Chapter 1

THE PROBLEM AND ITS SETTING

Introduction

Service organizations aim to achieve a continuous business relationship

with their clients. The bottom line of every business accomplishment is not only

gaining profit but also most importantly, achieving customer satisfaction.

Customer relationship starts with the encounter initially attended by frontline

employees to provide service and satisfy the needs of customers. Customer

satisfaction is achieved when the service provider meets or exceeds the

expectation of customers. This statement leads to the goal of service quality.

Along with the fast changing lifestyle, eating out habit is becoming a part

of modern lifestyle which has driven customers to try new things and

experiences. These changes have then led fast-food industry to grow rapidly

and become one of the fastest growing business sectors in recent years. This

increase in the number of outlets, sales volume, recognition and popularity has

witnessed the success of fast food industry.

The growth of the fast food industry shows the dramatic increase of

competitions and challenges in the market. Competition among existing players

is becoming much stronger than before. It is significant to the fast food operators

to craft their marketing strategies and tactics to generate profits and ensure the

growth of the company. To be specific, the marketing strategies aim at

increasing patronage intentions and maximizing market share in view of the

positive impacts on the financial performance of the organization.

The restaurant's intention is to make sure that they satisfied the needs

and wants of the customer from preparing foods, quality of service and ambiance

of the restaurant because customers are the one who can determine the

development of the business. The progress of any restaurants depends on how

customers patronize the food and quality of their services. Having a good

communication between customers may have a special impact to the excellence

of the restaurant. A customer has a role in shaping one's business

establishments, most of the time they used some marketing strategy to attract

customers because it is possible if customers are all satisfied with the service

quality. Keeping all the customers happy and enjoyed should be the greatest

accomplishment of every restaurant.

Service quality and customer satisfaction are the most important factors

for the retention of the customers and for the profitability and productivity of the

business as a whole. Both of this has an important role in a company to maintain

its competitiveness. It is very significant to assess the service quality of a

company to recognize the needs and wants of the customers to be able to

satisfy them. Service Quality has become a foundation of marketing strategy in

every business to make all customers happy and satisfied.

This study involved the use of SERVQUAL or Service Quality instrument

to measure the level of service quality of fast food restaurant as assessed by the

2
customers in Daet. The five dimensions of service quality which includes:

reliability, tangibility, responsiveness, assurance, and empathy are used to

measure the service quality. All this dimensions are important to customers but

not all the time the service providers can process each of these dimensions

equally.

Statement of the problem

This study aimed to assess the level of service quality of fast food

restaurants in Daet.

Specifically, the study sought to answer the following questions:

1. What is the demographic profile of the respondents in terms of:

a. Age;

b. Gender;

c. Civil Status;

d. Educational attainment;

e. Occupation;

f. Monthly income; and

g. Most visited fast food restaurant?

3
2. What is the level of service quality of fast food restaurants as assessed by the

customers in Daet in terms of:

a. Reliability;

b. Assurance;

c. Tangibility;

d. Empathy; and

e. Responsiveness?

3. Is the demographic attributes of customers has a significant effect on the level

of service quality?

4. What strategic interventions or measures can be proposed to enhance the

service quality of fast food restaurants in Daet?

Alternative Hypothesis

The demographic attributes of the customers has a significant effect on

the level of service quality

Scope and Limitations

The study determined the demographic profile of the respondents in

terms of: age, gender, civil status, educational attainment, occupation, monthly,

and most visited fast food restaurant. Furthermore, the study identified the level

4
of service quality of the fast food restaurants as assessed by the customers in

Daet in terms of: reliability, assurance, tangibility, empathy, and responsiveness.

The study also determined how the demographic attributes of customers affect

the assessment of the level of service quality. The respondents were chosen

randomly from the customers of the different fast food restaurants in Daet. The

researchers employed SERVQUAL to determine the level of service quality. The

gathered data of the study were the bases of the proposed strategic intervention

to enhance the service quality of fast food restaurants in Daet.

Significance of the Study

The results of the study would be of great benefit to the following:

1. Fast food restaurant owners. The study would help the owners of fast food

restaurants to know if the service quality they rendered would satisfy their

customers. This served as a basis to gain better understanding on what factors

affect the satisfaction of the customers and how they improve the services to

meet the customers’ standards.

2. Employees. The study provided more knowledge on how to improve their

performance, since they are the one rendering the services and interacting with

the customers.

3. Customers. The study benefited the customers by giving them sufficient

information about the other services that they should experience every time they

are in a fast food restaurant. The study also helped them to have better

5
understanding about the fast food restaurants that they have been to and helped

them decide on what fast food restaurant might be best for them to be satisfied

with the services they wanted.

4. Entrepreneurs. The results of the study provided the entrepreneurs additional

knowledge of the qualities that a customer is looking for when they are in a fast

food restaurant which helped them monitor the implementation of their service

quality and respond better to the issues that improved their business process.

5. Future Researchers. The results of the study benefited either present or

future researchers. The study would serve as the basis of a new theory or

another study.

Definition of Terms

In order to have a better understanding of this research, the following

terms were defined theoretically and operationally.

Assurance. This refers to the competence of the system and its

credibility in providing a courteous and secure service. In this study, assurance is

one of the five dimensions in measuring the level of service quality of fast food

restaurants in Daet.

Customer. They are the recipients of service. In this study, they are the

customers of the different fast food restaurants in Daet who will be randomly

selected.

6
 Customer Satisfaction. Based on Businessdictonary.com, it is the

degree of satisfaction provided by the goods or services of a company as

measured by the number of repeat customers. Customer satisfaction is

recognized once the company's service satisfaction the customers via the quality

of service being rendered. In this study, customer satisfaction is the indicator

wherein if the service of the fast food restaurant is pleasing to the customers and

if the services fulfil what was the customer's expectations.

Empathy. This refers to the approachability, ease of access and effort

taken to understand the needs of the customer. In this study, it refers to caring

individualized attention the fast food restaurants in Daet provide to its customers.

Fast-food Restaurant. As defined in definedterm.com, FFR is also

known as Quick Service Restaurant, a buildings used for the preparation and

sale of ready-to-eat food. Characterized by a limited menu of food prepared

quickly, and sometimes cooked in bulk in advance a d kept hot. This is a

common place where all people would rather go to because of the readiness of

food and as we are always in a hurry, this is the perfect place to come by. In this

study, the fast food restaurants in Daet are the locale of this study.

