Asia Pacific Journal of Marketing and Logistics

The effect of service interaction orientation on customer satisfaction and behavioral

intention: The moderating effect of dining frequency
Rong-Da Liang Jun-Shu Zhang
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Rong-Da Liang Jun-Shu Zhang, (2012),"The effect of service interaction orientation on customer
satisfaction and behavioral intention", Asia Pacific Journal of Marketing and Logistics, Vol. 24 Iss 1 pp. 153
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Service
The effect of service interaction interaction
orientation on customer orientation
satisfaction and behavioral
153
intention
Received 5 May 2011
The moderating effect of dining frequency Revised 8 August 2011
Accepted 9 September 2011
Rong-Da Liang
Department of Marketing and Logistics Management,
National Penghu University of Science and Technology,
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Magong City, Taiwan, and

Jun-Shu Zhang
Department of Industrial Economy, Shanghai Normal University,
Shanghai, China

Abstract
Purpose – The purpose of this paper is to investigate the relationships among interaction
orientation, customer satisfaction and behavioral intentions across firms in the hospitality industry.
Design/methodology/approach – A self-administered survey was conducted with a convenience
sample of 628 full-service seafood restaurants.
Findings – The empirical results indicate that interaction orientation has positive influences on
customer satisfaction in first-time and frequent diners; interaction orientation positively affects
behavioral intentions in frequent diners; and customer satisfaction positively affects behavioral
intentions in first-time and frequent diners. In addition, customer satisfaction is a mediator between
interaction orientation and behavioral intentions.
Research limitations/implications – The research target of full-service seafood restaurants limits
the generalizability of the findings to a wider population.
Originality/value – In addition to insights on how restaurant promotion strategies should fit the
needs of individuals with different dining frequencies, the paper offers other ideas to enhance the
dining experience.
Keywords Taiwan, Consumer behaviour, Customer satisfaction, Restaurants, Interaction orientation,
Behavioral intentions, Dining frequency
Paper type Research paper

Introduction
Developing high-quality lodging and dining experiences is the main aim of
hotel/restaurant managers with regard to attracting customers (Hoare and Butcher,
2007; Jensen and Hansen, 2007). If customers are satisfied with the food or service in a
restaurant then they are more likely to re-visit it and thus increase its profits (Gupta et al., Asia Pacific Journal of Marketing and
2007), and the importance of customer satisfaction and re-purchase behavior (i.e. customer Logistics
Vol. 24 No. 1, 2012
loyalty) is widely recognized in the hospitality/food field. For instance, Wu and Liang pp. 153-170
(2009), in a survey of 392 customers in luxury-hotel restaurants, found that pleasurable q Emerald Group Publishing Limited
1355-5855
interactions with service employees positively influence customer satisfaction. DOI 10.1108/13555851211192740
 APJML In addition, service quality, food price and convenience directly influence customer
24,1 satisfaction (Dubê et al., 1994; Sulek and Hensley, 2004), and satisfied customers then
express increased loyalty (Ha and Jang, 2010). Customer satisfaction may thus play
a mediating role between customer loyalty and its antecedents (e.g. service quality)
(Ryan et al., 2010).
Moreover, due to technological advances and increased interactivity between firms
154 and customers (Yadav and Varadarajan, 2005), individual customers expect companies
to increasingly customize products and services to meet their specific demands.
Scholars thus argue that an interaction orientation can enable businesses to refine their
knowledge about customer tastes and preferences (Srinivasan et al., 2002). In addition,
Urban (2004) proposed that an interaction orientation can improve customer
satisfaction, strengthening repurchase behavior and leading customers to become a
firm’s trusted advocates. Consequently, the effective and efficient management of such
interactions and the interfaces at which these occur are increasingly being recognized
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as sources of lasting competitive advantage (Rayport and Jaworski, 2005).

However, few empirical studies examine how interaction orientation may influence
both customer satisfaction and loyalty. Ramani and Kumar (2008) indicated that future
studies should empirically survey the relationships among the above-mentioned
variables across many firms within an industry. Therefore, this empirical research
investigates the relationships among interaction orientation, customer satisfaction and
behavioral intentions across firms in the hospitality industry.
Existing studies consider the roles of age, gender, loyalty and dining frequency, and
thus it is important to acknowledge these personal and situational characteristics in a
work of this nature (Oyewole, 2007). Namkung and Jang (2009) indicated that the level of
frequency should play a moderating role among service stimuli (e.g. value), customer
affect (e.g. customer satisfaction) and response (such as customer loyalty), and thus
suggested that an in-depth examination of the moderating role of re-purchase frequency
is needed. However, little research has yet been conducted into how frequent diners
perceive their restaurant experience in terms of customer-provider interactions, and how
their perceptions differ from those of first-time (FT) diners. This study thus investigates
how the level of dining frequency (FT vs frequently diners) moderates the relationships
between interaction orientation and customer satisfaction/behavioral intentions.
This study believes that the development of technology facilitates the interaction
between customers and the restaurant industry. Meanwhile, customers could develop
greater satisfaction and loyalty intention when they feel a positive interaction. Once
customers dine frequently in a restaurant, they will form greater satisfaction and loyalty
than FT diners because of their favorable service interaction orientation. Dining
frequency is thus the moderator between restaurant interaction orientation and
customer response. This study discusses the relationships among these variables based
on the results of the previous research.

