Week 8 - Designing Servicescapes PDF

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International e-Services Marketing Week 8 – Designing Serviscapes

LECTURE 8 – DESIGNING SERVICESCAPES

PART I - SERVICESCAPE: PURPOSE & IMPACT Servicescape ‘A framework, developed by Mary Jo Bitner in 1994, which demonstrates the relationship between the physical ambience and place and its impact on service delivery and perception, both for customers and for staff.’ The physical service environment plays a key role in shaping customer experiences and enhancing (or undermining) customer satisfaction, especially in high-contact people-processing services. Indeed, one of the most important elements of the service marketing mix and overall value proposition of a service offering is physical evidence. Just think of organizations such as hospitals, hotels, restaurants, and offices of professional service firms in which the physical service environments crucially shapes customer experiences. Designing the service environment (servicescapes) can be time-consuming, effortful and expensive to implement and once designed and built it is not easy to change. Nevertheless, it is worth the investment, for the reasons we will discover in this lesson.

Example of a physical servicescape: Starbucks’ roasteries Starbucks’ roasteries are a good example of carefully-designed servicescapes. Situated in just a handful of cities around the world, they aim to: 

create unique customer experiences (in order to become the ‘third place’ after home and work)

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enhance the brand’s image, leading to ‘spill-over’ into ‘normal’ stores

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test new design concepts and menu items.

A real-life Willy Wonka experience with coffee as the heart and soul. -

Liz Muller, Starbucks’ chief design officer, describing the Seattle roastery

Sales figures indicate that opening the roasteries has been a successful strategy for Starbucks. In 2016, roasteries customers spent four times as much as customers in regular Starbucks stores. The following video discusses the Tokyo roastery, which was the largest Starbucks in the world when it opened in 2019. As you watch, try to identify specific features of the servicescape which might contribute to increased sales.

Example of a virtual servicescape: #arthack #digitalbodies Servicescapes can be virtual environments as well as physical ones. The following video clip presents the digital artwork ‘Baisser at Mary Boone in Waxish and Glassish’. The piece, created by the digital artist Marjan Moghaddam, attracted millions of views online. Watch the video and reflect on how the artist has designed the servicescape in this context.

International e-Services Marketing Week 8 – Designing Serviscapes Now that we have defined the servicescape and looked at both a physical and virtual example, we will now consider the purposes of the servicescape. Take a moment to predict some of these purposes before moving on to the next page.

Purposes of the servicescape Shaping customer experiences and behaviour 

A message-creating medium: Symbolic cues communicate the distinctive nature and quality of the experience.

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An attention-creating medium: The service stands out from the competition and attracts customers from target segments.

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An effect-creating medium: Colours, textures, sounds and spatial design enhance the desired service experience.

1. Supporting image, positioning and differentiation The service environment serves as a quality proxy and portrays the desired brand image: ‘What sets you apart is how you package it.’ (Hamid Hashemi, CEO of Muvico.) Just picture the reception area of successful professional service firms such as investment banks or management consulting firms, where the decor and furnishings tend to be elegant and are designed to impress.

2. Forming part of the value proposition The physical surroundings help to shape appropriate feelings and reactions in customers and employees. Therefore, this forms a core part of the value proposition. For example, the Disneyland servicescape engineers its visitors’ experience of fun and excitement through buildings, layout and employees.

3. Facilitating service encounters and enhancing productivity Service environments are often designed to facilitate the service encounter and to increase productivity. The layout of the servicescape can be optimised to enable quick self-service (eg through the location of order machines, tray-return stands, etc). This can prompt impulse behaviour or help staff adhere to service scripts.

Reflective Activity: A hospital servicescape Consider the following question: how could the servicescape of a hospital be designed in order to: 

reduce the risk of infection

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improve patient wellbeing and recovery

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reduce staff stress

International e-Services Marketing Week 8 – Designing Serviscapes 

increase productivity?

The following table may help you to organise your thoughts.

Understanding customer responses to servicescapes How do people respond to environments?

The Mehrabian-Russell stimulus-reponse model Examining how the customer responds to the service environment is extremely important. This can be achieved through the Mehrabian-Russell stimulus-response model.

This is a simple yet fundamental model:

International e-Services Marketing Week 8 – Designing Serviscapes 

Drivers of affect: environmental stimuli/cognitive processes - The environment, its conscious and unconscious perceptions and interpretation influence how people feel in that environment.

