Linking Service Perception to Intention to Return and Word-of-Mouth about a Restaurant Chain: Empirical Evidence

Abstract

Purpose: This study analyzed the influence of restaurant service perception on customer satisfaction and its implications on customers' attitude towards, intention to return to, and word-of-mouth (WOM) regarding a restaurant chain. Research design, data and methodology: Data from 421 respondents were collected using the convenience sampling method. After analyzing the data normality and removing responses with missing data and outliers, 342 responses were selected for further analysis, and the hypotheses were tested using Structural Equation Modeling (SEM). Results: We found that service perception affected customer satisfaction and customer satisfaction affected the customers' attitude toward the restaurant chain, which affected customers' intention to return and WOM about the restaurant chain. Conclusions: This paper provides one of the most important empirical results for managers in the restaurant sector, especially in Indonesia. Restaurant managers should thus provide training to their employees to improve the quality of the interaction with the customers and thereby increase customer satisfaction. The limitations listed in this study include the exclusion of respondents' income. For future research, we suggest investigating models of customer participation or consumer value co-creation for restaurant marketing success. Consumers are generic actors in the service ecosystem engaged in the value co-creation process.

1. Introduction

Many studies agree that company management would benefit from concentrating on customer experience (Lemon et al., 2016; DiPietro, 2017; Keiningham et al., 2017). To maintain excellence in technology and services, companies should offer their customers personalized services, develop unique customer experiences, and provide innovations (González-Mansilla et al., 2019; Barari et al., 2020). Several studies have revealed that the satisfaction gained from a positive customer experience had a critical effect on customers’ trust (Giovanis, 2016; Menidjel et al., 2017). Other studies even found that customers’ experience significantly increased the profitability of the company (Kumar et al., 2016; Siqueira et al., 2020). Based on statistical data, for example, the number of medium and large scale restaurants in Indonesia continues to increase, reaching 8,042 in 2020 (Badan Pusat Statistik, 2022), especially restaurants with outdoor concepts (Kemenparekraf, 2022). Most of these restaurants were in the Special Capital District of Jakarta and West Java provinces, at 49% and 13%, respectively (Badan Pusat Statistik, 2022). These restaurants can be located in malls/shops, industrial/office areas, culinary centers, tourist areas/tourist attractions, and hotels.

The service industry should prioritize customer experiences to support the company’s sustainability and increase the company’s future competitiveness. However, most currently available research models regarding customer experience only focus on the financial sector, especially banking (Lemon et al., 2016; Siqueira et al., 2020). Studies on service perception in the restaurant sector are still limited (Bravo et al., 2019). Furthermore, the study of emotions is an underdeveloped theme (Rodríguez-López et al., 2020). However, studies in the restaurant industry have increased in number over the last 30 years (See Table 1), thereby including many opportunities for future research (DiPietro, 2017).

Table 1: Previous Studies

Source: Own elaboration (2022)

The contribution of our research is to try to address the research gap above by conducting a study in the restaurant sector by emphasizing the customer experience aspect and developing a previous restaurant customer experience model. Specifically, this study seeks to empirically examine the effect of service perception and restaurant customer satisfaction on their intention to repurchase and WOM. Seeing the potential for extensive studies in this area, particularly on customer experience, we implemented and developed the restaurant customer experience model from Bravo et al. (2019). The findings of this study are expected to be useful for restaurant managers who want to provide more personalized service according to customer characteristics and create a pleasant experience for them. The authors also hope that this research can complement previous research on the topic of restaurants by validating the research model in different contexts.

This essay is organized with a literature review, followed by an expression of conceptual frameworks and hypothesis formulation. The next section presents the data sources and explains how the samples were gathered. Afterwards, the research approach is described. The results and discussion are presented in the next section. Finally, the article ends with the conclusion, limitations, and recommendations.

2. Literature Review

2.1. Service Perception

Service perception, which is the result of post-purchase customer experience, provides basic information for the measurement of customer satisfaction (Lemon et al., 2016; Edelman et al., 2015). Perception is a process during which a person captures information through his/her senses, which he/she then interprets according to his/her thinking. Furthermore, if the service perception captured is greater than his/her early expectation, then that service perception positively influences the customer (Chui et al., 2016). Service perception refers to the functional and emotional sides of the service experience, and it comprises three constructs: servicescape, employee service, and core service (Bravo et al., 2019). All three constructs have been examined within the banking context (Rambocas et al., 2019; Arguello et al., 2019) and the hotel context (Bravo et al., 2019).

