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CHAPTER 2

REVIEW OF RELATED LITERATURE AND STUDIES

This chapter presented the relevant literature and studies that the

researcher considered for better comprehension of the study, strengthening

the importance of the study. Also, it provides more background and proper

direction for the study.

Related Literature

Coffee shop

The coffee shop establishment is quite innovative to be able to

compete to other establishments. Given these attributes, Managers and

owners of coffee shop must strive hard to retain existing consumers and

attract new customers. Customers must be properly understood by such

businesses (Lee et al., 2018).

A café, coffee house, or coffee shop is a business that primarily serves

coffee and other hot beverages. As the name indicates, a café/coffee

house/coffee shop focuses in coffee and tea, as well as light appetizers. In

1645, Italy is where the first coffee shop was constructed. The trend of coffee

shops afterwards spread to England and beyond in 1652 (Pongsiri, 2013).

In today's culture, coffee shops have become a need and a pleasure for

many individuals since they draw a wide range of people, from employers

and professionals to adolescents. Along with the items on its menu, the
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coffee shop also promotes a friendly atmosphere. To attract more

customers, a coffee shop provided amenities including cable TV, live music,

and wifi hotspot access points that provide free internet connection for

patrons who wish to use a laptop while sipping coffee. Consequently, there

are many reasons why people would desire to visit a coffee shop. Some

people keep up their social life over coffee (Said, 2012).

Coffee shops are popular around the world for a variety of reasons,

including conversing, socializing, dining, and studying (Lee et al.,2018). The

coffee shop industry continued to grow due to its function as a "place

provider” (Starbucks, 2016; Statista, 2017).

Service Quality

Service quality is a measure of how well a service meets the

expectations of the customers. According to the definition, quality could be

accomplished by satisfying customers' requirements and requests and

delivering messages accurately to match their expectations. There are two

expected and perceived service quality which are the two key factors that

influence service quality. If the perceived service is equivalent to the actual

service, the quality is considered significantly positive. When the perceived

service exceeds the intended service, the service is considered to be of the

highest quality. If, on the other hand, the planned service quality is higher
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than the perceived service quality, the perceived service quality is thought

to be bad or poor (Hadiyati, 2014).

Quality has been defined as the suitability for use or the amount to

which it can match the expectations of customers or serve their needs.

According to Nikhashemi et al. (2013), The perceived level of service quality

influences customer satisfaction in a positive way. Similar to how better

perceived quality generates more loyalty.

The study of Chun and Nyam-Ochir (2020) describe service

establishment's success as service quality, which assesses how well a

service meets the customer's expectations. Service quality is the one of the

primary characteristic of businesses that can be monitored and enhanced

over time. When the coffee shop and customer engage directly, the

customer's perception of the service is just as important as the actual

service. In other words, customers' comparison of their service expectations

with their perceptions of the service's delivery led to this conclusion. As a

result, customers' perceptions of the quality of the service may be influenced

by employees' attitudes and behaviors. (Chun & Nyam-Ochir, 2020).

The SERVQUAL model, which was conceptualized by various

researchers, was the most widely used model for measuring service quality

by Chun and Nyam-Ochir (2020). Furthermore, the SERVQUAL paradigm

determined the gap between the customers’ expectations and the actual
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perceived performance of the service. Thus, according to this paradigm

proposed by Parasuraman, service quality was "the discrepancy between

customers' perception of service offered by a particular firm and their

expectations about firms offering such services." This model is a multiple-

item scale formulated in two statements (expectation and perception)

composed of 22 items across the five service quality dimensions. Thus, the

SERVQUAL model has 44 statements, half of which examine the model's

expectations and the other half the model's perceived performance (Ahmed,

2018).

The SERVQUAL model measures five service dimensions, according

to Javed (2020); precisely, it measures reliability, assurance, tangibles,

empathy, and responsiveness.

Reliability is the capacity to consistently and precisely provide the

promised service. This dimension emphasizes that the

service establishment area assures value, delivery, service arrangements,

and problem solutions. The customer must cooperate with service

establishments or business sectors that fulfill their commitments, especially

those related to administrative results and center support properties.

