business research methods marketing luxury services beyond affluence in the new normal insights from fine dining during the coronavirus pandemic

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<b>TON DUC THANG UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION </b>

<b>BUSINESS RESEARCH METHODS</b>

<b>Marketing luxury services beyond affluence in the new normal: Insights fromfine dining during the coronavirus pandemic</b>

Lecturer: TRAN THI VAN TRANGGroup 01

1. Nguyễn Phú Thịnh - 719k02252. Lý Khởi Kha - 719v01533. Ngô Minh Thiện - 719v01864. Hoàng Thân Bảo Phúc - 719k

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<b>Chapter 1. Introduction</b>

<b>1.1 Introduction</b>

Fine dining has become a sought-after luxury for people from diverse backgrounds. Unlike casual dining, where patrons relish moderately-priced meals in a relaxed ambiance, fine dining establishments present exquisite and distinctive menus within an upscale setting. Customers willingly pay a premium for this elevated experience (Hwang and Ok, 2013; Tang et al., 2019). In the realm of fine dining, restaurants follow a high-price consumption model. Their aim is to encourage consumers to willingly pay a premium for the experience. To achieve this, upscale restaurants must focus on two critical aspects (Sheng-Hsun Hsu, Cheng-Fu Hsiao, 2018). The first aspect is High Utility, this element is shown effectively when fine dining restaurants provide exceptional value and utility to their patrons. This could be through exquisite food quality, impeccable service, and an overall delightful dining experience. This factor is clearly shown through the TouchBistro 2022 Diner Trends Report with 2,600 diners, 68%of respondents emphasized that food quality is the paramount factor influencing their dining choices. Followed by 66% of diners consider the restaurant’s location, while 64% prioritize excellent customer service. Additionally, 62% take the cost of dining into account (Patricia Cobe, 2022). The next factor that affects the decision of the customer is their specific needs, to meet the customer needs the restaurants must have the

understanding and catering to highly specific needs is essential. Whether it’s a special occasion, a desire for unique flavors, or a preference for family dining, fine dining restaurants should tailor their offerings accordingly.

<b>1.2 Problem statement</b>

This research helps analyze many different aspects of the fine dining market after the pandemic. First of all, this research aims to change the luxury landscape, because the luxury market is no longer exclusive to the affluent elite. The rise of mass prestige has made luxury accessible to a broader audience. On the other hand, this study has shown the unprecedented COVID-19 pandemic has significantly affected consumer behavior and expectations. Investigating how fine dining services adapt during and after the pandemic is crucial. The research explores the factors influencing customer satisfaction with fine dining. Key aspects include food quality, hygiene and price. Moreover, this report illustrates customer satisfaction directly influences their likelihood to recommend afine-dining restaurant to others. Understanding these dynamics is essential for post-pandemic strategies as the future recommendations. In a nutshell, this study illuminates strategies for fine dining establishments to flourish in the post-pandemic era, taking into account both opulence and safety considerations.

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<b>Chapter 2. Literature review</b>

<b>2.1 Theoretical</b>

<b>2.1.1 Consumer purchasing decision:</b>

The consumer purchasing decision involves five stages. The first stage is recognizing needs; the purchasing process begins when consumers recognize their demands. After evaluating their personal needs, consumers will go to Phase 2, which is to begin learning about the product. Stage 3 is to evaluate alternatives. Once the consumer has enough information on the product, he or she will consider and compare other sources of supply in order to select the best service or product. The following step is the purchase decision. At this stage, customers have formed a preference for the brand in the choice group and intend to buy the brand they like the most. The final stage is post-purchase, in which customers evaluate their level of happiness with their purchase.(Kim Ngoc, 2022)The previous study by Weng Marc Lim, Arun Aggarwal and Ravi Dandotiya (2022) was conducted with the aim of finding out the reasons for customer satisfaction with high-endcuisine through research variables, especially focusing on two post-purchase behavior, namely customer satisfaction and word-of-mouth recommendation. The study is informedby the cognitive dissonance theory (Festinger, 1957) and the stimulus-organism-response (SOR) model (Mehrabian and Russell, 1974). In this research article, we want to use the above method to apply in Vietnam after the covid pandemic.

<b>2.1.2 Cognitive dissonance theory</b>

Psychologist Leon Festinger (1957) has proposed a theory of cognitive dissonance, focusing on how people strive to achieve internal unity in their minds. He believes that within each person there is a need to ensure that their beliefs and behaviors are consistent with each other. Inconsistent or conflicting beliefs make us feel extremely uncomfortable,so everyone tries to avoid this situation. Festinger says in A Theory of Cognitive Dissonance that cognitive dissonance can be understood as an antecedent condition that leads to activity aimed at reducing discord. For example, hunger causes people to find food to lessen hunger.

