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Relationship between Service Quality Factors and

Customer Satisfaction: A Study Based On the Fast Casual


Restaurants of Khulna

Research Study Report


(Submitted in partial fulfillment of the requirement of BBA program)

Submitted By
Md. Aaqib Ahsan
ID: 120301

Supervised By
Feroz Ahmed
Professor

Submitted To
Chairman
Research and External Affairs Committee

KHULNA UNIVERSITY

Business Administration Discipline


Khulna University
Date of Submission: 3rd August, 2017
i

May 24, 2017

Chairman
Research and External Affairs Committee
Business Administration Discipline,
Khulna University, Khulna.

Subject: Submission of Research Study Report

Dear Sir,

I am highly delighted to submit the research report titled “Relationship BetweenService Quality
Factors and Customer Satisfaction: A Study Based On the Fast Casual Restaurants of Khulna”
which was assigned to me as partial requirement for the completion of the BBA Program. This
research study report has been prepared based on the information collected from the field survey
conducted in Khulna and information published in different journals of the related topics.
Throughout the study, I have tried with the best of my capacity to gather and accommodate as much
relevant information as possible. I apologize for any kind of error and inaccuracy. I will be available
for facilitating any point of this research report any time I am asked to do so.
I, therefore, earnestly request you to go through my report, approve it and oblige thereby.

Sincerely Yours,

______________________
Md. AaqibAhsan
ID: 120301
Business Administration Discipline,
Khulna University, Khulna.

Supervised by,

______________________
Feroz Ahmed
Professor
Business Administration Discipline,
Khulna University, Khulna.
ii

ACKNOWLEDGEMENT

Firstly, I would like to express my gratitude to the Almighty Allah for blessing me with the
opportunity to complete the research report successfully.
I sincerely thank my supervisor Professor Feroz Ahmed, Business Administration Discipline, Khulna
University, for his continuous support and guidance. Without his great supervision and generous
support, it would have been quite impossible for me to complete this research report in due time.
I am grateful to the respondents who kindly agreed to cooperate in collecting the primary data for the
research study report. Conducting the survey was not a very simple task. Many of my friends and
contacts have kindly extended their support and assistance in order to collect as much of the responses
as necessary. Without their precious support, I would have found it difficult to conduct the research
work. I appreciate their help and I would like to thank them all too.
Last but not least, I would like to thank my parents for being the enormous source of inspiration for
me. I recognize their love, support and generosity for me in different spheres of preparing this
research study report.
iii

Table of Content
Acknowledgement……………………………………………………………………………ii
Table of Content……………………………………………………………………………..iii
Abstract……………………………………………………………………………………….v
Chapter One: Introduction ..................................................................................................... 1
1.1 Background of the Study: ................................................................................................ 1
1.2 Objective of the Study: .................................................................................................... 2
1.2.1 Primary Objective: .................................................................................................... 2
1.2.2 Secondary Objective: ................................................................................................ 2
1.3 Scope of the Study: .......................................................................................................... 2
1.4 Limitations of the Study: ................................................................................................. 3
Chapter Two: Literature Review ........................................................................................... 4
2.1 Service Quality................................................................................................................. 4
2.2 Customer Satisfaction ...................................................................................................... 8
2.3 Relationship Between Service Quality and Customer Satisfaction: ................................ 9
Chapter Three: Methodology ............................................................................................... 11
3.1 Introduction: ................................................................................................................... 11
3.2 Population of The Study: ............................................................................................... 11
3.3. Sampling Procedure and Sample Size: ......................................................................... 11
3.4. Place and Time of the Study: ........................................................................................ 12
3.5 Data Collection Method: ................................................................................................ 12
3.5.1 Questionnaire Design and Description of the Questionnaire:................................. 12
3.5.1.1 Definitions of variables, Indicators and Constructs: ........................................ 12
3.5.1.1.1 Independent Variables and Their Indicators: ............................................ 12
3.5.1.1.2 Dependent Variable and Its Indicators:..................................................... 13
3.5.1.2 Questionnaire Design: ...................................................................................... 13
3.6 Data Analysis: ................................................................................................................ 14
3.6.1 Measurement Instrument: ....................................................................................... 14
3.6.2. Statistical Methods of Data Analysis: .................................................................... 15
Chapter Four: Analysis ......................................................................................................... 16
4.1 Descriptive Statistics:..................................................................................................... 16
4.1.1 Sample Profile:........................................................................................................ 16
4.1.1.1 Age: .................................................................................................................. 16
4.1.1.2 Gender: ............................................................................................................. 17
4.1.1.3 Education Level: .............................................................................................. 17
4.1.1.4 Occupation: ...................................................................................................... 18
4.1.1.5 Income Level: .................................................................................................. 19
4.1.1.6 Fast Casual Restaurant Chosen ........................................................................ 19
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4.1.6 Summary of the Demographic Data ....................................................................... 20


4.1.2 Tangibles ................................................................................................................. 21
4.1.3 Reliability................................................................................................................ 22
4.1.4 Responsiveness ....................................................................................................... 22
4.1.5 Assurance ................................................................................................................ 23
4.1.6 Empathy .................................................................................................................. 23
4.1.7 Customer Satisfaction ............................................................................................. 24
4.1.8 Reliability Analysis ................................................................................................. 25
4.2 Inferential Statistics: ...................................................................................................... 26
4.2.1 Correlation Analysis ............................................................................................... 26
4.2.2 Regression Analysis ................................................................................................ 27
Chapter Five: Conclusion ..................................................................................................... 30
5.1 Introduction .................................................................................................................... 30
5.2 Summary of the Hypotheses and Findings: ................................................................... 30
5.3 Managerial Implications: ............................................................................................... 31
5.4 Conclusion ..................................................................................................................... 31
Reference: ............................................................................................................................... 32
Appendix 1: Questionnaire ................................................................................................... 38
v

ABSTRACT

It is crucial for a fast casual restaurant to achieve customer satisfaction by providing superior service
in order to survive for a long term. This study primarily aimed to examine the influence of the factors
of service quality on customer satisfaction in the context of fast casual restaurants of Khulna city.
After a thorough review of the previous literatures, the measures of this study were adapted. A
questionnaire was developed and field survey was conducted. 180 respondents were chosen who
visited one of the many fast casual restaurants of Khulna six times or more in the last six months.
Statistical methods like reliability analysis, correlation analysis and regression analysis were
conducted to analyze and interpret the data. It has been found that all of the factors of service quality
positively impacts on customer satisfaction. Tangible factors and empathy factors contributed most to
customer satisfaction in the context of fast casual restaurants of Khulna. This report is the first of its
kind to explore the relationship between factors of service quality and customer satisfaction in the
context of fast casual restaurants of Khulna and it will help the managers of these restaurants to
understand what factors does affect most in increasing customer satisfaction so that they can raise the
level of their service quality accordingly.

Key Word: Service Quality, Customer Satisfaction, Fast Casual Restaurant, DINESERV
1

Chapter One: Introduction

1.1 Background of the Study:

Service quality and customer satisfaction are undoubtedly two of the most significant concepts that
are at the heart of the marketing theory and practice (Spreng & Mackoy, 1996). Service quality is an
important factor in achieving competitive advantage in any business endeavor since high service
quality results in increased amount of customer satisfaction, and thus increased repeat business
(Prasad, et al., 2009). On the other hand, according to Oliver (1997, p.8), “Customer satisfaction is
consumer’s fulfillment response. It is a judgment that a product or service feature, or the product or
service itself, provides a pleasurable level of consumption related fulfillment. In other words, it is the
overall level of contentment with a service/product experience.” Repetition of satisfaction over time
results in perceptions of service quality in the minds of consumers (Parasuraman, et al., 1988). So it
is pretty obvious that service quality and customer satisfaction are conceptually different but closely
tied constructs (Parasuramanet al., 1994; Dabholkar, 1995; Shemwellet al., 1998). A great number of
researchers in this subject area (e.g. Cronin & Taylor, 1992; Oliver, 1997; Lee et al., 2000; and Kim
etal., 2009) supported that service quality is one of the crucial drivers of customer satisfaction. In fact,
in today’s business world full of intense competition, the key to sustainable competitive advantage is
hidden in delivering high quality service that will in turn result in satisfied customer base (Shemwellet
al., 1998).

