Relationships among hedonic andutilitarian values, satisfaction and

behavioral intentions in thefast-casual restaurant industry

Kisang RyuHotel, Restaurant and Tourism Administration, University of New Orleans,

New Orleans, Louisiana, USA

Heesup HanDepartment of Tourism Management, College of Business Administration,

Dong-A University, Busan, South Korea, and

Soocheong (Shawn) JangDepartment of Hospitality and Tourism Management, Purdue University,

West Lafayette, Indiana, USA

Abstract

Purpose – The paper aims to examine the relationships among hedonic and utilitarian values,customer satisfaction and behavioral intentions in the fast-casual restaurant industry.

Design/methodology/approach – The measures were developed based on a thorough review ofthe previous literature. Questionnaires were collected in classroom settings at a mid-westernuniversity in the USA. Anderson and Gerbing’s two-step approach was employed to assess themeasurement and structural models.

Findings – The findings indicate that hedonic and utilitarian values significantly influence customersatisfaction, and customer satisfaction has a significant influence on behavioral intentions. Utilitarianvalue shows a greater influence on both customer satisfaction and behavioral intention than doeshedonic value. This study also reveals that customer satisfaction acts as a partial mediator in the linkbetween hedonic/utilitarian value and behavioral intentions.

Research limitations/implications – Study findings will greatly help hospitality researchers andpractitioners understand the roles of hedonic and utilitarian values in customer satisfaction andbehavioral intentions in the fast-casual restaurant industry.

Originality/value – The paper is the first to explore the relationships among hedonic and utilitarianvalues and their effect on customer satisfaction and behavioral intentions in the fast-casual restaurantindustry using Babin et al.’s two-dimensional measure of consumer value.

Keywords Utilitarianism, Customer satisfaction, Consumer behaviour, Restaurants, Catering industry,Fast foods

Paper type Research paper

IntroductionResearchers have long focused on the utilitarian aspects of consumer behavior, whichhas often been characterized as task-related and rational (Babin et al., 1994; Batra and

The current issue and full text archive of this journal is available at

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This study was supported by research funds from Dong-A University.

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Received 8 October 2008Revised 17 March 200923 June 2009Accepted 1 August 2009

International Journal ofContemporary HospitalityManagementVol. 22 No. 3, 2010pp. 416-432q Emerald Group Publishing Limited0959-6119DOI 10.1108/09596111011035981

Ahtola, 19901). However, explanations for traditional product acquisition may not fullyreflect the totality of consumer behavior. Some scholars have shown new interest in thehedonic aspects of consumption behavior, particularly as researchers recognize thepotential importance of its entertainment and emotional worth (Arnold and Reynolds,2003; Babin et al., 1994; Wakefield and Baker, 1998). Hedonic consumption has beenconsidered pleasure-oriented consumption that is primarily motivated by the desire forsensual pleasure, fantasy, and fun (e.g. vacationing in Las Vegas) (Hirschman andHolbrook, 1982), while utilitarian consumption is described as goal-orientedconsumption that is mainly driven by the desire to fill a basic need or to accomplisha functional task (e.g. the consumption of laundry detergent to wash clothes).

Not all consumption experiences in the restaurant industry evoke the sameemotional states. The feelings associated with goal-oriented or “necessary”consumption (e.g. ordering healthy food in a restaurant due to weight gain concerns)may not be the same as the feelings associated with more pleasure-oriented or“frivolous” consumption (e.g. enjoying the music in a restaurant). Consumers highlyvalue the utilitarian aspects of necessary consumption, while highly valuing thehedonic aspects of frivolous consumption. Hedonic value is more subjective andpersonal than its utilitarian counterpart because it stems from a need for fun andplayfulness rather than from a need to engage in task completion. On the basis of thisobservation, a distinction should be made between two types of consumption thatdiffer in terms of perceived value. Therefore, measures accounting for both hedonicand utilitarian service values are needed.

A fast-casual restaurant is a restaurant market niche that is similar to a fast-foodrestaurant in that it does not offer most table services, but promises a somewhat higherquality of foods and atmosphere more consistent with the casual dining segment. Asconsumers are increasingly interested in higher-quality food, healthier food choices,better physical eating conditions, and better customer service, the fast-casual diningsegment, which falls between the “quick service” and “full service” segments, has beena contemporary trend in the foodservice industry (Anderson, 2003; Sloan, 2002;Tillotson, 2003). According to the National Restaurant Association’s 2008 industryoutlook, the success of the fast-casual restaurants should continue to grow for at leastthe next year. Approximately one-third of operators say their customers are looking fora wider range of food choices from restaurants, while 19 percent say customers areseeking healthy alternatives. Three out of four consumers also indicated that they aretrying to eat healthier in restaurants now than they were two years ago. In addition, theimportance of food quality was mentioned by quick-serve operators.

