Customer Satisfaction in Restaurant Industry

CUSTOMER SATISFACTION IN RESTAURANTS

Location:
Rawalpindi & Islamabad

Target Restaurants:
Lasania
Usmania
Red Onion
Jahangir

Group members:
Syed Alamdar Shah SP09-MBE-024
Zohaib Rafi SP09-MBE-0
Aqeel Shaukat SP09-MBE-002
Safdar Abbas Naqvi SP09-MBE-025

COMSATS Institute of Information Technology, Islamabad

Customer Satisfaction in Restaurant Industry

Introduction
This research focuses on customer satisfaction in restaurants. Besides making and serving
food, customer satisfaction is also an important element which needs special
consideration. Here in this research our focus is on service quality and its relation with
customer satisfaction. Because customers perceive some quality and if that quality is up
to his perception then he will be satisfied.

This research covers the topic of customer satisfaction. There are several variables of
service feature as food quality, price etc which have great influence on customer
satisfaction. These variables are discussed briefly in this research.

The restaurant industry in Pakistan is hiking. As the numbers of working females are
increasing in our country, the trend of out-door dinning is rapidly growing. On other
hand, most working class prefers to eat out in restaurants just to save time. And besides
this some peoples use to go to restaurants just for outing. Every class of customer has
some perceived value. If their perceived values are being fulfilled by restaurants staff
then the customer will be satisfied.

Now more restaurants are opening which is leading towards the concentrated
competition. Now as the lifestyle of people has changed, it directly affected on their
bahavior.People are more likely to follow the feast.

Franchise Industry % Market Share Establishments % Change over Prior Year

Automotive 4.25% 38,340 1.8%
Commercial and Residential Services 6.33% 57,007 0.3%
Quick Service Restaurants 21.4% 192,827 3.1%
Table/Full Service Restaurants 5.4% 48,609 2.1%
Retail Food 7.85% 70,722 2.4%
Lodging 3.53% 31,827 -0.8%
Real Estate 4.62% 41,630 3.0%
Retail Products and Services 9.8% 88,312 2.3%
Business Services 25.71% 231,151 1.7%
Personal Services 11.11% 100,151 1.8%
Total 901,093 2.0%

(Source: 2010 Franchsie Business Economic Outlook, prepared by

PriceaterHouseCoopers for the IFA)1

As above data shows that restaurants has gained the 2.1 % market share as compared with
last year performance.
Customer Satisfaction in Restaurant Industry

“Approximately 23% of the population eats one of the day's meals away from home on
working days. On days off, this percentage is doubled. It is foreseen that over the next
few years, the number of people eating meals outside the home will be even higher,
particularly in urban areas. These changes in eating habits can easily, if we are not
careful, unbalance our diet. It depends, mainly, on the choice and combination of what is
available and what we choose to eat for meals to balance this.”2

When a person moves to a restaurant he is predicting not to have only quality food on
affordable price, but also some others factors also influence his decision. There are some
other key variables also add dimensions in his choice which supports in decision making.
This study reveals the other dynamics which enhance the customer satisfaction. Now a
days,reastaurants are arranging food selection,décor,siiting arrangement,ingreidants and
affordability after a systematic study of customer demands and preferences.In this study
we will show how customer responds under the perspective of different variables keeping
in sight the variables.

This is the descriptive research. Questionnaire is used to collect data from different
customers. Our sample will be taken from twin cities of Rwalpindi and Islamabad. We
will conduct surveys through questionnaire of different age groups and professional
classes in which customer will provide us their inside. This question will help us to get
reliable results and useful findings. A questionnaire will be based on the customer
demographic information and pre selected variables. This research has a vital important
for the restaurants owners and management to follows these steps and apply these to get
their customer satisfied. Because customers are the life blood of every business.
Customer Satisfaction in Restaurant Industry

Literature Review:

In literature review we identify the already done research work done on the same aspect
of topic. There are many studies has taken out across the world to measure satisfaction of
the customer on different attribute but not some specific are finalized.

Quality plays a significant role in determining and influencing customer satisfaction [3].
There are many types of food service provider such as hotels, restaurants, canteens and
cafeterias. Service-based industries such as hotels and restaurants are spending a
tremendous effort to measure and improve the service quality of their business [4]. Each
one it specifically defined customer satisfaction which is common in all.

Service satisfaction is a function of consumers’ experience and reaction to a provider’s

behavior during the service encounter; it is a function of the service setting.[5]

In the research on same kind of topic, different framework has been used the model
developed by (Name of developer) to measure the level of satisfaction of the customer.

Model

In the about adopted model customer satisfaction primarily based on some attribute
subject to taste, quality, parking, menu pricing and bla bla etc.

