Factors Affect Customer Trust for Restaurant in Viet Nam

RESEARCH HYPOTHESIS & RESEARCH MODEL 3.1.Relationship between food quality and customer trust 3.2.Relationship between service quality and customer trust 3.3.Relationship between restaur

Factors Affect Customer Trust for

Restaurant in Viet NamConsultant: DR PHAM THI LIEN

INFORMATION OF THE GROUP LEADER

− Program: International business

− Address: Dac So Village, Hoai Duc District, Hanoi City

− Phone no.: 0982752015

− Email: hoailinhlinh176@gmail.com

II Academic results (from the first year to now)

III Other achievements:

− Good 2nd grade scholarship, semester I, 2017-2018 school year

− Good 3rd grade scholarship, semester II, 2017-2018 school year

− Outstanding student, 2017-2018 school year

− Good 2nd grade scholarship, semester I, 2018-2019 school year

1.2.Research scope

1.3.Research objectives

1.4.Research design

1.5.Contribution of the research

1.6.The structure of the research

CHAPTER 2 LITERATURE REVIEW

CHAPTER 3 RESEARCH HYPOTHESIS & RESEARCH MODEL

3.1.Relationship between food quality and customer trust

3.2.Relationship between service quality and customer trust

3.3.Relationship between restaurant location and customer trust

3.4.Relationship between restaurant environment and customer trust

3.5.Relationship between brand reputation and customer trust

4.3.Data analysis procedure

CHAPTER 5 DATA ANALYSIS & HYPOTHESE TESTING

5.1.Descriptive analysis

5.2.Reliability of the instrument

5.3.T-Test and ANOVA result

5.4.Correlation & Regression analysis

CHAPTER 6 RECOMMANDATION & CONCLUSION

Restaurants are the remarkable industry in service and hospitality sector In order to

be sustainable development in this industry, restaurants must build trust for customers The study aims to illustrate the most influential and significant factors that

affect the customers’ trust in the restaurants By finding the most influential factors, the restaurants’ manager makes their effective strategies to get the maximum profit, the attraction of the customers This study is to examine the influences of food quality, service quality, restaurant location, restaurant environment, brand reputation to customer trust for restaurants in Vietnam A questionnaire-based survey was distributed to about 300 customers served at restaurants The data collected (197 valid questionnaires) were analyzed using SPSS 22.0 The findings demonstrated that brand reputation and restaurant environment have a positive influence on customer trust In light of the results of the study, it is that manager savvy the importance of brand reputation and restaurant environment for customer's trust to build appropriate strategies to help the restaurant develop sustainably.

Key Words: Food quality, service quality, restaurant location, restaurant

environment, brand reputation, customer trust4

CHAPTER 1 INTRODUCTION

1.1.Background to the research problem

Nowadays, the service industry is growing The sector accounts for a highproportion of the gross domestic product (GDP) of many industrialized countries.Service sector attracts more and more workers, creates more jobs, and makes a vitalcontribution to improving people's lives It brings a huge income for the economy.Therefore, service plays an important role in the economy

In which, the restaurant industry is a typical sector Under the changingenvironment and improving living standard, competition is more and more increasing.Organizations have realized that they are facing an expanding economic system withgrowing markets, and barriers to attracting more customers In order to effectively

operate restaurants, leaders had to understand the characteristics of the businessenvironment Among market factors, customer trust is extremely important A survey

of Golin & Harris showed that 39% of respondents said they would start or return toshopping, dealing with a company because of their trust or credibility of thatcompany; 53% the rest respondents said they would cease, cut or switch to dealingwith competitors when they felt concerned about the issue of trust While trust createsmany benefits for businesses, doubt or distrust causes no less loss

The market is on a huge competition, under those pressures, the quality factor isthe core, the necessary condition but not enough Enterprises need to makedifferentiation and impression by their own "mind" in brand value and products

