The Royal Experience

The Royal Experience How Retail Experiences Influence Corporate Brand Perception

Camilla Elming Hansen 05-05-2010

Marketing and Management Communication Aarhus School of Business Supervisor: Line Skjødt Total characters of Bachelor Thesis without spaces: 56.210 / 2200 = 25, 55 pages

Executive Summary During the past decade, three major changes have altered the society we as consumers live in, and as originations do business in. The omnipresence of information technology, supremacy of the brand and the ubiquity of integrated marketing communications has lead to new ways for marketing communication to reach customers, introducing the concept of experience. Experience has become the superior conduct for organisations to build durable long-term relationships with their customers, ensuring improved business performance.

This thesis has set out to gain insight into the definition and construction of a customer experience, specifically in a retail setting. The experience concept has therefore been discussed, predominately, from the perspective of Pine and Gilmore’s Experience Economy and Schmitt’s Experience Marketing. It was found that an experience is in its basic form is a cognitive process triggered by sensory engagement. Pine and Gilmore differentiate customer experiences along the spectrum of two dimensions; customer participation and immersion level. Schmitt, however, emphasises the communicative appeal to senses, emotions, cognitive thinking and behavioural lifestyles and need for affiliation and self-improvement (relate). However in the retail setting it was found that customer experiences are generated from the static and dynamic elements constructed in the mind of the consumer based on the individual prejudices and preconceptions.

Key components classified as superior conduct in constructing retail experiences have been identified to ensure greatest probability of creating static and dynamic elements that foster positive brand perception. These components are:

- Sensory engagement – mentally and physically - Coherence between static and dynamic elements and the corporate brand identity - Consistency in communicated message across all customer-brand touchpoints, (within the retail setting and across all marketing communication efforts).

Royal Copenhagen’s newest retail initiative The Royal Cafe has been used as a case study example to examine the nature of The Royal Cafe’s customer retail experience. A visual analysis was employed in order to test the key components and gain insight in to their likelihood of producing positive brand perception and improved business performance. The limitations of this thesis have unabled the construction of a reception analysis, hence the visual analysis builds on theory from

of 49 predominately Kress and van Leeuwen, Peirce and Barthes through the interpretation of the author. It was found that the static elements of The Royal Cafe experience communicate a consistent message in coherence with the new corporate brand identity of Royal Copenhagen. The visual communicated theme illustrate several style clashes appealing to the cognitive engagement, however it was found based on Pine and Gilmore’s model of Experience Realms that The Royal Cafe experience lack physically engagement in order to assure a customer-brand relationship that will generate customer longevity for Royal Copenhagen, hence improved durable business performance in the long run. Therefore it can be recommended that The Royal Cafe should construct experience more along the notion of Experience Economy than Experience Marketing as they do now.

Total characters of Executive summary without spaces: 2825/2200 = 1,28 pages

Tabel of Content

of 49 Page 4 of 49 1 INTRODUCTION

“Tell me and I’ll forget, Show me and I might remember, Involve me and I’ll understand “ – Benjamin Franklin (Lindstrøm, 2006)

The retail industry of today is a hyper-competitive environment where organisations are participating in an ongoing battle to ensure customer1 preference and loyalty (Healy et al.; 2007). In this brand orientated consumption consumers are experiencing an over exposure of marketing stimuli, hence they have developed complex webs of filtration in relation to which stimuli they allow themselves to be affected by (Pickton and Broderick; 2005).

Creating memorable retail experiences is one of the ways that retailers today are trying to break through the filtration and fostering strong relations with their customers. By developing branded experiences that engages and emotional involve consumers, organisations has the possibility of bringing the brand to life and enhance the consumers’ positive perception of the brand.

On the Danish retail scene, experiential retailing is only showing hints of visibility. Royal Copenhagen is one of the Danish companies that are demonstrating its understanding for the importance of engaging customers in an experience of the brand; hence they initiated The Royal Cafe as a space of brand exploration.

Thesis Statement: Seen form an experiential retailing perspective, how will the visual communicated customer experience of The Royal Cafe affect the corporate brand perception of Royal Copenhagen?

1.1 OBJECTIVES

Four objectives have been defined in order to specify the scope of this thesis: - What is a customer experience? - What characterise the criteria for success in creating customer retail experiences? - Theoretically, how can customer retail experience impact brand perception?

1 The terms ‘consumer’ and ‘customer’ are used interchangeably throughout this thesis, as it is operating within the B2C market.

of 49 - Theoretically, what affect might experiential retailing have on business performance?

1.2 SIGNIFICANCE OF THESIS

There is an intensified challenge for organisations to differentiate themselves in today’s ever- changing business environment. Branding and marketing efforts are moving towards more creative ways to obtain the customers’ attention. “[...] you have to look for other dimensions with which to attract consumers: not the functional aspects of products, because you don’t own those any more, but the emotional aspects, which is really what branding is about” (Pickton & Broderick; 2005)

Experiential marketing has become the leading application to obtaining this emotional differentiation. A successful experience is however highly depended upon consumers’ perception, hence, crafting and implementing an experience is difficult for organisations to control. Furthermore, it is important that everything an organisation does is supported by the corporate identity in order to create a perceived relevance and authenticity for the customer.

Therefore, how do we characterise experience so they create the desired customer impact ultimately delivering improved business performance. These factors of experiential marketing demonstrate an interesting and complex task for any organisation; hence this thesis sets out to uncover the theoretical best practice for organisation to successfully create customer experiences.

1.3 METHODOLOGY

This thesis takes on the scientific method of philosophical hermeneutics in answering the thesis statement. This methodology emphasises that understanding is not a method but a premise of existence (Skinner, 1986). Our prejudices and preconceptions, as receivers of communicated messages, are what make understanding possible. Hence customer experiences are created individually and no two experiences are alike as human being does not possess exact same preconceptions. This perspective however entails that there exist no method to distinguish reality, hence what is good and bad interpretation! As cause of this fact, this thesis will theoretically substantiate an analytical strategy from which the analysis will be compared and contrasted in gaining insight into the affect of customer experiences on corporate brand perception.

1.4 THEORETICAL FRAMEWORK

The theoretical framework is a vital element in the answering of thesis statement, thus the employed theoretical foundation will be addressed when dealt with respectively.

1.5 STRUCTURE

Part 1: This thesis take outset in a clarification of the change society and customer needs that has paved the way for new business conducts, increasingly employing experiences in their customer-brand communication. This section serves the purpose of putting the experience concept in to perspective within an integrated marketing communications context.

Part 2: The thesis will move on to a discussion of the experience concept from predominately the perspective of Experience Economy (Pine & Gilmore, 1999) and Experience Marketing (Schmitt, 1999) in theoretically substantiating a definition of customer experience.

Part 3: Part three narrows the customer experience perspective in focusing solely on the customer experience created in a retail setting. It will be argues that the retail environment, i.e. consumption situation, is the still the most ideal communicative customer-brand touchpoint, hence the ideal experiential touchpoint. The thesis will gain insight into the construction of experiential retailing (Healy, et al, 2007), based on the previous defined definition of experience.

Part 4: Based on the theoretical insight the thesis will propose an empirical model illustrating a standard, i.e. the analytical strategy, from which to evaluate the effectiveness of customer experiences in a retail environment.

Part 5: The following part will set out to test the empirical model through a case study of Royal Copenhagen’s integration of The Royal Cafe as an experiential element of their retail environment. An introduction of Royal Copenhagen including a definition

of 49 of their external communicated corporate brand identity will be made in order to make a comparison with the interpreted experience.

Part 6: Part five will conduct a discourse analysis on the visual language present in The Royal Cafe, drawing upon Kress and van Leeuwen, Barthes and Peirce’s theoretical perspectives in clarifying the theme-atrical experience. From the defined customer experience, sensory engagement will be identified, an evaluation of customer response will be theoretically presumed and a comparison will be made to the corporate brand identity of Royal Copenhagen. Lastly, the thesis will reflect upon Royal Copenhagen’s business outcome from constructing customer experiences as derived from The Royal Cafe.

1.6 DELIMITATIONS

When working within the scientific tradition of philosophical hermeneutics it implies that scientific understanding is created through reception analysis. Hence it would have been ideal to research the holistic perceive experience from customer interacting with The Royal Cafe, thus, both the static and the dynamic elements. Similar it would have been plausible to research the attributes connected to the sensory experience of dinning at The Royal Cafe to fully elaborate on the perceived experience. However, deriving theoretical understanding from this type of reception analysis lies outside the theoretical scope of the author’s field of study. Furthermore this thesis has chosen to accentuate the theoretical construction of an experience in order to fully comprehend the nature of experiential retailing and how it from a managerial perspective can be used, thus limiting the thesis scope due to limitations of pages.

