International Journal of Innovative Technology and Exploring Engineering (IJITEE)

ISSN: 2278-3075, Volume-8, Issue-11S2, September 2019

The Effects of Services Marketing Mix

Elements on Brand Equity and Customer
Response of Tourists Hotels in the East Coast of
Sri Lanka
Mohamed Ismail Mujahid Hilal

Abstract— The purpose of the study was to examine the effect marketing communication of hotels. This is because of the
of the elements of extended service marketing mix of the east fact that marketing mix positively influences on the brand
coast hotels in Sri Lanka on the creation of the brand equity and equity (Abril and Canovas, 2016).
how that brand equity plays a mediating role in customers’
Brand equity is “the differential effect that brand
response. The study was quantitative in nature. Survey
methodology was adopted. 163 tourists arriving in Sri Lanka knowledge has on consumer response to the marketing that
who stayed in the hotels in the East Coast of Sri Lanka were brand” (Keller, 2013). Brand knowledge consists of brand
surveyed. The questionnaire was used to collect the data. Smart awareness and brand image (Erdem et al., 2006). Brand
PLS 3 was used to analyze the data. Findings suggest that knowledge always impacts on the consumer purchase
people, process, physical evidence and marketing communication intention which is customers’ response (Erdem et al., 2006).
elements have an effect on the brand equity and in turn positively
The marketing mix elements positively influence on the
influence the customer response towards the hotel. Findings also
suggest that brand equity of these hotels is partially mediating brand equity (Aghaei et al., 2013). This means that when a
between extended marketing mix elements and customer brand of hotels has a higher level of equity, brand awareness
response to the hotels. However, marketing communication is for the particular hotel brand is recalled and recognized
not significantly contributing to brand equity. Hoteliers in the (Huang and Sarigollu, 2012). Brand image is another
region can focus on the people, process and physical evidence to important component of brand equity. In the case of the
improve their hotel performance as it also contributes to the
hotel industry, functional attributes of the hotels are
customer responses towards hotels.
associated with the brand image (Horng et al., 2012). Many
Keywords: Service marketing mix, people, process, physical studies find that brand image positively exerts an influence
evidence, brand equity, customer response on the customers' attitude of paying higher prices for brands
(Keller, 1993; Cretu & Brodie, 2007). The brand image
I. INTRODUCTION created also improves brand equity for any brands that are
marketed (Yoo et al., 2000). When there are increased
The tourism sector in Sri Lanka is growing dramatically
brand awareness and brand image, customers are with
contributing to the Sri Lankan economy in terms of Gross
commitment directed towards customer response which is
Domestic Production and employment. While the tourism
sector is growing, there is a necessity of examining the purchase intention (Erdem et al., 2006).
In the hotel industry in Sri Lanka, brand equity generated
impact of service marketing mix elements on brand equity
from the elements of the marketing mix is expected to create
and how that brand equity leads to customer response in the
customer response in terms of purchase intention and
hotel industry. Sri Lanka received over 2.3 million arrivals
creating word of mouth. Liu et al., (2017) indicate that the
in 2018. This was a 10 percent increase compared to the
customer based brand equity of the luxury hotels causes the
year 2017. In the case foreign exchange earnings, Sri
brand equity, in turn, generate brand attitude and create
Lanka's earnings increased by 18.5 percent in 2016. The
employment generated in the sector irrespective of direct purchase intention. In addition, Seo and Park (2018) find
that social media marketing communication is also
and indirect increased by 5.1 percent in the year 2016
influencing on the customers' response in the airline industry
(Annual Statistical Report – 2016).
Marketing mix strategies are playing a pivotal role in mediating through brand equity. This study also finds that
there is a positive relationship between brand equity and
achieving market share and in enhancing business
customer response by way of creating word of mouth and
performance. Although studies reveal that there are seven
Ps in the marketing mix of service organizations, the customers' commitment. When looking at the contribution
to the economy of the country, there is an opportunity for
extended marketing mix such as people, process and
the destination marketing organizations to improve further
physical evidence (Wirtz and Lovelock, 2016) along with
marketing communication of the hotel industry are the key the tourism products in terms of marketing. Sri Lanka
tourism is growing progressively with the huge assistance of
components of the service marketing mix. Hence, this study
the government of Sri Lanka. Destination marketing
focus on these extended marketing mixes along with
organizations need to focus on the branding strategies to
promote an attraction as a tourist destination. According to
Revised Manuscript Received on September 10, 2019.
Mohamed Ismail Mujahid Hilal(PhD), Senior Lecturer in Marketing
Management, Faculty of Management and Commerce, South Eastern
University of Sri Lanka, Oluvil, Sri Lanka
(E-mail: mujahidh@seu.ac.lk)

