Thesis PDF
Thesis PDF
RESTAURANT
Bachelor’s thesis
Valkeakoski
International Business
Spring 2017
Daria Tcvetkova
ABSTRACT
International Business
Valkeakoski
ABSTRACT
1 INTRODUCTION ........................................................................................................... 1
1.1 Company Background ......................................................................................... 1
1.2 Research Objectives ............................................................................................ 3
1.3 Research Question .............................................................................................. 3
1.4 The Framework of the Research ......................................................................... 3
1.5 Research Methods .............................................................................................. 3
1.5.1 Quantitative Research ............................................................................. 4
1.5.2 Qualitative Research................................................................................ 4
1.5.3 Data Collection ........................................................................................ 4
1.5.4 Target Group of the Research and Size of the Sample............................ 4
2 THEORY ........................................................................................................................ 5
2.1 Customer Satisfaction ......................................................................................... 5
2.1.1 Introduction ............................................................................................. 5
2.1.2 Definition of Customer Satisfaction ........................................................ 5
2.1.3 Factors Determining Customer Satisfaction............................................ 5
2.1.4 Kano Model of Customer Satisfaction ..................................................... 7
2.1.5 Advantages of Kano model ...................................................................... 8
2.2 Service Quality..................................................................................................... 8
2.2.1 Introduction ............................................................................................. 8
2.2.2 Definition of Service Quality .................................................................... 8
2.2.3 Dimensions of Service Quality. SERVQUAL model .................................. 9
2.2.4 The Eight-Point Framework for Delivering the Service ........................... 9
2.2.5 Quality Control ...................................................................................... 13
2.3 Importance of Customer Satisfaction and Service Quality Measurement ....... 13
2.3.1 Introduction ........................................................................................... 13
2.3.2 The Importance of Measuring Customer Satisfaction and Service Quality
14
2.3.3 The Benefits of Measuring Customer Satisfaction and Service Quality 16
2.3.4 Tools for Measuring Customer Satisfaction and Service Quality .......... 17
REFERENCES.................................................................................................................... 35
Appendices
Appendix 1 Customer Satisfaction and Service Quality Survey at Fafa`s Restaurant
Appendix 2 Open Answers to the Open-Ended Questions of the Customer Satisfaction
and Service Quality Survey at Fafa’s Restaurant
1
1 INTRODUCTION
As life is getting more hectic, the fast-food concept restaurants are gaining
more and more popularity among full-service restaurants due to its time-
efficiency and cost saving. Fast food used to be associated with something
unhealthy and caloric, however, for the past few years everything has
considerably changed. More and more restaurants are offering healthy and
delicious food which can also suit people with different diets and allergies.
In Finland, there are many vegan and vegetarian people. Therefore, lots of
the cafes and restaurants are trying to offer as many options as possible to
suit the customer`s specific needs.
service. Moreover, Fafa’s has always been present during mass events such
as various music festivals, for instance. During summer, there is a terrace
opened so that customers can enjoy the warm and sunny weather outside
while having their meals. The restaurant has the partnership with the most
famous delivery companies in Finland such as Wolt and Foodora. This year,
Wolt company made a rating of ten’s top most ordered dishes in Tampere
and Fafa`s’ ’Halloumi Pita’ got the fourth position. (Wolt Blog 2017.)
2 THEORY
2.1.1 Introduction
According to Rai (Rai 2008, 7.), the formula for customer satisfaction is the
following: customer satisfaction equals customer perception of the service
received minus customer expectation of the customer service. Referring to
this method, the conclusion is that if customer’s perception of the service
exceeds customer’s expectation, then a client stays satisfied as well as the
opposite; if customer’s perception is less than customer’s expectations,
then a client gets dissatisfied.
First, the opinion about the product itself is formed long before obtaining
the service (primary expectations, opinion, impression). Therefore, the
very first impression of experiencing the service is crucial for the company’s
future success. When the customer finally gets to experience a service or
product, there are two outcomes:
2.2.1 Introduction
There are many different definitions of service and service quality. Philip
Kotler, for example, identified service as ‘’an act or performance that one
party can offer to another that is essentially intangible and does not
result in transfer of ownership’’ (Kotler et el, 2012.)
