MARKETING MANAGEMENT II

STUDY OF FACTORS IN RESTAURANT AMBIENCE

INFLUENCING CUSTOMER SATISFACTION

GROUP 8

INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE

Ashwini Kumar
(PGP/19/069)
Isha Barapatre
(PGP/19/079)
Nishit Jain (PGP/19/089)
Ravi Mohan Bhola
(PGP/19/100)

Contents
Abstract................................................................................................................. 3
Introduction........................................................................................................... 3
Literature Review................................................................................................... 4
Research Question....................................................................................... 4
Synthesis and Application...........................................................................5
Research Methodology........................................................................................... 7
Sampling..................................................................................................... 8
Measurement & Scaling...............................................................................8
Quantitative Methods..................................................................................8
Qualitative Methods.................................................................................... 7
Data Analysis....................................................................................................... 10
Regression................................................................................................. 10
Conjoint Analysis....................................................................................... 14
Discussion............................................................................................................ 16
Limitations........................................................................................................... 19
Future Research................................................................................................... 20
Bibliography......................................................................................................... 22

TITLE AND ABSTRACT

The study which we are considering addresses the reasons for IIMK students to prefer a particular
restaurant in terms of aesthetics and ambiance in the city of Kozhikode. Mainly, it examines the
overall ambiance factors which a customer priorities and is willing to pay extra for availing those
improved services. The previous studies to determine such factors are limited and not specific to
restaurant chains. Based on preliminary focus group discussions, the 6 main components/factors
were considered and further used for study and analysis.
We received 110 responses from respondents of IIMK students and also considered focus group
discussion to figure out the factors students consider while deciding to go for a particular
restaurant. The analysis was done using linear regression. Further, we did conjoint analysis using
18 cards for 10 respondents to further prove our results.
The results indicate that IIMK students mainly prefer Cleanliness as the topmost ambiance factor
while selecting to visit a restaurant as compared to other factors. We even found out individual as
well as overall importance of ambiance factors for each restaurant to determine where they need to
improve.
The main factors which customers look for in a restaurant are cleanliness, dcor, fragrance,
lighting and seating arrangements in the preference order. However, further studies with bigger
sample size and broader geographical scopes around the city are needed to clarify findings.

INTRODUCTION
For any business activity consumer is the most important factor and its importance gets manifested
when the business includes service activity. In this competitive business environment where the
competitive difference in services and products are essentially narrowing down, restaurant service
experience has become the differentiating factor for most. When it comes to services, the service
providers task is essentially to tangibilize the intangible. Service firms try to demonstrate their
service quality through physical evidence and presentation.
Kotler (1973) claims that atmospheric aspect of the store have often been given less importance
because managers usually tend to focus more on practical and operational aspects. He also

maintained that designing the store area to induce desired cognitive and emotional feelings in the
customer is not an easy job. A number of researches have proposed a dependency of satisfaction
level and purchase behaviour of the customers on the environment of the store (Donovan et al.,
1994).
However, the existing literature regarding influence of the entire setting of the restaurants on the
emotional reaction of the customers and their approach to purchase and loyalty, when all
components of the restaurants environment traditionally identified by lighting, cleanliness,
fragrance, dcor and seating arrangement etc. come into play together, is limited. So, we propose
to further do exploratory research through various techniques to determine the effect of the above
components and how much people are willing to pay extra if these services component are
improved.
Theoretical frameworks to adequately determine the effect of surrounding or store ambiance in
consumer behaviour are lacking which leads managers to depend on their intuitions while
designing the store area. This leads to a selection of specific design without knowing the effect of
that design on consumer preference. Such selections are vulnerable and may not give the desired
outcome in terms of customer preference.
The aim of the research is to determine the components of store ambiance that influence the
customer preference and to understand and establish the relationship of customers behaviour on
these components of store ambiance. The components are:
lighting, cleanliness, fragrance, dcor and seating arrangement.
With the help of qualitative and quantitative research followed by data analysis, we want to see if
feasible relation could be achieved. The survey also provides analysis about individual restaurants,
what measure they should adopt to improve ambiance and overall analysis for restaurants to
determine the critical ambiance factor responsible for selection of a particular restaurant by
customers.
LITERATURE REVIEW
Research Question:

