Change in Consumer Patronage and Willingness to Pay at Different Levels of Service Attributes in Restaurants: A Study in India

Consumer patronage and consumer willingness to pay are the two most important criteria for business development. The current study investigates the changing preferences of consumers in a developing economy with respect to three major service attributes from the restaurant industry: food quality, service, and ambiance. Results indicated that consumers give greater preference to quality over service in high-end restaurants and prefer service compared with ambiance in quick-service restaurants. Food quality was found to have strong interaction effect with two other variables. When food quality was improved from low to high, consumer preferences for ambiance and service tended to change accordingly in the same direction, but not necessarily at the same level. Thus, restaurateurs have a strategic advantage when they choose high quality food and an appropriate level of service or ambiance. Consumer expectations are significantly different for high-end, full-service restaurants and quick-service restaurants in service attributes.