Reliability. This refers to the ability to perform the promised service

dependably and accurately. Reliability is another dimension the will measure the

level of service quality of fast food restaurants in Daet.

Responsiveness. It is described as the willingness to provide prompt

service. In this study, it is the ability of the fast food restaurants to respond

7
quickly to the needs of the customers, to be careful in service treatment and to

be willing to help customers.

Service Quality. According to Zeithaml and Bitner, service quality is

focused evaluation that reflects the customer's perceptions of service namely

reliability, responsiveness, assurance, empathy, and tangibles. Based on the

assessment of service quality provided to the customers, business operators are

able to identify problem quickly, improve their service and better assess client

expectations (Businessdictionary.com). Through service quality, it can be the

derivation of customer satisfaction to customer loyalty. This is one of the higher

standards of customers wherein they prompt every business to enhance their

regulations. In this study, it is a measure of how well the services performed by

the fast food restaurants meet the expectations of the customers in terms of

reliability, assurance, tangibility, empathy, and responsiveness.

SERVQUAL Model: Dimensions of Service Quality. A. Parasuraman,

V.A. Zeithaml, and L.L. Berry defined and introduced the five dimensions which

led to the development of SERVQUAL with dimensions such as Tangibles,

Reliability, Responsiveness, Assurance, and Empathy are the ones that

identified as main dimensions used by the customers to judge the service quality

of a company or business. This can also be one of the factors that can affect

customer's satisfaction and loyalty that's why a company or a business should

manipulate this kind of survey instrument in order to fulfil customer's needs and

wants. This tool will be utilized in this study to measure the level of service

quality of fast food restaurants in Daet.

8
 Tangibility. It refers to the tangible facilities and equipment of the

business. In this study, it refers to the physical facilities, equipment, and

appearance of personnel in the fast food restaurants in Daet, Camarines Norte.

9
 Notes

Business Dictionary.Com. (n.d). Customer Satisfaction. Retrieved from

http://www.businessdictionary.com/definition/customer-satisfaction.html.

Business Dictionary.Com. (n.d). Service Quality. Retrieved from

http://www.businessdictionary.com/definition/service-quality.html.

Essays, UK. (November 2013). Definition of Service Quality. Retrieved from

https://www.ukessays.com/essays/marketing/definition-of-service-quality-
marketing-essay.php

DefinedTerm.Com. (2016). Fast Food Restaurant. Retriever from

https://definedterm.com/fast_food_restaurant

Investopedia.Com. (n.d). Customer. Retrieved from

https://www.investopedia.com/terms/c/customer.asp

Business Dictionary.Com. (n.d). Marketing Strategy. Retrieved from

http://www.businessdictionary.com/definition/marketing-strategy.html

10
 Chapter 2

REVIEW OF RELATED LITERATURE AND STUDIES

This chapter presents the review of related literature and studies which

were relevant to the present study. It likewise discusses the state-of-the-art

which helped the researcher identify the gap bridged by this study. It also

discusses the theoretical and conceptual framework of the study as well as the

definition of significant terms for easy understanding of this study.

Related Literature

In nowadays competitive environment, providing high quality of service is

the key for a maintainable competitive advantage. This can only be done if

companies understand the concepts of service quality and customer satisfaction

which plays a very important role for a company to remain competitive and grow.

Customer satisfaction does have a favorable effect on a company’s lucrative

because it is the result felt by the people who experienced the business

establishment's performance that have filled their expectations. Satisfied

customers serve as the foundation of any prosperous business wherein this

leads to purchases repetition, brand fidelity and complimentary word of mouth.

There are multiple studies conducted by researchers which pointed out the truth

that satisfied customers partake their experience with perhaps five to six other

people. While on the other hand, dissatisfied customers are more likely to share

11
their experience with ten other people regarding the product and services they

experienced (Angelova and Zekiri 2011).

In an era of increased competition, and the service sector being the

dominant sector in world economy, it is apparent that companies would focus

upon service quality and customer satisfaction improvement issues in order to

drive high levels of business performance. It is however, common to find unclear

distinctions between service quality and customer satisfaction. It is important for

service providers to know “whether their objective should be to have consumers

who are ‘satisfied’ with their performance or to deliver the maximum level of

‘perceived service quality’”. Many researchers have traditionally viewed service

quality and customer satisfaction as equivalent constructs because of the

considerable overlap between the two concepts. Today, however, there is some

degree of consensus among researchers that service quality and customer

satisfaction are distinctive constructs, although they do admit that the constructs

are related (Bateson & Hoffman, 2011:325).

According to Ryu and Han (2010), there are a lot of restaurant options

that are accessible, restaurant customers will dive in to another new restaurant if

one fails to provide quality service. The most important thing that increased in

recent years that attributes the dining experience is the service quality, and

many researchers have shown the significance between service quality and

customer satisfaction. Observed quality of service is the content of knowing

one's customers, addressing one's employees to exceed customer needs and

wants and also to bring off to the customer what was being promised. The

12
delivery of high quality service is especially demanding due to its intangible

nature of the service offerings, thereupon, restaurants should elaborate a system

that will assess both service performance as well as the enrichment of service

delivery. Since service is intangible in its nature, it requires the customers to be

present during the process period so atmosphere of a restaurant can have a

significant effect on the perceptions of the collectively quality of the service

encounter. It would also add a greater level of overall satisfaction that will

influence the customer behavior; this in turn affects dining satisfaction in the

service restaurant industry.

