Today, marketing can be characterized by a new trend that gains more and more popularity, whose supporters believe that the most sought-after products are not material values but emotions, impressions, and dreams. In modern society, consumers need more than just goods and services since they want to enjoy the process of their purchase. Accordingly, the consumption per se is likely to become more individual, which should be taken into account by the companies that pursue the idea of keeping their customers engaged (Mcintyre, Melewar & Dennis 2016). It is important to understand how Servicescape, the physical environment, affects customer responses and their willingness to buy products and services. This paper aims to explore the ways Servicescape impacts customer experiences and the process of value co-creation. It is hypothesized that atmospherics is an essential part of any interaction between a customer and frontline employee, resulting in the creation of a space for value co-creation as a mutually beneficial process.
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Potential of Servicescape to Provide Value Co-Creation
Identifying the Links Between Servicescape and Value Co-Creation
While the available academic literature does not directly identify the correlations between value co-creation and Servicescape, it is possible to provide some relations between these issues. In order to better comprehend the role of Servicescape in marketing, it seems to be important with its definition. The concept of Servicescape refers to the integration of landscape and service that shape the physical environment in which customer experience occurs (Chang 2016; Bitner 1992). The furnishing, machinery, equipment, navigational signs, and any other elements along with their colors, shapes, sizes, and spatial relationships design the environment. The traditional approach to Servicescape views a customer as a passive recipient of the spatial layout, while emotions and cognitions are regarded as the outcomes (Lunardo, Roux & Damien 2016; Nilsson & Ballantyne 2014). However, a more recent approach implies that Servicescape provides the opportunity to establish interactive relationships between the members of the purchase. According to Pareigis, Echeverri, and Edvardsson (2012), the constellation of resources is used by both customers and employees yet with different purposes. If the customers conceive Servicescape and products as a whole, the employees are to distinguish between its various elements.
The impressions of a product or service are never abstract, and they do not arise on their own. Instead, they are sets of the accumulated emotions and cognitions of individual consumers, which are dynamic and collaborative in nature (Andersson et al., 2012; Dagger & Danaher 2014). When a customer learns or uses a product, he or she receives specific impressions, depending on their unique needs and preferences. The value proposition and value co-creation are the new trends in marketing and innovation management, which attempt to explain the links between customer engagement and cooperation. Based on the concept of Prahalad, value co-creation can be defined as the interaction of the company and customers, during which the participants’ resources are combined to cooperatively compose additional value (Pareigis, Echeverri & Edvardsson 2012). A client, in the broad sense, can be considered not only a direct customer but also a group, community, and even society as a whole.
The value proposition is a summary of product features that are of importance to a customer and that are promised to be delivered (Pareigis et al., 2012). From the admiration for the merits of the product, which is usually found in advertising, the value proposition is distinguished by a focus on a consumer. In terms of the mentioned concept, a product is considered as a set of benefits for the buyer, and this change in emphasis fundamentally alters the perception (Fernandes & Neves 2014). The value proposition creation is possible only if a company has an understanding of how the customer perceives certain properties of the product. According to Lunardo et al. (2016), there may be several value propositions, or they may be formulated differently for different customers, but without them, it is impossible to properly conduct marketing activities. Otherwise, the results of these activities will not be predictable in terms of specific returns because the value that one wants to sell is not entirely clear to target customers.
As a strategic task, the value proposition includes Servicescape and aims to shape customer behaviors and experience. The results of its implementation will directly affect the sales results of the given product through the impact on customers in the process of making a purchasing decision. As stated by Kaplan and Norton, sustainable value creation is closely associated with satisfying customer needs, balancing benefits and costs (Alcántara‐Pilar et al., 2017). The effective Servicescape is likely to promote the process of value co-creation through value proposition since customers would understand the advantages of purchasing the desired product in the given store or organization. For instance, the physical environment of a store can be designed in a way that translates some symbolic cues to reflect the distinctive features of the product. Accordingly, in the given case, Servicescape would act as a message-creating medium.