Khulna is the 3rd largest city of Bangladesh with a population of 777588 (Bangladesh Bureau of
Statistics, 2011). It is an important hub for the industries of Bangladesh. With its rapid growth and
socio-economic development, Khulna has become a center of interest for many investors around the
globe. Hence the fast food restaurant industry has become one of the blooming industries in Khulna
City (Rahmanet al., 2012). Service-holders, students and people from other occupations of the society
seldom visit different fast food restaurants of the city. The pressures of working life along with time
constraints have resulted in an increasing number of consumers go for fast food restaurants (Farhana&
Islam, 2011) because of their quick and hassle-free services. Among many other type of restaurants,
fast casual restaurants are assumed to be very popular in Khulna due to its being an intermediate
concept between fast food and casual dining. According to Illinois-based food-service research firm
Technomic("What exactly is fast casual? ,2017), a fast casual restaurant should meet the following
criteria: Limited table service or self-service format, mainly aimed at adults who want more upscale
fare, upscale and unique décor, made-to-order food with availability of more complex flavors than
fast food restaurants and lack of drive-thru. Food made fresh for the customers is the main attraction
of the fast casual restaurants.
2

This present study is intended to explore the relationship between the factors of perceived service
quality and customer satisfaction in context of some of the fast casual restaurants of Khulna City. The
SERVQUAL model is the most popular model to measure the service quality in almost every service
industry. But to measure the service quality especially with respect to restaurant industry, previous
researchers have identified different models such as DINESCAPE (Ryu and Jang, 2007),
TANGSERV (Raajpoot, 2002) and DINESERV (Stevens et al., 1995). DINESERV model, widely
related to SERVQUAL model, is used in this study to have a thorough idea about the perception of
service quality that the customers hold regarding the fast casual restaurants of Khulna and the
relationship between the factors of the service quality and customer satisfaction. There is a lack in
adequate amount of research in hospitality industry of Khulna. So the findings of this study will be
helpful for the managers of the fast casual restaurants of Khulna to identify what steps are needed to
be taken in order to increase their service quality. Because a high amount of service quality will
eventually result in achieving repeat business and positive word of mouth, thereby developing a
chance of restaurant’s profitability (Barsky, 1992).

1.2 Objectives of the Study:

1.2.1 Primary Objective:


The primary objective of this study is to find out the type of relationship among factors of service
quality and satisfaction level of the customers of fast casual restaurants of Khulna city.

1.2.2 Secondary Objective:


The secondary objective of this study is to find out how does each factor of service quality influences
on the satisfaction level of the customers of fast casual restaurants of Khulna City.

1.3 Scope of the Study:

This study mostly concerns about the dimensions of service quality and customer satisfaction in the
fast casual restaurant industry of Khulna city. It tries to explore the relationship among factors of
service quality (tangibles, responsiveness, assurance, reliability and empathy) and customer
satisfaction.
3

1.4 Limitations of the Study:

There are several limitations of this study which should be acknowledged accordingly. Such as:
• Because of time constraint, it was not possible to work with a bigger sample. Only a sample
of 180 has been used in this study. A bigger sample would have given a more specific end
result.
• The survey was administered to the respondents of Khulna city only. So, the result cannot be
generalized on a nationwide perspective.
• In absence of formal sampling frame and accurate information on the size of the population,
non-probability sampling has been used.
4

Chapter Two: Literature Review

2.1 Service Quality

In absence of associated tangible evidences, it is quite difficult for the consumers to evaluate service
quality than product quality. Service quality can be seen as a specific measure of how well the level of
delivered service matches consumer expectations (Lewis & Booms, 1983). Service quality has been
termed as the delivery of excellent or superior service relative to the expectations of customers
(Zeithamlet al., 1996). Service quality is generally defined as the overall evaluation of a service by
the customers or the extent to which a service matches customer’s needs or expectations, (Eshghiet
al., 2008). Parasuramanet al., (1985, p.41-50)define service quality as “the discrepancy between
consumers’ perceptions of services offered by a particular firm and their expectations about firms
offering such services”.If what is perceived lies below what is expected, consumers judge quality as
low and if what is perceived meets or exceeds what is expected, then consumers consider quality to be
high. According to Parasuramanet al., (1985), Douglas & Connor (2003) and Ladhari (2008), the
intangible elements of a service are the most important determinants influencing service quality
perceived by consumers. These intangible elements of service quality are inseparability, heterogeneity
and perishability. Here, Inseparability indicates that services are consumed as they are purchased.
Heterogeneity means uniqueness of the service offering. It indicates that service can never be repeated
exactly. Perishability denotes that services are produced and consumed at the same time so they
cannot be stored like physical goods for later usage. Although these three elements are not necessarily
applicable for all kind of service industries.(Daniel&Berinyuy, 2010).

Service quality is an important topic to researchers because of its relevancy to numerous service
companies (Negi, 2009). So, a great number of researchers have attempted to develop various scales
to measure it, even though some claim it to be tough to measure because of its intangibility which is
difficult to quantify (Douglas & Connor, 2003). Since services are intangible in nature, evaluation of
the customer’s perception of quality can be measured through interactions with the personnel offering
services (Magi &Julander, 1996). Dynamic and effective interaction between consumer and service
provider is very crucial while measuring service quality because through the interaction the service
provider can easily understand the consumer better and identify what customer needs.

Gronroos (1982) developed one of the first models to measure service quality. He identified three
components of service quality: technical quality, functional quality and image quality. Various models
have been developed later to measure service quality. The SERVPERF model was developed by
Cronin & Taylor (1992). It measures service quality based on customer’s overall feeling towards the
service. Teas (1993) developed the Evaluated Performance model which calculates the gap between
5

perceived performance and the ideal level of a dimension of service quality instead of customer’s
expectation.

It is a must for the service providers to realize that the key to maintain a great quality image is
relentlessly meeting or exceeding the level of consumer expectations. Consumer perception of service
quality is largely influenced by the size and direction of the gap between expected service and
perceived service (Parasuramanet al., 1985). Nearly 29 years ago, the study of service quality was
brought into the attention of researcher when Parasuraman, Zeithaml and Berry (1988) introduced
SERVQUAL.Before that, Parasuraman, Zeithaml and Berry (1985) proposed ten dimensions that
would determine service quality after carrying out a study on four service settings: credit card
services, repair and maintenance of electrical appliances, retail banking and telephone services. The
ten dimensions are shown in Table 2.1 below:

Ten dimensions of service quality proposed by Parasuramanet al. (1985)

Determinants Elaboration
Reliability It means that the firm performs the service right at the first time. It also means
that the firm honors its promises. It involves:

• accuracy in billing;
• keeping recordcorrectly;
• performing the service at the assigned time.

Responsiveness It concerns the willingness or readiness of employees to provide the service. It


involves timeliness of service, such as:

• mailing a transaction slip immediately;


• calling the customer back quickly;
• giving prompt service.

Competence It means possession of the required skills and knowledge to perform the
service. It involves:

• knowledge and skill of the contact personnel;


• knowledge and skill of operational support personnel;
• research capability of the organization.

Access It involves approachability and ease of contact. It includes:

• easy accessibility by telephone;


• convenient hours of operation;
• convenient location of service facility.

Courtesy It involves politeness, respect, consideration and friendliness of contact


personnel. It includes:

• consideration for the consumer’s property;


• clean and neat appearance of public contact personnel.
6

Communication It means keeping customers informed in language they can understand and
listening to them. It may mean that the company has to adjust its language for
different consumers- increasing the level of sophistication with a well-
educated customer and speaking simply and plainly with a novice. It involves:

• explaining the service itself;


• explaining how much the service will cost;
• explaining the trade-offs between service and cost;
• assuring the consumer that a problem will be handled.

