i

JOSE RIZAL MEMORIAL STATE UNIVERSITY

The Premier University in ZamboangadelNorte
Main Campus, Dapitan City
 FACTORS AFFECTING RESTAURANT SALES

A Thesis
Presented to
The Faculty of the College of Business and Accountancy
JOSE RIZAL MEMORIAL STATE UNIVERSITY
The Premier University in Zamboangadel Norte Main
Campus, Dapitan City

In Partial Fulfilment
for the Requirement of the Degree
Bachelor of Science in Hotel and Restaurant Management

MARY APRIL L. ELOPRE

MARY ANN B. PIALOGO
ARCHEL B. EHAN
February 2020
 Republic of the Philippines
JOSE RIZAL MEMORIAL STATE UNIVERSITY
The Premier University in Zamboanga Del Norte
Main Campus, Dapitan City

COLLEGE OF BUSINESS AND ACCOUNTANCY

APPROVAL SHEET

This thesis entitled “FACTORS AFFECTING RESTAURANT SALES”

prepared and submitted by MARIA APRIL L. ELOPRE, MARY ANN B. PIALOGO,
and ARCHEL B. EHAN in partial fulfillment for the degree Bachelor of Science in
Hotel and Restaurant Management has been examined and is recommended for
acceptance and approval.

MIRASON B. EMPEYNADO, Ed.D.

Adviser

APPROVED by the Panel of Examiners on Oral Defense with the rating of________.

WILFREDO D. CARREON JR., D.M.,SFRIM,FBE

Chairman

_____________________________ ______________________________
Member Member

ACCEPTED and APPROVED by the Dean of the College of Business and

Accountancy.

WILFREDO D. CARREON JR., D.M., SFRIM, FBE

Dean, College of Business and Accountancy
FACTORS AFFECTING RESTAURANT SALES
Abstract
 DEDICATION

This thesis is sincerely dedicated to our loving family, whose sacrifice and undying

support boosts our courage and strength to continue our studies and to the people who

have greatly helped in any means.

To the people who extended their help and assistance.

To the future students who might read this feasibility study, may this would help you in

your research.

Above all to the Almighty Father for His eternal blessing and guidance and gift of

strength to overcome every struggle we met.

The Researcher
 ACKNOWLEDGEMENT

The researchers would like to acknowledge the people who have suggested and shared

their ideas to the conceptualization of this research.

This thesis has been made possible by the guidance, supervision, cooperation,

and participation of the following:

Our parents for their financial assistance and for guiding and giving words of wisdom to

inspire us in doing our best in preparing this thesis.

Dr. Wilfredo D. Carreon Jr., the Dean of the College of Business and Accountancy

and our instructor for his support, encouragement and invaluable assistant for the

development of this manuscript.

To our adviser Dr. Merason B. Empeynado, for the help and guidance to complete this

manuscript.

________________________________and __________________________, panel

members, for their remarkable suggestions and brilliant ideas.

Above all we would like to invoke and greatly acknowledge the most needed guidance of

The Almighty Father, Jesus Christ, the son in the unity of the Holy Spirit all glory are

yours now

and forever.

The Researchers
 TABLE OF CONTENTS

Page

TITLE PAGE

APPROVAL SHEET

ABSTRACT

DEDICATION

ACKNOWLEDGEMENT

TABLE OF CONTENTS

LIST OF TABLES

LIST OF FIGURES

Chapter

1 THE PROBLEM AND ITS

SCOPE

Introduction

Theoretical/Conceptual Framework of the Study

Statement of the Problems

Significance of the Study

Scope and Delimitation of the Study

Definition of Terms

2 REVIEW OF LITERATURE AND

STUDIES

Literature

Studies
 3 RESEARCH METHODOLOGY

Method Used Research

Environment Respondents

of the Study Sampling

Procedure Research

Instrument

Validation of the Research

Instrument Scoring Procedure Data-

Gathering procedure Statistical

Treatment

4 PRESENTATION, ANALYSISAND INTERPRETATION

OF DATA

5 SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

Summary

Findings

Conclusion

Recommendation

REFERENCES

APPENDICES

Appendix A Approval Letter

Appendix B Letter

Appendix C Questionnaire
 viii

CURRICULUM VITAE

LIST OF TABLES

Table Page
 ix

LIST OF FIGURE

Figure Page

1 Schema of the Study

 ABSTRACT

Evidence from past research and insights from exploratory investigation are combined in a

conceptual model that defines and relates price, perceived quality and value. Proposition about the

concepts and their difference are presented then supported in the evidence from literature. Discussion

centers on how price, quality and value affects the restaurant sales.

Both qualitative and quantitative information from the research site are analyzed to investigate

these factors. Results reveals a strong agreement with restaurant operators that price, quality and

services greatly affects customer satisfaction and by implication greatly affects restaurant sales.

Data suggest that there is no significant difference between price and quality and similarly, price

and value. However there is a significant difference between quality and value.
 Chapter 1

THE PROBLEM AND ITS SCOPE

Introduction

Food, Shelter and Water, these three things are essential for humanity to survive.

When it comes to food, we can note the change in the eating patterns of people starting

from the era of hunting and gathering for food. By that time the consumption of fast-food

is increased. Therefore, the scope of business is also increased in fast-food outlets. In the

competitive environment it is necessary for service provider to be unique. Food and

beverage industry plays major role in economic growth (Shah et. al, 2017).

Restaurants are one of the many businesses that affect economic growth in the

Philippines. According to the US National Restaurant Association (2009), with 945,000

restaurant locations nationally; the restaurant industry's direct sales are $566 billion a

year, or more than $1.55 billion a day. Today, the steady growth in the number of

restaurants and the various changes taking place in food service industry, have resulted in

it becoming very competitive. Restaurant operators must be aware of the wants and needs

of customers who will be most likely to choose their establishment. In the restaurant

business, customer satisfaction can be linked directly to restaurant sales (Hwang & Zhao,

2010).To find the ideal marketing strategy, many restaurant owners have spent

considerable time and effort in order to sustain their status in a competitive restaurant

market. They are striving hard to satisfy customers in order to retain them and build

market share.