The concept of a service has changed considerably during the last thirty

years. Initially, it was argued that a service can be defined by emphasizing the

differences between goods and services by referring to the characteristics of

services. The early debate about the differences between services and goods

tended to encourage the notion that services and physical goods are an either-

or. To define a service, is not an easy task. Lovelock and Wirtz (2011:15) believe

that services are difficult to define because of the fact that services cover a vast

array of different and often very complex activities. The word has in fact many

meanings, ranging from a personal service to a service as a product. However,

strongly about the fact that services should be defined in their own right and not

in relation to goods. (Lovelock C. and Wirtz J., 2011)

To survive in the vicious competition, there is an important criterion for

fast food restaurant and restaurant chains which are the regularization and

service quality. Fast food business professionals and researchers have been

13
looking for a way to comprehend more about customer's expectation on service

quality to brace fast food restaurant marketing expenditure. According to several

literatures, the contendness of customer is presumed relevant to service quality

as it influences behavioral intentions. Through the collected data investigated

from local and internationals fast food restaurant's customer perceptions resulted

that there are relations among them then therefore, if the two restaurant's

customer perceptions such as behavioral intentions and brand loyalty are

considered, both of it has a positive effect on other variables. (Sezgin, Erkan &

Özgür Göde, Merve. 2017)

Todays, the popularity of dining in restaurant industry has become

completely important and continuously growing in Serbia. Regular restaurant

visits are not only done to satisfy the most important goal in life of an individual

which is pleasure and happiness. But it is also the effect of the ceaseless

proliferation or single-person households and adaptation to the European

business operation hours. In the continuous increasing of competitiveness in our

environment, restaurants must center their attention on guests using different

marketing concepts to distinguish the individual needs of the customers thus

may lead to their satisfaction and retention. The business establishments may

gain higher sales revenue if they focused their attention in service quality as it is

a fundamental component which creates higher degree of guest satisfaction.

Some of the key components of restaurant experience that business

establishments may improve are the quality of food and beverages, quality of

service delivery, physical environment and price fairness. A management close

14
in focused on satisfaction of customers can improve performance of restaurant

businesses as well. (Gagic, Tesanovic and Jovicic 2013)

Customers play an important role in the success of every business so it

must be understood by fast-food industry. To be in business, fast-food

restaurants should not only focus on the customer retention, but also need to

improve the quality of their service to satisfy more customers. Additionally,

providing good service can lead towards a sustainable competitive advantage.

And one of the key factors for satisfaction in fast-food industry in Mysore District

is the service quality. (Manjunath and Reginald 2016)

When it comes to customers that have to choose among competing

products and services, quality has become one of the most important decision

factors. Quality also plays an important role in assuring the safety of the

customers. The phenomenon of quality is widespread and understanding and

improving quality are key factors leading to business success, growth and

competitiveness. It is common knowledge that there is a substantial return on

investment from improved quality and, from successfully employing quality as an

integral part of overall business strategy. Quality has always been a bone of

contention. It stemmed a flood of rivalry from large to small businesses,

everyone claiming his products’ superior quality. Quality can be defined in many

ways but feel that it is a complex, multifaceted phenomenon and is often defined

too narrowly. It is however important to have an understanding of the concept

quality if businesses have to measure and improve their quality. Quality must

15
also be defined in such a way that it can be assessed and measured.

(Montgomery, Jennings, and Pfund 2010)

The literature review denotes that the quality of service become one of the

concern of hotel industry. Quality has its own way in responding to customer

needs. Providing quality service for every hotel operation maybe a difficult task,

but it is the only way to have a sustainable competitive advantage and

profitability. Also, it can lead to customer satisfaction and loyalty. If the quality

service has been developing, it means that there is an improvement happen in

the way firm operates. (Soteriades 2011)

According to Rahimi and Kozak (2017), Customer Relationship

Management (CRM) can give extra advantages to the hotel industry though

there are some difficult tasks in terms of managing. The challenges bring a

significant risk of failure, and these risks become more important in budget

hotels. In this context, there are significant changes that emerged during the last

decades based on customer expectation in budget hotels. Additionally, the

researchers believed that the value of money and products play a critical role in

budget hotels for overall satisfaction of the customers.

A success of a company depends on the essential factors to be

considered by business establishments, one of these is customer satisfaction.

Companies must know and understand the right time and in what way their

customers are satiate about the products and services they offered to achieve

high customer satisfaction. Satisfaction is indefinite and complex term used

16
when customers limit their selves to the field of consumer product relationship.

The literature is provided with multiple different definitions of satisfaction. In the

industry providing services to customers, customer retention is more significant

than having new customers; this is because satisfaction of customers is a very

interesting issue to look forward to. Keeping customers increases the company's

profit than attracting customers does that's why companies must have zero

failure through customer’s satisfaction to maximize the profit they can generate

in the long term. (Jashireh, Slambolchi and Mobarakabadi 2016)

According to Inocencio, Madamba, Mojica, and Zapata (2016), restaurant

Industry is one of the highly competitive sectors so entrepreneurs were being

challenged to find ways to keep afloat as there are a lot of factors that changes

the customer preferences. Employing a direct contact with customers will

concentrate on valuating the level of customer satisfaction in a Philippine resto-

bar and also adjudging dining features or factors influencing customer

satisfaction. Results show that the resto-bar customer satisfaction ratings were

highest for diversity of menu, for some food, and beverage offerings factors.

However, customer satisfaction ratings were low due to other factors such as

offerings of beverages, waiting time, food palatability, and appropriateness of

price and also preferment of discounts. All in all, there are factors that may

causes the highest and lowest of ratings in customer satisfaction but still

throughout these results, what matters the most is that what really are the factors

to consider that attributes in customer satisfaction.

17
 Service quality positively affects the hotel industry for years. Thus,

service providers should know the perception and expectation of customers

about service such as factors affecting their satisfaction. Hotel industry still exists

in the competition in Egypt so that the hotel managers are focusing on the

factors related to service quality for the customers of hotel industry in Egypt. In

addition, Hotel industry believed that service quality is an important factor of

flourishing business. Through offering quality service, hotel companies will not

only maintain its current customers but will also maintain customer loyalty. (El

Saghier 2015)

The Theory of service quality has evolved over a long period of time

through testing and trials in service sectors. The service quality becomes a

critical issue for the hospitality industry. The customers led to the use of the new

service parameters to make the hoteliers improved the quality management in

hospitality industry. He also stated that service quality and value are difficult to

measure in order to know the perception and expectation of the customers.

However, the dimension of SERVQUAL has been accepted as an effective tool

to measure the service quality for the development of overall customer

satisfaction. (Borhave 2012)

According to Ghani E., Said J., & Yusuf S., (2012) they proposed a new

measurement tool that is now able to measure Islamic perspective on the non-

profit organization and by using the content analysis, it showed the relative

strengths and weaknesses of five performance measurement tools to determine

the exact instrument that would fit in the Islamic non-profit organization, some

18
reviews used SERVQUAL model in measuring customer satisfaction but the best

tool that could develop and adapt to Islamic non-profit organization is the Carter

Instrument.

