THE INFLUENCE OF THE RACIAL MIX OF OTHER CUSTOMERS ON BLACK CONSUMERS' ANGER

FOLLOWING A PLAUSIBLY PREJUDICIAL SERVICE FAILURE

Abstract (Summary)
This paper explores service failures involving black consumers and white service employees and
the influence of the racial customer mix present at the time. A scenario-based study is conducted
with respondents representing a broad cross section of the U.S. black population. Consistent with
place identity theory (Proshansky 1978; Rosenbaum and Montoya 2007), the mediating effect of
anger is found to differ based on the customer mix present at the time of the failure such that the
absence (versus presence) of other black customers results in increased (versus attenuated) anger
and increased (versus reduced) service recovery expectations. A technique for testing moderated
mediation developed by Preacher, Rucker, and Hayes (2007) is also introduced.
[PUBLICATION ABSTRACT]

[Headnote]
This paper explores service failures involving black consumers and white service employees and
the influence of the racial customer mix present at the time. A scenario-based study is conducted
with respondents representing a broad cross section of the U.S. black population. Consistent with
place identity theory (Proshansky 1978; Rosenbaum and Montoya 2007), the mediating effect of
anger is found to differ based on the customer mix present at the time of the failure such that the
absence (versus presence) of other black customers results in increased (versus attenuated) anger
and increased (versus reduced) service recovery expectations. A technique for testing moderated
mediation developed by Preacher, Rucker, and Hayes (2007) is also introduced.

(ProQuest: ... denotes formulae omitted.)

It has long been recognized that the environment in which services are provided can play a role
in how consumers respond to the service encounter. Bitner's (1992) conceptualization of the
servicescape as consisting of ambient conditions, spatial layout and functionality, and signs,
symbols, and artifacts is one of the best-known models. Tombs and McColl-Kennedy (2003),
building somewhat on work by Turley and Milliman (2000), extended Bitner's conceptualization
by arguing that in addition to the servicescape elements identified by Bitner (1992), consumers
can be influenced by what they termed the social servicescape, which consists of service
providers and other customers present during the service encounter. Based on this research, it
seems plausible that the various demographic factors of the customer, service provider, and other
customers present at the time of the service encounter may play a role in consumer perceptions
(Turley and Milliman 2000). Research has, for the most part, studied the aggregate consumer
population in the United States and has ignored visible differences, such as ethnic origin, that
operate as powerful determinants of social interaction (e.g., Argo, Dahl, and Manchanda 2005;
Baker et al. 2002; He, Chen, and Alden 2008).

Rosenbaum and Montoya (2007) further contributed to the understanding of how the social
servicescape can affect consumers by introducing the concept of "place identity" into the
discussion of how consumers are affected by the social servicescape. Rosenbaum and Montoya
specifically investigated how ethnic customers use social elements in the servicescape to make a
determination of how the place matches their self-identify. Rosenbaum and Montoya referred to
one aspect of this as "place likening," which they defined as the extent to which "ethnic
consumers gauge the ethnic background of employees and customers present in a servicescape to
determine a balance between their ethnicity and the ethnicity of such others" (2007, p. 208). Our
research builds on that of Rosenbaum and Montoya by investigating the extent to which
emotions play a role in the way place likening operates in a service setting. Specifically, we
argue that the mediating role of negative emotions in the relationship between discriminatory
attributions made regarding a service failure and demands for service recovery efforts is
accentuated in those situations when an ethnic consumer is faced with a social service setting
that is incongruent with their ethnic identity.

Although little research has taken place in the services area pertaining to perceptions of racial
discrimination, to our knowledge, no research has investigated the emotions generated by service
failures that can be attributed to racial discrimination. Richins (1997) identified a broad set of 13
consumption emotions that included but was not limited to anger, worry, fear, contentment, and
optimism. Because our research focuses on a negative service outcome, we chose to focus on
anger, as opposed to the full scope of negative emotions due to previous findings that specifically
relate anger to poor outcome situations caused by others (Folkes, Koletsky, and Graham 1987;
Forrester and Maute 2001).

In addition to the theoretical contributions, we believe our paper makes a methodological

contribution in that we introduce into the marketing literature a method for testing for moderated
mediation developed by Preacher, Rucker, and Hayes (2007). The investigations of both
mediating and moderating effects have become widespread in marketing as have the methods for
testing for them, but, to our knowledge, this particular method of testing for moderated
mediation has not been presented in the marketing literature. We believe that this technique has
the potential to unlock a number of possibilities for researchers who wish to explore more
complex relationships.

