IMPACT OF VIRTUAL REALITY IN EXPERIENTIAL MARKETING

Conceptual model of Experiential Marketing 5 Figure 2. Global Virtual Reality Industry Revenue 2017-2021 12 Figure 4. Time spent on Marketing Tools 20 Figure 4. Virtual Reality adoption trend 2016-2020 21 Abstract The aim of this paper is to determine the impact of virtual reality on experiential marketing. The paper seeks to answer the following research questions; 1) what is the nature of impact between virtual reality and experiential marketing? 2) To what extent does VR impact experiential marketing? Chapter One: Introduction Over the decades, organizations have designed and developed various services and products that need to be marketed in a way that will grab consumers’ attention and create lasting memories. This engagement is deemed to provide memorable and emotional connections thus strongly connecting the consumer to the brand (Datta, 2017).

Research Problem The ever-growing consumer market cynicism to traditional marketing and advertisements provides marketers with constant challenges on how to deliver new strategies for marketing that will capture user’s attention in the increasingly competitive market. Coupled with high consumer expectations, technological advancements and complexities associated with understanding consumer needs (Schmitt, 2010), organizations are adopting modern marketing approaches including experiential marketing to remedy this situation. However, there is lack of sufficient literature for every industry supporting the adoption of experiential marketing in influencing consumer satisfaction or loyalty. Though studies show increased spending on experiential marketing initiatives (Lanier, 2008; Wahyuningtyas, et al. Why is experiential marketing important in a competitive market? 1. Benefits of the Study Incorporation of VR technology to design and deliver experiential marketing is a relatively new phenomenon in the content marketing world, and therefore this study will provide marketing practitioners within an opportunity to understand the impact of VR on experiential marketing.

In addition, this study will also help organization management determine whether or not to adopt unconventional marketing approaches to deliver personalized experiences. Insights resulting from this study may also be beneficial in cementing the important role of marketing in the total supply chain. Lastly, this study will add onto existing literature, knowledge base and repositories for experiential marketing 1. Schmitt (2000) defines experiential marketing as a strategic basis for providing a holistic experience for consumers by focusing on their emotions and senses. Basically, the experiential marketing strategy seeks to engage and connect with consumers by creating real-life experiences that are memorable. This is in line with Lee et al. definition where experiential marketing is explained as a memorable experience ingrained in the consumers or customers mind (Lee, et al.

Wu and Tseng (2015) note that experiential marketing involves a broad marketing strategy concerned with improving customer satisfaction and customer loyalty. SEM is implemented with the help of tactical tools [ExPros] such as communications, product presence, visual identity, verbal identity, and electronic media among others (Schmitt, 2000). Unlike traditional marketing where the consumer is viewed as a rational-decision maker interested in functional benefits and features, experiential marketing perceives consumers as rational and emotional beings interested in attaining pleasurable experiences (Schmitt, 2000). Schmitt also notes that these pleasurable experiences in experiential marketing provide consumers with cognitive, emotional and sensory benefits replacing the functional benefits. Experiential marketing primarily immerses the consumer directly in the brand leading to an unforgettable feeling and mental satisfaction. Scholars and marketing practitioners assert that experiential marketing constitutes a communication strategy that is difficult for the consumers to ignore; this is because it engages consumers on personal levels.

that is, “attribution of meaning (experience of the meaning), emotional response (emotional experience), and aesthetic pleasure (aesthetic experience)” (Same & Larimo, 2012, p. It is these experiences resulting from the stimulus, virtual reality, that influence consumer purchasing decisions and value co-created by the customers, organization, and society at large. Emergence of Experiential Marketing in various Industries In today’s world, experiential marketing is infiltrating every industry with more marketing practitioners focusing their attention on how to create new products, interact with consumers, and model retail environs where brands connect to customers in an emotional and memorable way. Major brands, markets, and industries no longer perceive experiential marketing as auxiliary to traditional or strategic marketing, its impact and effects are steadily gaining acknowledgment both from the consumer and organization perspectives.

