The effects of social justice and stigma-consciousness on gay customers' service recovery evaluation

Journal of Business Research 67 (2014) 1162–1169

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Journal of Business Research

The effects of social justice and stigma-consciousness on gay customers' service recovery evaluation Heejung Ro ⁎, Eric D. Olson 1 Rosen College of Hospitality Management, University of Central Florida, 9907 Universal Blvd, Orlando, FL 32819, USA

a r t i c l e

i n f o

Article history: Received 1 February 2012 Received in revised form 1 December 2012 Accepted 1 May 2013 Available online 30 May 2013 Keywords: Gay Service recovery Justice Stigma-consciousness

a b s t r a c t This study examines how social justice and the stigma-consciousness level of gay customers influence their service recovery perceptions. The results, based on an experiment involving 379 gay respondents, indicate that distributive justice, procedural justice, and interactional justice significantly affect gay customers' service recovery evaluations (satisfaction) and post-complaint behavioral intentions (negative word-of-mouth and repatronage). Also, higher stigma-consciousness gay customers show more negative service recovery evaluations and behavioral intentions than those with lower stigma-consciousness. Service providers who are interested in attracting and maintaining gay customers should create awareness among their employees about stigma-consciousness. © 2013 Elsevier Inc. All rights reserved.

1. Introduction Same-sex marriage expansion and other gay rights' movements over the past decade contribute to an increase in the visible gay and lesbian households, and expand the market for consumer goods and services (MarketResearch.com, 2010). The U.S.'s gay, lesbian, bisexual, and transgender community has an estimated $790 billion in buying power (WiteckCommunications, 2012), and their economic contribution to the travel industry is over $65 billion per year (CommunityMarketing, 2011). Even though gay consumers are a growing market segment, academic research on them remains relatively sparse (Burnett, 2000; Delozier & Rodrigue, 1996). Prior research examines gay consumers' attitudes and behaviors (e.g., Kates, 2002; 2004; Um, 2012); however, few studies address gay customers' perceptions of service encounters involving social interactions. Service encounters are the “critical moments of truth” in which customers often develop indelible impressions of service organizations (Zeithaml & Bitner, 2000). Particularly, service failure and recovery encounters are critical interactions directly reflecting the service level from the customer's point of view and providing a valuable opportunity for firms to retain the customers (Bitner, Booms, & Tetreault, 1990; Smith, Bolton, & Wagner, 1999; Tax, Brown, & Chandrashekaren, 1998).

⁎ Corresponding author. Tel.: +1 407 903 8075; fax: +1 407 903 8105. E-mail addresses: [email protected] (H. Ro), [email protected] (E.D. Olson). 1 Tel.: +1 407 903 8227; fax: +1 407 903 8105. 0148-2963/$ – see front matter © 2013 Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.jbusres.2013.05.006

Justice theory is the dominant theoretical framework explaining service recovery (McColl-Kennedy & Sparks, 2003). According to the justice theory, customers evaluate the fairness of service recovery along three factors: outcome, procedural, and interactional fairness (Blodgett, Hill, & Tax, 1997; Wirtz & Mattila, 2004). In a social setting, targets of stereotypes, prejudice, and discrimination always seem to be “out there” (Pinel, 1999). Unfortunately, gays, like other minorities, learn to anticipate negative regard from members of the dominant culture (Meyer, 1995). In a consumption situation, consumers function in an active self-awareness state and they become more sensitive to their group memberships (Stayman & Deshpande, 1989). Targets of stereotypes recognize that their group membership plays a role in how people interact with them (Pinel, 1999). This study purports gay customers' level of stigma-consciousness, the extent to which they expect to be stereotyped in a social setting, likely affects how they perceive service encounters. How does distributive, interactional, and procedural justice affect gay customers' evaluation of service recovery and post-complaint behavioral intentions? Does the stigmaconsciousness level influence gay customers' service recovery evaluation and post-complaint behavioral intentions? Services marketing and social psychology literatures inform this research. Study results advance the understanding of gay customers in at least two ways. First, this study adds to the service recovery literature and increases an overall understanding of gay customer behavior. Second, this study incorporates different levels of gay customers' self-views in a social exchange context. Stereotypical views about gay people do not uniformly reflect their perceived status in a social exchange setting. More broadly, study findings inform researchers who are investigating minority customers' social justice perceptions in the marketplace.

