The rise of the relationship economy: What it means for brands and brand research

Iain Stanfield


The consultants B. Joseph Pine II and James Gilmore stated that business should be theater, with services representing the stage and goods representing the props to deliver experiences to consumers. They listed changes in economic value; from agrarian economies trading in commodities, through to manufactured goods to the Service Economy. Each change offered a way of differentiating itself from increasingly commoditized, competitive offerings with the belief that, as services become undifferentiated, brands can stand out by delivering high quality experiences that set them apart from the competition, as well as building affinity[1].

Pine and Gilmore first wrote about the Experience Economy in 1992, using the example of a birthday cake to illustrate changes in economic value over time. In the Commodities Economy, parents made their child's birthday cake at home from raw ingredients whereas in the Service Economy, they bought the cake from a bakery. In the Experience Economy, parents outsourced the whole birthday party to a child-friendly chain restaurant, with the cake thrown in for free.