Impact of service quality, food quality and physical environment of fast-food restaurant on the purchasing intention of customers in New Zealand

Running head: RESEARCH PROPOSAL
Impact of service quality, food quality and physical environment of fast-food restaurant on
the purchasing intention of customers in New Zealand
Name of the Student:
Name of the University:
Author note:

1RESEARCH PROPOSAL
Impact of service quality, food quality and physical environment of fast-food restaurant on
the purchasing intention of customers
Synopsis
Fast food industry in New Zealand is growing quite rapidly in the past five years. In 2018, the
industry contributed around $3 billion to the New Zealand economy. However, it is also found
that the fast food restaurants are increasing their serving size which is harmful to health of the
people as that would lead to the problem of obesity in the coming 20 years. This research study
will explore the purchasing intention of the customers on the basis of the service quality, food
quality and physical environment of the fast food restaurants with perceived value being
mediator variable and perceived price being moderator variable. Primary and secondary data will
be collected and quantitative method of analysis will be applied to get the findings. The expected
outcome of the study will help the fast food restaurants to understand the significant factors that
could affect the purchasing intention of the customers and prioritize those to achieve faster
growth in business.

2RESEARCH PROPOSAL
1. Introduction
The fast food industry in New Zealand has flourished quite rapidly in the past five years.
As the preferences for conveniences in lifestyle have increased significantly, the demand for fast
food has increased too. At the same time, it has also been seen that the demand for healthy fast
food has increased in a much faster way than the fall in the demand for unhealthy food. The
health consciousness and awareness of people regarding maintaining a healthy diet and lifestyle
have grown in a significant manner after the easy access to internet and to capture larger target
market and retain the existing customers, the traditional fast food industry of New Zealand have
been responding to these changes in demand by expanding the product ranges. At the same time,
there are many new companies that have entered the industry offering differentiated products. As
per the report by IBIS World, the revenue of the fast food industry of New Zealand is expected
to grow at an annual rate of 5.4% over the next five years through 2018-19 to $2.6 billion. The
current revenue of the industry is around $3 billion and the industry supports around 26,544
people through employment and total number of businesses is around 5,768 including both large
and small businesses (Ibisworld.com.au, 2019). However, in a recent study, it has been found
that the fast food restaurants in New Zealand are increasing their serving size and that is
increasing the level of sodium and sugar in the food items, which could lead to increase in
obesity among the people consuming too much of fast food (NZ Herald, 2018). If the trend
continues, around 2 million New Zealanders will suffer from obesity in the next 20 years. The
price of the fast food in general has been increasing too. As people’s awareness about healthy
food consumption is increasing, the purchasing intention for fast food will decrease and that
would affect the growth of this industry. Moreover, service quality and physical environment of
the fast food restaurants are also important factors that influence the purchase intention of the

3RESEARCH PROPOSAL
customers and hence, the restaurants are focusing on having improved and clean atmosphere and
décor and better customer service. Thus, this research study will explore the impact of service
quality, food quality and physical environment of the fast food restaurant industry in New
Zealand on the purchasing intention of the consumers, while perceived price and perceived value
play the role of moderator and mediator variable respectively.
Perceived price of the fast food items help the businesses to stay competitive in the
market and draw customers, while perceived value of the food and service quality influences the
consumers to choose one type of fast food or the restaurant over the other. Thus, these two
variables are important influential factors for growth of the fast food restaurant industry in New
Zealand.
1.1 Research aim and objectives
The aim of this research project to is investigate and evaluate the impact of food and
service quality and physical environment of the fast food restaurants in New Zealand on the
purchasing intention of the consumers, perceived value being the mediator variable and
perceived price being the moderator variable. Through the research, an overview of the industry
will be provided along with an insight of the issues explored, which will help to provide
recommendations to the industry to achieve growth by providing better food and service to the
customers.
The research objectives are:
 To explore the factors that affect the purchasing intention of the consumers of the fast
food industry
 To evaluate the growth and problem factors of the fast food industry of New Zealand

4RESEARCH PROPOSAL
 To analyze the opportunities and threats of the fast food industry in New Zealand
 To recommend ways to the fast food industry of New Zealand to improve the purchasing
intention of the consumers
1.2 Research questions
1. What are the factors that affect the consumer’s purchasing intention significantly
regarding the purchase of fast food?
2. What is the trend of performance of the fast food industry of New Zealand?
3. What are the opportunities and threat factors for the fast food industry of New Zealand?
4. How the fast food restaurants in New Zealand can improve its performance by
influencing the purchasing intention of the consumers?
1.3 Research hypotheses
H1: food quality of the fast food restaurants in New Zealand does not affect the purchasing
intention of the consumers
H2: service quality in the fast food restaurants in New Zealand does not affect the purchasing
intention of the consumers
H3: physical environment in the fast food restaurants in New Zealand does not affect the
purchasing intention of the consumers
1.4 Research variables
As seen from the research hypotheses above, there are 3 independent variables (IV) and 1
dependent variable (DV). Food quality, service quality and physical environment are the three
independent variables that will be explored in this study, and purchasing intention of the

5RESEARCH PROPOSAL
consumers is the dependent variable. The relationship between these variables will be studied in
this research.
Along with these above variables, there are two other variables which will be considered
for the study, one moderator variable and one mediator variable. While moderator variable
determines the strength of the relationship between the research variables, the mediator variable
explains the existence of the relationship between the research variables (Namazi and Namazi,
2016). In this case, perceived price is the moderator variable as it helps to determine the strength
of the relationship, that is, the impact of the independent variables on the dependent variable,
while on the other hand, perceived value of the consumers help to create a relationship with the
fast food restaurants in New Zealand.
1.5 Significance of the research
There are two implications of this research study. Firstly, the study will make significant
contribution in the academic world by providing in-depth insight about the role played by the
research variables, such as, food quality, service quality and physical environment of the
restaurants on the purchasing intention of the consumers in the context of the fast food industry
of New Zealand. It will also evaluate the impact of the mediator and moderator variable on the
dependent variable. This study will provide an insight by combining different factors together.
On the other hand, the study has corporate implications too. The fast food industry of New
Zealand consists of various local as well as global fast food chains and the trend in purchase
intention varies for different brands and type of foods. However, the basic factors are almost
same for all types of food categories under the fast food types. Thus, the outcome of this study
will help the fast food industry to explore the opportunities and address the challenges to
influence the purchasing decision of the consumers and grow the business.