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2. Literature review 2.1. Gay consumers According to Branchik (2002), the U.S. gay market consumer research evolves over three chronological periods: underground (pre-1941), community building (1941–1970), and mainstream (1970–present). During the mainstream period, companies show increasing social acceptance and more proactive advertisement through the mainstream media to reach the gay market. Also, gay consumers are more visible to marketers and show patronization for the brands specifically targeting gays (Branchik, 2002). Noting the unique lifestyle and consumption behavior, many gay consumer studies refer to them as a distinct subculture (e.g., Fugate, 1993; Haslop, Hill, & Schmidt, 1998). Gay people express certain symbolic style values countering the dominant or mainstream culture, expressing a willingness to belong to the gay community, helping to recognize and detect other gay people, and creating a collective identity (Freitas, Kaiser, & Hammidi, 1996; Kates, 2002; Rosenbaum & Montoya, 2007; Rudd, 1996; Sender, 2001). Existing gay and lesbian consumer research classifications cover five distinct areas. The first area describes characteristics of the gay and lesbian consumers and their spending patterns. Compared to their straight counterparts, the gay and lesbian segment consists of relatively welleducated and affluent consumers with considerable disposable income (Oakenfull, MacCarthy, & Greenlee, 2008) and a higher home ownership rate (Um, 2012). Also, gay consumers travel more, spend more money on clothing (Weeks, 1985), and place more importance on appearance in socialization and self-presentation (Rudd, 1996) than straight consumers. A second research stream comes from advertising research. Recognizing gays and lesbians as a lucrative market segment, advertising studies discuss strategies to target gay and lesbian market without alienating other consumers (e.g., Grier & Brumbaugh, 1999; Tuten, 2005; Um, 2012). The third research theme is gay tourism and leisure activities (e.g., Coon, 2012; Hughes, 2002). For example, Clift and Forrest (1999) explore gay men's motivation for tourism activities. Other studies highlight the growing gay tourism market and the importance of travel and leisure activities for gays and lesbians (e.g., Pitts, 1999). Fourth, consumption behavior studies examine gay lifestyle and subculture. For example, some researchers focus on gay shopping behavior (e.g., Peñaloza, 1996; Sha, Aung, Londerville, & Raleston, 2007). Other researchers suggest that gay consumers tend to be innovative and trendsetting (Vandecasteele & Geuens, 2009) and show high brand loyalty (Kates, 2004). Noting the symbolic nature of gay space, several studies explore gay servicescape (e.g., Haslop et al., 1998; Rosenbaum, 2005; Rosenbaum & Montoya, 2007). Finally, the fifth research stream includes studies that highlight issues of consumption discrimination. Gays and lesbians often confront inequity from employees and other customers in the marketplace (e.g., Jones, 1996; Walsh, 2009; Walters & Curran, 1996; Walters & Moore, 2002). Past research generates insights regarding gay consumers' buying patterns and other related issues. Nevertheless, considerably less is known about their perceptions of service encounters. To bridge the gap, this study focuses on gay customers' service encounter evaluations by using justice theory to reflect the fairness in a service recovery context. 2.2. Fairness of recovery: justice theory Customer complaint management literature shows that customers expect “fair” resolutions to product and service failures (e.g., Blodgett et al., 1997). Outcomes, procedural fairness, and interactional treatment affect customers' perceptions of service recovery fairness (McColl-Kennedy & Sparks, 2003; Smith et al., 1999; Tax et al., 1998). Distributive justice reflects the outcome fairness and focuses on the compensation provided for the customers' loss and/or inconvenience

