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Customer Satisfaction Study for Karaoke Box Services Cape

Customer Satisfaction Study for Karaoke Box Services Cape

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Published by Muntazir Haider
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.
This is a completely referenced research done by myself, and copyrights are restricted. Should anyone wish to purchase this paper, feel free to contact me @ ResearchCorner@gmail.com. Anyone claiming to be the author shall be liable to legal action.
Thanks
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.
This is a completely referenced research done by myself, and copyrights are restricted. Should anyone wish to purchase this paper, feel free to contact me @ ResearchCorner@gmail.com. Anyone claiming to be the author shall be liable to legal action.
Thanks

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05/13/2013

Customer Satisfaction Study for Karaoke Box Servicescape

Customer Satisfaction Study for Karaoke Box Servicescape

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Customer Satisfaction Study for Karaoke Box Servicescape

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 ‘singalong’ 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

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Customer Satisfaction Study for Karaoke Box Servicescape

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.

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Customer Satisfaction Study for Karaoke Box Servicescape

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.

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Customer Satisfaction Study for Karaoke Box Servicescape

Table of Contents
Contents Abstract Acknowledgments Table of Contents Introduction Rationale 1.1.1 1.1.2 1.1.3 1.2 1.2.1 1.2.2 1.2.3 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. 3.1 3.2 3.3 3.4 3.5 4. 4.1 4.2 4.3
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1. 1.1

Project Aim Project Scope Structure of Dissertation Industry Services Industry The Origin of Karaoke Industry Background of Neway Karaoke Box 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 Research Objectives Research Questions and Statements of Hypotheses Sampling Research Method Rationale for Selection Analysis and Findings Factor Analyses Regression Analyses Derivation of Relationships and Correlations

Customer Satisfaction Study for Karaoke Box Servicescape

4.4 5. 5.1 5.2 5.3 5.4

Findings and Discussion Conclusion and Recommendations Conclusion Recommendations Limitations Further Use of the Research References Appendix - Questionnaire Table List The Servicescape Dimensions for a Service offering Conceptual and Operational Definitions of Customer Satisfaction Factors Extracted for Servicescapes Factors Extracted for Customer Satisfaction, Desire to Stay for Longer Duration and Repatronage Intentions Relationship between eight Dimensions of Servicescape and Customer Satisfaction Relationship among Eight Servicescapes Dimensions and Repatronage Intentions Relationship among Eight Servicescape Dimensions and Desire to Stay for Longer Duration

89 92 92 93 96 97 100 109

[Table 1] [Table 2] [Table 3] [Table 4] [Table 5] [Table 6] [Table 7]

16 33 69 76 79 80 81

[Table 8]

Demographic and Consumption Characteristics of the respondents Correlation between Customer Satisfaction, Repatronage

83

[Table 9] Figure List [Figure 1] [Figure 2] [Figure 3] [Figure 4]
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Intentions and Desire to Stay for Longer Duration

Representation of Factors affecting Consumer Perceived Servicescape Servicescape Typology (by Wakefield and Blodgett, 1994) The Servicescapes Evaluation Process by a Customer Approach to Customer Satisfaction

23 29 31 43
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Customer Satisfaction Study for Karaoke Box Servicescape

[Figure 5] [Figure 6] [Figure 7] [Figure 8] [Figure 9]

Successful Product or Service Offering Elements of Customer Satisfaction 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

49 53 62 72 77

[Figure 10] [Figure 11] [Figure 12] [Figure 13] [Figure 14] [Figure 15] [Figure 16]

Gender Distribution 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 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).

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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
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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
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Customer Satisfaction Study for Karaoke Box Servicescape

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
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Customer Satisfaction Study for Karaoke Box Servicescape

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
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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
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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
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Customer Satisfaction Study for Karaoke Box Servicescape

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
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Customer Satisfaction Study for Karaoke Box Servicescape

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

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Facility exteriors

Facility Interiors Interior Design and Layout, Stationary, Billing Facility, Employee Uniforms, Web Pages, Booking Services, Information Brochures, etc.

