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Received 8 October 2008 Revised 17 March 2009 23 June 2009 Accepted 1 August 2009

Relationships among hedonic and utilitarian values, satisfaction and behavioral intentions in the fast-casual restaurant industry
Kisang Ryu
Hotel, Restaurant and Tourism Administration, University of New Orleans, New Orleans, Louisiana, USA

Heesup Han
Department of Tourism Management, College of Business Administration, Dong-A University, Busan, South Korea, and

Soocheong (Shawn) Jang

Department 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 of the previous literature. Questionnaires were collected in classroom settings at a mid-western university in the USA. Anderson and Gerbings two-step approach was employed to assess the measurement and structural models. Findings The ndings indicate that hedonic and utilitarian values signicantly inuence customer satisfaction, and customer satisfaction has a signicant inuence on behavioral intentions. Utilitarian value shows a greater inuence on both customer satisfaction and behavioral intention than does hedonic value. This study also reveals that customer satisfaction acts as a partial mediator in the link between hedonic/utilitarian value and behavioral intentions. Research limitations/implications Study ndings will greatly help hospitality researchers and practitioners understand the roles of hedonic and utilitarian values in customer satisfaction and behavioral intentions in the fast-casual restaurant industry. Originality/value The paper is the rst to explore the relationships among hedonic and utilitarian values and their effect on customer satisfaction and behavioral intentions in the fast-casual restaurant industry 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
International Journal of Contemporary Hospitality Management Vol. 22 No. 3, 2010 pp. 416-432 q Emerald Group Publishing Limited 0959-6119 DOI 10.1108/09596111011035981

Introduction Researchers have long focused on the utilitarian aspects of consumer behavior, which has often been characterized as task-related and rational (Babin et al., 1994; Batra and
This study was supported by research funds from Dong-A University.

