Marketing Management Chap 14
35) Walmart has decided to hire extra clerks during the holiday season. It is said to be ________. A) matching its supply with the existing demand B) generating nonpeak demand C) increasing its customer participation D) sharing its services E) facilitating for its future expansion
A
6) A flight with complementary drinks is an example of a ________. A) major service with accompanying minor goods and services B) pure service C) pure tangible good D) tangible good with accompanying services E) hybrid
A
4) A computer falls into the ________ category of service mix. A) pure tangible good B) tangible good with accompanying services C) hybrid D) major service with accompanying minor goods E) pure service
B
53) Service companies try to demonstrate their service qualities through physical evidence and presentation.
TRUE
70) The highest-ranking companies in a 2013 Forrester study of services that meet customer needs and were easy and enjoyable to do business with included Marshalls, TJ Maxx, JCPenney, and Marriott Hotels & Resorts.
TRUE
95) Clients judge service not only by its technical quality but also by its functional quality.
TRUE
129) Responsiveness is a company's willingness to help customers and provide prompt service.
TRUE
131) The appearance of physical facilities, equipment, personnel, and communication materials are the tangibles that convey service quality to consumers.
TRUE
154) Out-of-pocket costs are what the customer spends on regular maintenance and repair costs.
TRUE
37) The private nonprofit sector is a provider of services.
TRUE
41) Soap is an example of a pure tangible good.
TRUE
93) Interactive marketing describes the employees' skill in serving the client.
TRUE
96) Importance-performance analysis rates the various elements of the service bundle and identifies required actions.
TRUE
97) The answer to the question "was the surgery successful?" represents the technical quality aspect of interactive marketing, one of the three broad areas of service excellence.
TRUE
98) Customers who view a service as fairly homogeneous care less about the provider than about the price.
TRUE
99) What the customer expects from a service is called the primary service package.
TRUE
51) Services have five distinctive characteristics, one of these being "pure service."
FALSE
52) Intangibility with regards to a service means that the service cannot be duplicated across providers.
FALSE
56) The quality of services is independent of who provides them.
FALSE
92) External marketing describes the training and motivation required by employees in order to properly serve the customers.
FALSE
36) Kaya, a chain of skin clinics, requests each new visitor to fill in their own details on a printed form. This is a step in ________. A) increasing its peak-time efficiency B) creating nonpeak demand C) increasing consumer participation D) sharing its services E) facilitating its future expansions
C
5) Which of the following is an example of a hybrid service? A) teaching B) car C) restaurant meal D) soap E) air travel
C
80) ________ marketing refers to the normal work of preparing, pricing, distributing, and promoting the service to customers. A) Interactive B) Internal C) External D) Promotional E) Direct
C
33) Cocktail lounges in restaurants are examples of ________. A) differential pricing B) cultivating nonpeak demand C) complementary services D) reservation systems E) shared services
C
24) Service quality depends on who provides them, when and where they are provided, and to whom they are provided. Thus, services are highly ________. A) inseparable B) tangible C) variable D) perishable E) intangible
C
127) Pricing has no negative effect on customer loyalty.
FALSE
128) If expected service falls below perceived service, customers are disappointed.
FALSE
133) Aida decided to switch doctors after she had to wait two and a half hours at her scheduled appointment to see her doctor. She experienced the ethical problem factor that leads to customer switching behavior.
FALSE
134) The payment equity for a service is a range from the minimum level of service consumers are willing to accept to the level they believe can and should be delivered.
FALSE
155) Value-augmenting services include installation, staff training, maintenance and repair services, and financing.
FALSE
40) The production of a service is never tied to a physical product.
FALSE
50) While goods meet personal needs, services meet business needs.
FALSE
73) A person who has a bad customer experience is more likely to talk about it, but someone who has a good experience will talk to more people.
FALSE
94) In the hotel industry, primary service features include merchandise for sale, free breakfast buffets, and loyalty programs.
FALSE
144) A cosmetics store sees to it that customers who walk in are assisted by store personnel. Personnel are trained to ask customers questions, find out what they want, and make suggestions accordingly. Which of the five determinants of service quality is reflected here?
The determinant of service quality that is reflected here is empathy. The outlet not only cares about its customers, but also gives them individualized attention.
136) List the eight different variables that influence service outcome and customer loyalty.
The eight major variables that influence service outcome and customer loyalty are: 1. Pricing: High price, price increases, unfair pricing, or deceptive pricing prompt customers to change their loyalty. 2. Inconvenience: If a customer is made to wait for his appointment or service, there is a chance that he will think of shifting his loyalty. 3. Core service failure: Service failures, billing errors, or service catastrophe influence service outcome and customer loyalty. 4. Service encounter failures: If the customer service representative is uncaring, impolite, unresponsive, or unknowledgeable, the service outcome and customer loyalty is influenced. 5. Response to service failure: If the customer service representative exhibits negative response or reluctant response or no response at all, the customer's loyalty is likely to shift. 6. Competition: A customer's loyalty changes if he finds a better service. 7. Ethical problems: If a customer thinks that the service provider is a cheat or his services are unsafe, then he starts looking for another service provider. 8. Involuntary switching: If the customer has to shift his base or the service provider has to close down, the customer's loyalty undergoes an involuntary shifting.
