A

Advanced Research (Lab) Report

Submitted for partial fulfilment of requirement for the award of

degree of
Master of Business Administration

Of
BHILAI INSTITUTE OF TECHNOLOGY, DURG (C.G.)
(An Autonomous Institution)

Batch 2020-22

Submitted by

Name of the student: Monika Varade

Univ. Roll No: 500107620047
Enrollment No: BK0179
MBA III Semester (Section- ‘A’)

DEPARTMENT OF MANAGEMENT

BHILAI INSTITUTE OF TECHNOLOGY

(Seth Balkrishan Memorial), (Accredited by NBA – AICTE)

(An ISO 9001:2000 Certified Institute), Bhilai House, Durg – 491001 (C.G)
 Table of Content
Abstract.............................................................................................................................................2
Introduction.......................................................................................................................................2
Literature Review..............................................................................................................................3
 Definition of Terms...............................................................................................................3
 Service Concept....................................................................................................................3
 Service Quality......................................................................................................................5
 SERVQUAL.........................................................................................................................8
 Customer satisfaction............................................................................................................8
 Relationship between Service Quality and Customer Satisfaction.....................................10
 Customer loyalty.................................................................................................................10
 Conceptual Framework.......................................................................................................11
Research Methodology...................................................................................................................11
 Method of data collection...................................................................................................11
 Procedure of Data Collection..............................................................................................12
 Method of Data Analysis....................................................................................................12
Data Presentation And Interpretation..............................................................................................12
 Demographic Analysis of Respondents..............................................................................13
 Reliability analysis test.......................................................................................................14
 Pearson Correlation analysis...............................................................................................17
 Multiple Regression Analysis.............................................................................................18
Summary, Conclusion And Recommendations..............................................................................21
 Summary of Findings..........................................................................................................21
 Conclusions.........................................................................................................................22
 Recommendations...............................................................................................................22
References.......................................................................................................................................24
Appendix .......................................................................................................................................25

Page | 1
 1. ABSTRACT

The purpose of the study is to investigate service quality and its impact customer satisfaction in
restaurant industry in Bhilai. And also examines that how different levels of service quality affects
the customer loyalty and its perception according to the particular restaurant. Different service
dimensions have been studied for this purpose. Respondents are chosen from different demographics
using random sampling. To attain this objective, questionnaire was designed categorized under five
dimensions of the SERVEQUAL model. The sample consists of 60 respondents selected based on
convenience sampling procedure. This study used quantitative research design and both primary and
secondary data. The collected data was analyzed with the help of SPSS. Correlation and multiple
regressions were used to investigate the relationship between dependent and independent variables.
The correlation results indicate that there is a positive correlation between the dimensions of service
quality and customer satisfaction. The results of the regression test showed that offering quality
service have positive impact on overall customer satisfaction. And also the highest correlation is
between responsiveness and customer satisfaction followed by reliability.

Key words: Tangibility, Reliability, Responsiveness, Assurance, Empathy, Service quality

Customer satisfaction.

2. INTRODUCTION

In today highly competitive environment the restaurant industry is fast growing industry in every
country of the globe. So in order to provide best food and best quality service the industry should
make efforts to make the service quality a benchmark for every customer to gain the competitive
advantage in the restaurant market. Even there is also the need of service quality in all sectors of
business. So these studies are purely based on the service quality measures and techniques to makes
customer happy and retain the customer to maximize the profitability. Customer satisfaction is a key
to the growth and sustainability of business in modern competitive era. It's significant how
organizations can meet or outperform their customers' guidelines. The determinants of customer
satisfaction and loyalty are of focal significance to the board research. Over the previous many years,
research has indicated expanding interest in inspecting how customers see administration quality and
how organizations can convey quality true to form by the customers. Studies additionally dissected

Page | 2
the norm of service in various manners. For instance, quite possibly the most well-known
methodologies embraced in the prior examination (and the contemporary exploration) is
SERVQUAL (see Parasuraman, Zeithaml, and Berry, 1988), which takes a glimpse at service quality
from the parts of dependability, responsiveness, substance, affirmation, and compassion.

3. LITERATURE REVIEW

 Definition Of Term :-
 Conceptual Definition: - Variables conceptual definitions are presented as follows;
Tangibility: physical facilities, equipment, and appearance of personnel. Reliability:
ability to perform the promised service dependably and accurately. Responsiveness:
willingness to help customers and provide prompt service. Assurance: knowledge and
courtesy of employees and their ability to inspire trust & confidence. Empathy: caring
individualized attention the firm provides to its Customers Zeithaml et al.(1990).

 Service Quality: - The term refers to degree and direction of discrepancy between the
consumer’s perceptions and expectations, or the extent to which a service meets or
exceeds customer expectations Parasuraman et al.( 1988).

 Customer Satisfaction: - Customer satisfaction is defined as the result of a cognitive

and affective evaluation, where some comparison standard is compared to the actually
perceived performance (Kumar, 2008).