Related Studies

Based on the study of Khan, Hussain, and Yaaqob (2013), they focused

on what are the key success factors to consider of every fast food industry in

region of Peshawar Pakistan. There are actually seven key factors that will yield

failure or success of the said business and they are Promotion, Service Quality,

Customer Expectations, Brand, Physical Environment, Price, and Taste of the

product. They conducted a research to find out the key factors that a fast food

industry should consider in order to satisfy customers and what they should

focus on more. Findings of their study is it shows that service quality and brand

seemed to be the key factors for the satisfaction in fast food industry and due to

this, fast food industries should focus on improving service quality and brand in

order to satisfied and retention of customers.

According to the study of Hanaysha (2016) customer satisfaction is

considered to be a key priority for business success. To achieve customer

satisfaction, each kind of business should determine the factors that affect

customer satisfaction are. There are key factors that each business should focus

on in order to satisfied customers, they are food quality, price fairness, and

physical environment. The researcher conducted a research and the data were

19
collected from 242 customers of international fast food restaurants in east coast

Malaysia with the use of SPSS and structural equation modeling (SEM). With

these measurements, the finding indicated that it was the food quality that has a

significant positive effect on customer satisfaction but together with price fairness

and physical environment, it would really have satisfied customers and not just

satisfied but it might also yield into the loyalty of the customers. Those factors

are the important that will affect customer satisfaction.

In the study conducted by Saleem and Raja (2014), they aim to

investigate the impact of service quality on satisfaction and loyalty of customers

and brand image in hotel industry in Pakistan. A total number of 250

questionnaires were distributed among the customers of 8 different hotels that

have 3-5 star satisfaction rates from customers in different cities all over

Pakistan. They used the quantitative method to collect the needed data and

employed the SPSS 19 and Structural Equation Modeling (SEM) technique to

measure and analyze the date collected. The study shows a positive and

significant connection between service quality and customer satisfaction as well

as in service quality and customer loyalty. In addition, it is also showed in the

study the impact customer satisfaction in earning the loyalty of the customers.

From the results of their study they declared that the quality of the service

performed by the hotels can boost the loyalty of the customer and in return the

loyalty of customers can enhance the perception of the brand image.

On the study of Nelson et al. (2011), it tackles on how to retain the

satisfaction of customers on restaurant business. Through the use of marketing

20
concepts, it will be the key on how will it progress and improve the business.

Concepts and strategy is the customer's weakness that will cause the iteration of

customer's patronage. With proactivity, this is what they call the opportunity cost

wherein they are able to sacrifice some changes to the business to at least light

up and upgrade the ambiance of the business to achieve the customer

satisfaction and there's also the involvement of enhancing products, embody

new ideas that will cause the great pleasure to the customers. One of the

effective ways on how to know if the customer is being satisfied is to conduct a

survey or feedback on how does the quality of the service is going on.

In the study presented by Canny (2014), he aims to determine the

connection among dining experience, service quality and behavioral intentions of

customers. In association with this he conducted a survey among 213 customers

of casual dining restaurants in Jakarta, Indonesia. The results of the regression

analysis he conducted shows that these three dining experience characteristics

were significantly related to customer satisfaction especially with service quality

emerging as the most important characteristic. In addition, customer satisfaction

is considered to be significantly related to customer’s behavioral intentions.

According to Bitner et al. (2010) customer's perception, evaluation,

assurance, empathy, reliability of service and responsiveness are the focus of

service quality. On the other hand, satisfactions were influenced by price

affordability, product quality, ambiance and perceptiveness of service quality with

situational and personal factors. It is determining factors for businesses whether

big and small that bring customers loyalty. One of the most valued assets of a

21
business is the customers. If they valued by creating, maintaining and improving

relationship with them, they will be contented by the services offered by the

business and will not shift from one business establishment to another. It is the

core offering of the business in return for a price paid by customers.

Based on the study of Prybutok (2017), he built up a model and the

related measurements that measure service quality in fast-food restaurants. As a

major aspect of this procedure the researchers altered the classic SERVPERF

instrument to look at the connections among service quality, food quality,

price/value, customer satisfaction, and behavioral intentions. This modified

SERVPERF instrument was administered to college students at a large

Southwestern University. Confirmatory factor analysis and structural equation

modeling were employed to analyze the data. A number of significant findings

were reported including that the five dimensions—tangibles, employee

behaviors, reliability, responsiveness, and empathy—positively influence the

perception of service quality. The results also support the contention that service

quality and customer satisfaction are two important antecedents of customer

intention. The indirect effect of service quality on behavioral intentions is not

supported by this study because the authors did not find a significant relationship

between service quality and customer satisfaction. The findings also show that

food quality is a significant factor in satisfaction. These findings demonstrate that

fast-food restaurants managers should focus on checking and enhancing service

quality and food quality since providing better service to their customers will drive

repurchases.

22
 The study of Prestine (2013) dealt with service quality perceptions, and

customer loyalty in casinos. The purpose of the study was to examine the

significant connection between service quality of casino, player segments, and

customer loyalty in an Asian Casino. And since study was observed to be

exploratory, Prestine (2013) used qualitative design through group interviews

with gamblers or players in various segments such as General, International,

and VIP gaming room. In order to examine gambler perception in terms of

service quality of casino, she obtained 22 performance-based items of

SERVQUAL with 5 dimensions – responsiveness, assurance, tangible, empathy,

and reliability. To be able to fit or match the context of the research, she again

makes use of the same process she did in examining gambler perception to the

service quality of casino, and executed semi-structured interviews for the focus

groups. In general, the interview results of the study revealed the negative

perceptions of respondents towards overall service quality of casino.

Furthermore, the findings explained that the outcome of different dimensions of

service quality on customer loyalty differed across various segments.

In the study of Mokhlis (2012), he evaluated the connection between

service quality perceptions and customer satisfaction in municipal services.

According to the statistical results, it revealed that three service factors

(Empathy, Tangibles, and Reliability) differentiate between men and women

respondents. Additionally, it was found that the three SERVQUAL dimensions –

tangibles, reliability, and responsiveness were importantly associated for both

genders.