THEORETICAL BACKGROUND

In the original research that led to the development of the SERVQUAL model, tangibles had a
relatively minor effect on the formation of service quality perceptions (Zeithaml, Parasuraman,
and Berry 1990). However, researchers have recently argued that perhaps tangibles play a more
important role in the provision of service quality (Reimer and Kuehn 2005). According to this
perspective, tangibles can include the physical environment as well as more ambient conditions
such as temperature, noise, odor, service employees, and other customers. This
conceptualization, which generally falls under the rubric of the servicescape (Bitner 1992),
acknowledges that there are many tangible elements under the control of the service manager
that impact perceptions of service quality, including others in the environment when the service
is provided.

One of the earliest and most comprehensive treatments of the role of others in the service
environment was proffered by Tombs and McColl-Kennedy (2003), who developed a model of
what they termed the social servicescape, which suggests that other customers and service
providers are important elements of "place." They draw in part on approach-avoidance theory
(Mehrabian and Russell 1974) to develop their framework. As adapted by Donovan and Rossiter
(1982), this framework proposes that stimuli in the environment will arouse emotions, which will
influence behaviors. Tombs and McColl-Kennedy (2003) argue that although the model has been
used by marketing scholars, they have, for the most part, ignored three important issues: (1) the
role of social actors in the servicescape, (2) the impact of context on an individual's affective
state, and (3) the role of cognitive appraisals in approach-avoidance behaviors. Our research
addresses the first two of those issues: actors and context.

Beyond those elements in the servicescape the manager might control (e.g., color, layout) is the
more important question of how customers might be influenced by the environment. For the
answer to this question, we can turn to literature in the environmental psychology literature
pertaining to place identity. Proshansky (1978) has been credited with creating the term "place
identity." Proshansky, Fabian, and Kaminoff (1983) subsequently defined place identity as a
"'potpourri' of cognitive, emotional and perceptual processes, formed through individuals'
transactions with natural and built environments" (Dixon and Durrheim 2004, p. 457) and
consider place identity a part of selfidentity. In other words, the places that over time develop the
most meaning for a person help to define that person. Most relevant to the present research is
what Proshansky (1978) refers to as the affective-evaluative component of place identity. It is
this element that leads the individual to find preference for different environments and is
captured in phrases such as feeling "at home" or having a "sense of belonging."

Place identity is relevant to all consumers, and it may be especially relevant for ethnic customers,
particularly those in a minority situation. Rosenbaum and Montoya (2007) investigated how
ethnic consumers assessed place identity via the ethnicity of other customers and service
employees and in doing so provide one of the few applications of place identity found in the
marketing literature. Essentially, their work represented a logical extension of research relative to
place identity and was firmly set within the context of Tombs and McColl-Kennedy's (2003)
social servicescape. Specifically, Rosenbaum and Montoya (2007) conducted a qualitative study
designed to elicit incidents pertaining to how ethnic customers were faced with discrimination in
service settings. Based on interviews with 20 subjects, Rosenbaum and Montoya (2007)
identified three "themes" that they labeled "place likening" (which refers to customers evaluating
the ethnic background of other customers and employees in the service environment), "verbal
negativity" (overt insults), and "nonverbal cues" (glaring stares or a lack of recognition).
Rosenbaum and Montoya also report a quantitative study that indicated place likening was
negatively related to complaining behavior and positively related to willingness to pay higher
prices. That is, as the ethnic congruency between the people present during the consumption
setting (other customers and service personnel) and the customer increased, intentions to
complain about a negative encounter were found to fall while the willingness to pay higher
prices increased. In addition, increased loyalty was found as the perception of negative verbal
and nonverbal cues fell. Rosenbaum and Montoya conclude that ethnic customers do actively
assess social elements of the servicescape and that this in turn affects behavioral and attitudinal
responses.

