realm
Experience Explanation
Relation to Tourism and Hospitality
Entertainment
Customers participate in a passive
Provide customers entertainment
(sensing)
manner, absorbing the experience, i.e. opportunities outside the immediate
going to a show
experience, i.e. show performances
(such as on a cruise)
Education
(learning)
Customers more actively involved,
but not completely immersed, i.e.
acquiring new skills or increasing
existing ones; ski instruction
Increase educational element through
informal lectures, guides, background
information. i.e. cruise ships offer
lectures about itineraries, resorts
encourage engagement with local
culture
Esthetic
(being there)
Customers more passive, do not
influence environment, yet still
immersed in the experience, i.e.
enjoying a view from a cliff, or an art
exhibit
Involves a more intense experience
than entertainment with little active
participation and more immersion, art
exhibits in a lobby at a resort,
excursion to enjoy a view from a cliff
Escapist
(doing)
Customers actively participate and
are completely immersed in
experience, i.e. bungee jumping, act
in a show
Offering participation in sports
activities or membership of
organizations to create new identities,
i.e. water sports and golfing at
resorts, spas, volunteer organizations
Source: Adapted from Williams (2006)
25
experience (Williams, 2006). Achieving a sweet spot is the ultimate goal of most tourism
marketing.
Integrating all four kinds of experiences relies highly on how a firm chooses to
differentiate its brand. Different kinds of experiences determine different kinds of customer
experiential value and perceptions, effecting customer satisfaction and ultimately customer
loyalty and positive word of mouth (Yuan and Wu, 2008). For hotels, there are many different
levels and types of services which can be offered in order to meet the needs of the
target customers.
Brands like The Ritz-Carlton, JW Marriott, and The Westin, are all brands
associated with high quality and exceptional levels of service. In order to establish these brand
images, marketers must establish brand equity, the worth or value of a brand as seen from a
business perspective as well as a consumer perspective and consisting of tangible and intangible
elements such as financial value, brand image and reputation, and brand loyalty. In the tourism
and hotel sector brand equity is mainly based on consumer experiences (Xu and Chan, 2009).
II.3.3. Creating Hotel Experiences to Build Brand Value
Communicating the experience offering is highly important in tourism marketing,
considering that in the hospitality and tourism industry an intangible experience is the core
product or service being delivered (Yuan and Wu, 2008). Of course these businesses, consisting
of hotels, cruise ships, and resorts, all offer rooms to stay in, restaurants and bars to eat at, pools
and scenery to enjoy, but all of these amenities and service build on the total experience, which
is what the customer takes away with them and remembers after their contact with the brand is
over (Yuan and Wu, 2008).
26
Xu and Chan (2009) argue that advertising, word of mouth (WoM), and service
performance are “the most important antecedents of the development of brand equity in the hotel
industry” (p. 175). Each of these techniques must promote the experience offered to customers,
where “advertising and WoM contribute to brand equity by providing indirect experiences to
customers, whereas service performance creates direct experiences” (Xu and Chan, 2009, p.
175). Service performance can therefore be considered the most influential factor in establishing
customer satisfaction and brand loyalty, because it creates a customer‟s direct experience and
determines quality of experience, and it can be implied that a customer‟s direct experience with a
product will always succeed over indirect experiences. Therefore it is important that tourism
marketers extend the direct experience beyond the initial vacation period time, allowing the
customers to interact with the hotel brand before they have left for their vacation and after they
have returned home, or otherwise stated, throughout the customer experience creation process.
27
CHAPTER III. APPLICATION TO MARRIOTT INTERNATIONAL, INC.
III.1. General Description of Marriott International, Inc.
Marriott International, Inc. (Marriott; the company) is a global hospitality company with
operations present in 68 countries and territories. It operates and franchises 3, 420 properties
consisting of hotels and other lodging facilities offering full service and extended stay
accommodations.
Headquartered in Bethesda, Maryland, Marriott primarily operates in
Americas, Europe, Africa, and Asia-Pacific (Datamonitor, 2010). Marriott is known for its
strong brand, consumer preference, and award-winning guest loyalty program, Marriott Rewards.
Marriott has been recognized by FORTUNE on its list of 100 Best Companies to Work for and as
one of America‟s Most Admired Companies (Marriott Annual Report, 2009).
Marriott‟s brand portfolio consists of 18 unique brands ranging across a wide array of
customer segments. Marriott prides itself on consistently providing high quality service in all
areas of operations while valuing the worth of employees and always seeking to satisfy
customers (Marriott Annual Report, 2009). Over the past decade Marriott has reinvented itself
from a property focused company to a customer focused company by introducing innovative
brands to attract new customers, redesigning old brands to better appeal to existing customers,
and by always striving to improve the experience of each and every customer. The company has
also grown by enhancing information technology features and expanding into emerging markets
such as China and India (Datamonitor, 2010; Marriott Annual Report, 2009).
The succeeding
SWOT analysis goes into greater detail on the current state of the company based on internal
strengths and weaknesses along with external opportunities and threats.
III.1.1. SWOT Analysis
In this section, an analysis of Marriott‟s strengths, weaknesses, opportunities, and threats
are presented. They are summarized in Table 2, as well as further discussed in each subsection.
Strengths
Technical innovations to ease the business process and increase hassle-free experience for the
customers
Marriott has developed several technical innovations in order to increase customer
usability and enhance business processes. Marriott‟s Automated Reservation System for Hotel
Accommodations (MARSHA) is one of the creations which keep a database of all customers to
easily access information.
This reservation system gives Marriott a competitive advantage
because it is strictly developed and used by Marriott and gives personalized attention to each
customer (Datamonitor, 2010).
Marriott also developed a tool to better regulate the pricing system which continually
audits and monitors shifting rates. The tool Property Guest Object Oriented System (PGOOS)
automates the process and always ensures negotiated rates are at or below published rates. This
gives Marriott a competitive advantage because customers are assured of better rates at Marriott
that coincide with the market situation. MARSHA and PGOOS are two efforts in which Marriott
has focused on technologies to make a customer‟s experience better, distinguishing Marriott
from its competitors (Datamonitor, 2010).
29
Table 2. SWOT Analysis
Strengths
Weaknesses
Technical innovations to ease the business
Business model which has the potential to
process and increase hassle-free experience
dilute the brand perception and limit the
for the customers
revenue growth
Higher brand recognition and recall makes
High leverage combined with downgrade
the company priority choice for clients
in rating will affect the future capital
generation and expansion projects
Global presence and strong brand portfolio
diversifies the revenue sources
Weak financial performance affecting the
company‟s expansion plans
Opportunities
Strong growth in the hotel and motel
industry in emerging markets
Improving hospitality market in the US
Brand innovations to suit the changing
customer preferences
Threats
Vulnerability to terrorist attacks raises
security and safety concerns
Timeshare business vulnerable in a dismal
capital and credit market
Fragmented and intensely competitive
lodging industry
Source: Datamonitor, 2010
Higher brand recognition and recall makes the company priority choice for clients
Because of its strong brand portfolio and high brand recognition, Marriott has become
one of the leading companies in its industry. Marriott has brands encompassing most customer
segments, present in most major markets. Luxury brands include Marriott Hotels & Resorts, JW
Marriott Hotels & Resorts, The Ritz-Carlton, Bulgari Hotels & Resorts, and Grand Residences.
Mid-priced brands include Courtyard and Fairfield Inn. Marriott also has a strong presence at
the corporate level with the company ranking on Fortune‟s 2009 list of World‟s Most Admired
Companies, being number one for ten consecutive years, with the rankings established by
Executives, Directors, and Analysts of numerous companies (Datamonitor, 2010).
Two Marriot brands, Ritz-Carlton Hotel and Spring Hill Suites, received recognition by
receiving the best scores in the segment for The J.D. Power and Associate‟s recent North
American Hotel Guest Satisfaction Index Study. Renaissance Hotels & Resorts, Courtyard, and
30
Residence Inn all placed second in their segments.
It is obvious that Marriott‟s brand
recognition and recall and customer satisfaction has made Marriott a popular choice among its
competitors (Datamonitor, 2010).
Global presence and strong brand portfolio diversifies the revenue sources
Marriott operates all over the world with approximately 43% of earnings before interest
and tax coming from international operations. This allows the company to diversify its portfolio
and not rely solely on one market for its revenue. Its presence in mature and
emerging markets helps to achieve value growth and volume growth, while also protecting from
potential risks related to a particular economy (Datamonitor, 2010).
Marriott‟s diverse customer base also contributes to its diverse brand portfolio. Marriott
has operations in four price segments: luxury (Ritz-Carlton, JW Marriott, and Bulgari Brands),
upper moderate (Marriott, Renaissance, Springhill Suites, and Courtyard), moderate, and lower
moderate (Fairfield Inn).
TownePlace, Marriott Vacation Club, and Grand Residences are
additional brands which compete in executive and long term stay segments.
These hotel brands
have helped Marriott to become one of the most respected and known brands in its industry
while adding to the Marriott brand value and diversified customer base (Datamonitor, 2010).
Weaknesses
Business model which has the potential to dilute the brand perception and limit the revenue
growth
Marriott‟s business model allows them to manage and franchise hotels rather than own
them. 46% of hotels are operated under management agreements, 52% under franchise
31
agreements, and 2% owned or leased (Datamontitor, 2010).
