Customer Satisfaction Study For Karaoke Box Services Cape

Customer Satisfaction Study for Karaoke Box Servicescape
Marketing Research 1
Abstract
With the growing need for entertainment in this jet age, several new forms, modes and
establishments of entertainment are cropping up all around the globe. Music which has
been a source of entertainment since times immemorial has taken up the form of ‘sing-
along’ or karaoke box business. Karaoke is one of the most important and popular
entertainment in Hong Kong. Since it is a kind of high customer involvement service, its
facilities play an essential role in customer service encounter and satisfaction. With limited
researches done on understanding the impact of the dimensions servicescape on customer
satisfaction and with hardly any research that studies the aspects of karaoke box
servicescape and the resulting customer satisfaction, this study was the opportunity to look
into these aspects afresh. This research is first to investigate affect of the dimensions of
karaoke box servicescapes affect customer satisfaction. It also helps us to understand
relationship between the two plausible expectations from a satisfied customer that is,
desire to stay for longer duration at the service setting and repatronage intentions.
The purpose of this study is to determine the relationship among karaoke box
servicescapes and customer satisfaction along with the desire to stay for longer duration at
the service setting and repatronage intentions. In this study, Neway Karaoke Box was used
as an example because of its popularity and dominant role in the industry. A framework of
servicescape dimensions that had a possible affect on customer satisfaction was developed
which divided the servicescape into four dimensions. They were Ambient Conditions,
Spatial Layout and Functionality, Signs, Symbol and Artifacts and Cleanliness. The results
discovered that all dimensions of servicescapes have a positive effect on customer
satisfaction with Cleanliness having the greatest impact. From the study it was also found
that customer satisfaction led to increase in repatronage intentions as well as the desire to
stay for longer duration at the service setting. Finally, implications and recommendations
were discussed based on the findings in order to improve Neway Karaoke Box service
offering. Most importantly, this study is a starting point for further research on karaoke
box servicescapes.
Acknowledgement
I would like to take this opportunity to express my greatest appreciation to my supervisor,
Ms. Greenie Ha, for her valuable advices and guidance given. Her promptly reply, even
when she is in maternity leave, really contributes to the progress of my project a lot. Her
kindness and patience support me to strive for the best of my report.
A great credit should also go to Dr. Noel Siu for her advices during my supervisor
maternity leave. Her expertise in Services Marketing provides me a lot of insights for
deciding my research topic.
In addition, I appreciate whole-heartedly for the help of focus group participants and for
the support and care of my friends, especially for those who accompany with me to do
observation and teach me how to make my project better.
Lastly, I sincerely thanks for my parents love and care.
Table of Contents
Contents Page
Abstract 2
Acknowledgments 4
Table of Contents 5
1. Introduction 8
1.1 Rationale 9
1.1.1 Project Aim 11
1.1.2 Project Scope 12
1.1.3 Structure of Dissertation 12
1.2 Industry 13
1.2.1 Services Industry 13
1.2.2 The Origin of Karaoke Industry 16
1.2.3 Background of Neway Karaoke Box 19
2. Literature Review 20
2.1 Servicescapes 20
2.1.1 What are Servicescapes? 21
2.1.2 Elements of Servicescapes 25
2.1.3 Application of Servicescapes 29
2.2 Customer Satisfaction 32
2.2.1 Importance of Customer Satisfaction 47
2.2.2 Elements of Customer Satisfaction 50
2.2.3 Physical Environment 53
2.2.4 Direct and Indirect Influence of Servicescapes 55
3. Research Methodology 57
3.1 Research Objectives 57
3.2 Research Questions and Statements of Hypotheses 58
3.3 Sampling 64
3.4 Research Method 65
3.5 Rationale for Selection 67
4. Analysis and Findings 68
4.1 Factor Analyses 68
4.2 Regression Analyses 78
4.3 Derivation of Relationships and Correlations 82
4.4 Findings and Discussion 89

5. Conclusion and Recommendations 92
5.1 Conclusion 92
5.2 Recommendations 93
5.3 Limitations 96
5.4 Further Use of the Research 97
References 100
Appendix - Questionnaire 109
Table List
[Table 1] The Servicescape Dimensions for a Service offering 16
[Table 2] Conceptual and Operational Definitions of Customer 33
Satisfaction
[Table 3] Factors Extracted for Servicescapes 69
[Table 4] Factors Extracted for Customer Satisfaction, Desire to Stay 76
for Longer Duration and Repatronage Intentions
[Table 5] Relationship between eight Dimensions of Servicescape and 79
Customer Satisfaction
[Table 6] Relationship among Eight Servicescapes Dimensions and 80
Repatronage Intentions
[Table 7] Relationship among Eight Servicescape Dimensions and 81
Desire to Stay for Longer Duration
Demographic and Consumption Characteristics of the 83

[Table 8]
respondents
Correlation between Customer Satisfaction, Repatronage

88
[Table 9]
Intentions and Desire to Stay for Longer Duration
Figure List
[Figure 1] Representation of Factors affecting Consumer Perceived 23
Servicescape
[Figure 2] Servicescape Typology (by Wakefield and Blodgett, 1994) 29
[Figure 3] The Servicescapes Evaluation Process by a Customer 31
[Figure 4] Approach to Customer Satisfaction 43
[Figure 5] Successful Product or Service Offering 49

[Figure 6] Elements of Customer Satisfaction 53
[Figure 7] Hypothized Model 62
[Figure 8] The Factor Means for Different Factors of Servicescapes 72
[Figure 9] The Factor Means of Different Factors on Customer 77
Satisfaction, Desire to Stay for Longer Duration and
Repatronage Intentions
[Figure 10] Gender Distribution 85
[Figure 11] Age Distribution 85
[Figure 12] Monthly Income Level 86
[Figure 13] Patronage Frequency per Month 86
[Figure 14] Time Slot Patronage 87
[Figure 15] Duration of Visit during Patronage 87
[Figure 16] Representation of Factors affecting Consumer Perceived 90
Servicescape as obtained from the Study
1. Introduction
This section is an attempt to collaborate the rationale that drives the research, the project
aim, scope, and limitations. This section introduces the structure of the dissertation, the
description of the service industry, servicescapes and the Karaoke business. In his work
reflecting the impact of servicescapes on customers and employees, Bitner coined the
phrase “Servicescape” and pointed out the importance of physical surroundings as a
facilitator of service experience and enhanced customer satisfaction (Bitner, 1992).
There have been several researches and studies done in the past which have focused on the
advantages that a service provider can have by providing a good service offering to its
customers and well executed training to its employees and staff to improve the motivation,
productivity and on job performance. There has been some focus in the area of
improvement of service encounters as well, to increase sales, profitability and customer
satisfaction. Also, the intangible aspects of a service offering have been looked into which
might have certain influence on a customer’s perceptions about a service and thereby
affect the satisfaction and dissatisfaction images of the service as well as the service
provider. However, very little emphasis has been placed on studying the impact of the
intangible aspects of a service offering along with the impact of servicescapes on a
customer’s ability to perceive and evaluate a service offering or a service setting. Kotler
(1973) noted servicescapes as one of the most significant physical apparatus of a service
product that presented customers with indications about the offering and helped to create
‘an immediate perceptual image in the mind of the customer’. During the evaluation
process of intangible products (that is, services), a customer is highly dependent on the
way a service setting or the servicescape appears, that is, a customer’s evaluation process
of a service is mostly influenced by the appearance and external impressions created by
the servicescape of the service (Levitt, 1981). A customer’s very first impression about a
service offering is dependent on the physical evidences of a servicescape that a service
provider offers and it goes a long way in creating the expectation level and thus the levels
of satisfaction and dissatisfaction. For example, in the entertainment industry like the
karaoke box service offering, there is a high degree of intangible aspects involved like the
appearance of the building architecture, interior decorations, lightings, etc. which help a
customer to evaluate and judge such an offering. Thus, servicescapes in this scenario form
not only an intricate part of a customer’s process of impression formation, but also, acts as
a vital source of substantiation in the overall appraisal of the servicescape, the service
offering and the service provider.
1.1 Rationale
With the present day life assuming endemic proportions of busy lifestyle be it from work,
study or any other aspects, it has become a constant struggle to find some time to entertain
and enjoy oneself. Leisure activities have started to play an important role in people’s lives
in today’s world. The karaoke box entertainment option seems to be becoming the highly
popular choice of relaxation among teenagers in the recent years and getting people to
spend quality time with family or friends at the karaoke box is becoming a business that
many would like to invest in. A karaoke box is an establishment with many individual
rooms for customers to enjoy singing without being bothered by others and enjoy the
much needed privacy that one would like. Part of the services is regarded as self-service
because customers need to participate in enjoying the karaoke experience such as selecting
the songs by themselves. Therefore, pleasant and easy to use facilities are being offered in
this high customer involvement service offering of karaoke box with emphasis on related
servicescapes. This study is an attempt to identify the satisfaction level of customers of
karaoke box towards the karaoke box servicescapes and the role that such a unique
servicescape can play in generating greater customer satisfaction thereby determining their
motivation for repatronage.
As Taylor et al. (1993) pointed out in their study that very little research has been
conducted in the area of leisure services and the relevant servicescapes for such services.
Researchers have spent substantial research efforts on understanding exchanges which
primarily provide utilitarian satisfaction, but have had little research going in the field of
products or services which are consumed by customers for more hedonistic purposes
(Babin et al., 1994) for extended periods of time (e.g. Arnould and Price, 1993; Price et
al., 1995). Bitner (1992) pointed out that managers continually plan, build, change, and
control and organization’s physical surroundings, however the impact of a specific design
or design change within a servicescape setup on the actual users of the facility is not
completely understood.
With a large chunk of studies focusing on human interactions such as those between
customers and providers, and customers with other customers (Gremler and Gwinner,
2000), the impact of servicescapes in service offerings is less understood and most often
ignored. Furthermore, servicescapes of karaoke box has not been used as an example of
the relationship between servicescapes and customer satisfaction in previous researches
which gives us with a completely new avenue of research. A study on karaoke box
servicescapes will help to understand the role of the various leisure facilities provided by
an organization, especially the servicescape of a karaoke box and see how these facilities
help to retain and attract customers for the organization. Also, this study will attempt to
show how servicescapes influence customer satisfaction, especially in the context of
karaoke servicescape.
1.1.1 Project Aim
The major issue with marketing services has been the focus on service quality and the
derived satisfaction from the primary service provided by the firm. Little has been done to
understand the effect and role of the physical ambiance of the service setting and its
impact on customer satisfaction. The research is aimed at gaining an understanding of the
importance of servicescapes and the role played by servicescapes in establishing
behavioral and affective customer responses to the karaoke box service.
The research aims at investigating the customer satisfaction level to different kinds of
servicescapes, such as ambient conditions, spatial layouts and functionality, signs, symbols
and artifacts, and cleanliness, in regard to a karaoke box servicescape. The customers’
subsequent ‘repatronage intentions’ and ‘intentions to stay’ will also be examined. Curial
servicescapes of the karaoke industry, which are used, seen or felt directly by the
consumers, and have high influence on customer satisfaction will be determined so that
the business using a karaoke box servicescape can focus on it and take steps to develop
such servicescapes further. How the physical evidence that forms a part of the
servicescape impacts the perceptions of the customers, builds customer satisfaction and
enhances repatronage intentions of the service will be studied for the Neway Karaoke Box.
Recommendations are provided to improve the dissatisfaction with such existing
servicescapes for future improvements and for further research to gather greater evidence
relating karaoke box servicescape to customer satisfaction and retention.
1.1.2 Project Scope
The research scope is limited within the constraints of data availability, past researches as
well as geographical, cost and time constraints. The period between which the literature is
reviewed ranges from 1955 to 2009. The geographical scope is limited to the users of
Neway karaoke box servicescape in the Causeway Bay Plaza and Mongkok Argyle Centre
which have the busiest traffic of karaoke servicescape customers; Shatin Belair Garden
and Aberdeen Centre which are located in the new territories and suburban residential
areas. The time scope has been limited to a research period of 30 weeks. The number of
customers who had been administered the questionnaire had also been limited to comply
with the constraints of budget and time.
1.1.3 Structure of Dissertation
The dissertation has been organized in a way that helps to not only highlight previous
works on servicescape and customer satisfaction but also discusses about the service
industry and the karaoke box servicescape and its origin and highlights the background of
the market leader in providing karaoke box servicescape.
The dissertation begins with the discussion around the rationale, project aim, scope and
limitations, followed by brief introduction to the various topics related to service industry,
karaoke box servicescape and the Neway Karaoke Box business. This introductory section
is then followed by the research methodology discussion, which highlights the research
objectives, questions, sample size, research methods used and a rationale for the use of
specific research methods. The third section of this dissertation focuses on literature
review to emphasize in the understandings about servicescapes, elements of servicescapes
and applications of servicescapes. It also delves into understanding customer satisfaction
from various perspectives with focus on services. This section looks at understanding the
elements of customer satisfaction, role of physical environment in creating customer
satisfaction and the direct and indirect influences of servicescapes in creating and retaining
customer satisfaction. The penultimate section of this dissertation lists the various data
analysis methods used to analyze and comprehend the data that is obtained from the
questionnaire administration to various karaoke box servicescape customers. It highlights
the findings and discusses the significance of each finding with regard to generation,
growth and retention of customer satisfaction. Finally the last section lists the conclusion
for the research, the recommendations or suggestions that can be made based on this
research, the limitations that were faced while conducting this research and the further use
of this research and scope of future related researches that will help to better understand
the role of karaoke box servicescape in customer satisfaction.
1.2 Industry
This section is an attempt to define, understand and highlight the service industry, the
origin of the Karaoke business and a concise background of the Neway Karaoke Box
business. The aim is to identify the key drivers of the business and the key elements within
the service industry that leads to customer satisfaction and may have an impact on the
‘repatronage intentions’ and ‘intentions to stay’ of the customers of the Karaoke box
servicescape.
1.2.1 Services Industry
With the growing importance of the services industry in the past few decades, it has
become as indispensable as the product industry. Today, every company is aiming to
provide not only high quality products, but also excellent services that can match these
products. Therefore, services have come to be acknowledged as critical parameter for all
businesses and the quality of services being provided by the organizations in the service
sector is gaining in importance for the academicians and marketing managers. Currently,
services have become a way to differentiate and prove a firm’s offerings to be above the
competitive clutter and most of the firms are putting in a lot of effort to enhance their
service quality that will help them to differentiate themselves from competition and create
a niche for themselves. For example, several department stores or fast food restaurants
have started to provide home delivery service along with the sale of grocery or food items
and many retail stores have been focusing on training their staff, especially the first line of
employees or customer service representatives to be polite and cordial to every customers
so that these customers will have a good experience of their patronages.
The scope of services have come a long way from being regarded as merely the tertiary
industry, and playing second fiddle to production of goods and the primary industry of
agriculture, mining, etc. The concept of servicescapes in a service industry is characterized
by the feature of the servicescapes to create a closeness of interaction between production
and consumption. The provision of services now extends beyond simply the service
industry and is typified by the high degree of information content, intangible character of
output and tremendous emphasis on the human labour involvement in delivery of services
(Sirilli and Evangelista, 1998). Earlier, the services sector was thought to be a sector with
limited potential for growth, productivity or innovation, limited dependence on
technology, and fairly underdeveloped institutional setup. With the mechanization and
mass production scenarios plaguing the production of goods and dwindling of geographic
distances, it became imperative for businesses to distinguish themselves from their
competitors around the world through use of innovative servicescapes that enhanced and
created customer satisfaction.
It is important to understand that in the present day concept of goods provider and
consumer, the services of the service sector are no different from the servicescapes that
goods providers provide to their customers to make the buying experience a highly
pleasant one. One needs to understand that the intangible nature of the services provided
through highly engaging servicescapes cannot always guarantee the value being perceived
by a customer. The investments into developing a servicescape as a buying experience
enhancer cannot determine customer satisfaction or the role of these servicescapes in
customer retention. Use of technology and constant innovations has formed a critical
aspect of service industry and the development of servicescapes. Use of servicescapes to
emphasize on differentiation and create brand recognition among customers is becoming
increasingly part of the selling process and karaoke boxes being used as a part of
servicescape is no exception to the rule.
The table below lists the servicescape dimensions for a service.
Table 1: The Servicescape Dimensions for a Service offering
Servicescape Dimensions Other Tangibles
Facility exteriors Facility Interiors
Stationary, Billing Facility,