For the same reasons as above the thesis have been limited in its details of relating concepts such as Customer Relationship Management, Customer Loyalty and Branding, theoretical areas that contains extensive depth however narrowly represented in the thesis.

of 49 2 THE CHANGING BUSINESS AND SOCIETY

Over the recent decades, extraordinary changes in the marketing environment have altered the way in which organisations do business and build lasting relationships with their customers. Stuart- Menteth et al. (2006) argues that our present society is built on a consumption-driven economy, in which value is created during consumption, which defines the identity of the consumers as possessing attributes such as active, cynical, knowledgeable, time-constrained, tribal, individual, demanding and experience seeking – a combination that has been labelled as ‘the new consumer’. These new consumers are setting new standards for the conduct of building customer relationships by demanding a consumption process that fulfils their need for integrity, meaningfulness, relevance, social justification, customisation, excellence in expectations and participation – hence they demand an experience. Consumers seek to become part of an experience, rather than merely encountering finished products or images, i.e. they seek inclusion through participation (ibid).

Schmitt (1999) clarifies three key changes in society which he argues to be the reason for the new conducts of customer relationship management; the omnipresence of information technology, the supremacy of the brand and the ubiquity of integrated marking communication.

2.1 THE SUPREMACY OF THE BRAND

A brand is “the totality of what the consumers take into consideration before making a purchase decision” (Pickton & Broderick, 2005). Hence, branding strategies builds on differentiating products and organisations, and to build economic value for the consumer and the brand owner. Branding structure has moved beyond the primary concern with products and services and since the mid 1990’s the focus has been on the organisation in its totality which has heralded the introduction of the corporate branding concept (Balmer, 2009). The increasingly short product life-cycle and the fact that product brands are easily copied results in a handicap for many organisations. Balmer (2009) argues that corporate branding is not subjected to such pitfalls as values associated to a corporate brand can be distinct and enduring through the corporate personality, -identity and -image, thereby providing a superior basis for brand differentiation.

The value of a brand from a customer perspective is not only about distinguishing a better brand from the rest, but about which brand fits me (the customer) the best (Pickton & Broderick, 2005) .

of 49 As consumers we are searching for products that define us. “Choosing a brand becomes a way for one group of consumers to differentiate themselves from another.” (Miller & Schenitz, 1990). Our consumption is turning into a communicative statement of identity – portraying our personal brand through the brands we associate ourselves with (ibid). Our brand oriented society have reach a point where a strong brand position is expected, thus consumers now look beyond, to the values and beliefs of the organisational identity as the differentiation factor (Balmer, 2009). However, branding only really works if everything an organisation does support what they stand for, hence their corporate brand identity is expressed across all brand touchpoints.

2.2 INTEGRATED MARKETING COMMUNICATION

Communication take place even if unplanned or unconscious, thus constantly impressions and images are being formed (Bernstein; 1984). Thus, it essential for an organisation that the same message of identity is communicated across all touch points, to obtain the greatest impact on its customer through a consistent reference point (Pickton & Broderick; 2005).Integrated marketing communication is “the management process of integrating all marketing communications activities across relevant audience points to achieve greater brand coherence” (Pickton & Broderick, 2005). The developments in information technology have opened up for an almost endless range of communication channels characterised by the potential for rich, interactive, location-independent dialogue (Stuart-Menteth et al., 2006). This has among others made the distinctions between communication and sales channels blurry, given rise to the concept of integrated marketing communications in acknowledging the need to provide consistency in the diverse ways organisations interact with customers (Balmer, 2009).

2.3 SUMMARY

Customers, society and industry are telling organisations that their external communication2 should always be in coherence with their corporate brand identity for especially to reasons; one being the fact that customers today are valuing the corporate brand higher than product brand, secondly because the authenticity and integrity of an organisations communication and actions will be diminished if customers detect disruptions from the core identity. Hence the need for integrated marketing communication is vital to any organisational conduct in present time.

2 Vital for internal communication as well, however not address in this thesis

of 49 3 THE CONCEPTUAL EXPERIENCE

This following section will set out to clarify the concept of an experience and discuss how it is being employed in different context. Conclusively a general definition and pattern of construct will be made upon the concept of experience.

3.1 EXPERIENCE ECONOMY

The idea of customer experiences has its origins in the work of Joseph Pine and James Gilmore (Buttle, 2009), they discuss customer experience from the perspective of experience economy, arguing that an experience is as real an offering as any service, good or commodity, i.e. a stage experience should be viewed as the next stage in the economic value. In order words, when businesses are charging for the time customers spend with them, first then are they in the experience business and operating within the concept of experience economy (Pine & Gilmore, 1999). Customers have always had experiences, but Pine and Gilmore recognises a new form of value- adding economic activity that has previously been hidden or embedded in the service economy (Buttle, 2009).

Pine & Gilmore define experiences as being a staged and planned event similar to a theatre or movie. “An experience occurs when a company intentionally uses services as the stage, and goods as the props, to engage individual customers in a way that creates a memorable event” (ibid). Their definition of experience accentuate the process of interaction and engagement, thus, experiences are inherently personal, existing only in the mind of the individual who has been engaged on an, emotional, physical, intellectual or even spiritual level.

3.1.1 SETTING THE STAGE

Within Pine and Gilmore’s (1999) framework of thought, four broad categories of experiences have emerged; entertainment, education, esthetic and escapist. These four realms, is a result of an interplay between two dimensions; customer participation and connection as visible in Figure 1. Hence, an experience is characterised in relation to the level of customer participation (horizontal) from being an observer or listener (passive participation) to being an actor on stage (active participation), so to speak. The second dimension (vertical) is the level of connection, or environmental relationship, which unites the consumer with the experience, ranging from

of 49 absorption, i.e. occupying a person’s attention by bringing the experience into mind, to immersion, i.e. becoming physically of virtually a part of the experience itself.

Entertainment is a passive absorption experience and general occur when you watch TV or listen to music; hence the participation level is fairly low. Educational event, being a lecture or dance class, involves a higher level of participation in comparison to entertainment, however Pine and Gilmore argues that the customer is still somewhat outside of the action process. Escapist experience can both educate and entertain but involve a create level of immersion, e.g. climbing Mount Everest, or something less extreme, participating in a 3 mile race. Minimizing the customers’ participation level, the event becomes an esthetic experience, i.e. the customer is still immersive in the activity or environment but transformed to a role similar to a tourist where everything is seen from a distance but not affect in any way. Conclusively, Pine and Gilmore state that the richest experience encompasses aspects from all four categories. Applying these types of experiences is useful when setting the stage for any experience it gives direction to which kind of experience is desired and guidelines for how to engage customers in the process.

3.1.2 EXPERIENCE CONSTRUCTION

Pine and Gilmore (1999) proposes a framework for creating unique and memorable experiences, evident in Figure 2. An experience takes outset in building a themed foundation that is the organisational principle of an experience, driving cues such as design elements and staged events towards a unified storyline which in its totality captivates the customer. These cues serve the purpose as vibrant source of connotations along the spectrum of the five senses – sight, sound, touch and smell (see appendix 1 for elaboration. The stimulation of senses evokes customers’ cognitive interpretation and generates various impressions - the memories a customer take away. Pine and Gilmore argues that memorabilia should be added to any experience in order to prolong the impressions within the mind of the costumer.

3.1.3 SUMMARY

Experience Economy considers experience as being the next economy value; “instead of relying on our own means to experience the new and the extraordinary – as has been done for ages – we will increasingly pay companies to stage experiences for us, just as we now pay companies for services

of 49 we once delivered ourselves, goods we once made ourselves, and commodities we once extracted ourselves” (Pine and Gilmore, 1999). Experience Economy accentuates the key element of actively customer participation and engagement in the experience in order to live up to the demands of economic value for an organisation. According to Pine and Gilmore, such experiences is constructed by using service as the stage and goods as the pops to orchestra a true theatrical performance.

3.2 EXPERIENCE MARKETING

Despite the fact that the industry are confirming the presence of experience economy in connection with more and more organisations questioning their ways of conduct by evaluating what they would do differently if they charged their customers admission - most theorist and academics argue that experience still primarily exist within the context of marketing (Schmitt, 1999; Healy et al., 2007; Yalch & Spangenberg, 2000; Kotler & Keller, 2009; Brakus et al., 2009; van Tongeren, 2003, to name a few).

