Introduction Of KFC In Mauritius

Published Date: 23 Mar 2015 Last Modified: 05 May 2017

The necessity for all human being is eating which is observably a daily action. For eating at restaurants, it depend on an individuals reason and is intentionally or instinctively assess by a multifarious set of attributes ahead before choosing a restaurant. Thus, this study is to investigate how much service quality has an impact on customer satisfaction and retention especially in our Mauritian context at KFC. As there is a casual inter-relationship between customer satisfaction and service quality, this study aims to find out the effectiveness of the service dimensions of service quality which leads to customer satisfaction and finally to retention at KFC. An individual feeling of pleasure and disappointment is known as satisfaction and the customer satisfaction is very important for any organization. All the main aspects will be analyzed and recommendations will be drawn out for better improvement.

Company Background

History

Kentucky Fried Chicken (KFC) was founded by Colonel Harland Sanders in 1952 and its primary focus is fried chicken. KFC also offers grilled and roasted chicken products, wraps, salads, sandwiches and desserts as well beef based products outside the USA. Although the death of Sanders in 1980, he remains a vital part of the firm's branding and advertisements, and 'Colonel Sanders' or 'The Colonel' is a metonym for the company itself. In 1991, the abbreviated form of its name 'KFC' was adopted by the company.

The Present

KFC operates more than 5,200 restaurants in the United States and more than 15,000 units around the world. In 109 countries and territories around the world, KFC daily serves more than 12 million customers. KFC is world famous for its Original Recipe fried chicken, made up of 11 herbs and spices secretly blended together. Colonel Harland Sanders perfected more than a half century ago. Based on the Fortune 500 List, KFC is ranked on 239 positions with revenues in excess of $11 billion in 2008.

Introduction of KFC in Mauritius

With time, consumers were more demanding for large variety of food and then, the first KFC outlet was launched in Mauritius-1983. Pick N Eat is the company which operates the KFC franchise in Mauritius. KFC has carved a solid reputation as a quick service restaurant which provides quality products and service. Across our island, 18 outlets are spread out and 10,000 customers daily are enjoying their finger-linking favorites in the consumer-friendly environment.

Background of the program

In the fierce competition, the market trend has changed noticeably from agricultural to service market. The service sector especially fast food industry is in a rapid growth and gain a sustainable position in the market due to lack of time to prepare food and dual income families. All of the fast food businesses are trying their best to improve their service quality in order to make customer satisfied and return back to them again. They are concentrating more on service quality in order to meet the needs and expectations of the customer. The more satisfied the customers are, the more likely they are to return to the restaurant. The fast food industry has undoubtedly not been free from either augmented competition or from increasing customer expectations regarding quality. In the fast food industry, the perceived quality holds a great importance to create a retention effect for customers. So the fact is that when the service providers are able to satisfy its customers with good managerial arrangement, the food's quality provided, have efficient staff, then a positive outcome is seen in customers' retention in a particular restaurant.

Problem Statement

'Service quality is a vital strategy for any restaurants, success and repeat business and it has long been defined by adopting a rather more customer-oriented view and not by the restaurateur-oriented' (Saleh and Ryan, 1991). Customer is the key role in any business, without any customer it is difficult to do business. It is necessary to work closely with your customer. As customers can also create your business, thus, customer is the major part of business and also in the market. Business runs through customer, without the customer there is no business. Due to the increasing competition with other restaurants and quality-conscious' customers, it is vital to carry out this research. There is a need for further improvement in order to face the competitors and meet the increasing customers' expectation concerning quality. Based on the actual service quality performance of KFC, it is important to identify if customers are satisfied with the current situation and are likely to retain at KFC or switch to other competitors. Also, to find out the factors of service quality that leads to customer satisfaction and retention. From the above reasons, it is important that the service performance meets or exceeds customers and their expectation, the customer will be satisfied. Service quality is an antecedent of customer satisfaction. Therefore, this warrants a study to assess the customers' expectation and perception, examine its discrepancy gaps and the service quality dimensions that influence customer satisfaction and retention.

Research Objectives

-To determine customers' expectation and perception level towards service quality.

-To identify the discrepancy gap between customers' expectation and perception level towards service quality.

-To identify the SERVQUAL dimensions which have an influence on customer satisfaction and retention?

Research Questions

-What is customers' expectation and perception towards service quality?

-What is the discrepancy gap exist between customers' expectation and perception towards service quality?

-What are the SERVQUAL dimensions which have an influence on customer satisfaction and retention?

Aims of the study

This study is to find out whether the service dimensions have an impact on customer satisfaction and retention at KFC by using the SERVQUAL Model by Parasuraman, Zenithaml, and Berry (1988). It will also explore the service aspects that affect and influence customer satisfaction and retention.

Significance of the study

This study will act as a practical guideline for KFC, especially for the management and the front line employees which may increased a higher level of customer satisfaction in the near future. The results of this quantitative assessment of service quality may provide some insights into how customers rate the service and assessed customer satisfaction at KFC. The outcomes will utilize as a basis to improve their existing service quality or to develop a new one in order to meet with the customers' needs and satisfy them. Furthermore it will help KFC managers to know if they are providing services according to the norms established by customers. The management will be able to come up with a strategy for upgrading their service quality which will definitely lead to customer satisfaction and retention. All these views of customers will help KFC to remedy problems if there are and maintain their service quality.

