Impact of Service Encounter Elements on Experiential Value and Customer Loyalty: An Empirical Investigation in the Coffee Shop Context

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.