International Journal of Quality & Reliability ManagementThe antecedents of consumer satisfaction and loyalty in fast food industry: A cross-national comparison between Chinese and Swiss consumersReza Etemad-Sajadi Daniela Rizzuto

Article information:To cite this document:Reza Etemad-Sajadi Daniela Rizzuto, (2013),"The antecedents of consumer satisfaction and loyalty in fastfood industry", International Journal of Quality & Reliability Management, Vol. 30 Iss 7 pp. 780 - 798Permanent link to this document:http://dx.doi.org/10.1108/IJQRM-May-2012-0069

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Users who downloaded this article also downloaded:Kisang Ryu, Hye-Rin Lee, Woo Gon Kim, (2012),"The influence of the quality of the physical environment,food, and service on restaurant image, customer perceived value, customer satisfaction, and behavioralintentions", International Journal of Contemporary Hospitality Management, Vol. 24 Iss 2 pp. 200-223 http://dx.doi.org/10.1108/09596111211206141Hong Qin, Victor R. Prybutok, Qilan Zhao, (2010),"Perceived service quality in fast-food restaurants:empirical evidence from China", International Journal of Quality & Reliability Management, Vol. 27 Iss4 pp. 424-437 http://dx.doi.org/10.1108/02656711011035129G. Ronald Gilbert, Cleopatra Veloutsou, Mark M.H. Goode, Luiz Moutinho, (2004),"Measuring customersatisfaction in the fast food industry: a cross-national approach", Journal of Services Marketing, Vol. 18 Iss5 pp. 371-383 http://dx.doi.org/10.1108/08876040410548294

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QUALITY PAPER

The antecedents of consumersatisfaction and loyalty in fast

food industryA cross-national comparison between

Chinese and Swiss consumersReza Etemad-Sajadi and Daniela Rizzuto

EHL (Ecole hotelie`re de Lausanne), Lausanne, Switzerland

Abstract

Purpose The purpose of this research is to investigate the degree of satisfaction and loyalty ofChinese and Swiss fast-food consumers. The aim is to compare Chinese/Swiss consumers perceptionof meal quality, service quality, price and their influence on their satisfaction and loyalty. The image offast-food restaurants in the two countries is also compared.

Design/methodology/approach Two on-line surveys were conducted with two samples. The firstone was conducted with Chinese consumers in China and the second one was conducted with Swissconsumers in Switzerland. The authors selected McDonalds as it is globally a standardized and well-knownfast-food chain. They adapted items of SERVQUAL in order to apply it to the fast food industry and tomeasure service quality. Data analysis was performed using ANOVA. As they had several latent variables,the authors also used partial least squares (PLS), a variance-based structural equation modeling method.

Findings Results showed that Chinese consumers have a better perception of meal quality and a morepositive image of McDonalds. As far as service quality perception is concerned, no major differences wereobserved. However, reliability and tangibles dimensions seem to be more positively perceived in China.The degree of consumer satisfaction is very similar between the two samples. However, the degree of loyaltyof Chinese consumers is higher compared to Swiss consumers. In addition, the image of McDonaldsseems to have a stronger influence on Swiss consumers loyalty. Finally, the level of service quality perceivedseems to have less impact on the image of McDonalds for Chinese consumers than for Swiss consumers.

Research limitations/implications First, as the authors selected McDonalds, they must be carefulin the generalization of their findings to all fast-food restaurants. Second, the two samples consist ofstudents, which limits the generalizability of the findings. However, students are identified to be the currentcustomers of fast-food restaurants and consequently possess an intuitive understanding of fast-food outlets.

Practical implications As consumers in China perceive a better quality of meal in McDonalds,they might be willing to pay a higher price relative to their earnings. Compared to China, fast-foodmanagers in Switzerland should work harder in order to improve their image. Fast-food managersmust adapt themselves to the preferences of local consumers. However, this study also shows that notall variables are perceived differently by Swiss and Chinese consumers. This implies that somemeasures can be standardized in order to save costs.

Originality/value The study investigates the impact of nationality on the whole model, defined bycustomer perception of fast-food restaurants image, product/service quality, satisfaction/loyalty, andfinally price fairness. As China is a major player in the global market based on its size and growthpotential, it is interesting to compare the antecedents of customer satisfaction and loyalty in China,with a culturally different country such as Switzerland.

Keywords Service quality, Fast-food restaurants, Customer satisfaction, Customer loyalty, Image,McDonalds, China, Switzerland, Culture

Paper type Research paper

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0265-671X.htm

Received 23 May 2012Revised 7 March 2013Accepted 12 March 2013

International Journal of Quality &Reliability ManagementVol. 30 No. 7, 2013pp. 780-798q Emerald Group Publishing Limited0265-671XDOI 10.1108/IJQRM-May-2012-0069

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IntroductionCompetition in the fast food market is growing and success depends more and more oncustomer retention. Therefore, service improvements are the key to competitive success.To succeed in different countries, fast-food providers must adapt themselves to localpreferences (Qin et al., 2010). Indeed, despite a more and more globalized world,customers have differing needs and perceptions. Although, causes of satisfaction anddissatisfaction can sometimes be generalized, there are some variations according tocultural background. Therefore, it is important to identify the specific characteristics ofculturally diverse markets (Brady et al., 2001). Indeed, most studies report an effectof culture (Hofstede, 1991) on perceptions and this implies that service offerings need tobe adapted to the environment (Donthu and Yoo, 1998; Furrer et al., 2000; Hoare andButcher, 2008; Laroche et al., 2004). It is crucial to understand how customers evaluateservices so firms can adapt their offerings accordingly. By adapting to the local needsand preferences a step towards superior service quality is undertaken.