 Service Concept: -

 Definition: - According to Kotler and Armstrong (2012), “service can be defined as

economic activities that produce time, place, form, or psychological utilities”. Many
service firms have become successful by identifying a previously unrecognized or
unsatisfied customer wants. (Messay, 2012) stated “services are identifiable, intangible
activities that are the main object of a transaction designed to provide want satisfaction
to customers”. (Messay, 2012) also stated that the travel, hospitals, finance,
entertainment, health care communications, utilities and professional services fields
are prime examples. Recognizing the importance of marketing, many of these
industries and organizations within them are now adding marketing-related personnel.

Page | 3
 According to (Kotler, 2012) “services are growing ever faster in the world economy,
marketing up a quarter of the value of all international trade”. A service is an act or
performance that one partly can offer to another that is essentially intangible and
doesn’t result in the ownership of a thing. Its production may or may not be tied to a
physical product. (Kotler, 1998).

 Characteristics of Service: - According to Bitner et al. (1993) service has four

characteristics: intangibility, inseparability, heterogeneity and perish ability.

a) Intangibility of Services: - (Regan, 1963). Introduced the idea of services

being activities, benefits or satisfactions which are offered for sale or provided
in connection with the sale of goods. The degree of intangibility has been
suggested as a means of differentiating tangible products with services. Most
of the time, services are explained as being intangible since their outcome is
considered to be an action rather than a physical product highlight the fact that
the degree of tangibility has implications for the ease with which consumers
can evaluate services and products.

b) Inseparability of Services: - Inseparability is taken to show the simultaneous

delivery and consumption of services and it is believed to enable consumers to
affect or shape the performance and quality of the service (Zeithmal et al.
1985).

c) Heterogeneity of Services: - Heterogeneity reveals the degree of high

variability in service delivery. This is a particular problem for services with
high labor involvement, as the service performance is delivered by different
people and the performance of people can vary from day to day and also
from person to person. Besides, it offers the opportunity to provide high degree
of flexibility and customization of the service and this can be used as a benefit
and point of differentiation (Wolak et al., 1998).

d) Perish ability of Services: - The notion of perish ability reflects services

cannot be stored and carried forward to a future time period and suggest that
services are time dependent and time important which make them very
perishable. The issue of perish ability is primarily the concern of the service
producer and that the consumer only becomes aware of the issue when there is

Page | 4
 insufficient supply and they have to wait for the service (Bitner et al.,1993).

 Service Quality: -

In today’s increasingly competitive business environment, service quality is essential for

the success of any organization. Service quality is important aspect that affects the
competitiveness of business. Restaurant should always increase the quality of service
continuously since there is no assurance that the current outstanding service will be suitable
for future.

Service quality is considered an important tool for a firm’s struggle to differentiate itself
from its competitors (Ladhari, 2009). The relevance of service quality to companies is
emphasized especially the fact that it offers a competitive advantage to companies that
strive to improve it and hence bring customer satisfaction. The challenge in defining
service quality is that it is a subjective concept, like beauty. Everyone has a different
definition based on their personal experiences. It has also received a great deal of attention
from academicians, practitioners and services marketing literature, service quality is
defined as the overall assessment of a service by the customer. Researcher points out that,
by defining service quality, companies will be able to deliver services with higher quality
level presumably resulting in increased customer satisfaction. Understanding service
quality must involve acknowledging the characteristics of service which are intangibility,
heterogeneity and inseparability. In that way, service quality would be easily measured
(Negi et al., 2009).

(Crosby, 1984) Defined quality as conformance to requirements. This definition implies

that organizations must establish requirements and specifications. Once these requirements
and specifications are established, the quality goal of the various functions of an
organization is to comply strictly with them. Quality also defined from different point of
views, from customer point of view quality means fitness for use and meeting customer
satisfaction and from process point of view it means conformance with the process design,
standards and specifications. Quality may also be defined as the degree of excellence at an
acceptable price from product point of view and from the cost point of view it means best
combination between costs and features. A solid foundation in defining and measuring
service quality was emanated in the mid-eighties by (Gronroos, 1984) and (Parasuraman et
al. 1985). They were amongst the earliest scholars laid down the foundation for the

Page | 5
definitions as well as development of service quality. Service quality defined as the degree
and direction of discrepancy between consumer’s perceptions and expectations in terms of
different but relatively important dimensions of the service quality, which can affect their
future purchasing behavior. This definition clearly shows that service quality is what
customers‟ assess through their expectations and perceptions of a service experience.
Customers‟ perceptions of service quality result from a comparison of their before-service
expectations with their actual service experience. Service quality is based on a comparison
between what the customer feels should be offered and what is provided (Parasuraman et
al., 1985).

If the customer’s expectations are meeting or exceeded, then the company is perceived to be
offering higher service quality. But if on the other hand, if the expectations of the
customers are not meet, the company is on its way not only to face displeased and hostile
customers, which in turn leads to defection to competitors. Customer’s expectation serves
as a foundation for evaluating service quality because, quality is high when performance
exceeds expectation and quality is low when performance does not meet their expectation.
Expectation is viewed in service quality literature as desires or wants of consumer that is,
what they feel a service provider should offer rather than would offer (Parasuraman et al.,
1988).