Food quality is one of the most critical dimensions of service perception in encouraging restaurant customer reviews (Ryu et al., 2012). Employees apply their capacity to provide service toward unique individual buyers (Parasuraman et al., 1988; Ryu et al., 2012; Yrjölä et al., 2019). Food quality includes taste, presentation, smell, freshness, and the menu items offered (Jalilvand et al., 2017) and can increase customers’ value perception (Yrjölä et al., 2019). Furthermore, value perception can help form the image of a brand in the mind of the customers (Erkmen et al., 2019).

Aspects of the physical environment or servicescape can affect customers’ senses and consciousness, such as background music in cafes, the food aroma in the dining area of a restaurant, or the room temperature in a hotel (Bitner, 1992; Leri et al., 2019). Fowler et al. (2012) also mention that the servicescape affects not only customers but also the attitude of the service providers; that is, providers become politer and friendly toward customers. Also, the servicescape allows the restaurant to exhibit unique characteristics and impressions. For example, Starbucks and McDonald’s have different servicescapes in terms of their different designs and atmospheres and therefore provide a different impression for their respective customers (Orth et al., 2012).

2.2. Customer Satisfaction

According to Oliver (2014), customer satisfaction can be interpreted as a post-consumption assessment that involves cognitive and affective components. Customers can be considered satisfied if the quality assessment related to the product and/or service exceeds the customer’s expectation related to the product/service performance. Therefore, satisfaction is the feeling of happiness or contentment that emerges after the comparison between customers’ expectation and the actual performance. Customer satisfaction is the result of customers’ assessment of the characteristics of a product or a service and the positive result experienced from consumption (Ali, 2016; Oliver, 1999; Wibowo, 2021).

In previous studies, Bravo et al. (2019) used brand satisfaction as the result of service perception. In the restaurant context, brand satisfaction is defined as customer satisfaction that represents customers’ strong feelings that the restaurant brand possesses the ability to satisfy their hunger (Espinosa et al., 2018). Several studies have confirmed that brand satisfaction significantly affects customers’ trust in a brand (Giovanis, 2016; Menidjel et al., 2017). Eventually, brand satisfaction significantly and positively affects customer satisfaction with and loyalty to the brand (Veloutsou, 2015; Lee et al., 2016). Liu et al. (2009b) found that the taste of food was an important attribute that affected customer satisfaction.

2.3. The Intention to Return and Word of Mouth

Intention to return refers to the potential that the customer will return to the restaurant chain, either with or without a positive attitude toward the service provider (Wu, 2014). In the restaurant context, satisfaction is the most significant contributor to the intention to return (Mensah et al., 2018; Line et al., 2020), followed by the quality of the service (Mensah et al., 2018). According to Bravo et al. (2019), the satisfaction felt by the customers in a restaurant can affect customers’ attitude toward a group of other hotels within one hotel chain, which also applies to restaurants. Hence, this attitude determines the intention of the customer to return to the restaurant chain and the intention to communicate about the restaurant through word of mouth (WOM).

WOM is an action performed by customers to communicate their experience with and suggestions regarding a product or a service that they provide to the people in their networks (Rita et al., 2019). WOM is a form of informal communication from person to person regarding the ownership, quality, and sale of certain goods and services (Ahmadi, 2019). WOM can be negative, positive, or neutral and is the oldest marketing technique in helping shape opinions on products, brands, and services to be spread to other people (Basri et al., 2016).

2.4. Hypotheses

In the restaurant context, food quality is the core aspect of the service and the most crucial factor in promoting customer satisfaction (Ryu et al., 2012; Jalilvand et al., 2017). According to the findings by Huang et al. (2015), food quality significantly influences customer satisfaction. Moreover, not only the quality of the food but also the quality of the personal interaction between the employees and the customers strongly affected customer satisfaction (Jalilvand et al., 2017). However, the servicescape was proven to affect customer satisfaction only when restaurants were busy, whereas it had no effect when they were not busy (Line et al., 2020). The servicescape positively affected customer satisfaction and created certain emotions among customers (Andrés et al., 2016; Lin et al., 2011). Based on the explanation above, H1 is proposed:

H1 is proposed: H1: Service perception positively affects customer satisfaction.

In the restaurant context, satisfaction and employee attitude are important issues among restaurant chains (Hsiao et al., 2016). Experience affects satisfaction and attitude toward a brand (Nayeem et al., 2019; Ahn et al., 2018; Barnes et al., 2014). Several studies have also found that the higher the level of satisfaction is, the better the attitude toward a brand is (Zenker et al., 2014; Wu et al., 2019; Hatzithomas et al., 2018). Based on the explanation above, H2 is proposed:

H2: Customer satisfaction positively affects customers’ attitudes toward the restaurant chain.