Customers want “[...] products, communications, and marketing campaigns that dazzle their sense, touch their hearts, and stimulate their minds. They want products, communications and campaigns that they can relate to and incorporate into their lifestyles – they want products, communications and marketing campaigns to deliver an experience.” (Schmitt,1999). The change in customers’ needs have paved the way for experiential marketing, a concept that in its simplicity focuses on the customer experience.. According to Schmitt (1999) “Experiences are private events that occur in response to some stimulation, e.g. as provided by marketing effort before and after purchase. Experiences involve the entire living being. They often result from direct observations and/or participation in event – whether they are real, dreamlike, or virtual”. As marketing communication means customer experiences are used to enrich the brand equity3a customer hold for a brand or an organisation (Kotler & Keller, 2009).

3 Aaker (2002) defines Brand equity as following: “Brand equity is a set of assets (and liabilities) linked to a brand's name and symbol that adds to (or subtracts from) the value provided by a product or service to a firm and/or that firm's customers. The major asset categories are: Brand name awareness, Brand loyalty, Perceived quality and Brand associations"

of 49 3.2.1 CREATING EXPERIENCES

Schmitt (1999) proposes that an experience is build on tactical components such as visual and verbal identity, communications, product presence, co-branding, spatial environments, electronic media and people, to name the more general headings (Schmitt, 1999). These components are used integrated or separately to create brand-related stimuli through sensory, emotional, cognitive or behavioural appeal in generating a positive and memorable experience as evident through Figure 3.

3.2.1.1 Types of experiences - Strategic Experiential Modules (SEMs) Schmitt (1999) argues that the mind is constructed of specialized functional parts, providing a perfect framework for the different types of experiences a marketer can appeal to. He defines these types as strategic experiential modules; Senses, Feel, Think, Act and Relate.

Senses The purpose of sensory experiences is to provide aesthetic pleasure, excitement, beauty and satisfaction through sensory stimulation. Creating sensory experiences entails planning the sensory (visual) identity elements which are the properties, product, presentation and publications of an organisation. In more detail it is the physical locations and cars, the physical product and its core service, packaging, uniforms and shopping bags, brochures, business cards and advertising. The communicated message at each of these touchpoints is created through primary elements which relates to the five senses, e.g. colour, shape, loudness, pitch, material and texture. These elements are the building blocks of style which create distinctiveness and consistency in the communicated message. The theme adds meaning and content to the style and serves as a mental anchor and reference point for the customer.

Emotion Emotional experiences refer to act of affecting the customer’s emotions. The feel experience range from mild moods to strong emotions, triggered primarily by communication and people, hence the consumption situation is critical for emotional experiences as well as the communication prior to consumption has influential power. It is a tricky experience to create as many emotions are thought of as bipolar, e.g. being satisfied opposing dissatisfied, there is no in-between, thus the emotional appeal should be carefully planned to make sure it does not evoke negative emotions.

Cognition Think experiences are the creation of cognitive and problem-solving experiences that engages the customer creatively through the “think principle”; a sense of surprise, a dose of intrigue and a smack of provocation. These types of experiences appeal to the customer’s creative thinking about an organisation and its brand, however, appealing to think through surprise even provocation might not be a given success for every context, as well as not every type of customer would be compelled to invest the time an effort of figuring out the message.

Behaviou Act experiences are the enrichment of customer’s lives by enhancing their physical r experience, showing them alternative ways of doing things, alternative lifestyles and interactions. Hence act experience appeal to the modification of behavioural patterns and demonstrating new, or enhancing existing long-term lifestyles, most often occurring from private or public interaction.

of 49 Relate Relate experiences includes aspects of all of the above types of experiences in relating the individual to his or her ideal self, other people and cultures. The primary objective is to build a relationship between the social meaning of the brand and the customer, hence these experiences appeal to the desire for self-improvement, social recognition and affiliation (Schmitt, 1999).

3.2.1.2 Constructing tactical components in accordance to experiential modules TACTICAL COMPONENTS ST C V P C Sp E P o er r o ati l e RA m ba o - al e o m l d b En c p TE u an u r vir t l n d c a on r e GI i Vi t n me o c su d nt n C a al P i i t Id r n c EX i en e g M PE o tit s e n y e d RI n i c a EN e Senses TI Feel AL Think

M Act OD UL ES Relate - SE M From a holistic perspective, an experience will most often be a combination of several of the above described types. Schmitt (1999) proposes that experience marketing should be planned following an experience grid in which the types of experience appeals and the tactical components are coordinates to make the best fits, see Table 1. The dark turquoise squares in the grid are indicating which tactical components within the marketing communication mix are most plausible in communicating each experience module. Thus, the model accentuating the best fit, however, Schmitt (1999) recognises that from a certain view point everything we do and do not do communicates a message.

of 49 3.2.2 SUMMARY

Experience Marketing has evolved as the newest direction within the marketing field as a direct effect of the omnipresence of information technology, the supremacy of the brand and the ubiquity of integrated marketing communications and entertainment in today’s industry as well as society. Experience is used as an affective marking communication means created through sensory, emotional, cognitive, behavioural or relatable appeals which are communicated through the tactical components of marketing communication plan. Experience Marketing effort focuses on influencing the customer prior to consumption, and primarily during the consumption process with the purpose of engaging customers in an emotional bond forging a relationship that may lead to increased purchase, premium prices and hopefully continues purchase.

“The degree to which a company is able to deliver a desirable customer experience – and to use information technology, brands, and integrated marketing communication and entertainment to do so – will largely determine its success in the global marketplace of the new millennium” (Schmitt, 1999).

3.3 DEFINITION OF EXPERIENCE

According to Brakus et al. (2009), brand experience, in its conceptual context, is the subjective, internal consumer response, and behavioural response evoked by brand-related stimuli that are part of a brand’s design and identity, packaging, communications, and environment. Hence it is the cognitive process of generating satisfaction, pleasure and preference, leading to an approach behaviour towards an organisation, a brand or a retail store. This process is among others argued for by Donovan & Rossiter (1982) in a discussion of the Mehrabian-Russel environmental psychology model (Figure 4), similar to the Stimuli Organism Response (S-O-R) framework (Figure 5), among others discussed in Thang & Tan (2002) and lastly, as argued from in Yalch and Spangenberg (2000) framework for integrating environmental factors, nonverbal responses and shopping behaviour (Figure 6).

of 49 These cognitive outcomes are triggered by the sensation and stimulation of our senses. From a marketing point of view different types of experiences are created by appealing to a customer’s senses, emotions, cognition, behaviour and relation. However the actual cognitive process is initiated by the stimulation of the senses, and then, depending upon the message that organisations what to communicate, the appeals within the marketing communications are created accordingly. As previously clarified, the experience originates from the interaction or contact with tactical components as argued for by Schmitt (1999), whereas Pine and Gilmore classify these points of contact as cues. Buttle (2009) accentuates a general umbrella concept which encompassed the aspects of both tactical components and cues in his definition of touchpoints4, thus the characteristic of the sensory experience depends upon the brand touchpoint a customer encounter and customers’ individual line of sense-making as argued for by the perceptual process within consumer behaviour theory (Solomon et al. 2007) (see appendix 2 for elaboration).

In a more abstract version, experience is a differentiating value-add, a marking tool, or may be the core offering of an organisation. Within this thesis experience will predominately be employ ad a means of marketing, creating awareness of a brand, differentiation, linking the right associations to the brand in the mind of the customer, eliciting positive brand judgement and/or facilitates a stronger customer-brand relationship (Kotler & Keller, 2009). Experience is marketing communication tool used to enhance the brand equity a customer holds for a brand by extending communication beyond the functional benefits and actively engage the customer in an experience surrounding the brand.

4 EXPERIENTIAL RETAILING

Initially the retail store was built on the concept of direct selling to private persons. It was, and still is, a physical outlet that allows customers to sensorial evaluate products prior to purchase. Experiential Marketing accentuates the consumption situation as it is an organisation’s main

4 Buttle’s terminology will be employed throughout the rest of this thesis and defined as websites, service, centres, warehouses, contact centres, events, exhibitions, trade shows, seminars, webinars, direct mail, e-mail, advertising, sales calls and retail stores.

of 49 consumer touchpoint, thus the ideal setting for evoking experiences. This notion is supported by van Tongeren (2003) in arguing for the retail store environment as a more ideal communicator of values than commercials; hence the consumer has chosen to be there and is therefore more receptive to its stimuli. In the following section, this thesis will elaborate on the construction of experiences evolved from the interaction with a retail touchpoint and accentuate the experience providers in this branding setting.

