customer satisfaction study for karaoke box services cape

Customer Satisfaction Study for Karaoke Box Servicescape


Marketing Research 1


Abstract

With the growing need for entertainment in this jet age, several new forms, modes and

establishments of entertainment are cropping up all around the globe. Music which has

been a source of entertainment since times immemorial has taken up the form of ‘sing-

along’ or karaoke box business. Karaoke is one of the most important and popular

entertainment in Hong Kong. Since it is a kind of high customer involvement service, its

facilities play an essential role in customer service encounter and satisfaction. With limited

researches done on understanding the impact of the dimensions servicescape on customer

satisfaction and with hardly any research that studies the aspects of karaoke box

servicescape and the resulting customer satisfaction, this study was the opportunity to look

into these aspects afresh. This research is first to investigate affect of the dimensions of

karaoke box servicescapes affect customer satisfaction. It also helps us to understand

relationship between the two plausible expectations from a satisfied customer that is,

desire to stay for longer duration at the service setting and repatronage intentions.

The purpose of this study is to determine the relationship among karaoke box

servicescapes and customer satisfaction along with the desire to stay for longer duration at

the service setting and repatronage intentions. In this study, Neway Karaoke Box was used

as an example because of its popularity and dominant role in the industry. A framework of

servicescape dimensions that had a possible affect on customer satisfaction was developed

which divided the servicescape into four dimensions. They were Ambient Conditions,

Spatial Layout and Functionality, Signs, Symbol and Artifacts and Cleanliness. The results

discovered that all dimensions of servicescapes have a positive effect on customer



satisfaction with Cleanliness having the greatest impact. From the study it was also found

that customer satisfaction led to increase in repatronage intentions as well as the desire to

stay for longer duration at the service setting. Finally, implications and recommendations

were discussed based on the findings in order to improve Neway Karaoke Box service

offering. Most importantly, this study is a starting point for further research on karaoke

box servicescapes.



Acknowledgement

I would like to take this opportunity to express my greatest appreciation to my supervisor,

Ms. Greenie Ha, for her valuable advices and guidance given. Her promptly reply, even

when she is in maternity leave, really contributes to the progress of my project a lot. Her

kindness and patience support me to strive for the best of my report.

A great credit should also go to Dr. Noel Siu for her advices during my supervisor

maternity leave. Her expertise in Services Marketing provides me a lot of insights for

deciding my research topic.

In addition, I appreciate whole-heartedly for the help of focus group participants and for

the support and care of my friends, especially for those who accompany with me to do

observation and teach me how to make my project better.

Lastly, I sincerely thanks for my parents love and care.



Table of Contents

Contents Page

Abstract 2

Acknowledgments 4

Table of Contents 5

1. Introduction 8

1.1

1.1.1

1.1.2

1.1.3

1.2

Rationale

Project Aim

Project Scope

Structure of Dissertation

Industry

9

11

12

12

13

1.2.1 Services Industry 13

1.2.2 The Origin of Karaoke Industry 16

1.2.3 Background of Neway Karaoke Box 19

2.

2.1

2.1.1

2.1.2

2.1.3

2.2

2.2.1

2.2.2

2.2.3

2.2.4

3.

Literature Review

Servicescapes

What are Servicescapes?

Elements of Servicescapes

Application of Servicescapes

Customer Satisfaction

Importance of Customer Satisfaction

Elements of Customer Satisfaction

Physical Environment

Direct and Indirect Influence of Servicescapes

Research Methodology

20

20

21

25

29

32

47

50

53

55

57

3.1

3.2

3.3

3.4

3.5

Research Objectives

Research Questions and Statements of Hypotheses

Sampling

Research Method

Rationale for Selection

57

58

64

65

67



4.

4.1

4.2

4.3

4.4

5.

5.1

5.2

5.3

5.4

Analysis and Findings

Factor Analyses

Regression Analyses

Derivation of Relationships and Correlations

Findings and Discussion

Conclusion and Recommendations

Conclusion

Recommendations

Limitations

Further Use of the Research

References

Appendix - Questionnaire

Table List

68

68

78

82

89

92

92

93

96

97

100

109

[Table 1]

[Table 2]

[Table 3]

The Servicescape Dimensions for a Service offering

Conceptual and Operational Definitions of Customer

Satisfaction

Factors Extracted for Servicescapes

16

33

69

[Table 4] Factors Extracted for Customer Satisfaction, Desire to Stay

for Longer Duration and Repatronage Intentions

76

[Table 5] Relationship between eight Dimensions of Servicescape and


79

[Table 6] Relationship among Eight Servicescapes Dimensions and

Repatronage Intentions

80

[Table 7] Relationship among Eight Servicescape Dimensions and

Desire to Stay for Longer Duration

81

[Table 8]

[Table 9]

Demographic and Consumption Characteristics of the

respondents

Correlation between Customer Satisfaction, Repatronage

Intentions and Desire to Stay for Longer Duration

83

88



Figure List

[Figure 1] Representation of Factors affecting Consumer Perceived

Servicescape

23

[Figure 2] Servicescape Typology (by Wakefield and Blodgett, 1994) 29

[Figure 3] The Servicescapes Evaluation Process by a Customer 31

[Figure 4] Approach to Customer Satisfaction 43

[Figure 5] Successful Product or Service Offering 49

[Figure 6] Elements of Customer Satisfaction 53

[Figure 7]

[Figure 8]

[Figure 9]

[Figure 10]

Hypothized Model

The Factor Means for Different Factors of Servicescapes

The Factor Means of Different Factors on Customer

Satisfaction, Desire to Stay for Longer Duration and

Repatronage Intentions

Gender Distribution

62

72

77

85

[Figure 11]

[Figure 12]

[Figure 13]

[Figure 14]

[Figure 15]

[Figure 16]

Age Distribution

Monthly Income Level

Patronage Frequency per Month

Time Slot Patronage

Duration of Visit during Patronage

Representation of Factors affecting Consumer Perceived

Servicescape as obtained from the Study

85

86

86

87

87

90



1. Introduction

This section is an attempt to collaborate the rationale that drives the research, the project

aim, scope, and limitations. This section introduces the structure of the dissertation, the

description of the service industry, servicescapes and the Karaoke business. In his work

reflecting the impact of servicescapes on customers and employees, Bitner coined the

phrase “Servicescape” and pointed out the importance of physical surroundings as a

facilitator of service experience and enhanced customer satisfaction (Bitner, 1992).

There have been several researches and studies done in the past which have focused on the

advantages that a service provider can have by providing a good service offering to its

customers and well executed training to its employees and staff to improve the motivation,

productivity and on job performance. There has been some focus in the area of

improvement of service encounters as well, to increase sales, profitability and customer

satisfaction. Also, the intangible aspects of a service offering have been looked into which

might have certain influence on a customer’s perceptions about a service and thereby

affect the satisfaction and dissatisfaction images of the service as well as the service

provider. However, very little emphasis has been placed on studying the impact of the

intangible aspects of a service offering along with the impact of servicescapes on a

customer’s ability to perceive and evaluate a service offering or a service setting. Kotler

(1973) noted servicescapes as one of the most significant physical apparatus of a service

product that presented customers with indications about the offering and helped to create

‘an immediate perceptual image in the mind of the customer’. During the evaluation

process of intangible products (that is, services), a customer is highly dependent on the

way a service setting or the servicescape appears, that is, a customer’s evaluation process



of a service is mostly influenced by the appearance and external impressions created by

the servicescape of the service (Levitt, 1981). A customer’s very first impression about a

service offering is dependent on the physical evidences of a servicescape that a service

provider offers and it goes a long way in creating the expectation level and thus the levels

of satisfaction and dissatisfaction. For example, in the entertainment industry like the

karaoke box service offering, there is a high degree of intangible aspects involved like the

appearance of the building architecture, interior decorations, lightings, etc. which help a

customer to evaluate and judge such an offering. Thus, servicescapes in this scenario form

not only an intricate part of a customer’s process of impression formation, but also, acts as

a vital source of substantiation in the overall appraisal of the servicescape, the service

offering and the service provider.

1.1 Rationale

With the present day life assuming endemic proportions of busy lifestyle be it from work,

study or any other aspects, it has become a constant struggle to find some time to entertain

and enjoy oneself. Leisure activities have started to play an important role in people’s lives

in today’s world. The karaoke box entertainment option seems to be becoming the highly

popular choice of relaxation among teenagers in the recent years and getting people to

spend quality time with family or friends at the karaoke box is becoming a business that

many would like to invest in. A karaoke box is an establishment with many individual

rooms for customers to enjoy singing without being bothered by others and enjoy the

much needed privacy that one would like. Part of the services is regarded as self-service

because customers need to participate in enjoying the karaoke experience such as selecting

the songs by themselves. Therefore, pleasant and easy to use facilities are being offered in

this high customer involvement service offering of karaoke box with emphasis on related



servicescapes. This study is an attempt to identify the satisfaction level of customers of

karaoke box towards the karaoke box servicescapes and the role that such a unique

servicescape can play in generating greater customer satisfaction thereby determining their

motivation for repatronage.

As Taylor et al. (1993) pointed out in their study that very little research has been

conducted in the area of leisure services and the relevant servicescapes for such services.

Researchers have spent substantial research efforts on understanding exchanges which

primarily provide utilitarian satisfaction, but have had little research going in the field of

products or services which are consumed by customers for more hedonistic purposes

(Babin et al., 1994) for extended periods of time (e.g. Arnould and Price, 1993; Price et

al., 1995). Bitner (1992) pointed out that managers continually plan, build, change, and

control and organization’s physical surroundings, however the impact of a specific design

or design change within a servicescape setup on the actual users of the facility is not

completely understood.

With a large chunk of studies focusing on human interactions such as those between

customers and providers, and customers with other customers (Gremler and Gwinner,

2000), the impact of servicescapes in service offerings is less understood and most often

ignored. Furthermore, servicescapes of karaoke box has not been used as an example of

the relationship between servicescapes and customer satisfaction in previous researches

which gives us with a completely new avenue of research. A study on karaoke box

servicescapes will help to understand the role of the various leisure facilities provided by

an organization, especially the servicescape of a karaoke box and see how these facilities

help to retain and attract customers for the organization. Also, this study will attempt to



show how servicescapes influence customer satisfaction, especially in the context of

karaoke servicescape.

1.1.1 Project Aim

The major issue with marketing services has been the focus on service quality and the

derived satisfaction from the primary service provided by the firm. Little has been done to

understand the effect and role of the physical ambiance of the service setting and its

impact on customer satisfaction. The research is aimed at gaining an understanding of the

importance of servicescapes and the role played by servicescapes in establishing

behavioral and affective customer responses to the karaoke box service.

The research aims at investigating the customer satisfaction level to different kinds of

servicescapes, such as ambient conditions, spatial layouts and functionality, signs, symbols

and artifacts, and cleanliness, in regard to a karaoke box servicescape. The customers’

subsequent ‘repatronage intentions’ and ‘intentions to stay’ will also be examined. Curial

servicescapes of the karaoke industry, which are used, seen or felt directly by the

consumers, and have high influence on customer satisfaction will be determined so that

the business using a karaoke box servicescape can focus on it and take steps to develop

such servicescapes further. How the physical evidence that forms a part of the

servicescape impacts the perceptions of the customers, builds customer satisfaction and

enhances repatronage intentions of the service will be studied for the Neway Karaoke Box.

Recommendations are provided to improve the dissatisfaction with such existing

servicescapes for future improvements and for further research to gather greater evidence

relating karaoke box servicescape to customer satisfaction and retention.



1.1.2 Project Scope

The research scope is limited within the constraints of data availability, past researches as

well as geographical, cost and time constraints. The period between which the literature is

reviewed ranges from 1955 to 2009. The geographical scope is limited to the users of

Neway karaoke box servicescape in the Causeway Bay Plaza and Mongkok Argyle Centre

which have the busiest traffic of karaoke servicescape customers; Shatin Belair Garden

and Aberdeen Centre which are located in the new territories and suburban residential

areas. The time scope has been limited to a research period of 30 weeks. The number of

customers who had been administered the questionnaire had also been limited to comply

with the constraints of budget and time.

1.1.3 Structure of Dissertation

The dissertation has been organized in a way that helps to not only highlight previous

works on servicescape and customer satisfaction but also discusses about the service

industry and the karaoke box servicescape and its origin and highlights the background of

the market leader in providing karaoke box servicescape.

The dissertation begins with the discussion around the rationale, project aim, scope and

limitations, followed by brief introduction to the various topics related to service industry,

karaoke box servicescape and the Neway Karaoke Box business. This introductory section

is then followed by the research methodology discussion, which highlights the research

objectives, questions, sample size, research methods used and a rationale for the use of

specific research methods. The third section of this dissertation focuses on literature

review to emphasize in the understandings about servicescapes, elements of servicescapes

and applications of servicescapes. It also delves into understanding customer satisfaction



from various perspectives with focus on services. This section looks at understanding the

elements of customer satisfaction, role of physical environment in creating customer

satisfaction and the direct and indirect influences of servicescapes in creating and retaining

customer satisfaction. The penultimate section of this dissertation lists the various data

analysis methods used to analyze and comprehend the data that is obtained from the

questionnaire administration to various karaoke box servicescape customers. It highlights

the findings and discusses the significance of each finding with regard to generation,

growth and retention of customer satisfaction. Finally the last section lists the conclusion

for the research, the recommendations or suggestions that can be made based on this

research, the limitations that were faced while conducting this research and the further use

of this research and scope of future related researches that will help to better understand

the role of karaoke box servicescape in customer satisfaction.

1.2 Industry

This section is an attempt to define, understand and highlight the service industry, the

origin of the Karaoke business and a concise background of the Neway Karaoke Box

business. The aim is to identify the key drivers of the business and the key elements within

the service industry that leads to customer satisfaction and may have an impact on the

‘repatronage intentions’ and ‘intentions to stay’ of the customers of the Karaoke box

servicescape.

1.2.1 Services Industry

With the growing importance of the services industry in the past few decades, it has

become as indispensable as the product industry. Today, every company is aiming to

provide not only high quality products, but also excellent services that can match these



products. Therefore, services have come to be acknowledged as critical parameter for all

businesses and the quality of services being provided by the organizations in the service

sector is gaining in importance for the academicians and marketing managers. Currently,

services have become a way to differentiate and prove a firm’s offerings to be above the

competitive clutter and most of the firms are putting in a lot of effort to enhance their

service quality that will help them to differentiate themselves from competition and create

a niche for themselves. For example, several department stores or fast food restaurants

have started to provide home delivery service along with the sale of grocery or food items

and many retail stores have been focusing on training their staff, especially the first line of

employees or customer service representatives to be polite and cordial to every customers

so that these customers will have a good experience of their patronages.