Based on the discussion above, it would appear that during the provision of service, ethnic
customers will consider the makeup of other customers and service employees in the service
environment and that this can affect their perceptions of the service delivered. We argue that this
information may become even more important in the event of a service failure due in part to the
need by consumers to attribute blame for the failure. For example, when a restaurant provides
slow service, a customer may attribute the delay to a variety of reasons, including understaffing,
an improperly trained server, a server having a bad day, purposeful mistreatment by the server,
or problems encountered in the kitchen. Due to the complex, labor-intensive nature of service
provision, a customer can rarely be certain of the reason for the failure. Customers will be aware
they have not received an expected outcome, but the environment makes it difficult to determine
what specifically went wrong (Zeithaml, Bitner, and Gremler 2006, p. 112). Our contention is
that when the failure involves a black customer and a white service employee, it is possible the
customer will make an attribution of discrimination for any number of reasons, including a need
to protect self-esteem by attributing negative events to other people (Crocker and Major 1989),
perceiving the service employee as holding an unjust attitude toward the customer's group
(Major, Quinton, and McCoy 2002), or the fact that the failure is not a random uncontrollable act
but a controllable act of vengeance directed at the customer (i.e., perceiving the service
employee to be prejudiced). Prior discussion would lead one to conclude that a willingness to
make discriminatory attributions regarding a service failure would increase in a situation where
the customers perceive an incongruity between their self-identity and the other customers in the
servicescape (low place likening).

The Role of Negative Emotions

It is logical that when customers perceive a service failure has occurred, they will expect the
service provider to offer some form of recovery. In the event of a service failure that occurs in a
service environment that is deemed to be low in place identity, it is likely that customers will
exhibit higher levels of negative emotions and that this will result in an even higher level of
expected service recovery. In other words, while one could argue for a relationship between
discriminatory attributions and higher levels of service recovery demands, we believe this
relationship can only be fully understood by incorporating the role of negative emotions.

Researchers acknowledge that emotions emerge during consumption situations and that these
emotions often occur within the context of causal attributions (Folkes, Koletsky, and Graham
1987; Maute and Dube 1999; Smith and Bolton 2002; Westbrook and Oliver 1991). There has
been some debate concerning the causal ordering between attributions and emotions (Bagozzi
1996), but evidence from a variety of different literature seems to suggest that attributions are
antecedent to emotions (Folkes 1984; Oliver 1997; Szymanski and Henard 2001; Weiner 2000),
which is consistent with Lazarus's (1991) theory of emotion and adaptation which proposes that
the appraisal of an event will lead to a particular emotion followed by some coping mechanism.
Building on work by Lazarus (1991), Bagozzi (1992) proposes what he labels "outcome-desire
units," which relate outcomes to conative reactions designed to address the outcome. Bagozzi
argues that appraisals can center on (1) planned or unplanned outcomes in the past or present or
(2) expected or possible outcomes. Furthermore, each of these two classes has two subclasses
that focus on whether the outcome was positive or negative. In the context of the current study,
the most relevant of the four possible cases is what Bagozzi terms "outcome-desire conflict,"
which arises when one fails to achieve a goal or experiences an unpleasant event. According to
Bagozzi, a number of emotions are likely to result, including anger. From the emotional reaction
there are a number of possible coping responses, including the possibility of reevaluating the
goal.

An important element is the fact that "emotions arise in response to appraisals one makes for
something of relevance to one's well-being" (Bagozzi, Gopinath, and Nyer 1999, p. 185). In
other words, it is the appraisal that one makes relative to the event that leads to a particular
emotion, not the event itself. These appraisals could include attributions made regarding the
event. In the current research, it is proposed that when an ethnic customer experiences a service
failure brought on by a service employee who is of a different ethnicity, the appraisal will be
manifest in a discriminatory attribution, which will result in an emotion (anger).

Prior research has examined the influence of emotion on behavioral intentions (Diaz and Ruiz
2002; Mooradian and Olver 1997) and recovery effort evaluations (Smith and Bolton 2002). A
general pattern can be discerned across these studies: increased anger leads to reduced intentions
to use the service firm in the future and more generous compensation from the service firm to
have a chance of getting the customer to return. So, for example, in a study by Diaz and Ruiz
(2002), anger generated by delays in an airline flight time was positively related to inclinations to
complain and lack of intention to try the service provider again. Analogously, Smith and Bolton
(2002) found that customers' emotional responses to service failures influenced their
postrecovery satisfaction: greater negative emotion required a higher-level recovery
performance. Based on the work reviewed above, we propose that attributions of discrimination
will lead to anger, which will influence behavioral responses that may be manifest in greater
degrees of expected service recovery necessary to make the customer willing to recommend the
service to others.

