Table of Contents

Executive Summary................................................................................................................................. 1
Introduction ............................................................................................................................................ 2
Restaurant Industry in India.................................................................................................................... 2
Service Quality (Literature review) ......................................................................................................... 3
Factors influencing Restaurant Services ................................................................................................. 7
Methodology........................................................................................................................................... 8
Results ..................................................................................................................................................... 8
Conclusion ............................................................................................................................................. 11
References ............................................................................................................................................ 12
Executive Summary

The purpose of this study was to find out service quality dimensions which customers expect
in the restaurant industry. The study examines the expectations that customers have towards
restaurants which in turn influences their decision in selecting a restaurant for dining. The five
service quality dimensions were initially broken down into factors. An online survey was
conducted to rank these factors on the basis of importance. The results of the survey were
again built into service dimensions to analyse the findings. Based on the analysis, “Assurance”
and “Reliability” dimensions emerged as the two most expected service parameter. Further
“Food Freshness” and “Safe transaction” were the two most important parameter under
“Assurance” dimension. The findings are expected to help the restaurant owners to address
the expectation and improve satisfaction level of their customers.

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Introduction

One of the most popular instrument to ascertain service quality is SERQUAL. As SERVQUAL is
the most utilized model in service quality research and applications, it is important to analyze
how well the SERVQUAL structure can be applied to restaurant services. Originated in 1988
basic perceived service quality is the difference between perceived service and expected
service.
Five dimensions of service quality are tangibles, reliability, responsiveness, assurance,
empathy. Tangibles will include things like physical facility neatness or visually appealing.
Reliability will include time delay, interest and error free. Assurance will include behavior of
employee, employee knowledge. Empathy will include attention given to individual customer,
attention to specific need etc.
Purpose of this study is basically investigating service quality dimensions in restaurants and
factors that will affect customer satisfaction. Fundamental factors contributing to the
customer satisfaction in restaurants include food quality, hygiene, healthiness, physical
provision, layout, furnishing, cleanliness, atmosphere, comfort, service received, speed,
friendliness, and care during the dining experience.

Restaurant Industry in India

Indian restaurant industry is highly fragmented with around 1.5 million outlets worth
Rs.75,000 crores and is growing at an annual rate of 7%. Out of 1.5 million outlets more than
3,000 outlets comes in organized segment. Annual growth rate of organized sector is 16% and
expected to cross Rs. 22,000 crore. Main reasons for continuous growth are increasing
working people, rapid consumerism, rising disposable income.
Organized sector comprising foodservice chains accounted for only 17% of industry.
Remaining consisted of unorganized single located foodservice outlets. Organized sector is
expected to account 37% market till 2016.

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 Restaurant Indusrty Average number of times
Dining Out
50
40
30
20
10
0
Bangkok Jakarta Mumbai
Organised Sector
Unorganised Sector Series 1

Indians dine much less than population in other countries. Whereas individuals in Mumbai
dines around 6 times in a week there peers in Bangkok, Jakarta dined from 14 to 44 times a
month. India spent $12 annually on dining out compared to $64 in china and around $1868
by Americans. So low per capita spend create tremendous growth opportunity.

Service Quality (Literature review)

All the service providers want to know what customers really care about. Service quality, Price
and product quality are some of the good guess.

But for service providers, customers care most about service quality. We have been through
lots of research and statistically valid research. Of course, providers can always ask customers.
But having the lack of money, skills and time constraints, we better took the leading research
for that understanding.

5 Dimensions of Service Quality

Zeithaml, Berry and Parasuraman found that there are five dimensions which customers use
when evaluating the service quality parameters. They named their survey instrument
SERVQUAL.

In similar terms, if service providers get these dimensions right then customers will be highly
satisfied and thus loyalty will follow. This overall will result in service excellence. According to
what’s important to them.