The aim of the research is to determine the components of restaurant

ambiance that influence the customer preference and to understand and establish the relationship of
4

customers behaviour on these components of restaurant ambiance

Synthesis and Application:
The Place of Product Design and Aesthetics in Consumer Research: Robert W.
Veryzer, Jr.
This paper gives us an idea about how important product design and aesthetics is and how
they impact the consumer preferences. This scholarly article draws attention towards the
fact that even though intuitively and logically one can infer that product design and
aesthetics play an important role in influencing consumer behaviour, not much research and
formal studies have been conducted in this regard. This article emphasises on the fact that
this topic warrants more attention of consumer researchers.
Consumer behaviour in the Food Service Industry: A Review: Nick Johnsa, Ray Pineb
This research article deals with the consumer behaviour in the food service Industry and
gives us good insights on how aesthetics and ambience affect consumer preferences. This
article reviews the extensive, multidisciplinary body of literature relating to consumer
studies in food service which provides us a good foundation to go about our study.
Effects of Store Characteristics and In-Store Emotional Experiences on Store
Attitude: Changjo Yoo, Jonghee Park, Deborah J. MacInnis
This research paper examines how various attributes of retail environments influence
consumers responses and how these emotions influence consumers store attitudes... The
data indicates that store attributes have a huge effect on consumers in-store emotions.
These emotional experiences serve as a critical mediator in the store attributestore
attitudes relationship. These insights will assist us in deciding the impact of ambience and
aesthetics on consumer preferences and how it affects consumer emotions.
Design Aesthetics Principles of Pleasure in Design: Paul Hekkert
This paper talks about four principles of aesthetics which are imperative to attract
customers towards a product or service. The first principle describes that a design can be
called aesthetically effective if it is done at minimal cost. On the other hand the second
principle says that the customers should be sensitive enough to identify the aesthetic
uniqueness. The third principle highlights the originality and typicality of the products.
While the fourth principle focuses on the quality aspect of the product. Thus this report will
work as an important source to identify the pleasure in design and ambience which the
customers seek.
Visual Aesthetics in Product Development A Balance Between Commercial and
Creative Imperative: Ingela Lindahl

The aforementioned paper mentions the three important phases of new product
development which have important dimensions of visual aesthetics: Idea generation, Idea
screening and concept development and testing. Secondly, it highlights the various
designing and marketing approaches. Thirdly, how sourcing and collaboration with design
resources can be done during the development of new products. Thus, this research paper
provides us information pertaining visual aesthetics and ambiance in the process of new
product development.
Faces of Product Pleasure: 25 Positive Emotions in Human-Product Interactions:
Pieter M. A. Desmet
The paper deals with how products can evoke a wide range of emotions in consumers
mind both positive and negative. There are a lot of factors like anxiety, experience also
affect the buying behaviour. There are 25 attributes that can affect the buying behaviour
which are correlated in the paper.
Influence of Physical Environment on Disconfirmation, Customer Satisfaction, and
Customer Loyalty for First-time and Repeat Customers in Upscale Restaurants:
Kisang Ryu, Heesup Han
The paper showed using a structural equation modelling analysis study that facility
aesthetics, lighting, layout, and social factors had significant effects on disconfirmation.
This also had direct influences on customer satisfaction and customer loyalty. Customer
satisfaction also positively influences customer loyalty. This paper also emphasizes that the
aesthetics and ambience has different effect on first timer and regular customer.
The Effect of Visual Product Aesthetics on Consumers Price Sensitivity: Yigit
Mumcu, Halil Semih Kimzan
The study determines that there is a strong negative relationship between Aesthetics of
products and price sensitivity of consumers. This implies that consumers prefer products
with impressive and powerful designs and are willing to pay price premium for it. This
stresses upon organizations to have designers who are capable of designing products which
are visually appealing and can impact profitability in the long run. Apart from Consumer
behaviour and preferences, visual product aesthetics plays a key role in having a corporate
identity and brand image for large firms.
The Influence of Urban Aesthetic Design on Consumers Inferences of Store
Atmosphere, Product Quality, Service Quality and Willingness to Buy: Alessandro De
Nisco, Gary Warnaby
This study9 evaluates the effects of external as well as internal environment on consumers
preferences before deciding upon selecting the store for purchasing essentials. External
factors include the aesthetic design of urban environment where the store/facility is located
6

