Where Everybody Knows Your Name: Homophily in ...

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Where Everybody Knows Your Name: Homophily in Restaurant Atmospherics a

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Nathan D. Line , Rodney C. Runyan , Wanda Costen , Robert b

Frash & John M. Antun

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Department of Retail, Hospitality and Tourism Management, University of Tennessee, Knoxville, Tennessee, USA b

Department of Hospitality and Tourism Management, College of Charleston, Charleston, South Carolina, USA Available online: 29 Dec 2011

To cite this article: Nathan D. Line, Rodney C. Runyan, Wanda Costen, Robert Frash & John M. Antun (2012): Where Everybody Knows Your Name: Homophily in Restaurant Atmospherics, Journal of Hospitality Marketing & Management, 21:1, 1-19 To link to this article: http://dx.doi.org/10.1080/19368623.2011.611728

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Journal of Hospitality Marketing & Management, 21:1–19, 2012 Copyright © Taylor & Francis Group, LLC ISSN: 1936-8623 print/1936-8631 online DOI: 10.1080/19368623.2011.611728

Where Everybody Knows Your Name: Homophily in Restaurant Atmospherics

Downloaded by [University of Tennessee, Knoxville] at 13:43 28 January 2012

NATHAN D. LINE, RODNEY C. RUNYAN, and WANDA COSTEN Department of Retail, Hospitality and Tourism Management, University of Tennessee, Knoxville, Tennessee, USA

ROBERT FRASH Department of Hospitality and Tourism Management, College of Charleston, Charleston, South Carolina, USA

JOHN M. ANTUN Department of Retail, Hospitality and Tourism Management, University of Tennessee, Knoxville, Tennessee, USA

Atmospherics are an underresearched, yet important aspect of restaurant performance. This study takes an exploratory approach to measurement development, by conceptualizing a social capital scale to measure homophily in five different restaurant settings, and all three traditional meal periods. A national sample of 1,220 restaurant-goers was obtained, and a unidimensional construct reflecting homophily was found overall; for breakfast and lunch periods, and within three of the five restaurant types. We offer insight into these findings, and discuss the use of the scale in future research. KEYWORDS DINEX, restaurant atmospherics, homophily, hospitality, scale development Sometimes you want to go . . . where everybody knows your name, And they’re always glad you came. You want to be, where you can see our troubles are all the same . . . where everybody knows your name. (Portnoy & Angelo, 1982)

Address correspondence to Rodney C. Runyan, University of Tennessee, 110 Jessie Harris Bldg., Knoxville, TN 37996, USA. E-mail: [email protected] 1

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INTRODUCTION For many years viewers were greeted with these words from the theme song of the long-running American television comedy “Cheers.” Nothing was mentioned about how cold the beer was, how good (or bad) the service, nor how good the food was in the dining room upstairs. The important thing was, when you went to Cheers, you were made to feel like family or a close friend. This was the inferred “key” to the success of that business. To be sure, in the restaurant industry there are many important variables that contribute to a firm’s success. These include food quality (Siguaw & Enz, 1999; Sulek & Hensley, 2004), service (Hui & Bateson, 1991; Baker & Cameron, 1996), and setting and atmosphere (Auty, 1992), all attributes that contribute to a restaurant’s success or failure (Sulek & Hensley, 2004). While there is disagreement among researchers as to which of these variables is the most important, there are some who posit that atmosphere may be the most salient overall component of the mix (Auty, 1992). Atmosphere can include the physical setting (waiting area, dining area, décor), atmospherics (e.g., music, noise, air quality, scents, crowding, etc.) or fellow patrons. Of these atmospherics variables, the relationship among fellow patrons is underresearched. Is a place where “everybody knows your name” important only to bar- or pub-goers (Runyan, 2009)? Or is the idea of dining amongst familiar faces one that restaurateurs should consider? Rosenbaum (2006) found that social connectedness is positively related to loyalty and re-patronage intentions in some restaurant formats. Campbell, Nicholson, and Kitchen (2006) likewise found a strong connection between social bonding and building a truly loyal customer base. Based on Goldman’s (1993) suggestion that the restaurant market segment and type must match the restaurant’s atmosphere for the operation to be ultimately successful, our research seeks to incorporate an assessment of atmospheric and consumption qualities as each relates to restaurant type. We posit in this article that there are social capital aspects to restaurant patronage which are not only underresearched, but may play a key role in firm success, especially when considering a key metric for success: intention to return. Dess and Shaw (2001) argued that in service-based businesses (e.g., restaurants, bars, etc.), the negative aspects of social capital losses are significant. Thus this social dimension adds to what restaurant owners should consider in assessment of diners’ expectations (Raajpoot, 2002). This study contributes to the extant literature in three ways. First we review and synthesize the extant literature on restaurant types, and propose an a priori categorization of restaurant types, drawn from the previously fragmented literature base. We then extend the current knowledge base by exploring restaurant customers’ attitudes about social capital-type constructs germane to the industry, but specifically homophily. Finally, we develop measures for this atmospheric factor and, using factor analysis determine if

