CHAPTER 1 1.0 Introduction Rapid development and the popularity of the contemporary coffee shop is booming in Malaysia especially in the city for example Kuala Lumpur, Selangor and Cyberjaya. The emerging of café and bar showed rapid involvement toward coffee drinking and trends. According to Rahman (2010), showed that coffee drinking trend had undergone several phase of changes in Malaysia. The coffee drinking trends significantly contributed to the Malaysian current economies either through industrial or gastronomic activities. Currently in Malaysia, coffee drinking habits had been a tremendous setting toward the society and it occurred to fulfil the needs and demands of the society, it had built up a trends and social interaction toward culture and lifestyle. According to Vago, S. (2004), a social status was determined primarily by one’s style of life, how one consume the product and experience it, rather than how one produced”. 1
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CORRECTION UNDERSTANDING CONSUMER PERCEIVED VALUE TOWARD COFFEE DRINKING TRENDS
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CHAPTER 1
1.0 Introduction
Rapid development and the popularity of the contemporary coffee shop is booming in
Malaysia especially in the city for example Kuala Lumpur, Selangor and Cyberjaya. The
emerging of café and bar showed rapid involvement toward coffee drinking and trends.
According to Rahman (2010), showed that coffee drinking trend had undergone several
phase of changes in Malaysia. The coffee drinking trends significantly contributed to the
Malaysian current economies either through industrial or gastronomic activities.
Currently in Malaysia, coffee drinking habits had been a tremendous setting toward the
society and it occurred to fulfil the needs and demands of the society, it had built up a
trends and social interaction toward culture and lifestyle.
According to Vago, S. (2004), a social status was determined primarily by one’s style of
life, how one consume the product and experience it, rather than how one produced”.
So it has been with Malaysia coffee culture with incoming of international coffee brands
that changes the perception of coffee drinking trends. The development of coffee
drinking trends depending on the current situations and current economic status. As cited
by (Ritzer, Kammeyer and Yetman, 1987) mentions that social changes are a variation of
time periods that mold the persons, community, organization and culture. This chapter
will explain the background of the study, the problem statement, objectives of the study,
possible research questions and the professional significance of the study toward
perceived value influence consumer coffee trends.
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1.1 Background of Studies
Food and beverage are known to be of the nerve center of hotel and tourism industry. The
nature of Malaysian food and beverages industry comprise of fine dining restaurant,
bistro, restaurant, food court, cafe, coffee shop (Kopitiam) and road side food vendors. In
addition, food and beverage industry offered varieties of dishes and beverages to the
community.
Hence, it is important for food service provider, not only to deliver food and beverages,
but at the same time they must make sure that consumer satisfaction is achieved. By
doing so, we can ensured that it will lead to increase consumer satisfaction level and
created a positive post-purchase behavior. To achieve this, it is important for food and
beverages operator to understand the consumer decision making process and factor
contributing to its.
In referring to the paragraph above, food and beverages industry had contributed not only
a wide variety of food and beverages products but services as well. The list of beverages
offered, ranging from alcoholic, non-alcoholic, juices, tea and coffee. This research
however to understand consumer perceived value that motivates and influence consumer
either towards international coffee shop or local Malaysian coffee shop.
The study will analyze, whether the dynamic of consumer satisfactions towards coffee
are based on perceived values and perceived service performance. The finding will
contribute to the understanding of consumer intention to purchase products offered by the
coffee business industry and enriching the literature on consumer behavior especially in
hospitality and tourism research. In other words, the study will look into the perception
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that stimuli perceived value that influence the consumer satisfaction towards coffee
drinking trends.
Perceived value is a consumer opinion of a product’s value to consumer. That it may
influence the consumer to purchase. However, it may have little or nothing to do with the
product markets toward business perspectives. It depends on the product’s ability and
attributes to satisfy consumer needs or requirements.
Consumer respond on the ground rules of perception toward the values of a meaningful
and coherent picture, which on the basis of perception, not the basis of objective reality.
Consumer have the decision to respond towards the reality terms and the values of the
products, thus usually will ended with product being purchased (Leon and Joseph, 2015).
Apart of the above explanation about perceived value influence consumer satisfaction.