4.1 PREVIOUS RESEARCH WITHIN EXPERIENTIAL RETAILING

With few exceptions, the existing experiential retail literature has focused mainly on the isolated testing of static design elements, i.e. the tangible features, of retail stores. Often research examines the effect of different styles of music, crowdedness, number of ails, selection of products, colours, and olfactory on store or product quality perception, rather than how consumers holistically experience the static elements in a branded space (Healy et al., 2007; Miller, 2009; Yalch & Spangenberg, 2000). The holistic environment is of significant interest to researchers of experiential conditions, hence the lightning, odours, displays, activities, arrangement of merchandise, size and style of the interior design/architecture, the personal interaction, each impact on the rate and willingness of consumers to make purchases (Healy et al.; 2007).

4.2 CUSTOMER-BRAND TOUCHPOINTS IN A RETAIL SETTING

In the retail setting the brand touchpoints a customer encounter from interacting with the store environment can, according to Healy et al. (2007), be distinguished as the static elements and dynamic elements. These elements represent the only managerial control of customer experience and the main source from which the customer interpret impressions, hence it becomes vital to link the “right” associations to the “right” channel of touchpoint.

4.2.1 STATIC DESIGN ELEMENTS

Static design elements are characterised as the cold, hard, tangible features of the store that facilitates the functional characteristics of the products, and the sensual and psychological benefits that derives from the stores hard design features. Schmitt (2003) further details the characteristic of the static elements in describing them as aesthetic qualities counting the physical goods, i.e. it functional attributes, the look and feel of a store, which include the logos and signage, packaging,

of 49 brochures and advertising that help to establish the store’s identity and brand experience, and the experiential theme. Healy et al. (2007) adds to the notion of static elements by arguing that the they are represented through the atmospheric conditions of the store, thus the visual, aural, olfactory and tactical cues corresponding with Pine and Gilmore’s (1999) notion of appeal to the five senses and similar to sense experience within Schmitts’s (1999) strategic experiential modules. The static elements create a store environment and communicate a message though the persuading sensual and psychological themes which allow the customer to deduce product qualities and make informed consumption decisions (Healy et al., 2007).

4.2.2 DYNAMIC ELEMENTS

Contradictory, dynamic elements relate to the exchange of dynamic information with emphasis on the human interaction through the customer-staff-store interface (ibid). In correspondence with the last strategic experience module, i.e. Relate, dynamic elements could be defined as the relational context in a retail store facilitating the customer’s relational connection to a retailer via interaction (Schmitt, 2003). Healy et al. (2007) substantiate that themes and theatrics is equally a constituent within dynamics, creating a symbolic narrative that runs throughout the retail store generating design consistency and a story that may reflect a period, place or fantasy. Pine and Gilmore (1999) similar accentuated the need for consistency in symbolic design elements supporting a broad planned theme throughout the store. They argue that a theme is the foundation for any experience and extends the concept in encouraging to a theatrical store setup as a vital component in constructing a successful engaging, rich and memorable experience. Healy et al. (2007) employs the terminology; retail theatre as a concept for using the dynamic interaction in a way that diffuses the boundaries between the service provider and the customer. This type of interaction will enable the customer to gain a sense of organisational citizenship and perceive a degree of control over the operations of the store and the generated values.

4.3 RETAIL EXPERIENCE

The retail experience occur in the flow between static and dynamic elements and demands that customer actively participate in the experience; taking cues from the static environment of the store in order to produce the dynamics of the retail experience (ibid), hence the customer’s perception,

of 49 decision-making, consumption and satisfaction is directly connected to the message they derive from both elements of the store.

4.4 SUMMARY

The art of experiential retailing lies in the planning and execution of which associations to link to the brand encounter, hence ensuring that the stimuli evoked through static and dynamic elements communicates the right message and is in consistency with the identity of the organisation. The retail setting is the main direct channel an organisation has with its customers and the ideal setting for bringing the brand to life through experiences. However as well as the retail store becomes the ideal setting for positive influence, the chances of having a negative effect on customers are just a big, thereby setting high standards for the research and planning prior to such constructs.

of 49 5 EMPIRICAL MODEL

The thesis will now summarise its obtained insight concerning the construction of customer experiences in a retail stetting in an empirical model, integrating the key components of superior organisational conduct which was found vital in business today.

This thesis has narrowly accentuated the retail setting as the customer touchpoint from which experience is created. Experiential retailing is composed in an interaction of several touchpoint generally classified as static and dynamic elements (indicated by the first two square boxes). These touchpoints are experienced in a cognitive process through the customer’s sensory system creating a cognitive response that forms the impressions and perception of the consumer (the red process in the empirical model).

The customer’s perception and impressions are cognitively weight against ones expectations, prejudices and preconceptions in the process of developing a cognitive response. From the cognitive evaluation an attitude towards the experience is form such as satisfaction or dissatisfaction.

of 49 The key notion for any retail experience is to create coherence and consistency throughout the communicated message at each touchpoint a customer interacts with. Transparency and cognitive links is created by using the corporate brand identity as the guiding principle for all activities (illustrated by every arrow leading towards corporate brand identity). Experiences are used as a means of accentuating and bringing the brand identity to life in order to enriching customer’s perception of the brand through the creation of cognitive ties between customer and brand. A retail experience that is constructed, and fulfilling the components of superior conduct, as proposed through the empirical model, will obtain greatest probability of generating positive brand identity perceptions of the organisation, thus improve business performance in the long-run through the longevity of customer loyalty.

of 49 6 ROYAL COPENHAGEN

This thesis will now move into the case study analysis, in which the theory discussed in part one to four will be applied to a case in verification of the empirical model presented in section 5. This thesis will employ Royal Copenhagen for its case study with specific interest in the Royal Cafe.

6.1 CORPORATE BRAND IDENTITY

Royal Copenhagen is a world-famous brand known for its exclusive, high quality porcelain products and faultless design and craftsmanship. The organisation pride itself on its Danish nationality and royal genes that has created the foundation of the company and still is, as the organisation has moved beyond the boundaries of Denmark with operations in the USA, EU and Asia, and employs more than 500 employees (RC’s corporate Website5).

RC has been going through a transformation the last 6 years. The process has focused on leveraging the historical organisation into a more modern era under the motto “Rethink History”. Branding and storytelling has been the essential factors in leading the organisation towards a younger and wider target group supported by the introduction of new products such as the Element (see picture), Contrast and Function tableware collections (ibid) (see appendix 3).

6.2 ROYAL COPENHAGEN’S FLAGSHIPS STORE

In December 2006, Royal Copenhagen reopened their flagship store in the shopping centre of Copenhagen with an integrated shop, museum, florist and cafe, hence The Royal Cafe. This integrated retail environment was created in the hope of making a vibrant, inviting shop that provides a rich experience and world-class service – some call it a lifestyle oasis.

5 This thesis is relying on the communicated message of the corporate website in determining RC’s corporate brand identity.

of 49 6.3 THE ROYAL CAFE

This thesis will now move on to an analysis of The Royal Cafe with the aim of uncovering the nature and characteristics of the customer experience created from interaction with the cafe. The analysis will focus on examining a representative selection of touchpoints connected to the cafe with the purpose of uncovering the presumed customer perception of the communicated message from a visual perspective.

6.3.1 VISUAL COMMUNICATION

Visual communication is always coded. It seems transparent only because we know the code already, at least implicitly – but without knowing what it is we know, without having the means for talking about what it is we do when we read an image (Kress & Van Leeuwen, 2006). As visual interpretators we as human beings are biased by history, values, society and culture, hence our perceived meaning of visual communication will never be identical. However, like linguistics, visual structures point to particular interpretations of experience and forms of social interaction. What is expressed in language through the choice between different word classes and clause structures, may, in visual communication be expressed through the choice between different use of colours or different compositional structures.

According to Pilditch (1970), human beings have learned how to make associations between things and use this learning to help us understand our world – to create meaning for ourselves. Marketing communicators are able to put an understanding of such things to good use in developing brand and corporate identity (ibid).

The analysis will draw on general assumptions based on theoretical viewpoints within visual semiotics from predominately Kress and van Leeuwen (2006) in evaluating if the message derived from the experience is in accordance with the model proposed in section 5. From the result of the

of 49 analysis the thesis will discuss the potential customer and organisational outcome of TRC experience in clarifying its complimentary effect on Royal Copenhagen’s corporate brand perception.

