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Having completed your Research Proposal in Assessment 1, you are now required to undertake the proposed research and complete a Research Report. Your Research Report must include the latest/updated information gathered during your research phase. Please ensure you also refer to the Role of the Research Process and Timeline documents in your Course Guide for guidance.

This assessment requires learners to  critically evaluate a strategic or operational problem or opportunity in a New Zealand business or organisation

1. Conduct research and critically analyse and evaluate data and information to determine findings

2. Analyse findings to determine implications and conclusions, and develop recommendations for the chosen business or organisation

3. Apply a critical understanding of relevant business and management theory to support research design, conclusions, and justifying recommendations including the cost and benefits

Your Research Report must adhere to the following structure:

  • What is your research about? Note the title should be a short, concise phrase.
  • Provides the objectives of the study and identifies the gap, opportunity or problem that has motivated the study
  • Discusses the value added of the study by adding to the research gap, providing new insights to the opportunity or problem, etc.
  • Outlines the significance of the chosen topic and guides the reader about what to expect in the sections following
  • Discusses how your research links and complements other relevant literature in your chosen field and fills literature gaps.
  • Demonstrates a broad knowledge of the relevant literature related to the researcharea
  • Highlights trends in literature e.g. research areas, methodology etc.

This section may be a repeat from your Research Proposal which you can include in this Research Report. It is expected that you have revised that submitted in the Research Proposal in response to feedback from your assessor and discussions with your supervisor. Therefore, it is expected that significant changes are made to this section to reflect this feedback.

  • Specific aim orpurpose of the research is outlined 
  • Qualitative studies:Coherent, clear and reasonable research question(s) that cohere with the research purpose are provided.

OR

  • Quantitative studies: Theoretical (Conceptual) framework underpinning the research is provided and hypotheses derived.

This section may be a repeat from your Research Proposal which you can include in this Research Report. It is expected that you have revised that submitted in the Research Proposal in response to feedback from your assessor and discussions with your supervisor. Therefore, it is expected that significant changes are made to this section to reflect this feedback.

  • Discussion and Justification for research design employed (hint: how your approach/paradigm allows to answer the research question)

The task mentioned above might be a repeat from your Research Proposal which you can include in this Research Report. It is expected that you have revised that submitted in the Research Proposal in response to feedback from your assessor and discussions with your supervisor. Therefore, it is expected that significant changes are made to this section to reflect this feedback.  

  • Discuss how the data was collected. Be specific on any new information you want to provide here after the data collection has been done.
  • Discuss how the data was analysed. Be specific on any new information you want to provide here after the data collection has been done.

Present a summary of data that has been analysed. This can include explanatory or supporting data (e.g. extracts from interviews, quotes). Includes illustrations, figures or tables.

  • Evaluate and discuss results. Comment on significant findings, what they reveal and their implications. Can also include whether any initial hypotheses were supported if applicable; whether or not the findings met the aims of the study; limitations, flaws or problems in study design or methods
  • Contrast of your findings with other research (existing findings from the literature)
  • Articulate clear recommendations based on your findings

Conclusion & Further Research

  • Provide answer(s) to the research question(s) or hypotheses statements and summarise key findings and key points of discussion
  • State further research to be carried out

The significance of customer satisfaction for business organizations

Causes Of Customer Satisfaction In a Small-Scale Restaurant: A Case Study of Café De Roadies

The business organization gains popularity and becomes successful by en-cashing their satisfied and loyal customers. The restaurant industry has grown over the years across the world including New Zealand thereby, contributing greatly towards the economy of New Zealand. It has been seen that the restaurant business in Wellington and Auckland in New Zealand has grown by 5.2% and 6.8% respectively over the past six years (Saeidi et al., 2015). However, the major issues the restaurants are facing are constantly changing needs and expectations of the customers followed by increased level of competition in the restaurant business sector (Orel & Kara, 2014). Thus, understanding, managing and fulfilling the expectation of the customers has become a major challenge for the small restaurants in New Zealand.

This study is conducted based on the small scale restaurant named Café de Roadies in Papatoetoe, Auckland, New Zealand. This restaurant was established in 2016 in Hunter Plaza at Greater South Road, Papatoetoe. However, since its establishment, the restaurant has gained quite popularity, Café De Roadies is encountering issues in terms of customer satisfaction that is elaborated below.

The main problem identified for Café De Roadies is lack of customer satisfaction and have a significant effect on the performance of the restaurant. Due to lack of customer satisfaction, a decreased sale is noticed for the restaurant. As the customers is not feeling satisfied upon their visit to the restaurant, they are not visiting the place in future and also not recommending the place to other (Wu, 2013). This is resulting in minimized visit of the customers in the restaurant thereby, resulting in loss of sales, business and loyal customer base. The customers are seen leaving negative comments on the website of the restaurant. Thus, failure to meet the expectation of the customers is resulting is failure of retaining the existing customers as well as attracting the new customers (Agnihotri et al., 2016).

The aim of the research is to causes of customer satisfaction in a small-scale restaurant in Café De Roadies

The objectives of the research are as follows:

  • To understand the concept customer satisfaction
  • To analyze critically the various factors of customer satisfaction
  • To assess the relationship between the different variables such as service quality, product and price on customer satisfaction for Café De Roadies
  • To provide suitable recommendations for improving customer satisfaction for Café De Roadies restaurant.