Over the past 12 months, the restaurant industry has experienced significant sales

growth. According to the National Restaurant Association, sales in this industry are

poised to grow to $709 billion by 2015. American multinational investment banking firm
 st
Goldman Sachs lists the Philippines as one of the 21 century ‘Next Eleven’ economies

based on macroeconomic stability, political maturity, the

openness of trade and investment policies, and the quality of education.

According to the PH Food Service Sector, the growing demand for convenience has led

to the expansion of the Philippine food service industry in the form of fast-food

restaurants and casual dining restaurants. Based on the 2012 nationwide Census of

Philippines Business and Industry (CPBI), the Philippines food service industry amounts

to roughly US$7.2 billion with an estimated 15% to 20% annual growth over the past

decades.

In the recent research of Espino (2017), restaurants face different challenges,

which include uncertainty of economic status, competition, demographic change in

markets and changes in habits of the employees. Due to intense competition in food and

beverage industry, restaurants should provide service effectively and efficiently to their

customers to retain and acquire continuous brand advocacy and level of customer

satisfaction. According to Arcalas (2018), Food service sales in the country could surpass

the $14-billion mark this year as the improvement in the purchasing power of Filipinos

and worsening traffic in urban areas are pushing them to dine out. A Global Agricultural

Information Network (GAIN) report published recently indicated that total food service

sales in the Philippines could rise by 8 percent to $14.08 billion, from $13.04 billion last

year. The GAIN report, which was prepared by the United States Department of

Agriculture Foreign Agricultural Service in Manila, noted that the country’s food service

sales last year rose by 8.57 percent, from $12.01 billion in 2016.

Masigan (2019) recently wrote on his study stating that numbers don’t lie. He

then continued that the Philippine food service industry, in 2016, generated P535.9
billion in revenues on the back of 84,503 food outlets operating in the country. This year,

revenues are seen to top P616 billion with 3,126 more food service establishments in

operation than there were in 2016.The insatiable demand for food comes from our

enormous population of 106.5 million whose median age of 24.3 years old is the prime

age for eating out. Filipinos added 4,875 newborn every day. The food service industry is

seen to expand in tandem with the growing population and rising incomes. For the year

2020and 2021, revenueds are seen to reach P637.3 billion and P656.5

billion respectively.

No surprise, then, that everyone wants to put up a restaurant, be it fledgling

entrepreneurs or established businessmen looking for a cash cow on the side. To many,

the food business seems like an easy way to make money. Thus, in this paper the

researchers ought to seek and analyze the factors that affect restaurant sales in the

Dapitan City and how do these factors affect restaurant sales?

Theoretical/Conceptual Framework

The present study is based on the concept that price, quality and value affects the

restaurant sales. The idea is supported by previous studies developed by Razak et. al.

(2016) which states that the level of product quality and price will impact the perceived

level of satisfaction. Furthermore, the effect of customer value towards customer

satisfaction can be explained that the most positive perceptions of the product value will

make a positive impact on the acquisition of satisfaction (Razak, et. al., 2016). The study

of Hwang and Zhao (2010), which states that the idea that in the restaurant business,

customer satisfaction can be linked directly to restaurant sales also supports the present

study. The present study aims to investigate on the relationship among the factors

affecting restaurant sales in Dapitan City

Price
Razak et. al., (2016) argued that how consumers interpret a certain cost, in which

a product’s high-low cost may have a substantial impact on a customer’s decision to buy

a product. Consumers will look into to the price payed by other customers.

The equality of the price will affect the customer's perception and eventually affect their 

decision to become a customer.

According to Khan & Afsheen (2012), price is considerably crucial element for

raising the growth of sales since almost consumers will estimate the product or service

value as well as make decision for any of their purchase through price. In terms of

customer's view, price is actually used as a signal in order to evaluate their experiences

with goods or services performance. Varki, (2011), further states that price is considered

as a standard measure when they spend on products and services and from those

experiences, it will shape their attitudes toward providers.

An industry that substantially thrives on customer loyalty and is considered as one

of the biggest sectors that greatly contributes to the Philippine economy is the fast-food

sector (Bureau, 2012). The changing market preferences are partly attributed to the

buying and eating habits of younger generations. It appears that present generation

customers are price and health conscious, prefer cafes and coffee shops over fast-food

outlets, want technology and Wi-Fi enabled eating locations and generally distrustful of

fast-food brands because of their image as producers of unhealthy food (Bodker, 2017;

Peterson, 2014; Pickard, 2017; Taylor, 2017). Their distinct preferences have made

strong fast food brands such as McDonalds struggle with sales and new and recently

launched brands succeed beyond expectations.

Quality

According to Razak et. al., (2016), it is important to note that the quality of the

product is not seen from the company’s standpoint, it is viewed from the customer’s

perspective. Associated with that, it raised two important factors that affect the quality of

the product, namely the expected product quality and the perceived product quality. In

details, if the perceived product quality is in line with the expectation, then the customer

will perceive the product quality as a good quality and also feel satisfied. Conversely, if

the perceived product quality is not as expected, then the quality of the product as the

customer perceived is qualified as a bad product quality. Thus, the qualification of both

bad and good product depends on the ability of the company to meet the customer

expectations. This view can be applied on the restaurant industry because restaurant’s

offers both product and service.

Quality can be defined broadly as superiority or excellence. By extention,

perceived quality is the customer’s judgment about the product’s and/or service’s overall

excellence. Quality as applied in restaurant industry may be classified into two – product

and service. Service quality gains that leading to a raise in satisfaction and it is found out

that low perceived quality may result in high service satisfaction (Ryu, 2009). According

to Taylor (2011), product quality covers the features, aroma, aesthetics and characteristics

of a product or service that allows satisfying definite or inferred needs of customers.

Product quality is the fitness of use of the conformance to the requirement of customers.

In service industry context product quality is considered as service quality that includes

the approach how that service provider for example the airline, restaurants, banks and

retail stores serve their customers, how the product they offer satisfy customer needs as
physical quality of product and how such particular product apparently communicate that

brand image to build brand loyalty and in result brand equity (Chang & Chieng,2009).