Customers appreciate and expect constant quality, as any business would

demonstrate.
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Assurance was the employees' knowledge and courtesy, as well as

their ability to instill confidence and security. This means that any business

or market requires a solid ability to instill reasonable certainty and trust in

customers. Furthermore, increased profitability results from customer trust

in industries, markets, services and products. As a result, in order to

increase its advantages and win over more customers, each business or

service establishments must be aware of this problem.

Tangibles are the physical look of buildings, equipment, and workers.

Tangibility was a critical point because there was a significant connection

between the customer and the issue of tangibility, in which providing

physical services encourages customers to pay attention to the quality of the

services they get by matching the actual costs involved. It was the physical,

hardware, staff, and correspondence items that were present.

Empathy was the individual customer care and attention. Trust and

confidence with attention are two crucial components of this dimension. This

indicates that the customer's attention is focused on empathy, which

encourages them to believe that the industry or businesses organization is

ideal for gaining their strong loyalty through the issue of trust. In other words,

Customers seek high-quality products, and businesses have a responsibility

to put customers at comfort by earning their trust and loyalty.

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Responsiveness is the ability to help clients and provide quick service.

Another important factor influencing the customer is responsiveness, which

refers to the effectiveness of offering speedy service to consumers while

supporting and assisting them. Responding swiftly can help businesses

attract customers by addressing their demands, inquiries, and other issues;

all of these factors will improve the relationship between customers and the

coffee shops itself (Ali et al., 2021).

Customer Satisfaction

Customer satisfaction is characterized as a customer's total reaction

to their level of satisfaction (Fasi, 2016). Customer satisfaction, on the other

hand, can be described as the overall level of fulfillment of a customer's

expectation (Gilbert & Chodzaza, 2013). Customer satisfaction is defined as

the achievement of client expectations for goods and services. To put it

another way, customers are pleased if the expected performance lives up to

their expectations. However, if it fulfills their expectations, the customer will

be pleased (Selvarajah, 2018).

When a customer is delighted, they are more likely to buy from the

same brand or company again in the future, and customer satisfaction

increases brand loyalty. Customers will establish a long-term relationship

with a firm and will repurchase goods if they are delighted and satisfied after

using the product and availing the services. For example, customers who try
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a brand once and are happy with it will buy more of its items and avail

services in the future. (Selvarajah, 2018).

The study by Khan et al. (2013) believes that customer satisfaction is

a crucial element of advertising and has a big influence on the market.

Customer satisfaction is vital for every business since satisfied consumers

will promote it and give it a strong competitive advantage. Customer

satisfaction refers to an individual's total reaction to a product or service

based on perception, appraisal, and psychological reaction.

According to Sabir et al. (2014), customer satisfaction has become

the most crucial factor in the world of business because satisfied customers

have a substantial impact on business profitability. Moreover, customer

satisfaction is the most important indication of a company's success and

long-term commitment (Hanaysha, 2016).

Customer Loyalty

In the study of Tarigan et al. (2020) believes that customer loyalty is

a strong commitment from customers to purchase preferred service

and items in the future, despite a variety of situational limitations and

marketing activity that may cause consumer behavior to vary. Customers

who make multiple purchases are regarded as loyal. Loyal customers will

benefit from their business since they are a loyal and satisfied customer.
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Loyalty is defined as the purchase made by continual decision-making that

has endured for a long period (Darwin, 2014).

According to Singh (2017) believes that customer loyalty occurs

when a customer makes repeated purchases of a product or service and

has a favorable opinion about the business 's products and services.

Customer loyalty is the primary aim of a strategic marketing plan since it has

various advantages for organizations. To begin with, maintaining current

customers is far less expensive than finding new customers (Posch et al.,

2015). Furthermore, loyal customers are more inclined than non-loyal

customers to speak favourably about prior service experiences, resulting in

positive word-of-mouth advertising for the business (Koseoglu et al.,2022).

Brand Loyalty

Brand loyalty is important in the corporate world. Most definitions of

customer brand equity include brand loyalty as a key characteristic.

(Veloutsou et al., 2013)

The idea of brand loyalty has been acknowledged as an essential

element in business literature. Also, the majority of researchers agree that

brand loyalty may lead to business benefits such as fewer marketing

expenditures, positive word of mouth, higher profitability, increased market

share, and a competitive edge in the marketplace. (Maheshwari et al., 2014).