Credibility It involves trustworthiness, believability, honesty. It involves having the


customer’s best interests at heart. Credibility involves:

• company name;
• company reputation;
• personal characteristics of the contact personnel;

Security It is the freedom from danger, risk or doubt. It involves:

• physical safety;
• financial safety;
• confidentiality.

Understanding/ It involves making the effort to understand the customers’ needs. It comprises:
Knowing the
customers • learning the customer’s specific requirements;
• providing individualized attention;
• recognizing the regular customer.

Tangibles It includes physical evidences of the service:

• physical facilities;
• appearance of personnel;
• tools or equipment to provide the service;
• physical representations of the service;
• other customer in the service facility.

Table 2.1

Parasuramanet al., (1985) proposed that service quality is a function of the differences between
expectation and performance along with the dimensions of quality. Through empirical tests,
parasuramanet al., (1988) developed a method called ‘SERVQUAL’ where they modified the above
mentioned ten dimensions into 22 items/ five dimensions because some dimensions were being
overlapped. Those dimensions are: tangibles, reliability, responsiveness, assurance and empathy.
These five empirical factors are generic, reliable and valid for any type of service organization
(Parasuramanet al., 1985). Despite of redefining over years, SERVQUAL continues to show a lack of
consistency in replicating these dimensions in various service arrangements (Babakus&Mongold,
7

1992). Carman (1990) also argued that SERVQUAL was unable to be a generic measure that could be
applied to any service without further modification.
In the context of restaurant industry, there has always been a lack of survey instrument in
development. Service quality models such as SERVQUAL and DINQUAL have failed to identify the
salient dimensions that are specific to restaurant operations (Kivelaet al., 1999). But, service quality is
regarded as a crucial factor when it comes to deciding what restaurant to eat in (Waters, 1998). Of the
countless studies that have used modified versions of SERVQUAL scale, few have been specifically
set for restaurant industry. One of them is TANGSERV (Raajpoot, 2002). TANGSERV scale is used
to measure the tangible dimensions only. It includes three-factor dimension for tangibles:
ambience/social, product/service and layout/design dimensions.

Because of the deficiencies in SERVQUAL for restaurant setting, Stevens et al. (1995) developed
another modified scale with 29–items named DINESERV. According to Stevens et al. (1995),
restaurant customers decide which restaurants match their quality and value standards. Restaurateurs
who fail to assess will soon see declining customer number as guests switch to other competing
restaurants. DINESERV is proposed as a reliable and relatively simple tool for determining how
consumers regard a restaurant’s quality. The 29- item DINESERV questionnaire consists of five
categories: assurance, empathy, reliability, responsiveness, and tangibles. It can be understood that it
is hugely inspired by SERVQUAL model. It is a multidimensional construct that includes tangibles,
which refers to physical arrangements ,employee attire and appearance; reliability, which refers to the
ability to perform the promised service dependably and accurately; responsiveness, which refers to
employee willingness to assist customers and provide prompt service; assurance, which refers to the
depth of knowledge and courtesy of employees and their ability to develop trust and confidence; and
finally empathy, which refers to the caring, undivided attention a firm provides to customers. By
administering the DINESERV questionnaire to customers, a restaurant manager can get an idea on
how customers view the restaurant’s quality, pinpoint where problems are and get an idea of how to
resolve them. DINESERV also provides restaurant managers with a more specific measure of what
customers expect from a restaurant. These arrays of expectations are important to analyze since
unfulfilled expectations produce dissatisfied customers, who may switch to other restaurants or spread
negative word-of-mouth. Cronin and Taylor (1992) suggested that it is possible to predict service
quality in an adequate manner by using perceptions alone. In support with Cronin and Taylor, Teas
(1993) argued that quantifying the gap between expectations and performance can be complicated in
nature.
8

2.2 Customer Satisfaction

According to Iglesias &Guillén(2004, p.375), “Customer satisfaction is a complete evaluation of the


accumulated purchase and consumption experience which reflects a comparison between the sacrifice
experienced and the perceived rewards.” Customer satisfaction has been a topic of great interest in the
field of services marketing because satisfaction connects purchase of services to post-purchase
phenomena such as attitude change, repeat patronage, positive word-of-mouth, and loyalty (Oliver,
1994; Fornellet al., 1996; Oliver, 1997). Customer satisfaction is conceptualized as transaction-
specific. That means it is based on the customer’s experience regarding a particular service encounter
(Cronin & Taylor, 1992) and also some researchers think customer satisfaction is a cumulative
measure based on an overall evaluation of service experience (Jones &Suh, 2000).Early researches on
customer satisfaction have typically termed satisfaction as a post-choice evaluative judgment
regarding a specific purchase decision (G. Churchill &Suprenant, 1982; Bearden & Teel, 1983; Oliver
&DeSarbo, 1988). Giese & Cote (2000, p.15) mentions that there is no generic definition of customer
satisfaction and after carrying a rigorous study on various definitions of satisfaction, they came up
with the following one: “customer satisfaction is identified by a response (cognitive or affective) that
pertains to a particular focus (i.e. a purchase experience and/or the associated product) and occurs at a
certain time (i.e. post-purchase, post- consumption).” From this definition, is it quite clear that the
consumer’s satisfaction is determined by his/her service experience and it is occurred at the time of
the service offering. The theoretical model underlying the vast majority of early satisfaction studies is
based on some versions of the confirmation/disconfirmation paradigm (e.g., Olshavsky& Miller,
1972; Prakash, 1984; Oliver & Swan, 1989). Recent literature adds a new dimension to the traditional
concept of satisfaction. Many of the researchers have claimed that satisfaction should be viewed as a
judgment based on the cumulative experience regarding a certain product or service rather than single
transaction-specific phenomenon (Homburg &Giering 2000).

Previous researchers have argued that customer satisfaction is crucial to restaurant managers because
it leads to repeat purchase, brand loyalty, and new customers through positive word-of-mouth
promotion (Oh, 2000; Yüksel&Yüksel, 2002). The link between customer satisfaction and repeat
buying is an important contributor to a restaurant’s profit margin (Gupta et al., 2007). Restaurant
managers from all over the world, thus, work hard to keep their customers satisfied. Although, it is
never guaranteed that a satisfied customer will become a repeat customer, it is most likely that a
dissatisfied customer will never return (Soriano, 2002). So it can be said that Customer satisfaction is
the prime criterion for the survival of a restaurant (Susskind, 2005; Vavra, 1997).

Customer satisfaction has been studied by some researchers using a single item scale. It means that
satisfaction was measured by asking about customer’s overall feeling towards a service (Cronin &
Taylor, 1992). On the other hand, some researchers have used multiple-item scale to measure
9

customer satisfaction, i.e., SERVQUAL dimension (Parasuramanet al., 1985). In this study, a three-
item scale has been adapted to measure customer satisfaction (Kim et al., 2009)

2.3 Relationship between Service Quality and Customer Satisfaction:

Customer satisfaction should be regarded as a multi-dimensional construct just as service quality.


That means it can occur at multiple levels in an organization. So, it should be operationalized along
the same factors on which service quality is operationalized (Sureshchandaret al., 2002).
Parasuramanet al., (1985) suggested that high customer satisfaction results from high perceived
service quality. Other researchers also supported the fact that customer satisfaction is based on the
level of service quality provided by the service providers (Saravana& Rao,2007; Lee et al., 2000).

According to Negi (2009), Customer satisfaction and service quality have been linked together for a
long time. Fen &Meillian (2005) found that both service quality and customer satisfaction positively
affect on repurchase intentions showing that both service quality and customer satisfaction have an
important role to play in the success of any business in the competitive market.

Su et al., (2002) proved that there exists a positive relationship between service quality and customer
satisfaction. Also, they pointed out that service quality is more abstract in nature than customer
satisfaction because, customer satisfaction considers the customer’s feelings about many encounters
and experiences with a service firm. On the other hand, service quality may be affected by perceptions
of value or by the experiences of others that may not be so good.

