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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

_____________________________

Dean, Graduate School

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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

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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

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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.

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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

Summary of Literature Findings on Multidimensional Perceived

5. Value Measurements ....................................................................................................... 49

6. Constructs and Corresponding Measurement Items .......................................................... 55

7. Demographic Profile of Respondents ............................................................................... 58

8. Principle Components Factor Analysis ............................................................................ 60

Results of Reliability on Experiential Marketing, Experiential Value,

9. and Purchase Intentions ................................................................................................... 61

10. Summary of Descriptive Statistics ................................................................................... 62

11. Correlations Among Variables ......................................................................................... 62

12. Regression Analysis Results ............................................................................................ 64

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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

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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

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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

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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. The survey measured

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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

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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

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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

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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

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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

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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

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“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

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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

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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

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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

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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

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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.

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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).

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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

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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 post-

consumption 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).

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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

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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

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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

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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

(sensing)

Customers participate in a passive

manner, absorbing the experience, i.e.

going to a show

Provide customers entertainment

opportunities outside the immediate

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)

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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).

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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.

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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.

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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).

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Table 2. SWOT Analysis

Strengths Weaknesses

Technical innovations to ease the business

process and increase hassle-free experience

for the customers

Higher brand recognition and recall makes

the company priority choice for clients

Global presence and strong brand portfolio

diversifies the revenue sources

Business model which has the potential to

dilute the brand perception and limit the

revenue growth

High leverage combined with downgrade

in rating will affect the future capital

generation and expansion projects

Weak financial performance affecting the

company‟s expansion plans

Opportunities Threats

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

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

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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

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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).

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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

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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

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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).

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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?

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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

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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:

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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

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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.

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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

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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

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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).

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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-

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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.

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Table 3. Definition and Measurements of Each Concept

Construct Definition Measurement Reference

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

Efficiency

Availability

Ease of use

Convenience

Quality

Pura (2005), Williams

& Soutar (2009),

Hsi-Jui-Wu & Liang

(2009), Keng et al

(2007)

Purchase Intentions An outcome

concerning customer

behavioral decisions

and thoughts on

whether to buy or

recommend a product

or service

Desire to visit

Desire to purchase

Intent of use

Intent to

recommend

Willingness to

purchase

Keng et al (2007),

Pura (2005), Sweeney

& Soutar (2001)

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Table 4. Strategic Experiential Modules‟ Definitions

Sense Module 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.

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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

(2001) Intrinsic value (emotional)

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

(2006) Functional value

Emotional value

Social value

Sanchez, Callarisa, Rodriquez, and

Moliner (2006) Functional value

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) Functional value

Emotional value

Social value

Yuan and Wu (2008) Emotional value

Functional value

Sandstrom, Evardsson, Kristensson,

and Magnusson (2008) Functional value

Emotional value

Okazaki (2008) Experiential value

- Intrinsic (enjoyment, aesthetics, escapism)

- Extrinsic (efficiency, economic)

- Perceived novelty

- Perceived riskiness

Williams and Soutar (2009) Functional value

Emotional value

Social value

Novelty value

Hsi-Jui Wu and Liang (2009) Experiential value (CROI, excellent service,

aesthetics, escapism)

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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.

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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.

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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.

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(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

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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,

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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)

(Schmitt, 1999)

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

(Yuan & Wu, 2008)

(Yuan & Wu, 2008)

(Yuan & Wu, 2008)

(Yuan & Wu, 2008)

(Schmitt, 1999)

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

(Pura, 2005)

(Yuan & Wu, 2008)

(Yuan & Wu, 2008)

(Yuan & Wu, 2008)

(Schmitt, 1999)

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

(Pura, 2005)

(Schmitt, 1999)

(Schmitt, 1999)

(Schmitt, 1999)

(Schmitt, 1999)

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

(Moliner et al, 2007)

(Pura, 2005)

(Pura, 2005)

(Roig et al, 2006)

(Roig et al, 2006)

(Williams & Soutar, 2009)

(Sanchez et al, 2006)

(Sanchez et al, 2006)

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Table 6 cont.

