analyzing the determinants of customer satisfaction in

South Asian Journal of Banking and Social Sciences,

Vol. 03, No.01 (2017), ISSN: 2410-2067 © Institute of Banking & Finance, BZU Multan

Analyzing the Determinants of Customer Satisfaction in Food

Sector, an Evidence from Southern Punjab, Pakistan

Muhammed Shan, Fahad Laber and Mubashar Maqbool Institute of Banking & Finance

Bahauddin Zakariya University, Multan. Corresponding Author’s Email: [email protected]

Abstract

Purpose- Customer satisfaction is of utmost importance in the food sector. The purpose of this study is to analyze the key determinants such as communication skills, Product availability, price and product quality and cleanliness contributing to CS. Design/methodology/approach- It is a cross sectional survey research. Data was collected through questionnaire. Regression analysis is used to analyze the results. Findings-The findings contradict with the previous studies conducted in foreign cultures. In Pakistan, customers want cleanliness in the place where food is cooked. There is no strong influence of product availability, price, and quality individually with customer satisfaction. However collectively all the variables influence significantly on customer satisfaction. Practical Implications-This study is useful for hotel industry to improve their customer satisfaction and remain competitive in market by retaining their customers. Originality Value- Previously no research has been done in the context of Southern Pakistan on food sector. Keywords Communication skills, product availability, price, product quality, cleanliness

Research Type Research Paper

___________________________________________ The current issue of this journal is available on the official website of Institute: http://www.ibfbzu.edu.pk/sajbs

South Asian Journal of Banking and Social Sciences




138

1.0 INTRODUCTION

Sales turnover of an organization is supported by satisfaction which the customer

expects to receive from the consumption of products. Customers have a perception in their

minds about the product features, characteristics, nature, and benefits when they purchase a

product. When the organization does not fulfill the customer perception (force influence to

purchase) dissatisfied the customer then that event decreased the chances for the customer

repurchase.

To achieve customer satisfaction (CS), communication skills, product availability, price,

product quality have major impact. Communication skill is the ability to deliver accurate and

desired information to the customer with inspired attitude. Product availability is a term to

provide access of the all requires products at the required place on the required time. Price is

monitory value for exchange of goods or services. The level of excellence is known as quality.

Price and CS are related (Herrmann, A.et al., 2007). CS is extended on how much quality is

available in the product delivered by the restaurants. Quality provides the inner satisfaction and

also fulfills the level of expectation in the customer. Consumer expectation on food products is

flavorful, nutritious, safe, convenient, affordable and colorful. Thousands of ingredients are

using in preparing of food products. The Food and Drug Administration (FDA) maintains a list of

over 3000 ingredients in its database "Everything Added to Food in the United States", many of

which we use at home every day (e.g., sugar, baking soda, salt, vanilla, yeast, spices, and

colors). Cleanliness means very neat and clean environment (free from dust and expire

products) in the place where foods cooked and stored. In the context of Pakistan there are

many hotels are not clean. Foods authority of Pakistan sealed some of big hotels by the end of

2015.The study is aimed at analyzing the determinants of CS in the food sector of Pakistan.

2.0 LITRETURE REVIEW

Consumer satisfaction is an attitude that shows customer evaluation when they acquire

consumer goods (Chi, H. K et al,. 2009). Dissatisfaction is a factor that provides the base to

customers' decreasing repurchase intentions (Angriawan, F., 2011).Customers cannot always

display dissatisfaction before moving from provider (Colgate, M., & Hedge, R., 2001). Yadav

(2015) finding shows that there is a positive relationship between quality and customer satisfaction. High

quality in the consumer's product affects the performance of the firm (Atilgan, E. et al., 2003).

Quality influences on the performance of a firm many studies measured service quality in a



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variety of service industries and hotels including healthcare (Carman, Kilbourne et al., 2004;

Silvestro, 2005) and websites (Van Iwaarden et al., 2003). Figueiredo (2000) displayed issue by

highlighting product line that could not be easily identifiable related to the quality of the product

from the website. A study by Cho (2011) addressed the importance of advanced services, such

as customization, in the case of purchase decision via virtualized environments, particularly

when customers consider products that contain sensory attributes. For all chain members,

important determinant of performance is CS. However, it is either not measured at all, or it is

measured indirectly (Lusine H. Aramyan,).in 2000, Van der Vorst made a differentiation

between performance identifier of the company on supply chain (e.g. responsiveness, quality,

total supply chain Costs and delivery reliability). The change in policy concern the environmental

problems which have a big influence on agriculture-food supply chains. When the farmer uses

the pesticides and chemicals influence a negative effect on customer' buying attitude. So, the

customer demands a wide range quality like production characteristics, food safety,

convenience sensory properties, reliability, (Van der Spiegel, 2004). Marketing efforts display

the quality attributes (e.g. promotions efforts), influencing quality expectations (Luning et al.,

