Customer Satisfaction Restaurant Industry Executive Summary 2022

Customer satisfaction in the restaurant
industry: an examination of the
transaction-specific model
Syed Saad Andaleeb and Carolyn Conway
Sam and Irene Black School of Business, Penn State Erie, The Behrend College, Erie, Pennsylvania, USA
Abstract
Purpose – To determine the factors that explain customer satisfaction in the full service restaurant industry.
Design/methodology/approach – Secondary research and qualitative interviews were used to build the model of customer satisfaction. A structured
questionnaire was employed to gather data and test the model. Sampling involved a random selection of addresses from the telephone book and was
supplemented by respondents selected on the basis of judgment sampling. Factor analysis and multiple regression were used to test the model.
Findings – The regression model suggested that customer satisfaction was influenced most by responsiveness of the frontline employees, followed by
price and food quality (in that order). Physical design and appearance of the restaurant did not have a significant effect.
Research limitations/implications – To explain customer satisfaction better, it may be important to look at additional factors or seek better
measures of the constructs. For example, the measures of food quality may not have captured the complexity and variety of this construct. It may also
be important to address the issue of why customers visit restaurants. Instead of the meal, business transactions or enjoying the cherished company of
others may be more important. Under the circumstances, customer satisfaction factors may be different. The results are also not generalizable as the
sampled area may have different requirements from restaurants.
Practical implications – Full service restaurants should focus on three elements – service quality (responsiveness), price, and food quality (reliability)
– if customer satisfaction is to be treated as a strategic variable.
Originality/value – The study tests the transaction-specific model and enhances the literature on restaurant service management.
Keywords Restaurants, Catering industry, Customer satisfaction, Service levels, United States of America
Paper type Research paper
An executive summary for managers can be found at
the end of this article.
Introduction
The restaurant industry in the USA is large and ubiquitous.
Providing a range of products and services, it touches nearly
every household in one way or another. Reflecting on the size
of the industry, The National Restaurant Association (NRA)
predicted in 2003 that Americans would spend $426.1 billion
on food consumed outside the home (National Restaurant
Association, 2003). Of this amount, it was predicted that full
service restaurants could secure about $153.2 billion or,
roughly, 36 percent of the share. The restaurant industry has
grown over the years, largely because the American way of life
has changed. Since 1950, the proportion of married women in
the work force has nearly tripled (Goch, 1999), resulting in
women having less time to plan and prepare meals at home.
Today, meals are more of an afterthought rather than a
planned occasion (Mogelonsky, 1998). People find
themselves hungry with no time to cook; so they eat out.
The result is the booming restaurant industry.
The NRA also predicted that on an average day in 2003,
the restaurant industry would post $1.2 billion in sales. The
winner of this contest over America’s taste buds is the
customer who has more restaurant options than ever before,
allowing him or her to be more finicky and demanding.
Customers’ expectations for value, in relation to price, also
seem to be on the rise: people want “more” for their money.
These findings have interesting theoretical and practical
implications for the service literature, service establishments,
and especially the restaurant industry which is lucrative in
size, fiercely competitive, and very important to the public
palate. In particular, it is important to comprehend the
dynamics of this industry from the perspective of the
customer who is the final arbiter of how much to spend and
where, when and what to eat. Therefore, an understanding of
the factors that influence customer satisfaction ought to be
useful in guiding restaurant owners and managers to design
and deliver the right offering.
The main research question driving this study is “What
explains customer satisfaction in the full service restaurant
industry?” Given our geographic focus, we believe this study
represents a small step in a series of needed studies to
understand the bigger picture.
Customer satisfaction is at the heart of marketing. The
ability to satisfy customers is vital for a number of reasons.
For example, it has been shown that dissatisfied customers
tend to complain to the establishment or seek redress from
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0887-6045.htm
Journal of Services Marketing
20/1 (2006) 3–11
q Emerald Group Publishing Limited [ISSN 0887-6045]
[DOI 10.1108/08876040610646536]
3

them more often to relieve cognitive dissonance and failed
consumption experiences (Oliver, 1987; Nyer, 1999). If
service providers do not properly address such behavior, it can
have serious ramifications. In extreme cases of dissatisfaction,
customers may resort to negative word-of-mouth as a means
of getting back. A disgruntled customer can, thus, become a
saboteur, dissuading other potential customers away from a
particular service provider.
Researchers have also found a strong relationship between
satisfaction and loyalty. Szymanski and Henard (2001), in
their meta-analysis, indicate 15 positive and significant
correlations between the two constructs. Bearden and Teel
(1983) have also shown a relationship between satisfaction
and loyalty. In fact Jones et al. (1995) argue that this
relationship is not a simple linear one; these behaviors may
depend on consumer attributions, i.e. their belief in the causes
of the CS/D assessment.