106) Although Brenda previously used the US Postal Service because it offered better prices on package shipping, she now uses only FedEx, because it gives her the facility of shipping from any FedEx location 24 hours a day. Which of the following factors led to Brenda's customer switching behavior? A) inconvenience B) pricing C) response to service failure D) ethical problems E) involuntary switching
A
124) According to the dynamic process model, two different types of expectations have opposite effects on perceptions of service quality. One of these is that ________ overall service quality. A) increasing customer expectations of what the firm will deliver improve the perceptions of B) increasing customer expectations of what the firm will deliver decrease the perceptions of C) decreasing customer expectations of what the firm should deliver decrease the perceptions of D) decreasing customer expectations of what the firm will deliver improve the perceptions of E) increasing customer expectations of what the firm should deliver improve the perceptions of
A
120) The ________ determinant of service quality refers to the knowledge and courtesy of employees and their ability to convey trust and confidence in the service they provide. A) conscientious B) assurance C) empathy D) reliability E) responsiveness
B
123) The zone of ________ is a range where a service dimension is deemed satisfactory, anchored by the minimum level consumers are willing to accept and the level they believe can and should be delivered. A) immunity B) tolerance C) reliability D) assurance E) flexibility
B
119) Josh gets his bike serviced at Dean's Garage even though there's another garage much closer to home. He prefers Dean's because the work is usually done quickly and the staff try to solve the issues with the bike as soon as possible. Dean's Garage excels at which of the following five determinants of service quality? A) reliability B) responsiveness C) assurance D) empathy E) tangibles
B
147) Regular maintenance and repair costs are known as ________ costs. A) service contract B) out-of-pocket C) fixed D) facilitating services E) value-augmentation
B
2) Which of the following is an example of a pure tangible good? A) massage B) shampoo C) e-mail D) restaurant meal E) air travel
B
20) BRZ Shoes positions itself as a young, adventurous brand. Its logo and brand communication try to give consumers a feeling of excitement and bravery. These ads appeal to the ________ dimension of brand experience. A) sensory B) affective C) behavioral D) intellectual E) social
B
25) Which of the following will help a service provider overcome the limits imposed by the inseparability of services? A) using differential pricing B) working with larger customer groups C) providing complementary services D) concentrating on physical evidence and presentation E) standardizing the service process
B
150) When Johnson Controls reached beyond its climate control equipment and components business to manage integrated facilities by offering products and services that optimize energy use, it was said to be providing ________. A) facilitating services B) a primary service package C) value-augmenting services D) service contracts E) service warranties
C
74) Define customer failures and list four methods to tackle them.
Customer failures refer to situations where service problems arise from a customer's lack of understanding or ineptitude. Some of the methods to solve such situations include the following: • Redesigning processes and redefining customer roles to simplify service encounters • Incorporating the right technology to aid employees and customers • Creating high-performance customers by enhancing their role clarity, motivation, and ability • Encouraging "customer citizenship" so that customers help customers
14) Which one of the following would be considered high in credence qualities? A) an interior of a house B) a restaurant C) a haircut D) psychotherapy E) a computer
D
81) ________ marketing refers to training and motivating employees to serve customers well. A) External B) Promotional C) Direct D) Internal E) Interactive
D
151) When sellers agree to provide free maintenance and repair services for a specified period of time at a specified contract price, they are offering ________. A) a complementary service B) payment equity C) a service blueprint D) differential pricing E) an extended warranty
E
132) The zone of tolerance for a service is the perceived economic benefit in relationship to the economic cost.
FALSE
153) A product's purchase cost plus the discounted cost of maintenance and repair less the discounted salvage value is known as the product's activity cost.
FALSE
156) Traditionally, customers have had three specific worries about product service. What are they?
Manufacturers of equipment — small appliances, office machines, tractors, mainframes, airplanes — all must provide product-support services. The three specific worries about product services that customers face are: 1. They worry about reliability and failure frequency. For example, a farmer may tolerate a combine that will break down once a year, but not two or three times a year. 2. They worry about downtime. The longer the downtime, the higher the cost. The customer counts on the seller's service dependability which refers to the seller's ability to fix the machine quickly or at least provide a loaner. 3. They worry about out-of-pocket costs, which refers to the amount they have to spend on regular maintenance and repair costs.
38) A service is essentially intangible.
TRUE
137) The service-quality model highlights the main requirements for delivering high service quality. Which are the five gaps that cause unsuccessful delivery?
The five gaps that cause unsuccessful customer service delivery are as follows: 1. The gap between consumer expectation and management perception: The management does not always correctly perceive what customers want. 2. The gap between management perception and service-quality specification: The management might correctly perceive customers' wants but not set a performance standard. 3. The gap between service-quality specifications and service delivery: The employees might be poorly trained, or incapable of or unwilling to meet the standard, or they may be held to conflicting standards, such as taking time to listen to customers and serving them fast. 4. The gap between service delivery and external communications: The consumers' expectations are affected by statements made by company representatives and ads. 5. The gap between perceived service and expected service: This gap occurs when the consumer misperceives the service quality.