Value

Customer value is seen as a ratio of the benefits felt by the customer along with its

sacrifice. The implementation of this sacrifice is in line with the exchange process such

as transaction costs and the risk of the products offered by the company. Henceforth,

there will be a disappointment when the ratio value that is perceived by the economic

sacrifices of the customers with the products offered by the company are not in

accordance with the customer expectations. Otherwise, when the ratio value is

appropriate or exceeding the customer expectations, customers will feel such satisfaction

(Razak et. al., 2016).

Value is proposed to be a higher level abstraction. Value is being used by

customer as a measure of their preference. According to Manala – O (2018), the change

in customer preferences and significance of Generation Z now and in the future more so

has made it clear that in order for fast food operators to remain competitive is to monitor

young customers’ buying behavior and develop appropriate strategies. This is to

capitalize on the market opportunity of Generation Z and remain relevant to them. Hence,

there is a need for fast-food retailers to study Generation Z customers and understand

their buying behavior now. More importantly, managers should know what makes this

market segment loyal to a brand and the certain factors that impact loyalty the most. The

need for this information is urgent so as not to miss market opportunities simply because

fast-food retailers could not stay relevant and in touch with their younger market (Weikel,

2014). Fast-food companies and managers must be ahead of the expected shifts that will
take place in the industry as a result of Generation Z growing to become the global

marketplace’s largest customer segment.

As the restaurant industry gets more challenging, employing food aromas in food

stores to attract customer and promote sales is a frequently used marketing tactic (Yuxia

Ouyang, 2015). To study factors that affect customers’ satisfaction and behaviors in the

restaurant setting, most research has adopted the theory of restaurant atmospherics (Ryu

& Jang, 2009) to try to define all elements of the physical environment in the restaurant

context. Food aromas are generally thought to be one of the important factors of

restaurant ambience and are closely connected with customers’ evaluation of the

restaurant. In addition, recent research concerning ambient scents has also suggested the

usefulness of the theory of processing fluency for studies examining aromas’ impact.

More specifically, this theory suggests that olfactory stimuli that make information

cognitively easier or more fluent to process will lead to favorable marketing outcomes

(Herrmann, Zidansek, Sprott&Spangenberg, 2013). In other words, food aromas may

lead to scent-induced congruent food consumption behaviors.

 7

INDEPENDENT VARIABLE DEPENDENT VARIABLE

 Price

 Quality


Restaurant

Value Sales

Figure 1. Schema of the Study

Statement of the Problem

The study aims to seek factors affecting restaurant sales particularly in the area of

Dapitan City during the years of 2019 – 2020. Specifically, it sought to answer the

following question.

1. What is the profile of restaurant in Dapitan City as to:

1.1 Name

1.2 Address

1.3 Number of years established

2. How do the following factors affect the sales among restaurants in

Dapitan City?

2.1 Price

2.2 Quality

2.3 Value

3. Is there a significant difference among the factors affecting restaurant sales in

Dapitan City?

Hypotheses
H01: There is no significant difference between price and quality.

H02: There is no significant difference between price and value.

H03: There is no significant difference between value and quality.

Significance of the Study

This study is significant to the following:

Customers. The result of this study will be beneficial to customers who would like to

venture and create business out of the ideas and inspirations gathered from

benchmarking.

Entrepreneurs. This study shall give benefit to young entrepreneurs who probably

would want to venture in the food industry business as this study gives off relevant

details prior to restaurant sales.

Future researchers. The findings provide some light regarding areas that need to be

researched in the future.

Restaurant owners. The findings shall be helpful to the restaurant owners to create

innovative ideas that could maintain and surpass the growth sales of the establishment.

Scope and Delimitation of the Study

This study focuses on how price, quality and value affects restaurant sales and how these

factors are related to each other. The respondents of the study were the owners/managers

of restaurant based in Dapitan City. The study was conducted during the School Year

2019 -2020. The findings and implications of this study should be viewed in the light of

potential limitations that might reveal directions for future research. First, the theory used

in this paper was based on limited factors – price, quality and value only and there might

be unmentioned factors that affect sales among restaurants. The findings may not be

generalizable since the data may not represent the population of other areas in the

country.

Definition of Terms

To fully understand the study following terms are hereby operationally defined:

Entrepreneurs

A person who organizes and operates a business or businesses, taking on

greater than normal financial risks in order to do so.

Factor

An element used to characterize an attribute of a restaurant.

Growth

It refers to a positive change in size, often over a period. Growth can occur

as a stage of maturation or a process toward fullness or fulfilment. It can also

perpetuate endlessly, for example, as detailed by some theories of the fate of the

universe.

Price discount

It is “a short-term reduction of the listed price of a service when all buyers are

equally eligible for the price reductions”.

Price promotions

They are “often used in service industry as the primary sales promotion strategy”

(Nusair et al., 2010), which is a direct inducement offering extra value or incentive to

consumer in order to increase an immediate sale (Haugh, 2013).

Price
The amount of money expected, required, or given in payment for something.

Quality

The standard of something as measured against other things of a similar kind; the

degree of excellence of something.

Restaurant attributes

In the restaurant industry, the intrinsic attributes include food, service,

environment, price, and some other extrinsic attributes such as brand, popularity, word-

of-mouth, emotion, etc.

Restaurant
 A business establishment where the food is prepared and displayed. As used in

this study, restaurant includes carenderias, fast food outlets and food houses.

Value

The regard that something is held to deserve; the importance, worth, or usefulness

of something.
 Chapter 2

REVIEW OF RELATED STUDIES AND LITERATURE

This chapter presents the different literature and studies that are relevant to this

work. A survey of foreign, local and other researchers are given major consideration. It is

believed that this presentation will provide deeper appreciation and perspective on the

work being undertaken.

