Journal of Business Economics and Management

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An empirical study to diagnose the outcomes of

customers’ experiences in trendy coffee shops

Halil Nadiri & G. Nazan Gunay

To cite this article: Halil Nadiri & G. Nazan Gunay (2013) An empirical study to diagnose the
outcomes of customers’ experiences in trendy coffee shops, Journal of Business Economics and
Management, 14:1, 22-53, DOI: 10.3846/16111699.2011.631742

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 Journal of Business Economics and Management
ISSN 1611-1699 print / ISSN 2029-4433 online
2013 Volume 14(1): 22–53
doi:10.3846/16111699.2011.631742

AN EMPIRICAL STUDY TO DIAGNOSE THE OUTCOMES

OF CUSTOMERS’ EXPERIENCES IN TRENDY COFFEE SHOPS

Halil Nadi̇ri̇1, G. Nazan Gunay2

1Department of Business Administration, Eastern Mediterranean University,
P.O. Box 95 Gazimağusa, North Cyprus, Via Mersin-10, Turkey
2Faculty of Economics and Administrative Sciences, Department of Business

Administration, Ege University, 35040 Bornova, İzmir, Turkey

E-mails: 1halil.nadiri@emu.edu.tr (corresponding author); 2nazan.gunay@ege.edu.tr
Received 3 February 2011; accepted 10 October 2011

Abstract. The purpose of this study is to analyse the influence of experiential marketing
on young customers’ experiential values and respectively on their satisfaction and word of
mouth and revisit intentions. An instrument was developed to measure how the strategic
experiential module (Schmitt 1999) and service quality perceptions of customers influence
their experiential values. Data were gathered through questionnaires conducted with 450
respondents to diagnose young customers’ experiences in Gloria Jean’s Coffees shops
in North Cyprus. The structural equation modelling through partial least square (PLS)
method results were acceptable in terms of reliability and validity. The empirical results
revealed that, some of the strategic experiential modules and service quality perceptions
have positive influences on customer experiences (functional and emotional). Results also
show that customers’ satisfaction can induce positive post purchase behaviour. The results,
managerial implications, and suggestions for future research are discussed in detail.
Keywords: experiential marketing, service quality, experiential value, future buying in-
tentions, young customers, Gloria Jean’s Coffee.
Reference to this paper should be made as follows: Nadiri, H.; Gunay, G. N. 2013. An
empirical study to diagnose the outcomes of customers’ experiences in trendy coffee
shops, Journal of Business Economics and Management 14(1): 22–53.
JEL classification: M31.

1. Introduction
Globalisation, intense competition, volatile consumer demands and changes both in
economic and political systems force companies to learn faster and adopt themselves
to environmental changes (Ginevičius, Gudačiauskas 2004). Some of the fastest grow-
ing sectors of the global economy are related to the consumption of experiences (Pine,
Gilmore 1999). Today, providing experiences is seen as the way to remain competitive
in markets where global competition and technology have turned products and services
into commodities. Tourism has been at the forefront of staging experience, as Sternberg
(1997: 952–954) succinctly put, “tourism primarily sells a staged experience… tour-

Copyright © 2013 Vilnius Gediminas Technical University (VGTU) Press Technika

http://www.tandfonline.com/TBEM
 Journal of Business Economics and Management, 2013, 14(1): 22–53

ism’s central productive activity is the creation of the touristic experience”. Although
experience is recognised as a major benefit offered by the hospitality and tourism indus-
try, the use of experiential marketing in this industry is not well documented (Yuan, Wu
2008). Thus, this study aims to contribute improving hospitality and tourism operations
by examining experiential marketing at a trendy coffee shop environment. The empirical
research was carried out at one of the leading coffee shop chains, namely Gloria Jean’s
Coffee, in North Cyprus.
Furthermore, this study pays attention to carrying out this empirical research by focus-
ing on young customers defined by Schewe and Meredith (2004) approximately 17–23
years of age.
During this stage of their lives young customers develop a subjective sense of iden-
tity through experimentation and explorations (Arnett 2000). Young customers are also
able to influence the purchase and decision making of others through their increased
independence and consumption sophistication (Loudon, Della Bitta 1993). During their
years in higher education, students will develop many of their opinions and prefer-
ences which they will keep throughout their lives (Jenkinson 2000). The youth market
is described in the literature as ‘the consumer of the future’ (Goldenberg 2005), ‘agents
of change’ (Spero, Stone 2004) and as ‘trend setting loyals’ (Bakewell, Mitchell 2003).
Businesses targeting the youth market need to understand this emerging behaviour to
ensure that they meet the needs of this very discerning and influential group to ensure
long term relationship and loyalty (Jenkinson 2000). Thus, the present study focuses
on young customers such as the university students that come from various countries
to North Cyprus to attend one of the six universities on the island. The economy of the
island is heavily dependent on providing services to university students and businesses
compete to get a larger share of this lucrative market through higher quality and in-
novative services.
Accordingly, the purpose of this study is to analyse the influence of experiential mar-
keting on customers’ value and customers’ experiences and its impact on customers’
satisfaction and post purchase intentions. The study uses the instrument developed by
Schmitt (1999) to measure how strategic experiential module and service quality per-
ceptions of customers influence their experiential values. The study examines customer
value and customer experiences and test strategic experiential module on young cus-
tomers in North Cyprus who visited Gloria Jean’s shops in North Cyprus towns during
the spring of 2009. In addition, the questionnaire included items to measure customers’
service quality perceptions. The quality judgements of customers are most important,
while all other judgements are essentially irrelevant (Parasuraman et al. 1991). As Par-
asuraman et al. (1985) argued, service quality perceptions of customers influence their
overall experiences.
This empirical study is expected to make two important contributions to the marketing
literature. First, the influence of experiential marketing on customer value, customers’
experiential values impact on customers’ satisfaction and post purchase intentions will
be analysed. For this purpose experiential marketing performance was examined by
measuring customers’ perceptions. Fifteen hypotheses were developed to examine the

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 H. Nadi̇ ri̇ , G. N. Gunay. An empirical study to diagnose the outcomes of customers’ experiences ...

relationship and data was analysed using partial least square (PLS) methodology. Sec-
ond, the research will be conducted in an emerging market setting which is a growing
touristic destination with its unique business culture, and idiosyncratic economic and
political conditions. From a practical point of view, the outcomes of this research can be
used by managers to gain an in-depth understanding of customer experiences and of the
relationship among experiential marketing, experiential value, customers’ satisfaction,
word of mouth and revisit intentions. Such an understanding will assist managers for
developing effective marketing strategies that will improve the operational environment
and contribute to improving customers’ perceived experiential value.