126) A(n) ________ interface refers to any place at which a company seeks to manage a relationship with a customer, whether through people, technology, or some combination of the two. A) customer-service B) product-customer C) tangible user D) attentive user E) crossing-based
A
11) Services high in ________ qualities have characteristics that the buyers can evaluate before purchase. A) search B) experience C) credence D) privacy E) storing
A
17) Which of the following will most help service providers overcome the limitation of intangibility of services when positioning itself? A) using brand symbols B) sharing services C) working with larger groups D) cultivating nonpeak demand E) creating a service blueprint
A
19) BRZ Shoes targets the youth market with vibrant, visually appealing ads in modern styles. BRZ ads appeal to the ________ dimension of brand experience. A) sensory B) affective C) behavioral D) intellectual E) social
A
16) Unlike physical products, services cannot be seen, tasted, felt, heard, or smelled before they are bought. This is known as the ________ aspect of services. A) inseparability B) intangibility C) variability D) perishability E) heterogeneity
B
86) Firms have decided to raise fees and lower service for those customers who barely pay their way and to coddle big spenders to retain their patronage as long as possible. This is an example of organizing customers by ________. A) retailer convenience B) profit tiers C) psychographic characteristics D) social influence E) customer preference
B
1) Which of the following is a characteristic of a service? A) The service is essentially tangible. B) The service does not result in the ownership of anything. C) The service's production is majorly tied to a physical product. D) Services are typically produced and consumed at different times. E) A client's presence is not required for rendering a service.
B
107) Angela switched to a new hair stylist after getting a bad haircut from her previous stylist. This is an example of which of the following factors leading to customer switching behavior? A) service encounter failure B) core service failure C) response to service failure D) involuntary switching E) competition
B
118) The customer service representatives at G.K.'s customer service center must know as much about the products as possible, so that they can help customers solve their difficulties without sounding hesitant or unsure of themselves. Which of the following determinants of service quality are they being asked to demonstrate? A) responsiveness B) assurance C) empathy D) reliability E) tangibility
B
30) A travel agency offers weekend discounts for car rentals. What can be deduced from this? A) It is increasing peak-time efficiency. B) It is using differential pricing. C) It is using linear pricing. D) It is cultivating peak demand. E) It is providing complementary services.
B
7) Which of the following is an example of a pure service? A) air travel B) psychotherapy C) baby oil D) a laptop E) a restaurant meal
B
65) In developing a service blueprint, The Flower Shop has outlined each step in the delivery process of the service it provides. Which characteristic of services is The Flower Shop attempting to minimize?
By developing a service blueprint, Beth's Inc. is making an attempt to reduce the variability of the service. Because the quality of services depends on who provides them, when and where, and to whom, services are highly variable. A service blueprint will standardize the entire service process.
34) Which of the following is an example of a complementary service? A) Big department stores usually hire extra staff to handle the rush during the holiday season. B) The Caesar Park Hotel generally caters to business customers during the week, but has now decided to promote mini-vacation weekends for non-business customers as well. C) More paramedics are on hand to assist physicians during times when emergency admissions are highest. D) AXA Bank set up automated teller machines so that its customers could avoid standing in line. E) Chesterton College hires part-time teachers when enrollment goes up.
D
112) The customer service representatives at a call center have been asked to handle each call within five minutes. A recent customer survey by the company revealed that customers appreciate it when employees take the time to answer their questions fully and listen to their grievances. What kind of service gap is apparent here? A) gap between perceived service and expected service B) gap between service delivery and external communications C) gap between service-quality specifications and service delivery D) gap between management perception and service-quality specification E) gap between consumer expectation and management perception
D
122) Gloria goes to the same bagel shop every morning because the workers there remember her name and remember her order. They always make her feel welcome. The employees of this bagel shop excel at which of the following determinants of service quality? A) reliability B) responsiveness C) assurance D) empathy E) tangibles
D
29) When a theater sells matinee movie tickets at low prices, it aims to shift some demand from the peak to the off-peak period. What is the strategy that the theater is said to be adopting? A) It is providing complementary services. B) It is increasing peak-time efficiency. C) It is using linear pricing. D) It is using differential pricing. E) It is sharing services.
D
67) Customers today want separate prices for each service element, and they also want the right to select the elements they want. Customers are said to be pressing for ________ services. A) complementary B) perishable C) variable D) unbundled E) shared
D
88) The ________ rates the various elements of the service bundle and identifies required actions. A) company performance analysis B) voice of customer measurement C) customer factor measurement D) importance-performance analysis E) customer importance analysis
D
76) Debbie's is a specialty bakery that sees a huge volume of orders during the holiday season. The owner knows that orders triple during the three-month period and the current staff cannot handle the volume. What supply strategy can Debbie's use to handle the demand?
Debbie's can employ people on contract just for the holiday season to help the company cope with the spike in demand.
