Understanding Business and Management Research Methods - Assignment Example

Understanding Business and Management Research Methods This paper is aimed at providing an understanding of business and management research methods in the context of specific area of research of business and management. This paper is divided into two parts. Part 1 aims at providing a critical literature review of a research paper written on experiential marketing strategy and experiential value. Part 2 aims at providing a report on experiential marketing strategy and experiential value in the context of retail sector. This report has been made after collecting and analysing primary data from the retail sector of UK and other countries of European Union. Part 1: The paper “Relationships among Experiential marketing, experiential value and customer satisfaction” written by Yi-Hua “Erin” Yuan and Chihkang “Kenny” Wu, focuses on the importance of experiential marketing in the context of the business and marketing strategy of the tourism and hospitality industry. The paper also focuses on the topic from the perspective of consumers in regard to the fact that experiential marketing relates to the process of consumers’ experience creation which includes ‘pre-purchase, moment-of-truth and post-purchase’ experiences. The paper has argued that the notion o experiential marketing is one of most important concepts of building consumers’ perceptions regarding any product or service and that is why performance of experiential marketing has been used as a tool of measuring customers’ perceptions. According to the paper, consumers measure experiential value as the level of experience that the consumer has gathered after consuming the product or service. Importance of this measurement is that it helps consumers measure the level of satisfaction from consuming the product or service and greater customer satisfaction means greater success of the business, because greater satisfaction will encourage consumers to purchase more of the product or service. The paper has argued that greater customer satisfaction leads to greater competitive advantage for organisations and businesses because it leads to greater repetitive purchasing. The concept of experiential marketing has been applied by various retailing, branding as well as event marketing businesses, but the hospitality and tourism industry did not use the concept in its marketing strategy (Andreassen and Lindestad, 1998, pp.178-179). The paper provides an empirical explanation of the compatibility of the notion of experiential marketing with the increase in customer satisfaction through greater experiential value in the tourism and hospitality industry. The basic research questions which are cited in the paper are: whether experiential marketing is capable of inducing experiential value, whether experiential marketing is capable of inducing greater consumer satisfaction and whether experiential marketing generates greater customer satisfaction. According to the paper, the results of this empirical research study will help both customers and managers. These results will help managers to understand those experiences which help consumers to gather greater satisfaction and hence these experiences can be applied by managers in order to achieve greater success of the business. These results will help consumers regarding achievement of greater consumer satisfaction after consuming products and services. These results will finally help businesses to set the environment and processes which will further raise the level of customer satisfaction and further success of the business (Yuan and Wu, 2008, pp.387-389). According to the paper economic offerings have been evolving over time through various classifications of evolution. This evolution process is comprises of requirement o commodities, processing of these commodities in the product stage, combining the tangible and intangible services which can be acquired from these commodities or products by consumers and creating the experience stage through the creation of experience economy in the final stage. This process of evolution is important because it creates customer satisfaction through the creation of experience from the consumption of the product and it helps businesses to grow and achieve success. According to this paper ‘successful businesses create repeat and loyal customers by providing unforgettable experiences’. In this context the paper has argued that creation of personal experiences is an inevitable condition for creation of competitive edge for businesses (Yelkur, 2002. P.107). According to the paper the notion of experiential marketing is highly important for the hospitality and tourism industry, because products and services of this industry are highly experiential. The paper has also argued, as various controllable and uncontrollable factors are responsible for creating complex customer experiences, therefore the creation of remarkable experiences is highly necessary for the success of the business in the tourism and hospitality industry. The paper has sited that the traditional technique of marketing and business strategies are not appropriate in the modern world which is consisted of complicated structure of markets and customer experiences. The paper has defined experiential marketing as a marketing strategy where consumers gather the experience of consuming a product or services after purchasing it from companies or brands which help raising the value of the product. The paper also argued that the notion of experiential marketing does ignore qualities and functions of a product or service; rather it enhances these concepts with greater customer satisfaction. The concept of experiential marketing will become the most dominant form of global