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AMW 342 SERVICES MARKETING Semester II, Academic Session 2011/2012

Project Paper:

LK Western Food Restaurant Lecturer:

Associate Professor Dr. Azizah Omar

Chuah Wen Xu Tan Yinn Jeng Ma Xiao

By - DREAM 000000 000000 000000

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

ACKNOWLEDGEMENT

First and foremost, we would like to sincerely thank our honourable Associate Professor Dr. Azizah Omar for guiding us and making this project possible. Without the valuable guidance and important advises from her, we can never complete this project. The guidance and assistance from Professor Dr. Azizah Omar allow us to complete this project systematically and also successfully without losing the right track on completing this project as a whole. We would like to sincerely appreciate and thank her patience for bearing with our questions throughout the whole process on completing this project. Thank you, Associate Professor Dr. Azizah Omar.

We would also like to express our gratitude to Mr Lee Hong You; the owner of LK Western Food restaurant for allowing us to conduct the survey as well as having the interview session. This project can never be a success without his permission and cooperation. We sincerely thank his for his cooperation and the knowledge that he taught us throughout the interview session.

We would also like to offer special thanks to all the respondents for offering us unconditional helps in completing the questionnaire which contributed to the success of this project. Besides, we would also like to thank the authority of Hamzah Sendut Library for providing us with sufficient facilities and comfortable environment and atmosphere to complete this research project.

Additionally, we would like to thank all group members who had contributed their efforts and times with the purpose of producing a well-organized assignment. The completion of our project has nurtures us into exploring this subject; AMW342 Services Marketing comprehensively besides strengthening our bonds.

Besides, all members are assigned to an appropriate capacity of task to ensure a well-collaborated group performance. Hereby, all members can learn from each other regarding our respective understanding and knowledge about the management of a business as well as to this subject.

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Table of Contents

Items

Pages 2 3 5 5

Acknowledgement Table of Contents List of Tables List of Figures 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7

3.0 3.1 3.2 3.3

3.4 3.5

Introduction Overview of Restaurant Sub-sector in Malaysia Overview of Research Paper Introduction of LK Western Food Problem Statement Research Objectives Research Questions Significance of Study

6 6 8 10 11 13 14 15

Literature Review Introduction Overview of the Literature SERVQUAL Model SERVPEF Model HOLSERV Theory LODGSERV Theory Theoretical Framework and Model Development 2.7.1 Responsiveness 2.7.2 Assurance 2.7.3 Tangibles 2.7.4 Empathy 2.7.5 Reliability 2.7.6 Customer Satisfaction 2.7.7 Customer Loyalty

16 16 16 16 19 20 20 21 22 22 23 23 24 24 25

Research Methodology Introduction Research Model Research Procedure and Design 3.3.1 Type of Study 3.3.2 Nature of Study 3.3.3 Unit of Analysis 3.3.4 Research Site Population, Sample Size and Sample Technique Scales and Measurement

26 26 26 27 27 27 27 28 28 29

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Items 3.6 3.6.1 3.6.2 3.6.3 3.6.4 3.6.5 3.6.6 3.7 3.8 3.9 3.9.1 3.9.2 3.9.3

Independent Variable Responsiveness Assurance Tangibles Empathy Reliability Customer Satisfaction Questionnaire Design Data Collection Method Statistical Data Analysis Validity and Reliability Descriptive Analysis Regression Analysis

Pages 29 29 29 30 30 30 30 31 32 32 32 32 33

Analysis and Results Introduction Reliability Test Descriptive Test 4.3.1 Frequencies Analysis 4.3.2 Descriptive Statistics of Research Variables Hypothesis Testing 4.4.1 Pearson Correlation Analysis 4.4.2 Hypothesis Result

34 34 34 36 36 39 41 41 44

Discussion and Conclusion Introduction Discussion of findings Implication and recommendations Limitation and suggestions for future research Conclusion

45 45 47 48 71 72

6.0

References

83

7.0

Appendix Appendix A – Cover Letter Appendix B – Questionnaire Appendix C – SPPS Output

75 75 76 80

4.0 4.1 4.2 4.3

4.4

5.0 5.1 5.2 5.3 5.4 5.5

7.1 7.2 7.3

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List of Tables

Table 1.1: Table 2.1: Table 3.1: Table 3.2: Table 4.1: Table 4.2: Table 4.3: Table 4.4: Table 4.5:

Tables

Pages

Contributions Towards Malaysia GDP SERVQUAL Model, Parasuraman, Zeithaml & Berry (1988) Summary of Research Hypotheses Description of Constructs Used in the Questionnaire Reliability coefficients for the major variables Frequencies for Demographic of Respondents Descriptive Statistics of Study Variables Pearson Correlation between Major Variables Hypothesis Results

6 17 27 31 34 36 39 41 44

List of Figures Figures Figure 2.1: Figure 5.1: Figure 5.2: Figure 5.3: Figure 5.4: Figure 5.5: Figure 5.6:

Research Framework Existing Service Blueprint of LK Western Food Restaurant Proposed New Service Blueprint for LK Western Food Restaurant Layout of LK Western Food Restaurant Enhanced Touch-points of LK Western Food Restaurant Process of advertising Process of Website Design

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1.0

Introduction 1.1

Overview of Restaurant Sub-sector in Malaysia

Restaurant is a sub-sector of the services industry that contributes the most to Malaysian Gross Domestic Product. The sub-sector of Restaurant is group together with the wholesale, retail trade as well as accommodation as a unit.

Table below shows the Wholesale, Retail Trade, Accommodation and Restaurants sub-sectors contributions towards Malaysia GDP for year 2006-2010, 2012 and 2015. Table 1.1 Contributions Towards Malaysia GDP ACTUAL SECTOR Wholesale, Retail Trade, Accommodation and Restaurants

ESTIMATE

TARGET

2006 (%)

2007 (%)

2008 (%)

2009 (%)

2010 (%)

2012 (%)

2015 (%)

13.4

14.3

15.0

15.4

15.6

16.3

17.4

Source: Economic Planning Unit and Department of Statistics Malaysia Table shows the market trend of the Wholesale, Retail Trade, Accommodation and Restaurants subsectors are increasing in year 2006 through 2010. The Wholesale, Retail Trade, Accommodation and Restaurants sub-sectors mark a contribution of 13.4% to Malaysia GDP in year 2006 and increases 0.9% in year 2007 reaching 14.3%. In year 2009 the sub-sectors again increases to 15.6% from 15.4% in year 2008. It is found that these sub-sectors are increasing annually and in year 2010; the data in the table above illustrate that the contributions increases again reaching 15.6%. This year, the Wholesale, Retail Trade, Accommodation and Restaurants sub-sectors are expected to expand to 16.3% marking a 21.7% rate of growth over the period of six years. In the future (year 2015), statistics show the target of the contribution of Wholesale, Retail Trade, Accommodation and Restaurants sub-sectors to be 17.4% to Malaysia GDP. The market trend of Wholesale, Retail Trade, Accommodation and Restaurants sub-sectors is escalating in the past, presence and is expected to grow in the future as well. The services industries have taken the centre front on the stage of the economic development. Therefore, as expected the Wholesale, Retail Trade, Accommodation and Restaurants which is one of the dominating sub-sectors of the services industries will at the same time expand in the future as well.

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The restaurants sub-sector is expected to remain encouraging with growth in the future and it is strongly attributed to the increase of tourism related activities that is partly attributable to government efforts to encourage and support the tourism industry through international conventions as well as hosting sports events. Moreover, the increase tourist arrivals in Malaysia together with the establishment of various new hotels as well as the promotions of local delicacies will also allow the restaurants sub-sectors to grow in the future.

Industries in the Food and Beverage Stores (restaurant subsector) usually retail food and beverages merchandise from fixed point-of-sale locations. Establishments in this subsector have special equipment. They have staff trained in the processing of food products to guarantee the proper storage and sanitary conditions required by regulatory authority. Global market forces are driving the continual evolution of the food and beverage industry. Consolidation, changing consumer preferences and behaviours and increasing government regulations are radically impacting business strategy. In this fiercely competitive marketplace, one must offer a greater variety of products as well as excellent services to meet consumer demand and provide total customer experience. At the same time, you must consistently and cost-effectively produce high quality products.

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1.2

Overview of Research Paper

Customer satisfaction and customer loyalty is a measurement of how products and services supplied by a company or organization met customer‟s expectation. Both customer satisfaction and customer loyalty is the key performance indicator for a business. In a competitive market place, businesses compete for customers in terms of quality and also gain their profit through customer satisfaction and loyalty. Customer satisfaction is now the key element of business strategy. This is because customer satisfaction will lead to customer loyalty which in turn determines the success or failure rates of a business.

Customer satisfaction is recognized as an important goal largely because a relationship between customer satisfaction, customer loyalty and long term profitability are interrelated. Generally, customer satisfactions impact on customer retention and loyalty, profits, and growth. Therefore, organization needs to pay significant concentration on managing customer satisfaction.

Customer satisfaction can be experienced, judge and evaluate in terms of products and services. It varies accordingly depending on the individual. It is very much a personal and individualistic assessment that is greatly affected by customer‟s expectation. Satisfaction is usually based on the customer‟s experience; the moment of truth and their personal expectation of the product and services.

The quality of services given by the organization will affect the relationship between customers and the organization. Excellent services should be offered to customers to act as a long term investment for an organization. An organization should understand the needs, wants and desire of its customers in order to provide excellent services that is up to the customer‟s expectation. The improvement of service quality should be done constantly to satisfy the rapidly changing customer‟s preference. With the ferocious competition nowadays, the quality of a service plays an important role in the success and failure rates of an organization. Therefore, retaining customers through total customer experience or excellent services becomes a vital issue to an organization. Hence, this research paper sought to provide valuable information for our group research‟s subject; LK Western Food Restaurant to understand more about the significance of customer satisfaction and to determine which dimensions impact customer‟s satisfaction that results in customer‟s loyalty the

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most. Subsequently, through the findings of our research, we can provide LK Western Food Restaurant with suggestions to improve the quality of its services for customer satisfactions.

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1.3

Introduction of LK Western Food

LK Western Food Restaurant is currently an apprentice in the food and beverages industry in Penang. The cafe was established on early December 2010 and had only operated for approximately one year and six months. The owner of the restaurant, Mr Lee Hong Yau is a 33 years old lady. Apart from being the owner of LK Western Food Restaurant, Mr Lee is also the one who is playing the role as manager of the restaurant.

LK Western Food Restaurant is located at 2-01-11, Halaman Bukit Gambir, 11700 Gelugor, Penang (Plaza Ivory). The time of business operations is 11.00AM in the morning until 1.30AM every day. The number of employees in the restaurant is four individuals. There are a total of eleven tables in the restaurant that can fit up to 45pax at the same time. Basically, LK Western Food Restaurant central product or specialty is western food that includes various types of chicken chops, fish fillets, lamb chops and many more alongside Taiwanese beverages.

In Ivory Plaza, LK Western food restaurant is the only restaurant owned and operated by Malaysian Chinese. There are a total of 18 eateries in Ivory Plaza. Excluding LK Western Food Restaurant there are another two direct competitors that serve western food. Therefore in total, there are three western food restaurant and 15 non-western food restaurants that sells mostly sells Malayâ€&#x;s and Indianâ€&#x;s cuisines in Ivory Plaza.

Hence, LK Western Food Restaurant is facing a strong and fierce

competitions from all the other eateries located in Ivory Plaza.

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1.4

Problem Statement

LK Western Food Restaurant was a newly established restaurant. Due to its current standing, in comparison to other strongly build competitor‟s brand, it is important to be aware of the potential of the restaurant to provide excellent product and service to its customers in order to build competitive advantage over its competitors.

LK Western Food Restaurant is located in a strategic location with high traffic at Ivory Plaza, Penang. However, the location is surrounded by many other competitors. There are 18 other food and beverages outlets in that area. As the food and beverage industry is highly competitive, we conduct this study to find the determinants of customers‟ satisfaction while dining in LK Western Food Restaurant. Responsiveness of the staffs, assurance from the restaurant, tangibility of the restaurant, the provision of empathy and reliability of the restaurant are the ultimate predictors to customers‟ satisfaction in the food and beverage service line. Hence, it is important that a restaurant is able to meet these expectations and standards in order to benefit from customer retention and attracting new customers at the same time.

With the growing interest in dining western food there are more and more different types of western food restaurant available and are established in Malaysia. Each of these restaurants varies in their own way and the customer level of satisfaction differs as well. The problems that we are trying to scrutinize involve understanding the factors that affect customer‟s satisfaction that will lead to customer loyalty. This can be narrow down to a few main questions as follows: We conduct this study to find the determinants of customers‟ satisfaction while dining in LK Western Food Restaurant. Responsiveness of the staffs, assurance from the restaurant, tangibility of the restaurant, the provision of empathy and reliability of the restaurant are the ultimate predictors to customers‟ satisfaction in the food and beverage service line. Hence, it is important that a restaurant is able to meet these expectations and standards in order to benefit from customer retention and attracting new customers at the same time.

1. How the responsiveness of staff has an effect on their loyalty to the restaurant? If customers find the staffs in the restaurant are relatively pleasing will their loyalty to dine in the restaurant increases, decreases or has no effect at all?

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2. How customer‟s assurances of the restaurant influence their loyalty to the restaurant? If customers find that they are not confident with the services provided by the restaurant will they still possess loyalty to the restaurant? 3. Would customer‟s perceived tangibility of the restaurant affect their loyalty to the restaurant? Will customers be affected to dine in the restaurant if the ambiance of the restaurant is comfortable for them? 4. Does empathy play a role in customer‟s loyalty and to the restaurant? What is the effect of a positive perceived sense of empathy towards customer‟s loyalty?

5. How does reliability of the restaurant related to loyalty to the restaurant by the customers? At this point the problem is whether the ability to deliver their promises to customers affects their loyalty later on. 6. How does customer‟s level of satisfaction relate to their loyalty to the restaurant? If customers have a negative level of satisfaction while dining in the restaurant, will it affect their loyalty to the restaurant?

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1.5

Research Objectives

The main objective of this research is to verify the determinant factors that affect customer‟s loyalty to LK Western Food Restaurant. These factors are the independent and mediating variable namely responsiveness, assurance, tangibility, empathy and reliability (independent variables) and customer satisfaction (mediating variable).

The second objective is to gauge the importance of each determinant factor that will affect customer‟s loyalty to LK Western Food Restaurant. Determine whether these factors are significant towards customer loyalty to LK Western Food Restaurant.

