Influence of Price and Brand Image On Restaurant Customers Restaurant Selection Attribute
Influence of Price and Brand Image On Restaurant Customers Restaurant Selection Attribute
Influence of Price and Brand Image On Restaurant Customers Restaurant Selection Attribute
To cite this article: Sungpo Yi, Jinlin Zhao & Hyun-Woo (DAVID) Joung (2018) Influence of
price and brand image on restaurant customers’ restaurant selection attribute, Journal of
Foodservice Business Research, 21:2, 200-217, DOI: 10.1080/15378020.2017.1368808
ABSTRACT KEYWORDS
The study examines the influence of price and brand image on three Restaurant quality; price;
major restaurant quality attributes (ambiance, food quality, and service brand image; customer
quality). A total number of 363 cases from the survey were used to assess preference
the proposed model for structural equation modeling. The results of this
study indicated that brand image significantly affected customers’ restau-
rant attribute preference. Living status (residents vs. tourists) partially
affected customers’ restaurant attribute preference. This study provides
valuable information about restaurant customers’ preferences. The results
also demonstrate how restaurant operators attract new customers and
retain existing customers by improving their ambiance, food, and service
quality.
Introduction
The restaurant business is one of the most competitive businesses in industry. Thirty
percent of all restaurants close or change ownership within a year and 60% of them within
3 years (White, 2011). Therefore, knowing the major characteristics of restaurants’ target
markets and deciding which competitive factors could attract new customers and retain
existing customers are critical for managing a successful restaurant. Moreover, restaurant
managers or operators should know what makes their restaurant unique and why customers
choose a certain restaurant for their dining experiences. Given the intangible characteristics
of restaurant products, customers heavily rely on tangible and realistic clues to judge
products before they purchase them (Kotler, Bowen, Makens, Xie, & Liang, 1996).
In the hospitality industry, price and brand image are considered the major indicators that
affect consumers’ behavior. Traditionally, price plays an important role in providing an
objective clue about the quality of products and services. A previous study found that a
customer’s purchasing behavior is influenced by price information (Shoemaker, Mary, &
Wade, 2005). In marketing research, price is considered an important factor that defines
customer expectations and therefore their evaluation of their purchase. Oh (2000) asserted
that price is a critical antecedent in the formation of a customer’s evaluation of a product’s
quality during their dining experience. Chiang and Jang (2006) also found that product price
positively affects customer perceptions of quality and value. That is, if customers consider the
offered price to be reasonable, they tend to be more satisfied with their dining experience.
CONTACT Sungpo Yi [email protected] Department of Hospitality and Retail Management, Texas Tech University 1301
Akron Ave, Lubbock, TX 79409.
© 2017 Taylor & Francis
JOURNAL OF FOODSERVICE BUSINESS RESEARCH 201
Monroe and Krishnan (1985) found that price not only affects customer perceptions of quality
and value but also their willingness to purchase products and their revisiting intentions.
The perception of brand (i.e., brand image) has also been an important concept in
restaurant-related research because brand image affects customers’ subjective perceptions,
which influence purchase intention, satisfaction, and loyalty (Jin, Lee, & Huffman, 2012).
Specifically, a positive brand image plays a critical role in stimulating positive emotions in
customers concerning the restaurant, which in turn lead to customer satisfaction and loyalty
(Lee, Back, & Kim, 2009). A positively perceived brand directly affects a customer’s
decision-making more than any other consumer value (e.g., service quality) in full-service
restaurant settings (Hwang & Ok, 2013). Tepeci (1999) also suggested that restaurant
customer loyalty is proportional to restaurant brand preference. In this regard, building a
positive brand image is a critical marketing strategy in today’s marketplace for retaining
existing customers and attracting new ones.
Therefore, these two factors (price and brand image) have been considered major
influences on customers in their evaluation of the overall quality of a restaurant.
Moreover, the careful consideration of these two factors is very important for being
successful in the market because they include both intangible and tangible attributes of
a restaurant’s products and service.