While this strategy “tends to
provide more stable earnings in periods of economic softness, [it] does not provide much scope
for revenue growth” (Datamonitor, 2010, pg. 7). This makes generated revenues dependent on
the economy, as seen in the recent economy drop when revenues generated from incentive fess
decreased by 50%. Franchise and management agreements further dilute the brand equity and
value because the operations are passed on to a third party which may not always deliver the
same level of quality associated with Marriott, which could possibly hinder the company‟s
reputation (Datamonitor, 2010).
High leverage combined with downgrade in rating will affect the future capital generation
and expansion projects
Marriott‟s profit generation is hampered by the high leverage situation due to the capital
intensive lodging industry. Marriott‟s long tern debt to equity ratio in percentage terms is
291.96% compared to the industry standard of 56.07%. This high debt leverage could hurt the
profit generation capacity of the company. Along with the high possibility of rising interest
rates, the interest expense is bound to increase, and will ultimately affect profit margins
(Datamonitor, 2010).
In 2009, Marriott‟s credit rating was downgraded from BBB to BBB- according to
Standard & Poor‟s Ratings Service (S&P) standards. This downgrade can mainly be attributed
to the decline of the lodging industry and the expectations of recovery (Datamonitor, 2010).
Although, recovery efforts have been put into place and started to help the industry, the
downgrade remains since recovery is still in its initial stages, making it “difficult and expensive
for Marriott to access the credit market” (Datamonitor, 2010, pg. 8).
32
Weak financial performance affecting the company‟s expansion plans
The slowdown in the economy and in the lodging industry has resulted in weak financial
performance for Marriott.
The company‟s revenue has declined and it has had to report
operating and net losses for the fiscal year 2009, after following declining revenues and profit in
fiscal year 2008. Profit margins have also dropped, affecting the net profit of the company
(Datamonitor, 2010). This can be attributed to the “adverse business environment” which could
also “hamper the company‟s growth and expansion plans to tap the new and growing markets”
since the weak financial performance has caused the company‟s capital expenditure outlay to be
greatly reduced (Datamonitor, 2010, pg. 8).
Opportunities
Strong growth in the hotel and motel industry in emerging markets
Aside from the poor economy and slowdowns in Americas and parts of Europe, there has
been remarkable growth in the global lodging industry in emerging markets such as China and
India. Factors such as GDP growth, economic prosperity, and a rise in disposable income have
caused the lodging market in these countries to grow significantly. More business persons are
traveling to these countries along with more leisure travelers visiting and traveling within the
countries.
The Indian hotels and motels industry grew by 17.1% over the previous year alone
and is expected to increase by 80.5% between the years 2008 and 2013. The Chinese hotels and
motels industry has grown by 16.8% over the previous year and expected to grow by 11% over a
five year period between 2008 and 2013. Marriott is operating 47 properties under franchise and
management agreements in China with plans to expand in the market.
Marriott has also
increased its property base in India, with 9 operating properties. Expansion in these markets will
33
further increase brand recognition and allow Marriott to compete with local brands as well as
other international lodging companies (Datamonitor, 2010).
Improving hospitality market in the US
The lodging industry is highly affected by the state of the economy. When the economy
drops, people and businesses cut spending on leisure activities and travel expenses. Over the
past year, the North American market as well as the lodging industry in general has started to
recover from the recent decline of the economy. Occupancy rates and revenue per available
room have increased and risen from the previous year. The luxury segment has seen the most
improvement in occupancy rates and daily rates, allowing Marriott to benefit from its volume
and brand value after the impact of the recession in the North American economy (Datamonitor,
2010).
Brand innovations to suit the changing customer preferences
Marriott is constantly expanding its brand portfolio by launching new brands and
renovating old ones.
Autograph Collection and Edition Hotels are two new brands being
launched to attract a new segment of customers. The company is also investing in the renovation
of old brands such as JW Marriott Washington, Renaissance Amsterdam, and multiple Miami
properties. Along with innovating designs, features, and styles of brands, Marriott is working on
introducing green hotels into its portfolio. A green hotel prototype is planned to be introduced
over the next five years to save approximately $100,000 and reduce energy and water
consumption by up to 25%.
These changes have been planned to meet the changing needs of
34
business travelers and leisure travelers, keeping offerings contemporary and up-to-date to better
appeal to customers and attract repeat customers (Datamonitor, 2010).
Threats
Vulnerability to terrorist attacks raises security and safety concerns
After the terrorist attacks of September 11, 2001, the threat of attacks has increased for
the lodging industry.
With Marriott being “a symbol of American luxury and power” the
company‟s properties are a prime target facing terrorist attacks, especially after suffering attacks
in the past (Datamonitor, 2010, pg. 11). Marriott brand hotels in Indonesia and Pakistan have
experienced deadly attacks and show how vulnerable hospitality companies can be to terrorist
attacks. As a result of terrorist attacks, customers become concerned about security measures,
instilling doubt and fear in customers and possibly hurting the reputation of Marriott
(Datamonitor, 2010).
Timeshare business vulnerable in a dismal capital and credit market
The troubles brought forth in financial and credit markets due to the poor economy are
still affecting the timeshare business segment. The timeshare segment specializes in marketing
and selling residential properties, financing consumer purchases, and operating resorts. The
recession of the US economy has impaired timing and volume of available timeshare loans as
well as higher interest rates. Marriott‟s weak financial performance along with its downgraded
S&P rating and turbulent financial market impacts the timeshare business segment by increasing
the cost of financing (Datamonitor, 2010).
35
Fragmented and intensely competitive lodging industry
Numerous key players such as Hilton Hotels, Best Western, and Starwood Hotels &
Resorts offer intense competition in the US lodging market. Hotels such as these have a strong
established base and brand presence in the US market. No one player commands more than 20%
of the market share, making the lodging industry highly fragmented, with Marriott holding a 9%
share of the US market and a 1% share of the market outside the US (Datamonitor, 2010). This
competition results in “high demand for property space causing the increase in real asset prices,”
fueling of price wars, and low market penetration opportunities for Marriott brands
(Datamontitor, 2010, pg. 11).
III.2. Experiential Marketing in Marriott: Incorporating Experiential Marketing into Tourism
Marketing
Following evolving marketing trends, hotels have begun to utilize experiential marketing
techniques in operational aspects as well as promotional aspects. As seen from Table 1, there are
many opportunities for the tourism sector to market experiential offerings, but as Williams
(2006) mentions, the challenge is how to do this through an experiential manner in order to keep
up with the evolving marketing trends. Yuan and Wu (2008) state that “in the hospitality and
tourism industry, from providers‟ points of view, products and services [are used] to create a
stage for customers (experiential marketing)” (p. 391).
This type of experiential marketing is
solely based on experience offerings. Hospitality businesses provide an opportunity to acquire
experiences but how are they using the experiences to actually market and promote the
offerings?
36
It can be argued that these experiences that offer value and memories are an indirect way
to utilize experiential marketing techniques because when customers are satisfied with their
direct experiences, then they will voice their satisfaction to family and friends through positive
word of mouth.
Starbucks is an international company that employs these strategies of
marketing the experiences offered and in return the company spends little money on advertising
and markets its brand by relying on positive word of mouth and publicity. It has been said that
through marketing its distinct culture and unique experience, Starbucks has “focused its
marketing strategy on applying the concepts of experiential marketing,” offering more emotional
benefits and less rational features (Yuan & Wu, 2008, p. 397).
This is just one way in which firms can implement experiential marketing into its
operations, and one way in which companies in the tourist and lodging industries practice
experiential marketing. Currently, as briefly discussed earlier, hotels market themselves by
promoting a unique and memorable experience, much like Starbucks does. Only recently has the
concept started to expand into more interactive efforts to fit the definition of experiential
marketing. Hotels are using experiential marketing virtually during the pre-purchase phase of
consumption through interactive websites. During consumption, hotels are developing ways to
get customers involved, such as offering lessons or interactive programs pertaining to the local
cultures, and/or offering organized excursions off-site.
During the post- consumption phase,
hotels utilize virtual experiential marketing by asking customers to share stories and photos
online to communicate with the company as well as with other customers. These are just a few
ways in which hotels have begun to take on the vast opportunities experiential marketing can
provide.
Marriott, being one of the leading hotels and lodging companies in the US and
internationally, is a forerunner in the industry when it comes to implementing elements like these
37
into everyday marketing practice. Many of its operations offer experiential opportunities while
also utilizing experiential marketing campaigns and virtual experiential platforms.
III.2.1. Experiential Offerings
Marriott Vacation Resorts:
Like most other companies in the tourist and lodging
industries, Marriott provides numerous experiential offerings.
Marriott‟s Resort & Spa
destinations certainly do not fall short in the category of experiential offerings. On its website,
www.marriott.com, the hotel company claims that its resorts “offer you the world.”
This
statement holds true considering Marriott resorts are located all over the world, offering unique
experiences at each and every location. Guests have numerous options to choose from, first
consisting of what type of experience they want: a place where they can soak up the sun on a
gorgeous beach, enjoy a relaxing vacation on an outstanding golf course, visit a paradise in the
desert, or enjoy a ski resort offering beautiful landscapes and challenging slopes. Once at the
resort guests are offered more opportunities to enhance their experiences. Depending on the
resort, guests can enjoy a show performed by cultured locals, take part in exciting water
activities, view an art gallery display, relax at a spa, etc. (Marriott International, Inc., 2010). The
experiential offerings described here, which only touch the surface of what is offered, allow for
Marriott consumers to take away memories with them once their visit is over. If the interactions
are delivered successfully, customers associate the Marriott brand with their memorable
experiences and will be tempted to refer friends and visit again.