2. Literature review
2.1. Experiential marketing
The marketing concept has been a fundamental issue for organizations after Drucker
(1954) stated that marketing is the unique function of business. The core concept of
marketing is the creation of customer value for competitive advantage. The new chal-
lenge for the marketing concept is the development of experiential marketing to create
firm-level competitive advantage. Intense competition around the world has lead com-
panies to not just see the transformation of economic values from goods and services
but, to stage experiences. Pine and Gilmore (1998) provided the fourth economic ben-
efit as experience with the approach of “experience economy”. According to Pine and
Gilmore (1998), leading-edge companies will find that competitive battleground lies in
staging experiences. “An experience occurs when a company intentionally uses services
as the stage, and goods as props, to engage, individual customers in a way that cre-
ates a memorable event” (Pine, Gilmore 1998: 98). Pine and Gilmore (1998: 102–105)
suggested five principles to create memorable experiences: a well-defined theme for
the experience, positive cues for desired impression, elimination of negative cues for
supporting positive cues, memorabilia for commemorating experiences and engaging
all five sense for effective and memorable experiences. In further studies by the same
authors (Pine, Gilmore 2000), companies are recommended to create customer surprise
to uncover the fourth element in the progression of economic value. Gilmore and Pine
(2002) highlighted the importance of experiences, for making marketing superfluous by
creating distinct and unique economic value.
The ultimate aim of experiential marketing is to create memorable events by custom-
izing goods and services to create customer – unique value (Pine, Gilmore 1999: 71).
The “hospitality product” is an amalgam of tangible and intangible products and services
factors. These factors are; “quality of service”, “ambiance”, “atmospherics” and “ser-
vicescape’’ (Pizam 2010: 343). Although there is sufficient empirical evidence to suggest
that these factors are associated with increase guest satisfaction, repeat visitation and
most importantly willingness to pay higher prices, companies try to adopt these factors
to create memorable experiences to satisfy customers, because creating memorable ex-
periences is the essence and raison d’étre of the hospitality industry (Pizam 2010: 343).
The quality of experience is drive for customer satisfaction and willingness to pay high
prices for hospitality products. Thus, the quality of the experience is the moderating

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 Journal of Business Economics and Management, 2013, 14(1): 22–53

or intervening variable between the independent variables of quantity and quality of

tangible and intangible goods and services, and the dependent variables of customer
satisfaction and willingness to pay high prices (Pizam 2010: 343).
Hence, the aim of the hospitality industry is to create memorable events by customizing
goods and services to create unique customer value (Pine, Gilmore 1999), as Yuan and
Wu (2008: 390) pointed out that creating unforgettable experiences is critical to the
success of businesses in the hospitality industry. So, companies must create “quality of
experiences” to drive customer satisfaction and willingness to pay high prices for hos-
pitality ‘‘products’’ (Pizam 2010). “Quality of experience” (Pizam 2010) could explain
“how successful businesses create repeat and loyal customers by providing unforget-
table experiences” (Yuan, Wu 2008: 390).
Pine and Gilmore (1998) described the characteristics of experiences on the basis of
two dimensions. The first dimension is customer participation (active/passive) which
explains customers’ roles in performance that yields the experiences. The second di-
mension is the connection (absorption/immersion) that unites customers with the per-
formance. The experiences are divided into four categories on the basis of these two
dimensions as entertainment, educational, esthetic and escapist experiences. Pine and
Gilmore (1998) suggested that companies should create customer experience places as
real or virtual venues where customers can have their own experiences. Companies are
advised to render the authenticity on their messages to customers and to provide either
real or virtual place to create place making experiences for customers to be perceived
as real (Pine, Gilmore 2008). The types of experiences are identified by Brakus et al.
(2009) as product, shopping and service, consumption and brand experiences. Although
the authors approached that brand, experience affects consumer satisfaction and loy-
alty directly and indirectly through brand personality associations, the same outcomes
could be assumed for each type of experiences. The concept of customer experience
was investigated by scholars to find the ways to create, lead and how to offer a better
understanding of customer experiences in conceptual approaches (Carbone, Haeckel
1994; Berry et al. 2002; Haeckel et al. 2003; Prahalad, Ramaswamy 2003; Crosby,
Johnson 2007; Meyer, Schwager 2007; Pine, Gilmore 2008).

2.2. Customers’ experiential value

Although the terms customer value and experiential value are used interchangeably,
the difference between the two should be considered. Blattberg (1998) pointed out
that customers are the most critical asset for businesses, so businesses should focus
on long-term management of customer value and attract, develop, and maintain their
relationships with their customers. Understanding what factors create customer value
and trying to create a unique and creative customer value are necessary for retention of
each business. Customer value has various definitions; while Monroe (1991) defined it
as the comparison between recognized benefits and sacrifices, some others suggested
that it is a combination of customers’ belief, attitude and experience of product (Strauss,
Frost 2002). What is certain and obvious from those definitions that customer value is
the comparison between benefits and costs while customers are involved in a trade.

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 H. Nadi̇ ri̇ , G. N. Gunay. An empirical study to diagnose the outcomes of customers’ experiences ...

Basically, the aim of experience economy is to create customer value. “The concept
of customer value refers to subjective value perceived after an evaluation process, and
developed by a balance between benefits and sacrifices” (Yuan, Wu 2009: 391). Cus-
tomer value is also defined as a “relativistic preference characterizing a consumer’s
experience of interacting with some objects such as any good, service, thing, place,
event or idea” (Kim 2002: 597). Customer value has two components: (i) emotional
values and (ii) functional values. Functional value refers to financial or mental rewards
that customers gain from products to customers, whereas emotional value refers to the
feeling or emotional reaction that customers gain during and after experiencing (Yuan,
Wu 2008: 392). Financial or mental rewards that customers get form their experience is
functional value which can be measured by investigating factors such as effectiveness,
convenience, shopping desirability and satisfactory price (Mathwick et al. 2001). In
general, functional value can be considered a basic value delivered to customers (Berry
et al. 2002; Schmitt 1999). Does the coffee taste good? Does the hotel provide a clean
room and comfortable bed? Emotional value is the economic value or monetary worth
of feelings when customers positively experience products and services (Barlow, Maul
2000). Customers’ feelings and attitude toward some products, businesses, and brands
constitute the emotional value in which the enjoyment of customers, return, relaxa-
tion, good feeling and satisfaction are the factors which are investigated in this study
to measure emotional value (Sweeney, Soutar 2001). In other words, the feelings and
emotional reactions that customers experience during or after experiences are emotional
value (Berry et al. 2002; Schmitt 1999). In general, emotional value refers to the feeling
or emotional reaction that customers gain during and after experiencing (Berry et al.
2002; Schmitt 1999). For example, does the waiter or server of the restaurant really care
about customers? Does the tour guide have a passion to help people learn something
(Yuan, Wu 2008: 392)?
Experiential value refers to customers’ perceptions of products or services through direct
use or indirect observation (Mathwick et al. 2001). Experiential value is defined as “in-
teractions involving either direct usage or distanced appreciation of goods and services”
and four dimensions of experiential value are offered as “customer return on invest-
ment, service excellence, playfulness and aesthetic appeal” (Mathwick et al. 2001: 41).
Experiential value is important for ensuring customer satisfaction (Cronin et al. 2000;
Ennew, Binks 1999; Kristensen et al. 2000) and offers customers extrinsic and intrinsic
benefits (Batra, Ahtola 1991; Mano, Oliver 1993; Babin, Darden 1995). The intrinsic
benefit is starting and finishing a task or a job, whereas the extrinsic benefit comprises
the pleasure and happiness of completing a process (Babin et al. 1994). Furthermore,
beside intrinsic/extrinsic dimension, Holbrook (1994) added a dimension, active/reac-
tive, to experiential value. The active value comes from the increasing collaboration
between customers and the business; the reactive value derives from customers’ evalu-
ations, responses, and understanding of the services or products they want to purchase.
As Yuan and Wu stated (2008) customer value and experiential value have many simi-
larities. So, both customer and experiential value are accepted as inseparable and in-
tegral parts of the concept of value. Thus, measurement of experiential value used in

