CHAPTER 2

LITERATURE REVIEW

2.1 Definition:
The strength of the service and excellence in performance of the desired service is a key to
Effective Service Marketing (Berry and Parasuraman, 1991). In simple terms services
marketing means marketing of services. It is important to note that marketing of services is
quite different from marketing of goods, because of the significant difference in the nature
and roles of services marketing; one of the main differences between these two is Word-ofmouth communications (Berry and Parasuraman, 1991).

2.1.1. The Evolution of Service Marketing:

According to Hurd and Meldrum (2008), the services marketing is the advanced era in the
history of marketing. In this era, there was an intense concentration upon the products while
in the services marketing era, customers are being concentrated. However Baron and Harris
(1995), exhibits the identifications made by Fisk, Brown and Bitner that the evolution of
Service Marketing happened in stages. They are:
1 The Crawling Out stage which was before 1980;
2 The Scurrying About stage which lasted for 6 years between 1980 and 1986;
3 The Walking Erect stage from 1986 present.
Crawling Out:
Vargo and Lusch (2004, p-325) categorised the age prior to 1980 as Crawling Out stage in
1993. During this time Marketers know some information regarding goods and continue to
think that the remaining was service. So finally this stage failed to contribute much to the
recognition of services.
Scurrying About:
According to Baron and Harris (1995), this stage was developed with a concept of quality of
service operations and also quality of goods. Zeithamal, Berry and Parasuraman(1996)
developed a gap model of service quality which they created a mode of analysis in peoples

mind to distinguish the gap present between the perceived services to the expected service.
Booms and Bitner(1981) concentrated on the marketing mix and added 3 more additional Ps
to the existing 4 Ps of marketing mix which includes people, processes and physical
evidences. Rafiq and Ahmed(1995) in their literature clearly points out the significance of
expanding the marketing mix and they concept of marketing mix was found to be more useful
in the field of service marketing according to them
2.1.1. Marketing Mix: (4ps + 3ps).
Marketing Mix is the set of marketing tools by which the organisation develop strategies to
achieve marketing objectives. Marketing mix consists of four Ps which are Product, price,
Place and promotion. According to Kotler and Armstrong (2008), this marketing mix can
able to create a demand for their own companies product. This marketing mix is also called
as Four Ps or Four Cs or Four Ps and Four Cs (Robins, 1991) because Kotler (2008) points
out that the four Ps can better described as four Cs
Product:
Product can be well defined as the combination of both goods and services because this is the
thing in which company offers a goods which is advantageous to the market (Kotler and
Armstrong, 2008) and this is one which is prepared for customer benefit (Bennett, 1997). For
example the main features of Sun lotions would be to protect body skin from ultra-violet
rays. Therefore companies like LOreal, Avon Bronze, Ambre Solaire, Piz Buin, Soltan etc.,
are some of the famous companies where their product will be these lotions. In this way
product is directly correlated to the customer solution and the same with the case of service.
For example in the case of service regarding to the product is appearance of the product, by
the appearance, customer can able to resolve his/her problem. Therefore this service can also
be directly correlated with customer solution.
Price:
Price is simply defined as the value of the product and according to Kotler (2008) it is the
cost which a customer has to pay on the product. This pricing strategy of a product will
include several elements, including discounts, allowances and so forth. In general if we
consider any LCD brand in Tesco we can find several schemes of discounts for customers.
For example the offer with buy now pay later is also a marketing strategy in which the
pricing of the product is arranged for customers convenience. We can also consider other

