Customer satisfaction in the restaurant industry: An examination of the transaction-specific model

Abstract

Purpose
To determine the factors that explain customer satisfaction in the full service restaurant industry.

Design/methodology/approach
Secondary research and qualitative interviews were used to build the model of customer satisfaction. A structured questionnaire was employed to gather data and test the model. Sampling involved a random selection of addresses from the telephone book and was supplemented by respondents selected on the basis of judgment sampling. Factor analysis and multiple regression were used to test the model.

Findings
The regression model suggested that customer satisfaction was influenced most by responsiveness of the frontline employees, followed by price and food quality (in that order). Physical design and appearance of the restaurant did not have a significant effect.

Research limitations/implications
To explain customer satisfaction better, it may be important to look at additional factors or seek better measures of the constructs. For example, the measures of food quality may not have captured the complexity and variety of this construct. It may also be important to address the issue of why customers visit restaurants. Instead of the meal, business transactions or enjoying the cherished company of others may be more important. Under the circumstances, customer satisfaction factors may be different. The results are also not generalizable as the sampled area may have different requirements from restaurants.

Practical implications
Full service restaurants should focus on three elements – service quality (responsiveness), price, and food quality (reliability) – if customer satisfaction is to be treated as a strategic variable.

Originality/value
The study tests the transaction‐specific model and enhances the literature on restaurant service management.

