Page 179 - ASBIRES-2017_Preceedings

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Proceedings of the 9 Symposium on Applied Science, Business & Industrial Research – 2017
ISSN 2279-1558, ISBN 978-955-7442-09-9

The Impact of Servicescape on Customer Behavioral Outcomes

Weweliyadda WHPP, Deegahawature MMDR
Department of Industrial Management, Wayamba University of Sri Lanka
prasadiwh@yahoo.com

ABSTRACT

The banking and finance sector in Sri Lanka plays a salient role in achieving the
continuous economic growth of the country. Sri Lanka is a country which has diversified
ethnic composition with diverse embedded cultures, attitudes and beliefs that may
influence the customer behavior in the service organizations such as banks. Thus, this
research attempts to investigate the factors of the servicescape that influence customer
behavioral outcomes of both private and public sector commercial banks in a diversified
ethnic environment. The research proposes a service environmental model including
various factors categorized under three types of environmental cues: Design cues, Ambient
cues and Social cues. A questionnaire based survey collected responses from 248 customers
from public sector banks and 136 customers from private sector banks representing two
ethnic groups based on the spoken-language. The Multiple Regression analysis reveals that
social cues as a significant factor affecting for both customer loyalty and word of mouth in
both private and public banking sectors. Design cues and ambient cues influence word of
mouth and customer loyalty respectively. Also, the analysis reveals that the ethnic diversity
does not moderate the effect of the service environment on customer behavioral outcomes.
Therefore, the ethnic composition of the market should not be considered in making the
decisions on the changes in service environment.

KEYWORDS: Banking sector, Customer behavioral outcomes, Ethnicity Servicescape, Sri
Lanka
aspects such as service environment
(servicescape). Since the banking sector
1. INTRODUCTION comprises of both public and private banks,

Within the huge service sector, banking it is important to identify whether the
and finance is one of the most important dimensions of servicescape is applicable to
entity and it has been growing relatively fast both the sectors similarly. Due to the intense
in the world (Rahman, 2013). The banking competition, bankers are supposed to
sector plays a crucial and responsible role in explore alternatives to provide a better
manipulating public deposits for investment service. This can be achieved by providing
and consumption lending that ultimately some tailor made services to the customers
assists in improving standard of living and by considering their ethnicity. Therefore, it
quality of life of the citizens of Sri Lanka. is salient to investigate whether diversified
ethnicity influence the customer perception
Presently there are 25 commercial on servicescape since ethnic sensitivity
banks in Sri Lanka serving relatively to a towards servicescape is less researched. Sri
small population of nearly 21 million. It is Lankan banks need to identify different
very important to provide a high quality strategies to face the stiff competition from
service to the customers to attract and retain the dynamic market environment in the
them in this competitive environment. Thus sector. Therefore, most of the Sri Lankan
it has become essential for the banks to banks invest their resources on servicescape
identify the customers’ expectations facilities as one of the strategy. Currently
correctly and thereby to address them banks allocate more resources to develop
correctly with not only appropriate financial their physical environmental factors.
products and services but also in other Therefore, it is important to identify whether

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