Homophily in Restaurant Atmospherics

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the construct is unidimensional or multidimensional, based on our a priori classification scheme. We begin by discussing and synthesizing the appropriate literature, then explicate our theoretical framework. Discussion of our methods, presentation of results and statement of implications, both for academics and practitioners follow.

CONCEPTUAL FRAMEWORK


Restaurant Atmosphere Although the concept of atmosphere is vague, it has been identified as a critical variable for explaining customer satisfaction among hospitality guests regardless of geographical area, nationality of guests or type of business (Heide & Gronhaug, 2009). A recent study of restaurants suggests that atmosphere is often perceived by guests and staff as the single most positive characteristic of the establishment, more important than even food (Kokko, 2005). Kotler (1973) defined atmosphere as the environment and surroundings in a given location. Heide and Gronhaug (2009), while studying Norwegian hotels guest’s perceptions of atmosphere, found a four-factor solution to identifying the domains of atmosphere for hotel guests. These factors were distinctiveness, hospitability, relaxation, and refinement. They reported that distinctiveness of design and décor rated first followed closely by a measure of welcoming and friendliness they called “hospitability.” One shortcoming of this research is that no attempt was made to distinguish atmospheric factors that may be more or less important relative to the hotel’s market segment (i.e., luxury, upper-upscale, midscale with food and beverage, midscale without food and beverage, and budget or economy). For example, the luxury hotel customer expects a higher level of hospitability or “welcoming” attributes such as concierge, valet, and bellhop services. On the other end of the spectrum, the budget hotel customer is willing to trade these hospitality elements for a less expensive, quasi-self-service experience. Knowing the different expectations of their respective customer bases allows hoteliers to provide amenities designed to meet the needs and wants of target markets (Knutson, Stevens, Patton, & Thompson (1992). We suggest that this discussion should be extended to the restaurant industry. That is, the measurement of welcoming and hospitality in the restaurant industry, concepts which are encompassed within homophily, should be conducted with respect to specific restaurant segments as well. Restaurant-type criteria and definitions. Previous research operationalizing restaurant types has done so only informally. For example, Knutson et al. (1995) measured service quality in three restaurant segments: quick service, casual theme, and fine dining. However, it was the respondents in this study, and not the researchers, that described the categories. Respondents were asked if they had recently eaten in a fine dining, casual or theme, or


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fast-food restaurant and were then asked to rate the service of the experience. No information was made available to respondents to uniformly categorize restaurants. Rather, responses were used to retroactively define the categories. Others used a single restaurant type as a setting for studying other phenomenon, such as Han and Ryu’s (2007) study of customer’s personal characteristics with an upscale restaurant. Another categorization scheme seems to focus on tangible atmospheric components to determine a restaurant’s category (Kim & Moon, 2009). Within the realm of service consumption, “the man-made, physical surroundings as opposed to the natural or social environment” is termed servicescape (Bitner, 1992). Hoping to augment the literature with a better understanding of servicescape as it applies to restaurants, Ryu and Jang (2007) adapted Bitner’s (1992) servicescape concept to create a model they called dinescape. The dinescape model unfolds in three successive parts: environmental stimuli, which are mediated by the guests’ emotional state, which, in turn, lead to approach or avoidance responses. However, researchers have focused on different aspects of this model to operationalize categories. For example, Kim and Moon (2009) focused on environmental stimuli, while Ryu and Jang (2007) focused on the emotional state evoked by atmosphere to determine a restaurant’s theme. While adding to the body of knowledge on general atmospherics, none of these assist researchers in comparing findings across studies as none use the same schema for restaurant theme. This contributes to the fractured nature of the literature on restaurant type. Arbitrarily assigning descriptive labels to organizations, however, does little to advance our understanding of constructs that relate to those organizations. Therefore, it is incumbent upon scholars, when operationalized definitions are inconsistent, to offer definitions either rooted in the literature or on some other logicbased method. From there, it allows other scholars to test those definitions’ soundness in terms of theory. Definitions and descriptions of restaurant type do not appear often in the extant literature, supporting our contention that the body of knowledge in this area is fragmented. When definitions are provided, they are less than clear and concrete. Due to the nebulous nature of such definitions, it has not been possible to discuss restaurant characteristics in a categorical manner, nor to compare findings across studies. From the literature which does exist, we pull together the existing definitions and propose a categorization, from which five types of restaurants emerge: fast food, fast casual, casual or theme, upscale casual, and fine dining. In order to standardize the distinction among restaurant types, we define our restaurant types based on five criteria (see Table 1), of which service level (Knutson et al., 1995), tangible aspects of the dinescape (Ward, Bitner, & Barnes, 1992), and emotion (Muñoz, Wood, & Solomon, 2006; Ryu & Yang, 2007) have some grounding in the literature. Additionally, we introduce the criteria of food quality, ticket price, and table turnover to more plainly define restaurant type. Each