6.3.2 DESCRIPTION OF THE ROYAL CAFE

The Royal Cafe is a concept cafe creatively created by Lo Østergaard and Rud Christiansen in corporation with Royal Copenhagen. They opened the doors in April 2007 (visitcopenhagen.dk) with the hopes of creating a “[...] unique space to promote the best of traditional Danish food and Danish design. The result is a pure anti-Starbucks experience”, according to Rud Christiansen (RC’s corporate website). The theme of the store builds on Danishness, design, our royal heritage and humour, and has according to Rud Christians in an video interview for Monocle, created a “[...] Danish funky, baroque clash of styles and some modern designs[...]”, he further states that he calls it “[...]sort of a mini Danish royal castle”(see appendix 4).

6.3.3 CUSTOMER-BRAND TOUCHPOINTS

But which elements create this feeling of a mini Danish royal castle? and how is the theme expressed in the store? From a holistic impression what are the connotations form the cafe expressing about Royal Copenhagen’s corporate brand identity? These rhetorical questions are leading the next section in analysing the customer-brand touchpoints within The Royal Cafe. The analysis will focus on the static elements within TRC, more specifically the food, paintings, furniture and tableware6.

6 See delimitations section 1.6

of 49 6.3.3.1 Logo The logo is the brand element that is frequently communicated through symbols and pictures than words. Generally, the logo is a strong indicator of brand identity; hence it is feasible to include TRC’s logo in analysing the brand identity communicated in the cafe. The Royal Cafe’s logo depicts a frog with a crown on its head, from its bubbly aura rise six flowers. On top of the frog stands a girl with her leg bended like if she was a ballerina and a butterfly is flying next to her. The logo is all in white, with the exception of the bottom statement; “THE ROYAL CAFE”, written in very bright red bold letters. The logo is craved in one piece and added to the white board, the adaption of purely white, except for the title creates a very simplistic expression. Based on Peirce (1894) triadic model of interpretation the analysis will attempt to assign meaning to the logo (see appendix 5).

The figures in the logo connotes to the fairytale universe in more than one way. The frog, being the signifier, show striking resemblance to the Frog Prince, the object of reference, in Brother Grimms fairytale of a spoiled princess who kisses the frog and he then turns in to a lovely prince, thus the crown. The girl standing as a ballerina, (the signifier) in the upper part of the logo, connotes strong resemblance to H.C Andersen fairytale of Tommelise, the object of reference (in English Thumbelina); a little girl at the size of a thump who, at some point in the story, is saved by a butterfly, as in the logo. If looking for meaning outside of the fairytale universe, RC has several porcelain figures as part of their collection, many of which take outset in fairytales and fantasy. One look at for example the figure of Tommelise and the toad, and RC’ collection of Good Luck Frogs, illustrates very clearly the possible source of inspiration. These elements within the logo take on iconic sign identity in creating meaning through resemblance (Peirce,1894). TRC’s logo encourages cognitive links between the cafe and the universe of fairytales, thereby transferring characteristics of fantasy, joy and colourful scenery but also connotes a link to H.C. Andersen, the famous Danish writer behind many of the fairytales and stories we heard as children. H.C Andersen is part of the Danish legacy and a good representation of Danishness7.

7 http://www.hcandersen-homepage.dk/

of 49 6.3.3.2 Smushi The foundation of the Royal Cafe builds on being Danish, illustrating Danish royal heritage, traditions and quality design. Therefore it is no wonder that the food served in the cafe similar seeks to represent a flavour of Denmark. TRC has positioned themselves in a distinct position through their innovative creation of smushies; a clash between our Danish traditional Smørebrød (open- faced sandwich) and the Japanese sushi.

This signature dish as illustrated in three variations above, have become a brand-recognisable touchpoint embedded in the essence of The Royal Cafe. Rud Christiansen characterises the choice of food style as a breach from the traditional rules of Danish smørebrød by mixing the taste and presentation of the dish with elements from the Japanese kitchen. The specific selection of food menu demonstrates the embedded international perspective of the cafe by forging the traditional Danish with new and modern food (at least a relative modern food type in the Danish kitchen8) (see appendix 2). By not vowing solely to Danish the concept opens up for a broader target audience domestic and international by creating a bridge between two or more cultures. This fact influences the tourist-attraction value, again, both in Denmark but also abroad enhancing the possibility of success when expanding to other countries. By now The Royal Cafe exist in Singapore and Tokyo and soon in Seoul as well, focusing only on geographical areas where Danish and Scandinavian

8 A general assumption based on just-eat’s blog http://blog.just-eat.dk/: “Sushi er inden for de seneste par år blevet et kæmpe hit i Danmark […] sushi er populært som aldrig før. Dette har også fanget mediernes opmærksomhed:” Translated: Within resent years, sushi has become a major hit in Denmark […] sushi is popular like never before. This has also caught the media’s attention:”

of 49 designs in generally have been meet with great interest and success; namely the Far East as Rud Christiansen phrases it (Monocle interview, see appendix 4).9

6.3.3.3 Images in the cafe On the entire back wall of the cafe, on top of the pale pink wall is painted a collage of various elements such as flower prints, a Royal Copenhagen teacup, Kai Bojesen’s wooden monkey, diamonds in various colours, a pair of sumo wrestlers, a horse, a cow and a pig, to name a few.

The most salient elements in the collage are the flower prints and the teacup. The flowers illustrate a direct connection to Royal Copenhagen’s first-class series; Flora Danica, which is worldwide renown for being of excellent handcraft. Various flower prints have been incorporate into the collage in a rather large scale and immediately bring forward memories of your grandparents’ old books of “plants and flowers you can find in the Danish nature” based on their iconic resemblance (Peirce, 1894- see appendix 3). The Blue Fluted Half Laced teacup is part of the very first porcelain series within Royal Copenhagen dating back to 1775 and has become a somewhat synonym with Royal Copenhagen. The teacup is the only element strongly saturated in colour where other elements are illustrated in more pale, almost see-through saturation. It is situated in eyelevel perspective for customer in the cafe and recognisable even from the opposite end of the cafe (the entrance).

The wall collage illustrates clear elements relating to Royal Copenhagen through their symbolic meaning. It could be argued that, especially, the teacup provides a connection through its symbolic suggestive relation with Royal Copenhagen (Kress & Van Leeuwen, 2006). The object connotes a meaning and identity as coming from within, as deriving from the qualities of the teacup itself, hence the highly recognisable pattern and shape – an unmistakable product of Royal Copenhagen. The essence of the teacup creates a rub-off effect upon the entire collage thereby generating meaning to other elements through a collected representation within the frame of a wall painted

9 See delimitations

of 49 collage taking on identity as indexical signs (Peirce , 1894 – see appendix 5). It could be argued that the teacup anchors the meaning of elements, hence facilitating the connection of flowers to the Flora Danica series, animal depicturing to Danish agricultural history and Kaj Bojesen’s wooden monkey as a magnify the essence of quality (Barthes1977). However there are elements that seem out of place form the general interpretation of the image such as, the sumo wrestlers and the diamonds, they disrupt form the somewhat classical presence. Nevertheless, by representing all elements in a connected context they come to share same meaning (Kress & Van Leeuwen, 2006). The holistic view of the collage; the composition and colours create a more contemporary feel and look (Kress & Van Leeuwen, 2006), where sumo wrestlers and diamonds become natural elements. Taking in imagery of different styles and time, creates a third meaning, not classical design, not contemporary, but a combination of both – creating a new style, a new time.

6.3.3.3.1 The Royal Portraits The Royal Cafe employs other means of visual communication such as a large portrait of Countess Danner and King Frederik VII looking down upon the customers with serious eyes. However, it has a humours tone, because a witty mind has added a new object to the copy of J.V. Gärtners famous portrait from 1861, thus painted a Royal Copenhagen Mega Mussel teapot in to the painting. These images above, demonstrate the little added detail, even though a bit blurry. The portrait belongs to the Baroque art style developed in Europe from the early 17th to mid- 18th century, emphasizing dramatic, often strained effect and typified by bold, curving forms, and elaborate ornamentation10. However, as the baroque style is represented in The Royal Cafe customers once again experience the humoristic twist to the communicated classical theme. The portrait adds to the royalistic connotation of the cafe, while being a strong representation of the baroque style. “The meter high royal portrait [...] testifies of a vivacious fantasy and a loving eye for the royal legacy” (RC’s corporate website). The portrait creates an object sign connotation,

10 http://wordnetweb.princeton.edu/perl/webwn?s=baroque

of 49 according to Barthes (1977), drawing meaning form the object imposed upon the portrait. Hence the royalistic and classical theme of the portrait is disrupted by the act of humour creating an unconventional expression while demonstrating the royal of Royal Copenhagen.

