DETERMINANT OF FACTORS THAT INFLUENCE CONSUMER IN CHOOSING NORMAL FULL-SERVICE RESTAURANT : CASE IN SERI ISKANDAR, PERAK.

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1 DETERMINANT OF FACTORS THAT INFLUENCE CONSUMER IN CHOOSING NORMAL FULL-SERVICE RESTAURANT : CASE IN SERI ISKANDAR, PERAK. Yong Azrina Ali Akbar Faculty of Business Management University Teknologi MARA Johor, Segamat Johor, sia yong198@johor.uitm.edu.my, Tel: Muharratul Sharifah Shaik Alaudeen Faculty of Business Management University Teknologi MARA Johor, Segamat Johor, sia muharr416@johor.uitm.edu.my, Tel: ABSTRACT The changing trend and lifestyle today such as more women entering the workforce, extended working hour, increasing household income and busier daily schedule had lead the consumer to eating out. This was fulfilling their need to have meal outside by choosing convenience alternative. The emergence of plenty restaurants in the country has lead the entrepreneurs to compete each other to ensure sustainability in their business margain. Therefore, this study was conducted to identify and understand the factors that influence consumer in choosing normal full-service restaurant at Seri Iskandar, Perak. The study also investigates consumer preference and attitude toward halal status that influence consumer need in choosing normal fullservice restaurant. A samples of 150 had being selected for this study by using convenience sampling method. The data was analyzed using SPSS software and Factor Analysis technique. This showed that, consumers are put heavy priorities on food quality, followed by trustworthiness, service quality, price, environment, and lastly location in choosing normal full-service restaurant. respondents are more concern on trustworthiness (halal status) compared to other races in selecting normal full-service restaurant. The implication of this study, entrepreneurs can consider these factors as their main competitive advantage. Keywords: factor, choosing, normal full-service restaurant. INTRODUCTION Eating is a daily necessity. According to the hierarchy of needs, a person must fulfill the physiological needs which are food, water, air and shelter. People concentrate on satisfying these needs before turning to higher needs (Lewis, 2007). In a fast paced and affluent society, eating out in restaurants has also become an important social and business occasion. The consumers usually have a wide range of options to choose from. There are restaurants by the thousands offering a full range of food varieties and services. As the number of restaurants has mushroomed, so the business has become much more competitive. Being able to meet consumers' basic expectations in today's situation at best can ensure business survival. To be successful and outstanding, a restaurant has to be able to exceed consumers' expectation by really understanding customers' reasons for selecting a particular type of dining experience. The growth of normal full-service restaurant was accelerating in sia. This was due to good economic condition and changing trend of sian lifestyle. Nowadays people prefer to eat at normal full-service restaurant which consist of Mamak stall, restaurant, and Tomyam restaurant. Thus this study will dig the factors that influencing consumer in selecting normal full-service restaurant in sia. Most previous research was study about premium or high class full-service restaurant and fast-food restaurant. There were only few researches about normal full-service restaurant. In fact, there are a lot of numbers of normal full-service restaurant that operate in sia. Because of that, it is important to do the study about this normal full-service restaurant that relates with consumer behavior. This research will study about what consumer wants from normal full-service restaurant in Seri Iskandar, Perak and also will help normal full-service restaurant entrepreneur to improve their service competitiveness. This research can be beneficial to the full-service restaurant entrepreneur, the academician and researcher, the consumer, and the policy maker or government. LITERATURE REVIEW Consumer Behavior Blackwell, Miniard, and Engel (2006) stated that consumer behavior is defined as activities people undertake when obtaining, consuming, and disposing of products and services. Besides, it also defined as a field of study that focuses on consumer activities. The study and the scope of consumer behavior have evolved. Historically, the study of consumer behavior focused on buyer behavior, or why people buy. Recently, researchers and practitioners have focused on consumption analysis, which refers to why and how people use products in addition to why and how they buy. 137

