Keywords

Food Quality, Price Fairness, Location and Physical Environment, Satisfaction, Retention.

Introduction

Egypt's GDP rose by 6.6% in fiscal year 2021/2022, compared to 3.3% the previous year. The restaurant industry is a rapidly growing and complex type of business all over the world. Egypt is a developing and overpopulated country where many individuals visit oriental food restaurants on a regular and infrequent basis. Building relationships with customers and offering quality service are essential in the restaurant industry (Saleem and Raza, 2014). Services are intangible; they cannot be measured and counted. In restaurants, food is delivered. Food services related to speed and reliability of delivery. Customer feelings, perceptions, and expectations are crucial in the restaurant industry for customer satisfaction, loyalty, and retention. Food category or a variety of food and service quality is both essential antecedents for restaurant choice and customer loyalty (Han et al., 2018).

In the restaurant industry, a highly competitive business climate makes it essential for businesses to exceed customer expectations in order to survive in the long run. Customer satisfaction is essential to the restaurant business since it may impact customer loyalty and retention at a low cost (Shariff et al., 2015). Customer perceived value of any product or service plays an important role in brand loyalty. Making customers loyal in a service factory, such as an oriental-food restaurant, is the ultimate objective of offering value-based service and food (Izquierdo-Yusta et al., 2019). Customer satisfaction is increased by the quality of food and service, competitive prices, and a pleasant environment (Jani and Han, 2015). Gaining loyal customers requires achieving high levels of customer satisfaction. Although they are also customers, managers and owners of restaurants view loyal customers as being significantly more important than casual ones (Espinosa et al., 2018). Restaurants can benefit from improved profitability, positive word of mouth, frequent visits from loyal customers, and reduced marketing and promotional expenses when customer satisfaction levels are higher. The importance of service quality in exceeding customers' expectations for a given service has long been recognized (Raza et al., 2020). More loyal customers are attracted when a greater degree of service quality is provided, as this improves consumer confidence in the product or service (Liu et al., 2017). Price has been observed to be a key component in evaluating the value of a certain service (Malik et al., 2020). The concept of perceived price fairness has also achieved substantial prominence among professionals in the field of service marketing (Yieh et al., 2007). The value received affects the customer's perception of a service's price fairness (Andres-Martnez et al., 2014).

Currently, restaurant owners are giving much attention to customer satisfaction and retention because it is very much related to their business profitability. There is a dearth of research regarding customer satisfaction and retention in a service factory like oriental food restaurant business in Egypt till date.

Literature Review

Food quality, price fairness, location and physical environment are considered the independent variables, customer satisfaction is considered the mediator variable and customer retention is considered the dependent variable.

Location and Physical Environment, Price Fairness, Food Quality and Customer Satisfaction

Customer satisfaction is the evaluation or feelings a customer has about a product, service, or experience after comparing their expectations to the actual performance or outcome (Kotler and Keller, 2016; Cuison et al., 2021). Customer satisfaction is essential to a company's success because satisfied consumers are more likely to repurchase products or services and recommend the company to others, whereas dissatisfied customers are more likely to switch to rivals and share their negative experiences. Satisfying customer needs is a company's objective, which increases its competitive advantage (Cuong, 2020).

A strong predictor of future success is the location in which a restaurant operates. Parsa et al. (2011) suggested that factors such as service quality, price fairness, and expert administration may be ineffective if a restaurant does not have a superior location. The main characteristics of an ideal location for a restaurant are simple access, volume, the total number of residents in the area, the level of rivalry, and the population's financial position (Hanaysha, 2016). Location and physical environment (decoration, layout, illumination, color, etc.) affect a customer's expectations and perceptions, and consequently their level of satisfaction (Belal, 2019).