Phases of the discussion

Introduction

In the first chapter, the problem area is discussed with a deeper understanding regarding the research. The problem discussion ends with a research objectives and questions. In the end of this chapter, the contributions of this research are also presented.

Literature Review

In the literature review, the service quality's impact on customer satisfaction and retention is discussed with the following purposes of assessing customers' expectation, customers and employees' perception, identifying their gaps and the influencing service quality aspects.

Research Methodology

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Analysis

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Conclusion and Recommendation

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Conclusion

The first chapter provided us a background to the outline of the dissertation. It contained the research context, which is, identify the problems, and establish its aims and its objectives, set out the research questions and finally present the outline of the study.

Chapter 2- LITERATURE REVIEW

2.1 Introduction

This chapter will give an overview of literature and models that presented by writers and journalists. It will support the research objective presented in the previous chapter. The chapter will elaborate the concepts of service, service quality, customer satisfaction, customer retention, service quality dimensions, the gaps and others.

2.2 Fast Food Industry

The fast food industry is also known as "Quick Service Restaurants" (QSR) and has been serving delicious food for as long as people lived on. The fast food generally refers to the food served to customers in form of packaged for takeout or on the spot with minimum preparation time. The Mauritian fast food industry was primarily started with the famous "dholl-puri" and is still in great demand. But, due to globalization, the fast food industry has gradually breakthrough the Mauritian lifestyle. The consumer demand has evolved as they demand for a variety of food in a comfortable, stylish place and for busy people a quick bite at all times of the day. Today, these products form part of the Mauritian lifestyle and culture. People look for the convenience in order to improve their lives and productivity. Recent studies have shown that one out of every two-and-a-half-meal today is eaten away from home (Kara et al 1997).

The fast food industry is not without its challenges. There is an increased focus on the quality of food served in the fast food restaurants. But, in this fierce competition of today, the right marketing approach and application of service quality is vital to compete with competitors as well as retain customers. The fast food industry is large and diverse in itself with lots of opportunities that challenge is being answered with new offerings and strategies to lure consumer back in. In the new emerging fast food industry, KFC is expanding in accordance with the customers' demand despite the environmental problems and provide its potential to give a meal in a pleasant atmosphere.

Jang & Namkung (2009) proposed three factors: service and product quality as well as the atmospherics element are considered as the main restaurant attributes affecting the perceived quality of customers' experiences at a restaurant. The total dining experience in a restaurant is comprised of not only food itself, but also the atmosphere (physical aspects) and the service provided. Thus, the fast food industry is based on the principles of quality food served fast and requires fast-reaction solutions to customer's needs if they want to satisfy and retain customers.

2.3 Service

There are many definitions concerning the concept of service by researchers. The term service was describe by the author Gronroos (1983) as: "An activity or series of activities of more or less intangibles nature that normally, but not necessarily, take place in interactions between the customer and service employees and/or physical resources or goods and / or systems of service provider, which are provided as solutions to customer problems". Another definition was given by the author (Payne, 1993) said that service is "Any primary or complementary activity that does not directly. Produce a physical product - that is, the non-goods part of the transaction between customer and provider". Whereas Kotler et. al. (1999) is of opinion the service is regarded "as any activity or benefit that one party offers to another which is essentially intangible and does not result in the ownership of anything, and it may or may not be tied to a physical product". Normally, lots of people are involved in a service process and it is tough to do an analysis of service or to duplicate the same service exactly. In today market, products heavily rely on its service to acquire competitive advantage and to satisfy customers' needs.

Each authors mentions service as an exchange between the service provider and customers as well as its intangibility nature. The most vital point is simply the participation of the customer in the service process. KFC provides quality product and service with full customer's interaction.

2.4 Service Quality

In the service industry, service quality has become a crucial tool. Practitioners are more interested in the concept of service quality which has an advantageous effect on the outcome performance for the company. Service quality is a critical element of customer perceptions as well as in determining customer satisfaction. Various experts have defined service quality differently. Parasuraman et al. (1985) proposed a formal definition of service quality as "the degree and direction of discrepancy between customers' service perception and expectation." Satisfaction occurs when the expectations meet or exceed the performance level whereas customer dissatisfaction occurs when the expectation is below the perceived quality. Asubonteng et al. (1996) defines 'service quality as the extent to which a service meets customers' need and expectation'. Hooley, Saunders and Piercy (2004) "A prime factor in differentiating the product or service from that of competitors is quality. Quality concerns the fitness for purpose of a product or service. For manufactured products that can include the durability, appearance or grade of the product while in services it often comes down to the tangible elements of the services, the reliability and responsiveness of the service provider, the assurance provided of the value of service and empathy, or caring attention, received."

According to these authors, the service quality is normally the customer perceptions and the organization's activities together with delivering quality service that matched to customer expectations on a consistent basis. Service quality is a key survival of all restaurants as it is the most powerful competitive weapon that can be used against competitors and to attract as well as to retain customers. These authors highlights that two main factors affect the quality of a services, that is, expected service and perceived service.

