Customer Satisfaction In Food And Beverage Marketing Essay

Abstract

The definition of service quality and customer satisfaction has been the focus on theoretical research. Nowadays, there are many researches on service quality and customer satisfaction of tangible products, but a little of researches on service quality and customer satisfaction of intangible products. For the hospitality industry, which provides tangible products and intangible products, fine dining restaurant market competition is becoming increasingly fierce. It is necessary to strengthen the study on service quality and customer satisfaction in the fine dining restaurant markets. The purpose of this study is to evaluate service quality and customer satisfaction in the relationship between service quality and customer satisfaction based on the related theory. It is generally believed that the upgrading service quality directly led to the improved customer satisfaction. The fact is that customers with high satisfaction are not necessarily service quality, but dissatisfied customers are often because of service quality. This thesis proposed new points of view on the paradox. Meanwhile, the empirical researches were also conducted.

Both theoretical and empirical methods were used in the research. The methods of questionnaires collect in the fine dining restaurant in Sunway area. To investigate this issue, 150 tourists visiting Pyramid Shopping Mall in Sunway were be interviewed. Fine dining restaurant service quality and customer satisfaction will show formulate by analyzing main factors of measuring service quality by SERVQUAL. So that finding out the relationship between service quality and customer satisfaction.

It can help to control the current state of service quality and customer satisfaction so that lead to right direction for future work. These marketing strategies can help fine dining restaurant to improve service quality and customer satisfaction. At the same time, the marketing strategies can improve the quality of fine dining restaurant market share, which will help restaurant gain more profits with a little cost.

Key word: Service Quality, Customer Satisfaction, SERVQUAL, Fine Dining Restaurant

General Introduction

2.1 Research Background

The rapid development of hospitality industry and the arrival of the globalization is coming. For who is engaged in the the service marketing industry is providing more chances, otherwise, it is also providing amount of challenges. Service marketing scholars believe that the key to survival and success of modern hospitality industry strategy is to improve the service quality, that is the customer satisfaction.

As an important part of the designing of strategy and execution, the service markets must understand the customer’s perception of service quality and service value process. It is a basis element to improve the management level and make the profitability of the hospitality industry.

Nowadays, the hospitality industry in Malaysia has experienced tremendous growth, thanks to the booming travel and tourism trade. The hospitality industry will continue to offer copious commercial opportunities for the country and business alike. In 2010, tourist arrivals to Malaysia reached a now high of 24 million, it is the highest ever for the sixth straight year. The Tourism Ministry is targeting an increase of 25 million tourists visiting the country in 2011, with a project tourism revenue of RM60 billion (The Malaysia Insider, 2011). Furthermore, the United Nations World Tourism Organization (UNWTO) placed Malaysia in the top ten list in terms of tourist arrivals for 2009 ( Bernama, 2010). In line with the growing of tourists, the hospitality industry in Malaysia has also stepped up its development and upgrading programmes. Its commitment towards the industry is very encouraging, and has stirred many dining restaurant operators to strive harder in improving the quality of their service.

For studying the Food and Beverage industry is based on the most representative in the modern hospitality industry in the provision of services based industry. For the Food and Beverage industry, the service quality is an important competitive weapon. In the period of globalization, understanding the different behavior intention customer service quality perception and analysis of the relationship between the service quality and customer satisfaction. It is the most effective way of limited resources and establishment of market strategy.

This study explores the impact of process quality and outcome quality on customer satisfaction. Process quality is judged by customers during the process of fine dining restaurant services being performed, where outcome service quality is judged by customers after fine dining restaurant services have been performed. This study also investigates the extent to which such perceptions influence customer satisfaction. Secondly, this study examines the inter-relationships of customer satisfaction is related five Dimensions of SERVQUAL in the Food and Beverage industry. Furthermore, the mediating role of service quality and customer satisfaction in the Malaysian fine dining restaurant industry are evaluated.

