Experience Marketing An Empirical

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Experience Marketing: An Empirical

Investigation
a
Ahmed Rageh Ismail
a
School of Hospitality and Tourism Management , Fayoum
University , Fayoum, Egypt
Published online: 20 Sep 2011.
To cite this article: Ahmed Rageh Ismail (2011) Experience Marketing: An Empirical Investigation,
Journal of Relationship Marketing, 10:3, 167-201, DOI: 10.1080/15332667.2011.599703
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Journal of Relationship Marketing, 10:167–201, 2011
Copyright © Taylor & Francis Group, LLC
ISSN: 1533-2667 print / 1533-2675 online
DOI: 10.1080/15332667.2011.599703
Experience Marketing: An Empirical

Investigation
AHMED RAGEH ISMAIL

School of Hospitality and Tourism Management, Fayoum University, Fayoum, Egypt
Downloaded by [Western Kentucky University] at 06:21 16 October 2014
Customer experience theory, research, and practice represent an

evolving area of study within the marketing discipline. Despite its
importance, the customer experience concept remains vague and
lacks a thorough theoretical foundation. This study addresses this
gap in the literature and examines the antecedents and conse-
quences of customer experience from customer perspectives. The
study provides a conceptual framework building from a qualitative
study and the existing literature. This article includes a formal test
of the framework using a large-scale survey to examine the experi-
ence of British customers with resort hotel brands. The results show
that price perception, core services, and word of mouth have a di-
rect impact on how customers interpret their experiences with resort
hotel brands; perceived service quality plays a mediatory role in the
relationship between servicescape, core service, and customer ex-
perience. Measuring the validation strength of customer experience
upon brand loyalty by best fit in combination with cross-sample
predictive validity models is a valuable contribution of this study.
KEYWORDS brand loyalty, customer experience, experiential

brands
INTRODUCTION
Businesses face the challenge of creating an outstanding customer expe-

rience to drive brand awareness, secure customer loyalty, and ultimately
increase profits. In a brief history of customer experience, Pine and Gilmore
(1999) claimed that experiences are the new economic offerings. As a con-
sequence of the emergence of the customer experience concept, limited
Address correspondence to Ahmed Rageh Ismail, PhD, Room 2, Third Floor, School of
Hospitality and Tourism Management, Fayoum University, Fayoum, Egypt, P.O: 63514. E-mail:
are00@fayoum.edu.eg
167
168 Experience Marketing
contributions from scholars focusing on customer experience were made

(Addis & Holbrook, 2001; Carú & Cova, 2003; LaSalle & Britton, 2003; Milligan
& Smith, 2002; Ponsonby-Mccabe & Boyle, 2006; Prahalad & Ramaswamy,
2004; Schmitt, 1999, 2003).
This phenomenon is an essential ingredient in the economy at the
present time. Therefore, this study addresses the reemergence of experi-
ence, aims to uncover the concept of customer experience, and explores
what are the antecedents of customer experience and how customer expe-
rience contributes to building brand loyalty within the context of the hotel
industry. To satisfy these overall goals, I begin with netnography study in
the first phase to explore the concept of customer experience and its dimen-
sions. Then I identify factors that most likely have a significant influence on
customer experience.
LITERATURE REVIEW
A proposition has been set forth that customers’ interpretations of their expe-
riences with the brand affect loyalty behavior (Barsky & Nash, 2002; Berry,
Carbone, & Haeckel, 2002). As a consequence, interest in customer experi-
ence is increasing among service executives and service researchers. How-
ever, so far, scant empirical research is available to estimate the meanings
of the customer experience concept (e.g., Arnould & Price, 1993; Barsky &
Nash, 2002; Gentile, Spiller, & Noci, 2007; Jones, 1999), and most of the re-
search is mainly conceptual (Berry et al., 2002; MacMillan & McGrath, 1997).
Holbrook and Hirschman (1982) described an experience as an individ-
ual’s consumption of and interaction with products or services that involve
significant affection. This personal occurrence may lead to a transformation
of the individual in the experiences defined as extraordinary experience,
which includes a high level of emotional intensity and is triggered by an
unusual event (Arnould & Price, 1993). One can also experience something
extraordinary when an event or context offers absorption, joy, and value—a
spontaneous letting-be and a newness of perception and process (Csikszent-
mihalyi, 1990).
Privette and Bundrick (1987) measured experience through a lengthy
but well-validated questionnaire. This study, however, includes a qualitative
research stage that explores and gains insights into how consumers interpret
experiential brands (Zikmund, 2003).
An examination of the literature reveals that many factors contribute
to creating a positive customer experience. These studies indicate that cus-
tomers use some factors, such as brand name, price, advertising, word of
mouth, and past experience, as cues to predict their experiences, and other
factors have strong influences on customer experience. The following section
discusses these factors.
A. R. Ismail 169
Perceived
service quality
H2
Advertising
H4b
Price H3
H1 H9
Employees
H5b
H4a
Servicescape
H5a
H10
H6b
Customer experience
Core service H6a Brand loyalty
H7
WOM
H8
Mood
FIGURE 1 Conceptual Framework. WOM= word of mouth; H = hypothesis.
Antecedents to Customer Experience in Services

According to the reviewed literature (see Figure 1), a set of antecedents
are likely to influence customer experience. Also, perceived service quality
is likely to be a unique input into customer experience; perceived service
quality is likely to have a direct relationship to brand loyalty.
Reeves and Bednar (1994) depicted perceived service quality as the
extent of the discrepancy between customers’ expectations and their per-
ceptions. The marketing literature identifies service quality an antecedent to
outcomes such as customer satisfaction (Grönroos, 2001). Service researchers
view perceived service quality as a prerequisite for loyalty and frequently
include loyalty in models as an outcome variable (e.g., Gremler & Brown,
1996). Therefore, the study here includes the hypothesis that a positive re-
lationship exists between service quality and brand loyalty. Also, service
quality has a directional relationship to the overall experience as an input
into the real-time experience (Knutson & Beck, 2003). Consequently, the
following hypothesis is made:
H1 : Perceived service quality has a positive effect on customer

experience.
Advertising may be a critical component of the marketing mix for any

service provider; it is considered one of the principal components of image
creation (Meenaghan, 1995). A certain image of the brand is created, and

customers choose the brand with the image that best fits them (Riley & de
Chernatony, 2000).
Intangible service benefits can be communicated effectively by link-
ing them to consumers’ life experiences (Mittal, 1999). The real challenge
of service advertising, then, is how to capture these subjective experiences
effectively. Mittal (1999) suggested that to capture subjective experiences ef-
fectively an ad ought to be vivid, realistic, and vicariously rewarding. Vicari-
ously rewarding here means that the life experiences are nontrivial, positive,
and motivational.
Advertisements raise customers’ expectations by making promises about
a product or service. When those promises are not kept, customers have a
poor experience. Therefore, when advertising raises customer expectations,

the customer experience must go beyond expectations in order to deliver a
great customer experience. Good experience offers a brilliantly simple sum-
mary of the relationship between advertising and customer experience. If
companies are pouring money into advertising and raising their customers’
expectations, but they do not match their investment in customer experi-
ence, it would follow that they risk investing in delivering a poor customer
experience.
H2 : Advertising has a significant effect on customer experience during

service consumption.
Price is perhaps the most intangible element in the marketing mix, and
typically there is little sensory experience linked to the price variable (Evans,
Moutinho, & Raaij, 1996). The customer perception of price is more important
than the actual price (Monroe, 1973). Price perception is concerned with how
price information is comprehended by customers and made meaningful to
them (Evans et al., 1996). Price is also a cue often used by customers to
make patronage decisions, to determine what to expect, and to evaluate the
quality of a service relative to how much they paid. Customers use price
as a good proxy for quality when they have insufficient information about
the quality (Evans et al., 1996). In fact, a considerable number of consumer
research studies have examined which information cues consumers use most
often when evaluating products. The findings indicate that consumers most
often rely on price (Zeithaml, Berry, & Parasuraman, 1993). An inference has
been made that customers may use price as an indicator of experience and
that price perception is a means through which a customer sets a bundle of
expectations that he or she needs to be fulfilled.
H3 : Price perception of services has a significant effect on customer