2.5 SERVQUAL Approach

The SERVQUAL framework has come up for the purpose to improve service quality in services and retailing organizations as it has suggest that customer satisfaction is based on multiple factors rather than one. The SERVQUAL method was developed by Parasuraman et al. in 1988 as a technique used to perform a gap analysis of an organization's service quality performance against customer service quality needs. Parasuraman et al. (1988) came up with five dimensions (grouped with 22 attributes) to measure service quality which is responsiveness, assurance, tangibility, empathy and reliability. The SERVQUAL instrument is regarded as a reliable method of measuring service quality (explore customers' expectation and perceptions), which in turn leads to a measurement of customer satisfaction.

Internationally, KFC already have a service quality assurance team for regular surveys with a theory known as CHAMPS (consist of cleanliness, hospitality, accuracy, maintenance, the standard of product quality plus service speed). This is to evaluate the customers' experience whether they are satisfied or not with the products and services. In Mauritius, KFC has already executed the theory of service quality and conduct survey concerning the services. Thus, in the study, the SERVQUAL method will be used for further research work.

2.5.1 SERVQUAL Dimensions

In 1985, Parasuraman et al. has identified ten determinants for measuring service quality which are as follows: responsiveness, reliability, access, competence, courtesy, credibility, communication, security, tangibility and understanding or knowing the customer. Later, in 1998, Parasuraman et al. refined the model to the useful acronym RATER:-

Reliability

It is defined as 'the ability to perform the promised service dependably and accurately' or 'delivering on its promises' (Zeithaml et al., 2006, p. 117). It is one of the most important service components for customers as it implies 'doing it right the first time'. The service organizations need to keep its promise and maintain an error free record. The reliability factors are efficiency in the billing system, consistency in serving customers, and the staff performs tasks that have been promised to guests and well trained staff. For the food & beverage industry, reliability can be interpreted to mean fresh food delivered at the correct temperature and accurately the first time (Andaleeb & Conway, 2006).

In the Mauritian context, KFC has its own training center recognized by the franchisor for their staff. The chicken is prepared on the spot and they make sure that the service delivery is consistent and timely. The most significant policy of KFC is evaluating the customers' experience with its service, whether they are satisfied or not. They can also put their comments and suggestions for further improvements of the products and services of KFC.

Assurance

Assurance is defined as "the employees' knowledge and courtesy and the service provider's ability to inspire trust and confidence" (Zeithaml et al., 2006, p. 119). The assurance factors are staff's knowledge about the menu, safety, security, trustworthy and friendly staff. Customers are more likely to use tangible evidence to assess the assurance dimension such as awards or special certificates which give a new customer confidence.

KFC has achieved National Quality Awards and have a Hazard Analysis Critical Control Point (HACCP) program is implemented in order to identify, evaluate and control any physical and environmental hazards in the work place. And the logo of HACCP is visible in every restaurant as an assurance dimension.

Tangibility

Tangible is defined as the physical facilities, equipment, staff appearance and others. In accordance with the author, Zeithamal et al. (2006) this dimension is comprised to the current appearance and shape of the cutlery, the restaurant's interiors decor, silverwares and the uniform of the staff, the layout and appearance of the menu list, restaurant signage and advertising campaign. "Tangibles are used by firms to convey image and signal quality" (Zeithaml et al., 2006). Customers use this dimension to evaluate the quality.

KFC has its own evidence of its service in terms of products, packaging, printed and visual marketing materials, websites, and staff appearance, virtual evidence of handling queries and feedback through Facebook and other online services.

Empathy

Empathy is the extent to which caring individualized service is given to a customer. The customer is treated as a king. Many small companies use this ability to provide customized services as a competitive advantage over the larger firms (Zeithaml et al., 2006). The empathy components are willingness to handle requests, give individualized attention to customers, and show enthusiasm to serve and to answer to all queries accurately. Empathy may be important to ensure customer loyalty as the server knows how the customer likes his or her food prepared. In return, the customer is easily approach and spell out their needs to the service provider. If a company looks its customer as an individual, as result, the company will come out as a winner.

KFC take care of each individual customer by providing the meal according to the customer requirement. Such as, a meal can be upgraded by adding cheese, pineapple, tomato, plain or spicy chicken as per the customer's taste. Before launching a new product, KFC take care of its customer's opinion into consideration through Facebook and keep continuous communication with the customer through regular survey.

Responsiveness

Responsiveness is defined as "the willingness to help customers and provide prompt service" (Zeithaml et al., 2006, p. 117). The responsiveness factors are short waiting period for the service delivery, attend complaints quickly, availability of staff when needed and restaurants action upon customer suggestions. In order to be responsive, a service provider has to determine how long it would take to get answer or to solve a problem. To be successful, companies need to look at responsiveness from the view point of the customer rather than the company's perspective (Zeithaml et al., 2006). This dimension captures the notion of flexibility and ability to customize the service according to the customer needs.

KFC handle complaints quickly especially through Facebook and the staff are willing to help customer as well as keeping in mind for short waiting period in service delivery.

