Master Thesis BA Strategy & Innovation (BKM123A25)
What makes your experience all-inclusive?
Experience design in the Dutch and German all-inclusive hotel
industry.
University of Groningen Faculty of Economics and Business Master Thesis BA Strategy & Innovation (BKM123A25)
Title: What makes your experience all-inclusive?
Subtitle: Experience design in the Dutch and German all-inclusive hotel industry.
University: University of Groningen
Faculty: Faculty of Economic and Business
Study Program: Master of Science in Business Administration (MScBA) Specialization: Strategy and Innovation
1st supervisor: dr. P.M.M. (Pedro) de Faria 2nd supervisor: dr. T.L.J. (Thijs) Broekhuizen
Place - Date: Sijbrandahuis – July 25th, 2010
Author: Jantina de Boer
Student number: s1551833
Email address: jantinadeboer@live.nl
Organization: Van der Most Beheer B.V.
Companies: Preston Palace; Wunderland Kalkar
Adress: Hoogeveenseweg 7
7777 TA Schuinesloot Nederland
Abstract
Purpose . This paper examines the influence of six service design variables (customer emotions, customer expectations, physical and virtual environment, customer-to-customer interaction and customer-to-organization interaction) on the meaningfulness of the customer experience at the Dutch and German all-inclusive hotel industry. Moreover the relationship between the meaningfulness of the customer experience and the degree customer loyalty is researched.
Design/ methodology / approach. The data was collected from two all-inclusive hotels, namely: Preston Palace located in the Netherlands and Wunderland Kalkar located in Germany. Both all-inclusive hotels are part of Van der Most Beheer B.V. and are classified as 3 star hotels. Face-to-face, a sample of sixty respondents (thirty respondents at each all-inclusive hotel) have answered a
structured questionnaire. In order to assess the influence of the different service design variables, as well as the influence of the meaningfulness of the customer experience on customer loyalty, the data from the two hotels have both been compared as combined, when using an ANOVA analysis with a median split procedure as well as a regression analysis.
Findings. This study found that the service design variables customer emotions, customer
expectations and the physical environment (aesthetics, ambience (audio-visual) and equipment) are positively related to the meaningfulness of the customer experience at all-inclusive hotels in the Netherlands and Germany. This research also found a strong positive influence of the meaningfulness of the customer experience on the degree of customer loyalty.
Originality / value. As this study underlines, the meaningfulness of the customer experience has a strong positive influence on customer loyalty at Dutch and German all-inclusive hotels. In spite of this fact, until now, little research has been done on experience design in this industry. This study is original in providing insights on which service design variables are significant and of great importance when managing the customer experience at all-inclusive hotels in the Netherlands and Germany.
Keywords. Experience design. Service design variables. Customer experience. All-inclusive hotel industry. Loyalty.
Preface
In June 2005, I finished my pre-university education. To graduate, a student had to write a so called ‘profile report’, or a report linked to your chosen profile, in my case economy and society. In the preface of that report, I mentioned the importance of such a report, whereas students have to apply all their skills and knowledge they acquired over the years in order to deliver the ‘master piece’ of that study. Five years later, I finished the ‘master piece’ of my chosen Master program, Strategy and Innovation. Looking back on those five years, it is pretty amazing how fast time flied, while in the meantime change and development played a very central role.
By means of this preface, I would like to thank some persons who helped, supported and motivated me during the process of writing this Master thesis.
My first supervisor dr. Pedro de Faria, who provided me with intelligent and very useful feedback during the process of writing this thesis. Also my second supervisor dr. Thijs Broekhuizen, who contributed as well in a very helpful way. Thank you for your support and contribution.
Joop Stutterheim, you were really helpful and supportive during our meetings. Thank you for the openness and insights you provided me at Van der Most Beheer B.V.
Thea Westdijk and Han Groot Obbink, thank you for your interest and friendliness during my stays at Preston Palace and Wunderland Kalkar.
Finally, my family, partner and friends, who have been great and supportive during the entire period. Thank you for just listening and providing me support, feedback and motivation.
Content
Preface ________________________________________________ 4
1. Introduction __________________________________________ 7
2. Literature review ______________________________________ 9
2.1 Customer __________________________________________________________________ 10 2.1.1 Expectations _________________________________________________________________ 10 2.1.2 Emotions ____________________________________________________________________ 11 2.2 Environment _______________________________________________________________ 12 2.2.1 Physical environment __________________________________________________________ 12 2.2.2 Virtual environment ___________________________________________________________ 14 2.3 Interaction _________________________________________________________________ 16 2.3.1 Customer-to-organization interaction ______________________________________________ 16 2.3.2 Customer-to-customer interaction _________________________________________________ 17 2.4 Customer loyalty ____________________________________________________________ 18 2.5 Overview __________________________________________________________________ 19 2.5.1 Experiential breadth ___________________________________________________________ 19 2.5.2 Conceptual framework _________________________________________________________ 204.3 Comparison Preston Palace / Wunderland Kalkar __________________________________ 30 4.4 Hypothesis testing ___________________________________________________________ 34 4.4.1 ANOVA analysis______________________________________________________________ 34 4.4.2 Regression analysis ____________________________________________________________ 41
1. Introduction
While they are an essential part of consumer leisure, hotels and resorts are often considered as a rather conservative industry sector. The upper range of this industry, for instance, has been divided between all-inclusive resorts, on the lower side, and luxury hotels, on the upper side. Yet, the competition among all-inclusive resorts has intensified, as more and more resorts offering this type of holiday have appeared (Rayna and Striukova, 2009). Moreover, the all-inclusive hotel industry is challenged by a variety of alternative leisure offers, such as theme park- hotels, entertainment centers and all-inclusive cruise ships (Rifkin, 2000). This growing competition creates a pressure to gain and, later, to sustain a competitive advantage (Rayna and Striukova, 2009). According to Pine and Gilmore (1999) such a competitive advantage can only be reached by offering an experience, since products and services become commoditized. In this respect, there has been an increasing interest in designing ‘experiences’ for customers, particularly for those in the service sector. Experience design is an approach to create emotional connection with customers through careful planning of tangible and intangible service elements and therefore tries to discover, manage and exploit those inputs which contribute to a meaningful customer experience (Pullman and Gross, 2004; Scott et al., 2009). Experience design has gained popularity in many hospitality and retail businesses, however limited research has been done in the all-inclusive hotel industry whereas, as said, competition becomes more fierce. Moreover, while authors argue that experiences build loyalty (Reichheld, 1996; Schmitt, 1999; Pine & Gilmore, 1998, 1999; Gob´e & Zyman, 2001; Davenport & Beck, 2002; Pullman and Gross, 2004), the relationship between the meaningfulness of the customer experience and the degree of customer loyalty in the all-inclusive hotel setting warrants further examination.
