Determinants of Consumer Preferences in Fast Food Restaurants. An Application of the DINESERV Model

Table of Contents

Acknowledgement

Abstract

1. Introduction
1.1 Background:
1.2 Problem statement:
1.3 Research Objective:
1.4 Research Question:
1.5 Scope of the study:
1.6 Limitation of the study:

2. Literature Reviews
2.1 Introduction of chapter
2.2 Theoretical background:
2.2.1 DINESERV:
2.3 Empirical studies:
2.4 Conceptual Framework:

3. Research Methodology
3.1 Introduction
3.2 Research Approach:
3.3 Research Purpose:
3.4 Research Design:
3.5 Data Source:
3.6 Target Population:
3.7 Sample Size:
3.8 Data Collection Technique:
3.9 Sampling Technique:
3.10 Research Instrument:
3.11 Face and Content Validity of Instrument:
3.12 Statistical Tool:
3.13 Model:
3.14 Hypothesis:
3.15 Definition of key terms:
3.15.1 Consumer preferences:
3.15.2 Definition of sub variables:
3.15.3 Price
3.16 Summary of the chapter

4. Data Analysis and Discussion
4.1 Introduction:
4.2 Pilot study:
4.2.1 Reliability Analysis:
4.2.2 Inter-item Correlation:
4.3 Data Screening (N=330)
4.3.1 Out of range values:
4.3.2 Missing value analysis:
4.3.3 Detecting Univariate and Multivariate outliers:
4.4 Descriptive Analysis:
4.5 Pearson Correlation, Mean and Std. Deviation
4.7 Exploratory Factor Analysis (N=306)
4.7.1 Convergent validity
4.7.2 Construct validity
4.7.3 Discriminant validity
4.8 Multiple Regression Analysis
4.8 Summary of the chapter

5. Conclusion and Recommendation
5.1 Conclusion
5.2 Recommendation
5.3 Future Recommendation:

References:

Appendix

Questionnaire

Acknowledgement

I bow my head to Almighty Allah, who blessed me the aptitude of accomplishing this massive work.

I deem it profound honor to express the depth of my gratitude to my respectable supervisor, Muhammad Ali, for his generous guidance and valuable advice without which the accomplishment of this study would have nearly been impossible. I believe that whatever I learnt from his personality will guide me in every field of life.

I am highly grateful to Miss. Isma Zaighum for her help during the study, her valuable guidance, inspiration and encouragement.

Last but not the least; I gratefully acknowledge the generous help of the family members specially my Uncle for his support and patience during all the previous years that make them the unseen co-worker of this project.

Abstract

The purpose of this research is to investigate the consumer preferences for the fast food restaurants by using modified DINESERV. The research is done in Karachi to target those who visit fast food restaurants. The variables used for this research are; consumer preference as a dependent variable and independent variables are DINESERV (Tangible, Reliability, Responsiveness, Assurance and Empathy) and Price. Sample data were conveniently collected from different fast food restaurants. Out of 330 respondents, 24 were outliers and 306 sample size is considered data from respondents. Factor analysis and multiple regression technique are used to achieve the objective. Results show that DINESERV subset Tangible, Reliability, Responsiveness and Price are the most significant variables among all.

Key words ; consumer preferences, DINESERV, price, fast food restaurants

1. Introduction

Fast food is one of those sectors which are growing day by day. Fast food is the item that can be arranged and served rapidly (Webster dictionary, 1951). Restaurants are providing good services to the people away from home. This study focus on those factors which influence consumer to prefer fast food by using price (Gillani et al., 2013) and DINESERV (Markovic et al., 2010) as variables. This chapter explains the background of the study, statement of the problem (research gap, past studies), objective, theoretical framework, research hypothesis of the study and limitation and that hypothesis were tested in the research.

1.1 Background:

The fast food service has now turned out to be more global than any time in recent years and it is rapidly gaining popularity in our country. Consumers form a perception regarding fast food restaurants by some past experiences or some other sources. To satisfy the consumer is the major element for the fast food restaurant because satisfied consumer will go back to the same restaurant.

There are many fast food restaurants running in Pakistan in which some are international and others are local. These restaurants are popular among in consumers. They prefer fast food restaurants due to some reasons like there is no one at home to cook for them or if they are college or university students they just go out for the entertainment or having fast food with some fun. People prefer fast food restaurants for the quick service and according to the Zhang et al., 2014 people can be retained with the good service quality.

In Pakistani context the competition is increasing in this industry by providing different kind of services and environment to the people. Ahmad et al., (2013) examine in today’s era, life is become so busier that people have taken their food outside their home. The tradition of taking fast food varying from society to society. In urban areas of Pakistan people consume more fast food than rural areas. The evidence of this fact is that in urban areas people don’t have much time, so they need good food in quick time. The only substitute they have to get prepared food from restaurants either to eat at restaurant and get the best service and physical environment or take away it in a low price. There are number of factors that considerable people to choose fast food restaurants.

In this research few international fast food restaurants as well as some other local fast food restaurants of Karachi are considered. Prabhavati et al., (2014) and Alonso et al., (2013) examined that the service quality has affirmative impact on the customer perception. Satisfaction is the most important factor for any business, without fulfillment of the consumers, the existence of the fast food industry is nothing. Attributes of service quality and price are used in this study. It is very important for the fast food restaurants to provide service and environment to the customers in a suitable price. This research focuses on those factors that influence the customer’s preferences to select particular restaurant. Numerous studies have done on the service quality as well as on the fast food restaurants; some aspects are included in this report and in recent days many studies have done on this topic related to fast food restaurant.

