Abstract
The unprecedented dynamism in marketing has led to the transition of economy from service economy to experience economy. Modern age consumers give more emphasis to the hedonic attributes of offerings than to functional attributes. Consequently, the present study aims to provide a deeper understanding of experiential value, its antecedents, and consequences in the context of coffee shops. More specifically, this study examines the effect of service encounter elements on experiential value and the consequent effect of experiential value on customer loyalty. Using purposive sampling, data were collected from 387 customers of coffee shops using a questionnaire survey which was later analyzed using Structural Equation Modeling. The results reveal positive linkages between service encounter, experiential value, and customer loyalty. Positive cognition of service encounters have positive effects on experiential value and customer loyalty. Besides, experiential value also has a positive effect on customer loyalty. Lastly, experiential value partially mediates the relationship between service encounters and customer loyalty.
Highlights
In the modern times, the economic offerings of organizations worldwide have turned out to be all the more deliberately experiential, a key move in the very fabric of the worldwide economy (Rather, 2020)
These results demonstrate that the effect of service encounter on customer loyalty is partially mediated by experiential value, thereby supporting H4
The study was motivated to respond to the recent calls for further investigation of interaction between service encounter elements and experiential value across industrial and geographic contexts
Summary
The economic offerings of organizations worldwide have turned out to be all the more deliberately experiential, a key move in the very fabric of the worldwide economy (Rather, 2020). Today’s consumers do not feel contented with mere functional benefits of goods and services but they demand offerings which are accompanied by experiences in the increasingly commoditized and competitive environment (Batat, 2019; Khan et al, 2020). Accessibility of different goods puts customers in challenging situations to make differentiation amongst varied offerings of market (Khan et al, 2016). Dining out has become one of the most widespread activities of leisure (Kim & Jang, 2019; Walls et al, 2011) These days, eating out for entertainment/pleasure is no more the reservation for only elite class but, it has progressively become common to all echelons of the population (Rezende & Silva, 2014)
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