The third objective is to identify the most important and prominent factor that influence and affect customer‟s loyalty to LK Western Food Restaurant and at the same time determining which of these variables or factors are not significant to customer‟s loyalty to LK Western Food Restaurant.

The last objective is to build competitive advantage for the restaurant by giving valuable recommendation for improvement on the services of LK Western Food Restaurant through the results of our findings.

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1.6

Research Questions

In order to attain and achieve our research objectives in this study, the following research questions have to be answered:1. What type of determinant or variable will affect customer‟s loyalty to LK Western Food Restaurant?

2. Does the independent variables (responsiveness of staff, reliability, assurance, tangibility, empathy and responsiveness) and mediating variable (customer‟s satisfaction) have a positive relationship with customer‟s loyalty to the restaurant which is the dependent variables? 3. Which of the variables is significant to customer‟s loyalty to LK Western Food Restaurant?

4. How to improve the services quality of LK Western Food Restaurant?

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1.7

Significance of Study

The study is carried out and is significant to academicians and business‟s managers in several ways. 1. By using the five dimensions as component of service quality that influences customer‟s satisfaction dining in LK Western Food Restaurant, the study can identify customer‟s perception about the performance in each of the services dimensions namely; responsiveness of staff, reliability, assurance, tangibility, empathy and responsiveness restaurant. 2. The findings of this study can be used by LK Western Food Restaurant‟s management to create awareness and be alert of the significant dimensions that impact customer‟s satisfaction and loyalty. By focusing on the core determinant of customer‟s loyalty towards LK Western Food Restaurant, the services can be improved to meet customer expectation which will increase customer satisfaction and loyalty.

3. In addition, the result obtained from this study can be used as a benchmark and consideration for LK Western Food Restaurant and other food and beverages outlets in order to improve their employee‟s performance and increase customer satisfaction by fulfilling customer‟s expectation.

4. The data and information is very useful for the existing food and beverage outlets and also those who wish to engage in business activities that is in the same industry. Our data allows them to gain knowledge on the preference and factors that are deemed to be crucial by most customers before dining in a restaurant which will subsequently, contributes to their satisfaction and loyalty towards a restaurant. Understanding such vital elements allows them to maximise those factors in order to attract more customers. As the market is significantly large, being able to grab hold of such a huge population will render them success in their business.

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2.0

Literature Review 2.1

Introduction

For this chapter, we will be doing a literature review which is a description of the literature relevant to our research topic. A critical literature review is a critical assessment of the relevant literature. It shows how prevailing ideas fit into our own thesis, and how our thesis agrees or differs from them. In this chapter, we will discuss the SERVQUAL Model, SERVPEF Model in order to provide a clear idea about the research.

2.2

Overview of the Literature

Several literatures were reviewed on the SERVQUAL and maintained many variables in the model. The purpose of the literature is to understand the main determinants of SERVQUAL model which are food quality, responsiveness, assurance, tangibles, empathy, reliability, customer satisfaction, customer loyalty and recommendation / referrals. In addition, we also would like to study SERVPEF Model, HOSERV Theory and LODGSERV Theory. In fact, all these information we give will be used to suggest a good method to improve customer loyalty for services in LK Western Food. More literatures have been reviewed to construct the theoretical model to understand research findings on SERVQUAL model.

2.3

SERVQUAL Model

SERVQUAL is a service delivery quality framework. It was developed by Zeithaml, Parasuraman and Berry in 1985. The basic service quality model identified by ZPB originally included ten key determinants of service quality as perceived: reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding or knowing the customer and tangibles. It measures the gap between customer expectation and experience. SERVQUAL model is the most common method for measuring service quality.

PZB (1985) assert that their framework can be used for identifying differences in the quality of goods and services by distinguishing between the properties of a good or service. They note that Nelson (1974) DEFINED “search properties” as properties that can be determined before purchasing ( such as credibility and tangibles), and “experience properties” as properties that can be determined

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only after purchase or consumption. PZB (1988) assert that the SERVQUAL scale deals with perceived quality and looks specifically at service quality, not customer satisfaction. They state that “perceived service quality is a global judgment or attitude concerning the superiority of service whereas satisfaction is related to a specific transaction.

There are also a number of models described in the literature that conceptualize the construct of service quality (Bienstock 1997, Dabholkar 1996, Parasuranman 1988). The models of service quality described in the literature, such as SERVQUAL, can be used in various contexts, but they do not usually provide for managerial evaluation of the interactive nature of service quality in service encounters.

Inherent in the SERVQUAL scale (PZB 1988), the conceptualization and measurement of the service quality construct are multidimensional. The SERVQUAL scale is based on a difference score between customer expectations of service and their perceptions after receiving the service. Initially PZB (1985) focused on the ten determinants of service quality. However, after two stages of scale purification, they reduced the ten determinants to five dimensions of service quality: tangibles, reliability, responsiveness, assurance, and empathy (PZB 1988).

Table 2.1 SERVQUAL Model, Parasuraman, Zeithaml & Berry (1988)

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1. Tangibles: appearance of physical facilities, equipment, personnel, and communication materials. 2. Reliability: ability to perform the promised service dependably and accurately. 3. Responsiveness: willingness to help customers and provide prompt service. 4. Assurance-knowledge and courtesy of employees and their ability to convey trust and confidence. 5. Empathy: the firm provides care and individualized attention to its customers.

Service quality in a service encounter is recognized as being dependent upon the interactive process between the service provider (the seller) and the service receiver (the buyer) (Brown 1994, Czepiel 1990, Echeverri 1999). This interactive process has been described as a “theatre”, a “show”, or a “performance”.

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2.4

SERVPEF Model

The SERVPERF Model was carved out of SERVQUAL by Cronin and Taylor in 1992. SERVPERF measures service quality by using the perceptions of customers. The perceived quality model postulates that an individualâ€&#x;s perception of the quality is only a function of its performance. Cronin and Taylor (1992) proposed the SERVPERF instrument, which is a more concise performance-based scale; an alternative to the SERVQUAL model. In addition, they compared the weighted SERVQUAL and the weight SERVPERF models. Those weighted versions consider the importance of a quality attribute as a determinant of perceived quality.

Cronin and Taylor argued that only perception was sufficient for measuring service quality and advocates of SERVPERF hold the view that it is a better alternative to SERVQUAL. However, SERVPERF has suffered a setback. According to Gilmore and McMullan (2009), Taylor and Croninâ€&#x;s examined the psychometric properties of the SERVPERF scale and the results of a multiindustry study in 1994 suggested that SERVPERF lacks consistency and a generalized factors structure. SERVQUAL measures the quality of a service via the difference between the perceptions and expectations of customers, SERVPERF only uses perceptions. SERVPERF adopts the five dimensions of SERVQUAL in measuring service quality.

The SERVPERF Model claims that to find the performance of a firm ( its service quality) all that is required is to collect data by directly asking the customer through a simple survey and a questionnaire. SERVPERF measures actual performance based on customer satisfaction.

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2.5

HOLSERV Theory

Mei et al. (1999) examined the dimensions of service quality in the hotel industry in Australia. They used the SERVQUAL instrument as a foundation and developed a new scale called HOLSERV scale, a new instrument to measure service quality. Amstrong et al. (1997) use a SERVQUAL to examine the impact of expectations on service quality perceptions in Hong Kongâ€&#x;s hotel industry. They examine the dimensions of service quality and determine the best predictable dimension of overall service quality in hospitality industry by applying a modified version of SERVQUAL (Parasuraman et al., 1988). They develop the HOLSERV scale to measure service quality in the hospitability industry. They distinguish revised SERVQUAL (Parasuraman e al., 1991) and customized version of SERVQUAL for this study. They name it as HOLSERV.

2.6

LODGSERV Theory

Knutson, Stevens, Wullaert, Patton and Yokoyama (1990:227-284) used SERVQUAL as a foundation to develop LODGSERV, an instrument designed to measure service quality in the lodging industry. Patton, Stevens and Knutson (1994:39-55) translated LODGSERV into Japanese and Chinese and administered the instrument in Japan, Taiwan, Hong Kong, Australia and the UK. Their findings reflected that LODGSERV retains its reliability when administered in countries outside the USA.

Knutson et al. (1990) adapted SERVQUAL and developed draft of LODGSERV to define and measure service quality for the lodging industry. The final version of LODGSERV includes 26 items and five dimensions, the same with SERVQUAL. They compare use of exploratory and confirmatory factor analysis in index testing and refinement. Getty and Getty (2003: 94) developed another specific application for the lodge industry in the USA, as a derivative of SERVQUAL, named Lodging Quality Index (LQI), which developed five lodge-specific dimensions, namely tangibility, reliability, responsiveness, confidence and communication from the original SERVQUAL to assess customersâ€&#x; perceptions of quality delivery. These dimensions reflect the unique nature of the lodging industry more effectively than SERVQUAL.

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2.7

Theoretical Framework and Model Development

Figure 2.1 Research Framework

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2.7.1

Responsiveness

Responsiveness defined as willingness to help customers and provide prompt service (Parasuraman, et al., 1988). This dimension emphasizes attentiveness and promptness in dealing with customer requests, questions, complaints, and problems. Customers are likely to consider specific aspects of transaction such as product features (food quality and restaurant ambience), service features (responsiveness of server), as well as price to be satisfied with the overall restaurant experience. Tea (1993) suggested a transaction-specific model and later expanded by Parasuraman, Zeithaml and Berry (1994). They further state that the results suggested that the model satisfactorily explains customer satisfaction and full service restaurant owners should focus on service quality (responsiveness), price and food quality (reliability). LK western food must view the process of service delivery and the handling of requests from the customer‟s point of view rather than from LK western food itself point of view. On the other hand, good responsiveness for customers will positively influence customer loyalty in LK Western Food. Hypothesis 1: Responsiveness of staff has a positive relationship with Customer’s loyalty.

2.7.2

Assurance

Assurance is defined as knowledge and courtesy of employees and their ability to convey trust and confidence (Parasuraman, et al., 1988). This dimension is likely to be particularly important for services that customers perceive as high risk or for services of which they feel uncertain about their ability to evaluate customer. Trust and confidence may be embodied in the person who links the customer to the company, such as the service staff in LK western food. Customer satisfaction is significantly taken into account as assurance for customer loyalty. Relationship satisfaction is the customer‟s positive feeling that comes from the customer‟s evaluation of the buyer-seller relationship (Geyskens, Steenkamp and Kumar, 1999). In other words, when employees can perform the service politely and convey confidence to make a trust between them and customers in LK Western Food, customer satisfaction will increase, customer loyalty can be improved. Hypothesis 2: Assurance has a positive relationship with Customer’s loyalty.

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2.7.3

Tangibles

Tangibles are defined as the appearance of physical facilities, equipment, personnel, and communication materials (Parasuraman, et al., 1988). It provides physical representations or images of the service that customers, particularly new customers, will use to evaluate quality. The physical evidence of LK Western Food includes the structure of the LK‟s café, menu, and appearance of its employees, decoration, kitchen, employee‟s uniform, environment and washing room. Those can influence customer satisfaction, such as environment, clean and comfortable environment can positively influence customer‟s mood and satisfaction. Customer satisfaction was directly and positively associated with aspects of positive approach behaviors, such as customer loyalty. Hypothesis 3: Tangibles has a positive relationship with Customer’s loyalty.

2.7.4

Empathy

Empathy is that the firm provides care and individualized attention to its customers (Parasuraman, et al., 1988). Empathy and trust are a platform for effective understanding, communication and relationships. Empathy is essential for handing complaints and retaining customers. Empathy includes special needs to allow the customers with limited budgets to also enjoy the facilities. The more the service provider can see things from the customer‟s point of view, the better. The core concept of empathy is to understand the needs of customers and provide individual attention. Odujobi (2010), Andaleeb & Conway (2006), Sunson & Lumyong (2009), Awan and Gill (2008) investigated that empathy and customer satisfaction are positively correlated with each other. If LK Western Food gives its customers more attention and care, and is conveying the essence of empathy through personalized or customized service to make customer needs understood, its customers would likely to be satisfied. It also positively influences the customer loyalty. Hypothesis 4: Empathy has a positive relationship with Customer’s loyalty.

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2.7.5

Reliability

Reliability is the ability to perform the promised service dependably and accurately (Parasuraman, et al., 1988). Reliability means that the company delivers on its promises-promises about delivery, service provision, problem resolution, and pricing. A company‟s reputation is much closed related to the reliability of their products and services. The more reliable a product / service is, the more likely the company is to have a favorable reputation. While a reliable product may not dramatically affect customer satisfaction in a positive manner, an unreliable product will negatively affect customer satisfaction severely. Thus high reliability is a mandatory requirement for customer satisfaction. If LK Western Food can perform their promised service (such as the statement of menu and advertisement) dependably and accurately, its customers will be satisfied with its service, it would likely to get good reputation, customer loyalty also can be improved. Hypothesis 5: Reliability has a positive relationship with Customer’s loyalty.

2.7.6

Customer Satisfaction

Numerous researchers have verified the significant relationship between customer satisfaction and customer loyalty. Getty and Thompson (1994) examined the roles of service quality and satisfaction in explaining behavioral intention. Their findings indicated that high level of satisfaction increases customers‟ intentions to repurchase and recommend the product. The results of their study showed that guests‟ intention to revisit is a positive function of satisfaction. According to Petrick (1999), “the more loyal a consumer is to a service, the more likely they will be satisfied with the service and the more likely they will repurchase the service”. It means that when customers are satisfied with the service quality and food quality in LK Western Food, it will positively influence customer loyalty, customer are more likely to come again. Hypothesis 6: Customer satisfaction has a positive relationship with Customer’s loyalty.

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2.7.7

Customer Loyalty

Hill (1996; 6) defines customer loyalty as a behavior that is intended to purchase based on the routine decision-making units. Loyalty is more aimed at non-random behavior shown by the purchase routine. The characteristics of loyal customers are:-

(1) Undertake regular re-purchase, (2) Buying outside the line of products / services available, (3) To recommend the products / services to others, (4) Showing no resistance so the power attraction similar products from competitors (Griffin, 1995:31).

The loyalty of customer is showed by giving recommendation to other customers and keeping the consumption of the product continuously. The customer loyalty also means that the company is providing customers services promised consistently and correctly, customers are more likely to have positive perceptions of the company and give more positive suggestions. When customers are loyal to LK Western Food, they would likely to increase their visits to it and give positive evaluation, and even recommend it to others.

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3.0

Research Methodology 3.1

Introduction

This chapter is one of the most important parts of the research study. Accordingly, this chapter will displayed with some parts, such as research design, research framework and hypotheses, sampling design, data collection procedures, questionnaire pre-test, and data analysis procedures.