23
 The study conducted by Al-Tit (2015) investigates the relation of service

quality, food quality and customer retention and satisfaction in different

restaurants in Jordan. Service quality was measured in terms of SERVQUAL

attributes. It also showed that service quality and the food quality have a positive

impact on customer satisfaction. In addition, it also included that customer

satisfaction has a positive impact in customer retention. The possible effect of

this study are founded on the fact that every limited service restaurant in the

neighborhood of different universities should understand how to deliver the

critical role of service quality and food quality, in order to satisfied the needs and

wants of the customers as an antecedent of their retention.

According to Amin, et.al (2013) the purpose of their study is to test the

relationship of the service quality dimension and customer satisfaction in the

Malaysian hotel industry. A nonprobability sampling technique with a convenient

sampling approach has been used in this study. The main goal of the hotel is to

satisfy the customer to their overall quality and performances. They also tackle

that service quality dimension is more important because it gives a lot of

significant contribution to the prediction of customer satisfaction.

The study conducted by Baker (2013) intends to compare and determine

the relationship between the extent of service quality and the satisfaction of

customers in airline services. The purpose of his study is to investigate the

service quality and customer satisfaction of the best 14 US airlines between

years 2007 to 2011 using the information gathered from the Department of

Transportation Air Travel Reports. Based on the review in the literature the test

24
revealed that airline industry has been experiencing with some difficulty in terms

of managing fluctuating demand, cutting costs and keeping up with high quality

requirements because they are trying to balance and maintain the quality of their

services for customer satisfaction. Using a quantitative research, the Microsoft

excel version 2010 was used by analyzing the data using the percentage, mean

and the standard deviation in statistics.

According to Tan, et al. (2014), they conducted a survey about the

customer's perception of Chinese fast food restaurant service quality and its

connection with customer satisfaction. This study used quantitative and

qualitative research approaches. They developed a new measurement called

CFFRSERV which stands for Chinese Fast Food Restaurant Service Quality

Scale. The findings from the study exposed that service quality have a positive

influence on customer satisfaction except reliability dimension. A total of 205

completed questionnaires were used in the analysis.

According to Liu, W.K, Lee, Y.S, & Hung, L.M (2016), they use

customers’ perspectives to build up a conceptual model for improving service

quality and enhancing customer satisfaction and loyalty. The findings denote that

service quality positively influences customer satisfaction and customer loyalty.

Service quality positively influences customer loyalty through customer

satisfaction. The research findings indicate that managers need to ensure they

have efficient service quality to enhance customer satisfaction and customer

loyalty levels.

25
 The study of Izogo and Ogba (2015) focused in the service quality,

customer satisfaction and loyalty in automobile repair services sector which they

will delve about dimensional structure of SERVQUAL scale in the services of

Nigerian automobile repair sector and to showed the impact of dimensions of

service quality on customer satisfaction and loyalty as twofold purpose of their

study. They used the Statistical Package for the Social Sciences (SPSS) to

gather data of their study and out of the 32 items questionnaire were divided, 22

items were to measure service quality, 5 for customer satisfaction and another 5

for customer loyalty. All measures employed in their questionnaire were

collected with the use of Statistical Package for the Social Sciences (SPSS)

based on SERVQUAL scale. The results of their study were acquired from their

215 questionnaires and the outcomes suggested that using SERVQUAL scale

does not match the results of previous reports. In reality, commitment was

shown as a new different dimension of service quality but the outcome revealed

that service quality dimensions were suggestive predictors of customer

satisfaction and loyalty but together with commitment, it will also yield the

greatest degree of this impact.

Synthesis of the State-of-the-Art

The reviewed literatures and studies are all related to the present study.

They are included in this part of the study in such a way that they serve as the

foundation of the researchers in conceptualizing the study. They all served as

26
the groundwork of this study. All of the literatures and studies bear significance

to the present study. These gave insights which are helpful in the justification of

the present study.

The studies conducted by Khan, Hussain, and Yaaqob (2013), Haynasha

(2016), and Saleem and Raja (2014), discussed the different key factors in order

to attain quality of service, customer satisfaction and also customer loyalty. They

mentioned the different key factors and these are Promotion, Service Quality,

Customer Expectations, Brand, Physical Environment, Price, and Taste of the

product, through these key factors, different kind of businesses considered the

said key factors in order to fulfilled their duty to their customers. Both of the

employed used the SPSS and SEM to gather data. The resemblance of their

studies to the researchers’ study is that both of them focused on service quality

to attained customer satisfaction. In fact, they focused in assessing on what are

the fast-food industries here in Daet, Camarines Norte considered in order to

fulfill the needs of their customers. While on the other hand, both studies

distinctiveness is what kind of measurement they used. For the researchers,

they used SERVQUAL in order to know that service quality is either effective or

not which will affect customer satisfaction.

In contrast, studies conducted by Nelson et al. (2011) and Canny (2014),

discussed that through the use of marketing concepts and strategies, it is the key

factor to considered that will lead to the satisfaction of customers. In marketing

concepts and strategies involved the improvement of the environment of the

business, improvement of service quality, enhancing products, and dining

27
experience. It helped the business considered marketing concepts and

strategies to convince customers. Its comparability to the researchers’ study is

comprehended what strategies does the fast food industries here in Daet,

Camarines Norte consider to convince customers and to know whether their

strategies are effective and efficient. The difference of the studies from the

researchers’ study is they focused on the service quality and they did not

focused on marketing concepts and strategies but rather, they studied on what

kind of other concepts and strategies do fast food industries used.

The studies handled by Bitner, et al. (2010), Prybutok, H. G. (2017),

Prestine (2013), and Mokhlis (2012), discussed that there are dimensions that

positively influenced the perception of service quality. These dimensions were

tangibles, employee behaviors, assurance, empathy, responsiveness, and

reliability. Using those dimensions, it helped to find out whether there was really

a connection about service quality to customer satisfaction and loyalty also it

was importantly associated for both genders which means considering those

dimensions literally helped different sectors of business to depend their

strategies on both genders. Its similarities on the researchers’ study were both

focused on service quality and researchers also used the measurement called

SERVQUAL in order to assessed how effective the service of fast food

restaurants here in Daet, Camarines Norte. In contrast, the researchers did not

focus too much about the dimensions and also some of their studies talked

about municipal services and casino which is different from the study of the

researchers which is about fast food restaurants.

