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Research Group 1
Research Group 1
A Research
Espino, Ivan G.
Maniago, Pauline S.
May 2024
SCHOOL OF HOSPITALITY MANAGEMENT
APPROVAL SHEET
PANEL OF EXAMINERS
Approved by the Committee of Oral Presentation Examiners in partial fulfillment of
the requirements for the Degree Bachelor of Science in Hospitality Management.
Chairman
Member Member
Approved and accepted in partial fulfillment of the requirements for the Degree
Bachelor of Science in Hospitality Management
ACKNOWLEDGMENT
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TABLE OF CONTENTS
Title Page
Approval Sheet
Acknowledgement
CHAPTER I: INTRODUCTION
Conceptual Framework.................................................................................................13
Research Design............................................................................................................15
Ethical Considerations...................................................................................................21
Summary of Findings.....................................................................................................47
Conclusions....................................................................................................................50
References......................................................................................................................53
Appendices.....................................................................................................................58
CHAPTER Ⅰ
INTRODUCTION
The Consumer perception is crucial feature that effect the customer decision-making
when buying products specifically in the casual restaurants. When customer consider
procuring a product, they have to consider the brand reputation, quality, and especially
the price. Related to the study of M. Sohaib, H. Tengyue, Q. Yu, et. Al. (2022)
However, the connection between price and value is not always simple. There
are customers that prefer the products with high price but with quality and value, on
the other hand, price increase may also be determined consumers as an indication of
Basariyam (2020), today’s consumers are too smart to buy their needs through
various means. But before buying their needs, they go through various online sites
consumer preferences are changing and adapt their offerings accordingly. According
Since the pandemic, the way we eat has changed and this has also affected what we
expect out of restaurants. Consumer’s expectations have shifted to include things like
to the study of Griffen (2020) and Nunes, Ordanini and Giambastiani (2021),
awareness about food waste, concerns about animal welfare, rising incomes,
urbanization, and others are driving changes in consumer behavior and their food
preferences.
world. Filipinos are always on the go, and they appreciate food and beverages that
offer both taste and convenience. If you can provide on-the-go options that are
delicious and easy to consume, you'll definitely win over busy Filipino consumers.
the last few years, as have any foods that make it easier to eat at home.
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One of the most important factors in businesses that need to be considered when
analyze a product's value through comparisons of its features and cost. However,
customer dissatisfaction may arise from hiking the price without an equal increase in
increase that decreases the customer’s purchase power. It has been caused by a
affects almost every type of product. For this article, we will focus on inflation in the
restaurant industry. As restaurant food costs get bigger – produce being more
expensive and clients having less power to buy food, you could say the restaurant
According to Hanson, Eva Maria (2023) The restaurant industry is facing dozens
of headwinds going into 2023, but the top of mind for restauranteurs are labor
consumers plan to or already have cut overall spending on products due to inflation,
and 75% of those report that their reason for cutting spending is higher food costs. In
the study of A. Fradella (2022) states, Food prices have risen due to multiple factors
that have put upward pressure on costs along the food supply chain.
surging inflation, with food prices continuing to rise. Experts say that supply chain
disruptions are one of the key factors driving up production costs, to combat the
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rising
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establishments in Arayat, Pampanga and identify what are the impacts of increasing
price value of product to the people of Arayat, Pampanga. This research aims to
regarding the potential consequences that may occur when they significantly increase
their product prices. It also aims to help consumers become aware of the
circumstances they might encounter when there is a sudden increase in the prices of
.
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Customer Perception
On the other written blog of Osheen Jain (2022) What is customer perception?
Explains finding the right price often requires a trade-off between margin and price
perception. Brands may want to defeat competitors’ prices on all their products, but
that can often lead to losses because sales directly link to price perception. Instead
of trying to stay competitive across the board on all products, brands must identify
key value categories (KVCs) and key-value items (KPIs) whose prices buyers tend
to remember and price those products competitively. In this scenario, they can make
up for lowered prices on key products by fixing higher prices on other products.
customer feels about a company. This includes their thoughts, emotions and
opinions related to a brand and its products or services. Customer perception can be
because consumers may be more likely to conduct business with companies, they
trust. Developing a positive relationship with customers can generate more leads
Hurting Quick Service Restaurant explains that the restaurant industry has evolved
and managed rapid changes over the past few years. To keep up to date today, there
are two words that QSR owners and operators need to know: Trading Down.
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Moreover,
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perception is everything. The way your customers perceive your company impacts
acquisition and retention — and it can even affect your ability to raise capital. In
other words, your success depends on creating a positive customer perception. Cindy
McGlynn (2023) Customer Perception states that businesses care about customer
perception because it directly impacts their bottom line. A negative turn in customer
opinion may not destroy your business, but it will almost certainly lead to lost
product types and purchase intentions when a subscription model is introduced for
Eojina Kim and Lian Tang (2020) The Role of Customer Behavior in Forming
were born and live in, the way of life chosen by each, food quality and safety,
Preferences. This paper has revealed that the consumer perception plays a crucial role
study was to determine the impact of online food delivery services like Swiggy,
On the study of Mala Mohandas Goplani and Akash Gupta (2021) A study on
perception of customers towards online food delivery services Online food ordering
easily by removing the barriers of time and space. Many restaurants and hotels have
changed their strategies from traditional to online marketing. Consumers are now
habitual to order food online rather than stepping out of their homes and visiting the
avoidance of social gathering and a lethargic lifestyle have forced the restaurant
industry to enter into the online world and run their business through mobile phones.
applications which make it easier to order, choose, compare and track the food online.