The table below shows all tactical service functions and its activities:
Classifying Response
Contacts Delivery
Intake:
Response:
Output:
Control:
The table below shows all strategic service functions and its activities:
Analysis:
Staff management:
Supervision and Scheduling makes sure that both parties are satisfied
with their work and schedule and that the workload equals to the
time given
Awareness:
Contact Solicitation informs customers that organisation is keen to
take every complaint and educates them about the availability of the
service
Proactive Communication educates consumers on how to avoid any
issues purchasing the product or obtaining the service (Goodman
2009, 117.)
2.3.1 Introduction
The first reason for measuring quality and customer satisfaction is to learn
about customer`s perceptions. It is worth trying to consider each client’s
needs because every customer has different perceptions within the same
environment. Instead of taking average results, the company should try
identifying different opinions to meet all client’s needs. The company may
try to find out what customers find attractive in business, what might make
them change using a service, what are their criteria for acceptable service
quality performance and what can be done for a better satisfaction.
(Gerson 1993, 24.)
The third reason is to close the gaps. There are many differences between
customers and a company which are based on different perceptions of
both parties: (Gerson 1993, 26.)
- The gap between what business thinks a client wants and what a
customer wants. It is when a company produces a product or delivers
a service and tells customers to obtain it while customers need a
different product or service. The company here should first assume
what customers want, let them know about it and only after that ask
directly what customers want (Gerson 1993, 27.)
- The gap between what business thinks a customer has bought and
what a client perceives has been received. The perception gap
between what a company thinks was provided and what a customer
received sometimes can be big enough. The gap exists because a client
perceived an obtained product or service in a different way with what
a company has thought (Gerson 1993, 27.)
- The gap between marketing promises and actual delivery. Very often
companies market their service or product in the best way possible
exceeding customer expectations. If the promises were not delivered,
a customer would get dissatisfied by getting lower quality service than
was expected (Gerson 1993, 27.)
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The fourth reason is to inspect what company does to improve the service
and customer satisfaction. Clients and employees should be aware of
certain standards set by a company to perform the service at its best. The
measurement of the performance should be made compared to the
standards that were set. Goals and objectives must be set based on the
customer`s requirements and expectations and afterwards measured. This
will help to improve both customer satisfaction and quality of the service.
Analysis of where the business is now and where it must be will contribute
to improving the performance of the service. In the end, if customer`s
needs and perception were met and even exceeded, a customer will be
satisfied. (Gerson 1993, 29.)
The fifth reason for measurement quality and satisfaction is that improved
service leads to increased profits. If the service is improving, there will be
more customers what automatically leads to the bigger profit. Besides, if
the level of the service quality and customer satisfaction increases at the
same time, the company can charge more for the service and goods
provided, and that will lead to a greater profit. (Gerson 1993, 29.)
The sixth reason is to learn how the business is doing and whether it goes
further or not. This reason might be the most crucial because it is
imperative to understand the current stage of the firm. Also, a company
should have clear goals and objectives for the future success. Customer
satisfaction and quality performance measurements will help to
understand whether the client is satisfied and whether the business is
doing good or not. (Gerson 1993, 30.)
When the results are measured, it is easy to see whether the business is
growing or goes down and see the roots of the problem. Besides, it gives
people the sense of accomplishment what, hence, gives more motivation
to the further work and development. With the measurement techniques,
it is easier to reward people with their job because the results are visible
and the company is aware of who did what, when and where.
Measurements lead to the higher level of productivity and greater results.
(Gerson 1993, 31.)
There are many techniques for measuring the quality of the service and
customer satisfaction. In this chapter, several of them will be introduced.
Force Field Analysis was developed by Kurt Lewin in the 1940s. This method
is mostly about analysing the current stage of the business and finding
ways for its improvement. It allows identifying driving and restraining
forces of the company. Driving forces here are the ones which lead to the
increased productivity of the company, and restraining forces are those
which lower productivity. The decision can be taken when driving forces
and restraining forces become equal. (Gerson 1993, 45.)
Wrong delivery 1 0 0 1
This allows a company to see the bigger picture of the problem and then
take following measures.
