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Chapter I

INTRODUCTION

Background of the study

Customer satisfaction plays a pivotal role in success of every business

organization whether it is meant for a product or a service. Customers should be managed

as assets, and that customers vary in their needs, preferences, and buying behavior. Iloilo

city is located in the southern part of the Visayas. It is a fact that the city is improving and

is considered one of the most developed cities in the Philippines. Aside from increased

number of prominent families residing in the city, there is a rise in big schools and

universities, department stores, malls, prestigious banks and other financial institutions

and recreational places. The city has also an increase number of restaurants and fast-food

centers. The restaurant industry has become one of the most profitable industries in the

world. International and local restaurant chains are satisfying the demand of customers in

variety of range of products and services. The restaurant business is an indispensable part

of our society. Restaurants are used for business meetings, celebrations, entertainments

and as places in which to relax.

Competition then is a big problem in an entrepreneur. How could one outsell the

others? Every restaurant owner’s concern is how to handle competition and merge as the

number one in the industry. A challenge job because each one of them must think of

something that could beat their competitors. And knowing the level of customer’s

satisfaction in terms of their product, service, place and price is a clever way to know the

preference and opinions of the customers. That is why this study aims to know the
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Customer Satisfaction of Samurai Talabahan in Brgy. San Rafael Diversion Road, Iloilo

City.

Samurai Talabahan,is a seafood restaurant that serves tasty and affordable

dishes.Most Iloilo City tourists would tell you that to satisfy your seafood cravings at

popular seafood restaurants such as Breakthrough and Tatoy'sManokan. Unknown to

most tourists is Samurai Talabahan. In this study the researchers will determine the

profile of respondents, the level of customer’s satisfaction in terms of product, service,

place, and price when they are taken as a whole and when grouped in age, monthly

family income, sex, educational attainment and place of residence.

Statement of the problem

This study aimed to determine the level of customer satisfaction of Samurai

Talabahan for the year 2017.

Specifically, the study sought to answer the following questions:

1. What is the profile of the respondents?

2. What is the level of customer satisfaction towards Samurai Talabahan in terms of

product, service, price and place when respondents are taken as a whole and when

classified according to age, sex, place of residence, educational attainment and

monthly income?

3. Are there any significant differences in the Level of Customer Satisfaction of

Samurai Talabahan in Brgy. San Rafael Diversion Road Iloilo City in terms of

product, service, price and place when respondents are classified according to

their age, sex, place of residence, educational attainment and monthly income?
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Theoretical Framework

Confirmation and Disconfirmation theory of customer satisfaction According to

confirmation and disconfirmation theory customers’ expectations about services and

service perception experience has playing vital role in customer satisfaction. Early

satisfaction research defined satisfaction as a post-choice evaluative judgment concerning

a specific purchase decision and satisfaction as an outcome of disconfirmation

(Parasuraman et al, 1985; 1988).

The expectation disconfirmation theory suggested that satisfaction is determined

by the intensity and positive or negative direction of the gap between expectations and

perceived performance. Customers‟ expectations are beliefs about service delivery that

function as standard or reference point against which performance is judged. Customers

compare their perceptions of performance with their expectations and reference point

when evaluating service quality (Zeithaml and Bitner 2003). Parasuraman et al. (1988)

defined expectation as „desires of wants of customer’s ‟ the expectations component was

designed to measure customers normative expectations and it is similar to the ideal

slandered in customer satisfaction and dissatisfaction. Expectations serve as standards

with which subsequent experiences are compared; it is result of previous experience

about service also.

Customers perception is one another element which applying significant role in

the determination of customers satisfaction. Satisfaction will influence by perception of

service quality, price, and other personal expectations regards to service. It is a judgment
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that, a product or service feature, or the product or service itself, provides a pleasurable

level of consumption related fulfillment (Oliver, 1994).

Moreover, disconfirmation of expectations may have an asymmetrical effect, such

that negative disconfirmation is more impactful than positive disconfirmation.

Satisfaction is based not only on the judgment of customers towards the reliability

of the delivered service, but also on customers‟ experiences with the service delivery

process. A customer satisfaction is strongly linked to impressions of performance,

satisfaction and switching barriers are assumed to be the most important antecedents of

repurchase behavior, or the intension to repurchase a good or service (Sharma, 2008).

