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The relationship of Marketing in Customer Satisfaction

in Selected Leading Coffee Shops in Metro Manila

on the Perception of Generation Y

A Research

Presented to the

Institute of Tourism and Hotel Management

Far Eastern University

Sampaloc, Manila

In Partial Fulfillment

Of the Requirements for the Degree of

Bachelor of Science in Hotel and Restaurant Management

Alvarez, Joshua

Avellana, Gianna Dominique

Banzon, Patricia Nicole

Casero, Geerho Ivan

Lopez, Carlo

Manuel, Aira Pamela

April 2018
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TABLE OF CONTENTS

Chapter 1 Introduction
1.1 Background of the Study
1.2 Problem Statement
1.3 Research Objectives
1.4 Hypothesis
1.5 Theoretical Framework
1.6 Conceptual Framework
1.7 Significance of the Study
1.8 Scope and Limitation of the Study
1.9 Definition of Terms

Chapter 2 Literature Review


2.1 International and Philippine Chosen Industry
2.2 Variable 1
2.3 Variable 2
2.4 Synthesis

Chapter 3 Methodology
3.1 Research Design
3.2 Sampling Design
3.3 Data Collection Method
3.4 Research Instrument
3.5 Statistical Treatment of Data

Chapter 4 Data Presentation and Analysis


4.1 Research Objective 1
4.2 Research Objective 2
4.3 Research Objective 3
4.4 Research Objective 4
4.5 Research Objective 5

Chapter 5 Conclusion and Recommendation


5.1 Conclusion
5.2 Recommendation

Appendices
References
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LIST OF TABLES

LIST OF FIGURES

APPENDICES

Note: use the header in all the pages except for the:

cover page I (not seen)

approval sheet ii (not seen)

certificate of originality iii (not seen)

English editing certificate iv (not seen)

adviser’s endorsement form v (not seen)

acknowledgment vi

table of contents vii

abstract viii

Chapter I 9 (all chapter pages not seen; succeeding pages with page

number)

And so on…
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ABSTRACT

The relationship of marketing in customer satisfaction of the selected leading coffee

shops in Manila plays an essential role in the hotel and restaurant industry. Since the

hotel and restaurant industry relies on its market and consumer satisfaction. We

researchers used the descriptive narrative – quantitative method of research. As this

method of research aims to develop and have the data from the respondents in order to

further develop and form the conclusion and recommendation precisely. Also to gather as

much direct and related information about the topic which affects the relative evaluation.

The researchers will be conducting a survey for the generation Y for them to evaluate

their preferences about the products and marketing strategies that result to customer

satisfaction. The researchers used the purposive sampling technique wherein, in a certain

group or cluster a random choice of people are given the chance to be separately and

equally chosen. And as it shows there is a significant relationship between marketing in

customer satisfaction on the perception of generation Y.

In using the different ways of marketing, it appears that most of the surveyed respondents

agree that marketing in customer satisfaction affect their perception in choosing a coffee

shop in Metro Manila by identifying and measuring their different relations and

preferences.

Keywords: Marketing, Customer Satisfaction, Generation Y, Coffee shops, Metro Manila


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CHAPTER 1

INTRODUCTION

This chapter discusses what the research is all about. It covers the background of

the study, problem statement, conceptual and hypotheses. The significance of the study and

the scope and limitations of the research. Furthermore, the researchers will also have the

definition of terms for easier understanding and proper context of a certain issue.

Background of the Study

Customer satisfaction assumes an essential part in the accomplishment of each

business association whether it is intended to carry an item or a service. Each business

needs to hold its present customers as well as to grow customer's base essentially and it is

possible just when target customer is completely fulfilled from the company on a few

parameters (Irfan, 2014).

In a business such as coffee shops satisfying the customer’s taste is really important.

This may involve the suppression of characteristics and attitude of one’s choice. The

researchers will have a study to be able to understand how one customer gets satisfied with

the different strategies being done by the different leading brand of coffee shops in Metro

Manila. Furthermore, how does Marketing strategies help in the customer’s behavior

through the manner of influences they get with the establishments choice of promotions

and advertisements.