Literature review
The relationship between interaction orientation and customer satisfaction
The idea of interaction orientation was first developed by Ramani and Kumar (2006),
who stated that it reflects a firm’s ability to interact with its individual customers and to
take advantage of the information obtained from them through successive interactions
in order to achieve profitable customer relationships. Interaction orientation in this
 study represents restaurants’ ability to interact with individual diners and obtain Service
information from them to maintain profitable and long-term relationships. It is interaction
composed of four main elements, as follows:
(1) the concept of the customer, with the individual customer as the unit of analysis
orientation
with regard to every marketing decision (Hoekstra et al., 1999);
(2) interaction response capacity, which represents the degree to which the
business offers successful products/services, and is able to build relationships 155
with individual customers by dynamically incorporating feedback from
previous behavioral responses of both the same specific customer and those of
other customers collectively;
(3) customer empowerment, which reflects the extent to which a firm provides its
customers with avenues to connect with it and to actively shape the nature of
transactions, as well as to effectively collaborate by sharing information, praise,
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criticism, suggestions, and ideas about its products and services (Prahalad and
Ramaswamy, 2004); and
(4) customer value management, which represents the extent to which a firm can
define and dynamically measure individual customer value, and then use it to
guide marketing decisions (Thomas et al., 2004).

Customer satisfaction is the customer’s fulfillment response, and it is a judgment that a

product or service feature, or the product of service itself, provided (or is providing) a
pleasurable level of consumption-related fulfillment, including levels of under- or
over-fulfillment (Oliver, 1997). Torres and Kline (2006) defined customer satisfaction as
“the individual’s perception of the performance of the product or service in relation to
his/her expectations”. Moreover, customer satisfaction is an attitude change resulting
from the consumption experience (McCollough et al., 2000; Oliver, 1981). Satisfaction in
this study is thus conceived as a fulfillment response employed to understand and
evaluate the customer dining experience.
Kumar and Ramani (2006) indicated that a superior interaction response capacity and
consistent customer empowerment practices are likely to result in greater customer
satisfaction. For instance, studies have shown that empowering individual customers to
develop their own unique experiences enhances their satisfaction (Prahalad and
Ramaswamy, 2004; Urban, 2004). Zablah et al. (2004) pointed out that interaction
management is very significant, in that the concept of consumer relationship stresses
value exchange on both sides. Therefore, identifying the values of consumers and the
organization, and the acquirement, analysis and diffusion of consumer information, are
important factors to maintain or improve relationships with consumers. In other words,
conscious efforts by a restaurant to develop and enhance an interaction orientation will
result in greater customer satisfaction, and thus we propose out first hypothesis:
H1. Interaction orientation positively influences customer satisfaction.

The relationship between interaction orientation and behavioral intentions

Behavioral intentions involve recommending the company to others, providing positive
word of mouth (WOM), a willingness to behave as a partner with the organization, and
remaining loyal to the company (Brown et al., 2005; Bowen and Shoemarker, 1998;
Reichheld and Sasser, 1990). Customers who make a personal referral must not only
 APJML believe that a company offers superior value, but also feel good about their relationship
24,1 with it (Reichheld, 2006). Kumar and Ramani (2006) indicated that firms develop an
interaction orientation (such as interaction response ability) in order to better plan
marketing activities and maintain long-term customer relationships (i.e. increased
loyalty). Nazdrol et al. (2011) came up with a related conceptual framework and stated that
interaction orientation could improve the performance of manufactures with regard to
156 factors such as customer attitude and loyalty, as well as promote internal innovation at
firms. Zablah et al. (2004) also indicated that if companies could obtain valid consumer
information and analyze it to identify the values of both organizations and customers,
they could maintain consumer loyalty. Ramani and Kumar (2008) proposed that an
interaction orientation increases positive WOM by encouraging and enabling customers
to refer the firm to new customers and new customers to the firm. Therefore, an interaction
orientation is both specific and actionable, and can be adopted by firms to achieve
superior performance with regard to factors such as loyalty. Consequently, we present
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our second hypothesis:

H2. Interaction orientation positively influences behavioral intentions.

The relationship between customer satisfaction and behavioral intentions

Customer satisfaction is also an important antecedent of behavioral intentions and actual
behavior (Oliver, 1999). It is generally believed that satisfaction leads to repeat purchases
and positive WOM recommendations, which are the main indicators of loyalty. The
marketing and hospitality management literature has paid much attention to the
relationship between customer satisfaction and loyalty, and a number of studies have
confirmed a significant positive relationship between them (Anderson and Sullivan, 1993;
Cronin et al., 2000; Taylor and Baker, 1994). Therefore, we assume that if customers are
satisfied with a product/service, they are more likely to continue to purchase it, and are
more willing to spread positive WOM, and thus we propose our third hypothesis:
H3. Customer satisfaction positively influences behavioral intentions.

The moderating effects: FT customers vs frequent customers

In this study dining frequency is defined as how often a customer eats in a specific
restaurant. Namkung and Jang (2009) indicated that the responses and perceptions of FT
customers should differ from those of frequent customers (FC) when dining at a
restaurant, such as when faced with unfair service or another unsatisfactory situation.
For instance, FC are more antagonistic with regard to unfair service and more likely to
express an opinion. Lei and Mac (2005) surveyed 380 people and demonstrated that the
frequency of using a bus service positively moderated the relationship between
perceptions of the service (with regard to factors such as quality) and customer
responses (such as loyalty). Ha and Jang (2010) examined 607 respondents and indicated
that the level of familiarity was a moderator among customer value, satisfaction and
behavioral intentions. Following the argument of Alba and Hutchinson (1987),
familiarity usually depends on “the number of experiences related to a product that have
been accumulated by the consumer”. When consumers use a product more frequently,
they are more familiar with it, which reduces uncertainty in future purchase situations
(Flavián et al., 2005). Familiarity thus implies high dining frequency, as if consumers eat
at a restaurant more often, they are more familiar with it, and this provides them with
 a different frame of reference for evaluations in consumption decision-making Service
situations. In other words, the higher the frequency of usage, the stronger the effect of interaction
service evaluation on dining experience, and we thus propose the following hypothesis:
orientation
H4. The relationships among interaction orientation, customer satisfaction, and
behavioral intentions in FT and FC groups are different.
Figure 1 shows the conceptual model of this investigation. It shows how customer 157
evaluations of interaction orientation affect customer satisfaction and behavioral
intentions.