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

(Pura, 2005)

(Pura, 2005)

(Pura, 2005)

(Pura, 2005)

(Williams & Soutar, 2009)

(Williams & Soutar, 2009)

(Hsi-Jui-Wu & Liang, 2009)

(Keng et al, 2007)

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

(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%)

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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

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Table 7. Demographic Profile of Respondents

Variable Frequency %

Gender

Male 99 66

Female 51 34

Age

18-24 82 54.7

25-34 50 33.3

35-44 7 4.7

45-54 33 2

55-64 7 4.7

65 or above 1 .7

Prefer not to answer 0 0

Employment

Employed Full-Time 70 46.7

Employed Part-Time 16 10.7

Unemployed 6 4

Retired 3 2

Student 51 34

Prefer not to answer 4 2.7

Income

Under $20,000 39 26

$20,000-$29,999 16 10.7

$30,000-$39,999 18 12

$40,000-$49,999 15 10

$50,000-$69,999 6 4

$70,000-$99,999 8 5.3

$100,000-$149,999 9 6

$150,000 or more 6 4

Prefer not to answer 33 22

Education

High school or less 11 7.4

Trade or vocational school 2 1.4

Attended some college 40 27

Undergraduate college degree 55 37.2

Graduate degree 36 24.3

Prefer not to answer 4 2.7

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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

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Table 8. Principal Components Factor Analysis

Component

1 2 3

Feel Perception

This video/web feature puts me in a certain mood .770

This video/web feature shows that the company is sincere .659

Think Perception

I would view this video/web feature out of curiosity .799

This video/web feature engages my curiosity .823

This video/web feature makes me curious about the product offered .787

This video/web feature is intriguing .779

Act Perception

This video/web feature affects my ordinary behavior .843

This video/web feature motivates and inspires me .799

This video/web feature affects my physical experiences .874

This video/web feature will enrich my lifestyle and behavior .837

Emotional Value

Using this video/web feature gives me pleasure .769

Using this video/web feature makes me feel good .834

In general I feel relaxed and at ease after using this video/web feature .823

This video/web feature gives me a feeling of excitement .791

This video/web feature made me feel happy .786

Functional Value

I value the ease of using this video/web feature .765

This video/web feature provides consistent quality .678

This video/web feature provides and acceptable standard of quality .783

Purchase Intentions

I would be willing to purchase this brand‟s product .714

Based on this video/web feature the probability that I will use this brand

is high

.742

I intend to use this video/web feature in the future .707

I would recommend the brand providing this video/web feature to others .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

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Table 9. Results of Reliability on Experiential Marketing,

Experiential Value, and Purchase Intentions

Video #1 Video #2

Concept Sub concept Cronbach‟s Alpha

Experiential

Marketing

Feel perception 0.613 0.775

Think perception 0.881 0.925

Act perception 0.914 0.955

Experiential Value Emotional value 0.944 0.945

Functional value 0.846 0.840

Purchase Intentions Purchase intentions 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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Table 10. Summary of Descriptive Statistics

Video #1 Mean Scale Std.

Dev. Min Max Items N

Feel perception 4.767 7-point 1.262 1.00 7.00 2 150

Think perception 5.329 7-point 1.192 1.00 7.00 4 150

Act perception 4.122 7-point 1.538 1.00 7.00 4 150

Emotional value 4.661 7-point 1.367 1.00 7.00 5 150

Functional value 5.341 7-point 1.170 1.00 7.00 3 150

Purchase intentions 4.962 7-point 1.290 1.00 7.00 4 150

Video #2 Mean Scale Std.

Dev. Min Max Items N

Feel perception 5.279 7-point 1.321 1.00 7.00 2 149

Think perception 5.358 7-point 1.321 1.00 7.00 4 149

Act perception 4.409 7-point 1.321 1.00 7.00 4 149

Emotional value 5.109 7-point 1.321 1.67 7.00 5 149

Functional value 5.640 7-point 1.321 1.00 7.00 3 149

Purchase intentions 4.945 7-point 1.321 1.00 7.00 4 149

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.

Table 11. Correlations Among Variables

Video #1 Feel Think Act EV FV PI

Feel perception 1.00

Think perception 0.547 1.00

Act perception 0.474 0.437 1.00

Emotional value 0.575 0.626 0.726 1.00

Functional value 0.537 0.604 0.345 0.581 1.00

Purchase intentions 0.558 0.729 0.550 0.726 0.648 1.00

Video #2 Feel Think Act EV FV PI

Feel perception 1.00

Think perception 0.572 1.00

Act perception 0.451 0.575 1.00

Emotional value 0.615 0.797 0.662 1.00

Functional value 0.662 0.686 0.285 0.616 1.00

Purchase intentions 0.729 0.694 0.560 0.682 0.645 1.00

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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

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Table 12. Regression Analysis Results

Video #1

Unstandardized

coefficient

Standardized

coefficient (β) t

Significance

(one-tailed) Adj. R2

Regression 1:

