A written proposal in

Hospitality Management

December 5,2018
I. GENERAL SUBJECT AREA

 Service Management

II. SPECIFIC TOPIC

Customer satisfaction and consumer loyalty

III. TITLE

The relationship between customer satisfaction and consumer loyalty

IV. CONTENT

A. Objectives

The purpose of this research is to study the relationship between customer satisfaction and
consumer loyalty and apply its relationship into all the market industries including products and
services. It is important to fully understand that the loyalty which is the main goal of each
industry is very hard to achieve and is not very easy to be reached by industries due to the
customer satisfaction which is very hard to reach by itself, and the service quality as well. There
are many other variables that can affect the consumer loyalty such as the high level of
competition among today’s companies and the fast track of technological advancement. These
reasons indicate that companies should work hard because loyalty is a fleeting issue, today’s
loyal customer would not be tomorrow’s loyal customer.

B. importance and Significance

This study will benefits the following:

Establishment. This research will be useful to the establishment to be able to know and enhance
their practices to get the loyalty and satisfied the ccustomers.

Employees. The study may serve as guide to improve knowledge and fully understand the
loyalty of customers.

Future Researchers. This research will be a useful reference for the researchers who would plan
to make any related study in Hospitality Management.

Students. This study may serve as a guide and reference for the students undertaking similar
studies.

C. Scope and Limitation

This study is limited on selected food establishment in Bulacan. This research only
focuses on the customer satisfaction and consumer loyalty. The researchers were able to
gathered data with the use of survey questionnaire. The duration of the study was from
Decemeber to January. The respondents of the study are the customer from different food
establishment within Bulacan.

D. Data Gathering Procedure

The relationship between customer satisfaction and consumer loyalty are based on qualitative
research method. It includes research design and an evaluation of the answers, which were given
as questionnaires, handed out to the customers of the company.

E. Availability of Resources
Literature Review

“Regarding the competitive environment, there is a need for banks to plan their

strategies that will differentiate them from another. This can be achieved through the

delivery of high service quality. The practice of excellent service quality has been proven

that customer satisfaction will significantly lead to customer loyalty” (Caruana , 2000;

Caruana, 2007).

Customer Satisfaction

“Customer satisfaction is one of the most important issue concerning business

organization of all types, which is justified by the customer oriented philosophy and the

principles of continues improvement in modern enterprise” (Arokiasamy, 2013).

The marketing concept suggests that a satisfied buyer will be more likely to

repurchase again, or at least has the intention of repurchasing again, than those who are

dissatisfied. They consider that customer satisfaction and retention the most important

long-term objectives of firms. Reichheld and Sasser (1990) suggested that new buyers

cost more to serve than repeat customer, which means that repeat customers are

benefiting a firm’s cost structure.

A firm’s primary strategic objectives are to minimize customer regress and to

maximize customer intention rates to buy, as evidenced by the recent emphasis on

both reduce marketing costs, and develop more stable levels of sales when a large

number of satisfied buyers are retained to purchase again in the future.

Those who buy the goods or services provided by companies are customers. In other

words, a customer is a stakeholder of an organization who provides payment in

exchange for the offer provided to him by the organization with the aim of fulfilling a

need and to maximise satisfaction. Sometimes the term customer and consumer are

confusing. A customer can be a consumer, but a consumer may not necessarily be a

customer. Another author explained this difference. I.e. a customer is the person who

does the buying of the products and the consumer is the person who ultimately

consumes the product (Solomon, 2009, Relationship between Customer Satisfaction

and Service Quality: a study of three Service sectors)

When a consumer or customer is contented with either the product or services it is termed
satisfaction. Satisfaction can also be a person’s feelings of pleasure or disappointment that
results from comparing a product’s perceived performance or outcome with their expectations
(Kotler & Keller, 2009). As a matter of fact, satisfaction could be the pleasure derived by
someone from the consumption of goods or services offered by

another person or group of people; or it can be the state of being happy with a situation.

Satisfaction varies from one person to another because it is utility. “One man’s meal is

another man’s poison,” an old adage stated describing utility; thus highlighting the fact

that it is sometimes very difficult to satisfy everybody or to determine satisfaction

Giving excellent external customer service is only possible when there is excellent internal
customer service. Internal customer service refers to the well-being and positive group
dynamics of staff who can work together to help the shoppers. Service stems from service
providers. If staffs are truly happy, they will be motivated and committed to share the same joy
with their external shoppers. Therefore, treating internal staff well promotes external customer
service excellence. Adopting the Servqual model of service quality, and external survey is
conducted to examine the shoppers views on the importance of customer service in their
shopping decision and to track the current service performance of downtown department
stores. It consists of tangibility, reliability, responsiveness, assurance and empathy (Customer
Service 2013)

Lucas, (2012) claimed that enhancing customer satisfaction as a strategy for retaining customers
is a big factor for many customers in remaining loyal. In an own organization, efforts could be a
deciding factor in customer ratings for the quality of service rendered. Building good
relationship in order to increased customer satisfaction is valuable, because it can lead to repeat
business – the key to keeping a business productivity and profitable.

Marasigan, et al., (2010) encouraged the employees of the company to be more consistent in
their behavior, attitude and performance in dealing with customers. They also encouraged
giving suggestions to the management that they think could help to enhance the training
program. Further, the researcher also encouraged the management of Bench to have a regular
evaluation regarding the customer service training program to maintain its effectiveness.
In Hague‘s (2012) article on ―Customer Satisfaction Surveys and Customer Satisfaction
Research‖, he detailed the factors or attributes of customer‘s points of view on staff and service
of a company. It includes courtesy from sales staff, representative‘s availability, representative‘s
knowledge, reliability of returning calls, friendliness of the sales staff, complaint resolution,
responsiveness to enquiries, after sales service and technical service.

enhance consumer‘s willing of purchase.

Aguba et al. (2008) indicated that efficient and constant supervision of the employee must be
observed to maintain the good impression of the customer. Further, it indicated that customer‘s
evaluation should be considered to obtain service improvement. Food Court operator may
encourage their employees to be more productive and motivate them to attend to customer‘s
need, request and complaints.

F. Expected Output

The study investigates the relationship of the customer satisfaction and consumer loyalty. The
expected results of this study are recommended to the company to observe if the company
needs to enhance or and improve its strategies. Also, it gives not only information for the
company’s possible outcomes , but it will greatly hows a perfect example of service quality from
the customer’s point of view to attain customer satisfaction and consumer loyalty.