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Factors Influencing Customer Satisfaction at a Fast Food Hamburger Chain:

The Relationship Between Customer Satisfaction and Customer Loyalty

by

Jahangir M. Kabir

A dissertation submitted to the faculty of

Wilmington University in partial fulfillment

of the requirements for the degree of

Doctor of Business Administration

Wilmington University

February 2016
Factors Affecting Customer Satisfaction at a Fast Food Hamburger Chain:

The Relationship Between Customer Satisfaction and Customer Loyalty

by

Jahangir M. Kabir

I certify that I have read this dissertation and that in my opinion it meets the academic

and professional standards required by Wilmington University as a dissertation for the

degree of Doctor of Business Administration.

Signed ____________________________________________________________

Amy L. Danley Ed.D., Dissertation Committee Chair

Signed ____________________________________________________________

Robert W. Rescigno, Ed.D., Dissertation Committee Member

Signed ____________________________________________________________

Gregory A. Warren, Ed. D., Dissertation Committee Member


Dedication

To my family, particularly my wife Farida, son Junaid, and daughter Zara.

Thank you for putting up with me for so long.

To Wilmington University, the DBA Program, and particularly Cohort 13 for your

support and friendship.


Acknowledgements

To my Dissertation Committee
Table of Contents

List of Tables ...................................................................................................................... x

List of Figures ................................................................................................................... xii

Abstract ............................................................................................................................ xiii

CHAPTER 1 ....................................................................................................................... 1

BACKGROUND ................................................................................................................ 1

Statement of the Problem ................................................................................................ 7

Significance of the Study ................................................................................................ 8

Purpose of the Study ....................................................................................................... 8

Research Questions and Hypotheses .............................................................................. 9

Research Question 1 ................................................................................................... 9

Research Question 2. ................................................................................................ 11

Conceptual Model ......................................................................................................... 12

Definitions of Key Terms ............................................................................................. 15

Limitations .................................................................................................................... 20

Declaration of Potential Bias ........................................................................................ 21

Summary ....................................................................................................................... 21

CHAPTER 2 ..................................................................................................................... 23

LITERATURE REVIEW ................................................................................................. 23

Customer Satisfaction Models ...................................................................................... 25

Satisfaction.................................................................................................................... 30

Loyalty .......................................................................................................................... 31

The Relationship Between Customer Satisfaction and Customer Loyalty ................... 33


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Restaurant Industry ....................................................................................................... 37

Fine dining restaurant ............................................................................................... 37

Casual dining restaurant ............................................................................................ 37

Fast casual restaurant ................................................................................................ 38

Quick service restaurant or fast food. ....................................................................... 39

Restaurant Industry Service Components ..................................................................... 39

Service quality .......................................................................................................... 40

Food quality .............................................................................................................. 49

Physical environment ................................................................................................ 59

Convenience. ............................................................................................................. 64

Customer-facing technology ..................................................................................... 66

Price and value .......................................................................................................... 70

Order accuracy .......................................................................................................... 73

Speed of service ........................................................................................................ 75

Summary ....................................................................................................................... 79

CHAPTER 3 ..................................................................................................................... 81

METHODOLOGY ........................................................................................................... 81

Research Design ........................................................................................................... 82

Strengths of the Study ................................................................................................... 85

Weaknesses of the Study .............................................................................................. 86

Population and Sample ................................................................................................. 88

Ethical Issues ................................................................................................................ 89

Validity and Reliability ................................................................................................. 90


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Validity ......................................................................................................................... 91

Reliability...................................................................................................................... 91

Survey Instrument ......................................................................................................... 92

Data Collection and Analysis ....................................................................................... 93

Research Questions and Statistical Techniques ............................................................ 95

Assumptions.................................................................................................................. 96

Summary ....................................................................................................................... 97

CHAPTER 4 ..................................................................................................................... 98

RESULTS ......................................................................................................................... 98

Data Collection ............................................................................................................. 99

Data Screening ............................................................................................................ 100

Demographic Variables .............................................................................................. 101

Research Question 1 ................................................................................................... 106

Correlation. ............................................................................................................. 108

Regression ............................................................................................................... 109

Findings ...................................................................................................................... 113

Research Question 2 ................................................................................................... 116

Race......................................................................................................................... 116

Gender ..................................................................................................................... 121

Income..................................................................................................................... 121

Age .......................................................................................................................... 125

Marital status ........................................................................................................... 128

Time of day ............................................................................................................. 130


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Delivery methods. ................................................................................................... 131

Geographic region ................................................................................................... 132

Findings ...................................................................................................................... 139

Research Question 3 ................................................................................................... 139

Findings ...................................................................................................................... 141

Additional Findings .................................................................................................... 142

Summary of Key Findings .......................................................................................... 143

CHAPTER 5 ................................................................................................................... 145

DISCUSSION, IMPLICATIONS, RECOMMENDATIONS, LIMITATIONS, and

FUTURE RESEARCH ................................................................................................... 145

Summary of Key Research Findings, Implications, and Recommendations .............. 145

Research Question Number 1—Findings and Implications ....................................... 146

Research Question Number 1—Recommendations ................................................... 149

Order accuracy ........................................................................................................ 149

Food quality ............................................................................................................ 154

Price and value ........................................................................................................ 159

Service quality and suggestion selling. ................................................................... 161

Research Question Number 2—Key Findings, Implications, and Recommendations 162

Research Question 3—Key Findings, Implications, and Recommendations ............. 164

Limitations and Direction for Future Study ................................................................ 164

Conclusion .................................................................................................................. 167

References ....................................................................................................................... 170

Appendix A ..................................................................................................................... 193


ix

Appendix B ..................................................................................................................... 210

Appendix C ..................................................................................................................... 212


x

List of Tables

Tables

1. Cronbach’s Alpha-Pilot Test………………………..……..……………………..88

2. Frequency of Data Collection.………………………………………………….100

3. Demographics of the Respondents……………………………………………...101

4. Independent Variables—Mean and Standard Deviation………………………..106

5. Correlation—Dependent and Independent Variables…………………………..108

6. Satisfaction Model—R, R2 and Adjusted R2 …………………………………..110

7. Satisfaction Model—df, F and Significance.…………………………………...110

8. Satisfaction Model—Coefficients………………………………………………111

9. Mean and Standard Deviation—Race…………………………………………..117

10. ANOVA—Race………………………………………………………………...118

11. Tukey HSD—Race……………………………………………………………..119

12. Mean and Standard Deviation—Gender……………………………………….121

13. Mean and Standard Deviation—Income……………………………………….122

14. ANOVA—Income……………………………………………………………...122

15. Tukey HSD—Income………………….……………………………………….123

16. Mean and Standard Deviation—Age…..……………………………………….125

17. ANOVA—Age….……………………………………………………………...126

18. Tukey HSD—Age….………………….……………………………………….127

19. Mean and Standard Deviation—Marital Status…..…………………………….128

20. ANOVA—Marital Status…..…………………………………………………..129

21. Tukey HSD—Marital Status…..……………………………………………….128


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22. Mean and Standard Deviation—Time of the Day…..………………………….131

23. Mean and Standard Deviation—Service Delivery Method…..………………...132

24. Mean and Standard Deviation—Geographic Regions…..……………………...132

25. ANOVA—Geographic Regions………………………………………………..133

26. Tukey HSD—Geographic Regions…………………………………………….134

27. Pearson Correlation—Satisfaction and Loyalty………………………………...141

28. Developmental Needs…………………………………………………………..143


xii

List of Figures

Figure

1. Conceptual model ………………...…………………………………………14


xiii

Abstract

In this study of a regional fast food hamburger chain (subject hamburger chain), the

relationship between customer satisfaction and its independent variables of service

quality, food quality, physical environment, convenience, customer-facing technology,

price and value, order accuracy, and speed of service are explored. Data for this

quantitative cross-sectional study was collected from 1,042 customers at the subject

hamburger chain. The results show that there is a statistically significant relationship

between customer satisfaction and each of the independent variables. The results also

show that there is a statistically significant difference in satisfaction based on race,

income, age, marital status, and geographic location while there are no statistically

significant differences in satisfaction based on gender, time of visit, and service delivery

method. Furthermore, there is a statistically significant positive association between

satisfaction and loyalty. Regression analysis reveals that order accuracy, speed of service,

food quality, price and value are the most important predictors of satisfaction at the

subject hamburger chain. As a result of the findings, the subject hamburger chain should

focus on filling orders correctly, serve customers with speed, maintain food quality, and

keep the price competitive to have positive impact on satisfaction. Satisfaction and

loyalty are shown to be positively associated so an increase in satisfaction would result in

an increase in loyalty.

Keywords: Customer satisfaction, customer loyalty, relationship between satisfaction and

loyalty, service quality, food quality, physical environment, convenience, customer-

facing technology, price and value, order accuracy, speed of service, fast food, quick

service restaurant, and restaurant industry.


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CHAPTER 1

BACKGROUND

The restaurant industry in the United States is large and touches nearly every

American household with its products and services (Andaleeb & Conway, 2006).

According to the National Restaurant Association (NRA, 2015), restaurant industry sales

are expected to reach a record high in 2015 of $709.2 billion, over 14 million employees,

and one million locations, the second largest private employment sector in the United

States. Additionally, the NRA projects that the United States’ restaurant industry is

expected to create 1.7 million new jobs over the next 10 years, with the total employment

reaching 15.7 million by 2025 (NRA, 2015). Because of its considerable size and impact,

the restaurant industry in terms of customer satisfaction is explored in the current study.

There are several classifications of restaurants in the United States based on the

services and products offered. Generally, restaurants fall into four categories: fine dining,

casual dining, fast casual, and quick service or fast food. Fine dining restaurants are often

categorized as destination restaurants that charge above median price for meals and

provide attentive service focused on a high level dining experience for customers (Arora,

2012). Casual dining restaurants grew in popularity during the 1980s and became one of

the most common type of establishments in the restaurant industry (Rivera, DiPietro,

Murphy, & Muller, 2008). This category promotes quick meals and good service at a cost

less expensive than fine dining in a family friendly atmosphere (Arora, 2012). Fast casual

restaurants have a similar structure to quick service restaurants, but with a focus on

higher quality of food options and an atmosphere similar to the casual dining segment

(Ryu, Han, & Jang, 2010). Quick service restaurants are also known as fast food as they
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focus on providing food in a quick self-service atmosphere at a reasonable price (Arora,

2012). The focus of the current research is the fast food industry. In order to understand

the fast food industry today, one has to look at the history of its development.

The fast food industry influences many aspects of our society from pop culture to

politics to dietary trends and has a rich, colorful history (Aronica, 2014). Long before

White Castle, McDonald’s, Burger King, or KFC, there was Horn and Hardart’s coin-

operated automats serving hot and fresh meals with speed and efficiency; Horn and

Hardart’s quickly grew to become the world’s largest restaurant chain and created the

foundation for modern fast food chains (Klein, 2012). During the 1950s, the automats

struggled as high inflation pushed commodity prices higher and higher (Klein, 2012). The

coin-operated machines were no longer efficient or practical, quality declined, and the

fast food chains, such as White Castle, Burger King and McDonald’s, hatched by the

automats began to make them obsolete (Klein, 2012).

The pursuit of the American dream was the inspiration for the rise of the fast food

industry here in the United States. Aronica (2014) also stated that the founders of the

most successful fast food chains, such as White Castle, McDonald’s, Burger King,

Wendy’s, Taco Bell, KFC, Popeye’s, Subway, Dunkin’ Donut, Sonic Drive-In,

Domino’s, Arby’s, Pizza Hut and Chick-fil-A, built these mega empires based on the

pursuit of the American dream and, in the process, changed the way Americans eat and

dine forever. Even though the idea of fast food came in the 1920s with the opening of

White Castle restaurants, the massive expansion in the scale of the industry came in the

1950s with the advent of America’s love for cars, the development of major new
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interstate highways, and the expansion of suburban communities (Afzal, Nafees, & Khan,

2014).

According to Aronica, even though White Castle, founded by Bill Ingram in

1921, was the first quick service restaurant chain in the United States, it was McDonald’s

that started the fast food revolution. The novel and efficient system developed by Ray

Kroc, the new owner of McDonald’s, in the 1950s inspired many entrepreneurs to open

restaurants, namely Keith J. Kramer and Matthew Burns, founders of Burger King in

1953; Carl Karcher, founder of Carl's Jr. in 1941; Glen Bell, founder of Taco Bell in

1954; and James Collins, the founder of Kentucky Fried Chicken in 1952 (Aronica,

2014). Thus, while White Castle started the modern fast food revolution in the United

Sates, it was McDonald’s that pushed it to the next level, which eventually became a

national and global phenomenon.

Fast food is a mature industry with a highly competitive market environment

within the industry. For most of its history, the quick service restaurant industry in the

United States has been characterized by rapid and dependable growth, but, more recently,

the growth has slowed and some analysts believe that the growth of the fast food industry

has peaked due to market saturation (Patton, 2014). As patronage levels off, quick service

restaurants must evolve to compete in a take-share market as they fight with each other

for market shares ("Future of LSR: Fast-food & Fast-casual Restaurants," 2015).

Additionally, a recent National Restaurant Association study (2014) revealed

intense competition within the group. According to the NRA study, quick service

restaurant operators say competition is most intense within their own segment, and 88%

of the quick service restaurant operators say competing with other quick service
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restaurants posed a significant or moderate challenge for their business in 2013.Thus, it is

clearly evident that the competition within the segment is fierce.

Additionally, fast food faces competition from the other segments of the

restaurant industry, most notably from the rapidly growing fast casual segments and

grocery stores. The fast casual restaurants continue to outpace the quick-service operators

(Green, 2011). Fast food restaurants are competing not only with other fast food

restaurants but also with many quick casual and casual dining restaurants, such as Baja

Fresh, Chili’s, Outback Steak House, and increasingly present ready-to-eat meals

available in most grocery stores (Ottenbacher & Harrington, 2009). Dominant fast food

brands such as McDonald’s, Subway, and Starbucks are facing a challenge by the leading

fast casual restaurants—the fast casual segment experienced an 8% rise in guest count,

whereas it was flat at quick service restaurants (Team, 2014). Team (2014) also

commented that the average customer count per company-owned restaurant at

McDonald’s, the sales leader in the quick service restaurant segment, was diminishing by

1.3% in 2012 and 2013 whereas for a successful fast casual restaurant such as Chipotle,

the average guest count rose by 5% in 2012 and 2.3% in 2013.

The hamburger chain, which is under study in the current study, is no exception

and is facing competition from fast casual restaurants, grocery stores, and other fast food

chains. The environment in which the chain operates is fiercely competitive. The subject

restaurant chain in this study is a regional fast food hamburger chain with operations in

the Midwest and the East Coast. Through the remainder of the study, the studied

hamburger chain will be referred to as the subject hamburger chain. Currently, it is faced

with years of decline in transactions and just a modest sales increase. It is important to
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note that the minimal sales increase was mainly due to price increase rather than an

increase in transactions. Thus, the subject hamburger chain is in search of ways to

increase sales via increasing transactions.

According to industry experts and academic researchers, one effective strategy to

deal with the declining market share consists of delivery of products and services which

will satisfy customers and, thereby, lead to the success and growth of the industry

(Mamalis, 2009). Over the years, many researchers have examined the impact of

customer satisfaction on overall performance of the restaurants and found it to be a

significant contributor. The rapid growth in the service industry has increased consumer

consciousness, with fierce market competition propelling customer satisfaction as a

primary indicator to measure corporate operational performance (Hsieh & Yeh, 2015). As

a result, customer satisfaction is important for the subject hamburger chain just as it is

important in any other organization. The current study will explore many aspects of

customer satisfaction at the subject hamburger chain and make a set of recommendations

to the decision makers at the chain.

So, what is customer satisfaction? Customer satisfaction has been defined as the

post consumption evaluative judgment of a consumer concerning a specific product or

service (Gundersen & Heide, 1996). However, the design and implementation of a

strategy based on customer satisfaction cannot be successful unless managers at the

subject hamburger chain first determine how customers perceive its products and services

(Mamalis, 2009). Over the years, many researchers (Arora, 2012; Dube, Linganiso, &

Karodia, 2015; Haghighi, Dorosti, Rahnama, & Hoseinpour, 2012; Harrington,

Ottenbacher, Staggs, & Powell, 2012; Sumaedi & Yarmen, 2015; Swimberghe &
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Wooldridge, 2014; Wu, 2013) studied numerous variables of customer satisfaction in the

fast food industry to understand, explain, and predict customer satisfaction. The future

growth of the subject hamburger chain will depend on its ability to understand those

variables and the ways in which they affect satisfaction presents a unique opportunity to

identify the factors that influence customer satisfaction at the subject hamburger chain.

Understanding those factors will aid strategic decision-making to allocate scarce

resources at the subject hamburger chain. Therefore, the investigation of customer

satisfaction factors at the subject hamburger chain is important for its effective

management.

How do fast food restaurants do in customer satisfaction? The simple answer is

not that good. Even though 95% of consumers said that customer satisfaction is an

important consideration in making restaurant related choices (NRA, 2014), quick service

restaurant chains do not do well in customer satisfaction. According to a 2013 Emphatica

Quick Service Restaurant Benchmark Study, only 47.57% of customers are satisfied with

their visits within the segment. The lowest is the hamburger chain with 42% while the

highest is 52% for the sandwich chain ("Study: Burger chains dominate in quick service

restaurant industry," 2013). It is important to note that the studied chain is a hamburgers

chain. The same Emphatica study also found that the likelihood of a return visit increases

from 20% to 81% when customers report a higher level of satisfaction, and this

significant change in customer satisfaction for a quick service restaurant can mean the

difference between stagnancy and growth ("Study: Burger chains dominate in quick

service restaurant industry," 2013).

Similar statistics were cited 20 years ago by Stevens, Knutson, and Patton (1995).
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According to Stevens et al., 91% of a restaurant's dissatisfied customers will never come

back, and they will tell 8-10 others about their negative experience. Thus, measuring

customer satisfaction is important for the subject hamburger chain, which conducts

customer satisfaction surveys based on a few high level variables that include order

accuracy, drive-thru performance, price and value, service, friendliness, speed of service,

and interior cleanliness. It, however, ignores the attributes that contribute to each of those

high level variables. Also, satisfaction surveys at the subject hamburger chain do not

consider other important factors—customer-facing technology, such as social media

(Facebook, Twitter and Instagram), online ordering, smart phone app, order conformation

board, digital menu board, and convenience in terms of hour of operation, location,

parking availability, and ease of access. So, there is a clear need to conduct an in-depth

study of customer satisfaction at the subject hamburger chain based on aforementioned

variables impacting customers’ experience.

Statement of the Problem

No in-depth customer satisfaction study has been done at the subject hamburger

chain, and a review of the current literature showed that, in the quick service restaurant

industry, there are gaps in the analysis of customer satisfaction—satisfaction in the terms

of service quality, food quality, physical environment, convenience, customer-facing

technology, price and value, order accuracy, and speed of service. The current study will

fill the void, adding to the knowledge in the field by considering factors that were not

included in previous studies.

Customer satisfaction is important, as it could be the difference between

stagnancy and growth for the subject hamburger chain. The significance of this study to
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the decision makers at the subject hamburger chain is that they will understand which

factors most impact customer satisfaction. Understanding the determinants of customer

satisfaction is important for strategic planning and allocating scarce resources. It is also

important for tactical day-to-day operations of each restaurant belonging to the subject

hamburger chain, as it will give guidance to the frontline managers by helping them focus

on areas of importance and concern to the customers.

Significance of the Study

The subject hamburger chain is faced with years of decline in customer visits and

modest sales increase. It has been facing fierce competition from other fast food chains,

fast casual chains, and grocery stores. On top of this, food cost, labor cost, and other

fixed and variable expenses are rising while customers with limited discretionary income

allocated toward food away from home are demanding more in terms of service quality,

food quality, physical environment, convenience, customer-facing technology, price and

value, order accuracy, and speed of service. One of the best ways to deal with declining

market share is to understand the factors attributable to customer satisfaction. The subject

hamburger chain does not conduct comprehensive studies to understand the factors

affecting customer satisfaction. Thus, the subject hamburger chain is facing ferocious

competition, declining market share, and lack of a comprehensive mechanism to

understand customers’ needs, wants, and desires.

Purpose of the Study

The main purpose of the current empirical study is to identify and quantify the

most important factors influencing customer satisfaction at the subject hamburger chain.

It will analyze a large number of variables, such as service quality, food quality, physical
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environment, convenience, customer-facing technology, price and value, order accuracy,

and speed of service. The second purpose of the study is to explore whether or not there

are any statistically significant differences among demographic variables of race, gender,

income, age, marital status, service delivery methods (dine in, drive-thru and take out),

time of visits (breakfast, lunch, dinner and late night), and geographic locations on

customer satisfaction at the subject hamburger chain. The third and final purpose of the

study is to determine the relationship between customer satisfaction and customer loyalty

at the subject hamburger chain.

Research Questions and Hypotheses

This framework of the current study will answer three specific research questions

and 10 related hypotheses:

Research Question 1. Which variables related to dining at the subject hamburger

chain significantly influence customer satisfaction? The current study is designed to

identify the statistically significant variables of customer satisfaction at the subject

hamburger chain. Eight independent variables will be considered – service quality, food

quality, physical environment, convenience, customer-facing technology, order accuracy,

price and value, and speed of service. Eight hypotheses related to eight independent

variables will be tested to answer this question:

Hypothesis 1 – Service Quality and Customer Satisfaction

H10: There is no statistically significant relationship between customer

satisfaction and service quality at the subject hamburger chain.

H1A: There is a statistically significant relationship between customer satisfaction

and service quality at the subject hamburger chain.


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Hypothesis 2 – Food Quality and Customer Satisfaction

H20: There is no statistically significant relationship between customer

satisfaction and food quality at the subject hamburger chain.

H21: There is a statistically significant relationship between customer satisfaction

and food quality at the subject hamburger chain.

Hypothesis 3 – Restaurant Environment and Customer Satisfaction

H30: There is no statistically significant relationship between customer

satisfaction and restaurant environment at the subject hamburger chain.

H31: There is a statistically significant relationship between customer satisfaction

and restaurant environment at the subject hamburger chain.

Hypothesis 4 – Convenience and Customer Satisfaction

H40: There is no statistically significant relationship between customer

satisfaction and convenience at the subject hamburger chain.

H4A: There is a statistically significant relationship between customer satisfaction

and convenience at the subject hamburger chain.

Hypothesis 5 – Technology and Customer Satisfaction

H50: There is no statistically significant relationship between customer

satisfaction and technology at the subject hamburger chain.

H5A: There is a statistically significant relationship between customer satisfaction

and technology at the subject hamburger chain.

Hypothesis 6 – Price/Value and Customer Satisfaction

H60: There is no statistically significant relationship between customer

satisfaction and price/value at the subject hamburger chain.


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H6A: There is a statistically significant relationship between customer satisfaction

and price/value at the subject hamburger chain.

Hypothesis 7 – Order Accuracy and Customer Satisfaction

H70: There is no statistically significant relationship between customer

satisfaction and order accuracy at the subject hamburger chain.

H7A: There is a statistically significant relationship between customer satisfaction

and order accuracy at the subject hamburger chain.

Hypothesis 8 – Speed of Service and Customer Satisfaction

H80: There is no statistically significant relationship between customer

satisfaction and speed of service at the subject hamburger chain.

H8A: There is a statistically significant relationship between customer satisfaction

and speed of service at the subject hamburger chain.

Research Question 2. Which demographic variables significantly influence

customer satisfaction at the subject hamburger chain? Race, gender, income, age, marital

status, service delivery method, time of visit, and geographic region will be analyzed and

explored. One hypothesis will be tested to answer this question.

Hypothesis 1 – Demographics and Customer Satisfaction

H10: There is no statistically significant difference among demographic groups in

terms of customer satisfaction at the subject hamburger chain.

H1A: There is a statistically significant difference among demographic groups in

terms of customer satisfaction at the subject hamburger chain.

Research Question 3. To what extent are customer satisfaction and customer

loyalty related? The current study will explore the relationship between customer
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satisfaction and customer loyalty at the subject hamburger chain.

Hypothesis 1 – Satisfaction and Loyalty

H10: There is no statistically significant relationship between customer

satisfaction and customer loyalty at the subject hamburger chain.

H1A: There is a statistically significant relationship between customer satisfaction

and customer loyalty at the subject hamburger chain.

Conceptual Model

Transaction specific model is a good fit to answer the research questions and test

the related hypotheses. Teas (1993) introduced the transaction specific model and later

Parasuramon, Zeithaml, and Berry (1994) expanded the model, explaining overall

customer satisfaction in terms of service quality, product quality, and price. Using this

model, Andaleeb and Conway (2006) emphasized that the products and service offering

for the quick service restaurant can be viewed as a mixture of services and products; as a

result, customers are likely to consider specific aspects of the transaction. The current

study attempts to explain customer satisfaction at the subject hamburger chain by basing

it on variables that affect specific aspects of products and services that are offered at the

subject hamburger chain.

The transaction specific model defines satisfaction as the customer’s evaluation of

his or her experience with, and reactions to, a particular product transaction, episode, or

service encounter (Olsen & Johnson, 2003). Advantages of this model include its ability

to capture complex psychological reactions that customers have to a product or service-

provider’s performance related to satisfaction on a given occasion (Oliver, 1999), and it

allows companies to better track changes in performance that result from internal changes
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and quality improvements (Olsen & Johnson, 2003).

The customer satisfaction model developed in this study is based on the

transaction specific model, which will examine the impacts of service quality, food

quality, physical environment, convenience, customer-facing technology, price and value,

order accuracy, and speed of service on customer satisfaction. The model will also

attempt to determine the impacts of demographic variables of race, gender, income, age,

marital status, service delivery methods (dine in, drive-thru and take out), time of visits

(breakfast, lunch, dinner and late night), and geographic locations on satisfaction. Finally,

the model will examine the relationship between customer satisfaction and customer

loyalty. The model assumes that service quality, food quality, physical environment,

convenience, customer-facing technology, price and value, order accuracy, and speed of

service impact customer satisfaction at the subject hamburger chain. The model also

assumes that aforementioned demographic variables impact customer satisfaction at the

subject hamburger chain. Finally, the conceptual model assumes that there is a

statistically significant positive relationship between customer satisfaction and customer

loyalty at the subject hamburger chain. This conceptual model developed in this study is

being named as Kabir Satisfaction Model for the Quick Service Restaurant (KSM for

QSR). Figure 1 depicts the ‘KSM for QSR’ that is based on the transaction specific

model.
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Figure 1. Kabir Satisfaction Model for Quick Service Restaurant (KSM for QSR)

‘KSM for QSR’ is conceptualized based on the transaction specific model to

answer the research questions and test the related hypotheses in the present study.

According to the ‘KSM for QSR’, Hypotheses 1-8 for research question one will explore

the relationship between the dependent and independent variables. Additionally,

Hypothesis 1 for research question two will explore the differences in satisfaction at the

subject hamburger chain based on demographic variables. Finally, Hypothesis 1 for


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research question three will explore the relationship between customer satisfaction and

customer loyalty at the subject hamburger chain.

Definitions of Key Terms

Many unique terms explain the current study and the ‘KSM for QSR’ model. The

definitions provided in this section should help the readers to understand those terms in

the context of the current study exploring customer satisfaction at the subject hamburger

chain:

Casual dining restaurant. Casual dining restaurants charge less than fine dining

restaurants with a focus on faster service than fine dining and less attention to ambiance.

They grew in popularity during the 1980s, becoming one of the most common types in

the restaurant industry (Rivera et al., 2008). Casual dining restaurants are those that may

have one of the following characteristics: do not recommend or take reservations, focus

on quick order and service, use no tablecloths, and are less expensive than fine dining

(Arora, 2012). Chili’s, Red Lobster, Ruby Tuesday’s, and Olive Garden fit into this

segment (Arora, 2012; Rivera et al., 2008).

Convenience. Convenience refers to the lack of difficulty to a customer in finding

a restaurant that is well suited to his or her needs. Easy access, location, hours of

operation, parking facility, and transportation are some factors that can make a restaurant

more convenient. According to the National Restaurant Association (2014) in its

Restaurant Industry Forecast, 72% of consumers consider convenience and 65% consider

easy parking when choosing a quick service restaurant. Small conveniences can make a

big difference (Knutson, 1988). Thus, convenience is an important factor of customer

satisfaction, and the principal aspects of convenience are store location, parking,
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transportation, hours of operations (Hosseini, Jayashree, & Malarvizhi, 2014) and

distance (Wood & Browne, 2006).

Customer-facing technology. Customer-facing technology in the ‘KSM for

QSR’ model refers to those customer-facing technologies that contribute to the overall

experience of customers, such as smart phone apps, online ordering, Wi-Fi connection,

social media (Facebook, Twitter, and Instagram), etc. According to the NRA 2014

Restaurant Industry Forecast, 21% of adults consider technology when choosing a quick

service restaurant. Benefits of customer-facing technology include improved customer

convenience, increased control, better speed of service, reduced processing cost,

increased volume and revenue, and improved service and food quality (Kimes, 2008). In

today’s supercharged, global, competitive landscape, harnessing the power of technology

is essential to gain competitive advantage.

Customer loyalty and satisfaction. Despite the absence of a generally accepted

measure to represent it, customer loyalty has grown in importance as the key to many

firms’ financial performance and survival (N. S. Terblanche & Boshoff, 2010) because

customer satisfaction has strong impact on customer loyalty in restaurant settings (Arora,

2012; Haghighi et al., 2012; Oliver, 1999; Swimberghe & Wooldridge, 2014). Many

researchers have found the relationship between customer satisfaction and customer

loyalty to be statistically significant. The relationship between satisfaction and loyalty is

a positive one as well. Thus, if the satisfaction goes up at a restaurant, the loyalty goes up

as well.