Design, Signage, Parking, Equipment Quality, Signage, Landscape, Concierge Air Quality, Air Service, Building Aesthetic Temperature, Lighting, and Architecture, etc. 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
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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 videographic 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
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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
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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
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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.

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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
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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

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Consumer Perception of Servicescape

Ambient Factors (Facility interiors) Temperature Odor Noise Music Air Quality Sound System Seating

Design Factors (Facility Exteriors)

Social Interaction Factors (Other Dimensions)

Serviceable Factors

Customers

Visual Factors

Employees and Staff

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 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,
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Customer Satisfaction Study for Karaoke Box Servicescape

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
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Customer Satisfaction Study for Karaoke Box Servicescape

(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).

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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
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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
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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)

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Time spent in Facility Importance of Servicescape Low

Type of Service Functional Services Leisure Services Low Drive-through bank Dry-cleaners Health clinics Law offices Schools Hospitals High Miniature golf Video game rooms Sporting events Upscale restaurants Resorts Amusement parks

Low (Minutes ) Moderate (Hours) Extended (Days)

High

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.

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• •

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.

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Below is a diagrammatic representation of the servicescapes evaluation process by a customer Figure 3: The Servicescapes Evaluation Process by a Customer Elements and Attributes of Servicescape

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

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

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

Affective Process: Emotional involvement with the servicescapes.

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.

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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
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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 Definition Source Howard and Sheth (1969) The buyer’s cognitive state of being adequately or inadequately rewarded for the sacrifices he has Response The cognitive state of being and realization of Focus The offering provider adequately or inadequately rewarding the customer for the sacrifices he / she underwent during the entire buying 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
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Time The entire buying process.

undergone during the entire purchase buying process. intentions.

process. Experience was at least as expected, that is fulfillment of expectations.

During the consumptio n experience.

Customer Satisfaction Study for Karaoke Box Servicescape

a simple 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 Westbrook (1980) experience. The favorability of the individual buyer’s subjective assessment of the different experiences and results associated with the use and consumption of Swan, Trawick and Carroll the product. A cognitive judgment or conscious evaluation that the product has performed Individual buyer’s favorability of the subjective assessment of the product. Experiences and results of use and consumption of the product. During and post consumptio
34

observer. Assessment of Surprise due the précis psychological state of emotion or feelings. to the coupling of disconfirmed expectations and customer’s preceding feelings about the offering.

During acquisition and / or consumptio n of product.

During use or consumptio n.

The Cognitive The relative judgment or conscious poor or good performance

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(1981)

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.

evaluation of the offering’s performance along with the affect of feeling towards the product offering.

of the product and its suitability or unsuitability for the intended use or purpose, directed towards the product. Evaluation of the rewards and costs of the purchase comparative to the expected consequences.

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

End result or the outcome.

During post purchase and consumptio n phases.

Bearden and Teel (1983)

characteristics…” A function customer’s expectations about the

Comparison between

Expectations and beliefs about the product

During consumptio n

beliefs of product attributes expectations and the consequent and

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disconfirmation of the beliefs and expectations. LaBarbera and Muzursky (1983) Post purchase assessment of the expected product experience and the resulting surprise.

disconfirmatio attributes. ns of those expectations. Post purchase assessment. Surprise at the During difference between expected and post purchase product product consumptio n and post purchase phase. During post purchase phase.

Westbrook and Reilly (1983)

“…an emotional response

An emotional

performance. Experiences and perceptions associated with the product, service, and the related servicescapes, that are compared to one’s beliefs, values, conditions and buyer behavior

to the experiences provided and cognitive 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 or a service that can be triggered by a cognitive evaluation process during response.

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which the perceptions or beliefs about an object, service, action, or condition are compared to the buyer’s values, needs, Day (1984) wants or desires…” “… The evaluative reaction An evaluative 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 Cadotte, Woodruff and Jenkins (1987) Westbrook (1987) post acquisition….” An emotional response to the assessment of the user experience of a purchased product or service. “… The global evaluative judgment about a product’s usage and consumption…”
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perceptions.

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.

response to the discrepancy between expected and actual experience.

