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AFFECTING CUSTOMER SATISFACTION TO
RESTAURANT IN PAGADIAN CITY.”

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A Thesis Proposal Presented to

The Faculty of Hospitality Management

# J.H. CERILLES STATE COLLEGE

Pagadian City
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In Partial Fulfillment

Of the Requirements for the Degree

BACHELOR OF SCIENCE IN HOSPITALITY MANAGEMENT

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By:

PIRATER, ERMIE ANN T.

OGOCIERDA, PRINCESS MAY

SETON, VERNALYN

ARGOMEDO, RHEA MAE

CHAPTER I

INTRODUCTION

Background of the Study

  The sector of restaurant business is one of the competitive sectors where they try
different experiments in respect to meet the customer satisfaction towards delivered services.
In the restaurant industry, good customer service means being friendly, available, attentive
and quick to take care of customers' needs. The more satisfied guests are, the more likely they
are to spend more, visit repetitively, share their positive experiences, and recommend
restaurants to friends, families, and strangers online. Restaurant is generally an establishment
where the public may obtain meals or refreshments.

Customer satisfaction is how satisfied people are with the quality of the product or 
when the establishment meet or surpass the customer’s expectations. Since satisfied customer 
is the core concern of any organization therefore, they pay close attention toward the factors
that influence a customer’s decision.

The service industry is one of the most important industries in the Philippines and
the restaurant industry is one of the biggest components. The restaurant industry is divided
into two main categories: Chain restaurants and Independent restaurants. Chain restaurants
are corporate restaurant chains with a board of owners and are found throughout an entire
region or nation. Independent restaurant owners usually only have one or two restaurants in a
small radius, and they manage those restaurants themselves. Based on the level of service,
these restaurants are divided into several main categories. These categories are quick service
restaurants, casual restaurants and fine dining restaurants (DeMicco et al. 2017).

  In the restaurant business, customer satisfaction can be linked directly to

restaurant sales; thus, it is important to identify which perceived quality factors more strongly
affect customer satisfaction or dissatisfaction. (Whang, 2010).

  To find the ideal marketing strategy, many restaurateurs have spent

considerable time and effort trying in order to sustain their status in a competitive restaurant
market. Generally, they consider that customer satisfaction is a crucial factor in their 
competitive fields. As customer satisfaction could greatly affect predicting customer post-
 purchase behavior (Tam, 2000), the concept of customer satisfaction has become an
important topic in many restaurants and in academic research. Unfortunately, although there

is no assurance that the customer will make a return visit due to the intangible nature of 
services (Dube, Renaghan, and Miller, 1994).

  Customer satisfaction is defined here in Oliver’s (1997) terms: that it is the

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. Thus,
customers are likely to consider specific aspects of the transaction such as product features
(e.g., food quality and restaurant ambience), service features (sse.g., responsiveness of the
server), to be satisfied with their overall restaurant experience. (Conway, 2006).

  In Pagadian City, one of the cities of the province of Zamboanga del Sur, there
are several establishments of restaurants that are currently operating. Considering there are
lots of population of this area, restaurateurs chose this place to operate their businesses due to
success and growth of the economics of this city.

  There are lots of factors that affects the customer’s satisfaction. And we decided
to have this topic to investigate the key variables that are having strong influence on customer 
satisfaction in restaurants in Pagadian City.

Conceptual Framework 

  The conceptual framework of this study was illustrated in graphical illustration.

As shown in the figure 1, the three (3) variables which are service quality, food quality and
restaurant ambience have greatly influenced the customer’s satisfaction.

  This conceptual framework shown in Figure 1, which is adapted from Omar (2014)
model. From the literature review, it is clear that food quality, service quality and restaurant
ambience can affect customer satisfaction. The study is supported on the theory by Wade,
2006. A customer will judge a restaurant based on several areas: food quality and
 presentation, service and ambiance.

Food Quality

Service Quality Customer Sa3sfac3on

RESTAURANT
AMBIENCE

Figure 1. Graphic illustration

Statement of the Problem

  This study is design to measure the factors affecting customer’s satisfaction to

restaurant in Pagadian City. Specifically, this study sought to answer the following questions:

1. What are the factors affecting customer’s satisfaction?

2. Is there a significant relationship between food, service and ambience and customer 
satisfaction?
3. Is food, service and ambience affect the customer satisfaction?

Based on the problem above that restaurant has various factors that can affect customer 
satisfaction. For that reason, we the researcher we wanted to study the factor affecting
customer satisfaction to restaurant in Pagadian City.