The questions of this research are:

  • What do you understand by customer satisfaction?
  • What are the different factors of customer satisfaction?
  • What is the relationship between variables like service quality, product and price on customer satisfaction for café De Roadies?
  • What are the suitable recommendations for for improving customer satisfaction for Café De Roadies restaurant?

The hypotheses of the research are:

H1: Relationship between service quality and customer satisfaction

H2: Relationship between price and customer satisfaction

H3: Relationship between product quality and customer satisfaction

H4: Relationship between price, quality of product and service quality and customer satisfaction

Factors that drive customer satisfaction, including price, service quality, and product

Conducting this research will help in mitigating the problem for café De Roadies for Café De Roadies in terms of customer satisfaction. The various stakeholders of this research will help in enhancing the performance of the small scale restaurant thereby, resolving the problem in terms of customer dissatisfaction. In addition to, this research is also significant, as the study will help in determining and assessing the relationships between the variables service quality, price and product that influences customer satisfaction largely (Gu & Ye, 2014).

The entire layout of the dissertation is categorized into five principle chapters namely introduction, literature review, research methodology, data analysis, conclusion and recommendations. Each chapter is connected to each other that provides an opportunity to link the research aim with the conclusion followed by providing suitable suggestions to the identified gap thereby, ensuring successful completion of the research.

Thus, in this chapter it can be summarized that customer satisfaction is of utmost significance for any business organization in this sector to survive. Considering the distinctive nature of each of the customers, the reason of dissatisfaction might vary between variables such as service quality, price and product. For a small-scale restaurant like Café De Roadies, the restaurant is facing issues in terms of the aforementioned variables of satisfaction resulting in loss of business, sales and loyal customer base. 

Overview

This chapter discusses in detail both the dependent and independent variables of this study thereby, understanding the concept of customer satisfaction and the relationship of the different variables with customer satisfaction. In order to gain in-depth understanding this section also mentions the different customer satisfaction theories and models followed by justifying the importance of it in determining the success of a business and the challenges faced by the business organization in achieving it in relation to a popular restaurant named Café De Roadies in Papatoetoe in Auckland, New Zealand.

Figure 1: Conceptual framework

(Source: Created by Author)

Customer satisfaction is one of the significant aspects that determine the success of the business organizations and is defined variedly by different authors. As commented by Hill and Alexander (2017), customer service is defined as the indicator that measures how the services and products of a business organization meet or surpass the expectation of the customers. However, as argued by Saeidi et al. (2015), customer satisfaction is defined as the percentage or total number of customers a business organization have. The majority of the business organizations for determining the consumer purchase intention and loyalty use customer satisfaction as a leading indicator. The business organizations designate customer satisfaction by CSAT. All the individuals have a basic level of expectation from the business organizations they are associated with in terms of their product and service. The customers are drawn to the business organization that tends to fulfill their expectation in terms of the service and product (Hill & Brierley, 2017). Thus, it is important to meet up with the expectation and need of the customers for Café De Roadies in order to ensure customer satisfaction.

Objective of the research and research questions

Successful customer satisfaction is driven by different factors such as price, service quality and product. Each of the factors has a significant impact on ensuring customer satisfaction successfully by the business organizations.

Price is one of the key elements in achieving customer satisfaction, as the customers consider the price of the product or the service for determining the standard the business organizations are serving to the customers. As commented by Keiningham et al. (2014), the price of a product can make or break the standard of the product in the eye of the target customers. It is said that the charges of the services or product have a direct impact on the customers thereby, considering price as one of the vital components in ensuring customer satisfaction. However, as argued by Kaura, Durga Prasad and Sharma (2015), having a higher price set for the product or service does not always ensure customer satisfaction. At certain instances, a service or product with minimal price makes the customers highly satisfied rather than the service and product that are priced highly. In the case of Café De Roadies, the restaurant is failing to attract the customers in terms of the price set by them for their foods and services provided in the restaurant.

The service quality is another significant factor that determines the satisfaction of the customers. As commented by Hussain, Al Nasser & Hussain (2015), service quality is defined as an achievement in the area of customer service and reflects each service that is provided to the customers. The expectation and demand vary from customer-to-customer. Thus, it is important for the business organization to develop and maintain a basic standard that is expected from all the customers followed by considering individual expectation of the customers upon using the product or service. Different factors such as welcoming approach, communication, layout, physical appearance and nature of the product or service that determines the quality of the services and product provided to the customers. However, as criticized by Keiningham et al. (2014), responsiveness is the most significant factor that determines the efficiency of service quality in restaurant business. Responsiveness in restaurant business highlights the spontaneity and promptness the restaurant shows while service to the customers. The customers expect to be attended the moment they enter the restaurant followed by paying attention to them and promptly solving their problems and complaints. Responsiveness in the restaurant business highlights ensuring both quality and speed of service during the busy times, provision of prompt service as well as putting in extra effort in handling special requests. This makes the customers feel valued and significant for the restaurant and influence them to enjoy the service in the future. In this case, Café De Roadies is failing to maintain responsiveness within their restaurant that is affecting the service quality negatively.

