MARKETING IN CREATIVE INDUSTRIES

© Gabriele Troilo 2015

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vii

CONTENTS

List of fi gures viiiList of tables xPreface xiAcknowledgements xiii

PART I THE ROLE OF MARKETING IN CREATIVE INDUSTRIES 1 CREATIVE INDUSTRIES 3 2 A CUSTOMER-CENTRIC MARKETING

MODEL FOR CREATIVE INDUSTRIES 21PART II CUSTOMER VALUE ANALYSIS 3 THE CONSUMER SIDE OF THE

MARKET: THE CONSUMPTION EXPERIENCE 53

4 THE CONSUMER SIDE OF THE MARKET: THE OTHER STAGES OF THE EXPERIENCE 78

5 THE BUSINESS SIDE OF THE MARKET 113

6 METHODS FOR DEVELOPING MARKET KNOWLEDGE 137

PART III CUSTOMER VALUE CREATION 7 IDENTIFYING TARGET MARKETS AND

CREATING VALUE PROPOSITIONS 175 8 CREATING VALUE WITH THE

PRODUCT, THE BRAND, AND THE PRICE 217

PART IV CUSTOMER VALUE DELIVERY 9 DELIVERING VALUE TO THE

CUSTOMER: MANAGING A MULTI-MEDIA, MULTI-CHANNEL ENVIRONMENT 275

10 MANAGING CUSTOMER VALUE OVER TIME: CUSTOMER RELATIONSHIP MANAGEMENT 312

PART V ORGANIZATIONAL ISSUES 11 INTEGRATING MARKETING

AND CREATIVITY 335

Notes 350Bibliography 355Index 365



THE ROLE OF MARKETING IN CREATIVE INDUSTRIES

Part

I



3

CREATIVE INDUSTRIES

LEARNING OBJECTIVES

After reading this chapter you should be able to: ●● Map the landscape of the creative industries. ●● Distinguish a creative industry from a non-creative

one. ●● Tap into the main characteristics of a creative

industry. ●● Understand their relevance in today’s society.

1.1 A DEFINITION OF CREATIVE INDUSTRIESDelineating the boundaries of an industry is an extremely complicated task. Essentially this process calls for the inclusion of some actors, relationships, and behaviors while at the same time excluding other actors, relationships and behaviors that fall within the confi nes of other industries. Today the undertaking is even more complex because in most of the world’s economies even the borders of the most traditional industries are becoming blurred. (Can a clear line be drawn between the food and pharmaceutical industries, for example, when currently one of fast-est growing markets is nutriceuticals, foods with high therapeutic value?)

A number of phenomena can explain this escalating ambiguity: the evolution of production and distribu-tion technologies, business strategies that trigger cross-industry competitive dynamics, and changing consumer needs that prompt organizations to bundle together in single off erings benefi ts that in the past were provided by multiple products and services. (How many technological tools did we once have to have to get all the functionalities of today’s smartphone?)

To compound the complexity even further, if our focus is a multi-sector context centered on an ambigu-ous and seemingly elusive concept like creativity, any attempt to make any sort of delimitation verges on the impossible. Can’t the origins of all industries be traced

back to a creative act that leads to the realization of products and services? So aren’t all sectors essentially creative? Th en how can we distinguish one from another on the basis of creativity?

Yet since the late 1990s, the term creative industries has been incorporated into the lexicon of politicians, public policy makers, entrepreneurs, managers, and experts in a variety of fi elds, probably thanks to a 1998 publication by the UK Creative Industries Taskforce, under the Department of Culture, Media and Sports (DCMS, 1998). Th is document provides a map of the creative industries, quantifying their size, measuring their performance, and identifying their distinctive characteristics.

With this seminal work, the British government began a systematic monitoring program, underscoring the critical role these industries play in the economic and industrial evolution of the UK. Here the terminol-ogy used in that report is worth mentioning: under the umbrella of creative industries come the more traditional cultural industries, a term which is a few dec-ades older (as it was fi rst coined in the 1960s). Beyond the conceptual and methodological repercussions, including traditional cultural industries in this way also carries symbolic weight and sends a clear signal: the time has come to recognize that traditional cultural industries are industries in every sense of the word. More importantly, some of them satisfy similar needs, though they’ve always been considered very diff erent industries (compare fashion to video games or sport).

After the fi rst British DCMS report was released, other countries followed suit and began studying and monitoring the impact of creative industries on their national economies (in many cases, adopting a nearly identical conceptual and methodological framework). Th ese countries include South Africa (DACST, 1998), Hong Kong (CCPR, 2003), Australia (DCITA, 2004), the US (IIPA, 2006), the European Union (KEA, 2006), and Italy (Santagata, 2008), as well as the United Nations (UNCTAD, 2008).1 Th is investment in developing a knowledge base on creative industries has on one hand

Chapter

1



4 Marketing in Creative Industries

contributed to the dissemination of the term, and on the other has opened the debate on exactly which industries should be given the ‘creative’ label.

In light of the aims of this book, I don’t see any point in scrutinizing the similarities and diff erences in the various defi nitions.2 But I do believe it’s worth-while to keep in mind that every attempt to delineate creative industries is based on specifi c assumptions and objectives. To give an example, the goal of the British government in setting up the Creative Industries Taskforce, which authored the fi rst report mentioned above, was to identify opportunities for economic growth in a nation emerging from two decades of deep de-industrialization. Consequently, the underlying aim was to glean some useful indications to apply in formu-lating national industrial policies in the years to follow. Th e end result was a defi nition of creative industries that clearly refl ects an industrial view, focusing on vari-ables such as the percentage and type of employment in these sectors, the value added of various phases of the production and distribution process, the techno-logical level, and the potential impact on the economic and social development of Great Britain. Th e basic premise of the study was that industries labeled as ‘creative’ could and should contribute to the well-being of the country by generating and exploiting intellectual property. Accordingly, the broad defi nition of creative industries used in this report encompassed all sectors in which the original source of products and services lies in individual creativity and talent, and in which the protection of intellectual property is possible.

However, since this is a book on marketing, it takes a diff erent perspective. Th e key concept that underpins this work is value for the customer. Th is leads to my initial premise: every economic phenomenon, and especially every market phenomenon, should be ana-lyzed and interpreted from the viewpoint of the cus-tomer. By customer, I refer to the recipient of the value generated by the players who operate in the industry in question (in other words, the person who evaluates, appreciates, buys, and uses the product or service). My purpose in writing this book is to propose an eff ective marketing management model built on managing cus-tomer value, a model that is tailored to the specifi cities of creative industries.

Th is explains why I don’t feel a pressing need to stake out the exact boundaries of creative industries. What I believe is essential, instead, is to pinpoint their distinctive features, which have a much greater impact

on typical marketing decisions. So my aim in propos-ing a possible categorization is to formulate a working hypothesis that allows me to fashion a more eff ective ad hoc marketing management model.

Th at said, the fi rst consideration that will help in defi ning creative industries is the relevance that consum-ers associate with the creative content of the products and services off ered in the industry. In creative industries, the value off ered to the customer depends mainly on the creative content of the off ering, that is, products and services are compared, purchased, and evaluated primarily on their creative content. At the beginning of this chapter I presented two questions that commonly arise in attempting to pinpoint what makes creative industries unique: Aren’t all industries essentially crea-tive? How can we diff erentiate one from another based on creativity?

In my opinion, by adopting the perspective of value off ered to the customer and recognizing the impor-tance of the creative content of that off ering, we can resolve these questions by shifting our focus. Instead of considering creativity as the input of production pro-cesses, we need to think of creativity as the output. (All sectors make products and services that spring from a creative idea, but only in certain sectors do customers associate the value of a product or service primarily with its creative content.)

Examples are products like washing machines, cars, body lotion, or laundry detergents on the one hand, and novels, video games, photography exhibits, or music on the other. Obviously, the starting point for the fi rst set of products is one or more creative ideas (input) that have led to technical solutions, which in turn translate into specifi c performances. But what the customer buys is a set of performances in which the creative content isn’t immediately perceptible or assess-able. Of course, this doesn’t mean that customers don’t recognize or appreciate particularly innovative solu-tions. But even when there’s nothing innovative about these products, they can still provide the performances customers want. In other words, limited creative content doesn’t drastically lessen the value off ered to customers.

Th e same is not true for products and services such as video games, photography exhibits, or novels for which the greatest share of value lies in the creative content, which customers can immediately perceive and evaluate. Th is doesn’t mean that they completely disregard non-creative factors in the value off ered (the



5Creative Industries

bulk of a book, ease of access of exhibition space in a photography show, the memory needed to download and play a video game). But the value of the creative content outweighs all these considerations. As a result, for these categories of products and services, limited creative content means little or no customer value.

Th e second aspect we need to consider is the rel-evance of creativity as a lever of competitive advantage, as seen by the players in the sector (fi rms and institutions that off er products and services). In creative industries, the basic ingredient in competitive advantage is the creativity incorporated in products and service through innovation. In fact, in these contexts, competition essentially orbits around innovation. Th is means that the fi rms and institutions that succeed in systemati-cally feeding the fl ow of innovations to be launched in the market will survive and prosper, while the ones that fail to do so will disappear.

An obvious example is a publishing company, which won’t last long by relying solely on backlist titles without regularly publishing frontlists. Th e same can be said for record or movie companies, as well as muse-ums, theaters, and fashion companies. For all these fi rms and institutions, their competitive advantage – indeed their very survival – depends on their ability to systematically channel creativity into innovation to off er to their customers.

Clearly the two factors are interdependent (the relevance of creativity both for customers and for organizations), and there’s no way to determine which one drives the other. As in every industry, supply stim-ulates demand, which in turn stimulates supply, and so on and so forth. Similarly, in creative industries, it is creativity in supply that spurs on the search for crea-tivity in demand, and vice versa. Basically, creativity is the fuel that powers the economic engine connecting supply and demand. Creativity generates diff erential value in competitive dynamics, and use-value in con-sumption processes. In the words of Jeff cut and Pratt (2002: 228): ‘Creativity is the enterprise.’

