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Customer loyalty in the fast food restaurants of Bangladesh

Article  in  British Food Journal · September 2019

DOI: 10.1108/BFJ-02-2019-0140

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 British Food Journal

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Customer loyalty in the fast food restaurants of Bangladesh

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Journal: British Food Journal

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Manuscript ID BFJ-02-2019-0140.R2

Manuscript Type: Research Paper

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Fast food restaurant, Customer Satisfaction, Customer Loyalty,

Keywords:
Bangladesh
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Page 1 of 24 British Food Journal

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4 Customer loyalty in the fast food restaurants of
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Bangladesh
7 Abstract
8 Purpose - This study aimed to investigate the factors influencing the satisfaction of customer
9 and customer loyalty in the fast food restaurant industry. A theoretical model, including
10 hypotheses, has been proposed in this study.
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Design/methodology/approach -Data were assembled using convenient sampling method.
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The hypothesized model was verified with the data from 204 respondents. Principal
14 component analysis (PCA) and structural equation modeling (SEM) approach were applied to
15 analyze data.
16 Findings -The results (significant at p<0.01, and p<0.05) exhibited that food quality, price,
17 and service quality were positively linked to customer satisfaction. Customer satisfaction was
18 positively associated with customer loyalty. The empirical results found a contrary
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association between the location and environment of restaurant and customer satisfaction.
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21 Practical implications - The managers and owners of fast food restaurants may use the
results of this study to confirm customer satisfaction and loyalty of the customer. With loyal
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23 customer groups, their businesses can be sustained and gradually grown up.
24 Originality/value - This study will provide guidelines for the management of fast food
25 restaurants to formulate their business strategies in the competitive market. It will give a
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27 signal to the managers to stay focused on customer relationship management as the ultimate
28 goal of the business.
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30 Keywords Fast food restaurant, Customer satisfaction, Customer loyalty, Bangladesh

31 Paper type Research paper
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33
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34 1. Introduction
35 Customer perceived value regarding any product and service is very crucial for brand loyalty.
36 In a service factory like a fast food restaurant to make customer loyal is an ultimate goal by
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37 providing value-based service and food (Baker and Wakefield, 2012; Izquierdo-Yusta et al.,
38 2019). Quality of food and service, attractive price, and pleasant atmosphere increase the
39 level of satisfaction of customers (Jani and Han, 2015). Customer satisfaction achievement is
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the precondition for loyal customers. Managers and owners of restaurants believe that loyal
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42 customers are much valuable that causal customers even they are also customers (Espinosa et
43 al., 2018). Increased level of satisfaction leads customer retention, and consequently,
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44 restaurants can enjoy higher profits, positive word-of-mouth, and repetitive transactions with
45 regular customers, lower marketing, and promotional activities. Bangladesh holds 40th
46 largest consumer market in the world. Per capita income of Bangladeshi people is more than
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USD1700. The fast-food business was started in Bangladesh in the early nineties, and
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49 beginning of 2000, Bangladesh has experienced with international fast food brands such as
50 Pizza Hut and KFC (Islam and Ullah, 2010). Though there are no specific statistics for the
51 fast food restaurant business in Bangladesh, Bangladesh Bureau of Statistics (BBS) provides
52 estimated figures of national income, and it presented that hotel and restaurant industry might
53 have 7.28 percent growth in the financial year 2018-2019. The growth rate was 7.13 percent
54 in the fiscal year 2017-2018. The volume of business of this sector is expected to reach at
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BDT 73.16 (BDT means Bangladeshi currency unit) billion in the 2018-2019 fiscal year,
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57 which was BDT 68.20 billion in the last fiscal year. The fast food restaurant business is a
58 lucrative business in Bangladesh. It is a complex nature of the business because it provides
59 product and service at the same time to the customers. Currently, restaurant owners are giving
60 much attention to the loyalty of the customer because it is very much related to their business

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3 profitability. There is a dearth of research regarding customer loyalty in a service factory like
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fast food restaurant business in Bangladesh till date. In this study, interest was devoted to
6 picking out the elements influencing the satisfaction of the customer and the mediating
7 function of customer satisfaction between factors of satisfaction and loyalty of the customer.
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9 Loyal customers are a very crucial issue of the customer relationship management approach
10 of an enterprise. Marketing researchers, business managers, and consultants consider
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customer loyalty as a hot topic in the business management field (Keiningham et al., 2007).
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Customer loyalty fosters purchase of services and products repeatedly by customers.
14 Achievement of customer loyalty is a significant source of competitive advantage for
15 business enterprises. Retaining the present customers is a much more successful strategy for
16 the business enterprise, comparing the attracting new customers to substitute the lost ones
17 (Gee et al., 2008). For these reasons, in the more public function-oriented and highly
18 competitive market, service providing companies give more attention to keep an existing
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customer instead of attracting new customers. In the restaurant industry, it is vital to
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21 recognize how a customer decides to select a restaurant (El Aldy and Eid, 2016).
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23 Customers always search for ‘a package of benefits’ to fulfill their needs in a variety of
24 capabilities (Kotler and Keller, 2016). Many fast food restaurants offer a product package
25 which includes food and beverage. When customers seek multiple issues like food, beverage,
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26 services, they will consider all the issues to choose a restaurant (Shamah et al., 2018).
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Therefore, it is crucial to recognize the components that satisfy the customers, and they come
29 back to that restaurant for another meal. Several contributions of this research will enhance
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30 values to the domain of loyalty issues in fast food restaurants. First, it will provide a
31 discussion on loyalty issues of the customer in a fast food restaurant business. It will help
32 managers as well as researchers to understand issues related to customer satisfaction in a fast
33 food restaurant business. It will give guidance about what customer satisfaction is and its
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potential effect on customer loyalty. Without a clear understanding of factors of satisfaction
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and its mediating role with customer loyalty, we cannot expect the wide application of
consumer behavior assessment in practice or research. Finally, it will remind practitioners to
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38 stay focused on the ultimate goal (customer loyalty) of a service factory, such as a fast food
39 restaurant. The initial motive of this study is to discover the influencing elements of
40 customer loyalty in the fast food restaurant business in Bangladesh. The specific objectives
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41 are: (a) to discover the influencing factors (such as food quality, price charge, place, and
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surroundings, service quality) of customer satisfaction in the restaurant industry, and (b) to
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44 check the mediating function of customer satisfaction between influencing elements of