pricing strategies like buy one get one free (BOGOF), three for two in retail markets like
Boots, sainsburys etc., as they are improving the customers vision towards the product. This
is known as pricing strategy and the offer which was given to the customer is known as the
service and estimating and implementing based on the psychology of the customer is known
as marketing.
Place:
Place is the element which a company has to think in order to launch their product because
every company will look after to produce the product and make it available to the target
consumers (Kotler, 2008). The distribution of goods and services need to ensure customer
convenience, [Kotler and Armstrong (2008), Brassington and Petit (2006)]. Some authors in
their books describe this as Distribution (Peter and Donnelly, 2004). In this context if we
consider Boots, the store which was in Town centre will be busier and much bigger than the
store in the Plas Coch retail park because customers feel convenient in coming to town centre
store rather than other store; therefore the facilities are also more compared to other store
which was away from town centre. For example considering pharmacy section in Boots plas
coch and Boots town centre will describe in brief about the importance of place. The store in
town centre has dispensary while the other store did not have dispensary.
Promotion:
Promotion is a concept in which the merits and demerits of the products are communicated
and also to make the target customers to buy. According to Peter and Donnelly(2004), in
simple terms which consists of description and justification of planned marketing strategy. In
this context we will consider the case of Procter and Gamble (P&G) which was researched by
Ailawadi, Lehmann and Neslin (2001). They found P&G concentrated on the advertising.
Apart from this advertisement there is another important media by which consumers show
interest towards the product - deals and coupons. So from the literature of Ailwadi et.al.
(2001), we can understand that the deals and coupons can sometimes more effective than
advertising. In their work they stated that during 1992-1996 P&G stopped all its deals and
coupons rather increased their concentration on advertisement in order to reduce the
operating costs. But this resulted to the decrease in customers even though company profited
for some time in the beginning. So this says that for promotion primarily advertisement is
important but later on deals and coupons play key roles for maintaining the product in the
market.

This marketing mix faced many criticisms on par with services marketing according to Rafiq
and Ahmed (1995) in their UK survey analysis. This expansion of marketing mix was also
supported by Robins, et al. (1991). Ohmae (1982) stresses the concept of interactive
relationship with the help of three Cs. After that Gronroos (1984) gives the concept of
Interactive Marketing where the relationship between a customer and employee is developed
and thus states this as a key factor for market making. Kotler (1991) supports the argument
of the customer-employee relationship. If we observe the criticisms of the previous
marketing mix, we can understand that the previous marketing mix was not comprehensive to
cover some of the key features of services concerns. So according to Rafiq and Ahmed
(1995) the marketing mix was modified for the sake of improvement in services marketing of
the companies - the revised marketing mix consists of additional 3 Ps which are Participants
[in some other literature it was stated as people, e.g., Brassington and Petitt (2006), Egan
and Thomas (2003)], Processes, Physical evidence. The revised mix mainly concentrates on
services for example according to the literature produced by Rafiq and Ahmed (1995) the
concentration will be on customers because the new marketing mix mainly with the
Participants or so called people, which we can draw conclusions about the behaviour of the
customers and degree of involvement with the customer simply customer contact. Coming to
the case of Physical evidences, it is indirectly related to the customer satisfaction which
involves layout, furniture, colouring which makes customer attention on the product or
service. Finally processes which will help in giving awareness regarding the customer
involvement, customer direction etc., which are directly or indirectly related to the services
marketing.

Physical Goods Producer

Product
Price
Promotion

Intermediaries

Place
Participants
Process
Physical evidence

Place
Participants
Process
Physical evidence

Services Provider

Product
Price
Promotion

Place
Participants
Process
Physical evidence

Customer

Fig.1: The Extended Marketing Mix Layout, relation between producers and intermediaries in goods and services marketing.

Source: Marketing Intelligence and Planning by Rafiq and Ahmed (1995). Pg: 8
Walking Erect:
This is a stage from 1986 to present. Baron and Harris (1995) states that all the analysts
focussed on the marketing problems of the services and thus there developed concentration
on the services marketing. Their issues in this stage include service encounters, Service
design, Perceived Service, Quality and Customer Satisfaction, Internal Marketing and
Relationship Marketing.

2.1.2 Services: (Definition and Classification)

There are many definitions for the services, but drawing the best and mostly used definition
of services is Services are economic activities or benefits offered for sale that are
essentially intangible and do not result in the ownership of anything (Kotler, 2001, p7). The
other terms of explaining services of 1960s according to American marketing Association is
the activities or benefits which are offered with respect to the sale of goods, but it was refined
as the service may or may not require the tangible material to execute (Donald W. Cowell,
1991, p22). The weight of services in the developing era can be easily analysed by studying
the report of the World Bank, World Development Report, 1985. Pg: 238 which was the

