EFFECT OF WORD OF MOUTH

PUBLICITY ON RESTAURANT INDUSTRY

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Author name- Simran Agrawal

MBA Student Amity Business School,

Amity University

Dr. Prachi Trivedi, Assistant Professor,

Amity Business School, Amity University, Noida

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ABSTRACT

The quantitative study examines how word of mouth publicity affects restaurant industry.

The publicity can be negative as well as positive. The research is conducted through a sample

survey questionnaire on customer visits to a restaurant. A sample of 224 respondents has

been taken to collect the relevant information that would help reach a conclusion. The

sampling method used is simple random sampling. The information or views gathered with

the help of questionnaire gives an overall view of respondents’ behavior on listening to word

of mouth information on restaurants from family, friends and colleagues about service,

quality, ambience and staff behavior as well as their respective preferences. The conclusion

shows that word of mouth publicity plays a salient role in running restaurant industry as most

of the respondents seem to take the reviews of their family, friends and relatives before

making any dining decision to a particular restaurant.

KEYWORDS: Word of mouth, restaurants, publicity;

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CHAPTER 1

INTRODUCTION

1.1 Introduction

‘Word of mouth’ phrase suffices itself, in context of which, information is spread through people’s

mouth and not through the advertisements news and reports ("WORD OF MOUTH (phrase)

definition and synonyms | Macmillan Dictionary", 2020). Word of mouth is the information shared by

the customers with their family, friends and colleagues about their experiences on a visit to any place

or on the purchase of any commodity. Whenever a person decides to go out for having lunch or

dinner, most of the times they solicit the advice of friends and family for recommendations. 78% of

restaurant dinners are found to have people for on the basis of recommendations by friends and

family(bannister, 2018). Here talking of restaurant industry , the primary focus is on how word of

mouth information helps in improving the restaurant businesses. Publicity , wherein can be negative

or positive. Negative word of mouth publicity creates bad image whereas positive word of mouth

publicity creates goodwill which helps any business flourish. Word of mouth publicity plays the most

important role in hospitality industry which includes any food joints , travel , tourism , hotels etc.

Restaurant industry it is a commercial place where customers are being served with good food. There

are a variety of restaurants which are categorised as : cafeteria/staff canteen, these are small

restaurants near workplace and schools ; Pizzeria , these are particularly Italian restaurants which

mainly serve pizzas and pasta with few other starters ; Self-service restaurants , these are the

restaurants where customers self-serve the meals ; Food trucks , these are vehicles equipped with food

items such as ice creams, pizzas , other fast food items; Cafes ; these are small restaurants serving tea

and coffee along with other beverages and snacks ; etc . Restaurants provide tangible and intangible

services where tangible service includes all the items that adds to its structure such as furniture , staff ,

cutlery etc. and intangible service is the how the customers are being served from the moment

customers walk in the restaurant which counts in the polite , courteous and helping behaviour of the

staff. The chef getting the meal prepared is also an example of intangible service for customer as the

customer can only see the meal being served by the waiter and not the chef who prepared it.

Customers’ first walk -in into a restaurant and the services experienced leave an imprint on him about

that particular restaurant. Customers’ revisit to any restaurant is decided on the basis of experiences

he had in there ,where service and quality counts the most. SERVQUAL model by Zeithamal ,

Parasuraman and Berry is the most favoured instrument to evaluate service quality. This model is

used to do gap analysis of service quality performance against service quality needs of the customers.

As the SERVQUAL model analyses the gap between the former and the latter it is also called GAP

model. The five dimensions of the SERVQUAL model are RATER i.e Reliability , Assurance ,

Tangibility , Empathy and Responsiveness ("Understanding the SERVQUAL Model - THE

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Marketing Study Guide", 2020). The SERVQUAL model plays an important part in word of mouth

publicity. Word of mouth publicity is also influenced by individual characteristics such as gender ,

age which compel the customers to engage in negative or positive word of mouth (Moyal & Mishra,

2018).Word of mouth publicity cannot be confined to one or two factors when talking of restaurants ,

multiple factors such as ambience , cleanliness , staff service , food quality , types of customers

visiting that restaurant etc, club together which creates impact on the spread of positive and negative

word of mouth.