The field work of this research will be based in Cyberjaya, Selangor. Cyberjaya is located
in the heart of Selangor Darul Ehsan. It is the brainchild of former Malaysian Prime
Minister, Mahathir Mohammed, whom had proposed a new multimedia garden city
known as Cyberjaya, the location will be a multimedia center in Malaysia looking
forward a high information technology that will be develop BBC (1999). The high
technology nature of the city with the combination of multi-racial population, form the
wider metropolitan areas is seen as the most suitable location for this study.
The population is growing and this tremendously creates the market for modern
consumer and luxury goods. The increasing development of the city which had developed
over the years provides an ever increasing of business opportunity especially coffee based
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premises. According to Lim (2014), a café culture had widely mushrooming in
Cyberjaya, hence the
Coffee business able to cater to this growing crowd that had been exposed to the current
coffee trends in Malaysia.
Moreover, current economy towards local coffee shops shows a significance positive
result the Malaysia market and this is opportunity to the local coffee shop. As mention by
our former Tourism Minister, Ng Yen Yen, “Malaysia has a unique heritage of coffee
shops, it shows our traditional culture”. To an account it proves that the importance of
local coffee heritage in Malaysia. She also stated that, “An increasing opportunity toward
food and beverage consumption in Malaysia show that tourist spends about RM300 or
17% from an average expenditure of RM2260. It an opportunity to our local coffee shop
to capture the markets and will increase the country economy strength from tourist
industry”.
However, local coffee shop heritage has dwarf due to rapid competition in the food
industry and the growth of modern and international coffee chains and closure of local
coffee due to the mushrooming of modern and international coffee chains over the past
ten years in Malaysia (Foo, Bajuri, & Wong, 2013), Rahman (2010) also agreed that
Malaysia local coffee shop had been overshadowed by international coffee chain, thus
our local coffee shop unbearable to survive in the current markets.
Nonini (1992) claims that Malaysian are not unproductive, this phenomenon is based on
current market opportunities. The apparent unproductiveness of local commoners was
indeed cultural, in the sense that the group shared the same rational beliefs about how the
economic game was played during the colonial period and still exist in current economy
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now, this is because of trends lend to behavior changes that headed to the possibility of a
new economic outcomes Williams (2007). In Malaysian society once cultural norms have
been established towards the community, individuals follow them as a matter of
expedience, social obligation, or shared understanding Scott (2001).
1.2 Problem Statement
Several local coffee shop in Malaysia are expanding tremendously through new branches,
new franchises or even licensing agreements. Most of the coffee parlor started out with a
entrepreneurial business in late 2013 and has shown a tremendous development in coffee
industry (Sue-Ann and Hamid, 2015). Unfortunately, local coffee shop business in
Malaysia had been over shadowed by the international coffee chain that widely branches
in Malaysia, thus impacting the local coffee business Raj (2011).
According to Brown (2015), Southeast Asia was the most coffee enthusiast that
successfully develop the coffee market. It had been considered as the emerging of the
third wave in coffee industry. The coffee culture in Southeast Asia seems very strong
from the young generation contribution that influenced by the coffee trends. In the event,
current coffee consumer developed a vast knowledge about a good cup of coffee. Hence,
the development of premium coffee had penetrated the coffee market in several Asian
countries like Malaysia. However, coffee market less developed in Hong Kong, China,
Philippines and Indonesia event the third wave of coffee industry is coming.
Focusing on consumer perceived value and coffee related study, others researcher study
about, `How determinant attributes of service quality influence customer-perceived value:
An empirical investigation of the Australian coffee outlet industry’, Hu (2010), on the
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same note is ‘The Analysis of Bangkok Chain’s Consumers and the Influence of Brand
Personalities on their Purchasing Decision’, (Udomkit and Mathews, 2015), and on the
other hands about ‘Tea, coffee and associated lifestyle factors’, Wadsworth (2012). Not
only about ‘Consumer motives for purchasing organic coffee’, Cho (2015), but also ‘The
impacts of green claims on coffee consumers’ purchase intention’, Lee (2015).
Beside that a study about ‘Replication strategies, knowledge and attention: a study of
coffee chains’, Brock (2008) also had been conducted, moreover about coffee ethical
values also had been studied ‘Do Consumer Care about Ethics? Willingness for Fair-
Trade Coffee’, Pelsmacker and Driesen (2005).