3.2

Research Model

The research model is mainly based on the literature review. According to previous work, the constructs are integrated in the research model (refer Figure 3.1). The model guides development of the researchâ€&#x;s hypotheses, which examine the interrelationships among research constructs. The following subsection is the research model.

Figure 2.1 – Research Model

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

Table 3.1 Summary of Research Hypotheses

Hypothesis H1

Describe Hypothesis Responsiveness of Staff has a positive relationship with Customer‟s Loyalty

H2

Assurance has a positive relationship with Customer‟s Loyalty

H3

Tangibles has a positive relationship with Customer‟s Loyalty

H4

Empathy has a positive relationship with Customer‟s Loyalty

H5

Reliability has a positive relationship with Customer‟s Loyalty Customer Satisfaction has a positive relationship with Customer‟s Loyalty

H6

3.3

Research Procedure and Design 3.3.1

Type of Study

This is a correlation study. This study was conducted among the customers and their satisfaction while dining in LK Western Food restaurant in their daily lives. Hypotheses was undertaken to explain the variance in the in the independent variables to predict the relationship among the customer satisfaction and leading to customer loyalty and finally recommendation. From the correlation study, we are going to determine whether the study is a positive correlation or negative correlation or no correlation.

3.3.2

Nature of Study

This study was conducted under natural environment. The variables are neither controlled nor manipulated. This is a cross sectional study which are carried out once in short time. We managed to gather all the data within one week. All the data were collected from the customers of LK Western Food Restaurant.

3.3.3

Unit of Analysis

The unit of analysis is individuals for this study are customers of LK Western Food.

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3.3.4

Research Site

The research sites for this study are individuals who dine in LK Western Food.

3.4

Population, Sample Size and Sample Technique

The population is the customers of LK Western Food. We had distributed 40 sets of questionnaire form randomly to LK Western Foodâ€&#x;s customer as our sample of research. All the questionnaire forms have been successfully collect back for analysis. The respondents of our research were ALL customers from LK Western Food that we use convenience sampling. The respondents are basically consists of Chinese and other race.

Before we distributed the form for those respondents, we explained the purpose of the survey to the respondent. After getting their agreement and the willingness to assist us, we only will distribute the questionnaire form. After collecting the form, we check the form again to confirm discrepancy of the data collected.

Besides, we also conducted online survey. The reasons why we choose online survey is because the respondents tends to answer the open-ended questions with protect their privacy. They might felt that the fill the comments in the printed questionnaire might not confident and not safe.

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3.5

Scales and Measurement

Our questionnaire form was divided into 12 sections. The interval scale of measurement was applied in section 1 to section 11. For section 1 to section 11, the respondents are required to read the questions and state agreement based on the scales that we have set. The answer is basically based on knowledge without right or wrong. The measures were estimated on 5-point scale and the ratings are as:-

1

Strongly Disagree

2

3

4

5

Disagree

Neutral

Agree

Strongly Agree

All instruments were adopted from various literatures and were modified for the purpose of understanding the customer satisfaction in dining at LK Western Food Restaurant.

3.6

Independent Variable

The independent variable is defined as the presumed cause of some changes in the dependent variable (Robbins, 1998).

3.6.1

Responsiveness

Responsiveness was measured on the five items using 5-point scale ranging from strongly disagree (1) to strongly agree (5). Items were derived from (Parasuraman, Zeithaml, and Berry, 1988). One of the examples for this type of question is “The staffs greet me as soon as I enter the restaurant”.

3.6.2

Assurance

Assurance was measured on the five items using 5-point scale ranging from strongly disagree (1) to strongly agree (5). Items were derived from (Parasuraman, Zeithaml, and Berry, 1988). One of the examples for this type of question is “The staffs are respectful towards customers”.

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

3.6.3

Tangibles

Tangibles was measured on the five items using 5-point scale ranging from strongly disagree (1) to strongly agree (5). Items were derived from (Parasuraman, Zeithaml, and Berry, 1988). One of the examples for this type of question is “Appropriate and attractive ambiance of the restaurant”.

3.6.4

Empathy

Empathy was measured on the five items using 5-point scale ranging from strongly disagree (1) to strongly agree (5). Items were derived from (Parasuraman, Zeithaml, and Berry, 1988). One of the examples for this type of question is “Sympathetic handling of customer‟s complaints”.

3.6.5

Reliability

Reliability was measured on the five items using 5-point scale ranging from strongly disagree (1) to strongly agree (5). Items were derived from (Parasuraman, Zeithaml, and Berry, 1988). One of the examples for this type of question is “Service is delivered as promised”.

3.6.6

Customer Satisfaction

Customer Satisfaction was measured on the five items using 5-point scale ranging from strongly disagree (1) to strongly agree (5). Items were derived from (WestBrook and Oliver, 1991). One of the examples for this type of question is “I am satisfied with the quality of the food in terms of taste, appearance and taste, etc”.

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3.7

Questionnaire Design

The questionnaire of this research is designed to measure the customer loyalty in LK Western Food Restaurant which located at Ivory Plaza, Bukit Gambil. The questionnaire used 7 constructs to measure the customer loyalty. Figure shows the description of constructs used in the questionnaire. The questionnaire consists of 31 structured questions. The questionnaire also has classification questions. Besides, the purpose of the research was included in the questionnaire because there is no need for deception. This survey will not cause respondents to have any bias before the survey or experiment and there is no need to protect the confidentiality of the research sponsor as it would not improve or impair the reliability and validity of the survey.

Table 3.2 Description of Constructs Used in the Questionnaire

Variable

Constructs Responsiveness of Staff

Items

Assurance

4

Tangibles

5

Empathy

4

Reliability

4

Customer's Satisfaction

4

WestBrook and Oliver (1991)

Customer Loyalty

4

Kaj Storbacka, Tore Strandvik, and Christian Gronroos (1994)

6

Independent

Dependent

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Adapted from Zeithaml, Parasuraman & (1988) Zeithaml, Parasuraman & (1988) Zeithaml, Parasuraman & (1988) Zeithaml, Parasuraman & (1988) Zeithaml, Parasuraman & (1988)

Berry Berry Berry Berry Berry


AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

3.8

Data Collection Method

Data for this study was collected through structured questionnaires. The questionnaire were distributed randomly to the customers who patronage the LK Western Food restaurant after they have finished dining so they make an evaluation of the service.

3.9

Statistical Data Analysis

The data gathered through questionnaire was subsequently coded and analyzed using the computerized Statistical Software Package for Social Sciences (SPSS) software version 16.0. They were summarized using appropriate descriptive and inferential statistics.

3.9.1

Validity and Reliability

Validity and reliability analysis is important to deal with any measurements error on all information gathered. So, reliability test is significant for us to know the degree of goodness of our information. In our research, dependent, mediating and independent variables are analyzed by using reliability test. This is done to ensure that all variables are analyzed correctly and make sure those respondents had clearly understands our questionnaire. This ensures that the sample obtained is good. Cronbachâ€&#x;s alpha was used to measure internal consistency reliability.

3.9.2

Descriptive Analysis

Descriptive analysis refers to the transformation of the raw data into a form that will make them easy to understand and interpret. Descriptive analysis are conducted in order to facilitate us in seeing the relationship as well as allowing us to make comparisons through the construction of tables and graphs. In our project paper, descriptive analysis involves computing percentages and frequencies of relevant factors. Nevertheless, the mean and standard deviation of all major variables are also evaluated.

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3.9.3

Regression Analysis

Regression analysis refers to techniques for modeling and analyzing the relationship between dependent variable and one or more independent variable(s). it helps in understanding the changes in dependent variable when one of the independent variables is varied while the others are held constant. Basically it means that all independent variables are assumed to be uncorrelated with each other.

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4.0

Analysis and Results 4.1

Introduction

The data obtained through the techniques explained in the previous segment will then be analysed. Analyses are conducted with the aid from SPSS software and the results are interpreted and discussed in this section. We started by conducting reliability test to weigh the consistency and the dependability of the information generated from the distribution of questionnaires. Next, descriptive analyses were performed to provide us with a more distinctive set of data. We then proceed with a step-by-step analysis on the independent variables and dependent variable. The relationship between these features are examined and linked to the hypotheses testing procedures. Pearson correlation analysis was performed next, to test the connection between the independent variables with the dependent variable.

4.2

Reliability Test

Before conducting test through the primary data obtained, we had conducted reliability test on all the information gathered. We had employed the Cronbach‟s Alpha (α) which is a widely-used genre of reliability measure. As defined in Wikipedia, „Cronbach‟s Alpha is commonly used as a measure of the internal consistency or reliability of a psychometric test score for a sample of examinees. Hereby, the test is conducted to ensure that the data used in our studies are consistent. This reduces the level of analyzing contradictory or inaccurate data.

The table below shows the results generated from the reliability test:

Table 4.1: Reliability coefficients for the major variables Variable

Number of items

Items dropped

Cronbach's Alpha

Responsiveness(RES)

6

-

0.860

Assurance (ASS)

4

-

0.828

Tangibility (TAN)

5

-

0.888

Empathy (EMP)

4

-

0.845

Reliability(REL)

4

-

0.887

Customer Satisfaction (CS)

4

-

0.822

Customer Loyalty (CL)

4

-

0.866

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The alpha can assumed any range of value below 1. However, it is important to note that only positive values are logical. The generally accepted rule of thumb is deemed to be 0.700, whereby the data are consistent. Many professionals only use data with an alpha of 0.700 or higher especially when the population is large. Therefore, we had set 0.700 as the minimum measure of an acceptable alpha.

Reliability test was conducted on all major variables of our research. The major variables includes dependent variable (Customer Loyalty), mediating variable (Customer Satisfaction) as well as independent variables (Responsiveness, Assurance, Tangibility, Empathy and Reliability)

As we can see from the table above, all data exceeded the borderline alpha value of 0.700 with the lowest being 0.822 generated in the items tested for customer satisfaction towards LK Western Food Restaurant. Despite being the lowest value of alpha in comparison to all the other major variables, the alpha value of customer satisfaction is relatively consistent and reliable. It still exceeds the acceptable value of aloha at 0.700 by 0.122. The highest value is 0.888, which indicates high internal consistency or reliability in the alpha of tangibility in LK Western Food Restaurant. The strong consistency is highly attributed to the close association between the five questions asked to identify (customersâ€&#x;) respondentsâ€&#x; loyalty towards LK Western Food Restaurant. The Cronbachâ€&#x;s alpha values for all the variables is more than 0.700, hence no items are dropped to increase the reliability score of this scale. In short, we can conclude that all the data obtained and tested are of relatively high internal consistency as all variables relatively have high value of alpha. This will facilitate us in investigating the relationship of all variables in the research as there is only a low level of data irregularity.

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4.3

Descriptive Test

Descriptive analysis is conducted in order to assist us in seeing the relationships of respondent‟s profile with their (customers‟) loyalty towards LK Western Food Restaurant. Besides, this analysis also allows us to make comparisons through the construction of tables. In our project paper, descriptive analysis involves computing percentages and frequencies of relevant factors. This emphasizes on the analysis of respondent‟s demographic statistics. On the other hand, the mean and standard deviation of all major variables are also evaluated.

4.3.1

Frequencies Analysis Table 4.2: Frequencies for Demographic of Respondents

Variable

Frequency

Percentage %

Age below 18 years old between 18 to 28 years old between 29 to 39 years old above 40 years old

6 55 11 8

7.5 68.8 13.8 10.0

Gender Male Female

38 42

47.5 52.5

Ethnicity Malay Indian Chinese Others

4 5 65 6

5.0 6.2 81.2 7.5

Employment Students Self-employed Private Government Unemployed

60 6 11 1 2

75.0 7.5 13.8 1.2 2.5

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Variable

Frequency

Percentage %

Income Level Less than RM 2, 000 RM 2, 000 – RM 2, 999 RM 3, 000 – RM 3, 999 RM 4, 000 – RM 4, 999 RM 5, 000 – RM 5, 999 RM 6, 000 or more

62 1 6 5 2 4

77.5 1.2 7.5 6.2 2.5 5.0

Who do you dine with in the restaurant? Family Friends Spouse/partner Client

19 50 11 0

23.8 62.5 13.8 0

In this research, there are a total of 80 respondents. From the frequency analysis conducted on the respondent‟s profile, we came to the knowledge that most of our respondents which sum up to 55 respondents or 68.8% of the total respondents are in the age range of 18 to 28 years old. The lowest number of respondents is at the age range of below 18 years old with only 7.5% of the total respondents or only 6 of them. On top of that, 13.8% of the respondents are from the age range of between 29 to 39 years old, whereas the remaining 10.0% of the respondents are above 40 years old. Based on the table 4.2, we can conclude that most of the respondents are at the age range of 18 to 28 years old, because they are university‟s students, as LK Western Food Restaurant is located near universities as well as the student‟s hostels. From the 80 respondents, 47.5% of them are males and 52.5% are females‟ respondents. The two percentages are more or less the same; this might be attributed to the almost equal population of male and female respondents that visits LK Western Food Restaurant and willing to participate in our research. 81.2% of the respondents in our survey are Chinese, 5.0% of them are Malay, 6.2% are Indian and 7.5% are from other countries. The respondents from other countries include those from China and Korea. The percentages of respondents are dominated by one of the three largest ethnic groups in Malaysia, which is the Chinese. It is found that Chinese customers are more likely to dine in LK Western Food Restaurant, based on the results generated in Table 2. Only 5.0% of the respondents are Malays, this can be attributed to the fact that LK Western Food Restaurant does not

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have the licence of HALAL. The Indians on the other hand, is also less likely to dine in LK Western Food Restaurant, this might be due to the stereotyped perception of LK Western Food Restaurant that serves mostly Chinese customers. It might seem that due to the small numbers of Indians dinar in LK Western Food Restaurant, less Indians are likely to dine there. Besides, competitors nearby are offering Indian and Malay cuisines which are more to Indiansâ€&#x; liking.

Furthermore, it is found in our sample that 60 respondents (75.0%) are students. This is in accordance with our expectation of the likeliness of having more students to dine in LK Western Food Restaurant as it is convenient for students from University Science of Malaysia that is located nearby the location of the restaurant. Therefore, it is shown that respondents that are at age range of between 18 to 28 years old are main respondents, and students dominated them. 7.5% of the respondents self-employed, 13.8% are working in private sector, while only 1.2% of them are working in government sector. On top of that, 2.5% of the respondents are unemployed.