28
 Based on the studies of Al-Tit (2015), Amin, et al. (2013), Baker (2013),

Tan, et al. (2014), Liu, et al. (2016) and Izogo and Ogba (2015) can observed

that the previous studies were all about the measurement used to know the

relation of service quality to customer satisfaction and how useful to employed

different measurement. With the used of different measurement, therefore they

concluded that service quality dimension is significant than others but most of

other dimensions considered in order to fully achieved customer satisfaction,

loyalty and retention. Different sectors of business must reckon on how to

delivered the critical role of service quality and other qualities in order to satisfy

customers. Its comparability from the researchers’ study is that both studies

depend on using measurements to know what were the significant to customer

satisfaction, loyalty and retention and also both focused on the effectiveness of

service quality whether it is service of different sectors business and there were

two studies which used the same measurement that the researchers used and it

is the SERVQUAL. In contrast, the business tackled was different from the

researchers’ study because they focused on fast food restaurants in Daet,

Camarines Norte. Some studies used different measurements such as

CFFRSERV but findings were just the same.

Gap Bridged by the Study

This study was conducted to bridge the gap between customers’ satisfaction

and the level of the service quality provided by the fast food restaurant. This gap

29
would provide the improvement space for the service providers to improve their

overall quality of services and meet the customers’ satisfaction.

Although there were several studies conducted on assessing service

quality, the current study is the only study which conducted a thorough analysis

on the significant relationship of the level of service quality and customers’

satisfaction. From the reviewed studies, it was found out that there were no

direct studies which were concern to know the organizational performance of the

fast food restaurants in terms of services these fast food restaurants have to

offer and most importantly its implication to the customers’ satisfaction.

Theoretical Framework

This section dealt with the theories that guided the researchers in

understanding the study. Figure 1 on the next page presents the theoretical

framework of the study. This theoretical framework is based on the quality

philosophies of Philip B. Crosby, W. Edwards Deming, and Joseph M. Juran.

Crosby’s principle (1984), Doing It Right the First Time, was his answer to

the quality crisis. He defined quality as full and perfect conformance to the

customers’ requirements. The essence of his philosophy is expressed in what

he called the Absolutes of Quality Management and the Basic Elements of

Improvement.

Deming (1986) define quality as fitness for purpose. Deming’s opinion was to

practice constant improvement, and to imagine the manufacturing process as a

30
 Service Quality

Quality
Philosophies

 Conformance to “Doing It Right the First Time”

Requirement (DIRFT)
Philip B. Crosby,
(1984)
“Practice constant improvement and
 Fitness for Purpose to imagine the manufacturing
process as seamless whole, rather
W.Edwards Deming,
than as a system made up of
(1986) incongruent parts”

 Fitness for Use

“To focus on the responsibility
Joseph M. Juran,
of management to achieve
(1982)
quality”

Figure 1. Theoretical Framework

31
seamless whole, rather than as a system made up of incongruent parts. His

philosophy was summarized into two-part comparison: (1) Organizations should

focus primarily on quality, which is defined by the equation ‘Quality=Results of

work efforts’. When this occurs, quality improves; (2) When organizations’ focus

is primarily on costs, the costs will rise, but over time the quality drops. The

primary focus of every business was the quality of the end product, which is what

Deming stressed upon.

Juran (1982) shifted track to focus instead on the human dimension of

quality management. He laid emphasis on the importance of educating and

training managers, For Juran, the root cause of quality issues was the resistance

to change, and human relations problems. Juran’s definition of quality that is

‘fitness

for use’ which means ‘to focused on the responsibility of management to

achieve quality.

The study adopted the quality philosophies of Crosby, Deming, and Juran to

attain the goal of quality based on the predefined standard. The quality

improvement involves the constant drive to perfection. Quality improvements

need to be continuously introduced. Problems must be diagnosed to the root

causes to develop solutions. The management must analyze the processes and

the systems and report back with recognition and praise when things are done

right. Continuous improvement should be done to improve the service quality

offered.

32
Conceptual Framework

The study was conducted to come up with a relevant and strategic

intervention or measure that would enhance the service quality of fast food

restaurants in Daet. The conceptual framework presents the flow of the

research. It shows the details of the following: the customers’ profile; the level of

service quality of the fast food restaurants in Daet, the proposed strategic

intervention or measure to enhance the service quality of fast food restaurants in

Daet, and the customers’ satisfaction.

The conceptual framework on the next page shows the demographic

profiles of the respondents in terms of age, gender, civil status, educational

attainment, occupation, monthly income, and most visited fast food restaurant.

These demographic profiles are the variables that may affect the assessment on

the level of service quality of fast food restaurants in Daet, Camarines Norte. The

level of service quality of the fast food restaurants in Daet was measured based

on the five dimensions which include: reliability, assurance, tangibility, empathy,

and responsiveness. These dimensions mainly focus on the human aspects of

service delivery (responsiveness, reliability, assurance, and empathy) and the

tangibles of service. The assessment of the customers would identify the level

of the service quality of the fast food restaurants in Daet and the basis of the

proposed strategic intervention to enhance their service and to meet customers’

satisfaction. The result of the evaluation may also lead to further

recommendations for the betterment of the service quality.

33
 Customers’
Profile
Level of service
 Age Strategic
quality along:
 Gender intervention or
 Reliability measure to
 Civil status
 Educational  Assurance enhance the
attainment  Tangibility service quality
 Occupation of fast food
 Empathy
 Monthly income restaurants in Daet
 Responsiveness
 Most visit fast
food restaurant