A few studies have been conducted to prove the positive relationship between customer satisfaction and customers’ positive attitude through WOM of a brand in various contexts, such as a restaurant (Jalilvand et al., 2017), a hotel (Sukhu et al., 2019), and online shopping (San-Martín et al., 2016). A study conducted by Line et al. (2020) and Leri et al. (2019) revealed that customer satisfaction significantly affected customers’ attitude toward returning to a restaurant and their intention to spread positive WOM about it. In a different context, a study conducted by Barnes et al. (2014) and Rita et al. (2019) also supports the positive effect of customer satisfaction on the customers’ attitude toward returning. Concerning the emotional experience, Peng et al. (2015) revealed a positive effect of emotional customer experience on the attitude of the customers toward returning to a restaurant chain. Based on the explanation above, H3 and H4 are proposed:

H3: The attitude of customers toward the restaurant chain positively affects their intention to return to the restaurant chain.

H4: The attitude of the customers of the restaurant chain positively affects their WOM regarding the restaurant chain.

In brief, the relationships among the variables can be seen in the conceptual model in Figure 1.

Figure 1: Conceptual Model

3. Research Methods

3.1. Data Collection

A survey was conducted to test the relationships among the five constructs of service perception, satisfaction, attitude toward the restaurant chain, intention to return to the restaurant chain, and WOM among the restaurant customers in Indonesia. Questionnaires were distributed by the researchers to customers of restaurant chains located in the metropolitan areas of Indonesia. Only consenting customers took part in the survey and filled out the questionnaires. The respondents were asked to assess the items based on their dining experience. After that, the researcher checked whether the respondents completed the questionnaire smoothly or hesitated while filling it out. From a total of 421 customers, 342 questionnaires were completed and included in the analysis, for a response rate of 85.5%. Table 2 presents the profiles of the respondents in the sample. The sample consists of 51.8% females and 48.2% males. Most respondents (64.9% of the sample) ranged in age from 18 to 30 years old. Therefore, the sample consists mostly of young adults to middle-aged adults. In addition, 62.6% of the respondents reside in Jakarta, Bogor, Depok, Tangerang, and Bekasi (Jabodetabek) areas, while the remaining 37.4% are from outside Jabodetabek.

Table 2: Characteristics of the Respondents

Source: Own elaboration (2022)

3.2. Measurement

The latent variables were measured using a Likert scale. All items were adapted from previous studies. All items in all categories had a range of potential scores from 1 (strongly disagree) to 5 (strongly agree). The instrument used to measure the variables in this study was a structured questionnaire. The service perception variable was measured using items based on the work of Ryu et al. (2012), Grace et al. (2004), and Dong et al. (2013). The satisfaction variable was specifically measured using an instrument developed by Walsh et al. (2010) and Ryu et al. (2012). Four items adapted from Malär et al. (2011), Ferraro et al. (2013), and Bravo et al. (2019) were used to measure the attitude toward the restaurant chain variable. The intention to return to the restaurant chain variable was measured using five items from Meng et al. (2016), Kim et al. (2009a), and Mannan et al. (2019). Lastly, the WOM chain variable was measured using indicators based on Jalilvand et al. (2012), Rondán-Cataluña et al. (2015), and Bravo et al. (2019). To suit the context of Indonesia, the scales of the constructs and tests were translated into the Indonesian language to ensure that no interpretation mistakes were made (See Table 3).

Table 3: Measurement

Source: Own elaboration (2022)

3.3. Analysis Techniques

This study used SPSS to perform the descriptive analysis (e.g., the respondents’ profile). To test the hypotheses, structural equation modeling (SEM) was applied using AMOS 22. Based on Anderson et al. (1988), the construct validity was evaluated using confirmatory factor analysis (CFA). Next, univariate and multivariate normality were assessed. Univariate variables have CR values (for skew and kurtosis) between -1.96 and 1.96, which indicates normality (Byrne, 2016). In addition, the multivariate kurtosis value is less than 5, indicating no substantial deviation from multivariate normality (Byrne, 2016).

4. Results and Discussion

The results of the SEM analysis show that several indicators could not be analyzed further, since they had values less than 0.6. For the quality perception construct, several indicators were eliminated: FQ2, FQ3, E1, E2, S1, and S3. For the satisfaction construct, one indicator, K5, was eliminated. For the attitude towards the restaurant chain construct, one indicator, A2, was also eliminated. For the intention to return to the restaurant chain construct, two indicators, I4 and I5, were eliminated. Lastly, for the WOM chain construct, one indicator, W1, was eliminated. Therefore, all constructs were measured by three or more indicators (Hair et al., 2010). The values of the factors per indicator can be seen in Table 4.