This is amplified in literature evidence such as the study carried out in Jambi City by Yacob et al. Datta, 2017). Melnyk et al. in their study of experiential supply chain, found that consumers’ unique demands and experiences with products disrupted the total supply chain. Further, they found that modern-day consumers particularly millennials, accounting for the biggest customer base, wanted more than price and availability; they valued convenience, speedy deliveries, and wanted to be involved in the co-creation of the product (Melnyk, et al. Likewise, the modern marketing manager is continuously working on innovative marketing strategies to provide a total consumer experience; marketing is no longer centrally focused on the functional aspects of utility and product functions. “The occurrence of brand loyalty in the customer is caused by the influence of satisfaction or dissatisfaction with the brand accumulated continuously in addition to the perception of the quality of the product” (Yacob, et al.

p. Effectively, as propounded by marketing researchers such as Schmitt, Kotler, and Smilansky, experiential marketing allows organizations to engage with their consumers and prospective customers by adding value to their lives and leveraging brand loyalty. Smilansky (2009, p. declares that experiential marketing is “the new currency in the modern marketing landscape, because experiences are life, and people talk about experiences every day. In his earliest publications, Schmitt highlights the increasing importance of internet experiences and social networking on creating online and virtual marketing events. He equips that understanding interactions with, and consumption of these media will greatly influence the competitive advantage of an organization and its future in experiential marketing (Schmitt, 2010). Indeed, the application of technology to create different forms of marketing that appeal to SEM can help brands develop highly scalable individualized interactions and experiences that appeal to consumers.

With the existence of these new technological forms, organizations can appeal in depth to their consumers’ emotions translating to improved brand engagement (Event Marketing Institute [EMI] & Mosaic, 2018). To illustrate this, the conversion of a long flight of stairs at the Swedish subway by Volkswagen in 2009 is relevant. Today, customers have evolved their expectations and sought for purchasing experiences that can deliver instant gratification thanks to technology and faster logistics. For example, a customer interested in purchasing a portable hard disk can access information on this product and its features on e-commerce websites instantly. In case further clarification is needed, the customer can use his/her mobile device to communicate with the seller organization using real-time communication apps like Skype, Whatsapp, Facebook and many others (IBM, 2017).

Once the purchasing decision is made, the portable hard disk can be delivered to his/her doorstep via a commercial drone. This implies that marketing teams now have a shorter duration to deliver that personalized memory and ‘wow’ effect on prospective customers. In their literature, they indicate that lack of standard definition is further complicated by the different fields assigning it different meanings. Simply put, VR is “reality that does not exist” (Dani & Rajit, 1998). These computer-based multimedia environments generated by computer technology provide users with highly interactive experiences (Kim, et al. According to Burdea & Conflict (2003), VR involves the use of computer and computer peripherals to create simulated environments where users immerse themselves. The goal of VR technology is to create a virtual (3-dimensional) environment or image that the end-users can perceive as real environments including interacting with realistically and in real-time.

The VR system software can be categorized further into modeling tools and development tools. Modeling tools include apps such as 3ds Max, Creator, and Maya while development tools include common development apps such as C++, OpenGL, and Java among others (Bamodu & Ye, 2013). As anticipated by most of the players in the VR industry including Facebook, HTC, Google, and Samsung, VR will go mainstream in the coming years [see fig 2. Similar assertions are supported by various VR researchers and industry experts like Goldman Sachs who predict VR to become the next big computing platform (Goldman Sachs Group, 2016; Greenlight Insights, 2017; Orbis Research, 2017). This position is cemented by the huge investments undertaken by the organizations notably the acquisition of Oculus VR by Facebook at the cost of $2 billion.

