CHAPTER 1

THE PROBLEM AND ITS SCOPE

INTRODUCTION

Rationale

Customers are the lifeblood of the business, without customers

the business will die. Thus, we need to take good care of our customers by

satisfying them with the quality of products and services that we offer to them.

Customer satisfaction plays a vital role in the success of business. Customer

satisfaction contributes to the success of the business. High-standard customer

service can win the clients’ hearts and eventually they will patronize your

product or services. Nowadays when social media play such an important role

in making decisions it’s crucial to keep an eye on a quality of customer service

you provide to maintain a good reputation in the market.

This study will focus on the customer satisfaction in one of the

leading fast food chain in the Philippines, the Jollibee Foods Corporation

specifically at Escario Street, Cebu City. Fast food chains need to maintain

good customer service to their customers since they are not just offering food

products but services as well. The emerging growth of fast foods in Cebu City

is observable that is why there is a need to study and determine the level of

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customer satisfaction to address certain issues or problems to develop

solutions.

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Theoretical Background

The study of Fornell, C. (1992) stated that many individual companies

and some industries monitor customer satisfaction on a continual basis, but

Sweden is the first country to do so on a national level.

The annual Customer Satisfaction Barometer (CSB) measures

customer satisfaction in more than 30 industries and for more than 100

corporations.

The new index is intended to be complementary to productivity

measures. Whereas productivity basically reflects quantity of output, CSB

measures quality of output (as experienced by the buyer).The author reports

the results of a large-scale Swedish effort to measure quality of the total

consumption process as customer satisfaction. The significance of customer

satisfaction and its place within the overall strategy of the firm are discussed.

An implication from examining the relationship between market share and

customer satisfaction by a location model is that satisfaction should be lower

in industries where supply is homogeneous and demand heterogeneous.

Satisfaction should be higher when the heterogeneity/homogeneity of demand

is matched by the supply. Empirical support is found for that proposition in

monopolies as well as in competitive market structures. Likewise, industries

3
in general are found to have a high level of customer satisfaction if they are

highly dependent on satisfaction for repeat business.

The opposite is found for industries in which companies have more captive

markets. For Sweden, the 1991 results show a slight increase in CSB, which

should have a positive effect on the general economic climate.

The study of Anderson, E. W., Fornell, C., & Lehmann, D. R. (1994).

Customer satisfaction, market share, and profitability discovered that there are

economic benefits to improving customer satisfaction? The findings support

a positive impact of quality on customer satisfaction, and, in turn, profitability.

The authors demonstrate the economic benefits of increasing customer

satisfaction using both an empirical forecast and a new analytical model. In

addition, they discuss why increasing market share actually might lead to

lower customer satisfaction and provide preliminary empirical support for this

hypothesis. Finally, two new findings emerge: First, the market's expectations

of the quality of a firm's output positively affects customers' overall

satisfaction with the firm; and second, these expectations are largely rational,

albeit with a small adaptive component.

Szymanski, D. M., & Henard, D. H. (2001) concluded that the growing

number of academic studies on customer satisfaction and the mixed findings

they report complicate efforts among managers and academics to identify the

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antecedents to, and outcomes of, businesses having more-versus less-satisfied

customers. These mixed findings and the growing emphasis by managers on

having satisfied customers point to the value of empirically synthesizing the

evidence on customer satisfaction to assess current knowledge.

Cardozo, R. N. (1965). An experimental study of customer effort,

expectation, and satisfaction. Results of a laboratory experiment indicate that

customer satisfaction with a product is influenced by the effort expended to

acquire the product, and the expectations concerning the product.

The study of Hallowell, R. (1996) on the relationships of customer

satisfaction, customer loyalty, and profitability. Illustrates the relationship of

customer satisfaction to customer loyalty, and customer loyalty to

profitability, using multiple measures of satisfaction, loyalty, and

profitability. An estimate of the effects of increased customer satisfaction on

profitability (assuming hypothesized causality) suggests that attainable

increases in satisfaction could dramatically improve profitability.

Bowem, J. T., & Chen, S. L. (2001) in his study on the relationship

between customer loyalty and customer satisfaction. Based on 564 completed

surveys from hotel guests, the authors found the relationship between

customer satisfaction and customer loyalty was non-linear. The authors use

the data to develop internal benchmarks for the hotel based on scores that were

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representative of loyal customers. The study makes use of the hotel’s database

to draw samples for both focus groups and a mail survey.