1.2 Problem statement:

Over the years, many studies have been conducted on the preferences of consumer on fast food. They use different models in their studies. There are two schools of thoughts for the fast food. One who don’t want to go and second who use to go to take the service of the fast food restaurants. The report in Dawn newspaper on 3rd march 2015, says the less nutritious food having large advertisement budget. These foods are taking people towards the obesity as well as there are some restaurants which are providing unhygienic food which cause diseases to the consumers. Consumer prefers fast food restaurants because of the service quality and also affordable price (Prabhavati et al., 2014). Alonso et al., (2013) examines those factors that drive the consumers towards the restaurants. The finding shows that the service quality is the major element that forces the consumer towards the restaurant. To measure the service of fast food restaurants DINESERV is used for this study. Stevens, Knutson and Patton (1995) developed DINESERV instrument. It is basically to measure the service quality of restaurants. It includes same five dimensions as that SERVQUAL but they modified the questionnaire. It fills the gap by modifying SERVQUAL instrument and by introducing DINESERV. Because SERVQUAL is adopted by the researchers by measuring all type of services.

To fulfill the consumer need and want service quality is one of the factors that influence the consumer (Markovic et al., 2010). In this study international and local fast food restaurant services are evaluated by using dining (DINESERV). There is some data available on this topic specifically on those factors which influence the consumers towards international or local fast food restaurant and to ensure these are appropriate for this industry or not. This study will help the consumers for the dominant factors of the various fast foods (domestic and international) to make the final decision and also to those service industries by improving these factors. As well as to those who are initial at this service industry.

1.3 Research Objective:

To find out the determinants of consumers preference towards fast food restaurants in Karachi by using DINESERV

1.4 Research Question:

What are the determinants that influence consumers to the fast food restaurants?

1.5 Scope of the study:

The study is for the academic purpose with the intension to know the consumer’s preference to the (international and local) fast food restaurants. This study is in the Pakistani context which helps to the new comers who want to explore the idea of this industry and also for the restaurants to improve the service quality and the environment of the fast food restaurant and as well as for those who are in initial stage in this sector.

1.6 Limitation of the study:

There are several limitations of the study. As this study is done in Karachi so data is collected from limited restaurants and areas of Karachi. The data is collected through adaption of the questionnaire by convenience sampling, so the results are not represents the whole population. Multiple regression analysis is used for this study; more advance method could have been used. There are other factors as well which can influence consumers for fast food restaurants.

2. Literature Reviews

2.1 Introduction of chapter

In this chapter includes theoretical background of the study, reviews of the past studies have been conducted which are related to my variables. The definition of the conceptual framework and the relationships exists between the dependent variable to the independent variables.

2.2 Theoretical background:

The service quality in the restaurant industry is difficult to estimate, because the assessments are not only made on service outcome as well as on the procedure of service delivery. Wu and Liang, (2009) examine that the service experience in the restaurant are consists of three main components; environment elements in which it includes the design of the restaurants, sitting arrangements, music and lighting. Second is the employee skills which includes reliability and professional skills and the third is the interaction with the customers. To know all attributes of the restaurant service quality a proper instrument should be used. To measure the service quality one of the tested instruments is called SERVQUAL which is developed by Parasuraman et al., in 1985. There are five dimensions of SERVQUAL used to evaluate the service quality; Tangible, Reliability, Responsiveness, Assurance and Empathy.

2.2.1 DINESERV:

DINESERV instrument is created by Stevens et al., (1995) to evaluate the customer’s perceptions of restaurant service quality. This instrument is adapted from SERVQUAL, in which it is considered that how customer views the restaurant’s quality. Bhakar et al., (2013) examine that quality is a perceptual, conditional and somewhat subjective attributes. Kiong et al., (2013) determine the consumer preferences by choosing an international brand. They indicate that the quality and promotion are the two main factors which can influence the consumers. The DINESERV model includes five service dimensions; Tangible, Reliability, Assurance, Responsiveness and Empathy. It is adopted from Markovic et al., (2010).

2.3 Empirical studies:

Diab et al., (2016) studies the impact of service quality on customers’ satisfaction and loyalty from the restaurant industry in Sudan using Dineserv model. Adopting this model from Stevens, Knutson and Patton (1995) by using 5 five dimension; Tangible, Reliability, Responsiveness, Assurance and Empathy. The study is quantitative. Data is collected of 4 restaurants of Sudan. A total 387 were the respondents. SPSS used to conduct the analysis. The result revealed that Reliability and Tangible have positive and significant impact on customer satisfaction. Among these two Tangible is the most significant factor on customer loyalty. They suggest that restaurants managers focus on the finding so that they can improve their marketing strategies.

Al-Tit, (2015) examined the effect of service and food quality on customer satisfaction and customer retention. He collected 400 data from different restaurant of Amman capital of Jordan in which 283 were valid for analysis. He use five dimensions of service quality; Tangible, Reliability, Responsiveness, Assurance and Empathy. The collected data analyze by using SPSS technique multiple regression. The results indicate that dimension of service quality tangible and responsiveness have positive and significant impact on customer retention and assurance have insignificant but positive impact on customer retention. The result suggests that service quality not only enhances customer satisfaction but also leads to customer retention.

Giritlioglu et al., (2014) measure the food and beverages service quality of Turkey hotels. Six variables were used to check the customer expectation and perception; Tangible, Reliability, Responsiveness, Assurance, Empathy and Healthy food. Questionnaires were distributed in four different hotels and 331 were the respondents. Exploratory and Confirmatory factor analysis were used to identify the dimensions of service quality. Tangible was the most significant impact in food and beverages service quality. After that reliability is the second most significant impact in customer expectation. The finding suggests that restaurants manager could understand how customer perceived their services and focus on these services may help hotel managers to increase the perceived service quality they offer to their guest.

Ergin & Akbay, (2014) examine the factors influencing consumer preferences toward international and domestic fast food restaurant. They use multi regression analysis and semantic differential scales for the study. They collected the data of 400 students of male and female from public and private universities. They use five variables which are brand name, cost, convenience, consistency and quality. The finding of this research that the most important elements factor among these five is convenience. The gender has an impact on the frequency of fast food consumption and age has no significant impact.