Literature

Price is not only considered a multi-aspect variable for monetary price, objective

price and sacrifice but also similar to valuable entity that consumers have to scarify to

obtain what they really want to possess to (Anh Phan, 2016). Pricing for a product is not

easy to conduct because price is set based on the core values of available products and

then, it is considerably crucial element for customer satisfaction since almost consumers

will estimate the product or service value as well as make decision for any of their

purchase through price, stated (Khan 2012). In term of customer's view, price is actually

used as a signal in order to evaluate their experiences with goods or services

performance. The results on price such as the only reason for consumers switching to

another brands or providers by 9% of his study respondents or being "one of two or more

reasons for switching" by 21% of other ones (Keaveney, 2009).

Price promotion is the primary sales promotion strategy and it is the most

common form of sales promotion employed in the services industry (Nusair, Yoon,

Naipaul & Parsa, 2010). Price promotions are often used in various service contexts such

as restaurants, entertainments, hair salons, laundry and cleaning services, and travel

services (Nusair et al., 2010). However, the effects of price promotions in the foodservice

industry may differ from those in other product categories because the product includes
both intangible and tangible characteristics (Huang, Chang, Yeh, & Liao, 2014). In

addition, knowledge on how consumers respond to price promotions is essential in

making critical decisions concerning price promotions for service industries (Nusair et

al., 2010).

Discovered types of restaurants in the Philippines were fast – food restaurants,

casual restaurants and fine dining restaurants (Araphil Magazines, 2018). In the latest

article of Steve Landers called “Economic Trends for Restaurants” stated that the quick

casual sector of restaurants is positioned to continue growing. These restaurants are

slotted between fast food and casual dining restaurants. Many offers high-quality food

focused in a narrow niche, and pricing that also falls between the two other types of

restaurants. With more ethnic foods becoming main stream and high-end chefs focusing

on the sector, the sector has even more upward pressure. While most restaurant

consumers are price-conscious, they are not only focused on consumer cost. Restaurants

that are perceived as providing a higher-value offering are more likely to succeed than

those that are just inexpensive. Customers have demonstrated a willingness to pay a little

bit more for a meal that is significantly higher quality or has health benefits (Steve

Landers, 2019).

In the restaurant industry, service quality has been found to be important in

influencing both customer satisfaction and return intention (Ladhari et al., 2009; Kim

etal., 2009). While Namkung& Jang (2009) found that food quality in Chinese restaurants

was the most important determinants of customer’s decision to return, followed by

cleanliness, value, price and convenience, which ranked second, third, fourth and fifth,

respectively. They have also investigated how food quality is perceived in relation to

satisfaction and behavioral intentions in mid-to upscale restaurants. Their study showed
that overall food quality significantly affected customer satisfaction and behavioral

intentions and also revealed that the relationship between food quality and customer

behavioral intentions was mediated by satisfaction. Ladhari et al. (2009) investigated

determinants of dining satisfaction and post-dining behavioral intentions, and concluded

that perceived service quality influenced customer satisfaction through both positive and

negative emotions.

A company offers more characteristics in term of quality from their core brand in

order to determine the level of customer satisfaction (Khan 2012), which defined as an

evaluative judgment of post purchase involving the making decision for purchase.

Customer satisfaction is “not an absolute concept, it is a relative one”, whenever

customers actually get the feeling of pleasure and even their expectation is fulfilled by

supports from companies, if the quality and service are provided adequately, they will be

satisfied and become loyal to that products or brand, said (Hussain, 2013). Customer

satisfaction is the key concept in order to determine the right way for retaining long-term

customers because almost unsatisfied consumers are highly emerging to switch to another

brand in same industry (Hussain, 2013; Lin & Wu, 2011)

Service quality is also a function compare between the expectation and

performance from customers' results and is one of the useful methods in order to manage

business processes and then guarantee the high satisfaction of customers that motivates

the effectiveness and competitiveness of the industry, (Rahaman 2011).

According to Obonyo (2013), on his study on strategies adopted by supermarkets

for competitive edge argues that price management rarely attracts customers and he

further argues that the image of the business is one of the main elements of customer
satisfaction and high stock turn over which translates to high profits. This image can be

created by good customer service. Service delivery cannot be separated from the service

providers and therefore provider-client relationship should be maintained (Kotler et al,

2009). Recruiting right employees and providing them with excellent training will ensure

competent, reliable, responsive and credible workforce for the organization and quality

customer service. A Company must emphasize rewarding people for accomplishing

results related to creating value for its customers and not just dutifully performing

assigned duties and tasks therefore create a work environment which is result oriented. It

is flawed management to tie incentives and rewards to satisfactory performance of duties

instead of desired business outcome and company achievements. It is important for

organizations and individuals to align motivation and reward system with strategic

priorities and be committed to executing the strategies (Cole, 2009).

According to Sulek and Hensley (2014), food quality is one of the most crucial

parts in dining experience. Food quality is a major factor that influences the purchase

intention in regard to the choice of restaurants. Food quality is considered as a crucial

estimator for fast food dining restaurants in ensuring customer loyalty. Sulek and Hensley

(2014) agreed by stating that food quality is the most significant component of purchase

intention provided that the environment components and service quality are contrasted by

other fields of the restaurant. Furthermore, the positive relation between food quality and

satisfaction would influence the purchase intention of customers.

Ryu and Jang (2009) found that restaurant environment a significant antecedent of

customers’ pleasure, arousal and behavioral intention in an upscale restaurant context. A

considerable amount of studies has demonstrated that it is necessary to make the

ambience more pleasant and innovative to ensure the success of a company. Moreover, it
was also discovered that the ambience of a fast food restaurant is regarded to be more

important than the fast food itself. Hence, the current research postulated that establishing

the ambience of fast food restaurants is the single most significant attribute because it is

always perceived to be more important than the food served. The environment of a

restaurant will establish the expectation of customers as a result of the dining experience

before the fast food is served. Food quality and services quality further strengthen the

intangible aspects of the present study, particularly in regard to the surrounding of a

restaurant.