experience during service consumption.
A. R. Ismail 171
Prior work has highlighted the impact of customer contact employees on

the perception of service quality (Bitner, Booms, & Tetreault, 1990; Farrell,
Souchon, & Durden, 2001). Employee behavior would affect customers in
terms of interaction with the firm (Winsted, 2000). Several pieces of research
have focused on the interaction that takes place between the customer and
company personnel during service encounters and have considered creating
consumer satisfaction and service quality to be essential (Grönroos, 2001).
Consumers report store personnel to be a contributing factor to entertaining
store experiences, especially when the staff has the ability to provide an
extraordinary service experience (Jones, 1999). Furthermore, employees are
often pointed out as being a major antecedent of customers’ interpretations of
their experiences with services and are often associated with the consistency
of the service quality delivered (de Chernatony & McDonald, 1998; Grönroos,
2001).
H4a : Employee performance has a significant effect on customer

experience during service consumption.
H4b : Employee performance relates positively to perceived service
quality.
H4c : Perceived service quality mediates the impact of employees on
Atmospherics or servicescape is the area that receives the most research

attention. Atmospherics relates to factors in the store environment that are
designed to create certain emotional and behavioral responses on the part of
the consumer (Kotler, 1973). The servicescape may have either a positive or
a negative influence on the experience outcome. Office décor, car parking,
the building’s design, and the appearance of the reception area are impor-
tant influencers of brand associations, as those factors often are part of the
customer’s first interaction with the service firm (McDonald, de Chernatony,
& Harris, 2001; Yoo, Donthu, & Lee, 2000).
Definitions of store atmosphere vary from including exclusively subtle
aspects, such as music (Yalch & Spangenberg, 1990), to also including as-
pects of the physical environment that constitutes the store, such as store
decorations (Hoffman & Turley, 2002). Hoffman and Turley (2002, p. 35)
gave a holistic view of the concept: “Atmospherics are composed of both
tangible elements (the building, carpeting, fixtures, and point-of-purchase
decorations) and intangible elements (colours, music, temperature, scents)
that comprise service experiences.”
A positive atmosphere can lead to approach behaviors, which implies
that consumers stay longer in the store or spend more money or that the
propensity for impulse buying increases (Foxall & Greenley, 2000). Some
have even related atmospherics to the possibility of creating long-lasting
consumer relationships (Babin & Attaway, 2000). Conversely, a negative
atmosphere leads to avoidance behavior, such as a desire to leave the store

or a sense of dissatisfaction (Donovan & Rossiter, 1982; Turley & Milliman,
2000).
Thus, perceived service quality is likely to partially mediate the direct
impact of servicescape on customer experience. The emotions provoked and
the subjective feelings the customer has due to the setting effect are likely to
contribute to customer experience. Therefore, I hypothesize the following:
H5a : Servicescape or setting influences customer experience during ser-

vice consumption.
H5b : Servicescape influences perceived service quality.
H5c : Perceived service quality mediates the impact of servicescape on

A core service is the reason why the service firm exists in the market.
Sasser, Olsen, and Wyckoff (as cited in Palmer, 1994) identified core service
to be substantive service; that is, the essential function of a service. Across
different types of services, such as dental services, auto services, restaurants,
and hairstylists, core service quality directly affects customer satisfaction (Mc-
Dougall & Levesque, as cited in Grace & O’Cass, 2004). In the hotel sector,
accommodation is the base for a hotel business; accommodation is one of
the most tangible elements of the tourist experience, and therefore hotels
should provide environments in which the visitor feels comfortable and wel-
comed (Page & Connell, 2006). According to Medlik and Ingram (2000), the
accommodation product comprises the location of the establishment, its fa-
cilities (bedrooms, bars, restaurants, recreation facilities), the level of service
provided, the image portrayed to the customer, and its price.
The term resort implies the provision of not only the accommodation
but also other substantial service at one location (Page & Connell, 2006).
Poon (1998) defined all-inclusive resorts as those
which include virtually everything in the prepaid price—from airport

transfers, baggage handling, government taxes, rooms, all meals, snacks,
drinks and cigarettes to the use of all facilities, equipment and certified
instructors . . . . the result is that the use of cash is eliminated. (p. 62)
Core service in the present study likely directly affects service quality and cus-
tomer experience; in addition, this study hypothesizes that perceived service
quality plays a mediating role between core service and customer experi-
ence. The rationale is that the customer’s assessment of his or her experience
will be based in part on perceived service quality, which undoubtedly is an
outcome of the core service experience.
A. R. Ismail 173
H6a : Customers’ interpretations of core service influence customer expe-

rience during service consumption.
H6b : Core service has a significant effect on perceived service quality.
H6c : Perceived service quality mediates the impact of core service on
Because of the experiential nature of services, word-of-mouth commu-

nications are viewed as more reliable and trustworthy. Word of mouth is
the means by which customers exchange information about services, thus
diffusing information about a product throughout a market. Grönroos (1990,
p. 158) described word of mouth as “the message about an organisation, its
credibility and trustworthiness, its way of operating and its services, commu-
nicated from one person to another.”

Research has examined word of mouth as both an input into consumer
decision making (Feick & Price, 1987) and an outcome of the purchase
process (Richins, 1983). The content of word of mouth affects purchase
decisions either positively (Richins, 1983) or negatively (Bolfing, 1989). In
sum, word of mouth is a powerful source of influence to assist the customer
in predicting the consumption experience.
H7 : Word of mouth positively influences customer experience during

Mood is a mild, pervasive, and generalized affective state rather than

intense emotions (Mattila & Wirtz, 2000). Positive mood in general seems
to lead to more positive evaluations, including more positive consumer sat-
isfaction judgments (Mano & Oliver, 1993). Conversely, a person in a bad
mood will perceive the service consumption experience in a more negative
way (Mattila & Wirtz, 2000). Negative affective states are related to negatively
toned cognitions such that the consumer is likely to evaluate the experience
as worse than expected (Babin, Darden, Louisiana State University, & Babin,
1998). In addition, “customers who are in a bad mood possibly pay more at-
tention to uncivil employee behaviour” (Liljander & Mattsson, 2002, p. 855).
Therefore, I hypothesize the following:
H8 : Customer pre-consumption mood positively influences customer ex-

perience during service consumption.
Consequences of Customer Experience

In essence, an outstanding customer experience affects brand loyalty. Brand
loyalty is the attachment that a customer has to a brand, and in this study
brand loyalty is treated as the final dependent variable. A customer loyal to
a brand is less likely to switch to another brand. Having a loyal customer is
more profitable for a company than acquiring a new one for several reasons,
such as the fact that a loyal customer is less sensitive to price, he or she
spends more with the company, and his or her serving cost is less (Berry &
Parasuraman, 1991; Tepeci, 1999).
Chaudhuri and Holbrook (2001, p. 82) defined brand loyalty as “a
deeply held commitment to re-buy or re-patronize a preferred product or
service consistently in the future, thereby causing repetitive same-brand set
purchasing, despite situational influences’ and marketing efforts’ having the
potential to cause switching behaviour.” This definition underscores two
principal elements of brand loyalty: behavioral aspects and attitudinal as-
pects (Aaker, 1991; Oliver, 1999; Rundle-Thiele & Mackay, 2001). Behavioral
loyalty refers to those aspects of consumer behavior directed toward a par-
ticular brand over time—in other words, repeated purchases of a brand

(Rundle-Thiele & Mackay, 2001). The current study seeks to measure at-
titudinal brand loyalty because of its importance in driving behavior and
because attitudinal loyalty is more enduring.
In the current study, and in accordance with the customer experience
literature, which asserts that customer experience affects loyalty behaviors
(Barsky & Nash, 2002; Berry et al., 2002), I argue that a well-orchestrated
experience by companies is a major contribution to creating brand loyalty.
In other words, positive experience affects a customer’s brand loyalty.
H9 : Perceived service quality contributes positively to brand loyalty.

