1

Lesson 2.1: The 4E Strategies to Differentiate

Your Business From Competitors

Lesson 2.2: Making Offerings Memorable Through

Experience Economy Strategies

2

3

Competitive advantage is:

• A distinct combination of offerings that

customers want and only you can uniquely

provide

• What makes your business more attractive than

your competition

4

How small businesses develop competitive advantages:

• Traditional ways:

– Delivering goods to customers better, cheaper, or

faster

• Non-traditional ways:

– Enhancing customers’ experiences as a way of

creating value for them

5

Experiences as a key competitive resource for small businesses because they:

• Can be very unique

• Are hard to copy

• Are difficult for larger firms to effectively deliver

on a personal customer level

• Can be personalized and flexible

6

According to Pine & Gilmore, a “better” business means having:

• Differentiated offerings from competitors, such as experiences

• High quality goods and services

Retail

“Escapist” – Harry Potter party

Pegasus & Pendragon Books: Berkeley, CA

http://www.pegasusbookstore.com/

7

Experiential offerings can:

• Address a higher level of customer value

• Uniquely position and differentiate your small business

• Create value for your business

8

A differentiation strategy must:

• Offer a competitive advantage

• Attract customers by positioning offerings in a unique and distinctive way

• Be truly different in the eyes and mind of the customer

• Be of value to the customer

9

Diagram for creating a unique combination of offerings to achieve differentiation

Adapted from: Kotler, P. (1997). Marketing Management: Analysis, Planning, Implementation, and Control. Upper Saddle River, NJ: Prentice Hall.Pine, B.J., & Gilmore, J.H. (1999). The Experience Economy: Work is Theatre and Every Business a Stage. Boston, MA: Harvard Business School Press.

10

Using the diagram from Pine & Gilmore’s theater example:

• Consider the following:

– Goods are like props

– Services can be seen as the stage

– Personnel are the actors

– Experiences are added to each element

• All of the elements must work in coordination

with each other for the “play” to be a hit

11

When considering your differentiation strategy, you must keep in mind:

• All elements make sense and hinge on a

common theme

• How your customer experiences the theme

• All of the details that support your theme taken

into account

12

13

Making something memorable means to make a positive experience easy to recall

or remember at will

As a business owner, you should aim to make your business memorable

14

Experiences that may come to mind when you say, “I remember when….”

• Situation of personal significance such as

– Getting engaged

– Winning an award

• Rarity, surprise, or suspense such as

– Spotting a mountain lion when on a neighborhood walk

– An acrobatic circus show

15

Experiences that may come to mind when you say, “I remember when….”

• Special design or sensory features such as

– Decorations of a party or holiday

– Incredible natural beauty of nature like the colors of a setting sun

• Intensity of emotion such as

– A really scary roller coaster ride

– An exciting moment in sports

16

Memorable experiences lead to Word-of Mouth (WOM) advertising, which is:

• Positive communication by the customer to friends and relatives

• A cost effective promotional strategy

• Often referred to as “free advertising”

• Considered a more persuasive message when coming from a trusted source

• Likely to reduce perceived risk associated with patronizing a new business

17

Creating memorable experiences requires the following specific techniques:

• Repetition of information

• Personally relevant experiences

• Making sense of unexpected information

• Physical performance of an action rather than simply observing

• Multi-sensory (e.g., sight, smell, sound) experiences

• Emotionally arousing experiences

18

Memory making techniques are embedded in Pine & Gilmore’s experience economy strategies by:

• Creating a theme and harmonizing the cues around the theme reinforcing the business message

• Offering educational and escapist experiences that actively engage the customer

• Providing rich, multi-sensory settings

• Arousing customers’ emotions