Factor influencing customer loyalty of pizza hut,

Hyderabad, Sindh, Pakistan

Submitted by:
Khalid Latif (1611296)
Zaheer Panhwer
Faraz Ahmed Chohan (1611268)
Submitted To:

Sir Ikramuddin Junejo

Date:
24 August 2020

Contents
Abstract…………………………………………………..3
Chapter 01…………………………………………..4
Introduction…………………………………………4
1.1 introduction…………………………………….4
1.1.1 Customer loyalty……………………………5
1.1.2 Customer satisfaction…………………….5
1.1.3 Service quality………………………………..5
1.2 Objective of study………………………….…….5
1.3 Research question……………………………….5
1.4 Hypothesis…………………………………………..6
1.5 Research gap………………………….……………6
1.6 Research significance…………….…………….6
Chapter 2……………………………………………………4
2.1 literature review…………………………………..4
Chapter 3……………………………………………………5
Research methodology………………………………5
3.1 Data…………………………………………………….5
3.2 Questionnaire arrangement ……………….5
3.3 sampling technique…………………………….5
3.4 variables……………………………………………..5
3.4.1 Independent variable………………………5
3.4.2 Dependent variable………………………...5
Conceptual framework
Theoretical framework
Chapter 4…………………………………………………6
Data analysis
4.1 Reliability (Cronbach’s Alpha) Test ……………………9
4.2 Factor loading (Confirmative Factor analysis:CFA)…..9
4.3 Regression ananlysis …………….10
Chapter 05
Conclusion and recommendation
5.1 conclusion
5.2 recommendation
Bibliography
Appendices……………
Appendices A: Survey Questionnaire

List Of Tables
Table 3.1 Conceptual Framework
Table 3.2 Theoretical Framework
Table 4.1 Reliability test of customer satisfaction
Table 4.2 Reliabilty test of customer service quality
Table 4.3 Reliabilty test of customer loyalty
Table 4.4 Regression analysis of Customer satification
Table 4.5 Regression analysis of service quality
Table 4.6 Regression analysis of Customer loyalty

ABSTRACT
Customers are the important means of any organization to reach at higher level customer
loyalty plays an important role in the success of the organization there are the many factors
effect the loyalty of the customers such as service quality, customer satisfaction (In terms of
customer satisfaction if customer were not satisfied from product then he can not be loyal
towards brand so here customer satisfaction affects customer loyalty). In pizza hut a sample
of one hundred respondents were selected there were 70 males and 30 females the data was
collected through the IBM SPSS software statistics version 25 major tests were done such as
reliability (Cronbach’s Alpha) , and final linear regression
Analysis there were two variables one is independent variable and others are dependent
variable the independent variable includes customer service quality and customer satisfaction
and the dependent variable include customer loyalty the data was collected through the
questionnaire there were 15 close ended questions the data was analysis through the SPSS
software the results shows that there is positive relationship between customer satisfaction
and service quality on the customer loyalty of pizza hut.

Keywords
Customer loyalty, customer satisfactions, service quality, pizza hut

INTRODUCTION
In general, we focus on this topic factors influencing customer loyalty of pizza hut
Hyderabad, Sindh,Pakistan customer satisfaction, quality service that effect the customer
loyalty towards any brand, these factors is not related to each other , the customer would be
satisfied if brand provide the value in return for which they have paid for purchase ,if the
consumer purchasing the product it does not mean that customer is loyal towards the brand.
May be it show that if brand provide good quality service and the good quality product that
shows the customer satisfaction. The customer feel satisfied when the product fullfills the
expectation, customer expect some kind of service from the brand and also expect the brand
quality of product, if the brand fulfill their expectation then customer show his satisfaction
towards brand .If the brand does not fullfills the expectation of customers in terms of service
quality, product quality then customer dissatisfied from the brand.

