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Chapter 2

DESIGN AND METHODOLOGY

This chapter determines the influence of customer

satisfaction on customer loyalty of Beanstalk cafe,

detailed information regarding the research design and

methodology, population and locale of the study, data

gathering tools and procedures and finally the treatment of

the data that was used in the study.

Research Design and Methodology

The researchers used descriptive survey method since

the researchers need to gather relevant information from

the customers of Beanstalk through questionnaires to

further evaluate the level of customer satisfaction as well

as customer loyalty of Beanstalk cafe.

Population and Locale of the Study

The researchers gathered information from the sample

size of Beanstalk customers located at 2nd floor of City

Center Building Middle Session Road Baguio City. According

to Beanstalks manager there were estimated 200 average

customers per day who buys their products and services.


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Purposive sampling was used to derive a sample size

from the average number of customers of Beanstalk caf. The

researchers referred to other researches including an

existing study Experiential Perspective and Purchase

Intent of Online customers from the graduate school to

arrive at 200 respondents as the representative of the

overall number of customers of Beanstalk caf per day.

Data Gathering Tool

The data gathering tool used by the researchers was

the questionnaire analysis based from the undergraduate

school research entitled Level of Breadtalk Customers

Satisfaction with minimal revisions and finalized with the

help of our research adviser.

The questionnaire consists of 2 parts. The first set

of questionnaire consists of statements that answer the

statement of the problem number one regarding the customer

satisfaction of beanstalk. Statement one (1) to 10 refers

to questions regarding service quality of beanstalk,

statement number 11 to 16 refers to product quality of

beanstalk and the last statements number 17 to 22 refers to

the price satisfaction of beanstalk cafe.


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On the other hand 2nd set of questionnaires sought to

answer statement of the problem number two regarding the

customer loyalty of Beanstalk caf.

In the first set of the questionnaire, statement one

(1) to 10 are questions regarding service quality of

Beanstalk, statement number 11 to 16 refers to product

quality of beanstalk and the last 17 to 22 statements

refers to the price satisfaction of beanstalk cafe.

Data Gathering Procedure

The major source of data for this study was from the

administered questionnaires to the customers of Beanstalk

cafe.

To test the content validity of the questionnaires,

the researchers conducted a pre-test wherein 10

questionnaires were administered to customers of Beanstalk.

The researchers As a result, the respondents easily

understood the questionnaires administered and identified

what it is all about.

The distribution of questionnaire was done by

assigning each member of the group to approach each

Beanstalk cafe customers inside the cafe and inside UC who


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29

have been to Beanstalk cafe in order to maximize the time

and to access our target effectively.

The distribution of the questionnaires was done 1st

and 2nd week of October 2017.

Treatment of Data

In determining the level of customer satisfaction,

customer loyalty and the influence of customer satisfaction

on customer loyalty of beanstalk cafe, the gathered data

were tabulated, tallied, interpreted using frequency

distribution, weighted mean, and correlation.

The weighted mean was used to determine the level of

customer satisfaction to customer loyalty. This was the

appropriate descriptive statistical tool because the

researchers used a 4- point Likert scale type of

questionnaire to gather data.

The researchers carefully tabulated, analyzed, and

interpreted the data gathered according to the objective of

the study. The results were interpreted using Likert Scale.

The Weighted Mean is the statistical tool used to treat the

data gathered through the distribution of questionnaires.

To determine the relationship of customer satisfaction on

customer loyalty the researchers used correlation.


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The weighted average of customer satisfaction and

customer loyalty of each respondent were calculated through

excel to determine the association between customer

satisfaction and customer loyalty.

Table 1 presents the Likert Scale and its interpretation

used to determine the level of customer satisfaction of

Beanstalk.

Table 1

Customer Satisfaction

Scale Scale Interpretation Mean Range


Description
4 Strongly Very high 3.26-4.00
Agree
3 Agree High 2.51-3.25
2 Somewhat Low 1.76-2.50
Agree
1 Disagree Very low 1.00-1.75

Table 2 presents the 4-point Likert Scale to interpret

results of the data gathered for the questions about the

level of customer loyalty.


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Table 2

Customer Loyalty

Scale Scale Interpretation Empirical Mean Range


Description
Meaning

4 Strongly Very high Loyalty 3.26-4.00


Agree

3 Agree High Latent loyalty 2.51-3.25

Low
2 Somewhat Spurious 1.76-2.50
Agree loyalty

1 Disagree Very low No loyalty 1.00-1.75

Formula of Pearson Correlation


n(xy)-(x)(y)
r=
[x2 -(x)2 ]{ny2 -(y)2

Solution

22(245.76)-(69.37)(77.91)
r=
[22(219.27)-(69.37)2 ]{22(275.94)-(77.91)2

r=.727

The correlation coefficients indicate that there is a

strong positive linear relationship between the customer

satisfaction and customer loyalty (r=0.727).


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Correlation is an effect size and it can verbally

describe the strength of the correlation using the guide

that Evans (1996) suggests for the absolute value of r.

Table 3

Scale for Pearson Correlation

Scale (Positive / Negative) Interpretation

.00 - .19 / (.00 - .19) None

.20 - .39 / (.20 - .39) Negligible

.40 - .59 / (.40 - .59) Moderate

.60 - .79 / (.60 - .79) High

.80 1.0 / (.80 1.0) very High

Based from the tabulated data and results of the

Pearson Correlation the survey garnered .36 rating which

indicates Negligible as result. This contrasts the

results garnered from the individual rating of the Customer

Satisfaction and Customer Loyalty.

In addition, a positive correlation coefficient means

that as variable 1 increases, variable 2 increases

(Statisticalconcepts 2017). In this case, if the level of


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customer satisfaction increases, the level of customer

loyalty also increases.

Studies found a positive relationship between customer

satisfaction and customer loyalty (Anderson and Mittal,

2000; Streukens and Ruyter, 2004) and revealed that

customer satisfaction also impacts the main pointers of

customer loyalty (Kandampully and Suhartanto, 2003; Lin and

Wang, 2006; Mittal and Kamakura, 2001).

In totality, customer satisfaction greatly affects

customer loyalty with the three bases: customer service,

product quality and price. Whereas, significant findings

were the relationship between the proper hygiene of both

customer satisfaction and customer loyalty. As well as the

accommodation as the least weighted mean.

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