The Impact of Service Quality Using Artificial Intelligence

THE IMPACT OF SERVICE QUALITY USING ARTIFICIAL INTELLIGENCE IN QUICK

SERVICE RESTAURANT

A Research Project

Presented to the Faculty of College of Hospitality Management

Don Honorio Ventura State University

Mexico Campus

In Partial Fulfilment of the Requirements for the Degree of

Bachelor of Science in Hospitality Management

Leader:

Padilla, Rose Ann B.

Members:

Bautista, Christy G.

Macabali, Daryll V.

Pelayo, Garries D.

Quiambao, Sheena Mae M.

2024

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Chapter I

THE PROBLEM AND ITS BACKGROUND

INTRODUCTION

In a time when technology is developing quickly, companies in all

sectors are looking for creative methods to improve customer satisfaction and

service quality. The quick service restaurant (QSR) industry is one of these sectors

that distinguishes out for having a very competitive and dynamic environment

where success is largely determined by efficiency and customer experience.

Artificial intelligence (AI) technologies have presented QSRs with a promising

opportunity to transform their business models and achieve previously unheard-

of levels of service quality.

Artificial intelligence has emerged as the most significant technology

advancement in business in recent years. Machine learning includes artificial

intelligence, which is widely used, especially in the commercial sector. The fast

service restaurant industry is one of the many industrial sectors that is seizing this

enormous opportunity. In order to be competitive, restaurant franchises must

embrace technology, as customers are becoming increasingly captivated with

digital platforms. Artificial intelligence will enhance offerings, streamline

operations, and boost customer satisfaction in fast service restaurants. The

application of artificial intelligence will impact not only the functional area of

quick service restaurants but also other areas such as marketing, staffing,

financing, and inventory management is a party to the dispute. Technology is

allowing fast food companies to make it faster and cheaper to get their food, by

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reducing the role of human employees. Use of technology is helping quick service

restaurants to make their food faster and providing quick and best customer

service by reducing the role of human beings.

Catherine Havasi ,et al, said that when artificial intelligence is used,

problems arise when we try to imitate human instinct or good judgment. Humans

underestimate the enormous amount of background data that is hard to replicate

in machines. The complexity and subjectivity of human emotions make it difficult

to simulate them (Zhihong Zeng et al., 2009; Laurence Devillers, Laurence

Vidrascu, Lori Lamel, 2005). Nevertheless, when using a machine learning

approach, the framework will process discussions that have been annotated by

humans, but these annotations are typically erratic.

According to earlier research, people's faith in robots is largely influenced

by their dependability and functionality (Tussyadiah et al., 2020). Furthermore,

there is a favorable correlation between tourists' intentions to employ robots and

their level of functionality and reliability (Tussyadiah et al., 2017). Respondents'

perceptions of the pros and cons of robots in comparison to human’s reveal how

they view a potential supplier of a specific tourism/hospitality service (a robot or a

human employee).

According to Ivanov et al., there is a positive correlation between the

attitudes toward the use of robots in hospitality industry and the perceived

benefits of having robots instead of human employees. The negative impact of

the perceived disadvantages of having robots is mitigated when the regression

models incorporate the general attitudes toward robots. Only a century after the

term "robot" was coined (NPR, 2011), robots accounted for a large portion of

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manufacturing in 2020 (Ross et al., 2018) and were becoming more and more

prevalent in the service sector (Belanche et al., 2020; Wirtz et al., 2018). Still, it's

only recently that robots have been utilized more frequently to serve hospitality

clients (Ivanov and Webster, 2019a). Automation technologies will inevitably find

their way into the tourist and hospitality industries due to technological

advancements (Mihelj et al., 2019) and demographic factors (Webster, 2021) that

restrict the amount of human labor available for service businesses. Here, we go

over the usage of robots in hospitality and clarify a few myths about how people

view the use of robots in food. Only a century after the term "robot" was coined

(NPR, 2011), robots accounted for a large portion of manufacturing in 2020 (Ross

et al., 2018) and were becoming more and more prevalent in the service sector

(Belanche et al., 2020; Wirtz et al., 2018). Still, it's only recently that robots have

