Customer Satisfaction in Hospitality Industry

I. PROPOSED TITLE
“Customer Satisfaction of Mcdonalds in Halang, Calamba City Laguna”

II. TENTATIVE STATEMENT OF THE PROBLEM

Restaurant customers are different that the meal being served should cater to many type of client possible to maximize sales and profit. Various factors that will contribute to increased benefaction and income are food preference by age, gender, income and appreciation factor like texture, aroma and taste.

Therefore, this study analyzed how menu planning satisfies the customers of Mcdonalds in Halang, City of Calamba Laguna.

Specifically, this study aimed to answer the following problems: 1. What is the demographic profile of the customer of the Mcdonalds in terms of:
1. age; and
2. gender
2. What is the level of customer satisfaction of Mcdonalds in terms of:
A. Appreciation factor
2.1a. taste
2.2a. presentation
2.3a. aroma
B. Customer satisfaction
2.1b. price
3. Is there significant differences?
3.1 between male and female respondents in terms of appreciation factor and customer satisfaction. 3.2 among age groups (teenagers 15-19, young adults 20-29, adults 30 onwards) in terms of appreciation factor and customer satisfaction.

III. INTRODUCTION

Filipinos are known to be food lovers. Food is linked with its culture and tradition. In Filipino family, food accounts for 43 percent of total expenditure (Palma, 2005).

It has been a part of the Filipino culture to dine out during work breaks and when celebrating different occasions. More so, eating has a lucrative business. Food is a brisk business in the Philippines. Women traditionally do the cooking in Filipino households; however most of them are already preoccupied with work-related concerns, thus they buy cooked food, have it delivered or they dine out. Because of today’s fast-paced lifestyle, ready-to-cook and ready-to-eat meals have become greatly in demand. One of the fast developing and expanding industry in the Philippines is the food service industry. The food service industry is sought after by a growing number of people who want to have filling meals in the shortest time and at the most reasonable price. The total market in 2000 for the fast food segment was over Php30 billion (Palma, 2005).

Due to customers’ increased quality consciousness, retailers are now mindful of providing high quality food, which conforms to the taste of the consumers, as well as the speed and efficiency of service in a clean environment. The high rate of competition has made these factors necessary for the growth of the retail food industry (Palma, 2005).

Getting involved into the food service business requires knowledge of principles of management. Food can affect the health of the consumers. The owner of manager must ensure the quality of food being served to its customers. Considerations are made on the menu planning, quantity production, food pricing, sanitations of area and preparation procedures. Honest and prompt service should be included in the priority plans of the owner. Menu planning as one of the basic component of a food service industry is defined as the scheduling of meals to be served. A properly designed menu can bring higher customer satisfaction and improved sales and income in favor of the clients as well as business operator. Customer satisfaction is a measure of how products and services supplied by a company meet or surpass customer expectation. It is seen as a key performance indicator within business and is part of the four of a Balanced score card. Organizations need to retain existing customers while targeting non-customers (John, 2003).

Measuring customer satisfaction provides an indication of how successful the organization is at providing products and/or services to the marketplace. Customer satisfaction is an abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service. The state of satisfaction depends o a number of both psychological and physical variables which correlate with satisfaction behaviors such as return and recommend rate. The level of satisfaction can also vary depending on the other factors the customer, such as other products against which the customer can compare the organization’s products.

In the restaurant industry, customer satisfaction is very essential to have repeat business. Because food is a fundamental component of the restaurant experience, there can be no doubt that the food has, and will continue to have, a major impact on consumer satisfaction and return patronage. A crucial challenge facing restaurant industries today is to provide quality food that is not only compelling for the customers but also can be superior to business competitors. Hence, quality food is one of the best means to maximize success in the restaurant business. The service quality is an attitude or global judgment about the superiority of a service. To be globally competitive, service industries must achieve a quality service that exceeds the customers’ expectations. Service quality determines an organization’s success or failure. Ensuring customer satisfaction, which has been the measure of success, is the prime concern of any conceivable business.