2 In recent years, a major food consumption trend in urban parts of developing countries is that more consumers are eating increasingly more meals outside of their homes (Selwyn 1991). Rising incomes, changing lifestyles and demographics are primary reasons for this increase in spending and change in consumption behavior. Emergence of multiple income households, more women working outside the home and the desire for convenience and service provide the necessary incentive for eating out (Price 1993). Role of Perception Perception is the process of acquiring, interpreting, selecting, and organizing sensory information. Hawkins et al (1998) noted that our perception is an approximation of reality. Our brain attempts to make sense out of the stimuli to which we are exposed. For example, when we see there are many people eat at that restaurant, we assume it was the best restaurant at that area. Consumer expectation of product performance plays an important role in food evaluation and can enhance the perception of a product when it was tasted. Deliza and MacFie had separated expectation sources into (1) extrinsic cues (e.g. brand name, familiarity), and (2) intrinsic cues (e.g. sensed characteristics). (Nizam, 2007). Consumer Decision Making Process Engel et al (1995) has developed a model to explain consumer behavior and highlighted five stages of the decision making process: Figure 2.1: Consumer Purchase Model by Engel et al Problem Recognition Search information Evaluation of alternative Purchase Outcome The model views the purchases as a process that goes through several steps which problem recognition, search, evaluation of alternatives, purchase, and outcome. Consumer decision making process starts with recognition of the problem, which lead to a search for ways of solving the problem. The next step is evaluating and compares each alternative that we had to get the possible solutions that suitable with the problem. This will lead to a decision to buy one of them, afterward resulting in some kind of output. All buying decision can be analyzed using these five steps, even the way they materialize may differ enormously. This is simple model and widely used throughout the consumer behavior literature. It also is a good start for understanding how consumers come to the final decision in choosing the normal full-service restaurant. Factors of choosing full-service restaurant There are several of research had been done on what factors that influence consumers to choose full-service restaurant. According to Lewis (1981), he considered five factors: food quality; menu variety; price; atmosphere; and convenience factors. The importance of these attributes varied according to the type of restaurant, which in Lewis' case was a category united with food type: family/popular; atmosphere; and gourmet. In all three instances, however, food quality was found to be the most important consideration influencing restaurant selection by consumers. In another research, Auty s (1992) study more closely follows the distinct pattern set out by June and Smith (1987). There are variety of choice factors in the restaurant decision process were collected and then collapsed into ten categories: food type; food quality; value for money; image and atmosphere; location; speed of service; recommended; new experience; opening hours; and facilities for children. To see if the type of restaurant chosen varied according to dining occasion, Auty also elicited four such occasions from the pilot: a celebration (e.g. birthday); a social occasion; convenience/need for a quick meal; and business meal. 138

3 Auty s (1992) study resulted that food types were the most important factor in choosing full-service restaurant. This is the ranking for the ten variables that Auty had study; food type (71%); food quality (59%); value for money (46%); image and atmosphere (33%); location (32%); speed of service (15%); recommended (11%); new experience (9%); and opening hours. June and Smith (1987) noted that there are five key criteria were used in their study of customer choice among restaurants: price, atmosphere, liquor license, service and quality. Surroundings, customer turnover, location, price, quality of food, quality of service, and type of food are the factors that consumers consider in choosing restaurant. These variables were chosen because they are used in restaurant trade journals to identify strategies of competing restaurants (Reeves and Hoy, 1993). Huang (2007) stated that the consumer need evaluate the factors such price, variety of food, parking lot, reservation, and special request in choosing full-service restaurant. Clearly, price is more important than service in affecting consumers' choice. The implication of the results is that, while service is an important factor in restaurant selection, customers are nevertheless unwilling to pay an extra amount for a higher level of service, while other things are being held constant. Hence, restaurant managers might be better off maintaining an acceptable level of service, while keeping price as low as possible. (Alan, 2001). According to Dutta and Venkatesh (2007), the major types of service failure in restaurants have been identified as slow service; inefficient staff; food and beverage quality problem; cleanliness; unfriendly and unhelpful staff; incorrect billing; untidy staff; reservation missing; physical evidence lacking in ambience; and finally, advertised promises not having been met. Jillian, Lester and Robert (1992) stated that the factors that influencing consumer to choose restaurant are prices of meal, past experience with similar types of restaurants, reputation of restaurant among people that respondent know, convenience of location, whether any memorable advertisement seen, appearance of other customers, whether employee appropriately dressed, manner of employees, and premise. In determining the expected quality of service, price plays a surprisingly small role, the manner of the employees and the word-of-mouth again dominating respondents perception. Martin and Frumkin (2005) stated that consumer's reasons for choosing a particular full-service restaurant, first is because of they like be at that restaurant, convenience location, quality of food, good variety of food, and lastly price factor. Sulek and Hensley (2004) noted that the factors those influencing consumers in choosing full-service restaurant are food quality, atmosphere, quality of the service, and interpersonal skills of the restaurant employee. Figure 3.2: Percentage of respondents ranking 4 or 5 in importance on a scale from 1 to 5 Source: Journal of Restaurant and Institution, Vol. 109, Iss According to Dulen (1999), there are seven factors that cause consumer to choose particular full-service restaurant which are food quality in the top rank, followed by cleanliness, service, value, menu variety, convenience, and lastly atmosphere. U.Z.A. Ungku Fatimah et al. (2011) stated that foodservice hygiene is indeed important. Particularly, cleanliness or hygiene was the third most important factor, after food variety and convenient location, that influences consumer selection of a FSR to dine in. Although consumers are increasingly concerned about the nutritional value of the food they consume, food safety remains far more important as the associated risk can be substantial. On the other hand, the low priority given to service quality (i.e., friendliness, quick service) might be attributed to the characteristics of the low scale FSRs. Mike (1992) reported that a majority (63%) of truckers said food quality and taste is the primary factor motivating their choice of a restaurant. Price (17%) took a back seat to service (19%) as the next-most crucial factor. Besides, the restaurant that offers professionals amenities such as a free 24-hour movie theater; laundry; and clean showers that drivers can use at no charge when they fill-up also cause truckers to choose that particular restaurant. This means that consumer prefer to choose the restaurant that offer extra service that convenience for them. In term of demographic factor, Duecy (2006) reported that demographic preferences also had influence consumer in choosing full-service restaurant. Consumers over age 65 are more likely than an average customer to say their full-service restaurant choice was driven by price, or because they were seeking a healthful or light meal. Meanwhile, consumers ages 18 to 34 years 139