Histograms are the vertical graphs which illustrate numerical data about
the frequency of the service and product distribution. It is very similar to
the Pareto chart. The only difference is that histograms display quantitative
data while the Pareto chart is all about qualitative information. (Gerson
1993, 36-37.) The example of the histogram graph is shown below:
The results of this question showed that from 75 participants of the survey
65 respondents were Finnish people (87%) while ten people (13%) were
foreigners. The reason for a small number of foreign nationals visiting the
restaurant could be that the period when the survey was conducted was
not a tourist period; therefore, the most customers were Finns. As for the
foreign people living in Finland (not tourists), most of them are students
who do not eat out as often as people who have a permanent job, and that
could also be the reason for a small number of foreigners visiting the
restaurant. From this result, the assumption can be that there is not much
sense of having so many foreign employees as well as making English the
primary language at the restaurant, however, giving a job opportunity for
foreigners gives a positive image for the company as well as brings
economic benefit for the country. Besides, since the majority of Finnish
population speak fluent English, the use of English language at the
20
restaurant shall not be a problem. The graph below shows a visual division
of the nationalities visiting the restaurant:
Nationality
13%
Finnish
Other
87%
The results of this question showed that from 75 people 30 people were of
the age from 26 to 35 years old (40% of the respondents). 13 people were
from 21 to 25 years old (17%). 12 people were 20 years old or younger
(16%). Nine people were from 36 to 45 years old (12%), eight people were
from 46 to 55 years old (11%), and only three people were of the age of 56
and older (4%). The results of this question showed that most of, many of
the customers are adults. There is a tiny amount of underage customers;
therefore, Fafa’s restaurant could think of selling more types of beer and
other alcohol beverages because it attracts more customers as well as gives
more profit for the company. One of the comments on the open-ended
question proves the point mentioned above: ‘’more beer options would be
nice’’. (Appendix 2/1, Question 13) And this is a suggestion for the
company to consider. The age division of the Fafa’s customers can be
visible on the chart below:
Age
30
12 13 9 8 3
Gender
Male
2%
39% Female
68 people answered this question. 53 people said that they do not have
special food preferences or specific diets (78%), nine people were
vegetarians (13%), and six individuals were vegans (9%). As the majority of
people do not have specific preferences and can eat most of the food,
there is no need for the restaurant to make the place specified only on
vegetarian or vegan food. From the question 11 and 13 there were several
answers concerning this topic:
Question number 11:’’ Is there anything you are not satisfied with? If so,
why?’’ (Appendix 2/1)
It goes without doubts that the restaurant should consider the opinions
mentioned above, however, if the majority of the customers are people
without specific food preferences or diets, the place should still serve
meat. The suggestion would be to add more vegan and vegetarian options,
make the menu more diverse and make sure that those meals are never
mixed because it can lead to the severe consequences and spoil the image
of the restaurant. One of the comments which must also be considered is
the following: ‘’Before visiting the restaurant, I assumed it would be a more
vegetarian place, and I do not feel that meat dishes fit with the concept
and style of the restaurant (fresh, quite healthy) The restaurant should also
use organic products. Instead of plastic takeaway boxes, for example, there
should be more environmentally friendly options. More consciousness
would be highly appreciated’’ (Appendix 2/1). Restaurant shall be more
conscious serving diverse types of meals. For instance, different chopping
boards and knives must be used when serving the vegan, vegetarian food
or meat. Visual distribution of the customer’s food preferences is pictured
on the graph below:
Vegetarian
None of it
78%
68 people answered this issue. 27 people used to visit the restaurant once
in a month (40%). The first time to visit Fafa’s restaurant was for 17 people
(25%). 15 people visited Fafa’s only a few times a month (22%). Five people
visited Fafa’s just once a week (7%), three individuals came by few times a
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week (4%) and only one person from the respondents used to visit Fafa’s
restaurant every day (1%). By these answers, it is clear the that the
restaurant is quite popular and there are always new customers as well as
the regular ones. The results of the question are shown below on the chart:
ONCE A MONTH 27
ONCE A WEEK 5
EVERY DAY 1
0 5 10 15 20 25 30
68 people reacted to this issue. Most of the people visited Fafa’s restaurant
during the lunch time – 49 people (72%) and 17 people visited the
restaurant for dinner (25%). 2 people answered that it always depends
(3%). Time of the customer’s visits is shown in the graph below:
0
LUNCH DINNER IT DEPENDS
The graph below visually shows the answers of all the respondents:
3
8 15
27 21
36 38 32
44 38 38
26
52
38
25 25
25 23 14
15 11 8
31
8 10 2
15 2 6 3
2 5 0 3
8 7 7 8 6
5 4 5 5
2
The conclusion of this statement would be that the staff should pay
attention not only to the food preparation but to the maintenance of the
restaurant itself. The cleanliness of the restaurant is the first thing
customer pays attention to when entering a place. Having more employees
can be a solution so that there is always rotation between food preparation
and cleaning of the area.
