AN EXAMINATION ON SERVICE MARKETING AFFECTS A SMALL FOOD SERVICE BUSINESS IN LIVERPOOL: CHINA STAR
Abstract
Satisfaction of the customers is considered as a vital aspect in the entire operation of any firm in the service industry. This is particularly vital in the operation of restaurant, because it can affect the decision-making process of the customers, as well as their future behavior in coming back in the restaurant. Currently, there are different factors which affect the overall operation of China Star, particularly including the changing demands and preferences of the customers. As a result, it is vital to focus on the different attributes of the company, and how the customers perceived it’s important and compare it with the satisfaction. By doing this, it will help the company to focus on the different marketing strategies and service marketing that will help the restaurant to regain or improve its past financial performance and share in the market. This research focuses on analyzing the current performance of the company by focusing on the satisfaction of the customers. A quantitative study was implemented in order to measure the said aspect. A total of 100 questionnaires were disseminated and a total of 86 valid answers were analyzed and evaluated. It included 20 important attributes that are related to the current performance of the company. Importance-Performance Analysis was used in order to analyze the overall performance of the company; each attributes were plotted in the Importance-Performance Matrix and analyze which attributes are caught by a given quadrant. The result showed that 14 attributes were identified in the Keep up the Good Work quadrant and 6 in concentrate here quadrant. At the end of the paper, recommendation regarding the different marketing strategies and actions were presented.
1.0 INTRODUCTION
Satisfied customers are considered as vital to the long-term success of a business, and the connection between customer satisfaction and customer behavior has been the focused of different marketing literature for a long time. Anderson & Sullivan (1993) stated that high consumer will help to motivate great customer loyalty, which will result to future revenue (Fornell 1992). Currently, marketing is becoming competitive than before which resulted to intensive price and innovation competition, which pushes industries and firms to focus on the importance of customer loyalty. As a result, marketing budgets focuses on more resources that will handle defensive marketing such as customer retention (Roberts & Varki 2003).
According to Rucci & Kim (1998) Service quality is considered as reliant on a chain of subsystems that are connected to the behaviors of the consumer, together with profitability. This relationship is called the service profit chain (Loveman 1998), which indicated that increased in the satisfaction of the customer will help to decrease customer complaints and will eventually lead to the loyalty of customer.
The quality of services is critical and vital success factor for modern service companies. The quality of service is close conceptual and empirical connection to the satisfaction of the customers turned it into the primary marketing instrument, by making it the most researched area in the field of services marketing (Bolton 2000). Furthermore, there are different studies which showed positive relationship with profitability (Fornell 1992). The quality and excellence of service helps to enhance the inclination of the customer to avail, and buy more, to buy other services and to become less price sensitive, at the same time, tell other people about their positive experiences (Bolton 2000). As a result it is vital for all companies and organizations in the service industry to focus on improving their services towards the customers. The activities of employees within a service company enable the company to be connected to their customers. The main aim of these activities focuses on maintaining good consumer relationship with the customers. Therefore, these activities are considered as a critical aspect in developing effective working relationships with the customers (Grimmer & Gremler 1998). As a result, the employees of an organization, particularly in the service industry are vital in ensuring success in the said areas because of the fact that they are the person that are ultimately accountable or in charge in providing a quality service which will meet the expectations of the customers (Zeithaml & Berry 1996). Therefore, employee’s skills, attitudes as well as equipment and other support that can help them will be considered as a determinant precursor towards the satisfaction of the customers (Bitner 1995).
Management and Marketing theorists commonly believe on the assertion that service quality is vital to the success of the business (McColl-Kennedy & Schneider 2000). Therefore, those companies that are offering superior and high quality of service as measured by customer satisfaction will also experience higher economic and financial returns compare with their competitors that are not that service-oriented (Bolton 1998).
On the other hand, it is important to consider the different factors that are connected with satisfaction of the customers including expectations and service encounter. According to Raajpoot (2004), the service encounter is considered as an important component of the service quality construct, further, it engages with the critical moments of thrust where in the customers will develop permanent impressions towards the firm (Bitner & Brown 2000), On the other hand, several studies focuses on the important of customer’s expectations which from their own accumulation of contacts with services which they have experienced all their lives. From these contracts, customers accumulate a generalized service expectation or standard that is based on their day-to-day experienced as a customers. Therefore, it is from the buildup of these services which make the customers to create their personal standards and then use them in order to measure and determine quality of service (Kong & Jogaratnam 2007).