Hypotheses of the research

As mentioned by Orel and Kara (2014), communication with the customers is another major factor that determines the service quality, as this creates an impression on the customers. For café De Roadies, the restaurant is failing to provide standard service quality to the customers upon their visit to the restaurant in terms of first impression, communication, layout and the dishes served in the restaurant.

Product is the most important factor that determines the level of satisfaction among the customers. As commented by Dominici and Palumbo (2013), it is the product or service that the business organization launches attracts the customers. Thus, it is necessary for the business organizations to understand and analyze the current need and expectation of the customers and develop and modify the products and services accordingly. However, as argued by (Li, Liu and Li (2014), apart from the product, it is the offers and discounts provided by the business organization that tends to attract the customers. At certain instances, the additional offers such as complementary drinks or snacks tend to attract more customers rather than the restaurants that offer basic services. In the case of Café De Roadies, the restaurant is failing to maintain the standard, taste and presentation of their food to the customers resulting in customer dissatisfaction.

Theories of customer satisfaction are discussed in the section below in order to gather in-depth knowledge about the concept and impact of customer satisfaction for the business organizations. The two theories discussed below are disconfirmation paradigm and expectancy-value theory.

According to the disconfirmation paradigm, the customers tend to compare any service they avail with the standard they develop individually. As mentioned by Isac and Rusu (2014), according to this theory, the belief of the customer is compared on how exceptionally it matches to the set standard. Thus, this theory assumes that the purchasing decision of the customers is influenced by their intentions, expectations and attitudes. This is followed by the development of a perception in accordance with their already existing standard by the customers that results in satisfaction or dissatisfaction.

This paradigm comprises of four components namely expectation, perceived performance, disconfirmation and satisfaction (N. Torres & Kline, 2013). Pre-consumption experience highlights the expectation level of the customers followed by the service perception of the customers, that is, the performance. Due to disconfirmation, difference between the performance and the expectation of the customers takes place. Lastly, the different attributes of the product or the service results in the ultimate customer satisfaction level. However, as criticized by Li, Liu and Li (2014), this theory is related to the direction and size of the disconfirmation experience that takes place by comparing expectation against service performance. For this theory, it can be understood that Café De Roadies is failing to meet up the expectation of the customers against their service performance.

Structure of the research report

The expectancy-value theory is another widely studied theory of customer satisfaction that highlights that the customers at times make judgments about the product or service as well as the benefits it offers. This judgment about the product or the services propels the customers to use it eventually. As commented by Magidson et al. (2014), it is said that positive outcome occurs when the customers learn to perform behavior according to their expectation. Thus, the entire attitude is defined as the function that the customers belief about the product or service. However, as argued by Amin et al. (2013), this theory fails to establish a direct relationship between customer satisfaction and actual purchase.

The overall relationship is summarized as following:

Q = Ii (Pi -Ei) in which Q represents the overall quality of the product or the service; I represents the significance of the service attribute, P represents the perception and E represents the expectation the customer expects from the product or the service they are availing (Flake et al. 2015).

In the case of Café De Roadies, it can be said that the restaurant is failing to meet all the factors explained above, that is, overall quality of the restaurant, service attribute, perception and expectation of the customers thereby, resulting in customer dissatisfaction.

Customer satisfaction is highly influenced by service quality that is measured by SERVQUAL model has has been discussed above. As mentioned by Khan and Fasih (2014), the service quality is measured by the customers is respect to tangibles, empathy, assurance, reliability and responsiveness. For Café De Roadies, both responsiveness and reliability are consistent in comparison to empathy and assurance. When the customer visits a restaurant, they expect their expectations to be fulfilled in terms of food, quality, approach, behavior and layout.

The purchasing power of the customers is highly influenced by the price of the product or service they intend to buy. According to Keiningham et al. (2014), price has the ability to attract or repel customers thereby, making is challenging and beneficial for the business organization. If the customers feel that the set price for the product or service is higher, they would look for an alternative even it suits their expectation and need. In the case of Café De Roadies, the customers feel that the price set on the menu card for the food is higher. This is a reason of customer dissatisfaction for the customers because the restaurant is failing to meet with the service quality expectation of the customers and has set higher price on their menu card.

Challenges faced by small-scale restaurants in New Zealand

For any business organization, product is the key to attract customers. Business organizations spend lot of time researching and analyzing the need and expectation of the customers followed by developing a product with the expected qualities and properties. As mentioned by Low, Lee and Cheng (2013), the eight dimensions of product quality are special features, durability, reliability, perceived quality, aesthetics, performance and service associated with it. Thus, it is crucial for the business organizations maintain the standard and quality of the product that they intend to sell to the customers. For Café De Roadies, the restaurant is failing in maintaining the quality of the food items on the menu thereby, resulting in customer dissatisfaction.

Taking into account the increased competition in today’s business world, having a satisfied customer base is of utmost significance. Customer satisfaction is important because it helps the business organizations to gain competitive advantage. As commented by Wu (2013), competitive advantage due to customer satisfaction allows the business organizations to rely on repeat purchases at lower cost. Competitive strategies for retaining the existing customers are much cheaper than strategies for attracting new customers and 90% business comes from the satisfied customers. It has been seen that dissatisfied customers bring in lot of issues with them such as complaints, delayed payments and taking legal actions.