Interior Design and Layout,
Design, Signage, Parking,
Employee Uniforms, Web
Equipment Quality, Signage,
Landscape, Concierge
Pages, Booking Services,
Air Quality, Air
Service, Building Aesthetic
Information Brochures, etc.
Temperature, Lighting,
and Architecture, etc.
Odor, etc.
1.2.2 The Origin of Karaoke Industry
The word “karaoke” come from a abbreviated compound Japanese word and can be
broken up into two parts ‘kara’ or ‘karappo’ which means empty and ‘oke’ or ‘okesutura’
meaning orchestra, that is, ‘karaoke’ would mean empty orchestra or music without words
or music without lyrics. The Japanese word “karaoke” is now listed not only in Japanese
dictionaries but also in the Oxford English Dictionary. Typically, popular music would
consist of vocals as well as accompaniment and are sold as recordings on tapes, compact
discs, etc. With the invention of karaoke, music tapes with only the accompaniment minus
the lyrics are being sold along with equipments for ‘singing along’ with the music. The
concept of karaoke as an entertainment source started at a snack bar in Kobe City in Japan.
As the legend goes, the bar owner thought out a unique idea of getting his vocalists to sing
along with recorded music when his one of his musician (guitarist, to be specific) failed to
show up for work. This trend soon caught up with customers joining in to try their vocal
chords on the music being played and this incident might have been the precursor of the
present day commercialized karaoke box business. To begin with, during the early days of
karaoke business, the entertainment aspect was only suitable for recreational facilities at
bars, clubs coffee joints, etc. since the sound proofing in most of the houses in Japan
wasn’t sufficient to ensure privacy without really disturbing the neighbors. This led to the
opportunity for many business entrepreneurs to seize the tide of popularity of the karaoke
box business and come out with the option of joints with sound proof rooms where a
customer could sing to his heart’s content without really disturbing anyone else. Thus, the
very first karaoke box was established in 1984, in a countryside rice field of Okayama
Prefecture, west of Kansai. Karaoke is a typical form of entertainment for Japanese
business people. They drop into bars with colleagues after work, and enjoy singing
popular songs. Though the initial use of karaoke developed as an entertainment asset for
business men, with the growth of technology and advancements in facilities, the ‘karaoke
box’ business have become a source of entertainment for everyone and anyone who likes
to try his or her vocal chords to pre recorded music. There are several nomenclatures for
karaoke boxes used all over Asia. In Japan and Hong Kong, a karaoke box establishment
is essentially known as “Karaoke Box” such as the Neway Karaoke Box, the Green
Karaoke Box, the Red Karaoke Box, etc. In Mainland China and Taiwan, the business
concept is known as KTV or Karaoke Televisions (due to the use of video and video-
graphic themes along with the option of singing to a recorded music). It is known as
‘Videoke’ in Philippines and ‘Noraebang’ in South Korea and more often than not simply
known as ‘K’ all over Asia. Karaoke box or rooms with karaoke facility has been
entertaining people ever since its invention 20 years ago, and has become firmly
established in Japanese society, going far beyond just a temporary room or service
provision. Karaoke boxes are generally multiple rooms with karaoke equipments that help
people to sing along with a pre recorded music track of a popular song and is generally
rented out to customers for specific periods of time. A karaoke box business would ideally
have 10 or more karaoke rooms along with a main foyer or a ‘karaoke bar’ at the front of
the establishment with the provision for paid refreshments for the customers such as
drinks, packaged snacks, tobacco assortments, etc. Karaoke was born in a night
amusement quarter at the end of the high economic growth period. Since karaoke boxes
are closed-door facilities, they also have become an object of public concern as potential
havens of misdeeds among young people. On the other hand, however, since a lot of
families enjoy singing together in karaoke boxes, the karaoke box also plays the role of a
place for family communication, get together and entertainment through singing. The
popularity of karaoke boxes have invaded all spectrums of the society to included people
from every generation, either gender, every social class or every age and income group.
The patrons of karaoke boxes can be house wives, high school or college students, female
office goers, retired family man, just about anybody. The technological innovations in the
form of laser disks, video disks, compact disks, CD graphics, etc. have made it possible
for this business to grow into a major entertainment business, not only limited to night
spots, bars or cafes but reach into the homes (with the help of ‘family-use karaoke sets’)
and into the everyday life of music lovers across the continents. In recent times, the
karaoke boom has spread all around the world and the service is enjoyed not only in Korea
and China but also in Southeast Asia, the United States of America and Europe.
Karaoke box industry became very popular since the early 1990’s in Hong Kong (Neway
Karaoke Box, n.d.a.). Many citizens in Hong Kong spend a considerable amount of time
in karaoke boxes (Chow and Lui, 2002). Singing in the Karaoke box is regarded as a
leisure activity among these citizens in Hong Kong. The main target segment of karaoke
box is teenager. However, other age groups like middle age and mid to high income level
people are also the possible target segments for the karaoke box service.
1.2.3 Background of Neway Karaoke Box
Neway Karaoke Box, which was founded in 1993, has been selected for this study due to
its position as the market leader in the karaoke box service industry. It enjoys 60 percents
of market share and operates more than 20 branches in busiest traffic areas such as
Mongkok and Causeway Bay, along with new territories and other suburban residential
areas. The mission of Neway Karaoke Box is to expand its karaoke business and bring
healthy and salubrious entertainment to the community. Therefore, Neway constantly aims
at not only making karaoke the most desired entertainment activity in Hong Kong, but also
highlights its role in developing a healthy society by organizing many activities that
benefits the community such as awards for advocating educational studies for young
people. (Neway Karaoke Box, n.d.a.)
2. Literature Review
The section of literature review attempts to understand the various dimensions of
servicescapes, its elements and applications in rendering services to the customer and
creating customer satisfaction. This section also looks at customer satisfaction especially
with regard to the services, the importance of customer satisfaction, elements of customer
satisfaction, role of physical environment in services that enhances customer satisfaction
and finally, the direct and indirect influences of servicescapes that lead to, enhance and
sustain customer satisfaction for the service of Neway Karaoke Box business.
2.1 Servicescapes
As services are produced and consumed simultaneously (Gronroos, 1984; Langeard et al.,
1981;, Paresuraman, Zeithaml and Berry, 1985), customers are “in the factory,” often
experiencing the total service within the firm’s physical facility. The factory, or the place
where the service is produced, cannot be hidden and may in fact have a strong impact on
customers’ perceptions of the service experience (Bitner, 1992). Since services are
intangible and usually cannot be tried prior to purchase, consumers commonly look for
cues about the firm’s capabilities and quality (Berry and Clark, 1986; Langeard et al.,
1981; Shostack, 1977). The physical environment of a service is rich way of providing
such cues (Rapoort, 1982) and may be very influential in communicating the firm’s image
and purpose to its customers. Thus, creating interest in the service and the firm, purchase
intention for the service and expectations for the customer that go on to enhance customer
satisfaction from a service provided by a firm or business. Booms and Bitner (1981)
defined physical evidence for a service as the environment in which a service is pull
together and its forms the space where the seller and the buyer or customer interact, along
with the combination of tangible goods that make possible the ability of the seller to
perform and provide and communicate the service to the customer or buyer. Physical
evidences for a service are in fact a combination of servicescapes and tangible products
that combined together in the right mix allows the performance of a service.
The leisure and entertainment services in particular are dependent on a business’s ability
to relate to and understand the way in which both potential and existing customers
perceive quality and value of the servicescapes provided to them before, during and after
the performance of the service. Especially for these kinds of services, the understanding of
the effects that servicescapes have on customer satisfaction and customer repatronage is
crucial to the success of the service. Investigations into the service outcomes and
interactions between different elements of servicescapes such as excitement, crowding,
involvement, noise levels, etc. help to gauge the levels of customer satisfaction associated
with services such as the karaoke box business.
2.1.1 What are Servicescapes?
Servicescapes refer to the environments in which services are delivered and where the
firm and customer interact (Bitner, 1992; Zeithaml and Bitner, 1996). Physical evidence
such as environmental design, décor, signage, and business cards/stationery send messages
that help to establish the firm’s image and influence the customer’s expectations (Baker,
1987; Booms and Bitner, 1982; Shostack, 1977). Servicescapes are more or less
consciously designed places, calculated to produce commercially significant actions and
sites for commercial exchanges. Research suggested that the variations in physical
environment can affect perceptions of an experience independently of the actual outcome
(Biggers and Pryor, 1982; Maslow and Mintz, 1956). It can aid or hinder the
accomplishment of both internal organizational goals and external marketing goals
(Bitner, 1992).
Servicescapes also plays a multifaceted role within the service encounter as package,
facilitator, socializer, and differentiator (Zeithaml and Bitner, 1996). As differentiator, the
servicescapes may distinguish the firm from its competitors via architectural styling to
convey the type of service it provides, or it may alter the servicescapes to reposition itself
to attract more desirable market segments (Hoffman and Bateson, 2002; Zeitharml and
Birtner, 1996). So, Bitner (1992) suggested that perceptions of the servicescapes may
simply help people to distinguish a firm by affecting how it is categorized. Based on
Bitner (1992) research, servicescapes consist of three components which are facility
exterior, facility interior and other dimensions. The factors that influence the perceived
servicescapes experience for a customer is depicted below in the form of a figure which
suggests the interactions and interplay between the various factors that affect a
servicescape experience (Tripathi & Siddiqui, 2008).
The diagram below is a schematic representation of factors affecting customer’s
perception of a servicescape.
Figure 1: Representation of Factors affecting Consumer Perceived Servicescape
Consumer Perception of
Servicescape
Ambient Factors Design Factors (Facility Social Interaction Factors