The way that service quality and meal quality are perceived by local consumers willinfluence customers satisfaction and consequently their loyalty in the future. Indeed,consumer loyalty is a pre-requisite for a successful and profitable business. Severalauthors also argued that satisfaction is an antecedent of loyalty (Woodside et al., 1989;Cronin and Taylor, 1992; Kandampully and Suhartanto, 2000; Lovelock and Wright,2002; Hong and Goo, 2004; Ekinci et al., 2008; Faullant et al., 2008). As mentioned by Bowenand Chen (2001), there are three distinctive approaches to define loyalty which are:

(1) behavioural (consistent, repetitious purchase behaviour);

(2) attitudinal (emotional and psychological attachment); and

(3) composite (a combination of the first two dimensions and the measure of loyaltyby customers preferences, repeat patronage, word-of-mouth, propensity ofbrand-switching).

Service quality has a direct impact on customer satisfaction and an indirect impact oncustomer loyalty. However, there are several more factors that must be taken intoaccount such as the impact of firms image or even the perception of price fairness.A complete picture is essential in order to truly deliver what customers desire based ontheir national culture.

For this research, McDonalds was chosen as it is the worlds market leader in fastfood, the local leader in Switzerland and well represented in China. McDonalds is anexample of combination between its process of globalization, standardization andadaptation to local communities (Vignali, 2001). Switzerland and China were selected torepresent two different cultures. Moreover, while McDonalds is seen as a usual fast-foodrestaurant in some countries, it represents a symbol in others. Our goal is to investigatethe antecedents of satisfaction and loyalty of Chinese and Swiss fast-food consumers.

Literature reviewService qualitySeveral models exist to measure the quality of service perceived by the consumers. Oneof the most famous is SERVQUAL. Parasuraman et al. (1988) developed SERVQUALinstrument which measures customers perception of the received service and relate it totheir expectations and the gap measures clients satisfaction. SERVQUAL is composed offive dimensions which are:

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(1) reliability (ability to perform the promised service dependably and precisely);

(2) assurance (knowledge and courtesy of employees and their ability to inspireconfidence);

(3) responsiveness (willingness to help customers and provide prompt service);

(4) tangibles (physical facilities, equipment, personnel); and

(5) empathy (individualized attention given to customers).

One of the main advantages of SERVQUAL is the fact that it has been widely used in theliterature and in practice. As far as the disadvantages are concerned, the traditionalSERVQUAL can be difficult to administer and there is a risk of bias as consumers mustgive once their expectations and once their perceptions. Moreover, the five dimensionsof SERVQUAL must be adapted to the industry (Babakus and Boller, 1992). Onealternative is SERVPERF (Cronin and Taylor, 1992). This model will only measure theexperiences and does not ask respondents about their expectations. Gronroos (1982)developed the Nordic model in which he identified the technical and functional aspectsof service quality. The first one relates to the outcome of the service and the second onerelates to the manner in which the service is delivered. Rust and Oliver (1994) developedthe Three-component model and they distinguished service product, interaction quality,and service environment. In the context of restaurant services, Stevens et al. (1995)adapted SERVQUAL to the restaurant industry and called it DINESERV.

The relationship between service quality, satisfaction, and loyaltyConsumer perception of service quality is critical for the success of a firm as it is linkedwith customer satisfaction and loyalty. Indeed, several authors claimed that servicequality is an important antecedent of customer satisfaction (Parasuraman et al., 1985;Cronin and Taylor, 1992; Baker and Crompton, 2000; Lee et al., 2000; Caruana, 2002; Hongand Goo, 2004; Ladhari, 2009). Some proved that satisfaction acts as a mediator betweenservice quality and loyalty and has an overall stronger effect on loyalty than servicequality. However, satisfaction alone may not be enough to actually achieve loyalty(Woodside et al., 1989; Cronin and Taylor, 1992; Kandampully and Suhartanto, 2000;Lovelock and Wright, 2002; Hong and Goo, 2004; Ekinci et al., 2008; Faullant et al., 2008).It was found that the majority of customers who assert to be brand loyal did switch brandrecently even if they were generally satisfied with their regular brand. Therefore, in orderto become loyal and profitable for the company, a customer must be highly satisfied.Any drop from total satisfaction results in a major drop in loyalty (Jones and Sasser,1995). Moreover, less money needs to be invested in attracting new customers as highlysatisfied customers spread positive word of mouth and recommend the service to others(Lovelock and Wright, 2002). As far as restaurant experience is concerned, severalauthors argued that food, physical environment, and employee services are majorcomponents and have an impact on customer satisfaction (Ryu et al., 2012; Chow et al.,2007; Jang and Namkung, 2009). In the fast food industry, several authors studied theimpact of perceived service quality on customer satisfaction and loyalty (Stevens et al.,1995; Brady et al., 2001; Qin and Prybutok, 2009; Gilbert et al., 2004; Qin et al., 2010; Johnsand Howard, 1998; Law et al., 2004). The factors such as the taste of food, the outletcleanliness, the fast service, and the friendliness of staff seem to play a major role.Moreover, two values that are gaining importance are price and nutritional values

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(Kara et al., 1995; Oyewole, 1999; Min, 2011). Convenient operating hours are a furthersignificant point for consumers (Oyewole, 1999).