Satisfying the customer's taste is really important in a coffee business. It may

involve in expressing the characteristics and the attitude of one's choice. The researchers

are going to have a study to understand and to recognize the different satisfaction of the
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coffees’ taste and to come up with the different strategies in the different leading brand of

a coffee shop in Metro Manila. The behavior of the customers is based on their manner of

choosing the influences on how will they gratify themselves to the taste of those leading

coffee shops.

The generations Y always have to change wants and needs, depending also on the

trend. They might look for coffee shops that offer quality food/drinks, ambiance or the

other unique services offered by the coffee shop. These study intents to know the qualities

of the leading coffee shops and the measurement of their sales that is also connected to the

satisfaction of their customers.

The Starbucks™ Espresso Organization has in excess of 21,000 stores in 65 nations

and is the chief roaster and retailer of forte espresso on the planet. The new pattern in every

business is to have a solid brand and serve clients extraordinarily. Customer satisfaction is

not really important yet the customer experience, about the product or services, which

conveys a great deal of weight in customers' ultimate conclusion making (et al Seikola

2015).

Moreover, the satisfaction of customers is based on how was their experiences aim

by providing the products and services. Starbucks is also one of the companies or

businesses that provides quality services when it comes to coffee.

The improvement of business exercises turned out to be progressively worldwide

as various firms extend their activities. In a hotel industry, developments are open and there

was a huge change in way of life of individuals. From the different parts of our country,

numerous coffee shops expanded an existing coffee shops establishments had been
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popularized in various areas like Locale IV where Batangas was exceptionally prominent

to be the key maker of the said Kapeng Barako (Barlan Jr, 2013).

Most of this generation, generation Y prefer a brand of coffee shops that have been

existing the most, it is mostly based on popularity of the coffee shops like Tim Hortons,

Seattle’s Best Coffee, Costa Coffee, Starbucks, Dunkin Donut, and Coffee Bean & Tea

Leaf thinking that why the modern generation may prefer this either it really affects them

by the quality.

Developing customer loyalty is regularly considered as the key driver to the

business for long-haul feasible showcasing success(Gaurav, 2015).The relationship of

Marketing is the most powerful key to develop customer loyalty, interaction, and

engagement with customers. Consumer behavior is concerned on one's knowledge in

studying, analysis and understanding, seeking to describe the behavior of consumers based

on their choice of food, drink, place, and experience.

Nature of items is difficult to accomplish, however through legitimate preparing to

make a comparative level of espresso, wide tuning into customer's remarks from social

media; it could build the quality of the cafe's. Each store has its mystery formula as their

power, so espresso turns out with marginally unique taste, if the cafes bring the taste which

the customers will be more attractive then it may ready to contend with the chain of coffee

shops (WK Liang, 2012).

In social media it is one example and a sign by advertising a coffee shop; whenever

someone saw a post of their friend in social media like Facebook, Twitter and Instagram

and that friend get there and post some pictures with an attractive appearance they would

also feel an excitement to go to that place. Lastly the most important is the taste, if the
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coffee is in good quality without worrying about using worthy and slightly expensive

products it may become a word of mouth of customers, they would love the product, they

will always come back and bring more friends.

Problem Statement

The researchers aim to know the relation in marketing through the satisfaction of

the respondents regarding their selection of taste in leading coffee shops.

Each age has its own particular attributes. They have been influenced by the

progressions of the world and the other way around they changed the world. Customer

inspirations and purchase engagement frequently lie beneath the surface of age; we could

pick great conception by thinking about generational associates. Generational companions

are contained individuals who are conceived a specific period, and whose life courses relate

to each other (Ordun, 2015).

Generational companion promoting has turned into a helpful device in separating

markets since partner individuals share comparative esteems and generational associates

have dissimilar encounters, which impact their qualities, desire and shopping conduct

(Parment, 2013).

Cafe's continue to become generally liked and have an interesting level of requests

in the country because of higher obtaining power, expanded social exercises involve in and

also solid espresso drinking society (Euromonitor Universal, 2013).

− This study aims to identify the Generation Y’s perception of relating the

marketing in customer satisfaction on selected leading coffee shops in

Metro Manila.

Research Objectives
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This study aims to:

1. Know the demographic profile of the respondents in terms of

− Age

− Gender

− Daily Allowance

− Educational Attainment

2. Know the effects of marketing strategies on customer satisfaction.

3. Know the respondent’s satisfaction with products in selected coffee shops.

4. Identify the significant relationship between marketing and customer

satisfaction in the perception of Generation Y in selected coffee shops in Metro

Manila.

