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Effect of Consumer Perception on Consumer Satisfaction: Restaurant Industry

By: Chin Jin Wen, Lim You Sheng, Oon Sze Yee and Teh Li Xing

Sunway University, Malaysia

1.0 INTRODUCTION

In general, consumer satisfaction indicates how far the output of a company meets or exceeds

customer’s expectation (Doyle, 2016). Patrons are often satisfied if the merchandise and services

successfully achieve or surpass their anticipation. Consumer satisfaction has been a primary concern

to restaurant owners due to its remarkable influence in customers’ retention, commendable reviews

and customers’ devotion (Ryu and Han, 2010, p.311). In order to survive aggressive competition

among restaurants, it is crucial for restaurateurs to attain consumer satisfaction. Hence, a clear

comprehension on the factors affecting consumer satisfaction is imperative (Iglesias and Guillén,

2004, p.377).

To evaluate consumer satisfaction, consumer perception is found to be a fundamental measure.

Customers are often pleased with their purchases when they are impressed by the goods or services.

Consumer perception is not only affected by the product itself, but also the process of obtaining or

purchasing it and the interactions that happen during the process. Thus, firms must be ready to study

the complete procedure of interaction from customers’ point of view from time to time as consumer

perception is constantly changing. For instance, when customers are constantly exposed to certain

products and they become more experienced, they will start revising the quality, value and price

fairness of those products. This is due to the fact that they incorporate practical knowledge gained

through personal involvement instead of initial judgement in their assessment of the products

(themanager.org, 2015). To further examine the relationship between consumer perception and

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consumer satisfaction, this paper provides an insight into the effect of consumer perception of quality,

value and price fairness on consumer satisfaction in restaurants.

2.0 Consumer Perception of Quality

Consumer perception of quality is closely related to consumer satisfaction. In several studies, the

authors examine the effect of customers’ perceived quality on their satisfaction level. Research

affirms that customer satisfaction is predominantly determined by customers’ perceived food, service

and environment quality (Djekic, et al., 2016, p.837; Aidin Namin, 2017, p.78; Ryu and Jang, 2007,

p.69).

2.1 Food Quality

Food quality can be defined as the level of greatness which comprises nutritional content, taste and

appearance (Potter and Hotchkiss, 1995, p.90). Firstly, there are evidences of connection between

food quality and customer satisfaction, showing that freshly served food are favoured by customers

because it is perceived to be healthy (Intan Maizura Abd Rashid, et al., 2016, p.792; Mohd Rizaimy

Shaharudin, Suhardi Wan Mansor and Shamsul Jamel Elias, 2011, p.205). According to Namkung

and Jang (2007), customers often demand for healthy and nutritious food which meet their health

requirements. Therefore, healthy food options significantly rises consumer satisfaction. This is

supported by the findings of Aidin Namin (2017, p.78) which state that nutritious and diversified

menu are essential to satisfy the needs of customers.

Furthermore, Djekic, et al. (2016, p.829), Namkung and Jang (2007, p.402) attest that customer

satisfaction is largely affected by the presentation and taste of food. It is found that many customers

consider the flavour and appearance of food before making purchases (Mohd Rizaimy Shaharudin,
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Suhardi Wan Mansor and Shamsul Jamel Elias, 2011). When the food looks appealing and tastes

good, customers are prone to perceive a better food quality. In addition, the significance of food

quality may differ across segments. For example, posh dining restaurants might pay higher attention

to attractive appearance and taste of food compared to fast food restaurants (Namkung and Jang, 2007,

p.404).

2.2 Service Quality

The way waiters or waitresses interact with customers affects the customer judgement on service

quality (Tucci and Talaga, 2008, p.10). Babakus, Bienstock and Scotter (2004, p.727) affirm that

customer satisfaction is primarily affected by perceived service quality. In this section, the researchers

focus on how consumers perceive service quality in terms of reliability, responsiveness, empathy and

assurance can increase their contentment.

When restaurant staffs are dependable, quick-responding, understanding and confidence-inducing,

consumers perceived service quality may improve. Oxford University Press (2017) defines the term

‘reliability’ as the characteristic or reality of being trustworthy. Reliability can be enhanced when

restaurant employees are able to notice every detail and attend to consumers’ requests. By fulfilling

their demand accurately, customers will be delighted and satisfied with the services provided (Aidin

Namin, 2017; Liu and Jang, 2009a, p.346). Next, responsiveness measures how fast and how accurate

the staffs are when providing services (Aidin Namin, 2017, p.79). Customers’ perceived service

quality may be improved if their demand for quick service is fulfilled, and thus leads to satisfaction.