and consumers lay their basis upon that to determine the product and service quality
offered. Internal factors like store atmosphere plays an important role in affecting
perceptions of product and service quality. Thus we use the above analysis to lay our
foundation for further research about the overall ambience of store/facility on consumer
preferences and choices.
RESEARCH METHODOLOGY
The aim of the research is to determine the components of store/outlet ambiance that influence the
customer preference, understand and establish the relationship of customers preferences on these
components of store ambiance. For simplicity and ease of availability of primary data only the
restaurant service has been chosen for the research. This also ensures specific conclusions and a
research framework that can be extended to other consumer services like banking, retail stores, etc.
A two phase research methodology has been adopted for this research. The first phase which is
essentially a qualitative research focusses on identifying the factors that constitute the outlet
ambiance according to the customers. The second phase is a detailed quantitative research based
on the inputs from the qualitative research and focusses on establishing the relationship of
customers preferences on the components of ambiance. Both primary and secondary data have
been used for the research.
Qualitative Research:
1. Literature Review: 9 research papers have been reviewed along with articles and expert
opinions on the subject available on the internet. Literature review suggests that both
external factors like the aesthetic design of urban environment where the store/facility is
located and internal factors like store atmosphere play an important role in affecting
customers perceptions of product and service quality. Research papers also indicate that
store attributes have a huge effect on consumers in-store emotions.
2. Focus Group Discussion: A focus group discussion involving 8 participants from IIM
Kozhikode students was conducted to gauge the factors that they felt important while
defining ambiance of a store/outlet. Questions were not restricted to only the food service
industry (restaurants) but also extended to other services like banks, theatres, hospitals and
retail stores. so that a comprehensive list of all important factors could be prepared before
the quantitative research was conducted. Homogeneity of the participants was ensured

through their background details and the adequacy of their experience in visiting different
types of stores/outlets
Quantitative Research:
1. Sampling: A convenient sampling approach has been used to collect the requisite data. The
data has been collected from the students of IIM Kozhikode and friends and families of the
group members. This method of sampling had the advantage of easy and quick data
collection. However, the associated disadvantage can be the vulnerability to selection bias
and apprehensions on the generalizability of the research findings.
2. Measurement & Scaling: The research required to tap the subjective perception of
consumer about ambiance and their attitude towards each of the significant factors of
ambiance. As such, metric variables and Likert scale were used to frame the survey
questionnaire.
3. Survey Questionnaire: A Survey Questionnaire through Googles online platform was
floated on the internet and the link was made available to prospective respondents through
social media channels like facebook, email, Whatsapp, etc. The survey questions were
framed to determine the customers perception to individual factors of ambiance viz.
fragrance, dcor, lighting, cleanliness, seating arrangement & spacing and location with
respect to 4 selected restaurants viz. Sixth Avenue, Paragon, Broast and Guru Prasad. The
questionnaire has been enclosed as Appendix I. 110 respondents filled the survey and the
data obtained from them has been used for further statistical analysis.
4. Statistical Analysis: After sourcing the data from primary & secondary research the
Statistical Analysis of the data has been conducted on SPSS software package. The
following analysis has been conducted on the package:
a. Regression: Linear regression was done with the rating on each attribute as independent
variable and the satisfaction level of the restaurant as dependent variable.
b. Conjoint Analysis- All the attributes are rated into 3 categories Good, Average and
Bad. There are 6 attributes fragrance , Dcor, lighting , cleanliness , Location,
Seating arrangement that are to be verified for restaurants. Hence 18 cards were
generated by SPSS and given to respondents to rate. From the analysis we can get the
importance of each attribute.
c. Cluster analysis: From the conjoint analysis we tried to get the cluster from the
respondents.