45 satisfaction and consumer loyalty relationship.
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49 2. Literature Review and Hypotheses
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51 2.1 Literature Review
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2.1.1 Customer loyalty in fast food restaurants
55 In consumer behavior and marketing literature, it has been described that individuals’
56 purchase decisions and behavioral intentions are greatly influenced by the level of
57 satisfaction (Brunner et al., 2008; Kang et al., 2015). In a service factory or a specific brand,
58 customer satisfaction has a prominent role in determining customer loyalty (Han et al., 2018).
59 Customer satisfaction is the most significant variable that other variable in case of customer
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3 loyalty, especially for service providing factory such as a restaurant. In the restaurant
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industry, increasing the perceived value contributes to the customer pleasant experience
6 resulting in an increased level of satisfaction. An increased level of satisfaction, in turn,
7 ensures customer loyalty (Ali et al., 2018; Ruy and Han, 2010). Understanding what creates
8 values for the customer in the restaurant industry is an important research topic to be
9 conducted. Market research should be undertaken to identify the specific factors that create
10 benefits and pleasurable environment for the customer in a restaurant.
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The fast food restaurant industry is a rapidly growing and complex nature of business in all
14 over in the world. Bangladesh is a developing and an overpopulated country where many
15 people go to fast food restaurant regularly and occasionally. Building a relationship with the
16 customer and providing quality service is essential in the restaurant industry (Saleem and
17 Raza, 2014). Services are intangible, cannot be measured and counted. Foods are delivered in
18 restaurants. Speed in delivery, reliability in delivery is related to food services. Customer
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feelings, perceptions, and expectations are more important, becoming a loyal customer in the
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21 fast food restaurant industry. Tangible and intangible factors are essential for customer
loyalty. Food category or range of food and quality of service are imperative antecedents for
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23 restaurant choice and customer loyalty (Clark and Wood, 1998; Han et al., 2018).
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25 Nowadays, customers have access to several products. Fast food restaurants provide food and
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26 services to their customers in a competitive environment. So, fast food restaurants need to
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establish a strong customer relationship (Mason et al., 2016; Momtaz et al., 2013). Customer
29 loyalty is very crucial for establishing strong customer relationship (Al-Ansi et al., 2018).
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30 Typically, the satisfied customer becomes a loyal customer (Carranza et al., 2018; Espinosa
31 et al., 2018; Nguyen et al., 2018). Waal and Heijden (2016) proposed eight behavioral issues
32 for customer loyalty but did not mention tangible elements such as atmosphere, location,
33 environment, etc. for customer satisfaction and loyalty in fast food restaurant. Customer self-
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perception regarding service quality and food quality areprincipal components for making
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satisfied customer in the fast food restaurant business (Carranza et al., 2018; Samah et al.
2018). Price of service and food is also an objective factor. It should be taken under
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38 consideration in customer satisfaction and loyalty aspects. Satisfaction and loyalty are also
39 influenced by customers’ health consciousness and trust toward the restaurant (Ghoochani et
40 al., 2018). Therefore, developing a relationship with customer and customer relationship
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41 management necessitate recognizing the particular needs of the customer and arranging the
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marketing and related issues to meet those needs. The ultimate objective of the formation of a
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44 relationship with customers is to intensification operating and promoting competence,

45 customer loyalty, and long-run profitability.
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48 2.1.2 Constructs and Definitions
49 [Please insert Table I here]
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53 2.2 Theoretical Arguments and Hypotheses Development
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55 2.2.1 Relationship between food quality and customer satisfaction
56 There is a massive competition among the restaurants and other food service proving
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companies in the food providing and food processing industry. Satisfied customers are crucial
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for companies when they want to achieve the loyalty of customers and repeat purchases.
60 Sulek and Hensley (2004) found that there was only 17% of repeat purchase intention among

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3 the customer. Still, they argued that other than service quality and physical setting, food
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quality is a crucial antecedent for customer satisfaction. The experiences what the customer
6 achieve in restaurants food becomes one of the fundamental factors of them. Quality of food
7 has a high impact on satisfaction of the customer and repeats patronage as well (Namkung
8 and Jang, 2007). Fresh and quality food serving is a challenging task for restaurant
9 businesses. Quality of food items is an important factor to make a satisfied customer.
10 Customers and competitors both are very much concerned about quality food aspect (Ryu and
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Han, 2010). Based on the uniformity with the previous research, it is expected that quality of
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food has a positive association with customer satisfaction (Bujisic et al., 2014; Dutta et al.,
14 2013; Ha and Jang, 2010). Food quality and service quality both have an association with the
15 magnitude of customer satisfaction. Without quality food, service quality cannot ensure an
16 increased level of satisfaction. Having quality of food and service quality may create an
17 additional level of satisfaction to customers (Kim and Ham, 2016; Sulek and Hensley, 2004).
18 Therefore, we propose the following hypothesis:
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21 H1: Quality of food has a positive impact on customer satisfaction of a fast food restaurant.
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23 2.2.2 Relationship between price and customer satisfaction
24 Price is determined inside the marketplace in line with the demand and delivery of a selected
25 service or product. Perception of the customer concerning the price charging is an attribute of
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26 quality of services or products (Uddin and Akhter, 2012). Price sensitivity and level of
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satisfaction and dissatisfaction is related (Kotler and Keller, 2016). Value for money, price
29 fairness, special offer, and discounted price may result in both satisfaction and dissatisfaction
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30 of the customer. The higher price and lower perceived value compared to value for money in
31 the restaurant business may create customer dissatisfaction (Konuk, 2015; Zielke, 2008;
32 Uddin, 2013). Mass people are very much concerned about the product or service price.
33 Different level of price and awareness regarding price dimensions has the opportunity to
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influence customer satisfaction. Service providing factories’ authorities such as restaurant
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owners and managers are concerned about pricing because of the enormous interest of mass
people (Ling and Aun, 2018; Martin et al., 2009). Increase or decrease of price regarding any
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38 product or service, customers have instant reactions. Though price increases because of
39 external factors such as an increase in the supplier side, the restaurant managers should
40 concern about customer satisfaction issues. In the competitive retail market using a special
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41 offer or occasional offer, customers’ attraction can be drawn. Thus, we posit:

