marketing management - 12th edition -...

Chapter 13: Designing and Managing Services

GENERAL CONCEPT QUESTIONS

Multiple Choice

1. As companies find it harder and harder to differentiate their physical products, they turn to service differentiation. Companies seek to develop a reputation for ________, better and faster answering of inquiries, and quicker resolution of complaints. a. superior packaging b. superior “value”c. superior on-time delivery d. superior productse. superior customer service

Answer: c Page: 401 Level of difficulty: Easy

2. Service industries are everywhere. They include government, private nonprofit, business sector, manufacturing sector, and the ________. a. insurance salespeople b. seasonal workersc. temporary workersd. retail sectore. none of the above

Answer: d Page: 402 Level of difficulty: Easy

3. Manufacturers, distributors, and retailers can provide ________ services or simply excellent customer service to differentiate themselves. a. financial b. value-addedc. sales d. marketing e. distribution

Answer: b Page: 402 Level of difficulty: Easy

4. There are five categories of offerings for a service. It can be either a minor or a major component of the company’s offerings. Which of the following is NOT one of these five categories?a. Pure tangible good.b. Tangible good with accompanying services.c. Hybrid.d. Major service with accompanying minor goods and services.e. Major service with accompanying major goods.

Answer: e Page: 403 Level of difficulty: Medium

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Part 5: Shaping the Market Offerings

5. Which of the following would be an example of a “hybrid” service? a. University b. Professorc. Restaurant d. Soap manufacturere. Airline

Answer: c Page: 403 Level of difficulty: Medium

6. Which of the following would be an example of a “pure service”? a. Insurance b. Airlinesc. Car dealerd. Copier company e. None of the above

Answer: a Page 404 Level of difficulty: Medium

7. Services vary as to whether they are equipment-based or ________.a. service-basedb. people-basedc. process-basedd. historical-basede. none of the above

Answer: b Page: 404 Level of difficulty: Hard

8. Some services require that the client be present to conduct the service An example of such a service is a ________.

a. vending machines b. fast-foodc. medical operation d. car repaire. tax service


9. Services differ as to whether they meet a personal need or a ________. a. quality needb. production needc. business needd. functional neede. customer need

Answer: c Page: 404 Level of difficulty: Hard

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10. Services high in ________qualities are those services that have characteristics the buyer normally finds hard to evaluate even after consumption.a. equipment b. search c. experienced. personal attentione. credence


11. Services have four distinctive characteristics that greatly affect the design of marketing programs. Which of the following is NOT one of these characteristics? a. Intangibilityb. Communicability c. Variabilityd. Perishability e. None of the above

Answer: b Page: 405 Level of difficulty: Medium

12. Services cannot be seen, tasted, felt, or heard before they are bought To reduce uncertainty, buyers will look for evidence of quality. They will draw inference about quality from place, people, and price they see. Therefore, the service provider’s task is to “________.” a. communicate valueb. manage the evidencec. full speed aheadd. high touch- high pricee. none of the above


13. Service companies can try to demonstrate their service quality through physical evidence and ________. a. predatory pricing b. people c. pricingd. profitse. presentation


14. Unlike physical goods, services are produced and ________ simultaneously. a. launchedb. consumedc. createdd. maximizede. none of the above


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15. One of the special features of services marketing is the provider-client interaction. This is defined as when the client is also ________ as the service is produced. a. prominent b. productc. producingd. presente. paying

Answer: d Page: 406 Level of difficulty: Hard

16. Services depend on who provides them and when and where they are provided they are highly ________. a. suspectb. variable c. consistent d. sub-standarde. none of the above


17. There are three steps service firms can take to increase quality control. Which of the following is NOT one of these steps? a. Reduce customer contact points. b. Monitor customer satisfaction. c. Standardize the service-performance process.d. Invest in good training procedures.e. Invest in good hiring procedures.

Answer: a Page: 406 Level of difficulty: Hard

18. Services cannot be stored, warehoused, or shelved. This is concept is unique to service marketers and is called ________. a. standardization b. heterogeneity c. perishability d. intangibility e. none of the above


19. To match demand and supply, service marketers can utilize a number of strategies on the demand side. Which of the following is NOT one of these strategies? a. Complementary b. Nonpeak demand c. Differential pricingd. Shared servicese. None of the above


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20. To match supply and demand on the supply side, marketers can employ a number of strategies. Which of the following is NOT one of these strategies? a. Peak-time efficiency. b. Reservation system.c. Increased consumer participation. d. Part-time employees.e. None of the above


21. There are shifts that favor the customer in the client relationship. Customers are now becoming more sophisticated about buying product support services and are pressing for “________.”

a. selective pricing b. institutional pricing/services c. substitute servicesd. promotional pricing e. services unbundling