According to Iqbal and Hassan (2018), perception of factors influencing word of

mouth (WOM) varies across employees and customers. The present study chose to

observe perceived service quality as multi-dimensional construct of perceived

performance as suggested by Martinez Garcia and Caro (2010). Furthermore, Zeithaml’s

chain of perceived service quality which was the result of the complicated nature of

service quality measurements. On another note, Iqbal et al. (2016) extended the research

work of Parasuraman et al. by investigating the role of service quality in the service

sector of Pakistan and the United Kingdom. A few empirical investigations provided

several conclusions in terms of determining a completely distinct outcome such as when

a service is evaluated to have more weight in customers’ minds as part of the core aspect.

Past research indicates customers’ desire for more personalized and closer relations with

service providers. The service quality that acts as an attitude of ‘a long run entire

assessment” has led to the relationship between the existence of the service quality and

satisfaction Kassim and Abdullah (2010) and Iqbal et al. (2016) confirmed that service

quality enhances, customer’s satisfaction and customer’s loyalty where their relationship

is moderated by gender in the service sector. Moreover, the restaurant industry positively
influences the purchase intention for service quality, particularly in terms of confirmation

of the assumption. In the present study, facilities measurement was discovered to be the

least significant aspect of purchase intention.

A considerable amount of studies investigated service quality as a complex

construct that concludes distinct measurements. Every one of those measurements could

be tested, while distinct standards of significance are able to retrieve customer

preferences. Satisfaction and loyalty sidelong countries certify the existence of

“significant distinct identified in the importance located on each measurement” through a

well-formulated conclusion. Service quality has a significant association with customers’

loyalty (Iqbal et al. 2016) despite being utilized in a diverse manner particularly in the

context of its dimensions such as tangibles, reliability, responsiveness, assurance, and

empathy (Iqbal and Hassan 2016).

Although the restaurant industry has enjoying a boom recently, some restaurants

have suffered from fierce competition and experienced a drop-in sale. The 2013

Restaurant Growth Index (RGI) demonstrated a volatile combination of increasing

numbers of restaurants and corresponding weakening of individual restaurant sales (Enz,

2009). On one hand, because the restaurant industry has lower barriers to entry and needs

a relatively small start-up investment (Enz, 2009), more restaurants opened and the

industry’s total sales grew. The number of restaurants increased by about 24,000 units

since 2011, reaching 635,494 in 2014 (Statista Company, 2014a). Total restaurant sales

have increased each year by $20 billion and were expected to reach $683 billion by 2014

(Statista Company, 2014d). Also, the restaurant industry’s share of food dollars increased

from 25% in 1955 to 47% in 2014 (Statista Company, 2014e), suggesting that people

dine out more frequently. On the other hand, competition is becoming fiercer.
 The restaurant industry is traditionally thought to “have one of the highest

business failure rates during the first five years of operation”. The survival rate of

startups in the UK restaurant industry showed that only 58% of restaurants that opened in

2008 survived up to three years, and almost half failed (Statista Company, 2014b),

whereas in the U.S. about 80% usually fail within five years. In addition, midscale

restaurants and casual dining restaurants have suffered continuously declining visits since

the end of 2012 (The NPD Group, 2013). The 2013 RGI indicated that per-unit sales

suffered a 7% drop from $719,276 to $666,116 and that restaurant sales declined $24 per

capita. Moreover, an investigation showed that 21% of the family dining restaurant

operators, 33% of the fine dining restaurant operators and 24% of the casual dining

restaurant operators considered the building and maintaining of sales volume as the

biggest industry challenge (Statista Company, 2015). Compared with

independent restaurants, fast-food chains are generally thought to hold up better,

but they also suffered from the recession in late 2009 (Spain, 2010). In summary,

because the restaurant industry grows rapidly as a whole while individual units suffer

fierce competition and rough survival rates, effective marketing skills and promotional

tactics are needed to attract customers and influence their purchasing behaviors thus

facilitating restaurant operations.

Studies

As mentioned in the study of Shah et. al (2017), Avelini-Holjevac gave an

interesting definition of service quality in hotel industry: "Quality means achievement of

estimated standards and their constant maintenance, i.e. an ongoing process. High-class

hotels render the highest standards and highest quality products and service, with the
most extensive scope of expensive hotel service. Economy class hotels offer products and

service of lower quality, with a limited scope of less expensive service" Avelini-Holjevac

(2002).

Because of change in social environment, better education, well-developed

culinary culture, healthy food awareness and cultural influences, the expectation of

dining has evolved. There will be more sophistication in dining due to customers’

willingness to enlarge dining horizons and try new things Wishna (2000).Thus it is

important to know, understand and meet customers’ expectations from the restaurants.

Mohsin et al. (2005) studied that variety and quality of food, staff related skills ,

presentation and manners of time, timely services and value for money are major

expectations of customers in New Zealand restaurants and cafes.

 Chapter 3

RESEARCH METHODOLOGY

This chapter presents and describes the method used, research environment,

research respondents, sampling procedures, research instrument, validation of the

instrument, scoring and data gathering procedure and statistical treatment in the study.

The purpose of this chapter is to discuss the research strategy and introduce the research

instruments being developed and utilized in the pursuit of the goals.

Method Used

Descriptive method of research was used by the researchers with the aid of a

standardized questionnaire as a tool in gathering the data needed for the completion of

this study. This method is the most appropriate method for this study, as it best asserts

that the descriptive research goes beyond mere interpretation and meaning of what is

being described (Burns and Grove, 2008).

Research Environment

This study was conducted in the city of Dapitan, province of Zamboanga del

Norte by considering all the establishments both private and public in the city.

Respondents of the Study

The respondents of the study were the owners/managers of restaurants in Dapitan

City. The respondents were determined through random sampling. The researchers

randomly chose the samples that were willing to answer the questions of the study. The

researchers randomly identified 15 managers/owners of restaurants in Dapitan City

Sampling Procedure

The researchers used simple random sampling in selecting the respondents of the

study. Simple random sampling is the basic sampling technique where the researchers

selected a group of subjects (a sample) for study from a larger group (a population). Each

individual was chosen entirely by chance and each member of the population had an

equal chance of being included in the sample. Every possible sample of a given size had

the same chance of selection.

Research Instrument

The researchers used validated questionnaire as their data gathering instrument.