13) Services high in ________ qualities are those services that have characteristics the buyer normally finds hard to evaluate even after consumption. A) trial B) search C) experience D) privacy E) credence
E
15) Which one of the following is highest in search qualities? A) a play at a theater B) a meal at a restaurant C) a haircut D) psychotherapy E) a computer
E
22) Which of the following is true regarding services? A) Services are typically produced, stored, and then consumed. B) Services are generally low in experience and credence qualities. C) Service providers develop similar marketing programs for personal services and business services. D) There is less risk associated with the purchase of services than with the purchase of goods. E) Provider-client interaction is a special feature of services marketing.
E
27) In order to map out the service process, the points of customer contact, and the evidence of service from the customer's point of view, service firms should develop a ________. A) marketing plan B) service floor plan C) Gantt chart D) business plan E) service blueprint
E
3) To which of the following categories of services does a cell phone belong? A) major service with accompanying minor services B) major service with accompanying minor goods C) pure service D) pure tangible good E) tangible good with accompanying services
E
100) Secondary service features are the features that the customer himself or herself adds to the service.
FALSE
130) Reliability refers to the company's willingness to help customers and provide them with prompt service.
FALSE
152) If the length of downtime increases, the cost incurred decreases.
FALSE
103) What are the expert recommendations for e-mail responses to customers?
Send an automated reply to tell customers when a more complete answer will arrive, ensure the subject line always contains the company name, make the message easy to scan for relevant information, give customers an easy way to respond with follow-up questions.
135) A customer-service interface is defined as any place at which a company seeks to manage a relationship with a customer.
TRUE
69) Customers want unbundled services, with separate prices for each service element and the right to select the elements they want.
TRUE
71) When golf courses provide rules for playing and behaving appropriately, and customers encourage other customers to follow the same rules, they are encouraging customer citizenship via customer coproduction.
TRUE
72) Customers cause many service failures, and the number of customer-caused failures is increasing.
TRUE
157) An oil drilling company ordered a number of pumpjacks for its operations. The pumpjack is an essential part of its operations and the company needs the equipment to be operational at all times. How can the pumpjack manufacturer demonstrate its service dependability?
The manufacturer can demonstrate its dependability by being prompt to repair the equipment when it fails, and providing replacements when the repairs will take a long time.
116) When Aaron went to his doctor for his annual checkup, he was asked to undergo a number of tests. Although the doctor assured Aaron that the tests were routine, Aaron thinks that the doctor is hiding a grave problem from him. What kind of a gap is apparent here? A) gap between perceived service and expected service B) gap between service delivery and external communications C) gap between service-quality specifications and service delivery D) gap between management perception and service-quality specification E) gap between consumer expectation and management perception
A
10) Some services require that the client be present to conduct the service. Which of the following is an example of such a service? A) pest control B) furniture polishing C) surgery D) car repairing E) tax services
C
125) When customers calculate the perceived economic benefits of a continuously provided service in relationship to the economic costs, they are gauging the ________ equity. A) private B) brand C) payment D) customer-service E) product-service
C
143) The last time Betty visited Zing's, the food was excellent. Tonight is her anniversary and she was looking forward to an enjoyable evening. After the meal, she starts feeling that the service was not up to par and the evening was not as successful as she had hoped. According to the service-quality model, which gap is obvious here?
The gap prevalent here is the gap between perceived service and expected service. This gap occurs when the customer misperceives the service quality.
114) Which of the following is an example of a gap between service delivery and external communications? A) The employees at GBL have been asked to take time to listen to customers, but they must serve them fast as well. B) Amanda chose to shop at Alison's Fashions because the store's Web site offered on-the-spot alterations. However, when she did buy a dress, she had to wait a week to get it altered. C) Customers at LUX appreciate the personalized services the salespeople offer, but do not like the store design. D) Clearwater Spa attendants are well-trained in massage therapy and the services they offer, but customers rarely return because they don't like the attendants' impersonal service. E) When sales dropped, Styx modernized its stores in order to retain customers, but didn't realize that the product quality was the main problem.
B
109) Which of the following represents an aspect of the Empathy dimension of SERVQUAL? A) providing service as promised B) readiness to respond to customers' requests C) giving customers individual attention D) making customers feel safe in their transactions E) visually appealing facilities
C
113) The customer service representatives at a call center have been asked to handle each call within five minutes. At the same time, they have been asked to answer all customer queries in detail and provide appropriate solutions. What kind of service gap is apparent here? A) gap between perceived service and expected service B) gap between service delivery and external communications C) gap between service-quality specifications and service delivery D) gap between management perception and service-quality specification E) gap between consumer expectation and management perception
C
115) Ellen came across an ad for a new restaurant that promised authentic French cuisine. When she ate there, however, she was disappointed to find that the food was mediocre and not very authentic. Which of the following gaps of service performance does this demonstrate? A) gap between service-quality specifications and service delivery B) gap between perceived service and expected service C) gap between service delivery and external communications D) gap between consumer expectation and management perception E) gap between management perception and service-quality specification
C
121) Leo's manager has asked him and his teammates to demonstrate caring towards customers. They are instructed to learn customers' names, and use names while interacting with them. Repeat customers should get special attention, and the team members should remember their preferences and habits. The manager is asking the team to be ________. A) assuring B) candid C) empathetic D) reliable E) responsive
C
148) A product's purchase cost plus the discounted cost of maintenance and repair less the discounted salvage value gives the ________ cost. A) service warranty B) out-of-pocket C) life-cycle D) facilitating services E) value-augmentation
C
9) When banks try to make their positioning strategies tangible through the ________ dimension, they make sure the exterior and interior have clean lines, the layout of the desks and the traffic flow are planned carefully, and waiting lines are not overly long. A) people B) symbols C) equipment D) place E) communication material
D
39) A service results in ownership on the part of the client.