The scope of services have come a long way from being regarded as merely the tertiary

industry, and playing second fiddle to production of goods and the primary industry of

agriculture, mining, etc. The concept of servicescapes in a service industry is characterized

by the feature of the servicescapes to create a closeness of interaction between production

and consumption. The provision of services now extends beyond simply the service

industry and is typified by the high degree of information content, intangible character of

output and tremendous emphasis on the human labour involvement in delivery of services

(Sirilli and Evangelista, 1998). Earlier, the services sector was thought to be a sector with

limited potential for growth, productivity or innovation, limited dependence on

technology, and fairly underdeveloped institutional setup. With the mechanization and

mass production scenarios plaguing the production of goods and dwindling of geographic

distances, it became imperative for businesses to distinguish themselves from their

competitors around the world through use of innovative servicescapes that enhanced and



created customer satisfaction.

It is important to understand that in the present day concept of goods provider and

consumer, the services of the service sector are no different from the servicescapes that

goods providers provide to their customers to make the buying experience a highly

pleasant one. One needs to understand that the intangible nature of the services provided

through highly engaging servicescapes cannot always guarantee the value being perceived

by a customer. The investments into developing a servicescape as a buying experience

enhancer cannot determine customer satisfaction or the role of these servicescapes in

customer retention. Use of technology and constant innovations has formed a critical

aspect of service industry and the development of servicescapes. Use of servicescapes to

emphasize on differentiation and create brand recognition among customers is becoming

increasingly part of the selling process and karaoke boxes being used as a part of

servicescape is no exception to the rule.



The table below lists the servicescape dimensions for a service.

Table 1: The Servicescape Dimensions for a Service offering

Servicescape Dimensions Other Tangibles

Facility exteriors Facility Interiors

Stationary, Billing Facility,

Employee Uniforms, Web

Pages, Booking Services,

Information Brochures, etc.

Design, Signage, Parking,

Landscape, Concierge

Service, Building Aesthetic

and Architecture, etc.

Interior Design and Layout,

Equipment Quality, Signage,

Air Quality, Air

Temperature, Lighting,

Odor, etc.

1.2.2 The Origin of Karaoke Industry

The word “karaoke” come from a abbreviated compound Japanese word and can be

broken up into two parts ‘kara’ or ‘karappo’ which means empty and ‘oke’ or ‘okesutura’

meaning orchestra, that is, ‘karaoke’ would mean empty orchestra or music without words

or music without lyrics. The Japanese word “karaoke” is now listed not only in Japanese

dictionaries but also in the Oxford English Dictionary. Typically, popular music would

consist of vocals as well as accompaniment and are sold as recordings on tapes, compact

discs, etc. With the invention of karaoke, music tapes with only the accompaniment minus

the lyrics are being sold along with equipments for ‘singing along’ with the music. The

concept of karaoke as an entertainment source started at a snack bar in Kobe City in Japan.

As the legend goes, the bar owner thought out a unique idea of getting his vocalists to sing

along with recorded music when his one of his musician (guitarist, to be specific) failed to

show up for work. This trend soon caught up with customers joining in to try their vocal



chords on the music being played and this incident might have been the precursor of the

present day commercialized karaoke box business. To begin with, during the early days of

karaoke business, the entertainment aspect was only suitable for recreational facilities at

bars, clubs coffee joints, etc. since the sound proofing in most of the houses in Japan

wasn’t sufficient to ensure privacy without really disturbing the neighbors. This led to the

opportunity for many business entrepreneurs to seize the tide of popularity of the karaoke

box business and come out with the option of joints with sound proof rooms where a

customer could sing to his heart’s content without really disturbing anyone else. Thus, the

very first karaoke box was established in 1984, in a countryside rice field of Okayama

Prefecture, west of Kansai. Karaoke is a typical form of entertainment for Japanese

business people. They drop into bars with colleagues after work, and enjoy singing

popular songs. Though the initial use of karaoke developed as an entertainment asset for

business men, with the growth of technology and advancements in facilities, the ‘karaoke

box’ business have become a source of entertainment for everyone and anyone who likes

to try his or her vocal chords to pre recorded music. There are several nomenclatures for

karaoke boxes used all over Asia. In Japan and Hong Kong, a karaoke box establishment

is essentially known as “Karaoke Box” such as the Neway Karaoke Box, the Green

Karaoke Box, the Red Karaoke Box, etc. In Mainland China and Taiwan, the business

concept is known as KTV or Karaoke Televisions (due to the use of video and video-

graphic themes along with the option of singing to a recorded music). It is known as

‘Videoke’ in Philippines and ‘Noraebang’ in South Korea and more often than not simply

known as ‘K’ all over Asia. Karaoke box or rooms with karaoke facility has been

entertaining people ever since its invention 20 years ago, and has become firmly

established in Japanese society, going far beyond just a temporary room or service

provision. Karaoke boxes are generally multiple rooms with karaoke equipments that help



people to sing along with a pre recorded music track of a popular song and is generally

rented out to customers for specific periods of time. A karaoke box business would ideally

have 10 or more karaoke rooms along with a main foyer or a ‘karaoke bar’ at the front of

the establishment with the provision for paid refreshments for the customers such as

drinks, packaged snacks, tobacco assortments, etc. Karaoke was born in a night

amusement quarter at the end of the high economic growth period. Since karaoke boxes

are closed-door facilities, they also have become an object of public concern as potential

havens of misdeeds among young people. On the other hand, however, since a lot of

families enjoy singing together in karaoke boxes, the karaoke box also plays the role of a

place for family communication, get together and entertainment through singing. The

popularity of karaoke boxes have invaded all spectrums of the society to included people

from every generation, either gender, every social class or every age and income group.

The patrons of karaoke boxes can be house wives, high school or college students, female

office goers, retired family man, just about anybody. The technological innovations in the

form of laser disks, video disks, compact disks, CD graphics, etc. have made it possible

for this business to grow into a major entertainment business, not only limited to night

spots, bars or cafes but reach into the homes (with the help of ‘family-use karaoke sets’)

and into the everyday life of music lovers across the continents. In recent times, the

karaoke boom has spread all around the world and the service is enjoyed not only in Korea

and China but also in Southeast Asia, the United States of America and Europe.

Karaoke box industry became very popular since the early 1990’s in Hong Kong (Neway

Karaoke Box, n.d.a.). Many citizens in Hong Kong spend a considerable amount of time

in karaoke boxes (Chow and Lui, 2002). Singing in the Karaoke box is regarded as a

leisure activity among these citizens in Hong Kong. The main target segment of karaoke



box is teenager. However, other age groups like middle age and mid to high income level

people are also the possible target segments for the karaoke box service.

1.2.3 Background of Neway Karaoke Box

Neway Karaoke Box, which was founded in 1993, has been selected for this study due to

its position as the market leader in the karaoke box service industry. It enjoys 60 percents

of market share and operates more than 20 branches in busiest traffic areas such as

Mongkok and Causeway Bay, along with new territories and other suburban residential

areas. The mission of Neway Karaoke Box is to expand its karaoke business and bring

healthy and salubrious entertainment to the community. Therefore, Neway constantly aims

at not only making karaoke the most desired entertainment activity in Hong Kong, but also

highlights its role in developing a healthy society by organizing many activities that

benefits the community such as awards for advocating educational studies for young

people. (Neway Karaoke Box, n.d.a.)



2. Literature Review

The section of literature review attempts to understand the various dimensions of

servicescapes, its elements and applications in rendering services to the customer and

creating customer satisfaction. This section also looks at customer satisfaction especially

with regard to the services, the importance of customer satisfaction, elements of customer

satisfaction, role of physical environment in services that enhances customer satisfaction

and finally, the direct and indirect influences of servicescapes that lead to, enhance and

sustain customer satisfaction for the service of Neway Karaoke Box business.

2.1 Servicescapes

As services are produced and consumed simultaneously (Gronroos, 1984; Langeard et al.,

1981;, Paresuraman, Zeithaml and Berry, 1985), customers are “in the factory,” often

experiencing the total service within the firm’s physical facility. The factory, or the place

where the service is produced, cannot be hidden and may in fact have a strong impact on

customers’ perceptions of the service experience (Bitner, 1992). Since services are

intangible and usually cannot be tried prior to purchase, consumers commonly look for

cues about the firm’s capabilities and quality (Berry and Clark, 1986; Langeard et al.,

1981; Shostack, 1977). The physical environment of a service is rich way of providing

such cues (Rapoort, 1982) and may be very influential in communicating the firm’s image

and purpose to its customers. Thus, creating interest in the service and the firm, purchase

intention for the service and expectations for the customer that go on to enhance customer

satisfaction from a service provided by a firm or business. Booms and Bitner (1981)

defined physical evidence for a service as the environment in which a service is pull

together and its forms the space where the seller and the buyer or customer interact, along



with the combination of tangible goods that make possible the ability of the seller to

perform and provide and communicate the service to the customer or buyer. Physical

evidences for a service are in fact a combination of servicescapes and tangible products

that combined together in the right mix allows the performance of a service.

The leisure and entertainment services in particular are dependent on a business’s ability

to relate to and understand the way in which both potential and existing customers

perceive quality and value of the servicescapes provided to them before, during and after

the performance of the service. Especially for these kinds of services, the understanding of

the effects that servicescapes have on customer satisfaction and customer repatronage is

crucial to the success of the service. Investigations into the service outcomes and

interactions between different elements of servicescapes such as excitement, crowding,

involvement, noise levels, etc. help to gauge the levels of customer satisfaction associated

with services such as the karaoke box business.

2.1.1 What are Servicescapes?

Servicescapes refer to the environments in which services are delivered and where the

firm and customer interact (Bitner, 1992; Zeithaml and Bitner, 1996). Physical evidence

such as environmental design, décor, signage, and business cards/stationery send messages

that help to establish the firm’s image and influence the customer’s expectations (Baker,

1987; Booms and Bitner, 1982; Shostack, 1977). Servicescapes are more or less

consciously designed places, calculated to produce commercially significant actions and

sites for commercial exchanges. Research suggested that the variations in physical

environment can affect perceptions of an experience independently of the actual outcome

(Biggers and Pryor, 1982; Maslow and Mintz, 1956). It can aid or hinder the



accomplishment of both internal organizational goals and external marketing goals

(Bitner, 1992).

Servicescapes also plays a multifaceted role within the service encounter as package,

facilitator, socializer, and differentiator (Zeithaml and Bitner, 1996). As differentiator, the

servicescapes may distinguish the firm from its competitors via architectural styling to

convey the type of service it provides, or it may alter the servicescapes to reposition itself

to attract more desirable market segments (Hoffman and Bateson, 2002; Zeitharml and

Birtner, 1996). So, Bitner (1992) suggested that perceptions of the servicescapes may

simply help people to distinguish a firm by affecting how it is categorized. Based on

Bitner (1992) research, servicescapes consist of three components which are facility

exterior, facility interior and other dimensions. The factors that influence the perceived

servicescapes experience for a customer is depicted below in the form of a figure which

suggests the interactions and interplay between the various factors that affect a

servicescape experience (Tripathi & Siddiqui, 2008).



The diagram below is a schematic representation of factors affecting customer’s

perception of a servicescape.

Figure 1: Representation of Factors affecting Consumer Perceived Servicescape

The servicescapes have come to form an essential part of a service offering due to its

ability to elicit an emotional response from a customer towards the perceptional image or

impression of a service, thereby aiding in the evaluation or actual assessment of a

particular service environment and service offering. According to Schiffman (2001), a

customer’s perception of a servicescape can be seen as a function of different input source

which range from the environment to a customer’s own inclinations, expectations,

motivations, and knowledge gathered from previous experiences. The various sensations

and stimuli received from different input sources of a servicescape, then come together to

form an emotional response and perception representation of the whole service offering

and determine the customer’s behavior and experience of satisfaction, pleasure, etc.

(Schiffman and Kanuk, 1978). For example, a customer’s perception of the lobby of a

karaoke box tend to include different visual elements such as the front desk, area

Marketing Research

Consumer Perception of Servicescape

Ambient Factors (Facility interiors)

Design Factors (Facility Exteriors)

Visual Factors

Serviceable Factors

Employees and Staff

Customers

Social Interaction Factors (Other Dimensions)

TemperatureOdorNoiseMusicAir QualitySound SystemSeating

23


carpeting, entry foyer arrangement, floors, lighting, furniture, displayed artworks, posters,

logos, color of the walls, arrangement of flowers, employees and other customers, etc.

The olfactory and auditory sensory inputs such as music, noise levels, scents and odors,

etc. also contribute to the customer’s evaluation process of the karaoke box lobby and

helps him or her to form an image of the service he is about to receive. This goes a long

way in setting up the stage for determining the satisfaction levels. Moreover, a customer

would also include the sensory inputs from the exterior décor such as the exterior

architecture, neighborhood and location of the karaoke box along with the interior décor

stimulus to form the complete picture of the service.

Servicescapes play a highly significant role of moderating the association between a

customer’s preconceived notions or expectations from a service preceding his actual

experience with the servicescape and his ultimate evaluation of the service during and

after the consumption process. For example, if a person chooses to have dinner at a fine

restaurant, he will have preconceived expectations about the service in terms of the food,

the servicescape (such as decorations, seating, lighting, etc.), attendants’ service, etc. If

there is congruency or similarity between his or her preconceived notions or expectations

of the service, and his / her actual experience of the service, his or her overall impression

about the offering and the service provider will be highly positive leading to satisfaction

and most probably repatronage intentions. However, if a customer’s preconceived notions

or expectations about the service are not similar or in-congruent to his / her actual

experience of the service, his or her overall impression about the offering and the service

provider will be negative leading to dissatisfaction and probably there will not be

repatronage intentions. Thus, it is important to have a holistic focus on a customer’s

evaluation process of every aspect of a service offering along with the influence that the



interior and exterior attributes of a servicescape have on a customer’s behavior. A research

should be so designed as to analyze the influence of the exterior elements (such as

architecture) and the general course and blueprint of a servicescapes’ interior elements

(such as signs and symbols, artifacts, etc.) on a customer’s perception of a service offering

and the consequent level of satisfaction generated after actual experience of the service

offering. Thus, the interior as well as the exterior décor of the karaoke box helps a

customer to determine the style and image of the physical environment of the servicescape

and consequently influence the customer’s evaluation of the service and the resulting level

of satisfaction or dissatisfaction.

2.1.2 Elements of Servicescapes

Servicescapes are generally an amalgamation of the physical, social and contextual

elements that help to differentiate between similar services provided by one service

provider and another. Referring to the typology of service suggested by Bitner (1992),

karaoke box belongs to the category of interpersonal services with lean servicescapes.