The relationship between image, service quality, satisfaction, and loyaltyGronroos (1982) identified that corporate image plays an important role in the evaluationof service quality and vice versa. Corporate image is believed to influence thecustomers perception of service quality through a filtering effect (Andreassen andLindestad, 1998a, b; Kandampully and Suhartanto, 2000; Brunner et al., 2008). After are-examination of Gronroos model, Kang and James (2004) found that functionalqualities have a larger impact on image than technical qualities. This proves theimportance of the employee/customer relationship and its impact on a customersperception of an organizations image. Andreassen and Lindestad (1998a, b) found thatan existing customers attitude towards a company is primarily experience based,therefore positive or negative disconfirmation may strengthen or weaken theconsumers impression of and attitude towards the company. This entails that iffunctional qualities are excellent they have the potential to overcome any deficienciescaused by technical qualities. The way in which a customer perceives the quality ofperformance has therefore a direct effect on image development. Further, expectationsat the stage of pre-experience and perceptions after the experience are influenced by theway that the customer sees the company (Gronroos, 1982). This implies that if thecustomer experiences good service, one automatically has a more favourable image ofthe company. On the other hand, if a customer already has a positive image of thecompany one is more likely to perceive the service as good and to forgive if the servicewas not optimal. However, Brunner et al. (2008) argued that if the customer already hasa high image of the company one also expects higher quality service.

Andreassen and Lindestad (1998a, b) found that for complex and infrequentlypurchased services, it is image rather than satisfaction that leads to customer loyalty.This challenges the disconfirmation of expectations paradigm as it states thatsatisfaction is the main predictor (Oliver, 1980). A study by Brunner et al. (2008) foundthat the influence of satisfaction on loyalty decreased over time. The more experienced acustomer is with the service, the less the influence of satisfaction on loyalty. On thecontrary, if the customer is new to the service, satisfaction is very important in the loyaltyformation process. In addition, if a favourable image is built, the customer is morelikely to give the company another chance even if service was less than satisfactory(Faullant et al., 2008). This is only valid for a service that is often used and to which acustomer can become accustomed. Otherwise it is not possible to develop a consistentimage. Kandampully and Suhartanto (2000) confirmed that image is positively relatedto customer loyalty. Customers tend to repurchase and recommend a business with afavourable image in the belief that it provides an assurance of high quality of goods andservices. Kandampully and Hu (2007) confirmed that image functions as a mediatorbetween service quality, customer satisfaction and customer loyalty. Image and loyaltyare directly linked to the companys service performance, not merely in terms of what wasperformed, but more importantly how it was performed. In effect, the moments-of-truththat were created through service minded employees actions were found to be animportant contributing factor. Operational and human factors were found to have astrong enhancing influence on image and loyalty (Kandampully and Hu, 2007). As far asrestaurant experience is concerned, several authors argued that restaurant image was

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a significant determinant of customer satisfaction which is also an antecedent ofcustomer loyalty (Ryu et al., 2008; Kivela et al., 1999; Kim et al., 2009; Namkung andJang, 2007).

Challenges when dealing with customers in different countries/culturesOne of the most important research studying cultural differences between countrieswas done by Hofstede in 1991. He stated that differences in thinking needed to be takeninto consideration if one wants to define effective solutions in a cross-cultural context.People acquire patterns of thinking, feelings and potential acting during their childhoodwhich are formed afterwards by their social environment. Picking up on the theory ofHofstede, Laroche et al. (2004) defined culture as the sum of learned beliefs, values, andcustoms that create behavioural norms for a given society. Culture is one of the keyconstraints to complete marketing standardization. In fact, it has been noted that theinability of firms and their managers to make adjustments to the demands of theinternational business environment, principally due to the inability or unwillingness ofmanagers to appreciate cultural challenges, has been cited as the principal cause ofinternational business failures. For business success in new geographic areas, it is vitalto develop strategies that adapt to the cultural environment of the country. Dependingon the characteristics of the culture, the service provider needs to work harder to delightits customers. As standardization is necessary in order to control cost, managers need toensure that they offer the same services to similar customers. However, in parallel smartfirms are customizing their offerings and services to local markets (Ueletschy et al.,2008). With the trend of globalization, growth of transnational corporations, and theemergence of culture-related issues, cultural differences have become significant whenexplaining the behaviour of consumers and designing efficient marketing strategiesand tools (Weiermair and Fuchs, 2000).