On the basis of these two defi ning features, indus-tries classifi ed as creative for the purposes of this book fall into four sub-groups:

●● Arts – Production, conservation, and distribution of visual and performing arts, including museums, galleries, theaters, and festivals.

●● Media, information, and communication – Production, conservation, reproduction, distribution, and trans-mission of contents (texts, sounds, images, ideas,

and messages), for example publishing, music, fi lm, and communication.

●● Fashion, design, and architecture – Production and dis-tribution of goods with high symbolic content such as clothing, accessories, furniture, home accents, and architectural design.

●● Entertainment and leisure – Production and distribu-tion of recreational services, for example live shows, sports, natural parks and amusement parks, and tourism.

Like any classifi cation, this one can’t claim to be exhaustive, but simply eff ective in light of how I intend to apply it in the rest of this book. By the same token, as I mentioned before, I don’t want to be too exact in distinguishing one area from another. So I don’t see much use in debating whether or not live music should be considered art or live entertainment, or if live clas-sical music should be classifi ed as art while musicals or live rock should be labeled as entertainment.

What’s more important, as I see it, is to include all these sectors under the umbrella of creative industries, because they share certain features that will shape the design and implementation of marketing strategies.

1.2 THE DISTINCTIVE FEATURES OF CREATIVE INDUSTRIESTh e high creative content of the off erings of these indus-tries, which generates customer value and a chance for competitive diff erentiation for fi rms and institutions, gives rise to certain distinctive traits of supply and demand. As far as demand goes, creative content aff ects consumer decision-making processes (choosing, buying, and consuming). For supply, this same content shapes how production and distribution processes are organ-ized, and triggers unique competitive dynamics. Below is a list of the most signifi cant specifi cities that impact the design and implementation of marketing strategies.

1.2.1 Non-objective preferences

Imagine we’re listening in on two teens who are talk-ing about two videogames and debating over which one is best. One teen says that the fi rst game is bet-ter because it has cooler special eff ects and a more exciting, less repetitive storyline. Th e other teen prefers the second game because it’s more challeng-ing, and it allows for multiple players. Who is right




about which game is best? It’s hard to say – in fact, it’s impossible.

Leaving price aside, in creative industries products are made up of attributes for which consumer preferences are not based on objectively quantifi able parameters. To give an example, when a consumer buys a car, there are parameters she can use to evaluate and compare dif-ferent models objectively. For instance, she can look at engine power, fuel effi ciency, and safety features, and she can measure these attributes objectively in terms of horsepower, miles per gallon, and number of air-bags. In other words, for similar products consumers can base their preferences on objective parameters, so they tend to prefer the product that off ers objectively better performance at the same price. Th is property is what economists call vertical diff erentiation.

But for products with high creative content, there are no such objective parameters; consumer preferences vary widely because they are based on extremely subjective criteria. Here’s another example: if a consumer were choosing between two contemporary works of art that are diff erent in sizes, she wouldn’t necessarily prefer the larger one (if they both cost the same amount). Or when she is deciding between two photography exhibits to see, one with twice as many pieces on display as the other, she wouldn’t necessarily decide to go to the larger exhibit.

Th e point is that preferences depend largely on a combination of personal experience, sensations, and inclinations which we refer to as taste (which I’ll discuss further in Chapter 3). Th is property is what economists call horizontal diff erentiation. Consumers have subjec-tive preferences based on their personal taste, which is why we are inclined to choose certain forms of creative expression over others, and certain combinations of product attributes over others. But none of this can be measured in any objective way.

1.2.2 Experience goods

Let’s get back to our two teenagers, and imagine they’re out buying a new game, trying to choose between two that they’ve never played before. How do they fi gure out which one is better? Which one is more challeng-ing, more fun, more exciting? It’s hard to say; in fact, in many ways it’s impossible. Which leads me to my next point: Creative products are experience products, not search products.

With a search product, a consumer can get some idea of its quality before she uses it by simply searching for

information on relative product features (hence the name). Th is process works because the quality of these goods is associated with attributes that can be objec-tively measured, so a consumer can fi nd out about them before she actually uses the product (like with the washing machine or the laundry detergent).

For experience products, this mechanism doesn’t apply because product attributes can’t be objectively associated with product quality (like the artwork or the photography exhibit). So the only way a consumer can get an idea of this quality is through fi rst-hand experi-ence. Only after she’s played the video game, or read the novel, or seen the exhibit, can she say whether she liked it or not; in other words, whether she valued its quality.

Th ere are four consequences that arise from the ‘experience’ status of goods that are unique to crea-tive industries. First, consumers can’t resort to objec-tive parameters to predict the quality of a product before they buy and use it; so to make their buying decisions, they rely on subjectively defi ned indicators, called quality clues. Examples might be comments on a gamers’ blog for a video game, or the author’s reputation for a novel, or the gallery’s prestige for a photography exhibit. When consumers use quality clues, this further reinforces the chance for horizontal diff erentiation by producers, since various clues are subjectively defi ned, so they themselves can represent diff erentiation factors.

Th e second consequence of qualifying goods as ‘experience’ is that in creative industries, consumers value product trials. Listening to a song on the radio or during a concert, or reading a few pages of a book in a bookshop or on an online retailer’s website, seeing a work of art on display in a gallery or using a demo of a video game: all these trials encourage (or discourage) us from buying the product in question, because these experiences constitute an anticipation of the product experience. By trying out the product consumers get a clue as to the quality they can expect from buying and consuming it.

Th e third eff ect of the ‘experience’ characteristic is that the reputation of the players becomes a fundamental factor in market relations. Th e fact is, consumers can’t deduce the quality of experience products before they use them. So an alternative to actually trying out the product is to rely on the reputation of the players involved – the producer, the distributor, the brand, the critic. Th is becomes a very eff ective and powerful




quality clue that consumers can instantaneously access at practically no cost.

Here are some examples: a consumer can make an educated guess as to the quality of an artist thanks to the reputation of the gallery hosting her exhibit, or anticipate the quality of a temporary exhibit based on the reputation of the museum that has organized it, or get an idea of the quality of a musical by reading a review from a reputable critic. As compared to non-creative industries, with search products and services as their output, reputation is extraordinarily important in creative sectors because it’s a key quality clue.

Th e fourth consequence of being an ‘experience’ product is that consumers need time to actually experi-ence the product. Attending a live concert, watching a volleyball game, reading a book, visiting a museum – these are all things that take time. Basically, the satis-faction people get from consuming a product with high creative content depends on the time they dedicate to consumption. Th ere are two reasons for this, which I’ll delve into further in Chapter 3. Th e fi rst is that the time people spend consuming allows them to enhance their expertise and competence with regard to the product, refi ning their tastes and more clearly defi ning their preferences. Th e second is that it takes time to activate cognitive processes and elicit emotional states by which consumers can come to appreciate a creative product.

1.2.3 Infi nite variety

In 2012 in India, 1,288 new fi lms were produced (UNESCO, 2012a). In 2010 in the US, 328,259 new book titles were sold, of which only 53,139 were fi ction (Bowker, 2012). In 2012, around 20 million songs were available for download from about 500 legal sites (IFPI, 2012). In 2012 in the modern art market, Edvard Munch’s ‘Th e Scream’ fetched 192 million US dollars at auction, and at the same time millions of works by amateur artists were sold for a few dollars a piece at local art fairs.

To put it briefl y, in creative industries, product variety is practically infi nite (Caves, 2000, p. 6). But if you think about industries like cars, cell phones, detergents, or any mass market or durable goods, the number of new product launches in a single year is much lower than the same fi gure for any given creative sector.

Let’s take a movie, for example. Th e same screenplay can generate countless end products, based on all the

possible combinations of directors, actors, sound tracks, editing, and so on. Th is illustrates how crea-tive industries are typically hyper-fragmented, both in terms of supply and demand, but with opposite eff ects on either side. For demand, hyper-fragmentation is the outcome of unlimited variety in the subjective tastes of consumers, which leads producers to launch new products continually. As a result of the massive number of products available on the market, consumer decision-making processes have become exponentially more complex. How can people navigate their way through the infi nite variety of shows, books, exhibits, and sporting events?

In terms of supply, instead, producers have limitless possibilities for combining attributes to create products and services that off er a diff erential advantage over com-petitors. Yet all these possibilities generate tremendously intense competition, because every single product in any given sector competes with an enormous number of other products, fi rst to capture consumer attention, and then consumer preference. How many local sport-ing events can a consumer go to in a week? How many weekend concerts can she actually fi nd out about? How many TV programs can she watch on any given night?

1.2.4 Structural failure

Common wisdom among experts holds that 70 per cent of books can be considered fl ops (Th ompson, 2010), and the same percentage of new CDs released on the market won’t be able to cover their production costs (Wikström, 2009).

In creative industries, the market failure of many products is inherent to the specifi city of production and consumption processes. Th is characteristic is rooted in the hyper-fragmentation mentioned above. What I mean by this is that with such extreme product proliferation, the fact that many products can’t reach market success is intrinsic to the structure of creative industries. Put another way, in these industries, the failure of scores of products is off set by the market success of a few.

Hyper-fragmentation prompts consumers to notice only a tiny fraction of the products available on the market. Similarly, it’s impossible for producers to pay the same attention to (read: invest the same fi nancial and marketing resources in) all the products they sell. Clearly, the more products an organization has in its portfolio, the more signifi cant this consideration is.




Th at’s why in publishing, fi lm, music, and fashion, structural failure is more obvious than in other sectors like natural parks and amusement parks, where nor-mally every company or institution manages a limited number of ‘products’.

What this means in fi nancial terms is that produc-ers realize that many of the products in their portfolio won’t break even, so the ones that do will have to off set the losses of the ones that don’t. One outcome of this is that many creative sectors are ‘hit-driven’ or ‘chart-driven’. In other words, producers focus on making sure that a certain number of their products become hits, and break into the charts or bestseller lists, because these successes provide slack resources that serve to compensate for losses on less successful products. In commercial publishing, fi lm, and music, as with modern art exhibits, tourist cities, fashion, and design, producers need to sell a certain number of products to millions of consumers in order to generate volumes and margins that can guarantee economic sustainability for the entire product portfolio.

