Antecedents and consequences of fast-food restaurant customers' perception of price fairness

Abstract

Purpose: This study examines the influence of service quality dimensions (food quality, physical environment quality and employee service quality) and brand image of fast-food restaurants on price fairness and its consequence on customer retention. Design/methodology/approach: This survey collected 331 responses using the public intercept method. Data analysis involved performing confirmatory factor analysis (CFA) on the measurement model, followed by structural equation modeling. Moderation analysis was performed using SPSS (model1 in process macro), while mediation was performed using model 4 in process macro. Findings: Empirical results of this study revealed the positive effect of restaurant service quality dimensions on price fairness and price fairness on customer retention. It also revealed that brand image strengthened the restaurant service-quality/price fairness interrelationship, and that customer satisfaction partially mediated the price fairness/customer retention interrelationship. Research limitations/implications: Findings of this study are useful to marketers and fast-food restaurateurs in establishing the right combination of service quality dimensions and brand image that increase perceptions of price fairness and increase customer satisfaction and retention. Originality/value: This study contributes to advancing the theoretical foundations of customers' perceived price fairness and retention research, specifically in the understudied fast-food sector of emerging economies. It extends the application of the equity theory to expose the direct and indirect influences on customer perceived price fairness and customer retention. The findings provide a better understanding of price fairness perceptions. © 2021, Emerald Publishing Limited.