Pre-Purchase cognitive dissonance can impact customers' purchasing decisions. This stateof worry may cause consumers to suffer from an information overload that causes the

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intention not to buy the product at that time and to decide to look later at the available options.(Menasco and Hawkins, 1978). As a result, dissonance encountered throughout the product and service selection process may cause the buyer to abandon the transaction (Hasan, 2012). In contrast, the lack of dissonance ensures that consumers feel peaceful and comfortable, which might strengthen their purchasing decisions. Furthermore, buyerswho are hesitant and skeptical will be unlikely to pay a greater price for items. In reality, the shopping experience has a significant impact on consumers' willingness to pay more for items and services (Guoxin Li, Guofeng Li and Zephaniah Kambele, 2012).Post-purchase behavior exemplifies the psychology of cognitive dissonance, with word-of-mouth being a common behavior used by customers to explain their actions and minimize cognitive dissonance. This raises awareness and emphasizes the necessity of recognising and nurturing client happiness (Lindberg-Repo, 2001).

<b>2.1.3 Stimulus-organism-response (SOR) model</b>

Woodworth (1929) proposed the stimulus-organism model (S-O-R) as an expansion of Pavlov's original stimulus-response paradigm. The S-O-R model is composed of three constructs: stimulus, organism, and reaction which decide the behavioral outcome of an event. (Skinner, 1935) introduced the notion of stimulus and reaction as "parts of behavior and environment" and rapid changes in the environment can alter an individual'spsychological and emotional stability, which further drives the behavioral changes. The stimulus-organism-response (SOR) model is also regularly used by previous scholars to theorize the impacts of environmental variables in the hospitality sector on customer internal appraisal and subsequent behavior. Since the focus of the key paper is solely on the customers' emotional state of satisfaction (O), which is a macro affective evaluation of performance and expectations (Hume and Mort, 2010; Majdalani and Maamari, 2016).Its determinants include food quality (sensory experience, satiety value, and menu selection), price, and hygiene as components of the fine-dining environment that they assess (S), as well as its outcomes in terms of word-of-mouth recommendations of the fine-dining restaurant (R), this research article will apply the above method to see if the results change in Vietnam.

<b>2.2 The concept2.2.1 Food quality</b>

Food quality is typically defined as the total of all the features and attributes of a food item that the client finds acceptable. Food quality qualities include appearance, texture,

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flavors, nutritional value, ethical and sustainable manufacturing. According to Sulek and Hensley (2004), the most significant aspect of any restaurant experience is the food. Peri (2006) asserts that maintaining consumer loyalty to food service establishments and meeting the demands and expectations of patrons will only be possible with high-quality meals.

<b>2.2.2 Sensory experience</b>

According to Korsmeyer and Sutton (2011), sensory experience is the perception or awareness of stimuli using the human senses. The five senses are sight, hearing, touch, taste, and smell. Sensory experiences occur when sensory organs (such as the eyes, hearing, skin, taste buds, and nose) detect external stimuli and send information to the brain for interpretation. And in the context of the restaurant field, this is when the customers assess their sensory encounter at restaurants based on factors such as the visualappeal of the food, its aroma, flavor, and texture (Andersen and Hyldig, 2015).

<b>2.2.3 Satiety value</b>

Satiety refers to the feeling of fullness or satisfaction that a customer experiences after consuming a meal. It is a subjective perception of having had enough to eat, leading to a reduction in the desire or motivation to continue eating. (de Graaf, 2011) It is influenced .

by a combination of sensory, cognitive, and physiological signals that respond to the ingestion of food (Blundell et al., 2010).

<b>2.2.4 Menu selection2.3 Previous research</b>

<b>Introduction: The authors introduce the concept of luxury and its evolution, as </b>

well as the gap in the literature on luxury services, especially fine dining. They propose a study to investigate the antecedents and consequences of customer satisfaction with fine dining during the COVID-19 pandemic, using the cognitive dissonance theory and the stimulus-organism-response model as the theoretical foundation

<b>Research gap: The paper addresses the lack of studies on luxury services such as </b>

fine dining, especially in the context of the pandemic and the rise of mass prestige (masstige) marketing.

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stimulus-organism-response (SOR) model to explain the effects of food quality, hygiene, and price on customer satisfaction and word-of-mouth recommendation.

<b>Methodology: The paper adopts a Delphi methodology to develop and refine a </b>

questionnaire consisting of 28 items, and then conducts a survey of 693 customers of fine-dining restaurants to test the hypotheses using structural equation modeling.

<b>Data collection and analysis: The authors used a questionnaire to collect data </b>

from 693 customers of fine-dining restaurants in India. They performed exploratory and confirmatory factor analyses to test the measurement model, and covariance structural equation modeling to test the structural model. They also conducted preliminary and post-hoc analyses to check the data quality and the robustness of the finding. (Page 7 - Line 34)

<b>Profile of participants: The authors presented the demographic and behavioral </b>

characteristics of the participants, such as age, gender, ethnicity, income, dining companion, occupation, visit frequency, meal period, and region.

<b>Measurement model evaluation: The authors reported the results of the </b>

exploratory and confirmatory factor analyses, which supported the validity and reliability of the seven factors in the study: sensory experience, satiety value, menu selection, hygiene, price, customer satisfaction, and word-of-mouth recommendation.