The above research study had been comprehensively done in developed countries with
various studies about coffee, consumer behavior, perception and perceived value,
however, very little research has been carried out in Malaysia thus, showing that there is
a lack of studies about coffee toward Malaysian society.
According to Euromonitor (2015), “Currently Malaysian society are changing their
behavior towards the current situations, the changes impacting local Malaysia community
ongoing culture, economics and consumer behavior towards the coffee brands that the
coffee consumer selected. Under those circumstances the policy maker identifies the
trends that rapidly change in coffee acceptance consecutively towards Malaysia socio-
economic, the coffee industry and also the lifestyle of Malaysian society. This brings up
to the behavior changes towards Malaysian community and the product it selves. In
lifestyle concept it contrasts through the rise of international coffee chain, this is because
the brand it selves correlated with the increased standard of living,. Stores that are
typically served expatriates are now finding the young professional is Malaysia are
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targeted as their customers, as policy maker search to acquire premium and imported
goods. A part of this demand is the desire their lives through purchasing choices and to
be accepted in the community”.
According to Victor Mah (2015) the president of Asian Coffee Federation in the recent
exhibition at Matrade Convention and Exhibition Centre dated 7th May 2015 cited that,
‘The coffee industry on Malaysia are witnessing a heightened demand for the production
of high-quality coffee, where coffee is appreciated as an artisanal food and not just
commodity, it had becoming a trend and should bring industrial growth to the country’.
The chart below indicates the coffee activities in Malaysia, from the level of coffee
premises in the country and the beverage, consume by daily populations, growth in coffee
consumption by region, coffee consumption in 2012 in East and Southeast Asia and basic
regression analysis of coffee consumption in Malaysia, please refer to figures 1.0, 2.0,
3.0, 4.0 and 5.0.
Figure 1.0 Growing Trends of Restaurant and Café in Malaysia, Yeap (2012)
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Figure 2.0: Mean Frequency of Beverage Consume Daily by Population, Norimah (2008)
Figure 3.0: Growth in Coffee Consumption by Region (1990-2012), ICC (2014)
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Figure 4.0: Coffee Consumption in 2012 in East and Southeast Asia, ICC (2014)
Figure 5.0: Basic Regression Analysis of Coffee Consumption in Malaysia, ICC (2014)
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In referring to all the finding above, the research study will analyze whether the dynamic
of consumer satisfaction towards coffee are based on perceived value and perceived
service performance. The finding will contribute to the understanding of customer
intention to purchase products offered by the Malaysia coffee business industry and
enriching the literature on consumer behavior especially in hospitality and tourism
research.
Going further, the study would like to seek the tension that built towards the local coffee
shop, since the international coffee chain had vastly expended in Malaysia market. Above
all due to the decreasing of local coffee shop causing the diminishing of local heritage
awareness in Malaysian society.
With this intention, the success of our local coffee shop to flourish are depend to
ourselves as Malaysian to support our own local product, so that our local heritage is
preserve for the next generation. Not to mention this, current situation shows that the lack
of awareness had been identify in our local Malaysian community. Owing to the fact that
these would endangered the local coffee shop survival over the next future generations.
Besides that, the study will help the ownership of next generation, as for local Malaysian
entrepreneurs to sustain the local coffee business. Example like Goh Ching Mun, the
successful generation that able to compete with international coffee brand Gough (2010).
In addition, a strong awareness of certain elements is the determinant of local coffee shop
survival that reflect towards the study of consumer perception and also to understand the
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dynamic of perceived values that influence consumer satisfaction. If not the Malaysia
unique coffee heritage will be just another historical value.
1.3 Objective of the Study
Having introduced to the issue, this study seeks to investigate the influence of
coffee toward satisfaction. Therefor the objective of the study is:
1.3.1 To examine the influence of perceived values of coffee attributes factors toward
consumer satisfaction.
1.3.2 To examine the influence of perceived service performance of coffee premises
toward customer satisfaction.
1.4 Research Questions
1.4.1 To what extent of perceived values of coffee attributes factors toward consumer
satisfaction?
1.4.2 What are the relationships of perceived service performance of coffee premises
toward customer satisfaction?
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1.5 Research Framework
Figure 6.0 illustrates the research framework for this proposed study. It shows the
relationship between the variables of interest.