Escape!® Packages: On Marriott‟s website, customers can search for a vacation package
that offers more than just a room to stay at. Escape!® Packages allow customers to book
vacations that come along with additional experiences based on what type of package they want:
38
family, golf, romance, local, spa, dining. These options give guests the opportunity to take part
in organized activities that are included in their daily rate (Marriott International, Inc., 2010).
This feature takes the pressure of planning off of the customer allowing for a more enjoyable
experience.
III.2.2. Experiential Marketing Campaigns
Marriott Resorts Hawaii Bus Tour: In 2009 Marriott launched a campaign in Hawaii and
Japan that centered around a promotional tour involving a traveling bus. The idea was that the
eye catching bus would travel around to different cities with Marriott general managers and
salespersons onboard to promote Marriott Hawaii Resorts to travel partners, groups, and the
media. Local Hawaiian performers provided entertainment while the bus was stopped and
Marriott leaders met with potential clients. The tour also offered free vacation giveaways at
certain locations. The tour in Hawaii and Japan was so successful that is was expanded to eleven
U.S. cities in 2010 to encourage visits to the Hawaiian Islands (Marriott International, Inc.,
2010). This campaign brought the Marriott brand directly to consumers, exposing them to the
Marriott Hawaii brand which they otherwise might not have known about. This experiential
marketing campaign allows them to interact with employees and the brand and to take away the
experience and memories of seeing the local culture performances.
Eco-Awareness Contest: Marriott occasionally offers opportunities for consumers to take
part in a contest to win a vacation package. Contests are a form of experiential marketing
because they get customers involved and interacting with a brand outside of the consumption
experience.
Marriott‟s Eco-Awareness Contest consisted of Marriott customers having the
opportunity to win a vacation to Costa Rica, titled an „Eco-cation.‟ They enter the contest by
39
submitting a video showcasing their efforts to help clean up the world and make it a more
environmentally friendly place (Reed Business Information, 2010). This contest got customers
involved with the Marriott brand along with a good cause and also showed Marriott‟s
participation of activities taking place during Environmental Awareness Month.
III.2.3. Virtual Experiential Platforms
Innovative Website: To keep up in today‟s economy and society, it was obvious that
Marriott had to make improvements to its website in order to be more customer-friendly and
usable.
Marriott teamed up with Accenture to advance its website into an innovative and
business generating platform (Accenture, 2007). The new website doubled sales and greatly
improved the company‟s capabilities. Because of Marriott‟s global and international presence it
was decided that the website would provide 16 global sites, each presented in the local language
and geared specifically towards travelers in the 16 specific regions, providing “a direct and easy
way for guests to interact with Marriott and make the most of their stay at a Marriott Property”
(Accenture, 2007, pg. 3). The new platform has allowed for more complex features such as
virtual tours and 360 degree photos so that customers can actively visualize and preview the
hotel.
The new interactive website is a form of virtual experiential marketing, providing a place
for customers to interact and learn more about the Marriott brand. The innovative website has
proudly been described as “Marriott‟s fastest-growing customer interaction channel [which]
extends the guest experience, reinforces the corporate brand and serves as a critical enabler of
both the company‟s business goals and its strategic marketing capabilities” (Accenture, 2007, pg.
40
3). This is a prime example of how virtual experiential marketing can benefit a global company
and take it to the next level of success.
Explore & Plan: With Marriott‟s new innovative website, many new innovative features
have also been developed. Part of the company‟s website features a section where customers can
go to search and plan for their perfect vacation using multiple features based on destinations, a
hotel directory, new hotels, resorts, spa destinations, golf destinations, deals, and car and
vacation packages. Within these categories, users can access information about dining, nightlife,
entertainment, and city guides. The planning feature of this part of Marriott‟s website guides a
customer in planning their vacation based on desires such as what type of vacation they are
planning while also allowing visitors to share past experiences, stories, and advice. These
website applications and its components allow consumers to emotionally engage in the creation
and planning process (Marriott International, Inc., 2010).
III.3. Proposal for Improvement in Marriott
Tourism is a distinct industry offering a unique product, which unlike most products, can
not be sampled prior to purchase (Hannam, 2004). A major experiential marketing technique is
setting up promotions through product launches, or rather getting potential customers familiar
with a product, or getting them to sample the product, so they become aware of the value it
provides through an emotional and memorable experience. This method usually takes place
before the customer is aware of the product or before they have ever purchased the product and
influences the customers‟ perception of the brand image and their behavior intentions, ultimately
affecting purchase decisions. It is difficult for businesses in the tourism industry to utilize this
41
major technique of experiential marketing since tourism purely markets an experience which
cannot be sampled (Hannam, 2004).
Williams (2006) describes the main point of experiential marketing as taking the value of
a product and increasing it through intangible, physical, and interactive experiences to assist
customers in making purchasing decisions (Yuan and Wu, 2008). With this main focus in mind,
the hotel industry has the opportunity to extend its experience offerings to pre-purchase phases,
in order to receive the satisfaction and loyalty benefits of experiential marketing. The challenge
in doing this is the obstacle of not being able to sample a hotel accommodation option (Hannam,
2004). One way in which hotel brands have been able to attempt to overcome this is to provide
virtual tours and/or 360 degree photos on websites so that customers can get a fairly accurate
idea of what the hotel rooms and facilities are like. While this may help, it still leaves room for
improvement since these website features are limited to only visuals and do not always
accurately depict dimensions and other factors such as atmosphere and feelings inspired by the
atmosphere and ambiance.
Holland America Line Inc., an international cruise line, offers consumers the opportunity
to preview its ships, room accommodations, dining halls, and activity facilities of each ship
through virtual tours and videos (Holland America Line, Inc., 2010).
These experiential
opportunities attempt to engage the customer in their purchase process and are a way for this
hospitality company to offer customers a chance to sample their purchase options before they
decide on their best choice. This is very similar to the way in which Marriott utilizes experiential
marketing techniques to appeal to customers and influence their purchase intentions. With these
technology intense features being a relatively recent development in tourism marketing, having
progressed through more competent and capable website interfaces, little research has been done
42
in regards to how hotel or tourism companies can benefit from utilizing experiential marketing in
the pre-purchase phase of consumption.
With virtual experiential marketing being the most
reasonable and realistic form in which to conduct experiential marketing in the pre-purchase
phase for hotel and hospitality companies, this concept should be further explored in order to
discover advantages and disadvantages as well as outcomes.
With its capabilities and strong brand image, Marriott should explore the benefits that
virtual experiential marketing could provide through the offering of unique and memorable
experiences. By evaluating current methods utilized on Marriott‟s website, the company will be
able to evaluate the techniques while possibly finding ways to enhance and improve virtual
experiential marketing and offerings. It is proposed that by using virtual tours and promotional
videos in the pre-consumption phase of service delivery, consumers respond positively to the
brand which positively affects their purchase intentions. This concept will be applied to
Marriott‟s virtual experiential marketing techniques in order to determine consumers‟ responses
to virtual tours and videos in regards to purchase intentions. By assessing components of
experiential marketing defined by Schmitt (2009) and their virtual use on Marriott‟s website, this
study will evaluate the outcome which virtual experiential marketing has on consumers‟
purchase intentions through perceived experiential value.
This study will also allow for the
comparison of two different types of virtual experiential marketing, one involving active
participation (interactive virtual tour) and the other involving passive participation (promotional
video) (Williams, 2006).
43
CHAPTER IV. PROPOSAL
IV.1. Objectives of Specific Proposal in Marriott
The main purpose of the current research is to further explore the concept of experiential
marketing and determine the effect that experiential marketing has on consumers‟ purchase
intentions through experiential value. The general objective of the study is to examine how
consumers respond to experiential marketing techniques offered through a company website and
ultimately offer suggestions on how the features can be improved to benefit the company. The
specific objectives are listed below.
Identify affective components of experiential marketing utilized on Marriott‟s website in
relation to virtual tours and promotional videos.
Determine the effectiveness that components of Marriott‟s virtual experiential marketing
(sense perception, feel perception, think perception, and act perception) have on experiential
value (emotional value and functional value) according to consumers.
Determine the effect that experiential value perceived through Marriott‟s virtual experiential
marketing has on a users‟ purchase intentions.
Determine whether consumers respond more positively to experiential marketing techniques
delivered through interactive portals (virtual tours) or through standard media sources
(promotional videos).
IV.2. Basis of Empirical Research
Based on the discussion of the literature review, experiential marketing has an affect on
perceived value and purchase intentions. This outcome tends to occur during the pre-
consumption phase of service delivery when the consumer is making purchase behavior
decisions. In the pre consumption phase experiential marketing induces experiential value which
induces purchase intentions. Variable definitions and measurements are listed in Table 3. The
basis for this study has been adapted from Yuan and Wu‟s (2008) research. In Yuan and Wu‟s
(2008) study it was proposed that experiential marketing induces positive experiential value and
positive customer satisfaction.