Gathering of data will lead to a better understanding of the influencing level of the
attributes on customer satisfaction. The result of this study will not only contribute to the
awareness of the relationship between the variable but it will also direct manager in areas
for quality improvement to increase customer satisfaction. Through the statistical
analysis, a conclusion on the existence of a relationship between qualities attributes of a
food service provider and customer satisfaction will be more obvious.[6].This research
does not only guide to have better understanding on the influencing factors of customers
Customer Satisfaction in Restaurant Industry

satisfactions but in addition it help managers to improve the performance of their

organization.

The research conducted in Hong Kong by Kivela, Inbakaran and Reece (2000), analyzed
customer satisfaction factors based on five-dimensions which are first and last
impressions, service excellence, ambience excellence, food excellence and feeling
comfortable eating there and reservations and parking.[7]

Another research conducted at USA by Andaleeb and Conway describe that 3 main
factors that widely explained the satisfaction of customer in restaurant that are service,
quality, price, and food quality.[8]

Other studies have identified numerous factor that influence customer satisfaction with a
dining experience, including waiting time, quality of service responsiveness of front –line
employee, menu variety, food price, food quality, food-quality consistency, ambience of
the facilities, and convenience (Davis and Vollmann) 1990; Dube Renahgan, and Miller
1994; Kivela, Inbakaran, and Reece 2000; Sulek and Hensley 2004; lglesias and Yague
2004; and Andaleeb and Conway.[9]
Customer Satisfaction in Restaurant Industry

THEORETICAL FRAMEWORK

Responsiveness

Reliability

Assurance

Empathy

Tangibleness

On time delivery
Service Customer
Quality of food Quali
ty Satisfaction
Image of
Restaurant

Menu pricing
Independent variable
Environment Dependant variable

Parking

Flexibility

To carry out the study on “Customer Satisfaction in Restaurant industry of Rawalpindi and
Islamabad”, the above mentioned theoretical framework has been developed. Customer
satisfaction is taken as the dependent variable while Service quality is taken as independent
variable.

Dependent variable: Customer satisfaction.

Independent variable: Determinants of service quality i.e., On time delivery, Quality of food,
Image of restaurant, External environment, Location, Parking and Flexibility are taken as
independent variables.

Hypothesis
The hypothesis is made by keeping in view the relationship of service quality and customer
satisfaction
H1: Following elements of service quality have a positive impact on customer satisfaction in food
restaurant industry of Islamabad and Rawalpindi Pakistan.

1) Responsivness
Customer Satisfaction in Restaurant Industry

2) Reliability
3) Assurance
4) Empathy
5) Tangibleness
6) On time delivery
7) Quality of food
8) Image of restaurant
9) Menu pricing
10) Environment
11) Parking
12) Flexibility
The Methodology adopted to conduct the study of Impact of service quality on customer
satisfaction in restaurant industry of Rawalpindi and Islamabad Pakistan is based on Random
Sampling. The instrument used to conduct was study comprises of questionnaire. Due to time
constraints, Primary data was collected from 120 different regular visitors of restaurants of
Rawalpindi and Islamabad. There was no specific education level for respondents.
Customer Satisfaction in Restaurant Industry

RESULTS

When Linear Regression between dependent variable i.e, customer satisfaction and independent
variable i.e., factors of service quality, the value of R is 0.732 which shows a significant
relationship among them.

Results of current study represent the value of F as 10.291, which state the significant variation.
The significance level is 0.00 which is less than 0.05 which shows the table is significant.

To test H1, Correlation analysis was used to identify the variables, which influence customers'
satisfaction about service quality of restaurants of twin cities of Rawalpindi and Islamabad
Pakistan

When applied Pearson correlation (2-tailed) analysis on Responsiveness to the needs and Overall
customer satisfaction there is significant correlation at 0.01 is less than 0.05 so there is significant
relationship

When applied Pearson correlation (2-tailed) analysis on Reliability of services delivered and
Overall customer satisfaction there is significant correlation at 0.01 is less than 0.05 so there is
significant relationship

When applied Pearson correlation (2-tailed) analysis on Assurance to convey trust and confidence
and Overall customer satisfaction there is significant correlation at 0.05 is less than 0.05 so there
is significant relationship

When applied Pearson correlation (2-tailed) analysis on Empathy provided and Overall customer
satisfaction there is significant correlation at 0.01 is less than 0.05 so there is significant
relationship

When applied Pearson correlation (2-tailed) analysis on Tangible up to date range of physical
facilities and Overall customer satisfaction there is significant correlation at 0.01 is less than 0.05
so there is significant relationship

When applied Pearson correlation (2-tailed) analysis on time delivery and Overall customer
satisfaction there is significant correlation at 0.01 is less than 0.05 so there is significant
relationship