Fast casual restaurant. Fast casual restaurants fall between fast food and casual

dining restaurants, focusing on better quality of food than quick service restaurant and
17

faster service than casual dining. Fast casual restaurants have a similar structure to quick

service restaurants but with a focus on higher quality foods and an atmosphere similar to

casual dining restaurants (Ryu et al., 2010). The price structure at the fast casual is also

higher than the fast food restaurant segment. Restaurants that typically fit in this category

include Panera Bread, Chipotle, Panda Express, Zaxby’s, and Five Guys (Green, 2011).

Fine dining restaurant. Fine dining restaurants focus on the details of customer

service, high quality food, and interior design to make a visit memorable at a high price

point. Fine dining includes restaurants with characteristics such as a destination restaurant

that recommends reservations, use table cloths, has generally an above median price

range, and has staff that is attentive to the customer’s dining experience to ensure the

highest level of satisfaction and overall experience (Arora, 2012). Uncle Ben’s Steak

House is an example of fine dining restaurant in New York City.

Food quality. Food quality in the current study refers to the quality

characteristics of the food, such as taste, temperature, food safety, healthy menu options,

etc. Food quality is an important factor of customer satisfaction and loyalty in the fast

food restaurant industry (Haghighi et al., 2012; Harrington et al., 2012; H. S. Kim, Joung,

Yuan, Wu, & Chen, 2009; Sumaedi & Yarmen, 2015; Susskind & Chan, 2000).

According to the National Restaurant Association (2014), 65% of adults consider healthy

menu option when choosing a quick service restaurant. Food quality has many

attributes—presentation, variety, healthy options, taste, freshness, and temperature

(Namkung & Jang, 2007).

Loyalty. Loyalty simply refers to the future repurchase intention of customers

from the same restaurant. A strong commitment to repurchase a product or service in the
18

future is a rebuy of the same brand or brand series, despite the potential or actual

environmental effects or marketing efforts by the rivals for changing the customer’s

buying behavior (Oliver, 1999). The basis of customer loyalty is that customers want to

recreate good memories. If they feel good about their experience, they will come back,

and if they feel really good, they will tell others to eat at the same restaurant (Knutson,

1988). A customer is loyal to a business when he or she returns to the organization for

repeat purchases, shares positive experiences with friends and family, and recommends

friends and family to support the business establishment.

Order accuracy. Order accuracy refers to filling the orders accurately. Receiving

the order as placed is an important factor of customer experience in the fast food

restaurant industry (Bienstock, Mentzer, & Bird, 1997; Mentzer, Flint, & Hult, 2001). A

missing item from an order annoys customers, and restaurants ought to pay attention to

accurately fill an order.

Physical environment. Environment refers to the décor, cleanliness, seating

arrangements, and design of restaurants. Physical environment of restaurants is an

important factor of customer satisfaction in the fast food restaurant industry; thus,

restaurants should pay attention to design, color, and proper layout of tables and chairs

(Haghighi et al., 2012; Susskind & Chan, 2000). According to NRA (2014), 60% of

consumers consider whether the restaurant is children and family friendly while 54%

consider décor and atmosphere of the restaurant to be important for satisfaction. Paying

attention to specific details, such as cleanliness (Knutson, 1998) and smell (Hosseini,

Jayashree, & Malarvizhi, 2014), is also important for the restaurant industry. Thus, an

inviting and welcoming atmosphere is an important contributing factor to the satisfaction


19

of customers.

Price and value. Price refers to the amount paid for the food while value is the

estimated monetary worth of the service and products. Value is the total perceived benefit

received from a transaction. Price is an important factor of customer satisfaction in the

fast food restaurant industry, and it denotes the total value that is paid by a customer for a

product or service (Haghighi et al., 2012). According to the NRA (2014), 85% of adults

consider price and value when choosing a quick service restaurant.

Quick service restaurant or fast food. The fast food segment, which is the focus

of the current study, strives for quick and convenient food at the lowest price point. Fast

food restaurants are those that provide quick food, reasonable price, self-service, and

quick turnaround (Arora, 2012). During the 1960s when the fast food restaurant industry

was being introduced, efficiency and timeliness became the primary driving factors of the

business (Rivera et al., 2008). Restaurants that are often included in this category include

McDonald’s, Wendy’s, Taco Bell, KFC, White Castle, and Starbucks (Arora, 2012).

Satisfaction. Satisfaction is the customers’ evaluation of his or her experience

with, and reactions to, a particular product transaction, episode, or service encounter

(Olsen & Johnson, 2003).

Service quality. Service quality in this study refers to the qualitative

characteristics of a service encounter at a fast food restaurant. It is an important factor of

customer satisfaction in the fast food restaurant industry (Andaleeb & Conway, 2006;

Haghighi et al., 2012; Susskind & Chan, 2000). Service quality is described as the

difference between expectation and actual performance (Parasuraman, Zeithaml, &

Berry, 1988). According to the NRA (2014), 87% of adults consider good service when
20

choosing a quick service restaurant. A genuine smile, a warmhearted hello, sincere

interaction, suggestive selling (Knutson, 1988), and courteous, knowledgeable employees

are important in making customers happy. Intensifying competition and other market

forces led many services and retail businesses, including fast food restaurants, to seek

profitable ways to differentiate them, and one such strategy is the delivery of high service

quality, which appears to be a prerequisite for success, if not survival.

Speed of service. Speed of service refers to the time that a fast food restaurant

takes to serve customers. Typically, the clock starts when customers arrive at the

restaurant, and the clock stops when customers receive the food. Customers do not like to

wait more than 30 seconds in line to pay for their food as they consider this to be a waste

of time, and time spent waiting always seems four times longer than it really is (Knutson,

1988). Speed of service is connected to repeat visits at fast food restaurants (Choi &

Sheel, 2012). Therefore, speed of service is an important factor of customer satisfaction

at the subject hamburger chain.

Limitations

As stated earlier, fine dining, casual dining, fast casual, and fast food are all

component parts of the restaurant industry. The current study examines customer

satisfaction factors at only one fast food hamburger chain and ignores the other types of

restaurants. Since the subject hamburger chain is in operation only in the East Coast and

the Midwest, the study ignores the rest of the United States and, more importantly, the

worldwide fast food market. On top of this, the subject hamburger chain has restricted

data collection to only 4 weeks due to operational issues and possible interferences with

its own internal customer satisfaction survey.


21

The survey was concluded only via Internet, and, thus, it ignores the customers

who lack access to the Internet. If the survey was available in hardcopy and via phone, it

would have been more inclusive, and the results could have been more generalized.

Besides, the population may not be adequately represented because certain age and

income groups use the Internet more than others.

Another limitation of the study is that it focuses on utilitarian aspects of dining

and ignores the hedonic aspects as investigated by Arora (2012). Arora (2012) found a

strong correlation of emotion and sensual delight to customer satisfaction. Kesten (1997)

and Richardson, Shepard, and Elliman (1994) indicated that faith and ethnicity can

contribute to food choices and the consequent satisfaction that food service users

experience. The current study does not consider the impacts of emotion, sensual delight,

religion and ethnicity as suggested by Arora, and Kesten and Richardson et al.

Declaration of Potential Bias

The researcher of the current study has been working in the fast food industry for

the past 25 years. Although it may be considered a strength, there might be a chance of

bias, especially when something was against his belief. It is also important to mention

that he has been working for the subject hamburger chain for the past 25 years.

Summary

Chapter 1 has given an introduction to the United States restaurant industry as a

whole, followed by an overview of the quick service restaurant industry and, finally, has

come to focus on the subject hamburger chain addressing the challenges it is facing. It

has identified the dependent and independent variables. The dependent variable is

customer satisfaction and customer loyalty, and there are eight independent variables—
22

service quality, food quality, physical environment, convenience, customer-facing

technology, price and value, order accuracy, and speed of service. Each of the eight

independent variables except speed of service has multiple attributes. The three research

questions and 10 related hypotheses have also been discussed. All terms have been

defined. Finally, Chapter 1 has reviewed the purpose, significance, and limitation of the

study along with the problem statement and the declaration of potential bias.

Chapter 2 will examine the fast food restaurant industry in general, the

independent and dependent variables, and the ‘KSM for QSR’ model in detail. It will

provide an extensive review of the literature from 2000 to 2015 that are specifically

relevant to customer satisfaction in the restaurant industry to show the prevailing gap in

the literature.
23

CHAPTER 2

LITERATURE REVIEW

Chapter 1 introduced the conceptual framework—the ‘KSM for QSR’ model,

which is based on the transaction specific model, research questions, related hypotheses,

the dependent variable of customer satisfaction, and the independent variables of service

quality, food quality, physical environment, convenience, customer-facing technology,

price and value, order accuracy, and speed of service. Now, Chapter 2, the literature

review, investigates the existing knowledge related to these concepts and the ‘KSM for

QSR’ model. A literature review is a written summary of journal articles, books, and

other documents that describe the past and present information on a subject matter

(Creswel, 2008). Thus, this chapter will review customer satisfaction related empirical

studies conducted across different segments of the restaurant industry. This study is

designed to answer three research questions.

The first research question asks, Which variables, related to dining at the subject

hamburger chain, significantly influence customer satisfaction? The “KSM for QSR’

model is designed to identify statistically significant variables of customer satisfaction at

the subject hamburger chain. Eight variables and eight hypotheses are being considered

to answer this question. The second question asks, Which demographic variables

significantly influence customer satisfaction at the subject hamburger chain?

Demographic variables of race, gender, income, age, marital status, service delivery

method, time of visit, and geographic location will be explored. One hypothesis will be

tested to answer this question. And the final question asks, To what extent are customer

satisfaction and customer loyalty related? The “KSM for QSR’ model will explore the
24

relationship between customer satisfaction and customer loyalty at the subject hamburger

chain.

The primary objective of Chapter 2 is to examine the relationship between

satisfaction and its independent variables, based on existing literature, and establish the

need to further research this relationship at the subject hamburger chain. Chapter 2 will

also examine the relationship between satisfaction and loyalty in the restaurant industry

to establish the need to test this relationship at the subject hamburger chain, which is

serving as the setting for this study. In order to achieve these goals, searches are carried

out for journal articles, research documents, dissertations, trade journal articles, and peer

reviewed journal articles to gather information in the context of the restaurant industry

related to the ‘KSM for QSR’ model, research questions, hypotheses, dependent

variables, and independent variables. Then, the articles were examined in order to

identify the variables that have an impact on customer satisfaction in the restaurant

environment and that explored the relationship between customer satisfaction and

customer loyalty.

To gather this information, searches are executed via Wilmington University

Online library and Internet searches through Google Scholar and Google. The online

databases at Wilmington University that served as the backbone of the searches are Ebsco

Host, Academic Search Premier, Business Source Complete, Sage Journals Online,

Springer Link, and WorldCat. These searches were limited to peer reviewed journal

articles, theses, and dissertations. Google Scholar was used to locate scholarly articles

while Google was used to locate industry journals, business periodicals and other relevant

sources. The key words used in these searches were customer satisfaction model,
25

transaction specific model, SERVQUEL, DINESERVE, satisfaction, loyalty, relationship

between satisfaction and loyalty, restaurant industry, fine dining, casual dining, fast food,

quick service restaurant, determinants of customer satisfaction in restaurant industry,

service quality, food quality, physical environment, convenience, customer-facing

technology, price and value, order accuracy, and speed of service.

Customer Satisfaction Models

To answer the research questions and test the hypotheses, the transaction specific

model is being used because it relates to the research questions much deeper than others.

Thus, it is important to understand the rationale behind this decision. To have this

understanding, SERVQUEL, DINESERV, and transaction specific models are explored

in this study. A comparison of these models makes the case for the transaction specific

model as the best fit for the current study.

The SERVQUEL model was introduced by Parasuraman et al. (1988) to assess

customer satisfaction in service and retail environment. Parasuraman et al. (1988) defined

satisfaction in this model as the difference between the expectation of the customer and

perception of the actual service. The authors in this model used a 22-item instrument to

measure service quality based on five dimensions: tangibility, reliability, empathy,

responsiveness and assurance. Tangibility construct consisted of physical facilities,

equipment, and appearance of employees (Parasuraman et al., 1988). Parasuraman et al.

(1988) defined reliability as the ability to perform the promised service dependably and

accurately while empathy was defined as caring and individualized attention to

customers. Responsiveness was referred to the willingness to help customers and provide

prompt service while assurance was referred to the knowledge and courtesy of employees
26

and their ability to inspire trust and confidence (Parasuraman et al., 1988).

Parasuraman et al. (1988) collected data for the study from four firms of retail and

service oriented businesses. In this study, the Cronbach’s alpha values were reported for

each individual firm for the constructs. The tangibility construct contained four questions

with Cronbach’s alpha values ranging from .52 to .64 (Parasuraman et al., 1988). The

reliability construct contained five questions with Cronbach’s alpha values ranging from

.74 to .84 (Parasuraman et al., 1988). The empathy construct also had five questions with

Cronbach’s alpha values ranging from .71 to .80 (Parasuraman et al., 1988). The

responsive construct contained four questions and had Cronbach’s alpha values ranging

from .69 to .76 (Parasuraman et al., 1988). Assurance also had four questions with

Cronbach’s alpha values of greater than .80 (Parasuraman et al., 1988). Parasuraman et

al. (1988) also reported the composite Cronbach’s Alpha values for the firms for each of

the constructs. The tangible constructs came with .72 while other four constructs came

above .80 (Parasuraman et al., 1988). Thus, the scale used in this study suffered from low

reliability, as Pallant (2013) stated that a score of .70 is acceptable, .75 is desirable, and

.80 is excellent.

Carman (1990) questioned the reliability of the SERVQUEL model and

recommended further testing of the instrument to ensure reliability. Andaleeb and

Conway (2006) also questioned the reliability of the scale as they stated, “Although the

SERVQUAL framework has been pursued with some enthusiasm in various service

industries, empirical support for the suggested framework has not always been

encouraging” (p. 4). Besides low reliability, the instrument used in SERVQUEL model

was designed mainly for longitudinal study as Parasuraman et al. (1988) recommended
27

tracking service quality periodically for optimal results. On top of this, the SERVQUEL

model requires measuring the expectation prior to rendering of service and measuring the

perception after the service, making it ideal for longitudinal studies but unfit for a cross

sectional study like the current one (Parasuraman et al., 1988).

Additionally, Parasuraman et al. (1988) claimed that this instrument is most

useful when it is being used with other customer service measurement tools, such as

systematically soliciting and analyzing customer complaints and comments. This is

another reason for SEVRQUEL not being a match for the current study, as the current

study has neither solicited comments nor complaints. Finally, according to Parasuraman

et al. (1988), the SERVQUEL is a generic instrument. Since it is a generic instrument and

has not been specifically developed for the restaurant industry, this model is not a good

fit for the current study.

To make the SERVQUEL model restaurant specific, Stevens et al. (1995)

proposed the DINESERV model. Based on the five dimensions used in the SERVQUEL

model, Stevens et al. (1995) developed the 29-item DINESERV instrument. The survey

instrument used in their study included 10 items representing tangibility, five items

representing reliability, three items for responsive ness, five items for assurance, and

five items for empathy. Each of the five constructs in their study had a Cronbach’s alpha

value of greater than .89. Therefore, the survey instrument is highly reliable as a

Cronbach’s value of .70 is acceptable (Pallant, 2013). Stevens et al. (1995) collected data

from fast food, casual dining, and fine dining restaurants. Similar to the SERRVQUEL

model, Stevens et al. (1995) required collecting data on expectation prior to rendering the

service and collecting data on perception of the actual service after its rendering.
28

Therefore, this model is also designed for longitudinal study, as the authors recommend

conducting the survey every 2 to 3 months. So, DINESERV was not a good fit for the

current cross sectional study either.

Besides the above limitations, the SERVQUEL and DINESERV models have

other criticisms. SERVQUEL and DINESERV models measured customer satisfaction as

the difference between customer expectation and perception of the actual service. Carman

(1990), Cronin and Taylor (1992), and Teas (1993) strongly opposed this idea of

satisfaction being the difference between expectation and perception. Carman (1990)

found SERVQUAL difficult to use in different settings without modification as was the

case in the DINESERV model. Carman (1990) also found these two models impractical

to use, as they require completing the expectation prior to providing service and the

perception of actual service after rendering the service, which is not suitable for the

current study because the participants are completing only one online survey on the

perception of actual service after departing the establishments.

Because of the shortcomings presented by the aforementioned two models, the

researcher of the present study looked at the transaction specific model proposed by Teas

(1993). Teas (1993) introduced the transaction specific model, and later Parasuraman et

al. (1994) expanded it. This expansion was useful in explaining the overall customer

satisfaction in terms of service quality, product quality, and price. Using this model,

Andaleeb and Conway (2006) emphasized that the product and service offerings at the

quick service restaurants could be viewed as a mixture of service and products, and, as a

result, customers were likely to consider specific aspects of a transaction, such as service

quality, food quality, ambiance, speed of service, price, etc.


29

The transaction specific model defined satisfaction as a customer’s evaluation of

his or her experience with and reactions to a particular product transaction, episode, or

service encounter (Olsen & Johnson, 2003). Advantages of this model include its ability

to capture customers’ complex psychological reactions on a given occasion or over a

given time period on the product and service offerings of a firm (Oliver, 1999). The

model also allows companies to better track changes in performance that result from

internal changes and quality improvements (Olsen & Johnson, 2003). Another advantage

is that this model allows many attributes to be added as independent variables (Tea,

1993). Besides, this model does not require collecting data twice for the same study like

SERVEQUEL and DINESERV (Tea, 1993).

Because of the advantages and the practicality of the transaction specific model,

the ‘KSM for QSR model developed in the current study is based on it. The adopted

model in the current study has added additional independent variables in addition of the

ones that have been used by Parasuraman et al. (1994). Thus, besides examining the

influence of service quality, product quality, and price (Parasuraman et al., 1994), the

‘KSM for QSR’ model examines the impact of physical environment, convenience, order

accuracy, customer-facing technology, and speed of service on customer satisfaction at

the subject hamburger chain. The current study also attempts to capture the impact of

demographic variables on satisfaction at the subject hamburger chain. Additionally, the

current study examines the relationship between customer satisfaction and customer

loyalty at the subject hamburger chain. The ‘KSM for QSR’ model in the current study

assumes that service quality, food quality, environment, convenience, customer-facing

technology, price and value, order accuracy, and speed of service are statistically
30

significant factors of customer satisfaction at the subject hamburger chain. The ‘KSM for

QSR’ model also assumes that demographic variables impact customer satisfaction at the

subject hamburger chain. Additionally, the ‘KSM for QSR’ assumes that there is a

positive, and statistically significant, relationship between customer satisfaction and

customer loyalty. The next section examines all terms and concepts that are the

component parts of the ‘KSM for QSR’ model: satisfaction, loyalty, the relationship

between satisfaction and loyalty, classification of restaurants in the United States, and the

restaurant industry’s service components.

Satisfaction

The dependent variable in this study is satisfaction. The ‘KSM for QSR’ model in

the current study has attempted to determine the impact of the independent variables and

demographic variables on customer satisfaction at the subject hamburger chain. Thus, it

is important to understand the meaning of customer satisfaction in the context of the

restaurant industry.

Experts, researchers, and practitioners differ on the definition of satisfaction.

Some defined satisfaction as the difference between expectation and perception of an

actual product or service while others defined it as the post purchase experience of a

product or service. Parasuraman et al. (1988) defined satisfaction as the difference

between customer expectation and perception of actual performance. Carman (1990),

Cronin and Taylor (1992), and Teas (1993) opposed the view of Parasuraman et al.

(1988) and claimed that satisfaction can be solely measured based on a customer’s

perception of a product or service. The ‘KSM for QSR’ model in the current study

adopted the latter view on satisfaction.


31

Many other academic researchers echo this view. Stank, Daugherty, and Ellinge

(1997) defined satisfaction as the customer’s after purchase judgment, or evaluation, of a

specific product or service. Vavra (1997) defined satisfaction as the satisfactory post

purchase experience with a product or service. Olsen and Johnson (2003) defined

satisfaction as a customer’s evaluation of his or her experience with, and reactions to, a

particular product transaction, episode, or service encounter. Haghighi et al. (2012)

defined customer satisfaction as the experience with products and services. Based on

these definitions, it can be concluded that satisfaction is comprised of three basic

components, an encounter with a product or service, a response to that product or service

by the consumer, and the time dimension, which is after purchase (Giese & Cote, 2000).

The ‘KSM for QSR’ model defines satisfaction as the post purchase behavior or

experience of customers to a product or service.

Loyalty

Customer loyalty is another dependent variable in the “KSM for QSR’ model.

Satisfied customers do not always become loyal customers because competitive products

and services in the market provide them with alternatives, and when there are

alternatives, customers have options. However, existing literature suggests a strong

connection between the two. According to Wu (2013), to achieve customer loyalty, firms

ought to focus on customer satisfaction because it positively influences customers’ future

behavioral intentions, implying that satisfied customers would visit a restaurant again and

again and, more importantly, recommend their favorite restaurants to their friends and

family. The ‘KSM for QSR’ model expands on this relationship. Thus, it is important to

understand the meaning of customer loyalty.


32

Customer loyalty is a deep commitment to repurchase a product or revisit a

particular business consistently in the future, despite situational influences and marketing

efforts by the competing products or businesses having the potential to cause switching

behaviors (Oliver, 1997). Generally, loyalty has been and continues to be defined by

many as repeat purchasing frequency or a relative volume of same brand purchasing

(Tellis, 1998). However, some researchers view loyalty in two dimensions while others

look at it in terms of three dimensions. Hallowell (1996) mentioned two distinct aspects

of loyalty: One is the attachment to a good, service, or organization; and the other is a

behavior of repeat purchases of services from the same merchant, having larger scale

and/or scope of a relationship, or making more recommendations. On the other hand,

Wong, Dean, and White (1999) suggested three distinctive ways to evaluate loyalty—

behavioral, attitudinal, and composite. The behavioral dimension considers consistent,

repetitious purchase behavior to be an indicator of loyalty while attitudinal measurement

determines the sense of loyalty, commitment, and faithfulness (Wong et al., 1999). And,

finally, the composite measurement of customer loyalty is the combination of the two

dimensions—behavioral and attitudinal (Wong et al., 1999). For the purpose of the ‘KSM

for QSR’ model, the composite measurement of loyalty is adopted. In short, the current

study assume that a loyal customer makes repeat purchase from a business faithfully and

consistently.

According to NRA (2014), 92% of the adults in the United Sates stated that a

recommendation from friends and family members is a factor when they choose a

restaurant. Word of mouth (WOM) reputation is a component of loyalty, and it happens

when satisfied customers say positive things about a business and recommend that
33

business to friends and family (N. Terblanche, 2015). WOM reputation has a very long

lasting impact on patronage, competitiveness, and business survival (Min & Min, 2011)

because WOM receivers use the recommendations as one of the main criteria of

narratives on which to base their decisions to visit restaurants (N. Terblanche, 2015).

N. Terblanche (2015) discussed an important aspect of recommendation, which is

the underlying possibility that the receiver of a recommendation may be dissatisfied with

a service encounter, which will reflect adversely on the sender of the recommendation.

The relationship with the receiver of the recommendation and the potential to damage

this relationship due to a bad recommendation may cause the word of mouth activity to

be more of a description of what happened during the restaurant visit than an explicit

recommendation to patronize the restaurant (N. Terblanche, 2015). Thus, based on N.

Terblanche (2015), it is very difficult for a restaurant to get recommendations. It is

important to note that unsatisfactory experience provokes much more negative

recommendations than the satisfactory experience produces positive recommendations

(N. Terblanche, 2015). Thus, the preferred way to assess true word of mouth

communication after a service encounter is to capture and evaluate what customers intend

to say about a service encounter because only 25% make explicit recommendations (N.

Terblanche, 2015). So, it is important for the restaurant operators to focus on increasing

word of mouth activity by creating memorable experiences for customers so that they can

positively describe their experience.

The Relationship Between Customer Satisfaction and Customer Loyalty

Since satisfaction and loyalty have been defined in earlier sections, it is now time

to examine the existing literature to determine the relationship between satisfaction and
34

loyalty. Twelve empirical studies conducted from 2010 to 2015 that dealt with the

relationship between customer satisfaction and loyalty in a variety of industries

(restaurant, cell phone, e-commerce, and hotel) in many countries, South Africa,

Malaysia, Mongolia, United States, China, Iran, and India, were examined. Four studies

were conducted in the fast food industry (Bougoure & Neu, 2010; Min & Min, 2011;

Terblanche & Boshoff, 2010; Yondonperenlei & Song, 2015), one in full service

restaurants (Everson, Dagger, & Elliot, 2013), one in the restaurant industry in general

(Yan, Wang, & Chau, 2013), one in a Hong Kong style tea restaurant (Lai, 2015), two in

the cell phone industry (Deng, Lu, Wei, & Zhang, 2010; Shahin Sharifi & Rahim

Esfidani, 2014), one in web-auction sites (Chen, 2012) and two in the hotel industry

(Khan, Garg, & Rahman, 2015; Liat & Chiau, 2015). All these studies have found a

positive statistically significant relationship between satisfaction and loyalty. When

satisfaction goes up, loyalty goes up as well.

Terblanche and Boshoff (2010), Bougoure and Neu (2010), and Yondonperenlei

and Song (2015) conducted their studies to determine the relationship between

satisfaction and loyalty in fast food restaurants. Terblanche and Boshoff (2010) carried

out the study in South Africa, Bougoure and Neu (2010), in Malaysia, and

Yondonperenlei and Song (2015), in Mongolia. The authors in the first two studies,

(Bougoure & Neu, 2010; N. S. Terblanche & Boshoff, 2010), conducted structural

equation modeling and found a strong statistical relationship between customer

satisfaction and customer loyalty. Yondonperenlei and Song (2015) conducted regression

analysis and also found a statistically significant positive relationship between

satisfaction and loyalty.


35

Similar to Terblanche and Boshoff (2010), Bougoure and Neu (2010), and

Yondonperenlei and Song (2015), Min and Min (2011) conducted a study in the United

States’ fast food market to examine the relationship between satisfaction and loyalty.

Customer feedback was obtained from 262 fast food restaurant customers who dined at

10 different fast food restaurants (McDonalds, Burger King, Wendy’s, Arby’s, Hardee’s,

Subway, Johnny Rocket, Red Robin, Fuddruckers, and Roy Rogers), located in the

southeastern and mid-western United States (Min & Min, 2011). Min and Min (2011)

study shares a lot of similarities with the current study as the current study also collects

data from a similar fast food outlet with operations also in the Midwest. Min and Min

found a pattern of correlation between the overall level of customer satisfaction with the

fast food restaurant and customer loyalty. Based on these research studies, it can be

concluded that the relationship between satisfaction and loyalty is universal in the fast

food industry across many countries. Does this relationship hold statistically significant

in other types of restaurant, such as fine dining, casual, and fast casual?

Similar to fast food restaurants, the relationship between satisfaction and loyalty

was also found statistically significant in other kinds of restaurants across many cultures.

Everson et al. (2013) conducted a study at full service restaurants in the United States to

determine the relationship between satisfaction and loyalty. Through research, Everson et

al. examined the relationship between satisfaction and loyalty by using a structural

equation modeling and found statistically significant association between satisfaction and

loyalty in the full service restaurant industry.

A major study was done in China by Yan et al. (2013) in the backdrop of the

restaurant industry. The results of their study were consistent with the aforementioned
36

studies. The authors in this study used regression analysis to analyze 10,136 responses

and found significant statistical relationship between satisfaction and loyalty. To test the

relationship between satisfaction and loyalty, Lai (2015) conducted a study in Hong

Kong style tea restaurant and collected data from 382 customers. Lai (2015) found a

strong relationship between satisfaction and loyalty in the study as well. Thus, based on

these research studies, it can be concluded that the significant statistical relationship

between satisfaction and loyalty exists across national boundaries and restaurant

segments. The strong positive relationship between satisfaction and loyalty found in

restaurant industry is also found in other service oriented businesses.

Deng et al. (2010) and Seyed and Esfidani (2014) found a statistically significant

relationship between satisfaction and loyalty in the cell phone market. Researchers in

both studies used structural equation modeling to examine this relationship. Deng et al.

(2010) used data from the Chinese cell phone market while Seyed and Esfidani (2014)

collected data in Iranian cell phone market. Chen (2012) aimed to examine the

relationship between satisfaction and loyalty through the introduction of commitment,

trust, involvement, and perceived value as mediators in the e-service context. Regression

analysis findings suggested that customer satisfaction is an essential ingredient for loyalty

(Chen, 2012). Liat and Chiau (2015) and Khan et al. (2015) found satisfaction as an

antecedent of loyalty in hotel industry. Liat and Chiau (2015) collected data in Malaysia

and carried out regression analysis whereas Khan et al. (2015) collected data in India and

conducted structure equation modeling. Twelve of the above-mentioned studies point to

the strong statistical relationship between satisfaction and loyalty. In addition to customer

satisfaction and its relationship to customer loyalty, it is time to examine the different
37

kinds of restaurant settings, as different kinds of restaurants build different expectations,

so customers expect different things from each kind of restaurant.

Restaurant Industry

Since the present study will be conducted in the restaurant industry, it is important

to understand the different kind of restaurants, which provide consumers with a variety of

dining options. After an analysis of the existing literature, the restaurant industry has

been divided into four segments: fine dining, casual dining, fast casual, and fast food or

quick service.

Fine dining restaurant. Fine dining restaurants focus on the details of customer

service, high quality food, and interior design to make a visit memorable despite a high

price point. These restaurants are also known as full service restaurants. Fine dining

includes restaurants with characteristics such as a destination restaurant that recommends

reservations, table cloths, generally above median price range, and a staff that is attentive

to the customer’s dining experience to ensure the highest level of satisfaction and overall

experience (Arora, 2012). Eleven Madison Park is an example of fine dining in New

York City. Eleven Madison Park as a gastronomic heaven that titillates the imagination of

the customers with a whimsical tasting menu and superb wine pairings ferried by

exceptional staffers in gorgeous art deco quarters; even given luxury-car-payment prices

($220 per meal), admirers affirm this once-in-a-lifetime experience should not be missed

("Eleven Madison Park," 2015).