1.2.Research scope

Our research focuses on restaurants in Vietnam because Vietnam is a developingcountry The economic growth is relatively stable and the service industry hasimportant roles in the economy According to the General Statistics Office of Vietnam(2018), economic growth in 2018 reached 7.08% compared to 2017 In which, theservice sector accounted for 42.7%, increased 7.03% compared with the previousyears The economic structure of Vietnam continues to shift positively according tothe trend of reducing the proportion of agriculture, forestry, and fisheries; increase theshare of industry, construction and service industry That is also the reason why theservice industry is concentrated to develop

Vietnam is a fledgling market and there are many opportunities to develop, butthere are still many challenges because of the variety of local dishes, widely sold atvery reasonable prices The competition in this sector is fierce and the level ofconsumption is high The restaurant sector attracts many domestic and foreigninvestors However, there are many famous brands in the market They are local andinternational firms To reduce the failures for new investors and attract morecustomers, they have to clearly understand the business environment, customer need,and customer trust

1.3.Research objectives

In line with the background and the scope of the study mentioned above, theobjectives of research are the following:

1. To examine demographic factors affects customer trust

2. To investigate factors affect customer trust for restaurant

3. To test the relationship between factors and customer trust

4. To identify the most significant factors affect customer trust

These general research aims are transformed into research hypotheses to solvedand explained in the design later in the study

1.4.Research design

This section introduces the research design for the study with full details provided

in chapters 2,3,4,5, and 6 Quantitative method used This research started withliterature review (Chapter 2) to clarify problem and to gain background informationabout the research problem Research hypotheses and research model (Chapter 3)generated from the literature review part By using the questionnaire survey, datacollected from customers in Vietnam This research did not target any specificobjectives to create diversity for results Data collection and data analysis show inchap 4 and 5 The survey data was analyzed by using SPSS 22.0 From the analysisresults, conclusion and recommendation proposed in chapter 6

1.5.Contribution of the research

This research should, therefore, make contributions as follows:

1. Establishing and testing a research model of factors (food quality, servicequality, restaurant location, restaurant environment, and brand reputation)affect customer trust

2. Testing the relationship among factors and customer trust

3. Exploring which factors have the most significant impact on customer trust Thus, helping management focuses on the important resources and capabilities ingaining profits while reducing wastage When understanding factors affects customertrust, the manager can build an appropriate strategy for the company to attract morecustomers and exist in the long run in the market

1.6.The structure of the research

This research provides insights on factors affect customer trust It divides into sixchapters, including an introduction, a literature review chapter, and three chaptersconcerning the study of the research and a recommendation & conclusion

Chapter 1 is introduction It provides information about research background,research scope, research objectives, research design, the contribution of the research,and the structure of the research.

Chapter 2 reviews literature review In this chapter, the theory of factors andcustomer trust Factors include food quality, service quality, restaurant location,restaurant environment, and brand reputation Definitions, elements/ perspectiveswere presented through reviewing previous studies

Chapter 3 discusses in detail the research hypotheses and research model Detailedresearch issues, related hypotheses and research questions with explanation areprovided They were established based on the literature review and the results ofprevious research After discussing the detailed research model, the development ofthe questionnaire and data collection processes are described

Chapter 4 is research method This chapter includes instrument, data collection,and data analysis procedure

Chapter 5 provides all research questions and hypotheses testing results Thischapter gives answers to the research problem from data analysis It includes steps inanalysis procedure (descriptive analysis, reliability of the instrument, T-Test andAnova results, and correlation & regression analysis)

Chapter 6 is the final chapter It provides a summary of results, recommendation,limitation and implication future research, and conclusion

CHAPTER 2 LITERATURE REVIEW

2.1.Food quality

Ryu and Han (2010) Namkung and Jang (2007) demonstrated that food qualitymust be evaluated the presentation, menu item variety, healthy options, taste,freshness, and temperature Good quality of food and beverages can influence trustand retaining the consumers who most probably enjoy having delicious food.According to Ryu and Han (2010), customers’ perceived food is more relevant todelicious, nutritious, and visually attractive of the food According to Andaleeb andConway’s (2006) study, food quality had a strong effect on the relationship betweenrestaurant consumers and the restaurant In many studies, food quality is rated as one

of the most essential determinants of consumers’ patron of the restaurant (Andaleeband Conway, 2006)