We must emphasize that despite the increasing importance of the fast-casualrestaurant sector in the restaurant industry, particularly in the quick service restaurantsegment, researchers have paid scant attention to gaining a better understanding ofconsumers’ behavior in this fast-growing segment. There is little doubt that diningexperiences can indeed produce both utilitarian and hedonic value, and some diningexperiences are more pleasurable than others. However, the role and relativeimportance of instrumental characteristics versus hedonic aspects will likely varyacross contexts. Therefore, it is crucial to understand how consumers’ perceived valuevaries across different service contexts to aims for a holistic understanding of theirperceptions of the consumer service value and their subsequent internal (i.e.satisfaction with the consumer service value) and external responses (e.g. repatronage,

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word-of-mouth). Some of the customers in this restaurant sector might greatly valuehedonic aspects (e.g. a more upscale physical environment compared to that in fastfood restaurants), whereas others might primarily value the utilitarian aspects ofdining experiences (e.g. healthier menu items compared to those found in fast foodrestaurants). Specifically, there has been no investigation of whether customers in thisfast-casual restaurant segment are primarily driven by emotional or practical value.This study aims to fill in these gaps. Our purpose, therefore, was to explore therelationships among consumer service value (hedonic and utilitarian values), customersatisfaction and behavioral intention in the fast-casual restaurant segment. Thespecific objectives of this study were to:

. investigate the relationships between customer values regarding eating-out andthe importance of fast-casual restaurant attributes;

. examine the relative importance of hedonic and utilitarian values on customersatisfaction and subsequent behavioral intention; and

. investigate the mediating role of customer satisfaction between customers’perceived value and behavioral intention.

Theoretical backgroundUtilitarian value and hedonic valueThe concept of “value” has proved to be an enduring endeavor for a wide range ofphilosophers and researchers (Babin et al., 1994; Zeithaml, 1988). Researchers arecontinually seeking a more complete understanding of consumer value. An extensiveliterature review has established that perceived value has been conceptualized as whatconsumers get for what they give, or the consumer’s overall evaluation of the utility ofa product or service provision based on perceptions of what one receives for what onegives (Baker et al., 1994; Zeithaml, 1988). Within this perspective, Zeithaml (1988, p. 13)identified four common uses of the term: “low price”, “whatever I want in a product”,“the quality I get for the price I pay”, and “what I get for what I give”.

The majority of previous research has focused on shopping’s utilitarian perspective(Babin et al., 1994). Utilitarian consumer behavior is described as a functional ortask-related standpoint and may be thought of as work (Babin et al., 1994; Batra andAhtola, 1990). However, other researchers have argued that shopping value shouldaccount for more than simply functional utility (Babin and Attaway, 2000; Babin et al.,1994; Eroglu et al., 2005; Homer, 2008; Lim and Ang, 2008; Voss et al., 2003).Traditional product-acquisition explanations may inadequately reflect the total valueof a consumption experience. If we assume consumption activities are evaluatedexclusively on the benefits of goods or services acquired, we fail to recognize numerousintangible and emotional costs and benefits that should be examined before we canunderstand the consumption experience fully (Babin et al., 1994; Lim and Ang, 2008).

Extant research has established that consumption can take place for hedonic orutilitarian reasons (Hirschman and Holbrook, 1982; Lim and Ang, 2008). Hirschmanand Holbrook (1982) described consumers as either “problem solvers” or in terms ofconsumers seeking “fun, fantasy, arousal, sensory stimulation, and enjoyment.” Thisdichotomy has been represented in consumer behavior studies by the themes ofconsumption behavior “as work” (Babin et al., 1994; Fischer and Arnold, 1990; Sherry

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et al., 1993) versus the more enjoyable aspects of consumption behavior “as fun” (Babinet al., 1994; Lageat et al., 2003).

Consumer value classifications are represented as the dichotomization of utilitarianand hedonic values (Babin et al., 1994; Bridges and Florsheim, 2008; Chandon et al.,2000; Childers et al., 2001; Eroglu et al., 2005; Gursoy et al., 2006; Homer, 2008; Vosset al., 2003). Babin et al. (1994) introduced two types of shopping values by developinga scale measuring both hedonic and utilitarian values obtained from the pervasiveconsumption experience of shopping. The researchers concluded that distinct hedonicand utilitarian shopping value dimensions exist and are related to a number ofimportant consumption variables.

Babin et al. (1994) proposed that consumption activities may produce both hedonicand utilitarian outcomes. They describe utilitarian value (p. 645) as “resulting fromsome type of conscious pursuit of an intended consequence”; thus, it is task-orientedand rational, and may be thought of as work. Utilitarian evaluation is traditionallyfunctional, instrumental and cognitive in nature. It primarily involves the fulfillment ofinstrumental expectations consumers may have for the product or service and are ameans to an end often equated with rational motives of time, place and possessionneeds. In the utilitarian view, consumers are concerned with purchasing products in anefficient and timely manner to achieve their goals with a minimum of irritation.