Casual dining restaurant. The price point for a meal at casual dining restaurants

is less than fine dining restaurants. This class of restaurants has greater focus on fast

service and lesser attention to ambiance than fine dining. Casual dining restaurants have
38

grown in popularity during the 1980s, becoming one of the most common types in the

restaurant industry (Rivera et al., 2008). Casual dining restaurants are those that may

have one of the following characteristics: do not recommend or take reservations, focus

on quick order and service, use no tablecloths, and are less expensive than fine dining

(Arora, 2012). The Daily Meal compiled the list of America’s 50 best casual restaurants

and Katz’s Deli of New York City made the top of the list (Myers, 2014). According to

its website, a complete dinner for one with a choice of starter, choice of appetizer, choice

of main dish, and a choice of dessert at Katz’s Deli costs $29.95 ("High Holiday Menu,"

2015). The Daily Meal described Katz’s Deli’s famous corned beef and pastrami, made

on-premises and sliced to order, as legendary, and the simple act of taking your ticket,

standing in line, bantering with the counterperson while placing your order, and finding a

table has become as New York as the eating of a hot dog with a smear of mustard and a

little sauerkraut (Myers, 2014). Chili’s, Red Lobster, Ruby Tuesday’s, and Olive Garden

also fit into this segment of restaurant (Arora, 2012; Rivera et al., 2008).

Fast casual restaurant. Fast casual restaurants fall between fast food and casual

dining restaurants and focus on better quality food than fast food restaurants and faster

service than casual dining. Fast casual restaurants have a similar structure to quick

service restaurants but with a focus on higher quality food and an atmosphere similar to

casual dining restaurants (Ryu et al., 2010). The price structure at the fast casual is also

higher than the fast food restaurant segment. According to respective websites, a meal at

Num Pang, a fast casual restaurant in New York City runs about $12 ("Menus," 2015)

while a meal at White Castle, a fast food restaurant, in New York City, runs about $8

("Online Ordering," 2015). Num Pang is at the top of the Zagat compiled list of the 11
39

hottest fast-casual chains in New York City (Zagat, 2015). Zagat describes Num Pang as

a Cambodian-inspired sandwich giant where diners love creative Asian sandwiches on

freshly baked bread, paired with a funky hip-hop vibe and colorful interiors at a price

higher than fast food restaurants (Zagat, 2015). Other restaurant chains that fit into in this

category are Panera Bread, Chipotle, Panda Express, Zaxby’s, and Five Guys (Green,

2011).

Quick service restaurant or fast food. Fast food restaurants refer to those where

ready to eat products are prepared quickly and easily so that they are prepared to serve

directly to people (Rashid, Rani, Yusuf, & Shaari, 2015). Fast food is designed for ready

availability, use, or consumption with little consideration to quality (Rashid et al., 2015).

Fast food restaurants, therefore, provide quick food, low price point, self-service, and

quick turnaround (Arora, 2012). Thus, the fast food segment that is the focus of the

current study strives for quick and convenient food at the lowest price point. During the

1960s when the fast food restaurant industry was being introduced, efficiency and

timeliness became the primary driving factors of the business (Rivera et al., 2008). Fast

food generally consists of finger food, such as hamburgers, french fries, chicken nuggets,

tacos, and pizza (Rashid et al., 2015). Restaurants that are often included in this category

are McDonald’s, Wendy’s, Taco Bell, KFC, White Castle, and Starbucks (Arora, 2012).

Restaurant Industry Service Components

A review of the existing literature showed that there are two component parts of

the restaurant industry: product manufacturing and customer service. The total

foodservice in the restaurant industry encompasses both tangible (food and physical

facilities) and intangible (behavior of employees toward customers) components (Ryu &
40

Han, 2009). Rodgers (2007) echoed Ryu and Han (2009) as he commented that the food

service operation has a dual nature: manufacturing of food items and serving customers.

A proper combination of services and products result in customers’ perception of high

service quality, which, in turn, leads to attaining customer satisfaction (Ryu & Han,

2009). The following sections examine current literature to determine the component

parts of satisfaction in the restaurant environment, such as service quality, food quality,

physical environment, convenience, customer-facing technology, price and value, order

accuracy, and speed of service. Some of these constructs are purely tangible, some are

intangible, and some are a combination of both.

Service quality. Over the years, many researchers studied service quality as a

component of customer satisfaction in restaurant settings. The literature review revealed

that interaction between customers and employees has significant influence on

consumers’ evaluation of the service at restaurants. The NRA (2014) found that 87% of

United States’ consumers consider service quality while selecting a fast food restaurant.

The subject hamburger chain in the current study also greatly focuses on service quality

(Z. Diaz, personal communication, October 11, 2015). However, the importance of

service quality varies in the restaurant environment and relies significantly on employee

behavior (Harrington et al., 2012). Service quality differs from fast food to fine dining.

Customers get, and expect, a much higher level of service quality at a fine dining

restaurant than at a fast food restaurant.

Twelve empirical studies were examined to uncover the relationship between

service quality and satisfaction. These studies were conducted from Australia to China to

Germany to India to Morocco to the Netherlands to Sweden to the United States to


41

Taiwan to Malaysia to Spain. Five studies were conducted in the fast food industry:

(Keillor, Hult, & Kandemir, 2004; Qin & Prybutok, 2008; Reich, McCleary, Tepanon, &

Weaver, 2005; Wen, Qin, Prybutok, & blankson, 2012; Wu & Mohi, 2015). Some of

these studies found a significant relationship between service quality and satisfaction, and

some of them did not. Four studies were completed in the full service restaurants:

Andaleeb & Conway, 2006; Fu & Parks, 2001; Chow, Lau, Lo, Sha, & Yun, 2007; results

of these studies were conclusive in showing that a statistically significant relationship

exists between service quality and satisfaction. One study was carried out in a college

cafeteria (Andaleeb & Caskey, 2007) and found a statistically significant relationship

between service quality and satisfaction. One more study was conducted at a Chinese

restaurant (Shariff et al., 2015), another one was carried out at hotel and restaurant

industry (Gracia, Bakker, & Grau, 2011), and the final study was conducted in the

hospitality industry (Kattara, Weheba, & El-Said, 2008). All these three studies found a

statistically significant relationship between service quality and satisfaction.

Keillor et al. (2004) conducted a major study in eight countries (Australia, China,

Germany, India, Morocco, the Netherlands, Sweden, and the United States) to determine

the relationship between customer loyalty and service quality in the fast food industry.

Behavioral intention, a component of loyalty is positively connected with satisfaction in

the restaurant industry. Keillor et al. (2004) analyzed data via structural equation

modeling. Their results indicated that service quality positively affects behavioral

intentions in Australia, Germany, India, Sweden, and the United States. On the other

hand, researchers found no significant relationships between service quality and

behavioral intention in China, Morocco, and the Netherlands. One of the major strengths
42

of Keillor et al. (2004) is that it tested the framework in a multinational and multicultural

setting and used large samples to solidify the contribution to determine the effects of

service quality on customer loyalty.

Another cross cultural study was conducted by Wen et al. (2012) in the United

States and China to determine the relationship between satisfaction and service quality in

the fast food industry. The authors distributed the survey and received 282 usable

responses in the United States and 171 usable responses in China for a total of 453

responses. Wen et al. (2012) results suggested that service quality has a stronger

influence on customer satisfaction in the United States than in China, thus validating the

findings of Keillor et al. (2004), which revealed service quality to be an important factor

of satisfaction in the United States but not in China. Based on these two studies, it also

can be concluded that the relationship varies between service quality and satisfaction

across national boundaries and cultures. The unique characteristics of culture play a

significant role in determining the expectation of customers from fast food restaurants.

Reich et al. (2005) attempted to measure the relationship between service quality

and satisfaction as well. They collected data from 175 customers patronizing

McDonald’s, Burger King, and Wendy’s to examine the relationship between satisfaction

and service quality in the United States. Reich et al. (2005) found a statistically

significant relationship between satisfaction and service quality. On the other hand, the

results of Qin and Prybutok (2008) contradicted the findings of Reich et al. (2005) as they

found the relationship between satisfaction and service quality in the United States fast

food restaurant industry to be statistically insignificant. Qin and Prybutok (2008)

collected data from 208 students at a large southwestern university and conducted
43

structural equation modeling to analyze the data.

However, Wu and Mohi (2015) conducted a study among Taiwanese college

students and found service quality as an antecedent of customer satisfaction in the fast

food industry. Rashid et al. (2015) examined the relationship between service quality and

satisfaction in the Malaysian fast food industry and found a statistically significant

relationship between the two as well. Rashid et al. (2015) collected data from 300

customers from McDonald, KFC, Domino Pizza, and Secret Recipe, and data was

analyzed via regression. Thus, based on these studies, it can be concluded that the effects

of service quality on satisfaction and customer loyalty varies based on cultural

differences in the fast food industry.

Andaleeb and Conway (2006) conducted a study in the United States in the

context of full service restaurant and found service quality to be of a statistical

significance to determine satisfaction. To achieve the results, Andaleeb and Conway

(2006) carried out regression analysis. The results of the Andaleeb and Conway (2006)

study suggested that customer satisfaction was influenced most by the responsiveness of

the frontline employees, which points to the importance of the quality of service provided

to the customers by frontline employees.

A similar study was carried in Chinese full service restaurant by Chow et al.

(2007). The authors proposed and tested a conceptual model of service quality using

structural equation modeling. Their results supported the theory that there are significant

links between service quality and customer satisfaction. Thus, based on the above-

mentioned research studies, it can be concluded that service quality is an important

determinant of satisfaction in fast food and full service restaurants. Therefore, service
44

quality is an important antecedent of satisfaction in full service restaurants regardless of

cultural differences, which makes sense as people go to a full service restaurant to dine,

wine, and enjoy.

Andaleeb and Caskey (2007) also found similar results as Andaleeb and Conway

(2006). Andaleeb and Caskey (2007) tested the importance of service quality on

satisfaction by using the data from a survey conducted at a college in northwestern

Pennsylvania. The results of the multiple regression analysis suggested that the most

important variable explaining student satisfaction at the college cafeteria is staff behavior

(Andaleeb & Caskey, 2007). In other words, the quality of service provided by the

employees was important in determining the satisfaction of students with the college

cafeteria. Shariff et al. (2015) also confirmed the findings of (Keillor et al., 2004),

Andaleeb and Conway (2006), and Andaleeb and Caskey (2007) in Malaysian Chinese

restaurants. The objective of the study conducted by Shariff et al. (2015) was to identify

the relationship between service quality and customer satisfaction in the context of

Chinese restaurant in Malaysia, where data was collected from 395 customers from

Chinese restaurants. Shariff et al. (2015) found a direct and positive relationship between

service quality and customer satisfaction as shown in Chinese restaurants in Malaysia.

Gracia et al. (2011) tested a cognitive-affective-conative model using separate

constructs to clarify the specific role of customers’ positive affective responses in

enhancing customer loyalty. Based on a sample of 586 hotel customers and 571

restaurant customers from 120 Spanish establishments, the results of the multi-group

structural equation-modeling analyses confirmed the proposed hypothesis that service

quality increases positive affective responses and these, in turn, increase customer
45

satisfaction (Gracia et al., 2011). Kattara et al. (2008) investigated the relationship

between employees’ positive and negative behaviors, customers’ perception of service

quality, and overall customer satisfaction. The authors collected data from over 300

customers in the hospitality industry, concluding that employees’ behaviors have great

effect on overall customer satisfaction regardless of customers’ gender, nationality,

purpose of visit, number of visits, and length of stay.

The primary objective of Fu and Parks (2001) was to use the SERVQUAL

instrument to investigate the service quality dimensions that influence older diners’

intentions to return to a restaurant. Their study’s research design included a survey at two

family-style restaurants in a northeastern state in the United States where a total of 415

usable questionnaires were collected at the two selected restaurants. What is more

important to older diners in those two restaurants is the friendliness of service and the

feeling that they are valued customers (Fu & Parks, 2001). Based on the aforementioned

studies, it can be concluded that the impact of service quality on customer satisfaction

depends on the nature of the restaurants and the culture of the participants.

So, what are the attributes of service quality? After a review of the literature, the

researcher has identified smiling employees, suggestive selling, friendliness, competent

employees, and employees’ willingness to help as important attributes of service quality.

Employees are instructed in the restaurants to engage in positive social behaviors, such as

smiling, making eye contact, greeting the customer, and expressing sympathy for

customers, and these are wise practices because much research has shown that such

behaviors have a positive impact on customers’ evaluations of the firm (Söderlund,

2013). Industry insiders say it is hard to understate the value of giving customers
46

something special by way of customer service—a warm welcome, a smile, a suggestion

to complement the main meal, friendliness, and the willingness of a competent team to go

above and beyond to help customers (Hardy, 2013).

A smile while facing a customer goes a long way in the context of the restaurant

industry. Many researchers have found it important in terms of customer satisfaction.

Parasuraman, Zeithaml, and Berry (1985) found that service with a smile affects

customer attitudes and behaviors such as perceived service quality and met expectations.

Kattara et al. (2008) echoed the same sentiment about a smile as they have mentioned

that it does not take a lot to make a customer happy: Simple actions on the part of an

employee, for example, a smile, have a positive correlation to customer satisfaction

(Kattara et al., 2008). A smile also makes customers respond similarly, perceiving the

employees as providing quality service and feel satisfied with their encounters (Barger &

Grandey, 2006). Thus, employee smiling correlates with service quality and customers’

encounter satisfaction in the food service industry (Barger & Grandey, 2006). A customer

goes to a restaurant to dine, wine, and enjoy, not to see sad faces. A genuine smile speaks

about the openness of employees and their approach to customer service. It definitely

helps to open the doors to a great experience. The subject hamburger chain requires its

employee to smile and make eye contact with customers (Z. Diaz, personal

communication, October 11, 2015).

Suggestive selling refers to cross-selling, which is offering an additional item to a

customer after that customer has already decided to buy one or several items (Söderlund,

2013). It is not only an effective strategy in the restaurant industry to increase sales but

also to increase customer satisfaction. Not every customer accepts a suggestion but
47

enough of them do, which significantly increases average sales per ticket. Suggestive

selling has another element, which is to provide excellent customer service via educating

consumers about food items offered at the restaurant. The change from providing service

in the traditional sense to providing service and engaging in explicit suggestive selling

attempts a novel way of delivering services to customers (Söderlund, 2013). However,

there are no studies that attempted to determine the effect of suggestive selling on

customer satisfaction in the restaurant industry. Suggestive selling is being added as an

attribute of service quality in the current study because the subject hamburger chain

focuses immensely on suggestive selling as a mechanism to increase customer

satisfaction and sales. Suggestive selling is prerequisite for an employee to work as a

customer service specialist at the subject hamburger chain (Z. Diaz, personal

communication, October 11, 2015).

According to statistics, 90% of consumers say friendly service is an important

factor when they are choosing a fast food restaurant (Tristano, 2013). Friendliness and

personal warmth toward customers significantly lead to higher service quality

perceptions, and they are found to be amongst the top five drivers of positive experience

in the restaurant environment in the United States. (Harrington et al., 2012). Ali (2015)

also found it to have a significantly positive relationship with customer satisfaction in the

resort hotels in Malaysia. Additionally, Dube et al. (2015) mentioned that friendliness of

employees is important because that can enhance service quality in the quick service

restaurant industry (Hsieh & Yeh, 2015). The general managers at the subject hamburger

chain expect and require their team members to be friendly to customers and reinforces

this behavior on an ongoing basis via a host of devices, including incentives and
48

disciplinary actions (Z. Diaz, personal communication, October 11, 2015).

A restaurant cannot provide top-notch service to customers without a well-trained,

competent team. Well-trained, competent employees are important in the restaurant

industry (Dube et al., 2015). Competent, knowledgeable employees are found to have a

significant positive relationship with customer satisfaction in the hotel industry in

Malaysia (Ali, 2015). The researcher has not come across any study that has explored the

effects of competent employees on service quality in the fast food environment. It is,

therefore, important to include this attribute in the present study to test its impact on

service quality and satisfaction as it was found to have an impact on the hotel industry in

Malaysia. Besides, the subject hamburger chain believes in training team members in all

aspects of the operations (Z. Diaz, personal communication, October 11, 2015).

Restaurant management and employees should be willing to listen to customers

(Parvin, Perveen, & Afsana, 2014). Employees’ willingness to help the guest is found to

be one of the important factors of service quality in the mid to upper class restaurants in

the United States (Namkung & Jang, 2008). Satisfaction with employees has a significant

positive effect on customer loyalty in the chain restaurants in Taiwan (Liu, Huang, &

Chen, 2014). If employees have the best intention in their hearts about customers,

satisfaction will increase. Although employees’ willingness to help customers is found to

be important at fine dining restaurants in the United States and chain restaurants in

Taiwan, it has never been tested in the context of the fast food industry in the United

States. Thus, it is important to test its impact on service quality here in the United States.

The next section will address the importance of food quality in the restaurant settings as

found by existing researchers.


49

Food quality. The issue of food quality is of immense importance in the

restaurant environment. Almost half the consumers in the United States (45%) say that

they will stay away from a fast food restaurant due to poor quality of food and beverages

(Tristano, 2013). Many empirical studies in the restaurant industry established what an

important role the quality of food and beverage has in shaping patrons’ behavior (Auty,

1992; Hyun, 2010; Lewis, 1981; Mamalis, 2009; Namkung & Jang, 2007, 2008; Sulek &

Hensley, 2004; Swimberghe & Wooldridge, 2014). On the other hand, many studies

focusing on restaurant industry examined the determinants of food quality. Taste (Hyun,

2010; Namkung & Jang, 2007, 2008), presentation (Hyun, 2010; Namkung & Jang, 2007,

2008), appropriate temperature (Hyun, 2010; Namkung & Jang, 2007, 2008), healthy

option (Hyun, 2010; Namkung & Jang, 2007, 2008; Swimberghe & Wooldridge, 2014),

and menu variety (Namkung & Jang, 2007) have been suggested as aspects of food

quality evaluation. Sulek and Hensley (2004) and Namkung and Jang (2007, 2008) have

postulated that these attributes are determinants of customer satisfaction in the restaurant

industry as well. Moreover, food quality is related to food safety issues and, thus,

influences the trustworthiness of a restaurant (Knight, Worosz, & E.C.D. Todd, 2007).

Lewis (1981) attempted to pinpoint the factors that impacts customers’ decision to

visit a restaurant. The data used in Lewis’ study was gathered from a systematic random

sampling of 400 persons in the United States. Data analysis suggested that food quality

was the most important factor for customers when making a decision to visit a restaurant

(Lewis, 1981). A similar study was conducted a decade later by Auty (1992) in the

United Kingdom to determine the factors of customer behavior in the context of the

restaurant industry. Auty (1992) found food type and food quality as the two most
50

important factors of consumer behavior in the restaurant industry, thus validating the

findings of (Lewis, 1981). In his study, Auty (1992) went much deeper than Lewis (1981)

and divided the restaurant visits into three distinct categories based on occasion: social

gathering, celebration of special events (birthdays, anniversary, sweet sixteen etc.), and

quick meal. Auty (1992) found food type and food quality to be the most frequently cited

choice variables, regardless of the occasions.

Twelve years after Auty (1992), Sulek and Hensley (2004) conducted a research

study to determine the most important factors of satisfaction and repeat patronage at a full

service restaurant in the United States. Since Sulek and Hensley (2004) measured the

impact of food quality on satisfaction and repeat visit intention, it was different from

Lewis (1981) and Auty (1992), as both only measured its impact on the revisit intention.

Sulek and Hensley (2004) collected data from 239 customers using a 5-point Likert-type

scale and allowing participants to rate their satisfaction with each design feature: speed of

service, service quality, and food quality. They conducted a regression analysis and found

food quality to be the most important statistically significant factor in customers’ overall

dining experience at the selected restaurant. Sulek and Hensley (2004) ran another full

model that regressed the design attributes against repeat-patronage intentions. Regression

results identified only one design attribute, food quality, as the statistically significant

predictor of repeat patronage intention (Sulek & Hensley, 2004). Thus, Sulek and

Hensley (2004) found food quality to be an important factor for customer overall

experience and customer loyalty at a full service restaurant in the United States.

Customer comments in their study also supported the conclusion of both regression

analyses because half of all comments contained suggestions pertaining to food quality.
51

So far we have seen Lewis (1981), Auty (1992), and Sulek and Hensley (2004)

found food quality to be the most important factor in decision-making in the restaurant

industry. However, Mamalis (2009) found food quality as a statistically significant factor

but not as the most important factor of satisfaction in the fast food restaurant industry.

Mamalis (2009) found food quality to be the second most important factor of satisfaction.

Mamalis (2009) work is an important study in light of the present study as the data was

collected from fast food outlets similar to the subject hamburger chain. A sample of 305

people at Goody’s and McDonald’s in Greece rated the different items for fast food

restaurants on a 7-point Likert scale marked strongly agree to strongly disagree for 23

items ranging from quality of food to store personnel and service, adapted to the Greek

culture (Mamalis, 2009). The total instrument’s reliability coefficient alpha was 0.827

and the model explained 67.604% of the variance (Mamalis, 2009). The food quality was

the second most important factor derived in Mamalis (2009).

Namkung and Jang (2007) went much deeper than the aforementioned researchers

in their investigation of food quality. They not only investigated the effects of the overall

food quality on customer satisfaction and customer loyalty but also looked at the

determinants of food quality in full service restaurants in the United States. Their study

identified the critical attributes of food quality in improving satisfaction and heightening

revisit intention. The authors collected a total of 372 questionnaires, and 300 were used in

the study after excluding incomplete questionnaires. The level of internal consistency

found in this study for each construct was acceptable with Cronbach’s alpha estimates

ranging from .89 to .95. With a structural equation modeling technique, the authors

showed that overall food quality significantly affected customer satisfaction and customer
52

loyalty. Namkung and Jang (2007) also revealed that the relationship between food

quality and customer behavioral intentions was mediated by satisfaction. The current

study also assumes that the impact of food quality on loyalty will be mediated by

satisfaction.

The food quality constructs in Namkung and Jang (2007) study had six attributes:

food presentation, menu variety, healthy options, taste, freshness, and food temperature.

The authors carried out a regression analysis and demonstrated that taste, presentation,

and temperature were the three greatest contributors to customer satisfaction in the

context of full service restaurants. Namkung and Jang (2007) conducted another

regression analysis to determine the impacts of the six attributes on customer loyalty. The

results of the Namkung and Jang (2007) revealed that customer loyalty was significantly

influenced by the quality of presentation, taste, and healthy options. In this model,

healthy option, which was not shown as a significant predictor of satisfaction, had a

significant influence on customer loyalty (Namkung & Jang, 2007). The authors

theorized that the result may have reflected the increasing concern with physical well-

being and healthy food. However, variety of food was not found as a significant indicator

of satisfaction in full service restaurants by Namkung and Jang (2007).

Namkung and Jang (2008) took a different approach than their previous study in

2007 as they included only highly satisfied customers in their analysis. They omitted all

survey participants who indicated the level of satisfaction with the visits were medium to

low. Namkung and Jang (2008) is different in another way than their 2007 study as the

2008 study attempted to identify the importance of the food quality determinants on

customer satisfaction and ignored the effects of overall food quality on customer
53

satisfaction. The data used for the 2008 study was collected from full service restaurants

in the United States. In 2008 study, food quality had five attributes: presentation, healthy

option, taste, freshness, and temperature. Menu variety was omitted from the 2008 study

as opposed to 2007 study. Similar to 2007 study, food taste and food presentation were

found as important factors of customer satisfaction in 2008. Food temperature was found

marginally significant in 2008 study. However, the availability of healthy options was not

statistically significant in 2008 study whereas it was found to be statistically significant in

2007 study. Freshness and temperature were found statistically insignificant in 2008

study, thereby validating the findings of 2007 study in terms of freshness and

temperature.

Hyun (2010) conducted a similar study like Namkung and Jang (2008) to

determine the effects of food quality on customer satisfaction and loyalty in the context

of a chain restaurant. Unfortunately, the nature of the chain restaurant was not revealed.

Hyun (2010) used structural equation modeling while Namkung and Jang (2008) used

regression analysis. Data in Hyun’s (2010) study was collected via a questionnaire that

was distributed to a randomly selected group of 698 students and faculty members at

Virginia Tech, and 223 of them were collected with a response rate of 31.95%. Food

quality was measured in Hyun’s study based on the five items used by Namkung and

Jang (2008)—presentation, healthy options, taste, freshness, and temperature. Hyun

conducted a structural equation modeling and found a statistically significant relationship

between customer satisfaction and food quality. This finding validates the findings of

Namkung and Jang (2007). In Hyun’s study (2010), among food quality attributes, food

taste and food presentation were the two most important factors contributing to customer
54

satisfaction, thus validating the findings of Namkung and Jang (2007, 2008). Hyun also

found food temperature to be a statistically significant factor of satisfaction as well, thus

validating the findings of Namkung and Jang (2007), which also found temperature as an

important factor of satisfaction.

Swimberghe and Wooldridge (2014) conducted a study at Chic-fil-A, a fast food

restaurant chain in the United States, to determine the effects of food quality on customer

satisfaction and customer loyalty. They collected data from 483 customers for this study.

Based on Hyun (2010) and Namkung and Jang (2008), Swimberghe and Wooldridge

(2014) measured food quality in this study with a five-item scale: presentation, healthy

options, taste, freshness, and temperature. Structural equation modeling was conducted,

and it was found that food quality was a significant contributor not only to customer

satisfaction but also to customer trust (Swimberghe & Wooldridge, 2014).

Shaharudin, Mansor, and Elias (2011) found food taste and presentation to be

important in contributing to satisfaction at a study in Malaysian fast food market in which

data was collected from 120 customers at a Subway restaurant. Hummel and Murphy

(2011) conducted a similar study as Shaharudin et al.’s (2011) in Malaysia, and their

findings validated the findings of Shaharudin et al. in terms of food taste.

In addition, the results of the Domenge and Arciniega (2015) study suggested

taste and texture of the food are the key factors influencing customers’ intention to return

and provide free, word-of-mouth publicity. Their data was collected at fast food

restaurants in Mexico City, and the collected data was analyzed by regression analysis. It

was determined that the effect of product quality on behavioral intentions is more than

double that of environment and staff (Domenge & Arciniega, 2015).


55

Based on the aforementioned research studies, it can be concluded that the appeal

of food quality is universal across regional geography, restaurant segments, and

generations of food lovers. Lewis (1981), Sulek and Hensley (2004), Namkung and Jang

(2007, 2008), Hyun (2010), and Swimberghe and Wooldridge (2014) examined the

impact of food quality in the restaurant industry in the United States and found it to be

important. Swimberghe and Wooldridge (2014) and Mamalis (2009) found food quality

important in the fast food industry while Sulek and Hensley (2004) and Namkung and

Jang (2007, 2008) found it important in fine dining; finally, Lewis (1981), Auty (1992),

and Hyun (2010) found food quality important across restaurant industry.

Aforementioned 11 studies from 1981 to 2015 found food quality to be statistically

significant on customer decision-making processes in the context of the restaurant

environment.

The above-mentioned empirical studies have established the statistical

significance of food taste, temperature, presentation, and the availability of healthy food

options across multiple cultures and restaurant segments. Presentation is the tangible cue

for customer perception of quality, and it involves how attractively food is presented and

decorated (Namkung & Jang, 2007). Kivela, Inbakaran, and Reece (1999a) supported the

importance of food presentation as a key factor in determining dining satisfaction.

Decorating food with an elaborate garnish and using plates that blend into dishes are

important for satisfying guests with a sense of aesthetics (Namkung & Jang, 2008). The

subject hamburger chain in the present study also takes food presentation very seriously.

To retain heat and maintain quality, the unique two square inch sandwiches are placed

inside interlocking corrugated boxes made of 100% recycled materials and then stacked
56

inside a 100% recycled brown bag by ten sandwiches to serve the environmentally

conscious customers without guilt — or at least less guilt (Z. Diaz, personal

communication, January 6, 2016).

Menu variety involves the number or assortment of different menu items available

at a restaurant. Some researchers have found it to be an important factor while others

have found it to be of no importance. As stated in the prior section, Namkung and Jang

(2007) and Hummel and Murphy (2011) found menu variety as a statistically

insignificant factor having an impact on satisfaction in the restaurant industry. However,

Castillo (2013) found a significant positive relationship between customer satisfaction

and a menu based on local taste and new menu items in the fast food restaurant industry

in Central America. Menus based on local taste and new menu items are signs of food

variety. Fast food menu innovation affects customer satisfaction in Central America, and

when no new menu items are offered, customer satisfaction will decrease (Castillo,

2013). Additionally, industry experts also found menu variety as an important factor for

customers in the fast food environment. According to Pilon (2014), in general, 73% of

fast food customers in the United States said they like having a variety of menu items at

fast food restaurants. Dehghan, Dugger, Dobrzykowski, and Balazs (2014) also stated

that 32% of those surveyed stated that reducing menu variety is bad business practice for

fast food restaurants. When it comes to restaurant menus, size doesn’t matter but variety

does, according to a Technomic survey report published recently, showing that restaurant

guests will continue to prioritize creativity on the menu (Tristano, 2013). Thus, the

importance of menu variety is emphasized not only by academic researchers, but also by

industry experts, insiders, and practitioners.


