Analyze the Customer’s Perception of Service Quality in Fast Food Industry: the Case of Kuala Terengganu

Analyze the Customer’s perception of Service Quality in fast food industry: The case of Kuala Terengganu

Author: Tasneem Shahid

Background:

The term fast food is given to food that is prepared and served very quickly, any meal with low preparation time can be considered fast food. Fast food is becoming the most valuable category in Malaysia and it is witnessing extraordinary boom. The Oxford English Dictionary defines ―fast food‖ as cooked food sold in snack bars and restaurants as a quick meal or to be taken away. Fast food, therefore, has a broad meaning that can cover many types of food items.

Moreover, fast foods found in different countries vary in type and service depending on local eating cultures and environments. Research has revealed that 98% of Malaysians eat at FFRs and 59% eat at FFRs at least once a week (ACNielsen, 2005). The rapid growth has made fast food a multimillion dollar industry with a growing rate of 10 to 15% annually (Malaysian Business, 2000). Between 1999-2003, the total number of outlets for the Malaysian fast food market increased by 34.5% and the fast-food sector achieved 7% of Compound Annual Growth Rate (Muhammad Fazli, 2006). 

Fast food value sales at constant 2013 prices are set to grow by a 6% CAGR over the forecast period. Growth will mainly be derived from the rising number of young people consuming fast food frequently as prices are more affordable than in other foodservice formats. QSR Brands, the operator of KFC and Rasamas, leads fast food sales with a 40% share of value sales (MYR1.8 billion) in 2013. Chicken fast food remained a favorite among local consumers as such products are widely accepted by all races in Malaysia (eronumerator). Development of a country contributes to the changing of lifestyle and dietary pattern intake for example the demand for getting better and quality of comfortable livings, health care, foods and services (Kaynak, Kucukemiroglu and Aksoy, 1996; Hubacek, Guan and Barua, 2007).

Service quality has been increasingly recognized as a critical factor in the success of any business (Parasuraman, Zeithaml & Berry, 1988). High quality goods and service are favored in the marketplace and high service quality performance does produce measurable benefits in profits, cost savings, and market share (Anderson, Fornell, & Lehmam, 1994). The topic of measuring service quality has been studied extensively in the past fifteen years. New ways to conceive of and measure quality in service industry is needed--and alternate approaches emerge in the business sector where organizations are increasingly evaluated in terms of their service quality. In 1988, marketing research team Parasuraman, Zeithaml and Berry developed a multiple-attribute scale called SERVQUAL for measuring service quality. The SERVQUAL scale operates and measures service quality along five distinct dimensions that can be viewed as indicators of the construct of perceived service quality. These five constructs are: tangibility which comprises of physical facilities, equipment, staff appearance, etc. then reliability- it is the ability to perform service dependably and accurately the third construct is responsiveness meaning the willingness to help and respond to customer need then assurance is the ability of staff to inspire confidence and trust and lastly empathy aiming to give individualized service.

Ghobadian, Speller, and Jones (1994) indicate that service quality has been a prerequisite for success and survival in today’s competitive environment, and interest in service quality has been obviously increased.

It is widely agreed that customer perceptions of quality vary from one industry to another and from country to country (Olorunniwo and Hsu, 2006; Markovic, Raspor and Sergaric, 2010). Restaurant marketers and service researchers more often try to study and understand customers’ needs and desires on service quality and satisfaction level.

Motivation of study:

Among the articles search for past studies on the relationship between customer perception and service quality, few studies have been conducted. Most of the studies are being conducted in banks, hospitals; airport but very little has been conducted in this. Thus, there is a need to research the perception of customer in fast food industry.

Thus the results of this study should be proved useful for academics; business in the field of marketing and management researchers of customer satisfaction and service quality especially in service sector organizations.

Problem Statement:

Since the concept of Malaysian fast food service quality is not fully explored, this study aims to develop a scale for fast food restaurants' service quality by examining McDonalds, KFC, Burger King, A&W, Pizza Hut, Domino’s Pizza, and Subway. Hence, the problem statement will be to “analyze the customer perception in the fast food industry by using a particular tool such as SERVQUAL”

Objective:

• To identify the factors affecting the choice of consumers for fast food;
• To study the consumption pattern towards fast food, particularly with respect to the frequency of visits and choice of fast food outlets; and

• To study the consumer perceptions about two popular fast food outlets in Terengganu city.

Literature Review:

Eating out is become a trend especially for people who busy and going through the hectic working life. Kaynak et al. (2006) pointed that more consumers were choose to have meals outside of their homes and it became a major food consumption trend in urban areas especially in developing countries. There are several causes that lead to consumer to dine-out. Mancino and Newman (2007) noted that price, wages, household income, other individual and household characteristics are the factors considered to dine out. People that have limited income are likely to dine out regularly in order to control their food budget. Furthermore, the increasing in number of working women has given an impact of eating out especially for dual working families where they find no time to cook (Andaleeb and Conway, 2006). Nevertheless, the convenience factor gives many people a reason to dine outside their home because of the ability to save time. Furthermore, Ryu and Han (2010) posited that saving time and eating healthy in better environments are the reason of people to dine-out. Eating out has practical and symbolic significance because sometimes people are going out because of necessity of pleasure. Eating out at the restaurant may also be for social interaction benefits and as pointed by Warde and Martens (2000), restaurant is a good environment for social interaction because the restaurant itself creates an environment without any individual pressure like the actual location of meeting. Besides, the good environment gives superiority to restaurant for dining (Mehta and Maniam, 2002) with combination of good service by employee and nice food (Ryu and Han, 2010; Voon, 2011; Ryu, Lee and Kim, 2012) where it can drives to different mode of dining and satisfaction instead of having meal at home (Ryu and Han, 2011).