Chapter 10 Planning the Service Environment 1 The

Chapter 10: Planning the Service Environment 1

The Purpose of Service Environments The service environment influences buyer behaviour in 3 ways p Message-creating Medium: symbolic cues to communicate the distinctive nature and quality of the service experience. p Attention-creating Medium: to make the servicescape stand out from other competing establishments, and to attract customers from target segments. p Effect-creating Medium: colors, textures, sounds, scents and spatial design to enhance the desired service experience, and/or to heighten an appetite for certain goods, services or experiences Helps the firm to create a distinctive image & positioning that is unique. 2

Comparison of Hotel Lobbies (Figure 10. 1) The servicescape is part of the value proposition! Orbit Hotel and Hostel, Los Angeles Four Seasons Hotel, New York 3

The Mehrabian-Russell Stimulus. Response Model (Figure 10. 2) Environmental Stimuli & Cognitive Processes Dimensions of Affect: Pleasure and Arousal Response Behaviors: Approach/ Avoidance & Cognitive Processes 4

The Mehrabian-Russell Stimulus. Response Model p Simple and fundamental model of how people respond to environments p Peoples’ conscious and unconscious perceptions and interpretation of the environment influence how they feel in that environment p Feelings, rather than perceptions or thoughts drive behavior p Typical outcome variable is ‘approach’ or ‘avoidance’ of an environment, but other possible outcomes can be added to the model as well 5

The Russell Model of Affect Arousing Distressing Exciting Unpleasant Pleasant Relaxing Boring Sleepy 6

The Russell Model of Affect Emotional responses to environments can be described along two main dimensions, pleasure and arousal. p Pleasure is subjective depending on how much the individual likes or dislikes the environment p Arousal quality of an environment is dependent on its “information load”, i. e. , its degree of p n Novelty (unexpected, surprising, new, familiar) and n Complexity (number of elements, extent of motion or change) 7

Drivers of Affect p Affect can be caused by perceptions and cognitive processes of any degree of complexity. p Simple Cognitive Processes, Perception of Stimuli n n p tangible cues (of service quality) consumer satisfaction Complex Cognitive Processes n n affective charged schemata processing attribution processes The more complex a cognitive process becomes, the more powerful its potential impact on affect. However, most service encounters are routine. Simple processes can determine affect. 8

Behavioral Consequence of Affect Basically, pleasant environments result in approach, and unpleasant environments result in avoidance p Arousal acts as an amplifier of the basic effect of pleasure on behavior p If the environment is pleasant, increasing arousal can lead to excitement and stronger positive consumer response. If the environment is unpleasant, increasing arousal level will move consumers into the Distressing region p Feelings during the service encounter is also an important driver of customer loyalty p 9

An Integrated Framework – Bitner’s Service. Scape Model (Figure 10. 4) Environmental Dimensions Holistic Moderators Environment Ambient Conditions Space/ Function Signs, Symbols & Artefacts Employee Response Moderator Internal Responses Cognitive Emotional Psychological Employee Responses Perceived Service. Scape Customer Response Moderator Customer Responses Cognitive Emotional Psychological Behaviour Approach or Avoid Social Interaction Between Customers & Employees Approach or Avoid 10

An Integrated Framework – Bitner’s Servicescape Model(con’t) Identifies the main dimensions in a service environment and views them holistically p Customer and employee responses classified under, cognitive, emotional and psychological which would in turn lead to overt behavior towards the environment p Key to effective design is how well each individual dimension fits together with everything else p 11

Complexity of the Servicescape p Lean Environment n p Simple environment with few elements, few spaces and few pieces of equipment Elaborate Environment n Complicated servicescape with many elements and many forms 12

Dimensions of the Service Environment Service environments are complex and have many design elements. The main dimensions in the servicescape model includes: p Ambient Conditions n Music (e. g, fast tempo and high volume increase arousal levels) n Scent (strong impact on mood, affect and evaluative responses, purchase intention and in-store behavior) n Color (e. g, warm colors associated with elated mood states and arousal but also increase anxiety, cool colors reduce arousal but can elicit peacefulness and calm) Healthcare interior 13