Hypothesis

Based on the research objectives mentioned, the researchers formulated the

following null hypotheses:

Ho1: There is no significant relationship in the perception of generation Y at the

leading coffee shops in metro manila.

Ho2: There is no significant relationship in the marketing strategy of leading coffee

shop in Metro Manila.

Ho3: There is no significant relationship in the satisfaction of the customer in

leading coffee shop in Metro Manila.


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Theoretical Framework

SEM Model

Customer Satisfaction

Corporate Brand Customer Loyalty


Image

(Yu-Te-Tu, 2012)

The Structural Equation Modeling is a quantitative research technique that can also

incorporate qualitative methods. SEM is used to show the informal relationships between

variables (Devault, 2017).

According to (Singh, 2013) customer satisfaction is a measure of how products and

services supplied by a company by meeting or surpassing meet the customer’s expectation.

Customer satisfaction is one of the most core marketing priorities since it is a prerequisite

for customer loyalty, such as repeat sales and positive word of mouth.

According to (Chin-Mei, 2012) corporate brand image significantly affects customer

satisfaction and customer loyalty, and customer satisfaction has a strong impact on

customer loyalty for the sample.


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Conceptual Framework

Generation Y

Ho1 Ho2

Ho3
Assessment Customer
of Marketing Satisfaction

V1: Generation Y

- They are the echo boomers or also called as the millenniums.

- Generation Y is estimated to be 71 million as of 2017.

- As of 2018, the age of generation y is ranging from 24 to 36.

- The current occupation of generation y is varied as studying or working.

V2: Relationship of Marketing

- Marketing strategies are the reason why generation Y knows the current trends.

- Marketing is the first step to attain customer satisfaction.

- Marketing can be done and improved to reach a wider audience.

V3: Customer Satisfaction

- Customer satisfaction is attained with the help of marketing.

- Customer satisfaction is present when the consumers are pleased.

- Customer satisfaction is the way to determine success in a business.


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The Significance of the Study

To the Coffee Industry

This study will be helpful to the business owners of Coffee shop

industry around Metro Manila because the finding of this study can give

them an understanding of the importance of Marketing to gain customer

satisfaction.

To the Academy

The instructors will benefit this study and will get information about

the relationship between customer satisfaction and marketing strategy and

this study will also give them some guidelines for their research.

To the Students

For the students who will be conducting a research similar to this

study will get information about the relationship of marketing in customer

satisfaction.

To the Researchers

The researchers aim to provide information about how marketing

strategy may affect the customer satisfaction so that they can adapt and

implement the data shown in this study for other related industries.
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To the Future Researchers

For the future researchers who will be having a similar study about

coffee shops and marketing in customer satisfaction, that will benefit and

this study will serve as a guide for them to have a good output.

Scope and Limitation of the Study

The focus of this study is to know the relationship of marketing in customer

satisfaction in selected leading coffee shops in Metro Manila on the perception of

generation Y. The depth of understanding the results of this survey will help the

researchers; this will also be determined from the data that will be gathered in this study.

The limitations of this study will be the students, young professionals, and workers.

The course of this study and gathering of data will be done in the month of March, in the

year of 2018. The possible respondents in this research are as follows: students, workers,

group of friends that go to coffee shops and other respondents.

Definition of Terms (arrange alphabetically)

Definition (remove the borders afterward; this will help you

Word to easily arrange the words alphabetically; I hope you know

how to use the Word document to your advantage)

Academe It is the academic community/environment at a university.


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It is a cafe serving coffee, pastries and light refreshments.

Coffee shop Also, a place where you can do your stuff with a relaxing

ambiance.

Customer satisfaction It is the degree of satisfaction provided by the goods or

services of a company as measured by the number of repeat

customers.

It is a complexity and profundity of thought of a

Depth word or the quality of being deep or deepness.

It is the people born in 1980’s-1990’s

comprising primarily the children of the baby boomers and

Generation Y typically perceived as increasingly familiar with digital and

electronic technology.

It is the overall gameplan of a business for reaching people


Marketing strategies
and turning them into customers of the product or services

the product provides.