2002).High-level agreement for "product quality" categories may demonstrate the breeding

company format an integral chain for care system to become guarantee product having the

quality (Lusine H. Aramyan et al., 2000). These things are highly interrelated, but information

technology is an underlying force based on many of these because it easily changes the

identical nature and type of products, communications, services, structures, functions,

processes, and structures (Brookes et al., 2000). Quality also influences CS and purchase

intention (Bitner, M. J., & Hubbert, A. R. 1994). A study defines the relationship between the

quality and CS and satisfaction influence the purchase intention (Taylor, S. A., & Baker, T. L.

1994).

The good quality impacts CS (Bitner, M. J., & Hubbert, A. R. ,1994). Process quality

division is following Production system, an environment where food is cooked and marketed

(Luning, P. A., &Marcelis, W. J.,2006). Consumers have new demands and desires for different

attributes of food such as integrity, diversity, safety, quality and services (Van der Vorst, J.,

Beulens, A., & van Beek, P. 2005; Van der Vorst, J. G., Beulens, A. J., & van Beek, P.,2000).

Good communication skills motivate employees. Communication skills of employees build the

image of an organization. Clients in financial planning services prefer to deal with one adviser

because they feel that the critical information regarding income, savings, and marital issues

should be kept confidential (Hatfield et al., 1994).



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Han, H. & Choo (2017) Communication skills provide a protocol regarding customer

satisfaction and provide the support to customer desirability. Gabler (2017) investigated that

communication skills of employees build the image of an organization. Research result shows

that’s price is the component which leads to customer satisfaction and also effect on next

purchase deceigion. ). Zhang, (2017) stated that communication skills increases the customer

valuation which leads to customer satisfaction. Bojanic (1996) found a strong and positive

association between the customer value and satisfaction to markets segmented by price.

Parasuraman et al., (1996) stated that the transaction of satisfaction is based on the customer’s

evaluations of product quality, service quality, and price. Raji (2017) stated that results shows

there is the direct relationship between price and customer satisfaction. CS is related to the

rewards and the costs associated with a product purchase (Churchill and Surprenant., 1982).

Based on the extensive review of literature following framework is proposed.

3.0 THEORETICAL FRAMEWORK AND HYPOTHESIS

DEVELOPMENT

Based on literature review, it is concluded that product 3Ps and 2 Cs affects customer

satisfaction. So, proposed framework for research is given in Fig 1.

Fig 1. Theoretical Framework

CUSTOMER

SATISFACTION

2 Cs

Product quality

Product availability

Price

Communication skills

Cleanliness

3 Ps



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Hypothesis development

H13Ps have significant impact on CS.

H1(a)Product availability has significant impact on CS.

H1(b)Price has significant impact on CS.

H1(c) Product quality has significant impact on CS.

H2 2Cs have significant impact on CS. H2(a) Communication skills have significant impact on CS.

H2(b) cleanliness has significant impact on CS.

3.0 METHODOLOGY

It is a cross sectional study because data was collected at one point of time. The

organizations in this study include all large medium and small scale hotels. The respondents

were customers from all sphere of life. Convenient sampling was used for data collection. Some

respondents did not disclose the income level so follow up calls on their numbers were made to

get the data. The Cronbach alpha value of the instrument has been 0.656 which shows that the

instrument was reliable. Correlation analysis was conducted to see the association between the

independent variables. Data was analyzed through multiple regression analysis using SPSS 23.

4.0 RESULTS AND DISCUSSION

H1 3Ps have significant impact on CS.

Model R Square F β

0.051 5.194 (0.001)

0.225 (0.025)

Table 1: Impact of 3Ps on CS

Result shows that 3Ps which are product availability, price and product quality has combine

effect on customer satisfaction. 3Ps are causing 5.1% variation in customer satisfaction while

1% increase or decrease in 3Ps has 22.5% increase or decrease in customer satisfaction as

shown by Table 1. All results are found to be significant at 0.05%.

H1(a) Product availability has significant impact on CS.

H1(b) Price has significant impact on CS.

H1(c) Product quality has significant impact on CS.