marketing strategy in the near future creating larger expectations and perceptions of consumers regarding the quality and functioning of products and services they are purchasing (Yuan and Wu, 2008, pp.389-391). The paper has argued that the creation of experiential value is the core reason of the possible success of businesses through the implementation of experiential marketing. This value creation again depends on the experiences of the customers after consuming products or enjoying services. The paper has considered emotional features and functional features in regard to the measuring instrument of customer experience value. The paper has measured customer satisfaction and service quality to judge the importance of experience marketing in the business process under consideration. The paper has considered ‘a self-reported questionnaire’ taking into account three main variables: experiential marketing, experiential value and customer satisfaction. The paper has used data collected from a research site called Starbucks which has applied the concept of experiential marketing as their marketing strategy. The paper has used statistical analytical techniques and hypothesis testing procedures. The results of the paper suggest that ‘think perception and service quality have stronger effects than sense perception and feel perception’ and these are the most important factors for business organisation in regard to the application of experiential marketing (Yuan and Wu, 2008, pp.391-403). The basic questions of the paper have been well addressed and well answered by the writers and the notions of experiential marketing, experiential value and customer satisfaction have been related to the particular industry chosen by the writers. The strength of the paper is that it has been successful in evaluating the importance of experiential marketing in the tourism and hospitality industry and also in evaluating the process of evolution of customer satisfaction in the context of the chosen industry. Various business organisations will now be tempted to research more in the field of application of experiential marketing strategy in their business and marketing strategies. These businesses will now be able to understand the importance of customer satisfaction in the process of success of their businesses. But the main weakness of the paper is that the paper has used data collected from a specific company considering specific group of people (mainly young people and students) of a specific country (Taiwan). Hence, the collected data is not normally distributed and problems arise for testing of hypothesis. Also the results might not be valid for other countries, for other companies, for other groups of people and most importantly for other industries as well. Hence, most important recommendation for the paper can be inclusion of other industries with large number of companies and larger groups of people across the world. The paper can also be made more applicable by considering other fields of studies like customer loyalty and its relationship with experiential marketing (Yuan and Wu, 2008, pp.403-406). Part 2: Introduction and Summery: The retail industries of UK have applied the notion of experiential marketing as their major marketing strategy. Most of these companies and business organisations have used the concept successfully for gaining significant benefits from greater customer satisfaction. This paper is aimed at creating a report on the use of the experiential marketing by UK based retail companies and study whether these companies have been successfully using the concept for the betterment of the their business and overall organisational strategies (Berry et al., 2002, p.85). The report is aimed at providing a quantitative and qualitative analysis of the notion of experiential marketing by considering primary data of retail industries in UK. The report is aimed at concluding that the retail industries in UK have successfully applied the experiential marketing strategy and have acquired large benefits from this application. Summary: The paper is aimed at providing an analytical structure of the fact that experiential marketing leads to greater customer satisfaction and this greater customer satisfaction further leads to greater sale of the products for any company, for the companies which are in the retail sector in British retailing industries. The paper has considered Superdrug, one of the biggest retail companies in the country and after conducting a survey and analysis of the data acquired from that survey the paper has concluded that the greater experiential marketing has been highly beneficial for the company to obtain greater customer satisfaction which further helps in greater sales of products of the company. The research question of this paper is does the application of experiential marketing led to better customer satisfaction in the UK retail industry compared to the general selling strategy in favor of the company? Literature review: The notion of experiential marketing was ‘first introduced in the work of Pine and Gilmore on experience economy (1997) and Schmitt on experiential marketing (1999)’ (Schmitt and Rogers, 2008, p.132). The concept gained extensive attention of academic researchers and practitioners of all industries and of all companies across the world. Experiential marketing can be described as a process where the producer or the company engages individual customers to create an unforgettable event by intentionally using ‘services as stage and goods as props’ (Schmitt and Rogers, 2008, p.132). Holbrook and Hirschman’s pioneering article, published in 1982, first introduced the notion of experience into the consumption and marketing strategy of business organisations. In recent times this notion has