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Experience as a Marketing Tools: A Distinct Thinking under Developing Country’s Consumers’ Perspective



Muhammad Sabbir Rahman, Abdul Highe Khan, Masum Murtaza, Md. Mahmudul Haque and Bashir Hussain
 
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ABSTRACT

Studies have revealed that a customer’s satisfaction is always the result of ultimate goal of Marketing. In response, this research goes beyond that and propose the mediating effects of information technology; customer’s satisfaction and physical context between interpersonal relationships, firm’s commitment and brand image with experience marketing as a tool to satisfy customers’. This research applied exploratory factor analysis, confirmatory factor analysis and structural equation modeling to investigate the experience marketing concept towards service providers within the context of Bangladeshi consumers. The findings revealed that there is a strong relationship between interpersonal relationships and experience marketing when implementation of information and technology (IT) plays as a mediating role. This research opens up opportunities for managers to identify significant factors which are linked towards building experience marketing as tool to satisfy customers’. The main contribution of this research lies in testing the mediating effect and fills a major gap in the marketing literature and research in stressing the need to rethink about experience marketing concept.

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  How to cite this article:

Muhammad Sabbir Rahman, Abdul Highe Khan, Masum Murtaza, Md. Mahmudul Haque and Bashir Hussain, 2012. Experience as a Marketing Tools: A Distinct Thinking under Developing Country’s Consumers’ Perspective. Journal of Applied Sciences, 12: 2295-2303.

DOI: 10.3923/jas.2012.2295.2303

URL: https://scialert.net/abstract/?doi=jas.2012.2295.2303
 
Received: September 17, 2012; Accepted: November 22, 2012; Published: December 28, 2012



INTRODUCTION

English dictionaries use various words that characterize the term “experience” which means an “event”, a “process”, a “phenomenon”, or a “change” (Oxford Dictionaries, 2003; Webster’s Dictionary, 2001). According to Helkkula (2011), an experience can be an individual, a community, a nation, or even humankind as a whole. In fact experience can be “real” and physical, or “virtual” and observed or perhaps a holistic phenomenon that combines both “real” and “virtual” elements by the marketers. Mitchell defines experience marketing as a new idea that changes the way marketers think about their brands. He also argued that marketers saw experience as a mean to an end in a better way to sell a product or service (Mitchell, 1998). Pine and Gilmore (1997, 2001) argued that goods and services were no longer enough to compete in today’s increasingly commoditized world and companies had to move beyond goods and services to stage experiences and guide transformations.

Apparently, consumers are not content to merely shop or consume anymore, so the smart businessmen must also give them experience so that they can retain their current consumers. For instance, if a consumer is traveling, smart flight attendants make their journey more memorable through experience. Even in banking services, smart tellers make customers’ dealings memorable. In fact, in any service or product-base firm where customer-employee interaction is essential, smart business people employ surprise element to turn mundane services into truly memorable events (Mitchell, 1998; Pine and Gilmore, 1997).

In spite of having large amount of consumers in Bangladesh up to now not a single study on experience marketing has been done. Thus, there is an urgent need for high-quality of empirical research on experience marketing to assist the local and multinational companies in Bangladesh. This study has not only revealed the significant factors that are linked with experience marketing but also it provides a greater degree of guidelines for the academicians and managers in developing better marketing strategies for the service oriented companies.

CONCEPTUAL FRAMEWORK DEVELOPMENT

Interpersonal relationship: Beatty et al. (1996) defined interpersonal relationships as the degree to which personal relationships exist between service personnel and customers. Research in marketing demonstrates that interpersonal relationships can play an important role for the formation of bonds with customers and the company that ultimately influence the positive word-of-mouth (Gutek et al., 1999; Price and Arnould, 1999; Gremler et al., 2001; Patterson and Smith, 2003; Gwinner et al., 1998). For instance even though the satisfaction with the current products or services may be low, customers may remain with a provider due to the interpersonal relationships (Bejou and Palmer, 1998; Wu, 2011). According to Wu (2011) interpersonal relationships exists through social interaction between customers and service personnel. Several researchers conclude that consumers or customers experience includes every point of contact at which the customer interacts with the business, product or service (Grewal et al., 2009; Verhoef et al., 2002). On the other hand, Meyer and Schwager (2007) consider it to be both an internal and subjective responses that consumers have to any direct or indirect contact with a company. They claim that direct contact generally occurs in the course of purchase, use and service and is usually initiated by the consumer. In addition, indirect contact involved unplanned encounters with representations of the company’s brand, products or services in the form of promotional elements such as personal recommendations, advertising, public relations, news reports, reviews. Strong interpersonal relationships may help service providers overcome temporal and short-term fluctuations in their service quality (Jones et al., 2000).