Effects of

experiential

marketing on

emotional value

Constant (EV) 0.035 0.654

Main effects

H3 Feel perception 0.173 0.159 2.631 0.009

H5 Think perception 0.360 0.314 5.299 0.000

H7 Act perception 0.457 0.513 9.105 0.000

Regression 2:

Effects of

experiential

marketing on

functional value

Constant (FV) 1.719 0.414

Main effects

H4 Feel perception 0.268 0.289 3.670 0.000

H6 Think perception 0.430 0.438 5.675 0.000

H8 Act perception 0.013 0.017 0.230 0.819

Regression 3:

Effects of

experiential value

on purchase

intentions

Constant (PI) 0.632 0.598

Main effects

H9 Emotional value 0.497 0.527 8.260 0.000

H10 Functional value 0.377 0.342 5.356 0.000

Video #2

Unstandardized

coefficient

Standardized

coefficient (β) t

Significance

(one-tailed) Adj. R2

Regression 1:

Effects of

experiential

marketing on

emotional value

Constant (EV) 0.555 0.715

Main effects

H3 Feel perception 0.182 0.188 3.456 0.001

H5 Think perception 0.500 0.534 8.990 0.000

H7 Act perception 0.207 0.271 4.961 0.000

Regression 2:

Effects of

experiential

marketing on

functional value

Constant (FV) 1.712 0.610

Main effects

H4 Feel perception 0.392 0.445 6.999 0.000

H6 Think perception 0.487 0.572 8.234 0.000

H8 Act perception -0.170 -0.245 -3.831 0.000

Regression 3:

Effects of

experiential value

on purchase

intentions

Constant (PI) -0.051 0.540

Main effects

H9 Emotional value 0.500 0.459 6.491 0.000

H10 Functional value 0.433 0.362 5.111 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).

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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

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perception and think perception have the strongest influence on experiential value and

experiential value certainly influences positive purchase decisions.

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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

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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

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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.

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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.

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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

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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

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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

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evaluating act perception since in this study the relationship between act perception and

functional value was not supported in a virtual setting.

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(2010): “DATAMONITOR: Marriott International, Inc.”, Marriott International, Inc. SWOT

Analysis, (20 May 2010): 1-12.

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APPENDIX

Appendix A. Questionnaire

PAGE 1: WELCOME & INTRODUCTION

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Appendix A cont.

PAGE 2: INSTRUCTIONS

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Appendix A cont.

PAGE 3: VIDEO #1

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Appendix A cont.

PAGE 3 continued: VIDEO #1 QUESTIONS

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Appendix A cont.

PAGE 3 continued: VIDEO #1 QUESTIONS

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Appendix A cont.

PAGE 3 continued: VIDEO #1 QUESTIONS

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Appendix A cont.

PAGE 4: VIDEO #2

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Appendix A cont.

PAGE 4 continued: VIDEO #2 QUESTIONS

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Appendix A cont.

PAGE 4 continued: VIDEO #2 QUESTIONS

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Appendix A cont.

PAGE 4 continued: VIDEO #2 QUESTIONS

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Appendix A cont.

PAGE 5: DEMOGRAPHIC QUESTIONS

PAGE 6: THANK YOU

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Appendix B. Pretesting of Scales: Cronbach‟s Alpha for Scales of Measurement

Cronbach‟s Alpha

Items of Measurement Adapted from Video #1 Video #2

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)

(Schmitt, 1999)

0.766 0.821

0.937 0.742

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

(Yuan & Wu, 2008)

(Yuan & Wu, 2008)

(Yuan & Wu, 2008)

(Yuan & Wu, 2008)

(Schmitt, 1999)

0.861 0.741

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

(Pura, 2005)

(Yuan & Wu, 2008)

(Yuan & Wu, 2008)

(Yuan & Wu, 2008)

(Schmitt, 1999)

0.867 0.679

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

(Pura, 2005)

(Schmitt, 1999)

(Schmitt, 1999)

(Schmitt, 1999)

(Schmitt, 1999)

0.958 0.941

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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

(Moliner et al, 2007)

(Pura, 2005)

(Pura, 2005)

(Roig et al, 2006)

(Roig et al, 2006)

(Williams & Soutar, 2009)

(Sanchez et al, 2006)

(Sanchez et al, 2006)

0.969 0.765

0.929 0.939

0.770 0.839

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

(Pura, 2005)

(Pura, 2005)

(Pura, 2005)

(Pura, 2005)

(Williams & Soutar, 2009)

(Williams & Soutar, 2009)

(Hsi-Jui-Wu & Liang,

2009)

(Keng et al., 2007)

0.887 0.789

0.921 0.959

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

(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)

0.927 0.845

0.843 0.843