THE INFLUENCE OF COFFEE
Figure 6.0: Proposed Framework for the Study. Adapted from Rust et. Al., (1999), Zeithalm et al., (1996), Baker
and Crompton (2000), Schneider and Bowen (1993), Susskind (2002), Court and Luptom (1997), Marzursky
(1989), Petrick et al., (2001), Sampol (1996) and Bloemer et al., (1999).
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SATISFACTION
1.Customer Loyalty
2.Intention to switch
PERCEIVED VALUES
1.Emotional factor.
2.Monetary.
3.Behavioral.
H1
PERCEIVED SERVICE
PERFORMANCE
1.Physical Environment
Attributes.
2.Interactional Attributes.
3.Outcomes attributes.
H2
1.6 Hypothesis
According to (Al-Sabbahy, H.Z., and Riley 2004) perceived value consist of several
items, within a consensus of several researchers that perceived value is more complex
concepts, that perceived value consists of several dimensional approach that have the
relationship with value perceptions and this should be taken into consideration by
scholars and managers value perception is determined by the customer perception to
select and consider because through time the development of customer will value will
gain a better understanding towards the products and services rendered by the
organization (Petrick 2002; Sweeney and Soutar, 2001). Therefore, the relationship
generated the below hypothesis for the proposed study.
H1: There is a significant influence between perceived values towards satisfaction.
H1a: There is a significant influence between emotional towards satisfaction.
H1b: There is a significant influence between monetary towards satisfaction.
H1c: There is a significant influence between behavioral towards satisfaction.
As mentions by (Sweeney and Soutar, 2001), ‘to understand the consumer value one
must monitor the products and services thoroughly. Consumer only know that concept of
perceived value on the surface, more importantly to study the relationship of the items
that influence the products and services (Holbrook, 1999, Sweeney and Soutar, 2001) and
towards the understanding of perceived value will generate an emotional feeling of
satisfaction to the customer, as a result of this phenomena this will increase the customer
purchase behavior and intention to revisit occurred (Terblanche, 2010).
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Keller (1999) cited that perceived value attributes and factors are the features that mold
the products and services. Meanwhile other study claims that full range of attributes will
create a “legendary experience” to consumer that influence the consumer behavior
Campbell-Smith (1967). (Andersson and Mossberg, 2004) found that several factors
influenced customer experience towards service, cuisine and the premises. (Clark and
Wood, 1998) also reported that the order of attribute is very importance and is somewhat
different in different styles of food and beverage premises that set by the organizations,
meaning that the ambiance, fix and fixtures that will increase the customer moods.
Through personal selling and good communication skills the companies able to promote
the products and this increase the purchase intention of the consumer (Leung 2001;
Terblanche and Boshoff, 2010). Therefore, the hypothesis proposes have the relationship
as generated below:
H2: There is a significant influence between perceived service performances towards
satisfaction.
H2a: There is a significant influence between physical environment attributes
towards satisfaction.
H2b: There is a significant influence between interactional attributes towards
satisfaction.
H2c: There is a significant influence between outcome attributes towards
satisfaction.
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It is understandable that consumers able to differentiate the relativity of importance
to each product or service attribute, when they make purchase decisions Kotler
(1988). Thus, the importance determinant attributes of service play a critical role in
understanding consumer behavior Kivela et al., 1999).
1.7 SIGNIFICANCE OF THE STUDY
1.7.1 Academic Perspective
For the academic perspective, this study may contribute to the extension of consumer
behavior and coffee attributes. The finding from this study should also provide an academic
platform as it would be adding a current academic finding of the coffee industry. Considering
a valuable information and insights on the current situation of the coffee industry in Malaysia
market. Furthermore, this study wills most likely leading other potential researchers to look
more in-depth or broader scope related to thesis study.
1.7.2 Practical Perspective
In practical terms, the finding in this study is significant toward business opportunity
contribution to the economic development of this country. The proposed research study will
help coffee industry business to form a strategic planning in maintaining customer loyalty.
Specifically, data would help to identify the motivational factors that can be used towards
education and business to influence coffee consumer retention.
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1.8 Definition of Terms
Perceived Value
Need and want of consumer are two main perceptions of what is being received and what is
being given. This concept is called as perceived value and one of the large areas of consumer
behavior study. (Kim, Park, Kim and Ryu, 2013).