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44 H2: Price has positive influences on customer satisfaction of fast food the restaurant.
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46 2.2.3 Relationship between location and environment and customer satisfaction
47 The issue ‘customer satisfaction’ generally has received substantial attention in the marketing
48 literature especially in customer relationship management (Chebat et al., 2014; Kwon et al.,
49 2016; Sands et al., 2015). Customer satisfaction has a positive influence on some benefits
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such as repeated purchase, increased profit, and sustained the growth of the business of
52 retailer and service provider. Location and environment (decoration, layout, lighting, and
53 color, etc.) influence the expectations and perception of a customer and consequently
54 satisfaction of a customer (Lam, 2001; Kwon et al., 2016). Good location and a nice
55 atmosphere highly affect a customer’s entrance into the place and emotions. Easy access
56 restaurant and pleasant atmosphere ensure the enjoyment of the customers. If a customer
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perception regarding the location is good and convenient, and the environment is pleasurable,
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then he/she wants to spend more time and money on that place Nuttavuthisit (2014). The
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3 location and environment of a restaurant should be chosen and designed in a way that can
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create a positive impression and increased satisfaction. Therefore, it can be hypothesized that:
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7 H3: Favorable customer perception regarding restaurant location and the environment has a
8 positive impact on customer satisfaction.
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10 2.2.4 Relationship between service quality and customer satisfaction
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Customer satisfaction is a specific event related assessment, whereas, perceived service
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quality is referred to as a system approach which is concerned with an overall long-term
14 evaluation of a service or a product (Cronin and Taylor, 1992; Parasuraman et al., 1988;
15 Ting, 2004). Positive perception regarding service quality fosters an increased level of
16 customer satisfaction (Hutchinson et al., 2009). According to Uddin and Akhter (2012),
17 “The difference between customers’ expectations and the real performance is reflected as
18 perceived service quality.” In a service proving industry, perceived experience about quality
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issues has a direct and positive association with satisfaction (Carranza et al., 2018; Nguyen et
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21 al., 2018; Srivastava, 2015). In 1992, Cronin and Taylor researched to find out the
relationships among service quality, consumer satisfaction, and purchase intentions. They
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23 found service quality as an essential determinant of satisfaction. The study of Ting (2004)
24 was consistent with these results; he stated that service quality well describes the level of
25 satisfaction of the customer and there is a statistically significant association between quality
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26 of service and customer satisfaction in a service factory. Customers perceive the quality of
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service immediately after receiving or consumption of service, and later, they compare their
29 experiences with their expectations. Perception regarding the quality of service expected
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30 level of service, and the gap between these two leads to level of satisfaction or dissatisfaction
31 (Ruy and Han, 2010). So, we propose:
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33 H4: Quality of service has a positive impact on customer satisfaction of a fast food restaurant.
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2.2.5 Relationship between customer satisfaction and customer loyalty
Service providers try to satisfy their customers by offering higher benefits for them.
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38 Generally, satisfied customers become loyal customers reflecting their attitude and behaviors
39 such as repeat purchase, positive recommendations to others (Ali et al., 2018; Saleem and
40 Raza, 2014). Several studies were conducted on the association concerning customer
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41 satisfaction and customer loyalty and showed the fact that satisfaction is a vital predictor for
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loyalty (Han et al., 2018; Nam et al., 2011; Sahin et al., 2011). A satisfied customer stays a
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44 long time with the existing business, spend more time and money, and say positively to
45 others (Carranza et al., 2018; Espinosa et al., 2018; Nguyen et al., 2018). The positive
46 relationship between customer satisfaction and loyalty has been proved several times in
47 many types of research (Al-Ansi et al., 2018; Samah et al. 2018; Waal and Heijden, 2016).
48 The impact of customer satisfaction on loyalty in the context of the fast food restaurant
49 industry in Bangladesh is still comparatively worth examining due to the competitive and
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complexity of its service nature. Therefore, the following hypothesis was formulated:
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53 H5: Customer satisfaction has a positive impact on customer loyalty of fast food restaurant.
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5 Food
6 Quality
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8 H1
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12 Price
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H2
14 Customer Customer
15 Satisfaction Loyalty
16 H3 ** H5
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Location &
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Environment
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H4
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Service
24 Quality
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26 Figure-1: Hypothesized research model

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30 3. The methodology of the Study