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 Journal of Business Economics and Management, 2013, 14(1): 22–53

this study is based on the measurement developed by Yuan and Wu (2008: 392) where
it is conceptualized as “emotional and functional values are the main components of
customer value”.
Experiential marketing has become a contemporary concept used to understand com-
plicated consumers needs and desires. The reason that experiential marketing has been
championed as a new philosophy of marketing is that traditional marketing does not
provide a broad point of view to understand consumers and to create better customer
value any more. The main idea of experiential marketing is that it focuses on consumer
experiences, consumption is treated as a holistic experience, recognises both traditional
and emotional drivers of consumption, and uses eclectic methodologies. Schmitt (1999)
approached experiential marketing based on the five different types of experiences,
called strategic experiential modules that marketers can create to satisfy consumer
needs: SENSE, FEEL, THINK, ACT and RELATE. The five different types of experi-
ences explained as follows (Schmitt 1999: 61–62):
• SENSE marketing appeals to the senses with the objective of creating sensory
experiences, through sight, sound, touch, taste and smell. SENSE marketing may
be used to differentiate companies and products, to motivate customers and to add
value to products (e.g., through aesthetics or excitement). One of the key principles
of SENSE is “cognitive consistency/sensory variety,” i.e., the ideal SENSE ap-
proach provides an underlying concept that is clearly detectable but appears always
fresh and new.
• FEEL marketing appeals to customers’ inner feelings and emotions, with the objec-
tive of creating affective experiences that range from mildly positive moods linked
to a brand (e.g., for a non-involving, nondurable grocery brand or service or in-
dustrial product) to strong emotions of joy and pride (e.g., for a consumer durable,
technology, or social marketing campaign). What is needed for FEEL marketing to
work is a close understanding of what stimuli can trigger certain emotions as well
as the willingness of the consumer to engage in perspective taking and empathy.
Standard emotional advertising lacks both because it does not target feelings during
consumption. It is difficult to create successful FEEL campaigns on an international
scale because both the emotion-inducing stimuli and the willingness to empathize
in a given situation often differ from culture to culture.
• THINK marketing appeals to the intellect with the objective of creating cognitive,
problem-solving experiences that engage customers creatively THINK appeals to
target customers’ convergent and divergent thinking through surprise, intrigue and
provocation. THINK campaigns are common for new technology products. But
THINK marketing is not restricted only to high-tech products. THINK marketing
has also been used in product design, retailing and in communications in many
industries.
• ACT marketing enriches customers’ lives by targeting their physical experiences,
showing them alternative ways of doing things (e.g., in business-to-business and
industrial markets), alternative lifestyles and interactions. Rational approaches to
behaviour change (i.e., theories of reasoned actions) are only one of many behavio-
ral change options. Changes in lifestyles and behaviors are often more motivational,

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 H. Nadi̇ ri̇ , G. N. Gunay. An empirical study to diagnose the outcomes of customers’ experiences ...

inspirational and emotional in nature and often motivated by role models (such as
movie stars or athletes).
• RELATE marketing contains aspects of SENSE, FEEL, THINK and ACT market-
ing. However, RELATE marketing expands beyond the individual’s personal, pri-
vate feelings, thus relating the individual to something outside his/her private state.
RELATE campaigns appeal to the individual’s desire for self-improvement (e.g., a
future “ideal self that he or she wants to relate to”). They appeal to the need to be
perceived positively by individual others (e.g., one’s peers, girl friend, boy friend
or spouse; family and colleagues). They relate the person to a broader social system
(a subculture, a country, etc.).
• Experiential marketing has been studied in many areas such as retailing, branding,
entertainment, online shopping, tourism, hospitality and art (Mathwick et al. 2001;
Petkus 2004; Thompson, Arsel 2004; Bigne et al. 2005; Ho, Li, Su 2006; Tsaur
et al. 2006; Williams 2006; Chang, Chieng 2006; Keng et al. 2007; Kao et al. 2008;
Yuan, Wu 2008; Puccinelli et al. 2009). These studies have attempted to find links
either between experiential marketing and branding or loyalty, or have analysed the
strategic experiential modules in different applications.
In this empirical study, we attempt to build a conceptual model where functional and
emotional values are stimulated by customers’ perception of the strategic experiential
modules (Berry et al. 2002) and by customers’ perception of service quality. The lit-
erature review reveals that environmental factors like music (Hui et al. 1997), colour
(Bellizzi et al. 1983), smell (Spangenberg et al. 1996) and level of crowding (Hui,
Bateson 1991) all have created different customer responses. Thus, ten hypotheses were
developed to test the relationships among experiential marketing (strategic experiential
module) and experiential value.
H1: Sense perception causes positive emotional value.
H2: Sense perception causes positive functional value.
H3: Feel perception causes positive emotional value.
H4: Feel perception causes positive functional value.
H5: Think perception causes positive emotional value.
H6: Think perception causes positive functional value.
H7: Act perception causes positive emotional value.
H8: Act perception causes positive functional value.
H9: Relate perception causes positive emotional value.
H10: Relate perception causes positive functional value.

2.3. Quality and experiential value

Similar to service quality, experience quality is assumed to directly and significantly
influence satisfaction (Caruana et al. 2000; Baker, Crompton 2000) and perceived value
(Petrick, Backman 2002; Zeithaml 1988). The impact of perceived value on overall sat-

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 Journal of Business Economics and Management, 2013, 14(1): 22–53

isfaction has been depicted by many research studies (Woodruff 1997; Grönroos 1997;
Cronin et al. 2000; Petrick, Backman 2002).
Parasuraman et al. (1985: 47) maintained that “perceived service quality is the result
of customer’s comparison of expected service with perceived service”. Although there
are many external and internal factors affecting service quality perception, these factors
can not be generalized to all customers since service quality perception is subjective and
depends on customers’ individual experiences with the service they encounter. Perceived
value is defined as the “consumer’s overall assessment of the utility of a product based
on perceptions of what is received and what is given” (Zeithaml 1988: 14). Perceived
value can not be viewed as a trade-off between quality and price (Sweeney, Soutar
2001), as it is a broader concept and it involves social, emotional, functional, epistemic
and conditional value as dimensions of consumption value (Sheth et al. 1991). The
term perceived is reflected in the experiential view, in which it is believed that value
judgment is dependent upon the consumers’ experience (Nasution, Mavondo 2008). Per-
ceived service quality is influenced by perceived value involving functional and emo-
tional values. Rust et al. (2000) proposed that perceived value is influenced positively
by perceived quality, while Oh (1999) suggested that service quality is an antecedent to
customer value. Imrie et al. (2002) noted that service quality is an important antecedent
of consumer assessments of value. Snoj et al. (2004) argued that perceived quality has a
positive impact on perceived value. In a more recent study Choi et al. (2004) suggested
that perceived service quality has a significant, positive, direct influence on value as-
sessment. Thus, the influence of perceived service quality on functional and emotional
values (experiential value) is tested in this study.
Also, the literature review shows that service quality affects customer value (Fornell
et al. 1996; Cronin et al. 2000; Rust et al. 2000). Service quality is an antecedent to
customer value (Oh 1999; Imrie et al. 2002) and is an important factor in influencing
the value customers place on services (Sweeney et al. 1999). Perceived service quality
has a significant, positive, direct influence value assessmen (Choi et al. 2004). So, two
hypotheses are proposed to test the influence of perceived service quality on experiential
value (functional and emotional).
H11: Service quality causes positive emotional value.
H12: Service quality causes positive functional value.