HYPOTHESES

The preceding section argues that in situations where an ethnic customer finds himself or herself
in a minority situation and a service failure occurs, that person may be more likely to attribute
the failure to discrimination, which might lead to higher demands for service recovery. However,
this relationship would be mediated by the impact of negative emotions. Thus, we contend that
negative emotions- specifically, anger-will act to mediate the relationship between
discriminatory attributions emanating from a service failure. Thus,

Hypothesis 1: Anger will mediate the relationship between discriminatory attributions and
service recovery expectations.

Consumers evaluate the place, commonly called the servicescape or social servicescape, in
which a service is provided as part of their evaluation of the quality of the service. Included
among the many elements that make up place are the other customers and service employees
present. Based on the place identity literature, one can conclude that consumers will evaluate the
extent to which those in the social servicescape are like them, a process Rosenbaum and
Montoya (2007) labeled "place likening." Based on Rosenbaum and Montoya, this process
would appear to be more relevant to ethnic customers. Evidence for this contention can be found
in Alcoff (1999), who argues that ethnic customers are more sensitive to using information about
others to make sense of situations in which they find themselves, and that this is a function of
perceptions. The importance of race (her term) is found in the fact that one of the first things
noticed about someone other than gender is race. Thus, one would expect ethnic customers who
find themselves in a social servicescape in which they are a minority would be more sensitive to
that fact.

Hypothesis 2: The mediating role of anger will be moderated by others in the service
environment such that when the ethnic makeup of other customers is dissimilar, the mediating
effect will be greater.

METHODOLOGY

Sample

Data were collected using a firm that manages a national panel of approximately 3 million
consumers. After creating the survey using online software, the firm sent out e.mail "invitations"
to a randomly drawn national subset of their black members. A total of 289 responses were
received, which make up the data used in the study reported below. Study participants represent
a broad cross section of the U.S. black population. Although our sample is slightly older, more
educated, and has a higher income than the black population as a whole, we believe our sample
is useful for the tests of our hypotheses.

Experimental Design

Study respondents were first presented with a statement indicating that the survey related to
perceptions of service failures and recovery efforts. They were then directed to a scenario
describing a service failure in a restaurant (slow service) and asked to carefully read it.
Instructions noted that the service depicted in the incident had actually occurred. With the
scenario were presented pictures of the customers (a black couple), the service provider (a white
woman), and the service setting in which the failure occurred (see the Appendix). As to the
service setting, one group was shown a picture of a restaurant in which all the customers were
white ("all white" condition), and another group was shown a picture in which the customers
were approximately the same number of blacks and whites ("mixed-race" condition).
Respondents were randomly assigned to one of the two context conditions. The pictures were
taken at an actual restaurant and were staged in order to get the appropriate mix of customers. To
be sure that the pictures used in the experiment resulted in the desired effect, an open-ended
question was included at the end of the survey that asked respondents to indicate one thing they
noticed when looking at the restaurant picture. Researchers categorized the responses with a high
degree of agreement. A relatively high percentage of respondents (64 percent across both
conditions) indicated that they noticed the presence or absence of blacks/whites in the photos.

After reading the scenario and viewing the pictures, participants were asked to consider what the
restaurant would have to do to perform a service recovery that would "get you to recommend the
restaurant to your friends." This framing method is consistent with other discrimination research
in which the respondent is asked to read a scenario and respond (e.g., Inman and Baron 1996;
Johnson and Lecci 2003; Johnson et al. 2003). The extent to which consumers would recommend
the restaurant was assessed using three individual items that increased in magnitude of recovery
from a simple apology, an apology and discount, and an apology and a full refund. All three were
measured on a scale of 1 (definitely agree) to 7 (definitely disagree). For example, the first
recovery item asked respondents to consider to what extent they believed that an apology would
be sufficient to make them recommend the restaurant to their friends, with a higher score
indicating that an apology would be insufficient.

Anger was measured using three items developed initially by Richins (1997). Participants were
asked to describe the extent to which the service failure made them feel frustrated, angry, and
irritated on a scale of 1 (not at all) to 7 (strongly). These three items were added to create the
score for anger (α = 0.90).