This is discovered in a study conducted by Djekic, et al. (2016, p.837) which demonstrates that

respondents from UK pay close attention to prompt service in restaurants. Moving on to the next

determinant, empathy requires restaurant staffs to provide individualised attention to customers and

cater to their needs from time to time. By ensuring that restaurant staffs reflect on customers’
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feedbacks, consumers’ demands can be identified and this may strengthen perceived service quality

(Aidin Namin, 2017, p.79). Assurance follows as the next determinant of perceived service quality,

where knowledgable staffs, courteous communication, supply of comprehensible information, and

trust establishment between staffs and customers enable customers to feel comfortable and safe (Lee,

et al., 2005, p.43; Aidin Namin, 2017, p.79).

2.3 Environment Quality

Although food and service quality are significant criteria in determining customer satisfaction, they

are not evaluated until customers experience them. On the contrary, environmental factors like

atmosphere and aesthetics provide obvious indications to customer and directly affect their first

impression. Thus, environment quality cannot be neglected (Ryu and Han, 2010, p.324). Greater

backing was revealed in Jalal Hanaysya’s (2016a, p.37) study which asserts that favourable

perceptions towards the physical environment of a restaurant will lead to greater customer satisfaction.

When investigating the ways customers perceive physical environment, Ryu and Jang (2007, p.69)

found that atmosphere of a restaurant is the most noteworthy aspect. The atmosphere of a restaurant

is crucial to induce positive feelings among customers and encourage consumer retention (Liu and

Jang, 2009b, p.502). Besides, attractive decorations in a restaurant is also regarded as a benchmark

of quality. For instance, the theme and decor of some theme restaurants have became their main

attribute to attract customers (Tucci and Talaga, 2008, p.9). On top of that, aesthetics also play an

important role to set apart a restaurant from its rivals. Different types of visual components such as

colour, paintings and greeneries will generate a pleasant dining environment and maximize customers’

satisfaction (Ryu and Jang, 2007, p.69).

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3.0 Consumer Perception of Value

A research by Ok, Choi and Hyum (2011, p.7) proclaims that perceived value is a crucial determinant

of customer satisfaction. Customers do not only observe the food, service and environmental qualities,

but also notice the benefits a brand can bring to the society. Consumers generally perceive the value

of goods or services through hedonic and utilitarian values as well as corporate social responsibility

(CSR).

3.1 Hedonic and Utilitarian Values

According to Ryu, Han and Jang (2010, p.417), the emotional states of restaurant customers are

affected by two different aspects which are pleasure-oriented hedonic value and goal-oriented

utilitarian value. Utilitarian values reflect fulfillment achieved through accomplishment of functional

tasks and are emphasised during important purchases. On the other hand, hedonic values reflect the

gratification obtained from sensory pleasure and are emphasised during trivial purchases (Ryu, Han

and Jang, 2010).

Perceived value of customers can be improved by high hedonic and utilitarian values, thereby leading

to higher degree of consumer satisfaction. Hence, restaurant owners have to understand customers’

perceived hedonic and utilitarian values in order to take relevant actions to enhance customer

fulfillment. For instance, when hedonic and utilitarian advantages are incorporated in restaurants’

advertisements, customers’ desire to frequent a restaurant increases (Mehran Nejati and Parnia

Parakhodi Moghaddam, 2013; Ryu, Han and Jang, 2010, p.427).

Furthermore, there is relative difference between hedonic and utilitarian values across various

circumstances (Ryu, Han and Jang, 2010, p.417). For example, a study by Basaran and Buyukyilmaz
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(2015) found that hedonic aspects are more influential in fast casual restaurants whereas utilitarian

aspects play a more important role in fast food restaurants. This is because fast-casual restaurant

customers not only desire to satiate their appetites, but also seek pleasure during dining experience

while fast food restaurant customers usually wish to obtain their food in an efficient and time saving

manner instead of stressing on sensory pleasure.

3.2 Corporate Social Responsibility

Law (2016) defines Corporate Social Responsibility (CSR) as a concept regarding a company’s role

in preserving the environment, being ethical in trades and ensuring unbiased treatment of staffs, rather

than just adhering the law. Consumer perceived value can be generated through CSR activities as

they place a higher value on firms practising CSR activities. Lee and Shin (2010, p.194) also reported

that consumers’ consciousness on CSR activities and the objective of their purchase are

interdependent. Consumers tend to buy from well-behaved companies with considerable amount of

CSR activities. This is reinforced by a study which demonstrates that through CSR activities such as

offering safe and environmental-friendly products, customers’ demands can be fulfilled (Xie, et al.,

2017, p.37). For instance, consumers favour products that are produced based on approaches which

preserves the environment, as they feel better when purchasing eco-friendly products (Pickett-Baker

and Ozaki, 2008, p.289).

A considerable amount of studies by Pelsmacker, Driesen and Rayp (2005) displayed that consumers

take moral issues into account when evaluating goods or services. The article “Valuing the Customer”

in Corporate Social Responsibility Magazine (cited in Singh, Iglesias and Batista-Foguet, 2012, p.541)

provided a statistic which shows that 7 out of 10 consumers emphasize on CSR when making the

choice to purchase, and 37 percent of them has purchased ethical product during the past 3 years.