However, as argued by Hennig-Thurau (2013), apart from repeat purchase, customer satisfaction provides price advantage to the business organizations. Once the customers are satisfied, it is unlikely that they will change the supplier. This is because the customers tend to invest significant amount of expertise, effort and time in looking for and then selecting the right company for them. Thus, it can be said that customer satisfaction is the best type of insulation against corporate crisis and helps the business organizations in survive the competitive market, as they can always count on their return of investment. In this case, Café De Roadies has been unable to satisfy the customers due to which they are facing loss of customers, profits, sales and competition to the others.

In spite of being highly beneficial and important for the business organizations, it is extremely challenging the companies to achieve customer satisfaction. As commented by Torres (2014), one of the major challenges in achieving customer satisfaction is to understand the expectation of the customers. This is due to the constantly changing and diverse expectation of the customers. The business organizations generally select a target population by considering the race, gender, age and generation. However, in spite of similar basic requirements for a particular product, the customers do show distinctive desires while buying a product. However, as criticized by Bowen and Chen McCain (2015), apart from understanding the expectation of the customers, reaching out to the customers is also challenging. For example, it is difficult to understand the emotion of the customers when communicated over the virtual platform. Thus, it can be said that getting the message across is difficult for the business organizations.

Relationship between service quality and customer satisfaction

Another significant challenge in achieving customer satisfaction is maintaining consistency. It is important for the business organization to provide impeccable customer service to all the customers continuously and consistently. As mentioned by Amin, Isa and Fontaine (2013), cumulative experiences from multiple touchpoints results in customer satisfaction rather than single touch points. Thus, having clear policies for delivering impeccable customer service is the best way of achieving consistency and ultimately customer satisfaction. Café De Roadies need to understand the expectation of the customers, reach out to the potential customers and maintain consistency for achieving customer satisfaction.  

Thus, in this section, it can be summarized that customer satisfaction is one of the most significant aspects that determines the success of the business organizations. The three variables product, price and service quality have a direct impact on the satisfaction of the customers, as the customers compare the product, price and service quality of the product or service offered by the business organization with their set standards. The literature review highlights that Café De Roadies are facing issues in terms of the product, price and service quality in their restaurant that is resulting in customer dissatisfaction. As the restaurant is unable to ensure customer satisfaction, Café De Roadies is losing sales, profit and potential customers.

Research philosophy

For this research, positivism philosophy has been used, as quantitative data collection technique has been used for recognizing the factors that ensures customer satisfaction and for this large number of customer perception has to be studied. Also, positivism philosophy is justified because this helped in testing the formulated hypothesis and derives reliable outcomes (Neuman, 2013).

Case study research design is appropriate for the study because the researcher is able to answer the why and how questions. As a result, the researcher has been able to ask the reason of low level of customer satisfaction in Café De Roadies and its impact on the performance of Café De Roadies. Additionally, explanatory type of case study has been used by the researcher for identifying the causes and impacts of customer satisfaction in the selected restaurant in the study (Mackey & Gass, 2015).

As positivism philosophy has been selected, survey research strategy has been implemented. Questionnaire has been distributed to the customers that helped in collecting high quality quantitative data. Primary data collection technique is used by collecting responses from the customers. On the other hand, secondary data collection is also used for incorporating information from the research in terms of factors of customer satisfaction. Also, review of the customers is also collected from internet facility regarding the price, product and service quality of Café De Roadies (Vaioleti, 2016). Demographics is not included in the survey because this study aim towards price, product and service quality for all the customers that visit Café De Roadies regardless of customer characteristics such as race, gender, education, ethnicity, age, occupation, marital status and economic standard. If demographics was included then the researcher would have to breakdown the survey response data into meaningful groups of respondents thereby, making it difficult to analyze customer satisfaction for all the customers visiting the restaurant.  

Relationship between price and customer satisfaction

Convenience sampling has been used for this study as this allowed the researcher to include units of samples on the basis of their accessibility. As a result, the researcher has been able to access the customers easily upon their visit to the restaurant. Out of 100 participants, minimum 33 respondents are required for participating and completing the survey in 3-5 minutes. Researcher has also selected the customers that return without having anything in the Café as samples, as they are crucial for the proposed research. The developed questionnaire has 16 survey items related to price, service quality and product and the options are provided in Likert scale (Silverman, 2016).

For this research, coefficient alpha has been used for measuring the reliability of each factor because this enabled the researcher analyzes the consistency of each of the hypothesis that is formulated in the first chapter. Validity has been used for this research because this allowed interpreting the observations derived from the survey (Bresler & Stake, 2017).

For this research, quantitative data analysis has been used along with Pearson co-relation technique for measuring the relationship between the variables. As a result, the researcher has been able to determine the strength and direction of the linear relationship between the independent and dependent variables. Cronbach’s alpha is also used for calculating the reliability of each of the variable (Bauer, 2014).

Confidentiality has been maintained in this research and the researcher has abided by this ethics by saving all the sensitive and private information of the participants and ensuring that it is not disclosed without their consent (Roberts, 2013).