All in all, for the study, the use of simple and feasible method for evaluation of the fine dining restaurant service quality and customers satisfaction. The survey methods used in the study of the relationship of service quality and customer satisfaction. The satisfaction of customers in each state of service quality questionnaire acts reveals the relationship between service quality and customer satisfaction of the food and beverage industry. There is a strong practical significance for the marketing of the fine dining restaurant.

2.2 Problem Statement

Following the income of the citizen, the fine dining restaurant have to improve the service quality to make customer satisfaction. With the development of the modern society, customer is willing to seek the high service quality during in the fine dining restaurant. So the basis of element is the clearly knowledge for the customer needs and customer wants to make sure the customer feel satisfy in hospitality industry. Nowadays, the customer consumption dining has not only meets the needs of basic needs, but want to get the unforgettable enjoyment. Therefore, the Food and Beverage managers must be careful, scientific market research or customer clue to find out the diverse needs of customers, not only to master the practical requirements of the customer, but also understanding of the potential demand. To forecast the development trend of food consumption, according to changes in customer demand resulting in business and constantly adjust the foods varieties and services. To improve service and provide customer of satisfactory service.

With the development of hospitality industry, the fine dining restaurant has to provide personalized service to get the satisfaction customer in fine dining restaurant. So as a manager in restaurant that should thoroughly understand the needs and preferences of each customer. According the different customer, to make a personalized service. To understand customer needs, so that the Food and Beverage manager through the computer to create a customer file. Thus, when the customer coming again, the waiter through the data and understand their special requirements and preferences. To provide target service to win new customer become a loyal customer of the fine dining restaurant.

Also, the customer word of mouth through their own past experience or friends and relatives and so on. It will make hotels and restaurants to formation of some expectations. So that the restaurant have to meet the requirement for the customer. Through the customer purchase and the process of purchase, the customer feels satisfaction and makes the loyal with the restaurant. The satisfaction customers tend to pay higher prices for their benefit, also tolerance the increasing price of product. This means that as long as we provide the high service quality, it will attract more customers, which can create more benefit for the hotel. The best is going beyond the expectation of customer. In order to give customers a good impression for fine dining restaurant.

Through the purchase and the behavior of the customer, it shows customers with high satisfaction are not necessarily service quality, but dissatisfied customers are often because of service quality. This thesis proposed new points of view on the paradox. So that, for the study, we should not only focus on how to match the service quality and customer satisfaction, but also focus on the satisfaction of consistency and integrity. To measure the customer satisfaction with the fine dining restaurant.

2.3 Research Questions

What factors influencing behavior of the customer satisfaction?

What are the main service quality dimension and their prioritization in the customer satisfaction of fine dining restaurant?

Is there any significance difference between customer satisfaction and their perception of service quality, based on the dimension of tangible, reliability, responsiveness, assurance and empathy?

Is there any significance relationship between service quality and customer satisfaction?

What are the relationship between service quality and customer satisfaction?

2.4 Research Objectives

The objectives of the research are to:

To identify the characteristic of service quality.

To define the attributes of service quality dimension of service quality from the customer satisfaction.

To identify the service quality dimension and their prioritization.

To determine the strength of the relationship between service quality and customer satisfaction.

To measure the service quality affects the customer satisfaction in fine dining restaurant.

2.5 Research Hypothesis

There is a significant relationship between staff providing good service quality impact positively to towards customer satisfaction.

There is a significant relationship between service quality dimension effect the customer satisfaction.

There is a significant relationship between impact positively towards customer satisfaction.

There is a significant relationship between the environment elegance impact positively towards customer satisfaction.

There is a significant relationship between the efficient and fast system impact positively towards customer satisfaction.

