Customer Satisfaction Towards Online Foo

CUSTOMER SATISFACTION TOWARDS ONLINE FOOD DELIVERY FROM
CLOUD KITCHEN IN KATHMANDU VALLEY
A Dissertation submitted to the Office of the Dean, Faculty of Management in partial

fulfilment of the requirements for the Master’s Degree
by:
Umesh Sapkota
Exam Roll no: 425/19
T.U. Registration no: 7-2-371-275-2014
Master of Hospitality Management (MHM)
Nepal Academy of Tourism and Hotel Management (NATHM)
July, 2022
CERTIFICATE OF AUTHORSHIP
I hereby corroborate that I have researched and submitted the final draft of dissertation
entitled “CUSTOMER SATISFACTION TOWARDS ONLINE FOOD DELIVERY
FROM CLOUD KITCHEN IN KATHMANDU VALLEY” the work of this dissertation
has not been submitted previously for the purpose of conferral of any degrees nor it has
been proposed and presented as part of requirements for any academic purposes.
The assistance and cooperation that I have received during this research work has been
acknowledged. In addition, I declare that all information sources and literature used are
cited in the reference section of the dissertation.
Umesh Sapkota
July, 2022
vi
ACKNOWLEDGEMENT
This study has been possible with the guidance of different individuals who supported in
different respects. This research has served contributory in gaining lifetime experience in
the related field of study for me and my career.
My sincere gratitude goes to my Thesis Research supervisor Prof. Dr. Mahendra Prasad
Shrestha, for his valuable guidance and persistent help during my survey and preparation
of overall thesis research.
I am equally grateful to Mr. Mana Raja Khatri, Program Coordinator- MHM, & Mr. Raja
Ram Mahat, Assistant Program Coordinator- MHM, Nepal Academy of Tourism and Hotel
management (NATHM). For academic direction and sharing the genuine concern.
Likewise, I would like to express my sincere gratitude to Mr. Rajesh Upreti (Executive
Director), Mr. Ram Kailash Bichha (Principal) and Mr. Ram K.A.C. (Secretary, MHM) for
every support. I am also thankful to Mr. Aashish Bartaula, Faculty Member at the NATHM
for providing me the additional guidelines while preparing the thesis.
I would also like to appreciate the help of management, staff of the Organization my and
key participants of the research who provided me with all the essential information’s
through full cooperation in spite of their busy time. Without this help, the study would have
remained incomplete.
Finally, I would like to thank my family members and friends for their continuous support
throughout the process of this work.
Umesh Sapkota
DEGREE CANDIDATE
vii
TABLE OF CONTENTS
CERTIFICATE AUTHORSHIP ........................................................................................... ii
RECOMMENDATIONS ......................................................................................................iii
LETTER OF APPROVAL ................................................................................................... iv
CERTIFICATE OF ACCEPTANCE .................................................................................... v
ACKNOWLEDGEMENTS .................................................................................................. vi
TABLE OF CONTENTS..................................................................................................... vii
LIST OF TABLE................................................................................................................... x
LIST OF FIGURES ............................................................................................................. xi
LIST OF ABBRIVIATIONS ................................................................................................ xii
ABSTRACTS...................................................................................................................... xiii
CHAPTER I ......................................................................................................................... 1
INTRODUCTION ............................................................................................................... 1
1.1 Background of the study ............................................................................................ 1
1.1.1 Online Food delivery and Cloud Kitchen ........................................................... 1
1.1.2 Business Model of Cloud Kitchens..................................................................... 2
1.1.3 Global Cloud Kitchen Market ............................................................................. 3
1.1.4 Nepalese online food delivery and cloud kitchen Market .................................. 4
1.2 Statement of Problem ................................................................................................. 4
1.3 Research Questions .................................................................................................... 5
1.5 Objectives of the Study .............................................................................................. 5
1.4 Hypothesis.................................................................................................................. 6
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1.6 Rationale of the Study ................................................................................................ 6
1.7 Limitations of the study ............................................................................................. 6
1.8 Organizational structure of the study ......................................................................... 7
CHAPTER II........................................................................................................................ 9
REVIEW OF LITERATURE .............................................................................................. 9
2.1 Introduction ................................................................................................................ 9
2.2 Conceptual Framework ............................................................................................ 13
CHAPTER III .................................................................................................................... 17
RESEARCH METHODOLOGY....................................................................................... 17
3.1 Research design ....................................................................................................... 17
3.2 Population and sample ............................................................................................. 17
3.3 Nature and sources of data and data collection ........................................................ 17
3.4 Method of analysis ................................................................................................... 18
CHAPTER IV .................................................................................................................... 19
RESULTS AND DISCUSSION ........................................................................................ 19
4.1 Results ...................................................................................................................... 19
4.1.1 Presentation of data ........................................................................................... 19
4.1.2 Respondent's Information ................................................................................. 19
4.1.2 Reliability and validity...................................................................................... 22
4.1.3 Descriptive Statistic (Mean and Standard Deviation) ....................................... 22
4.1.4 Correlation between dependent and independent variable ............................... 26
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4.1.5 Regression analysis ........................................................................................... 27
4.2 Hypothesis Testing................................................................................................... 29
4.3 Result Interpretation................................................................................................. 30
4.4 Discussion ................................................................................................................ 32
CHAPTER V ..................................................................................................................... 35
Summary and Conclusion .................................................................................................. 35
5.1 Summary .................................................................................................................. 35
5.2 Conclusion ............................................................................................................... 36
5.3 Implications.............................................................................................................. 37
References .......................................................................................................................... 39
APPENDICES ................................................................................................................... 46
x
LIST OF TABLES
Table 4.1 Frequency distribution of gender of the respondents 19
Table 4.2 Frequency distribution of age of the respondents 20
Table 4.3 Frequency distribution of income level of the respondents 20
Table 4.4 Frequency distribution of occupation of the respondents 21
Table 4.5 Frequency distribution of order frequency of the respondents 21
Table 4.6 Validity and Reliability 22
Table 4.7 Descriptive statistics among the dependent and independent variables 22
Table 4.8 Descriptive statistics of price 23
Table 4.9 Descriptive statistics of customer service 24
Table 4.10 Descriptive statistics of food quality 24
Table 4.11 Descriptive statistics of technology and innovation 25
Table 4.12 Descriptive statistics of delivery service 25
Table 4.13 Correlation between dependent and independent variable 26
Table 4.14 Model summary 27
Table 4.15 ANOVA 28
Table 4.16 Coefficient Table 28
Table 4.17 Hypothesis Testing 29
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LIST OF FIGURES
Figure 2.4 Conceptual Framework 16
xii
LIST OF ABBRIVIATION
OFD= Online Food Delivery

CAGR= Compound Annual Growth Rate
SD= Standard Deviation
xiii
ABSTRACT
The present research aims to explore the factors that influence customer satisfaction within
Kathmandu valley. In particular, the current study attempts to discuss through quantitative
research. The framework includes (price, customer service, food quality, technology and
innovation and delivery service) as independent variables whereas it includes (customer
satisfaction) as a dependent variable along with few demographic questions.
To execute the research, samples of 275 were included from different cloud kitchen delivery
services within Kathmandu valley through under convenience sampling. Descriptive, Co-
relational and Causal comparative research design was implemented to conduct the
research study. Similarly, Nature and sources of data were primary where (5 point Likert
scale) structured questionnaires were developed and distributed to different customers.
The purpose of this study is to determine what kind of dimensions affects client satisfaction
who order through online food delivery from ghost kitchen. The SPSS statistical package
software is used to analyze the questionnaire-derived data. According to the empirical
findings, five different aspects that affect that has impact and significant relationships with
customer satisfaction. According to the findings, customers regularly order from cloud
kitchens, and those who are not regular customers have placed orders weekly, twice in a
month, or once in month. This demonstrates the regularity of customers placing online
orders from Kathmandu Valley's Cloud Kitchen. They would not have placed orders as
frequently if they had been dissatisfied with the service provided by these kitchens. The
outcome suggests that orders are placed frequently and consistently, which results in
customer satisfaction of customers ordering from cloud kitchens in Kathmandu valley.
Keywords: Cloud Kitchen, Online food delivery, Customer Satisfaction, Price, Technology
and innovation
xiv
1
CHAPTER I
INTRODUCTION
1.1 Background of the study
The world today is hugely growing in technology and innovation with digital presence in
every aspect. According to a Statista survey, until January 2021, 59.5 percent of the world's
population used the Internet on a regular basis. Furthermore, 92.6 percent of those online,
or 4.32 billion individuals, used mobile devices (Statista, 2021). E-commerce is rapidly
growing worldwide, the food industry is also showing a steady growth (Alagoz &
Hekimoglu, 2012). The behavior of shopping online has been extensively explored in
previous research.
1.1.1 Online Food delivery and Cloud Kitchen
Online food has been a hyped up topic in the past few years. Because of the
convenience, precision, and capacity to integrate payments, online ordering has
begun to become the norm. At a large scale, pervasive on-demand and
subscription delivery of prepared food could mark the end of home cooking. Since
then, COVID-19 has had a massive effect on the food and beverage industry. As a
result, cloud kitchens became a popular trend in these conditions, and it received a
significant boost (Affility, 2021). The ease and usefulness of online food delivery
processes and innovativeness in information technology, trust in retailers and other
external influences causes fluctuation in the attitude of consumers towards ordering
online food.
Virtual kitchens, dark kitchens, commissary kitchens, ghost kitchens, and cyber
kitchens are some of the names given to cloud kitchens around the world (Oracle,
2020). These types of kitchens are considered to be the most recently innovated
forms offood delivery (Moyeenudin*, Anandan, Parvez & G, 2020). Similarly,
(Niemisto, 2020) in his research presents dark kitchens as one of the most
interesting developments in the food retail sector, since they are growing
increasingly popular around the world. It remains to be seen how this trend will
affect the food retail industry and what impact it will have on real estate. Based on
the use of space, real estate, and equipment, as well as branding, Oracle
categorized the cloud kitchen idea into three primary forms (shared space, dedicated
2
space, and virtual brand). However, Athar (2022), suggests the cloud kitchen
business model is now widely regarded as the most effective means of surviving
the epidemic while also keeping the company afloat. And there are six types of
business models of cloud kitchens.
1.1.2 Business Model of Cloud Kitchens
(a) Standalone/Single Brand Cloud Kitchens
Kitchens that accept orders online and operate under a single concept are known as
standalone and single-brand cloud kitchens. They usually specialize in one or a
couple of cuisines and have a modest menu of few dishes.
(b) Virtual Restaurants
Virtual restaurants are businesses that only exist online, either through third-party
food aggregators or their own websites with online ordering capabilities. They have
a distinct identity and use the capabilities and services of an established restaurant's
kitchen. They serve food that is distinct from that offered in the virtual brand's
restaurant. The two brands will no longer compete, and the revenue generated by
the virtual brand will be added to the total firm.
(c) Multi-brand Cloud Kitchens
A multi-brand cloud kitchen is a huge cooking space that can accommodate