Yuan and Wu (2008) tested the relationships between experiential marketing (sense
perception, feel perception, think perception, service quality), experiential value (emotional
value and functional value) and customer satisfaction. From Yuan and Wu‟s (2008) tested
methodology, which was survey based and took place at four Starbucks in Taiwan, it was
concluded that sense perception did not induce positive emotional and functional value. Because
this study measures a different outcome and type of experiential marketing, sense perception will
be included as a concept of experiential marketing for this study. However because of the
parameters of this study service quality will not be tested. Experiential marketing is therefore
measured by sense perception, feel perception, think perception, and act perception; experiential
value is measured by emotional value and functional value. The definitions and measurements
of each item can be found in Table 3. These items will be evaluated in the pre-consumption
phase of the customer experience creation process to test the effect on purchase intentions.
IV.2.1. Schmitt‟s Strategic Experiential Modules
Schmitt (1999) defines five strategic experiential modules which managers can utilize to
create experiences for customers. These include sensory, affective, creative cognitive, physical
and behavioral, and social identity experiences. The five concepts are summarized in Table 4.
45
Table 3. Definition and Measurements of Each Concept
Construct
Definition
Sense Perception
Messages received
through visual,
auditory, smell, and
touch perceptions
Visual attention
Auditory attention
Aesthetic appeal
Consistency
Schmitt (1999), Yuan
& Wu (2008)
Feel Perception
Intrinsic messages
used to appeal to a
customer‟s emotions,
such as joy or care.
Emotional mood
Certain mood
Sincerity and care
Triggers inner
feelings
Schmitt (1999), Yuan
& Wu (2008)
Think Perception
Messages used to
encourage customers
think, become
curious, and engage
creativity
Thinking
Curiosity
Engaging
Intriguing
Schmitt (1999), Yuan
& Wu (2008), Pura
(2005)
Act Perception
Messages targeted
towards physical
experiences and the
customer‟s behavior a
lifestyles
Affects ordinary
behavior
New way of doing
things
Motivates and
inspires
Enriches lifestyle
Schmitt (1999), Yuan
& Wu (2008), Pura
(2005)
Emotional Value
Feelings or affective
states generated by a
product or service
Enjoyment
Good feeling
Ease, relaxation
Excitement
Comfortable
Pleasurable
Pura (2005), Roig et
al (2006), Moliner et
al (2007), Sanchez et
al (2006), Williams &
Soutar (2009)
Functional Value
Economic utility
derived from the
attributes of a product
or service and
effective task
fulfillment
An outcome
concerning customer
behavioral decisions
and thoughts on
whether to buy or
recommend a product
or service
Efficiency
Availability
Ease of use
Convenience
Quality
Pura (2005), Williams
& Soutar (2009),
Hsi-Jui-Wu & Liang
(2009), Keng et al
(2007)
Desire to visit
Desire to purchase
Intent of use
Intent to
recommend
Willingness to
purchase
Keng et al (2007),
Pura (2005), Sweeney
& Soutar (2001)
Purchase Intentions
Measurement
46
Reference
Sense Module
Table 4. Strategic Experiential Modules‟ Definitions
Appeals to the senses with the objective of creating sensory experiences
through sight, sound, touch, taste, and smell
Feel Module
Appeals to customers‟ inner feels and emotions with the objective of
creating affective experiences that range from mildly positive moods
linked to a brand to strong emotions of joy and pride
Think Module
Appeals to the intellect with the objective of creating cognitive,
problem-solving experiences that engage customers creatively
Act Module
Enriches customer‟s lives by targeting their physical experiences,
showing them alternative ways of doing things, alternative lifestyles and
interactions
Relate Module
Expands beyond the individual to appeal to the need to be positively
perceived by others and connected to a broader social group
Source: Schmitt, 1999
Based on the definitions in Table 4 and previous research, four of the five modules were
chosen to constitute the framework. The parameters of this research, which consisted of an
online survey, restricted the ability to test perceptions of the sense module because the sense
module is defined by reactions that a customer has to physical features of an experience which
are difficult to portray through an online survey. Therefore only visual and auditory measures of
the sense perception will be tested. It is also necessary to note that because of the parameters of
this research, the service quality construct used on Yuan and Wu‟s (2008) framework will not be
tested due to the fact that the survey is based on a virtual experience which does not constitute an
evaluation of service performance. The focus of this study is based off an individual level
experience making it difficult to measure the relate perception. Consequently, sense, feel, think,
and act were emphasized in this study to achieve research purposes and are the four concepts
being evaluated.
47
IV.2.2. Experiential Value
The measures of experiential value were taken from Yuan and Wu‟s (2008) study. Yuan
and Wu (2008) state that experiential value closely resembles customer value of which emotional
value and functional value are the most common and applicable elements when applied to
experiential marketing.
In addition, Table 5 summarizes prior researchers‟ dimensions of
customer perceived value indicating that emotional value and functional value are the most
prominent components.
IV.3. Hypotheses
IV.3.1. Experiential Marketing and Experiential Value
One of Schmitt‟s (1999) major characteristics of experiential marketing is that customers
should be viewed as rational and emotional beings. When making purchase decisions and
evaluating those decisions, consumers are emotionally driven as well as rationally driven.
Therefore, a consumption experience must provide emotional value as well as functional value.
Chou (2009) mentions that both logical/functional and emotional aspects of the customer‟s
experience must be considered when delivering experiential marketing. Based on Schmitt‟s
strategic experiential modules and previous research done by Yuan and Wu (2008) eight
hypotheses were developed to test the relationships between experiential marketing and
experiential value.
H1: Sense perception induces positive emotional value.
H2: Sense perception induces positive functional value.
H3: Feel perception induces positive emotional value.
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Table 5. Summary of Literature Findings on Multidimensional Perceived Value Measurements
Author
Dimensions
Sweeney and Soutar (2001)
Emotional value
Social value
Functional value
Mathwick, Malhorta, and Rigdon
Intrinsic value (emotional)
(2001)
Extrinsic value (functional)
Experiential value (CROI, excellent service,
aesthetics, escapism)
Pura (2005)
Monetary value (functional)
Convenience value (functional)
Social value
Emotional value
Conditional value
Roig, Garcia, Tena, and Monzonis
Functional value
(2006)
Emotional value
Social value
Sanchez, Callarisa, Rodriquez, and
Functional value
Moliner (2006)
Emotional value
Social value
Keng, Huang, and Zheng (2007)
Intrinsic value
Extrinsic value
Experiential value (efficiency/CROI, excellent
service, aesthetics, playfulness/escapism)
Moliner, Sanchez, Rodriguez, and
Callarisa (2007)
Yuan and Wu (2008)
Sandstrom, Evardsson, Kristensson,
and Magnusson (2008)
Okazaki (2008)
Williams and Soutar (2009)
Hsi-Jui Wu and Liang (2009)
Functional value
Emotional value
Social value
Emotional value
Functional value
Functional value
Emotional value
Experiential value
- Intrinsic (enjoyment, aesthetics, escapism)
- Extrinsic (efficiency, economic)
- Perceived novelty
- Perceived riskiness
Functional value
Emotional value
Social value
Novelty value
Experiential value (CROI, excellent service,
aesthetics, escapism)
49
H4: Feel perception induces positive functional value.
H5: Think perception induces positive emotional value.
H6: Think perception induces positive functional value.
H7: Act perception induces positive emotional value.
H8: Act perception induces positive functional value.
Experiential marketing “is focused more on the customers‟ experience creation processes,
including pre-purchase, moment-of-truth, and post-purchase (Yuan and Wu, 2008, pg. 388).
Prior research has been done to test emotional and functional value in the pre-purchase phase of
consumption (Keng, Huang, Zheng, and Hsu, 2007), during consumption of a product or service
(Sandstrom, Edvardsson, Kristensson, and Magnusson, 2008), and in the post-purchase phase of
consumption (Moliner, Sanchez, Rodriquez, and Callarisa, 2007). The prior eight hypotheses
will be tested during the pre-consumption phase of the customer experience creation process.
IV.3.2. Experiential Value and Purchase Intentions
Prior studies have supported the idea that experiential value provided through
experiential marketing has a strong effect on purchase intentions (Keng et al, 2007; Pura, 2005).
In prior research conducted by an international market research organization it was found that
experiential marketing produced faster results than traditional methods and consumers suggested
it led to quick positive purchase decisions (Williams, 2006). This typically takes place during
the pre-purchase phase of service delivery in which the experience begins and customers become
aware and interested in the product offering. Because of the emotional and functional value
provided through experiential marketing, consumers‟ behavioral decisions are affected. Based
on the value provided, customers will decide whether or not they want to purchase the product.
50
Researchers have suggested that experiential value has an effect on purchase intentions (Bigne et
al., 2005; Keng et al., 2007; Koenig-Lewis and Palmer, 2008; Pura, 2005; Williams and Soutar
2009). Since positive or negative purchase intentions tend to occur during the pre-consumption
phase of the customer experience creation process, this relationship will only be tested during the
pre-consumption phase. Therefore, the following two hypotheses were developed to test the
relationship between experiential value and purchase intentions.
H9: Emotional value induces positive purchase intentions.
H10: Functional value induces positive purchase intentions.