1.2.5 Non-utilitarian consumption

If you were to ask someone why she’s reading a mys-tery by Manuel Vasques Montalban, she’d answer: because it’s exciting! If you ask a visitor at the entrance to a Damien Hirst exhibit why he’s going, he’d prob-ably answer: because I’m curious! Or, because I’ve heard so much about it I’ve got to go! And if you ask a heavy metal fan why she’s going to see Metallica’s next concert, she’d answer: because they’re awesome!

Products in creative industries are consumed primar-ily for their hedonic, experiential, and symbolic value. Th e diff erence between hedonic and utilitarian consump-tion (and hedonic and utilitarian products) is by now consolidated in the marketing discipline. Consumption is utilitarian when a consumer buys and uses products to reach a goal. Th e product provides performance, and it’s product performance that contributes to reaching the goal in question. (For example, a moistur-izing lotion, thanks to its emollient ingredients, gives consumers softer skin.)

Conversely, hedonic consumption does not serve to attain a goal, it is the goal. Hedonic consumption engenders pleasure, aesthetic appreciation, and gratifi -cation. (For example, the value in listening to a classical music CD or reading a comic book lies in the aesthetic pleasure these activities provide.)

More broadly speaking, consumption in these industries is also experiential and symbolic. Th e fi rst refers to the fact that it’s not the product in itself that delivers value to the consumer, but the entire con-sumption experience (see Section 2.1.2). For instance, when a consumer goes to a stadium to watch a football match, the value of this experience doesn’t depend exclusively on how well the two teams are performing. Other factors also come into play, like the atmosphere in the stadium before and during the match, the social-ity of sharing her passion for football with other fans, the sense of growing anticipation in the days leading up to the match, and debates with other fans predict-ing the possible outcome. All these factors enhance or detract from the value of the consumption experience.

Finally, consumption in creative sectors has a high symbolic value. In other words, it bears the message that an individual belongs to certain social group and shares certain values, and conveys the image that she has of herself or that she wants to transmit to others. If a consumer reads a newspaper, for example, she can get up-to-date information on what’s going on in her country and in the rest of the world. But she can also feel like an active participant in her country; she can share and compare her opinions with others; she feels like she belongs to a certain group.

In describing consumption in creative industries as hedonic, experiential, and symbolic, I don’t mean that all consumption is all three things at the same time, or that there are no utilitarian factors involved whatso-ever. (After all, listening to a talk show can satisfy the utilitarian need to learn more about an issue, as does reading in-depth coverage of a topic in a newspaper.) What I do mean is that consumption in these indus-tries is predominantly characterized by hedonic, expe-riential, and symbolic elements, unlike non-creative sectors. What’s more, the positioning of every product category and every single product or brand within a category centers more on hedonic or experiential or symbolic traits, or a combination of all three. We’ll discuss this in the next section, and go on to explore it further in Chapter 3.

1.2.6 Aesthetic value

Why would a consumer buy an ugly shirt (if she could aff ord to buy a nice one at the same price)? Why would a family buy ugly furniture (again, instead of beautiful furniture at the same price)? And why would




a teenager download a song she’s already heard and doesn’t like?

In creative industries, the aesthetic value of a product is a fundamental component – if not the sum total – of the overall value of the off ering as perceived by the consumer. Granted, you might say, but people don’t buy newspa-pers or geography books because they’re pretty. In fact, thanks to our broad defi nition of creative industries, we can easily assert that in some sectors the aesthetic component isn’t all that essential.

What’s most important in a newspaper is accuracy and attention to detail, as well as up-to-date content. And a consumer would rate a geography book mainly on how thoroughly topics are covered and how clearly content is presented. Or take an advertising campaign, which more than anything else has to convey a mes-sage and resonate with a specifi c customer target. Th erefore, it’s reasonable to admit that readers appreci-ate the graphics in a newspaper, which make it easier to read; or the quality of the pictures in a geography book, which makes the content easier to understand; or aesthetic elements of an ad campaign that help capture the attention of the audience.

In sum, there is evidence that aesthetic appreciation applies to all the products of creative industries (as they are defi ned in this book). However, aesthetics do not have the same relevance for all products from the customer viewpoint. It is therefore useful to classify products on a continuum according to their aesthetic content (see Charters, 2006, for a similar classifi cation).

At one endpoint there are products that are primarily utilitarian. For these goods, the aesthetic content is a secondary benefi t within the broader customer value, without which the overall value would be compromised but not eliminated altogether. Examples of products on this end of the spectrum would include daily news-papers and professional publications or educational texts.

At the other end, there are aesthetic products (for example, paintings, live performances, musical com-positions, novels). For these items aesthetic content represents an essential and even exclusive component of value perceived by the customer, without which the product loses its primary benefi t. Aesthetic products have an intrinsic aesthetic value, which again may encompass the entire value perceived by the customer. Yet other factors can also come into play. For example, when buying a novel a consumer might also consider the size (easy to carry) or the font (easy to read). But

the bottom line – what delivers value for the customer, and determines (dis)satisfaction – is the aesthetic value of the content.

Two more categories fall in between these two extremes: products that are either primarily experiential or primarily aesthetic. In the fi rst group are goods that provide value which is strongly associated with an experience. For these items the aesthetic element is one of the components of the experience itself; if it were lacking the value for the consumer would be diminished, but not cancelled out all together.

Going back to the football match, the atmosphere in the stadium is a fundamental aspect of the consump-tion experience, and certain elements of this atmos-phere relate to aesthetics. Just think of the visual impact of a full stadium, with all the fans wearing their team colors, and the sound of music and chanting in the background. Without these sights and sounds, the whole experience would center on the quality of play alone, which for spectators would probably lessen the perceived value considerably.

Products which are primarily experiential are posi-tioned closer to the utilitarian product endpoint of the continuum because aesthetics are important but not predominant in terms of the value sought after and supplied to customers.

Finally, there are products which are primarily aesthetic. Th e product categories positioned on this segment of the spectrum include clothing, jewelry, fur-nishings, home decor, and so forth. Here the aesthetic content is the main benefi t, but utilitarian factors count too; in fact, without them overall product value would be drastically reduced, to the point of preventing customers from making the decision to buy.

When shopping for clothes, for instance, people make their choices mostly based on aesthetics, but also because the clothing breathes in the summer or protects from the cold in the winter. Or if they’re in the market for a new home, they choose which house to buy and how to decorate it based on aesthetics, but faulty wir-ing or leaky faucets would reduce the perceived value appreciably.

1.2.7 Multiple product life cycles

How long is the lifecycle of a daily newspaper? A day. A movie at the cinema? A few weeks. A hit musical? A few months. A fashion collection? A season. After that, all of these products are replaced by new ones.




But they don’t disappear, far from it. Th ey simply reemerge, perhaps in some other form or on some other markets providing diff erent benefi ts.

A single issue of a newspaper ends up in the archives where it can be recovered for research and reference. After a run at the theaters, a movie is released on DVD and then gets redistributed for pay TV and broadcast TV. Music from the hit musical is put into a com-pilation, or it becomes the soundtrack for a fi lm or a television spot. Th e fashion collection is sold online or in factory outlets. In creative industries, products have multiple life cycles. Th e fi rst is often short, sometimes extremely so, but later life cycles taken together can be very long indeed.

Just think of an opera, or classical music in general, or classics from literature. Th ere are even some con-temporary products that can be used as examples. Pink Floyd’s album Th e Dark Side of the Moon stayed on the Billboard 200 chart (the ranking of bestselling albums in the US, published weekly by Billboard magazine) for 815 weeks, and that’s not even counting prior sales. (Th e album came out before Billboard 200 was fi rst published.) And with every new LP the group released, fans kept going back to ‘the Moon’. Other classic prod-ucts are the Keepall and Speedy bags by Louis Vuitton, created in 1930, but continually updated over the years. In modern literature, Tolkien’s Th e Lord of the Rings was fi rst published in 1954, but much later it achieved worldwide success when it was made into a series of movies. Th e list goes on and on.

Some creative industries, it is true, have lifecycles that are anything but brief. Many European museums were founded in the eighteenth century, as were count-less theaters. Also, since tourist destinations are on our list of creative industries, that means the lifecycles of many ‘products’ can be measured in centuries or even millennia.

But as I’ll detail in Chapter 8, if we take the example of a museum, its ‘product’ isn’t the museum itself, but the pieces on display at any given moment. Over time this body of art changes with new purchases added to the collection, or even when the same works of art are exhib-ited in new ways, conveying diff erent themes. (Th e permanent collection is only one of a museum’s prod-ucts.) Consequently, museum products have multiple life cycles, albeit short ones, which taken together can span centuries.

Today, product life cycles in all sectors are shrinking, but in creative industries this time span is astonishingly

short. Why is that? Th e answer lies in the role that creativity plays in these industries. As far as supply goes, since competitive advantage is built on innova-tion competitors are driven to launch new products on the market continuously. Moreover, since the failure of many products is structural, products that don’t meet customer needs must quickly be replaced by others that have the potential to do so. Th is makes planned obsolescence a widespread product strategy in creative industries: life cycles are purposely designed to be short so as to ensure a systematic fl ow of new products on the market (Section 8.1.5.1).

In terms of demand, short life cycles are rooted in the variety seeking behaviors of customers (Section 4.5.5). In fact, to satisfy their hedonic needs, customers only rarely consume the same product more than once.3 (Th at said, it’s not unheard of for people to watch the same fi lm or read the same book or visit the same col-lection in a museum several times.) But it’s much more likely that people will buy and consume other products within the same category or related categories.

Th e fact that products in creative industries have multiple life cycles means the brand is an essential and increasingly important resource. For producers, in fact, growing the value of their brands is a way to capitalize on investments they’ve already made in individual products, in communication, in relationships with distributors, and of course with customers.

In creative contexts, hyper-fragmentation of the off er-ing, combined with short, multiple life cycles, would make it fi nancially unsustainable to support marketing activities for every single item. Th e chance to capitalize a portion of these eff orts on a broader resource such as brand constitutes an investment in reputation that the organization can leverage to support new product launches. In fact, brand reputation is one of the typical quality clues that consumers use when they buy experi-ence goods. So, as we’ll see more clearly in Section 8.2, the brand serves for product endorsement, and brand management becomes a critical competence for success in creative industries.

