A STUDY OF CUSTOMER SATISFACTION BY DINESERV ATTRIBUTES IN INDIA

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A STUDY OF CUSTOMER SATISFACTION BY

DINESERV ATTRIBUTES IN INDIA

STUDENT NAME: MUTHU KUMAR SHANMUGAM

STUDENT NUMBER: 11041142 / 2260948

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AKNOWLEDGEMENT

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ABSTRACT

The objective of this study is to investigate the customer satisfaction by 14 DINESERV attributes (i.e. quality, taste, environment, value price) by two different restaurants (McDonalds & Anjappar) in Indian fast food Industry context. A web survey questionnaire was distributed to people in various parts of India by email and Facebook. Responses are collected and regression analysis technique is used to analyze the data. The findings showed that there is a significant positive relationship between customer satisfaction and McDonalds service, hospitality, cleanliness, packing and some other important DINESERV attributes. The findings also showed that there is significant positive relationship between customer satisfaction and Anjappar taste, quality, price and healthy food. From the findings this paper suggest some important implications for both the restaurants to increase their customer satisfaction level and to have greater revenue.

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LIST OF TABLES

TABLE 1 RESPONDENTS GENERAL INFORMATION………....28

TABLE 2 RESPONDENTS AGE INFORMATION………28

TABLE 3 CUSTOMERS GENERAL THINKING ………...29

TABLE 4 AVERAGE VISIT TO FAST FOOD RESTAURANT……….29

TABLE 5 FREQUENCY OF VISIT TO MCDONALDS……….30

TABLE 6 FREQUENCY OF VISIT TO ANJAPPAR………...31

TABLE 7 AVERAGE SPENDING ……….32

TABLE 8 REGRESSION ANALYSIS RESULTS………..33

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1. INTRODUCTION

Fast food is world’s fastest growing food type that is quick, reasonably priced and readily available which is perceived as an alternative for home cooked food and is also convenient and economical for a busy lifestyle. Typically fast foods are high in calories, fat, saturated fat, sugar and salt. There are many definitions, which are proposed for fast food in literature. According to Bender and Bender (1995), fast food is a general term used for a limited menu of foods that lend themselves to production line techniques, supplier tend to specialize in products such as hamburgers, pizzas, chicken and sandwiches. Data Monitor (2005) define fast food market as the sale of food and drinks for immediate consumption either on the premises or in designated eating areas shared with other food service operators or for consumption elsewhere. Fast food consumption continues to increase, as fast food sector is more global than past years. Increase in the fast food consumption has led to many international brands like McDonalds, Pizza Hut and KFC to spread their wings in various parts of the world especially in developing nations like India where there is more opportunity to grow (Anita & Singh, 2007).

In recent years there is change in food consumption trend in urban parts of developing countries as more people are increasingly eating food outside of their homes and most people prefer eating in fast food restaurants (Kaynak et al, 2006). The reason for people moving to fast food restaurant in national and international level is because they do not have time to cook in their urban fast life (Platania and Donatella, 2003). According to Atkins and Bowler (2001) people are looking for quick meal solutions because of busier life style and working families with children. People are leading busy life and time for leisure from work is squeezed which reduces the time allocated for cooking in many urban families. This consequently may place more emphasis on fast food restaurants. Over the years the proportion of married women in the work force has increased resulting in women having less time to plan and prepare meals at home and todays meals are more an after thought rather than a planned occasion and people find themselves hungry with no time to cook so they eat out which has resulted in boom of fast food industry (Mogelonsky, 1998). Thus due to busy life style people preferring fast food and there is rapid growth in fast food industry in all over the world especially in urban areas.

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resulted in an increase in demand for ready to eat. There are many MNC companies of food industries especially in fast food industry that are rushing to capture the opportunity of available market needs (Anita & Singh, 2007). In India food industry is expected to grow by 9% in 2012 and by 7% by 2016 and by the end of 2016 there might be six million food units in India (Euromonitor, 2013). In 2011 fast food service in India has showed no signs of slow down growth besides economic downturn and grow even faster than the past period (Euromonitor, 2013).

India’s diversified states consist of different culture in different regions, which leads to food diversity. Traditionally Indians like to have home cooked food, as there is less awareness about eating outside of home. Liberalization of Indian economy in the early 1990s led foreign MNCs to operate their business in India. Due to subsequent entries of few MNC fast food operators like McDonalds and Pizza Hut there has been change in food habits among Indian customers (Gupta, 2003). Initially multinational fast food outlets faced protests and were not accepted by Indian customers due the reason that they served only non-vegetarian and had no option of vegetarian meals. However, by increasing awareness of western culture led to slight shift in food consumption patterns among Indian customers (Anita & Singh, 2007). Thus the influence of western culture fast food gained the acceptance of Indian people and multinational fast food players started adopting basic requirements of Indian customers like providing vegetarian meals and excluding beef and pork totally from the menu as majority of Indian cultures do not have habit of eating beef and pork (Anita & Singh, 2007). Recently fast food industry in India is getting changes to adopt Indian food requirements and has gained acceptance from Indian young generation. India owns seventh place for weekly fast food consumption among the countries in Asia pacific region. An average of 70 percent of urban Indians consumes food from fast food take away restaurants once a month or more frequently. Indian fast food industry is growing 40 percent a year and is making billion dollar sales per year (Anita and Singh, 2007).

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1.1 IMPORTANCE OF CUSTOMER SATISFACTION

Due to increase in number of customers having fast food in India there are many fast food chain restaurants like McDonalds, Pizza Hut, Anjappar, and KFC that are rushing to open many outlets in India. There is competition between these fast food outlets and restaurants that satisfy their customers are tend to have competitive advantage over others. Customers have many choices to choose one fast food restaurant and with years of experience in dining out customers have more expectations in terms of quality, price, and service in which fast food restaurants have to satisfy customers to make them revisit. The fast food restaurants, which fail to satisfy the customers, may have decline in customer revisit and in today’s life fast food restaurants providing great service and value and satisfying their customers have a competitive advantage over the competitors who fail to do. To meet the competition fast food restaurants are forced to satisfy their customer and trying to make them revisit.