Perception
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It is the ability to see, hear, or become aware of something

through senses or what you think in a thing

It is the person who replies to something, especially one


Respondents
supplying information for a survey

It is the spoken language way of advertising. It is

word of mouth also given or done by the people talking about something or

telling other people about something.

CHAPTER 2

LITERATURE REVIEW

This chapter presents a discussion of literature and studies composed of foreign and

local materials. It is divided according to the following topics: (1) international and

Philippine chosen industry, (2) variable 1, (3) variable 2, and (4) synthesis.

Local and Foreign Literature

There is not much research that has been conducted on coffee shops, a fact that

(Manzo, 2014) has stated. There are so many different kinds of coffee shops nowadays that
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it is not difficult to define exactly what constitutes a coffee shop or cafe. The terms coffee

shop and cafe are now used interchangeably because some coffee shops serve meals and a

few of them sell alcohol. They serve different varieties of coffee from local to the foreign

type of coffee beans with a different flavor and roast profiles that can blend well with

people who love coffee. What all these places have in common, however, is their

equipment, such as espresso machines, and other brewing methods used to make great

quality coffee, the assumption that coffee shops these days are sociable and are pleasant to

stay in.

The Starbucks™ Coffee Company has more than 21,000 stores in 65 countries and

is the premier roaster and retailer of specialty coffee in the world. Starbucks’ slogan is that

they strive to bring their customers exceptional experiences. The new trend in large

international companies is to have a strong brand and serve customers in a special way. It

is no longer customer satisfaction which is important but the customer experience, along

with the products or services, which carries a lot of weight in customers’ final decision

making. The purpose of this research was to examine the formation and measuring of

customer experience in services in the B2C environment. This research was made with the

permission of the management of the Starbucks™ Coffee Shop in Poznan, Poland. The

research shows clearly the possibilities to improve the degree of customer experience as

well as areas of the customer experience (Vlsevier, 2018).

In Columbus, Ohio a model is developed for all brand of coffee sold in the

supermarket. These brands have 24 categories and the 4 stores are classified into two

groups, inner city, and suburban (based on 2010 census). The results have shown different
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patterns of purchasing and levels of price sensitivity for both groups shoppers. The aspects

shown suggest alternative marketing strategies for all retailers. Private label brands of

coffee are known to be competitive with brands both local and national. (Jones, 2015)

With the help of “kano model’ various quality of features affects the customers'

perspective. This study analyses the influence of quality features on customer satisfaction.

This study dragged the potential customer satisfaction improvement to the quality

improvement possibility for coffee shops. The results showed low price, luxurious interior,

and many other qualities. The cleanliness and hygiene and quality according to price are

identified as the one-dimensional quality. Starbucks and Caffe Bene’s current satisfaction

level are measured to draw the potential customer satisfaction improvement index.

Aftermath results are low price and quality of quality appeared to be the highest in the

quality improvement possible. (Shin and Kim, 2012).

Generation Y

This article puts to the test the notion that younger generations, most notably the

Millennials, value work less than older generations do. The analysis, deploying a linear

probability model, is based on Statistics Finland's Quality of Work Life Surveys, 1984 to

2013. Focusing on labor market entrants aged 15 to 29, we address two main themes: the

value given to work, leisure and family life, and work commitment. Regardless of age, the

value given to work has remained consistently high for the past three decades. At the same

time, leisure and family life have gained increasing importance, not only among the

Millennials but also among older generations. The Millennials are more prepared to change

to a different occupational field than older employees, but this is not a new tendency, and
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therefore the generational gap remains unaffected. The evidence does not support the

argument that the Millennials are less work-oriented than older generations. (Pyoria, 2017)

The Millennial Generation is also known as Generation Y because it comes after

Generation X — those people between the early 1960s and the 1980s. (Live Science, 2017)

This study examined cohort differences and intraindividual change in the intrinsic and

extrinsic work values and job entitlement beliefs of Canadian high school seniors (classes

of 1985 and 1996, representing ‘Generation X’ and ‘Generation Y’, respectively) surveyed

at age 18 and again at age 25. The 1996 cohort placed more value on extrinsic work rewards

(at age 25) and reported stronger job entitlement beliefs. Intrinsic work values increased in

both cohorts during early adulthood, whereas extrinsic work values increased only in the