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(Smith et al., 1999). Many service organizations offer various reparations, including refunds, credits, and discounts, to compensate dissatisfied customers. Procedural justice involves the process and policies affecting recovery effort decisions (Smith et al., 1999). The speed of correcting service failures or responding to complaints determines customer perceptions of procedural justice (Blodgett et al., 1997; Tax et al., 1998). Interactional justice refers to how the customer is treated during the recovery process (Smith et al., 1999). For example, employees' courtesy and empathy influence customers' overall service recovery perceptions (Tax et al., 1998). Justice theory and previous research suggest that higher levels of distributive, procedural, and interactional justice lead to more favorable service recovery satisfaction and subsequent behavioral responses. Since previous research confirms the three justice dimensions' effects on service recovery (e.g., Blodgett et al., 1997; Smith et al., 1999; Tax et al., 1998; Wirtz & Mattila, 2004), stating specific hypotheses seems unnecessary. Distributive justice, procedural justice, and interactional justice likely increase gay customers' satisfaction and repatronage intentions, but decrease their negative word-of-mouth intentions. 2.3. Gay customers' interactions in a social setting A differential customer treatment based on perceived group-level traits (e.g., age, gender, sexual orientation) commonly occurs during service encounters (Walsh, 2009). Anti-gay prejudice (i.e., heterosexism, homophobia) is an attitude absorbed implicitly and explicitly through the dominant cultural milieus (Walters & Moore, 2002). Experiences of heterosexism negatively affect the well-being of sexual minority individuals (Smith & Ingram, 2004) and lead them to feel insecure when interacting with other social groups (Weightman, 1981). Many self-identified homosexuals internalize the culturally dominant biases and express some level of self-derision or internalized homophobia (Stokes, Damon, & McKirnan, 1997). Perceived stigma relates to the view that a person will be treated unfairly because of his or her sexual orientation (Meyer, 1995). Goffman (1963) notes that a stigmatized individual “may perceive, usually quite correctly, that whatever others profess, they do not really ‘accept’ him and are not ready to make contact with him on ‘equal grounds’ (p.7).” A high level of perceived stigma leads minority group members to maintain a high degree of vigilance — expectations of rejection, discrimination, and even violence during interactions with dominant group members (Meyer, 1995). Stigma-consciousness reflects how much group members who are targets of stereotypes (e.g., gay) expect to be stereotyped by others (Pinel, 1999). People high in stigma-consciousness more likely perceive discrimination directed toward their group and toward them personally (Pinel, 1999). Yet, not all minority group members approach their stereotyped status to the same degree (Pinel, 1999), and the individuals' varying levels of stigma-consciousness lead them to react differently to the same situation (Brown & Pinel, 2003). The current study posits gay individuals' self-views within the mainstream society may affect their service experience perceptions. Individual experiences of heterosexism in society lead gay people to form different levels of stigma-consciousness, which will influence their perceptions of social exchange services. Gay customers' service recovery evaluations will be affected by their stigma-consciousness level — to the extent they expect to be stereotyped. Prior research suggests that stigma produces negative consequences during social interactions (Major & O'Brien, 2005) and stigma-consciousness increases negative feelings of stereotype threat and responses (Brown & Pinel, 2003). Therefore, high stigma-consciousness leads to less favorable recovery evaluations and post-complaint behavioral intentions. H1a. Gay customers with high stigma-consciousness show lower satisfaction than those with low stigma-consciousness.

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H1b. Gay customers with high stigma-consciousness show higher negative word-of-mouth intentions than those with low stigmaconsciousness. H1c. Gay customers with high stigma-consciousness show lower repatronage intentions than those with low stigma-consciousness. Since stigma-consciousness refers to a gay individual's stereotypical self-view in social interactions, the effect of interactional justice reflected by service employees' behavior and attitudes may be strengthened or lowered by the stigma-consciousness level. Stigma-consciousness likely moderates interactional justice's effect on gay customers' recovery evaluations and post-complaint behavioral intentions. More specifically, stigma-consciousness exacerbates satisfaction and subsequent behavioral responses when interactional justice is low. H2a. Low interactional justice's negative effect on satisfaction magnifies with highly stigma-conscious gay customers. H2b. Low interactional justice's positive effect on negative word-ofmouth magnifies with highly stigma-conscious gay customers. H2c. Low interactional justice's negative effect on repatronage intention magnifies with highly stigma-conscious gay customers. 3. Method 3.1. Research design Using an experimental design, participants were asked to role-play a customer whose experience checking in at an overbooked hotel is described in a written scenario. The research design was a 2 (distributive justice: high and low) × 2 (procedural justice: high and low) × 2 (interactional justice: high and low) × 2 (stigma-consciousness: high and low) between-subject quasi-experimental design. Distributive justice was manipulated by the service recovery outcome: upgrade to an executive suite (high) versus downgrade to a standard room next to the elevator (low). Procedural justice was manipulated by the speed of recovery: quick recovery with immediate actions (high) versus slow recovery with delayed actions (low). Interactional justice was manipulated by employee's behavior during the recovery process: sincere apology in a polite manner (high) versus no apology in a rude manner (low). Stigma-consciousness was measured, and the participants were divided into two groups (high and low) by median split. Since customers tend to differ in their complaining behaviors (Blodgett et al., 1997), the participants' general propensity toward complaining is included as a covariate in the analysis. Appendix A shows the operationalized conditions and manipulation check. 3.2. Measures To ensure effective manipulation, this study employs Blodgett et al.'s (1997) nine-item justice scale (three items for each dimension; α = .84 for distributive justice, α = .84 for procedural justice, α = .76 for interactional justice). For stigma-consciousness, a seven-item scale (e.g., Most heterosexuals have a problem viewing homosexuals as equals; α = .70) developed by Pinel (1999) was used. All items were measured using 7-point Likert scales (1 = strongly disagree; 7 = strongly agree). Also, scenario realism was assessed by asking the participants, “How realistic was this scenario to you?” (1 = highly unrealistic; 7 = highly realistic). 3.2.1. Dependent constructs Satisfaction was measured by three items (e.g., “I am satisfied with my overall experience with this hotel;” α = .96) (Hess, Ganesan, & Klein, 2003). Negative word-of-mouth intentions (NWOM) were assessed by three items (e.g., “I would tell others about the negative experience that I had;” α = .94) (Blodgett et al., 1997). The participants also were asked to indicate their repatronage intentions using three