Table 4: Descriptive Statistics, Validity, and Reliability

Source: Own elaboration (2022)

The results of the descriptive analysis show that the restaurant quality perception was considered sufficient. Generally, neatly and professionally dressed employees successfully encouraged customers to interact with them comfortably and politely. The restaurant facilities were maintained in good condition. Also, the food served tasted excellent, was visually well-presented, and had a pleasant aroma that filled the dining area. The dining area was clean, and the employees were helpful. In addition, the customers enjoyed and were satisfied with their entire experience in the restaurant and with the service rendered by the employees. Overall, the restaurant put the customers in a good mood and thus allowed customers to develop a good attitude toward the restaurant. The customers believed that dining at the restaurant was a good decision. They enjoyed visiting the restaurant chain and therefore were willing to plan and make efforts to return to the restaurant in the near future. The customers were also willing to recommend that their friends and families visit the restaurant and encourage them to pass along a reference for the restaurant. For further details on the results of the descriptive analysis, see Table 4.

The validity test was conducted using the Average Variance Extracted (AVE) value to measure the level of variance of a construct indicator. The recommended value of AVE is greater than or equal to 0.5. The results of the analysis revealed that AVE scores for all indicators are greater than 0.5. Furthermore, the reliability test indicates that the Construct Reliability (CR) is greater than 0.7 (See Table 4).

The results of SEM analysis revealed the significant impact of service perception on customer satisfaction (β=0.956; t=14.457); therefore, H1 is supported. Customer satisfaction is also proven to affect customers’ attitude toward the restaurant chain (β=0.898; t=16.886); therefore, H2 is accepted. Customer attitude is also proven to affect intention to return to the restaurant chain (β=0.770; t=14.675); thus, H3 is supported. Lastly, since customer attitude toward the restaurant chain is proven to affect WOM (β=0.798; t=15.326), H4 is also supported.

Figure 2: The Results of the SEM Analysis

The results of SEM also show sufficient goodness of fit (GoF). The score of the Goodness of Fit Index (GFI) is greater than 0.90 (Pandey, 2018; Hair et al., 2014). The score of Root Mean Square Error of Approximation (RMSEA) is smaller than 0.07 (Hair et al., 2014), the score of Root Mean Square Residual (RMSR) is less than 0.05, and the Standardized Root Mean Squared Residual (SRMSR) is less than 0.08 (Hair et al., 2014). The scores of the Normed Fit Index (NFI), Tucker Lewis Index (TLI), and Relative Fit Index (RFI) are greater than 0.90 (Pandey, 2018; Hair et al., 2010). The score of the Adjusted Goodness of Fit Index (AGFI) is greater than 0.85 (Pandey, 2018). The score of the ratio x^2/df=2.225 increased the acceptability of the model, since it is still within the acceptable range from 2 to 5 (Marsh et al., 1988).

This study has successfully proven that service perception affects restaurant customers’ satisfaction. Employee service was the most critical factor in determining service perception aside from food quality and servicescape. This finding is in line with the studies conducted by Truong et al. (2017) and Bravo et al. (2019). Based on this finding, restaurant owners should train their employees to provide food that suits the tastes of the customers (Jalilvand et al., 2017). The funding of this study supports Jalilvand et al.’s (2015) finding that customers’ satisfaction is affected by the quality of the employees’ interaction with the customer. Restaurant employees should also maintain this interaction quality when they speak to or help customers. Employees’ behaviors also influence customer satisfaction (Bihamta et al., 2017).

The results of this study contradict the results of a study conducted by Peng et al. (2015) that found that a restaurant’s servicescape did not affect the satisfaction of knowledgeable customers. It is worth noting that the respondents of this study were quite knowledgeable. The politeness of the employees is the most important factor in forming service perception compared to the restaurant’s servicescape. Neatly and cleanly dressed employees helped create a good first impression for the customers (Arguello et al., 2019). Furthermore, the cleanliness (Truong et al., 2017) of the facilities (Leri et al., 2019) also significantly affected customers’ satisfaction.

