Passenger Satisfaction and Repurchase Intention in Taking Novelty

    Transportation: An Application of Experiential Model

    Karen, I.F. Wu;Lily, S.L. Chen

    Associate Professor, Hsing Wu College, Taiwan

    ABSTRACT

     Consumers’ needs are satisfied by the pleasurable experiences from a shopping environment (e.g. store setting, product presentation, or product attributes). The present paper examines whether components of experiential marketing and experiential value influence the passenger of Taiwan High Speed Rail towards their consumption satisfaction and repurchase intention. Statistically significant in all aspects, the multiple regression analyses reveal that the experiential value is positively affected by the constructs of experiential marketing: Sense, Feel, Think, Relate, and Act in the filed of taking HSR. And the passenger satisfaction and repurchase intention are also positively predicted by the above constructs.

Keywords: Experiential marketing, Experiential value, HSR

    I. INTRODUCTION

    In the 1990s, more and more companies acknowledged the critical importance of becoming “customer-oriented” and “market driven” instead of product, technology, or

    sales-focused. It was the core subject to become customer-oriented and market-driven for most companies at that time. So it is the core concept of what marketing scholars and practitioners have called the marketing concept. This is how Philip Kotler (1991) summarizes the marketing concept:

     The marketing concept holds that the key to achieving organizational goods consists of

    determining the needs and wants of target markets and delivering the desired

    satisfactions more effectively and efficiently than competitors. It starts with a

    well-defined market, focuses on customer needs, coordinates all activities that will affect

    customers, and products profits by satisfying customers.

    If the so-called marketing concept defined by Philip Kotler is the concept of traditional marketing concept, then a new marketing concept advocated by Schmitt (1999) has emerged a decade later. It is the experiential marketing. Experiential marketing attempts to connect consumers with product attributes (brand, product itself etc.) in a personally relevant and memorable way. The alternative term of customer-experience marketing emphasizes the idea of communicating the essence of an attribute of product through a personalized experience.

    As a marketing methodology, experiential marketing aims to move beyond the traditional “features-and-benefits” marketing, cast to a wide audience that includes

    not only those who may benefit from a product attribute or product itself, but also those who would not benefit at all. In fact, experiential marketing presents an experience that people choose to attend to and participate in after identifying the relevance of a product attribute or product to their needs.

    In table 1, a comparison of traditional marketing concept and experiential marketing concept is illustrated.

    Table 1 Differences between traditional marketing and experiential marketing

    item traditional marketing Experiential marketing

    Promotion focus functions and benefits Customer experiences

    of product and perception

    Competitors Identified By Product category By Purchase situation

    customers identified Customers are Customer are rational

    rational yet emotional

    Customer targeted Segmentation By Segmentation by

    product attributes flexible appeals

    Customer needs Appealing for product Appealing for sensory

    itself feelings

     In traditional marketing, consumers are thought to go through a considered

    decision-making process, where each of the features or characteristics of a particular product or service are seen to convey certain benefits to the consumers, and those are all assessed by the potential purchasers. However, the experiential marketing considers it far too limited a way of viewing the purchase decision, with excessive emphasis on the rational and logical elements of the decision, and not enough on the emotional and irrational aspects involved in the purchase processes. The rest paper is organized as follows. The constructs of experiential marketing and experiential value are introduced in the next 2 sections. Following is the research topic of this paper. The final two sections are the data/data analysis and the conclusion.

    ? EXPERIENTIAL MARKETING

    Companies of all kinds acknowledge that their customers are important. They also know that customers are the companies’ most valuable assets and the companies

    survive only when they have customers, grow only when they can retain customers and recruit new ones. Companies never deny that they should be structured and manage around the customers. “Customer focus” is therefore identified as the single

    most important differentiator between the best and worst companies in an industry. Experience economy reinforces not only the correlation intensity between enterprise and its customers, but also the differentiations with competitors. Most of all, experience economy enhances value and price, and frees itself from price competition.

    In the book of Bernd H. Schmitt (1999): Experiential Marketing, he concludes that “5 tenets” are the ways to build a distinctive, valuable relationship with consumers. Sense, feel, think, act, and relate are the ways to make a real impact with consumers. He lays out a challenge to marketers to move beyond the traditional “feature and

    benefit marketing approach to winning consumers”. Schmitt prompts marketers to add

    emotion to the marketing mix. Schmitt also is energetic to convince the marketers by pointing out that during the fast paced world, global economy is creating a customer

    experience that is rich and diverse in the way the organization interacts with the customers. He emphasizes sensing, feeling, thinking, acting, and relating as platforms to inject emotion to the customer experience.

According to Schmitt’s book: Experiential Marketing How to Get Customers to

    Sense, Feel, Think, Act and Relate to your company and brands. Here the emphasis is upon the marketing of experiences: a type of marketing and management driven by experience. Schmitt identifies 5 different types of experiences. They are:

    SENSE: These are the sensual and tangible aspects of a product or experience that appeal to the 5 senses of sight, sound, scent, taste and touch. Sense experiences are particularly useful to differentiate products or services, to motivate potential customers, and to create a sense of value in the mind of the purchase.