Selected aspects of Bitner’s (1992) servicescape framework, which illustrates the

relationship and effect of servicescape on customers’ behavioral response, will be used in

this research. The combination of “facilities interiors” and “facilities exteriors” dimensions

of servicescapes are thus divided into the factors listed below:

(1) Ambient Conditions (i.e. weather, temperature, air quality, noise, music, odors that

affects the cognitive and evaluation process of a service);

(2) Spatial Layout and Functionality (i.e. the way in which equipment and furnishings are

arranged, and the ability of those items to facilitate consumers' enjoyment of the service);

and

(3) Signs, Symbols and Artifacts (i.e. signage and decor used to communicate and enhance



a certain image or mood or to direct customers to desired destinations for facilitating the

service).

In self-service setting, which is a great part of karaoke box service, the creative use of

physical design could support particular positioning and segmentation strategies and

enhance specific marketing objectives, such as customer satisfaction and attraction

(Bitner, 1990). For interpersonal services, Bitner (1986) also suggested that both

organizational and marketing objectives could potentially be targeted through careful

design of the servicescapes. Hence, servicescapes of karaoke box play a critical role in

customer’s mind and it is worthwhile to study its importance.

The various cues that form a part of the servicescapes physical evidence for a service

offering include color, space, lighting, music, non musical sounds or noise, olfactory cues

like odors or aroma, etc.

- Color is one of the most apparent visual aspects of a servicescapes’ physical

evidence. According to Eiseman (1998), in a physical setting, especially in case of

interior facilities of a servicescape, colors are one of the most visual component

that help to elicit various kinds of emotional or psychological responses from a

customer.

- Lighting is another aspect of the physical evidence in a servicescape that provides

the perception of quality and definition for a space, influencing the emotional and

psychological responses of a customer. Light also helps in the perception of color,

form, texture, etc, of an enclosure or a space where the service is being offered

(Ching, 1996).

- The perceptions of space of a service setting in the form of furnishings, artifacts,



arrangement of furniture, etc. help to communicate a sense of corral and help to

convey the invisible or visible boundaries of the setting. For example, Ching

(1996) pointed out that high ceilings can communicate a feeling of spaciousness or

openness of the space, and low ceilings can suggest or signify intimacy or

coziness.

- Olfactory cues such as smells, odors, aromas all have been found to influence a

customer’s attention and desire for purchase or spending of money (Hirsch, 1995).

Hirsch (1995) found that effective odorant enhanced the desire of the casino

patrons to gamble.

- Music is the auditory component of a servicescape which has been found to have

positive as well as negative impact on a customer’s perception about a

servicescape and service offering. Music is also known to change of give rise to

emotional responses from a customer who might determine his levels of

satisfaction or dissatisfaction with a servicescape.

- Noise and loud sounds which form a part of non musical sounds also have an

impact of a customer’s perception about a servicescape and service offering.

Service can be described as intangible, heterogeneous, inseparable and perishable. Service

quality was first conceptualized and operationalized by Parasuraman, Berry and Zeithaml

in 1985 (Parasuraman, Berry and Zeithaml, 1985, 1988 and 1994). Customer service, and

service quality, is now a focus for many corporate or marketing strategy and high levels of

service are typically seen as a means for an organization to achieve a competitive

advantage (Lewis, 1993). Booms and Bitner (1981) propose an expanded marketing mix

for services consisting of the four traditional elements (product, price, place, promotion)

and three new elements which are physical evidence (the physical surroundings and all



tangible cues), participants (all human actors in the service encounter including firm

personnel) and other customers. Literature suggests that customer satisfaction depends

directly and most immediately on the management and monitoring of individual service

encounters (Parasuraman, Zeithaml, and Berry, 1985; Shostack, 1984, 1987; Solomon et

al., 1985; Surprenant and Solomon, 1987). According to Shostack’s (1985), service

encounter was defined as an “a period of time during which a consumer directly interacts

with a service”. His definition encompasses all aspects of a service firm including its

personnel, physical facilities and other tangible elements, with which the consumer may

interact during a given period of time. The physical elements of a servicescape which have

high impact on the service quality perception of the customers as well as customer

satisfaction and repatronage are points of consideration for this study. The diagram below

is Wakefield and Blodgett’s representation of the relation between the type of service, the

time spent in the facility and the importance of servicescape (Wakefield and Blodgett,

1994).



Figure 2: Servicescape Typology (by Wakefield and Blodgett, 1994)

2.1.3 Application of Servicescapes

The applications or benefits of having a customer favoring servicescape is extremely

important to not only enrich customer experience and satisfaction from a service, but also

ensure customer repatronage and repeat intentions. Effective use of servicescapes in

services provides the following benefits:

Improves image of the service as well as the service provider in the eyes of the

customer and employees alike.

Aids in achieving the marketing goals of an organization by adding to the

marketable features of a service.

Has a positive influence on the approach behavior of the customers regarding the

service and helps to reduce the avoidance behavior of the customers.

Increases the affinity of the customer to stay, explore and affiliate with the service.

Enhances the quality and nature of employee and customer interaction, thereby

creating favorable customer response for the service.

Marketing Research

Importance of Servicescape

Type of Service Functional Services Leisure Services

Low High

Low

Low(Minutes

)

Moderate(Hours)

Extended(Days)

SchoolsHospitalsHigh

Health clinicsLaw offices

Drive-through bankDry-cleaners

ResortsAmusement parks

Sporting eventsUpscale restaurants

Miniature golfVideo game rooms

29

Time spent in Facility


Aids in forming “first impressions” about the service for the new customers.

Helps to differentiate and distinguish services provided by the service provider

from its competitors.

Effective use of servicescapes in a high involvement and self-service kind of

service like karaoke box will help to position the service and instigate repeat

purchase and help in ‘word of mouth’ marketing, thereby benefitting the service

provider manifolds.



Below is a diagrammatic representation of the servicescapes evaluation process by a

customer

Figure 3: The Servicescapes Evaluation Process by a Customer

Marketing Research

Affective Process: Emotional involvement with the servicescapes.

Elements and Attributes of Servicescape

Cognitive Process: Organization of the perception, image and expectations about the service and the service provider.

Cognitive Process: Leading to evaluation of the elements of the servicescapes.

Response Process: Behavior of acceptance and approach to a service or avoidance of a service based on evaluation of the elements of the servicescapes of a service.

Consumer’s Micro-perspective of Service dependent on: Personality traits, behaviors, lifestyle, involvement with the service, expectations, etc.

Consumer’s Macro-perspective of Service dependent on:Demographics, social and cultural aspects, individualism and collectivism, etc.

31


2.2 Customer Satisfaction

There has been several literature defining customer satisfaction in various ways,

differentiating between customer satisfaction for goods and customer satisfaction for

services. Whatever the definition, the aim of the companies or businesses to provide

customer satisfaction has always been on the cards. Customer satisfaction has been

defined by Kotler (2000) as “a person’s feeling of pleasure or disappointment resulting

from comparing a product’s perceived performance (or outcome) in relation to his or her

expectation”. Hansemark and Albinsson (2004) on the other hand defined satisfaction as

“an overall customer attitude towards a service provider, or an emotional reaction to the

difference between what customers anticipate and what they receive, regarding the

fulfillment of some need, goal or desire”. Hoyer and MacInnis (2001) related satisfaction

to the emotions of “acceptance, relief, excitement, delight and happiness”. Thus, customer

satisfaction can be defined as the degree or extent to which the expectations of a customer

are met or exceeded by a product or service. A customer is said to be satisfied when his

expectations are met or surpassed. It is one of key indicators of the health of a business

and help in measuring the success or failure of a business’s offering. With growing

competition in the market place, customer satisfaction acts as a differentiator and is

commonly incorporated goal of any business strategy or planning (Gitman and McDaniel,

2007). The customer satisfaction thus can be considered as a combination of response

(either emotional or cognitive in nature), specific focus (in terms of expectations from the

product or service, experience, etc) and timing of the response to the focus (pre purchase,

post purchase, etc.). The table below is an attempt to conceptual and operational

definitions for customer satisfaction found in various literature that focus on customer

satisfaction for either product or service offerings or both as well as the breakup of the

definitions to identify the response, focus and time phases of customer satisfaction . Some



of the definitions have been directly quoted from the literature so as to retain their effect.

Table 2: Conceptual and Operational Definitions of Customer Satisfaction

Literature

SourceDefinition Response Focus Time

Howard

and Sheth

(1969)

The buyer’s cognitive state

of being adequately or

inadequately rewarded for

the sacrifices he has

undergone during the entire

buying process.

The cognitive

state of being

and

realization of

purchase

intentions.

The offering

provider

adequately or

inadequately

rewarding the

customer for

the sacrifices

he / she

underwent

during the

entire buying

process.

The entire

buying

process.

Hunt

(1977)

“A kind of stepping away

from experience and

evaluating it…the

evaluation rendered that

the experience was at least

as good as it was supposed

to be…”

Evaluation of

the entire

buying

experience by

detaching

oneself from

the process as

a buyer, and

reengaging as

Experience

was at least as

expected, that

is fulfillment

of

expectations.

During the

consumptio

n

experience.



a simple

observer.

Oliver

(1980)

An assessment of the

inherent surprises

associated with product

acquisition and / or

consumption experience,

that is, the précis

psychological state

resulting when the

surrounding disconfirmed

expectations is integrated

with a customer’s

preceding feelings about

the consumption

experience.

Assessment of

the précis

psychological

state of

emotion or

feelings.

Surprise due

to the

coupling of

disconfirmed

expectations

and

customer’s

preceding

feelings about

the offering.

During

acquisition

and / or

consumptio

n of

product.

Westbrook

(1980)

The favorability of the

individual buyer’s

subjective assessment of

the different experiences

and results associated with

the use and consumption of

the product.

Individual

buyer’s

favorability of

the subjective

assessment of

the product.

Experiences

and results of

use and

consumption

of the

product.

During use

or

consumptio

n.

Swan,

Trawick

A cognitive judgment or

conscious evaluation that

The Cognitive

judgment or

The relative

poor or good

During and

post



and Carroll

(1981)

the product has performed

relatively well or poorly or

that the product was

suitable or unsuitable for

its purpose / intended use.

Also, the affect of feeling

towards the product is

important.

conscious

evaluation of

the offering’s

performance

along with the

affect of

feeling

towards the

product

offering.

performance

of the product

and its

suitability or

unsuitability

for the

intended use

or purpose,

directed

towards the

product.

consumptio

n.

Churchill

and

Surprenant

(1982)

“…conceptually, an

outcome of purchase and

use resulting from the

buyer’s comparison of the

rewards and costs of the

purchase relative to the

anticipated consequences,

and, operationally, similar

to the attitude that it can be

assessed as a summation of

satisfactions with various

characteristics…”

End result or

the outcome.

Evaluation of

the rewards

and costs of

the purchase

comparative

to the

expected

consequences.

During

post

purchase

and

consumptio

n phases.

Bearden

and Teel

A function customer’s

expectations about the

Comparison

between

Expectations

and beliefs

During

consumptio



(1983) beliefs of product attributes

and the consequent

disconfirmation of the

beliefs and expectations.

expectations

and

disconfirmatio

ns of those

expectations.

about the

product

attributes.

n

LaBarbera

and

Muzursky

(1983)

Post purchase assessment

of the expected product

experience and the

resulting surprise.

Post purchase

assessment.

Surprise at the

difference

between

expected and

post purchase

product

performance.

During

product

consumptio

n and post

purchase

phase.

Westbrook

and Reilly

(1983)

“…an emotional response

to the experiences provided

by and associated with

specific products or

services purchased, the

retail outlets, or even molar

patterns of behavior like

shopping and buying

behavior along with the

complete market place

experience….An emotional

response to the facets

associated with a product

An emotional

and cognitive

response.

Experiences

and

perceptions

associated

with the

product,

service, and

the related

servicescapes,

that are

compared to

one’s beliefs,

values,

During

post

purchase

phase.



or a service that can be

triggered by a cognitive

evaluation process during

which the perceptions or

beliefs about an object,

service, action, or

condition are compared to

the buyer’s values, needs,

wants or desires…”

conditions

and buyer

behavior

perceptions.

Day (1984) “… The evaluative reaction

to an ongoing consumption

process or phase… the

consumer’s reaction during

a specific consumption

experience to the

evaluation of the apparent

inconsistency between

prior expectations and the

actual perceived

performance of the product

post acquisition….”

An evaluative

response to

the

discrepancy

between

expected and

actual

experience.

The

discrepancy

between

expected

performance

and actual

perceived

performance

experience of

a product.

During the

acquisition

phase and

the

ongoing

consumptio

n event

providing

the actual

consumptio

n

experience.

Cadotte,

Woodruff

and Jenkins

(1987)

An emotional response to

the assessment of the user

experience of a purchased

product or service.

The emotional

response to a

product’s use

experience

The use

experience.

During the

consumptio

n phase.



assessment.

Westbrook

(1987)

“… The global evaluative

judgment about a product’s

usage and consumption…”

The global

evaluative

judgment.

Use and

consumption

of a purchased

product.

During the

consumptio

n phase.

Tse and

Wilton

(1988)

“… The customer’s

response to the assessment

of the perceived

inconsistency between the

pre purchase expectations

or standards or

performance of an offering

in comparison to the actual

perceived performance of

the offering post its

purchase and

consumption...’

Response to

the

assessment of

expected and

actual offering

performances

post purchase

and

consumption.

Perceived

inconsistency

between the

pre purchase

expectations

or standards

or

performance

of an offering

in comparison

to the actual

perceived

performance

of the offering

post its

purchase and

consumption.

During

consumptio

n and

during post

purchase

phase.

Oliver

(1989)

“… A function of the

preference, fairness in

dealings and

Positive or

negative

responses

Salesperson’s

ability to

deliver

During the

purchase

phase of a



disconfirmation during the

buying process…”

during the

buying

process.

fairness and

preferred

experience

during the

buying

process.

product or

service.

Westbrook

and Oliver

(1991)

“… A post purchase

evaluative judgment of a

particular choice of product

or service purchase…”

Evaluative

judgment of a

buyer’s

selection or

choice of

product or

service.

Particular

product or

service

selected for

purchase

During the

post

purchase

phase.

Fornell

(1992)

An overall post purchase

reaction and assessment to

the fulfillment of

expectations.

Overall

reaction and

assessment.

Comparison

between pre

purchase

expectations

and the

perceived post

purchase

product

performance.

During the

post

purchase

phase.

Oliver

(1992)

Assessment of satisfaction

as an emotional response to

product performance which

Summary of

the responses

to product

Product

attributes,

especially

During the

consumptio



acted as a summary of the

responses to product

attributes and coexisted

with the emotional

responses to product

consumption.

attributes and

its

coexistence

with the

emotional

responses to

product

consumption.

during

consumption.

n phase.