IV.4. Methodology
IV.4.1. Survey Development
Experiential marketing, experiential value, and purchase intentions were measured with
items used previously in research literature (Hsi-Jui Wu and Liang, 2009; Keng, Huang, Zheng,
and Hsu, 2007; Moliner, Sanchez, Rodriguez, and Callarisa, 2007; Pura, 2005; Roig, Garcia,
Tena, and Monzonis, 2006; Schmitt, 1999; Sweeney and Soutar, 2001; Williams and Soutar,
2009; Yuan and Wu, 2008;). These items (shown in Table 6) were modified to depict value in a
virtual experience context. The context in which the hypotheses are tested is two different
virtual platforms provided to customers through Marriott‟s website. One virtual platform is an
interactive virtual tour of a resort located in Hawaii (Video #1). The other virtual platform is a
narrated promotional video featuring a hotel in London (Video #2). Figure 2 and Figure 3
represent a visual image of the main page that appears when viewers enter the links.
51
Figure 2. Image of Main Page for Video #1
Figure 3. Image of Main Page for Video #2
An online questionnaire was developed to test relationships among three concepts:
experiential marketing, experiential value, and purchase intentions as shown in the theoretical
model (Figure 4).
A set of 20 questions regarding experiential marketing was adapted from Schmitt (1999),
Yuan and Wu (2008), and Pura (2005), 16 questions adapted from Pura (2005), Roig et al.
52
(2006), Moliner et al. (2007), Sanchez et al. (2007), Keng et al. (2007), His-Jui Wu and Liang
(2009), and Williams and Soutar (2009) on experiential value (8 on emotional value and 8 on
functional value), and 9 questions adapted from Keng, Hueng, and Zheng (2007), Pura (2005),
and Sweeney and Soutar (2001) on purchase intentions. The 45 questions were asked after each
video with each respondent viewing both videos for a total of 90 questions. Respondents were
asked to respond by indicating their levels of agreement according to a seven point likert scale
where 1=strongly disagree and 7=strongly agree, with 8 being not applicable. Five demographic
questions were also included in the questionnaire to help further analyze results.
The original questionnaire was sampled by 22 respondents to verify clarity and the
effectiveness of measurements of customer reactions. Cronbach‟s alpha was calculated for each
scale containing more than one item as shown in Appendix B. The Cronbach‟s alpha value
should be above 0.7 to be considered a valid and reliable scale. If the value is below 0.7, then
the item should be dropped (Yuan and Wu, 2008). The Cronbach‟s alpha value for each scale
and each video was between 0.741 and 0.969 showing high reliability, except for one, the scale
consisting of items X12, X13 , and X14 to measure think perception for Video #2, which was
valued at 0.679. However, this scale was not dropped because Cronbach‟s alpha was very close
to the 0.7 standard and was only below the standard for the scale on one video and not both. The
results of this pretest can be found in Appendix B.
IV.4.2. Data Collection
The survey was distributed online to be filled in via the internet. The online software
program (SurveyGizmo 3.0) provided through www.surveygizmo.com was used to create and
distribute the survey through an active link which respondents would click on to be directed to
53
Figure 4. Theoretical Framework of Experiential Marketing,
Experiential Value, and Purchase Intentions
Source: Adapted from Yuan and Wu (2008)
the survey. The link was posted on a social media website, Facebook, and distributed firsthand
to personal email addresses. A total of 150 complete and usable questionnaires were collected
and used for the data analysis.
IV.4.3. Statistical Analysis
The hypotheses were tested using SPSS software. Factor structures and Cronbach‟s
alpha were assessed for each proposed construct to test validity and reliability. After performing
scale assessment efforts, variables were constructed by taking the averages of the scores on items
associated with each measure. These variables were used to perform regression analysis to test
the significance of the hypotheses. Descriptive statistics for each variable were also examined,
54
Table 6. Constructs and Corresponding Measurement Items
Construct
Items of Measurement
Adapted from
Sense
Perception
X1: This video captures my visual attention
X2: This video is aesthetically appealing
X3: This video captures my auditory attention
X4: My senses (visual/auditory) are stimulated
by viewing this video
X5: The sensory stimulations are consistent,
yet fresh and new
(Yuan & Wu, 2008)
(Yuan & Wu, 2008)
(Yuan & Wu, 2008)
(Schmitt, 1999)
X6: This video puts me in a certain mood
X7: This video shows that the company is
sincere
X8: This video shows that the company cares
about my needs and wants
X9: I am affected by this video in an emotional
manner
X10: This video triggers my inner feelings and
emotions
(Yuan & Wu, 2008)
(Yuan & Wu, 2008)
X11: I would view this video out of curiosity
X12: This video encourages my to think
creatively
X13: This video engages my curiosity
X14: This video makes me curious about the
product offered
X15: This video is intriguing
(Pura, 2005)
(Yuan & Wu, 2008)
X16: This [service] allows my to experiment
with new ways of doing things
X17: This video affects my ordinary behavior
X18: This video motivates and inspires me
X19: This video affects my physical
experiences
X20: This video will enrich my lifestyle and
behavior
(Pura, 2005)
Y1: I feel comfortable viewing this video
Y2: Viewing this video gives me pleasure
Y3: Viewing this video makes me feel good
Y4: In general I feel at ease and relaxed after
viewing this video
Y5: This video made me feel happy
Y6: This video gives me a feeling of
excitement
Y7: This video gives me positive feelings
Y8: I enjoyed watching this video
(Moliner et al, 2007)
(Pura, 2005)
(Pura, 2005)
(Roig et al, 2006)
Feel
Perception
Think
Perception
Act
Perception
Emotional
Value
55
(Schmitt, 1999)
(Yuan & Wu, 2008)
(Yuan & Wu, 2008)
(Schmitt, 1999)
(Yuan & Wu, 2008)
(Yuan & Wu, 2008)
(Schmitt, 1999)
(Schmitt, 1999)
(Schmitt, 1999)
(Schmitt, 1999)
(Schmitt, 1999)
(Roig et al, 2006)
(Williams & Soutar, 2009)
(Sanchez et al, 2006)
(Sanchez et al, 2006)
Functional
Value
Purchase
Intentions
Table 6 cont.
Y9: I value the ease of viewing this video
Y10: Viewing this video is an efficient way to
manage my time
Y11: I value the possibility to view this video
Y12: I value the convenience of viewing this
video
Y13: This video provides consistent quality
Y14: This video provides and acceptable
standard of quality
Y15: I do not think viewing this video is a
waste of time
Y16: Viewing this video makes my life easier
Z1: I have a strong desire to visit the place
depicted in this video
Z2: I have a strong desire to purchase from the
company providing this video
Z3: I would recommend this video to others
Z4: I would recommend the brand providing
this video to others
Z5: I intend to use the services and products of
the brand providing this video
Z6: Based on this video the probability that I
will use this brand is high
Z7: I intend to use this video in the future
Z8: I will use videos similar to this in the future
Z9: I would be willing to purchase this brand‟s
product
(Pura, 2005)
(Pura, 2005)
(Pura, 2005)
(Pura, 2005)
(Williams & Soutar, 2009)
(Williams & Soutar, 2009)
(Hsi-Jui-Wu & Liang, 2009)
(Keng et al, 2007)
(Keng et al, 2007)
(Keng et al, 2007)
(Keng et al, 2007)
(Keng et al, 2007)
(Pura, 2005)
(Pura, 2005)
(Pura, 2005)
(Pura, 2005)
(Sweeney & Soutar, 2001)
along with correlations among variables. These steps were performed separately for each video
segment of the survey.
IV.4.4. Results
Profile of Participants: The profile of participants was surveyed with five demographic
questions. They included gender, age, employment, income, and education and the profile
results are reported in Table 7. As shown in the table, there were more male respondents (66%)
56
than females (34%). The majority of respondents were ages 18 to 24 years old (54.7%). Most of
the respondents were employed full-time (46.7%). The respondents‟ incomes were in the lower
range with 26% of them earning under US$20,000. The probable reason for this is most likely
due to the fact that more than half of the respondents (54.7%) were young in the 18 to 24 years
old range and 34% of the respondents were students. Finally, the majority of the respondents
were college educated, with 27% attending some college, 37.2% with undergraduate college
degrees, and 24.3% with graduate degrees.
The following reasons are inferred as explanations of these results: First, the survey was
distributed and conducted online requiring a computer and internet connection therefore young,
college students who tend to be more familiar with the internet and computers are more likely to
complete the survey. Second, the context with which the research is being conducted (for a
student‟s Master Thesis) may have an influence causing more students, specifically college
students, to be more willing to take the survey.
Finally, because the survey was initially
distributed to personal contacts, it is likely for the demographics of respondents to be in
alignment with those of the person distributing the survey, which is between 18-24 years old,
with most people in this age category being a college student or employed full-time.