Full text

Customer satisfaction in the restaurant
industry: an examination of the
transaction-specific model
Syed Saad Andaleeb and Carolyn Conway
Sam and Irene Black School of Business, Penn State Erie, The Behrend College, Erie, Pennsylvania, USA
Abstract
Purpose – To determine the factors that explain customer satisfaction in the full service restaurant industry.
Design/methodology/approach – Secondary research and qualitative interviews were used to build the model of customer satisfaction. A structured
questionnaire was employed to gather data and test the model. Sampling involved a random selection of addresses from the telephone book and was
supplemented by respondents selected on the basis of judgment sampling. Factor analysis and multiple regression were used to test the model.
Findings – The regression model suggested that customer satisfaction was influenced most by responsiveness of the frontline employees, followed by
price and food quality (in that order). Physical design and appearance of the restaurant did not have a significant effect.
Research limitations/implications – To explain customer satisfaction better, it may be important to look at additional factors or seek better
measures of the constructs. For example, the measures of food quality may not have captured the complexity and variety of this construct. It may also
be important to address the issue of why customers visit restaurants. Instead of the meal, business transactions or enjoying the cherished company of
others may be more important. Under the circumstances, customer satisfaction factors may be different. The results are also not generalizable as the
sampled area may have different requirements from restaurants.
Practical implications – Full service restaurants should focus on three elements – service quality (responsiveness), price, and food quality (reliability)
– if customer satisfaction is to be treated as a strategic variable.
Originality/value – The study tests the transaction-specific model and enhances the literature on restaurant service management.
Keywords Restaurants, Catering industry, Customer satisfaction, Service levels, United States of America
Paper type Research paper
An executive summary for managers can be found at
the end of this article.
Introduction
The restaurant industry in the USA is large and ubiquitous.
Providing a range of products and services, it touches nearly
every household in one way or another. Reflecting on the size
of the industry, The National Restaurant Association (NRA)
predicted in 2003 that Americans would spend $426.1 billion
on food consumed outside the home (National Restaurant
Association, 2003). Of this amount, it was predicted that full
service restaurants could secure about $153.2 billion or,
roughly, 36 percent of the share. The restaurant industry has
grown over the years, largely because the American way of life
has changed. Since 1950, the proportion of married women in
the work force has nearly tripled (Goch, 1999), resulting in
women having less time to plan and prepare meals at home.
Today, meals are more of an afterthought rather than a
planned occasion (Mogelonsky, 1998). People find
themselves hungry with no time to cook; so they eat out.
The result is the booming restaurant industry.
The NRA also predicted that on an average day in 2003,
the restaurant industry would post $1.2 billion in sales. The
winner of this contest over America’s taste buds is the
customer who has more restaurant options than ever before,
allowing him or her to be more finicky and demanding.
Customers’ expectations for value, in relation to price, also
seem to be on the rise: people want “more” for their money.
These findings have interesting theoretical and practical
implications for the service literature, service establishments,
and especially the restaurant industry which is lucrative in
size, fiercely competitive, and very important to the public
palate. In particular, it is important to comprehend the
dynamics of this industry from the perspective of the
customer who is the final arbiter of how much to spend and
where, when and what to eat. Therefore, an understanding of
the factors that influence customer satisfaction ought to be
useful in guiding restaurant owners and managers to design
and deliver the right offering.
The main research question driving this study is “What
explains customer satisfaction in the full service restaurant
industry?” Given our geographic focus, we believe this study
represents a small step in a series of needed studies to
understand the bigger picture.
Customer satisfaction is at the heart of marketing. The
ability to satisfy customers is vital for a number of reasons.
For example, it has been shown that dissatisfied customers
tend to complain to the establishment or seek redress from
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Journal of Services Marketing
20/1 (2006) 3– 11
qEmerald Group Publishing Limited [ISSN 0887-6045]
[DOI 10.1108/08876040610646536]
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them more often to relieve cognitive dissonance and failed
consumption experiences (Oliver, 1987; Nyer, 1999). If
service providers do not properly address such behavior, it can
have serious ramifications. In extreme cases of dissatisfaction,
customers may resort to negative word-of-mouth as a means
of getting back. A disgruntled customer can, thus, become a
saboteur, dissuading other potential customers away from a
particular service provider.
Researchers have also found a strong relationship between
satisfaction and loyalty. Szymanski and Henard (2001), in
their meta-analysis, indicate 15 positive and significant
correlations between the two constructs. Bearden and Teel
(1983) have also shown a relationship between satisfaction
and loyalty. In fact Jones et al. (1995) argue that this
relationship is not a simple linear one; these behaviors may