(Facility interiors) Exteriors) (Other Dimensions)
Temperature
Odor Serviceable
Customers
Noise Factors
Music
Air Quality
Sound System Visual Employees
Seating Factors and Staff
The servicescapes have come to form an essential part of a service offering due to its
ability to elicit an emotional response from a customer towards the perceptional image or
impression of a service, thereby aiding in the evaluation or actual assessment of a
particular service environment and service offering. According to Schiffman (2001), a
customer’s perception of a servicescape can be seen as a function of different input source
which range from the environment to a customer’s own inclinations, expectations,
motivations, and knowledge gathered from previous experiences. The various sensations
and stimuli received from different input sources of a servicescape, then come together to
form an emotional response and perception representation of the whole service offering
and determine the customer’s behavior and experience of satisfaction, pleasure, etc.
(Schiffman and Kanuk, 1978). For example, a customer’s perception of the lobby of a
karaoke box tend to include different visual elements such as the front desk, area
carpeting, entry foyer arrangement, floors, lighting, furniture, displayed artworks, posters,
logos, color of the walls, arrangement of flowers, employees and other customers, etc.
The olfactory and auditory sensory inputs such as music, noise levels, scents and odors,
etc. also contribute to the customer’s evaluation process of the karaoke box lobby and
helps him or her to form an image of the service he is about to receive. This goes a long
way in setting up the stage for determining the satisfaction levels. Moreover, a customer
would also include the sensory inputs from the exterior décor such as the exterior
architecture, neighborhood and location of the karaoke box along with the interior décor
stimulus to form the complete picture of the service.
Servicescapes play a highly significant role of moderating the association between a
customer’s preconceived notions or expectations from a service preceding his actual
experience with the servicescape and his ultimate evaluation of the service during and
after the consumption process. For example, if a person chooses to have dinner at a fine
restaurant, he will have preconceived expectations about the service in terms of the food,
the servicescape (such as decorations, seating, lighting, etc.), attendants’ service, etc. If
there is congruency or similarity between his or her preconceived notions or expectations
of the service, and his / her actual experience of the service, his or her overall impression
about the offering and the service provider will be highly positive leading to satisfaction
and most probably repatronage intentions. However, if a customer’s preconceived notions
or expectations about the service are not similar or in-congruent to his / her actual
experience of the service, his or her overall impression about the offering and the service
provider will be negative leading to dissatisfaction and probably there will not be
repatronage intentions. Thus, it is important to have a holistic focus on a customer’s
evaluation process of every aspect of a service offering along with the influence that the
interior and exterior attributes of a servicescape have on a customer’s behavior. A
research should be so designed as to analyze the influence of the exterior elements (such
as architecture) and the general course and blueprint of a servicescapes’ interior elements
(such as signs and symbols, artifacts, etc.) on a customer’s perception of a service offering
and the consequent level of satisfaction generated after actual experience of the service
offering. Thus, the interior as well as the exterior décor of the karaoke box helps a
customer to determine the style and image of the physical environment of the servicescape
and consequently influence the customer’s evaluation of the service and the resulting level
of satisfaction or dissatisfaction.
2.1.2 Elements of Servicescapes
Servicescapes are generally an amalgamation of the physical, social and contextual
elements that help to differentiate between similar services provided by one service
provider and another. Referring to the typology of service suggested by Bitner (1992),
karaoke box belongs to the category of interpersonal services with lean servicescapes.
Selected aspects of Bitner’s (1992) servicescape framework, which illustrates the
relationship and effect of servicescape on customers’ behavioral response, will be used in
this research. The combination of “facilities interiors” and “facilities exteriors”
dimensions of servicescapes are thus divided into the factors listed below:
(1) Ambient Conditions (i.e. weather, temperature, air quality, noise, music, odors that
affects the cognitive and evaluation process of a service);
(2) Spatial Layout and Functionality (i.e. the way in which equipment and furnishings are
arranged, and the ability of those items to facilitate consumers' enjoyment of the service);
and
(3) Signs, Symbols and Artifacts (i.e. signage and decor used to communicate and enhance
a certain image or mood or to direct customers to desired destinations for facilitating the
service).
In self-service setting, which is a great part of karaoke box service, the creative use of
physical design could support particular positioning and segmentation strategies and
enhance specific marketing objectives, such as customer satisfaction and attraction
(Bitner, 1990). For interpersonal services, Bitner (1986) also suggested that both
organizational and marketing objectives could potentially be targeted through careful
design of the servicescapes. Hence, servicescapes of karaoke box play a critical role in
customer’s mind and it is worthwhile to study its importance.
The various cues that form a part of the servicescapes physical evidence for a service
offering include color, space, lighting, music, non musical sounds or noise, olfactory cues
like odors or aroma, etc.
- Color is one of the most apparent visual aspects of a servicescapes’ physical
evidence. According to Eiseman (1998), in a physical setting, especially in case of
interior facilities of a servicescape, colors are one of the most visual component
that help to elicit various kinds of emotional or psychological responses from a
customer.
- Lighting is another aspect of the physical evidence in a servicescape that provides
the perception of quality and definition for a space, influencing the emotional and
psychological responses of a customer. Light also helps in the perception of color,
form, texture, etc, of an enclosure or a space where the service is being offered
(Ching, 1996).
- The perceptions of space of a service setting in the form of furnishings, artifacts,
arrangement of furniture, etc. help to communicate a sense of corral and help to
convey the invisible or visible boundaries of the setting. For example, Ching
(1996) pointed out that high ceilings can communicate a feeling of spaciousness or
openness of the space, and low ceilings can suggest or signify intimacy or
coziness.
- Olfactory cues such as smells, odors, aromas all have been found to influence a
customer’s attention and desire for purchase or spending of money (Hirsch, 1995).
Hirsch (1995) found that effective odorant enhanced the desire of the casino
patrons to gamble.
- Music is the auditory component of a servicescape which has been found to have
positive as well as negative impact on a customer’s perception about a
servicescape and service offering. Music is also known to change of give rise to
emotional responses from a customer who might determine his levels of
satisfaction or dissatisfaction with a servicescape.
- Noise and loud sounds which form a part of non musical sounds also have an
impact of a customer’s perception about a servicescape and service offering.
Service can be described as intangible, heterogeneous, inseparable and perishable. Service
quality was first conceptualized and operationalized by Parasuraman, Berry and Zeithaml
in 1985 (Parasuraman, Berry and Zeithaml, 1985, 1988 and 1994). Customer service, and
service quality, is now a focus for many corporate or marketing strategy and high levels of
service are typically seen as a means for an organization to achieve a competitive
advantage (Lewis, 1993). Booms and Bitner (1981) propose an expanded marketing mix
for services consisting of the four traditional elements (product, price, place, promotion)
and three new elements which are physical evidence (the physical surroundings and all
tangible cues), participants (all human actors in the service encounter including firm
personnel) and other customers. Literature suggests that customer satisfaction depends
directly and most immediately on the management and monitoring of individual service
encounters (Parasuraman, Zeithaml, and Berry, 1985; Shostack, 1984, 1987; Solomon et
al., 1985; Surprenant and Solomon, 1987). According to Shostack’s (1985), service
encounter was defined as an “a period of time during which a consumer directly interacts
with a service”. His definition encompasses all aspects of a service firm including its
personnel, physical facilities and other tangible elements, with which the consumer may
interact during a given period of time. The physical elements of a servicescape which have
high impact on the service quality perception of the customers as well as customer
satisfaction and repatronage are points of consideration for this study. The diagram below
is Wakefield and Blodgett’s representation of the relation between the type of service, the
time spent in the facility and the importance of servicescape (Wakefield and Blodgett,
1994).
Figure 2: Servicescape Typology (by Wakefield and Blodgett, 1994)
Time spent in Type of Service

Facility Functional Services Leisure Services
Importance of Low High

Servicescape
Low
Drive-through bank Miniature golf
(Minutes
Low Dry-cleaners Video game rooms
)
Moderate Health clinics Sporting events
(Hours) Law offices Upscale restaurants
Extended Schools Resorts

(Days) High Hospitals Amusement parks
2.1.3 Application of Servicescapes
The applications or benefits of having a customer favoring servicescape is extremely
important to not only enrich customer experience and satisfaction from a service, but also
ensure customer repatronage and repeat intentions. Effective use of servicescapes in
services provides the following benefits:
• Improves image of the service as well as the service provider in the eyes of the
customer and employees alike.
• Aids in achieving the marketing goals of an organization by adding to the
marketable features of a service.
• Has a positive influence on the approach behavior of the customers regarding the
service and helps to reduce the avoidance behavior of the customers.
• Increases the affinity of the customer to stay, explore and affiliate with the service.
• Enhances the quality and nature of employee and customer interaction, thereby
creating favorable customer response for the service.
• Aids in forming “first impressions” about the service for the new customers.
• Helps to differentiate and distinguish services provided by the service provider
from its competitors.
• Effective use of servicescapes in a high involvement and self-service kind of
service like karaoke box will help to position the service and instigate repeat
purchase and help in ‘word of mouth’ marketing, thereby benefitting the service
provider manifolds.
Below is a diagrammatic representation of the servicescapes evaluation process by a
customer
Figure 3: The Servicescapes Evaluation Process by a Customer
Elements and Attributes

of Servicescape
Consumer’s Micro- Consumer’s Macro-

perspective of Service perspective of Service
dependent on: Personality dependent on:
traits, behaviors, lifestyle, Demographics, social and
involvement with the cultural aspects, individualism
service, expectations, etc. and collectivism, etc.
Cognitive Process: Organization of

the perception, image and
expectations about the service and
the service provider.
Affective Process: Emotional

involvement with the servicescapes.
Cognitive Process: Leading to

evaluation of the elements of the
servicescapes.
Response Process: Behavior of

acceptance and approach to a service
or avoidance of a service based on
evaluation of the elements of the
servicescapes of a service.
2.2 Customer Satisfaction
There has been several literature defining customer satisfaction in various ways,
differentiating between customer satisfaction for goods and customer satisfaction for
services. Whatever the definition, the aim of the companies or businesses to provide
customer satisfaction has always been on the cards. Customer satisfaction has been
defined by Kotler (2000) as “a person’s feeling of pleasure or disappointment resulting
from comparing a product’s perceived performance (or outcome) in relation to his or her
expectation”. Hansemark and Albinsson (2004) on the other hand defined satisfaction as
“an overall customer attitude towards a service provider, or an emotional reaction to the
difference between what customers anticipate and what they receive, regarding the
fulfillment of some need, goal or desire”. Hoyer and MacInnis (2001) related satisfaction
to the emotions of “acceptance, relief, excitement, delight and happiness”. Thus, customer
satisfaction can be defined as the degree or extent to which the expectations of a customer
are met or exceeded by a product or service. A customer is said to be satisfied when his
expectations are met or surpassed. It is one of key indicators of the health of a business
and help in measuring the success or failure of a business’s offering. With growing
competition in the market place, customer satisfaction acts as a differentiator and is
commonly incorporated goal of any business strategy or planning (Gitman and McDaniel,
2007). The customer satisfaction thus can be considered as a combination of response
(either emotional or cognitive in nature), specific focus (in terms of expectations from the
product or service, experience, etc) and timing of the response to the focus (pre purchase,
post purchase, etc.). The table below is an attempt to conceptual and operational
definitions for customer satisfaction found in various literature that focus on customer
satisfaction for either product or service offerings or both as well as the breakup of the
definitions to identify the response, focus and time phases of customer satisfaction . Some
of the definitions have been directly quoted from the literature so as to retain their effect.
Table 2: Conceptual and Operational Definitions of Customer Satisfaction
Literature
Definition Response Focus Time
Source
Howard The buyer’s cognitive state The cognitive The offering The entire
and Sheth of being adequately or state of being provider buying
(1969) inadequately rewarded for and adequately or process.
the sacrifices he has realization of inadequately
undergone during the entire purchase rewarding the
buying process. intentions. customer for
the sacrifices
he / she
underwent
during the
entire buying
process.
Hunt “A kind of stepping away Evaluation of Experience During the
(1977) from experience and the entire was at least as consumptio
evaluating it…the buying expected, that n
evaluation rendered that experience by is fulfillment experience.
the experience was at least detaching of
as good as it was supposed oneself from expectations.
to be…” the process as
a buyer, and
reengaging as
a simple
observer.
Oliver An assessment of the Assessment of Surprise due During
(1980) inherent surprises the précis to the acquisition
associated with product psychological coupling of and / or
acquisition and / or state of disconfirmed consumptio
consumption experience, emotion or expectations n of
that is, the précis feelings. and product.
psychological state customer’s
resulting when the preceding
surrounding disconfirmed feelings about
expectations is integrated the offering.
with a customer’s
preceding feelings about
the consumption
experience.
Westbrook The favorability of the Individual Experiences During use
(1980) individual buyer’s buyer’s and results of or
subjective assessment of favorability of use and consumptio
the different experiences the subjective consumption n.
and results associated with assessment of of the
the use and consumption of the product. product.
the product.
Swan, A cognitive judgment or The Cognitive The relative During and
Trawick conscious evaluation that judgment or poor or good post
and Carroll the product has performed conscious performance consumptio
(1981) relatively well or poorly or evaluation of of the product n.
that the product was the offering’s and its
suitable or unsuitable for performance suitability or
its purpose / intended use. along with the unsuitability
Also, the affect of feeling affect of for the
towards the product is feeling intended use
important. towards the or purpose,
product directed
offering. towards the
product.
Churchill “…conceptually, an End result or Evaluation of During post
and outcome of purchase and the outcome. the rewards purchase
Surprenant use resulting from the and costs of and
(1982) buyer’s comparison of the the purchase consumptio
rewards and costs of the comparative n phases.
purchase relative to the to the
anticipated consequences, expected
and, operationally, similar consequences.
to the attitude that it can be
assessed as a summation of
satisfactions with various
characteristics…”
Bearden A function customer’s Comparison Expectations During
and Teel expectations about the between and beliefs consumptio
(1983) beliefs of product attributes expectations about the n
and the consequent and product
disconfirmation of the disconfirmatio attributes.
beliefs and expectations. ns of those
expectations.
LaBarbera Post purchase assessment Post purchase Surprise at the During
and of the expected product assessment. difference product
Muzursky experience and the between consumptio
(1983) resulting surprise. expected and n and post
post purchase purchase
product phase.
performance.
Westbrook “…an emotional response An emotional Experiences During post
and Reilly to the experiences provided and cognitive and purchase
(1983) by and associated with response. perceptions phase.
specific products or associated
services purchased, the with the
retail outlets, or even molar product,
patterns of behavior like service, and
shopping and buying the related
behavior along with the servicescapes,
complete market place that are
experience….An emotional compared to
response to the facets one’s beliefs,
associated with a product values,
or a service that can be conditions
triggered by a cognitive and buyer
evaluation process during behavior
which the perceptions or perceptions.
beliefs about an object,
service, action, or
condition are compared to
the buyer’s values, needs,
wants or desires…”
Day (1984) “… The evaluative reaction An evaluative The During the
to an ongoing consumption response to discrepancy acquisition
process or phase… the the between phase and
consumer’s reaction during discrepancy expected the ongoing
a specific consumption between performance consumptio
experience to the expected and and actual n event
evaluation of the apparent actual perceived providing
inconsistency between experience. performance the actual
prior expectations and the experience of consumptio
actual perceived a product. n
performance of the product experience.
post acquisition….”
Cadotte, An emotional response to The emotional The use During the
Woodruff the assessment of the user response to a experience. consumptio
and Jenkins experience of a purchased product’s use n phase.
(1987) product or service. experience
assessment.
Westbrook “… The global evaluative The global Use and During the
(1987) judgment about a product’s evaluative consumption consumptio
usage and consumption…” judgment. of a purchased n phase.
product.
Tse and “… The customer’s Response to Perceived During
Wilton response to the assessment the inconsistency consumptio
(1988) of the perceived assessment of between the n and
inconsistency between the expected and pre purchase during post
pre purchase expectations actual offering expectations purchase
or standards or performances or standards phase.
performance of an offering post purchase or
in comparison to the actual and performance
perceived performance of consumption. of an offering
the offering post its in comparison
purchase and to the actual
consumption...’ perceived
performance
of the offering
post its
purchase and
consumption.
Oliver “… A function of the Positive or Salesperson’s During the
(1989) preference, fairness in negative ability to purchase
dealings and responses deliver phase of a
disconfirmation during the during the fairness and product or
buying process…” buying preferred service.
process. experience
during the
buying
process.
Westbrook “… A post purchase Evaluative Particular During the
and Oliver evaluative judgment of a judgment of a product or post
(1991) particular choice of product buyer’s service purchase
or service purchase…” selection or selected for phase.
choice of purchase
product or
service.
Fornell An overall post purchase Overall Comparison During the
(1992) reaction and assessment to reaction and between pre post
the fulfillment of assessment. purchase purchase
expectations. expectations phase.
and the
perceived post
purchase
product
performance.
Oliver Assessment of satisfaction Summary of Product During the
(1992) as an emotional response to the responses attributes, consumptio
product performance which to product especially n phase.
acted as a summary of the attributes and during
responses to product its consumption.
attributes and coexisted coexistence
with the emotional with the
responses to product emotional
consumption. responses to
product
consumption.
Mano and “… An attitude similar to An attitude of Product During the
Oliver the post consumption assessment performance. post
(1993) assessment judgment that judgment that consumptio
varies along the hedonic varies along n phase.
continuum…” the hedonic
continuum.
Halstead, “… A transaction specific An ‘affective Product During the
Hartman affective response resulting response’ to performance consumptio
and from the customer’s the in contrast to n phase as
Schmidt assessment of a product’s differences a specific pre well as post
(1994) performance to a specific between purchase consumptio
pre purchase performance expected and performance n phase.
expectation…” actual expectation.
performances
of a product.
Oliver The judgment that a Buyer’s Product or During
(1997) product or service or one or judgmental service or one consumptio
more of its feature(s) is response to or more of its n phase.
providing or has provided a fulfillment. feature(s).
pleasurable level of
consumption related
fulfillment, which includes
levels of under fulfillment
or level of over fulfillment.
It is a customer’s response
to the feeling of
fulfillment.
Kotler “… A person’s feeling of The feeling of Perceived During the
(2000) pleasure or disappointment pleasure or performance entire
resulting from comparing a disappointme versus the buying
product’s perceived nt by expectations process as
performance (or outcome) comparing a from a well as
in relation to his or her product’s product or during the
expectation…” perceived service. post
performance purchase
(or outcome) phase.
in relation the
buyer’s
expectations.
Hoyer and “… The emotions of The emotions Fulfillment of During the
MacInnis acceptance, relief, of acceptance, expectations. post
(2001) excitement, delight and relief, purchase
happiness on having the excitement, phase.
expectations fulfilled…” delight and
happiness.
Hansemark “… An overall customer Emotional Outcomes and During the
and attitude towards a service reaction to the attributes of a entire
Albinsson provider, or an emotional differences in product or buying
(2004) reaction to the difference expected and service. process as
between what customers desired well as
anticipate and what they outcomes and during post
receive, regarding the attributes of a purchase
fulfillment of some need, product or phase.
goal or desire…” service.
Thus, the facts that can be concluded from the literature on customer satisfaction are:
- The feeling of satisfaction or dissatisfaction is a form of conative or cognitive and
affective response to a product or service offering and the entire or part of the
purchase and consumption process.
- The feelings of satisfaction and its levels may vary with the phase in which a
customer is during the buying process, that is, the responses of a customer to a
product or service offering will vary before choice, after choice, during
consumption, after consumption, after extensive experience, etc.
- A customer’s response of satisfaction to a product or service offering also depends
on the assessment of offering and purchase related attributes of the product or
service as well as the offering consumption experiences.
The diagram below is a schematic representation of a business’s approach to ensuring
customer satisfaction.
Figure 4: Approach to Customer Satisfaction
Customer Complaint
& Grievance
Handling
Customer Focus Customization of