Focus Group Discussion Results:

The important parameters constituting the customers perception about store/outlet
ambiance as observed from the Focus group discussion are as follows:
a. Cleanliness
b. Dcor
c. Fragrance
d. Location
e. Lighting
f. Seating arrangement and spacing
g. Other minor factors also included the type of attire worn by the servers, sign boards,
plantations and type of crowd/visitors visiting the place
The participants were asked to write (on a separate sheet of paper) the extra percentage of
ticket size they were willing to pay just for a better ambiance with respect to restaurant
services. The participants responded as below:

Sl.

Participant

Extra % of amount willing to pay for ambiance

No
01
02
03
04
05
06
07
08

P1
P2
P3
P4
P5
P6
P7
P8

25%
10%
30%
15%
10%
10%
15%
15%

On an average the participants were willing to pay mostly in the range of 10-15% extra just
for a better ambiance in the restaurants.
ANALYSIS

REGRESSION
Regression Equation between Ambience Parameters/Factors and Consumer Satisfaction (Sixth
Avenue)
Coefficientsa
Model

Unstandardized Coefficients

Standardized

Sig.

Coefficients
B
1

(Constant)

Std. Error
-1.814

.519

Beta
-3.495

.001

Sixth_Avenue_Fragrance

.306

.116

.158

2.627

.010

Sixth_Avenue_Decor

.275

.125

.170

2.200

.030

Sixth_Avenue_Lighting

.404

.118

.275

3.430

.001

Sixth_Avenue_Cleanliness

.795

.107

.525

7.442

.000

Sixth_Avenue_Location

.089

.070

.062

1.257

.212

SixthAvenueSeatingArrange

.001

.115

.001

.011

.991

mentampSpacing
a. Dependent Variable: SatisfactionSixth
Model Summary
Model

R Square

.874a

Adjusted R

Std. Error of the

Square

Estimate

.764

.751

.548

ANOVAa
Model

Sum of Squares
Regression

Mean Square

100.177

16.696

30.878

103

.300

131.055

109

Residual
Total

df

Sig.
.000b

55.694

Regression Equation between Ambience Parameters/Factors and Consumer Satisfaction (Paragon)

Coefficientsa
Model

Unstandardized Coefficients

Standardized

Sig.

Coefficients
B
(Constant)

Std. Error
-1.221

.346

Paragon_Fragrance

.302

.150

Paragon_Decor

.420

Paragon_Lighting

Beta
-3.532

.001

.186

2.017

.046

.186

.256

2.257

.026

.086

.162

.053

.528

.598

Paragon_Cleanliness

.578

.122

.367

4.722

.000

Paragon_Location

.223

.090

.172

2.476

.015

Paragon_Seating_Arrangem

.105

.120

.068

.878

.382

ent_spacing
a. Dependent Variable: SatisfactionParagon
Model Summary

10

Model

R Square

.866

Adjusted R

Std. Error of the

Square

Estimate

.749

.735

.798

ANOVAa
Model

Sum of Squares
Regression

Mean Square

195.954

32.659

65.510

103

.636

261.464

109

Residual
Total

df

Sig.
.000b

51.349

Regression Equation between Ambience Parameters/Factors and Consumer Satisfaction (Guru

Prasad Restaurant)
Coefficientsa
Model

Unstandardized Coefficients

Standardized

Sig.