The emotional The use response to a product’s use experience assessment. The global evaluative judgment. Use and consumption experience.

During the consumptio n phase.

During the consumptio

of a purchased n phase.
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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

product. Perceived inconsistency between the pre purchase

During consumptio n and during post purchase phase.

actual offering expectations performances post purchase and consumption. or standards or performance of an offering in comparison to the actual perceived performance of the offering post its purchase and

Oliver (1989)

“… A function of the preference, fairness in dealings and disconfirmation during the buying process…”

Positive or negative responses during the buying process.

consumption. Salesperson’s ability to deliver fairness and preferred experience during the buying

During the purchase phase of a product or service.

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Westbrook and Oliver (1991)

“… A post purchase evaluative judgment of a

Evaluative judgment of a

process. Particular product or service selected for purchase

During the post purchase phase.

particular choice of product buyer’s or service purchase…” selection or choice of product or

Fornell (1992)

An overall post purchase reaction and assessment to the fulfillment of expectations.

service. Overall reaction and assessment.

Comparison between pre purchase expectations and the perceived post purchase product

During the post purchase phase.

Oliver (1992)

Assessment of satisfaction

Summary of

performance. Product attributes, especially during consumption.

During the consumptio n phase.

as an emotional response to the responses product performance which to product 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

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product Mano and Oliver (1993) “… An attitude similar to the post consumption assessment judgment that varies along the hedonic continuum…” 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…” consumption. An attitude of assessment judgment that varies along the hedonic continuum. An ‘affective response’ to the differences between expected and actual performances Oliver (1997) The judgment that a of a product. Buyer’s Product or service or one or more of its feature(s). During consumptio n phase. Product performance in contrast to a specific pre purchase performance expectation. During the consumptio n phase as well as post consumptio n phase. Product performance. During the post consumptio n phase.

product or service or one or judgmental more of its feature(s) is response to

providing or has provided a fulfillment. pleasurable level of consumption related fulfillment, which includes levels of under fulfillment or level of over fulfillment.
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It is a customer’s response to the feeling of Kotler (2000) fulfillment. “… 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 Hoyer and MacInnis (2001) “… The emotions of acceptance, relief, excitement, delight and happiness on having the expectations fulfilled…” Hansemark and Albinsson (2004) “… An overall customer attitude towards a service provider, or an emotional reaction to the difference between what customers
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Perceived performance versus the expectations from a product or service.

During the entire buying process as well as during the post purchase phase.

expectations. The emotions of acceptance, relief, excitement, delight and happiness. Emotional reaction to the differences in expected and desired

Fulfillment of expectations.

During the post purchase phase.

Outcomes and During the attributes of a product or service. entire buying process as well as
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Customer Satisfaction Study for Karaoke Box Servicescape

anticipate and what they receive, regarding the fulfillment of some need, goal or desire…”

outcomes and attributes of a product or service.

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

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Customer Complaint & Grievance Handling Customer Focus and Approach Customer Satisfaction Timeliness & Availability of Product & Services Information about Product and Service Customization of Product or Service

Customer Review and Feedback

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 (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

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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.

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-

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.

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-

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.

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-

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
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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
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Successful Product or Service Offering Customer Satisfaction 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

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

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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
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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)

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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

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Price of Product or Service

Level of Customer Support or Service

Perceived Quality of Product or Service

Ability to Deliver the Promised Product or Service

Availability of Product or Service

Elements of Customer Satisfaction

Perceived Ability to Meet Customer Expectations

Perceived Product or Service Performance

Perceived Value of Product or Service

Perceptions about the Competitive Products and Services

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.

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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.
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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
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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

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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 customer satisfaction.
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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

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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 customer satisfaction. H2a: Spatial layout in a karaoke box servicescape will result in positive customer satisfaction. H2b: Functionality in a karaoke box servicescape will result in positive customer satisfaction. H3a: Signs and Symbols in a karaoke box servicescape will result in positive customer satisfaction. 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:
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-

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.