Understanding Internal Mechanisms of Servicescape
There is a range of internal mechanisms that identify how Servicescape affects customer responses and further experience. The key elements include a set of holistically designed environmental dimensions, a stimulus-organism-response (SOR) model, and experiences came. One should stress that these elements are useful to examine the specifics of using Servicescape in practice. The SOR model, for example, may be based on such environmental stimuli as lights, music, or service, which ultimately cause one of the two reactions of customers: approach or avoidance responses. In this connection, the stimulus is regarded as the internal (intermediate) variable that denotes a reaction, which is evoked by mental moments inaccessible to direct observation, such as expectations, attitudes, and knowledge. Alcántara‐Pilar et al. (2017) argue that internal processes, which are open only to self-knowledge, can be brought out and given their research the same accuracy as the study of any physical phenomena. In particular, the element of an organism is associated with emotional states, arousal, dominance, or pleasure.
In the context of value co-creation, customer behavior should be understood not as a chain of individual reactions but from the point of view of its holistic organization. In other words, a person builds a cognitive map of the path that must be followed to solve the problem, gradually mastering the situation. The customers are guided in situations to which they adapt due to the fact that it identifies certain signs associated with the choice point. At the same time, the awareness of the environmental stimuli equips companies with valuable information, allowing distinguishing between positive and negative issues that cause or impede the desired actions. In other words, any degree of complexity of perceptions or cognitions determines how people feel about a product or service in the given environment (Alcántara‐Pilar et al. 2017; Nguyen 2006; Rosenbaum & Massiah 2011). In case a stimulus triggers higher-level cognitions, it is more likely that the impact of setting would be more powerful.
The response of a customer to a particular stimulus composes the organism changes as well as cognitive conclusions that are usually made rapidly, which gives energy to the behavior and creates an invisible reaction potential. This potential is discharged with reinforcement, and then the reaction becomes fixed. In general, the formula can be presented as follows: stimulus – organism – reaction. The behavior begins with stimulation from the outside world or from a state of need and ends with a reaction. For example, it is suggested to use an effective method of influencing consumers, such as Benefit Reinforcement, which means giving importance to those benefits for consumers that is indicated in the value proposition statement (Kauppinen-Räisänen, Rindell & Åberg 2014). As a rule, these are customer reviews, awards, or likes of customers’ friends to the product. In general, all of the above is the practical part of creating an appropriate physical environment.
The servicescape model elaborated by Bitner (1992) involves three major components, such as ambient conditions, functionality, along with spatial layout and artifacts. The physical environment serves as a material component that visualizes the level, style, and quality of the service provided. For example, it is possible to use online platforms as a tool to promote technological solutions and products, which is an element of the marketing mix promotion. In the case of offline marketing, there are much more opportunities of impacting customers through setting: scents, music, size perceptions, temperature, and color schemes (Wattanacharoensil, Schuckert & Graham, 2016; Pizam & Tasci 2019). At the same time, equipment, facility, and furnishing compose a part of the physical environment of the company, which represents the spatial layout and provide various functions. By employing symbols, signs, and artifacts, a company not only promotes its products but also creates a unique image and guidance that also sends signals to customers and partners.
The notion of experiences came should also be clarified since it incorporates the idea of hospitality and a comprehensive approach to building relationships with customers. The five elements point to the key features of this concept: social, cultural sensory, functional, and natural (Lin & Worthley 2012; Payne, Korczynski & Cluley 2017). In other words, these elements serve as stimuli to shape the positive customer experience and employee perceptions through approach reactions. E-servicescape is a more advanced form of Servicescape that is presented on the Internet when the companies sell their products online (Wu, Quyen & Rivas 2017). Due to the limitations of this type of setting, auditory and visual cues become the main influence and response tools. The telepresence allows targeting particular groups of customers and meeting their needs in speed and comfort of providing products and services.
