Determinants of Customer Satisfaction

Determinants of customer satisfaction in the local café and restaurant industry in Reading, UK.

Justification of the study

No studies have thus far been conducted to determine customer satisfaction in the hotel industry in Reading, UK. Most of the studies carried out have been directed at the hospitality industry in Europe and the US, with little or no mention of the UK hotel industry. In addition, the little study that has been conducted has mainly dwelt on the well-established hotels in the UK, while the small cafes and restaurants have not been studied. As such, conducting this particular study will help to shed light on the key determining factors of the café and restaurant industry in Reading, UK. In addition, the findings of this study shall act as a stepping stone for conducting future related studies in this area.  This is because it can be used by other researchers in the area as a rich body of knowledge.

Research Question

The current study shall endeavor to explore the following research questions:

Are service quality dimensions of the hotel and restaurant industry important in influencing customer satisfaction?

Does the level of customer satisfaction increase with an increase in the level of food quality

Does the appearance and physical design of a restaurant influence the level of customer satisfaction?

Is there a positive correlation between on the one hand, the prices of food offered at a restaurant and on the other hand, customer satisfaction?

Aim and objectives

The current study shall attempt to realize the following aims and objectives:

To determine the impact of service quality in the hotel industry on customer satisfaction

To assess the influence of the physical design and appearance of a hotel establishment on levels of customer satisfaction

To determine the correlation between the level of food quality and customer satisfaction

To ascertain the impact of food prices on the overall satisfaction of customers in the hotel industry

Relevant Academic theme

Customer satisfaction

Customer satisfaction has gained immense popularity in the hospitality business and has been the center of debate in many of the research studies conducted in this area. Although there have been many attempts to both explain and measure customer satisfaction, most of the scholars in this field are yet to arrive at a consensus as regards its definition (Giese and Cote, 2000). Gundersen, Heide, and Olsson (1996) have defined customer satisfaction as a post-consumption assessment as regards a specific service or product. Customer satisfaction is a culmination of an assessment process that draws a disparity between pre-purchase expectations with the perceived performance of a service or product during and after its consumption (McQuitty, Finn & Wiley 2000).  Satisfaction is normally achieved when a service or product exceeds the expectation. However, in case the performance of a service or product is below expectation, we talk of dissatisfaction. Studies indicate that there is both a direct as well as and indirect effect of customer satisfaction on business results. In separate studies, Yueng et al. (2002) and Luo and Homburg (2007) found a positive correlation between business profitability and customer satisfaction. Nevertheless, most of the research studies that have thus far been conducted in this area have mainly concentrated on determining the connection between customer satisfaction and customer behavior patterns (Dimitriades, 2006; Chi & Qu, 2008; Faullant et al., 2008). Research findings by the above studies reveal that as customer satisfaction increases, so does customer loyalty, thereby influencing repurchase intentions as well. Seeing that customer satisfaction plays a significant role in the purchase behavior of customers, little wonder then that a lot of research has been dedicated to examining the determinants of satisfaction (Zeithaml & Bitner 2003). Both the objective factors (for example, service and product features) and subjective features (emotions, customer needs) could be useful in determining satisfaction. In the hospitality industry, we have quite a number of studies that have sought to assess attributes that customers could find important as regards the issue of customer satisfaction. For example, Choi and Chu noted that room value and quality all played a key role in influencing customer satisfaction. Separately, Su (2004) found out that hotel guest satisfaction could be determined using guest comment cards (GCCs) placed either at the reception desk or another place that is visible to the guests. On the other hand, a number of studies show that most hotel chains utilize guest satisfaction assessment techniques based on insufficient practices in order to make complex and crucial managerial decisions (Basky, 1995; Su, 2004).

Theoretical Underpinning / Earlier Studies

Customer satisfaction is one of the most reliable yardsticks with which the performance of the hotel industry can be measured. Customer expectations and demands are always on the increase in the hospitality industry as such, there is a need to ensure that customer satisfaction increase in tandem with this rise. A number of studies have thus far been conducted with a view to determining the customer satisfaction components of the hospitality industry.  In their study, Karunaratne and Jayawardenal (2010) endeavored to undertake a study to determine customer satisfaction with a five-star hotel located in Kandy district, Sri Lanka, as the case study. In order to determine customer satisfaction at the hotel, the authors made use of the Serqual model. In their study, Karunaratne and Jayawardenal (2010) had an overall objective of assessing customer satisfaction levels at the hotel, in addition to examining the key factors that determine customer satisfaction at this hotel. A questionnaire was the tool of choice for data collection. It had a total of 49 questions. These questions had been constructed on the basis of five variable dimensions of Reliability, Assurance, Tangibility, Empathy, and Responsiveness (Karunaratne and Jayawardenal, 2010). The study’s participants were randomly selected from the residential customers of the hotel. In total, sixty respondents took part in the study. In addition, the researchers also conducted a perception survey and focus group discussions among hotel staff. This was aimed at enriching the study findings. Use was made of descriptive statistics in analyzing data. In this case, the MINITAB Version 14 was the tool of choice, as it allowed for a Two-sample T-test to be conducted as well. According to the research findings, most of the customers who took part in the study registered their satisfaction with the overall service offered by the hotel, and more so as regards Responsiveness, Tangibility, and Assurance.  In addition, the study findings also showed that the hotel was yet to fulfill customers’ satisfaction as regards the issues of Empathy and Reliability.

Dominici and Guzzo (2010) conducted a qualitative analysis study of the Sporting Club Hotel in Sicily using the Critical Incident Approach. The analysis enabled the researchers to determine the levels of customer satisfaction at the hotel for the individual services offered. The qualitative analysis revealed good customer satisfaction levels. An interview with the hotel’s management also revealed that they were not aware of the gaps revealed by the study in terms of the quality of service offered in the room and beach services. The study concluded by recommending that the hotel’s management customize the services offered at both the beach and rooms in order to realize improve overall performance.

Inkumsah (2011) conducted a descriptive study whose aim was to categorize and determine elements of customer satisfaction in the local restaurant industry in Ghana.  The researcher made use of a survey questionnaire with close-ended questions in order to capture the responses made by participants in the study. The study had identified five critical determinants of customer satisfaction in the hotel industry that it sought to examine. They are food quality, service quality dimensions, prices, the atmospherics of a restaurant, and the perceived way of life of the customers.  The research findings of this study revealed that the quality of service, price, and food quality had the greatest impact in determining customer satisfaction. In addition, the study also revealed that such service quality variables as efficient staff, attentive staff, and staff greeting customers as well as their knowledge about food had the most critical impact on customer satisfaction. They were followed by food quality and price, in order of importance.

Reference List

Dominici, G & Guzzo, R 2010,’ Customer Satisfaction in the Hotel Industry: A Case Study from

Sicily’, International Journal of Marketing Studies, Vol. 2, No. 2, pp. 1-10.

Inkumsah, W A,’ Measuring Customer Satisfaction in the Local Ghanaian Restaurant Industry’,

European Journal of Business and Management, Vol. 3, No. 2, pp. 1-15.

Karunaratne, W M K K & Jayawardena1, L N A C 2010,’Assessment of Customer Satisfaction

in a Five Star Hotel – A Case Study’, Tropical Agricultural Research, Vol. 21, No. 3, pp.

258 – 265 (2010)