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The diagram below represents the inter linkages and connections between the various
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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
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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.
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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
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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
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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
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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
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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
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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) 29. Many new songs 28. New songs are available quickly 30. New songs are trendy 27. Varity of songs for me to choose from 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) 19. Sufficient seats inside the rooms 14. Layout of rooms is convenient to customers 13. Size of room assigned is large enough for the number of customers 20. Size of television screen inside the rooms is appropriate 15. Table size and height inside the rooms is appropriate 18. Seats in rooms are very comfortable Reliability Coefficient Alpha = 0.790 Eigen value = 2.757 , Variance explained = 10.211% Factor 3: Ambient Conditions (Lighting and Temperature) 07. Sufficient lighting in lobby 08. Sufficient lighting in rooms 09. Button for adjusting lighting in rooms helps to enhance the atmosphere 05. Temperature of lobby is appropriate 06. Temperature inside the rooms is appropriate Reliability Coefficient Alpha = 0.728 Eigen value = 2.218 , Variance explained = 8.215% Factor 4: Cleanliness of Servicescapes Loading Mean 0.896 0.875 0.870 0.727 3.19 3.18 3.04 3.20 Factor Mean 3.15 (2nd)

Loading Mean 0.764 0.688 0.672 0.607 0.601 0.599 3.70 4.21 4.12 3.81 4.20 3.89

Factor Mean

3.99 (5th)

Loading Mean 0.776 0.725 0.648 0.642 0.597 2.94 3.09 2.52 3.40 3.70

Factor Mean

3.13 (1st)

Loading Mean

Factor Mean

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39. Corridor is clean and hygienic 40. Facilities inside the rooms are clean and hygienic 38. Nuts and snacks pack individually provides me a hygienic impression Reliability Coefficient Alpha = 0.754 Eigen value = 1.974 , Variance explained = 7.311% Factor 5: Ambient Conditions (Air Quality and Noise) 11. Rooms are always full of tobacco smell or odor 10. Air quality is bad in rooms 12. Insufficient sound arrester among rooms Reliability Coefficient Alpha = 0.688 Eigen value = 1.823 , Variance explained = 6.752% Factor 6: Signs and Symbols 33. Sufficient signs / route signs (e.g. Toilet signs) 34. Signs / route signs can be easily understood Reliability Coefficient Alpha = 0.863 Eigen value = 1.568 , Variance explained = 5.809% Factor 7: Artifacts (Theme of Karaoke Room) 37. Layout of the karaoke rooms make me happy while singing 36. Layout of the karaoke rooms raise my intention to sing Reliability Coefficient Alpha = 0.905 Eigen value = 1.136 , Variance explained = 4.207% Factor 8: Functionality (Decorating System) 25. Remote control is easy to use 24. Decorating system is user-friendly Reliability Coefficient Alpha = 0.868 Eigen value = 1.120 , Variance explained = 4.147%

0.802 0.734 0.643

4.00 4.03 3.40

3.81 (4th)

Loading Mean 0.799 0.756 0.688 5.42 5.19

Factor Mean 5.27 (6th) 5.20 Factor Mean 3.63 (3rd) Factor Mean 3.99 (5th) Factor Mean 3.13 (1st)

Loading Mean 0.882 0.871 3.64 3.61

Loading Mean 0.920 0.892 3.92 4.06

Loading Mean 0.871 0.831 3.26 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
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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)

6 5 4 3 2 1 0

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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
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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%.
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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
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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

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42. I am satisfied with the facilities of Neway Karaoke Box 43. My confidence towards Neway is enhanced by its facilities 41. I think Neway Karaoke Box facilities are excellent Reliability Coefficient Alpha = 0.911 Eigen value = 4.241 , Variance explained = 53.015% Factor 2: Repatronage Intentions 53. It is a wrong choice to patronage Neway Karaoke Box 50. I will repatronage Neway Karaoke Box 52. I will think of Neway when I want to go to a karaoke box Reliability Coefficient Alpha = 0.814 Eigen value =1.094 , Variance explained = 13.672% Factor 3: Desire to stay for longer duration 49. Neway Karaoke Box is the best choice for passing time 48. I intend to stay for longer duration in Neway Karaoke Box Reliability Coefficient Alpha = 0.648 Eigen value = 0.955 , Variance explained = 11.940%