Coefficients
B
(Constant)

Std. Error

Beta

-2.749

.342

-8.045

.000

GuruPrasad_Fragrance

.364

.113

.164

3.214

.002

GuruPrasad_Decor

.279

.122

.107

2.290

.024

GuruPrasad_Lighting

.187

.082

.118

2.285

.024

GuruPrasad_Cleanliness

.948

.087

.562

10.903

.000

GuruPrasad_Location

.231

.084

.167

2.753

.007

GuruPrasad_Seating_arreng

.239

.112

.147

2.136

.035

ement_spacing
a. Dependent Variable: GuruprasadSatisfaction

Model Summary
Model

R Square

.915a

Adjusted R

Std. Error of the

Square

Estimate

.836

.827

.608

ANOVAa
Model
1

Sum of Squares
Regression

df

194.340

Mean Square
6

11

32.390

F
87.720

Sig.
.000b

Residual
Total

38.032

103

232.373

109

.369

Regression Equation between Ambience Parameters/Factors and Consumer Satisfation (Broast)

Coefficientsa
Model

Unstandardized Coefficients

Standardized

Sig.

Coefficients
B
(Constant)

Std. Error

Beta

-2.105

.332

-6.336

.000

Broast_Fragrance

.181

.141

.102

1.282

.203

Broast_Decor

.192

.190

.092

1.008

.316

Broast_Lighting

.080

.238

.033

.336

.738

Broast_Cleanliness

.945

.123

.527

7.659

.000

Broast_Location

.270

.074

.162

3.641

.000

Broast_Seating_arrangemen

.321

.076

.256

4.213

.000

t_Spacing
a. Dependent Variable: BroastSatisfaction
Model Summary
Model

R Square

.914a

Adjusted R

Std. Error of the

Square

Estimate

.836

.826

.611

ANOVAa
Model

Sum of Squares
Regression

Residual
Total

df

Mean Square

195.779

32.630

38.439

103

.373

234.218

109

Sig.
.000b

87.435

OVERALL MODEL REGRESSION OUTPUT

Coefficientsa
Model

Unstandardized Coefficients

Standardized

Sig.

Coefficients
B
1

(Constant)

Std. Error
-1.636

.174

12

Beta
-9.404

.000

Fragnance

.257

.062

.148

4.134

.000

Dcor

.264

.062

.174

4.278

.000

Lighting

.227

.057

.144

3.997

.000

Cleanliness

.693

.050

.451

13.781

.000

Location

.190

.037

.137

5.186

.000

SeatingArrangement

.213

.048

.130

4.422

.000

a. Dependent Variable: Satisfaction

ANOVAa
Model

Sum of Squares

df

Mean Square

Regression

852.050

142.008

Residual

216.494

433

.500

1068.543

439

Total

284.025

Sig.
.000b

Model Summary
Model

.893a

R Square

Adjusted R

Std. Error of the

Square

Estimate

.797

.795

.707

CONJOINT ANALYSIS
The SPSS generated the following 18 cards for 6 different attributes (The parameters generated
during FGD) with three levels (Bad, Neutral and Good)

Fragrance
Good
Bad
Good
Bad
Neutral
Good
Neutral
Neutral
Bad
Good
Bad
Bad
Good
Bad

Dcor
Neutral
Good
Good
Neutral
Bad
Neutral
Good
Bad
Bad
Bad
Neutral
Good
Bad
Bad

Lighting
Bad
Neutral
Good
Good
Bad
Neutral
Neutral
Neutral
Good
Neutral
Neutral
Bad
Good
Bad

Cleanliness
Neutral
Neutral
Bad
Bad
Bad
Bad
Bad
Good
Neutral
Neutral
Good
Good
Good
Bad
13

Location
Bad
Bad
Neutral
Neutral
Good
Good
Bad
Neutral
Good
Neutral
Good
Neutral
Bad
Bad

Seating
Arrangement
Bad
Good
Bad
Good
Good
Neutral
Neutral
Bad
Neutral
Good
Bad
Neutral
Neutral
Bad