Mano and

Oliver

(1993)

“… An attitude similar to

the post consumption

assessment judgment that

varies along the hedonic

continuum…”

An attitude of

assessment

judgment that

varies along

the hedonic

continuum.

Product

performance.

During the

post

consumptio

n phase.

Halstead,

Hartman

and

Schmidt

(1994)

“… A transaction specific

affective response resulting

from the customer’s

assessment of a product’s

performance to a specific

pre purchase performance

expectation…”

An ‘affective

response’ to

the

differences

between

expected and

actual

performances

of a product.

Product

performance

in contrast to

a specific pre

purchase

performance

expectation.

During the

consumptio

n phase as

well as post

consumptio

n phase.

Oliver

(1997)

The judgment that a

product or service or one or

Buyer’s

judgmental

Product or

service or one

During

consumptio



more of its feature(s) is

providing or has provided a

pleasurable level of

consumption related

fulfillment, which includes

levels of under fulfillment

or level of over fulfillment.

It is a customer’s response

to the feeling of

fulfillment.

response to

fulfillment.

or more of its

feature(s).

n phase.

Kotler

(2000)

“… A person’s feeling of

pleasure or disappointment

resulting from comparing a

product’s perceived

performance (or outcome)

in relation to his or her

expectation…”

The feeling of

pleasure or

disappointme

nt by

comparing a

product’s

perceived

performance

(or outcome)

in relation the

buyer’s

expectations.

Perceived

performance

versus the

expectations

from a

product or

service.

During the

entire

buying

process as

well as

during the

post

purchase

phase.

Hoyer and

MacInnis

(2001)

“… The emotions of

acceptance, relief,

excitement, delight and

The emotions

of acceptance,

relief,

Fulfillment of

expectations.

During the

post

purchase



happiness on having the

expectations fulfilled…”

excitement,

delight and

happiness.

phase.

Hansemark

and

Albinsson

(2004)

“… An overall customer

attitude towards a service

provider, or an emotional

reaction to the difference

between what customers

anticipate and what they

receive, regarding the

fulfillment of some need,

goal or desire…”

Emotional

reaction to the

differences in

expected and

desired

outcomes and

attributes of a

product or

service.

Outcomes and

attributes of a

product or

service.

During the

entire

buying

process as

well as

during post

purchase

phase.

Thus, the facts that can be concluded from the literature on customer satisfaction are:

- The feeling of satisfaction or dissatisfaction is a form of conative or cognitive and

affective response to a product or service offering and the entire or part of the

purchase and consumption process.

- The feelings of satisfaction and its levels may vary with the phase in which a

customer is during the buying process, that is, the responses of a customer to a

product or service offering will vary before choice, after choice, during

consumption, after consumption, after extensive experience, etc.

- A customer’s response of satisfaction to a product or service offering also depends

on the assessment of offering and purchase related attributes of the product or

service as well as the offering consumption experiences.



The diagram below is a schematic representation of a business’s approach to ensuring

customer satisfaction.

Figure 4: Approach to Customer Satisfaction

While defining customer or consumer satisfaction it is also important to get a general

understanding of what ‘dissatisfaction’ might mean, since it has been found that absence

of satisfaction does not generally lead to dissatisfaction or the presence of satisfaction

does not really mean absence of dissatisfaction. Customer dissatisfaction however has

been defined by Zairi (2000) as the “bipolar of satisfaction” who studied the techniques to

conceptualize the customer dissatisfaction construct. Thus, the understanding of customer

satisfaction from various literature and studies point to the fact that customer satisfaction

is an affective response to a product or service offering by an organization which varies in

intensity and is time specific in terms of the experience during the buying process with

limited duration that is directed by the customer towards the central facet of product or

service acquisition or consumption or both. And so, dissatisfaction according to Zairi

Marketing Research


Customer Focus and Approach

Customer Review and Feedback

Customer Complaint & Grievance Handling

Customization of Product or Service

Information about Product and Service

Timeliness & Availability of Product & Services

43


(2000) will be the absence of a positive response to a product or service offering by an

organization which varies in intensity and is time specific in terms of the experience

during the buying process with limited duration that is directed by the customer towards

the central facet of product or service acquisition or consumption or both. The various

insights gained from literature regarding customer satisfaction and it’s managerial and

business implications are:

- Customers will behave positively only if they are satisfied with the process within

and/or the outcome from the service value chain.

- Service consumers cannot pre-test the service outcome before purchase.

- The service outcome cannot be repaired if it is unsatisfactory and hence every

precaution must be taken to ensure high quality of service encounter.

- Unsatisfactory service outcomes cannot be returned to service providers which is

one of the main reasons for satisfaction and dissatisfaction among customers.

- From a customer's perspective, a business organization's ability to maintain

consistent quality of service represents the firm's ability to deliver its service

promise.

- From an operational point of view, the primary objectives of service recovery are

to regain customer satisfaction with service encounters, and to identify and correct

weaknesses if any associated with the offering and the servicescapes.

- There are direct and indirect effects of customer-oriented attitudes

on customer satisfaction.

- There is a need to understand the positive moderating effect of empathy, reliability,

and expertise and their link to customer-oriented attitude and customer-oriented

behavior.



- Employee job satisfaction is a relevant factor in service quality improvement.

Employees who feel satisfied with their jobs provide higher levels of customer

satisfaction.

- Reliability, responsiveness, empathy, assurances, and tangibles are all related to or

dependent upon the service encounter process.

- Satisfaction is a person's feelings of pleasure or disappointment resulting from

comparing a product's perceived performance (or outcome) in relation to his or her

expectations (Kotler 2000).

- Satisfaction is viewed as a function of perceived performance and expectations. It

is clear that if the performance falls short of expectations, the customer is

dissatisfied, and if the performance matches the expectations, the customer is

satisfied and if it exceeds customer expectations, the customer is highly satisfied or

delighted.

- Consumer behavioral studies show that customers who are just satisfied still find it

easy to switch when a better offer comes along. Those who are highly satisfied are

much less ready to switch.

- High satisfaction or delight creates an emotional bond with the brand, not just a

rational preference. The result is high customer loyalty.

- Since satisfaction is one of the determinants of customer switching, there is a need

to foresee and categorize the potential switching factors that affect customers.

- There is a need to examine whether there are differences between satisfaction level

of ‘stayers’ and ‘switchers’ with regard to categorized satisfaction determinants.

- As the competition increases and the market growth slows down

in the karaoke box market, the importance of customer retention and loyalty will

increase. However, it is not easy to maintain customer retention in such a



fragmented sector with variety of service offering and every business fighting for

more customers by offering them highly competitive and attractive packages.

- Firms have to design their marketing strategies wisely according to their strengths

and weaknesses. A crucial issue to be contended with and targeted at is the

"customer switching behavior", which means that customers continue to use the

service category but switch from one service provider to another (Keaveney and

Parthasarathy, 2001).

- At its most basic level, a business’s customer base can be subdivided into two

major groups: (1) customers who have switched from other service

providers-"switchers", and (2) those who have not-"stayers”.

- Since satisfaction is seen as a determinant of customer switching, the customer

satisfaction measurement helps to not only identify the satisfaction determinants

but also the potential defection causes for karaoke box customers. Then, it

becomes meaningful to investigate the differences between switchers and stayers

in terms of satisfaction level.

- Businesses of today are trying to create a loyal customer base by focusing on

retaining current customers in order to benefit from the economics of customer

retention and loyalty. A loyal customer is supposed to not to defect but to stay loyal

to the business for a long period of time, tends to buy more, and more often than

the others. Furthermore, a loyal customer shows less sensitivity to price, pays less

attention to competing firms, talks favorably about the firm, costs less expensive to

serve than new ones and pays premium prices for obtaining better service.

- There are six types of customers who are defectors, namely; price defectors,

product defectors, service defectors, market defectors, technological defectors, and

organizational defectors.



- Reasons for switching services can be categorized as pricing, inconvenience, core

service failures, failed service encounters, response to failed service, competition,

ethical problems, and involuntary switching.

2.2.1 Importance of Customer Satisfaction

Bitner (1990) suggested that consumers reach satisfaction decisions by comparing product

or service performance with prior expectations about how the product or service would or

should perform. These expectations are compared with actual perceptions of performance

as the product or service is consumed. In cases where expectations exceed performance, it

results in dissatisfaction. When expectations are met, or when performance actually

exceeds expectations, satisfaction results. Shu, Crompton and Willson (2002) explained

that confirmation results when the actual performance matches initial expectations. When

performance exceeds or falls short of expectations, positive or negative disconfirmation

results. Positive disconfirmation leads to satisfaction or perceptions of high service

quality, while negative disconfirmation leads to dissatisfaction or perceptions of low

service quality. Research also suggested that the physical setting may also influence the

customer’s ultimate satisfaction with the service (Bitner, 1990; Harrell, and Anderson,

1980).

The importance of customer satisfaction has long been understood and related to customer

retention, customer loyalty and sustainability. Sivadass and Baker – Prewitt (2000) states

that customer satisfaction leads to greater customer retention, which in turn gives rise to

greater profitability for a business by enhancing customer loyalty. The profitability of a

business in the long run is governed by a vicious circle of value proposition – customer

perception – customer satisfaction – customer loyalty - customer retention – profitability



and finally growth of business. Sewell and Brown (2002) pointed out that satisfied

customers stay longer with a business thereby reducing switching and deepening the

relationship between the offering, customer and the business. They also studied that

satisfied customers were less sensitive to price change and competitive offerings,

recommending the Business’s offerings to others thereby assisting in brand recognition.

In his book Soderquis (2005), quoted Sam Walton, the founder of Wal-Mart, as saying “…

Exceed your customer’s expectations. If you do, they’ll come back over and over. Give

them what they want – and a little more. Let them know you appreciate them… The two

most important words I ever wrote were on the first Wal-Mart sign: “Satisfaction

Guaranteed.” They’re still up there, and they have made all the difference…”

According to Stevens (2002), customer satisfaction due to its inextricable link to

profitability cannot be disregarded because –

1. The cost of attracting a new customer is five to six times more than the cost of

retaining an existing customer.

2. Dissatisfaction for a business offering is expressed by only one out of every 25

dissatisfied customers.

3. Happy customers would spread the good word about their positive experience by

telling 4 to 5 others about the business offering.

4. Simply by making efforts to retain 5% more of the existing customers, a business

can enhance their profits by 25% to 125%.

The diagram below is the graphic representation of the aspects that result in a successful

product or service offering by a business.

Figure 5: Successful Product or Service Offering



The various researches that are being done almost every day on gathering more

understanding about customer satisfaction and the factors that influence customer

satisfaction, the fact remains that the importance of customer satisfaction can never be

underplayed in the present day economy. Thus, the in depth study of customer satisfaction

in turn provides us with the information that ranges from understanding of the needs of the

various customer segments, thereby helping businesses to design their service offerings to

better fit and address the needs of the customers and add value to the offerings and finally

develop a lasting customer relationship.

The issue of addressing customer satisfaction will remain incomplete and incoherent

unless the elements and measures that affect customer satisfaction are clearly and

coherently defined. One of the basic approaches may be to compare a service provider’s

performance to the already stated or decided / declared standards if quality, price,

timeliness since documented evidences are easily available for such comparisons. Another

Marketing Research

Successful Product or Service Offering

Type and Intensity of Customer

Response to a Product or

Service

Focus of Customer Response;

Performance Compared to Competition

Timing of Response to the

Product or Service

anytime during the Buying

Process


49


approach can also be by measuring and tracking the complaints database, improvement of

sales figures, customer audit reports, repeat purchases, etc. which would help to

understand if a service provider is really meeting the set standards for his offerings.

However, one has to note that it is inexplicably difficult to measure the levels of customer

satisfaction and provider performances for service offerings such as karaoke box services

since there are a lot of intangible customer expectations and intangible servicescape

factors associated with the offering.

2.2.2 Elements of Customer Satisfaction

There are several factors that define and drive customer satisfaction. In his book Hayes

(2008) pointed out that in a competitive marketplace such as today’s, where every

organization is competing for customers, customers share of mind and attention, customer

satisfaction as a part of the business strategy is the only way to ensure differentiation,

market share and growth. The elements that guide customer satisfaction are:

- Price of Product or Service: To begin with, the pricing of a product or service as

compared to the other similar offerings in the market play an essential role in

creating that very first impression about the offer thereby aiding in customer

satisfaction.

- Perceived Quality of Product or Service: The quality of an offering as perceived by

a customer along with the performance and pricing criteria helps a customer to

understand or calculate the value of the offering, thereby taking him/ her a step

further towards satisfaction or dissatisfaction.

- Perceived Product or Service Performance: The performance of an offering

determines the fulfillment or failing of a customer’s expectations and justifies the

price and the perceived value of the offering. This go a long way in determining



whether the customer will be satisfied with the offering or not.

- Perceived Value of Product or Service: As mentioned earlier, the value or an

offering, whether a service or a product, if in agreement with the customer’s

expectations, will result in creating a satisfied customer (Hayes, 2008).

- Availability of Product or Service: For repeat use products or services, the ability

of an organization to ensure continuous availability or supply of the product or

service creates positive perception about the value of the offering and aids in

customer satisfaction process.

- Level of Customer Support or Service: The level of customer support and service

is one of the key criteria that differentiates one offering from the other and builds

up customers opinion about the offering (Szwarc, 2005).

- Ability to Deliver the Promised Product or Service: The ability of an organization

to deliver the promised offering to the customer at the right place and right time, in

a right way, at a right price with promise of support and service in case of

compliant or query, go a long way to create customer satisfaction.

- Perceived Ability to Meet Customer Expectations: What customers think about a

business and its offering is not only important in purchase decision initiation but

also impacts the level of customer satisfaction in the post purchase phase, thereby

reducing the switching tendencies (Thompson, 2004).

- Perceptions about the Competitive Products and Services: In the present day

scenario, level and degree of customer satisfaction is dependent on the competitive

offerings available in the market. The intense the competition, the greater is the

value perception and the level of satisfaction (Thompson, 2004)



The figure below is a schematic representation of the elements that determine the level of

customer satisfaction for a particular product or service offering.

Figure 6: Elements of Customer Satisfaction



2.2.3 Physical Environment

A number of studies over the years have tried to quantify the impact of physical

environment on the behavior of a customer which influences his perception about a

service or a product. It has been found that surroundings in which a service or a product is

offered has the ability to influence a customer’s experience during the buying process,

affect his / her buying behavior, and impact his / her decision making and evaluation

process for the product or service he / she is considering.