Nowadays, with customers’ increased desire to have an exceptional dining experience,
the ambiance of a restaurant has become another significant influential factor in restaurant
customer experiences (Hyun, 2010; Sulek & Hensley, 2004). Moreover, restaurant ambiance
often plays an important role in enhancing the effect of the quality of the food and service
(Ha & Jang, 2010; Hyun, 2010; Ryu & Han, 2010).
In hospitality literature, food quality is a fundamental factor of restaurant customers having a
satisfactory dining experience (Namkung & Jang, 2008; Sulek & Hensley, 2004). Recent
literature on restaurant food includes taste, portion size, menu variety, healthy options, food
temperature, and food presentation as attributes of food quality (Ha & Jang, 2010; Hyun, 2010;
Namkung & Jang, 2008).
Like food quality, service quality plays an important role in restaurant customer
satisfaction. Service quality is a very subjective and emotional factor of overall restaurant
quality. Customers consider that the service staff makes the service personal because the
interpersonal skill of service staffs directly correlate with perception of how good the
service is (Sulek & Hensley, 2004). For example, impersonal service is very unpleasant
while a warm attitude from service staff makes customers feel very welcome, as well as
making them want to reward the staff for their hospitality. Moreover, Hyun (2010) found
that service quality affects not only customer satisfaction but also customer trust, followed
by customer loyalty (i.e., revisit intentions, speaking positively about the restaurant, and
intent to recommend it to others).
The current study investigates how brand image and price affect these three major
restaurant selection attributes (ambiance, food quality, and service quality). More specifi-
cally, the objectives of the study are 1) to test the impact of brand image on the restaurant
selection attributes and 2) to examine the impact of perceived price on the restaurant
selection attributes. Furthermore, the current study explores how a respondent’s living
status (i.e., local resident or tourist) influences their restaurant selection attribute
preferences.
202 S. YI ET AL.
Literature review
Restaurant selection attributes
Ambiance
In the service literature, Parasuraman, Zeithaml, and Berry (1988) showed that facilities and
equipment are critical components of ambiance. However, several researchers later pointed
out that factors such as spatial layout, decoration, and having relaxed furnishings also
contribute to higher levels of service quality, and these came to be considered suitable
indicators for evaluating ambiance (Nguyen & Leblanc, 2002; Raajpoot, 2002).
Kotler (1973) divided the aspects of atmosphere (ambiance) into three categories: 1)
attention-creating mediums, 2) message-creating mediums, and 3) effect-creating mediums.
Specifically, an attention-creating medium plays an important motivating role in differentiating
the restaurant from its competitors. A message-creating medium provides tangible information
through which customers can infer the level of quality of the restaurant. That is, the restaurant
can communicate with its customers through the environment, which greatly influences
customers’ dining experiences (Bitner, 1992). These results were also supported by Hartline
and Jones (1996), who showed that ambient factors become more important in consumer
quality expectations when not enough information is available in hotel industry. Lastly, an
effect-creating medium stimulates customers’ emotional reactions. For example, a restaurant’s
ambient factors, such as interior design, music, lighting, and aroma, powerfully influence
customers’ emotions and therefore the formation of their preferences (Spangenberg, Crowley,
& Henderson, 1996).
Wall and Berry (2007) maintained that the physical environment is positively related to
customer perceptions of quality because it is part of the dining experience. Namasivayam
and Mattila (2007) also found that the physical environment of a restaurant plays an
important role in stimulating potential customers’ pre-consumption desires by influencing
the customers’ feelings. They found that restaurant ambiance also has a positive influence on
perceptions of food quality. Moreover, restaurant ambiance encourages customers toward
positive purchasing decisions because comfortable interior, pleasant aroma, and nice uten-
sils enable customers to have more favorable perceptions. Han and Ryu (2009) found that a
relaxed interior affects the dining satisfaction of customers and their repeat-patronage
intentions. Every aspect of ambiance leads to customers evaluating their experiences more
positively. Therefore, it is expected that ambiance will be a considerable factor in customer
motivation and service expectations.