Perceived service is the outcome of the consumer’s view of the service dimensions, which
are both technical and functional in nature (Gronroos, 1984) and (Parasuraman et al, 1988)
define perceived quality as a form of attitude, related but not equal to satisfaction, and
results from a consumption of expectations with perceptions of performance. Therefore,
having a better understanding of consumers attitudes will help to know how they perceive
service quality in restaurant and respond accordingly.

The service process as well as the service outcome will contribute quality evaluations. As
stated by (Gronroos, 1982) there are two types of service quality these are technical quality
and functional quality. Technical quality is what the customer is actually receiving from the
service (outcome) while functional quality is the manner in which the service is delivered
(process). It is likely to be much more effective to tell a service contact employee what
specific attributes service quality includes, such as responsiveness. Management can say, if
we can improve our responsiveness, quality will increase” (Asubonteng et al, 1996).

 Service Quality Dimensions: -“Service's unique characteristics of intangibility,

Page | 6
heterogeneity, and inseparability lead them to possess high levels of experience and
credence properties, which, in turn, make them more difficult to evaluate than
tangible goods” (Bitner and Zeithaml 1985). “Identification of the determinants of
service quality is necessary in order to be able to specify measure, control and
improve customer perceived service quality” (Johnston, 1995).

SERVQUAL “is a concise multiple-item scale with good reliability and validity
that researcher can use to better understand the service expectations and perceptions
of consumers and, as a result, improve service” (Parasuraman et al., 1988).
SERVQUAL was also selected since it is important when it is used occasionally to
track the service quality trends, and when it is used in combination with other forms
of service quality instrument (Parasuraman et al.1985).

Parasuraman et al, (1985) identify ten determinants for measuring service quality
which are tangibility, reliability, responsiveness, communication, access,
competence, courtesy, credibility, security, and understanding/knowledge of
customers. Later these ten dimensions were further purified and developed into five
dimensions i.e. tangibility, reliability, responsiveness, assurance and empathy to
measure service quality “SERVQUAL” Parasuraman et al. (1988). These five
dimensions identified as follows:

a) Tangibility: - It refers to physical facilities, equipment, and appearance of

personnel.

b) Reliability: - It means ability to perform the promised service dependency

and accurately. Reliability is a significant factor of product quality in
addition to good personal service, staff attitude, knowledge and skills
(Walker, 1990).

c) Responsiveness:- means willingness to help customers and provide prompt

service. “Customers are very sensitive to employees' working environment
in service organizations” (Brown and Mitchell, 1993).

d) Assurance:- indicates knowledge and courtesy of employees and their

ability to inspire trust and confidence. (Parasuraman et al., 1988) found that
assurance is an important factor of service quality next to reliability and
responsiveness towards customer satisfaction.

Page | 7
 e) Empathy:-refers to caring, individualized attention the firm provides to its
customers ( Jabnoun and Al-Tamimi, 2003).

Measuring service quality has been one of the most persistent topics in
management literature. This is because the need to develop valid
instruments for the systematic evaluation of firms‟ performance from the
customer point of view; and the association between perceived service
quality and other key organizational outcomes, which has led to the
development of models for measuring service quality( Cronin et al., 2010).

 SERVIQUAL: -
For the purpose of measuring customer satisfaction with respect to different aspects of
service quality and to overcome problems which is created as a result of the gap between
management and customers, a survey instrument was developed by (Parasuraman,
Zeithmal and Berry in 1988). The instrument is called SERVQUAL. The basic assumption
of the measurement was that customers can evaluate a firm’s service quality by comparing
their perception with their experience. It is designed to measure service quality as perceived
by the Customer.

Though, the SERVQUAL model has been the major generic model used to measure and
manage service quality across different service settings and various cultural backgrounds, it
has been subjected to a number of theoretical and operational criticisms (Buttle, 1996).

 Customer Satisfaction: -
Customer satisfaction is a post-purchase evaluation of a service offering. A traditional
definition of customer satisfaction followed the dissatisfaction paradigm of consumer
satisfaction/dissatisfaction, suggesting that customer satisfaction/ dissatisfaction is the
result of interaction between the consumer’s pre-purchase expectations and post purchase
evaluation.
According to Rigopoulou et al. (2008) customer satisfaction is the state of mind that
customers have about a company when their expectations have been met or exceeded over
the lifetime of the product or service. Service companies have since recently focused on
customers in order to improve competitiveness. Customer satisfaction is one of the
important outcomes of marketing activity.
In the competitive restaurant industry, customer satisfaction is considered as the
fundamental of success. Satisfying customers is one of the main objectives of every

