“The Relationship of Customer Service and Satisfaction Levels on Small Coffee

Shops”

A Research Proposal Presented to the

Faculty of Senior High School Department

ACLC College of Mandaue

Mandaue City

In Partial Fulfillment

Of the Requirements for the

PRACTICAL RESEARCH 2

By

Jaducana, Allyssa Mae B.

SASING, JOEY
 ii

ACKNOWLEDGMENTS

As the researchers did the research paper, it takes time and effort to successfully finish
it. This is possible because of the people who truly believe in what we can do and
support us throughout the journey. We devote everything to our Almighty God for he's
good and poured us with wisdom and knowledge to effectively do this research paper.
To our family and friends who encourage and support us all the way to have a better
outcome of the study. Also, to the diligent researchers who are firm in helping and give
their full effort for the success of the group. To the respondents who have given their
honest and cooperative responses to all the questionnaires. We want to take this
opportunity to thank our research adviser Mr. Joey Sasing and other teachers who
made an effort to guide us and correct us with gentleness in everything as we do this
research. We express our gratitude to all who helped and participated in this study with
effective, meaningful, and organized with reliable research sources. Accept our endless
gratitude from the bottom of our hearts.
 TABLE OF CONTENTS

Title page i

Acknowledgments ii

Table of Contents iii

List of Tables iv

List of Figures v

CHAPTER 1: THE PROBLEM AND ITS SCOPE............................................................. 1-

11

Rationale......................................................................................................................1-2

Background of the Study..............................................................................................3-4

Theoretical Framework.........................................................................................................5

Conceptual Framework........................................................................................................6

Statement of the Problem…………………………………………………………………..7

Significance of the Study.............................................................................................8-9

Definition of Terms...............................................................................................................10-
11

CHAPTER 2: REVIEW OF RELATED LITERATURE AND STUDIES………………12-

14

CHAPTER 3: METHODOLOGY

REFERENCES.......................................................................................................................15-16
CURRICULUM VITAE
.....................................................................................................................
 1

Chapter 1

THE PROBLEM AND ITS SCOPE

Rationale

Customer service and customer satisfaction are crucial factors for the success
and competitiveness of small coffee shops. Providing exceptional customer service and
ensuring high levels of customer satisfaction can lead to increased customer loyalty,
positive word-of-mouth, and sustained business growth. Understanding the relationship
between customer service and satisfaction levels is essential for small coffee shop
owners and managers to improve their service offerings and maintain a competitive
edge in the market. the coffee shop brand marketer needs a thorough understanding of
consumer behavior as a basis for making better strategic decisions in terms of target
market definition and product positioning, and also better tactical decisions about
specific marketing-mix actions. In particular, every marketer in the coffee shop business
should be able to develop marketing programs that align with the customers’ desires,
thoughts, feelings, images, beliefs, perceptions, and opinions. According to (Kotler &
Keller, 2009). the value of a strong brand lies in its power to capture customer
preference and loyalty.

.This non-experimental comparative study aims to investigate the relationship

between customer service and satisfaction levels in two small coffee shops located in
Cebu City. By comparing the customer service practices and satisfaction levels of these
two establishments, this study seeks to provide insights into the impact of customer
service on customer satisfaction within the local context. The selection of two coffee
shops in this study allows for a direct comparison of their customer service practices
and their resulting levels of customer satisfaction.
 2 2

The primary objectives of this study are these three: (a) To compare the
customer service practices of Coffee Shop A and Coffee Shop B in Cebu City, including
factors such as staff friendliness, knowledge, efficiency, responsiveness, and ambiance.
(b) To assess and compare customer satisfaction levels in Coffee Shop A and Coffee
Shop B, taking into account factors such as overall experience, product quality, service
timeliness, and value for money. (c) To analyze and compare the relationship between
customer service and satisfaction levels in Coffee Shop A and Coffee Shop B,
determining any differences or similarities in the strength and direction of this
relationship.

The findings of this study will provide valuable insights into the impact of
customer service on customer satisfaction in the local context and will have practical
implications for coffee shop owners and managers. The findings may not be
generalizable to all small coffee shops or other geographical locations. Nonetheless, the
study contributes to the existing literature on customer service and satisfaction within
the context of small coffee shops, providing insights specific to the local context of Cebu
City and the results may offer practical recommendations for both coffee shop owners
and managers in Cebu City, enabling them to enhance their customer service practices
and ultimately increase customer satisfaction. By comparing these establishments, the
study seeks to provide insights into the impact of customer service on customer
satisfaction within the local context.
 3 3

Background of the Study

Small coffee shops play an integral role in the food and beverage industry, For
some people, coffee is a way to carry out their social lives. The coffee shop is also a
way to affirm one’s identity and self-esteem (Said, 2012). Offering unique experiences
and personalized services to customers. In a highly competitive market, providing
exceptional customer service and ensuring high levels of customer satisfaction are
crucial for the success and growth of these establishments. Understanding the
relationship between customer service and satisfaction levels in small coffee shops is
essential for owners and managers to make informed decisions and improve their
service offerings.