2.5.2 Service Quality Gaps Model

In 1990, Zeithaml, Parasuraman and Berry have developed a survey instrument to measure the gap between customer's expectation for excellence and their perception of actual service delivered. The SERVQUAL model uses the terms that describe one or more determinants of a "quality service encounter". Gronroos (1982), Lewis and Booms (1983); Parasuraman et al. (1985) have the same opinion that the most frequently used approach to measure service quality is SERVQUAL to compare the customer's expectation prior to the service encounter and their perception after the actual service delivery. Basically, there are seven principal gaps in the service quality's concept, out of which Gap 1, Gap 5 and Gap 6 are more associated with the external customers as they have a direct relationship with customers.

Figure 2.1: SERVQUAL or Gaps Model

(Zeithaml Parasuaman Berry 1988

Gap 1: Management perceptions of consumer expectations and Customers' expectations and

It is the knowledge gap which portrays the difference between the management beliefs about customers, expectations and what customers actually need and expect. This gap happens when there is insufficient flow of communication upwards, lack of marketing research orientation and too many level of management.

Gap 2: Management perceptions of consumer expectations v/s service specifications

It is a policy gap where a difference occurs between management perceptions regarding customers' expectations and service specifications are set for service delivery. The reasons for this gap are unfeasibility, inadequate commitment to service quality and task standardization as well as an absence of goal setting.

Gap 3: Service quality specifications opposite service delivery

It is the difference between the service specifications and the service delivery teams' actual performance on these specifications. The gap is a result of poor employee-job fit, lack of perceived control and lack of teamwork.

Gap 4: Service delivery v/s external communication to customers

The communication gap is the difference between what the company communicates and what is actually delivers to the customer. It is due to inadequate horizontal communications and propensity to over- promise.

Gap 5: The discrepancy gap between customers' expectations and customers' perceptions of the service delivered

It is the difference between what has actually delivered and what customers feel they have received. Customer expectations are influenced by the extent of personal needs, past service experiences and word of mouth recommendation. The difference occurs when customers are influenced and service provider has shortfalls.

Gap 6: The discrepancy gap between customer expectations from the service provider and employees' perceptions of consumers' expectations

The service quality gap is what the customers expect to receive and their perception of the service that is actually delivered. There is a difference in the understanding of customer expectations by front-line service provider.

Gap 7: The discrepancy gap between employee's perceptions and management perceptions of consumers' expectations

This gap is mainly an internal difference in the organization such as differences in understanding of customer expectations between management and employees.

2.6 Customer Satisfaction

Customer satisfaction is the heart of marketing. Customer satisfaction is the customer's evaluation of the service or product against if their needs and expectations are meant. For any restaurant, customer satisfaction is more important as it forms a part of marketing. In past years, customer satisfaction was not that important but today it is the most important issue in term of the most reliable feedback for a restaurant's excellency. Richard L. Oliver (1997, P.13) define customer satisfaction as "Satisfaction is the consumer's fulfillment response. It is a judgment that a product or service feature, or the product or service itself, provides a pleasurable level of consumption-related fulfillment." Customers' satisfaction is highly influenced by their characteristics, their emotional responses and their perceptions of equity. As Kotler (2000, p.36) defined that 'satisfaction is a person's feelings of pleasure or disappointment resulting from comparing a product's perceived performance (or outcome) in relation to his or her expectation.' If the performance didn't meet the expectation of the customer, then dissatisfaction will occur. If the performance exceeds the customer's expectation, then satisfaction will occur. If the performance exceeds more than expected, then the customer will delighted. In the context of customer satisfaction, Johnston and Clark (2005) have describe it as "Service as the combination of outcomes and experience delivered to and receives by a customer. Customers therefore judge the quality of the service on the experience as well as the outcome." Due to current competitive edge, customers are abreast with the fact of product quality and every service provider is interested to satisfy customers' needs and wants.

All of three authors explain customer satisfaction as a bunch of desired expectations of a customer that has been fulfilled by the service provider. But, Richard L. Oliver's definition is more applicable in this research work which emphasis that satisfaction is based upon service itself. KFC take care for its customer satisfaction by providing an online questionnaire on its website regarding customer satisfaction.

2.7 Customer Retention

Lovelock (2004) illustrates importance of customer retention "The hardest part of a business is customer retention. If a company does not retain its customers, inevitably it will fail. Marketing essentially means keeping customer loyalty." In order to have a good lifetime value of customers, an organization needs to have good strategies to retain them and arouse loyalty within them for lifetime. Laura Lake (2010) defined "Customer retention is not only a cost effective and profitable strategy, but in today's business world it's necessary. This is especially true when you remember that 80% of your sales come from 20% of your customer and clients..." In the starting point of a business, customer retention is very important as the cost involved in attracting new customers are five times higher than retaining an existing one. Hill and Alexander (2006) defined "It is becoming accepted that there is a strong link between customer satisfaction, customer retention and profitability." By fulfilling customer expectation, an organization provides all service according to the customer's preferences and in return, the customer is loyal to the organization. It makes profit for the organization and organization has to retain by providing continuous good services, better customer satisfaction and that will be profitability for the organization. So, organization has to make strong relation with customers as high rates of customer retention are a competitive weapon against its competitors.