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These perks indicate the beneficial influence that brand loyalty can

have on a business, and as a result, Khan and Mahmood (2012) presented

a definition that appropriately reflected these benefits, suggesting that brand

loyalty is defined as a customer's unconditional commitment to a brand and

a strong relationship with the brand that is unlikely to be changed under

normal circumstances.

The ultimate goal of the marketing process should be to retain existing

customers, obtain new ones, convert them to loyal customers, and maintain

and grow this relationship. Furthermore, brand loyalty is a strongly held

intention to buy or patronize a preferred product/service/brand in the future,

resulting in repetitive same-brand or same-brand set purchases,

notwithstanding the possibility of situational factors and marketing efforts

causing switching behavior (Tabaku & Kushi, 2013).

Factors Affecting the Customer Satisfaction and Brand Loyalty

Shop Atmosphere. According to Das (2014), Shop atmosphere is the

process of pulling customers in and capturing their attention while using

significant visual, behavioral, and emotional influences on purchase. The

built environment is employed by businesses as part of their marketing

strategy to represent the company's values, mission, and guiding principle.

The environment's usage to create the ambiance of a store includes

elements like color, music, lighting, and cleanliness.

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In the study by Chow et al. (2013) found that people are eating out

significantly more these days. As a result of long-term eating experiences,

customers' expectations of quality standards toward businesses have risen.

In addition, customers place more value on saving time and having a

pleasant eating atmosphere. These factors drive business owners and

managers to invest in design and create a more friendly place for customers

(Chow et al., 2013). Additionally, an establishment's physical layout and

design have an impact on a customer's choice to buy anything. Customers

will develop an impression of the shop as a result of the shop's design, which

will result in various behaviors (Wood, 2020).

According to literature written by Levy, Weitz, and Grewal (2019), a

shop's layout should be planned with customers: once a customer enters

the store, they should be able to find what they're looking for right away. The

creation of a pleasurable shopping experience that will boost brand loyalty,

boost sales volume, and maintain or reduce expenses is one of the primary

objectives of shop design. A well-designed shop, according to Wood (2020),

A well-designed store should have a well-thought-out sales floor with

enough room, appealing exhibitions, and lovely signage and decorations.

The importance of store signage in communicating business goals and

marketing strategy cannot be underestimated (Wood, 2020). Customers

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should be able to see visible communication (signage) guiding them through

the shop within seconds of entering. (Niazi et al., 2015).

Product Quality. The definition of product quality by Trentin et al. (2012)

is a product's capacity to carry out its intended purpose; it includes products

with general durability, dependability, accuracy, ease of operational repair,

and other desired qualities. The capacity of a product to serve its intended

purpose is referred to as product quality. Furthermore, according to Khoironi

et al. (2018) believe that Product quality refers to a characteristic of a service

or product that influences its capacity to satisfy explicit or implicit customer

expectations. A quality product or service is one that enables it to satisfy

customers' demands.

Price. As cited in Cristo, Saerang & Worang (2017) define price as a

monetary value that may be used to acquire a finite quantity, weight, or other

measures of a product or service. Price is the primary consideration offered

in return for the transfer of ownership in a business transaction. Price is the

total amount that the customer exchanges for the benefit of having the

product or service.

Customer satisfaction may be influenced by a product or service's

pricing due to the resulting sense of fairness. Customers' perceptions of

unfair pricing result in undesirable results such as a lower level of revisit

intention, dissatisfaction, and unfavorable word of mouth. Customers are

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likely to expect great quality if the price is high; otherwise, they may feel

"ripped off," and if the price is low, customers may doubt the restaurant's

capacity to supply product and service quality. Due to the intense

competition in the service businesses, customers may also establish

internal reference prices. When determining restaurant pricing, an internal

reference price is a price in the customer's mind that serves as a foundation

for examining or contrasting actual costs (Chun & Nyam-Ochir, 2020).

In the study of Malik et al. (2012), Customer satisfaction is directly

determined by price perception, and it is indirectly influenced by price

fairness perception. The study's findings also show that customers'

perceived price fairness is negatively influenced by their vulnerability, which

is triggered by a perceived demand-supply relationship and the requirement

from the customer's perspective.

When a customer purchases a product or service, he or she must pay

the price, which is the customer's financial cost. The essential factor that

influences a customer's decision to purchase goods and services is price.