Page | 8
business. Businesses recognize that keeping current customers is more profitable than
having to win new ones to replace those lost since it cost the company a lot of money.
Management and marketing theorists emphasize the importance of customer satisfaction
for a business’s success (Kennedy and Schneider, 2000).
Good customer satisfaction has an effect on the profitability of nearly every business. For
example, when customers receive good service, each will typically tell nine to ten people.
However, customers who receive poor service will typically relate their dissatisfaction to
between fifteen and twenty others Naik et al. (2010). Therefore, customer satisfaction is an
asset that should be monitored and managed just like any physical asset.
The satisfaction judgment is related to all the experiences made with a certain business
concerning its given products, the sales process, and the after- sale service. Whether the
customer is satisfied after purchase also depends on the offer’s performance in relation to
the customer’s expectation. Customers form their expectation from past buying experience,
friends‟ and associates‟ advice, and marketers‟ and competitors‟ information and promises
(Kotler; 2010).
Higher customer satisfaction leads to greater customer loyalty which in turn leads to higher
future revenue. As a result, many market leaders are found to be highly superior- customer-
service orientated. They have been rewarded with high revenue and customer retention as
well. For that reason, organizations in the same market sector are forced to assess the
quality of the services that they provide in order to attract and retain their customers.
Because satisfied customers are a key to long-term business success (Zeithaml et al., 1996).
 Customer Satisfaction Measurement: - Customer satisfaction measurement
involves the collection of data that provides information about how satisfied or
dissatisfied customers are with a service. This information can be collected and
analyzed in many different ways. Many organizations regularly check the levels of
customer satisfaction to monitor performance over time and measure the impact of
service improvement.
Henley center headlight vision (Smith, 2007) states the research carried out in the
UK with public sector organizations suggests that there are five themes that are
likely to be relevant to all organizations in measuring customer satisfaction.
- Delivery of the service (how problems were handled, reliability, outcome.)
- Timeliness (waiting times, number of times contacted)
- Information (accuracy, enough information, kept informed)
- Professionalism (competent staff, fair treatment)

Page | 9
 - Staff attitude (friendly, polite, sympathetic)
 Satisfaction Measurement: - According to (Smith, 2007) Satisfaction measures
involve three psychological elements for evaluation of the product or service
experience: cognitive (thinking/evaluation), affective (emotional-feeling/like-
dislike) and behavioral (current/future actions).Customer satisfaction usually leads
to customer loyalty and product repurchase. But measuring satisfaction is not the
same as measuring loyalty.

 Relationship between Service Quality and Customer Satisfaction: -

(Kotler and Armstrong, 2012) advocate that satisfaction is the post-purchase evaluation of
products or services taking into consideration the expectations. Researchers are divided over
the antecedents of service quality and satisfaction.

Whilst some believe service quality leads to satisfaction, others think otherwise. The studies
of many researchers suggest service quality leads to customer satisfaction. To achieve a high
level of customer satisfaction, they suggest that a high level of service quality should be
delivered by the service provider as service quality is normally considered an antecedent of
customer satisfaction (Mesay, 2012).

As service quality improves, the probability of customer satisfaction increases. Quality was
only one of many dimensions on which satisfaction was based; satisfaction was also one
potential influence on future quality perceptions (Clemes, 2008).

Parasuraman et al (1988) defined service quality and customer satisfaction as follows:

Service quality is a global judgment, or attitude, relating to the superiority of the service,
whereas satisfaction is related to a specific transaction. Satisfaction is a post consumption
experience which compares perceived quality with expected quality, whereas, service quality
refers to a global evaluation of a firm's service delivery system” (Parasuraman et al., 1985).

Siddiqi (2011) described that all the service quality attributes are positively related to
customer satisfaction and customer satisfaction is positively related to customer loyalty.
Furthermore, Daniel O. Auka (2012) also stated that high quality of service will result in high
customer satisfaction and increase loyalty.

 Customer Loyalty: -

Page | 10
 Customer loyalties is a deeply held commitment to re buy or re patronize a preferred product
or Service consistently in the future, thereby causing repetitive purchasing of the same brand,
despite situational influences and marketing efforts. It can also be defined as the degree to
which a customer exhibits repeat purchasing behavior from a service provider, possesses a
positive attitudinal disposition toward the provider, and considers using this provider when a
need for this service arises. Loyalty is therefore an attitude or behavior that customers
explicitly repeat or exhibit (Seyed, 2007).
In addition, Loyalty in service businesses refers to the customer‟s commitment to do business
with a particular organization, purchasing their products repeatedly and recommending others
to the organization‟s products. (Christopher and Jochen, 2006) ascertain that customer loyalty
is actually the result of an organization creating a benefit for customer so that they will
maintain or increase their purchases from the organization. They indicate that true loyalty is
created when the customer becomes an advocate for the organization without incentives.

 Conceptual Framework: -

The conceptual framework indicates the crucial process, which is useful to show the direction
of the study. The study shows the relationship between the five service quality dimensions
(reliability, responsiveness, assurance, empathy and tangible) and customer satisfaction.
The following conceptual model has been used in this study.

Independent variable Dependent variable

Service quality dimensions
Tangible Reliability
Responsiveness Assurance
Empathy Customer

4. RESEARCH METHODOLOGY

 Method of data collection: -

Page | 11
 For the proper achievement of the objectives of the study; among different primary
data collection method, questionnaire were used. The variable was measured using
Likert scale with five response categories. (Strongly disagree, disagree, neither agree
nor disagree, and agree strongly agree). “The Likert scale method was preferred to
make questions interesting to respondents and thereby enhance their cooperation.
(Robson Colin, 2002).