Ahtola, 19901). However, explanations for traditional product acquisition may not fully reect the totality of consumer behavior. Some scholars have shown new interest in the hedonic aspects of consumption behavior, particularly as researchers recognize the potential importance of its entertainment and emotional worth (Arnold and Reynolds, 2003; Babin et al., 1994; Wakeeld and Baker, 1998). Hedonic consumption has been considered pleasure-oriented consumption that is primarily motivated by the desire for sensual pleasure, fantasy, and fun (e.g. vacationing in Las Vegas) (Hirschman and Holbrook, 1982), while utilitarian consumption is described as goal-oriented consumption that is mainly driven by the desire to ll a basic need or to accomplish a functional task (e.g. the consumption of laundry detergent to wash clothes). Not all consumption experiences in the restaurant industry evoke the same emotional 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 highly value the utilitarian aspects of necessary consumption, while highly valuing the hedonic aspects of frivolous consumption. Hedonic value is more subjective and personal than its utilitarian counterpart because it stems from a need for fun and playfulness rather than from a need to engage in task completion. On the basis of this observation, a distinction should be made between two types of consumption that differ in terms of perceived value. Therefore, measures accounting for both hedonic and utilitarian service values are needed. A fast-casual restaurant is a restaurant market niche that is similar to a fast-food restaurant in that it does not offer most table services, but promises a somewhat higher quality of foods and atmosphere more consistent with the casual dining segment. As consumers are increasingly interested in higher-quality food, healthier food choices, better physical eating conditions, and better customer service, the fast-casual dining segment, which falls between the quick service and full service segments, has been a contemporary trend in the foodservice industry (Anderson, 2003; Sloan, 2002; Tillotson, 2003). According to the National Restaurant Associations 2008 industry outlook, the success of the fast-casual restaurants should continue to grow for at least the next year. Approximately one-third of operators say their customers are looking for a wider range of food choices from restaurants, while 19 percent say customers are seeking healthy alternatives. Three out of four consumers also indicated that they are trying to eat healthier in restaurants now than they were two years ago. In addition, the importance of food quality was mentioned by quick-serve operators. We must emphasize that despite the increasing importance of the fast-casual restaurant sector in the restaurant industry, particularly in the quick service restaurant segment, researchers have paid scant attention to gaining a better understanding of consumers behavior in this fast-growing segment. There is little doubt that dining experiences can indeed produce both utilitarian and hedonic value, and some dining experiences are more pleasurable than others. However, the role and relative importance of instrumental characteristics versus hedonic aspects will likely vary across contexts. Therefore, it is crucial to understand how consumers perceived value varies across different service contexts to aims for a holistic understanding of their perceptions 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 value hedonic aspects (e.g. a more upscale physical environment compared to that in fast food restaurants), whereas others might primarily value the utilitarian aspects of dining experiences (e.g. healthier menu items compared to those found in fast food restaurants). Specically, there has been no investigation of whether customers in this fast-casual restaurant segment are primarily driven by emotional or practical value. This study aims to ll in these gaps. Our purpose, therefore, was to explore the relationships among consumer service value (hedonic and utilitarian values), customer satisfaction and behavioral intention in the fast-casual restaurant segment. The specic objectives of this study were to: . investigate the relationships between customer values regarding eating-out and the importance of fast-casual restaurant attributes; . examine the relative importance of hedonic and utilitarian values on customer satisfaction and subsequent behavioral intention; and . investigate the mediating role of customer satisfaction between customers perceived value and behavioral intention. Theoretical background Utilitarian value and hedonic value The concept of value has proved to be an enduring endeavor for a wide range of philosophers and researchers (Babin et al., 1994; Zeithaml, 1988). Researchers are continually seeking a more complete understanding of consumer value. An extensive literature review has established that perceived value has been conceptualized as what consumers get for what they give, or the consumers overall evaluation of the utility of a product or service provision based on perceptions of what one receives for what one gives (Baker et al., 1994; Zeithaml, 1988). Within this perspective, Zeithaml (1988, p. 13) identied 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 shoppings utilitarian perspective (Babin et al., 1994). Utilitarian consumer behavior is described as a functional or task-related standpoint and may be thought of as work (Babin et al., 1994; Batra and Ahtola, 1990). However, other researchers have argued that shopping value should account 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 reect the total value of a consumption experience. If we assume consumption activities are evaluated exclusively on the benets of goods or services acquired, we fail to recognize numerous intangible and emotional costs and benets that should be examined before we can understand the consumption experience fully (Babin et al., 1994; Lim and Ang, 2008). Extant research has established that consumption can take place for hedonic or utilitarian reasons (Hirschman and Holbrook, 1982; Lim and Ang, 2008). Hirschman and Holbrook (1982) described consumers as either problem solvers or in terms of consumers seeking fun, fantasy, arousal, sensory stimulation, and enjoyment. This dichotomy has been represented in consumer behavior studies by the themes of consumption behavior as work (Babin et al., 1994; Fischer and Arnold, 1990; Sherry