H10 : Customer experience contributes positively to brand loyalty.
METHOD
Qualitative Study
A netnography (Kozinets, 2002) in the form of nonparticipant observation
was used in this particular study based on customer reviews published on
the Internet that contained detailed information about experiences in Sharm
El Sheikh Hotels. The reason for choosing nonparticipant observation is the
undesirable influence of the outsider on the group (Elliott & Jankel-Elliott,
2003). I intensively reviewed the most prominent websites that offer online
consumer reviews about experiences, either positive or negative, with hotels
in Sharm El Sheikh, taking into consideration the criteria recommended by
Kozinets (2002). Two websites were found to be most relevant to this study:
www.holidaywatchdog.com and www.tripadvisor.com.
Direct copy from the computer-mediated communications of online
community members was adopted. The selection process resulted in 85
reviews. Postings on these websites were primarily in English. A data anal-
ysis approach using the constant comparative method was conducted with
the help of NVivo software (Kozinets, 2002). Following the principles for the
A. R. Ismail 175
analysis and interpretation of qualitative data recommended by Arnould and

Wallendorf (1994), Spiggle (1994), and Strauss and Corbin (1990), I identified
four themes.
Finding of the Netnography Study Regarding the Focal Construct

The findings of the qualitative study were treated as indicative only in this
study, and further quantitative research was carried out to confirm the results
of the netnography study. The quantitative results, specifically, illustrated
four aspects of the experience construct in the context of resort hotels in
Sharm El Sheikh in Egypt. The first focused on the educational experience
customers had during the holiday, and this was consistent with Otto and
Ritchie (1996) and Pine and Gilmore (1999). The findings showed that this
experience was autoltelic which means “having itself as its only purpose”
(TalkTalk, 2011; Csikszentmihalyi, 1990; Packer, 2006). The findings empha-
size the importance of the notion of the educational element of experience
that customers seek, which was clearly evident in their comments:
Me and my husband went diving in the red sea with the Aquarius dive
school. . .. . .. . .This was a once in a lifetime experience for me as the fish
are so brightly coloured and the coral is out of this world. There are
camel and horse riding on the beach.
(Mrs. H. Foster, Conrad Hotel review, posted July 2008, www.holiday
watchdog.com)
Another aspect of customer experience in the present study was the

novelty component. Early conceptualizations of the tourist experience by
Cohen (1979) emphasized its distinctiveness from everyday life and high-
lighted the quest for novelty as a key element, something that a person who
travels away from home seeks. The novelty element was also emphasized in
the findings of the qualitative study. For example:
We also went quad biking in the desert which was so much fun and
a boat trip with snorkelling it is literally like being in a aquarium and
the fish are not scared of you they come right up to investigate (once in
a life time!!!). (Miss S. Cottee, Sunrise Island View Hotel review, posted
October 2007, www.holidaywatchdog.com)
This finding is consistent with previous studies in the marketing litera-

ture, such as Poulsson and Kale (2004), and the tourism literature that have
referred to experiencing novelty as one of the push factors that are consid-
ered to be sociopsychological motivations that motivate individuals to travel
(Dann, 1981; Lee & Crompton, 1992).
In addition, the qualitative research captured another important com-

ponent of customer experience. The relational experience, which represents
the experience of having a relationship with new people in the place, in-
volves the person, consumption, or the use of a product with other people
(Gentile et al., 2007).
While I was staying at Dreams beach I met someone known as Waggy,

he works in the restaurant that is by the main pool. I had the chance to
kiss him before Ramadan started and I didn’t [dam] it! I’m going back
especially just to see him in February 2008. Really miss him loads,
my family absolutely loved him and wanted him to marry me. (Miss
S. Louise Read, Dreams Beach Hotel review, posted October 2008,
www.holidaywatchdog.com)
Awareness and appreciation of beauty was another aspect that was

uncovered by the qualitative study. The results showed that there is an
emphasis on the beauty of the place, and the word beauty was mentioned
regularly in customers’ reviews. For example:
I read an earlier review by somebody that stated the entrance to the hotel
reminded them of the entrance to Jurassic Park. How true! It was partly
the thrill and relief of finally getting there (safely) and partly awe that
made our eyes widen at the beauty of the resort as we got driven to our
room on a golfing style buggy. Everything looks beautifully lit here at
night. (Miss N. Wooding, Crowne Plaza Resort Hotel review, posted May
2008, www.holidaywatchdog.com)
These results of the current study came into accordance with the pre-
vious literature on sense of beauty as an important human capacity (Hag-
man, 2002) that customers value because of the feeling of wholeness, plea-
sure, lessening of anxiety, awe, joy, excitement, optimism, and contentment
(Hagman, 2002).
Measurement Instrument
Based on the literature and the qualitative netnography study, scales to
measure the constructs of the study were developed (see Table 1). This study
generated a pool of sample measures. All items were measured on a 7-point
Likert scale. The initial item generation (Churchill, 1979) produced 59 items.
Items from the literature in addition to items produced from the qualitative
study were used to develop the questionnaire that asked customers about
their post-evaluation of the experience (see Table 1). Items from the literature
were first screened out and refined against the netnographic study, and the
A. R. Ismail 177
TABLE 1 Composite Reliability and Variance Extracted
Sources of Composite Variance

Construct Measurement Items Reliability Extracted
Advertising Holbrook & Batra (1987) and the 0.93 0.76

qualitative study
Price Perception Voss, Glenn, Parasuraman, & Grewal 0.90 0.69
(1998) and the qualitative study
Atmosphere Baker, Grewal, & Parasuraman (1994); 0.85 0.53
Wakfield & Baker (1998); Bitner
(1992); Wakefield & Blodgett (1999);
Turley & Milliman (2000); Baker,
Parasuraman, Grewal, & Voss (2002)
and supported by the qualitative study
Employee Performance Wakefield & Blodgett (1999); Baker, 0.95 0.79
Parasuraman, Grewal, & Voss (2002);

Cronin & Taylor (1992); Mittal & Lassar
(1996) and supported by the
qualitative study
Core Services The qualitative study 0.80 0.50
Word of Mouth O’Cass & Grace (2004) and the 0.87 0.70
qualitative study
Pre-Consumption Swinyard (1993) 0.96 0.80
Mood
Customer Experience Otto & Ritchie (1996); Oh et al. (2007) 0.84 0.57
and the qualitative study
Perceived Service Brady & Cronin (2001) and the 0.90 0.74
Quality qualitative study
Brand Loyalty Pritchard, Havitz, & Howard (1999); 0.81 0.60
Ganesh, Arnold, & Reynolds (2000)
number of items for each concept was kept to a minimum to avoid a lengthy
questionnaire.
Context and Sample