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This paper is dived into five parts. First the paper introduces the past research and background about customer satisfaction and various DINESERV attributes involved. Second the paper discusses the methodology and third the paper discusses the results and then tries to analyze the results with the hypothesis and find if the hypothesis hold true or not. Fourth the paper discusses the reasons for the results by linking them to the literature review and also it discuses the implications of the study. Finally the paper concludes by providing the limitations of the study and the future research that may help the managers and other theorists.

2. LITERATURE REVIEW

Customer satisfaction is most important factor, which predicts the likelihood of customers returning to a restaurant. Oliver (1997) defines customer satisfaction as customer fulfillment response. Yuksel and Yuksel, (2002) indicate that customer satisfaction is important to food service managers because it leads to repeat patronage, brand loyalty and new customers through word of mouth promotion. According to Stevens et al (1995), restaurant customers determine which restaurant meet their quality and value standards and restaurants that fail to satisfy their customers will soon see a decline in customer counts as customers switch to competing restaurants. Also, Oh (2000) also shows that customer satisfaction is important for food service industry as it leads to customer revisit intention and new customers through word of mouth communication. Furthermore, study by Barsky (1992), study show that customer satisfaction has significant effect on customer purchase intention in four sectors like banking, pest control, dry cleaning and fast food industry. Moreover, Alexander et al (1994), finds that customer satisfaction and service quality have significant effect on future purchase intentions. Findings of Getty and Thompson (1994) on the relationship between quality of hotel lodging, satisfaction and recommendation by customers indicate that customer’s intention to recommendation is perception of both satisfaction and service quality with their personal experience. Also, they demonstrate that for a hotel industry food, beverage and price are important factors for customer satisfaction and customer intention to revisit. According to Nyer (1999), customer satisfaction is the heart of marketing and ability to satisfy customers is vital for a number of reasons. Nyer (1999) proposes that dissatisfied customers tend to complain more often and if service providers fail to properly address to such situations then in extreme cases dissatisfied customers may resort to negative word of mouth.

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2.1 FACTORS INFLUENCING CUSTOMER SATISFACTION

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their satisfaction in restaurants and price is the main concern for students when they make food purchase decisions.

According to Sulek & Hensley (2004) in highly competitive restaurant industry, customer satisfaction is the critical objective of business that helps to repeat purchase. Oliver (1999) defined customer satisfaction as an essential indicator for companies past, current and future performance. Anderson & Fornell (1993) develop two general conceptualizations of satisfaction as transaction specific satisfaction and cumulative satisfaction. The transaction specific satisfaction describes how happy is a customer with a product or service at a certain point of time. Cumulative satisfaction is a customer’s evaluation of the total consumption experience with a product or service to date which directly affects post purchase phenomenon such as attitude change, repeat purchase and brand loyalty.

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2.1.1 CUSTOMER SATISFACTION AND FOOD QUALITY

Quality is generally viewed as an attribute of a product or service and quality is also conceptualized as a measure of providing output in terms of their quality or service. Therefore, perceived quality is accepted as a form of overall evaluation towards purchasing products or service. From the customer view-‐ point, perceived quality is a highly subjective and relativistic phenomenon that differs based on who is judging the product and service. In restaurant industry customer satisfaction regarding quality differs from one customer to other as they may have different satisfactory levels.

Food quality is a fundamental component, which seems to accept for satisfying restaurant customers. Food is fundamental for restaurant business and there is no doubt that food quality has and will have an impact for customer satisfaction in restaurant business. A major challenge in restaurant business today is providing quality food which is not only compelling by customers but also to be as superior to business competitors. Hence quality food is an important factor to be successful in restaurant business (Young & soo, 2007). According to Taylor and Baker (1994) for customer satisfaction quality is factored as one of the key dimensions and customer satisfaction and quality are highly interrelated and Quality is also perceived as one of the core determinants of overall customer satisfaction (Oliver, 1996). Food quality is generally accepted as fundamental element for overall customer satisfaction in restaurants (Sulek & Hensley, 2004). According to Peri (2006) food quality is necessary condition to satisfy expectations and needs of customers. In Sulek and Hensely (2004) study investigates the importance of physical settings, quality and service in restaurants and finds food quality as most significant predictor for customer satisfaction. According to Susskind and Chan (2000) for customer satisfaction in Toronto and Canada restaurants, food quality is found as a significant determinant. According to Sulek and Hensely (2004) customers generally do not prefer going to a restaurant regularly not only because of friendly staff and atmosphere but also because of the quality of food which is an important factor that has greater impact on customer revisit intentions.

2.1.2 ENVIRONMENT AND SATISFACTION

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complexity than creating any other facilities to customers (Sulek and Hensely, 2004). There are many factors, which contribute to dining atmosphere in restaurants like noise level, temperature, lighting, music and others. Restaurants that embed these characteristics in the best possible way can create an expectation of dining experience for customers before the customer is served in the restaurant (Sulek and Hensely, 2004). Customers of full service restaurants may sit for a relatively longer time and making seating arrangements comfortable to customers make customers feel comfortable and influence for return intention. According to Sulek and Hensely (2004) in restaurants where seats are very close to each other make customers to feel like crowded and customers may feel annoy and physiological discomfort. Sulek and Hensely (2004) also state that most of the customers tend to wait for seating in restaurants during busy times and physical comfort in waiting area may also affect overall customer satisfaction and repeat patronage intentions of customers. Creative changes in atmosphere make restaurants appealing to more customers. Furthermore Sulek and Hensely (2004) suggest that a spacious waiting area would help in customer willingness to wait in restaurants till they get seating arrangements.

