1. Managing the Firm’s Physical Evidence
Chapter 8
Managing the Firm’s Physical Evidence

2. Chapter Objectives
Appreciate the strategic role of physical evidence as it relates to the marketing of service firms.
Understand the role of the stimulus-organism-response (SOR) model in forming service evaluations.
Discuss the major components of the servicescapes model.
Describe the managerial use of sensory cues when developing tactical design strategies.
Compare design considerations for low-contact versus high-contact service firms.
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

3. Opening Vignette: Dinner in the Sky
Why are people willing to pay thousands of dollars for this dining experience?
The servicescape makes all the difference
Not only are customers given the opportunity to literally dine among the clouds while suspended at 150 feet in the air, they are given the chance to hoist their company logos over the heads of everyone down below
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

4. The Strategic Role of Physical Evidence
Physical evidence is composed of three categories
Facility exterior
Facility interior
Other tangibles
The extensive use of physical evidence varies by the type of service firm
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

5. Figure 8.1: Variations in Usage of Physical Evidence
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

6. The Strategic Role of Physical Evidence (cont’d)
All service firms used to recognize the importance of managing their physical evidence in its multifaceted role of:
Packaging the service
Facilitating the flow of the service delivery process
Socializing customers and employees alike in terms of their respective roles, behaviors, and relationships
Differentiating the firm from its competitors
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

7. Packaging Conveys customer expectations
Improves customer perceptions of service
Reduces perceived risk associated with the purchase
Reduces cognitive dissonance after the purchase
Physical
Evidence
Quality
Ques
Image
Develop-
ment
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

8. Facilitating the Service Process
Provides information
How am I to act?
Facilitates the ordering process
How does this work?
Manages consumers
Barriers separate the technical core of the business from the part of the business in which customers take part in the production process
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

9. Socializing Employees and Customers
Studies have shown that the use of uniforms:
Aids in identifying the firm’s personnel
Presents a physical symbol that embodies the group’s ideals and attributes
Implies a coherent group structure
Facilitates the perceived consistency of performance
Provides a tangible symbol of an employee’s change in status
Helps in controlling the behavior of errant employees
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

10. A Means of Differentiation
Studies have shown that well-dressed personnel are perceived as:
More intelligent
Better workers
More pleasant to engage with in interactions
Upgrading the firm’s facilities often upgrades the image of the firm in the minds of consumers, and it may also lead to attracting more desirable segments
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

11. The SOR Model
Stimulus-organism-response (SOR) model: a model developed by environmental psychologists to help explain the effects of the service environment on consumer behavior
Consists of three components:
A set of stimuli
An organism component
A set of responses of outcomes
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

12. Figure 8.2: The Three Components of the SOR Model
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

13. The SOR Model
Stimuli: the various elements of the firm’s physical evidence
Organism: the recipients of the set of stimuli in the service encounter; includes customers and employees
Responses: consumers’ reaction or behavior in response to stimuli
Responses are influenced by three emotional states:
Pleasure-displeasure
Arousal-nonarousal
Dominance-submissiveness
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

14. The Development of Servicescapes
The use of physical evidence to design service environments
Remote, self-service, and interpersonal services
High-contact versus low-contact service firms
Facility location
Facility layout
Product design
Process design
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

15. Figure 8.3: The Servicescapes Model
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16. Figure 8.4: A Continuum of Facility Use by Type of Service
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17. Stage 1: Physical Environmental Dimensions
Ambient conditions
Lighting, air quality, noise, music, odor
Space/function
Layout of the facility, equipment, the firm’s furnishings
Signs, symbols, and artifacts
Signage, personal artifacts, style of decor
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

18. Stage 2: Holistic Environment
The collective perceptions of the servicescape formed by employees and customers
Perceived servicescape
Economic customers
Personalized customers
Apathetic customers
Ethical customers
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

19. Stage 3: Internal Response Moderators
Pertain to the three basic emotional states of the SOR model
Pleasure-displeasure
Arousal-nonarousal
Dominance-submissiveness
Mediate the reaction between the perceived servicescape and customers’ and employees’ responses to the service environment
Help explain why services are characterized by heterogeneity as the service varies from provider to provider, and even from day to day with the same provider
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

20. Stage 4: Internal Responses
Cognitive responses
Beliefs, categorization, symbolic meaning
Emotional responses
Mood, attitudes
Physiological responses
Pain, comfort, ambient conditions
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

21. Stage 5: Behavioral Responses to the Environment
Individual behaviors in response to environmental stimuli are characterized as:
Approach behaviors
Shopping enjoyment
Repeat visits
Favorable impressions of the store
Money spent
Time spent shopping
Willingness to stay and explore the store
Avoidance behaviors
Environmental stimuli may be purposely managed to discourage unwelcome market segments
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

22. Managing the Senses When Creating Servicescapes
Experts suggest answering the following questions before implementing a servicescape development plan
Who is the firm’s target market?
What does the target market seek from the service experience?
What atmospheric elements can reinforce the beliefs and emotional reactions that buyers seek?
How do these same atmospheric elements affect employee satisfaction and the firm’s operations?
Does the suggested atmosphere development plan compete effectively with competitors’ atmospheres?
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

23. Sight Appeals
Sight appeals can be defined as the process of interpreting stimuli, resulting in perceived visual relationships
Sight appeals include:
Size
Shape
Color
Location
Architecture
Signage
Entrance
Lighting
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

24. Figure 8.5: Perceptions of Color
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25. Figure 8.6: Color Perceptions by Culture
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26. Sound Appeals Sound appeals have three major roles:
Mood setter
Attention grabber
Informer
Proactive methods for purposely inserting sound into the service encounter can be accomplished through the strategic use of music and announcements
Sound can also be a distraction to the consumer’s experience
Consequently, sound avoidance tactics should also be considered
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

27. Figure 8.7: The Impact of Background Music on Restaurant Patrons
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28. Scent Appeals
Stale, musty, foul odors affect everyone and are sure to creative negative impressions
Pleasurable scents often induce customers to make purchases and can affect the perception of products that do not naturally have their own scent
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

29. Touch Appeals Liberal return policies “Open houses”
Shaking hands with customers
Engaging in face-to-face communications with customers
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

30. Taste Appeals
Taste appeals are the equivalent of providing the customer with samples of the service
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.