Marketing Research

Elements of Customer

Satisfaction

Perceived Quality of Product or

Service

Availability of Product or Service

Perceived Ability to Meet Customer

Expectations

Ability to Deliver the Promised

Product or Service

Perceived Product or Service

Performance

Perceived Value of Product or Service

Perceptions about the Competitive

Products and Services

Level of Customer Support or Service

Price of Product or Service

53


According to the studies by Baker, Berry and Parasuraman (1988), Babin, Darden and

Griffin (1994), Donovan and Rossiter (1982), Bitner (1990, 1992) and Zeithaml and

Bitner (1996) the tangible cues within a physical environment where the product or

service is being offered play a vital part in influencing a customer’s attitudes and behavior

towards the entire offering and the organization. As mentioned earlier, the physical

environment facet in the form of lighting, color, music, smell, layout, etc. play an

extraordinary role in the delivery of a service. Berry and Clark (1986) had studied the

effectiveness of documentation, physical representation and association strategies adopted

by firms to positively influence a customer’s attitudinal and behavioral tendencies. They

found that the physical representation and tangible aspects of a service positively impacted

a customer’s attitudinal aspects elicited positive responses for the service.

Siew, Swee and Lynda (1997) studied the consequences of service failure, physical

environment and impact on customer’s evaluation of the service and the resulting

customer satisfaction. They found that the customers developed casual inferences from the

physical environment and tangible cues provided to them at the service setting. They also

found that the customers held the business highly responsible for a failure in service

delivery, if the failure occurred in a highly pleasant environment. They found that the level

of satisfaction varied with the perceived service quality. The higher the perception of the

service quality, the greater was the level of satisfaction and the greater was the chances of

repatronage. Thus, to create satisfaction for a service offering, it seem imperative to

provide customers with a pleasant physical environment which includes both the interiors

and exteriors facilities of the service setup, and a rating of the perceptions of the tangible

cues of the physical environment of a service setup will help to judge the satisfaction

levels and repatronage intentions of the customers.



2.2.4 Direct & Indirect Influence of Servicescapes

The influence of servicescapes in the success or failure of a business’s offering cannot be

ignored in the present day scenario, where even selling of tangible goods have come to be

associated with the service provided by the firm’s employees during the buying process.

Services have become a way of differentiating from competition and creating value. The

firms offering services including the karaoke box service have a lot to do in order to

achieve success and generate customer satisfaction. With intensification of competition at

every step, the servicescape of an offering helps a customer identify and associate with the

offering and perceive value and quality. The servicescapes help to determine the approach

and avoidance behavior of a customer thereby paving the way for customer satisfaction

and dissatisfaction. It also induces or reduces the repatronage intentions of a customer.

The positive aspects like the desires to stay, explore, affiliate, or the negative aspects like

the desire to not stay, or associate, or explore or affiliate are the influence of a

servicescape and its physical environments. As suggested by Bitner (1990), the

servicescapes have both direct and indirect influence on the satisfaction levels of a

customer and can go a long way in encouraging customers for repatronage intentions.

The view that the servicescape of a service offering is not only an indication to the

customer for an expected quality and level of service but also the fact that servicescape

acts as an influencer on the evaluation process of a customer which helps him or her to

establish the perceived service quality and the quality of the factors affecting the service.

The affect of servicescapes also extends to influence a customer’s perception about

utilitarian services such as provision for clean and hygienic rest rooms, provisions for

emergency telephony facilities, etc. especially for the services where a customer spends a



considerable amount of his or her time such as the karaoke box. It is also a good idea to

consider price paid by a customer for the service offering as against his or her perception

about the value of the offering that is quality versus price paid. The evaluation process for

an offering undertaken by a customer is a combination of his or her own characteristics

and the environment and the interaction that takes place between the two. The process of

assessment may be influenced upon by a customer’s personality, biology, socio-cultural

experience, expectations, goals, and certain internal and external factors (Walsh, et al.,

2000). Walsh (2000) also pointed out that the evaluation or assessment process may

integrate various environmental attributes and varying degree of emotional responses to

those attributes. In case of a complex service which requires understanding of a form or

the contents of a servicescape, a customer will use his or her mental framework to evaluate

and analyze the contents and / or the forms. Thus, the direct and indirect outcomes of

servicescape attributes are dependent and influenced by the perceived service quality and

physical evidences present in a servicescape.

3. Research Methodology

This section elaborates on the methodology used for the research. It talks about the



objectives that guide the research, the questions that help to address these objectives, the

discussion on the sample and the sample size being considered, the methods used for data

analysis and the rationale for selection of the sample size and method of analysis. The

basic purpose of a research is to determine what is being done rightly and what is being

done wrongly by businesses, if there are any scopes for improvement that can be

suggested to the karaoke box service providers and if there are ways to better serve

customers than the existing norms and trends. All these can be understood or studied by

going back to customers, understanding their priorities, their perceptions about the service

and the service provider and then setting up priorities for improvement. The research

methodology selected will thus help to understand the servicescape dimensions for

karaoke box service offering that affect a customer’s satisfaction level and perception

about the service and make suggestions based on findings.

3.1 Research Objectives

The following are the research objectives that the research is aimed to provide answers to:

To determine whether ambience of karaoke servicescape have a positive effect on

customer satisfaction

To determine the impact of servicescape layout on customer satisfaction.

To determine the impact of functionality on customer satisfaction.

To determine the significance of signs and symbols at the karaoke servicescape

that affects customer satisfaction.

To determine the impact of artifacts on customer satisfaction.

To determine the impact of cleanliness of the servicescape in generating positive


To determine the perceived quality of karaoke servicescape on customer



satisfaction.

To determine whether the perceived quality of the servicescapes will have a

positive effect on the length of time they desire to stay in the karaoke

servicescapes.

To determine whether the perceived quality of the servicescapes will have a

positive effect on the repatronage intentions of the karaoke box customers.

To determine whether customer satisfaction will have a positive relationship with

desire to stay in karaoke box for longer duration of time.

To determine whether customer satisfaction will have a positive relationship with

repatronage intention.

The determination of the above statements will help us to determine the factors that

affect the macro and micro aspects of servicescape of karaoke boxes. An attempt will

be made to use the factor analysis method and the multiple regression method using

the SPSS package (version 11.0) to determine the factors that affect karaoke box

servicescape thereby helping us to better understand customer satisfaction and link

repatronage intentions to enhanced customer satisfaction.

3.2 Research Questions and Statements of Hypotheses

The research questions that were designed were developed from the statements of

hypotheses that were arrived at based on the understanding gained while performing the

secondary research and the literature review.

Suggested dimensions of servicescapes from Bitner (1992) were used as the factors

affecting customer perceived quality of the servicescapes and thus the satisfaction. In this

study, only curial servicescapes are examined in order to be more focused. The details of

different dimensions are defined here. Firstly, ‘ambient conditions’ of karaoke box



including temperature, air quality, noise and lighting in the room and corridor. Secondly,

‘spatial layout’ includes the layout of the room, equipment, furnishings and seating

comfort and ‘functionality’ refers to the decorating system and songs. Lastly, ‘signs and

symbols’ refer to signs and artifacts that represent the theme of the karaoke rooms. Thus,

the statements of hypotheses that were analyzed by the questionnaire are:

- H1: Ambient conditions in a karaoke box servicescape will result in positive


- H2a: Spatial layout in a karaoke box servicescape will result in positive


- H2b: Functionality in a karaoke box servicescape will result in positive


- H3a: Signs and Symbols in a karaoke box servicescape will result in positive


- H3b: Artifacts in a karaoke box servicescape will result in positive customer

satisfaction.

After the spread of SARS, the consumers’ concern and awareness regarding the

cleanliness and hygienic conditions of a service setting were raised, especially in those

situations in which customers had to spend several hours in the leisure service setting

(Wakefield and Blodgett, 1996). Interviewees of the focus group suggested that many

consumers implicitly associated cleanliness with the quality of the servicescapes and it had

strong influence on a consumer’s perceptions of the service quality. Thus, the next

hypothesis was:

- H4: Cleanliness and hygienic conditions in a karaoke box servicescape will

result in positive customer satisfaction.



Leisure services (such as theaters, recreation or health clubs, karaoke box, and sporting

events, etc.) generally require customers to spend extended periods of time in the physical

surroundings of the service provider (Turley and Fugate, 1992). In such cases, Bitner

(1992) suggest that the facilities itself, or the perceived quality of the servicescapes, may

have a substantial effect on customer satisfaction with the service experience, which in

turn influences how long they desire to stay in the leisure service setting as well as how

much money they will spend and whether they intend to repatronize the service provider

(Cronin and Taylor, 1992; Wakefield et al. 1996) (refer to Diagram 2). Moreover, the

perceived quality of servicescapes would be formed by the three dimensions plus

Cleanliness of Servicescapes and their effect on customer satisfaction is being tested.

H5: The perceived quality of the in a karaoke box servicescape will result in positive

influence on customer satisfaction.

H6: The perceived quality of the servicescapes elements will result in a positive

effect on the duration or period of stay for customers.

H7: The perceived quality of the servicescapes elements will have a positive

influence on a customer’s repatronage intentions for the karaoke box service offering.

H8: The level of customer satisfaction will have a positive relationship to a

customer’s desire to stay for longer time duration at the karaoke box facility.

H9: The repatronage intention of a customer for the karaoke box service offering will

have a positive relationship with customer satisfaction.



The diagram below represents the inter linkages and connections between the various

hypotheses made and the factors being considered to be studied during data analyses.

Figure 7: Hypothized Model



The questionnaire thus designed aimed to find out the relationship between karaoke

servicescape and customer satisfaction. It consisted of 49 statements for affecting different

dimensions of servicescapes, customer satisfaction, ‘repatronage intention’ and ‘intention



to stay’ for longer duration. The use of 7 closed-end questions helped to find consumers’

characteristics like age, income level, gender, etc. and their consumption background for

karaoke box service offering. The respondents were requested to rate all of the statement

questions on a 7-point Likert Scale so as to clearly represent the respondents’ agreement or

disagreement levels towards the various elements of karaoke box servicescapes.

The questions for understanding the dimensions of karaoke box servicescapes were

developed on the basis of extracted dimensions from Bitner’s servicescapes framework

(Bitner, 1992). The impact of ambient conditions on a customer’s satisfaction with the

karaoke box servicescape was examined by questions from question number 5 to question

number 12; impact of spatial layout and functionality on a customer’s satisfaction with the

karaoke box servicescape was tested with questions from question number 13 to question

number 30; impact of signs, symbols and artifacts on a customer’s satisfaction with the

karaoke box servicescape was presented to the customers for rating with the help of

questions from question number 31 to question number 37; and questions from question

number 38 to question number 40 aimed at understanding customers’ opinion on

cleanliness and hygienic conditions of the karaoke box servicescapes and its consequent

effect on customer satisfaction. All of these questions were designed based on the insights

gained from the focus group interview conducted prior to designing the questionnaire

(please see appendix for the focus group interview details). The use of focus group was a

first time attempt at gaining an understanding about the dimensions of servicescape of a

karaoke box service since there was no previous research available about the servicescapes

dimensions of karaoke box service.

In order to gauge the level of respondents’ satisfaction, the 7 point Likert Scales



(Westbrook and Oliver, 1981) was used continuously throughout the questionnaire.

However, to have a better analysis of the factors of servicescape, several new questions

were added in order to increase the efficacy of the questionnaire. Questions from question

number 41 to question number 45 were used to illustrate the level of customer satisfaction

as can be obtained from the responses of the respondents; questions from question number

46 to question number 49 were used to examine the respondent’s ‘intention to stay’ for

longer duration at the karaoke box; and the respondent’s ‘repatronage intentions’ were

examined by the questions from question number 50 to question number 53.

3.3 Sampling

Non probability judgment sampling without replacement of non probability sample was

carried out to gather data to the designed questionnaire. Interviewees were selected

randomly. Since elderly and children would not visit karaoke box frequently, they were

not selected as the target respondents of this research. Teenagers and middle aged

consumers who fell into the age group of 15 years to 40 years were the target respondents.

Structured questionnaires were distributed to 207 customers to hold face-to-face

personally administrated questionnaire survey outside four Neway karaoke box branches.

They were located in Causeway Bay Plaza and Mongkok Argyle Centre which enjoys the

highest volume of karaoke servicescape customer traffic; Shatin Belair Garden and

Aberdeen Centre which are in the new territories and suburban residential areas. The

choice of these four branches helped to obtain data from people of different demographic

backgrounds (e.g. gender, ages and income level) so as to reduce sampling errors. The

respondents were interviewed right after they patronized the karaoke box which ensures

easy and fresh recall of the karaoke servicescape memories they had just experienced.



3.4 Research Method

The data collection method was a combination of both exploratory as well as descriptive

method. The exploratory research helped in developing an understanding of the current

scenario, the basic concepts of the karaoke box service offering, servicescape and

customer satisfaction, as well as the prevalent problems in servicescape dimensions and

customer satisfaction that might exist for Neway Karaoke Box. The single cross sectional

design was used for the descriptive method. Since the data collected in primary research

through administration of questionnaire was done for only one sample of respondents

drawn from the target population of Neway Karaoke Box customers who had been

customers for the business for 6 months and the fact that this survey was conducted only

once ruling out the chances of repetition.

A method of self administered questionnaire was employed for primary data collection.

The respondents were required to rate their beliefs and perceptions on a seven point Likert

Scale, with seven being the highest rating (Tull and Hawkins, 1993). The data collected

were analyzed with the help of descriptive analysis options of the SPSS software, version

11.0. This was followed by the analyses of the probable predictors of the dependent

variables using the method of factor analysis. Pearson’s correlation’s statistical technique

was also used in order to investigate and ascertain the possibility of existence of a

relationship between the factors of physical evidence in a servicescape of the Neway

Karaoke Box and customer satisfaction. This correlation technique was implemented since

the dependent variable was transformed into the interval data form in 7 scales so as to

correlate it with the associated independent variables ranked on a 7 point Likert scale. The

scoring of the Likert scales was done assuming that the data had a legitimate interval form,

in agreement with Abelson and Turkey (1970).



The program of SPSS was employed for analyzing the collected data. Demographic data

was used to show the characteristics of the respondents and categorize the customers to

match the target segments. The rating of servicescapes dimensions and customer

satisfaction level were also calculated. Factor analysis and reliability test were applied for

evaluating the validity as well as reliability of the statements incorporated in the

questionnaire to study customer satisfaction levels for various facets of servicescape like

signs and symbols, artifacts, etc. Multiple regressions were used in order to determine the

relationship between the servicescapes dimensions (considered as independent variable)

and customer satisfaction (considered as dependent variable). This also helped to achieve

further investigation into the dimensions of servicescapes that influenced customer

satisfaction the most with regard to the factors like ‘intention to stay’ and ‘repatronage

intentions’. Lastly, correlation test was run for determining the relationship between

customer satisfaction, repatronage intention and desire to stay for longer time to gather a

relationship between the three variables.

