ABSTRACT
The purpose of this study is to examine the relationship between the customer
satisfaction and the categories of brand equity assets. The primary research method used in
the study of customer satisfaction which analyzes the relationship; brand awareness, brand
image, brand perceived quality, brand loyalty and also brand value. It is based on a survey
which 300 responses collected from customers around Klang Valley, Malaysia.
The questionnaires were used to collect data. The customers were required to compare
their satisfaction between local restaurant and quick service restaurant. Regression analysis
and several statistical tests were used to test and analyzed the influence of each parameter on
customer satisfaction. Customer satisfaction that can be achieved by either emphasizing the
brand, product and services via satisfied the customer needs and want are having positive
relationship towards five dimensions of brand equity (brand awareness, brand image, brand
perceived quality, brand loyalty and brand value).
The limitation of this research is that the results are obtained from different profile
demographic of customers that participate in the questionnaires survey, so more systematic
probabilistic sampling procedure that would entail larger nation-wide samples are needed in
order to affirm the present result. More research may be needed to develop a valid
measurement tool to assess the elements of satisfaction in a way that does not elicit fatigue,
boredom or inappropriate response behavior from respondents. In managerial implication, the
SME restaurant operator should familiarize with those five dimensions and kept as the
guidelines for them to understand the factors that may meet customer satisfaction.
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1.0 INTRODUCTION
1.1 Background of the Study
1.1.1 Small and Medium Enterprise
The 2005 Census of Establishment and Enterprises specifies that 99 percent of
519,000 business establishments in Malaysia are small and medium enterprises (SME), of
which 412,000 are micro enterprises. Most of these SMEs are in the service sectors,
particularly in retail, restaurant and wholesale businesses. Total employment in SMEs
accounted for more than 3 million workers, and generated RM 154 billion of value-added in
2003.
Small-Medium Enterprise in Malaysia adopted a common definition of SMEs to
facilitate identification of SMEs in the various sectors and subsectors. This has facilitated the
Government to formulate effective development policies, support programs as well as
provision of technical and financial assistance. In Malaysia, SMEs can be divided into three
categories which are classified as primary agriculture, manufacturing and services.
Manufacturing category includes agro-based and manufacturing-related services whilst
services sector includes Information and Communication Technology (ICT).
In this study, we concentrate on small and medium enterprises (SME) which have
different criteria in terms of sales turnover and number of full time employees. For
manufacturing sector, small enterprise can be described by having between RM250000 sales
turnover and less than RM10 million or full time employees between five and fifty person. In
medium enterprise, we can distinguish by sales turnover between RM10 million and RM25
million or full time employees between fifty one and hundred fifty person.
On the other hand, in primary as well as services sector, small enterprise sales
turnover should be between RM200000 and less than RM1 million or full time employees
between five to nineteen persons. In medium enterprise, we can differentiate by sales turnover
between RM1 million and RM5 million of full time employees between twenty and fifty
person.
SMEs are mainly concentrated on the Central Region (Kuala Lumpur and Selangor),
accounting for 37.1 percent. The next highest concentration is Johor with 10.4 percent. Other
Malaysian states accounted for less than 10 percent (Normah, 2006). Output produced by
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SMEs in the services sector in 2003 was 56.7 percent (Malaysia, DOS, Census of
Establishments and Enterprises, 2005). SMEs in restaurants including cafes, coffee shops,
hawkers and stalls covers of 85.1 percent of output of the restaurant services (Malaysia, DOS,
Census of Establishments and Enterprises, 2005).
The food service landscape is evolving rapidly with growing globalization, with
implication for Malaysia’s SME. The environment has become competitive, hence local SME
restaurant supposedly no longer orientate their business merely toward domestic domain, but
must seek opportunities in the global marketplace. Nevertheless, in order to become
competitive with other international restaurants, local SME restaurants are required to
establish their brand and enhance the acceptability of their product amongst local customers.
As a consequence, we will discuss on the customer satisfaction, brand equity together
with brand awareness, brand image (or brand association), brand loyalty, brand perceived
quality and brand value. This research will focus on the comparison of local SME restaurants
and quick service restaurant in terms of brand equity which will lead to customer satisfaction.
1.1.2 Quick service restaurant
The quick service restaurant is one of the restaurant concepts that been recognized
with the fast service and also offers minimal range of menu. According to Birchfield and
Birchfield (2007), who is the author of text book with the title of “Design and Layout of
Foodservice Facilities 3rd edition” , he had wrote in his book that quick service restaurants are
those restaurants that cater more on convenience food with their fast service. The author also
added that other fast food restaurants such as delis, bagel shop and sandwich shops also been
segmented as the quick service restaurant. While Ottenbacher and Harrington (2008) in their
research journal had stated that Mc Donald’s, Pizza Hut, Subways and Kentucky Fried
Chicken (KFC), which are the most successful and most largest restaurant chain also are
segmented as quick service restaurants, (Ottenbacher, M.C., and Harrington, R. J., 2008).
As been stated by other researchers in their journal that, these kind of quick service
restaurants also acknowledged with their small range menu or limited menu, limited service
and also the price range of their food is not expensive (Ninemier and Perdue, 2005). The
foods that are served in the fast food restaurants are not fully prepared in the outlet itself. The
foods are prepared with provision standardized ingredient in bulk first before being blast
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chilled at the central food kitchen or the food control supply channel. Then they will be
distributed to the restaurant chains outlet for the last preparation before being served to
customers.
The food usually prepared and served in container such as bags or in a plastic
wrapping. This may help the business to reduce operating costs by; allowing rapid product
identification and counting; promoting; longer holding time; avoiding transfer of bacteria; and
facilitating order fulfillment (encyclopedia.thefreedictionary.com). The price of the food in
the quick service restaurants are so called cheap because the price itself is the critical factor of
their success since their customer are more value conscious (Birchfield and Birchfield, 2007)
The restaurant layout of the quick service restaurant is mostly simple and attractive.
With the limited range of service, the seating areas are designed not to make the customers
feel too comfort and the orders are designed to be taken away. These are made purposely to
gain high seat turnover. Even some of the fast food restaurant do not provide traditional
cutleries and their food served are finger food. There are several fast food restaurants
providing drive-through service that allows the customer to order and pick up their meals
from their cars. However, recent trend of the restaurants is providing children mini-
playground and free Wi-Fi. They had become their business survival since the trend had hiked
up constantly.
Common menu item that serves at fast food outlet includes Fried chicken, Fish and
Chips, sandwiches, burgers, French fries, chicken nuggets, pizza, ice cream, mashed potatoes
and many more. The food are easy to consume and convenience. The fast food business
concerns more on taste, speed, product safety, uniformity, and low cost, the ingredient are
designed in a way to achieve specialized flavor, aroma, texture and to maintain the freshness
the food and the palatability of the food (encyclopedia.thefreedictionary.com).
Mymalaysiainfo.com had listed in their page several fast food restaurants that exist
and well established in Malaysia. They are Kentucky Fried Chicken, Mc Donald’s, Nando’s,
Nineteen-o-one, Marrybrown, A&W, Pizza Hut, Chicken Rice Shop, Burger King, Secret
Recipe, KLG, Radix Fried Chicken and many more. Marrybrown and Radix Fried Chicken
are the Malaysian originated companies that operated successfully in this homeland country.
Above are stated some information on several quick service restaurants that are well
established in Malaysia.
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KFC web page which is www.kfc.com had stated that KFC had commanding over
35% market share in Malaysia. In fact, KFC had been said as the most popular fast food
restaurant in Malaysia (www.qsrbrands.com). In the same page, they also had stated that there
are 620 KFC restaurants in Malaysia, Singapore, India, Brunei and Cambodia. The first KFC
restaurant opened in Malaysia was in 1973 at Jalan Tuanku Abdul Rahman, Kuala Lumpur.
Meanwhile, Mc Donald’s restaurant was first opened in Malaysia in 1982 at Jalan
Bukit Bintang. Mc Donald’s also named as one of the most popular fast food restaurants in
Malaysia (www.ifranchisemalaysia.com). Current Mc Donald’s franchises restaurant had
exceeded the number of 185 restaurants all over the country with the number keeps arising
with 15 to 20 new restaurants opened yearly. According to www.mfa.org.my, which is the
web page of Malaysian Franchise Association, Golden Arches Restaurants Sdn. Bhd. is the
local company that has been given the authority by McDonalds USA to operate the restaurant
in Malaysia.
A&W restaurant also stands as one of the well established fast food restaurants in
Malaysia. This restaurant had been bought by KUB Malaysia Bhd. in 2001. In this year alone,
there are 39 A&W restaurant outlets and most of them are located in Klang Valley
(investing.businessweek.com)
Another fast food restaurant that are wholly owned and managed by local company is
Marrybrown Restaurant. This restaurant was founded by Lawrence and Nancy Liew in 1981
in Johore Bahru. The Marrybrown Restaurant had over 250 restaurants in Malaysia,
Indonesia, China, Sri Lanka, Tanzania and UAE (www.ifranchisemalaysia.com). Marryborwn
had been listed in the Malaysia Book of Records as the First Malaysian Fast Food Franchise.