The study of Gordon H.G. McDougall (Professor of Marketing, School

of Business and Economics, Wilfrid Laurier University, Waterloo, Ontario,

Canada) revealed that core service quality (the promise) and perceived value

were the most important drivers of customer satisfaction with relational

service quality (the delivery) a significant but less important driver. A direct

link between customer satisfaction and future intentions was established. The

relative importance of the three drivers of satisfaction varied among services.

Specifically, the importance of core service quality and perceived value was

reversed depending on the service. A major conclusion was that both

perceived value and service quality dimensions should be incorporated into

customer satisfaction models to provide a more complete picture of the drivers

of satisfaction.

In the study of Luo, X., & Bhattacharya, C. B. (2006). Corporate social

responsibility, customer satisfaction, and market value. The authors found out

that in firms with low innovativeness capability, CSR actually reduces

customer satisfaction levels and, through the lowered satisfaction, harms

market value.

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 Oh, H. (1999). Service quality, customer satisfaction, and customer

value: A holistic perspective. International Journal of Hospitality

Management, 18(1), 67-82. The author proposes and tests an integrative

model of service quality, customer value, and customer satisfaction. Using a

sample from the luxury segment of the hotel industry, this study provides

preliminary results supporting a holistic approach to hospitality customers’

postpurchase decision-making process. The model appears to possess

practical validity as well as explanatory ability. Implications are discussed and

suggestions are developed for both marketers and researchers.

Smith, A. K., Bolton, R. N., & Wagner, J. (1999). A model of customer

satisfaction with service encounters involving failure and recovery. Journal of

marketing research, 356-372. Customers often react strongly to service

failures, so it is critical that an organization's recovery efforts be equally

strong and effective. The findings contribute to the understanding of

theoretical principles that explain customer evaluations of service

failure/recovery encounters and provide managers with useful guidelines for

establishing the proper "fit" between a service failure and the recovery effort.

Anderson, E. W., Fornell, C., & Mazvancheryl, S. K. (2004). Customer

satisfaction and shareholder value. Journal of marketing, 68(4), 172-185.

They find a positive association between customer satisfaction and

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shareholder value. They also find significant variation in the association

across industries and firms.

Anderson, E. W., Fornell, C., & Rust, R. T. (1997). Customer

satisfaction, productivity, and profitability: Differences between goods and

services. Marketing science, 16(2), 129-145. The objective of this paper is to

investigate whether there are conditions under which there are tradeoffs

between customer satisfaction and productivity. A review of the literature

reveals two conflicting viewpoints. One school of thought argues that

customer satisfaction and productivity are compatible, as improvements in

customer satisfaction can decrease the time and effort devoted to handling

returns, rework, warranties, and complaint management, while at the same

time lowering the cost of making future transactions. The second argues that

increasing customer satisfaction should increase costs, as doing so often

requires efforts to improve product attributes or overall product design. The

findings indicate that the association between changes in customer satisfaction

and changes in productivity is positive for goods, but negative for services. In

addition, while both customer satisfaction and productivity are positively

associated with ROI for goods and services, the interaction between the two

is positive for goods but significantly less so for services.

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 Shankar, V., Smith, A. K., & Rangaswamy, A. (2003). Customer

satisfaction and loyalty in online and offline environments. International

journal of research in marketing, 20(2), 153-175. The results are somewhat

counterintuitive in that they show that whereas the levels of customer

satisfaction for a service chosen online is the same as when it is chosen offline,

loyalty to the service provider is higher when the service is chosen online than

offline. We also find that loyalty and satisfaction have a reciprocal

relationship such that each positively reinforces the other, and this relationship

between overall satisfaction and loyalty is further strengthened online.

The study of Meuter, M. L., Ostrom, A. L., Roundtree, R. I., & Bitner,

M. J. (2000) describes the results of a critical incident study based on more

than 800 incidents involving SSTs solicited from customers through a Web-

based survey. The authors categorize these incidents to discern the sources of

satisfaction and dissatisfaction with SSTs. The authors present a discussion of

the resulting critical incident categories and their relationship to customer

attributions, complaining behavior, word of mouth, and repeat purchase

intentions, which is followed by implications for managers and researchers.