The income level on the other hand, shows that 62 respondents (77.5%) have an income level of less than RM 2,000. This is attributed to the fact that most of them are students and have no income yet. 5.0% of the respondents have high income level of more than RM6, 000. 1.2% of the respondentsâ€&#x; income is between RM 2,000 to RM 2,999, 7.5% is between RM 3,000 to RM 3,999, and 62% is between RM 4,000 to RM 4,999, lastly 2.5% of them are between RM 5,000 to RM 5,999.

It is found that majority of the respondents which is 50 of them (62.5%) dine in LK Western Food Restaurant with their friends. Actually it can be easily attributed to the majority of respondents which consist of USM students. 23.8% of the respondents dine with their family as company in LK Western Food Restaurant. This might be because LK Western Food Restaurant is located near Plaza Ivory apartment where itâ€&#x;s convenient for family members to dine in the restaurant for breakfast, lunch or dinner. 13.8% of the respondents dine with their spouse/partner in LK Western Food Restaurant.

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4.3.2

Descriptive Statistics of Research Variables Table 4.3: Descriptive Statistics of Study Variables

Variable

Mean

Standard Deviation

Responsiveness (RES)

3.22917

0.732687

Assurance (ASS)

3.36562

0.719247

Tangibility (TAN)

3.15000

0.769359

Emphaty (EMP)

3.18125

0.657208

Reliability (REL)

3.26562

0.816507

Customer‟s Satisfaction (CS)

3.20000

0.785953

Customer‟s Loyalty (CL)

2.97188

0.582231

In this research, all the main variables are measured in scales which ranges from „(1) Strongly Disagree‟ to „(5) Strongly Agree‟. Means and standard deviations were obtained for the independent, mediating and dependent variables.

Table 4.3 shows all the value of mean and standard deviation for the seven main variables. The Independent variables includes responsiveness of the staffs, assurance from the restaurant, tangibility of the restaurant, the provision of empathy and reliability of the restaurant. Customer‟s satisfaction is the mediating variable and customer‟s loyalty is the dependant variable.

From the results given in Table 4.3, it is shown that the mean of all the variables is between 3.15000 and 3.36562. This illustrates that most of the respondents somewhat and fairly agree that responsiveness of the staffs, assurance from the restaurant, tangibility of the restaurant, the provision of empathy and reliability of the restaurant is satisfactory. The independent variable which is the dimension of assurance recorded the highest mean value which is 3.36562. This shows that most of the respondents somewhat or tend to agree that assurance in LK Food Restaurant is satisfactory. This might be because customers find that LK Western food restaurant‟s staffs are well behaved and deliver good services.

Reliability, responsiveness of staff, and customer satisfaction follow up with relatively high values of means namely 3.26562, 3.22917 and 3.20000 respectively. All the three variables obtain minimum values that are seemingly above the mid scale of „(3) Neutral‟. This indicates that customers generally tend to agree that LK Western Food Restaurant‟s reliability and responsiveness of staff is

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somewhat satisfying. Besides that, results also indicate that customers are satisfied with the product and services they obtained from LK Western Food Restaurant to some extent.

The mean for the remaining 2 independent variables namely tangibility and empathy also showed comparatively high values of mean which is 3.15000 and 3.18125 respectively. Both the values of means are also above the mid scale of „(3) Neutral‟ and moving towards „(4) Agree‟. Tangibility which showed a mean value of 3.15000 signifies that customers generally agree to some extend that LK Western Food Restaurant has agreeable tangibles or psychical evidence. The psychical evidences include ambiance, table settings, staff‟s presentations and décor of the restaurants. The dependent variable which is customer‟s loyalty on the other hand, recorded the lowest value of mean with 2.97188. The figure is slightly below the mid scale of „(3) Neutral‟. Hence, the result signifies that customers generally somewhat disagree that they will possess customer‟s loyalty towards LK Western Food Restaurant. However, the results are almost moving towards being neutral. Standard deviation of all the variables is between 0.582231 and 0.816507. Reliability has the highest standard deviation of 0.816507 whereas customer‟s loyalty has the lowest standard deviation of only 0.582231.

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4.4

Hypothesis Testing 4.4.1

Pearson Correlation Analysis

We then proceed by testing the relationships among the independent variables and dependent variables. This is significant in finalizing all the hypotheses made. Pearson Correlation is employed to do the measurements. This is so because correlation analysis provides us with quantitative figures that can help us in gauging the type and strength of relationship between two variables. The figures normally range from -1 to +1.

A +1 correlation indicates that there is a perfect positive linear relationship between the two tested variables. Subsequently, a correlation of -1 signifies a perfect negative linear relationship between the two variables. In our research, each independent variable is analysed to determine its correlation with the dependent variables that is customer‟s loyalty towards LK Western Food Restaurant. The

Responsiveness

Customer‟s Loyalty

Customer‟s Satisfaction

Reliability

Empathy

Tangibility

Assurance

Responsiveness

results are shown in the table displayed in the following page.

1.000

Assurance

0.693**

1.000

Tangibility

0.652** 0.685**

Empathy

0.757** 0.708** 0.614**

Reliability

0.718** 0.629** 0.566** 0.679**

Customer‟s Satisfaction

0.616** 0.642** 0.665** 0.615** 0.697**

Customer‟s Loyalty

0.551** 0.458** 0.489** 0.539** 0.529** 0.602**

1.000 1.000 1.000 1.000

**. Correlation is significant at the 0.01 level (2-tailed). Table 4.4: Pearson Correlation between Major Variables

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By referring to the correlation matrix shown in the previous page, the impact and relationships of all independent variables can be determined. This is done by examining the Pearson Correlation computed by SPSS programme Responsiveness vs Customer’s Loyalty As we can see, the correlation between responsiveness of staff towards customer‟s loyalty in LK Western Food Restaurant is 0.551. The positive correlation indicates that the dimension of responsiveness of staffs do affects customer‟s loyalty towards LK Western Food Restaurant positively. The positive figure of 0.551 which is relatively high as comparatively it is the second highest figure among all the other variables. This support the first hypothesis (H1) made that „Responsiveness of Staff has a positive relationship with customer’s loyalty’. This concludes that responsiveness of staff do affect customer‟s loyalty to LK Western Food Restaurant. With that, hypothesis 1 is accepted. Assurance vs Customer’s Loyalty From the result obtained, the correlation between the dimensions of assurance towards customer‟s loyalty to LK Western Food is 0.458. Despite the relatively low positive correlation of assurance and customer‟s loyalty it still indicates that their relationships positively related. The positive figure of 0.458 marked the lowest correlation relationships among all the independent variables. This can be concluded that the dimension of assurance is the dimension that affect customer‟s loyalty the least. However, this still support the second hypothesis (H2) made that „Assurance has a positive relationship with Customer’s Loyalty’. This allows us to conclude and summarize that the dimension of assurance do affect customer‟s loyalty to dine in LK Western Food Restaurant positively. Hence, hypothesis 2 is accepted. Tangibility vs Customer’s Loyalty As we can see, the correlation between the dimension of tangibility and customer‟s loyalty to LK Western Food restaurant is 0.489. The positive correlation indicates that the aptitude of tangibility do affects customer‟s loyalty towards LK Western Food Restaurant positively. This support the third hypothesis (H3) made that „Tangibles has a positive relationship with Customer’s Loyalty’. This concludes that tangibility like the psychical evidence of LK Western Food Restaurant does affect customer‟s loyalty. With that, hypothesis 3 is accepted.

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Empathy vs Customer’s Loyalty From the result obtained, the correlation between the dimension of empathy and customer‟s loyalty towards LK Western Food Restaurant is 0.539. The relatively high positive correlation indicates that dimension of empathy do affects customer‟s loyalty positively. This support the forth hypothesis (H4) made that „Empathy has a positive relationship with Customer’s Loyalty’. This allows us to conclude and summarize that customers will take the dimension of empathy for instance, the ability of restaurant‟s staff to treat customers as an individual into consideration before determining their loyalty to a restaurant. Hence, hypothesis 4 is accepted. Reliability vs Customer’s Loyalty As we can see, the correlation between the dimension of reliability and customer‟s loyalty is 0.529. The positive correlation indicates that the dimension of reliability do affects customer‟s loyalty positively. This support the fifth hypothesis (H5) made that „Reliability has a positive relationship with Customer’s Loyalty’. This figure indicates that customers will judge the reliability of a LK Western Food Restaurant like its ability to deliver accurate and timely services before determining their loyalty towards the restaurant. This reliability do affect customer‟s loyalty .With that, hypothesis 5 is accepted. Customer’s Satisfaction vs Customer’s Loyalty From the result obtained, the correlation between customer‟s satisfaction and customer‟s loyalty is 0.602. The positive figure of 0.602 marked the highest correlation relationships among all the major variables. It also coincides with the results obtained earlier that all the independent variables shows a positive relationships with the independent variable which is customer‟s loyalty due to customer‟s satisfaction‟s standing as mediating variable. The highest positive correlation indicates customer‟s satisfaction do affects customer‟s loyalty to dine in LK Western Food Restaurant positively. This support the last and sixth hypothesis (H6) made that „Customer Satisfaction has a positive relationship with Customer’s Loyalty’. This allows us to conclude and summarize that if a customer is satisfied with the products and services that encompasses various dimensions of LK Western Food restaurant, they will posses customer‟s loyalty which enables them to give positive word of mouth as well as visits LK Western Food Restaurant more often. Hence, hypothesis 6 is accepted.

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4.4.2

Hypothesis Result Table 4.5: Hypothesis Results

Hypothesis

Pearson Correlation

Hypothesis Results

H1

Responsiveness of Staff has a positive relationship with Customer‟s Loyalty

0.551

Accepted

H2

Assurance has a positive relationship with Customer‟s Loyalty

0.458

Accepted

H3

Tangibles has a positive relationship with Customer‟s Loyalty

0.489

Accepted

H4

Empathy has a positive relationship with Customer‟s Loyalty

0.539

Accepted

H5

Reliability has a positive relationship with Customer‟s Loyalty

0.529

Accepted

H6

Customer Satisfaction has a positive relationship with Customer‟s Loyalty

0.602

Accepted

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

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5.0

Discussion and Conclusion 5.1

Introduction

We had employed random sampling technique in conducting our research and reliability test is then carried out on all the data obtained. The results shows that all the data obtained and tested are of relatively high internal consistency as all variables have high value of alpha which is from 0.822 to the highest being 0.888.

After making sure that that the data obtained were reliable, we then proceed to analyse the data. Descriptive analysis was then conducted and we had also conducted frequency analysis on respondent‟s profile. We found out that most of our respondent ranges from the age of 18 to 28 years old. The respondents are almost equal in terms of gender with female respondent‟s slightly more than male respondents. Besides that, majority of the respondents are Chinese and are Malaysians. Through the results generated from SPSS we also realized that Indians and Malays are less likely to dine in LK Western Food Restaurant. On top of that, it is found that most customers that dine in LK Western Food Restaurant are students and subsequently majority of the respondents have an income level of less than RM 2, 000. Besides that, it is found that most of the respondents dine in LK Western Food Restaurant with their friends.

We then conducted descriptive analysis on all the major variables of the study and found out that the mean of all the variables is between 3.15000 and 3.36562. This illustrates that most of the respondents somewhat and fairly agree that responsiveness of the staffs, assurance from the restaurant, tangibility of the restaurant, the provision of empathy and reliability of the restaurant as well as customer‟s satisfaction and loyalty are satisfactory. We obtained the highest mean for customer‟s satisfaction. Hence, we summarise the five dimensions tested in our questionnaire and customer‟s satisfaction and loyalty are quite strong as most of the respondents responded positively towards the questions in the questionnaire with majority of the answers ranging only from Neutral (3) to Strongly Agree (5).

We then conducted Pearson Correlation analysis to do the hypothesis testing by testing the relationship among the major variables. Pearson Correlation analysis enable us to determine whether each of the independent variables as well as mediating variables have a positive or negative relationships with the dependent variables. More vitally, correlation analysis allow us to decide and

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conclude whether or not we can accept the six hypothesis made earlier in this research. Analysis from the Pearson Correlation analysis indicate that customer satisfaction as it would be expected, significantly and positively correlated with perceived satisfaction of the customers and the five dimensions in service quality namely; responsiveness, assurance, tangibility, empathy and reliability which would lead to customer loyalty as a result. As expected, hypothesis one (H1) through six (H6) was accepted and positively correlated. Statistic shows that customer‟s satisfaction and customer‟s loyalty marked the highest correlation relationships among all the major variables. It also coincides with the results obtained earlier that all the independent variables shows a positive relationships with the independent variable which is customer‟s loyalty due to customer‟s satisfaction‟s standing as mediating variable.

In conclusion, we are able to summarize that all the five dimensions of service quality and customer‟s satisfaction will affect a customer‟s loyalty towards LK Western Food Restaurant. The five independent variables and one mediating variable significantly impact the dependent variable of our research. We can conclude that it is in fact very important for one to be conscious and aware of their own degree of judgments towards their perceive level of good and excellent services before they can decide on their loyalty towards a restaurant.

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5.2

Discussion of findings

Both customer satisfaction and customer loyalty is the key performance indicator for a business. In a competitive market place, businesses compete for customers in terms of quality and also gain their profit through customer satisfaction and loyalty. Customer satisfaction is now the key element of business strategy. This is because customer satisfaction will lead to customer loyalty which in turn determines the success or failure rates of a business.

Through the results we obtained from the questionnaires that we distributed to random customers of LK Western Food Restaurant, we manage to answer the research questions earlier that all the five dimensions of service quality namely responsiveness, assurance, tangibility, empathy and reliability as well as customer‟s satisfaction have a positive relationship with customer‟s loyalty. All the variables studied in this research are significant and positively related to customer‟s loyalty which is the dependent variable. Satisfaction is usually based on the customer‟s experience; the moment of truth and their personal expectation of the product and services. An organization should understand the needs, wants and desire of its customers in order to provide excellent services that is up to the customer‟s expectation. Since, we are able to summarize that all five dimensions of service quality as well as customer‟s satisfaction impacts customer‟s loyalty significantly, improvement of service quality based on the dimensions should be done constantly to satisfy the rapidly changing customer‟s preference and to provide customers with excellent total customers experience. An interesting finding that emerged from the in-depth interviews was that the respondents who were neutral or not satisfied with one or two service dimensions were still satisfied on an overall basis. For instance, respondents, who were not satisfied with the service dimension of tangibles but gave a high rating for the empathy dimension, still perceived the restaurant as having high service quality by rating positively high for customer‟s satisfaction and loyalty. The following part of this research paper will includes ways to improve the service quality of LK Western Food Restaurant.