This questionnaire was distributed to the respondents for the purpose of having the

needed data. The questionnaire has three parts. The first part deals with the profile of the

respondents such as name, length of operation and address. The second part deals with

the questions about the factors affecting restaurant sales. The third part deals with sales

among restaurants in Dapitan City.

Validation of the Questionnaire

The researchers present the questionnaire to the adviser and other experts for

revision and corrections to ensure a precise collection of data making the paper well-

proofed and relevant to the present study.

Scoring Procedure

To arrive at a qualitative description of the responses the researchers establish a

scale-formed questionnaire which will be ticked from 4-1, 4 being the highest and 1

being the lowest to answer the questions.

 In order to make a qualitative interpretation of the result the researchers used the

following scoring and descriptive equivalents:

Scoring Procedure
Scale Descriptive Rating Description

3.21-4.00 Strongly Agree→ The statement contains very acceptable argument

with regards to the factor presented.

2.41-3.20 Agree→ The statement contains an acceptable argument

with regards to the factor presented.

1.60-2.41 Disagree→ The statement contains unacceptable argument

with regards to the factor presented.

1.00-2.41 Strongly Disagree→ The statement contains highly unacceptable

argument with regards to the factor presented.

Data Gathering Procedure

The researchers sent letter of permission to conduct the study to the Dean of the

College Business and Accountancy. After the approval, letters were personally delivered

to various restaurants to seek permission for the distribution of the questionnaire of the

study. After the letters were delivered to the different restaurants, the researchers waited

for the response of the respondents. Upon its approval, the researchers personally

administered the instrument to the respondents. Upon retrieval, they reviewed the

questionnaire whether all questions were answered. The answers were then tabulated on a

tally sheet. A hired statistician assisted them in analyzing and interpreting the data

gathered using the appropriate statistical tool.

 Statistical Treatment
Data gathering through the research instrument were carefully tabulated,

classified, analyzed and interpreted using appropriate description and inferential

statistical tools.

Percentage and frequency distribution was utilized to answer question number

1, 2 and 3.

(P)% = F x 100
N
Where:
F= frequency
N= total number of the respondents
P= percentage

Weighted mean was used to answer the factors affecting restaurant sales and
sales.
Pearson Correlation was used to test the significant relationship between the
factors and the sales.
 23

Chapter 4
PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

This chapter presents the data in tables with analysis and interpretation. The

arrangement of the tables is reflected in a way that it answers the problems earlier stated

in Chapter 1.

This study aims to seek factors affecting restaurant sales particularly in the area of

Dapitan City during the years 2019-2020.

Table 1. Respondent’s Profile in Terms of No. of Years of Operation

No. of Years of No. of Respondents Percentage

Operation
Less than 1 year 6 20%
1 to 5 years 10 33.33%
6 to 10 years 8 26.67%
11 years and more 6 20%
Total 30 100%

The table shows that most of the restaurants in Dapitan City as of this date of this study is in the

range of ‘1 to 5 years’ comprising 33.33%, followed by ‘6 to 10 years’ comprising 26.67% and

the ranges ’11 years and more’ and ‘less than 1 year’ both have 20%.

Table 2 Level of Agreement that Price affects Sales

Statement Average Weighted Mean Description

Price is considered a crucial 3.6 Strongly Agree
 element in growth of sales
Price is considered a standard 3.7 Strongly Agree

measure when costumer

approach your restaurant

Sales is affected by 3.0 Agree

unpredictability of price
Low priced meals contributes a 3.4 Strongly Agree

greater proportion of the sales

Prices are displayed/announced 3.5 Strongly Agree

in advertisements (radio,

phamplets, brochures, etc.) to

attract customers
Grand Mean 3.41 Strongly Agree

The table suggest that according to respondents price greatly affects the sales of restaurants in

Dapitan City. They strongly agree on statements 1, 3, 4 and 5. They agree a little less to

statement 2. This means that price is a factor which is considered by customers as a factor in

the determination of the growth in sales. It is also considered as a standard measure among

customer choice. They agree that a low-priced meal has higher sales than high-priced meal and

that prices must be advertised to attract more customers. From these responses, the grand mean

of ‘3.41’indicates that they strongly agree that price greatly affects sales in restaurants.

Table 3 Level of Agreement that Quality affects Sales

Statement Average Weighted Mean Description

The perceived product quality is 3.5 Strongly Agree

in line with expectation of the

customer
The perceived service quality is 3.5 Strongly Agree

in line with the expectation of

the customer
 Customers return to our 3.5 Strongly Agree

establishment often because of

employees displaying pleasant

hospitality
The establishment has 3.5 Strongly Agree

innovative and pleasant

ambiance
Foods on menu are always 3.5 Strongly Agree

requested by customers
Grand Mean 3.50 Strongly Agree

The table suggests the grand mean of ‘3.50’ indicates that respondents strongly agree that

product and service quality is an important factor in the growth of sales. Customers return in

their restaurant because of their hospitable employee, innovative and pleasant ambiance and that

their food menu is always requested by their customers suggesting that their products and

services are of good if not excellent in quality.

Table 3 Level of Agreement that Value affects Sales

Statement Average Weighted Mean Description

Taste of food offered exceeds or 3.5 Strongly Agree

leveled with customer’s

expectation
Services offered exceeds or 3.5 Strongly Agree

leveled with customer’s

expectation
Service offered in our 3.6 Strongly Agree

establishment offers a unique

atmosphere associated with a

 beautiful scenery
The establishment incorporates 3.6 Strongly Agree

latest trend which contributes to

additional value of our product

and services
The value of our service is a 3.6 Strongly Agree

determinant of customer

preference
Grand Mean 3.56 Strongly Agree

The table indicates a grand mean of ‘3.56’which means that they strongly agree that their

product’s and service’s value affects customer loyalty and in turns greatly affect their sales.

Value is a strong determinant of customer preference.

Table 4 Test of Significant Difference Between Factors at 5% Significance Level

Null Hypothesis Significance Level P-value Decision

Ho1 There is no significant 0.05 0.284265 Accept Null

difference between price and Hypothesis

quality.
Ho2 There is no significant 0.05 0.017055 Reject Null

difference between quality and Hypothesis

value.
Ho3 There is no significant 0.05 0.189145 Accept Null

difference between price and Hypothesis

value.