The research objective for this study is therefore to develop further understanding of the relationship between customer experience and customer loyalty and to provide useful insights for experience design and management for the hotel industry1 and especially the all-inclusive hotel industry. Based on the research objective, the following research question can be formulated:
Q. How can all-inclusive hotels create a meaningful customer experience and in what way does this experience influences customer loyalty?
This main research question can be split by formulating secondary research questions:
Q1. How can the customer experience be defined in terms of service design elements? (Literature review)
Q2. To what extent is the customer experience in all-inclusive hotels determined by service design variables? (Case study)
1
Q3. What influence has the customer experience in all-inclusive hotels on customer loyalty? (Case study)
2. Literature review
Context is a well-known and accepted term as it comes to experience design. Haeckel et al. (2003) differentiate context from a service’s performance by design clues or elements emitted by the service and the environment. Similarly, Gupta and Vajic (1999) define context as the physical and relational setting where the customer consumes the service and everything that the customer interacts with in that setting. Particularly, memorable context allows for different levels of customer participation and connection with the event or performance both through relational and physical elements (Pine & Gilmore, 1998). According to Falk & Dierking (2000), the general consumer experience will be determined by three specific contextual elements, namely: (1) a personal context, (2) a physical context and (3) a sociocultural context forming the so-called ‘interactive experience’. The perception of the customer on these three elements will eventually determine if the customer experience is meaningful or not.
During this study, the three elements mentioned by Falk & Dierking (2000) will be translated into three specific research areas, namely: the customer (personal context), the environment (physical context) and interaction (sociocultural context). As can be seen in figure 2.1, the literature review examines how and in which way these contextual elements influence the meaningfulness of the customer experience and how the customer experience eventually influences the degree of customer loyalty. Customer loyalty is included into this model, as reaching customer loyalty seems to be one of the most important targets for organizations.
Figure 2.1
Every contextual element will be analyzed and subdivided into service design variables. Eventually, the conceptual model based on the literature review will be tested by measuring the perceptions of the customers on the service design variables by means of a questionnaire.
During this study the management of context plays a key role and therefore the following working definition of a meaningful customer experience will be used:
A meaningful experience occurs when a customer has any sensation or knowledge acquisition resulting from some level of interaction with different element or variables of a context created by a service provider (Gupta and Vajic, 1999; Pullman and Gross 2004).
The definition used in this study, underlines the importance of the role of the service provider in the experience design process. Moreover, the service provider has to know which elements or variables of a context are designable and in what way these variables have to be designed in order to be effective. As said before, in the following sections, all three contextual elements will be discussed and
subdivided into service design variables. Besides that, the additional factor, degree of customer loyalty, will be discussed.
2.1 Customer
As organizations trying to design a meaningful customer experience, only situations or cues that people can interact with are ´designable´. While the background of the customer is not directly designable, it plays an important role in the understanding of the perception of the customer on the organization and eventually the customer experience (Forlizzi and Ford, 2000). This section handles therefore the customer expectations and emotions.
2.1.1 Expectations
Expectations are customers’ beliefs about how an organization will perform. Researchers indicate the existence of two distinct levels of expectations, namely ‘will’ and ‘should’. ‘Will’ expectations correspond with that customers believe what will happen during subsequent contacts with the organization. ‘Should’ expectations represent a normative standard that corresponds to what ought to happen in subsequent encounters (Boulding et al, 1993). Both ‘will’ and ‘should’ expectations are shaped by past experience, word-of-mouth communications and service provider’s communications (Zeithaml et al, 1993). In line with the theory of Boulding et al. (1993), Kano et al. (1984) formulated the well-known Kano model. The Kano model emphasizes the relationship between the extent to which customer’s expectations are achieved and the degree of customer satisfaction associated with this achievement. Three types of ‘relationships’ or customer needs can be identified in this model, namely: basic needs, satisfier needs and delighter needs. Basic needs are similar to ‘should’
achievement of the basic needs, results into great customer dissatisfaction. The delighter needs act as opposite from the basic needs; a small increase of achievement, results in great customer satisfaction. The achievement of the satisfier needs increases also customer satisfaction, but only at a linear rate (Ramaswamy, 1996).
Levels of expectations are why two organizations in the same business can offer far different levels of service and still keep customers happy. It is why McDonald's can extend excellent industrialized service with few employees per customer and why an expensive restaurant with many waiters may be unable to do as well from the customer's point of view (Davidow and Uttal, 1989: 84).
Literature on the relationship between the customer experience and customer expectations does exist, but is still scarce. According to Scott et al. (2009), the experience quality depends on, among other things, the extent to which expectations have been met. The same is recognized by Pikkemaat et al. (2009), whereas they did research on the staging of experiences in the wine tourism industry. Tourists were asked about their expectations of products and activities on a wine route and these results were eventually linked to satisfaction levels and the customer experience. The experience setting has to correspond or exceed the customer expectations to fulfill the experience. If the actual event is negatively corresponding to the customer expectations, the customer experience is thus not fulfilled (Peters & Weiermair, 2000). In the context of service quality, Zeithaml et al. state that service quality depends on the perception of the customer of what was delivered and how and the expectation that the customer has of the service and company delivering the service (1990).
In short, it can be concluded that the way in which an organization meets or exceeds customer expectations is positively related to the customer experience.
2.1.2 Emotions
Because the term ‘emotion’ is complex and often ambiguous, it has been variously defined in literature. In the context of this study, Havlena and Holbrook (1986) introduce the term
‘consumption emotions’. Havlena and Holbrook (1986) describe consumption emotions as immediate emotional responses evoked during consumption. Haeckel et al.(2003) connect consumption emotions with the meaningfulness of the customer experience. According to Haeckel et al. (2003) organizations with effective experience management systems understand and respond to the emotional needs of their customers. They orchestrate a series of clues (service design elements) designed to provoke positive emotional reactions which in turn determine the customer experience.
customer experiences, namely: the entertainment, educational, escapist and esthetic dimension. According to Pine and Gilmore (1999), each experience dimension standing alone is unique and contributes to the consummation, with an ideal combination of all four dimensions yielding an optimal customer experience. The entertainment (customers passively observe activities and/or performances of others), educational (customers absorbs the events unfolding before him at a destination, while actively participating through interactive engagement of the mind and/or the body) and escapist dimension (customers escape from their daily life and return to the routine after experiencing the non-routine life), are all three directly connected with the emotions and feelings of the customer (‘I am entertained, educated and released’).
2.2 Environment
The meeting between the individual – or group of individuals – and the company takes place in a particular experience setting, both physical and virtual. The physical and virtual setting shape the environment in which the interaction can take place between the individual and the offering party (Boswijk et al, 2008).