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33 3.1 Survey Instrument
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This study has followed the inferential research approach. This approach is crucial because it
tested empirical data and based on the results, it drew inferences and conclusion as well on
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38 the population of the study. The influencing factors of the loyalty of customer in the context
39 of the fast food restaurant industry in Bangladesh were tested in this study. The hypotheses
40 were developed through the review of existing literature. A questionnaire survey was
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41 conducted to collect data. The close-ended questionnaire was designed reviewing the existing
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literature. Total twenty-six measurement items (Appendix 1) were adopted from several
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44 studies (e.g., Ali et al., 2018; Haghighi et al., 2012; Han et al., 2018; Kim and Han, 2016;
45 Raquel, 2017; Rozekhi et al., 2016; Shamah et al., 2018). The respondents had been confident
46 that there was no right or incorrect answer. Their identification will no longer be disclosed to
47 others. This research might be achieved most effective for the researcher’s academic motive.
48 No information could be shared with any company. Response bias was another crucial issue.
49 To avoid it questionnaire was developed very carefully. Short, clear, and understandable
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questions were incorporated into the questionnaire. There were only twenty-six, simple
52 questions. The familiar language was used to frame the two pages questionnaire. “We”
53 approach was used to make the questions personalized of the target respondents. There are
54 two parts of the questionnaire. The first part uses the nominal scale to recognize the personal
55 statistics of the respondents. The second part includes the respondents’ perception of the
56 constructs of the model of the study. All constructs have been assessed using more than one
57 objects by way of a seven-point Likert-type scale (1= strongly disagree, 2= disagree, 3=
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reasonably disagree, 4= impartial, 5= moderately agree, 6= agree, and 7= strongly agree). On
60 several indices of reliability, validity, discriminating power, and respondent preference