According to Campbell (2007), price fairness is "a consumer's subjective perception that a price is fair, just, or legitimate as opposed to incorrect, unjust, or illegitimate." Occasionally, consumer’s judge the fairness of a price based on a rival's pricing (Xia et al., 2004). Surprisingly, the growing acceptance of pricing justice may also result in increased consumer satisfaction and loyalty (Jin et al., 2019). Similarly, if the price is considered unfair or unreasonable, dissatisfaction will result. This type of behavioural connection tends to occur in the food service restaurant industry, where reasonable or equitable pricing is associated with increased customer loyalty and commitment (Nikbin et al., 2016). Indeed, prices that are competitive or reasonable have a substantial impact on consumer repurchase intentions and satisfaction (Kotler and Keller, 2012).

A difficult task for restaurant businesses involves providing fresh, high-quality food. A satisfied customer may be a valuable referral source, but only if the food is of a satisfactory standard. The quality of food is a major priority for both consumers and businesses (Ryu and Han, 2010). It is expected that food quality is related to customer satisfaction (Bujisic et al., 2014).

Location and Physical Environment, Price Fairness, Food Quality and Customer Retention

Customer retention is defined as a company's capacity to maintain favourable customer relations sufficient for customers to continue purchasing its products or services (Kotler et al., 2008). According to Wertz (2018), customer retention is more cost-effective than acquiring new customers. As a result of businesses' customer retention strategies, retained loyal customers are willing to pay more, make more purchases, and resist switching brands (Evanschitzky et al., 2012). Therefore, retaining loyal customers is essential for businesses (Shsarma et al., 2020).

The well-located and ample parking space is advantageous for both the restaurant management and the customers, who frequently view the cost of obtaining parking near a restaurant as a non-revenue-generating expense. This explains the value of convenient parking as well as the direct effect it has on consumer intentions to dine at a restaurant (Warraich et al., 2013). All of these factors increase the customer retention rate and loyalty to that restaurant (Bateson and Hoffman, 1999). The restaurant's physical environment is another factor that can contribute to its competitive advantage. The physical environment of a restaurant comprises all the tangible and intangible elements that exist inside and outside. These expenditures are the most essential investments for attracting customers (Azim et al., 2014), so restaurant managers should make substantial investments in interior designs, decorations, floor cleanness, and other accessories that will improve the physical environment.

A well-maintained physical environment in a restaurant should then provide customers with a memorable experience and make them willing to return frequently. Choi et al. (2013) highlighted that the physical environment consists of aesthetics, surrounding, functionality, and convenience. Several scholars and restaurant managers have emphasised the significance of constructing a visually stunning physical environment as a significant factor in enhancing the retention and satisfaction of customers in the hospitality industry (Ryu and Han, 2010).

According to the Price Fairness literature, customer price fairness evaluations directly influence post-purchase attitudes and behaviours (Rothenberger, 2015) and result in positive or negative word-of-mouth and repurchase intentions. Empirical studies have also supported a strong, positive relationship between perceived price fairness and customer retention (Mansuthi and Han, 2020).

According to Namkung and Jang (2007), food quality was linked to utilitarian values. The concept of food quality is determined by price, flavour, menu choice, portion size, and healthiness options. The empirical study confirmed that the numerous food characteristics serve as genuine indicators of quality. From the perspective of customers, food quality is the key determinant in restaurant selection, according to Susskind and Chan (2000). Mattila and Wirtz (2001) further stated that restaurant food quality is the key determinant of customer loyalty in casual dining restaurants. In support, Grunert (2005) stated that consumer choice and demand are related to food quality. According to these studies, there may be an important relationship between food quality, customer satisfaction, customer retention, and customer loyalty.

Customer Satisfaction and Customer Retention

According to Kumar (2012), Lombard (2009), Santouridis & Trivellas (2010), customer satisfaction with services is defined as the extent to which service performance meets or exceeds the customer's expectations. In a similar vein, Hui and Zheng (2010) defined satisfaction as an assessment of a particular transaction as a result of perceived quality. However, customer retention is characterised by Danesh, Nasab, and Ling (2012) as "the future propensity of a customer to stay with the service provider". They argued that there are other factors that participate in the retention of customers in addition to customer satisfaction. Customer retention was defined by Ramakrishnan (2006, cited in Molapo and Mukwada, 2011) as the marketing objective of keeping a customer from switching to a rival. According to Edward and Sahadev (2011), "customer retention indicates customer's intention to repurchase a service from the service provider." The customer's intention to stay loyal to the service provider was identified by customer retention. For them, customer satisfaction and service quality are crucial antecedents of customer retention.

