Chapter 2
Literature Review
How Consumers Choose a Restaurant for Dinner in Visiting Occasions.
The Growth of the Restaurant Industry
Eating-out plays an increasing role in the human society everyday. It is not only because of the rush of life today, but also due to its huge profitability in the business world, especially in the restaurant industry. The restaurant industry in the United States represents 47.5% from its total market ( 2006), and this trend is continuously increasing, as shown in Figure 1. National Restaurant Association (2007) projected that at the end of this year, the total sales by the restaurant industry in the United States will reach at an approximate amount of US6.9 billion, which represents 66.5% growth compared from the total sales of the last decade. Likewise, Restaurant and Catering Australia reported that three groups of businesses, including the restaurant, café, and catering businesses had a significant turnover and dramatic growth in 2006. In addition, approximately more than 2,000 new restaurants are operating every year over the last four years ( 2007; 2007), as shown in Figure 2.
Figure 1: Restaurant industry sales
(Billions of current dollars)
Source: 2007 Restaurant Industry Forecast, National Restaurant Association
Figure 2
Source: Industry Snapshot (2007), Restaurant and Catering Australia
The Need to Understand How Consumers Choose a Restaurant
Due to the abundant increase in the restaurant industry, it is vital to research the important aspects that contribute to its success, in order to gain benefit from this opportunity. Restaurant managers must be equipped and ready to develop their restaurant businesses to generate more sales from such a trend. The development goes not only in terms of the restaurant per se, but the preparation must also concern its stakeholders. The government also should be prepared to interact with an enormous culinary tourists who will visit the country, especially in relevance to a country like Australia, which is being well-known as a country that develops individuals who exude culinary expertise . Employees need to comprehend a level of consumers expectation and practice how to satisfy consumerIn doing so, all stakeholders involved in restaurant development need to understand their customers deeply, in knowing their needs and wants, so as to generate strategies in rendering efficient and effective service. Such needs and wants include the customers’ criteria for choosing a restaurant depending on the occasion, the factors that influence them for selecting restaurants, their decision-making process, and the sources of information they utilize. To sum this all up, knowing how consumers choose a particular restaurant depending on the occasion seems to be suitable question in answering and encompassing all the perceived needs and wants of consumers.
The Interest of Consumers in Visiting Occasions
The criteria of consumers in choosing a restaurant for dinner in visiting occasions intrigued the researcher to pursue with the study, based on two main reasons. Primarily, visiting occasion seems to involve more specific factor like emotion or impression than other occasions. Secondly, the visiting occasion becomes more significant to the Australian society. It has been reported that Australia is a multicultural country, where 24% of its citizens were born overseas
( 2006), and consists of various nationalities, cultures and races. In addition, an abundance of immigrants from many countries can be observed, and with such, the population of Australia is continually increasing. Consequently, there is the perceived increase in chances that the immigrant’s family, relative, friends, and business networks would visit them some time during their stay in Australia. With this, this study is going to explore how consumers choose a restaurant for dinner in three visiting occasions, based on the three classes of visitors, namely, family members, social networks, and business partners.
The Limited Studies on Evaluating Restaurant Choice
Despite the importance of such an endeavor, there is a limited number of restaurant-choice researches compared with other services such as financial institutes
Decision making (DM) happens when consumers choose one option from others ( 2005). Due to globalization, consumers are overwhelmed with so many options, alternatives and varieties in the modern society, such that they forced to make decisions between or among choices at all times (2002, 2001, 2003). The idea of decision making can be seen using four dimensions, including the economic model, passive (2005). Economic model assumes that consumers are “rational” decision-makers, who could maximize their evaluative-process of every choice they have. However, this model cannot be applied to all types of consumers because in reality, due to insufficient resources, time, and ability, consumers lack the ability to compare each choice fairly. Hence, this model sounds too naïve. The second model is the passive model, which is the opposite of the previous model; such that this model emphasizes that consumers seem to be passive. Consumers of this model are easy to convince and predict. Nevertheless, consumer behavior from this perspective is much more complicated than expected. The third and most reasonable model seems to be Cognitive model, which presumes that consumers device a pattern in solving their problems. Consumers consider choices rationally with their limitation such as ability, perception, and information collection. Fourth and last model is the emotional model, which states that the decision-making of consumers involves emotion. In using an economic view, the use of this model might not be as reasonable and logical in terms of making decisions, for consumers rely on feelings and emotions in order to make their decisions.