Besides that, they also had been awarded with the Prestigious International Homegrown
Franchise of The Year Award and Franchise of The Year Award
1.2 Problem Statements
This paper, at the same time provides a brief review of some of the relevant
approaches that have been used for the measurement of customer satisfaction. It then
discusses different views that have been developed in relation to the transferability of
satisfaction measures across industries and outlines the research questions addressed in this
investigation. One of the main problems faced by customers when it comes to local SME
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restaurants is the issue of brand perceived quality as compared with quick service restaurant
(QSR). It is well established that QSR always offered good quality food product with quick
waiting time, thus they become all-time favorite for most of the customers. In contrast, local
SME restaurants often facing difficulty in retaining their customer as well as return intention
due to service delivered.
Apart from that, local SME restaurants have been preferred by the customers due to
the lower price range compares to QSR. The local SME restaurants were always been visited
by the lower income customers especially college and university students. The issue of this
scenario is what will happen when the customers have greater disposable income and how
will the acceptability of the food products and service rendered by the local SME restaurants?
The branding of local SME restaurants thus is very crucial in defeating their QSR
counterparts in terms of customer satisfaction. It is well recognized that satisfied customers
will result to long-term business success (Kristensen et al., 1992; Zeithami et al., 1996;
McColl-Kennedy and Scheider, 2000).
There are many classifications for customer satisfaction based on brand equity namely
brand awareness (Aaker, 1996), brand association or brand image , perceived quality, brand
loyalty, brand salience, brand performance, brand imagery, brand feeling, brand judgments
and brand relationship. In this study, these categories have been divided into several aspects
comprising brand awareness, brand association (or brand image), perceived quality and brand
loyalty, and brand value as they are the most acceptable to-date.
1.3 Objectives of the Study
The purpose of this study is to examine the relationship between the customer satisfaction and
the categories of brand equity assets. There are several objectives of this study:
1.3.1 To study on the brand awareness that will improve the customer satisfaction on
local SME restaurants
1.3.2 To discover the brand image that will improve the customer satisfaction on
local SME restaurants
1.3.3 To determine the brand perceived quality that will improve the customer
satisfaction on local SME restaurants
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1.3.4 To observe the brand loyalty that will improve the customer satisfaction on
local SME restaurants
1.3.5 To evaluate the brand value that will improve the customer satisfaction on local
SME restaurants
1.4 Research question
The research questions that act in accordance with the objectives are:
1.4.1 How well the Malaysia consumers aware of the existence of local SME
restaurants?
1.4.2 How does the image branding might assist the consumer to recognize the local
SME restaurants?
1.4.3 If the consumers recognize the SME restaurants, will they regularly visit the
restaurants and be a loyal customer?
1.4.4 How do the customers look into the quality of local SME restaurants as
compared to other restaurants?
1.4.5 How the brand values affect customer satisfaction in local SME restaurants?
1.5 Hypothesis
The research questions that act in accordance with the hypothesis are:
H1a : When customers are aware of the existence of the local restaurants’ brand, they will
be more satisfied.
H1b : When customers are aware of the existence of the quick service restaurants’ brand,
then they will be more satisfied.
H2a : Local restaurants of established brand image will have satisfied customers.
H2b : Quick service restaurant of establish brand image will have satisfied customers.
H3a : There is positive relationship between brands perceived quality and customer
satisfaction in local restaurant.
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H3b : There is positive relationship between brands perceived quality and customer
satisfaction in quick service restaurant.
H4a : If the customers are loyal to a local restaurant, then they become satisfied customers.
H4b : If the customers are loyal to a quick service restaurant, then they become satisfied
customers.
H5a : There is relationship between brand value and customers satisfaction in local
restaurant.
H5b : There is relationship between brand value and customers satisfaction in quick service
restaurant.
1.6 Significance of study
The food service industry today has been reputed for its rapid development and stiff
competitiveness in nature. In Malaysia, although the SME industry is smaller than other
developing country, it is consider well growing. The issue on this industry is how well is it
being accepted by the local customers rather than quick service restaurants. For that reason,
this matter needs to be looked upon intensely by the academician, researcher in addition to
food service operator. Consequently, this issue should not been overlooked, but essential
actions should be taken in order to grab the significant inflow of customers by enhancing the
branding and sustaining great deal of business.
This study is anticipated to discover the influence of brand equity toward customer
satisfaction of local SME restaurants. As perceptions on the significance of customer
satisfaction have developed in the food service field, studies on this issue have been
constantly performed. Nevertheless, the availability of this study on local SME restaurants is
very limited. Thus, we observed on this topic so that local SME will generate the vast impact
of the branding, especially in augmenting their competitive edge and marketing function.
Consequently, the literature review chapter will discuss on the branding and customer
satisfaction whereby focus is given solely on food service area, and to be more detail, the
local SME restaurants. This will assist local restaurants to further understand the influence of
brand equity (comprises of brand awareness, brand image, brand perceived quality, brand
loyalty and brand value) toward customer satisfaction. Hopefully with this knowledge, local
SME restaurant operator will understand their customer in line with satisfying their needs and
wants regarding their food product and service encountered. The outcome of this paper will
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served as a guidelines for the food service operator, particularly local SME restaurants to
improve the aspects of their operation regarding brand equity so that their performance can
meet customers’ expectations.
1.7 Limitation of the Study
There are several limitations to this research that have been identified for the future
research efforts. The limitation involves the generalizability of the study. The study involved
300 customers in Klang Valley which unable to represent of the population across the
country. Furthermore, most of the respondents were students which might have different
views of branding towards customer satisfaction due to financial constraints.
Another limitation is related to the cooperation of the respondents. The distribution of
questionnaire took place during weekend whereby most of the customers were outing. Some
respondents might have no time to respond to the questionnaire, thus they might answer the
questionnaire for granted. Furthermore, the number of items in the questionnaire is great,
hence its quite time consuming for customer to respond for the whole questions. Perhaps
future studies could encourage genuine responds from customer with a token of appreciation
such as free gifts or coupons upon filling up the questionnaire.
This research also has limitation in terms of time constraints. We only have a semester
which covers four months to complete the study. This four months period was insufficient to
conduct a thorough study on this area. Therefore, if more time was allocated for the study, the
result would be more accurate and representatives of the population.
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2.0 LITERATURE REVIEW
2.1 Customer Satisfaction
According to Kotler (2003, p.36), it must be pointed out that there is wide consensus
that satisfaction is a person’s feeling of pleasure or disappointment resulting from comparing
a product’s perceived performance (or outcome) in relation to his or her expectations.
Therefore, satisfaction is closely related to customer expectation and experiences. Services are
by their nature intangible and thus their assessment and subsequent evaluation cannot be
achieved prior to their consumption; this justifies their classification as “experiences” product
(Nelson, 1974).
Customer satisfaction has been considered as a fundamental determinant of customer
loyalty. Anderson and Sullivan (1993) found that satisfied customers have greater tendency to
be retained and resist to alternative options, while Fornell (1992) states that high satisfaction
results to customers with increased loyalty, less prone to be approached from competition.
Moreover, satisfaction enhances repeat purchased and positive word of mouth by customer
(Reicheld and Sasser, 1990; Wirtz, 2003).
Based on Oliver (1980) and Rust et. al. (1995), customer satisfaction is strongly
influenced by customer expectation. The gap between perceived quality and expected quality,
called “expectancy disconfirmation” is a strong predictor of customer satisfaction. As a result,
many managers and researchers have chosen to explicitly measure the extent to which a
product or service meets customer expectations. The seminal SERVQUAL framework of
Parasuraman et al. (1988), Parasuraman et al. (1991, 1993) and Zeithaml et al. (1996)
conceptualized and operationalized service quality as the gap between customers’
expectations and perceptions (Parasuraman et al., 1985; 1994).
Satisfaction has been conceptualized in different ways in the marketing literature.
Some researchers have argued that satisfaction is a transaction-specific measure (e.g. Cronin
and Taylor, 1992, p. 56). Other researchers view satisfaction as an overall evaluation based on
the total purchase consumption and experience (e.g. Anderson et al., 1994). In general,
satisfaction has been conceptualized in terms of whether the product/service meets consumer
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needs and expectations (Zeithaml and Bitner, 2000). Oliver (1997,p. 28), who defined
satisfaction as “the summary psychological state resulting when the emotion surrounding
disconfirmed expectations is coupled with a prior feelings about the consumer experience”.
Aaker (1991a, b, 2003), Kapferer, (1997) and Blackett (1993) stated that the processes
associated with building a strong relationship between brand and consumer have paid
increasing by marketing practice and marketing research and it is often argued that the brand
is the most valuable asset for any company.