1.2.8 Profi t and non-profi t coexistence

In Europe the vast majority of theaters, opera houses and museums are State-owned. In fact, in most coun-tries of the world, the State (central or local govern-ment) intervenes directly in media sectors as owner of television and radio stations (UNESCO, 2012b).




Essentially, for organizations in creative industries, the priority goal is not always, or not only, profi t. In fact, state-owned organizations that operate in these contexts are often non-profi ts. What’s more, in other industries that are populated for the most part by privately-owned enterprises (for example, publishing, fi lm, tourism, and sports), the state recognizes the cultural and social value of the products in question, and off ers direct and indirect subsidies for relative sup-pliers. (For data on some major European countries, see the report by Nielsen and Linnebank, 2011.) Th is means profi t is pertinent, but not a pressing priority.

Finally, in all creative industries, both public and private organizations, whether profi t or non-profi t, I believe that a fundamental aspect of their mission is to contribute to the civil, social, and cultural progress of their country and the world. Consequently, they give other organizational goals – like promoting new creative talent, raising the cultural level of the general public, and enhancing the image of their city or coun-try – the same (or even higher) priority as profi t (or fi nancial sustainability, in the case of non-profi ts). If this weren’t the case, there would be no explanation for the enormous number of market and fi nancial failures in these industries.

Figure 1.1 sums up the distinctive features of creative industries. Th eir usage for the inclusion of an industry

in the creative group is more eff ective – I believe – than any ex ante defi nition. Th e more of them an industry possesses, the more relevant is creativity in giving form to relative supply-demand dynamics. And the more necessary is a marketing management model that takes into account these features when providing recom-mendations on designing and implementing marketing strategies and tactics.

1.3 THE INCREASING ECONOMIC IMPACT OF CREATIVE INDUSTRIESTh e world has always had creative industries. Any one of them included in the defi nition used here can trace its origins back several centuries, if not millennia. But never before have these industries captured so much attention from institutions and decision makers, both public and private.

Th e fi rst indication that creative industries are taking the lead on the economic scene comes from economic data, which show that creative industry products (in other words, the so-called creative economy) account for a rising percentage of international commercial trade. In fact, the average annual rate of increase was 11.83 per cent from 2002 to 2008 (UNCTAD, 2010), surpassing growth in trade of other products by far.

Non-objective

preferences

Experiencegoods

Profit andnon-profit

coexistence

Infinitevariety

Structuralfailure

Non-utilitarian

consumption

Aestheticvalue

Multipleproduct life

cycles

CREATIVEINDUSTRIES

Figure 1.1 – The distinguishing features of creative industries




What’s more, today the creative economy contributes to the Gross Domestic Product of numerous developed or developing countries much more than traditional manufacturing output (UNCTAD, 2010). But what has triggered this boom?

I think the causes can be found by looking at the changes that have been driving the evolution of contemporary economies over the past two decades, changes that make creative industries well suited for satisfying specifi c needs of both organizations and individual consumers. In fact, for producers they make better growth opportunities compared to other indus-tries, and individuals get a set of products that they can use to better express their identity and lifestyles.

Here are the most signifi cant of these transformations.

1.3.1 The increasing value of intangibles

Expressions such as ‘the information economy’, ‘the knowledge economy’, or ‘the service economy’ have been incorporated into the lexicon of anyone who is interested in exploring the evolution of contempo-rary society (Castells, 1996, 1997, 1998; Powell and Snellman, 2004). Th e common root of these terms lies in the epic transformation that has dominated the twentieth century: the primary source of value in contemporary economies has switched from tangibles to intangibles.

In other words, knowledge content counts more than physical components in determining product value. For fi rms and institutions, this means that value doesn’t lie in their tangible resources, so much as in the intellectual and relational capital they can leverage (know-how and reputation). Basically, in economies where tangible resources (capital, machinery, real estate, physical production input) are widely avail-able to all competitors, organizations must build com-petitive advantage on mainly innovation capabilities, knowledge of the markets where these innovations are commercialized, reputation in markets providing factors of production (the fi nancial market, the labor market, and so on), and reputation in markets where products are sold.

Consequently, products represent the materialization of knowledge. An iPhone, for instance, is a high-value product for consumers because it incorporates both scientifi c knowledge, and knowledge about the benefi ts consumers seek, making it possible to execute given functions and provide given performances. Naturally,

its physical components make an iPhone a quality prod-uct, but taken together they count much less than the know-how that went into creating it.

Th e terms ‘information economy’ and ‘knowledge economy’ are almost spontaneously associated with ‘service economy’. As the importance of tangible product components decreases, the service component becomes more critical in providing value to customers. Going back to the iPhone, this product off ers consum-ers an array of services that go far beyond basic com-munication, including entertainment, geo-localization, advising, and so forth. Th is exemplifi es an ongoing trend: products are materialized knowledge that supplies services for customers (Vargo and Lusch, 2004).

Th ese ‘new economies’ (information, knowledge, and service) are rooted in individual and collective creative talents. One of the most infl uential books in shaping the collective understanding of the economic and social role of creativity is indisputably Th e Rise of the Creative Class by Florida (2002). Th is author asserts that the transition to information, knowledge, and service economies is generating a new social class – a creative social class – made up of people who use their creative talent as a key factor of production in their economic activities.

Florida’s work provides a solid argument under-scoring the fact that the growing role of information, knowledge, and services in contemporary economies is also a driving force behind the increasing relevance of creative industries. In fact, these industries provide the most tangible evidence of the value generated via information, knowledge, and service.

In some of these sectors (for instance publishing, music, fi lm, and entertainment) what customers value is content; the physical support that materializes this content is only a secondary component, serving mainly to facilitate access. In other sectors (art, fashion, design, architecture), the physical product is clearly a source of value in itself, but because it encapsulates a stock of knowledge that translates into a style, a form, an aesthetic project. In any case, the primary value that all these sectors provide to their customers is intangible. Consequently, creative industries enable companies to generate value for customers by opening up growth opportunities that other sectors can’t guarantee.

Yet as I see it, labeling contemporary economies as intangible isn’t simply a reference to production sys-tems, but to consumption systems as well. Although products and services have always been consumed




in part for their communicative value (Douglas and Isherwood, 1979), in contemporary societies where goods and services are widely available, more and more often products and brands are used to build self-image and convey this image to others.

To accomplish these complex communication tasks, individuals need competences and knowledge that are appropriate and updated. For consumers to understand the image of a product or a brand in order to use it to communicate their self-image or to show expertise in a social conversation, they must have knowledge, which they build by systematically gathering information and accurately interpreting it. Once again, it is intuitive to see how this aspect of contemporary ‘intangible economies’ drives creative industries to the fore. Th ere are two reasons why. First, products in creative industries are highly ‘posi-tioning’ (Caves, 2000: 180–3). In other words, people can get a much clearer idea of someone’s attitudes and values by looking at the clothes and accessories she is wearing, or by listening to her talk about her favorite music or books, instead of fi nding out what brand of dishwasher she owns or what laundry detergent she uses. As we’ll explore further in Chapter 3, products from creative industries represent symbolic resources for consumers (Bilton, 2007: 151–2), which are invaluable in information and knowledge societies.

Th e second reason why creative industries enjoy a higher profi le in the context of intangible economies is that many players in these industries take on the role of value agents in the process of collecting information and assigning meaning by consumers. A fashionista who wants to discover the latest trends would read a fashion magazine. Teens who want to know what everyone’s listening to would watch MTV. Someone with a passion for contemporary art who wants to fi nd out about the season’s most innovative exhibits would make it a habit to browse the websites of high profi le art magazines. In contemporary societies, actors in creative industries play a central role in the process of assigning collective meaning to product categories, brands, and organizations.

1.3.2 The aestheticization of daily life

Another common connotation for today’s society is ‘post-modern’. In this book, I don’t intend to get drawn into the far-reaching debate on the question of ‘post-modern’ or ‘post-modernity’, or to add my

opinion to it.4 But for the purposes of this particu-lar section, I think it’s interesting to focus on what many feel is a distinctive feature of post-modern societies.

Th e fact is that in the process of social sense-making, many institutions and major collective movements that infl uenced the nineteenth and much of the twentieth century no longer do so. States, religions, political parties, unions, workers’ movements, students’ movements, and so forth are losing (or have completely lost) their ability to provide individuals with a system of values, an identity, a cultural project to embrace in building individual identity. Th e ‘post-modern condi-tion’ (Lyotard, 1984) is a more solitary one in which every individual builds his or her identity alone.

As a result, the opportunity, the risk, and the responsibility of this long, complex process rests entirely on the shoulders of each individual. A unique feature of individualization of identity-building is the aestheticization of daily life. Featherstone (1991: 66–7) isolates three dimensions of this process:

●● Th e disappearance of the borders between art and daily life.

●● Daily life as an aesthetic project. ●● Th e role of images and signs in building meaning in

daily life.

Beginning with the artistic works of the avant garde and surrealist movements in the early twentieth cen-tury, the barrier between art and daily life has become gradually more permeable. Th e use of everyday objects as works of art, or in works of art, is now common practice in artistic production. What’s more, Pop Art has turned iconic twentieth-century products and brands into art. Today we also have video-art, which uses daily life as an artistic testing ground. All this reinforces the concept that our daily lives, what we do and the things we use, can take on an aesthetic value that precludes any prior separation between what is and is not art, leaving these questions open to answers both from producers and consumers of art.

At the same time, if daily life can have salient aesthetic content, individuals can become their very own aesthetic designers. Th e body becomes a canvas on which people can experiment by putting aesthetics into practice using physical manipulations (such as tat-toos or piercing) or symbolic manipulations (clothing and accessories). Private spaces, where individuals live and work, also become aesthetic testing ground where




they can choose, combine, and display objects that express their personal aesthetic project.