This study used experiential brands that focus on consumer interaction with
a company’s product or services (Dea & Hemerling, 1998). Specifically, the
service sector was considered a good place to undertake the current study
because of the close relationship between customers and brand that exists
in the service sector (Franzen, 1999). Al Batros hotel brands in Egypt, par-
ticularly in Sharm El Sheikh, was thus chosen as the context for this study
because of the fact that hotels provide a vast array of opportunities for
customer interaction that provoke emotions and determine customers’ feel-
ings toward the services being offered (MacMillan & McGrath, 1997).
This survey was based not on probability sampling but on convenience
sampling. Questionnaires were administered at three different hotels (Beach
Albatros, Aqua Park, and Royal Moderna) in Sharm El Sheikh Egypt. First
a pilot test was undertaken; 77 questionnaires were collected. However, 21

questionnaires were excluded because of the large amount of missing data
and low quality of responses. As a result, the pretest sample size was 56,
which is in accordance with the previous literature, which has suggested
pilot test sample sizes to be generally small (i.e., up to 100 respondents;
Diamantopoulos, Schlegelmilch, & Reynolds, 1994).
The reliability of all of the constructs was assessed using Cronbach’s
alpha and was above the cut-off point of .70 (Nunnally & Bernstein, 1994).
Items with item-to-total coefficients <0.5 were deleted for the purpose of
parsimony. As a result, 49 items were retained for 10 latent variables (see
Table 2). Exploratory factor analysis was then performed to examine whether
individual items loaded on corresponding factors as intended. This study con-
ducted varimax rotation on all measured items. Items that were inconsistent
(i.e., low loadings [i.e., less than 0.50], multiple loadings, low communalities
[i.e., less than 0.60]) with the hypothesized factor structure were considered
for removal from the scale prior to assessing the measurement model with
confirmatory factor analysis (CFA) in the second study. Indicators that cross-
loaded highly on two or more factors were typically deleted, except when
such cross-loadings could be justified conceptually. As a result, 39 items
were retained. CFA, based on the covariance matrix of the items, was used
to assess the items of the research construct.
The data for the main survey were intended to focus on three hotels
located on Sharm El Sheikh in Egypt, and questionnaires were distributed
to visitors who stayed in Albatros hotels. In order to maximize customer
participation, a cash incentive was used: £150 was provided as an incentive
to customers if their names were drawn as a winner to encourage them to
participate in the survey. Accordingly, 528 questionnaires were collected, and
19 were excluded because of the large amount of missing data. Therefore,
509 valid questionnaires were obtained for the analysis.
Table 3 provides the demographic characteristics. The results showed
that majority of the respondents were women (63.5%), and most of them
were between the ages of 30 and 39 (22.5%). The majority of customers
were married (62.4%) as opposed to single (31%). The results also showed
that a high percentage of the respondents had up to a high school education
(50.3%), and with regard to occupation, the results indicated that only 15.9%
of the respondents were working as managers, whereas more than half of the
respondents (59.4%) were working other jobs, such as actress, bookkeeper,
bus driver, nurse, business owner, fire fighter, hairdresser, housewife,
musician, university lecturer, police officer, social carer, retired, fitness ad-
ministrator, dog groomer, pilot, builder, electrician, and surgeon.
The study applied a two-step approach as recommended by Anderson
and Gerbing (1988). The first step in this approach was to develop an ac-
ceptable measurement model before building on this model to predict causal
relationships among the study variables.
A. R. Ismail 179
TABLE 2 The Results of the Reliability Test

Corrected Cronbach’s
Item-Total Alpha if the Item Cronbach’s Sample
Construct Item Correlation is Deleted Alpha Size (N )a
Advertising AD01 0.913 .891 .934 51

AD02 0.917 .889
AD03 0.689 .962
AD04 0.867 .906
Price Perception PP01 0.821 .842 .888 52
PP02 0.672 .878
PP03 0.643 .884
PP04 0.794 .849
PP05 0.728 .775
Servicescape SE01 0.547 .776 .803 47
SE02 0.514 .781

SE03 0.749 .736
SE04 0.717 .742
SE05 0.655 .758
SE06 0.500 .783
SE07 0.130 .843
Employee Performance EM01 0.629 .935 .929 56
EM02 0.786 .917
EM03 0.802 .916
EM04 0.874 .906
EM05 0.871 .906
EM06 0.824 .912
Core Services CS01 0.677 .784 .843 50
CS02 0.649 .786
CS03 0.678 .779
CS04 0.539 .822
CS05 0.617 .797
Word of Mouth WO01 0.398 .952 .877 43
WO02 0.826 .804
WO03 0.839 .798
WO04 0.915 .927
Pre-Consumption Mood MO01 0.554 .967 .918 51
MO02 0.990 .861
MO03 0.919 .853
MO04 0.907 .858
Customer Experience CE01 0.765 .918 .928 53
CE02 0.808 .917
CE03 0.826 .915
CE04 0.769 .918
CE05 0.821 .916
CE06 0.674 .923
CE07 0.664 .923
CE08 0.649 .926
CE09 0.581 .927
CE10 0.697 .922
Perceived Service Quality SQ01 0.813 .856 .897 55
SQ02 0.835 .847
SQ03 0.705 .897
SQ04 0.763 .871
Brand Loyalty BL01 0.527 .593 .824 53
BL02 0.658 .501
BL03 0.626 .525
BL04 0.179 .824
aMissing data accounts for the discrepancies among the total N s.
TABLE 3 Demographic Profile of British Customers in Main Survey Sample (n = 509)
Characteristic % n
Age
19 years old or less 5 25
20–29 years 22.1 111
30–39 years 22.5 113
40–49 years 25 126
50–59 years 18.1 91
60 years old or more 7.4 37
Total 100 503
Gender
Male 36.5 183
Female 63.5 318
Total 100 501
Marital Status
Single 31 152
Married 62.4 306
Divorced 6.5 32
Total 100 490
Education
Up to high school 50.3 246
Bachelor’s degree 22.3 109
Master’s degree or higher 16.6 81
Not applicable 10.8 53
Total 100 489
Occupation
Manager 15.4 63
Staff in private companies 12.7 52
Student 4.9 20
Retired 4.9 20
Teacher 2.7 11
Othera 59.4 243
Total 100 409
aOther includes actress, bookkeeper, bus driver, nurse, business owner, fire fighter, hairdresser, house-
wife, musician, university lecturer and police officer social carer, retired, fitness administrator, dog
groomer, pilot, builder, electrician, and surgeon.
Measurement Model Evaluation

CFA is a technique used to test whether the theoretically imposed structure
of the underlying constructs exists in the observed data. The first run of
CFA for the measurement model (N = 509) indicated that item CS01 had a
loading less than 0.5 (0.44); as a result, this item was considered for deletion
for the next run to increase the model fit. In addition, the initial results of
the CFA of the measurement model showed a considerably satisfactory level
of fit, χ 2(df = 695) = 1,750.62, p = .000, comparative fit index (CFI) =
0.98, Tucker–Lewis index (TLI) = 0.98, goodness-of-fit index (GFI) = 0.83,
adjusted goodness-of-fit index (AGFI) = 0.80, normed fit index (NFI) = 0.96,
and root mean square error of approximation (RMSEA) = 0.059. While the
A. R. Ismail 181
chi-square was significant, the other values suggested an adequate fit to

the model. The chi-square value is very sensitive to the sample size and
statistically significant, especially with a large sample (Anderson & Gerbing,
1988; Bagozzi & Yi, 1988). Therefore, the measurement model could be
judged as providing an acceptable fit.
The revised CFA model, after the deletion of CS01, showed that the
model provided a significant fit to the data, χ 2(df = 657) = 1,688.40, p =
.000, CFI = 0.98, TLI = 0.98, GFI = 0.84, AGFI = 0.81, NFI = 0.96, and
RMSEA = 0.060. In this study, the normed chi-square (χ 2/df) is used, in
conjunction with other measures, as an indicator of overall fit. It is considered
the most popular parsimonious fit index used to evaluate the appropriateness
of a model (Hair, Anderson, Tatham, & Black, 2006), but it is also sensitive
to the sample size because chi-square is a major component in this measure.

