Consumer's restaurant choices: How we trade-off quality and price
Abstract
The present study aims to understand consumer restaurant choice behavior under competing options of quality and price, focusing on consumer trade-offs to predict restaurant choice. The study has three major research questions: 1) How do restaurant quality and price influence consumer choice when conflicts between quality and price are involved in decision-making? 2) Do consumers really trade quality against price when choosing to dine in a given restaurant? and 3) If consumers trade restaurant quality against price, to what extent? In addition, the study identified factors affecting consumers' propensity of using or avoiding trade-offs in restaurant decision-making. Two series of experiments were conducted with a total of 332 randomly sampled responses from online panels. A discrete choice experiment (Experiment 1) was designed to answer the first and second research questions and a matching experiment (Experiment 2) was designed for the third research question. Logistic Regression (Logit) analysis was chosen to examine influences of restaurant quality and price; discriminating decision-making strategies was used to identify the use of trade-offs in restaurant choice. The mean values for the matching questions were calculated to measure the extent of quality-price trade-offs. Results of the present study indicate that, except for the good level of service quality, variations in levels of food quality, service quality, and price significantly influenced restaurant choice. Approximately 75 percent of respondents exhibited evidence of using trade-offs in restaurant decision-making and 25 percent of respondents avoided trade-offs, while expressing a dominant preference for food quality. Results of the matching experiment provide evidence that an individual requires a relatively large price reduction for a loss in food quality and service quality, compared to price increases for comparable gain in food quality and service quality. The present study intends to help restaurant managers build effective marketing strategies to drive restaurant traffic.
Degree
M.S.
Advisors
Sydnor, Purdue University.
Subject Area
Marketing
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