Exploring experiential marketing effect on consumer behaviour

Chinese real estate market

This study aims to explore how experiential marketing affect the consumer behaviour and consumer forget cognitive reasons (information gathering and alternatives) during the purchase process.

Introduction

According to Schmitt and Zarantonello (2013), experiential marketing has become an important component of communication strategy for organisations, which allows developing a strong brand connection with the consumer. Experiential marketing is a useful communication tool that allows targeting consumer based on the emotional as well as unique values which brand brings to their life. Moreover, it involves interaction with the customer based on the emotions and insight to connect to the brand through creating a lasting impression on the consumer to influence their decision, which translates into their purchase decision (Heinonen, Strandvik and Voima, 2015).

Schmitt, Brakus and Zarantonello (2014) explained that consumers make a purchase decision based on their feeling as well as beliefs through evaluation of product based on the hierarchy of effects. The role of experiential marketing to stimulate experience and emotions of the consumer to influence the attitude of consumer towards brand based on the experiential hierarchy and hedonic attitude during the evaluation of product and services. Therefore, experiential marketing provides opportunities to organisations to generate economic value and retain competitive advantage (Pine and Gilmore, 2016).

Rationale of study

The real estate market in China is in decline, which dropped, to five years low in 2015 and house sales has remained flat. According to national bureau of statistics (NBS) in China the sales and growth rate in Chinese real estate sector has dipped to 25 years low while sales continue to decline. Chinese economic and social value is different when to compare to western markets and thus, consumer attributes, lifestyle and purchase decision is varied. (Wang, 2009)

Therefore, the rationale of this study is to evaluate how experiential marketing strategy of real estate companies is influencing the behaviour of the Chinese consumer (Yiu, 2014).

According to Obonyo (2011), experiential marketing refers to both emotional as well as irrational side of customer behaviour to evaluate the experiences based on interaction between customer and company. Besides, experience is milestone to determine the preference of customers that affect their purchase decision. The rationale is to understand does experiential marketing affect purchase intention and does it led to irrational purchase decision based on emotion and insight on the brand (Raffelt, Schmitt and Meyer, 2016)

Aims and Objectives of Study

The aim of the study is to evaluate the impact of experiential marketing practices of Chinese real estate companies on purchase behaviour of the customer. The study will take the exploratory research approach to analyse the application of experiential marketing, which affects the emotion and consequently purchases behaviour of the customer to make irrational purchase decision rather cognitive decisions. The research question is

“How experiential marketing encourage irrational purchase behaviour of Chinese consumer in real estate market”

The specific research objectives of the study include

  • To explore the concept of experiential marketing and its value as communication tool
  • To identify the experiential marketing practices and challenges in Chinese real estate market
  • To develop understanding of the relationship between consumer purchase decision and consequences based on brand experience
  • To investigate the impact of experiential marketing practices and its impact on irrational purchase decision and behaviour

Literature review

Experiential marketing

Schmitt, Brakus and Zarantonello (2014) discussed that experiential marketing has changed the traditional brand evaluation perspective and encourage strategies to develop different meaning on customer’s mind. Traditional marketing practices have lost their power because of technological evolution and globalisation and thus, customer satisfaction and purchase behaviour are not limited to product attributes. Consequently, the focus of the marketing efforts is to meet the expectations of the customer’s through emotional, affective and social approach.

Schmitt (2016) added that experiential marketing offers new ways for the companies to create value through maximisation of holistic experience. Experiential marketing allows the customers to interact with the brand based on logic, emotion and senses to provide an opportunity to the customer to engage with the brand. The objective is to bridge the gap between customer encounter and company product offering. The evolution of social media, the internet and shorter customer attention has forced the companies to develop experiential marketing strategies and connect with customers (Tsai, 2015).

Experiential marketing – Conceptual model

Experience is an interaction between the customer and company that involves all actions and processes such as perceptual, physical and cognitive. Therefore, experience involves exploring, perceiving, comparing, remembering as well as an understanding of the factors, which contribute to customer experience and satisfaction. On the other hand, consumer behaviour is influenced by internal factors personality, demographic, attitudes, beliefs knowledge and feeling as well as external factors that are marketing mix, lifestyle and culture (Gronroos and Voima, 2015).