The ratio of the chi-square to the degrees of freedom was 2.56, which is
considered within the acceptable range of 2 to 5 (Marsh & Hovecar, 1985).
Table 4 summarizes the results of the CFA test and shows a satisfactory
fit.
This study assessed the quality of the measurement models by investigat-
ing unidimensionality, composite reliability, estimates of variance extracted,
convergent validity, and discriminant validity. Table 4 shows that the overall
goodness of fit supports undimensionality (Steenkamp & van Trijp, 1991).
Unidimensionality tests were performed on all of the constructs by examin-
ing the estimated loadings and assessments of their statistical significance on
each construct. An inspection of factor loadings showed that all items had
significant factor loadings, with t values exceeding 1.96. All of the constructs
had alpha coefficients greater than .7.
All of the constructs had good reliability, their composite reliability was
between 0.60 and 0.80, and estimates of the variance extracted exceeded
0.50 (e.g., Bagozzi & Yi, 1988; Fornell & Larcker, 1981). Table 1 shows that
all scales demonstrated good reliability. Convergent validity was assessed
by reviewing the t tests for the factor loadings. The t values for the factor
loadings ranged from 10.62 to 21.70. The fact that all t tests were significant
(p < .05) demonstrates that the convergent validity was adequate. The dis-
criminant validity was assessed based on criteria recommended by Anderson
and Gerbing (1988).
The models were estimated twice for every possible pair of constructs
in the measurement model. In the first model the phi correlation between
the constructs was set to vary (unconstrained model), and in the second the
phi was constrained to 1.00 (constrained model; Anderson & Gerbing, 1988).
The chi-square difference and the degrees of freedom were computed for
both the constrained and unconstrained models. The results showed that
all models in which the phi was set to unity displayed worse fit (all χ 2
difference > 3.841, df = 1, and p = .05).
TABLE 4 Results of the Confirmatory Factor Analysis of the Main Survey
182
Construct Item SMC Loading t Alpha
Advertising I reacted favourably to the advertisements. 0.69 .83 24.38 0.94

I felt positive towards the advertisements. 0.77 .88 26.03
The advertisements motivated me to make the 0.81 .90 22.77
holiday decision.
The advertisements led me to infer what the 0.77 .88 21.21
experience would be like.
Price Perception Was reasonable. 0.81 .90 19.61 0.91
Helped me make my decision. 0.66 .81 16.79
The price was still reasonable. 0.76 .82 26.26
I was pleased with the price I paid. 0.64 .80 25.83
Atmosphere The temperature was comfortable. 0.50 .71 16.93 0.86
The lighting was appropriate. 0.48 .69 17.02
The aroma was enticing. 0.59 .77 18.20
The natural environment (such as sea and 0.52 .72 18.25
gardens) was attractive.
The overall design of this hotel was 0.59 .77 19.25
interesting.
Employee Performance Employees were always willing to help. 0.86 .93 25.75 0.94
Employees were polite and courteous. 0.86 .93 25.46
Employees gave me personal attention. 0.77 .88 22.78
Employees were friendly and pleasant. 0.86 .93 25.87
Employees took the time to get to know me 0.59 .77 18.82
personally.
Core Services Leisure services (swimming pool, fitness and 0.48 .69 15.96 0.77
health care centre and sauna) were
pleasant.
Accommodation was comfortable. 0.58 .76 17.65
Excursions and trips offered were exciting. 0.56 .75 16.59
Educational services (diving, yoga, cooking, 0.39 .63 12.69
and belly dance classes) were pleasant and
thought provoking.
Word of Mouth My friends provided some different ideas 0.38 .62 14.03 0.87
about the hotel.
The word of mouth helped me make a 0.85 .92 23.79
decision.
The word of mouth influenced my evaluation. 0.86 .93 24.30
Pre-Consumption Mood Sad . . . . . . . . . . . . . . . . . . . . . . . . . . . Happy 0.76 .87 23.24 0.95
Bad mood . . . . . . . . . . . . . . . Good mood 0.94 .97 27.10
Irritable . . . . . . . . . Pleased 0.92 .96 26.28
Depressed . . . . . . . . . . . . . . . . . . . . . . . . Cheerful 0.83 .91 25.43
Customer Experience I felt like I was doing something new and 0.71 .84 20.77 0.83
different.
The experience was highly educational to me. 0.56 .75 19.57
I felt a sense of beauty. 0.62 .79 17.22
I made new acquaintances and friends. 0.39 .63 14.40
Perceived Service Quality I would say that this hotel provides superior 0.74 .86 23.48 0.91
service.
I believe this hotel offers excellent service. 0.74 .86 23.33
This hotel was a place worth staying in. 0.74 .86 21.91
Brand Loyalty I am very loyal to this hotel. 0.58 .76 18.35 0.82
I would continue to come to this hotel even if 0.38 .62 15.32
the price was higher.
I would highly recommend this hotel to my 0.83 .91 21.27
friends.
Notes: χ 2 = 1,727.95, df = 639, χ 2/df = 1.96; comparative fit index = 0.99; goodness-of-fit index = 0.87; standardized root-mean-square residual = 0.10; normed
fit index = 0.97; Tucker–Lewis index = 0.98; adjusted goodness-of-fit index = 0.85; root mean square error of approximation = 0.047; SMC = Squared Multiple
Correlation.
183
TABLE 5 Results of Testing the Hypotheses
Hypothesis Path Estimate t Test Result
H1 : Perceived service quality has a positive 0.31 3.92 Accepted

effect on customer experience.
H2 : Advertising has a significant effect on −0.01 −0.13 Rejected
customer experience during service
consumption
H3 : Price perception of services has a −0.07 −1.31∗ Accepted
significant effect on customer experience
during service consumption.
H4a : Employee performance has a significant −0.12 −1.97 Rejected
effect on customer experience during
H4b : Employee performance relates positively 0.27 5.62 Accepted
to perceived service quality.

H4c : Perceived service quality mediates the Rejected
impact of employees on customer
experience.
H5a : Servicescape or setting influences 0.04 0.39 Rejected
consumption.
H5b : Servicescape influences perceived service 0.27 3.55 Accepted
quality.
H5c : Perceived service quality mediates the Rejected
impact of servicescape on customer
experience.
H6a : Customers’ interpretations of core service 0.54 4.76 Accepted
influence customer experience during
H6b : Core service has a significant effect on 0.37 4.42 Accepted
perceived service quality.
H6c : Perceived service quality mediates the Accepted
impact of core service on customer
experience.
H7 : Word of mouth positively influences 0.16 3.64 Accepted
consumption.
H8 : Customer pre-consumption mood 0.01 0.22 Rejected
positively influences customer experience
during service consumption.
H9 : Perceived service quality contributes 0.70 12.34 Accepted
positively to brand loyalty.
H10 : customer experience contributes to brand 0.28 5.47 Accepted
loyalty positively.
∗p < .1
FINDINGS
Structural Model Evaluation
In testing the hypothesized model, I found that the results supported the
acceptance of H1 , H3 , H4b , H5b , H6a , H6b , H7 , H9 , and H10 (see Table 5). The
standardized estimates for these hypotheses were all significant (γ = –.07,
A. R. Ismail 185
.27, .27, .54, .37, .16; and β = .31, .70, and .28, respectively). H2 , H4a , H5a ,
and H8 were rejected because they were not statistically significant (γ =
–.01 –.12, .04, .01, respectively). The model was defined by 38 items that
identified the 10 factors. The covariance matrix among the variables was
used to test the model. The goodness-of-fit indices showed that this model
fit the data adequately, even though the chi-square was significant, χ 2(df =
668) = 1,727.95, GFI = 0.83, AGFI = 0.80, CFI = 0.98, TLI = 0.98, RMSEA =
0.06, χ 2/df = 2.59.
The causal relationships among the independent constructs price per-
ception, employee performance, core service, word of mouth, and customer
experience were positive and statistically significant at the .05 level. The find-
ings provided strong empirical evidence for H1 , H3 , H4b , H5b , H6a , H6b , H7 ,
H9 , and H10 . The findings confirmed the path coefficients from perceived ser-
vice quality to customer experience and from customer experience to brand
loyalty (i.e., positive and significant at the .05 level). Core service had the
strongest effect on customer experience (γ = .54, p < .05). The model ex-
plained 59% of the variance in the customer experience construct. Perceived
service quality had the strongest effect on brand loyalty (β = .70, p < .05),
followed by customer experience (β = .28, p < .05). Thus, the findings sup-
ported H9 and H10 . The derived model explained 66% of the variance in per-
ceived service quality and 82% of the variance in the brand loyalty construct.
Mediation
The hypothesized mediating effect of perceived service quality was exam-
ined using the procedures that Baron and Kenny (1986) recommended.
The findings indicated that perceived service quality had no, a partial, and
a full mediating role in the relationship of employees, core service, and
servicescape, respectively, on customer experience. These findings sup-
ported H6c and rejected both H4c and H5c .
Testing for mediation was performed through a three-step process. First,
the direct effects model was examined to ensure the existence of a direct
relationship between the independent and dependent variables. Second, a
mediator model has been created in which the direct links were excluded be-
tween the antecedents set and the customer experience construct by setting
the gamma coefficient to zero for those relationships.
Third, a combined model has been created that included both direct
effects and mediator effects in which the gamma coefficients for direct re-
lationships were estimated freely. The difference between the chi-square
values for the mediator and combined models was computed and the results
were compared with the chi-square value within 1 df (χ 2critical = 3.841). The
model with the smaller chi-square was considered a better model (Diaman-
topoulos & Siguaw, 2000).
Advertising
0.00 (-0.02)
Price
-0.01 (-0.10)
Employees
-0.01(-0.14)
0.78 (14.50) R2 = 0.37 0.37