et al., 1993) versus the more enjoyable aspects of consumption behavior as fun (Babin et al., 1994; Lageat et al., 2003). Consumer value classications are represented as the dichotomization of utilitarian and 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; Voss et al., 2003). Babin et al. (1994) introduced two types of shopping values by developing a scale measuring both hedonic and utilitarian values obtained from the pervasive consumption experience of shopping. The researchers concluded that distinct hedonic and utilitarian shopping value dimensions exist and are related to a number of important consumption variables. Babin et al. (1994) proposed that consumption activities may produce both hedonic and utilitarian outcomes. They describe utilitarian value (p. 645) as resulting from some type of conscious pursuit of an intended consequence; thus, it is task-oriented and rational, and may be thought of as work. Utilitarian evaluation is traditionally functional, instrumental and cognitive in nature. It primarily involves the fulllment of instrumental expectations consumers may have for the product or service and are a means to an end often equated with rational motives of time, place and possession needs. In the utilitarian view, consumers are concerned with purchasing products in an efcient 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 the hedonic side of consumers evaluations of their consumption experience (Arnold and Reynolds, 2003). Compared to its utilitarian aspects, values festive side has gained less attention in previous studies. Recent marketing research is beginning to focus on the hedonic aspects of the consumption experience, such as the affective response of excitement (OCurry and Strahilevitz, 2001; Wakeeld and Baker, 1998). Similar to Hirschman and Holbrook (1982) assertions, hedonic value can be dened as being more subjective and personal than its utilitarian counterpart and resulting more from fun and playfulness than from task completion (Babin et al., 1994, p. 646). Hedonic evaluation is more affective than cognitive in nature. Hedonic values are non-instrumental, experiential, and affective and often related to non-tangible retailer/product attributes. The adventurous nature of hedonic value reects shoppings entertainment and emotional potential resulting from the fun and play of the experience versus the achievement of any pre-specied goal (Hirschman and Holbrook, 1982; Babin et al., 1994). Clearly, utilitarian and hedonic values are considered fundamental to understanding consumers evaluations of the consumption experience because they maintain a basic underlying presence across consumption phenomena (Babin et al., 1994; Bridges and Florsheim, 2008; Chandon et al., 2000; Childers et al., 2001; Eroglu et al., 2005; Hirschman and Holbrook, 1982; Homer, 2008; Jones et al., 2006). Taken together, these two dimensions indicate an assessment of the overall worth of consumption activity, representing a more comprehensive picture of the value. Thus, in this study we adopted this two-dimensional conceptualization of consumer value: The rst dimension is a utilitarian dimension resulting from work aspects, and the second is 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 intentions Numerous researchers have veried the signicant relationship among value, customer satisfaction and behavioral intention in business and hospitality elds (Colgate and Lang, 2001; Fornell et al., 1996; Hallowell, 1996; Taylor, 1997). Hunt (1977) dened customer satisfaction as an evaluation rendered that the (product) experience was at least as good as it was supposed to be (p. 459). Similarly, Oliver (1996) described it as the consumers fulllment response. It is a judgment that a product or service feature, or the product or service itself, provided (or is providing) a pleasurable level of consumption-related fulllment, including levels of under- or over-fulllment (p. 13). Further, Oliver (1996) dened behavioral intentions as an afrmed likelihood to engage in a certain behavior. Based on this denition, behavioral intention in this study may be described as a stated likelihood to return to the restaurant and to recommend it to family, friends, and others in the future. In recent years, perceived value has gained special attention as an important construct in predicting consumer buying behavior (Anderson and Srinivasan, 2003). Many researchers agree that value has a signicant inuence on customer satisfaction and behavioral intentions (Andreassen and Lindestad, 1998; Chen and Tsai, 2007; Lee et al., 2007; McDougall and Levesque, 2000; Patterson and Spreng, 1997; Pura, 2005). Patterson and Spreng (1997) found that customers perceptions of value are a positive and direct antecedent of customer satisfaction in a service context. Andreassen and Lindestad (1998) found that value has a positive impact on customer satisfaction in developing a customer loyalty model in complex service contexts. Additionally, in investigating the relationships among service quality, perceived value, satisfaction, and behavioral intentions, McDougall and Levesque (2000) found that perceived service quality and value were the most signicant drivers of customer satisfaction across four service sectors, such as restaurants, auto service, hairstylists, and dental services. Pura (2005) analyzed the direct effect of customer perceptions of value on attitudinal and behavioral components of loyalty, such as commitment and behavioral intentions in a service context. His ndings suggested that customer-perceived value signicantly inuences behavioral intentions and commitment. Many researchers have provided empirical evidence for a positive relationship between customer satisfaction and behavioral intentions, such as repurchase and word-of-mouth intentions. The obvious reason to satisfy customers is to acquire repeat business and positive word of mouth, thereby improving a chance of rm protability (Barsky, 1992). Anderson and Sullivan (1993) found that a high level of customer satisfaction decreases the perceived benets of switching service providers, thereby increasing customer repurchase intentions. Getty and Thompson (1994) examined the role of satisfaction in explaining behavioral intention. Their ndings indicated that high levels of satisfaction increase customers intentions to repurchase and recommend the product. In contrast, dissatised customers are more likely to switch, complain, or spread negative word-of-mouth (Oliver, 1996). Further, Kivela et al. (1999) found that dining satisfaction signicantly inuences post-dining behavioral intentions. In assessing the role of intentions as a link between satisfaction and repatronizing behavior in a restaurant setting, Soderlund and Ohman (2005) also found that customer satisfaction is signicantly related to two specic intention constructs: intentions as expectations and intentions as wants. In upscale restaurant settings, Han and Ryu (2007) found that improving customer satisfaction levels is essential to increasing revisit and recommendation intentions. Likewise, in investigating the importance of food quality in