2.4. Experiential value and customer satisfaction

Literature on customer satisfaction illustrates that “expectations reflect anticipated per-
formance made by customer about the levels of performance during a transaction”
(Churchill, Suprenant 1982). Satisfaction is defined as an emotional post-consumption
response that occurs as a result of comparing expected and actual performance (discon-
firmation). Alternatively, it can be an outcome that occurs without comparing expecta-
tions (Oliver 1996). Moreover, “satisfaction is based on the extent to which customers
perceive the service episode to have met, fallen short, or exceeded their expectations”
(Nicholls et al. 1998). When the performance is less than expected, the organization ex-

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 H. Nadi̇ ri̇ , G. N. Gunay. An empirical study to diagnose the outcomes of customers’ experiences ...

periences harm in its business image. When customers are satisfied, in other words when
the expectations and performance are equivalent, the organization may be performing
well. When customers are delighted, they may become loyal customers, and frequently
become an organization’s best advertising/marketing tool (Nicholls et al. 1998).
Customer satisfaction, furthermore, plays an important role in achieving customer loy-
alty and profitability (Barsky, Nash 2003). Therefore, it is crucial to know exactly how
such satisfaction is measured. Many have been trying to measure customer satisfaction
and have gathered plenty of data as a result. The problem is that measuring customer
satisfaction does not provide any clues for achieving it. Customer satisfaction is es-
sentially the culmination of a series of customer experiences or, one could say, the net
result of the good ones minus the bad ones. It occurs when the gap between customers’
expectations and their subsequent experiences is closed (Meyer, Schwager 2007).
Although relevant literature provides numerous perspectives for examining consumer
value, experiential value and its effect on consumer satisfaction is rarely addressed (Wu,
Liang 2009). Thus, this study follows this precedent by focusing on how experiential
values of young customers affect their level of satisfaction in trendy coffee shops.
Among the few studies that addressed this issue is the study by Lee and Bang (2004)
who proposed with regard to online shopping that consumer online shopping value
(utilitarian and experiential value) positively influences consumer satisfaction. A sec-
ond study by Gallarza and Gil-Saura (2006) proposed that perceived value is a direct
antecedent of consumer satisfaction. Furthermore, Shieh and Cheng (2007) tested a
consumer behavioural model of adolescent and young adult online gamers and proposed
that experiential values positively impact satisfaction. Moreover, Sparks et al. (2007)
found that consumer values positively and significantly correlate with satisfaction with
timeshare product. Wu and Liang (2009) proposed that in luxury-hotel restaurants con-
sumer experiential value positively influences consumer satisfaction.
Additional research findings have supported the relationship between perceived cus-
tomer value and customer satisfaction (Cronin et al. 2000; Ennew, Binks 1999; Fornell
et al. 1996; Kristensen et al. 2000; Patterson, Spreng 1997). Thus, two hypotheses
relating to experiential value and customer satisfaction were developed to test the rela-
tionship between the two.
H13: Emotional value has positive effect on customer satisfaction.
H14: Functional value has positive effect on customer satisfaction.

2.5. Customer satisfaction and post purchase intentions

Related to customer satisfaction, as Parasuraman and Grewal (2000) defined, it is the
evaluation and emotional recognition of whole purchasing processes after acquiring. As
customers perceived that they made a good choice and that the product did satisfy their
needs and wants, with the service that they expected, this will have a positive impact on
their future buying intention. In other words, any dissatisfaction in any of determinants
of customer satisfaction may reduce future buying intention of customers.

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 Journal of Business Economics and Management, 2013, 14(1): 22–53

Additionally, Venetis and Ghauri (2004) suggested that even if customers do not feel
affective commitment, they would still be inclined to stay if their agency produces good
quality work. It is, however, questionable whether the perceived quality as such is a
sufficient motivation to maintain a relationship in the long term. If customers are not
also affectively committed, the relationship will dissolve more easily once problems
occur. Real customer loyalty originates from the part of service quality that contributes
to customers’ affective commitment (Venetis, Ghauri 2004). Foscht et al. (2009) have
addressed the importance of personal interaction between store managers and customers.
They observed that customers are more satisfied when they receive personal attention
and they are more likely to recommend the stores they shop to others. Thus, personal
attention has a positive impact on both customer satisfaction and customer loyalty.
Furthermore, the positive influence on customer satisfaction of interaction between staff
and customers was also indicated by Wu and Liang (2009).
Moreover, McDougall and Levesque (2000) pointed out the importance of perceived
value for loyalty and, in turn, for profitability. It is well understood that increasing
customer loyalty is positively correlated with increasing profitability. McDougall and
Levesque (2000) indicated that the three factors – core service quality, relational service
quality, and perceived value – all have impact on customer satisfaction, which, in turn,
influences loyalty. Additionally, the existence of a quality – value satisfaction – loyalty
chain relationship was confirmed by Gallarza and Gil-Saura (2006). Koening-Lewis and
Palmer (2008) provided more evidence for the links between satisfaction, emotions, and
future behavioural intentions.
The consequences of customer satisfaction in service industries are in the form of inten-
tion to recommend (word of mouth) and intention to repurchase/revisit. The latter leads
to customer loyalty (Host, Knie-Anderson 2004). Thus, the present study considers the
consequences of customer satisfaction as post purchase intention to be word of mouth
and revisit intention.
– Customer satisfaction and word of mouth
Word of mouth (WOM) has attracted a great deal of attention among practitioners.
WOM is one of the aspects of post purchase behavior and occurs as people keep on
sharing their assessment of their experiences (Kim et al. 2009). For example several
books tout WOM as a viable alternative to traditional marketing communication tools.
One calls it “the world’s most effective, yet least understood marketing strategy” (Min-
ser 1999). Marketers are particularly interested in better understanding WOM as tradi-
tional forms of communication appear to be losing effectiveness (Forrester 2005). The
importance of consumer WOM for service firms has been well established (Mangold
et al. 1999). This study, attempts to predict how customers’ service experience influence
their customer satisfaction and consequently their WOM. When a service experience is
particularly enjoyable and/or beneficial, consumers will be motivated to encourage their
friends and family to participate in the behaviour.
Perceived service value affects both customer satisfaction and WOM. As functional
and emotional values directly stimulate customer satisfaction, they may also indirectly

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 H. Nadi̇ ri̇ , G. N. Gunay. An empirical study to diagnose the outcomes of customers’ experiences ...

affect WOM. Babin et al. (2005) have analysed customer satisfaction and WOM as-
sociation from a different perspective that “personal shopping value” and “customer
service value” are two constructs where two explain the key post-consumption outcomes
including customer satisfaction and consumer WOM. The empirical study conducted by
Lee, Yoon and Lee (2007) also supported the impact of perceived value on satisfaction
and recommendations to others. Host and Knie-Anderson (2004) emphasized that price
and service quality affects customer satisfaction and thus customer loyalty and willing-
ness to recommend to other.
WOM communication that relates both to positive and negative evaluations of service
encounters, has been shown to affect other people’s purchase behavior. While positive
WOM communication results from satisfactory service encounters, negative communi-
cation generally follows unsatisfactory encounters (Susskind 2002). Kim et al. (2009)
observed that customer satisfaction and WOM among university student and full-time
employees visiting university dining facilities are very strongly correlated and there is
a positive significant relationship between customer satisfaction and WOM. Ranaweera
and Prabhu (2003) confirmed that customer satisfaction have strong positive association
with positive WOM. Thus, WOM has a positive relationship with customer satisfac-
tion. In the case where customers are pleased by the choice of goods or services, they
will have positive WOM which can have an enormous affect on potential and existing
customers, hence we established another hypothesis to study the relationship between
WOM and customer satisfaction.
H15: Customer satisfaction has positive effect on WOM.
– Customer satisfaction and intention to revisit
Purchase intentions refer to the degree of perceptual conviction of a customer to re-
purchase a particular product (good or service) or to repurchase any product (good or
service) at a particular organization. The implicit assumption made by those who gather
and analyse consumer intentions data is that such data will reflect future sales behav-
iours. Research in social psychology suggests that intentions are the best predictor of
an individual behaviour because they allow each individual to independently incorpo-
rate all relevant factors that may influence the actual behavior. Armstrong et al. (2000)
compared buying intentions with other sales forecasting tools. They found that purchase
intentions represent an accurate measure of future sales and that it provides better fore-
casts than an extrapolation of past sales trends. The benefits of maintaining a base of
long-term customers are widely recognized by marketers. Given that the cost of retain-
ing an existing customer is less expensive than prospecting for a new customer (Spreng
et al. 1995), purchase intention is a very important consideration for all organizations.
Some studies in food and beverage sector indicates that customer satisfaction is an
important predictor of customer intent to return (Qu 1997; Pettijohn et al. 1997; Oh
2000; Weiss et al. 2005). Satisfaction, in turn, has been shown to be a reliable predic-
tor of repurchase/revisit intention (LaBarbera, Mazursky 1983; Bitner 1990; Anderson,
Sullivan 1993; Stevens et al. 1995; Patterson, Spreng 1997; Hui et al. 2007; Jang,
Feng 2007; Kim et al. 2009). Thus, we developed a hypothesis to test the relationship
between customer satisfaction and intention to revisit.