2.1.3

POSITIVE WORD OF MOUTH AND CLEANLINESS OF RESTAURANT

According to Oliver (1980) customer satisfaction and customer behavior is not same however they are related because customer satisfaction outcome may have influence on customer’s behavior to repeat the purchase. Oliver (1980) states that certain behavior outcomes of customers because of their satisfaction might create bonding with company that offers product or service and it may create brand loyalty. According to Boulding et al., (1993) customers’ behavior when they are satisfied with a company favors post purchase intentions among customers and makes them to say positive word of mouth about the specific company’s product or service by recommending others and they will remain loyal to the specific company. According to Oliver (1999) positive word of communication by customers help company to attract other customers with no cost. Oliver (1999) states that customers who recommend the product or service to others are essential for the success of business and this can be achieved through customer satisfaction.

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identifies certain conditions where customers are not satisfied and dissatisfied customers will start complaining or may switch to other company’s product or service. These dissatisfied customers will have different behaviors like complaining about product or service to company, complaining to friends or external agency and switching to competitors, which could result in decreasing the business. According to Sulek and Hensely (2004) restaurant customers are more sensitive to cleanliness and they will remember severe problems regarding restaurant cleanliness than they remember problems about food and service and are more likely to avoid that restaurant in future.

2.1.4 SERVICE QUALITY AND SATISFACTION

According to Zeithamal et al (1996) for surviving in today’s competitive business environment, quality service is considered to be as essential strategy. It is important for company and organizations to provide best service to customers and survival of their business depends on the quality of service they provide to their customers. Spreng and Singh (1993) study of banking customers failed to find the relationship between service quality and customer satisfaction. However Oliver (1993) suggests that service quality is antecedent for customer satisfaction. Also Oliver (1993) argues that customer satisfaction is a consequence of service quality. According to Parasuraman (1994) service quality is very important for customer behavior intentions. According to Oliver (1999) service quality is important for customer satisfaction, which makes customers to behave in positive ways. Cronin and Taylor (1992) states that service quality have major impact on customer satisfaction that has positive effect on purchase intentions of customers. Cronin and Taylor (1992) study states that service to a customer is more important than quality for customer satisfaction and service have a more consistent effect on customer purchase intentions. Parasuraman et al. (1994) defined that perceived service quality is important for customer behavioral intentions by using SERVQUAL scale. According to Sulek and Hensely (2004) customers evaluate the quality of service they received in restaurants. They also stated that customers will judge the restaurants service when they are waiting in busy times by length of time they are waiting, fairness of seating order and most important is politeness of staff.

2.1.5 FOOD PACKAGING AND SATISFACTION

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think that good packaging reflects the quality of product and good packaging reflects conditions of product, which is sold. According to Rettie and Brewer (2000) restaurants use range of products for food packaging by combining colors, designs, shapes, symbols and messages to customer. These range of packaging help customer to get attracted and sustain their attention for the products packing. Customer opinion about buying a product is depended on how the product satisfies customer and in situations when customer have low knowledge about the product, packaging becomes a critical factor for customer to choose the product. According to Kivela et al. (1999) the presentation of food is an important attribute in modeling customer satisfaction in dining and their return patronage.

2.1.6 VALUE FOR MONEY AND SATISFACTION

Value of money may be explained as something is only worth for somebody who is willing to pay for it. It is the customers who decide whether product or service is value for money. A product or service can only be said as a value for money if the targeted customers can actually afford it or not. Value for money can also be very personal thing as different customers may have different perceptions of value for a particular product or service. According to Anderson et al (1994) customers who perceive that they received value for money are more satisfied than customers who do not perceive value for money. Value for money is relative measure for the cost of a product or service when compared to competitors. Value for money can also be defined as customers overall evaluation of what they give and what they received. Anderson et al (1994) states that customer satisfaction in terms of value for money has greater influence on customer’s opinion about revisit intention. In making decisions to return to a company’s product or service, customers are likely to consider whether or not they received product or service that is valued for the money they paid for.

2.1.7 FOOD HYGIENE AND SATISFACTION

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restaurant experience. Sulek and Hensley (2004) note that customers may have high interest in healthy foods.

2.1.8 HOSPITALITY AND SATISFACTION

According to Sulek and Hensley (2004) Interpersonal skills of restaurant employee can influence the customer satisfaction and employees social sensitivity, friendliness, helpfulness and politeness help to create a good impression with the customer. They also suggested that workers reaction in case of service delay help customer perception to wait in the similar way customers may become aggressive when restaurant workers fail to explain service delay. The interpersonal skills of restaurant workers are important during delivery of service and customer’s perception of how they are treated during the service have significant effect on customer satisfaction on service (Sulek and Hensley, 2004). Sulek and Hensley (2004) also stated that in restaurants customers do no only appreciate the service provided by service worker but they may also reward by means of higher tips, which is an indicator for customer satisfaction.

2.1.9 TASTE, FRESHNESS AND FOOD SAFETY

According to Kivela et al (1999) taste of food is regarded as important attribute for restaurant customers in their dining experience. Many customers have become food savvy and the taste of food in restaurants has become more important. Taste of food is also believed to have influence over customer satisfaction and their intention to revisit (Kivela et al., 1999). According to Kivela et al (1999) food freshness refers to fresh state of food, which is related to aroma, crispiness and other factors. Freshness of food is identified as an important factor for quality that leads to customer satisfaction (Kivela et al., 1999). In restaurant industry food safety is an important issue for all times. Restaurants have been noted as major reason for foodborne illness outbreaks and even a small mistake in food preparation can affect many people in restaurants. According to Golan et al., (2004) one of the most memorable events about food safety is in US Jack in the Box E. coli outbreak in 1993 and because of this there are 700 people reported illness and four children died because of this issue of eating contaminated food purchased at 73 jack in the box restaurants.

