How Does Restaurant Attribute Importance Differ by the Type of Customer and Restaurant? Exploring

TripAdviser Reviews

February 6, 2015

Thimothy Lee

Sung-Byung Yang

Chulmo Koo (helmetgu@khu.ac.kr)

Namho Chung

College of Hotel & Tourism Management

Kyung Hee University, South Korea

Table of Contents

I. Introduction

II. Literature Review

III. Research Methodology

IV. Results

V. Discussion and Propositions

VI. Conclusion

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Research Background• Three important Criteria for Travelers

– Hotels– Restaurants– Shopping

• Travelers search restaurant reviews via internet:– Popular, famous places– Inexpensive places– Attributes: value, service, atmosphere, food, etc.

• Restaurant Managers’ Desire– Increase customer satisfaction– Increase customer loyalty; Keep coming back– Customers may be satisfied but may not return;

Need to understand this problem

I. Introduction

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OPRs & e-WOM

• OPRs (online product reviews)

– Consumers now rely on OPRs to help them to make a purchase decision.

– Products: Amazon.com, Epinions.com

– Food: Yelp.com, Zagat.com

– Travel: Tripadvisor.com, Expedia.com

– etc.

• e-WOM (electronic word-of-mouth)

– Online words disseminate faster than offline words

– Negative words diffuse faster than positive words

I. Introduction

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#5 (unique monthly visitor, 12/1/2013)

#4

#3

#2

#1

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TripAdvisor’s Restaurant Reviews

I. Introduction

Ratings on Restaurant Attributes

Country-of-residence

Overall Rating on Restaurant

Restaurant Type

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Our Research• Study 1: examines the different importance of each restaurant

attribute by overall travelers group using a conjoint analysis

• Study 2: examines differences in restaurant attribute importance by country-of-residence groups using a conjoint analysis

• Study 3: examines differences in restaurant attribute importance by different types of restaurants using a conjoint analysis

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Study4: Studies 2 & 3 are combined!

I. Introduction

Prior Research on Restaurant Attributes

• Dube et al., 1994

• Koo et al., 1999– Most important attributes: taste of food, service, uniqueness, and price

• Tse, 2001– Female: importance difference smaller than that of male– The higher the education level, the greater the importance of price

• Not a single study that evaluates restaurant attributes by adopting a conjoint analysis using online secondary data!

Pleasure Business

Tasty food

Attentive server

Helpful server Atmosphere

Atmosphere Consistent food

Consistent food Helpful server

II. Literature Review

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Wow! The price is really low!

The price is sort of on a high-end, but the food is reallydelicious and the ingredients are so fresh.The service is impeccable and the ambience is so cozy andluxurious.

The food is so delicious!The ingredients are so fresh.The menus are so original.The assortment of desserts are amazing.The wine list is extensive.

Restaurant Attributes (1/2)Food

Value

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II. Literature Review

Really professional: know the menus; able to answerquestions.Friendly and caring! Have a nice smile.Attentive: they know exactly when we need their service.

The interior decoration is nice and beautiful.What an amazing view!Music is peaceful or exciting.Something smells yummy!I feel really comfortable.It is a little bit too dark.

Restaurant Attributes (2/2)Service

Atmosphere

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II. Literature Review

Restaurant Attributes: Food• Food: pertains to taste and quality of ingredients

- Sub-attributes:

- Presentation

- Tastiness

- Menu item variety

- Temperature of food when served

- Food quality: healthy options and freshness

(Namkung and Jang, 2007; Kivela et al., 1999)

II. Literature Review

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Restaurant Attributes: Value• Value: net benefit gained after total costs incurred

– Net benefit could be greater or less depending on which attributes are more important to individual

– E.g., customers may feel price of restaurant is high, but feel like getting good value due to high food quality and nice atmosphere

– Customers compare one’s value with competitors’ value

– Price fairness is judged by:• Price of last transaction

• Most frequently occurring price point

• Market price in comparable transaction

(Bolton et al., 2003; Woodruff, 1997; Holbrook, 1994; Zeithaml, 1988)