depend on consumer attributions, i.e. their belief in the causes
of the CS/D assessment.
Quite understandably, marketing practitioners have often
aligned their bets with customer satisfaction, using slogans
such as “Our focus is customer satisfaction”, or “Customer is
king.” The University of Michigan tracks customers across
200 firms representing all major economic sectors to produce
the ACSI (American Customer Satisfaction Index). Each
company receives an ACSI score computed from its
customers’ perceptions of quality, value, satisfaction,
expectations, complaints, and future loyalty (Fornell et al.,
1996).
Customer satisfaction is defined here in Oliver’s (1997)
terms: that it is the consumer’s fulfillment response. It is a
judgment that a product or service feature, or the product or
service itself, provides a pleasurable level of consumption-
related fulfillment. In other words, it is the overall level of
contentment with a service/product experience.
We used the transaction-specific model suggested by Teas
(1993) and later expanded by Parasuraman, Zeithaml and
Berry (1994) – PZB henceforth – to address our research
question because this model suggests how overall customer
satisfaction can be explained by evaluating experiences with
specific aspects of service quality, product quality, and price
(PZB, 1994). Also, by using the transaction-specific model,
we emphasize that the offering for the full service restaurant
industry must be viewed as a mixture of service and product
features. Thus, customers are likely to consider specific
aspects of the transaction such as product features (e.g. food
quality and restaurant ambience), service features (e.g.
responsiveness of the server), as well as price, to be satisfied
with their overall restaurant experience. The conceptual
framework and the corresponding hypotheses are outlined in
the next section, followed by an explanation of the research
method, the analyses, results, and discussion.
Conceptual framework and hypotheses
Service quality
An important factor driving satisfaction in the ser vice
environment is service quality. On this matter, however,
there is some controversy as to whether customer satisfaction
is an antecedent or consequence of service quality. One school
of thought refers to service quality as a global assessment
about a service category or a particular organization (PZB,
1988). Research conducted by PZB (1985) illustrated
instances where respondents were satisfied with a specific
event, but did not feel the organization offered overall high
quality. Because most measures of customer satisfaction relate
to a specific evaluation of a service episode, customer
satisfaction is viewed as it relates to a specific transaction
(Howard and Sheth, 1969; Hunt, 1979; Singh, 1990); hence
incidents of satisfaction over time result in perceptions of
service quality (PZB, 1988). Oliver (1981) stated that
satisfaction soon decays into one’s overall attitude. From
this perspective, service quality could be viewed as the whole
family picture album, while customer satisfaction is just one
snapshot.
Recently, however, it has been argued that while the two
concepts have things in common, “satisfaction is generally
viewed as a broader concept ... service quality is a component
of satisfaction” (Zeithaml and Bitner, 2003, p. 85). Because
satisfaction derives from various sources, Bitner and Hubbert
(1994) propose two ways of viewing satisfaction: service-
encounter satisfaction (i.e. satisfaction or dissatisfaction with
specific service encounters) and overall satisfaction (based on
multiple encounters or experiences). In other words, little
satisfactions based on each service encounter lead to overall
satisfaction with the service.
Clearly, service quality is an issue that has engaged
academics, leading to substantial debate over its
conceptualization. In 1988, PZB developed SERVQUAL, a
method to assess customer satisfaction for service industries,
which started a stream of research on service quality
measurement that continues to this day. Their measurement
involved the difference between customers’ perceptions and
expectations based on five generic dimensions: tangibles,
reliability, responsiveness, assurance and empathy.
Research based on this framework has been applied to the
restaurant industry by Stevens (1995), who created
DINESERV from SERVQUAL with some encouraging
results. Although the SERVQUAL framework has been
pursued with some enthusiasm in various service industries,
empirical support for the suggested framework has not always
been encouraging. Cronin and Taylor (1992) suggested that
service quality can be predicted adequately by using
perceptions alone. In addition, Carman (1990) suggested
that in specific service situations it might be necessar y to
delete or modify some of the SERVQUAL dimensions. Teas
(1993) argued that measuring the gap between expectations
and performance can be problematic.
When SERVQUAL, consisting of the five original
dimensions, was originally conceptualized by PZB (1988), it
was used to assess four organizations – a bank, a credit card
company, a repair and maintenance organization, and a long
distance phone service carrier. In these industries customers
typically develop long-term relationships with just one
organization. Moreover, PZB did not distinguish these
organizations on the basis of experience, search, and
credence criteria (Zeithaml and Bitner, 2003, p. 36). Each
of these services is also a “pure type” with little or no physical
products exchanging hands. In the restaurant industry, only a
part of the offering is a ser vice which is intangible and
heterogeneous, and where the production and consumption
of the product cannot be separated. In addition, customers
Customer satisfaction in the restaurant industry
Syed Saad Andaleeb and Carolyn Conway
Journal of Services Marketing
Volume 20 · Number 1 · 2006 · 3 – 11
4