Finally, the media system regularly generates a myriad of images, transmitting them effi ciently and rapidly to people, who can use these images as symbolic resources within our system of social and individual sense-making. Brands are an example of symbolic resources. Th e most famous and long-lasting brands are the ones that have become cultural icons; as such they contribute to sense making for social groups, communities, entire countries, or even lifestyles on a global level (Holt, 2004).

Due to the aestheticization of daily life, the output of creative industries has taken center stage.

On the one hand, thanks to its aesthetic value, this output makes creative industries particularly well-suited to the aesthetic connotation of daily life; on the other, its positioning value qualifi es this output as a symbolic resource that serves to confer social value to individual aesthetic projects. Moreover, the production system of creative industries is a very powerful and effi cient apparatus for generating and rapidly circulat-ing fl ows of images and signs. So players in these industries have the competence and reputation that makes them extremely eff ective in the process of sense-making that underpins every individual and col-lective aesthetic project.

1.3.3 The digital revolution

It’s no coincidence that in the conversation about the impact of digital technologies on the economy and on society at large we often hear the term digital revolution. Th ese technologies have, in fact, totally transformed how products are made, distributed, and used in all economic sectors. And the revolution will continue in the years to come. Likewise, digital tech-nologies have modifi ed the way people communicate and interact, giving new forms to the way they relate to one another. Th is impact is particularly pronounced in creative industries, another reason why they have taken on greater relevance.

Th e most evident sign of this is online retailers, who have changed the way people buy and consume products in creative industries. In the US, for instance, the world’s biggest publishing market, the market share for e-books was negligible until the introduction of the Kindle by Amazon in 2007, the Nook by Barnes and Nobles in 2009, and fi nally the iPad by Apple in 2010. Th ese

e-readers boosted sales in some genres to 60–80 per cent of market share in 2011 (Th ompson, 2012). Th at same year, the turnover from digital music sales accounted for 32 per cent of overall revenue in the global music market, but in some countries (the US, South Korea, and China) this fi gure exceeded 50 per cent (IFPI, 2012).

Although these data provide us with a telling image of the impact of the digital revolution, they only reveal the aspects that are more visible to the general public. Digital technologies have aff ected creative industries in all phases in the process of producing creative value. As far as generating creative ideas, there’s no longer anything novel about video-artists who use the power of computers. But when David Hockney, one of England’s leading painters of fi gurative art, presents his fi rst exhibit of iPad artwork, this is tangible evi-dence of a radical change that is underway, even in the more traditional forms of artistic expression. Digital technologies broaden the spectrum of possible forms of creativity, from its very conception.

An equally revolutionary eff ect can be found on the production phase. Take the publishing sector, for example. Once upon a time writers would use typewriters; then the manuscript had to be transposed into a set of characters for the printing phase, the end result of which were the actual pages of the book. Th ink about how long this process used to be, and all the possible errors, corrections, and resulting delays, ending with the need to stock fi nished products. Today instead writers work on laptops, and send the fi nished fi les to their editors, who (after standardizing the for-mat) send them to the printer or save them in a digital archive waiting for a request to print on demand.

How much time is saved? How many errors can be avoided? How many costs can be cut?

And what about other sectors like design, or home décor, or jewelry? Here objects are designed in 3D and actually molded with a 3D printer, rapidly creating a prototype that is nearly identical to the fi nished prod-uct in terms of quality.

So in creative industries, digital technologies have revolutionized the entire value chain because the diff erent phases are compressed, and they interface much more effi ciently because they share the same communication code. In the past, instead, every phase contained a diff erent code, which had to be translated in order to move forward to the next phase.

In terms of product distribution, digital tech-nologies allow producers to get a global reach for their




products. Not long ago, it would have been practically impossible for a South Korean singer to become a global superstar and break the US Top 100 singles chart. Today, early 2015, with more than two billion hits on YouTube to his name, Park Jae-Sang (aka PSY) did just that with his ‘Gangnam Style’. Th e same is true for Moroccan fashion designers, contemporary Indian artists, Nigerian fi lm makers, Ghanian videogame creators. Any consumer in the world who has an internet connection can watch a Th ai ‘football tennis’ match, or Pakistani cricket. Or if she wants to plan her next vaca-tion, she can check out archeological sites in Cambodia or Mauritania; she doesn’t need to go to any intermediary for information.

Access to products from creative industries is practi-cally free, making them global by defi nition. Th ere are two immediate – and opposite – eff ects of globaliza-tion. Today, for every producer of creative goods and services, the potential market is global. Digital tech-nologies make it possible to overcome physical barriers that have always prevented consumers from purchas-ing or even fi nding out about certain products. But on the downside, globalization has drastically intensifi ed competition in creative industries. As we saw in the previous section, the variety of creative products is practically infi nite, and digital technologies make this infi nite variety available to an unbelievable number of potential consumers. Because of this phenomenon, producers fi nd their products competing against other products, but before now they didn’t even realize these competitors existed.

If we wanted to sum up in a simple sentence the impact of the digital revolution on creative industries, we could say that for the fi rst time digitalization has made it possible to separate the content from the format. While people used to go out and buy CDs, books, clothes, designer goods, or attend a live concert, today they can listen to songs on CDs, smartphones, PCs, or MP3 players. Th ey can read a book in print format, or on an e-reader, or even listen to an audio book. A painter who creates a picture on a PC can print it on paper, canvas, or on fabric, or turn it into an object by using a 3D printer. People can listen to a live concert by going to the event, or by streaming it on one of their hi-tech devices. Th e content is no longer linked to the format. Diff erent formats simply off er diff erent ways to use a product, and at the origin of the entire process, greater creative freedom in generating new ideas.

1.3.4 Cross-industry dynamics

In 1988, Sony bought out Sony/CBS, a joint venture established in 1968 with CBS, that controlled approxi-mately 20 per cent of the global market of recorded music at that time. Th en in 1989 Sony acquired Columbia Pictures Entertainment. Th ese were the fi rst clear signs that two previously separate sectors – hardware and software (content) – were merging into one. In 1994 Sony launched the fi rst PlayStation, which triggered the explosion of computer entertainment, reinforcing the conviction that the two sectors could no longer be thought of as distinct. Th e Sony example is only one of many that can be found in creative industries from the 1990s on.

One of the peculiarities of that decade was the emergence of competitive strategies that didn’t apply solely within the confi nes of a specifi c industry; instead the aim was to identify growth opportunities that arise from the blurring of boundaries between industries that were once considered separate. Th is trend continued in the 2000s and is ongoing today. Diversifi cation strate-gies resulting in indistinct industry boundaries is a phenomenon that is particularly apparent in creative industries.

Examples that spring to mind are in the media and entertainment industries, with big companies like Time Warner, Disney, or the News Corporation. However, the same is true for other sectors. Th e museum and exhibit industry has always been separate from the world of fashion. But now it has become a common occurrence for great contemporary art museums to host retrospec-tives of famous fashion designers, and companies like Gucci and Ferragamo have their own corporate muse-ums. Or other fashion houses like Cartier and Prada have set up their own foundations to promote contem-porary art. All these undertakings make it harder to raise barriers between the two industries. What’s more, when the museum of FC Barcelona (the city’s world class football team) draws more visitors than any other attraction in the city, it’s clear that the line between sports, exhibits, and tourism is a tricky one to draw.

Creative industries represent contexts where blurry boundaries between diff erent sectors can generate promising growth opportunities. Th ere are two reasons for this, as we’ve discussed above. Th e fi rst is the aes-theticization process of daily life, which turns products from creative industries into invaluable symbolic resources for individuals. A fi rm or institution that can




boast a portfolio covering various product categories in diverse creative contexts is an organization that can provide consumers a broad off ering platform to sup-port individual aesthetic projects. Th is capacity rein-forces the organization’s reputation as an important agent in the world of symbolic value production.

Th e second reason is the separation of content and format, made possible by digital technology. An organiza-tion that off ers valuable creative content for consumers has the chance to increase the return on the investments it makes in creating content by using a variety of distri-bution channels. Th erefore, controlling channels is a way to secure a signifi cant competitive advantage, eroding the separations between diff erent industries.

Summing up, then, the rise in the economic impact of creative industries, which can be seen from their growing weight in the global economy, essentially depends on the capacity of the creative economy to do two things: to provide organizations with better growth opportunities than other industries, and to supply individuals with a set of symbolic resources that is particularly suited to the needs of today’s post-modern society.

1.4 CONCLUSIONSMy aims in this chapter were three. First, in order to propose a model for marketing management that works for creative industries I needed to provide a defi nition of those industries. But my point in doing so was not to come up with a rigid classifi cation; instead my defi nition has a heuristic value. In other words, it serves to reach my second objective: to identify the specifi cities that distinguish creative industries from non-creative industries.

Th ese specifi cities serve as a litmus test to deter-mine whether or not the marketing management model I propose is eff ective for an organization that operates in a creative industry. Th is model will make it possible to design and implement marketing strate-gies that are suited to the unique characteristics of the market contexts that typify these industries.

My fi nal aim was to highlight the reasons why creative industries are taking on greater economic relevance, because these reasons also represent vectors that impact the internal dynamics of the production and consumption systems that will characterize these industries in the years to come.

My focus in the next chapter is to describe the spe-cifi cities of the process of value production in creative industries. Th ese specifi cities will serve to delineate both the role of marketing in these contexts, and the features of the resulting marketing management model that is consistent with these processes.

REVIEW QUESTIONS 1. Which is the role of creativity in determining the

main characteristics of a creative industry? 2. What are the characteristics distinguishing a crea-

tive industry from a non-creative one? 3. Creative industries produce experience goods.

Which eff ects does the ‘experience’ quality of products have on the functioning of a creative industry?

4. Why are creative industries increasingly important in contemporary societies?

5. What are the impacts of the digital revolution on the production and consumption of creative products?

MATADERO MADRID: WHERE CREATIVITY CONNECTS PRODUCTION AND CONSUMPTIONMatadero Madrid was born in 2006 as a new metropolitan cultural center, a place for art, culture, and leisure. This structure is

housed in what was formerly the city slaughterhouse (matadero in Spanish), located just south of the center in the Arganzuela

quarter. Thanks to this location Matadero Madrid extends the center and fosters urban renewal in the southern part of the city,

forging a fascinating inner-city space for abundant flows of residents and tourists who visit the center every day.