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Affective response: pleasure/arousal - Feelings (rather than perceptions/thoughts) are the key drivers of a customer’s response to an environment.

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Response behaviour: approach/avoid - The typical outcome variable is ‘approach’ or ‘avoidance’ of an environment, but other possible outcomes can be added to the model.

Let’s look at these in further detail.

Drivers of affect Affective responses are caused by sensing, perceptions, and cognitive processes of any degree of complexity. However, the more complex a cognitive process becomes, the more powerful its potential impact on affect. The large majority of service encounters are routine encounters, with little high-level cognitive processing (e.g., using a bus, entering a restaurant, etc.). In these low-cognitive processing environment, the customers functions on "autopilot" and the subconscious perception of scents or music or other environmental stimuli have a high influence on affect. However, if higher levels of cognitive processes are triggered within the service environment (e.g., through something surprising or unexpected), the interpretation of this process determines people’s feelings and this cannot be compensated by a simple cognitive process such as the subconscious perception of pleasant background music.

Pleasure versus arousal Understanding emotional responses to service environments can be described along two main dimensions: pleasure and arousal. Service firms can set targets for affective states. 1. Pleasure refers to how much an individual likes or dislikes the environment. 2. Arousal refers to how stimulated an individual feels in the environment. Pleasure is a direct, subjective response to an environment, whereas arousal depends largely on the (objective) information rate or load of an environment. Arousing environments tend to be complex, include motion or change, or have novel and surprising elements. A relaxing environment with a low information rate has the opposite characteristics.

Behavioural consequences of affect Pleasant environments result in "approach" behaviours, whereas unpleasant ones result in "avoidance" behaviours. Whether customers approach or avoid an environment will affect the time and money spent in that environment. Arousal amplifies the basic effect of pleasure on behaviour. If the environment is pleasant, increasing arousal can generate excitement, leading to a stronger positive consumer response.

International e-Services Marketing Week 8 – Designing Serviscapes However, if the environment is unpleasant, increasing the arousal level will move customers into the ‘distressed’ region. For example, loud and fast-paced music would increase the stress levels of shoppers trying to make their way through crowded aisles on a pre-Christmas Friday evening. The following graphic illustrates this.

PART II - SERVICESCAPE DIMENSIONS Servicescape dimensions So far, we have seen that the servicescape can be used by companies to achieve a variety of objectives, and that the potential impact is high. But, how are these objectives fulfilled? To answer this question, we need to consider the different dimensions of the servicescape. 1.AMBIENT CONDITIONS - These are characteristics of the environment which pertain to our five senses: sight, hearing, smell, taste and touch. The following pages of this lesson will focus on examples of ambient conditions. Ambient conditions are perceived both separately and holistically. They include:     

lighting and colour schemes size and shape perceptions sounds, such as noise and music temperatures scents.

Clever design of these conditions can elicit desired behavioural responses among consumers. Let’s look at some specific examples. MUSIC: Music can have a powerful effect on customer perceptions and behaviours, even if played at barely audible levels. Structural music characteristics – tempo, volume and harmony – are perceived holistically. Both fast-tempo music and high-volume music increase arousal levels. People tend to adjust their pace, either voluntarily or involuntarily, to match the tempo of the music.

International e-Services Marketing Week 8 – Designing Serviscapes Careful selection of music can deter certain groups of customers, as well as attract them. For example, when the Shepherd’s Bush branch of McDonalds in London started playing classical music, it found that crime levels dropped.(opens in a new tab) Several English transport stations have also tried this strategy in order to reduce anti-social behaviour, including Hull, in the North of England. SCENT: An ambient smell is one that pervades an environment. It may or may not be consciously perceived by customers and is not related to any particular product. Ambient smells can have a strong impact on the following:     

mood feelings quality evaluations purchase intentions in-store behaviours.

When scents fit well with the target audience and service context, the effect can be very powerful. Simple scents have been found to be more effective than complex scents. The table below shows some examples of scents alongside their traditional uses and possible psychological effects.