Many studies have been done to find the amount of strength of service quality dimensions on
customer satisfaction like Dinesery produced by (Stevens et al., 2003). Even, the difference
exists between the sample size of population, background, cultural norms, earnings and
emotions or feelings are the necessory to approximate these dimensions. As a result, the
study purpose is to perform a connection the gap in the literature by analysing the service
quality effect on a cosumer of fast food industry of pakistan. Only few researches have been
found to identify and analyse the service quality of food industry of pakistan specially Pizza
Hut (Swanson & Davis, 2003; Heung et al., 2000). In the case study they find and examine
that how Pizza Hut is following the Service Quality dimensions to maintain its product
quality and run in the procedure of repositioning itself and growing its product line. The
primary purpose behind this study is to analyse the connection between service quality and
customer satisfaction factors and rate of patronage in Pizza Hut in third world country or
developing country like Pakistan. It will be worth attending interest to understand which
factors highly influence the service quality perception, satisfaction of customer
Objectives of the Study
. To identify the factors that can affect customer loyalty in pizza hut
. To identify the factors that affect the customer satisfaction

1.3 Research question

. What are the factors that affect the customer loyalty of this brand .

1.4. Hypothesis:
H1: Customer satisfaction affects the customer loyalty.
H2: There is a relationship of Service Quality on Customer Loyalty in pizza hut.

1.5. Research gap

Many research has already done on the factor affecting customer loyalty on pizza hut , after
in deep research and investigation it was analysed the gap that in Hyderabad , Pakistan no
such study is being entertainment research has been done over all there are no specific area
being touched . going more specific no any research was perform to measure the factors
affecting customer loyalty in pizza hut

1.6. Research significance

This research will entail the detailed analysis of the potential of Hyderabad (Pakistan)
marketing in the pizza hut.This piece of study will enlighten with the sense of idea about
people of Hyderabad with regard to what they prefer the most pizza hut .With the help of this
thesis, it could easily be highlighted the lacking in services from the pizza hut , what they can
do to improve the level of services .

Chapter 02
Literature Review:
Service quality :
1- Danish et al (2018) Give importance on determinents on customer loyalty of fast industry
of lahore. The study was find out the factors that effects customer loyalty. The study
examine the relationship of customer expectations and service quality in respect to the
customer loyalty and customer satisfaction. The collection of data using five point Likert
scale questionnaire.The reliability of data was checked using SPSS and smart PLS. After the
examine of the data the results was found that independent variable such as customer
satisfaction and service quality have significant impact on dependent variable named
customer loyalty.

2- Parasuraman et al (1988) The service quality means to attain customers expectation. It

means when the customer satisfied with the service given by company then he come
again.The gap model supports in major findings of dillemas and gaps in the service quality of
company. The 1st gap deals with perception regarding the managenent of consumers
expectation and what the recieve. Mainly it happens that companies are not fullfills in
delivering service quality according customers need so in result customers are disatisfied.
The 2nd gap the company still did not take any specifice steps so the consumers could be
satisfied whereas the 3rd gap deal with the difference in particular service quality and current
service quality. Mix mode research was conducted in this research,questionaires from
customer and on the bases of those results management was interviewed. This research gives
many findings according to expectation of customers and service quality currently being
delivered by Pizza hut.

3- (Brady et al., 2001; Gilbert et al., 2004; Lee and Ulgado, 1997; Bougoure and Neu, 2010).
According to their studies the service quality is a key motivation of customer satisfaction. In
addition, there were also analysed from study which indicates that food quality, service
quality and perceived value are the key factors in the formation of customer satisfaction in
FFRs and subsequently in the effects of behavioural intentions in FFRs.

4- According to Kristen A. Riscinto-Kozub (2008), Chang-Hsing Chang (2007), In this

research there is strong relationship between customer satisfaction and employees.
Employees and management were the important part of this research and low-level
management and staff was interviewed to find out the fact and figures. The research
has analysed and found that staff of Pizza Hut was not much satisfied and happy with
the management. Most of the employees said that their hourly pay rate is lower than
other companies like Domino and other competitor. And also employees said there
is no any reward system on the basis of performance and low chances for promotion
are available. There were some students respondents that mostly work round about
20 hours in Pizza Hut and after that they were not able to put more attentions
towards the tasks which influence Pizza Hut’s overall service quality as well. In
response to a question one employee said, Pizza Hut should spend on employees
more so they could perform better to prove best service quality for the customers’
expectations.
H1 : Customer service quality has significant influence on customer loyalty.
Customer satisfaction:

1-Shakir et al (2018) Focus of customer satisfaction and through customer loyalty and
customer satisfaction.The data was collected by 500 respondents was proposed which based
on non-probability sampling, how ever structural equation modelling was used to examine
the constructs. The statistical results were examine through SPSS and AMOS. This study
provides the results that clearly show tha customer satisfaction is the key factor in capturing
customer loyalty.