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Low: No table service

Service quality

Medium: One server per table

Medium: One server per table

High: Multiple servers per table

Casual theme

Upscale casual

Fine dining

Fast casual Variable: No table service/ one server per table

Fast food

Type

High: Minimal use of frozen ingredients

High: Emphasis on freshness and organics

High: High emotion elicited

High: Maximal emotion elicited

Medium/high: Fabric tablecloth; dimmer lighting

High: Fabric tablecloth; high level atmospherics present (e.g., piano)

Low: Mostly frozen; food purchased to sell cheaply Medium/low: Mostly frozen, but may use slightly better quality ingredients Medium: Some frozen and fresh ingredients

Food quality

Medium: Some emotion elicited

Low: Minimal emotion elicited

Low: Minimal emotion elicited

Emotion level

Medium: TVs and other higher level atmospherics present

Low: No tablecloth; drive through service available Low: No table cloth; minimal atmospheric consideration

Atmospheric level

TABLE 1 Defining Restaurant Type by Criteria

High: Strategy is to serve many people quickly

High: Strategy is to serve many people quickly

Table turnover

$12–$20/ person Medium: Meal duration is longer but tables must still be turned quickly $20–$30/ person Medium: Meal duration is longer but tables must still be turned quickly More than Low: Emphasis $30/person on long duration meals and high ticket prices

$7–$12/ person

Less than $7/person

Average ticket price


Generally not Chain-owned

P.F. Chang’s; Houston’s; Carrabba’s Italian Grill

Ruby Tuesday’s; T.G.I. Friday’s; Applebee’s

Panera Bread; Qdoba; Buffalo Wild Wings

McDonald’s; KFC; Subway

Examples


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of the preceding criteria appears in the literature separately, but brought together here they provide a substantive typology which will help scholars to effectively compare empirical findings. Service level is the extent to which customers are served by restaurant personnel, where fast food represents the lowest level and upscale dining the highest. Fast food restaurants, at the low end of the service level spectrum, are characterized by the absence of table attendants, or servers. Food is ordered at a counter and paid for prior to consumption. Fast casual restaurants are usually characterized in a similar manner; however, some fast casual restaurants may provide limited table service. Casual theme and upscale casual restaurants are characterized by table service that centers on a server who takes orders, refills drinks, delivers food, and presents the check. Upscale restaurants are characterized in a similar manner, but these restaurants incorporate multiple servers who handle specific aspects of the dining experience (e.g., a special waiter who handles drink refills or wine service). Tangible aspects of the dinescape are also used to characterize restaurants. Ward et al. (1992) demonstrated that a store’s internal and external attributes play an important role in its characterization. For the purposes of this study, we propose a continuum of low to high attribute levels of such atmospherics that may be used to characterize restaurants. For example, fast food restaurants are defined by low-level atmospherics, such as the presence of a drive-through window, relatively less comfortable seating, and brighter lighting. Moving up the continuum, the drive through service is not present, seating becomes more conducive to longer dining experiences, and lighting becomes dimmer to facilitate ambiance. At the opposite end of the spectrum, additional higher-level atmospherics are incorporated, such as flat screen televisions in the case of casual or theme restaurants or, higher still, live piano music in the case of upscale restaurants. Other aspects such as the presence or absence of tablecloths and the quality of the general décor are also considered. Related to the above issues is the concept of emotion-centered dining. Ryu and Jang (2007) contrast upscale dining, which is usually emotioncentered, with other types of foodservice that are more functionally driven (e.g., using a McDonald’s drive-through window). The literature, the authors note, suggests that a guest’s reaction to the physical environment is more related to emotional states than to cognitive perceptions, particularly in a hedonic consumption situation, consistent with upscale dining. Thus, as the restaurant categories unfold from fast food to upscale dining, higher levels of emotion centered dining become salient. Muñoz et al. (2006) built on the work of Ryu and Yang (2007) by extending the theory of emotion-centered dining into the casual theme restaurant setting. Consistent with Goldman’s (1993) assertion regarding the importance of restaurant theme-market segment congruence, the researchers contend that a successful Irish pub must match consumers’ expectations at both a production as well as a consumption level. The authors found that the