mid- to upper-scale restaurants, Namkung and Jang (2007) also evidenced the signicant impact of customer satisfaction on behavioral intentions, including revisit, recommendation, and positive word-of-mouth intentions. These ndings all support the signicant link between customer satisfaction and behavioral intentions. Indeed, Babin et al. (1994) showed that both the hedonic and utilitarian value obtained from a shopping experience should inuence customer satisfaction. They empirically demonstrated a strong degree of positive correlations of hedonic value (r 0:51, p , 0.001) and utilitarian value (r 0:53, p , 0.001) with satisfaction. In addition, Eroglu et al. (2005) conducted two studies to investigate whether shopping values are affected by perceived retail crowding, and whether shopping values mediate the relationship between perceived retail crowding and shopping satisfaction. Results of the second study revealed that the impact of perceived crowding on shopping value is mediated by emotions experienced by the shopper, using a sample of college students. The emotions and shopping value reactions, in turn, mediate the effect of spatial crowding on shopping satisfaction. Both hedonic value (b 0:34, p , 0.01) and utilitarian value (b 0:14, p , 0.01) signicantly inuenced customer satisfaction. It is also worth noting that hedonic value showed a stronger inuence on customer satisfaction than did utilitarian value. Babin et al. (1994) conducted the research to extend the notions of utilitarian and hedonic value to account for outcomes of consumer service encounters using a sample of Korean restaurant consumers at family-style chain restaurants. The study supported the adequacy of using their scale to account for utilitarian and hedonic value, the role of functional and affective service environment components in shaping consumer satisfaction and word-of-mouth intentions (WOM). In particular, structural equation modeling showed that hedonic and utilitarian value positively affected both customer satisfaction and WOM. Interestingly, the study found mixed strengths in the relative importance of hedonic value and utilitarian value on customer satisfaction and WOM. Hedonic value (b 0:25) had a stronger impact on customer satisfaction than utilitarian value (b 0:18), whereas hedonic value (b 0:14) had a smaller inuence on WOM than utilitarian value (b 0:25). Finally, customer satisfaction positively affected WOM. Based on the issues discussed above, several points are apparent. There is ample evidence of a signicant causal relationship among consumer service value (hedonic and utilitarian value), customer satisfaction, and behavioral intentions. With the perceived hedonic and utilitarian values of dining experience, perceived utilitarian value is likely to have a stronger impact on both customer satisfaction and behavioral intentions than hedonic value since consumers in this restaurant sector are still mainly viewed as a part of the quick service sector by many practitioners. Based on the previous discussion, the proposed hypotheses can be summarized in the following hypotheses. This two-factor (utilitarian versus hedonic) approach serves as the basis for the hypotheses tested here: H1. H1a. H1b. Perceived value has a positive impact on customer satisfaction in the fast-casual restaurant segment. Hedonic value of dining experiences has a positive impact on customer satisfaction. Utilitarian value of dining experiences has a positive impact on customer satisfaction.

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H2. H2a. H2b. H3. H4.

Perceived value has a positive impact on behavioral intentions in the fast-casual restaurant segment. Hedonic value of dining experiences has a positive impact on behavioral intentions. Utilitarian value of dining experiences has a positive impact on behavioral intentions. Customer satisfaction has a positive impact on behavioral intentions in the fast-casual restaurant segment. The perceived utilitarian value has a stronger inuence on customer satisfaction than perceived hedonic value in the fast-casual restaurant segment. The perceived utilitarian value has a stronger inuence on behavioral intentions than perceived hedonic value in the fast-casual restaurant segment.

422

H5.