2.2.1 Physical environment
The physical environment is the collection of all elements we can sense (see, hear, smell, taste and touch). Every environment has sounds, sights, smells and textures even when devoid of music, lighting and signage. The physical environment in which a service is delivered or experience is created, is often considered a key variable influencing customer perceptions and behavior (Bonnin, 2006). People gain information about their physical environment through their senses and the senses can be a direct route to customers’ emotions (Roberts, 2004; Haeckel et al., 2003). Moreover, people perceive the world through all their senses simultaneously, so the more sensory an experience, the more engaging it will be (Zomerdijk and Voss, 2009). The more effectively an experience engages the senses, the more memorable it will be (Haeckel et al, 2003; Pine and Gilmore, 1999). Customers will be more likely to have a meaningful experience if they feel good about themselves in their interaction with that
environment and they will want to revisit (Soars, 2009). For instance, it has great impact on the customer experience if a well-prepared meal is served in a noisy restaurant with uncomfortable chairs or if the same food is served the same way in a comfortable and relaxing environment.
As can be seen in table 2.1, according to Goffman (1956), the physical environment involves the furniture, physical layout and other background items that supply the scenery. Goffman takes only the visual sense into account, while ambient features, such as noise, music, aroma and room temperature are also used to control the environment and affect customers’ pleasure and arousal emotions in these settings as can be seen in the classification of Mayer and Johnson (2003) and Soars (2009). Bitner (1992) talks about the servicescape (the environment in which the service is delivered and where the firm and the customer interact) and Turley and Milliman (2000) have proposed to split atmospherics into four specific environmental dimensions. Moreover, Ryu and Jang (2003) showed that facility aesthetics, ambience and layout as dining environment elements, had significant effects on the degree of customer pleasure, while facility aesthetics significantly influenced the level of customer arousal.
Table 2.1
Comparison of different scientific classifications on physical environmental variables Author Service design variables of the physical environment
Goffman (1956) Furniture Physical layout Background items Bitner (1992) Ambient conditions
Spatial layout and functionality Signs, symbols and artifacts Turley and Milliman (2000) General exterior
General interior Layout and design
Point-of-purchase and decoration Mayer and Johnson (2003) Theme
Décor Noise level Color Ceiling height Light Floor layout Temperature Smell Smoke
Ryu and Jang (2008) Facility aesthetics Lighting
Ambience Layout
Dining equipment Zomerdijk and Voss (2009) Aesthetics
Comfort
Spatial configuration Theming
Soars (2009) Exterior
General interior (hear, see, smell, taste) Store layout
As can be seen in table 2.1, the classification of Ryu and Jang (2008) is a good representation of the classifications described by the other authors. Ryu and Jang (2008) include all service design variables of the physical environment mentioned by other authors and is therefore most complete. In the
classification of Ryu and Jang (2008), the visual (Goffman, 1956), as well as the non-visual variables (Mayer and Johnson, 2003; Soars, 2009) are included and additionally the quality and functionality of the equipment is mentioned, which is for all-inclusive resorts with its wide range of facilities probably of great importance (Rayna and Striukova, 2009) . For that reason, the classification of Ryu and Jang will be used to determine the design variables of the physical environment, though with some small adoptions to make the classification more appropriate to all-inclusive hotels.
Facility aesthetics. Facility aesthetics refer to architectural design, along with interior and exterior design, all of which contribute to the attractiveness of the physical environment.
Ambience. Ambience means environmental elements that tend to affect the non-visual senses and may have a subconscious effect on customers. These background conditions include music, scent and temperature.
Equipment . Equipment refers to the quality and functionality of the service products. In the context of all-inclusive resorts, equipment is about the quality and functionality of the food, the hotel room and entertainment artifacts.
Layout. Layout means the way in which objects (e.g. machinery, equipment and furnishings) are arranged within the environment. Layout also contains the spatial configuration, which means the way movement is organized.
2.2.2 Virtual environment
Besides the physical environment, the virtual environment has also greatly increased in importance. Companies such as Amazon distribute products and services solely through web channels and virtually all companies are creating web channels as sources for prepurchase information. In the hotel industry it becomes more and more important to use web channels not only for providing prepurchase
information, but also for e-purchase / reservations and postpurchase information and support
(Rabobank Cijfers en Trends 2010 [2]). The customer experience begins and ends therefore not when the customer is physical visiting or leaving the organization, but as soon as he/she (virtual) ‘touches’ the organization (Spengler and Wirth, 2009). According to Parasuraman et al. (2002), websites create expectations and represent the hospitality and efficiency of an organization With these developments, it has become important to understand how e-commerce and e-service systems affects the customer experience (Parasuraman et al, 2005; Boswijk et al, 2008).
variables which customers perceive to be important when using a website. As can be seen in table 2.2, Loiacono et al. (2007) created WebQual, a scale for rating websites on 12 dimensions, such as
informational fit to task, interaction, visual appeal, communication and substitutability and Yoo and Donthu found four (partly overlapping) dimensions, namely: ease of use, aesthetic design, processing speed and security of the website (2001).
Author Service design variables of the virtual environment
Wolfinbarger and Gilly (2003) Web site design Reliability Privacy/security Customer service Yoo and Donthu (2001) Ease of use
Aesthetic design Processing speed Security
Barnes and Vidgen (2002) Usability Design Information Trust Empathy
Parasurman et al. (2002) Information availability and content Ease of use
Security Graphic style
Reliability/fulfillment Loiacono et al (2007) Informational fit to task
Interaction Trust Response time Design Visual appeal Innovativeness, Flow-emotional appeal Integrated communication Business processes Substitutability Table 2.2
Comparison of different scientific classifications on virtual environmental variables
As can be seen in table 2.2, different authors mention a number of similar service design variables. Website design or aesthetics is mentioned in all classifications, as well as reliability or trust.
Remarkably, Wolfinbarger and Gilly (2003) do not include ease of use or usability, in contrast to the other four authors. Information (availability) is mentioned separately by Barnes and Vidgen (2002) as well as by Parasurman et al (2002) and Loiacono et al (2007), while other authors (see Wolfinbarger and Gilly, 2003; Yoo and Donthu, 2001) include this informational element into ease of use or
Ease of use. The ease and speed of accessing and using the website. Website aesthetics. The appearance of the website.
Reliability. The extent to which the site’s information on the website and promises about reservations are fulfilled.
2.3 Interaction
A successful service experience provider such as Disney spends many months training employees on relational methods to explicitly identify with and connect emotionally with guests during social interactions (Rubis, 1998). Interaction is important to experience design because it fosters
identification with the service provider and with the other customers. Identification is the perception of oneness with or belongingness to a collective (Mael & Ashforth, 1992).
