Research Method Report: Customer Satisfaction in Restaurant Industry

This report presents a research proposal examining the factors influencing customer satisfaction in the restaurant industry, specifically within the context of New Zealand. It begins by establishing the research problem, highlighting the increasing competition and economic factors affecting the hospitality sector. The study aims to investigate the key elements impacting customer satisfaction, the moderating effect of cultural sensitivity, and the role of customer satisfaction in fostering loyalty. The research employs a mixed-methods approach, utilizing an explanatory research design. Data collection involves surveys and interviews with a focus on the Gisborne region, employing stratified random sampling for quantitative data and convenience sampling for qualitative data. The report outlines the data analysis techniques, including statistical methods such as SPSS and MS Excel for quantitative data, and coding for qualitative data. Ethical considerations are addressed, emphasizing anonymity and informed consent. The study acknowledges limitations, such as the sample size and geographic scope, while providing a comprehensive framework for understanding customer satisfaction in the restaurant industry and recommending strategies for improvement.

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

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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

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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)

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Image 2: Industry sales by sector
Source: (Scoop.co.nz. 2019)
Image 3: Industry sales by region
Source: (Scoop.co.nz. 2019)

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Research Significance
This makes it more important to examine and shed light on the factors affecting the
satisfaction of consumers in the industry. The study will assist to develop a thorough
knowledge and understanding of the factors having positive and negative influence on the
satisfaction of the consumers so that it provides a guiding framework for the managers to
formulate the appropriate strategy and methods to improve customer satisfaction. The
research also aims to evaluate the moderating influence of cultural sensitivity and the
arbitrating role of customer satisfaction in achieving loyalty.
Research questions
As per the research context, the purpose of the study is to contribute to developing a
model or framework for achieving better customer satisfaction for the restaurants in New
Zealand. The research aims to examine specific aspects such as factors affecting customer
satisfaction, moderating effect of cultural sensitivity and role of customer satisfaction in
achieving loyalty.
The objective of the research are as follows:
To examine and highlight the different factors necessary for achieving customer
satisfaction
To evaluate the moderating effect of cultural sensitivity on satisfaction level of
consumers
To determine the role of customer satisfaction in achieving loyalty towards a brand
To recommend suitable strategies to achieve customer satisfaction
Satisfaction Factors: What are the elements affecting the satisfaction level of the
consumers?
Cultural sensitivity: Does cultural sensitivity have moderating effect on customer
satisfaction? How does cultural sensitivity affect the satisfaction level of consumers?
Customer Loyalty: What is the role of customer satisfaction in improving loyalty towards
the consumers?
Research Design
Research design is the overall plan for gathering data and evaluating it to fulfil the
research objective. Research design can also be used to choose between quantitative and

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qualitative research methods (Schoonenboom & Johnson, 2017). Saunders research onion has
been integrated into the methodology for provide a link to the methods used and developing
an appropriate research method (Saunders et al., 2015). The research has chosen the
explanatory research to examine the association among cultural sensitivity, customer
satisfaction and customer loyalty. The research uses a mixed method analysis to evaluate the
collected data. The research will choose a pragmatist philosophical view and use a deductive
approach to use methods based on each of the question. A sequential explanatory research
design will be used where initially quantitative analysis will be performed and then the
qualitative analysis will be performed (Schoonenboom & Johnson, 2017). The qualitative
analysis will be used to validate the results from the quantitative analysis.
In terms of study design, the research will choose to a survey and an interview to
gather data for the research. The survey method will help in identifying the factors affecting
satisfaction level of the consumers and role of cultural sensitivity in it. The qualitative study
will facilitate in gathering in depth data on the same topics for understanding the valid
reasons behind each of these findings.
Sampling and Data Collection
Sampling chooses sample populace from the whole populace relevant to the scope of
the research. It facilitates in reducing the overall cost and timeframe (Palinkas et al., 2015).
The target population for the quantitative and qualitative study are the population in New
Zealand. The sampling frame has narrowed down the populace to the consumers in Gisborne
region. The next step is selecting the appropriate sample size. Cochran formula has been used
to select the sample size (Shahpouri, Namdari & Abedi, 2016). The population size of
Gisborne is 37,200, the confidence interval is 95% and the margin of error is considered as
5%. As per the formula, the appropriate sample size for the research is 381 for the
quantitative research and for the qualitative research, the study has chosen 5 respondents.
Image 4: Cochran formula