Emotional Factor
A cycle of consumer behavior factor that will be evaluate through the consumer expression
after the post-purchase activity had been finalize (Rust et al 1999).
Monetary
When customer learns the process of purchase, a defecting behavior arise in customer minds,
thus will lead to another cycle of consumer behavior, thus, it equates to positive cash flow
and financial status (Zeithaml et al., 1996).
Behavioral
Behavioral meaning is a concept of intention that relay a messages to a certain behavior, for
example, a favorable or positive word-of-mouth behavior intentions that depicts a customer
willingness to recommend to others about the certain products or services that most preferred
(Zeithaml et al., 1996).
Satisfaction
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Considering satisfaction as the main objective towards perceived value and perception that
lead to purchase intentions towards consumer actual purchase behavior (Oliver, 1999;
Westbrook and Oliver, 1991).
Perceived Service Performance
Services that offered to the customer usually ended either positive or negative. It provides
benefit and information to customer. On the other hands services also being interpreted as an
act, efforts and performance that being rendered to the customer (Solomon, W and Stuart
2012).
Physical Environment Attributes
Hu (2010) claims that the emotional value that reacts with the aesthetic features of the stores
creating a positive emotion to the consumer, as ambiance will lead to individual positive
energy.
Interactional Attributes
A services that consist of communication that lead to a good sense of customer orientation, it
beneficial to the organization and will increase customer satisfaction level (Schneider and
Bowen, 1993).
Outcome Attributes
Human nature consists of pre and post purchase experience, a studies reported that people
either discuss positive (acceptance) and negative(withdrawal) experiences towards the
products Susskind (2002).
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Customer and Consumer
Individual who buys services or goods from others is customer while individual that consume
a product of a commodity is a consumer and in the concept of economics, a consumer can be
a numbers of individuals that uses a certain type of service. Meanwhile, consumers determine
as an organism that devours or eats something or receive the services or using the products
either tangible or intangible, as in the field of Science and Ecology as study from Julita
(2012).
CHAPTER 2
LITERATURE REVIEW
2.0 Introduction
An extensive review will focus on the variables under the study, mainly emphasize
towards the variable.
2.1 Coffee Background
Coffee is originated from Eastern African and currently known as Ethiopia, they called it
Qahwa in Arabic and coffee had been introduced by Khaldi, the goat herder. Ever since
coffee had been a domestic trade business towards Turkey through Arabian Peninsula
known as Yemen and finally arrived in European continent. Coffee had been introduced
by Venetian trade merchants. Indeed, the beverage had been famous ever since
introduced. However, some do not accept it and should ban the drink, yet the pope
himself acknowledge the drink and created it as a truly Christian beverage to consume.
Coffee had been known to the wealthiest, however, through time coffee are the most
traded items. Now coffee had been drinks and a very successfully commodity in the
gastronomic worlds Bellissimo (2008).
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Coffee had been introduced to Malaya during British occupation in 1696 and had been a
succeeful business trading activity. Local coffee consumption had been commercializing
through Kopitiam concept and the branding had received a good respond from the local’s
Eventually through time and experience the coffee commodity is not only selling coffee
product, besides by embracing technology as part of the marketing plans to attract
younger generations and following to current market trends and opportunity Rahman
(2010).
2.2 Perceived Value
Perceived value refers to product attributes preferences as a straight forward impact
towards purchase intentions and it is also influencing consumer behavior attitude as cited
from Woodruff (1997). Scholar claimed perceived value summed into a single definition:
Consumer will judge the utility of a product or services before purchase and this is a
cognitive perception towards perceived value. Meanwhile, consumer behavior attitude is
a study towards consumer pre and post purchase behavior (Kim, Jeongdoo, Myung-Ja
and Kisang, 2013).
Most focus in research that the relationship of interaction and process are depend on
customer perception (Echeverri, 1999). Perceived value is not one of the contributors,
either way, the relationship that influence responses and behavioral intentions towards the
products and services offered Kim K. R. R. (2012). Bitner (1992) argued that each food
and beverage have their own ways of serving the customer, this is all based on customer
own individual cognitive perception that will increase their own perception and belief.