FALSE
12) Services high in ________ qualities have characteristics that the buyer can evaluate after purchase. A) privacy B) experience C) credence D) search E) stock
B
46) The search qualities of a service are the characteristics the buyer can evaluate before purchase.
TRUE
48) The experience qualities of a good or service can be evaluated after purchase.
TRUE
54) Inseparability in the context of a service means that there is a provider-client interaction involved as the provider is part of the service.
TRUE
55) A service provider can work with larger groups to get around the limitations of inseparability.
TRUE
57) A demand side strategy that can produce a better match between service demand and supply is differential pricing.
TRUE
82) ________ marketing describes the employees' skill in serving the client. A) External B) Internal C) Promotional D) Direct E) Interactive
E
42) Salt is an example of a hybrid.
FALSE
43) A hybrid consists of unequal parts of goods and services, with services being in the majority.
FALSE
44) A pure service requires a capital-intensive good, but the primary item is a service.
FALSE
45) All services require the client to be present.
FALSE
47) Credence qualities of a service are difficult to evaluate before purchase, but easy to evaluate after consumption.
FALSE
49) Furniture is high in credence qualities.
FALSE
62) 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 haircut?
A hair salon would be considered a pure service because the service provided by a hair salon is primarily intangible in nature.
18) A brand that is action-oriented and causes consumers to engage in physical actions appeals to the ________ dimension of brand experience. A) sensory B) affective C) behavioral D) intellectual E) social
C
21) ________ refer(s) to logos, symbols, characters, and slogans that service providers use in order to make the service and its key benefits more tangible. A) Brand engagement B) Brand orientation C) Brand elements D) Brand loyalty E) Brand equity
C
79) How has the explosion of videos online affected service firms?
Not only customers but also employees can damage the firm's reputation, and the Internet greatly magnifies the impact. Many fast-food chains have had to deal with unflattering or inappropriate behavior their employees capture on video as a prank. Online clips have shown a Wendy's worker with his mouth wide open under a Frosty machine, a Domino's employee putting cheese up his nose and mucus on food meant for delivery, and a Taco Bell employee licking a stack of empty taco shells. Airlines and FedEx have also been affected by viral videos describing or showing poor service.
75) Provide four examples of companies that used solutions to service failures.
Student answers will vary. 1. Redesign processes and redefine customer roles to simplify service encounters. Staples transformed its business with its "Easy" program to take the hassle out of ordering office supplies. 2. Incorporate the right technology to aid employees and customers. Comcast, the largest US cable operator, introduced software to identify network glitches before they affected service and to better inform call-center operators about customer problems. Repeat service calls dropped 30 percent as a result. 3. Create high-performance customers by enhancing their role clarity, motivation, and ability. USAA reminds enlisted policyholders to suspend their car insurance when they are stationed overseas. 4. Encourage "customer citizenship" so customers help each other. At golf courses, players cannot only follow the rules by playing and behaving appropriately, they can encourage others to do so.
77) What are the four factors that customers who thrive in customer contact positions have an internal drive to do?
They have an internal drive to pamper customers, accurately read customer needs, develop a personal relationship with customers, and to deliver quality service to solve customers' problems.
26) Which of the following steps will help service firms to increase their quality control? A) standardizing the service-performance process B) providing complementary services to customers C) giving personnel authority in handling situations D) adopting differential pricing E) cultivating nonpeak demand
A
31) In which of the following cases is a service provider trying to increase nonpeak demand? A) A fine dining restaurant is promoting a breakfast service in addition to its popular lunch and dinner options. B) An upscale restaurant has a cocktail lounge where customers can wait until a table is ready. C) AXA Bank set up automated teller machines so that its customers could avoid standing in line. D) Chesterton College hired part-time teachers as enrollment increased significantly. E) Big department stores usually hire extra staff to handle the rush during the holiday season.
A
84) In which of the following does a customer respond to the technical quality of a service? A) Sara's preferred hair stylist is some miles away, but Sara goes to him because his styles suit her looks. B) Kathy tries out a new restaurant every week because she likes to experience the variety. C) Bill has gone to the same chiropractor for the past fifteen years because he is friendly and takes the time to listen to Bill. D) Ray avoids going to the bank as far as possible because the manager is rude and unhelpful. E) Alex has no interest in theater, but goes often because her best friend loves plays.