Question number 11: ‘’ Is there anything you are not satisfied with? If so,
why?’’ (Appendix 2/1)
‘’ Sometimes staff looks a bit stressed. I think the reason is that there
are not enough staff members working in the restaurant.’’
Question number 13: ‘’ Is there something you would you like to have/to
improve at Fafa`s restaurant? ‘’ (Appendix 2/2)
The reason for that can be a lack of employees working, especially during
the weekends when the number of customers is doubled comparing to the
weekdays.
During the weekends, very often people have no place to seat that is why
they order food ‘’take away’’ or just leave the restaurant. The restaurant
should think about expanding the space because for the moment there is
no room for more tables or chairs available.
Having a coat rack could also help regarding saving some space since
people will have a place to put their outwear and will no more storage it
on the chairs.
When it comes to meat, the staff should pay extra attention to this process
since undercooked meat can cause poisoning and other illnesses.
57 people answered this question. 52 people think that the menu has a
wide range of meals (91%) while five people believe that the variety of
meals on the menu is poor. (9%) The answers can be visible on the chart
below:
Disagree
91%
There were few suggestions from the customers based on the open-ended
questions: (Appendix 2/1, Appendix 2/2)
Drinks and fries are the most popular options; therefore, those items shall
always be available. The restaurant should keep track of the customers’
average orders to know the approximate amount of goods to request from
stock. The check sheet can go in use here as it helps to keep track of the
items needed.
Having a coffee machine, for instance, will not be costly for the company
but will make customers satisfied instead.
More ‘’meal’’ options would be a bright idea since those orders are always
popular and cheaper for customers to buy.
The amount of English menu must be equal to the Finnish menu since the
number of foreign visitors will be increasing due to the upcoming summer
season. The availability of English menu will make customers feel welcome
and satisfied.
Tables can be changed so that the design of the restaurant gets a fresh and
modern style.
The location of the lamps at Fafa’s restaurant in Tampere is low what might
somehow spoil the visitors’ experience (customers often hit their heads
because of the lights). The restaurant shall reinstall lamps since the
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Employees shall be more interactive and open with the customers since
communication is one of the restaurant experience the visitor wants to get.
The information about the internet shall be more visible for the customers
so that they know how to use it. The suggestion would be to make a big
cardboard with the wi/fi login and password information.
23 25
9
1 1
1 2 3 4 5
4 SWOT ANALYSIS
STRENGTHS WEAKNESSES
Satisfied and loyal customer base Small space of the restaurant=>no
Excellent level of the quality seats and tables available
service Low usage of the social media
International atmosphere channels
Positive image
OPPORTUNITIES THREATS
To expand the space Chance to lose vegan and
To open the second restaurant vegetarian customers
To get more customers and boost
popularity by using social media
platforms
To satisfy vegan and vegetarian
customers by being more
conscious about their food
preferences
To improve the existing level of
service
Based on the survey, there is no doubt that Fafa’s restaurant has a satisfied
and loyal customers base. Most of the customers participating in the
33
survey were satisfied with the quality of the service in Fafa’s restaurant,
and this is also one of the big strengths the company has. Moreover, the
international atmosphere at the restaurant brings a positive image to the
company and creates some uniqueness.
One of the company’s threats could also be the chance to lose vegan and
vegetarian customers. This thought was derived from the customers’
comments on the open-ended questions of the survey. Some of the visitors
were suggesting making the whole menu vegan without any meat served.
However, as the 78 % of the customers participating in the survey did not
have any specific food preferences or diets, there is no point to stop serving
meat.
Based on the certain strengths, weaknesses and threats the company has,
there are following opportunities identified:
Since there were complaints from the customers that there are no
seats available or not enough tables, the suggestion would be to
expand the space by reorganising some equipment and furniture and
open the second restaurant with a bigger space in the future.
The results of the survey showed that most of the information was
spread by word of mouth and there was almost no Internet usage.