This research was conducted in two stages. Firstly, a focus group of six people, who were

customers of Neway Karaoke Box, were interviewed for generating initial insights in

order to design the questionnaire. Their responses were used to understand if the

dimensions of servicescapes considered as influencers of customer satisfaction are indeed

useful and effective for collecting proper data which matches with the objectives.

Observational research was also conducted before designing the questionnaire. Two

branches of Neway Karaoke box (Mongkok and Aberdeen) were visited and observed for

their external and internal facilities of the servicescapes.



3.5 Rationale for Selection

The reason for choosing these two branches was that they represented two different areas

which were in the busiest traffic and residential areas. This helped to reduce the

discrepancy and enhance the reliability of the research. Based on the focus group, Prat

Avenue Branch was regarded as the most impressing branch. So, it was also observed. The

main servicescapes dimensions of karaoke box were drawn out afterward during the

questionnaire. Secondly, quantitative research as well as self-administrated questionnaire

with Likert Scale questions was applied in this study as it could be easily controlled and

collection of data was comparatively easy.

4. Analyses and Findings

The section of ‘analyses and findings’ attempts to make sense out of the data collected by

administering questionnaires to the customers of Neway Karaoke Box. In this section the



factors affecting the perception of satisfaction among customers are analyzed and

understood in the context of the study. Correlation between factors and between the factors

and customer satisfaction has been attempted to be understood. The implications of the

findings are then discussed to understand the role of servicescape factors in enhancing

customer satisfaction for Neway Karaoke Box service offering.

4.1 Factor Analyses

A factor analysis is commonly used for identification of key factors for a study. In this

research, factor analyses using Varimax rotation was used to find out the factors of a

karaoke box servicescape that impacted or influenced customer satisfaction, intention to

stay for longer duration and repatronage intentions with each factor having an Eigen value

greater than unity. A factor analyses for servicescape parameter was undertaken and tested

on 36 statements. With the deletion of 9 cross loading items, 27 numbers of items were left

and these were then split into eight different factors as against the four original dimensions

of ambient conditions, spatial layout, signs, symbols and artifacts and functionality. Songs

in ‘functionality’; layout of rooms, equipments, furnishings and sitting comfort in ‘spatial

layout’; lighting and temperature, cleanliness of servicescapes; air quality and noise in

‘ambient conditions’; logos, posters, listings in ‘signs and symbols’; theme of karaoke

room in ‘artifacts’; and decorating system in ‘functionality’ were the eight factors. The use

of Kaiser-Meyer-Olkin Measure of Sampling Adequacy (0.735), Bartlett’s Test of

Spericity (2550.798) and Significance (0.000) revealed that the factor analyses method

was appropriate for analyzing the data collected. The total variance of the items was found

to be 68.788% and the overall reliability of the factors was obtained as 0.849. Since all the

factors had Eigen value greater than unity, it meant that the succeeding analysis of

multiple regressions and correlation could be conducted on the data as well.



Table 3: Factors Extracted for Servicescapes

Kaiser-Meyer-Olkin Measure of Sampling Adequacy = 0.735

Test of Spericity = 2550.798

Significance = 0.000

Overall Reliability Coefficient Alpha = 0.849

Factor 1: Functionality (Songs) Loading Mean Factor

Mean

29. Many new songs 0.896 3.19

3.15

(2nd)

28. New songs are available quickly 0.875 3.18

30. New songs are trendy 0.870 3.04

27. Varity of songs for me to choose from 0.727 3.20

Reliability Coefficient Alpha = 0.887

Eigen value = 5.976 , Variance explained = 22.135%

Factor 2: Spatial Layout (Layout of Rooms, Equipment,

Furnishings and Sitting Comfort) Loading Mean

Factor

Mean

19. Sufficient seats inside the rooms 0.764 3.70

3.99

(5th)

14. Layout of rooms is convenient to customers 0.688 4.21

13. Size of room assigned is large enough for the number of

customers 0.672 4.12

20. Size of television screen inside the rooms is appropriate 0.607 3.81

15. Table size and height inside the rooms is appropriate 0.601 4.20

18. Seats in rooms are very comfortable 0.599 3.89



Factor 3: Ambient Conditions (Lighting and Temperature) Loading Mean Factor

Mean

07. Sufficient lighting in lobby 0.776 2.94 3.13

(1st) 08. Sufficient lighting in rooms 0.725 3.09

09. Button for adjusting lighting in rooms helps to enhance the

atmosphere 0.648 2.52

05. Temperature of lobby is appropriate 0.642 3.40



06. Temperature inside the rooms is appropriate 0.597 3.70



Factor 4: Cleanliness of Servicescapes Loading Mean Factor

Mean

39. Corridor is clean and hygienic 0.802 4.00

3.81

(4th)

40. Facilities inside the rooms are clean and hygienic 0.734 4.03

38. Nuts and snacks pack individually provides me a hygienic

impression 0.643 3.40



Factor 5: Ambient Conditions (Air Quality and Noise) Loading Mean Factor

Mean

11. Rooms are always full of tobacco smell or odor 0.799 5.42 5.27

(6th) 10. Air quality is bad in rooms 0.756 5.19

12. Insufficient sound arrester among rooms 0.688 5.20



Factor 6: Signs and Symbols Loading Mean

Factor

Mean

33. Sufficient signs / route signs (e.g. Toilet signs) 0.882 3.64 3.63

(3rd) 34. Signs / route signs can be easily understood 0.871 3.61



Factor 7: Artifacts (Theme of Karaoke Room) Loading Mean

Factor

Mean

37. Layout of the karaoke rooms make me happy while singing 0.920 3.92 3.99

(5th) 36. Layout of the karaoke rooms raise my intention to sing 0.892 4.06



Factor 8: Functionality (Decorating System) Loading Mean

Factor

Mean



25. Remote control is easy to use 0.871 3.26 3.13

(1st) 24. Decorating system is user-friendly 0.831 3.01



The factor mean which was obtained by the factor analyses corresponded to the

respondents’ preferences about the servicescapes. The eight items in ascending order of

the mean score that were found were ambient conditions (lighting and temperature with

mean factor of 3.13), functionality (decorating system, again with a mean factor of 3.13),

functionality (as in songs with a mean factor of 3.15), signs and symbols (with a mean

factor of 3.63), cleanliness of servicescapes (with a mean factor of 3.81), spatial layout

(layout of rooms, equipments, furnishings and seating comfort with a mean factor of 3.99),

artifacts (theme of karaoke rooms with a mean factor of 3.99) and finally ambient

conditions (air quality and noise levels with a mean factor of 5.27).

Figure 8: The Factor Means for Different Factors of Servicescapes (Higher value

means lower ranking)



The factor 1, known as ‘songs in functionality’ as identified in the analysis, consisted of

four different items namely ‘many new songs’ (0.896), quick availability of new songs

(0.875), trendiness of new songs (0.870) and variety of songs to choose from (0.727).

Their reliability alpha was obtained as 0.887 and the explained variance for this factor was

22.135%. The factor mean for ‘songs in functionality’ was 3.15 which go to show that the

‘songs in functionality’ factor was the second most important dimension of karaoke box

servicescapes that was perceived to be satisfactory by the respondents.

The ‘spatial layout’ (layout of rooms, equipments, furnishings and seating comfort) was

the factor 2 identified during the analysis. The layout of the rooms parameter consisted of

six items namely the availability of sufficient seats inside the rooms (0.764), convenient

layout of rooms (0.688), appropriate size of room assigned (0.672) and appropriate table

size and height in the rooms assigned (0.601). The equipments parameter consisted of

factors like appropriate sized of television screen in the rooms (0.607), and comfort of the



seats in rooms (0.599). These factors helped to identify the sitting comfort within the

karaoke box rooms. The reliability alpha was found to be 0.790 with the variance

explained at 10.211%. This factor mean for the factor 2 was found to be the fifth highest

score (3.99) among all the factors which showed that the respondents had a neutral

opinion about the spatial layout of the karaoke box servicescape at Neway karaoke Box.

The factor 3 was ‘ambient conditions’ (lighting and temperature) and was represented by

five items namely sufficient lighting in lobby (0.776), sufficient lighting in rooms (0.725),

button for adjusting lighting in rooms helps to enhance the atmosphere (0.648),

appropriate temperature of lobby (0.642) and appropriate temperature inside the rooms

(0.597). The reliability alpha for this factor was found to be 0.728 and the explained

variance came out to be 8.215%. With the lowest factor mean of 3.13, this factor was

found to be the most influential in building up customer satisfaction for the respondents of

Neway Karaoke Box servicescape.

The ‘cleanliness of servicescapes’ was the factor 4 and it consisted of three items namely

cleanliness of the corridor (0.802), clean and hygienic facilities inside the rooms (0.734)

and hygienic packaging of the refreshments offered (0.643). The factor 4 obtained the

fourth lowest score of factor mean with a 3.81 and the factor reliability alpha was found to

be 0.754 and explained variance was 7.311%. These scores showed that the customers of

Neway Karaoke Box found the servicescape offerings in relatively clean and in hygienic

conditions.

The factor 5 also depicted ‘ambient conditions’ and consisted of three items namely

tobacco smell or odor in the rooms (0.799) and unpleasant air quality in rooms (0.756) and



insufficient sound arrester among rooms (0.688). The reliability alpha and explained

variance for this factor relating to noise and air quality at the Neway Karaoke Box

servicescape were found to be 0.688 and 6.752% respectively. This factor obtained the

highest factor mean of 5.27 which meant that most of the respondents were not satisfied

with the noise and odor conditions at servicescape of Neway Karaoke Box and did not

perceive these dimensions as the strong points of Neway Karaoke Box offerings.

Factor 6 referred to ‘signs and symbols’ and directed to the two dimensions namely

sufficient of route and other signs and symbols at Neway karaoke Box (0.882) and ease of

understanding of signs and symbols at Neway karaoke Box (0.871). The reliability alpha

for the factor 6 was found to be 0.863 and explained variance was found to be 5.809%.

The factor mean for this factor was obtained as 3.63. This was the third lowest score

among all the factors and signified the perception of the respondents’ and showed that this

factor of servicescape was found to be relatively satisfactory by the respondents at Neway

Karaoke Box.

The ‘artifacts’ was identified as the factor 7 and was represented by two that denoted the

theme of the karaoke rooms and were the layout of karaoke rooms make me happy while

singing (0.920) and layout of karaoke rooms increases my intention to sing (0.892). this

factor had a high factor mean of 3.99, which was the second highest among the eight

factors. This high level of factor mean showed that the respondents at Neway Karaoke

Box were not very satisfied with the theme of the karaoke rooms. The factor had a high

reliability alpha of 0.905 and the explained variance was found to be 4.207%, lower than

other factors that were found more satisfactory by the respondents.



Lastly, ‘functionality’ was termed factor 8 and represented by two items namely ease of

use of the remote control (0.871) and user friendliness of the decorating (0.831). The

reliability alpha for this factor was equal to 0.868 and the explained variance was found to

be 4.147%. The factor mean for factor 8 came out to be as low as Factor 3 and was only

3.13. This showed that the respondents were satisfied with the decorating system

functionality at Neway Karaoke Box.

The following section is an attempt to relate the dimensions of customer satisfaction,

desire to stay for longer duration and repatronage intentions of the respondents using

factor analysis. The principle component of factor analysis with varimax was applied on

13 items for servicescape of Neway Karaoke Box service offering. Five cross loading

items were deleted while eight items were kept and were divided into three factors. The

three factors were ‘customer satisfaction’, ‘repatronage intentions’ and ‘desire to stay for

longer duration’ and are shown in Table 7. The result of Kaiser-Meyer-Olkin Measure of

sampling adequacy was found to be 0.854, Bartlett’s Test of Sphericity was 851.275 and

Significance was 0.000. These results implied that the data was adequate for conducting

the intended factor analysis to understand the dimensions of customer satisfaction, desire

to stay for longer duration and repatronage intentions of the respondents and the results

were found to be significant which made the factor analysis method appropriate

techniques for analysis of the data. The total variance of the items was found out as

78.627% and the overall reliability for the factors was obtained as 0.860. Of the three

factors, two factors had Eigen value greater than 1.0, but one had a score of nearly 1.0

(desire to Stay for longer duration) and hence this factor was also considered since it was

important to the research construct and its Eigen value was not far below the standard of

1.0. The subsequent analyses of multiple regression and correlation were then conducted



on the data and the results are pointed out below along with relevant discussions and

implications for Neway Karaoke Box.

Table 4: Factors Extracted for Customer Satisfaction, Desire to Stay for Longer Duration

and Repatronage Intentions

Kaiser-Meyer-Olkin Measure of Sampling Adequacy = 0.854

Bartlett’s Test of Spericity = 851.275

Significance = 0.000

Overall Reliability Coefficient Alpha = 0.860

Factor 1: Customer Satisfaction Loading Mean Factor

Mean

42. I am satisfied with the facilities of Neway Karaoke Box 0.835 3.74

3.64

(2nd)

43. My confidence towards Neway is enhanced by its

facilities 0.825 3.53

41. I think Neway Karaoke Box facilities are excellent 0.774 3.66



Factor 2: Repatronage Intentions Loading Mean Factor

Mean

53. It is a wrong choice to patronage Neway Karaoke Box 0.835 2.91

3.00

(1st)

50. I will repatronage Neway Karaoke Box 0.792 2.93

52. I will think of Neway when I want to go to a karaoke

box 0.772 3.16


Eigen value =1.094 , Variance explained = 13.672%

Factor 3: Desire to stay for longer duration Loading Mean Factor

Mean

49. Neway Karaoke Box is the best choice for passing time 0.864 4.37 4.31

(3rd) 48. I intend to stay for longer duration in Neway Karaoke

Box 0.767 4.24





Figure 9: The Factor Means of Different Factors on Customer Satisfaction, Desire to

Stay for Longer Duration and Repatronage Intentions (Higher value means lower

ranking)

‘Customer satisfaction’ was termed as factor 1 and it was represented by three statements

namely, ‘I am satisfied with the facilities of Neway Karaoke Box’ (0.835), ‘my confidence

towards Neway Karaoke Box is enhanced by its facilities’ (0.825) and ‘I think Neway

Karaoke Box facilities are excellent’ (0.774). The overall reliability alpha for factor 1 was

obtained as 0.911 and the variance 53.015% was explained. The factor mean for ‘customer

satisfaction’ was found to be 3.64 which signified that the customer satisfaction was

ranked the second among factors by respondents’ as an indication of their perceptions

towards the servicescapes of the Neway Karaoke Box services.