Dimensions of the Service Environment (con’t) p Spatial Layout and Functionality n n p Layout refers to size and shape of furnishings and the ways it is arranged Functionality is the ability of those items to facilitate performance Signs, Symbols and Artifact n n Explicit or implicit signals to communicate the firm’s image, help consumers find their way and to convey the rules of behavior Customers become disoriented when they cannot derive clear signals from a servicescape Theme park 14

Dimensions of the Service Environment (con’t) p People are part of the Service Environment, Too n n The appearance and behavior of both service personnel and customers can reinforce or detract from the impression created by a service environment Termed as “aesthetic labor” 15

Impact of Music on Restaurant Diners Restaurant Patron Behavior Fast-beat Slow-beat Difference between Music Slow and Fast-beat Environments Absolute Difference % Difference Consumer time spent at table 45 min 56 min +11 min +24% Spending on food $55. 12 $55. 81 +$0. 69 +1% Spending on beverages $21. 62 $30. 47 +$8. 85 +41% Total spending $76. 74 $86. 28 +$9. 54 +12% Estimated gross margin $48. 62 $55. 82 +$7. 20 +15% 16

The Effects of Scents on the Perceptions of Store Env. (Table 10 -3) Evaluation Unscented Environment Mean Ratings Scented Environment Mean Ratings Difference Store Evaluation Negative/positive 4. 65 5. 24 +0. 59 Outdated/modern 3. 76 4. 72 +0. 96 Unattractive/attractive 4. 12 4. 98 +0. 86 Drab/colorful 3. 63 4. 72 +1. 09 Boring/Stimulating 3. 75 4. 40 +0. 65 Store Environment 17

The Effects of Scents on the Perceptions of Store Env. (Table 10 -3) Evaluation Unscented Environment Mean Ratings Scented Environment Mean Ratings Difference Merchandise Outdated/up- to-date style 4. 71 5. 43 +0. 72 Inadequate/adequate 3. 80 4. 65 +0. 85 Low/high quality 4. 81 5. 48 +0. 67 Low/high price 5. 20 4. 93 -0. 27 18

Aromatherapy: The Effects of Fragrance on People (Table 10 -2) Fragrance Aromath erapy Aromatherap Traditiona Potential Psychological y Class l Use Impact on People Orange Citrus Calming Lavender Soothing agent, astringent Calming and relaxing effect esp. for nervous people Herbaceo Calming, us balancing, soothing Muscle relaxant, soothing agent Relaxing and calming, helps create a homey and comfortable feel Jasmine Floral Uplifting, balancing Emollients Helps makes people feel oothing refreshed, joyful, agent comfortable Peppermint Minty Energizing, stimulating Skin cleanser Increase attention level and boosts energy 19

Common Associations and Human Responses to Colors (Table 10 -3) Color Degree of Warmth Nature Symbol Common Association and Human Responses to Color Red Warm Earth High energy and passion; can excite, stimulate, and increase arousal and blood pressures Orange Warmest Sunset Emotions, expressions, and warmth Green Cool Grass and Nurturing, healing and Trees unconditional love Blue Coolest Sky and Ocean Relaxation, serenity and loyalty 20

Selection of Environmental Design Elements p There is a multitude of research on the perception and impact of environmental stimuli on behaviour, including: People density, crowding n Lighting n Sound/noise n Scents and odours n Queues n p No standard formula to designing the perfect combination of these elements. Design from the customer’s perspective n Design with a holistic view! n 21

Tools to Guide in Servicescape Design Keen Observation of Customers’ Behavior and Responses to the service environment by management, supervisors, branch managers, and frontline staff p Feedback and Ideas from Frontline Staff and Customers using a broad array of research tools ranging from suggestion boxes to focus groups and surveys. p Field Experiments can be used to manipulate specific dimensions in an environment and the effects observed. p Blueprinting or Service Mapping - extended to include the physical evidence in the environment. p 22