The suggestion for the company here will be to be more active on the
social media platforms. It will increase the number of customers as
well as boost company’s popularity and the image.
One of the threats was the chance to lose restaurant’s vegan and
vegetarian customers since there were complaints about serving
meat and not enough vegetarian meals, not being environmentally
friendly. The solution here is to be more conscious about serving
vegan and vegetarian meals along with the meat options. Different
utensils (knives, forks and chopping boards) must be utilised not to
mix the ingredients used in the meals. Having more vegan, vegetarian
and gluten-free options as well as using less plastic boxes will also be
a solution to the problem. Following these rules, all customers will
stay satisfied and happy with the service provided.
As for the strengths the company has, it is vital to keep up with the
level of the service provided as well as move towards the continuous
service improvement.
34
The aim of this research was to measure customer satisfaction and service
quality level at Fafa`s restaurant and find ways for its improvement. The
primary research in the form of the survey was conducted to gather and
analyse the data and meet the research objectives. The methodological
approach included the survey of 16 questions including three open-ended
questions. 75 customers were participating in the study in total. The
process went smoothly due to the author’s connection to the restaurant.
The majority of the customers were Finns what was 87% of the
respondents. Most of the customers were mainly from the age between 26
to 35 years old. 59% of the customers were females while the other part
were males. The considerable number of visitors participating in the survey
did not have specific food preferences or diets. However, there were many
comments from people following vegan or vegetarian diets saying that the
restaurant should be more conscious about serving this kind of food. The
frequency of the restaurant visits varied from people visiting the restaurant
once a month, being there the first time and coming to Fafa’s few times a
month. The less number of individuals was visiting the restaurant more
frequently. The most popular time to visit the restaurant turned out to be
lunch time and weekdays were the most popular days to visit the place.
However, as it was mentioned by the author before, the answers regarding
the days of the visits were inaccurate since most of the surveys were
spread on the weekdays. The information about Fafa`s restaurant was
mostly spread via customer’s friends and word of mouth. Most of the
customers were satisfied with the variety of meals offered by the
restaurant. However, there were few suggestions about serving some
coffee with desserts, having more fries and drinks available and adding
more gluten free options to the menu. 55% of the customers participating
in the survey were extremely satisfied with the service quality level, and
33% were somewhat satisfied. Regarding the quality and price ratio at
Fafa’s restaurant, 42% were extremely satisfied while 39% were somewhat
satisfied. 92% of the customers would recommend Fafa’s to the people
they know, and that is an excellent result for the restaurant.
REFERENCES
Kano, N., Seraku, K., Takahaski, F., & Tsuji, S. (1984). Attractive Quality and
Must-be Quality. The Journal of Japanese Society for Quality Control.
36
Sauerwein E., Bailom F., Matzler K., & Hinterhuber H. (1996). The Kano
Model: How to delight your customers. Preprints Volume I of the IX.
International Working Seminar on Production Economics,
Innsbruck/Igls/Austria.
Appendix 1/1
1. Nationality
Finnish Other
2. Age
20 or younger
21-25
26-35
36-45
46-55
56 or older
3. Gender
Every day
Few times a week
Once a week
Few times a month
Once a month
It`s my first time
Appendix 1/2
Agree Disagree
11. Is there anything you are not satisfied with? If so, why?
39
Appendix 1/3
12. On a scale from 1 to 5, how satisfied are you with the Fafa`s service?
1 2 3 4 5
13. Is there something you would you like to have/to improve at Fafa`s restaurant?
(Example: coffee, TV, more tables, entertainment for kids, etc.)
14. On a scale from 1 to 5, how satisfied are you with the quality/price ratio at
Fafa`s restaurant?
1 2 3 4 5
Yes No May be
16. Is there anything you would like to suggest to Fafa`s that was not addressed in
a survey?
Appendix 2/1
Open Answers to the Open-Ended Questions of the Customer Satisfaction and Service
Quality Survey at Fafa’s Restaurant
Answers to the question number 11. Is there anything you are not satisfied
with? If so, why?
Answers to the question number 13. Is there something you would you like
to have/to improve at Fafa`s restaurant? (Example: coffee, TV, more tables,
entertainment for kids, etc.)
Appendix 2/2
Answers to the question number 16. Is there anything you would like to
suggest to Fafa`s that was not addressed in a survey?