Answer: e Page: 409 Level of difficulty: Hard

22. Holistic marketing for services requires external, ________, and internal marketing. a. exceptional b. incremental c. consistent d. interactive e. influential


23. Factors that lead to customer switching behavior include all of the following EXCEPT ________. a. problem solving b. pricingc. inconvenienced. ethical problemse. none of the above


24. Clients judge the service outcome not only by its ________ but also by its functional quality. a. length of time b. pricec. attributesd. completenesse. technical quality

Answer: e Page: 411 Level of difficulty: Easy

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25. ________ describes the employees’ skill in serving the client. a. Interactive marketing b. Internal marketing c. Client marketing d. Fixed marketing e. Technical marketing

Answer: a Page: 411 Level of difficulty: Easy

26. According to Parasuraman, Zeithaml, and Berry, the first “gap” in their service-quality model is the gap between ________. a. perceived service and expected service b. service delivery and external communicationsc. service-quality specifications and service deliveryd. management perception and service-quality specificatione. consumer expectation and management perception


27. According to Parasuraman, Zeithaml, and Berry, the second “gap” in their service-quality model is the gap between ________. a. perceived service and expected service b. service delivery and external communicationsc. service-quality specifications and service deliveryd. management perception and service-quality specificatione. consumer expectation and management perception


28. According to Parasuraman, Zeithaml, and Berry, the third “gap” in their service-quality model is the gap between ________. a. perceived service and expected service b. service delivery and external communicationsc. service-quality specifications and service deliveryd. management perception and service-quality specificatione. consumer expectation and management perception


29. According to Parasuraman, Zeithaml, and Berry, the fourth “gap” in their service-quality model is the gap between ________. a. perceived service and expected service b. service delivery and external communicationsc. service-quality specifications and service deliveryd. management perception and service-quality specificatione. consumer expectation and management perception


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30. According to Parasuraman, Zeithaml, and Berry, the fifth “gap” in their service-quality model is the gap between ________.

a. perceived service and expected service b. service delivery and external communicationsc. service-quality specifications and service deliveryd. management perception and service-quality specificatione. consumer expectation and management perception


31. The five determinants of service quality include all of the following EXCEPT ________. a. empathyb. assurancec. responsivenessd. reliabilitye. reputation

Answer: e Pages: 413–414 Level of difficulty: Medium

32. There is a ________ where consumer perceptions on a service dimension would be deemed satisfactory, anchored by the minimum level consumers would be willing to accept and the level that customers believe can and should be delivered. a. empathy b. zone of tolerance c. zone of forgivenessd. perceived forgivenesse. value definition


33. Top service companies are “customer obsessed.” They have a clear sense of their target customers and their needs. Their management looks not only at financial performance on a monthly basis, but also at ________. a. service performanceb. tangible rewardsc. consumer complaintsd. marketing activities e. none of the above

Answer: a Page: 415 Level of difficulty: Medium

34. A service company can differentiate itself on three levels. The first is reliability, the second is resilience, and the third is ________. a. assuredness b. employees c. innovativenessd. teamworke. none of the aboveAnswer: c Page: 416 Level of difficulty: Hard

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35. Not all SSTs improve service quality, but they have the potential of making service transactions more accurate, ________, and faster.

a. convenientb. discountedc. inconvenientd. populare. none of the above

Answer: a Page: 417 Level of difficulty: Easy

36. When initiating self-service technologies, some companies have found that the biggest obstacle is not the technology itself, but ________ customers to use it. a. enticing b. feeling comfortable with c. adaptingd. utilizinge. convincing


37. Delta Airlines has been successful in getting customers to use its self-service kiosks by employing a number of tactics. Which of the following was NOT a tactic used by Delta Airlines. a. Advertise the advantages.b. Charge for the convenience.c. Be there to help.d. Maintain the machines. e. None of the above.


38. Top firms audit service performance, both their own and their competitors’ on a regular basis. They collect ________ to probe customer satisfiers and dissatisfiers. a. chat roomsb. voice of the customerc. e-mail solicitations d. consumer activists groupse. none of the above


39. Services can be judged on customer importance and company performance. ________ is used to rate the various elements of the service bundle and identify what actions are required. a. SERVQAL b. Consumer-quality analysis c. Importance-performance analysis d. Key-service indices analysis e. Reliability-service indices analysis


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40. Studies of customer dissatisfaction show that customers are dissatisfied with their purchases about 25 percent of the time but that only about ________ complain.

a. 2 percentb. 10 percentc. 5 percentd. 15 percente. none of the above


41. Customers whose complaints are satisfactorily resolve often become ________ company loyal than customers who were never dissatisfied. a. effective b. no change c. mored. lesse. indifferent