Food quality
Various food quality attributes, such as taste, presentation, and temperature have been
investigated by researchers (Hyun, 2010; Namkung & Jang, 2008; Raajpoot, 2002; Ryu &
Han, 2010; Sulek & Hensley, 2004). The results indicate that food quality is one of the main
factors in customers choosing to visit a restaurant. Out of the various food quality attributes, it
is not surprising that the taste of the food is one of the most important criteria in customer
restaurant selection because having tasty food provides customers with both a positive sensory
experience and emotional satisfaction during their dining experience.
Moreover, with people’s increased attention toward healthy lifestyles, food quality has
come to include not only food taste but also nutrition and food safety issues (Choi & Zhao,
JOURNAL OF FOODSERVICE BUSINESS RESEARCH 203
2014; Knight, Worosz, & Todd, 2007) because nutritional and safe food is directly connected
with customers’ health and safety concerns. Eckel et al. (2009) investigated customers’
awareness of nutritional issues and found that more restaurant customers changed their
favorite restaurant due to concerns over the healthiness of the menu in 2007 compared to
2006. Choi and Zhao (2010) reported that 62% of their respondents were concerned about
health issues when eating out. They also indicated that 60% of their research participants
considered nutritional value important when selecting a restaurant.
Food safety issues have affected restaurant customers’ behavior as well. Thirty-nine percent of
respondents in the study of Henson et al. (2006) had been ill after having restaurant food and
56% of the respondents had stopped eating certain restaurants’ food because of food safety
concerns. Green, Selman, Scallan, Jones, and Marcus (2005) also supported this result, reporting
that 25% of their respondents believed that restaurant food had caused them an illness.
Regarding the influence of hygiene factors on customer restaurant selections, Aksoydan
(2007) indicated that food cleanliness is the most important factor of safe food, and it
significantly affects customers’ restaurant selections. Fatimah, Boo, Sambasivan, and Salleh
(2011) also suggested that food sanitation is ranked more important by customers than both
price and nutritional value. Moreover, food safety issues remain far more important than any
other food quality factors; bad reports or experiences last for a long time in restaurant customers’
memories. For example, the 1993 Jack in the Box E.coli outbreak remains a major issue of food
safety in the history of the restaurant industry. Again, in 2015, about 500 customers were sick
with E. coli and Norovirus after they visited Chipotle, which brought the restaurant down by
14.6% in total sales while profits plunged 44% (Storm, 2016). This reveals how food safety issues
affect customers’ restaurant selections and preferences.
Moreover, when customers evaluate food quality, they judge not only the taste but also the
presentation of food (Sulek & Hensley, 2004). Presentation describes the process of enhancing
food’s aesthetic appeal by arranging, modifying, or decorating it. Kivela, Inbakaran, and Reece
(1999) asserted that food presentation is a key attribute in improving customers’ dining
satisfaction. Presentation is not as critical as food taste or flavor in customers’ restaurant
selection criteria, but it can still generate either favorable or unfavorable customer preferences
(Raajpoot, 2002).
On the basis of these empirical results, many restaurant evaluators and researchers use
food quality as a key criterion of total restaurant quality and customer satisfaction because
the aforementioned food quality attributes can be used to determine the trustworthiness of
a restaurant (Knight et al., 2007). Therefore, it is necessary to examine the important
components of food quality as they pertain to customer restaurant selection.
Service quality
Service quality is as important as food quality and it plays a critical role in customers’
patronization and positive perceptions of a restaurant and their dining experience there
(Chow, Lau, Lo, Sha, & Yun, 2007; Namkung & Jang, 2008). In service quality research,
Zeithaml (1988) defined service quality as customers’ subjective quality judgments based on a
comparison between what they expected and what they received. Nikolich and Sparks (1995)
found that the aspects of service quality are positively related to customer expectations and the
performance of service providers. Wall and Berry (2007) divided the factors of service quality
into two major groups: human and mechanical effects. They defined the human factors as
professionalism, kindness, concern, efficiency, and enthusiasm from service providers. These
204 S. YI ET AL.
play an important role in determining restaurant quality. Their study found that the employ-
ees’ effort and professional performance are the most critical factors of service. These results
imply that the quality of employees’ service positively influences customer perceptions of
restaurant quality and their intentions to revisit the restaurant (Berry & Bendapudi, 2003).
