Determinants of Customers' Perceived Value in the Fast Food Industry for Global Brands in Malaysia

Determinants of Customers' Perceived Value in the Fast Food Industry for Global Brands in Malaysia

Jalal Rajeh Hanaysha (DRB-HICOM University of Automotive Malaysia, Malaysia), Haim Hilman (Universiti Utara Malaysia, Malaysia), Zahari Abu Bakar (DRB-HICOM University of Automotive Malaysia, Malaysia) and Lee Khai Loon (Universiti Malaysia Pahang, Malaysia)
DOI: 10.4018/978-1-5225-7095-0.ch015

Abstract

The purpose of this research was to investigate the effect of food quality, customer service, physical environment, and price fairness on perceived value in the fast food industry. A survey method was used for the collection of desired information from the visitors of global fast food restaurants in the East Coast region of Malaysia. The returned questionnaires were analyzed by SPSS and structural equation modeling (PLS-SEM). Overall, the findings showed that the impact of food quality on perceived value is positive. The results also showed that the effect of customer service on perceived value is insignificant. The outcomes also proved that physical environment has a significant positive impact on perceived value. Finally, the findings indicated that price fairness has a positive effect on perceived value. These results enhance the understanding towards the significance of the selected factors in influencing customers' perceived value in the fast food industry.
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Introduction

Due to the quick changes in global business markets, the needs of consumers have shifted in recent years towards seeking for products or services that deliver superior value for them (Ullakonoja, 2011). In the past, the added value was perceived as product-centric that can be controlled by organizations. However, currently, superior customer value has emerged as a concept that can be created by both an organization and its customers, and for this reason, customers presume that organizations should engage them by providing favorable experiences (Prahalad & Ramaswamy, 2013; Yusof, Musa, & Rahman, 2018). In prior literature, customer perceived value was regarded as a key factor that affects customer satisfaction (Mackevičiūtė, 2013; Mehmood & Hanaysha, 2015; Prebensen & Xie, 2017). Additionally, several researchers confirmed the significance of customer perceived value and reported that it can influence consumer’s purchase intention (Chi, Yeh, & Tsai, 2011; Gan & Wang, 2017). Customer value can be defined in terms of the perceived preference, evaluation of product features, and the outcomes of using a product or service to fulfill certain needs (Woodruff, 1997).

Minnema, Bijmolt, Petersen, and Shulman, (2018) indicated that perceived value represents one of the foremost imperative factors in the purchasing decision of consumers. The authors added that consumers tend to buy from brands which provide them with superior values. Therefore, if consumers develop trustworthy relationships with a service provider as a result of perceived value in the consumption process of a particular product or service, it will lead to various advantages such as: positive brand image, higher customer loyalty, and increased profit (Abdullah, Abd Ghani, & Hanaysha, 2013). Moreover, perceived value is a key factor for differentiating a brand and building its competitiveness (Hou, Cheng, Hung, Chen, & Shen, 2017). Due to the benefits of perceived value for both firms and their customers, it has become essential to identify the drivers of perceived value. By observing the prior literature on perceived value, it can be noticed that the majority of the previous researches on this topic have focused on western countries, but few were done in the Asian markets. Additionally, the increasing rivalry among businesses requires organizations to distinguish themselves in order to attract and keep their profitable customers on the long term by focusing on tangible and intangible customer values.

Hu, Kandampully, and Juwaheer (2009) reported that firms should focus on delivering superior services for customers in order to influence their perceptions of brand value. Food quality and physical environment have also been considered to be important for influencing consumer behavior and value perception. In past literature, it was found that food quality (Haery & Badiezadeh, 2014) and physical environment (Liu & Jang, 2009; Nitiwanakul, 2018) had positive effects on customer perceived value. Moreover, Gunmmesson (2002) regarded price fairness and customer service key factors for determining perceived value and brand power. Despite the significance of food quality, customer service, and physical environment, there are few studies that examined their impact on perceived value (Ryu, Lee, & Kim, 2012). Therefore, this study is designed to minimize these gaps by examining whether food quality, customer service, physical environment, and price fairness have any positive effects on perceived value in the fast food industry. The following sections present the literature review for this chapter, followed by is the method of data collection and results. This chapter ends by discussion and conclusion in addition to the limitations and directions for future research.

Key Terms in this Chapter

Price Fairness: The overall evaluation of customers towards the perceived benefit of the product or service as compared to its price.

Physical Environment: It refers to the layout design, ambient conditions, level of lighting, aesthetics, and decoration that aim to enhance customer’s experience.

Food Quality: The quality attributes of food that is acceptable by customers.

Customer Service: The assistance and support of service providers to customers who buy or use their products or services.

Perceived Value: The perception of customers about the benefits of purchased products or services against what is given in return.

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