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 Journal of Business Economics and Management, 2013, 14(1): 22–53

H16: Customer satisfaction has positive effect on intention to revisit.

Based on the concepts explained above, experiential marketing stimulates experiential
value and customer satisfaction. Concepts of experiential marketing and experiential
value are further divided into several areas to be effectively measured. Experiential
marketing is measured by sense perception, feel perception, think perception, and ser-
vice quality; experiential value is measured by emotional value and functional value.

3. Research methodology
The present study focuses on university students as young customers and research was
carried out in North Cyprus during the spring of 2009. The economy of the island
is heavily dependent on services, and North Cyprus in particular has a multicultural
consumer market as a result of the large number of students with respect to population
of North Cyprus (around 280,000 inhabitants) who attend the six universities here.
Therefore, the sample of the study consists of university students enrolled in these six
universities. There are around 48,000 students receiving higher education in these uni-
versities. 68% of them are from Turkey, 22% are local students and rest (10%) is from
other countries. Other than national coffee shops, Gloria Jean’s is the only international
coffee shop chain that operates in North Cyprus.
A self-reported questionnaire was developed to test the relationships among the four
main concepts: experiential marketing, experiential value, customer satisfaction and
post purchase behavior.
The questionnaire was developed in both English and Turkish. A pilot study was then
conducted with a sample of 30 respondents. The final questionnaire includes 22 state-
ments (adopted from Parasuraman et al. 1988; Schmitt 1999; Chang, Chieng 2006)
to measure perceptions of young customers about their experiential marketing experi-
ences. Five statements were adopted from Brady and Cronin (2001) to measure service
quality perceptions, and to measure perceptions about experiential values 5 statements
used for emotional values which were adopted from Sweeney and Soutar (2001), and
four statements used for functional values which were adopted from Mathwick et al.
(2001), Sweeney and Soutar (2001). In order to identify satisfaction of respondents three
items are used, based on measures commonly used in satisfaction research, using one
five-point Likert scale and two five-point bipolar adjective scales (adopted from Oliver,
Swan 1989). Revisit  intentions were measured on three five-point bipolar adjective
scales (Fishbein, Ajzen 1975; Oliver, Swan 1989). The WOM intentions (WOM) were
assessed using three items (adopted from Babin et al. 2005). Finally, the questionnaire
also included questions regarding certain demographic characteristics of the respond-
ents (gender, age, nationality and total monthly income of family). Respondents were
asked to use a five-point Likert-type scale (where 5–point scales anchored 1 = “strongly
disagree” and 5  = “strongly agree”) to record their perceptions. The interviews were
conducted by trained interviewers who applied the questionnaire to chosen respondents
within the coffee shops. Questionnaires were distributed at two Gloria Jean’s Coffees

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 H. Nadi̇ ri̇ , G. N. Gunay. An empirical study to diagnose the outcomes of customers’ experiences ...

shops in North Cyprus. Samples were selected on the basis of a non-probability con-
venience sampling technique (Aaker et al. 1995). A total of 485 questionnaires were col-
lected; 35 were partially completed or unusable and excluded from data entry. Thus, 450
questionnaires were used for the data analysis. The usable rate was 92.78 %.
Data analysis was performed by using Partial Least Squares (PLS) and structural equa-
tion modelling (SEM) tool (Smart-PLS 2.0 M3). SEM permits a simultaneous assess-
ment of the structural component (path model) and measurement component (factor
model) in one model. One of the SEM techniques is the PLS, a well-established tech-
nique for estimating path coefficients in structural models and has been widely used in
various research studies (for example, Chin et al. 1996; Wixon, Watson 2001; Ashill
et al. 2005; Zhang 2009). The PLS technique has become increasingly popular in in-
formation systems research, marketing and in management research more generally
in the last decade because of its ability to model latent constructs under conditions of
non-normality and small to medium sample sizes (Chin 1998).
SEM is a multivariate technique combining aspects of multiple regression and factor
analysis to estimate a series of interrelated dependence relationship simultaneously.
This simultaneity is important since the measures often receive their meaning from the
conceptual network within which they are embedded. Actually, this is not the case with
standard path analysis nor with regression analysis, where the measures are first tested
before application to the structural equations (Bagozzi, Yi 1988).

Results
– Respondents’ demographic profile
A demographic breakdown of the sample shows that 64% of the respondents were males
and 36% were females. As for the age distribution, 29.3% respondents fall between the
age group of “17–20”, 52.9% were between “21–24” and 17.7% were above the age of
25. In terms of nationality 63.8% were Turkish, 25.1% were local students, and 11.1%
were from various other countries. The 57.1% of respondents have monthly family
income between “1000–2500” USD, 8.2% have monthly family income less than 1000
USD and 34.6% have monthly family income more than 2500 USD.
– Measurement
In Table 1 the means and standard deviations of the composite measures of the model
constructs are presented. Frequency analysis of the 45 items indicated no problems of
floor or ceiling effects in the measurements. The usable response number (n = 450) also
exceeded the recommended minimum required for model estimation. PLS requires a
minimum sample size (Chin 1998) that equals 10 times the greater of (a) the number
of items comprising the most complex formative construct or (b) the largest number of
predictors leading to an endogenous construct. In this study, the most complex regres-
sion involved six predictors leading to the endogenous construct, experiential value,
thus indicating that the minimum sample requirement for statistical analysis is sixty
usable responses.

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Table 1. Convergent and discriminant validity of the model construct

Factor
Variable                
Loading
Customer Satisfaction              
ic = 0.92 Factor mean score = 3.63 α = 0.86 SD = 0.845 AVE = 0.78
SAT1 0.814
SAT2 0.933
SAT3 0.903

Word of Mouth Communication            

ic = 0.77 Factor mean score = 3.51 α = 0.77 SD = 0.950 AVE = 0.55
WI1 0.875
WI2 0.829
WI3 0.886

Intention to Revisit                
ic = 0.95 Factor mean score = 3.60 α = 0.92 SD = 0.948 AVE = 0.86
I1 0.938
I2 0.943
I3 0.908

Emotional Value                
ic = 0.90 Factor mean score = 3.63 α = 0.86 SD = 0.801 AVE = 0.64
EV1 0.773
EV2 0.823
EV3 0.832
EV4 0.843
EV5 0.738

Functional Value                
ic = 0.89 Factor mean score = 3.03 α = 0.84 SD = 1.033 AVE = 0.68
FV1 0.810
FV2 0.862
FV3 0.822
FV4 0.793

Sense                  
ic = 0.84 Factor mean score = 3.83 α = 0.78 SD = 0.544 AVE = 0.53
SV1 0.665
SV2 0.635
SV3 0.598
SA4 0.634

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End of Table 1

Factor
Variable                
Loading
SS5 0.610
ST6 0.642
STO7 0.608
STO8 0.618

Feel                    
ic = 0.86 Factor mean score = 3.75 α = 0.75 SD = 0.759 AVE = 0.67
F9 0.874
F10 0.854
F11 0.713

Think                  
ic = 0.86 Factor mean score = 2.95 α = 0.78 SD = 0.839 AVE = 0.60
T12 0.722
T13 0.697
T14 0.827
T15 0.852

Act                    
ic = 0.93 Factor mean score = 2.83 α = 0.89 SD = 1.046 AVE = 0.82
A16 0.893
A17 0.922
A18 0.900

Relate                  
ic = 0.88 Factor mean score = 3.20 α = 0.82 SD = 0.893 AVE = 0.65
R19 0.712
R20 0.780
R21 0.863
R22 0.857

Service Quality                
ic = 0.88 Factor mean score = 3.73 α = 0.83 SD = 0.793 AVE = 0.60
SQ1 0.766
SQ2 0.757
SQ3 0.831
SQ4 0.784
SQ5 0.725
Notes: “ic” is international consistency measure; “α” is Cronbach’s alpha; “AVE” is average
variance extracted.

