Notes on: Perceived Service Quality, Perceived Value, and Customer Satisfaction in Starbucks Reserve Shanghai (Sustainability 2021)

Abstract and Study Purpose

The article investigates how perceived service quality (PSQ) and perceived value (PV) shape customer satisfaction (CS) and behavioral intention (BI) in the context of Starbucks Reserve coffee shops in Shanghai, China. Using the DINESERV framework to assess service quality and a two-dimensional PV framework (functional value and symbolic value), the study surveys 385 consumers at the Shanghai Starbucks Reserve flagship store and analyzes the data with SmartPLS 3.0 (PLS-SEM). Key findings show that PSQ has a partially significant positive effect on PV; both PSQ and PV positively affect CS; CS positively influences BI. The study emphasizes emotional bonds, reliability, assurance, and empathy in PSQ to enhance PV and CS, and suggests leveraging the symbolic value of Starbucks in the Chinese market to promote sustainability and repurchase. The research extends service quality, PV, and behavioral-intention studies to coffee chains in non-habitual coffee-drinking countries and provides managerial implications for regional cultural consumption in international catering chains.

Key Concepts and Theoretical Framework

• Perceived Service Quality (PSQ) in this study follows the DINESERV framework, which is an adaptation of the SERVQUAL model tailored to the catering/restaurant sector. PSQ is operationalized through five dimensions: reliability, assurance, responsiveness, tangibles, and empathy. In the context of coffee shops, PSQ is treated as a consumer evaluation of service performance against expectations.
• DINESERV model: A service-quality measurement tool specifically developed for restaurants. It maintains the same five dimensions as SERVQUAL but is calibrated for the dining/food-service environment. For this study, DINESERV is used to measure perceived service quality of coffee-beverage service in a high-traffic flagship store.
• Customer perceived value (PV): The overall utility customers derive from a product or service after weighing perceived benefits against perceived costs. The study adopts a two-dimensional PV framework: functional value and symbolic value. Functional value captures practical benefits (e.g., price, quality, usefulness), while symbolic value captures social, emotional, aesthetic, and reputational aspects.
• Functional value vs. symbolic value: Functional value reflects tangible, utilitarian benefits (e.g., convenience, quality, value for money). Symbolic value reflects intangible benefits related to self-perception, social status, aesthetics, and brand image. The framework aligns with prior work such as Chen and Hu (functional and symbolic dimensions) and Sweeney & Soutar (multiple-value dimensions).
• Customer satisfaction (CS): Affective evaluation of the overall experience with a service, influenced by service quality and PV. CS is linked to post-purchase attitudes and is a predictor of repurchase and loyalty.
• Behavioral intention (BI): Measures customers’ intention to revisit and recommend the brand. BI is commonly modeled as a follow-on outcome of CS.
• The structural model tested in this study comprises: Hypothesis 1 (PSQ → PV), Hypothesis 2 (PSQ → CS), Hypothesis 3 (PV → CS), and Hypothesis 4 (CS → BI).

Hypotheses and Theoretical Pathways

• Hypothesis 1: Perceived service quality has a positive effect on perceived value. This aligns with literature showing high service quality enhances perceived value by increasing benefits and reducing perceived costs.
• Hypothesis 2: Perceived service quality has a positive effect on customer satisfaction. Service quality is a key predictor of CS across multiple service contexts.
• Hypothesis 3: Perceived value has a positive effect on satisfaction. PV is a determinant of CS in many service settings.
• Hypothesis 4: Satisfaction has a positive effect on behavior intention. CS drives repurchase and word-of-mouth intentions.