Changing composition of the labour force in the Arab and Gulf countries stated in the Journal
of Habib and Kaseem (1989). The figures displayed in the table provided in their work will
clearly show the increased percentages of labour force in the services sector from 1965 to the
1980. Arab Gulf states and even some of the gulf countries are showing drastic increase in
their figures from past to the present.
The scope of the services is very wide and categorised as follows: service activities and
service as concept. Again the Service activities are subdivided into several branches which
include (a) Customer Service, (b) Service based activities, and (c) Added value activities.
And in the same way Service as Concept is also sub divided into branches which are (a) A
service organisation, (b) as a core product, (c) as an augmented product, (d) As a product
support, (e) as an act (Audrey Gilmore, 2003, p5).
Services are based on 4 characteristics namely Intangibility, Inseparability, Heterogeneity and
Perishability. Lovelock and Gummesson (2004) challenges the usefulness of services
marketing and its validity by the help of services marketing core paradigms, these challenges
can be successful only by asserting the above mentioned four characteristics of the service
marketing which will make services make uniquely different from goods.
Intangibility:
Services are defined as intangible because they cannot be touched but only experienced e.g.,
if we are waiting for something in an organisation and if the employee of the organisation
drives us there the service provided by him will be measured in the terms of our desire
fulfilled. Where we didnt sense the service but just we felt the service, this is termed as
intangibility (Donald W. Cowell, 1991, p22).
Lovelock and Gummesson (2004) in their work present the arguments of several scholars on
tangibility. They differentiated intangibility into two types namely physical intangibility and
mental intangibility, in the same case he also presents the argument of Laroche, Bergeron,
and Goutaland (2001) as the third differentiation of intangibility will be generality, he also
developed a scale for the measurement of three dimensions. So finally considering all the two
studies Bielen and Sempels (2003, p. 12) concluded that the Intangibility is bidimensional
which has (a) Physical dimension in which the product or service is responsible and (b)
Mental dimension in which the extent of difficulty caused in order to explain clearly about
the service or product in a question.

The tangibilizing the intangible can be observed in the context of service provider such as
food restaurant where the head waiter or server does not keeps the customer waiting for a
long time.
Lovelock and Gummesson (2004) also points out that in the modern literature of service
marketing, the differentiation was not explained and not mentioned as well, because he
introduces the statements of Pride and Ferrell (2003) that intangibility means services are
not physically possessed and therefore cannot be touched.
Recalling the words of Zeithaml et al. (1990) who identified appearance of physical facilities
in other words design or layout of the organisation, communication facilities, equipment
which come under tangibles act as one of the key dimensions for the service quality.
In this context if we consider any service provider as example such as any super market, in
that super market we can able to observe goods which are organised making shopping easy
and comfortable, we can able to observe the name plates indicating our way towards the
goods, which will come under the services being provided to the customer by concerned
organisation. This kind of identifying goods in particular position in particular place and
shelves will be best illustration for the services being classified as physically intangibility,
Not only this many examples such as hip replacement surgery, sporty hair dressing, a clean
office etc.,
So in the above mentioned examples we can able to pass through a tangible nucleus for an
intangible service molecule, apart from this we have some intangible nucleus also which will
include pre-purchase functions in which customer will not play a role, the pre-purchase
activities include the delivery of goods for stocking the shelves.
Another case to be considered is mental intangibility, according to the Lovelock and
Gummesson (2004), mental intangibility is inbuilt in the services and cannot be correlated
with the physical intangibility. And coming to final conclusion of intangibility, if we consider
service as a molecule then there will be two nucleuses namely tangible nucleus and intangible
nucleus in the case of physical intangibility.
Inseparability:
Services are said to be Inseparable because the production and consumption take at the same
time (Sierra and McQuitty, 2005, Cowell, 1991, p23). For example if any customer stretches