Participants were then asked two questions relative to perceptions of discrimination. The lack of
an existing multi-item measure of situation-specific discrimination led us to develop two single-
item measures. The first item questioned the extent to which they believed the failure was due to
racial discrimination and the second item questioned the extent to which the participant believed
the ethnicity of the customers was relevant in the failure. These conceptually distinct measures
were captured on a scale of 1 (definitely agree) to 7 (definitely disagree). Because the survey was
presented over multiple Web pages, we were able to restrict respondents from returning to earlier
questions after they had been completed. This, along with placing the discrimination items on the
last page, allowed us to ensure that the questions concerning discrimination did not bias
responses to other questions. Last, some demographic information, including gender, age,
education, and income, was requested.

Analysis

Our first hypothesis proposed that anger would mediate the relationship between discriminatory
attributions and service recovery expectations. The most commonly utilized method for testing
for mediation is one suggested by Baron and Kenny (1986). However, researchers have recently
suggested that a direct test of the mediating effect is superior to the Baron and Kenny method
(MacKinnon, Lockwood, and Williams 2004; MacKinnon et al. 2002; Preacher and Hayes
2004). Figure 1 presents a simple mediating effect of the type proposed in this paper. In the
figure, X refers to the independent variable, Y to the dependent variable, M to the mediator,
a^sub 1^ refers to the unstandardized coefficient of M regressed on X, and b^sub 1^ and c' refer
to the unstandardized coefficients of Y regressed on M and X, respectively, when both are
included as simultaneous predictors of Y. The coefficients are from the following regression
equations:

M = a^sub o^ + a^sub 1^ X + r (1)

Y = b^sub o^ + c' X + b^sub 1^ M + r, (2)

where a^sub o^ and b^sub o^ are intercept terms, and r is the residual term.

The significance of the direct effect is determined by dividing an estimate of the mediating effect
by its standard error and comparing this to a standard normal distribution (MacKinnon et al.
2002). The study revealed that the direct meditating effect is equivalent to a^sub 1^b^sub 1^
from Equations (1) and (2). The standard error can be computed according to a formula provided
by Sobel (1982). MacKinnon et al. (2002) compared 14 ways to assess mediation effects and
concluded the Sobel test was best in terms of power and intuitive appeal. The standard error can
be calculated as

... (3)

where the "hat" notations denote sample estimates of population quantities. This standard error
can also be used to construct a confidence interval as follows:

... (4)

One drawback with this method, as pointed out by Preacher and Hayes (2004), is that the z.value
is based on the assumption that ... is normally distributed (and is referred to hereafter as a
normal-theory test). Bollen and Stine (1990) report that the distribution is oftentimes not normal
and can be asymmetrical with the asymmetry tending to be positive, which may lead to
underpowered mediation tests. Preacher, Rucker, and Hayes (2007) suggest that to overcome this
problem, the sampling distribution of ... can be bootstrapped with the bootstrapped sampling
distribution used to derive a confidence interval around the estimate of the mediating effect.

Preacher and Hayes (2004) argue there are at least two reasons why a test as described above
may be superior to the Baron and Kenny (1986) method. First, as pointed out by Holmbeck
(2002), the Baron and Kenny method has a higher probability of Type I error (e.g., the
introduction of a possible mediating variable causes the X [arrow right] Y path to become
insignificant even with a relative small change in the magnitude of the coefficient) and of Type II
error (e.g., the introduction of a possible meditating variable leads to a large change in the X
[arrow right] Y path without a corresponding change in the significance of the coefficient).
Second, MacKinnon et al. (2002) argue that the Baron and Kenny method may suffer from low
power. In the Baron and Kenny method, two coefficients from two different regression equations
must be significant in order for mediation to be found. However, one or both may be found to be
nonsignificant, particularly in small samples, therefore leading to a conclusion of no mediation
when mediation does occur. The method discussed above (i.e., the Sobel test) reduces the
probability of Type II error by simply reducing the number of tests that must be conducted from
two to one. Furthermore, MacKinnon, Lockwood, and Williams (2004) have shown the Sobel
test to have greater statistical power than the Baron and Kenny method. For these reasons, the
Sobel test as described above will be used to assess the mediation hypotheses. Specifically, SPSS
macros discussed in Preacher and Hayes (2004) were used to conduct the analysis.