When applied Pearson correlation (2-tailed) analysis on Quality of food and Overall customer
satisfaction there is significant correlation at 0.01 is less than 0.05 so there is significant
relationship

When applied Pearson correlation (2-tailed) analysis on Image of restaurant and Overall customer
satisfaction there is significant correlation at 0.01 is less than 0.05 so there is significant
relationship

When applied Pearson correlation (2-tailed) analysis on Menu pricing and value and Overall
customer satisfaction there is significant correlation at 0.01 is less than 0.05 so there is significant
relationship
Customer Satisfaction in Restaurant Industry

When applied Pearson correlation (2-tailed) analysis on Clean and hygienic location and Overall
customer satisfaction there is significant correlation at 0.01 is less than 0.05 so there is significant
relationship

When applied Pearson correlation (2-tailed) analysis on Proper parking facilities and Overall
customer satisfaction there is significant correlation at 0.01 is less than 0.05 so there is significant
relationship

When applied Pearson correlation (2-tailed) analysis on Flexibility in services and Overall
customer satisfaction there is significant correlation at 0.01 is less than 0.05 so there is significant
relationship

DISCUSSION/FINDINGS

On the basis of the variables of the model described in theoretical frame work the all the
hypothesis are accepted because all shows significant relationship

CONCLUSION:

The study is based on the Impact of service quality on customer satisfaction in Restaurants of
twin cities of Rawalpindi and Islamabad Pakistan. All the variables have been checked and
accepted because it shows significant relationship. The data was gathered with the help of
questionnaire. The results were analyzed using the quantitative analysis including regression,
reliability and correlation analysis. With the help of these tests, the study proved to be valid and
significant. The Fast food restaurants must keep their services up-to-date and should be sincere
with the customers in delivering and focusing on what the customers actually want. In this way
they will remain in competition and will be able to grab and retain more and more customers.

REFERENCES:

[1] http://www.franchisedirect.com/top100globalfranchises/industrytrends/158/874/
[2] http://www.scribd.com/doc/29527331/Fast-Food-Trend-Among-Youth-2010

[3]Robinsons 1999.Measuring service quality:current thinking and future requirements.

Marketing intelligence and planning, 17,21-32.

[4]Gupta, S.,McLaughlin,E and Gomez, M 2007.Guest satisfaction and restaurant

performance.Cornell Hotel and Restaurnat Administration Quarterly,48,284

[5]Pun, K.F., and Ho, K.Y. 2001. Identification of service quality attributes
Customer Satisfaction in Restaurant Industry

for restaurant operations: a Hong Kong case. Journal of Managing

Service Quality, 11, 233-240. H. Poor, An Introduction to Signal
Detection and Estimation. New York: Springer-Verlag, 1985, ch. 4.

[6] http://www.waset.org/journals/ijhss/v5/v5-7-67.pdf

[7] Aigbedo, H., and Parameswaran, R. 2004. Importance-performance

analysis for improving quality of campus food service. International
Journal of Quality & Reliability Management, 21, 876-896

[8] http://www.waset.org/journals/ijhss/v5/v5-7-67.pdf

[9] http://www.entrepreneur.com/tradejournals/article/167388298_4.html
Customer Satisfaction in Restaurant Industry

ANNEXURE I
BAR CHARTS
Customer Satisfaction in Restaurant Industry
Customer Satisfaction in Restaurant Industry
Customer Satisfaction in Restaurant Industry
Customer Satisfaction in Restaurant Industry
Customer Satisfaction in Restaurant Industry
Customer Satisfaction in Restaurant Industry
Customer Satisfaction in Restaurant Industry

ANNEXURE II
TABLES

Model Summary

Adjusted R
Model R R Square Square Std. Error of the Estimate

1 .732a .536 .484 .558

a. Predictors: (Constant), Flexibility in services., Quality of food., Empathy provided to you,

Assurance to convey trust and confidence., Image of the Restaurant., Tangible: up-to-date range of
physical facilities., Menu Pricing and value, Responsiveness to the needs., Proper parking facility.,
On time delivery., Reliability of overall service delivery, Clean and hygienic location.
Customer Satisfaction in Restaurant Industry

ANOVAb

Model Sum of Squares df Mean Square F Sig.