India is a food loving country with variety of cuisines. Earlier Indians were not fond of eating fast

food or in restaurants but over past few decades the restaurant industry in India has been growing at a

rapid pace and the growth is expected to continue. The Indian consumer is becoming increasingly

conscious of eating food at high-quality outlets ("the changing landscape of the retail food service

industry", 2018). The Indian restaurant industry is blessed with young , dynamic and diverse food-

loving consumer ("the changing landscape of the retail food service industry", 2018). With increase in

demand for restaurant food in Indian markets , online delivery services such as swiggy (founded in

2014) and Zomato(founded in 2008) came into force. Both swiggy and Zomato were doing great

business but in 2019 swiggy stopped being operational in Indian food service industry. These food

delivery services could do business only because of customer satisfaction. High customer satisfaction

gives positive word of mouth while low customer satisfaction tends to create negative word of mouth.

What is concluded from this is word of mouth publicity helps restaurant industry know about how

satisfied or dissatisfied the customer is and helps in making improvements for better customer service.

1.2 Purpose of the study:

The purpose of this study is to create satisfaction among customers on their visit to the desired

restaurant as satisfied customer means positive word of mouth publicity and also to know the factors

that cause dissatisfaction. The world we live in today is tangled with infinite trust issues making it

difficult to rely on anything and when it comes to any organization , the trustworthiness has dropped

to zero because of the ever increasing fraudulent activities in the current time frame. Talking of

restaurants , promoting them through banner advertisements or social media advertisements is not as

effective as word of mouth publicity be it positive or negative. People get influenced by what they

hear from their family and friends because they trust them , and accordingly create a perception on the

basis of that information. Word of mouth can help gain a competitive advantage specially when we

talk of restaurants as the intangible services of a restaurant can only be evaluated after their

consumption. The effort is to investigate the effect of word of mouth publicity on people and how it

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can help improve restaurant industry business by eradicating the factors which tend to create negative

publicity.

CHAPTER 2

REVIEW OF LITERATURE

2.1 WORD OF MOUTH(WOM):

Consumers’ purchase decisions are very likely affected by the Word Of

Mouth(WOM)communication. Positive or negative verbal communication between various groups

come under the umbrella of WOM(Ennew, Banerjee and Li, 2000).The rising urbanization in

Malaysia has led to the popularity and success of the Malay Upscale Restaurants especially in areas

like the Klang Valley. (Basri, Ahmad, Anuar and Ismail, 2016).The basic aim of the Malay Upscale

Restaurant research was to investigate how the verbal communication advertising was used by the

Malaysian Restaurants to elevate consumers’ dine in patterns, Food quality is considered as an

important element by a consumer while selecting a restaurant (Josiam & Monteiro, 2004).The

research was done using both primary as well as secondary data(journals, books, thesis, etc).Purposive

sampling method was used, wherein 300 respondents were surveyed through the questionnaire. The

data including food quality, physical environment quality, price and service quality was analysed

using Multiple Regression Analysis, Pearson Correlation Analysis, Reliability Test Analysis. The

results unveiled that consumers prioritized good physical environment over all the other factors,

including food quality to be the last. New consumers could only be attracted through word of mouth

by the old consumers, as per results. Limitations like surveying only a particular area apart from

various locations; using purposive sampling due to money and time constraints, were a part of

observation too.

Word of mouth was found to be essential for the promotion of administrations. In the restaurant

setting word of mouth had been inescapable. Food quality above all is attributed to be influential in

deciding a restaurant(Soriano, 2002) and is directly correlated with customer satisfaction(Mosahab et

al., 2010). The reason for this research paper was to have a glance at the variables that impact

customers’ universe of mouth (Moyal & Mishra, 2018). The methodology used was survey research

with the help of a questionnaire which consisted of Likert scale questions. Correlation analysis was

used. The questionnaire was also surveyed amongst 109 students. The results were examined using

client word of mouth information from Dinaping.com. From the results gathered of all the eateries the

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audits which did not give general rating were disposed . The eateries with atleast 10 surveys each

were examined which limited the investigation to1542 eateries and 168262 client surveys. The results

concluded that students had a more probable impact on positive or negative word of mouth than

others. Informal exchange of information had an imperative impact on expend buy choices (Moyal &

Mishra, 2018).