Belwal et al., (2014) examines the consumer preferences on the hypermarkets shopping. They use 13 different variables for their study; parking facility, cleanliness, praying facilities, support services, repeat purchase experience, quality, variety, courteous attendants, ATM machines, efficiency of payment, purchase experience, shopping experience, promotions and contest. There are 164 respondents. Results show that cleanliness, quality, efficiency of payment and parking facility are the major’s factors which prefer the consumers at hypermarkets.

Azim et al., (2014) study on those elements which impact the customer to the fast food restaurants in Pakistan. They collect the data of 148 respondents. In their study they show the economic survey report 2011-12 of Pakistan in which 67.55 million consumption of the fast food restaurant in a year and mostly consumption take between the ages of 21 to 27. They use eleven variables for their study; Physical environment, Price, Quick service, Staff cooperation, Cleanliness, Availability, Privacy, Food quality & taste, Suitable environment for family gathering, Preferential Treatment and last is Brand image. The result shows the positive impact of the variables on the customers’ selection of the fast food restaurants. The most influence factor among these is Physical environment and Food quality.

Prabhavathi et al., (2014) examine the consumer preference and spending pattern in Indian fast food industry of male and female. This study is held in two different cities of India with 100 respondents. They use statistical method. In their study they select four factors; health and service quality, taste and location orientation and ambience. The result indicates that all the factors are significant

Awi et al., (2014) examines those factors which affect the consumers repurchase intention of Myanmar restaurant. There are 400 respondents. They use five different variables; quality of the physical environment, service quality, brand preference, customer satisfaction and repurchase intention. Results indicate that all variables were statistically significant. If the restaurants want to increase the level of customers repurchase intension they should focus on these factors to develop the future benefits.

Nasir et al., (2014) find out those determinants on customer’s satisfaction level in fast food restaurants. They use five point Likert scale technique to collect the data. Their study was taking place in two different cities of Pakistan that is Gujranwala and Gujrat. Reason for selecting these cities is that the dining out is increasing day by day and number of restaurants are also increased. They use five different factors which satisfy the consumer; Price, Quality, Environment and Security. There are 225 useable respondents to collect the data by using Convenience sampling technique. Multiple Linear Regression was applied to test the results. The results show that price is the most significant factor in their study. This factor is mainly determinant among all by increasing the satisfaction level of the consumers.

Hemalatha et al., (2014) examine the brand loyalty on toilet soap of buying behavior of female consumers. They use seven different variables; brand name, product quality, price, design, promotion, service quality and store environment. There are 319 respondents. They use purposive sampling technique. The result indicates that all the variables have a significant impact and brand loyalty has the most significant impact.

Kiong et al., (2013) investigate the consumer preferences choosing an international brand of fashion products among Malaysian consumer. They use SPSS and have 200 respondents between 19 to 35 ages. There are four variables; quality, style, brand image and promotion. The results indicate that quality and promotions are the two important factors which influence the consumer towards international brand products.

Bhakar et al., (2013) examine how service quality, physical environment and employee behavior have an impact on customer perception. They use multiple regressions for the combined effects. In their study they use three variables; physical environment, service quality and employee behavior. In the end the result indicates that the all three variables have significant impact on the customer perception as combined and as individually.

Zhang et al., (2013) examine those factors which influence the effectiveness of online group buying in the restaurant industry through sample size of 842 participants based on the secondary data from the restaurant website. They use four variables; service quality, popularity, satisfaction improvement and return intention. The result shows that the positive impact of service quality and improvement satisfaction on retaining the group buying customers.

Ahmad et al., (2013) examine the consumer’s preferences between fast food restaurant and casual dining restaurant. There are 800 respondents in their study. They use three different variables; physical surrounding, service quality and food attributes. The data is collected between the ages of 21 to 64. The study is conducted in different cities of Malaysia. The finding shows that all three variables are significant towards the consumer’s behavior intension.

Kaynak et al., (2013) examine the consumer preferences for the fast food outlets in the developing countries among frequent buyers, old and consumers. There are 259 respondents in their study. They use seven attributes; price, taste, speed, delivery service, variety, seating capacity, and cleanliness. Correspondence analysis was used for the consumer perception. Results indicate that frequent buyers prefer location, speed, price, service and taste. Older consumer considers nutritional value, friendly staff, novelties and cleanliness. On the other side location, taste, variety and price were considered by the consumers.

Gillani et al., (2013) analyze those factors which influence the attributes of brand loyalty in cosmetics products in Peshawar. They use ten majors’ components of brand loyalty; perceived quality, promotion, price, expiry date, purchase decision, store environment, brand name, product quality, ingredients and design. There are 110 respondents. They use descriptive statistics, Correlation and regression analysis. Results indicate that the relationships of all variables are significant.

Alonso et al., (2013) examines those components that drive the consumer to restaurant choice. This study was conducted in southeast of U.S from the period of December 2009 to March 2010. In their study they use five variables; price, menu variety, product/service quality, food’s nutritional content and previous experience. They collected the data from 277 respondents of the university town. In the statistical findings it shows that the quality of the food and its varieties and taste are the key elements for choosing one restaurant to another restaurant. In general, the importance of the service and food quality, cleanliness and atmosphere, the restaurant cannot lay down these but they aim to consistently provide these elements

Kawa et al., (2013) examines those factors which affects consumer decision of Malaysian adult on cosmetics. They use factor analysis and multiple regression techniques. They use four variables; product quality, brand name, price, and store environment. The total 350 respondents are there. They conclude that brand name, and store environment are positive relationship with the consumer decision on cosmetics.