Scent marketing The following video discusses scent marketing. Before you watch it, can you think of any brands that use, or have used, scents for marketing purposes? In your opinion, how successful was this use and why? See if the brands you think of are mentioned in the video! Attention: The use of scent can also backfire as it happened for Abercrombie & Fitch. The overpowering scent used in one of their shops in Munich, for example, led to a court order to limit its use as neighbouring retailers and customers felt annoyed by its smell. Similarly, many customers report that the scent used in their shops made them feel more anxious, leading to decreased customer satisfaction scores.

COLOUR DIMENSIONS - Colour can be broken down into three dimensions:   

Hue is the pigment of the colour (ie, the name of the colour). Value is the degree of lightness or darkness of the colour. Chroma refers to hue-intensity, saturation or brilliance.

International e-Services Marketing Week 8 – Designing Serviscapes Warm colours encourage fast decision-making and are good for low-involvement decisions or impulse buys. In contrast, cool colours are preferred for high-involvement decisions. People are generally drawn to warm colour environments. Colour associations The following table presents some colours (including their degree of warmth) along with natural symbols associated with them. Some parts of the table have been intentionally left blank. For these colours, try to predict which symbols, associations and responses could fill the gaps. When you have done this, select the view answer button to view a completed version of the table.

Studies have shown that the colours red, orange, and yellow encourage fast decision making and are good for low-involvement decisions or impulse buys. In contrast, green, blue, indigo, and violet are found to be more beneficial in high-involvement decisions.

2.SPATIAL LAYOUT AND FUNCTIONALITY - Spatial layout refers to things like floorplans, and the size and shape of furnishings, counters, machinery and equipment. Functionality relates to the ability of those items to facilitate performance.

3.SIGNS, SYMBOLS AND ARTEFACTS - These are explicit or implicit signals which help customers find their way or communicate the firm’s image. They are used to teach behavioural rules (for example, by using a service script). It is important to remember that all three dimensions interact with one another.

Designing the servicescape How do we design the servicescape? The following tools and strategies are helpful in guiding servicescape design:

International e-Services Marketing Week 8 – Designing Serviscapes 1. OBSERVATION - A key tool is to keenly observe customers’ behaviour and responses. 2. FEEDBACK - Collecting feedback and ideas from frontline staff and customers provides valuable insights. 3. PHOTO AUDITS - Photo audits can be helpful. This is where mystery shoppers take photographs of the service experience. 4. FIELD EXPERIMENTS - Field experiments can be used to manipulate specific dimensions in an environment and observe the effects. 5. BLUEPRINTING - Blueprinting can be extended to include physical evidence in the environment. PART III - TRANSITION TO THE EXPERIENCESCAPE The experiencescape ‘Experiencescape’ and ‘servicescape’ are terms that are often used interchangeably. Both refer to the setting in which a service is delivered. There is no real difference between these two concepts. When we use the term experiencescape, we are talking about the physical or virtual environment within which a ‘hyper-real’ service experience is created. Just as there are many forms of experience, there are many forms of experiencescape. View some examples below.

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The retailscape: In the retailscape, the focus is on pre-purchase service experiences. Customers are given the opportunity to ‘test-drive’ or taste a service prior to purchase and consumption.

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The festivalscape - Elements such as acoustics, lighting and costumes are used to create an immersive, shared experience for festivalgoers.

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The museumscape - Features like artefacts, displays and audio-visual material aim to create a realistic, multi-sensory experience for the visitor and transport them to the time and place that is being explored.

Three value dimensions There are three key dimensions through which customers perceive the experiencescape. 

Emotional (E ᵢ): the feeling of the respondent with regard to the ’Gestalt’-experience

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Practical (P ᵢ): the physical and functional aspects of the experiencescape

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Logical (L ᵢ): rational and abstract characteristics.

International e-Services Marketing Week 8 – Designing Serviscapes Evaluate an experiencescape Choose one of the three kinds of experiencescape mentioned above (retailscape, festivalscape or museumscape) and think of a time you experienced one of these. Briefly consider the service using the three value dimensions.

Augmented reality A key aspect of the experiencescape is Augmented reality (AR). AR adds digital elements to a live view often by using the camera on a smartphone. Examples of augmented reality experiences include Snapchat lenses and the game Pokemon Go. Virtual reality (VR) implies a complete immersion experience that shuts out the physical world. In the discussion in the next step, you will be able to reflect on the concept of AR and what its impact might be on the service industry and the people who work there....