42. Companies that ________ disappointed customers to complain—and also empower employees to remedy the situation on the spot—have been shown to achieve higher revenues and greater profits than companies that do not have a systematic approach for addressing service failures. a. ignoreb. frustrate c. discouraged. encouragee. none of the above


43. Research has shown that customers evaluate complaint incidents in terms of the________, the procedures used to arrive at those outcomes, and the nature of the interpersonal treatment during the process. a. anger of the customer b. personality of the managerc. outcomes they received. monetary rewardse. none of the above


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44. Getting front-line employees to adopt ________ and to advocate the interests and image of the firm to consumers as well as take initiative and engage in conscientious behavior in dealing with customers can be a critical asset. a. company policies and procedures b. win/win philosophyc. conflict management coursesd. training lessonse. extra-role behaviors


45. Excellent service companies know that ________ employee attitudes will promote stronger customer loyalty. a. accommodating b. non-threatening c. neutral d. negativee. positive


46. Service marketers frequently complain about the difficulty of ________ their services. a. marketing b. diffusing c. differentiating d. developing e. designing


47. Service offerings can be differentiated in many ways. The offering can include innovative features. What the customer expects is called the ________. a. brand packageb. complete service packagec. primary service packaged. bundled packagee. none of the above


48. To differentiate their service, a provider can add ________ to the package of services already provided. a. secondary service features b. primary service featuresc. value bundlingd. branding e. price bands of like services


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49. Sometimes, companies achieve differentiation through the sheer range of its service offerings and the success of its ________ efforts. a. pricing b. cross-selling c. advertising d. sales representatives e. none of the above


50. Developing brand strategies for a service requires special attention to choosing brand elements, establishing image dimensions, and ________. a. developing a marketing niche b. developing an advertising campaignc. devising a branding strategy d. developing differentiatione. none of the above


51. The intangibility of services has implications for the choice of brand elements. Because service decisions and arrangements are often made away from the actual service location, brand ________ becomes critical. In such cases, an easy-to-remember brand name is imperative. a. design b. slogansc. imaged. recalle. remind


52. Because a physical product does not exist, the ________ of the service provider-its primary and secondary signage, environmental design and reception areas, etcetera are especially important.

a. characters b. logo c. physical facilities d. brand image e. colors


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53. Organizational associations—such as perceptions about the people who make up the organization and who provide the service-are likely to be particularly important brand associations that may affect evaluations of service quality directly or indirectly. One particular important association is company ________ and perceived expertise, trustworthiness, and likeability. a. credibilityb. reliabilityc. assuranced. tangibilitye. heterogeneity


54. Service firms must therefore design ________ and information programs so that consumers learn more about the brand than the information they get from the service encounter alone. a. advertising campaignsb. marketing measuresc. ad agencies d. marketing communicationse. marketing strategy

Answer: d Page: 423 Level of difficulty: Medium

55. Services must consider developing a brand hierarchy and brand portfolio that permits ________ and targeting of different market segments. a. differentiation b. product placement c. positioningd. imagee. none of the above


56. Manufacturers of equipment all have to provide product support services. Companies in these industries must define customer needs carefully in designing their service support program. Customers have three specific worries when discussing product support services. These three worries include all of the following EXCEPT ________. a. out-of-pocket costsb. reputation of manufacturer c. service dependabilityd. downtimee. failure frequency


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57. A buyer may try to estimate the life-cycle cost of purchasing a product. Life-cycle cost is defined as the ________. a. product’s purchase cost plus the total cost of maintenance and repair less any

salvage value b. product’s purchase cost plus discounted cost of maintenance and repair less any

salvage valuec. product’s purchase cost plus discounted cost of maintenance and repair plus any

salvage value. d. product’s purchase cost plus any salvage value. e. product’s purchase cost plus discounted cost of maintenance and repair Answer: b Page: 425 Level of difficulty: Hard

58. A manufacturer can offer and charge for product support services in different ways. Which of the following is NOT one of the ways manufacturers charge for additional product support services? a. Increase annual purchases for additional services. b. Service contracts.c. Extended warranties.d. Pay for the services upfront.e. Increase the initial cost of the product.


59. To provide the best support, a manufacturer must identify the services customers value most and their ________ importance. a. competitive b. popularc. absoluted. relativee. none of the above


60. Classes of services can be branded vertically on the basis of ________. a. popularity and price b. cost of providing the servicec. price and quality d. price and frequency e. target return on investment


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True/False

61. The Bureau of Labor Statistics reports that the service-producing sector will continue to lose jobs over the next five years.