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Additionally, research on perceived value toward current market remain subjective
because of the economic and market changes from time to time and a part of its follow
the country economic condition that is based on potentiality as mention by Dmitrovic,
Vida and Reardon, 2009). Following to the previous study framework, perceived value
influence satisfaction through purchase intentions as a discussed item, when satisfaction
is achieved from the perceived value, the consumer will disseminate the information to
others. (Claudia Dumitrescu William Nganje Clifford J. Shultz, 2013).
Currently, the study of consumer behavior is specifically gaining toward a research study
of understanding perceived value concept, as it is the main contributors towards the
process of buying(Gallarza, M.G, Saura and I.G, 2006). However, in the study of
consumer behavior subject, the value concept is still unclear towards the objective and
position to the contemporary market (Sánchez-Fernández, Iniesta-Bonillo, & M.Á.,
2007).
Perceived value consist of 2 concepts that are hedonic and utilitarian value dichotomy
(Holbrook, M.B., Hirschman and E.C., 1982) and the concept are been the most-used in a
classical study approaches, by the same token with the acquisition versus transaction
value differences (Gallarza, M.G., Saura and I.G., 2006).
Referring to the concept of task-specific, efficient and economical terms, it represents the
utilitarian value in customer perceived value, meanwhile hedonic value represents the
after affect that basically towards the emotional arousal from consumer after sales
service. This 2 unique concept explains the differences of perceived value concept
(Holbrook, M.B., Hirschman and E.C., 1982).
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Thus, the concept above apparently achieving a greater value is preferred by each
exchange party in the usual business practices. Therefore, in order to remain competitive
in the market and compete with rivalry, a company must be able to provide a greater net
value to capture the consumer intention rather than its rivalry (Ravald & Grönroos,
1996).
2.2.1 Emotional Factor
Emotional is a reaction that associated with the consumer experience that might have a
significant impact on consumer evaluations that lead to satisfaction (Dube´-Rioux,
Westbrook, Oliver, & Matilla, 1990;1991;2000). Emotional factor able to disturb
consumer to a series of emotional reactions behavior or even no reactions across, as this
is depending on the consumer towards their own self sense of belonging (Wirtz &
Mattila, 2004).
Emotional factor provide benefit to the consumer that will affect the buying behavior and
influence consumer satisfaction (de Chernatony & McDonald, 2003), whereas consumer
satisfaction react to a specific experience are toward the process of purchasing and
consumer behavior (Rust, R., Danaher, & Varki, 1999). For an organization to evaluate
customer, it only can be done with purchases. This is because the consumer perceived
value concept are very subjective and personal whether the products or services will
provide values to the consumer (Parasuraman, Zeithalm and Berry, 1985).
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Overall, emotional factor manifests the situations when perceived performance of a
product or service exceed expectation from consumer perspective, it is either towards
positive or negative feedback will impact consumer satisfaction (Oliver R., 1981). If
consumer perceived bad service quality, their post-purchase behavior intention is
negative and may be harmful for the development of the organization, such as decreased
income and increased costs for customer recommendation. In contrast customer not
reluctant to purchase the same product if achieved a positive post-purchase behavior that
have quality and values, Lin (2009), as the result of the purchase, consumer is entitled
towards their experience and emotional response (Singh, 1990; Singh and Wilkes, 1996;
Fornell and Wernerfelt, 1988; Parasuraman et al., 1996).
2.2.2 Monetary
In the classical study monetary theory toward perceived value being indicated that,
money is being used to show productivity in the economy business cycle Niebyl (1964).
It is Study that most traded commodities become monies interactional attributes Ingham
(2001). Value towards consumer perspective is to seek opportunities that can be obtained
with monetary benefits Seo (2005), hence high quality toward brand or product is a
concept that is not precise and relevant. If the original specifications are present in a
product, it can be said that high quality is present. Products and services offered usually
will be determined by the price that offered from the organization (Prajogo, McDermott
and Goh, 2008).
By ways of contrast, when defecting behavior exists, the financial consequences will
include to the loss of customers spending, thus increasing of costs to attract new
customers, which to balance the positive cash flow (Zeithalm, Berry and Parasuraman,
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1996). Some organization claims that it is an added advantage towards the returning
customer because it able to save the operational cost (Bowen and Sc Chen, P, 2001).