Servicescape 0.14 (1.53)
Customer experience
Brand loyalty
0.60 (5.86) R2 = 0.60

Core service
0.16 (3.70)
WOM
-0.00 (-0.06)
Mood
Chi-Square DF Chi-square CFI GFI RMR TLI AGFI RMSEA

1529.38 565 2.59 0.97 0.84 0.12 0.97 0.81 0.062
FIGURE 2 Direct Effects Model. ∗ t values greater than 1.282 were significant at the 0.90
confidence level, and t values greater than 1.96 were significant at 0.95. Solid lines indicate
significant relationships, and dotted lines indicate nonsignificant relationships. WOM = word
of mouth; DF = degrees of freedom; CFI = comparative fit index; GFI = goodness-of-fit
index; RMR = standardized root-mean-square residual; TLI = Tucker–Lewis index; AGFI =
adjusted goodness-of-fit index; RMSEA = root mean square error of approximation.
Figure 2 presents the findings for the direct effects model test. The
goodness-of-fit indices indicated a good fit; the model predicted 60% of the
variance in customer experience and 37% of the variance in brand loyalty.
However, only two of the three direct paths were significant. Both core
service and servicescape were antecedents to customer experience. In the
case of the employee performance construct, where no direct relationship
existed, perceived service quality could not serve as a mediator. Accordingly,
the findings served to reject H4c .
Figure 3 presents the results of the mediation model test. This model
provided a slightly worse fit than the direct effects model, with the RMSEA
indicating a reasonable fit (0.062) and CFI = 0.97. All of the paths in this
model were significant with the exception of two paths from price perception
and mood to customer experience, suggesting that mediation by perceived
service quality is possible for the effect of servicescape and core service
on customer experience but not for the employee performance construct,
A. R. Ismail 187
Advertising R2 = 0.68
0.07 (1.39)
Perceived
service quality
Price
0.02 (0.39)
0. 26 (5.33) 0.72 (12.48)

Employees
0. 57 (10.16)
0.26 (3.47)
0.25 (4.91) R2 = 0.82
Servicescape
Customer experience
Brand loyalty
0.40 (5.13)
R2 = 0.51
Core service
0.22 (5.13)
WOM
0.04 (1.00)
Mood

1770.21 671 2.59 0.98 0.83 0.11 0.98 0.80 0.061
FIGURE 3 Mediation Model. ∗ t values greater than 1.282 were significant at the 0.90 confi-
dence level, and t values greater than 1.96 were significant at 0.95. Solid lines indicate signif-
icant relationships (p < .05), and dotted lines indicate nonsignificant relationships. WOM =
word of mouth; DF = degrees of freedom; CFI = comparative fit index; GFI = goodness-of-fit
because direct relationships were not found in the first step. This model pre-
dicted 51% of the variance in customer experience and 82% of the variance
in brand loyalty. The results of the combined effects test (the original model
of the study) again provided a reasonable fit (see Figure 4).
A chi-square difference test demonstrated that the combined effects
model had a slightly better fit than the mediator model, χ 2 = 42.26, p <
.05. To learn whether particular relationships in the model were partially
mediated by perceived service quality or were better represented by direct
paths, I compared the completely standardized parameter estimates in the
combined effects and direct effects models. I examined the direct and indirect
effects from the final model.
In comparison with the direct effects model, the path coefficient be-
tween servicescape and customer experience was reduced by .10 and the
relationship became nonsignificant. Because the effect was eliminated in the
combined effects model, this suggests the full mediation of this relationship
Advertising R2 = 0.66
-0.01 (-0.13) Perceived

service quality
Price
-0.07 (-1.31)*
0. 27 (5.62)
0.70 (12.34)
Employees
-0.12(-1.97)
0.31 (3.92)
0.27 (3.55)
0.28 (5.47) R2 = 0.82
Servicescape
0.04(0.39)
Customer experience
Brand loyalty
0.37(4.42)
0.54 (4.76) R2 = 0.59

Core service
0.16 (3.64)
WOM
0.01 (0.22)
Mood

1727.95 668 2.59 0.98 0.83 0.11 0.98 0.80 0.060
FIGURE 4 Validated Structural Model. ∗ t values greater than 1.28 were significant at the 0.90
confidence level, and t values greater than 1.96 were significant at 0.95. Solid lines indicate
significant relationships, and dotted lines indicate nonsignificant relationships. WOM = word
of mouth; DF = degrees of freedom; CFI = comparative fit index; GFI = goodness-of-fit
by perceived service quality (Hair et al., 2006). An examination of the in-

direct effects also supported full mediation of the effect of servicescape on
customer experience (see Table 6). Indirect effects accounted for 67% of
the total effects of servicescape on customer experience, suggesting that
servicescape does account for a substantial portion of the prediction of cus-
tomer experience.
TABLE 6 Completely Standardized Indirect Effects and t Values for the Combined Effects
Model
Indirect Relationship Indirect Effect t Total Effect t
SE → SQ → CE 0.08 13.92 0.12 14.31

CS → SQ → CE 0.11 17.33 0.65 22.09
Notes: SE = servicescape; SQ = service quality; CE = customer experience; CS = core service.
A. R. Ismail 189
Similarly, the direct effect of core service on customer experience de-

creased by .06 in the combined versus direct effects model but the relation-
ship remained significant, suggesting partial mediation by perceived service
quality (Hair et al., 2006). Again, indirect and direct effects were significant in
the final model (see Table 6), with 17% of the variance attributed to indirect
effects.
Examining the Reliability of Direct and Indirect Effects and the