Based on Newman and Werbel (1973) and Kesper (1988), satisfaction is often used as
a predictor of future consumer purchases. Satisfied customers have a higher likelihood of
repeating purchases in time (Zeithaml et al., 1996), of recommending that others try the
source of satisfaction (Reynolds and Arnold, 2000; Reynolds and Beatty, 1999), and of
becoming less receptive to the competitor’s offerings (Fitzell, 1998). Usually a customer
starts judging a product in order to discover the benefits it brings and the satisfaction it
promises (Reynolds and Beatty, 1999).
Schiffman et al., (1997), said that product and brand are not synonymous. Yet, some
authors have used them interchangeably, particularly when they have addressed repeated
purchases (e.g., Dick and Basu, 1994; Oliver, 1997). As defined above, product and brand are
significantly different both conceptually and practically. Similarly, customer satisfaction and
loyalty are significantly different even though they are strongly and unidirectional related.
Usually a customer starts judging a product in order to find the benefits it brings and
the satisfaction it promises (Reynolds and Beatty, 1999). The generic or unbranded product
would be enough to start such a selection process. Inexperienced consumers with a line of
products start with the product benefits and preferences whereas experienced consumers go
directly to the brands. As the customer becomes more experienced with the product, he or she
may focuses on a brand.
Brand equity is important factor in creating short-term customer satisfaction and long-
term customer loyalty. According to Cooper (1999), brands have changed and are no longer
lifeless artifacts created by owners or managers; rather, they have become living entities with
personalities that customers can form relationships with. Brand equity, in the simplest of
terms, is the value of customers’ relationships with a brand. These relationships are formed
based on a mix of actual facts about the brand, such as consumer reports, advertising
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messages, packaging, word of mouth, and usage experience, as well as subjective measures
(Ambler, 1997).
For many years, customer satisfaction has been a major goal of business organizations,
since it has been deemed to affect customer retention and companies’ market share
(Hansemark and Albinsson, 2004). The product can be a good starting point for providing
satisfaction and generating loyalty. Services are by their very nature intangible and thus their
assessment and subsequent evaluation cannot be achieved prior to their consumption; this
justifies their classification as “experience” products (Nelson, 1974).
Higher levels of customer satisfaction can lead to a reduction of the perceived benefits
of alternatives suppliers and hence to higher repurchase intentions (Anderson and Sullivan,
1993). In order to further emphasize this point, Anderson and Srinivasan (2003) claimed that
a dissatisfied customer is more likely to search for information on alternatives and more likely
to yield to competitor overtures than is a satisfied customer. Harris and Harrington (2000)
pointed out that customer satisfaction can be attained by companies, which have understood
their customers’ needs and make every effort to provide services in an effective and efficient
manner.
2.2 Brand Equity
Equity of the brand, which is said to be the most crucial and important issues that been
discussed by the researcher, academician even the practitioners (Leone et al., 2006). There
were many of previous research that been done by researchers focusing and had touched on
this brand equity issues (Kim, Bongran & Kim, 2008). According to Kim et al., (2008) they
had stated that brand equity is currently the hot issues being discussed by the hotel industry
player. In the same research, they had found that there is a relationship between
multidimensional customer-based brand equity (brand loyalty, perceived value, brand
awareness, and brand association) and two by product (perceived value and hotel revisit
intention) in midscale hotels with food and beverage operation (p.236).
While Prasad and Dev (2000) in their studies determined that, if those hotel industry
players had keep track of the equity of their brand, they are said to be able to assess the
relationship of their chain brand positioning with the other industry player’s hotel chain brand
position; able to determine the value of the particular hotel brand’s equity; and to create their
‘plan B’ for their marketing strategies. In other research, there were several researchers
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believed that any hotel industry player that are not lacking of brand equity and got high level
of it (brand equity), is aiming more on directing a series of premiums which have more
customers that elastic to the price, brand extension and licensing opportunities (Keller, 2001);
the degree of customer loyalty that are so called ‘high’ and also higher resiliency to tolerate
with environment of crisis; higher profit margin; and lastly got higher market value (O’ Neil
and Xiao, 2006). In fact, any particular hotel firm that gains higher brand equity level is likely
to control higher repeat purchase intention from their customers (Kim et al., 1998).
Aaker (1991) had stated in his journal the definition of brand equity as “a set of assets
and liabilities that affect any name of the brand and attribute that attach to or subtract from the
value provided by a product or service to a firm and the customers of the firms” (p. 15) and
believed that brand equity act as an incontrovertibly vital source of capital in food and
beverage industry. While Simon and Sullivan (1993) and Biel (1997) had cleared the term of
brand equity in term of cash flow; of a situation where the brand name is given to a company
product; and another situation where there are no name given to the particular company’s
product are not the same. Through having the estimation of financial value for the particular
brand, it is believed that they are useful, but unnecessarily help those marketers to
comprehend the process of brand equity development.
In 2001, Capon, Berthon, Hulbert and Pitt, had indicated in their study that brand
equity had two different approaches which are organizational brand equity and also customer
brand equity. However discussion on organizational brand equity topic had been touched less
at the current time. Many researchers believed that, “in service brand marketing, it is a sort of
new occurrence to estimate brand equity based on customer’s cognitive aspects rather than
firms’ financial values” (Berry, 2000; Cobb-Walgren, Ruble and Donthu, 1995; Kim, Kim
and An, 2003; Mackay, 2001). Simon and Sullivan (1993) stated in their research that, the
central point of organizational brand equity is relying on financial values for example; market
value, potential earning and replacement cost. In the other hand, the customer brand equity are
spotlight more on the customer’s state of mind such as awareness, perceived quality, attitudes,
preferences, attachment and loyalty (Aaker, 1991, 1996; Agawal and Rao, 1996; Blackston,
1995; Dyson, Farr and Hollis, 1996; Keller, 1993; Lassar, Mittal and Sharma, 1995; Vasquez,
Del Rio and Iglesias, 2002; Yoo, Donthu and Lee, 2000).
Aaker in 1991 indicated that the brand equity’s assets can be clustered into five
different dimensions which are; brand awareness, brand association, perceived quality, brand
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loyalty and other proprietary assets. Other proprietary brand assets are also included with
patents, trademarks and channel relationship (Kim et al., 2008). However Yoo and Donthu
(2001) had deny the fact in their research that other “proprietary brand asset” which is the
fifth element of customer brand equity is not really related to customer perception, thus make
only four of the dimensions; brand awareness, brand association (or brand image), perceived
quality, brand loyalty are regarded as customer-based brand equity. This also supported by
Hyun and Kim (2011) after they had stated in their research that there are four dimensions of
brand equity; brand awareness, brand association (or brand image), perceived quality, brand
loyalty are interrelated for restaurants brand.
The definition of brand equity later been discussed in Keller’s, journal and defined
brand equity as diversity in customer reaction to the activity of marketing (2003).In the same
research Keller also proposed with different brand equity model that comprised of six
components that are; brand salience, brand performance, brand imagery, brand feeling, brand
judgments and brand relationship (Keller, 2003). According to Young and Rubicam’s brand
asset valuator, they had conceptualizes the brand equity into four other dimensions including
brand knowledge, brand esteem, brand relevance and brand differentiation. Brand
differentiation is so called as the philosophy of branding and related with the relevance,
however both Aaker (1991) and Keller (2003) research have not stated “differentiation” in
their brand equity model (Kimpakorn and Tocquer, 2010).
According to Zeithaml et al. (1985), the concepts of brand equity need variation for
extension into the perspective of services business upon the particular nature of services.
There are many other literature review discussed on brand equity related consumer goods
( Aaker, 1991, 2002; Ambler et al., 2002, De Chernatony, 2002; Franzen and Bouwman,
2001; Keller, 2001; Yoo and Donthu, 2001; Pitta and Katsanis, 1995; Srivasta and Shocker,
1991) while the other literature on service brand management (De Chernatory and
McDonalds, 1998; Berry, 2000; Prasad and Dev, 2000; Kim and Kim, 2004) had indicated
that the theory of brand equity are not just being justified with other viewpoint such as
financial or marketing, but current existence models also have disparate construct with other
common dimension like brand awareness, perceived quality, brand association and brand
relationship. Kimpakorn and Tocquer (2010) their research indicate that the writing on
branding highlighted the marketing programmed as a main basis of brand equity because a lot
of customer goods brands have been constructed in the course of advertising (p. 380).
Furthermore, the service branding model which constructed by Berry in 2000 had shown that
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the service brand equity can be breed by the function of effective brand communication and
also by customer experience.