2.2 ELECTRONIC WORD OF MOUTH(eWOM):

Electronic word of mouth (eWOM) is defined as informal communication between non-commercial

communicators about a brand, organisation or service(Harrison-Walker, 2001).The purpose of the

study carried out on Indonesian Restaurant Industry was to investigate the effect of Consumer

restaurant experience(CREp) dimensions on eWOM motivations of consumers and their purchase

intentions based on eWOM (Bangsawan, Marquette & Mahrinasari, 2017).According to a host of

study , food quality has a significant impact on WOM and eWOM((Liu & Jang, 2009; Namkung &

Jang, 2008; Qu, 1997;Qin & Prybutok , 2008).Correlation between eWOM and purchase intention ;

CREp and eWOM; CREp and purchase intention were the three hypotheses used. Consumers who

dined at an Indonesian restaurant in the previous six months, engaging in eWOM, were surveyed,

capitulating 323 usable responses. Least squares regressions were used to find correlation among

variables. Results explicated that food quality and atmosphere drive impetus on eWOM, but service

does not, along with no significant relation of eWOM with purchase intention. A CREp dimension

alone cannot invoke positive dining decision. Only the Indonesian restaurant industry in the entire

country was studied, which accentuated as a limitation, furthering it with the fact that consumers don’t

visit the same restaurant frequently.

2.3 PHYSICAL ENVIRONMENT:

The research is to investigate the effect of restaurant environment on consumer behaviour. It had not

only been food and drinks that entice customers but also the restaurant environment. Self-

administered questionnaires were distributed to selected restaurants to collect primary data. These

questionnaires were given to the customers while they waited for the bill or when they were about to

leave so that they could give the overall review of the dining experience. The questionnaire measured

the customers’ perceptions of restaurant environment and their behavioural intentions. The

questionnaire was divided into four parts each containing Likert scale questions of five point scale

ranging from 1(strongly disagree) to 5(strongly agree). Part one of the questionnaire measured

customers’ perceptions of the restaurant environment , part 2 measured customers’ dining satisfaction PAGE 1

level, part 3 measured customers’ behavioural intentions and the last part elicited the relevant personal

information about the customers such as age , gender, education level, profession, income and

nationality. After the final survey all the responses were computed and summarised through graphs

and tables and the required statistical tests were used to generate the hypothesis ("A Research

Proposal: The Effects of Restaurant Environment on Consumer Behavior", 2015).

2.4 SERVICE QUALITY:

The research on service quality of restaurants was conducted in the Republic of Macedonia.

Service industry is the place where service quality has an indispensable role for development

and advancement. The hospitality business and employment in it was found to be increasing.

The number of hospitality establishments grew by 8.9% (from 1914 establishments in 2010 to

2084 establishments in 2015) (kortoseva, 2020). This percentage increase potrayed the

importance of constantly improving service industry for improved customer satisfaction. The

research was conducted with the help of a questionnaire which was surveyed to 7 types of

restaurants of Republic of Macedonia:3 casual restaurants, 2 pizza restaurants , 2 fast food

restaurants ; on the basis of 3 models: SERVQUAL, DINESERV, CFFRSERV. The total

number of 360 questionnaires were distributed out of which 304 were filled . The results

showed that out of 304 respondents 162 were men and 142 were women. It was concluded

that the restaurants were mostly visited by young independent population(Murray, R.B. &

Zentner, JP . 2001). It determined the level of service quality and also identified the gaps to

eliminate them so that better service quality was provided.

2.5 CUSTOMER RELATIONSHIP :

The quick service restaurant industry(QSR)is a significant aspect of the overall restaurant industry,

especially in the American economy. QSRs account for 30-50% of all the restaurants in the U.S.

(Gordon & Sterrett1999).Customer satisfaction is an index of effective marketing relationships

(Bagozzi, 1995). A research was done to investigate consumer relationships with two constructs:

Dining Satisfaction(DS) and Restaurant Loyalty Intention(LI) by examining the influence of food

quality(FQ)service quality(SQ) and physical surroundings(PS) on consumers’ DS and LI. (Mason,

Jones, Benefield & Walton, 2016).Consumers’ satisfaction levels are important for building

favourable loyalty intentions(Getty & Thompson, 1994;Ryu,Han & Kim, 2008).125 students from a

mid-size university were inquired about their perceptions on past QSR dining experiences, and were

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asked to dine at a QSR of their choice. They were then surveyed through a 5point scale questionnaire.