A
32) The Caesar Park Hotel generally caters to business customers during the week, but has now decided to promote mini-vacation weekends for non-business customers as well. What is the Caesar Park Hotel trying to do? A) It is implementing premium pricing. B) It is trying to cultivate nonpeak demand. C) It is promoting complementary services. D) It is putting reservation systems in place. E) It is implementing differential pricing.
B
68) Often, a service problem arises from a customer's lack of understanding or ineptitude. Which of the following can help to minimize customer failures? A) giving customers exclusive primary service packages B) redesigning processes to simplify service encounters C) using differential pricing and shared services D) minimizing service intangibility E) working with more customers at the same time
B
8) Which of the following is true for services? A) All services are people-based, while goods are equipment-based. B) Service providers can be both for-profit or nonprofit. C) All service companies follow the same process to deliver their services. D) The client's presence is a hindrance during the service delivery process. E) Service providers develop similar marketing programs for personal services and business services.
B
83) Susanna wanted to check out a new salon in her locality, so she decided to go for a hair styling session. She was very happy with the way her stylist connected and related with her concerns. She is judging the service based on its ________. A) promotional marketing B) functional quality C) technical quality D) search qualities E) external marketing
B
91) When the recent recession hit, Zappos decided to stop offering complimentary overnight shipping to first-time buyers and offer it to repeat buyers only, which is an example of the ________ best practice of top service companies. A) strategic concept B) profit tiers C) top-management commitment D) high standards E) monitoring systems
B
108) Dean recently had a BRZ broadband connection installed. However, the connection was poor and he didn't get the quality he required. He contacted BRZ about the problem, but the company did not solve his problem. Dean switched to Blue Broadband. Which of the following was the cause of Dean's switching behavior? A) involuntary switching B) competition C) response to service failure D) service encounter failures E) inconvenience
C
28) Jake had an appointment at the doctor's office, but couldn't make it on time due to traffic. By the time he arrived, the doctor had already begun with the next patient. This illustrates the ________ of services. A) variability B) heterogeneity C) perishability D) intangibility E) homogeneity
C
85) In which of the following does a customer respond to the functional quality of a service? A) Sara's preferred hair stylist is some miles away, but Sara goes to him because his styles suit her looks. B) Kathy tries out a new restaurant every week because she likes to experience the variety. C) Bill has gone to the same chiropractor for the past fifteen years because he is friendly and takes the time to listen to Bill. D) Ray's mechanic charges high prices for service, but his work is good and worth the price. E) Alex has no interest in theater, but goes often because her best friend loves plays.
C
87) Charles Schwab's best customers are instantly directed to customer service representatives, while other customers have to wait longer. Charles Schwab is trying to ________. A) monitor its service systems B) empower the customers C) retain the patronage of profitable customers D) increase consumer participation E) standardize the service-performance process
C
89) Customers who view a service as homogeneous ________. A) only patronize a preferred service provider B) judge services on the basis of the providers C) care less about the provider than about the price D) pick a service provider based on functional attributes E) opt for the service with the highest price, irrespective of quality
C
111) Which of the following is an example of a gap between management perception and the service-quality specifications? A) The college brochure showed state-of-the-art classrooms, but when the visitors walked in, they saw peeling walls and dull lighting. B) A nurse visits a patient to show care, but the patient interprets this as an indication that something is very wrong. C) The hotel administrators think that guests want better food, but guests are more concerned with the courtesy of the waiters. D) A service center manager has asked his subordinates to provide fast service, but has not specified a time for the service to be performed. E) Customer service representatives are asked to give ample time to each customer, but must serve a minimum of 50 customers a day.
D
117) The most important determinant of service quality is ________ which refers to the ability to perform the promised service dependably and accurately. A) empathy B) assurance C) responsiveness D) reliability E) tangibles
D
149) Expensive equipment manufacturers not only install the equipment but also train the staff and undertake the maintenance and repair activities of the equipment. By doing so, they are providing ________. A) payment equity B) value-augmenting services C) differential pricing D) facilitating services E) a primary service package
D
23) The fact that services are typically produced and consumed simultaneously is known as the ________ aspect of services. A) perishability B) intangibility C) heterogeneity D) inseparability E) variability
D
110) MGC Inc. organizes a company-wide picnic once a year. The organizers arranged for the best possible menu thinking that food would be a priority, but the staff were disappointed because the activities were very poorly planned. What kind of a gap is apparent here? A) gap between perceived service and expected service B) gap between service delivery and external communications C) gap between service-quality specifications and service delivery D) gap between management perception and service-quality specification E) gap between consumer expectation and management perception
E
90) Belling Hotels provides a complimentary breakfast buffet to all guests. This is an example of a ________. A) primary service package B) service interface C) service support D) service frequency E) secondary service feature
E
140) The manager of a computer service center knows that quick service is the top priority for customers. Accordingly, the employees are encouraged to solve customer difficulties fast, but there is no set time period for service delivery. Which gap could cause unsuccessful service delivery in this situation?
In this situation, there exists a gap between the management perception and the service-quality specification. Although, the management has correctly perceived the customers' want, it has not set a specific performance standard for employees.