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DOI: 10.35940/ijitee.K1039.09811S219 249 & Sciences Publication
 The Effects of Services Marketing Mix Elements on Brand Equity and Customer Response of Tourists Hotels in the
East Coast of Sri Lanka

the tourism strategic plan 2017-2020 of Sri Lanka tourist al., 2016). Findings of a study conducted on the effects of
board, Sri Lanka is working on the tourism destination service experience on customer responses to a hotel chain
planning and to make them sustainable through facilitating (Bravo et al., 2019) indicate that service perception
the destination management. Destination management can regulates customer satisfaction by the feelings given by the
only possible when evaluating the services of the customers towards hotels. This also affects the customer
organizations and services elements need to be modified attitudes towards hotel brands and that influence on the
accordingly. customer intention to revisit to the hotels (Bravo et al.,
After the prolonged war, the tourism is picking up in the 2019).
North East part of the country considerably. Many hotels Employees of the service organization may further
are operating here on the East coast of Sri Lanka with the influence the customers' response by the emotions that they
objective of maximizing the profits and the performance. display to the customers. Particularly, the front line
The marketing mix elements could be combined together to employees’ attribution may induce the positive behavioral
create effective marketing for a firm (Aghaei et al., 2013). response of the customers that are buying intention
As far as service marketing mix is concerned of the hotels in (Albrecht et al., 2016). It is also found that language spoken
the East Coast of Sri Lanka, studies are lacking in the areas by the employees during the customer interaction at the
of the extended services marketing mix, brand equity and its service place impact positively on the interaction quality and
impact on the responses of the customers. Therefore, the subsequently, contribute to the service quality. This, in turn,
research questions are whether the elements of the service have an impact on the customer response in terms of
marketing mix lead to the brand equity and that influences generating word of mouth and creating customer loyalty
on the customer response? What is the relationship between (Zolfagharian et al., 2018).
extended marketing mix of hotels in the East Coast of Sri
Lanka and customer response? What is the role played by III. PEOPLE ELEMENTS (EMPLOYEES)
brand equity in creating customer response? Internal marketing is crucial for service firms particularly
In order to address the research questions, the following for firms involved in tourism and hospitality businesses.
objectives are formulated. The major objective of the study Internal marketing is also contributing more to the people
was to examine the effect of the elements of the extended element of the extended marketing mix of service.
service marketing mix in the east coast hotels on the Employees working at the hotel are imperative for business
creation of brand equity. The specific objectives were to success. Customers measure the employees’ performance
explore the relationship between the elements of the service and determine the quality of service offered by tourists’
marketing mix with customers’ response and to evaluate the hotels. Internal marketing contributes to the creation of a
mediating effect of the brand equity elements of the east long term relationship with customers (Caruana and Calleya,
coast hotels such as brand awareness and brand image on 1998). Although the people element of the extended
the customers’ response. Final objective was to suggest marketing mix covers employees’ selection, training and
strategies to improve the service marketing mix for hotels in motivation of them, this study attempts to get the perception
the East Coast of Sri Lanka. of customers about employees who work in the hotels who
respond to the customers in relation to the services.
II. REVIEW OF LITERATURES AND Employees are also playing a pivotal role in the hospitality
HYPOTHESES DEVELOPMENT industry owing to the intangibility and inseparability nature
Employees' skills are also key for creating brand equity of service business (Papasolomou and Vrontis, 2006).
and to influence on the purchase intention of customers. People element of the extended marketing mix is essential as
Here, employees’ skills means customer service skills this strong impact on the service quality (Lovelock, 2016).
including building up reputation to the organization among Further, employees’ aspects of internal marketing are also
people by way of effectively serving to the customers, contributing to both service quality and new service
creating the culture of customer service within the performance (Hernandez and Miranda, 2011). This also
organization and technical and functional satisfaction of implies that internal marketing will have an impact on the
customers. This influences on the customer loyalty which is customer response as service performance will also be
part of customer-based brand equity (Abu-ELSamen et al., enhanced and that influence on service quality. Internal
2011). As the employees are considered as the major part of marketing is the prime injector for achieving the right
the people elements of the extended marketing mix, behavior of employees thereby enable corporate branding
employees’ commitment is also one of the important (Papasolomou and Vrontis, 2006).
components that influence the customer responses. This According to a research (Yang and Coates, 2010)
infers about customers’ willingness to make the payment, explains that employees should be competent enough to
their faithfulness, advocacy and altruism (Jones et al., 2010). serve the customers which means that employees are likely
Further, in the case of marketing communication, online to have knowledge and skills including both professional
reviews through social media also make an impact on and managerial skills. When employees are with those
consumer responses. This happens when managers actively skills, the reliability of service will be stretched.
engage in monitoring online reviews and take corrective
actions instantly. This paves the way for managers to
communicate with potential customers and it shows that
managers are on the side of the customers. This helps
customers to act towards the service organizations (Xie et