Methodology Questionnaire items were developed based on those used in previous studies (Babin et al., 1994; Batra and Ahtola, 1990; Donovan and Rossiter, 1982; Park, 2004) and a focus group session was conducted by 6 graduate students to assess consumer values regarding eating-out, customer satisfaction, and behavioral intentions. Additionally, the survey was carefully reviewed by professors familiar with the topic area and a fast-casual restaurant manager. Before the main study, through a convenience sampling 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-casual restaurant to evaluate whether the instrument could be clearly understood by respondents and ensure its reliability. A small incentive (e.g. a free drink coupon) was offered to survey participants. Cronbachs alpha coefcients ranged higher than 0.70, indicating an acceptable level of reliability. No modications were needed on the survey 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, and behavioral intention (Bigne et al., 2004; Donovan and Rossiter, 1982). Multi-item scales were used to measure the study constructs. Table I displays the questions used in this study. Respondents were asked to rate 16 items using a seven-point Likert type scale (1 extremely disagree; 7 extremely agree). The measurement of consumer values regarding eating-out was assessed using ve hedonic and four utilitarian items. For example, one measure of hedonic value was eating-out at the fast-casual restaurant was fun and pleasant. One measure of utilitarian value was eating-out at a fast-casual restaurant was pragmatic and economical. Customer satisfaction was assessed using four items. For example, I have really enjoyed myself at the fast-casual restaurant. Respondents were asked to provide answers to three statements to assess behavioral intention. For instance, I would like to come back to the fast-casual restaurant in the future.

Questions Hedonic value I ate out at a fast-casual restaurant since I could have good feelings Eating-out at the fast-casual restaurant was fun and pleasant The dining experience at the fast-casual restaurant was truly a joy During the dining experience at the fast-casual restaurant, I felt the excitement of searching food Although the cost was higher than fast-food restaurants, I liked to eat out at the better place Eating-out at the fast-casual restaurant was convenient Eating-out at a fast-casual restaurant was pragmatic and economical It was a waste of money when eating-out at the fastcasual restaurant Service at the fast-casual restaurant was quick I was pleased to dine in at the fast-casual restaurant The overall feeling I got from the fast-casual restaurant was satised The overall feeling I got from the fast-casual restaurant put me in a good mood I really enjoyed myself at the fast-casual restaurant I would like to come back to the fast-casual restaurant in the future I would recommend the fast-casual restaurant to my friends or others I would more frequently visit the fast-casual restaurant

Mean 4.40 5.40 4.96 4.13 5.40 5.22 4.62 2.66 5.17 5.41 5.50 5.13 5.21 5.84 5.86 5.11

SD 1.22 1.06 1.14 1.36 1.32 1.07 1.12 1.39 1.07 1.09 1.06 1.22 1.14 1.17 1.14 1.27

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Utilitarian value

Customer satisfaction

Behavioral intentions

Note: SD Standard deviation

Table I. Descriptive information for questions used in the study

A self-administered questionnaire was distributed and collected in classroom settings at a mid-western university in the US in 2007. Although a student sample is often viewed with suspicion due to their inexperience as consumers compared with other adult subjects, they are at least as likely as other adults to have dining experiences in the fast-casual restaurant segment. In addition, student subjects have been widely and successfully utilized in previous studies in other academic disciplines (Arnold and Reynolds, 2003; Babin et al., 1994; Bridges and Florsheim, 2008; Childers et al., 2001; Eroglu et al., 2005; Lim and Ang, 2008; OCurry and Strahilevitz, 2001; Voss et al., 2003). Therefore, college students were asked to participate in this research. To qualify for participation, a student had to have been a customer at a fast-casual restaurant within the past month. The procedure began with an explanation of the fast-casual restaurant segment and the objectives of the study. Participants were then asked to provide answers to questions. Students who participated in the survey received an extra course credit for the participation. A total of 400 responses were collected. After deleting incomplete responses, 395 responses were nally utilized in data analysis.