4 old are above average "restaurant explorers," meaning they wanted to try new cuisines or new restaurants. The full-service restaurant is older than general population and tends to not have kids in the household. Besides, full-service restaurant customers are categorical in higher income (Gale, 2007). From all the factors that stated in previous study, there are six factors that are relevant may consider for using in this study. The factors that considered are price, quality of service, food quality, location, restaurant environment, and trustworthiness (halal status). Below are the explanations about each factor that may use in this study. Choosing Factors Price Service quality Food quality Location Restaurant environment Trustworthiness (halal status) Consumer evaluation Restaurant Choice RESEARCH METHODOLOGY Design of the study This study uses the quantitative research methodology. The data was obtained by distributing a set of structured questionaire to the respondent concerned. The respondents were asked to indicate the importance factors that are important to their opinion along a five-point scale. In this study, 180 respondents were selected. The questionnaires were distributed to every customer who walked into the restaurant. Respondent are required to complete the questionnaire while they were dining in the restaurant and return it to researcher before leaving the restaurant. In the final analysis, only 150 were used for analysis. The questionnaire has been piloted to a group of 30 customers to assess its validity before it was distributed. From this test, the respondents were able to attempt all the questions without much difficulty. However, questions were modified slightly in terms of the wording in order to give a better understanding to respondents. The research was conducted in Seri Iskandar Perak due to increasing population and developing area. In Seri Iskandar, there are two universities which are Universiti Teknologi Petronas and Universiti Teknologi Mara Kampus Seri Iskandar. Seri Iskandar is in Bota restrict. Data Analysis In order to analyze the data, Statistical Package for Social Science (SPSS) version 18.0 was used. Results were analyzed under the following categories which include Frequency, ANOVA and Factor Analysis. Besides that, the validity and reliability of the questions were analyzed using Cronbach Alpha. RESULTS Description of race Majority of the respondents are which consist of 66.7% (100 respondents) and the balance is consist of 20% (30 respondents), 8.7% (13 respondents), and others race such Kadazan, Dusun and Melanau 4.7% (7 respondents). Table 1: Frequency of race Race Frequency Percentage (%) Others Total Description of importance The result shows the mean scores and the ranking of total factors in choosing normal full-service restaurant. The ranking refer to consumer s perception on the importance of factor that most influence them when choosing normal full-service restaurant. All ranking are within the range of 2.3 to 4.7. The highest mean shows the importance of factor perceive by consumer when 140