expect and desire a variety of food selections and places to
frequent, and typically develop a “consideration set” which is
a cluster of restaurants that they patronize on a rotating basis
(Neal, 1999).
In this mixed product-service context and where service
assessments are largely experience based (as opposed to
healthcare or auto repair organizations where service
assessments are credence based), we contend that all five
original dimensions of SERVQUAL need not be included.
For example, the assurance and empathy dimensions
originally suggested in the SERVQUAL framework may not
be of great significance for the following reasons: Assurance is
defined as employees’ knowledge and courtesy and their
ability to inspire trust and confidence. This particular
dimension of service quality is significant largely for
credence based industries such as healthcare, legal services,
or auto repair, that have a higher degree of risk per purchase
and where the outcome of the service encounter is neither
easy to predict, nor well understood. In the restaurant
industry, the customer’s risk is low given the purchase price,
the outcome of the service, and the alternatives available.
Hence assurance is not likely to be as important in this
industry. Moreover, the use of scale items such as “you felt
safe in your transactions with the restaurant” or “the behavior
of employees instilled confidence in you” (both derived from
SERVQUAL) simply did not seem appropriate for the
restaurant context. Yet we acknowledge that elements of
assurance – knowledge and courtesy – are important, but
may have contextually modified meanings as we shall
subsequently argue.
Similarly, empathy is defined in the SERVQUAL literature
as the individualized caring attention that is displayed to each
customer. This dimension is more applicable to industries
where “relationship marketing” as opposed to “transaction
marketing” is critical to the organization’s survival. These
types of industries need personnel that can offer “high
technical” advice and/or develop important business alliances
where empathy can play a vital role. However, the need to
demonstrate empathy in the context of restaurants, especially
for contact personnel such as a server in a busy dinner rush
when one is typically waiting on 20 or more people at a time,
may be fleeting at best. Customers also do not want a doting
server providing personal attention when all they want is to
enjoy the food and the company. At the same time, scale items
such as “the restaurant gives you individual attention” or “the
restaurant had your best interest at heart” (derived from
SERVQUAL) seemed inappropriate for the context. Why else
would customers be there when a variety of other alternatives
are available? Instead, reliable and responsive services may be
more desirable for restaurants when provided in a pleasing
environment.
Reliability has been regarded as the most critical factor for
US customers based on both direct measures and importance
weights derived from regression analysis (PZB, 1988). The
SERVQUAL literature identifies reliability as the ability to
perform promised services dependably and accurately. For the
restaurant industry, reliability translates into the freshness and
temperature of the food (the promise), and receiving the food
error-free and as ordered the first time (dependably and
accurately).
Interestingly, these aspects or measures of reliability could
also be interpreted to represent “food quality” (provided
fresh, at the right temperature, and error-free). In this regard,
we were surprised at our inability to uncover any previous
research on food quality. Considerable research has been
conducted over whether people desire fish more than chicken
and/or vice versa. Menu design and the number of
appropriate items on a menu has also been extensively
researched and reported in the trade literature. However,
what attributes of “food quality” restaurant goers desire most
has received little attention. It is probable that the “chain”
restaurants have conducted their own research, but have not
shared this information due to proprietary rights. We interpret
this dimension interchangeably as “reliability” or “food
quality” because of the common features as explained above
and hypothesize that:
H1a. The more reliable the service provided by the
restaurant, the greater the level of customer
satisfaction, or
H1b. The higher the level of food quality, the greater the
level of customer satisfaction.
Responsiveness, as defined by the SERVQUAL literature, is
identified as the willingness of the staff to be helpful and to
provide prompt service to the customer. In full service
restaurants, customers expect the servers to understand their
needs and address them in a timely manner. For this
dimension, we propose that:
H2. The more responsive the service provided by the
restaurant, the greater the level of customer
satisfaction.
Product quality
Because the “product offering” for a full service restaurant is
likely to be assessed by evaluating an actual product (the
meal) and by where it is delivered (physical place), we decided
to separate the tangibility dimension in SERVQUAL into its
two aspects: food quality and the physical design/de
´cor of the
restaurant. The former has been discussed earlier along with
reliability.
From the perspective of physical design, environmental
psychologists suggest that individuals react to places with two
general, and opposite, forms of behavior: approach or
avoidance (Mehrabian and Russell, 1974). It has been
suggested that in addition to the physical dimensions of a
business attracting or deterring selection, the physical design
of a business can also influence the degree of success
consumers attain once inside (Darley and Gilbert, 1985).
This involves research on the “servicescape” (Bitner, 1992)
which is the “built man-made environment” and how it
affects both customers and employees in the service process.
Thus, we propose that:
H3. The better the physical design and appearance of the
restaurant, the greater the level of customer
satisfaction.
Price
The price of the items on the menu can also greatly influence
customers because price has the capability of attracting or
repelling them (Monroe, 1989), especially since price
Customer satisfaction in the restaurant industry
Syed Saad Andaleeb and Carolyn Conway
Journal of Services Marketing
Volume 20 · Number 1 · 2006 · 3 – 11
5