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lawsuits. According to Buchholz et al. (2002) numbers of restaurant-related foodborne incidents were positively related to restaurant size, the number of foodborne incidents in the previous year, and observation of food safety code violations during the visit of sanitation inspector. Considering the importance of food safety at restaurants, it is surprising that only a few studies have asked consumers about their perceptions on this issue. Customer’s perception regarding food safety is important for managers as this may result in switching of customers to other restaurants which they think are safe. Henson et al (2006) study found that cleanliness was the most often cited attribute used by consumers to determine food safety at restaurants while other attributes used by consumers to evaluate food safety at restaurants included overall quality of the restaurant, level of patronage, and external information, which includes restaurant reviews and views of friends and family.

2.1.10 ACCESSIBILITY AND NUTRITION VALUE

Consumers’ ease of access to fast food is a priority for the industry, as business planners have long been aware of the potential to maximize sales by selecting restaurant sites that ensure close proximity to the consumer base. In restaurant site selection, business planners consider neighborhood demographics and the presence of other businesses, community organizations, and aspects of the neighborhood roadways that may draw in potential customers.

Increased consumption of fast food has raised the percentage of overweight people and there is an importance of disclosing nutrition content of food in fast food restaurants. Food purchased for immediate consumption is largely from fast food restaurants, which are exempt from disclosing nutrition value. Some fast food restaurants make their nutrition value available on websites, which is not available for the customers who are having food in fast food restaurants. According to Bassett (2004) most consumers are unaware of the high levels of calories, fat, saturated fat, and sodium found in many menu items. Bassett (2004) also suggested provision of nutrition information on restaurant menus could potentially have a positive impact on public health by reducing the consumption of less-healthful foods.

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menu and restaurants providing this useful information satisfy more customers than others. According to Cranage et al (2004) restaurants providing nutritional information will satisfy their customers by helping them to choose healthful food choices from menu and increase customer’s nutrition related attitudes which results in overall positive experiences for customers.

2.2 PURPOSE OF RESEARCH

India is the world’s second largest producer of food next to china (Scribd, 2012). It is estimated that total food production of India is likely to double in the next ten years. For fast food players either it is foreign based MNC or Indian MNC, India is having rapidly growing middle class population and changing life style which made India as one of the fastest growing fast food markets in the world. The annual growth rate of fast food industry in India is about 25-30% (Bharatbook, 2012) and almost world’s big fast food brands have succeeded in India and are posting appreciable growth. Because of this rapidly growing market, many foreign based fast food brands and Indian fast food brands have chalked out massive plans for expanding their business and presence throughout the country (Bharatbook, 2012) particularly foreign based fast food brands are aggressively increasing their presence in India like “Yum Brands Inc” is planning to have a massive expansion in India with opening about 1000 fast food outlets by 2015. Indian full service restaurants are expected to reach INR 3, 031 billion sales by 2016 growing at a constant rate of 2.4% over the forecast period (Euromonitor, 2013).

Fast food players such as Pizza Hut and McDonalds are continuously increasing their

market share in India by opening many outlets as possible (Euromonitor, 2013). Fast

food continued to be highly fragmented with no single player having maximum market share in 2011 and McDonalds led to fast food category with value share of 2% followed by KFC in India (Euromonitor, 2013). In India maximum fast food sales is accounted by road side shops and in resent years there is an increase in number of modern fast food restaurants which is increasing its market share slowly (Euromonitor, 2013). With increase in number of double household income in Indian families customers are ready to try different food and because of this food service is food service industry in India are likely to generate huge revenue and food service sales has grown to 22% in leisure locations (Euromonitor, 2013).

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particularly made a comparative analysis of McDonalds, which is MNC with Nirula’s, which is Domestic Indian fast food restaurant and found that these fast food restaurants should focus on quality and variety of food for Indian customers. There is a limitation in this study that data was collected from National capital region that limited the sampling quality and only seven attributes are used to find the customer perception about fast food. Other than this they made comparative study with foreign-based MNC McDonalds with domestic fast food restaurant Nirula. Based on this limitations researcher thought making a study in analyzing two MNC fast food restaurants in India one which is foreign MNC and other Indian MNC fast food restaurant in terms of customer satisfaction and performance measure with sample customers from various parts of India will be useful for the managers of fast food restaurants in India. The major fast food retailers are planning to expand their wings in India and making a study about Indian fast food industry and finding their satisfaction level among customers may be helpful for the managers of these big brands to understand the customer needs and this paper might also be important for the managers of small fast food chains in India to know about what they are lacking and providing an opportunity for them to develop in future. Based on the DINSERV attributes affecting the customer satisfaction this paper will seek to estimate the level of customer satisfaction and performance of foreign-based MNC say McDonalds and Indian based MNC say Anjappar.

Traditionally over ages, fast food for an average Indian customer meant for having paranthans, roties etc… and these were available at the roadside dhabas or at the local shops. There were no established eating-places like restaurants for Indian customers. During 1920s Nirulas family started the trend of opening food outlets in the city especially in the north part of India. Initially Nirulas entered more into catering and hotel business and only in late 1950s and in early 1960s they started opening restaurants, which serve fast food. Nirulas started the trend of fast food outlets over the country and in those days Nirulas was considered to be the pioneer in fast food industry in India. There were many local joints opening fast food restaurants in 1980s. After 1991 liberalization act by Indian government many multinational chains made their entry into Indian fast food market. In 1996 there was India entry into world food market when international brands like McDonalds, KFC, Pizza Hut and Dominos started their outlets in India (Anita & Singh, 2007). After that it was mainly these international brands and some Indian restaurants that made up the fast food market in India, which reached middle class customers. All the foreign brand fast food restaurants entered India with their own strategy and they started studying Indian taste and style of food.

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and other countries. Anjappar is a south Indian fast food restaurant that is known for its “chettinadu” style of food, which was famous in south part of India. First its founders in Chennai city as a small outlet started it and today Anjappar is established almost in every city in south India. Anjappar is one of the leading South Indian restaurants with more than 40 outlets operating in many countries like US, England and Dubai serving its customers for more than 40 years.