Dsouza Prima Frederick and Ganesh Bhat (2021) Customer Perception towards
Online Food Delivery Services, the study identified several determinants for customer
usage of online food delivery services such as perceived benefits, prior experience,
subjective norms and system quality which are proposed to influence the attitude and
K. Sankar Singh and Dr. Ashok Kumar Katta (2022) A study on consumer
perception towards food ordering app Zomato The study examines the factors
influencing the consumer perception and buying decision of food delivery app
Zomato and to study the level of consumer. Therefore, this study finds most
respondents utilize the Zomato app and are happy with the services offered by
Pricing
Harvinder Singh and Albaraa Al-Thami (2023) How does customer perception
impact pricing strategies ¬pricing is one of the most important decisions in retail
sales, as it affects not only the profitability, but also the image and reputation of the
competition, but also by how customers perceive the value and quality of the products
influences pricing strategies, and what factors can shape and change customer
Zhiyong Yang, Sijie Sun, Ashlok K. Kalwani et. Al. (2019) shows that price
increases is one tool in a marketer’s toolkit that can help drive revenues and
Customer Product Choice: The Effect of Product Quality on Relative price and Price
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fairness and their implication on Customer Product Choice The study's findings of
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make product selections predicated upon their subjective quality assessment, shaping
their perception of the product's price. Cagatay Akdogan (2021) A study on the Effect
quality on individuals' perceptions of relative prices and price justice, as well as the
study employs robust statistical analysis to get insights into customers' decision-
making processes when purchasing products and selecting brands, particularly about
On the paper of Aliomar Lino Mattos, Jose Carlos Oyadomari et. Al. (2021)
entitled Pricing Research: State of the art and Future Opportunities The findings show
that pricing is a complex and multifaceted topic involving far more than merely
establishing selling prices, and that pricing managers face substantial challenges. The
results also reveal that the cost-based pricing approach is superior to the perceived
In the written blog of Thomas Bennett (2022) What is customer price perception
and why is it important? states that when customers are making purchase decisions,
they are driven primarily by price perception. Based on logical and psychological
Additionally, price perception is one of the major factors affecting the consumer
buying and
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decision-making process.
Christina Pazzanese (2021) How consumer perceptions can affect the economy?
inflation is affected by a complex series of factors related to the supply and demand
for goods and services. One of those is the perception people hold about how
affordable things are today and how affordable they’ll be in the near future. With
Increasing Price
price and, instead, highlights an overall pessimism in the economy. Whether this is
high inflation – and the belief that prices will continue to rise – is impacting spending
According to Andres Chehtman and Tristan Hover (2023) How Consumers and
latest estimates, global inflation is expected to reach 8.9% in 2022 and 6.2% in 2023.
In this context, the food industry is being affected by rising costs of production,
On the study of Francis San Pablo Domingcil (2023) The Philippines: Food
Inflation Crisis Philippines: Food Inflation Crisis Over the past three years, the
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Philippines has had the largest food trade deficit in Southeast Asia. With the fuel
trade deficit added in the percentage of Gross Domestic Product is left with a
negative value. Due to a reliance on imports from India and other countries for staples
such as rice, the Philippines does not have the tools, like good protection, to
Inflation’s impact on restaurants is clear when you consider all the rising costs and
increasing costs in the restaurant industry are putting pressure on businesses to find
Price Inflation and Its Effect on Food Security, food price inflation is a result of
supply and demand. When demand for a commodity rises on constant supply, prices
usually rise. Conversely, when demand falls at constant supply, prices usually fall.
The same thing works with supply. Rising supply on constant demand causes a fall
Acknowledging the myriad factors that influence ingredient costs, including natural
disasters, crop
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seasons, and regulatory shifts, restaurant owners must adopt a proactive stance.
Setting menu prices slightly higher than the current cost of ingredients serves as a
During times of abundance and favorable market conditions, this approach can yield
substantial profits, providing a robust foundation for the business. Conversely, when
faced with spikes in ingredient prices, whether due to poor harvests or regulatory
changes, the higher menu prices serve as a protective barrier. By absorbing the impact
of fluctuating costs, the restaurant can remain resilient and profitable, even in
profitability and affordability, ensuring that the restaurant can navigate the
restaurant owners can steer their businesses through turbulent waters with confidence
and resilience.