In a highly competitive market, small coffee shops need to differentiate

themselves from larger chains and attract and retain customers. Researching the
relationship between customer service and satisfaction levels can help small coffee
shops identify areas for improvement and develop strategies to provide exceptional
customer service, which can give them a competitive edge. Understanding the customer
service practices of Coffee Shop A and Coffee Shop B will enable researchers to
assess the factors that contribute to customer satisfaction. This may include aspects
such as staff friendliness, knowledge, efficiency, responsiveness, and the overall
ambiance of the coffee shops. By examining customer satisfaction levels, the study will
consider factors such as overall experience, product quality, service timeliness, and
value for money. By identifying areas of strength and areas for improvement in
customer service practices and satisfaction levels, the study can offer recommendations
to enhance the customer experience and increase overall satisfaction. (Keller, 1993).
 4 4

In conclusion, this non-experimental comparative study aims to explore the

relationship between customer service and satisfaction levels by comparing two small
coffee shops in Cebu City. By examining the customer service practices and satisfaction
levels of these establishments, the study seeks to provide insights into the factors that
contribute to customer satisfaction within the local context. A coffee shop needs to
establish a clear and consistent brand identity by communicating its brand attributes in a
way that can be easily understood by prospective customers. One of the firm’s most
valuable assets for improving marketing productivity is the customers' existing
knowledge of the brand (Keller, 1993). The findings can inform the readers on what
coffee shop has the most rated satisfaction levels and their effectiveness about potential
areas for improvement, ultimately leading to enhanced customer satisfaction and
business success in this competitive market.
 5 5

Theoretical Framework

The theoretical framework for studying the relationship between customer service
and satisfaction levels in small coffee shops can be based on several established
theories and concepts in the field of customer satisfaction and service management.
Here are a few potential frameworks to consider:

Service Quality Theory: This theory suggests that customer satisfaction is influenced by
the perceived quality of service they receive. It can include dimensions such as
responsiveness, reliability, assurance, empathy, and tangibles. The framework can
focus on these dimensions of service quality in coffee shop settings and their impact on
customer satisfaction levels. (Zeithaml et al., 1988).

Relationship Marketing Theory: This theory emphasizes the importance of building long-
term relationships and customer loyalty through superior customer service. The
framework can investigate how the quality of customer service in small coffee shops
affects both short-term and long-term customer satisfaction, as well as customer loyalty
and retention. (Koiranen, 1995).

These theoretical frameworks offer different perspectives on the relationship between

customer service and satisfaction levels in small coffee shops.
 6 6

Conceptual Framework

Input Process Output

 Name:
 Age:
- Customer
 Sex: - Survey Satisfaction

- Questionnaire

- Customer Service

FIGURE 1.1

“Exploring the Impact of Customer Service on Customer Satisfaction in Small Coffee

Shops”

This conceptual framework enables the investigation of the relationship between

factors affecting the satisfaction levels in small coffee shops, providing insights into the
impact of improved customer service on customer satisfaction. By focusing on
improving Customer Service and Enhance the overall Customer experience and foster
Customer Satisfaction.
 7 7

Statement of the Problem

This study aims to determine the relationship between customer service and satisfaction
levels between the top two small coffee shops in Cebu.

Research Questions:

1. What is the satisfaction level of consumers?

2. Which dimensions of customer service do consumers prefer?

3. How does Customer service affect Consumer satisfaction levels?

 8 8

Significance of the Study

The results of the study will be of great benefit to the following:

Coffee Shop Owners/Managers. The results of the study will help the owners and
managers to understand the factors that influence customer satisfaction and make
informed decisions to enhance customer service. This can lead to improved customer
loyalty, positive reviews, and increased revenue for their respective coffee shops.

Customers. This study will provide information to the customers regarding their
improved services and overall satisfaction levels. Satisfied customers are more likely to
have enjoyable experiences, leading to repeat visits. They are also more likely to
recommend the coffee shops to others, thereby enhancing the customer base and
fostering a sense of community.

Employees. This Study will help Employees in coffee shops increase in higher
satisfaction levels are likely to experience job satisfaction, leading to higher morale and
a better workplace atmosphere. Additionally, well-satisfied customers may tip more,
directly benefiting the employees.

Local Community. The data given will provide information that can attract more people
to the area where the coffee shop is. This increased foot traffic can positively impact
other local businesses and contribute to the overall economic development of the
community.
 9 9

Future Researchers. This study can provide valuable insights for researchers studying
consumer behavior, customer service strategies, and small business management. It
adds to the body of knowledge in these areas and can serve as a reference for future
studies.

In summary, the study benefits coffee shop owners, customers, employees, the local
community, and Future Researchers by providing valuable insights into the relationship
between customer service and satisfaction levels, leading to improved business
outcomes and enhanced experiences for all stakeholders involved.
 10 10

Definition of Terms

The key terms in the study are given the following operational definitions.

