AMY ONG BEE WAN RESEARCH METHODS – SECRET RECIPE TASK 1 – THE DEGREE OF OVERALL CUSTOMER SATISFACTION / LOYALTY Introduction Secret Recipe Cakes and Café ("SR") is a Malaysian café and bar franchise founded in 1997. It has since become the largest café chain in Malaysia and has franchised internationally in Asia. As of 2011, SR took the spotlight with 250 outlets in Malaysia while Old Town White Coffee and Starbucks trailed behind at 160 outlets and 115 outlets, respectively. However, it is noted that competition within the food and beverage industry is becoming increasingly stiff. As a research assistant of SR, I am given the task to conduct a critical literature review on factors that influences the degree of overall customer satisfaction and loyalty. Customer Satisfaction and Loyalty Customer satisfaction is defined as the overall evaluation of the service provided. It is a determining factor on future purchase intentions or customer loyalty. It has been established that increasing customer loyalty has a positive correlation with increasing long-term financial performance, positive word-of-mouth and a better brand image. The aim of this research is to allocate appropriate resources to factors that will yield the greatest return in terms of customer satisfaction and loyalty. Informal Approaches Informal approaches utilised by SR are insufficient in gaining competitive advantage. Speculation is the forming of a theory without sound evidence. Ad hoc feedback refers to unplanned feedback collection. Cursory observations is a quick and vague observation. Lastly, an educated guess is a subjective opinion based on experience and knowledge. Factors That Influence The Degree Of Overall Customer Satisfaction This critical literature review is based on studies that affect customer satisfactions. Four of the journals researched on mid-to upscale restaurants as well as restaurants in general in the United States of America. These are the most relevant studies to be applicable to SR. Although SR is a café, they provide full fledge café services including food and local varieties. First and foremost, the ultimate determination of customer satisfaction in a restaurant is perceived value. It is described as a highly subjective form of evaluation about an entity's overall excellence as a measure of their money's worth. The article by McDougall and Levesque (2000) is one of the top researches on customer satisfaction; perceived value scored the highest, followed by core quality and relational quality on satisfaction and future intentions in a restaurant. Newer studies showed perceived value is still a determinant on customer satisfaction by encompassing diverse quality factors for a more comprehensive interpretation. Marketing researches would support that satisfaction and perceived quality are both fundamental elements for an effective service management. Therefore, Secret Recipe Cakes and Café should be primarily concerned about the value for money we offer to our customers. The second influence that lead to better customer perception of higher customer satisfaction is food quality. Using a structural equation model, the result shows that overall food quality significantly affects customer satisfaction and behavioural intentions. Food quality explains 56 percent in determining customer behavioural intentions. Among the many attributes of food quality, taste and presentation were the greatest contributors to customer satisfaction and behavioural intentions as compared to menu item variety and temperature. Later studies showed consistent findings with taste and presentation as critical food quality attributes in determining highly satisfied customers. Instead of developing newer menu items, SR should focus on popular menu offerings and allocate limited resources to improve the taste and create a visually appealing presentation to enhance customer satisfaction. As such, it will lead to favourable outcome of increased revisit. The third factor of customer satisfaction is the atmospheric environment of the restaurant. The physical environment itself may influence the customer's mood and perceptions. Tangible cues on the physical environment that affects customer satisfaction includes spatial layout, interior design and music. Current studies present physical environment as a tangible source or artefact for customers to conjure views on an intangible service they will experience in a restaurant. Perceived through the the customer's senses, physical environments can influence the customer's ratings on meals, orders, duration of stay, and social interactions. However, customers are also the users and creators of the physical environment as they are affected differently by it. With that in mind, SR have to plan the physical environment according to the customers' perspective and create a suitable environment. There are also factors that have no effects on customer satisfaction. Supported by empirical literature, technology is an ineffective aspect. SR uses IBM SurePos, iWaiter, Palm Personal Digital Assistants (PDAs) to take orders, and Enterprise Resource Planning (ERP) system in order to reduce serving time. Although serving time is reduced and employees' productivity increased, technology is just an alternative to employees serving the customers. The implementation led to only a 5 percent increase in sales. Besides that, as previously mentioned, variety and temperature are unimportant factors in promoting customer satisfaction. Therefore, SR should restrain from investing into these aspects anymore as they would not yield high customer satisfaction.   REFERENCES 1 1192 Customer satisfaction with Services – yr 2000 2 203 Does food quality really matter – yr 2007 3 123 Satisfied customers – yr 2008 4 159 The physical environment – yr 2012 5 SR Case Study 6 http://www.oxforddictionaries.com/definition/english/speculation 7 http://www.collinsdictionary.com/dictionary/english/ad-hoc 8 http://www.macmillandictionary.com/dictionary/british/cursory 9 http://www.oxforddictionaries.com/definition/english/educated-guess 10