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DOI: 10.35940/ijitee.K1039.09811S219 250 & Sciences Publication
 International Journal of Innovative Technology and Exploring Engineering (IJITEE)
ISSN: 2278-3075, Volume-8, Issue-11S2, September 2019

Service quality should be enhanced as it has a powerful blended with effective communication that may improve
influence on customer loyalty (Wong and Sohal, 2003). customer satisfaction (Ramanathan et al., 2017).
Reliability is one of the important aspects of service In a service organization, implementation of the service
marketing influencing more on the purchase intention of the recovery system is also vital. A service recovery system
customers (Choudhury, 2013). It was also emphasized that should include skills of employees and their autonomous
when service quality is good at the service organizations and functions in the firm, the way of identifying the root cause
customer satisfaction will enable customers to recommend of the problem and how far the solution matches with
to others and that will further increase the purchase intention customer needs (Contiero et al., 2016). However, a service
and loyalty (Sivadas and Prewitt, 2000). Moreover, it is to system with excellent quality may have an impact on the
witness that people element of the extended marketing mix service experience of the customers and in turn on brand
will lead to the brand equity of the hotel with help of loyalty equity and customer response. This may be a result of
created and it may associate with customer response. It is quality environment established in the organizations. This
also understood that the brand equity is different for service further positively affect the employees enabling them to
and product. In a service setting, consumers create brand work (Smith et al., 2017). Customers are playing an
equity during their experience with service employees and important role in shaping the experience and creating core
self-service technology (Kimpakorn and Tocquer, 2010). value for the service (Andreassen et al., 2016).
Therefore, the researcher proposes the following Service environment is very much essential to create
hypotheses; brand equity. This is due to the fact that pleasant service
H1: People element of the hotels on the east coast of Sri process with attractions in the store environment will lead to
Lanka contributes to brand equity of the hotel brands impulse buying (Mattila and Wirtz, 2008). Service
H1a: People element of the hotels on the east coast of Sri environment should match with customer expectations.
Lanka positively affect the customers' response Hence, it is necessary to focus on the factors causing
pleasure to the customers. This may be an outcome of the
III. PROCESS ELEMENT effect of arousal due to the service environment which is
Service process and its design are vital for service excited. Thus, a service environment should have valence
organizations. Service design builds up the brand image for by which customers react towards the service organization
organizations and consequently, it results in value addition (Wirtz et al., 2007). Employees’ interaction with customers
and improves the quality of service (Larsen et al., 2007). in the service environment will also contribute to the image
Managing waiting time for a service of any nature needs to of the organizations as a component of brand equity (Hu and
be carefully looked at in order to make the service efficient. Jasper, 2006). Service process mainly focuses on the
Hence, managers should know about the service time taken service process design and the environment in which service
for a customer. In the event of failing to understand the is taking place. When the customers are looking at the
waiting time of the service process, managers may lose the service process as attraction and create pleasant behavior for
benefits of innovative technology. Hence, it was found that them, which will have an impact on the organization brand
designing the service flexibly is effective when having high equity and in turn, will influence on the customer response.
demands (Sheu et al., 2003). Service design should be Thus, the researcher hypothesizes the following hypotheses.
implemented along with the overall strategy of the H2: Process element of the hotels on the east coast of Sri
organizations. When the service design is not matched with Lanka contributes to the brand equity of hotels' brand.
the overall strategy, it may be difficult for the service H2a: Process element of the hotels on the east coast of Sri
organizations to provide customer satisfaction to the Lanka positively affect the customers' response
customers (Mager, 2004). Therefore, it negatively affects
the customer response. This is due to the fact that success of IV. PHYSICAL EVIDENCE
the service organization lies on the adoption of market According to Bitner (1992), the physical environment of
orientation, having effective service design and service will have an impact on the customers' response.
implementing a good service climate (Kostopoulos et al., Bitner (1992) explained that the physical environment of the
2012). For service design to be effective, managers give service comprises ambient condition, space/functions and
priority for service blueprinting. However, it may not be signs and symbols of the organization. Ambient condition
effective until the employees in the organization follow and covers the temperature of the environment, air quality,
implement it (Bitner et al., 2012). noise, music, and odor. Space and function include the
Berman and Evans (2012) point out that designing factors layout of the organization, equipment used and furnishing of
such as the location of the business, style of selling, way of the service place. Signs, symbols, and artifacts include
merchandising, parking and entertainment at the business signage, personal artifacts, and style of decor, etc. Service
organizations make the organization attractive to customers. environment along with all physical evidence is important
Customer should have excellent service experience in the for the service organizations to provide customers a good
service settings. If not, just an entertainment along with quality of service and it may create brand equity and
appealing exterior will not cause customer loyalty (Beltagui customer response. Physical environment has also an
and Candi, 2018). In contrast, when the designing is impact on the satisfaction of customers (Ali et al., 2013).
effective and customers are attracted then it creates brand
equity and may positively impact on the customer response.
Therefore, service operation should be designed in a way
that satisfies the customers and service operation could be

