The main aim of this assignment is to demonstrate the differences in competitive strategies of two service firms that are providing the same core benefit. Our team decided to do so by comparing a luxury fashion outlet Louis Vuitton with a more traditional clothing chain Gap in terms of their servicescape usage. Louis Vuitton was chosen as an example because it seems to create extraordinary and exclusive servicescape, whereas Gap was chosen because servicescape used by it seems be quite ordinary and even poor. This assignment will start with the brief introduction and definition of the servicescape. Further, we are going to mention main roles of servicescape and various elements, both main and additional that servicescape consist of. We will then outline positive and negative impacts of servicescape by observing how Louis Vuitton and Gap are using servicescape in their positioning strategy, to appeal to their target segments and to facilitate their service delivery. Lastly, our team would like to propose several suggestions for servicescape improvement in that store, where our perceptions of the service experience were less satisfactory.

These days, there is a tendency of consumers to be more demanding and tough in relation to the service or product that they would like to purchase. Partly because of that, but also because of the continually increasing competition, companies are trying to differentiate themselves amongst others by putting forward something innovative and inventive. In this context and according to some researchers, physical evidence can be seen as an effective tool for being competitive, under such circumstances. Kotler (1973), for example, had no doubts that rather than the product on its own, the place can actually be even more significant and influential. The term servicescape, indeed, and its importance was popularized by Bitner (1992), whose contribution and conclusion made servicescape an ever-increasing subject of interest for many other researchers and practitioners. Bitner (1992) argued that servicescape is very helpful for positioning, segmenting and overall differentiating a particular company from its core competitors. Generally, servicescape can be defined as: “the built environment surrounding the service that plays a critical role in shaping customer expectations, differentiating service firms, facilitating customer and employee goals, and influencing the nature of customer experiences”[1]. Marketers within any kind of an industry who seek not only to keep on being competitive, but also raise revenue are in fact able to incorporate servicescape into their marketing plans. We will now move into specifying four main roles of servicescape and have a deeper look onto its elements.

Roles of Servicescape

A servicescape is not a passive setting it plays an important role in service transactions. An evaluation of the roles they have in service encounters will reveal how important it is to design an appropriate servicescape .A servicescape plays four important roles.

Package

Servicescapes ‘package’ the service offer and communicate an image to the customers of what they are going to get. Appropriate servicescaping is a sure shot way to create an image that the service provider is seeking to put up. It also helps moderate customer expectation and reinforces his experience and reminiscences. Servicescape is an outward appearance of organization and thus can be critical in forming initial impressions or setting up customer expectation.

Facilitator

Another important job of servicescape is to act as an a facilitator in assisting both the customers and service employees to make most of the opportunity it should make the service consumption comfortable convenient for the customer.

Socializer

Design of servicescapes aids in socialization of both the customers and employees, conveying expected roles, behavior and relationship.

Differentiator

Clearly the design of the servicescape differentiates one provider from its competitors, and hints at eth segment the services are targeted at. Companies adapt servicescape to reposition the services or identify new customer segments.

Conclusion

Although it is useful from a strategic point of view to think about the multiple roles of the servicescape and how they interact making actual decision about servicescape design requires an understanding of why the effects occur and how to manage them. The roles played by servicescape in a particular situation will aid in identifying opportunities and deciding just who needs to be consulted in making facility design decisions.

Elements of servicescape

affect customers’ perceptions of the service experience

Main Elements According to Bitner (1992)

1. Ambient Condition – condition surrounding employees and customers that can be sensed through a human’s five senses (i.e. eyes, ears, nose, tongue, and skin).
2. Spatial Layout and Functionality Spatial Layout – the seamless layout of furnishing which is used to achieve maximum productivity in the most efficient and effective manners
3. Signs, Symbols, Artefacts and Branding – the icons or signals that amplify the message from the buyer to the intended customers.

Additional elements

1. Virtual Servicescape – where the employees or the customers are not in the same physical area, but they are interacting via an electronic media – the Internet.
2. Sex of service provider – a certain sex of the service provider of a certain type of industry will be dominated by a certain sex.

Branding – as an important element

A brand of a product or service is a bond (positive or negative) between the buyer and seller

Brand is also seen by customers as to perceive risk, value, and signal the quality of the product or service

Branding and servicescape are inseparable

Branding is something that let the product or service stayed in customers’ minds

Positive and negative impact of servicescape

Good servicescape :

create a good, nice and positive feeling of a product / service

lead a customer to conduct transaction for the first time patron and hope to re-patron

emotional responses is Pleasure

Bad servicescape :

lead to negative feeling that make customer distressed

customer no longer wish to do business with that company

emotional responses is Avoidance

LOUIS VUITTON and its servicescape

super-premium fashion store

has its own way to stands out among the crowds

targeting the high-income customers who perceived quality of service and product above the prices

positioning itself at a level where consumers consider prices come second after quality of product or service

enjoying record sales

by looking at LV we will see how various aspects of the servicescape may produce positive impact on customers’ perceptions of the service experience