    FEEL: Feel marketing is devoted to inducing affect that adhere to the company or brand. Clearly, positive or negative feelings toward a product or service will influence the extent to which it is consumed.

    THINK: The objective of think marketing is to encourage customers to engage in elaborative and creative thinking that may result in a reevaluation of the company and products.

    ACT: Act marketing is oriented towards the creation of experiences through behavior on the part of the customers. The goal is to change long-term behavior and habits in favor of the particular product or service.

RELATE: Relate marketing expands beyond the individual’s private sensations, feelings,

    cognitions and actions by relating the individual self to the broader social and cultural context reflected in a company or a brand. That is to say, relate marketing plays upon the identification of self with the context and associations bound up in the product or service used.

    In a short, experience economy defined by retailers is a source of memories, rather than just goods, an “experience stager” rather than a service provider (Pine and

    Gilmore, 1999).

    ? EXPERIENTIAL VALUE

     While experiential marketing focus on the customer experiences, experiential value deliver not only more value in a shopping process, but also different kinds of other value (Mathwick et al, 2001). Retail managers must keep in mind that the retail experience must deliver value if it is to turn a one-time visitor into repeat customer (Steigelman, 2000). Also, perceived value is characterized as the essential outcome of marketing activity (Holbrook, 1994) as well as a primary motivation for entering into marketing relationships (Peterson, 1995). As a result, Charla Mathwick etc. suggest that in order to create and manage the above relationships, retailer need a tool that is sensitive to the full range of components that define experience-based value.

     The typology of experiential value proposed by Holbrook (1994) defines the value landscape into four quadrants framed by intrinsic/extrinsic sources of value on one axis and active/reactive value on the other. Intrinsic value derives from the appreciation of an experience for its own sake, apart from any other consequence that may result, while extrinsic benefit is derived from shopping trips that are utilitarian in nature. An extrinsically oriented shopper is often happy to get through this type of exchange encounter and intrinsic value may result from the fun and playfulness of an experience, rather than from task completion (Babin et al, 1994)

     Reactive or passive value derives from the consumer’s comprehension of,

    appreciation for, or response to a consumption experience. Active or participative value implies a heightened collaboration between the shopper and the marketing entity (Mathwick et al, 2001).

     Mathwick etc. further develop and label 4 dimensions of experiential value: consumer return on investment (CROI), service excellence, playfulness, and aesthetic appeal:

     CROI comprises the active investment of financial, behavioral and psychological resources that potentially yield a return. The customer may experience this return in terms of economic utility (Monroe and Krishnan, 1996). Service excellence reflects an inherently reactive response in which the customer comes to admire a product or service for its capacity to serve as a means to a self-oriented end (Holbrook and Corfman, 1985). An aesthetic response is a reaction to the symmetry, proportion and unit of a physical object, a work of poetry or a performance (Veryzer, 1993). It may be the salient visual elements and the visual appeal of the design vending environment or setting. Playful exchange behavior is reflected in the intrinsic enjoyment that comes from engaging in activities that are absorbing, to the point off offering an escape from the demands off the day-to-day world (Unger and Kernan, 1983). The typology of experiential value is shown in Figure 1.

     Intrinsic Value Playfulness Aesthetics

    Consumer Return on Service Excellence Extrinsic Value

    Investment

     Active Value Reactive Value

    Fig. 1 Typology of experiential value

    ? RESEARCH THEME OF EXPERIENTIAL ECONOMY

     This paper searches over 200 unpublished Chinese thesis and published Chinese journal papers and English journal papers of related topics of experiential marketing to classify their research themes. Finally, eight main topics are found according to the authors’ subjective classification.

4.1 Classification of related papers

     Experiential economy is rather new in comparison with other theories in the marketing related fields. Therefore, this study collects over 200 published and unpublished papers to identify the topics that have been done. With regard to the graduate thesis, the categories of touring activity, relaxation activity, leisure activity,

    product promotion, and cultural activity are the most topics that have been researched. The main difference between touring activity and leisure activity is that the former involves stay over night while the latter does not. As for the published Chinese papers, leisure activity and product promotion take larger part of the proportion. But with respect to the English papers, touring activity and the Internet related papers dominate over 50% of the researches searched. In fact, it is true that the topics of experiential marketing and experiential value are the favorite themes for international hospitality and the Internet related papers. It may be explained by the cultural differences: in Taiwan, there are many cultural festivals in a year. Each festival represents a certain meaning to the Chinese people. It brings the people not only joy but also some kind of memorable meanings. Of course, drinking and dining take an important role for the Chinese people in their life. That’s why the relaxation and leisure activity take a large

    proportion of the papers too.