Factor 2 named ‘repatronage intentions’ involved three items namely ‘it is a wrong choice

to patronage Neway Karaoke Box’ (0.835), ‘I will repatronage Neway Karaoke Box’

(0.792) and ‘I will think of Neway whenever I want to go to a karaoke box’ (0.772). The

data when analyzed gave an overall reliability alpha of 0.814 and the 13.672% of the

variance was explained. The factor 2 was ranked the highest on its factor mean of 3.00 in

comparison to the other two factors. This showed that respondents at Neway Karaoke Box

had ‘repatronage intentions’ for Neway Karaoke Box’ service offering. It also implied that

since they would repatronage Neway Karaoke Box, it showed their satisfaction with the

servicescape and the service of Neway Karaoke Box.

The third factor ‘desire to stay for longer duration’ was termed as factor 3 and it comprised

of two statements namely ‘Neway Karaoke Box is the best choice for passing time’

(0.864) and ‘I intend to stay for longer duration in Neway Karaoke Box’ (0.767). The

reliability alpha for this factor was found to be 0.648 and the explained variance was

11.940%. The factor mean of 4.31 showed that the respondents considered this factor of

‘desire to stay for longer duration’ as the least important among all the three factors which

represented customer satisfaction. Despite of the levels of satisfaction the ‘desire to stay

for longer duration’ may not be a related outcome for the respondents of Neway Karaoke

Box.

4.2 Regression Analyses

The multiple regressions analyses were used to find out the relationship among eight

servicescapes dimensions (independent variable) and customer satisfaction (dependent

variable). Their relationship with customer satisfaction, desire to stay for longer duration



and repatronage intentions were further investigated.

With the dimension of servicescapes under study being divided into different categories in

order to enable accurate investigation of the different servicescape factors that has

different levels of influence on customer satisfaction, desire to stay for longer duration and

repatronage intentions, multiple regressions method was used and the eight servicescape

dimensions identified earlier were used as independent variables.

Table 5: Relationship between eight Dimensions of Servicescape and Customer

Satisfaction

Relationship among Eight Servicescapes Dimensions and Customer Satisfaction

Dimensions B Beta Sig. T

Ambient Conditions (Lighting and Temperature) 0.212 0.188 0.001*

Ambient Conditions (Air Quality and Noise) / 0.111 0.036*

Spatial Layout (Layout of Rooms, Equipments, Furnishings and

Sitting Comfort) / 0.125 0.029*

Functionality (Songs) 0.213 0.234 0.000*

Functionality (Decorating System) / 0.109 0.050

Signs and Symbols (Signs) / 0.118 0.030*

Artifacts (Theme of Karaoke Rooms) 0.154 0.212 0.000*

Cleanliness of Servicescape 0.307 0.386 0.000*

Adjusted R Square = 0.460 *p < 0.05

The results found and tabulated in Table 5 showed that seven of the factors out of eight

identified servicescape dimensions for Neway karaoke Box are significant with Sig. T <

0.05, except for ‘functionality’ (decorating system) which had a Sig. T of 0.05 and

explained 46% of the variance in customer satisfaction and the relationship between these

factors and customer satisfaction has an adjusted R Square of 0.460. Cleanliness of



servicescape scored the highest with Beta = 0.386, among the eight dimensions that were

previously found. The factor of ‘functionality’ (Songs) with Beta = 0.234 had the second

highest score which was followed by the ‘artifacts’ (Theme of Karaoke Rooms) factor

with Beta = 0.212. These Beta scorings for the different factors helped to identify the

factor ‘cleanliness of servicescape’ as being the most related and connected to customer

satisfaction as indicated by the responses from the respondents at Neway Karaoke Box. It

was also found that the eight dimensions of servicescape were able to explain 46.5% of

variance in customer satisfaction for Neway Karaoke Box service offering.

The table 6 below is the tabulation for the results obtained after regression analysis which

shows the relationship between the identified servicescape dimensions and the repatronage

intentions of the respondents at Neway Karaoke Box.

Table 6: Relationship among Eight Servicescape Dimensions and Repatronage Intensions

Relationship among Eight Servicescape Dimensions and Repatronage Intentions


Ambient Conditions (Lighting and Temperature) 0.327 0.228 0.000*

Ambient Conditions (Air Quality and Noise) / 0.044 0.436

Spatial Layout (Layout of Rooms, Equipment, Furnishings and

Sitting Comfort) / 0.091 0.132

Functionality(Songs) 0.272 0.234 0.000*


Signs and Symbols (Signs) / 0.042 0.475

Artifacts (Theme of Karaoke Rooms) / 0.101 0.088

Cleanliness of Servicescape 0.413 0.406 0.000*


The dimensions of customer repatronage intentions were also analyzed and it was found



that the eight identified dimensions of servicescape were able to explain 38.6% of variance

in repatronage intentions of the respondents at Neway Karaoke Box. The factor of

‘cleanliness of servicescape’ highly influential on the repatronage intentions with Beta =

0.406 and this represented a strong association with the factor of repatronage intentions for

the respondents at Neway Karaoke Box.

The table 7 below represents the data obtained from the analysis the relationship between

the eight identified servicescape dimensions and the desire to stay for longer duration at

the Neway Karaoke Box facility as indicated by the respondents’ ratings.

Table 7: Relationship among Eight Servicescape Dimensions and Desire to Stay for

Longer Duration

Relationship among Eight Servicescape Dimensions and Desire to Stay for Longer Duration


Ambient Conditions (Lighting and Temperature) / 0.137 0.032*

Ambient Conditions (Air Quality and Noise) / 0.152 0.017*

Spatial Layout (Layout of Rooms, Equipment, Furnishings and

Sitting Comfort) / 0.097 0.150

Functionality(Songs) / 0.118 0.069


Signs and Symbols (Signs) 0.258 0.229 0.000*

Artifacts (Theme of Karaoke Rooms) 0.314 0.325 0.000*

Cleanliness of Servicescape / 0.115 0.101


The dimensions of customers’ intentions to stay for longer duration at Neway Karaoke

Box were analyzed and it was found that the eight identified dimensions of servicescape

were able to explain 17.9% of variance for this factor. The theme of the karaoke rooms as

a part of ‘artifacts’ and as a dimension of servicescape had the strongest association (Beta



= 0.325) with the desire to stay for longer duration. It implied that the theme karaoke

rooms attracted customers to stay for longer durations in the karaoke box.

4.3 Derivation of Relationships and Correlation

The reliability test was conducted in both of servicescapes dimensions and customer

satisfaction in order to prove their reliability for further analysis. Apart from Factor 5 in

servicescapes and Factor 3 in customer satisfaction, all of the other factors were found to

be reliable (Cronbach alpha Reliability > 0.70). So, the reliable factors were internally

consistent. For the factors with dimension lower than 0.70 in servicescapes, were also

considered. Based on the Table 5, Factor 5 was a sub-dimensions of ‘ambient conditions’

and the average reliability of both the factors of ‘ambient conditions’ namely Factor 3 and

Factor 5 were larger than 0.70 (alpha = 0.708). The other factor which had low reliability

in customer satisfaction was also kept in the research since the deletion of this factor

would lead to significant decline in the variance and thus, affect the construct.

The demographic and consumption characteristics for the respondents surveyed were

studied to get a general understanding of the pattern and segmentation scenario for Neway

Karaoke Box. Table 8 below clearly shows the demographic characteristics and

consumption background of the respondents surveyed at Neway Karaoke Box.

Table 8: Demographic and Consumption Characteristics of the Respondents

Demographic Characteristics

Item Data Percentage %



GenderMale 31.4

Female 68.6

Age (in

years)

15-20 42.5

21-25 48.3

26-30 5.8

31-35 1.9

36-40 1.4

Monthly

Income

(in HKD)

$2,000 or below 65.2

$2,001-6,000 20.3

$6,001-10,000 2.4

$10,001-14,000 0

$14,001-18,000 6.3

$18,001-22,000 1

More than $22,000 4.8

Consumption Characteristics

Item Data Percentage %

Patronage

Frequency

per month

Less than 1 time 40.1

1-2 times 39.6

3-4 times 11.1

More than 4 times 9.2

Time Slot

for Visit

Lunch 54.6

Happy hour 19.8

Dinner hour 19.8



Mid-night 5.8

Duration of

Stay during

Every

Patronage

Less than 1 hr 0

1-2 hr 9.2

2-3 hr 42.5

3-4 hr 38.2

More than 4hrs 10.1

Among 207 total respondents 68.6% were female and 31.4% were male respondents.

People belonging to the age group of 15 to 20 years and 21 to 25 years, which were 42.5%

and 48.3% respectively, dominated a large percentage of the respondents sample

population. A majority of the respondents (65.2%) who visited Neway Karaoke Box had a

monthly income of $2,000 HKD or less and around 20.3% of the total had a monthly

income that ranged from $2,001 to $6,000 HKD. Only 14.5% of all the respondents earned

more than $6,000 HKD per month. This showed that the price of services offered at

Neway Karaoke Box wasn’t too expensive and it attracted customers from a broad range

of income groups.

Figure 10: Gender Distribution



Figure 11: Age Distribution

Figure 12: Monthly Income Level



Figure 13: Patronage Frequency per Month

Figure 14: Time Slot Patronage



Figure 15: Duration of Visit during Patronage

It was also found that most of the respondents (about 40.1%) patronized Neway Karaoke

Box less than once per month closely followed by a similar percentage (39.6 %) of all the

respondents who visited Neway Karaoke Box at least one to two times a month. This

showed that though Neway Karaoke Box pricing might be affordable, its service offerings

still might not be as popular as other entertainment services. About half of the total



respondents (54.6%) visited Neway Karaoke Box during their lunch break which ranged

from 10:00 am to 02:00 pm showing that this was the time which could be focused upon

by the business managers to provide the best level of service. Both happy hour and dinner

time slots were equally visited by 19.8% of the total respondents. It was found that only a

small percentage of respondents (5.8%) went to karaoke box at mid-night. This can be

interpreted that the karaoke box service need not be open at all the hours and the hours of

maximum visit should be focused upon for providing services that enhances customer

satisfaction. It was found that most of the respondents (42.5%) stayed in the karaoke box

for duration of two to three hours during a visit while 38.2% of the respondents stayed

there for about three to four hours during every visit and 10.1% of them stayed even

longer than four hours during their visits to the Neway Karaoke Box. The data indicated

that the respondents stayed in the karaoke box for at least an hour and since their duration

of stay was longer, the need for improving satisfaction through effective use of

servicescape dimension was essential (with reference to Figure 2 of Servicescape

Typology by Wakefield and Blodgett, 1994).

Table 9: Correlation between Customer Satisfaction, Repatronage Intentions and Desire to

Stay for Longer Duration

Correlation ItemsPearson

CorrelationSig.

Customer Satisfaction and Repatronage Intentions 0.555 0.000*

Customer Satisfaction and Desire to Stay for Longer

Duration0.439 0.000*

*Correlation is significant at the 0.01 level

A correlation was also found between the three factors that led to or indicated customer

satisfaction and intentions and the results are tabulated in table 9 above. According to



Table 9, there is positive relationship between ‘customer satisfaction’ and ‘repatronage

intentions’ as found from respondents’ ratings with a Pearson Correlation value of 0.555.

The ‘desire to stay for longer duration’ and ‘customer satisfaction’ as derived from the

responses to the questionnaire showed a positive relationship between the two with

Pearson Correlation of 0.439. Both the relationships were found to be significant with Sig.

< 0.01.

4.4 Findings and Discussion

The results as obtained from the analyses of the respondents data matches to a large extent

with various previous research on customer satisfaction which and go on to suggest that

customer satisfaction is indeed influenced by how long a customer desires to stay in the

leisure service setting as well as his or her intention to repatronize the same service

(Bitner, 1992; Cronin and Taylor, 1992; Wakefield et al. 1996). So the hypotheses

supported by this research upheld the findings of the previous researches.

Thus, the factors affecting servicescape as obtained from the study can be represented in

the form of the revision of figure 1, and is presented below.

Figure 16: Representation of Factors affecting Consumer Perceived Servicescape as



obtained from the Study

The variables as studied by the study under ‘ambient factors’ and ‘design factors’ are

being called independent variables here, since, these variables ultimately lead to customer

satisfaction. They help in building up and enhancing customer satisfaction, desire to stay

for longer duration and repatronage intentions of the customer which have thus been

Marketing Research

Consumer Perception of Servicescape

Ambient Factors (Facility interiors)

(Independent Variables)

Design Factors (Facility Exteriors) (Independent

Variables)

Visual Factors like signs and symbols, artifacts, etc.

Serviceable Factors like cleanliness of rooms, packaging of snacks, etc.

Customers

Social Interaction Factors (Other Dimensions)

TemperatureOdorNoiseMusic / NoiseAir QualitySound SystemSeating EquipmentsColor

Employees and Staff

Intentions to Stay for Longer Duration

(Dependent Variable)

Repatronage Intentions(Dependent Variable)

Customer Satisfaction(Dependent Variable)

90


called the dependent variable, dependent on the independent variables of ‘ambient factors’

and ‘design factors’. Since the ultimate goal for a service offering is to achieve customer

satisfaction, desire to stay for longer duration and repatronage intentions of the customer

(thus, termed as the dependent variables). These variables can only be achieved by playing

with or tinkering with the independent variables as identified for the study. The two

dependent variables ‘desire to stay for longer duration’ and ‘repatronage intentions’ are

dependent on the dependent variables along with their dependence on customer

satisfaction, and hence their dependency to customer satisfaction has also been shown.

5. Conclusion and Recommendations



This section brings us to the conclusive comments about the research and puts forth the

recommendations, limitations and further use of this research.

5.1 Conclusion

The dimensions of servicescape as designed and evaluated by the study were very useful

in understanding customer satisfaction for the karaoke box service offering especially for

Neway Karaoke Box. Among the various dimensions of servicescapes, cleanliness of

servicescapes was significantly prominent and high on customer’s wish list and his / her

perception of servicescape and consequently influenced customer satisfaction. It also

showed that the customers did not hold the cleanliness and hygienic factors of Neway

Karaoke Box in high esteem. In order to change this perception and make use of the

impact of cleanliness dimension of servicescape on customer satisfaction, every attempt

should be made to keep the karaoke box service setting clean and hygienic in appearance.

It will be worthwhile to channel more resources for keeping the servicescape setting clean

as it would have a great effect on customer satisfaction, and repatronage intentions.