Implementation of information technology (IT): Due to the growing technological sophistication in the global marketplaces most of the companies have used information technology to enhance the experience with their customers (Olaisen and Revang, 1991; Dawes and Rowley, 1998). The adoption of information technology in products or service experience may help firms to be closer to their current and potential customers. That is why Dawes and Rowley (1998) argued that the use of technologies in delivery of product or service by the firms is growing. To explain, Dawes and Rowley (1998) in their research describe the “servuction” system which was developed by Langeard et al. (1981). This model describes back and front-office activities such as the development of automated service through ATMs. Customer-firm relationships through the usage of e-service make a substantial impact on experience marketing (Mills et al., 1983; Langeard et al., 1981; Etgar, 2008). On the other hand, technology is deeply embedded in user experience. McCarthy and Wright (2004) categorized this experience into four perspectives as creative, open, relational and as participating in felt experience. Thus, based on the above discussed literature review, it is hypothesized that:

H1:There is a strong relationship between interpersonal relationships towards implementation of experience marketing where enhancement of Information technology by the firms play as a mediating role

Brand image and experience marketing: Brand identity can be defined as a unique set of brand associations (value-proposition; emotional or self-expressive) that a firm can create or maintain. The association can be tangible or emotional or symbolic or both (Hulten, 2011; Aselm and Kostelijk, 2008). Numerous researchers also agree that there is an emotional linkage between a brand and customer and that is why it is very important to establish a strong brand (Brembeck and Ekstrom, 2004; Ratneshwar and Mick, 2005). According to Hulten (2011), from emotional perspective, most of the enterprises are focusing more on tangibles rather than intangibles things. However, the environmental context of a firm where service encounter takes place is significant in creating emotional connections (Hulten, 2011). This includes the physical and relational characteristics (Gupta and Vajic, 1999). In the physical context example of stimulators are created by the sights, sounds, textures and smells of the environment and in the relational context, stimulators emanate from people and their behavior (Carbone and Haeckel, 1994). Even though in brand and customers experience context little attention has been given to understand the creation of a brand as an image (Payne et al., 2009). Thus based on the above literature it is hypothesized that:

H2:There is a strong relationship between brand images towards implementation of experience marketing where enhancement of physical context play as a mediating role

Firm’s commitment and experience marketing: Numerous researchers refer commitment as a valued relationship with maximum effort being expanded and as a result there will be sustainable forward-looking by both party in future (Moorman et al., 1992; Morgan and Hunt, 1994; Gustafsson et al., 2005).

Image for - Experience as a Marketing Tools: A Distinct Thinking under Developing Country’s Consumers’ 
  Perspective
Fig. 1: Conceptual framework of this research

In marketing literature, commitment has two distinct nature; affective and calculative (Bansal et al., 2004; Gundlach et al., 1995). According to Gundlach et al. (1995) affective commitment focuses on psychological attachment to a service provider. On the other hand, calculative commitment emphasizes on switching costs (Gundlach et al., 1995). Previous literature also suggested that a firm’s commitment has a huge effect on building experience marketing in various ways. For instance: loyalty dimensions repurchase intentions by the customers, customer retention, word-of-mouth, share-of-wallet and expansion and enhancement of the relationship (Bendapudi and Berry, 1997; Brown et al., 2005; Gundlach et al., 1995; Morgan and Hunt, 1994; Sheth and Parvatiyar, 1995; Verhoef et al., 2002). As a whole, past research also proposed that customers are considered as being committed to a provider when they like the provider (Fullerton, 2005). Thus, utilizing commitment by a firm can make a significance role in building experience marketing into the mind of the customers.

Thus, based on the above literature it is hypothesized that:

H3: There is a strong relationship between a firm’s commitments towards implementation of experience marketing where customer’s satisfaction play as a mediating role

There are divergent views of the concept of marketing from various scholars. Indeed, no systematic review of the literature on the concept of experience marketing has yet been published under a developing country consumers’ perspective. In Bangladesh, till today none of the articles have stated the concept of experience marketing and none mentioned the factors that could potentially affect the experience marketing. The entire research rests on the basis of the theoretical framework. Based on the previous literature reviews; this research concentrates on conceptual framework of factors that help. The detailed diagram framework is given below through Fig. 1.