To answer this study research question, I will henceforth focus on the business industry giving particular attention to the potential of VR application in experiential marketing. Virtual Reality and Experiential Marketing The life of individuals revolves around the consumption of services and goods. Organizations are therefore constantly designing marketing strategies and brand experiences that appeal to their consumers to win their loyalty. It is this deep commitment to select similar products or services in the future, again and again, regardless of situational influences that help organizations develop sustainable competitive edge (Kotler, 2014). Again, majority millennial consumers’ preferences are increasingly dictated by personal experiences thus are willing to pay premiums for well-crafted and meaningful experiences (Melnyk, et al. Favorable public and media interest generated by VR participation marketing, such as that of Coca-Cola, delivers marketing messages in unrivaled forms and to a large number of audiences.

Availability of powerful computer and smart devices capable rendering realistic virtual world has increased the interest of marketing managers in using VR to deliver experiential marketing. Coupled advancement in the mobile device industry spanning the size, performance, display and reduced prices, many more organizations are getting involved in VR technology to deliver experiential marketing. Unlike conventional marketing approaches that provide 2-dimensional experiences to the consumers, VR technology allows the consumer to interact with the virtual environment effectively hearing, feeling, and relating to the events in their virtual environment. Using VR headsets and controllers, the consumers are entirely immersed in these graphically-real environments creating a win-win situation. Owing to limited time and monetary resources, the researcher conveniently selected Coca-Cola Company for this study.

This is because Coca-Cola is a strong corporate brand with a global presence, easily identifiable to consumers, and is among the top global pioneers of using VR in experiential marketing (Benjamin, 2017; Csutoras, 2016). Coca-Cola also boasts of several VR campaigns across the globe as will be discussed in succeeding sections of this paper (Coca-Cola Company, 2018). The sample population used in this study, therefore, included existing literature sources related to all Coca-Cola VR experiences in engagement marketing across the world. To identify journals, papers, websites, and publications to be reviewed, a search strategy on existing online databases and published texts were reviewed using the inclusion and exclusion criteria as shown in 3. These terms and dimension included, ‘Coca-Cola’, ‘virtual reality’, ‘VR’, ‘experiential marketing’, ‘marketing experience’, ’experiential interface’, ’consumer experience’, ’producer experience’, 360 photos’, ‘360 video emulation’, ‘360 videos’ and ‘directional movements’.

Terms and dimensions were used as keywords when searching the associated literature databases on the impact of virtual reality in experiential marketing. Ethics Chapter four: Data Analysis, Findings & Discussions 4. Data Analysis In line with the purpose of this study, to determine the impact of VR on experiential marketing, collected data was appraised then synthesized systematically. Key data extracted from the relevant literature evidence reviewed included; name(s) of the authors, year of publication, journal name, variables or components under investigations, the study objectives, study design, setting, methods, participants, findings/outcomes, and associations. This is best depicted in the ‘Coca-Cola happiness campaign’ run in India & Pakistan (Coca-Cola Company, 2018). India and Pakistan have historically had tense relations that can be partly associated with cultural and social differences.

Using a live interface experience on their vending machines in India & Pakistan, Coca-Cola allowed consumers who purchased their products on these vending machines to see and share messages of peace, love, and happiness. These experiences were then shared on to millions of viewers across online and social media and online platforms. Marketing Experience Consumer Experience According to Schmitt (2010), understanding consumer experience is critical in providing a competitive edge in any corporation’s product and service offerings. Video Emulation Online tech organizations such as Hulu and Netflix have incorporated VR into some of their shows. The show episodes include 360 videos shot in ways emulating VR experiences. However, to enjoy the benefits of 360 video emulation consumers must use screens with high resolution (Goodwin, 2016).