2.2.Service quality

Service quality was defined by researchers in many different ways Bitner, Bomsand Mohr (1994) determined service quality as the consumers overall impression ofthe relative inferiority or superiority of the organization and its services Gronroos(1984) also defined that service quality is the outcome of an evaluation process, wherethe consumer compares his expectations with the service he has received Servicequality is one of the important factors of consumer satisfaction and it will directlyimpact the organizational success especially in the service industry such as restaurantindustry (Tat et al, 2011) According to Akbaba (2006), service quality is the result of

a comparison established between the customers’ expectation about the service andtheir perception of the actual services or the way such services are being provided Inaddition, Ha and Jang (2010) suggested that the service quality provided by

employees is a fundamental and critical factor in the restaurant business Ha and Jang(2010) also stated that the customer will tend to revisit the restaurant when theyperceived a restaurant to be high quality of service Zeithamal, Berry, andParasuraman (1996) said that service quality was only one aspect of consumersatisfaction, and the measurement of consumer satisfaction includes other criteria.They encompassed product quality, the price or cost, and personal factors.

2.3.Restaurant location

Parsa, Gregory, and Terry (2010) demonstrated the success or failure of arestaurant can be influenced by the choice of location Location is a key factor and thesuccess of a location base on its physical site, and its surrounding demographics Inother words, a wonderful location depends on geographic, demographic, andpsychographic factors Any changes in geographic or demographic/psychographicfactors of a specific location could importantly influence the attractiveness of alocation Eze, Ejikeme and Ufot (2015) also asserted that a better location givesorganizations greater opportunities of attracting favorable environmentalopportunities, faster goal achievement, profitability, successful operations and overallgrowth, etc

2.4.Restaurant environment

Kotler (1973) illustrated that the physical environment such as atmosphere can bemore important than the product itself (e.g., foods and services) in purchasingdecision making in some situations

In many previous studies, researchers have identified the significant factors ofthe physical environment, such as décor and artifacts, spatial layout, and ambientconditions that are particularly appropriate to the service industry (e.g., Nguyen &Leblanc, 2002; Raajpoot, 2002; Wakefield & Blodgett, 1999) Therein, décor andartifacts contribute to the attractiveness of the physical environment (Wakefield &Blodgett, 1994); spatial layout refers to the arrangement of objects, such as furnitureand equipment, according to the needs of the service delivery process (Nguyen &Leblanc, 2002); ambient conditions are intangible background characteristics thatgenerally have a subconscious effect on customer perceptions and responses to theenvironment (Nguyen & Leblanc, 2002) These three factors have been frequentlyincluded in most research related to the physical environment and are the mostadequate dimensions of the physical environment for customer behavior study in

service settings (Nguyen & Leblanc, 2002; Raajpoot, 2002; Wakefield & Blodgett,1999)

2.5.Brand reputation

Brand is name, logo, trademark, and symbol of the firm It reflects the spirit andsoul of an organization Brand presents loyalty of end users After continuous usage ofbrand, consumers feel it as part of them (Aaker, 1991) Reputation meanstrustworthiness, integrity, and honesty It can be seen from past experience of the thirdparty’s trustworthiness, integrity, and honesty Brand reputation can be judged fromconsumer opinion, comments, estimation, and beliefs; if people are suggesting theusage of a brand then it is considered as a sign of good reputation