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DOI: 10.35940/ijitee.K1039.09811S219 251 & Sciences Publication
 The Effects of Services Marketing Mix Elements on Brand Equity and Customer Response of Tourists Hotels in the
East Coast of Sri Lanka

Customers integrate many aspects such as service delivery, generating e word of mouth. In order to share photos,
service product, and service environment in order to Instagram need to be used. YouTube is relevant for tour and
determine the service quality (Rauch et al., 2015). Physical guide operators (Moro and Rita, 2018). The literature
environment characteristics such as color, scene, music, and discussed above confirms that marketing communication
layout of the service organization are important evidence for through social media influences on brand equity. When a
the customers to choose the service providers (Oh et al., brand or organization is with brand equity, it positively
2008). Further, Mahmood and Khan (2014) find that service affects customer responses. This is also confirmed that
organizations differentiate themselves from competitors and customer-based brand equity elements such as brand loyalty,
influence on the customer in selecting service organizations brand image, perceived quality, and brand awareness
by using physical evidence. This was also confirmed that positively contribute to the purchase intention (Liu et al.,
the service environment is one of the important factor 2017). In addition, brand awareness, brand image, and
influencing on the purchasing decisions (Hanaysha, 2018). perceived quality lead to brand loyalty and that in turn,
Moreover, the service environment is also affecting impulse positively affect brand choice intention (Lu et al., 2015).
buying. Of all elements of the service environment, the Therefore, the researcher hypothesizes the followings;
layout is with the highest effect on impulse buying (Mohan H4: Marketing communication of the hotels on the east
et al., 2013). The environment should be able to cause coast of Sri Lanka contributes to the brand equity of the
customers to engage in and induce customers to interact hotels brand.
with brands (Sachdeva and Goel, 2015). H4a: Marketing communication of the hotels on the east
The discussion of literature points out that physical coast of Sri Lanka positively affect the customers' response.
evidence comprising ambient conditions of the service Above discussion with literature supports delineate that
organizations, space, and function of the organizations, extended service marketing mix is positively contributing to
signs, symbols of the organizations, good interaction with the brand equity of the hotels and to the customer response
customers motivate customers to do impulse buying and towards hotels in the East Coast of Sri Lanka. Brand equity
likely to create brand equity. Mukherjee and Shivani (2016) is really leading to the customer response by way of keeping
proved that the physical evidence positively contributes to brand awareness, brand image, brand loyalty and perceived
the brand equity. This created brand equity, in turn, quality of the service product. Empirical evidence has also
influence on the purchase intention of the customers. been provided by Buil et al., (2013) to support the following
Therefore, researcher proposes the following hypotheses; hypothesis. Thus, the researcher hypothesizes that
H3: Physical evidences of the hotels on the east coast of H5: Brand equity created from the extended marketing
Sri Lanka contributes to the brand equity of the hotels brand. mix positively related to the customer
H3a: Physical evidence of the hotels on the east coast of response of tourists hotel in the East Coast of Sri Lanka
Sri Lanka positively affect the customers' response. Based on the above discussion of literature, the following
conceptual model has been created.
V. MARKETING COMMUNICATION
Marketing communication plays a major role in creating
brand equity and in turn influence the customer responses.
Marketing communication consists of advertising, public
relation, personal selling, and sales promotion. Although
marketing communication includes all these elements, social
media currently gives positive outcome for many
organizations and it is one of the success factors for many
organizations. Particularly, tourists’ hotels all over the
world practice social media to promote its services to the
tourists. Therefore, under the marketing communication,
social media and its impact on brand equity and purchase
intention is discussed. Leung et al., (2013) and Sigala
(2011) indicate that the following benefits hotels can get
from social media. Social media help understand customers Figure 1: Conceptual Model
by visiting their profile. It also helps fortify the attempts in
marketing and its effectiveness. Social media also helps VI. METHODOLOGY
monitor and control organization image and stimulate In order to examine the impact of extended marketing
demand. Social media is influencing on brand equity mix elements of hotels in the East Coast of Sri Lanka, the
positively by influencing on brand awareness and brand researcher conducted a study during the July 2018 to April
image (Schivinski and Dabrowski, 2015). Social media 2019 in the areas of tourism attractions in three districts
influence on brand image to the larger extent (Bruhn et al., Ampara, Batticaloa and Trincomalee. The philosophy of the
2012). Further, a study also confirmed that social media research was positivism since it involved with the testing of
communication significantly influences on brand awareness hypotheses with the empirical method. The approach of the
and which affects brand image, brand quality and generating
e WOM (Stojanovic et al., 2018). Tourism marketing
organizations need to use social media differently according
to the requirements of the tourists. Twitter can be used for