got significant attention of large business organisations of the world and also of the consumers. The notion has created significant impacts in developing the marketing knowledge of consumers. The concept of experiential marketing is different from traditional marketing (Zhang, 2012, p.354). Traditional marketing focuses more on the functional characteristics and qualitative superiority of products and services and focuses more on the improving or developing various characteristics of products and services so that these improved characteristics can attract more and more consumers overtime and thus to affects customers’ interests to purchase the product or to enjoy the service. On the contrary, the notion of experiential marketing focuses on these developments or improvements in characteristics of products and services and also on the rational and emotional behaviours of consumers of these products or services (Berry et. al., 2002, pp.87-88). These rational and emotional things are related to the direct experience of consumers which have been acquired by them after consuming the product or enjoying the service. These emotions are related to the feelings of consumers or the level of satisfaction of consumers acquired from consumption of products or service. High and positive feelings toward further consumption of the product lead to repurchase of that product or service (Frey, 2009, p.60). Hence, business organisations need to understand the marketing mix strategies and policies which will raise the level of satisfaction of consumers, because these marketing strategies are directly or indirectly related to the development and growth of the business organisation (Sandikca and Rice, 2011, p.85). Hence, the concept of experiential marketing becomes so mush relevant in businesses (Grundey, 2008, pp.145-148). Example of experiential behaviour includes watching a programme on television and then going to participate in the programme. And the example of use of experiential marketing strategy can be application of advertisements for the purpose of attracting consumers of various generations and ages, various groups and communities, various social and cultural communities to purchase the product or service (Holtorf, 2007, p.6). The strategy of trial use of a product is an important element of the use of experiential marketing and this strategy has been used by several large and small companies of the world in modern times. These strategies include offering the product or service for free of cost to the customers with purchase of another product or service. For example, sometimes free offers are provided by many companies, including companies which sell shampoos and detergent powders (McCrindle, 2010, p.10). Sometimes these products and services are provided at complete free of costs directly by the producing companies at the shop-store of these products and services (Kotler, 1991, p.5). These products and services are presented in front of customers and they are requested to initiate trial consumption of that product or service and comment on the basis of the level of satisfaction that they have acquired after having a trial consumption of that product or service. After giving comments those consumers are tempted to purchase the product or service only if they feel satisfied with the level of satisfaction that the product or service has generated (Schmitt, 2010, p.54). Another important example of use of experiential marketing is the strategy of providing the product or service directly to the customer and delivering the product or service at his home with a guarantee of money-back policy (where the entire purchase price of the product has been returned back to the customer in case the customer feels that the product or service is not usable by the customer), which is applied by many companies across the world (Schmitt and Rogers, 2008, p.145-146). The notion of customer value and experiential value has been described as the level of satisfaction that has helped the customer to gain from the consumption of the product or service. This notion is directly related to the satisfaction of the customer from the application of the experiential marketing by companies (Passikoff, 2006, p.43). The notion of service quality is also related to the development of the strategy of experiential marketing through the evaluation of the level of customer satisfaction from the consumption of the product (Schmitt and Rogers, 2008, p.151-152). This report is aimed at providing an empirical analysis of these concepts with the application of these notions in the retail industries in UK (Babin and Darden, 2009, p.50). Methodology: The report has been prepared considering a questionnaire that is self-reported. This questionnaire has been developed in a way to consider the relationship between experiential marketing, experiential value and customer satisfaction. The five point Likert Scale has been used in the paper where 1 = extremely disagree and 5 = extremely agree. Several types of questions have been designed for the paper. The first type of question deals with the service quality of various products sold by the company. The second type of question is related to the strategy of experiential marketing adopted by the company. These questions are given in the Appendix 1. The data has been collected on Superdrug, an UK based retail and drug manufacturing company that has successfully used the concept of experiential marketing and customer satisfaction. The company has used several processes as experiential marketing campaigns providing product demonstrations all over their stores. Data have been collected from customers who experienced these product demonstrations and had or had not purchased products and services from the company (Netaji and Netaji, 