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role of patrons and employees was at least equal, if not more important, than physical atmospheric elements (cultural artifacts, Irish themed bric-abrac, music, etc.) in the creation of an “authentic” Irish pub experience, and this is supported by Runyan (2009). In terms of atmospherics, this suggests that consumption-level experiences are more important than some previous literature would indicate in determining a restaurant’s category. The quality of the food that is served can also help to describe restaurants in different categories. Fast food restaurants mainly (with noted exceptions) serve reheated frozen food (e.g., McDonald’s, Taco Bell). The emphasis is on low quality foods that can be sold cheaply to the consumer. Fast casual (e.g., Chipotle, Moe’s) and casual or theme (e.g., Chili’s, Applebee’s) restaurants also serve previously frozen food but actively incorporate freshness into their menus as well. Upscale or casual restaurants (e.g., Olive Garden, Outback Steakhouse) will mainly serve fresh foods with some small allowances for previously frozen fare. Fine dining restaurants rarely, if ever, serve anything that is not fresh. The menus in these restaurants emphasize quality with fresh and, often organic, ingredients. Perhaps correlating somewhat to the characteristic of food quality, we further introduce average ticket price as a determinant of a restaurant’s category. The average ticket prices for the five categories as well as example of each are as follows: ● ●

●

●

●

Fast food: Less than $7 per person (e.g., McDonald’s, KFC, Subway) Fast casual: $7–$12 per person (e.g., Panera Bread, Chipotle, Buffalo Wild Wings) Casual theme: $12–$20 per person (e.g., Ruby Tuesday’s, T.G.I. Friday’s, Applebee’s) Upscale casual: $20–$30 per person (e.g., P.F. Chang’s, Houston’s, Carraba’s Italian Grill) Fine dining: More than $30 per person (usually locally owned and not chain-affiliated)

Finally, we utilize the concept of table turnover to categorize restaurants. Because fast food is often frozen (and hence cooked more quickly) and paid for preconsumption, customers do not have to spend much more time in the restaurant than it takes to eat their food. Additionally, fast food restaurants are generally characterized by less comfortable seating, inducing a negative physiological reaction (Bitner, 1992) that results in a relatively shorter dining experience, and hence, higher turnover. By contrast, casual dining establishments require more time to prepare and serve the food, thus decreasing turnover. At the opposite end of the dining spectrum, fine dining establishments may incorporate several courses into the meal, further decreasing turnover rates. Although stating these criteria is important, one should note that no restaurant can be characterized by only one of the preceding dimensions.


