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Nowadays, the restaurant business in Vietnam has shown dramatically growth, driven by not only famous foreign brands, but also local brands. In the last decade, Vietnamese people have invested heavily in the market and are predicted to continue to do so, mainly driven by increased spending, rapid urbanization and growth of the middle-class population. According to Decision Lab (a market research firm that based in Ho Chi Minh City), the out-of-home consumption for F&B, are divided into a number of segments, of which full-service restaurants and quick service restaurants lead the group at 36%. Local brands offering Vietnamese cuisine arealso a tough competitor to the global food chain.In recent years, foreign fast food chains have underperformed and slowed down expansion plans due to the consumer preferring the local dishes and affordable prices. La Vong is one of the biggest Vietnamese restaurant chains. In 2013, the company simultaneously opened its chain of 7 restaurants in Hanoi and since then it has become a famous destination for eating out and party catering services. With relentless efforts, La Vong has achieved remarkable results in terms of revenues. Specifically, the total revenues in 2014, 2015, 2016, 2017 were VND 16.8 billion, VND 17.4 billion, VND 15.1 billion and VND 18.3 billion respectively. In this situation of restaurant business in Vietnam, the author identified several rationales for conducting the thesis as below: Firstly, the author has responsibility as F&B Marketing Manager of La Vong Group. So, a thorough understanding of factors that have significant impact on customer satisfaction is very useful in guiding manager to design strategies and deliver the right offering. Secondly, La Vong has not officially conducted customer satisfaction research. Understanding the role of customer satisfaction and its impact on customer loyalty, thecompany shall have evidences that help make right decisions to increase the market share of La Vong in the F&B industry. Thirdly, though best known for its good dishes, it can be a struggle for La Vong to attract value-seeking customers whenever a new restaurant opens in the vicinity. Because people like new things and restaurants are no exception. The restaurant business is highly competitive. New competitors enter the market fairly regularly to steal existing establishment’s clients. Therefore, managers need to find appropriate marketing plan to increase customer satisfaction, build customer loyalty and adopt strategies to beat the restaurant competition without lowering profits.
NATIONAL ECONOMICS UNIVERSITY NEU BUSINESS SCHOOL NGUYEN THI BICH NGOC FACTORS IMPACTING ON CUSTOMER SATISFACTION TOWARDS LA VONG’S RESTAURANT CHAIN MASTER OF BUSINESS ADMINISTRATION THESIS HANOI - 2018 NATIONAL ECONOMICS UNIVERSITY NEU BUSINESS SCHOOL NGUYEN THI BICH NGOC FACTORS IMPACTING ON CUSTOMER SATISFACTION TOWARDS LA VONG’S RESTAURANT CHAIN MASTER OF BUSINESS ADMINISTRATION THESIS SUPERVISOR: ASSOC.PROF.DR TRAN THI VAN HOA HANOI - 2018 ACKNOWLEDGEMENT I cannot accomplish this thesis without valuable supports of my supervisor, customers and managers of La Vong restaurant chain First, I would like to send my grateful expression and sincere thanks to my supervisor – Assoc Prof Dr Tran Thi Van Hoa, who is very patient and supportive while I am completing the thesis by giving me a lot of guidance and contributive comments Second, I would love to express my warm thanks to customers and managers of La Vong restaurant chain, who spent their value time on discussing with me and providing me a lot of useful information Third, I want to spend my thanks and gratitude to my family who supported me a lot during my master course TABLES OF CONTENTS ABBREVIATION CRM EB EFA F&B FQ KMO L P RD VND VNDm Customer Relationship Management Employee’s behavior Exploratory factor analysis Food and Beverage Service Food quality Kaiser-Meyer-Olkin Location Price Restaurant decoration Vietnam Dong Vietnam Dong million LIST OF TABLES LIST OF FIGURES EXECUTIVE SUMMARY Nowadays, restaurants are cropping up like swarms of locusts everywhere, and the number of establishments is growing rapidly over the years The impact of globalization leads to the increase in number of tourists and expatriates, and restaurants have become a popular destination for dining as well as discussing business However, the restaurant industry is becoming highly competitive Therefore, the author decided to choose topic “Factors impacting