Best Approach to Increase Value in a Healthcare Retail Food Service Cafeteria

Best Approach to Increase Value in a Healthcare Retail Food Service Cafeteria

Joshua A. Cranick

Capella University

Introduction

Healthcare institutions around the world are being forced implement changes to not only become more efficient but more cost-effective as well.  In Houston, hospitals are often located in areas that are surrounded by restaurants; so while in traditional cases hospital retail cafeterias have a monopoly of sorts on the food service business that is not the case in Houston.  In order to compete with this immense amount of competition in the food service market, it is imperative that healthcare retail cafeterias get the most out of every transaction.  In order to accomplish these goals, it is important that healthcare retail cafeterias are able to charge premium prices, and the only way to accomplish this without increasing costs is to increase the perceived value of the products being offered. This paper will explore various approaches to increase value in a healthcare retail cafeteria, by first defining perceived value and then examining what effects food quality, service quality, and customer satisfaction have on perceived value.

Perceived Value

Perceived value as defined by Zeithaml (1988, p.14), who defined ‘value’ as: ‘the consumer’s overall assessment of the utility of a product based on perceptions of what is received and what is given’. While perceived value may be a term that’s hard to quantify, it has been well noted in research that it can affect not only customer satisfaction but repeat business as well. Repeat business is when a customer returns to a restaurant after already visiting this restaurant previously, this type of business is essential to the long-term success of any restaurant. While many things affect perceived value, such as food quality, service quality, and customer satisfaction, the key is to see what drives value in each of those categories.

Food Quality

First and foremost, restaurants are judged on their food quality, it doesn’t matter how nice the restaurant looks or how good the service is if the food quality is poor. It is important to recognize how food quality is viewed in a restaurant; the literature has identified the following attributes most commonly used in evaluating food quality in restaurants: presentation, taste, freshness, and temperature” (Josiam, Foster, Malave, & Baldwin, 2014, p. 52).  Based this research if a healthcare retail cafeteria makes adjustments to presentation, by having executive chef offer plate presentations to all staff members to ensure proper display of products in the cafeteria. Increase freshness, by ensuring the cafeterias utilize only the freshest possible products and only order what is necessary on a daily basis. Ensure the cafeteria has a proper food safety program in place where temperatures are checked every two hours, as per city of Houston standards. Therefore, any healthcare retail cafeteria can increase the value of their food without increasing any costs. Food quality is only one piece of the puzzle in today’s competitive restaurant marketplace, having great food alone is no longer good enough to ensure repeat business oftentimes customers relate the overall dining experience to both food and service therefore in order to ensure repeat business do both.

Service Quality

        In food service the primary focus is always on food quality, but contrary to many beliefs service quality and restaurant environment are as important if not more important to overall customer retention and customer satisfaction. A recent study that focused on coffee shops which “found that factors of determinant attributes of service quality significantly influenced functional and symbolic dimensions of perceived value with the former being related with coffee quality, service, and food and beverage, whereas the latter is positively related with coffee quality, food and beverage, and extra benefits” (Po-Tsang & Hsin-Hui, 2010, p. 535).  This is a prime example of how service quality affects perceived value and how that translates into an additional added benefit to the customer.

        Service quality not only drives customer satisfaction; it ensures customer loyalty as well. The results of another recent study revealed that service quality and customer satisfaction were found significantly related with significance level to with customer's loyalty were partially correlated with dependent variable” (Rashid, Rani, Yusuf, & Shaari, 2015, p. 201). This strong relationship between service quality and customer loyalty shows how important restaurant patrons view service in terms of whether or not they will come back to a restaurant.

        The food service business has evolved to the point where both service quality and food quality equally determine whether or not customers come back. Wu, Huang, and Chou (2014) contend that restaurants can increase their competitive advantage through enhancing customers’ perceived service quality and satisfaction (p.171).  This research not only shows the connection between both service quality and customer satisfaction but how customer satisfaction drives perceived value.

Customer Satisfaction

        Customer satisfaction is the ultimate goal of any food service establishment, therefore it is important to focus on what drives customer satisfaction and how to implement those drivers in a healthcare retail cafeteria. A study concluded that food quality and service quality with the two main factors that contribute to customer satisfaction (Qin & Prybutok, 2009, p. 78). Just like with perceived value, food quality and service quality are the main drivers of customer satisfaction.

        Another major factor is the physical environment of a restaurant which not only has an effect on value but also an effect on customer loyalty as well.  Ryu, Lee, and Kim’s (2012) research is focused around the theory of an integrated model that composes of the physical environment, food, and service in a restaurant setting and when combined together can create value.  The study shows that there is a strong correlation between restaurant image and both customer satisfaction and customer perceived value, and that restaurant image is driven by the physical environment, food, and service (Ryu, Lee, & Kim, 2012, p. 200).  This research also shows that great service in combination with a positive physical environment not only increases customer satisfaction but also drives customer loyalty as well. The best approach for healthcare retail cafeteria to put this research and practice would be to ensure that the cafeteria laid out in an inviting manner, and include stations such as display cooking which would not only provide an additional service but also enhance the environment as well. Overall this research show how important service and environment are in terms of creating value in the food service industry, and how good customer service is imperative to the long term success of any food service operation.