McDonald’s is the largest chain of fast food Corporation in the world, has become a global most valuable brands. The business began in 1940, with a restaurant opened by siblings Dick and Mac McDonald in San Bernardino, California. Is the world’s largest chain of hamburger fast food restaurants, serving more than 58 million customers daily. In addition to its signature restaurant chain, McDonald’s Corporation held a minority interest in Pret A Manger until 2008, was a major investor in the Chipotle Mexican Grill until 2006. And owned the restaurant chain Boston Market until 2007. It employed more than 418000 people in the world.

A McDonald’s restaurant is operated by either a franchisee, an affiliate, or the corporation itself. The corporation’s revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald’s revenues grew 27% over the three years ending in 2007 to $22.8 billion, and 9% growth in operating income to $3.9 billion. McDonald’s primarily sells hamburgers, cheeseburgers, chicken products, french fries, breakfast items, soft drinks, shakes, and desserts. In response to obesity trends in Western nations and in the face of criticism over the healthiness of its products, the company has modified its menu to include alternatives considered healthier such as salads, wraps and fruit. Its success is based on selling quality products cheaply and quickly. (www.studymode.com, 10 February 2013)

IV. REVIEW OF RELATED LITERATURE
Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service. The state of satisfaction depends on a number of both psychological and physical variables which correlate with satisfaction behaviors such as return and recommend rate. The level of satisfaction can also vary depending on other options the customer may have and other products against which the customer can compare the organization’s products. (www.wikipedia.com, 10 February 2013)

CUSTOMER SATISFACTION DEFINED

Customer satisfaction, a term frequently used in marketing, is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as “the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals.” In a survey of nearly 200 senior marketing managers, 71 percent responded that they found a customer satisfaction metric very useful in managing and monitoring their businesses. (www.wikipedia.com, 10 February 2013)

“Within organizations, customer satisfaction ratings can have powerful effects. They focus employees on the importance of fulfilling customers’ expectations. Furthermore, when these ratings dip, they warn of problems that can affect sales and profitability. . . These metrics quantify an important dynamic. When a brand has loyal customers, it gains positive word-of-mouth marketing, which is both free and highly effective.”

Therefore, it is essential for businesses to effectively manage customer satisfaction. To be able do this, firms need reliable and representative measures of satisfaction.

“In researching satisfaction, firms generally ask customers whether their product or service has met or exceeded expectations. Thus, expectations are a key factor behind satisfaction. When customers have high expectations and the reality falls short, they will be disappointed and will likely rate their experience as less than satisfying. For this reason, a luxury resort, for example, might receive a lower satisfaction rating than a budget motel—even though its facilities and service would be deemed superior in ‘absolute’ terms.” (www.wikipedia.com, 10 February 2013)

MEASURE CUSTOMER SATISFACTION
Customer satisfaction is essential to any business. If your customers are satisfied they are more likely to purchase more from you or from you more often. Measuring customer satisfaction provides an indication of how successful the organization is at providing products and/or services to the marketplace. So, how do you measure your customer satisfaction? And how can you increase your customer satisfaction?

Like any other aspect of your business that you want to improve, you first have to measure it. You can’t manage what you don’t measure. Without an appropriate measurement you have no way of knowing whether you are getting better or worse.

One of the best ways to measure your customer satisfaction is with a Customer Satisfaction Survey. As you design your customer satisfaction survey, remember to stay focused on the issues that will have the biggest impact.

Many factors have an impact on customer satisfaction and loyalty. You don’t have enough resources to attack all the problem areas. Key Driver Analysis tells you what is most important to your customers and where to spend your money for the greatest impact so you can take action. As you do the Key Driver Analysis, don’t lose sight of your business strategy. There are a small number of factors that you need to keep everyone focused on, your Key Performance Indicators (KPI).

And finally, don’t forget that Keeping Score Isn’t Winning. The important thing is to keep your customers satisfied to keep your business healthy and growing. (F. John Reh, 2013)

INCREASE CUSTOMER SATISFACTION

Once you have established your benchmark of customer satisfaction, you need to start working to improve it.