In addition, customers are becoming more and more knowledgeable in terms of making purchasing decisions because of the efficient access to information. As a result, players in the restaurant industry are facing more sophisticated customers than before. Aside from the product pricing and quality, customers are also concerned on how they are being served and treated by the employees and staffs inside the restaurant (Morgenstein & Strongin 1992).
1.1 Statement of the ProblemThe service industry is considered as one of the most vulnerable industries because it can be affected by most of the changes in the preferences, demands and needs of the customers, particularly regarding the cultural and social aspect. This is greatly applied in the food service industry; where in the quality of service is considered as vital. Quality of service is connected or related with the satisfaction of the customers which will help to drive customer satisfaction and retention then help to improve financial performance and market share.
China Star is considered as one of the most popular and loved restaurant in Liverpool because of the different strategies that are being implemented. However, just like what have mentioned, the company is being affected by the different factors which affect the demands and needs of the customers, particularly in the aspect of product and service offerings inside the restaurant. This is aside from that fact that China Star had already established strong bond with their loyal and long-termed customers.
Thus, this study will focus on the different problematic areas of the restaurant by focusing on the different factors and attributes that are connected to the performance of the restaurant including the physical designs, quality of foods and services and pricing. Thus, it will focus on the examining and analyzing the relationship between the satisfaction of the customers and the perceived quality towards the products and services of China Star.
After 5 years of successful operations and performances, the manager of the restaurant found out that the financial performance of the restaurant is declining, due to the decreasing market share. Based on this, this paper will focus on the analyzing the different factors which the customers believed to be important, at the same time, measure their satisfaction which will help to know those aspects that are needed to be improved.
1.2 Objectives of the StudyThe objective of this study is to explore the case of China Star, a small food service restaurant in Liverpool focusing the evaluation on the importance of the service marketing and its influence on the customer loyalty. In lieu with this, the following research objectives will be addressed:
- analyze the importance of the service marketing for a small food services restaurant business;
- identify and monitor how do service quality and service experiences of customers’ affect the stronger customer relationship in order to help raise the customer loyalty;
- find out which issues play the most important roles in service quality and how those issues working and explore to maintain and improve the customer loyalty and the restaurant business running;
- recommend strategies on how China Star will improve customer satisfaction.
The key questions that will be answered in this study are:
- what are the important factors which influence the satisfaction of customers in China Star?;
- how the customers perceived the quality of service in China Star?;
- how important service marketing in China Star?;
- how satisfactions of the customers towards the service quality of China Star, influence their loyalty and the performance of the restaurant?
Currently, food service industry is considered as a growing industry in the world. This is because of the different economic and social factors which affected the lives of different individuals. This enables those businesses, particularly those international companies to expand and grow in a larger market. However, as the number of restaurants increased, together with the different changes in the environment, including the demands and needs of customers, competition is growing. Therefore, it is vital for each and every restaurant business in the world to focus on the different strategies that will help to drive and encourage customer satisfaction and loyalty, in order to stay in the business for a long time. This is important for those companies operating in the service industry, particularly in the food service sector because there are different factors to be considered in measuring the satisfaction of the customers including the performance of the employees, particularly the waiters as well as the quality of food and drinks, together with the ambiance or environment.
This study will focus on the relationship of the quality of service and the satisfaction of the customers. This will enable to explore the different issues, factors and aspects that are related to the services of a restaurant and how it can affect the satisfaction of the customers. This will enable to give the academic individuals and organizations, together with the different businesses the idea on how the customers think about food services. Thus, it will give China Star the primary information about the different strategies that they can apply in the organization in order to regain the interests of their customers, at the same time, improve their satisfaction.
1.5 Scope and Delimitation of the StudyThe study will focus only on the impact of the different aspects which influence the satisfaction of the customers towards quality of service and will not tackle those factors which influence the standards of the customers towards quality of service such as culture and other social factors.
Factors that are related to SERVQUAL were used in order to analyze the 4 important synthesis of restaurant environment which are: food quality, atmospheric quality, service quality and price. Aside from that, because analyzing and assessing the satisfactory level of the customers will be hard and difficult using SERVQUAL and other tools, the research will use the important-performance matrix. Furthermore, it will focus on the current performance of the China Star that will be based on the perception of its first time and regular customers, at the same time, focuses on their satisfaction level. Therefore, the result of this paper will be applicable to the case of China Star alone.
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