Factors Affecting Customer Satisfaction in Restaurant Industry

Running head: RESEARCH METHOD
Research Method
Name of the student
Name of the university
Author note

RESEARCH METHOD1
Topic: Critical examination of the factors affecting customer satisfaction in restaurant
industry
Introduction and purpose
The report proposes to examine the different factors influencing the satisfaction level
of the consumers in the restaurant industry. Customer satisfaction is one of the major
contributors to repeat purchasing and is necessary for managing sustainable competitive
advantage in the market. Businesses are not only required to hold on to their existing
customers but expand their consumer base and customer satisfaction plays an important part
in it (Sabir et al., 2014). The advancement of technology and globalisation have changed the
purchase behaviour of consumers. This makes it much more important to analyse the factors
contributing to the satisfaction level of the modern customers. The report proposes the scope
of the study and research design to be used for affecting gathering of information and
analysis.
Research problem and background
There has been significant increase in the overall sales for the restaurants in the
hospitality industry by a margin of 3.6% and gross sales have crossed $11 billion
(Scoop.co.nz. 2019). Moreover, in the year of 2018, the restaurant business is seen to have
experienced highest growth among all the industries with a growth rate of 5.7% (Scoop.co.nz.
2019). This signifies that majority off the consumers eat outside more often than before. This
is one of the major drivers of the restaurant industry in New Zealand and has intensified the
competition. However, the current economic growth of the country is comparatively slower
and significantly affecting the hospitality industry. The expected employment growth rate in
the industry is more than 2% which signifies the increase in demand (Scoop.co.nz. 2019).
The number of new business opening up each week seems the most astounding thing but
similarly, there are businesses closing every day. This depicts the level of competitiveness
and standards required to obtain sustainability for the companies in the industry. The
statistics show that 2700 new businesses were opened in the year of 2017 due to the closure
of other businesses and the year marked the increase in new establishment by 534
(Scoop.co.nz. 2019).
The figure below shows the industry sales have increased exponentially in the past
few years. The industry experienced the highest sales growth during the year of 2015 to 2017
with a combined increase of more than 16% (Scoop.co.nz. 2019). The second figure shows

RESEARCH METHOD2
that cafes and restaurants have seen an increase in the sales in the industry and it contributes
to the 50% of the sales in the market (Scoop.co.nz. 2019). The data indicates that there has
been an increasing in habit of eating out among the consumers in New Zealand. The
takeaway services have also increased significantly due to the introduction of home delivery
applications. Therefore, the restaurants able to perform effectively in both these markets are
expected to achieve sustainability and competitive advantage. The industry sales as per the
regions show that Auckland experiences the majority of the share and highest growth rate in
the market. This makes developing customer satisfaction a significantly tough job due to the
change in needs of the customers.
Image 1: Industry sales
Source: (Scoop.co.nz. 2019)