Raffelt, Schmitt and Meyer (2013) elaborated that customer experience is shaped up and influenced through the environment in which interaction takes place. The diagram below summarised the conceptual model of experiential marketing. The important components of the model are stimulus, the interaction between company and customer, experience and co-creation of value and believe are important foundations of experiential marketing.

The three levels of experiences are an aesthetic pleasure, emotional response and attribution of meaning. Experience influences the value creation and consequently influence purchase behaviour of the customer. In addition, at meaning customer, cognition is active and thus, emotion is an unconscious as well as the continuous process (Yiu, 2015).

conceptual model of experience marketing

Customer experience and measurement

According to Schmitt (2016) the five types of experiences relevant to marketing practices are feel, sense, think, relate and act. The feel marketing stimulates the inner feeling and emotions such as joy and pride. The sense marketing stimulates the customer senses trough touch, taste and smell. Moreover, think marketing highlight cognitive, problem-solving experience, and act marketing highlight the lifestyle as well as interaction. Finally, relate marketing enclosed experiences based on the individual needs in the social context.

In addition, the component of experiential are sensorial which includes sense and taste and aesthetic pleasure, emotional components like feeling and mood based on affective relation, a cognitive process which involves problem-solving based on product knowledge and assumption, lifestyle component which highlight personal belief and relational which is based on the relationship and social context. In addition, the brand experience scale is based on dimensions, which are holistic customers, utilitarian, action –orientated and inner-directed customers (Rawson, Duncan and Jones, 2015).

Product Experience – Type and Value

Ludden and Van Rompay (2015) explained that product value is based on the association and consistency that provide experience to customers when they encounter brand. The customer assessment of experience is based on the investment and value received from the product. The experience components highlight design, style, service, identity and ambience through the product and brand. Design shows the architecture of the experience, location shows the character of the place, service highlight attitudes of the people, and brand identity shows value, image and expectation through communication focus (Wrenn, Stevens and Loudon, 2016).

Walter, Cleff and Chu (2013) added that the three types of product experience aesthetic experience, the experience of meaning as well as emotional experience. The aesthetic approach shows the ability of the product to delight on the sense and relate to the customer. For example, the interaction of aesthetic is based visual characteristic. The experience of meaning shows that role of cognition process such as interpretation, association, personality and characteristic of the product. The emotion experience demonstrates the affective phenomena of emotional psychology of customer (Pine and Gilmore, 2015).

experiential marketing affect the consumer behaviour

Consumer behaviour and experiential approach

Fernandes (2013) elaborated that consumer behaviour is the study to understand how and why people buy or not buy the product. It enclosed the buyer decision-making process and i.e. consumer behaviour enclosed activities and processes to engage people when they are searching for a product that satisfies desires and needs of the customer. The three important component of the attitude of the customers is behaviour, affect and cognition.

Behaviour is the customer intention, affects refers the feeling of the customers belief and cognition. The important model allows understanding the customer attitude are based on the Solomon (2006) ABC model which is shown in the diagram. The model is useful to understand the relationship between the feeling, knowing and doing of the customer (Ludden and Van Rompay, 2015).

Solomon (2006) ABC model

According to Wijaya (2015) the standard hierarchy shows that consumer approach towards the product is based on problem-solving process. First consumer collection knowledge and develop the belief about the product and secondly, consumer based on an evaluation of belief forms feeling about the product. Afterwards, these feeling and attitude translate in the purchase decision and thus, standard hierarchy suggest the customer is highly involved in a purchase decision. The low involvement shows customer does not have a preference from one brand to another and evaluate the product after the purchase. The behaviour learning forms the attitude and outcome reinforce experience for the customer (experiential marketing affect the consumer behaviour ) (Fernandes, 2016).

Experiential hierarchy shows that the impact of emotional response as the centre of attitude. The customer acts based on emotional reactions. The marketing stimuli and brand communication affect the hedonic motivation of consumer and develop perception how customers feel about the product (Pine and Gilmore, 2016).

The three construct for the study are

H1: Experiential marketing stimulates emotion and affects purchase decision of the customer.

H2: The attitude of people changes through experiential marketing and brand experience evaluate the hedonic motivation of customer

H3: The purchase decision and intention are modified through experimental marketing leading irrational decision-making.