functions as an indicator of quality (Lewis and Shoemaker,
1997).
The pricing of restaurant items also varies according to the
type of restaurant. If the price is high, customers are likely to
expect high quality, or it can induce a sense of being “ripped
off.” Likewise, if the price is low, customers may question the
ability of the restaurant to deliver product and service quality.
Moreover, due to the competitiveness of the restaurant
industry, customers are able to establish internal reference
prices. When establishing prices for a restaurant, an internal
reference price is defined as a price (or price scale) in buyers’
memory that serves as a basis for judging or comparing actual
prices (Grewal et al., 1998). This indicates that the price
offering for the restaurant needs to be in accord with what the
market expects to pay by avoiding negative deviation (i.e.
when actual price is higher than the expected price). We
propose that:
H4. The less the accordance of the actual price with
expectations (negative deviation), the lower the level of
customer satisfaction.
Research method
Research design
Secondary sources were explored first to assess past research
conducted on customer satisfaction in the restaurant
industry. The next stage involved gathering information
via qualitative methods from restaurant goers. This process
allowed us to identify and narrow down the key factors and
the related items comprising the factors that were expected
to explain customer satisfaction for the restaurant industry.
Thenextstepinvolveddesigningandpre-testinga
questionnaire that was administered to a convenient
sample. The pre-test was instrumental in assessing the
strengths and weaknesses of the questionnaire and in
ensuring that all pertinent variables were included. At this
stage, several modifications were made to the instrument to
remove ambiguities, to eliminate items that did not seem to
fit the context (e.g. feeling safe in one’s transactions with
restaurants), and to improve the flow of the questions. The
final version was administered to a representative sample in
a test-market city in Pennsylvania.
Measurement
The questionnaire asked respondents to evaluate the last full
service restaurant they had frequented. It included perceptual
measures that were rated on seven-point Likert scales. This
design is consistent with prior studies on customer satisfaction
and service quality. Each scale item was anchored at the
numeral 1 with the verbal statement “strongly disagree” and
at the numeral 7 with the verbal statement “strongly agree.”
Multiple items were used to measure each construct so that
their measurement properties could be evaluated on reliability
and validity. The scale items measuring the dependent
variable were chosen to reflect people’s overall satisfaction
with the services provided by the restaurant (see Appendix).
Demographic data were also obtained from the respondents.
We did not use the gap score approach that measures the
difference between perceptions and expectations suggested in
the original SERVQUAL framework due to the problems
discussed earlier in the paper; instead we only focused on
perceptual measures, which also helped to keep the
instrument and the analyses simple. This approach is
consistent with other studies (Cronin and Taylor, 1992;
Andaleeb and Basu, 1994).
Sampling
Respondents were selected by utilizing a table of random
numbers applied to the local telephone directory, which
resulted in mailing out 600 surveys. Respondent anonymity
was ensured by not requiring them to identify themselves
anywhere in the survey. In addition, respondents were asked
to return the completed surveys by mail in a postage paid
envelope. Respondents were also informed that the study was
being conducted by a well-known local college.
A total of 85 questionnaires were completed and returned
by mail, resulting in a response rate of 14 percent. Such rates
are not atypical: according to Harbaugh (2002, p. 70),
“Response rates for traditional mail surveys have continued to
decline to a point where the average is below 20%.” We might
have been able to increase the response rates using follow-up
mailings or including monetary incentives as these seem to
maximize response rates (Larson and Chow, 2003). However,
because of resource constraints, such measures had to be
abandoned. Instead, to increase the sample size to more than
100, an additional 34 restaurant users were interviewed using
judgment sampling to eliminate potential biases and to select
respondents from a wide spectrum. This approach resulted in
a final sample size of 119 respondents. The sample
demographics indicated that a broad cross section of the
population responded.
Analyses
Factor analysis was conducted with varimax rotation to
examine how the selected measures loaded on expected
constructs. Four factors were recovered from the analysis (see
Table I). The Eigenvalue of each factor was greater than one.
The total cumulative variation explained by factor analysis
was 72.4 percent. The factor structure did not fully emerge as
expected. For example, responsiveness measures loaded on
one single dimension but included measures from assurance
(knowledge of menu) and tangibles (server’s appearance was
neat) (see Appendix). The justification for including these
items in “responsiveness” is elaborated in the discussions.
Table II contains the summary statistics, as well as the
reliability coefficients and correlations among the variables
included in this study.
Reliability
The reliability of each multiple-item scale was assessed by
coefficient alpha indicated in the diagonal of Table II.
Reliability analyses showed that the internal consistency of
each of the four explanatory constructs in the study was
relatively high and considered to be very good because,
according to Nunnally (1978), the alpha value should be 0.70
or higher.
Validity
The results in Table II provide support for discriminant
validity because the correlation between one scale and another
Customer satisfaction in the restaurant industry
Syed Saad Andaleeb and Carolyn Conway
Journal of Services Marketing
Volume 20 · Number 1 · 2006 · 3 – 11
6