Relational context refers to two important types of interaction, namely: between the customer and the organization and between the customer and the other customers (Pullman and Gross, 2004). These two types of interaction will both be discussed during this section.
2.3.1 Customer-to-organization interaction
The employees’ behavior in an organization and during the contact moments with customers is crucial in the fulfillment of a customer experience (Tsang and Ap, 2007). In experience-centric services, workers can be asked to engage with customers - to connect with them on a personal, emotional level (Pine and Gilmore 1999). When employees attempt to engage with customers, they conduct emotional labor (Hochschild 1983). One form of emotional labor is the creation of rapport (Gremler and Gwinner 2000). Rapport relates to enjoyable interactions, including feelings of care and friendliness and
As mentioned before, Zomerdijk and Voss (2009) have done research on the impact of different organizational aspects on the customer experience by means of different cases and qualitative methods. Besides the impact of the physical environment, they also showed that the interaction between service providers and customers was believed to be one of the most important factors, if not the most important factor, influencing the customer experience. The Royal Caribbean cruise line for example, encourages crew members, particularly stateroom attendants and dining room waiters with whom customers interact on a daily basis, to talk to customers, to get to know them, to show interest in them as a person and to share information about themselves (Zomerdijk and Voss, 2009).
Furthermore, Joie de Vivre founder Chip Conley sends his employees for instance to Bali, just for let them feel the hospitality and service-mindedness of the Balinese people in the hope that they will copy it in their Joie de Vivre hospitality functions (Boswijk et al, 2008). Given the above findings, it is reasonable to conclude that the attitudinal and behavioral responses of employees are an important factor in affecting the customer experience.
2.3.2 Customer-to-customer interaction
During consumption, customers are interacted with the organization, as well as with fellow customers. Interaction between customers can be divided into intragroup and intergroup interactions. The former refers to interaction between related customers (friends and families) and the latter concerns
interaction between unacquainted customers. In the services marketing literature, interaction between unacquainted customers is called customer-to-customer interaction (Pearce, 2005).
An important aspect related to customer to customer interaction is customer compatibility. Broadly defined, compatibility management is a process of first attracting homogeneous customers to the service environment, then actively managing both the physical environment and customer-to-customer encounters in such a way as to enhance satisfying encounters and minimize dissatisfying encounters (Martin & Pranter, 1989). Although some exceptions exist, instances of incompatibility can usually be traced to some form of customer heterogeneity, based on for instance demographic characteristics (Martin & Pranter, 1989). Fullerton and Punj (1993) identified a range of demographic characteristics that affect dysfunctional customer behaviors, including age, sex, education and economic status. Zomerdijk and Voss (2009) found out, that more and more organizations find ways to exploit the presence of other customers to make an experience more enjoyable or engaging. Moreover,
organizations recognize the need for customer compatibility in order to fulfill the customer experience.
2.4 Customer loyalty
As mentioned before, reaching customer loyalty is one of the most important targets of organizations and therefore the influence of the meaningfulness of the customer experience on customer loyalty in the all-inclusive hotel industry will be researched in this study.
According to Klenosky and Gitelson (1998), hotel guests and tourists in general, rely heavily on non-commercial sources of information, such as recommendations from friends and family when choosing a holiday. This word of mouth to others is one objective that can be reached when customers become loyal to your organization.
Researchers distinguish between two types of loyalty, namely behavioral and attitudinal loyalty (Odin et al. 2001). Behavioral loyalty exists when a consumer repeatedly purchases a product or service, but does not necessarily have a favorable attitude towards the brand. Attitudinal loyalty on the other hand, is defined by Jacoby and Chestnut (1978) as ‘the consumer’s predisposition towards a brand as a function of psychological processes’. The measurement of loyalty consists therefore of a combination of a customer’s referral behavior, which refers to attitudinal loyalty and repeat purchase behavior, a measurement of behavioral loyalty (Heskett et al., 1990/1997; Haeckel et al., 2003; Pullman and Gross, 2004).
classification of loyalty used in this research.
2.5 Overview
The preceding sections have discussed several service design variables categorized by research area. Based on the review of relevant studies, every service design variables has a particular relationship with the customer experience. Moreover, the customer experience has apparently a strong link with customer loyalty. These relationships can be classified into a model of experiential breadth and a conceptual model. Both will be discussed in this section and thereby the first sub question - How can the customer experience be defined in terms of service design variables?- is answered.
2.5.1 Experiential breadth
According to Haeckel et al. (2003), experiential breadth refers to the sequence of experiences customers have in interacting with an organization and identifies the stages customers undergo in the experience. Experiences are shaped well before customers pass through the firm's doors (Haeckel et al., 2003). In the case of hotel guests, several elements of the total customer experience take place before or after the actual visit, for instance: the expertise and friendliness of the reservations agent, the user friendliness of the website and the mailing after the hotel visit. By defining the full breadth of the customer experience, becoming familiar to the hundreds of variables along the way and seeking to manage these variables to evoke positive perceptions, organizations can create great opportunities (Haeckel et al. 2003). It is therefore of great importance, that the service design variables discussed in this literature review provide sufficient experiential breadth.
Haeckel et al. (2003) describe 5 stages of customer experience, namely: expectations setting (expectations set by advertising and word of mouth), (pre) purchase interactions (information gathering, ordering and reservation), service consumption (consuming the service), post purchase interactions (after sales service) and post experience review (intuitive review of the customer
Figure 2.2
Experiential breadth of this study
2.5.2 Conceptual framework
The ideas that are recorded in a conceptual framework, relate to the variables that are considered to be important and the expected relations between these variables (Cooper and Schindler, 2006). The conceptual model used in this study, is meant to provide an overview of expected service design variables which probably play a role with the shaping of the customer experience at all-inclusive hotels. The literature discussed in the previous sections, was mainly related to service providers ( in the hotel industry) and therefore the framework fits well for the all-inclusive industry. Figure 2.4 shows the conceptual model, based on the literature review in this chapter.
A number of hypotheses derive from the depicted conceptual model. As can be seen in figure 2.3, the conceptual model can be organized into two parts and a number of hypotheses can be derived from each part.
Part 1 of the model suggests that customer perceptions on several service design variables (created and managed by the service provider), will influence the level of meaningfulness of the customer
experience in a particular service setting. Furthermore, part 1 depicts the customer related variables as well, which are not directly designable by the service provider. However, based on the literature review, these customer related variables have an important influence on the customer experience and therefore they can’t be ignored when explaining and analyzing the meaningfulness of the customer experience.
The following hypothesis that are based on the literature review (2.1 -2.3) can be determined from table 2.4:
H1. Positive customer emotions, will be positively related to a meaningful customer experience. H2. Positive customer expectations, will be positively related to a meaningful customer experience. H3. Positive customer perceptions on the physical environmental context variables, will be positively related to the customer experience.