Recently, Ha and Jang (2010) studied the importance of service quality and food quality
according to the perceptions of ethnic restaurant customers. They found that service quality
has a more significant influence on customer perceptions and loyalty than food quality.
Additionally, Ryu and Han (2010) found that service quality is one of three important
components in customers’ restaurant selection criteria in fast, casual restaurant settings.
Moreover, in full-service restaurant settings, host politeness and server attentiveness are the
top two indicators of customer satisfaction and repeat patronage (Sulek & Hensley, 2004).
Therefore, we can conclude that service quality affects not only customers’ evaluation of the
total experience but also their post-purchase behavior such as loyalty and revisit intentions.
Hypotheses development
Price and restaurant selection attributes
Monroe (1979) defined price as the degree to which something was worth the money paid
for it. Restaurant service quality cannot be evaluated by a customer before he or she has
had an experience in the restaurant, and this uncertainty makes customers hesitant in
choosing a dining option. However, price can provide an important objective clue about
the level of service. With certain price information, a customer can be influenced to
change his or her purchasing behavior (Shoemaker et al., 2005). Therefore, price is a key
indicator in understanding customer behavior.
Moreover, price has a meaningful effect on customers’ value expectations of a restaurant
(Ryu, 2005; Varki & Colgate, 2001). First, price plays a significant role in shaping customer
expectation of quality. That is, the higher the prices observed by the customer, the higher the
quality of products or service the customer expects, because higher prices add value to the
perceived quality of the product (Chen, Gupta, & Rom, 1994). In other words, although price
does not improve the objective quality of the product, it adds subjective value in terms of
customers’ expectations. Han and Ryu (2009) indicated that the expected quality of a restau-
rant is directly proportional to the perceived prices. Second, price plays a moderating role in
customer satisfaction levels and post-purchase preferences for selecting a restaurant (Ryu &
Han, 2010). That is, price moderates the relationship between objective product quality and
customer quality expectations (Taylor & Bearden, 2003). According to Ryu and Han (2010),
food quality is the most important antecedent of customers’ restaurant selection preferences,
followed by ambiance and service quality. These results indicate that price influences not only
customers’ restaurant attribute preferences but also customer priorities based on price
perception. That is, as the price increases, customers interpret this as an improvement in
product quality. The higher the price, the higher the perceived quality and customer expecta-
tions of value are likely to be. (Figure 1).
customers’ product preferences and purchasing intentions (Cretu & Brodie, 2007; Taylor,
Celuch, & Goodwin, 2004). A well-established brand image was found to be the major factor
in customers’ brand loyalty (Bendixen, Bukasa, & Abratt, 2004; Walley, Custance, Taylor,
Lindgreen, & Hingley, 2007). Brand familiarity not only indicates less risk in selecting a
product (Hutton, 1997) but also evokes preference (Persson, 2010). However, little empirical
research has been conducted concerning how brand image affects customer preferences
concerning restaurant attributes (food quality, service quality, and ambiance). On the basis
of empirical results provided, the current study proposes that brand image affects customers’
restaurant attribute preferences when selecting their favorite restaurants. (Figure 1).
H2b: Brand image has a significant influence on customers’ food quality preference.
H2c: Brand image has a significant influence on customers’ service quality preference.
H3a: Respondents’ living status (resident or tourist) has a significant influence on their
ambiance preference.
H3b: Respondents’ living status (resident or tourist) has a significant influence on their food
quality preference.
H3c: Respondents’ living status (resident or tourist) has a significant influence on their
service quality preference.