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

5.3

Implication and recommendations

The managerial implications of using SERVQUAL as an assessment tool include meeting and managing customer expectations, managing the physical design of the product, educating service customers, and achieving continuous quality of the products and services in LK Western Food Restaurant. With the assessment knowledge generated by such a review, LK Western Food Restaurants may then begin to manage their strengths and weaknesses productively. Below are the recommendations that we made in order to improve the services provided by LK Western Food Restaurant to its customers to achieve the ultimate goals of providing total customer experience that results in customer retention. 

SERVQUAL Model

This part of the research paper will be utilize to focus on the recommendation that can be made by LK Western Food Restaurant based on the five dimensions of service quality namely responsiveness, assurance, tangibility, empathy and reliability to improve the service provided to its customers. The findings of this research suggested that the dimensions of responsiveness, assurance and reliability are the most important dimensions of service quality expectations which could lead to high customer‟s satisfactions and customer‟s loyalty towards LK Western Food Restaurant. Tangibility and empathy on the other hand, were comparatively the least important dimensions. It should be noted that managers of LK Western Food Restaurant should focus more on the dimensions that is strongly attributed to customer‟s loyalty. Below are the recommendations of ways to improve the service provided by LK Western Food restaurant based on the five dimensions of service quality:-

Responsiveness This dimension was significantly important as it was cited by respondents as the strongest dimension that affects satisfaction with service quality of the restaurant and customer‟s loyalty. Responsiveness of staff is considered excellent if employees tell customers when services will be performed, give prompt service to customers, are willing to help customers and are never too busy to respond to customer‟s requests. In LK Western Food Restaurant however, there is room for improvement. This is because there is only 4 employees in total that manage the processes of delivering food and services to its customers from providing menus, taking orders, preparing and delivering food and beverages, billings as well as attending customer‟s inquiries or complaints. Having only 4 employees is not enough to attend to all the customers timely and satisfactorily and at the same time communications between service provider and customers will be affected negatively impacting

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

customer‟s loyalty in the future. Hence, we recommend that the owner or manager of LK Western Food Restaurant to hire more employees to attend to customers‟ needs wants and desires in order to provide customers with excellent total customer experience by being readily attending customers‟ inquiries and response promptly to their demands and complaints. The manager can hire minimum of 2 more employees to put up with the traffics in the restaurants. Besides, to improve on the dimensions of responsiveness of staffs, we recommend that trainings should be given to employees in order to achieve professionalism, improve the levels of service quality, improve consistency and maintain a standard, increase the experience of staff, timeliness, less errors and more reliability. Trainings can be given informally in the form of mentor-mentee approach. Instilling excellent cultures among members of the staff through the mentor-mentee approach where the senior members and the junior members work together, coupled with the continuous encouragement and motivation given by the management, can significantly improve staff‟s performance. Besides that, a more formal training could be given to staff by formal induction processes such as having employees work through procedure logs, signed off by supervisors and staffs also do an exam on what they have learnt. This was done because some things need to be learnt by writing them down for consistency. The owner can practice this formal approach because if the training is too informal, employees are likely not to take it as serious training and because it would not be attractive to employees as a result. Additionally, we recommend and made a special point to the owner of LK Western Food Restaurant for not employing young staff solely for the purpose of their hourly wage advantage. The owner should emphasize on experience and professionalism in order to maintain a level of expectation for staff. Hence, to improve on the responsiveness dimension of service quality the selection of staff for restaurant roles is vitally important and a diligent interviewing process should be done before hiring staff.

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

Assurance The dimension of assurance in service quality is found in our research to be less significant in terms of its impact on customer‟s loyalty to LK Western Food restaurant compared to other dimensions of service quality; however, assurance also plays a role in determining customer‟s loyalty as cited by respondents, assurance also correlated with customer‟s loyalty positively. The dimension of assurance includes a good knowledge of food and beverages serve in the restaurant, the ability to recommend food from the menu, service providers are constantly courteous and instill confidence in customers. In addition, the brand name and reputation of the chef or the restaurant were able to inspire confidence in the restaurant. Hence, in order to improve the sense of assurance in LK Western Food restaurant, we recommend the owner to equipped employees with the right skills and knowledge in order to deliver excellent service to its customers. The skills include the techniques and methods to prepare safe, delicious and up to customer‟s expectation food and beverages with consistency. The owner can ensure that by setting a basic requirement of food and beverages‟ standards and have a supervisor to check on its quality before being served to customers. Besides, the owner can train employees to follow a set of procedures or manuals in delivering service to incur consistencies and at the same time instill confidence in customers. The content of their staff manuals should covered service procedures in detail, including plate handling, presentation, door approach, clean up procedures, polishing of cutlery, and restocking of restaurant items. In addition, we recommend that the owner stresses on hiring employees with positive personalities and qualities. Extroverts and excel in communication skills for instances.

Tangibles The aspects of the tangibles dimension which are fairly important to diners in LK Western Food Restaurant are the interior design of the restaurant, dress code of staff, and appropriate ambiance. While more emphasis should be placed on responsiveness of staffs in the service provided by LK Western Food Restaurant, the environment should not be ignored by the owners as dining in a restaurant adopts a more casual atmosphere. This finding is a reminder that diners choose to dine in a restaurant and possess loyalty to the restaurant based on tangibility of the restaurant too. Thus, it is recommended that the owner of LK Western Food Restaurant pay more attention to the physical environment and be mindful that providing privacy, ambience, unique and outstanding interiors could lead to higher levels of customer satisfaction that could ultimately leads to customer‟s loyalty. Tangibles were another important dimension cited by respondents as contributing to their satisfaction with the service quality of the restaurant that leads to customer‟s loyalty. Hence, we suggest LK Western Food Restaurant to be more conscious of the customer‟s need of privacy in the design and

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layout of their restaurants. Tables should be placed further apart. The owner of LK Western Food restaurant should bear in mind that the décor is part of the dining experience, and indeed one of the differentiating factors between a good quality restaurant and a moderate restaurant. Thus, it is recommended to the restaurant‟s owner to engage with a reputable design consultant to come up with a unique design. Besides, the owner could also revamp the design of their restaurants on a regular basis to provide freshness to the diner. Restaurants should pay more attention to the physical environment and be mindful that providing privacy, ambience, unique and outstanding interiors could lead to higher levels of customer satisfaction that will eventually followed by customer‟s loyalty.

Empathy The aspects of empathy, which could bring about higher levels of customer satisfaction, are providing personalized care and concern and the ability to anticipate a customer‟s need and make him or her feel special. The study suggests that empathy were important service dimensions of service quality for dining in LK Western Food Restaurant which could contribute to raising the level of customer satisfaction and loyalty. Diners perceived the service quality of the restaurant to be high when service staff makes the effort to understand and anticipate their customers‟ needs and to delight them with personal attentions. In order to improve the dimension of empathy in LK Western Food Restaurant, we recommend that the owner should pay more attention to training and empowering their service staff to look for ways to make the dining experience a pleasing and satisfying one for their customers. Some of the recommendations to the owner include enlighten employees to treat customers like how they want to be treated by putting themselves in the customer‟s shoes. Empathy links directly to marketing, sales, product development, management, and ultimately business success. Therefore, the owner of LK Western Food Restaurant should also emphasize on the dimension of empathy in order to provide total customers experience. Marketing starts with understanding what people want from you. For example customers want to have a filling meal, with reasonable price, timely services and in a nice ambiance. That is where empathy comes into play in marketing. Employees have to step into the customers shoes. Understand what they want. The menu, the pricing, and the service, they all have to match what the customer wants, needs and desires.

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Reliability Reliability is a dimension that is significantly important as it was cited by respondents as the second strongest dimension that affects satisfaction with service quality of the restaurant and customer‟s loyalty to LK Western Food restaurant. Reliability is perceived to be excellent when the restaurant delivered services as promised, the restaurant performs the service in a timely, consistent, accurate and dependable manner and order was served correctly and completely. We recommend LK Western Food Restaurant to improve the dimension of reliability by serving and delivering fresh food at the correct temperature and accurately the first time to customers. Besides, the owner should implement a comprehensive training program for employees in order to maintain high customer‟s satisfaction in terms of reliability. The management should provide an ongoing training for staffs to ensure excellent service quality. Training program will enable employees to be prepared to do specific tasks which can maximize the employee‟s potential due to the reduced role ambiguity and conflicts. Training can be given by having employees to follow a set of manuals that include the dos and don‟ts of service delivery. On top of that, a set of procedures to record, prepare and deliver customer‟s orders in a specific time span should be made compulsory for staffs to follow in order to provide services with accuracies and consistencies.

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

Improve General Customer’s Satisfaction

This part of the research paper is to improve general customer‟s satisfaction that encompasses the quality of food and beverages in terms of price, taste and appearance as well as other recommendations deems appropriate for improvement of the services provided in LK Western Food Restaurant in order to encourage customer‟s loyalty. Customer‟s satisfaction is the customer‟s evaluation of a product or service in terms of whether that product or service has met the customer‟s expectations. Customer‟s expectations here include customer‟s needs, wants and desire. We recommend the following ways to improve customer‟s satisfaction in LK Western Food Restaurant: 1. Improving the quality of food 2. Improving the speed of delivering food 3. Improving the quality of service

Improving the quality of food Food is the tangible or touchable component of the dining experience. Quality of the food is the most important in the restaurant sector. Quality of the food and beverage is the key determinant of customer satisfaction, customer loyalty and customer‟s choice of a restaurant. Firstly, we recommend LK Western Food Restaurant to improve on the variety of food in its menu. This suggestion point is made because the variety of food on the menu is important to certain categories of customers, especially today when healthy eating has become an important issue in society. Furthermore, it is found in the study, that majority of LK Western Food‟s customers are young adults in the range of 18 to 28 years old that easily get bored and tired of the same menus every now and then. They are more likely to seek for varieties of food for the sense of excitement and pleasure. Next, we recommend LK Western Food Restaurant to increase portion sizes of food or slightly lower the prices to increase customer‟s satisfaction through the value that they obtained from the money they paid. According to our survey and analysis, 77.5% of the respondents have an income level of less than RM 2,000. Hence, affordable price is very important for customers with low income. Finally, we recommend the restaurant to serve food at the right temperature. Our team had been to LK Western Food Restaurant to experience their services ourselves numerous times and to observe the methods their employees deliver services to its customers. We realized that due to the lack of employees in LK Western Food Restaurant, food that is done and cooked is left unattended for a short period of time before being taken to serve customers. This had affected the right temperature of food. Deviations from food temperatures can create dissatisfaction. Hence, we recommend LK Western Food Restaurant to hire more employees to avoid short of employees and made sure they

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deliver the food to its customers once it is done or cooked to maintain the right temperature of the food.

Improving the speed of delivering food As we already know, majority of LK Western Food Restaurantâ€&#x;s customers are young adults with the age range of 18 to 28 years old, young adults are more likely to seek convenience and are less patient. If the speed of food delivery is slow, customers will be dissatisfied and it is crucial for a newly established restaurant like LK Western Food Restaurant. Most of the time, young adults are not willing to spend much time in waiting for delivering of food. Hence, in order to improve the speed of delivering food, we recommend the owner of LK Western Food Restaurant to invest in training its staffs because the better trained a server, the faster and more efficient they work. Training to prepare food and beverages in a timely manner as well as in a specific time span enables the chefs to prepare food consistently and at the same time improving the speed of food delivering.

Improving the quality of service To improve on the quality of service, we recommend that the employees of LK Western Food Restaurant welcome customers pleasantly as soon as they step into the restaurant and offer customers with menu. Based on our personal experience in the restaurant as well as some comments from the questionnaires we distributed, customers are not attended for a period of time before being offered menus as all the employees seems busy most of the time, and this cause dissatisfaction to the customers. Here, the same recommendation will be given to the restaurant which is hiring more staffs to cope with the traffics especially during peak hours. Besides, we recommend an improvised version of menu booklets that include surreal photographs, descriptions, codes and prices of the food and beverages to provide more thorough explanations for customers to avoid unrealistic expectation by being able to visualize the menu items properly. In addition, staff should be able to verbally describe the menu items to customers if customers inquire for more details. Hereby, we recommend that all the staff in LK Western Food Restaurant should familiarized themselves with all the food and beverages offered in order to be equipped with knowledge to answer customerâ€&#x;s inquiries.

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

Service Blueprint

This part of the research paper will be utilized for service blueprint. The current existing service blueprint of LK Western Food Restaurant as well as a proposed service blueprint will be included in this part. Service blueprinting is a process analysis methodology proposed by Shostack (1982). Shostack‟s methodical procedure draws upon time / motions method engineering, PERT / project programming and computer system and software design. The proposed blueprint allows for a quantitative description of critical service elements, such as time, logical sequences of action and processes. Besides, it specifies both actions / events that happen in the time and place of the interaction and actions / events that are out of the line of visibility for the users, but are fundamental for the service. Zeithaml, Bitner et al. (2006) define service blueprinting as a tool for simultaneously depicting the service process, the points of customer contact, and the evidence of the service from the customer’s point of view. With this description, the author emphasizes the different systemic layers overlapping in a service, from the layer of customer interaction and physical evidence to the layer of internal interaction within the service production process.

Figure 5.1 shows the current service blueprint of LK Western Food Restaurant. The blueprint composes the physical evidence that exists in the restaurant, the customer actions, visible and invisible employees‟ actions, support processes and three lines which is line of interaction, line of visibility and line of internal interaction.

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Customer actions

Physical Evidence

AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM Main entrance

Table and chair

Menu

Waiter

Delivery tray, Food

Food

Bill desk

appearance

Arrive at restaurant

Choose the place and sit

Read the menu

Make order

Serve with menu

Take order

Wait for the food

Receive food

Eat

Pay the bill and leave

Employee actions (onstage / visible)

Line of Interaction

Deliver food

Receive payment

Employee actions (backstage / invisible)

Line of Visibility

Receive food order

Support Processes

Line of Internal Interaction

Registratio n system

Prepare food

Registratio n system

Figure 5.1 Existing Service Blueprint of LK Western Food Restaurant

The customer actions area in the service blueprint encompasses the steps, choices, activities, and interaction that the customer performs in the process of purchasing, consuming, and evaluating the service. The total customer experience is apparent in this area of the blueprint. For LK Western Food Restaurant, the sequence of customer actions starts with them arriving at the restaurant. Next, customers will choose a vacant place to sit followed by reading the menu that are served by employee, follow up by customers making orders while the employees take down the orders, after that customers will be waiting for the food to be delivered, subsequently customers received food ordered and consume the food, and finally customers will make the payment and leave the restaurant. In the restaurant, customers will take each of the steps mentioned above and complete the process of dining in LK Western Food Restaurant.