2.6 Conceptual Framework

Independent Variables Dependent Variables

Service Quality

1.Reliability

2.Assurance

3.Tangible

4.Empathy

5.Responsiveness

Customer Satisfaction

2.7 Significant of the study

This dissertation has both theoretical and practical rationales. On the theoretical level, this study will incorporate the hypothesis of service quality theory relating to five dimensions of service quality (reliability, assurance, tangible, empathy and responsiveness) to determine the impacts on the antecedents and behavioral outcomes of customer satisfaction. Service quality theory as a basic element to affect the customer satisfaction which has an important role hospitality industry. For the customer expectations and customer needs. While the customer life time value could be calculated on the basis of service quality, the professional and unique service style might ensure the quality of the delivery of personal service.

In addition, this study identifies the different segments of customer satisfaction in terms of service quality, customer expectation and perception. We can through the Service Quality Module to get the clearly understanding the content for the service quality. It is a key point to understand the customer needs and customer wants in the real hospitality industry. Also, it can build a loyalty relationship with customer. For stimulate the repurchase and consumption in fine dining restaurant. The findings of this study will definitely benefit our understanding of the constructs of service quality as a determinant for customer satisfaction in the fine dining restaurant in Kuala Lumpur.

In summary, this study has industrial and academic implications. Firstly, with regard to industry, this study can determine which types of service quality are most likely to suit for customer satisfaction. Secondly, it offers the practical and composite measurement if customer satisfaction in the hotel industry. Thirdly, this study develops the conceptual framework to help managers in the food and beverage industry to have a clear relationship between the service quality and customer satisfaction.

3. Literature Review

3.1 Service Quality

Service quality is defined that compare the customer expectations for the performance. A business with high service quality will meet customer needs and keep economically competitive. To improve service quality so that can increase economic competitiveness (Lewis and Booms 1983). According to Parasuraman et al., (1985, 1988) is mention that the service quality is the subjective comparison between customer’s expectation of service provider’s performance and their evaluation of the service the received ( Parasuraman et al, 1985, 1988).

A general definition of service quality that is the service should correspond to the customers’ expectations and satisfy their needs and requirements. (Asubonteng et al. 1996). The definition is so the central part of customer, but should not be interpreted as meaning that the service provider should always comply with the customer and his wishes. That it is the customer who decides what is good or bad quality does not mean that the customer is always right or that the customer can always fully communication or clear of thinking their needs and wishes. In order to also detect and understand non-verbalized customer needs, for the certain part, a useful communication for customer and an understanding of his situation are required. Satisfied customers spread the good news quickly, something which is satisfying for the employees and most likely also for the owners. Quality improvement can be regarded as a key step that is all participants are winners. This should be the point of departure for all quality development.

Service quality becomes more and more important to impact customer satisfaction and loyalty, it has strong relationship between customers’ expectations from the service which waiters’ provide and the service they are received by the waiters provide in real market (Caruana, 2002).

Through the literature review of quality, it is be found that the previous research is focus on measure and define the quality of tangible goods and products, so that the important sector is ignored. Gronroos (1990) has mentioned the product quality was linked to the technical specifications of products. Opposite view, Crosby (1979) as mentioned it the “fitness for use”.

For the Service quality in the hospitality industry, there are four unique elements are “intangibility; heterogeneity; inseparability; and perish ability.” (Bateson, 1977; Lovelock, 1981; Gronroos, 1990; Zeithaml and Bitner, 1996).

Service quality is highly dependent on the customer’s are related with the employees. The trust is always have the specific person than to the hotel (Thomasson, 1993). The item of trust between the staff is a primary for good relations with people. Especially in the hotel, the personnel is also link to their ability to solve the problem and handle the important situation.

3.2 Service Quality Model

Representation of the field of service quality research scholars who are Parasuraman,

Zeithaml and Berry are defined as inconsistencies between the service quality of a customer service expectations and actual acceptance and perception of service. (Parasuraman, Zeithaml & Berry, PZB, 1985, 1988). In addition, they also develop a theoretical model to measure the service quality and to evaluate the service quality. Under the service quality gap model shown that the perceived quality of service the needs of customers, the gap between expectations and actual acceptance and perceived service function.