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Data were analyzed using the two-step procedure suggested by Anderson and Gerbing (1988). First, a conrmatory factor analysis (CFA) was performed to identify whether the measurement variables reliably reected the hypothesized latent variables. Second, a structural equation modeling (SEM) with latent variables via AMOS 5 was tested to determine the adequacy of the constructs of the model and test the hypotheses. The hedonic value and utilitarian value were predictor variables and customer satisfaction and behavioral intention were criterion variables in the analysis. In addition, the Sobel test was used to test the mediating role of customer satisfaction for the linkage between hedonic and/or utilitarian value and behavioral intentions in a SEM model. Results Sample prole Descriptive statistics for the sample showed that 47.3 percent of respondents were male and 52.70 percent were female. While approximately 7.6 percent of participants stated that they had visited fast-casual restaurants fewer than three times over the past three months, 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 week over the past three months. Data screening Before analyzing the data, data screening was conducted using SPSS. With the use of a p , 0.001 criterion for Mahalanobis distance, ve multivariate outliers were detected (Mahalanobiss D (19) . 43.82, p , 0.001). These extreme outliers were removed because they could have inappropriately affected the overall results, threatening the reliability or validity of a scale. In addition, results of assumption evaluations showed that some variables were signicantly and negatively skewed. Thus, these variables were transformed using a square root transformation to reduce skewness and improve normality. As a next step, a reliability test was conducted to assess the consistency of the measurements. This was used to assess the internal homogeneity existing among the items scale in this study. Coefcient alphas values for the study constructs ranged from 0.70 to 0.91. Each construct yielded the following reliabilities: hedonic value 0.80, utilitarian value 0.70, customer satisfaction 0.91, and behavioral intention 0.89. These values were above the 0.70 level suggested by Nunnally (1978), and thus indicating internal consistency. Measurement model Prior to conducting structural equation modeling (SEM), a measurement model was assessed using AMOS 5. The items were subjected to a conrmatory factor analysis (CFA) with a four-factor measurement model using maximum likelihood estimation. The t statistics showed that the measurement model t the data reasonably well. However, the chi-square for this model was signicant (x 2 256:28, df 97, p , 0.001), indicating a poor model. However, since chi-square is N-1 times the minimum value of the t function, the chi-square test tends to be large in large samples ( Joreskog, 1993, p. 309). The x 2/df value of 2.64 was within an acceptable range from 2 to 5 (Marsh and Hocevar, 1988). Additionally, other t indices were acceptable (RMSEA 0:070; CFI 0:99; NFI 0:99). However, one items

standardized factor loading value for the utilitarian value did not meet the minimum criterion of 0.40, so this item (i.e. It was a waste of money when eating-out at the fast-casual restaurant) was removed to increase reliability and decrease measurement error (Ford et al., 1986; Fornell and Larcker, 1981; Nunnally, 1978). After this item was excluded, the remaining 15 items were subjected to CFA. Model t of CFA was acceptable (x 2 210:85, df 83, p , 0.001; RMSEA 0:068; CFI 0:99; NFI 0:99). The model was signicantly improved because a chi-square difference between the rst and second CFA models was signicant (Dx 2 45:43, Ddf 14, p , 0.001). All standardized factor loadings emerged fairly high, exceeding the minimum criterion of 0.40 (Ford et al., 1986). Composite reliability for each construct was calculated. As shown in Table II, all constructs had desirable levels of composite reliability, ranging from 0.69 to 0.91 (Bagozzi and Yi, 1988). Fornell and Larckers (1981) index of average variance extracted (AVE) was assessed. While the AVE value for the utilitarian value was a bit below 0.50, AVE values for hedonic value, customer satisfaction, and behavioral intention were above the recommended level of 0.50, generally supporting convergent validity (Fornell and Larcker, 1981). In addition, the AVE values were generally greater than the shared variance among pairs of constructs (the square of their correlations), revealing evidence of discriminant validity (Fornell and Larcker, 1981). Structural model A structural analysis was conducted using the maximum likelihood estimation method. The results from the structural model are presented in Table III. Overall, the t indices indicated an adequate model t (x 2 210:85, df 83, p , 0.001; RMSEA 0:068; CFI 0:99; NFI 0:99). The degree of variance explained by hedonic and utilitarian values for customer satisfaction was 0.68, and the variance-explained estimate for behavioral intention by three antecedents was 0.79. The structural diagram for the proposed model is presented in Figure 1. As shown in Figure 1 and Table III, the relationship between hedonic value and customer satisfaction was signicant (coefcient 0.30, t 3:65, p , 0.01), and the linkage between utilitarian value and customer satisfaction was also signicant (coefcient 0.59; t 6:31, p , 0.01), supporting H1a and H1b. These ndings indicate that both hedonic and utilitarian values are signicant predictors of customer satisfaction. The effect of utilitarian value on customer satisfaction was greater than
Hedonic value 1.00 0.67 (0.45) 0.69 (0.48) 0.57 (0.32) 1.00 0.79 (0.62) 0.78 (0.61) 1.00 0.87 (0.76) 1.00 Utilitarian value Customer satisfaction Behavioral intention Composite reliability 0.82 0.69 0.90 0.91