In other Aaker (1991) and Keller (2003) research, they confessed that the concept of
brand equity has both aspect of marketing and financial. From the financial viewpoint, it is
not impossible to develop the certain level value to the brand in monetary term, which is
helpful for manager in case of merger, acquisition and divestitures function. While from the
marketing viewpoint, brand equity is conceptualized with the customer perspectives to ease
marketers to comprehend the brand in the minds of customers and construct effectives
marketing programs to develop the brand. There are some researchers believed that brand
equity is related with the firm itself (the relationship between brand equity and a firm’s cash
flow, revenue, and marketing effectiveness (Simon and Sullivan, 1993; Mahajan, Rao and
Srivastava, 1994; and Aiwaldi, Lehmann and Neslin, 2003). Keller (1993, 1998) added in the
studies, that customer-based brand equity is based from knowledge about the brand.
Measurement of brand equity definition through the definition of customer based
brand equity can be done in two basic approaches. The main approach is “indirect approach”
that estimate potential sources of customer-based brand equity by categorize and determine
customers’ brand knowledge structures. While other approach which is “direct” approach
would estimate customer-based brand equity in a straight line by assessing the real impact of
brand knowledge on customer react to different elements of marketing program. Lastly, it is
stated in other research that figure of the direct approach consists of the financial or market-
outcome-based measures of brand equity such as revenue premium (Ailawadi, Lehmann and
Neslin, 2003), brand equity as a determinant of brand extendibility (Randall, Ulrich and
Reibstein, 1998).
2.3 Brand Awareness
Brand awareness may referred to the aptitude to recall the product through their brand
(Brewer and Zhao, 2010), their name, figure, characteristic and etc. The researchers also
define brand awareness as the prelude phase of behavior processing. Customer’s buying
capability is connected to both brand awareness and brand perceived value whereby the brand
awareness is dominant and takes place when the customer do not really recognize the product
itself (Hoyer and Brown, 2001; Keller, 1993; Stephen, 1993). Besides that, both brand
awareness and brand perceived value that are also known to be active rather than passive are
related to perception and formation of behavior.
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In other written literature, researchers had indicated that brand awareness play a major
role in forecasting the attitude of customer. It is going aligned in 3 ways which are:
1. Goods with stronger brand awareness will have higher potential to be chosen by the
customer with less concern upon their quality and price (Macdonald and Sharp, 2000).
2. Brand awareness also assists customers to make decision and pace up the decision
making process during goods purchasing session (Macdonald and Sharp, 2000).
3. Customer repurchase behavior is highly affected by brand awareness (Macdonald and
Sharp, 2000).
Besides that, according to Fullerton (2005), customer satisfaction is also directly
connected to the brand commitment and intention to repurchase the product. In the same
research paper Brewer and Zhao (2010) had stated that consistent reputation will build brand
awareness. According to Cretu and Brodie (2005), they indicated that brand awareness is
connected to the customer’s definite preference in the process of decision making, in the other
hand, reputation is more towards to affect the customer choices or behavior.
By applying the ideas of previous literature, restaurants in food service industry therefore
should intensively market their brand so that might create awareness of their brand, since the
customers possibly preferred restaurant with greater brand awareness regardless other factors
such as food quality and the price. Restaurant with stronger brand awareness are likely to be
chosen and speed up the decision of customers where to dine in. Apart of that, customers of
the restaurants might regularly visit the restaurants that have stronger brand awareness
compared to the other competitors.
Brand awareness is associated with the capability of the customer to recap the brand
itself. According to Brewer and Zhao (2010), brand awareness can be acknowledged as the
first step of attitude processing. In the same research, the author had stated that brand
awareness and perceive value have a relationship and their linked are more vibrant and not
stagnant (Brewer and Zhao 2010). Perceived value is the factor that contributes to the
purchasing selection. The customer may buy any particular product if the product has good
perceived value. Several researches believed that brand awareness and perceived value are
linked to the patron buying power. They also agreed that the customers that have no
knowledge or experience on the product or service are helped and may depend on the brand
knowledge (Hoyer and Brown, 2001; Keller, 1993; and Stephen, 1993).
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Meaning that those customers who are unfamiliar with the product or service will rely
more on well established brand that more trustable and have a positive image (Brewer and
Zhao 2010). For example, when people tend to buy shampoo or any kind of product on a shelf
at any supermarket store, and they do not really have an idea, what is the brand of the product
that they may choose? In this situation they may use their familiarity upon the product or their
knowledge about the existence product that they may get from such as; advertisement,
exposures, interactions with sales promoters of that supermarket store itself, word of mouth
communication, or trial and consumption (Tam, 2008).
This fact also been support in Brewer and Zhao (2010) studies when they had clarified
that brand awareness is so called the determinant of consumer buying attitude in such three
ways; the first point is that the customer will not concern more on price and the quality, they
are moving forward to select the product with higher degree of brand awareness (Mc Donald
and Sharp (2000); Brand awareness also facilitate and foster customer to make choice of
product or service which they may prefer more in buying process; When the customers have
the intention to reiterate buy the same product or service, their selection may strongly affect
by the brand awareness (Brewer and Zhao 2010). These may shows that brand awareness is
one of the important dimension that may exist as the factor that may contribute to the buying
decision making process.
Brand awareness also been affected by the reputation, principally in long-held
reputation. In fact, brand reputation is likely unwavering rather than brand. Even in the
process of buying decision making, customer choices or preference believed to be related with
the reputation. In other hand, customer real choice is significantly related with the brand
awareness (Brewer and Zhao 2010). Directly or indirectly, these may show that the brand of
the product that has good reputation may not particularly act as the determinant of the
successful factor of that brand and also if the brand of the product have a not such a good
reputation, they also may had a problem to develop their strong brand (Page and Fearn, 2005).
In the other research, there are been said that some of dimension of brand equity such
as brand awareness, brand distinctive, brand loyalty and brand association, are positively
related to the country of origin of the product, service, even the brand itself (Yasin et al.,
2007). Lee and Ganesh (1999) had done their research and believe that those buyer or in the
research case, visitor that have not familiar with the country that they may visit and having a
low brand awareness, they intend to depend on that country origin information, if their image
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are good, more positive evaluation they may get but if there are not, vice versa evaluation will
be made. However, Balabanis and Diamantopoulos (2008) clarified that those buyer that
evaluate the brand through their country of origin, their perception is not precise and
incorrect. Above fact can be adopt in this research situation in a way to state that those brand
that are originated from the country that have a good image are tend to be evaluated as good
brand while those brand that are came from country that have bad image are tend to be
evaluated as not good brand or product.
According to Tam (2008) in his research had showed that knowledge, familiarity and
experience are having a close relationship for each other. This fact is based on Alba and
Hucthison (1987) research since they had defined brand familiarity “as the product related or
service related experiences that had been mounted up by the customer. While Johnson and
Russo with their research in 1984 had believed that, experiences have such a similarity with
knowledge. Several years after that Johnson and Kellaris (1988) had indicated experience
contribute to the knowledge. Several studies also believed that customer buying decision
making process also affected by the familiarity of the product. Bettman and Park (1980), Park
and Lessig (1981). While other researchers added that customer brand familiarity also have a
relationship with price and the quality of the brand (Johnson and Kellaris, 1988) and also the
effectiveness of that brand advertisement (Campbell and Keller, 2003).
2.4 Brand Image
Brand image concept is knowledge about a brand as reflected by the brand association
held in consumer memory (Keller, 1983). These associations include any brand aspect within
the consumer’s recall (Aaker, 1991). Roy and Banerjee (2007) suggested that brand image
expressed as the consumer’s idea and attitude towards the brand. Basically, the brand image is
the overall mind perception that consumers have of a brand, and its distinctiveness in
comparison to the other brand (Faircloth, 2005).
Brand image is encompasses a consumer’s knowledge and beliefs about a brand’s
varied product and its non-product aspects. Brand image signifies the personal symbolism that
consumer associate with the brand, which covers of all descriptive and evaluative brand-
related knowledge (Iversen and Hem, 2008). The brand’s messages have powerful influence
instead of other competitors’ messages when consumers have a favorable brand image (Hsieh
and Li, 2008). Hence, brand image is significant determinants of consumer’s behavior
(Burmann et al, 2008).
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Brand image is otherwise known as brand association. Aaker in his 1996a study
mentioned that brand association is anything related in memory to a brand. Keller (1998)
proposed that brand associations are classified into three different types: attributes (including
product-related attributes and non-product related such as brand personality, price, experience
and emotions), benefits (what customers’ feel the product and services can do for them,
including functional benefits, symbolic benefits and experiential benefits) and attitude
(customer overall assessment of the brand). By applying Keller’s concept, in food service
industry, brand image could be reflected through restaurant brand personality, competitive
price, memorable dining experience, happy feeling as well as benefits that customers gained
when dine in particular restaurants.