numerous companies' operations. The same kitchen infrastructure, employees, and
resources can be used to handle many companies' operations.
(d) Shared Kitchen Spaces
Large co-working cooking spaces with individual culinary units for each brand are
known as shared cloud kitchen spaces. These units are well-equipped and come
with all of the latest conveniences that a standalone cloud kitchen needs.
Shared kitchen rooms usually include a communal storage area as well as cleaning
and dishwashing services, allowing the user to concentrate solely on food
preparation.
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(e) Aggregator Cloud Kitchens
Cloud kitchens run by aggregators are likewise enormous, communal kitchens. The
sole distinction between an aggregator cloud kitchen and a shared cloud kitchen is
that aggregator cloud kitchens are exclusively used by the aggregator's brands. They
are unable to take orders from their own websites or from any other online
marketplace.
(vi) Operator Managed Cloud Kitchens
Operator-managed cloud kitchens are similar to communal cooking spaces, except

the operator assumes full responsibility for the cloud kitchen's operations. These are
based on the virtual franchising concept.
1.1.3 Global Cloud Kitchen Market
As the global online food delivery sector has risen at an unprecedented rate in recent
years, the global internet meal delivery business is set to reach 182.3 billion US
dollars by 2024, up from around 136.4 billion US dollars currently. With 40 percent
of U.S adults having ordered their food online once, the online food market seems
to be growing at a fast pace (Dixon, Kimes & Verma, 2009). However, in a 2019
market study of restaurant delivery services, the global market for online-ordered
prepared food delivery was estimated at $94 billion and is estimated to grow at just
over 9 percent a year, reaching $134.5 billion in 2023 (Statista, 2019). The majority
of people prefer to order food online, and according to a survey, the food delivery
industry generated $82 billion in global revenue in 2020 and is predicted to more
than triple by next year. However, restaurants that do not provide online food
delivery risk falling behind their competitors as market demand and the social
environment grow (McCarthy, 2020).
According to a marketresearch.com (2020), the European cloud kitchen market was

valued at $497,500.0 million in 2020, and it is expected to grow by 16 percent by
2030. Two of the most popular cloud kitchen models are expected to grow at a
significant rate in the future years, with a combined Compound Annual Growth
Rate (CAGR) of 22.3 percent, according to current predictions. Between 2019 and
2026, the cloud kitchen market is expected to grow in three different continents,
4
with North America, Asia Pacific, and Europe seeing the most growth. They also
expect the cloud kitchen market in these regions to grow at a similar rate by 2026.
Food delivery business has been booming in the Asian countries and is hugely
contributing to the GDP of Asian nations. Due to the COVID-19 pandemic, the
online meal delivery sector in Asia has exploded in recent years, with growth
accelerating by as much as ten years.
1.1.4 Nepalese online food delivery and cloud kitchen Market
In the context of Nepal, the online food delivery system is still in its infancy. With
urbanization only limited to some cities of Nepal including the capital Kathmandu
internet facilities have not reached every part of the nation. There were 10.78
million internet users in Nepal in January 2021 which shows that there are very
few people with access to the internet. Online delivery is pretty much about ordering
through the internet therefore there are businesses in limited cities providing the
service as of current scenario. With the vision of digitalization, Nepal has seen a
rapid growth in the number of mobile and internet subscribers in the last few years.
Online food delivery hasbeen operating in quite a number in Kathmandu, Lalitpur
and Bhaktapur (Kathmandu valley) and few other cities outside the Kathmandu
valley. Few of the online food delivery have been prevailing in the capital such as
Foodmandu and Bhoj Dealsfollowing aggregator model, whereas Khaanpin and
Meals on Wheels have cloud kitchen model. While Khaanpin and Foodmandu are
operating in the city of Pokhara, Bhoj Deals and others are covering the other big
cities of the country as well. The trend is still to be caught and the growth ahead
seems huge with good potential in the sector.
1.2 Statement of Problem
In recent years, the concept of cloud kitchen delivery has become quite popular. After
COVID-19, the majority of brick and mortar restaurants had to close due to the lockdown,
which presented an opportunity and served as an eye-opener for entrepreneurs to start a
virtual kitchen without the need for dine-in facilities. Nepalese entrepreneurs were also
motivated by this radical concept of food delivery business after realizing the possibilities
of ghost kitchens in the global market. However, the valley already had a few well-
established cloud kitchens. The beginning of the pandemic gave the food delivery industry
5
a boost, and as more opportunities arose, investors began to pour money into the cloud
kitchen-based online food delivery company. Therefore, building an online audience makes
it simpler for customers to order the food, pastries, and groceries that hotels and restaurants
offer.
The customers, however, are not very accustomed to the services offered by the cloud
kitchen; familiarity is limited and there is little understanding of or use of technology in
these ordering platforms. There are 14 cloud kitchens in the Kathmandu valley that operate
these online food delivery services. Since there are no regulations regarding the registration
and operation of this type of business in the country, the majority of the companies known
for cloud kitchen delivery service are registered as either restaurants or sole traders (private
limited) in the company registrar.
In the initial survey with 50 clients of the cloud kitchens in Kathmandu Valley it was
revealed that the clients are not happy and satisfied with the service provided by the online
food delivery from cloud kitchens as the prices were higher, delivery charges were
applicable and the delivery service timings. The problem seemed that customers were not
so content with the cloud kitchens service and their facilitation. Similar to how these cloud
kitchens service does not have sizable number of customers, this demonstrates that these
businesses are not clinically growing in popularity and profitability because of the
customers. Therefore, it is important to find out if the clients are happy with the cloud
kitchen delivery service and what can be the main reasons for that satisfaction.
1.3 Research Questions
 How regularly do customers practice purchase of food online from cloud kitchens?
 What are the key factors that affect satisfaction of customers while ordering online
from cloud kitchens in Kathmandu valley?
1.5 Objectives of the Study
 To identify the factors affecting the customer’s satisfaction towards online food
delivery from cloud kitchens.
 To assess the regularity of online ordering practices from the cloud kitchen.
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1.4 Hypothesis
H1: There is a significant impact of price in the customer’s satisfaction towards online food
delivery from cloud kitchens.
H2: There is a significant impact of customer service in the customer’s satisfaction towards
online food delivery from cloud kitchens.
H3: There is a significant impact of food quality in the customer’s satisfaction towards
H4: There is a significant impact of technology and innovation in the customer’s

satisfaction towards online food delivery from cloud kitchens.
H5: There is a significant impact of delivery service in the customer’s satisfaction towards
1.6 Rationale of the Study
This study contributes to the existing body of knowledge through the identification of
factors that affect the consumer satisfaction towards cloud kitchen concept of online food
delivery. With the new concepts entering the market with different ideas of online food
delivery platforms, restaurant delivery is a key to understanding the customer satisfactions
from the online food delivery systems and the factors critical to succeed in the Nepalese
market. By learning about client wants and aspirations, this study will add to the existing
literature on delivery enterprises by aiming to analyze customer preferences and uncover
success criteria for cloud kitchens. Similarly, the findings of the study could help online
meal delivery companies and cloud kitchens establish an opinion on what factors are most
significant in producing consumer contentment while using online food delivery services.
1.7 Limitations of the study
Data for this study was collected from OFD consumers from cloud kitchen in Kathmandu
valley, limiting the findings' generalizability. This drawback can be addressed by
conducting the research in different areas of the region. Sample size is limited to 275, a
broader sample size may yield better results. The responses should take into account the
prejudices of the respondents. Despite making a substantial contribution to our
understanding of the factors that influence consumer satisfaction with OFD services, other
7
constructs such as packaging, delivery time, and payment method, including