Hypothesis

  After reviewing the previous studies conducted on the factors affecting customer 
satisfaction to restaurant, the conceptual framework shown in Figure 1, which adapted from
Omar (2014) model. According to the conceptual framework, the following hypothesis were
formulated for this study:

H2: There is no correlation between food quality and customer satisfaction in restaurant.

H1: There is no correlation between service quality and customer satisfaction in restaurant.

H0: There is no correlation between restaurant ambience and customer satisfaction in

restaurant.

Significant of the Study

This study is conducted to provide information regarding to the factors that affecting
customers satisfaction to restaurants in Pagadian city. This research will be beneficial to the
 persons which were involved in this study. They were the following:

The management/establishment.

This study will provide reliable and useful information to the management who played a vital
role in ensuring that the customer’s needs and wants should be address properly. This would
help them formulate new ideas that could serve as basis in developing their marketing
strategies to attract more customers.

The customers.  

Being the respondents of this study, the exercise of responding to the questionnaires will help
the restaurants of Pagadian City to provide good food, quality service and good ambiance by
getting feedbacks on their opinions about what they expect to receive or experience from a
restaurant.

The researchers.

Findings of this study will help the researchers evaluate the operations and business
environment as to what aspects that the management will take corrective actions.

The future researchers.

The findings of the study would provide relevant information of any food and services-
oriented business and other researchers purposes

Scope and Limitation

  The scope of the study is more to the factors that affect customer satisfaction in
restaurant. Customer satisfaction at restaurants depend on customer’s assessment of the three
factors which are (food quality, services quality and restaurant ambience) when visiting a
restaurant. For this study, the respondents came from the City of Pagadian. The data will be
gathered from randomly selected customers. Limitations of this study are also discussed in
this section. The first limitation is the regard of the choosing a restaurant. This is because lot
of restaurants are in the City of Pagadian. Another limitation in this study is the respondent's
cooperation. Researchers were not able to check whether the respondents answered the
questionnaire survey or not. The refusal of the respondents to answer the questionnaire was
given a major limitation of this study.

Definition of Terms

  To have better understanding of this study, the following terms are defined in the
context of this research:

Customer satisfaction: is the measure of the gap between a customer’ expectation and
 perceive performance.

Restaurant: is a commercial establishment located within the Pagadian city which

specializes in preparation of quality food and to serve them to satisfy the customer’s
demands.

Chapter II

REVIEW OF RELATED LITERATURE

  This chapter presents the relevant literature that the researchers considered in
strengthening the importance of the present study.

Customers Satisfaction

  According to Deng et al., (2009) Customer satisfaction is becoming the most

important part in the business field because when your customer is satisfied then it will
 provide the profitable business to the industry. Basically, customer’s satisfaction is term
which means that how customers predict about your product after the use of a specific
 product and how they evaluate your product in single manner and compare with the
competitors’ products. The customer satisfaction is customer’s evaluation of goods and
services in term of whether it is according to the customer’s requirements or it is dissatisfied
the customer’s needs and wants.

Customer’s satisfaction is the customer’s evaluation of goods and services in term of whether 
it is according to the customer’s needs and wants or customers dissatisfied with the product
services or the dissatisfied with the performance of the products and not according to
expectation of customers and sometimes customers are more satisfied if products
 performance is beyond with their expectations. (Kotler P. &.,2012). And if one aspect of 
 product and services is not meeting the customer’s satisfaction then they can be dissatisfied
with the overall performance. So, for the food variable, it involves the price, quality, and
value of money. For the service variable, it includes the staff quality, behavior, and attitude
and for the restaurants it also involves the decoration and atmosphere. Customer satisfaction
is the present performance of the product or services which are providing to it on a specific
time or on that time when customers are using to it. (Gustafsson et al. 2005).

Some of the research said that customer satisfaction is key element to build the brand for the
long time as well as develop the brand image of the company within short time. Customer 
satisfaction means paying attention to lifetime customers, finding out what customers want,

solving their problems, managing their moments of truth, rewarding them, and encouraging
involvement from both customers and frontline employees. It pays to cultivate the loyalty or 
retention of customers who already expect to be satisfied. A loyal, lifetime customer 
increases profits and reduces lifetime expenses. (Struebing, Laura.,February 1996).