Smith and Houston (1982) mentioned that satisfaction with services is related to

confirmation or disconfirmation of expectations and satisfaction is related to the size and

direction of the disconfirmation experience where disconfirmation is related to the

person's initial expectation. However, the satisfaction of consumers depends not only on

how the service provider performs, but also on how the consumer performs. By

contributing information and physical and mental effort, consumers contribute directly to

their own satisfaction (Bateson, 2002).

Conceptual Framework

Customer satisfaction is a buzzword today, once here everyone using this

customer’s satisfaction is affected by the importance placed by the customers on each of

the attitudes of the product or service. Customer satisfaction measurement allows an

organization to understand the key drivers that create satisfaction or dissatisfaction; and

what is really driving their satisfaction during a service experience. Customer satisfaction
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is the state of mind that customers have about a company when their expectations have

been met or exceeded over the lifetime of the product or service (Kevin Cacioppo, 1995).

It is also a feeling or attitude of a customer towards a product or service after it

has been used. According to Oliver (1980) satisfaction appears to mediate changes

between pre-exposure and post-exposure attitudinal components. It is a major outcome of

marketing activity whereby it serves as a link between the various stages of consumer

buying behavior (Jamal & Nasser, 2002). When customers pay money to buy a service he

has some minimum expectations from the transaction. These expectations from the

purchase have to be met substantially, if not entirely for the customer to become a loyal

customer of the service (Aneja 1993). These expectations are fulfilled of a promises-

quality, fair price, availability, after sale services, complaints handling process,

information, and variety etc. Better quality for the same cost is the motto of the

customers. Sometimes they are prepared to overlook inconveniences also to avail better

services at a low cost.

Various empirical researches show that there is significant and positive

relationship in service quality and customer satisfaction. Berry (1990) mentioned that

there are ten 'Quality Values' which influence satisfaction behavior i.e. Quality, Value,

Timeliness, Efficiency, Ease of Access, Environment, Inter-departmental Teamwork,

Front line Service Behaviour, Commitment to the Customer and Innovation.

RueangthanakietPairot, (2008) defined Customers satisfaction as the company's ability to

fulfill the business, emotional, and psychological needs of its customers. However,

customers have different levels of satisfaction as they have different attitudes and

experiences as perceived from the company. In providing service to consumers, there are
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those who will be satisfied while others are not. Thus, the service delivered is measured

in terms of customer’s satisfaction. To help visualize the theoretical framework adopted

in this study, the schematic diagram is provided below.

Figure 1

Paradigm of the Study

Independent Variable Dependent Variable

Customer of Samurai Level of Customer

Age Product

Sex Service

Monthly Family Income Place

Place of residence Price

Educational attainment

Hypothesis

In this study the following hypothesis is formulated:

There is a significant difference in the customer satisfaction of Samurai

Talabahan in terms of Service when respondents are grouped as to Income. There is a

significant difference in the customer satisfaction of Samurai Talabahan in terms of Place

when respondents are grouped as to Age. There is a significant difference in the customer

satisfaction of Samurai Talabahan in terms of Place when respondents are grouped as to

Educational attainment. There is a significant difference in the customer satisfaction of

Samurai Talabahan in terms of Product when respondents are grouped as to educational

attainment.

Significance of the study

This study is conducted to provide information regarding the Customer

Satisfaction of Samurai Talabahan in Brgy. San Rafael Diversion Road, Iloilo City. This

research would be beneficial to the persons which were involved in this study. They were

the following:

The Management. This study will provide reliable and useful information to the

Management who played a vital role in ensuring that the customer’s needs and wants will

be addressed properly. This would help them formulate new ideas that could serve as

basis in developing their marketing strategies to attract more customers.

The Customers. Being the respondents of this study, the exercise of responding

to the questionnaire will help the Samurai Talabahan provide a quality service, product,

place and price by getting feedbacks or their opinions about what they expect to receive

or experience from the restaurant.