Our second hypothesis proposed that the mediating effect tested for in Hypothesis 1 would differ
across the context of the service setting (i.e., all white customers or mixed-race customers).
Although this type of effect has been discussed as moderated mediation or mediated moderation,
Preacher, Rucker, and Hayes (2007) place this within a broad framework that they label
"conditional indirect effects." Hypothesis 2 best corresponds to moderated mediation, which
Preacher, Rucker, and Hayes describe as being of interest "when the strength of an indirect effect
depends on the level of some variable, or in other words, when mediation relations are
contingent on the level of a moderator" (2007, p. 193). The effect proposed in our study is
represented in Figure 1 by the path labeled "conditional indirect effect" (CIE). The path
associated with CIE implies that the relationship between the independent variable and the
mediator is moderated by a third variable. Preacher, Rucker, and Hayes point out that this can be
tested as either mediated moderation (a moderation effect is mediated) or moderated mediation
with the difference methodologically being the parameters that are utilized in the analysis. We
hypothesize that the mediation effect differs for different levels of the proposed moderator (i.e.,
service context). Therefore, we conducted the test necessary for moderated mediation. Details
concerning the method used to conduct the test of Hypothesis 2, which is an extension of the
method described above with regard to the test of mediation are detailed in Preacher, Rucker,
and Hayes (2007). In particular, the authors use an example to illustrate an SPSS macro that
efficiently allows for the testing of these complex hypotheses and is used in our tests.

RESULTS

Table 1 presents the means and standard deviations for the measures. The results of the Sobel
test for mediation are presented in Table 2. The top half of the table presents the normal-theory
results, and the bottom half presents the bootstrapped results. The top half of the table illustrates
that the p.value associated with all six of the tests is < 0.01, providing evidence that anger does
in fact mediate the relationship between the two measures of discrimination and the three
recovery options. These results are corroborated by the bootstrapped results in the bottom half of
Table 2. The first two columns under the headings for the dependent variables (racial
discrimination, customer race relevant) provide the mean and standard deviation, respectively, of
the indirect (i.e., mediation) effect for the 1,000 bootstrap samples. The next two columns
provide the lower and upper limits for a 95 percent confidence interval around the mean. A
significant mediating effect is found when the value "0" does not appear in the confidence
interval. Of the six tests for mediation presented in Table 2, all are significant. Thus, the results
presented in Table 2 provide clear support for Hypothesis 1, which proposed that anger would
mediate the relationship between discriminatory attributions and the level of service recovery
required for a customer to be willing to recommend the service provider to others.

Tables 3, 4, and 5 present the test of Hypothesis 2, which proposes that the mediating effect of
anger in the relationship between attributions of discrimination and the recovery required to
recommend the restaurant would differ depending on the context. Table 3 presents the test of the
interaction coefficient that is necessary to provide evidence of moderated mediation. The
information includes the coefficient term for the interaction, the standard error, the z.value, and
the probability value. As can be seen for each of the six tests, the coefficient is significant,
indicating the presence of a moderated mediation effect. In other words, the mediation effect
discussed above is contingent on the service context.

To determine the exact nature of the moderating effect, the analytical procedure utilized
(Preacher, Rucker, and Hayes 2007) also provides normal-theory tests of the value of the
conditional indirect effect for each level of the moderator. These are presented in Table 4. For
each of the three dependent variables, the tests for the two groups are presented. The first column
is the value of the conditional indirect effect for each group with the other three columns
providing the standard error, z.value, and probability value, respectively. For all six tests, the
value for the conditional effect is significant for the "all white" group but not significant for the
"mixed-race" group, indicating the mediating effect is greater for the "all white" group.
However, as with the test of mediation, the values tested are based on the assumption of
normality of the conditional indirect effect and should be interpreted with caution. As with the
test of mediation above, the analysis was conducted using a bootstrapped sample (n = 1,000),
which results in the calculation of 95 percent confidence intervals. The results of these tests are
presented in Table 5 and are exactly the same as those from the normal-theory test in Table 4.
For the "all white" group, the confidence interval does not contain "0," meaning the value is
significant, whereas for the "mixed-race" group, the confidence interval does contain "0,"
meaning the value for the indirect effect is not different from "0." In other words, as with the
normal-theory test, the effect is significant for one context but not the other, implying the
mediating effect of anger is moderated by context.