57

Food safety is defined as the proper handling of food during production,

processing, storage, transportation, and handling in order to ensure the distribution of

healthy and safe food (Giray & Soysal, 2007). Another way to look at food safety is that

it is the opposite of food risk, i.e. as the probability of not contracting a disease as a

consequence of consuming a certain food (Grunert, 2005). None of the studies discussed

in the food quality section examined the impacts of food safety on customers’ decision-

making process. However, Knight et al. (2007) conducted a study in the United States to

find out how food safety affects customers’ decision making choices—choices such as

which restaurant to visit. The data for their study was gathered from telephone interviews

conducted with 1,014 randomly selected United States adults. Their main findings were

that a substantial number of consumers think about food safety in general, and they

consider it particularly when eating at restaurants. Likewise, J. Ali and Nath (2013)

conducted a study in India and collected data from 618 urban respondents eating at

family friendly and fast food restaurants and found food safety as the top rated factor

impacting customer satisfaction. In 2015, in United States, food safety in the restaurant

industry came into prominence with the E.coli and Norovirus outbreaks at Chipotle

restaurants in multiple states, which forced the CEO Steven Elis to publicly apologize for

failure to secure food safety (Mohney, 2015). Another report focused on the cost of this

outbreak on Chipotle’s profit. Recently Chipotle warned in an SEC filing that same-store

sales may plunge as much as 11% and profits could fall 26% in the fourth quarter because

of an E. coli outbreak resulting a 20% loss in share prices for 2015 (Monica, 2015). Thus,

food safety in the restaurant industry is of great importance. The subject hamburger chain

takes food safety very seriously. When it comes to food safety, there are no cutting
58

corners and compromises — food safety is our highest priority (Z. Diaz, personal

communication, October 11, 2015).

As mentioned earlier, healthy meal option was found as an important factor of

customer loyalty in the restaurant industry by Namkung and Jang (2007). The same study

found it statistically insignificant in determining customer satisfaction in the restaurant

industry. However, Namkung and Jang (2008) and Hyun (2010) did not find healthy meal

options important in the restaurant industry. Industry research also finds that the

availability of healthy meals is important. According to the NRA (2014), 87% of quick

service restaurant operators say their customers pay more attention to the nutritional

content of their food than they did 2 years ago. Additionally, the NRA has found that

65% of adults consider healthy menu options while they are choosing a quick service

restaurant. NRA research also has found that health and nutrition continue to be very

important to consumers when dining out—more than seven out of 10 consumers say they

are more likely to visit a restaurant that offers healthy options. However, Namkung and

Jang (2008) and Hyun (2010) did not find healthy options statistically significant.

Freshness of the food, a crucial intrinsic value of food, refers to the fresh state of

food and it is related to the crispness, juiciness, and aroma of the food (Namkung & Jang,

2007). However, Namkung and Jung (2007, 2008) didn’t find food freshness as an

important indicator of customer satisfaction in the mid- to upper-class restaurant in the

United States. But, freshness of the food was the most important determiner of customer

satisfaction among Malaysian fast food customers (Hummel & Murphy, 2011). The

importance of fresh food in the fast food industry is so great that a new fast food concept

named People Dedicated to Quality( PDQ) was being conceptualized in 2011, with the
59

focus being on fresh locally sourced ingredients, and now is operating in 42 locations in

Alabama, Florida, Georgia, North Carolina, Nevada, South Carolina and Texas (Bradley,

2015).

Physical environment. Physical environment refers to the manufactured physical

setting and conditions which can be controlled by restaurateurs (Han & Ryu, 2009).

Environment in this study refers to the physical and sanitary condition of the interior and

exterior of the restaurant including sidewalk, parking lot, garden area, building exterior,

menu boards: interior and exterior, positioning of the marketing materials, dining room,

restroom, chairs and tables, counter area, etc. Maintaining these are important, as 54% of

United States consumers consider environmental quality while selecting a fast food

restaurant (NRA, 2014).

Making the atmosphere more pleasant and innovative is essential for restaurants’

success, as customers consciously or unconsciously sense the physical surroundings

(décor, artifacts, music and layout) before, during, and after the meal when dining out in

a restaurant (Han & Ryu, 2009). Thus, the importance of the physical conditions in the

restaurant setting cannot be ignored. Restaurants should invest in improvements to the

interiors and exteriors of their dining facilities to create a pleasant, unique ambiance for

their patrons and to enhance their sense of well-being (Kim, Jeon, & Hyun, 2012).

Pleasant music should be chosen to ensure that patrons feel entertained, thus experiencing

higher levels of well-being (Kim, Jeon, & Hyun, 2012). In this section, 12 empirical

studies (Ali & Amin, 2014; Ali, Omar, & Amin, 2013; Barber, Goodman, & Goh, 2011;

Chow et al., 2007;Han & Ryu, 2009; Hosseini et al., 2014; North & Hargreaves, 1996,

1998; Ryu & Han, 2010, 2011; Ryu & Jang, 2008; Wilson, 2003) will be examined to
60

determine the impact of physical environment on the restaurant setting.

Chow et al. (2007) examined the impact of physical environment in the context of

the full service restaurant in China. They used a self-administered survey questionnaire to

collect 340 responses. The results of the structural equation modeling suggested that

physical environment is an important predictor of service quality (Chow et al., 2007).

Following Chow et al. (2007), Ryu and Han (2010) collected data from 360 customers at

fast casual restaurants via a self-administered questionnaires in the United States. The

results of the regression analysis suggested that physical environment is the second most

important factor of satisfaction at fast casual restaurants while food quality registered at

the top (Ryu & Han, 2010). Thus, physical environment plays an important role in the

context of full service and fast casual restaurants.

Ali et al. (2013) examined the impact of physical environment as a whole in the

hotel industry in Malaysia similar to Chow et al. (2007) and Ryu and Han (2010). Ali et

al. (2013) collected data from 280 guests of resort hotels using a survey questionnaire and

used structural equation modeling to assess the model. The major findings were that

guests with higher perceptions of the physical environment are more likely to have a

positive image of the hotel and value for money and are also likely to revisit the

establishment more often (Ali et al., 2013). Ali et al. (2013) was replicated by Ali and

Amin (2014) in the Chinese resort hotel. A total of 500 questionnaires were distributed

by Ali and Amin, and 170 were returned with 35% response rate. The result of the study

suggested that customers who have higher perceptions of the physical environment of the

restaurant they visited are more likely to have positive emotions, increasing customer

satisfaction, and behavioral intentions (Ali & Amin, 2014).


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The above-mentioned empirical studies examined environment as a global

variable while Ryu and Jang (2008), Han and Ryu (2009), and Ryu and Han (2011)

examined physical environment in terms of its attributes. Ryu and Jang (2008) proposed a

conceptual model to explore how customers’ perceptions of dining environments

influence emotion and behavioral intention in the full service restaurant setting in the

United States. Using a structural equation modeling analysis, Ryu and Jang showed that

facility aesthetics, ambience, and layout had significant effects on customer pleasure

while facility aesthetics and employees significantly influenced arousal. In addition, the

results indicated that facility aesthetics had direct influences on behavioral intention.

Lighting was deemed important to determine behavioral intention (Ryu & Jang, 2008).

On the other hand, Han and Ryu (2009) divided the environment into three

distinct parts—décor and artifacts, spatial layout, and ambient conditions—to determine

the impact on satisfaction in the full service restaurant setting in the United States. They

used a total of 279 cases from a survey to assess the overall fit of the proposed model to

test the hypotheses using structural equation modeling. The results suggested that décor

and artifacts had a significant positive effect on customer satisfaction (Han & Ryu, 2009).

However, spatial layout and ambient conditions had no significant direct effect on

customer satisfaction (Han & Ryu, 2009). Following Han and Ryu (2009), Ryu and Han

(2011) also looked at the attributes of the physical environment in the full service

restaurant settings. Using a structural equation modeling analysis, Ryu and Han (2011)

showed that facility aesthetics, lighting, and layout had significant effects on

dissatisfaction. Moreover, dissatisfaction exerted a direct influence on customer

satisfaction and customer loyalty (Han & Ryu, 2009).


62

On the other hand, Barber et al. (2011) focused on the importance of cleanliness

in the restaurant environment. They analyzed collected data to see if there is a correlation

exists between physical environment service quality attributes and repeat patronage. The

Results of Barber et al. (2011) indicated decisions to return to restaurants were based

upon cleanliness attributes, and these results are meaningful because they suggest the

importance of continued education and the importance of establishing benchmark scores

to track customer cleanliness perceptions in service organizations (Barber et al., 2011).

The subject hamburger chain’s focus on sanitation and cleanliness surpasses all other fast

food hamburger chain in New York City, as it was named the cleanest restaurant in New

York City in 2014 (Z. Diaz, personal communication, October 11, 2015).

North and Hargreaves (1996) examined the effect of music on ambient condition

in a college cafeteria. The authors found that customers liked the cafeteria more if they

liked the music played at the cafeteria. North and Hargreaves (1996) found a positive

relationship between music and the liking of a restaurant. On a follow-up study in 1998,

North and Hargreaves (1998) investigated whether affective responses to music could

influence the perceived characteristics at restaurant environments. The results of the

North and Hargreaves (1998) suggested that different musical conditions influenced

subjects’ perceptions about the cafeteria and purchase intention, thus validating the

finding of North and Hargreaves (1996).

Extending research by North and Hargreaves (1996, 1998), Wilson (2003)

investigated the effect of music on perceived atmosphere and purchase intentions in a

restaurant in Australia. Wilson collected data from 300 customers at a full service

restaurant. Wilson indicated that different types of music had different effects on
63

perceived atmosphere and the amount patrons were prepared to spend. Wilson found that

classical, jazz, and popular music were associated with patrons being prepared to spend

the most on their main meal. Wilson also found that customers were willing to spend a

significantly lower amount of money in the absence of music and when easy listening

music was played. Hosseini et al. (2014) examined the effects of physical environment in

a retail environment and found atmosphere and music to play an important role in

formulation customer perception. Thus, music is an important factor of restaurant setting,

and it will be interesting to see its impact at the subject hamburger chain.

The aforementioned empirical studies established the importance of the

environment in the restaurant backdrops. Chow et al. (2007), Ryu and Han (2010), Ali et

al. (2013), and Ali and Amin (2014) examined physical environment as a global variable.

On the other hand, others examined physical environment in terms of its attributes—

spatial layout (Han & Ryu, 2009; Ryu & Han, 2011; Ryu & Jang, 2008), cleanliness

(Barber et al., 2011), interior design and décor (Han & Ryu, 2009), ambient condition

(Han & Ryu, 2009; Hosseini et al., 2014; Ryu & Jang, 2008), facility aesthetics (Ryu &

Han, 2011; Ryu & Jang, 2008), lighting (Ryu & Han, 2011; Ryu & Jang, 2008) and

music (Hosseini et al., 2014; North & Hargreaves, 1996, 1998). Based on these empirical

studies, the ‘KSM for QSR’ model adopted spatial layout and seating arrangement,

sanitation, interior design and décor, and ambient condition as the attributes of physical

environment.

Spatial layout refers to the arrangement of objects, and it is highly salient to

customers in a restaurant where ample space is essential for moving around and sitting in

comfortably (Han & Ryu, 2009). Besides the above-mentioned studies, studies
64

(Harrington et al., 2012; Hussain & Ali, 2015; Namkung & Jang, 2008; Sulek & Hensley,

2004) mentioned in other sections of this chapter also found spatial layout important in

restaurant settings.

Cleanliness is the appearance of the restaurant that improves the atmosphere

which affects customers’ feelings towards the restaurant (Hussain & Ali, 2015). Besides

Barber et al. (2011), Andaleeb and Caskey (2007), Markovic, Raspor, and Šegaric

(2010), Min and Min (2011), Harrington et al. (2012), Dube et al. (2015), and Hussain

and Ali (2015), studies discussed in other sections also found cleanliness to be a

statistically important factor of consumer satisfaction. The cleanliness, or sanitation, of

the restaurant in current study refers to the cleanliness of the overall restaurant, which

includes outside area, building, restroom, dining room, customer service counter, and

kitchen.

Décor and interior design contribute to the attractiveness of the physical

environment of a restaurant. It includes the color schemes of the walls, ceiling and wall

decorations, pictures and paintings, plants and flowers, tableware, linens, floor coverings,

and furniture, creating an overall aesthetic impression (Han & Ryu, 2009).

Ambient conditions are intangible background characteristics—characteristics

such as nice smells, pleasing music, a comfortable temperature, a low noise level, and

adequate lighting—that generally have a subconscious effect on customers’ perceptions

and influence their responses to the environment. All of these things, harmonizing with

other elements in a restaurant, may result in customers having more favorable perceptions

of an operation and evaluating their experiences more positively (Han & Ryu, 2009).

Convenience. The NRA (2014) showed that 72% of United States consumers
65

consider convenience while selecting a fast food or fast casual restaurant. Convenience is

related to the customers’ desire to conserve time and effort, and an increase in

convenience is associated with an increase in satisfaction (Kimes, 2008). Over the years,

many researchers have examined the importance of convenience to customer satisfaction

in the restaurant industry. A positive and statistically significant relationship exists

between convenience and customer perception (Hosseini et al., 2014). After a review of

the literature, the researcher found location (Harrington et al., 2012; Min & Min, 2011;

Sharkey, Johnson, Dean, & Horel, 2011), hours of operation (Andaleeb & Caskey, 2007),

parking (NRAt, 2014) and access to transportation (J. Ali & Nath, 2013; Min & Min,

2011) to be some of the important attributes of convenience in the restaurant industry.

Availability of location within close proximity from home and workplace is found

to be an important factor of customer satisfaction in the restaurant environment.

Harrington et al. (2012) and Min and Min (2011) empirical studies mentioned previously

found location is a frequent determiner of a positive experience in the quick service

segment. Upadhyay, Singh, and Thomas (2007) investigated the impact of location in the

context of the Indian restaurant industry. The authors collected and analyzed 300

responses. The findings of their study supported the notion that location is considered as

the fourth important choice criteria in selection of restaurants. Those findings sync well

with the results of Kokko (2005), who also found location as the fourth most important

criteria in the minds of customers while selecting a restaurant.

Spatial access to fast food, in terms of proximity and coverage, is associated with

frequency of fast-food meals (Sharkey et al., 2011). Increased distance to the nearest fast

food restaurant from home or workplace is associated with the decreased frequency of
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fast food meal (Sharkey et al., 2011). If a fast food restaurant is within close proximity

from customers’ home and workplace, they will frequent the restaurant more often than if

it was far from home.

Andaleeb and Caskey (2007) found hours of operation not to be an important

factor of customer satisfaction in a college cafeteria. They believed that it is not

important at the college cafeteria because a college cafeteria is usually open when the

campus is open. Thus, it might be important in the case of fast food restaurants as more

and more restaurants, including the subject hamburger chain, are offering extended hours,

and many are offering 24-hour service including the subject hamburger chain.

In the United States, 65% of consumers consider easy access to parking while

selecting a fast food or fast casual restaurant (NRA, 2014). Besides the NRA study, not a

single academic study explored the importance of parking on customer satisfaction.

However, since the NRA found it to be important, it should be further studied. Parking

becomes very important in urban centers like New York City, where finding street

parking becomes very challenging to almost impossible.

Accessibility in the current study refers to the easy access to a restaurant via either

private or public transportation, and it is found to be an important factor when customers

chose a restaurant. Customers of the quick service restaurant are more likely to visit a

restaurant that has easy access (Min & Min, 2011). Accessibility is an important deciding

factor when customers eat out at a fast food restaurant (J. Ali & Nath, 2013).

Customer-facing technology. Technology is quickly becoming a part of

American life, and more consumers are showing an increasing interest in using

technology at restaurants (NRA, 2014). Data has revealed that 32% of the adults in the
67

United Sates stated that availability of social media platforms, such as Facebook or

Twitter, is a factor when they choose a restaurant (NRA, 2014). Deployment of

technology comes at a cost, but it can enhance customer satisfaction in many ways

(Kimes, 2008). Technology can improve speed of service by reducing the order-taking

time by using smart phone apps or handheld devices, reducing food production time

through the use of kitchen display, tightening service time through the use of table

management systems, shortening payment time through handheld devices, and cutting

turnaround time through the use of communications technology (Kimes, 2008). Greater

control over service encounters enhances customer satisfaction, and technology can give

customers that control by allowing them to choose the time they eat, by minimizing their

wait, or by choosing their desired table (Kimes, 2008).

Even though the full extent of the effect of technology on customer satisfaction in

the restaurant industry is not fully understood by academic researchers, industry experts

and practitioners have spoken about its importance. Thus, technology ought to be part of

this study as an independent variable. Therefore, technology is being added as a

multidimensional construct with attributes including online ordering ( Kimes, 2008;

NRA, 2014), Wi-Fi (NRA, 2014), smart phone apps (NRA,, 2014), and social media ( Gu

& Ye, 2014; NRA, 2014).

More and more customers are now preordering via online or smart phone app

because it gives customers control over their time by allowing them to select their food

before arriving at the restaurant (Kimes, 2008). The NRA’s (2014) surveys have found

that 43% of United States consumers place orders online for delivery or take out.

Restaurants are mindful of this trend and are offering online ordering, and Kimes (2008)
68

stated that 38% of casual and fine dining restaurants allowed online ordering through

their own website and others, such as webfood.com, waiter.com, delivery.com, and

foodjr.com. The subject hamburger chain also offers preordering via a smart phone app

and online ordering via its website, which is instrumental in cutting service time (Z. Diaz,

personal communication, October 11, 2015).

In fact, 21% of United States consumers consider technology options, such as

smart phone apps, Wi-Fi connectivity, and ordering kiosks, while selecting a quick

service or fast casual restaurant, and this number goes up to 33% for the young

consumers (NRA, 2014). In another survey, the NRA (2014) found that the majority of

consumers (63%) said that they recently have used restaurant-related technology options,

such as using a smartphone or tablet to find restaurant locations and directions, ordering

takeout and delivery, and looking up nutritional and sustainability information.

However, the researcher of the present study have not found a single empirical

study examining the effect of online ordering, smart phone apps, and Wi-Fi on customer

satisfaction. One of the reasons for the lack of academic study in this area is that these are

relatively new phenomena for the past four/five years that impacting restaurant industry,

but increasingly they are becoming important (S. Lockyer, personal communication,

November 11, 2015). Because of its importance as evident by the NRA survey and

Kimes’ work (2008), these factors are important enough to be explored in the current

study.

Social media employs mobile and web-based technologies to create highly

interactive platforms via which individuals and communities share, create, discuss, and

modify user-generated content (Kietzmann, Hermkens, McCarthy, & Silvestre, 2011).


69

Social media is a group of Internet based applications that are built on the ideological and

technological foundations of Web 2.0, and they allow the creation and exchange of user

generated content (Kaplan & Haenlein, 2010). The types of social media include social

networks (Facebook, Myspace, and LinkedIn), micro-blogs (Twitter, Plurk, and Friend

Feed), reviews and ratings sites (Yelp, Amazon, and Trip Advisor), video sites (YouTube

and Vimeo), and more (Karimi & Naghibi, 2015). The subject hamburger chain puts

heavy emphasis on social media as well with a strong presence in Facebook, Twitter and

Instagram (Z. Diaz, personal communication, October 11, 2015).

Social media plays an important role in today’s consumer market, as more and

more people are spending increasing time on social media, and their purchase decisions

are being heavily influenced by social media (Gu & Ye, 2014). Additionally, since social

media has become an important source of product information, consumers participate in

social media in a variety of ways, ranging from reading blogs to seeking information

from friends on social networks to visiting consumer review forums (Gu & Ye, 2014).

Not a single academic study in the restaurant industry examining the impact of

social media on customer satisfaction has been found for the current research. However,

the NRA has published data on the use of social media in the restaurant industry. The

NRA (2014) data showed that 22% of the United States consumers view social media

pages of the restaurants they visit, and 5% follow restaurants on Twitter. Seven of 10

quick service restaurant operators said that they planned to invest more in social media

marketing in 2014 as younger consumers are much more likely than older adults to

communicate with restaurants via social media (NRA, 2014). The NRA, in its 2014

Restaurant Industry Forecast market research, also revealed that 68% of quick service
70

restaurants plan to increase their marketing budget for social media while only 2% plan to

cut spending in social media. Thus, due to its importance demonstrated by NRA study,

social media will be included in this study to determine its effect on customer satisfaction

at the subject hamburger chain.

Price and value. As reported by the 2014 Restaurant Industry Forecast (NRA,

2014), 85% of the United States consumers consider value while selecting a fast food

restaurant, and 23% of the United States consumers say they will stay away from a fast

food restaurant due to high prices (Tristano, 2013). Thus, price and value are important in

the context of fast food environment as Dube et al. (2015) stated that customers place a

high premium on price, making it a strategic priority for the restaurants in question. It is

likely that when customers do not associate price and value to what the restaurants are

offering, they will give their business elsewhere (Dube et al., 2015). Therefore, it is

important to understand price and value and the impact price and value have on customer

satisfaction. Price fairness indicates reasonable prices of the food items served in a

particular restaurant as compared to those charged by competing restaurants which

maintain the same quality standards (Vanniarajan, 2009). Many researchers over the

years have examined the impact of price and value on customer satisfaction in the

restaurant industry and found it to be an important factor (Ali & Nath, 2013; Gupta,

McLaughlin, & Gomez, 2007; Haghighi et al., 2012; Homburg, Hoyer, & Koschate,

2005; Pei & Ayub, 2015; Ryu & Han, 2009; Steiner, Siems, Weber, & Guhl, 2013). Only

Pedraja Iglesias and Jesus Yagüe Guillén (2004) found price and value not to be an

important factor of customer satisfaction.

Pedraja Iglesias and Jesus Yagüe Guillén (2004) conducted a study to determine
71

the effect of price on customer satisfaction in the restaurant setting in Spain. The authors

collected data from 156 people. The researchers observed that the total perceived price

does not exercise a significant effect on the level of customer satisfaction in the

restaurant. Thus, the total sacrifice (monetary and non-monetary) that is perceived to be

associated with the transaction at a restaurant does not significantly affect satisfaction

(Pedraja Iglesias & Jesus Yagüe Guillén, 2004).

Likewise, Homburg et al. (2005) investigated the impact of price increase on

customer satisfaction in the German restaurant industry. Their results suggested that as

satisfaction goes higher, the negative impacts of price decreases on the repurchase

intention, thus proving the fact that there is an inverse relationship between the two; if

one goes up, the other goes down. If price goes up, satisfaction goes down (Homburg et

al., 2005).

Gupta et al. (2007) findings contradicted the findings of Pedraja Iglesias and

Jesus Yagüe Guillén (2004). Gupta et al. (2007) set out to determine the principal drivers

of customer satisfaction in a restaurant chain in the United States. Theirs was a major

study that analyzed more than 80,000 guest surveys regarding their overall restaurant

experience. A robust and statistically significant model showed that restaurants that pay

attention to appropriate cost of the food among others have the greatest chance to

increase guests’ satisfaction and the return intention of customers (Gupta et al., 2007).

Han and Ryu (2009), a study mentioned previously, found similar results as Gupta et al.

(2007) about the impact of price on satisfaction in the full service and fast food

restaurants in the United States. Haghighi et al. (2012) conducted a study in Iran and

collected data from 268 customers. They conducted structural equation modeling for data
72

analysis and hypothesis testing. The obtained results showed that perception of price

fairness among others had a positive impact on customer satisfaction and trust (Haghighi

et al., 2012).

According to Steiner et al. (2013), the highest level of customer retention occurs

when consumers are most satisfied with the price of the products or services. The authors

suggested that companies could increase customer retention by appropriately

manipulating the price perception of consumers through promotion, rebates, low-price

strategy, and bundling. This is an important point as the current study attempts to

measure price perception against customer satisfaction, not the actual price. J. Ali and

Nath (2013) conducted a study in India and collected data from fast food and family style

restaurants. Data analysis suggested that food price is one of the seven most important

factors in making restaurant choices for eating out (J. Ali & Nath, 2013).

Pei and Ayub (2015) conducted a study at a hospital cafeteria in Malaysia. They

collected data from 50 patients and 50 employees of the hospital to measure the impact of

price on the level of dissatisfaction with the hospital cafeteria. The results of the Pei and

Ayub (2015) revealed that high price was one of the two most important factors of

dissatisfaction among employees and patients.

According to the industry expert (Gala, 2013), another aspects of price and value

in the fast food market is that customers do not mind paying more for high quality

products. When customers shop at fast food restaurants, they look specifically for value,

rather than price. A study from Phoenix Marketing International found that customers do

not mind paying higher prices at restaurants as long as there is a perceived value in the

item or bundled items (Gala, 2013). Gala (2013) also mentioned that after viewing quick-
73

serve ads, participants were asked if they would visit that particular restaurant within 30

days. Ads with value messages drove 20% more participants to report an intent to visit

than ads without value messages (Gala, 2013). It will be interesting to find out the

individual contribution of price and value to satisfaction in the subject hamburger chain.

Thus, the impact of price on satisfaction at fast food and full service restaurants is

established by all the above mentioned studies except Pedraja Iglesias and Jesus Yagüe

Guillén (2004). Industry experts also point to the importance of price and value to

determine the customer satisfaction in the restaurant industry. Besides price and value,

other factors also impact satisfaction at restaurants and one such factor is order accuracy.

Order accuracy. Order accuracy in the current study refers to completing a

customer’s order accurately and error free. It is important to fill a customer’s order

correctly, as 96% of United States’ consumers said order accuracy is important or very

important when they are choosing a fast food restaurant (Tristano, 2013). Recently, there

has been an intense focus on completing orders with accuracy among restaurant

operators. This is especially true when customers are shopping via drive-thru or take out

simply because once customers leave the restaurants with the food, the opportunity to

correct an incorrect order is no longer available (Duncan, 2015). The subject hamburger

chain in the current study also focuses on filling orders correctly by repeating orders

multiple times (after taking order, while collecting money and while handing out the

order) during the transaction (Z. Diaz, personal communication, October 11, 2015).

Markovic et al. (2010) conducted a study to determine the impact of multiple

variables in restaurant settings. They collected data from 32 restaurants in Croatia.

Restaurants that were included in Markovic et al. (2010) study represented different types
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of dining establishments such as fine-dining restaurants, fast food restaurants, and

pizzerias. Data analyses suggested that one of the most important expectations of

customers at restaurants is an accurate bill (Markovic et al., 2010). Unfortunately,

Markovic et al. (2010) did not measure the impact that filling an order accurately has on

customer satisfaction.

The importance of order accuracy on customer satisfaction is not fully understood

in the context of the restaurant industry because no academic study has addressed it yet.

Nevertheless, it is an important aspect of customer satisfaction in the fast food

environment. Industry experts (Duncan, 2015; Little, 2015; Oches, 2012 & 2014) have

also written about its importance. Nothing beats driving away with a bag of food from a

fast food restaurant and discovering when you get home that your order is wrong (Tice,

2012). Imagine leaving a fast food restaurant, and upon arrival at home, only to find out

the only chicken sandwich that was ordered for 109 years old grandmother is missing. It

is definitely not a pleasant experience. Missing an item from an order is definitely a deal

breaker.

One of the two most important gauges of drive-thru performance in the quick

service restaurant is accuracy of orders (Oches, 2012). Traditionally, order accuracy is a

top concern for fast food operators (Oches, 2014). Fast food managers’ biggest focus

right now is improving the drive-through accuracy because once customers leave and the

order is not right, it is a lot more difficult to recover those guests than someone who is

dining in (Duncan, 2015). To improve order accuracy, McDonald’s, the industry sales

leaders, is quietly rolling out a new initiative called "Ask, Ask, Tell" during which drive-

through crews will repeatedly verify the correct order at three separate times (when a
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customer orders, pays, and receives a meal) to improve accuracy (Little, 2015).

Thus, due to its importance as expressed by industry experts and insiders and to

understand its effect on customer satisfaction in the fast food environment, the order

accuracy construct is being added in to the current study. It contains four attributes. When

visiting a restaurant, it is important to receive all items ordered along with all necessary

condiments and supplies, such as napkins, fork, spoon, knife, etc. It is also important to

receive proper change when conducting the transaction with cash as mentioned by

Markovic et al. (2010).

Speed of service. In service industries like restaurants, firms compete with each

other on the basis of providing fast service along with other deliberate mechanisms such

as price and value. This section discusses the significance of speed of service in the

restaurant industry. Tristano (2013) reported that 90% of consumers in the United States

said that speed of service is an important factor when they are choosing a fast food

restaurant. Speed of service in the current study refers to the time it takes to serve a

customer at a restaurant. Usually, the time starts as soon as a customer enters a restaurant,

and it stops when the customer has been served (Z. Diaz, personal communication,

October 11, 2015). Speed of service is an important component of customer satisfaction

in restaurants. Kimes (2008) stated that if speed of service can be accelerated, more and

more customers could be served, resulting in improved service velocity and satisfaction

because faster service results in higher customer satisfaction in the fast food restaurants.

Chang and Huang (2014) also stressed the importance of addressing the long waiting

period at restaurants to increase customer satisfaction as it affects customer evaluation of

service providers. Speed of service is much more important at fast food than other
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segments and the subject hamburger chain focus the most on speed of service (Z. Diaz,

personal communication, October 11, 2015). Therefore, managers at fast food restaurants

should focus on improving speed of service since customers place greater value on faster

service and are willing to pay more for it (Parsa, Gregory, Self, & Dutta, 2012). Seven

empirical studies dealing with speed of service in the restaurant industry were examined.

Some of them (Allon, Federgruen, & Pierson, 2011; Dube et al., 2015; Dube-Rioux,

Schmitt, & Leclerc, 1989; Iqbal, Whitman, & Malzhan, 2012; Wang & Chen, 2012)

found speed of service as an important factor while others (Harrington et al., 2012;

Namkung & Jang, 2007) found it as an unimportant factor in the restaurant industry.

