Relationship between Experiential Marketing and Customer Satisfaction in the Retail Sector

Introduction

Currently, we live immersed in a highly competitive market, where it is increasingly difficult to position a brand. The expansion of communications and the access to large volumes of information by consumers require that organizations develop the capacity to compete successfully in the markets, with special emphasis on the direction of their marketing strategies and internal actions that are generated upon contact with customers (Ridwan et al., 2021; Yeh et al., 2019). Attracting new prospects and giving continuity to the consumption of current customers is considered one of the most relevant and common marketing objectives for most companies. It is suggested that to achieve this personalized and unforgettable experiences must be provided. (Pine and Gilmore, 1998; Yeh et al., 2019). Experiential marketing is emerging as an option to dazzle customers and impact their satisfaction; its application is becoming more and more relevant and frequent among marketing specialists (Huang and Zhang, 2010; Söderlund, 2018). Experiential marketing is shown as a strategy that could deal with the competitive challenges faced by the organizations, successfully meeting the needs of a highly informed and unpredictable market (Hansemark and Albinsson, 2004; Huang and Zhang, 2010; Yeh et al., 2019).

The current dynamics of communications has led markets to be invaded by very similar business offers; competition has proliferated. In addition, there is an information overload impacting consumers, increasing their level of resistance to the different efforts made by marketers, especially against traditional marketing strategies. In this scenario, it is essential to determine which marketing strategies have an impact on customer satisfaction and, therefore, on the purchase intent (Berčík et al., 2021; Tapia and Martín, 2017). Organizations have detected the opportunity represented by promoting the experience economy, which proposes the reduction of the functional value of products and the valuation of pleasures based on lived experiences (Jiménez and Campo, 2016).

The retail sector is in constant growth and is considered one of the areas that invests the most in new marketing strategies, given that it includes a large number of brands that rely on the strength and commercial strategies it can offer (Lenderman and Sanchez, 2008). In the retail sector, customer needs and satisfaction are highly relevant. They are the promoters of change processes (Pantano, 2018). The retail sector has assumed a leading role in the Peruvian economy since 2000, taking off with sustained growth rates; it expanded to other provinces, which was a reflection of the growth dynamics at the Latin American and World level. The retail business represents 10.7% of Peru’s GDP. In that sense, it is the fourth most important sector in the country (Peru Retail, 2019). Achieving customer satisfaction is considered a critical aspect, especially in such a competitive context where the dynamics of the sector focuses on satisfying the needs and desires of customers, especially when it is known that customer satisfaction plays an important role in customer loyalty and profitability (Yuan and Wu, 2008).

Because of the above, it is necessary to deepen the understanding of customers in the sector, analyzing the impact of new marketing strategies, and determine the effect of experiential marketing and the value of the experience on customer satisfaction (Lin, 2019; Alkilani et al., 2012).

Experiential marketing and its importance for organizations:

The conceptualization of experiential marketing began when the consumer paradigm “the experience economy” was addressed, stating that businesses should rethink their commercial strategies, assuming that the main component providing value had evolved from being the product and service itself to being the experience, focused on the generation of sensations (Hernández et al., 2020; Pine and Gilmore, 1998). This was proposed as a disruptive concept that, in contrast to traditional marketing, focuses on promoting positive customer experiences, which generates a link between the brand of the offering company and the customer’s perception, managing to personalize and internalize the moment experienced. (Garcillán, 2015). In other words, experiences incorporate sensory, emotional, cognitive, and relationship components into the value offer which considerably increases the value provided by the functionality of the product (Garay and Saratxaga, 2013; Hernández et al., 2020; Schmitt, 2000; Zarantonello). From the customers’ point of view, it was demonstrated that experiential marketing generates brand recognition and could be applied in management as a marketing tactic that highlights all the stimuli, in the stages of pre-purchase, purchase, and post-purchase (Schmitt, 1999).

Experiential marketing is proposed as the result of exposing consumers to a series of stimuli, generated by observation or participation in a consumption event, encouraging consumption behaviors that increase the value of the product or services (Agrawal et al., 2015). Budovich (2019) states that a pleasant experience is consolidated as knowledge and internalized by the customer. This inference would be relevant to establishing correct communication mechanisms between the company and consumers. Furthermore, it is said that customer purchase intentions go through a decision process that contemplates the evaluation of the rational and emotional field. Consequently, the process of offer selection by the customer does not focus exclusively on its functional characteristic but also contemplates predominantly the positive experience generated by knowing it, acquiring it, or consuming it (Jiménez and Campo, 2016; Zarantonello).