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 Journal of Business Economics and Management, 2013, 14(1): 22–53

In order to have model estimation, usable data has been analyzed by using Partial Least
Square (PLS) methodology (Smart-PLS 2.0 M3). The test of the measurement model
includes the estimation of the internal consistency and the convergent and discriminant
validity of the instrument items. The composite reliability measure of internal consistency
and the Average Variance Extracted (AVE) are two measures used to assess the compos-
ite reliability of a block of indicators measuring the construct. The internal consistency
measure is similar to Cronbach’s alpha as a measure of internal consistency except the
latter presumes, a priori, that each indicator of a construct contributes equally. Cronbach’s
alpha assumes parallel measures, and represents a lower bound of composite reliability
(Chin 1998). The internal consistency measure, which is unaffected by scale length, is
more general than Cronbach’s alpha, but the interpretation of the obtained values is simi-
lar and the guidelines offered by Nunnally (1978) can be adopted. All reliability measures
were above the recommended level of 0.70 (see Table 1), thus indicating adequate in-
ternal consistency (Nunnally 1978). The Average Variance Extracted scores (AVE) were
also above the minimum threshold of 0.5 (Chin 1998) and vary from 0.53 to 0.86.
Convergent validity measures the degree to which items on a scale are in theory linked.
A common rule-of-thumb is a loading greater than 0.7 (Chin 1998). In this case, all
items loaded on their constructs from 0.71 to 0.94 indicating convergent validity.
Adequate discriminant validity was tested by exploring the average variance shared
between a construct and its measures (AVE). Fornell and Larcker (1981) recommended
values higher than 0.50. Measures are also considered to have adequate discriminant
validity if the square root of the average variance extracted for each construct is larger
than the correlation between the construct and any other construct in the model. The pat-
tern supports our scale and all constructs in the estimated model fulfilled this condition
as it may follow from Table 2. Thus, the revised measurement model results provided
support for the reliability, and convergent and discriminant validities of the measures
used in the study.
Partial Least Square (PLS) makes no distributional assumptions in its parameter esti-
mation procedure. Traditional parameter-based techniques for significance testing and
model evaluation are considered to be inappropriate (Chin 1998). Smart PLS provides
the R² for each endogenous construct in the model and the path coefficients. R² (Table 3)
indicate the percentage of a construct’s variance in the model, whilst the path coeffi-
cients indicate the strengths of relationships between constructs. In a manner consistent
with Chin (1998) Bootstrapping (1000 resamples) was applied to produce standard er-
rors and t-statistics. This allowed us to measure the statistical significance of the path
coefficients. The results in Table 3 show that the structural model explains 56.4% of the
variance in the emotional value construct and 29.8% of the variance in the functional
value construct. As it can be seen from results, all strategic experiential modules have
significant positive effect on emotional value other than the “think” module. Thus, H1,
H3, H7 and H9 are supported, while H5 is not. For functional value, while “think”,
“act” and “relate” modules have significant positive effects, on functional value other
modules do not. Thus, H2 and H4 are not supported, while H6, H8 and H10 are con-
firmed. Service quality dimension has a significant positive effect on both emotional
and functional values. So, H11 and H12 are supported.

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38
Table 2. Correlation among construct scores

Customer Word of Intention Emotional Functional Service

Sense Feel Think Act Relate
Satisfaction Mouth Com. to Revisit Value Value Quality
Customer Satisfaction 0.885
Word of mouth 0.719 0.744
Communication
Intention to Revisit 0.748 0.587 0.930
Emotional Value 0.666 0.607 0.639 0803
Functional Value 0.605 0.559 0.510 0.536 0.822
Sense 0.541 0.477 0.479 0.536 0.352 0.627
Feel 0.605 0.479 0.504 0.596 0.380 0.592 0.817
Think 0.317 0.302 0.262 0.325 0.344 0.294 0.349 0.777
Act 0.341 0.264 0.275 0.360 0.358 0.247 0.248 0.460 0.905
Relate 0.505 0.453 0.485 0.589 0.443 0.389 0.459 0.361 0.437 0.805
Service Quality 0.582 0.557 0.547 0.599 0.374 0.527 0.570 0.226 0.212 0.397 0.773
Note: square root of AVE in the diagonal.
H. Nadi̇ ri̇ , G. N. Gunay. An empirical study to diagnose the outcomes of customers’ experiences ...
 Journal of Business Economics and Management, 2013, 14(1): 22–53

Table 3. Structural model results

Proposed Path Observed

Effect on emotional value(R-Square 0.564) Significance
Effect Coefficient T-value
H1. Sense + 0.1336 2.2922 0.02*
H3. Feel + 0.1993 4.0524 0.00*
H5. Think + 0.0076 0.2245 0.82
H7. Act + 0.0859 2.2922 0.02*
H9. Relate + 0.2944 8.107 0.00*
H11. Service quality + 0.2782 6.3695 0.00*
Effect on functional value (R-Square 0.298)
H2. Sense + 0.0756 1.4478 0.15
H4. Feel + 0.0748 1.3506 0.18
H6. Think + 0.1206 2.4266 0.02*
H8. Act + 0.1389 2.871 0.00*
H10. Relate + 0.2159 4.0105 0.00*
H12. Service quality + 0.1492 2.7959 0.01*
Effect on customer satisfaction (R-Square 0.530)
H 13. Emotional value + 0.4793 10.9143 0.00*
H 14. Functional value + 0.3482 8.0158 0.00*
Effect on WOM Com. (R-Square 0.517)
H 15. Customer satisfaction + 0.7193 26.0079 0.00*
Effect on intention to revisit (R-Square 0.559)
H 16. Customer satisfaction + 0.7476 30.7551 0.00*
Note: * p-values < 0.05.

The structural model results also reveal that young customers’ experiential value percep-
tions have a significant positive effect on their level of satisfaction. Thus, H13 and H14
are supported. With regard to the extend to which young customers’ level of satisfaction
is associated with their post purchase behavior, the structural model results demonstrate
a significant positive relationship between customer satisfaction and positive word of
mouth communication and intention to revisit. Therefore, support exists for both H15
and H16. Among the model’s sixteen hypotheses thirteen are supported (Figure 1).

4. Discussion
A structural model was proposed to explore the influence of experiential marketing on
customers’ value and customers’ experiences and its impact on customers’ satisfaction
and post purchase intentions in a coffee chain in North Cyprus.

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 H. Nadi̇ ri̇ , G. N. Gunay. An empirical study to diagnose the outcomes of customers’ experiences ...