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Additionally, most restaurants will not possess all the characteristics ascribed by their respective designations. For example, some fast casual restaurants (e.g., Panera Bread) emphasize fresh ingredients or incorporate tableside service (e.g., Buffalo Wild Wings) in a manner more consistent with the casual or theme restaurant. Thus, when considering a restaurant as a member of a category, one should take all factors into account and assess the restaurant holistically, rather than focus on individual aspects. Social capital and homophily. Social capital is an intangible resource, and a term originally used to describe relational resources, occurring in crosscutting personal ties (Tsai & Ghoshal, 1998). Various disciplines (e.g., economics and sociology) posit that social capital is a resource generated within or between groups of people. These are broadly defined as resources rooted in relationships (Leana & VanBuren, 1999). These relationships create access to resources that would not be available otherwise and, as a result, lead to positive outcomes. These outcomes might have personal significance or community significance. As a resource, social capital may be a source of competitive advantage for business owners (Runyan, Huddleston, & Swinney, 2006) and as such may help to reduce the need for other sources of capital (Packalen, 2007). Social capital may become manifest between a firm and its customers, enabling the firm to draw on word of mouth to increase revenue, rather than using cash for advertising. Social capital is also seen as a resource created through active relationships among people (Coleman, 1988). Relationships between employees and customers may serve to create social networks upon which firms can draw to improve performance. In restaurant settings, the familiarity built up between server and patron is fashioned from repeated interaction, which Tsai and Ghoshal (1998) refer to as frequency of ties. Shaw, Duffy, Johnson, and Lockhart, (2005) found that restaurant chains lose significant social capital when employee turnover is too high. The frequent ties that build the capital between employee and customer are such that when the employee leaves, the feeling of familiarity enjoyed by the customer also is gone. Social capital is not “spent” by the firm; it simply vanishes. A component of social capital is perceptual homophily, which is the extent to which persons perceive others as being like themselves (Blau, 1961; Cross, Borgatti, & Parker, 2002). The notion that people tend to associate with others whom they perceive as similar is widely supported (McPherson, Smith-Lovin, & Cook, 2001). Cross et al., (2002) see homophily as increasing the likelihood of communication in groups. This is supported by previous research on networks. For example, those of the same gender and race were more likely to communicate within groups. Those of the same race tend to communicate more often with each other (Ibarra, 1993). Communication between persons or groups of persons creates personal ties (Granovetter, 1985) that lead to future tendencies to communicate. These are referred to as ties between network members, which can be dense and frequent and be among homophilous persons. Yet those same ties can



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remain informal, and weak in nature (Cross et al., 2002). In other words, persons who frequent the same places, gatherings etc. may tend to be similar (homophilous) and interact with each other frequently, yet maintain an informal relationship which manifests weak ties. Granovetter (1985, p. 1361) refers to this as a “nodding” relationship between neighbors, where little is exchanged but small talk. This type of relationship could lead to a preference for places (e.g., restaurants, stores, recreation facilities) where one is familiar with employees and fellow patrons. A sort of “comfort level” is gained, leading to further creation of ties. Ties between network members, however, are not necessarily weak and informal. Sherry (2000) argued that the importance of the role of places in people’s lives is poorly understood. The term “third place” was coined by Oldenburg (1999) to describe such “public places that host regular, voluntary, informal, and happily anticipated gatherings of individuals beyond the realms of home and work” (p. 16). Rosenbaum (2006) demonstrated that, in the case of places such as diners, coffee shops, and taverns, some customers value the associated companionship and emotional support apart from other aspects of the dining experience. Furthermore the author demonstrated that as such “commercial friendships” increase, and so too does loyalty to the establishment. The prior work of Mattila (2001) supports this position. Mattila lists three reasons given for repatronizing restaurants; food quality, service, and atmosphere. She calls these “core” attributes. With respect to the manner in which core attributes affect customer loyalty, the research demonstrates that customers with emotional bonding indicate personal recognition and feeling of familiarity, both factors associated with the building of social capital, as drivers of their repurchase decisions. She elaborates that those who have an emotional connection are considered to be the high-commitment group. That is, these customers have a much stronger brand loyalty than those that are not emotionally tied to the restaurant. For restaurateurs, this translates into the establishment of an emotional familiarity with their customers that will result in additional brand loyalty and higher repatronage rates. Thus, emotional connections between customers and restaurateurs, especially if reinforced over time, can have significant impacts on customer loyalty. The connection a customer feels with a restaurant can be further enhanced if customers perceive a connectedness to staff and fellow patrons (Rosenbaum, 2006). That is, customers value a homophilic experience in addition to the other, more frequently cited atmospheric components. Hence, a restaurant’s atmosphere can be found on two levels. The first includes traditional atmospherics (e.g., lighting, furniture, etc.). The second level includes restaurant employees and other customers. Previous work (Ryu & Jang, 2007; Wall & Berry, 2007) has often undervalued the role that consumption-level atmospherics play in approach or avoidance behavior and revisit intentions. Some researchers have


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acknowledged the possibility that a social component exists in dining settings (Bitner, 1992; Raajpoot, 2002; Rosenbaum, 2006); however, the two most popular measurements of service experience, SERVQUAL (Parasuraman, Zeithaml, & Berry, 1988) and DINESERV (Stevens & Knutson, 1995) neglect to include a social component altogether. Noting this, Raajpoot (2002) developed TANGSERV to include a measurement of the tangible social elements of dining experience. However, TANGSERV incorporates only crowding in its final scale. The current study posits that these consumption level factors include mainly the social capital construct of homophily, and addresses this gap in the research by creating a social capital scale for restaurant patrons, testing the scale for validity and reliability.