1996 cohort. Job entitlement beliefs decreased on average but less so in the 1996 cohort

and in women. Predictors of intraindividual change depended on the outcome but included

gender, academic experiences at age 18 (grades and post-secondary aspirations), post-high

school labor market (unemployment) and educational experiences (obtaining a university

degree), and adult statuses at age 25 (full-time worker, parent). (Khran, 2013)

Customer Satisfaction

Customers are always aiming to get maximum satisfaction from the products or

services that they buy. Winning in today’s marketplace entails the need to build customer

relationship and not just building the products; building customer relationship means

delivering superior value over competitors to the target customers (Kotler, 2002)

It shows that customer personality traits can affect the customer satisfaction,

customer brand identification, and involvement in the development of brand loyalty. With
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the help of social identity theory, we can further explain the coffee shop businesses and the

relationship between customers and a brand. Later discovered that he verified model

confirmed that customer personality traits really has its significant effects on customer

satisfaction and customer brand identification. (Soon-ho and Minseong, 2016)

The customer satisfaction in the hospitality and tourism industries is mainly

identified by the hotel service and its quality. However, in the hotel industry, satisfaction

is not referred to a specific product or service; it is composed of a combination of various

features. Most organizations in the tourism industry and especially hotels have regular

contact with the customers. Therefore, monitoring and assessing customer satisfaction is

the paramount objective of any hotel (Hill, Alexander 2006).

Satisfaction could also be described as a process which starts with the formation of

customers' expectations and ends with communication of the obtained experience.

However, how a person assesses the conducted service is a very subjective thing.

Customers' expectations could be significantly impacted by different internal and external

factors. The higher the expectations are the more difficult it is for the company to satisfy

customers and fulfill their needs (Zeithaml, 2010).

At the heart of any action, there is a need or want. Enhancement of the intensity of

this need turns into the motive of the person's behavior, which could be understood as a

predisposition, willingness and tendency to act in a specific way. In the case of the

hospitality industry, tourists do not buy a tourist product but the satisfaction of the motive

or solution of their problem (Prideaux, 2006).

Customer satisfaction has been a subject of great interest to organizations and

researchers alike. The principal objective of organizations is to maximize profits and to


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minimize cost. Profit maximization can be achieved through an increase in sales with lesser

costs. One of the factors that can help to increase sales is customer satisfaction because

satisfaction leads to customer loyalty (Wilson, 2008).

The people who visit cafés want more than a cup of coffee. They want an interactive

experience, in an ambiance that is friendly, comfortable and warm. (Singh, Saluja 2013)

Customer satisfaction can result from any dimension (whether or not it is quality related)

and its judgments may arise from non-quality issues (e.g. needs, equity, and perceptions of

‘fairness’) and require experience with the service or provider (Taylor, Baker, 1994).

Perception in Selected Coffee Shops

In India, the Coffee retailing industry in India is at a fast rate of 25-30% and still,

growing. It is expected to grow more with the entry of competition. Coffee retailers desire

on entering the market, but they just really need to get more understanding of the needs of

their customers. With the help of this, they can innovate their existing offers to the society

and its changing needs. This paper explores two hypotheses, H1: Store perception of

customer segments of Barista and CCD are different and H2: Frequent customers of Barista

and CCD have different store perceptions. The study talks about the factors that coffee

chains need to improve. It also clearly points out the perception factors favored by regular

customers. Systematic sampling design is also followed to prove the hypothesis, together

with statistical tools (Paromita, 2018).

According to the study published in the journal of food science, almost half of the

panelist drank sweetened coffee that is decaffeinated. While the other half drank the same

sweetened coffee that is decaffeinated with quinine so the bitter flavor would be replaced
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by different varieties of sour, sweet, salty, bitter and “umami”. Their researchers tested

around 107 panelists at the Cornell and none of the next group knew which of the two

variations of coffee were they getting. And for the next session, they received the other cup

(Mandelbaum, 2017).

There are many factors influencing the customers brand choice and his loyalty in

choosing coffee shops, the ones that play an important role are memorable experience and

service quality that leads the customer to the level of satisfaction based on the age and

gender specifications (Abel, 2009). Many authors define customer loyalty as getting the

same product over and over again based on the high level of satisfaction with one or more

brands and positive attachment to the company (Beibei, 2013).