Experiential Marketing Experiential Value Post purchase behavior

Sense
perception

H1(+)

H2(+)
Feel Emotional
perception H3(+) value

H4(+) H5(+)
H13(+) (+) word
of mouth
Think H15(+)
perception

H6(+) Customer
H7(+)
satisfaftion

Act
perception H16(+)
H8(+) Intention
H14(+) to revisit
H9(+)

Relate H10(+) Functional

perception value Hypothesis supported
Hypothesis not supported
H11(+)
H12(+)

Sevice
quality

Fig. 1. Structural model

First, all strategic experiential modules are observed to have significant positive effect
on emotional value other than the “think” module. The outcome on think perception is
not consistent with Yuan and Wu (2008). It might be assumed that “think” perception
has no effect on emotional value due to regular visits of customers to Gloria Jean’s.
Therefore, customers might not need to follow communication strategies of the shop
since they visit the shop very often.
Additionally, it might be reason that Gloria Jean’s is the only international coffee chain
in North Cyprus and young customers enjoy being in this coffee as they might see it is a
privilege for them to be customers of the unique international brand name in the island.
Therefore, the coffee shop is very popular against its domestic rivals and activities or
news related to Gloria Jean’s are always a part of communication among the young
customers in North Cyprus. So, the customers do not need to spend special effort to
follow the news and communication materials of the coffee.
With regard to functional value, while “think”, “act” and “relate” modules have sig-
nificant positive effect, others do not have significant effect on functional value. The
results in this study are somewhat consistent with the results of previous studies as far

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 Journal of Business Economics and Management, 2013, 14(1): 22–53

as functional value is concerned. The reason why sense and feel modules do not affect
functional value might be due to the fact that café offers customers such relaxing and
intimate atmosphere, unique decoration, tasteful products that are good value for their
money. Being in a nice environment and being treated well by the staff could be as-
sumed by customers as the benefits of the high price they pay. Also a study that carried
out in North Cyprus find out that especially younger consumers have lower ethnocentric
tendencies and they are ready to pay higher prices for foreign products (Nadiri, Tümer
2010). Gloria Jean’s is the only international coffee chain in North Cyprus and there is
no close international substitute for it, so this might be the reason why customers are
ready to pay higher prices. Thus, it is not possible to generalise these findings, as it
might be unique for North Cyprus.
The outcome of sense perception is consistent with Yuan and Wu (2008), it is not sup-
ported by other researchers (Areni, Kim 1993; Bellizzi et al. 1983). Additionally as
Yuan and Wu (2008) approached for sense perception, repeat customers may not pay
too much attention to the decoration, furniture, music, tastes and freshness of products,
or layout of the store because they are familiar with the establishment. Since the func-
tional value generally explains the value offered by the Gloria Jean’s for the money
customers pay (return on money), sense perception might not affect the functional value
that customers have willingness to pay high prices in return of memorable experiences
(Pizam 2010). The outcome of feel perception is again consistent with Yuan and Wu
(2008). It could be explained that feel perception that does not affect functional value
due to quality of experience customers offered to customers by Gloria Jean’s derives
customer satisfaction and customers are quite happy despite high prices of the coffee
shop (Pizam 2010).
We conclude that strategic experiential modules have partially positive effects on emo-
tional and functional values which influence customer satisfaction. Second, service qual-
ity dimension has a significant positive effect on both the emotional and the functional
values. This result is supported by literature review and empirical studies (Fornell et al.
1996; Cronin et al. 2000; Rust et al. 2000; Oh 1999; Imrie et al. 2002; Sweeney et al.
1999; Choi et al. 2004). The results also reveal that young customers’ experiential value
perceptions have a significant positive effect on their level of satisfaction. This result is
supported by Wu and Liang (2009).
According to a rule of thumb about the strength of correlation coefficient (Hair et al.
2000), both emotional and functional values have strong positive correlations with cus-
tomer satisfaction which confirm the findings of other researchers (Cronin et al. 2000;
Yuan, Wu 2008). This means that Gloria Jean’s can achieve higher customer satisfaction
through by experiential values that it creates by improving its’ experiential marketing
efforts and the service quality perceptions of customers.
The level of satisfaction of the customers positively affects their word of communica-
tion about Gloria Jean’s and the customers’ intentions to revisit the shop. These results
are also consistent with the literature. The correlation results indicate that customer
satisfaction has a strong positive correlation with post purchase behavior of respondents
(Hair et al. 2000). In other words, satisfied customers have higher levels of intention for

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 H. Nadi̇ ri̇ , G. N. Gunay. An empirical study to diagnose the outcomes of customers’ experiences ...

revisiting Gloria Jean’s stores and their satisfaction levels induce them to provide posi-
tive word of mouth communication. These are very important outcomes of experiential
marketing efforts that need to be considered by managers in service industry.
According to the general results provided by the structural model adopted by this study,
strategic experiential module has partially positive effects on both functional and emo-
tional value, while service quality has a significant positive effect on experiential value
(functional and emotional). Consequently, experiential value perceptions of customers
affect positively customers’ satisfaction and post purchase behavior.
The results of hypothesis testing show that several paths of this model were supported.
Sense, feel, act and relate perceptions and service quality affect customer satisfaction by
means of emotional value. Think, act and relate perceptions and service quality affect
customer satisfaction by means of functional value. From another point of view, act and
relate perceptions and service quality affect customer satisfaction through emotional and
functional value. The results also reveal that relate perception and service quality have
stronger affects than others who have effects on experiential values because relate and
service quality have larger coefficients in the model. Another important finding was
customer satisfaction, which, through strategic experiential modules and service quality
by means of experiential value, affects customers’ positive word of mouth and intention
to revisit. Thus, act and relate perceptions and service quality are very important factors
when a company attempts to implement experiential marketing to achieve customer
satisfaction and consequently positive post purchase behavior.

5. Conclusion and implications

The structural model was proposed to explore the influence of experiential marketing
on customers’ experiential values and respectively on their satisfaction and word of
mouth and revisit intentions. Overall, our measurement results were acceptable in terms
of reliability and validity. The PLS analysis provides support for interpretation relative
to other techniques such as correlation and regression, since all of the relationships in
PLS analysis, including those in the measurement model as well as the structural model,
are tested simultaneously.
Results of this study showed that 13 of the 16 hypotheses are supported. The out-
comes of the analyses suggest that experiential marketing efforts of businesses contrib-
ute to have positive customer experiences which could lead to customer satisfaction
and consequently to induce positive post purchase behavior among young customers
since Hypotheses 1, 3, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 and 16 were supported. Thus,
strategic experiential modules and service quality causes customer satisfaction through
experiential value (emotional and functional value) that provided by sense, feel, act,
and relate perceptions and service quality on emotional value, while think, act, and
relate perceptions and service quality on functional value. Overall both emotional and
functional values have positive effect on customer satisfaction and customer satisfac-
tion can induce positive word of mouth communication and intention to revisit among
young customers.