Methodology
Sample and data collection
This study examines the relationships among interaction orientation, customer
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satisfaction, and behavioral intentions based on full-service seafood restaurants in

Penghu County (Taiwan). The research assistant put the numbers (A1-A26) of
26 restaurants in a black box, and then selected the sample restaurants randomly. This
method fully meets the requirements of random sampling, as the probability of choosing
any particular restaurant was equal[1].
After having obtained permission from each restaurant, a self-administered
questionnaire was distributed based on convenience sampling by two research
assistants to selected customers who were waiting for their checks after they had
finished their meals. Each assistant distributed ten questionnaires a day in one different
restaurant for seven days, for a total of 70 questionnaires per restaurant, and each
assistant visited five restaurants. A total of 700 questionnaires were thus obtained over a
one-month period (1 July 2009-31 July 2009). After eliminating incomplete and non-valid
responses, a total of 628 questionnaires remained for use in this study, giving an
acceptable response rate of about 89.71 percent. Subsequently, the sample was divided
into two groups. One group was composed of respondents who were FT diners
(FT group, n ¼ 151), while the other group consisted of respondents who were FC
(FC group, n ¼ 477)[2].

Customer
Satisfaction

γ11 β21

Interaction Behavioral
orientation γ21 intention

Figure 1.
Research conceptual
Moderator: Firs-time vs. frequent customers framework
 APJML Instrument development
24,1 The survey questionnaire for this study was composed of four parts. The first
three parts contained three constructs related to customer restaurant experience:
interaction orientation, customer satisfaction and behavioral intentions. To measure
the interaction orientation, this work adapted Ramani and Kumar’s (2008) multi-item
scales. In addition, when we asked customers to answer the questionnaire, certain
158 interaction orientation items needed to be modified to fit the specific setting and customer
perceptions. Interaction orientation was measured with four dimensions (the customer
concept, interaction response capacity, customer empowerment, and customer value
management) using a five-point scale (from 1 – strongly disagree to 5 – strongly agree)
and based on the question “how much do you agree or disagree with the following
statements?” Overall, customer satisfaction with the restaurant experience was
measured by three items based on Oliver (1997) and Namkung and Jang (2009).
Respondent behavioral intentions, such as willingness to return, intention to recommend,
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and intention to say positive things, were also measured on the same five-point scale
based on Zeithaml et al. (1996) and Namkung and Jang (2009). The measurement items
used for this study are presented in the Appendix. Part four of the questionnaire gathered
demographic data about the respondents (e.g. age, gender, education, marital status,
employment, and monthly income) and dining-out related behaviors (e.g. the main reason
for dining-out and dining companion(s)).

Analysis method
This study applied descriptive statistics to analyze the samples’ characteristics. At the
same time, based on the two-step statistical method of Anderson and Gerbing (1988),
this study also used SEM to analyze the measurement and structural models to test the
hypotheses. In addition, the study adopted x 2 differences to compare the FT and FC
models to test the moderating effect of dining frequency. Finally, based on the
suggestion of Baron and Kenny (1986), this research investigated the mediating effect
of satisfaction between interaction orientation and favorable behavioral intention in
four different conditions.

Results
Descriptive statistics of the sample
Table I gives the demographic details of the respondents based on two
different groups, FT and FC. The proportion of male and female customers was
split roughly evenly into both groups. The largest group of respondents were single
(61 percent) and aged between 21 and 30 years old (30.8 percent) in the FC group, and
were married (55.7 percent) and aged between 31 and 40 years old (31.8 percent) in the
FT group. In addition, most respondents had a university education or above in both
groups, and about one-half of the participants had a monthly income of less than NT
$30,000 (FT customers group ¼ 53.6 percent; FC group ¼ 57.4 percent).
As shown on Table II, respondents in both groups indicated that the main reason for
dining-out was as a social activity (FT group ¼ 48 percent; FC group ¼ 53 percent),
and then for reasons of convenience (FT group ¼ 29.8 percent; FC
group ¼ 38.6 percent). However, the third main reason for dining-out for the FT
group was as a celebration (12.6 percent), while for FC it was for business purposes
(5 percent). In addition, almost half the respondents in both groups said that they
 Service
FT customers group FC group
Characteristics Number % Number % interaction
Gender
orientation
Male 72 47.7 253 53.0
Female 79 52.3 224 47.0
Age 159
,20 19 12.6 94 19.7
21-30 38 25.2 147 30.8
31-40 48 31.8 111 23.3
41-50 29 19.2 96 20.1
.51 17 11.2 29 6.1
Education
High school and below 72 47.7 153 32.1
College and university 66 43.7 270 56.6
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Graduate school and above 13 8.6 54 11.3