The table suggests that a significant difference does not exist between price and quality. This

translates that the price and quality do not differ from each other as to their relevance in the

growth of restaurant sales. Similarly, price and value is also not statistically significant. They
have no significant difference as to their relevance in a restaurant sales. However, a significant

difference exist between quality and value.

 Chapter 5

SUMMARY, FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

This chapter presents the summary, findings, conclusions and recommendations

of the study “Factors Affecting Restaurants Sales”. Together with the presentation of this

major investigation, further information is presented by the researchers through

recommendations related to the result of this study.

Summary

Descriptive method of research was used by the researchers with the aid of a

validated questionnaire as a tool in gathering the data needed for the completion of this

study. The study aims to seek factors affecting restaurant sales particularly in the area of

Dapitan City during the years of 2019 – 2020. Specifically, it sought to answer the

following question.

1. What is the profile of restaurant in Dapitan City as to:

1.1 Name

1.2 Address

1.3 Number of years established

2. How do the following factors affect the sales among restaurants in Dapitan

City?

2.1 Price

2.2 Quality

2.3 Value

3. Is there a significant difference among the factors affecting restaurant sales in

Dapitan City?
Findings

1. Most of the restaurants in Dapitan City are operating from 1-5 years.

2. They strongly agree that price greatly affects restaurants’ sales.

3. They also strongly agree that ssles is affected by the restaurants’ products and services

quality.

4. Value of the products and services greatly contributes to the restaurant sales.

5. There is no significant difference between price and quality.

6. Quality and value have a statistical significant difference.

7. No significant difference exists between price and value.

Conclusion

Based on its findings, the researchers conclude that restaurant sales is dependent on the

factors affecting it. These includes price, quality and value. The researchers also note of the

strong agreement of the respondent when asked about the presented factors – price, quality and

value which affects greatly their sales performance. As pointed out by Razak et. al., (2018),

product’s high or low cost may have impact on the decision of customers in choosing a certain

restaurant. The studies of Peterson (2014), and Taylor (2017) which is adopted by the present

study states that the present generation appears to be price conscious. Razak (2016) further

argues that perceived product quality when in line with customers expectation translates to their

satisfaction. By implication, this will boost restaurant sales. Value is being used as a customer

preference in choosing restaurants.

The researchers confirmed the findings of Keaveny (2009) which states that price is

actually used as a signal in order to evaluate their experiences with goods or services

performance. They also confirmed that service quality is found to be an important factor in both
customer satisfaction and retention as suggested in the strudies of Ladhain et. al. (2009) and Kin

et. al. (2009).

Interpretation of the findings must be qualified by a number of points as there are

significant limitations to this study besides the inability to make statistical inferences. Firstly,

respondents included in the survey were randomly selected. The study might have inherent

sample biases as the respondents were chosen entirely by chance. In addition, results could be

biased as the analysis is based on the responses received. Secondly, the factors presented are

limited to price, quality and value, there might be some other important factors not mentioned in

the present study. Finally, there has, moreover, been no practical safeguard to protect against

intentional or unintentional bragging by respondents or against reporting intentions as

accomplishments. This could also have impaired the reliability of the results. The researchers

unfortunately, conclude emphatically as one of the most obvious limitations of simple random

sampling method is its need of a complete list of all the members of the population. The

researchers failed to exact to number of the entire population.

Recommendations

Based on the findings and conclusions the researchers posits the following
recommendations:

1. Restaurants should offer low-priced meal not undermining its quality and value.

2. Prices should be visible in the front display and should be advertised.

3. The establishment should improve the quality of itd services by improving its

ambiance.

4. Restaurants should value innovation.

5. Services and products offered should offer a unique atmosphere associated with

beautiful scenery.
6.The establishment should incorporate latest trend which contributes to additional value

of their products and services.

7. Establishments should improve price strategy to obtain higher sales.

8. They should also improve there quality and value to their products and services.
 REFERENCES

Books & Journals

Anh Phan, (2016), International Journal of Business and Management Review. Vol. 4,

No. 6, pp 1-17, August 2016

Annie Gay Barlan-Espino, Asia Pacific Journal of Multidisciplinary Research Vol.

No. 1, 122-132, February 2017 P-ISSN 2350-7756 E-ISSN 2350-8442

Cole, G. A (2009) Personnel and Human Resource management, (5th ed.) Book Power

London

Hwang J. & Zhao J. (201), Factors Influencing customer satisfaction and dissatisfaction

in the Restaurant business using answer tree methodology Published in: Journal of

Quality Assurance in Hospitality & Tourism, Volume 11, Issue 2 April 2010,

pages 93 – 110.

Iqbal, Qaisar, and Hassan (2016), Service quality about health sector of UK and Pakistan:

A Comparative Study, International Academic Journal of Business Management,

Accounting and Economics 3: 822-36

Iqbal, Qaisar, and Siti Hasnah Hassan, (2018), A Dyadic Analysis of Salespersons and

Customers in Banking Sector: Humor Usage, Word of Mouth and Expectation

of Continuity. International Academic Journal of Business Management

5: 109-120.

Kaasim, Norizan, and Nor Asiah Abdullah (2010), The Effect of Perceived Service

Quality and Customer’s Loyalty, International Journal of Management,

Accounting and Economics 3:822-36

Khan S., Afshen S. (2012), Determination of customer satisfaction in Telecom Industry

A Study of Telecom Industry Peshawar KPK Pakistan, ISSN 2090-4304

Razak I. et. al., (2016), The Impact of Product Quality and Price on Customer

Satisfaction with the Mediator of Customer Value ISSN 2422-8451

Ryu, K. & Jang S.S. (2009), The effect of environmental perceptions on behavioral

Intentions through emotions: The case of upscale restaurants. Journal of

Hospitality & Tourism Research, 2007. 31 (1): P. 56-72.