It is proposed that the experiential marketing construct is based on strategic experiential modules. The following are highlighted: Sensations, Feelings, Thoughts, Actions, and Relationships (Schmitt, 1999). The analysis of these modules would allow marketers to design different experiences, seeking to enhance their commercial results (Alkilani, 2013). These modules correspond to the dimensions that make up the Experiential Marketing construct (Alkilani, 2013; Budovich, 2019; Brakus et al.,2009; Castañeda et al., 2017; Lin, 2019).

• The sensory dimension or sensation marketing involves the generation of experiences in response to commercial stimuli that impact sight, hearing, smell, taste, and touch (Garcillán, 2015; Jiménez and Campo, 2016; Lin 2019). It can be used to differentiate offers that functionally might be quite similar. In addition, it is indicated that the sensory experience allows merging in the consumer the emotional and the rational aspects to form an image of the brand (Alkilani et al., 2013; Vargo and Lusch, 2004).
• The emotional dimension is composed of strategies that produce experiences for consumers that awaken emotions in line with the brand concept, adding value to the products. The marketing of feelings or affective dimension is generated when an experience stimulates a positive mood or even strong emotions of satisfaction, generating an emotional bond with the customer (Alkilani et al., 2013; Brakus et al., 2009; Lin, 2019).
• The intellectual dimension or thinking experience appeals to the intelligence, seeking that the customer generates cognition through creativity, i.e., the formation of stimulating mental processes (Jiménez and Campo, 2016; Lin, 2019). For Schmitt (2000), the objective of this experience is to encourage customers to think creatively about a brand, using both convergent and divergent thinking (Alkilani et al., 2013; Budovich, 2019).
• The action dimension aims to impact through experiences, integrating interaction, social and cultural meanings, lifestyles that involve being accepted by others, even to appeal to the consumer’s desire for self-improvement, changes in lifestyle in a social environment (Brakus et al., Alkilani et al., 2013; 2009; Schmitt, 2019).
• The relationship dimension incorporates the experiences generated by the social interaction that brings value to the company. Human beings inherently seek to develop in a social context; the brand must be able to relate the consumer with a much larger social system, providing him or her with the desired social recognition and sense of belonging (Smith 1999 and 2006; Budovich, 2019).

Experiential marketing has become very important in the business world, and it is expected to become a main strategy and tool in the commercial field (Yuan and Wu, 2008).

Customer satisfaction and its importance in organizations:

The term satisfaction is directly linked to the expectations that the customer has before experiencing the consumption moment and its contrast with the performance of the product or services; it is conceived as a response to the experiences (Westbrook and Reilly 1983). Customer satisfaction is viewed as the result of an evaluation of the consumption experience, the product of a cognitive judgment (Alkilani et al., 2013). Satisfaction is considered one of the most relevant and researched variables in the business world since it plays a crucial role in the successful marketing of a product or service, which leads to the sustainability of the organization (Pizam et al., 2016; Sweeney and Soutar, 2001). It is stated that if the consumer is highly satisfied, he or she will be willing to buy again, even will have greater resistance to competitors’ offers (Kotter and Keller, 2015; Yeh et al., 2019; Wikhamn, 2019). Customers analyze the functional benefits of the product, the enjoyment, and the emotions generated by its consumption. As a result, they will have a favorable or unfavorable opinion, which will determine their level of satisfaction (Kotler and Keller, 2015). If satisfaction rises, complaints will decrease, generating greater loyalty and a stronger bond between the company and the customer (Sergeevich and Vladimirovich, 2015).

After reviewing several studies related to customer satisfaction, it is considered to use the SERVQUAL model, which was first published in 1988 and has solidity and validation in the measurement of customer satisfaction. The model proposes 5 modules, which make up the dimensions: tangible elements, responsiveness, security, empathy, and reliability (Zeithaml, 2009; Maghsoodi, 2019.).