on customer satisfaction towards La Vong’s restaurant chain” for research in this thesis The purpose of conducting this research is to achieve objectives: (1) to find out the factors impacting on customer satisfaction towards La Vong’s restaurant chain; (2) to analyze the impacts of these factors on customer satisfaction; (3) to provide recommendations to improve customer satisfaction and revisit To obtain these objectives, the author used both quantitative, and qualitative methods In quantitative method, survey questionnaires were distributed to over 200 customers who used serviced at La Vong’s restaurants Through the survey, factors impacting customer’s satisfaction were identified In the qualitative method, in-depth interviews were conducted to better understand restaurants condition and customer insight After the research, some main findings were figured out: Target consumers are (1) female, (2) over 21 years old, (3) with salary over VND 10 millions/month, (4) have high level of education, (5) prefer eating-out because of entertainment or no need to cook, and (6) usually go out to eat one to three times per month Essential elements that make customers feel satisfied are: (1) The dishes are tasty and delicious (2) Staffs are kind, courteous (3) The location of restaurants offers easy access and convenient parking (4) The price is correct as announced, not higher than that offered by competitors and is more attractive because of added incentives However, there are some factors that customers have not satisfied, namely (1) Architecture is not unique and impressive (2) The food has not been presented well and the dishes have not been served hot in big party (3) In special holiday or crowded party, customers’ orders have not been processed quickly and error-free, and (4) The restaurant has not focused more on decorating and investing in the ambiance and decoration Based on these findings, author proposed relatived recommendations for La Vong to: (1) Improve restaurants design, (2) Keep food warm for big party, (3) Improve professional performance of staffs, and finally (4) Improving the ambiance of the restaurants The author sincerely hopes that the results of this research will help managers have better understanding of restaurant’s customers Furthermore, they can use this helpful information to adjust the business to fit customers’ needs more accurately 10 CHAPTER 1: INTRODUCTION 1.1 Rationale Nowadays, the restaurant business in Vietnam has shown dramatically growth, driven by not only famous foreign brands, but also local brands In the last decade, Vietnamese people have invested heavily in the market and are predicted to continue to so, mainly driven by increased spending, rapid urbanization and growth of the middle-class population According to Decision Lab (a market research firm that based in Ho Chi Minh City), the out-of-home consumption for F&B, are divided into a number of segments, of which full-service restaurants and quick service restaurants lead the group at 36% Local brands offering Vietnamese cuisine are also a tough competitor to the global food chain In recent years, foreign fast food chains have underperformed and slowed down expansion plans due to the consumer preferring the local dishes and affordable prices La Vong is one of the biggest Vietnamese restaurant chains In 2013, the company simultaneously opened its chain of restaurants in Hanoi and since then it has become a famous destination for eating out and party catering services With relentless efforts, La Vong has achieved remarkable results in terms of revenues Specifically, the total revenues in 2014, 2015, 2016, 2017 were VND 16.8 billion, VND 17.4 billion, VND 15.1 billion and VND 18.3 billion respectively In this situation of restaurant business in Vietnam, the author identified several rationales for conducting the thesis as below: Firstly, the author has responsibility as F&B Marketing Manager of La Vong Group So, a thorough understanding of factors that have significant impact on customer satisfaction is very useful in guiding manager to design strategies and deliver the right offering Secondly, La Vong has not officially conducted customer satisfaction research Understanding the role of customer satisfaction and its impact on customer loyalty, the company shall have evidences that help make right decisions to increase the market share of La Vong in the F&B industry 10 62 Additionally, well-trained staffs translate to more satisfied consumers Therefore, it is important to train staff in