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DOI: 10.35940/ijitee.K1039.09811S219 252 & Sciences Publication
 International Journal of Innovative Technology and Exploring Engineering (IJITEE)
ISSN: 2278-3075, Volume-8, Issue-11S2, September 2019

research is deductive because the study is related to testing a in Ampara, 58 from Trincomalee and 74 from Batticaloa
theory developed through conceptual framework supported district.
with previous literature. The research strategy is survey
methodology and time horizon was cross-sectional. VII. RESULTS AND FINDINGS
Survey Instrument Before explaining the statistical analysis, it is important to
state the characteristics of the respondents. In the total
The questionnaire for this study has been developed based
respondents, 66 percent was male and 34 percent was
on previous researchers. All statements in the questionnaire
were measured with seven points Likert scale ranging from female. In the case age distribution of the respondents, 11
strongly disagree to strongly agree. Statements for people percent and 22 percent fall in the category of 16 – 22 and 23
element were adapted from previous authors. This is shown – 34 years of age respectively. The other 36 percent and 31
percent belong to 35 – 55 and greater than 55 years of age
in Table 1.
respectively. While asking about the purpose of visiting a
Table 1 Items Adaptations
place, 15 percent of respondents said that they visited for an
Variables No. of Adopted from
official purpose which include meetings and conferences
Items
People element 7 Sum and Hui (2009) and businesses. The other 85 percent of the respondents
visited for tourism.
Process element 6 Wirtz and Lovelock
(2016) VIII. RELIABILITY ANALYSIS
Physical evidence 7 Berman and Evans The structural model for this study needs to be validated
(2001) before obtaining the findings. Cronbatch’s Alpha value for
all variables is more than 0.7 which means that there is
Marketing 7 Llodra-Riera et al. internal consistency exist within the variables.
communication (2015) As per the requirement for structural equation modeling
Magi, (2003), in SmartPLS3, composite reliability should be more than 0.7
Tsiros et al., (2004)
(Hair et al., 2013). In this study, the composite reliability is
Bruhn et al., (2012)
more than 0.7 and therefore, it is reckoned to be reliable. It
is also confirmed that convergent validity exists as the
Brand equity 6 Yoo and Donthu
(2001) average variance extracted is more 0.50. This is shown in
Table 2.
Customer response 6 Ali et al., (2016) Table 2 Construct Validity and Reliability
Bravo et al., (2019)
Sample Selection and Data Collection

As this study needs to explore the impact on the brand

equity and customer response, tourists staying in the hotels
in the Ampara, Batticaloa, and Trincomalee areas were the
appropriate respondents for this study. These areas were
selected because improvements in the areas of extended
marketing mix elements may be required for these hotels as
the areas were affected during the prolonged war in the
country. Further, important tourist attraction such as
Koneshwaran Temple, clear beach, sea surfing, Pasikudah,
Nilavali Beach and Arugamba, etc. are situated in these Having confirmed the convergent validity, it is essential
areas. The researcher visited most of the tourist attractions to evaluate the model based on Fornel and Larcker criterion
in three districts during the day time in order to collect the in order to confirm the discriminant validity. Table 3
data. Although respondents were hesitant to provide provides the details of Fornel and Larcker criterion. The
information to fill the questionnaires, the researcher was coefficients are not more than the square root of the average
able to manage receiving information required for the variances extracted.
questionnaire. Convenience sampling technique was
adopted as the researcher had to meet tourists who were
staying in these hotels in three districts mentioned above. In
addition, the researcher was able to meet a few tourists
inside the hotel premises too. It is also important to point
out at this juncture that the researcher asked a question to
the respondent before filling questionnaire whether the
tourist was staying at the hotel in the area. If yes, tourists
were allowed to fill the questionnaire. The researcher was
able to get 182 filled questionnaires and ultimately the
researcher received 163 duly filled questionnaires. Of the
total sample, 31 questionnaires were collected from a tourist

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 The Effects of Services Marketing Mix Elements on Brand Equity and Customer Response of Tourists Hotels in the
East Coast of Sri Lanka