Although, it has been proved in various studies that there is a relationship between service quality and
customer satisfaction, different views in terms of the nature of the relationship do exist. Some
conclude that quality leads to satisfaction (McDougall & Levesque, 2000; Negi, 2009) and others
support that satisfaction leads to quality (Cronin & Taylor, 1992). Some researchers also propose that
quality and satisfaction are measured by the same attributes at the same level (Parasurman et al.,
1988).

It has been tested before that there is positive relationship between factors of service quality and
customer satisfaction in the context of restaurants of different cities of the world, ie, Delhi, India
(Gupta & Paul, 2016); Faisalabad, Pakistan (Shafiq et al., 2013); Macau (Wu & Hsu, 2012) Mauritus
(Ramseook-Munhurrun, 2012); Malaysia (Bougoure&Neu, 2010) and many more. In many of the
previous studies, reliability factors of service quality were found as most contributing factors towards
customer satisfaction in different service industries (Wilson et al., 2011; Negi, 2009; Frost and
Kumar, 2000). So from this, in the context of fast casual restaurants of Khulna city, it can be
hypothesized that there is a positive relationship between factors of service quality and customer
satisfaction and reliability factors are the most important factors toward customer satisfaction.
10

So, the proposed hypotheses are given below:

H01: Tangibles factors are positively related to customer satisfaction.


H02: Reliability factors are positively related to customer satisfaction.
H03: Responsiveness factors are positively related to customer satisfaction.
H04: Assurance factors are positively related to customer satisfaction.
H05: Empathy factors are positively related to customer satisfaction.
H06: Reliability factors are the most contributing factor toward customer satisfaction.

Here is the conceptual research model of the study:

Figure 2.1: Conceptual Research Model of the Study


11

Chapter Three: Methodology

3.1 Introduction:

Coopers and Schindler (2006, p.32) explain research as “a systematic inquiry that provides
information to solve managerial problems and guide decision-making.” According to Bassey (1999,
p.28), research is a “systematic, critical and self-critical enquiry which aims to contribute towards the
advancement of knowledge and wisdom.” Research scholars might have different perquisites
regarding the outcomes of the researches but they all would have agreed on one point that the
investigations and enquiries for a research must follow a systematic manner.

This study is quantitative in nature and it tries to explore the relationship between factors of service
quality and customer satisfaction based on the primary data gathered from the frequent customers of
fast casual restaurants of Khulna city. As it is a systematic research study, it includes an explanation
of the methods used to gather the data, argues why the results found are significant, and also explains
any shortcomings that are associated with them (Saunders, Lewis and Thornhill, 2003).

In previous chapter, through literature review, it was identified that the factors of service quality, ie.
tangibles, reliability, responsiveness, assurance and empathy, have influence on customer satisfaction.
Based on the notion, this study has drawn six hypotheses. To test the hypotheses, this study follows
such procedures which are discussed later in this chapter. It contains population of the study, place
and time of the study, sampling procedure and sampling size and description of the questionnaires.

3.2 Population of the Study:

The population of the study is intended to include all the frequent customers of major fast casual
restaurants of Khulna city. Seven restaurants were selected as the major fast casual restaurants. They
are: Shawarma House, Bistro- C, King Shawarma and Café Restaurant, Rooster King, EFC, The
Coffee Club and Citylight Café and Restaurant. But there is no formal data on how many customers
visit these restaurants on an annual basis. So, it is quite impossible to make an assumption about the
actual restaurant-goer population of Khulna city. In this study, target population were those customers
who visited any of the above-mentioned restaurants six times or more in the past six months from the
time of this research conducted, according to the study previously done by Knutson et al. (1996).

3.3. Sampling Procedure and Sample Size:

Convenience sampling, a type of non-probability sampling, has been used in this study to conduct the
survey. This method has been used because of lack of time assigned and absence of formal sampling
12

frame. A pilot survey of 25 respondents was conducted to ensure the appropriateness of the
questionnaire and then 192 questionnaires were distributed. From them, 180 responses were recorded.
Heckler and Hatcher (1996) recommended that the size of sample should be at least five times the
number of variables used. Many of the other research scholars supported it. (Bryant and Yarnold,
1995; Gorsuch, 1983; MacCallum, Widaman, Zhang & Hong, 1999; Arrindell& van der Ende,
1985).In that way, this study required 32x5 = 160 number of sample size.

3.4. Place and Time of the Study:

The data collection process through survey took place in different place of Khulna city. The
questionnaire for survey was finalized on March 20, 2017. Next ten days were spent for the field
survey. The survey was conducted from March 21, 2017 to March 30, 2017.

3.5 Data Collection Method:

3.5.1 Questionnaire Design and Description of the Questionnaire:

3.5.1.1 Definitions of variables, Indicators and Constructs:


This study contains six variables of two different types. These variables are derived from previous
literature and studies in this prospective area of interest.

The first type of variable, ‘Independent Variable’, contains five variables in total. They are:
Tangibles, Reliability, Responsiveness, Assurance and Empathy.

The second type of variable, ‘Dependent Variable’, contains one variable and that is ‘Customer
Satisfaction.’

3.5.1.1.1 Independent Variables and Their Indicators:


Independent variables and their associated indicators are listed in the Table 3.1 below:
Independent variables and indicators
Variable Name Indicators Source
TAN01. Visually attractive building exterior
TAN02. Visually attractive dining arrangement
TAN03. Well-dressed staff members
TAN04. Décor according to image and price range
TAN05. Easily readable menu
Tangibles TAN06. Visually attractive menu Stevens et al.
TAN07. Spacious dining area (1995)
TAN08. Clean rest rooms
13

TAN09. Clean dining areas


TAN10. Comfortable sitting arrangement
REL01. Providing service in promised time
REL02. Correcting mistakes promptly
Reliability REL03. Dependable and consistent Stevens et al.
REL04. Providing accurate guest check (1995)
REL05. Serving food accurately
RES01. Having employees shift to maintain speed and
Responsiveness quality of service Stevens et al.
RES02. Prompt and quick service (1995)
RES03. Giving extra effort to handle special request
ASS01. Knowledgeable employees
ASS02. Safe for financial transaction
ASS03. Capable and willing personnel
Assurance ASS04. Safe environment Stevens et al.
ASS05. Well-trained, competent and experienced (1995)
personnel
ASS06. Supportive restaurant administration
EMP01. Caring employees who are sensitive to individual
needs and wants
Empathy EMP02. Making customers feel special Stevens et al.
EMP03. Anticipating individual needs and wants (1995)
EMP04. Sympathetic and reassuring employees
EMP05. Having customers’ best interest at heart
Table 3.1

3.5.1.1.2 Dependent Variable and Its Indicators:


Dependent variable and its associated indicators are listed in the Table 3.2 below:
Dependent variable and indicators
Variable Name Indicators Source
SAT01. Satisfaction with the dining facility
Customer SAT02. Satisfaction with the quality of the service Kim et al. (2009)
Satisfaction provided
SAT03. Satisfaction with the overall dining experience
Table 3.2

3.5.1.2 Questionnaire Design:


Questionnaire was designed into 3 parts. Part A contains 29 statements classified into 5 groups. All of
the statements are used to assess customer perception about a fast casual restaurant’s service quality
(Stevens et al., 1995). Part B contains 3 statements regarding customer satisfaction (Kim et al., 2009).
Both of these parts were taken from aforementioned literatures. Part C contains some demographic
questions regarding age, gender, education level, profession, monthly income and a fast casual
14

restaurant where the respondent must have had dined six time or more in the six months prior to this
research conducted.

There are total 38 questions including the demographic ones. Questionnaire category is explained in a
table below:

Questionnaire category

Part Category Number of Contents of the Questions


Questions
1 10 Tangibles Factors
2 5 Reliability Factors
A 3 3 Responsiveness Factors
4 6 Assurance Factors
5 5 Empathy Factors
B 6 3 Customer Satisfaction Factors
C 7 6 General information of the respondent
Table 3.3

3.6 Data Analysis:

3.6.1 Measurement Instrument:


Rating scales are one of the most popular tools in marketing research. Rating scales are widely used to
capture certain information on a specific range of phenomena. As Dawes (2008, p.87) explained about
rating scales- “In consumer research, respondents may be asked about their attitudes, perceptions, or
evaluations of products, brands, or messages - among many other possibilities. In other marketing
research streams, respondents such as managers or marketing personnel may be asked to rate their
company’s performance, type of strategic focus, personnel, degree of marketing excellence, training
regimes and so forth using such scales.”

