Trends And Experience Economy


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Trends And Experience Economy

  1. 1. Trends & experience economy <ul><li>Sakariina Heikkanen </li></ul>
  2. 2. Some global trends by.. <ul><li>-Visit Britain </li></ul><ul><li>-Simon Hudson: Marketing for Tourism & Hospitality </li></ul><ul><li>-Institute for Tourism and Recreational Research in Northern Europe (N.I.T.) </li></ul><ul><li>-LEO </li></ul><ul><li>-Rolf Jensen </li></ul><ul><li>-Pine & Gilmore </li></ul>
  3. 3. How does tourism demand work? Tourism Demand External influences Emerging patterns Source: N.I.T. 2006
  4. 4. Influencing factors Threats /Crisis Sosio-cultural impacts Economy Ecological environment Technology Politics, Legal issues Consumer Attitudes Source: N.I.T. 2006 Tourism Demand
  5. 5. How do they influence? <ul><li>External factors may have an impact on tourism demand by affecting the ability to travel (freedom, time, money, fitness) and the motivation to do so. </li></ul><ul><li>Consumer Behaviour is not a reaction to a single factor, but to the whole set of influencing external factors . In addition it is driven by internal factors (e.g. motives, abilities etc.). </li></ul>Source: N.I.T. 2006
  6. 6. <ul><li>GROWTH TRENDS </li></ul><ul><li>Tourism is expected to grow 4.5 percent annually over the next decade </li></ul><ul><li>China will soon be most popular destination </li></ul><ul><li>By 2020, an estimated 50 million Indians will tour overseas </li></ul><ul><li>Business travel from, and among, developing countries will grow more rapidly than business market </li></ul><ul><li>Two growth areas: China and India </li></ul><ul><li>Certain sectors will grow faster than others, for example, cruise industry </li></ul>13-
  7. 7. <ul><li>DEMOGRAPHIC TRENDS </li></ul><ul><ul><li>Over the next 20 years, key markets for outbound travel will remain Europe, Asia, and the Americas </li></ul></ul><ul><ul><li>Significant implications of demographic change in this century is aging of world’s population </li></ul></ul><ul><ul><li>World median age is projected to rise from 26 years in 2000 to 44 years by 2100 </li></ul></ul>13-
  8. 8. Technology  Internet <ul><li>Enabled the low-cost carrier revolution </li></ul><ul><li>More price transparency / competition </li></ul><ul><li>Empowered tourists to share opinions with the world: no hiding place for those offering poor quality </li></ul><ul><li>Only 5% of Indian’s have access, but that is 60 million people </li></ul><ul><li>The rise of the budget accommodation chain & travel agencies (on-line) also. </li></ul>
  9. 9. <ul><li>Some other issues.. </li></ul><ul><li>The ‘unexpected’ (9/11) will continue to take us by surprise, and the ‘expected’ (EU expansion) will continue to have unexpected implications </li></ul><ul><li>Climate change will shape government, business and consumer behaviour: there will be winners and losers </li></ul>
  10. 10. <ul><li>WHAT DO CONSUMERS WANT? </li></ul><ul><li>Multi-role - consumers: Fly in on Ryanair, stay in a Hilton, grab lunch in McDonalds: no neat segments </li></ul><ul><li>The visitor experience must offer value for money </li></ul><ul><li>‘ what you do’ more important than ‘where you do it’: ‘experiences’ not ‘destinations’ count </li></ul><ul><li>Authenticity : Visitors have higher expectations than earlier generations </li></ul>
  11. 11. <ul><li>The experience industry </li></ul><ul><li>Commodities (coffee bean). </li></ul><ul><li>Goods (bean produced to coffee product for sale) </li></ul><ul><li>Services (intangible  serving of a cup of coffee in a café ) </li></ul><ul><li>Experiences  events that engage individuals in a personal way </li></ul><ul><li> If a café was turned into a themed arena, the served cup of coffee would change in to an experience. </li></ul><ul><li>Manufactures must turn their goods into experiences in order to have their share in the world of business. </li></ul><ul><li>Experience gives an added value to the service provided. </li></ul>