By having a questionnaire always on the website, KFC is trying to take care of that small segment of customers who are satisfied or dissatisfied with its service quality. In this way, KFC tries to retain those happy customers than losing them.

2.8 Customers' expectations and perceptions

2.8.1 Customers' expectations

Customer expectations are increasing day by day and demanding for quality products and services; therefore expectations play an important role in the formation of customer satisfaction. The term expectations really matters to companies because they want to know what customers' expectations are. According to Oliver (1981) "… expectations are consumer-defined probabilities of the occurrence of positive and negative events if the consumer engages in some behavior". Customers form their expectations from their past experience, friends' advice, and marketers' and competitors' information and promises. Organizations in order to keep expectations from rising, they have to perform services properly from the first time (Parasuraman et al. 1988). There is tendency that if a service is not delivered as promised, thus the customers' expectations are likely to rise in the next encounter. Expectations serve as reference points in customer's assessment of performance (Cronin& Taylor, 1992). "The purpose of trying to understand customers' expectations is trying to ensure that service can be designed and delivered in order to meet those expectations. If the operation meets the expectations, or indeed exceeds them, then customers are satisfied with the service. If they are satisfied they are more likely to become valuable customers who not only use the service again, but are positively disposed towards it and may even recommend it to other' Johnston and Clark (2005). Therefore, the perceived service quality is viewed as the difference between consumers' perceptions and expectations for the service provided.

2.8.2 Customers' perceptions

Mc Kenna (2000) is of opinion that perception is a vital process in a person's life where he or she has to manage and interpret a situation or an event to define a particular respond. Service firms must understand the concept of service quality from the point of view of the customer, not from the view point of the service firm or service provider. Besides, customer perceives services in the response to quality pertaining to the service and the extent to which they are satisfied with the overall service with their experiences (Zeithaml and Bitner 2003). The customer satisfaction is determined by the customers' perceptions and expectations of the service quality. Customer perceives services in terms of the quality of the service and how satisfied they are overall with their experience. The customers' perception varies from customer to customer and each one has different beliefs towards the services that play a crucial role in determining customer satisfaction. 'Therefore, customer perception and customer satisfaction are very closely linked together, because if the perceived service is close to customer's expectations it leads to satisfaction. Satisfied customers provide recommendations; maintain loyalty towards the company and customers in turn are more likely to pay price premiums' (Reichheld, 1996). As such, perceived service quality is a key component of customer satisfaction.

2.9 Relationship between service quality and customer satisfaction

A great emphasis need to be heightened on service quality and customer satisfaction. In old times, customers were not concerned about quality and their satisfaction does not have such importance. But, today, customers' knowledge has increased together with the changing world lifestyle. Service quality plays a great role in customer satisfaction. When a customer recognized and enjoyed the quality of a particular service, then their satisfaction is reflected. Sureshchandar et al, (2003) identified that strong relationships exist between service quality and customer satisfaction while emphasizing that these two are conceptually distinct constructs from the customers' point of view. Spreng and Mackoy (1996) also showed that service quality leads to customer satisfaction while working on the model developed by Oliver (1997). Customer satisfaction and service quality are acknowledged as an essential function for the success of a restaurant. Customers' perceived service quality has a positive effect on customer satisfaction. The diagram below explains that the customer satisfaction can be identified by comparing the service perception with service expectation and service quality plays a big role in this.

Dimensions of Service Quality

Reliability

Responsiveness

Assurance

Empathy

Tangibles

Expected service

Perceived service

Word of mouth

Personal needs

Past experience

Perceived Service Quality

1. Expectations exceeded

ES < PS (Quality surprise)

2. Expectations met

ES = PS (Satisfactory quality)

3. Expectations not met

ES > PS (Unacceptable quality)

Figure 2.2 : Perceived Service Quality Model

Parasuraman, et al., (Fitzsimmons & Fitzsimmons, 2001: 44)

2.10 Relationship between service quality and customer retention

Service Quality is viewed as a vital means for customer retention. Service quality is regarded as one of key factors for service differentiation and competitive advantage for a business. Anderson and Fornell, 1994; Anderson et al., 1994; Rust et al., 1995; Zeithaml et al., 1996; Bolton et al., 2000 have argue that the service excellency reinforce customers' tendency to buy on the a repetitive basis, become les price sensitive and promote a posistive word of mouth on the restaurant. . A study by Zeithaml et al. (1996), concludes that good service quality have an positive impact on different intentions such as willingness to pay more, doing more transaction and do recommendations. When customers perceive that they are receiving better quality service for their money, they believe they are receiving "good value", which increases their loyalty to the service provider (Bolton et al., 2000).

KFC understand the link between service quality and customer retention that is why, KFC is responding to the current trend of service quality in order they come back again.