Since its foundation, Matadero Madrid has acted as an urban, social, and cultural catalyst for the city, an opportunity for

Madrid to strengthen its cultural offering. The project has taken a multidisciplinary approach from the very start, overcoming

CASE STUDY




the typical barriers erected around different art forms, including performing arts, cinema, music, design, architecture, urban

and landscape planning.

In fact, the mission of Matadero Madrid centers on promoting all forms of artistic expression, with a distinct accent on the

dialogue between different arts. To fulfill this mission, the institution focuses on three main areas of action:

1. Artistic production, by promoting interdisciplinary creation and experimentation through information, training, studio space,

workshops, and laboratories.

2. Dissemination, communication, and exhibits of the cultural offering in an international circuit, by giving artists (especially

emerging artists) an appropriate context for creating and presenting their work.

3. Training and research, by offering didactic activities and workshops open to all fields of culture.

The institution’s mission entails the interrelation and reciprocal contamination of diverse art forms. There are two reasons

behind this orientation. The first is that the culture of the management team that runs the institution is embedded in pluralism

and diversity. The second is more practical: Matadero Madrid is enormous, covering nearly 200,000 square meters, so the

institution needs to exploit a vast space.

The aspiration of Matadero Madrid is to constitute a true benchmark for contemporary art, at both a national and interna-

tional level. In light of this ambition, the center takes on the role of guarantor of multiculturality and interculturality, reflecting the

soul of Madrid, which is nourished by cultural diversity. The institution strives to serve as a permanent venue for creativity and

diversity – social and cultural as well as artistic.

Matadero Madrid is developing groundbreaking initiatives in collaboration with other cultural institutions all over the

globe. (The newly-opened space for artistic creation in Paris dubbed Le 104, the Delfina Foundation in London, the Lieu

Unique in Nantes are only a few.) Some locations are part of a network of contemporary art centers which are all renovated

slaughterhouses – including Macro-Mattatoio in Rome, Les Abattoirs in Toulouse, Arena Wein in Vienna, and MARTadero in

Cochabamba, Bolivia.)

The building and its historyThe old slaughterhouse is one of the most singular and fascinating industrial buildings of twentieth century Madrilenian archi-

tecture. It was built between 1910 and 1925, and used as a storehouse for food during the two world wars. In 1987, the

building was converted into a space dedicated to socio-cultural activities; in 1990 the area became the Headquarters for the

Ballet Nacional de España. Finally in 1996 the former slaughterhouse closed down entirely.

After it was abandoned, local associations stepped up and demanded they be allowed to use the rooms in the build-

ing for social and cultural activities. They protested against the reconversion project promoted by the city that would have

granted rights to this public property to a private operator who planned to renovate the site. In 2003, a new municipal

administration opted instead to reverse the strategy for the area and make the reconversion of the slaughterhouse a cor-

nerstone in the program to recover the historical patrimony of Madrid, within the framework of a revitalization plan for the

southern part of the city.

Madrid’s City Council Department of Art decided that the conversion would center on a huge laboratory for creating and

producing contemporary art. The official promoter of the project was the City of Madrid, flanked by a number of other public

and private institutions. Matadero Madrid site was officially reborn in 2006, but reconversion activities are not yet finalized and

the project is still in progress.

The recovery program for the space benefited from input from world-famous architects, designers, and artists from various

disciplines. All of them are from Madrid, to strengthen once again the vital connection between Matadero Madrid and the city.

The architect Arturo Franco took the lead in renovating the hall (sala Paseo de la Chopera) and the Intermediae (described

below), restyled with the use of iron and glass. The theater director Mario Gas, in collaboration with the designer Jean Guy

Lecat and other professionals (artists and architects) worked on the Naves del Español project. The guiding principles in this

project were reversibility, flexibility, and versatility: new elements and materials were introduced (polycarbonate, for example)

and combined with existing ones to spawn a polymorph and polyform space.

The Central de Diseño project, on the other hand, is the fruit of an initiative by José Antonio García Roldán, who united

recycled and recyclable materials, using removable polycarbonate for the illuminated walls, secondhand industrial laminates

for the flooring, and galvanized iron. I have mentioned only a few of the artists who have been involved in the recovery and

renewal process over time. But my point is not to list them all, but rather to underscore the multidisciplinary approach along

with an openness to plurality and contamination, values that are encoded in the institution’s DNA and rooted in its modus




operandi. Matadero Madrid pursues diversity and contamination not only through the activities it promotes, but also in the very

spaces that host these activities.

Target audienceMatadero Madrid targets two main audiences: artists and consumers. Artists are quite a heterogeneous target, consisting of a

high number of young emerging creative minds along with veterans who have worked at Matadero Madrid for years now. The

aim is to provide structures and tools to encourage artistic production, and then to display this work to the public. ‘Structure’

refers to work space and work tools, venues and exhibition opportunities; ‘tools’ are all the different types of operational sup-

port (networks, professional services, and so forth) that allow artists to share their production with third parties (normally the

public).

For example, the institution supplies training courses in art. Over time, Matadero Madrid has also established a manage-

ment workshop to support artists, a place where they can learn useful financial notions such as how to write up an invoice and

how to organize and develop a project.

Another key objective for Matadero Madrid is to export Madrilenean artists all over the world; at the same time the institu-

tion is committed to bringing foreign artists to Madrid, promoting integration and commingling with local artists. To achieve this

objective the management team has set up accommodation inside Matadero Madrid that serves as living quarters for resident

artists. In the spring of 2013, for example, Matadero Madrid hosted several Turkish artists who were invited to collaborate on

an artistic project culminating in a show for the public based on their country. Finally, the institution has a tradition of offering

scholarships for artists, to promote their professional growth and artistic production.

As for consumers, Matadero Madrid is meant to be seen as a cultural center oriented toward quite a heterogeneous public.

The aim is to open up to the entire population (local and non-local), supplying spaces and activities that allow individuals

complete freedom of experience. Matadero Madrid is planning to offer a varied series of cultural activities, from the late morn-

ing until the late evening, complemented by a set of accessory services, such as bars and restaurants. The idea is to motivate

the local population to spend time at Matadero Madrid, even if they don’t know what’s on the daily schedule and or what

specific activity they might be interested in. In this sense, Matadero Madrid becomes a gathering place where people can

meet, offering things to do and a place to do them.

As we’ve said Matadero Madrid’s public is quite heterogeneous and in fact the structure offers diversified products for

children, young people, and adults. The audience can participate in the institution’s activities somewhat passively, by simply

looking at an exhibit or listening to a concert. But whoever feels the inclination to be more active can get involved in weekly

workshops, special individual initiatives, laboratories, and collective activities.

CREATIVE CONTENTS IN CREATIVE CONTAINERSThe plan to reconvert the old slaughterhouse impacts an enormous area which is divided into sectors A, B, and C. Sector

A isn’t entirely renovated, but the remaining sectors (B and C, nearly 150,000 square meters) house spaces used for a wide

range of purposes. As mentioned above, the activities offered are quite varied, to respond to the needs of myriad users. Here’s

a description of the different products and services that the institution offers, along with the intended audience for each one.

Casa del Lector. This is a specially designated reading area, where readers of all ages can mingle with professional writers.

The Casa del Lector hosts numerous events: exhibitions, conferences, educational courses, workshops, music, film, and

stage arts series, all responding to the objective of educating readers in focusing, understanding, interpreting, and sharing

written texts.

Central de Diseño. Run by the Fundación Diseño Madrid, promoted by the Association of Madrid Designers (DIMAD) via the

DIMAD Foundation, the aspiration of this center is to take the lead in promoting national and international design, including

graphic design, product design, and spatial design. Since November 2007, the Central de Diseño has been located in

Nave 17, renovated by the architect José Antonio Roldán. The center hosts national and international artists and seeks to

satisfy the needs of the city and all its residents.

Cineteca. This cinema offers almost exclusively non-fiction film, in pursuit of its mission to become ‘the Mecca of the docu-

mentary film genre in Madrid’. It’s open to a wide audience, adults and young people alike.

Nave 16. With nearly 6000 square meters of floor space, Nave 16 is intended to be the largest, most exciting multi-pur-

pose exhibition space in the city. Its versatility makes it home to various kinds of presentations, major events, concerts,




workshops, live performances, and social activities. Artists from a variety of fields present one-shot works and/or temporary

exhibitions. The offering of Nave 16 targets a vast audience, local and non-local.

Intermediae. This experimental program consists of a hands-on laboratory open to the public. The aim here is to get both

artists and the public involved in a process of collaborative artistic experimentation based on dialogue and co-creation, all

centering on proactive participation of the public (children, young people, and adults).

Naves del Español. This space, run by the Teatro Español through the public company Madrid Destino, was designed by the

artist Jean Guy Lecat. It houses three highly flexible interconnected areas which can function independently. Nave 12 is the

foyer or entrance to the building, and has a reception desk and a cafeteria; here small shows can be performed. Nave 11

was designed with an eye to flexibility, allowing the staging of multiple shows. And finally Nave 10 hosts Room 2, covering

2500 square meters, which opened its doors in September 2010 with the premier of ‘El Proyecto Youkali’ by Miguel del

Arco.

Nave de Música. This space hosts the whole of the music offering of the center. It’s a veritable musical village for artists,

equipped with a radio station, a professional recording studio, nine practice rooms, and other features. The Nave de

Música also hosts concerts in conjunction with some of the main music events in Spain. The Nave de Música guarantees

facilities and instruments for young emerging artists with the aim of encouraging dialogue and facilitating the hybridization of

various artistic disciplines.

Matadero Madrid also offers several social spaces (bars and restaurants), where people can sit down, eat, read, relax. There’s

a main street (calle Matadero) and a central square (Plaza Matadero), along with areas used for major events or simply as urban

gathering places. The institution also makes research and reference areas available to the public (Archivo Documenta, Archivo

Matadero), housing vast collections destined for both experts and the general public alike. The structure also offers natural

spaces where people can admire the beauty of nature and develop a green culture by participating in a series of activities (Avant

Garden and Deposito de Espices).