METHODOLOGY The current study utilizes the social capital scale from the DINEX model (Antun, Frash, Costen, & Runyan, 2010). The original DINEX instrument was developed through a three-stage process, beginning with a Delphi-method study, followed by in-depth focus group research. The resulting scales were pretested (n = 281) with a convenience sample of students and residents in a midsized southeastern city. The reliability achieved in the pretest was 0.92. Given previous affirmative evaluations of Web-based data collection (Dillman, 2000; Mills, Morrison, & Ismail, 2002; Weible & Wallace, 1998), the survey was administered online to a random population of American restaurant customers. There were 1,220 useable surveys returned, which was a response rate of 16%. The survey asked respondents when they last dined, at which meal period (breakfast, lunch, or dinner), and in which restaurant category (fast food, fast casual, casual theme, upscale casual, or fine dining). To ensure the respondents understood the restaurant categories, average check amounts and named examples for each category were provided. Respondents were then asked to reference that last dining experience when responding to the social capital scale items, along a 5-point scale ranging from not important to extremely important. Table 2 depicts selected demographic information of the sample. Of the 1,220 usable surveys, 670 were completed by females (54.9%) and 550 by males (45.1%). Single respondents (301) accounted for 24.7% of the sample, while 55.7% were married (679). The remaining applicants indicated their marital status as divorced or other (240 total accounting for 19.7% of the sample). Additionally, a majority (68%) of the sample indicated that they had no children living at home. Social capital is measured using nine items. Respondents rated the importance of social factors such as: the staff knows your name, the server knows what you like, and you do not feel out of place when visiting. We utilized exploratory factor analysis (EFA) to assess the dimensionality of the

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Homophily in Restaurant Atmospherics TABLE 2 Demographic Information


Demographics Gender Male Female Marital status Single Married Divorced Other Children living in home Yes No Annual household income range Under $30K $30K–$50K $51K–$70K $71K–$90K $91K–$110K Over $110K Highest level of education Some high school High school graduate Some college BA degree BS degree Graduate degree

Frequency

Percent

550 670

45.1 54.9

301 679 168 72

24.7 55.7 13.8 5.9

390 830

32.0 68.0

188 286 255 170 126 195

15.4 23.4 20.9 13.9 10.3 15.9

11 162 309 128 366 244

0.9 13.3 25.3 10.5 30.0 20.0

Note. Totals different than 100% due to rounding or missing data.

social capital construct across first, the three mealtime periods, then the five restaurant types. Use of EFA is appropriate in this situation (as opposed to CFA), as there is little theoretical guidance for considering our social capital scale as taking on a unidimensional or multidimensional factor structure. Considering the lack of previous work in the hospitality (specifically in the restaurant industry), the a priori specification of a measurement model is likely of little value. What we have done is taken a set of measurement indicators, and in effect, tested to see if different settings (restaurant type, dining setting) moderate a factor structure. The result is, we tested a series of moderation models, and it is much more efficient to do so in an exploratory study using EFA. Using varimax rotation and principle components extraction, we allowed the program to extract factors with Eigenvalues above the common threshold of 1.0. We first factor-analyzed all nine measures of social capital, for all meal periods and all restaurant types. A single common factor was extracted, with all variables loading at .50 or higher, and an overall variance extracted of 55.6%. Additionally the overall scale showed a high level of internal consistency (α = .90). Thus the reliability of this scale is such that researchers could in confidence use it in a unidimensional fashion in any dining setting (see Table 3).

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TABLE 3 Social Capital Factors and Meal Periods Component 1


Measurement 1. 2. 3. 4. 5. 6. 7. 8. 9.