Answer: False Page: 402 Level of difficulty: Easy

62. Services include government, private nonprofit, business, and the manufacturing sector.

Answer: True Page: 402 Level of difficulty: Easy

63. A “service” is defined as any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything.

Answer: True Page: 402 Level of difficulty: Medium

64. A hybrid service consists of unequal parts of goods and services, with services being in the majority.

Answer: False Page: 403 Level of difficulty: Medium

65. An example of a pure service provider might be for example a car repair facility. Answer: False Page: 404 Level of difficulty: Medium

66. Services vary as to whether they are equipment-based and/or people-based. Answer: True Page: 404 Level of difficulty: Medium

67. No matter what the “service” consumers can judge the quality that they receive from the service provider.


68. Because services are generally high in experience and credence qualities, there is more risk in purchase.

Answer: True Page: 404 Level of difficulty: Hard

69. Services have five distinctive characteristics, one of these five being “pure service.” Answer: False Page: 405 Level of difficulty: Medium

70. Intangibility with regards to a “service” means that the service cannot be duplicated across providers.


71. Service companies try to demonstrate their service qualities through physical evidence and presentation.


72. Inseparability in the context of a “service” means that the service provider and the service customer/consumer cannot be separated since one effects another.


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73. One of the strategies to equalize supply and demand for service providers is to price their services “high” when demand is low and “low” when demand is at its highest.

Answer: False Page: 407 Level of difficulty: Hard

74. Currently, businesses have so much data on their customers that they are able to differentiate customers by “tiers” thus providing equal services to each level or “tier.”


75. Customers are becoming more sophisticated about buying product support services and are pressing for “services unbundling.”


76. Because service encounters are complex interactions affected by multiple elements, adopting a holistic marketing approach might not work effectively.


77. Interactive marketing describes the employees’ skill in serving the client. Answer: True Page: 411 Level of difficulty: Medium

78. Clients judge service not only by its technical quality but also by its price. Answer: False Page: 411 Level of difficulty: Medium

79. The service quality of a firm is tested at each service encounter. Answer: True Page: 412 Level of difficulty: Medium

80. Customers form service expectations from such areas as past experiences, word of mouth, and advertising.


81. The “gaps” of service quality as illustrated by Parasuraman, Zeithaml, and Berry show exactly how a firm can eliminate all service failures quite easily.


82. The first “gap” is the “gap” between management’s perceptions of consumer expectations and consumers’ expected service.


83. The second “gap” is the “gap” between management perceptions of consumer expectations and the translation of these perceptions into service-quality specifications.


84. The third “Gap” is the “gap” between service-quality specifications and external communications to consumers.


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85. The fifth “gap” is the “gap” between external communications and the consumers expected service.


86. Various studies have found that the well-managed service companies share no common service characteristics.


87. Top service companies are “customer obsessed.” Answer: True Page: 415 Level of difficulty: Medium

88. A service company can differentiate itself by designing a better and faster delivery system.


89. The three levels of differentiation for a service company include reliability, resilience, and cost.


90. Services can be judged on customer importance and company performance. Answer: True Page: 418 Level of difficulty: Medium

91. Studies of customer dissatisfaction show that customers are dissatisfied with their purchases about 25 percent of the time and about 15 percent of them complain.


92. Excellent service companies know that positive employee attitudes will promote stronger customer loyalty.


93. Service marketers have no problem in differentiating their services from the competition.


94. Service offerings can be differentiated in numerous ways because the consumer only expects to see the company’s primary service package.


95. The company need not define the customer needs carefully because customer’s can always switch providers.


96. A manufacturer can offer and charge for product support services only when negotiating the final price of the product.


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97. Service contracts and extended warranties are examples of companies charging for additional services.


98. Developing brand strategies for a service brand requires special attention to choosing brand elements, establishing image dimensions, and devising the branding strategy.


99. Service firms must therefore design marketing communications and information programs so that consumers learn more about the brand than the information they get from service encounters alone.


100. Services must consider developing a brand hierarchy and brand portfolio that permits positioning and targeting of different market segments.


Essay

101. A company’s offerings often include services. The service component can be a minor or a major part of the total offering. Five categories of offering can be distinguished. Please list, briefly explain each category, and offer an example of each.

Suggested Answer: The five offerings are: (1) pure tangible good—offering consists primarily of a tangible good—no services accompany this product; (2) tangible good with accompanying services—offering consists of a tangible good accompanied by one or more services—cars; ( 3) hybrid—offering consists of equal parts of goods and services—restaurants; (4) major service with accompanying minor goods and services—offering consists of major services along with additional services or supporting goods—airlines; and (5) pure service —offering consists primarily of a service—baby-sitting.Pages: 403-404 Level of difficulty: Easy

102. Services have four distinctive characteristics that greatly affect the design of marketing programs. Please list these characteristics and briefly explain each.