2- In services the customer satisfaction has been defined as the degree to which performance of
sevice meets or fullfills the customer's expectations (Kumar, 2012; Lombard, 2009; Santouridis &
Trivellas, 2010). Hui and Zheng (2010)
Defined customer satisfaction as an critical judgment of a particular transaction resulting from
perceived quality.

3- Customer satisfaction is an achievement of pleasurable sensation and desire

accomplishment (Zairi 2000). The customer who is satisfied will finally become loyal to the
product or brand. The quality of product has a significant value in the eyes of the customer.
According to Aga (2007), the quality of product is the basic survival in this challenging
market. Ingredients and constituents of an item affects punter’s satisfaction (Rossomme
2003). Here is complete satisfaction is reflected by the important parts of product. So it is
necessory for a company to keep the concept of customer value if they want to make their
customer loyal towards their brand.

4- Customer satisfaction is important for product differentiation and making a strong

relationship with consumers (Deng et al., 2009). Due to the following purpose the
companies consider customer satisfaction as an important element while making their
important strategies. Further, the concept of customer satisfaction attain so much
importance when the American Customer Satisfaction Index (ACSI) was developed.
H2 : Customer satisfaction has significant influence on customer loyalty.

Customer Loyalty:

1- (Giddens 2002).Customer loyalty is the opportunity given by a customer in order to

purchase a particular product in a specific product category. Customer who like a brand, have
the following mindset: "I am committed to this brand', "I am ready to pay a higher price for
this brand over other brands" and "I will advised others for this brand.

2- Trust is a major tool for customer loyalty (e.g., Chaudhuri and Holbrook, 2001; Garbarino
and Johnson, 1999). A customer who have trusts in a product so the customer can pay a
premium price for the productis, to remain loyal to it, and also spread positive word of
product (Chaudhuri and Holbrook, 2001).

3- (Lewis 2002) The influence of trust on customer loyalty becomes especially relevant when
confronted with switching decisions with a high level of perceived risk and uncertainty.
4- (Andreasen & Lindested 2003) Customer loyalty is termed as a sustainable tool for
creation of income whereas on the other hand, customers loyalty are observed as the best
people for marketing of services and products.

Chapter 03
Research methodology:

This research focuses the impact of Independent variables such as service quality, customer
satisfaction on dependent variable customer loyalty on pizza hut.

3.1 Data:
Primary data used to conduct the research content all the consumers who are habitual
of pizza hut a questionnaire contain close ended questions are distributes among the 100
responded

3.1.1 Population of the study:

The population of the research study is the respondants that
posses similar character. The aim of the study which explain the factors influencing customer
loyalty of pizza hut hyderabad sindh. Therefore the population of the study are customer's
living in hyderabad.

3.2 Questionnaire arrangement:

The questionnaire consists of two part; The first part of the questionnaire consist of
Basic questions related to demographics and personal information such as profession and
salary, age. However the second part of the questionnaire consists of total 15 questions that
are close ended.The option of questions are start from strongly agree to strongly disagree.

3.3 Sampling technique:

Convenience sampling technique was used To distribute the questionnaire and SPSS
version 21 software was used to test the research.

3.4 Variables:

3.4.1 Independent variables:

There are two variables named as independent and dependent variables. Independent
variables are two named as service quality and customer satisfaction.
3.4.2 Dependent variable:
There is only one dependent variable and that is customer loyalty.
Conceptual framework:

Independent Variable Dependent Variable

Customer Satisfaction

Customer Loyalty

Service Quality

Chapter no.4
 Data analysis

4.1) Reliability (Cronbach’s Alpha) Test

The Reliability (Cronbach’s Alpha) of Customer Satisfaction for Pizza Hut is 0.755
respectively, which is greater than 0.60 or 0.70, so the construct is reliable.