From this, it can be perceived that the decision making process can be classified as one that ranges from a simple process to a complex one, and is usually associated with high risks. The question that leads to the determination of the interest of researchers and practitioners will be used to gain better understanding about the factors to consider in making a sound consumer-decision-making process. The importance of such an understanding translates into better chance to capture and therefore eventually, in dominating a market. Therefore, the studies of decision-making process are gaining momentum over the last few decades. Turney and (1993) stated that “Literature review in the restaurant marketing reveal relatively few studies that focus on how customers go through decision- making process in comparison to other industries.”
Professor (2001) proposed the model of Consumer Decision Making Process (CDP) in their book entitled, “Consumer Behavior (9th ed.)”. The CDP model simply reflects how consumers make a choice for both goods and services. Seven stages are combined to be the CDP model. “Need Recognition” is the first signal that implies consumers’ need or want. After the need recognition, consumers tend to gather as much information as they can in order to evaluate their choices before making a decision, as indicated in the second and third stages. At the fourth stage, purchasing is made, depending on the preference or choice made. However, this model does not end at this stage because the next three stages also affect the decision-making process of an individual. When consumers use the products or services they have purchased, the value of their purchased commodity becomes dependent on their experience in using them, which becomes essential at the fifth stage. “Post-Consumption Evaluation” then plays role in a cognitive process in the decision-making process of consumers, in reminding them of the value of the commodity on their next purchase. The last stage, Divestment, also participates in such a cognitive process, and indicates how well of the performance of the product or service is good of disposing.
Figure 3: The Consumers Decision Process (CDP) model
Source: Figure 3. How Consumers Make Decisions for Goods and services (2001)
However, using only the CDP model itself could not generate much contribution when applied into marketing practices. Blackwell (2001) also mentioned about various factors that influence each stages in CDP model, as shown in Figure 4.
Figure 4: The CDP Model and various factors
The marketers or researchers, who understand the CDP model and the influential factors might predict consumers’ decision, and persuade consumers to purchase or at least comprehend the reason of their selection. In the first stage, consumers would like to fulfill their needs for solving a problem. Their memories, environment, and their individual differences influence their needs. When they are faced with the same problem that occurred before, they would instantly know how to solve that problem. This drives or forces them to purchase a product, which they know have assisted them and have provided solutions to their problems. In relation to this is the fact that the influence of the environment and individual differences are bases for product purchasing, such that their decisions will be based on important factors, such as culture, social class, personal influences, family, and situation. The influences on individual differences include consumer resources, motivation, knowledge, attitudes, and personality.
Searching and gathering information is the next progress after the need for a product or service is identified. Two sources of information can be used, namely, internal and external sources.
An internal source includes the memory or experience of a consumer, while external information or sources may include the information shared by family, friends, colleagues, and the media. These external sources could be grouped into two, which include the marketer and the non-marketer external sources. Marketer external sources provide persuasive information that comes from advertising, salespersons, and promotion, which can be used in order to gain benefit for the company. On the other hand, consumers seem to pay more attention to the other external source, the non-marketer external source. An example of such a source includes the recommendations from family, friends, colleagues or even from the media, such as consumer reports. Besides, (2001) included the information processing, which compose of exposure, attention, comprehension, acceptance, and retention in this type of external source as well.
After data collection and gathering, consumers evaluate them for the purpose of selection. At this stage, consumers compare and contrast between products or services to make their decision. Nonetheless, the criterion that every consumer bases their decision upon varies, and termed as the evaluative criteria. Blackwell (2001) emphasized that the effect of the environment and individual differences influence this information at the evaluative stage. “Salient attributes” are the most important attributes when making a sound choice. However, most product or service providers attempt not to make this kind of attributes so much different. Hence, consumers are forced to rely on “Determinant attributes” which is less important attribute than salient attributes, in order to make easier decisions.
