2. Chapter 10 Managing the physical environment

3.  Understand the role of the physical environment in marketing a hospitality business  Have an awareness of design principles used in the development of the hospitality product  Identify the external and internal elements of the hospitality physical environment  Recognize the importance of maintenance and refurbishment programs for hospitality properties in delivering customer satisfaction

4.  The physical environment sends important signals to an organization’s stakeholders, especially to customers  Customers intuitively respond to the signals that the external appearance and internal atmosphere project  If the physical environment is appropriate, then target markets are more likely to find the offer attractive  Potential customers who do not ‘fit’ into the target market profile can be deterred by the physical environment  Most of this lecture refers to the ‘built environment’ but many of the principles apply equally to the natural environment

5. Four elements influence our understanding of psychology and the physical environment:  individual behaviour  social interaction  customer responses  characteristics of the physical environment

6. Figure 1.1 Customer behaviour and responses to the physical environment

7. People respond to the physical environment with one of two diametrically opposed types of behaviour: Approach behaviour  people who are comfortable with the physical environment of a hospitality unit demonstrate approach behaviour  they are more likely to enter, stay and spend money, and return/ recommend the brand Avoidance behaviour  people who are uncomfortable with a physical environment demonstrate avoidance behaviour  they will probably walk or drive past the unit; if they enter the premises, they may walk out without purchasing The design of the physical environment needs to attract target markets and create a positive environment for employees; environments can also be designed to deter people who do not fit the target market profile

8.  The physical environment influences how customers and employees interact and relate with each other  Design can encourage or discourage social interactions  Different types of hospitality product need to generate different types of social interaction  Many business products are designed to create more formal environments  Many hospitality leisure products are designed to encourage interaction; indeed, social interactions can be critical to delivering customer satisfaction  The character of social interactions needs to be considered when developing the product concept or creating a design brief  The physical environment sends signals to consumers about what is appropriate behaviour and what is not

9. Three types of human response to the physical environment: 1. Cognition (knowledge and perception)  Physical environment influences people’s beliefs about places and creates preconceptions about the product or brand  The physical appearance of hospitality premises reinforces or challenges people’s prior beliefs about the hospitality offer 2. Emotion  People have subconscious or overt emotional responses to the physical environment  There are two types of emotional response: pleasure and arousal (see Figure 10.2) 3. Physiological response  People have different physiological responses to environmental stimuli: visual stimuli (brightness/darkness, colours and shapes) aural stimuli (the volume, cadence or rhythm of sounds) olfactory stimuli (fresh or foul scents and smells) taste stimuli (bitter/sweet/salty/savoury/sour tastes and hot/cold temperatures) tactile stimuli (the texture of food products, the softness of furnishings and the level of comfort)  Managing the sight, sound, smell, taste and feel of the product can be described as sensory marketing and is a key factor in creating a positive physical environment

10. Figure 10.2 Emotional responses to the physical environment

11. Hospitality companies create atmosphere through design Ambient dimension  Refers to sensory elements colour, lighting and temperature  Minor irritations amusing, extreme ambient conditions serious issue for distressed customers Spatial layout  Use of space – how furniture and equipment are arranged in rooms  Size of property influences spatial layout Signs, symbols and artefacts  The tools that companies use to communicate with consumers via the physical environment  Contemporary hotels use modern art to convey a fashionable image; historic hotels can use antique furniture to convey the unique heritage

12. Different hospitality product concepts have different servicescape characteristics Self-service operation  Relies on customers serving themselves and few (if any) employees; the design of the physical environment focuses on convenience and low cost Interpersonal service operation  Involves both customers and employees using the same physical environment at the same time; design needs to ensure customers are comfortable and employees can work efficiently Remote service  Means a physical environment where there are no customers, i.e. contract catering – food production in remote kitchens, servicing multiple units; design focuses on employees and efficient production

13.  External environment for hospitality – a shop window in retailing  Visual displays send powerful messages about product, service quality and price  The surrounding environment, external appearance of the building, landscaping, access routes, car parking facilities, signage and logos and lighting are the shop window for the hospitality business  The external appearance of the hospitality premises – the building, its size, age, architecture and, in particular, the quality of maintenance sends cues to customers  Attractive, well-maintained properties inspire confidence  Buildings that appear neglected can deter potential customers