Methodology

• Study location: Shanghai Starbucks Reserve Roastery, the flagship store. The site was chosen due to Shanghai’s prominence as a financial and cultural hub and because the Roastery serves as a high-visibility case with strong brand resonance locally.
• Data collection: A self-administered questionnaire distributed in August 2018. Out of 500 distributed questionnaires, 450 were collected, with 386 valid responses (effective rate 85.7%).
• Measurement model: The scale includes four sections: (i) DINESERV service quality with 29 indicators across five dimensions; (ii) PV with two dimensions (symbolic and functional) across eight indicators; (iii) CS with four indicators; and (iv) BI with two indicators, plus a demographic section (gender, age, occupation, education, income).
• Measurement indicators: Indicators for each construct were drawn from prior literature and adapted to the coffee context. Examples include:
  • Reliability indicators: "Serves you in the time promised"; "Quickly corrects anything that is wrong"; "Is dependable and consistent"; "Serves your food exactly as you ordered it".
  • Assurance indicators: "Has employees who can answer your questions completely"; "Makes you feel comfortable and confident in your dealings with them"; "Has personnel who are both able and willing to give you information about menu items, their ingredients, and methods of preparation"; "Makes you feel personally safe"; "Has personnel who seem well-trained, competent, and experienced"; "Seems to give employees support so that they can do their jobs well".
  • Responsiveness indicators: "During busy times has employees shift to help each other maintain speed and quality of service"; "Provides prompt and quick service"; "Gives extra effort to handle your special requests".
  • Tangibles indicators: visuals of facilities, menu readability, cleanliness, dress of staff, décor, and seating.
  • Empathy indicators: sensitivity to individual needs, making customers feel special, anticipating needs, sympathetic staff, customers’ best interests.
  • Symbolic value indicators: how the brand improves self-perception, makes customers feel delighted, fashion/style attributes of the store, reputation.
  • Functional value indicators: ease of location, overall value for money, perceived quality.
  • CS indicators: overall satisfaction and alignment with service expectations.
  • BI indicators: intention to revisit and willingness to recommend.
• Analytical method: Partial Least Squares Structural Equation Modeling (PLS-SEM) via SmartPLS 3.0. Bootstrap resampling with 3,000 samples assessed significance. Model fit diagnostics included variance inflation factor (VIF < 3.0), R^2 values (>0.25 considered adequate), and standardized path coefficients. Discriminant validity was checked via the Fornell–Larcker criterion (square roots of AVE exceeded correlations).

Results: Measurement Model

• Validity and reliability: All factor loadings exceeded 0.7; AVEs exceeded 0.5; Cronbach’s alpha and composite reliability (CR) values exceeded 0.7. This supports convergent validity and reliability.
• Discriminant validity: The square roots of AVE for each construct were greater than their inter-construct correlations, confirming discriminant validity per Fornell–Larcker.
• Constructs and indicators: Reliability (4 items), Assurance (6 items), Responsiveness (3 items), Tangibles (8 items), Empathy (5 items), Symbolic value (4 items), Functional value (3 items), Satisfaction (4 items), and Behavioral intention (2 items) were all measured with adequate reliability and validity.