been utilized more frequently to serve hospitality clients (Ivanov and Webster,

2019). Automation technologies will inevitably find their way into the tourist and

hospitality industries due to technological advancements (Mihelj et al., 2019) and

demographic factors (Webster, 2021) that restrict the amount of human labor

available for service businesses. Here, we go over the usage of robots in

hospitality and clarify a few myths about how people view the use of robots in

food. Taking the aforementioned into consideration, this study builds on three

major streams of literature to investigate the customer experience with robotic

restaurants: product level theory (Kotler & Keller, 2016), the experience economy

model (e.g., Pine & Gilmore, 2019), and technology readiness and acceptance

(e.g., Parasuraman, 2017).

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The main theory used in the study, the Product Level Theory (Kotler &

Keller, 2016), was initially presented in this part along with an explanation of its

applicability. Next, we talked about how different product and service levels of

robot applications may have distinct effects on diners' eating experiences. Lastly,

based on a thorough review of the literature, we presented and supported our

theories regarding how the use of robots at various product and service levels

may affect consumers' educational.

Additionally, since service encounters typically necessitate communication

between clients and providers, service robots are frequently programmed to

interact socially by speaking in human languages, for example, enabling people to

use their pre-existing interpersonal skills to communicate with robots (Seo et al.,

2017). According to Bartneck et al. (2020) and Patompak et al. (2019), human-

robot interaction can be defined as people's perception of meaningful

relationships and the quality of their interactions with robots. The nature of

human-robot interactions has been investigated in the literature that is currently

in publication (e.g., Lee et al., 2012; Nomura & Kanda, 2014, 2016); however, the

quality of customer-robot interactions has received very little attention. In this

study, customer-robot interaction quality is defined as the perceived level of

excellence regarding the interaction between a service robot and a customer

during service delivery (Choi et al., 2019). We adopt Brady and Cronin's (2021)

definition of interaction quality, which refers to customers' perceptions of the

quality of their interactions with service providers. Our study also aims to add a

new perspective to the existing literature by examining the antecedent role of

customer-robot interaction quality in affecting the relationships proposed in the

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technology acceptance model and the positive outcome of customer-robot

rapport. This is because it is unclear whether the quality of customer-robot

interaction can influence customers’ responses to service robots and

subsequently facilitate the building of customer-robot rapport, especially in a

restaurant setting. It is important to consider these factors because they are key

to building relationships with customers, which suggests the possibility that

customers’ willingness to build relationships with a service robot can be another

key aspect of customer technology acceptance to consider.

The study will specifically look into whether dining experiences with

service robots would impact customers' perceived technology readiness and

whether service robots implemented at different product or service levels may

affect customer dining experiences differently. The research will close a gap in the

literature on the subject of service robots, especially as it relates to product

design. The results of the study will have important ramifications for restaurant

owners that either employ or intend to use service robots in their operations.

REVIEW OF RELATED LITERATURE

Customer Satisfaction

Customer satisfaction is defined as an individual's experience of

satisfaction or dissatisfaction following a comparison of the product's

performance (results) to the expected performance (Kotler 2006:177, 2019).

When a customer's performance falls short of their expectations, they are

considered dissatisfied; when their performance meets their expectations, they

are considered satisfied; and when their performance surpasses their

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expectations, they are considered extremely satisfied or happy (Kotler 2006:177,

2019).