customer service techniques There are some suggestions below: - Make sure that all staffs undergo the required training program, and they are aware - of expectations that clients expect from the restaurants Require staffs to speak with respect and courtesy, especially when communicating - with customers Teach staffs behave friendly (especially smiling during service encounters) and not express their feeling of fatigue A lot of scholars also confirmed that staff’s smiling has a - significant impact on customer pleasure, arousal and satisfaction Staffs are not allowed to talk to each other when customers present They are - encouraged to keep their own private conversations in the back-room areas Help staffs improve their conversation and listening skills to become a skillful waiter - They need to speak clearly and speak to all consumers with the same polite tone Encourage team of wait staffs to be patient with consumers, and make them feel - comfortable Customers should never be rushed off due to waiters wants to turn the table Finally, after taking customer’s orders, the managers must highlight to waiters that it is necessary to check up on consumers at least once during their meal to ensure they are truly satisfied For instance, consumers may order extra dishes, beverages, dessert, or they may complain about something that needed fixed urgently 4.2.4 Improving the ambiance of the restaurants It is important to create a unique environment to attract customers, keep them returning and spending money It means creating surroundings that make consumers feel comfortable and excited while eating Below are some suggestions to implement this purpose: Floor layout: Rearrange tables to allow staff to move freely from the eating area to the kitchen area The floor layout need to pack in enough customers to maximize profit, while at the same time providing customers privacy and making them feel comfortable This also helps avert accidents and allows waiters and waitresses to get to customers faster Restaurant themes: It is necessary to create a theme for restaurants The goal 62 63 is to transform the restaurant from ordinary building into a new world, and help customers to escape the mundane The theme should be saturated in everything, from inside design to the name of the dishes on menu It also defines what music is played, what decorative items are used, etc because customers always like the feeling that they are travelling somewhere to experience something new Music and ambient noise: Some scholars pointed out, background noise influence customer’s behavior It also can increase table turnover by making people eat faster Additionally, volume should fit the size of the room, so customers don’t have to strain to speak over the noise Especially, the music needs to fit the theme, and sets the mood of restaurant in a powerful way Besides, it drowns out the sound from other table's conversation, and gives customers a feeling of privacy For instance, a fine dining restaurant should play discrete, subdued and calming music to enhance the meal Meanwhile, more casual restaurants can play louder and faster music to create a comfortable atmosphere Color, lighting and other little details: It is necessary to pay attention to details, such as lighting and color The lighting in restaurants should makes customers feel comfortable while eating When the sun is shining, lighting should be brighter to fit the energetic atmosphere of the day When the day turns to night, 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Part 1: Demographic information Please answer following questions: 69 What is your gender? o Male o Female What is your age? o Under 21 o From 21 to 30 o From 31 to 40 o Over 40 What is your monthly income? o Under VND million o From VND million to 15 million o Over VND 15 million What is your highest level of education? o Less than high school degree o High school degree o Bachelor's degree o Professional Master's Degrees How often you visit one of La Vong restaurants each month? o Rarely (0 – times) o Sometimes (2 – times) o Fairly occasionally (5-9 times) o Very occasionally (over 10 times) What is your reason for eating-out? o No need to cook o Entertainment o Business purpose o Special occasion Part 2: Assess factors influence Customer Satisfaction towards La Vong’s restaurants Rate the following variables by marking tick according to the satisfaction level (where is the highest and is the lowest): Strongly disagree Disagree Neutral Agree Strongly agree Questions FOOD QUALITY The