The place where goods are bought or consumed can have an effect on the customers' perceptions about the value and quality of the product. The same is true of the places where services are provided. While some products and services can get away with shabby or nondescript premises, for many others having an understanding of the effect that the physical environment can have on customer perception is crucial.
Effect on Products
The physical environment can exert a noticeable influence on the behavior and perception of the customer, although this influence is more powerful for some products and services than for others. Generic products with little symbolic or status value (e.g, paperclips) are more likely to be evaluated on intrinsic factors like cost, while high-prestige products (e.g, designer clothes) are more likely to be affected by the properties of the place of sale that would convey a certain aura.
Effect on Services
The effect of the environment on customers is even stronger for service interactions, as in the absence of an actual physical product, the customer will look for clues on the quality of the service offered. Some services are more affected by this than others. Those where customers have little or no interaction with the premises (like dry cleaning or photo developing) are less affected than services where long customer-provider interactions are usual (like restaurants).
Mechanisms of Influence
There are three main ways in which the environment can affect purchase behavior. First, it can attract attention, for instance making a store or restaurant distinctive through design, color, motion or sound. Second, environment can become a message-creating medium, conveying subtle (or not so subtle) signals about the product or service offered. For example, low light and candlesticks will prepare the customer for an upmarket fine-dining experience. Finally, the environment can act as an affective medium, where color, smell and sound evoke visceral reactions that will influence purchase probability.
The physical environment is not just window-dressing. Customers that have not tried a given product or service before will behave like detectives and look for information, consciously or unconsciously building their expectations abut that which they cannot see on the basis of that which they can see, with nicer environments usually associated with more credible providers. For instance, on seeing untidy floors at a restaurant a customer may suspect that the kitchen is similarly untidy, even if he cannot see it. Similarly, shabby-looking chairs in the lobby of an investing firm may fail to convey financial stability.
- University of Massachusetts-Amherst: Influence of Physical Environment on Disconfirmation, Customer Satisfaction, and Customer Loyalty for First-time and Repeat Customers in Upscale Restaurants
- "Entrepeneur": The Combined Effects of the Physical Environment and Employee Behavior on Customer Perception of Restaurant Service Quality
- "Journal of Business Research"; Investigating the Role of the Physical Environment in Hedonic Service Consumption; Roscoe Hightower, et al.; Sept. 2002
- Photo Credit store image by andrej pol from Fotolia.com
The Bullwhip Effect in Supply Chain
The bullwhip effect occurs in a supply chain because buyers for a business overreact to fluctuation in customer demand. Overbuying goods leads...
What Are Good Customer Service Skills?
Good customer service skills are required in almost every business. Good customer service maintains current customers and helps attract new ones. So...
Objectives of Internal Control
Internal controls are techniques employed by managers to ensure that specific control objectives are continuously met. Controls can be implemented to protect...
The Importance of Environmental Scanning in Business & ICT Environments
Environmental scanning is a recently developed and increasingly important tool often used in business to examine and forecast the marketplace. Information and...
The Effects of the Physical Environment on Job Performance
Physical comfort has a direct effect on mental clarity, which in turn affects how well an employee can do his job. The...
Physical Work Environment Factors
Companies must pay close attention to the physical work environment factors that affect their employees. Successfully addressing issues to handle these factors...
External Factors Influencing Perception
Perception is the ability to use sensory information to understand our world. It enables us to make decisions, judgments and choices about...
What Are the Duties of a Dry Cleaning Customer Service Representative?
A customer service representative (CSR) employed by a dry cleaner has several duties, most of which are directly related to dealing with...
Examples of Environmental Elements in Customer Service
All businesses need customers to survive. Customer retention, maintaining new customers, serves as a crucial element of successful business. Customer retention relies...