Hofstede (1991) identified five dimensions of culture which are:

(1) power distance (the extent to which the less powerful members of institutionsand organisations within a country expect and accept that power is distributedunequally);

(2) individualism vs collectivism (the degree of interdependence a societymaintains among its members);

(3) masculinity vs femininity (the fundamental issue here is what motivates people,wanting to be the best or liking what you do);

(4) uncertainty avoidance (the extent to which the members of a culture feelthreatened by ambiguous or unknown situations and have created beliefs andinstitutions that try to avoid these); and

(5) long-term vs short-term orientation (the extent to which a society shows apragmatic future-oriented perspective rather than a conventional historicalshort-term point of view).

These cultural dimensions have been widely used in explaining customers perceptionof service quality in different cultures (Donthu and Yoo, 1998; Furrer et al., 2000; Hoareand Butcher, 2008). Donthu and Yoo (1998) analysed the effect of Hofstedes dimensionson customers service quality expectations. They found that the level of expectation ishigher for customers with a culture identified to be individualistic, low on power

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distance, short-term oriented and high on uncertainty avoidance. Laroche et al. (2004)and Ueletschy et al. (2008) found that some measures of service quality and satisfactionwere constant across cultures. This suggests that some marketing measures can bestandardized but that total standardization will not lead to satisfaction. Whereasconsumers from collectivist and/or high uncertainty avoiding cultures tend to voicepraise when they receive superior service, they are also less apt to switch serviceproviders and to voice criticism when they receive inferior customer service. In directcontrast, consumers from individualistic and/or low uncertainty avoiding cultures areless likely to praise superior service but are more apt to switch and to voice criticism.

Culture in Switzerland vs ChinaFigure 1 shows a comparison of culture between Switzerland and China. According toHofstede (1991) Switzerland is an individualistic and masculine culture with a smallpower distance and a relative high tolerance for uncertain situations. Chinese culture ischaracterised by a large power distance, collectivism and a long-term orientation.

Chinas fast food marketIn 2009, fast food industry revenues reached $64 billion in China while in the world fastfood industry revenues reached $486 billion (Euromonitor, 2010b). With the fast-growingmiddle class in China, their lifestyle is changing and less people are cooking at home(Cullen et al., 2008). However, fast food in the Chinese market share accounts for only9.8 per cent of Chinese sales for outside meals vs 84.5 per cent in America (Datamonitor,2007). This implies an important potential of growth in China (Qin et al., 2010). By 2014, it ispredicted that fast food will account for 26 per cent of the consumer foodservice market(Euromonitor, 2010b). International fast-food chains are rushing into China due to thehuge market potential. Asian fast-food restaurants represent by far the largest sub-sectorin the fast food industry. This implies that Chinese customers are obviously accustomed totheir local cuisine. Additionally, Asian fast-food restaurants also have lower sellingprices than Western fast-food outlets. Indeed, prices in McDonalds and Kentucky Fried

Figure 1.Cultural distance between

Switzerland and China

Notes: PDI power distance; IDV individualism;MAS masculinity/feminity; UAI uncertainty avoidance;LTO long term orientationSource: Hofstede (1991)

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Chicken are often too high for people living in underdeveloped cities and rural areas.McDonalds is number two with 15.8 per cent market share compared to 40.2 per cent ofKFC (Euromonitor, 2010b). As local products are favoured by Chinese customers, Westernfast-foods such as McDonalds must adapt their offers to the local market.

Switzerlands fast food marketSales of fast food remained strong in 2009, indicating that they have not suffered from orwere not greatly impacted by the recent credit crunch. Indeed, they even benefited ascustomers downgraded from more expensive restaurants. In 2009, sales reached$1.5 billion (Euromonitor, 2010c). Further, the popularity of fast-food outlets amongyoungsters contributed to the growth. An estimated 20 per cent of young people inSwitzerland aged between 15 and 24 eat fast food more than twice a week (Euromonitor,2010c). The fast food industry is predicted to grow further, supported by time-pressedand busy customers looking for time-saving solutions (Euromonitor, 2010c). Fast-foodproviders are challenged by the increasing health focus and campaigns sponsored by theFederal Office of Public Health and major consumer protection associations that promptSwiss consumers to limit their fast food consumption. As a reaction to this trend,fast-food restaurants have adjusted their menu offerings. In order to cater to the healthconscious clientele, they make ingredient and nutritional information available on theirmenus (Euromonitor, 2010c). Burger fast food dominates the market with almost50 per cent of the total fast food value in 2009. McDonalds is a major contributor to thefast food brand with 42 per cent market share (Euromonitor, 2010c).

Research framework and hypothesesFigure 2 shows the research model. The goal of this research is not to test the completemodel, but to observe the impact of nationality on the other variables. As we already

Figure 2.Initial research model

Notes: Links between IVs (independent variables) and DVs (dependent variables) basedon literature; our specific six hypotheses

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have an idea of the five dimensions of national culture described by Hofstede for the twocountries, we focused on the consumers nationality instead of asking them questionsrelated to Hofstedes dimensions. We also aim to determine whether nationality has amoderating role on the other relationships between the different latent variables.