H4. Positive customer perceptions on the virtual environmental context variables, will be positively related to the customer experience.
H5. Positive customer perceptions on the customer-to-customer interaction, will be positively related to the customer experience.
H6. Positive customer perceptions on the customer-to-organization interaction, will be positively related to the customer experience.
Part 2 of the model suggest that the level of meaningfulness of the customer experience, will influence the degree of customer loyalty. Based on the premises in section 2.4, it is proposed that the
meaningfulness of a customer experience is positively related to customer loyalty and therefore the following hypothesis can be formulated:
3. Cases and research design
In this chapter the cases and research design of this study will be presented. A research design includes the research method, constitutes the blueprint collection and analysis of data and provides an overview of the sampling design (Cooper and Schindler, 2006). The presented research design in this chapter will eventually be used to test the model and hypotheses presented in section 2.5.2.
3.1 Case study: Van der Most Beheer B.V.
The conceptual model and hypotheses presented in section 2.5.2, will be tested at Van der Most Beheer B.V. Van der Most Beheer is the coordinating organization of a wide range of companies operating in a variety of industries in the Netherlands as well as in Germany and has about 2000 workers employed. The focus of this research lies on two Van der Most Beheer companies, namely: Preston Palace and Wunderland Kalkar, both operating in the hotel sector and covering the concept of being an all-inclusive hotel. The concept of an all-inclusive resort implies that hotel accommodation, meals, drinks and activities are included in the price of the package (Rayna and Striukova, 2009). According to the the International Standard Industrial Classification all-inclusive hotels can be included to the industry of hotels and motels.
All-inclusive hotel Preston Palace*** (a former hospital) was founded in 1988 and consists of 296 rooms with a maximum capacity of 720 guests. Besides that it embraces an event hall, a bar street, 3 restaurants, a coffee corner, an indoor funfair, sport and game facilities, 10 meeting-rooms, a cinema and a swimming pool. Preston Palace is established in Almelo, which in the east of the Netherlands. All-inclusive hotel Wunderland Kalkar*** (a former never used nuclear reactor) was founded in 1995 and consists of 450 rooms (5 hotels) with a maximum capacity of 1200 guests. Besides that it
embraces an indoor bar street, 4 restaurants, a theme park, 30 meeting-rooms, sport and game facilities and an adventure plaza. Wunderland Kalkar is established in Kalkar (Germany), near to the Dutch border.
Because of the unusual building and exterior of both all-inclusive hotels, a former hospital and a former never used nuclear reactor, it is has to be mentioned that this can have an influence on the physical environmental scores.
Both for Preston Palace (2009) and Wunderland Kalkar (2008), professional research is done on customer segmentation in 2008 and 2009 by Cendris2. By comparing both customer profiles, it can be decided to what extent both organizations are comparable in terms of serving the same customer
2
profiles. Table 3.1 shows the conclusions of the Cendris rapports. As can be seen, Cendris makes use of nine categories to classify the customer information.
Dataset Preston Palace Wunderland Kalkar
Place of residence
(Where does the customer come from?)
Non-urban areas at Noord-Holland, Noord-Brabant and Overijssel.
Non-urban areas at Groningen, Noord-Brabant and Overijssel
Visiting companionship
(With whom does the customer visit?)
1. Families with children (13+) 2. Families (55+) with no children
1. Families with children
2. Families (55+) with no children
Education
(What education level does the customer have?)
Low-medium Low-medium
Income
(How much does the customer earn?)
1. Modal 2. Pensioned
1. Modal-1,5 x Modal 2. Pensioned
Sports and interests
(Which sports and activities does the customer like?)
Football, fishing and going out Football, fishing , volleyball and going out
Socially involvement
(To what extent is the customer socially involved by means of charity?)
Low Low
Media
(Which media channels does the customer use?)
1. Internet usage medium 2. Gossip booklet
3. Commercial radio and television
1. Internet usage medium 2. Gossip booklet
3. Commercial radio and television
Shopping
(Which shopping channels does the customer use?)
1. Mail order 2. Price discounters
1. Mail order 2. Price discounters
Holiday
(What type of holiday does the customer prefer?)
Popular Europe destinations (Spain, Turkey, Portugal) in park or hotel
Europe destinations (Turkey, Germany, Austria, East Europe) in park or caravan
Table 3.1
As can be seen in table 3.1, Preston Palace and Wunderland Kalkar have very similar customer profiles. Both all-inclusive hotels for instance, serve mainly families with young children and senior people with no children. Families with young children have apparently other needs and wishes then senior people. To provide complete managerial recommendations it is therefore important to include the influence of age.
Based on the Cendris research, it can be concluded that both Van der Most all-inclusive hotels, have the same customer profiles. The similarity between the customer profiles lays therefore a foundation for further comparative statistical research. Moreover, the data of both resorts can be combined, as a larger sample is needed.
3.2 Research method
The research method of the conceptual model can be quantitative and / or qualitative. Quantitative research seeks to describe, explain and predict and, typically, applies some type of statistical analysis, while qualitative research seeks to understand and interpret. The research purpose of qualitative research is in-depth understanding and theory building, as the focus of the quantitative research lies on building and testing theory (Cooper and Schindler, 2006: 199). Looking at this study, quantitative research is most appropriate, as the literature review section has described and explained relevant information and eventually made predictions by means of hypothesis formulation.
3.3 Data collection
As the classification of data collection distinguishes between monitoring and communication processes, this study is a communication study by means of a personal interview (Cooper and Schindler, 2006). A structured questionnaire is constructed whereas a 5-point Likert scale for all questions is employed, except those related to guest characteristics. The use of five-level Likert scales with a neutral midpoint is recommended so that respondents are not forced to give an opinion if they do not have one (Cooper and Schindler, 2006:350). Customers will be asked to rate their response to each statement, from [1] strongly disagree to [5] strongly agree.
customer-to-customer interaction and three statements for non-verbal customer-to-customer-to-customer-to-customer interaction. Eventually, emotions were measured by means of six statements, whereas each statement represents an emotion, namely: released, educated, entertained, relaxed, happy and welcome (Barsky and Nash, 2002). One control question was used to collect responses on the dependent variable, customer experience. Loyalty was measured by using three statements. Appendix 1 shows the sources in cases where questions/statements have been adapted from earlier research and appendix 2 includes the complete questionnaire.
3.4 Sampling design
From each all-inclusive hotel, 30 respondents have been randomly chosen. Face-to-face they were asked to cooperate with the research and in turn for cooperation they received a reward of a 10% discount card. The questionnaires have been conducted in a period of two discontinuous days per all-inclusive hotel. Customer were asked to cooperate when they were checking out, since then they had the fullest experience.