is not as high as each scale’s coefficient alpha (Gaski and
Nevin, 1985).
Results
Multiple-regression analysis was used with the four factors as
independent variables to test the model for customer
satisfaction (see Table III). The full model was found to be
significant as indicated by the overall F-statistic ( p,0.000).
The regression model explained 56 percent of the variation in
the dependent variable, satisfaction, as indicated by the
adjusted R
2
value. Three of the four factors had a significant
effect on customer satisfaction. These include responsiveness
(b¼0.566; p,0.000); food quality/reliability (b¼0.231;
p,0.025); and price (b¼20.186; p,0.000). The
“physical design and appearance” dimension (b¼0.006,
p,0.94) was not significant. The results suggest that our
modified model explains customer satisfaction in the
restaurant industry reasonably well.
The standardized beta values suggest that responsiveness
has the greatest impact on customer satisfaction. Price and
food quality (or reliability) were also determined to be
significant, having an impact on customer satisfaction in that
order.
Discussion
This study tested a model of customer satisfaction for the
restaurant industry using the transaction-specific framework.
The results suggest that our model satisfactorily explains
customer satisfaction and that full service restaurant owners
and managers should focus on three major elements – service
quality (responsiveness), price, and food quality (or
reliability) – if customer satisfaction is to be treated as a
strategic variable and enhanced.
From the results, it was determined that the
“responsiveness” dimension of service quality was most
important to customers. This multiattribute dimension
Table I Factor analysis of independent variables with varimax rotation (extraction method: principal component analysis)
Responsiveness Food quality/reliability Physical design Price
1234
Attentive 0.855 0.261 0.148 20.066
Helpful 0.836 0.270 0.121 20.047
Prompt 0.807 0.141 0.098 20.128
Neat appearance 0.793 0.088 0.313 0.156
Understood needs 0.788 0.384 0.136 20.121
Courteous 0.744 0.355 20.022 20.166
Knowledge of menu 0.714 0.313 0.259 20.050
Exact order 0.213 0.821 0.090 20.136
Order error-free 0.247 0.810 0.049 20.128
Fresh 0.346 0.723 0.228 20.062
Temperature just right 0.342 0.671 0.095 0.077
Lighting appropriate 0.147 0.067 0.880 20.102
Adequate parking 0.025 20.040 0.778 20.181
Clean 0.309 0.213 0.704 0.138
De
´cor appealing 0.198 0.290 0.618 0.231
Expensive 20.117 20.060 0.008 0.900
Paid more than planned 20.081 20.126 20.044 0.879
Eigenvalue % of variation Cumulative %
Factor 1 7.29 42.88 42.88
Factor 2 2.03 11.98 54.86
Factor 3 1.65 9.71 64.57
Factor 4 1.33 7.83 72.41
Table II Descriptive statistics, correlations and reliability coefficients
Variables SAT RSPNSV PHYS DESIGN FOOD QL/REL PRICE
xs
Satisfaction (4)
0.9
5.88 1.24
Responsive (7) 0.72
0.93
5.6 1.17
Tangibles (4) 0.31 0.41
0.77
5.69 0.94
Food quality (4) 0.57 0.61 0.32
0.83
5.86 1.07
Price (2) 20.39 20.19 20.05 20.27
0.78
3.03 1.61
Notes: Figures in italics represent reliability coefficients; figures in parentheses indicate the number of items measuring each construct;
p
,0.05; the last two
columns indicate means and standard deviation
Customer satisfaction in the restaurant industry
Syed Saad Andaleeb and Carolyn Conway
Journal of Services Marketing
Volume 20 · Number 1 · 2006 · 3 – 11
7