Correlation Analysis

It is necessary to understand the relationship between the dependent and the independent variables so that the factors affecting customer satisfaction can be understood. The independent variables have been taken as service quality, product quality and price and the dependent variable is customer satisfaction. To understand the relationship, Pearson Correlation test has been conducted and the vales vary from -1 to +1. The least value shows a negative correlation whereas the highest value shows a positive correlation. The result from the analysis has been provided below:

Correlations

ServiceQuality

ProductQuality

Price

OverallSatisfaction

ServiceQuality

Pearson Correlation

1

.807**

-.014

.790**

Sig. (2-tailed)

.000

.907

.000

N

70

70

70

70

ProductQuality

Pearson Correlation

.807**

1

.011

.812**

Sig. (2-tailed)

.000

.927

.000

N

70

70

70

70

Price

Pearson Correlation

-.014

.011

1

-.043

Sig. (2-tailed)

.907

.927

.721

N

70

70

70

70

OverallSatisfaction

Pearson Correlation

.790**

.812**

-.043

1

Sig. (2-tailed)

.000

.000

.721

N

70

70

70

70

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

From the above table it can be seen that there is a strong positive correlation between the variables and its significance can also be seen. The correlation study is conducted so that it can help in understanding the relationship between the variables, which has to be more than 0.7 to be positive and the significance will be at the level of 0.01. Nevertheless, the significant and positive correlations that is present within the variables does not have any indication towards the relationship that needs to be shown through the cause and effect method between the variables. This can only be analysed with the help of regression analysis that has also been discussed.

Relationship between product quality and customer satisfaction

The correlation analysis shows the significance or insignificance between the variables but does not provide any insight for understanding the cause and effect relationship. This can be determined by the regression analysis. The aim of this study is to understand the factors of customer satisfaction that can create an impact on a restaurant called Café De Roadies.

The dependent variable for the study is overall satisfaction.

The independent variables are as follows:

  • Service quality
  • Product quality
  • Price

The result of the regression analysis has been discussed below:

It can be seen from the regression analysis that the value of R square is 0.624, which indicates that nearly 62 percent of the dynamics present in the dependent variable that is overall satisfaction can be explained through the independent variable that is service quality (Refer to Appendix 3).

The regression analysis for this variable has shown that the value of R square has come to 0.659, which states that almost 66 percent of the dependent variable can be explained through this factor (Refer to Appendix 4).

The regression that has been done to study the price variable has shown that the R square value has come to 0.002. This shows that there is only 2 percent chance of the dependent variable to explain the factors for the current study (Refer to Appendix 5).

Model Summary

Model

R

R Square

Adjusted R Square

Std. Error of the Estimate

1

.844a

.713

.700

.56218

a. Predictors: (Constant), Price, ProductQuality, ServiceQuality

ANOVAa

Model

Sum of Squares

df

Mean Square

F

Sig.

1

Regression

51.841

3

17.280

54.677

.000b

Residual

20.859

66

.316

Total

72.700

69

a. Dependent Variable: OverallSatisfaction

b. Predictors: (Constant), Price, ProductQuality, ServiceQuality

Coefficientsa

Model

Unstandardized Coefficients

Standardized Coefficients

t

Sig.

B

Std. Error

Beta

1

(Constant)

.449

.249

1.805

.076

ServiceQuality

.419

.122

.383

3.421

.001

ProductQuality

.493

.110

.504

4.502

.000

Price

-.047

.072

-.044

-.660

.512

a. Dependent Variable: OverallSatisfaction

The regression analysis combining all the independent variables together has shown that the value of R square has come to 0.713. This shows that the overall satisfaction that is the dependent variable can be affected the most by combining the independent variables together.

Service quality

Reliability Statistics

Cronbach's Alpha

Cronbach's Alpha Based on Standardized Items

N of Items

.920

.921

4

The value of Cronbach’s Alpha test has come to 0.920 for the independent variable called service quality. It shows that there is a higher level of consistency with respect to the scale that has been taken for this study.

Item-Total Statistics

Scale Mean if Item Deleted

Scale Variance if Item Deleted

Corrected Item-Total Correlation

Squared Multiple Correlation

Cronbach's Alpha if Item Deleted

Staff was helpful.

6.84

7.729

.756

.584

.917

Service was quick

6.36

6.639

.824

.684

.895

Staff understood customer’s requirements.

6.54

6.542

.883

.787

.873

Server had full information of the menu.

6.66

6.982

.813

.701

.897

The item total statistics shows that the Cronbach’s Alpha would have come to the perfect value if a particular survey question was deleted from the service quality part. The first question of service quality has a value of 0.756 in the corrected item-total correlation, which would have changes the value of Cronbach’s Alpha to some extent. The study would have been conducted in a proper manner if this item would have been deleted from the survey.

Reliability Statistics

Cronbach's Alpha

Cronbach's Alpha Based on Standardized Items

N of Items

.918

.923

4

The result of Cronbach’s Alpha for product quality has come to 0.918, which shows that there is a higher level of consistency for determining the value of overall satisfaction for the current study.

Item-Total Statistics

Scale Mean if Item Deleted

Scale Variance if Item Deleted

Corrected Item-Total Correlation

Squared Multiple Correlation

Cronbach's Alpha if Item Deleted

You served exactly what you have ordered the first time.

6.77

8.990

.886

.788

.869

Error -free order was served.

6.43

9.002

.716

.554

.933

The served food was fresh and tasty.

6.73

9.708

.833

.743

.890

Temperature of served food was perfect.