Another evidence is illustrated by certified organic restaurants which are recognised to have a higher
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level of CSR. When organic options are provided by a restaurant, the customers will perceive the

restaurant to be socially responsible and will visit the restaurant more often (Hanks and Mattila, 2016,

p.116).

4.0 Consumer Perception on Price Fairness

Researchers have verified that price transparency and price-value-ratio are the two main determinants

in forming the perception of price fairness, which is an important measure to determine consumer

satisfaction (Ferguson and Ellen, 2013, p.409; Aidin Namin, 2017, p.78; Jalal Hanaysha, 2016a, p.37).

As price essentially affects consumers’ decisions when making purchases, it gives a huge impact on

consumer satisfaction (Herrmann, et al., 2007). In fact, several studies conclude that perceived price

fairness directly and positively impact consumer satisfaction (Jalal Hanaysha, 2016b, p.318). When

they perceive the price as sensible, they are likely to acquire the products or services repetitively (Li

and Chaipoopirutana, 2014, p.127).

4.1 Price Transparency

Price transparency is defined as a case where both buyers and sellers are able to see the whole picture

and are fully aware of all aspects of price for any goods or services purchased or provided (Doyle,

2016). In general, consumers are not informed of the costs or other related particulars firms used to

set the price (Carter and Curry, 2010, p.762). Nevertheless, Ferguson and Ellen (2013, p.409)

proclaim that transparent pricing should be adopted to allow consumers to be aware of the change in

price.

A research by Ferguson and Ellen (2013, p.409) shows that price transparency is one of the factors

affecting the customers’ perceived price fairness. Consumers view the price as fair when the prices
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are genuinely transparent and this will stimulate an increase in their preference for one product. Carter

and Curry (2010, p.771) reported that consumers are willing to purchase a product which is price-

transparent despite the fact that its price is higher, because they acquire benefit from the information

of price increase. Precisely, consumer perceptions on price fairness is substantially influenced by

whether the sellers notify the customers about the increase in price and the reasons behind it. There

is a positive impact on perceived price fairness when declaration of price increase is made by the

firms instead of third party. An announcement of a change in price, even if the price increase is minor,

followed by at least a minimal explanation will lead to a rise in perceived price fairness (Ferguson

and Ellen, 2013, p.409). It is also found that how consumers act in making choices as well as the

measurement of their welfare and satisfaction are adjusted consistently by transparent prices (Carter

and Curry, 2010, p.759).

4.2 Price-Value Ratio

As price-value ratio is one of the indicators to judge the consumers’ perceived price fairness, it

obliquely affects the level of consumer satisfaction to a certain extent. When it comes to selecting

their preferred brand, restaurant customers have an inclination to compare price and quality between

products of different brands so they can evaluate the perceived value and deduce how satisfied they

are (Jalal Hanaysha, 2016b, p.318; Jalal Hanaysha, 2016a, p.37). According to Hermann, et al. (2007,

p.55), customers usually regard the price offer as equitable when they view the price offer as meeting

or going beyond their expected gain from the purchases. For example, if higher price is incurred on

larger portion of food whereas lower price is offered for bulk purchase or set menus, customers will

feel that the price is fair because they pay less but obtain more (Aidin Namin, 2017, p.78). Thus,

restaurants which provide competitive goods and services at a price that matches the value it offers

are able to meet customer satisfaction as consumers favour brands which deliver greater benefits to

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them (Jalal Hanaysha, 2016b, p.318). These studies indirectly affirmed the notable relationship

between perceived price-value ratio and customer gratification in restaurant.

5.0 CONCLUSION

In conclusion, the researchers found that consumers’ perceived quality, value and price fairness have

had a positive influence on the degree of satisfaction among restaurant customers. Consumer

satisfaction is inevitably the most fundamental underpinning for good performances of restaurants.

Hence, it is crucial for restaurant owners to devise pragmatic solutions to stimulate positive consumer

perceptions in order to have an ever-growing restaurant business. When examining how consumer

satisfaction is affected by consumer perceptions, a more thorough exploration is not feasible due to

time constraint. For example, this research primarily focused on the restaurant industry. Therefore,

advanced investigations should be carried out to provide an in-depth analysis on different sectors of

the industry such as fast-food, fine-dining and quick-casual restaurants. It is also important to take

hospitality industries into account in the future research. Moreover, this study merely looked into

factors influencing consumer satisfaction in terms of consumer perception. In order to broaden the

generalizability and assumptions, future research to provide an extensive insight into socio-cultural

aspects is suggested. On top of that, this paper investigated the effect of consumer perception in

general without taking into account the cultural difference across regions. Since consumers from

different backgrounds may focus on different criteria of a restaurant, future studies are recommended

to concentrate on the analysis of consumer perception in a specific region. To summarise, this study

concludes that consumer perception plays an important role in assessing consumer satisfaction. Thus,

restaurant owners should take consumer perception into consideration to render a satisfactory

experience for all customers.

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