and Approach Product or Service
Customer
Satisfaction
Timeliness &
Customer Review Availability of
and Feedback Product & Services
Information about
Product and Service
While defining customer or consumer satisfaction it is also important to get a general
understanding of what ‘dissatisfaction’ might mean, since it has been found that absence
of satisfaction does not generally lead to dissatisfaction or the presence of satisfaction
does not really mean absence of dissatisfaction. Customer dissatisfaction however has
been defined by Zairi (2000) as the “bipolar of satisfaction” who studied the techniques to
conceptualize the customer dissatisfaction construct. Thus, the understanding of customer
satisfaction from various literature and studies point to the fact that customer satisfaction
is an affective response to a product or service offering by an organization which varies in
intensity and is time specific in terms of the experience during the buying process with
limited duration that is directed by the customer towards the central facet of product or
service acquisition or consumption or both. And so, dissatisfaction according to Zairi
(2000) will be the absence of a positive response to a product or service offering by an
organization which varies in intensity and is time specific in terms of the experience
during the buying process with limited duration that is directed by the customer towards
the central facet of product or service acquisition or consumption or both. The various
insights gained from literature regarding customer satisfaction and it’s managerial and
business implications are:
- Customers will behave positively only if they are satisfied with the process within
and/or the outcome from the service value chain.
- Service consumers cannot pre-test the service outcome before purchase.
- The service outcome cannot be repaired if it is unsatisfactory and hence every
precaution must be taken to ensure high quality of service encounter.
- Unsatisfactory service outcomes cannot be returned to service providers which is
one of the main reasons for satisfaction and dissatisfaction among customers.
- From a customer's perspective, a business organization's ability to maintain
consistent quality of service represents the firm's ability to deliver its service
promise.
- From an operational point of view, the primary objectives of service recovery are
to regain customer satisfaction with service encounters, and to identify and correct
weaknesses if any associated with the offering and the servicescapes.
- There are direct and indirect effects of customer-oriented attitudes
on customer satisfaction.
- There is a need to understand the positive moderating effect of empathy, reliability,
and expertise and their link to customer-oriented attitude and customer-oriented
behavior.
- Employee job satisfaction is a relevant factor in service quality improvement.
Employees who feel satisfied with their jobs provide higher levels of customer
satisfaction.
- Reliability, responsiveness, empathy, assurances, and tangibles are all related to or
dependent upon the service encounter process.
- Satisfaction is a person's feelings of pleasure or disappointment resulting from
comparing a product's perceived performance (or outcome) in relation to his or her
expectations (Kotler 2000).
- Satisfaction is viewed as a function of perceived performance and expectations. It
is clear that if the performance falls short of expectations, the customer is
dissatisfied, and if the performance matches the expectations, the customer is
satisfied and if it exceeds customer expectations, the customer is highly satisfied or
delighted.
- Consumer behavioral studies show that customers who are just satisfied still find it
easy to switch when a better offer comes along. Those who are highly satisfied are
much less ready to switch.
- High satisfaction or delight creates an emotional bond with the brand, not just a
rational preference. The result is high customer loyalty.
- Since satisfaction is one of the determinants of customer switching, there is a need
to foresee and categorize the potential switching factors that affect customers.
- There is a need to examine whether there are differences between satisfaction level
of ‘stayers’ and ‘switchers’ with regard to categorized satisfaction determinants.
- As the competition increases and the market growth slows down
in the karaoke box market, the importance of customer retention and loyalty will
increase. However, it is not easy to maintain customer retention in such a
fragmented sector with variety of service offering and every business fighting for
more customers by offering them highly competitive and attractive packages.
- Firms have to design their marketing strategies wisely according to their strengths
and weaknesses. A crucial issue to be contended with and targeted at is the
"customer switching behavior", which means that customers continue to use the
service category but switch from one service provider to another (Keaveney and
Parthasarathy, 2001).
- At its most basic level, a business’s customer base can be subdivided into two
major groups: (1) customers who have switched from other service
providers-"switchers", and (2) those who have not-"stayers”.
- Since satisfaction is seen as a determinant of customer switching, the customer
satisfaction measurement helps to not only identify the satisfaction determinants
but also the potential defection causes for karaoke box customers. Then, it
becomes meaningful to investigate the differences between switchers and stayers
in terms of satisfaction level.
- Businesses of today are trying to create a loyal customer base by focusing on
retaining current customers in order to benefit from the economics of customer
retention and loyalty. A loyal customer is supposed to not to defect but to stay loyal
to the business for a long period of time, tends to buy more, and more often than
the others. Furthermore, a loyal customer shows less sensitivity to price, pays less
attention to competing firms, talks favorably about the firm, costs less expensive to
serve than new ones and pays premium prices for obtaining better service.
- There are six types of customers who are defectors, namely; price defectors,
product defectors, service defectors, market defectors, technological defectors, and
organizational defectors.
- Reasons for switching services can be categorized as pricing, inconvenience, core
service failures, failed service encounters, response to failed service, competition,
ethical problems, and involuntary switching.
2.2.1 Importance of Customer Satisfaction
Bitner (1990) suggested that consumers reach satisfaction decisions by comparing product
or service performance with prior expectations about how the product or service would or
should perform. These expectations are compared with actual perceptions of performance
as the product or service is consumed. In cases where expectations exceed performance, it
results in dissatisfaction. When expectations are met, or when performance actually
exceeds expectations, satisfaction results. Shu, Crompton and Willson (2002) explained
that confirmation results when the actual performance matches initial expectations. When
performance exceeds or falls short of expectations, positive or negative disconfirmation
results. Positive disconfirmation leads to satisfaction or perceptions of high service
quality, while negative disconfirmation leads to dissatisfaction or perceptions of low
service quality. Research also suggested that the physical setting may also influence the
customer’s ultimate satisfaction with the service (Bitner, 1990; Harrell, and Anderson,
1980).
The importance of customer satisfaction has long been understood and related to customer
retention, customer loyalty and sustainability. Sivadass and Baker – Prewitt (2000) states
that customer satisfaction leads to greater customer retention, which in turn gives rise to
greater profitability for a business by enhancing customer loyalty. The profitability of a
business in the long run is governed by a vicious circle of value proposition – customer
perception – customer satisfaction – customer loyalty - customer retention – profitability
and finally growth of business. Sewell and Brown (2002) pointed out that satisfied
customers stay longer with a business thereby reducing switching and deepening the
relationship between the offering, customer and the business. They also studied that
satisfied customers were less sensitive to price change and competitive offerings,
recommending the Business’s offerings to others thereby assisting in brand recognition.
In his book Soderquis (2005), quoted Sam Walton, the founder of Wal-Mart, as saying “…
Exceed your customer’s expectations. If you do, they’ll come back over and over. Give
them what they want – and a little more. Let them know you appreciate them… The two
most important words I ever wrote were on the first Wal-Mart sign: “Satisfaction
Guaranteed.” They’re still up there, and they have made all the difference…”
According to Stevens (2002), customer satisfaction due to its inextricable link to
profitability cannot be disregarded because –
1. The cost of attracting a new customer is five to six times more than the cost of
retaining an existing customer.
2. Dissatisfaction for a business offering is expressed by only one out of every 25
dissatisfied customers.
3. Happy customers would spread the good word about their positive experience by
telling 4 to 5 others about the business offering.
4. Simply by making efforts to retain 5% more of the existing customers, a business
can enhance their profits by 25% to 125%.
The diagram below is the graphic representation of the aspects that result in a successful
product or service offering by a business.
Figure 5: Successful Product or Service Offering
Successful Product or Service

Offering
Timing of
Type and Focus of
Response to the
Intensity of Customer
Product or
Customer Response;
Service
Response to a Performance
anytime during
Product or Compared to
the Buying
Service Competition
Process
The various researches that are being done almost every day on gathering more
understanding about customer satisfaction and the factors that influence customer
satisfaction, the fact remains that the importance of customer satisfaction can never be
underplayed in the present day economy. Thus, the in depth study of customer satisfaction
in turn provides us with the information that ranges from understanding of the needs of the
various customer segments, thereby helping businesses to design their service offerings to
better fit and address the needs of the customers and add value to the offerings and finally
develop a lasting customer relationship.
The issue of addressing customer satisfaction will remain incomplete and incoherent
unless the elements and measures that affect customer satisfaction are clearly and
coherently defined. One of the basic approaches may be to compare a service provider’s
performance to the already stated or decided / declared standards if quality, price,
timeliness since documented evidences are easily available for such comparisons. Another
approach can also be by measuring and tracking the complaints database, improvement of
sales figures, customer audit reports, repeat purchases, etc. which would help to
understand if a service provider is really meeting the set standards for his offerings.
However, one has to note that it is inexplicably difficult to measure the levels of customer
satisfaction and provider performances for service offerings such as karaoke box services
since there are a lot of intangible customer expectations and intangible servicescape
factors associated with the offering.
2.2.2 Elements of Customer Satisfaction
There are several factors that define and drive customer satisfaction. In his book Hayes
(2008) pointed out that in a competitive marketplace such as today’s, where every
organization is competing for customers, customers share of mind and attention, customer
satisfaction as a part of the business strategy is the only way to ensure differentiation,
market share and growth. The elements that guide customer satisfaction are:
- Price of Product or Service: To begin with, the pricing of a product or service as
compared to the other similar offerings in the market play an essential role in
creating that very first impression about the offer thereby aiding in customer
satisfaction.
- Perceived Quality of Product or Service: The quality of an offering as perceived by
a customer along with the performance and pricing criteria helps a customer to
understand or calculate the value of the offering, thereby taking him/ her a step
further towards satisfaction or dissatisfaction.
- Perceived Product or Service Performance: The performance of an offering
determines the fulfillment or failing of a customer’s expectations and justifies the
price and the perceived value of the offering. This go a long way in determining
whether the customer will be satisfied with the offering or not.
- Perceived Value of Product or Service: As mentioned earlier, the value or an
offering, whether a service or a product, if in agreement with the customer’s
expectations, will result in creating a satisfied customer (Hayes, 2008).
- Availability of Product or Service: For repeat use products or services, the ability
of an organization to ensure continuous availability or supply of the product or
service creates positive perception about the value of the offering and aids in
customer satisfaction process.
- Level of Customer Support or Service: The level of customer support and service
is one of the key criteria that differentiates one offering from the other and builds
up customers opinion about the offering (Szwarc, 2005).
- Ability to Deliver the Promised Product or Service: The ability of an organization
to deliver the promised offering to the customer at the right place and right time, in
a right way, at a right price with promise of support and service in case of
compliant or query, go a long way to create customer satisfaction.
- Perceived Ability to Meet Customer Expectations: What customers think about a
business and its offering is not only important in purchase decision initiation but
also impacts the level of customer satisfaction in the post purchase phase, thereby
reducing the switching tendencies (Thompson, 2004).
- Perceptions about the Competitive Products and Services: In the present day
scenario, level and degree of customer satisfaction is dependent on the competitive
offerings available in the market. The intense the competition, the greater is the
value perception and the level of satisfaction (Thompson, 2004)
The figure below is a schematic representation of the elements that determine the level of
customer satisfaction for a particular product or service offering.
Figure 6: Elements of Customer Satisfaction
Price of Product or Level of Customer

