Essay About Experience Economy And Economic Growth

Experience and Experience Economy
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Khanh TranEXPERIENCE AND THE EXPERIENCE ECONOMYCommunication Skill’s Written Graded TaskAutumn 2016International BusinessDegree ProgrammeTABLE OF CONTENTSTABLE OF CONTENTS        1.        INTRODUCTION        2.        THE ECONOMIC GROWTH        3.        EXPERIENCE        3.1        The experience’s characteristics:        4.        THE EXPERIENCE ECONOMY        4.1        Experience as a business edge        3.1.1 Experiences Creation as a business edge        3.1.2 Designing a memorable experience        3.1.3 Experience Production        4.2        Entering the Experience Economy        5.        CONCLUSION        6.        BIBLIOGRAPHY        INTRODUCTIONThis report gives an overview of the Experience Economy- a new stage of economic growth and its offeringTHE ECONOMIC GROWTHAccording to B. Joseph Pine II and James H. Gilmore stated in Welcome to the Experience Economy – Harvard Business Review (1999), the development of economies can be described as the four-stage evolution of the birthday cake. At the first stage, birthday cakes are made from farm commodities such as flour, sugar, butter and eggs; and mothers usually made the cakes by scratching and mixing the ingredients. The stage is called the Agrarian Economy. When the Manufacturing Economy emerged, pre-mixed ingredients are bought but the parents still make the cake. Later on, cakes are ordered from the bakery. In that way, the Service Economy has been on point since then. However, in order to remain the competitive edge in nowadays complex market, society and economy, each companies must develop themselves into a new economic stage: the Experience Economy. As in the cake-baking example, nowadays, most parents spend a certain amount of money for not just ordering a cake, but also to throw a completed birthday party for their kids. By doing so, welcome to the experience economy. Experience Economy is a fairly new term to even some economists. Some of them may even be mistaken the true definition of this new kind of economic stage. “Economists have typically lumped experiences in with services, but experiences are a distinct economic offerings, as different from services as services are from goods” (Welcome to the Experience Economy in Harvard Business, 1999). Consequently, four economic offerings can be distinguished in terms of the economic offerings with the “progression of economic value”[pic 1] (Source: Welcome to the Experience Economy in “Harvard Business Review” – by B. Joseph Pine II and James H. Gilmore)As adapted from Joseph Pine II and James H. Gilmore in Welcome to the Experience Economy (1999), Gabrielle Kuiper created a more detailed look into the characteristics of different kinds of economic offersEconomicoffersCommoditiesGoodsServicesExperiencesEconomyAgricultureIndustrialServicesExperienceEconomic functionReap/delveMakeDeliverOrchestrateNature of offerExchangeableMaterial/ tangibleImmaterial/IntangibleMemorableKey characteristicsNaturalStandardizedTailor-madePersonalDelivery methodsBulkStored piece by pieceOn requestShown during a certain period of timeSellerDealerManufacturerService providerDirectorBuyerMarketUserCustomerGuestFactors of demandCharacteristicsQualitiesAdvantagesAwarenessEXPERIENCEThe experience’s characteristics: Experience is a personal asset. No experience can be the same for any customers, groups or organizations. And it is also memorableAs any economic offerings like commodities, goods and services, experience is a valuable, intangible and memorable offer for the customers. As in Creating Experiences in the Experience Economy, Jon Sundbo and Per Darmer claimed that:  “Experiences are manifold… Some have a very physical core…, others are physically very passive… Some are mentally demanding…, others less so… Some are passive entertainment… others are active learning…” Moreover, the experience has their own distinctive characteristics. According to Harvard Business Review by B. Joseph Pine II and James H. Gilmore, there are four realms of every experiences: Absorption- Immersion, Passive-Active participation. With these four realms, every experience can be divided into four kinds of experiences: Entertainment, Educational, Escapist and Esthetic. Entertainment: The most well-known experience. When obtaining entertainment experience, customers participate passively and they rather absorb information and experience, for example: watching TV or attending a concert. Educational: Events such as attending classes, taking a ski lessons providing customers with active participation and the knowledge absorption are educational events. Escapist: Escapist experiences can also teach the participants as well as the educational ones can, or amuse just as well as entertainment, but they integrate greater active participation, for example: acting in a play or playing sport.Esthetic: If escapist experience’s customer participation is minimized, the experience become the fourth kind: esthetic experience. With these experiences, participants are immersed in an activity but themselves have little or no effect on it; take an example of a tourist going sightseeing or visitor at art gallery. [pic 2](Source: Welcome to the Experience Economy in “Harvard Business Review”– by B. Joseph Pine II and James H. Gilmore)THE EXPERIENCE ECONOMY Experience as a business edgeSince the experience offered is valuable, it is considered to be a true offering, a real product that companies charge their customer for. Therefore, no companies’ experience can be the same, which is why each business must create their own experience.