However, to improve these relationships, organization should advance their levels of
sales opportunity within the organization (Stevens, Knutson and Patton, 1995).
According to (Zaithalm et al, 1996) behavioral intentions can affect whether customers
return to purchase or being a defective factor of the business. Providing that, there is less
research study that has been conducted measuring to this construct empirically as claim
by Oberchain (2002). These behaviors have shown noteworthy influence to profitability
in the organizations (Fornell and Wernerfelt, 1987; Reicheld and Ssser, 1990; Zeithaml et
al, 1997). The characteristic indicated that there is a definite life span associated with the
product being purchased or consumed (Biswas and Cassell, 1996; Smucker, 2001).
2.2.3 Behavioral
Oliver (1997) cited that perceived value is the first stage of customer to engage towards
the next steps of consumer behavior, other researcher found that consumer behavior
consisting of several items such as word of mouth, purchase intentions, price sensitivity
and complaining behavior, all of the items mention influence satisfaction either positive
or negative affect (Bloemer, deRuyter and Wetzels, 1999).
There has been a research on the variables independently and linkage of service quality to
behavioral intentions (Zeithalm, Berry and Parasuraman, 1996). It is indicated that such
alliances engage with consumer experiencing two or more brands during purchase
activity (Simonin and Ruth, 1998). According to Baker and Crompton (2000), behavior
can be predicted from intentions from buying the brands that correspond to a certain
behavior.
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Study found that local brand has the highest level of awareness rather than international
brand, this most likely due to the local brand have been in the country for quite
sometimes, meanwhile international brands just entering the global markets. However,
study found that international brands provide most benefit and values, hence there must
be a balance between both markets to the entire industry success. (Schuiling and
Kapferer, 2014).
On the condition of behavior in perceived value show an extensiveness of information
search, the length of the decision-making process, formations of belief, attitudes and
intentions, as well as behavioral outcomes, such as variety seeking of behavioral attitude
toward brand-switching behavior, brand-commitment or loyalty, frequency of product
usage and shopping enjoyment (Beharrel and Dennison; Verbeke and Vickier, 2004).
2.3 Perceived Service Performance
Scholar have argued for some time that services are the most essentially performances as
quoted by several research (Berry, 1980; Grove and Fisk, 1983; Gro¨nroos, C., 1985;
Lovelock, 1994). According to research, perceived service performance are based on the
quality of the service that consumer receive, resulting a components of evaluation process
are being created to determine customer satisfaction levels towards the area of service
marketing as explained from Hamer (2006). Even though service interactions have been
pointed out as one of the most important elements in services industry (Schneider and
White, 2004).
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Other research indicated that the dimensions were follows toward loyalty of the product
and services offered, and also based on consumer preferences (Alexandris et al; Zeithalm
et al.; Bloemer). The fact that employee behaviors are extremely important in service
organization render to the consumer Davidson (2003).
Therefore, an organizational culture has a significant impact on employee service
delivery (Davidson, 2003; Scneider and Bowen, 1993). The quality of service is a
fundamental to an organization and consumers expect a high quality services, seeing that
customer are willing to pay premium for the services to fulfill their needs Park (2007).
Furthermore, Johnston and Clark (2005), add that the customers have to make an input
for themselves, including time, money and effort. After all, consumer looking for an
empathy toward caring of the product or services, hence this individualized attention the
coffee parlor provides it’s to customers, and one of the cornerstone of service quality
(Parasuraman et al., 1988). Across all of these circumstances, the service performance
must be altered to accommodate the consumer for better service quality and adapt to the
situations.
2.3.1 Physical Environment Attributes
The physical environment is very important with regard to services in which customers
are in the premises for a certain periods of time and (Wakefield and Blodgett, 1996).
Kotler (1973) was one to refer to the ambiance of the physical environment, as perceived
through customer’s five senses of visual, aural, olfactory, tactile and gustatory. Baker
(1986) not only included the sensory aspects of the physical environment, presentation
and design also influence customer satisfaction values, including social factors referring
to employees and other customers. Study also support that aesthetics involves a first
person hedonic and utilitarian judgments as claimed by Von Wright (1963), it an
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emotional value that react with the aesthetic features that creates a positive emotions
towards the customer Hu (2010). Previous studies found that perceived quality toward