When interpreting the results and conclusion, one has to keep in mind that structured questionnaires (face-to-face), are subject to interviewer and response bias. Moreover, using rewards can cause response bias.
In order to be able to answer the research question correctly, there were two demands of the sample used in this study. The study is focused on the total customer experience at Preston Palace /
Wunderland Kalkar. Therefore, respondents had to be hotel guests. Besides that, respondents must had used the website for information and / or reservations, in order to research the virtual environment of the hotel.
3.4 Data analysis
As mentioned before, statistical methods will be used to analyze the collected data. The data will be coded and entered into a database (Statistical Package for the Social Sciences (SPSS) 15.0) for statistical analysis. The data from the two cases will be analyzed separately, as well as combined. Combined data provides a larger sample and is therefore more reliable. Moreover, the Cendris research (3.1) justifies the similarity between the two cases, which lays sufficient foundation for combining data.
4. Results
4.1 Sample characteristics
The total sample (data Preston Palace and Wunderland Kalkar combined) consists of 60 respondents, 29 males (48.3%) and 31 females (51.7%) with an average age of 43 years old (minimum 18,
maximum 78). 65% visited the all-inclusive hotel with family, 23.3% with their partner, 8.3% went with friends and 3.3% were there with colleagues. The reason that was most mentioned for visiting the hotel was vacation (80%), followed by a celebration (16.7%) and training (3.3%). The respondents have visited the all-inclusive hotel on average 4 times before, in the range of number of visits from one to fifty visits.
Between the samples of the two all-inclusive hotels, two striking differences on respondent characteristics can be obtained, namely:
1. Average number of visits: Preston Palace guests had an average number of visits of 6,2 , while Wunderland Kalkar guests had an average of 1,3 visits.
2. Visiting companionship: At Preston palace, 50% of the respondents visited the hotel with family and 40% with his / her partner. On the other hand, at Wunderland Kalkar 80% of the respondents visited the hotel with family and only 6,67% with his / her partner.
The visiting companionship difference is remarkable, as the Cendris rapport predicted for both all-inclusive hotels a large share for families with children and families with no children. With 6,67% of families with no children, this group is clearly underrepresented at the Wunderland Kalkar sample and one has to keep this difference in mind when interpreting the results and conclusion.
Appendix 3, graphically shows the respondent characteristics of the two samples separated as well as combined.
4.2 Validity, reliability and normality check
To test the data for validity and reliability, factor analysis and reliability analysis was used. Factor analysis was used to test for construct validity, i.e. to verify whether the items on the scale correspond to their original variable. Reliability tests search for the consistency of the items in the scale. The data will be tested for normality by means of the Shapiro-Wilk test.
Validity
sub variable ambience. As appendix 4 show, principal component analysis, illustrates that ambience consisted out of two unobserved latent variables. Ambience is therefore, divided into two variables, namely an audiovisual component (the color and music) and a smell dimension (smell of cigarettes and odd scents). Furthermore, temperature also did not explain any of the variance in the variable and when temperature was deleted, Chronbach’s alpha of Ambience (total) increased from .572 to .641. After the items were combined into the final scales, the Average Variance Explained was analyzed. The Average Variance Explained (AVE) indicates what percentage of the variance of the construct is explained by an individual item. The higher the explained variance relative to the total variance, the stronger a measure, with a minimum of 0,5 or 50 % (Fornell and Larcker. 1981).
As can be seen in table. 4.1, the questionnaire is divided into 13 variables, each measured by one or more items varying between one to six items. In this study, all items demonstrate an average variance extracted values between 49,8 % and 89,4%. The great majority of the items therefore has an average extracted variance higher than the benchmark of 0.5 recommended by Fornell and Larcker (1981).
Reliability
The reliability of this study was tested by means of a reliability analysis and expressed by means of a Chronbach’s alpha, which is a measure for the internal consistency of a variable or scale. A
Chronbach’s alpha higher than .70 indicates a reliable scale, so a lower score indicates an unreliable scale. The rationale for internal consistency is that the individual items or indicators of the scale should all be measuring the same construct (Hair et. al, 2005).
As can be seen in table. 4.1, all original scales reported a good reliability indicated by Chronbach’s alpha varying between .71 and .88. However, in spite of the shift in the ambience variables, the reliability of ambience (audio-visual) and ambience (smell) have both a Chronbach’s alpha smaller than .70 (.45 and .52 respectively for audio-visual and smell). Nevertheless, these two variables will not be removed from this study, as Kline (1999) pointed out that in some occasions, dependent on the importance of the scale and variables for the research, a Chronbach’s alpha >.40 is acceptable.
Variable Average Variance
Table 4.1
Validity and reliability analysis
Normality
Because only sixty respondents are represented in the final dataset, small deviations from normality can have a big impact on the distribution of the data. To test the distribution of the data, the variables were tested with a Shapiro-Wilk test. Shapiro-Wilk verifies whether the distribution of the data is significantly different from normal.
The null hypothesis is that the population is normally distributed and this hypothesis will be accepted when Sig. is greater than the chosen alpha level (Sig. > 0.01). On the other hand, the null hypothesis will be rejected (i.e. one concludes the data is not from a normally distributed population), if Sig. is smaller than the chosen alpha level (Sig. < 0.01). As appendix 4 shows, all variables are significant (Sig. < 0.01 ) and all of the data is therefore not normally distributed. By transforming the variables into logistic, inverse and square roots it was tried to improve the normality of the scale, but this yielded no results. The null hypothesis will thus be rejected and further analysis has to be adapted and interpreted fully on the fact that the data is not normally distributed. As said before, when reading and interpreting the results, one has to keep in mind that the ANOVA analysis is the key test and the regression analysis an additional test to complete the results from the ANOVA analysis.
4.3 Comparison Preston Palace / Wunderland Kalkar
As mentioned before, from two all-inclusive hotels data has been collected, namely: Preston Palace ((n= 30) and Wunderland Kalkar (n=30). Figure 4.1 graphically shows the mean score per service design variable per all-inclusive hotel.
Virtual Environment Ease of Use Website Aesthetics Reliability 87.0% 89.4% - .85 .88 - 2 2 1 Customer-to-Customer Interaction Verbal Non-verbal - 69.8% - .77 1 3 Customer-to-Organization Interaction 68.7% .84 4
Meaningfulness of Cust. Exp (CQ)
- - 1
Figure 4.1
Mean per service design variable per all-inclusive hotel
As can be seen from figure 4.1 and table 4.1, Preston Palace scores on average highest on ambience (Smell) (4,55) and customer-to-organization interaction (4,55), while Wunderland Kalkar scores highest on customer-to-customer non-verbal interaction (4,53) and lay-out (4,48). Preston Palace as well as Wunderland Kalkar score lowest on customer expectations, respectively 3.80 and 3.57. On average, Preston Palace scores higher in comparison with Wunderland Kalkar. Nevertheless, the average scores for both all-inclusive hotels are high and the high score for the control question, meaningfulness of the customer experience, (respectively 4,27 and 4,07) underlines the statement of Van der Most Beheer B.V. that both hotels have high experiential content.