While marketers are focusing more on hedonic aspects to meet customers’increasing desires for entertainment, academic research is lagging in investigating thehedonic side of consumers’ evaluations of their consumption experience (Arnold andReynolds, 2003). Compared to its utilitarian aspects, value’s “festive” side has gainedless attention in previous studies. Recent marketing research is beginning to focus onthe hedonic aspects of the consumption experience, such as the affective response ofexcitement (O’Curry and Strahilevitz, 2001; Wakefield and Baker, 1998). Similar toHirschman and Holbrook’ (1982) assertions, hedonic value can be defined as being“more subjective and personal than its utilitarian counterpart and resulting more fromfun and playfulness than from task completion” (Babin et al., 1994, p. 646). Hedonicevaluation is more affective than cognitive in nature. Hedonic values arenon-instrumental, experiential, and affective and often related to non-tangibleretailer/product attributes. The adventurous nature of hedonic value reflectsshopping’s entertainment and emotional potential resulting from the fun and play ofthe experience versus the achievement of any pre-specified goal (Hirschman andHolbrook, 1982; Babin et al., 1994).

Clearly, utilitarian and hedonic values are considered fundamental tounderstanding consumers’ evaluations of the consumption experience because theymaintain a basic underlying presence across consumption phenomena (Babin et al.,1994; Bridges and Florsheim, 2008; Chandon et al., 2000; Childers et al., 2001; Erogluet al., 2005; Hirschman and Holbrook, 1982; Homer, 2008; Jones et al., 2006). Takentogether, these two dimensions indicate an assessment of the overall worth ofconsumption activity, representing a more comprehensive picture of the value. Thus, inthis study we adopted this two-dimensional conceptualization of consumer value: Thefirst dimension is a utilitarian dimension resulting from work aspects, and the secondis a hedonic dimension derived from the fun perspective (Babin et al., 1994; Babin et al.,1994; Eroglu et al., 2005).

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Value, satisfaction and behavioral intentionsNumerous researchers have verified the significant relationship among value,customer satisfaction and behavioral intention in business and hospitality fields(Colgate and Lang, 2001; Fornell et al., 1996; Hallowell, 1996; Taylor, 1997). Hunt (1977)defined customer satisfaction as “an evaluation rendered that the (product) experiencewas at least as good as it was supposed to be” (p. 459). Similarly, Oliver (1996)described it as the consumer’s fulfillment response. It is a judgment that a product orservice feature, or the product or service itself, provided (or is providing) a pleasurablelevel of consumption-related fulfillment, including levels of under- or over-fulfillment”(p. 13). Further, Oliver (1996) defined behavioral intentions as an affirmed likelihood toengage in a certain behavior. Based on this definition, behavioral intention in thisstudy may be described as a stated likelihood to return to the restaurant and torecommend it to family, friends, and others in the future.

In recent years, perceived value has gained special attention as an importantconstruct in predicting consumer buying behavior (Anderson and Srinivasan, 2003).Many researchers agree that value has a significant influence on customer satisfactionand behavioral intentions (Andreassen and Lindestad, 1998; Chen and Tsai, 2007; Leeet al., 2007; McDougall and Levesque, 2000; Patterson and Spreng, 1997; Pura, 2005).Patterson and Spreng (1997) found that customer’s perceptions of value are a positiveand direct antecedent of customer satisfaction in a service context. Andreassen andLindestad (1998) found that value has a positive impact on customer satisfaction indeveloping a customer loyalty model in complex service contexts. Additionally, ininvestigating the relationships among service quality, perceived value, satisfaction,and behavioral intentions, McDougall and Levesque (2000) found that perceivedservice quality and value were the most significant drivers of customer satisfactionacross four service sectors, such as restaurants, auto service, hairstylists, and dentalservices. Pura (2005) analyzed the direct effect of customer perceptions of value onattitudinal and behavioral components of loyalty, such as commitment and behavioralintentions in a service context. His findings suggested that customer-perceived valuesignificantly influences behavioral intentions and commitment.

Many researchers have provided empirical evidence for a positive relationshipbetween customer satisfaction and behavioral intentions, such as repurchase andword-of-mouth intentions. The obvious reason to satisfy customers is to acquire repeatbusiness and positive word of mouth, thereby improving a chance of firm profitability(Barsky, 1992). Anderson and Sullivan (1993) found that a high level of customersatisfaction decreases the perceived benefits of switching service providers, therebyincreasing customer repurchase intentions. Getty and Thompson (1994) examined therole of satisfaction in explaining behavioral intention. Their findings indicated that highlevels of satisfaction increase customers’ intentions to repurchase and recommend theproduct. In contrast, dissatisfied customers are more likely to switch, complain, orspread negative word-of-mouth (Oliver, 1996). Further, Kivela et al. (1999) found thatdining satisfaction significantly influences post-dining behavioral intentions. Inassessing the role of intentions as a link between satisfaction and repatronizing behaviorin a restaurant setting, Soderlund and Ohman (2005) also found that customersatisfaction is significantly related to two specific intention constructs: intentions asexpectations and intentions as wants. In upscale restaurant settings, Han and Ryu (2007)found that improving customer satisfaction levels is essential to increasing revisit andrecommendation intentions. Likewise, in investigating the importance of food quality in

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mid- to upper-scale restaurants, Namkung and Jang (2007) also evidenced the significantimpact of customer satisfaction on behavioral intentions, including revisit,recommendation, and positive word-of-mouth intentions. These findings all supportthe significant link between customer satisfaction and behavioral intentions.