Performance Efficacy

According to Bandura, A. (2018), performance efficacy is about believing

you can do certain tasks well enough to achieve what you want. It's feeling

confident in your ability to handle different situations and perform tasks

effectively. When you have high performance efficacy, you're more likely to keep

trying, put in more effort, and achieve better results. Performance efficacy in the

restaurant industry has been examined in several studies. One study conducted in

India using Data Envelopment Analysis (DEA) found that only 65.58% of hospitality

and restaurant businesses were technically efficient, indicating a significant scope

for improvement. Another study in Port Harcourt, Rivers state, revealed that

there is a statistically significant relationship between employee work behavior

and organizational efficacy in fast food restaurants. In Slovenia, after the

implementation of fiscal cash registers, the average efficiency score of restaurant

SMEs was found to be 85%, suggesting room for improvement. A study in Istanbul

analyzed the performance of different types of restaurants using Principal

Component Analysis (PCA) and Categorical Data Envelopment Analysis (CAT-DEA)

and found that only three out of fifteen restaurants were efficient. Additionally, a

study examining restaurants over the period 2011-2014 found that operational

efficiency is affected by firm size and is linked to financial and non-financial

variables.

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Intrinsic Motivation

According to Deci, E. L., & Ryan, R. M. (2021), when someone is intrinsically

motivated they are driven by the satisfaction and joy of an activity, then rewards.

It's about finding meaning, interest or fulfillment in what they're doing. Intrinsic

motivation is about feeling a sense of independence, competence and

connection, with others while pursuing a task. This kind of motivation usually

results in lasting engagement, creativity and self-directed actions.

Intrinsic motivation in AI restaurants is an important factor for promoting

knowledge sharing and innovative behaviors among employees. The study found

that employees' intrinsic motivations influenced their knowledge-sharing

behaviors and knowledge application behaviors, which in turn influenced their

innovative behaviors. This suggests that when employees are intrinsically

motivated, they are more likely to share their knowledge with others and apply

their knowledge to actions. The study focused on employees in the food and

beverage sections of hotels, coffee shops, and restaurants. By understanding and

promoting intrinsic motivation, AI restaurants can create an environment that

encourages employees to actively engage in knowledge management and

innovative practices. (Lee and Kim)

Anthropomorphism

Anthropomorphism is a further aspect of the Artificial Intelligent Device

Use Acceptance (AIDUA) model's core evaluation (Kim and McGill, 2018). It

describes a phenomenon wherein people believe nonhuman entities to possess

human characteristics such as feelings, ideas, or physical attributes (Martin et al.,

2020). This depends on things like the general mood, the cultural makeup, and the

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physical region. Furthermore, opinions differ on the extent to which

anthropomorphism affects a customer's propensity to accept Artificial

Intelligence (AI) technology. The uncanny valley idea states that the more

humanoid a robot is, the more receptive humans will be to it. But eventually,

individuals will lose their emotional attachment to robots when they discover that

what at first seems real is actually artificial. Rather, people will perceive them as

strange, uncomfortable, or eerie (Murphy et al., 2021).

Studies have shown that robot anthropomorphism plays a moderating role

in the relationship between AI robot service quality and customer engagement,

ultimately leading to better acceptance of AI service robots in restaurants.

Additionally, anthropomorphism enhances the relationship between social

cognition and psychological ownership, which in turn influences customer

responses such as attitudes and revisiting intentions. Furthermore, the design of

robotic chefs with anthropomorphic features has been found to positively affect

customers' food quality prediction, highlighting the importance of promoting

anthropomorphic elements in advertisements for restaurants featuring robotic

chefs. These findings suggest that incorporating anthropomorphism in AI

restaurant settings can have positive effects on customer engagement,

acceptance, and responses.

Social influence

According to the AIDU model, when consumers use AI technology in

interactions related to hospitality services, social impact is the main factor

influencing their decisions. As such, people's decisions on the usage of AI tools are

influenced by the customs, attitudes, and behaviors of their social circles (Lu et

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al., 2019). Consumer perceptions of AI products are positively impacted by this

positive social influence (Lin et al., 2020). Furthermore, given their wider societal

characteristics, customers' performance expectations with regard to the use of AI

devices in hotel services may surface (Ameen et al., 2021). Customers are more

likely to choose to use AI devices, for example, if their social network is a positive

consideration when assessing the application of AI technologies in hospitality

service interactions. Furthermore, customers in societies where there is a strong

tendency to avoid ambiguity are inclined to depend on the viewpoint and

cognitive beliefs of their peer group.