Rating scales typically require the respondent to choose their answer from a definite range of verbal
statements or numbers. Here, a seven-point Likert scale has been used to gauge the independent and
dependent variables. Here, 1 point was allotted to “Entirely Disagree (ED)” which implied the lowest
level of agreement. On the other hand, 7 point was allotted to “Entirely Agree (EA)” which depicted
the highest level of agreement. This scale is consistent with past studies on customer satisfaction and
service quality (Andaleeb and Conway, 2006).

Here is the complete explanation of the seven-point Likert scale that has been used here:
15

Explanation of Likert scale used in this study

Points 1 2 3 4 5 6 7
Assigned

Meaning Entirely Mostly Somewhat Neutral Somewhat Mostly Entirely


Disagree Disagree Disagree (N) Agree Agree Agree
(ED) (MD) (SD) (SA) (MA) (EA)

Table 3.4
Perceptual measures were only taken into account while measuring service quality in order to keep
the instrument and the analysis simple.Cronin and Taylor (1992) recommended that service quality
can be assessed adequately by using perceptions measures alone. Many of the researchers in the same
field suggested the same approach before (Teas, 1993; Andaleeb and Basu, 1994) in lieu of gap score
approach.

For the demographic information in Part C, each response was assigned with an ascending number
label. These number labels indicated nothing since the information acquired here were nominal data
in nature.

3.6.2. Statistical Methods of Data Analysis:


The data gathered through field survey were analyzed using IBM SPSS version 23. Descriptive
statistics were shown to give an idea about general attributes of sample, variables and their indicators.
Results were shown by pie charts, mean and standard deviation. Inferential statistics were also
conducted to test research hypotheses. Reliability Analysis (Cronbach Alpha), Correlation Analysis
and Regression Analysis were conducted in this regard.
16

Chapter Four: Analysis

4.1 Descriptive Statistics:

4.1.1 Sample Profile:


Respondents of diversified range participated in the survey of this study. The questionnaire required
the respondents to provide demographic data. Such as- age, gender, educational qualification,
occupation and monthly income in part C of the questionnaire. A frequency test was conducted to
analyze the demographic set of data. Each attributes of the data are illustrated in details in the
following section. A summary of the data is also attached with it.

4.1.1.1 Age:
The respondents were divided into three distinct age groups. They were 18 to 30 years, 31 to 45 years
and above 45 years. 99 of the respondents were from the age group of 18 to 30 years. 66 of the
respondents were from the age group of 31 years to 45 years. And rest of the 15 respondents were
from the age group of 45 and above. No missing value was found. As it is shown in the Figure 4.1,
55% of the respondents belonged to the age group of 18 to 30 years, 36.67% of the respondents were
from the age group of 31 to 45 years and 8.33% of the respondents were from the age group of 45
years and above. The analysis indicates that respondent surveyed for this study were mostly from the
age group of 18 to 30 years.

15 0
8.33%0.00%

18-30

66 31-45
99
36.67% Above 45
55.00%

Figure 4.1: Pie Chart of Respondent’s Frequency - Age


17

4.1.1.2 Gender:
Among a total of 180 respondents, 102 were male and 78 were female. As it is shown in the Figure
4.2, Male represented 56.7% of the sample, on the other hand female represented 43.3% of the
sample. No missing value was found.

0
0.00%

78
43.33%
Male
Female
102
56.67%

Figure 4.2: Pie Chart of Respondent’s Frequency – Gender

4.1.1.3 Education Level:


As it is shown in figure 4.3, 10 of the total respondents’ educational qualification was SSC, 30 of the
total respondent’s educational qualification was HSC, 115 of the total respondents’ education level
was Graduation and 25 of the total respondents’ education level was Post Graduation. Out of 180
respondents, 140 of them were graduated or post graduated, which indicates that the sample selected
was highly educated. As it can be seen in Figure 4.3, 5.56% of the respondents had educational
qualification of SSC, 16.67% of the respondents had educational qualification of HSC, 63.89% of the
respondents had educational qualification of graduation and 13.89% of the respondents had
educational qualification of post graduation. No missing value was found. The analysis indicates that
most of the respondents volunteered in this study were graduated, which accounted for 63.9% of the
total respondents.
18

10
25 5.56%
13.89%

30
16.67%

SSC
HSC
Graduate
Post Graduate

115
63.89%

Figure 4.3: Pie Chart of Respondent’s Frequency – Education Level

4.1.1.4 Occupation:
According to Figure 4.4, 72 of the respondents were students which accounted for 40% of the total. 63
respondents were service holder which accounted for 35% of the total. 31respondents were
businessmen which accounted for 17.22% of the respondents. 14 respondents were from other
occupations which belonged to 7.78% of the total. No missing value was found. The analysis
indicates that most of the respondents of this study were students (40%) and service holder (35%).

14
7.78%

31
17.22%
72
40.00% Student
Service Holder
Businessman
Others

63
35.00%

Figure 4.4: Pie Chart of Respondent’s Frequency – Occupation


19

4.1.1.5 Income Level:


As it is shown in Figure 4.5, Out of 180 respondents, 111 had monthly income below BDT 25000,
which accounted for 61.67% of the total. 27 had monthly income between BDT 25000 to 50000,
which accounted for 15% of the total number of respondents. 33 respondents had monthly income
between BDT 50,001 to 1,00,000 which belonged to 18.33% of the total sample. 9 respondents had
monthly income above BDT 1,00,000 which accounted for 5% of the total number of respondents. No
missing value was found. The analysis indicates that most of the respondents of this study have
income below BDT 25,000.

9
5.00%

33
18.33%

Below 25,000
25,000 - 50,000
50,001 - 1,00,000

27 111 Above 1,00,000


15.00% 61.67%

Figure 4.5: Pie Chart of Respondent’s Frequency – Monthly Income Level

4.1.1.6 Fast Casual Restaurant Chosen


As it can be seen in Figure 4.6, Out of 180 respondents, 31 chose Shawarma House which represented
17.22% of the total respondents, 40 chose Bistro-C which represented 22.22% of the total
respondents, 21 chose King Shawarma and Café Restaurant which accounted for 11.67% of the total
respondents, 29 chose Rooster King which accounted for 16.11% of the total respondents, 20 chose
EFC which represented 11.11% of the total respondents, 21 chose The Coffee Club which accounted
for 11.67% of the total respondents and lastly, 18 chose Citylight Café and Restaurant which
accounted for 10% of the total respondents. The analysis indicates that that most of the respondents of
this study opted for Bistro-C. Shawarma House came second and Rooster King came third in this
regard.
20

18
10.00% 31
17.22%

21
Shawarma House
11.67%
Bistro - C
King Shawarma and Café Restaurant
Rooster King
20
11.11% 40 EFC
22.22%
The Coffee Club
Citylight Café and Restaurant

29
16.11% 21
11.67%

Figure 4.6: Pie Chart of Respondent’s Frequency – Fast Casual Restaurant Chosen

4.1.6 Summary of the Demographic Data


Profile of the respondents according to different demographic characteristics (age, gender, education
level, occupation, income group and chosen fast casual restaurant) has been presented below for better
understanding:

