Abstract:
The experience economy is right here; characterised by high levels of competition and
assertive customers who make purchase decisions guided by their rational and emotional
influences. Moreover, customers are value driven and get attracted by outlets that project
positive images. There has however been no known empirical research that has modelled
this complex relationship. The purpose of this study was therefore to determine the
relationship between experiential marketing and purchase intention, moderated and
mediated by store image and perceived value. The study was grounded on the Theory of
Planned Behavior, Pine & Gilmore model of experience economy, and the Stimulus
Organism Response model. Quantitative and explanatory research designs guided the
study. Data for the study was collected from a sample of 420 customers from the Nairobi
city based branches of three tier one retail Chains in Kenya namely Nakumatt, Tuskys
and Naivas. Store intercept method was used to purposefully identify the study
respondents and a questionnaire used to collect data. Data was tested to ensure that it
conforms to the regression assumptions and later analyzed using descriptive and
inferential statistics. Confirmatory factor analysis and structural equation modeling
(SEM) was used for data analysis, using the software‘s; SPSS, SPPSS with process
macro model 7. Relationships were tested based on the dimensions and not the first order
constructs. Multiple hierarchical regression analysis was used in determining the
regression model with the overall efficiency of the model determined by use of
coefficient of determination (R 2 ). The results of the study showed that all the direct and
indirect (mediated) relationships were statistically significant. Moreover, bootstrapping
results indicate that only three out of six conditional indirect effects were statistically
significant; those involving social-sensory experience and social value (β=0.0245: Bt ll
0.0045, Bt ul 0.0516), emotional experience and utilitarian value (β=0.0506; Bt ll 0.0045,
Bt ul 0.1075), and, emotional experience and social value (β=0.0628: Bt ll 0.0282, Bt ul
0.1099). These results confirm perceived value dimensions (social, utilitarian and
hedonic) as mediators in relationships directed at purchase intention while store image
also emerged as a moderator in these relationships. The study has contributed to theory
by successfully developing and testing an integrated model on consumer decision
making. In addition, a new variable social-sensory experience has emerged from this
study. The study recommends that supermarket package their strategies to incorporate the
shoppers‘ emotional and social-sensory experiences as well as value propositions that
emphasises rational, social and hedonic aspects. Moreover, store personnel should be
well trained on service and product knowledge. Future studies may test the model in an
online or a non-service sector