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3 seven-point scales is preferable in compared with a five-point scale or less (Preston and
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Colman, 2000). Having seven points tends to be a decent balance between having enough
6 points of discrimination while not having to keep up to several response choices.
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9 3.2 Data and Sample
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Total six hundred questionnaires (having 95% confidence level, 5% margin of error, and
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unknown population proportion, i.e., p=0.5 (‘p’ means estimated population proportion))
14 were distributed in eight divisional cities (Seventy-five questionnaire in each city) of
15 Bangladesh. The cities are Dhaka, Chittagong, Rajshahi, Khulna, Barishal, Sylhet, Rongpur,
16 and Cumilla. Respondents of all cities were considered as a homogeneous population, i.e., all
17 cities are taken under one population. Under the non-probability sampling approach,
18 convenient sampling technique was applied to select respondents. Fast food restaurant going
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people were selected as respondents. Food quality, price, location, and environment, and
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21 service quality are exogenous variables; customer satisfaction and customer loyalty are
endogenous variables in this study. Definition of the latent constructs (exogenous and
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23 endogenous variables) is shown in Table I. Customer trust, employee behavior, restaurant
24 size, business volume, etc. are considered as control variables. The responses acquired have
25 been 217, of which 204 have been complete and usable (response rate is thirty- six percent,
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26 whereas, the effective response rate is about 94 percentage). Incomplete responses were not
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taken under consideration for similar analysis. Fifty-seven percent (57 percent) respondents
29 were men, and 43 percent were women. 45 percent of respondents were up to thirty years,
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30 31 percent were thirty-one to forty years, 14 percent was forty-one to fifty years, and 10
31 percent were above fifty years old. 16 percent of respondents were involved in government
32 service, 47 percent was in private service, 14 percent was in business, 18 percent was
33 housewife, and 5 percent was in other professions. 28 percent of respondents completed up
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to college level education, 38 percent completed graduation, 31 percent completed post-
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graduation, and others were 3 percent. 29 respondents were from Dhaka city (average
monthly income is BDT 48,448), 26 from Chittagong (average monthly income is BDT
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38 43,462), 26 from Rajshahi (average monthly income is BDT 39,615), 25 from Khulna
39 (average monthly income is BDT 40,200), 23 from Barishal (average monthly income is
40 BDT 38,478, 24 from Sylhet (average monthly income is BDT 42,083), 23 from Rongpur
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41 (average monthly income is BDT 47,174), and 28 from Cumilla city (average monthly
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income is BDT 43,929).
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45 4. Analysis and Findings
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47 To avoid response bias, simple clear and brief questions were included in the questionnaire.
48 Consequently, the response rate was more than 35 percent (36.17 percent). Completeness,
49 correctness, and the accuracy of raw data were checked. Sources of error such as personal
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(respondents), instrumental, and natural, were taken under consideration to reduce systemic
52 and random errors. Respondents were selected under a convenient sampling method, i.e.,
53 only fast food restaurant going people were selected. Structural equation modeling (SEM)
54 approach was applied in this study to evaluate the model and hypotheses of the study and the
55 evaluation device was AMOS 17.0. Maximum likelihood method was followed for
56 estimating a parameter. To check the goodness of the fit of the model, a measurement model
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and a structural model test was applied.
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4.1Pricipal Component Analysis (PCA)
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7 Varimax rotation and eigenvalue more than one were used in the principal component
8 analysis (PCA). PCA intends to explain the most amount of variance with the fewest number
9 of primary components. The PCA was conducted to apprehend the fundamental association
10 of factors data decline and to escape multicollinearity. In the PCA cut-off point was 0.50
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(quash absolute value less than 0.50) that ensures the questionnaire reliability. The number of
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factors was restricted to six because theoretically, this study has proposed a total of six
14 underlying factors. As suggested, through the findings of PCA one item of ‘location and
15 environment’ (Le1) and one object of ‘customer loyalty’ (Cl4) turned into eliminated due to
16 the value less than 0.50. Table II presents the descriptive statistics and Cronbach alpha values
17 of the six constructs. Table III indicates the rotated factor loadings and their corresponding
18 eigenvalues. The rule of thumb for Cronbach alpha is 0.70 (Nunnally, 1978). In this study,
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the alpha values of each item are higher than the broadly diagnosed rule of thumb, and it is
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21 the indication of good internal consistency.
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23 [Please insert Table II here]
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[Please insert Table III here]
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31 4.2 Measurement model
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33 A measurement model through confirmatory factor analysis (CFA) was constructed. CFA
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was conducted to get a more meticulous explanation of customer loyalty. The CFA was
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applied to find the interrelationship among the variables in the measurement model. Several
indices measures such as Chi-square/degrees of freedom (χ2/df) ratio, root-mean-square error
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38 of approximation (RMSEA), goodness of fit index (GFI), normed fit index (NFI),
39 comparative fit index (CFI), incremental fit index (IFI) were used to assess the goodness-of-
40 fit of model as suggested by many scholars (Hair et al. (2010), Iacobucci (2010), Schumacker
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41 (1992)). Table IV presents the goodness of fit statistics for the measurement model and the
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structural model. All the measures of measurement model satisfy the suggested values. It is
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44 shown in the Table IV that χ2/df = 1.392, RMSEA = 0.044, GFI = 0.901, NFI = 0.945, CFI =
45 0.984, and IFI = 0.984. Thus, fit indices for the model are well within the threshold levels as
46 recommended by (Hair et al. 2010), Iacobucci (2010), Schumacker (1992).
47
48 [Please insert Table IV here]
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52 For reliability and validity, the test measurement model was further analyzed. Reliability of
53 an item is indicated by the amount of variance of that item in the underlying construct.
54 Though standardized loadings ≥ 0.50 are acceptable, loading greater than 0.70 exhibit item
55 reliability (Chin, 1998; Hair et al., 2010). Construct reliability represents the degree to which
56 an observed variable exposes an underlying factor. Value ≥ 0.70 is required for construct
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reliability. Item reliability and construct reliability results are shown in Table V. There is
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good item reliability because the standardized loadings ranged from 0.696 to 0.989. All
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3 values of construct reliability were more than the required threshold (i.e., 0.70), indicated a
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high level of construct reliability.
6
7 [Please insert Table V here]
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10 After the assessment of the required levels of reliability of the scale, this study evaluated the
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scale validity. Convergent validity and discriminant validity were checked under construct
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validity. Convergent validity assesses the magnitude of the correlation of dimensional
14 measures in the same concept. Calculation of average variance extracted (AVE) is suggested
15 to assess convergent validity (Fornell and Larcker, 1981; Hair et al., 2010). The higher
16 average variance extracted represents true indication of latent construct. The value of AVE
17 should be more than 0.50 (Hair et al., 2010). Table V presents the values of AVE for
18 constructs ranged from 0.63 to 0.84 surpassed the threshold value 0.50, which ensures the
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convergent validity. To assess convergent validity, t-statistics related to factor loadings are
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21 also taken under consideration (Rao and Troshani, 2007). Table V shows the t-statistics
values of all items that are significant at the 0.01 level and established the convergent validity
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23 of the constructs. To test discriminant validity, AVE is also used (Fornell and Larcker, 1981).
24 The role of thumb is that AVE values should be higher than corresponding squired inter-
25 construct correlation estimates (SIC) in the model (Churchill, 1979). The comparison
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26 between AVE and SIC is used to assess whether the model measures distinct constructs.
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Table VI presents squired inter-construct correlation estimates (SIC) values, and it was found
29 the supportive evidence for discriminant validity.
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31 [Please insert Table VI here]
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4.3 Structural model and Hypotheses Testing
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To confirm the hypothesis in the conceptual model, a structural model was created through
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38 maximum likelihood estimation using Amos 17.0. Figure-2 shows the results of the structural
39 model. Table IV presents the common model-fit indices, suggested values and fitness results
40 of the assessment of the structural model. As shown in Table IV the fit indices: χ2/df (1.375),
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41 GFI (0.903), CFI (0.985), NFI (0.946), IFI (0.985) and RMSEA (0.043) meeting the highest
42
proposed thresholds. The value of RMSEA must be lower than 0.060 (Hair et al., 2010).
43
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44 Figure-2 presents the values of RMSEA (0.043) within the threshold limit, indicating a better
45 fit model.
46 [Please insert Table VII here]
47
48
49 The structural modeling results were shown in Table VII. The results show that fast food
50
51
quality has a positive influence on customer satisfaction (H1). Again, the price that is charged
52 by fast food restaurants is positively linked with the level of customer satisfaction (H2). The
53 service quality of restaurants is highly associated with customer satisfaction (H4). The
54 service quality factor has the strongest positive influence on customer satisfaction compared
55 to other factors like food quality and price. Surprisingly the empirical result found the
56 negative relationship between location & environment and customer satisfaction (H3).
57
Therefore, this research hypothesis was not supported. Regarding customer loyalty, customer
58
59
satisfaction has a positive influence on customer loyalty of fast food restaurants in
60 Page | 9
 British Food Journal Page 10 of 24

1
2
3 Bangladesh (H5). The objectives of this study were fulfilled through these empirical results.
4
5
The results show a significant association between customer satisfaction and customer
6 loyalty, including food quality, price, and service quality. Though location & environment
7 and customer satisfaction are negatively associarted, customer satisfaction performed
8 mediating role between factors of customer satisfaction and customer loyalty of fast food
9 restaurants.
10
11
12
13
14 Food
15
Quality
16
17 H1 0.316*
18
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19
20
21 Price
H2 0.362**
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23 Customer Customer
24 Satisfaction
25 Loyalty
H3 -1.635** ** H5 0.818**
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26
Location &
27
Environment
28
29
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30
31 H4 0.842**
32 Service
33 Quality
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34
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36
** indicates p<0.01, and * indicates p<0.05
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37
38
39 Figure-2: Outcome of the hypothesized structural model
40
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44
45
46
47
48
49
50
51
52
53
54
55
56
57
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60 Page | 10
Page 11 of 24 British Food Journal