Like family Employees’ names Your name Belonging Home-away-from-home Your life Server/bartender knows Like you Out of place

All meals

Breakfast

Lunch

Dinner

Component 2

.657 .796 .850 .780 .817 .796 .772 .661 .523

.676 .795 .860 .805 .831 .807 .756 .659 .528

.659 .799 .852 .772 .815 .782 .776 .665 .502

.678 .803 .834 .728 .776 .686 .684 .292 .139

.070 .170 .205 .256 .244 .397 .383 .815 .846

We then took a more fine-grained approach and factor analyzed each of the meal periods using the same method. For breakfast, one common factor emerged, explaining 56.7% of the variance in the factor, with a similar finding for lunch, where one factor explained 55.2% of the variance. Only for the dinner period did a two-factor solution appear. There, the first seven variables all loaded cleanly on one factor, with 55.2% of the variance extracted, while the last two variables loaded cleanly on a second factor, with an additional 11.1% of the extracted variance (we attempt to explain this phenomenon in the discussion section). Following the analysis of the meal periods, we further investigated the social capital scale in the context of the five restaurant types (see Table 4). Depending on the restaurant category, social capital emerged as either one or two factors. In the case of fast food and casualor theme restaurants, all nine components seemed to indicate a unidimensional factor. In the case of fast casual and fine dining restaurants, a two-factor solution emerged with the same pattern as that of the dinner meal period (i.e., the last two items loaded as a separate factor). In the case of upscale casual restaurants, the pattern was inconsistent, as a two-factor solution emerged with Variables 2, 3, and 6–9 loading on the first factor and Variables 1, 2, 4, 5 on a second factor. Additionally, as can be seen in Table 4, Variables 2 and 3 cross-loaded on both factors.

DISCUSSION AND IMPLICATIONS As Goldman (1993) stated, a restaurant type must be matched with its choice of atmospherics for ultimate success. This is not an easy task, but is made more difficulty when scholars do not agree on how to describe or define restaurant types, as a cogent body of work does not exist in this area. Previous research has provided needed insight into what constitutes different types and importance of atmospherics (e.g., Bitner, 1992), as well as which

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1. Like family 2. Employees’ names 3. Your name 4. Belonging 5. Home-awayfrom-home 6. Your life 7. Server/ bartender knows 8. Like you 9. Out of place

Measurement

Fast casual

Casual theme

Upscale casual

Fine dining

.638 .830 .885 .709 .694 .790 .720 .363 .095

.721 .843

.890 .819 .821

.789 .822

.748 .593

.746 .902

.247 .269

.154 .313 .419

.220 .046

.662 .522

.796 .767

.842 .800 .823

.651 .807

.808 .458

.765 .810

.674 .203 .430

.057 .636

–.015 .258

.200 .235

.494 .821 .739

.812 .507

.095 .189

.816 .711

.890 .629 .857

.426 .819

.846 .758

.335 .352

.044 .314 .181

.423 .107

Component 1 Component 1 Component 2 Component 1 Component 1 Component 2 Component 1 Component 2

Fast food

TABLE 4 Social Capital Factors and Restaurant Type



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are most effective (e.g., Heide & Gronhaug, 2009). We extend the restaurant literature by addressing the need for a common and comprehensive categorization of restaurant types. We further add to the restaurant atmospheric literature by operationalizing a scale to measure a core component of social capital heretofore understudied in restaurant settings, namely homophily. The effect of social capital on firm performance has been well established in the entrepreneurship and small business literature (Runyan et al., 2007). It is less prevalent in the hospitality literature, although Rosenbaum (2006) shows that in typical hospitality situations such as diners and taverns, customers do note the importance of the associated companionship amongst fellow patrons. This is similar to how the attraction of the Irish pub is described by clientele (Runyan, 2009), where there is a “neighborhood”-type feeling described by pub patrons. These are each examples of atmosphere within a service environment. This social capital developed between customers and employees in service-based businesses is rare and valuable, and its loss can be devastating for a firm (Dess & Shaw 2001). In this study, we tested the proposition put forward by Rosenbaum (2006), that social capital is a component of restaurant atmosphere, developing a scale to measure that construct. Our results demonstrate that the construct indeed exists, and for the most part can be conceptualized as a single factor which is part of a restaurant’s atmospherics. This is an important contribution to the hospitality discipline as atmosphere is a key component of restaurant success (Auty, 1992; Sulek & Hensley, 2004), and to date, no one has attempted to measure this segment of restaurant atmospherics using a domain-specific instrument. When considering the social capital scale, we found that the nine measures loaded cleanly on one factor for the entire sample. Hence our initial proposition that there is a unidimensional construct which measures the concept of social capital within a restaurant setting was confirmed. This provides researchers with a highly reliable scale which may be averaged into a single factor for additional analysis, if needed. For example, when conducting multiple regression or SEM analysis, nine items may be too many to effectively analyze relationships. The scale appears to lose its unidimensionality when the sample is broken down into smaller, more specific market segments in a few instances. In three cases (dinner, fast casual, and fine dining), a clear two-factor solution appears. In these cases, there are seven items (see Appendix) which load cleanly on one factor. These items all pertain to what Tsai and Ghoshal (1998) referred to as personal ties. Granovetter (1985) and Cross et al. (2002) stated that these ties may be frequent but informal, and tend to lead to further interactions. In Component 1 (Table 3 and 4), indicators such as feeling like family, knowing the employees name, employees knowing yours, et cetera, would manifest from frequent visits to the restaurant, with information exchanged over time. In Component 2, the two indicators are clearly