The perceived price plays an important part in determining whom to choose

for service. Every customer has unique requirements and desires, and this

influences how much they are willing to spend on goods and services. As a

result, each customer's pricing perceptions differ for the same items and
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services, and customers who perceive high prices may be limited in their

purchase options (Malik et al., 2012).

Revisit Intention. The study by Chow et al. (2013) defined revisit

intention as the willingness to promote and share positive feedback about a

service provider, as well as behaviors that reflect repurchase intention.

Customers have their own reasons for revisiting a coffee shop in the

future, including such pressure from life or work, and they are looking for

quality, value, and a pleasant atmosphere that can help them relax or be

temporarily free of tension, according to the statement (Chow et al., 2013).

If a customer has a pleasant and memorable experience, they will

develop positive purchase intentions, such as recommending the coffee

shop to others, conveying a positive brand image, or becoming devoted

customers, which will eventually result in revisiting intentions (Chow et al.,

2013).

The primary goal of customer behavior research is to anticipate and

explain human behavior. Customer needs vary and emerge on a regular

basis, as do different perspectives. A revisit is intended to "promote visitors

to return to a comparable place for fulfilling experiences and to suggest the

business to others to develop loyalty." (Chien, 2017).

Revisit intention has been examined in various studies relating to food

and beverage, primarily in restaurants, with the conclusion that it is critical

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for the income of the restaurant (Majid et al., 2016; Namin, 2017; Pham et

al., 2016).

Customers' intentions to return to a business may be reflected by their

level of satisfaction, thus a fast-food restaurant's marketing strategy has to

take this into account (Mokhtar et al., 2018).

Relationship between Service Quality and Customer Satisfaction

Previous literature has frequently mentioned the relationships

between service quality and customer satisfaction (Ali & Raza, 2015).

According to Kuo et al. (2013), businesses regularly enhance the quality of

their services in an effort to satisfy customers. In a wide range of businesses,

maintaining high service quality has become a trend, and the market is

quickly heading toward a situation where customers need greater quality,

both in terms of services and products, in order to be satisfied (Hertzberg et

al., 2020).

According to the literature, Khan and Fasih (2014) believe that using

all five SERVQUAL variables increases customer satisfaction. Also,

customers consider service quality and promptness to be two essential

factors in their satisfaction.

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Relationship between Customer Satisfaction and Brand Loyalty

Customer satisfaction has been shown to increase brand loyalty

(Foroudi, 2019). According to the literature, customer satisfaction and brand

loyalty are closely related.

Hussain et al. (2015) found that loyal customers are more inclined to

recommend the brand and buy new products and avail services from it,

which is advantageous for the business.

Although loyal consumers may only sometimes be pleased, satisfied

customers are more likely to remain loyal to the brand (Wielgos et al., 2021).

Relationship between Service Quality and Brand Loyalty

Allan (2016) believes that Customer satisfaction acts as a bridge

between high service quality and brand loyalty, whereas service quality has

a beneficial effect on brand loyalty.

According to Allan (2016), in order to have a positive impact on

customer satisfaction and, as a result, brand loyalty, the five SERVQUAL

components must be partially fulfilled. As a result, having satisfied

customers leads to brand loyalty. This is confirmed by Kuo et al. (2013), who

found a relationship between service quality and brand loyalty through

customer satisfaction as a mediator or as a "go-between."

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Related Studies

A study by Lee and Kim (2021) entitled “A Study on the Impact of

Coffee Service Quality on Customer Satisfaction and Loyalty." This study's

goal was to find out how the quality of the coffee service affected customer

satisfaction and loyalty.

The survey had 120 responses in total. The preceding was the basic

statistics survey. All of the respondents are university students enrolled in a

service-oriented department.

The findings support the following hypotheses: (H1-1) interaction

influences positive emotions; (H1-2) physical environment influences

positive emotions was rejected; (H1-3) result quality influences positive

emotions; (H1-4) representativeness influences positive emotions; (H1-5)

diversity influences positive emotions was adopted; and (H2) positive

emotions influence loyalty was adopted.

The reviewed study and the current study were similar in that they

both examined the service quality of coffee shops. However, the present

study examined brand loyalty among coffee shops, but the previous study

examined customer loyalty. The respondents of the reviewed study were

students, while the respondents of the present study were customers.

In the study of Purwadi et al. (2020) entitled “Store Atmosphere,

SERVQUAL, and Consumer Loyalty: Case Study of Excelso Coffee Shop."

