Pearson BTEC Level 5 HND Diploma in Hospitality Management

Unit 8: Research Project

Date: 30 December, 2014

Assignment 1: Research Project LO1

Understand how to formulate a research specification

Introduction of the chosen organisation

The chosen organization is Caf de Carol Fast Food. It is one of the strategic
business unit Quick Service Restaurants (QSR) belonging to the Caf de Coral
Group, which is one of the worlds largest publicly listed Chinese fast-food restaurant
groups. The group principally engages in operating quick-service (QSR) and specialty
restaurant chains and have successfully diversified both vertically and horizontally
into the institutional catering and food processing business. Founded in 1968, the Caf
de Coral group now operates over 580 separate outlets across its brands all over the
world. In 1979, it established its first benchmark food processing plant in a move to
lower costs and ensure consistency. In 1986, the Caf de Coral Group went public by
listing on the Hong Kong Exchange (SEHK 0341). In October 2001, the company
were appointed as one of the top 200 constituents of the Hang Seng Composite Index
Series. Despite the prevailing difficult business environment, the Groups 2013/14
results reached a remarkable new high with total turnover/revenue up by 9% and
profit attributable to shareholders surging by 8%. The Group is heading towards a
new chapter, with a comprehensive strategy and implementation plan that will enable
sustainable growth of the Group.

Caf de Coral Fast Food is one of Hong Kongs largest Chinese fast-food brand
and market leader in the fast-food sector, now operates 153 fast food outlets across
the Territory and services some 300,000 customers daily. While emphasising quality
dishes at affordable prices, the company also pioneered in offering new choices. The
daily menus are regularly rotated to ensure optimum variety, drawing upon over 100
popular dishes. Caf de Coral Fast Foods Chinese brand name is " " is
inspired by the ancient Oriental concept of togetherness and literally means that our
customers, staff and shareholders are all happily united as one. The corporate motto is
"A Hundred Points of Excellence" (100 ). More a way of life than a set of words,
the phrase reflects the companys commitment to striving for excellence and staying
ahead in todays rapidly changing world.
a.) Formulate and record possible research project outline specifications.

Title - Customer satisfaction of the service quality of Caf de Coral in the fast food
industry

Aims -
To analyze the customers satisfaction on the service quality delivered in the fast food
industry and find out which dimensions should be focus for future improvement.

Objectives -
(1) To study the importance of achieving customer satisfaction in the fast food
industry;
(2) To develop a research and investigate customer point of view on different
dimensions of service quality delivered by Caf de Coral;
(3) To determine which dimensions of service quality should be improved to achieve
customer satisfaction.

b.) Undertake a critical review of key references.

Literature review of key references was conducted with the following parameter:
(1) Books, journals, conference proceedings, newspapers, magazines articles;
(2) published within past 15 years, i.e. during the period of 1999 to 2014;
(3) using keywords containing customer satisfaction, fast food, dimension of
service quality;
(4) using internet search engine including Google search, Google Scholar, bookzz,
and Business Source Complete database.

Customer satisfaction is most popularly defined based on fulfillment of

customer expectations - how the offered total product or service fulfils customer
expectations (Gerson 1993, Hill 1996, Oliver 1997, Vavra 1997). A comprehensive
definition is given by Oliver (1997) -Satisfaction is the consumers fulfillment
response. It is a judgment that a product or service feature, or the product or service
itself, provided (or is providing) a pleasurable level of consumption-related
fulfillment, including levels of under- or overfulfillment. Definitions of customer
satisfaction may vary with regard to the object focus and the level of specificity,
including satisfaction with a product or service; a purchase decision experience; a
performance attribute; a consumption-use experience; a department or store of the
business organization; or a pre-purchasing experience (Yi, 1991). The importance of
customer satisfaction is that it constitutes the most reliable market information. It can
be translated into a number of measurable parameters to indicate as main performance
indicator. It becomes a baseline standard of performance and a possible standard of
excellence for any business organization (Gerson, 1993). Therefore customer
satisfaction measurement is considered as the most reliable feedback, since it provides
in an effective, direct, meaningful and objective way the customers preferences and
expectations. 1

Recent researches identified various dimensions on service quality attributing to

the customer satisfaction in fast-food industry, and related to perceived value then
eventually to customers behavioral intention. Ryu, Han (2010) examined the three
determinants of quality dimensions (predictors) in quick-casual restaurants - food,
service, physical environment, and found that all were significant determinants. In
addition, perceived price acted as a moderator in the customer satisfaction formation
process, which is indeed a significant predictor of behavioral intention. 2 Later on,
Ryu, Lee, Kim (2012) added that the quality of the physical environment in addition
to food and service was also significant determinants of restaurant image and also
significant predictors of customer perceived value.3 Qin, Prybutok (2009) proposed
that from the customers point of view, there are five significant dimensions of service
quality in a fast-food restaurant: tangibles, reliability/responsiveness, recovery,
assurance, and empathy. Service quality and food quality were two main determinants
of customer satisfaction.4 Oyewol (1999) analysed 10 dimensions made up of 57
different attributes. The 10 dimensions were: frequent, less frequent, and more