semantic differential items (unlikely/likely, inclined not to/inclined to, definitely no/definitely yes; α = .97) (Hui, Zhao, Fan, & Au, 2004). 3.2.2. Covariate The participants' general attitude toward complaining was measured by employing a three-item scale (e.g., “In general, I am more likely to complain about poor service than most people I know;” α = .60) (Blodgett et al., 1997). Appendix B shows the study scales. 3.3. Data collection and sample A convenience sample of 144 gay men was recruited from a large Gay Pride event in a southeastern city in the U.S., and an additional 252 gay men were recruited through a marketing research firm. Out of 396 respondents, 17 questionnaires were excluded due to missing information and inadequate answering patterns, resulting in a total of 379 usable questionnaires. The participants were assigned randomly to one of the eight scenarios and instructed to imagine themselves as the customer in the scenario. After reading the assigned scenario, the participants completed a questionnaire designed to measure the effectiveness of the experimental manipulations and the dependent constructs. Before analysis, two data sources were compared by performing a series of t tests; no difference was found in all the manipulating variables (t = −1.34–.08, p > .05), dependent constructs (t = −.06–1.56, p > .05) and the covariate (t = .39, p > .05). Of the 379 participants, 367 are identified as gay men (97.9%), seven are identified as gay/bisexual men (1.9%), and one respondent is identified as a transgender gay man (.3%). The respondent's average age is 43 years and most of the participants are Caucasian (77.2%). For education, 41.1% have a college degree and 12.7% have a graduate degree. The majority (56.9%) of the participants are single (56.9%), 36.7% are partnered, and 3% are married. For household income, 23.8% of the participants report an income level of $40,000–59,999; 14.1% report $60,000–79,000; and 21% report $80,000 or more. Finally, 29% of the participants report staying in hotels 1–2 times in the past year, about 30% state 3–5 times, and 21% indicate 6 times or more. Table 1 summarizes the demographic characteristics of the sample. 3.4. Manipulation checks As expected, respondents are more likely to report (a) an executive suite room upgrade is more favorable than a standard downgraded room next to the elevator (5.34 vs. 2.48, t = 21.60, p b .001), (b) immediate recovery is more favorable than a delayed recovery (4.85 vs. 2.60, t = 13.62, p b .001), and (c) a sincere apology in a polite manner is more favorable than no apology in a rude manner (4.79 vs. 2.74, t = 10.99, p b .001). A median split (Median = 4.10) is performed on the data to categorize the participants into two groups: high stigmaconsciousness group (n = 190) and low stigma-consciousness group (n = 186). As expected, mean stigma-consciousness scores significantly are higher for high stigma-consciousness participants (M = 4.76) than low stigma-consciousness participants (M = 3.17) (t = 23.69, p b .001). Finally, regarding realism, the study participants perceive the scenario descriptions as realistic (M = 5.4), and no realism difference exists in the 16 (2 × 2 × 2 × 2) conditions (F(1,369) = .25–3.53, p > .05). Taken together, these results indicate effective manipulations. 4. Results Prior to testing the hypotheses, confirmatory factor analysis assessed the study variables' psychometric properties by estimating a single measurement model containing the covariate and dependent variables (see Table 2). Results indicate that the model offers a good fit to the data (χ2 = 128.30, df = 48, CFI = .983, NFI = .973, and RMSEA = .067). Construct reliability estimates are high (.85–.91), except for attitude toward complaining (.60), which is considered to be

H. Ro, E.D. Olson / Journal of Business Research 67 (2014) 1162–1169 Table 1 Sample characteristics. Gay men (n = 379) Frequency Age Average Ethnicity White/Caucasian Hispanic/Latin Black/African-American Asian/Other Marital status Single Divorced Married Partnered Education Some high school High school degree College credits but no degree College degree Graduate school Household income Less than $20,000 $20,000–$39,999 $40,000–$59,999 $60,000–$79,999 $80,000–$99,999 $100,000 or more