Service Support or Service
Perceived Quality
of Product or
Service Ability to Deliver
the Promised
Product or Service
Availability of
Product or Service Elements of
Customer
Satisfaction Perceived Ability
to Meet Customer
Expectations
Perceived Product
or Service
Performance
Perceptions about
the Competitive
Perceived Value of Products and
Product or Service Services
2.2.3 Physical Environment
A number of studies over the years have tried to quantify the impact of physical
environment on the behavior of a customer which influences his perception about a
service or a product. It has been found that surroundings in which a service or a product is
offered has the ability to influence a customer’s experience during the buying process,
affect his / her buying behavior, and impact his / her decision making and evaluation
process for the product or service he / she is considering.
According to the studies by Baker, Berry and Parasuraman (1988), Babin, Darden and
Griffin (1994), Donovan and Rossiter (1982), Bitner (1990, 1992) and Zeithaml and
Bitner (1996) the tangible cues within a physical environment where the product or
service is being offered play a vital part in influencing a customer’s attitudes and behavior
towards the entire offering and the organization. As mentioned earlier, the physical
environment facet in the form of lighting, color, music, smell, layout, etc. play an
extraordinary role in the delivery of a service. Berry and Clark (1986) had studied the
effectiveness of documentation, physical representation and association strategies adopted
by firms to positively influence a customer’s attitudinal and behavioral tendencies. They
found that the physical representation and tangible aspects of a service positively impacted
a customer’s attitudinal aspects elicited positive responses for the service.
Siew, Swee and Lynda (1997) studied the consequences of service failure, physical
environment and impact on customer’s evaluation of the service and the resulting
customer satisfaction. They found that the customers developed casual inferences from the
physical environment and tangible cues provided to them at the service setting. They also
found that the customers held the business highly responsible for a failure in service
delivery, if the failure occurred in a highly pleasant environment. They found that the level
of satisfaction varied with the perceived service quality. The higher the perception of the
service quality, the greater was the level of satisfaction and the greater was the chances of
repatronage. Thus, to create satisfaction for a service offering, it seem imperative to
provide customers with a pleasant physical environment which includes both the interiors
and exteriors facilities of the service setup, and a rating of the perceptions of the tangible
cues of the physical environment of a service setup will help to judge the satisfaction
levels and repatronage intentions of the customers.
2.2.4 Direct & Indirect Influence of Servicescapes
The influence of servicescapes in the success or failure of a business’s offering cannot be
ignored in the present day scenario, where even selling of tangible goods have come to be
associated with the service provided by the firm’s employees during the buying process.
Services have become a way of differentiating from competition and creating value. The
firms offering services including the karaoke box service have a lot to do in order to
achieve success and generate customer satisfaction. With intensification of competition at
every step, the servicescape of an offering helps a customer identify and associate with the
offering and perceive value and quality. The servicescapes help to determine the approach
and avoidance behavior of a customer thereby paving the way for customer satisfaction
and dissatisfaction. It also induces or reduces the repatronage intentions of a customer.
The positive aspects like the desires to stay, explore, affiliate, or the negative aspects like
the desire to not stay, or associate, or explore or affiliate are the influence of a
servicescape and its physical environments. As suggested by Bitner (1990), the
servicescapes have both direct and indirect influence on the satisfaction levels of a
customer and can go a long way in encouraging customers for repatronage intentions.
The view that the servicescape of a service offering is not only an indication to the
customer for an expected quality and level of service but also the fact that servicescape
acts as an influencer on the evaluation process of a customer which helps him or her to
establish the perceived service quality and the quality of the factors affecting the service.
The affect of servicescapes also extends to influence a customer’s perception about
utilitarian services such as provision for clean and hygienic rest rooms, provisions for
emergency telephony facilities, etc. especially for the services where a customer spends a
considerable amount of his or her time such as the karaoke box. It is also a good idea to
consider price paid by a customer for the service offering as against his or her perception
about the value of the offering that is quality versus price paid. The evaluation process for
an offering undertaken by a customer is a combination of his or her own characteristics
and the environment and the interaction that takes place between the two. The process of
assessment may be influenced upon by a customer’s personality, biology, socio-cultural
experience, expectations, goals, and certain internal and external factors (Walsh, et al.,
2000). Walsh (2000) also pointed out that the evaluation or assessment process may
integrate various environmental attributes and varying degree of emotional responses to
those attributes. In case of a complex service which requires understanding of a form or
the contents of a servicescape, a customer will use his or her mental framework to evaluate
and analyze the contents and / or the forms. Thus, the direct and indirect outcomes of
servicescape attributes are dependent and influenced by the perceived service quality and
physical evidences present in a servicescape.
3. Research Methodology
This section elaborates on the methodology used for the research. It talks about the
objectives that guide the research, the questions that help to address these objectives, the
discussion on the sample and the sample size being considered, the methods used for data
analysis and the rationale for selection of the sample size and method of analysis. The
basic purpose of a research is to determine what is being done rightly and what is being
done wrongly by businesses, if there are any scopes for improvement that can be
suggested to the karaoke box service providers and if there are ways to better serve
customers than the existing norms and trends. All these can be understood or studied by
going back to customers, understanding their priorities, their perceptions about the service
and the service provider and then setting up priorities for improvement. The research
methodology selected will thus help to understand the servicescape dimensions for
karaoke box service offering that affect a customer’s satisfaction level and perception
about the service and make suggestions based on findings.
3.1 Research Objectives
The following are the research objectives that the research is aimed to provide answers to:
• To determine whether ambience of karaoke servicescape have a positive effect on
customer satisfaction
• To determine the impact of servicescape layout on customer satisfaction.
• To determine the impact of functionality on customer satisfaction.
• To determine the significance of signs and symbols at the karaoke servicescape
that affects customer satisfaction.
• To determine the impact of artifacts on customer satisfaction.
• To determine the impact of cleanliness of the servicescape in generating positive
• To determine the perceived quality of karaoke servicescape on customer
satisfaction.
• To determine whether the perceived quality of the servicescapes will have a
positive effect on the length of time they desire to stay in the karaoke
servicescapes.
• To determine whether the perceived quality of the servicescapes will have a
positive effect on the repatronage intentions of the karaoke box customers.
• To determine whether customer satisfaction will have a positive relationship with
desire to stay in karaoke box for longer duration of time.
• To determine whether customer satisfaction will have a positive relationship with
repatronage intention.
The determination of the above statements will help us to determine the factors that
affect the macro and micro aspects of servicescape of karaoke boxes. An attempt will
be made to use the factor analysis method and the multiple regression method using
the SPSS package (version 11.0) to determine the factors that affect karaoke box
servicescape thereby helping us to better understand customer satisfaction and link
repatronage intentions to enhanced customer satisfaction.
3.2 Research Questions and Statements of Hypotheses
The research questions that were designed were developed from the statements of
hypotheses that were arrived at based on the understanding gained while performing the
secondary research and the literature review.
Suggested dimensions of servicescapes from Bitner (1992) were used as the factors
affecting customer perceived quality of the servicescapes and thus the satisfaction. In this
study, only curial servicescapes are examined in order to be more focused. The details of
different dimensions are defined here. Firstly, ‘ambient conditions’ of karaoke box
including temperature, air quality, noise and lighting in the room and corridor. Secondly,
‘spatial layout’ includes the layout of the room, equipment, furnishings and seating
comfort and ‘functionality’ refers to the decorating system and songs. Lastly, ‘signs and
symbols’ refer to signs and artifacts that represent the theme of the karaoke rooms. Thus,
the statements of hypotheses that were analyzed by the questionnaire are:
- H1: Ambient conditions in a karaoke box servicescape will result in positive
- H2a: Spatial layout in a karaoke box servicescape will result in positive
- H2b: Functionality in a karaoke box servicescape will result in positive
- H3a: Signs and Symbols in a karaoke box servicescape will result in positive
- H3b: Artifacts in a karaoke box servicescape will result in positive customer
satisfaction.
After the spread of SARS, the consumers’ concern and awareness regarding the
cleanliness and hygienic conditions of a service setting were raised, especially in those
situations in which customers had to spend several hours in the leisure service setting
(Wakefield and Blodgett, 1996). Interviewees of the focus group suggested that many
consumers implicitly associated cleanliness with the quality of the servicescapes and it had
strong influence on a consumer’s perceptions of the service quality. Thus, the next
hypothesis was:
- H4: Cleanliness and hygienic conditions in a karaoke box servicescape will
result in positive customer satisfaction.
Leisure services (such as theaters, recreation or health clubs, karaoke box, and sporting
events, etc.) generally require customers to spend extended periods of time in the physical
surroundings of the service provider (Turley and Fugate, 1992). In such cases, Bitner
(1992) suggest that the facilities itself, or the perceived quality of the servicescapes, may
have a substantial effect on customer satisfaction with the service experience, which in
turn influences how long they desire to stay in the leisure service setting as well as how
much money they will spend and whether they intend to repatronize the service provider
(Cronin and Taylor, 1992; Wakefield et al. 1996) (refer to Diagram 2). Moreover, the
perceived quality of servicescapes would be formed by the three dimensions plus
Cleanliness of Servicescapes and their effect on customer satisfaction is being tested.
 H5: The perceived quality of the in a karaoke box servicescape will result in positive
influence on customer satisfaction.
 H6: The perceived quality of the servicescapes elements will result in a positive
effect on the duration or period of stay for customers.
 H7: The perceived quality of the servicescapes elements will have a positive
influence on a customer’s repatronage intentions for the karaoke box service offering.
 H8: The level of customer satisfaction will have a positive relationship to a
customer’s desire to stay for longer time duration at the karaoke box facility.
 H9: The repatronage intention of a customer for the karaoke box service offering will
have a positive relationship with customer satisfaction.
The diagram below represents the inter linkages and connections between the various
hypotheses made and the factors being considered to be studied during data analyses.
Figure 7: Hypothized Model
The questionnaire thus designed aimed to find out the relationship between karaoke
servicescape and customer satisfaction. It consisted of 49 statements for affecting different
dimensions of servicescapes, customer satisfaction, ‘repatronage intention’ and ‘intention
to stay’ for longer duration. The use of 7 closed-end questions helped to find consumers’
characteristics like age, income level, gender, etc. and their consumption background for
karaoke box service offering. The respondents were requested to rate all of the statement
questions on a 7-point Likert Scale so as to clearly represent the respondents’ agreement or
disagreement levels towards the various elements of karaoke box servicescapes.
The questions for understanding the dimensions of karaoke box servicescapes were
developed on the basis of extracted dimensions from Bitner’s servicescapes framework
(Bitner, 1992). The impact of ambient conditions on a customer’s satisfaction with the
karaoke box servicescape was examined by questions from question number 5 to question
number 12; impact of spatial layout and functionality on a customer’s satisfaction with the
karaoke box servicescape was tested with questions from question number 13 to question
number 30; impact of signs, symbols and artifacts on a customer’s satisfaction with the
karaoke box servicescape was presented to the customers for rating with the help of
questions from question number 31 to question number 37; and questions from question
number 38 to question number 40 aimed at understanding customers’ opinion on
cleanliness and hygienic conditions of the karaoke box servicescapes and its consequent
effect on customer satisfaction. All of these questions were designed based on the insights
gained from the focus group interview conducted prior to designing the questionnaire
(please see appendix for the focus group interview details). The use of focus group was a
first time attempt at gaining an understanding about the dimensions of servicescape of a
karaoke box service since there was no previous research available about the servicescapes
dimensions of karaoke box service.
In order to gauge the level of respondents’ satisfaction, the 7 point Likert Scales
(Westbrook and Oliver, 1981) was used continuously throughout the questionnaire.
However, to have a better analysis of the factors of servicescape, several new questions
were added in order to increase the efficacy of the questionnaire. Questions from question
number 41 to question number 45 were used to illustrate the level of customer satisfaction
as can be obtained from the responses of the respondents; questions from question number
46 to question number 49 were used to examine the respondent’s ‘intention to stay’ for
longer duration at the karaoke box; and the respondent’s ‘repatronage intentions’ were
examined by the questions from question number 50 to question number 53.
3.3 Sampling
Non probability judgment sampling without replacement of non probability sample was
carried out to gather data to the designed questionnaire. Interviewees were selected
randomly. Since elderly and children would not visit karaoke box frequently, they were
not selected as the target respondents of this research. Teenagers and middle aged
consumers who fell into the age group of 15 years to 40 years were the target respondents.
Structured questionnaires were distributed to 207 customers to hold face-to-face
personally administrated questionnaire survey outside four Neway karaoke box branches.
They were located in Causeway Bay Plaza and Mongkok Argyle Centre which enjoys the
highest volume of karaoke servicescape customer traffic; Shatin Belair Garden and
Aberdeen Centre which are in the new territories and suburban residential areas. The
choice of these four branches helped to obtain data from people of different demographic
backgrounds (e.g. gender, ages and income level) so as to reduce sampling errors. The
respondents were interviewed right after they patronized the karaoke box which ensures
easy and fresh recall of the karaoke servicescape memories they had just experienced.
3.4 Research Method
The data collection method was a combination of both exploratory as well as descriptive
method. The exploratory research helped in developing an understanding of the current
scenario, the basic concepts of the karaoke box service offering, servicescape and
customer satisfaction, as well as the prevalent problems in servicescape dimensions and
customer satisfaction that might exist for Neway Karaoke Box. The single cross sectional
design was used for the descriptive method. Since the data collected in primary research
through administration of questionnaire was done for only one sample of respondents
drawn from the target population of Neway Karaoke Box customers who had been
customers for the business for 6 months and the fact that this survey was conducted only
once ruling out the chances of repetition.
A method of self administered questionnaire was employed for primary data collection.
The respondents were required to rate their beliefs and perceptions on a seven point Likert
Scale, with seven being the highest rating (Tull and Hawkins, 1993). The data collected
were analyzed with the help of descriptive analysis options of the SPSS software, version
11.0. This was followed by the analyses of the probable predictors of the dependent
variables using the method of factor analysis. Pearson’s correlation’s statistical technique
was also used in order to investigate and ascertain the possibility of existence of a
relationship between the factors of physical evidence in a servicescape of the Neway
Karaoke Box and customer satisfaction. This correlation technique was implemented since
the dependent variable was transformed into the interval data form in 7 scales so as to
correlate it with the associated independent variables ranked on a 7 point Likert scale. The
scoring of the Likert scales was done assuming that the data had a legitimate interval form,
in agreement with Abelson and Turkey (1970).
The program of SPSS was employed for analyzing the collected data. Demographic data
was used to show the characteristics of the respondents and categorize the customers to
match the target segments. The rating of servicescapes dimensions and customer
satisfaction level were also calculated. Factor analysis and reliability test were applied for
evaluating the validity as well as reliability of the statements incorporated in the
questionnaire to study customer satisfaction levels for various facets of servicescape like
signs and symbols, artifacts, etc. Multiple regressions were used in order to determine the
relationship between the servicescapes dimensions (considered as independent variable)
and customer satisfaction (considered as dependent variable). This also helped to achieve
further investigation into the dimensions of servicescapes that influenced customer
satisfaction the most with regard to the factors like ‘intention to stay’ and ‘repatronage
intentions’. Lastly, correlation test was run for determining the relationship between
customer satisfaction, repatronage intention and desire to stay for longer time to gather a
relationship between the three variables.
This research was conducted in two stages. Firstly, a focus group of six people, who were
customers of Neway Karaoke Box, were interviewed for generating initial insights in
order to design the questionnaire. Their responses were used to understand if the
dimensions of servicescapes considered as influencers of customer satisfaction are indeed
useful and effective for collecting proper data which matches with the objectives.
Observational research was also conducted before designing the questionnaire. Two
branches of Neway Karaoke box (Mongkok and Aberdeen) were visited and observed for
their external and internal facilities of the servicescapes.
3.5 Rationale for Selection
The reason for choosing these two branches was that they represented two different areas
which were in the busiest traffic and residential areas. This helped to reduce the
discrepancy and enhance the reliability of the research. Based on the focus group, Prat
Avenue Branch was regarded as the most impressing branch. So, it was also observed. The
main servicescapes dimensions of karaoke box were drawn out afterward during the
questionnaire. Secondly, quantitative research as well as self-administrated questionnaire
with Likert Scale questions was applied in this study as it could be easily controlled and
collection of data was comparatively easy.
4. Analyses and Findings
The section of ‘analyses and findings’ attempts to make sense out of the data collected by
administering questionnaires to the customers of Neway Karaoke Box. In this section the
factors affecting the perception of satisfaction among customers are analyzed and
understood in the context of the study. Correlation between factors and between the factors
and customer satisfaction has been attempted to be understood. The implications of the
findings are then discussed to understand the role of servicescape factors in enhancing
customer satisfaction for Neway Karaoke Box service offering.
4.1 Factor Analyses
A factor analysis is commonly used for identification of key factors for a study. In this
research, factor analyses using Varimax rotation was used to find out the factors of a
karaoke box servicescape that impacted or influenced customer satisfaction, intention to
stay for longer duration and repatronage intentions with each factor having an Eigen value
greater than unity. A factor analyses for servicescape parameter was undertaken and tested
on 36 statements. With the deletion of 9 cross loading items, 27 numbers of items were left
and these were then split into eight different factors as against the four original dimensions
of ambient conditions, spatial layout, signs, symbols and artifacts and functionality. Songs
in ‘functionality’; layout of rooms, equipments, furnishings and sitting comfort in ‘spatial
layout’; lighting and temperature, cleanliness of servicescapes; air quality and noise in
‘ambient conditions’; logos, posters, listings in ‘signs and symbols’; theme of karaoke
room in ‘artifacts’; and decorating system in ‘functionality’ were the eight factors. The use
of Kaiser-Meyer-Olkin Measure of Sampling Adequacy (0.735), Bartlett’s Test of
Spericity (2550.798) and Significance (0.000) revealed that the factor analyses method
was appropriate for analyzing the data collected. The total variance of the items was found
to be 68.788% and the overall reliability of the factors was obtained as 0.849. Since all the
factors had Eigen value greater than unity, it meant that the succeeding analysis of
multiple regressions and correlation could be conducted on the data as well.
Table 3: Factors Extracted for Servicescapes