Levesque, T., & McDougall, G. H. (1996). Determinants of customer

satisfaction in retail banking. Points out that customer satisfaction and

retention are critical for retail banks, and investigates the major determinants

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of customer satisfaction and future intentions in the retail bank sector.

Identifies the determinants which include service quality dimensions (e.g.

getting it right the first time), service features (e.g. competitive interest rates),

service problems, service recovery and products used. Finds, in particular, that

service problems and the bank’s service recovery ability have a major impact

on customer satisfaction and intentions to switch.

McKinney, V., Yoon, K., & Zahedi, F. M. (2002). The measurement of

web-customer satisfaction: Online shopping provides convenience to Web

shoppers, yet its electronic format changes information-gathering methods

traditionally used by customers. This change raises questions concerning

customer satisfaction with the online purchasing process. Web shopping

involves a number of phases, including the information phase, in which

customers search for information regarding their intended purchases. The

purpose of this paper is to develop theoretically justifiable constructs for

measuring Web-customer satisfaction during the information phase. By

synthesizing the expectation-disconfirmation paradigm with empirical

theories in user satisfaction, we separate Web site quality into information

quality (IQ) and system quality (SQ), and propose nine key constructs for

Web-customer satisfaction. The measurements for these constructs are

developed and tested in a two-phase study. In the first phase, the IQ and SQ

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dimensions are identified, and instruments for measuring them are developed

and tested. In the second phase, using the salient dimensions of Web-IQ and

Web-SQ as the basis for formulating first-order factors, we develop and

empirically test instruments for measuring IQ and SQ-satisfaction. Moreover,

this phase involves the design and test of second-order factors for measuring

Web-customer expectations, disconfirmation, and perceived performance

regarding IQ and SQ. The analysis of the measurement model indicates that

the proposed metrics have a relatively high degree of validity and reliability.

The results of the study provide reliable instruments for operationalizing the

key constructs in the analysis of Web-customer satisfaction within the

expectation-disconfirmation paradigm.

Shankar, V., Smith, A. K., & Rangaswamy, A. (2003). Customer

satisfaction and loyalty in online and offline environments. International

journal of research in marketing, 20(2), 153-175. The study found out that

loyalty and satisfaction have a reciprocal relationship such that each positively

reinforces the other, and this relationship between overall satisfaction and

loyalty is further strengthened online.

Meuter, M. L., Ostrom, A. L., Roundtree, R. I., & Bitner, M. J. (2000).

Self-service technologies (SSTs) are increasingly changing the way customers

interact with firms to create service outcomes. Given that the emphasis in the

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academic literature has focused almost exclusively on the interpersonal

dynamics of service encounters, there is much to be learned about customer

interactions with technology-based self-service delivery options. In this

research, the authors describe the results of a critical incident study based on

more than 800 incidents involving SSTs solicited from customers through a

Web-based survey. The authors categorize these incidents to discern the

sources of satisfaction and dissatisfaction with SSTs. The authors present a

discussion of the resulting critical incident categories and their relationship to

customer attributions, complaining behavior, word of mouth, and repeat

purchase intentions, which is followed by implications for managers and

researchers.

Peterson, R. A., & Wilson, W. R. (1992). Measuring customer

satisfaction: fact and artifact. Journal of the academy of marketing science,

20(1), Self-reports of customer satisfaction invariably possess distributions

that are negatively skewed and exhibit a positivity bias. Examination of the

customer satisfaction literature and empirical investigations reveal that

measurements of customer satisfaction exhibit tendencies of confounding and

methodological contamination and appear to reflect numerous artifacts.

Implications and suggestions for research and practice are discussed.

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 Kandampully, J., & Suhartanto, D. (2000). Customer loyalty in the

hotel industry: the role of customer satisfaction and image. International

journal of contemporary hospitality management, 12(6), 346-. Loyalty of a

firm’s customer has been recognised as the dominant factor in a business

organization’s success. This study helps us extend our understanding of the

relationship between customer loyalty, customer satisfaction, and image. This

is of considerable interest to both practitioners and academics in the field of

hospitality management. The objective of this research is to identify the

factors of image and customer satisfaction that are positively related to

customer loyalty in the hotel industry. Using data collected from chain hotels

in New Zealand, the findings indicate that hotel image and customer

satisfaction with the performance of housekeeping, reception, food and

beverage, and price are positively correlated to customer loyalty.