Neutral
Good
Neutral
Neutral

Good
Good
Neutral
Neutral

Good
Bad
Good
Bad

Neutral
Good
Good
Neutral

Good
Good
Bad
Neutral

Bad
Good
Good
Neutral

Alpha Value
0.548
5.304
2.025
0.86
0.904
0.806
0.834
0.903

Fragrance
Neutral
-0.353
1.234
1.072
0.579
0.426
0.499
0.518
1.246

Fragrance
Good
0.828
1.579
1.54
1.616
1.382
1.102
1.7
2.23

Dcor
Neutral
2.097
-0.572
-0.366
1.687
1.139
0.62
0.499
1.101

Dcor Good
2.186
-0.067
0.761
2.021
1.891
1.435
2.066
1.887

Lighting
Neutral
-0.759
-1.632
-0.915
-0.366
-0.092
-0.023
0.039
-0.282

.184

.305

.500

.695

1.695

.390

-.841

.788

1.092

1.262

1.628

.640

Cleanliness
Neutral
1.395
1.162
1.04
1.433
0.965
1.286
1.267
1.847

Cleanliness
Good
2.031
1.651
2.072
2.012
1.842
2.715
1.751
2.179

Location
Neutral
0.386
-1.428
-0.134
-1.237
0.394
0.413
0.235
0.016

Location
Good
1.105
1.004
2.127
1.634
1.518
1.781
1.783
1.52

Seating
Neutral
-0.292
-0.646
0.221
1.205
0.909
0.832
0.182
-0.21

Seating Good
2.391
0.021
1.555
0.855
0.926
1.266
1.132
0.207

1.000

1.305

1.138

1.667

1.195

1.695

2.200

3.680

.905

1.700

1.537

1.453

CONJOINT ANALYSIS OF AGGREGATE MODEL

All the ratings generated for the different cards were collated and the analysis was done on the
aggregate model. This gave us a sample space of 180 ratings.
Coefficientsa
Model

Unstandardized Coefficients

Standardized

Sig.

Coefficients
B
1

Std. Error

(Constant)

.905

.299

DFraN

.587

.204

DFraG

1.079

DDecN

.567

Beta
3.025

.003

.141

2.871

.005

.202

.260

5.349

.000

.204

.137

2.774

.006

14

DDecG

1.562

.204

.376

7.644

.000

DLigN

-.122

.186

-.029

-.653

.515

DLigG

1.415

.193

.353

7.332

.000

DCleN

1.082

.202

.261

5.361

.000

DCleG

2.079

.204

.501

10.177

.000

DLocN

.285

.204

.069

1.395

.165

DLocG

1.828

.202

.441

9.062

.000

DSSN

.766

.204

.185

3.749

.000

DSSG

1.423

.204

.343

6.963

.000

a. Dependent Variable: OverallRatings

ANOVAa
Model

Sum of Squares

df

Mean Square

Regression

484.897

12

40.408

Residual

203.925

167

1.221

Total

688.822

179

Sig.

33.091

.000b

Model Summary
Model

.839a

R Square

Adjusted R

Std. Error of the

Square

Estimate

.704

.683

1.10504

a. Predictors: (Constant), DSSG, DLocG, DCleG, DLigN, DDecG,

DFraG, DLigG, DCleN, DSSN, DLocN, DDecN, DFraN

DISCUSSION
FOCUS GROUP DISCUSSION
We conducted a focus group discussion amongst 10 students of IIM Kozhikode to ascertain the
important factors or parameters one looks for in the ambience of a restaurant. Based on the
interview, we finalised on six main parameters what IIM-K students look forward to for a good
ambience, namely

Fragrance
Dcor
Lighting

15

Cleanliness
Location
Seating Arrangement and Spacing

REGRESSION
Based on the above parameters, we designed a questionnaire to test how these parameters reflected
in the consumer satisfaction and on what priority basis were they ranked by the aforementioned
consumers. We floated this questionnaire online where responses were collected through medium
like e-mail, WhatsApp, Facebook etc. We asked them a variety of questions, mostly itemized
rating scale (Likert) questions to gauge the consumer behaviour. All the non-demographic
questions were based on their experiences on four restaurants based in Kozhikode City and
Kunnamangalam, which were Sixth Avenue, Paragon, Guru Prasad and Broast. We collected data
from 110 respondents, all of whom had been to the restaurant at least once.
We encoded the raw data in the SPSS and ran Linear Regression for the following
1)
2)
3)
4)
5)