Table 4.2 shows the scores of the different service design variables per all-inclusive hotel in detail. Beside the means, both noted minimum and maximum score are reflected.
3 3,5 4 4,5 5
Variable
Resort
Preston Palace
Wunderland Kalkar
M
SD Min
Max.
M
SD
Min.
Max.
Emotions
4.18
.37 4.04
4.32
4.18 .46
4.01
4.35
Customer Expectations
3.80
.71 3.53
4.07
3.57 .68
3.31
3.82
Physical Environment
Aesthetics
Ambience (audio-visual)
Ambience (smell)
Equipment
Layout
4.22
3.88
4.55
4.39
4.44
.51
.73
.59
.45
.42
4.04
3.61
4.33
4.22
4.28
4.42
4.16
4.77
4.56
4.60
4.02
4.18
4.03
4.34
4.48
.64
.62
.77
.62
.49
3.78
3.95
3.75
4.11
4.29
4.26
4.42
4.32
4.57
4.66
Virtual Environment
Ease of Use
Website Aesthetics
Reliability
4.22
4.15
4.33
.58
.60
.66
3.99
3.93
4.09
4.43
4.38
4.58
4.03
3.83
4.33
.68
.91
.66
3.78
3.49
4.09
4.29
4.17
4.58
Customer-to-Customer
Interaction
Verbal
Non-verbal
4.10
4.48
.48
.53
3.92
4.28
4.28
4.68
4.33
4.53
.66
.54
4.09
4.33
4.37
4.74
Customer-to-Organization
Interaction
4.55
.44
4.39
4.72
4.31
.62
4.09
4.55
Loyalty
4.43
.50 4.23
4.62
4.18 .66
3.93
4.43
Meaningfulness of the Cust. Exp. 4.27
.79 3.97
4.56
4.07 .87
3.74
4.39
Table 4.2
Descriptives for variables for Preston Palace and Wunderland Kalkar
The standard deviation is a measure of the dispersion of a set of data from its mean. Generally, the more widely spread the values are, the larger the standard deviation is. As can be seen from table 4.2, the control question (meaningfulness of the customer experience), has the highest standard deviation at Preston Palace (.79) and the second highest standard deviation at Wunderland Kalkar (.87).
Respondents evidently have very different thoughts as it comes to the way they experience their visit. This fact underlines the need to gain insights on which service design variables really influence the customer experience and to what extent these service design variables determine the customer experience.
ANOVA
The null hypothesis is that respondents who visited Preston Palace do not differ in their opinion on service design variables compared to respondents at Wunderland Kalkar. This null hypothesis will be accepted when Sig. is greater than the chosen alpha level (Sig. > 0.01). On the other hand, the null hypothesis will be rejected (i.e. one concludes that respondents who visited Preston Palace differ in their opinion on service design variables compared to respondents at Wunderland Kalkar), if Sig. is smaller than the chosen alpha level (Sig. < 0.01).
As can be seen from table 4.3, 14 out of 15 variables are not significant (Sig. > 0.01) and the null hypothesis will thus be accepted: respondents who visited Preston Palace do not differ in their opinion on the service design variables compared to respondents at Wunderland Kalkar, except from one variable, namely: Physical environment_ Ambiance (Smell).
Variabele
df
F
Sig.
Emotions
1
.003
.96
Customer Expectations
1
1.682
.20
Physical Environment
Aesthetics
Ambience (audio-visual)
Ambience (smell)
Equipment
Layout
1
1
1
1
1
1.919
2.945
8.557
.128
.114
.17
.09
< .01
.72
.74
Virtual Environment
Ease of Use
Website Aesthetics
Reliability
1
1
1
1.255
2.511
.001
.27
.12
.99
Customer-to-Customer
Interaction
Verbal
Non-verbal
1
1
2.446
.130
.12
.72
Customer-to-Organization
Interaction
1
2.842
.10
Loyalty
1
2.462
.12
Meaningfulness
1
.876
.35
Table 4.3One-way ANOVA for the effect of all variables on Preston Palace & Wunderland Kalkar
following section, will be conducted for the combined sample (Preston Palace + Wunderland Kalkar).
4.4 Hypothesis testing
By means of hypothesis testing the second sub question - Q2. To what extent is the customer
experience in all-inclusive hotels determined by service design variables? - and third sub question - Q3. Which influence has the customer experience in all-inclusive hotels on customer loyalty? - can be answered. As section 4.2 revealed, the data in this study in not normally distributed, probably due to the small sample, and therefore an ANOVA analysis will be conducted. An extra regression analysis has been conducted, to found the results of the ANOVA analysis and to provide insights for further, normally distributed, research.
As the ANOVA analysis in section 4.3 justifies, the data of the two all-inclusive hotels (Preston Palace + Wunderland Kalkar) will be combined and analyzed. Moreover, more detailed results can be found in Appendix 4.
4.4.1 ANOVA analysis
Median split analysis will be applied and in combination with a one way Analysis of Variance (ANOVA), each of the hypothesized determinants of a meaningful customer experience will be analyzed. Following this approach, the analysis will be less sensitive to deviations from normality (Helmes and Jackson, 1982).
A median split procedure has been used, to divide the customers into two groups for each independent variable. All scores until the median were recorded as 'low', all scores higher than the median were recorded as 'high'.The median split was used for the independent variables (perceptions of the customers on the (sub) service design variables), while unsplit data was used for the dependent variable (meaningfulness of the customer experience). Levene's test of Equality of Error Variances was then used, to determine if there was equal variance between the two groups, as the ANOVA analysis assumes equality of variance (Sig = 0.01). All (sub) variables turned out to be insignificant, or in other words, for all (sub) variables there was equality of variance between the low score and high score group. After meeting the variance assumption, a one-way Analysis of Variance (ANOVA) was used, to verify whether customers who score low or high on the independent variable differ on their score on the dependent variable meaningfulness of the customer experience.
(Partial η2 ) was calculated, to determine the proportion of total variance (including error variance) in the dependent variable attributable to that independent variable (Pierce, Block & Aguinis, 2004).
H1. Positive customer emotions, will be positively related to a meaningful customer experience. The first analysis was conducted to determine whether positive customer emotions are positively related to a meaningful customer experience. First, customers who had a high level of positive emotions were compared with customers who had low levels of positive emotions. As can be seen in table 4.4, the median split procedure resulted in two equally sized groups.