%

43 years 285 36 29 9

77.2 9.8 7.9 5.2

206 11 12 133

56.9 3.0 3.3 36.7

7 50 114 152 47

1.9 13.5 30.8 41.1 12.7

57 92 86 51 35 41

15.7 25.4 23.8 14.1 9.7 11.3

adequate by contemporary researchers (Clark & Watson, 1995). All scales demonstrate adequate convergent validity and discriminant validity: the AVE for each variable is above .50, and exceeds the shared variance (Fornell & Larcker, 1981). The MANCOVA procedure examined the main and interaction effects of the four independent variables on satisfaction, negative word-ofmouth (NWOM), and repatronage intentions after controlling for the covariate. The covariate (attitude toward complaining) is significant (Wilks' λ = .96, F(3,351)4.71, p b .005, η2 = .04), indicating that the covariate is effective to be included in the model. Multivariate results indicate that the main effects of the three justice dimension variables are significant (distributive justice: Wilks' λ = .61, F(3,351) = 74.65, p b .001, η2 = .39; procedural justice: Wilks' λ = .927, F(3,351) = 9.211, p b .001, η2 = .07; interactional justice: Wilks' λ = .89, F(3,351) = 14.55, p b .001, η2 = .11). Also, the main effect on the stigma-consciousness marginally is significant at α = .05 level: Wilks' λ = .98, F(3,351) = 2.53, p = .057, η2 = .02. Additionally, a significant three-way interaction exists with distributive justice, interactional justice, and stigma-consciousness (Wilks' λ = .98, F(3,351) = 2.99, p b .05,

Table 2 Descriptive statistics and confirmatory factor analysis results.

1. Attitude toward complaining 2. Satisfaction 3. Negative WOM 4. Repatronage

Mean

SD

ICR

AVE

3

4

4.69

1.30

0.60

0.65

1 0.89

2 0.01

0.01

0.01

3.46 5.02 3.11

2.01 1.87 1.95

0.96 0.94 0.97

0.89 0.85 0.91

0.09 −0.08 0.11⁎

0.97 0.16⁎ −0.16⁎

0.03 0.96 0.82⁎

0.03 0.67 0.98

Note: Model fit: Chi-square = 128.30, df = 48, comparative fit index (CFI) = .983, normed fit index (NFI) = .973, root mean squared error of approximation (RMSEA) = .067, ICR = internal construct reliability. The square roots of the average variances extracted (AVEs) for each construct are shown on the diagonal of the correlation matrix, and the values above the diagonal are squared correlations. ⁎p b .05.

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η2 = .03). No other interaction effect is statistically significant. Table 3 shows the means by main effects. Univariate analyses indicate that distributive justice has a main effect on satisfaction (F(1,353) = 216.31, p b .001, η2 = .38), NWOM (F(1,353) = 109.22, p b .001, η2 = .24), and repatronage (F(1,353) = 119.89, p b .001, η2 = .25). Similarly, procedural justice has a main effect on satisfaction (F(1,353) = 22.81, p b .001, η2 = .06), NWOM (F(1,353) = 19.69, p b .001, η2 = .05), and repatronage (F(1,353) = 12.43, p b .001, η2 = .03). Interactional justice also has a main effect on satisfaction (F(1,353) = 32.52, p b .001, η2 = .08), NWOM, (F(1,353) = 33.66, p b .001, η2 = .09), and repatronage (F(1,353) = 27.24, p b .001, η2 = .07). Additionally, stigmaconsciousness significantly affects satisfaction (F(1,353) = 6.835, p b .01, η2 = .02) and repatronage (F(1,353) = 4.04, p b .05, η2 = .01) but it does not have a main significant effect on NWOM. The results support H1a and H1c. No statistically significant two-way interaction effect exists between interactional justice and stigma-consciousness; thus, the evidence does not support H2a, H2b and H2c. Interestingly, a three-way interaction exists with stigma-consciousness, distributive justice, and interactional justice on NWOM (F(1,353) = 8.33. p b .01, η2 = .02). Fig. 1 shows the interaction plots. For NWOM, findings show significant main effects for distributive justice and interactional justice, but no main effect exists for stigmaconsciousness. However, stigma-consciousness interacts with distributive and interactional justice and produces differential effects on NWOM (3-way interaction effect). More specifically, when both distributive and interactional justice dimensions are high, highly stigma-conscious gay customers more likely engage in NWOM than gay customers with low stigma-consciousness. Conversely, when distributive justice is high but interactional justice is low, highly stigma-conscious gay customers less likely engage in NWOM than customers with low stigma-consciousness. When distributive justice is low, however, gay customers show a similarly high NWOM level regardless of stigma-consciousness level. These findings suggest that gay customers' NWOM depends on their stigmaconsciousness level, particularly in regard to distributive and interactional justice. 5. Discussion In summary, the findings indicate that gay customers experiencing higher levels of distributive, procedural, and interactional justice more likely evaluate the recovery favorably, show more favorable behavioral intentions toward the company, and less likely engage in negative word-of-mouth. These findings are consistent with the previous studies (e.g., Blodgett et al., 1997; Wirtz & Mattila, 2004). Additionally, high stigma-consciousness gay customers show more negative service recovery evaluations and subsequent behavioral intentions than lower stigma-consciousness customers. These findings suggest high stigma-consciousness gay customers more likely believe that they are treated unfairly because of their perceived sexual orientation (cf. Meyer, 1995). Another interesting finding concerns the three-way interaction effect on negative word-of-mouth. Even though a positive resolution was provided through polite employee behaviors, high stigma-conscious gay customers more likely share their service failure experience with others than low stigma-conscious gay customers. Researchers suggest that high stigma-consciousness exacerbates the negative psychological impact of stigma, as manifested by greater experience of stereotype threat (Brown & Pinel, 2003). Recently, Wang, Stroebe, and Dovidio (2012) demonstrate people higher in stigma-consciousness more readily perceive subtle bias as discrimination and, consequently, they express more anger and engage in collective actions. This study confirms high stigma-conscious gay customers may view the service failure as discrimination due to their heightened vigilance toward prejudice cues and express higher intent to engage in warning other people by sharing their negative service experiences.