139) Clearwater Spa operates on the premise that service quality is the main reason that customers come to the spa, and the attendants are trained to provide excellent service. Despite this, the spa rarely has repeat customers. Clearwater began collecting feedback from customers to find out the reason for this. The management realized that although the customers were happy about the services, they did not like the ambience. What kind of a gap is causing the unsuccessful service delivery in this situation?
In this situation, there is a gap between the consumers' expectations and the managements' perception. Management does not always correctly perceive what customers want. The spa management believes that customers want service quality, when the ambience is the real customer demand.
104) Some WesternSlope Cleaning customers have long-term contracts for full-service cleaning, while others call the company as and when they require a particular service. The long-term customers have their queries handled by the company's customer service representative. The rest of its customers are directed towards voice messages when they want their inquiries to be processed. What strategy is the company adopting to achieve marketing excellence?
The company is trying to differentiate its high-profit tier customers from its low-profit tier customers.
105) Retail chain REB wants to find out how its customers perceive its services and what it can do to improve these. What methods can the company use to discover this?
REB can audit service performance, both their own and competitors', on a regular basis. It can collect voice of the customer (VOC) measurements to probe customer satisfiers and dissatisfiers. It can use comparison shopping, mystery or ghost shopping, customer surveys, suggestion and complaint forms, and service-audit teams to find out customer reactions to the company.
146) Package delivery company UPS uses distinctive brown trucks that have become almost an icon. Explain why such physical facilities are important for UPS while it provides package delivery services.
Services are intangible. But when they are given a tangibility by using physical facilities, equipment, personnel, or communication material, customers find it easier to determine the service quality and distinguish the services of one firm from that of its competitor. Thus, UPS's trucks help the company differentiate its services from its competitors'.
64) Bryson's is a mid-sized hotel chain that is entering a competitive market. The chain needs to differentiate its service from that of competitors, positioning itself as a hotel with excellent service at an affordable price. However, the intangible nature of services makes this difficult to demonstrate. How can Bryson's convey its message effectively to prospective guests using marketing tool of place?
Student answers will vary. Bryson's should try to demonstrate its service quality through physical evidence and presentation. Bryson's can use "place," i.e., the hotels themselves, by designing the hotels to reflect its desired attributes. The hotel design should not be too ornate or fancy, but not too basic either.
63) Give an example of a pure service provided by a company.
Student answers will vary. Examples of a pure service include babysitting, psychotherapy, career counselling, or a massage.
66) Fingerpainted organizes art camps and craft activities for children. The company has noticed that demand is highest during summer vacations and drops during the year. What can Fingerpainted do to attract customers at other times of year?
Student answers will vary. Fingerpainted can use differential pricing to shift some demand from peak to nonpeak periods, pricing courses outside vacations lower than vacation courses. It can try to generate nonpeak demand by introducing specialized courses for weekends or a few evenings a week.
78) Bryson's is a mid-sized hotel chain that is entering a competitive market. The chain needs to differentiate its service from that of competitors, positioning itself as a hotel chain with excellent service at an affordable price. How can it achieve this using internal marketing?
Student answers will vary. Internal marketing describes training and motivating employees to serve customers well. Employees must be trained to provide the required service quality, as well as motivated to achieve that level. Bryson's can use incentives for the best performers in order to encourage this.
61) Several strategies exist for managing the supply and demand of services. List the strategies for managing each and give an example of each strategy.
Student answers will vary. Several strategies can produce a better match between service demand and supply. On the demand side, these strategies include the following: • differential pricing: This will shift some demand from peak to off-peak periods. For example, low matinee movie prices and weekend discounts for car rentals. • Nonpeak demand: This can be cultivated. For instance, McDonald's pushes its breakfast service, and hotels promote mini-vacation weekends. • Complementary services: These can provide alternatives to waiting customers. For example, cocktail lounges in restaurants and automated teller machines in banks. • Reservation systems: These are one of the many ways to manage the demand level. For instance, airlines, hotels, and physicians employ them extensively. On the supply side, these strategies include the following: • Part-time employees: They can serve peak demand. For example, colleges add part-time teachers when enrollment goes up and stores hire extra clerks during holiday periods. • Peak-time efficiency: These routines can allow employees to perform only essential tasks during peak periods. For instance, paramedics assist physicians during busy periods. • Increased consumer participation: This frees service providers' time. For example consumers can fill out their own medical records or bag their own groceries. • Shared services: These can improve offerings. For instance, several hospitals can share medical-equipment purchases. • Facilities for future expansion: This can be a good investment. For example, an amusement park can buy surrounding land for later development.
58) List and briefly explain with examples the five categories of service offerings.
The five categories of service offerings are: 1. Pure tangible goods: These are tangible goods with no accompanying services. For example, soap or toothpaste. 2. Tangible good with accompanying services: The tangible good is accompanied by one or more services. Typically, the more technologically advanced the product, the greater the need for high-quality supporting services. For instance, car or computer. 3. Hybrid: It is an offering of equal parts goods and services. For example, a meal in a restaurant. 4. Major service with accompanying minor goods and services: This offering requires a capital-intensive good, but the primary item is a service. For instance, an air travel that is accompanied by snacks and drinks. 5. Pure service: This refers primarily to an intangible service. For example, psychotherapy or massage.