Satisfied customers are typically more likely to return to a firm and make repeat purchases, resulting in customer retention (Singh et al., 2021; Slack et al., 2020c). Customer satisfaction has been shown to have a direct, positive effect on customer retention in several studies (Byun and Jang, 2019; Kim et al., 2020; Singh and Slack, 2020). This result that customer satisfaction is related positively to customer retention has been supported by various empirical studies of the restaurant business (Ryu et al., 2012; Zhong and Moon, 2020). Numerous studies have linked customer satisfaction with retention, and it has been suggested that in order to keep customers, managers must understand this relationship (Sim et al., 2006).

Conceptual Framework

Based on the literature review discussed above, the research conceptual framework was formulated as below Figure 1.

Measurement

The independent variables (food quality, perceived price fairness, location and physical environment) are adapted from (Belal Uddin, 2019; Ahmed et al., 2023; Singh et al., 2022). The mediator variable (customer satisfaction) is the measured by (Belal Uddin. 2019). In addition to that, the dependent variable customer retention is adapted from (Singh et al., 2022; and Al-Tit, 2015).

Research Methodology

This research aims to examine the relationship between food quality, price fairness, location, physical environment as well as customer retention, with the customer satisfaction of oriental food establishments in Egypt serving as a mediator. Quantitative research based on an online survey was chosen as the methodological approach (Creswell, 2013). The questionnaire data is analysed using the Statistical Package for the Social Sciences (SPSS) for quantitative data analysis, including descriptive statistics (frequencies and percentages), and Structural Equation Model analyses (SEM) using Analysis Moment of Structures (AMOS) software for the hypothesised model analysis.

Results

Seven hundred (700) respondents received the research questionnaire, 482 questionnaires representing 68.9% were returned, 72 questionnaires representing 10.3% were incomplete, ineligible, or refusals, and 218 (31.1%) were unable to be reached. With 410 valid responses and a response rate of 58.6%, the response rate for this study is more than adequate. Measurement items have standardised loading estimates of at least 0.5 (ranging from 0.607 to 0.912 at the 0.05 alpha level), indicating the convergent validity of the measurement model. Discriminant validity shows how different a construct is from other constructs (Hair et al., 2019).

According to Hair et al. (2019), the Average Variances Extracted (AVE) has to be greater than 0.50 at all times. The AVEs of the constructs are higher than 0.50 (Perceived Food Quality = 0.720, Perceived Price Fairness =0.575, Location and physical Environment= 0.620, Customer Satisfaction =0.789, and Customer Retention =0.698). Generally speaking, these measurement findings are adequate and support continuing with the structural model testing. The reliability of a construct in a measurement model is calculated using Composite Reliability (CR). CR (Food Quality Perceived = 0.928, Price Fairness Perceived = 0.843, Location and Physical Environment Perceived = 0.889, Customer Satisfaction Perceived = 0.937, and Customer Retention Perceived = 0.920). All constructs in the measurement model were found to have high reliability, as was expected. Overall, CR is a more presentable technique of reliability since it demonstrates the construct's consistency (Hair et al., 2019).

Hair et al. (2019) claim that the relationships between the latent variables show that each of the hypothesised effects generated for this research model accurately reflects the significance and degree of each impact, resulting in a good model fit. Overall, a model's fitness measurement was higher than what was considered to be acceptable because each test for the significance of the relationship between the variables was conducted individually. It demonstrates that there is a relationship between customer retention and perceived food quality (=0.136, CR (Critical Ratio) = 1.992, CR>1.96, p=0.046, p=0.05). Therefore, it is supported that (H1: Perceived food quality has an impact on customer retention in Egyptian oriental food chains) Figure 2.