MATERIALS AND METHODS

This study has designed a research methodology to test experience marketing construct that was developed and defined earlier in the conceptual formation phase. The primary objective of this research is to highlight some critical factors that are essential for the implementation of experience marketing by the firms under the Bangladeshi customers’ perspective. This study also identified and validated the dimensionality of the experience marketing concept. To accomplish this goal, this study employed a four-step methodology. First, from a review various scholars’ articles, this research generated 35 items in the questionnaire which was tested through following the face validity. However, each variable consists of five items that were measured with each latent variable (Interpersonal Relationship; Firm’s Commitment; Brand Image; Implementation of IT; Customer’s Satisfaction; Physical Context; Implementation of Experience Marketing). This study also conducted a pilot study with 50 respondents from Dhaka, the capital city of Bangladesh. Based on the results from the pilot study, researchers made some minor amendments in the instrument. In the third step, this research employed a survey via convenient sampling procedure by using shopping mall intercept from significant places in Dhaka. In addition, each of the named items was measured using a seven-point rating scale (1 = strongly disagree; 2 = moderately disagree; 3 = slightly disagree; 4 = neutral; 5 = slightly agree; 6 = moderately agree and 7 = strongly agree). A total of 650 individuals responded and their responses were collected through the mall intercept of various categories of consumers for instance consumer of electronics, hairdressing and beauty salons, restaurants and financial investment services. After examining the questionnaires, this research kept only those instruments that were fully completed by the respondents. For the successful completion of this research this study has deleted 50 instruments and has kept 600 instruments for further analysis.

DATA ANALYSIS PROCEDURE

Data was coded and analyzed by using the Statistical Packages for Social Sciences and AMOS software. The data analysis of this study was organized into four stages by using the descriptive, exploratory factor analysis, confirmatory factor analysis and structural equation modeling techniques. The first stage of the data analysis used means, frequency, and percentages to represent the respondent’s overall demographic profile. The second stage of the data analysis used the Exploratory Factor Analysis (EFA) to identify the factor structure and check the validity and the reliability of the scale. The decision was to consider a factor as significant was identified by a factor loading greater than 0.5 and an eigenvalue equal to or greater than 1. Cronbach’s alpha coefficient was used to test the reliability of the scale. In the third phase of the data analysis, this research employed confirmatory factor analysis and structural equation modeling to test the hypothesis. There are a number of fit indices that have developed by the researcher to evaluate the model fit. This research used chi-square statistic/degree of freedom as well as model fit indices such as comparative fit index (Bentler, 1990), non-normed fit index (Bentler and Bonett, 1980; Tucker and Lewis, 1973) and root-mean-square residual (Hancock and Freeman, 2001) were examined to evaluate the adequate fit of models. Hu and Bentler (1999) and Kline (1998) highlighted that χ2/df less than 3 is considered a good fit. For CFI and NNFI, values should be closer to one be considered a good fit. A value of less than 0.5 for RMSEA indicates good fit.

ANALYSIS OF DATA

Descriptive analysis results of survey and respondent’s profile: Initially seven hundred questionnaires were distributed to the prospective respondents under various age categories at different shopping malls in Dhaka city are for example Mirpur, Muhammdpur, Uttara, Gulshan and Baridhara (N = 700). A total of 650 questionnaires were collected. This yielded a 92% raw response rate. Among the 650 respondents, 50 did not fill out the questionnaires completely. This result yielded 600 usable questionnaires which resulted in an 85% adjusted response rate. Among the 600 respondents investigated in this study, there were more male respondents (60.0%) than female respondents (40.0%). Out of 600 respondents significant numbers of respondents were living in Mirpur and Baridhara followed by Uttara and Gulshan in Dhaka city. The majority of respondents were male. Respondents were between 20 to 29 years old (70%) and the second largest were between 30 to 39 years old (25%). From the above information, it is quite clear that most of the respondents of this survey were from the age group of 20 to 29 years old. Most of the respondents of the survey worked at service-oriented company (50%), whereas 30% of the respondents worked at manufacturing-oriented companies and only 20% of the respondents at education-related organizations. Out of 600 respondents, 50% reported incomes of US $ 750 per month or more compared to 50% of respondents with incomes less than US$ 500 per month. In addition, 80% of the sample reported that they cared for companies that provide them good experience whereas 20% of the respondents were not even aware about experience marketing. However, the results of this research also indicated that consumers who purchased electronics goods can viewed as interpersonal relationship and firm’s commitment with high rate (6.07) and (6.01). In hairdressing and beauty salons most of the respondents were given highest weight on customer satisfaction and physical context scale among theses the first one was a relatively high mean score (6.02) and the second was (6.01). Most of the respondents of bank consumers were given highest weight on interpersonal relationship with mean 6.08 followed by implementation of IT 6.05. In addition most of the respondents of restaurant’s customers were given highest weight on interpersonal relationship with mean 6.02 followed by physical context 6.01.