sociodemographic factors which potentially affect satisfaction toward OFD from cloud
kitchen service could be incorporated. Future research in this area could also take into
account the impact of the global pandemic in order to better understand the aspects that
influence customer satisfaction.
1.8 Organizational structure of the study
The whole research is divided into five different chapters, Introduction, Literature Review,
Research Methodology, Result and Discussion, and Summary and Conclusion.
Chapter I: Introduction
Chapter I contain the brief outline of the topic of the study. This chapter includes
background of the study, statement of problems, research questions, objective of study,
hypothesis development rationale of the study, and limitation of the study.
Chapter II: literature review and conceptual Framework
The second chapter include the literature review (Book, Articles, and Journals) that
provides the overall information about the topic of the researcher. This chapter consists of
sub topic like satisfaction, online food delivery, independent variables (price, customer
service, food quality, technology and innovation and delivery service) and conceptual
framework in regards to their relationship with the dependent variable i.e. customer
satisfaction.
Chapter III: Research Design and Methodology
Various methodological paradigms related to the study are provided in chapter three. It
describes about how the entire data have been collected and design to carry out the overall
task of the thesis report work. This chapter is followed by research design, population and
sampling, method of data analysis, data collection method. This chapters also focus on the
statistical tools and research techniques adopted for data analysis and interpretation of the
collected data.
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Chapter IV: Result and Discussion
Fourth chapter includes the diagnosis of data and its analysis and presentation. Statistical
tools and techniques are used for the purpose of analyzing the reliability and results of the
data and information. The data are analyzed through SPSS. This chapter consist frequency
distribution, descriptive statistic, correlation and regression which helps research to analyze
the data.
Chapter V: Summary and Conclusion
Finally, on the basis of personal observation and study, closing remarks and various
implication of the study have been produce in fifth chapter of the research. This chapter
involve summary, conclusion and implication of the research topic.
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CHAPTER II
REVIEW OF LITERATURE
2.1 Introduction
Customer satisfaction
Oliver (1999), defines satisfaction as “the consumer senses that consumption fulfills one
need, desire, goal, and so forth and that this fulfillment is pleasurable'' pg. 34. Customer
satisfaction with a company's goods and services is regarded as the most crucial factor
contributing to its competitiveness and success (Hennig-Thurau & Klee, 1997).
Consumer satisfaction may affect the company through repeat business, the purchase of
additional products, good word-of-mouth, and the willingness of the client to pay more for
the specific brand. If a business can't satisfy customers as effectively and efficiently as its
rivals are, it risks losing market share, clients, and investors (Anderson, Fornell, &
Mazvancheryl, 2004). According to Deng et al. (2009), a service provider's capacity to
foster high levels of satisfaction is critical for product differentiation and building solid
relationships with clients. Customer satisfaction is therefore key in today's corporate world.
Kotler (2000), defined satisfaction as a sensation of pleasure or disappointment brought on
by a comparison between the performance of a product (or outcome) as perceived and that
which was anticipated. Many businesses are unfamiliar with the concept of consumer
satisfaction; instead, they have prioritized product availability and price.
Therefore, it is crucial to understand the precise meaning of each term. After using a
product or service that a company provides in exchange for the customer's expectations of
the items, the customer's attitude toward that product or service is known as customer
satisfaction. Customer happiness encourages product repurchases, which in turn fosters
brand loyalty. However, Customer satisfaction is a relative word that depends on the
experience the customer has when purchasing for and/or utilizing the good or service
(Tjiptono & Chandra, 2011). As a result, there are several variables that can be used to
evaluate the concept of satisfaction, including firm performance and expectations. (Ryu &
Han (2009), Suhartanto et al. (2018), suggest that customer satisfaction is affected by the
product and service purchased. Satisfaction is the subjective evaluation of performance of
the product that is associated with the customer’s expectation. A consumer is satisfied when
10
his/her perception of the product’s performance is higher than his/ her expectation (Liu et
al. 2017).
Online food delivery and cloud kitchen
Cloud kitchen is one of the new concepts of online food delivery where the food is prepared
in a limited space of the kitchen without any eating space in the place. The order is taken
online and is delivered to the designated area of a consumer. The cloud kitchen can either
be operated from home kitchen or from the commercial kitchen. Moreover, Location for
the kitchen should be prime as they have to deliver the food to different locations for that
connectivity and convenience for the service and customers (Vidyapeeth & Sathe, 2020).
However, unlike traditional restaurants, which provide seats for guests, these
establishments focus solely on the delivery or takeaway market, and are located in low-rent
areas to keep costs low (Sanwaria et al., 2021).
The popularity of social media allowed for the development of cloud kitchens as well as
the populating of the same to expand the consumer base (Sarangdhar et al., 2021).
Choudhary (2019), suggests that due to the rise of the demand for food delivery service,
cloud kitchens have become a preferred option than a restaurant business. They can provide
high-quality food at a reasonable price with prompt delivery. The cloud kitchen has
changed the landscapes and dynamics of the food industry. The concept of cloud kitchens
has acquired general acceptability in the current marketplace, and it is gaining traction.
Furthermore, to keep on top of the latest food delivery trends, many businesses are resorting
to cloud kitchens. (Vidyapeeth & Sathe, 2020, p. 108). Cloud kitchens can modify their
services to the needs and preferences of its customers. Because cloud kitchens are not
restricted to a certain market area, they can adapt their food menu to meet the needs of their
clients rather than the market's location. As a result, cloud kitchens are extremely adaptable
when it comes to adjusting their business plan in response to client demands (Ashwani,
2016).
The cloud kitchen concept has come to light as smart food delivery in the present day
scenario across the globe which has contributed to the CAGR the most when it comes to
the hospitality sector. In the present context, these ghost kitchens are expanding rapidly and
the business idea is getting popularity and acceptance. Moreover, many restaurants are
following the trend and are setting up virtual kitchens (Vidyapeeth & Sathe, 2020).
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Extensive research has been conducted on brick and mortar establishments to better
understand customer satisfaction across a variety of parameters. Customer satisfaction in
the fast food industry has been investigated by authors such as (Nicholls et al. 1998).
Similarly, Vasic et al. (2018) investigated customer satisfaction with internet purchasing in
the Serbian city of Belgrade. Various studies on online meal delivery, customer loyalty,
factors affecting online food delivery and client behavioral intentions toward online food
delivery have been undertaken in South Asia, including India, Bangladesh, and Pakistan
and there are few studies that look at satisfaction in terms of price, customer service,
technology, and food quality, although past studies have looked at behavioral aspects and
intentions toward online meal delivery (Saad; Ali, et al., 2020)
Customer satisfaction has a significant role for OFD in the customer experience. Customer
ratings, payment methods, food availability, and human interactions are few factors to
customer satisfaction (Kwong & Shiun Yi, 2017). (Anderson & Srinivasan 2003; Pee et
al. 2018) suggest customers tend to repurchase the food in the future, endorse the OFD
service to the potential customers and put positive notes about the OFD service by
spreading word of mouth. This also shows in the OFD industry customer satisfaction
mediates the relation between service quality, food quality and online quality. Similarly,
Prasetyo, Tanto, Mariyanto (2021), suggested that Extended Theory of Planned Behavior
(TPB) shows surroundings are one of the factors that affect the usage of online food
delivery and what the customer shall consider while ordering their food. Hedonic
motivation had significant influence in consumers’ willingness to pay and price was
second, promotion and while perceived ease of use had insignificant effect on consumer
buying behavior. Hedonic motivation, promotion and Intention to use can lead to the steady
development of the service industry including the food industry whereas promotion and
hedonic motivation disrupts the boundary and limit of innovations. Perceived innovation
in every option of online food delivery tested i.e. boost up to company profitability, people
like to experience demanding enjoyment, if ensured complete safety it can influence buying
behavior.
The research conducted from (Ha & Jong 2010; Nicolaides 2008) shows that the customer
satisfaction is remarkably influenced by the tangible aspects such as price of the menu,
food quality and service quality. On top of that, the effect of the food quality on online
loyalty also affects user satisfaction. Besides that, user convenience, societal pressure,
12
customer experience, delivery experience, search of restaurants, quality control and ease of
use are also determining factors of customer satisfaction (Ray et. al, 2019). Furthermore,
according to Saad (2020) consumers are concerned about two factors while ordering from
online delivery platforms: direct factors and indirect factors. Direct factors consist of
delivery time, service quality, price of the menu, and condition of the food delivered
whereas people consider menu variety, number of restaurants, delivery tracking service,
and attitude of the delivery person as the indirect factors. Qin (2004), also found three
factors: food quality, perceived value and service quality had a direct and positive
relationship with satisfaction of customers.
Furthermore, according to Sulek & Hensley (2004), buyers evaluate appeal, safety, and
dietary components to determine the quality of food. Along with service quality, food
quality is recognized as a critical factor that determines a customer's impression of a
restaurant (Ha & Jang, 2010; Liu et al., 2017; Namkung & Jang, 2007). Islam & Ullah,
(2010) investigated the preferences of fast food consumers in Dhaka, and found that brand
reputation was the most important factor, followed by accessibility and proximity to
receive, taste similarity with previous experiences, quality and cost of food, taste, and
discount, hygiene and cleanliness, salesmanship and decoration, fat and cholesterol level,
and self-service. They came to the conclusion that customers perceive value in these
services based on parameters such as review value, navigation systems, and food quality,
and that these aspects influence their purchase intentions. Lack of time to prepare food,
variety, and affordability are all factors that contribute to the popularity of online food
ordering among millennials. There is room for improvement in terms of consumer
happiness by better understanding their expectations and providing more appealing options
when buying food online.
Despite the fact that the OFD service industry is now thriving and looking bright for the
future (Kedah, Ismail, Haque, & Ahmed, 2015; Yeo et al., 2017), the literature appears to
be reticent on what motivates customers to use OFD services. There is a dearth of
understanding of customer satisfaction with online meal delivery from the cloud kitchen
concept of delivery, and there has been no study done in the Kathmandu valley. As a result,
this study expands numerous essential components that explain customer satisfaction with
cloud kitchens' online cuisine. The goal of this article is to identify elements that influence
13
consumer satisfaction with online food delivery, with price, food quality, customer service,
delivery service and technology as the primary considerations (Ding et. al., 2011).
2.2 Conceptual Framework
The following section discusses the variables and their relationships.
Price
Price as a performance measure to satisfaction outweigh other quality elements (Sunnaryo