Ryu et al., (2012) studies the relationships among three elements of quality dimension (physical environment, service and food). They use three variables restaurant image, customer satisfaction and behavioral intensions through sample size of 300 participants between Octobers to November in Chinese restaurant. The result demonstrates that all three components of restaurant service quality were significant determinants of the restaurant image. They suggest the restaurant give prior to the quality and service not to the cost saving, to establish a good image in the consumer’s mind which differentiates them to their competitors.

Kristanti et al., (2012) investigate the service quality of the consumers towards fast food restaurant in Indonesia. They use five dimensions of service quality; tangible, responsiveness, reliability, assurance and empathy. The respondents were 553. They use descriptive statistics, customer satisfaction index, independent sample T-test and one-way ANOVA. The result indicates that in the model empathy has the biggest satisfaction index.

Khan et al., (2012) examine the factors for customer satisfaction in fast food restaurants in Peshawar. They use seven different variables in their study; Service quality, Physical Environment, Price, Promotion, Customer Expectation, Brand and Taste. They select four well known restaurants of the city. They collected the data by using non-probability sampling technique. Five Point Likert-scale questionnaires were designed. The total sample size was 120. Multiple regression and correlation test was applied to test the hypothesis. Results show that Service quality has positively significant impact on the Customers Satisfaction. Service quality is the most important factor for any type of business organization. To satisfy the customer’s organization should focus on the service quality.

Joshi, (2012) examines the consumer preferences towards the restaurants in Dehradun city. She uses percentage analysis, ranked analysis, chi-squared analysis and ANOVA test in her study. There are 89 respondents and she uses eight different variables; quality, rates, variety in the menu, efficiency, cleanliness, location, ambience, and good taste. The finding of this study is that people who visited to take dinner preferred quality and taste which are the two main elements for the restaurant.

Fah & Kandasamy, (2011) investigates service quality and customer satisfaction among hotels in Langkawi Malaysia. They use five dimension of the service quality; Tangible, Reliability, Responsiveness, Assurance and Empathy. Using mixed method by collecting the data of 300 and taking 12 interviews from tourist. Applying SPSS techniques like Cronbach-alpha, Pearson correlation and Multiple Regression. Among 300 respondents there are 52% were female and 48% were male. The results indicate that all five dimensions were significant impact on customer satisfaction. Among these dimensions Tangible is appears to be the most significant impact on customer satisfaction.

Shaikh & Khan, (2011) examined the impact of service quality on customer satisfaction and evidence from restaurant industry in Pakistan. The study has been conduct on the basis of Dineserv tool. The study is attempt from the point view of customer perception regarding the Pakistani Restaurant Industry. There are 400 respondents and the data is collect from the four different cities of Pakistan; Islamabad, Lahore, Karachi and Peshawar. The findings show that Responsiveness and Tangible are significant impact on the customer’s satisfaction. Responsiveness has more impact than Tangible. Fast food industry should prior to improve Responsiveness and Tangible items to satisfy the consumers. Furthermore educated owner or manager brings customer loyalty at peak.

Voon, (2011) examines the key factors of satisfaction and loyalty among consumer. He uses reliability analysis and multiple regressions. There are two variables; which are service environment (service escape and human service) food quality and the type of restaurants are fine dining, fast food and food court. There 409 respondents between 15 to 25 ages in his study. Result for the youth satisfaction the human service has positive impact on youth satisfaction in all three types of restaurant whereas for the loyalty price has positive impact in fine dining and food court and human service in fast food restaurant

Gurusamy et al., (2011) investigate the changes in consumer preferences to the organized retailing to the unorganized retailing. The study is descriptive. They use simple random probabilistic sampling technique. The respondents are 150. There are seven variables in their study; quality, service, choice, consistency, convenience, price and hygiene. Results show that people who like local stores from their point of view quality are the main element for them and on the other hand for the supermarkets same case for them, they also prefer quality in the product.

Habib et al., (2011) investigates the consumer preferences towards the fast food restaurants. Respondents are the two leading universities of Malaysia. There are 187 respondents. This study was done from the Malaysian, Chinese and Indian students, which fast food they prefer. The variables are; quality, freshness, suitable taste, food safety, attractive packaging, halal status, health reason, rapidity of service, easy to cook. The results show that food safety among three countries students is the main factor to prefer the fast food.

Qin et al., (2010) analyze perceived service quality in fast food restaurant of China. They use customer satisfaction, dimensions of service quality, food quality and price as a variable. There are 182 respondents. EFA and CFA used for the analysis of the results. Responsiveness, Tangible and Reliability are the most significant among the service dimensions. Price also has significant and positive relation with customer satisfaction. The Chinese restaurants should focus on these factors because Western FFR is more popular among people. These finding also suggests that some factors are still missing in the Chinese FFRs this need to be concern.

Islam et al., (2010). Identify those factors which affect the consumer preferences on Fast Food in Bangladesh through a sample size of 250 respondents. They collect the data from different universities students of Dhaka city. They use factor analysis and multiple regression technique. They use six variables in their study; accessibility and nearness, similar taste of fast food, quality and cost relationship, taste and discount, clean and hygiene, and self-service. They found that brand reputation has the positive and significant impact on consumer preferences among the rest of all. Other important factors include discount and taste, cost and quality relationship, similar taste and nearness and accessibility. They recommend fast food distributors or producer of Dhaka city focus on these factors so universities students will come to their restaurants Markovic et al., (2010) examine that the restaurants performance meets the expectation of the customers by using a modified DINESERV approach in Croatian restaurants. Their research is based on three research questions. What are the perceived service quality and expected service quality of restaurants, their differences and the modified structure of the DINESERV model. They use 35 attributes for the expected and perceived service quality. Among these 35 attributes, 29 represent the five subsets of DINESERV (tangible, reliability, responsiveness, assurance and empathy). They collect the data from 32 restaurants. The customer’s perceptions and expectations regarding restaurant service are measured on seven point Likert scale. The results indicate that the service quality of the restaurants has negative impact on the customer’s perception and expectation, that what customers are not getting the service quality that they expect from the Croatian restaurants. They suggest to the managers to improve service quality and meet the customer’s expectation. This study helps to the Croatian restaurant industry that they can increase their performance to satisfy the customers, build loyalty and also reputation of the restaurants.