Martenson (2007) declared that a favorable brand image would portray positive
persuasive power on buyer behavior towards the brand in terms of enhancing loyalty,
generating positive word of mouth and superior price premium. Faircloth et al (2001) claimed
that the more positive the brand image, the more likely customers are willing to pay, hence
the greater the brand equity. Restaurant operator in Malaysia thereby should establish their
brand image extensively in order to generate greater willingness of customers to spend,
indirectly enhance the brand equity of the restaurant.
Rao et al (1991) stated that many company want to gain benefits of stronger brand
image in order to enhance their own image, thus many successful companies with an inferior
brand image merge and attain companies with a superior brand image ultimately expand their
market share. In fast food industry, McDonald has introduced new Oreo Mcflurry in order to
benefit the stronger brand image of Oreo, and apparently this step has created a center of
attention for market share of McDonald. Local SME as well supposed to take relevant actions
in sequence to enhance superior brand image as fast food did.
Country image is the overall consumers’ perception toward a product from a particular
country, based on their prior perception of the country’s production and marketing strength
and weaknesses (Roth and Romeo, 1992). Country as well as brands has different images. The
issue of whether brand image appeals affect customer responses differently in other countries
has brought due to the appearance of global products (Hsieh et al, 2004). In line with Hsieh
(2004), the issue of local SME brand must reset its brand image as compared to other global
brand has questioned many SME operator in Malaysia. SME operator should recognize the
national characteristics would affect the success of brand image strategies.
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The relationship between brand image and country-of-origin (COO) information on
consumer view had been deliberate well (D’Astous and Ahmad, 1999; Hsieh et al, 2004;
Kotler and Gertner, 2002; Nebenzahl et al, 2003; Papadopolous, 1993). The significant effect
of COO information and brand image on consumer perception has been proven by most of
these researchers.
Eventually, the power of brand lies in the consumer’s minds (Keller, 2000). The image
of a brand from the consumer’s view may be different from what the firm desires. The image
formation in the mindset of consumer is subject to the internal and external factors. Koubaa
(2006) claimed that internal factors are consumer’s personal characteristics and external
factors which also known as umbrella brand image involved product features and country
image perception.
Brand image represents an important aspect of marketing activities; branding and
market offering with varied definition and approaches to its conceptualization (Burleigh and
Sidney, 1955; Dobni and Zinkhan, 1990; Martinez and Pina, 2003). A widely accepted view
is that brand image represents customers’ perceptions of a brand as reflected by the brand
associations held in consumer memory (Herzog, 1963; Keller, 1993a, b). Brand image is,
therefore, the mental picture or perception of a brand or a branded product or service and
includes symbolic meanings that consumers associate with the specific attributes of a product
or service (Dodni and Zinkhan, 1990; Padgett and Allen, 1997; Aperia and Back, 2004).
Brand image represents the reasoned or emotional perceptions consumers attach to
specific brands which distinguished by Low and Lamb (p. 352, 2000) a set of belief held by
customers about a particular brand, based upon some intrinsic and extrinsic attributes (Aaker,
1994; Gracia Rodriguez and Bergantinos, 2001).
Brand image, which usually includes the product’s name, its main physical features
and appearance including the packaging and logo, and its main function, is the key to answer
the question of how the consumer chooses among alternatives brands after information
gathering processes of buyer behavior. The perspective is focusing on psychological attributes
with certain life-style, a self image or an ascribed status. For that reason, marketing
academicians and practioners see the symbolic image of products or services as more
important in their success (Aaker, 1991).
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2.5 Brand Perceived Quality
Perceived quality can be defined as the customer’s perception of the overall quality or
superiority of a product or service with respect to its intended purpose, relative to
alternatives” (Aaker, 1991). In 1990, Zeithaml et. al. also had defined perceived service
quality as “the degree of organization success in meeting the customer satisfaction”.
Customer’s evaluation of their past service consumed and service expectation are the factors
that may contribute to their perceive quality result to the particular restaurants. Yoo et. al.
(2000) added that customer may evaluate the restaurant’s product quality through their past
experience, their economic level and the uniqueness of the product. . Perceived quality
measurement are so called subjective because its derived from customer’s product comparison
with the competitors. Based on Aaker (1996a) statement in his research, Perceived quality is
believed able to hike up customer satisfaction through past experience that provided from last
product or service consumption.
There are several factors that may manipulate customers’ assessments of restaurant
quality. Several last studies had determined that the major keys of overall restaurant service
quality are qualities of the food, environment of restaurant’s physical and also their delivered
service (Dulen 1999; Susskind & Chan 2000). Sulek & Hensley (2004) clarifies that the
quality of the food is the most significant elements for the restaurant service experienced
among those three elements. However, the important consideration that the restaurant’s
operator should concerned more is their customer need and satisfaction (Peri, 2006).
According to Wu and Liang (2009), they had affirmed that there are three service
encounter in the setting of restaurant which are comprised of environmental elements that
examplized by design of the restaurant, surround sound and music, and also the lighting;
restaurant staff that have professional skills and high degree of reliability; and also different
attribute or behavior of the customers. After several testing been done, thankfully, in 1985,
Parasuraman with the other researchers had invented the SERVQUAL instrument that
believed may evaluate the service quality from the customer’s perspective (Parasuraman et.
al. 1985). This SERVQUAL had used five service dimensions to evaluate service quality,
which are tangibility, reliability, responsiveness, assurance and empathy. Later, 10 years after
that, Stevens, Knutson and Patton (1995) had created an instrument called DINESERV which
been modified from SERVQUAL that purposely created to evaluate customers’ opinions of
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restaurant service quality. This instrument later had proposed as a reliable and relatively
simple tool in a way to determine the customer’s view a restaurant’s quality.
Three years after they invented SERVQUAL instrument, Parasuraman et. al. (1988),
had used SERVQUAL to represents service quality as the difference between a customer's
expectations for a service offering and the customer's perceptions of the service received,
requiring respondents to answer questions about both their expectations and their perceptions.
The uses of perceived quality as contrast to actual service received make the SERVQUAL
measure an attitude measure that is related to, but not the same as, satisfaction (Parasuraman
et. al., 1988). Parasuraman et. al. (1991) presented some revisions to the original
SERVQUAL measure to remedy problems with high means and standard deviations found on
some questions and to obtain a direct measure of the importance of each construct to the
customer.
DINESERV items included five service quality dimensions. In the restaurant industry,
tangibles refer to a restaurant’s physical design, appearance of staff and cleanliness.
Reliability involves freshness and temperature of the food, accurate billing and receiving
ordered food. Responsiveness in restaurants relates to staff assistance with the menu or wine
list or appropriate and prompt response to customers’ needs and requests. Assurance means
that restaurant customers should be able to trust the recommendations of staff, feel confident
that food is free from contamination and be able to say any concern without fear. Finally,
empathy refers to providing personalized attention to customers by anticipating special dietary
requirements or by being sympathetic towards customers’ problems.
Consumers tend to become more and more demanding as the recent market turn out to
be more challenged. In the event of challenges such as the growing worldwide opposition, the
continuous increase in customer thoughts and customers’ subsequent demands as the quality
of service increase (Parasuraman et al., 1988; Rao and Kelkar, 1997), service firms incapable
to successfully fulfill the needs and wants of customers risk not only losing displeased
customers to opponents, but also losing of profits and, as a result, failure. Thus, these
challenges are forcing firms to take strategic planning which will enable them in creating and
having competitive advantages (Kandampully, 1998).
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As mentioned by Berry et al. (1988), service quality has become an important
differentiator and the most influential competitive arm which diverse leading service firm
own. While Zeithaml, (1988) stated that, in order to gain customer loyalty, leading service
firms struggle to sustain a first-class quality of service. Therefore, a service firm’s strategic
achievement in a market is basically discovered by its capability to develop and sustain a
great and loyal customer base. The link between perceived service quality and customer
loyalty are comparatively underdeveloped (Bloemer et al., 1999; Gremler and Brown, 1996)
in spite of the reality that customer loyalty is necessary for business survival (Reichheld,
1993).
According to Gronroos (1984), he had defined service quality as “a perceived
decision, consequential from an assessment process where customers evaluate their
expectations with the service they expected to have received” (p. 38). The author also
suggested that service quality should be divided into technical quality (what is done) and
functional quality (how it is done). Gronroos (1984) further declared that the quality of a
service is dependent on two variables: expected service and perceived service, and that any
previous experience with a service could influence the expectations of a consumer, whereas
the perceived service is the result of a consumer’s perception of the service itself. Service
quality has also been described as a form of attitude, related but not equivalent to satisfaction
that results from the comparison of expectations with performance (Bolton and Drew, 1991;
Parasuraman et al., 1988).
2.6 Brand Loyalty
Oliver (p. 34, 1999) acknowledged that brand loyalty is “an intensely held
commitment to repurchase or regularly visits a favored product or service over and over
again, consequently causing the repetitive same-brand or same brand-set purchasing, despite
certain circumstance influences and marketing efforts have the potential to cause switching
behavior”. Olsen (2002) has mentioned that loyalty is in general measured by behavioral
measures rather than attitudinal measures even supposing there might be variation in loyalty
measures between attitudinal loyalty and behavioral loyalty.