Reliability analysis results for all the attributes of the questionnaire: The internal consistency of the instrument was assessed by using the Cronbach’s alpha. The Cronbach’s alpha for the overall scale (35 items) were 0.812 which reflected that the overall items of the instruments were in an acceptable range. This means that the stability and consistency of the items in the instruments were well enough that lead researchers to move ahead for other statistical test.

Exploratory factor analysis (EFA): To assess the validity and reliability of each construct, factor analysis and reliability testing were used. After factor analysis using the varimax rotation in Interpersonal Relationship (4); Firm’s Commitment (4); Brand Image (4); Implementation of IT (4); Customer’s Satisfaction (4); Physical Context (4), 30 items were kept. To test the appropriateness of factor analysis, the Kaiser-Meyer-Olkin (KMO) overall measure of sampling adequacy (MSA) was calculated as 0.907 (Table 1) which is meritorious (Kaiser, 1974). In addition, the communalities range from 0.55 to 0.93 with an average value above 0.71, suggesting that the variance of the original values were fairly explained by the common factors.

Table 1: KMO and Bartlett's test
Image for - Experience as a Marketing Tools: A Distinct Thinking under Developing Country’s Consumers’ 
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Table 2: Summary of exploratory factor analysis
Image for - Experience as a Marketing Tools: A Distinct Thinking under Developing Country’s Consumers’ 
  Perspective
EV: Eigenvalue, PV: Percent of variance, CV: Cumulative variance

Then Bartlett’s Test of Sphericity was conducted, yielding a significant Chi-Square value in order to test the significance of the correlation matrix (χ2 = 7021.970, df = 990, Sig. = %.000). Both tests indicated that factor analysis was appropriate for this study (Hair et al., 1998). Six stable factors were derived from the analysis. The contents of the six factor dimensions were analyzed and named as follows (Table 2).

Validity measurement: In this research, content validity deals with “how representative and comprehensive the items were in creating by the scale” (Bohrnstedt, 1970). This research assessed them by examining the process by which scale items were generated (Straub, 1989). In this study, definitions of the constructs were proposed based on the literature review. In the SEM (Structural Equation Method) method, construct validity was viewed as hypothesis testing in which specific relations were posited and tested which were applied in this study (Hoyle and Smith, 1994). In order to demonstrate convergent validity, items that measure the same trait should correlate highly with one another if they are valid measures of the concept. From the results of correlation analysis this research has also validated the convergent validity. On the other hand, discriminant validity is the degree to which measures of different concepts are distinct: if two or more concepts are unique, then measures of each should not correlate well. For the analysis, a first order CFA was employed in this research. To validate the results of the factor analysis, Bartlett’s test of sphericity and Kaiser Meyer-Olkin measure of sampling adequacy (Kaiser’s MSA) were used. The value of Kaiser’s MSA was recommended 0.60 and above (Hair et al., 1995; Tabachnick and Fidell, 2001). To make composite measures of the constructs, the summated mean scales were calculated in this research (Hair et al., 1998). Criterion validity was assessed by correlation analysis in this study with the summated mean scales of the constructs. The matrix from the correlation test of the variables indicates significant inter-correlations among the entire construct.

Confirmatory factor analysis (CFA): To confirm the factor, this research also conducted confirmatory factor analysis. Overall, the fit indices were generally improved from the default to revised model after certain adjustment on the variables (For Instance: Interpersonal Relationship and Firm’s Commitment) by inspecting the modification indices result. Results from the CFA using AMOS software were summarized in Table 3. The fit indices demonstrated good fit of the measurement models to the data.