Results: Structural Model and Hypothesis Testing

• Multicollinearity: All VIF values were below the threshold of 3.0, indicating no serious multicollinearity.
• Explanatory power: R^2 values for the endogenous constructs ranged from 0.318 to 0.551, indicating adequate predictive power of the model.
• Paths to symbolic value (SymV): Reliability (RelSQ) → SymV: β = 0.171, t = 2.623, p < 0.01; Assurance (AssSQ) → SymV: β = 0.298, t = 3.918, p < 0.001; Tangibles (TanSQ) → SymV: β = 0.180, t = 2.566, p < 0.05; Empathy (EmpSQ) → SymV: β = 0.144, t = 2.126, p < 0.05; Responsiveness (ResSQ) → SymV: not significant. This supports H1-1a, H1-1b, H1-1d, H1-1e, but not H1-1c.
• Paths to functional value (FunV): RelSQ → FunV: β = 0.149, t = 2.068, p < 0.05; AssSQ → FunV: β = 0.268, t = 3.337, p < 0.01; TanSQ → FunV: β = 0.268, t = 3.843, p < 0.001; ResSQ → FunV: not significant; EmpSQ → FunV: not significant. This supports H1-2a, H1-2b, H1-2d; not H1-2c or H1-2e.
• Paths to Satisfaction (Sat): RelSQ → Sat: β = 0.180, t = 3.397, p < 0.01; TanSQ → Sat: β = 0.124, t = 2.317, p < 0.05; EmpSQ → Sat: β = 0.293, t = 3.934, p < 0.001; AssSQ → Sat: not significant; ResSQ → Sat: not significant; FunV → Sat: not significant. This supports H2a, H2d, H2e; not H2b, H2c or H3b.
• Symbolic value and satisfaction: SymV → Sat: β = 0.188, t = 3.381, p < 0.01 (significant).
• Perceived value and satisfaction: FunV → Sat: not significant (H3b not supported).
• Satisfaction and behavioral intention: Sat → BI: β = 0.663, t = 21.609, p < 0.001. This strongly supports H4.
• Overall conclusion for the structural model: PSQ is linked to PV primarily through symbolic and functional value channels. PV (especially symbolic value) motivates CS, and CS robustly drives BI. Responsiveness and empathy show nuanced effects: they significantly shape symbolic value but do not consistently boost functional value or CS in this context. The overall model explains a meaningful portion of variance in CS and BI for Starbucks Reserve Shanghai consumers.

Discussion and Implications

• The study demonstrates that perceived service quality is a key driver of perceived value and satisfaction in a high-visibility, flagship coffee-context in a non-traditional coffee market (China). Specifically, reliability, assurance, tangibles, and empathy positively influence symbolic value, while reliability, assurance, and tangibles positively influence functional value. Responsiveness and empathy, while shaping symbolic value, do not consistently translate into higher functional value or satisfaction in this setting.
• Symbolic value has a significant positive effect on satisfaction, underscoring the importance of brand image, aesthetics, social meaning, and reputation in shaping customer experiences beyond utilitarian attributes. In Shanghai, the Starbucks Reserve Roastery serves not only as a product venue but also as a cultural and experiential destination; leveraging brand prestige and emotional resonance can enhance customer satisfaction and repurchase intent.
• Functional value did not directly drive satisfaction in this study, suggesting that in a luxury flagship coffee environment in China, symbolic aspects may be more influential than pure utilitarian value in predicting satisfaction. This finding diverges from some Western-focused studies and highlights cultural/contextual differences in value perception.
• The results imply practical steps for managers: strengthen service reliability, assurance, tangibles (store ambiance, cleanliness, décor), and empathetic customer care; invest in symbolic-brand activities (targeted language training, storytelling, brand-heritage messaging) to elevate perceived social value and reputation; and focus on sustaining emotional connections to drive satisfaction and repurchase.
• From a sustainability perspective, the study emphasizes life-centric service design: balancing profitability with customer value and long-term loyalty. In SDG terms, the authors advocate for energy-efficient packaging and store practices, consistent with sustainable service processes that foster customer satisfaction and loyalty over time.

Practical Implications and Managerial Recommendations

• Service quality improvements: Invest in staff training to enhance reliability, assurance, tangibles, and empathy. Ensure prompt, accurate responses and consistent delivery of service promises. Improve store ambience, display, cleanliness, and the physical environment to reinforce a premium brand image.
• Emphasize symbolic value: Use language and visuals that resonate with Chinese consumer aesthetics, prestige, and social signaling. Tailor communications to evoke emotion, aesthetics, and brand reputation, which strongly influence satisfaction.
• Brand storytelling and emotional engagement: Create experiences that deepen emotional connections—e.g., culturally resonant branding, exclusive tasting experiences, and storytelling around the Roastery’s craft—so that customers perceive higher symbolic value.
• Sustainable service practices: Align service design with sustainability goals (energy-efficient packaging, reduced waste, durable store features) while maintaining high perceived value and satisfaction to encourage repurchase.