Married
Single 66 43.7 291 61.0
Married no child 17 11.3 24 5.0
Married with child 67 44.4 158 33.1
Others 1 0.7 4 0.8
Month income/per person (NT dollar)
Less than $20,000 52 34.4 188 39.4
20,001-30,000 29 19.2 86 18.0
30,001-40,000 22 14.6 66 13.8
40,001-50,000 18 11.9 45 9.4 Table I.
50,001-60,000 12 7.9 27 5.7 Demographic profile
60,001 or above 18 11.9 65 13.6 of the respondents

Characteristics FT group FC group

Main reason for dining-out

Convenience 45 29.8 184 38.6
Social activities 71 48.0 253 53.0
Business necessity 16 10.6 24 5.0
Celebration (e.g. birthday) 19 12.6 16 3.4
Dining-out companion
Along 3 2.0 5 1.0
Spouse (husband, wife, boy/girl friend) 2 1.3 23 4.8
Parents or children 23 15.2 44 9.2
Relatives 27 17.9 77 16.1
Friends 72 47.7 209 49.8 Table II.
Business colleagues 13 8.6 57 11.9 Dining-out related
Relatives and friends 11 7.3 62 13.0 characteristics

usually dined-out with friends (FT group ¼ 47.7 percent; FC group ¼ 49.8 percent),
and then close family members (FT group ¼ 33.1 percent; FC group ¼ 25.3 percent),
while the FC group usually dined out with relatives and friends (13 percent), and then
business colleagues (11.5 percent).
 APJML Measurement model
24,1 This study uses confirmatory factor analysis (CFA) to examine the measurement
model[3], based on Anderson and Gerbing (1988). First, we evaluate the CFA results to
confirm the overall adequacy of the two-group model. The analysis of the results
included uncovering the uni-dimensionality, reliability, and validity of the three-factor
measurement model before testing the structural model. As shown in Table III, the level
160 of internal consistency in each construct was acceptable, with Cronbach’s a estimates
ranging from 0.77 to 0.92, thus meeting the suggested level of 0.7 in Nunnally (1978). The
composite reliabilities, ranging from 0.78 to 0.92, were also considered acceptable
(Fornell and Larcker, 1981). In addition, all variance extracted estimates, which ranged
from 0.53 to 0.80, exceeded the recommended 0.5 threshold (Fornell and Larcker, 1981).
Convergent validity was also confirmed, because all confirmatory factor loadings
were higher than 0.50 and lower than 0.90, and all these were significant at the p level of
0.001. Finally, all indices of the measurement model were also examined and matched
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the suggested acceptance level of Jöreskog and Sörbom (1989) (x 2(137) ¼ 595.93,
p , 0.001; x 2/df ¼ 4.35; GFI ¼ 0.91; AGFI ¼ 0.87; RMSEA ¼ 0.07; NFI ¼ 0.98;
NNFI ¼ 0.98; PNFI ¼ 0.78; CFI ¼ 0.98; IFI ¼ 0.98; RFI ¼ 0.97; RMR ¼ 0.03;
SRMR ¼ 0.04; PGFI ¼ 0.66).
This study performed discriminant validity analysis based on the recommendations
of Anderson and Gerbing (1988) by limiting the correlation coefficient of the
paired dimensions to 1, then performing a x 2 variance test of the limited and
unlimited measurement patterns. If the x 2-value of the limited pattern exceeds that of
the unlimited measurement pattern and reaches a level of significance, then both
dimensions have discriminant validity. The results given in Table IV show that the
x 2 values of the limited patterns did not exceed those of unlimited patterns and reached
a level of significance, indicating that the discriminant validities among all dimensions
were acceptable.

Structural equation modeling

Both the reliability and validity of all dimensions in this study were acceptable, and
thus using a single measurement indicator rather than multiple ones should be viable.
The dimension scores of the interaction orientation dimension measurement patterns
during the first stage were averaged, and then the first-stage dimensions were used as
the multiple measurement indicators during the second stage (as shown in Figure 2
and Table V). Goodness-of-fit indices demonstrated that the two group structural
model fit the data reasonably (x 2(64) ¼ 288.34 ( p , 0.001); x 2/64 ¼ 4.51; GFI ¼ 0.92;
NFI ¼ 0.97; NNFI ¼ 0.96; CFI ¼ 0.97; IFI ¼ 0.97; RMR ¼ 0.027). The model’s fit, as
indicated by these indexes, was deemed satisfactory, and thus it provided a good basis
for testing the hypothesized paths.
In the FT diners group, interaction orientation had a positive influence on customer
satisfaction (g11 ¼ 0.45; t ¼ 5.33; p , 0.001). However, interaction orientation did not
have a significant and positive influence on behavioral intentions (g21 ¼ 0.02; t ¼ 0.36;
p . 0.05). In addition, customer satisfaction had a significant and positive influence on
behavioral intentions (b21 ¼ 0.87; t ¼ 9.74; p , 0.001). These findings indicate that for
the FT customer group interaction orientation is a significant determinant of customer
satisfaction, but it has no positive influence on behavioral intentions in a restaurant
setting.
 Service
Standardized Composite Average variance
Construct (a) Items factor loadings (t) Error reliability (CR) extracted (AVE) interaction
A: using a second-order conceptualization of interaction orientation a
orientation
Interaction orientation CC 0.94 (16.31)
IRC 0.92 (21.49)
CE 0.88 (20.60)
CVM 0.83 (20.15) 161
Concept of customer (0.77) CC1 0.65 ( –) 0.58 0.78 0.54
CC2 0.77 (15.80) 0.41
CC3 0.78 (15.94) 0.40
Interaction response capacity (0.85) IRC1 0.82 ( –) 0.33 0.86 0.60
IRC2 0.78 (21.58) 0.39
IRC3 0.72 (19.33) 0.49
IRC4 0.77 (21.08) 0.41
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Customer empowerment (0.88) CE1 0.83 ( –) 0.32 0.88 0.71