In its earliest adoption of VR technology, Coca-Cola Company took advantage of Facebook reactions to create an experiential marketing 360 video emulation showing playful twists of the Facebook reactions/smileys named #Cokemoji. This strategy provided a fun way to keep Coca-Cola brands on consumer minds without necessarily having to create a full-scale advert (Coca-Cola Company, 2018). Employ the principles of systematic review, that is, data extraction tool + theoretical framework>> Figure 4. Virtual Reality adoption trend 2016-2020 (Forrester, 2017) 4. Discussions Consumer implications Organization implications This section will look at the dimensions discussed and how they impact on each other When discussing consider implications for the practice • Can this evidence be relied upon/trusted? • Has the research question been answered? • What are the challenges for the area of practice? • Can the findings be applied to the area of practice? Direct day to daycare/ops and policy POV The existing data did not sufficiently fit into the needs of this study.

Lack of substantial peer-reviewed journals that specifically highlight the impact of Coca-Cola VR in experiential marketing. Those that are there are from coke website, and therefore there might be an issue of bias… can we thus reduce data to the statistics available Chapter five: Conclusions & Recommendations 5. This position is even more evident in the recent US Interactive Advertising Bureau report where a greater number of consumers felt that VR advertising will only appeal to particular groups of millennials who are also tech-enthusiasts. Currently, there is no single organization that can produce all the processes required in VR marketing without having to work with different external partners and organizations. This implies that production costs associated with VR marketing are unaffordable for most medium and small sized organizations thereby locking out several companies.

VR marketing processes have also been revealed by this study as relatively complicated for the traditional marketers. As such, smooth integration and connection with the organization marketing tools require massive resources to train and implement the relevant infrastructure. Findings also reveal existing studies delving into VR world & its’ components independently. A similar situation is also true for studies on experiential marketing campaigns with only a handful of empirical studies detailing the association and impact of VR in experiential marketing. There is thus need for researchers to undertake additional empirical studies specifically among pioneer organizations that possess rich data on VR marketing to add onto existing evidence. Areas for Further Research In line with the literature reviewed and the findings presented, this study gives the following suggestions for further research: 1.

Independent or third-party driven research work on the impact of VR in experiential marketing specifically for Coca-Cola Company case. Bao, H. Zhuang, A. Virtual reality in marketing - an explorative study, Boras: Unpublished Bachelor Thesis, University of Boras. Benjamin, K. Coca-Cola to open pop-up shop featuring virtual reality, London: Campaign Live UK. Virtual reality technology. nd ed. New York: John Wiley & Sons. Coca-Cola Company, 2014. ‘Happiness From the Skies: Watch Coke Drones Refresh Guest Workers in Singapore, Singapore: Coca-Cola Journey. Dani, T. H. Rajit, G. Virtual reality: a new technology for engineers. In: M. Ahsan, S. Virtual reality in experience marketing: an empirical study on the effects of immersive VR, Bergen: Unpublished Master thesis, Norwegian School of Economics. Event Marketing Institute [EMI] & Mosaic, 2018.

EventTrack: experiential campaigns, New York: EMI & Mosaic. Forrester, 2017. Hart, C. Doing a literature review. London: Sage Publications. Hekkert, P. Design aesthetics: principles of pleasure in product design. James Bond Museum, 2012. museum: coca cola zero zero seven. Online] Available at: http://www. museum. com/zero_zero_7. Kim, J. et al. Virtual reality simulations in physics education. Interactive Multimedia Electronic Journal of Computer-Enhanced Learning. Kornik, S. M. Virtual reality. Cambridge: Cambridge University Press. Lee, M. S. A. Supply chain design: issues, challenges, frameworks, and solutions. International Journal of Production Research, 52(7), pp. Miles, B. Huberman, M. Online] Available at: https://www. adweek. com/digital/coke-zero-007-vending-machine/ [Accessed 18 July 2018]. Onyesolu, M. O. com/stories/coke-zero-viral-video-unlock-the-007-in-you-you-have-70-seconds [Accessed 18 July 2018]. Pogul, P. Shankar, A. U. Interface of experiential marketing shoppers behavior and loyalty in organized retailing: study on select retail malls in Grater Hyderabad.

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