II. Literature Review

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Restaurant Attributes: Service• Service: restaurant service could be sub-categorized

into variety of attributes– Tangibles: customers’ detections of restaurant’s appearance,

cleanliness, comfortable seating area, attractive and legible menu

– Reliability: restaurant’s dependable operation (e.g., food is correctly served on time; mistake is corrected immediately)

– Responsiveness: staff’s attentiveness and expeditious action in serving customers

– Assurance: professional mannerism, knowledge of menu items

– Empathy: staff’s sensitivity and sincere caring of customers

(Landhari et al., 2008)

II. Literature Review

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Restaurant Attributes: Atmosphere• Atmosphere: surrounding area and its overall quality

– Including cleanliness and comfortableness

– Interior design

– Music, lighting, color, scent

II. Literature Review

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Research Design• Exploratory case study (Baxter & Jack, 2008)

• Subject of study: 3 famous restaurants serving great hamburgers in NYC, USA – Hamburger: quintessential food with mass appeal

• Crawled data on each restaurant review from TripAdvisor.com

• A conjoint analysis was used to calculate relative importance values of four attributes – Study 1: Overall

– Study 2: According to different groups of country-of-residence

– Study 3: According to different types of restaurant

– Study 4: Studies 2 & 3 are combined

III. Research Methodology

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• Conjoint Analysis: relative importance of each attribute is determined (Green & Srinivasan, 1978).

• In our study, we adopted the same concept and applied to the traveler’ online ratings of restaurant attribute that reflect their staying experiences.

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III. Research Methodology

Research Design

Subject Restaurants SummaryCategory Shake Shack Burger Joint The Spotted Pig

Overview A large-sized food stance

located in the park

A small-sized restaurant

located in the hotel lobby

An upscale European

casual dining restaurant;

serving British & Italian

dishes; operated by a

renowned chef, April

Bloomfiled

Locations Between the mid and

downtown (Madison

Square Park) area of NYC

In the midtown area of

NYC

In the downtown

(Greenwich Village) area

of NYC

Signature menu Hamburger (Shackburger

cheeseburger)

$4.75

Hamburger

(Cheeseburger)

$8.27

Hamburger (Chargrilled

cheeseburger)

includingFrench fries

$21

Menu price range

(excluding dessert and

drinks)

$2.85 ~ 8.95 $3.90 ~ 8.27 $4.00 ~ 36.00

Seating capacity Outdoor seating only

inside the park

20-25; a limited seating

area

100; bar and dining area

Wait staff No No Yes

Payment All major credit cards Cash only All major credit cards

III. Research Methodology

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DataCategory Sub-category Shake Shack Burger Joint The Spotted Pig

Freq. Pct. Freq. Pct. Freq. Pct.

Review Date

2013.10 ~ 2013.12 45 21.23 29 22.14 33 25.78

2013.7 ~ 2013.9 64 30.19 39 29.77 32 25.00

2013.4~ 2013.6 54 25.47 36 27.48 33 25.78

2013.1 ~ 2013. 3 49 23.11 27 20.61 30 23.44

Sub-total 212 100 131 100 128 100

Country-of-

residence

Domestic travelers 76 35.85 51 38.93 41 32.03

Foreign travelers 136 64.15 80 61.07 87 67.97

Sub-total 212 100 131 100 128 100

Overall Ratings

5 112 52.83 62 47.33 50 39.06

4 66 31.13 46 35.11 45 35.16

3 22 10.38 12 9.16 18 14.06

2 5 2.36 6 4.58 12 9.38

1 7 3.30 5 3.82 3 2.34

Sub-total 212 100 131 100 128 100

III. Research Methodology

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Study 1: Overall diners groupImportance values of the overall restaurant customers for three restaurants combined

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IV. Results

Study 2: Domestic vs. foreign diners for all the restaurants

Importance values of the domestic vs. foreign travelers for three restaurants combined

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IV. Results

Study 3: Overall restaurant diners for each restaurant

Attribute rankings of the overall restaurant customers for each restaurant

Importance values of the overall restaurant customers

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Attributes Shake Shack Burger Joint The Spotted Pig