1
2
3 5. Discussion and Implications
4
5
This study provides several practical aspects to the owners and manages of fast food
6 restaurants. They may use these issues to improve the quality of the entire restaurant business
7 so that customers have better experiences. To improve the eating experience of customers,
8 their satisfaction and loyalty dimensions are very much significant (Carranza et al., 2018).
9 Customer satisfaction is influenced by food quality, price, and service quality. Many
10 researchers (e.g. Carranza, et al.,2018; Ghoochani, et al., 2018; Mattila, 2001; Ryu and Han,
11
2010; Samah, et al. 2018) argued in their researches service quality, price, and food quality
12
13
as the influencing factors of better eating experience and repeated eating intentions in hotel
14 and restaurant context.
15
16 In this study, first, we attempt to recognize the role quality of food, pricing of food, and
17 service quality on the satisfaction level of customers in the fast food restaurant context. The
18 key contribution of this study is to the identification of factors of customer satisfaction by
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19
considering the quality of food, service quality, and price charging competitiveness together
20
21 in Bangladeshi fast food restaurant industry. Customer perception regarding food quality,
pricing of food, and service quality have appositive effect on customer level of satisfaction.
itis

22
23 Secondly, we evaluated the indirect relationship between factors of satisfaction (e.g., food
24 quality, price, service quality) and customer loyalty through the moderating role of customer
25 satisfaction. Consistency as found between the results of this study and the study of Ryu and
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26 Han (2010) and Bujisic et al. (2014). They argued that reasonable price, quality perceptions
27
28
of customers, and physical facility have a significant effect on the level of satisfaction of the
29 customer in quick- casual restaurants.
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30
31 Food quality highly influences customer satisfactionlevel. Mattila (2001) stated that food
32 quality, service, and atmosphere are three factors of customer patronizing of the restaurant.
33 This study found that food quality had a positive impact on customer satisfaction of fast food
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34
restaurants. This study argues that providing high-quality food is the key success indication
35
36
for the restaurant business. This finding is similar with prior research results that focused on
the importance of quality of food of restaurants businesses (Bujisic, et al., 2014; Ha and
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37
38 Jang, 2010; Mattila, 2001). This study has taken under consideration pricing issue along with
39 those three factors. Competitiveness and fairness of price are positively linked with customer
40 satisfaction in a fast food restaurant. This finding of this study is also consistent with
rn

41 findings of prior researches (Konuk, 2015; Ling and Aun, 2018). Among the factors of
42
customer satisfaction, service quality is the most vital influencing factor. This study found a
43
al

44 highly positive association between service quality and customer satisfaction. This result of
45 this study is similar to the findings of prior studies (Carranza et al., 2018; Nguyen et al.,
46 2018; Waal and Heijden (2016). As illustrated in Figure 2, there is a significant association
47 between the satisfaction of customer and loyalty of the customer. It indicates that customer
48 satisfaction fully and positively mediates the factors of customer satisfaction (e.g., food
49 quality, price, service quality) and customer loyalty relationship in a fast food restaurant
50
51
context. This result is consistent with the results of previous researches (Carranza et al.,
52 2018; Espinosa et al., 2018; Nguyen et al., 2018). Therefore, it is crucial for restaurant
53 owners and managers to serve delicious and nutritious food to customers attractively and
54 consistently. Assurance of price fairness and consistent required service quality is a big
55 challenge for restaurant owners and managers. To retain the existing customers, the owners
56 and managers of the restaurant should take the initiatives and marketing strategies so that
57
customers become satisfied.
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59
60 Page | 11
 British Food Journal Page 12 of 24

1
2
3 From the managerial perspective, this research recognizes the significance of the several
4
5
factors of customer satisfaction to predict customer loyalty in the fast food restaurant context
6 in Bangladesh. Thus, fast food restaurant owners and managers should create an attractive
7 environment and ensure the required facilities that make the customer high perceived value
8 which will positively influence their satisfaction and their willingness to continue eating and
9 to recommend the restaurant to others. The results of this study show that perceived service
10 quality has the highest influence on customer satisfaction. It is recommended that the
11
management of restaurants should take special care about the quality of service of their
12
13
restaurants. Service quality is not directly measurable; rather, it a perception of customers
14 immediately after receiving the service. Necessary training for front line staffs and time to
15 serve food and receive a bill is important for improving service quality.
16
17 Regarding food quality, it is recommended that restaurants should provide tasty, nutritious,
18 healthy, and hygienic food to the customers. Food diversity, different presentation for
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19
different customers groups also recommended satisfying the different level of customers.
20
21 Competitiveness in charging price is crucial for the restaurant business because it is a highly
competitive nature of business. Since customers are very much price sensitive, pricing
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22
23 strategies should be based on the rival’s pricing strategy and other internal and external
24 factors. The factors of customer satisfaction, such as food quality, price, and service quality,
25 are indirectly related to customer patronage and repeat purchase intentions. A higher level of
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26 satisfaction intensifies the level of customer loyalty.