Dube-Rioux et al. (1989) investigated the impact of speed of service in the

restaurant industry in an interesting way. They divided the restaurant visit into three

phases—the beginning, meal delivery, and the end. The authors hypothesized that waiting

time at different phases would have different impacts on satisfaction. They found the

same length of a delay had different consequences depending upon when it happened.

According to Dube-Rioux et al., customers got annoyed at the beginning and at the end of

their restaurant visit while, on the other hand, seemed to be more understanding and

forgiving when the actual meal was delayed. Therefore, a delay in providing service is

not conducive to favorable customer perception.

Wang and Chen (2012) conducted a study in the full service restaurant and found

speed of service as the second most important factor of overall service quality and

perceived value, and perceived service quality and perceived value were related to

customer future behavioral intention. However, the findings of Namkung and Jang

(2007), a study previously discussed, and Harrington et al. (2012) contradicted the
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findings of Wang and Chen (2012). Both studies (Harrington et al., 2012; Namkung &

Jang, 2007) found speed of service is not an important factor in the context of full service

restaurant to determine satisfaction. In addition, Harrington et al. (2012) found speed of

service as an irrelevant factor of satisfaction at casual restaurants. Thus, the impact of

speed of service differs in the full service and casual service restaurant segments.

However, the importance of speed of service is certain in the fast food industry. It

is different when people go to a fast food restaurant than a full service or casual

restaurant. Usually, they have much less time and are in a rush to get in and get out while

visiting a fast food restaurant. Thus, it is not surprising to see that all explored empirical

studies found speed of service to be an important factor of customer satisfaction at fast

food restaurants. Allon et al. (2011) conducted a major study in the United States to

determine the impact of waiting time in the fast food industry. They collected data from

388 outlets belonging to McDonald’s (173), Burger King (92), Wendy’s (62), White

Castle (42), Dairy Queen (10), and Steak ’n Shake (9). They conducted data analysis via

structural equation modeling. The results of the Allon et al. (2011) suggested that a

reduction in waiting time significantly improved satisfaction and gave the fast food

restaurants ability to increase market share. Harrington et al. (2012) also found speed of

service as a determinant of positive experience at fast food restaurant. They collected data

from 575 people in the southwest United States patronizing fast food, casual dining, and

full service restaurant. The results of the Harrington et al. (2012) suggested that speed is

an important determinant of positive experience at fast food while speed was found

insignificant at full service and casual restaurants.

Iqbal et al. (2012) also examined the impact of speed of service in the fast food
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environment in the United States. The results of their study indicated that high wait time

has a negative effect on customer satisfaction and many customers chose not to stay in

the line when wait time was high, resulting in a direct hit on satisfaction and sales.

Finally, Dube et al. (2015) investigated the importance of speed of service in three fast

food restaurants in South Africa and found speed of service as one of the most important

factor of satisfaction.

Another aspect of speed of service in the fast food industry is that the tolerance of

long wait time differs based on the time of day—breakfast, lunch, dinner, and late night.

There is a consensus among fast food operators in the Unites States that customers will

be less forgiving during breakfast and lunchtime because of limited time available to

spend on meals (Z. Diaz, personal communication, October 11, 2015). Usually, people

are rushing to work after breakfast and lunch due to limited time. On the other hand, they

will be much more forgiving during dinner and late at night because they are not as time-

starved as during breakfast and lunch. While speed and consistency are important

throughout the day, breakfast and lunch, in particular, have certain urgency for many

guests while moving into snack, dinner, and late night, fast food operators interpret that,

in the guest’s mind, there may be a little less of the time-starved nature of their visit

(Duncan, 2015). The current study collects speed of service data at different times of the

day to analyze these differences at the subject hamburger chain.

Here is a reality check. Even though the importance of speed of service is

undisputed in the fast food industry, it is getting much slower at fast food lanes. Tice

(2013) cited several reasons why fast food is getting slower; as chains have diversified

beyond simple burger-and-fries menus, it is difficult to prepare orders as quickly, and


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consumers also eat out more often now, which leads to longer lines. Then, there is the

challenge of managing the difference between perceived wait and actual wait (Choi &

Sheel, 2012). Usually, perceived wait at the fast food restaurants is far greater than actual

wait (Choi & Sheel, 2012). This is an important distinction as the current study deals with

the perceived wait rather than the actual wait. Speed of service is also linked to improved

market share as Allon et al. (2011) stated that restaurants can improve market share

significantly by relatively modest reductions in waiting time. Therefore, waiting time

reduction pays off handsomely in the fast-food industry. Since the speed of service

impacts customer satisfaction greatly in the fast food industry and has the potential to

increase market share, its impact ought to be studied at the subject hamburger chain.

Summary

In summary, a review of the current literature has revealed that many empirical

studies exist in the context of the restaurant industry establishing the importance of

customer satisfaction. These studies have examined the impact of service quality, food

quality, physical environment, convenience, price, and value, and speed of service on

customer satisfaction. No such study has ever been conducted at the subject hamburger

chain, creating the need to conduct the current study. Existing literature has not addressed

the importance of order accuracy and customer-facing technology on customer

satisfaction in the restaurant environment. However, the Restaurant Industry Forecast

(NRA, 2014) has found their importance in determining customer satisfaction in the

restaurant industry. Industry experts and practitioners also stressed their importance to

dictate satisfaction in the restaurant environment. So, there is a need to study the effect of

order accuracy and technology on customer satisfaction. Finally, the researcher of the
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current study has not found any study that considered all the variables and their related

attributes that are used in the current study to determine customer satisfaction in the

restaurant industry. This has created the need to conduct the current study.

Having considered and identified the significant constructs in the existing

research, the current study will proceed with a review of the research questions, related

hypotheses, and the research methodology. It will bring to further study the constructs

considered in the current study—service quality, food quality, physical environment,

convenience, customer-facing technology, price and value, order accuracy, and speed of

service. It will thereby detail the selection of data sources, sampling, data analysis

procedures, data gathering instrument, validity, reliability of the data gathering

instrument, and data gathering procedures in the next chapter.


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CHAPTER 3

METHODOLOGY

Chapter 1 carried out an evaluation of customer satisfaction on the basis of the

transaction specific model, identifying independent variables such as constructs of

service quality, food quality, physical environment, convenience, customer-facing

technology, price and value, order accuracy, and speed of service.

Chapter 2 investigated the existing knowledge about customer satisfaction and the

independent variables outlined in the previous paragraph, establishing that customer

satisfaction in the restaurant industry is influenced by such variables as service quality,

food quality, physical environment, convenience, price and value, and speed of service.

The researcher of the current study did not locate any significant academic study that

examined the effects of order accuracy and customer-facing technology on customer

satisfaction in the restaurant industry. However, the Restaurant Industry Forecast (NRA,

2014) and industry journals discussed the importance of order accuracy (Duncan, 2015;

Little, 2015; Oches, 2012, 2014; Tice, 2012; Tristano, 2013) and customer-facing

technology (Gu & Ye, 2014; Kimes, 2008). Chapter 2 also established that there is a

statistically significant relationship between customer satisfaction and customer loyalty in

the context of restaurant industry. However, the researcher of the current study did not

find any empirical study that included all variables, which are included in the current

study, to understand customer satisfaction in the context of the restaurant environment.

Chapter 3 discusses the research design and the rationale behind the design,

methodology, the strengths and weaknesses of the methodology, population, sample,

moral and ethical issues, survey instrument, validity and reliability of the instrument, data
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collection, data analysis, and the assumptions of the study in detail. This chapter

concludes with a summary of Chapter 3 and a brief introduction to Chapter 4. The

framework of the current study includes the following three research questions.

1. Which variables related to dining at the subject hamburger chain significantly

influence customer satisfaction?

2. Which demographic variables significantly influence customer satisfaction at the

subject hamburger chain?

3. To what extent are customer satisfaction and customer loyalty related?

Research Design

A fast food hamburger restaurant chain in the United States served as the setting

for the current study. By design, this is a quantitative cross-sectional study and aims to

determine the most important factors of customer satisfaction at the subject hamburger

chain. The current study also examined the effects of demographic variables on customer

satisfaction at the subject hamburger chain. Finally, the current study explored the

relationship between customer satisfaction and customer loyalty at the subject hamburger

chain.

Creswel (2008) identified three criteria for a quantitative study: collecting and

analyzing numerical data, measuring distinct attributes of the subject matter, and

comparing groups or relating factors. In the current study, data was collected in numeric

form by using an instrument, which was self-developed, industry experts validated and

pilot tested. Like the example provided by Sulek and Hensley (2004), the participants

rated their perceptions of actual services and products received at the subject hamburger

chain on a 5-point Likert-type scale. The collected numeric data measures the
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participants’ perceptions of different aspects of the actual product and service received at

the subject hamburger chain.

Finally, the responses of each group based on demographics were analyzed in

order to answer the research questions and test the hypotheses. Since the current study

satisfies all three criteria, it qualifies as a quantitative study. As evidenced by Kivela et al.

(1999a), Andaleeb and Conway (2006), Liat and Chiau (2015), Hussain and Ali (2015),

and Shariff et al. (2015), quantitative research methodology was used by previous

researchers in identifying the determinants of customer satisfaction and loyalty in the

restaurant industry.

Following the example set in the research done by Andaleeb and Conway (2006),

Cronin and Taylor (1992), Pei and Ayub (2015), Sulek and Hensley (2004), and Young

and Soocheong (2010), a cross-sectional design was used in the current study to

determine the factors influencing customer satisfaction at the subject hamburger chain.

Cross-sectional design has three distinctive features: no time dimension, reliance on

existing differences rather than changes following interventions, and demographic groups

based on existing differences rather than random allocation (de Vaus, 2004). All of these

three characteristics are present in the design of the current research study.

The current study does not have a time dimension. Data was collected only once,

as allowed by the subject hamburger chain, in 40 of the chain’s 400 locations, which are

spread out through the mid-western to eastern United States. Every 250th customer in

each location was given the opportunity to complete the survey as dictated by the subject

hamburger chain. The subject hamburger chain restricted the data collection to two times:

the first for the pilot test and the second for the final study. Since there was only one data
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collection opportunity for the final study, a longitudinal study was not feasible because a

longitudinal study requires data collection in multiple phases as mentioned by de Vaus

(2004). Therefore, in the current study, a cross-sectional study is more appropriate.

Namkung and Jang (2008) conducted a similar cross sectional study in the mid-western

and eastern United States to determine the effects of food quality, service quality, and

environment in the context of restaurant industry.

The current study relied on existing differences rather than changes following

interventions. A longitudinal study requires capturing the differences in performance

after implementing intervention measurements based on the initial study (de Vaus, 2004).

Capturing the results of the improvement measurements after the initial study at the

subject hamburger chain is beyond the scope of the current study. Thus, a cross-sectional

design is more appropriate for the current study as it does not require collecting data after

the implementation of the measurements of improvements as stated by de Vaus (2004).

Namkung and Jang (2007) conducted a similar cross-sectional study to determine the

effects of food quality on customer satisfaction and the relationship between satisfaction

and customer loyalty in the mid-western and eastern United States in the context of

restaurant industry.

In this study, demographic groups are based on existing differences rather than

random allocation. Since data was collected only once, there were no opportunities to

compare groups based on demographics on multiple data collection at different points in

time. This is another reason cross-sectional design is appropriate for the current study

because this design does not require comparison of groups on multiple data collection as

stated by de Vaus (2004). Sulek and Hensley (2004) conducted a similar cross sectional
85

study in the southeastern United States to determine the effects of speed of service,

physical environment, food quality, and service quality on satisfaction in the context of

restaurant industry.

Strengths of the Study

One of the major strengths of the study is the support received from the subject

hamburger chain. The chief executive officer of the company showed a personal interest

in the research and assigned the vice president of marketing to work with the researcher.

General managers, district managers, regional directors and vice presidents of operations

of the selected restaurants were asked to cooperate with the research project. To increase

survey return rate, the firm offered an incentive of three free hamburgers to the

participants for completing the survey. The incentive offer of three free hamburgers was

chosen because it has been proven to be effective in increasing response rate at the

subject hamburger chain’s own customer satisfaction survey. Academic studies also

found incentive increase survey response rate as Selm and Jankowski (2006) stated that

incentives to respondents increase survey return rate. A major study (n = 6,162)

conducted by Pedersen and Nielsen (2014) showed that the survey response rate in online

environment can be increased by low-to-no-cost incentives.

Collecting data online via the Survey Monkey platform is another strength of the

study. Data collection via online systems is particularly useful when survey participants

are spread across a large geographic region. The survey participants of this study are

spread across the mid-western and eastern United States. Another advantage of the web-

based data collection is that it allows anonymity as respondents’ personal information

cannot be tracked or collected. To ensure anonymity, the researcher neither collected any
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personal information nor tracked the Internet Protocol (IP) addresses of the respondents’

computers. According to Selm and Jankowski (2006), the main advantages of online

surveys include reduction of costs and time, ease in reaching large numbers of potential

respondents, and the possibility of providing anonymity to participants. Since the data

was collected via the web-based survey, there was no need for data entry as mentioned by

Selm and Jankowski (2006).

Weaknesses of the Study

With a cross sectional research design, data is gathered at only one point in time

(de Vaus, 2004). Thus, in the current study, data was collected only one time. However,

due to intense competition in the fast food industry, frequent changes in consumer

behavior, competitors’ marketing campaigns, and technological advances may cause

consumer opinion to change frequently (NRA, 2014). This means that the results may

have been very different if longitudinal data, which captures the impact of changes in the

market condition, were used. In longitudinal study, data is collected in multiple phases—

pre-intervention and post-intervention (de Vaus, 2004). Usually, after the initial data

collection and analysis, a set of measurements is put into place to address the condition of

the business. Then, a few months later, data are collected once more, and new analyses

are done to determine how the interventions affected the business and to assess the

competitive environment again. The current study lacks this advantage because it is not a

longitudinal study.

The survey was administered only at the subject hamburger chain, which means

that the findings of the study do not apply to the other fast food chains and restaurant

types—fine dining, casual, and fast casual. The current study cannot, therefore, be
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generalized across the fast food industry and the restaurant industry as a whole.

Additionally, data was collected only from the mid-western and eastern United States;

thus, the results cannot be generalized across the United States and, more importantly, the

global fast food market. The lack of generalization issue was acknowledged by Wu and

Mohi (2015), and they recommended that studies should attempt to examine the issues of

concern targeting different samples across different kinds and ratings of restaurants in

other regions with the possibility of comparative studies involving other regions or

countries. N. Terblanche (2015) echoed the same as Wu and Mohi (2015) by stating that

different samples in other restaurant settings might produce alternative insights. Another

weakness of the study is that the subject hamburger chain restricted administering the

survey only to every 250th customer at the selected locations due to operational challenge

and the possibility of conflict with their own customer satisfaction survey.

However, there may be some other dimensions of customer satisfaction that have

not been identified in the ‘KSM for QSR’ model. Future studies should focus on

identifying additional factors significantly influencing the customer perception of

satisfaction that was not identified in this study, such as environmental sustainability,

food source, marketing efforts, humane treatment of animals and brand image. This

weakness was acknowledged by Hung Che Wu and Mohi (2015) as well.

Finally, the respondents neither were asked any open-ended questions nor any

interviews were conducted carrying out the current study. Therefore, the study solely

captured the opinions of the respondents but failed to understand the motives behind the

opinions about the impacts of service quality, food quality, physical environment,

convenience, customer-facing technology, price and value, order accuracy, and speed of
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service on customer satisfaction. According to Dube et al. (2015), the findings of a

research project, which is solely based on survey questionnaires, lacks the ability to have

an in-depth understanding of issues by asking open ended questions. A mixed method

approach, a combination of both qualitative and quantitative methods, would, however,

have provided more useful insights. The need to conduct mixed method study was voiced

by Hussain and Ali (2015), who conducted a study to determine the effects of physical

environment on satisfaction in the restaurant industry.

Population and Sample

The population refers to the total membership of a defined class of people,

objects, or events, and it is very important to have a very clear idea and well-defined

population in mind before sampling (O'Leary, 2010). In the current study, the population

is the customer base of 400 restaurants of the subject hamburger chain across the mid-

western and the eastern United States. The aim in population research is to gather data

from everyone in the population, but this is impractical unless the population is a small,

defined, accessible group (O’Leary, 2010). Since the subject hamburger chain serves

millions of customers every year in its 400 locations, it is impractical to collect data from

all customers. Therefore, sampling techniques were employed to raise to the challenge of

ensuring that the population in this study was represented.

Sampling is the process of selecting elements of a population for inclusion in a

research study, and it attempts to be representative, meaning that the sample distribution

and characteristics allow findings to be generalized back to the population (O'Leary,

2010). Thus, sampling is the process of representing population. A representative sample

size means that the sample distribution and characteristics allow findings to be
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generalized across the population (O'Leary, 2010). Sampling also provides such

advantages as lower costs, greater accuracy of results, and greater speed of data

collection (Cooper & Schindler, 2003).

The subject hamburger chain restricted data collection at 10% of its locations and

allowed distribution of the survey to every 250th customer at each location. The

restriction was put in place to reduce interference with its own customer satisfaction

survey. Thus, following Haghighi et al. (2012) and Dube et al. (2015), address of the 400

locations were placed in a hat, and 40 of them were pulled randomly. These 40 selected

locations served about 400,000 customers during the data collection period. Because of

the restriction imposed by the subject hamburger chain, every 250th customer in the

selected locations received the survey invitation with instructions on the receipt to

complete the survey. Therefore, the current study used a two-tiered sampling frame. In

the first tier, the researcher chose 40 out of 400 restaurants, and in the second stage,

every 250th customer was selected to participate in the survey. Thus, systematic random

sampling was used in the second tiered selection process that involves selecting every nth

case with a defined population (O’Leary, 2010). Kivela, Reece, and Inbakaran (1999b)

used systematic random sampling where every fourth customer was asked to complete

the survey to measure satisfaction in the restaurant industry.

Ethical Issues

de Vaus (2004) mentioned that all social research ought to conform to four broad

ethical principles including voluntary participations, informed consent, no harm to

participants, and confidentiality. A number of steps were carefully taken to conform to

these standards in carrying out the study.


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Approval of the research protocol used in the study was sought from the Human

Subjects Review Committee (HSRC) to meet the research requirement at Wilmington

University. HSRC is the institutional body at Wilmington University to review research

protocols within the university community (faculty, staff, and student) to make sure that

the rights and safety of research subjects are protected ("Human Subjects Review,"

2015). The research protocol was approved by HSRC in August 2015. To partake in the

survey, the participants had to be at least 18 years old to comply with the HSRC

regulation. A letter of consent explaining that participation was voluntary and that

anonymity of the participants would be strictly maintained was shown to the participants

prior to surveying them. Data was collected via Survey Monkey platform, and no

computer IP addresses were collected to maintain confidentiality. The survey responses

are stored in electronic format on a flash drive and secured at a safe deposit box at the

researcher’s bank in New York City. The data will be deleted permanently after 3 years

as recommended by de Vaus (2004). To maintain ethical integrity of the study, besides

these steps, formal permission to conduct the survey was sought from, and granted by,

the subject hamburger chain.

Validity and Reliability

The reliability and validity of the survey instrument is necessary for conducting

any solid empirical study (Lai, 2015; Liat & Chiau, 2015). The quest for validity is the

attempt to eliminate or minimize systematic error while the quest for reliability is the

attempt to eliminate or minimize random error (O'Leary, 2010). A pilot test was

conducted and industry experts were consulted to ensure that the survey instrument was

reliable and valid.


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Validity

An instrument is considered to be valid to the extent that it measures what it is

supposed to measure, and to achieve this, it must be free from systematic influences that

move responses in another direction (Vavra, 1997). The current study focuses on content

and construct validity. Content validity deals with the appropriateness and the

inclusiveness of the questions to the measured construct while construct validity deals

with the extent to which a question represents an underlying construct and the extent to

which the question relates to other associated constructs (Vavra, 1997). To ensure the

validity of the instrument, three industry experts working at the subject hamburger chain

were consulted. One of the experts was a general manager overseeing a restaurant in New

York City while another was a district supervisor managing 10 restaurants in Chicago.

Finally, a marketing professional who was the vice president of marketing at the subject

restaurant chain was consulted. All three experts agreed that the content and construct of

the survey instrument were valid and relevant to the fast food industry.

Reliability

Reliability means the lack of random error. If an instrument produces the same

response repeatedly, it is considered to be reliable (Vavra, 1997). To be confident that the

scores on the attributes of the questionnaire reliably reflect the underlying construct, the

instrument must be highly reliable. Internal consistency tests are useful in assessing the

reliability of an instrument. One of the predominant internal consistency tests is

Cronbach’s coefficient alpha that tests how well each item, or question, in the instrument

is related to each other (Vavra, 1997). A pilot test was done to conduct the Cronbach’s

coefficient alpha tests for each of the constructs to ensure reliability and internal
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consistency of the instrument. The Cronbach’s alpha values from the pilot test are

presented in table one.

Table 1

Cronbach’s Alpha - Pilot Test

Constructs Alpha value

Food quality 0.94

Price/value 0.94

Service quality 0.93

Satisfaction 0.92

Environment 0.90

Convenience 0.90

Loyalty 0.90

Technology 0.87

Order accuracy 0.85

According to Table 1, the Cronbach’s alpha values are greater than or equal to .85

for each of the construct, and according to Hayes (2008), anything over .70 is acceptable.

Therefore, it can be concluded that the instrument used in this study is highly reliable.

Survey Instrument

After a review of the current literature, and industry journals and researches on

customer satisfaction in the restaurant industry, the survey instrument was formulated and

tested on a pilot basis in June 2015 at five locations of the subject hamburger chain in the

eastern United States. Each location received 40 survey questionnaires and was instructed

to administer them throughout the week ending on June 27, 2015. A total of 156 survey
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questionnaires were returned with a return rate of 78%. The responses obtained from the

pilot supported the launch of the full survey with minor changes in the instrument. The

Cronbach’s Alpha for each construct was either greater than or equal to .85. The value of

adjusted R2 for the model was .75 without any of sign of multicollinearity. The full

survey took place in September 2015.

The survey instrument consisted of 48 questions, and 39 of them generated 10

constructs—service quality, food quality, physical environment, convenience, customer-

facing technology, order accuracy, price and value, speed of service, customer loyalty,

and customer satisfaction. A summary of factors, codes, and questions of the survey can

be seen in Appendix B. Q1 was the survey qualifier, which the participants answered

with a yes-no scale. If they answered “yes,” they were not allowed to move forward with

the survey. Respondents were asked about their level of agreement on a 5-point Likert-

type scale ranging from 1 (strongly disagree) to 5 (strongly agree) for Q2 to Q39. An

option to answer “did not observe during the visit,” was also offered. Demographic

information was collected through asking Q41 – Q47. Question 48 asked the participants

to identify which factor they thought most important for the restaurant chain to focus on

in order to improve customer service.

Data Collection and Analysis

In a cross-sectional research design, it is important to obtain a structured set of

data that allows systematic comparisons between cases, or groups of cases (de Vaus,

2004). In this study, data were collected from the selected 40 restaurants of the subject

hamburger chain using the same variables. Only 40 locations were randomly selected

because the subject hamburger chain did not allow more due to potential interference
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with its existing customer satisfaction survey. Out of these 40 locations, seven were in the

East Coast (four in New York and three in New Jersey), and 33 were in the Midwest (six

in Chicago and Cincinnati, five in Indianapolis, four in St. Louis, three in Columbus,

Detroit, and Minneapolis, and two in Nashville).

Data analysis refers to the process of reducing collected data to a manageable

size, developing summaries, searching for patterns, and applying statistical techniques

(Sulek & Hensley, 2004). The researcher sought answers to the research questions, and

tested the hypotheses of the study by deploying statistical technique via Statistical

Package for Social Sciences (SPSS). Rigorous descriptive and inferential statistical

analyses were carried out. Descriptive statistics indicate general tendencies in the data—

the spread of scores, or a comparison of how one score relates to all others—while the

inferential statistics help analyze data from a sample to draw conclusion about an

unknown population (Creswel, 2008). Descriptive statistics provided description of the

data while the inferential statistics provided answers to the research questions and helped

test the hypotheses.

In order to compare the aggregated scale scores from the survey, and better

understand the factors influencing customer satisfaction at the subject hamburger chain,

multiple regression analysis has been carried out. Multiple regression is a correlation-

based statistical technique that can be used to explore the relationship between dependent

variables and multiple independent variables with a high level of sophistication (Pallant,

2013). Regression analysis is a first-generation statistical technique used in social science

research that has the ability to either confirm a priori established theories or identify data

patterns and relationship (Josephs, Hair, Hult, Ringle, & Sarstedt, 2014). Therefore,
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multiple regression analysis is an ideal statistical technique to explore the relationship

between customer satisfaction and its eight independent variables. Correlation analysis, a

first-generation technique, is used to determine the strength and direction of the linear

relationship between two variables (Pallant, 2013). Therefore, correlation analysis is also

employed to explore the relationship among demographic variables in this study. In

addition, correlation is being used to explore the relationship between satisfaction and

loyalty at the subject hamburger chain.

Research Questions and Statistical Techniques

The first research question is, Which variables related to dining at the subject

hamburger chain significantly influence customer satisfaction? This question contains

eight hypotheses to test the relationship between customer satisfaction and its eight

independent variables. The eight independent variables are service quality, food quality,

physical environment, convenience, customer-facing technology, price and value, order

accuracy, and speed of service. Each of these eight variables has one hypothesis to test its

relationship with satisfaction. The researcher tested these eight hypotheses with customer

table and correlation analysis. Then, regression analysis was conducted to test the

customer satisfaction predictive ability of the eight independent variables.

The second research question of the study is, Which demographic variables

significantly influence customer satisfaction at the subject hamburger chain? To answer

this research question, the effects that race, gender, income, age, marital status, service

delivery method, time of visit, and geographic location have on customer satisfaction

were analyzed. This research question contains one hypothesis to measure the impact of

demographic variables of race, gender, income, age, marital status, service delivery
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method, time of visit, and geographic location on customer satisfaction. Custom table, t-

test, and ANOVA were used to test this hypothesis.

The final research question is, To what extent are customer satisfaction and

customer loyalty related? The final research question contains one hypothesis to

determine the relationship between customer satisfaction and customer loyalty. Pearson

correlation was employed to test this hypothesis.

Assumptions

Some important assumptions were made for this study. The researcher assumed

that the respondents were truthful while completing the survey, which asked that they

base their answers on their most recent experience at the subject hamburger chain. The

researcher also assumed that the selection of the 40 participating locations in the study

represented all demographic groups of the overall customer base of the subject

hamburger chain.

Additionally, it was assumed that the incentive of three free hamburgers in

exchange for participation in the survey would attract enough customers to complete the

survey without any bias. The three-free-hamburger offer has been proven to be very

successful in attracting enough participants for the existing customer satisfaction survey

conducted by the subject hamburger chain. Thus, the three-free-hamburger offer was

chosen in this study to entice customers to participate in the study. It is important to note

that the subject hamburger chain was offering the participants three hamburgers for free.

No monetary incentive was offered by the researcher to the participants for completing

the survey.

Finally, it was assumed that the participants were truthful in terms of their race,
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gender, income, age, marital status, service delivery methods, time of visit, and

geographic location while completing the survey.

Summary

Chapter 3 discussed the rationale behind selecting quantitative cross-sectional

design for the study mainly due to lack of time and restrictions imposed by the subject

hamburger chain. The strengths and weaknesses, along with the moral and ethical issues,

of the study were discussed in the chapter 3 as well. There was a discussion of the

instrument used in the study, which was developed and adopted after a review of the

existing literature and industry journals. To ensure its content and construct validity, three

industry experts reviewed the instrument. The instrument was tested on a pilot basis, and

its reliability was checked through an internal consistency test, Cronbach’s alpha test.

The rationales behind selecting the population, sample frame, sample size, and sampling

strategy were also discussed in this chapter. The chapter concluded with a discussion of

data collection, data analysis, and the assumptions made for the study.

Chapter 4 contains the results of the study. Based on Sulek and Hensley (2004)

and Namkung and Jang (2007), the researcher employs regression analysis, Pearson

correlation, t-test, ANOVA, and custom table by using IBM SPSS to answer the research

questions which are as follows:

1. Which variables related to dining at the subject hamburger chain significantly

influence customer satisfaction?

2. Which demographic variables significantly influence customer satisfaction at the

subject hamburger chain?

3. To what extent are customer satisfaction and customer loyalty related?


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CHAPTER 4

RESULTS

The primary purpose of the current quantitative cross-sectional study is to

determine the relationship between customer satisfaction and its independent variables of

service quality, food quality, physical environment, convenience, customer-facing

technology, price and value, order accuracy, and speed of service at a regional fast food

hamburger chain. The secondary purpose of the current study is to determine the impact

of demographic variables on customer satisfaction at the subject hamburger chain. The

final purpose of the present study is to determine the relationship between customer

satisfaction and customer loyalty at the subject hamburger chain. The framework for the

study included three research questions:

1. Which variables related to dining at the subject hamburger chain significantly

influence customer satisfaction?

2. Which demographic variables significantly influence customer satisfaction at the

subject hamburger chain?

3. To what extent are customer satisfaction and customer loyalty related at the

subject hamburger chain?

To answer research questions and test the related hypotheses, data was collected

via a self-developed, industry experts validated, and pilot tested survey instrument. The

5-point Likert-type scale measured dependent and independent variables ranging from 1

= strongly disagree to 5 = strongly agree. A mean score greater than 3 and less than 4

indicates that the respondents agreed with the statements and the subject hamburger chain

is meeting the expectation of customers. The survey instrument also collected data on
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demographic variables of race, gender, income, age, marital status, service delivery

method, time of visit, and geographic location. The final question on the instrument

collected data on the developmental needs of the subject hamburger chain as seen by the

respondents; these will be discussed as additional findings.