Reliability and Validity: To assess validity and factor structure of each construct,
maximum likelihood factor analysis was used. This allowed for the examination of whether
common method bias is an issue by using Harman‟s (1967) one-factor test. This test involves
exploratory factor analysis using an oblique rotation on items that make up each construct. With
this method, if there is a degree of common method variance present, one factor will emerge
(Podsakoff and Organ, 1986). This method was tested on concepts as a whole to determine the
discriminant validity of each construct. Discriminant validity verifies that items of a concept are
57
Table 7. Demographic Profile of Respondents
Variable
Frequency
Gender
Male
99
Female
51
Age
18-24
82
25-34
50
35-44
7
45-54
33
55-64
7
65 or above
1
Prefer not to answer
0
Employment
Employed Full-Time
70
Employed Part-Time
16
Unemployed
6
Retired
3
Student
51
Prefer not to answer
4
Income
Under $20,000
39
$20,000-$29,999
16
$30,000-$39,999
18
$40,000-$49,999
15
$50,000-$69,999
6
$70,000-$99,999
8
$100,000-$149,999
9
$150,000 or more
6
Prefer not to answer
33
Education
High school or less
Trade or vocational school
Attended some college
Undergraduate college degree
Graduate degree
Prefer not to answer
58
11
2
40
55
36
4
%
66
34
54.7
33.3
4.7
2
4.7
.7
0
46.7
10.7
4
2
34
2.7
26
10.7
12
10
4
5.3
6
4
22
7.4
1.4
27
37.2
24.3
2.7
not highly correlated with items that are designed to measure a different concept. Since the
constructs are made up of multiple scales, and they had not previously been tested together, this
analysis assesses whether items of a construct measure one construct only and do not overlap
with another construct.
To evaluate discriminant validity, experiential marketing concepts (sense perception, feel
perception, think perception, and act perception) and their scale measurements were tested as a
whole instead of independently. Experiential value scales and purchase intention scales were
also analyzed as a whole instead of independently in order to compare the correlations among the
constructs and their items. The results of the factor analysis are shown in Table 8. Table 8
shows the measurement items that passed the discriminant validity test which will be used for the
following regression analysis, along with their corresponding factor loadings.
Using data for Video #1, the factor analysis results of the four experiential marketing
constructs (sense perception, feel perception, think perception, and act perception) showed only
three factors emerge instead of four. These results showed significant off-loadings. When four
factors were forced, there were still significant off-loadings. After analyzing the data and
considering prior research conducted by Yuan and Wu (2008) which failed to support hypotheses
including the sense perception, this method was performed without the sense perception
measurements items. Once excluding sense perception items, the factor analysis was conducted
again using three constructs (feel perception, think perception, and act perception) with three
factors emerging. Some items showed significant off loadings and were dropped.
Next, factor analysis was performed on constructs of experiential value (emotional value
and functional value) together with the purchase intentions construct. Results showed three
59
Table 8. Principal Components Factor Analysis
Component
1
2
Feel Perception
This video/web feature puts me in a certain mood
This video/web feature shows that the company is sincere
Think Perception
I would view this video/web feature out of curiosity
This video/web feature engages my curiosity
This video/web feature makes me curious about the product offered
This video/web feature is intriguing
Act Perception
This video/web feature affects my ordinary behavior
This video/web feature motivates and inspires me
This video/web feature affects my physical experiences
This video/web feature will enrich my lifestyle and behavior
Emotional Value
Using this video/web feature gives me pleasure
Using this video/web feature makes me feel good
In general I feel relaxed and at ease after using this video/web feature
This video/web feature gives me a feeling of excitement
This video/web feature made me feel happy
Functional Value
I value the ease of using this video/web feature
This video/web feature provides consistent quality
This video/web feature provides and acceptable standard of quality
Purchase Intentions
I would be willing to purchase this brand‟s product
Based on this video/web feature the probability that I will use this brand
is high
I intend to use this video/web feature in the future
I would recommend the brand providing this video/web feature to others
3
.770
.659
.799
.823
.787
.779
.843
.799
.874
.837
.769
.834
.823
.791
.786
.765
.678
.783
.714
.742
.707
.691
factors emerging, yet some items with significant off-loadings. A total of eighteen items were
dropped.
Factor analysis for Video #2 was performed in the same manner as the factor analysis for
Video #1. Performing factor analysis with data from Video #2 yielded similar results as the
factor analysis for Video #1. For the purpose of this study, the scale items that tested valid for
60
Table 9. Results of Reliability on Experiential Marketing,
Experiential Value, and Purchase Intentions
Video #1
Video #2
Concept
Experiential
Marketing
Experiential Value
Purchase Intentions
Sub concept
Feel perception
Think perception
Act perception
Emotional value
Functional value
Purchase intentions
Cronbach‟s Alpha
0.613
0.775
0.881
0.925
0.914
0.955
0.944
0.945
0.846
0.840
0.904
0.898
Video #1 (Table 8) will also be adopted for the analysis of Video #2 so that the each video was
analyzed and compared using the same measurement items.
Following the factor analysis, Cronbach‟s alpha was used to test the reliability of the
constructs. Each Cronbach‟s alpha value should be greater than 0.7 which is considered the
common value for the construct to be reliable. The threshold standard for Cronbach‟s alpha is
0.7, however reliabilities slightly less than the standard may be acceptable (Hair, Anderson,
Tatham, and Black, 1995). The results of this assessment are shown in Table 9. Cronbach‟s
alpha for the feel perception of Video #1 was below the standard at 0.613, however this construct
is only being measured using two items and is close to 0.7, so the items will not be dropped. All
other constructs were above the standard.
Descriptive Statistics and Correlations: Table 10 presents a summary of descriptive
statistics of each variable for each video, followed by Table 11 presenting the correlations among
the variables. As seen in Table 10, the means for each construct of both videos is between 4.122
and 5.640. This shows that each construct is measured positively since the means are above the
mid-point of the scale and the range of responses covers the full scale. It can be seen in Table 10
that functional value had the highest mean scores for both videos followed by think perception.
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Video #1
Feel perception
Think perception
Act perception
Emotional value
Functional value
Purchase intentions
Video #2
Feel perception
Think perception
Act perception
Emotional value
Functional value
Purchase intentions
Table 10. Summary of Descriptive Statistics
Std.
Mean Scale
Min
Dev.
4.767
7-point
1.262
1.00
5.329
7-point
1.192
1.00
4.122
7-point
1.538
1.00
4.661
7-point
1.367
1.00
5.341
7-point
1.170
1.00
4.962
7-point
1.290
1.00
Std.
Mean Scale
Min
Dev.
5.279
7-point
1.321
1.00
5.358
7-point
1.321
1.00
4.409
7-point
1.321
1.00
5.109
7-point
1.321
1.67
5.640
7-point
1.321
1.00
7-point
1.00
4.945
1.321
Max
Items N
7.00
7.00
7.00
7.00
7.00
7.00
2
4
4
5
3
4
Max
Items N
7.00
7.00
7.00
7.00
7.00
7.00
2
4
4
5
3
4
150
150
150
150
150
150
149
149
149
149
149
149
Act perception had the lowest scores for both videos. It can also be seen in Table 11 that the
highest correlations for Video #1 involved think perception and purchase intentions and for
Video #2 involved think perception and emotional value. The lowest correlations for both
videos involved act perception and functional value.
Video #1
Feel perception
Think perception
Act perception
Emotional value
Functional value
Purchase intentions
Video #2
Feel perception
Think perception
Act perception
Emotional value
Functional value
Purchase intentions
Table 11. Correlations Among Variables
Feel
Think
Act
EV
1.00
0.547
1.00
0.474
0.437
1.00
0.575
0.626
0.726
1.00
0.537
0.604
0.345
0.581
0.558
0.729
0.550
0.726
Feel
Think
Act
EV
1.00
0.572
1.00
0.451
0.575
1.00
0.615
0.797
0.662
1.00
0.662
0.686
0.285
0.616
0.729
0.694
0.560
0.682
62
FV
PI
1.00
0.648
FV
1.00
PI
1.00
0.645
1.00
Regression Analysis: Linear regression analysis was performed on each video to
determine if the hypotheses can be supported. Multiple regressions were used in which the main
effects were estimated simultaneously. Regression was assessed between experiential marketing
(feel perception, think perception, and act perception) and emotional value (Regression 1) and
then again between experiential marketing and functional value (Regression 2). It was then
applied to experiential value (emotional value and functional value) and purchase intentions
(Regression 3). A regression analysis was therefore applied to each video three times to test the
relationships of the constructs. The results of the regression analysis are shown in Table 12.
The adjusted R-squares, regression coefficients, t-statistics, and one-tailed significance levels for
each coefficient are presented for each regression performed.
As seen in Table 12, all but two of the hypothesized main effects are significant at α
<0.05 level. Hypothesis 1 and 2 relating sense perception to emotional value and functional
value are not examined because of prior analysis causing the related items to be excluded.
Hypothesis 3 predicted that feel perception induces positive emotional value. This hypothesis is
supported for Video #1 (β=0.159, p<0.05) and Video #2 (β=0.188, p<0.05). Therefore, through
virtual experiential marketing, feel perception has a positive and significant effect on emotional
value.
Hypothesis 4 predicted that feel perception induces positive functional value.
The
hypothesis is supported for Video #1 (β=0.289, p<0.05) and for Video #2 (β=0.445, p<0.05).
Therefore, it is supported that feel perception has a positive effect on functional value.
As predicted, think perception had a positive influence on emotional value. Therefore
Hypothesis 5 is supported for Video #1 (β=0.314, p<0.05) and for Video #2 (β=0.534, p<0.05).