The organizational modelDiversity, the institution’s distinguishing trait, also emerges in its governance model: Matadero Madrid is founded on intense

cooperation between the public and private sectors. These dual sources of support guarantee a degree of independence in

defining the business plan and making artistic decisions.

The heart of the institution is public, as it’s sponsored and financed by the City of Madrid, but its soul is made up of a

multitude of private entities (IFEMA, Fondazione Germàn Sànchez Ruipèrez, among others), which represent sources of third-

party funding devoted to architectural renovation and cultural projects. Some joint ventures with third parties have become

constants (Fundación Diseño Madrid, Fundación Germán Sánchez Ruipérez, Red Bull Spain, to name a few).

An example here is the Casa del Lector. The main room has 3,000 square meters of floor space, with other smaller exhibi-

tion areas, a number of classrooms set up as laboratories, and an enormous auditorium. The entire area is privately owned,

sold to the Fundación Germán Sánchez Ruipérez, which enjoys total autonomy in managing its content. The foundation

organizes courses, master classes, workshops, and events, supported by Matadero Madrid only in designing and delivering

communication content.

Another impressive example is the Red Bull Music Academy. The partnership between Red Bull and Matadero Madrid

began a few years ago almost by chance, when at the last minute the company needed to relocate the music event of the

year, which was originally planned for Tokyo but then cancelled due to the 2011 earthquake. In light of the success of the

event, Red Bull and Matadero Madrid began a permanent collaboration, managing the institution’s musical offering, mostly

hosted at Nave de Música. The joint venture between the two organizations satisfies the needs of emerging and established

artists as well as audiences, providing the first with the spaces and instruments they need to work, and the second with

concerts, laboratories, and countless music projects.

Another noteworthy example is the Central de Diseño, a space managed by the Fundación Diseño Madrid (DIMAD), thanks

to an agreement with the city of Madrid. This collaboration between the two institutions tasks DIMAD with disseminating,

promoting, and developing the culture of design and its myriad manifestations through exhibits and events, and training and

services for designers and companies. With an average of around 20,000 visitors a month, a number that’s constantly rising,

the relationship is clearly effective and profitable.

In all the forms of collaboration described above, Matadero Madrid’s partner companies and institutions generate and later

manage activities with some level of autonomy. Matadero Madrid, with its official communication, takes on publicizing the

programs and handling public relations with key stakeholders. The main communication tools it uses are online posts and




banners, usually on small local sites; posters in key areas of the city (Callao, one of the most popular squares in the center);

flyers distributed throughout the city; and the Matadero Madrid Web site.

Matadero Madrid’s business plan calls for the City of Madrid to take on all the structural costs and to contribute to extraor-

dinary expenses. All the activities proposed by Matadero Madrid are funded directly from operating income (coming from ticket

sales, commercial activities, and so forth) and by the institution’s patrons. Future orientation is leaning toward progressively

growing the pool of private patrons. This would guarantee greater financial security in times of economic crisis. With increased

private funding, Matadero Madrid could also continue to offer low-cost or even free activities, to ensure that people don’t stop

consuming culture.

REVIEW QUESTIONS1. Matadero Madrid is an art center devoted to many art forms. What are the advantages of this multidisciplinarity? Any

disadvantages?

2. Blurring the barriers between production and consumption is a distinctive trait of Matadero Madrid. What are the positive

effects of this choice?

3. Matadero Madrid has very peculiar governance and organizational systems. What are the benefits they provide and what

are the potential weaknesses?



365

INDEX

access, 72, 275action planning, 348, see marketing planadvertising, 280–1, 292–3, see

integrated marketing communication

campaign, 292–3comparative, 293emotional, 293image, 293

aesthetic experience, 70aesthetic products, 9, 81aesthetic taste, 81–2aesthetic preference, 81aesthetic sensitivity, 81aesthetization of daily life, 13–14affective evaluation processes, 98–9,

see consumer choiceallowances, 263area test, 228, 255, see new product

developmentassortment, 235, 283, 298, see retailersattitude-based processes, 98,

see consumer choiceattrition, 325auction, 257audience, 119–20, 160

target, 119, 290–1, see integrated marketing communication

auditing, 349, see marketing planautomatic recommendation

system, 294

bandwagon effect, 219, 229beauty, 70, see also aesthetic experience,

aesthetic tastebehavioral indicators, 322–3, see also

customer loyaltybenefi ts, 29, 59, 118, see customer value

explicit, 94, 205implicit, 94, 205

blockbusters, 221brainstorming, 225brand, 10, 237

cash cows, 246corporate, 247dilution, 246elements, 239–41, 243endorsement strategy, 247,

see brand architectureentry level, 247familiarity, 127

fl ankers, 246image-enhancers, 246lifecycle, 242–6logo, 148, 240master, 247mission, 239name, 240parent, 247recognition, 296recall, 296repositioning, 244revitalization strategy, 243–6strategic, 246symbols, 148value, 237–9

brand architecture, 246–8, see also brand endorsement strategy, house of brands, sub-brand strategy

brand attachment, 107, 319, 323brand awareness, 123, 237, 242brand communities, 67–8, see also

communities of consumptionbrand equity, 238–9brand extension, 238, 245–6, see brand

revitalization strategybrand identity, 239, 241brand image, 122, 237, 241–2, 299, 327brand loyalty, 107, 243, 324brand portfolio, 246–8branded house, 247, see brand

architecturebranding strategy, 247break-even analysis, 252, 298break-even point, 252bridges, 294, see social networksbudgeting, 349, see marketing planbuying centers, 130buzz, 229buzz marketing, 289

cannibalization, 246, see also brand portfolio, product portfolio

capital, 25–27cultural, 81economic, 25, 80social, 25–7, 57–8, 80–1symbolic, 25–7, 57–8, 81

category extension, 245, see brand extension

category-to-category fi t, 245, see brand extension

cause-related marketing, 121celebrity endorsement, 127–9census, 155channel architecture, 300channel design, 297–300,

see go-to-marketchoice experience, 93–9, see consumer

experiencechurn rate, 328city branding, 239click-through rate, 296cluster analysis, 194co-creation, 65, 233–4, 319, see also

consumer participationcognitive and affective indicators, 323,

see also customer loyaltycognitive assessment processes, 95–8,

see consumer choicecompensatory, 95conjunctive, 97cutoffs, 97elimination by aspects, 97lexicographic, 97multi-attribute models, 95non-compensatory, 97

collecting, 68commercial intermediaries, 297communication, 117–21, 290–4

agency, 132, 292brief, 292effectiveness, 295effi ciency, 295frequency, 120gap, 182, see market potential gapimpact, 120message, 120–1, 292–3non-verbal, 145objectives, 291processes, 290

communities of consumption, 38, 58, see also brand communities

competitive dynamics, 211, 221–2, see also product lifecycle

competitive gap, 182, 188, see market potential gap

competitive pressure, 200complaining, 106, 326concept test, 227, 295, see new product

developmentconnoisseur products, 221



366 Index

consumer, see customeraffi liation, 318, see membershipattention, 91, 301attitudes, 87, 98, 102behavioural responses, 100beliefs, 86categorization processes, 42–4categorization systems, 86choice process, 95–9, 301commitment, 318–9competences, 144demographics, 80desires, 80dissatisfaction, 62–3emotions, 90, 98, 100, 106evaluation process, 93–4, 301expertise, 87, 102, 106feelings, 99, see consumer emotionsidentifi cation, 107, 319, 323identity, 55, 118immersion, 69–72individual characteristics, 80–4information, 86, 291involvement, 84, 102knowledge 86–92, 144learning costs, 62, see consumer

sacrificeslife projects, 84lifestyles, 83motivations, 79–80needs, 80personality, 84preferences, 95–9satisfaction, 62–3, 106, 314skepticism, 127, 321self, 65, 147self-concept, 84self-esteem, 55status, 57values, 83

consumer engagement, 291, see customer engagement

consum er experience, 27–8, 60, see under individual stages

consumer participation, 36–9, 233consumer resources 60–1, 80, 118,

see sacrificesconsumer reviews, 89–90, 104–5,

289–90, 326–7consuming, 57consumption experience, 60, 63–72, 148,

304, see also consumer experienceconsumption practices, 63–6, 72consumption rituals, 66contemplation, 70contribution margin, 264copy test, 296corners, 302, see storescorporate clients, 114–5

corporate reputation, 122–4corporate social responsibility, 124corporate support, 121–5

audiences of, 124objectives of, 122

cost per impression, 295cost per mille, 295cost per rating point, 295cost-plus pricing, 259, see pricing

methodscreative content, 4, 15creative economy, 11creative experience, 234, see also

consumer participationcreative industries, 3–16

defi nition, 3–5creative talents, 12creativity, 5critical incident technique, 147critics, 89–90, 289

role of, 39–45cross selling, 238cross-industry dynamics, 15cultural industries, 3–4, see also

creative industriescustomer, 28–30, see consumer

acquisition, 326complaint, 326, see complainingdatabase, 321dissatisfaction, 30, 106, 325, see also

customer satisfactioneducation, 178profi ling, 194–5relational orientations, 320trust, 317, 323

customer base, 243customer engagement, 318, 323,

see consumer engagementcustomer equity, 328customer life time value, 328customer loyalty, 238, 251, 318customer relationship

lifecycle of, 317–20management, 34, 321–7stage of, 321status of, 321

customer retention rate, 327customer satisfaction, 30, see consumer

satisfactionthree factor theory of, 204–6virtuous circle of, 313–6measures of, 327–8

customer value, 29–30analysis, 32–3communicative, 54, 56–7, 115, 118creation, 33delivery, 33–4emotional, 55ethical, 54, 58–9

expected, 62–3, 79experiential, 99extrinsic, 54gap analysis, 35–6hedonic, 8, 54–6identity, 55intrinsic, 54other-oriented, 54perceived, 62–3sacred and spiritual, 55self-oriented, 54symbolic, 8, 118types, 54utilitarian, 54, 56, 99