 Procedure of Data Collection: -

The study was based on both primary and secondary data sources. It was begun by
secondary data analysis through the detailed review of related literature and survey
questionnaire was used as the main data gathering instrument for this study.
(Appendix B) questionnaire were prepared. After the data is collected; it is necessary
to utilize statistical techniques to analyze the data. The survey data was processed
using SPSS to be analyzed and presented.
 Method of Data Analysis: -
The collected data has to be changed and interpreted in to meaningful information, figure
and statement. So it was analyzed, processed and interpreted according to the nature of
data. Statistical Package for Social Science (SPSS) software was employed to analyze and
present the data through the statistical tools used for this study, namely descriptive
analysis, correlation and multiple regression analysis.
a) Descriptive analysis: - The descriptive statistical results were presented by tables,
frequency distributions and Percentages to give a condensed picture of the data.
This was achieved through summary of statistics, which includes the means and
standard deviations values which are computed for each variable in this study.
b) Pearson Correlation analysis: - In this study Pearson’s correlation coefficient was
used to determine the relationships between service quality dimension (Tangible,
reliability, responsiveness, assurance, empathy) and customer satisfaction.
c) Multiple Regression Analysis: - Multiple regression analysis was used to
investigate the effect of service quality dimensions (Tangible, reliability,
responsiveness, assurance, empathy) and customer satisfaction.

5. DATA PRESENTATION AND INTERPRETATION

Page | 12
 This chapter, present a discussion of the final results and the processes through which the
results were obtained. In addition to this, background information of respondents is also
presented. Finally, the statistical methods of analysis were discussed, which included a
descriptive analysis, a correlation analysis, and a multiple regression analysis with the help of
SPSS. The interpretation of the data is presented next to each summarized data.

 Demographic Analysis Of Respondents: -

The demographic characteristics of the respondents include gender, age and profession. This
aspect of the data analysis deals with the analysis personal data on the respondents of the
questionnaires. The table below shows the details of characteristics of the respondents and their
percentage.

Characteristics Frequency Percentage

Gender
Male 27 45.0
Female 33 55.0
Total 60 100.00
Age
18-28 39 65.0
28-38 16 26.7
38-48 2 3.3
Above 48 3 5.0
Total 60 100.0
Profession
Student 23 38.3
Employees 29 48.3
Business 4 6.7
Others 4 6.7
Total 60 100.0

As shown in table 4.1, out of 60 respondent, 33 (55.0%) were females and 27 (45.0%) were
males. The table also indicates the respondent age, it is obvious that most of them were in the
economically active group .The largest group of respondents which contains 65.0% was aged
between 18 and 28. The next group is 28-38 (28.7%) and smaller groups are 38-48 & above 48
comprises (8.3%) of the respondents.

Page | 13
With regard to profession; highest respondents were employees 29 (48.3%) and student 23
(38.3%). While business comprises 4 (6.7 %) and others 4 (6.7%).

 Reliability Analysis Test: -

This study used cronbach‟s alpha to test the reliability of questioner. The findings show
that Cronbach‟s alpha for all dimensions of service quality are above 0.70 which
indicates a high level of internal consistency for all items. Over all Cronbach‟s alpha
value for eighteen item is .906.

Dimension of service quality Number of attribute Cronbach’s alpha

Tangibility 3 0.698
Reliability 3 0.829
Responsiveness 3 0.778
Assurance 3 0.911
Empathy 2 0.825
Customer satisfaction 4 0.658
Overall reliability analysis Cronbach's alpha 0.906

 Descriptive Statistic Analysis: -

 Analysis of Quality Dimensions Item: -

As shown in table among the service quality dimensions majority of respondent
neutral on the tangibility items with the mode value is 4, showing the highest
frequency response towards neutral. Restaurant is at convenient location (38.3%),
décor (33.3%), restaurant was clean and staffs are well dressed (25.0%). As we can
see reliability item the most frequently response with the mean value of 4.00 and
provide service at time (40.0%), correction for wrong services (43.3%), accurate bill
(51.7%), this indicates that customers were satisfied with the items under reliability.
Regarding to responsiveness the mode value for this item is 3, showing neutral
responses. The other dimension is assurance items majority of respondents agree on
this items like feeling safe & secure, well trained & experienced staff and staff
provide information about the menu with the mean value of 3.97, 3.72, 3.77

Page | 14
respectively. Accordingly the mode value is 4. The last dimension of service quality
is empathy all the given attributes are under neutral this further confirmed with the
mode value of 2.

Page | 15
 Strongly Neutral (3) Strongly
Disagree(2) Agree(4) Mean Mode S.D
disagree(1) agree(5)
Dimensions of service quality
Frq. % Frq. % Frq. % Frq. % Frq. %
1 Tangibility
Restaurant is at convenient location. 1 1.7 - - 23 38.3 27 45.0 9 15.0 3.72 4 .783
The décor typical to its image and price range. - - 7 11.7 20 33.3 28 46.7 5 8.3 3.52 4 .813
Restaurant was clean and the staff were properly 1 1.7 1 1.7 15 25.0 27 45.0 16 26.7 3.93 4 .861
dressed.
2 Reliability
Service provided at time. 2 3.3 2 3.3 18 30.0 24 40.0 14 23.3 3.77 4 .963
Quick correction of wrong services. - - 7 11.7 15 25.0 26 43.3 12 20.0 3.72 4 .922
Accurate Bill. 1 1.7 1 1.7 11 18.3 31 51.7 16 26.7 4.00 4 .823
3 Responsiveness
Maintaining speed & quality of service during busy
1 1.7 3 5.0 26 43.3 24 40.0 6 10.0 3.52 3 .813
time.
Provision of prompt services. - - 3 5.0 26 43.3 25 41.7 6 10.0 3.57 3 .745