2.6.Customer trust

In business trust is viewed as one of the most relevant antecedents of stable andcollaborative relationships Researchers had established that trust is essential forbuilding and maintaining long-term relationships (Rousseau, Sitkin, Burt, & Camerer,1998; Singh & Sirdeshmukh, 2000) Morgan and Hunt (1994) stated that trust existsonly when one party has confidence in an exchange partner’s reliability and integrity.While defining trust Moorman, Deshpande, and Zaltman (1993) referred to thewillingness to rely on an exchange partner in whom one has confidence According toLau and Lee (1999), if one party trusts another part that eventually engenders positivebehavioral intentions towards the second party Sanchez-Franco (2009) showed thattrust is a psychological state which creates confidence of one person in anotherperson Trust builds when the customer has confidence in a service provider'sreliability and integrity (Kim, Kim, & Kim, 2009) In addition, trust makes customerscomfortable and in turn, increases the efficiency of relational exchange (Hyun, 2010)

In the restaurant industry, trust has been defined as a factor which determines thequality of the relationship between a firm and its customers (Hyun, 2010; W Kim,Lee, & Yoo, 2006; Meng & Elliott, 2008) Consumers' trust in service providers canhelp the maintenance of the long-term relationship (Gefen, 2000)

Customer’ trust has strong relationship with restaurant The brand is as theconsumer’s partner in a long-term relationship (Fournier, 1998) And trust is a keyvariable in the development of an enduring desire to maintain a relationship in thelong term, for example with a brand (Morgan and Hunt, 1994) Thus, trust of

customer plays important role to brand in general and restaurant in particular Itdetermines existence and development of brand/ restaurant.

 Previous researchers investigated factors affect customer trust through researchmodel as following:

Customer trust Food quality

 Table 2.1 shows some of the research works on this topic and the factorsinvestigated in those studies

Table 2.1 Previous research

1 Food quality 1. Ryu & Han (2010)

2. Ryu, Lee, & Kim(2010)

3. Saee, Javed, & Nawaz (2013)

4 Restaurant environment 1. Ryu & Han (2009)

2. Han et al (2009)

3. Kim et al (2008)

4. Namkung et al (2008)

5 Brand reputation 1. Han, Nguyen, & Lee (2015)

2. Aaker (1991)

3. Jin, Line, & Merkebu (2015)

6 Customer trust 1. Haghighi et al (2012)

2. Saeed, Javed, & Nawaz (2013)

CHAPTER 3 RESEARCH HYPOTHESIS & RESEARCH MODEL

Influence of food quality, service quality, restaurant location, restaurantenvironment, brand reputation on customer trust

3.1.Relationship between food quality and customer trust

The result from previous research found that food quality influences customer trust

in the luxury restaurant (Kim, Lee, and Yoo 2006) Trust usually related tocombination of brand and product attribute such as quality (Moorman, Deshpande,and Zaltman 1993; Morgan and Hunt 1994) According to Mohammad Haghighi, AliDorosti, Afshin Rahnama and Ali Hoseinpour (2012), the research also indicated thatfood quality has a positive impact on customer trust In another research, RashidSaeed, Sara Javed, Rab Nawaz Lodhi (2013) demonstrated that food quality has apositive influence on customer trust in the fast food industry of Pakistan

Hypothesis 1(H1): Food quality affects positively customer trust

3.2.Relationship between service quality and customer trust

In many researches, Akbar and Parvez (2009), Haghighi et al (2012), and Saeed,Javed, & Lodhi (2013) illustrated that service quality has significant effect oncustomer trust

Hypothesis 2(H2): Service quality affects positively customer trust

3.3.Relationship between restaurant location and customer trust

In the past, Saeed, Javed, & Lodhi (2013) found that restaurant location haspositive effect on customer trust

Hypothesis 3(H3): Restaurant location affects positively customer trust.