In the event that customers are already decided, they are still faced with two issues, mainly, the location in purchasing the product or service, and the exact product or service to purchase. In this aspect, the roles of salespersons, product displays, media becomes very influential. Even though consumers have a strong intention of buying a particular brand at a particular store or location, their decisions may change at this stage. For example, one customer intends to purchase a specific Brand A, but during the actual purchase, the customer makes a discussion with a salesperson and finds out that a particular Brand B is better or much more interesting. Eventually, the customer may decide to purchase Brand B over Brand A.
In relation to this is the discussion of the last three stages of the decision-making process, namely, consumption, post-evaluation, and divestment, and serves to be the conclusion for the literature review. Consumption of the product directly affects the post-evaluation stage, such that positive or negative effects are not dependent on the product itself, but the way customers utilize or maintain the product. In some instances, emotion plays a part in the post-evaluation stage as well, as customers use their feelings and emotions in evaluating the products’ perceived usefulness. Positive effect results to satisfaction, which reflects repurchase behavior. On the other hand, dissatisfaction produces negative effects, which are retained in the memory of customers, and reconsidered for the next purchase. However, in this stage, “cognitive dissonance” or the feeling of uncertainty of customers regarding a product they have purchased may occur, particularly in the matter of pricing, quality must be compensated. The last stage of CDP model is divestment, which consist of outright disposal, recycling, or remarketing. The customers still have to make their decisions for this stage and that decisions affect their repurchase behavior in some ways. For example, when purchasing a car, people could think about selling it after few years of usage, so instead of spending large amounts with new cars, they prefer secondhand cars to the new one.
The interest in the study regarding the factors that influence restaurant-choice has been developed in recent decades. In 1962, Becknell and Maher identified the main criteria to select a food retailer, which include food quality, cleanliness, pricing, service, and unique features. (1979) also mentioned fast-food criteria that influence choice, such speed of service, variety of menu, popularity with children, cleanliness, convenience, taste of food, and price. However, these two studies do not assist marketers in understanding the factors on how consumers choose a restaurant. Restaurants-choice research was started to support the study of (1981) regarding restaurant advertising. In addition, (1981) concluded that the aspect of food is the most important factor for restaurant choice, which was also confirmed by (1992) and (1997). Yet, (1981) still mentioned that when consumers made the restaurant choice, they seemed to process “the bundle” of factors or “total-benefit” factors instead considering the single criteria
The role of dinner’s occasions was revealed by (1987), where the ranking of restaurant’s feature are not stable, but varied depending on occasions. In this study, five features were given consideration, including the price, service, atmosphere, liquor license, and quality of food in four occasions, namely family occasions, intimate occasions, celebrations, and business lunches. Liquor license was the most important factor for intimate occasions, and celebration dinner, but for business lunches and family dinners, liquor license ranked third. In support of this study is the study done by (1992), (1992), and (1999), which supported the role of occasions in choosing a restaurant. (1992) stated the restaurant choice model, and identified the important attributes influencing restaurant choices in the United Kingdom. The study emphasized that food aspect was the most important criteria in choosing a restaurant ( 1997, 1981, 1992). Likewise, (1997) studied restaurant segmentation in Hong Kong, and confirmed that food aspect was the most important factor for Hong Kong’s consumers as well. Both (1997) and Auty (1992) agreed that in Hong Kong and in the United Kingdom, age and income influences the segmentation of the market. Age and income factors have something in common which reflected certain content For example, young people in school age have a limit in their income, so are not the type of individuals who would dine at expensive restaurants. In relation to this is the study done by (1997) who examined whether or not service-guarantee policy affected decision-making in restaurant choice, and found out the unexpected result, stating that service guarantee did not have any effect on restaurant choice.