As SERVQUAL instrument has been used in several different cultural contexts, weopted for this instrument and we adapted the items of the five dimensions of SERVQUAL,which are reliability, responsiveness, assurance, tangibles, and empathy, to the fast foodindustry. We only focused on consumer perception of performance and not on theirexpectation. In this sense, we were more similar to SERVPERF.

The understanding of customers service quality perception and value is especiallyimportant to international service firms because such perceptions are susceptible tocultural differences (Lee and Ugaldo, 1997). Culture has an impact on how consumersperceive service quality. Customers in different countries may have different perceptions ofservice quality, which may be due to national cultural differences (Mattila, 1999; Furrer etal.,2000). As far as McDonalds is concerned, Vignali (2001) also argued that the perception ofthe quality perceived varies based on the country. Consumers from countries and cultureswith a long-term orientation such as China expect a long-term and close relationship withservice providers (Qin et al., 2010). According to them, reliability, responsiveness, andtangibles are three important attributes of service quality in the fast food industry in China.As the lifestyle of the Chinese is changing, they place a greater value on time (Qin et al.,2010). Winsted (1997) studied the importance given to service attributes by comparingAmerican and Japanese consumers. American consumers highlighted behaviours relatedto friendliness, promptness, and having a positive attitude. Japanese consumers put moreemphasis on kindness and caring. Heung et al. (2000) applied DINESERV to restaurants inChina and found that customers desire convenience in operating hours, cleanliness,politeness, courtesy, well-dressed employees and readable menus.

In order to satisfy service quality expectations with respect to global consumers, themanagement should recognise the differing needs emerging from different cultures.On the basis of Hofstedes five dimensions of culture, Hsieh and Tsai (2009) alsoanalysed the relationship between culture and service quality. Even if the fivedimensions of SERVQUAL are important for both Western and Eastern cultures, theyseem to be more important for Eastern cultures. Moreover, internationalproducts/services often have a different meaning in different countries (Trompenaarsand Hampden-Turner, 2002). While an experience in McDonalds is seen as a statussymbol in some countries, in others it is an everyday occasion. McDonalds is a moreprestigious symbol in China than in Switzerland. Based on these arguments, wehypothesize the following:

H1. Chinese consumers have a better perception of McDonalds service quality(reliability, tangibles, responsiveness, assurance and empathy) than Swissconsumers.

Product quality also influences customer satisfaction (Parasuraman et al., 1994;Andaleeb and Conway, 2006). Compared to Western countries, consumers from Easterncountries place a relatively high value on McDonalds meal. Furthermore, nutritionalvalue is gaining importance (Kara et al., 1995; Oyewole, 1999; Min, 2011) around theworld and this has a negative impact especially on fast-food outlets in Western countriessuch as Switzerland. Thus, we propose the following hypothesis:

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H2. Chinese consumers have a better perception of McDonalds product qualitythan Swiss consumers.

In addition to service/product quality, price also influences customer satisfaction(Fornell et al., 1996; Gilbert et al., 2004). Many customers have turned to fast food as it isoverall the cheapest option for eating out (Euromonitor, 2010a). A major problem whichinternational fast-food providers face is the price difference compared to local outlets(Qin et al., 2010). The significantly higher prices often prevent them from operatingsuccessfully. As Chinese customers reduced their spending for fast food in the first halfof 2009, McDonalds chose to decrease their average selling price by up to 30 per cent(Euromonitor, 2010a). However, while eating at a McDonalds is seen as a status symbolin Moscow, in New York it is a cheap and everyday occasion. This impacts thecompanys pricing strategy as McDonalds can price a hamburger considerably higherin cities like Moscow compared to New York relative to the earnings of customers. It isalso the case of cities in China. Indeed, prices are higher in China than in Switzerlandcompared to the earnings of the population. As product life-cycle is a determinant ofprice and as McDonalds is a more prestigious symbol in China than in Switzerland,Chinese consumers seem to judge prices as fair. We propose that the price fairnessperceived will be the same in the two countries, even if prices are higher in China relativeto the earnings of the population. Thus, we suggest the following hypothesis:

H3. Chinese consumers judge McDonalds prices as fair as Swiss consumers do.

As said above, eating at a McDonalds is more prestigious and has more value in Chinathan in Switzerland. This has an impact on the firms image. Furthermore, in all theworld and especially in Europe, eating healthy meals is gaining importance (Kara et al.,1995; Oyewole, 1999; Min, 2011) and despite the efforts made by some fast-foodproviders to improve their image, consumers do not seem convinced enough. Based onthese arguments, we hypothesize the following:

H4. Chinese consumers have a more positive image of McDonalds than Swissconsumers.

According to Leung et al. (2005), cultural values have a direct influence on customersatisfaction. Cultural values also directly influence customer behavioural intentions(Pizam and Ellis, 1999; Hoare and Butcher, 2008; Chung and Pysarchik, 2000). Attitudesand beliefs, which are integral parts of any culture, are believed to have an impact onsatisfaction levels. Therefore, depending on the cultural background, customers are aptto evaluate services differently and to hold different expectations about optimal andadequate encounters (Laroche et al., 2004). The existing literature contains limitedresearch about the impact of culture on customer satisfaction and loyalty, especially inthe Chinese context (Hoare and Butcher, 2008; Lin and Mattila, 2006).

