Kopitiam Case

CHAPTER 1

INTRODUCTION

1.1 Research background

Understanding the factors that influence the selection of restaurants by guests is an interesting and important area of research study. A better understanding of the influence of many factors helps kopitiam restaurateurs to attract more customers to kopitiam and will bring in a possible impact of profitability. The factors included perceived value, customer satisfaction and behavioral intention (Ryu et al.2008).

It is particularly important to understand the food service market in Malaysia. The Malaysian consumer food service market grew by 8.4% annually from the year of 2002 to 2003 as the government introduces measures in order to stimulate Malaysia economy. As a result, this had led to an increase of 4.8% in GDP over the same period. In current value terms, the food service market was worth a total of RM16312 million in the year of 2003 and this is equating a total growth of 39% from 1999. In addition to this, there were 1026 million of consumer foodservice transactions in 2003 and this is a total rise of 22% from 1999. There was a total growth of 16% in consumer foodservice transactions units between the year of 1999 to 2003 (Euromonitor International, 2004). The consumer foodservice market in this nation is expected to grow as the economy continues its drive towards the Vision 2020, supported by an expected global economic recovery (Euromonitor International, 2004). The service sector (food service services) is targeted to be a new growth sector of the economy. The liberalization of this sector will provide the impetus to enhance its contribution to economic growth (Prime Minister's Office of Malaysia, 2009). The service sector accounts for the largest share of Malaysia's GDP. For the first nine months of 2008, it accounted for 54.2% of GDP. The service sector recorded a growth of 7.9% in value-added for the period of January-September 2008 and it is expected to register a productivity growth of 4.3% in the year of 2008 (Malaysian Industrial Development Authority, 2008).

Understanding the growth of the economy of the nation is also imperative because it reveals the economic status of the consumers. In this respect, the purchasing power of the consumers is subsequently higher when the economy growth is higher. Thus, there will be more disposable income which could be spent on food and beverage. By referring to the 2010's GDP by economic activities in Malaysia, the outcomes of the sector of wholesale and retail trade, hotel and restaurant subsector is found to be the second largest component that contributes to the GDP growth in Malaysia. For the sector of wholesale and retail trade, hotel and restaurant subsector, which include the kopitiam food service operation, is a strong contributor of GDP growth and the industry worth RM26131