CE2 0.85 (24.53) 0.28
CE3 0.86 (24.83) 0.27
Customer value management CVM1 0.86 ( –) 0.26 0.87 0.69
CVM2 0.87 (26.25) 0.25
CVM3 0.76 (22.01) 0.42
B: using a first-order conceptualization of customer satisfaction and behavioral intention b
Customer satisfaction (0.90) SA1 0.82 (24.65) 0.32 0.90 0.75
SA2 0.86 (26.56) 0.25
SA3 0.91 (28.82) 0.17
Behavioral intention (0.92) RI1 0.86 (26.74) 0.25 0.92 0.80
RI2 0.93 (30.03) 0.14
RI3 0.89 (28.12) 0.21
C: results of the CFA with the full constructs c
Concept of customer CC1 0.65 (17.21) 0.57 0.78 0.54
CC2 0.77 (21.65) 0.41
CC3 0.77 (21.49) 0.41
Interaction response capacity IRC1 0.82 (24.26) 0.33 0.85 0.59
IRC2 0.79 (22.66) 0.39
IRC3 0.71 (19.56) 0.49
IRC4 0.77 (21.93) 0.41
Customer empowerment CE1 0.82 (24.46) 0.32 0.88 0.71
CE2 0.85 (25.58) 0.28
CE3 0.86 (25.53) 0.27
Customer value management CVM1 0.86 (26.00) 0.26 0.87 0.69
CVM2 0.87 (26.77) 0.25
CVM3 0.76 (28.59) 0.42
Satisfaction SA1 0.83 (24.92) 0.31 0.90 0.75
SA2 0.87 (26.75) 0.25
SA3 0.90 (28.69) 0.18
Behavioral intention RI1 0.86 (26.71) 0.26 0.92 0.79
RI2 0.93 (30.01) 0.14
RI3 0.89 (28.24) 0.20

Notes: ax 2(61) ¼ 281.82, p , 0.001, x 2/df ¼ 4.620, RMSEA ¼ 0.076, NFI ¼ 0.98, NNFI ¼ 0.98,
PNFI ¼ 0.77, CFI ¼ 0.99, IFI ¼ 0.99, RFI ¼ 0.98, RMR ¼ 0.039, SRMR ¼ 0.041, GFI ¼ 0.94,
AGFI ¼ 0.90; bx 2(8) ¼ 165.82, p , 0.001, RMSEA ¼ 0.18, NFI ¼ 0.96, NNFI ¼ 0.94, PNFI ¼ 0.51,
CFI ¼ 0.97, IFI ¼ 0.97, RFI ¼ 0.93, RMR ¼ 0.026, SRMR ¼ 0.037, GFI ¼ 0.92, AGFI ¼ 0.80; Table III.
c 2
x (137) ¼ 595.93, p , 0.001, x 2/df ¼ 4.35, RMSEA ¼ 0.073, NFI ¼ 0.98, NNFI ¼ 0.98, PNFI ¼ 0.78, Reliabilities and
CFI ¼ 0.98, IFI ¼ 0.98, RFI ¼ 0.97, RMR ¼ 0.034, SRMR ¼ 0.04, GFI ¼ 0.91, AGFI ¼ 0.87 CFA properties
 APJML The proposed relationships among the constructs were all supported for the frequent
24,1 diners group. Interaction orientation significantly influenced customer satisfaction
(g11 ¼ 0.55; t ¼ 10.65; p , 0.001) and behavioral intentions (g21 ¼ 0.14; t ¼ 3.74;
p , 0.01), and thus H1 was supported and H2 was partially supported. In addition,
customer satisfaction (b21 ¼ 0.78; t ¼ 15.75; p , 0.001) had a positive influence on
behavioral intentions, and thus H3 was supported. These results demonstrate the
162 importance of interaction orientation as a determinant of behavioral intentions,
especially for the frequent diners group.

The moderating effects

This study tested the differences between FT and FC, as well as dining frequency’s
association with customer satisfaction and behavioral intentions. Chi-square differences
(ex 2) with one degree of freedom were used to compare the two models, constrained
and unconstrained, for each of the three path coefficients (g11, g21, b21; as Figure 1). The
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x 2-value of the unconstrained model (the coefficients in each group were allowed to be
freely estimated) was subtracted from the x 2-value of the constrained model, while the
path coefficients were the same for both groups. The results of the moderating effect of
dining frequency are shown in Table VI.
For the links between interaction orientation and customer satisfaction, and between
interaction orientation and behavioral intentions, the x 2 of the constrained model was

Construct CC (SE) IRC (SE) CE (SE) CVM (SE) SA (SE) BI (SE)

CC 1
IRC 0.90 (0.02) 1
CE 0.80 (0.02) 0.79 (0.02) 1
CVM 0.76 (0.03) 0.73 (0.02) 0.78 (0.02) 1
SA 0.53 (0.04) 0.45 (0.04) 0.41 (0.04) 0.45 (0.04) 1
BI 0.49 (0.04) 0.46 (0.04) 0.40 (0.04) 0.45 (0.04) 0.87 (0.04) 1
Table IV.
Correlation matrix Note: SE, standards deviation between dimensions