a query chart then the service provider will respond to it simultaneously to the query whether
it is positive or negative. But for goods it is separable because the production of goods goes
before distribution and storage before being consumed.
Sierra and McQuitty (2005) states that the role of service is mainly centred on the employees
as these are the persons who are responsible for presenting a good and quality service, at the
same time we cannot ignore customers. B. Nicouland (1989) in her article presents a major
difference between goods and services as Goods are first produced, then sold and
consumed. Coming to the case of services, these are first sold, then produced and
consumed. So for this personal selling plays a major role in marketing of services, therefore
the public contact personals will be selected in a very screened process and trained according
as well to meet their selling standards. So finally Sierra and McQuitty (2005) in their work
states that employees must have impact on the customers expectations and perceptions and
ultimately leading to the satisfaction of the service which makes marketing more simple.
The statement given by Nankervis (2005) is that characteristic of services management will
be focussed mainly on maintaining and establishing of services involving both internal and
external stakeholders.
Heterogeneity:
This is otherwise called as Variability and service can be characterised as heterogeneous
because the McDonalds and Subway will have different ways because McDonalds will offer
Takeaway facility but Subway do not have this service though these two restaurants produce
service in the food sector, their way of providing service varies from each other. Not only the
service variation occurs because of established rules but also due to the staff who have
different approaches in delivering services to the customers. The customers are delighted
with the service given and we can observe the heterogeneity in this environment. According
to Zeithaml and Bitner (2003) and in general as well, we can say that no two customer will be
alike and wish the same service, every customer will be in urge of different kind of service
and even different way of service, therefore in the concept of service marketing this
heterogeneity holds significance.
Coming to other point of view not only different types of customers count for different types
of services to be delivered but also there are external factors which comprise of the weather
conditions in case of delivery, crowd, the place of rendering service play key roles in

delivering different types of services,(Desmet et al. 1998). Heterogeneity makes the

segmentation of services challenging and difficult. Bennett and Strydom (2001) sate the
services provided to a segment must be similar. But there is some limitation with the size of
segment in order to provide service similarly. They are, (a) the segment must be small, if not
the needs of the customers will be unmet, (b) the accessibility to the services must also be
constrained to fulfil the customer needs full pledged in the case of segment, example
advertising etc.,
But all the service providers are not small and majority of the service providers will have
large segments. Therefore the characteristic of service is considered as heterogeneous, also
heterogeneity in providing services.
Perishability:
The services cannot be stored and as discussed earlier in the Inseparability these are produced
and consumed at the same time for example in the case of goods, they are manufactured and
are stored in warehouses and then consumed when necessary but in the case of airline seats
not purchased cannot be filled, the same will be the case with services also (Helen
Woodruffe, 1995).
2.1.2 (a) Service Quality:
Michael (2005) in his journal delivers that the service quality can be measured by three
approaches, of which is GAP model (Parasuraman et al., 1991), the second approach is
TOPSIS (Hwang and Lin, 1987), and the third being Loss Function approach (Ross, 1988).
But Gap model is widely used for the measurement of service quality, Michael (2005) in his
work raises the importance of the remaining two approaches in accordance with the Gap
model. In his Journal he points out the limitations of Gap models and thus highlights the
importance of the Quadratic Loss Function and TOPSIS methods, for example in
Michaels(2005) work it was mentioned that the compromising situations in providing
service may not be justified by Gap model because it fails to handle those situations while
Quadratic Loss Function will handle this case very efficiently because in general point of
view drawback in one level may leads to the deterioration of the next step or remaining steps.
Whilst defining in abridged form the three approaches can be described as follows, they are:
(a) Gap model: The ranking will be given on the service quality gap difference between
perceived services and the expected service. So the base of this is customer

expectation. This can be easily understood and widely followed. This approach has
weaknesses such as perception may be more relevant than gap, compensatory design
etc.,(Michael, 2005).
(b) TOPSIS (Technique for order preference by similarity to ideal solution): The ranking
is done based on the distance from positive ideal solution to the distance from the
negative ideal solution and this assesses the longest and shortest distance from the
solution. Therefore here the consideration is mainly on the ideal solution. This
approach sounds logical, and it comprises of both best and worst alternatives. As in
the same way of gap model this approach also has some weakness such as relative
importance of distance from the positive and negative solutions is not considered.
(c) Quadratic Loss function: In this approach the ranking of service quality is only done
considering the maximum value. In this case the maximum value is taken into
consideration, therefore it can be considered as non-linear, easy to use etc., but
coming to weakness of this approach it do not have optimal solution.
GAP Model:
Theory:
Parasuraman et al. (1991) first coined the Gap model as an analytical tool to measure service
quality. This Gap model helps in conceptualising perceived service quality as the service
rendered by the present firm. Parasuraman et al. (1991) also gave word Service Gap,
which means the difference between the expectation of service quality from the excellent
service provider to the perception of the service quality of the present provider. Parasuraman
et al. (1991) identified five dimensions of service from their survey and thus established this
SERVQUAL scale for service quality. Cronin and Taylor (1994) in his journal presents both
SERVQUAL and SERVPERF, but out of these two Cronin and Taylor (1994) coined the
term SERVPERF which is the measurement of service quality based on the performance, but
according to the Parasuraman et al., who coined SERVQUAL which is a scale used for
measuring service quality based on the service rendered to the customer.
Out of these two scales SERVQUAL scale is mainly used compared to the SERVPERF and
the first scale was widely spread in different sectors of services (Michael, 2005)

Figure 2: The Gap Model

Source: Adapted from Per et al. 2008: 136.