Indeed, Babin et al. (1994) showed that both the hedonic and utilitarian valueobtained from a shopping experience should influence customer satisfaction. Theyempirically demonstrated a strong degree of positive correlations of hedonic value(r ¼ 0:51, p , 0.001) and utilitarian value (r ¼ 0:53, p , 0.001) with satisfaction. Inaddition, Eroglu et al. (2005) conducted two studies to investigate whether shoppingvalues are affected by perceived retail crowding, and whether shopping values mediatethe relationship between perceived retail crowding and shopping satisfaction. Resultsof the second study revealed that the impact of perceived crowding on shopping valueis mediated by emotions experienced by the shopper, using a sample of collegestudents. The emotions and shopping value reactions, in turn, mediate the effect ofspatial crowding on shopping satisfaction. Both hedonic value (b ¼ 0:34, p , 0.01)and utilitarian value (b ¼ 0:14, p , 0.01) significantly influenced customersatisfaction. It is also worth noting that hedonic value showed a stronger influenceon customer satisfaction than did utilitarian value.

Babin et al. (1994) conducted the research to extend the notions of utilitarian andhedonic value to account for outcomes of consumer service encounters using a sample ofKorean restaurant consumers at family-style chain restaurants. The study supported theadequacy of using their scale to account for utilitarian and hedonic value, the role offunctional and affective service environment components in shaping consumersatisfaction and word-of-mouth intentions (WOM). In particular, structural equationmodeling showed that hedonic and utilitarian value positively affected both customersatisfaction and WOM. Interestingly, the study found mixed strengths in the relativeimportance of hedonic value and utilitarian value on customer satisfaction and WOM.Hedonic value (b ¼ 0:25) had a stronger impact on customer satisfaction than utilitarianvalue (b ¼ 0:18), whereas hedonic value (b ¼ 0:14) had a smaller influence on WOM thanutilitarian value (b ¼ 0:25). Finally, customer satisfaction positively affected WOM.

Based on the issues discussed above, several points are apparent. There is ampleevidence of a significant causal relationship among consumer service value (hedonicand utilitarian value), customer satisfaction, and behavioral intentions. With theperceived hedonic and utilitarian values of dining experience, perceived utilitarianvalue is likely to have a stronger impact on both customer satisfaction and behavioralintentions than hedonic value since consumers in this restaurant sector are still mainlyviewed as a part of the quick service sector by many practitioners. Based on theprevious discussion, the proposed hypotheses can be summarized in the followinghypotheses. This two-factor (utilitarian versus hedonic) approach serves as the basisfor the hypotheses tested here:

H1. Perceived value has a positive impact on customer satisfaction in thefast-casual restaurant segment.

H1a. Hedonic value of dining experiences has a positive impact on customersatisfaction.

H1b. Utilitarian value of dining experiences has a positive impact on customersatisfaction.

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H2. Perceived value has a positive impact on behavioral intentions in thefast-casual restaurant segment.

H2a. Hedonic value of dining experiences has a positive impact on behavioralintentions.

H2b. Utilitarian value of dining experiences has a positive impact on behavioralintentions.

H3. Customer satisfaction has a positive impact on behavioral intentions in thefast-casual restaurant segment.

H4. The perceived utilitarian value has a stronger influence on customersatisfaction than perceived hedonic value in the fast-casual restaurantsegment.

H5. The perceived utilitarian value has a stronger influence on behavioralintentions than perceived hedonic value in the fast-casual restaurantsegment.

MethodologyQuestionnaire items were developed based on those used in previous studies (Babinet al., 1994; Batra and Ahtola, 1990; Donovan and Rossiter, 1982; Park, 2004) and afocus group session was conducted by 6 graduate students to assess consumer valuesregarding eating-out, customer satisfaction, and behavioral intentions. Additionally,the survey was carefully reviewed by professors familiar with the topic area and afast-casual restaurant manager. Before the main study, through a conveniencesampling approach (Babin and Attaway, 2000; Babin et al., 1994; Han and Ryu, 2007;Titz et al., 1998), a pretest was conducted with 30 actual customers at a fast-casualrestaurant to evaluate whether the instrument could be clearly understood byrespondents and ensure its reliability. A small incentive (e.g. a free drink coupon) wasoffered to survey participants. Cronbach’s alpha coefficients ranged higher than 0.70,indicating an acceptable level of reliability. No modifications were needed on thesurvey after the pre-test.