Satisfaction Satisfaction

0.48*** 0.87*** 0.55*** 0.78***

Interaction Behavioral Interaction Behavioral

orientation intention orientation intention
0.02 0.14**
Figure 2. First time customers group Frequent customers group
Results of structural
equation model for Statistically significant Statistically not significant
FT and FC
Notes: Significant at: *** p < 0.001; ** p < 0.01; *p < 0.05
 Service
First-time customers Frequent
group customers group interaction
(standardized path (standardized orientation
Hypothesis Path coefficients) path coefficients)

H1 Interaction orientation ! customer 0.45 * * * 0.55 * * *

satisfaction 163
H2 Interaction orientation ! behavioral 0.02 0.14 * *
intentions
H3 Customer satisfaction ! behavioral 0.87 * * 0.78 * * *
intentions Table V.
Path results of structural
Note: Significant at: *p , 0.05, * *p , 0.01 and * * *p , 0.001 equation modeling
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Unconstrained Constrained
model model x2
Hypothesized path x 2(df ¼ 64) x 2(df ¼ 65) difference(edf ¼ 1)

H1: interaction orientation ! customer

satisfaction (g11) 288.34 303.17 14.83
H2: interaction orientation ! behavioral
intentions (g21) 288.34 385.47 97.13 Table VI.
H3: customer satisfaction ! behavioral Moderating effects of FT
intentions (b21) 288.34 457.04 168.7 group vs FC group

288.34 and the x 2 of unconstrained model was 303.17 (385.47), and thus the ex 2
(edf ¼ 1) ¼ 14.83 (97.13), which means that dining frequency had a moderating
effect on the interaction orientation-customer satisfaction link and the interaction
orientation-behavioral intentions link. As indicated by these results, interaction
orientation had a significantly stronger impact on customer satisfaction and behavioral
intentions in the FC group (g11 ¼ 0.55) than in the FT diners group (g11 ¼ 0.48).
In addition, the link between satisfaction and behavioral intentions was significantly
weaker for FT than for FC (ex 2(edf¼ 1) ¼ 168.7). Therefore, H4 was supported.

The mediating effect of customer satisfaction

The overall two-group structural model showed that interaction orientation had
positive causal effects on customer satisfaction, and that satisfaction then influenced
behavioral intentions. To further test the mediating effect of customer satisfaction
between interaction orientation and behavioral intentions, structural equation
modeling analyses were conducted separately for each group.
For the FT diners group, the goodness-of-fit indices of the model demonstrated a good
fit between the proposed model and the data (x 2(32) ¼ 90.26 ( p , 0.001); x 2/32 ¼ 2.82;
NFI ¼ 0.96; NNFI ¼ 0.96; CFI ¼ 0.97; IFI ¼ 0.97; GFI ¼ 0.90; RMR ¼ 0.048).
Based on Baron and Kenny (1986), four conditions for mediating effects were
investigated (Figure 2). Therefore, the structural equation model was re-estimated by
constraining the direct effect of customer satisfaction on behavioral intentions (b21 ¼ 0)
in each group. In the first condition, the independent variable (interaction orientation)
 APJML affects the mediator (customer satisfaction). In the second condition, the mediator
24,1 (customer satisfaction) affects the dependent variable (behavioral intentions). In the third
condition, the independent variable (interaction orientation) affects the dependent
variable (behavioral intentions). The first three conditions were met in the original
structural equation model, given the significant impact of interaction orientation on
customer satisfaction (g11), the significant impact of customer satisfaction on behavioral
164 intentions (b21), and the significant impact of interaction orientation on behavioral
intentions (g21). The fourth condition was also satisfied, and thus the parameter estimate
between interaction orientation and behavioral intentions in the mediating model became
no more significant (full mediation) than the parameter estimate (g21 ¼ 0.02; t ¼ 0.36 vs
gi to bi ¼ 0.35; t ¼ 5.12) in the constrained model (as shown in Table VII). The difference in
value between the constrained model (x 2(32) ¼ 90.26) and the mediating model
(x 2(33) ¼ 139.69) was statistically significant (ex 2(edf¼ 1) ¼ 46.43; p , 0.05), indicating
that the mediating model is a significant improvement over the constrained one.
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Similarly, structural equation modeling analyses were conducted on the FC group. The
goodness-of-fit indices of the model showed the structural model reasonably fit the data
(x 2(32) ¼ 208.19 ( p , 0.001); NFI ¼ 0.97; NNFI ¼ 0.96; CFI ¼ 0.97; IFI ¼ 0.97; GFI ¼ 0.92;
RMR ¼ 0.034). The first three conditions for the mediating effect were met in the original
structural equation model, given the significant relationships among the three constructs:
interaction orientation, customer satisfaction, and behavioral intentions (g11, g21, b21). The
fourth condition was also satisfied; the parameter estimate between interaction orientation
and behavioral intentions in the mediating model became less significant (partial
mediation) than the parameter estimate (g21 ¼ 0.14; t ¼ 2.54 vs gi to bi ¼ 0.61; t ¼ 12.06) in
the constrained model (as Table VII). The difference in value between the constrained
model (x 2 ¼ 208.19) and the mediating model (x 2 ¼ 365.22) was statistically significant
(ex 2(edf¼ 1) ¼ 157.03; p , 0.05), indicating that the mediating model is a significant
improvement over the constrained one. The mediating effects of customer satisfaction thus
clearly demonstrate that customer perceptions of interaction orientation produce future
behavioral intentions (e.g. positive WOM) through customer satisfaction.