Kaiser-Meyer-Olkin Measure of Sampling Adequacy = 0.735
Test of Spericity = 2550.798
Significance = 0.000
Overall Reliability Coefficient Alpha = 0.849
Factor
Factor 1: Functionality (Songs) Loading Mean
Mean
29. Many new songs 0.896 3.19
3.15
28. New songs are available quickly 0.875 3.18
30. New songs are trendy 0.870 3.04 (2nd)
27. Varity of songs for me to choose from 0.727 3.20
Reliability Coefficient Alpha = 0.887
Eigen value = 5.976 , Variance explained = 22.135%
Factor 2: Spatial Layout (Layout of Rooms, Equipment, Factor
Loading Mean
Furnishings and Sitting Comfort) Mean
19. Sufficient seats inside the rooms 0.764 3.70
14. Layout of rooms is convenient to customers 0.688 4.21
13. Size of room assigned is large enough for the number of 3.99
0.672 4.12
customers (5th)
20. Size of television screen inside the rooms is appropriate 0.607 3.81
15. Table size and height inside the rooms is appropriate 0.601 4.20
18. Seats in rooms are very comfortable 0.599 3.89
Factor
Factor 3: Ambient Conditions (Lighting and Temperature) Loading Mean
Mean
07. Sufficient lighting in lobby 0.776 2.94
08. Sufficient lighting in rooms 0.725 3.09
09. Button for adjusting lighting in rooms helps to enhance the 3.13
0.648 2.52 (1st)
atmosphere
05. Temperature of lobby is appropriate 0.642 3.40
06. Temperature inside the rooms is appropriate 0.597 3.70
Factor
Factor 4: Cleanliness of Servicescapes Loading Mean
Mean
39. Corridor is clean and hygienic 0.802 4.00

40. Facilities inside the rooms are clean and hygienic 0.734 4.03 3.81
38. Nuts and snacks pack individually provides me a hygienic (4th)
0.643 3.40
impression
Factor
Factor 5: Ambient Conditions (Air Quality and Noise) Loading Mean
Mean
11. Rooms are always full of tobacco smell or odor 0.799 5.42 5.27
10. Air quality is bad in rooms 0.756 5.19 (6th)
12. Insufficient sound arrester among rooms 0.688 5.20
Factor 6: Signs and Symbols Factor
Loading Mean
Mean
33. Sufficient signs / route signs (e.g. Toilet signs) 0.882 3.64 3.63
34. Signs / route signs can be easily understood 0.871 3.61 (3rd)
Factor 7: Artifacts (Theme of Karaoke Room) Factor
Loading Mean
Mean
37. Layout of the karaoke rooms make me happy while singing 0.920 3.92 3.99
36. Layout of the karaoke rooms raise my intention to sing 0.892 4.06 (5th)
Factor 8: Functionality (Decorating System) Factor
Loading Mean
Mean
25. Remote control is easy to use 0.871 3.26 3.13
24. Decorating system is user-friendly 0.831 3.01 (1st)
The factor mean which was obtained by the factor analyses corresponded to the
respondents’ preferences about the servicescapes. The eight items in ascending order of
the mean score that were found were ambient conditions (lighting and temperature with
mean factor of 3.13), functionality (decorating system, again with a mean factor of 3.13),
functionality (as in songs with a mean factor of 3.15), signs and symbols (with a mean
factor of 3.63), cleanliness of servicescapes (with a mean factor of 3.81), spatial layout
(layout of rooms, equipments, furnishings and seating comfort with a mean factor of 3.99),
artifacts (theme of karaoke rooms with a mean factor of 3.99) and finally ambient
conditions (air quality and noise levels with a mean factor of 5.27).
Figure 8: The Factor Means for Different Factors of Servicescapes (Higher value
means lower ranking)
6
5
4
3
2
1
0
The factor 1, known as ‘songs in functionality’ as identified in the analysis, consisted of
four different items namely ‘many new songs’ (0.896), quick availability of new songs
(0.875), trendiness of new songs (0.870) and variety of songs to choose from (0.727).
Their reliability alpha was obtained as 0.887 and the explained variance for this factor was
22.135%. The factor mean for ‘songs in functionality’ was 3.15 which go to show that the
‘songs in functionality’ factor was the second most important dimension of karaoke box
servicescapes that was perceived to be satisfactory by the respondents.
The ‘spatial layout’ (layout of rooms, equipments, furnishings and seating comfort) was
the factor 2 identified during the analysis. The layout of the rooms parameter consisted of
six items namely the availability of sufficient seats inside the rooms (0.764), convenient
layout of rooms (0.688), appropriate size of room assigned (0.672) and appropriate table
size and height in the rooms assigned (0.601). The equipments parameter consisted of
factors like appropriate sized of television screen in the rooms (0.607), and comfort of the
seats in rooms (0.599). These factors helped to identify the sitting comfort within the
karaoke box rooms. The reliability alpha was found to be 0.790 with the variance
explained at 10.211%. This factor mean for the factor 2 was found to be the fifth highest
score (3.99) among all the factors which showed that the respondents had a neutral
opinion about the spatial layout of the karaoke box servicescape at Neway karaoke Box.
The factor 3 was ‘ambient conditions’ (lighting and temperature) and was represented by
five items namely sufficient lighting in lobby (0.776), sufficient lighting in rooms (0.725),
button for adjusting lighting in rooms helps to enhance the atmosphere (0.648),
appropriate temperature of lobby (0.642) and appropriate temperature inside the rooms
(0.597). The reliability alpha for this factor was found to be 0.728 and the explained
variance came out to be 8.215%. With the lowest factor mean of 3.13, this factor was
found to be the most influential in building up customer satisfaction for the respondents of
Neway Karaoke Box servicescape.
The ‘cleanliness of servicescapes’ was the factor 4 and it consisted of three items namely
cleanliness of the corridor (0.802), clean and hygienic facilities inside the rooms (0.734)
and hygienic packaging of the refreshments offered (0.643). The factor 4 obtained the
fourth lowest score of factor mean with a 3.81 and the factor reliability alpha was found to
be 0.754 and explained variance was 7.311%. These scores showed that the customers of
Neway Karaoke Box found the servicescape offerings in relatively clean and in hygienic
conditions.
The factor 5 also depicted ‘ambient conditions’ and consisted of three items namely
tobacco smell or odor in the rooms (0.799) and unpleasant air quality in rooms (0.756) and
insufficient sound arrester among rooms (0.688). The reliability alpha and explained
variance for this factor relating to noise and air quality at the Neway Karaoke Box
servicescape were found to be 0.688 and 6.752% respectively. This factor obtained the
highest factor mean of 5.27 which meant that most of the respondents were not satisfied
with the noise and odor conditions at servicescape of Neway Karaoke Box and did not
perceive these dimensions as the strong points of Neway Karaoke Box offerings.
Factor 6 referred to ‘signs and symbols’ and directed to the two dimensions namely
sufficient of route and other signs and symbols at Neway karaoke Box (0.882) and ease of
understanding of signs and symbols at Neway karaoke Box (0.871). The reliability alpha
for the factor 6 was found to be 0.863 and explained variance was found to be 5.809%.
The factor mean for this factor was obtained as 3.63. This was the third lowest score
among all the factors and signified the perception of the respondents’ and showed that this
factor of servicescape was found to be relatively satisfactory by the respondents at Neway
Karaoke Box.
The ‘artifacts’ was identified as the factor 7 and was represented by two that denoted the
theme of the karaoke rooms and were the layout of karaoke rooms make me happy while
singing (0.920) and layout of karaoke rooms increases my intention to sing (0.892). this
factor had a high factor mean of 3.99, which was the second highest among the eight
factors. This high level of factor mean showed that the respondents at Neway Karaoke
Box were not very satisfied with the theme of the karaoke rooms. The factor had a high
reliability alpha of 0.905 and the explained variance was found to be 4.207%, lower than
other factors that were found more satisfactory by the respondents.
Lastly, ‘functionality’ was termed factor 8 and represented by two items namely ease of
use of the remote control (0.871) and user friendliness of the decorating (0.831). The
reliability alpha for this factor was equal to 0.868 and the explained variance was found to
be 4.147%. The factor mean for factor 8 came out to be as low as Factor 3 and was only
3.13. This showed that the respondents were satisfied with the decorating system
functionality at Neway Karaoke Box.
The following section is an attempt to relate the dimensions of customer satisfaction,
desire to stay for longer duration and repatronage intentions of the respondents using
factor analysis. The principle component of factor analysis with varimax was applied on
13 items for servicescape of Neway Karaoke Box service offering. Five cross loading
items were deleted while eight items were kept and were divided into three factors. The
three factors were ‘customer satisfaction’, ‘repatronage intentions’ and ‘desire to stay for
longer duration’ and are shown in Table 7. The result of Kaiser-Meyer-Olkin Measure of
sampling adequacy was found to be 0.854, Bartlett’s Test of Sphericity was 851.275 and
Significance was 0.000. These results implied that the data was adequate for conducting
the intended factor analysis to understand the dimensions of customer satisfaction, desire
to stay for longer duration and repatronage intentions of the respondents and the results
were found to be significant which made the factor analysis method appropriate
techniques for analysis of the data. The total variance of the items was found out as
78.627% and the overall reliability for the factors was obtained as 0.860. Of the three
factors, two factors had Eigen value greater than 1.0, but one had a score of nearly 1.0
(desire to Stay for longer duration) and hence this factor was also considered since it was
important to the research construct and its Eigen value was not far below the standard of
1.0. The subsequent analyses of multiple regression and correlation were then conducted
on the data and the results are pointed out below along with relevant discussions and
implications for Neway Karaoke Box.
Table 4: Factors Extracted for Customer Satisfaction, Desire to Stay for Longer
Duration and Repatronage Intentions
Kaiser-Meyer-Olkin Measure of Sampling Adequacy = 0.854

Bartlett’s Test of Spericity = 851.275
Significance = 0.000
Overall Reliability Coefficient Alpha = 0.860
Factor
Factor 1: Customer Satisfaction Loading Mean
Mean
42. I am satisfied with the facilities of Neway Karaoke Box 0.835 3.74
43. My confidence towards Neway is enhanced by its 3.64
0.825 3.53
facilities (2nd)
41. I think Neway Karaoke Box facilities are excellent 0.774 3.66
Factor
Factor 2: Repatronage Intentions Loading Mean
Mean
53. It is a wrong choice to patronage Neway Karaoke Box 0.835 2.91
50. I will repatronage Neway Karaoke Box 0.792 2.93 3.00
52. I will think of Neway when I want to go to a karaoke
0.772 3.16 (1st)
box
Eigen value =1.094 , Variance explained = 13.672%
Factor
Factor 3: Desire to stay for longer duration Loading Mean
Mean
49. Neway Karaoke Box is the best choice for passing time 0.864 4.37
4.31
48. I intend to stay for longer duration in Neway Karaoke
0.767 4.24 (3rd)
Box
Figure 9: The Factor Means of Different Factors on Customer Satisfaction, Desire to
Stay for Longer Duration and Repatronage Intentions (Higher value means lower
ranking)
‘Customer satisfaction’ was termed as factor 1 and it was represented by three statements
namely, ‘I am satisfied with the facilities of Neway Karaoke Box’ (0.835), ‘my confidence
towards Neway Karaoke Box is enhanced by its facilities’ (0.825) and ‘I think Neway
Karaoke Box facilities are excellent’ (0.774). The overall reliability alpha for factor 1 was
obtained as 0.911 and the variance 53.015% was explained. The factor mean for ‘customer
satisfaction’ was found to be 3.64 which signified that the customer satisfaction was
ranked the second among factors by respondents’ as an indication of their perceptions
towards the servicescapes of the Neway Karaoke Box services.
Factor 2 named ‘repatronage intentions’ involved three items namely ‘it is a wrong choice
to patronage Neway Karaoke Box’ (0.835), ‘I will repatronage Neway Karaoke Box’
(0.792) and ‘I will think of Neway whenever I want to go to a karaoke box’ (0.772). The
data when analyzed gave an overall reliability alpha of 0.814 and the 13.672% of the
variance was explained. The factor 2 was ranked the highest on its factor mean of 3.00 in
comparison to the other two factors. This showed that respondents at Neway Karaoke Box
had ‘repatronage intentions’ for Neway Karaoke Box’ service offering. It also implied that
since they would repatronage Neway Karaoke Box, it showed their satisfaction with the
servicescape and the service of Neway Karaoke Box.
The third factor ‘desire to stay for longer duration’ was termed as factor 3 and it comprised
of two statements namely ‘Neway Karaoke Box is the best choice for passing time’
(0.864) and ‘I intend to stay for longer duration in Neway Karaoke Box’ (0.767). The
reliability alpha for this factor was found to be 0.648 and the explained variance was
11.940%. The factor mean of 4.31 showed that the respondents considered this factor of
‘desire to stay for longer duration’ as the least important among all the three factors which
represented customer satisfaction. Despite of the levels of satisfaction the ‘desire to stay
for longer duration’ may not be a related outcome for the respondents of Neway Karaoke
Box.
4.2 Regression Analyses
The multiple regressions analyses were used to find out the relationship among eight
servicescapes dimensions (independent variable) and customer satisfaction (dependent
variable). Their relationship with customer satisfaction, desire to stay for longer duration
and repatronage intentions were further investigated.
With the dimension of servicescapes under study being divided into different categories in
order to enable accurate investigation of the different servicescape factors that has
different levels of influence on customer satisfaction, desire to stay for longer duration and
repatronage intentions, multiple regressions method was used and the eight servicescape
dimensions identified earlier were used as independent variables.
Table 5: Relationship between eight Dimensions of Servicescape and Customer
Satisfaction
Relationship among Eight Servicescapes Dimensions and Customer Satisfaction