27
28
29
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31 6. Conclusions, Limitations, and Suggestions for Future Research
32 This study attempts to contribute toward understanding the factors of customer satisfaction
33 and customer loyalty in the restaurant industry in Bangladesh. Findings exposed that
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34
customer perception regarding food quality, price charging, and customer perception
35
36
regarding service quality is a crucial determinant of customer satisfaction, and customer
satisfaction moderates between factors of satisfaction and customer loyalty. When customers
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37
38 perceive that the quality of food is good, their satisfaction level can be increased. Also, if
39 customers feel that the price is fair and reasonable, their satisfaction with quality food will be
40 enhanced. Further, if the perception and experience of customers about the quality of service
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41 are good, it increases customer level of satisfaction. The service quality factor has the
42
strongest positive influence on customer satisfaction compared to other factors like food
43
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44 quality and price. Theoretically, when customers believe that the location and environment of
45 a restaurant are nice and attractive, their satisfaction level increases. But in this study, the
46 empirical result did not find supportive evidence for this theoretical argument. The results of
47 this study provided a negative relationship between location & environment and customer
48 satisfaction. Finally, our empirical results provide strong support for a positive relationship
49 between customer satisfaction and loyalty in the fast food restaurant industry.
50
51
52 Although this study has a contribution toward understanding the factors of customer
53 satisfaction and customer loyalty in the fast food restaurant industry, there are some
54 limitations. First, it is specific to one context (e.g., Bangladesh) and one subset of the
55 restaurant industry (e.g., fast food restaurant). Second, the data were collected using a
56 convenient sampling method; the findings of this study will face the limitations of
57
generalization. Third, customers of fast food restaurant were treated as homogeneous; all
58
59
were considered identical. Future research is needed for the category of restaurant customers.
60 Page | 12
Page 13 of 24 British Food Journal

1
2
3 Fourth, price awareness can be different for different demographic groups such as male,
4
5
female, married, old-age, young, etc. Demographic characteristics regarding price awareness
6 can be addressed in further studies to find an overall result of customer satisfaction and
7 loyalty. Further studies can be conducted on other types of restaurants such as local, Chinese
8 & Thai, Continental restaurant. Since customer satisfaction is a dynamic issue, it should be
9 measured regularly. This study is a cross-sectional study; it is recommended that the future
10 study would apply a longitudinal approach to get the relative importance of customer
11
satisfaction on customer loyalty. Finally, the role of the restaurant, a brand of the restaurant,
12
13
brand value, the image should be included as contributing variables to understand the
14 relationship of variables among study constructs properly.
15
16
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Page 19 of 24 British Food Journal

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4 Customer loyalty in the fast food restaurants of
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Bangladesh
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8 Table I Constructs and Definitions
9 Sl. Constructs Definition Sources
10 No.
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1 Food quality When anything is appropriate for usage, we Delwiche(2004); Kim
13 mean it has quality, and in the case of food, if and Ham (2016);
14 it is appropriate for consumption, we can say Kivela et al. (1999);
15 the food is quality food. Food quality depends Mason et al. (2016);
16 on varieties in menu, taste, freshness, Namkung and
17 temperature, healthy options, temperature, Jang(2007); Sulek
18 and nutrition value. and Hensley (2004)
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20 2 Price Price is defined as to obtain the product or Kim et al. (2006);
21 service what the customer gives or pays to the Kim and Lee (2010);
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22 seller of product or service provider. Kotler and Keller

23 Consumer perception regarding price depends (2016); Perreault, Jr.
24 on some factors such as price level, price and McCarthy
25 fairness, price value, price perceptibility, (2000); Zielke (2008)
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price advertising, special offer, promotion,
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28 etc. which influences the level of satisfaction
29 of the consumer.
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30 3 Location and The environment is the perception of the Baker and Wakefield
31 environment customer regarding the quality of their (2012); Jani and
32 atmospheres. This perception is different for Han(2015); Levy and
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a different group of customers according to Weitz (2012); Ruy

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35 their difference (i.e., age and gender) and and Han(2010);
36 consumption orientation (individual Sands et al. (2015)
consumption vs. social consumption). Easy to
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38 go location and attractive environment both
39 have a contribution to improved sales and
40 consumer spending in the restaurant.
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4 Service Service quality indicates the opinion of the Cronin and Taylor
43 quality buyer or consumer approximately supremacy (1992); Han et al.
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44 of a product or service, and it is the (2018); Parasuraman

45 disposition of mindset toward that products et al. (1988); Uddin
46 or services To assess the service quality, and Akhter (2012);
47 SERVQUAL model and SERVPERF model Wu and Linag (2009)
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were proposed.
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50 5 Customer After consumption of any product or service, Caruana (2002); Lin
51 satisfaction the customer’s evaluation of the perceived and Wang (2006);
52 differences between the actual value received Nam et al. (2011);
53 and previously expected value is referred to as Shamah et al.
54 customer satisfaction. In the restaurant (2018)Tu et al.
55 industry, after the consumption of food and (2012);
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beverage satisfaction can be measured
58 through the evaluation of direct consumption
59 experiences and that is found from the
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 British Food Journal Page 20 of 24

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3 comparison between actual performance and
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prior expectation
6 6 Customer Loyalty is expressed through a strong Aaker (1991); Han et
7 loyalty commitment to repurchase or continuous al. (2018); Jacoby
8 purchase of a product or service. In a (1971); Oliver
9 competitive market when the rival firms offer (1999); Nawaz and
10 something or some environmental issues has Usman (2011)
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existence, the customer is in the position of
13 buying same brand or brand series, and he is
14 in the loyal position of that brand or brand
15 series
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Table II: Summary statistics of the questionnaire survey
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20 Constructs No. of items Mean SD α
21 Food quality 5 5.993 1.037 0.893
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22 Price 4 4.779 1.182 0.929

23 Location & environment 4 5.728 1.090 0.888
24 Service quality 4 5.523 1.226 0.952
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Customer satisfaction 4 5.051 1.512 0.956
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27 Customer loyalty 3 5.302 1.319 0.928
28 SD = standard deviation; α = cronbach alpha; overall α = 0.917
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30 Table III: Result of principal component analysis

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No. Food Price Location & Service Customer Customer
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33 quality environment quality satisfaction loyalty
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34 Fq1 0.854
35 Fq2 0.872
36 Fq3 0.822
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37 Fq4 0.784
38 Fq5 0.758
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40 P1 0.878
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41 P2 0.875
42 P3 0.877
43 P4 0.797
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44 Le2 0.866
45 Le3 0.660
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Le4 0.895
48 Le5 0.677
49 Sq1 0.884
50 Sq2 0.879
51 Sq3 0.843
52 Sq4 0.846
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Cs1 0.920
55 Cs2 0.932
56 Cs3 0.916
57 Cs4 0.879
58 Cl1 0.850
59 Cl2 0.776
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Page 21 of 24 British Food Journal