Importance of each parameter for consumer satisfaction for Sixth Avenue

Importance of each parameter for consumer satisfaction for Paragon
Importance of each parameter for consumer satisfaction for Guru Prasad
Importance of each parameter for consumer satisfaction for Broast
Overall importance of each parameter for consumer satisfaction

After running the regression, we compiled the individual data obtained for each restaurant i.e., 110
and compiled it into a consolidated data to get a regression equation for the overall data i.e., 440.
This was done so as the questionnaire specifically asked for the satisfaction response based on how
they rated each restaurant on these 6 parameters and hence did not take the brand of the restaurant
into cognisance, making the data bias free and hence addable.
The regression done on the individual restaurants showed occasional parameter which was
insignificant, because of the paucity of the data collected. However, it wasnt an issue while
running the regression on overall data as the significance values for the overall regression model as
well as the independent parameters was 0.000. (Data run for this regression was 440).
The results obtained by regression analysis are as follows:
Sr. No.

Restaurant

Sixth

B value
Factor
Cleanlines

Avenue
Paragon

s
Cleanlines

B
.795

Significance
Factor
Seating

Significance
.991

.874

.578

Arrangement
Lighting

.598

.866

16

R value

s
3
4

Guru Prasad

Cleanlines

.948

Broast

s
Cleanlines

.945

Seating

.382

Arrangement
Nil

Nil

.915

Fragrance
Dcor
Lighting

.203
.316
.738

.914

The people visiting Sixth Avenue are found to be very particular about cleanliness as B
value is evidently high (.795). On the other hand we figured that seating arrangement of
sixth Avenue does not concern the customers much (Sig is .991). Here, the satisfaction
level of customers is heavily dependent upon the aforementioned parameter as the
correlation coefficient is .874.
Above results tell us that customers of Paragon also seek cleanliness as an imperative
factor. (B value .578). Whereas lighting and seating arrangement are trivial factors for
them. (Sig is .598 and .382 respectively). The high value of R (.866) implies the
dependency of satisfaction of customers on all the factors mentioned above.
Out of all the restaurants the B value of Guru Prasad turned out to be maximum (.948)
which depicts the cleanliness consideration of customers is high while choosing Guru
Prasad over others. The high value of R (.915) implies the high correlation between
independent and depend variables. It was also found that customers gives equal importance
to all the ambience parameters thus no parameter was found with significance value more
than .05.
Same as other restaurant we concluded that Broast is also chosen because of its cleanliness
factor. (B is .945). Contradictory customers at Broast are very concerned about the kind of
fragrance, dcor or lighting Broast has. A high ependecy of satisfaction level of customers
on these factors was found from the analysis(R value .914).
Cleanliness is the most important factor for the students of IIM-K in the overall analysis and
forms a significant portion of the satisfaction ratings, close to 0.7 much ahead that other five
factors which are in the vicinity of 0.25
CONJOINT ANALYSIS

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We also conducted a conjoint analysis for 10 students at IIM Kozhikode to check how each of
them values these six parameters and their priority in judging the ambience of a restaurant. We
provided the attributes (the above-mentioned six parameters) and three different levels for each
attribute (Bad, Neutral, and Good) with bad being the reference level for all the parameters. SPSS
gave us 18 cards, which we then used to collect the data for 10 students.
These were the insights gained from the conjoint analysis
1) Out of 10, 5 obtained a result wherein the highest weightage was given to the Good
level of Cleanliness, and 3 to Dcor which corroborate to the insight obtained by the
regression analysis of the survey data, which clearly showed that Cleanliness followed
by dcor are the two most important parameter for the IIMK students in assessing the
ambience of the restaurants
2) We checked the data collected for conjoint by internal validity, wherein we got
accuracy above 80% for all the data and more than 85% for 70% of the data
3) The overall conjoint analysis of the aggregate model (180 responses) also reiterated the
same insights as gained through regression of survey data and individual conjoint
analysis
4) Moreover, the correlation in the aggregate model was as high as 0.83 showing how
good these factors help in explaining customer satisfaction
5) Reading in the aggregate model followed the same script with Cleanliness being he
most important factor, followed with location and dcor.