encompasses all the personal contact attributes of the
employees with the customers including whether the
employees were prompt, courteous, knowledgeable, neat in
appearance, helpful, attentive, and understood customer
needs (see Appendix). It is instructive to note that courtesy
and knowledge of the menu, generally considered as
assurance items, loaded with measures of responsiveness. In
the restaurant business, one could easily look upon a server
who is knowledgeable about the menu to be able to “respond”
to customer requests or questions effectively; hence it could
arguably be seen as a responsiveness item. Similarly, being
courteous is how customers want contact personnel to
“respond” to their presence – hence explaining its links to
responsiveness.
Interestingly, a server’s appearance (neatness) also loaded
with responsiveness and not with the “physical design” items
(i.e. tangibles). Whether this was due to the fact that our
measures of tangibles included only one employee feature (as
in SERVQUAL) and four restaurant features, or whether neat
employees again represent how customers expect personnel to
be (i.e. respond) in their presence is a moot question and
demands additional investigation. In fact, as past studies have
suggested (Carman, 1990; Andaleeb, 1998; Andaleeb and
Simmonds, 1998), our results seem to corroborate that strict
adherence to specific measures (such as SERVQUAL) in
different contexts may not be appropriate. As a specific
example, it may be perfectly reasonable for employee
knowledge to be categorized as an assurance item in a high-
risk credence-based context such as medical or legal services,
but as a responsiveness item in a lower-risk experience-based
context such as dining out, suggesting that contexts can
change meanings of subjective measures. This contention
ought to be recognized and further addressed by researchers
so that reasonable interpretations of measures can prevail over
the need to adhere to popular models or to traditional
interpretations of measures that may be considered by some
as immutable.
From a managerial perspective, it is important to develop
appropriate programs and provide on-going training on the
various attributes of responsiveness to strengthen employees’
ability to improve customer service. Although easy to suggest,
instilling these qualities in the frontline personnel and gaining
their commitment can be challenging. However, if full service
restaurants want to deliver high levels of customer
satisfaction, they could periodically track staff performance
on the seven items that measure “responsiveness.” By doing
so, supervisors and owners of restaurants can design targeted
training programs that encourage employees to instill this
dimension of service quality.
Based on the standardized regression coefficients, price
expectation was determined to be next in importance in
influencing customer satisfaction. The negative beta value
suggests that when prices are not in accordance with
expectations (with negative deviation), customer satisfaction
declines. As our secondary research suggested, restaurant
customers typically have internal reference prices stored in
their memories (Grewal et al., 1998). Consequently, if prices
on the menu are higher than what the customer expects,
customer satisfaction will be adversely affected. It is
important, therefore, for restaurants to assess competitive
prices and customers’ reference prices for a selected segment
in which they desire to position their offering.
Based on the regression coefficients and the standardized
beta values the construct ”food quality” or reliability ranked
third in importance. At first glance, this finding was a little
surprising because food – the meal – is considered the
primary purpose for dining out. Perhaps, restaurants have
refined the science of food preparation to the point where this
is not the distinguishing factor any more. In other words,
restaurants are doing such a good job in this area that this is
not the principal factor in a person’s decision to select a
restaurant. Future studies ought to test this contention.
Curiously, although the exploratory analysis and the
secondary research supported it, the physical design of the
restaurant did not have a significant effect on customer
satisfaction as shown by the regression coefficients. We were
puzzled when this factor turned out to be insignificant
because the substantial research that has been conducted on
atmospherics or physical designs of restaurants and other
facilities substantiate the validity of including this factor in the
model. Perhaps the physical characteristics of a restaurant
work through some other mediating variable to explain
customer satisfaction; this should be explored in future
research. In this regard, Zeithaml and Bitner (2003, p. 98)
suggest that most companies combine tangibles with another
dimension to develop service strategies; however, firms that
do not attend to tangibles “can confuse and even destroy an
otherwise good strategy”.
We believe our model for assessing customer satisfaction in
the full service restaurant industry is a useful one. We also
believe that if restaurant owners truly want to gain a
competitive edge, they must continually strive to increase
the levels of customer satisfaction by emphasizing the three
significant factors discerned in this study and as suggested by
the transaction-specific model.
Table III Multiple regression results (dependent variable: satisfaction)
Variables Unstandardized coefficients Std error Standardized coefficients
t
-value Significance
p
<
Constant 1.891 0.584 3.24 0.002
Responsiveness 0.566 0.087 0.523 6.49 0
Food quality/reliability 0.231 0.089 0.203 2.6 0.011
Physical design 0.006 0.087 0.005 0.08 0.938
Price 20.186 0.047 20.246 23.93 0
Notes:
F
4,113
¼38.85;
p
,0.001; Adj
R
2
¼0.56
Customer satisfaction in the restaurant industry
Syed Saad Andaleeb and Carolyn Conway
Journal of Services Marketing
Volume 20 · Number 1 · 2006 · 3 – 11
8

