2FE054 Experience Economy
Terms in this set (60)
No differentiation, margins fall through the floor; customers buy solely on the basis of price. The greatest force of commoditization is the Internet; it eliminates much of the human element in traditional buying and selling. It enables instant price comparisons and helps customers save time and money.
Companies, such as Dell, generally sidesteps retailers, distributors and agents to connect directly to the end consumer. A result is decreased employment in these intermediaries.
The forth level of value (commodity, goods, service and experience), here the company has established a distinctive experience that increases its value (and therefor its price) by two orders of magnitude over the original commodity. Compare a coffee bean (commodity) and a (expensive) cup of coffee at Starbucks
True commodities are materials extracted from the natural world: animal, mineral, vegetable. The company normally process or refine it to yield certain characteristics and then store it in bulk before transporting it to a market. A commodity is fungible - they are what they are and therefore interchangeable. They cannot be differentiated.
Using commodities are raw materials, companies make and then inventory goods - tangible items sold to largely anonymous customers who buy them.
Intangible activities customized to the individual request of known clients. Service providers use goods to perform operations on a particular client (eg. hairdresser). Clients generally value the benefits of the services more highly than the goods required to provide them.
Focus used to be on the good itself, what it does, if you shift the focus to the using you get the so-called ing experiences ex. canyoing (bodysurfing in rapid streams). Using this you are inging your things. The purpose of inging anything is to shift the attention from the underlying goods to an experience wrapped around these original offerings.
Explicitly design goods to enhance the users experience.
Experience supporting insights are enabled by sensorializin the goods. This is the most straightforward way to make a good more experiential - by adding elements that enhance the customers sensory interaction with them. Ways of doing this is forming a goods club, make some goods scarce and/or staging goods events. Another way is creating a themepark, ex. legoland.
The first principle of experience staging
Staging-compelling experiences begins with embracing an experience-directed mind-set, thinking not only about the design and production of things but also about the design and orchestration of experiences using these things. Achieving this begins with thinking in terms of ing words. Consider this ing thinking the first principle of effective experience staging.
The progression of economic value
Each successive offering greatly increases in value because the buyer finds each more relevant to what he truly wants. And because companies stage many types of experiences, they easily differentiate their offerings and thereby charge a premium price based on the distinctive value provided, and not the market price of the competition.
It is not about entertaining customers, it is about engaging them.
An experience may engage guests on any number of dimensions. The most important is depicted in the axes in the figure below. The horizontal axis corresponds to the level of the guest's participation and the vertical axes describe the kind of connection, or environmental relationship, that unites customers with the event or performance. The coupling of these dimensions defines the four realms of an experience: entertainment, educational, escapist and esthetic.
Customers do not directly affect or influence the performance, e.g. symphony goers, who experience the event purely as observers or listeners.
Customers personally affect the performance or event that yields the experience. E.g. skiers, who participate in creating their own experience.
Occupying a person's attention by bringing the experience into the mind from a distance.
becoming physically (or virtually) a part of the experience itself. In other words, if the guests "go into" the experience, as when playing virtual games, then they are immersed in the experience.
The action of occupying a person's attention agreeably. Amusements like listen to music, or read for pleasure, jokes (making people smile, laugh, or otherwise enjoy themselves).
Education includes active participation of the individual. To increase our knowledge, educational events must actively engage our mind. Nowadays it has been a shift from teachers to the students, being the actives.
(Educational + Entertainment) Education is serious business, but it does not mean that educational experiences cannot be fun. Therefore this term was found to connote an experience connecting the realms of education and entertainment.
Involve much greater immersion than entertainment and educational experiences. It is the opposite of pure entertainment. Guests are completely immersed in them as actively involved participant. Escapist environments generally include artificial activities, e.g. gambling at casinos, playing computer-based games, chatting online etc. People become actors rather than just watching others.
The individuals are immersed in the event or environment but has little or no effect on it, leaving the environment (but not themselves) essentially untouched. E.g. standing on the rim of Grand Canyon. To stage compelling esthetic experiences, designers must acknowledge that any environment designed to create an experience is not real (the rainforest café, for instance, is not the rain forest). They should not try to fool their guests into believing something it is not.
Enrich the experience
Blur the boundaries between the realms, e.g. edutainment (Educational + Entertainment), the combination might hold the attention of the students.