As suggested by Dick and Basu (1994), brand loyalty unique treatment is the positive
word of mouth and greater argument among loyal customers to competitive strategies. It
shows that such findings support marketers to build and sustain brand loyalty among
customers in food service industry. In sequence to accomplish for such objectives, goals and
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aims, the facts on factors of determining the plan of brand loyalty among customers becomes
an essential issue. The same researchers further supposed that even a moderately necessary
repeat purchase or repeat patronize in particular restaurants might not explained true loyalty to
a product or restaurant, but could simply result from certain situation such the availability of
other restaurants, location and convenient service hours. In their framework, attitude is an
obligation for true loyalty to happen. In view of that, they define repeat purchasing with no
favorable attitude as false loyalty. Comparable judgment were found in Assael (1998) who
conceptualizes brand loyalty as repeat purchase under high participation and defines repeat
purchase under low involvement as disinterest.
According to Aizen and Fishbein (1980), the relationship between attitude and
behavior is well accepted among consumer researchers although this relationship emerges to
be most feasible when applied to high participation situations. Presuming, even with regard to
regularly dine in certain restaurants; some customers will put forward more involvement to
the revisit decision than others. Understanding the role of relative attitude to brand loyalty is
important for food service managers in order to enhance and maintain consumers’ repeat visit
to their restaurant outlet. Only if an increase in relation attitude results in an increase in repeat
visit, it is meaningful for food service operator in seeking to influence repeat visit through
attitude building marketing strategies.
Buzzell et al., (1975) and Raj, (1985) had stated that firms that have large number of
customers that have high loyalty degree have been shown to have high percentage of market
share (Buzzell et al.,1975; Raj, 1985).The market share, in turn, has been shown to be
associated with higher rates of return on investment. Jacoby (1971) had clarifies the definition
of brand loyalty as “repeat purchase behavior” but he also stated that this behavior is a
function of psychological processes. The customer behavior of repeat purchase is not just an
arbitrary response but it is the consequences of some proceeding factor such as psychological,
emotional or situational factors. Likewise Dick and Basu (1994) point out that even a
relatively important repeat purchase may not reflect true loyalty to a product but may merely
result from situational conditions such as brands stocked by the retailer.
Among the concepts used to describe a strong brand, brand loyalty is perhaps the one
that has received the most attention by academics and practitioners (Malai and Speece, 2005;
Tsao and Chen, 2005). For that reason, there are several definitions and measures of brand
loyalty; some focus on the attitudinal dimension and others focus on the behavioral aspect of
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brand loyalty (Gee et al., 2008; Oliver, 1997). Oliver (1997), noted that brand loyalty is a
deeply held commitment to rebuy or repatronize a preferred brand consistently in the future,
despite situational influences and marketing efforts having the potential to cause switching
behavior.
In most models of brand equity, brand loyalty is posited to either a component (Aaker,
1991) or an outcome (Erdem amd Swait, 1998) of brand equity. Brand loyalty is a valuable
asset for every brand. Research has indicated that the cost of recruiting new customers is very
high due to advertising, personal selling, establishing new accounts and customer training
(Mittal and Lassar, 1998). More importantly, profits generated by loyal customers increase
significantly over time which founded by Reichheld and Sasser (1990).
It is widely considered that loyalty is one of the ways with which the consumer
expresses his/her satisfaction with the performance of the product or service received
(Bloemer and Kasper, 1995). Therefore, it is not surprising that one of the key global
constructs predicting consumer behavior as been overall satisfaction. There are many studies
that have examined the relationship between this variable and loyalty, where the latter has
been approached as a repurchase intention (Anderson and Sullivan, 1998; Cronin and Taylor,
1992) or as an emotional and psychological bond or commitment (Bloemer and Kasper, 1993;
Samuelsen and Sandvik. 1997).
The preceding literature review demonstrates the lack of attention paid to “brand
trust”, in spite of the empirical and theoretical evidences existing about its relationship with
satisfaction (Hess, 1995; Selnes, 1998) and loyalty (Morgan and Hunt, 1994). According to
Hess (1995), this is explained not only by the newness of the research that characterizes the
interactions between a customer and a brand as a long term relationship, but also because
there is a lack of accepted measures of brand trust. In any case, this situation contrasts with
the variety of opinions (Fournier, 1995; Gurviez 1996; Morgan and Hunt, 1994) supporting
the importance of trust in developing positive and maximum expression of a successful
relationship between the consumer and the brand.
Whatever represents the meaning of brand loyalty as the list of authors with varied
approaches seems endless, the fact remains that brand loyalty exist as a result of the
interaction between a customer’s relative attitude to a special brand, and also their repeat
purchase behavior for the brand. Brand loyalty may, therefore, exist as a result of repeat
purchase or due to the absence of perceived differences between brand alternatives (Muncy,
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1996). It could also exist as a result of simple habitual purchase behavior (Assael, 1998),
which could mean long or short term involvement on repeat purchasing of a market offering
or brand.
Knowledge of brand loyalty is, therefore, necessary as according to Wood (2000)
brand image tailored to the needs and wants of a target market so as to facilitate brand loyalty.
That is customer involvement in repeat purchase behavior on a brand and the success or
otherwise of this process determines the degree of brand loyalty and will probably have
influence on customer long term loyalty.
2.7 Brand Value
Brand value is, on the other hand, a notion that is not really well definite (Zeithaml,
1988). Principal of this theory is the view that brand values possibly be as delicate in the eyes
of the consumer at the present time. Brand values idea entails that what makes a brand is its
characteristics or personality which differentiates it from others and that the presence of this
characteristics conveys several usefulness, nevertheless tangible to the costumer. There is a
rigorous organization of study supporting the idea of brand personality as a source of value to
the consumer (King, 1973). Conversely, what seems to be occurrence is that the
transformations in the industry environment are tending to lessen the power of that value.
In contrast, brand value is still a key aspect in many buying decisions even if it
appears that there has been a return to a concept of value based on conventional tangible or
core benefits rather than the more emotionally-based, which includes intangible benefits
(Christopher, 1996). The beginning of a revolution by customers who were preliminary to
subject the worth of paying radically more for branded products which were no longer seen as
delivering a proportionate amount of added value (The Economist, 1994a)
If the restaurant can offer a superior value package with a considerable constructive
economic impact on the customer, then the possibility is that they will win over other
restaurant competitors. Even though value is perceptual, but it encompasses the customers’
perceptive of what they are receiving compared to what they are paying (Christopher, 1996).
From the customers’ standpoint, value is created when the benefits obtained from a
transaction exceed the costs of ownership. The same idea can be expressed as a ratio:
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Customer value = Perceptions of benefits
Total cost of ownership
Hence, the force of product or service favored by the customers as offered by the
restaurant operators are value for money, convenience, reliability, safety and functionality
(Christopher, 1996). In order to gain competitive advantages in terms of value, the restaurant
operators in the industry need to define, communicate and deliver a value proposition which is
acknowledged by the target markets as the superior proposal to them compared to other
competitors.
In general, brand value relates to the influence of a brand in the marketing mix or the
impact of the brand name on reactions to other features of the marketing mix, such as the
reactions to the actual product. Brand value increases as the brand becomes better known and
as the company supports the brand at the different contact points.
In addition, value can be described as the quality of a thing which makes it more or
less desirable. This definition of value implies that value and the perception of value are based
on numerous personal, product and services. Examining consumers perceptions of value and
developing strategies based on these perceptions is a difficult task for restaurant. Value has
been provided to customer through pricing and branding strategies and the offering of
additional services. Thus, an orientation toward providing better value to customers whether it
be via brands, pricing strategies or services, appears to be one of the differential advantages
for restaurants.
In the food products industry which including beverages, businesses is cope with the
challenge of seemingly or factually homogeneous products by creating brands (Woodruff,
1997). Srinivasan (1979) demonstrated that the brand adds a value benefit of its own
independently from those of the product.
Marketing experts generally agree that there is a strong link between advertising and
building value for a brand (Cobb Walgren et al, 1995). Miller and Berry (1998) note that
established brands are stronger and more robust than many suspected. Brand value goes
beyond brand awareness o include favorable attitudes toward the brand (Moore et al., 2002).
Building bran equity is related to the degree of brand recognition, the strength of consumers’
mental and emotional associations, as well as perceived brand quality (Aaker, 1996). When
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brands are positioned correctly, consumers feel strong ties toward them (Cobb Walgren et al.,
1995).
Brand perceived value is the evaluation of a cycle including consumption and
purchase experiences (Cronin et al., 2000). As a consequence, the purchase experience
participates in the creation of value. In this perspective, the restaurant is a strategic location
where a physical encounter takes place between brands and consumers. Thus, at the point of
purchase, brands are able to deliver services in addition to physical products, which is a way
to increase perceived value and differentiation (Buchanan et al., 1999).