Choi et al., (2009) investigates the evaluation of the restaurant selection preferences between residential and visitors. There are 10 variables for the consumer preferences; taste, price, portion, service, ambience, presentation, nutritious, reputation, cleanliness, variety. They use Statistical analyses (SAS). The result of this study are that there is no significant difference among the visitors and residential for the preferences of restaurant. Taste has the major factors for both of them.

2.4 Conceptual Framework:

Base on the previous researches the theoretical framework describes the concept of the study. Ergin and Akbay (2014) examined consumer preferences toward the fast food restaurants are affected by service quality. In this framework there are six independent variables; Price, Tangible, Reliability, Responsiveness and Empathy and one dependent variable; Consumer Preferences. Using DINESERV is to measure the service quality of the fast food restaurants. This is modified from SERVQUAL and adopted from Segaric et al. (2010).

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3. Research Methodology

3.1 Introduction

In this chapter includes the procedures which have been applied in the study. Moreover, it also includes the approach of the study, design, the purpose, sample size, target population and sampling technique. Furthermore, the statistical tool of this research is also discussed in this chapter as well as research instrument is also discussed, the face and content validity of the research instrument and model hypothesis of the study.

3.2 Research Approach:

Quantitative research approach is used in this study because the collected data is in a numeric form to find out the result of dependent and independent variables. In this research questionnaire is asked from the respondents in less time.

3.3 Research Purpose:

The study is about the fast food restaurant services. There are many studies has been conducted, Ergin and Akbay, (2014) have done on those factors which influences the consumer towards fast food restaurant. Alonso et al., (2013) work on those factors that drive the consumer to the fast food restaurant. Voon, (2011) investigates the key factors that satisfy the consumers from the restaurant. There are three types of research purpose, Explanatory, Exploratory and Descriptive. This study is an explanatory research because it is use to test or to revise a theory. In this research the hypothesis are tested and their credibility as well. This research also helps to examine the customer’s decision regarding the service of the fast food restaurants.

3.4 Research Design:

For this research, correlational analysis is used, which is also known as cross-sectional design. The cross-sectional design is used to find out the relationship between the dependent and independent variables, as well as how strong relationship is it and the direction of the variables either positive or negative. Researcher measures the dependent and independent variables as well as control variables if use in study (Tharenou et al., 2007).

3.5 Data Source:

Primary source is used to collect the data through the designed questionnaire. For pilot study the sample size is 40 and after that it includes in the final study which makes the total of 330. The respondents are the population of different areas of Karachi. They are the consumers who visit international and domestic fast food restaurants of Karachi. As this study is on the consumers so the questionnaire is distributed among them and it collected through survey questionnaire.

3.6 Target Population:

Target population in this study, are those respondents who visit restaurants in Karachi. The data is collected from the age group of 17 to 28 and above 29. The respondents are male and female, their qualification, monthly income and frequency of going to restaurant.

3.7 Sample Size:

Collecting the data from the population for research sampling technique is used. There are numbers of restaurant which are operated in Karachi, some are international and some are domestic. Thousands of consumers came to take the service of different restaurants. In this research 330 data were collected from different areas of Karachi, after detecting outliers 306 data were used.

3.8 Data Collection Technique:

In this study adapted questionnaire is used for collecting the data and the format is of Likert Scale. The format of Likert Scale is; 1) strongly disagree 2) disagree 3) neutral 4) agree 5) strongly agree (Dr. Rensis Likert, 1932).

3.9 Sampling Technique:

To achieve the objective of this study the non-probability convenience sampling technique is used to gather the data and test the hypothesis. Convenience sample is simply available to the researcher by virtue of its accessibility (Bryman, 2008). Most of the data is collected from the fast food restaurants which are located different areas of Karachi.

3.10 Research Instrument:

In this study there are one dependent and six independent variables which are adopted from different research papers. The dependent variable Consumer Preferences adopted from (Shafayat ullah and Islam, 2010). Price is adopted from (Gillani et al., 2013). In this study DINESERV is used to measure the service quality of the restaurants. There are five subsets; Tangible, Reliability, Responsiveness, Assurance and Empathy. The DINESERV is adopted from (Markovic et al., 2010). The research instruments are also including descriptive items which include Gender, Age, Qualification, Income and Frequency of going restaurants. These descriptive variables are adopted from (Erigin and Akbay, 2014).

3.11 Face and Content Validity of Instrument:

The instruments are made valid before distributing among the respondents. So the validation instruments are done by marketing expert and from the research expert. Their validity details are provided in Appendix C.

3.12 Statistical Tool:

In this study different test of SPSS 22.0 (Statistical Packaged for the social science) software is used. First Reliability Analysis is used to check how reliable the variables are. Then Exploratory Factor Analysis is used for the correct measure of each variable. Then Multiple Regression Analysis is used to ensure the relationship between the dependent and independent variables. If positive relation exists, it’s means that both dependent and independent variables are move in the same direction.

3.13 Model:

C.P = α+ β1 (P) + β2 (Tan) + β3 (Rel) + β4 (Res) + β5 (Assure) + β6 (Emp) + e

Where, Consumer Preference (C.P), Price (P), Tangible (Tan), Reliability (Rel), Responsiveness (Res), Assurance (Assure), Empathy (Emp) and e is the error term.