Structural Model

Furthermore, the hypothesis (H2: Perceived price fairness has an impact on Customer Retention in Egyptian oriental food chains) is supported as the result shows that ( = 0.148, CR (Critical Ratio) = 8.308, CR > 1.96, p=0.000, p0.05), as it predicts that " There is a relationship between Perceived price fairness and Customer Retention ". The result shows that (H3: location and physical environment have an impact on customer retention in oriental food chains in Egypt) is supported because (β = 0.217, CR (Critical Ratio) = 3.036, CR > 1.96, p = 0.002, p0.05), as it predicts that "There is a relationship between location and physical environment and customer retention".

The finding indicates that (H4: perceived food quality has an impact on customer satisfaction in Egyptian oriental food chains) is supported as the result shows that ( = 0.279, CR (Critical Ratio) = 8.128, CR > 1.96, p = 0.000, p0.05), as it predicts that " There is a relationship between Perceived food quality and the Customer Satisfaction ". In addition, the fifth hypothesis (H5: perceived price fairness has an impact on customer satisfaction in Egyptian oriental food chains) is supported as the result shows that ( = 0.376, CR (Critical Ratio) = 26.384, CR > 1.96, p = 0.000, p0.05), as it predicts that " There is a relationship between perceived price fairness and customer satisfaction ". Furthermore, (H6: location and physical environment have an impact on customer satisfaction in oriental food chains in Egypt) is supported as the result shows that ( = 0.205, CR (Critical Ratio) = 3.917, CR > 1.96, p = 0.000, p0.05), as it predicts that "There is a relationship between Location and Physical Environment and Customer Satisfaction ".

Furthermore, (H7: customer satisfaction has an impact on customer retention in Egyptian oriental food chains) is supported by the result, which shows that (=0.391, CR (Critical Ratio) = 8.128, CR > 1.96, p = 0.000, p0.05), as it predicts that "There is a relationship between customer satisfaction and customer retention ". The results demonstrate that customer satisfaction has a statistically significant indirect impact on perceived food quality and customer retention (P = 0.003, P0.05). The mediation effect results show that there is a partial mediation effect of customer satisfaction between the relationship between perceived food quality and customer retention. As a result, the hypothesis (H8: customer satisfaction mediates the relationship between perceived food quality and customer retention in Egyptian oriental food chains) is supported. The findings also demonstrate that perceived price fairness has a statistically significant indirect impact on customer retention via customer satisfaction (P = 0.002, P0.05).

The mediation effect results show that there is a partial mediation effect of customer satisfaction between the perceived price fairness and customer retention. As a result, the hypothesis (H9: customer satisfaction mediates the relationship between perceived price fairness and customer retention in Egyptian oriental food chains) is supported. Finally, results demonstrate that location and physical environment have a statistically significant indirect impact on customer retention via customer satisfaction (P = 0.037, P0.05). The mediation effect results show that there is a partial mediation effect of customer satisfaction between the relationship between location and physical environment and customer retention. As a result, (H10: customer satisfaction mediates the relationship between location, physical environment, and customer retention in Egyptian oriental food chains) is supported.

Discussion

The purpose of this paper is to investigate the relationship between food quality, price fairness, location and physical environment, as well as customer retention, with the mediation role of customer satisfaction in oriental food chains in Egyptian. Additionally, a model explaining the relationships between the variables is validated in this paper. Hair et al. (2019) claim that the relationships between the latent variables show that each of the hypothesised effects generated for this research model accurately reflects the significance and degree of each effect, resulting in a good model fit. Overall, a model's fitness measurement was higher than what was considered to be acceptable. The hypothesis (H1: Perceived Food Quality Has an Impact on Customer Retention in Oriental Food Chains in Egypt) is supported by the individual tests of significance of the relationship between the variables. This result is consistent with claims made by Namkung and Jang (2007) and Grunert (2005) that consumer food quality is linked to consumer utilitarian values.