McDonalds first entered Indian market in 1996. In the early stage McDonalds had problems like Indian people are not aware of western style food and expensive price when compared to other Indian fast food outlets. Due to increase in awareness among Indian people about western culture they started adopting western style fast food that made McDonalds a positive growth in India. Today McDonalds has around 250 outlets in India and is planned to expand to 450 outlets by 2013 (Slideshow, 2012). McDonalds India vision is to be best quick service restaurant experience supported by principals and core values. McDonalds first target market is to focus on metro cities like Mumbai, Chennai and Delhi where there is relatively high income and where people are exposed to western food and culture. Later McDonalds moved to small cities like Pune and Coimbatore. McDonalds opened its door in India at New Delhi on October 1996 and before launch McDonalds trained its Indian management team in Indonesia and US for providing western style service to Indian customers. McDonalds underwent high degree of adaptation in India by knowing about local culture and special Indian menu where there is no beef and pork. Now McDonalds is a restaurant with friendly, smiling staff and fast service which also emphasis on cleanliness (Scribd, 2012).

2.3 DINESERV ATTRIBUTES

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According to Dube, Renaghan, & Miller (1994) elements such as atmosphere, friendly staff, menu, waiting time, and food quality and food taste have a significant influence on diners’ intent to return to the restaurant. In their study the elements had different scores on different dining occasions. Customers who visit for pleasure dining were less sensitive to the waiting time but cared about menu variety, while business diners were less concerned about menu variety but cared about waiting time. A study conducted by Pettijohn, Pettijohn & Luke (1997) determine which restaurant attributes were most important in contributing to customer satisfaction of fast food restaurant patrons. They found that food quality was rated as most important, followed by cleanliness and value. In their study menu varieties and restaurant atmosphere are found to be least important in customer satisfaction. Qu (1997) made a study of customer satisfaction and return intention in Chinese restaurants and found that food, environment, service, advertising and value price are important attributes determining customer satisfaction in Chinese restaurants. Lee (2004) made a study of college student’s perception in university dining operations. Her results showed that dining environment, competency of employee, menu, price and nutritional information had an influence on the college students’ overall satisfaction level. The study shows that dining environment was the most influential attribute in determining colleges’ students’ overall satisfaction level. Research conducted by Ranweer and Prabu (2003) examine customer satisfaction and customer return intention by word of mouth communication. Their study confirmed that positive word of mouth communication have strong association with customer satisfaction and return intention. According to Rust (1996) increase in advertising and promotional efforts will have word of mouth recommendations from friends, family and colleagues who are satisfied with a company. Kivela et al (2000) examined the effects of taste food, menu variety and nutrition on customer satisfaction.

Studies indicate that (Qu, 1997; Pettijohn et al., 1997; Lee, 2004) there are five important attributes affecting customer satisfaction like food quality, atmosphere, service quality, convenience and price and value. In Almanza et al., (1994) study there is 17 attributes like food quality, cleanliness, food safety, service, taste, price, and menu affecting customer satisfaction. According to Lee (2004), dining environment, price and nutrition information, and employee competency are considered as the most influential factors in determining customer satisfaction level. In Rettie and Brewer (2000) study, food packing was found as an important factor for restaurant and other food service industries.

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and Pettijohn (1997) study, food quality, service, convenient location, cleanliness and price are adopted. Atmosphere, friendly staff and food taste are adopted from Dube, Renaghan & Miller (1994) study. From Ranweer and Prabu (2003) study, word of mouth communication was adopted. From Kivela et al (2000) study nutrtion value of food is adopted. Food safety was adopted from Almanza et al (1994) study and food packing was adopted from Rettie and Brewer (2000) study. The researcher added three other attributes like food freshness, food safety and health issues from Almanza et al (1994) study. Based on this adaptation of DINESERV attributes the researcher decided to use following 7 attributes in this paper.

1. Service 2. Price 3. Food quality 4. Environment 5. Packaging 6. Taste 7. Cleanliness

2.3.1 Food Service and Packaging

Spring and Mackoy (1996) states service quality and customer satisfaction is inarguably two key concepts in restaurant industry. Spring and Mackoy (1996) also state that in the current competitive restaurant industry sustaining is achieved by delivering high quality service that makes customers to satisfy.

In Indian fast food industry service quality is highly important to satisfy customers (Gupta, 2003). Today with increase in foreign fast food restaurants entering into India it is very important for Indian fast food restaurants to give supreme importance for customer service. In India quality of service plays a tremendous role in influencing customer satisfaction and fast food joints are spending tremendous effort to measure and improve service quality. Indian restaurants treat customers as equal god and service quality is a global judgment for customer satisfaction in Indian fast food industry. Katarra et al (2008) shows that overall satisfaction of customers is highly dependent on the level and quality of service that the customers receive and in Indian context friendliness and personal warmth towards customer leads to higher service quality. Before entering into Indian market McDonalds trained its staff in abroad for providing the same service quality as in other countries. Today McDonalds is providing friendly service that is appreciated by many people.

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industry depends on good packaging of food, as most of the customers prefer take away food (Jung 2005). The fast food restaurants need to have better packing to ensure the food will remain with same quality and taste (Paul & Dennis 2001). Food packaging in fast food restaurants has provided customers with brand identification that assures uniform and reliable quality. In many developed countries packaging innovations are developed with the identification of customer needs and economy status (Anon, 1988). As McDonalds is having global operation it may adopted better technology for packaging when compared to Anjappar. Based on this argument the paper will try to prove the following hypothesis.

H1: McDonalds have positive influence on customer satisfaction in terms of service quality and food packaging when compared to Anjappar.

2.3.2 Food price and Taste

Customers of fast food restaurant are mostly middle class people who consider much in price of food (Tillotson, 2003).