• The Dimension of Tangible Elements is related to physical factors, infrastructure, materials, and people (Zeithaml, 2009; Maghsoodi, 2019).
• Responsiveness addresses the willingness of the members representing provider organizations to support consumers promptly and to establish quality standards regularly or in the event of a contingency (Zeithaml,2009; Maghsoodi, 2019).
• Security refers to the knowledge that the collaborators of the organization have to generate confidence in the product, service, and institution (Zeithaml,2009; Maghsoodi, 2019).
• Empathy consists of the level of personalization that organizations can provide, adapting to the particular requirements of consumers (Zeithaml, 2009; Maghsoodi, 2019).
• Reliability refers to the capacity to provide the service carefully. That is, the company fulfills its promises and the whole sales policy (Zeithaml, 2009; Maghsoodi, 2019).

The objective of this research is to determine the relationship between experiential marketing and customer satisfaction with its dimensions, analyzing the main characteristics of these variables; as well as, to identify how the customer feels about them since it is a challenge to build customer loyalty through strategies that involve senses and emotions. The research is justified by the purpose of contributing important knowledge to the sector that will serve to build and design innovative and creative marketing strategies, which would allow the companies of such an important sector in the world economy to become sustainable businesses impacting the quality of life of society.

Methodology

The study focuses its guidelines on a quantitative approach; it is restricted to basic research, making it possible to learn about a reality in its natural context to increase theoretical knowledge and serve as a replica in other studies. Its main objective was to determine the relationship between Experiential Marketing and Customer Satisfaction; therefore, its scope is correlational using a non-experimental, cross-sectional design. Simple probability sampling was used besides the infinite population formula to obtain 384 customers from Northern Lima, ranging from 25 to 60 years old, considering a confidence level of 95%. The information corresponding to the dimensions and indicators of the variables was collected using a questionnaire divided into two parts. The first part consisted of sociodemographic items such as age, gender, occupation, and place of residence to typify the consumer. The second one grouped 22 items, 15 of which were addressed to the experiential marketing variable distributed in its 5 dimensions, and the last 7 questions addressed the customer satisfaction variable through its dimensions (in the same number as the previous one). The measurement scale was Likert-type with 5 scores, ranging from 1 for ” totally disagree” to 5 for “totally agree”.

The questions set for both variables are an adaptation of the theories regarding experiential marketing (Schmitt, 2006) and, for customer satisfaction, the questionnaire of the Servqual model (Zeithaml, 2009; Maghsoodi, 2019). In this sense, validation by expert judgments was required, as well as the reliability indicator whose value was 0.766, qualified as acceptable. Once the instrument was applied, descriptive and inferential results were obtained, verifying the hypotheses of the study through the Rho Spearman test statistic, since the variables are qualitative by nature with an ordinal scale. The amplitude range was also used to obtain the levels reached by each variable and dimension.

Table 1. Structure of Operationalization of Variables

Results And Discussion

The results obtained from the structure of operationalization of variables and the setting of the objectives allow inferring the acceptance of the hypotheses of the study, leading to stating that there is a direct linear relationship between the two variables: Experiential Marketing and Customer Satisfaction. This result is confirmed by Spearman’s Rho correlation test (Rho=0.561, Sig. (Bilateral) =0.000; (p ≤0.000). Thus, the experiential marketing actions performed by a shopping mall make the consumer feel satisfied with the service received, being this highly important nowadays for different establishments.

Fig 1. Correlation results.

The same relationship remains when analyzing the experiential marketing variable with the dimensions of customer satisfaction: tangible elements (Rho = 0.440; p = .000< .05), responsiveness (Rho = 0.336; p = .000< .05), security (Rho = 0.348; p = .000< .05), empathy (Rho = 0.300; p = .000< .05), and reliability (Rho = 0.195; p = .000< .05). In this way, we can see that mall consumers do differentiate services and products in terms of the competition in this sector, starting with the appearance of the mall, its facilities, which are modern and attractive, as well as the infrastructure, equipment, and materials. Likewise, the employees are willing to help customers and provide fast and adequate service, such as answering questions and complaints, and solving problems. The results show that the application of experiential marketing improves customer satisfaction in the mall. This research can be taken as a basis for decision making in which the senses can intervene and good decisions can be made if there is possibly any change in the mall.

Fig 2. Levels of Customer Satisfaction and Experiential Marketing.