Table 4.4
Emotions: low and high group descriptives
As can be seen in table 4.5, customers who scored low on emotions, score significantly lower (M = 3.70 , SD = .594) on meaningfulness of the customer experience than customers who had a high score on emotions (M = 4.63, SD = .556), F(1, 58) =27.795, p =.000. Based on the results of this study, positive customer emotions, are positively related to a meaningful customer experience and therefore H1 is accepted. Moreover, the relationship between the two variables seemed to be strong, as emotions explained 32% of the variance between customers’ experiences as indicated by the partial eta squared value for the ANOVA (Partial η2 ).
Table 4.5
Emotions: results ANOVA analysis
H 2. ‘Positive customer expectations, will be positively related to a meaningful customer experience’ The literature review revealed the positive relationship between positive customer expectations and the meaningfulness of the customer experience. As can be seen in table 4.6, in spite of the median split procedure, the distribution is still skew, as the low group contains fifty-two customers and the high group just eight customers. A first explanation for this fact could be the scale of customer
expectations, which contained only one question. However, as can be seen in table 4.7, with great care and caution, one could however suggest that customers who had low expectations, score significantly lower (M = 4.04 , SD = .8160) on meaningfulness of the customer experience than customers who
Variable
Meaningfulness of the Customer Experience
had high expectations (M = 5.00, SD = .000), F(1, 58) =10.960 , p = .002. The partial eta squared value for the ANOVA (Partial η2 ) suggests that customer expectations explained 16% of the variance between customers’ experiences, but this fact as well has to be interpreted with great care since the large differences in the two groups. However, because of the significant outcome, H2 is accepted.
Table 4.6
Customer expectations: low and high group descriptives
Table 4.7
Customer expectations: results ANOVA analysis
H3. Positive customer perceptions of the physical environmental context variables, will be positively related to the customer experience.
As the literature review and the factor analysis determined, the physical environment can be subdivided into five sub service design variables, namely: aesthetics, ambience (audio-visual), ambience (smell), equipment and lay-out. For all sub variables, a median split analysis was conducted and two groups were formed, a low groups and a high group. As can be seen in table 4.8, for all sub variables no group was under- or overrepresented.
Table 4.8
Physical environment: low and high group descriptives
As can be seen in table 4.9, customers who have experienced the physical environment as aesthetically low, score significantly lower (M = 3.86 , SD = .833) on meaningfulness of the customer experience than customers who experience the physical environment as aesthetically high (M = 4.63, SD = .576),
Variable
Meaningfulness of the Customer Experience
Low
High
N
M
SD
N
M
SD
Customer expectations
52
4.04
.816
8
5.00
.000
Variable
df
F
Partial
η
2p
Customer expectations
1
10.960
.16
.002
Variable
Meaningfulness of the Customer Experience
F(1, 58) = 15.263, p =.000. Aesthetics explained 21% of the variance between customers’ experiences as indicated by the partial eta squared value for the ANOVA.
Second, customers who have experienced the audio-visual ambience in the physical environment low, score significantly lower (M = 3.80, SD = .833) on meaningfulness of the customer experience than customers who experience the audio-visual ambience in the physical environment high (M = 4.68, SD = .476), F(1, 58) =22.556, p = .000. Audio-visual ambience explained 28% of the variance between customers’ experiences as indicated by the partial eta squared value for the ANOVA.
Third, customers who have experienced the smell as well as the lay-out in the physical environment low, do not score significantly lower on meaningfulness of the customer experience than customers who experience the smell in the physical environment as high ( F(1, 58) =2.609, p = .112 ; F(1, 58) =3.372, p = .071).
Last, customers who have experienced the equipment in the physical environment low, score significantly lower (M = 3.89 , SD = .843) on meaningfulness of the customer experience than customers who experience the equipment in the physical environment as high (M = 4.61, SD = .583), F(1, 58) =12.791, p = .001. Equipment explained 18% of the variance between customers’
experiences as indicated by the partial eta squared value for the ANOVA.
In short, three out of five sub variables of the physical environment turned out to be significant, namely: aesthetics, ambience (audio-visual) and equipment, whereas ambience (audio-visual) explained most of the variance between customers’ experiences (28%), followed by aesthetics (21%) and equipment (18%). H3is therefore partly accepted.
Table 4.9
Physical environment: results ANOVA analysis
H4. Positive customer perceptions of the virtual environmental context variables, will be positively related to the customer experience.
As the literature review and the factor analysis determined, the virtual environment can be subdivided into three sub service design variables, namely: ease of use of the website, website aesthetics and
website reliability. As can be seen in 4.10, no groups are under- or overrepresented, although for all variables the low-score group is larger than the high-score group.
Table 4.10
Virtual environment: low and high group descriptives
As can be seen in table 4.11, all three sub service design variables of the virtual environment are insignificant (ease of use of website F(1, 58) =5.225, p = .026., website aesthetics F(1, 58) =4.458, p = .039 and reliability F(1, 58) =3.313, p = .074). This means that customer who experienced the virtual environment as low, do not score significantly lower on meaningfulness of the customer experience than customers who experience the virtual environment as high. Even with a lower confidence interval (for instance 95%), these variables explained almost nothing of the variance between customer’s experiences, because of the low partial eta squared values. Based on these results, it can be concluded that H4 is rejected.
Table 4.11
Virtual environment: results ANOVA analysis
H5. Positive customer perceptions of the customer-to-customer interaction, will be positively related to the customer experience.
As mentioned in the literature review, customer-to-customer interaction can be divided into two sub variables, namely: verbal and non-verbal customer-to-customer interaction. As can be seen in table 4.12, the median split analysis for the non-verbal variable resulted in two similar divided groups, as the verbal variable has a slight overrepresented low-group.
Variable
Meaningfulness of the Customer Experience
Table 4.12
Customer-to-customer interaction: low and high group descriptives
As can be seen in table 4.13, customers who have experienced customer-to-customer interaction low (verbal as well as non-verbal), do not score significantly lower on meaningfulness of the customer experience than customers who experience customer-to-customer interaction high, (F(1, 58) =.114 , p = .736 ; F(1, 50) =1.403, p = .242. This result is underlined by the low values for the partial eta squared, which suggests that customer-to-customer interaction explains almost nothing of the variance between customers’ experiences.
The results of this study show that verbal as well as non-verbal customer-to-customer interaction have no significant influence on the meaningfulness of the customer experience, and therefore H5 is rejected.
Table 4.13
Customer-to-customer interaction: results ANOVA analysis
H6. Positive customer perceptions of the customer-to-organization interaction, will be positively related to the customer experience.
A strong positive relationship between customer-to-organization interaction and the meaningfulness of the customer experience has been reported in the literature review. As can be seen in table 4.14, the median-split analysis resulted in two equally sized groups.
Table 4.14
Customer-to-Organization interaction: low and high group descriptives