1
Evangelos Grigoroudis, Yannis Siskos (2010) : Customer Satisfaction Evaluation:
Methods for Measuring and Implementing Service Quality, Springer London
2
Kisang Ryu, Heesup Han (2010) Influence of the Quality of Food, Service, and
Physical Environment on Customer Satisfaction and Behavioral Intention in Quick-
Casual Restaurants: Moderating role of perceived price, Journal of Hospitality &
Tourism Research August 2010 vol. 34 no. 3,310-329
3
Kisang Ryu, HyeRin Lee, Woo Gon Kim, (2012) "The influence of the quality of
the physical environment, food, and service on restaurant image, customer perceived
value, customer satisfaction, and behavioral intentions", International Journal of
Contemporary Hospitality Management, Vol. 24: 2, pp.200 - 223

4
Hong Qin, Victor R. Prybutok, (2009) "Service quality, customer satisfaction, and
behavioral intentions in fastfood restaurants", International Journal of Quality and
Service Sciences, Vol. 1: 1, pp.78 95
frequent patrons, managerial implications of these findings, for market segmentation,
targeting, positioning, and promotional strategies.5

In USA, Min, Min (2011) revealed that taste of food is still considered the most
important service attribute to the fastfood restaurant customers' impressions of
service quality over a long time. Also, the overall customer satisfaction correlated
with its wordofmouth reputation, and customers tended to favor easily accessible
and national fastfood restaurant franchises than less accessible, relatively new, and
regional counterparts.6

In China, Qin, Prybutok, Zhao (2010) further examined the relationship

between customer satisfaction and behavioral intentions in the mainlands fast food
industry. The study found that reliability, recoverability, tangibles, and responsiveness
were all significant dimensions of perceived service quality. And food quality,
perceived value and service quality all had a direct and positive relationship with
satisfaction, which in turn influenced behavioral intentions.7

In Hong Kong, Ngie, Rosenberger lll , George (2014) observed that the current
service quality models in local fast-food restaurant were primarily designed on the
basis of fast service and standardized fast-food service process. They were ineffective
in enhancing repurchase intentions. The study proposed a new service-quality model -
an Employee-Centric SKIP-based (Service, Knowledge, Information, Process) model,
to enhance customer satisfaction and then retention in turn. The model incorporated a
focal point of customization and innovativeness which could improve competitive
advantage in the Hong Kong fast-food restaurant context.8 Similarly, Lai (2014)

5
P Oyewole (1999) Multi-attribute dimensions of service quality in
the fast food restaurant industry- Journal of Restaurant & Foodservice
Marketing, Vol. 3: 3-4
6
Hokey Min, Hyesung Min, (2011) "Benchmarking the service quality of fastfood
restaurant franchises in the USA: A longitudinal study", Benchmarking: An
International Journal, Vol. 18: 2, pp.282 - 300

7
Hong Qin, Victor R. Prybutok, Qilan Zhao, (2010) "Perceived service quality in fast
food restaurants: empirical evidence from China", International Journal of Quality &
Reliability Management, Vol. 27: 4, pp.424 - 437
8
Kenneth Lui-Ming Ngie, Philip J. Rosenberger lll & Allen George (2014) A new
service-Quality Model to enhance customer retention in the Hong Kong Fast-Food
Restaurant Industry, Conference Proceeding : The 47th Academy of Marketing
Conference, At Bournemouth, England
evaluated the roles of perceived value, customer satisfaction, and affective
commitment as they mediate the effect of service quality on customer loyalty at Hong
Kongstyle tea restaurants, which are quick-service restaurants with a fusion menu of
Western and Asian foods. The study found that: (1) service quality positively
influences perceived value, customer satisfaction, and customer loyalty; (2) perceived
value is a mediator of the relationship between service quality and customer
satisfaction; (3) customer satisfaction positively influences affective commitment and
customer loyalty; and (4) affective commitment is a mediator of the relationship
between customer satisfaction and customer loyalty. Contrary to expectations,
however, perceived value does not have a significant effect on customer loyalty for
these restaurants. This study highlights the role of affective commitment in the study
of service quality, and also is one of the few that addresses Asian restaurants because
it demonstrates the moderating effects of culture in the relationships between Hong
Kongstyle tea restaurants and their customers.9

From the above literature review, the most significant dimensions of service
quality are food, service and physical environment. All these determinants may lead
positively to perceived value. However perceived value may or may not necessarily
lead to behavioral intention or customer loyalty. Specifically for the Hong Kong
context, customization and innovation may possibly be considered to improve
competitive advantage in order to promote repurchase intention or customer loyalty.
An exploratory research study is therefore proposed to examine the validity and
possible application of this approach for Caf de Coral Fast Food restaurants.

c.) Identify the factors that contribute to the process of research project
selection.