2.11 Relationship between customer satisfaction and customer retention

Customer satisfaction and customer retention are two of the most important factors regarding the success of a firm. Customer Satisfaction used as a sign to determine whether the customers will come back to the restaurant that shows the customer retention. Anderson and Sullivan 1993 have argued that more satisfied the customers are, the greater is their retention. Similarly, this view is supported by the study of Ranaweera and Prabhu in 2003 that the effects of customer satisfaction on customer retention are found to be significant and positive. In general, increased customer satisfaction leads to higher customer retention level, increase customer repurchase behavior and ultimately drive higher firm's profitability. Both authors share a similar opinion on this statement. Therefore, if KFC has more pleased and satisfied customers, the larger are their retention.

2.12 Conclusion

The literature review shows some general agreement by writers that the concept of service quality is an antecedent of customer satisfaction and retention. High service quality will obviously lead to high levels of customer satisfaction and result in customer retention. The SERVQUAL Model was established as a widely used and reliable method of measuring service quality. Finally, the literature review provides a better understanding of the topic and shows the SERVQUAL model as well as RATER as a basis to continue the research work and in designing the questionnaire.

Chapter 3- RESEARCH METHODOLOGY

3.1 Introduction

In this chapter, the methodology of the study gives a picture of how to proceed with the research work such as identifying the research strategy, research instrument, sampling, designing questionnaire and the data analysis.

3.2 Type of research strategy

Based on the purpose of this study and the type and availability of the information which is required, a quantitative research will be used. The quantitative research is the way in which the research objectives of the study can be questioned in term of a survey. The quantitative research is very objective in nature as it investigates facts and is based on testing a hypothesis. Out of the quantitative research, the numerical data has been collected and statistical technique is used for the establishment and description of relationships that exist in the data. "Quantitative data is, therefore, not abstract, they are hard and reliable; they are measurements of tangible, countable, sensate features of the world" Bouma and Atkinson 1995

3.3 Research instrument

The most commonly used research instrument in quantitative research is in form of a questionnaire. The questionnaire will allowed the research to be carried out in a quantitative approach effectively with the use of statistics for data analysis. The reasons for using questionnaire are: it is reachable to a large number of people relatively easily and economically, it provides quantifiable answers, it is relatively easy to analyze and less time consuming than interview or observation. The instrument used, ensures the validility and reliability of the study.

3.4 Sampling Strategy

In the sampling strategy, every customers of KFC have taken into consideration from old generation to young generation. Probability sampling was considered by emphasizing on simple random probability technique where every KFC's consumers have an equal chance of being selected. As, KFC have 10, 000 customers daily and Mauritius has an estimated population of 1,291,456, thus the sample size of 200 respondents have been targeted. The sample size was calculated online on http://www.surveysystem.com.

The formula used to calculate sample size was:

Sample size =

Z 2 * (p) * (1-p)

_____________

c 2

Where:

Z = Z value (95% for confidence level)

p = percentage of 50

c = confidence interval was 5.2.

3.5 Construction of questionnaire

The questionnaire is designed in a systematic way in order to obtain required information from the respondents. In order to have a full-fledged result, the questionnaire is designed by taking into consideration the research objectives and the literature review of the study. Most of the questions are close-ended and multiple choice in nature. They are easy to compare, tabulate and analyze. The questionnaire begins with a covering letter in order to inform the respondent about the purpose of this survey and assure the confidentiality of the information. The questionnaire for the survey will consist of three parts. The first section is about the personal details of the respondents. The second part seeks to measure customers, expectation and perception towards service quality by using RATER. The third part aims to see if the customers are satisfied and retained to KFC. The Likert scaling is used in section B and C which represents the degree of agreement on the given questions in an orderly manner strongly agree, agree, neutral, disagree and strongly disagree.

3.6 Questionnaire Administration

The questionnaires are distributed in the public with a targeted population of 200 respondents. Within one week time-frame, all the questionnaires were administered and returned back. Out of the 200 questionnaires, only 175 questionnaires were returned back well completed.

3.7 Pilot Testing

A pilot test is conducted to identify the weaknesses and strengths of the questionnaire. The test was mainly to detect whether the questionnaire was understandable to the respondents or whether the questions were too vague or confusing to answer. It was also helpful as it shows whether the questionnaire is able to capture enough data as expected in the study. Four students were approached to test the questionnaire and the result was that they had no difficulty to respond. However, we received one general comment from two students that some of the questions were a bit wordy and long. The questions were refined and at last, a well structured questionnaire comes out.

3.8 Reliability

Reliability implies to the extent to which the assessments are consistent. The questions in the scales were subjected to reliability testing using Cronbach's Alpha to determine the internal consistencies by comparing the results. An alpha of 0.7 or greater is acceptable as a good indication of reliability Nunnally and Bernstein (1994). By the use of Cronbach's Alpha, it gives an indication of the level of reliability in the response. The scales that are produced Cronbach's Alpha, if the coefficient is greater than 0.7, it considered as reliable. But, if it is less than 0.7, then it is considered as unreliable.

3.9 Data Analysis

After gathering all the questionnaires, the data is gathered, reviewed and analyzed which will helped in compiling the findings section. As it was a quantitative research and basically involves some quantitative analyses with the use of descriptive statistics (which was applicable for gender, age and frequency of visit). A SPSS Program (Statistical Package for the Social Sciences) Version 17 is used to analyze the data for further discussion in the study. By using the descriptive statistics, the frequencies, mean and the standard deviation were identified. The Pearson's Correlation and Multiple Linear Regression Test were used to the hypothesis testing. In addition, Microsoft Excel was also used to compare the mean score between expectation and perception in order to identify the discrepancy gap mean.