0.835 0.825 0.774

3.74 3.64 3.53 3.66 Factor Mean 3.00 (1st) (2nd)

Loading 0.835 0.792 0.772

Mean 2.91 2.93 3.16

Loading 0.864 0.767

Mean 4.37 4.24

Factor Mean 4.31 (3rd)

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)

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‘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
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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
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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 Ambient Conditions (Lighting and Temperature) 0.21 0.18 Ambient Conditions (Air Quality and Noise) Spatial Layout (Layout of Rooms, Equipments, Furnishings and Sitting Comfort) Functionality (Songs) Functionality (Decorating System) Signs and Symbols (Signs) Artifacts (Theme of Karaoke Rooms) Cleanliness of Servicescape Adjusted R Square = 0.460 2 / Sig. T

0.001* 8 0.111 0.036* 0.12 / 0.029* 5 0.21 0.23 0.000* 3 4 0.10 / 0.050 9 / 0.118 0.030* 0.15 0.21 0.000* 4 2 0.30 0.38 0.000* 7 6 *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
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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 Dimensions B Beta Sig. T Ambient Conditions (Lighting and Temperature) 0.32 0.22 0.000* 7 8 Ambient Conditions (Air Quality and Noise) 0.04 / 0.436 4 Spatial Layout (Layout of Rooms, Equipment, Furnishings and 0.09 / 0.132 Sitting Comfort) 1 Functionality(Songs) 0.27 0.23 0.000* 2 4 Functionality (Decorating System) 0.10 / 0.069 8 Signs and Symbols (Signs) 0.04 / 0.475 2 Artifacts (Theme of Karaoke Rooms) 0.10 / 0.088 1 Cleanliness of Servicescape 0.41 0.40 0.000* 3 6 Adjusted R Square = 0.386 *p < 0.05 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
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‘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 Dimensions B Beta Sig. T 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 / 0.097 0.150 Sitting Comfort) Functionality(Songs) / 0.118 0.069 Functionality (Decorating System) / 0.115 0.081 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 Adjusted R Square = 0.179 *p < 0.05 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
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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 Gender Age (in years) Data Male Female 15-20 21-25 26-30 31-35 36-40 Percentage % 31.4 68.6 42.5 48.3 5.8 1.9 1.4
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Monthly Income (in HKD) Item Patronage Frequency per month Time Slot for Visit Duration of Stay during Every Patronage

$2,000 or below $2,001-6,000 $6,001-10,000 $10,001-14,000 $14,001-18,000 $18,001-22,000 Consumption Characteristics Data Less than 1 time 1-2 times 3-4 times More than 4 times Lunch Happy hour Dinner hour Mid-night Less than 1 hr 1-2 hr 2-3 hr 3-4 hr More than 4hrs

65.2 20.3 2.4 0 6.3 1 Percentage % 40.1 39.6 11.1 9.2 54.6 19.8 19.8 5.8 0 9.2 42.5 38.2 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.

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Figure 10: Gender Distribution

Figure 11: Age Distribution

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Figure 12: Monthly Income Level

Figure 13: Patronage Frequency per Month

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Figure 14: Time Slot Patronage

Figure 15: Duration of Visit during Patronage

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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
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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 Items Customer Satisfaction and Repatronage Intentions Customer Satisfaction and Desire to Stay for Longer Duration *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. Pearson Correlation 0.555 0.439 Sig. 0.000* 0.000*

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
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(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

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Customer Satisfaction (Dependent Variable)

Intentions to Stay for Longer Duration (Dependent Variable)

Repatronage Intentions (Dependent Variable)

Consumer Perception of Servicescape

Ambient Factors (Facility interiors) (Independent Variables)

Design Factors (Facility Exteriors) (Independent Variables) Serviceable Factors like cleanliness of rooms, packaging of snacks, etc. Visual Factors like signs and symbols, artifacts, etc.