Zeithaml (1988) note that customer value as the consumer’s overall assessment of the
utility of a product based on perceptions of what is received and what is given. Otherwise,
according to Monroe and Krishnan (1985) and Dodds et al. (1991), perceived quality us
positively related to perceived value. Recognizing a brand name or logo can lead to positive
customer assessments in terms or considering a product as good value for money or a good
bargain.
Furthermore, Sheth et al. (1991) developed an important theory that explains the basic
values of consumption that guide consumers when they make choices. Following Hunt
(1995), it is equated here with the worth that customers as individuals, as market segments, or
as a mass place on the consequences they attribute to a product or service. Most commonly,
customer value means judgments or assessments of what a customer perceives he or she has
received from a seller in a specific purchase or use situation (Bagozzi, 1999). Woodruff
(1997) defining customer value is as customer’s perceived preference for and evaluation of
those product attributes, attribute performances, and consequences arising from use that
facilitate achieving the customer’s goals and purposes in use situations.
Value is defined in terms of customer needs and what is desirable. Rakeach (1973)
suggested a value is an enduring belief that a specific mode of conduct or end-state of
existence is personally or socially preferable to an opposite or converse mode of conduct or
end state of existence. The development of means-end theory (Gutman, 1982) enables
laddering techniques to ascertain customer values. There are many subtle variants of
Rekeach’s definition. Some define value in terms of the mental images or cognitive
representations underlying customers’ needs and goals (Peter and Olson, 1987), ultimately
affecting customers’ responses in particular situations (Schiffman and Kanuk, 1987).
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A brand is influenced by consumers and their behavior and attitudes toward brand,
which are in turn affected by factors that are mutual and interactive. These factors affect
brand cognition, or the brand recognition of customers, which is how the brand accrues its
value (Low and Blois, 2002). According to Wood (2002), the process of the generation of
brand value includes brand cognition, brand description, brand strength generation and brand
value creation. Brand value is classified as an intangible asset of a company and thus is
adequately reflected in its financial results.
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3.0 RESEARCH METHODOLOGY
3.1 Introduction
Derived from the previous chapter that has been discussed above, this research study
is mainly about the factors that contribute to customer satisfaction among customers in local
restaurants and also quick service restaurant. The factors that influence the different
satisfaction among customer are reflected from different view and experience of brand
awareness, brand image, brand perceived quality, brand loyalty and also brand value.
The primary research method used in the study of customer satisfaction which
analyzes the relationship; brand awareness, brand image, brand perceived quality, brand
loyalty and also brand value. It is based on a survey which 300 responses collected from
customers around Klang Valley, Malaysia. The questionnaire used to collect data which the
customers required to compare their satisfaction between local restaurant and quick service
restaurant. Regression analysis and several statistical tests were used to test and analyzed the
influence of each parameter on customer satisfaction. The results can be implemented to SME
in term to continuous improvement on their business products and services by enhancing the
elements that can contribute to increase customer satisfaction.
3.2 Respondents of the Study
Respondents are one of main factor that need to be considered. Its plays important
roles in derive the research results. In this study, the respondents are among the customers in
Klang Valley which from different education level background and different range of age.
The survey conducted in Klang Valley area due to the great number of restaurants which
serve varieties of food and beverages.
3.3 Research Instrument
The research was conducted by using primary data. The questionnaire was developed
based on the extensive literature review and adapted from previous survey question from
Stevens, Knutson and Patton (1995). It was divided into seven section and using the interval
scale and nominal scale for demographic section. Interval scale is used because of response to
various items that measure a variable can be tapped on a five-point scale, which can thereafter
be summated across the items. Moreover, the Likert scale is designed to examine how
strongly subjects agree or disagree with given statements on, with anchors “Strongly Agree”
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as 1, “Agree” as 2, “Neither Agree Nor Disagree” as 3, “Disagree” as 4, and “Strongly
Disagree” as 5. A survey was used to evaluate customer satisfaction of the restaurants that
their always visited.
First section of the questionnaire is to determine customer awareness and knowledge
regarding the restaurant that there have visited. The second section is to identify the opinion
toward the brand image of the restaurant that customer have visited. On the third section, is to
recognize the customer views towards the perceived quality of the restaurant that they have
visited. Next, is to identify the attitude towards the brand loyalty and to identify the views
toward the brand value of the restaurant. A part from that, the next section is to measure
customer satisfaction towards the restaurant. The last section of the questionnaire consisted of
demographic questions. At the end of the questionnaire, it is include an open ended question
to give some space for corresponded to give their opinion or suggestion for the sake of this
research.
3.4 Research Procedure
Pilot studies is important in ensure the effectiveness of the questionnaires. Before the
actual questionnaires are distribute to the respondents, pilot studies on a small scale were
conducted in gathering information from a limited number of students. A total 25 students are
involved in the pilot studies. This is to assess the validity of the research instrument. During
the actual study, 300 questionnaires were distributed to the student in Klang Valley areas.
3.5 Data Analysis
The questionnaires were distributed to 300 respondents in the area of Klang Valley
that were included in different education level background and different age. Data were
collected a week after the questionnaires were distributed. Moreover, questionnaires were
distributed to the students that were willing to participate in the research.
Data were analyzed using the Statistical Packages for Social Science (SPSS) version
18.0 for further understanding between the relationships of the independent variable to
dependent variable. In order to meet the survey’s goals, reliability analysis and multiple
regression analysis were conducted.
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4.0 RESULTS
4.1 Reliability analysis of the scale
Local RestaurantVariables Cronbach’s Alpha Coefficients
Brand Awareness 0.871Brand Image 0.834Brand Perceived Quality 0.823Brand Loyalty 0.883Brand ValueCustomer Satisfaction
0.7950.874
Quick Service RestaurantVariables Cronbach’s Alpha Coefficients
Brand Awareness 0.772Brand Image 0.740Brand Perceived Quality 0.725Brand Loyalty 0.851Brand ValueCustomer Satisfaction
0.6560.789
Prior to testing the hypotheses, each multi-item scale was examined for reliability
using Cronbach's coefficient alpha as the indicator. All construct scales were analyzed using
Cronbach’s alpha to determine if the scales exhibited acceptable levels of reliability (Nunnaly,
1978). All the Cronbach’s alpha value more than 0.7 indicating that all constructs had
acceptable reliability (Othman et al, 2000). The coefficient was uniformly very high as shown
in Table above. The Cronbach’s alpha for Brand Awareness of local restaurant is 0.871, while
Brand Image is 0.874. Further, Brand Perceived Quality Cronbach’s alpha for local restaurant
is strong which 0.823 is, whilst 0.883 is for Brand Loyalty. Besides that, 0.795 is the
Cronbach’s alpha of Brand Value for the local restaurant. Overall, the customer satisfaction in
local restaurant is 0.874.
On the other hand, the Cronbach’s alpha for the QSR is also relatively high coefficient
although the reliability is slightly lesser rather than local restaurant. The coefficient of Brand
Awareness in QSR is reported as 0.772, 0.74 (Brand Image), 0.725 (Brand Perceived Quality)
and 0.851 (Brand Loyalty). Brand Value, however is comparatively lower which 0.656 as
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compared with local restaurant is. The customer satisfaction is still high (0.789) even though
somewhat lessen than local restaurant.
4.2 Multiple Regression Analysis
4.2.1 Anova
Local Restaurant
Variables R R Square Sig.
TLBA, TLBI, TLBP, LTBL, TLBV
0.849 0.720.00
0
Quick Service Restaurant
Variables R R Square Sig.
TQBA, TQBI, TQBP, LQBL, TQBV
0.833 0.693 0.000
Multiple regression allows prediction of a single dependent continuous variable from a
group of independent variables. It can be used to test the predictive power of a set of variables
and to assess the relative contribution of each individual variable. Generally, the results of all
dimensions of Brand Equity for both local and QSR restaurants are perfectly significant with
the customer satisfaction. In consequence, the hypotheses of the customer satisfaction are in
general accepted. The coefficient relation, r of local restaurant between Customer Satisfaction
and all dimensions of brand equity (Brand Awareness, Brand Image, Brand Perceived
Quality, Brand Loyalty & Brand value) is significant and positive (0.849). In contrast, for
QSR, the coefficient relation, r between customer satisfaction and all dimension of brand
equity is also strong and positive (0.883).
The coefficient of determination, denote as r², indicate how much contribution of
independent variable in explaining the response variable. For local restaurant, the coefficient
of determination is 0.72. The interpretation of this figure is 72% of the total variation in
customer satisfaction of local restaurant can be explained by all dimension in Brand Equity
and other 27% are clarified by the other factors. In QSR, the r² is 0.693, which indicated that
69.3% of total variation in the Customer satisfaction of QSR can be described by the Brand
Equity dimensions and another 30.7% are explicated by other factors.