Suggested Answer: The characteristics are: (1) intangibility—services cannot be seen, tasted, felt, heard, or smelled before they are bought; (2) inseparability—services are produced and consumed simultaneously; (3) variability—because services depend on who provides them and when and where they are provided, they are highly variable in their delivery/consistency; and (4) perishability—services cannot be stored, inventoried, or shelved Pages: 405-407 Level of difficulty: Medium

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103. Customers’ expectations are the true standards for judging service quality. The chapter provides a service-marketing checklist of six questions to see if the firm is managing and exceeding customer expectations. List these “six” items from the checklist.

Suggested Answer: (1) Do we strive to present a realistic picture of our service to customers? (2) Is performing the service right the first time a top priority? (3) Do we communicate effectively with customers? (4) Do we surprise customers during the service process? (5) Do our employees regard service problems as opportunities to impress customers? (6) Do we continuously evaluate and improve our performance against customers’ expectations?

Page: 409 Level of difficulty: Hard

104. The service quality of a firm is tested at each customer encounter. Parasuraman, Zeithaml, and Berry formulated a service-quality model that highlights the main requirements for delivering high service quality. The model identifies five gaps that cause unsuccessful delivery. Please list and define each of these “gaps.”

Suggested Answer: The five gaps are: (1) the gap between consumer expectation and management perception; (2) the gap between management perception and service-quality specification; (3) the gap between service-quality specifications and service delivery; (4) the gap between service delivery and external communications; and (5) the gap between perceived service and expected service. Page: 413 Level of difficulty: Hard

105. Based on the service-quality “gaps” model, the researchers identified five

determinants of service quality. List and briefly explain each.

Suggested Answer: The five determinants of service quality are: (1) reliability— the ability to perform the promised service dependably and accurately; (2) responsiveness—the willingness to help customers and to provide prompt service; (3) assurance—the knowledge and courtesy of employees and their ability to convey trust and confidence; (4) empathy—the provision of caring, individualized attention to customers; and (5) tangibles—the appearance of physical facilities, equipment, personnel, and communication material. Page: 414 Level of difficulty: Hard

106. The model of service-quality expectations is based on the premise that customer perceptions and expectations of service quality change over time, but at any one point in time are a function of prior expectations of what will and what should happen during the service encounter, as well as the actual service delivered during the last contact. The researchers’ empirically tested model contends that the two different types of expectations have opposing effects on perceptions of service quality. List these two models.

Suggested Answer: The two models are: (1) increasing customer expectations of what the firm will deliver can lead to improved perceptions of overall service

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quality; and (2) decreasing customer expectations of what the firm should deliver can lead to improved perceptions of overall service quality. Page: 415 Level of difficulty: Hard

107. Developing brand strategies for a service brand requires special attention to the elements of branding and marketing. Explain why it is different for branding a service versus a tangible product.

Suggested Answer: First, choosing brand elements—the intangibility of services has implications for the choice of brand elements. Because service decisions and arrangements are often made away from the actual service location, brand recall becomes critically important. Second, establishing image dimensions— organizational associations are likely to be particularly important brand associations that may affect evaluations of service quality directly or indirectly. Service firms must design marketing communication and information programs so that consumers learn more about the brand than the information they get from service encounters alone. Lastly, devising branding strategy—services must also consider developing a brand hierarchy and brand portfolio that permits positioning and targeting of different market segments. Classes of service can be branded vertically on the basis of price and quality and vertically by sub-branding strategies where the corporate name is combined with an individual name or modifier. Pages: 423—424 Level of difficulty: Hard

108. Manufacturers’ of equipment have to provide product support services. Product support services are becoming a major battleground for competitive advantages. Firms that provide high-quality service outperform their less-service orientated competitors. In service support programs, customers generally have three specific worries. Please list these three worries and briefly explain each.

Suggested Answer: These are: (1) Customers worry about the reliability and failure frequency of the product. 2) Customers worry about downtime caused by the failure of the product. 3) Customers worry about out-of-pocket costs associated with the product failure. Page: 425 Level of difficulty: Hard

109. Several strategies exist for managing supply and demand of services. List the strategies for both managing “supply” and then for managing “demand.”

Suggested Answer: To manage “demand”—differential pricing, non-peak demand, complementary services, and reservation systems can all be used.To manage “supply”—part-time employees, peak-time efficiency, increased consumer participation, shared services, and facilities for future expansion. Page: 407 Level of difficulty: Hard

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110. Service companies can try to demonstrate their service quality through physical evidence and presentation. Service marketers must be able to transform intangible services into concrete benefits. Carbone and Haeckel proposed a set of concepts called “customer experience engineering”. Explain this concept.