et al., 2019). Because of its heterogeneity and tangibility, pricing is the next most important
factor. Ghosh (2020), suggests customer satisfaction with online food delivery has been
proven to be influenced by the price of fast food. Furthermore, (Qin 2010; Jim 201; Namin
2017; Vasic 2018) considered price a factor to see how satisfied people are with their
purchases on fast food. However, according to Daud & Yaon (2019), price is not a
consideration in online meal delivery decision-making.
In contrast, price, product quality, and service quality all influence consumer happiness
and, as a result, customer choice (Morganti 2014; Arduleeb & conway 2006; Parsuraman
1994). Customers are more likely to rationalize and make decisions based on the maximum
benefit they can obtain for the lowest price possible which makes want to get the most value
for money (Saad, 2020)
Customer service
Kedah (2015) investigated customer service as a construct in evaluating satisfaction levels

with fast food purchases made through online food delivery and customer care is the second
most essential component in determining customer happiness and is a crucial aspect of
service excellence. It discusses the significance of being attentive. According to (Reibstein,
2002), perceived customer service support has a strong link to the possibility of making a
repeat purchase and gaining a loyal customer. Websites with poor customer service were
the least likely to be visited again, indicating a high level of customer dissatisfaction
(Posselt & Gestner, 2005). Suleyman (2010) revealed that the quality of customer service
has a significant impact on online consumer satisfaction.
14
Food Quality
Suhartanto (2019) agrees that food quality has an ongoing effect on consumer loyalty. In
the context of restaurants. (Kedah, 2015; Yeo, 2017) implies that food quality and e-service
quality have a significant impact on customer happiness and also has a positive impact on
satisfaction. Furthermore, Ghosh (2020), adds another key aspect determining consumer
happiness to be quality of the food. (Han and Jong, 2010; Sulek & Hensley, 2004)
considered food's overall performance as a significant aspect of the customer experience,
and Han & Jong (2010) used food attributes such as taste, nutrition, and diversity to
measure the impact on customer satisfaction and retention. With fast food establishments,
food quality is seen to be correlated to customer satisfaction (Kivela 1999; Law 2004).
Similarly, the higher the nutritional value of the food, the higher the perceived value of the
customer, and customers have become classier in recent years, requiring personalization
based on dietary requirements and personal preferences. (Frederick & Bhatt, 2022)
Technology and Innovation
Technology and innovation is the key to development of online food delivery services.
Reach of the internet and communication medium to different classes of people and
knowledge of mobile applications and websites has built an ease to order food online.
Chavan (2015), reveals the restaurants are able to manage and deliver orders immediately
due to the smart devices based interfaces which helps the customers to view orders and
navigate their orders. The capabilities of WIFI and smartphones is improving the delivery
business. This analysis suggests that in the coming future, it is expected to improve the
overall performance of restaurants as the system is convenient, effective and easy to use.
According to Khan (2020), The use of technology has a disruptive impact on services,
considering the current growth of demand for food delivery survival depends on how
capable one is with the disruptions of technology, low profitability and charges from third
party delivery can be a part of discussion in the future. According to Lee et al. (2019),
habit has the greatest impact on intentional continual intention to use, followed by
performance expectations and societal impact. Furthermore, data supports the importance
of information quality, performance expectations, customer patterns, and social impact as
variables in motivating customers to utilize food delivery apps on a regular basis.
Customers' expectations continue to follow current trends, hence it is suggested that the
15
organization develop and continue to build the customers' expectations (Van & Berner,
2003). According to Vinaik et al., (2019), Food apps have started to develop as a pattern,
since they are adaptable with many restaurants and comprehend the relationship between
businesses and consumers. Consumers can purchase food from restaurants' menus on the
ordering platform and have it delivered to their selected location in a timely manner (Lan
et al., 2016). In recently introduced food delivery applications, merging orders from
different restaurants rates high among other elements in the order of preferences.
Delivery service
When it comes to determining consumer happiness, the quality of the delivery service has
always been seen as a crucial aspect. Kedah (2015) shows that delivery is a determinant of
consumer satisfaction, and that it is essential because of the variety of information on the
web. To increase customer satisfaction and develop reputation, businesses should focus on
proper delivery features. Service providers must emphasize on delivery and quality of
service in order to attain maximum satisfaction. According to Dholakia & Zhao (2010),
timely delivery is critical in satisfying and maintaining consumers. Regardless of road or
weather conditions, delays in delivery beyond standard practice will have a negative impact
on customer satisfaction
Furthermore, order fulfillment variables, notably delivery timing, have a significant impact
on total customer experience and rating (Dholakia & Zhao 2010). When it comes to
pleasing and attracting consumers, delivery speed is crucial. Kedah (2015) It is vital to be
aware of the routes so that delivery may be made on time (CHANG, CHEUNG & LAI,
2005). Because of the quickness, convenience, and precision with which orders are
delivered, customers prefer OFD service (Chandrasekhar, Gupta & Nanda, 2019).
According to Ghosh (2020), delivery has a strong beneficial impact on customer
satisfaction.
Few of the constructs and corresponding items have been adapted from previous studies in
this domain. The constructs include Food Quality (Qin, et al. 2010; Haghighi, et al.,2012)),
Customer Service (Kedah et al., 2015), Delivery (Kedah et al., 2015), Price (Qin, et al.
2010; Jin, et al. 2012), and (Namin,2017; Vasic et al., 2018) and corresponding statements
have been mapped in the ensuing section.
16
Independent Variable Dependent Variable
Price
Customer Service
Food Quality Customer Satisfaction
Delivery Service
Source: Qin, et al. (2010), Haghighi, et al., (2012), Kedah et al., (2015), Jin, et al. (2012),
Namin, (2017), Vasic et al., (2018)
Figure 2.4 : Conceptual framework

17
CHAPTER III
RESEARCH METHODOLOGY
Introduction
3.1 Research design
The study conducted surveys of online food ordering consumers from the cloud kitchen to
develop the consumer profile of the cloud kitchen system and to identify the factors that
help in understanding customer satisfaction from the process of online ordering through
cloud kitchen business in Kathmandu Valley. Causal comparative research design deemed
suitable for the research to show the cause and effect relationship between the dependent
and independent variable and quantitative method of research was used as it emphasizes
objective measurements and the statistical mathematical or numerical data analysis.
3.2 Population and sample
The study was conducted taking in account the total number of cloud kitchens in
Kathmandu valley. As per the observation and experience there were probably 14 cloud
kitchens in Kathmandu valley. Observing the nature of core business and total number of
customers served in a month there were similarities in 5 cloud kitchens having similar data
on monthly customers. From the population of 14 cloud kitchens 5 were taken as sample
measuring and observing their monthly average customers served.
Non-probabilistic purposive sampling methods were employed. Furthermore, 275 samples

were taken in reference from some scholarly papers i.e. (Yeo et al.2017; Elvandari et al.,
2018; Prabhash, 2020). These samples are provided to the customers of each cloud kitchen
in equal numbers and data are collected from the customers themselves.
3.3 Nature and sources of data and data collection
Primary research was undertaken with the assistance of a structured questionnaire as a