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Measure 1. Hedonic value 2. Utilitarian value 3. Customer satisfaction 4. Behavioral intention

AVE 0.50 0.43 0.70 0.77

2

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

Table II. Measure correlations, the squared correlations, and AVE

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the impact of hedonic value (utilitarian value: coefcient 0.59, t 6:31 vs hedonic value: coefcient 0.30, t 3:65), supporting H4. Hedonic and utilitarian values were also found to have signicant relationships with behavioral intentions, supporting H2a and H2b. The linkages among hedonic (coefcient 0.13, t 2:12, p , 0.05) and utilitarian values (coefcient 0.28, t 3:16, p , 0.01) and behavioral intentions were both positive as well. Utilitarian value showed a greater inuence on behavioral intention than hedonic value (utilitarian value: coefcient 0.28, t 3:16 vs hedonic value: coefcient 0.13, t 2:12), supporting H5. Finally, customer satisfaction was predicted to be positively associated with behavioral intentions, supporting H3 (coefcient 0.74, t 9:23, p , 0.01). This nding indicated that increasing fast-casual restaurant customers satisfaction levels is necessary to enhance their intentions to recommend and revisit the restaurant. Indirect effects The indirect effects of hedonic and utilitarian values on behavioral intentions were also assessed. The Sobel test was used to calculate for mediation in a SEM model. The Sobel test, which was rst proposed by Sobel (1982), is by far the most commonly used when testing indirect (mediation) effects. The Sobel test assesses whether a mediator variable (customer satisfaction) signicantly carries the effect of an independent variable
Hypothesized path H1a. Hedonic value ! Customer satisfaction H1b. Utilitarian value ! Customer satisfaction H2a. Hedonic value ! Behavioral intention H2b. Utilitarian value ! Behavioral intention H3. Customer satisfaction ! Behavioral intention Coefcient 0.30 0.59 0.13 0.28 0.74 t-value 3.65 * * 6.31 * * 2.12 * 3.16 * * 9.23 * * Results Supported Supported Supported Supported Supported

Table III. Structural parameter estimates

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

Figure 1. Results of the structural model

(hedonic/utilitarian value) to a dependent variable (behavioral intention). The results of the Sobel test revealed that both hedonic and utilitarian values had a signicant indirect effect on behavioral intention via customer satisfaction (coefcient HV-CS-BI 0.22; coefcient UV-CS-BI 0.44) at an alpha level of 0.01. Since the direct relationships between hedonic value and behavioral intentions (coefcient 0.13, t 2:12, p , 0.05) and between utilitarian value and behavioral intentions (coefcient 0.28, t 3:16, p , 0.01) were signicant, customer satisfaction could be regarded as a partial mediator in the hedonic/utilitarian value and behavioral intention link. The total effect of utilitarian value on behavioral intention (0.72) was greater than that of hedonic value (0.35), indicating the importance of utilitarian value in increasing behavioral intention. Discussion and conclusion Summary of the study The purpose of this study was to examine the relationships among hedonic and utilitarian values, customer satisfaction and behavioral intention in the fast-casual restaurant industry. In sum, the SEM analysis revealed that the proposed model could well predict consumers behavioral intentions to revisit the fast-casual restaurant and talk positively about their dining experience about the restaurant (R 2 0:79), indicating its applicability in the hospitality industries, particularly the restaurant industries. The dimensions, along with other factors in the model, indicate acceptable levels of convergent and discriminant validity. Moreover, they were related to the other latent constructs, customer satisfaction and behavioral intentions, in a theoretically consistent manner. This serves to extend Babin et al.s (1994) original scale into a restaurant context. Implications The study results provide both theoretical and practical benets. First, theoretically, this study demonstrates the usefulness of two distinct structures of consumer service value: hedonic and utilitarian. This study is one of a few early studies to use Babin et al.s (1994) two-dimensional measure of customer service value, the hedonic/utilitarian value, to explore relationships among hedonic and utilitarian values, customer satisfaction, and behavioral intentions. Similar to previous studies (Eroglu et al., 2005; Babin et al., 1994), the ndings indicated that both hedonic and utilitarian values signicantly inuenced customer satisfaction and behavioral intentions, and customer satisfaction had a signicant role in changing behavioral intentions. Customers perceived hedonic and utilitarian values both directly and indirectly inuenced behavioral intentions. Thus, restaurateurs should acknowledge and seek to improve customers perceptions of both hedonic and utilitarian values in ensuring satisfaction, thereby in turn inuencing positive behavior emotions such as revisiting the restaurant and talking positively about dining experiences in fast casual restaurants. Hopefully, this work will serve as a useful base for more comprehensive research. Practically speaking, the results can help marketers better understand peoples rationale for eating at fast-casual restaurants and respond accordingly, thereby eventually improving customers perceived service value and creating customer satisfaction, which in turn affects positive behavior.