3.10 Limitations of study

Certain limitations are found during the survey. After distributing the questionnaires, it was difficult to collect the data in time. Some customers are not willing to participate in the survey.

3.11 Ethical Issue

This study has remained within certain parameters of ethical consideration in order to understand the difference between right and wrong practices. Certain parameters that have been respected such as the respondent should not be either forced or influenced by the interviewer to answer any questionnaire. The respondent's identity should not be disclosed and treat the information with strict confidentiality. Any information given by the respondents should not be modified.

3.12 Conclusion

The research methodology provided a rational for the research approach and methods undertaken in this study. This chapter justified the quantitative research approach, research instrument and sampling strategy used within the context of the proposal. It also highlighted the limitations and ethical aspects on the research.

Chapter 4: ANALYSIS AND FINDINGS

4.1 Introduction

This chapter presents the results of the study consisting of the personal detail of the respondents, the customer's expectation and perception of the service quality, the discrepancy gap and the influences of service quality on customer satisfaction and retention at KFC. The analysis consists of descriptive statistics such as the frequencies percentage, means, standard deviations, cross tabulation, hypothesis testing and reliability testing.

4.2 Presentation of descriptive statistics

Section A: Personal Information

A1: Gender

Figure 4.3: Respondents' gender

Figure 4.3 shows that 45% of male and 55% of female is KFC's customers. The female customers are 5% more than the male. This means that female customers prefer KFC most and willing to fill in the questionnaire.

A2: Age

Figure 4.4: Respondents' age

As shown in Figure 4.4, customers of 18-35 years old have the highest percentage of 41.7 and the lowest 11.4% is the customers who are over 50 years old. The elders do not prefer KFC that much like the customers of 18-35 years old. The customers' less than 18 years ranks second with a percentage of 25.7 and they are the future potential customers of KFC.

A3: Frequency of visit

Figure 4.5: Respondents' frequency of visit

Figure 4.5 shows that people are more likely to visit KFC on a monthly or on an occasionally basis for an enjoyment as there is a difference of 4%. In contrast, some customers visit KFC frequently as described 11.4% daily and 17.7% weekly customers. But, 20.00% of customers visit KFC for the first time and in future, they can come back again.

Section B

This section assess the customers' expectation and perception level towards service quality and to identify the discrepancy gap between customers' expectation and perception level towards service quality.

With the help of the above table, the first and second objectives of the study: customers' expectation and perception level towards service quality and the discrepancy gap between customers' expectation and perception level towards service quality were assessed.

The above results shows that in the reliability dimension, amongst with the four factors, only two factors (the service must be perform right at the first time and the staff must perform tasks that have been promised) were rated higher in terms of expectation as well as perception. The respondents expect more on doing things right at the first time and perform as promised. Billing system and well-trained employees have the least importance for the respondents. But, KFC have not performed up to the customers' expectation and the customers create a negative perception. Thus, the statistics confirmed that KFC performs below customers' expectation with a negative gap mean of -0.6743 in total under this dimension.

The respondents' expectation and perception on assurance was based on three factors: employees' occupational knowledge, confidence and safety /security. The statistics shows that employees' occupational knowledge was rated higher both in terms of expectation and perception among the others. The mean for the all three factors in expectation and perception were approximately similar. The staffs were perceived of no interest to create confidence in customers and to ensure safety and security. However, the respondents' expectation on the safety and security of the place was 3.6971, that is, the lowest among the three factors. KFC performed above the customers' expectation only on one factor, the safety and security of the place with a level of perception of 3.7143 which results in a positive gap mean of 0.0172. The other factors have a negative gap mean.

There were four factors measured under tangibility: printed and visual materials, restaurant's décor, food packaging and staff's uniform and appearance. The respondents have a very high level of expectation where the restaurant's décor were higher and the least was the staff's uniform and appearance. In terms of perception, printed and visual materials were rated higher and the least was staff's uniform and appearance. This means that the customers give more importance to the restaurant's décor and least importance to staff's neat uniform and appearance. Out of the four factors, only the respondents' perception for the printed and visual materials meet their expectation with a positive gap mean of 0.3257.

According to the four factors of empathy: individual attention, enthusiasm to serve, understand customers' specific needs and friendly/courtesy, the respondents' expectation and perception were significantly the same with no great differences. The respondents' perception did not meet their expectation in any of these four factors. The staff shows no interest in their job as seen in the statement of all the four factors. Thus, this signifies a negative gap mean in all of the four factors.

Under the responsiveness dimension, there were three factors: waiting time for service delivery, staff availability and undesirable situations treated with care and seriousness. The rating for expectation and perception were statistically similar. KFC performed below the customers' expectation. Based on the statistics, the staff seems not willing to help customers when needed and especially in undesirable situations. In addition, the staffs are not rapid in delivering service on time. Again, this dimension gets a negative gap mean.