Gustafsson, A., Johnson, M. D., & Roos, I. (2005). The effects of

customer satisfaction, relationship commitment dimensions, and triggers on

customer retention. Journal of marketing, 69(4), 210-21. In a study of

telecommunications services, the authors examine the effects of customer

satisfaction, affective commitment, and calculative commitment on retention.

The study further examines the potential for situational and reactional trigger

conditions to moderate the satisfaction–retention relationship. The results

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support consistent effects of customer satisfaction, calculative commitment,

and prior churn on retention. Prior churn also moderates the satisfaction–

retention relationship. The results have implications for both customer

relationship managers and researchers who use satisfaction surveys to predict

behavior.

Wallin Andreassen, T., & Lindestad, B. (1998). Customer loyalty and

complex services: The impact of corporate image on quality, customer

satisfaction and loyalty for customers with varying degrees of service

expertise. International Journal of service Industry management, 9(1), 7-23.

Based on theory from consumer behavior and cognitive psychology, the

purpose of this paper is to discuss and test corporate image and customer

satisfaction as two routes to customer loyalty. Based on data from 600

individual customers categorized as having high or low service expertise of

three companies within the package tour industry, a conceptual model is

proposed and tested empirically using structural equation modeling. The data

used in the study are included in The Norwegian Customer Satisfaction

Barometer. The paper concludes by claiming that for complex services,

corporate image and customer satisfaction are not two separate routes to

customer loyalty.

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 THE PROBLEM

Statement of the Problem

This study will determine the level of customer satisfaction in Jollibee

fastfood chain located at Escario Capitol site,Cebu City.

Specifically, it aims to answer the following questions:

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 1. What is the profile of the respondents in terms of:

1.1 Age;

1.2 Gender?

2. Why is it important to satisfy customers?

3. What is the effect of increase customer satisfaction on profitability?

4. What drives customers to be satisfied?

Significance of the Study

This study will determine the level of customer satisfaction of Jollibee

Fastfood at Escario Street, Cebu City and will hopefully projected to benefit

the following:

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Customers. This study can mostly help the customers so that they can

evaluate the quality of customer service at Jollibee and by this they can give

their feedbacks to improve the customer service.

Jollibee Fast-food Chain. This study will help the management of Jollibee

obtain data to make strategic decisions regarding future plans for building

good customer relationship and in satisfying the customers.

Service Crew. This study will help them improve their performance in

dealing with the customers so that the customers will be satisfied with the

services they offer.

Researchers. To be knowledgeable enough to know the level of customer

satisfaction. Also this will benefit the researchers to be aware of the possible

factors that affect the satisfaction level of the customers at Jollibee.

Future Researchers. This will help the future researchers to have prior

knowledge regarding the study and basis for future researches related to the

study.

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 RESEARCH METHDOLOGY

Research Design

The researchers will use the quantitative and qualitative research

approach to determine the level of customer satisfaction at Jollibee, Escario

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Street, Cebu City. Descriptive Method will be used to describe the

characteristics of a phenomenon being studied, and was also the fact finding

study with an adequate and accurate interpretation of the findings. It also gives

emphasis of what actually existed such as current situations, practices or any

current phenomena. At the same time, the researchers will conduct an

interview to validate the answers of the respondents in the questionnaire.

Research Environment

The researchers will conduct their research study at Jollibee Fast Food

Chain, Escario Capitol Site, Cebu City. Jollibee is the largest fast food chain

in the Philippines, operating a nationwide network of over 750 stores. A

dominant market leader in the Philippines, Jollibee enjoys the lion’s share of

the local market that is more than all the other multinational brands combined.

One of its branch is located at Escario, Capitol Site, Cebu City.

Research Respondents

The research respondents will be the selected customers who will dine

in at Jollibee Fast Food Chain specifically the branch located at Escario,

Capitol Site, Cebu City. They will contribute to the information needed in the

study.

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Research Instruments

Gathering of necessary data for the study will be done through a self-

made survey questionnaire to gather the data about the level of customer

satisfaction. In the preparation of the instrument, the requirements in

designing of data collection instrument were divided into two parts:

demographic questions and quantitative questions. The researchers will

provide a form of questionnaires-checklist to accommodate the formatted

views to the topics or issues.