Cultural differences are a significant factor in determining how individuals

or groups view this technology. Nonetheless, researchers Althuizen (2018) and

Jahan et al. (2020) claim that when consumers lack the knowledge needed to

make wise selections, they turn to their social networks for guidance. Because AI

tools and related technology use are relatively new, most clients in the South

Asian hospitality and tourism business, especially in Bangladesh, might not have

the knowledge and skills to decide whether or not it is appropriate to accept and

use AI services. Nonetheless, a lot of experts think that a community's beliefs,

opinions, and attitudes have a big influence on how each individual member of

the community interprets and responds to AI services (Gursoy et al., 2019).

The consumer is expected to appreciate recommendations from social

groups about the use of AI devices in the delivery of hospitality services because

of the different aspects of these services (Chi et al., 2020). Customers would feel

less effort when using AI tools during service encounters if their social network

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had a positive attitude toward user-friendly AI equipment. As a result, the

previous conversation can be used to develop the following hypothesis

Facilitating Conditions

According to Davis, F. D. (2020), facilitating conditions are like the helping

hands or favorable circumstances that make it easier for people to do something

or reach their goals. These could be things like having the right tools, support

from friends or colleagues, or a conducive environment. Essentially, they're the

factors that smooth the path and increase the chances of success.

Facilitating condition plays a significant role in the implementation and

continuance of AI systems in restaurants. The literature highlights the importance

of facilitating condition in enhancing efficiency and user intention to continue

using AI-based systems in private higher learning institutions. AI technologies

such as chatbots, virtual assistants, and predictive analytics are being utilized in

the restaurant industry to increase productivity, streamline processes, and

improve customer satisfaction. These AI systems assist in creating personalized

menus based on consumer preferences and purchase history, collecting

purchases, responding to inquiries, and making tailored recommendations. The

introduction of humanoid robots in restaurants is also being explored, with

studies analyzing people's opinions on human-robot interaction in the dining

experience. Overall, facilitating condition is crucial for the successful

implementation and acceptance of AI technologies in the restaurant industry.

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CONCEPTUAL FRAMEWORK

Below is the conceptual framework depicting research records, along with

associated models and dimensions of quick service restaurant using artificial

intelligence, aligned with the Wang model (2012).

Performance Efficiency
THE IMPACT OF
Intrinsic motivation Service Quality SERVICE QUALITY
Customer Satisfaction USING ARTIFICIAL
Anthropomorphism
INTELLIGENCE IN
Social influence QUICK SERVICE
Figure 1: Conceptual model of research
RESTAURANT
Facilitating conditions

This model is visualization of the impact of service quality using artificial

intelligence in quick service restaurant proposed by the research framework. The

demographic profile, sex and name of the quick service restaurant, as well as the

technology competence of the customer show the acceptance of artificial

intelligence`s performance efficiency, anthropomorphism, social influence,

facilitating conditions and customer satisfaction. The satisfaction of the

customers will verify through answering questionnaire that is relevant to the topic

of the research and focuses on the real-life experiences of the respondents. A

survey questionnaire will serve to investigate the effects of self-service

technologies as well as customer experiences through the fast food restaurants.

STATEMENT OF THE PROBLEM

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This study seeks to determine the sentiments of respondents regarding

the service quality of artificial intelligence and their level of customer satisfaction.

It endeavors to address the following:

1. How may the demographic profile of the respondents be described in

terms of?

1.1 Sex

1.2 Age

1.2 Name of the quick service restaurant

1.3 Technology competence

2. How may the service quality and artificial intelligence be described in terms

of?