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3 Cl3 0.852
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5 Eige 8.527 4.117 2.769 1.845 1.413 1.094
6 nval
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8 Vari 35.528 17.154 11.537 7.689 5.889 4.560
9 ence
10 expla
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ined
13 (%)
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17 Table IV: Goodness of fit statistics for measurement model and structural model
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Suggested Measurement Structural
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20 values model values model values
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χ /df <3 1.392 1.375
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22 RMSEA <0.06 0.044 0.043

23 GFI >0.90 0.901 0.903
24 NFI >0.90 0.945 0.946
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CFI >0.90 0.984 0.985
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27 IFI >0.90 0.984 0.985
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Table V: Measurement model results
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34 Constructs and Standardized t-statistics Construct Average

35 variables loadings reliability variance
36 (CR) extracted
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37 (AVE)
38 Food Quality
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Fq1 0.883 15.568**
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41 Fq2 0.910 16.421** 0.89 0.63

42 Fq3 0.751 12.228**
43 Fq4 0.696 11.124**
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44 Fq5 0.708 11.253**

45 Price
46 P1 0.812 12.696**
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P2 0.863 13.817** 0.92 0.75
49 P3 0.913 14.776**
50 P4 0.869 13.614**
51 Location & Environment
52 Le2 0.953 18.197** 0.90 0.70
53 Le3 0.708 11.805**
54 Le4 0.989 19.124**
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Le5 0.642 10.177**
57 Service Quality
58 Sq1 0.945 17.401** 0.94 0.80
59 Sq2 0.949 17.379**
60 Sq3 0.811 13.714**
 British Food Journal Page 22 of 24

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3 Sq4 0.873 15.134**
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5 Customer Satisfaction
6 Cs1 0.923 17.223**
7 Cs2 0.953 18.273** 0.96 0.84
8 Cs3 0.922 17.221**
9 Cs4 0.872 15.680**
10 Customer Loyalty
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Cl1 0.957 17.410**
13 Cl2 0.951 17.402** 0.93 0.81
14 Cl3 0.789 13.292**
15 **Indicates significance at p< 0.01 level.
16 CR= (∑ Standardized loadings) 2 ∕ [(∑ Standardized loadings) 2+ ∑ (measurement indicator error)]
17 AVE = ∑ (Standardized loadings2) ∕ [∑ (Standardized loadings2) + ∑ (measurement indicator error)]
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21 Table VI: Squared correlations between constructs
Food Price Location & Service Customer Customer
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23 Quality Environment Quality Satisfaction Loyalty
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25 Price 0.12
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Location & 0.06 0.01
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28 Environment
29 Service 0.11 0.10 0.34
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30 Quality
31 Customer 0.04 0.22 0.01 0.04
32 Satisfaction
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Customer 0.07 0.08 0.35 0.33 0.02

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35 Loyalty
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38 Table VII: Path analysis of structural model
39 Casual path Hypotheses Path t-statistics Results
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coefficient
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42 Food quality H1 0.316* 2.201 Supported
43 Customer satisfaction
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44 Price H2 0.362** 2.597 Supported

45 Customer satisfaction
46 Location & Environment H3 -1.635** -5.030 Not
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Customer satisfaction Supported
49 Service quality H4 0.842** 4.989 Supported
50 Customer satisfaction
51 Customer satisfaction H5 0.818** 4.908 Supported
52 Customer loyalty
53 **indicates significance at p< 0.01 level; *indicates significance at p< 0.05 level
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Page 23 of 24 British Food Journal

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3 Appendix 1: Survey Instruments
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Constructs Variables Mean
6 Food Quality This restaurant serves healthy food. (Fq1) 6.255
7 Food items are tasty. (Fq2) 6.167
8 It has varieties of menu. (Fq3) 6.201
9 This restaurant provides fresh foods. (Fq4) 5.745
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It maintains proper food temperature. (Fq5) 5.598
12 Price Price of this restaurant is competitive. (P1) 4.755
13 The price is reasonable. (P2) 4.681
14 The payment system is easy and convenient (i.e., cash or card). (P3) 4.892
15 Often offer “special offer” or “occasional offer” (P4) 4.789
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Location & Car parking arrangement is good. (Le1) 5.727
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18 Environment This restaurant has a sufficient and comfortable seating arrangement. 5.863
(Le2)
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20 Existence of fun spaces for kids and youth in this restaurant. (Le3) 5.495
21 Situated in good locations. (Le4) 5.902
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22 This restaurant is decorated attractively. (Le5) 5.652

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24 Service Staffs of this restaurant are polite/friendly. (Sq1) 5.569
25 Quality Staffs are knowledgeable about their foods and services. (Sq2) 5.495
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26 This restaurant provides speedy and desirable services. (Sq3) 5.525

27 This restaurant has unique service style. (Sq4) 5.505
28 Customer I think I have rightly chosen this restaurant. (Cs1) 5.152
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Satisfaction I think this restaurant successfully provides the value of the money. 5.010
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31 (Cs2)
32 I feel satisfied with this restaurant. (Cs3) 5.059
33 This restaurant provides VAT (value added tax) challan properly. (Cs4) 4.985
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34 Customer I would continue in this restaurant in the future. (Cl1) 5.294

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Loyalty I would recommend this restaurant to someone else. (Cl2) 5.275
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I would consume varieties of the menu of this restaurant. (Cl3) 5.338
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38 For me, this restaurant is the best alternative. (Cl4) 5.301
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