The questionnaire consisted of hedonic and utilitarian values (Babin et al., 1994;Batra and Ahtola, 1990; Babin and Attaway, 2000), customer satisfaction, andbehavioral intention (Bigne et al., 2004; Donovan and Rossiter, 1982). Multi-item scaleswere used to measure the study constructs. Table I displays the questions used in thisstudy. Respondents were asked to rate 16 items using a seven-point Likert type scale(1 ¼ extremely disagree; 7 ¼ extremely agree). The measurement of consumer valuesregarding eating-out was assessed using five hedonic and four utilitarian items. Forexample, one measure of hedonic value was “eating-out at the fast-casual restaurantwas fun and pleasant.” One measure of utilitarian value was “eating-out at afast-casual restaurant was pragmatic and economical.” Customer satisfaction wasassessed using four items. For example, “I have really enjoyed myself at the fast-casualrestaurant.” Respondents were asked to provide answers to three statements to assessbehavioral intention. For instance, “I would like to come back to the fast-casualrestaurant in the future.”

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A self-administered questionnaire was distributed and collected in classroom settingsat a mid-western university in the US in 2007. Although a student sample is oftenviewed with suspicion due to their inexperience as consumers compared with otheradult subjects, they are at least as likely as other adults to have dining experiences inthe fast-casual restaurant segment. In addition, student subjects have been widelyand successfully utilized in previous studies in other academic disciplines (Arnoldand Reynolds, 2003; Babin et al., 1994; Bridges and Florsheim, 2008; Childers et al.,2001; Eroglu et al., 2005; Lim and Ang, 2008; O’Curry and Strahilevitz, 2001; Vosset al., 2003). Therefore, college students were asked to participate in this research. Toqualify for participation, a student had to have been a customer at a fast-casualrestaurant within the past month. The procedure began with an explanation of thefast-casual restaurant segment and the objectives of the study. Participants were thenasked to provide answers to questions. Students who participated in the surveyreceived an extra course credit for the participation. A total of 400 responses werecollected. After deleting incomplete responses, 395 responses were finally utilized indata analysis.

Questions Mean SD

Hedonic value I ate out at a fast-casual restaurant since I could havegood feelings 4.40 1.22Eating-out at the fast-casual restaurant was fun andpleasant 5.40 1.06The dining experience at the fast-casual restaurantwas truly a joy 4.96 1.14During the dining experience at the fast-casualrestaurant, I felt the excitement of searching food 4.13 1.36Although the cost was higher than fast-foodrestaurants, I liked to eat out at the better place 5.40 1.32

Utilitarian value Eating-out at the fast-casual restaurant wasconvenient 5.22 1.07Eating-out at a fast-casual restaurant was pragmaticand economical 4.62 1.12It was a waste of money when eating-out at the fast-casual restaurant 2.66 1.39Service at the fast-casual restaurant was quick 5.17 1.07

Customer satisfaction I was pleased to dine in at the fast-casual restaurant 5.41 1.09The overall feeling I got from the fast-casualrestaurant was satisfied 5.50 1.06The overall feeling I got from the fast-casualrestaurant put me in a good mood 5.13 1.22I really enjoyed myself at the fast-casual restaurant 5.21 1.14

Behavioral intentions I would like to come back to the fast-casualrestaurant in the future 5.84 1.17I would recommend the fast-casual restaurant to myfriends or others 5.86 1.14I would more frequently visit the fast-casualrestaurant 5.11 1.27

Note: SD ¼ Standard deviation

Table I.Descriptive information

for questions used inthe study

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Data were analyzed using the two-step procedure suggested by Anderson andGerbing (1988). First, a confirmatory factor analysis (CFA) was performed to identifywhether the measurement variables reliably reflected the hypothesized latentvariables. Second, a structural equation modeling (SEM) with latent variables viaAMOS 5 was tested to determine the adequacy of the constructs of the model and testthe hypotheses. The hedonic value and utilitarian value were predictor variables andcustomer satisfaction and behavioral intention were criterion variables in the analysis.In addition, the Sobel test was used to test the mediating role of customer satisfactionfor the linkage between hedonic and/or utilitarian value and behavioral intentions in aSEM model.

ResultsSample profileDescriptive statistics for the sample showed that 47.3 percent of respondents were maleand 52.70 percent were female. While approximately 7.6 percent of participants statedthat they had visited fast-casual restaurants fewer than three times over the past threemonths, 92.4 percent had visited them at least three times over the past three months.In particular, 45.7 percent had visited them more than 12 times, or at least once a weekover the past three months.

