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Mentor

H.G. Parsa

Abstract

This study identifies the most important factors in the consumer decision-making process when choosing a restaurant. Using a dynamic comparison process, this study additionally explores consumers’ willingness to pay for each of three major attributes of restaurants: food quality, service, and ambience. Understanding this relationship is important for managers in attaining the aspired level of consumer satisfaction. Results indicate that food quality is more important than service and ambiance in upscale restaurants, while speed of service is more important than food quality and ambiance in quick-service restaurants. Thus, consumers are willing to pay more for high-quality food at upscale restaurants and for speed of service at quick- service restaurants. Economic literature states that the relationship between consumers’ willingness to pay and the elasticity for a restaurant’s attributes is linear (positive and direct), while the current results do not support this assumption. This study should have a significant impact on the restaurant industry, as it identifies the scope of differential returns on investment on various restaurant attributes.

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