Quite understandably, marketing practitioners have often
aligned their bets with customer satisfaction, using slogans
such as “Our focus is customer satisfaction”, or “Customer is
king.” The University of Michigan tracks customers across
200 firms representing all major economic sectors to produce
the ACSI (American Customer Satisfaction Index). Each
company receives an ACSI score computed from its
customers’ perceptions of quality, value, satisfaction,
expectations, complaints, and future loyalty (Fornell et al.,
1996).
Customer satisfaction is defined here in Oliver’s (1997)
terms: that it is the consumer’s fulfillment response. It is a
judgment that a product or service feature, or the product or
service itself, provides a pleasurable level of consumption-
related fulfillment. In other words, it is the overall level of
contentment with a service/product experience.
We used the transaction-specific model suggested by Teas
(1993) and later expanded by Parasuraman, Zeithaml and
Berry (1994) – PZB henceforth – to address our research
question because this model suggests how overall customer
satisfaction can be explained by evaluating experiences with
specific aspects of service quality, product quality, and price
(PZB, 1994). Also, by using the transaction-specific model,
we emphasize that the offering for the full service restaurant
industry must be viewed as a mixture of service and product
features. Thus, customers are likely to consider specific
aspects of the transaction such as product features (e.g. food
quality and restaurant ambience), service features (e.g.
responsiveness of the server), as well as price, to be satisfied
with their overall restaurant experience. The conceptual
framework and the corresponding hypotheses are outlined in
the next section, followed by an explanation of the research
method, the analyses, results, and discussion.
Conceptual framework and hypotheses
Service quality
An important factor driving satisfaction in the service
environment is service quality. On this matter, however,
there is some controversy as to whether customer satisfaction
is an antecedent or consequence of service quality. One school
of thought refers to service quality as a global assessment
about a service category or a particular organization (PZB,
1988). Research conducted by PZB (1985) illustrated
instances where respondents were satisfied with a specific
event, but did not feel the organization offered overall high
quality. Because most measures of customer satisfaction relate
to a specific evaluation of a service episode, customer
satisfaction is viewed as it relates to a specific transaction
(Howard and Sheth, 1969; Hunt, 1979; Singh, 1990); hence
incidents of satisfaction over time result in perceptions of
service quality (PZB, 1988). Oliver (1981) stated that
satisfaction soon decays into one’s overall attitude. From
this perspective, service quality could be viewed as the whole
family picture album, while customer satisfaction is just one
snapshot.
Recently, however, it has been argued that while the two
concepts have things in common, “satisfaction is generally
viewed as a broader concept . . . service quality is a component
of satisfaction” (Zeithaml and Bitner, 2003, p. 85). Because
satisfaction derives from various sources, Bitner and Hubbert
(1994) propose two ways of viewing satisfaction: service-
encounter satisfaction (i.e. satisfaction or dissatisfaction with
specific service encounters) and overall satisfaction (based on
multiple encounters or experiences). In other words, little
satisfactions based on each service encounter lead to overall
satisfaction with the service.
Clearly, service quality is an issue that has engaged
academics, leading to substantial debate over its
conceptualization. In 1988, PZB developed SERVQUAL, a
method to assess customer satisfaction for service industries,
which started a stream of research on service quality
measurement that continues to this day. Their measurement
involved the difference between customers’ perceptions and
expectations based on five generic dimensions: tangibles,
reliability, responsiveness, assurance and empathy.
Research based on this framework has been applied to the
restaurant industry by Stevens (1995), who created
DINESERV from SERVQUAL with some encouraging
results. Although the SERVQUAL framework has been
pursued with some enthusiasm in various service industries,
empirical support for the suggested framework has not always
been encouraging. Cronin and Taylor (1992) suggested that
service quality can be predicted adequately by using
perceptions alone. In addition, Carman (1990) suggested
that in specific service situations it might be necessary to
delete or modify some of the SERVQUAL dimensions. Teas
(1993) argued that measuring the gap between expectations
and performance can be problematic.
When SERVQUAL, consisting of the five original
dimensions, was originally conceptualized by PZB (1988), it
was used to assess four organizations – a bank, a credit card
company, a repair and maintenance organization, and a long
distance phone service carrier. In these industries customers
typically develop long-term relationships with just one
organization. Moreover, PZB did not distinguish these
organizations on the basis of experience, search, and
credence criteria (Zeithaml and Bitner, 2003, p. 36). Each
of these services is also a “pure type” with little or no physical
products exchanging hands. In the restaurant industry, only a
part of the offering is a service which is intangible and
heterogeneous, and where the production and consumption
of the product cannot be separated. In addition, customers
Customer satisfaction in the restaurant industry
Syed Saad Andaleeb and Carolyn Conway
Journal of Services Marketing
Volume 20 · Number 1 · 2006 · 3 –11
4

expect and desire a variety of food selections and places to
frequent, and typically develop a “consideration set” which is
a cluster of restaurants that they patronize on a rotating basis
(Neal, 1999).