<b>Structural model evaluation: The authors reported the results of the structural </b>

model, which showed that customer satisfaction was positively influenced by all the five

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predictors, and that customer satisfaction positively influenced word-of-mouth recommendation. The authors also tested the mediation role of customer satisfaction and found that it fully mediated the relationship between menu selection and word-of-mouth recommendation, partially mediated the relationships between hygiene and price and word-of-mouth recommendation, and indirectly mediated the relationships between sensory experience and satiety value and word-of-mouth recommendation. (Page 11 - Line 76, Page 10 - Line 34)

<b>Research contributions: The study contributes to the literature on luxury </b>

services, masstige marketing, and customer behavior in the new normal. It also develops and tests a new theory called the stimulus-organism-response model of customer behavior towards fine dining. (Page 13 - Line 223)

<b>Managerial implications: The study provides insights for brand owners and </b>

managers of luxury services such as fine dining on how to market and deliver them to themass society in the new normal. (Page 2 - Line 68)

<b>Research limitations: The study is limited by its focus on fine dining as the only </b>

context of masstige luxury services, its temporal scope during the pandemic, its geographical scope in two cities in India, and its exclusion of technological factors in the marketplace.

<b>Future research directions: The study suggests future research to explore other </b>

forms of masstige luxury services, to compare customer behavior before, during, and after the pandemic, to extend the study to other cities and countries, and to consider the role of technology in customer behavior and marketing strategies.

<b>Masstige theory and marketing - The authors review the literature on masstige, </b>

which is a strategy of offering high-quality products or services at affordable prices to mass consumers.

<b>Masstige model and measure - The authors propose a masstige model that </b>

consists of four dimensions: perceived quality, perceived prestige, perceived value, and perceived uniqueness. They also develop a masstige measure that can be used to assess the masstige level of a brand or product.

<b>Masstige applications in hospitality - The authors apply the masstige model and </b>

measure to the context of fine dining restaurants, and examine how masstige influences customer satisfaction, loyalty, and word-of-mouth.

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The quality of the food at the fine-dining restaurant has a beneficial impact on client satisfaction with the eating experience. According to some reviews of the literature, food quality is a wide-ranging factor that focuses on presentation, menu variety, healthy options (Chiciudean et al., 2019), taste (Velasco et al., 2018), freshness (Lennernas et al., 1997; Cardello and Schutz, 2003), and temperature (Kivela et al., 1999). Given the wide range of food quality, this study used a practical approach to classifying and focusing on the three-food qualities that are most important for enjoyable eating. The three features are sensory experience, satiety value, and menu, which we hypothesized and tested using a Delphi survey.

Understanding sensory experience as a new approach helps administrators understand customers' feelings. Each customer's "sensory touch point" will gradually form different feelings and levels of satisfaction with service quality. Through the senses, each individual perceives and forms their own feelings about products and brands (Húlten et al., 2009; Krishna, 2012). Lindstrom (2006) research on service experience has demonstrated that the senses directly contribute to enhancing customer satisfaction, ultimately resulting in higher intentions for revisiting. This is why, even though Shabgou and Daryani (2014) showed that taste has the greatest impact on customer satisfaction among the five senses, experiences associated with other senses continue to significantly influence the overall customer experience. Mathe-Soulek et al. (2015) observed that among various factors influencing food quality, the temperature of food and beverages held the second position. This aligns with the findings of Rozekhi et al. (2016), who demonstrated that the taste and overall quality of restaurant food are contingent on the serving temperature, with greater customer satisfaction when the temperature is adequately maintained. The writers also suggest that the sensation of food freshness is another aspect that can elicit similar outcomes in terms of customer choice and restaurant satisfaction (Canny, 2014; Min and Lee, 2014; Rozekhi et al., 2016; Chiciudean et al., 2019). Besides, there are also factors that affect the customer experience even when they have not touched or tasted it. For example, Spangenberg et al. (2005) showed in their research that scent and music can positively influence customer experience. Cleverly combine these two elements allowing the customer to envision the delightful taste of a dish even before engaging their taste buds. Thus, we propose that:

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satisfaction of the fine-dining experience.

Satiation levels can be influenced by different factors, including the texture of food, the quality of ingredients, the serving size, and the overall post-meal comfort (Sakata and Yoshimatsu, 1995). The authors also noted that the level of satiation rises concurrently with the chewiness of the food presented to restaurant diners. While other authors discovered that eaters tend to perceive a heightened sense of satiety when food descriptions feature hearty and healthy language (Vadiveloo et al., 2013). Restaurants canenhance the dining experience by providing sufficiently sized portions that are perceived as offering good value for money. This can also be achieved through the inclusion of high-quality and fresh ingredients, combined with a well-balanced nutritional profile, promoting a more satisfying and diverse culinary experience (Chiciudean et al., 2019; Min and Lee, 2014; Josiam et al., 2017). In addition, Vermote et al. (2018) indicated that the feeling of comfort and well-being after a meal can positively influence the overall satisfaction with the restaurant experience as well. Customers are likely to remember and return to a restaurant where they consistently experience post-meal satisfaction. Thus, we propose that:

<b>H1b. </b>Satiety value at the fine-dining restaurant positively influences customer satisfaction of the fine-dining experience.

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