Suggested Answer: Companies must first develop a clear picture of what they want the customer’s perception of an experience to be and then design a consistent set of performance and context clues to support that experience. The context clues are delivered by people (humanics), and things (mechanics). The company assembles the clues in an experience blueprint. To the extent possible, the clues should address all five senses. Page: 405 Level of difficulty: Hard

APPLICATION QUESTIONS

Multiple Choice

111. A plumbing firm is considered a service firm since they are providing “services” to households and businesses. The service component then would fall into which one of the following categories of offerings? a. Pure tangible good.b. Tangible good with accompanying services.c. Hybrid.d. Major service with accompanying minor goods and services.e. Pure service.Answer: b Page: 403 Level of difficulty: Easy

112. Some services are easy to evaluate by the consumer and others are not. Which one of the following would be considered high in credence qualities and thus hard to evaluate by the majority of consumers? a. Decorating. b. A restaurant. c. A haircut. d. A medical diagnosis. e. None of the above.

Answer: d Page: 404 Level of difficulty: Medium

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113. Services can be high in search qualities. Which one of the following is NOT seen as high in search qualities?a. Decorating. b. A restaurant.c. A haircut.d. A medical diagnosis.e. None of the above.Answer: d Page: 404 Level of difficulty: Medium

114. If we say that services cannot be seen before purchasing—that is a customer must experience other clues to the service quality besides the tangible aspect, we are saying that a service is _________. a. intangible b. inseparable c. perishable d. varies e. none of the above


115. Service companies try to communicate quality to their customers through physical evidence. For a restaurant, which of the following would play a key role in communicating the message “eat here” to customers’ best? a. Peopleb. Place c. Equipmentd. Price e. Symbols


116. Services are produced and consumed simultaneously. As a service provider how can you overcome this limitation in an attempt to reach an ever-greater market and customer base? a. Train others to perform my service.b. Use television. c. Work with larger groups.d. Use the Internet.e. All of the above.


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117. Services vary depending who provides them and when and where they are performed. Which of the following strategy would work for you to increase the quality control over your tax preparation services as you expand to other markets? a. Invest in good training and hiring procedures. b. Standardize the service.c. Monitor customer satisfaction. d. None of the above. e. Answers a, b and c.


118. When the cell phone providers’ offer “weekends free” they are attempting to ________ when it comes to the perishability of the service they provide. a. manage supply and demand b. manage supplyc. manage demandd. offer to sign up new subscriberse. increase usage


119. When restaurants and theme parks add summer workers, they are attempting to manage supply and demand for their services by ________. a. shared servicesb. complementary servicesc. nonpeak demandd. using part-time employeese. increasing enrollment


120. When a “good customer’s” phone call is answered within 15 seconds, and others within 10 minutes, firms are providing high service to their best customers. This is an example of ________ in service marketing. a. increased customer participation b. performing for the “key” customerc. customer relationshipsd. customer differentiatinge. peak-time efficiency

Answer: d Pages: 408–409 Level of difficulty: Medium

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121. I have switched my dry cleaning provider because the cleaner did not perform up to my standards. This is an example of which of the following customer switching behaviors? a. Service encounter failure.b. Core service failure.c. Response to service failure.d. Involuntary switching. e. Competition.


122. After sending registered letters to the roofing company, numerous attempts to contact the president of the company by phone, and sending copies of the complaint to the Better Business Bureau, you finally received a response from the firm that did not satisfy you. In desperation, you decided to have another company complete the repairs to your home. This is an example of what kind of customer switching behavior on your part? a. Involuntary switching.

b. Competition.c. Response to service failure.d. Service encounter failures.e. Inconvenience.


123. As you prepare to enjoy a night at the theater, your expectations rise as you listen to the music, read the reviewers comments, and reflect back to the last time you saw the same musical. All of these form your “expected service.” If a “gap” were to exist, it would exist here between your “expected service” and the _________ of the musical.

a. perceived performance b. external communication of the performance c. management perceptions of consumer expectations d. translation of perceptions into service-quality specifications e. none of the above


124. When the lawn service firm advertises, “We can handle all your lawn needs in one stop” and then requires three or four visits to satisfy you, this is an example of which one of the “gaps” of service performance? a. Between service delivery and translation of perceptions. b. Between expected service and perceived service. c. Between service delivery and external communications.d. Between management’s perception and consumers expectations. e. None of the above.


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125. At the customer counter of your neighborhood tire dealer, you overhear the manager tell a customer “Mrs. Jones, you have our assurance that we can fix your car.” This comment increases your belief in the service quality of the organization by communicating _________ to you and Mrs. Jones. a. tangibles b. reliability c. assuranced. responsivenesse. empathy


126. The first time you tried a local restaurant, the food and service was disappointing. However, giving them the benefit of the “doubt” you agree to try the restaurant a second time. Your rationale is that you have a minimum level of service that you would deem satisfactory and a ________ where you believe that service can and should be delivered within. a. reliability

b. responsiveness c. expectations d. gap e. zone of tolerance


127. After visiting a local car dealer and having your car serviced, a day later you receive a phone call from a research firm asking you to comment on your service experience. This is part of the manufacturer’s quality control over its dealers and the firm’s audit of the service performance by collecting _________.