Table 2 Results of classification of the paper topics

    Category Chinese Chinese English

    thesis paper paper

    1. Touring activity (hospitality, boarding) 15 5 13

    2. Relaxation (Starbuck, restaurant consumption) 20 4 2

    3. Internet related (Internet shopping, design, game) 8 4 20

    4. Leisure (Department shopping, outdoors activity) 18 12 1

    5. Theme activity (Anniversary, lantern festival) 7 3 0

    6. Product promotion (Car, bank product) 21 10 6

    7. Cultural industry (Museum, bookstore, hand-craft) 20 6 5

    8. Channel (Shop or shop display, mobile store) 4 1 2

    Total number of paper 113 45 49

4.2 Taiwan High Speed Rail

    The terrain of Taiwan Island has restrained its population and economic growth along the west coast areas. An efficient high speed and mass transportation system is needed to meet the demand in the intercity and regional daily commuting and business trips. Through many years’ efforts, Taiwan High Speed Rail (HSR) finally

    started its operation on January 5, 2007. HSR links Taipei to Kaohsiung at a total

    length of 345km with at fast 90 minutes traveling time. During the first stage of the operation, 8 stations of the high speed rail are operated. What direct and indirect benefits the HSR will bring to the local economy is still to be questioned, but it sure heralds the coming age of the high speed rail service with the vision of enabling the local people to live in an one-day peripheral circle.

    ? DATA AND EMPIRICAL FINDINGS

     This paper uses the survey method to examine the experiential model on the passengers’ experience of taking HSR as novelty transportation in Taiwan. The questionnaire is designed by consulting the paper of Mathwick et al (2001), Schmitt (1999) and some domestic papers. Data are collected by the means of direct interviews with passengers on the train or at the exit of the station. Altogether, 458 usable questionnaires are collected.

5.1 Sample characteristics and measures

     The questionnaire of measuring experiential marketing and experiential value of HSR passengers is measured by seven points Likert response scale. Preliminary evidence can be seen in their demographic profiles shown in Table 3. For example, the sample of HSR passengers is almost half male and half female. And the sample in the age profile is quite even, which means that taking HSR is not a privilege, everyone affords to take it. But it is odd to see that over 60% of the sample who makes less than 40,000 dollars per month. For the ticket fare is kind of expensive in comparison with other transportation fare in Taiwan.

     Table 3 Demographic profiles

    Demographic profile Sample percentage

    Gender Male 214 46.7%

    Female 244 53.3

    Age Under 30 yr 67 14.6%

    31~40 118 25.8

    41~50 140 30.6

    51~60 92 20.1

    Above 61 41 9.0

    Monthly income Under 20,000 142 31.0%

    20,001~40,000 143 31.2

    40,001~60,000 93 20.3

    60,001~80,000 34 7.4

    Above 80,000 46 10.0

5.2 Empirical findings

     This paper uses multivariate statistics method to analyze the data. First, the Cronach’s α test is determined. Cronach’s α is 0.79 for the construct of Sense, 0.76 for the Feel construct, 0.85 for the Think construct, 0.83 for the construct of Relate, and

    finally 0.79 for the Act construct. All constructs comprise 4 items except the Feel construct

    with 3 items. 11items are comprised in the construct of experiential value, whose

    Cronbach’s α is 0.92.

     Next the Pearson correlation test is conducted, which is shown in Table 4. There exist all positive relationships between the constructs.

     Table 4 Summary of correlation coefficient between constructs

    Constructs Sense Feel Think Relate Act Ex-value Satisfaction

    Sense 1

    Feel .615 1

    Think .515 .647 1

    Relate .571 .692 .766 1

    Act .503 .579 .678 .712 1

    Ex-value .618 .659 .716 .778 .729 1

    Satisfaction .601 .591 .641 .670 .601 .796 1

    Finally, the multiple regression is performed, with the construct components of experiential marketing: sense, feel, think, relate, and act, as the independent variables

    2 for regression is and experiential value construct as the dependent variable. The R

    significant (F=6.10, P<.05). All the independent variables contribute significantly to the prediction of experiential value; 70% of the variability in experiential value is predicted. The results are presented in Table 5.

    Then the second multiple regression is performed, with passenger satisfaction as

    2the dependent variable. The R for regression is significant (F=4.71, P<.05). The

    experiential value contributes to the prediction of passenger satisfaction construct; over 63% of the variability in experiential value is predicted. In regression model 3, the passenger satisfaction is served as the independent variable, and the passenger’s

    2repurchase intention is served as the dependent variable. The R for regression is

    significant, too (F=3.51, P<.05). Over 56% of the variability in passenger satisfaction

    is predicted. In short, 3 regression models are all confirmed the relationships between the independent variables and dependent variables positively.

Table 5 Summary of multiple regression models

    Unstd. Std.

    2Sig. Sig. VIF Regression model Adj.Rβ β

    . ？Constant， .318 3.332

    Sense .177 1.745 .447 .003 .080 2.344 .294 .000 Feel .150 2.776 .173 .000 .265 .707 .000* 2.267 Model 1 .073 .041 Think

    .129 .000

    .233 .000 Relate

    Act

     .534 .002 ！.632 -- Model 2 ？Constant，.000 .921 .796 .000