Data screeningBefore analyzing the data, data screening was conducted using SPSS. With the use of ap , 0.001 criterion for Mahalanobis distance, five multivariate outliers were detected(Mahalanobis’s D (19) . 43.82, p , 0.001). These extreme outliers were removedbecause they could have inappropriately affected the overall results, threatening thereliability or validity of a scale. In addition, results of assumption evaluations showedthat some variables were significantly and negatively skewed. Thus, these variableswere transformed using a square root transformation to reduce skewness and improvenormality. As a next step, a reliability test was conducted to assess the consistency ofthe measurements. This was used to assess the internal homogeneity existing amongthe items scale in this study. Coefficient alphas values for the study constructs rangedfrom 0.70 to 0.91. Each construct yielded the following reliabilities: hedonicvalue ¼ 0.80, utilitarian value ¼ 0.70, customer satisfaction ¼ 0.91, and behavioralintention ¼ 0.89. These values were above the 0.70 level suggested by Nunnally (1978),and thus indicating internal consistency.

Measurement modelPrior to conducting structural equation modeling (SEM), a measurement model wasassessed using AMOS 5. The items were subjected to a confirmatory factor analysis(CFA) with a four-factor measurement model using maximum likelihood estimation.The fit statistics showed that the measurement model fit the data reasonably well.However, the chi-square for this model was significant (x 2 ¼ 256:28, df ¼ 97,p , 0.001), indicating a poor model. However, “since chi-square is N-1 times theminimum value of the fit function, the chi-square test tends to be large in largesamples” ( Joreskog, 1993, p. 309). The x 2/df value of 2.64 was within an acceptablerange from 2 to 5 (Marsh and Hocevar, 1988). Additionally, other fit indices wereacceptable (RMSEA ¼ 0:070; CFI ¼ 0:99; NFI ¼ 0:99). However, one item’s

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standardized factor loading value for the utilitarian value did not meet the minimumcriterion of 0.40, so this item (i.e. It was a waste of money when eating-out at thefast-casual restaurant) was removed to increase reliability and decrease measurementerror (Ford et al., 1986; Fornell and Larcker, 1981; Nunnally, 1978). After this item wasexcluded, the remaining 15 items were subjected to CFA. Model fit of CFA wasacceptable (x 2 ¼ 210:85, df ¼ 83, p , 0.001; RMSEA ¼ 0:068; CFI ¼ 0:99;NFI ¼ 0:99). The model was significantly improved because a chi-square differencebetween the first and second CFA models was significant (Dx 2 ¼ 45:43, Ddf ¼ 14,p , 0.001). All standardized factor loadings emerged fairly high, exceeding theminimum criterion of 0.40 (Ford et al., 1986).

Composite reliability for each construct was calculated. As shown in Table II, allconstructs had desirable levels of composite reliability, ranging from 0.69 to 0.91(Bagozzi and Yi, 1988). Fornell and Larcker’s (1981) index of average varianceextracted (AVE) was assessed. While the AVE value for the utilitarian value was a bitbelow 0.50, AVE values for hedonic value, customer satisfaction, and behavioralintention were above the recommended level of 0.50, generally supporting convergentvalidity (Fornell and Larcker, 1981). In addition, the AVE values were generally greaterthan the shared variance among pairs of constructs (the square of their correlations),revealing evidence of discriminant validity (Fornell and Larcker, 1981).

Structural modelA structural analysis was conducted using the maximum likelihood estimationmethod. The results from the structural model are presented in Table III. Overall, thefit indices indicated an adequate model fit (x 2 ¼ 210:85, df ¼ 83, p , 0.001;RMSEA ¼ 0:068; CFI ¼ 0:99; NFI ¼ 0:99). The degree of variance explained byhedonic and utilitarian values for customer satisfaction was 0.68, and thevariance-explained estimate for behavioral intention by three antecedents was 0.79.

The structural diagram for the proposed model is presented in Figure 1. As shownin Figure 1 and Table III, the relationship between hedonic value and customersatisfaction was significant (coefficient ¼ 0.30, t ¼ 3:65, p , 0.01), and the linkagebetween utilitarian value and customer satisfaction was also significant(coefficient ¼ 0.59; t ¼ 6:31, p , 0.01), supporting H1a and H1b. These findingsindicate that both hedonic and utilitarian values are significant predictors of customersatisfaction. The effect of utilitarian value on customer satisfaction was greater than

MeasureHedonic

valueUtilitarian

valueCustomer

satisfactionBehavioralintention AVE

Compositereliability

1. Hedonic value 1.00 0.50 0.822. Utilitarian

value 0.67 (0.45) 1.00 0.43 0.693. Customer

satisfaction 0.69 (0.48) 0.79 (0.62) 1.00 0.70 0.904. Behavioral

intention 0.57 (0.32) 0.78 (0.61) 0.87 (0.76) 1.00 0.77 0.91

Notes: All correlations were significant at 0.05 level; Model measurement fit: x 2 ¼ 210.85 (df ¼ 83,p , 0.001), RMSEA ¼ 0.068, CFI ¼ 0.99, NFI ¼ 0.99

