The doctoral thesis is directed towards researching influence of physical environment, more precisely, the influence of implementation of purposely selected olfactory stimulus within physical environment on emotional state of an individual, perception of physical environment and estimation of service value, which leads to a higher level of customer's satisfaction with service. Influence of physical environment is significant, since it contributes to positioning and differentiation of business organizations, particularly those dealing with the service segment. Intangibility is one of the main characteristics of services and by means of physical environment the services are intended to become tangible and accessible to customers. As regards service marketing, offer is based on four basic elements of marketing mix – product/service, price, distribution and promotion. However, it includes additional three elements, precisely, people (service providers), processes and physical environment. Physical environment facilitates and upgrades transactions between target market and business organizations. Hence, the studying physical environment is important to business organizations that are willing to act based on the marketing concept of business, namely, be competitive. Physical environment is defined by the elements within it that an individual perceives by senses (vision, hearing, smell, touch). This research is focused on purposely selected olfactory stimulus of essential oil Mentha piperita. This olfactory stimulus is purposely selected, given the fact that the research is conducted within the transfer of knowledge – rendering of educational services, and the olfactory stimulus concerned has cephalic features (it encourages concentration). In line with previous theoretical research it is expected that the above mentioned olfactory stimulus will influence affective reactions of the customer, the customer’s perception of physical environment as well as cognitive appraisal of the value of the service provided, influencing, consequently, a higher level of the customer’s satisfaction with the transfer of knowledge. Based on the previous research a model is derived and also empirically tested by experimental and survey methods. By implementation of purposely selected olfactory stimulus physical environment was perceived as better. The perception of physical environment as better is connected with the feeling of pleasure, which is reflected on VII customer’s satisfaction with the transfer of knowledge. Likewise, perception of physical environment as better influences customer’s satisfaction with the transfer of knowledge. The perception of physical environment as better also improves the service value estimate, which, thus, results in a higher level of the customer’s satisfaction with transfer of knowledge. Contrary to the expectations based on the previous research, a direct connection of olfactory stimulus with emotional state as well as with estimation of the service value, as regards the whole sample, has not been proven. Therefore, in addition to classical methods, future research would be primarily oriented towards research, which rely on the methods originally used in neuroscience, in order a better insight into reactions of individuals to certain stimuli and their decisionmaking/ attitude expression may be obtained. The above mentioned is also supported by the cognition that a difference in perceiving the value of transfer of knowledge is established between the individuals who liked the olfactory stimulus and those ones who did not like it (when olfactory stimulus was implemented in physical environment). In other words, although the service content itself did not include any basis for the above mentioned, liking of olfactory stimulus influenced estimation of the service value.