Personal needs

Past experiences

Words of mouth communication

Expected service

Customer Gap

Perceived service

Customer

Service delivery (pre and post contact)

Marketer

External communications to customers

Gap 4

Gap 3

Gap 1

Translation of perceptions into service quality specifications

Gap 2

Management perceptions of customers expectations

Figure 1: Gap Model of Service Quality (Parasiraman, A et al. 1985)

There are five Gaps for measure and manage between service quality and customer

satisfaction, and theses five gaps also mention by Parasuraman,Zeithaml, Berry 1985.

Gap 1: is the distance between customer expectations and management perception.

The reason is the distance cause the operators do not understand what the customer really wants or what to expect.

Gap 2: is the establish between the service quality standards and the operators perception.

The reason is the distance cause of even the operators know what the customer wants, so does not know how to develop specific programs to achieve the goal.

Gap 3: is the gap between the service standards and match the service performance.

The reason is the staff not follow the service standards to serve the customer properly.

As a manager in fine dining restaurant who need to suit the customer experience that their organization currently delivers in order to make sure it lives up to the specific customers. Training employees in priority setting and time management and developing a good reward system.

Gap 4: is the gap between the delivery of the customer experience and communication the proper way to the customers.

The reason is the operators cannot using the performance levels match marketing promises. It is the direct reason to lead the customer dissatisfaction with the performance of restaurant.

Gap 5: is the gap between a customer’s perception of the experience and the customer’s expectation of the service.

The reason is that the customers’ expectations come from by word of mouth, their personal needs and their own past experiences. To evaluate the service quality is expectation or not.

For this study, the purpose of delighting customers so they remain satisfaction in spite of attractive competitive offerings. So that when the customer is seen as a final judge of the quality of service, manager play a key role in define expectations and measuring customer satisfaction.

3.3 Measuring Service quality by SERVQUAL

Parasuraman, Zeithaml and Berry in the basis of gap between the service quality model at 1985,1988,1991, they conducted focus group interviews with business executives and customer group of four categories of service areas. Developed on the basis of research results as use ten dimensions to measure the service quality. Lastly, there are five dimensions to measure the service quality. It is tangible, reliability, assurance, responsiveness and empathy dimensions. In order to measure customer service quality evaluation for applicate of the five dimensions and seven o’clock-scale developed the twenty two items of service quality measurements project, which is called SERVQUAL scale.

Utilize of SERVQUAL evaluation of quality of service must calculate the difference between customer perceptions and expectations services.

SERVQUAL Scores = Perception Scores (P) – Exception Scores (E)

Figure 2 : SERVQUAL of Ten Dimensions

Factors

Content

Ten Dimensions

(1985)

Tangible

Physical facilities and equipment

Reliability

Consistency reliable quality of service can properly perform

Responsiveness

willing to help customers and providing fast service attitude

Competence

Whether it has the necessary skills and knowledge to provide the required services

Courtesy

Services provided by the steady, respect, caring, and intimacy

Credibility

services provided by the credibility, integrity

Security

Freedom danger or suspicious circumstances

Communication

Service information described, to make it easier for customers to understand the nature of the service, and to listen to the voice of the customer

Access

The enterprise is accessible, the staff is easily accessible

Understanding/Knowing the customer

Efforts and willingness to understand customer needs

(Parasuraman et al.,1985)

Figure 3 : SERVQUAL of Five Dimensions

Factors

Content

Questionnaires Items

Five Dimensions

(1988)

Tangible

Physical facilities and equipment, staff and communicate with each other external form

1~5

Reliability

Convention services trust worthy can the ability to execute correctly

6~10

Assurance

Willing to help customers and provide fast service attitude

11~15

Responsiveness

The ability to enterprises with the ability of the staff, etiquette, integrity, security and transfer of these elements