Both variables have similar results for the level they have currently reached, highlighting the low and medium levels. Experiential marketing with 48.7% is positioned at a low level, while customer satisfaction is at a medium level with 47.14% (Fig. 2). This corroborates the positive relationship between both variables in terms of inferential results, since if experiential marketing is still at a low level with significant results, then the response in customer satisfaction does not surpass the high level, remaining at low and medium levels with percentages of 44.01% and 47.14%, respectively. It should be noted that, although experiential marketing is not at a high level, there are customers who recognize its importance in terms of visualization, handling, and fragrances in the establishment they visit and, in the products, they buy, enhancing their purchase decision. On the other hand, customer satisfaction merits an opportunity for improvement, incorporating experiential marketing attributes together with post-sale services such as attention to complaints, and returns, among others.

Fig 3. Comparison of Levels in Customer Satisfaction Dimensions.

When comparing the levels achieved for the dimensions of customer satisfaction, reliability (33.07%) and tangible elements (30.73%) stand out with significant percentages, followed by empathy (27.34%) and safety (26.56%) (Fig. 3). Physical appearance, but especially modern facilities and equipment, in addition to attractiveness, confer a quite positive result on customers. And, if all this is accompanied by a careful service, fulfilling what was promised or agreed, it undoubtedly enhances the experience and preference of the consumer.

Specifically, a direct positive relationship is found between the variables studied; the correlations found between dimensions D2.1, D2.2, D2.3, and D2.4 are moderate positive and in dimension D2.5 a weak positive correlation was found (Fig. 1). The above agrees with the conclusions formulated by Stefanini et al., (2018), who analyzed the consumption experience, using the five dimensions proposed by Schimitt (1999), addressing the experience economy under the approach of Pine & Gilmore (1999), confirming a moderate positive relationship between experiential marketing and satisfaction. In this sense, Yeh et al. (2019) confirmed that experiential marketing showed a positive relationship with customer satisfaction, even highlighting that the emotional dimension generates a greater impact. On the other hand, Lin (2013) validated the positive relationship between both variables, concluding that marketing plans should incorporate experiential marketing strategies to enhance their customers’ state of satisfaction and promote loyalty. This coincides with the statements made by Ridwan et al. (2021), who confirmed the existence of a positive and significant relationship between both variables, recommending the managers of the company studied to focus their marketing efforts on the experiences lived so that customers may feel satisfied, and loyalty can be strengthened. Brackus et al. (2009) state that brand experience and its dimensions have an impact on consumer habits, customer satisfaction, and loyalty. This partially disagrees with the findings of Alkilani et al. (2013), who found direct positive relationships only in the dimensions of sensations and feelings. Despite this, the authors conclude that organizations should focus on including the sensory and feeling experience in their offers in order to raise satisfaction levels. Yuan and Wu (2008) validated the hypothesis that emotional value is included in the dimensions of feelings and sensations, confirming that experiential marketing impacts satisfaction through the emotional component. The study empirically confirms the theory that relationship marketing impacts satisfaction, indicating that marketers should design their strategies based on the fact that the functional value of the product constitutes only a part of the value offer; there is an experiential component that may contribute considerably to the achievement of the objectives.

Other authors confirm the positive relationship between both variables, indicating that in the current consumer economy organizations must incorporate experiential marketing strategies, focusing on seeking a positive impact on customer satisfaction, recognizing this one as the most valuable asset of a commercial company (Sharma and Caubey, 2014; Ramadhan and Chastello, 2015).

Conclusions

The retail sector is clearly going through the consumer era; companies are overwhelmingly generating a deluge of information for customers, raising the levels of consumer resistance to their attempts at communication. An era in which competitiveness prevails products and services often have very similar functional offers. In this environment, the importance of analyzing disruptive, creative, and innovative marketing strategies that allow us to highlight other aspects of the value offer of the organizations becomes evident.

In this sense, this research provides important information on the impact of the use of experiential marketing on customer satisfaction. Living a positive experience, expressed in the five proposed modules, constitutes a marketing strategy that will allow the company to face competitive markets. This research shows that there is a positive relationship between the variables studied. This shows that the marketing specialist should incorporate strategies that accompany the functional value of the product with living experiences. In this way, they will increase customer satisfaction levels, positively impacting the sustainability of the business.

Concerning the impact of experiential marketing, the level of relationship with each of the dimensions of customer satisfaction was identified. It was observed that tangible elements, responsiveness, security, and empathy have a moderate positive relationship and the reliability dimension has a weak relationship. The results support the initiatives to generate experiences by companies in the retail sector that seek to increase customer satisfaction and all the dimensions that compose it.

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