Cronbach’s Alpha values, multiple regression analysis and principal component analysis using

varimax rotation were computed. Results concluded that consumers having favourable perceptions

about a QSR’s FQ,SQ or PS were highly satisfied and would have loyal future behaviour intentions.

Apparently, food quality was found to be the most prominent factor for dining satisfaction. The study

encountered certain limitations. The data was fetched only from student experiences and price

perceptions may differ for diverse segments.

CHAPTER 3

RESEARCH METHODOLOGY

3.1 Objectives of the research:

1)To study the extent of influence customers have on other customers(word of mouth).

2)To study the extent of customer satisfaction.

3)To study the extent of customer relationship management by restaurant industries.

4)To study the extent of effect which restaurants’ ambience and atmosphere have on customers.

3.2 Sampling and Data collection tools:

The research is exploratory and descriptive in nature. It is a quantitative research and is done utilizing

both primary as well as secondary data. Primary Data is collected through sample survey approach,

wherein questionnaires were circulated among a sample of the population, including varied age

groups. This methodology, however aimed at only primary data collection, whereas the secondary

data was fetched using journals, articles, antecedent researches, etc. A sample is a representation of

the entire population. Questionnaires are research instruments which pave the way to obtain responses

in sizeable amount from respondents and a relatively inexpensive and economical than other means of

gathering information. They even prove to be effective in measuring the opinions, attitude and

behaviour of people and their likes as well as dislikes. The questionnaire used here comprises of 23

contrasting set of questions: Demographic questions, Dichotomous scale questions, Likert scale

questions(varying from strongly satisfied/very likely/very probable to strongly dissatisfied/very

unlikely/very probable, etc) ,Multiple choice questions. A sample of 224 respondents was surveyed

through these questionnaires appealing them to review and respond to queries regarding their visit to

restaurants. Questions on customers’ preferences relating to food quality, ambience, staff service,

price, frequency of visits, favourability towards meals, timing, recommendation rate, etc were a part

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of the survey. The nature of sampling was simple random sampling. A more diversified data analysis

is done, since the respondents belonged to different age groups, including the youth as well as the

adults. Data visualization is done through graphical representation of the data by pie charts and bar

graphs, making it more convenient for the data to be illustrated distinctly. The information gathered

through questionnaires from the respondents elucidates how word of mouth publicity affects

restaurant industry, impacting it either favourably or adversely. Moreover, it can be apparently

apprehended that customer reviews and relations play an indispensable role in the overall evolution of

the restaurant industry.

CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

This chapter expounds the analysis and interpretation of the data surveyed through

questionnaire.

The part one of questionnaire contains demographic questions i.e. respondents’ name, age,

gender, and other relevant personal information and part two of the questionnaire contains

questions regarding respondents’ visit to restaurants and the level of satisfaction they perceive

and their expectations , also the questions relating to the extent of influence their family, friends

and relatives have on them on their visits and views to any restaurant.

Question1) AGE

Figure 4.1

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The above pie chart shows the % of age of respondents who filled the questionnaire. 19.2%

respondents were less than 20 years old; 67% of the respondents were between the age of 20-35;

12.9% respondents were between the age of 35-50 while 0.9% respondents were above 50 years old.

Question2) GENDER

Figure 4.2

The total number of the respondents who filled the questionnaire consisted of 53.6% females and

46.4% males.

Question3) PROFESSION

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Figure 4.3

This pie chart shows the % of profession, the respondents are into. From the responses it is known

that 17.9% of the respondents are businessman; 17% of the respondents are engaged in jobs; 52.7%

are students and 12.5% are housewife or retired people. It is evident from the data that the majority of

respondents are students.

Question4) AVERGE MONTHLY INCOME

Figure 4.4

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The graph shows the average monthly income of respondents in percentage. 56.7% of the respondents

have below twenty thousand income as most of the respondents in this group are school and students;

21% are found to have income ranging between 25-50 thousand; 9.8% are earning between 50-75

thousand and the rest12.5% have above 75 thousand average monthly income.

Question5) RESTAURANT VISIT.

Figure 4.5

The question asked is on the visit to restaurants of which 97.3% of the respondents say yes and 2.7%

of the respondents say that they do not visit restaurants.