From the figure 2 it is evident that there are 5 gaps in continuum among which the Gap 1 is
longer than other gaps which have been shown in the figure. Before going in detail about the
gaps which are displayed in the figure 2, we must note that the description which will be
given is between an organisation and customer by which the quality of the service can be
measured. This Gap analysis is used in many service organisations for example in hospitals,
manufacturing firms, banking and many other places. For example Brown and Swartz (1989)
quote the example of a patients satisfaction in regarding to his/her physician.
According to parasuraman et al. (1991) the Gaps are defined as follows:
Gap 1: This is a gap between what customer expects from the service and the management
assessment on the expectations of customer. In other terms Brown and Swartz (1989) defines
as the difference between the customer expectations to the customer experiences.
Gap 2: This is a gap between the assumptions of the management on customer expectations
to the service quality specifications in my view it may be internal because in figure also we
can observe that Gap 2 is in the organisation block.

Gap 3: This is the gap between the service quality specifications to the actual service to be
delivered. In my point of view this may also considered as internal gap within the
organisation because no customer is involved in this activity, while the service which we
usually render to the customer is considered.
Gap 4: The Gap between actual service which will be delivered to the external
communications.
Gap 5: This is a gap between customer expectations to the customer perceptions, and this
involves mainly customer.
These are the five gaps which are very important in analysing service quality and can be
measured by SERVQUAL scale, although this was widely used scale for measurement
Cronin and Taylor (1994) explained some of the criticisms on the SERVQUAL scale and the
performance measurement taken place by the help of SERVPERF scale.
2.1.2 (b) Customer Satisfaction:
The growth of service marketing today is highest in business markets (Yanamandram and
White, 2007). The best the perceived service the more the customer satisfaction we delivered.
Therefore the main base for best perceived service will be Word-of-mouth communication
and personal needs.
Satisfaction

Repurchase

Positive disconfirmation

Quality

WOM
Value

Fig:3 Structural equation model of antecedents affecting repurchase and word of mouth
Source: Lori et al. (2008), Journal of Services Marketing, Pg: 364.

Satisfaction in other terms can also be termed as transaction- specific evaluation of purchase
which met the expectations of the customer (perceived service) (Cronin and taylor, 1992,

1994). Some other authors gave definition for satisfaction as a emotional response,
transaction done correctly at the first time. From the above stated different definitions we
can able to analyse that whatever the definition of satisfaction might be but word of mouth
communication must be common in all of those.
According to Lori et al. (2008) the positive word of mouth communication is a key factor for
customers selection and also use of services by the customer. In his literature he describes
about the research undergone on the customer dissatisfaction and other customer complaints.
Finally Lori et al. (2008) in his research states that this is mainly dependant on nature of
services.
Swanson and Davis (2003) states that the quality of servicescape is positively depended upon
the word of mouth intensions when the management and service rendering employee attribute
their responsibility equally towards service experience. In their work they also states that in
product related word of mouth communication, the customers satisfaction or dissatisfaction
can be easily investigated by the consumption of goods. According to them if a customer is
satisfied with the perceived service he/she will talk about service experienced to another
person may not exclusively be service encounters. In this context the profitability of the firm
is also a key feature to be considered and directly proportional to the customer satisfaction.
Lisa and Campbell (2004) in their work describe the stages involved in customer service
satisfaction. They pointed that the customer satisfaction is achieved in 5 stages. They are:
(a) understanding customer needs by the help of research,
(b) setting standards for service,
(c) Communicating and implementing by leadership traits.
(d) Delivering the services and
(e) Maintaining culture of service
In their work they also describe that in the first stage of customer satisfaction the above
factors should be considered. In general each customer has their own requirements of service;
therefore the above steps fit in the first stage. The second stage includes analysis of
performance measurement of the facilities management department. The third stage of the
customer satisfaction involves management team to act as representives for the customers.
This indirectly displays their focus and attention towards customers. Delivering of services
according them involves putting the first three stages in action.