Data Collection

The targeted population for the study was the customer base of the 400 restaurants

operated by the subject hamburger chain in the mid-western and the eastern United

States. Forty of the 400 locations were randomly selected for data collection. Every 250th

customer in each of these 40 selected locations received survey invitations to partake in

the study via the SurveyMonkey platform. Total customers served at the selected

restaurants during the data collection period were 400,000. Therefore, 1,600

(400,000/250 = 1,600) survey invitations were issued. A total of 1,042 surveys were

returned with a response rate of 65.12%, of which 970 responses were included in the

analysis. Survey responses with 15% missing data were discarded. The 15% test was also

used by Kivela et al. (1999b). Table 2 contains the frequency of data collection.
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Table 2

Frequency of Data Collection

Week ending Percentage

9/14/2015 13%

9/21/2015 18%

9/28/2015 30%

10/5/2015 27%

10/12/2015 12%

Survey instructions were distributed to customers for a period of 4 weeks, which

was dictated by the subject hamburger chain. The survey link was open for 5 weeks to

give the invitees an additional week to complete the survey. Survey invitations were

distributed from September 14, 2015, to October 05, 2015. The survey link was

deactivated on October 12, 2015. Table 2 reflects the percentage of total survey responses

for each week during the 5-week data collection period. Most of the responses occurred

during the weeks of September 28, 2015 (30%) and October 5, 2015 (27%), accounting

for the majority (57%) of the responses. Responses for the first and fifth week were

almost identical at 13% and 12% respectively. The second week produced 18% of the

responses.

Data Screening

According to Tabachnick and Fidell (2013), consideration and resolution of data

screening related issues prior to data analysis are fundamental to an honest data analysis.

Therefore, careful attention was given to ensure data integrity in the current study. The

first issue that needed to be addressed was error free data entry, and the second issue was
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the handling of missing data (Tabachnick & Fidell, 2013). Since participants entered data

via the SurveyMonkey platform, data entry is not a concern in this study. To handle the

second issue, missing value analysis with SPSS 22 was run to identify and eliminate

cases from the analysis with more than 15% of missing data.

Demographic Variables

Table 3 contains the demographic description of the respondents in the study.

Table 3 also contains the details on the demographic variables of time of visit, service

delivery methods, and geographic regions.

Table 3

Demographic of Respondents

Variable Current study Subject hamburger chain

Race White/Caucasian 50% 65%

African American 27% 14%

Asian 10% 3%

Hispanic 10% 16%

Native Americans 3% N/A

Gender Male 50% 53%

Female 50% 47%

Income < 25k 33% 13%

25k – 49k 22% 28%

50k – 74k 12% 21%

75k – 99k 18% 21%

> 100k 15% 17%


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Variable Current study Subject hamburger chain

Age Silent Generation (> 70) 5% 28%

Baby Boomers (51 – 69) 33% 15%

Generation-X (35 – 50) 38% 20%

Millennials (18 – 34) 24% 37%

Marital status Single 35% 32%

Married 41% 56%

Other 24% 12%

Variables Current study Industry standard

Day parts Breakfast 19% 21%

Lunch 31% 34%

Dinner 22% 31%

Late night 12% N/A

Any other time 14% 14%

Delivery methods Drive-thru 52% 57%

Dine in 21% 26%

Take out 27% 17%

Regions Mid-western United States 82% N/A

Eastern United States 11% N/A

Source: Internal document provided by the subject hamburger chain; mid-western United
States—Chicago, Cincinnati, Detroit, St. Louis, Indianapolis, Columbus, Minneapolis, and
Nashville; eastern United States—New York and New Jersey; NA = Not Available.

The largest racial group in the current study is White (50%) followed by Black

(27%), which is representative of the industry as a whole. White and Black males who do
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not spend a lot of time cooking meal at home are the biggest consumer of fast food in the

United States (Bryant, 2011). Unfortunately, Bryant (2011) did not mention if the males

and females were married or single, as it would provide further insights. Asian and

Hispanics are equally represented with 10% while the Native Americans are at 3%.

Whites and Hispanics are underrepresented in the study in comparison with the subject

hamburger chain while Blacks and Asians are over represented.

In terms of gender, males and females are evenly represented with 50% each,

which is typical of the subject hamburger chain—53% male and 47% female. When it

comes to income, the largest income group in the study is less than 25k while the least

represented group is 50k to 74k. Two groups (75k – 99k and > 100k) are representative

of the subject hamburger chain while the remaining three groups are not. The typical

customers at the subject hamburger chain make up to 49k; this represents 41% of the total

customers. These findings are not typical of the fast food customers in the United States

either. Melnick (2011) mentioned that people visit fast food restaurants more often as

their household income increased to $60,000. Beyond that, visits start to drop, replaced

by full-service, sit-down dining at higher prices. This makes good sense as people with

more spending power would want to have a better dining experience at a full-service or

fine dining restaurant.

With regard to age, participants were asked to identify themselves as Millennials

(18 – 34), Generation-X (35 – 50), Baby Boomers (51 – 69), or Silent Generation (greater

than 70). The age of participants indicates that the largest group (38%) is the Generation-

X. The second largest group of respondents (33%) is the Baby Boomers. The lower and

upper ranges, Millennials and the Silent Generation, represent 24% and 5% respectively.
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These results are not representative of the subject hamburger chain. There is a 13%

difference between the current study’s and the subject hamburger chain’s demographics

in terms of Millennial while the difference is even steeper in terms of Baby Boomers at

18%. The steepest difference exists in the Silent generation, which is 23%.

According to the Pew Research Center, Millennials and Generation X represent

49% of the United States’ population and 56% of Internet users; on the other hand, the

Silent Generation represents 7% of the United States population but only 5% of Internet

users (Zickuhr, 2010). Therefore, the difference in participation among the Silent

Generation have been caused by the data collection method. If data was collected also via

personal and telephone interview, more participants representing the Silent Generation

probably would have participated because the Silent Generation is less represented

among Internet users.

The largest group among the participants was married at 41%, followed by single

customers at 35%. A substantial number of participants (24%) identified themselves as

other – divorced, widowed, and separated. The results of the single participants are

similar to the subject hamburger chain’s while married and others are not. There is a 15%

difference among married and 12% among others with the subject hamburger chain.

The subject hamburger chain has divided its 24-hour business day into four

different parts – breakfast (6 a.m. – 11a.m.), lunch (11 a.m. – 2 p.m.), dinner (5:30 p.m.

to 8:30 p.m.), and late night (11p.m. – 2 a.m.). According to Table 3, 31% of the

participants visited the restaurants during lunch, which is consistent with the industry

standard (34%). There is a 9% difference between the current study and the industry

standard’s in terms of dinner traffic. There are no significant differences in traffic count
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during breakfast between the current study and the fast food industry as a whole. There

are no late night data available for the industry; thus, this is not a true comparison.

The subject hamburger chain has three different service delivery methods: drive-

thru, dine in, and takeout. Fast food hamburger chains serve about 57% of the customers

via drive-thru, 17% of them take the food home or to work, and 27% of them eat at the

restaurant (McDonnell, 2015). Thus, the takeout method is over represented by 10%

while the drive-thru is under represented by 5%, and dine-in is over represented by 5% in

the current study in comparison with the industry as a whole. It is important to note that

79% (drive-thru 52% and take out 27%) of the customers leave the restaurant with the

food at the subject hamburger chain. Thus, it is important to get them satisfied the first

time because once they leave the restaurant, there are no more opportunities to correct

mistakes.

The majority of the responses came from the mid-western United States (82%)

while the remaining 18% came from the eastern United States. This is consistent with the

geographic locations of the subject hamburger chain as 17% of the restaurants are located

in the eastern United States while 83% are located in mid-western United States. From

the mid-western regions, Chicago had the highest number of cases with 24% while

Nashville had the lowest with 6%. It is important to note that seven restaurants

participated from Chicago and only two participated from Nashville. Cincinnati returned

11% of the cases, the second highest, while the rest of the mid-western cities returned

from 9% to 7% responses. The subject hamburger chain has operations only in New York

and New Jersey in the eastern United States. In New York, 11% of the cases were

reported while 7% cases were returned in New Jersey.


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Research Question 1

Research Question 1 asks, “Which variables related to dining at the subject

hamburger chain significantly influence customer satisfaction?” To answer this research

question, first mean and standard deviation of satisfaction for independent variables were

examined. Then, correlation of each independent variable with satisfaction was explored.

Finally, regression analysis was conducted to determine the ability to predict satisfaction

for each of the independent variable.

Mean and standard deviation. Table 4 contains the mean and standard deviation

for the independent variables.

Table 4

Satisfaction - Mean and Standard Deviation for Independent Variables

Constructs Mean Standard deviation

Order accuracy 4.34 0.80

Convenience 4.22 0.91

Speed 4.22 0.05

Food quality 4.12 0.92

Price value 4.10 0.96

Physical environment 3.91 1.13

Service quality 3.91 1.03

Technology 3.25 1.28

Note. Responses were coded 1= strongly disagree, 2= disagree, 3= neither disagree, nor agree,
4= agree, 5= strongly agree

The results indicate that customers agree with the fact that the subject hamburger

chain is meeting expectation in order accuracy (mean = 4.34), convenience (mean =


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4.22), speed of service (mean = 4.22), food quality (mean = 4.12), and price and value

(mean = 4.10). Customers agreed with the notion that the subject hamburger chain is

meeting expectations in filling orders, providing fast service, serving quality food, and

offering a competitive price and value, which makes sense because the chain is very

focused on these aspects of the operation. Since the subject hamburger chain is open 24

hours a day, providing ample parking and being easily accessible by public and private

transportation, customers agreed with the convenience factor as well.

The results also indicate that customers were neutral in terms of the subject

hamburger chain’s performance on physical environment (mean = 3.91), service quality

(mean = 3.91), and technology (mean = 3.25). The neutral rating on service quality came

as inconsistent because the subject hamburger chain is very focused on service quality

and scores very high on its own satisfaction survey. However, the neutral rating in service

quality presented the subjcet hamburger chain with a unique opportunity for further

development. The average age of the restaurant at the subject hamburger chain is over 10

years; thus, it is understandable to see a neutral rating on physical environment. The

neutral rating on technology is also understandable as the subject hamburger chain started

to focus more on customer-facing technology to interact with customers via Facebook,

Twitter, Instagram, smartphone app, and web ordering for the past 3/4 years. Therefore,

there is an opportunity for the subject hamburger chain to focus more on service quality,

physical environment, and customer-facing technology to further improve customer

satisfaction.

With the exception of the physical environment, service quality, and customer-

facing technology, all other constructs have a standard deviation of less than 1 (SD = .05
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to SD = .96), signaling a narrow spread around the mean scores of satisfactions. These

also signal that the majority of participants gave a neutral rating on the constructs in

question. Technology has the highest standard deviation (SD = 1.28), signaling a wide

spread in responses. Some respondents have strongly agreed while others have strongly

disagreed.

Correlation. Table 5 contains the correlation statistics for the independent

variables in the present study with satisfaction, the dependent variable:

Table 5

Correlations – Independent Variables and Dependent Variables

SQ FQ PE Con. Tech. PV OA SOS Sat.

Sat. .644** .675** .558** .524** .421** .628** .696** .699** -

Note. Correlation is significant at 0.01 level (2-tailed). SQ = Service Quality, FQ = Food Quality,
PE = Physical Environment, Con. = Convenience, Tech = Technology, PV = Price and Value,
OA = Order Accuracy, SOS = Speed of Service, Sat. = Satisfaction, ** = p < .001 (2-tailed).

According to Table 5, each independent variable is correlated with the dependent

variable of satisfaction. With the exception of technology, all other variables have a

moderate relationship with satisfaction while technology has a moderately weak

relationship. Speeds of service (.699), order accuracy (.696), food quality (.675), service

quality (.644), price and value (.628), physical environment (.558), and convenience

(.524) have positive moderate association with satisfaction while technology (.421) has a

positive moderately weak association, with satisfaction at a 0.01 significance level.

The results of the correlation are consistent with existing literature as study after

study and industry experts have provided evidence for the importance of these variables

in determining satisfaction in the fast food restaurant industry. Allon et al. (2011) and

Iqbal et al. (2012) found a statistically significant association between customer


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satisfaction and speed of service in restaurants. Order accuracy is important as 96% of

United States’ consumers say order accuracy is important or very important when they

are choosing a fast food restaurant (Tristano, 2013). Food quality is important as many

studies (Hyun, 2010; Mamalis, 2009; Namkung & Jang, 2007, 2008; Sulek & Hensley,

2004; Swimberghe & Wooldridge, 2014) found food quality an important factor of

satisfaction in the restaurant industry. Reich et al. (2005), Rashid et al. (2015), and Wu

and Mohi (2015) found a statistically significant relationship between customer

satisfaction and service quality in the context of the restaurant industry. Many researchers

over the years have examined the impacts of price and value on customer satisfaction in

the restaurant industry and found it to be an important factor (Ali & Nath, 2013; Gupta et

al., 2007; Haghighi et al., 2012; Homburg et al., 2005; Pei & Ayub, 2015; Ryu & Han,

2009; Steiner et al., 2013). Ali and Amin (2014), Chow et al. (2007), and Ryu and Han

(2010) found physical environment an important factor of satisfaction in the restaurant

industry. Andaleeb and Caskey (2007), Harrington et al. (2012), and Min & Min (2011)

found convenience an important factor of satisfaction in the restaurant industry.

Technology is quickly becoming a part of American life, and more consumers are

showing an increasing interest in using technology at restaurants (NRA, 2014).

Regression. A multiple regression was conducted to investigate the best

predictors of customer satisfaction at the subject hamburger chain. Table 6 contains the

R, R2, adjusted R2, and the standard error of the estimate for the regression model.
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Table 6

Satisfaction Model—R, R2 and Adjusted R2

Model R R2 Adjusted R2 Std. error of the estimate

Satisfaction .840 .705 .702 .46702

Note. Predictors: (Constant), service quality, food quality, physical environment, convenience,
technology, price and value, order accuracy and speed of service.

The adjusted R2 in this model is .702, which indicates that 70% of the variance in

customer satisfaction was explained by the model at the subject hamburger chain.

According to Cohen (1988), this is a large effect. The sum of squares, df, mean square, f

and significance are presented in Table 7.

Table 7

Satisfaction Model—df, F and Significance

Model Sum of squares df Mean square F Significance

Regression 399.687 8 49.961 229.066 .000b

Residual 166.852 765 .218

Total 566.539 773

Note: df = degrees of freedom; F = a ratio of variability between groups to variability within


groups
According to Table 7, the value in significance column is .000, which is less than

.05 indicating the statistical significance of the model. Anything less than .05 represents

statistical significance (Pallant, 2013). Table 8 contains the regression weight for the

unstandardized and standardized coefficient.


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Table 8

Satisfaction Model – Coefficients

Variables Unstandardized Standardized t Sig.

coefficients coefficients

B Std. error Beta

(Constant) 0.319 0.102 3.127 0.002

Order accuracy 0.283 0.035 0.255 8.050 0.000

Speed of service 0.254 0.023 0.306 11.048 0.000

Food quality 0.201 0.033 0.210 6.086 0.000

Price and value 0.161 0.023 0.183 6.909 0.000

Technology 0.050 0.015 0.075 3.269 0.001

Physical environment 0.037 0.021 0.047 1.705 0.089

Service quality 0.029 0.028 0.034 1.042 0.298

Convenience 0.075 0.029 -0.077 -2.608 0.009

Note: B = unstandardized weight; Beta = standardized weight; t = statistics which test for the
significance of each variable; Sig = significance; Adjusted R2 = .702; F (8, 765) = 229.06; p =
.000.

The regression equation = 0.319 + 0.283X1 + 0.254X2 + 0.201X3, + 0.161X4 +

0.05X5 + 0.037 X6 + 0.029X7 + 0.075 X8 + error, where .319 is the constant, .283 is the

regression weight for order accuracy, X1 represents the predictability of order accuracy

on satisfaction, .254 is the regression weight for speed of service, X2 represents the

predictability of speed of service on satisfaction, .201 is the regression weight for food

quality, X3 represents the predictability of food quality on satisfaction, .161 is the

regression weight for price and value, X4 represents the predictability of price and value

on satisfaction, .05 is the regression weight for technology, X5 represents the


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predictability of technology on satisfaction, .037 is the regression weight physical

environment, X6 represents the predictability of physical environment on satisfaction,

.029 is the regression weight for service quality, X7 represents the predictability of

service quality on satisfaction, and .075 is the regression weight for convenience, X8

represents the predictability of convenience on satisfaction.

The coefficient t score for order accuracy, which tests for the significance of each

variable, was significant, t = 8.08, p< 0.05, p = .000. Speed of service t score was

significant, t = 11.04, p < 0.05, p = .000. Food quality coefficient score was significant,

t=6.08, p < 0.05, p = .000. Price and value coefficient score was significant, t=6.90, p <

0.05, p = .000. Technology coefficient score was significant, t=3.26, p < 0.05, p = .001.

Convenience coefficient score was statistically significant, t = -2.608, p < 0.05, p = 0.009.

However, environment (t = 1.705, p > 0.05, p = 0.089) and service quality (t = 1.042, p >

.05, p = 0.298) were not statistically significant.

Based on the aforementioned discussion, it can be concluded that order accuracy,

speed of service, food quality, price and value, technology, and convenience are

statistically significant factors of satisfaction at the subject hamburger chain while

environment and service quality are not. Note that order accuracy (.283), speed of service

(.254), food quality (.201), and price and value (.161) displayed the ability to

significantly predict customer satisfaction at the subject hamburger chain when all eight

independent variables are included. The results of the regression are consistent with the

existing literature and industry journals as discussed in Chapter 2.

A .283 unstandardized coefficient for order accuracy means that if the order

accuracy move by one unit, for example, from agree to strongly agree, then satisfaction
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will improve by .283. A .254 unstandardized coefficient for speed of service means that if

the speed of service moves by one unit, for example, from agree to strongly agree, then

satisfaction will improve by .254. A .201 unstandardized coefficient for food quality

means that if the food quality moves by one unit, for example, from agree to strongly

agree then satisfaction will improve by .201. A .161 unstandardized coefficient for price

and values means that if the price and value moves by one unit, for example, from agree

to strongly agree, then satisfaction will improve by .161. Therefore, based on this model,

if there an improvement in each of these four factors by one unit, satisfaction will be

increased by .899 (.283 + .254 + .201 + .161), which is significant.

Findings

The following section contains the findings for each hypothesis for the Research

Question 1.

Hypothesis 1 – Service Quality and Customer Satisfaction

H10: There is no statistically significant relationship between customer

satisfaction and service quality at the subject hamburger chain.

H1A: There is a statistically significant relationship between customer satisfaction

and service quality at the subject hamburger chain.

Findings: According to the Table 5, customer satisfaction and service quality

have statistically significant moderate correlation (.644). Thus, the null hypothesis is

being rejected.

Hypothesis 2 – Food Quality and Customer Satisfaction

H20: There is no statistically significant relationship between customer

satisfaction and food quality at the subject hamburger chain.


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H21: There is a statistically significant relationship between customer satisfaction

and food quality at the subject hamburger chain.

Findings: According to the Table 5, customer satisfaction and food quality have

statistically significant moderate correlation (.675). Thus, the null hypothesis is being

rejected.

Hypothesis 3 – Restaurant Environment and Customer Satisfaction

H30: There is no statistically significant relationship between customer

satisfaction and restaurant environment at the subject hamburger chain.

H31: There is a statistically significant relationship between customer satisfaction

and restaurant environment at the subject hamburger chain.

Findings: According to the Table 5, customer satisfaction and restaurant

environment have statistically significant moderate correlation (.558). Thus, the null

hypothesis is being rejected.

Hypothesis 4 – Convenience and Customer Satisfaction

H40: There is no statistically significant relationship between customer

satisfaction and convenience at the subject hamburger chain.

H4A: There is a statistically significant relationship between customer satisfaction

and convenience at the subject hamburger chain.

Findings: According to the Table X, customer satisfaction and convenience have

statistically significant moderate correlation (.524). Thus, the null hypothesis is being

rejected.

Hypothesis 5 – Technology and Customer Satisfaction

H50: There is no statistically significant relationship between customer


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satisfaction and technology at the subject hamburger chain.

H5A: There is a statistically significant relationship between customer satisfaction

and technology at the subject hamburger chain.

Findings: According to the Table 5, customer satisfaction and technology have

statistically significant moderately weak correlation (.421). Thus, the null hypothesis is

being rejected.

Hypothesis 6 – Price/Value and Customer Satisfaction

H60: There is no statistically significant relationship between customer

satisfaction and price/value at the subject hamburger chain.

H6A: There is a statistically significant relationship between customer satisfaction

and price/value at the subject hamburger chain.

Findings: According to the Table 5, customer satisfaction, and price and value

have statistically significant moderate correlation (.628). Thus, the null hypothesis is

being rejected.

Hypothesis 7 – Order Accuracy and Customer Satisfaction

H70: There is no statistically significant relationship between customer

satisfaction and order accuracy at the subject hamburger chain.

H7A: There is a statistically significant relationship between customer satisfaction

and order accuracy at the subject hamburger chain.

Findings: According to the Table 5, customer satisfaction and order accuracy

have statistically significant moderate correlation (.696). Thus, the null hypothesis is

being rejected.

Hypothesis 8 – Speed of Service and Customer Satisfaction


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H80: There is no statistically significant relationship between customer

satisfaction and speed of service at the subject hamburger chain.

H8A: There is a statistically significant relationship between customer satisfaction

and speed of service at the subject hamburger chain.

Findings: According to the table 5, customer satisfaction and speed of service

have statistically significant moderate correlation (.699). Thus, the null hypothesis is

being rejected.

Research Question 2

Research Question 2 asks, “Which demographic variables significantly influence

customer satisfaction at the subject hamburger chain”? One hypothesis is tested to

answer research question. The effects of eight demographic variables of race, gender,

income, age marital status, time of the day, delivery method, and geographic regions on

customer satisfaction at the subject hamburger chain are measured. The following section

contains the results.

Hypothesis 1 – Demographics and Customer Satisfaction

H10: There is no statistically significant difference among different demographic

groups in terms of customer satisfaction at the subject hamburger chain.

H1A: There is a statistically significant difference among different demographic

groups in terms of customer satisfaction at the subject hamburger chain.

Race. Table 9 contains the mean and standard deviation for customer satisfaction

at the subject hamburger chain for different racial groups.


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Table 9

Mean and Standard Deviation - Race

Race Mean Standard deviation

Asian 4.74 .62

Hispanic 4.61 .73

Native American 4.58 .72

White 4.15 .83

Black 4.08 .85

All racial groups agree that the subject hamburger chain satisfies them. Among

them, Asians (mean = 4.74) are the most satisfied while the White (mean = 4.15) and

African Americans (mean = 4.08) are least satisfied. The standard deviation for each of

the race is less than 1 (Asian SD = .62, Hispanic SD = .73, Native American SD = .72,

White SD = .83, and African American SD = .85), signaling a narrow spread in responses

in regard to satisfaction at the subject hamburger chain. This means that most of the

responses are around the mean of each racial group.

A one-way ANOVA was conducted to test the differences in satisfaction among

the five racial groups of Asian, Hispanic, Native American, White, and Black. Table 10

contains the results.


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Table 10

ANOVA – Race

Sum of square Df Mean square F Sig.

Between groups 45.27 4 9.05 14.12 .000

Within groups 534.77 834 .64

Total 580.05 839

Results show a significant difference across the five categories of race in terms of

satisfaction at the host hamburger chain, F (4, 834) = 14.12, p = .000. It is expected to

have statistically significant differences in satisfaction among different racial groups as

the expectation and background of each group is different. However, this does not

indicate which group is different from which other group. The statistical significance of

the differences among the groups is provided in the multiple comparisons. Thus, a

Univariate Analysis, using the Tukey test, was run to identify the statistical significance

among different racial groups with regard to customer satisfaction at the subject

hamburger chain. Table 11 contains the results.


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Table 11

Tukey HSD

Race Race Mean difference Std. Sig. 95% Confidence

(I-J) error interval

Lower Upper

bound bound

White Black 0.0881 0.06504 0.754 -0.0977 0.2739

Hispanic -.43833* 0.09586 0 -0.7121 -0.1645

Asian -.57302* 0.09223 0 -0.8364 -0.3096

NA -0.40857 0.16346 0.125 -0.8754 0.0583

Black White -0.0881 0.06504 0.754 -0.2739 0.0977

Hispanic -.52642* 0.10207 0 -0.8179 -0.2349

Black Asian -.66111* 0.09866 0 -0.9429 -0.3793

NA -.49667* 0.16718 0.036 -0.9741 -0.0192

Hispanic White .43833* 0.09586 0 0.1645 0.7121

Black .52642* 0.10207 0 0.2349 0.8179

Asian -0.13469 0.12122 0.877 -0.4809 0.2115

NA 0.02976 0.1814 1 -0.4883 0.5479

Asian White .57302* 0.09223 0 0.3096 0.8364

Black .66111* 0.09866 0 0.3793 0.9429

Hispanic 0.13469 0.12122 0.877 -0.2115 0.4809

NA 0.16444 0.17951 0.942 -0.3482 0.6771

NA White 0.40857 0.16346 0.125 -0.0583 0.8754


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Race Race Mean difference Std. Sig. 95% Confidence

(I-J) Error interval

Lower Upper

bound bound

NA Continued Black .49667* 0.16718 0.036 0.0192 0.9741

Hispanic -0.02976 0.1814 1 -0.5479 0.4883

Asian -0.16444 0.17951 0.942 -0.6771 0.3482

* The mean difference is significant at the 0.05 level.

The results demonstrate that Whites have statistically significant differences in

satisfaction at the subject hamburger chain with Hispanics and Asians. These findings

signal that Whites (mean – 4.15) are less satisfied than the Hispanics (mean = 4.61) and

Asians (mean – 4.71). Blacks have statistically significant differences in satisfaction at

the subject hamburger chain with Hispanics, Asians, and Native Americans, signaling

that Blacks (mean = 4.08) are less satisfied than Hispanics (mean = 4.61), Asians (mean

= 4.74), and Native Americans (mean = 4.58). It is important to note that the differences

in satisfaction between Whites and Blacks are not statistically significant, meaning that

Blacks and Whites are equally satisfied with the subject hamburger chain. It is also

important to note that there are no significant differences among the Hispanics, Asians,

and Native Americans in satisfaction at the subject hamburger chain, which means that

Hispanics, Asians, and Native Americans are equally satisfied at the subject hamburger

chain. Based on the results, it can be concluded that the subject hamburger chain should

be considering diversity while dedicating resources and making adjustments to its service

delivery method.
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Gender. Table 12 contains the mean score and the standard deviation for female

and male participants in the study.

Table 12

Mean and Standard Deviation - Gender

Gender Mean Standard deviation

Female 4.28 .84

Male 4.18 .86

The mean score for males is 4.18 while the mean score for females is 4.28. A t-

test was conducted. The standard deviations (female SD = .84, male SD = .86) for males

and females are less than 1, which indicates that the responses were around the mean

score of both categories. The sig value (2-tailed) for the gender is .068, which is greater

than .05. Therefore, the difference between male and female in terms of satisfaction is not

statistically significant. These findings signal that males and females are equally satisfied

at the subject hamburger chain.

Income. Table 13 contains the mean scores and standard deviations for customer

satisfaction at the subject hamburger chain for different income groups.


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Table 13

Mean and Standard Deviation – Income

Income Mean Standard deviation

< 25k 4.07 .81

$25k - $49k 4.19 .80

$50k - $74k 4.23 .88

$75k - $99k 4.56 .76

100k or more 4.42 .88

The results demonstrate that when income rises, the satisfaction rises as well.

These findings can be attributed to the fact that customers with lower income and limited

food dollars available on meals away from home are looking for greater value in the form

of products and services from the subject hamburger chain. The standard deviation is less

than 1 for each income group, which means that there is little spread in the data, and most

responses are around the mean scores of each income group. A one-way ANOVA was

conducted and the results appear in table 14.

Table 14

ANOVA – Income

Sum of square df Mean square F Sig.

Between groups 21.49 4 5.357 7.890 .000

Within groups 505.164 744 .679

Total 526.593 748

Results show a significant difference across the five categories of income in terms
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of satisfaction at the subject hamburger chain, F (4, 744) = 7.890, p = .000. The Sig.

value in the ANOVA table is .000, which is less than .05. The Sig. value indicates that

there is a significance difference somewhere among the mean scores of satisfaction for

the five income groups. However, this does not indicate which group is different from

which other group. The statistical significance of the differences among the groups is

provided in the multiple comparisons. Thus, a Univariate Analysis, using the Tukey test,

was run to identify the statistical significance among different income groups with regard

to customer satisfaction at the subject hamburger chain. Table 15 contains the results.

Table 15

Multiple Comparisons

Tukey HSD

Income Income Mean Std. Sig. 95% Confidence

difference Error interval

Lower Upper

bound bound

< $25k $25k - $49k 0.11835 0.0831 0.612 -0.1089 0.3456

$50k - $74k -0.036 0.09943 0.996 -0.3079 0.2359

$75k - $99k -.36979* 0.08903 0 -0.6132 -0.1263

>= $100,000 -0.22989 0.0937 0.103 -0.4861 0.0263

$25k - $49k Less than $25k -0.11835 0.0831 0.612 -0.3456 0.1089

$50k - $74k -0.15436 0.10708 0.601 -0.4472 0.1385

$75k - $99k -.48814* 0.0975 0 -0.7548 -0.2215

>= $100,000 -.34824* 0.10179 0.006 -0.6266 -0.0699


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Income Income Mean Std. Sig. 95% Confidence

difference Error interval

Lower Upper

bound bound

$50k - $74k < $25k 0.036 0.09943 0.996 -0.2359 0.3079

$25k - $49k 0.15436 0.10708 0.601 -0.1385 0.4472

$75k - $99k -.33379* 0.11174 0.024 -0.6393 -0.0282

>= $100,000 -0.19389 0.1155 0.448 -0.5097 0.1219

$75k - $99k < $25k .36979* 0.08903 0 0.1263 0.6132

$25k - $49k .48814* 0.0975 0 0.2215 0.7548

$50k - $74k .33379* 0.11174 0.024 0.0282 0.6393

>= $100,000 0.1399 0.10668 0.684 -0.1518 0.4316

>= $100k < $25k 0.22989 0.0937 0.103 -0.0263 0.4861

$25k - $49k .34824* 0.10179 0.006 0.0699 0.6266

$50k - $74k 0.19389 0.1155 0.448 -0.1219 0.5097

$75k - $99k -0.1399 0.10668 0.684 -0.4316 0.1518

* The mean difference is significant at the 0.05 level.