The idea of food quality is determined by the cost of food, tastiness, food quantity, menu choice, and healthiness alternatives since it is regarded as the key determinant in restaurant selection (Susskind and Chan, 2000). Furthermore, the results show that (H2: perceived price fairness has an impact on customer retention in the oriental food chains in Egypt ) is supported. This is compatible with the findings of Manosuthi and Han (2020), who found a strong, positive relationship between customer perception of price fairness and customer retention, as well as that customer perceptions of price fairness impact consumer engagement in frequent purchases. Furthermore, studies in the restaurant business (Singh et al., 2022; Clemes et al., 2010; Han and Ryu, 2009; Hyun, 2010) confirmed the positive effect of customer-perceived price fairness on customer retention, as well as the risk to customer retention when customers consider pricing to be unfair. According to Hanaysha (2016), Nawaz (2013), and Aksel (2013), price fairness is a strong predictor of customer retention in the restaurant business. According to the findings of Rothenberger (2015), clear pricing is the most crucial element in the success of a restaurant. The result shows that (H3: location and physical environment have an impact on customer retention in Egyptian oriental food chains) is supported. Previous studies supported the idea that a restaurant's location is a key factor in customer retention and revisit intentions.

According to studies (Ahmed et al. 2019; Minai and Lucky, 2011), restaurants that are located in prominent locations with ample parking and a positive physical environment attract customers. Furthermore, a study done by Voon (2017) revealed that these aspects contribute to customer retention since fair prices cannot attract customers if the physical surroundings of the restaurant are inadequate. Hanaysha (2016) examined the drivers of customer retention in the restaurant business. The study revealed that the accessibility and visibility of a restaurant are significant factors affecting customer retention. According to Canny (2014), a restaurant's physical environment is a key marketing factor for differentiating itself by providing a memorable customer experience in a nice and comfortable environment. As a result, the physical environment has a greater impact on both acquiring and sustaining existing customers.

The result shows that (H4: Perceived food quality has an impact on customer satisfaction in the oriental food chains in Egypt). This is aligned with the findings of Namkung and Jang (2007), who found that the quality of food experienced a high impact on both repeated customer patronage and customer satisfaction. The degree of customer satisfaction has a relationship with both food and service quality. A higher level of satisfaction cannot be guaranteed by high-quality service without high-quality food. (Belal, 2019; Kim and Ham, 2016) Offering excellent standards of food and service quality could improve customer satisfaction.

In addition, the fifth hypothesis (H5: perceived price fairness has an impact on customer satisfaction in the oriental food chains in Egypt) is supported. This result is consistent with Kim et al., 2015; and Wang et al., 2018, who emphasised that consumers' perceptions of price fairness can have a substantial impact on their product or service satisfaction. If consumers perceive a product or service's price to be reasonable, they are more probable to be satisfied with their purchase. In turn, this increases the probability of retention and positive word-of-mouth recommendations (Liu & Jang, 2020; Wang et al., 2020; Jia et al., 2021). In addition, (H6: Location and physical environment have an impact on customer satisfaction in the oriental food chains in Egypt) is supported. Location and physical environment (decoration, layout, illumination, colour, etc.) affect a customer's expectations, perception, and consequently satisfaction (Belal, 2019). Due to Lam (2001) and Kwon et al., (2016), a customer’s entrance into a place and their emotions are both highly influenced by a good location and a pleasant atmosphere.

In addition, there is evidence to support (H7: customer satisfaction affects customer retention in the oriental food chains in Egypt). According to the literature (Berezina et al., 2012), retention is a result of service quality, customer satisfaction, and brand loyalty. Customer retention "indicates customer's intention to repurchase a service from the service provider," as stated by Edward and Sahadev (2011). Consequently, happy consumers are more likely to return to a restaurant and make further purchases (Singh et al., 2021; Slack et al., 2020c). Several prior studies (Byun and Jang, 2019; Kim et al., 2020; Singh and Slack, 2020) have assured the direct positive effect of customer satisfaction on customer retention. Our data supports the hypothesis that (H8: customer satisfaction mediates the relationship between perceived food quality and customer retention in oriental food chains in Egypt). Specifically between service quality and customer retention, customer satisfaction has been found to have a mediating role in several studies (Daz, 2017; Al-Tit, 2015; Jiang & Zhang, 2016).