Table II.Measure correlations, the

squared correlations,and AVE

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the impact of hedonic value (utilitarian value: coefficient ¼ 0.59, t ¼ 6:31 vs hedonicvalue: coefficient ¼ 0.30, t ¼ 3:65), supporting H4. Hedonic and utilitarian values werealso found to have significant relationships with behavioral intentions, supporting H2aand H2b. The linkages among hedonic (coefficient ¼ 0.13, t ¼ 2:12, p , 0.05) andutilitarian values (coefficient ¼ 0.28, t ¼ 3:16, p , 0.01) and behavioral intentionswere both positive as well. Utilitarian value showed a greater influence on behavioralintention than hedonic value (utilitarian value: coefficient ¼ 0.28, t ¼ 3:16 vs hedonicvalue: coefficient ¼ 0.13, t ¼ 2:12), supporting H5. Finally, customer satisfaction waspredicted to be positively associated with behavioral intentions, supporting H3(coefficient ¼ 0.74, t ¼ 9:23, p , 0.01). This finding indicated that increasingfast-casual restaurant customers’ satisfaction levels is necessary to enhance theirintentions to recommend and revisit the restaurant.

Indirect effectsThe indirect effects of hedonic and utilitarian values on behavioral intentions were alsoassessed. The Sobel test was used to calculate for mediation in a SEM model. The Sobeltest, which was first proposed by Sobel (1982), is by far the most commonly used whentesting indirect (mediation) effects. The Sobel test assesses whether a mediator variable(customer satisfaction) significantly carries the effect of an independent variable

Figure 1.Results of the structuralmodel

Hypothesized path Coefficient t-value Results

H1a. Hedonic value ! Customer satisfaction 0.30 3.65 * * SupportedH1b. Utilitarian value ! Customer satisfaction 0.59 6.31 * * SupportedH2a. Hedonic value ! Behavioral intention 0.13 2.12 * SupportedH2b. Utilitarian value ! Behavioral intention 0.28 3.16 * * SupportedH3. Customer satisfaction ! Behavioral intention 0.74 9.23 * * Supported

Notes: R 2 (Customer satisfaction) ¼ 0.68; R 2 (Behavioral intention) ¼ 0.79; Goodness-of-fit statistics:x 2 (83) ¼ 210.85, p , 0.001; x 2/df ¼ 2.54; RMSEA ¼ 0.068; CFI ¼ 0.99; NFI ¼ 0.99; *p , 0.05,* *p , 0.01

Table III.Structural parameterestimates

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(hedonic/utilitarian value) to a dependent variable (behavioral intention). The results ofthe Sobel test revealed that both hedonic and utilitarian values had a significantindirect effect on behavioral intention via customer satisfaction (coefficient

HV-CS-BI ¼ 0.22; coefficient UV-CS-BI ¼ 0.44) at an alpha level of 0.01. Since the directrelationships between hedonic value and behavioral intentions (coefficient ¼ 0.13,t ¼ 2:12, p , 0.05) and between utilitarian value and behavioral intentions(coefficient ¼ 0.28, t ¼ 3:16, p , 0.01) were significant, customer satisfaction couldbe regarded as a partial mediator in the hedonic/utilitarian value and behavioralintention link. The total effect of utilitarian value on behavioral intention (0.72) wasgreater than that of hedonic value (0.35), indicating the importance of utilitarian valuein increasing behavioral intention.

Discussion and conclusionSummary of the studyThe purpose of this study was to examine the relationships among hedonic andutilitarian values, customer satisfaction and behavioral intention in the fast-casualrestaurant industry. In sum, the SEM analysis revealed that the proposed model couldwell predict consumers’ behavioral intentions to revisit the fast-casual restaurant andtalk positively about their dining experience about the restaurant (R 2 ¼ 0:79),indicating its applicability in the hospitality industries, particularly the restaurantindustries. The dimensions, along with other factors in the model, indicate acceptablelevels of convergent and discriminant validity. Moreover, they were related to the otherlatent constructs, customer satisfaction and behavioral intentions, in a theoreticallyconsistent manner. This serves to extend Babin et al.’s (1994) original scale into arestaurant context.

ImplicationsThe study results provide both theoretical and practical benefits. First, theoretically,this study demonstrates the usefulness of two distinct structures of consumer servicevalue: hedonic and utilitarian. This study is one of a few early studies to use Babinet al.’s (1994) two-dimensional measure of “customer service value”, thehedonic/utilitarian value, to explore relationships among hedonic and utilitarianvalues, customer satisfaction, and behavioral intentions. Similar to previous studies(Eroglu et al., 2005; Babin et al., 1994), the findings indicated that both hedonic andutilitarian values significantly influenced customer satisfaction and behavioralintentions, and customer satisfaction had a significant role in changing behavioralintentions. Customers’ perceived hedonic and utilitarian values both directly andindirectly influenced behavioral intentions. Thus, restaurateurs should acknowledgeand seek to improve customers’ perceptions of both hedonic and utilitarian values inensuring satisfaction, thereby in turn influencing positive behavior emotions such asrevisiting the restaurant and talking positively about dining experiences in fast casualrestaurants. Hopefully, this work will serve as a useful base for more comprehensiveresearch. Practically speaking, the results can help marketers better understandpeople’s rationale for eating at fast-casual restaurants and respond accordingly,thereby eventually improving customers’ perceived service value and creatingcustomer satisfaction, which in turn affects positive behavior.