2010, p.240). The customers were required to respond their level of satisfaction in a five-point of Likert-type scale, where the measurement criteria were 1 = extremely disagree, 5 = extremely agree and 2, 3 and 4 representing moderate measurements of level of satisfaction (Bagozzi and Yi, 1988, pp.82-83). Data have been collected from the customers who attended the product demonstration campaigns organised by Superdrug. These respondents are consisted of people from different generations and professions and from various social and cultural groups of UK. A large number of people have enjoyed various retail products demonstrated by the Superdrug, such as Accessorize, Fudge Urban, Colour Performances and many more. The data have been collected on the basis of the grade that each respondent gave from the trial consumption of the application of the experiential marketing strategy by the company. Most of these respondents are either short-term or long-term customers of different products and brands sold by the company. Ten fieldworkers have been trained for collecting data from respondents. They were separated into two groups of even number of members and were assigned into two different stores. They were trained to maintain consistency while asking questions to the respondents. Questionnaires were allocated at two different stores of Superdrug, one at Oxford Street, London, UK and the other at Brook Street, London, UK. Sufficient numbers of respondents have been questioned and these respondents were questioned individually by each fieldworker. A total of 40 questionnaires were collected. Only 3 unusable questionnaires have been excluded from the data entry process. Hence, a total of 37 questionnaires were actually used for the purpose of data entry and data analysis. Hence, the usable rate of questionnaires is 92.5 (Freedman, 2005, pp.15-17). Statistical analysis: The variables which are used in the analysis of the report have been described in the following table (Table 1) (Patterson and Spreng, 1997, pp.421-423): Table 1: Definition and measurements of each variable Construct Definition Measurement of variable Sense Perception Messages which are provided to customers by businesses through visual, auditory and touch stimulations Visual attention Auditory attention Easy use Feel Perception Emotional messages provided by businesses to customers, such as sincerity and care Care Emotional mood Think Perception Different strategies employed by businesses to attract customers to think about the purchase of the product or service Thinking Curiosity Customer satisfaction The emotional recognition of customers of the process of purchasing the product or service after executing the purchase and evaluation of the product or service Good choice Satisfactory service Satisfactory product Hypothesis testing: The model and hypotheses are tested simultaneously by the ‘linear structural relation analysis’ using MS Excel 2007. The variables are considered in measurement model and in structural model. The measurement model uses the latent variables in terms of observed variables and describes properties of measurement processes of these observed variables. The structural model describes the causal relationships among observed variables and also specifies quantities of unexplained variances. The basic concepts which are used in two models are sense, feel and think. The hypotheses have been set explaining that there are relationships between the independent variable and each of the dependent variables. The hypotheses which have been tested in the estimation process have assumed that these three variables have no impact on the independent variable (Freedman, 2005, pp.90-91). Results and discussions: By considering demographic profiles of each of the respondents, such as income, gender, age, occupation and education, the analysis have noted that large section of respondents are aged between 25 to 45 years and they are mostly students or professionals. The yearly average income of the respondents is £ 5, 000 to £ 10, 000 and most of the respondents possess college or university degrees (almost 79%). The demographic profile of respondents reveals that these respondents are part of middle and large income groups of UK and they are part of educated society of UK. The Measurement Model and the Structural Model: Results obtained from the measurement model are shown in Table 2. Table 2: Results obtained from statistical analysis Index Recommended level Measurement model’s results Structural model’s results Chi-square (χ2) p > 0.06 P = 0.01 p = 0.02 Index for Adjusted Goodness of Fit (AGFI) 0.90 0.94 0.97 χ2 ratio 2.76 1.79 1.82 Since the value for the χ2 is very close to unity (1), therefore the measurement model shows a good estimation of the values of the variables. The value for the AGFI for both measurement and structural models are close to unity (1), which indicates that both models are well fitted models, i.e. the values of the variables obtained in both models largely explain the variances of the variables (which are measured in both models) from their mean (central) values. The high value of AGFI indicates that the Goodness of Fit of the estimated model of the set of observations is more than 90%. This further implies that the estimated model is a good fit model. The value of χ2 ratio represents a better explanation of goodness of fits of these variables in both models. The results obtained from both models also reveal that greater customer satisfaction is related to greater purchase of products and services. This fact is revealed from greater values provided by respondents while asked on their perception about their level of satisfaction from the trial campaign and about their decision to purchase the product or service. Results have