Price-Quality
In the Blog of Thomas Bennett (2022) the actual quality of a product is a vital part
of the consumer's perception of a good or service. Quality can describe any attribute
of a feature set that makes or breaks a purchasing decision: ease of use, reliability,
product quality. The general rule is that the higher-priced products are perceived to
have better
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According to Turza (2022) price quality relationship refers to the price is exactly
matching the quality of the product or service. In the marketplace, the price is viewed
as the payment for the quality of a product. A marketplace offers a bundle of features
Value Consciousness
Shafrin Samran (2019) During markdown periods, ensure that you are not
undermining the efforts to shape and maintain price perception by offering extreme or
shopping experience for customers and further deteriorate trust in your brand. Your
promotional offers should maintain price perception during the holiday season or
which price mechanics and SKUs work best for your target customer segment. You
should also reduce over-communication on hero deals otherwise buyers will assume
Price Consciousness
difficult for customers to make any conclusions about the price unless they have an
internal reference price. But when they start exploring the market and see that your
particular product is more expensive than the alternatives your competitors offer, they
start perceiving all other items in your assortment as overpriced. Research suggests
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that
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the highest and the lowest prices on the market also matter – they serve as
psychological thresholds.
In the viewpoint of Shafrin Samran (2019) Customers aren't price conscious about
every product. Instead, they are only price conscious about certain products under the
best price guarantee or BGP. For instance, if buyers find BGP products more
expensive than competitors, the cheaper products assortment will still be perceived as
expensive.
Adeleke Akande Article (2020) Price Conscious Vs. Quality Conscious Consumer
seek lowest price for the product they buy. Their buying decision is based on how
much an item would cost and avoiding buying things that are expensive.
Price conscious consumers are value conscious too but price is the major
determinant of what they would buy. It is not because of their lack of knowledge or
understanding about quality but it is due to their level of income that they cannot
Theoretical Framework
Consumer Perception
perception theory. Consumer perception is often regarded as one of the most critical
relation to the products they purchase. This perception influences how they view the
on their prices, considering factors such as value, quality, affordability, and fairness.
Lastly, consumers assess the impact of a product on their loyalty to the restaurant and
Price
According to Caroline Banton (2023) The theory of price is an economic theory that
states that the price for a specific good or service is determined by the relationship between
its supply and demand at any given point. Prices should rise if demand exceeds supply and
and demand. hen there's a lot of something but not many people want it, prices
usually go down. But when lots of people want something and there isn't much of it
available, prices tend to go up. This balance between supply and demand not only
affects how much things cost but also how customers feel about the prices in casual
restaurants. It's important for restaurants to manage this balance well to stay
Conceptual Framework
The figure above illustrates the Input, Process and Output (IPO) Model of the
study, The input consists of the Demographic Profile of the respondents including Age,
Sex and Household income, Second, is the Consumer perception to the Casual Restaurant
The aim of this study is to determine the customer perception in increasing price value
1. How may the Demographic Profile of the respondents be described in terms of:
1.1. Age
1.2. Sex
2. How does the customer perception in increasing price value of product be described
in term of:
CHAPTER 2
This chapter presents the research design, sampling, participants, instruments of the
study, data collection procedures, data analysis techniques, ethical considerations, and
Research Design
or population being studied. Descriptive research design does not attempt to establish
data collected, which can be useful for generating hypotheses, exploring trends, and
identifying patterns in the data. The variables will be assessed and examined using a
The researchers used a Raosoft Sample Size calculator to identify a total sample size
Table 1
in Arayat Pampanga
Restaurant A 46 20%
Restaurant B 46 20%
Restaurant C 46 20%
Restaurant D 46 20%
Restaurant E 46 20%
Respondents
To guarantee that the study findings are objective and representative of the target
Arayat, Pampanga, researchers can minimize selection bias and obtain a sample that is
accumulating the data needed for the study “The Customers Perception in Increasing
first part of the survey questionnaires covers the demographic profile of the
respondents, age, sex and their household income. "The second part consists of the
variables: Price Quality, Value Consciousness, and Price Consciousness, along with
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the validated and modified questionnaire instrument adapted from Burton et al. (1998),
target respondents, they started printing out their survey questionnaires. But, before
distributing the questionnaires, the researchers made a permission letter and acquired
the proper consent of the Dean of School of Hospitality Management, the researcher’s
adviser and the owners of the 5 casual restaurants in Arayat Pampanga. When the
researchers got the approval, they proceed to distribute the survey questionnaires to
their respondents. The respondents will then receive the printed form of the
questionnaires that will be given personally by the researchers to answer all the
questions with enough time to gain more necessary, critical, and credible data and
received, were conducted in full confidence, maintaining the respondents' privacy and
rights.
occurrences for each data point or group, commonly employed to highlight the relative
focusing on the mean, which provides the arithmetic average of a set of numbers.
Likert Scale. Use for Interpretation of Data and results of the study.
4 3.40 - 4. Agree
Appropriate statistical tools, such as Weighted mean, Mean, and Frequency and
Percentage Distribution, were utilized to compute for the numerical data that were
Ethical Considerations
consideration must be given to the well-being of respondents, ensuring they are not
subjected to any harm. Upholding the dignity of research participants and obtaining
their full consent before the study commences are fundamental principles.
biased representation of findings. The primary concern of the researchers is the welfare
and anonymity, which are vital for maintaining the integrity of the study. Ensuring the
are fully committed to complying with Republic Act 10173, commonly known as the
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