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 Journal of Business Economics and Management, 2013, 14(1): 22–53

This means that managers need to provide customers with relax environment in which
people can enjoy while they are spending part of their day in which they need to be far
from tense and out environment. Pleasure which has been given to customer leads to
revisit and better WOM. In this situation there will be win-win situation in which both
customers will be satisfied and the enterprise will have a strong image in the mind of
customers.
Though customers are willing to pay a lot for having good experiences but one can
that high price may lead to dissatisfaction. This should be a concern for Gloria Jean’s
Coffees. As a result in order to bring both emotional and functional value to customers,
the café should has a pleasurable environment beside its reasonable prices specially for
country like North Cyprus where the main concentration is on students which they are
sensitive on value. This will lead to a higher customer satisfaction and WOM. Con-
sequently customers will become loyal, and café can enjoy from more customers and
cross-selling.
It is noteworthy to remember that, although modern marketing focuses on experiential
part, but the product itself and its quality have an important role in satisfaction. So, the
quality of Gloria Jean’s Coffees products such as its coffees, sandwiches and its con-
fectionary products should have a high quality, since a relax environment with inferior
products is meaningless.
The managers of café have to do their best to understand the needs and want of their
users. Moreover, managers should ensure that personnel are completely oriented regard
to the level of the service that should be performed. Training program is a recommended
way to improve the staff’s qualifications. In addition managers should continuously
monitor the perception of customers regarding their products, and their latest needs
and wants to keep their marketing tools updated. By this way they keep their customers
more satisfied and delighted.
It is certain that Gloria Jean’s as an international brand showed vital effort to create
an appropriate environment for their customers through experiential marketing efforts.
Although both emotional and functional values have positive effect on customer sat-
isfaction, results of this research imply that think perceptions of customers may not
be an important factor to influence customers’ emotional values while sense and feel
perceptions may not be important factors for customers’ functional values. The research
results about Gloria Jean’s might be considered by other researchers as appropriate as
other hospitality operations.
The management of Gloria Jean’s in North Cyprus should consider the strength of the
associations between variables and take necessary actions to build stronger associations
between variables that have significant positive effect on customers’ experiential values.
The Gloria Jean’s coffee is the only international chain that operates in North Cyprus.
The rivals are all national coffee shops. Thus, especially among the university students
this coffee shop is very popular. The customers have positive attitudes towards this cof-
fee shop and a higher tendency to tolerate. In other words, being the only international

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 H. Nadi̇ ri̇ , G. N. Gunay. An empirical study to diagnose the outcomes of customers’ experiences ...

brand should not be misleading to the management and the management should do
their best to improve experiential value of customers that will lead to higher customer
satisfaction and consequently post purchase behavior. The overall results of this study
reveal that consumption is a holistic concept, and that experiential marketing can in-
duce experiential value that has positive effect on customer satisfaction (Fornell et al.
1996; Cronin et al. 2000; Choi et al. 2004), thus, the managers in hospitality should
focus on strategic experiential module and service quality to increase overall customer
satisfaction.
It is apparent that all businesses need to gain and maintain a competitive advantage
if they are to survive in this highly competitive global market. To do so, management
must recognise that experiential marketing is a crucial marketing tool. Managers should
frequently assess their customers’ level of experiences and develop appropriate policies
to meet their customers’ expectations. The assumptions which mangers believed in,
i.e. that their customers are rational and make decisions based on functional product
features are not entirely valid today. Managers should take account of the unique ex-
periences of their customers and implement experiential marketing strategies. From a
practical point of view, the outcomes of this research can be used by managers to gain
in-depth understanding of customer experiences, and develop effective marketing strat-
egies that will improve the operational environment and thus contribute to improving
customers’ perceived experiential value.
This study results support the theory that experiential marketing practices and service
quality lead customer satisfaction through experiential value and customer satisfaction
induce positive post purchase behavior. There is no study exist in the literature that re-
ported the synergistic effects of experiential marketing, experiential value and customer
satisfaction simultaneously contribute to customers’ post purchase behavior. Thus, this
study might act as the basis for further studies regarding strategic experiential modules
and post purchase behaviors. This study also contributes for managers by providing
them a new look at experiential marketing and offering empirical supports to implement
experiential marketing strategies.
Further research could be conducted in different café chains, in the same café chain
in different countries or in different sub-sectors in hospitality. The results should be
compared to gain a general outcome of the model proposed in this study. Also future
research can focus on how experiential values of customers influence customer satisfac-
tion and effect of customer satisfaction on buying intentions of customers.
The generalization of outcomes and conclusions drawn from this study is limited by the
representativeness of the sample where non-probabilistic sampling method and conveni-
ence sampling were used. Data used in this research were collected from two Gloria
Jean’s in North Cyprus and all the respondents were university students. Consequently,
it may be difficult to adopt the findings to other customer segments, industries, or coun-
tries. The proposed structural equation model does not consider the moderating role of
demographic variables which consider being a subject of further studies.

44
 Journal of Business Economics and Management, 2013, 14(1): 22–53

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Appendix
Items from the Questionnaire

Sense
SV1. Gloria Jean’s coffee shops have visually attractive products
(coffees, sandwiches, cookies)
SV2. Materials associated with the service (such as pamphlets/statements, menus)
are visually appealing and attention getting at Gloria Jean’s coffee shops
SV3. The internal and external decoration of Gloria Jean’s coffee shops is attractive
and attention getting
SA4. The auditory (music) system offers relaxing and pleasant atmosphere
SS5. There is a nice and interesting smell with in Gloria Jean’s coffee shops
ST6. The tastes of the products match my expectation
STO7. The products offered for eating are fresh
STO8. Furnitures are clean and comfortable
Feel
F9. I feel myself comfortable and happy at this café
F10. Café has relaxing and intimate atmosphere
F11. I feel during my conversations’ with Gloria Jean’s coffee shops staff, they pay enough
attention to my expectations
Think
T12. These cafés organize different activities that take my attention
T13. There are print and visual channels of communication and Internet connection
within this cafe that makes me to follow up daily developments
T14. I follow the latest news about Gloria Jean’s Coffee shops from their web site
T15. I follow up the news which takes place in media about Gloria Jean’s coffee shops
Act
A16. This coffee shop tries to make me think about lifestyle
A17. This coffee shop tries to remind me of activities I can do
A18. This coffee shop gets me to think about my behavior
Relate
R19. This coffee shop helps me to develop relationship with my social environment
R20. My friends that I share the same social environment prefer this coffee shop,
so this makes me to prefer this coffee shop as well
R21. Be a customer of Gloria Jean’s is one of the activities of social class that I belong to
R22. At Gloria Jean’s I feel myself that I am in the right place that I should be in
Service Quality
SQ1. This café performs the service right the first time
SQ2. I feel safe in my transactions with this café
SQ3. This café provides its service at the time it promises to do so

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End of Appendix
SQ4. Employees of this café insists on to fully understand what I want
SQ5. Employees are neat appearing
Emotional Value
EV1. I enjoy being in this café
EV2. This café makes me to revisit it
EV3. In this café I feel myself relax
EV4. This café makes me feel good
EV5. Being in this café gives me pleasure
Functional Value
FV1. In this café products are reasonably priced
FV2. This café offers value for money (return of my money)
FV3. In this café I receive good product for the price that I pay for
FV4. This café is being economical.
Word of Mouth Communication
WI1. I will say positive things about this café to other people
WI2. I will recommend it to someone who seeks my advice
WI3. I will encourage friends and relatives to visit the café
Satisfaction
SAT1. I am satisfied with my decision to get some products/visit here
SAT2. Taking everything into consideration, how do you feel about this café
SAT3. Taking everything into consideration, how do you feel about this café
Intention To Revisit
I1. In your future decisions would you plan to revisit this café?
I2. In your future decisions would you plan to revisit this café?
I3. In your future decisions would you plan to revisit this café?

Halil NADİRİ. Professor of Marketing in the Department of Business Administration, Eastern Medi-
terranean University, Famagusta, North Cyprus. He has BBA, MBA and PhD in Marketing. He has
authored many articles, book chapters and conference papers about marketing, service quality, cus-
tomer and employee satisfaction. Dr Nadiri has many board memberships and Presidential positions
in different institutes. He is also currently Vice Rector of Eastern Mediterranean University in charge
of Promotion and University Advancement. His current research interests are; service quality and
customer satisfaction, experiential marketing, justice perceptions and related issues.

G. Nazan GÜNAY. Professor of Marketing at Ege University Faculty of Economics and Administra-
tive Sciences, Department of Business Administration. She received PhD degree from UMIST, School
of Management, Manchester, UK. Her research interests are market orientation, consumer behaviour,
experiential marketing.

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