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Model R Square F β

0.058 0.078 0.890

1.961 (0.125) 0.061 (0.632) 0.188 (0.145) 0.028 (0.793)

a. Predictors: (Constant), Product_Quality, price, product_availability b. Dependent Variable: customer_satisfaction

Table 2: Impact of Product Quality, Price and Product Availability on Customer

Satisfaction

Table 2 shows that there is no relationship between independent variables which are product

quality, price and product availability and dependent variable which is customer satisfaction. All

results are insignificant.

H2 2Cs have significant impact on CS.

Model R Square F β

0.139 15.618 (0.000)

0.372 (0.000)

Table 3: Relationship of 2Cs and CS

It can be depicted from results of table 3 that there is positive and significant rekationship

between composite impact of 2Cs on CS (β=0.372, p=0.000)

H2(a) Communication skills have significant impact on CS. H2(b) Cleanliness has significant impact on CS.

Model R Square F β

0.140 0.115

7.801 (0.001) 0.163 (0.096) 0.301 (0.003)

a. Predictors: (Constant), cleanliness, Comm_Skills b. Dependent Variable: customer_satisfaction

Table 4: Relationship between Communication Skills, Cleanliness and Customer

satisfaction

Table 4 shows that individual relationship of 2Cs which are communication skills and

cleanliness exists with customer satisfaction which is a dependent variable. 1% increase or



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decrease in cleanliness causes 16.3% increase or decrease in customer satisfaction. Similarly,

one percent change in communication skills causes 30.1% change in customer satisfaction.

5.0 Conclusion

It can be concluded from results given above that combine effect of 3Ps can be felt on

customer satisfaction while individual effect of 3Ps has not been proved. 2Cs combine effect as

well as individual effect has been proved from analysis of results. This shows that 2Cs matter

more for customers. If hotel management cannot communicate effectively and does not take

care of cleanliness, then customers’ switching rate can be high. Similarly, product quality and

availability and price collectively affects customer satisfaction but individual if anything is

missing, that does not affect much. So, hotel management should take care of 3Ps and 2Cs in

order to retain their customers and gain maximum advantage from the market

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APPENDIX

Questionnaire

We are conducting a study on customer satisfaction. We have constructed a questionnairefor collection of data. Kindly co-operate in filling the following questionnaire. Your responses would be kept confidential. Thank you!

Name Mobile/Email

Filling Instructions:

1: Strongly Disagree 2: Disagree 3: Neutral 4: Agree 5: Strongly Agree

Description Strongly Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

Communication Skills Q1 Timely of response/action undertaken by representatives

1 2 3 5

Q2 Response on the order. 1 2 3 4 5 Q3 accurate information is provided by the representative tothe customer.

1 2 3 4 5

Q4 Communication with regard to progress

1 2 3 4 5

Q5 Professionalism of staff members in hotel

1 2 3 4 5

Q6 The representatives would describe the food in general in a confident attitude

1 2 3 4 5

Q7 communication of representative is easily understandable.

1 2 3 4 5

Product Quality Q8 hotel staff understands your product quality requirements

1 2 3 4 5

Q9 Product specifications are appropriate to your needs.

1 2 3 4 5

Q10 Product conforms with your specifications

1 2 3 4 5

Cleanliness Q11 Do you visit the place where food is cooked.

1 2 3 4 5

Q12 Is there any deficiency of cleanness where food is cooked.

1 2 3 4 5

Q13 Ingredients use for cooking are fresh

1 2 3 4 5

Q14 does the hotel contain a separate place for the wastes

1 2 3 4 5

Product Availability



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Q15 Order placing system provided by hotel

1 2 3 4 5

Q16 On time delivery provided 1 2 3 4 5

Q17 Solutions to delivery problems 1 2 3 4 5

Price

Q18 Prices are competitive. 1 2 3 4 5

Q19 Consistent prices 1 2 3 4 5

Q20 Payment terms are provided 1 2 3 4 5

Q21 Minimum order size for delivery 1 2 3 4 5

Q22 Can you negotiate for price 1 2 3 4 5

Customer Satisfaction

Q23 I am very satisfied with the way Hotel performed

1 2 3 4 5

Q24 Hotel service representatives adhere to professional standards of conduct.

1 2 3 4 5

Q25 service representatives are well supervised

1 2 3 4 5

Q26 Poor purchase experience is faced many times

1 2 3 4 5

Your income below 30000

30000- 60000

60000 -90000

Above 90000

analyzing the determinants of customer satisfaction in

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