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The five SERVQUAL dimensions are:

TANGIBLES  Appearance of physical facilities, equipment, personnel, and communication

materials

RELIABILITY  Ability to perform the promised service dependably and accurately

RESPONSIVENESS  Willingness to help customers and provide prompt service

ASSURANCE  Knowledge and courtesy of employees and their ability to convey trust and
confidence

EMPATHY  Caring, individualized attention the firm provides its customers

Note: Not All Dimensions Are Equal

A service provider should understand that all dimensions are important to customers, but
some are preferred more than others dimensions.

Service providers need to know which parameters have more priorities than others in various
service sectors so as to avoid ambiguity in servicing to customer. At the same time they cannot
focus on only one dimension and neglect the other dimension completely.

In their research, SERVQUAL research showed dimensions importance was asked to

customers to assign 100 points across all five dimensions.

Here’s their importance to customers.

Results were as follow:

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RELIABILITY (Just do it)

As the description says “Just do it”, i.e. do what you say you are going to do. Most of the time
customers want to count on their providers as reliability factor matters a lot to customer.
Service providers always have yearned to find out what customers really value. As per the
result it’s three times more important to be reliable than have new equipment or flashy dress
of the staff.

At the same time this doesn’t mean you can have dirty looking uniforms and only focus only
on reliability. Service providers have to do both. But as per the priorities assigned providers
should put their first and best efforts at making the service reliable.

RESPONSIVENESS (Do It Now)

Any customer query should be handled instantly, quickly, promptly, rapidly and immediately
in a best possible way.

Delaying for a day to return a call or email reply waiting doesn’t make it. If customers are
chronically slow in getting back to providers, responsiveness is still more than one-fifth of
their service quality assessment.

Service providers benefit by establishing service level agreement for things like returning
phone calls, replying to emails and responding on-site. Whether its 5 minutes, 50min, or a
day. Its important customers must feel providers are responsive to their requests in a
convincing manner. Not just emergencies, but everyday responses too.

ASSURANCE (Know What You are Doing)

Service providers are usually expected to be the professionals of the service they’re catering
to customers. SERVQUAL researches have shown that it’s important to communicate that
expertise to customers. If a service provider is highly skilled, but customers don’t see that
then their confidence in that provider will be less. Therefore, overall assessment of that
provider service quality will be lower.

RAISE CUSTOMER AWARENESS OF YOUR EXPERTISE

Service providers must communicate their expertise and competencies before they do the
work which can be learnt from Benihana of Tokyo where chefs prepare the food in front of

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their customer. This can be done in many ways that are repeatedly seen by customers as
follow:

 Include certification logos on emails, letters & reports

 Display industry certifications on patches, badges or buttons worn by employees
 Put certifications into posters, newsletters and achievement

By communicating their skills, knowledge and attributes; the providers can help manage
customer expectations and influence their service quality assessment in advance.

EMPATHY (Care about Customers as much as the Service)

Customers may not feel provider employees care about them during delivery of the service
and thus it hurts customer assessments of provider’s service quality. Providers’ service
delivery can be as important as how it was done. Provider employees should be trained how
to interact with customers and their end-users by proving interpersonal trainings. Even a brief
session during initial orientation helps. Anything to help them understand their impact on
customers’ assessment of service quality.

TANGIBLES (Making intangibles into tangible)

Even though this is the least important dimension, appearance and ambience matters.

Service providers will still want to make certain their employees appearance, uniforms,
cleanliness, areas on-site (closets, service offices, etc.) equipment look good. The danger is
for providers to make everything look sharp, and then fall short on reliability or
responsiveness.