Laroche et al. (2004) divided cultures into low- and high-context cultures. High-contextcultures need to build relationships and trust before conducting business and meaningcomes from the context in which something is said and from the status of the peopleinvolved. Non-verbal communication and visual cues take on additional meaning andimportance. The welfare of the group and maintaining group harmony are top priorities.In addition, cooperation, reasonableness and understanding of others are the mostadmired virtues. People often suppress their true feelings for the good of the group orof a relationship. In low-context cultures, meaning is taken from words and individual

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achievement and welfare are of prime importance. Thus, Asian consumers being part of ahigh-context culture can be expected to express dissatisfaction less often because of aneed to maintain group harmony. Switzerland belongs to a low-context culture andconsumers are therefore assumed to react if the obtained result is not satisfactory. From amarketing perspective, this suggests that customer loyalty is greater in a high-contextcountry such as China, because customers do not want to disturb the harmony of therelationship that they have established with the seller. China is a high-collectivist culturecharacterized by the fact that Chinese consumers seem to forgive service mistakes easiercompared to individualist cultures (Laroche et al., 2004). To these arguments, we againadd that as McDonalds is a more prestigious symbol in China than in Switzerland,Chinese consumers seem to be more satisfied and loyal than Swiss consumers. Thus, thefollowing hypotheses have been drawn:

H5. Chinese consumers are more satisfied by McDonalds than Swiss consumers.

H6. Chinese consumers are more loyal to McDonalds than Swiss consumers.

MethodologySampling and data collection proceduresThe questionnaire items in the Appendix present the operationalization of the modelvariables. Switzerland and China were selected to represent Western and Asian cultures.We selected McDonalds as it is globally a standardized and well-known fast-food chain.Students were chosen for our two samples. They were identified to be the currentcustomers of fast-food restaurants and consequently possess an intuitive understandingof fast-food outlets. Further, they do not have a lot of discretionary income to spendon eating out and are therefore likely to choose cheap options such as McDonalds.A student sample was also chosen to enhance sampling equivalence. This approach isoften used for cross-cultural studies as they minimize demographic and socioeconomicvariances (Clarke, 2001). Indeed, students share similar characteristics which facilitate acomparison of the variables in question. The sampling frame consists of Swiss studentsat Ecole hotelie`re de Lausanne and University of St Gallen, and Chinese students fromthe Beijing Hospitality Institute.

The questionnaire was sent to 683 Swiss students and to 572 students in Chinawhich results in a total number of 1,255. A total of 118 responses were collected, 66 fromSwiss students and 52 from Chinese students. This results in an overall response rate of9.4 per cent (9.7 per cent for the Swiss sample, 9.1 per cent for the Chinese sample). Therelatively low response rate of the present study can be explained by the length of thequestionnaire. Indeed, as we wanted to increase the reliability of respondents, we hadseveral items for the majority of our latent variables.

Data analysis methodData analysis was performed using ANOVA. Structural equation modeling (SEM) wasalso adopted to test the hypotheses because the model contains latent variables.We chose partial least squares (PLS), because it does not require a large sample(Fornell and Larcker, 1981). SmartPLS 2.0 was used for the analysis. We employed abootstrapping method (200 sub-samples) to test the significant level of regression pathcoefficients.

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ResultsReliability and validity of measuresTable I shows that all latent variables have a Cronbachs a higher than 0.6, whichconfirms that the scale reliabilities have adequate and stable measurement properties.Validity is assessed based on three main criteria, namely unidimensionality, convergent,and discriminant validity. An exploratory factor analysis can verify unidimensionality.For each construct, only the first eigenvalue is over one and thus, unidimensionalityis confirmed and validated (Droge, 1996). Convergent and discriminant validity arecomponents of a larger measurement concept known as construct validity (Straub et al.,2004). Convergent validity is shown when each measurement item is strongly correlatedwith its construct. It is usually satisfied by retaining variables whose loadings aregreater than 0.5, indicating that they share sufficient variance with their relatedconstruct. Discriminant validity is satisfied when each measurement item is weaklycorrelated with all other constructs except with the one to which it is theoreticallyassociated (Gefen and Straub, 2005). Table I shows the intercorrelation of the researchconstructs. The diagonal of this matrix represents the square root of the averagevariance extracted. For adequate discriminant validity, the diagonal elements should besignificantly larger than the correlation of the specific construct with any of the otherconstructs and should be at least 0.5 (Fornell and Larcker, 1981). In our case,discriminant validity is confirmed and sufficient to support the model.