Ouestion6) RESTAURANTS RESPONDENTS LIKE TO STEP IN.

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Figure 4.6

When asked of restaurant preference to step in 43.8% of the respondents choose simple restaurants

with soothing ambience and the rest 56.3% of the respondents choose restaurants with rooftops. It is

noted that there is a vague difference between the former and the latter which denotes that both kind

of restaurants are almost equally preferred.

Question7) GROUPS, RESPONDENTS PEFER TO HANGOUT WITH.

Figure 4.7

From the above pie chart we draw the information about the groups with whom respondents like to PAGE 1

hang-out to restaurants i.e. 11.2% of the respondents choose to go with friends; 14.7% choose to go

with family; none choose to go only with colleagues; 74.1% of the respondents choose to go with

family , friends and colleagues which holds the maximum weightage.

Question8) TIME OF THE DAY PEOPLE PREFER GOING TO RESTAURANTS.

Figure 4.8

This pie chart is a representative of time people prefer to go for a meal. 4.9% of the respondents prefer

to go between 12p.m – 3p.m ; 6.2% prefer having going between 3p.m – 6p.m; 34.8% prefer to go

between 6p.m – 9p.m and rest prefer to go between 9p.m – 12p.m.

Question9) MEAL OF THE DAY RESPONDENTS PREFER EATING AR RESTAURANTS.

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Figure 4.9

After fetching the results it is known that 87.5% of the respondents prefer to have dinner at restaurants

; 5.4% prefer going lunch; 6.7% of the respondents prefer having brunch at restaurants whereas only

0.4% of the respondents prefer to have breakfast at the restaurants. Dinner being preferred by the

majority of the respondents.

Question10) GO TO SYSTEM FOR ORDERING MEAL.

Figure 4.10

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The data shows that 78.6% of the respondents preferred ordering food through a la carte system,

whereas 21.4% of them opted for the buffet system as their preference. The majority went for the

former because it let them retain their freedom to order from varied food choices.

Question11) MUSIC PREFERENCE IN RESTAURANTS.

Figure 4.11

Referring to the music taste of the respondents, it is observed that a considerable portion of the

sample, i.e, 72.3%,liked Soft Romantic music,11.6% preferred EDM rock music, 9.4% voted for

Indian classical music, whereas only a minor portion of the sample, i.e, 6.7% preferred dining in a no

music ambience.

Question12) SERVICE PREFERENCE IN RESTAURANTS.

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Figure 4.12

It is quite evident from the above chart that majority of the respondents, i.e. 88.4%, prefer visiting

restaurants providing waiter-service, in contrast to which only a minor portion of them, i.e, 11.6%

favoured self-service in restaurants.

Question13) COMPLAINTS AGAINST INAPPROPRIATE ITEMS.

Figure 4.13

A sizeable portion of the population sample, i.e. 88.6%, gave their submittal to complaining of having

found any undesired item in their food along with replacing it; while the other 13.4% preferred

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waiving off the same.

Question14) RECOMMENDATIONS OF RESTAURANTS TO OTHERS.

Figure 4.14

The data reports that 39.3% of the respondents were most likely to suggest a restaurant to others, that

suited their perception, 37.9% would somewhat likely recommend, 16.5% were unsure, 5.4% were

neutral, whereas 0.9% were very unlikely to suggest to others.

Question15) INFLUENCE CREATED BY FRIENDS’ REVIEWS.

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Figure 4.15

Observations conclude that 88.6%,which accounted for a substantial section of the survey sample,

would generally get influenced by their family/friends’ reviews of a specific restaurant and the

remnant 13.4% wouldn’t get swayed away by their opinions.

Question16) FREQUENCY OF VISITS BASED ON REVIEWS.

Figure 4.16

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Impacted by their fellows’ reviews, 5.4% of the respondents would always visit those restaurants,

30.4% would visit quite often, 45.1%,ie the majority, preferred visiting occasionally,17.9% rarely and

1.3% of the respondents would never visit the restaurants through exhortation.

Question17) LEVEL OF SATISFACTION AFTER VISITING.

Figure 4.17

The figures signify that after visiting the recommended restaurants,15.6% of the sample population

was very satisfied, 49.6% was slightly satisfied, 29.9% was unsure about the same, 3.1% was slightly

dissatisfied, whereas 1.8% of the sample population was very dissatisfied after their visit.