research tool. The questionnaires included closed-ended questions and ratings on 5-point
Likert scale ranging from extremely dissatisfied to strongly satisfied. The data was
collected across diverse age groups and occupational profiles. The participation was
voluntary. The participants were informed that participation in this research would be
completely anonymous and that the results would be used for academic purposes. Nonusers
18
of online food delivery from cloud kitchen were excluded from the study at the initial
screening process.
3.4 Method of analysis
The consumer survey results were analyzed using MS–Excel and SPSS to do various
analyses during the study. The statistical software tool SPSS 16 was employed
for performing all analyses in this study. Validity and reliability of the data was conducted
through Cronbach's Alpha. Descriptive analysis includes statistical procedures that are used
to describe the population. Descriptive analysis shows the entire population in terms of
percentage. It reveals the number of belongings in a Descriptive analysis includes statistical
procedures that we use to describe the population. Descriptive analysis shows the entire
population in terms of percentage. It reveals the number of belongings in a category of
demographics.
Correlation analysis is a statistical evaluation used to study the strength of a relationship

between two, numerically measured, continuous variables. In this analysis correlation
shows the possible connections between variables. Regression is a statistical measure that
attempts to determine the strength of the relationship between one dependent variable and
a series of other changing variables (Known as independent variable) in the data analysis.
19
CHAPTER IV
RESULTS AND DISCUSSION
4.1 Results
This chapter includes the findings from the analysis done on collected data. The research
objectives are taken into consideration while analyzing the data and the primary goal of
this chapter is to analyze, interpret and present the results from questionnaire surveys.
4.1.1 Presentation of data
From the total of 275 respondents, data analysis was carried out. Demographic
profile analysis was conducted on the beginning of the questionnaire followed with
the descriptive analysis, correlation analysis and regression analysis.
4.1.2 Respondent's Information
Table 4.1
Frequency distribution of gender of the respondents
Frequency Percent Valid

Gender Percent
Male 171 62.18 62.18
Female 91 33.09 33.09
prefer not to say 13 4.73 4.73
Total 275 100 100
The above table (4.1) shows the respondents gender. Most of the customers are male
(n=171, 62.18%) followed by female customers (n=91, 33.09%). Whereas the
option of prefer not to say was chosen by (n=13, 4.73%) of the respondents.
20
Table 4.2
Frequency distribution of age of the respondents
Age Frequency Percent

Below 20 16 5.82
21-30 143 52.00
31-40 83 30.18
41-50 33 12.00
13 275 100.00
Out of 275 respondents, the young population had the lead on online ordering.
Highest online ordering age groups being the age group of 21 years to 30 years
(n=143, 52%). The customers from age 31 to 40 years were (n=83, 30.18%).
Similarly, 33 respondents were above 40 (12%) and 16(5.82) were below 20 years
of age.
Table 4.3
Frequency distribution of income level of the respondents

Income Level Percent
Below 15000 51 18.55 18.55
15000-30000 72 26.18 26.18
30000-45000 74 26.91 26.91
46000 and above 78 28.36 28.36
Total 275 100 100
As far as the income level of customers were concerned, table 3 showed that
78(28%) respondents had a high income level of 46000 and above followed by the
customers' income level of 30000-45000(n=74,26.91%). However, the respondents
having an income level of 15000-30000 who ordered online were slightly lower
(n=72, 26.18%) followed by the demography of the customers below 15000(n=51,
18.55%).
21
Table 4.4
Frequency distribution of occupation of the respondents

Occupation Percent
Student 50 18.18 18.18
self Employed 71 25.82 25.82
Government Service 37 13.45 13.45
Private Service 94 34.18 34.18
Others 23 8.36 8.36
Total 275 100 100
The above table 4.4 shows respondent’s occupation. Most of the respondents
worked in the private service (34.18%). 25.82% of respondents were self-employed,
whereas 18.18% of the customers were students and 13.45% of responses came
from the government service holders. Similarly, 8.36% of the respondents worked
in the other sector.
Table 4.5
Frequency distribution of order frequency of the respondents
Order Frequency Frequency Percent Valid Percent

Once 66 24.00 24.00
Twice 54 19.64 19.64
Weekly 65 23.64 23.64
Often 90 32.73 32.73
Total 275 100 100
The respondents were customers of the online food delivery ordering once or more
from the cloud kitchens. So, the table shows that 32.73% of the respondents often
ordered from these businesses, whereas 23.64% customers ordered on a weekly
basis. However, 66 people (24%) had ordered online once followed by the 19.64%
of respondents ordering twice from the cloud kitchens.
22
4.1.2 Reliability and validity
Table 4.6
Validity and Reliability

Items Cronbach Alpha N
Customer Satisfaction 0.812 5
Price 0.836 5
Customer Service 0.837 5
Food Quality 0.811 4
Technology and Innovation 0.88 6
Delivery Service 0.834 4
The above table shows the reliability of dependent and independent variables since
all the items and variables had been deemed reliable. The Cronbach’s alpha of
independent variable technology and innovation is (α=0.88) is the highest followed
by Customer service (α=0. 837), price is (α=0.836) and delivery service is (α=0.69),
whereas reliability of dependent variable is (α=0.812) and food quality
is(α=0.811). These values represent a high consistency and reliability among
statements in each variable.
4.1.3 Descriptive Statistic (Mean and Standard Deviation)
Table 4.7
Descriptive statistic among the dependent and independent variables
Are you satisfied with the

following attributes from
cloud kitchen while ordering
online food N Min Max Mean SD
Price 275 1 5 2.51 1.56
Customer Service 275 1 5 2.36 1.57
Food Quality 275 1 5 2.80 1.58
Technology and Innovation 275 1 5 2.87 1.57
Delivery Service 275 1 5 2.77 1.59
23
According to the Likert scale 3 is a mean point. Among the independent variables
shown on Table (4.7), Delivery service (Mean= 2.77, SD= 1.59) has the highest
standard deviation followed by food quality (Mean= 2.87, SD= 1.58) but Customer
service (Mean= 2.36, SD= 1.57) has the lowest mean. Similarly, the dependent
variable customer satisfaction has the lowest mean (Mean = 2.51 and SD=1.56).
As for the dimensions of the independent variables,
Table 4.8
Descriptive statistics of price
Are you satisfied with the following

attributes for the price you paid while
ordering from cloud kitchens? N Min Max Mean SD
Value 275 1 5 2.71 1.57

Quantity 275 1 5 2.62 1.54
Service 275 1 5 2.80 1.58
Discounts 275 1 5 2.53 1.51
Offers 275 1 5 2.64 1.52
As per table 4.8 Are you satisfied with the following attributes for the price you
paid while ordering from cloud kitchens? From the given dimensions, service
(Mean= 2.80, SD= 1.58) has the highest mean and standard deviation followed by
Value (Mean= 2.71, SD= 1.57) and offers (Mean= 2.64, SD= 1.52) provided.
Whereas Discount (Mean= 2.53, SD= 1.52) s has the lowest mean and Standard
deviation.
24
Table 4.9
Descriptive statistics of Customer Service
Are you satisfied with the way of services

provided by customer service
representatives of cloud kitchens to handle
the following situations? N Min Max Mean SD
Responsiveness 275 1 5 2.97 1.61
Grievance Handling 275 1 5 2.73 1.57
Follow-up Call Handling 275 1 5 2.75 1.61
Feedbacks 275 1 5 2.79 1.52
Refund Process 275 1 5 2.52 1.53
The table 4.9 shows the customer service dimensions where, Responsiveness and
Follow up call handling (Mean= 2.97, SD= 1.61) service (Mean= 2.75, SD=
1.61) have same and highest standard deviation followed by grievance
handling (Mean= 2.73, SD= 1.57) and refund process (Mean= 2.52, SD= 1.53).
However, feedbacks (Mean= 2.79, SD= 1.52) has the lowest Standard deviation.
Table 4.10
Descriptive statistics of food quality
Are you satisfied with basic constituents of N

food quality provided by the cloud
kitchens? Min Max Mean SD
Taste 275 1 5 2.91 1.55
Freshness 275 1 5 2.67 1.55
Healthy 275 1 5 2.47 1.56
Safety 275 1 5 2.68 1.57
There are four dimensions in the independent variable food quality as shown in
table 4.10. Safety (Mean= 2.68, SD= 1.57) has the highest Standard deviation and
taste has (Mean= 2.91, SD= 1.55) as the highest mean. Similarly, Taste and
freshness (Mean= 2.67, SD= 1.55) have the lowest standard deviation and
Healthy (Mean= 2.47, SD= 1.56) has the lowest mean.
25
Table 4.11
Descriptive statistics of technology and
innovation
Are you satisfied with the following

features of technology and innovations
carried out by cloud kitchens to connect
with their customers? N Min Max Mean SD
Mobile app ordering 275 1 5 3.04 1.55
Website ordering 275 1 5 2.94 1.55
Social media ordering 275 1 5 3.00 1.56
Digital payment methods 275 1 5 3.13 1.60
Digital payment process 275 1 5 3.12 1.60
Internet speed 275 1 5 2.67 1.55
The dimensions of technology and innovation has been shown in table 4.11. Digital
payment processes and methods (SD= 1.60) have the same standard deviation
which is the highest however digital payment methods (Mean= 3.13) lead on
mean. Whereas, Internet speed (Mean= 2.67, SD= 1.55) has the lowest mean and
standard deviation.
Table 4.12
Descriptive statistics of delivery service
Are you satisfied with the delivery

facilities provided by cloud kitchens
while delivering orders at your doorstep? N Min Max Mean SD
Delivery time 275 1 5 2.52 1.52
Delivery personnel's attitude 275 1 5 2.79 1.60
Delivery charges 275 1 5 2.57 1.55
Tracking delivery location 275 1 5 2.66 1.58
The above table 4.12 shows the dimensions of Delivery service where, delivery
personnel’s attitude (Mean= 2.73, SD= 1.57) has the highest mean and standard
26
deviation and delivery time (Mean= 2.52, SD= 1.52) has the lowest mean and
standard deviation.
4.1.4 Correlation between dependent and independent variable
In order to conduct the correlation between independent variables (price, customer

service, food quality, technology and innovation and delivery service) and
dependent variable (customer satisfaction) towards the cloud kitchen in Kathmandu
valley, Pearson correlation was conducted and the results of this correlation are
presented in table 4.13
Table 4.13
Correlation between dependent and independent variable