Results and discussionTable II shows the comparison of means between the perception of Chinese andSwiss fast-food consumers. The first major difference comes from the perception ofproduct quality. Chinese consumers perceive a higher quality of product inMcDonalds (mean 3.28) compared to Swiss consumers (mean 2.25). Thisdifference seems to be very important. On Figure 3, we see that the nationalityexplains 25.7 per cent of variance of product quality perceived. Hence H2 issupported. Vignali (2001) argued that the perception of the quality of McDonaldsproducts varies based on the country. This point can also explain the fact that thereis no significant difference of perception about price. Indeed, the perception about thefairness of the price is very similar in the two samples. Consumers in China appear to

Constructs aa 1 2 3 4 5 6 7 8 9 10

1. Reliability 0.60 0.73b

2. Tangibles 0.71 0.08 0.673. Responsiveness 0.62 0.55 * * 0.20 * * 0.754. Assurance 0.67 0.27 * * 0.31 * * 0.46 * * 0.825. Empathy 0.71 0.42 * * 0.18 * 0.43 * * 0.45 * * 0.746. Product quality 1 0.09 0.29 * * 0.12 0.32 * * 0.06 17. Price 1 0.23 * * 20.06 0.29 * * 0.30 * * 0.33 * * 0.19 * 18. Image 0.79 0.36 * * 0.23 * * 0.19 * 0.17 * 0.28 * * 0.29 * * 0.26 * * 0.799. Satisfaction 0.70 0.31 * * 0.20 * 0.26 * * 0.39 * * 0.42 * * 0.29 * * 0.10 0.55 * * 0.78

10. Loyalty 0.80 0.21 * * 0.21 * * 0.29 * * 0.41 * * 0.39 * * 0.36 * * 0.21 * * 0.64 * * 0.54 * * 0.78

Notes: Correlation is significant at: *0.05 and * *0.01 levels; aCronbachs a; bdiagonal: (average

variance extracted)1/2 Pl2i =n 1=2

Table I.Reliability anddiscriminant validity

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be willing to pay a higher price relative to their earnings due to the fact that theyperceive a higher quality in McDonalds products. Hence H3 is supported.

Another significant difference is the image of the company. We notice that Chineseconsumers have a better image of McDonalds (mean 3.68) compared to Swissconsumers (mean 3.36). Hence, H4 is supported. On can conclude that compared toChina, McDonalds managers in Switzerland should work harder in order to improvetheir image. Healthy meals are gaining importance and compared to Chinese

MeanConstructs Swiss China Total mean Min. Max. ANOVA (F ) p-value

1. Reliability 3.264 3.599 3.412 1 5 7.965 0.006 *

2. Tangibles 3.401 3.691 3.529 1 5 5.984 0.016 *

3. Responsiveness 3.104 3.196 3.145 1 5 0.691 0.4074. Assurance 3.159 3.299 3.221 1 5 1.145 0.2875. Empathy 3.294 3.361 3.324 1 5 0.335 0.5646. Product quality 2.257 3.288 2.711 1 5 40.153 0.000 * *

7. Price 2.969 3.076 3.016 1 5 0.304 0.5828. Image 3.369 3.680 3.506 1 5 7.247 0.008 * *

9. Satisfaction 3.216 3.406 3.300 1 5 2.385 0.12510. Loyalty 2.716 3.071 2.872 1 5 5.290 0.023 *

Note: Significant at: *0.05 and * *0.01 levels

Table II.Comparison between the

perception of Chinese andSwiss fast-food

consumers: ANOVAresults

Figure 3.Results of thePLS analysis

Notes: Significant at: *0.05 and **0.01 levels; athe variable nationality is not ordinal;however as we have two groups (codification: Swiss consumers = 1 and Chinese consumers= 2), we normalized the data in order to measure the impact of this variable on the others;bthe five dimensions of SERVQUAL which are reliability, empathy, responsiveness, tangibles,and assurance define the latent variable service quality; we decide to not put them in theFigure 3 in order to keep it more readable

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consumers, Swiss consumers seem to not be convinced enough by the efforts done byMcDonalds or other fast-food restaurants.

As far as the degree of general satisfaction is concerned, there is no significantdifference between the two samples. However, Chinese consumers seem to have a higherdegree of loyalty towards McDonalds (mean 3.07) compared to Swiss consumers(mean 2.71), even if they are not more satisfied about McDonalds. Hence H5 isrejected and H6 is supported.

As far as the quality of service is concerned, we observe a significant difference forthese two sub-dimensions: reliability and tangibles. Chinese consumers perceive thesetwo sub-dimensions more positively compared to Swiss consumers. Hence one canclaim that H1 is partially supported.

Figure 3 shows the results of the PLS analysis. We observe the values of differentpath coefficients. As mentioned below the variable nationality is not ordinal. However,as we only have two groups (codification: Swiss consumers 1 and Chineseconsumers 2), we normalized the data in order to measure the impact of this variableon the others. As mentioned above, the profile of respondents (China vs Swissconsumers) influences significantly:

. the product quality perceived (g 0.507);

. the image perceived of McDonalds (g 0.203); and

. the degree of loyalty (g 0.139).As a moderator variable, we can observe that nationality influences the impact of imageon the degree of loyalty. This means that for Swiss consumers, the image (negative orpositive) perceived about the company has a more important impact on their loyaltycompared to Chinese consumers (g 20.163). The negative value is due to our codification.We also observe that nationality influences the impact of service quality on the image ofMcDonalds. It means that for Chinese consumers, the quality of service perceived has lessinfluence on the image of the company compared to Swiss consumers (g 20.356).