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Making businesspeople to continue to assess the marketing strategy used

and understanding customer behavior, particularly of coffee

shop's customers, which was crucial in the face of competitors. The purpose

of this research was to show the relationship between Store Atmosphere,

SERVQUAL, and Consumer Loyalty in Excelso (Big Mall, Samarinda City).

The research used online surveys (instrumental social networking

sites). Purposive sampling was used to choose the participants for this

study. A total of 98 people took part.

The research found that the store atmosphere variable had a strong

positive effect on SERVQUAL and SERVQUAL consumer loyalty.

Meanwhile, there was a positive-insignificant relationship between Store

Atmosphere and SERVQUAL variables.

Both the present study and the reviewed study were similarly focused

on service quality among coffee shops. Further, the respondents of this

reviewed study were also similar to the present study, which was the

customers. However, the previous study examined customer loyalty, but the

present study examined brand loyalty among coffee shops.

A study by Duman (2020) entitled “Effects of Coffee Shops’ Food

Quality and Ambience Quality on Customer Satisfaction and Loyalty in

Batman, Turkey." The primary objective of the study was to determine the

effects of food, service, and ambience quality on customer satisfaction and

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loyalty at a chain coffee shop. A questionnaire survey was utilized to collect

data from customers of a chain coffee shop in Batman, Turkey.

The study's sample, which was limited to respondents who visited a

certain brand of coffee shop, represented the general population by

including people ages 18 and above. The sampling method also helped the

study save money and time. This sampling method also produced a

homogeneous sample since coffee shop customers have similar interests.

As coffee shop's customers were more concerned with their

satisfaction, the study found that food quality, service quality, and ambience

quality all had a significant and positive influence on customer loyalty.

Owners and managers of coffee shops should be on the lookout for methods

to satisfy their customers in order to maintain their business in the industry.

The current study and the previously reviewed study both focus on

service quality in coffee shops. In addition, the respondents of the reviewed

study, who were customers, were comparable to the respondents of the

current study. Furthermore, the present study examined brand loyalty

among coffee shops, but the previous study examined customer loyalty.

Moreover, a study by Recamadas (2018) entitled “A Path Analysis of

Customer Loyalty of Homegrown Coffee Shops in the Davao Region." The

study's objective was to figure out what factors influence consumer loyalty

in locally-owned coffee shops. The relationship between marketing mix,

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customer expectation, customer experience, customer satisfaction, and

customer loyalty among homegrown coffee shops was also investigated in

this study.

Path analysis was used in the study in order to examine hypotheses

based on a proposed causal model. Data were collected from 580 local

coffee shop customers in Davao, Philippines using a set of questionnaires

as instruments. To determine the interrelationships between the marketing

mix, customer expectation, customer experience, and customer satisfaction

to customer loyalty, Pearson product-moment correlation was utilized. The

major predictor of customer loyalty was determined using multiple linear

regression. Path analysis, stepwise regression, mean, and standard

deviation were used as statistical techniques. The path relationships

between the variables were investigated using path analysis.

The study found that the degree of the marketing mix, customer

expectation, customer experience, customer satisfaction, and customer

loyalty as perceived by customers of homegrown coffee shops was all high.

This indicates that customer happiness and loyalty are strong in Davao

Region's local coffee cafes. Furthermore, Customer expectations, customer

experience, and customer satisfaction were all substantially correlated with

customer loyalty. This implies that the impact of the marketing mix, customer
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expectations, customer experience, and customer satisfaction on customer

loyalty is direct.

The reviewed study was closely similar to the present study in a way

that both of them determined customer satisfaction among coffee shops.

Moreover, both studies determined the perceptions and expectations of the

respondents. The differences were that the reviewed study examined

customer expectation and customer loyalty while the present study

examined customer satisfaction and brand loyalty on service quality. Also,

the respondents of both the reviewed study and the present study were the

same, specifically, the customers.

According to a study by Annamdevula and Bellamkonda (2016),

entitled "Effect of student perceived service quality on student satisfaction,

loyalty and motivation in Indian Universities: development of HiEduQual.