6.3.3.4 Royal Copenhagen Tableware The food and drinks served in TRC are all beautiful presented by the use of Royal Copenhagen tableware. Every collection is represented and customers are even allowed to chose, themselves, on which plates they want their food served. Enactment of the products allows customers to touch, feel and sense the product. The plate is no longer an object on display but a product that demonstrate its usage through the offering of food. The presentation of the food draws upon the connotations from the tableware based on the invisible vector connecting food and plate. Thereby the cognitive mind draw parallels between qualities of Royal Copenhagen’s tableware and the attributes of the food, hence enriching the customer perception of the presented food.

An experience is created from the sensory interaction with the tableware, generating an appeal to customers’ behavioural lifestyles. The Royal Copenhagen tableware is brought to life though the usage as presentation and serving of food, creating a vivid image of how the customer can use the product themselves. By enacting the product through such experiences TRC are appealing to the customers’ behavioural lifestyles, a lifestyle where value and status are derived from the materialistic possessions one can show others, or a lifestyle where quality food are highly valued thereby the presentation becomes equally important as a supporting factor of the holistic impression (Schmitt, 1999). By taking the tableware out of its traditional presentation and making it more tangible through an experience enhances the customer’s motivation for purchase. The product becomes easier to cognitively enact into their private home environments, hence it becomes more relatable and alive for the customer (Schmitt, 1999).

6.3.3.5 Interior design When dining in The Royal Cafe customers are seated along wide, long buffet tables encouraging to conversation among customers, while relaxing in the famous chair; “ANT” which was customized in a bar height version just for TRC. At the end of the room, beautiful artistic deign chairs surrounds a big old wooden table as King Arthurs’ round table of knights. In the sealing two enormous glass

of 49 chandeliers are shedding light into the room reflecting on the silver birch-leaf patterned paper. The interior have been especially designed and made by Holmegaard, Bang & Olufsen and Fritz Hansen, some of Denmark’s most famous design houses, giving evidence to extensive product placement integrated into the cafe. For especially tourist and visitors from abroad the interior will stand as a clear representation of Denmark as the chosen elements are renowned Danish design. Furthermore the strong presence of the interior adds to the tone of the cafe in being an expression of quality and contemporary design thus reflecting upon the general impression of The Royal Cafe.

The cafe balances between being a cafe environment representing an experiential customer interaction and being a capitalized tourist attraction (visitdenmark.dk). From a discussing angle, the strong Danish product presence strongly indicates, the perhaps hidden agenda that the cafe actually is build with the purpose of expansion into the Far East markets as a marketing tool to promote Denmark.

6.4 THE ROYAL CAFE EXPERIENCE

The following section will set out to clarify the characteristics of the experience a customer will derive from interacting with The Royal Cafe. Based on the above analysis the clarified experience will solely be characterised from the perspective of visual and tangible touchpoints within the cafe.

As a visitor, guest or customer at The Royal Cafe, ones participation level exists as normal cafe behaviour such as drinking coffee, eating light food or cake and first and foremost socialisation with friends. Following Pine and Gilmores model of the Four Realms of Experience indicates that cafe behaviour is more active then solely watching television but less than climbing Mount Everest, hence indicating a participation level somewhere in between passive and active. Taking in clues from the surrounding environment demands very little immersion, hence the customers act in a state of absorption. However from the perspective that the act of eating becomes a way of immersion oneself by experiencing the food served at the cafe, argues form a rather higher level of engagement. Thus the total cafe experience is to an extend defined as a combination of all four realms, however with closes resemblance to a combination of entertainment and esthetic experiences as indicated by the red circle. This definition indicates that the customer experience a high level of entertainment from interacting with the cafe, similar to the kind of entertainment we derive from watching television. However there are indications of the customer experiencing a

of 49 higher level of engagement than simply entertainment. Nevertheless, TRC is still observed from a distance enacting the customer in a role comparable to being a tourist, hence demonstrating interest for TRC but not fully taking part in creating the experience (Pine & Gilmore, 1999).

This thesis have only been able to analyse the static touchpoints of the experience, nevertheless, indications form Pine and Gilmores model demonstrate that customer might not experience dynamic elements through interaction with the cafe based on their interpretation taking place through observation form a distance.

6.4.1 THE THEME-ATRICAL EXPERIENCE

The static elements illustrate a theme characterised by a mix of classical design elements and newer funkier truchpoints. The entire sensory presentation of TRC, hence the theme of the store plays with contrasts between old and refined, and contemporary and edgy, creating a strange environment of bipolar elements. As Mies van der Rohe, the famous German-American architect, said; “God is in the details” 11, and that is the case for TRC. The visual imagery is not disturbed by the many clashes of styles but has created its own style from the clashes. It is a design jungle where customer can explore new details each time they visit and sumo wrestlers and teapots in classical royal paintings will suddenly appear and make the cafe experience more engaging. These types of style twist and humour appeal to customers’ cognitive process by incorporating elements of surprise and provocation, forcing the customer to think (cognition) outside the traditional box.

6.4.2 IDENTIFICATION OF SENSORY ENGAGEMENT

The untraditional and unconventional theme demonstrates a different perspective on life - a new young modern version of the classical Royal Copenhagen – almost like a fairytale. A message that is communicated through the engagement of predominately, the customers’ sensory register within sight, touch and taste in appealing to their senses, cognition and behavioural lifestyles The theme of the store speaks to a new behavioural lifestyle (behaviour/act), cognitively embracing our cultural and social need for self-improvement, social recognition and affiliation. The cafe has created and

11 God is in the details." Speaking about restraint in design, the New York Herald Tribune, 28 Jun 1959. http://architecture.about.com/library/bl-mies-quotes.htm

of 49 experience that intrigues interest, provoke the traditional thinking and first and for most allow the customers to visually live and feel the brand – bringing the brand to life.

6.4.3 COMPARISON

The above analysis demonstrates strong cohesive links between Royal Copenhagen’s corporate brand identity and the visual experience generated from The Royal Cafe.

Table 1 Comparison of Royal Copenhagen's Corporate Brand identity and The Royal Cafe Customer Experience

Royal Copenhagen’s The Royal Cafe Customer Experience Corporate Brand Identity Exclusivity Selection of exclusive product placement Danish Danish design furniture, Food selection is inspired by the Danish kitchen Craftsmanship Danish design furniture, International Smushies, Royal The royal portrait, The name Contemporary Interior decoration, Innovation Smushies, Furniture setup, Visual presentation

Royal Copenhagen is traditionally viewed as a symbol of Danish history; craftsmanship and exclusivity however during their brand transformation in 2006 RC’ shift focus towards a more contemporary and innovative product development strategy under the heading of Rethink History. TRC stands as a clear expression of the new identity of RC. The cafe conveys a message of style clash between the old classical craftsmanship organisation and the new contemporary, humoristic and international orientated brand identity. The thesis concludes that the static elements of the TRC experience is founded on the brand identity characteristics of Royal Copenhagen new brand position, thus fulfilling the requirements set forward by the proposed model in sectio5.

of 49 6.4.4 EVALUATION OF CUSTOMER RESPONSE

As discussed in the methodology section, it is impossible to determine if TRC experience will generate positive or negative interpretation as it depends upon the individual’s prejudices and preconceptions. From a theoretical perspective The Royal Cafe’s retail experience have the potential of being successful in generating positive perceptions of the Royal Copenhagen brand identity. The theme of the cafe appeals to a pleasant and stimulating environment, thus according to Mehrabian-Russel environmental psychology model (Donovan & Rossiter, 1982), generates satisfaction pleasure and arousal. Hence the environment created through TRC experience have the potential of positively affecting satisfaction, the time spend, quantity, and intention to visit the store again, hence an approach behaviour toward the store. Thus, assuming that the average customer process positive or neutral perception of Royal Copenhagen as a brand prior to a visit at TRC, the experience derived from physically and cognitively interacting with TRC will reinforce and/or enhance customer brand identity perception or Royal Copenhagen through the created synergy, coherence and consistency throughout the communicative touchpoints of the retail environment.

6.4.5 REFLECTIONS UPON BUSINESS PERFORMANCE

Society has changed and customers have change, hence organisations are changing their approach to generating economic value. Therefore, organisations are building strong customer relationships to ensure high retention rates, profitable customer lifetime value, and better customer insights. From a customer point of view, a strong brand relationship (i.e. organisational relationship) enriches the perceived value proposition by providing benefits over and beyond those directly derived from acquiring, consuming or using the product or service (Buttle, 2009).