The first step is to get everyone on your team to understand that they are in the customer service “department” regardless of where in the company they work. You may want to print out and post this list of Customer Management Tips for them. Next, they all need to understand that Guaranteed Customer Satisfaction is not just the goal, but that it is achievable and essential. And while it is essential, Good Customer Service Is No Longer Enough.

Finally, as you work to understand what is important to your customers, you need to understand that it is equally important to “Listen To What They Are Not Saying.” (F. John Reh, 2013)

CUSTOMER SERVICE BASICS

Servicing a customer is a part of every purchase and interaction with internal and external contacts. It can last a few seconds up to hours. So if we all do it and experience it everyday in almost everything we do, why isn’t good customer service the norm? We all have stories about when we were treated exceptionally well or extremely poorly. We tend to share these extraordinary stories with others. We all know that word of mouth marketing can be the absolute best advantage, or the worst drawback for a company. Warren Buffett said it best: “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently. “ (Barb Lyon, 2009) IMPORTANCE OF CUSTOMER SERVICE IN HOSPITALITY INDUSTRY

Customer service is of critical importance for the tourism and hospitality sector now more than ever before as customers are looking to increase value for money and are less forgiving of mediocre service. However, despite its importance, quality customer service is the exception rather than the norm in many parts of the world.

Customer Service for Hospitality and Tourism is a unique text and vital to both students and practitioners as it explains not only the theory behind the importance of customer service but also acts as a guidebook for those wishing to put this theory into practice. In essence it is the ‘whys’ and ‘hows’ of customer service.

It is easy to read, very current, and full of references to all the latest research from both academic and practitioner literature. Chapters cover important topics such as the financial and behavioral consequences of customer service, consumer trends influencing service, developing and maintaining a service culture, managing service encounters, the importance of market research, building and maintaining customer relationships, providing customer service through the service scape, the impact of technology on customer service, the importance of service recovery, and promoting customer service internally and externally. (Simon and Louis Hudson, 2012)

The customer is important because without the customer most businesses would not exist. Potential customers often have many choices for places and services in/on which to spend their hard-earned money, and they will reward a good experience by both returning as well as, hopefully, telling their friends and associates about it, thus bringing the business more customers. Unless a company values its customers and treats them accordingly, those customers will leave and go elsewhere.

The exceptions here are companies which have a monopoly or other compelling reason for people to use them, such as a key location or pricing no one else can match. In this case, unfortunately (as evidenced by countless examples) such companies can treat their customers with disregard and still be rewarded with repeat business. (www.answers.com, 10 February 2013)

Benefits

Under-promise and over-deliver should be the mantra for every successful hotelier, who should be attentive and passionate about customer needs. If you satisfy a customer’s needs, you are building the foundation to establish a relationship based on trust and loyalty. All these factors collectively contribute to customer loyalty and retention which are integral for success in this industry.

Feedback

Always be open to suggestions. Understand what your customers expect from you. Place a suggestion box in your hotel reception, café, air travel or tourism office so you can gather feedback from your customers. Further, don’t just gather customer recommendations, act upon them to show that you really care and want their business. It is essential to understand the importance of customer service in hospitality to make a positive difference to the business by listening and learning.

Prompt Service

You may provide the best service, but if you are not fast enough, you may lose an important customer and several other referrals. Always remember if you do not give your customer what he is looking for, he will knock on other doors until someone else will. Learn how to constantly innovate to meet high expectations and provide good service. The customer should be the center of your universe and your services should be designed around him.

Convenience

The hospitality industry thrives on convenience. If your customer service is missing this essential ingredient, your business won’t last long unless you bring about changes that demonstrate your commitment to customer satisfaction. Remember that the service and hospitality industries were built to offer the basics of convenience to customers. Today, as the industry is expanding and the competition is growing, hotel conglomerates are getting innovative and thinking of means to achieve the highest standards in convenience offerings.