138) Based on the service-quality model, researchers have identified five determinants of service quality. List and briefly explain each.
The five determinants of service quality are: 1. Reliability: It is the ability to perform the promised service dependably and accurately. 2. Responsiveness: It refers to the willingness to help customers and to provide prompt service. 3. Assurance: It is the knowledge and courtesy of employees and their ability to convey trust and confidence. 4. Empathy: It refers to the provision of caring, individualized attention to customers. 5. Tangibles: It is the appearance of physical facilities, equipment, personnel, and communication materials.
59) List and briefly explain the four distinctive characteristics of services.
The four distinctive service characteristics that greatly affect the design of marketing programs are: 1. Intangibility: Services cannot be seen, tasted, felt, heard, or smelled before they are bought. To reduce uncertainty, buyers will look for evidence of quality by drawing inferences from the place, people, equipment, communication material, symbols, and price. 2. Inseparability: Services are typically produced and consumed simultaneously. Both the provider and the client are a part of the service. 3. Variability: Because services depend on who provides them and when and where, and to whom, services are highly variable. Service buyers are aware of this variability and often talk to others before selecting a service provider. 4. Perishability: Services cannot be stored, so their perishability can be a problem when demand fluctuates. That is why public transportation companies must own much more equipment because of rush-hour demand than if demand were even throughout the day.
158) An oil drilling company ordered a pumpjack for its operations. The pumpjack manufacturing company not only set up the machine but also provided training to the people who needed to use it. It also let the drilling company know that it would be undertaking the maintenance and repair services for the pumpjack. What kind of a service is the manufacturing company providing?
The manufacturing company is said to be providing facilitating services.
101) Marketing excellence with services requires excellence in three broad areas. List and explain the three areas.
The three areas in which services require excellence are: 1. External marketing: This describes the normal work of preparing, pricing, distributing, and promoting the service to customers. 2. Internal marketing: This describes training and motivating employees to serve customers well. 3. Interactive marketing: This describes the employees' skill in serving the client. Clients judge service not only by its technical quality but also by its functional quality.
145) Josh travels often on business trips. He usually uses the services of the Sunshine Cab Company to take him to the airport and pick him up from the airport. Though the fares are usually higher than those of other private taxi companies, he prefers to use Sunshine cabs because they're always on time and have well-maintained cabs. Which determinant of service quality does this demonstrate?
This demonstrates the determinant of reliability, which is the ability to perform the promised service dependably and accurately.
142) The advertisement for a pool reads "a vinyl pool from Parker's for just $5,000." When David contacted the firm for the pool, the customer service representative tells David that the total cost will be $8,000. When David enquires about the extra $3,000, the customer service representative says that is for installation. Which service-quality gap does this situation demonstrate?
This is an example of a gap between service delivery and external communications. Consumer expectations are affected by statements made by company representatives and ads. Here, the ad promised a pool for one price, but the actual price is much higher than the consumer is led to expect.
141) In the customer support center where Carl works, employees are taught to make conversation to put customers at ease. As customers don't like being kept waiting, they must also try to minimize the time that customers spend waiting for service. Thus, when there are a number of customers lined up, Carl usually has to decide whether to answer a customer's questions in detail or move on quickly to the next customer. The firm's standards are not clear on how they want him to perform. When asked, his boss answers, "You make the decision." This is an example of which service-quality gap?
This is an example of a gap between the service-quality specifications and service delivery. Employees are held to conflicting standards, having to decide between taking time to listen to customers and serving them fast.
102) When Hayley had some problems with the applications on her cell phone, she gave her cell phone to the service center for a software update. The service center returned the phone to Hayley the next day, with the software update complete. Two days later, the service center called Hayley to enquire if the phone was functioning well. Which area of services marketing does this incident illustrate? Why is this important?
This situation illustrates interactive marketing, which deals with the employees' skill in serving the client. This is important because clients judge a service not only by its technical quality (how successful it was) but also by its functional quality (the attitude of the employees performing the service).
60) List three steps that service firms can take to increase quality control over services and reduce variability.
Three steps that service firms can take to increase quality control and reduce variability in services are: 1. Invest in good hiring and training procedures: Recruiting the right employees and providing them with excellent training is crucial, regardless of whether employees are highly skilled professionals or low-skilled workers. Better-trained personnel exhibit six characteristics: competence, courtesy, credibility, reliability, responsiveness, and communication. 2. Standardize the service-performance process throughout the organization: A service blueprint maps out the service process, the points of customer contact, and the evidence of service from the customer's point of view. 3. Monitor customer satisfaction: Service firms can employ suggestion and complaint systems, customer surveys, and comparison shopping. Customer needs vary in different areas. This allows firms to develop region-specific customer satisfaction programs. Firms can also develop customer information databases and systems for more personalized service, especially online.