Customer satisfaction is not quickly or easily improved, thus making satisfaction a lagging
indicator. Instead, companies should be aware of customer inertia. This calls for continuous
monitoring and feedback programs. Customer identification is not straightforward, and
companies might ignore the variety of customer needs and expectations. Instead of 
emphasizing satisfaction, companies first should learn who their customers are. Therefore,
customer involvement must precede customer satisfaction through identification of customers
and their concerns; root cause analysis and subsequent improvements; evaluation of these
actions; and ongoing analyses. (Rosenberg, Jarrett., 1996)

Food Quality

  Food quality is the quality characteristics of food that is acceptable to customer.

Overall quality of the food and beverage, the taste, the freshness, the nutritious aspect, and
the portion size is categorized under food quality measurement. As a core product of a food
service operation, food and beverage quality has been given a great importance and has been
checked for many aspects such as temperature, texture, flavor, and aroma. Food and beverage
quality is considered to affect the customers’ intentions to come back again to a specific
restaurant. Oh, found a high positive relationship between consumer satisfaction with food
and beverage quality and their intention to continue eating in a specific restaurant.
Furthermore, workplace eating is frequently associated with poor quality and bad food
choices which have negative consequences. Tam et al. have stated various aspects for 
encouraging customers to eat healthy. Institutions have a responsibility to provide an
environment that makes it easier for students to make healthier food easier. Previous research
indicates that many institutions food environments are filled with energy-dense nutrient-poor 
food that may be heavily promoted. Moreover, it is the operators’ role to provide a variety of 
 products in their menus that will give its customers more options to choose from. The menu
is one of the key indicators of restaurants’ marketing plans. Accordingly, the following
research hypothesis is thus posited:

Food quality is a complex concept that is frequently measured using objective indices related
to the nutritional, microbiological, or physicochemical characteristics of the food or in terms
of the opinions of designated experts. However, when food quality is defined in terms of 
‘degree of excellence’ none of these measures serve as adequate indices of food quality. The
argument is presented that food quality is a consumer-based perceptual/evaluative construct
that is relative to person, place and time and that is subject to the same influences of context
and expectations as are other perceptual/evaluative phenomena. It is further argued that the
measurement construct that comes closest to being an adequate index of food quality is that
which has come to be called ‘consumer acceptability. (Armand V Cardello., 163-170, 1995)

Service Quality

  Services are not consistent, the level of administration execution shifts from client
to client, subject to desires and observations of individuals. Inseparability alludes to the
utilization of services occurring in the meantime as they are generated, frequently on the
 premises of the service association. Services vanish, as they can't be recovered since services
are performances, time can't be held over in the future to sell (Parasuraman et al. 1994).

Service quality is reflected in a shopper's evaluative recognition of an experience of service

received (Cronin & Taylor, 1994). They recommended that there are natural issues in the
utilization of the disconfirmation standard to measure administration quality. Explicitly, they
contended that, if administration quality is to be recognized "comparable to a state of mind,"
as proposed by Parasuraman, Zeithaml, and Berry (1985), its operationalization could be
 better spoken to by a state of mind based on conceptualization. Zeithaml and Bitner (2000)
recommended that buyers judge the nature of the service dependent upon their observations
of the specialized result furnished and by the procedure by which the conclusion is conveyed
and also by the nature of the physical surroundings where the service are provided.
Exceptional execution on these perspectives might bring about remarkably discerned service
quality for the organization.

(Wansink et al, Parasuraman, 1988) defines unwavering quality as the "capability to perform
the guaranteed administration certainly and exactly". Administration brilliance helps client

fulfillment which incorporates helpful, well-mannered and accommodating staff, mindful

staff, staff welcoming clients and staff being ready to serve (Kivela, 2000). Furthermore, a
few studies proposed that there is certain correspondence between client fulfillment and
unwaveringness with representative amicability, civility, snappy administration, menu
diversity, and service quality (Bateson,1982)

Restaurant Ambience

Restaurant ambience assumes a significant job in setting up an eatery picture, and

to pull in clients to eat. The reason for this examination is to inspect the connection between
restaurant ambience and consumer satisfaction in the Food Street Restaurants which are
 becoming extremely popular in the upcoming restaurant market. Such restaurants are selected
 because of their popularity among local and regional people, but the investigation is missing
about these renowned places. This examination tries to figure out which restaurant ambience
components exceptionally impact dinners' satisfaction. (Dr. Sadia Farooq1., December 2019).

Pettijohn, Pettijohn, and Luke (1997) discovered that quality, cleanliness and value to be
three most paramount properties in quick nourishment restaurants, while atmosphere and
menu diversity were generally insignificant. The lighting, sounds, shades and outline of 
materials can have an extraordinary effect on a food situation, and this may have been one of 
the key factors behind the varying encounters of the same dish consumed in healing centers,
at schools, in the Army and in restaurants (Meiselman et al. 1987; Edwards et al. 2003).
Sloan (2004) was of the impression that decoration and theme of the restaurant, its ambience
and environment and other amenities imprints a memorable effect on the diner. Dine-in
customers who are status conscious prefer chic restaurant as they are overall cared for 
(Peters, 2005).

