The Roles of the Physical Environment, Price Perception, and Customer Satisfaction in Determining Customer Loyalty in the Restaurant Industry

Abstract

This research aims to examine the relationships among three components of the physical environment (i.e., décor and artifacts, spatial layout, and ambient conditions), price perception, customer satisfaction, and customer loyalty in the restaurant industry. A total of 279 cases from a survey were used to assess overall fit of the proposed model and test hypotheses using structural equation modeling. The three factors of the physical environment strongly influenced how customers perceived price, and this price perception, in turn, enhanced customer satisfaction level and directly/indirectly influenced customer loyalty. Décor and artifacts were the most significant predictors of price perception among the three components of the physical environment. Furthermore, both price perception and customer satisfaction played significant partial/complete mediating roles in the proposed model. The paper provides potential ways for restaurateurs to increase customer loyalty by improving their understanding of the roles of physical environment, price perception, and customer satisfaction.

Restaurant's Atmospheric Elements: What the customer wants

“…According to Han and Ryu (2009) in their research, customer loyalty depends largely on customer satisfaction. The same idea is shared with Fornell et al (1996), Ladhari et al (2008), andMcDougall andLevesque (2000).…”

“…Diners use the following types of clues to judge a restaurant experience: functional-the technical quality of the food and service; mechanic-the ambience and other design and technical elements; and humanism-the performance, behaviour, and appearance of the employees sharing the same principle. This is consistent with the Ariffin, H.F., et.al., / Journal of ASIAN Behavioural Studies, jABs, 2(3), Apr / Jun 2017 (p.85-94) 88 findings of Parsa et al (2005), who found that while food quality was critical to restaurant success, excellent food alone did not guarantee success.According to Han and Ryu (2009) in their research, customer loyalty depends largely on customer satisfaction. The same idea is shared with Fornell et al (1996), Ladhari et al (2008), andMcDougall andLevesque (2000).…”

Using servicescape to manage student commitment towards a higher education institution

“…Several studies have confirmed the effect of the physical environment on emotional responses and behavioural intentions (Lee, Chua and Han 2016;Han and Ryu 2009;Ryu and Jang 2008).…”

Inquiry about key dimensions of service qualities and guests satisfaction in restaurants

“…Kako bi zadržala potrošače i obezbedila njihovu lojalnost, preduzeća moraju biti fokusirana na isporuku superiorne vrednosti i postizanje visokog nivoa satisfakcije (Stanković & Djukić, 2011). U brojnim studijama potvrđena je pozitivna veza između zadovoljstva i lojalnosti potrošača (Han & Ryu, 2009;Kivela et al, 1999;Ryu et al, 2010). Međutim, ovu tvrdnju ne treba generalizovati, jer se javljaju situacije u kojima povećanje nivoa satisfakcije ne vodi ka lojalnosti.…”