Is the staging of rich, compelling, integrated, engaging and memorable events. These events are called experiences in this book.
A theme is what the consumers organize their impressions and experiences around. Well-orchestrated themes acts as the dominant idea which organize people, or as underlying concepts for every element in the experience. This has become as much part of doing business as product or process design.
A motif is the outward manifestation of the theme. I.e. the means through which the underlying theme can tell a story and takes its expression in the business. Is can, but does not have to, be the same as the theme.
Five principles of developing compelling and captivating themes
Alter a guest's sense of reality; Affecting the experience of space, time and matter; A cohesive, realistic whole; Create multiple places within a place; Make sure that the theme fits the character of the enterprise.
Are the 'take-aways' of the experience- what you want your customers to have topmost in their minds when they leave the experience.
Six dimensions of impressions
Time, space, technology, sophistication, authenticity and scale
Signals found in the environment or in the behaviour of workers, which create a set of impressions. They trigger an impression, which fulfils the theme in the customers mind. Must support the theme.
Are signals such as sights, smells, tastes, sounds and textures generated by things.
Are signals generated by human, people.
Is important to eliminate. It can for example be cues inconsistent with the theme, or too many cues.
Tangible artefacts bought to remember experiences? Traditionally it is post-cards or souvenirs. It can also be bough in order to show others what we have experienced and generate conversation, even envy to some extent.
The sensory stimulants that accompany an experience must support and enhance its theme. The more effectively an experience engages the senses, the more memorable it will be.
Forces the company to stage better experiences, it makes guests more rightly perceive each offering and even though it will make it harder to lure first-time guests it will easier to get them to come back.
5 kinds of admission fees
Entry fee, pre-event fee, per-period fee, access fee and membership fee.
Customer unique value
The portal through which experiences reach individual customers.
Producing in response to a particular customer desires, one way of chose from.
Design interaction with each individual provides the means for efficient, effective, as (as much as possible) effortless determination of customer needs. Different sets of varieties, some way the customer find a way that fits them, ex. It's doing only and exactly what each customer wants, when he wants it.
Equips a company to mass customize by connecting different elements.
2 ways of modularization
Modular architecture and environmental architecture.
Different approaches to designed interaction (more on a personnel basis).
Producing and distributing product choices to outlets in the hope that some customer will come along and buy them.
Measures the differences (gaps) between, what the customer expects to get - What the customer perceives he gets.
The gap between what the individual customers settles for and what each wants exactly.
The companies tries to involve customers in a relationship where they can learn from the customers purchase habits. The knowledge is then used by the company to customize the products or services and make it easier to purchase for the customer.
Learning relationships is leading to customer loyalty. It takes long time for a new service or product provider to learn what you will have. Therefore customers do not tend to switch provider if he or she likes the provider. The curve is showing; the more information the company learns about you the more loyality the customer will become.
A process by which a company interacts directly with customers to determine what they need and then produces it for them, it let customers explore ways to obtain what they desire in one dimension of the product without having to sacrifice in another dimension.
To truly differentiate themselves, business must focus first on increasing customer satisfaction, then on eliminating customer sacrifice, and finally on creating customer surprise.
What customer gets to perceive -What customer expects to get Companies embracing the 3-S model must go beyond "how we did" and "what you want" to "what you remember"
What customer does not yet know about upcoming events - What customer remembers form past surprise
Customers derive their own value. Means that firms produce a standardized product, but this product is customizable in the hands of the end-user (the customers alter the product themselves).
Firms produce a standardized physical product, but market it to different customers in unique ways. When customers sacrifice not the basis a product's functionality but based on its form (package or presented).
Providing individual customers with tailored offering without letting them know explicitly. Hence, Firms provide individual customers with unique products, without explicitly telling them that the products are customized. In this case there is a need to accurately assess customer needs. Customers see the value of the offering only through its standard representation.
The four forms of theatre
Theatre is bound on the inside by script and in the outside by performance. Each form could be either stable (changing little) or dynamic (constantly changing) which represents different parts of script and performance.
Dynamic change in performance and dynamic change in script.
Stable change in performance and stable change in script.
Stable change in performance and dynamic change in script.
Dynamic change in performance and stable change in script.
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