1 Regression 38.504 12 3.209 10.291 .000a

Residual 33.362 107 .312

Total 71.867 119

a. Predictors: (Constant), Flexibility in services., Quality of food., Empathy provided to you, Assurance to
convey trust and confidence., Image of the Restaurant., Tangible: up-to-date range of physical facilities.,
Menu Pricing and value, Responsiveness to the needs., Proper parking facility., On time delivery., Reliability
of overall service delivery, Clean and hygienic location.

b. Dependent Variable: Overall satisfaction of service quality

Correlations

Overall
Responsiveness satisfaction of
to the needs. service quality

Responsiveness to the Pearson Correlation 1 .386**

needs. Sig. (2-tailed) .000

N 120 120

Overall satisfaction of service Pearson Correlation .386** 1

quality Sig. (2-tailed) .000

N 120 120

**. Correlation is significant at the 0.01 level (2-tailed).

Customer Satisfaction in Restaurant Industry

Correlations

Overall Reliability of
satisfaction of overall service
service quality delivery

Overall satisfaction of service Pearson Correlation 1 .400**

quality Sig. (2-tailed) .000

N 120 120

Reliability of overall service Pearson Correlation .400** 1

delivery Sig. (2-tailed) .000

N 120 120

**. Correlation is significant at the 0.01 level (2-tailed).

Correlations

Overall Assurance to
satisfaction of convey trust and
service quality confidence.

Overall satisfaction of service Pearson Correlation 1 .179*

quality Sig. (2-tailed) .050

N 120 120

Assurance to convey trust Pearson Correlation .179* 1

and confidence. Sig. (2-tailed) .050

N 120 120

*. Correlation is significant at the 0.05 level (2-tailed).

Customer Satisfaction in Restaurant Industry

Correlations

Variables

Overall
satisfaction of Empathy
Variables service quality provided to you

Overall satisfaction of service Pearson Correlation 1 .369**

quality Sig. (2-tailed) .000

N 120 120

Empathy provided to you Pearson Correlation .369** 1

Sig. (2-tailed) .000

N 120 120

**. Correlation is significant at the 0.01 level (2-tailed).

Customer Satisfaction in Restaurant Industry

Correlations

Overall Tangible: up-to-

satisfaction of date range of
service quality physical facilities.

Overall satisfaction of service Pearson Correlation 1 .268**

quality Sig. (2-tailed) .003

N 120 120

Tangible: up-to-date range of Pearson Correlation .268** 1

physical facilities. Sig. (2-tailed) .003

N 120 120

**. Correlation is significant at the 0.01 level (2-tailed).

Correlations

Overall
satisfaction of
service quality On time delivery.

Overall satisfaction of service Pearson Correlation 1 .424**

quality Sig. (2-tailed) .000

N 120 120

On time delivery. Pearson Correlation .424** 1

Sig. (2-tailed) .000

N 120 120

**. Correlation is significant at the 0.01 level (2-tailed).

Customer Satisfaction in Restaurant Industry

Correlations

Overall
satisfaction of
service quality Quality of food.

Overall satisfaction of service Pearson Correlation 1 .473**

quality Sig. (2-tailed) .000

N 120 120

Quality of food. Pearson Correlation .473** 1

Sig. (2-tailed) .000

N 120 120

**. Correlation is significant at the 0.01 level (2-tailed).

Correlations

Overall
satisfaction of Image of the
service quality Restaurant.

Overall satisfaction of service Pearson Correlation 1 .421**

quality Sig. (2-tailed) .000

N 120 120

Image of the Restaurant. Pearson Correlation .421** 1

Sig. (2-tailed) .000

N 120 120

**. Correlation is significant at the 0.01 level (2-tailed).

Customer Satisfaction in Restaurant Industry

Correlations

Overall
satisfaction of Menu Pricing and
service quality value

Overall satisfaction of service Pearson Correlation 1 .362**

quality Sig. (2-tailed) .000

N 120 120

Menu Pricing and value Pearson Correlation .362** 1

Sig. (2-tailed) .000

N 120 120

**. Correlation is significant at the 0.01 level (2-tailed).

Correlations

Overall
satisfaction of Clean and
service quality hygienic location.

Overall satisfaction of service Pearson Correlation 1 .567**

quality Sig. (2-tailed) .000

N 120 120

Clean and hygienic location. Pearson Correlation .567** 1

Sig. (2-tailed) .000

N 120 120

**. Correlation is significant at the 0.01 level (2-tailed).

Customer Satisfaction in Restaurant Industry

Correlations

Overall
satisfaction of Proper parking
service quality facility.

Overall satisfaction of service Pearson Correlation 1 .362**

quality Sig. (2-tailed) .000

N 120 120

Proper parking facility. Pearson Correlation .362** 1

Sig. (2-tailed) .000

N 120 120

**. Correlation is significant at the 0.01 level (2-tailed).

Correlations

Overall
satisfaction of Flexibility in
service quality services.

Overall satisfaction of service Pearson Correlation 1 .426**

quality Sig. (2-tailed) .000

N 120 120

Flexibility in services. Pearson Correlation .426** 1

Sig. (2-tailed) .000

N 120 120

**. Correlation is significant at the 0.01 level (2-tailed).