Transcript Lesson 1. An Introduction to Experience Economy Strategies

Developed by
Miyoung Jeong, PhD
Ann Marie Fiore, PhD
Haemoon Oh, PhD
Linda Niehm, PhD
Cheryl Hausafus, PhD
Apparel, Educational Studies, & Hospitality Management
Iowa State University
Acknowledgment – We thank the Southern Rural Development Center for funding this project.
We also thank Steve Mickelson, Extension Specialist at Iowa State University, for his review of the
project and Keila Tyner and Calista J. Yoo for their creative and technical assistance.
Table of Contents
Lesson 1. An Introduction to Experience Economy
Strategies
Lesson 2. Experience Economy Strategies Adding
Value to Rural Businesses
Lesson 3. Aligning Experience Economy Strategies of
the Business and E-commerce Website
Lesson 4. Assessing Experience Economy Strategies of
the Business
Lesson 5. Assessing Experience Economy Strategies of
the E-commerce Website
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Lesson 1.1: A Progression of Economic Value
from Commodities to Experience
Lesson 1.2: Defining the Four Experiences (4Es)
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Successful small businesses focus on
• Vision
• Innovation
• Opportunity recognition
• Passion for change
• Customer-focused strategy
– Exceptional staffing
– Extraordinary service
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Customers want value
• High quality products
• Superior customer service
• Positive, engaging, memorable experiences
– Experiential value
5
Competitive advantages of
experiential value
• Satisfies customers fully
• Builds loyal customers
• Increases customers’ willingness to pay more
• Encourages positive word-of-mouth
• Recruits new customers
• Enhances business image
• Differentiates from competitors
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Added experiential value for customers:
An example of Starbucks
• Interior Design
• Music Media Bars
– Rich warm colors
– Music heard in store
– Contemporary
furnishings
– Recommendations of
music
– Stylized graphics
– CD burned from selected
music of vast library
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Pine & Gilmore’s Progression of Value
• Sources of
economic growth
in the U.S. have
progressed from
commodities to
goods and
services, and now
to experiences
(Pine and Gilmore,
1999)
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Pine & Gilmore’s Progression of Value
• The Experience Economy reflects expansion of
customer expectations to include positive
experiences
• In addition to quality goods and superior
customer service, businesses must add value
in new ways to differentiate themselves
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Progression of Value: An Example of Corn
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Four experiences based on level and
form of customers’ involvement
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Definition of 4Es: Educational Experiences
• Increase the customer's skills and enhance
his/her knowledge through active participation in
the experience
• Applications for four different businesses
Accommodation
/ B&B
Restaurant
Retail
Rural tourism
14
Definition of 4Es: Esthetic Experiences
• Entail customer enjoyment of an enriched, unique
physical design. The customer enjoys passively
appreciating or “just being in a setting” of the
business.
• Applications for four different businesses
Accommodation
/ B&B
Restaurant
Retail
Rural tourism
15
Definition of 4Es: Escapist Experiences
• Require that the customer actively participate in
the events of a real or virtual environment. The
customer shapes or contributes to the experience,
which offers the customer a way of taking on a
new persona.
• Applications for four different businesses
Accommodation
/ B&B
Restaurant
Retail
Rural tourism
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Definition of 4Es: Entertainment Experiences
• Entail watching the activities and/or
performances of others. The customer is not
actively involved in the creation of the
entertainment, but the mind is actively engaged
during appreciation of the event
• Applications for four different businesses
Accommodation
/ B&B
Restaurant
Retail
Rural tourism
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Educational Experience: Accommodation/B&B
A B&B provides seasonal
educational experiences
about traditional
Minnesota farm life, such
as bread baking in an
outdoor oven, making
homemade applesauce,
and berry picking.
Round Barn Farm
Red Wing, MN
http://www.roundbarnfarm.co
m/attractions.htm
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Educational Experience: Restaurant
A local restaurant offers
hands-on cooking
classes, plus special
events such as wine
tasting, entertaining, and
birthday parties.