Ambient Condition – tries to give the best premium shopping experience to the customer

• store is designed aesthetic and professional with high ceiling to create a sense of openness and spaciousness
• consumers able to sense that the premises are luxurious and offering premium quality of product and service in super-premium prices
• light and neutral fragrance that gives aroma therapy to feel relax and stay longer
• warm and dark colors that give luxurious and warm feelings to customers
• male security guards in front of main entrances – security is also one of the elements for high-class people who prefer to have a sense of security when entering premises
• playing slow tempo instrumental music – this type of music is seen by most people as high-class and prestigious
• staffs are wearing uniforms, well dressed, well mannered, professional, look smart, wearing tie, and tidy hair

Spatial Layout and Functionality Spatial layout

• fully air conditioned
• main entrance made from clear tampered glass to provide spaciousness and a sense of welcome to any who want to enter
• provision of tailored and a personalized attention to a customer
• comfortable sofas are provided for the customers to rest
• products are placed nicely to give pleasant and luxurious view of the store and products
• small products such as wallets etc are put inside a glass display shelves to give sense that the product are keep clean from dust and give sense of the product is luxurious.
• mannequins are well placed so that the customers can imagine themselves wearing the products

Signs, Symbols, Artefacts and Branding

• Louis Vuitton sign represent the overlapping two of first letters of the brand “LV”
• Every single of the product is labeled with LV signs
• This signs give prestigious and self esteem in social life when worn

Virtual Servicescape – own website

• provides the running and upcoming clothing lines in store
• use modern design and warm colors to give sense and feeling of luxurious, premium and exclusive
• made to be user-friendly with easy and clear interface yet still very elegant with the usage of lines and colors
• models in the website is all beautiful and handsome to give feeling of looking good when use LV products

Sex of Service Provider

• equal numbers of male and female staffs to address the people who come to the store
• if customer prefer to communicate with the same gender, then the store can provide it accordingly

Gap and its servicescape

• medium-quality fashion store
• no specific servicescape
• targeting young style-conscious UK consumers
• tries to position itself as a stylish casual wear retailer in a fair price
• recorded losses
• by looking at Gap we will see how various aspects of the servicescape may produce negative impact on customers’ perceptions of the service experience

Conclusion: Suggestions for Gap

To improve its servicescape Gap need to:

• Recognize the strategic impact of servicescape
• Map the physical evidence of service
• Clarify the roles of servicescape
• Assess and identify servicescape opportunities
• Be prepared to update and modernize its physical evidence

ELEMENTS

This paper tries to describe the importance of the main elements (i.e. ambient condition, spatial layout / functionality, signs / symbols / artefacts) (Bitner 1992). A few additional elements later developed that found can be influential to consumer behaviour are music (Jacob 2006), aesthetic design of virtual servicescape on the companies’ websites (Rafaeli & Vilnal-Yavetz 2006); the sex of service provider (Fischer et al. 1997). In order to give better understanding about the servicescape and its application in real-world companies, three firms from three different service sectors are chosen.

MAIN ELEMENTS

According to Bitner (1992), there are three main elements of servicescape, they are:

Ambient Condition. This refers to a condition surrounding employees and customers that can be sensed through a human’s five senses (i.e. eyes, ears, nose, tongue, and skin).

Music plays an important role in creating the required atmosphere (Kotler 1973), and it is believed that the music tempo can make the consumers to stay longer (Milliman 1982 1986) and establishing a style (Yalch & Spangeberg 1990) (Areni & Kim 1993).

According to Dube & Morin (1999), music also can help employees to feel more relax and enjoy their working. Also, theOften music as servicescape is chosen by employees’ or managers’ personal preference type of music (Dube & Morin 1999). In most cases, wrong type of music will deliver wrong kind of atmosphere that will have negative effects on customers and other employees.

Spatial Layout / FunctionalitySpatial Layout refers to the seamless layout of furnishing to achieve maximum productivity in the most efficient and effective manners. Functionality refers to the items to provide better service and higher productivity to customers (Barker 1968) (Wicker 1984) (Fox & Bender 1986)McCormick (1976) suggested three principles in spatial layout arrangement: features that frequently used should be strategically placed to where the equipments can be used optimally; equipments that have interrelated activities should be clustered together; and environmental features that might interfere or disturb another activities should be placed in different place.

Signs, Symbols & Artefacts. This refers to icons or signals that amplify the message from the buyer to the intended customers.