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4.2.2 Coefficient
Local RestaurantVariabl
eStandardized
Coefficients BetaSignificant Level
TLBA 0.312 0.000TLBI 0.043 0.381TLBP 0.153 0.001TLBL 0.385 0.000TLBV 0.059 0.231
Quick Service RestaurantVariabl
eStandardized
Coefficients BetaSignificant Level
TLBA -0.097 0.039TLBI 0.163 0.000TLBP 0.044 0.334TLBL 0.522 0.000TLBV 0.315 0.000
The next thing we want to know is which of the variables included in the model
contributed to the prediction of the dependent variable. We find this information in the output
box labelled Coefficients. Look in the column labelled Beta under Standardised
Coefficients. To compare the different variables it is important that we look at the
standardised coefficients, not the unstandardised ones. ‘Standardised’ means that these
values for each of the different variables have been converted to the same scale so that we can
compare them.
Then, look down the Beta column and determine which beta value is the largest
(ignoring any negative signs out the front). In the local restaurant, the largest beta coefficient
is 0.385, which is for Brand Loyalty. This means that this variable makes the strongest unique
contribution to explaining the dependent variable which is Customer Satisfaction, when the
variance explained by all other variables in the model is controlled for. Second strongest
contributon is Brand Awareness (0.312), followed by Brand Perceived Quality (0.153). Next,
the Beta value for Brand Value was slightly lower (0.059), on the other hand Brand Image is
0.043 indicating that it made less of a contribution.
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Conversely, for QSR, the Brand Loyalty contributes the strongest beta coefficent
which is 0.522, then followed by Brand Value with 0.315. Subsequently, Brand Image give
0.163 beta coefficent, Brand Awareness is 0.097 and Brand Perceived Quality is 0.044. This
demonstrated that Brand Perceived Quality is less significant for QSR, however as a whole,
the dimension is significant as shown in Anova table in column Significance.
Regression analysis for local restaurant also produced a significant positive result. The
finding of Brand Awareness and Brand Loyalty are both perfectly significant. Thus, the H1a
is supported; when customers aware of the existence of the local restaurants’ brand, they will
be more satisfied. The result also applies in the H4 of brand loyalty whereas if the customer
loyal to the restaurant, then they will be a satisfied customer.
H2a is tested by examining the link between Customer Satisfaction and Brand Image.
As in table 1, regression results show Customer Satisfaction has significant positive
relationship with Brand Image (0.01). That is, the Restaurants with established image will
have satisfied customers, hence H2 is supported.
H3a, (There is positive relationship between customer satisfaction and Brand
Perceived Quality), also tested by evaluated the regression analysis. The result demonstrates
that the insignificant of multiple regression analysis of 0.381. That is, the H3a is less
significant to the customer satisfaction in local restaurant. For H5, the finding of Brand Value
is insufficient and insignificant (0.231). Though, as mentioned before, as a whole the result is
significant to the customer satisfaction in local restaurant. Hence, the hypothesis of ‘There is
positive relationship between customer satisfaction and Brand Value’ is approved.
From the QSR perspective, the multiple regression analysis is perfectly significant to
the relationship of the Customer Satisfaction towards Brand Image, Brand Loyalty and Brand
Value. The hypotheses of H2b (Restaurants with established will have satisfied customers),
H4b (If the customer loyal to the restaurant, then they will be a satisfied customer) and H5b
(There is positive relationship between customer satisfaction and Brand Value) has been
approved.
In addition, the relationship of Customer Satisfaction and Brand Awareness of QSR is
also agreed by the results illustrated in the multiple regression significance level of 0.039.
This explains the acceptability of H1b which stated that when customers aware of the
existence of the QSR restaurants’ brand, they will be more satisfied.
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H3b, on the contrary is not portray a significant level in the multiple regression
analysis. The 0.334 is not acceptable as significant, but then it is considered significant in
general, thus the H3b (There is positive relationship between customer satisfaction and Brand
Perceived Quality) is not rejected.
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5.0 CONCLUSION AND DISCUSSION
In an industry that is becoming increasingly international, such as services, it is
important to develop standardized measure to adequately capture consumer satisfaction, brand
awareness, brand image, brand perceived quality, brand loyalty and brand value in local
restaurant. Customer satisfactions have positive relationship towards five dimensions discuss
above. Customer satisfaction can be achieved by either emphasizing the brand, product and
services via satisfied customer needs and want. It appears that there are many benefits flowing
from increases customer satisfaction. Higher satisfaction scores lead to higher levels of
customer retention.
The restaurant cannot reach the highest stage without the customer’s help. The
customer would finally to ensure the success of the restaurant. By then, the restaurant should
take progressive action in ensuring the customers are satisfied with the service quality,
product, and also the branding factor. Interaction between the customer and the employee is
also important in ensuring the effectiveness of the service.
Through such measurement, restaurant can learn how they are doing from the point of
view of their targeted consumers, identify what it takes to compete, find ways to deliver better
service to their customers and compare their achievements with competitors. By doing so,
they will be positioned to create satisfied, loyal and committed customer who “will not only
return for repeat business but will also bring their friends and family with them” (Veloutsou et
al., 2005). Clearly, satisfaction are linked to brand awareness, brand image, brand perceived
quality, brand loyalty and brand value.
5.1 Managerial Implications
The results of our study confirm to a large extend the proposed hypotheses and
suggest a number of important managerial implications for consumer researchers and brand
managers. First, to the best of our knowledge, this is the first study that attempts to measure
relative customer satisfaction on Malaysia SME restaurants, in fact covers the comparison to
QSR restaurants. For that reason, local SME operators enable to utilize this study as tools for
an area of improvement in their branding aspects.
This study has clear implication for Malaysia’s SME restaurant towards the service
quality and customer satisfaction. It can be considered as an approach that captures the nature
of satisfaction and loyalty of customers towards the restaurants. Therefore, it is expected that
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customers have their own perspective, need and want to full fill by the service provider. Brand
awareness, brand image, brand perceived quality, brand loyalty and also brand value is play
huge roles in measured customer satisfaction.
Furthermore, result supports that in order for service industry deal with the factor that
can improve the customer satisfaction on local SME restaurants. Comparing with the QSR
showed that the restaurant is more systematic, strategic and have clear vision and mission.
These points should be instilling in SME restaurant to ensure they can provide better service
in gaining customer satisfaction. Since the relationship of customer satisfaction increases with
the repeat purchase of services, loyalty requires special and primary attention to ensure the
restaurant can retain their customer.
As ratified by the respondents, the strongest contribution for customer satisfaction of
local SME restaurant is Brand Loyalty. Customers are less sensitive towards any
circumstances that exist for the particular restaurant, but they prone to visit them regularly.
Therefore, it is important to the local restaurant operator to enhance on their Brand Loyalty
aspects. Alas, our local SME restaurants possess little effort in retaining their customers.
Investment for attracting new customer is basically more costly than sustaining existed
customers. Customer Relationship Programs applied in most QSR such as McDonald
supposedly developed in our local restaurants so that the bonding between restaurants and the
locals will be created. By adopting such an approach, companies can gain long-term
competitive advantage by optimally delivering value and satisfaction to the customer and
extract business value from the exchange (Kumar, 2010).
As results demonstrated that Band Awareness in local SME restaurants is considered
crucial, nonetheless in QSR the results showed that it is less significant to the customer
satisfaction. As mentioned Richarm and Colias (2007), things change with time. As consumer
preferences change, and as different brands alter their messaging and positioning strategies,
the perceptual also changes. In other words, in spite of of any promotional and marketing
effort highlighted in order to create the brand awareness, consumer will visit QSR as they
already conscious on the branding of QSR. This reflects the strong perception of brand
awareness of QSR to the extent that it requires less effort in marketing.
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5.2 Limitations and future research
This study’s contribution must be considered in light of its limitations. First and
foremost, results are obtained from different profile demographic of customers that participate
in the questionnaires survey. This study is actually to help Malaysia’s SME in order to
perform better product and services toward customers. Given the great diversity of service
industries, it would helpful to carry out similar studies in other service factory industries.
Further shortcomings of the study resulted from problem in the measurement of overall
satisfaction. More research may be needed to develop a valid measurement tool to assess the
elements of satisfaction in a way that does not elicit fatigue, boredom or inappropriate
response behavior from respondents (Drolet and Marrison, 2001). Additionally, more research
is needed in the field of developing a valid measurement tool to assess the services cape.
The limitation of the study derives from the sampling context and procedures to
collect the primary data. A more systematic probabilistic sampling procedure that would
entail larger nation-wide samples is needed in order to affirm the present results. In addition,
tapping instrumental along with affective commitment might enhance the understanding of
the customer satisfaction relationship. In conclusion, this study has laid the foundation for
future researchers to explore these relationship using more experimental research designs.
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