Customer insight will allow organisations to understand their customers better, hence create improved and better customer experiences generating increased customer satisfaction. As satisfaction rises, so does the customer intention to purchase, hence customer loyalty. This in turn will influences actual purchasing behaviour, which has an impact on business performance (the green process of the empirical model). Satisfaction is not enough to generate customer longevity, i.e. loyalty. Highly engaged customers have levels of emotional or rational attachment or commitment to a brand, experience or organisation that are so strong that they are highly resistant to competitive influence (Buttle; 2009).

of 49 6.4.6 THEORETICAL RECOMMENDATION

Through the generation of satisfaction and customer engagement lies the long-term possibility for RC to enforce brand loyalty towards the cafe, hence Royal Copenhagen. However it will demand that RC is highly attentive to the changing needs of their customer in order to keep generating experiences that provide benefits beyond the expected. One area where TRC is not fulfilling its potential as experience provider is the level of engagement they offer their customer. Following the notion of Pine and Gilmore (1999) and Buttle (2009) the key to longevity is to physical engage the customers in an experience to ensure strong emotional bonds and rational attachment.

of 49 6.5 SUMMARY

Royal Copenhagen have created a vibrant, inviting, experiential retail environment that enables the customers to live the brand through multiple experiential engagements that collectively creates a synergetic impression of the brand. The visual touchpoints within The Royal Cafe create cognitive links to the universe of fairytales, enforce international orientation, promote RC products, illustrate royal genes and demonstrate the quality of Danish design. In the holistic interpretation of these impressions a theme is created from the clash between classical and contemporary forging a new style communicating the characteristics of Royal Copenhagen’s new brand identify, hence The Royal Cafe take the role as having a synergetic complementary effect on customers’ brand identity perception of Royal Copenhagen. However for future evolvement and longevity TRC is lacking in their physical engagement of their customer, an initiative that generate life-long customer loyalty, hence further improve their business performance.

of 49 7 CONCLUSION

This thesis set out to gain insight in the definition and construction of the experience concept through the discussion of Experience Economy and Experience Marketing. It was found that experience in its general form, despite context, is a cognitive process triggered by the sensory engagement and influenced by appeals to the senses, cognitive thinking, behavioural lifestyles and need for affiliation and self-improvement.

Experience Economy employs the cognitive experience as a interactive and engaging customer offering form which to obtain economic value. In a marketing sense, a customer experience is a communication means of creating positive brand perception. Nevertheless, experiences occur whenever consumers encounter organisational touchpoints, whereas the retail environment is one of the strongest influential customer-brand contacts as it is not forced upon the customer but a self- selected encounter.

Experiential retailing is constructed through the static and dynamic elements, accentuating the holistic interpretation of both the tangible elements and the interactive contact. There exists no one definition of a successful customer experience as it is individually constructed in the mind of the customer formed by the personal prejudices and preconception. However, based on theoretical insight, this thesis has concluded on key criteria for constructing retail experiences that have the potential of obtaining profitable results for an organisation. These criteria entails that the communicated experience is in coherence with the corporate brand identity, communicates a consistent message across all touchpoints and creates sensory engagement of the customer cognitively and physically. Are these criteria fulfilled the likelihood that customers will generate a positive brand perception is at its greatest.

Royal Copenhagen’s newest experiential retail initiative; The Royal Cafe have been employed in a case study to analyse how the customer experience will affect the corporate brand identity of Royal Copenhagen. A visual analysis was made upon a selective representative of the static element in order to uncover the communicative nature of the experience. It was found that the TRC experience is founded on attributes such as danishness, quality, humour, contemporariness and international orientation. Hence there exists strong coherence between the RC corporate brand and the TRC experience.

of 49 TRC theme-atrical experience exists in the smallest detail of the cafe engaging the customer in an sensory exploration. The theme appeals to the cognitive interaction, whereas the hands on accessibility of the products used for presentational purposes encourages the physically interaction. Theoretically the TRC experience posses great probability of generating customer satisfaction as the experience bring the brand to life – the brand is experienced not observed, thereby enriching customers brand perception of Royal Copenhagen. However to ensure that the enriched brand perception evolves to strong customer-brand loyalty relationships the TRC needs to affect beyond satisfaction, hence accentuate their physical customer interaction. Conclusively, TRC experience should in the future focus on moving closer towards Escapist experiences compare to the Esthetic experience they provide today. The Royal Cafe should reconsider what they would do differently if they were to charge admission for the experience they give their customer because taking leap further might ensure them longevity as experience providers.

of 49 8 BIBLIOGRAPHY

8.1 ARTICLES:

Balmer, M.T. John & Thomson, Irene (2009)The Shared Management and Ownership of Corporate Brands; the case of Hilton. In Journal of General Management. Vol. 34 NO. 4

Barthes, Roland, 1977. Image, Music and Text, chapter Rhetoric of the Image. Page 32-51 Hill & Wang

Barthes, Roland, 1977. Image, Music and Text, chapter The Photographic Message, page, 15-31 Hill & Wang

Brakus, J. Joško , Schmitt, Bernd & Zarantonello, Lia (2009) Brand Experience: What is it? How is it Measured? Does it affect Loyalty? In Journal of Marketing, vol. 73, may, 52-68.

Donovan, J. Robert &Rossiter, R. John (1982), “Store Atmosphere : An Environmental Psychology Approach”, Journal of Retailing, 58 (1), 34-57.

Healy, J. Michael, Beverland, Michael, Oppewal, Harmen and Sands, Sean (2007) Understanding Retail Experiences - the case for ethnography in International Journal of Market Research, Vol. 49 Issue 6, p751-778, Database: Business Source Complete

Lindstrøm, Martin (2005) Brand Sense – How to Build Powerful Brands Through Touch, Taste, Smell, Sight and Sound. Free Press, New York

Miller, Annetta. & Shenitz, B. (1990) You are what you buy in Newsweek, Vol. 115 Issue 23, p59 Database: Business Source Complete.

Miller, R. (2009) Consumer Marketing 2009, Ch. 40 Shoppability, p. 176-185

Peirce, S. Charles (1894) Chapter 2: What is a Sign, in Houser, Nathan, Eller, R. Jonathan, and Lewis, C. Albert et al. (1893-1913) The essential Peirce: selected philosophical writings. Indiana University Press

of 49 Pilditch, James (1970), Communication by Design: A Study in Corporate Identity, McGraw-Hill Publishing Company Limited

Ray, Ipshita & Chiagouris (2009) Customer Retention: Examining the Roles of Store Affect and Store Loyalty as Mediators in the Management of Retail Strategies. Journal of Strategic Marketing. Vol. 17, No.1, 1-20. Routledge

Skinner, Quentin (1986) The Return of Grand Theory in the Human Science. Chapter; Hans-Georg Gadamer. Cambridge University Press, pp. 21-39

Stuart-Menteth, Hester, Wilson, Huge & Baker, Susan (2006) Escaping the Channel Silo – Researching the New Consumer. International Journal of Market Research Vol. 48, issue 4.

Thang, L. Doreen Chez & Tan, B. Benjamin Lin (2002) Linking Consumer Perceptions to Preference of retail Stores: an Empirical Assessment of the Multi-Attributes of a Store Image. Journal of Retailing and Consumer Services, Vol. 10, page 193-200 Pergamon

Yalch, F. Richard & Spangenberg, Eric (2000) The Effects of Music in a Retail Setting on Real and Perceived Shopping Times. Journal of Business Research, Vol. 49, 139-147 Elsivier Science Inc.

8.2 BOOKS:

Aaker, A. David (2002) Building Strong Brands. The Free Press

Bernstein, David (1984), Company Image and Reality: A Critique of Corporate Communication. Holt Rinehart and Winston Ltd.

Buttle, Francis (2009) Customer Relationship Management – Concept and technologies. Butterworth-Heinemann. Second edition

of 49 Keller, L, Kevin (2003) Strategic Brand Management - Building, Measuring and Managing Brand Equity. Prentice Hall, second edition

Kotler, Philip & Keller, L. Kevin (2009) Marketing and Management, 13th edition, Pearson International Edition

Kress, Gunther & van Leeuwen, Theo (2006) Reading Images – The Grammar of Visual Design. Routledge, Second edition

Pickton, David & Broderick, Amanda (2005) Integrated Marketing Communications. Prentice Hall, London. Second edition.

Pine, B. Joseph & Gilmore, H. James (1999) The Experience Economy: Work is the Theatre & Every Business a Stage. Harvard Business School Press, Boston..

Schmitt, H. Bernd (1999) Experiential Marketing: How to get customers to sense, feel, think, act, relate to your company and brands. The Free Press, New York.