6.60

9.055

.842

.769

.884

Relationship between price, quality of product and service quality and customer satisfaction

From the item-total statistics, it can be seen that the value of Cronbach’s Alpha could have increased if the second factor in determining product quality could have been removed. The corrected item-total correlation for the second factor is 0.716, which is least effective in determining the product quality and its impact on overall satisfaction for the current study.

Reliability Statistics

Cronbach's Alpha

Cronbach's Alpha Based on Standardized Items

N of Items

.530

.528

3

The value of Cronbach’s Alpha test has come to 0.530, which shows that there is a higher level of internal consistency between the set of scales that are being measured for the variable.

Item-Total Statistics

Scale Mean if Item Deleted

Scale Variance if Item Deleted

Corrected Item-Total Correlation

Squared Multiple Correlation

Cronbach's Alpha if Item Deleted

Price of food items were high.

5.29

2.268

.558

.533

.062

You paid more than your planned or expected expense.

5.12

2.133

.519

.532

.102

Price in restaurant seems appropriate for what you served.

5.19

3.714

.046

.003

.842

The item-total statistics has shown that the value of Cronbach’s Alpha would have increased if the third factor to determine the price variable would have been removed. This is due to the fact that the corrected item-total correlation has a value of 0.046, which would have a slight improvement in the value of Cronbach’s Alpha.

Reliability Statistics

Cronbach's Alpha

Cronbach's Alpha Based on Standardized Items

N of Items

.960

.961

3

The value of Cronbach’s Alpha for the dependent variable that is overall satisfaction has come to 0.960. This shows that there is a very high level of internal consistency between the set of scales that has been taken up to measure this factor.

Item-Total Statistics

Scale Mean if Item Deleted

Scale Variance if Item Deleted

Corrected Item-Total Correlation

Squared Multiple Correlation

Cronbach's Alpha if Item Deleted

Your overall experience of dining was satisfactory.

4.74

4.136

.924

.877

.937

You would like to come again in this restaurant in future.

4.69

3.813

.941

.896

.923

You would recommend this restaurant to your friends.

4.51

3.993

.885

.787

.965

From the item-total statistics table, it can be seen that the third factor in determining the Cronbach’s Alpha test for overall satisfaction would have changed, as the value has come to 0.885, which would have affected the value of the test to a greater extent. The removal of the third factor would have helped in improving the Cronbach’s alpha test to a small extent.

The correlation matrix represents the value in a rectangular array where the correlation coefficient between the variables is used for investigation purposes. The coefficient between itself and the variable is always 1 and it has to be viewed in a diagonal manner. The correlation matrix helps in understanding that any pair of variable having a value less that 0.5 can be dropped from the analysis so that it can help in understanding the effect of each variables

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.906

Bartlett's Test of Sphericity

Approx. Chi-Square

952.030

df

91

Sig.

.000

The KMO test helps in understanding the adequacy that is present in the samples. It has to be closer to 0.5 so that the factor analysis can be conducted in a satisfactory manner. The value of KMO test has come to be 0.906, which shows that the analysis is being conducted in a perfect manner since it has a value above 0.90.

Importance of research in determining the success of a business organization

The Bartlett’s test on the other hand helps in understanding the strength between the variables and its relationship. It also helps in testing the null hypothesis so that it can be accepted or rejected. The Sphericity test of Bartlett has come to 0.000, which is less than the value of 0.05. This shows that the level of significance is less in rejecting the null hypothesis.

Communalities

Initial

Extraction

Staff was helpful.

1.000

.662

Service was quick

1.000

.750

Staff understood customer’s requirements.

1.000

.827

Server had full information of the menu.

1.000

.678

You served exactly what you have ordered the first time.

1.000

.828

Error -free order was served.

1.000

.604

The served food was fresh and tasty.

1.000

.725

Temperature of served food was perfect.

1.000

.740

Price of food items were high.

1.000

.843

You paid more than your planned or expected expense.

1.000

.868

Price in restaurant seems appropriate for what you served.

1.000

.470

Your overall experience of dining was satisfactory.

1.000

.859

You would like to come again in this restaurant in future.

1.000

.842

You would recommend this restaurant to your friends.

1.000

.782

Extraction Method: Principal Component Analysis.

The communality table shows the level of extraction that has been done from each variable so that the test can run properly. The value of communality has to be more than 0.5 so that it can be taken in to consideration for further analysis. For this research study, it can be seen that the highest extraction value is 0.868, which indicates that almost 87 percent of the variable has been accounted while the least value is 0.470, which is less than 0.5 and should be removed from the table for further analysis.

Total Variance Explained

Component

Initial Eigenvalues

Extraction Sums of Squared Loadings

Rotation Sums of Squared Loadingsa

Total

% of Variance

Cumulative %

Total

% of Variance

Cumulative %

Total

1

8.712

62.228

62.228

8.712

62.228

62.228

8.699

2

1.766

12.615

74.843

1.766

12.615

74.843

1.908

3

.737

5.267

80.110

4

.586

4.186

84.296

5

.441

3.149

87.445

6

.372

2.656

90.100

7

.334

2.385

92.485

8

.273

1.946

94.432

9

.220

1.574

96.005

10

.168

1.200

97.205

11

.141

1.007

98.212

12

.124

.882

99.094

13

.078

.560

99.654

14

.048

.346

100.000

Extraction Method: Principal Component Analysis.

a. When components are correlated, sums of squared loadings cannot be added to obtain a total variance.