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

The employee actions are separated from the customer actions by a „line of interaction‟. These actions are face-to-face actions between employees and customers. The interaction begins as soon as the employee serves customers with the menu of the restaurant. Next the interactions take place when customers are making orders while the employee takes down the order. Next, the orders taken will be delivered to the invisible / backstage contact employee. On top of that, in between the line of interactions, one way communication and two ways communication is taking place. One way communication is illustrated when employee deliver ordered food to customers. Two way communications on the other hand takes place when the customers is making orders, making and receiving payment and others which requires communication between two parties. The „internal line of visibility‟ separates the actions of the onstage from the backstage. Everything that appears above the line of visibility can be seen by customers, while everything below the line of visibility is invisible to customers. The invisible employee‟s action for instance, is receiving food order from the visible employee action. After received the food order, invisible employee will pass the food order to the last part which is the support process.

The support process section of the blueprint covers the internal services, steps, and interactions that take place to support the contact employees in delivering the service. For example, registration system supporting the employee when taking the order and receive the payment from the customer. It becomes an important role to complete the whole process.

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM Physical Evidence

Main entrance

Table and chair

Menu

Waiter

Delivery tray, Food

Food

Bill desk

Customer actions

appearance

Arrive at restaurant

Choose the place and sit

Read the menu

Make order

Guide to seatings

Serve, suggest & explaint menu

Take order & repeat order

Wait for the food

Receive food

Eat

Pay the bill and leave

Employee actions (onstage / visible)

Line of Interaction

Greeting & Welc oming

Deliver food & naming food

Receive payment & thanks customer

Employee actions (backstage / invisible)

Line of Visibility

Receive food order

Support Processes

Line of Internal Interaction

Registratio n system

Prepare food

Registratio n system

Figure 5.2 Proposed New Service Blueprint for LK Western Food Restaurant

Figure 5.2 shows that the proposed new service blueprint for LK Western Food Restaurant. In the proposed service blueprint we are adding an additional six actions that will help to improve the service provided by LK Western Food Restaurant through the visible customer action which in turn will help to provide excellent total customer experience. The additional actions include:

1. Greet and welcome customers as soon as they arrive at the restaurant 2. Guiding customers to a suitable place to sit 3. Serve, suggest and explain menu 4. Take and repeat orders 5. Name the food delivered 6. Thank customers after receiving payments

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

Greet and welcome customers as soon as they arrive at the restaurant Employees in LK Western Food Restaurant are recommended to greet and welcome customers warmly with smiles on their face as soon as customers arrive in order to induce warmness in customers as well as making them feel comfortable to dine in the restaurant. Currently, customers that arrive in LK Western Food Restaurant are not attended the moment they arrive and they are required to search for vacant seats themselves. This might cause customers to be dissatisfied as they want to be greeted and treated as an important and significant individual. Personal attention like greeting customer warmly will assist LK Western Food Restaurant to improve the service that they currently provide.

Guiding customers to a suitable place to sit After greeting and welcoming customers, employee shall address customers with appropriate titles like sir or miss and ask them the number of dinars that are dining with them at that point of time. After knowing the number of dinars, employee should guide customers to an appropriate and suitable table for customers. At present, customers are required to look for vacant tables themselves and are not attended until they are seated. Te inconvenience caused might incur dissatisfaction in customers which is critical to the newly established LK Western Food Restaurant.

Serve, suggest and explain menu At the moment, customers are served with menus once they are seated. However, the employee left after leaving menus on the table. Customers will have to request for employee to come over if there is any inquiry regarding the menu. Here, we recommend the employee to serve the menus as soon as the customers are seated and stay put to suggests and explains the menu. Here, we recommend that employees should first suggest customers with „the dish of the day‟ or the restaurant‟s signature dish in order to be efficient. This is because raw materials and ingredients needed for dish of the day as well as signature dish are usually well prepared. Next, employees are recommended to be extremely familiar with the entire menu and are able to describe and explain the food and beverages available if they were asked or when customers seem to be confused or having a hard time choosing what to order. This will positively influence customers‟ perception towards the service quality of LK Western Food restaurant as they are assisting in their decision of selecting food that best suits them.

Take and repeat orders Currently orders made by customers are jotted down by employee that is taking orders without repeating orders. We recommend the employee to repeat orders to eliminate mistake. Besides that,

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repeating order serves to trigger a memory at the table either by someone else who knows what that person really wants, or maybe that person has now heard back what they have just ordered and says no and that he or she meant other thing instead. Additionally, repeating orders serves as a check that employees have heard the orders properly and accurately. By doing that, mistake can be avoided and can definitely provide total customer experience.

Name the food delivered When serving the food, employee should clarify the items that are served to the customer by mentioning the title of the food based on the ordered items. Usually the customer tends to forget what they actually ordered and they cannot differentiate their ordered items. For the existing service, LK Western Food Restaurant only labeled the drinks in traditional Chinese word and did not mention or name the drink delivered. It is difficult for the non-Chinese readers to understand and identify their drinks. The same goes to their food; the name of the food is not mention when it is served and customers sometimes unable to clarify their food. Therefore, by clarifying and naming the items that are served, more convenience will be brought to the customers and at the same time providing customers with a better service.

Thank customers after receiving payment At the moment, employees never say thank you when customer leave after making the payment. We strongly recommend employees to thank customers sincerely after receiving their payment. Saying thank you to customers are actually a real genuine emotional response, and a sort of attitude of gratitude to customers that visited and choose to dine in LK Western Food Restaurant. Saying thank you to customers are able to communicate appreciation, sets LK Western Food Restaurant apart from competitors as well as sets the stage for future business as customer felt appreciated.

Other recommendations There are few problems in the existing service blueprint for the LK Western Food. We will discuss the problems with some suggestions in this part.

The tables and chairs which located inside the restaurant are too small. It designed for 4 people; however, the tables are too small to accommodate the needs of customers. It is not comfortable for the customers and the table does not have enough room for movement when the main courses are served for all four customers. Hence, we recommend LK Western Food Restaurant to add or change tables with bigger size in order to provide sufficient space and room for customers that dine with

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companies. Besides, the tables are not in a tolerable condition in terms of cleanliness. Some of the tables contain stains left behind by previous customers and are oily when it is touched. We recommend the employees to stress more on cleanliness by cleaning and clearing the tables thoroughly before allowing the next customers to dine in that table. On top of that, the floor should be kept clean as well.

LK Western Food Restaurant provides two types of menus, which are menu that is printed in book copies and menus located and attached on the walls of the restaurant. The menu printed in books are satisfactory, however, the wall menus are not well presented. There are three main wall menus as shown in the figure 5.3 with red dotted lines. On two side of the wall are the set menus, and the another front side is the drinks menus. The problem of placing the menu on the wall behind the counter and drink corner are not a good

Figure 5.3 Layout of LK Western

position. The visibility of the wall menu especially

Food Restaurant

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behind the counter and drink corner are not clear. The drink menu is located right above the counter. Since that the main focus of the LK Western Food Restaurant is the western foods and not the Taiwanese drinks, they should not show the drinks menu right above the counter. This is just „me too‟ display from the

outlets

of

Taiwanese

those drinks

franchises.

Furthermore, the waiters and waitress’ uniform in LK

Western

restaurant

are

Food not

presentable. The colour of the employees‟ uniform has faded. We recommend the owner of LK Western Food Restaurant to change the uniform of employees into materials that are able to avoid colours from fading. Besides, we recommend employees to wear apron with restaurant‟s logo. This is because they are serving the customers; and they play a role as the restaurant‟s ambassador. The ambassador is meant to embody the corporate image in appearance, demeanour, values, and ethics. They are important to bring a good image of the restaurant to customers.

Additionally, there is room for improvement in terms of the time customers spent waiting for the food to be served. The times for the processes are important. For example, the employee used average 5 minutes after the customers sat down and been served by the menu. The time taken preparing the food after received the order are 20 to 25 minutes. Since that the food are basically around the same, they can be doing this by mass production. This is because they can increase their rate of production and serve for more customers.

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

Branding of LK Western Food Restaurant

As competition creates infinite choices, companies look for ways to connect emotionally with customers, become irreplaceable, and create lifelong relationships. A strong brand stands out in a densely crowded marketplace. People fall in love with brands, trust them, and believe in their superiority. How a brand is perceived affects its success, regardless of whether it is a start-up, a nonprofit, or a product. According to Marty Neumeier, the Brand Gap, a brand is a personâ€&#x;s gut feeling about a product, service, or company. The CEO of Brand Finance, David Haigh mentioned that Brands have three primary functions, which are navigation, reassurance and engagement. Navigation defined as the brands help consumers choose from a bewildering array of choices, reassurance defined as brands communicate the intrinsic quality of the product or service and reassure customers that they have made the right choice; and engagement defined as the brands use distinctive imagery, language, and associations to encourage customers to identify with the brand.

Besides, brand identity is tangible and appeals to the senses. You can see it, touch it, hold it, hear it, and watch it move. Brand identity fuels recognition, amplifies differentiation, and makes big ideas and meaning accessible. Brand identity takes disparate elements and unifies them into whole systems. Brand identity implies an asset. Branding is a disciplined process used to build awareness and extend customer loyalty. It requires a mandate from the top and readiness to invest in the future. Branding is about seizing every opportunity to express why people should choose one brand over another. Desire to lead, outpace the competition, and give employees the best tools to reach customers are the reasons why companies leverage branding.

Creating the touch-points for LK Western Food Restaurant is an essential part in the branding process. We have recommended a few opportunities for LK Western Food Restaurant to establish the touch-points. We provided some of the process and guidelines to create the touch-points. Some of the touch-points had been applied by the current management team, but we are trying to enhance it and make it better. The suggestions includes:-

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Advertising

Products

Blogs

Services

Business Cards

Signage

Direct Mail

Sales Promotion

Emails

Social Media

Employees

Membership

Exhibits

Websites

Newsletters

Word-of-mouth

Packaging

Figure 5.4 Enhanced Touch-points of LK Western Food Restaurant


AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

Advertising Despite the growing of TiVo and social media as a medium of advertising, printing advertising, is still one of the various ways consumers learn about new products, services, and ideas. Our society has a love-hate relationship with advertising. Pundits issue warnings about its ubiquity and the cynicism of an increasingly skeptical audience. But who can resist the latest catalog or ignore sumptuous magazine ads? Advertising is influence, information, persuasion communication, and dramatization. It is also an art and a science, determining new ways to create a relationship between the consumer and the product.

The suggested media for advertising are social media, flyers, printed magazine, websites, blogs, posters and discount vouchers. The processes when developing the advertisement are shown in the figure below.

Conduct research

Develop strategy

Develop creative

Test creative

Develop media plan

Manage production

Implement campaign

Monitor impact

Figure 5.5 Process of advertising

Environment It is not unusual for the design and ambience of a restaurant to be a greater attraction than the culinary art. Exterior architecture represents yet another opportunity to stimulate immediate recognition attract

and

customers.

In the 1950s, an orange tile roof in the distance sent an immediate

and

welcoming

signal

that there was a Howard Johnsonâ€&#x;s restaurant

ahead.

At the opposite end

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of the cultural spectrum, the architecture of the Guggenheim Museum at Bilbao, Spain, is the brand and a powerful magnet that draws millions of visitors.

Architects, space designers, graphic designers, industrial designers, lighting experts, structural and mechanical engineers, general contractors, and subcontractors collaborate with LK Western Food Restaurant development teams to create unique environments and compelling experiences and Color texture, scale, light, sound, movement, comfort, smell, and accessible information work together to manage perception in the environment. The current LK Western Food Restaurantâ€&#x;s color tone is too dim and will not bring a good mood experience for the customers. We can adjust it by understand the psychological effect of light and lighting sources, and consider energy efficiency whenever possible. Moreover, the temperature in the restaurant should be lower by using air cooler and exhaust fan from the kitchen. The cleanliness and hygiene of the tables, chairs and floor should be enhancing too.

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Signage „Signage can define a place and create a sense of community.â€&#x; said by Keith Helmetag, Partner, from C&G Partners, LLC. From city streets and skylines, through museums and airports, signage functions as identification, information, and advertising. Effective retail signage increases revenues, and intelligent way finding systems support and enhance the experience of a destination.

In the eighteenth century, law required innkeepers to have their signs high enough to clear an armored man on horseback. In the twenty-first century, cities and towns around the world routinely revise sign codes in order to create environments that support the image that a community ways to portray, and to regulate standards to protect public safety. Signage helps people identify, navigate, and understand environments. Signage expresses the brand and builds on understanding the needs and habits of users in the environment.

From the observation and site research, we found that the current signage is not much obvious. LK Western Food Restaurant can add

another

more

visible signage along the pedestrian street.

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

Social Media Social media marketing is one of the most trending topics in online marketing these days. Most of the companies are trying to get themselves engaged in various social media channels for various purposes. If planned and executed well social media marketing, it can be one of the most cheapest and effective mode of online marketing and promotion.

LK Western Food Restaurant can use social media channels as a way for increasing its goodwill and trustworthiness which may ultimately result in better branding. They can have conversation with their customers, which makes a great amount of credibility among its customers. Social media channels help it more easily and flexible when it comes to engaging with its customers. Customer engagement is the most important benefits of social media and this helps to retain its existing customers and also increase brand credibility. Promotion of the products and services in social media can help in increasing the return on investment (ROI). Besides, social media is important for getting customer feedbacks. Customer feedbacks help in improving the services as per the customerâ€&#x;s requirements. Since customer engagement is easier by using social media, customer feedbacks are always there on the top and one can always expect helpful customer reviews and feedback which can help in making the products or services even more better.

LK

Western

Food

Restaurant

currently

only

has

a

Facebook

https://www.facebook.com/pages/LK-Western-Cafe/158663277537222.

page,

Although

which there

is

is a

Facebook page, but the admin of the page does not updates any news regarding the restaurants. LK Western Food Restaurant should have Foursquare check-in, Google Plus, Twitter hashtag, Instagram hashtag, pinterest, etc. One of the fastest way to improve the popularity of the restaurant can be using hashtag. Hashtag are words or phrases prefixed with the symbol, a form of metadata tag. By searching hashtag at Google Instant search, they can get the real time updates from the trend or the tagged items.