Correlations
CS P CSR FQ TI DS
CS 1
P .694** 1
CSR .522** .617** 1
FQ .621** .693** .625** 1
TI .581** .616** .528** .626** 1
DS .565** .573** .521** .633** .655** 1
**. Correlation is significant at the 0.01 level (2-tailed).
Note:
CS = Customer satisfaction
P = Price
CSR = Customer service
FQ = Food Quality
TI = Technology and Innovation
DS = Delivery service
27
Since the significant level was more than (0.01), the findings of the correlation
coefficient using Pearson correlation showed a significant correlation between
price and customer satisfaction (r=0.694), but not between customer service and
customer satisfaction (r=0.569). Food quality and customer satisfaction also
have a favorable link (r=0.621). In general, there is a strong association between
price, food quality and customer satisfaction, as seen in table 4.13. The findings
show a low but favorable relationship between Technology and innovation and
delivery service and customer satisfaction among the customers of cloud
kitchen in Kathmandu valley. A conclusion can be drawn from the above table
4.13 that there is a positive relation between dependent variables too.
4.1.5 Regression analysis
Table 4.14
Model Summary
Model Summary
Model R R Square Adjusted R Std. Error of the
Square Estimate
1 0.74 0.55 0.54 0.81
a. Predictors: (Constant), Delivery Service, Customer Service, price, TI, Food

Quality
The preceding table (4.1.4) reveals that the correlation coefficients (r) of the
analysis (r=0.74) suggest that independent factors and customer satisfaction have a
positive relationship. In the model summary table, the value of this R square
(R2=0.55) and this value show that 55% of customers' satisfaction increased as a
result of the various influencing factors of satisfaction. And the total amount of
change in dependent variable due to the effect of independent variable is shown
with the aid of R square.
28
Table 4.15
ANOVA
Sum of df Mean Square F Sig.

Squares
211.10 5 42.22 65.08 0.00

Regression
174.52 269 0.65
Residual
385.63 274
Total
a. Predictors: (Constant), Delivery Service, Customer Service, price, TI, Food Quality
b. Dependent Variable: Customer satisfaction
Regression analysis' statistical results are displayed in ANOVA table (4.15) When
the value or significance is less than 0.05 and is sufficient to forecast the result or
dependent variable, which is customer satisfaction, it is evident that the whole
model under consideration is significant. Therefore, the overall model understudy
is significant since the value of significance in the table, which is 0.00 and less than
0.05.
Table 4.16
Coefficient Table
B Std. Beta Tolerance VIF
Error
(Constant) 0.53 0.14 3.77 0.00
Price 0.41 0.06 0.41 6.60 0.00 0.43 2.35
Customer
0.04 0.06 0.04 0.69 0.49 0.53 1.89
Service
Food Quality 0.14 0.06 0.15 2.23 0.03 0.39 2.56
TI 0.12 0.06 0.13 2.13 0.03 0.46 2.17
Delivery
Service 0.12 0.06 0.13 2.19 0.03 0.48 2.09
The (4.16) coefficient table shows the significant value. The P value for price is
0.00, indicating that the price has a very positive impact on customer satisfaction.
Food quality, technology and innovation, and delivery service all have significance
levels of 0.03 or higher, demonstrating their importance in increasing customer
satisfaction when placing online orders from cloud kitchens. The significance level
29
less than 0.05 indicates that it significantly improves customer satisfaction.

However, customer service has a significance value of 0.49, which is larger than
the threshold of 0.05, indicating that it has no noticeable influenceon customers'
satisfaction. The variance inflation factors (VIFs) were used to test for
multicollinearity amongst the independent variables, and for price, food quality,
technology and innovation, delivery service, and customer service, respectively,
they were found to be 2.35, 2.56, 2.17, 2.09, and 1.89. The value depicts how
consumer satisfaction is impacted by price, food quality, delivery service,
technology advancements, and customer service. The price value is positive (0.41).
Food quality has a positive value (0.14). Similarly, scores for delivery service and
technology was similarly favorable (0.12). Customer service, however, had a
positive but modest value (0.04).
4.2 Hypothesis Testing
Table 4.17
Hypothesis Testing
SN Hypothesis Results
H1 There is a significant impact of price in the customer’s Accepted

H2 There is a significant impact of customer service in the Rejected

customer’s satisfaction towards online food delivery from cloud
kitchens.
H3 There is a significant impact of food quality in the customer’s Accepted

H4 There is a significant impact of technology and innovation in the Accepted

customer’s satisfaction towards online food delivery from cloud
kitchens.
H5 There is a significant impact of delivery service in the customer’s Accepted

30
The above table 4.17 shows that there is a positive and significant relationship between
influencing independent factors i.e. price, food quality, technology and innovation and
delivery service and customer satisfaction but there is no significance of customer service
in satisfaction of customers.
4.3 Result Interpretation
Prior to performing a data analysis, a demographic analysis of the respondents was carried
out to ascertain their characteristics. According to the findings, men made up the majority
of respondents (62.18%), while those between the ages of 21 and 30 made up the majority
of respondents (52%) before those between the ages of 31 and 40. (30.18%). Additionally,
the majority of respondents (56.2%) were private service workers and employers, and
25.82% of them were self-employed and had monthly incomes of at least NRs. 46000.
(28%). However, the proportion of respondents with an income between $15,000 and
$30,000 who placed an online order was somewhat lower (n=72, 26.18%), followed by the
demographic of customers with an income under $15,000 (n=51, 18.55%). The data were
further processed to examine and ascertain the association between factors once the
analysis of the respondent profiles was finished. The respondents were online food delivery
customers who had made one or more orders from cloud kitchens. While 32.73% of
respondents said they frequently made purchases from these businesses 23.64% of clients
placed weekly orders. However, 66 people (24%) had placed an online order once, and
19.64% of respondents ordered twice in a month from the cloud kitchens.
A reliability analysis was initially carried out to see whether the data had met the reliability
requirements of the model before the data were assessed to see if the independent variables
described in this research did have an impact toward customer satisfaction. Moreover, both
the value of Cronbach's alpha and the composite reliability of each variable should exceed
0.7 in order for the model to be deemed as reliable. The reliability of the dependent variable
i.e. customer satisfaction is (α=0.812) whereas the Cronbach's alpha of the independent
variable food quality, technology and innovation, customer service, pricing, and delivery
services are (α=0.811) (α=0.88) (α=0. 837) (α=0.836) (α=0.69) respectively. These
numbers indicate that each variable's statements are highly reliable and consistent.
31
The service dimension among the provided pricing dimensions has the highest mean and
standard deviation (Mean= 2.80, SD= 1.58), followed by value (Mean= 2.71, SD= 1.57),
and offers (Mean= 2.64, SD= 1.52). Discount has the lowest mean and standard deviation
(Mean=2.53, SD=1.52). Following grievance handling (Mean= 2.73, SD= 1.57) and refund
procedure (Mean= 2.52, SD= 1.53), customer service responsiveness and follow-up call
handling (Mean= 2.97, SD= 1.61) have the same and highest standard deviation. The lowest
standard deviation is found in feedbacks (Mean=, SD=1.52). The independent variable food
quality has four dimensions, with safety having the greatest mean and taste having the
highest mean and standard deviation (Mean= 2.91, SD= 1.55) In technology and
innovation, although digital payment methods (Mean= 3.13) are leading on mean, digital
payment processes and methods (SD= 1.60) have the highest standard deviation. However,
Internet speed has the lowest mean and standard deviation (2.67, 1.55 respectively).
Delivery service delivery personnel's attitude has the highest mean and standard deviation
(Mean= 2.73, SD= 1.57) and delivery time has the lowest mean and standard deviation
(Mean= 2.52, SD= 1.52).
The results of the correlation coefficient using Pearson correlation showed a significant
correlation between price and customer satisfaction (r=0.694), but not between customer
service and customer satisfaction (r=0.569), as the significant level was more than (0.01).
A positive correlation exists between food quality and consumer happiness (r=0.621).
Price, food quality, and customer satisfaction all generally have a positive correlation. The
results indicate a weak but positive correlation between customer satisfaction and
technology, innovation, and delivery service among cloud kitchen customers in Kathmandu
Valley. It is possible to interpret that dependent variables also have a positive relationship
with one another.
The value of this R square (R2=0.55) and this value in the model summary analysis
demonstrate that the different elements that influence customer satisfaction increased
contentment by 55%. An R square is used to display the overall amount of change in the
dependent variable as a result of the influence of the independent variable.
ANOVA displays the statistical findings from regression analysis. It is obvious that the
entire model under examination is significant when the value or significance is less than
0.05 and is sufficient to anticipate the outcome or dependent variable, which is customer
satisfaction. Because the value of significance in the table, which is 0.00 and less than 0.05,
32
is less than 0.05, the overall model understudy is significant. The price has a significantly
positive impact on consumer satisfaction, as shown by the P value of 0.00 for pricing.
Significant levels of 0.03 or higher are found for food quality, technology and innovation,
and delivery service, all of which are crucial for raising consumer satisfaction when placing
online orders from cloud kitchens. It greatly raises customer satisfaction, according to the
significance threshold of 0.01 to 0.05. Customer service, however, has a significance value
of 0.49, greater than the 0.05 threshold, indicating that it has no noticeable impact on
customers' happiness. The variance inflation factors (VIFs) were utilized to test for
multicollinearity among the independent variables, and they were found to be 2.35, 2.56,
2.17, 2.09, and 1.89 for price, food quality, technology and innovation, delivery service,
and customer service, respectively. The value illustrates how factors such as price, food
quality, delivery service, technological improvements, and customer service affect
consumer satisfaction. The value of the price is positive (0.41), and the value of the food
quality is positive (0.14). Likewise, delivery service and technology received good ratings
(0.12). However, the value of the customer service was positive but modest (0.04).
Price has the greatest impact on customer satisfaction among the five factors, followed by
food quality, technology and innovation, and delivery service. This suggests that when
buying food online from cloud kitchens in the Kathmandu valley, price has a substantial
influence on determining consumer satisfaction. The study developed five hypotheses
where four hypothesis had a significant impact on the customer satisfaction on online food
delivery whereas one did not create much effect on consumer happiness while getting
service from the cloud kitchens.
4.4 Discussion
The aim of this study was to investigate the connections between and effects of some of the
aspects that determine consumer satisfaction with online meal delivery services in the
Kathmandu valley. Both of the study's objectives were confirmed by its findings.
Customers of cloud kitchens who had ordered food online and received it one or more times
were the responders. 23.64 percent of customers conducted weekly orders, compared to
32.73 percent of respondents who indicated they frequently made purchases from these
companies. However, 66 persons (24%) had already placed an online order, and 19.64% of
respondents had done so twice in a month. Additionally, this study made an effort to
investigate the key elements that greatly influence consumer happiness. The study's
33
findings suggested a relationship between these variables and customers' happiness and
satisfaction with cloud kitchen delivery services. The results of this study concur with some
past findings yet don't accord with others.
Price
The results confirm that there is a significant association between price fairness and
customer satisfaction and that price has a significant impact on customer satisfaction
(H.Muzammil, H. Sehrish, and A. Riaz 2010). Price and value for the items purchased
should receive special consideration in the context of online platforms for the food industry
in order to raise customer satisfaction levels (Ghosh, 2020). With the expansion of
numerous payment alternatives, offers, and discounts, clients may well be satisfied. (61)
Additionally, the discounts received are regarded as acceptable. The findings, however,
differ from Monroe and Lee (1999) theory, which contends that judgments about food
prices can be made rationally without taking prior transactions into account.
Customer Service
Customers' happiness is not influenced by elements related to customer service, according