Discussion and conclusions

Ramani and Kumar (2008) and Nazdrol et al. (2011) both called for more research to better
understand the influence of interaction orientation on customer responses in different
industries. This investigation thus examined the relationships among interaction
orientation, customer satisfaction and behavioral intentions in a restaurant setting.

Constrained model (b21 ¼ 0) Mediating model

gi to bi ¼ 0.35 * * *, t ¼ 5.12 g21 ¼ 0.02, t ¼ 0.36

x 2(33) ¼ 139.69 x2(32) ¼ 90.26
ex 2d(1) ¼ 56.24, p , 0.05
gi to bi ¼ 0.61 * * *, t ¼ 12.06 g21 ¼ 0.14 * *, t ¼ 2.54
Table VII. x 2(33) ¼ 365.22 x 2(32) ¼ 208.19
The mediating effect of ex 2d(1) ¼ 157.03, p , 0.05
customer satisfaction:
FT vs FC group Note: Significant at: *p , 0.05, * *p , 0.01, * * *p , 0.001
 Examining how FT customers perceive service interaction orientation in relation to Service
customer satisfaction and behavioral intentions, and how the results differ from those interaction
obtained for FC, can help improve understanding of customer dining behavior.
The analytical results demonstrate that interaction orientation significantly influenced orientation
customer satisfaction for both the FT (g11 ¼ 0.45) and FC groups (g11 ¼ 0.55). The
findings correspond to those of previous studies (Ramani and Kumar, 2008; Urban, 2004)
that identified the positive relationship between customers and service providers as a 165
determinant of customer satisfaction and behavioral intentions. Furthermore, interaction
orientation significantly affected behavioral intentions for the FC group (g21 ¼ 0.14), yet
no such effect was observed for FT diners (g21 ¼ 0.02). The weaker association between
interaction orientation and behavioral intentions suggests that loyalty behavior (for
example positive WOM) reduces with frequency, and that FT customers may rely more
on satisfaction level for loyalty formation than the FC group.
Additionally, dining frequency positively moderates the relationship among
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interaction orientation, customer satisfaction and loyalty, which supports the

suggestion of Namkung and Jang (2009). In addition, this moderating effect indicates
a stronger relationship among the predictor and outcome variables for more frequent
diners. The effects of the links between interaction orientation and satisfaction, between
interaction orientation and loyalty, and between satisfaction and loyalty, all increase
with dining frequency. Consequently, it seems reasonable to suggest that more
resources should be allocated to serving more FC, since such customers are more likely
to become loyal or satisfied if they experience good service.
Regarding the association between customer satisfaction and behavioral intentions,
a positive relationship was found for both groups. As suggested in past research (Oliver,
1999; Saha, 2009), high satisfaction ensures positive behavioral intentions. In addition,
dining frequency (FT vs FC) was observed to moderate the relationship between
satisfaction and behavioral intentions. The significant x 2 differences demonstrated that
customer dining satisfaction with the restaurant impacts customer behavioral
intentions (e.g. recommendation) significantly more in the FT group (b21 ¼ 0.87) than
in the FC group (b21 ¼ 0.78). This result echoes the argument of Oliver (1999) that high
satisfaction ensures positive behavioral intentions, such as WOM or repeat patronage.
Another key finding of this study is that customer perceptions of interaction
orientation influence behavioral intentions via satisfaction. For FT diners, individuals
who perceived the attitude or interaction outcomes of service providers as positive were
more likely to have satisfactory restaurant experiences, and their high satisfaction
reinforced their behavioral intentions (full mediation). The role of interaction orientation
should thus not be overlooked, since it ensured a satisfactory dining experience, which in
turn was related to positive behavioral outcomes (such as WOM). For frequent diners,
interaction orientation influenced customer behavioral intentions both directly
and indirectly via satisfaction. The indirect effects of interaction orientation on
behavioral intentions (0.43) exceeded the direct effects (0.14). These findings highlight the
significance of satisfaction, not only as a critical determinant of behavioral intentions, but
also as an effective mediator between interaction orientation and behavioral intentions.

Managerial implications
This investigation offers hospitality managers a view of how customers assess
their relationship with service providers from the interaction perspective, and this can be
 APJML useful for developing more effective excellent marketing tools. When managers can
24,1 emphasize the requirements of customers and have the ability to interact with
individuals, they can better understand them, and managers should recognize that a
restaurant that exceeds customer expectations is likely to be perceived more positively.
The results of this investigation can help restaurant managers develop more effective
and efficient strategies and improve their understanding of how forms of service quality
166 based on interaction orientation achieve customer satisfaction, then eventually influence
customer behavioral intentions. For example, focusing on customer service needs and
empowering customers, thus boosting customer retention and profits.
In summary, the findings suggest that restaurant managers should treat FT and
frequent consumers in several different ways. For the FT diners, the interaction
orientation of the restaurant does not have a direct positive influence on their behavioral
intentions, but it does indirectly influence their behavioral intentions through dining
satisfaction. For more frequent diners, the interaction orientation of the restaurant not
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only has a positive influence on their satisfaction, but also on their behavioral intentions.
This result indicates that restaurant managers should consider how to offer improved
and more satisfying dining experiences to FT customers (including providing local
specialties, a party atmosphere, high-quality service, and so on) utilizing an interaction
orientation design. Second, customer satisfaction appears to mediate perceived
interaction orientation and dining behavior for both customer groups. Since the role of
satisfaction should be obvious, given the hedonic nature of restaurants, managers can
improve the probability of increasing customers’ behavioral intentions by ensuring
stronger interaction orientation, thus eliciting more positive emotions. Finally, the
relationship between interaction orientation and behavioral intentions was insignificant
in the FT customer group, but this finding should not be viewed as negating the
influence of interaction orientation as a determinant of repurchase intentions.
The interaction between customers and service providers can significantly impact
customer evaluations of restaurant service. In cases where customers have unfavorable
interactions with front-line employees, FT customers experience low satisfaction,
potentially leading to outcomes such as bad WOM. Therefore, service managers in
restaurants where customers spend time interacting with service providers must pay
close attention during staff training to ensure that they present the appropriate traits
(e.g. empathy or positive service attitude) in treating both FT and regular customers.