This result confirms that in virtual experiential marketing, think perception will have a positive
63
Video #1
Table 12. Regression Analysis Results
Unstandardized Standardized
coefficient
coefficient (β)
0.035
Regression 1:
Effects of
experiential
marketing on
emotional value
Constant (EV)
Main effects
H3 Feel perception
H5 Think perception
H7 Act perception
Regression 2:
Effects of
experiential
marketing on
functional value
Constant (FV)
Main effects
H4 Feel perception
H6 Think perception
H8 Act perception
Constant (PI)
Regression 3:
Main effects
Effects of
H9 Emotional value
experiential value
H10 Functional value
on purchase
intentions
Video #2
Regression 1:
Effects of
experiential
marketing on
emotional value
Constant (EV)
Main effects
H3 Feel perception
H5 Think perception
H7 Act perception
Regression 2:
Effects of
experiential
marketing on
functional value
Constant (FV)
Main effects
H4 Feel perception
H6 Think perception
H8 Act perception
Constant (PI)
Regression 3:
Main effects
Effects of
H9 Emotional value
experiential value
H10 Functional value
on purchase
intentions
0.173
0.360
0.457
0.159
0.314
0.513
t
Significance
(one-tailed)
2.631
5.299
9.105
0.009
0.000
0.000
1.719
Adj. R2
0.654
0.414
0.268
0.430
0.013
0.289
0.438
0.017
3.670
5.675
0.230
0.000
0.000
0.819
0.632
0.598
0.497
0.377
0.527
0.342
8.260
5.356
0.000
0.000
Unstandardized
coefficient
0.555
Standardized
coefficient (β)
t
Significance
(one-tailed)
0.182
0.500
0.207
0.188
0.534
0.271
3.456
8.990
4.961
0.001
0.000
0.000
1.712
Adj. R2
0.715
0.610
0.392
0.487
-0.170
0.445
0.572
-0.245
6.999
8.234
-3.831
0.000
0.000
0.000
-0.051
0.540
0.500
0.433
0.459
0.362
6.491
5.111
0.000
0.000
effect on the emotional value concept of experiential value.
Hypothesis 6 predicted that think perception induces positive functional value. The data
supported this hypothesis for Video #1 (β=0.438, p<0.05) and for Video #2 (β=0.572, p<0.05).
64
Therefore it is supported that think perception will positively influence functional value in virtual
experiential marketing.
Act perception was predicted to induce positive emotional value. The data supported this
conclusion so Hypothesis 7 is accepted for Video #1 (β=0.513, p<0.0.5) and for Video #2
(β=0.271, p<0.05).
Therefore the hypothesis is supported stating that act perception has a
positive effect on emotional value.
Act perception was also predicted to induce positive functional value. However, the data
did not support this conclusion for Video #1 (β=0.017, p<0.05) or Video #2 (β=-0.245, p<0.05)
thus Hypothesis 8 is rejected. This means that act perception does not have a significant
influence on inducing functional value for virtual experiential marketing.
Hypothesis 9 predicted that emotional value induces positive purchase intentions. The
data strongly supports the hypothesis for Video #1 (β=0.527, p<0.05) and for Video #2 (β=0.459,
p<0.05). Therefore it can be stated that emotional value has a significant and positive effect on
purchase intentions.
Hypothesis 10 suggested that functional value has a positive effect on purchase intentions
and is supported by the data from Video #1 (β=0.342, p<0.05) and Video #2 (β=0.362, p<0.05).
It can therefore be stated that functional value has a positive and significant influence on
purchase intentions.
Summarizing the results, it can be concluded that act perception proved to be the least
effective virtual experiential marketing concept since it had the lowest mean scores and the
lowest correlations among relationships. Hypothesis 8, which predicted act perception would
induce positive functional value was rejected. Generally speaking, because seven of the eight
tested hypotheses were supported through regression analysis, the results state that feel
65
perception and think perception have the strongest influence on experiential value and
experiential value certainly influences positive purchase decisions.
66
CHAPTER V. CONCLUSION
V.1. Discussion of Results
Hypotheses were proposed to examine the relationships between experiential marketing
and purchase intentions in a virtual setting of hospitality promotions.
Performance of
experiential marketing was measured from consumers‟ perceptions and reactions to virtual
experiences. The results of the analysis show that seven of the ten analyzed hypotheses were
supported. It is important to note that of the three hypotheses not supported only one was
rejected and two were not analyzed after being disregarded in validity testing. Generally stating,
the results of this study conclude that experiential marketing could induce purchase intentions.
More specifically experiential marketing can induce positive purchase intentions through
emotional value and functional value mainly through feel perception and think perception.
In relation to the stated specific objectives, the following conclusions were made. First,
the most affective components of experiential marketing used in Marriott‟s virtual marketing
efforts proved to be feel perception and think perception. Feel perception is a result of how
consumers perceive the feeling component of experiential marketing which appeals to
customers‟ inner feeling and emotions.
Think perception is the component of experiential
marketing which measures the extent to which the marketing creates cognitive, problem-solving
experiences which engage customers creatively (Schmitt, 1999).
These components of
experiential marketing had the most positive impact on experiential value.
Second, Marriott‟s virtual experiential marketing techniques of utilizing virtual tours and
promotional videos on its website proved to be beneficial in creating emotional value and
functional value mostly through feel perceptions and think perceptions.
In regards to the
effectiveness of each experiential marketing component, in Video #1 act perception had the most
effect on emotional value and think perception had the most effect on functional value. For
Video #2 think perception had the most effect on emotional value and functional value.
In regards to the objective to determine the effect that experiential value has on
consumers‟ purchase intentions, it was found that experiential value has a significant and
positive effect on purchase intentions. From the regression analysis results, it was found that
emotional value had more of an effect on purchase intentions than functional value for both
videos.
The last specific objective aimed to compare both videos and determine which video
consumers responded more positively to.
When looking at the mean scores of each video,
scores for Video #2 were generally higher.
Respondents in general gave higher marks to
questions related to Video #2, meaning they responded more positively to the video which
required no active participation and was more entertaining than the video that was interactive and
required active participation. A reason for this result could be that respondents were not very
willing to actively participate and engage themselves with Video #1 so their responses were
negatively impacted. Due to the interactive nature of Video #1, some respondents may have
encountered problems with browser compatibility resulting in slow loading time which could
have also affected measures of Video #1.
Several possible explanations can be provided for the failure of Hypothesis 8 relating act
perception to functional value. These results could be due to the fact that the survey context was
testing virtual experiential marketing and act measurements are more suitable to be measured in
a physical environment than a virtual environment. Act perception items were more focused on
physical behaviors (affects ordinary behavior, affects physical experiences, enriches lifestyles
68
and behaviors) whereas feel perception and think perception items are focused on emotional
reactions and mental behaviors.
Hypothesis 8 was rejected for each video, however had different results. For Video #1,
results showed that act perception was not a significant factor in inducing functional value. For
Video #2, results showed that act perception had a negative effect on functional value. Act
perception also had the lowest mean scores of all the measurements.
Act perception and
functional value had the lowest correlation scores as well for both videos. This shows that
virtual experiential marketing does not have as strong effect on physical behaviors and
experiences as it does emotional and mental behaviors.
V.2. Managerial Implications
Marriott is a leading competitor in its industry and one of the most recognized brands in
the world. With its long standing business past, it can be implied that Marriott is familiar with
adapting to changing economies and social trends. It is fair to state that Marriott has succeeded
in dealing with the evolution of the technology age by the success in its website and customer
reservation system and database. Experiential marketing is simply another trend in the evolution
of marketing in which Marriott has begun to explore. The results of this study introduce many
implications which Marriott and other hospitality and hotel businesses can apply to their
operations and marketing knowledge to better benefit from experiential marketing.
One practical implication based on the results of this study is that virtual experiential
marketing is most effective when companies are trying to reach consumers emotionally or
mentally. Marriott and other lodging companies might want to focus on physical brand
environments such as the bus tour that was done in Hawaii to instill the act module in customers.
69
However, the act module, which targets consumers‟ physical experiences, may not be an
important aspect in attracting customers to the Marriott brand using virtual methods. This study
has shown that feel perception, think perception, and emotional value are very strong in inducing
positive purchase intentions. Feel perception measures the appeal of experiential marketing to
customers‟ inner feelings and emotions while think perception measures the appeal of cognitive
and creative experiences (Schmitt, 199). Emotional value refers to the intrinsic benefits that a
customer receives, such as feeling or cognitive perceptions (Yuan and Wu, 2008). Although
Marriott was used for the research application, it is suggested that the results of this study could
be applied to other lodging and hospitality companies.
Since both videos proved to add value through experiential marketing, it may be
beneficial for Marriott to create videos or virtual tours for each of its hotels, or at least all of its
major hotels. Currently, only large hotels and resorts that bring in lots of business use the virtual
tour feature or have a video promoting the site. Most all hotels have 360 degree photos for
guests to view, but the virtual tours and videos add a more realistic appeal and allow customers
to experience the hotel prior to purchase. One option is for Marriott to combine the features of
the two videos so that customers can interact and influence what they see in the video while also
having music, narration, and professionally edited scenes.
This research can also be a basis of reasoning for Marriott to utilize other virtual
experiential marketing techniques. They have already utilized methods which include having a
blog and news center on their website, but perhaps they could venture into other virtual areas
such as getting more involved in social media. They could run polls, post videos, feature a hotel
each week, etc. on social media websites such as Facebook and Twitter to further engage
customers.