This study proved that customer satisfaction affected customer attitudes toward the restaurant chain, which is in line with the findings of several earlier studies (Nayeem et al., 2019; Ahn et al., 2018; Barnes et al., 2014). The satisfactory experience in turn created a positive customer attitude, manifested in the customers’ intention to return to the restaurant chain (Yrjölä et al., 2019). Satisfaction and emotions played a crucial role in attitudes toward brands (Zenker et al., 2014; Wu et al., 2019; Hatzithomas et al., 2018). Satisfaction can also help form customers’ attitudes toward the chain’s branches (Bravo et al., 2019). The results also confirm the finding of Barari et al. (2020) that a service must satisfy the customer and provide a comfortable and pleasant experience. Customers’ moods and emotions can also affect their satisfaction with a brand (Meidutė-Kavaliauskienė et al., 2014). However, this finding contradicts the results presented by Kabadayı et al. (2012) and Mensah et al. (2018), which asserted that customer satisfaction did not affect customers’ attitudes.

This study revealed the importance of customer attitude toward the restaurant chain as manifested in their intention to return to the restaurant chain. This result of this study supports the findings of previous studies such as Leri et al. (2019), Peng et al. (2015), and Rita et al. (2019).

Lastly, this examination revealed the effect of customer attitude toward the restaurant chain on WOM. Based on the studies conducted by Yrjölä et al. (2019), Line et al. (2020), and Jalilvand et al. (2017), customer attitude toward the restaurant chain encourages customers to create positive WOM. This finding, however, contradicts the findings of studies conducted by Serra-Cantallops et al. (2018) and Zenker et al. (2014), which state that customers’ attitudes after feeling satisfied with a service experience did not prompt the customer to engage in WOM regarding a chain’s branch.

5. Conclusion and Practical Implication

In business, customer experience is critical to developing brand value. A pleasant experience can be repeated by customers, and a positive experience in one individual location can benefit the whole chain (Bravo et al., 2019). In this study, the restaurant service perception was proven to affect customer experience. Furthermore, when feeling satisfied with the service received, customers formed a positive attitude toward the restaurant chain branch. Such an attitude could increase customers’ intention to return to the branch and provide WOM about the restaurant chain. Employee service was the most crucial aspect in determining the customer experience, followed by food quality and servicescape. These results indicate that customer actors tend to have positive perceptions of restaurant chain services, thus ensuring that a pleasant experience is created and continuing to grow positive attitudes toward restaurant chains. The positive attitude of customers plays a significant role in encouraging their intention to return to the restaurant chain and at the same time supports the growth of positive WOM in the market. Indeed, WOM emphasizes the weakening dominance of restaurants in a complex and dynamic service ecosystem, which involves the role of many actors as resource integrators.

Based on the findings of this study, restaurant managers should pay attention to employee service as a critical determinant of service perception. Employee service is a determining factor in the creation of customer satisfaction. Employee training can be provided to improve the quality of the employee-customer interaction. Such training can include communication skills, politeness, and service focus. In terms of servicescape, the restaurant managers should ensure the neatness of the employees’ uniforms/suits, the style of the restaurant decoration, and the usability of facilities in the restaurant. During situations like the Covid19 pandemic, managers can also employ take-away or drive-through services and can partner with various online food delivery services such as Go-Food and GrabFood to offer more flexible service options. For this reason, service innovation must be developed as an aspect of corporate culture to improve the service delivery process and generate positive brand evaluations (Kim et al., 2018). When service innovation comes from a well-known restaurant, its impact on WOM is relatively greater. Therefore, restaurant managers need to understand the importance of service innovation to support them to become leaders in the restaurant industry, and the brand reputation gained will encourage customers to develop positive WOM to other generic actors in the service ecosystem. Managers must encourage employee creativity to maintain competitive advantage and customer satisfaction in a competitive market.

6. Limitation and Future Research

Despite the contributions of this study, several limitations arise. The study excludes respondents' income; the implication is that the socio-economic status of the respondents cannot be clearly identified. Gender, age, and place of residence can indeed explain the characteristics of respondents but have not been able to provide an adequate explanation of socioeconomic status. Therefore, further researchers are advised to consider this parameter. Another limitation that requires further attention is that this study collected data in a non-random manner, which may limit the generalizability of the findings. Therefore, future research could consider various data sources to generalize the findings.

Future studies could explore the impact of the negative influence of traditional WOM and eWOM. Future research questions could consider the important variables influencing both local and foreign restaurant service innovation. In addition, we suggest investigating models of customer participation or consumer value co-creation for restaurant marketing success (Hastari et al., 2020; Scarlett et al., 2021; Wibowo et al., 2021). Little has been written about this model to generate fresh new insights into the marketing discipline.