14. Internal factors include:  layout  décor  furniture and furnishings  equipment  internal signage  temperature and air quality  music  smell Together, they convey the all-important atmosphere of the premises

15.  Appearance, attitude and behaviour of employees should complement the positioning, product concept and physical environment  Employees’ cleanliness and dress should reinforce design theme and send a consistent message to customers  For formal, business-orientated hospitality operations, professional uniforms reflect the business environment  With leisure and themed hospitality concepts, casual uniforms designed as part of the theme or no uniforms are appropriate  Customers may not notice employees’ dress and behaviour when it matches the brand concept and physical environment  If an employee’s appearance, attitude and behaviour is inconsistent with the design concept, then customers will notice inconsistency and may be dissatisfied

16.  Hospitality experiences are variable in content and quality due to the presence or absence, and behaviour, of other customers  Customers in the physical environment contribute to the atmosphere  Customers see and hear other customers; if what they see/hear conforms to their expectations, then other customers will feel comfortable  If other customers’ dress/behaviour seems inappropriate, this may cause embarrassment or offence and dissatisfy customers

17.  Maintenance and refurbishment has to maintain the hospitality product at an acceptable level to ensure customer satisfaction and efficient operations  Unfortunately, customers and employees accidentally, and occasionally deliberately, cause damage to the property  Bathrooms and washrooms suffer particularly from abuse and accidental water damage The costs of not maintaining a property include:  Loss of current/future revenue streams from customers  Loss of revenue from inability to sell rooms out of operation because of maintenance problems  Inefficient performance caused by faulty equipment and employee productivity  Liability for health, safety and other legal infringements

18.  Effective maintenance should be planned; financial planning includes depreciation to cover the costs of wear and tear  Depreciation calculated by estimating life expectancy of décor, fittings, furniture and equipment 1. Preventative maintenance comprises the regular servicing of equipment – elevators, kitchen equipment, air-conditioning, etc. – to ensure they do not break down 2. Breakdown maintenance includes all the minor damage caused during the normal daily operations of the business 3. Corrective maintenance includes regular redecoration according to a planned schedule; when the hospitality product becomes tired, major refurbishment is needed 4. Designing out faults is necessary when design faults emerge during the operation of the facility, and can improve guest comfort and operational efficiency  Refurbishment of public rooms, bars and restaurants varies according to usage and product concept

19.  Physical environment is important to attract customers into hospitality premises and in contributing to the customer experience during the service encounter  Hospitality businesses need to continually invest in refurbishment to enjoy high repeat and recommended business and nurture customer loyalty  Hospitality businesses that fail to maintain the physical environment of their premises will eventually become tired and will reduce their profit potential

20.  Bitner, M. J. (1992). ‘Servicescapes: the impact of physical surroundings on customers and employees’. Journal of Marketing, 56 (April), pp. 57–71.  Heide, M., Lærdal, K. and Grønhaug, K. (2007). ‘The design and management of ambience: implications for hotel architecture and service’. Tourism Management, 28 (5), pp. 1315–1325.  Hulten, B., Broweus, N. and Van Dijk, M. (2009). Sensory Marketing. Palgrave Macmillan.  Krishna, A. (2010). Sensory Marketing: Research on the Sensuality of Products. Routledge.  Lashley, C. (2001). Employing Human Resource Strategies for Service Excellence. Butterworth-Heinemann.  Lawson, F. (1996). Hotels and Resorts: Planning, Design and Refurbishment. Butterworth-Heinemann.  Riewoldt, O. (2006). New Hotel Design. Watson-Guptill.  Zeithaml, V. A., Bitner, M. J. and Gremler, D. D. (2009). Services Marketing (5th ed.). McGraw-Hill.  Zemke, D. M. and Shoemaker, S. (2008). ‘Sociable atmosphere’. Cornell Hospitality Quarterly, (August), pp. 316–329.