Are you experienced?

At a time when consumers are bombarded by hundreds of marketing messages daily and every company wants every penny it spends to work very hard, "experience marketing" is rolling into China.

Chinese companies who either had no idea or sniffed at such a marketing tool are rethinking and turning to it to rekindle interest from more discerning consumers and to dominate their foreign counterparts.

But what is experience marketing? It is not about telling customers features or benefits of a product, but letting them experience it and get their own "a-ha!" event, experts say.

Put it simply, if traditional marketing is the "monologue", then experience marketing is "multidirectional dialogue", through which "customers could find the event relevant to themselves, as they can co-author the event and play some part in it", says David Rich, senior vice-president of Strategic Marketing in US-based George P. Johnson (GPJ), a leading international experience marketing consultancy.

China's top PC maker Lenovo is such an example. The only Chinese TOP (the Olympic partnership) sponsor for the upcoming Beijing Olympic Games is said to be gearing up for an important marketing project, a grand experience center.

The building is close to completion and will open before the eye-catching event. It is located near Lenovo's headquarters in northern Beijing and is said to have cost Lenovo more than 10 million yuan.

A source familiar with the project says the center is like the 1,600-square-meter Beijing Sony Exploration Science, the first of its kind for the Japanese giant in Asia-Pacific region. It was introduced into China in 2000 with an investment of $30 million for the purpose of igniting the Chinese youth's enthusiasm for science, the Japanese electronics company's products and its brand.

Lenovo is aiming to do much the same - enforcing its own brand loyalty through an enriching customer experience.

The experience center will showcase Lenovo's history, culture and a series of its existing and concept hi-tech products.

"Besides products, many interesting stories about Lenovo, such as how the 2008 Olympic torch is designed, will be shown to the public. Visitors will know Lenovo from all dimensions and get a deeper impression about it," says the source, on the condition of anonymity.

This is not Lenovo's only experience center, but it is different because it is brand-oriented while the others are sales-driven. In November 2005, Lenovo launched the first, covering 120 square meters in Shanghai Pacific Digital Square. The Shanghai center is divided into five areas - corporate culture and technique, household electronics, individual electronics, goods for commercial use and sales - where visitors could obtain news about Lenovo's latest products and technologies, try them and buy as they like. And in May 2006, its first Beijing experience center was launched in Zhongguancun, the capital's IT hub.

Experience sells

With the Chinese wallets ballooning, the consumers growing more mature and the goods becoming abundant, traditional marketing skills such as sales discounts and promotions, public relations and advertising are not playing a dominant role in affecting purchase decisions any more.

"For marketers it is easy to spend money, but it is difficult to make sure whether it is well spent," says GPJ's Rich.

Founded in 1914, GPJ has extended services to many industries especially those from the IT and automobile sectors. "When we asked the clients how they have implemented their objectives through the marketing events, their answer was always 'we are not entirely sure to what extent we have intellectually and emotionally reached the customers,'" says Rich.

"Then the problem rises."

But no worries. "We see experience marketing as one of the most effective ways, because it's not only direct, but also face-to-face," explains Rich.

Customers can then firmly believe "the product and the brand are designed just for me", says Rich.

Look at how the international companies have promoted themselves in China by utilizing the tool.

Take Ikea. Despite merely four stores, the global leading home furnishing retailer from Sweden has gained extreme popularity here, even dwarfing domestic players, since its entry in 1998. Its China sales have kept growing at an annual growth rate of double digits, and in 2007, the figure was 38 percent.

Of course, it is neither the price, (higher than the market average) nor the troublesome build-it-yourself approach that has attracted slews of consumers to the stores - especially on weekends and holidays - but what the company calls its "uniquely relaxing, entertaining and purchase-provoking atmosphere".

Shoppers can try everything in any Ikea store, sitting at (or on) desks, lounging on couches and laying on beds. Each store has mock-up rooms of different sizes that are meticulously furnished with Ikea beds, sofas, bookshelves, desks and chairs and decorations. And after a long day or evening shopping, consumers can unwind in the in-store Ikea caf.

The designs are appealing to Chinese consumers and most cannot restrain the impulse to buy something to spruce up their own apartments a la Ikea.

This summer, Ikea is opening its fifth store in Tianjin covering 600,000 sq m, following ones in Beijing, Shanghai, Guangzhou, Chengdu, Shenzhen and Hong Kong. It plans to open one or two stores every year in China.

US-born Starbucks is another striking case. Attracted by the neo-coffee house ambiance Starbucks creates with its artistic interior designs, lively music and coffee-related tips and stories, Chinese white-collars regard it as a tasteful, comfortable choice for meeting friends and business partners - though a cup of coffee is more than 20 yuan on average, twice the price of java sold in a domestic coffee shop.

Local players catching up

Experience marketing first appeared in the US around 1999. Chinese companies, which seemed initially ignorant of the concept didn't consider trying it until they were inspired by the foreign companies' success stories in China.

"Experience marketing is especially important for China right now, as more international companies are focusing on China, which makes the competition fiercer than ever. There are more marketing messages than before, so how to differentiate them from others is significant," says Rich.

Lenovo is among the first few domestic followers but its initiatives come after its rivals. In early November 2004, Hewlett Packard opened its first experience center in Beijing, also the first in Asia, and in August 2006, Dell launched its first experience center in Chongqing.

But experience marketing concerns far more than experience centers. It can be implemented online, in-store, and through various events, says Rich.

Lenovo is a major client for GPJ in China, and the experience center is the most recent project that GPJ has worked on. Others include designs for Lenovo's sponsorship of worldwide sporting events such as Formula One and the China Open and international trade fairs.

Driving sales is the biggest benefit from the partnership. In 1998, IBM signed a contract with GPJ, which lasted until this year. During the past 10 years, "GPJ has helped the company save $75 million in marketing," claims Rich.

Lenovo is not alone. Inspur, a Chinese leading computing solutions provider, announced in late 2006 that it would open 100 experience centers around China.

Experience marketing is not limited to the IT industry.

Tsingtao Beer, a leading Chinese beer manufacturer, opened a beer museum in its headquarters in August 2007, the first in China in the brewing industry. Corporate executives from Tsingtao say this year's marketing program will revolve around "experience".

But there are still relatively few domestic players joining who are "experienced".

"It is true, which can be shown in our client portfolio. Most of our clients are multinationals," Rich says.

Fortunately, the local companies are "showing increasing interest in it, and the more we tried to communicate with them, the more acceptable they are to the idea".

The reasons are various. One is not everyone is a right fit when it comes to experience marketing and only those that are "already established or gaining certain brand awareness are qualified candidates", says Rich.

And another concern is money. Many PR or ad agencies in China claim they can design experience marketing programs. But the result is often something different, though Chinese companies prefer them because the cost is less.

Including Lenovo. It did not employ GPJ even when the IBM PC acquisition deal was signed in 2005 although GPJ had been IBM's partner. The initial rejection was due to the "higher fees compared with our domestic counterparts", says a person from GPJ on condition of anonymity.

But half a year later, Lenovo eventually turned to GPJ for help. "Why? Quality speaks volumes. The cooperation has been nice," the source says.

(China Daily 06/30/2008 page7)