5 choosing normal full-service restaurant. The highest mean are the food quality (4.7200), followed by trustworthiness (4.2733) and service quality (4.0911) as the most importance factor when choosing normal full-service restaurant, while the rest of the factor score are below 4.0. The rest of factor that not too importance when choosing normal full-service restaurant are price (3.4667), followed by environment (2.5667) and lastly location (2.3400). Table 2: Frequency of description of importance N Mean Importance of price Importance of food quality Importance of service quality Importance of location Importance of environment Importance of trustworthiness (halal status) Race analysis (ANOVA) Race is divided into four groups which consist of,,, and others. From the table, it shows that there are four factors which show significant differences between the groups of race in term of food quality, location, environment, and trustworthiness. In comparison to mean analysis: Food quality There is significant different in ranking the importance factors of food quality in choosing normal full-service restaurant between groups with other three race groups. High mean analysis (mean: 5.77) show that is more concern about importance of food quality than other groups. Location There is significant different in ranking the importance factors of location in choosing normal full-service restaurant between groups with the rest of the group. (mean: 3.13) are more concern toward importance of location than the rest of the groups. Environment There is significant different in ranking the importance factors of environment in choosing normal full-service restaurant between groups with the rest of groups. The highest mean score (mean: 3.17) by group shows that more emphasize on environment when choosing normal full-service restaurant than other race groups. Trustworthiness There is significant different in ranking the importance factors of trustworthiness in choosing normal fullservice restaurant between groups with the rest of groups. group score the highest mean, 5.32 shows that group more concern about halal status when choosing normal full-service restaurant than other race groups. Food quality Table 3: Race analysis (ANOVA) N Others 7 Total 150 Mean Location Environment Trustworthiness Others Total Others Total Others Total

6 Price Food quality Service quality Location Environment Trustworthiness Conclusion Factors Table 4: Summary one-way ANOVA on race analysis Race more concern about food quality than other race groups. more emphasize on location and environment when selecting normal full-service restaurant than other race groups. more concern on halal status compared to other rest race groups. Factor Analysis A total of 150 respondent s data was factor analyzed to examine the application earlier six main factors: price, food quality, service quality, location, environment, and trustworthiness. The data for factor analysis were 14 dimensions comprise of six factors to measure on a weighted five-scale ranging from strongly disagree to strongly agree. The Principal Component and Varimax rotation was used for the analysis to extract the dimension tested. Kaiser-Meyer-Olkin measure of sampling adequacy varies between 0 and 1, and values closer to 1 are better. A value was is measured for this data and it is adequate to run factor analysis. The overall significant of the correlation matrix was with a Bartlett s Test of Sphericity value of which indicated that the data matrix and sufficient correlation to the factor analysis. Total variance explained is 69.05% which means 69.05% of the dimension approved indicated the factors. Table 5: KMO and Bartlett s Test KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity Approx. Chi-Square df Sig From the Varimax rotated factor matrix, 6 factors with 14 variables were identified and no factor being excluded, with loading 0.5 on them. Hair et.al. (1995) stated that factor loading greater than ± 0.4 are considered more important; and if the loading are greater than 0.50, they are considered practically significant. Therefore factor loading less than ± 0.50 will be automatically removed from the rotated component matrix analysis. The next table indicates the factor analysis produced a clean factor structure with relatively higher loading on the appropriate factors. Most variables loaded heavily, verifying that there was a minimal overlap among these factors and that all factors were independently structured. The higher loading signaled the correlation of the dimensions with the factors on which they loaded. Generally, the communality of each dimension was relatively high ranging from 0.53 to 0.956, which also indicated that the variance of the original values was captured will by the 6 factors. However, the rotated factor result is show some mixing up among the dimension measure for certain factor and this is not as it being expected. Some dimensions use to measure a factor fall under other factor category and in all factor category there are other dimension fall into it. Then the order of the dimension from the factor solution will be sorted according to ascending order of the Cronbach s Alpha Coefficient of reliability to reflect the reliability dimensions. Composite reliability of a construct was calculated to measure internal consistency of six factors measured. The most reliable dimension will be list first. A high alpha coefficient of reliability indicated that measurement variable used to measure the particular dimension are relatively reliable than low alpha coefficient of reliability. A dimension with alpha coefficient of reliability 0.4 and above is considered as more consistent dimension. The higher the alpha coefficient of reliability means the higher the reliability of the particular dimension in indicating consumer influences toward choosing normal full-service restaurant. 142