16~20

Empathy

Businesses and staff showed concern, care and contact customer

21~25

(Parasuraman et al.,1988)

Brady & Cronin, (2001), proposed a multidimensional and hierarchical construct, in which service quality is explained by three primary dimensions; interaction quality, physical environment quality and outcome quality. Each of these dimensions consists of three corresponding sub-dimensions. Interaction quality made up of attitude, behavior and expertise; physical environment quality consisting of ambient conditions, design and social factors while the outcome quality consists of waiting time, tangibles and valence. According to these authors, hierarchical and multidimensional model improves the understanding of three basic issues about service quality: (1) what defines service quality perceptions; (2) how service quality perceptions are formed; and (3) how important it is where the service experience takes place and this framework can help manager as they try to improve customers’ service experiences Brady & Cronin, (2001, p.44).

According to the five elements, we can match to the service quality delivery. Firstly, for designing the service, customer needs are clearly identified. Before the customers are visiting the restaurant, they will have a reasonable expectation are setting. Service is easy to access, responsive, timely and reliable. Secondary, for implementing the service, it is consistent regardless of where or by who delivered. The service is simple to understand and receive. Also it will be most effective. Lastly, for assessing achievement, the quality of service is regularly reviewed. The customer have right of address for poor quality service. For the study, it is a practical program of continuous improvement for the hospitality industry in the future.

3.4 Customer Satisfaction

Customer satisfaction is a complex construct. It has been defined in various ways(Besterfield, 1994; Barsky, 1995; Kanji and Moura, 2002; Fecikova, 2004). Nowadays, researchers have argued that there is a difference between customer satisfaction as related to tangible products and as related to service experience. This difference is due to the tangible products and as related to service experiences. This difference is due to the internal intangibility and perishability of service, as well as the inability to separate production and consumption. Hence, customer satisfaction with services and with goods may derive from, and man be influenced, by, different factors and therefore should be treated as separate and different (Veloutsou et al., 2005).

Customer satisfaction is also based on the customer’s experience on a particular service encounter, (Cronin & Taylor, 1992) and also some authors think customer satisfaction is cumulative based on the overall evaluation of service experience (Jones & Suh, 2000). These highlight the fact that customer satisfaction is based on experience with service provider and also the result of the service.

Customer satisfaction is the key element to consider that is attitude, Yi, (1990). In the case of fine dining restaurant, there is some relationship the customer and the service provider and customer satisfaction will be based on the evaluation of several interactions between both parties. So that we will consider satisfaction as a part of overall customer attitudes towards the service provider that increase a number of measures (Levesque et McDougall, 1996, p.14).

Giese & Cote, (2000, p.15) is mention that there is not generic definition of customer satisfaction and after a study the various of definitions on satisfaction they came up with the following definition, “customer satisfaction is identified by a response (cognitive or affective) that pertains to a particular focus (i.e. A purchase experience and/or the associated product) and occur at a certain time (i.e. post- purchase, post-consumption)”. Form this definition, it is clear that the customer’s satisfaction is determined for his/her dining experience in the fine dining restaurant and this is supported by Cicerone et al., (2009, p.28) and Sureshchander et al., (2002, p.364) who believe customer’s level of satisfaction is determined by their past experience.

According to the previous literature, research for this model supports the conceptualization of perceived quality as a separate construct, different from satisfaction (Bitner & Hubbert,1994). Moreover, many authors make it a point to highlight that service quality and satisfaction are different constructs (Bitner,1990; Binter and Hubbert, 1994; Boulding et al., 1993; Parasuraman et ai., 1998; Taylor and Baker, 1994). Oliver (1980) identified satisfaction and dissatisfaction in terms of the disconfirmation of consumers’ expectation. A positive disconfirmation leads to customer satisfaction and a negative disconfirmation leads to customer dissatisfaction. Peter and Olson (1994) argued that the amount of dissatisfaction is dependent on the extent of disconfirmation and the consumer’s level of involvement with the product and the problem solving process.