2.1 Performance efficacy

2.2 Intrinsic motivation

2.3 Anthropomorphism

2.4 Social influence

2.5 Facilitating Conditions

3. Is there significant relationship between respondent profile and service

quality and artificial intelligence?

HYPHOTHESIS

H1. There is a significant relationship between respondent profile and

service quality and artificial intelligence.

SIGNIFICANCE OF THE STUDY

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The following may benefit from this research:

Fast-food staff. This could potentially improve organizational efficiency by

directing attention to areas of higher performance.

Customer. Customers utilizing self-service technology to make purchases

via artificial intelligence are immediately satisfied with the technology.

Future researchers. The discoveries of this study can serve as a blueprint

for future researchers, utilizing the information, components, and revelations

outlined in this paper.

SCOPE AND DELIMITATION

The aim of this study is to ascertain the impact of service quality using

artificial intelligence in quick service restaurant. In order to measure a

phenomenon and make a conclusion, quantitative methods use formal processes.

This approach is best for achieving the goals of this study since it uses numerical

data to measure the phenomenon.

(Harrison et al., 2020).

This study seeks to determine how customers feel about the service

quality of artificial intelligence and how satisfied they are with it. The researchers

set the boundaries for the location when executing the survey.

DEFINITION OF TERMS

To facilitate comprehensive understanding of the research endeavor, the

following terms was used conceptually and operationally:

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Service Quality - According to berry, L. L., Zeithaml, V. A., and

Parasuraman, A. (2018). The extent to which a service fulfills or goes beyond the

expectations of the client is referred to as service quality. It involves a number of

elements, including tangibles, certainty, responsiveness, empathy, and

dependability. Customer loyalty and satisfaction are directly correlated with

service quality.

Artificial intelligence (AI) - as stated by Russell, S., & Norvig, P. (2016), the

term artificial intelligence (AI) describes how machines that have been taught to

think and behave like humans can simulate human intelligence. Artificial

Intelligence (AI) is the application of several techniques, including robotics,

computer vision, natural language processing, and machine learning, to make

robots capable of activities that normally require human intelligence.

Quick Service - According to the National Restaurant Association, quick

service is generally used to describe a kind of restaurant or food facility that is

renowned for its prompt and effective service; rapid-serve or fast food chains are

frequently connected with this term. These places a high value on serving clients

quickly; often, they provide pre-made or rapidly assembled meals that patrons can

take away right away.

Customer Satisfaction - According to Oliver, Robert L. (2018), customer

satisfaction is the degree to which clients are happy with the goods, services, or

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encounters they have with a company. It represents how consumers feel about a

specific product or service in terms of its quality, value, and overall experience.

Performance Efficacy - In line with Mackenzie and Tan (2019), performance

efficacy denotes the capacity of a system, product, or procedure to efficiently and

effectively accomplish its intended aims or objectives. This entails the degree to

which desired results are attained within defined limitations like time, resources,

or quality criteria. Essentially, it gauges the proficiency of a specific entity in

delivering the sought-after outcomes.

Intrinsic Motivation – According to Ryan, R. M. (2018), the term "intrinsic

motivation" describes the inner desire or need to do something for its own sake

as opposed to seeking out benefits or incentives from other sources. It has to do

with one's own fulfillment, fun, or interest in the activity itself.

Anthropomorphism - According to Epley (2020), anthropomorphism is the

idea that non-human entities, such as animals, objects, or natural occurrences,

have human-like traits, feelings, or intentions. It entails understanding or

characterizing these things in terms of characteristics or actions of people.

Social Influence - According to Cialdini (2018), social influence is the

process through which people or groups have an impact on the attitudes, actions,

or beliefs of others. It can happen via a number of strategies, including

socialization, persuasion, obedience, and compliance.

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Facilitating Conditions - According to Venkatesh (2017), facilitating

conditions are elements or situations that make it simpler for people to carry out

a specific behavior or action. These prerequisites may include having access to

systems of support, information, tools, and resources that help people get

beyond challenges and accomplish their goals.