The concept of perceived price is based on the nature of the competitive oriented pricing approach. This approach focuses on customers concerns about whether they are being charged more than or about the same as charged by competitors. Customer’s perception of reasonable prices in the fast-casual restaurant industry may enhance the effect of quality of service on customer satisfaction (Caruana et al., 2000).

In India food price is not so high especially in local fast food outlets. In India customers are looking for value for money, as majority of population is young and middle class (Gupta 2003). Because of this the increase in food price in India may limit the purchasing power of customers and they switch to competitive restaurants that operate on considerable price (Mitcheel, 2008). For McDonalds the cost of conducting business is relatively high when compared to domestic fast food restaurants. Due to this high operation cost for McDonalds in India the food cost alternatively goes high for the customers. As Anjappar is a domestic fast food restaurant it has comparatively less operation cost than Anjappar and alternatively the food cost is cheaper than McDonalds. In developing countries large portion of customers are attracted by lower food price

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has high influence on customer satisfaction. Based on this argument the paper will try to prove the following hypothesis.

H2: Anjappar has positive influence on customer satisfaction in terms of price of food and taste when compared to McDonalds.

2.3.3 Food Quality, Environment and Cleanliness

Food quality is accepted as fundamental component to satisfy restaurant customers. The quality of food can be defined whether it fulfills the needs of customers. According to Mattila (2001) food quality was the most important attribute for overall restaurant customer satisfaction. MacLaurin and MacLaurin (2000) states out of nine factors food quality was one of the important attribute for restaurant customer satisfaction. McDonalds is very well used to adopt food quality procedures in various countries and adapting to Indian food quality is not a problem for McDonalds.

The atmosphere of a dining establishment may also affect customer satisfaction and

repeat patronage. Atmosphere includes many aspects: cleanliness, odor, lighting,

temperature, color, decor, and music (Sulek & Hensley, 2004). Customers are more

likely to remember the negative parts of atmosphere, such as a very cool temperature

or lack of cleanliness, than the positive aspects of the dining experience (Chung &

Hoffman, 1998; Sulek & Hensley, 2004). People are eating out more common and

they increasingly put premium on saving time and eating healthy food in better eating

environments (Tillotson, 2003). The physical atmosphere of restaurants creates an

image for customers and the physical environment determine the level of customer

satisfaction in restaurants (Raajpoot, 2002).

Cleanliness in a restaurant is more important than most people realize. Beside from

the obvious health codes and issues.

Sulek and Hensley (2004) states customers are more sensitive to cleanliness and restaurants that are clean has good opinion among customers and makes them satisfied. Nelson (2010) states that cleanliness of restaurant is important factor for determining customer service quality in restaurants. McDonalds is very well known for its cleanliness in all its outlets and based on this argument the paper will try to prove the following hypothesis.

H3: In terms of food quality, environment and cleanliness McDonalds have positive

influence on customer satisfaction when compared to Anjappar.

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The questionnaire was constructed in such a way that it is easy to respond for the respondents and to get as much as data from the respondents regarding their opinion about the two restaurants in various DINESERV attributes. Various DINESERV attributes are used in the questionnaire because the researcher thought asking as many as questions can increase the quality of the data collected. All the questions consists of close ended answers which makes the respondent not to struggle to answer the questions and also it is convenient for the researcher to use the responses in SPSS by converting the answers into numerical data. Closed ended questions also helped researcher by making respondents answer maximum questions instead of skipping them. The questions are also asked to get general information data of dining from the respondents like their age and average spending. The minimum requirement age of respondents is set to18 as the researcher thought respondents who are 18 and above will provide reasonable data. The samples are limited because the researcher was able to get only limited email IDs of customers who use to dine in India and during the survey the researcher was only able to reach limited customers in Facebook which is a social website to reach random people. Because of this reasons the sampling was limited to a small number of respondents. Besides this the researcher was able to meet respondents all over the India and very few respondents are not aware of Anjappar restaurant as they are from north part of India and Anjappar was well known only in south part of India. This again reduced the quality of sample collected as they skipped most of the questions asking about Anjappar. After completing the survey the researcher was able to get only 160 responses and this is because the questionnaire was emailed to the customers in India and a very few number of total samples responded to the survey and as researcher is in England at the time of survey and as the research is about Indian fast food customers it is very difficult to reach random people in India and this reduced the number of respondents completed the survey.

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3. METHODOLOGY

For investigating relative importance of DINESERV factors (i.e. food quality, convenience, price and value) that effect customer satisfaction, the selection of questionnaire survey for sample customers increases the accuracy of results (Woo, 2009). Survey methods using self-administrated questions are a tool to determine respondent’s opinion, preferences and perceptions towards fast food (Farzana, 2011). Alikar (1995) study adopts questionnaire study was adopted for analyzing marketing strategies of fast food restaurant in USA and Canada. Questionnaire survey provides accurate data for customer choice on dining quality (Hyun, 2008). Survey method aims to produce generalizations about populations by collecting information from samples. Survey research includes various sampling designs and techniques, use of interviews and self-completion questionnaires with quantitative analysis (Thomas, 2004). Also Thomas (2004) also stated that traditional method to conduct survey is by questionnaires and questionnaire is responded without any assistance to the respondent. According to Gay (1992) descriptive research that involves collecting data helps to test hypothesis and to answer research question.

Based on these studies a quantitative approach with questionnaire type of methodology is adopted for this paper. The questionnaire consists of three parts in which first part was designed to measure characteristics of respondents to find their opinion about fast food restaurants. The second part is very important for this research paper and it is aimed to find the customer satisfaction and performance of two fast food restaurants, which are planned to use for this research. As mentioned in the literature the second part of questionnaire uses 7 DINESERVE attributes and with these 7 attributes a set of questions will be developed asking customer satisfaction level for both the restaurants. The third part of the questionnaire consists of questions asking for demographic information like age and gender to respondents. For the convenience of the participant’s closed-ended survey questionnaires were used to answer and it is also convenient for the researcher to interpret the results from responses collected.