to the findings, which indicate that there is no meaningful link between these two
variables. This finding conflicts with (Muzammil, Sehrish, and Riaz 2010), who
characterizes customer service as a factor that makes clients feel important and foster a
favorable perception of a company, ultimately resulting in client happiness. Ghosh, (2020)
makes a comparison. present online businesses should make an effort to respond quickly
when dealing with tech-savvy customers by offering a dependable system for handling
grievances and prompt feedback
Food Quality
This aspect is also among the most significant ones identified by the study as having an
impact on customer satisfaction. According to the research by Qin and Prybutok (2009)
food quality has a beneficial impact on contentment in support of the study, Suhartanto et
al. (2018) and Haghighi et al. (2012) imply that food quality has one of the highest positive
effects on customer satisfaction in an offline media environment, followed by Etemad-
Sajadi & Rizzuto,2013; Alhelalat, 2017).
34
Customers' happiness with the online delivery services they order from Cloud Kitchen is
significantly influenced by technology and innovation. According to a study by Frederick
& Bhatt (2022), customers' encounters with a company's website, features, and product
quality have a significant impact on the ordering process. In a similar vein, Kedah et al.
(2015) indicate that a website's and a company's level of customer service are vital in
fostering the kind of satisfaction and confidence that can result in repeat business.
Delivery service
Delivery was examined as a factor in determining customer satisfaction by (Kedah et al.,

2015) and is significant since it affects how reliable online information is. The study
supports (Kedah et al., 2015) that companies can satisfy their customers if they concentrate
on providing good delivery services that take into account delivery time, delivery tracking,
and reasonable delivery fees. In order to ensure that they establish trust and raise customer
satisfaction through the Services provided, Ghosh, (2020) also advises businesses to
concentrate on appropriate Delivery qualities, such as the ones examined here. Customer
satisfaction and retention depend heavily on delivery time (Kedah et al., 2015) and the use
of time-saving tools and customers' time-consciousness is positively correlated with online
ordering (Chang, Cheung& Lai, 2005). In contrast, delivery timing has a significant impact
on the relationship between online shop qualities and satisfaction. According to Dholakia
and Zhao (2010), regardless of the road and weather circumstances, a delivery delay longer
than what is customary (such as an hour) will have a negative impact on customer
satisfaction.
35
CHAPTER V
SUMMARY AND CONCLUSION
5.1 Summary
The number of people using online media, visiting websites, and using the internet has
increased significantly since the advent of the digital era. This has led to the quick
emergence of new businesses, one of which is online food delivery via cloud kitchen.
Convenience, accuracy of delivery, integrated payment options, and the ease of ordering
online all became normal. The food and beverage business was greatly impacted by the
Covid-19 pandemic. Many business owners shifted to various delivery business strategies,
cloud kitchens being one of them while still experiencing a rapid boost. The consumer base
was easily influenced by its simplicity and usefulness.
However, one of the most intriguing advancements in the food and beverage industry is
cloud kitchens. The feeling of having one's desires satisfied after receiving the value of
what they expect from something is known as satisfaction. For a customer to be satisfied,
the gap between the experience they received and what they anticipated must be either very
small or nonexistent. Customers who order food online from cloud kitchens are satisfied in
a number of fulfilling ways. Once a consumer is happy, there is a chance that they may
return, stay with the company, spread the word about it, and assist in the business
themselves. Because it is now so simple and convenient for customers to express their
satisfaction or dissatisfaction with a company through reviews and feedback, these become
a crucial component of success when it comes to online meal delivery. Therefore, a variety
of factors influence how satisfied clients are. Without the need for dining areas and real-
estate for cloud kitchens, hotels and new businesses can operate well under this concept.
While digitalization and ICTs are still in their infancy in Nepal, these business models give
the digital economy a strong boost. Before the pandemic, there weren't many cloud
kitchens, but after Covid-19, the number rapidly expanded.
This study's objective is to determine the variables influencing customer satisfaction with
online food delivery from cloud kitchens. and to evaluate the regularity of cloud kitchen's
online ordering procedures. Conducted with the customers of 5 cloud kitchens in
Kathmandu Valley among the 14 cloud kitchens descriptive analysis was supplemented
with a causal comparative research design. Data from the 275 samples were collected using
36
a quantitative method and a closed-ended questionnaire. The framework includes customer