There are a few more elements that found from variety of literatures believe to be additional elements that would eventually affect consumers buying behaviours, they are: (4)Virtual Servicescape. Undoubtedly, the Internet has been experiencing a rapid growth in number of usage and applications for both personal and business use (Browne et al. 2004) (Thompson 2002). The virtual servicescape (Rafaeli & Vilnal-Yavetz 2006) is where the employees or the customers are not in the same physical area, but they are interacting via an electronic media – the Internet.

According to (Rafaeli & Vilnal-Yavetz 2006), virtual Servicescape is about aesthetics and professionalism. Aesthetic is found to influence feelings of comfort, easy, and service interaction. The more aesthetic the company website’s design, the more satisfied is the customer (Hall & Hanna 2004) (Nasar 1998).

Sex of service provider According to Fischer et al. (1997), the sex of the service provider is also one of the elements that need to be considered in creating an optimum serviscape for the employees and customers.

Fischer et al. (1997) argued a certain sex of the service provider of a certain type of industry will be dominated by a certain sex. For example: a male employee would be seen more dominant in a hardware store or an auto-repair shop compared to lingerie store (Basow 1992) (Gordon 1991) (Mackie et al. 1996) (Sacks 1989).

Usually, people would tend to interact with the others who are similar / like themselves (Brown & Reingen 1987) (Rogers & Bhowmik 1971).

GOAL OF SERVICESCAPE (POSITIVE AND NEGATIVE EFFECTS OF SERVICESCAPE)

The basic goal of the servicescape is to create a good, nice and positive feeling of a product / service that can lead a customer to conduct transaction for the first time patron and hope to re-patron (refers to Approach). However, wrong doing in servicescape can lead to negative feeling that make customer distressed and make them no longer wish to do business with that company (refers to Avoidance) (Bitner 1992) (Donovan & Rossiter 1982).

There are two outcomes of emotional responses in servicescape – Pleasure and Arousal (Mehrabian & Russell 1974) (Russell & Pratt 1980) (Russell & Lanius 1984) (Russell and Snodgrass (1987). Respectively, pleasure is when someone has nice feelings towards to a situation, whereas Arousal is the degree when someone feels excited in a certain situation (Donovan & Rossiter 1982)

ELEMENTS_THEORY+LV

Based on Bitner’s physical environmental dimensions (1992), the three firms have similarities as below:

Ambient Conditions

Bitner (1992) believe that well placed colours that blend to the place will create a vibrating sense to whoever patronizing the place. These three firms are using warm and dark colours to give luxurious and warm feelings to customers. Only those who can afford to pay premium price can enter such places. This gives a sense of prestigious to those who consume the product or service provided by these three firms.

Baker (1987) recognizes that people or “human component” to be part of the physical environment that will affect one’s perception of a firm. These three firms must their employees to look nicely dressed with uniforms, clean, smell nicely, friendly smile, and welcoming gesture. Kubacki et al. (2007) believes that security is also one of the elements for high-class people who prefer to have a sense of security when entering premises. These three firms place male security guards in front of main entrances. The security guards act as simple welcoming committee who welcome and greet customers. This gives feeling of security in doing transaction within the guarded area.

According to Lin (2004), auditory cues can be categorized into two parts – music and non-musical sound. Hui et al. (1997) believes that music is an effective tool to enhance positive feeling toward the premise and when waiting in any service operation. LV is playing slow tempo instrumental music that many researchers found to help shaping the mood and emotion of the patrons (Hui et al. 1997). Also, this type of music is seen by most people as high-class and prestigious.

A Louis Vuitton store use light and neutral fragrance that gives aroma therapy to feel relax and stay longer. Many believe the longer a customer stay the more he / she will make a purchase.

Lightning influences directly the individual perception towards a firm. The perception of the physical emotional, psychological, spiritual aspects, forms, colours, textures and enclosures (Kurtich & Eakin 1993) (Ching 1996). Louis Vuitton store use a soft and yellowish colour lamp that gives aesthetic feel and presence of their super-premium products.

All three firms are fully air conditioned

Spatial Layout and Functionality Spatial layout is a matter of placing the items (i.e. machineries, equipment, and furnishings) at the right place to ensure smooth flow from the time customer enters a premise (Bitner 1992).

The main entrance of the premises of these three firms made from clear tampered glass to provide spaciousness and a sense of welcome to any who want to enter. A professional reception desk is located near to the main entrance so that customers who seeking service can immediately approach the table to find out how and where to get their specific problems solved (Darley & Gilbert 1985) (Russell & Snodgraass 1987).

Each reception desk has a thin wall to prevent people passing by to see the people inside. Believed by many Chinese ethnics, this wall in front of the entrance will prevent luck to leave the place so quickly. Behind this wall, all the three premises prioritize in spacious area with modern furnishings that prioritize minimum usage of space yet still comfortable.