In this mixed product-service context and where service
assessments are largely experience based (as opposed to
healthcare or auto repair organizations where service
assessments are credence based), we contend that all five
original dimensions of SERVQUAL need not be included.
For example, the assurance and empathy dimensions
originally suggested in the SERVQUAL framework may not
be of great significance for the following reasons: Assurance is
defined as employees’ knowledge and courtesy and their
ability to inspire trust and confidence. This particular
dimension of service quality is significant largely for
credence based industries such as healthcare, legal services,
or auto repair, that have a higher degree of risk per purchase
and where the outcome of the service encounter is neither
easy to predict, nor well understood. In the restaurant
industry, the customer’s risk is low given the purchase price,
the outcome of the service, and the alternatives available.
Hence assurance is not likely to be as important in this
industry. Moreover, the use of scale items such as “you felt
safe in your transactions with the restaurant” or “the behavior
of employees instilled confidence in you” (both derived from
SERVQUAL) simply did not seem appropriate for the
restaurant context. Yet we acknowledge that elements of
assurance – knowledge and courtesy – are important, but
may have contextually modified meanings as we shall
subsequently argue.
Similarly, empathy is defined in the SERVQUAL literature
as the individualized caring attention that is displayed to each
customer. This dimension is more applicable to industries
where “relationship marketing” as opposed to “transaction
marketing” is critical to the organization’s survival. These
types of industries need personnel that can offer “high
technical” advice and/or develop important business alliances
where empathy can play a vital role. However, the need to
demonstrate empathy in the context of restaurants, especially
for contact personnel such as a server in a busy dinner rush
when one is typically waiting on 20 or more people at a time,
may be fleeting at best. Customers also do not want a doting
server providing personal attention when all they want is to
enjoy the food and the company. At the same time, scale items
such as “the restaurant gives you individual attention” or “the
restaurant had your best interest at heart” (derived from
SERVQUAL) seemed inappropriate for the context. Why else
would customers be there when a variety of other alternatives
are available? Instead, reliable and responsive services may be
more desirable for restaurants when provided in a pleasing
environment.
Reliability has been regarded as the most critical factor for
US customers based on both direct measures and importance
weights derived from regression analysis (PZB, 1988). The
SERVQUAL literature identifies reliability as the ability to
perform promised services dependably and accurately. For the
restaurant industry, reliability translates into the freshness and
temperature of the food (the promise), and receiving the food
error-free and as ordered the first time (dependably and
accurately).
Interestingly, these aspects or measures of reliability could
also be interpreted to represent “food quality” (provided
fresh, at the right temperature, and error-free). In this regard,
we were surprised at our inability to uncover any previous
research on food quality. Considerable research has been
conducted over whether people desire fish more than chicken
and/or vice versa. Menu design and the number of
appropriate items on a menu has also been extensively
researched and reported in the trade literature. However,
what attributes of “food quality” restaurant goers desire most
has received little attention. It is probable that the “chain”
restaurants have conducted their own research, but have not
shared this information due to proprietary rights. We interpret
this dimension interchangeably as “reliability” or “food
quality” because of the common features as explained above
and hypothesize that:
H1a. The more reliable the service provided by the
restaurant, the greater the level of customer
satisfaction, or
H1b. The higher the level of food quality, the greater the
level of customer satisfaction.
Responsiveness, as defined by the SERVQUAL literature, is
identified as the willingness of the staff to be helpful and to
provide prompt service to the customer. In full service
restaurants, customers expect the servers to understand their
needs and address them in a timely manner. For this
dimension, we propose that:
H2. The more responsive the service provided by the
restaurant, the greater the level of customer
satisfaction.
Product quality
Because the “product offering” for a full service restaurant is
likely to be assessed by evaluating an actual product (the
meal) and by where it is delivered (physical place), we decided
to separate the tangibility dimension in SERVQUAL into its
two aspects: food quality and the physical design/de ́cor of the
restaurant. The former has been discussed earlier along with
reliability.
From the perspective of physical design, environmental
psychologists suggest that individuals react to places with two
general, and opposite, forms of behavior: approach or
avoidance (Mehrabian and Russell, 1974). It has been
suggested that in addition to the physical dimensions of a
business attracting or deterring selection, the physical design
of a business can also influence the degree of success
consumers attain once inside (Darley and Gilbert, 1985).
This involves research on the “servicescape” (Bitner, 1992)
which is the “built man-made environment” and how it
affects both customers and employees in the service process.
Thus, we propose that:
H3. The better the physical design and appearance of the
restaurant, the greater the level of customer
satisfaction.
Price
The price of the items on the menu can also greatly influence
customers because price has the capability of attracting or
repelling them (Monroe, 1989), especially since price
Customer satisfaction in the restaurant industry
Syed Saad Andaleeb and Carolyn Conway
Journal of Services Marketing
Volume 20 · Number 1 · 2006 · 3 –11
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