The Impact of Experiential Marketing on Customer Loyalty: The Mediating Role of Customer Satisfaction in the Modern Trade Supermarkets in the Western Province, Sri Lanka

Abstract

Traditional marketing alone will not be enough for marketers to sustainably retain their position in the marketplace today. As the market situation and consumer behaviour are changing fast, marketers should adapt to the changes in the environment to attract customers by differentiating themselves from the competition. This hyper-competitive situation leads companies to focus more on customer acquisition and retention with more innovative marketing practices, including Experiential Marketing (EM). Experiential marketing is a way to create a unique place in consumers’ minds by providing a memorable and unique experience through stimulating their five senses, which will ultimately attach the consumers emotionally to the brand.  Hence, it has created a need for innovative retailers by redefining themselves as experience creators rather than just becoming service providers. The study addresses an empirical gap that exists in the literature in a culturally diverse environmental context like the Sri Lankan retail industry. Accordingly, the aim of this study is to investigate the impact of EM on Customer Loyalty (CL) through the mediating effect of Customer Satisfaction (CS) with special reference to the modern trade supermarkets in the Western province of Sri Lanka. A self-administered questionnaire was used to get the primary data from a sample of 375 respondents. The sample was selected from the customers in the Western Province, Sri Lanka through convenience and judgmental sampling methods and the collected data was quantitatively measured and analysed with SPSS software. The results demonstrate that there is a significant direct impact of EM on CL. Further, it shows that the indirect effect created through the mediation effect of CS is greater than the direct effect; hence, it mediates the relationship between Experiential Marketing and Customer Loyalty. The inference of this research can be used in developing strategies to enhance the level of CL of modern trade retail customers through elevated CS and this will ultimately lead to enhancing the competitiveness of the modern trade retail stores.

Keywords: Experiential Marketing, Customer Satisfaction, Customer Loyalty, Modern Trade Super Markets