Question18) RECOMMENDING RESTAURANT’S SPECIALITY CUISINE.

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Figure 4.18

As per analysis, 36.6% of the 224 respondents would very likely suggest their favourites or

restaurant’s speciality cuisine to their friends, 36.2% would likely do so,19.2% preferred remaining

neutral,4.9% would unlikely suggest and 3.1% would very unlikely recommend to others.

Question19) PROBABILITY OF BIASED OPINION BASED ON REVIEWS GIVEN BY OTHERS.

Figure 4.19

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The above chart depicts that 22.3% of the respondents would probably not judge the ratings based on

their fellows’ reviews, 8.5% would somewhat probably do so, 39.7% were absolutely neutral

regarding the same, 25% would somewhat probably bias their opinion and 4.5% would very probably

prejudice their judgement.

Question20) PREFERENCE WHILE REVIEWING RESTAURANTS.

Figure 4.20

The data specifies that 26.3% of the respondents prioritised food while reviewing about the

restaurant, 5.8% prioritised ambience, 2.7% prioritised staff service,1.8%,ie an insignificant segment

of the lot, prioritised billing criteria, whereas 63.4%, accounting to the majority of respondents,

preferred considering all the above criteria while reviewing.

Question21) LIKELINESS IN GIVING FEEDBACK.

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Figure 4.21

Based on the results, 27.2% of the sample would very likely fill the feedback form for the restaurant,

39.7% would somewhat likely do so, 21% were neutral for filling feedback form, 6.7% would

somewhat unlikely do the same and 5.4% would very unlikely fill the feedback form offered.

Question22) DESIRABILITY IN DEFAMING RESTAURANTS.

Figure 4.22

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It would be very undesirable for 42.4% of the respondents to spread negative information about the

restaurant, undesirable for 20.5%, neutral in the case of 21.4% of them,11.6% would desirably do so

and the remaining 4% would very desirably defame the restaurant.

Question23) FAVOURABILITY IN PUBLICISING RESTAURANT.

Figure 4.23

The survey analyses that 8.5% of the population sample would strongly favour restaurant’s publicity

by tagging and availing discounts, 21.9% of the respondents somewhat favour the same,48.2% were

neutral, 9.4% somewhat opposed it, whereas 12.1% of them strongly opposed the restaurant’s

publicity strategy

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Chapter 5

Conclusion

The study discernibly deduces that while majority of the diners give weightage to food quality as the

major factor, in differentiation with the other factors, while recommending or reviewing about the

restaurant to others, none of these factors as an individual is solitarily adequate enough to be

considered for the same. All of these, comprising of food quality, ambience, staff service and billing

criteria, jointly affect customer reviews and their word of mouth publicity, indicating that diners’

decisions are based on the totality of the dimensions rather than any single factor.

Further, it can be observed that the customers are emancipated and at undisputed liberty to form their

opinion in favour or against the restaurant industry, which ensues as a result of their recurring

restaurant visit experiences. They unboundedly review about their visits, to which the others get

positively influenced and are driven to implement the same. It can be analysed that customer relations

have an influentially assertive impact on the extensively humongous restaurant industry. The

reputation of the restaurant is quite vulnerably contingent to its diners’ assessment and evaluation.

LIMITATIONS:

Nevertheless, the research results have a couple of limitations too, which cannot be overlooked. The

survey was done using a population sample of mere 224 respondents, signifying that the responses

collected catered to a colossally meagre amount of the entire population, restricting the research

implications and findings only to a limited section rather than a wide-ranging one. Secondly,52.7%,

which accounts for the majority of the respondents, is constituted only by the students, the other

proportions being occupied by others age groups. This limits the research to the youth, ignoring the

fact that the contribution made by the adults/elderly people to the restaurant industry is undoubtedly

of paramount significance and their opinions are compelling and imperative. Moreover, the research

was confined geographically in the sense that it had minimal exposure of respondents only from few

areas of the country, obstructing the escalation of the research survey. Also, though the respondents

are candidly upfront about their views, but in many cases, they may prejudice their opinions against

the particular restaurant thus predisposing the restaurant to smears and aspersions. Surpassing all

these, the prodigious and mega restaurant industry has its foot almost everywhere in the ever-

mushrooming economy.

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