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The target population for this survey is the random customers in India. Facebook was used as the tool for reaching customers as researcher thought it as powerful tool for reaching random customers. Other than this list of customer email IDs who use to dine in one of the famous restaurants in Chennai city that is in south part of India was collected with the help of the restaurant manager. These customers are asked to fill in the survey by sending an email to them. The Survey was started on 12th_{November 2012 and responses were collected for two} weeks of time period from the start date. The researcher hosted the survey by using Survey monkey official website. The Survey monkey will enable the researcher to develop his/her own survey and send it to the sample population. The respondents are asked to open the Survey monkey web link to participate in the survey. After completing the survey there will be a button called “DONE”. By clicking that button participants are able to complete the survey.

According to Thomas (2004) data analysis involve transformation of data and analyzing by statistical summarization and obtaining results for research question. Thomas (2004) also stated that responses of the survey will need to be categorized and coded where coding involves the construction of numerical values for each response and used for statistical analysis of data. After collecting all the responses the survey response will be re arranged in a Microsoft excel document defining numerical values for all the responses.

In Woo, Christy & Yen (2009) study multiple regression analysis was employed to measure the relative impact of DINESERV dimensions on customer satisfaction and revisit intention in university dining fast food. Based on this study the researcher planned to use multiple regression analysis to find customer satisfaction level related to 7 DINESERV attributes with two different fast food chains in India. A multiple regression analysis using SPSS tool will be employed to find the level of customer satisfaction in both the restaurants. SPSS stands for statistical package for social science. SPSS is a powerful computer program, which is capable for wide variety of statistical analysis and is used for many governments, business and academic purpose for making analysis. SPSS requires variables and they are items or attributes that are measured and recorded for each case and this could be the replies to one question of a survey. SPSS is an integrated series of computer program that enable user to read data from questionnaire surveys and other sources to manipulate them in various ways and to produce a wide range of statistical analysis and reports. With the help of SPSS tool the collected data will be analyzed and the hypothesis will try to be proved.

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strength of relationship between dependent and independent variable. ANOVA table results are used to conform the relationship between customer satisfaction and dependent variables. The tests are performed separately for two restaurants by analysing 7 DINESERV attribute to support the hypothesis. The researcher thought it could be the best way of analysing results to support hypothesis and arguments. In addition to this bar charts and pie charts are also used to support the results provided by statistical analysis which researcher thought it could be additional support for proving hypothesis. For SPSS analysis customer satisfaction by McDonalds and Anjappar is used as dependent variable and in the questionnaire there are questions asked to know the overall customer satisfaction by McDonalds and Anjappar. Customer satisfaction by McDonalds and Anjappar in relationship to 7 DINESERV attributes is used as independent variables in the analysis.

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4. RESULTS AND ANALYSIS

The sample consists of 160 respondents of which 46 are female respondents (35.7%) and 83 are male respondents (64.3%) and 31 respondents did not answer the question related to their gender. Most of the respondents are of young age indicating 51.9% of respondents belong to the age group of 18 to 24 and 39.5% respondents belong to the age group of 25 to 34. Very little respondents were found for the age group of 35 to 44, which is counted 3.9% and 44 to 55, is counted 1.6% while respondents aging 55 to 64 are counted 3.1% and beyond this age group no responses are available. This results support the argument that suggests most of the fast food customers in India are of young age group (Anita & Singh, 2007).

Table 1: Respondents gender information Total Respondents 160 Male Respondents 83 Female Respondents 46 Gender not defined 31

Table 2: Respondents age information

Age Percentage 18-24 yrs 51.9% 24-34 yrs 39.5% 35-44 yrs 3.9% 44-55 yrs 1.6% 55-64 yrs 3.1%

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may be more aware of McDonalds and KFC. Thus, it can be an indication that Indian fast food market could be dominated by western MNC fast food brands. The study by Anita & Singh (2007) also support this as their study indicates that due to subsequent entries of western MNCs in India there is a domination of these western fast food outlets in India over domestic fast food outlets.

Table 3: Customers general thinking about brand Restaurant Type No. Of Respondents Percentage

KFC 61 38.1 McDonalds 57 35.6 Anjappar 14 8.8 Pizza Hut 13 8.1

To find how often the respondents visit fast food restaurant an uneven responses are recorded showing 18.2% visit fast food restaurant more than once a week, 21.4% visit once a week, 17% visit once in every two weeks, 23.9% visit once a month and 19.5% respondents indicating they visit fast food restaurants less than once a month. Results show that all respondents are somehow visiting fast food restaurants either more frequently or less frequently. These results are similar to the suggestions made by Gupta (2003) and Anitha & Singh (2007), which show that more people are having fast food very often in India, which may be because of their busy life style.

Table 4: Average visit to fast food restaurant

Time Period Percentage

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A scattered response counts was found for the question asking how often they visit McDonalds and Anjappar resulting 39.2% respondents indicated they visit McDonalds less than once a month and 27.5% respondents mentioned they visit McDonalds once a month while 59.7% of respondents indicated they visit Anjappar less than once a month and 16.8% respondents indicated they visit Anjappar once a month. Results show that the respondents are not frequently eating in McDonalds when compared Anjappar. These results are similar to the suggestion made by Meenakshi (1996) where the study indicates that people in India prefer foreign fast foods more often when compared to Indian foods.