a. satisfying customer complaints b. dealer performance c. customer performance d. “voice of the customer measurements” e. “competitive data”


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128. You were disappointed in the way your carpets were cleaned by a carpet cleaning company. The manager of the firm immediately dispatched a “second” team to re-clean your carpets at no additional costs. In addition, the manager made a visit to your house the next day to personally inspect the work and to ensure that you were completely satisfied with his company. As a result, you will recommend this carpet cleaning company to friends and family. This service provider knows that ________.

a. if the complaint is resolved quickly, the consumer will not “bad mouth” the firm

b. major and minor complaints do not affect future purchases c. if the complaint is resolved quickly between 52 percent and 95 percent of the

consumers will buy again from the company d. if the complaints are handled quickly, the firm will not be liable for future

damages e. none of the above


129. Because services are intangible and the service decisions are often made away from the actual service location itself, brand recall becomes critically important. As you begin to consider a starting your own tax service firm, you must consider the importance of ________.

a. your educational experience b. the location of your office c. using the family’s ethnic surname d. using a name that reflects your occupation e. creating an easy to remember brand name


130. The prominent location of diploma’s, organizational memberships, board memberships, and certifications/qualifications on the walls of service providers is their attempt(s) to _________.

a. establish image dimensions such as perceptions b. establish the fact that they can charge higher fees due to their superior qualifications

c. attempt to discourage customers that cannot afford their fees d. attempt to compensate for some other shortcoming like years of experience e. none of the above


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Short Answer

131. Manufacturers can offer and charge for product support services in different ways. One firm charges for extended warranties. What are some other ways that manufacturers charge for services?

Suggested Answer: They can offer facilitating services, value-augmenting services, and service contracts. Page: 425 Level of difficulty: Hard

132. When a consumer buys a piece of equipment, such as a lawn tractor, they consider the life-cycle cost of the equipment. Explain what is meant by “life-cycle” cost?

Suggested Answer: The life-cycle cost is the product’s purchase cost plus the discounted cost of maintenance and repair less the discounted salvage value. Page: 425 Level of difficulty: Hard

133. The “brown trucks” of UPS is a strong moniker for the firm. Explain why such physical facilities are especially important.

Suggested Answer: The intangibility of services has implications for the choice of brand elements. Because service decisions and arrangements are made away from the actual service location, brand recall becomes critically important. And because a physical product does not exist, all aspects of the service delivery process can be branded. Page: 423 Level of difficulty: Easy

134. Researchers have outlined 10 “lessons” for improving service quality across services industries. What are the 10 “lessons”?

Suggested Answer: These 10 “lessons” are: listening, reliability, basic service, service design, recovery, surprising customers, fair play, teamwork, employee research, and servant leadership. Page: 417 Level of difficulty: Hard

135. The SERVQUAL scale includes the five determinants of service quality. Companies schooled in and practitioners of this craft are among the highest rated consumer friendly firms doing business today. What are the five determinants that firms like Southwest, Disney, and Marriott honor so highly?

Suggested Answer: These five determinants are: reliability, responsiveness, assurance, empathy, and tangibles.Page: 414 Level of difficulty: Medium

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136. The last time you were in this restaurant, your dinner was excellent “as you remember it” and tonight is your anniversary and as such, you are looking forward to an enjoyable evening. At the end of the meal, your perception is that the service was not up to “par” and the evening was not as successful as you had hoped. In the service quality model, which “gap” prevailed?

Suggested Answer: This would be “gap” number 5—the difference between expected service and perceived service. Page: 413 Level of difficulty: Easy

137. As a newly hired marketing associate, you have asked your boss if the firm has service-quality specifications spelled out for ensuring exceptional customer service. His answer is “no, we all know what the consumer expects; after all we have been doing this for over 30 years.” Recalling your marketing management services marketing chapter, you identify this attitude as a factor leading to the creation of what “gap” in the service-quality model?

Suggested Answer: The “gap” between management’s perception of consumer expectations and the expected service by the consumer—”gap” number 1. Page: 413 Level of difficulty: Hard

138. The creation of “service standards” such as a policy of answering the company’s phone on the second ring, is an example of a firm trying to prevent which of the service-quality “gaps” from ever beginning?

Suggested Answer: This is an example of translating the consumer perceptions into service-quality specifications in order to prevent “gap” number 2 from existing—the difference between management perceptions of consumer expectations and the translations of perceptions into service-quality specifications. Page: 413 Level of difficulty: Medium

139. In your service firm, you and your colleagues are always choosing between fully answering the consumer’s questions and waiting on the next customer. The firm’s standards are not clear on how they want you to perform. When asked, your boss answers “you make the decision.” This is an example of which service-quality “gap”?