Extra effort for handling special requests. 1 1.7 3 5.0 28 46.7 20 33.3 8 13.3 3.52 3 .854
4 Assurance

Feeling safe & secured. 1 1.7 1 1.7 11 18.3 33 55.0 14 23.3 3.97 4 .802
Well trained & experience staff. 1 1.7 3 5.0 16 26.7 32 53.3 8 13.3 3.72 4 .825
Staff provide information about menu items. 1 1.7 5 8.3 12 20.0 31 51.7 11 18.3 3.77 4 .909
5 Empathy
Employee provide individual attention. 3 5.0 4 6.7 34 56.7 14 23.3 5 8.3 2.27 2 1.210
Sympathetic & reassuring employee. 1 1.7 1 1.7 34 56.7 21 35.0 3 5.0 2.63 2 1.33

Page | 16
  Analysis of Customer Satisfaction Item: -

Strongly Strongly
Disagree (2) Neutral (3) Agree (4) Mean Mode SD
disagree (1) agree (5)

Customer satisfaction
Frq. % Frq. % Frq. % Frq. % Frq. %
I am satisfied with respectful behavior of the
1 1.7 1 1.7 15 25.0 39 65.0 4 6.7 3.73 4 .686
restaurant staff.
I am satisfied with the performance of the
1 1.7 2 3.3 16 26.7 36 60.0 5 8.3 3.70 4 .743
employee of the restaurant.
I am satisfied with the cleanliness of the
- - 1 1.7 19 31.7 36 60.0 4 6.7 3.72 4 .613
restaurant.

I am satisfied with the overall services. - - 4 6.7 13 21.7 37 61.7 6 10.0 3.75 4 .728

The mean value is between 3.70 – 3.75, showing majority of respondent agree with the mode value of 4. Accordingly, the large respondents
from the sample rated behavior of the staff (65%), performance of the employee (60%), cleanliness of the restaurant (60%) and (61.7%)
respectively towards overall service satisfaction of the restaurant.

Page | 17
  Pearson Correlation Analysis: -
According to Shukran (2003), the relationship is expressed by value within the range -
1.00 to + 1.00 as Pearson product–moment indicates. Pearson correlation is +1 in the case
of a perfect increasing (positive) linear relationship (correlation), -1and1 in all other case
indicating the degree of liner dependency between variable.
To determine the relationship between service quality dimensions (Tangibility,
Reliability, Responsive, Assurance, and Empathy) and customer satisfaction, Pearson
correlation was computed.
Table, presents the results of Pearson correlation on the relationship between service
quality dimension and customer satisfaction.
Correlations

Responsivenes

Satisfaction
Tangibility

Reliability

Assurance

Customer
Empathy
s
Tangibility Pearson Correlation 1 .818** .747** -.017 .502** .775**

Sig. (2-tailed) .000 .000 .899 .000 .000

N 60 60 60 60 60 60
Reliability Pearson Correlation .818 **
1 .831 **
-.031 .534 **
.710**
Sig. (2-tailed) .000 .000 .815 .000 .000
N 60 60 60 60 60 60
Responsiveness Pearson Correlation .747 **
.831 **
1 -.004 .482 **
.621**
Sig. (2-tailed) .000 .000 .974 .000 .000
N 60 60 60 60 60 60
Assurance Pearson Correlation -.017 -.031 -.004 1 -.020 .030
Sig. (2-tailed) .899 .815 .974 .878 .821
N 60 60 60 60 60 60
Empathy Pearson Correlation .502** .534** .482** -.020 1 .502**
Sig. (2-tailed) .000 .000 .000 .878 .000
N 60 60 60 60 60 60
CustomerSatisfaction Pearson Correlation .775 **
.710 **
.621 **
.030 .502 **
1

Sig. (2-tailed) .000 .000 .000 .821 .000

N 60 60 60 60 60 60

**. Correlation is significant at the 0.01 level (2-tailed).

Page | 18
According to the Table, there is a significant positive relationship between the five
dimensions of service quality and customer satisfaction, the highest correlation is
between tangibility and customer satisfaction (0.775) followed by reliability
(0.710),responsiveness (0.621) and the remaining dimension empathy and assurance
(0.502) and ( 0.030) respectively. The weakest correlation is between assurance and
customer satisfaction whereas; the strongest correlation is between tangibility and
customer satisfaction. In general, if correlation is positive between two or more variables
that is, when service quality dimensions and customer satisfaction is positively related;
delivering better service quality ensures higher customer satisfaction. Accordingly, the
most important service quality dimension that affects customer satisfaction is tangibility,
which goes to prove that tangibility perceived as a dominant service quality followed by
reliability. Even if, assurance have weakly correlated improving these dimensions has
also effect on customer satisfaction.