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

Websites Engaging content, sound, movement, and color create a walking, talking interactive company experience, bringing the brand personality to life. A website is the best thing to reality, and in some cases it is more efficient, more user-friendly, and faster. The customer is in charge. The internet provides the customer with a no-pressure sales environment, and at the click of a mouse, a competitor is waiting. The best websites understand their customers and respect their needs and preferences. A company‟s website should quickly answer these questions: “who is the company? Why does anyone need to know? What‟s in it for me?” Expressing an authentic brand identity requires communication architects, information architects, designers, and engineers. Websites are increasingly used as portals for media tools. From logos to message points, downloading from a site enables employees to jumpstart marketing and communications from anywhere in the world.

Currently, LK Western Food Restaurant only has a blog introducing the menus and method to order, which is http://lk-westernfood.blogspot.com. It will be better if enhanced it become a website with more interactive information. For example, providing the food ingredient, food nutrient, and balanced diet menu can be display in the website. Furthermore, the e-payment can be made in advance so that both the customer and the company are secured.

Initiate plan

Build groundwork

Define structure

Prepare content

Create visual design

Develop technical design

Figure 5.6 Process of Website Design

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Finalize developme nt

Launch and maintain


AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

Membership Membership or loyalty programs are structured marketing efforts that reward, and therefore encourage, loyal buying behavior which is potentially beneficial to the firm. Creative personalized customer loyalty cards enable LK Western Food Restaurant provide customer loyalty reward points, discounts and perks. Customer loyalty programs also create opportunities to track customer data and use it to build strong, lasting relationships. For example, LK Western Food Restaurant can provide the discount with purchase minimum RM10 and get a stamp. Collected 10 stamps and get a ala cart main course for free. By doing this promotion, can attract more repeated customers and enhance the customer loyalty.

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

5.4

Limitation and suggestions for future research

We had encountered various limitations throughout the completion of this research paper. We tried to minimise or eliminate them in a way that such limitations will not affects the judgment and conclusion made.

The research project generally emphasizes on the output obtained from the SPSS software. However, SPSS might have some limitations that might lead to minor inaccuracies in the data used in our research. This is particularly because users have less control over the output generated. Moreover, whenever we wish to amend the data, problems tend to arise.

Besides that, the samples that we collected in this research are too small. Our research is only based on 80 respondents that dine in LK Western Food Restaurant and it is not possible to equate the perception of only 80 respondents with the general population. Therefore, part of the limitation in this research is the scope of research is limited and unable to represent the general perceptions.

Next, the limitation includes the lack of sincerity or honesty of respondents while answering questions in the distributed questionnaires. Respondents have the tendency to answer questions casually hence, information obtain through questionnaires and this research are not completely valid and reliable. The information and data obtained are only legitimate to a certain extends.

In the next research, we suggest that researchers can employ other software to perform the necessary test that is needed. It would be best if researchers analyse their data from a few software. This might be time-consuming. However, it ensures that the results obtained contains only a minimal portion of error or even better, free from any errors.

Nevertheless, we had also encountered time constraint that had limit the research and extent of research performed. Since we are all students, we will need to allocate our time accordingly so that we can balance between completion of this project as well as other means of studying. Hence, we had encountered time constraint that had limited our work to a certain extent that we had agreed upon to be impactful to the results of this research paper. We suggest that further studies in the future should span over a longer period of time to allow the researchers to conduct pervasive and detailed research. This will improve the credibility and accuracy of the data and results reported.

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

5.5

Conclusion

Service experiences are the outcomes of interactions between the organizations, related systems or processes, service employees and customer‟s satisfaction with service experiences. In the line of service, apart from the organization and service provider, customers themselves have vital roles to play in creating service outcomes and ultimately enhancing or detracting from their own satisfaction and the value perceived of the services.

Service quality and customer satisfaction are inarguably the two core concepts in marketing theory and practice. In today‟s world of intense competition, the key to sustainable competitive advantage lies in delivering high-quality service that will in turn lead to satisfied customers and lead to customer loyalty (customer retention). Customer satisfaction has become one of the most critical marketing priorities because it is generally assumed to be a significant determinant of repeat sales, positive word-of-mouth, and customer loyalty.

Total foodservice in the restaurant industry encompasses both tangible (food and physical facilities) and intangible (employee-customer interaction) components. A proper combination of the tangible and intangible aspects should result in a customer‟s perception of high restaurant service quality, which in turn would lead to attaining customer satisfaction and ultimately customer‟s loyalty.

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

6.0

References  

 

 

 

Valarie A. Zeithaml, Mary Jo Bitner and Dwayne D. Gremier (2009), SERVICES MARKETING: Integrating Customer Focus across the Firm; 5th edition; McGraw-Hill International Edition. SERVQUAL Model, https://docs.google.com/viewer?a=v&q=cache:_831M7fjjCoJ:epi.univparis1.fr/servlet/com.univ.collaboratif.utils.LectureFichiergw?ID_FICHE%3D44733%26OBJET%3D0008%26I D_FICHIER%3D121065+servqual+model&hl=zhCN&pid=bl&srcid=ADGEESgCZCEkGLdCrQjU_lYe6Mbj2V2iNPD3KgTdSKk1JU8O4x8rpNtw4c4UUVf6STkzgFtNcwewimfUdBR6Y_BPKj4LQFW31AJV5vGn49AZn UeuGKQQX310YYCzGQPr-Ujfr1FwMUZ&sig=AHIEtbT57GVJ_Q4Nnu0YTJSfAo_vH5eFAg SERVQUAL Model, http://en.wikipedia.org/wiki/SERVQUAL https://docs.google.com/viewer?a=v&q=cache:KYAEHG5msOcJ:eprints.utm.my/9514/1/SeyedHosseinSiadatM FSKSM2008.pdf+PZB+servqual+model&hl=zhCN&pid=bl&srcid=ADGEESjWBSyjh8Sr24ZJP3vFs_CCNonGeqAb1WQOuO0UVzP4_VbwgjKLa7ilhSDbdy y04Jk-JcT7x_UARKhTqv5OY5P03zj4cu1YBPL1qHP7F9hJbnZT4zPW5FwlhEOmSFGDbfp85nJ&sig=AHIEtbSHTUqa46tTMaEfV24r5gJq3n501Q http://www.12manage.com/methods_zeithaml_servqual.html Service Performance, https://docs.google.com/viewer?a=v&q=cache:24mu3TFyNsJ:www.hraljournal.com/Page/10%2520Mass%2520Hareeza%2520Ali.pdf+servperf+model&hl=zhCN&pid=bl&srcid=ADGEEShUOx-A3ud71oBI00wAfiNaGTyNCJ2ReHfOLvd36ppfXcH7i5LtJHf4n94dLOKSIfHb7qilK2h5jYZU3dObdgv71IeZTILZIexJ4zlU83qSUo0n48YhnZMQa6weEZMdec8fpj&sig=AHIEtbQi7tVjg1WQgQoTLEZ_5hGuiyKhDA http://www.google.com/#hl=zhCN&q=introduction+of+servperf+model&oq=introduction+of+servperf+model&aq=f&aqi=&aql=&gs_nf=1&g s_l=serp.3...33470.36671.0.36895.16.16.0.0.0.0.141.1008.13j1.14.0.iauHnFEj0dQ&bav=on.2,or.r_gc.r_pw.,cf.o sb&fp=686804089c4b03a4 https://docs.google.com/viewer?a=v&q=cache:d3XcyLEYu5cJ:ccsenet.org/journal/index.php/ijbm/article/down load/9039/7957+function+of+servperf+model&hl=zh-CN&pid=bl&srcid=ADGEESj-os2LSvaU09NaDWORxY1Gy4nv6VJLs0oBhNqLQP-8QAIUi-q94MbEFfPdf1OwtERtgvL4Lj6t-jbksOTrv8HbdyEN_t3MqVtN9QKpvdUFj8aRT2cn-wsY1tYPbbrSDDmVKV&sig=AHIEtbTIbWtm7YCtawxRXc5gvkzYoDl2pg Five Dimensions, https://docs.google.com/viewer?a=v&q=cache:YmF0jnwZS0EJ:etd.lib.stut.edu.tw/ETDdb/ETD-search/getfile?URN%3Detd-1215110-100000-119%26filename%3D098STUT8121030001.PDF+HOLSERV+Theory&hl=zhCN&pid=bl&srcid=ADGEESj7ARy6R4_nOraZ7FO4MRe8Bef2wwHYEu6RCxA2ZSY2QCPfbdWWr4lyINRn 95e_C1qaEb6w2B9LzeZsJCLHz1_u_T6bImxZrq0s1vJ_3dMAKL_cSdorZk_HwfAR38KX5VSwPox&sig=AHIEtbQYuZLyNvOu9Rqn D4IeDAsBk500dA http://www.sciencedirect.com/science/article/pii/S0278431905000940 https://docs.google.com/viewer?a=v&q=cache:uqta8IV5sRQJ:www.gcbe.us/2010_OBEC/data/Mohamad%2520 Rizan-1.doc+the+influence+of+tangibles+for+customer+satisfaction&hl=zhCN&pid=bl&srcid=ADGEEShlH71CkpAnYCbY4AvXCLfjyJumUSuGl2_3y13ZweFqljQKNf2wOnbExIvvXyegpdibW3ubrLJeWuOfDPC4YoToU3cTXZKqYZc2k_6aSUVhAAl9sMMTlRKgLVxjjPs0x4VLgam&sig=A HIEtbTSZynA3q4aCfC-rQVByGSl7ZvDFQ Responsiveness, http://www.google.com/#hl=zhCN&q=the+influence+of+responsiveness+for+cutomers+in+food+industry&oq=the+influence+of+responsiven ess+for+cutomers+in+food+industry&aq=f&aqi=&aql=&gs_nf=1&gs_l=serp.3...169073.176458.0.177969.23.2 2.0.0.0.2.238.2182.2j14j1.17.0.UfF7Be0ZHA0&bav=on.2,or.r_gc.r_pw.,cf.osb&fp=686804089c4b03a4 Tangibles, http://www.google.com/#hl=zhCN&site=&source=hp&q=the+influence+of+tangibles+for+cutomers+in+food+industry&oq=the+influence+of +tangibles+for+cutomers+in+food+industry&aq=f&aqi=&aql=&gs_nf=1&gs_l=hp.3...4846.38668.0.39271.77. 77.11.11.13.0.611.6570.14j19j6j0j2j1.42.0.wGt00mYXAJ8&bav=on.2,or.r_gc.r_pw.,cf.osb&fp=686804089c4b

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

 

03a4 http://wiki.answers.com/Q/Importance_of_reliability_give_examples Customer Satisfaction, https://docs.google.com/viewer?a=v&q=cache:J53FWNRb0kJ:www.sports.re.kr/common/download.jsp?filePath%3Dmagazine/6899820091228164104.pdf%26fi leName%3D6899820091228164104.pdf+the+influence+of+assurance+on+customer+satisfaction&hl=zhCN&pid=bl&srcid=ADGEEShivxeRu-rUQcSPdh-Axa5_qpgJwRGCEHMTuQR48T_nSRk4_d5O4nJI8cW_yCo0cUd3_orRkYb8k8KX2KFC_ndBpZQje07VFVue4Cvur1VViVPULqqz5fMUCNkf5FGUu nX5bie&sig=AHIEtbSiQVidybcIGYSvsTfjQIagyJ3TtA Assurance, https://docs.google.com/viewer?a=v&q=cache:aIKmrvcLc_AJ:www.eurojournals.com/EJEFAS_31_04.pdf+the +influence+of+assurance+on+customer+satisfaction&hl=zhCN&pid=bl&srcid=ADGEESjRT5E1e142dwmHUN9FAqMEgBGMeqRiRs18XMbwTHt0w77HWdxh4r6Bim CIICS5PlHy1hdaszx1JbrSzvxwXF0HcA3HNmuzc2fYv4iYL6CNRSN743otUtDnXbO1Y_xLRcrNfpTX&sig= AHIEtbTQtCl_w1N7DfdFbdbKDV7srUNqyw Empathy, https://docs.google.com/viewer?a=v&q=cache:aIKmrvcLc_AJ:www.eurojournals.com/EJEFAS_31_04.pdf+the +influence+of+assurance+on+customer+satisfaction&hl=zhCN&pid=bl&srcid=ADGEESjRT5E1e142dwmHUN9FAqMEgBGMeqRiRs18XMbwTHt0w77HWdxh4r6Bim CIICS5PlHy1hdaszx1JbrSzvxwXF0HcA3HNmuzc2fYv4iYL6CNRSN743otUtDnXbO1Y_xLRcrNfpTX&sig= AHIEtbTQtCl_w1N7DfdFbdbKDV7srUNqyw Loyalty, https://docs.google.com/viewer?a=v&q=cache:uqta8IV5sRQJ:www.gcbe.us/2010_OBEC/data/Mohamad%2520 Rizan-1.doc+the+influence+of+convenience+on+customer+satisfaction&hl=zhCN&pid=bl&srcid=ADGEEShlH71CkpAnYCbY4AvXCLfjyJumUSuGl2_3y13ZweFqljQKNf2wOnbExIvvXyegpdibW3ubrLJeWuOfDPC4YoToU3cTXZKqYZc2k_6aSUVhAAl9sMMTlRKgLVxjjPs0x4VLgam&sig=A HIEtbR_MvC9353c6HareoQNE6UjNgVoFw HOLSERV, https://docs.google.com/viewer?a=v&q=cache:YmF0jnwZS0EJ:etd.lib.stut.edu.tw/ETD-db/ETDsearch/getfile?URN%3Detd-1215110-100000-119%26filename%3D098STUT8121030001.PDF+what+is+HOLSERV+theory&hl=zhCN&pid=bl&srcid=ADGEESj7ARy6R4_nOraZ7FO4MRe8Bef2wwHYEu6RCxA2ZSY2QCPfbdWWr4lyINRn 95e_C1qaEb6w2B9LzeZsJCLHz1_u_T6bImxZrq0s1vJ_3dMAKL_cSdorZk_HwfAR38KX5VSwPox&sig=AHIEtbTqoL2mMO9KTf33 4l2qpUH7gfPcBQ

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

7.0

Appendix 7.1

Appendix A – Cover Letter

School of Management Universiti Sains Malaysia 11800, Minden Pulau Pinang

10th April 2012.