Furthermore, it highlights the construct of a “global” level of satisfaction (the overall service satisfaction) in contrast to the construct of a component level of satisfaction (the encounter service satisfaction). Yi (1990) mentioned that customer’s satisfaction is influenced by two factors which is experiences and expectations with service performance.

Two additional issues that need to be clarified when researching customer satisfaction in service is whether satisfaction is conceptualized as facet (attribute specific) or as overall (aggregate); and whether it is viewed as transaction-specific (encounter satisfaction) or as cumulative (satisfaction over time) (Hoest and Knie-Andersen, 2004).

However, according to Levesque and McDougall (1996) satisfaction is conceptualized as an overall, customer attitude towards a service provider. Similarly, Andreassen and Lindestad (1998) claimed that customer satisfaction is the accumulated experience of a customer’s purchase and consumption experience. It was therefore, client satisfaction construct in this paper will be measured through overall satisfaction towards the service.

3.5 The Relationship between Service quality and Customer satisfaction

According to Sureshchandar et al., (2002, p. 363), customer satisfaction should be seen as a multi dimensional construct just as service quality meaning it can occur at multi levels in an organization and that it should be operational along the same factors on which service quality is ope-rationalized.

Parasuraman et al., (1985) suggested that when perceived service quality is high, then it will lead to increase in customer satisfaction. He supports that fact that service quality leads to customer satisfaction and this in line with Saracana & Rao, (2007, p.436) and Lee et al., (2000, p.226) who acknowledge that customer satisfaction is based upon the level if service quality provided by the service provider.

According to Negi, (2009, p.33), the idea of linking service quality and customer satisfaction has existed for a long time. He carried a study to investigate the relevance of customer- perceived service quality in determining customer overall satisfaction in the context of mobile service (telecommunication) and he found out that reliability and network quality (an additional factor) are the key factors in evaluating overall service quality but also highlighted that tangibles, empathy and assurance should not be neglected when evaluating perceived service industry (mobile service) and we think it is very important to identify and evaluate those factors which contribute significantly to determination of customer-perceived service quality and overall satisfaction.

Fen & Lian, (2005, p.59-60) found that both service quality and customer satisfaction have a positive effect on customer’s re-patronage intentions showing that both service quality and customer satisfaction have a crucial role to play in the success and survival of any business in the competitive market. This study proved a close link between service quality and customer satisfaction.

Su et al., (2002,p.372) carried a study to find out the link between service quality and customer satisfaction, from their study, they came up with the conclusion that, there exist a great dependency between both constructs and that an increase in one is likely to leas to an increase in another. Also, they pointed out service quality is more abstract than customer satisfaction because, customer satisfaction reflects the customer’s feelings about many encounters and experiences with service firm while service quality may be affected by perceptions of value (benefit relative to cost) or by the experiences of others that may not be as good.

A study carried out by Magi & Julander, (2009, p.33-41), among fine dining restaurant in Sunway showed a positive relationship between perceived service quality and customer satisfaction. It was proven that customer satisfaction results fron high perceived service quality and this makes the customer satisfaction. However, it could be possible that a satisfied customer must not necessarily become a loyal customer.

Chapter 3 Research Methodology

3.1 Introduction

The aim of this study is to test the factors which affect customer satisfaction and the relationship between service quality and customer satisfaction in food and beverage industry with in Kuala Lumpur district. Qualitative approach through in-depth interviews is considered the best method for the data collection process, Babbie,(2008). In addition, this chapter involves presenting and motivating the choice of method of collecting and analyzing data, form both a theoretical and practical point view, compared to the characteristics of this technique are well known for requiring a substantial amount of time, effort, and cost and restrict form collecting large amount od data. Therefore, considering these constraints, we use quantitative approach as an option because it save time and the ability to contact more respondents, Babbie,