DISCUSSION AND MANAGERIAL IMPLICATIONS

Although no service provider wants service failures to occur, given the special characteristics of
services (e.g., inseperatability of production/consumption; people-based delivery) it is perhaps
inevitable that failures will occur. When these failures do occur, it is critical that the service
provider be able to recover in such a way that satisfaction is restored, the customer is not lost,
and the customer is willing to recommend the service to friends. The ultimate goal for every
service provider is to find a way to turn angry customers into loyal customers (Hart, Heskett, and
Sasser 1990).

Our research has investigated, from a black customer's perspective, the relationship between
perceptions of a prejudice-driven service failure and the level of action expected to recover from
the failure. This research affords white service providers the opportunity to be more
understanding of and sensitive to the black consumers' interpretation of service failures and
raises a number of interesting issues, both theoretical and practical. When the failure involves a
white frontline service provider and a black customer, the possibility that the white employee
purposely treated the black customer poorly becomes evident. Other-directed anger arises from
attributions based on physical differences (race) of the parties, which can potentially be
attenuated if customers of a similar race are present at the time.

We believe our paper has a number of significant implications for marketing practice. First, we
believe that service managers must be more attuned to the fact that black customers may come
into service encounters with a predisposition to attribute even the most minor service failure to
discrimination in part because most services are provided by whites. Accordingly, managers may
need to be sure to have an adequate understanding of the needs of black consumers, which would
entail taking measures associated with closing the "knowledge gap" in the oft-used "gap model"
developed by Parasuraman, Zeithaml, and Berry (1985). Our paper highlights the fact that black
consumers may attribute ambiguous service failures to discrimination, but it will only be through
a service manager's greater understanding of his or her particular service situation that this
propensity to attribute failures to discrimination and the subsequent anger and greater demand
for service recovery can be reduced.

Second, after gaining a better understanding of their specific service situation as it pertains to
black customers, managers should ensure that they close the "standards gap" in the gap model by
effectively communicating to frontline service employees the measures they should take to
reduce the possibility of discriminatory attributions of service failures. For example, one method
to do this might be to provide what Cohen, Steele, and Ross (1999) refer to as "wise feedback,"
which is feedback designed to provide the consumer with a high degree of understanding
concerning the service failure. Cohen, Steele, and Ross's research has indicated that the provision
of wise feedback to minorities can significantly reduce discriminatory attributions. Service
employees should be trained to provide such feedback as a matter of course but specifically
when dealing with black customers in a mostly white service environment. Because our research
indicates that attributing failures to discrimination increases anger and service recovery demands,
service managers must take measures to minimize occurrences.

By placing our research within the theoretical findings of place identity and drawing on the
concept of "place likening" discussed by Rosenbaum and Montoya (2007), we have highlighted
the importance of place and others in the service environment on customers. Given the
importance of other customers in the service environment, a third implication would be for
service managers to work to attract a more diverse customer base.

We would like to make clear that we are not necessarily advocating that black customers be
treated differently than white customers, although the recent movement toward relational
exchange philosophies and its accordant use of customer relationship management has led to
differential treatment of customers on a variety of factors, including current and future
profitability. What we are truly advocating is that service managers engage in behaviors that
have been advocated for over 20 years: having a better understanding of all customers' needs,
translating those into actionable standards, and training/motivating employees to deal with the
myriad demands of the services marketing customer.

LIMITATIONS AND FUTURE RESEARCH

The study relied on a scenario-based research design. Different methodologies should be

employed to confirm and possibly extend the conclusions of this research. The empirical
conclusions are based on findings from one service industry. Extending the conclusions of this to
other service industries should be considered with caution. Also, the underpinnings of this study
were based on a service failure involving black customers and a white service provider;
extending the generalizability would require including parties of varying backgrounds to include
other minority groups, such as Hispanic Americans or Asian Americans. Although it is likely the
results would generalize to any group that is likely to be the target of prejudice, varying the racial
mix, weight, or gender of the various parties would also provide additional insights. We should
also acknowledge that there are some differences between certain characteristics of our sample
and those of the general population. Accordingly, care should be employed in generalization to
other groups.