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measures of homophily: regarding other customers as “being like you” and not feeling out of place. Since these two items were part of a separate factor when considering the dinner meal period, it is clear that homophily takes on greater meaning for restaurant patrons at this time period compared to others. Additionally, the homophily component of social capital takes on increased importance for fast casual and fine dining restaurants. It is not clear from our research why homophily seems to be separate from social ties for only certain restaurant types of dining periods. Perhaps it involves the reasons behind dining choices and periods. Breakfasts may be consumed prior to arriving at work or school, or possibly during work-oriented meetings. Likewise, lunches eaten in restaurants are likely to involve work, school, or are eaten alone. Diners, however, tend to be focused on personal situations: family, dating, special occasions. Since these situations may take on more cultural meaning for customers, the choice of restaurant (including fellow patrons) may take on additional salience. Dining in a restaurant where fellow patrons are more likely to be similar to the customer might ensure that the dining experience will be more “predictable.” Thus the homophilous nature of the clientele is a key management and marketing strategy in many restaurant settings. Controlling customer type within a restaurant is not an easy task, and restaurateurs must be careful to follow laws. For example, the implementation of a dress code (e.g., coat and tie for men) at a fine dining establishment is acceptable. However, the refusal of service to any customer based on gender, for example, would constitute an illegal action by a restaurant that serves the general public. Thus, making overt attempts to restrict clientele at a restaurant, tavern, diner, et cetera, should be discouraged, but market-based tactics can be employed. For instance, a restaurant may want to encourage customers in high socioeconomic strata and thus set prices high, and impose strict dress codes. These strategies do not come without risks however, as a hospitality provider risks alienating potential customers by establishing rules or creating an atmosphere which discourages some patrons. Finally, we note that the research has some limitations which need explication. First, although we were able to obtain a fairly large sample, nearly 60% of our respondents were college graduates. This number is significantly higher than the average population in the United States, which is closer to 30% (Census, 2008). Second, although we provided several restaurant examples for respondents when considering each type, it is possible that for some or even all categories, that the respondent was not familiar with the example(s). Thus responses provided may have been based on incorrect perceptions of the restaurant(s) and as a result negatively affected the validity of the measures. However, as established in the literature, each of the measures has face validity, and the internal consistency of the social capital scale was very high with a Cronbach’s alpha of .90. We also have

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to view the scale overall as a unidimensional construct with some exceptions. The psychometric properties of the scale are solid when considering all dining experiences (i.e., restaurant type and meal period). The scale is slightly less robust when considering either meal period or restaurant type as separate contexts. Only in some instances, the scale is multidimensional as homophily and social ties tend to separate conceptually. This is an issue that we consider to be minor in nature, but should be assessed with additional research.

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APPENDIX Nine Social Capital Measures How important was it that: 1. 2. 3. 4.

You were made to feel like family at the restaurant? You knew the restaurant’s employees’ names? The restaurant employees knew YOUR name? You had a sense of belonging in the restaurant?


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5. The restaurant felt like a “home-away-from-home?” 6. The restaurant’s staff had a sense of what was going on in your life? 7. The server or bartender knew what you liked to eat or drink without you having to tell them? 8. The other customers in the restaurant were like you? 9. You didn’t feel out of place?