Table 3 Fornel and Larcker Criterion In the case of the effect size of exogenous latent variables
BE CR MC onPPthe R2PEvalues PS of the endogenous latent variable,
Brand equity 0.911 according to the Model 1 of Table 5 people elements,
physical evidence and process have a significant effect on
Customer Response 0.673 0.770
the R2 value of model 1. It is also found that marketing
Marketing communication 0.756 0.580 0.802 communication is insignificantly contributing to the R2
People 0.788 0.484 0.638 0.753of model 1. Q2 is 0.651 which is also greater than
value
Physical evidences 0.842 0.477 0.893 zero and therefore
0.749 0.811 it can be concluded that model accuracy
Process 0.671 0.329 0.725 can be accepted.
0.327 0.636 0.821
Model 2 of Table 5 explains the direct effect of extended
marketing mix on customer response. As in the Model 1,
Therefore, it can be concluded that the model does not
except marketing communication all other variables such as
provide evidence of a lack of discriminant validity. Further,
people, physical evidence, process positively influence on
the cross-loadings in Table 7 gives evidence of discriminant
the customer response towards hotels (All ps <0.05, t >
validity. Factorial loadings of the observed variables are
1.96). Further, 44.9% of the variation in the customer
greater than the other. This infers discriminant validity
response is explained by the extended marketing mix of the
exists in the model.
hotels in the East Coast of Sri Lanka. Q2 is 0.202 which is
also greater than zero and it can be confirmed that the
IX. PATH COEFFICIENT ANALYSIS AND
accuracy of the model can be accepted. Therefore, H1a, H2a,
HYPOTHESES TESTING & RESULTS
and H3a are well supported. However, marketing
Table 5 gives the model of the direct effect of the communication is with negative path coefficient and hence,
extended marketing mix on brand equity and customer there is no evidence to support the hypothesis H4a.
response. According to model 1, all three variables such as It is also important to test the mediation effect of brand
people, physical evidence and process positively affect the equity of the hotels in the East Coast of Sri Lanka. Table 6
brand equity as its t values are greater than 1.96 and all p explains the mediation of brand equity between extended
values are less than 0.05. However, the path coefficient for marketing mix elements and customer response.
the variable marketing communication is negative but it is Table 6 Total Effect and Mediating Role of Brand
significant (p < 0.05, t > 1.96). Therefore, H1, H2, and H3 Equity
are supported in this study. H4 is not supported as it has
negative path coefficient. Coefficient T P
Statistics Values
Table 5 Direct effect of extended marketing mix on
Marketing -0.150 2.101 0.036
Brand equity and Customer Response
communication -
Model 1 Model 2
> Brand equity -
Brand Equity Customer > Customer
Response Response
Variable Coefficie t – f2 Coefficie t – People -> Brand 0.324 7.313 0.000
nt valu nt valu equity ->
e e Customer
People 0.482 8.38 0.57 0.324 7.66 Response
9 6 1 Physical 0.283 3.622 0.000
Physical 0.421 3.41 0.16 0.283 3.65 evidences ->
evidence 3 0 1 Brand equity ->
Process 0.401 6.87 0.45 0.274 6.47 Customer
5 0 6 Response
Marketing -0.223 2.06 0.04 -0.150 2.05 Process -> Brand 0.274 6.517 0.000
communicati 9 9 7 equity ->
on Customer
R2 0.839 0.453 Response
Adj. R2 0.835 0.449
All variables such as people (Path Coefficient = 0.482, t >
f2 for Brand 0.82
1.96, p < 0.05), process (Path Coefficient = 0.407, t > 1.96,
equity  7
Customer p < 0.05 and physical evidences (Path Coefficient = 0.421, t
Response > 1.96, p < 0.05) positively contribute to the brand equity of
All p values are < 0.05. the hotels in the East coast of Sri Lanka. It is also evident
that these latent variables (People: Path Coefficient = 0.324,
According to Model 1 of Table 5, 83.9% (R2 = 0.839) of t > 1.96, p < 0.05, Process: Path Coefficient = 0.324, t >
the variation of the brand equity of Hotels in the East Coast 1.96, p < 0.05, Physical evidences: Path Coefficient = 0.283,
of Sri Lanka is explained by extended marketing mix such t > 1.96, p < 0.05) have a positive impact on the customer
people, physical evidence, process, and marketing response. Further, it is also paramount to indicate that brand
communication.

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DOI: 10.35940/ijitee.K1039.09811S219 254 & Sciences Publication
 International Journal of Innovative Technology and Exploring Engineering (IJITEE)
ISSN: 2278-3075, Volume-8, Issue-11S2, September 2019