Finally, the use of a single-item measure of discrimination is a limitation. As noted earlier, this
was primarily driven by the inability to find a multi-item measure of eventspecific
discrimination. However, the use of a single-item measure has been recently supported in the
literature if the attribute of the object being measured can be conceptualized as singular and
concrete (Bergkvist and Rossiter 2007; Rossiter 2002). Even though we believe the
discrimination items used in this study meet the criteria of face validity under the framework
suggested by Bergkvist and Rossiter (2007) and Rossiter (2002), the development of a multiitem
scale that measures situation-specific perceptions of discrimination as opposed to chronic
discrimination (e.g., Utsey 1998) would be useful.

Empirically demonstrating the influence of the racial mix of customers present at the time of the
service failure was the first step. Another important question is to determine the approximate
percentage of similar customers in the environment that will trigger the moderating effect we
found in our study. An understanding of the perceptions of black consumers is important, but
from a managerial perspective, the real question is how to reduce potential negativity associated
with a service failure. Our manipulation was either "all white" or "mixed race," which was
evenly divided between black and white. There is a level between those two that should
demarcate between greater and less anger. Knowing this would be useful to service marketers, as
it is unlikely that the service environment will be made up of either "all white" customers or an
exact 50/50 ratio. Another step could be to determine what aspects of a service recovery are most
important in instances involving consumers of varying racial backgrounds.

Future research should also work toward understanding how this research relates to social impact
theory (SIT; Latane 1981), which represents the underpinning of Argo, Dahl, and Manchanda's
(2005) work on mere social presence. Is it possible that the number of customers present at the
time of the failure and their proximity could interact with the racial makeup of the customer mix?
Including the racial mix of study participants as a variable might explain some of Argo, Dahl,
and Manchanda's mixed results. For example, contrary to SIT, both Study 1 and 2 found an
inverted.v relationship between the number of other consumers present at the time of the retail
purchase such that positive emotions were highest when the social size was 2 (versus 1 or 3). The
racial makeup of confederates used in the study (to control the number of other customers
present) and that of the actual study participants were not identified in either study. It seems
possible that if the shopping experience was high in place likening (Rosenbaum and Montoya
2007), consistent with SIT, emotions would become even more positively charged with the
addition of a third consumer (one of similar racial origin). Additional research should attempt to
combine the theoretical underpinnings of SIT and place likening to better understand emotional
reactions to plausibly prejudicial service failures.

The broader spectrum of emotions generated by service failures that can be attributed to racial
discrimination should also be investigated. Although we focused on anger, other negative
consumption emotions identified by Richins (1997), such as worry, discontent, sadness, shame,
and fear, warrant attention.

Another interesting research question involves the racial mix of employees. Although it may be
difficult to accomplish this on a regular basis, service firms do have the ability to control the
diverse nature of their employee base. According to Rosenbaum and Montoya (2007), one way
to potentially create a welcoming environment is to systematically adjust the employee mix such
that a larger range of people are represented. It is possible that a more diverse employee base
could mitigate the observed lack of physically similar patrons. Understanding the factors that
alleviate perceptions of discrimination and thereby reduce the negativity of the inevitable service
failure is a win for both the black consumer and the service firm.
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[Author Affiliation]
Tracy Meyer (Ph.D., University of Cincinnati), Assistant Professor of Marketing, Cameron
School of Business, University of North Carolina Wilmington, Wilmington, NC,
meyert@uncw.edu.
Thomas L. Baker (Ph.D., Florida State University), Associate Professor of Marketing, College of
Business and Behavioral Sciences, Clemson University, Clemson, SC, tbaker2@clemson.edu.

[Appendix]
APPENDIX
Participant Instructions
Most of the questions contained in the survey will be based on the scenario and pictures below.
Please be sure to carefully read the scenario and look at the pictures before going to the next
page. Remember, you will not be able to come back to this page once you have gone to the next
page.
Scenario
Vonessa and Darnell Williams (see picture below) arrived at a restaurant for dinner on a
Saturday evening. Below is a picture representing what they saw upon entering the restaurant.
The hostess sat them at a table in the corner of the restaurant and informed them that their
waitress (see picture below) would be there to serve them in a minute or two. The waitress did
come to take their order after about 10 minutes. After doing so, she left the table and walked
toward the kitchen. After 40 minutes, the waitress finally brought the food to Darnell and
Vonessa after everyone who had been seated at approximately the same time had been served
their meals. Both Darnell and Vonessa were extremely upset at what they described as "horrible
service." In fact, they asked for the manager and made a formal complaint regarding their
"shabby treatment."