On the Figure 3, we also observe other relations between our latent variables, whichconfirm the literature and where there is no difference between our two samples (e.g. theimpact of satisfaction on loyalty). We also observe that the firms image and servicequality influence customer satisfaction the most (respectively g 0.379 and g 0.327).45.2 per cent of variance in customers satisfaction is explained by the independentvariables. Product quality and price fairness seem to not have an impact on customersatisfaction in a fast-food context. One can also claim that customer satisfaction is thevariable that has the strongest influence on customer loyalty (g 0.468). The image of thecompany perceived by the customer also has an impact on loyalty (g 0.183). The overallvariance explained in customer loyalty is 50.6 per cent, indicating that the proposed modelin this study could well predict and explain customer loyalty in our context.

Managerial implicationsFast-food managers must adapt themselves to the preferences of local consumers.In parallel, this study showed that some variables are perceived similarly by Swiss andChinese consumers. This implies that some measures should be standardized. In the caseof McDonalds, we discovered a clear difference of perception about the quality of food,but no significant difference about the service quality. As consumers in China perceive aprestigious symbol in McDonalds and a better quality of meal, they accept to pay a higher

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price relative to their earnings. The products life-cycle is a determinant factor for the priceand Chinese consumers seem to judge prices as fair. This result should be considered byother foreign fast-food companies desiring to establish in China.

Compared to China, fast-food managers in Switzerland should work harder in order toimprove their image. Indeed, Swiss and Chinese consumers perceived differentlyMcDonalds image. In the Western world, fast-food restaurants fight against their unhealthyimage. Therefore, it is not surprising that McDonalds reputation suffers. Fast-foodmanagers should adapt their offers to consumers expectations and try to improve theirproducts constantly in accordance with better health and hygiene standards. This is animportant issue for fast-food companies established in Switzerland. However, in a globalizedword, these expectations will soon be more or less generalized in other countries such asChina. Thus, fast-food managers should revise their offers and communicate their efforts toclients. In parallel, they have an ethical role to inform and educate their customers abouttheir different offers and the impact that this may have on their health.

Limitations and future workThis study is subject to some limitations. First, we must be careful in the generalizationof our findings to all fast-food restaurants, due to the fact that it concerns McDonalds.Second, the size of our two samples is small and is limited to students. Thus, the twosamples do not represent the entire consumer population. Nevertheless, the use of astudent sample is not rare as students are a legitimate proportion of the customer baseof many fast-food restaurants (Min, 2011). Third, as we selected students from cities,we again must be careful in the generalization of our findings. For example, one cansuppose that Mcdonalds prices perceived by people living in Chinese cities are differentcompared to people living in underdeveloped cities and rural areas. Fourth,measurement of product quality perceived was carried out using a single-item scale.

A possible area for future research is to explore other fast-food providers and compareresults with McDonalds. It would also be interesting to study other types of restaurants andto observe the similarities and differences between the two cultures. Another possible areafor future research is the comparison with other countries and cultures such as the US, India,Japan, etc. Finally, it may be useful to make the same research in ten years and observe theevolution of behaviours and perceptions over time.

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Appendix. Questionnaire itemsLoyalty

McDonalds is my favorite fast-food.

I eat at McDonalds more often than in other fast-food restaurants.

I would say positive things about McDonalds to other people.

I would encourage friends and family to eat at McDonalds.

Satisfaction

Overall, I am satisfied with my experience in McDonalds.

Eating at McDonalds is a good experience.

I am happy with the way the staff treated me.

Image

McDonalds is a reliable company.

McDonalds has a good reputation.

McDonalds has a good image.

People in my country have a positive attitude towards McDonalds.

Service quality (an adaptation of SERVQUAL)

Reliability

At McDonalds I always receive what I order.

McDonalds employees are always available to help.

At McDonalds I do not have to wait long to receive my order.

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Empathy

McDonalds treats me fair.

McDonalds has convenient operating hours.

McDonalds employees listen to me.

Tangibles

McDonalds outlets are clean.

McDonalds employees are neat.

There is always enough space to sit down.

Responsiveness

I receive my order immediately.

Queues at McDonalds are short.

McDonalds employees are helpful.

Assurance

I fell secure in a McDonalds outlet.

McDonalds employees are competent.

I trust employees.

Product quality

McDonalds food quality is high.

Price

McDonalds prices are fair.

Notes: These questionnaire items measured the model variables. It is only part of thequestionnaire that was sent to our population. The original questionnaire has a differentstructure and look. All items in each construct were evaluated on a 1 to 5 scale with 1 beingstrongly disagree and 5 being strongly agree.

About the authorsReza Etemad-Sajadi is currently Professor of Services Marketing and Management atEcole hotelie`re de Lausanne. He holds a PhD (Management) from the University of Neuchatel,and MA and BS (Engineer) from Ecole polytechnique federale de Lausanne (EPFL). Beforecoming to EHL, he was a researcher/lecturer at the Enterprise Institute of the University ofNeuchatel where he received the Credit Suisse Award for Best Teaching. His research interestsare services marketing and international marketing. Reza Etemad-Sajadi is the correspondingauthor and can be contacted at: reza.etemad@ehl.ch

Daniela Rizzuto holds a BS from Ecole hotelie`re de Lausanne. She is now working as a PrivateBanking Assistant for Corne`r Bank.

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