3.4.Relationship between restaurant environment and customer trust

Kotler (1973) indicated that atmosphere of place can be as much important asproduct itself In addition, another research showed that while the food and the servicemust be of acceptable quality, pleasing physical surroundings, such as décor, artifacts,layout, and music may determine, to a large extent, the degree of overall customersatisfaction (Han & Ryu, 2009) According to Saeed, Javed, & Lodhi (2013),restaurant atmosphere has not a direct impact on customer satisfaction but have oncustomer trust

Hypothesis 4(H4): Restaurant environment affects positively customer trust

3.5.Relationship between brand reputation and customer trust

Benjamin & Podolny (1999), Rindova et al (2005) shows that reputation hassignificant role in reducing the uncertainty stakeholders encounter when they evaluatefirms Moreover, high reputation can strengthen customers' confidence and reducerisk perceptions when they make judgment on firm’s performance and quality ofproducts or services (Keh & Xie, 2009) According to Morgan & Hunt (1994),confidence is an important factor in the creation of relational trust A good reputationsignals the seller's competence and/or goodwill (Campbell, 1999) Therefore, brandreputation affects positively customer trust

Hypothesis 5(H5): Brand reputation affects positively customer trust

3.6.Research model

According to all of the relationship studied above, the research model about factorsaffecting the customer trust is proposed as follow:

This research model can explain the relationship of food quality, service quality,location, environment and brand reputation with the trust of customers.

According to previous researches, all the factors in the model is expected to impactpositively to the trust of customers It includes in table 3.1 below

Table 3.1 Research hypothesis

1 H1: Food quality affects positively customer trust

2 H2: Service quality affects positively customer trust

3 H3: Restaurant location affects positively customer trust

4 H4: Restaurant environment affects positively customer trust

5 H5: Brand reputation affects positively customer trust

3.7.Measurement

In the study, there are seven variables, one of which is dependent and six areindependent The dependent variable is customer trust in the model Customer trust is

built on various factors In this study, customer trust was measured through sixfactors They are food quality, service quality, location, environment, brandreputation The six factors are the independent variable in the model which is a vitalelement for customer trust This study will assess the importance of these factors andhow they influence customer trust Table 3.2 below shows the sources of influentialfactors and customer trust items.

Table 3.2.

Variables, indicators and sources of questionnaire items

Food quality

1 The food was delicious

Kisang Ryu, Rin Lee, Woo Gon Kim(2010)

Hye-2 The food was nutritious

3 The restaurant offered a variety of menu items

4 The restaurant offered fresh food

5 The food presentation was visually attractive

6 The smell of the food was enticing

Service quality

1 Employees served me food exactly as I ordered it

Kisang Ryu, Rin Lee, Woo Gon Kim(2010)

Hye-2 Employees provided prompt and quick service

3 Employees are always willing to help me

4 Employees made me feel comfortable in dealing with them

3 This restaurant is located in a clean area

4 This restaurant is located in a convenient area in which the parking is available to customers

5 The restaurant is located in a visible place making it easy for others to see it

Restaurant

environment

 Decors and artifacts

Kisang Ryu and Heesup Han (2009)

1 Paintings/pictures are attractive

2 Plants/flowers make me feel happy

3 Ceiling decors is attractive

4 Wall décor is visually appealing

5 Colors used create a warm atmosphere

6 Furniture (e.g., dining table, chair) is of high quality

 Spatial layout

1 Overall, layout makes it easy for me to move around

2 Table/seating arrangement gives me enough space

3 Seating arrangement makes me feel comfortable

 Ambient conditions

1 Lighting creates a warm atmosphere

2 Background music is pleasing

And Jerusalem Merkebu (2015)

1 This brand is very prestigious

2 This brand has high status

3 This brand is very upscale

(2015)

2 I have confidence 4in this restaurant

3 I think this restaurant has high integrity

CHAPTER 4 RESEARCH METHOD

4.1.Instrument

A survey technique was used to identify the factors that affect customer trust forrestaurants Those factors are food quality, service quality, location, environment, andbrand reputation

Modifying the questionnaires used in previous researches and applying to the case

of Vietnamese restaurants, we decided to build a questionnaire with five points scalewas used ranging from 1=strongly disagree to 5=strongly agree The demographiccharacteristics of the respondents were collected such as gender, married status, age,and education level as personal information that all the respondents have to providebefore coming to the main part of the questionnaire