equity of the hotels in the East coast of Sri Lanka influence on the consumer response. Therefore, H5 is also
significantly contribute to the customer responses towards supported. Thus, results indicate that brand equity of the
the hotels (Path Coefficient = 0.673, t > 1.96, p < 0.05). hotels partially mediates between the extended marketing
Marketing communication is with negative path coefficient. mix of the hotels and customer response.
Therefore, hypotheses H1a, H2a and H3a are supported and All observed variables are contributing to the latent
H4a is not supported. variables in the model. Factor loadings and its t values are
n the case of brand equity and consumer response, brand given in Table 7.
equity created by the extended marketing mix positively
Table 7 Factor Loadings
Factor
T Statistics P Values VIF
Loadings
BE1 – Loyal to hotel 0.945 147.322 0.000 4.087
BE4 – Likely quality of the hotel 0.867 32.129 0.000 2.223
BE5 – Easy recall of the hotel brand 0.918 83.107 0.000 3.297
CR1 – Satisfaction of decision to stay at the hotel 0.641 4.272 0.000 1.523
CR2 – Favorable opinion about a hotel 0.896 47.521 0.000 1.289
CR4 – Future intention to visit the hotel 0.751 11.665 0.000 1.471
MC1 – Content of the website help choose hotel 0.711 11.65 0.000 1.869
MC4 – Social media marketing is attractive 0.895 100.125 0.000 3.324
MC5 – Social media marketing comparison 0.869 80.836 0.000 2.075
MC6 – Satisfaction of generated content by others 0.779 24.901 0.000 1.818
MC7 – Content generated by others are attractive 0.739 16.622 0.000 2.296
PE1 – Music 0.950 113.335 0.000 4.321
PE3 – Scent 0.919 56.612 0.000 3.985
PE4 – Interior and exterior color 0.838 37.223 0.000 4.173
PE5 – The decoration 0.520 6.572 0.000 1.690
PE6 – Style of architecture 0.718 32.555 0.000 2.576
PE7 – Floorspace 0.841 47.697 0.000 3.040
PP1 – Employees’ dress 0.792 21.572 0.000 4.967
PP3 – Employees provide accurate information 0.695 10.254 0.000 1.893
PP4 – Employees’ knowledge 0.710 12.734 0.000 4.324
PP5 – Feeling safe while interacting with employees 0.733 15.03 0.000 2.499
PP6 – Complaints 0.793 51.959 0.000 1.881
PP7 – Employees’ polite and smiling 0.787 23.406 0.000 2.736
PS1 - Hotel entrance 0.867 31.295 0.000 3.390
PS2 – Reception set up at the hotel 0.974 157.626 0.000 4.983
PS3 – Front stage activities 0.504 6.959 0.000 1.745
PS6 – Pleasure and leisure at hotels 0.863 48.212 0.000 3.495
Including all t values and path coefficient are shown in the following structural model.

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DOI: 10.35940/ijitee.K1039.09811S219 255 & Sciences Publication
 The Effects of Services Marketing Mix Elements on Brand Equity and Customer Response of Tourists Hotels in the
East Coast of Sri Lanka

Figure 2 Structural Model

employees enabling the employees to be polite and smiling

X. DISCUSSION OF FINDINGS with tourists staying in the hotels. Employees’ dress is also
The model tested in this study is well supported in spite influencing on the people elements of these hotels that may
of the fact that marketing communication has negative path also provide customers staying in the hotel a feeling of safe
coefficient. People elements, process elements, and while interacting with them.
physical evidence are positively influencing on the brand The second variable which has a major impact on the
equity and customer response of the hotels in the East Coast brand equity and customer response is processes element of
of Sri Lanka. In the event of mediation of brand equity the extended marketing mix. Front line staff including
between extended marketing mix and customer response of employees at the reception areas is mostly influencing and
these hotels, brand equity has partial mediation. Thus, contributing to the process element of the extended
hotels in the region need to focus on creating brand equity marketing mix of hotels. Well set up of reception areas of
using the elements of the extended service marketing mix. these hotels in the Eastern Province positively influence on
It may give us a greater understanding of the impact the the process element and in turn, significantly contribute to
extended marketing mix elements have on the brand equity the brand equity and customer response. Due to the service
and customer response of the hotels in the Eastern Province process design of these hotels, customers feel that stay at
of Sri Lanka by discussing each element. these hotels is providing pleasure and leisure feeling for
People element of the extended marketing mix is one of them. This, in turn, influence positively on the customer
the major variables that impacts on the brand equity and based brand equity and customer response positively.
customer response in the hotel industry in the East Coast of Moreover, it is also found that the front stage activities of
Sri Lanka. Complaint handling and employees’ responses these hotels are well organized and serve the customer
to the customers are mainly contributing to the people glowingly as required. Thus, focusing on the front stage
elements. Complaint handling is one of the major factors operations of the hotels may also help enhance brand equity
that determine customer satisfaction as well. Hence, it is and in turn, will positively influence the customer response
essential for these hotels to have a complaint handling for revisiting to the hotels.
system integrated into the process of elements of these
hotels in the areas. Moreover, it is also important for the
process elements to sustain the pleasant mode of the