70
According to the concept of experiential marketing, Marriott should consider widening its
offerings to incentivize experiential services.
Marriott could possibly offer complimentary
activities to guests so that they could try out some experiential activities offered at certain
destinations. Marriott could also offer more chances for consumers to win trips, or extend an
offering of a free stay to certain individuals to allow for more opportunities for consumers to
sample the product and services being offered.
Marriott has a very established loyalty program, Marriott Rewards, which could benefit
from being redefined to include features related to experiential marketing. Marriott could hold
an annual gathering for loyal members to socialize and learn about member benefits or create an
exlcusive space at a live event strictly accessible to Marriott Rewards members. Marriott‟s
website already has a page dedicated solely to the loyalty program with a feature where members
can shares stories and insight, but there is still room for experiential marketing advancements.
The website could enhance the virtual experiential aspect by making it more interactive perhaps
with more animation, customer polls, or perhaps even games and contests which could enter the
members into a raffle for a free trip.
Generally speaking, this study introduces a new approach to marketing for hospitality and
tourist managers.
The hospitality and tourist industries have not explored the field of
experiential marketing as much as other product or brand companies like Red Bull and Guinness.
This is because hotel and tourist companies are unique due to their product nature which cannot
be sampled. While their products are specific to an experience, it is difficult for hotel companies
to affectively promote products by providing an experience. However, as seen in this study,
progress is being made by using virtual platforms and businesses should continue to apply these
71
interactive and engaging aspects to other forms of marketing to attract and maintain customers
while creating an unforgettable experience for them.
V.3. Research Limitations
Time allotted to complete the study and the available resources caused limitations in the
research. Due to a deadline, the amount of research that was able to be collected and the analysis
performed was restricted in order to meet the deadline of submission. The collection of data also
took longer than expected and therefore limited the time available for analysis and conclusions.
Specific software and knowledge of how to use the software were also required to perform the
most accurate analysis of the data so other analysis techniques and methods were used to go
about examining and investigating the collected data.
The limitation of time and available resources also affected how research would be
collected for the study. The method used to collect data was survey based and proposed some
limitations. When using surveys it is hard to assess if respondents are honest. For more accurate
results, in depth interviews or focus groups may have been better. Also, the data used in this
study was distributed and collected via the internet and resulted in skewed characteristics of
respondents. Most respondents were young students or young and recently employed full-time.
This demographic does not cover the whole range of potential consumers of the Marriott brand
which include a large demographic of business professionals and also families.
V.4. Areas for Further Research
Based on the results of this study, several suggestions have been constructed for further
research. First and foremost a theoretical model can be analyzed using structural equation
72
modeling (SEM) analysis allowing researchers to examine the fit of the model with the
hypotheses by testing them simultaneously.
Confirmatory factor analysis should also be
performed to further assess the fit of the proposed model.
In past studies, experiential marketing has proven to be most accepted by Generation Y
(young teenagers to 20-some-year-olds) and campaigns and promotions are geared towards this
generation in order to receive the most response (Gen Y, 2005). With this demographic making
up only a small portion of Marriott‟s consumer base, it might be beneficial to test a product
specifically targeted towards these consumers to better evaluate the effect of experiential
marketing on purchase intentions. Also testing the effect that experiential marketing techniques
have on customer satisfaction and brand loyalty could be a possibility for further research.
For this study, experiential marketing was only examined during the pre-consumption
phase of a service delivery. Further research could look into the other phases of consumption
(during consumption and post-consumption) to determine the value that experiential marketing
provides, if any, during these parts of service delivery or product consumption. For example, in
a lodging company such as Marriott, further research could examine other experiential marketing
methods including experiential offerings at resorts or physical branding environments such as the
Marriott Hawaii bus tour.
Because sense perception was not able to be tested for this study, further research could
be conducted at a physical location to get better results measuring sense items. This could be
applied to Marriott and data could be collected at an actual Marriott resort location or for an
unrelated brand in which sense perception plays a role in adding value to experiential marketing
campaigns, such as at a live music event. A test at a physical location may also be beneficial in
73
evaluating act perception since in this study the relationship between act perception and
functional value was not supported in a virtual setting.
74
REFERENCES
Accenture (2007), Marriott International: Web Services, www.accenture.com [visited 28th July
2010]
Atwal, G., & Williams, A. (2009): “Luxury brand marketing – The experience is everything!”,
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APPENDIX
Appendix A. Questionnaire
PAGE 1: WELCOME & INTRODUCTION
Appendix A cont.
PAGE 2: INSTRUCTIONS
81
Appendix A cont.
PAGE 3: VIDEO #1
82
Appendix A cont.
PAGE 3 continued: VIDEO #1 QUESTIONS
83
Appendix A cont.
PAGE 3 continued: VIDEO #1 QUESTIONS
84
Appendix A cont.
PAGE 3 continued: VIDEO #1 QUESTIONS
85
Appendix A cont.
PAGE 4: VIDEO #2
86
Appendix A cont.
PAGE 4 continued: VIDEO #2 QUESTIONS
87
Appendix A cont.
PAGE 4 continued: VIDEO #2 QUESTIONS
88
Appendix A cont.
PAGE 4 continued: VIDEO #2 QUESTIONS
89
Appendix A cont.
PAGE 5: DEMOGRAPHIC QUESTIONS
PAGE 6: THANK YOU
90
Appendix B. Pretesting of Scales: Cronbach‟s Alpha for Scales of Measurement
Items of Measurement
Sense Perception
X1: This video captures my visual attention
X2: This video is aesthetically appealing
X3: This video captures my auditory attention
X4: My senses (visual/auditory) are
stimulated by viewing this video
X5: The sensory stimulations are consistent,
yet fresh and new
Feel Perception
X6: This video puts me in a certain mood
X7: This video shows that the company is
sincere
X8: This video shows that the company cares
about my needs and wants
X9: I am affected by this video in an
emotional manner
X10: This video triggers my inner feelings and
emotions
Think Perception
X11: I would view this video out of curiosity
X12: This video encourages my to think
creatively
X13: This video engages my curiosity
X14: This video makes me curious about the
product offered
X15: This video is intriguing
Act Perception
X16: This [service] allows my to experiment
with new ways of doing things
X17: This video affects my ordinary behavior
X18: This video motivates and inspires me
X19: This video affects my physical
experiences
X20: This video will enrich my lifestyle and
behavior
Adapted from
(Yuan & Wu, 2008)
(Yuan & Wu, 2008)
(Yuan & Wu, 2008)
(Schmitt, 1999)
Cronbach‟s Alpha
Video #1 Video #2
0.766
0.821
0.937
0.742
0.861
0.741
0.867
0.679
0.958
0.941
(Schmitt, 1999)
(Yuan & Wu, 2008)
(Yuan & Wu, 2008)
(Yuan & Wu, 2008)
(Yuan & Wu, 2008)
(Schmitt, 1999)
(Pura, 2005)
(Yuan & Wu, 2008)
(Yuan & Wu, 2008)
(Yuan & Wu, 2008)
(Schmitt, 1999)
(Pura, 2005)
(Schmitt, 1999)
(Schmitt, 1999)
(Schmitt, 1999)
(Schmitt, 1999)
91
Appendix B cont.
Emotional Value
Y1: I feel comfortable viewing this video
Y2: Viewing this video gives me pleasure
Y3: Viewing this video makes me feel good
Y4: In general I feel at ease and relaxed after
viewing this video
Y5: This video made me feel happy
Y6: This video gives me a feeling of
excitement
Y7: This video gives me positive feelings
Y8: I enjoyed watching this video
Functional Value
Y9: I value the ease of viewing this video
Y10: Viewing this video is an efficient way to
manage my time
Y11: I value the possibility to view this video
Y12: I value the convenience of viewing this
video
Y13: This video provides consistent quality
Y14: This video provides and acceptable
standard of quality
Y15: I do not think viewing this video is a
waste of time
Y16: Viewing this video makes my life easier
Purchase Intentions
Z1: I have a strong desire to visit the place
depicted in this video
Z2: I have a strong desire to purchase from
the company providing this video
Z3: I would recommend this video to others
Z4: I would recommend the brand providing
this video to others
Z5: I intend to use the services and products
of the brand providing this video
Z6: Based on this video the probability that I
will use this brand is high
Z7: I intend to use this video in the future
Z8: I will use videos similar to this in the
future
Z9: I would be willing to purchase this
brand‟s product
(Moliner et al, 2007)
(Pura, 2005)
(Pura, 2005)
(Roig et al, 2006)
0.969
0.765
0.929
0.939
(Sanchez et al, 2006)
(Sanchez et al, 2006)
0.770
0.839
(Pura, 2005)
(Pura, 2005)
0.887
0.789
0.921
0.959
0.927
0.845
0.843
0.843
(Roig et al, 2006)
(Williams & Soutar, 2009)
(Pura, 2005)
(Pura, 2005)
(Williams & Soutar, 2009)
(Williams & Soutar, 2009)
(Hsi-Jui-Wu & Liang,
2009)
(Keng et al., 2007)
(Keng et al., 2007)
(Keng et al., 2007)
(Keng et al., 2007)
(Keng et al., 2007)
(Pura, 2005)
(Pura, 2005)
(Pura, 2005)
(Pura, 2005)
(Sweeney & Soutar, 2001)
92