Planning the Service Environment Chapter 10 Planning the Service Environment

The Purpose of Service Environments The service environment influences buyer behaviour in 3 ways Message-creating Medium: symbolic cues to communicate the distinctive nature and quality of the service experience. Attention-creating Medium: to make the servicescape stand out from other competing establishments, and to attract customers from target segments. 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.

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

The Mehrabian-Russell Stimulus-Response Model (Figure 10.2) Response Behaviors: Approach/ Avoidance & Cognitive Processes Dimensions of Affect: Pleasure and Arousal Environmental Stimuli & Cognitive Processes

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

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

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

Drivers of Affect Affect can be caused by perceptions and cognitive processes of any degree of complexity. Simple Cognitive Processes, Perception of Stimuli tangible cues (of service quality) consumer satisfaction Complex Cognitive Processes 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.

Behavioral Consequence of Affect Basically, pleasant environments result in approach, and unpleasant environments result in avoidance Arousal acts as an amplifier of the basic effect of pleasure on behavior 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 Feelings during the service encounter is also an important driver of customer loyalty

An Integrated Framework – Bitner’s ServiceScape Model (Figure 10.4) Environmental Dimensions Moderators Internal Responses Behaviour Holistic Environ- ment Cognitive Emotional Psychological Ambient Conditions Space/ Function Signs, Symbols & Artefacts Approach or Avoid Employee Response Moderator Employee Responses Social Interaction Between Customers & Employees Perceived ServiceScape Customer Responses Customer Response Moderator Approach or Avoid Cognitive Emotional Psychological

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

Dimensions of the Service Environment Service environments are complex and have many design elements. The main dimensions in the servicescape model includes: Ambient Conditions Music (e.g, fast tempo and high volume increase arousal levels) Scent (strong impact on mood, affect and evaluative responses, purchase intention and in-store behavior) 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)

Dimensions of the Service Environment (con’t) Spatial Layout and Functionality 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 Explicit or implicit signals to communicate the firm’s image, help consumers find their way and to convey the rules of behavior

Impact of Music on Restaurant Diners (Table 10-2) Restaurant Patron Behavior Fast-beat Music Environment Slow-beat Music Environment   Difference between Slow and Fast-beat Environments Absolute Difference % Difference Consumer time spent at table 45min 56min +11min +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%

The Effects of Scents on the Perceptions of Store Environments (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 Store Environment Unattractive/attracti ve 4.12 4.98 +0.86 Drab/colorful 3.63 +1.09 Boring/Stimulating 3.75 4.40 +0.65  

The Effects of Scents on the Perceptions of Store Environments (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

Aromatherapy: The Effects of Fragrance on People (Table 10-4) Aromather apy Class Tradition al Use Potential Psychological Impact on People Orange Citrus Calming Soothing agent, astringen t Calming and relaxing effect esp. for nervous people Lavender Herbaceo us Calming, balancing, soothing Muscle relaxant, soothing agent Relaxing and calming, helps create a homey and comfortable feel Jasmine Floral Uplifting, balancing Emollient soothing agent Helps makes people feel refreshed, joyful, comfortable Peppermint Minty Energizing, stimulating Skin cleanser Increase attention level and boosts energy

Common Associations and Human Responses to Colors (Table 10-5) 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 Trees Nurturing, healing and unconditional love Blue Coolest Sky and Ocean Relaxation, serenity and loyalty

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

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 Feedback and Ideas from Frontline Staff and Customers using a broad array of research tools ranging from suggestion boxes to focus groups and surveys. Field Experiments can be used to manipulate specific dimensions in an environment and the effects observed. Blueprinting or Service Mapping - extended to include the physical evidence in the environment.