Based on table 15, there is a statistically significant difference in satisfaction

existing between people making less than 25k and people making between $75k – $99K.

People making $25k – $49k also have a statistically significant difference with people

making greater than $75k. Finally, people who are making $50k – $74k have a

statistically significant difference with people making $75k – $99k. These findings

suggest that people with lower income are less satisfied than those of higher income.
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Lower income customers with less income available for food away from home are more

demanding of the subject hamburger chain than customers with higher income.

Customers with lower disposable income are looking for greater value for their money.

Age. Table 16 contains the mean and standard deviation for customer satisfaction

at the subject hamburger chain for different age groups.

Table 16

Mean and Standard Deviation – Age

Age Mean Standard deviation

Silent Generation 4.48 .73

Baby Boomers 4.30 .76

Generation-X 4.20 .85

Millennials 4.10 .95

All age groups agree that the subject hamburger chain satisfies them. The pattern

of the mean score for each age group reveals that the older generations are more satisfied

with the subject hamburger chain. These findings are problematic for the subject

hamburger chain because it is much more focused on the younger customers than the

older, and the efforts to reach are not resonating with the younger customers. More

recently, the subject hamburger chain targets the Millennial and Generation X via its

presence on Facebook, Twitter, and Instagram because the younger population is more

likely to be on the social media than their older cohorts. According to Pew Research

Center, 89% of 18-29 year olds use social media, and the social media use drops to 49%

with people over 65 years old ("Social Networking Fact Sheet," 2014). A one-way

ANOVA was conducted, and the results appear in table 17.


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Table 17

ANOVA - Age

Sum of square df Mean square F Sig.

Between groups 9.674 3 2.419 3.306 .011

Within groups 688.295 941 .731

Total 697.969 945

Results show a significant difference across the four categories of age in terms of

satisfaction at the subject hamburger chain, F (3, 941) = 3.306, p = .011. The Sig. value

in the ANOVA table is .011, which is less than .05. The Sig. value indicates that there is

a significance difference somewhere among the mean scores of satisfaction for the four

age groups. However, this does not indicate which group is different from any other

group. The statistical significance of the differences among the groups is provided in the

multiple comparisons. Thus, a Univariate Analysis, using the Tukey test, was run to

identify the statistical significance among different age groups with regard to customer

satisfaction at the subject hamburger chain. Table 18 contains the results.


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Table 18

Multiple Comparison – Age

Tukey HSD

Age (I) Age (J) Mean Std. error Sig. 95% Confidence

difference interval

(I-J) Lower Upper

bound bound

Millennials Generation-X -.09518 .07389 .699 -.2971 .1068

Baby Boomers -.19721 .07697 .078 -.4076 .0132

Silent
-.37685* .13297 .038 -.7403 -.0134
Generation

Generation-X Millennials .09518 .07389 .699 -.1068 .2971

Bay Boomers -.10203 .06859 .571 -.2895 .0854

Silent
-.28167 .12831 .182 -.6323 .0690
Generation

Baby Boomers Millennials .19721 .07697 .078 -.0132 .4076

Generation-X .10203 .06859 .571 -.0854 .2895

Silent
-.17964 .13010 .640 -.5352 .1759
Generation

Silent Millennials .37685* .13297 .038 .0134 .7403

Generation Generation-X .28167 .12831 .182 -.0690 .6323

Baby Boomers .17964 .13010 .640 -.1759 .5352

*. The mean difference is significant at the 0.05 level.


128

Table 18 contains the multiple comparisons for the different age groups.

According to table 18, only Millennials have statistically significant differences with the

Silent generation on satisfaction at the subject hamburger chain. These findings suggest

that Millennials, Generation-X, and Baby Boomers have similar feelings about the

subject hamburger chain. However, the eldest (Silent Generation) and youngest

(Millennials) have different feelings about the subject hamburger chain in terms of

satisfaction. Millennials are less satisfied with the subject hamburger chain than the

Silent Generation because the Millennials are more drawn to the fast casual segments that

provide them better quality food quickly with transparency with sourcing of food.

Millennials’ and Generation X’s new attitudes have created an outspoken segment of

customers who demand high quality, locally-sourced meals, offering bold and diverse

flavor profiles at a fair price, delivered quickly (FsVoice, 2015).

Marital status. Table 19 contains the mean and standard deviation for customer

satisfaction at the subject hamburger chain for different groups based on marital status.

Table 19

Mean and Standard Deviation – Marital Status

Marital status Mean Standard deviation

Others 4.63 .62

Married 4.14 .87

Single 4.11 .83

All groups in this category agree that the subject hamburger chain satisfies their

need in terms of satisfaction. Among them, others (mean = 4.63) are the most satisfied
129

while singles (mean = 4.11) are the least satisfied. The mean scores for satisfaction

suggests that people who are divorced, separated, and widowed (classified as others in

the current study) are more satisfied with the subject hamburger chain than married and

singles. The standard deviations for three categories are less than 1, which signals that the

responses for each group were centered on the mean scores. A one-way ANOVA was

conducted, and the results appear in table 20.

Table 20

ANOVA – Marital Status

Sum of square df Mean square F Sig.

Between groups 39.739 2 19.870 30.442 .000

Within groups 568.508 871 .653

Total 608.247 871

Results show a significant difference across the three categories of marital status

in terms of satisfaction at the host hamburger chain, F (2, 871) = 30.442, p = .000. The

Sig. value in the ANOVA table is .000, which is less than .05. The Sig. value indicates

that there is a significance difference somewhere among the mean scores of satisfaction

for the groups in this category. However, this does not indicate which group is different

from any other group. The statistical significance of the differences among the groups is

provided in the multiple comparisons. Thus, a Univariate Analysis, using the Tukey test,

was run to identify the statistical significance among different groups based on marital

status with regard to customer satisfaction at the subject hamburger chain. Table 21

contains the results.


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Table 21

Multiple Comparisons – Marital Status

Tukey HSD

(I) I am (J) I am Mean Std. error Sig. 95% Confidence interval


Lower Upper
difference bound bound

(I-J)

Single Married -.03653 .06280


.830 -.1840 .1109
Others -.51902* .07255
.000 -.6894 -.3487
Married Single .03653 .06280
.830 -.1109 .1840
Others -.48249* .07040
.000 -.6478 -.3172
Others Single .51902* .07255
.000 .3487 .6894
Married .48249* .07040
.000 .3172 .6478
*. The mean difference is significant at the 0.05 level.

Based on table 21, others (separated, widowed, and divorced) have statistically

significant differences with married and singles. However, there are no statistically

significant differences in satisfaction at the subject hamburger chain among married and

singles. These results suggest that the married and single customers at the host chain are

equally satisfied while there are difference in satisfaction among others—separated,

widowed, and divorced and married and single customers. This requires further

investigations which is beyond the scope of this study.

Time of day. Table 22 contains the mean scores of satisfaction for the different

day parts.
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Table 22

Mean Score and Standard Deviation – Tome of the Day

Day parts Mean Std. deviation

Late night 4.36 .86

Breakfast 4.21 .79

Dinner 4.19 .86

Lunch 4.13 .86

Based on table 22, customers visiting during different time of the day agree that

they are satisfied with the subject hamburger chain. The results also suggest that

customers are slightly more satisfied during late night than breakfast, lunch, and dinner.

The standard deviations for each day parts are less than 1, indicating that the responses in

each group were centered around the mean score. A one-way ANOVA was performed,

and there were no significant statistical differences observed in satisfaction based on time

of visit.

Delivery methods. Table 23 contains the mean scores of satisfaction for different

delivery methods.

Table 23

Mean and Standard Deviation – Service Delivery Methods

Mean Standard deviation

4.25 0.87
Drive-thru
4.24 0.82
Dine in
4.14 0.85
Take out
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Based on table 23, customers using during different service delivery methods

agree that they are satisfied with the subject hamburger chain. The mean scores for the

three different delivery methods are similar. Thus, no matter how they purchase their

meal, customers are equally satisfied. A one-way ANOVA was conducted, and there

were no statistically significant differences observed among the customers visiting via

drive-thru, dine in, or take out.

Geographic region. Table 24 contains the mean scores of satisfaction for the

different geographic regions.

Table 24

Mean and Standard Deviation – Geographic Regions

Std. deviation
Geographic regions Mean

.51
Nashville 4.72
.74
New York 4.46
.83
St. Louis 4.38
.85
Columbus 4.28
.81
Indianapolis 4.25
.80
Minneapolis 4.18
.85
Chicago 4.15
.91
New Jersey 4.06
.85
Detroit 4.04
.98
Cincinnati 3.95

With the exception of Cincinnati, customers in every other geographic region

agree that they are satisfied with the subject hamburger chain, which came as inconsistent
133

because Cincinnati is one of the top performers in the company’s internal survey. The top

performer, Nashville, came as inconsistent as well because Nashville is one of the poor

performers in the company’s internal survey. This calls for further investigation. The

standard deviation for each region is less than 1, which signals that the responses on

satisfaction in each region are centered around the mean. A one-way ANOVA was

conducted, and the results appear in table 25.

Table 25

ANOVA - Geographic Regions

Sum of squares df Mean square F Sig.

Between groups 34.522 9 3.836 5.432 .000

Within groups 659.561 934 0.706

Total 694.083 943

Results show a significant difference across the 10 geographic regions in terms of

satisfaction at the subject hamburger chain, F (9, 8934) = 5.432, p = .000. The Sig. value

in the ANOVA table is .000, which is less than .05. The Sig. value indicates that there is

a significance difference somewhere among the mean scores of satisfaction for the groups

in this category. However, this does not indicate which group is different from any other

group. The statistical significance of the differences among the groups is provided in the

multiple comparisons. Thus, a Univariate Analysis, using the Tukey test, was run to

identify the statistical significance among different groups based on geographic location

with regard to customer satisfaction at the subject hamburger chain. Table 30 contains the

results.
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Table 30

Multiple Comparisons – Geographic Regions

Tukey HSD

Mean 95% Confidence interval

(I) Regions (J) Regions difference Std. Error Sig. Lower Upper

(I-J) bound bound

Cincinnati 0.20028 0.09943 0.589 -0.1151 0.5156

Columbus -0.12664 0.1136 0.983 -0.4869 0.2336

Detroit 0.10966 0.10503 0.989 -0.2234 0.4428

Indianapolis -0.10422 0.10679 0.994 -0.4429 0.2345

Chicago Nashville -.57039* 0.13123 0.001 -0.9866 -0.1542

Minneapolis -0.03001 0.11816 1 -0.4047 0.3447

New Jersey 0.09211 0.11887 0.999 -0.2849 0.4691

New York -0.31035 0.09847 0.053 -0.6226 0.0019

St. Louis -0.23289 0.1092 0.505 -0.5792 0.1134

Chicago -0.20028 0.09943 0.589 -0.5156 0.1151

Columbus -0.32692 0.12883 0.25 -0.7355 0.0817

Detroit -0.09062 0.12134 0.999 -0.4754 0.2942

Cincinnati Indianapolis -0.3045 0.12287 0.282 -0.6942 0.0852

Nashville -.77067* 0.14461 0 -1.2293 -0.312

Minneapolis -0.23029 0.13287 0.776 -0.6517 0.1911

New Jersey -0.10817 0.13351 0.998 -0.5316 0.3152


135

Mean 95% Confidence interval

(I) Regions (J) Regions difference Std. Error Sig. Lower Upper

(I-J) bound bound

Cincinnati New York -.51063* 0.11571 0 -0.8776 -0.1437

St. Louis -.43317* 0.12497 0.02 -0.8295 -0.0368

Chicago 0.12664 0.1136 0.983 -0.2336 0.4869

Cincinnati 0.32692 0.12883 0.25 -0.0817 0.7355

Detroit 0.23631 0.1332 0.752 -0.1861 0.6587

Indianapolis 0.02243 0.13459 1 -0.4044 0.4493

Columbus Nashville -0.44375 0.1547 0.116 -0.9344 0.0469

Minneapolis 0.09663 0.14378 1 -0.3593 0.5526

New Jersey 0.21875 0.14437 0.886 -0.2391 0.6766

New York -0.1837 0.12809 0.916 -0.5899 0.2225

St. Louis -0.10625 0.13651 0.999 -0.5392 0.3267

Chicago -0.10966 0.10503 0.989 -0.4428 0.2234

Cincinnati 0.09062 0.12134 0.999 -0.2942 0.4754

Columbus -0.23631 0.1332 0.752 -0.6587 0.1861

Detroit Indianapolis -0.21388 0.12745 0.808 -0.6181 0.1903

Nashville -.68006* 0.14852 0 -1.1511 -0.209

Minneapolis -0.13967 0.13711 0.991 -0.5745 0.2952

New Jersey -0.01756 0.13773 1 -0.4543 0.4192


136

Mean 95% Confidence interval

(I) Regions (J) Regions difference Std. Error Sig. Lower Upper

(I-J) bound bound

Detroit New York -.42001* 0.12056 0.018 -0.8023 -0.0377

St. Louis -0.34256 0.12947 0.198 -0.7531 0.068

Chicago 0.10422 0.10679 0.994 -0.2345 0.4429

Cincinnati 0.3045 0.12287 0.282 -0.0852 0.6942

Columbus -0.02243 0.13459 1 -0.4493 0.4044

Detroit 0.21388 0.12745 0.808 -0.1903 0.6181

Indianapolis Nashville -0.46618 0.14977 0.059 -0.9412 0.0088

Minneapolis 0.07421 0.13846 1 -0.3649 0.5133

New Jersey 0.19632 0.13907 0.924 -0.2447 0.6374

New York -0.20613 0.1221 0.802 -0.5933 0.1811

St. Louis -0.12868 0.1309 0.993 -0.5438 0.2865

Chicago .57039* 0.13123 0.001 0.1542 0.9866

Cincinnati .77067* 0.14461 0 0.312 1.2293

Columbus 0.44375 0.1547 0.116 -0.0469 0.9344

Detroit .68006* 0.14852 0 0.209 1.1511

Nashville Indianapolis 0.46618 0.14977 0.059 -0.0088 0.9412

Minneapolis .54038* 0.15807 0.023 0.0391 1.0417

New Jersey .66250* 0.15861 0.001 0.1595 1.1655

New York 0.26005 0.14396 0.731 -0.1965 0.7166


137

Mean 95% Confidence interval

(I) Regions (J) Regions difference Std. Error Sig. Lower Upper

(I-J) bound bound

Nashville St. Louis 0.3375 0.15149 0.438 -0.1429 0.8179

Chicago 0.03001 0.11816 1 -0.3447 0.4047

Cincinnati 0.23029 0.13287 0.776 -0.1911 0.6517

Columbus -0.09663 0.14378 1 -0.5526 0.3593

Detroit 0.13967 0.13711 0.991 -0.2952 0.5745

Minneapolis Indianapolis -0.07421 0.13846 1 -0.5133 0.3649

Nashville -.54038* 0.15807 0.023 -1.0417 -0.0391

New Jersey 0.12212 0.14798 0.998 -0.3472 0.5914

New York -0.28034 0.13215 0.513 -0.6994 0.1388

St. Louis -0.20288 0.14033 0.912 -0.6479 0.2421

Chicago -0.09211 0.11887 0.999 -0.4691 0.2849

Cincinnati 0.10817 0.13351 0.998 -0.3152 0.5316

Columbus -0.21875 0.14437 0.886 -0.6766 0.2391

Detroit 0.01756 0.13773 1 -0.4192 0.4543

Indianapolis -0.19632 0.13907 0.924 -0.6374 0.2447

New Jersey Nashville -.66250* 0.15861 0.001 -1.1655 -0.1595

Minneapolis -0.12212 0.14798 0.998 -0.5914 0.3472

New York -0.40245 0.13279 0.075 -0.8236 0.0187

St. Louis -0.325 0.14093 0.386 -0.7719 0.1219


138

Mean 95% Confidence interval

(I) Regions (J) Regions difference Std. Error Sig. Lower Upper

(I-J) bound bound

Chicago 0.31035 0.09847 0.053 -0.0019 0.6226

Cincinnati .51063* 0.11571 0 0.1437 0.8776

Columbus 0.1837 0.12809 0.916 -0.2225 0.5899

Detroit .42001* 0.12056 0.018 0.0377 0.8023

New York Indianapolis 0.20613 0.1221 0.802 -0.1811 0.5933

Nashville -0.26005 0.14396 0.731 -0.7166 0.1965

Minneapolis 0.28034 0.13215 0.513 -0.1388 0.6994

New Jersey 0.40245 0.13279 0.075 -0.0187 0.8236

St. Louis 0.07745 0.1242 1 -0.3164 0.4714

St. Louis Chicago 0.23289 0.1092 0.505 -0.1134 0.5792

Cincinnati .43317* 0.12497 0.02 0.0368 0.8295

Columbus 0.10625 0.13651 0.999 -0.3267 0.5392

Detroit 0.34256 0.12947 0.198 -0.068 0.7531

Indianapolis 0.12868 0.1309 0.993 -0.2865 0.5438

Nashville -0.3375 0.15149 0.438 -0.8179 0.1429


St. Louis
Minneapolis 0.20288 0.14033 0.912 -0.2421 0.6479

New Jersey 0.325 0.14093 0.386 -0.1219 0.7719

New York -0.07745 0.1242 1 -0.4714 0.3164


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*. The mean difference is significant at the 0.05 level.

Based on table 26, Nashville, the top performer in this study, has statistically

significant differences with Chicago, Cincinnati, Detroit, Minneapolis, and New Jersey.

The success in Nashville requires further investigation. It will be a very good idea to

gather the best practices from the Nashville region to be implemented in other geographic

regions. It is important to note that Columbus and Indianapolis do not have any

statistically significant differences with other geographic regions. New York, the second

best performer in this study, has a statistically significant difference with Cincinnati and

Detroit. The success of New York is attributed to its consistent focus on food quality,

order accuracy, and speed of service (Z. Diaz, personal communication, December 21,

2015). It is also important to note that the top five performers (Nashville, New York, St.

Louis, Columbus, and Indianapolis) do not have any significant differences among

themselves. This observation is also true in the case of Minneapolis, Chicago, New

Jersey, Detroit, and Cincinnati, the poor performers in this study.

Findings

Based on the aforementioned discussion, it can be concluded that the hypothesis

for Question 2 is partially supported. There are statistically significant differences among

the participants in terms of race, income, age, marital status, and geographic location

while there are no statistically significant differences among the participants in terms of

gender, service delivery method, and the time of visit.

Research Question 3

To what extent are customer satisfaction and customer loyalty related at the

subject hamburger chain? To answer this research question, a Pearson correlation was
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conducted with IBM SPSS 22. One hypothesis is tested to answer this research question.

H10: There is no statistically significant relationship between customer

satisfaction and customer loyalty at the subject hamburger chain.

H1A: There is a statistically significant relationship between customer satisfaction

and customer loyalty at the subject hamburger chain.

To investigate if there was a statistically significant association between customer

loyalty and customer satisfaction at the subject hamburger chain, a Pearson correlation

was computed, and the results can be seen in table 31.

Table 31

Pierson Correlation – Satisfaction and Loyalty

Satisfaction Loyalty

Satisfaction Pearson correlation 1 .863**

Sig. (2-tailed) 0

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

The Pearson correlation coefficient in this case (.863) is positive, indicating a

positive relationship between satisfaction and loyalty. High scores on one variable are

associated with high scores on the other variable. Therefore, if satisfaction goes higher,

the loyalty goes higher too. The 2-tailed Sig. value (.000) signals a statistically significant

relationship between satisfaction and loyalty. Therefore, the null hypothesis is being

rejected.

The strength of the relationship between satisfaction and loyalty can be between

-1 to 1. This value indicates the strength between the two variables—satisfaction and

loyalty. A correlation of 0 indicates no relationship, a correlation of 1 indicates a perfect


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positive relationship, and -1 indicates a perfect negative relationship. According to

Pallant (2013), r = .10 to .29 is a small relationship, r = .30 to .49 is a medium

relationship, and r = .50 to 1 is a large relationship. Based on the guidelines outlined by

Pallant, it can be concluded that the relationship between satisfaction and loyalty is large

at the subject hamburger chain. The results are also consistent with the existing literature

as discussed in Chapter 2. Four studies conducted in the fast food industry (Bougoure &

Neu, 2010; Min & Min, 2011; Terblanche & Boshoff, 2010; Yondonperenlei & Song,

2015) which found a statistically significant relationship between satisfaction and loyalty.

Findings

Based on the aforementioned discussion, the null hypothesis is being rejected.

There is a statistically significant positive relationship between customer satisfaction and

customer loyalty at the subject hamburger chain.

Based on the results of the regression analysis, order accuracy, speed of service,

food quality, and price and value are the four most important factor of satisfaction at the

subject hamburger chain. Based on the correlation analysis, there are statistically

significance differences in satisfaction based on race, age, income, marital status, and

geographic regions while there are no statistically significance differences in satisfaction

based on gender, time of visits, and the service delivery method. The results also suggest

that there is a statistically significant positive relationship between satisfaction and

loyalty. The results found support for all eight hypotheses under Research Question 1,

and the hypothesis for Research Question 3, and partial support for the hypothesis under

Research Question 2.
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Additional Findings

Besides collecting data on the dependent, independent, and demographic

variables, the survey instrument also collected data on developmental needs of the subject

hamburger chain as seen by survey participants. Table 32 contains data for the

developmental needs.

Table 32

Frequency of Developmental Needs

Constructs Percentage

Speed of service 28%

Price and value 24%

Service quality 14%

Food quality 12%

Physical environment 9%

Technology 7%

Order accuracy 3%

Convenience 3%

Based on table 32, the top four developmental needs are speed of service (28%),

price and value (24%), service quality (14%), and food quality (12%). It is important to

note that with the exception of service quality, speed of service, price and value, and food

quality also came in as three of the top four predictors of satisfaction at the subject

hamburger chain in regression analysis. It is also important to note that order accuracy

came at the bottom of the table 32 tied with convenience, and it is the most important

predictor of satisfaction based on regression. A low score for development for order
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accuracy makes perfect sense as the subject hamburger chain performs well (98%) in

filling orders as evident by its internal survey. Besides, in the present study, order

accuracy has the highest mean score. Even though service quality is not one of the

significant predictors of satisfaction based on regression analysis, 14% customers stated

that the subject hamburger chain should improve on service quality.

Summary of Key Findings

The results suggest that satisfaction has a statistically significant association with

all independent variables of service quality, food quality, physical environment,

convenience, customer-facing technology, price and value, order accuracy, and speed of

service, thus providing support for Hypotheses 1-8 for Research Question 1. The results

also provide partial support for the hypothesis related to Research Question 2. The

findings suggest that there are statistically significant differences in satisfaction for race,

income, age, marital status, and geographic regions while there are no statistically

significant differences in satisfaction for gender, times of visit, and service delivery

method. Furthermore, the results suggest that there is a statistically significant positive

relationship between satisfaction and loyalty, thus, providing support for the hypothesis

related to Research Question 3. Based on the regression analysis, order accuracy, speed

of service, food quality, and price and value are the most important factor of satisfaction

at the subject hamburger chain. Convenience and technology are also proven to be

statistically significant, but their ability to predict satisfaction is minuscule. Service

quality and physical environment are not found to be statistically significant factors of

satisfaction. Based on developmental needs, speed of service, price and value, service

quality and food quality came in at the top.


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Thus, based on the regression analysis results, it can be concluded that order

accuracy, speed of service, food quality, and price and value are the most important

factors of satisfaction at the subject hamburger chain that need to be taken with

operational seriousness. Therefore, to improve satisfaction and loyalty, the subject

hamburger chain ought to focus on these component parts of satisfaction. The

concentrated focus on these will enhance not only satisfaction but also loyalty as it has

been established that satisfaction and loyalty have a statistically significant positive

relationship. These will be explored in detail in Chapter 5 as recommendations along with

the implications, limitations, and future direction of the study.


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CHAPTER 5

DISCUSSION, IMPLICATIONS, RECOMMENDATIONS, LIMITATIONS, and

FUTURE RESEARCH

The primary objective of the current study is to gauge the bearings of service

quality, food quality, physical environment, convenience, customer-facing technology,

price and value, order accuracy, and speed of service on customer satisfaction at a

regional fast food hamburger chain (the subject hamburger chain) with operations in the

mid-western and eastern United States. The secondary purpose is to assess the impact of

demographic variables of race, gender, income, age, marital status, time of visit, service

delivery method, and geographic region on satisfaction at the subject hamburger chain.

The final aim is to determine the relationship between customer satisfaction and customer

loyalty at the subject hamburger chain.

Chapter 1 introduced the ‘KSM for QSR’ model based on the transaction specific

model and the key concepts used in this study. Chapter 2 examined the existing literature

related to the ‘KSM for QSR’ model and the key concepts in the context of restaurant

industry. Chapter 3 discussed the methodology for the study. Chapter 4 discussed the key

findings from the study. Now, Chapter 5 discusses the implications of the key findings

for practitioners and researchers, outlines a set of recommendations to the management of

the subject hamburger chain, discusses the limitations of the study, and, finally, proposes

a framework for the future direction of study.

Summary of Key Research Findings, Implications, and Recommendations

The key findings contribute to the hospitality literature in fast food restaurant

industry in two ways. First, the ‘KSM for QSR’ model provides a systematic
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understanding of customer satisfaction in the context of the fast food restaurant industry.

Second, the current study conceptualizes and operationalizes the perception of customer

satisfaction in the fast food industry by adapting the ‘KSM for QSR’ model based on the

transaction specific model. The ‘KSM for QSR’ model measures customer satisfaction in

terms of eight different aspects of a transaction— service quality, food quality, physical

environment, convenience, customer-facing technology, price and value, order accuracy,

and speed of service.

The SERVQUEL model developed by Parasuraman et al. (1988) is a generic

model for the service industry that defined satisfaction as the difference between the

expectation of the customer and the perception of the actual service. On the other hand,

DINESERV is a customized version of SERVQUEL that was developed specifically for

the restaurant industry by Stevens et al. (1995). These two models require carrying out a

survey to measure the expectations of customers first, and then after the rendering of

service, conduct another survey to measure the perception of the service; thus, making it

suitable for a longitudinal study and unfit for a cross sectional study (Carman, 1990;

Cronin & Taylor, 1992; Teas, 1993). This is a major weakness of the models. Thus, the

approach of the ‘KSM for QSR’ model helps to overcome the weaknesses associated

with the SERVQUAL and DINESERV methods, and, therefore, provides a more accurate

method for assessing satisfaction in the fast food industry. The framework of the current

research study contains three research questions.

Research Question Number 1—Findings and Implications

Which variables related to dining at the subject hamburger chain significantly

influence customer satisfaction? The question identifies the statistically significant


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variables of customer satisfaction at the subject hamburger chain. Eight hypotheses were

tested to answer this research question.

Customer satisfaction is a key concern for any service-oriented business. The

subject hamburger chain is no exception. Therefore, there is an intense focus built into

the daily operation of the restaurants within the chain to improve customer satisfaction.

Based on the findings of the current study, order accuracy is the number one predictor of

satisfaction, which makes good sense for many reasons. If an order is being filled

incorrectly, it does not matter, if the subject hamburger chain is fast, hospitable, and

cheap with really good food; customers will have difficulty forgiving the restaurant for

incorrectly filling an order. Results also revealed that speed of service is the second most

important predictor of satisfaction at the subject hamburger chain. Customers go to the

restaurants for a quick meal with very limited time to stand in a line. Due to time

constraints, the subject hamburger chain’s customers expect fast service. For example,

customer will not visit a restaurant during their lunch break if it takes half an hour to be

served, but if the restaurant takes only a few minutes, customers will have no problem

visiting that restaurant.

Ultimately, the main reason customers go to a restaurant operated by the subject

hamburger chain is the tasty food. Thus, the food quality came as the third most

important factor of satisfaction. Price and value came as the fourth most important

determinants of satisfaction. This makes good sense as many of the subject hamburger

chain’s customers have limited disposable income and limited dollars available for food

away from home are looking for low price and high value. The implication for the subject

hamburger chain of these findings is critical; it must focus on improving these four
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factors to improve satisfaction and loyalty.

Customer-facing technology is important but has little influence on satisfaction.

This is expected because the use of technology to enhance customer satisfaction is a new

phenomenon at the subject hamburger chain, which started about 3/4 years ago. The

subject hamburger chain is attempting to enhance customer experience by using social

media platforms (Facebook, Twitter, and Instagram), a smart phone app, web ordering,

and an order confirmation board by engaging customers at a whole new level. Although

convenience came as an important predictor of satisfaction, its ability to predict

satisfaction is very little similar to customer-facing technology. Convenience of the

subject hamburger chain is being measured in terms of proximity of location, hours of

operation, parking facility, and easy accessibility. However, the increased usage of

technology will transform the idea of convenience in the future. Convenience may be

considered ordering and paying via a smartphone app and picking up the meal in 30

minutes to avoid the line at the restaurants. The implication for the subject hamburger

chain of these findings is that it should continue to focus on improving customer-facing

technology and convenience, but with much less focus than the four factors discussed

previously.