Limitations and Future Research

• Geography and generalizability: Data come from a single flagship location in Shanghai (a first-tier Chinese city). Results may not generalize to other Chinese cities or developing countries without additional case studies.
• Temporal context: Data were collected in 2018 (pre-COVID-19). The pandemic may alter consumer perceptions of service quality, value, and loyalty; post-pandemic studies are needed to re-validate the model.
• Additional variables: The authors suggest exploring consumer affective factors such as brand attachment and brand preference to enrich understanding of brand-stickiness and loyalty processes. Future research could incorporate mediators/moderators (e.g., customer mood, queue wait time, perceived risk) to explain variances in PV and CS.

Connections to Foundational Principles and Real-World Relevance

• The study anchors itself in established service-quality and value-theory foundations: SERVQUAL/DINESERV for PSQ, multi-dimensional PV frameworks (functional vs. symbolic), and the linkages between PV, CS, and BI that recur across service contexts.
• It situates Starbucks within the broader discourse on international/cross-cultural service marketing, showing how a global brand must adapt to local consumer-value perceptions, particularly in non-habitual coffee markets like China.
• Ethically and practically, the paper discusses sustainable development in service operations, advocating for responsible marketing, environmental considerations, and sustainable consumer engagement in a high-traffic flagship store.

Key Quantitative Findings (Selected Values)

• Sample size and validity: n = 386 valid responses; factor loadings > 0.7; AVE > 0.5; CR > 0.7; Cronbach’s α > 0.7 for all constructs; discriminant validity verified via the Fornell–Larcker criterion.
• Path coefficients (selected):
  • PSQ → PV (via sub-paths): various PSQ dimensions significantly influenced Symbolic Value and Functional Value. Example coefficients:
  • RelSQ → SymV: $\beta = 0.171, {t} = 2.623, {p} < 0.01$
  • AssSQ → SymV: $\beta = 0.298, {t} = 3.918, {p} < 0.001$
  • TanSQ → SymV: $\beta = 0.180, {t} = 2.566, {p} < 0.05$
  • EmpSQ → SymV: $\beta = 0.144, {t} = 2.126, {p} < 0.05$
  • ResSQ → SymV: not significant
  • RelSQ → FunV: $\beta = 0.149, {t} = 2.068, {p} < 0.05$
  • AssSQ → FunV: $\beta = 0.268, {t} = 3.337, {p} < 0.01$
  • TanSQ → FunV: $\beta = 0.268, {t} = 3.843, {p} < 0.001$
  • ResSQ → FunV: not significant
  • Sat: significant effects from RelSQ (β = 0.180, t = 3.397, p < 0.01), TanSQ (β = 0.124, t = 2.317, p < 0.05), EmpSQ (β = 0.293, t = 3.934, p < 0.001); AssSQ, ResSQ, and FunV not significant predictors of Sat.
  • SymV → Sat: $\beta = 0.188, {t} = 3.381, {p} < 0.01$
  • Sat → BI: $\beta = 0.663, {t} = 21.609, {p} < 0.001$
• Model fit: All VIFs < 3.0; R^2 for endogenous constructs in the range 0.318–0.551; Model deemed to have adequate predictive power.

Summary

Overall, the study provides a nuanced view of how service quality and perceived value drive satisfaction and repurchase intentions in a premier coffee-context within China. It highlights the prominence of symbolic value and emotional-brand associations in shaping customer satisfaction and loyalty, while noting that functional value may play a smaller direct role in satisfaction in this particular high-end coffee setting. The findings offer actionable guidance for managing service quality and brand storytelling in international coffee brands operating in non-traditional markets, and they contribute to the broader literature by extending DINESERV and PV frameworks to a non-habitual coffee-drinking context and by emphasizing the role of symbolism in consumer value perception.