3.14 Hypothesis:

H01: Price has an insignificant impact on consumer preferences

H02: Tangible has an insignificant impact on consumer preferences

H03: Reliability has an insignificant impact on consumer preferences

H04: Responsiveness has an insignificant impact on consumer preferences

H05: Assurance has an insignificant impact on consumer preferences

H06: Empathy has an insignificant impact on consumer preferences

3.15 Definition of key terms:

3.15.1 Consumer preferences:

Consumer preference is the term in which consumer like one thing over another. Rajprohit and Vasita, (2011) examine that consumer preference mainly to select an option that has the most likely among number of options by consumer have to satisfy his/her need or desire. The result of their behavior that consumer prefer by showing while purchasing or searching the product.

3.15.2 Definition of sub variables:

Tangible: The Physical appearance and facilities, personnel, equipment are presents in restaurants. It refers to restaurants physical design, appearance of staff and cleanliness.

Reliability: The Capability to perform the promised service dependably and accurately. It involves the freshness and temperature of food, accurate billing and receiving order of food.

Responsiveness: Willingness to help customers and provide quick service. It involves in restaurants relates to staff assistance with the menu list or correct to the quick response to customer’s needs and wants.

Assurance: Ability of employees to inspire the customer with confidence and trust. It means that the customers should believe on the staff recommendation of restaurant, feel sure that food is free from any contamination and can be able say anything regarding without fear.

Empathy: Caring and individual attention of employee to its customer. It refers to providing personal attention to customers by anticipating special dietary requirements or by being sympathetic towards customer’s problem.

3.15.3 Price

Pricing is the process in order to exchange goods and service. Price of something is a sum of money that you have to give in order to buy it (Gillani et al., 2013). In restaurant service, Price is a tangible attribute that consumers consider when they experience dining out (Choi et al., 2009). By comparing price with perceived value and cost, customer’s satisfaction can be developed and built (Hemalatha et al., 2014).

3.16 Summary of the chapter

This chapter includes the concept of this study, approach of the study, research design, data collection procedure, sample size, target population, purpose of the study, research instruments and their references, which statistical tool will be used as well as model and the research hypothesis which will be test and discuss in fourth chapter.

4. Data Analysis and Discussion

4.1 Introduction:

In this chapter include statistical analysis and testing the hypothesis of the study. I used SPSS 22.0 (statistical packaged for social sciences) for the data. It also includes interpretations of the table and their result. The table of pilot study, data screening, exploratory factor analysis and regression analysis.

4.2 Pilot study:

4.2.1 Reliability Analysis:

The table 4.2.1 include Cronbach alpha of all variables independently. Alpha of all variables is significant but the alpha of consumer preferences is a little less than the others i.e., (Cronbach alpha >0.70). The highest value in table is 0.91 of reliability and the lowest is 0.67 of consumer preferences.

Table 4.2.1 Pilot study: Reliability Analysis (N=40)

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Note: All values are rounded to two decimals.

4.2.2 Inter-item Correlation:

Table 4.2.2 Pearson Correlations (N=40)

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

The table 4.2.2 shows the inter item Pearson Correlation of Consumer Preferences. It shows all the five items are significantly correlated with each of the other items under the same variable, except (CP1 and CP3, CP1 and CP5, CP2 and CP3, CP2 and CP5, CP3 and CP5). The highest value in this table found between CP2 and CP4 (r = .626). The lowest value is between CP1 and CP4(r =.364).

Table 4.2.4 Pearson Correlations (N=40)

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

Table 4.2.3 shows the inter item Pearson Correlation of the Price. All the five variables are significant with each of the five items of the same variable except (Price1 and Price4, Price1 and Price5, Price3 and Price5, Price4 and Price5). The highest value of Price1 and Price2 (r =.645) and the lowest value of Price4 and Price3 (r =.344).

Table 4.2.5 Pearson Correlations (N=40)

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

Table 4.2.4 includes the first subset of DINESERV which is tangible. The table shows inter-item Pearson Correlation are highly significant correlated with each other of the same variable. The highest value is between T3 and T2 (r =.746) and the lowest is T5 and T1 (r =.416).

Table 4.2.6 Pearson Correlations (N=40)

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

Table 4.2.5 shows the inter-item Pearson Correlation of the DINESERV second subset which is reliability variable. The table shows that all the five items are highly correlated with each other. The highest and the lowest significant value found between the Reliability5 and Reliability4 (r =.797) and Reliability4 and Reliability3 (r =.502) respectively.

Table 4.2.7 Pearson Correlations (N=40)

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

The table 4.2.6 includes the third subset of the DINESERV. Responsiveness variable has four items. Table shows the significant of the inter-item correlation. The items are strongly correlated with each other in a same variable. The highest value is between Responsiveness1 and Responsiveness 2 (r =.640). The lowest value between Responsiveness3 and Responsiveness1 (r =.523).

Table 4.2.8 Pearson Correlations (N=40)

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

Table 4.2.7 shows the fourth subset of the DINESERV. The assurance has five items which are strongly correlated and significant with each other. The table has high and low value of the inter item correlation. The highest value of Assurance4 and Assurance2 (r =.746) and the lowest value of Assurance5 and Assurance1 (r =.501).

Table 4.2.9 Pearson Correlations (N=40)

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

The table 4.2.8 shows the inter-item correlation for the fifth subset of the DINESERV which is Empathy. It has five items which are significant with each other of the same variable. The highest and the lowest values are Empathy5 and Empathy2 (r =.698) and Empathy5 and Empathy1 (r =.481) respectively.

4.3 Data Screening (N=330)

4.3.1 Out of range values:

First of all out of range values to be find from the dataset. By applying SPSS test (Analyze è Descriptive è Frequencies) to find out the minimum and maximum value of the Likert scale items, whether the values are in between 1=strongly disagree to the 5=strongly agree. All the items are not having out of range values.

4.3.2 Missing value analysis:

After the out of range process now second thing is to find the missing values from the dataset. Following the procedure of the SPSS test 125 missing values are found from the total dataset. Now these missing values are replaced with the series mean.