 Multiple Regression Analysis: -

Multiple regressions are the most common and widely used to analyze the
relationship between a single continues dependent variable and multiple continues
on categorical independent variable (George et al, 2003). In this study multiple
regression analysis was employed to examine the effect of service quality
dimensions on customer satisfaction. The following table presents the results of
multiple regressions analysis.
2
Here the squared multiple correlation coefficients (R ) which tells the level of
variance in the dependent variable (customer satisfaction) that is explained by the
model.

Model Summary
Adjusted R Std. Error of
Model R R Square Square the Estimate
1 .794a
.631 .596 .37414
a. Predictors: (Constant), Empathy, Assurance,
Responsiveness, Tangibility, Reliability
b. Dependent variable : customer satisfaction

Page | 19
The results of multiple regressions, as presented in table, above, revealed that the service quality dimensions
(tangibility, reliability, assurance, and empathy) combined significantly influence the satisfaction of
customers. The adjusted R2 of 0.631 indicates 61.3% of the variance in customer satisfaction can be predicted
by the service quality offered by the restaurant. Therefore, service quality has a positive and significant effect
on customer satisfaction.
Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) .845 .391 2.160 .035
Tangibility .518 .135 .569 3.845 .000
Reliability .159 .134 .213 1.194 .238
Responsiveness -.035 .134 -.040 -.263 .794
Assurance .036 .063 .048 .583 .562
Empathy .098 .079 .123 1.242 .220
a. Dependent Variable: Customer Satisfaction

Based on the table, show the standardize beta coefficient, which tell us the unique
contribution of each factor to the model. A high beta value and a small p value (<.005)
indicate the predictor variable has made a significance statistical contribution to the
model. On the other hand, a small beta value and a high p value (p >.005) indicate the
predictor variable has little or no significant contribution to the model. (George et al.,
(2003)
Table, also indicates that tangibility, reliability, responsiveness, assurance and empathy
dimension of service quality have a significant influence on customers‟ satisfaction at
95% confidence level.
 Regressing Customer Satisfaction on the Service Quality Dimensions: -
The result of this study indicates that except assurance, all dimensions of
service quality have a positive and significant effect on customer satisfaction.
Moreover, from the findings of this study, researcher found out that not all of
the service Quality dimensions has positive effects on customer satisfaction.
Out of the five service quality dimensions four dimensions (tangibility,
reliability, assurance, and responsiveness) have positive and significant effects
on customer satisfaction. On the other hand, empathy has negative significant
effect on customer satisfaction.
Page | 20
 Hypothesis testing is based on standardized coefficients beta with 95%
confidence level to test whether the hypotheses are rejected or not.
1. Hypothesis 1 :-

Ho1: There is a positive relationship between tangibility and customer satisfaction in

restaurant industry.
Ha1: There is a positive relationship between tangibility and customer satisfaction in
restaurant industry.

The results of multiple regressions, as presented in table above, revealed that

tangibility have a positive and significant effect on customer satisfaction with a
standardize coefficient beta value (.569), at 95% confidence level. Therefore, the
researcher may accept the null hypothesis. Since, tangibly have a positive and
significant effect on customer satisfaction.

2. Hypothesis 2 :-

Ho2: There is a positive relationship between reliability and customer satisfaction in

restaurant industry.
Ha2: There is a positive relationship between reliability and customer satisfaction in
restaurant industry.

The results of multiple regressions, as presented in table above, revealed that

reliability have a positive and significant effect on customer satisfaction with a
standardize coefficient beta value (.213), at 95% confidence level. Therefore, the
researcher may accept the null hypothesis. Since, reliability have a positive and
significant effect on customer satisfaction.

3. Hypothesis 3 : -

Ho3: There is a positive relationship between responsiveness and customer

satisfaction in restaurant industry.
Ha3: There is a negative relationship between responsiveness and customer
satisfaction in restaurant industry.

The results of multiple regressions, as presented in table above, revealed that

responsiveness has a relationship and customer satisfaction with a negative
coefficient beta value (-.040), at 95% confidence level. But the result indicates that
negative effect on customer satisfaction. Therefore, the researcher may reject the null
hypothesis. Since, empathy has in significant effect on customer satisfaction. But this
does not mean that there is no relationship between customer satisfaction and
responsiveness.

4. Hypothesis 4 : -

Ho4: There is a positive relationship between assurance and customer satisfaction in

restaurant industry.
Ha4: There is a positive relationship between assurance and customer satisfaction in
Page | 21
 restaurant industry.

The results of multiple regressions, as presented in table above, revealed that

assurance have a positive and significant effect on customer satisfaction with a
standardize coefficient beta value, (.048), at 95% confidence level. Therefore, the
researcher may accept the null hypothesis. Since, assurance has a positive and
significant effect on customer satisfaction.