Summary of the Demographic Data

Demographic Classifications Frequency Percentage


Group

18-30 99 55%

Age 31-45 66 36.7%

Above 45 15 8.3%

Male 102 56.7%

Gender Female 78 43.4%

SSC 10 5.6%

Education Level HSC 30 16.7%

Graduate 115 63.9%

Post Graduate 25 13.9%


21

Demographic Classifications Frequency Percentage


Group

Student 72 40%

Occupation Service Holder 63 35%

Businessman 31 17.2%

Others 14 7.8%

Low Income 89 49.4%

Income Group Medium Income 49 27.2%

High Income 42 23.3%

Shawarma House 31 17.2%

Bistro-C 40 22.2%

Fast Casual King Shawarma and 21 11.7%


Restaurant Chosen Café Restaurant

Rooster King 29 16.1%

EFC 20 11.1%

The Coffee Club 21 11.7%

Citylight Café and 18 10%


Restaurant

Table 4.1

4.1.2 Tangibles
It is visible that most of the respondents were positive in terms of the most of the indicators of
tangible factors. The mean values calculated were 4.9833, 5.1111, 5.1000, 5.1889, 5.2611, 5.1056,
5.1167, 5.0778, 5.1944, 5.1667 respectively for TAN01 to TAN10. Most of the respondents chose
“Somewhat Agree” to the statements regarding the tangible factors. The respondents agreed least to
the tangible indicator “the restaurant has a visually attractive building exterior” with a mean value of
4.9833. The respondents agreed most to the tangible indicator “the menu of the restaurant is easily
readable” with a mean value of 5.2611.
22

Mean Value of Response of Tangibles Indicators

N Mean Std. Deviation


TAN01 180 4.9833 1.21202
TAN02 180 5.1111 1.10301
TAN03 180 5.1000 1.01442
TAN04 180 5.1889 1.06119
TAN05 180 5.2611 1.02136
TAN06 180 5.1056 1.12114
TAN07 180 5.1167 1.11001
TAN08 180 5.0778 1.16971
TAN09 180 5.1944 1.07847
TAN10 180 5.1667 1.14091
Valid N
180
(listwise)
Table 4.2

4.1.3 Reliability
The mean values computed for indicators of reliability factor are 5.1278, 5.1000, 5.1500, 5.0889,
5.1556 respectively for REL01 to REL05. Respondents provided mostly positive feedbacks to the
statements regarding statements of reliability factor. The respondents agreed least to the reliability
indicator “the restaurant provides an accurate guest check” with a mean value of 5.0889. The
respondents agreed most to the reliability indicator “the restaurant serves the food exactly as you
ordered it” with a mean value of 5.1556.

Mean Value of Response of Reliability Indicators

N Mean Std. Deviation


REL01 180 5.1278 1.02500
REL02 180 5.1000 1.14872
REL03 180 5.1500 .97152
REL04 180 5.0889 1.12508
REL05 180 5.1556 1.14737
Valid N
180
(listwise)
Table 4.3

4.1.4 Responsiveness
The mean values computed for indicators of responsiveness factor are 4.7222, 4.8111, 4.8500
respectively for RES01 to RES03. Most of the respondents provided positive feedbacks to statements
23

regarding responsiveness factors. The respondents agreed least to the responsiveness indicator “during
busy hours, the restaurant has employees shift to help each other maintain speed and quality of
service” with a mean value of 4.7222. The respondents agreed most to the responsiveness indicator
“the restaurant gives extra effort to handle your special request” with a mean value of 5.1556.

Mean Value of Response of Responsiveness Indicators

N Mean Std. Deviation


RES01 180 4.7222 .87839
RES02 180 4.8111 .96757
RES03 180 4.8500 1.01648
Valid N
180
(listwise)
Table 4.4

4.1.5 Assurance
The mean values computed for indicators of assurance factor are 4.8389, 4.9556, 4.9333, 5.1278,
4.9833, 4.8944 respectively for ASS01 to ASS06. Most of the respondents favored to positive
feedbacks to the statements regarding the assurance factor.The respondents agreed least to the
assurance indicator “the employees of the restaurant can answer to your questions completely” with a
mean value of 4.8389. The respondents agreed most to the assurance indicator “the restaurant makes
you feel personally safe” with a mean value of 5.1278.

Mean Value of Response of Assurance Indicators

N Mean Std. Deviation


ASS01 180 4.8389 1.06841
ASS02 180 4.9556 1.06662
ASS03 180 4.9333 1.12662
ASS04 180 5.1278 1.02500
ASS05 180 4.9833 1.17457
ASS06 180 4.8944 1.06492
Valid N
180
(listwise)
Table 4.5

4.1.6 Empathy
The mean values calculated for indicators of empathy factors are 4.3833, 4.4222, 4.4000, 4.5889,
4.7778 respectively for EMP01 to EMP05. Most of the respondents provided positive feedbacks
toward the statements regarding empathy factor. The respondents agreed least to the empathy
24

indicator “employees of the restaurant are sensitive to your individual needs and wants, rather than
always relying on policies and procedures” with a mean value of 4.3833. The respondents agreed
most to the empathy indicator “the restaurant seems to have the customers’ best interest at heart” with
a mean value of 4.7778.

Mean Value of Response of Empathy Indicators

N Mean Std. Deviation


EMP01 180 4.3833 1.00987
EMP02 180 4.4222 1.15287
EMP03 180 4.4000 1.02810
EMP04 180 4.5889 1.09232
EMP05 180 4.7778 1.09113
Valid N
180
(listwise)
Table 4.6

4.1.7 Customer Satisfaction


The mean values calculated for indicators of customer satisfaction factors are 4.8556, 5.0111, 4.9944
respectively for SAT01 to SAT03. Most of the respondents provided mostly positive feedbacks
toward the statements regarding customer satisfaction factor. The respondents agreed least to the
customer satisfaction indicator “I am satisfied with the dining facility of the restaurant” with a mean
value of 4.8556. The respondents agreed most to the customer satisfaction indicator “I am satisfied
with the quality of service provided by the restaurant” with a mean value of 5.0111.

Mean Value of Response of Customer Satisfaction


Indicators

N Mean Std. Deviation


SAT01 180 4.8556 .93428
SAT02 180 5.0111 1.04100
SAT03 180 4.9944 1.04372
Valid N
180
(listwise)
Table 4.7
25

4.1.8 Reliability Analysis


Reliability analysis is used to learn the properties of the measurement scale applied in the study and
the components that compose the scale (ibm.com, 2017). According to Statistics Solutions, reliability
analysis refers to the idea that a scale must consistently reflect the construct it is measuring.
Cronbach’s Alpha was calculated to measure the internal consistency of the variables of this study
which is how closely related a set of items are within a group. There were ten indicators for tangibles
variable, five indicators for reliability variable, three indicators for responsiveness variable, six
indicators for assurance variable, five indicators for empathy variable and lastly three indicators for
customer satisfaction variable. As it can be shown in Table 4.9, the variable-wise scores were .917 for
tangible variable, .864 for reliability variable, .740 for responsiveness variable, .892 for assurance
variable, .812 for empathy variable and .855 for customer satisfaction variable.

The values of Cronbach Alpha between .80-.95 are considered to have very good reliability, and an
Alpha value between .70-.80 are meant to have good reliability, and an Alpha value between .70-.60
states fair reliability. When the Cronbach Alpha is below .60, the scale is supposed to have poor
reliability (Zikmundet al., 2010). In this study, it has been found that all the values of Cronbach Alpha
were more than .60 and have good reliability.It is shown in Table 4.8 that, the overall Cronbach Alpha
value was .917, which indicates a very good reliability.

Reliability Analysis- Overall

Cronbach's
Alpha Based
on
Cronbach's Standardized
Alpha Items N of Items
.917 .916 6
Table 4.8

Reliability Analysis – Item wise

Variables Type of Variables Cronbach’s Alpha Number of Items


Tangibles Independent .917 10
Reliability Independent .864 5
Responsiveness Independent .740 3
Assurance Independent .892 6
Empathy Independent .812 5
Customer Satisfaction Dependent .855 3
Table 4.9
26

4.2 Inferential Statistics:

4.2.1 Correlation Analysis


In this study, it is hypothesized that there is a positive relationship between factors of service quality
and customer satisfaction. Correlation Analysis was conducted to test the hypotheses. Spearman Rho
coefficient has been calculated to check the correlations between independent variables and dependent
variable. The Spearman method is mostly useful when the variables are ordinal. Correlation
coefficients values range in strength from -1.00 to +1.00. A perfect negative correlation of -1.00
indicates that for every member in the sample or population, a rise of score in one variable causes a
decrease of score in other variable measured. A perfect positive correlation of +1.00 indicates that for
every member in the sample or population, a rise of score in one variable initiates a rise of score in
other variable measured. A value of zero indicates that there is no relationship among the variables
(Urdan T.C., 2010).