JOURNAL OF FOODSERVICE BUSINESS RESEARCH 207
Methodology
Questionnaire development
A self-administered questionnaire was used for data collection. The questionnaire for
this study was developed based on an extensive review of previous restaurant quality
and management studies and includes questions about the respondents’ perceptions of
price and restaurant brand image, attributes relevant to restaurant selection (ambiance,
food quality, and service quality), and demographic information. Restaurant ambiance
was measured with four items: interior, equipment, comfort, and management system
(Han & Ryu, 2009; Hyun, 2010; Sulek & Hensley, 2004). Food quality was measured
with three items: taste, nutrition, and sanitation (Choi & Zhao, 2014; Harrington,
Ottenbacher, & Way, 2013; Hyun, 2010). Service quality was measured with four items:
speed and service efficiency, kindness and concern, communication skills, and profes-
sional service (Abdelhamied, 2011; Harrington et al., 2013; Hyun, 2010; Meng &
Elliott, 2008). Price was measured with a single item adopted from Han and Ryu
(2009). Brand image perception was measured with a single item adopted from
Vranesevic and Stancec (2003). The survey asked participants if their restaurant service
quality expectations were proportional to the suggested menu prices using a 5-point
Likert Scale ranging from 1 (strongly disagree) to 5 (strongly agree). For example, “Do
you agree that the higher the price, the higher your expectation for the quality of
service the restaurant will provide?” The survey also asked participants to indicate
demographic information such as age, gender, ethnicity, income level, and education
level. Lastly, before the questionnaire was finalized, a professor of hospitality manage-
ment and two restaurant managers reviewed the questionnaire to ensure content
validity.
Data analysis
SPSS 22 for Windows and AMOS 22 were utilized in analyzing the data, which followed the
two-step procedure suggested by Anderson and Gerbing (1988). First, confirmatory factor
analysis (CFA) was applied to verify whether the measurement constructs met reliability,
validity, and unidimensional requirements, as the three major restaurant factors had multiple
items. After CFA, structural equation modeling (SEM) was conducted to assess the model fit
of the proposed model and to test the proposed interrelationships between price, brand image,
food quality, service quality, and restaurant ambiance.
Results
Data screening and assumption testing
Prior to the analysis, a data screening process was conducted to see if there were any violations of
the assumption. First, Levene’s test was implemented to check for homogeneity. With regard to
the SPSS exam percentages, the ambiance variances are equal for residents and tourists, F (1,
353) = 1.61, p = .206. The results are also equal for food quality variances, F (1, 353) = 2.175,
p = .100, but for service quality scores the variances are significantly different between the two
groups, F (1, 353), p < .05. All the variable inflationary factor (VIF) values of the independent
variables in the model are less than 3; therefore, no significant multicollinearity problem exists
(range from 1.376 to 2.157). With the use of a p < .001 criterion for Mahalanobis distance, no
serious multivariate outliers were detected.
Sample profile
Descriptive statistics, including frequencies and percentages, are reported. Table 1 presents the
demographic characteristics of the respondents. Out of the 363 respondents, 49.3% were female,
compared to 51.1% in Florida’s population (suburbanstats.org, 2017). Majority of the respon-
dents were between 20 and 39 years old, which is younger than average for Florida. Specifically,
45.7% of the respondents were between 20 and 29 years old, and 22.9% of the respondents were
between 30 and 39 years old. In the wider Florida population in 2015, only about 13% of people
were between 20 and 29 years old and about 17% were between 30 and 39 years old (sub-
urbanstate.org, 2017). In contrast, only 8.6% of respondents were older than 49 years comparing
about 37% in State of Florida (suburbanstats.org, 2017). This result could be explained by the
fact that the survey area was around the North and South Miami Beaches, which are the most
crowded tourist areas in South Florida assuming that younger people visit crowded tourist areas
more often than older people. In terms of ethnicity, the majority (47.4%) of the participants were
White/Caucasian, followed by Hispanic (28.4%) comparing about 75% of White/Caucasian and
22% of Hispanic population of the general Florida population (suburbanstats.org, 2017). The
majority of respondents fell into income brackets between $40,000 and $59,999. The median
income in Florida was $47,507 (U.S Census, 2016). Regarding education levels, our participants
were more educated than the Florida average. For example, 52.9% of the survey respondents had
a bachelor’s degree or higher, but only 27.3% of Floridians have a bachelor’s degree or higher
(United State Census, 2016). The majority of the respondents (69.1%) were single. In terms of
residents, 53.4% of the respondents were residents while 46.6% were tourists.
JOURNAL OF FOODSERVICE BUSINESS RESEARCH 209
with 56 degrees of freedom (p < .001, χ2/df = 2.147). Multiple indicators showed that the model
had a good enough fit to be used for further interpretation (NFI = .928, CFI = .960, TLI = .944,
RMSEA = .056, and SRMR = .036).