Restaurant ambience is the nature of the encompassing space that apparent by clients (Jang &
Liu, 2008). As per Kotler (1973), it is the cognizant structuring of space to deliver explicit
 passionate impacts in purchasers that upgrade their buy likelihood. Atmosphere is comprised
of a lot of components, for example, lighting, music, fragrance, and shading. Ryu and Jang
(2007) found that feeling (for example music, temperature, and fragrance) and representative
appearance had the most significant impact on customers’ passionate reactions. The style,
mood, food and administration guidelines should all add to the dinners’ impression of the
eating experience (Wade, 2006; Jang & Ha, 2009) Wakefield and Blodgett (1994) call
attention to that, clients may not come back to a restaurant on the off chance that they are not

happy with the encompassing conditions. As indicated by Zeithaml and Bitner, (2003) the
encompassing conditions in an eatery incorporate the foundation qualities of the restaurant
condition, for example, inside design, outside appearance, room temperature, lighting, music,
commotion and scent.

Chapter III

METHODOLOGY

  This chapter presents the research methodology of the study. Like Omar, we
investigate which factors such as food quality, service quality and restaurant ambience affect
customer’s satisfaction. It includes discussion on the research design and research methods
covering the research environment, research respondent, research instrument, and data
gathering techniques.

Research Design

This study uses quantitative research because this type of research provides the accuracy of 
data. These methods will be used because this study wants to determine the factors affecting
customer satisfaction.

Research Setting

The researcher will conduct this study in the City of Pagadian. The capital City of the
 province of Zamboanga del Sur, Philippines. It is the regional center of Zamboanga Peninsula
and the second largest city of the region. According to the 2015 census, it has a population of 
199,060 people.

Research Respondents

The respondents/participants in this study will be selected randomly to determine the

unbiased selection of the participants.

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Research Instrument

In gathering of data, we will be prepared survey with questionnaire, the purpose of this is to
obtain responses from the respondents.

Data Gathering Techniques

By administering the survey questionnaire, we the researcher will seek approval to manager 
from the selected restaurants in Pagadian City.

Ethical Consideration

The study was able to secure permit from the selected restaurant establishment that the
researcher be allowed to conduct the research. After the manager allowed and approve the
consent letter, an immediate schedule for the conduct of survey questionnaire was set. In
administering the research questionnaire, the researcher explained to the respondents how to
answer each item and the purpose of the research.

Data Analysis

THE QUESTIONNAIRE

Direction: Kindly put check the number opposite each item that corresponds your

observation

Scale

5- Very satisfied
4- Satisfied
3- Neutral
2- Dissatisfaction
1- Very dissatisfaction

FOOD QUALITY VERY SATISFIED NEUTRAL DISSATISFA VERY

SATISFIE CTION DISSATISFA

D CTION

1. Sa3sfac3on of food

servings.
2. Crea3vity of food

servings.
3. Food prepara3on

3me.
4. The food was

reasonably priced.
5. The freshness of the

food.

6. Availability of the

sauces.
7. The quality of food.

8. The food is delicious.

9. The temperature of 

the food.
10. The size por3on of 

your food.
SERVICE QUALITY VERY SATISFIED NEUTRAL DISSATISFA VERY

SATISFIE CTION DISSATISFA

D CTION

1. Crews are

approachable.
2. Appearance of the

personnel.
3. Performance of the

promise service.
4. Willingness to help

customer.
5. Exact 3me of service

delivery.
6. Prompt service.

7. Courtesy of service

crews.
8. Convenient opera3ng

hours.
9. Clean and presentable

utensils.
10. Service crews’

abili3es.
RESTAURANT AMBIENCE VERY SATISFIED NEUTRAL DISSATISFA VERY

SATISFIE CTION DISSATISFA

D CTION

1. Appearance of  

physical facili3es.
2. Parking availability.

3. Sea3ng availability.

4. Convenient loca3on.

5. Comfort rooms.

6. Coolness of the dining

Hassle-free padala with Angkas

area.
7. Availability of the

utensils.
Secure and convenient option for sending packages with
8. Sink cleanliness.

Angkas9.Padala.
The cleanliness of the

opera3on area.

Angkas 10. Safety precau3ons

Open
in the area.