The Chopping Block
Chicago, IL
http://www.thechoppingbloc
k.net/
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Educational Experience: Retail
A fabric store sells
traditional/contemporary
quilting fabric and
supplies and teaches
quilting classes to
customers.
Cow Country Fabrics
and Quilts
Dorchester, WI
http://www.cowcountryfabri
cs.com/
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Educational Experience: Rural Tourism
A Dutch tourism attraction retail
store and factory provides an
opportunity for patrons to
observe traditional wooden shoe
carving. Visitor also can talk with
artisans as they create wooden
shoes and delftware in the old
world tradition.
Dutch Village
Holland, MI
http://www.dutchvillage.com/park/acti
vities.html
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Esthetic Experience: Accommodation/B&B
Landscape and interior
design of this B&B offer
an esthetic experience.
Beautiful B&B
Yarra Valley, Australia
http://www.worldvacationre
ntals.net/detailed/1157.html
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Esthetic Experience: Restaurant
Art-lined walls and
accent lighting create an
esthetic experience in
this otherwise
understated restaurant.
Café Des Amis Breaux
Bridge LA
http://www.roadfood.com/R
eviews/Overview.aspx?RefI
D=1900
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Esthetic Experience: Retail
The picture-perfect
exterior along with
beautiful products
displayed inside offer an
esthetic experience.
Belgique Pâtisserie &
Chocolatier Kent, CT
http://www.roadfood.com/R
eviews/Overview.aspx?RefI
D=491
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Esthetic Experience: Rural Tourism
Brilliant rivers and
mountains of orange
pumpkins of this festival
offer an esthetic
experience.
Pumpkin Festival
Half Moon Bay, CA
http://www.sfc.ucdavis.edu/
agritourism/agritour.html
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Escapist Experience: Accommodation/B&B
Murder mystery dinners held in a
B&B provide an evening of
mystery and intrigue. Each guest
plays a character and attempts to
solve the murder while being
served a delicious gourmet meal.
Maple Hill Manor, KY
http://www.bbonline.com/ky/maplehill/
murdermystery.html
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Escapist Experience: Restaurant
A family-run restaurant
offers a wide variety of
activities for its
customers, which make
them feel like rangers by
bottle-feeding cows.
Flying B Ranch, SD
http://www.flyingb.com/Calf
%20Feeding.jpg
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Escapist Experience: Retail
Bike shop customers
can try out demo
mountain bikes on the
mountain trail, thus,
escaping from their
routine life.
http://www.beautifulvista.co
m/Recent_Photos/Bike_Rid
e_Photos/Bob_Mountain_Bi
king.JPG
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Escapist Experience: Rural Tourism
A small farmhouse offers
a mini maze for little kids
to wander through
alongside a cornfield
maze adventure for
adults.
Scott’s Zellwood, FL.
http://www.scottszellwoods
weetcorn.com/cornmaze.ht
m
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Entertainment Experience: Accommodation/B&B
A B&B owner, dressed in
colonial garb, shares
recipes, cooking secrets,
and narratives from the
18th century.
Elias Child House B&B,
Woodstock, CT
http://www.bbonline.com/ct/
eliaschild/specials.html
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Entertainment Experience: Restaurant
Servers entertain
customers by singing for
their supper at a
restaurant.
Flying T Chuckwagon
Supper & Show
Rapid City, SD.
http://www.flyingt.com/
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Entertainment Experience: Retail
A boutique pet store
offers a unique private
birthday party for a pet,
with the store’s owner
providing birthday cake
and entertaining music.
Metropawlis
Milwaukee, WI
http://www.metropawlis.co
m/
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Entertainment Experience: Rural Tourism
Spectators cheer on
their favorite pig at the
World-Class Pig Races
held on a farm.
Old MacDonald’s Farm,
SD
http://www.oldmacsfarm.bla
ckhills.com/Info/pr0402.jpg
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