  12. 12. Experience Economy <ul><li>Experience Pyramid by LEO </li></ul><ul><li>The Experience Pyramid is a practical tool to analyze, understand and enhance the experience-based elements of a product. </li></ul><ul><li>As experiences are a highly subjective matter, a meaningful experience can never be guaranteed. However, a tourist guide / expert can create the ideal surroundings for meaningful experiences. </li></ul><ul><li>The Experience Pyramid suggests a twofold approach to experiences: customer experience and elements of the product. </li></ul>
  13. 13. Experience Pyramid <ul><li> </li></ul><ul><li> </li></ul>
  14. 14. ELEMENTS <ul><li>Individuality : how unique and extraordinary a product is. Is there a potential to tailor the product according to customer needs. </li></ul><ul><li>Authenticity: is it 'genuine' and 'real'. Is it fake? Cultures, Disney? </li></ul><ul><li>Story is closely related to authenticity. There needs to be a story. </li></ul><ul><li>Multi-sensory : is it possible to experience a product with as many of the senses as possible. </li></ul><ul><li>Contrast : how different the experience is from the customer's everyday life. </li></ul><ul><li>Interaction: how well it communicates with the audience / customer. </li></ul>
  15. 15. LEVELS OF EXPERIENCE <ul><li>Motivational level : awakening attention and interest. Marketing! </li></ul><ul><li>Physical level: the product is experienced through the senses. A pleasant and safe experience must be guaranteed. </li></ul><ul><li>Rational level : on the intellectual level, we decide if we're satisfied with the product or not. Here, a good product offers the customer the potential to learn something new. </li></ul><ul><li>Emotional level: this is where the meaningful experience take place. We try to give joy, excitement, the pleasure of achievement and the pleasure learning new skills. </li></ul><ul><li>Mental level : meaningful experience may lead to personal change  modifications to physical being, state of mind or lifestyle. </li></ul>
  16. 16. From commodities economy to experience economy <ul><li>Pine & Gilmore  how the world economy has changed from the commodities economy to an experience economy: </li></ul><ul><li>A mother used to bake a cake from a scratch, using commodities. </li></ul><ul><li>Some years later, she bought a cake mixture from the local super market or even a half made frozen cake. </li></ul><ul><li>In the 21st century, however, parents buy the whole party with all of its products and services. </li></ul><ul><li>The question arises, what next? </li></ul>
  17. 17. <ul><li>Pine suggests: </li></ul><ul><li>After the experience economy, there will be a transformation economy.  Mother and father not only buy the birthday party, but a whole set of birthdays to lead the child into a direction that they think would be the best for the child. (Football player, ballet dancer) </li></ul>
  18. 18. Transformation Business? <ul><li>Pine suggests that the next step from the experience economy is transformation business. </li></ul><ul><li>What all sorts of services that could include? </li></ul><ul><li>Do you think it is present already & is it about to take over in the tourism business as well? </li></ul><ul><li>Read the abstract of the theory (given) and evaluate the questions above as well as the problems this kind of business could create. </li></ul>
  19. 19. Jensen, Rolf Dream Society: <ul><li>The following six market profiles comprise the most important aspects of the Dream Society: </li></ul><ul><li>1. Adventure market: Stories and adventures are demanded and supplied like products themselves. </li></ul><ul><li>2. The Market for Togetherness, Friendship, and Love: Emotional satisfaction </li></ul><ul><li>3. The Market for Care: People have a need to receive and provide care. </li></ul><ul><li>4. The Who-Am-I Market: What kind of person am I, what are my esteemed values. </li></ul><ul><li>5. The Market for Peace of Mind: In an insecure and changeable world we demand stories about permanence, peace of mind, and stable values. </li></ul><ul><li>6. The Market for Convictions: Interest groups have always existed but never in such numbers and influence. </li></ul><ul><li>Read the abstract of the book (given) - How could these profiles affect and be used in the tourism business? </li></ul>