The research project is considered to be feasible to undertake, after considering

the following factors contributing to the process of research project selection - access
to data, validity and reliability of the data, time constraints, control of variables and
ethical issues.

Data required for this research include primary and secondary sources of data.
Primary source will be questionnaire and direct observation at shops located nearby
and they are readily accessible three shops are within 10 minutes of walking
distance. As in-store interview with customers may require permission by shop
9
Ivan K. W. Lai (2014) The Roles of Value, Satisfaction, and Commitment in the
Effect of Service Quality on Customer Loyalty in Hong KongStyle Tea Restaurants,
Cornell Hospitality Quarterly, December 1, 2014
manager, the questionnaire will be conducted just outside the shop in the shopping
mall, as customers are leaving the shop after eating. Secondary source of data such as
official caf de Coral website, annual report and other research papers relevant to the
research objectives are also available on internet and electronic database.

Validity and reliability of these data are also of good quality, as most data sources
are from less than 5 years (2009 -2014) and from text books, conference proceedings
international journal and magazines, all of high standing within the business sector.

Validity of questionnaire affects the research consequences. Validity is the content

of test measure what we actually wish to measure, pre test-ting ensures the
questionnaire are sent to the target respondents before taking the test to find some
mistakes or errors of those questions, thus affecting the validity of the experiment. So
when they testing it must be done before widely distributing the questionnaire to
ensure the validity of the experiment.

Reliability is the degree to which the measure supplies consistent results the
stability or consistency with which we measure something. For the questionnaire, one
sample using to ensure the consistency of answer collection. Also, collection of data
is in standardized form. Unifying the questionnaire questions for respondents to
answer makes the result more reliable.

The time available is a major challenge for this research project, mainly about
the time to conduct literature search and gathering questionnaire responses. It is very
tight but still achievable.

Ethical issues relate to approaching customers for questionnaire interview,

privacy and manner can be handled sensibly and respectfully to ensure a smooth and
successful data collection. A short introduction of this research for academic study is
essential when approaching the customers.

d.) Produce a research project specification.

Literature review of key references was conducted on Google scholar using keywords
containing customer satisfaction, fast food, dimension of service quality.
e.) Provide an appropriate plan and procedures for the agreed research
specification.
KEY DATES:
1. Dec 30th Submit proposal to tutor.
2. Jan 5th begin fieldwork.
3. Jan 14th complete fieldwork.
4. Jan 19th complete draft and hand in.
5. Jan 23rd final submission.

Reference

1
Evangelos Grigoroudis, Yannis Siskos (2010) : Customer Satisfaction Evaluation:
Methods for Measuring and Implementing Service Quality, Springer London
Hong Qin, Victor R. Prybutok, (2009) "Service quality, customer satisfaction, and
behavioral intentions in fastfood restaurants", International Journal of Quality and
Service Sciences, Vol. 1 Iss: 1, pp.78 95

2
3

4 Kisang Ryu, Heesup Han (2010) Influence of the Quality of Food, Service, and
Physical Environment on Customer Satisfaction and Behavioral Intention in Quick-
Casual Restaurants: Moderating role of perceived price, Journal of Hospitality &
Tourism Research August 2010 vol. 34 no. 3,310-329

Hong Qin, Victor R. Prybutok, Qilan Zhao, (2010) "Perceived service quality in fast
food restaurants: empirical evidence from China", International Journal of Quality &
Reliability Management, Vol. 27 Iss: 4, pp.424 - 437

Hokey Min, Hyesung Min, (2011) "Benchmarking the service quality of fastfood
restaurant franchises in the USA: A longitudinal study", Benchmarking: An
International Journal, Vol. 18 Iss: 2, pp.282 - 300

Kenneth Lui-Ming Ngie, Philip J. Rosenberger lll & Allen George (2014) A new
service-Quality Model to enhance customer retention in the Hong Kong Fast-Food
Restaurant Industry, Conference Proceeding : The 47th Academy of Marketing
Conference, At Bournemouth, England

Ivan K. W. Lai (2014) The Roles of Value, Satisfaction, and Commitment in the Effect of
Service Quality on Customer Loyalty in Hong KongStyle Tea Restaurants, Cornell Hospitality
Quarterly1938965514556149, first published on December 1, 2014