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Thirdly, physical evidence of the extended marketing Coast of Sri Lanka in order to derive the brand equity and
mix of the hotels in the Eastern region also positively positive customer responses towards these hotels as the
influencing on the brand equity and on the customer tourist can understand and identify the places better using
response. Factors such as music, attractive scent, social media (Stojanovic et al., 2018).
architectural style of the building, interior and exterior This study also contributes theoretically to the service
colors and decoration are contributing to the physical marketing mix studies. For instant, the current study
evidence of these hotels and contribute to the brand equity supports Mokharjee and Shivani (2016) by providing
and customer response. Point to the fact that music is one evidence on the creation of brand equity with the usage of
of the major influencing factors in service settings. Music extended service marketing mix elements namely people,
will also be moderated with the characteristics of the process and physical evidence. Moreover, this study also
customers in the hotels. Some customers will not like to sheds light on the creation of brand equity using extended
hear fast tempo and high volume music. Within the hotels, marketing mix of hotels and supports to Rajh (2005) who
it always has soft music which may induce customers' stay explains about the influence of the marketing mix (4ps) on
during enjoying food as they are staying in the hotels. This the brand equity.
may give a feeling of leisure in the hotels. Scents also give Findings also suggest that people element of these hotels
a pleasant feeling to the customers in the hotels as one of is contributing more to the brand equity and customer
the ambient factors. The scent provides customers with a response in this study. Therefore, hotels in the region need
mode and shape the behavior of customers inside the hotels more attention towards implementing internal marketing
and may ensure the customers' repeated visit to the hotels. activities such as training for the employees on customer
The next factor in the physical evidence is the color of the care, complaint handlings and service failure and recovery
interior and exterior of the hotels in the region. The color should be given so that their performance may improve
will have a strong impact on customers’ feelings. further and customers will also be delighted. The process is
Therefore, hoteliers need to have their hotels get painted in another major variable that influences positively on the
cool colors than warm colors. customer response. Service process at the hotels may be
In spite of the fact that marketing communication has a required to be improved further in areas of hotel service
negative impact on the brand equity and purchase intention, delivery to make the hotels' environment more leisure-
hoteliers need much attention on the marketing oriented and pleasant. Physical evidence are also
communication which has a major huge impact on the important for these hotels as it positively impacts on the
brand equity and customer response according to the brand equity and customer response. Music and scents are
literature. Marketing communication is another variable vital aspects for these hotels in the region. This should be
focusing on the online presence of these hotels impact further improved in accordance with the characteristics of
negatively on the brand equity and customer response. This the customers stayed in the hotels. Since the scent
reflects that these hotels in in the Eastern region of Sri stimulates the customers, this can also be maintained inside
Lanka do not give greater attention to the social media the hotels. Another attribute of the ambiance of hotels is
marketing which is now inexpensive for service decoration with colors that suit the customers. Colors
organizations and is effective in the integrated marketing should be expressive for the customers and may provide a
communication mix. Marketing communication via social conducive environment to the customers. In the case of
media of these hotels should motivate the customers to marketing communication, hotels need to improve their
choose from various hotels and the social media campaign online presence via social media. Digital marketing is now
should be attractive and should also meet the expectations important source to create brand equity and to positively
of the customers of these hotels. influence on the customer response. Thus, hoteliers need to
develop social media marketing communication in order to
XI. CONCLUSION, RECOMMENDATIONS AND further improve the brand equity of these hotels.
MANAGERIAL IMPLICATION This study has limitations on respondents of the
The major objective of the study was to examine the questionnaires as the researcher approached tourists who
effect of the elements of extended service marketing mix of visited Potuvil, Batticaloa, and Trincomalee. These tourists
the east coast hotels on the creation of the brand equity and were reluctant to meet and give responses to the study as
customer response. The model with the mediating variable their language and cultural differences in different settings.
in this study is the best fit and thus, it gives empirical Hotels in these areas are not well developed as five-star
evidence that witnesses extended marketing mix supports types of hotels and therefore, the results may be biased.
customer response mediating through brand equity created Expanding this type of studies in the future for other areas
by the extended marketing mix of hotels. Findings suggest where we may find five-star types of hotels. It may give
that brand equity is created by people, process and physical more meaningful findings for this study. Further, future
evidence of the extended marketing mix of the hotels. It studies may be focused on brand equity elements such as
was also found that created brand equity is partially brand awareness, brand image, perceived quality of services
mediating the relationship between extended marketing mix and brand knowledge about the services provided by the
and customer response. As far as marketing communication hotels and its impact on the customers' revisit intention.
via social media is concerned, it does not significantly
contribute to the creation of brand equity and in turn, to the
customer response. Therefore, it is supreme to adopt the
social media promotion for these hotels situated in the East

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DOI: 10.35940/ijitee.K1039.09811S219 257 & Sciences Publication
 The Effects of Services Marketing Mix Elements on Brand Equity and Customer Response of Tourists Hotels in the
East Coast of Sri Lanka

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