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Source: (Shahpouri, Namdari & Abedi, 2016)
The next part is choosing the sampling technique appropriate to the study. Stratified
random sampling will be used to collect data by dividing the population into strata and
choosing elements randomly. The data for the qualitative analysis will be chosen using a
convenience sampling to choose people that are easy to access.
The research will use a primary data collection method where both quantitative and
qualitative data will be collected (Cleary, Horsfall & Hayter, 2014). The quantitative data will
use a close ended survey questionnaire developed on 5 point Likert scale to examine the
cause and effect association between the independent and the dependent variable. The
qualitative data will be collected from open ended questions to gather in depth answers on the
research topic.
Data Analysis
Data analysis will be divided into two sections, qualitative and quantitative analysis.
Quantitative data will be evaluated using SPSS and MS Excel and qualitative data will be
examined using coding (Palinkas et al., 2015). The quantitative data will be represented in
tables and graphs to explain the response frequencies of each element. Cross tabulation will
be used to examine the moderating effect of cultural sensitivity on customer satisfaction and
loyalty. Correlation will be used to identify the factors significantly contributing to the
satisfaction level of the consumers.
Coding process starts by identifying the patterns within the data collected and develop
codes. This process is known as open coding and then the open codes are used to develop
association between codes (Palinkas et al., 2015). This process is known as axial coding and
these codes are responsible for linking with theories. The final step is performing selective
coding to develop themes for critical discussion. The analysis of the both these results will
be compared to validate the results.
Ethical considerations
The research will comply with all the ethical guidelines advised by the university. The
anonymity and privacy of the respondents will be protected by maintaining confidentiality
(Connelly, 2014). The research will also make sure that informed consent will be used to
ensure voluntary participation of respondents.

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Limitation
The major limitation of the research is that the study will use a sample size of 381 at
5% margin of error. The margin of error is significantly high and reduction in margin of error
to 1% would increase the sample size to 7634 and it is not possible to collect data from more
than 7000 respondents. This would increase the overall time and cost of data collection and
analysis. Moreover, as the sampling frame is limited the variety in demographics will be less
whereas collecting data from all over New Zealand would have provided better results.
Moreover, the use of mixed method design makes the overall process lengthy and time
consuming and may require more time when compared to single research design.

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References
Cleary, M., Horsfall, J., & Hayter, M. (2014). Data collection and sampling in qualitative
research: does size matter?. Journal of advanced nursing, 70(3), 473-475.
Connelly, L. M. (2014). Ethical considerations in research studies. Medsurg Nursing, 23(1),
54-56.
Palinkas, L. A., Horwitz, S. M., Green, C. A., Wisdom, J. P., Duan, N., & Hoagwood, K.
(2015). Purposeful sampling for qualitative data collection and analysis in mixed
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Sabir, R. I., Ghafoor, O., Hafeez, I., Akhtar, N., & Rehman, A. U. (2014). Factors affecting
customers satisfaction in restaurants industry in Pakistan. International Review of
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Saunders, M. N., Lewis, P., Thornhill, A., & Bristow, A. (2015). Understanding research
philosophy and approaches to theory development.
Schoonenboom, J., & Johnson, R. B. (2017). How to construct a mixed methods research
design. KZfSS Kölner Zeitschrift für Soziologie und Sozialpsychologie, 69(2), 107-
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Scoop.co.nz. (2019). Retrieved 10 September 2019, from
http://img.scoop.co.nz/media/pdfs/1809/2018_Hospitality_Report.pdf
Shahpouri, S., Namdari, K., & Abedi, A. (2016). Mediating role of work engagement in the
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