LIMITATIONS
o Ambience has been treated as a function of six factors for the purpose of this research. There
might be a few more factors with, although might not affect the ambience of the restaurant,
might affect the perception of ambience at the restaurant.
o The sample size is relatively small and it is restricted to the student community. As all the
respondents are students, their preferences would be different with respect to ambience. There
might also be other factors such as the seating arrangement favoring a group gathering (for
families or group of friends) rather than a one on one interaction (students in groups of two).
This would influence the students perception of ambience of the restaurant which is difficult to
account for. Therefore, the results of the survey must be interpreted in this context.

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o Homogeneity in the sample is another area of concern. As most of the respondents fall in the
same income level group, the level of importance levied upon various factors of ambience
considered in our research might differ for other demographics.
o The most important limitation to be addressed is the Response Bias. Given that we have
collected the responses both by floating a survey form and by asking the respondents and an
interview entering the responses on behalf of the responded, there is scope for response bias to
seep in, especially in the second way of collection of data.
o In the responses collected by the interviewer, when the interviewer is asking the questions (as
few respondents were unwilling to fill the form themselves), there is a chance of the responses
being incorrect or misleading. There are chances of the respondents giving answers that are
most widely accepted or perceived as right. Another area of concern is that when multiple
respondents have taken our survey consecutively, one respondents response could potential
bias the response of the nest respondent.
o But we have taken considerable measures to avoid responses in groups and thereby eliminate
the above mentioned error. There might be some error resulting from misinterpretation of the
question or the respondent providing misleading answers.
FUTURE RESEARCH
o Further research can be conducted involving a diverse sample group and by using a stratified
sampling should be used to make sure that the sample resembles the population or target
customers. More restaurants can also be included along with the larger sample size for better
accuracy.
o The research can be extended by including more factors, such as music, that might be affecting
ambience.
o Now that we have explored the impact of ambience on consumer perception, research can be
done to explore the impact of ambience on food intake and food choice. This research can also
focus on the variation in the impact of ambience on food intake and food choice in various
cuisines.
o As the research gives insights into consumer behavior in the context of restaurants and how
consumer perception varies with respect to various factors connected to ambience, research can
be extended to the entire hospitality industry to understand how ambience affects consumer
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perception of hotels, hotel rooms, conference halls, event planning and especially the tourism
industry.
o The results of this research can be used to conduct exclusive research in the Tourism industry
and understand how consumer behavior and preferences change when the respondents are in
the role of tourists. This can be correlated with results of this research to understand if tourists
place a higher level of importance on ambience of a place. It can also be examined if the
factors affecting the perception of ambience change.

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BIBLIOGRAPHY
1. The Place of Product Design and Aesthetics in Consumer Research: Robert W.
Veryzer, Jr.
2. Consumer behaviour in the Food Service Industry: A Review
3. Effects of Store Characteristics and In-Store Emotional Experiences on Store
Attitude
4. Design Aesthetics: Principles of Pleasure in Design
5. Visual Aesthetics in Product Development A Balance Between Commercial and
Creative Imperative
6. Faces of Product Pleasure: 25 Positive Emotions in Human-Product Interactions:
Pieter M. A. Desmet:
7. Influence of Physical Environment on Disconfirmation, Customer Satisfaction, and
Customer Loyalty for First-time and Repeat Customers in Upscale Restaurants:
Kisang Ryu, Heesup Han
8. The Effect of Visual Product Aesthetics on Consumers Price Sensitivity: (Yigit
Mumen, Halil Semih Kimzan)
9. The Influence of Urban Aesthetic Design on Consumers Inferences of Store
Atmosphere, Product Quality, Service Quality and Willingness to Buy: Alessandro
De Nisco, Gary Warnaby

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