Free drink or free mug? Managing service experience with experiential vs. Material complimentary gifts

In gible the marketplace, objects such as complimentary a mug). We identify gifts can these take free the form gifts as of a experiential meaningful elements service design (e.g., a choice meal) that or material helps service items (e.g., providers tan-innovate service. Specifically, we examine the circumstances under which experiential or material gifts are preferred and generate greater consumer satisfaction, enhancing the overall service experience. Across three experiments, we demonstrate that consumers are generally happier with experiential offerings, and they prefer (and are more satisfied with) experiential offerings on ordinary consumption occasions; experiential elements are believed to further enrich otherwise mundane experiences. However, this experiential advantage disappears for consumers on meaningful and special occasions because of a strong desire to obtain a memory cue that will help them recall the experience. Indeed, the preference for a material item holds only when the gift has the quality to serve as a salient memory marker. This research provides insight for managers to take into account consumption occasions or types of consumers (e.g., special occasions, repeat customers) to effectively design service bundles with complimentary gifts and thus better manage overall service experience.