The Researchers.Findings of this study will help the researchers evaluate the

operations and business environment as to what aspects that the management will take

corrective action.

The Future Researchers.The findings of this study would provide relevant

information of any food and services oriented business and other researchers on matters
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relevant to customer satisfaction. This study will encourage other researchers to conduct

similar studies on a wider scope and include variables not covered in this research

Scope and limitation of the study

This study deals with the consumer satisfaction of Samurai Talabahan in Brgy.

San Rafael Diversion Road, Iloilo City. The descriptive method of research will be used

in the study. The researchers will gather the data through questionnaire and supplement

with an interview. Consumer Satisfaction will be measured as (1) Not satisfied, (2) Less

satisfied, (3) Moderately satisfied, (4) Satisfied and (5) Very Satisfied. The respondents

in the study were limit to 200 customers of Samurai Talabahan only.

Definition of Terms

The following terms are defined conceptually and operationally to make these

concepts easily understood:

Age.This referred to the period of human life, measured by years from birth,

usually marked by a certain stage or degree of mental or physical development and

involving legal responsibility and capacity. (www.dictionary.reference.com)

In this study, it is defined as the life span of the customers of Samurai Talabahan

categorized as 20 years old and below, 21 years old to 35 years old, 36 years old to 50

years old and 51 years old and above.

Customers.This may refer to the purchaser of goods or services in retail. This

also refers to an end user, and not necessarily a purchaser, in the distribution chain of a

good or services. (Helsdingen, et.al, 2006)

In this study, this referred to the 200 respondents/customers of Samurai

Talabahan.

Educational Attainment. The term is conceptually defined as the highest grade

completed within the most advanced level attended in the educational system of the

country where the education was received. (www.stats.oecd.org)

In this study, this referred to the highest level of education completed such as

High School, Vocational, College and Post Graduate.

Gender.This refers to the culturally constructed forms of behavior that roughly

correlates with sexual differences. Traditionally, differences in behavior and roles have

been assumed to “naturally” reflect sexual differences. Modern social sciences, however,

has become careful to distinguish between gender and sex; it has generally laid burden of

explaining behavior, practices, roles and social organization on the former.

(www.highbeam.com)

In this study, the term is use to identify the customers of Samurai Talabahan

whether they are a Male or a Female.

Monthly Income. Refers to income earned from employment. For employees, it

refers to the gross monthly wages or salaries before deduction of employee CPF

contributions and personal income tax. It comprises basic wages, overtime pay,

commissions, tips, other allowances and one-twelfth of annual bonuses. For self-

employed persons, gross monthly income refers to the average monthly profits from their

business, trade or profession (i.e. total receipts less business expenses incurred) before
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deduction of income tax. (http://stats.mom.gov.sg/SL/Pages/Gross-Monthly-Income-

from-Work-Concepts-and-Definitions.aspx)

In this study, it refers to the customers of Samurai Talabahan monthly salary

income categorized as 20,000 and below, 20,001 to 40,000, 40,001 to 50,000 and

50,001 and above.

Place of Residence. Refers to the civil subdivision of a country (district, county,

municipality, province, department, and state) in which the individual resides.

(https://stats.oecd.org/glossary/detail.asp?ID=2067)

In this study, it is used to identify whether the customers of Samurai Talabahan resides

in a Rural or Urban area.

Service.This refers to a valuable action, deed, or effort performed to satisfy need

or to fulfill a demand. (Futrell, 2004)

In this study, this refers to services that Samurai Talabahan offers.

Price.A value that will purchase a finite quantity, weight, or other measure of a

good or service.

(http://www.businessdictionary.com/definition/price.html)

In this study, it refers to the pricing of the products of Samurai Talabahan.

Product.A product is the item offered for sale. A product can be a service or an

item. It can be physical or in virtual or cyber form.

In this study, it refers to the foods that Samurai Talabahan offers.

Satisfaction.The act of satisfying, or the state of being satisfied; gratification of

desire, contentment in possession and enjoyment; repose mind resulting from compliance

with its desires or demands. (Lovelock, 2001)

In this study, it is defined as the customers overall feeling of contentment or

disappointment with regards to the service, product, price and place rendered.