Predictive Validity of Models Across the Individual Hotels
To further confirm or reject the hypotheses, the data analyses included an
examination of the reliability of the direct and indirect effects predicted and
found for the total samples across the three hotels. Also, cross-validating pre-
dictive multiple regression models were estimated for the three dependent
variables for each hotel.
Correlations for all variables and path analyses models for the three
dependent variables were analyzed for each individual hotel. The stepwise
multiple regression analyses included all possible antecedent variables (i.e.,
the possibility was permitted that the seven antecedent variables to perceived
service quality and customer experience could have direct influences on
brand loyalty).
Figure 5 presents the path model findings for each of the three hotels;
the findings confirmed that perceived service quality (PSQ) and customer
experience (CE) had significant direct effects on brand loyalty for each hotel
and that the influences of the seven antecedent variables were nearly entirely
through PSQ and CE. PSQ had a significant direct influence on CE for two
of the three hotels along with some of the seven antecedent variables. Core
service had a significant direct influence on both PSQ and CE for all three
hotels. These results demonstrate high reliability for the main hypotheses
and support the generalizability of the findings across the three hotels.
For the predictive validity analyses, the best fit models for brand loyalty,
customer experience, and perceived service quality for Hotel 1 were used to
predict informants’ reports for Hotels 2 and 3, and r 2 was estimated for the
predicted versus observed values for each of the three dependent variables.
The same procedure was used to test the predictive validities of the three
models for Hotels 2 and 3.
Table 7 includes best fit and predictive validity estimates (r 2 values). The
best fit validity estimates were greater than or equal to the predictive validity
estimates for all 18 possible comparisons (p < .001 by a sign test). For brand
loyalty, the predictive validity estimates indicate substantially high accuracies
in using models created from data for other hotels to predict brand loyalties
for different hotels using PSQ and CE data. The predictive validity estimates
are lower for PSQ and CE than for brand loyalty in some comparisons in
Table 7 but still indicate significant and reasonably high levels of accuracy.
(adj. R2 = .48) 1
.342
CS PSQ .231
.629 BL (adj. R2 = .59)
Hotel 1
.432
ATM CE .614
.248
1 1
(adj. R2 = .65) (DF = 2/70 for all 3 models)
EMP .473
(adj. R2 = .61) 2
CS .18
PSQ .533
Hotel 2 .368
PP BL (adj. R2 = .70) 2
.201 .349
.291
WOM CE 2
(DF = 3, 144 for all 3 models)
.07 (adj. R2 = .46) 2
AD .099
(adj. R 2 = .57, DF = 4, 219)
ATM .189
PSQ .536
Hotel 3 .427
EMP .378 BL (adj. R2 = .54, DF = 2/220)
.224
CE .298
CS
.214 (adj. R 2 = .35, DF = 3, 219)
WOM .199
FIGURE 5 Parsimonious Path Models for Each Hotel. Arrows include standardized partial
regression coefficients (betas). CS = core service; PSQ = perceived service quality; CE =
customer experience; BL = brand loyalty; EMP = employees; PP = price perception; WOM
= word of mouth; DF = degrees of freedom; AD = advertising; ATM = Atmosphere.
TABLE 7 Fit and Predictive r 2 Values for Each of the Three Hotels
Dependent Hotel 1 Hotel 2 Hotel 3

Hotel Variable Models Models Models
Hotel 1 BL (.64) .60 .63

CE (.67) .64 .59
PSQ (.47) .30 .39
Hotel 2 BL .48 (.71) .71
CE .31 (.49) .44
PSQ .52 (.63) .62
BL .55 .55 (.56)
Hotel 3 CE .28 .36 (.37)
PSQ .46 .53 (.58)
Notes: Values in parentheses show fit, and the remaining values show predictive validity. BL = brand
loyalty; CE = customer experience; PSQ = perceived service quality.
A. R. Ismail 191
DISCUSSION AND CONCLUSION

Discussion of the Findings Relating to the Hypotheses
This section discusses the results of testing the research hypotheses after
examining the focal construct. The section discusses the antecedents and the
consequences.
ANTECEDENTS OF CUSTOMER EXPERIENCE

The current research supports the fact that service quality is a key driver of
customer experience. A previous study by Knutson and Beck (2003) claimed
that service quality has a directional relationship to the overall experience.

However, this assumption has not been tested yet. This study is the first
to empirically assess the relationship between perceived service quality and
customer experience. The results show that the hypothesized relationship is
statistically significant.
The notion that advertising is a predictor of customer experience is
not generally supported in this study by the data. This finding is consistent
with Legg and Baker’s (1987) argument that the intangible nature makes it
difficult for customers to understand the service at the pre-purchase stage
and to evaluate the service experience at the post-purchase stage.
Because of the subjective nature of experience, the incorporeal exis-
tence is one of the major problems that face advertising professionals. Using
a physical representation or ancillary physical elements as tangible symbols
of the service product (Mittal, 1999) is claimed to be a solution to that prob-
lem, as it will help in three ways: (a) by creating an identity for the service
firm by consistently showing the same visual images of the tangible ele-
ments, (b) by serving as surrogate cues for quality (e.g., the professional
appearance of employees), and sometimes (c) by promoting an inference of
some specific service attribute.
The result of the test of H3 supports the notion that price perception
has a direct positive effect on customer experience. Previous studies have
asserted that a significant relationship exists between price and perceived
quality (e.g., Rao & Monroe, 1989). This study validates the relationship
between price and customer experience. The inference of experience from
price is ubiquitous; despite the fact that a number of other factors were
introduced in this study, the customer can rely on them to infer his or her
experience.
The direct effect of customer–contact employees on customer expe-
rience appears to make intuitive sense. The results, however, reveal that
employee performance is not a direct antecedent of customer experience.
Nonetheless, partial support for the hypothesized effects of employees on
customer experience is evident through the indirect effect of perceived
service quality. This result is in line with previous studies in marketing (Bitner
et al., 1994; Darden & Babin, 1994), and similarly the findings are consis-
tent with the hospitality literature, which has examined various aspects of
the relationship between employee performance and service quality in the
hospitality industry (Maxwell & Lyle, 2002). This research, however, is the
first to link employee performance to customer experience. Therefore, this
finding emphasizes the need for more research into the effects of employees
on customer experience.
The study finds no support for the hypothesized effects of servicescape
on customer experience. Despite the lack of support for a direct relation-
ship between servicescape and customer experience, an indirect relationship
through perceived service quality is largely supported. As the service quality
literature suggests, physical factors such as noise level, odors, temperature,

and colors may influence perceived service quality (Bitner, 1990). The mar-
keting literature also showed that physical environment affects customers’
perception of the service experience (Baker, Dhruv, & Michael, 1992; Bitner,
1990).
The test of H4 supports the assertion that core service has a direct pos-
itive effect on customer experience and perceived service quality. Core ser-
vices in the resort hotel context include many aspects, such as food (Barsky
& Labagh, 1992), comfortable rooms, safety and security, parking, and other
amenities such as cable TV (Weaver & Oh, 1993). Core services are also con-
sidered to support customer experience (Quan & Wang, 2004). The findings
from the current study show that core service has the highest impact among
other variables on customer experience, therefore the findings are congruent
with Quan and Wang (2004), which illustrates that if the core services are
inadequately delivered, the entire customer experience is most likely to be
unsatisfying.
The findings provide no support for the hypothesized antecedent effect
of pre-consumption mood on customer experience. The results demonstrate
that customer pre-consumption mood may not be particularly effective. This
is a rather surprising result, particularly in light of previous studies (Mano
& Oliver, 1993; Mattila & Wirtz, 2000). A probable explanation is that pre-
consumption mood in this study was measured after the consumption expe-
rience by asking respondents to recall their mood prior to arriving at the re-
sort. As a result, recall bias may have affected the impact of pre-consumption
mood on the entire experience because this mood may have been combined
with other affective responses during the consumption experience. Another
more likely explanation is that the lengthy stay at the resort (over a fort-
night) may have led to a minimal effect of either positive or negative mood
on customer experience.
The findings confirm the importance of word of mouth as a key predictor
of customer experience. Experience is basically intangible and something
A. R. Ismail 193
customers cannot directly predict; therefore, they seek evaluation of the

experience of past customers. This finding emphasizes the important role
word of mouth plays in influencing customer expectations and perceptions
in the information search phase of the buying process.
Research findings have offered robust evidence in this respect, demon-
strating a definite positive relationship between customer experience and
attitudinal brand loyalty. The relationship between customer satisfaction and
brand loyalty is well established in the literature (Bitner & Hubbert, 1994).
However, this is the first empirical study to link customer experience to
brand loyalty. The relationship between perceived service quality and brand
loyalty was validated in numerous previous studies (e.g., Gremler & Brown,
1996). Consistent with prior studies, the findings in the present study support
a positive relationship between perceived service quality and brand loyalty.