Research Methodology

According to Maxwell (2012), the three approaches to research are descriptive, exploratory and explanatory. Descriptive research allows exploring as well as explaining the problem and it is effective to explore the how and what scenario. In addition, exploratory research is useful to develop a basic understanding and investigate scenario for deeper insight. On the other hand, explanatory research is effective to connect the effect and causes to interpret meaning from the scenario.

For this study, exploratory research will be used, as it would allow developing an initial theoretical perspective on experiential marketing. The exploratory research would allow observing the effect of experiential marketing on consumer behaviour. In addition, descriptive nature is used which is useful to identify and explain the effect of experiential marketing (O’Dwyer and Bernauer, 2015).

Research strategy – descriptive case study

According to Yin (2013), the case study provides flexible research design, which allows the researcher to develop understanding through examining problem in wider perspective and retains holistic characteristics of the phenomena. The value of case study is that it allows examining the contemporary social phenomena of the social event in real life context.  The useful of case study for this study is that research question, researcher control of situation and degree of contemporary events.

The preliminary research involves descriptive phase to collect data through a survey. Moreover, there is a lack of information on the effect of experiential marketing on consumer behaviour in Chinese real estate market. The value of descriptive case study is that it allows overcoming the inconsistencies through examining situation evaluation based on literature. The descriptive case study is useful to analyse range variables, organise data and describe data (Smith, Flowers and Larkin, 2015).

Research Design – quantitative vs. qualitative approach

O’Dwyer and Bernauer (2013) explained that the quantitative approach is useful to analyse the problem through analysing numerical data and thus, provide better insight into the human attitude and behaviour. On the other hand, qualitative research is useful to analyse the social event and variables are studied through direct interaction with the subject. It is useful to examine the relationship between variables in the social construct.

For this research, the quantitative approach will be used. The data collection is based on the survey to analyse and evaluate the effect of the experiential market on the consumer behaviour and descriptive case study is useful to study the problem without changing the situation. In addition, quantitative research will be useful to evaluate the experiential marketing practices effective and examine the implicit phenomena (Denzin and Lincoln, 2015).

Primary data – Questionnaire

To collect primary data survey method will be used. According to Vogt, Gardner and Haeffele (2014), survey is useful to collect primary data from the selected population. To ensure the data reliability and validity the sample selection should be unbiased and represent a large population. The questionnaire is useful research instrument, which enlists range of questions and respondent answer.

The advantage of the questionnaire is that it is low cost and time effective method of data collection. The informed consent will be asked from the customers before data collection and survey will not collect personal data of the customers (Wrenn, Stevens and Loudon, 2016).

Data Analysis

Survey population

The population selection for this study will be based on the quota sampling. The advantage of the quota sampling is that it allows the participants from different backgrounds. This would ensure selected population represent larger population.

There will be 150 customers will be selected from three real estate companies. The three selected companies would be

  • Shui-On-Land
  • Poly real estate
  • Green town China

Groves (2014) discussed that the participants would be divided into different age groups to evaluate the impact of experiential marketing on consumer behaviour. The population would be split equally between the three company customers based on demographics. The participants of survey will be customer how reached the companies for investment decision based on through company marketing activities.

Data coding and Analysis

The collected data will be analysed and presented through SPSS by using the descriptive statistics and graphs based on inferential statistics. The data collection from survey and enter into SPSS along with codes of the variables. The important step would involve will be coding the questions and validating the response.

In addition, multivariate analysis will be performed on the data to develop understanding on the demographic, missing response and response rate of the questionnaire. In addition, excel will be used to integrate and present the diverse information. Moreover, the data reliability as well as validity will be examined through descriptive statistics (Landau and Everitt, 2014).

Conclusion

Experiential marketing is a useful communication tool that allows targeting consumer based on the emotional as well as unique values which brand brings to their life. The role of experiential marketing to stimulate experience and emotions of the consumer to influence the attitude of consumer towards brand based on the experiential hierarchy and hedonic attitude during the evaluation of product and services.

Therefore, experiential marketing has important implication in the diverse Chinese customer market. This study is aimed to explore the impact of the experiential marketing practices on consumer behaviour of the customer in the real estate market of China. To achieve the objective of study exploratory research along with quantitative approach is use.

The useful of case study for this study is that research question, researcher control of situation and degree of contemporary events. The preliminary research involves descriptive phase to collect data through a survey. The data analysis will be based on statistical analysis.

 

 

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