Thus, it can also be stated that the best way to an enjoyable servicescape image in a

customer’s mind is by understanding the overall evaluation process undertaken by a

customer in his mind to create images and impressions about the various aspects of a

servicescape. This makes it imperative for future researchers to involve in in-depth

analysis and study of dimensions of servicescapes and their impact of a customer’s

perceptions about a service offering and consequently the level of satisfaction created

from such perceptions. This study thus helped to get an insight into servicescapes as an

independent variable in a service offering that help to define a service to a customer, help

him or her to form an image of the offering, have expectations from the offering and



finally have those fulfilled and thereby feel satisfied. The managerial significance of these

finding also will have to be taken into consideration which will go a long way in

improving the service offerings and thus reducing the changes of service encounter

failures.

5.2 Recommendations

The dimensions of servicescapes as obtained from literature review were too general to be

effectively investigated. After using factor analysis, these dimensions could be broken

down into eight dimensions and each dimension represented one or few important

parameters of servicescape for Neway Karaoke Box. It was found that the customers are

dissatisfied with the air quality in Neway Karaoke Box and they also thought that the

rooms were very noisy as the sound arresters installed between the rooms were not good

enough to lower the levels of noise originating from different rooms. By referring to the

demographic data, it was found that most of the customers stayed in the karaoke box

rooms for at least around two to three hours and thus, a bad air quality or in sufficient air

circulation which might lead to stagnant air and odors in the rooms might be a reason for

lowering satisfaction level or causing dissatisfaction for the customers. It would make a

lot of sense if Neway Karaoke Box management put in some efforts to improve this

situation by the following suggested methods:

(1) Installing air purifier in rooms for enduring adequate ventilation in the rooms instead

of just installing air freshener;

(2) Cleaning up of the rooms immediately after customers have left them;

(3) Separation of smoking and non-smoking rooms to do away with the tobacco smell and

cater to customers who are non smokers;

Neway Karaoke Box should extend the number of themes of karaoke rooms in other



branches as well. Variety of themes in the karaoke rooms can be adopted as per the

suggestion of an interviewee during the focus group interview (refer to appendix Focus

Group Script). If the customers have memorable impression about the service, they will

always think of Neway Karaoke Box, whenever they think about visiting any karaoke box

in specific or entertainment options in general.

The respondents also regarded cleanliness of servicescape premises very highly and their

perceptions were dependent on the hygienic impression of the servicescape setup. The

refreshments available in the karaoke rooms with individual packing provided them with

that hygienic impression. It shows that the efforts put in by Neway Karaoke Box after

SARS outbreak to provide a clean and hygienic service to its customers was a success in

improving customer perception as well as influencing customer satisfaction. This factor

can play an essential role in enhancing the intentions to stay for longer duration and

repatronage intentions. Thus, Neway should keep up the good work and maintain the

hygienic environment in every branch.

It was found that the respondents were satisfied with the signs and symbols at Neway

Karaoke Box. They moderately agreed that the signs in Neway Karaoke Box were

sufficient, clear and easy to understand. Neway should make attempts to some improve the

signs and symbols so that customers would be strongly satisfied with these.

The respondents also found the collection of music for popular songs as a parameter in

functionality to be as per their expectations and they were satisfied with the songs which

Neway Karaoke Box had to offer. They perceived that the songs provided by Neway

Karaoke Box were quite trendy. Even though customers were satisfied with this factor, it



was not ranked highest among all the factors. Thus, Neway should try to acquire the newer

songs and broaden their range of song choices which will help Neway Karaoke Box to

maintain its dominant position among its competitors in the industry.

The most highly rated factors by the respondents at Neway Karaoke Box were the

decorating system parameter in functionality and the lighting and temperature parameters

in ambient conditions which showed that these factors were responsible for influencing

customer satisfaction. Consequently, Neway should keep up all the satisfactory factors for

maintaining its service quality. These dimensions contributed to a good perceived quality

of servicescape among customer’s mind.

Neway should consider all servicescape dimensions simultaneously for being the best

Karaoke Box in Hong Kong and look to improve or implement these factors on a step by

step basis depending upon the priority and funding situation. The air quality and the issue

with noise ought to be improved at the earliest. Obviously, cleanliness was regarded as the

most crucial elements associated with customer satisfaction. So, Neway should consider

cleanliness of the servicescape setting as its first priority. In order to retain customers for

longer duration in the karaoke box, Neway can plan to redecorate its karaoke rooms based

on varied themes.

The managerial implications for the research results of this research also include an option

for the business managers of Neway karaoke Box and other karaoke box businesses to

know and understand how their customer groups are defining satisfaction. This can assist

the managers and business owners to interpret the satisfaction scales correctly to aim,

describe and respond to the levels of satisfaction required by customers. Instead of trying



to address all the aspects of a service encounter experience and dimensions of

servicescape, managers can focus on directly controllable factors that can have direct and

high impact on customers. This research can be taken as a tool to obtain ‘original’ and on

hand customer feedbacks immediately after a service encounter at the karaoke box which

will help in making relevant managerial decisions.

5.3 Limitations

There are several limitations that plague this study and this attempt cannot be called

complete. Limitation of funding, data availability from various sources, assumptions made

during the analysis of the data obtained from questionnaire, are all the sources from where

errors might have cropped up into the study results. The time duration of the project is not

sufficient to conduct an in-depth study. The data collected might not have been a true

representation of the population being studied and there are limitations of the researcher

that cannot be neglected as well. The research scope is also limited in terms geographical

confines, literature reviews as well as the analysis of the role of karaoke box servicescape.

The data should have been collected from customers of every branch of Neway Karaoke

Box in order to lessen the discrepancy, Moreover, since judgment sampling was carried

out; the research might not representative of the whole population. Regarding to the

instrument used in this research, 7-point Likert scale questions were used. Central

tendency problem was caused and the results might not be so representative and accurate.

Furthermore, the questions in the questionnaires were not based on the questionnaires of

the previous researches. The validity and reliability of the statements can be doubtful and

to address this issue factor analysis and reliability tests were conducted.

There was no previous research done on karaoke box servicescapes and customer



satisfaction. The model creation just followed the relevant researches by extracting parts

of their structure and included them in this research model. Therefore, the three

dimensions of servicescapes including ambient conditions, spatial layout and functionality

and signs, symbols and artifacts might not be the only appropriate dimensions for

measuring customer satisfaction of the karaoke box servicescape. Even if some adjustment

had been made in order to build up a tailor-made model for this research, not all the

servicescapes could include in the model. The excluded servicescapes might also play an

influential role in customer satisfaction. Therefore, further study about this topic will be

needed in order to compensate for the limitations of this study. Also, only a single service

provider (Neway Karaoke Box) was considered for the study due to limitation of

resources. In order to truly understand the factors of servicescape that affects customer

satisfaction and repatronage intentions, future studies involving larger and varied data sets

from different sources should be considered.

5.4 Further Use of the Research

There are several uses of this study which will enable generating a greater understanding

about the dimensions of servicescape and their relations to customer satisfaction than we

have today. The future uses for this study will not and should not be limited to academic

purposes only and should reach out to include the tactical and strategical aspects of

business especially in this age of economic instability, market fragmentation and fast

changing customer attention span.

This study successfully determined various servicescapes elements that are essential for

customer satisfaction of a karaoke box service offering. It proved previous construct about

the relationship between servicescapes and customer satisfaction to a large extent. Hence,



the conceptual framework will be helpful for further in-depth research. As there are still

some servicescapes that have not been evaluated, future research can be carried out to

further investigate into those dimensions of servicescape. Likewise, the association

between servicescapes and other factors such as loyalty, customer retention can also be

studied.

A servicescape is made up of various components or dimensions which when carefully put

together provide specific environmental cues to a customer regarding a service offering

and help him to form perceptions and experience satisfaction. This study can thus pave

way for creation of a kind of servicescape that will play with the cues influencing

customer perception and levels of satisfaction. With the help gained from this and similar

studies, a business owner of a service offering can help to create an image in the mind of

the customers and enhance service encounters. With knowledge about the roles that the

cues of a servicescape play on the psychology of a customer, a service provider can look

to strategize and improve upon his / her chances of remaining competitive in the market

and diversify and integrate several offerings together. For example, In case of Neway

Karaoke Box, the management can use this study and similar studies to make changes to

his servicescapes and influence customers to repatronize their business, thereby generating

sales and consequent profitability for the business. While designing new branches of

Neway Karaoke Box too, the factors discovered in this study and similar studies can be

taken into consideration and an impressive offering can be provided to the customer. This

study can also help karaoke business as well as other businesses to strategize segmented

targeting of their customer base to elicit greater response and profitability from the

existing and potential customers.

One cannot disagree that satisfaction more often than not results into profitability and thus,



the future implication for this study would also be an attempt to relate servicescape

elements to the aspects of sales and profitability, thereby making real business sense.

Another study into the understanding of loyalty in relation to satisfaction from

servicescape dimensions will help to retain customers and leverage the relationship with

loyal customers to increase market share and share of customer’s mind.

Thus, this research opens up a gamut of avenues for further researches that would include

generating a greater understanding about all the aspects of servicescape in relation to

customer satisfaction and repatronage intentions, linking customer satisfaction to customer

loyalty and finally linking loyalty to growth in revenue and profitability.

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Appendix

Survey of Neway Karaoke Box Facilities

Hello! I am a University student studying marketing. I would like to conduct a survey on

the customer satisfaction in terms of karaoke box facilities and hope that your valuable

opinions are involved. All of your valuable opinions will only be used for academic

analysis. Thank you!

1. Have you been to Neway Karaoke Box?

____ Yes ___No (If “No” please go to the end of questionnaire)

2. How many times did you visit the Neway Karaoke on an average in a month?

____Less than 1 time ____1-2 times

____3-4 times ____More than 4 times

3. Which are the time slot(s) of your visit to the Neway Karaoke Box?

____ Lunch (10:00-14:00) ____Happy Hour (14:00-18:00)

____Dinner (18:00-00:00) ____Mid-night (00:00-06:00)

4. How long do you stay in karaoke box during every visit (approximately)?

____ Less than 1 hour ____ 1-2 hours ____ 2-3 hours

____ 3-4 hours ____ More than 4 hours

Please state your opinion towards Neway Karaoke Box facilities according to your

experience. (1 represents strongly agree and 7 represents strongly disagree)

5. Temperature of lobby is appropriate 1 2 3 4 5 6 7

6. Temperature inside the rooms is appropriate 1 2 3 4 5 6 7

7. Sufficient lighting in lobby 1 2 3 4 5 6 7

8. Sufficient lighting in rooms 1 2 3 4 5 6 7

9. Button for adjusting lighting in rooms helps to enhance the

atmosphere

1 2 3 4 5 6 7

10. Ventilation in rooms is bad 1 2 3 4 5 6 7

11. Rooms are always full of tobacco smell or odor 1 2 3 4 5 6 7

12. Insufficient sound arrester among rooms 1 2 3 4 5 6 7



13. Size of room assigned is large enough for the size of the group 1 2 3 4 5 6 7

14. Layout of rooms is convenient to customers 1 2 3 4 5 6 7

15. Table size and height inside the rooms is appropriate 1 2 3 4 5 6 7

16. Leaflet standees occupy large part of the table 1 2 3 4 5 6 7

17. Food containers occupy large part of the table 1 2 3 4 5 6 7

18. Seats in rooms are very comfortable 1 2 3 4 5 6 7

19. Sufficient seats inside the rooms 1 2 3 4 5 6 7

20. Size of television screen inside the rooms is appropriate 1 2 3 4 5 6 7

21. Tone quality of microphones is good 1 2 3 4 5 6 7

22. I can control the level of microphones volume or echo easily 1 2 3 4 5 6 7

23. Microphone cables always inter-twist and block the way 1 2 3 4 5 6 7

24. The room décor is user-friendly 1 2 3 4 5 6 7

25. Remote control is user-friendly 1 2 3 4 5 6 7

26. Computer games in decorating system entertain me 1 2 3 4 5 6 7

27. Varity of songs for me to choose 1 2 3 4 5 6 7

28. New songs are available quickly 1 2 3 4 5 6 7

29. Many new songs available always 1 2 3 4 5 6 7

30. New songs are trendy 1 2 3 4 5 6 7

31 Posters posted in lobby and corridor offer me the most updated

information about new songs 1 2 3 4 5 6 7

32. Price list in lobby let me knows the fees clearly 1 2 3 4 5 6 7

33. Sufficient signs / route signs (e.g. Toilet signs) 1 2 3 4 5 6 7

34. Signs / route signs can be easily understood 1 2 3 4 5 6 7

35. Sufficient washrooms 1 2 3 4 5 6 7

36. Layout of karaoke rooms raise my intention to sing 1 2 3 4 5 6 7

37. Layout of karaoke rooms make me happy while singing 1 2 3 4 5 6 7

38. Nuts and snack packs are provided in a hygienic manner 1 2 3 4 5 6 7

39. Corridor is clean and hygienic 1 2 3 4 5 6 7

40. Facilities inside the rooms are clean and hygienic 1 2 3 4 5 6 7

Please state your satisfaction level towards Neway Karaoke Box. (1 represents strongly

agree and 7 represents strongly disagree)



41. I think Neway Karaoke Box facilities are excellent 1 2 3 4 5 6 7

42. I am satisfied with the facilities of Neway Karaoke Box 1 2 3 4 5 6 7

43. My confidence towards Neway Karaoke Box is enhanced with

every visit 1 2 3 4 5 6 7

44. My satisfaction level towards Neway Karaoke Box is largely

affected by its facilities

1 2 3 4 5 6 7

45. Neway Karaoke Box facilities disappoint me 1 2 3 4 5 6 7

46. The experience of patronage Neway Karaoke Box is exactly

what I need 1 2 3 4 5 6 7

47. I truly enjoy singing karaoke in Neway Karaoke Box 1 2 3 4 5 6 7

48. I intent to stay longer time in Neway Karaoke Box 1 2 3 4 5 6 7

49. Neway Karaoke Box is the best choice for spending time alone

or with friends / family 1 2 3 4 5 6 7

50. I will repatronage Neway karaoke Box 1 2 3 4 5 6 7

51. I will patronage Neway karaoke Box more frequently 1 2 3 4 5 6 7

52. I will think of Neway Karaoke Box when I want to go to a

karaoke box 1 2 3 4 5 6 7

53. It is a wrong choice to patronage Neway karaoke Box 1 2 3 4 5 6 7

54. What is your gender?

____Male ____Female

55. What is your age?

____15-20 years old ____21-25 years old ____26-30 years old

____31-35 years old ____36-40 years old ___Prefer not to answer

56. What is your monthly income?

____$2000 or below ____$2001-6000 ____$6001-10,000

____$10,001-$14,000 ____$14,001-$18,000 ____$18,001-$22,000

____More than $22,000 ____Prefer not to answer

Thanks for your opinion

End of Questionnaire


customer satisfaction study for karaoke box services cape

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