7 Table 6: Result of factor analysis Factor 1: Trustworthiness (halal status) 1) Choose halal sign ) Safe with halal sign Factor 2: Food quality 1) Cheap > taste Factor 3: Multiple dimension factor 1) Taste > price ) Convenience parking lot Factor 4: Service quality 1) Service quality > price ) Decoration ) Restaurants employee manner Factor 5: Price 1) Lower price ) The price give value Factor 6: Taste 1) Taste > location ) Good taste Table 7: Result reliability test for all dimensions Reliability Statistics Cronbach's Alpha N of Items Table 8: Result reliability test for six factors (14 dimensions) Factors Reliability ( α ) Trustworthiness (halal status) 0.93 Service quality 0.62 Food quality 0.47 Price 0.34 Environment 0.15 Location 0.10 Discussion on the result (reliability test) The cronbach s alpha value is considered good because greater than 0.6. As a result of rotated component matrix, one of the loading shows negative value. In running the reliability test, this dimension was recoded into different variables to get good alpha value. In earlier, all the 17 dimensions have been run by using factor analysis. But the result of reliability test was not very good. It was caused by the low quality of sample then lead to low cronbach s alpha value which is The cronbach s alpha value for each factors are as below: Table 9: Result reliability test for six factors (17 dimensions) Factors Reliability ( α ) Trustworthiness (halal status) 0.93 Service quality 0.64 Food quality 0.45 Price 0.40 Environment Location Because of this bad cronbach s alpha value, researcher searches the other alternative to get the better result for reliability test. The result of factor analysis shows that there are some negative sign in some of dimensions loading. From this result, researcher 143

8 had been recoding the negative dimensions loading to the difference variables to get good alpha value. There are four dimensions that have been recoded but the cronbach s alpha value still not satisfies the researcher. Because of that, three dimensions has been deleted and not included to run factor analysis. As a result, only 14 dimensions had been included in running factor analysis. The result of cronbach s alpha value for 14 dimensions and each of factors are shown in Table 7 and Table 8. The good cronbach s alpha value are 0.60 and above. For the result of factor analysis which is shows the consumer segmentation in choosing normal full-service restaurant, cronbach s alpha value that has been consider is 0.40 and above. Thus, there are three factors or consumer segmentation that had considered by consumer in choosing normal full-service restaurant which is trustworthiness (halal status), service quality, and food quality. Discussion on the result (factor analysis) Factor 1: Trustworthiness (halal status) Trustworthiness had two significant loading including always choice halal sign and feel safe when choose it. This is no change from the previous classification. Since 66.7% respondents are, the halal status becomes an important factor for the respondent in choosing normal full-service restaurant. It plays important roles in influencing consumer s when choosing normal full-service restaurant. Factor 2: Food quality Food quality just only had one significant loading. In earlier, there are three dimensions in this factor. After run the factor analysis, it just left one dimension. The loading shows that respondents more emphasize on food quality rather than price. Factor 3: Multiple Factor Dimensions This factor had two significant loading. It included dimension from food quality and location. This indicate that consumer not only emphasize on food quality but also concern about the convenient parking lot of the restaurant. Factor 4: Service quality The forth aspect that consumer concern is about service quality. In earlier, dimension of the fast in service is included in this factor but after run the factor analysis, it not included in this factor. As a result, this dimension had three significant loading. Factor 5: Price The fifth factor that consumer assume importance in choosing normal full-service restaurant is price factor. It had two significant loading. This factor analysis proved that price is not importance aspect in influencing consumer in choosing normal full-service restaurant. Consumers prefer if the price they pay is value for them. Factor 6: Taste Taste is last dimension with two significant loading. In earlier, this dimension is including in food quality factor. After factor analysis had been done, this dimension separate to be another factor which is taste factor. CONCLUSION From the result of description of importance, it could be summarized that consumers put heavy priorities on food quality, followed by trustworthiness, service quality, price, environment, and location. ANOVA result showed that there are four factors had significant differences between race and the importance of the factors. There are food quality, location, environment, and trustworthiness. emphasizes on food quality, more concern on location and environment, and put heavy priority on trustworthiness. The factor analysis was conducted to examine the application of the proposed 6 factors that are trustworthiness (halal status), service quality, food quality, price, environment, and location. From the result, only 12 variables were identified from the original of 14 dimensions and still categorized into 6 factors. But some of the factors name has been change and the result shows trustworthiness, food quality, multiple dimension factors, service quality, price, and taste factors were existed. There is slight difference in terms of the classification of the factors under each new factors, this is due to difference of consumer s perception and preference in terms of the way they perceive each of factors dimension. The reliability test for all dimensions related to the factor revealed that there are only three factors that are highly reliable which the score is more than The factors are trustworthiness, service quality and food quality. Thus, we can conclude that are three factors are importance in determinant for consumer when choosing normal full-service restaurant. Even though there were only three factors that considered as important factors in choosing normal full-service restaurant, it does not mean that price, location, environment, and other factors are not importance and should not to be considered. The quality of sample is not quite good and it was due to the data obtained was less reliable. ACKNOWLEDGEMENT The researchers wish to express their sincere thanks to Universiti Teknologi MARA for fully funding and supporting this study. To all respondents who readily participated in this study, we are grateful and like to add that your contribution will never be forgotten. 144

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