Customers’ Satisfaction

Figure 2. Conceptual Framework

34
 Notes

Angelova, B. and Zekiri, J. (2011) "Measuring Customer Satisfaction With

Service Quality Using American Customer Satisfaction Model (ACSI
Model)", International Journal of Academic Research in Business and
Social Sciences, vol. 1, no. 3, pp. 232-258.
Bateson John E.G dan Hoffman K.Douglas. (2011).”Service Marketing”.
4th edition. South - Western. CENGAGE Learning
Ryu, K., and Han, H. (2010). Influence of the quality of food, service, and
physical environment on customer satisfaction and behavioral intention in
quick-casual restaurants: Moderating role of perceived price. Journal of
Hospitality and Tourism Research, 34(3), 310-329.
doi:10/1177/1096348009350624 Ryu, K., and Jang, S. (2008).
DINESCAPE: A scale for customer's perception of dining environments.
Journal of Foodservice Business Research, 11(1), 2-22.
doi:10/1080/1537802080192655
Lovelock, C., Wirtz., J. (2010).Service Marketing : People, Technology, Strategy.
7th Edition. Upper Saddle River: Prentice Hall
Sezgin, Erkan & Özgür Göde, Merve. (2017). TOURISM: Original scientific
paper; Local survivor vs. global brand: Behavioural intention and brand loyalty
tales of fast food restaurants. Tourism : An International Interdisciplinary
Journal. 65. 406- 421.
Gagic, S., Tesanovic, D. and Jovicic, A. (2013), The Vital Components of
Restaurant Quality That Affect Guest Satisfaction. TURIZAM, 17 (4), 166-
176.
Manjunath, S. J., & Reginald, S. (2016). Customer Satisfaction in Fast Food
Industry: A Case Study of Mysore. International Journal of Research in
Finance and Marketing. Vol. 6, Issue 5.
Montgomery D., Jennnings C., and Pfund M. (2010). Managing, Controlling and
Improving Service Quality. United States: Wiley.
Soteriades, M. D. (2011). Service Quality In The Hotel Industry: Issues and
Challenges. LAP LAMBERT Academic Publishing.
Rahimi, R., Kozak, M., (2017). Impact of Customer Relationship Management on
Customer Satisfaction: The case of a budget hotel chain. Journal of Travel &
Tourism Marketing 34 (1), 40-51.
Jashireh, A., Slambolchi, A. and Mobarakabadi, H. (2016), A Literature Review
of Service Quality and Customer Satisfaction. Advanced Social Humanities and
Management, 3(2), 1-12.
Inocencio, M.J. -E., Madamba, J.A. -B., Mojica, L.E.,and Zapata, N. (2016).
Factors Affecting Resto-Bar Customer Satisfaction: Imperatives for
Philippirs Restaurateurs Pursuing Repatronage. Journal of International
Trade and Commerce, Vol. 22 No. 3, pp. 1-22.

35
El Saghier, N. M. (2015). Managing Service Quality: Dimensions of service
quality: a study in Egypt. International Journal of African and Asian
Studies. Vol. 9, 2409- 693

Borhave S. (2012). Service Quality Management: A Literature Review. Book

Ethos 5 (2)

Ghani E., Said J., and Yusuf S., (2012). Service Quality Performance
Measurement Tool in Islamic Non-Profit Organisation: An Urgent Need.
International and Business Management Vol 5, No 2.
Khan, S., Hussain, S, M., and Yaaqov. F. (2013) Determinant of customer
satisfaction in fast food industry: A study of fast food restaurants
Peshavar Pakistan

Hanaysha, J. (2016). Testing the effect of Food Quality, Price Fairness, and
Physical Environment on Customer Satisfaction in Fast Food Restaurant
Industry. Journal of Asian Business Strategy

Saleem, H. and N. S. Raja (2014) "The Impact of Service Quality on Customer

Satisfaction, Customer Loyalty and Brand Image: Evidence From Hotel
Industry of Pakistan." Middle-East Journal of Scientific Research.

Nelson, D.,J.G-Raymond and K.G. Ben (2011). Restaurant Consumers Respect

Patronage A Service Quality Concern, International Journal of Hospitality
Management, 0:329-336.

Canny, IU. (2014). Measuring the Mediating Role of Dining Experience Attributen
on Customer Satisfaction and it's Impact on Bahavioral Intentions of
Casual Dining Restaurant in Jakarta. International Journal of Innovation
Management and Technology.

Bitner, M., Zeithaml, V. And Gremler, D. (2010). Technology Impact in the Gaps
Model of Service Quality. International Journal of Business and Social
Science.

Prybutok, H. G. (2017). Determinants of Custumer-Perceived Service Quality in

Fast-Food Restaurant and Their Relationship to Customer Satisfaction
and Behaviral Intentions. Quality Management Journal, 35-50.

36
Prestine, C. (2013). "Service quality perceptions and customer loyalty in
casinos." International Journal of Contemporary Hospitality Management
25(1): 49-64.

Mokhlis, S. (2012). The influence of service quality on satisfaction: a gender

comparison. Public Administration Research, 1(1): 103-112. doi:
10.5539/par.v1n1p103.

Al-Tit, A. (2015). The Effect of Service and Food Quality on Customer

Satisfaction and Hence Customer Retention. Asian Social Science; Vol.
11, 23.

Amin, M., Yahya, Z., Ismayatim, W. F. N., Nasharuddin, S. Z., Kassim, E. (2013).
Service Quality Dimension and Customer Satisfaction: An Emperical
Study in the Malaysian Hotel Industry. Service Marketing Quarterly 34 (2),
115-125.

Baker, D. (2013). Service Quality and Customer Satisfaction in the Airline

Industry: A Comparison Between Legacy Airlines and Low-cost Airline.
American Journal of Tourism Research 2 (1), 67-77.

Tan, et al. (2014). Service Quality and Customer Satisfaction in Chinese Fast
Food Sector: A Proposal For CFFRSERV. Advances in Hospitality and
Tourism Research (AHTR), 2(1): 30-53, 2014. An International Journal of
Akdeniz University Tourism Faculty ISSN: 2147-9100.

Liu, W.K, Lee, Y.S, & Hung, L.M (2016). The interrelationships among service
quality, customer satisfaction, and customer loyalty: Examination of the
fast-food industry. Journal of Foodservice Business Research Volume 20,
2017 - Issue 2.

Izogo, E. E., & Ogba, I. E. (2015). Service Quality, Customer Satisfaction and
Loyalty in Automobile Repair Sector. Into Journal of Journal of Quality &
Reliability Management, 32(3), 250-269.

Enayti, T., et al. (2013). Measuring Service Quality of Islamic Azad Univesity of
Mazandaran using SERVQUAL Model. Iranian Journal of Management
Studies, 6(1), 101-118. Retrieved November 20, 2014, from Ebscohost
database.