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Table 3 Means by main effect. Dependent Variables

Distributive justice High

Procedural justice Low

High

Interactional justice Low

High

Stigma-consciousness Low

High

Low

Satisfaction

4.61

> ⁎⁎⁎

2.30

3.83

> ⁎⁎⁎

3.09

3.90

> ⁎⁎⁎

3.01

3.25

b ⁎⁎

3.67

Negative WOM

4.15

b ⁎⁎⁎

5.85

4.64

b ⁎⁎⁎

5.36

4.54

b ⁎⁎⁎

5.47

5.06

n.s.

4.94

Repatronage

4.01

> ⁎⁎⁎

2.17

3.39

> ⁎⁎⁎

2.80

3.53

> ⁎⁎⁎

2.66

2.92

b ⁎

3.26

Notes: ⁎⁎⁎p b .001. ⁎⁎p b .01. ⁎p b .05.

When the employees' demeanors during the recovery are negative even though the recovery resolution is good, the low stigmaconscious gay customers tend to engage in negative word-ofmouth more than the high stigma-conscious gay customers. Possibly, high stigma-consciousness gay customers may see negative treatment from the service employees as a typical reaction from others in a social setting. This perception negatively affects gay customers' motivation to talk to other people about their bad experiences, particularly incidents involving negative interpersonal interactions. 6. Implications This study makes two main contributions. First, this study contributes to existing knowledge of gay consumer behavior research.

Negative WOM

at Interactional justice = high 6.00

Stigma-Consciousness Group

5.50

low stigma-conscious high stigma-conscious

5.00 4.50 4.00 3.50 3.00 low

high

Distributive justice at Interactional justice = low Stigma-Consciousness Group

6.50

low stigma-conscious high stigma-conscious

Negative WOM

6.00 5.50 5.00 4.50 4.00 low

high

Distributive justice Fig. 1. Three-way interaction on negative word-of-mouth.

Despite a growing interest in gay consumer behavior, research on gay customers' service evaluations remains limited. Also, gay individuals typically are portrayed as being stigma conscious when they interact with others (e.g., Brown & Pinel, 2003; Major & O'Brien, 2005); however, this observation ignores the fact that some gay individuals may overcome and/or are less affected by the stigma. In this regard, this research's motivation is to respond to the growing research interest and provide a better understanding of gay consumers. Second, this research contributes to the literature by highlighting the role of stigma-consciousness as an important factor associated with service recovery evaluation. Particularly, magnifying and mitigating effects of stigma-consciousness on negative word-of-mouth behaviors are a function of the type of justice dimensions involved, and these effects can be explained by their heightened sensitivity to cues of potential bias (Wang et al., 2012) or normative acceptance of negative interpersonal treatments from others (Meyer, 1995). This stigma-consciousness aspect in service evaluations can apply to other consumer segments with potentially negative stereotypes, for example the obese. For the service firms, consumer retention is paramount for a company's long-term success. When a service failure occurs, restoring all three justice dimensions (distributive, procedural, and interactional justice) during the service recovery should be a priority in order to retain the customers and minimize negative word-of-mouth behaviors. Consistent with most findings in service recovery literature, an immediate recovery process, appropriate compensation, and a sincere apology lead to more favorable recovery evaluations, repatronage intentions, and lower negative word-of-mouth behaviors by gay customers. Service managers need to develop effective and fair procedures that address all three justice dimensions for resolving gay customer dissatisfaction, resulting in higher retention rates and profits, and less negative word of mouth. Additionally, the findings suggest that gay customers' stigmaconsciousness influences their perceptions of services. A gay customer perceives sexual orientation as playing a role in the interaction with a service provider. In service encounters, a gay customer may indicate directly his sexual orientation to the service provider (e.g., checking into a hotel as a same-sex couple), or he may assume that the employee indirectly makes assumptions about his sexual orientation. While a general stereotypical view exists about gay people, not all gay customers view their stereotyped social exchange status in the same way. Whereas some gay customers may perceive the service failure and recovery as just an incident, others are more sensitive and may perceive an incident as discriminatory. These different service experience perceptions pose a challenge for service providers. Although most service organizations provide customer service training programs to treat all customers as equal, service employees may not understand how to serve gay customers with different stigma-consciousness levels. Service recovery's ultimate goal is