Customer Service

Customer service refers to the assistance and support provided by a business to its
customers before, during, and after purchasing products or services. It includes
activities and processes designed to enhance customer satisfaction and meet customer
expectations. (Ryan et al., 2003).

Satisfaction Levels

Satisfaction levels represent the degree of contentment or fulfillment experienced by

customers based on their interactions with a business. It can encompass various
aspects, such as product quality, service efficiency, staff friendliness, and overall
customer experience. (Oliver, 1980).

Small Coffee Shops

Small coffee shops refer to independently owned or boutique-style cafes that operate on
a smaller scale compared to large coffeehouse chains. These establishments typically
focus on personalized service, unique ambiance, and specialty coffee offerings tailored
to local or niche markets. (Najib et al., 2020).

Customer Experience

Customer experience encompasses the overall perception and interaction customers

have with a business. It includes every touch point a customer has with the coffee shop,
from initial awareness to post-purchase interactions. Positive customer experiences
contribute to higher satisfaction levels. (Becker & Jaakkola, 2020).
 11 11

Word-of-Mouth

Word-of-mouth refers to informal communication and recommendations made by

satisfied customers to others. Positive word-of-mouth can significantly impact a small
coffee shop's reputation and customer base, leading to potential business growth.
(Buttle, 1998).

These definitions provide a clear understanding of the key terms used in the study,
laying the foundation for the exploration of the relationship between customer service
and satisfaction levels in small coffee shops.
 12 12

Chapter 2

REVIEW OF RELATED LITERATURE AND STUDIES

Introduction
This literature review explores the connection between customer service and
satisfaction levels in small coffee shops. The purpose of this study is to enhance the
existing research by providing an extensive analysis of the different aspects of customer
service that have an impact on customer satisfaction in small coffee shops. The review
follows a thematic structure using a deductive approach from general to specific
themes. The literature review covers three main topics: Factors that Influence Customer
Satisfaction, Strategies for Enhancing Customer Service and Satisfaction, and the
Effect of Customer Service on Customer Loyalty. The findings of this study will have
practical implications for small coffee shop owners and managers and will offer valuable
insights into the practices and strategies that can help them improve customer service
and increase customer satisfaction.

Factors that Influence Customer Satisfaction

Customer satisfaction plays a vital role in establishing customer loyalty

and is directly influenced by the quality of customer service in any business,
including small coffee shops. This is because it has a direct impact on the
success of the coffee shop in attracting more loyal customers. Various factors
contribute to customer satisfaction in small coffee shops, including the quality of
service and the friendliness of the staff. By understanding these factors, coffee
shops can improve their customers' satisfaction levels. (Saadat et al., 2018).
 13 13

Influence of Staff Friendliness on Customer Satisfaction

The Influence of staff Friendliness in small coffee shops has a significant

impact on customer satisfaction. When staff is welcoming, attentive, and friendly,
customers are more likely to feel valued and satisfied with their experience.
(YAN, 2014).

Quality of the Product or Service

The quality of a product or service is an essential factor that affects

customer satisfaction. According to a study, quality plays a crucial role in
determining customer satisfaction. Customers are more likely to be satisfied with
a product or service that meets their expectations. (Devaraj et al., 2001).

Strategies for Enhancing Customer Service and Satisfaction

Small coffee shop owners can improve customer service and satisfaction
by implementing various strategies. These may include effective communication
and listening skills, as well as prompt and efficient service. By utilizing these
strategies, owners have the opportunity to receive positive feedback from
satisfied customers and increase overall customer satisfaction levels.
(Kursunluoglu, 2011).

Effective Communication and Listening Skills

Effective communication skills are vital for enhancing customer service

and satisfaction. Small coffee shops can improve customer retention, increase
loyalty, and build a positive brand reputation by developing effective
communication and listening skills. Additionally, staff members should actively
 14 14

listen to customer needs, address concerns promptly, and communicate in a

friendly and professional manner. (Rane et al., 2023).

Prompt and Efficient Service

Prompt and efficient service is crucial for customer satisfaction.

Customers appreciate timely order fulfillment, minimal waiting times, and smooth
transactions. Streamlining processes and optimizing operational efficiency can
improve service and satisfaction levels. (Naik et al., 2010).

Effect of Customer Service on Customer Loyalty

The effect of customer service on customer loyalty is very positive,

especially in small coffee shops. By continuously providing excellent customer
service, coffee shops can create a loyal customer base, leading to repeat
business and higher levels of customer satisfaction. (Leung et al., 1998).

Word-of-mouth and Customer Satisfaction

Word-of-mouth recommendations from satisfied customers are critical for

the success of small coffee shops. When customers are satisfied, they tend to
become loyal and will share their positive experiences with others, which can
attract new customers and foster increased satisfaction. (Anderson, 1998).

The influence of customer service on customer retention

Research has demonstrated that customer service plays a significant role

in customer retention, as individuals who are content with the service, they
receive are more inclined to remain loyal to a company. Consequently,
 15 15

businesses should give priority to customer service to enhance customer

retention and loyalty. (Havaldar et al., 2011).

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