ACRONYMS
AI - Artificial Intelligence
QSR – Quick Service Restaurant
AIDUA – Artificial Intelligent Device Use Acceptance

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Chapter 2

RESEARCH DESIGN

The researcher employed a descriptive method that aligned with the

intended objective, which was to assess the feasibility of service quality using

artificial intelligence in quick service restaurant.

A recommended study method for completing the research involves

utilizing quantitative analysis to gather numerical data and then categorizing

them into groups or describing specific phenomena using well-defined

investigative strategies, (Mitchell,2015). To ensure that every member of the

population has an equal chance of being picked, random sampling is employed in

this study to choose a sample from a bigger population.

RESPONDENTS OF THE STUDY

The research project encompassed 384 participants from the customer

base of Jollibee Marquee Mall in Angeles City, Pampanga. Rao Soft methodology

was utilized to ascertain the precise number of respondents within the broader

population of Angeles City, Pampanga. In order to ensure the accessibility and

availability of data, the researchers opted to engage the patrons of Jollibee

Marquee Mall as participants in the study. This decision was made based on the

necessity of maintaining the study's continuity, with accessibility to data and

information being primary considerations in participant selection.

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RESEARCH INSTRUMENT

The researchers concentrated on fast-food chains such as Jollibee, which

employ artificial intelligence, employing a quantitative research method. They

administered a survey using a questionnaire split into four pages and two

sections, commencing with a letter outlining the survey's objective.

The first part of the questionnaire collected socio-demographic data such

as age, gender, and how do they often visit quick service restaurant such as

Jollibee, while the second part prompted respondents to evaluate elements like

technology competence, Performance Efficacy, Intrinsic Motivation,

Anthropomorphism, Social Influence, and Facilitating Conditions by marking

checkboxes provided.

ETHICAL CONSIDERATION

Respondents were informed that their information would solely be used

for the study, kept confidential, and utilized exclusively for scientific research

purposes. Clear and comprehensive instructions were provided initially to ensure

respondents were fully aware of their participation.

In Gomez et al.'s (2022) study on Customer Satisfaction and Technology

Acceptance Towards Self-Ordering Kiosks: A Cross-Sectional Study, participants

provided informed consent before engaging in the survey process. Additionally,

the survey upheld the privacy and confidentiality of the gathered data. Consent

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from informed participants included considerations such as the research purpose,

respondent data usage, participation type, and privacy protection.

DATA COLLECTION

To obtain further information about the impact of artificial intelligence on

service quality in quick service restaurants, a survey questionnaire was used for

data gathering. The first case involved arranging with the respondents for data

collecting to occur in their place of employment. The research consultants

checked the accuracy of assertions in a survey questionnaire that the researchers

had produced. A permission to conduct the study was also needed before the

questionnaire could be distributed. The respondents' distribution of the

questionnaire was the next step in gathering the required data. Once all of the

questionnaire responses had been gathered, the statistician computed them all,

and the results were suitably assessed.

STATISTICAL TREATMENT OF DATA

To facilitate the systematic flow of the data analysis, the following statistical

tools were utilized:

1. In gathering the descriptive rating of Service Quality and Artificial

Intelligence in Quick Service Restaurant, the weighted mean computation

was used.

2. To determine the assessment of the factors that were considered in the

description of quick QSR on Service Quality and Artificial Intelligence, a

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four-point Likert Scale was applied. This was used in analyzing the

attitudes of options of the respondents, which were described using the

five-point scale value and the conversion on the qualified weighted mean

in to a descriptive rating given below.

Scale Value Range Interval Description

4 3.26–4.00 Strongly Agree

3 2.51–3.25 Agree

2 1.76–2.50 Disagree

1 1.00–1.75 Strongly Disagree

Formula

Pearson-r Correlation

= correlation coefficient

= values of the x-variable in a sample

= mean of the values of the x-variable

= values of the y-variable in a sample

= mean of the values of the y-variable

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