4.3.3 Detecting Univariate and Multivariate outliers:

A total of twenty-four multivariate outliers are found and removed from the dataset by using Mahalanobis distance (D2) critical Chi-square CDF.CHISQ function at p< .001. Tabachnick and Fidell, (2007, p.74) stated case of standard z-score, if the value p<.001 than there is outliers in the dataset. Thus after removing outliers, the sample size of the useable responses 306.

4.4 Descriptive Analysis:

Table 4.4 Profile of respondents

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The table 4.4 includes descriptive variables in this research which are Gender, Age, Qualification, Income and Frequency of going restaurant. There are 306 respondents in which 178 males (58.2%) and 128 females (41.8%). However, 81 respondents (26.5%) were in between the age of 17-20 years, 100 respondents (32.7%) in between the age of 21-24 years, and only 71 respondents (23.2%) in between the age of 25-28 years and in last 54 respondents (17.6%) were above 29 age. There are 72 respondents (23.5%) who are intermediate, 147 respondents (48 %) are bachelors, and 78 respondents (25.5%) are masters and only 9 respondents (2.9%) who have got other qualification. There are 108 respondents (35.3%) who’s got income in between 30,000-40,000, 63 respondents (20.6%) has 41,000-50,000, 47 respondents (15.4%) has the income in between 51,000-60,000, and 88 respondents (28.8%) has above 61,000 incomes. Once in a week of going restaurant were 65 respondents (21.2%), 117 respondents (38.2%) were those who visit restaurant once in a month, 2-4 times a month of going restaurant were 90 respondents (29.4%), and 34 respondents (11.1%) are those who visit restaurant more than 5 times a month.

4.5 Pearson Correlation, Mean and Std. Deviation

Pearson Correlations (N=306)

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The above table is shows the mean, standard deviation and the Pearson correlation of the variables. All values of Pearson correlation show positive relationship. Reliability had large relationship with Tangible and others had positive and small relationship with each other (Cohen, 1988).

4.6 Reliability Analysis:

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Reliability Analysis is use to make sure that the quality of the data of this research is reliable or not and can be used for further analysis. In this research there are 26 items in which six are independent variables and one dependent variable. After applying the test Cronbach’s Alpha shows the reliability of the data which is 89.6% (Cronbach’s alpha>0.70, Leech et al., 2005).

4.7 Exploratory Factor Analysis (N=306)

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Exploratory factor analysis used to reduce the thirty-four Likert scale items into required four components based on the idea that these components would estimates the relationship among the consumer preferences and the service qualities of the fast food restaurants. The value of Kaiser-Meyer-Olkin Measure of Sampling Adequacy is .868 which is more than .70 (Leech et al., 2005) which clearly reflect that the sample is sufficient to run the factor. The Bartlett’s Test of Sphericity (Approx. x2= 3682.136, df=325, p<.05) shows that correlation matrix is essentially different from an identity matrix, in which correlations between variables are all zero (Leech et al., 2005, p. 80).

Table 4.7.1

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Note: Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization Factor loading less than |0.40| are omitted

The table 4.7 includes the factor loading. There were total 34 items. After factor loading it reduce to twenty-six items. Factor loading less than 0.40 are omitted, the items are loaded on to their own respective factors have strong convergent validity (Tharenou et al., 2007). Cumulative percent explained 67.868 of the total variance and fulfilled all three validities (convergent, construct and discriminant).

4.7.1 Convergent validity

The convergent validity is to ensure that all the items are loaded on to their own respective factor. So the convergent validity is confirmed in this study.

4.7.2 Construct validity

The construct validity is to ensure that the minimum factor is greater than 0.4. All the items are heavily loaded on to their own factor.

4.7.3 Discriminant validity

The discriminant validity is that the items are cross loading in the rotated component table (Tharenou et al., 2007). This validity is also confirmed that none of the items of one factor is cross loading

4.8 Multiple Regression Analysis

Table 4.7

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Note: Dependent variable Consumer Preference

The table 4.7 describes the relation between dependent variable and the independent variables. By the help of beta value, we know the relation between dependent and the independent variables. If beta value is positive than it means that there is positive relationship between dependent and independent variables, and if beta value is negative than the relationship is negative between dependent and independent variables. The regression analysis is formed the regression equation which is; Consumer Preference = .773 + .141(Price) + .228(Tan) + .213(Rel) + .135(Resp) + .005(Assure) + .035(Emp)

The above equation shows that if Price increases by one unit than Consumer preference increase by .141, if Tangible increases by one unit than Consumer preferences increase by .228 unit, if Reliability increases one unit than Consumer preferences increase by .213, if Responsiveness increases by one unit than Consumer preferences increase by .135 unit, if Assurance increases by one unit than Consumer preferences increase by .005 unit and if Empathy increases by one unit than Consumer preferences increase by .035 unit.

In table 4.7 the t stats show the relative importance among the variables and sig. value shows the significant of the variables. Price, Tangible, Reliability and Responsiveness have value less than 0.05 which means that these variables have significant and positive impact on Consumer preference. Whereas the Assurance and Empathy have the value .973 and .511 respectively which is greater than 0.05, it means that Assurance and Empathy have insignificant but positive impact on Consumer preference.

The VIF shows the multi co-linearity of the variables, which means that variables are associated with each other. If the value of VIF is greater than 10 than there is multi co-linearity exists (Leech et al., 2005). In this model there is no multi co-linearity and model is model is fit. The value of Adj. R2 is 0.280 of the independent variables (Price, Tangible, Reliability, Responsiveness, Assurance and Empathy) which indicate that it can predict 28% of the dependent variable (Consumer preference).