On the other hand, values of correlation coefficient between 0.50 and 1 are considered to have
reliability of great strength. Values of correlation coefficient between 0.30 and 0.49 are considered to
have reliability of medium strength andvalues between 0.10 and 0.29 indicatesreliability of poor
strength (Cohen, 1988).Generally, correlation coefficient ranges between -.70 to +.70 (Urdan T.C.,
2010).

Correlation Analysis

SAT
Spearman's rho TAN Correlation Coefficient .605**

Sig. (2-tailed) .000


N 180
REL Correlation Coefficient .543**
Sig. (2-tailed) .000
N 180
RES Correlation Coefficient .514**
Sig. (2-tailed) .000
N 180
ASS Correlation Coefficient .608**
Sig. (2-tailed) .000
N 180
EMP Correlation Coefficient .539**
Sig. (2-tailed) .000
N 180
Table 4.10
27

In Table 4.10 above, it is observed that all the independent variables are positively correlated with
dependent variable. The Spearman’s rho correlation between tangibles and customer satisfaction is
.605 which indicates that there is a strong positive relationship between these two variables. As the
correlation is positive in nature, it can be deducted that if factors of tangibles increase, customer
satisfaction increases too. It is proven that tangible factors are positively related to customer
satisfaction. Therefore, H01 is proven and accepted.

In Table 4.10, the Spearman’s rho correlation between reliability and customer satisfaction is .543
which indicates that there is a strong positive relationship between these two variables. As the
correlation is positive in nature, it can be concluded that if factors of reliability increase, customer
satisfaction increases too. It is proven that reliability factors are positively related to customer
satisfaction. Therefore, H02 is proven and accepted.

In Table 4.10, the Spearman’s rho correlation between responsiveness and customer satisfaction is
.514 which indicates that there is a fairly strong positive relationship between these two variables. As
the correlation is positive in nature, it can be said that if factors of responsiveness increase, customer
satisfaction increases too. It is proven that responsiveness factors are positively related to customer
satisfaction. Therefore, H03 is proven and accepted.

In Table 4.10, The Spearman’s rho correlation between assurance and customer satisfaction is .608
which indicates that there is a strong positive relationship between these two variables. As the
correlation is positive in nature, it can be deducted that if factors of assurance increase, customer
satisfaction increases too. It is proven that assurance factors are positively related to customer
satisfaction. Therefore, H04 is proven and accepted.

In Table 4.10, the Spearman’s rho correlation between empathy and customer satisfaction is .539
which indicates that there is a fairly strong positive relationship between these two variables. As the
correlation is positive in nature, it can be deducted that if factors of empathy increase, customer
satisfaction increases too. It is proven that empathy factors are positively related to customer
satisfaction. Therefore, H05 is proven and accepted.

4.2.2 Regression Analysis


The main objective of regression analysis is to model the relationship between one or more
independent variables and a dependent variable (Peck, Olsen, & Devore, 2000). Multiple regression
analysis was conducted with the help of SPSS software to assess the relative importance of the five
independent variables of service quality.

Here, in Table 4.11, the multiple correlation coefficient R=.772 which indicates that there is a strong
positive correlation between one dependent variable and five independent variables. Here, R square
28

value of .595 indicates that, 59.5% of variation in dependent variable (Customer Satisfaction) is
explained by the independent variables (Tangibles, Responsiveness, Assurance, Reliability and
Empathy).

Regression Analysis

Adjusted R Std. Error of


Model R R Square Square the Estimate
a
1 .772 .595 .584 .57233
a. Predictors: (Constant), EMP, RES, TAN, ASS, REL
Table 4.11

Table 4.12 shows goodness of the model. Here, the lower the value of F, the better it fits.(Zikmundet
al., 2010). Here, at the significance level of .000 (<.05), the F value is 51.189 with independent
variables. Hence, it can be said that the data fits the model.

ANOVA Table

Sum of
Model Squares df Mean Square F Sig.
1 Regression 83.840 5 16.768 51.189 .000b
Residual 56.997 174 .328
Total 140.836 179
a. Dependent Variable: SAT
b. Predictors: (Constant), EMP, RES, TAN, ASS, REL

Table 4.12

Table 4.13 shows that customer satisfaction is mostly influenced by tangible factors (.418), followed
by empathy factors (.237), responsiveness factors (.195), assurance factors (.115) and reliability
factors (.0146) through unstandardized coefficient. According to sig. value, tangibles, responsiveness
and empathy factors have statistically significant correlation with customer satisfaction since their sig.
values are less than 0.05. On the other hand, reliability and assurance factors do not have significant
correlation with customer satisfaction since their sig. values are greater than 0.05. It can be also safely
assumed that there is no multicollinearity in the regression model, since all the values of VIFs are less
than 10 (Gujarati, 2004).
29

Regression Coefficient

Model Unstandardized Standardized t Sig. Collinearity


Coefficients Coefficients Statistics
B Std. Error Beta Toleran VIF
ce
1 (Constant) .152 .314 .485 .628
TAN .418 .103 .394 4.043 .000 .245 4.087
REL .016 .100 .015 .155 .877 .240 4.168
RES .195 .073 .171 2.682 .008 .574 1.741
ASS .115 .098 .114 1.179 .240 .250 3.999
EMP .237 .070 .217 3.369 .001 .559 1.790
Table 4.13

Here, in Table 4.13, unstandardized coefficient value for tangible factors is .418. For 100% change in
tangible factors, customer satisfaction is changed by 41.8%. Unstandardized coefficient value for
reliability factors is .016. For 100% change in reliability factors, customer satisfaction is changed by
1.6%. Unstandardized coefficient value for responsiveness factors is .195. For 100% change in
responsiveness factors, customer satisfaction is changed by 19.5%. Unstandardized coefficient value
for assurance factors is .115. For 100% change in assurance factors, customer satisfaction is changed
by 11.5%. Lastly, unstandardized coefficient value for empathy factors is .237. For 100% change in
empathy factors, customer satisfaction is changed by 23.7%.

As it can be seen that not reliability factors but tangible factors contribute the most to customer
satisfaction. Therefore, H06 is rejected.
30

Chapter Five: Conclusion

5.1 Introduction

This study was based on six hypotheses regarding the relationship between factors of service quality
and customer satisfaction based on the fast casual restaurants of Khulna. To test the hypotheses, a
structured questionnaire was adapted and data were collected through field survey. Then the collected
data were analyzed through SPSS Statistics software. Both descriptive statistics and inferential
statistics were conducted. In inferential statistics, correlation analysis and regression analysis were
carried out to test the proposed hypotheses. This chapter summarizes the analysis.

5.2 Summary of the Hypotheses and Findings:

Here, the summary of the hypotheses is presented below in table 5.1:

Hypotheses Remarks
H01: Tangibles factors are positively related to customer satisfaction. Accepted
H02: Reliability factors are positively related to customer satisfaction. Accepted
H03: Responsiveness factors are positively related to customer satisfaction. Accepted
H04: Assurance factors are positively related to customer satisfaction. Accepted
H05: Empathy factors are positively related to customer satisfaction. Accepted
H06: Reliability factors are the most contributing factor toward customer Rejected
satisfaction.

Table 5.1: Summary of the Hypotheses

In this study, it has been found that all the factors of service quality (tangibles, reliability,
responsiveness, assurance and empathy) has a positive relationship with customer satisfaction in the
industry of fast casual restaurants of Khulna city. No factors of service quality did impact negatively
on customer satisfaction.