Dimensions B Beta Sig. T
Ambient Conditions (Lighting and Temperature) 0.21 0.18
0.001*
2 8
Ambient Conditions (Air Quality and Noise) / 0.111 0.036*
Spatial Layout (Layout of Rooms, Equipments, Furnishings and 0.12
/ 0.029*
Sitting Comfort) 5
Functionality (Songs) 0.21 0.23
0.000*
3 4
Functionality (Decorating System) 0.10
/ 0.050
9
Signs and Symbols (Signs) / 0.118 0.030*
Artifacts (Theme of Karaoke Rooms) 0.15 0.21
0.000*
4 2
Cleanliness of Servicescape 0.30 0.38
0.000*
7 6
Adjusted R Square = 0.460 *p < 0.05
The results found and tabulated in Table 5 showed that seven of the factors out of eight
identified servicescape dimensions for Neway karaoke Box are significant with Sig. T <
0.05, except for ‘functionality’ (decorating system) which had a Sig. T of 0.05 and
explained 46% of the variance in customer satisfaction and the relationship between these
factors and customer satisfaction has an adjusted R Square of 0.460. Cleanliness of
servicescape scored the highest with Beta = 0.386, among the eight dimensions that were
previously found. The factor of ‘functionality’ (Songs) with Beta = 0.234 had the second
highest score which was followed by the ‘artifacts’ (Theme of Karaoke Rooms) factor
with Beta = 0.212. These Beta scorings for the different factors helped to identify the
factor ‘cleanliness of servicescape’ as being the most related and connected to customer
satisfaction as indicated by the responses from the respondents at Neway Karaoke Box. It
was also found that the eight dimensions of servicescape were able to explain 46.5% of
variance in customer satisfaction for Neway Karaoke Box service offering.
The table 6 below is the tabulation for the results obtained after regression analysis which
shows the relationship between the identified servicescape dimensions and the repatronage
intentions of the respondents at Neway Karaoke Box.
Table 6: Relationship among Eight Servicescape Dimensions and Repatronage
Intensions
Relationship among Eight Servicescape Dimensions and Repatronage Intentions

Ambient Conditions (Lighting and Temperature) 0.32 0.22
0.000*
7 8
Ambient Conditions (Air Quality and Noise) 0.04
/ 0.436
4
Spatial Layout (Layout of Rooms, Equipment, Furnishings and 0.09
/ 0.132
Sitting Comfort) 1
Functionality(Songs) 0.27 0.23
0.000*
2 4
Functionality (Decorating System) 0.10
/ 0.069
8
Signs and Symbols (Signs) 0.04
/ 0.475
2
Artifacts (Theme of Karaoke Rooms) 0.10
/ 0.088
1
Cleanliness of Servicescape 0.41 0.40
0.000*
3 6
The dimensions of customer repatronage intentions were also analyzed and it was found
that the eight identified dimensions of servicescape were able to explain 38.6% of variance
in repatronage intentions of the respondents at Neway Karaoke Box. The factor of
‘cleanliness of servicescape’ highly influential on the repatronage intentions with Beta =
0.406 and this represented a strong association with the factor of repatronage intentions for
the respondents at Neway Karaoke Box.
The table 7 below represents the data obtained from the analysis the relationship between
the eight identified servicescape dimensions and the desire to stay for longer duration at
the Neway Karaoke Box facility as indicated by the respondents’ ratings.
Table 7: Relationship among Eight Servicescape Dimensions and Desire to Stay for
Longer Duration
Relationship among Eight Servicescape Dimensions and Desire to Stay for Longer Duration
Ambient Conditions (Lighting and Temperature) / 0.137 0.032*
Ambient Conditions (Air Quality and Noise) / 0.152 0.017*
Spatial Layout (Layout of Rooms, Equipment, Furnishings and
/ 0.097 0.150
Sitting Comfort)
Functionality(Songs) / 0.118 0.069
Functionality (Decorating System) / 0.115 0.081
Signs and Symbols (Signs) 0.258 0.229 0.000*
Artifacts (Theme of Karaoke Rooms) 0.314 0.325 0.000*
Cleanliness of Servicescape / 0.115 0.101
The dimensions of customers’ intentions to stay for longer duration at Neway Karaoke
Box were analyzed and it was found that the eight identified dimensions of servicescape
were able to explain 17.9% of variance for this factor. The theme of the karaoke rooms as
a part of ‘artifacts’ and as a dimension of servicescape had the strongest association (Beta
= 0.325) with the desire to stay for longer duration. It implied that the theme karaoke
rooms attracted customers to stay for longer durations in the karaoke box.
4.3 Derivation of Relationships and Correlation
The reliability test was conducted in both of servicescapes dimensions and customer
satisfaction in order to prove their reliability for further analysis. Apart from Factor 5 in
servicescapes and Factor 3 in customer satisfaction, all of the other factors were found to
be reliable (Cronbach alpha Reliability > 0.70). So, the reliable factors were internally
consistent. For the factors with dimension lower than 0.70 in servicescapes, were also
considered. Based on the Table 5, Factor 5 was a sub-dimensions of ‘ambient conditions’
and the average reliability of both the factors of ‘ambient conditions’ namely Factor 3 and
Factor 5 were larger than 0.70 (alpha = 0.708). The other factor which had low reliability
in customer satisfaction was also kept in the research since the deletion of this factor
would lead to significant decline in the variance and thus, affect the construct.
The demographic and consumption characteristics for the respondents surveyed were
studied to get a general understanding of the pattern and segmentation scenario for Neway
Karaoke Box. Table 8 below clearly shows the demographic characteristics and
consumption background of the respondents surveyed at Neway Karaoke Box.
Table 8: Demographic and Consumption Characteristics of the Respondents
Demographic Characteristics
Item Data Percentage %
Male 31.4
Gender
Female 68.6
15-20 42.5
Age (in 21-25 48.3
26-30 5.8
years) 31-35 1.9
36-40 1.4
$2,000 or below 65.2

Monthly $2,001-6,000 20.3
$6,001-10,000 2.4
Income
$10,001-14,000 0
$14,001-18,000 6.3
(in HKD)
$18,001-22,000 1
Consumption Characteristics
Item Data Percentage %
Patronage Less than 1 time 40.1
1-2 times 39.6
Frequency 3-4 times 11.1
More than 4 times 9.2
per month
Lunch 54.6
Time Slot
Happy hour 19.8
Dinner hour 19.8
for Visit
Mid-night 5.8
Duration of Less than 1 hr 0
1-2 hr 9.2
Stay during 2-3 hr 42.5
3-4 hr 38.2
Every
More than 4hrs 10.1
Patronage
Among 207 total respondents 68.6% were female and 31.4% were male respondents.
People belonging to the age group of 15 to 20 years and 21 to 25 years, which were 42.5%
and 48.3% respectively, dominated a large percentage of the respondents sample
population. A majority of the respondents (65.2%) who visited Neway Karaoke Box had a
monthly income of $2,000 HKD or less and around 20.3% of the total had a monthly
income that ranged from $2,001 to $6,000 HKD. Only 14.5% of all the respondents
earned more than $6,000 HKD per month. This showed that the price of services offered at
Neway Karaoke Box wasn’t too expensive and it attracted customers from a broad range
of income groups.
Figure 10: Gender Distribution
Figure 11: Age Distribution
Figure 12: Monthly Income Level
Figure 13: Patronage Frequency per Month
Figure 14: Time Slot Patronage
Figure 15: Duration of Visit during Patronage
It was also found that most of the respondents (about 40.1%) patronized Neway Karaoke
Box less than once per month closely followed by a similar percentage (39.6 %) of all the
respondents who visited Neway Karaoke Box at least one to two times a month. This
showed that though Neway Karaoke Box pricing might be affordable, its service offerings
still might not be as popular as other entertainment services. About half of the total
respondents (54.6%) visited Neway Karaoke Box during their lunch break which ranged
from 10:00 am to 02:00 pm showing that this was the time which could be focused upon
by the business managers to provide the best level of service. Both happy hour and dinner
time slots were equally visited by 19.8% of the total respondents. It was found that only a
small percentage of respondents (5.8%) went to karaoke box at mid-night. This can be
interpreted that the karaoke box service need not be open at all the hours and the hours of
maximum visit should be focused upon for providing services that enhances customer
satisfaction. It was found that most of the respondents (42.5%) stayed in the karaoke box
for duration of two to three hours during a visit while 38.2% of the respondents stayed
there for about three to four hours during every visit and 10.1% of them stayed even
longer than four hours during their visits to the Neway Karaoke Box. The data indicated
that the respondents stayed in the karaoke box for at least an hour and since their duration
of stay was longer, the need for improving satisfaction through effective use of
servicescape dimension was essential (with reference to Figure 2 of Servicescape
Typology by Wakefield and Blodgett, 1994).
Table 9: Correlation between Customer Satisfaction, Repatronage Intentions and
Desire to Stay for Longer Duration
Pearson
Correlation Items Sig.
Correlation
Customer Satisfaction and Repatronage Intentions 0.555 0.000*
Customer Satisfaction and Desire to Stay for Longer
0.439 0.000*
Duration
*Correlation is significant at the 0.01 level
A correlation was also found between the three factors that led to or indicated customer
satisfaction and intentions and the results are tabulated in table 9 above. According to
Table 9, there is positive relationship between ‘customer satisfaction’ and ‘repatronage
intentions’ as found from respondents’ ratings with a Pearson Correlation value of 0.555.
The ‘desire to stay for longer duration’ and ‘customer satisfaction’ as derived from the
responses to the questionnaire showed a positive relationship between the two with
Pearson Correlation of 0.439. Both the relationships were found to be significant with Sig.
< 0.01.
4.4 Findings and Discussion
The results as obtained from the analyses of the respondents data matches to a large extent
with various previous research on customer satisfaction which and go on to suggest that
customer satisfaction is indeed influenced by how long a customer desires to stay in the
leisure service setting as well as his or her intention to repatronize the same service
(Bitner, 1992; Cronin and Taylor, 1992; Wakefield et al. 1996). So the hypotheses
supported by this research upheld the findings of the previous researches.
Thus, the factors affecting servicescape as obtained from the study can be represented in
the form of the revision of figure 1, and is presented below.
Figure 16: Representation of Factors affecting Consumer Perceived Servicescape as
obtained from the Study
(Dependent Variable)
Intentions to Stay for Repatronage Intentions

Longer Duration (Dependent Variable)
(Dependent Variable)
Consumer Perception of
Servicescape
Ambient Factors Design Factors (Facility Social Interaction Factors