LK Western Food Restaurant To Whom It May Concern Dear Sir/Madam, We are currently a [second/final – please choose] year management students, majoring in marketing at School of Management, Universiti Sains Malaysia. Currently we are undertaking a course called AMW342 - Services Marketing which is under a supervision of Associate Professor Dr. Azizah Omar. As part of our course requirement, we are required to conduct a group project in regards to services marketing for a Malaysian-based company. We would like to choose your organisation to be our group project for this purpose. The information gathered is anonymous and shall remain strictly confidential. It will be used only to advance knowledge and for the dissemination of the overall results at academic or professional forums. We strongly believe the analysis of this project would provide useful insight information in relations to customers, competitors, opportunities and future potential market in present services industry to your company. We seek your participation and cooperation to achieve the objective of this course by allowing us to conduct the group project in your organisation. If you have any queries and reservation, please do not hesitate to contact us or our supervisor. Thank you for your cooperation

Sincerely Yours,

1. Chuah Wen Xu (012-497 7355) 2. Tan Yinn Jeng 3. Ma Xiao

Course Supervisor Associate Professor Dr. Azizah Omar Deputy Dean, BJIM Universiti Sains Malaysia, Penang. Email: aziemar@usm.my Tel: 04 653 3888 ext. 2889 HP: 012 404 1747

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

7.2

Appendix B – Questionnaire

Dear Respondents, We are students from School of Management who is currently undertaking AMW342 Services Marketing course in University Science of Malaysia. The objective of this survey is to study about customer’s loyalty towards LK Western Food Restaurant. We are seeking your participation to complete this questionnaire. The information gathered is anonymous and will remain strictly confidential. It will be used only for advance knowledge and dissemination of the overall results for academic purposes. Your participation is voluntary and you can choose to discontinue at any time if you wish to do so. Your completion of this questionnaire will be taken and considered as your consent to participate in our research project. Thank you for your participation and cooperation.

Regards,

Group Members:Chuah Wen Xu Tan Yinn Jeng Ma Xiao

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM Survey on Customer Loyalty in LK Western Food Restaurant This survey is divided into 9 sections: Answer each of the following questions with your own honest perception as well as feelings. There is no right or wrong answers.  For Section 1 to 7, state your agreement based on the following scales:1

2

3

4

5

Strongly Disagree

Disagree

Neutral

Agree

Strongly Agree

Section 1: Responsiveness of Staff The staffs greet me as soon as I enter the restaurant The staffs readily provide me with food and drinks menus The staffs provide prompt services without any delays The staffs at the restaurant are never too busy to respond to my requests or inquiries The staffs resolve problems satisfactorily Communication skill of staffs are satisfactory Section 2: Assurance The staffs are respectful towards customers I trust that food served in the restaurant is safe I have confidence in the staffs that served me The staffs are equipped with the right knowledge to answer my questions and have the skills to deliver good service Section 3: Tangibles Appropriate and attractive ambiance of the restaurant Comfortable lighting and temperatures in the restaurant Appropriate and attractive table settings, crockery & cutlery Staffs appears to be neat and well- presented Attractive interior design and decorations in the restaurant Section 4: Empathy Sympathetic handling of customer's complaints Staff provide caring, individualised attention to customers Communication with customers are clear, appropriate and timely Staffs provide services that are appropriate to individual needs of customer

~ 77 ~

1 1 1

2 2 2

3 3 3

4 4 4

5 5 5

1

2

3

4

5

1 1

2 2

3 3

4 4

5 5

1 1 1

2 2 2

3 3 3

4 4 4

5 5 5

1

2

3

4

5

1 1 1 1 1

2 2 2 2 2

3 3 3 3 3

4 4 4 4 4

5 5 5 5 5

1 1

2 2

3 3

4 4

5 5

1

2

3

4

5

1

2

3

4

5


AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM 1

2

3

4

5

Strongly Disagree

Disagree

Neutral

Agree

Strongly Agree

Section 5: Reliability Service is delivered as promised Good service is delivered every time and under all conditions Service is timely, consistent, accurate, and dependable Order was served correctly and completely Section 6: Customer's Satisfaction I am satisfied with the quality of the food in terms of taste and appearance The price of the food and beverages offered are of good value for money I paid I am satisfied with the location of the restaurant and I find it convenient to dine here Dining in this restaurant will be a good idea and a pleasant experience Section 7: Customer Loyalty I will dine in this restaurant as often as I could I will recommend this restaurant to my acquaintance, friends and families I intend to increase my visit to this restaurant in the future I will give positive feedback in the services I obtain from this restaurant

1 1 1 1

2 2 2 2

3 3 3 3

4 4 4 4

5 5 5 5

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

Section 8: Comments 1. What improvement, if any, would you like to see in the service we offered?

2. Are there any other comments you would like to make?

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

Section 9: Profile 1. How old are you?

Years

2. What is your gender? 1.

Male

2.

Female

3. Ethnicity 1.

Malay

2.

Indian

3.

Chinese

4.

Others (Please specify)

4. Employment 1.

Student

2.

Self-employed

3.

Private

4.

Government

5.

Unemployed

5. Income level Less than RM 2, 000

RM 2, 000 – RM 2, 999

RM 3, 000 – RM 3, 999

RM 4, 000 – RM 4, 999

RM 5, 000 – RM 5, 999

RM 6, 000 or more

6. Who do you dine with in the restaurant? 1.

Family

2.

Friends

3.

Spouse / Partner

4.

Client

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

7.3

Appendix C – SPSS Output

Reliability Analysis Responsiveness Reliability Statistics Cronbach's Alpha 0.86

N of Items 6 Item-Total Statistics Scale Mean if Item Deleted

Scale Variance if Item Deleted

Corrected Item-Total Correlation

Cronbach's Alpha if Item Deleted

16.25

13.127

0.64

0.841

15.76

13.069

0.703

0.827

16.36

13.399

0.65

0.838

16.45

14.149

0.648

0.838

16.15 15.9

13.851 15.18

0.744 0.552

0.822 0.854

Scale Mean if Item Deleted

Scale Variance if Item Deleted

Corrected Item-Total Correlation

Cronbach's Alpha if Item Deleted

The staffs are respectful towards customers I trust that food served in the restaurant is safe I have confidence in the staffs that served me

9.84 10.28 10.09

5.226 4.582 4.79

0.699 0.608 0.767

0.77 0.814 0.735

The staffs are equipped with the right knowledge to answer my questions and have the skills to deliver good service

10.19

5.091

0.585

0.815

The staffs greet me as soon as I enter the restaurant The staffs readily provide me with food and drinks menus The staffs provide prompt services without any delays The staffs at the restaurant are never too busy to respond to my requests or inquiries The staffs resolve problems satisfactorily Communication skill of staffs are satisfactory

Assurance Reliability Statistics Cronbach's Alpha

N of Items

0.828

4 Item-Total Statistics

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

Tangibility Reliability Statistics Cronbach's Alpha

N of Items

0.888

5 Item-Total Statistics Scale Mean if Item Deleted

Scale Variance if Item Deleted

Corrected Item-Total Correlation

Cronbach's Alpha if Item Deleted

Appropriate and attractive ambiance of the restaurant

12.56

10.502

0.708

0.87

Comfortable lighting and temperatures in the restaurant

12.72

9.265

0.78

0.851

12.56

8.73

0.793

0.849

12.4

10.192

0.659

0.879

12.75

9.987

0.719

0.866

Scale Mean if Item Deleted

Scale Variance if Item Deleted

Corrected Item-Total Correlation

Cronbach's Alpha if Item Deleted

9.56

4.275

0.663

0.812

9.65

3.901

0.696

0.798

9.45

4.099

0.677

0.806

9.51

4.076

0.692

0.799

Appropriate and attractive table settings, crockery & cutlery Staffs appears to be neat and well- presented Attractive interior design and decorations in the restaurant

Empathy Reliability Statistics Cronbach's Alpha

N of Items

0.845

4 Item-Total Statistics

Sympathetic handling of customer's complaints Staff provide caring, individualised attention to customers Communication with customers are clear, appropriate and timely Staffs provide services that are appropriate to individual needs of customer

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

Reliability Reliability Statistics Cronbach's Alpha

N of Items

0.887

4 Item-Total Statistics Scale Mean if Item Deleted

Scale Variance if Item Deleted

Corrected Item-Total Correlation

Cronbach's Alpha if Item Deleted

9.61

6.569

0.714

0.87

9.92

6.374

0.771

0.849

9.88

6.44

0.746

0.858

9.78

5.518

0.797

0.841

Scale Mean if Item Deleted

Scale Variance if Item Deleted

Corrected Item-Total Correlation

Cronbach's Alpha if Item Deleted

I am satisfied with the quality of the food in terms of taste, appearance etc

9.59

6.043

0.601

0.796

The price of the food and beverages offered are of good value for money I paid

9.85

5.927

0.628

0.784

I am satisfied with the location of the restaurant and I find it convenient to dine here

9.42

6.02

0.585

0.804

Dining in this restaurant will be a good idea and a pleasant experience

9.54

5.568

0.776

0.716

Service is delivered as promised Good service is delivered every time and under all conditions Service is timely, consistent, accurate, and dependable Order was served correctly and completely

Customerâ€&#x;s Satisfaction Reliability Statistics Cronbach's Alpha

N of Items

0.822

4

Item-Total Statistics

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AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

Customerâ€&#x;s Loyalty Reliability Statistics Cronbach's Alpha

N of Items

0.866

4 Item-Total Statistics Scale Mean if Item Deleted

Scale Variance if Item Deleted

Corrected Item-Total Correlation

Cronbach's Alpha if Item Deleted

9.2

6.82

0.667

0.848

8.9

5.939

0.726

0.826

I intend to increase my visit to this restaurant in the future

9.09

6.258

0.795

0.797

I will give positive feedback in the services I obtain from this restaurant

8.62

6.415

0.684

0.841

I will dine in this restaurant as often as I could I will recommend this restaurant to my acquaintance, friends and families

~ 83 ~


AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

Descriptive Analysis Frequency Test Age Statistics How old are you? N

Valid

80

Missing

0 How old are you?

Valid

Frequency

Percent

Valid Percent

Cumulative Percent

below 18 years old

6

7.5

7.5

7.5

18-28 years old 29-39 years old 40 years old and above

55 11 8

68.8 13.8 10

68.8 13.8 10

76.2 90 100

Total

80

100

100

Frequency

Percent

Valid Percent

Cumulative Percent

Male

38

47.5

47.5

47.5

Female

42

52.5

52.5

100

Total

80

100

100

Gender Statistics What is your gender? N

Valid

80

Missing

0 What is your gender?

Valid

~ 84 ~


AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

Ethnicity Statistics Ethnicity N

Valid

80

Missing

0 Ethnicity

Valid

Frequency

Percent

Valid Percent

Cumulative Percent

Malay

4

5

5

5

Indian

5

6.2

6.2

11.2

Chinese Others

65 6

81.2 7.5

81.2 7.5

92.5 100

Total

80

100

100

Frequency

Percent

Valid Percent

Cumulative Percent

Student

60

75

75

75

Self-employed

6

7.5

7.5

82.5

Private Government

11 1

13.8 1.2

13.8 1.2

96.2 97.5

Unemployed

2

2.5

2.5

100

Total

80

100

100

Employment Statistics Employment N

Valid

80

Missing

0 Employment

Valid

~ 85 ~


AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

Descriptive Responsiveness Descriptive Statistics

RES Valid N (listwise)

N

Minimum

Maximum

Mean

Std. Deviation

80 80

1

5

3.22917

0.732687

Assurance Descriptive Statistics

ASS Valid N (listwise)

N

Minimum

Maximum

Mean

Std. Deviation

80 80

1

5

3.36562

0.719247

Tangibility Descriptive Statistics

TAN Valid N (listwise)

N

Minimum

Maximum

Mean

Std. Deviation

80 80

1

5

3.15

0.76935

Empathy Descriptive Statistics

EMP Valid N (listwise)

N

Minimum

Maximum

Mean

Std. Deviation

80 80

1

5

3.18125

0.657208

~ 86 ~


AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

Reliability Descriptive Statistics

REL Valid N (listwise)

N

Minimum

Maximum

Mean

Std. Deviation

80 80

1

5

3.26562

0.816507

Customerâ€&#x;s Satisfaction Descriptive Statistics

CS Valid N (listwise)

N

Minimum

Maximum

Mean

Std. Deviation

80 80

1

5

3.2

0.785953

Customerâ€&#x;s Loyalty Descriptive Statistics

CL Valid N (listwise)

N

Minimum

Maximum

Mean

Std. Deviation

80 80

1.75

4.25

2.97188

0.582231

~ 87 ~


AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

Correlation Correlations

RES

ASS

TAN

EMP

REL

CS

CL

Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N

RES

ASS

TAN

EMP

REL

CS

CL

1

.693**

.652**

.757**

.718**

.616**

.551**

80

0 80

0 80

0 80

0 80

0 80

0 80

.693**

1

.685**

.708**

.629**

.642**

.458**

0 80

80

0 80

0 80

0 80

0 80

0 80

.652**

.685**

1

.614**

.566**

.665**

.489**

0 80

0 80

80

0 80

0 80

0 80

0 80

.757**

.708**

.614**

1

.679**

.615**

.539**

0 80

0 80

0 80

80

0 80

0 80

0 80

.718**

.629**

.566**

.679**

1

.697**

.529**

0 80

0 80

0 80

0 80

80

0 80

0 80

.616**

.642**

.665**

.615**

.697**

1

.602**

0 80

0 80

0 80

0 80

0 80

80

0 80

.551**

.458**

.489**

.539**

.529**

.602**

1

0

0

0

0

0

0

80

80

80

80

80

80

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

~ 88 ~

80


AMW342 Services Marketing | Semester II, Academic Calendar 2011/2012 | DREAM

Income Level Statistics Income Level N

Valid

80

Missing

0 Income Level

Valid

Frequency

Percent

Valid Percent

Cumulative Percent

Less than RM2,000

62

77.5

77.5

77.5

RM2,000 - RM2,999

1

1.2

1.2

78.8

RM3,000 - RM3,999 RM4,000 - RM4,999

6 5

7.5 6.2

7.5 6.2

86.2 92.5

RM5,000 - RM5,999 RM6,000 or more

2 4

2.5 5

2.5 5

95 100

Total

80

100

100

Who do you dine with in the restaurant? Statistics Who do you dine with in the restaurant? N

Valid

80

Missing

0 Who do you dine with in the restaurant?

Valid

Frequency

Percent

Valid Percent

Cumulative Percent

Family

19

23.8

23.8

23.8

Friends

50

62.5

62.5

86.2

Spouse / Partner

11

13.8

13.8

100

Total

80

100

100

~ 89 ~

AMW 342 Service Marketing - LK Western Food  

AMW 342 Service Marketing Project Paper - LK Western Food Restaurant