The findings answer the question of whether perceived service quality
might in fact mediate the relationships between employee performance, ser-
vicescape, core service, and customer experience. The results demonstrate
that perceived service quality fully mediates the relationship between ser-
vicescape and customer experience. The findings also indicate that perceived
service quality partially mediates the impact of core service on customer
experience. The findings reemphasize the importance of perceived service
quality as a consequence of the servicescape (Bitner, 1990) and core services
provided (Weaver & Oh, 1993). A mediation effect of perceived service qual-
ity on the relationships between employees and customer experience was
not found; instead, an indirect relationship was evident. These findings are
consistent with previous studies that demonstrated that service employees
and their behaviors and attributes affect perceived service quality (Hartline &
Ferrell, 1996). However, this is the first study to link employee performance
to customer experience.
Viewing customer experience as a unidimensional construct is useful.
Customer experience includes educational, novelty, and relational aspects
and sense of beauty in the context of the present research. The study provides
a research model that supports a theoretical model for predicting customer
experience. Price perception, core service, and word of mouth are factors
that influence customer experience directly.
In addition, the higher the degree of perceived service quality, the
greater the customer experience, and, in turn, the more loyal the customer to
the brand. No direct effect toward customer experience was found in terms
of advertising, employee performance, servicescape, or pre-consumption
mood. However, employee performance and servicescape are factors that
showed an indirect effect on customer experience through perceived service
quality. This research has thus answered the original research question of
what are the dimensions of customer experience and which factors influence
Managerial Implications
Knowledge of customer experience and the challenge of creating great cus-
tomer experience are of the utmost importance. Also, factors that contribute
to enhancing customer experience are useful for organizations to under-
stand. The present findings indicate that customer experience has a positive
and significant effect on brand loyalty. This contribution will help brand
managers to understand the important role of customer experience and its
dimensions. Some elements in these factors are under a company’s con-
trol, whereas others are uncontrollable (such as consumer mood or word of
mouth).
Therefore, companies must try to reduce the degree of influence of cer-
tain constructs such as word of mouth that may negatively influence customer
experience by setting up an effective way to deal with customer complaints
and ensuring that their establishments provide high-quality services. In or-
der to provide great customer experience, companies must ensure that they
provide superior service quality to the consumer at reasonable prices and in
a favorable atmosphere.
The results of this study, especially concerning factors discouraging or
encouraging consumers’ experiences, are important and useful to companies
in order to provide service that meets consumers’ experiential needs. Many
marketers acknowledge the importance of customer experience, but they
have very little knowledge of what the components of customer experience
are in the hotel context and what factors affect customer experience. This
finding can be used by brand managers to redirect their planning when
attempting to enhance customer experience by emphasizing the core service
provided to positively influence consumer experience. From a managerial
perspective, managers should focus on basic attributes such as providing
safe food, clean rooms and bathrooms, and efficient leisure service and
entertainment programs, because if the core services are of poor quality,
then the overall experience is likely to be negative (Quan & Wang, 2004).
Hospitality professionals should consider incorporating the measure-
ment of service quality into their quality improvement program in order to
understand customers’ perceptions of actual service delivered and to stay
ahead of customers by anticipating their needs. Managers should develop
a service improvement program that includes training of service personnel
that empowers them to deliver service excellence.
Although advertising may be an important marketing tool for building
strong brands, this study shows that advertising is less useful in relation to
customer experience. For local brands in Egypt to survive managers need to
focus on transformational advertising, on which international hotel brands
rely heavily in their promotional campaigns. This contribution is meaningful
for local brands in developing countries, where famous international brands
such as Hilton and Sheraton are dominant.
A. R. Ismail 195
LIMITATIONS AND FUTURE RESEARCH
This study expands the understanding of the construct of customer expe-

rience, its antecedents, and its consequences. Although the endeavor was
worthwhile, the study has limitations. The netnography study by its nature
was restricted to those customers who posted their reviews online. The study
focused on customer reviews written in English. The study did not consider
those customers who did not post their reviews online.
In addition, some important constructs may have been missing from the
conceptual model, or the model may have included some constructs that
may not have been completely appropriate. Therefore, care should be given
in interpreting these findings.
The focus of this research on the hospitality industry would certainly

limit the generalizability of the findings to industries other than hospitality.
Therefore, replicating and extending this study to other contexts is neces-
sary. Within the quantitative phase, it was decided to conduct the survey on
a sample of British tourists who were visiting the country, and this decision
was made because the British rank among the top tourists visiting Egypt,
after Russians and Germans (State Information Service [SIS], 2007). The con-
sumption behaviors and attitudes of British customers are not generalizable
to the whole population of tourists in Egypt.
Therefore, the findings of this research provide limited understanding
of the customer experience from British customers’ points of view only.
Accordingly, conducting empirical research on different types of tourists
would be useful because the findings may not rigorously generalize to all
other nationalities. These limitations do not minimize the significance of the
findings in this study. However, the study directs the attention of future
research identifying and aiding in further improvements in this area.
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Journal of Relationship Marketing

Experience Marketing: An Empirical

To link to this article: http://dx.doi.org/10.1080/15332667.2011.599703

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Experience Marketing: An Empirical

AHMED RAGEH ISMAIL

Customer experience theory, research, and practice represent an

KEYWORDS brand loyalty, customer experience, experiential

Businesses face the challenge of creating an outstanding customer expe-

contributions from scholars focusing on customer experience were made

FIGURE 1 Conceptual Framework. WOM= word of mouth; H = hypothesis.

Antecedents to Customer Experience in Services

H1 : Perceived service quality has a positive effect on customer

Advertising may be a critical component of the marketing mix for any

creation (Meenaghan, 1995). A certain image of the brand is created, and

poor experience. Therefore, when advertising raises customer expectations,

H2 : Advertising has a significant effect on customer experience during

H3 : Price perception of services has a significant effect on customer

Prior work has highlighted the impact of customer contact employees on

H4a : Employee performance has a significant effect on customer

Atmospherics or servicescape is the area that receives the most research

atmosphere leads to avoidance behavior, such as a desire to leave the store

H5a : Servicescape or setting influences customer experience during ser-

H5c : Perceived service quality mediates the impact of servicescape on

which include virtually everything in the prepaid price—from airport

H6a : Customers’ interpretations of core service influence customer expe-

Because of the experiential nature of services, word-of-mouth commu-

nicated from one person to another.”

H7 : Word of mouth positively influences customer experience during

Mood is a mild, pervasive, and generalized affective state rather than

H8 : Customer pre-consumption mood positively influences customer ex-

Consequences of Customer Experience

ticular brand over time—in other words, repeated purchases of a brand

H9 : Perceived service quality contributes positively to brand loyalty.

analysis and interpretation of qualitative data recommended by Arnould and

Finding of the Netnography Study Regarding the Focal Construct

Another aspect of customer experience in the present study was the

This finding is consistent with previous studies in the marketing litera-

In addition, the qualitative research captured another important com-

While I was staying at Dreams beach I met someone known as Waggy,

Awareness and appreciation of beauty was another aspect that was

TABLE 1 Composite Reliability and Variance Extracted

Sources of Composite Variance

Advertising Holbrook & Batra (1987) and the 0.93 0.76

Parasuraman, Grewal, & Voss (2002);

Context and Sample

a pilot test was undertaken; 77 questionnaires were collected. However, 21

TABLE 2 The Results of the Reliability Test

Advertising AD01 0.913 .891 .934 51

SE02 0.514 .781

TABLE 3 Demographic Profile of British Customers in Main Survey Sample (n = 509)

Measurement Model Evaluation

chi-square was significant, the other values suggested an adequate fit to

to the sample size because chi-square is a major component in this measure.

TABLE 4 Results of the Confirmatory Factor Analysis of the Main Survey

Advertising I reacted favourably to the advertisements. 0.69 .83 24.38 0.94

TABLE 5 Results of Testing the Hypotheses

Hypothesis Path Estimate t Test Result

H1 : Perceived service quality has a positive 0.31 3.92 Accepted

to perceived service quality.

0.78 (14.50) R2 = 0.37 0.37

0.60 (5.86) R2 = 0.60