Solomon, R. Michael, Bamossy, Gary, Askegaard, Soren and Hogg, K. Margaret (2007) Consumer Behaviour – A European Perspective. Financial Times Press van Tongeren, Michel (2003) Retail Branding. Bis Publishing Amsterdam

8.3 WEBSITES

Royal Copenhagen’s corporate website (26.02.10): http://www.royalcopenhagen.dk/Craftmanship/The-history-of-Royal-copenhagen.aspx

Designscount.dk (14.04.10) http://www.designscout.dk/2007/06/royal-copenhagens-new-flagship-store/

Visitcopenhagen.dk (14.04.10) http://www.visitcopenhagen.dk/content/turist/nyheder/nyhedsarkiv/the_royal_cafe

of 49 Hcandersen-homepage.dk (02.05.10) http://www.hcandersen-homepage.dk/

Mies van der Rohe quote (20.04.10) http://architecture.about.com/library/bl-mies-quotes.htm

Monocle.com (09.03.10) http://www.monocle.com/sections/design/Web-Articles/Yo-Smushi/ Wordnetweb – Princeton (02.05.10) http://wordnetweb.princeton.edu/perl/webwn?s=baroque

of 49 9 APPENDICES

9.1 APPENDIX 1 - SENSORY APPEAL

“As human beings we’re at our most effective and receptive when operating on all five tracks” (Lindstrøm, 2005), here referred to as our five senses. However, organisations employing all five senses are more an exception than a common observation, more often, only sight and sound is utilised to put the message across (ibid). Lindstrøm (2005) substantiate Pine and Gilmore’s (1999) notion of sensory appeal in proposes his Five-Dimensional Brand model through which he argues that every brand should incorporate elements of sight, sound, touch, taste and smell in to their communication at each customer touchpoint, as argued by Pine and Gilmore (1999).

Sight Sight is the most seductive sense of all. It often overrules the other senses and has the power to persuade us against all logic. Take for example Coca-Cola who has created a brand so intertwined with their use of colours that red and white has become a synonym with Coke and has even been the cause of Santa Claus’ colours changing from green to red. With the use of our sight we can identify brand logos, even if incomplete.

Sound Sounds are directly connected to our moods and generate feelings and emotions within human beings. Sounds can make us sad, but luckily, also joyful. Watching a movie without sound is not nearly as emotional as with the sound off. A thriller looses it touch when there is no tune of suspense right before the killer strikes or no grand ballade intensifying as two lovers finally kiss at the end of a great love story. Another commercialisation of sound is corporate jingles such as McDonalds’ “I am loving it!” campaign or Nokia’s recognisable mobile ringtone.

Olfactory Our smell is the one sense that we cannot turn off, yet it is the sense that we take most for granted. However, everyday most of us spay on a deliberate chosen sent of perfume to communicate a message to ourselves and, for most, the people around us. We know the smell of our partner, our, our home and of freshly baked buns, we value the smell of a new car and buy products to improve the odour in our bathrooms. Several car manufactures have trademarked the smell of their newly

of 49 fabricated cars as an important element of their brand identity and a supporting differentiation factor Rolce Royes even made it commercial by selling it on bottles in their showrooms.

Tactile The stimulation of touch is an important element of growing and thriving as human beings. Our skin is our largest organ making us instantly aware of cold, warmth, pain or pleasure. The tactile appeal is a powerful channel of communication, one that is especially use within luxury brands such as the fashion industry communicating quality of products through the touch of the clothes or the weight of a Harry Winston diamond ring. Bang & Olufsen has made their heavy, solid and quiet distinct remote control a communicator of quality differentiating themselves from other electronic organisations who neglects the quality statement of weight.

Taste Taste is perhaps our weakest sense as it is goes hand in hand with smell and without the ability to smell we might lose 80% of our taste, anyone one who has had a cold can relate to such circumstances. Appealing to our taste is tricky, apart from the food and beverage industry however Colgate has managed to do so with a patent on their distinct toothpaste taste.

of 49 9.2 APPENDIX 2 – PERCEPTUAL PROCESS

The cognitive paradigm within Consumer Behaviour theory substantiates this line of reasoning, according to Solomon et al. (2007). Consumers construct meaning of the exposed stimulus through their individual interpretation which is influenced by their unique biases, needs and experiences. First we experience sensation through an appeal to our sensory system that draws our attention, we then attempt to construct meaning by selecting, organising and interpreting these sensations. It results in a response, hence our perception of reality (Solomon et al., 2007) and according to Aaker (2002) perception is more important than reality as perception will directly affect the consumer’s actual behaviour.

of 49 9.3 APPENDIX 3 - PRODUCT DESCRIPTION

Product description of Royal Copenhagen’s Elements collection as supportive characteristics of RC’s corporate brand identity.

Louise Campbell, one of the leading designers in Denmark, is the designer behind the Elements series launched in 2008 by RC. The collection is known for its astonishing colours, simplicity and sculptural design created for the modern home (RC corporate website). This collection is embedded in the new modern ear and a visual statement of the new directions within Royal Copenhagen. As described on the corporate website, Elements “are forging the contrasts between hundreds of years of legacy with the new millenniums lifestyle in an innovative style combination, indicate modernity and vitality” (ibid)12. The Elements collection won the Design of the Year 2008 award for Royal Copenhagen granted by Bo Bedre13.

12 Translated from danish: Stellet lader kontrasterne mellem århundredes arv og det nye årtusindes livsstil mødes i et innovativt stilbrud, der signalerer modernitet og vitalitet 13 Bo Bedre is Denmark’s oldest and most strongly trendsetting lifestyle magazine (RC’s corporate website)

of 49 9.4 APPENDIX 3 – MONOCLE INTERVIEW

Monocle’s interview with Rud Christiansen, co-founder of The Royal Cafe:

Copenhagen November 2007

This definitely is not a typical Danish cafe or coffee shop and I think too many of the cafes that has opened the 5 – 10 years have basically tried to imitate Starbucks or other chains. We have create a Danish funky baroque clash of styles and some modern designs and so on, I call it sort of a mini Danish royal castle, it might not be so obvious but if you look around you will see an old Danish wallpaper in the sealing, the chandeliers are made by an old Danish glass factory, the chairs are made by Fritz Hansen the famous Danish furniture maker.

The Danish smørebrød, which means open faced sandwich, is a 300 years old pheromone. It is way back when the poor people could only afford to have once piece of two pieces of bread and no butter. Then when they became a little more wealth they started to be able to put butter and meat and stuff like that on the bread, and there is a procedure how you start and how you end up, and what goes with what and by layer and by colour - so it is a piece of art, it is, for me it is one of the most beautiful types of food in the world.

I felt that is was time for a change because smørebrød as you would have it served in various places in Copenhagen it is actually a very large piece or a very large sandwich I just though why not just do it smaller and why not try put a little artistic touch to it. Now, we have a school here in Denmark which have existed for many years, where they teach, it is three and have year education where they teach the girls how to make smørebrød. Today you could probably order maybe 3000 types of smørebrød, so we just ended up with something we call smushis - we are breaking a lot of rules, and we are not only breaking roles in Denmark but we are also breaking a lot of rules of the traditional way that we were taught to make this type of food - and we like that.

We could take that the traditional Danish salmon on top of that we would put some roe, we would cut a very beautiful apple flower and maybe we would put some wasabi with that. Now, right there we broke the rule, in Denmark you would probably just have horseradish but it is related, it just give

of 49 the contrasting colour. We are using a lot of new creative ways of designing this smørebrød and we are also trying to incorporate some of the elements from the Far East as far as taste is concerned.

Very shortly after we opened here we were very excited to see what the reaction was, and we knew that if the reaction was positive from the markets where Danish product traditional are sold very well in the Far East, so we are opening up very soon in Singapore, we will in the summer in 2008 open up in Tokyo, we are trying to see if we have time enough to do this but we are going to open up in Seoul in Korea, and then we are moving on to Taipei - so this is what’s planned at the moment and we are doing this together with Royal Copenhagen, and Georg Jensen, and Fritz Hansen. http://www.monocle.com/sections/design/Web-Articles/Yo-Smushi/

of 49 9.5 APPENDIX 4 PEIRCE’ TRIADIC MODEL

Peirce argues that meaning of signs in not contained within it, but arises in its interpretation (Peirce, 1894). He defined the three most fundamental divisions of signs:

Symbol/symbolic: fundamentally arbitrary or purely conventional. The relationship must be learned (language, numbers)

Icon/iconic: recognisably looking, sounding, feeling, tasting or smelling like it- being similar in possessing some of its qualities.

Index/indexical: the link can be observed or inferred.