5. Hypothesis 5 : -

Ho5: There is a positive relationship between empathy and customer satisfaction in

restaurant industry.
Ha5: There is positive relationship between empathy and customer satisfaction in
restaurant industry

The results of multiple regressions, as presented in table above, revealed that

empathy have a positive and significant effect on customer satisfaction with a
standardize coefficient beta value, (.123), at 95% confidence level. Therefore, the
researcher may accept the null hypothesis. Since, empathy has a positive and
significant effect on customer satisfaction

6. SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

 Summary of Findings: -

The main objective of the study was to assess the impact of service quality on customers‟
satisfaction in restaurant industry at bhilai. The research was conducted using
questionnaire consisting of 60 sample.
 The results of background information of respondents indicated that from the total
respondents (55.0%) were female and (45.0%) are female. The largest group of
respondents which contains 65.0% was aged between 18 and 28. The next group
is 28-38 (28.7%) and smaller groups are 38-48 & above 48 comprises (8.3%) of
the respondents. With regard to profession; highest respondents were employees
29 (48.3%) and student 23 (38.3%). While business comprises 4 (6.7 %) and
others 4 (6.7%).
 The results of the descriptive statistical analysis also indicated that, customers
were satisfied with the service quality.
 The correlation result shows that there is positive and significant relationship
between tangibility, reliability, responsiveness, assurance, and empathy and

Page | 22
 customer satisfaction. The finding also indicates that the highest relationship was
found between tangibility and customer Satisfaction, while the lowest relationship
was found between assurance and customer satisfaction
 The multiple regression results showed that, four service quality dimensions
(tangibility, reliability, assurance and empathy) have positive and significant
effect on customer satisfaction but responsiveness indicate negative effect on
customer satisfaction.

 Conclusion: -

The objective of this study is to examine the impact of service quality on customer
satisfaction.
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 service 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”?

 Recommendation: -

 The restaurant services were relatively good, the staffs were good in
dressing well, the restaurant is at convenient location and décor is good.
However, this should not mean it lasts forever. So there is a need to
evaluate their status constantly and work for continuous improvements.
 “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

Page | 23
 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.

Page | 24
 REFERENCES

Bitner, M.J., (1990). Evaluating service encounters: the effect of physical

surroundings and employee responses. Journal of Marketing, 54, 69-82.
Retrieved March 10, 2013, http://www.emeraldinsight.com.

Albrecht, K., & Zemke, R. (1985). Instilling a service mentality: Like teaching an
elephant to dance. International Management, 40(1), 61-67.

Anderson, E. W., Fornell, C., & Lehmann, D. R. (1994). Customer satisfaction,

market share, and profitability: findings from Sweden. The Journal of
Marketing, 58(3), 53-66.

Athanassopoulos, A., Gounaris, S., & Stathakopoulos, V. (2001). Behavioural

responses to customer satisfaction: an empirical study. European Journal of
Marketing, 35(5/6), 687-707.

Aydin, S., & Özer, G. (2005). The analysis of antecedents of customer loyalty in the
Turkish mobile telecommunication market. European Journal of Marketing,
39(7/8), 910-925.

Babakus, E., & Boller, G. W. (1992). An empirical assessment of the SERVQUAL

scale. Journal of Business research, 24(3), 253-268.

Johnston, R. (1995). The determinants of service quality: satisfiers and dissatisfiers.

International Journal of Service Industry Management, 6 (5), 53-71.

Kotler, P. and Armstrong, G. (2012). Principles of Marketing. 14th Edition,

NewJersy, USA. Kotler, P.91989). Marketing Management: 8th ed North Western
University,New Delhi, India Kotler,p. and Armstrong, G. (2009). Principles of
Marketing. 14th Edition, NewJersy, USA.

Page | 25
 APPENDIX
Questionnaire
PART - I

1. Name

2. Which age group do you belong?

( ) 18 – 28 ( ) 28 – 38
( ) 38 – 48 ( ) Above 48

3. Gender.

( ) Female ( ) Male

4. What’s your profession?

( ) Student ( ) Employee
( ) Business ( ) Others

5. Which restaurant do you prefer?

( ) Fine Dining ( ) Cafes

( ) Food Truck ( ) Dhabas

6. How often do you go to a restaurant?

( ) Daily ( ) Once a week

( ) Twice a Week ( ) Once a month

Page | 26
PART – II

Instructions: Please select most appropriate response using the scale from 1 to 5 (Where 1 =
strongly disagree, 2 = disagree, 3 = neutral 4 = agree and 5 = strongly agree).

disagree
Strongly

disagree

Neutral

Strongly
Agree

agree
Quality dimensions

1 2 3 4 5
Tangibility
Restaurant is at convenient location.
The décor typical to its image and price range.

Restaurant was clean and the staff were properly

dressed.
Reliability
Service provided at time.
Quick correction of wrong services.
Accurate Bill.
Responsiveness
Maintaining speed & quality of service during busy
time.
Provision of prompt services.

Extra effort for handling special requests.

Assurance

Feeling safe & secured.

Well trained & experience staff.
Staff provide information about menu items.
Empathy
Employee provide individual attention.
Sympathetic & reassuring employee.

Page | 27
PART – III

Disagree

Neutral

Strongly
Strongly
disagree

Agree

Agree
Customer Satisfaction

1 2 3 4 5
I am satisfied with respectful behavior of the restaurant
staff.
I am satisfied with the performance of the employee of
the restaurant.

I am satisfied with the cleanliness of the restaurant.

I am satisfied with the overall services.

Page | 28
.

Page | 29
Page | 30
Page | 31
37
Page | 15
Page | 15
Page | 15
Page | 15