Reliability Statistics

Cronbach's Alpha Cronbach's Alpha N of Items

Based on
Standardized
Items

.755 .757 5

Table 4.1 reliability test of customer satisfaction

The Reliability (Cronbach’s Alpha) of Service quality for Pizza Hut is 0.773 respectively,
which is greater than 0.60 or 0.70, so the construct is reliable.

Reliability Statistics

Cronbach's Alpha Cronbach's Alpha N of Items

Based on
Standardized
Items

.773 .775 5

Table 4.2 reliability test of service quality

The Reliability (Cronbach’s Alpha) of customer loyalty for Pizza Hut is 0.837 respectively,
which is greater than 0.60 or 0.70, so the construct is reliable.

Reliability Statistics

Cronbach's Alpha Cronbach's Alpha N of Items

Based on
Standardized
Items

.837 .834 5

Table 4.3 reliability test of Customer loyalty

 4.3. Regression Analysis
In Regression Analysis of Customer Satisfaction and Customer Loyalty of pizza hut states that
correlation between Customer Loyalty and Customer Satisfaction is 38.3% and t value is 12.65 which
is greater than 1.96 and Sig. is .000 which is less than 0.05 so the hypothesis: “customer satisfaction
positively affects the customer loyalty” is accepted

Variables Entered/Removeda

Model Variables Entered Variables Method

Removed

1 COMP_CSb . Enter

a. Dependent Variable: COMP_CL

b. All requested variables entered.

Table 4.7 regression analysis of customer satisfaction

Model Summary

Model R R Square Adjusted R Std. Error of the Change Statistics

Square Estimate R Square F Change df1 df2 Sig. F Change
Change

1 .383a .147 .138 .927 .147 16.870 1 98 .000

a. Predictors: (Constant), COMP_CS

Table 4.8 regression analysis of service quality

Coefficientsa

Model Unstandardized Coefficients Standardized T Sig.

Coefficients

B Std. Error Beta

(Constant) 1.737 .248 7.011 .000

1
COMP_CS .490 .119 .383 4.107 .000

a. Dependent Variable: COMP_CL

Regression
In Regression Analysis of Brand Image and Customer Loyalty of pizza hut states that the
correlation between Customer Loyalty and service quality e is 24.6% and t value is 9.5 which
is greater than 1.96 and Sig. is .000 which is less than 0.05 so the hypothesis: “Service quality
effect the customer loyalty” is accepted.
Variables Entered/Removeda
Model Variables Entered Variables Method
Removed
b
1 COMP_SQ . Enter

a. Dependent Variable: COMP_CL

b. All requested variables entered.

Model Summary

Model R R Square Adjusted R Std. Error of Change Statistics

Square the Estimate R Square F Change df1 df2 Sig. F Change
Change

1 .246a .060 .051 .973 .060 6.292 1 98 .014

a. Predictors: (Constant), COMP_SQ

Coefficientsa

Model Unstandardized Coefficients Standardized t Sig.

Coefficients

B Std. Error Beta

(Constant) 2.096 .252 8.311 .000

1
COMP_SQ .350 .139 .246 2.508 .014

a. Dependent Variable: COMP_CL

Chapter 5

5.1 Conclusion
From the findings, it is found that customer satisfaction and service quality play a very
important role towards the customer loyalty in pizza hut. Hence, all two (2) factors namely
customer satisfaction, and service quality have a significant direct (positive) relationship on
customer loyalty of pizza hut. As the service quality and customer satisfaction two
independent variable have a significant positive impact on customer loyalty which means if
pizza hut does not improve its service quality and product quality the customer loyalty will
decrease.

5.2 Recommendation
1 Pizza hut should improve their quality service., because improve in service quality will
lead to increase in customer loyalty .
2. They should also lower their prices because lower prices increase customer satisfaction and
customer satisfaction will lead to increase customer loyalty

Reference:
http://studentsrepo.um.edu.my/1529/3/CH_2.pdf
https://www.ukessays.com/essays/marketing/pizza-huts-service-quality-marketing-essay.php
https://www.researchgate.net/publication/282128914_The_Effect_of_Service_and_Food_Qu
ality_on_Customer_Satisfaction_and_Hence_Customer_Retention
https://www.grin.com/document/281199