The Eigenvalue helps in understanding the extracted factors, which needs to have a sum that is equivalent to the factor analysis. The table can be divided in to three parts, which are Initial Eigen values, Extracted Sum of Square Loadings and Rotation of Sums of Squared Loadings. From the above analysis it can be seen that the first factor has a variance of 62.228% and the second factor has 12.615% whereas the rest of the factors are insignificant for the study.

Component Matrixa

Component

1

2

Staff was helpful.

.811

Service was quick

.866

Staff understood customer’s requirements.

.908

Server had full information of the menu.

.823

You served exactly what you have ordered the first time.

.904

.108

Error -free order was served.

.775

The served food was fresh and tasty.

.843

.122

Temperature of served food was perfect.

.857

Price of food items were high.

-.110

.912

You paid more than your planned or expected expense.

-.181

.914

Price in restaurant seems appropriate for what you served.

.654

.207

Your overall experience of dining was satisfactory.

.926

You would like to come again in this restaurant in future.

.917

You would recommend this restaurant to your friends.

.878

-.104

Extraction Method: Principal Component Analysis.

a. 2 components extracted.

The table has been divided in to two components so that it can help in extracting the factors that has been taken up for this current research study. The gaps that are present in the table are due to the fact that the value of extraction will be less than 0.5, which is omitted from the table.

Conclusion and recommendations

Discussion

The values derived from the correlation analysis highlights that the independent variables service quality and product has values more than 0.7 thereby, suggesting a significant impact on customer satisfaction. However, the value of price is less than 0.7 interpreting less impact on customer satisfaction. Thus, it can be interpreted that customer satisfaction has strong association between service quality and product.

For this research regression analysis is done in order to determine the relationship between the independent and the dependent variables. Product, service quality and price are the three independent variables whose relationship is tested with customer satisfaction in this study. Regression analysis is applied to the research in order to accept or reject the hypotheses that are set for the particular research. Like for this research, regression analysis is used to accept or reject H1, H2, H3 and H4. The results of the regression analysis found significant association between product, price and service quality with customer satisfaction, as the values were more than 0.05. hence, it can be said that the independent variables service quality, product and price are have a significant difference and strong association with the dependent variable, that is, customer satisfaction.

The information provided in the literature review also supports the findings of the data analysis. As mentioned by Dominici and Palumbo (2013), the product and its features results in customer satisfaction. The customers prefer to purchase or try out a product if it tends to meet their needs and requirements. Thus, the customers are satisfied if the product offered to them have required features that they want. Similarly, upon visiting the restaurant, qualities such as presentation, temperature, appropriateness and taste helps in achieving customer satisfaction. This is also supported by Low, Lee and Chang (2013) that the eight qualities of product are strongly associated with customer satisfaction. The information by Hussain, Al Nasser & Hussain (2015) mentioned in the literature review states that excelling in the area of customer service in terms of being helpful, being quick and friendly and helpful ensures customer satisfaction. This is also supported by Khan and Fasih (2014) that highlights service quality is measured in respect to tangibles, empathy, assurance, reliability and responsiveness by the customers. Thus, the restaurant has to fulfill the factors of service quality in order to achieve customer satisfaction. As restaurant service is customer centric and the customers are spending both time and money in enjoying the service, it is hard for them to compromise. The employees must make the customers feel valued, significant, warmth and comfortable that helps in achieving customer satisfaction.

The association between price and customer satisfaction is not strong because the value of correlation analysis is less than 0.7. However, the information provided in the literature review states that price is one of the significant factors that ensure customer satisfaction. Keiningham et al. (2014) mentions that price has the ability to attract or rebel customers as well as make the customers feel that the money spent in enjoying the service is worth it if the service fulfill their needs and requirements. However, this finding has been contradicted by Kaura, Durga Prasad and Sharma (2015) that states that high price does not always ensure customer satisfaction. In the case of Café De Roadies, price is hardly affecting the customer satisfaction because they feel the restaurant has appropriate price for the food and does not over-shoot their planned expenses.

The results derived from the regression analysis derive the value 0.713. The value is more than 0.05 that suggests that Hypothesis 4 has been accepted. Thus, it can be that service quality, product and price have an impact on customer satisfaction. The customers are the key pillars that determine the success and profitability of the business organizations. This is supported by Hill and Alexander (2017) in the literature review that states attaining customer satisfaction is important and is highly dependent on the price, service quality and product that is offered. This is because the business organizations sell their products and services to the customers in order to make profit and maximize revenue. The business organizations count on the return on the investment they make for attracting and retaining the customers. In order to do so, it is important for the business organizations to satisfy the target customers by fulfilling their needs in terms of product and service. Information provided in the literature review by authors Keiningham et al. (2014), Orel and Kara (2014), Dominici and Palumbo (2013), Low, Lee and Cheng (2013) and Wu (2013) states that service quality, price and product are crucial in achieving customer satisfaction. In the case of Café De Roadies, lack of customer satisfaction is noticed, as the restaurant is failing up exceeding the expectation of the customers in respect to product, price and service quality. The test results, that is, 0.960 derived from reliability test also suggests very high level of internal consistency between the set of scales that has been taken up to measure the factor. This suggests that all the independent variables service quality, product and price are crucial in attaining customer satisfaction.