Varki, S. & Colgate M. (2011). The role of price perceptions in an integrated model

Of behavioral intentions, Journal of Service Research, (3), 232-240

Internet Websites:

Araphil Magazine (2018), retrieved from

https://araphily.com/index.php/2018/05/16/types-of-restaurants-in –the-philippines/

Bureau, I. M. (2012), Foodservice Profile the Philippines. Retreived from

http://publications.gc.ca/collections/collection_2012/agr/A74-1-83-2012-eng.pdf
 Approval Letter

Republic of the Philippines

JOSE RIZAL MEMORIAL STATE UNIVERSITY
The Premier University in Zamboanga Del Norte
Main Campus, Dapitan City

April 19, 2018

PANEL MEMBERS
College of Business and Accountancy
JRMSU, Main Campus
Dapitan City

Sir/Madam:

The undersigned are currently conducting a study on "FACTORS AFFECTING RESTAURANT SALES” in partial
fulfilment of the requirements for the degree of Bachelor of Science in Hotel and Restaurant Management.

With this, we would like to submit to you the research questionnaire of this study: validated questionnaire for your
approval. This questionnaire will be conducted to the different restaurants of Dapitan City chosen at random among
various managers and owners.

Your positive response anent this request is highly appreciated.

Thank you very much.

Respectfully yours,

(SGD)
MARIA APRIL L. ELOPRE

MARY ANN B. PIALAGO

ARCHEL B. EHAN

Researchers

Noted:
(SGD)

Adviser

Approved/Disapproved:
(SGD)
Panel Member
(SGD)

Panel Member
(SGD)

Chairperson
 Republic of the Philippines
JOSE RIZAL MEMORIAL STATE UNIVERSITY
The Premier University in Zamboanga Del Norte
Main Campus, Dapitan City

April 19, 2018

DR. WILFREDO D. CARREON, JR.

Dean, College of Business and Accountancy
JRMSU, Main Campus
Dapitan City

Sir:

Greetings of peace!

The undersigned are presently conducting a study entitled “FACTORS AFFECTING RESTAURANT”
in partial fulfillment of the degree Bachelor of Science in Hotel and Restaurant Management.

In this regard, may we request your good office to allow us to distribute copies of our questionnaires to our
respondents in order to gather data for our study.

Your approval of this request is highly appreciated.

Thank you and God bless.

Respectfully yours,

(SGD)
MARIA APRIL L. ELOPRE

MARY ANN B. PIALAGO

ARCHEL B. EHAN
Researchers

Noted:

(SGD)

Adviser

(SGD)
WILFREDO D. CARREON, JR., D.M.,SFRIM,FBE
Dean, College of Business and Accountancy
 Republic of the Philippines
JOSE RIZAL MEMORIAL STATE UNIVERSITY
The Premier University in Zamboanga Del Norte
Main Campus, Dapitan City

QUESTIONNAIRE

“Factor’s Affecting Restaurant Sales”

We are grateful for your participation and assistance in answering this

questionnaire. We would like to know something about your restaurant operations. Your
responses will be treated in strict confidence and sensitive data collected will not be
identified in any report or publication. Please respond to the statements as accurately
and honestly as possible.

PART I: PROFILE

Name(optional):

Position/Designation: ____________________________

Name of Restaurant: ____________________________

Address: ______________________________________

Number of Years Operating:

PART II: [OWNERS/MANAGERS]

Rate yourself on the following factors listed in the table below by putting a tick (√) on
the boxes that corresponds to the appropriate spot.

4 – Strongly Agree
3 – Agree
2 – Disagree
1 – Strongly Disagree
 Price
1 2 3 4
Price is considered a crucial element in growth of sales
Price is considered a standard measure when costumer
approach your restaurant
Sales is affected by unpredictability of price

Low priced meals contributes a greater proportion of the

sales
Prices are displayed/announced in advertisements (radio,
phamplets, brochures, etc.)
Quality

The perceived product quality is in line with expectation of

the customer
The perceived service quality is in line with the
expectation of the customer
Customers return to our establishment often because of
employees displaying pleasant hospitality
The establishment has innovative and pleasant ambiance
Foods on menu are always requested by customers
Value
Taste of food offered exceeds or leveled with customer’s
expectation
Services offered exceeds or leveled with customer’s
expectation
Service offered in our establishment offers a unique
atmosphere associated with a beautiful scenery
The establishment incorporates latest trend which
contributes to additional value of our product and services
The value of our service is a determinant of customer
preference
 CURRICULUM VITAE

MARY APRIL L. ELOPRE

Bachelor of Science in Hotel and Restaurant Management
Contact Number:
Email Address:

PERSONAL DATA
Age :
Sex : Female
Date of birth :
Place of Birth : Dapitan City
Civil Status : Single
Address :

FAMILY BACKGROUND
NAME OF THE PARENTS ADDRESS OCCUPATION

EDUCATIONAL ATTAINMENT:
LEVEL SCHOOL YEAR
Elementary: Elementary School 1998-2004
Secondary: High School 2004-2008
Tertiary: Jose Rizal Memorial State University 2010-present
 CURRICULUM VITAE
MARY ANN B. PIALOGO
Bachelor of Science in Hotel and Restaurant Management
Contact Number:
Email Address:

PERSONAL DATA
Age : 20
Sex : Female
Date of birth :
Place of Birth :
Civil Status : Single
Address :

FAMILY BACKGROUND
NAME OF THE PARENTS ADDRESS OCCUPATION

EDUCATIONAL ATTAINMENT:
LEVEL SCHOOL YEAR
Elementary: Elementary School
Secondary: High School
Tertiary: Jose Rizal Memorial State University
 31

CURRICULUM VITAE
ARCHEL B. EHAN
Bachelor of Science in Hotel and Restaurant Management
Contact Number:
Email Address:

PERSONAL DATA
Age :
Sex : Female
Date of birth :
Place of Birth :
Civil Status : Single
Address : Bagting, Dapitan City

FAMILY BACKGROUND
NAME OF THE PARENTS ADDRESS OCCUPATION

EDUCATIONAL ATTAINMENT:
LEVEL SCHOOL YEAR
Elementary: Elementary School
Secondary: High School
Tertiary: Jose Rizal Memorial State University
32