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Factors influencing Restaurant Services

S.no Factors Description

1 Physical Environment Interior, Furniture, Colors & Crockery

2 Cleanliness Cleanliness of floor, food & crockery

3 Quick service Order taking & serving time

Cooperation & Behavior of

4 Persuasive, Polite,Mature & friendly
staff
Space between tables & chairs, no interference of
5 Privacy
staff
Must be according to the food stuff & service
6 Price
quality
Peaceful, noise free, wide parking area and not
7 Location of restaurants
far away from prime locations

8 Food Taste & Quality Good unique taste and quality ingredients

Regular customer has to get some preferential

9 Preferential treatment
treatment over other no regulars
No informal activities of couples (customers), no
Appropriate environment for bad language used by other people or staff,
10
family something special for children and attractive
environment for gathering
How much the restaurant is famous or preferred
11 Brand image
by other people
Number of foods in the menu and also in various
12 Menu
quantities

13 Lady/Gents waitresses Polite, humble nature

Other people inside Behavior of the people, number of people

14
restaurants (customers)

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Methodology

The purpose of this study is to examine the level of expectations that customers have
regarding the restaurant service. Based on this, an online questionnaire is developed to
collect the data from the students of IIM Kashipur. The survey comprises of different sections
measuring the service quality expectations for attributes such as food quality, restaurant
display, staff behaviour, menu, and level of service. These attributes represent the five
dimensions of service quality: tangibles, reliability, responsiveness, assurance and empathy.
The sample survey form can be seen in Exhibit 1. Some modifications are made to the service
quality dimensions in order to gauge the expectations of customers in an indirect way. The
modified survey consisted of 27 different factors instead of 22 statements. The 27 service
quality factors are measured on a 5-point Likert-type scale ranging from “1 = Not Important
At All” to “5 = Absolutely Essential”. For example, how important is the cleanliness factor in
selection of a restaurant, the respondent has to rank this factor on individual basis.

Results

The results are better than they were expected. A total of 72 responses are collected from
the students of IIM Kashipur. Since all the students fall under the 20-29 age group, the results
can be assumed to be biased i.e. the results from this survey will relate to the expectations of
the youth generation. The results may vary according to different age groups. But since our
respondents lie in 20-29 age category, we will limit the discussion to this category only.

The survey consisted of 27 factors of service quality which indirectly reflect the service quality
dimensions. Since these factors are not complete statements, hence it is difficult to interpret
the expectations of customers by simply studying the results. The results can be seen in Table
1. In order to relate the factors to the service dimensions, we have converted them or in a
way linked them to the items/statements that are considered within those dimensions. For
example the “neatness” factor is converted into the statement “Employees are neat
appearing” which fall under the tangible dimension of service quality. Similarly the other
statements have been built around factors mentioned in survey.

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 Table 1. Survey Form Results

S.No. Service Quality Factors Score

How are the following factors important in selecting a restaurant?
1 Cleanliness 4.44
2 Ambiance 3.83
3 Comfort 4.03
4 Seating arrangement 3.46
5 Food variety 4.28
6 Operating hours 3.61
How will you rate the following factors expected from the restaurant
staff?
7 Neat-appearing 4.08
8 Responsive 4.38
9 Knowledgeable about the menu items 4.15
10 Gives personal attention 3.88
11 Courteous attitude 4.07
12 Quick in service delivery 4.26
13 Understands customer needs and wants 3.97
14 Handles special requests 3.86

How will you rate the following factors based on services expected?
15 Prompt and quick 4.13
16 Serves in the time promised 4.31
17 Error-free 4.13
18 Consistent and dependable 4.19
19 Accurate billing 4.57
20 Quick correction of wrong service 4.35
How important are the below criteria for desired food quality?
21 Freshness 4.65
22 Presentation 3.82
23 Taste 4.79
Which of the following factors are important for Menu?
24 Attractive 3.36
25 Readable 4.15
26 Neat and clean 4.11
27 Info about ingredients, method of preparation 3.26

After converting all the factors into the statements, we can now relate them to service quality
dimensions. The results are been shown in Table 2. Some of the modifications that have been
made to obtain the SERVQUAL dimensions are-

 Some factors are combined into a single statement. For example, “Physical facilities
are appealing” is built by averaging “cleanliness” and “comfort” factor.