datacollection, 157primary, 140secondary, 140

decision-making teams, 338demand curve, 249–52, see market

demanddiary, 154differentiation, 6, 26, 206–7, 211, 251,

see positioninghorizontal, 6, 26vertical, 6

digital revolution, 14 digital tools, 285direct mail, 285direct marketing, 285–6, see under

individual toolsdirect response advertising, 285distribution, 182, 297

exclusive, 299gap, 182, see market potential gapintensive, 300selective, 300

distribution channels, 297–9distribution formats, 283–4, 286–7,

see storesdonations, 59, 68–9, 122

early adopters, 219, 258, see diffusion of innovations, product lifecycle

early majority, 220, see diffusion of innovations, product lifecycle

employee satisfaction, 315e-servicescape, 293ethnographic method, 148, 154events, 286, 289evoked set, 94–5, 206, 238, 296,

see also consumer choice process

experience products, 6–7, 26, 88, 248experiments, 160–1, 255, see marketing

researchexperts, 39–45, 95extended self, 55, 72



367Index

fairness, 318fl ash mobs, 290fl ow, 69–70, 92

online, 100focus groups, 149–52franchising, 287, 299free trials, 263fringes, 294, see social networks

genre, 42globalization, 15go-to-market, 297, see channel designgross rating point (GRP), 120, 261, 295grossroots marketing, 290guerrilla marketing, 290

harvesting, 348hierarchical value map, 149, see also

laddering, means-end theoryhouse of brands, 247, see brand

architecturehubs, 294, see social networks

imitation-differentiation dynamic, 206, 219

importance-performance matrix, 230impressions, 296incentives, 338infi nite variety, 7information search, 88–91

experiential components of, 89information sources, 89, 127innovations, 219, 225

diffusion of, 219, 229disruptive, 316incremental, 316

innovators, 258, see diffusion of innovations, product lifecycle

intangibles, 12–13, 25integrated marketing communication,

290, see also communicationintegration, 336

barriers to, 336mechanisms, 337roles, 338

intermediaries, 260, see distribution channels

internet of things, 277interpretation, 44, 227interviewer, 145

role of, 145interviews, 145–9, 158

kinks, 256, see demand curve

laddering, 149, see hierarchical value map, means-end theory

laggards, 220, see diffusion of innovations, product lifecycle

late majority, 220, see diffusion of innovations, product lifecycle

light usage gap, 182, see market potential gap

line extension, 245, see brand extension

listing decisions, 303lobbying, 289logistics, 297loyalty programs, 324

macro-environmental analysis, 342–4macro-segmentation strategy, 202main benefi t, 292, see advertising

campaignmarginal revenues, 250market, 177

analysis and diagnosis, 342–7current, 175, 181, 187–9, see also

market estimatesdemand, 249, see demand curveestimates, 182–4expansion, 212failure, 7lifecycle, 178–180, 344maturity stage, 212objectives, 347–8opportunities, 225position analysis, 344

market creation, 189, 212market-driven approach, 187, 225market-driving approach, 187, 225market intelligence, 141market orientation, 30market potential, 180–1, 188–9, see also

market estimatesgap, 182, 212, 344, see under

individual componentsmarket segmentation, 189–198, 344

a posteriori, 194a priori, 193benefi t, 192by individual characteristics, 192criteria, 191effectiveness of, 196process, 191value-based, 192

market share, 160, 184–7, 298, 347–8relative, 185

market test, 228, 255, see new product development

marketing information system, 139–141marketing mix, 203marketing programs, 226, 348marketing research, 141–154

brief, 142causal, 142, 160descriptive, 142design, 143–4

explorative, 142goals, 142process, 141qualitative, 143, 144– 154quantitative, 143, 154–162sample, 143, see also sampling

methodsmarketing strategies, 347marketing, 31–2

department, 31–2, 336management, 32–4mass, 190relational, 312roles of, 31–2, 227transactional, 312

marketing plan, 341–9annual, 340strategic, 341

markup, 259means-end theory, 93, 149, 203, see

hierarchical value map, ladderingmedia habits, 290membership, 318, see consumer

affiliationmission, 347mobile communication, 285multi-channel

environment, 276–7integration, 304–5

multi-segment strategy, 202multi-media

environment, 276–7integration, 304–5

nation brand index, 240nation branding, 239net promoter score, 327netnography, 154new product development, 225–9niche marketing, 201non-profi t, 10non-usage gap, 182, see market

potential gapnumerical coverage, 186, see market

share

observation, 152–4types of, 152structured, 161

odd-even pricing, 259, see pricing methods

offering voids, 211one-to-one marketing, 190online behavior, 161online exploratory search, 92online shopping 100opinion leaders, 219–20, 294opportunity costs, 62, 314, 303,

see sacrificesorganizational culture, 337



368 Index

package, 288panels, 160penetration pricing, 259, see pricing

methodspenetration rate, 186, see market shareperceived risks, 62, 102, see sacrifices

fi nancial, 62performance, 62psychological, 62social, 62

perceptual fi t, 245, see brand extensionperceptual maps, 208–11, 344pilgrimage, 66, see consumption ritualspilot, 226, see also new product

developmentpioneers, 219place branding, 239planned obsolescence, 10, 229–230,

263, 287planning and control system, 339–40,

see also integrationpoints of difference, 207, 224, 241–2,

246, see also positioningpoints of parity, 207, 224, 242, see also

positioningpoints of purchase, 302positioning, 26, 33, 206, 241, 248,

298, 299analysis, 207–11strong, 207

possession, 72post-consumption experience, 60,

104–8, 297, see consumer experience

pre-consumption experience, 60, 88–92, 296, see consumer experience

preference map, 209, 344premium price, 201, 238prestige pricing, 251, 258, see pricing

methodsprice, 182

gap, 182, see market potential gapwar, 263

price discounts, 262–3price elasticity, 250–1, 315price lining, 257, see product versioningprice points, 255price promotions, 262, see sales

promotionspricing, 259

above-at-or below market, 260bundle, 261–2, see also product

bundlingdemand-backward, 260dual market, 261experience curve, 259loss-leader, 260

pricing methods, 256–260competition-based, 259–60

cost-based, 259demand-based, 257–8

productassociations, 118, 121attachment, 319, 323attitude toward, 314attributes, 95, 222–4awareness, 120, 123, 189bundling, 232, see also price

bundlingcategory, 218concept, 225eliminating, 232familiarity, 87gap, 182, see market potential gaphierarchy, 218–9image, 121–2improvement, 230intrinsic quality, 30knowledge, 189launch, 227line, 218new, 189range, 235recognition, 296recall, 296revitalization, 230unbundling, 232versioning, 231, 257, see also price

liningproduct disposal, 107product innovation, 225product lifecycle, 9–10, 179, 219–22,

236, 263–4product mix, 235product orientation, 30–1product placement, 125–7, 281

hybrid, 126product portfolio, 235–7product sharing, 105product test, 228, see new product

developmentproduct trials, 6, 263profi t & losses, 232projective tests, 146property rights, 113–4protocol analysis, 154public relations (PR), 289purchase quotas, 322purchases, 101

habitual, 107impulse, 101repeat, 106–7, 314roles, 103degree of planning, 101–2

purchase experience, 60, 92–104, 297, see consumer experience

pull strategies, 304push strategies, 304

quality clues, 6, 26, 39, 238, 251, 314questions, see survey

compare/contrast, 146descriptive, 146direct, 146indirect, 146sequence of, 146structural, 146

reach, 119, see communicationreason why, 292, see advertising campaignrecovery programs, 325referral programs, 326region branding, 239remix culture, 233reputation, 6, 25–26retail management, 300–2retailers, 297, see distribution formatsretention programs, 324rewards, 338RFM indicators, 322

sacrifi ces, 29, 60–2, 238, 314, see consumer resources, customer value

types of, 61–2saddle, 229sales forecasts, 226sales orientation, 31sales potential, 226sales promotions, 281–2, 303, see price

promotionssales network

direct, 288indirect, 285

sampling methods, 156, see samplenonprobability, 156probability, 156

scales, 159, see questionsscanlations, 37scheduling, 295, see advertising

campaignseeding strategies, 294, see viral

campaignsegment specialization, 202sell in, 303sell out, 303sentiment analysis, 162service economy, 12servicescape, 293 301shopping experience, 99–104, 301–2,

see consumer experienceshops in shops, 302, see storesimulated test market, 228, 255,

see new product developmentskimming pricing, 258, see pricing

methodssnakeplot, 208social networks, 67, 293–4sociogram, 293, see social networks



369Index

sponsorship, 121, 148, 281stock keeping unit, 160, 218store, 100, see distribution formats

atmosphere, 100concept, 284factory outlet, 287fl agship, 287, 299general merchandise, 284independent, 283multi-specialty, 284niche, 284owned, 286specialty, 284

storytelling, 147sub-brand strategy, 247, see brand

architecturesupporting evidence, 292,

see advertising campaignsurveys, 157–9, 208, see marketing

research, questionsmail, 158telephone, 158web-based, 158

switching costs, 62, see sacrificesswot model, 344–7, see marketing plan

target profi t pricing, 259, see pricing methods

targeting, 198–203telemarketing, 285tone of voice, 292, see advertising

campaigntop of mind, 296, see brand awarenesstouchpoints, 28, 276, 279–290

earned, 289–297owned, 285–9paid, 280–5selection of, 294–5

trade-ins, 263trade marketing, 302–4training system, 338

ubiquitous computing, 277ubiquitous social media, 277usage gap, 182, see market

potential gapuser-generated content, 289, see also

consumer participation

value, 8aesthetic, 8–9

agents, 13, 26, 39, 120, 238chain, 23editorial, 125experiential, 8, 233network, 23–7positioning, 13–4, 56

value expectation method, 254, see pricing methods

value proposition, 33, 203–5, 344positioning, 206–7variety seeking, 10, 107, 314, 320viral campaign, 293viral marketing, 289, 322

web design, 293weighted coverage, 186willingness to buy, 323willingness to pay, 255, 323willingness to recommend, 323wholesalers, 297word of mouth 104–5, 220, 315,

289–90, 326eWOM, 104

Zaltman Metaphor Elicitation Technique (ZMET), 147



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