ICT

With contemporary society's emphasis on accommodation, productivity and speed,

our visits to fourth places have moved toward becoming the piece of regular daily

existence. Regularly, they are the favored strategy for correspondence in our present time

favoring expanded automatic equipment and bring more thrill. Facebook, the most broadly

utilized online networking application, reported more than 1 billion users signing in every

day in August of 2015 (1 out of 7 people on earth) (Trugman, 2016).

Coffee Culture

The cafe's themselves have experienced various changes so as to address the

different social needs of their supporters. Today, cafes involve a huge specialty in the

Japanese urban way of life. Nevertheless, the social 'stuff' of espresso as an outside item
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still assumes the main part in creating its customer request. Espresso is a worldwide product

whose incentive on the world market is exceeding just by oil. In addition, because of its

strange historical background, it turned into a beverage that takes to an extensive variety

of social implications; following these implications in various settings can reveal insight

into the way social products 'behave' in the globalized world (Grinshpun, 2013).

According to Orosa, 2013, it's stunning in what way numerous coffee shops have

progressed toward becoming libraries where med school and graduate school bringing a

book for reviewing until the short time. In such a large number of coffee shops, we start to

believe that were in a school library, with books spread over footstools, laptops and even

work area lights on table counters. However, our colleges have in actuality transformed

libraries into a similarity of cafes too.

Synthesis of the study

We believe that each and every literature and studies stated in this research is

similar to the present study. We relate and differentiate the research based on the flow of

their marketing strategy and customer satisfaction from the proposed study.

The marketing strategy and customer satisfaction will help you gain the skills you

need to market and implement high-quality satisfaction to the customers that support

business needs. You will learn how to market, maintain, run, satisfied the customer in your
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business. This specialization will also build your knowledge how to gain profit in your

business.

CHAPTER 3

RESEARCH METHODOLOGY

This chapter includes the methods and procedures used in this study. It is divided

according to the following topics: (1) research design, (2) sampling design, (3) data

collection method, (4) research instrument, and (5) statistical treatment of data.

Research Design

- With the assistance of your statistician

Sampling Design

The researchers will be using purposive sampling technique. The researchers will

be using purposive sampling technique. It is a non-probability sampling is chosen based on

online and manual questionnaires. The researchers have chosen this type of method to be

able to gather data with ease with millennials as their target respondents for this study.

Data Collection Method


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The researchers made a descriptive survey method to answer the identify problems

stated in Chapter 1 problem statement. The researchers looked for Generations Y or the

millennial around Metro Manila. The researcher will be distributing 200 questionnaires

online and 100 questionnaires manually to the respondents. In order to support the validity

of the data, the survey has been conducted to gather information. How the Generation Y's

perception of relating the marketing in customer satisfaction on selected leading coffee

shops in Metro Manila.

Research Instrument

- Identify if you created or adapted the questionnaire

- If created: explain the face and content validation, pilot testing

- If adapted: explain the pilot testing and how you sought permission from the author

of the study

- Identify what was removed from the face and content validation and pilot testing

- Identify how many questions pertain to the different variables

Statistical Treatment of Data (with the assistance of your statistician)

- Identify the statistical tool that will be used to answer the research objectives
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CHAPTER 4

DATA PRESENTATION AND ANALYSIS

This chapter present interprets and analyses the data gathered following the order of the

research questions.

Demographic Profile of the Respondents

- Answer the Research Objectives in sequence

- The subheadings are the Research Objectives

- For questions about relationships:

o ensure to related to at least 3 studies with the same results and 3 studies not

the same as your result

o relate to your theoretical framework

o accept or reject the hypothesis

- have tables with a proper label on top, figures labeled at the bottom
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CHAPTER 5

CONCLUSION AND RECOMMENDATION

This chapter presents the conclusion drawn from the findings of the study and

recommendations.

Conclusion

Based on the findings, the following conclusions can be stated: (follow the order of the

research objective, answer directly no need to explain the answer as it should be found in

Chapter 4)

1. The respondents of the study were mostly…

Recommendations

1. Based on the results of the study… (relate to your significance of the study

identified)
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APPENDICES

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