Table 5: Frequency of visit to McDonalds

Answer Options Response Percentage Response Count 1. More than once

a week 7.2% 11 2. Once a week 11.8% 18 3. Once in every two weeks 14.4% 22 4. Once a month 27.5% 42 5. Less than once a

month

39.2% 60

Total respondents answered: 153 Skipped respondents: 7

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Table 6: Frequency of visit to Anjappar

Answer options Response Percentage Response Count 1. More than once

a week 4% 6 2. Once a week 8.1% 12 3. Once in every two weeks 11.4% 17 4. Once a month 16.8% 25 5. Less than once a

month

59.7% 89

Total respondents answered: 149 Skipped respondents: 11

The table above shows the respondents frequency of visits to Anjappar. From the table it can be shown that 89 respondents (59.7%) mentioned as they visit Anjappar less than once a month and 25 respondents (16.8%) mentioned as once a month while 17 respondents (11.4%) mentioned as they visit Anjappar once in every two weeks and 12 respondents mentioned as once a week. Very least response was recorded in more than once a week visit of respondents to Anjappar as 6 respondents (4%). These results suggest that there are many respondents who visit McDonalds more frequently than Anjappar.

To find the average expenditure on fast food by respondents a question was added asking their average spending on fast food when they visit fast food restaurant. From the below table it is shown that 32.3% respondents spend INR 200-300 (£2.5-3.5) as an average for their visit to fast food restaurant while 30.6% of respondents indicated INR 300-400 (£3.5-4.5) as an average for their visit to fast food restaurant. These results are similar to study by Anita & Singh (2003) where the study suggests that there are more middle class population in India, which is seeking fast food in their busy life to save money and time. Also, the results are similar to the suggestion made by Gupta (2003) suggesting there are more middle class people in India who prefer fast food. The results are also similar to the suggestion made by (Tillotson, 2003) suggesting that Customers of fast food restaurant are mostly middle class people who consider much in price of food.

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Table 7: Average Spending Average spending in INR Percentage

INR 200-300 (£2.5-3.5) 32.3 INR 300-400 (£3.5-4.5) 30.6 INR More than 400 (£5) 20

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Table 8: Regression Analysis Results ATTRIBUTE DEPENDENT VARIABLE INDEPENDENT VARIABLE P-‐VALUE

Service and Packing Overall Customer satisfaction by McDonalds

Customer satisfaction by Service and Packing in McDonalds

0.000

Price and Taste Overall customer satisfaction by McDonalds

Customer satisfaction by Price and Taste in McDonalds 0.210 Quality, Environment and Cleanliness Overall customer satisfaction By McDonalds Customer satisfaction by Quality, Environment and Cleanliness in McDonalds 0.000

Service and packing Overall customer satisfaction by Anjappar

Customer satisfaction by Service and Packing in Anjappar

0.329

Price and taste Overall customer satisfaction by Anjappar

Customer satisfaction by Price and taste in Anjappar 0.000 Quality, Environment and Cleanliness Overall customer satisfaction by Anjappar Customer satisfaction by Quality, Environment and Cleanliness in Anjappar 0.000

For better understanding of the result all the details that are used for analysis and results from ANOVA table using SPSS tool version 17, which was used in windows, are arranged in a table as shown above. The first column shows the attributes used while second column shows the dependent variable followed by third column showing independent variable. The fourth column shows the p-value from the ANOVA table.

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Anjappar customer satisfaction level in terms of service and packing. From this result the paper will be able to prove the first hypothesis.

H1: McDonalds have positive influence on customer satisfaction in terms of service quality and food packaging when compared to Anjappar.

Table 8 also shows that customer satisfaction level by Anjappar in terms of price and taste is good (p-0.000) when compared to McDonalds (p-0.329). There is considerably large difference between customer satisfaction of Anjappar and McDonalds in terms of price and taste, which can be seen, by the difference in their p-value. The results also support the study made by Meenakshi (1996) suggesting that India’s diversified culture has diversified food and Indian spices are vital for its taste. From the results the paper will be able to prove the following hypothesis.

H2: Anjappar has positive influence on customer satisfaction in terms of price of food and taste when compared to McDonalds.

The result from the table 8 shows that customer satisfaction level by Anjappar and McDonalds in terms of quality, environment and cleanliness have positive satisfaction level having p-value of 0.000 for both the restaurants. This results fail to support the argument made by (Raajpoot 2002) suggesting environment of restaurant is more influenced by western fast food outlets in developing nations. The result also failed to support the argument made by Gupta (2003) suggesting foreign fast food outlets in India are having more positive effect on their cleanliness. Based on the results the paper failed to prove the third hypothesis.

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5. DISCUSSION

The results indicate that there is an increase in women workforce in india resulting more women are having fast food when compared to previous years. The results also supports the study made by Gupta (2003) suggesting there is increasing women work force in developing countries like India and because of that there are more people preferring fast food which helps people to save time. The findings from the results suggest that there are more people in India having fast food very often and considerably there are more young respondents who use to go fast food outlets very often which is shown in the table 2. These results are similar to the suggestions made by Anita & Singh (2007) and Gupta (2003) suggesting that more young people accomplish Indian fast food industry and more than 70 percent of urban Indian population consume fast food once a month or more frequently. From the results of table 3 it can be argued that Indian fast food customers generally think about foreign fast food industry like McDonalds and KFC when they are asked about fast food. These results suggest that foreign fast food outlets have more influence on customers when compared to domestic fast food outlets. This may be because of the reason that Indian fast food industry consists of more young population (Gupta, 2003) and foreign brands attract the young customers by their advertisements and friendly atmosphere. Results from table 4 show that people in India visit fast food restaurants very often and the results are similar to the suggestions made by (Meenakshi, 1996) as more people in India are increasingly having fast food very often. This may be because of the reason that people are looking for quick meal solutions in their busy life and fast food joints are better place to have quick meals Atkins and Bowler (2001). These results are also similar to the findings made by Anita & Singh (2007), which suggest that Indian fast food industry consists of more young population and foreign fast food brands attract these young customers in several ways like service and environment. Results from table 6 indicate that most of the Indian customers are of middle class who considerably spends less money on fast food. Indian food industry consists of more middle class population who wants to spend less money on food because of this people in India prefer fast foods that are cheaper in the market.

A STUDY OF CUSTOMER SATISFACTION BY DINESERV ATTRIBUTES IN INDIA