Journal of Modeling in Management”, higher education in developing

countries has serious quality issues. It is necessary to invest in quality

systems and improvement tools to change this scenario. One of these

alternatives is the SERVQUAL scale. It is utilized to determine the

discrepancy between service perceptions and quality requirements,

enabling for the development of action plans. The paper's goal is to suggest

a SERVQUAL scale adaption for the higher education service sector, and to

describe the key findings of its application to students in the production

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engineering program at So Paulo State University (UNESP) in Brazil.

Twenty-eight questionnaires were used to gauge expectations among

graduating students, while thirty-eight were used to gauge perceptions

among incoming students.

The cited study was closely similar to the present study in a way that

both of the studies used the SERVQUAL model to measure the gap between

quality expectations and perceptions of services. The main differences

between both studies were the respondents. Students were the respondents

of the cited study, while the respondents of the present study were

customers.

In the study of Morales et al. (2016) entitled "Service Quality Gaps in

the Registrar office, Cash Section and Accounts Office of the Divine Word

College of Laoag." Through the service quality gaps, the study determined

and analyzed the expectations and perceptions of students and the service

implementers in the Registrar's Office, Cash Section, and Accounts Office.

The analysis was conducted in conjunction with the five SERVQUAL

dimensions, namely tangibles, reliability, responsiveness, assurance, and

empathy.

The survey had 333 responses in total. The respondents were the

college students’ enrollees of DWCL College for the First Semester School
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Year 2016-2017. Slovin’s formula was used for the personnel of the different

offices in DWCL, with 324 students and 9 personnel respondents.

The study found that the perception of the students with regard to the

five SERVQUAL dimensions, assurance, and reliability was the highest,

whereas tangibles revealed the lowest. Student's expectations, on the other

hand, tangibles were the highest, whereas both assurance and empathy

were revealed to be the lowest. In addition, the study found that the

perception of the implementers-respondents with regards to the five

SERVQUAL, empathy was the highest, whereas tangibles were revealed to

be the lowest. Regarding the expectations of the implementers-

respondents, reliability was the highest, whereas tangibles were revealed to

be the lowest.

Both the present study and the reviewed study were similarly focused

on the service quality gaps. Moreover, both used the SERVQUAL model in

order to determine the perceptions and expectations of the respondents.

However, the differences between both studies are the respondents.

Customers were the respondents of the present study, while the

respondents of the reviewed study were the students and the personnel.

Meanwhile, a study by Shin et al. (2015) entitled “The Impact of

Korean Franchise Coffee Shop Service Quality and Atmosphere on

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Customer Satisfaction and Loyalty." The study's objectives were to be

examined franchise coffee shop service quality characteristics. One of the

service quality criteria in the suggested study was shop atmosphere. The

study wants to see how the quality of franchise coffee service and the

shop atmosphere affect consumer satisfaction and loyalty.

Data were obtained from 482 Korean coffee shop franchisees and

evaluated using a software package for frequency analysis,

reliability/validity tests, correlation analysis, and regression analysis.

This finding of the study shows that taste was the most influential

factor in service quality. The conclusion here was that most of the coffee

shop customers were very familiar with the coffee taste, and this

influenced their loyalty.

The reviewed study was similar to the present study because both

focused on customer satisfaction, and both determined service quality as

a driver in customer satisfaction. The differences were evident in the

following: the cited study determines customer loyalty, while the present

study aims to examine brand loyalty among coffee shops. Further, the

cited study was more focused on the franchising business, which was not

investigated in the present study. They also differ in terms of the subjects

of the study; the respondents of the cited study were coffee shop

franchisees, while the present study was only the customers of coffee
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shops.

Also, a study by Susanty and Kenny (2015) entitled “The Relationship

between Brand Equity, Customer Satisfaction, and Brand Loyalty on Coffee

Shop: Study of Excelso and Starbucks." Through hypothesis testing, this

study aims to find an explanation for the relationship between the variables

of customer-based brand equity, customer satisfaction, and brand loyalty.

The findings of this study revealed that physical quality, ideal self-

congruence, and lifestyle congruence all have a favorable and significant

impact on Excelso and Starbucks customer satisfaction. In Excelso, only

staff behavior has a positive and substantial impact on customer

satisfaction; in Starbucks, only brand recognition has a positive and

significant impact on customer satisfaction. Customer satisfaction, on the

other hand, has a favorable and considerable impact on brand loyalty in both

coffee shop brands.