Findings also show that (H9: customer satisfaction mediates the relationship between perceived price fairness and customer retention in the oriental food chains in Egypt) is supported. This is in line with Dawes (2009) and Han and Hyun (2015), who stated that customer satisfaction influences customers' perceived price fairness. El-Adly (2019) further suggested that customer satisfaction partially mediates the interrelationship between price and post-purchase behaviour. Results also show that (H10: customer satisfaction mediates the relationship between Location and physical environment and customer retention in Oriental food chains in Egypt) is supported. One of the most important variables that encourage consumers to choose a certain restaurant that satisfies their needs and wants about the quality of the food, the location of the restaurant, its accessibility easiness, and the environment of the restaurant. The location of a restaurant is a significant factor in customer retention and intentions to revisit. According to studies, consumers are more likely to revisit a restaurant that is conveniently located, has ample parking, and has a clean physical environment (Ahmed et al., 2019).

Model Validation

This paper developed and validated a model regarding the relationship between food quality, price fairness, location and physical environment and customer retention with mediation role of customer satisfaction of oriental food chains in Egypt using structural equation modelling. This is done through two steps:

First step, measurement model: the measurement model which consists of 5 latent variables, namely, Perceived Food Quality, Perceived Price Fairness, Location and physical Environment, Customer Satisfaction and Customer Retention.These 5 latent variables are measured by 23 observed variables. The standardized loading of the measurement items is performed to assess the internal consistency of the constructs in the measurement model. The level of internal consistency for each construct was acceptable, with the standardized loading ranging from 0.670 to 0.912 which exceeded the minimum hurdle of 0.50.

Second step, structural model summary: The 5 factor was subjected to CFA using the AMOS software. DF was 219 (it should be more than 0), χ² /DF has a value of 2.328, that is less than 3.0 (it should be less than or equal 3.0). The RMSEA was .057 (it should be less than 0.08). The TLI index was .957 which is very close to 1.0 (a value of 1.0 indicates perfect fit). The CFI was .963. All indices are close to a value of 1.0 in CFA, indicating that the measurement models provide good support for the factor structure determined through the CFA.

Based on the outcome of the measurement model analysis and the structural model analysis, the research model was re-arranged to conform to the outcome of the two analyses, the final model is validated.

Author Contribution

This study is important both academically and practically. Academically, the current research fills the gap and adds to the body of knowledge. The research generated a model that provides knowledge to other models that have recommended expanding the area of the investigation using structural equation modeling. The results show that the estimated structural model corroborated the seven hypotheses,as Perceived Food Quality, Perceived Price Fairness and Location and physical Environment constructs explained 58.3 % of Customer Satisfaction variance (R² = 0.583), Besides, Perceived Food Quality, Perceived Price Fairness and Location and physical Environment constructs through Customer Satisfaction explained 62 % of Customer Retention variance (R² = 0.620).

The research findings have various practical implications for the development of the oriental food chains in Egypt. From the perspective of management, this research recognises the significance of various customer satisfaction criteria in predicting customer retention. Thus, restaurant owners and managers of oriental food chains should create an attractive environment and provide the necessary facilities to give customers a high perceived value, which will positively influence their satisfaction and willingness to continue eating and recommend the restaurant to others. Restaurant managers should pay close attention to the quality of service in their restaurants. Service quality is not directly measurable ; rather, it is the consumer's perception immediately following service delivery. Training for front-line workers, as well as time to deliver meals and receive a bill, are essential for improving service quality. Restaurants should deliver decent and healthy meals in terms of food quality. Price competitiveness plays an important role in the restaurant sector. Customers are extremely price sensitive, thus pricing strategies should be based on the competitor's pricing strategy as well as other internal and external concerns. client satisfaction factors such as food quality, price fairness, location, and environment are linked to client patronage and repeat purchase intentions. Customer retention is more likely when they are more satisfied.

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Received: 21-Jun-2023, Manuscript No. AMSJ-23-13724; Editor assigned: 22-Jun-2023, PreQC No. AMSJ-23-13724(PQ); Reviewed: 29-Sep-2023, QC No. AMSJ-23-13724; Revised: 18-Oct-2023, Manuscript No. AMSJ-23-13724R); Published: 20-Nov-2023