2.1.3 Classification of Services:

Steve Baron and Harris (1995) states that mainly Services are classified into 5 methods.
1. Based on Operational dimensions:
This classification is made on the basis of service dimensions which are extracted from the
literature of Service Operations Management. The dimensions include information whether
the services are people focussed or not, the length of customer contact times, fully dedication
towards customer needs, in other words customisation of service, source from which the
value will be added whether the services are product focussed or not?
Basing on the above dimensions the services are classified into three types, they are
Professional, service shop and mass services. In these three the professional services mainly
focussed towards people and mass services is mainly focussed towards the product while this
service shop services is focussed on both people and product, and thus according to Barron
and Harris (1995) the volume of customers with professional services is more compared to
the mass services while the case of service shop the number of customer will be medium.
For example considering the strategic benchmarking model which was developed by banks in
order to withdraw maximum quality on the service being provided and in the area of
profitability as well, according to Soteriou and Zenios (1999). In this model of
benchmarking, by considering service-profit chain they mixed all the operational model,
quality model and profit efficiency approach. Due to this the concentration in framing
separate benchmarking process can be minimised. The driving motto for developing this
model is to build relationship between operational efficiency and profitability, and between
operational efficiency to the service quality.
2. Classification based on tangibility:
Here the level of tangibility is a key for classifying services on goods services spectrum.
From the consumer aspect of view the more tangible the product will be the easier for
evaluating the service quality and service suitability. And on the other side the more
intangible the product will be the more difficult in evaluating the service and vice versa.

From the above discussion we can able to know the extent of tangibility of tangibility scale.
The products which are mainly dependant on services may have more chances to concentrate
on customers or consumers.(Barron and Harris, 1995)
3. Classification based on Customer Employee presence during the service:
In this context Barron and Harris (1995) presents the Bitner classification based on the
physical surroundings and also points out importance given to the physical surroundings,
these are otherwise known as servicescape. The classification of the servicescape in
service organisation is done in to three.

Self service: which includes only customers, e.g., ATM machine, weighing
machine, etc.,

Interpersonal services: both customer and employee, e.g., school, online ordering
etc.,

Remote service: which includes only employee, e.g., insurance companies etc.,

By this the author describes the way the marketing management has to select which of the
three classes their concerned organisation belongs to in designing their services cape. Basing
on this one can able to decide where their concentration must be, whether it should be on the
front house or on the back house? In addition to this the design made basing on the above
classification will help in the efficiency of operations and also effectiveness in marketing.
4. Classification based on Drama Analogy of Services:
Bennett and Strydom (2001) cite that the services can be classified based on Drama analogy
because in a Drama we have actors, audience, script and stage. Here the authors sates that
service providers acts as actors, customer acts as audience, the physical environment where
the service will be provided will be a stage and finally coming to the script, it is the
description which every service provider will present to the customer in rendering services.
The best example for this type of service analogy will be a tourist and guide, where tourist
will be a customer in other words audience, guide will become a actor in other words
service provider, the place of illustration will be stage and finally the story about the place he
says will be script and the whole concept will be service.
According to Baron and Harris (1995) this classification based on drama analogy must be
done in order to know the audience size accordingly with the service to be provided. With the

help of audience size one can assess that the performance aspects of the service, because
more the audience size more the attention will be required, Baron and Harris(1995) in their
work points out Berry and Parasuraman (1991) statement that Performance is the product and
this product so called performance is the thing which customers buy.
2.1.4. Servicescapes
As cited in the work of Lloyd and Chris (2008), servicescape plays a main role in maintaining
customer loyalties towards the firm (Cronin, 2003). Bitner (1992) states concepts of service
encounter are similar to servicescape, but several other scholars conceptualize this
servicescape as physical environment (Baker, 1987) and atmospherics (Kotler, 1973).
From the literature of Miriam et al. (2000) it is evident that servicescape and service
encounter differ in context of function but chances of similarity in their role. But we can say
that management of servicescape is very important for the management of service encounter.
In this context we can recall the sentence in the literature of Miriam et al. (2000) that the
physical arrangement of furniture etc., will be used to invite a relaxed encounter. From
their study they concluded that apart from the environmental conditions, staff related factors
also play a main role in maintaining customer loyalty. Therefore service encounters also play
a major role.
Antje et al. (2008) describes in brief about the elements responsible for servicescape. In their
work they describes about the researches regarding spatial layout and functionality. In other
sense poor store design will account for the psychological difference of the customer which
reduces the pleasure gained from the shopping experience. They mentioned that most of the
literature regarding the customer satisfaction and psychological aspects is based on layout
and functionality from the employees point of view.