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to treat all customers fairly and equitably. Yet, service managers should strive to increase employees' awareness of gay customers' sensitized fairness perceptions and offer service training that focuses on preparing service employees to affirm and respect gay customers' differences and eliminate cues that potentially serve as sources of bias. Instructors can use this research to discuss minority customers' social justice perceptions in the marketplace. Addressing the different levels of gay consumers' perceived status in a social exchange setting allows instructors to guide students' understanding of stereotypes, discrimination, and fairness concepts in service encounters. Ample evidence has shown that effective service recovery based on three justice dimensions can mitigate negative consequences of service failures, yet identifying key moderators that are salient for a customer segment can enhance learning in the classroom.

7. Limitations and future research This study has several limitations that warrant future research. First, the study's focus is only homosexual males (gay male, gay/bisexual male, transgender gay male). Researchers suggest differences exist in gay, lesbian, bisexual, and transgender consumer behaviors by sexual orientation and gender (Bowes, 1996; Burnett, 2000). This finding directs future researchers to include other, less visible sexual orientation minority groups (e.g., lesbians) to reflect diverse subgroup distinctions in service encounters. Another area for future research involves servicescape. In a service failure context, physical surroundings and employees' responses influence customers' attribution perception and satisfaction (Bitner, 1990). Welcoming and friendly servicescapes such as certification programs (e.g., Human Rights Campaign Corporate Quality Index); signs and symbols (e.g., rainbow flag); and advertisements portraying gay customers encourage gay consumers (Rosenbaum, 2005). Gay friendly, symbolic cues in the servicescape can increase perceptions of welcoming and accepting, and lower gay customers' stigma-consciousness, consequently influencing gay customers' service recovery evaluations. Individuals and companies failing to recognize that they pose and display prejudicial attitudes unlikely admit that they treat homosexuals differently than heterosexuals (Walters & Moore, 2002). Future research may delve into this issue more. Marketplace discrimination by service employees is a documented occurrence, yet it is an area remaining largely under-researched (Walsh, 2009). Future studies can investigate whether or not subtle discriminatory attitudes and behaviors toward the gay and homosexual customers exist. Projective techniques can help to uncover sensitive information, because this method allows people to reveal thoughts and emotions when they are reluctant or are unable to express directly (Hussey and Duncombe, 1999). Finally, several study participants suggest “sexual preference”, as used in the stigma-consciousness scale from Pinel (1999), may be outdated within the gay community. Future research should consider using the term “sexual orientation” instead. Due to advances in social and political environments, social acceptability of gays and sexual minorities continues to increase. Researchers should reflect these changes and advancements in this segment by conducting more research and refining the scales to assess their characteristics properly. Also, although all study scales come from past research, some scales (e.g., negative word-of-mouth) show very high internal consistency, while attitude toward complaining shows low internal consistency. High internal consistency constructs may suggest scale invariance and being narrow in content (Clark & Watson, 1995), and low internal consistency constructs need further refinement.

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Appendix A. Scenario manipulations and manipulation checks You and your significant other/friend arrive at the hotel where, a while ago, you reserved a deluxe room with a specification of it being quiet. When you go to the front desk to check in, a front desk employee tells you that the room reserved is not available due to overbooking. When you complained about the problem, … Factor Manipulation and level

Group Manipulation means check questions

Interactional justice 4.79 High The employee sincerely apologizes for the problem and tells you that he/she will try his/her best to find the solution for you. … the employee informs … Low The employee rudely says that 2.74 this problem happens and tells you to wait to see what he/she can do about the problem … the employee condescendingly informs … Procedural justice High Immediately, then, the employee 4.85 starts making calls to find solutions for your problem. A few minutes later, the employee informs you that … 2.60 Low After answering a few phone calls, handling other guests and making you wait, the employee finally makes a few phone calls to find some solution for your problem. After half an hour of waiting, the employee informs that … Distributive justice High … that one room is available and you have a free upgrade to that executive suite room Low … that one room is available but it is a standard room located next to the elevator.