Customer service and physical environment are not important factors of

satisfaction at the subject hamburger chain. The implication from these findings is real

and potentially huge to attain better satisfaction and loyalty because the subject

hamburger chain dedicates considerable amount of recourses to better service quality and

physical environment. If some of these resources are diverted to improve order accuracy,

speed of service, food quality, and price and value, the results could be spectacular in
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terms of advancing satisfaction and loyalty.

Research Question Number 1—Recommendations

Based on the above discussion, it can be concluded that order accuracy, speed of

service, food quality, and price and value are the most important factors of satisfaction at

the subject hamburger chain. Customer-facing technology and convenience are

important, but with very little ability to influence satisfaction. On the other hand, service

quality and physical environment were not important factors of satisfaction. Thus, it is

recommended that the subject hamburger chain focus more on order accuracy, speed of

service, food quality, and price and value, somewhat reduce the focus on service quality

and physical environment, and, finally, keep some focus on customer-facing technology

and convenience. The following section contains specific recommendation to improve

order accuracy, speed of service, food quality, and price and value at the subject

hamburger chain. It also makes a case to reduce attention on service quality and

suggestive selling.

Order accuracy. It is not only the customer at the subject hamburger chain, but

customers, in general, in the fast food industry have the same view on the importance of

order accuracy. All fast food operators interviewed for the drive-thru performance study

conducted by Quick Service Restaurant magazine claimed accuracy to be the most

important component of the drive-thru experience (Oches, 2014).

McDonald’s, the sales leader in the industry, recently started a program dubbed as

“Ask, Ask and Tell,” which gives workers three chances to check if they got the

customer's order correct (Marcin, 2015). There are no alternatives of repeating order

again and again to customers to ensure that the orders are being filled correctly. Subject
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hamburger chain should start a program based on McDonald’s that will ensure employees

ask for the order when they take it, then again when they collect the money, and finally,

tell the customer what is in the bag during delivery.

Some of the regions of the subject hamburger chain use plastic bags, which makes

it easy for the customers to verify their order. Thus, it is recommended that the subject

hamburger chain use plastic bags throughout the company. Language skills of the

employees also impact order accuracy. It is difficult for an employee to take an order if

he/she does not understand what the customer is saying (Z. Diaz, personal

communication, January 04, 2016). Therefore, it is important for the frontline managers

at the restaurants within the subject hamburger chain to assign employees who can

effectively communicate with customers in positions that will be facing customers (Z.

Diaz, personal communication, January 04, 2016). The subject hamburger chain also has

to ensure that the drive-thru order taking system is in good working order. If the system is

malfunctioning, then communication between employees and customers in the drive-thru

lane will be difficult.

The subject hamburger chain has order confirmation boards which are very

helpful to ensure order accuracy in its drive-thru. When a customer places an order,

he/she can see the order on a screen in drive-thru. It is very effective in the drive-thru to

enhance order accuracy. Because of its effectiveness in drive-thru, it may help order

accuracy in the front as well. Thus, it is recommended to install an order conformation

board next to each register in the dining room too. Failure to capitalize on these

recommendations may hamper the subject hamburger chain’s ability to improve order

accuracy.
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Thus, the subject hamburger chain should encourage its frontline team members

to repeat orders to customers multiple times, use plastic bags to pack food, place team

members with fluent English language skills on the positions that directly interact with

customers, ensure that the drive-thru order taking system is in good working order, and

install order confirmation board in the dining room order taking stations.

Speed of service. To improve speed of service at the subject hamburger chain,

many measures can be taken. According to, Jonathan Deutsch (2014), fast food restaurant

operators want the operations to be faster, cheaper, and better, but one common problem

is that managers ask for speed without carefully assessing where the holdups are. Speed

of service problems are often related to poor employee training, lack of adequate

equipment, and inefficient design and layout of the kitchen and order processing area

(Deutsch, 2014). Other issues that cause speed of service to suffer are poor scheduling of

employees and lack of usage of technology.

Training especially becomes an issue of major concern at an industry with high

labor turnover rate. According to the National Restaurant Association, the overall

turnover rate for the restaurant industry was 66.3% in 2014, up 10 percentage points from

the recent low of 56.6% in 2010 while the average turnover rate for all private sector

workers stood at 44.4% in 2014, up four percentage points from 2010 ("Hospitality

Employee Turnover Rose in 2014," 2015). The labor turnover rate at the host chain was

above the industry standard in 2015 with around 90%. The costs associated with

replacing a single employee average more than $3,000 at a fast food restaurant (Kelso,

2012). Therefore, it is important for the subject hamburger chain to work on reducing

labor turnover.
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Training is an effective way to reduce labor turnover and improve speed of

service. The top reason for employee turnover is lack of training, according to many

surveys and business publications, including the Harvard Business Review; the desire to

learn is a significant catalyst in the attraction and retention of top talent (Hoffman, 2000).

A seasoned long-term trained employee is much more valuable than a brand new

employee as he/she understands the subject hamburger chain’s business model and

customers better than a new team member. A team member with understanding of

business model and customers will possess a sense of urgency, which is a prerequisite to

give faster service. If employees are not skilled and properly trained, they will not work

with a sense of urgency; thus, it is important to ensure team members are properly

trained.

Often poor speed of service is the result of lack of adequate equipment to cook

enough food to meet the demand. Thus, the subject hamburger chain ought to ensure that

there is adequate equipment to guarantee that employees can keep up with the demand.

When employees are not able to keep up with the demand, the speed of service suffers.

The layout of the restaurants and placement of the equipment are also important in

ensuring a faster service. Thoughtful and strategic placement of equipment is conducive

to efficient order taking, processing, and delivery. While filling an order, an employee

should not have to walk around the kitchen to collect each item; all items should be

placed within a few steps. Thus, the subject hamburger chain should critically evaluate

the kitchen design of each restaurant and take necessary steps to ensure it is efficient and

conducive to fast service.


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Fast food is a labor-intensive operation. A restaurant must have enough

employees to prepare products, keep the restaurant clean, and serve customers. A highly

trained team, efficient design and layout, and proper equipment placement will fail if the

proper number of employees is not scheduled. Thus, the scheduling of employees must

reflect the needs of the business at each of the restaurants at the subject hamburger chain.

However, scheduling the right amount of help is contingent upon the managers’ ability to

forecast sales effectively. The good news is that the subject hamburger chain has a very

good system to project sales and prepare an effective weekly schedule. However, the

issue of the proper usage of the forecasting and labor scheduling software persists; thus,

the subject hamburger chain should continue to train its managers in the effective use of

software. The subject hamburger chain also may think of adding a module within the

scheduling system enabling the system to alert employees of their schedule weekly or

even daily via text message or/and email. This will greatly improve tardiness and

absenteeism problems that effect its restaurants often. Today’s restaurant workers rely on

their cell phones, text messages, email and the web to connect with their work; to operate

at optimum staff levels, employers need to create an employee work schedule and use

scheduling software that fits into the busy lifestyle of today’s new mobile worker

(Halvorson, 2011).

Technology can help shorten lines at fast food restaurants and improve speed of

service. A smart phone app can be of immense help in improving speed of service at fast

food restaurants. With a smart phone app, restaurant chains can allow guests to order

ahead, pay for their meal, order and send gift cards, study the nutritional aspects of their

customized choices, and track their loyalty reward points (Jennings, 2015). The good
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news is that the subject hamburger chain has a smart phone app on the IOS, Android, and

Windows platforms. The subject hamburger chain should continue to promote the smart

phone app and encourage customers to use it more often by offering promotional prices

that can be only redeemed via the smart phone app.

Besides the smart phone app, a digital menu board can be of great help in

reducing service time at fast food restaurants. With high-definition graphics, digital menu

boards can fit more photos and prices, giving a restaurant a much better way to

communicate the food offerings and related prices with customers. It can make the menu

board less busy, thus improving readability. Digital boards have reduced ordering time at

fast food chains, thus improving speed of service (Hardy, 2014). Therefore, it is

recommended that the subject hamburger chain install digital menu boards at the

restaurants it operates.

Thus, to improve speed of service, the subject hamburger chain should train its

employees properly to reduce high labor turnover, ensure that there is enough equipment

to meet the demand, ensure that the kitchen design is conducive to speed, train managers

on the proper use of sales forecasting and labor scheduling programs, alert team members

via text message or email about their weekly and daily schedule, and, finally, use

technology for its advantage to advance speed of service. Failure to capitalize on the

recommendations will be a missed opportunity for the subject hamburger chain to

improve satisfaction and loyalty by improving speed of service.

Food quality. Based on industry journal, the emerging food trends in the fast

food industry consist of healthy food, Thai inspired food, transparency of food sourcing,

sustainability, customized meals, local tastes, and food safety. These trends indicate a
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changing customer base for the fast food industry, and the industry ought to adapt

quickly. Thus, it is recommended that the subject hamburger chain incorporate some of

these trends into its future menu development plan.

Today’s health conscious customers are craving healthy meals even at fast food

chains. A few years ago, no American customer would have regarded a bowl of vegetable

scraps dressed with lime-cilantro or spicy pesto vinaigrette as fast food, but millions of

diners, fueled by concerns about their health and propelled by a general distaste for

industrially produced and highly processed food, have begun to shun the fast food chains

that have long shaped the American culinary character in favor of fast food chains

serving healthy food (Specter, 2015).

The majority of the existing products at the subject hamburger chain are meat-

based, creating two problems. First, the meat-based products increase the food cost and,

more importantly, portray an unhealthy image; as a result, the subject hamburger chain

should look at vegetables as ingredients when developing new menu items (Wolf, 2016).

Fast food operators are realizing this trend and offering more and more vegetable-only

options and plant-based meatless proteins than ever before (Wolf, 2016). To make meals

healthy, the subject hamburger chain should focus on introducing new menu items based

on vegetables and plant-based protein. A salad and vegan chili with locally sourced

organic ingredients would be very appealing to health conscious customers. In addition,

the subject hamburger chain should look into the creative uses of potatoes, mushrooms,

broccoli, cabbage, kale, and other vegetables in its menu development process. Vegetable

based menu items will cut food costs and raise its profile as a provider of healthy meals.

Failure to offer a healthy menu option will be a missed opportunity to bring in new
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customers who focuses on eating healthy.

The use of the flavorful Thai ingredients in fast food environment is bringing

success in advancing sales and profit. Texas-based Pie Five Pizza Company ran a limited-

time offer of a Thai-rrific Pie, a pizza crust topped with sweet Thai chili sauce,

mozzarella and provolone cheeses, sliced grilled chicken, a mix of vegetables, crushed

red peppers, carrot sticks and cilantro, and it was a hit with customers, increasing average

sales by 8% (Glazer, 2016). The subject hamburger chain experimented with sriracha

flavored chicken sandwiches with limited success. It should consider using other Thai

ingredients (fish sauce, curry paste, garlic etc.) while developing new menu items in the

future. A Thai curry paste inspired chicken sandwich is worth experimenting with.

Customers are looking not only for healthy meals at the fast food chain but also

for transparency in terms of sourcing of the food. They want to have a general idea of

how their food was prepared and where did it come from? How the animals are being

raised? Increasingly, fast food customers are demanding information such as what they

are eating and how it was made; they prefer to watch their food being prepared, see the

ingredients, and have a sense of where it all came from (Specter, 2015).

Fast food chains are listening to their customers. Recently, McDonald’s, the fast

food sales leader, announced measures to make its food sourcing more in line with

customer demands. McDonald’s has abandoned margarine in favor of butter and

introduced low calorie food (Specter, 2015), abandoned chicken raised with antibiotics

and milk from cows that have been treated with growth hormones (Taylor, 2015) and

cage free eggs (Strom, 2015). Denny’s also committed to cage-free eggs and said the

cage-free egg commitment was part of a larger shift toward premium ingredients on its
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menu, which includes USDA select beef, wild-caught and sustainable salmon, fresh-cut

seasonal fruit and vegetables, and seven-grain bread options (Ruggless, 2016).

The subject hamburger chain can take a cue from McDonald’s and Denny’s. The

24-hour breakfast offering at the host chain with cage-free eggs will go well and far with

customers who focus on humanely raising animals. In January 2016, the subject

hamburger chain announced that, it will be serving cage-free eggs by year 2025. The

sourcing of the food also needs to be communicated with customers via a smart phone

app, point of sales material, website, and social media. It will be beneficial to dedicate a

portion of the subject hamburger chain’s website to food transparency. Even starting a

brand new website to communicate these issues with customers is not a bad idea at all.

Failure to reveal the sourcing of food may hinder attracting customers who like to eat

responsibly with environmental sustainability in mind.

Customers are also looking for the ability to customize their meals to their unique

taste (Specter, 2015). Giving customers the ability to create a meal with options to mix

and match, especially with ingredients, is a new trend in the fast food environment. The

subject hamburger chain can introduce restaurants with digital kiosks, where customers

can build their own sandwiches on a touch screen and then wait for the speedy delivery of

the freshly made product. McDonald’s started a program dubbed “Create Your Own

Taste” that allows customers to choose from a wide variety of buns (artisan roll, tender

and buttery, or the sesame seed-topped premium bun), toppings (bacon, chili-lime tortilla

strips, guacamole, red onion slices, tomatoes, pickles, grilled mushrooms, grilled onions,

and lettuce leaves), cheese (natural sharp white cheddar, natural pepper jack, and

American) and sauce (ketchup, mustard, sweet barbecue, creamy garlic, and peppercorn)
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for a hamburger prepared either with beef or sirloin (Herman, 2015). Among other

initiatives designed to improve service, “Create Your Own Taste” is contributing to

McDonald’s recent comeback in the domestic market (Egan, 2015). A similar program

like McDonald’s dubbed as “Crave Your Way” will give customers at the subject

hamburger chain the opportunity to mix and match and customize meals to their own

tastes. Lack of ability for customers to customize their meal may be a missed opportunity

to attract a whole new group of customers at the subject hamburger chain.

Food safety in the fast food restaurant environment is severely compromised

when sick employees are allowed to cook and serve. Due to lack of paid sick days and

low wage, workers often cannot afford to stay home when they are sick. According to the

Restaurant Opportunities Center (ROC) United, 88% of the fast food workers do not have

paid sick days, 66% of them cook and serve while sick, and 74% of them cannot afford to

take the day off while sick, and these workers have been linked to outbreaks of

Norovirus, hepatitis A and typhoid fever among customers ("Serving While Sick," 2010).

Thus, the subject hamburger chain should pay particular attention when employees come

to work sick to ensure food safety is not compromised. The subject hamburger chain

gives employees personal days off, which can be used while employees are sick. The

frontline managers have to make sure that team members do not work while they are sick,

and failure to do so will risk food safety.

Another trend in fast food arena is incorporating local taste into the menu.

McDonald’s has started to serve lobster roll in Maine; an Indiana McDonald’s restaurant

is testing pulled pork; in Maryland and Virginia, customers can order a Filet-O-Fish

sandwich seasoned with Old Bay; and Kentucky customers can get burgers with bourbon-
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flavored sauce (Maze, 2015). The subject hamburger chain should look into the

possibility of including menu items based on local taste. Markets with large Hispanic

population should explore the possibility of offering rice and beans. Another opportunity

for the subject hamburger chain is the introduction of a halal menu, especially in New

York City where there is a large Muslim population. Estimates of the Muslim population

in New York City range widely from 600,000 to 1,000,000 (Otterman, 2014). Opening

the restaurants to Muslims via offering a halal menu option may open the door to

thousands of new customers, bringing in new revenue and boosting the profit margin.

Based on the above discussion, the subject hamburger chain should focus on

healthy food options, Thai inspired food option, transparency on food sourcing,

sustainable food sourcing, customization of meal, food safety, and food items based on

local tastes and preferences. Failure to capitalize on these recommendations could result

in increasing insolation with the prevailing trends in the fast food industry.

Price and value. Maintaining a low price is increasingly becoming difficult for

the labor-intensive fast food industry due to changes in cost structure. Nowadays, rising

labor cost is a major concern for the fast food operators in the backdrop of political

rhetoric to accelerate minimum wage increases across the country. Since 2014, many

states and municipalities have announced hikes up to $15, and the State of New York has

even targeted the fast food industry for mandatory increases up to $15 by year 2018 in

New York City and 2021 in the rest of the state (Kelly, 2015). Thus, an effective pricing

strategy has become increasingly difficult to adopt, but there are some pricing strategies

that can work for the subject hamburger chain to be profitable without alienating its

customer base.
160

The “big data,” which is cost analytics, is here and can help fast food operators

formulate an effective pricing strategy. By using advanced analytics, the subject

hamburger chain can achieve a unique ability to adjust pricing (relative to market

opportunity) proactively, automatically, and on an ongoing basis (Kelly, 2015). Kelly

(2015) also explained that the big data opportunity involves a massive sampling of

customers’ habits and behaviors to determine how consumers will react to variations in

the price and combination of products.

In the midst of big data, what is the best approach for the subject hamburger

chain? Over category and cost based pricing, Kelly (2015) suggested a market based

pricing strategy, which involves looking at direct and indirect competitors in a category

and aligning a brand’s position within the market’s price range. Thus, it is recommended

that the subject hamburger chain hire a data scientist to create an algorithm to assess

competitive and current market trends to accurately determine pricing with the idea to

garner invaluable business insights on an ongoing basis. This may provide the subject

hamburger chain with the opportunity to set a different price at each location based on the

competitive landscape. Without harnessing the power of big data, the subject hamburger

chain may struggle as minimum wages increase across the board, and incorporating

analytics into the pricing strategy can be the key that opens the door to sustained growth

and success (Kelly, 2015).

There is another dimension to pricing as well. The difference between burgers

that cost less and burgers that cost more is not the actual ingredients, but the mere

mentioning of those ingredients on the menu (Massa & Covington, 2014). Massa and

Covington (2014) referred to a new pricing strategy for the restaurant industry dubbed as
161

‘attribute based pricing’, which is a strategy that draws from a product’s internal

characteristics and external factors to ensure that an item’s price reflects its consumer-

perceived value. For example, the cost of seasoned hand cut fries is more than machine

cut fries. The point here is that if an operator is seasoning and hand cutting fries and not

mentioning these in pricing the product, the operator is missing an opportunity to charge

customer more.

Based on the above discussion, the subject hamburger chain should focus on

harnessing the power of big data to set dynamic pricing in its restaurants based on market

environment and attribute based pricing. The implication for not following these

recommendations will result in a loss of sales increase via charging customers what they

are willing pay.

Service quality and suggestion selling. The subject hamburger chain focuses

tremendously on service quality and physical environment. Customer service specialists

are expected to greet customers with their name— ‘Hi, this is Sara, how may I help you

today?’. They are expected to make eye contact and, if possible, make conversation with

customers. Doing this definitely makes customers feel special, but this takes valuable

time away that could have been used to improve order accuracy and speed of service.

Thus, it is recommended that the subject hamburger chain move some of the attention

away from being hospitable and invest those valuable seconds to better order accuracy

and speed.

The subject hamburger chain also focuses immensely on suggestive selling. There

are no doubts that suggestive selling adds to the topline sales. But the question is, at what

expense? It is often at the expense of accuracy and speed. Because of the focus on
162

suggestive selling, the customer service specialists are expected to suggest cheese with

the combo meals and upsizing the fries and soda, and then complete the sale with the

suggestion of a dessert. These slow down the service. Suggestive selling creates another

major problem for the subject hamburger chain by negatively affecting the perception of

price and value. As much as 30% more can be added to tickets/bills due to suggestive

selling, severely hampering the value proposition. Therefore, it is recommended that the

subject hamburger chain move the focus from suggestive selling to accuracy and speed.

Thus, the host chain should move its focus from service quality and suggestive

selling in favor of order accuracy and speed of service. Failure to do so will hamper

speed and accuracy and give rise to the high price and low value proposition. The

implication of these changes for the subject hamburger chain is huge. Focus away from

service quality and suggestive selling will mean the difference between being a faster

chain and a slower chain and a chain with a reputation to fill orders correctly and

incorrectly.

Research Question Number 2—Key Findings, Implications, and Recommendations

Which demographic variables significantly influence customer satisfaction at the

subject hamburger chain? Race, gender, income, age, marital status, time of visit, service

delivery method, and geographic region were analyzed and explored in terms of their

impact on satisfaction. One hypothesis was tested to answer this question.

The results of the current study demonstrate that race, income, age, marital status,

and geographic location have important impacts on satisfaction at the subject hamburger

chain. People from different races, incomes, ages, marital statuses, and geographic

locations feel differently about satisfaction at the subject hamburger chain. The
163

implication of these findings is important for the subject hamburger chain.

While developing programs to enhance customer satisfaction and loyalty at its

restaurants, the subject hamburger chain should focus on demographic variables. Since

there are racial differences in satisfaction, what works for one group may not work for

another racial group. The same applies for groups based on income, age, marital status,

and geographic locations. Lower income customers are looking for lower price and

greater value, so restaurants with a customer base of low income should focus on lower

price while restaurants with a higher income customer base definitely should charge

more. What works for the Millennials and Generation X will not work for the Baby

Boomers and the Silent Generation. There should be more focus on technology to engage

young customers while the focus should be on human element to interact with their older

cohorts of Baby Boomers and the Silent Generation. The success of halal menu items will

be much greater in a city with a large Muslim population than a city with very little or no

Muslim population.

Gender, time of visit, and service delivery method did not have any effect on

satisfaction at the subject hamburger chain. These findings also have implication for the

subject hamburger chain. Since there are no differences in satisfaction based on gender,

time of visit, and service delivery method, efforts at customer service at the subject

hamburger chain based on these three demographic factors may be a waste of efforts and

resources.

Based on the above discussion, the subject hamburger chain should consider the

effects of race, income, age, marital status, and geographic locations while developing

programs to improve satisfaction and loyalty at the restaurants that it operates. The
164

subject hamburger chain also should not engage in developing programs to improve

satisfaction and loyalty based on gender, time of visit, and service delivery methods.

Research Question 3—Key Findings, Implications, and Recommendations

To what extent are customer satisfaction and customer loyalty related? The

relationship between customer satisfaction and customer loyalty was explored at the

subject hamburger chain. One hypothesis was tested to answer this research question.

The results of the study suggest that there is a positive relationship between

customer satisfaction and customer loyalty at the subject hamburger chain. This finding

has significant implications. To build loyal customers, the subject hamburger chain must

focus on creating a satisfied customer. Results of the study suggest that to create satisfied

customers, the subject hamburger chain must focus on order accuracy, speed of service,

food quality, and price and value. A loyal customer gives repeat business. More

importantly, he/she also recommends the restaurant to friends and family (Min & Min,

2011). This is a powerful tool to build sales and volume. Thus, it is recommended that the

subject hamburger chain focus on creating satisfied customer by filling the orders

accurately, serving the customers quality food quickly, and keeping the price competitive.

Satisfied customers will create loyal customers.

Limitations and Direction for Future Study

The results of the current study contribute to the body of knowledge in the fast

food industry specific to determinants of satisfaction. However, the current study has

limitations. It was limited to the sample of customers at one regional fast food restaurant

chain with operations in the mid-western and eastern United States. Many fast food

chains, such as McDonald’s, Burger King, Wendy’s, and Subway, have extended their
165

business to the global market, and the factors identified in this study impacting customer

satisfaction have the potential to be inconsistent across national borders or even state

borders here in the United States. Therefore, future studies should attempt to examine the

impact on satisfaction of the variables used in the current study by targeting different

samples in the fast food restaurant industry in wider geographic regions or even multiple

countries.

This study was conducted at a regional fast food hamburger chain. Therefore, the

results of the study cannot even be generalized across fast food industry, let alone fine

dining, casual, fast casual restaurants, and the restaurant industry as a whole. Thus, future

studies should include other segments of restaurants, such as fine dining, casual dining,

and fast casual, to reap the benefits of covering the restaurant industry as a whole. What

is important at fast food restaurants may not be important in other segments. For

example, speed of service came as the second most important factor in this study; this

may not be the case when people dine at fine dining restaurants.

On the other hand, service quality did not come as an important factor of

satisfaction in the current study while it may be the most important factor in fine dining

restaurants. As a result, future studies comparing the crucial customer satisfaction

attributes of all types of restaurants may assist restaurant managers to better match the

needs of each restaurant segment. Data collection across the restaurant industry also will

allow comparative analysis among different classes of restaurants – fine dining, casual

dining, fast casual, and fast food.

The current study considered only the effects of service quality, food quality,

physical environment, convenience, customer-facing technology, price and value, order


166

accuracy, and speed of service. From a pure study design standpoint, future studies

should benefit from developing a more robust measurement incorporating the eight

customer satisfaction factors considered in the current study and other unique attributes

that exist in the restaurant industry and missed by this study, such as corporate image,

brand equity, marketing, corporate social responsibility, and sustainability.

By design, this study is cross-sectional. Because this is a cross sectional study,

data was collected at one point in time. A longitudinal study would probably provide

more valuable business insights, as data would have been collected at least in two

different points in time. Collection of data in more than one time would allow further

comparative analysis to evaluate the effectiveness of intervention measurements and

change in perception about the subject hamburger chain among customers. Thus, in the

future, a longitudinal study may uncover better business insights for the subject

hamburger chain.

Besides being cross-sectional, the current study is quantitative by design as well.

Because of its sheer quantitative nature, only quantitative data was collected and

analyzed capturing the perception of customers about the impact of service quality, food

quality, physical environment, convenience, customer-facing technology, price and value,

order accuracy, and speed of service on satisfaction. The study did not ask any open-

ended questions. Since the study did not ask any open-ended questions, the participants

were not given the opportunity to express their reasoning behind their perceptions. Thus,

future studies should include qualitative and quantitative data.

Another limitation of the study is the ‘halo effect’, the tendency of a judge to rate

individual traits according to the rater's general impression of the object that is being
167

rated (Oh, 2007). Wu and Petroshius (1987) explained this phenomenon further by stating

that when a participant in a study has a very positive attitude toward a particular attribute

which is important or the overall impression of a retail organization, he/she may project

the positive feeling to other attributes covered by the same instrument. Thus, the

existence of a halo effect for any of the eight variables used in the present study may

have clouded others, impairing the true effectiveness of the study as a whole. For

example, if a participant has a particular attachment to the subject hamburger chain

brand, the halo effect may be in play. This is particularly true because the participants

were recruited at the restaurants. To minimize the halo effect, future studies should

collect data from other means, such as an e-mail list, a college community, etc.

Another limitation is that the study used only an Internet survey tool and,

therefore, might have restricted some users from participating in the survey. The

customer population may have been more adequately represented if the survey was

conducted through an alternate method such as telephone interviews or in-person

interviews. Thus, future studies should also use a method of data collection aside from an

Internet survey tool.

As a reflection of the multiple recommendations for future studies, the two most

important recommendations that should be incorporated into a future study would be the

addition of other variables, such as environment sustainability efforts, transparency,

brand image, and marketing efforts, and collection of data not only via quantitative

method but also via qualitative method – asking open-ended questions.

Conclusion

Based on the result of the current study, order accuracy, speed of service, food
168

quality, and price and value are the most important factors of satisfaction at the subject

hamburger chain. The results of the study also established that there is a statistically

significant positive relationship between satisfaction and loyalty. Therefore, to improve

satisfaction, the subject hamburger chain should focus on filling orders accurately,

providing faster service, serving quality food, and keeping the price competitive.

Increased satisfaction will lead to increased loyalty as it is proven that there is a positive

association between satisfaction and loyalty.

Specifically, the host chain should:

• Increase order accuracy by repeating orders to customers multiple times – after

taking the order, prior to collecting money, and during delivery of the meal.

• Improve speed of service by focusing on training employees, reducing labor

turnover, designing the kitchen intelligently conducive to efficiency, placing

equipment properly to reduce steps, proper scheduling of employees, and adapting

to technology, such as a digital menu board.

• Improve food quality by serving healthier food, being transparent about the

sourcing of the ingredients, developing menus based on local tastes, and giving

the customer the ability to customize a meal.

• Improve pricing by tapping into big data and adopting an attribute based pricing.

The overall conclusion is that through careful and creative management of the most

important factors of satisfaction, the subject hamburger chain should be able to improve

customer satisfaction and loyalty, which will help in achieving both customer service

goals and overall company goals in terms of transaction, sales, and profits. According to

the chief marketing officer of White Castle System, Inc., “Today’s customers are not only
169

looking for their orders to be filled correctly, they are also looking for good food supplied

from sustainable and humane sources, served fast yet also at a great price” (K. Kelly-

Bartley, personal communication, January 08, 2016).


170

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Appendix B

Survey Code

Constructs Code Question

Qualifier QUA1 Q1

Service quality SQ1 – SQ5 Q2 – Q6

Food quality FQ1 – FQ7 Q7 – Q 13

Environmental quality EQ1 – EQ4 Q14 – Q17

Convenience C1 – C4 Q18 – Q21

Technology T1 – T4 Q22 – Q25

Price/value PV1 – PV2 Q26 – Q27

Order accuracy OA1 – OA4 Q28 – Q31

Speed of service SOS1 Q32

Loyalty L1 – L3 Q33 – Q35

Satisfaction S1 – S4 Q36 – Q39

Demographics RACE, GENDER, Q40 – Q44

INCOME, AGE, MARITAL

STATUS

Time of Visits BREAKFAST, LUNCH, Q45

DINNER, LATE NIGHT,

OTHER TIME

Delivery Method DINE-IN, TAKEOUT, Q46

DRIVE-THRU
211

Constructs Code Question

Location CHICAGO, CINCINNATI, Q47

COLUMBUS, DETROIT,

INDIANAPOLIS,

LOUISVILLE,

NASHVILLE,

MINNEAPOLIS, NEW

JERSEY, NEW YORK, ST.

LUIS

Developmental Need DEVELOPMENTAL NEED Q48


212

Appendix C

Email Communication
213

Appendix C

Email Communication

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