Lesson 2 1 The 4 E Strategies to

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Lesson 2. 1: The 4 E Strategies to Differentiate Your Business From Competitors Lesson

Lesson 2. 1: The 4 E Strategies to Differentiate Your Business From Competitors Lesson 2. 2: Making Offerings Memorable Through Experience Economy Strategies 1

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Competitive advantage is: • A distinct combination of offerings that customers want and only

Competitive advantage is: • A distinct combination of offerings that customers want and only you can uniquely provide • What makes your business more attractive than your competition 3

How small businesses develop competitive advantages: • Traditional ways: – Delivering goods to customers

How small businesses develop competitive advantages: • Traditional ways: – Delivering goods to customers better, cheaper, or faster • Non-traditional ways: – Enhancing customers’ experiences as a way of creating value for them 4

Experiences as a key competitive resource for small businesses because they: • Can be

Experiences as a key competitive resource for small businesses because they: • Can be very unique • Are hard to copy • Are difficult for larger firms to effectively deliver on a personal customer level • Can be personalized and flexible 5

According to Pine & Gilmore, a “better” business means having: • Differentiated offerings from

According to Pine & Gilmore, a “better” business means having: • Differentiated offerings from competitors, such as experiences • High quality goods and services Retail “Escapist” – Harry Potter party Pegasus & Pendragon Books: Berkeley, CA http: //www. pegasusbookstore. c om/ 6

Experiential offerings can: • Address a higher level of customer value • Uniquely position

Experiential offerings can: • Address a higher level of customer value • Uniquely position and differentiate your small business • Create value for your business 7

A differentiation strategy must: • Offer a competitive advantage • Attract customers by positioning

A differentiation strategy must: • Offer a competitive advantage • Attract customers by positioning offerings in a unique and distinctive way • Be truly different in the eyes and mind of the customer • Be of value to the customer 8

Diagram for creating a unique combination of offerings to achieve differentiation Adapted from: Kotler,

Diagram for creating a unique combination of offerings to achieve differentiation Adapted from: Kotler, P. (1997). Marketing Management: Analysis, Planning, Implementation, and Control. Upper Saddle River, NJ: Prentice Hall. Pine, B. J. , & Gilmore, J. H. (1999). The Experience Economy: Work is Theatre and Every Business a Stage. Boston, MA: Harvard Business School Press. 9

Using the diagram from Pine & Gilmore’s theater example: • Consider the following: –

Using the diagram from Pine & Gilmore’s theater example: • Consider the following: – Goods are like props – Services can be seen as the stage – Personnel are the actors – Experiences are added to each element • All of the elements must work in coordination with each other for the “play” to be a hit 10

When considering your differentiation strategy, you must keep in mind: • All elements make

When considering your differentiation strategy, you must keep in mind: • All elements make sense and hinge on a common theme • How your customer experiences theme • All of the details that support your theme taken into account 11

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Making something memorable means to make a positive experience easy to recall or remember

Making something memorable means to make a positive experience easy to recall or remember at will As a business owner, you should aim to make your business memorable 13

Experiences that may come to mind when you say, “I remember when…. ” •

Experiences that may come to mind when you say, “I remember when…. ” • Situation of personal significance such as – Getting engaged – Winning an award • Rarity, surprise, or suspense such as – Spotting a mountain lion when on a neighborhood walk – An acrobatic circus show 14

Experiences that may come to mind when you say, “I remember when…. ” •

Experiences that may come to mind when you say, “I remember when…. ” • Special design or sensory features such as – Decorations of a party or holiday – Incredible natural beauty of nature like the colors of a setting sun • Intensity of emotion such as – A really scary roller coaster ride – An exciting moment in sports 15

Memorable experiences lead to Word-of Mouth (WOM) advertising, which is: • Positive communication by

Memorable experiences lead to Word-of Mouth (WOM) advertising, which is: • Positive communication by the customer to friends and relatives • A cost effective promotional strategy • Often referred to as “free advertising” • Considered a more persuasive message when coming from a trusted source • Likely to reduce perceived risk associated with patronizing a new business 16

Creating memorable experiences requires the following specific techniques: • Repetition of information • Personally

Creating memorable experiences requires the following specific techniques: • Repetition of information • Personally relevant experiences • Making sense of unexpected information • Physical performance of an action rather than simply observing • Multi-sensory (e. g. , sight, smell, sound) experiences • Emotionally arousing experiences 17

Memory making techniques are embedded in Pine & Gilmore’s experience economy strategies by: •

Memory making techniques are embedded in Pine & Gilmore’s experience economy strategies by: • Creating a theme and harmonizing the cues around theme reinforcing the business message • Offering educational and escapist experiences that actively engage the customer • Providing rich, multi-sensory settings • Arousing customers’ emotions 18