The reviewed study was parallel with the present study, wherein both

determined the relationship between customer satisfaction and brand

loyalty. Their differences are the following: the cited study examined the

customer-based brand equity upon customer satisfaction depends on the

brand, while the present study examined customer satisfaction and brand

loyalty among coffee shops. The limitation of the cited study was only two

brands of coffee shops; however, the present study has a wider scope as to
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the population wherein the coffee shops located in the Cities of Ilocos Norte,

specifically Laoag City and the City of Batac.

Furthermore, a study by Barlan (2013) entitled “Status of Coffee Shop

Business in Batangas City: Basis for Business Operation Initiatives." This

study's goals were to assess the status of the coffee shop business in

Batangas City as a foundation for business operations initiatives, to profile

the coffee shop business in Batangas City with respect to business-related

variables and socio-demographic variables, to evaluate the status of the

coffee shop business with respect to promotional strategies and problems

encountered, and to assess the level of satisfaction of the coffee shop

business.

Starbucks, Pan Y Vino Delicatessen, Kopi Roti, Ponte Fino Bar and

Café, El Calicanto café bar and restaurant, and Café Abuelita in Gulod were

among the well-known coffee shops in Batangas City. The study's

respondents were chosen by convenient sampling and purposively for the

four managers, 12 employees, and 100 customers of three coffee shops:

Starbucks Coffee, Pan Y Vino Delicatessen, and Kopi Roti. A survey

questionnaire was used to gather data.

According to the findings, coffee shops in Batangas City have been

open for more than three years. When it comes to hiring, coffee shop owners

favor college or associate graduate students between the ages of 21 and

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23. As long as they pass the process, both male and female applicants are

accepted. The lack of skilled personnel was not an issue because they must

complete training before being allowed to participate in the operation. Late

arrivals and those who do not show up should be taken into account because

managers are more concerned with those who are present. During the

operation, employees encountered insufficient payroll and duplication of

work.

The reviewed study determined the level of customer satisfaction of

the respondent, which was also the concern of the present study. The cited

study, however, was more comprehensive than the present study because

it included the direct and indirect effects of lifestyle and menu variety on

customer satisfaction among coffee shops which were not part of the

present study. Further, the respondents of the reviewed study were

managers, employees, and customers, while the respondents of the present

study were only customers.

Moreover, the study by De Vera (2012) entitled "Strategies to Address

the Service Quality Gaps in Quick Service Restaurants in the Province of

Ilocos Norte, Philippines" observed the shortcomings in the service quality

of the QSRs in the Province of Ilocos Norte. Five hundred eighty-four (584)

QSR patrons and seventy-three (73) QSRs were involved. A questionnaire

that was given to the managers and patrons of the QSRs and which was
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derived from the SERVQUAL instrument created by Christopher Lovelock

(2008) was the main method used to collect data. The test encompassed

the reliability, responsiveness, assurance, and empathy components of

service quality. The weighted mean, ranking, and t-test of significance for

paired means were used to examine the collected data.

According to the findings, managers expect responsiveness to be the

most important dimension, while tangible is the least important. The

perceptions of quick service restaurant managers along the five service

quality (SERVQUAL) dimensions were highly favorable. The dimension with

the highest rating was assurance, while the dimension with the lowest rating

was tangibles, which corresponded to their expectations. Customers had

very high expectations across all five service quality dimensions. The

assurance dimension received the highest rating, while the reliability

dimension received the lowest rating. According to the study's findings, most

managers' perceptions of service quality exceeded their expectations; most

customers' expectations for service quality are being met to the fullest extent

by QSRs, and there is a significant difference between the outcomes of the

service quality gap on the sides of the managers and the customers.

The reviewed study was parallel with the present study, wherein both

determined the service quality gaps of restaurants in the Province of Ilocos

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Norte. Also, the reviewed study involved customers as their respondents,

which was also the same as the present study. Further, both the study

gathered the data through questionnaires that were adopted from the

SERVQUAL model.

The literature and related studies discussed and presented in the

chapter enlightened the researcher about the concepts of customer

satisfaction, brand loyalty, shop atmosphere, revisit intention, taste factor,

price, service quality, and coffee shop. Furthermore, the research articles

presented in this chapter guided the researcher regarding the variables and

sub-variables studied, the procedures utilized in research instruments in

particular, and finally, in data processing and interpretation.