Table 3: Confirmatory factor analysis using AMOS
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GFI: Goodness of Fit Index, AGFI: Adjusted goodness-of-fit index, RMSEA: Root mean square error of approximation, CFI: Comparative fit index, NFI: Normed fit index

Image for - Experience as a Marketing Tools: A Distinct Thinking under Developing Country’s Consumers’ 
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Fig. 2: Hypothesized model of relationships among key variables IR: Interpersonal relationship, FC : Firms commitment, BI: Brand Image, IT: Implementation of IT, CS: Customers satisfaction, PC: Physical context, EM: Experience marketing

The full model was tested based on the measurement model previously validated from CFA in the study (Fig. 2). The fit indices of the full model were χ2/df = 2.708 (χ2 = 3678.133, df = 1358); GFI = .961; AGFI = .955; RMSEA = .041; CFI = .923; NFI = .934. Although a relative χ2 statistics (χ2/df = 2.708) indicated a good fit, other indices were at the lower end of acceptable ranges to indicate a good model fit.

HYPOTHESIS TESTING

To assess the mediating effects on implementation of experience marketing under the customers’ perspective this research has examined the predictive validity of the hypothesized model using decomposition of effects through Mplus. As predicted it was observed that there was a strong relationship between interpersonal relationships towards implementation of experience marketing where enhancement of Information technology played a mediating role which supported H1 (Table 4).

Table 4: The estimates of the mentioned variable
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On the other hand, the statistical result also reflected that there existed a significant relationship between brand images towards implementation of experience marketing where enhancement of physical context played a mediating role supporting H2. The results also showed that there is a relationship between firm’s commitment towards implementation of experience marketing when customers’ satisfactions play as a mediating role supporting nearly H3 (Table 4).

CONCLUSIONS AND MANAGERIAL IMPLICATION

The motivation of this study is to provide an insight view of factors that are significant for experience marketing under the developing countries consumers’ perspectives. The study used the mediating role for the first in time (Implementation of Information Technology; Customers satisfaction and Physical context) in between interpersonal relationship; firm’s commitment and brand image. Then this research demonstrates the use of the SEM approach as a powerful tool to clarify the causal relationships between these latent and observed factors. The new contributions of this paper are to improve the understanding of those six salient interrelated clusters that affect experience marketing. Based on the data analysis, this research strongly confirms that all three hypotheses were accepted. More precisely, the findings suggested that there is a strong relationship between Interpersonal Relationships (IR) with Experience Marketing (EM) when implementation of IT (IT) plays as a mediating role. This study also confirms that there is a significant relationship between Brand Images (BI) towards experience marketing (EM) when physical context of a firm (PC) plays a mediating role. Besides that, the result also confirms that a firm’s commitment (FC) has moderate relationship with experience marketing (EM) when customer’s satisfaction plays a mediating role. Notably, few companies in Bangladesh have adopted the idea of staging experiences in their business approaches. If firms know the efficacy of staging experiences, they will, in future, consider this as a competitive advantage. The results of this study have important contributions for marketing manager. It is evident that staging experience can act as a source of core competency for a business in strengthening its brand recognition, building company image, and providing unique feature to the consumers in the bundle of offering. This research has compiled some guidelines for the business managers to help them in staging experiences successfully. Managers are suggested to develop a more ‘personal’ and unique one-on-one connection with customers. For example: Be imaginative: customers reward those brands that are more ‘imaginative’. Marketing managers may be encouraging consumers to think, feel and do after the event; managers need to make a brand as deeply ‘relevant’ to the customer at staging as possible. In this competitive world, ‘memorable’ events in turn become the stories that customers pass on to others. In designing different stage theaters or decorating buildings and surroundings business managers desire to create a never forgotten brand moment. They can use ‘simplicity’ at the heart of customer experiences or make them simple to communicate, simple to understand, simple to use, simple to enjoy and simple to recall.

LIMITATIONS AND DIRECTIONS FOR FUTURE RESEARCH

This study has several limitations. The most significant of which is the cross-sectional and self-reported data. The use of such data may have led to the overestimation of the relationships. Secondly, this study took place within a specific geographic area (Dhaka city). As a result, the findings of this study may not be generalized to other countries. For this reason, future research should aim to obtain larger sample size in other countries to reach comparative results. Future work can integrate other variables such as service quality, corporate image and consumer’s perception to broaden the taxonomy of experience marketing on various dimensions under an experience group of consumers represented by grocery stores customers, tourism customer’s; telecommunications consumers and medical care consumers.

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