Importance Rank Importance Rank Importance Rank

Value 0.266 2 0.269 2 0.243 3

Service 0.257 3 0.159 4 0.193 4

Atmosphere 0.198 4 0.255 3 0.272 2

Food 0.279 1 0.317 1 0.292 1

IV. Results

Study 4: Domestic vs. foreign diners for each restaurant

Attribute rankings of the domestic versus foreign diners at The Spotted Pig

Importance values of the domestic versus foreign diners at The Spotted Pig

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Attributes Domestic customers Foreign customers

Importance Rank Importance Rank

Value 0.321 10.231 3

Service 0.234 30.180 4

Atmosphere 0.158 40.281 2

Food 0.287 20.308 1

IV. Results

Developed Propositions (1/2)• Proposition 1: Travelers would place different importance on each of many

restaurant attributes.– Proposition 1a: Among four restaurant attributes, travelers would place the highest

importance on the food attribute.– Proposition 1b: Among four restaurant attributes, travelers would place the lowest

importance on the service attribute.

• Proposition 2: Both domestic and foreign travelers would place four restaurant attributes in a concurrent order of importance. – Proposition 2a: In examining only the service attribute, domestic travelers would convey

higher importance than foreign travelers.– Proposition 2b: In examining the atmosphere and food attributes, foreign travelers would

convey higher importance than domestic travelers.

• Proposition 3: Regardless of the restaurant types, travelers would place the utmost importance on the food attribute among all attributes.– Proposition 3a: In examining the value attribute among different price-ranged

restaurants, travelers would covey higher importance for the value in low-priced restaurants.

– Proposition 3b: In examining the service attribute among different set-up types of restaurants, travelers would convey higher importance for the service at a food stance.

– Proposition 3c: In examining the atmosphere attribute among different set-up types of restaurants, travelers would convey higher importance for the atmosphere in indoor restaurants.

V. Discussion and Propositions

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• Proposition 4: For specific restaurant types, domestic and foreign travelers would convey discrepant importance priority on attributes.– Proposition 4a: In using low-priced food stances, foreign travelers would

place higher importance on the value and atmosphere attributes among than domestic travelers.

– Proposition 4b: In using low-priced food stances, domestic travelers would place higher importance on the food attribute than foreign travelers.

– Proposition 4c: In using low-priced indoor restaurants, foreign travelers would place higher importance on the value and service attributes than domestic travelers.

– Proposition 4d: In using low-priced indoor restaurants, domestic travelers would place higher importance on the atmosphere and food attributes than foreign travelers.

– Proposition 4e: In using high-priced indoor restaurants, foreign travelers would place higher importance on the atmosphere and food attributes than domestic travelers.

– Proposition 4f: In using high-priced indoor restaurants, domestic travelers would place higher importance on the value and service attributes than domestic travelers.

V. Discussion and Propositions

Developed Propositions (2/2)

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Research Contributions• Managerial Implications

– Restaurant management is able to evaluate importance of each attribute.– By comparing total importance with importance of each attribute,

restaurant management could efficiently allocate resources.– For general travelers, food attribute is more important than service

attribute.– Restaurant managers must realize foreign and domestic travelers

emphasize different attributes when dining.– “Food stance” type of restaurants must make sure to serve customers

expeditiously and professionally.

• Theoretical Implications– A conjoint analysis was used on voluntary data (restaurant customers

willingly expressing their opinions) for evaluation of 4 attributes (value, service, atmosphere, and food) of restaurants.

– Compared to survey questionnaire and scenario based experiments, OPRs better represent real thinking and intentions of customers.

– Unlike survey questionnaire which causes social desirability effect and CMB (common method bias), OPR data does not have to deal with this type of problem.

VI. Conclusion

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Limitations & Future Research• Limitations

– Only 1 particular food (i.e., burger) data was collected for each of 3 types of restaurants.

– Subject restaurants are popular and famous.

– More positive than negative responses regarding attributes

– An exploratory approach (theory-building approach)

• Future Research– Number of restaurants should be increased.

– Include different locations of restaurants.

– Comparative study between well-operated and mismanaged restaurants

– Method triangulation: conjoint analysis (ratings) + content analysis (review itself)

– An empirical approach (theory-testing approach)

VI. Conclusion

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Thank You for Your Attention!