37
 Chapter 3

RESEARCH DESIGN AND METHODOLOGY

This chapter explains the research design and methodology employed in

the study. Among the topics included herein that were given explanations were

the following: the research methodology, sources of data, research instrument,

data gathering procedure, respondents, and statistical tool.

Research Design

The study utilized quantitative research design specifically the

descriptive-correlational design using quantitative type of instrument in the data

gathering method regarding the customers’ profile, the level of service quality,

and customers’ satisfaction in Daet, Camarines Norte. The descriptive design

was used to describe the population or the situation given in the study. It

focused on describing the demographic attributes of the customers, the level of

service quality, and the customers’ satisfaction. In addition, the descriptive

correlational research design was used to measure the statistical relationship

between the customers’ profile, the level of service quality, and the customers’

satisfaction. The study also used convenience sampling method to select the

number of respondents. Research-made survey questionnaires were used as

38
the main instrument of this study to determine the level of service quality and its

impact on customers’ satisfaction (Punch 2013).

Sources of Data

The 250 customers from the different fast food restaurants in Daet were

chosen as the respondents of the study. Their responses to the survey

questionnaires were the primary source of data. The secondary sources of data

were the literatures and theories which the researchers were able to gather and

search on the course of the study.

Sampling Method

The convenience sampling method was used to collect data from the

respondents who are conveniently available to participate in study. The

respondents were found at the different fast food restaurants in Daet, Camarines

Norte. According to Etikan, I., Musa, S. A., Alkassim, R. S. (2015), convenience

sampling (also known as Haphazard Sampling or Accidental Sampling) is a type

of nonprobability where members of the target population that meet certain

practical criteria, such as easy accessibility, geographical proximity, availability

at a given time, or the willingness to participate are included for the purpose of

the study.

Respondents of the Study

39
 The respondents of the study are the customers from the different fast

food restaurants in Daet which were selected randomly. The researchers chose

five well-known fast food restaurants here in Daet; Jollibee, McDonalds,

Greenwich, Shakey’s and Graceland. The 50 customers from different fast food

restaurants were conveniently selected. A total of 250 respondents were the

source of the data.

Research Instrument

A researcher- formulated survey questionnaire which composed of two

parts. The first part dealt with the respondents’ profile of the customers which

contains items such as: age, gender, civil status, educational attainment,

occupation, monthly income, and most visit fast food restaurant. The second part

dealt with the respondents’ assessment on the level of service quality which

includes items about: Reliability (the ability to perform the promised service

dependably and accurately); Assurance (the competence of the system and its

credibility in providing a courteous and secure service); Tangibility (the

appearance of physical facilities, equipment, personnel and communication

materials); Empathy (the approachability, ease of access and effort taken to

understand the students’ needs); and Responsiveness (the willingness to help

the students and provide prompt service). The variables will be measured on a 4

Likert- scale ranging from 1 - strongly disagree; 2 - disagree; 3 - agree; and 4 -

strongly agree.

40
 The respondents evaluated the level of service quality of fast food restaurant

using a 5 point-rating scale, mean score and verbal interpretation:

Scale Mean Score Descriptive Measure and Verbal

Interpretation

5 4.30 – 5.00 High Level - Excellently Achieved

4 3.50 – 4.20 Moderately High Level - Achieved Extensively

3 2.70 – 3.40 Satisfactory Level - Achieved Satisfactorily

2 1.90 – 2.60 Low Level - Needs Improvement

1 1.00 – 1.80 Very Low Level - Needs Full Attention

Data Gathering Procedure

The researchers requested permission from the administrators of the fast

food restaurants in Daet. The researchers distributed the validated survey

questionnaires to the 250 customers of the different fast food restaurants in

Daet. The data gathered by the researchers from the survey questionnaire were

collected, recorded, and analyzed. The responses were carefully tallied using an

automated tally sheet to facilitate the counting and computation of the weighted

mean. The average weighted mean was computed to sum up the weighted

mean of the 10 parameters from each of the descriptive measures of level of

service quality dimensions such as reliability, assurance, tangibility, empathy,

and responsiveness.

Statistical Tool

41
 The study utilized the simple descriptive statistics specifically frequency

count, percentage, weighted mean, and average weighted mean. Frequency and

percentage technique were used to quantify and describe the profile of the

profile of the customers in terms of: age, gender, civil status, educational

attainment, occupation, and monthly income. Weighted mean was utilized to

determine the level of service quality of fast food restaurants in Daet based on

the assessment of the customers. The researchers also used automated tally

sheet to facilitate the counting and computation of the weighted mean. The

average weighted mean was computed to sum up the weighted mean of the 4

parameters from each of the descriptive measures of level of service quality

dimensions such as reliability, assurance, tangibility, empathy, and

responsiveness.

The Pearson’s Product Moment Correlation Coefficient was utilized to

measure the significant relationship between the customers’ profile and the level

of service quality of the fast food restaurants in Daet. The Pearson’s (r)

determines the linearity of the relationships between two variables in such a way

that the results of r should be interpreted only after its value has been found to

be significant at 0.05 level p<0.05 (Creswell, 2013). The level of service quality

was analyzed based on the following ranges and adjectival values:

4.30 – 5.00 High level HL

3.50 – 4.29 Moderately High Level MHL

2.70 – 3.49 Satisfactory Level SL

1.90 – 2.69 Low Level LL

42
 1.00 – 1.89 Very Low Level VLL

The analysis of the significant relationship was based on the following

ranges and adjectival interpretations:

1.00 - Perfect Relationship

0.80 – 0.99 - Very Strong Relationship

0.60 – 0.79 - Strong Relationship

0.40 – 0.59 - Moderate Relationship

0.20 – 0.39 - Weak Relationship

0.01 – 0.19 - Very Weak Relationship

0.00 - No relationship

43
 Notes

Etikan, I., Musa, S. A., Alkassim, R. S. (2015). Comparison of Convenience

Sampling and Purposive Sampling. American Journal of Theoretical and
Applied Statistics. Vol. 5, No. 1, 2016, pp. 1-4. doi:
10.11648/j.ajtas.20160501.11
Psychologists Use Descriptive, Correlational, and Experimental Research
Designs to Understand Behavior (n.d). Retrived from
http://open.lib.umn.edu/intropsyc/chapter/2-2-psychologists-use-descriptive-
correlational-and-experimental-research-designs-to-understand-behavior/

44
45