Research Procedure

The researchers will create a researcher made survey questionnaire to

be validated by at least three experts and to be approved by the research

adviser. The researcher will then conduct a pre-test to at least ten percent of

the total respondents to enhance the validity of the survey questionnaire. The

approved questionnaires will be personally distributed and collected from the

respondents. The respondents will be given enough time to answer the

questionnaire and will be allowed to ask questions to the researchers for

further understanding with the certain questions. Then, after the data

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gathering, the survey questionnaires will be tabulated, presented, analysed and

interpreted to formulate a conclusion of the study.

DEFINITION OF TERMS

Customer – a person or individual who buy products or availed the services

of Jolibee.

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Customer Service - the assistance and advice provided by a company to those

people who buy or use its products or services.

Experts - a person who has a comprehensive and authoritative knowledge of

or skill in a particular area.

Pre-test – a test that is conducted before the actual survey will be made to

verify the items in the survey questionnaire.

Profitability - the degree to which a business or activity yields profit or

financial gain.

Quantitative Research – It is conclusive in its purpose as it tries to quantify

the problem and understand how prevalent it is by looking for projectable

results to a larger population.

Qualitative Research – a type of research that is dependent on the collection

of verbal, behavioral or observational data that can be interpreted in a

subjective manner.

Level of Satisfaction – Customer level of approval when comparing a

product's perceived performance with his or her expectations.

REFERENCES

https://www.marketing91.com/five-levels-of-customer-satisfaction/

https://www.jollibee.com.ph/about-us/

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https://blog.hubspot.com/service/how-to-measure-customer-satisfaction

https://pdfs.semanticscholar.org/51ae/dcbf86cc96f0789fcd52674c9db819c8

8378.pdf

https://journals.sagepub.com/doi/abs/10.1177/109467059800100103

http://www.temjournal.com/documents/vol2no4/Customer%20Satisfaction%

20Index%20%E2%80%93%20as%20a%20Base%20for%20Strategic%20M

arketing%20Management.pdf

https://pinnacle.allenpress.com/doi/10.1509/jmkr.47.1.28

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5025411/

23
APPENDICES

CURRICULUM VITAE

24
Name: Kimberly M. Gucor Name: Francine
Nicole J.
Age :18 Age: 17
Sex: Female Sex:
Female
Status: Single Status:
Single
Strand: ABM Strand: ABM
Address: Mabolo, Cebu City Address:
B.Rodriguez St. Cebu City
Birthdate: March 15, 2001 Birthdate:
September 13, 2001
(Name of School Graduated)
Elementary: Paril Elementary School Elementary: Mantalongon
Elementary School
High School:Mabolo National High Schoo
High School:Alcantara
National High School

25
Name: Domingo L. Alvarado Jr.
Age: 19
Status: Single
Strand: ABM
Address: Sibonga Cebu
Birthdate: January 14, 2000
(Name of School Graduated)
Elementary: Papan Elementary School
High School: Teodoro Dela Vega Memorial National High School

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 TABLE OF CONTENTS

Page
Title Page i
Table of Contents ii
List of Figures iii
Acknowledgement iv

Chapter
1 THE PROBLEM AND ITS SCOPE
INTRODUCTION
Rationale 1-2
Theoretical Background 3-15

THE PROBLEM
Statement of the Problem 16
Significance of the Study 17-18

RESEARCH METHODOLOGY
Research Design 19
Research Environment
Research Respondents 20
Research Instruments
Research Procedure 20 -21

DEFINITION OF TERMS 22
REFERENCES 23
APPENDICES 24
CURRICULUM VITAE 25-26

27
 THE LEVEL OF CUSTOMER SATISFACTION IN
JOLLIBEE FAST FOOD CHAIN AT ESCARIO STREET,
CEBU CITY, PHILIPPINES

A Thesis Proposal
Presented to the Senior High School Faculty
Of Asian Institute of Computer Studies
Cebu City, Philippines

In Partial Fulfillment
Of the Requirements of the Course
Practical Research I

By:

FRANCINE J. DUMADAPAT
KIMBERLY M. GUCOR
DOMINGO L. ALVARADO

March 2019

28