Future research
The coefficient of determination (adjusted R
2
) in our model
suggests that we consider additional factors to explain overall
satisfaction with the full service restaurant experience. Two
such factors come to mind upon post hoc reflection: one is
that our focus on food quality was rather limited and that the
four measures that were selected may not be reflective of the
array of considerations that may go into customer assessment
of food quality (or reliability). This factor by itself would seem
to require additional study and is likely to vary with the type
of restaurant one visits and with the demographic profiles of
customers. Clearly, this is an area that could be substantially
enriched to explain customer satisfaction.
The second area that we believe requires further study is the
assumption that the primary reason people go to restaurants is
for the meal. This view may not hold true for those full service
restaurant visitors whose main purpose is to transact business
or to enjoy the company of cherished others (friends, family,
spouse, etc.). The extent to which these restaurants are able
to facilitate transactions or create conditions in which people
are able to enjoy the company of others may also be important
determinants of customer satisfaction that may need to be
included in future models of customer satisfaction. By
considering these aspects, it may be possible to provide
deeper insight into the factors that full service restaurant
owners and managers need to stress in their total offering.
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Syed Saad Andaleeb and Carolyn Conway
Journal of Services Marketing
Volume 20 · Number 1 · 2006 · 3 – 11
9

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Appendix. Measures of constructs (Likert scales:
strongly agree-strongly disagree)
Responsiveness
.Employees were attentive.
.Employees were helpful.
.Service was prompt.
.Server’s appearance was neat.
.Employees understood your needs.
.Server was courteous.
.Server had knowledge of the menu.
Food quality/reliability
.You received exactly what you ordered the first time.
.Your order was served error-free.
.The food was fresh.
.The temperature of the food was just right.
Physical design and appearance
.Lighting in the restaurant was appropriate.
.Adequate parking was available.
.The restaurant was clean.
.The de
´cor was visually appealing.
Price
.Food items were expensive.
.You paid more than you had planned.
Satisfaction
.Overall, you were satisfied with your dining experience.
.You would return to the restaurant in the future.
.You would recommend the restaurant to others.
.Considering the type of restaurant, the quality of service
was excellent.
Corresponding author
Syed Saad Andaleeb can be contacted at: ssa4@psu.edu
Executive summary and implications for
managers and executives
This summary has been provided to allow managers and executives
a rapid appreciation of the content of the article. Those with a
particular interest in the topic covered may then read the article in
toto to take advantage of the more comprehensive description of the
research undertaken and its results to get the full benefit of the
material present.
Customer satisfaction in the restaurant industry:
an examination of the transaction-specific model
A father’s well-meant advice to his daughter, who was looking
at career options, was: “Go into the catering industry.
Everybody’s got to eat.” If she took the advice, she may now
be working in one of the most fiercely-competitive industries
where the customer has enormous choice and where, to survive,
management has to understand the dynamics of how those
customers decide how much to spend, where and what to eat.
Understanding why people go out to eat is also essential,
and it’s certainly not just because they’re hungry and haven’t
the time or inclination to eat at home, or are away from home
and dependent on restaurants. Socializing and doing business
also come into the frame.
That being the case, restaurants must consider the extent to
which they can facilitate these business transactions, and
social gatherings. The food, of course, has to be enjoyable,
well-presented and value-for-money; yet, important and
essential as it is, the meal is no longer considered the
primary reason why people visit a restaurant.
The reason for the meal not being crucial in selecting where
to eat may be that restaurants have been doing such a good
job in food preparation that it is no longer a distinguishing
factor between many of them.
Focusing on customer satisfaction sounds a sensible
starting point for designing the business for optimum
custom, especially when you bear in mind that a disgruntled
customer can become a saboteur, dissuading other potential
customers away from a particular ser vice provider. But what is
customer satisfaction, and to what extent do its component
parts (price, ambience, quality of the meal, helpfulness of the
staff) combine to build “service quality”?
Syed Saad Andaleeb and Carolyn Conway, who studied the
flourishing restaurant industry in the USA, see service quality
as something that is built up as a result of various experiences
of customer satisfaction – “service quality could be viewed as
the whole family picture album, while customer satisfaction is
just one snapshot.”
Of great importance to customers is the responsiveness of
the service – the ingredients of which include staff being
Customer satisfaction in the restaurant industry
Syed Saad Andaleeb and Carolyn Conway
Journal of Services Marketing
Volume 20 · Number 1 · 2006 · 3 – 11
10

prompt, courteous, knowledgeable, neat in appearance,
helpful, attentive and understanding of customer needs.
Andaleeb and Conway comment: “It is important to
develop appropriate programs and provide ongoing training
on the various attributes of responsiveness to strengthen
employees’ ability to improve customer service. Although easy
to suggest, instilling these qualities in the frontline personnel
and gaining their commitment can be challenging.
“However, if full service restaurants want to deliver high
levels of customer satisfaction, they could periodically track
staff performance on the seven items that measure
‘responsiveness.’ By doing so, supervisors and owners of
restaurants can design targeted training programs that
encourage employees to instil this dimension of service
quality.”
Prices vary according to the type of restaurant and if the
price is high, the quality must also be high or a sense of being
“ripped off” may be induced. Many customers have
perceptions of what a restaurant is likely to charge, and if
the prices are higher than they expect, customer satisfaction is
adversely affected. Conversely, low prices could result in
potential customers questioning the ability to produce the
meal and service they require. It is important, therefore, for
restaurants to assess competitive prices and customers’
reference prices for the selected segment in which they want
to operate.
(A pre
´cis of the article “Customer satisfaction in the restaurant
industry: an examination of the transaction-specific model”.
Supplied by Marketing Consultants for Emerald.)
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Customer satisfaction in the restaurant industry
Syed Saad Andaleeb and Carolyn Conway
Journal of Services Marketing
Volume 20 · Number 1 · 2006 · 3 – 11
11