Conclusion

From the study it can be concluded that factors such as service quality, product and price are significant factors that determine satisfaction for the customers. From the information provided in the literature review section, it can be said the primary aim of the business organization is to plan and strategize ways of achieving customer satisfaction. In doing so, it is important for the business organization to understand and fulfill the expectations and needs of the customers in terms of price, product and the service that is being provided. The gap identified for this study is the issues in achieving customer satisfaction for Café De Roadies, a small restaurant in Papatoetoe, New Zealand. In spite of gaining popularity since the establishment, the customers are not satisfied with the product, service quality and price that the restaurant is serving. The customers feel that the price set on the menu card is high unreasonably, the quality of the food is not up to the mark and the service quality is unappealing thereby, resulting in customer dissatisfaction.

The results derived from the data analysis suggest significant relationship between service quality, price and product with customer satisfaction. This suggests that the data analysis has accepted the hypothesis set in the first chapter. As a result, it is essential for the business organizations to have to identify the factors within service quality, price and product for achieving customer satisfaction. Out of the three independent factors, for Café De Roadies the customers expect better service quality and product upon their visit on the restaurant. The study proposes suitable recommendations for mitigating the gap in terms of service quality, product and price for Café De Roadies and achieves customer satisfaction successfully.

Linking with objectives

Objective 1: To understand the concept customer satisfaction

This objective is linked with literature review section 2.2 that mentions definition of customer satisfaction by various authors. From all the definitions that is mentioned in this section, it can be said that exceeding the expectation of the customers in terms of service quality, price and product is termed as customer satisfaction. Part D of the survey questionnaire is linked with this objective, as the questions are developed with the aim of determining whether the restaurant are able to provide the customers with what they want in terms service quality, product and price at Café De Roadies.

Objective 2: To analyze critically the various factors of customer satisfaction

This objective is linked with literature review section 2.3 that discusses the different factors such as price, service quality and product in detail and its effect in ensuring customer satisfaction. From the information provided, it can be said that though the expectation of the customers differ from each other but the minimal demand and expectation hardly differs for all customers and is crucial for the  restaurant to achieve it. Part A, B and C of data analysis is linked with this objective that is further broken down into sub-factors for determining the level of customer satisfaction.

Objective 3: To assess the relationship between the different variables such as service quality, product and price on customer satisfaction for Café De Roadies

Objective 3 is linked with literature review section 2.6, 2.7 and 2.8 that explains and justifies in detail the relationship between factors such as service quality, product and price in achieving satisfied customer base. From the information it can be said the factors might differ from customer-to-customer but all the factors are important in achieving customer satisfaction. The questions formulated in part A, B and C are broken down into sub-factors for determining what satisfies the customers.

Objective 4: To provide suitable recommendations for improving customer satisfaction for Café De Roadies restaurant

Objective 4 is linked with literature review section 2.10 that mentions the potential challenges that business organizations face while ensuring customer satisfaction. The information provided confirms that customer satisfaction is a wide topic and is difficult to determine because satisfactory factors differ from customer to customer and for a restaurant service several customers each day, it becomes difficult to understand and fulfill the demand of each customers. The survey questionnaire was developed in Likert scale and the problems in terms of customer satisfaction was identified by considering the disagree option selected by the customers in part A, B, C and D.

Recommendations

Based on the issues identified in terms of customer satisfaction in Café De Roadies, the suitable recommendations are listed below:

Setting the price appropriately

Café De Roadies will have the set the price in the menu in accordance with the economic status of the customers. As visiting the restaurant will not be an economic burden for the customers, they will be satisfied and visit the restaurant often (Wu, 2013). 

Ensuring better quality of food

Considering the customer complaints in terms of food, the restaurant will have to improve the quality of the food in terms of making it more appealing, serving hot food and the quantity of the food served (Sun & Kim, 2013).

Attending the customers promptly

The customers need to be prioritized and given attention upon their visit to the restaurant and for this prompt attention towards them is crucial. The employees need to be on their toes for attending the customers for making them valued and important thereby, ensuring customer satisfaction (Albayrak & Caber, 2015).

Seeking customer opinion and incorporating it

Another method of ensuring customer customer in the restaurant is by asking the customers to provide feedback before leaving. The opinion left by the customer’s needs to be then incorporated within the restaurant service (Jung & Yoon, 2013).

Being an active listener and friendly

If the employees of the restaurant act friendly and show skills of being an active listener, customer satisfaction can be achieved because the customers and the employees will be able to communicate effectively and understand each other’s expectation and need clearly (Li, Ye & Law, 2013).

Future scope of the study

Based on the topic, one of the future scopes of the study is conducting a qualitative analysis for this research. Conducting a qualitative research would allowed in understanding the opinions from the employees as well as the customers in terms of understanding the issues the employees are facing in fulfilling the expectation of the customers. Also, as this study has been conducted in a single location, Café De Roadies, New Zealand, in future study can be conducted by including various locations. Thus, the findings from various locations can be collaborated together in terms of customer satisfaction and deduce a single solution.  

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and should be removed from the table for further analysis.

Structure of the dissertation

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