While there were numbers of restaurant studies, mostly only focus on the factors influencing selection of a restaurant. In 1962, the study of was the first report on the explicit factors affecting the selection of food retailers, and these include food quality, service, cleanliness, unique features, and price. In addition, (1979) reported on the criteria affecting the selection of fast-foods, namely, speed of service, variety of menu, popularity with children, cleanliness, convenience, taste of food, and price. However, these two studies did not explore exactly how consumers choose a restaurant. Until in (1981) made a study entitled, “Restaurant Advertising: Appeals and Consumers’ Intension”, which emphasized the factors that affect restaurant selection. Since then, several studies regarding restaurant selection have been conducted. Some of these studies include the study by (1987), by (1992), by (1992), by (1993), by (1997), and by in 1997, wherein plenty of factors regarding restaurant selection were analyzed in different aspects. Some of these aspects include food quality, pricing, atmosphere, location, service, type of food, menu variety, and cleanliness. Moreover, the ranking of these attributes or aspects varied, depending on the type of occasion the customer requires (1979; 1981;1987; 1992; 1992; 1997). More often than not, occasions, such as family/popular meal, celebration, business, social, and convenience/quick meal dominated the choice of customers. For example, (1997) presented that in convenience or quick dinning, location was the most important factor, while it ranked fourth place in terms of social dinning. Interestingly, some studies also reported that there were discriminating factors in the selection of restaurants as well (1997). According to (1997), although food aspect was the most important factor, other factors such as ambiance and price of food also play a vital role in choosing a particular restaurant. Hence, it can be implied that in selecting a restaurant, consumers hardly considered only single criteria, and recognize “the bundle of benefits” (1981; 1971).
However, keeping the factors and attributes in mind may not completely predict the customers’ decision making for selecting a restaurant. (1992) presented a decision-making process in terms of selecting a restaurant, and is shown in Figure 5. In this process, the most important influencing factor for choosing a restaurant was the occasion, and based on the occasion, consumers would generate choice variables. From this, they initiate an evoked set of restaurants in their mind. Segmentation is yet another influencing factor regarding the choice variable, and the determinant choice variable directly affects the choice of restaurant. This attribute is used to finalize restaurant selection, although it might not be the most important factor. For example, in order to choose a restaurant, atmosphere acted as the determinant variable to determine the choice, although the type of food and its quality are the two most important factors. Furthermore, (1992) also explained that the choice of determinant variable might depend on the perceptions of consumers. Most consumers perceive restaurants as having the same aspects regarding the food aspect, so they consider other factors, which are less important in their decision-making process.
Figure 5: Decision Making Process (1992)
Source: Influence on a consumer choice of restaurant, (1992)
Not all studies agreed with such results mentioned. One of these studies is done by (1992) who found that reputation, and employees’ manner were the key factors in selecting a restaurant. In addition, price had positive and negative roles in restaurant selection. The researcher further summarized that consumers seem to focus from personal sources of information such as experience, and word-of-mouth more than non-personal sources such as location, advertising, price, and physical facilities. Nevertheless, Pedraja (2001) argued that external information including advertising and information provided at the premise were drawing more attention from consumers. With this, it can be understood that advertising becomes a vital tool in making decisions, whereas interpersonal source was employed less in the high-income family ( 2001). Similarly, (1999) agreed that advertising played more important role as a source of information in decision-making for choosing a restaurant.
Moreover, (1993) represented the three aspects of decision making in services. First is the small size of evoked set, which consisted of only 1-2 service-providers. Next, consumers evaluated each provider with only three attributes. Lastly, consumers perceived risk of purchase in quality and financial matters respectively. None of them perceived time and self-image risk. In addition, (1993) pointed out that in consumers’ decision-making process, they seem to decrease service providers as small number as they can. Therefore, they could consider seriously only two providers. (2001) suggested that external information would be utilized increasingly for choosing a restaurant for consumers. Advertising and the information at the premises were mainly such external information.
The subject of the current study is identifying the factors in choosing restaurants for dinner in a specific context, such as welcoming visitor or guest on personal occasions. The unique characteristic of this study is that while choice modelling and consumer decision-making process are predominantly investigated as a cognitive process, choosing a restaurant and providing treat to visitor involves strong emotional component which make impact upon this process.
One of the limitations of most studies regarding the restaurant field is due to the small number of respondents ( 1981,1987, 1992, 1992, 1999) participating in the study. The second weakness or limitation of such studies includes the unrealistic picture in the decision-making process of consumers regarding their choice of restaurants because of an out-of-date method of data collection. Third and last limitation is the fact that researchers only utilize the cognitive effects of the decision-making process, which reflect the decision of only one side of the coin.
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