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Second, the results of the current research indicate that while the hedonic aspects ofconsumer value are important predictors of customer satisfaction, the more functional,utilitarian aspects of consumer value play a greater role in customer satisfaction andpositive behavioral intentions in the fast-casual dining sector. That is, the diningexperience in this context might be more aptly described as a strongly goal-oriented,instrumental behavior than an intrinsically enjoyable activity. Therefore, marketingactivities in the fast-casual restaurant context should focus on facilitating efficientdining experiences (e.g. healthy food options, convenience, quick serving, andreasonable price). We recommend that restaurateurs focus on means of enhancing theutilitarian value of fast-casual restaurants so as not to put off those customers whovisit for primarily functional reasons. For instance, given the ability of fast-casualrestaurants to develop, source, and promote more healthy-sounding menu items,restaurateurs can serve freshly prepared healthy foods that communicate betterpositioning among customers for the upscale quick service restaurant sector.Facilitating functional goals pays for itself in the longer term – satisfied customers arelikely to respond positively to the restaurant sector.

Third, the results of the Sobel test indicate that satisfaction significantly affectshedonic and utilitarian values and thereby behavioral intentions, acting as a partialmediator. This finding suggests that restaurateurs should seek to enhance customersatisfaction. Developing various ways to increase restaurant customers’ satisfactionlevels may ultimately influence customers’ hedonic and utilitarian values as they formintentions to revisit and recommend.

Fourth, this study also found that although its impact is not greater than theutilitarian value, the hedonic value of the fast-casual restaurant dining experience stillsignificantly influences both customers’ satisfaction level and behavioral intentions.This result implies that the hedonic aspect of value should not be ignored. In otherwords, enjoyment is a significant predictor of consumer service value in the fast-casualrestaurant sector. Therefore, restaurateurs should make an effort to produce a moreenjoyable and pleasant environment. This may involve or require the use of a moreentertaining atmosphere, such as lighting, color, music, unique interior design anddecor, professional appearance of employees, and other aspects of dining experiencesthat make them enjoyable or exciting to experience.

Limitations and suggestions for future researchAs with any study, there are some limitations to the generalizability of the findings.This study focused only on the fast-casual restaurant segment. Researchers (Chandonet al., 2000) have found that the relative appeal of hedonic as compared to utilitarianvalue depends on the nature (hedonic or utilitarian) of the product/service, indicatingthat the role and relative importance of instrumental characteristics versus hedonicaspects may vary across contexts. Thus, more research is needed into other contextssuch as upscale casual restaurants. Additionally, the use of a homogeneous studentsample, while it may be desirable in reducing extraneous variance, limited thegeneralizability of the study findings. Therefore, future study should include a broadrange of actual customers to test the proposed relationships. A convenience samplingapproach has been widely and successfully used in collecting data in previous studies(Babin and Attaway, 2000; Babin et al., 1994; Han and Ryu, 2007; Titz et al., 1998).However, the conclusion should be also interpreted with some caution since the data

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collected using the convenience sampling approach might not be representative of thepopulation.

Future research should address a number of characteristics (e.g. consumptionmotivations) and situational factors (e.g. time pressure) that could be related to hedonicor utilitarian value (Babin et al., 1994). For example, Babin et al. (1994) showed thattime pressure is negatively related to perceived shopping value. As time pressureincreased, consumers’ diminished feelings of freedom led to lower hedonic value.Additionally, future research could examine the potential moderating effect ofconsumption orientations. For example, consumers with a more goal/functionalorientation might be affected more by utilitarian value, whereas consumers who tendtowards more pleasure-oriented consumption could be influenced more by hedonicvalue. Given the relationship between culture and marketing, another interestingfuture research project could involve an examination of the potential role of culture as amoderator among hedonic and utilitarian values, customer satisfaction and loyaltylinks. However, such a study must be both theoretically and practically meaningful inorder to reveal how the relationships between values and satisfaction/loyalty vary indifferent cultural settings.

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Further reading

Day, E. and Crask, M.R. (2000), “Value assessment: the antecedent of customer satisfaction”,Journal of Consumer Satisfaction, Dissatisfaction and Complaining Behaviour, Vol. 13,pp. 42-50.

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Corresponding authorHeesup Han can be contacted at: heesup@donga.ac.kr

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