Limitations and future research

As with any research, this study has certain limitations. First, data were collected only
from full-service dining restaurants. Therefore, generalizing the results to other
segments of the restaurant industry may be impossible without changing the magnitude
and direction of the relationships among constructs. Additionally, this study surveyed a
relatively small number of respondents by convenience sampling, drawn from
restaurants in a single city, which may also reduce the generalizability of the findings
have lead to a potential sampling bias. This study examines only one service industry,
but future studies should consider other high contact service environments, such as
hotels and retailers, and the findings should be tested in these contexts. This
investigation suggests that interaction orientation is an appropriate and useful concept
for assessing service in high contact consumption contexts. Although the findings
indicate that customers develop their interaction judgments differently based on dining
 frequency, further research is necessary to confirm the relationships among interaction Service
orientation, customer satisfaction and behavioral intentions. Identifying the formation interaction
of interaction orientation during customer dining experiences will help managers better
manage relationships. Furthermore, the interaction orientation scale used in this study orientation
was adapted from Ramani and Kumar (2008). However, the scale in this earlier work was
based on an employee perspective, rather than a consumer one, and future research
should confirm the reliability and validity of this scale via a different empirical study. 167
Another direction for future research involves other forms of interaction orientation,
such as interaction based on a business process perspective and service mechanisms.
Overall, it would be desirable for future research to include more diverse perspectives
regarding interaction orientation to improve understanding of the relative importance of
individual interaction categories as antecedents to customer satisfaction or behavioral
intentions. It is also important to acknowledge personal and situational characteristics,
such as gender, age, and income, that are potential moderators of relationships among
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constructs. Future research including these variables can help increase knowledge of
customer perceptions of service interaction and its relationships with satisfaction and
behavioral intentions.

Notes
1. PHsea (www.phsea.com.tw) is a well-known web site that provides detailed tourist
information about Penghu. Therefore, based on content from this web site, we selected ten of
the most popular restaurants that internet users mentioned from 26 full-service restaurants
offering traditional Penghu seafood.
2. In a 2009 dining frequency survey conducted by pollster.com (www.enews.com.tw/news_
view.aspx?id ¼ INF_INFORMATION000000119), it was argued that diners (36 percent) ate
out once in the previous month. Therefore, this study used the following standards to divide the
sample into two groups: diners eating in the restaurant for the FT were termed FT customers,
while those who had eaten there two or more times in the past month were termed FC.
3. Based on Harman’s single-factor test result, six dimensions were extracted from 19 items
with an exploratory factor analysis of the principal component analysis method, and the
accumulated variation explained was 22.53 percent, and thus this study did not have a
serious problem with common method variance.

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(The Appendix follows overleaf.)

Corresponding author
Rong-Da Liang can be contacted at: [email protected]

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 APJML Appendix
24,1
Constructs Operational definitions of the items

Interaction orientation
170 Concept of customer Every marketing activity in the restaurant and customers’ reactions are all
based on individual customers, and thus efforts should always be focused on
people as individuals
CC1 1. This restaurant provides diverse food and services to satisfy the
needs of individual customers
CC2 2. This restaurant consciously seeks to identify and acquire new
customers on an individual basis
CC3 3. This restaurant observes customers’ reactions to marketing
activities at the individual customer level
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Interaction response The ability to dynamical incorporate feedback from specific customer dining
capacity experiences
IRC1 4. This restaurant has systems in place that record each customer’s
dining experience
IRC2 5. This restaurant can identify all the dining experiences pertaining
to each individual customer
IRC3 6. This restaurant analyzes previous customer dining experiences at
the individual customer level to predict future transactions from
that customer
IRC4 7. This restaurant possesses dining information on all individual
customers at all times
Customer The degree that the restaurant encourages customers to provide their
empowerment suggestions or opinions
CE1 8. This restaurant encourages customers to provide suggestions
about its products or services
CE2 9. This restaurant encourages customers to share opinions about its
products or services with other customers
CE3 10. This restaurant encourages customers to participate in designing
products and services
Customer value The extent to which the restaurant identifies and measures individual
management customer value
CVM1 11. restaurant identifies how each individual customer has been
contributing to its profits
CVM2 12. This restaurant predicts what each individual customer will
contribute to its profits in the future
CVM3 13. This restaurant calculates the revenue generated as a result of
every marketing activity an individual customer basis
Satisfaction The customers’ overall psychological state after dining in the restaurant
SA1 14. Overall, I am satisfied with the dining experience at this
restaurant
SA2 15. I have really enjoyed the dining experience at this restaurant
SA3 16. I am pleased to dine at this restaurant
Behavioral intention The likelihood of customers’ coming back, recommending and giving a
positive evaluation of this restaurant to others
RI1 17. I will come back to this restaurant in the future
RI2 18. I will recommend this restaurant to my friends or others
Table AI. RI3 19. I would give a positive evaluation about this restaurant to others