This study presumed that DINESERV have positive influence on consumer preferences. In line with the study hypothesis, DINESERV dimensions (tangible, reliability and responsiveness) were found significant impact on consumer preferences. In contrast with the Qin, Prybutok & Zhao, (2010) found that these three were important attributes of service quality in china. Tangible appears to be the most important factor in this study. Fah & Kandasay, (2011) also found Tangible is the most significant factor related to satisfaction among other dimensions in Malaysia. Managers or owner of fast food focus that customers are more concern in attractiveness of the fast food restaurants and cleanliness of the room. Shaikh & Khan, (2011) also examined Tangible and Responsiveness has significant impact of service quality on customer satisfaction.

It is important to focus on these friendly services of fast food restaurants to make customers feel appreciated and cared. Increase in visual appeal, taste food, freshness and the provision of accurate and reliable services to meet or exceed customer’s expectations and the desire to recommend which can help for better restaurants. It improves service quality but also strengthen customer loyalty, reputation of the restaurant and in the long term it will lead more sales and greater revenue of the fast food restaurant.

4.8 Summary of the chapter

This chapter includes reliability test of Pilot study. After that it has data screening (outliers, univariate, multivariate), then comes descriptive analysis and Pearson correlation of the variables. Factor loading of the items is there, and last one is the multi regression analysis. The results are very much supports the research hypothesis and positively associated the independent variables with dependent variable.

5. Conclusion and Recommendation

5.1 Conclusion

This research is attempted to examine consumer preferences to the (international and domestic) fast food restaurants of Karachi. Around the world while choosing a particular restaurant customer consider lots of factor. In those factors customer may include restaurant service quality, their price or environment of the restaurant. This can be said for the Karachi consumers. This study has conducted on the fast food restaurants in Karachi using variables which are Consumer Preferences, Price and DINESERV (Tangible, Reliability, Responsiveness, Assurance and Empathy). Exploratory Factor analysis and different scales of instrument is used for this study. These instruments are adopted from the past studies.

The data is collected from different fast food (international and domestic) restaurants. The total respondents were 330 in which 306 are the valid respondents. Using different test of SPSS such as Pearson correlation which shows how much items of each variables are correlated with each other. While the result shows that Reliability has .592 value of correlation, which is positive and strongly correlated with Tangible. Exploratory factor analysis is used (EFA) to find out those items which are loading in their own factor. Among this test those items which are cross loading and having the p<0.4 is excluded from the factor. Before applying EFA in this study consumer preference and Price had five items, whereas Dineserv have twenty-four items. After applying EFA consumer preferences have remained four items and price have remained three items. In this research DINESERV is used, which is basically for the dining out. It includes five subsets; Tangible, Reliability, Responsiveness, Assurance and Empathy.

DINESERV has 24 items, in which 19 items were loaded and rest of them are excluded from the factor. In last multiple linear regression test is applied to check that which variable is most effecting the consumer preferences. In this study Tangible is the most effecting variable which has positive impact on consumer preferences with the beta values is 0.228 and has significant impact on consumer preferences with sig value 0.000. Consumers are more likely to have good services with having good surrounding environment from the restaurants.

The finding shows that consumer preferences have second positive impact on reliability with the beta value of 0.213. After that Price is most significant with the beta value of 0.141 and then Responsiveness having the beta value of .135. In last consumer preferences had positive but insignificant impact on Assurance and Empathy with the beta value of 0.035 and 0.005 respectively. Thus there are six hypothesis in which four of them having significant impact on the dependent variable.

As this study shows that consumers are willing to have good service. Restaurants can have built trust and satisfy consumer by having high-quality service because satisfied customer will come back to that restaurant.

5.2 Recommendation

The idea of this study is to investigate those factors which influence consumer preferences to the fast food restaurants (international and domestic). This study shows that three subsets of DINESERV (Tangible, Reliabilty and Responsiveness) and Price are those factors which influence most. While others two subsets of DINESERV (Assurance and Empathy) also have influence the consumers but have insignificant positive effect on consumer’s preferences. This means that consumers are more concerned about the reliable service and environment.

- Restaurants should provide good service to their customers to retain them because in this study most of the respondents are more concerned about the service of the fast food restaurants.
- Second thing which comes from this study is the Tangible items of the fast food restaurants. Quite few restaurants don’t have that environment that other fast food restaurants have. Restaurants have to more focus on Tangible items like their menu card, sitting arrangements, decoration etc.
- Third thing which comes from this study is reliability of the fast food restaurants. Consumers visit restaurants those are more reliable and give good service. Restaurants should focus on those factors which can build image in the consumer mind that restaurants are more reliable to give services.
- The fourth thing is that the big difference between the prices of international and domestic fast food restaurants. International fast food restaurants and some domestic fast food restaurants have expensive food deals rather than domestic restaurants. Most of the respondents of this study are price sensitive; some are college or university students who don’t have that much budget to spend than those who are on job.
- Consumers are also concerned about how fast food restaurants respond to them. Some of the fast food restaurant’s employees are not well trained that they do not responds the consumers request. So fast food restaurants are also focused on this factor as well and they are not losing their consumers.

5.3 Future Recommendation:

There are some future recommendations for future research:

- This research is done in Karachi on fast food restaurants; it can be done in different cities of Pakistan by collecting the data from different restaurants. As this study includes both international and domestic restaurants, in future the study can be done only for international or domestic restaurants.
- In this study there are limited independent variables; researchers may use different variables as well.
- This study is quantitative research; in future it will be conduct as qualitative research.
- In this research DINESERV is used to measure the service quality of the fast food restaurants. In future researcher can also use CFFRSERV (Chinese fast food restaurant service quality) for Chinese restaurants.

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Appendix

Questionnaire

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Dear respondent, as a partial fulfillment of the requirements for the degree of MBA, a study is being conducted for the young consumer preferences to the fast food restaurants. You are therefore, requested to fill in the following questionnaire.

Please use the following scale:

1= Strongly disagree 2=Disagree 3=Neutral 4=Agree 5=Strongly agree

Following are some questions, regarding your personal information

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