Transcript Lesson 4. Assessing Experience Economy Strategies of the Business

Lesson 4.1: A 4E-based Marketing Plan to Help
Define the Firm’s Position and Image
Lesson 4.2: 4E-based Strategy Formulation
Lesson 4.3: Strategy Implementation and
Evaluation
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A marketing plan is important in order to:
• Align all marketing activities with the firm’s
mission statement and long-term strategic
plans
• Help operators/owners to review and think
objectively through all steps in the marketing
process
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A marketing plan is important in order to:
• Assist in the budgeting process to match
resources with marketing objectives
• Create a process to monitor actual against
expected results
• Help position the firm competitively in the
marketplace
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Building blocks of a 4E-based marketing
plan:
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Components of the 4E-based strategy
formulation include:
• Mission statement
• Situation analysis
• Segmenting, marketing, and positioning
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The business mission statement should
express an organization’s:
• Purpose
• Approach to managing the business
• Primary offerings
• Target customers
• Concerns for employees and the community
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The situation analysis:
• Refers to collecting, analyzing, and interpreting
information and trends that affect the company
– An operator needs to constantly monitor these trends
and conditions to estimate how the changes may
affect the business
• Identifies current organizational strengths and
weaknesses and emerging opportunities and
threats (referred to as a SWOT analysis)
• Helps operators determine the direction of their
business, including the use of the 4Es
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For a 4E-based situation analysis
consists of:
• Internal audit of offerings
• Market trends analysis
• Market potential analysis
• Competitive analysis
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Internal audit of offerings: Evaluating the
4Ps
• Identify current strengths and weaknesses
including the 4Es offered to the customer
• Evaluate the 4Ps in conjunction with the 4Es
– 4Ps of the firm: Property, Product Presentation,
Promotions, and People
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The 4Ps: Property
• Property becomes the stage for the business,
including buildings and interiors, where
customers interact with goods or partake of a
service
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The 4Ps: Property
• Property = relatively permanent (i.e., physical
and time-wise permanence) business assets
such as:
– Architectural design elements
– Interior design elements
– Landscape design elements
– Business name or location signage
– Artwork
– Business vehicles
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The 4Ps: Product Presentation
• Product Presentation elements enrich the
experience for the customer, and goods and
services are enhanced through sensory
elements (e.g., music, scent) and physical
elements (e.g., display units, props)
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The 4Ps: Product Presentation
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Product Presentation = easily changeable elements of the
setting that surround and enhance goods or services including
– Display units and props
– Product labels
– Product samples
– ‘In-store’ signage
– Presentation materials, such as:
• Packaging, wrapping paper for retail products
• Tableware, table linens, menus for food service
• Bedding and linens for B&Bs
– Music
– Scents and tastes
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The 4 Ps: Promotions
• Promotions announce and emphasize the experiential aspects
of the business
• Promotions = informational outlets and activities for
publicizing/promoting the business offering or name including
– Advertisements
– Brochures or catalogs
– Banners
– Newsletters
– Stationary and business cards
– Press releases
– Public relations and special events
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The 4Ps: People
• People refers to the interaction of the customer with the
staff, which has a potential to create experiential offerings
for the business
• People = qualities of staff and/or customers that affect
customer experience including
– Physical appearance, such as:
• Staff uniforms or costumes
• Hairstyles and grooming
– Interpersonal behavior, such as:
• Warmth, humor, interpersonal communication skills
• Displaying or sharing of knowledge, skills, or experiences
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Market trends are identified by analyzing:
• Customer behavior trends and preference for
the key business offerings (e.g., 4Es) of the
business
• Trends among business competitors: emerging
new competitors, modifications of offerings by
key competitors, and new product
developments
• Industry trends: industry standards of offerings,
general direction of industry movement, and
other changes within the industry
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Information on trends obtained from:
• Chambers of commerce
• Convention and visitors bureaus
• Universities
• Government agencies, such as small business
development centers
• Trade associations
• Commercial organizations, such as marketing
research firms and advertising agencies
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Market potential analysis:
• Total demand estimates for the business
offerings through a logical process
• Estimates expressed in concrete terms such as
percent, number, and dollar
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Competitive advantage analysis: SWOT
analysis
• SWOT analysis: Strengths, Weaknesses,
Opportunities, and Threats
– Strengths and Weakness of the business identified
from the internal audits
– Opportunities and Threats to the business identified
from market trends/potential and competitive
analyses
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Segmenting, targeting, and positioning:
• Market Segmenting: grouping customers based
on their common characteristics, such as needs
and preference
• Targeting: being focused on the chosen market
segments, which have been evaluated carefully
for profit potential
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Segmenting, targeting, and positioning:
• Positioning: placing a business clearly in the
minds of customers by instilling a strong, salient,
and positive image
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Positioning begins with:
• Development of a strong theme that fits
– Mission and core offerings (4Es in particular)
– Target markets’ needs and preferences
– Effective differentiation from those of competitors
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Components of the 4E strategy
implementation and evaluation:
• Setting marketing objectives and strategies
• Developing a budget and allocating resources
• Creating a marketing control plan
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Marketing objectives and strategies are:
• Achievable and realistic
• Expressed in clear numeric terms such as
dollars, percent, number, or other quantitative
measures
• Time-specific--containing a specific business
deadline for achieving the goals
• Partially achieved by adding 4E strategies
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Marketing strategies:
• 4E offering strategies
• Pricing strategies
• Advertising strategies
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What are 4E offering strategies?
• Encompassing tangible goods, instrumental services,
and the 4Ps (Property, Product Presentation, Promotional
Application, and People) that contribute to the
experiential offering
• (Re)designing or selecting goods, services, and
experiences to better meet the needs and preferences of
the selected target market segments
• Addressing the SWOT for your organization
• Thinking about how you can specifically enhance value
for the customer through 4E aspects of your total
offerings
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Guiding principle for the 4E offering
strategy by Pine and Gilmore (1999):
• Theme the experience
• Harmonize impressions with positive cues
• Eliminate negative cues
• Mix in memorabilia
• Engage the five senses
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Pricing strategies:
• Affect the demand for a business offering and becomes
an unavoidable focus of competition
• Should be done carefully in a way to maximize profit
margin and, at the same time, minimize the customer’s
switch to competitors
• Need to include the new business offering
• Should reflect how much customers are willing to pay for
the new offerings
• Are determined by trial and error in many cases
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Advertising strategies:
• Create the customer’s initial expectations about
the company’s offerings and such expectations
bring the customer to the business
• Should best reflect the business offerings,
especially the newly added 4E elements
• Must be consistent with the positioning theme
• Must be convincing to the chosen target
customer groups
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Budget development and allocation of
resources:
• Should be as detailed and realistic as possible
• Must provide information on costs of materials
at the unit level of materials planned for
improvements
• Needs to include the advertising budget in the
final marketing budget
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The marketing control plan:
• Provides a roadmap for proposed marketing actions
• The operator must develop a “master” chart that shows
detailed time plans for implementing the suggested
actions from above, and should include:
– Each proposed marketing action’s implementation
– Time sequence and time frame of each action
implementation
– Plans to check the progress and measure the major
implementation outcomes
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