Figure 4: A conceptual model of servicescapes.

Source: Lloyd and Chris. (2008), European Journal of Marketing, Pg: 393.

Bitner (1992) also mentions symbols, signs and artefacts as one of the main elements of the
servicescape. Bitner also states that explicit signs (exterior or interior of service environment)
are more important compared to implicit signs. Antje et al. (2008) also gives the information
that temperature and lightening are also importance in the ambient conditions of servicescape
in maintaining customer happiness.
2.1.5. Service Encounters
Service encounter can be simply defined as the discreet period of time a customer stays in
contact with the employee of the firm (Mary Jo Bitner, 1990). In the terms of marketing mix,
service encounter comprises of 3 Ps apart from the product. As the service itself can be
defined as the product it is not considered. Butcher et al. (2002) explained the importance
mentioned in the marketing literature regarding customer-employee contact.
The 3Ps are:
place,
people and
Physical evidence.
As the service itself can be defined as the product it is not considered.
Shirley et al. (2005) describes clearly about division of service encounters in their work
based on the contact time (considering Mary Jo Bitners(1990) definition). They divide

service encounters basing on their range of contact. Respectively Low contact encounters,
Medium contact encounters, High contact encounters. For example the service rendered by
the help of telephone is considered as low contact encounter. The face-to-face service
encounter, for example the service in food restaurant can be counted under medium contact
encounter. Finally medical services and legal services are counted under high contact
encounters because in the case of medical services, the patient needs to be tested first, then
prescription and then observation. So process being long, it is considered under high contact
encounter and vice versa in the case of legal service. Though this also comes under face-toface interaction, but the contact between service customer and service provider will be
complex.
The word service encounter raises everyones attention towards the face-to-face contact of
the customer and employee of the firm. But due to the advancements in information
technology, the interpersonal communication is now being carried in different channels.
Jeffrey et al. (2009)
As stated by Baron and Harris (1995), these service encounters are mainly divided into
2types; they are (1) Personal encounter and (2) Remote encounter. The personal encounter is
again subdivided into 2 types, they are (a) Direct personal encounter and (b) Indirect personal
encounters. By this we can assess that encounters are classified based on the personals
involvement in the service. In brief, in Personal encounter whether it may be direct or indirect
one of the employee of the firm involves in providing the service. In the case of remote
encounters, the service is provided by machine or mails. Example of Indirect personal
encounter - Telephone and example for Remote encounter is Vending machine or web.
As cited in the literature of Service encounters by Jeffrey et al. (2009); the classification is
done in two ways namely (1) Technology based encounters and (2) Touch based encounters.
This technology based encounters includes websites and automated telephonic systems.
While in case of touch based encounters, interpersonal interaction occurs. Sometimes there is
chance of using technology in interpersonal counters also. According to (Meuter et al., 2000),
the sources of satisfaction with interpersonal encounters differ from sources of satisfaction
with self-service technology (SST, technology based encounter).
At first technology encounters failed in providing full satisfaction towards customers in the
case of time and effort. Because SSTs include automated telephonic system where the
person must wait for a long time while it displays all the options, this caused some frustration

to the customers Jeffrey et al. (2009). In their work he gives out the summary stating the
sources of satisfaction in face-to-face encounters are reliability (Parasuraman et al., 1988) ,
responsiveness (Parasuraman et al., 1988, Bitner et al., 1990, 2000), spontaneity, service
recovery (Bitner et al., 1990, 2000) and convenience (Berry et al., 2002). In contrast to the
interpersonal service encounters, the sources of satisfaction in self service technology
encounters include process convenience, technology reliability, and outcome of the process.
Finally from their research they concluded that a good tech process did not have as much
positive impact as good touch process (Jeffrey et al., 2009).

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