Suggested Answer: “Gap 3”—the difference between service-quality specifications and service delivery. Page: 413 Level of difficulty: Medium

140. In the pool advertisement, it reads “a pool for $3,000 total cost.” Upon contracting with the firm for the pool, the sale representative tells you that the total cost will be $6,000. When you ask why the extra $3,000, the sales rep says that is for the removal of the dirt. This is an example of which one of the service-quality “gaps”?

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Suggested Answer: This is an example of “gap” number 4—external communications to consumers and service delivery. Page: 413 Level of difficulty: Medium

141. Interactive marketing describes the employees’ skill in serving the client. After your recent stay in the hospital, the hospital calls and asks you a series of questions about your stay. Here the hospital is trying to collect data about the two aspects of the service that clients use to judge a service.

Suggested Answer: Service is judge by its technical quality (did the service provider actually fix the car), and its functional quality (am I confident that the car will work correctly). Page: 438 Level of difficulty: Medium

142. What are the risks to a firm that continuously proclaims “superior service”?

Suggested Answer: Customers that receive poor treatment will bad-mouth the company and injure its reputation. Delivering services that maximize both customer satisfaction and company profitability can be challenging. Page: 409 Level of difficulty: Easy

143. When you call your bank to inquire about your balance, instantaneously the bank relegates you to a “tier” based upon your profitability to the bank. The best customers receive the best service and so on. What are the causes that shifted customer service from a democracy to a meritocracy?

Suggested Answer: The shift from customer service democracy to a meritocracy is a response to lower profit margins resulting from customers becoming more price-driven and less loyal. Companies are now driven to seek ways to squeeze more profit out of the different customer tiers. Page: 408 Level of difficulty: Hard

144. In developing a service blueprint, your firm has outlined each step in the delivery process of the service it provides. The development of a service blueprint is an attempt to minimize what element or characteristic of a service?

Suggested Answer: This is an attempt to reduce the variability of the service by standardizing the service-performance process. Page: 406 Level of difficulty: Medium

145. Services cannot be stored. Attempts to regulate the “demand” of a service include reservation systems and differential pricing. What are some other ways a firm can “shift” demand for its services to nonpeak times?

Suggested Answer: Complementary services can be provided to provide alternatives to waiting customers; nonpeak demand can be

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cultivated by offering “specials” during slower periods of the day/week/month/season.

Page: 407 Level of difficulty: Easy

146. Services cannot be stored or inventoried. Attempts to regulate the “services” on the supply side—to increase the service providers when needed include such strategies as part-time workers. What are some other ways a firm can “shift” supply for its services?

Suggested Answer: Other strategies include peak-time efficiency; increased customer participation in the service; shared services; and facilities for future expansion rent necessary equipment for the short period. Page: 407 Level of difficulty: Medium

147. Services cannot be seen, tasted, or felt, before purchase. The challenge to marketers of services is to “tangibilize the intangible” and “manage the evidence.” What do these statements really mean for a marketer of a service firm?

Suggested Answer: Service companies can try to demonstrate their service quality through physical evidence and presentation. Customers will draw inference about the quality of the service to be provided by the place, people, equipment, communication material, symbols, and price. Page: 405 Level of difficulty: Medium

148. You have been asked by your firm to evaluate the “service” of one of its competitors (a restaurant). As you understand service, services differ according to form and purpose. Explain how you classify services.

Suggested Answer: Services vary as to whether they are equipment-based or people-based. Services can be differentiated as to the processes used and whether or not the client/customer needs to be physically present for the service to be performed. Services differ whether or not there are people-based or business-based and whether or not they are profit or nonprofit objectives. Page: 404 Level of difficulty: Medium

149. There are five categories of service offerings depending upon whether or not the service component is minor or major. In which of the five categories would you place a restaurant?

Suggested Answer: A restaurant would be considered a hybrid—the offering consists of equal parts of goods and services.

Page: 403 Level of difficulty: Easy

150. Customers’ expectations are the true standards for judging service quality. In service delivery, asking key questions and honestly answering them is critical to delivering excellent customer service. On the employees lunch room bulletin

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board is this question: Are you performing the service right the first time? Explain this question from a service perspective.

Suggested Answer: Service providers constantly need to ask questions to ensure that they are exceeding customer’s expectations as customer’s expectations change over time. From a service provider’s perspective, it is cheaper to perform the service right the first time than to have to re-do it. Other questions that service providers can ask include: Are we regularly evaluating our service designs to identify and correct potential flaws? Have we trained our employees to perform the service right the first time and have we rewarded them for delivering error-free service? Are we asking our employees to “choose” between error-free service performance and increased efficiency/increased productivity? Page: 409 Level of difficulty: Hard

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