A Progression of Economic Value from Commodities to Experience

According to the Experience Economy (Pine & Gilmore, 1999) framework, today’s customers want more than just high quality goods and services. They want value from positive, engaging, memorable experiences along with high quality goods and services. Value refers to the benefits the customer perceives he/she gets not only from the goods and service, but also from interactions with people and places, which help shape the experience.

Consider the idea behind the once small business of Starbucks that has burgeoned into a successful public company. The focus on design with the shop’s rich warm colors, contemporary furnishings, stylized graphics, and carefully selected music makes it stand apart from other coffee shops and creates a memorable experience. Some Starbucks have added Hear Music™ media bars where customers can explore the music (including the music programmed for their stores), get recommendations, and burn selections from a vast library of songs. This is the way Starbucks has innovated its unique experience to add value for its customers.

Starbucks Coffee
A side of Starbucks: the music
http://www.starbucks.com

In their Experience Economy framework, Pine and Gilmore (1999) explain that sources of economic growth in the U.S. have shifted from extracting raw materials, called commodities, to processing the commodities to making goods, then to offering services, and now to staging positive, engaging memorable experiences.

Pine and Gilmore's Progression of Value