The main part began with the question of “Have you recently used services in arestaurant?” for ensuring the experiences of respondents are right and objective Some

of the respondents said no will not have to answer any questions then, if yes they willanswer all the questions related to the research There are 6 statements related to foodquality (tastes, nutrition, menu, hygiene, decoration, smell); 4 statements of servicequality (preciseness, promptitude, willingness of employees); 5 statements involvedlocation of the restaurant (busy area, accessible, hygiene and visibility); 14 statements

related to environment of the restaurant (focus on decors and artifacts, spatial layout,and ambient conditions), and 5 last statements of brand reputation ( focus on brandprestige and the perceived risk of customers).

4.2.Data collection

The population of this study is the people mainly come from Hanoi, some of themfrom many other cities around Vietnam and also it includes foreigners Data wascollected from the people of age diverse backgrounds and different level of education

to make the finding more generalizable Questionnaires were distributed 300 peoplefrom different walks of life Among which 260 were received and responded, in which

197 respondents said yes in the question of “Have you recently used services in arestaurant?” and continued conducting the survey

4.3.Data analysis procedure

The collected data was analyzed by SPSS software

First of all, Frequencies analysis was used to provide a general view of the data andgive a background of participants of the survey Then, Descriptive analysis should beconducted to see the mean of each factor and dependent variable, it can show us thelevel people agree with given statements in general, which one is the highest, whichone is the lowest Reliability is an indispensable part of the data analysis, whichillustrates the questions that are not reliable in the survey and likely to be eliminated

Next, we conducted the T-test analysis with variables of gender, married status andAnova analysis for independent variables of age, education level, which have morethan 2 groups to identify whether different groups in one variable have significantlydifferent impact on the trust in a restaurant Last, Correlation and Regression analysiswere appropriate to demonstrate clearly and detail how factors studied affect customertrust

CHAPTER 5 DATA ANALYSIS & HYPOTHESIS TESTING

5.1.Descriptive analysis

Table 5.1 Description of respondents’ profile

The result revealed that it is a wide gap between the number of female and their malecounterparts.

The respondents were not the same in terms of age From 18 to 25 years old,respondents have the highest quantity (N= 159), account for 80.7% 31- 40 group and41-50 group were followers with the same figure 12 respondents corresponding 6.1%.The age groups of 26-30 years old (N=8), under 18 years old (N=4) and over 51 yearsold (N=2) were recorded at 4.1%, 2%, and 1% respectively

Education level indicates that majority of the respondents are bachelor with 101participants corresponding 51.3% High school graduate and graduate degree were thefollowers with 45, 51participants respectively In which, high school graduateaccounts for 25.9% and graduate degree constitutes 22.8%

Married status shows that the respondents who are the single person are more thanthe married person From the table of data, we can see that 170 single people accountfor 86.3% of the total respondents The rest is 27 married people make up 13.7%

Table 5.2 Summary of the responses Items Strongly disagree Disagree Neutral Agree Strongly agree N/A

Table 5.3 Descriptive Statistics of measurement items

For the mean of variables, customer trust had the highest mean (M= 3.628) Foodquality and environment were the followers with M= 3.519, and M= 3.506respectively Service quality and location were recorded M= 3.491, M= 3.461respectively The last variable was brand reputation corresponding and M= 3.349

For the standard deviation of variable, brand reputation, environment, and customertrust were the three variables which had the lowest number with SD= 0.711, SD=0.792, and SD= 0.796 respectively After that, food quality and location were recordedwith SD= 0.871, SD= 0.991 respectively The last variable had the largest standarddeviation was service quality (SD= 1.032).

The minimum value of the variables was 1 The maximum value was 5.

5.2.Reliability of the instrument

Table 5.4 Summary for reliability analysis Variable Items Cronbach's Alpha Cronbach's Alpha if Item Deleted