satisfaction as a dependent variable along with a few demographic questions, while it also
includes (price, food quality, customer service, technology and innovation and delivery
service) as independent variables.
SPSS was used to perform regression, correlation, and reliability tests. The outcome
demonstrates accurate data with a male majority in data collection. The majority of
respondents fell within the age range of 21 to 30, had incomes of at least 46,000, and
worked in the private sector. The respondents have experience with online food delivery
services and frequently placed orders from cloud kitchens. The outcome demonstrated that
most of the factors considered had a big impact on customer satisfaction. The most
important factor is price, which is followed by food quality, technological advancements,
and delivery service. Since responsiveness, feedback, follow-ups, and complaints were
considered to be aspects of customer service, there was no noticeable impact of customer
service on the degree to which customers were satisfied when placing an order from Ghost
Kitchens.
5.2 Conclusion
The experience of having a meal online differs greatly from eating food at a brick and
mortar restaurant since factors like the physical environment are discarded. Responses were
gathered from 275 respondents in the Kathmandu valley who represented a variety of
geographic areas, age categories, and job characteristics. The objective of this study was
to identify and dig into the variables influencing how satisfied Kathmandu Valley online
food delivery consumers are and how often they order from cloud kitchens. Causal
comparative research design with descriptive analysis was deployed in order to conduct the
research. The framework comprises (pricing, meal quality, customer service, technology
and innovation, and delivery service) as independent variables, along with a few
demographic questions and customer satisfaction as a dependent variable. Regression,
correlation, and reliability tests were carried out using SPSS. The results show that accurate
data was collected, with a male majority. The majority of respondents worked in the private
sector, were between the ages of 21 and 30, and had earnings of at least $46,000. The
respondents routinely ordered from cloud kitchens and have used online food delivery
services. The results showed that the majority of the variables taken into account had a
significant impact on consumer satisfaction.
37
People often seek for and assess value and amount for the “price'' they spend when ordering
meals online because it is so accessible and simple to do so. However, customers also prefer
placing orders through digital platforms and using “technologies”. Similar to this,
customers find satisfaction in aspects of “food quality” like freshness, safety, and health.
Additionally, people are more satisfied as a result of delivery time and delivery staff
attitudes when they are more comfortable with the behavior of delivery riders. But
“customer service” doesn't seem to affect much on customer purchase regularity and its
dimensions of feedback, responsiveness doesn't impact regular purchase and satisfaction
level of customers.
Many individuals began ordering food delivery online after the COVID 19 pandemic
ravaged the globe, and many found the online service to be convenient and comfortable.
People therefore become habituated to the delivery and their service. Customers in the
Kathmandu valley appear to order frequently from cloud kitchens. According to the
findings, customers regularly order from cloud kitchens, and those who are not regular
customers have placed orders weekly, twice in a month, or once in month. This
demonstrates the regularity of customers placing online orders from Kathmandu Valley's
Cloud Kitchen. They would not have placed orders as frequently if they had been
dissatisfied with the service provided by these kitchens. The outcome suggests that orders
are placed frequently and consistently, which results in customer satisfaction of customers
ordering from cloud kitchens in Kathmandu valley.
5.3 Implications
According to the above findings, consumer satisfaction was positively impacted by pricing,
food quality technology, and delivery service, but not significantly by customer service.
The findings showed that people's pleasure with online food delivery from cloud kitchens
was unaffected by the quality of customer service (such as responsiveness, complaint
management, follow-up calls, and feedback). Consumers (or potential customers) and
enterprises were connected by a "bridge" in this instance, which served as an intermediary.
The cloud kitchen business can use these findings to increase the number to satisfy
customers using online food delivery in the future, but several aspects need to be
considered. Interestingly, findings proved that price was the most important aspect. Cloud
kitchens can play with the price factor (quantity and value for the food) with food quality,
their taste, freshness and safety in order to make customers satisfied and happy. This shall
38
lead to the customer’s loyalty and retention. In addition, marketers also need to instill a
mindset that food delivery system and modality is a part of the user’s lifestyle as regular
ordering and familiarity to technology can lead people to order online and business to gain
customer retention. This can cause the online users to order more and promote the cloud
kitchens through word of mouth once they are habituated and satisfied with the customers.
Being a booming business in the market this research can also help the entrepreneurs to
learn what might influence the purchasing behavior of the customers and how they can be
satisfied through online ordering from cloud kitchen services.
39
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46
APPENDICES
Questionnaire
Dear Respondents,
Namaste, this survey is designed for conducting a research on "Customer satisfaction

towards online food delivery from Cloud Kitchens in Kathmandu Valley". It would be
helpful if you have your view on the questionnaire below. This survey is conducted for the
academic purpose only. Therefore, is treated confidentially. Thank you.
Background information of respondents

Gender ☐Male ☐Female ☐Prefer not to say
Age ☐below 20 ☐20-30 ☐30-40 ☐40-50 ☐51 and above

Income level
☐Below 15000 ☐15000-30000
☐30000-45000 ☐46000 and above
Occupation
☐Student ☐Self Employed
☐Government Service ☐Private Service

☐Others
Order Frequency per month
☐Once ☐Twice
☐Weekly ☐Very often

47
Based on the services provided by online food deliveries from cloud kitchens in Kathmandu
valley, rate each of the following attributes based on how satisfied you were, as per the 5-
likert scale provided. Please select one answer to each of them.
1-Strongly disagree 2-Moderately Disagree 3-Neutral 4- Moderately Agree 5-
Strongly Agree
Q.N Questions 1 2 3 4 5
1. Are you satisfied with the following attributes
from cloud kitchen while ordering online food?
a. Price
b. Customer service
c. Food Quality
d. Technology and Innovation
e. Delivery service
2. Are you satisfied with the following attributes
for the price you paid while ordering from
cloud kitchens?
a. Value
b. Qantity
c. Service
d. Discounts
e. Offers
3. Are you satisfied with the way of services
provided by customer service representatives of
cloud kitchens to handle the following
situations?
a. Responsiveness
b. Grievance Handling
c. Followup Calls Handling
d. Feedbacks
e. Refund Process
4. Are you satisfied with basic constituents of food
quality provided by the cloud kitchens?
48
a. Taste
b. Freshness
c. Healthy
d. Safety
5. Are you satisfied with the following features of
technology and innovations carried out by
cloud kitchens to connect with their customers?
a. Mobile app ordering
b. Website ordering
c. Social Media ordering
d. Digital Payment process
e. Digital Payment Methods
f. Internet Speed
6. Are you satisfied with the delivery facilities
provided by cloud kitchens while delivering
orders at your doorstep?
a. Delivery Time
b. Delivery personnel’s Attitude
c. Delivery Charges
d. Tracking Delivery location
7. Have you received any type of after sales service from the cloud kitchens you have
ordered from?
☐ Yes ☐ No

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CUSTOMER SATISFACTION TOWARDS ONLINE FOOD DELIVERY FROM

CLOUD KITCHEN IN KATHMANDU VALLEY

A Dissertation submitted to the Office of the Dean, Faculty of Management in partial

CERTIFICATE AUTHORSHIP ........................................................................................... ii

LETTER OF APPROVAL ................................................................................................... iv

CERTIFICATE OF ACCEPTANCE .................................................................................... v

TABLE OF CONTENTS..................................................................................................... vii

LIST OF FIGURES ............................................................................................................. xi

LIST OF ABBRIVIATIONS ................................................................................................ xii

1.1 Background of the study ............................................................................................ 1

1.1.1 Online Food delivery and Cloud Kitchen ........................................................... 1

1.1.2 Business Model of Cloud Kitchens..................................................................... 2

1.1.3 Global Cloud Kitchen Market ............................................................................. 3

1.2 Statement of Problem ................................................................................................. 4

1.3 Research Questions .................................................................................................... 5

1.5 Objectives of the Study .............................................................................................. 5

1.7 Limitations of the study ............................................................................................. 6

1.8 Organizational structure of the study ......................................................................... 7

REVIEW OF LITERATURE .............................................................................................. 9

2.1 Introduction ................................................................................................................ 9

2.2 Conceptual Framework ............................................................................................ 13

CHAPTER III .................................................................................................................... 17

3.1 Research design ....................................................................................................... 17

3.2 Population and sample ............................................................................................. 17

3.3 Nature and sources of data and data collection ........................................................ 17

3.4 Method of analysis ................................................................................................... 18

RESULTS AND DISCUSSION ........................................................................................ 19

4.1 Results ...................................................................................................................... 19

4.1.1 Presentation of data ........................................................................................... 19

4.1.2 Respondent's Information ................................................................................. 19

4.1.2 Reliability and validity...................................................................................... 22

4.1.3 Descriptive Statistic (Mean and Standard Deviation) ....................................... 22

4.1.4 Correlation between dependent and independent variable ............................... 26

4.2 Hypothesis Testing................................................................................................... 29

4.3 Result Interpretation................................................................................................. 30

4.4 Discussion ................................................................................................................ 32

Summary and Conclusion .................................................................................................. 35

5.1 Summary .................................................................................................................. 35

5.2 Conclusion ............................................................................................................... 36

Table 4.1 Frequency distribution of gender of the respondents 19

Table 4.2 Frequency distribution of age of the respondents 20

Table 4.3 Frequency distribution of income level of the respondents 20

Table 4.4 Frequency distribution of occupation of the respondents 21

Table 4.5 Frequency distribution of order frequency of the respondents 21

Table 4.6 Validity and Reliability 22

Table 4.8 Descriptive statistics of price 23

Table 4.9 Descriptive statistics of customer service 24

Table 4.10 Descriptive statistics of food quality 24

Table 4.11 Descriptive statistics of technology and innovation 25

Table 4.12 Descriptive statistics of delivery service 25

Table 4.13 Correlation between dependent and independent variable 26

Table 4.14 Model summary 27

Table 4.15 ANOVA 28

Table 4.16 Coefficient Table 28

Table 4.17 Hypothesis Testing 29

Figure 2.4 Conceptual Framework 16

OFD= Online Food Delivery

1.1 Background of the study

1.1.1 Online Food delivery and Cloud Kitchen

1.1.2 Business Model of Cloud Kitchens

(a) Standalone/Single Brand Cloud Kitchens

(b) Virtual Restaurants

(c) Multi-brand Cloud Kitchens

CSR .522 .617 1

FQ .621 .693 .625** 1

TI .581 .616 .528 .626 1

DS .565 .573 .521 .633 .655** 1