Overall, the findings show that respondents have a very high expectation mostly importantly in tangibility (16.1599) and empathy (16.1142). They were not that interested on assurance (11.2228) and responsiveness (11.8457) as compared to others. The perception was highly rated for tangibility (16.1771) and the poorly rated was responsiveness (10.6401). The overall performance was very poor as all the dimensions get a negative gap mean except of tangibility with a positive gap mean of 0.0172 in total.

Section C

This section identifies the SERVQUAL dimensions which have an influence on customer satisfaction and retention.

The table above shows that reliability dimension influence customer satisfaction the most with a statistic of 3.8914, followed by tangibility, assurance, responsiveness and the last is empathy. Customer retention is mostly influenced by tangibility with a rating of 3.8229, followed by assurance, reliability, empathy and the last is responsiveness. It is important to note that empathy gets the worst rating in customer satisfaction and responsiveness in customer retention which indicate that KFC have not paid particular attention on this dimension.

C27. Overall, how is the quality of KFC's service provided?

The majority of respondents rates the overall service quality provided by KFC as good. The percentage between excellent and good has a difference of 22%. Only 4 % of the respondents are of opinion that the service is poor at KFC. With reference to the literature review, Hooley, Saunders and Piercy (2004) said that "A prime factor in differentiating the product or service from that of competitors is quality. Quality concerns the fitness for purpose of a product or service". With the statistics shown above proves the statement of this author as the majority likes the quality which indicates that KFC focuses more on its service quality compared to its competitors.

C28. Overall, how satisfied are you with the services provided by KFC?

As shown in Figure 4.5, 42.9% of customers were satisfied with the overall service provided and 24.0% were strongly satisfied. Some customers were dissatisfied with a percentage of 15.4 and 13.7% were neutral, this shows that there is still a chance to change their opinion in future. Finally, KFC has strongly dissatisfied 4.0% of its customers with their service provided.

C29. I will come back again to KFC.

The Figure 4.6 illustrates that majority of 39.4% of respondents intend to come back again and 28.0% strongly agree. There is a small percentage of 4.0% who strongly disagree and 12.0% disagree to come back again. KFC has a small portion of customers which they cannot retain. However, 16.6% was neutral, that is they were not sure if they will come back again or not.

4.3 Cross Tabulation

The above table shows that a cross tabulation between the overall satisfaction regarding the services provided and gender. It is clearly indicate that the most of 18.9% male and 24.0% female respondents satisfied with the service provided.

The table 4.4 shows a cross tabulation between the overall service quality provided and age. Most of the 10.3% respondents less than 18 years old are of opinion that the service quality is good. None of the respondents between 18-35 years old agree that the service quality was poor which indicates that these respondents are happy with the service quality. Respondents over 50 years old are not interested in the service quality provided as on 1.1% finds the service quality excellent.

Case 3

Expectation- The billing system must be efficient * Frequency of visit Crosstabulation

The billing system must be efficient

The above table shows that the cross tabulation between the expectation on the billing system and the frequency of visit. The 9.7% of first time visitors strongly agree with the statement. While the daily visitors strongly disagree and disagree with the above statement which indicates that they do not have any expectation with the billing system. In addition, the 6.9% of occasional visitors are neutral with the statement as they did not show their opinion since they choose neither agree nor disagree.

Case 4

Perception- The billing system is efficient * Frequency of visit Crosstabulation

The billing system is efficient

The above table shows a cross tabulation between the perception of the billing system and the frequency of visit. 7.4% of first time visitors agree with the statement which signifies that the billing system appear to be efficient for them. While the weekly visitors seems extremely happy with the system as 7.4% strongly agree with the statement compared to the others.

4.4 Hypothesis Testing

Hypothesis 1: Overall service quality positively influences customer satisfaction.

H0: There is no relationship between the service quality and customer satisfaction.

H1: There is relationship between the service quality and customer satisfaction.

Correlations

Overall, how is the quality of KFC's services provided?

Overall, how satisfied are you with the services provided by KFC?

Overall, how is the quality of KFC's services provided?

Pearson Correlation

1

.859**

Sig. (2-tailed)

.000

N

175

175

Overall, how satisfied are you with the services provided by KFC?

Pearson Correlation

.859**

1

Sig. (2-tailed)

.000

N

175

175

**. Correlation is significant at the 0.01 level (2-tailed).

Based on the statistical test in the above table 4.7, there exist a positive correlation between the overall service quality and customer satisfaction as the P-Value <0.05 thus H1 is accepted. It was concluded that there exist a significant relationship between the service quality and customer satisfaction at KFC since the Pearson's Correlation value is 0.859** and a positive value which is close to 1. This shows that an improvement in the service quality will lead to an increase in customer satisfaction. In the literature review, the statement given by Sureshchandar et al, (2003) and Spreng and Mackoy (1996) that service quality leads to customer satisfaction and there exists a relation between both of them proves to be positive in this hypothesis testing.

Hypothesis 2: Overall service quality positively influences customer retention

H0: There is no significant relationship between service quality and customer retention.

H1: There is significant relationship between service quality and customer retention.

Correlations

Overall, how is the quality of KFC's services provided?