5.34

2.48

α = .76

t

10.99⁎⁎⁎

1. I was treated with courtesy and respect. 2. The employee seemed to care about the customer. 3. I feel that I was treated rudely (R). α = .84

13.62⁎⁎⁎

1. The problem was handled in a very timely manner. 2. The problem was resolved as quickly as it should have been. 3. I had to wait too long in order to resolve the problem (R). α = .84

21.60⁎⁎⁎

1. Taking everything into consideration, the hotel's offer is quite fair. 2. I did not receive what I thought I deserved (R). 3. Given the circumstances, I feel that the hotel offered an adequate solution.

⁎⁎⁎p b .001; All items measured on 1 = strongly disagree–7 = strongly agree.

Appendix B. Measures Stigma-consciousness (Pinel, 1999) The following statements assess your general opinion (α = .70, 1 = strongly disagree, 7 = strongly agree). − Stereotypes about homosexuals have not affected me personally. (R) − When interacting with heterosexuals who know of my sexual preference, I feel like they interpret all my behaviors in terms of the fact that I am a homosexual.

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Most heterosexuals do not judge homosexuals on the basis of their sexual preference. (R) I almost never think about the fact that I am homosexual when I interact with heterosexuals. (R) My being homosexual does not influence how people act with me. (R) Most heterosexuals have a lot more homophobic thoughts than they actually express. Most heterosexuals have a problem viewing homosexuals as equals.

Attitude toward complaining (Blodgett et al., 1997) The following statements reflect your general opinions as a consumer (α = .60, 1 = strongly disagree, 7 = strongly agree). − In general, I am more likely to complain about poor service than most people I know. − I am usually reluctant to complain regardless of how bad a service is. (R) − If a defective product is inexpensive, I usually keep it rather than ask for a refund. (R) Satisfaction (Hess et al., 2003) Think about both the problem you experienced and the employee's handling of the problem. How would you rate the whole experience with this hotel? (α = .96, 1 = strongly disagree, 7 = strongly agree). − I am satisfied with my overall experience with this hotel. − As a whole, I am happy with this hotel. − Overall, I am pleased with the service experience at this hotel Negative word-of-mouth (Blodgett et al., 1997) If the scenario situation happened to you, how likely are you to engage in the following behaviors? (α = .94, 1 = not at all likely, 7 = definitely) − I would tell others about the negative experience that I had. − I would warn friends and others not to use this hotel. − I would complain to friends and others about this hotel. Repatronage (Hui et al., 2004) Based on your experience in the scenario, how likely are you to choose this hotel for a future stay? (α = .97) − inclined not to (1) — inclined to (7) − unlikely (1) — likely (7) − definitely no (1) — definitely yes (7) References Bitner, M. J. (1990). Evaluating service encounters: The effects of physical surroundings and employee responses. Journal of Marketing, 54(2), 69–82. Bitner, M. J., Booms, B. H., & Tetreault, M. S. (1990). The service encounter, diagnosing favorable and unfavorable incidents. Journal of Marketing, 54(1), 71–84. Blodgett, J. G., Hill, D. J., & Tax, S. S. (1997). The effects of distributive, procedural, and interactional justice on post-complaint behavior. Journal of Retailing, 73(2), 185–210. Bowes, J. E. (1996). Out of the closet and into the marketplace: Meeting basic needs in the gay community. Journal of Homosexuality, 31(1/2), 219–244. Branchik, B. J. (2002). Out in the market: A history of the gay market segment in the United States. Journal of Macromarketing, 22(1), 86–97. Brown, R. P., & Pinel, E. C. (2003). Stigma on my mind: Individual differences in the experience of stereotype threat. Journal of Experimental Social Psychology, 39(6), 626–633. Burnett, J. J. (2000). Gays: Feelings about advertising and media used. Journal of Advertising Research, 40(1/2), 75–84. Clark, L. A., & Watson, D. (1995). Constructing validity: Basic issues in objective scale development. Psychological Assessment, 7, 309–319. Clift, S., & Forrest, S. (1999). Gay men and tourism: Destinations and holiday motivation. Tourism Management, 20(5), 615–625. CommunityMarketing (2011). 16th annual gay & lesbian tourism report: Exploring tourism and hospitality opportunities in the gay and lesbian market place 2011–2012.

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