In many of the previous researches, reliability factors were found as most contributing factors of
service quality towards customer satisfaction in different service industries (Wilson et al., 2011; Negi,
2009; Frost and Kumar, 2000). But in this study, it has been found that, for the fast casual restaurants
of Khulna city, tangibles factors of service quality contribute the most to the customer satisfaction.
100% increase in tangible factors can lead to 41.8% increase in customer satisfaction. Empathy
factors come second in this regard. Empathy factors are accounted for 23.7% of change in customer
satisfaction. Responsiveness factors are the third-most contributing factors of service quality towards
customer satisfaction. They are accounted for 19.5% of change in customer satisfaction. Unlike most
of the previous studies, tangibles factors are proven to be the most important contributing factors
toward customer satisfaction in the context of fast casual restaurants of Khulna.
31

5.3 Managerial Implications:

The findings obtained from this study will help the managers of fast casual restaurants of Khulna city
in formulating strategies. Firstly, managers of these restaurants must increase their overall service
quality, since increased service quality results in increased customer satisfaction because it has been
established in this study that factors of service quality and customer satisfaction are positively related
in the context of fast casual restaurants of Khulna. Secondly, Managers need to improve the tangible
elements of their restaurants since it has been found in this study that tangible factors are the most
contributing factors toward customer satisfaction. Managers must ensure a visually appealing building
exterior and a visually attractive dining arrangement for the customers. They must appoint staff
members who are clean, neat and well-dressed. They should also give the restaurant a décor in
keeping with its image and price range. They should make sure that the menu of the restaurant is
visually attractive and easily readable. They must provide clean rest rooms and dining rooms for the
customers of the restaurants. They should also make sure that the dining area is spacious and the
sitting arrangement is comfortable. Thirdly, managers need to work on the empathy factors of their
restaurants’ service quality since these factors were the second-most contributing factors toward
customer satisfaction. The managers must ask their employees to be sensitive to customers’ individual
needs and wants rather sticking to policies and procedures all the time. They should also ask the stuffs
to be reassuring and sympathetic if anything goes wrong with the customers. The managers should
make the customers feel special, anticipate their individual needs and wants and keep the customers’
best interest at heart. Lastly, they should be more careful about responsiveness factors because they
came as the third-most important factors contributing to customer satisfaction. They should assign
different shifts of employees in busy hours to maintain speed and quality of service. They must make
sure that the restaurants provide quick services and give extra effort to handle special requests.
Although not statistically significant, reliability factors and assurance factors of service quality should
be given importance to since they are positively related to customer satisfaction as well.

5.4 Conclusion

The purpose of this study is to empirically investigate the relationship between factors of service
quality and customer satisfaction in the context of fast casual restaurants of Khulna city. A distinctive
contribution of this study is that the findings suggest crucial areas to address in increasing customer
satisfaction in the aforementioned restaurant industry. Customers of fast casual restaurants of Khulna
city are observed to be giving most importance to tangible factors and empathy factors while
assessing quality of service and thus forming satisfaction among themselves. Managers of these
restaurants can make the best use of these results by focusing more on the tangible factors and
32

empathy factors so that their customers can be fully satisfied. It will eventually earn them return
patronage, positive word-of-mouth and great profitability.
33

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Appendix 1: Questionnaire

Relationship BetweenService Quality Factors and Customer Satisfaction: A


Study Based On the Fast Casual Restaurants of Khulna
[Dear respondents, this study are being conducted for academic purposes only. The data provided
here will be kept confidential. You are requested to read each of the statement carefully and choose
the option that you feel best reflecting your perception about the statement]

Part A: Customer Perception

(For each of the statement below, put a tick (√) mark on the response that best characterizes
how you feel about the statement regarding your last six or more visits to any of the fast
casual restaurants of Khulna City in last six months, where: 1 = Entirely Disagree, 2 = Mostly
Disagree, 3 = Somewhat Disagree,4 = Neutral, 5 = Somewhat Agree, 6 = Mostly Agree, 7=
Entirely Agree)

No Tangibles ED MD SD N SA MA EA
1 The restaurant has a visually attractive building 1 2 3 4 5 6 7
exterior
2 The restaurant has a visually attractive dining 1 2 3 4 5 6 7
arrangement
3 The restaurant has staff members who are clean, 1 2 3 4 5 6 7
neat and appropriately dressed
4 The restaurant has a décor in keeping with its 1 2 3 4 5 6 7
image and price range
5 The menu of the restaurant is easily readable 1 2 3 4 5 6 7
6 The restaurant has a visually attractive menu that 1 2 3 4 5 6 7
reflects the restaurant’s image
7 The dining area is comfortable and easy to move 1 2 3 4 5 6 7
around in
8 The restaurant has thoroughly clean rest rooms 1 2 3 4 5 6 7
9 The restaurant has thoroughly clean dining areas 1 2 3 4 5 6 7
10 The sitting arrangement of the restaurant is 1 2 3 4 5 6 7
comfortable

No Reliability ED MD SD N SA MA EA
11 The restaurant serves you in promised time 1 2 3 4 5 6 7
12 The restaurant quickly corrects its mistakes 1 2 3 4 5 6 7
13 The restaurant is dependable and consistent 1 2 3 4 5 6 7
14 The restaurant provides an accurate guest check 1 2 3 4 5 6 7
15 The restaurant serves the food exactly as you 1 2 3 4 5 6 7
ordered it

No Responsiveness ED MD SD N SA MA EA
16 During busy hours, the restaurant has employees 1 2 3 4 5 6 7
39

shift to help each other maintain speed and quality


of service
17 The restaurant provides prompt and quick service 1 2 3 4 5 6 7
18 The restaurant gives extra effort to handle your 1 2 3 4 5 6 7
special request

No Assurance ED MD SD N SA MA EA
19 The employees of the restaurant can answer to your 1 2 3 4 5 6 7
questions completely
20 The restaurant makes you feel comfortable and 1 2 3 4 5 6 7
confident in your dealings with them
21 The restaurant has personnel who are both able and 1 2 3 4 5 6 7
willing to give you information about menu items,
their ingredients and method of preparation
22 The restaurant makes you feel personally safe 1 2 3 4 5 6 7
23 The restaurant personnel seem well-trained, 1 2 3 4 5 6 7
competent and experienced
24 The restaurant seems to give employees support so 1 2 3 4 5 6 7
that they can do their jobs well

No Empathy ED MD SD N SA MA EA
25 Employees of the restaurant are sensitive to your 1 2 3 4 5 6 7
individual needs and wants, rather than always
relying on policies and procedures
26 The restaurant makes you feel special 1 2 3 4 5 6 7
27 The restaurant anticipates your individual needs 1 2 3 4 5 6 7
and wants
28 Employees of the restaurant are sympathetic and 1 2 3 4 5 6 7
reassuring if something is wrong
29 The restaurant seems to have the customers’ best 1 2 3 4 5 6 7
interest at heart

Part B: Customer Satisfaction

(For each of the statement below, put a tick (√) mark on the response that best characterizes
how you feel about the statement regarding the fast casual restaurant that you considered
earlier in Part A, where: 1 = Entirely Disagree, 2 = Mostly Disagree, 3 = Somewhat
Disagree,
 4 = Neutral, 5 = Somewhat Agree, 6 = Mostly Agree, 7= Entirely Agree)

No Satisfaction ED MD SD N SA MA EA
1 I am satisfied with the dining facility of the 1 2 3 4 5 6 7
restaurant
2 I am satisfied with the quality of service provided by 1 2 3 4 5 6 7
the restaurant
3 I am satisfied with the overall dining experience 1 2 3 4 5 6 7
provided by the restaurant
40

Part C: General Information

(Please, put a tick (√) mark on the option that is most suitable.)

Name of the respondent (Optional): ___________________________________________

Age:
18-30 31-45 Above 45

Gender:
Male Female

Education Level:
SSC HSC Graduate Post Graduate

Occupation:
Student Service Holder Businessman Others

Monthly Income:
Below 25,000 25,000-50,000 50,001-1,00,000 Above 1,00,000

Choose One Fast Casual Restaurant of Khulna City Where You Have Been Six or More
Times in Last Six Months:
Shawarma Bistro-C King Rooster EFC The Citylight Others
House Shawarma King Coffee Café and
and Café Club Restaurant
Restaurant

Thank You Very Much for Your Kind Cooperation


41

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