Positioning Strategy Influences Managers' Beliefs about the Impact of Atmospheric Music on Financial Performance
Areni, Charles S., Journal of Hospitality and Tourism Management
Two hundred and twenty-one Australian hotel and pub managers responded to a mail survey containing items concerning (a) the positioning of their establishment in the marketplace, (b) whether they believed that background or atmospheric music influences the financial performance of their establishment, and (c) the method used to supply atmospheric music in their establishment. Results indicated that (a) managers of up-market establishments reported greater acceptance of the idea that atmospheric music influences revenues, gross margins, and profits than did managers of budget establishments, and (b) managers who believed that atmospheric music affects financial performance were more likely to outsource the supply of atmospheric music to a specialist company. These results are discussed in terms of educating the hospitality industry regarding functional benefits of atmospheric music (i.e., increasing table turnover, managing customer waiting time, facilitating customer-staff interaction, increasing gross margins, etc.) that enhance the "bottom line" performance of an establishment, regardless of its image or positioning strategy.
When you turn the lights off, we like to think you can't tell the difference between an Econo Lodge and a Hilton (Ben Douglas, President, Econo Lodge).
But, of course, when you turn the lights on there are considerable differences in the atmosphere of a budget Econo Lodge hotel compared to an up-market Hilton hotel. Bitner (1992) originally noted that commercial environments, "... can serve as a differentiator in signalling the intended target market, positioning the organization, and conveying distinctiveness from competitors," but also that they, "... can assume a facilitator role by either aiding or hindering the ability of customers and employees to carry out their respective activities" (p. 67). Yet, despite a plethora of research demonstrating that atmospheric variables such as lighting, colours, aromas, and especially background music, have numerous functional effects on customers and employees (Turley & Milliman, 2000), managers still seem to view atmosphere mainly in terms of creating the right image. For companies competing at the lower end of the market, atmosphere is often seen as irrelevant, as captured by one of the respondents interviewed by Areni (2001a): "People don't come here for the music, they come for the food" (Anonymous Hotel Manager).
The problem with this simplistic view is that, while it recognises Bitner's notion that atmospheric variables are related to the image and positioning of an establishment, it ignores research demonstrating that atmospheric variables have several functional effects on customers and employees that directly affect profits and gross margins (Kurtz & Clow, 1998). Studies examining the effects of atmospheric music are particularly numerous in this regard (Areni, 2001a; North & Hargreaves, 1997).
As shown in Table 1a and 1b, previous research has manipulated various aspects of atmospheric music (i.e., volume, tempo, key, texture, format, familiarity, likeableness, arousal, and complexity) and found that it affects image-oriented variables such as (a) the overall evaluation of an establishment (Hui, Dube, & Chebat, 1997; Mattila & Wirtz, 2001; Sweeney & Wyber, 2002), (b) specific perceptions of an establishment (North & Hargreaves, 1998; Yalch & Spangenberg, 1993), (c) preferences for the music (Kellaris & Kent, 1992, 1994; North & Hargreaves, 1996; Yalch & Spangenberg, 1990), and (d) perceptions of the music (Kellaris & Kent, 1994).
However, research has also shown that atmospheric music can provide several functional benefits, including: (e) increasing sales and gross margins (Areni & Kim, 1993; Herrington & Capella, 1996; Mattila & Wirtz, 2001; Milliman 1982, 1986; North, Hargreaves, & McKendrick, 1997; Yalch & Spangenberg, 1993), (f) increasing the amount of time customers spend shopping or waiting (Herrington & Capella, 1996; Milliman, 1982, 1986; North & Hargreaves, 1999; Yalch & Spangenberg 1993, 2000), (g) decreasing customers estimates of how long they have been shopping or waiting (Chebat, Gelinas-Chebat, & Filiatrault, 1993; Kellaris & Kent, 1992; North, Hargreaves & Heath, 1998; Yalch & Spangenberg, 2000), (h) influencing dining speed (and hence table turnover) (Roballey et al. …