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Second, the results of the current research indicate that while the hedonic aspects of consumer value are important predictors of customer satisfaction, the more functional, utilitarian aspects of consumer value play a greater role in customer satisfaction and positive behavioral intentions in the fast-casual dining sector. That is, the dining experience in this context might be more aptly described as a strongly goal-oriented, instrumental behavior than an intrinsically enjoyable activity. Therefore, marketing activities in the fast-casual restaurant context should focus on facilitating efcient dining experiences (e.g. healthy food options, convenience, quick serving, and reasonable price). We recommend that restaurateurs focus on means of enhancing the utilitarian value of fast-casual restaurants so as not to put off those customers who visit for primarily functional reasons. For instance, given the ability of fast-casual restaurants to develop, source, and promote more healthy-sounding menu items, restaurateurs can serve freshly prepared healthy foods that communicate better positioning among customers for the upscale quick service restaurant sector. Facilitating functional goals pays for itself in the longer term satised customers are likely to respond positively to the restaurant sector. Third, the results of the Sobel test indicate that satisfaction signicantly affects hedonic and utilitarian values and thereby behavioral intentions, acting as a partial mediator. This nding suggests that restaurateurs should seek to enhance customer satisfaction. Developing various ways to increase restaurant customers satisfaction levels may ultimately inuence customers hedonic and utilitarian values as they form intentions to revisit and recommend. Fourth, this study also found that although its impact is not greater than the utilitarian value, the hedonic value of the fast-casual restaurant dining experience still signicantly inuences both customers satisfaction level and behavioral intentions. This result implies that the hedonic aspect of value should not be ignored. In other words, enjoyment is a signicant predictor of consumer service value in the fast-casual restaurant sector. Therefore, restaurateurs should make an effort to produce a more enjoyable and pleasant environment. This may involve or require the use of a more entertaining atmosphere, such as lighting, color, music, unique interior design and cor, professional appearance of employees, and other aspects of dining experiences de that make them enjoyable or exciting to experience. Limitations and suggestions for future research As with any study, there are some limitations to the generalizability of the ndings. This study focused only on the fast-casual restaurant segment. Researchers (Chandon et al., 2000) have found that the relative appeal of hedonic as compared to utilitarian value depends on the nature (hedonic or utilitarian) of the product/service, indicating that the role and relative importance of instrumental characteristics versus hedonic aspects may vary across contexts. Thus, more research is needed into other contexts such as upscale casual restaurants. Additionally, the use of a homogeneous student sample, while it may be desirable in reducing extraneous variance, limited the generalizability of the study ndings. Therefore, future study should include a broad range of actual customers to test the proposed relationships. A convenience sampling approach 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

collected using the convenience sampling approach might not be representative of the population. Future research should address a number of characteristics (e.g. consumption motivations) and situational factors (e.g. time pressure) that could be related to hedonic or utilitarian value (Babin et al., 1994). For example, Babin et al. (1994) showed that time pressure is negatively related to perceived shopping value. As time pressure increased, consumers diminished feelings of freedom led to lower hedonic value. Additionally, future research could examine the potential moderating effect of consumption orientations. For example, consumers with a more goal/functional orientation might be affected more by utilitarian value, whereas consumers who tend towards more pleasure-oriented consumption could be inuenced more by hedonic value. Given the relationship between culture and marketing, another interesting future research project could involve an examination of the potential role of culture as a moderator among hedonic and utilitarian values, customer satisfaction and loyalty links. However, such a study must be both theoretically and practically meaningful in order to reveal how the relationships between values and satisfaction/loyalty vary in different cultural settings.
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