also shown that greater experiential marketing is associated with greater customer satisfaction and hence, greater application of experiential marketing helps businesses to earn greater reputation and recognition on their products and services and also to earn more profits. A similar study conducted by the company itself resulted in the fact that general product-selling strategies (which involve selling products and brands at general stores, retail shops, delivered at home etc.) are less effective in raising customer satisfaction (Superdrug: Official Experiential Supplier, n.d., p. 5). Conclusion and Recommendations: The report considered a theoretical model with empirical data regarding the relationship between experiential marketing and level of customer satisfaction in the retail industry of UK. Data have been collected on an UK based retail company, Superdrug. After applying a statistical technique of data analysis and after analysing the values of the estimates the report concludes that there is a positive relationship between the degree of application of experiential marketing by businesses and the level of customer satisfaction on the product or service consumption. This notion has been applied by Superdrug and they have found that 89% of the participants in the campaign organised by the company were agreed to purchase products from their retail stores after the trial use and 70% actually ended up with purchasing different products. In this survey it has been found out that only 10% of the total respondents have argued that general strategies are better in increasing their satisfaction and in leading to further purchase of those products and brands. The hypotheses are proven wrong and suggested that experiential marketing has significant impacts on customer satisfaction. In the campaign the company gave a demonstration on various branded products like Bourjois, Aveeno, LOréal and many more (Superdrug: official Experiential Supplier, 2009, p.1). But the point has been raised by the analysis which is, in the retail industry of UK the notion of experiential marketing has not been significantly used by all retail business organisations and hence greater customer satisfaction has not been created. The basic reason of this outcome is that retail businesses still relies heavily on other marketing strategies, such as advertising, which do not create greater customer satisfaction in modern times for the retail industry compared to the past. However, there are few drawbacks of this analysis. The analysis is largely dependent on the emotional and thinking perceptions of the respondents which are not very good process of judging behaviour of customers. Hence, several recommendations can be made on the analysis. The analysis can be made appropriate by considering actual and observable behaviour of respondents, not on perceptions and emotions. The research questions can be designed including large social groups and people from all age groups, all professions and from diversified educational levels. Recommendation has also been made on the inclusion of larger number of retail business organisations (which is the most important limitation of the report, because in this case the variables are not normally distributed), so that more accurate results can be obtained. Appendix: Questionnaire: Disclaimer: The information you provide here would be kept confidential and would solely be used for research purpose. Gender: ❑Male ❑Female Education Level: ❑Under Graduate ❑Graduate ❑Post Graduate ❑ Doctorate Profession: ______________ 1. Is experiential marketing better than strategy of selling products in general stores in increasing customer satisfaction? ❑Yes ❑ No 2. Do you feel that all retail companies need to apply the strategy of experiential marketing as their major product-selling strategy? ❑Yes ❑ No 3. Do you posses a positive emotion about the product or brand after consuming it? ❑Yes ❑ No 4. Did experiential marketing help you to increase your level of satisfaction? ❑Yes ❑ No 5. After the application of the experiential marketing strategy will you be attracted to purchase the products or brands? ❑Yes ❑ No 6. Does experiential marketing help you at all to raise their level of satisfaction? ❑Yes ❑ No 7. Do you feel that the application of experiential marketing strategy will be more suitable for Superdrug in the future in increasing customer satisfaction? ❑Yes ❑ No 8. Does quality and quantity of products and brands presented in the campaign differ from those sold at general stores and shops? ❑Yes ❑ No Please answer the following questions by marking one of the box 1 = strongly disagree and 5 = strongly agree. 1. How will you rate the quality of products that they purchased and/or used in the trial?  2. How will you rate the quality of those products which are presented at the experiential marketing campaign only?  3. What perceptions that you posses regarding the type of brands which are presented in the campaign?  4. What perceptions that you posses regarding the type of value of services provided by the company in the campaign?  5. How will you rate the level of customer satisfaction from the trial consumption of different products and brands?  6. How will you rate experiential marketing compared to general product-selling strategies?  7. How will you rate the strategy of experiential marketing aimed at increasing the level of customer satisfaction?  References 1. Andreassen, T. W., & Lindestad, B. (1998), Customer loyalty and complex services: The impact of corporate image on quality, customer satisfaction and loyalty for customers with varying degrees of service expertise, International Journal of Service Industry Management, Vol. 9, No. 1, pp.178-194 2. Babin, B. 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