dishes are served hot The quality of ingredients is excellent, very fresh The food is so presented The dishes are tasty and delicious Menu has a large variety of items to choose EMPLOYEE’S BEHAVIOUR Staffs are kind, courteous Staffs are helpful and good at handling problems Your orders were processed quickly and error-free The staffs look professional at all times (their appearance and communication skills, such as: wearing proper uniform and spoke clearly) RESTAURANT DECORATION Architecture is so unique and impressive The outside environment of the restaurant is kept clean The interior space of the restaurant is kept clean 70 5 2 3 Questions Interior layout creates intimate and comfortable eating spaces for customers Lightning design is reasonable, and gives pleasurable effects to the customer’s emotion Pleasant air creates fresh and comfortable environment surrounding restaurants (do not have experience with bad odour) Restaurants are kept away from disturbing noises LOCATION The location of restaurants offers easy access The location of restaurants offers convenient parking PRICE The price is correct as announced The price is not higher than that offered by competitors The price is more attractive because of added incentives (such as discount for group, or gift for regular customers ) Overall assessment on customer satisfaction towards La Vong restaurants Overall, I feel satisfied with my experiences in La Vong’s restaurants I would comment positively about La Vong’s restaurants I would like to return in one of La Vong’s restaurants, and I decided that they are my top choice I would recommend La Vong’s restaurants to my acquaintances and friends THANK YOU FOR YOUR COOPERATION! 71 APPENDIX 2: RESEARCH RESULTS Total Variance Explained in KMO analysis Total Variance Explained Extraction Sums of Squared Rotation Sums of Squared Loadings Loadings % of % of Initial Eigenvalues % of Cumulative Total Variance Cumulative Component Total Variance % 4.464 21.259 21.259 4.464 21.259 21.259 4.436 21.125 21.125 3.357 15.988 37.246 3.357 15.988 37.246 3.330 15.857 36.982 2.995 14.264 51.510 2.995 14.264 51.510 2.845 13.549 50.531 2.086 9.933 61.443 2.086 9.933 61.443 2.257 10.750 61.281 1.657 7.889 69.332 1.657 7.889 69.332 1.691 8.051 69.332 730 3.477 72.809 611 2.909 75.719 592 2.820 78.539 543 2.584 81.123 10 475 2.262 83.385 11 454 2.161 85.546 12 401 1.910 87.456 13 389 1.851 89.307 14 367 1.747 91.055 15 348 1.656 92.711 16 326 1.551 94.261 17 286 1.361 95.623 18 253 1.207 96.829 19 246 1.170 97.999 20 226 1.076 99.075 21 194 925 100.000 Extraction Method: Principal Component Analysis 72 % Total Variance Cumulative % EFA analysis – tem total statistic Item-Total Statistics Scale Mean if Item Deleted Scale Variance if Corrected Item- Cronbach's Alpha Item Deleted Total Correlation if Item Deleted FQ1 12.330 17.006 721 810 FQ2 12.070 17.151 667 801 FQ3 12.460 16.672 704 806 FQ4 11.985 16.246 714 804 FQ5 12.115 17.258 649 809 EM1 8.835 9.475 665 801 EB2 8.980 9.537 735 811 EB3 9.325 9.316 734 810 EB4 9.250 9.535 700 810 RD1 17.885 36.836 693 811 RD2 17.520 34.331 759 807 RD3 17.530 34.934 745 809 RD4 17.730 35.957 726 801 RD5 17.810 35.672 776 807 RD6 17.700 34.925 651 811 RD7 17.545 35.455 613 806 L1 3.165 1.455 641 741 L2 3.135 1.424 641 723 P1 6.270 5.324 656 784 P2 6.290 4.609 701 737 P3 6.220 4.554 690 749 73 EFA of each dimention • Food quality Reliability Statistics Cronbach's Alpha N of Items 868 • Employee’s behavior Reliability Statistics Cronbach's Alpha N of Items 861 • Restaurant decoration Reliability Statistics Cronbach's Alpha N of Items 899 • Location Reliability Statistics Cronbach's Alpha N of Items 781 • Price Reliability Statistics Cronbach's Alpha 824 74 N of Items Rotated component matrix Rotated Component Matrixa Component RD5 RD2 RD3 RD4 RD1 RD6 RD7 FQ1 FQ4 FQ3 FQ2 FQ5 EB2 EB3 EB4 EB1 P2 P3 P1 L2 L1 846 834 821 804 776 753 715 825 820 818 790 784 860 854 833 806 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations 75 874 853 840 905 889 Model summary Std Error of the Model R R Square Adjusted R Square Estimate a 897 758 736 357 a Predictors: (Constant), FOOD QUALITY, RESTAUTANT DECORATION, EMPLOYEE’S BEHAVIOR, PRICE & LOCATION Coefficients Coefficientsa Unstandardized Standardized Coefficients Coefficients Model B Std Error Beta (Constant) 1.498 482 RD_TB 823 068 072 FQ_TB 062 066 083 EB_TB 381 067 379 P_TB 030 064 032 L_TB 059 061 064 a Dependent Variable: CUSTOMER SATISFACTION 76 t Sig 9.323 7.338 11.950 5.679 1.473 3.965 000 000 043 000 637 036