Table 4 and Figure 2 show the results of the hypotheses and provide parameter estimates
and associated t-values. Hypotheses H1, H2, and H3 proposed structural relationships
between ambiance, food quality, and service quality based on price, brand image, and
customer living status (resident or tourist). The study found that perceived price has no
significant impact on ambiance (H1a, β = .026, t-value = .450, p = .653), food quality (H1b,
β = .074, t-value = 1.370, p = .171), or service quality (H1c, β = .106, t-value = 1.916, p = .055).
Thus, H1a, H1b, and H1c are not supported. In contrast, brand image does have a significant
impact on ambiance (H2a, β = .175, t-value = 3.018, p < .05), food quality (H2b, β = .369,
t-value = 6.619, p < .01), and service quality (H2c, β = .235, t-value = 4.203, p < .01). Thus, H2a,
H2b, and H2c are supported. Respondent living status has no significant impact on ambiance
(H3a, β = − .087, t-value = − 1.509, p = .131) or food quality (H3b, β = − .090, t-value = − 1.655,
p = .098). However, respondent living status does have a significant influence on service
quality (H3c, β = − .168, t-value = − 3.032, p < .05). Thus, only H3c is supported.
uncertainty and hesitation and help customers make decisions because they can anticipate
correctly what they will get. This means that if a customer perceives any brand positively, the
brand represents the total restaurant quality to the customer.
On the other hand, price did not affect customers’ restaurant quality preferences in this
study. This unexpected result could be explained by considering customer preferences a
subjective matter of human beings’ noncognitive responses as well as being built on previous
experiences or personal perceptions about the product or service. Moreover, as mentioned
earlier, while price is an objective indicator about a restaurant product, it cannot contain all
the various dimensions of the product.
Another possible reason that price does not have a significant impact is the effect of brand
image. Statistically, the results of this study indicate that brand image affects customer
preferences a lot more than perceived price; therefore, the influence of price could be
suppressed in the measurement model. Chiang and Jang (2006) also had a similar result,
that although price significantly influences hotel guests’ purchase intentions, it is a weak
factor in its influence on perceived quality, trust, and perceived value. This indicates that
brand image plays a more significant role than price on hotel guests’ perceptions of quality
and value, and on their purchase intentions. Moreover, trust is the most significant factor of
the decision-making process in a hotel setting, and a positive brand image plays a significant
role in building consumer trust. It can be assumed that brand image has a bigger influence
than perceived price on the decision-making process.
Lastly, it is worth mentioning the descriptive information concerning restaurant quality
perceptions between residents and tourists. According to the results of the proposed structural
model, respondent living status does not have a significant impact on ambiance or food
quality preferences. However, living status does affect preferences concerning restaurant
service quality. In other words, restaurant ambiance and high food quality are mostly stressed
by both residents and tourists. However, residents and tourists have difference preferences
when selecting a restaurant based on perceived service quality. Yüksel and Yüksel (2002)
indicated that tourists consider courteous and friendly service a more important factor in their
restaurant preferences than residents do. The result can be interpreted to say that tourists want
to experience and enjoy more welcoming and warm hospitality for their dining experiences in
unfamiliar regions. Hence, this finding contributes to current research in helping build a
sophisticated conclusion and developing a better understanding of restaurant customers’
dining preferences.
Practical implications
This study also provides some practical implications. The results of this study suggest that a
restaurant manager should develop a total restaurant quality control system to continuously
monitor customer perceptions regarding restaurant quality attributes and brand image.
Specifically, restaurant managers should check whether the dining atmosphere, food quality,
and service quality levels are aligned with the restaurant’s overall concept and target
customers’ expectations to create a positive brand image. In other words, when a customer
sees or hears a brand, it is not just about the restaurant logos, tagline, or advertising, rather it
is the memory of previous experiences, food taste, prices, environment, and service. Hence,
a sophisticated quality control information system is necessary.
JOURNAL OF FOODSERVICE BUSINESS RESEARCH 213
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