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Experience 1.0: the experience economy
In the course of the past decades, society has undergone several fundamental shifts. People have
abandoned the idea of buying simple products and services and started to seek experiences by
consuming products and services instead (Morgan et al . 2010). In the 1990s, this growing trend
led to the emergence of a number of different key concepts, including the dream society (Jensen
1999), the entertainment economy (Wolf 1999) and the experience economy (Pine and Gilmore
1999). Pine and Gilmore (1999), in coining the renowned term experience economy, provided
one of the most seminal contributions marking a new era in marketing. Their core proposition
is the consumers' pursuit of memorable experiences in the context of consumption and the
progression of economic value. In a market characterized by globalization, deregulation, advances
in technologies and intensifi ed competition, companies were forced to fi nd new ways to
differentiate their offers (Prahalad and Ramaswamy 2004).
The experience economy hit the zeitgeist of the time as a key instrument to yield differentia-
tion, added value and competitive advantage. In practice, the principal idea for businesses was to
no longer compete in terms of price but in terms of the distinctive value of the experience
provided. For the years to follow, the experience economy has provided an unprecedented guide
for strategic staging, managing and delivering experiences to consumers among a variety of
contexts and industries. Particularly fostered by the adoption of emerging technologies, such as
interactive games, online spaces and virtual reality, it was possible to meet the demand and create
ever-more immersive consumer experiences (Pine and Gilmore 1998). Despite its perpetual
popularity in both marketing theory and practice, the experience economy has however received
critique due to its capitalist thinking (Boswijk et al . 2007) and the company's prominent role in
initiating and producing experiences (Binkhorst et al . 2010).
Experience 2.0: co-creation experiences
With an evolution in society, characterized by consumers being active, powerful and connected,
thanks to social information and communication technologies, there has been a transformation
in the traditional company-consumer power relationship (Ramaswamy 2009). Subsequently, the
orchestrated design of experiences has been considered no longer suitable to refl ect the needs,
wants and roles of contemporary consumers. With technologies allowing for multiple stakeholders
to be connected more than ever before, the consumer has assumed a much bigger role as an
active prosumer of the experience. In recognizing this change, Prahalad and Ramaswamy (2004)
propose a balance between companies and consumers as equal partners in co-creating the
experience. This milestone has advanced the notion of the experience economy and introduced
its successor generation. Co-creation represents a new paradigm for marketing. In widely
replacing the pre-existing service-dominant views it has marked the beginning of a novel
understanding of how and by whom services and experiences are created. The consumer has
become the central element in both the experience production and consumption process, which
implied that the fi rst point of interaction is no longer to be found at the end of the value chain.
Rather, it is framed as a collective and collaborative process of interactions between individuals
and companies. Co-creation manifests itself as a convergence of production and consumption
and represents an encounter in which consumer experiences are co-created and unique value is
extracted (Prahalad and Ramaswamy 2004).
The notion of value creation with the consumer rather than for the consumer has been
particularly advanced byVargo and Lusch (2004) who introduced the concept of value-in-use in
service-dominant logic (S-D logic). Whilst historically value has always been co-produced, it was
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