As observed by Pine and Gilmore, as commoditization of goods and services become more pronounced, customers experience is very important. Customer satisfaction is important for every business especially the hotel industry for it determines its stay in the market. For a business to thrive, it not only has to provide a commodity but also create customer value by employing effective marketing strategies. In the hotel industry, restaurants use different approaches to market their services.
While some concentrate on selling the services they already have by cutting prices, employing more sales personnel and aggressive advertising others focus on giving the customer the best experience. In simple terms, there are those which differentiate themselves as service providers and others as experience providers.
Starbucks and McDonalds are both fast food restaurants operating various outlets across the globe. With the hotel industry in the maturity stage of its life cycle, both companies have to adopt effective differentiation strategies to ensure growth in their current markets and also expand in possible new market.
Comparing the two giant companies may seem insensible but as matter of fact they do have a lot in common. Both chains promise customer satisfaction achieved by developing good customer rapport rather than just selling their commodities.
The fast food restaurant industry is highly saturated with Starbucks having less market share when compared to McDonalds. To stay competitive, the industry does affect the strategies which each restaurant will adopt. Differentiation is an effective competitive strategy which both Starbucks and McDonalds have employed.
This is where the issue of commodity versus experience provision comes in. As a commodity provider; the restaurants focus on making their products readily available at low prices. The customer may be attracted by the low price even when the service or rather the experience they get from the particular restaurant is not good.
On the other hand, experience providers will concentrate on creating customer value even when the prices of their commodities are high. In marketing, customers are the king and to develop a good customer relationship, the business needs to create value through experience provision.
Customers are said to be the best advertisers and if they are served well, then brand loyalty is created hence growth. An experiential marketer makes the customer feel special; they add value to the commodity such that the customer can justify any extra dollar that they spend.
McDonalds offers a wide variety of products at low prices as compared to Starbucks. McDonalds differentiates itself as a commodity provider although the unhealthiness of the meals it offers acts as its major disadvantage. On the other hand, Starbucks concentrates on both strategies.
The company has put more effort in selling its coffee and at the same time making the whole experience for the customer unforgettable. According to a certain customer “Starbucks is a place to sit down and have a conversation or have an informal meeting with a rich tasting high quality coffee in a unique environment.” For this reason, the chain has attracted all manner of customers including students and employees and any other person who loves enjoying a cup of coffee.
Even though Starbucks sells luxury products like lattes and cappuccinos, its customers experience satisfaction and value for their money. From this perspective, it is a fact that when a company sticks with an effective competitive advantage, it satisfies its customers who ensure it’s profitable therefore the growth of market share in the industry.
An experiential marketer like Starbucks shapes its customers needs in new directions which happen to increase customer value proposition. At the same time, when the chain shapes its customers needs, it improves its business systems.
Experiential marketers engage their customers in personal and memorable ways. While the commodity providers try performing the normal function of selling, the experience providers go beyond the normal function to compete by creating customer value. Before manufacturing, the experiential marketer aims at creating a product with an excellent design.
An experiential marketer understands the two dimensions of experiences, these which are: customer participation and the connection with the commodity and the environment. Considering the aspects of customer participation and connection improves value propositioning.
The reason why Starbucks stands out than McDonalds is because of the fact that it has its experience well themed. When a customer steps in a Starbucks outlet, they instantly know what to expect. The theme is well defined and this promises the customer a nice experience at the restaurant.
According to Pine and Gilmore, an experiential marketer understands the importance of harmonizing impressions with cues that are positive and at the same time eliminating the negative ones. Experience providers strive to eliminate any aspect that seems to diminish the theme unlike commodity providers who focus on making a sell.
The authors also appreciate the role played by the five senses. In the hotel industry, customer experience is enhanced by smell, taste, vision, and other sensations. The sweet aroma and taste of Starbucks coffee accompanied by excellent customer care makes the restaurant stand out against its competitors. Its not that Starbucks is perfect than the other players in the industry, its experiential aspect makes it stand out.