Value

The importance of customer service in hospitality emanates from the principle that the customer needs to be treated with priority, and he should see value in what he gets. If a customer strongly believes he is getting value for the money he is paying, he will keep coming back. On the contrary, dissatisfaction with your customer service will make him turn back and look for value offerings from your competition. (Kidwai, 2013)

RELATED STUDIES

According to Guantes, Custodio and Cartagena (2003), the menu is the focal point of any foodservice operation because it influences all aspect of foodservice. Furthermore, they believed that the customer must be viewed as the most important component of any foodservice establishment. The customer’s choice of food is affected by their personal preferences and habit, ethic tradition, availability, convenience, economy and nutritional value of food.

Other factors that they found out to have an menu planning include the facilities, styles of service and type of menu patterns.

The work done by Austria, et al (2004) entitled “Customer Satisfaction on Food and Beverage Service of Paseo Uno in Mandarin Oriental Hotel, Manila”, satisfying customer is a great challenge to every restaurant business as well as getting to know the customer profile. The study include that the customer of Paseo Uno were mostly moderately satisfied on the f&b service because such were able to meet their expectation but not exceed what they expected.

The study entitled “Customer Satisfaction of Kenny Rogers Roasters in Festival Supermall Alabang, Muntinlupa City” by Salazar, et al (2011) imparts that restaurants should maintain the appreciation factor to obtain regular customers and more menu items that appeal to customer. They also mentioned that Kenny Rogers Roasters should also set prices that are reasonable and suitable to the budget of its customers. Such measures if implemented may help Kenny Rogers Roasters stay competitive in the food service industry.

SYNTHESIS

To sum it up, it is said that it is essential for businesses to effectively manage customer satisfaction. To be able do this, firms need reliable and representative measures of satisfaction.

In researching satisfaction, firms generally ask customers whether their product or service has met or exceeded expectations. Thus, expectations are a key factor behind satisfaction. When customers have high expectations and the reality falls short, they will be disappointed and will likely rate their experience as less than satisfying.

Once you have established your benchmark of customer satisfaction, you need to start working to improve it. The customer is important because without the customer most businesses would not exist. Potential customers often have many choices for places and services in/on which to spend their hard-earned money, and they will reward a good experience by both returning as well as, hopefully, telling their friends and associates about it, thus bringing the business more customers. Unless a company values its customers and treats them accordingly, those customers will leave and go elsewhere.

In addition according to Guantes, Custodio and Cartagena (2003), the menu is the focal point of any foodservice operation because it influences all aspect of foodservice. Furthermore, they believed that the customer must be viewed as the most important component of any foodservice establishment. The customer’s choice of food is affected by their personal preferences and habit, ethic tradition, availability, convenience, economy and nutritional value of food. Also another work done by Austria says that satisfying customer is a great challenge to every restaurant business as well as getting to know the customer profile.

V. THEORETICAL FRAMEWORK

VI. CONCEPTUAL FRAMEWORK

The first component of the conceptual framework of the study is independent variable. This is the profiling of intervening variable with the use of questionnaire which serves as the basis of planning the menu. Information on the personal background of the respondents in terms of age, gender, and income level determine if the menu will offer response to customer satisfaction in terms of food habits and preferences are related consideration too often menu planners are influence by their own likes of foods and food combinations rather than those of the customer. (Santos et al 2008).

The second component of the conceptual framework is dependent variable. The questionnaire and interviews will be used to determine the level of satisfaction of the customers in the area of price and appreciation factors. These areas can affect the level of satisfaction and expectation of the customers but may not to exceed their level of expectations. Aesthetic factors such as color, texture, shape, flavor and method of preparation are other factors to consider in planning menus. Balance should be maintained among flavors. Food of the same or similar flavor generally should not be repeated in a meal. Combination of food using different methods of preparation can add variety to the menu. Foods prepare in the same manner generally should not be serve (Santos et al 2008).

The third component of the conceptual framework is intervening variable. Data and information about the customers profile in terms of age, gender and income will be included in the questionnaire. The customer’s choice of food is affected by their personal expectation and satisfaction. Personal perceptions of food customers do affect their satisfaction.