LV offer exclusive and limited people who can enjoy what the firms have to offer. Thus, there will be no customers shall feel crowded that will create feelings of stress Harrell & Hutt (1976). Seider (1983) warned about the consequence of poor layout that could lead to feelings of being neglected, embarrassment, and avoidance among customers. LV will give a tailored and a personalized attention to a customer. This gives a strong feeling being taken care of and the problems are addressed seriously (Ang & Leong 1989).

According to Ching (1996), the ceilings also play an important role in servicescape where high ceilings create senses of spaciousness and low ceilings are conveyed as coziness and intimacy. Louis Vuitton use high ceiling to give a feeling to the customers of a spacious room where they can take their time without having the feeling of suppressed due to tight room

Signs, Symbols and Artefacts

This dimension is believed to be the most complex one compared to the other. The signs can be used to signal the service setting to the customer (Davis 1984) (Wener 1985). The three premises are using simple yet elegant signs that promise warm, welcome, luxurious service and premium quality of what the firms have to offer to their customers.

The message conveyed to the customers is clear and simple by showing the logo of their companies (i.e. Louis Vuitton – LV, Bank Central Asia – BCA, Angus House – idem).

Based on the additional elements:

Virtual Servicescape

Virtual Servicescape on company’s official website gives perceived value and image of a firm’s product and service. Nowadays, the Internet users have been growing exponentially in number of users thanks to the rapid development in technology. Louis Vuitton use modern design and warm colours to give sense and feeling of luxurious, premium and exclusive. The website is made to be user-friendly with easy and clear interface yet still very elegant with the usage of lines and colours. The models in the website is all beautiful and handsome to give feeling of looking good when use LV products.

Sex of Service Provider

Fischer et al. (1997) argued that there’s a clear connection between the expectation of service from the provider and the sex of the providers. In other words, the service setting and perceived service outcomes are determined from the sex of the service provider. Vuitton has equal numbers of male and female staffs to address the people who come to the store. The male staff will immediately approach the female customer and vice versa. Should the customer prefer to communicate with the same gender, then the store can provide it accordingly.

LOUIS VUITTON

This super-premium fashion store is targeting the high-income customers who perceived quality of service and product above the prices.

Ambient Condition

From all of the five senses of a human being, Louis Vuitton tries to give the best premium shopping experience to the customer. Visually, the store is designed aesthetic and professional with high ceiling to create a sense of openness and spaciousness. Tampered glass walls also to give sense of welcoming and to show the products available inside.

The scent sprayed in the store is soft and giving aroma therapy effect to make customers to stay longer and hope to buy more. Aroma therapy also can make people feel happy and relax so the experience in buying is not just buying the product but also during the transaction.

The products are allowed to be tried to make sure that the customers get what they want. This will reduce the perceived risk for purchasing something that hasn’t been felt yet.

The staffs are wearing uniforms, well dressed, well mannered, professional, look smart, wearing tie, and tidy hair (tied for female staffs and short hair for male staffs).

The security in front of the entrance gives a sense of security so the customers can shop and browse the products without any worry of any thievery (i.e. pickpocket, robbery, etc).

Spatial Layout and Functionality

Comfortable sofas are provided for the customers to rest. The stronger shoppers have been known for many years are the female compared to the male. Sofas are located in the middle for easy access. Should the customer has an infant(s), she / he can monitor the children easily from the place where he standing checking the products.

The products are placed nicely without any boxes or scrap papers in eyesight to give pleasant and luxurious view of the store and products. Small products such as wallets, small bags, or scarfs are put inside a glass display shelves to give sense that the product are keep clean from dust. This also give sense of the product is luxurious. Each display rack are given lights to enhance the product appeal – the skin quality,The layout of the shelves is encircling the room and display of a certain product is clustered in one area and separated from the shoes and bags. This to ease the customer to make a comparison between products to another.

Mannequins are well placed so that the customers can imagine themselves wearing the products. These mannequins also placed by the window glasses to attract customers and to show new product lines being offered.

The ceilings are made high to promote well air circulation within the room and also to promote openness.

Should the store is in peak hour, the customers will not feel being overcrowded that could lead to stress and early leave to avoid the crowd.

Signs, Symbols and Artefacts

Louis Vuitton or more known with overlapping two of first letters of the brand “LV” has been worldwide known as products that comes best quality, excellence service, and super premium pricing.

LV symbols on its products also give prestigious and self esteem in social life when worn. Thus, every single of the product is labelled with this signs.

Virtual Servicescape

The company website provides the running and upcoming clothing lines in store. The design of the website is made in such a way that when a customer visit its website will immediately feel that LV provides high quality product, excellence service and super premium pricing.

Sex of Service Provider

The staffs are equally distributed among male and female staffs to accommodate the variety of patrons. The customers of LV are not limited to female only (although admitted that more than half of the buyers are female. Some consumers will have better feeling to consult with the same gender compared to the opposite sex and vice versa.

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