Social Interaction Factors (Other Dimensions)

Temperature Odor Noise Music / Noise Air Quality Sound System Seating Equipments Color

Customers

Employees and Staff

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 called the dependent variable, dependent on the independent variables of ‘ambient factors’

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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
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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
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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
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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
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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
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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
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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
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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
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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. 2. Have you been to Neway Karaoke Box? ____ Yes ___No (If “No” please go to the end of questionnaire) How many times did you visit the Neway Karaoke on an average in a month? ____Less than 1 time 3. ____1-2 times ____3-4 times ____More than 4 times Which are the time slot(s) of your visit to the Neway Karaoke Box? ____ Lunch (10:00-14:00) 4. ____Happy Hour (14:00-18:00) ____Dinner (18:00-00:00) ____Mid-night (00:00-06:00) 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. 6. 7. Temperature of lobby is appropriate Temperature inside the rooms is appropriate Sufficient lighting in lobby 1234567 1234567 1234567
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8. 9. 10

Sufficient lighting in rooms Button for adjusting lighting in rooms helps to enhance the atmosphere Ventilation in rooms is bad

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. 11. Rooms are always full of tobacco smell or odor 12 Insufficient sound arrester among rooms . 13 . 14 . 15 . 16 . 17 . 18 . 19 . 20 . 21 . 22 . 23 . 24 . 25 . 26 . 27 . 28 Size of room assigned is large enough for the size of the group Layout of rooms is convenient to customers Table size and height inside the rooms is appropriate Leaflet standees occupy large part of the table Food containers occupy large part of the table Seats in rooms are very comfortable Sufficient seats inside the rooms Size of television screen inside the rooms is appropriate Tone quality of microphones is good I can control the level of microphones volume or echo easily Microphone cables always inter-twist and block the way The room décor is user-friendly Remote control is user-friendly Computer games in decorating system entertain me Varity of songs for me to choose New songs are available quickly

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. 29 . 30 . 31 32 . 33 . 34 . 35 . 36 . 37 . 38 . 39 . 40 .

Many new songs available always New songs are trendy Posters posted in lobby and corridor offer me the most updated information about new songs Price list in lobby let me knows the fees clearly Sufficient signs / route signs (e.g. Toilet signs) Signs / route signs can be easily understood Sufficient washrooms Layout of karaoke rooms raise my intention to sing Layout of karaoke rooms make me happy while singing Nuts and snack packs are provided in a hygienic manner Corridor is clean and hygienic Facilities inside the rooms are clean and hygienic

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Please state your satisfaction level towards Neway Karaoke Box. (1 represents strongly agree and 7 represents strongly disagree) 41 . 42 . 43 . 44 . 45 I think Neway Karaoke Box facilities are excellent I am satisfied with the facilities of Neway Karaoke Box My confidence towards Neway Karaoke Box is enhanced with every visit My satisfaction level towards Neway Karaoke Box is largely affected by its facilities Neway Karaoke Box facilities disappoint me 1234567 1234567 1234567
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. 46 . 47 . 48 . 49 . 50 . 51 . 52 . 53 . 54 . 55 . 56 .

The experience of patronage Neway Karaoke Box is exactly what I need I truly enjoy singing karaoke in Neway Karaoke Box I intent to stay longer time in Neway Karaoke Box Neway Karaoke Box is the best choice for spending time alone or with friends / family I will repatronage Neway karaoke Box I will patronage Neway karaoke Box more frequently I will think of Neway Karaoke Box when I want to go to a karaoke box It is a wrong choice to patronage Neway karaoke Box 1234567 1234567 1234567 1234567 1234567 1234567 1234567 1234567

What is your gender? ____Male ____Female What is your age? ____15-20 years old ____21-25 years old ____31-35 years old ____36-40 years old What is your monthly income? ____$2000 or below ____$10,001-$14,000 ____$2001-6000 ____$14,001-$18,000 ____26-30 years old ___Prefer not to answer ____$6001-10,000 ____$18,001-$22,000

____More than $22,000 ____Prefer not to answer Thanks for your opinion End of Questionnaire

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