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  Statement are indirectly related to the factor. For example “records are error-free”
relate to “error- free” factor for the service expected.
 Few statements are related to the same factor.

This exercise of converting factors to dimension statement was totally different. At the start
it was difficult to relate the factors, but soon it was noted that these factors represent
dimensions altogether.

Table 2. Service Quality Dimensions

S.No. Dimensions Score
Tangibles (four items)
1 Restaurant has appropriate seating arrangement 3.46
2 The physical facilities are visually appealing (clean and comfortable) 4.10
3 Employees are neat-appearing 4.08
4 Materials associated with the service (menu) are visually appealing 3.88
Reliability (five items)
5 Restaurant does what it promises to do in certain time 4.31
6 The Billing is accurate and error-free 4.57
7 The restaurant maintains the consistency in services 4.19
8 Services are provided at the time the restaurant promises to do 4.13
9 The records are error-free 4.13
Responsiveness (four items)
10 If something goes wrong, employees correct that 4.35
11 Employees give prompt service to customers 4.13
12 Employees if busy, is still responsive' 4.38
13 Employees respond to customer’s special requests 3.86
Assurance (four items)
14 The food is served fresh 4.65
15 Customers feel safe in their transactions 4.57
16 Employees are consistently courteous 4.07
17 Employees have the knowledge to answer customer’s questions 4.15
Empathy (five items)
18 Restaurant gives individual attention to the customer 4.19
19 Employees give personal attention to customers 3.88
20 Restaurant understands specifics needs of its customers 3.97
21 Restaurant has customer’s interest at heart 3.88
22 Operating hours are convenient to all customers 3.61

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Conclusion

The main objective of this study was to identify the key service quality dimensions that
customers expect from the restaurant industry. There were many limitations to this study.
First of all, the sample size could have been more varied in terms of age group as it only
presented the expectations of younger generation. Secondly, the expectations could have
been matched with the perceptions of the customers by conducting surveys in different
restaurants. But due to lack of good restaurants in Kashipur, the perception part could not be
found. It would have led to gap identification between the expected and perceived service
quality in terms of four different gaps could be analysed. But none the less the results for
expected service quality are also of great use.

This study used a different approach to find out the customers’ expectations. The dimensions
were factored and those factors are used to form the results. After observing the results, it is
found that “Assurance” is the strongest dimension that customers expect in this industry.
After assurance, “Reliability” emerged as the second most expected dimension and the other
factors in the order of expectation are “Responsiveness”, “Empathy”, and “Tangibles”. The
average score for dimensions is mentioned in table 3.

Table 3. Service Quality Dimensions

Dimensions Average Score
Tangibles 3.88
Reliability 4.26
Responsiveness 4.18
Assurance 4.36
Empathy 3.91

Studying further, it is found that, the most expected parameter among the dimensions is the
“Freshness of the food”. It is the most rated dimension that means customers had high
expectations for food quality. After that, safe transactions and Employee responsiveness are
the next most expected concern of the customers. These parameters fall under the
“Assurance” dimension of service quality.

It is important for restaurants operators to pay more attention to providing friendly services
that makes customer feel valued and assured for. This would certainly improve the perception
of customers towards that restaurant and will help in achieving customer satisfaction.

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References

1. Services Marketing - Integrating Customer Focus across the Firm by Valarie A

Zeithami, Mary Jo Bitner, Dwayne D Gremler, Ajay Pandit
2. “Perceived service quality in restaurant services: Evidence from Mauritius”, Prabha
Ramseook-Munhurrun, University of Technology, Mauritius
3. “Measuring service quality in city restaurant settings using DINESERV scale”, Suzana
Markovic, Faculty of Tourism and Hospitality Management in Opatija, University of
Riijeka, Croatia
4. “Applicability of SERVQUAL in restaurants: an exploratory study in a Portuguese
resort”, Vera Patricio

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