(Facility interiors) Exteriors) (Independent (Other Dimensions)
(Independent Variables) Variables)
Serviceable
Temperature Factors like Customers
Odor cleanliness of
Noise rooms, packaging
Music / Noise of snacks, etc.
Air Quality
Sound System Employees
Visual Factors and Staff
Seating
like signs and
Equipments
symbols,
Color
artifacts, etc.
The variables as studied by the study under ‘ambient factors’ and ‘design factors’ are
being called independent variables here, since, these variables ultimately lead to customer
satisfaction. They help in building up and enhancing customer satisfaction, desire to stay
for longer duration and repatronage intentions of the customer which have thus been
called the dependent variable, dependent on the independent variables of ‘ambient factors’
and ‘design factors’. Since the ultimate goal for a service offering is to achieve customer
satisfaction, desire to stay for longer duration and repatronage intentions of the customer
(thus, termed as the dependent variables). These variables can only be achieved by playing
with or tinkering with the independent variables as identified for the study. The two
dependent variables ‘desire to stay for longer duration’ and ‘repatronage intentions’ are
dependent on the dependent variables along with their dependence on customer
satisfaction, and hence their dependency to customer satisfaction has also been shown.
5. Conclusion and Recommendations
This section brings us to the conclusive comments about the research and puts forth the
recommendations, limitations and further use of this research.
5.1 Conclusion
The dimensions of servicescape as designed and evaluated by the study were very useful
in understanding customer satisfaction for the karaoke box service offering especially for
Neway Karaoke Box. Among the various dimensions of servicescapes, cleanliness of
servicescapes was significantly prominent and high on customer’s wish list and his / her
perception of servicescape and consequently influenced customer satisfaction. It also
showed that the customers did not hold the cleanliness and hygienic factors of Neway
Karaoke Box in high esteem. In order to change this perception and make use of the
impact of cleanliness dimension of servicescape on customer satisfaction, every attempt
should be made to keep the karaoke box service setting clean and hygienic in appearance.
It will be worthwhile to channel more resources for keeping the servicescape setting clean
as it would have a great effect on customer satisfaction, and repatronage intentions.
Thus, it can also be stated that the best way to an enjoyable servicescape image in a
customer’s mind is by understanding the overall evaluation process undertaken by a
customer in his mind to create images and impressions about the various aspects of a
servicescape. This makes it imperative for future researchers to involve in in-depth
analysis and study of dimensions of servicescapes and their impact of a customer’s
perceptions about a service offering and consequently the level of satisfaction created
from such perceptions. This study thus helped to get an insight into servicescapes as an
independent variable in a service offering that help to define a service to a customer, help
him or her to form an image of the offering, have expectations from the offering and
finally have those fulfilled and thereby feel satisfied. The managerial significance of these
finding also will have to be taken into consideration which will go a long way in
improving the service offerings and thus reducing the changes of service encounter
failures.
5.2 Recommendations
The dimensions of servicescapes as obtained from literature review were too general to be
effectively investigated. After using factor analysis, these dimensions could be broken
down into eight dimensions and each dimension represented one or few important
parameters of servicescape for Neway Karaoke Box. It was found that the customers are
dissatisfied with the air quality in Neway Karaoke Box and they also thought that the
rooms were very noisy as the sound arresters installed between the rooms were not good
enough to lower the levels of noise originating from different rooms. By referring to the
demographic data, it was found that most of the customers stayed in the karaoke box
rooms for at least around two to three hours and thus, a bad air quality or in sufficient air
circulation which might lead to stagnant air and odors in the rooms might be a reason for
lowering satisfaction level or causing dissatisfaction for the customers. It would make a
lot of sense if Neway Karaoke Box management put in some efforts to improve this
situation by the following suggested methods:
(1) Installing air purifier in rooms for enduring adequate ventilation in the rooms instead
of just installing air freshener;
(2) Cleaning up of the rooms immediately after customers have left them;
(3) Separation of smoking and non-smoking rooms to do away with the tobacco smell and
cater to customers who are non smokers;
Neway Karaoke Box should extend the number of themes of karaoke rooms in other
branches as well. Variety of themes in the karaoke rooms can be adopted as per the
suggestion of an interviewee during the focus group interview (refer to appendix Focus
Group Script). If the customers have memorable impression about the service, they will
always think of Neway Karaoke Box, whenever they think about visiting any karaoke box
in specific or entertainment options in general.
The respondents also regarded cleanliness of servicescape premises very highly and their
perceptions were dependent on the hygienic impression of the servicescape setup. The
refreshments available in the karaoke rooms with individual packing provided them with
that hygienic impression. It shows that the efforts put in by Neway Karaoke Box after
SARS outbreak to provide a clean and hygienic service to its customers was a success in
improving customer perception as well as influencing customer satisfaction. This factor
can play an essential role in enhancing the intentions to stay for longer duration and
repatronage intentions. Thus, Neway should keep up the good work and maintain the
hygienic environment in every branch.
It was found that the respondents were satisfied with the signs and symbols at Neway
Karaoke Box. They moderately agreed that the signs in Neway Karaoke Box were
sufficient, clear and easy to understand. Neway should make attempts to some improve the
signs and symbols so that customers would be strongly satisfied with these.
The respondents also found the collection of music for popular songs as a parameter in
functionality to be as per their expectations and they were satisfied with the songs which
Neway Karaoke Box had to offer. They perceived that the songs provided by Neway
Karaoke Box were quite trendy. Even though customers were satisfied with this factor, it
was not ranked highest among all the factors. Thus, Neway should try to acquire the newer
songs and broaden their range of song choices which will help Neway Karaoke Box to
maintain its dominant position among its competitors in the industry.
The most highly rated factors by the respondents at Neway Karaoke Box were the
decorating system parameter in functionality and the lighting and temperature parameters
in ambient conditions which showed that these factors were responsible for influencing
customer satisfaction. Consequently, Neway should keep up all the satisfactory factors for
maintaining its service quality. These dimensions contributed to a good perceived quality
of servicescape among customer’s mind.
Neway should consider all servicescape dimensions simultaneously for being the best
Karaoke Box in Hong Kong and look to improve or implement these factors on a step by
step basis depending upon the priority and funding situation. The air quality and the issue
with noise ought to be improved at the earliest. Obviously, cleanliness was regarded as the
most crucial elements associated with customer satisfaction. So, Neway should consider
cleanliness of the servicescape setting as its first priority. In order to retain customers for
longer duration in the karaoke box, Neway can plan to redecorate its karaoke rooms based
on varied themes.
The managerial implications for the research results of this research also include an option
for the business managers of Neway karaoke Box and other karaoke box businesses to
know and understand how their customer groups are defining satisfaction. This can assist
the managers and business owners to interpret the satisfaction scales correctly to aim,
describe and respond to the levels of satisfaction required by customers. Instead of trying
to address all the aspects of a service encounter experience and dimensions of
servicescape, managers can focus on directly controllable factors that can have direct and
high impact on customers. This research can be taken as a tool to obtain ‘original’ and on
hand customer feedbacks immediately after a service encounter at the karaoke box which
will help in making relevant managerial decisions.
5.3 Limitations
There are several limitations that plague this study and this attempt cannot be called
complete. Limitation of funding, data availability from various sources, assumptions made
during the analysis of the data obtained from questionnaire, are all the sources from where
errors might have cropped up into the study results. The time duration of the project is not
sufficient to conduct an in-depth study. The data collected might not have been a true
representation of the population being studied and there are limitations of the researcher
that cannot be neglected as well. The research scope is also limited in terms geographical
confines, literature reviews as well as the analysis of the role of karaoke box servicescape.
The data should have been collected from customers of every branch of Neway Karaoke
Box in order to lessen the discrepancy, Moreover, since judgment sampling was carried
out; the research might not representative of the whole population. Regarding to the
instrument used in this research, 7-point Likert scale questions were used. Central
tendency problem was caused and the results might not be so representative and accurate.
Furthermore, the questions in the questionnaires were not based on the questionnaires of
the previous researches. The validity and reliability of the statements can be doubtful and
to address this issue factor analysis and reliability tests were conducted.
There was no previous research done on karaoke box servicescapes and customer
satisfaction. The model creation just followed the relevant researches by extracting parts
of their structure and included them in this research model. Therefore, the three
dimensions of servicescapes including ambient conditions, spatial layout and functionality
and signs, symbols and artifacts might not be the only appropriate dimensions for
measuring customer satisfaction of the karaoke box servicescape. Even if some adjustment
had been made in order to build up a tailor-made model for this research, not all the
servicescapes could include in the model. The excluded servicescapes might also play an
influential role in customer satisfaction. Therefore, further study about this topic will be
needed in order to compensate for the limitations of this study. Also, only a single service
provider (Neway Karaoke Box) was considered for the study due to limitation of
resources. In order to truly understand the factors of servicescape that affects customer
satisfaction and repatronage intentions, future studies involving larger and varied data sets
from different sources should be considered.
5.4 Further Use of the Research
There are several uses of this study which will enable generating a greater understanding
about the dimensions of servicescape and their relations to customer satisfaction than we
have today. The future uses for this study will not and should not be limited to academic
purposes only and should reach out to include the tactical and strategical aspects of
business especially in this age of economic instability, market fragmentation and fast
changing customer attention span.
This study successfully determined various servicescapes elements that are essential for
customer satisfaction of a karaoke box service offering. It proved previous construct about
the relationship between servicescapes and customer satisfaction to a large extent. Hence,
the conceptual framework will be helpful for further in-depth research. As there are still
some servicescapes that have not been evaluated, future research can be carried out to
further investigate into those dimensions of servicescape. Likewise, the association
between servicescapes and other factors such as loyalty, customer retention can also be
studied.
A servicescape is made up of various components or dimensions which when carefully put
together provide specific environmental cues to a customer regarding a service offering
and help him to form perceptions and experience satisfaction. This study can thus pave
way for creation of a kind of servicescape that will play with the cues influencing
customer perception and levels of satisfaction. With the help gained from this and similar
studies, a business owner of a service offering can help to create an image in the mind of
the customers and enhance service encounters. With knowledge about the roles that the
cues of a servicescape play on the psychology of a customer, a service provider can look
to strategize and improve upon his / her chances of remaining competitive in the market
and diversify and integrate several offerings together. For example, In case of Neway
Karaoke Box, the management can use this study and similar studies to make changes to
his servicescapes and influence customers to repatronize their business, thereby generating
sales and consequent profitability for the business. While designing new branches of
Neway Karaoke Box too, the factors discovered in this study and similar studies can be
taken into consideration and an impressive offering can be provided to the customer. This
study can also help karaoke business as well as other businesses to strategize segmented
targeting of their customer base to elicit greater response and profitability from the
existing and potential customers.
One cannot disagree that satisfaction more often than not results into profitability and thus,
the future implication for this study would also be an attempt to relate servicescape
elements to the aspects of sales and profitability, thereby making real business sense.
Another study into the understanding of loyalty in relation to satisfaction from
servicescape dimensions will help to retain customers and leverage the relationship with
loyal customers to increase market share and share of customer’s mind.
Thus, this research opens up a gamut of avenues for further researches that would include
generating a greater understanding about all the aspects of servicescape in relation to
customer satisfaction and repatronage intentions, linking customer satisfaction to customer
loyalty and finally linking loyalty to growth in revenue and profitability.
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Appendix
Survey of Neway Karaoke Box Facilities

Hello! I am a University student studying marketing. I would like to conduct a survey on
the customer satisfaction in terms of karaoke box facilities and hope that your valuable
opinions are involved. All of your valuable opinions will only be used for academic
analysis. Thank you!
1. Have you been to Neway Karaoke Box?

____ Yes ___No (If “No” please go to the end of questionnaire)
2. How many times did you visit the Neway Karaoke on an average in a month?
____Less than 1 time ____1-2 times
____3-4 times ____More than 4 times
3. Which are the time slot(s) of your visit to the Neway Karaoke Box?
____ Lunch (10:00-14:00) ____Happy Hour (14:00-18:00)
____Dinner (18:00-00:00) ____Mid-night (00:00-06:00)
4. How long do you stay in karaoke box during every visit (approximately)?
____ Less than 1 hour ____ 1-2 hours ____ 2-3 hours
____ 3-4 hours ____ More than 4 hours
Please state your opinion towards Neway Karaoke Box facilities according to your
experience. (1 represents strongly agree and 7 represents strongly disagree)
5. Temperature of lobby is appropriate 1234567

6. Temperature inside the rooms is appropriate 1234567
7. Sufficient lighting in lobby 1234567

8. Sufficient lighting in rooms 1234567

9. Button for adjusting lighting in rooms helps to enhance the 1234567
atmosphere
10 Ventilation in rooms is bad 1234567
.
11. Rooms are always full of tobacco smell or odor 1234567
12 Insufficient sound arrester among rooms 1234567
.
13 Size of room assigned is large enough for the size of the group 1234567
.
14 Layout of rooms is convenient to customers 1234567
.
15 Table size and height inside the rooms is appropriate 1234567
.
16 Leaflet standees occupy large part of the table 1234567
.
17 Food containers occupy large part of the table 1234567
.
18 Seats in rooms are very comfortable 1234567
.
19 Sufficient seats inside the rooms 1234567
.
20 Size of television screen inside the rooms is appropriate 1234567
.
21 Tone quality of microphones is good 1234567
.
22 I can control the level of microphones volume or echo easily 1234567
.
23 Microphone cables always inter-twist and block the way 1234567
.
24 The room décor is user-friendly 1234567
.
25 Remote control is user-friendly 1234567
.
26 Computer games in decorating system entertain me 1234567
.
27 Varity of songs for me to choose 1234567
.
28 New songs are available quickly 1234567

.
29 Many new songs available always 1234567
.
30 New songs are trendy 1234567
.
31 Posters posted in lobby and corridor offer me the most updated
information about new songs 1234567
32 Price list in lobby let me knows the fees clearly 1234567
.
33 Sufficient signs / route signs (e.g. Toilet signs) 1234567
.
34 Signs / route signs can be easily understood 1234567
.
35 Sufficient washrooms 1234567
.
36 Layout of karaoke rooms raise my intention to sing 1234567
.
37 Layout of karaoke rooms make me happy while singing 1234567
.
38 Nuts and snack packs are provided in a hygienic manner 1234567
.
39 Corridor is clean and hygienic 1234567
.
40 Facilities inside the rooms are clean and hygienic 1234567
.
Please state your satisfaction level towards Neway Karaoke Box. (1 represents strongly
agree and 7 represents strongly disagree)
41 I think Neway Karaoke Box facilities are excellent 1234567

.
42 I am satisfied with the facilities of Neway Karaoke Box 1234567
.
43 My confidence towards Neway Karaoke Box is enhanced with
. every visit 1234567
44 My satisfaction level towards Neway Karaoke Box is largely 1234567
. affected by its facilities
45 Neway Karaoke Box facilities disappoint me 1234567

.
46 The experience of patronage Neway Karaoke Box is exactly
. what I need 1234567
47 I truly enjoy singing karaoke in Neway Karaoke Box 1234567
.
48 I intent to stay longer time in Neway Karaoke Box 1234567
.
49 Neway Karaoke Box is the best choice for spending time alone
. or with friends / family 1234567
50 I will repatronage Neway karaoke Box 1234567
.
51 I will patronage Neway karaoke Box more frequently 1234567
.
52 I will think of Neway Karaoke Box when I want to go to a
. karaoke box 1234567
53 It is a wrong choice to patronage Neway karaoke Box 1234567
.
54 What is your gender?

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

End of Questionnaire

Customer Satisfaction Study For Karaoke Box Services Cape

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Customer Satisfaction Study for Karaoke Box Servicescape

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

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

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

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

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

deciding my research topic.

observation and teach me how to make my project better.

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

4.4 Findings and Discussion 89

Desire to Stay for Longer Duration

Demographic and Consumption Characteristics of the 83

Correlation between Customer Satisfaction, Repatronage

[Figure 1] Representation of Factors affecting Consumer Perceived 23

[Figure 5] Successful Product or Service Offering 49

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

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

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

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

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

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

offering and the service provider.

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

motivation for repatronage.

Researchers have spent substantial research efforts on understanding exchanges which

the relationship between servicescapes and customer satisfaction in previous researches

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

1.1.1 Project Aim

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

importance of servicescapes and the role played by servicescapes in establishing

behavioral and affective customer responses to the karaoke box service.

Recommendations are provided to improve the dissatisfaction with such existing

relating karaoke box servicescape to customer satisfaction and retention.

1.1.2 Project Scope

with the constraints of budget and time.

1.1.3 Structure of Dissertation

the market leader in providing karaoke box servicescape.

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

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

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

questionnaire administration to various karaoke box servicescape customers. It highlights

the role of karaoke box servicescape in customer satisfaction.

1.2.1 Services Industry

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

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

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

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

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

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

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

created customer satisfaction.

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

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

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

emphasize on differentiation and create brand recognition among customers is becoming

servicescape is no exception to the rule.

The table below lists the servicescape dimensions for a service.

Table 1: The Servicescape Dimensions for a Service offering

Servicescape Dimensions Other Tangibles

Facility exteriors Facility Interiors

Stationary, Billing Facility,

1.2.2 The Origin of Karaoke Industry