Combining Servicescape and S-D Logic
The classic marketing approach views customers as passive recipients of the value provided by the company. Currently, the focus in marketing has shifted from the product to the buyer, the buyer has appeared in the center of marketing, and the marketing of relations has begun to gain popularity. The most widely customer-oriented service approach is presented in the studies of Vargo and Lash, who argue that marketing is currently developing in the direction of a new logic from the good dominant logic (G-D) to service-dominant logic (S-D) (Girard et al. 2016; Fernandes & Neves 2014). In marketing, the company focuses on existing and potential customers, customer communities in networks that enable value creation together. The dominant service approach implies that the service (service) is the main goal of the exchange between the company and the buyer; the value is created jointly as a result of interaction between the company, the consumer, and other interested parties. Co-creation of value occurs as a result of the participation of the buyer, whose behavior transforms the customer experience in a unique way.
In implementing a customer-oriented strategy, relationship management is not a function of one separate unit but for the basis for designing the company’s business processes and an integral part of the company’s corporate culture. Wetter-Edman et al. (2014) put forward the thesis that a properly built network of relations inside the company becomes a decisive competitive advantage and leads to success. The strategic role of the service environment, in this connection, acts as an integral part of value co-creation. The customers and employees who communicate in properly designed settings exchange information and accumulate it, which can further be used by a company for improvements. Accordingly, the customers share the issues that they consider valuable, thus facilitating the processes of positioning, packaging, and delivery of products and services.
Building processes with client engagement creates new opportunities for ensuring the flexibility of the company in a competitive environment and a quick response to the emerging challenges of the market field for the development of customer-oriented service. The changes occur as consumer information accumulates and processes, gradually turning into a corporate knowledge system of the company (Ardley & Chen 2017; Lugosi 2014). In turn, Servicescape, being a source of progressive changes, becomes important know-how that sets the company apart from its competitors. The results of the study by Carù and Cova (2015) demonstrate that the problems of improving the competitiveness of organizations can be successfully solved by enhancing the processes of interaction with customers, during which consumer values are created. Improving the processes, in this case, can be carried out taking into account the consumer perception of these processes, thus contributing to achieving higher customer satisfaction with the service provided. However, it is emphasized that in order to establish and develop long-term and mutually beneficial relationships between a company and customer, it is necessary to ensure the satisfaction of both parties involved in the interaction.
Exploring Role of Employees in Servicescape
While discussing the contribution of customers to value co-creation, the role of employees is often underestimated. Kearney, Coughlan, and Kennedy (2013) state that internal marketing should perceive frontline employees as customer-conscious employees, who are the people that either prove or deny the promises provided by external marketing. Servicescape implies that attention should be paid not only to customers but also employees, whose interaction contributes to the process of value co-creation. The literature on internal marketing shows that employees can also be considered as internal customers, and their satisfaction largely determines that of customers. The employees deliver the company’s image and ensure a high quality of products and services, which impacts how customers view the organization in general. For example, if an employee is rude, tired, or not engaged in selling, it is unlikely that the profit of this store would be high.
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While external marketing makes promises, the interactive form of marketing implies that the employees are expected to keep these promises via communication with customers. A well-designed and attractive physical environment not only motivates employees to work better but also helps in retaining talented personnel and developing their skills and knowledge. The key idea is that the creation of an appealing atmosphere with proper lighting, music, and scent should portray the corporate image. Brand value communication occurs mainly in the course of the direct communication between customers and frontline employees. Kearney, Coughlan, and Kennedy (2013) distinguish between several indicators that point to successful employee engagement in value co-creation. The desire to physically stay in the store and communicate with personnel, as well as the intent to explore the products, demonstrate that Servicescape is effective in the given store.
To conclude, a number of conclusions and patterns discussed in this paper have theoretical and practical significance, which is relevant for marketing and management fields of knowledge. In particular, a proper focus on Servicescape in terms of value co-creation that is aimed at creating a preferred consumer perception by improving interaction processes can be effective in the management of the customer-oriented company, regardless of their industry sector. In addition, it is fundamentally important that the use of the interaction marketing complex should not be limited only to situations of interaction between the organization and the consumer. Instead, it can be recommended to pay attention to both employees and customers, the interaction of whom promotes value co-creation and leads to the satisfaction of both parties.
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