Service Marketing

The digital transformation of products is sometimes known as the __________ ____________ _________________

"Internet of Things"

Identify an example in which a relationship between an organization and a customer ends after a certain purpose is served.

A pest control firm gets paid after fumigating a house.

Which of the following occurs in the service prototype development and testing phase of new service development?

A service blueprint detailing the customer experience and the implementation plan is produced.

Identify the nonmonetary remedies sought by customers following service failures from an organization. (Check all that apply.)

An apology from the firm Dignified treatment from the firm A channel to vent their anger and frustrations

Which of the following is the primary goal of relationship marketing?

Building and maintaining a base of profitable customers

Identify the reasons why some dissatisfied customers prefer staying with the same service provider. (Check all that apply.)

Change requires a great deal of effort. Change requires customers to restructure their life.

Which of the following is the best kind of customer action for a company following service failure?

Complaining on the spot to the service provider

Service prototype development and strategy

Conduct service prototype test.

In the context of relational benefits that customers experience in long-term service relationships, which of the following benefits involves feelings of trust in a provider along with comfort and lower anxiety in knowing what to expect?

Confidence benefits

Identify a true statement about the view of customers on profitability tiers.

Customers at the lower levels of profitability tiers resist and resent unequal treatment.

Companies need to initiate the relationship development process by _________

Delivering a good core service

True or false: Customers continually switch service providers even after developing a social relationship with them.

False Reason: This is false. Social ties make it less likely for customers to consider switching. Even when they find a competitor offering a lower price, customers are less likely to switch from a service provider with whom they have social relationships.

True or false: In the context of service recovery strategies, it is always better to fix the problem before fixing the customer.

False Reason: This is false. In many situations, it is better to fix the customer needs before fixing the problem. However, both types of actions are important.

True or false: Interactional fairness focuses on providing monetary compensation to customers who experience service failures.

False Reason: This is false. Interactional fairness focuses on treating customers politely during service recovery process. It involves showing care and treating them with respect.

True or false: It is impossible for service innovations to occur when a customer's cocreation role is redefined.

False Reason: This is false. Service innovations may occur when a customer's cocreation role is redefined. Assuming a customer plays the role of user, buyer, or payer to avail a service, new services can result when a previous role is redefined.

True or false: Social bonding strategies become ineffective when combined with financial incentives.

False Reason: This is false. Social bonding strategies become effective when combined with financial incentives. Interpersonal bonds make a customer stay in a relationship when there are no strong reasons to switch.

True or false: The blueprint developed during the service prototype development and testing stage remains the same till a service goes live.

False Reason: This is false. The blueprint developed during the service prototype development and testing stage is likely to evolve over a series of iterations. The evolution of the blueprint will be based on the input from all involved parties.

True or false: The lines of demarcation for technology-delivered self-service blueprints remain the same as that of service blueprints for services delivered in person.

False Reason: This is false. The lines of demarcation change for technology-delivered self-service blueprints. Here, there are no employees involved in a service.

True or false: Once service recovery efforts are in motion, customers refrain from switching, irrespective of the seriousness of the service failure.

False Reason: This is false. The more serious the service failure, the more likely the customer is to switch. Service recovery efforts do not influence customers in this situation.

True or false: When customers spread negative word of mouth about a company, it gives the company the opportunity to respond immediately and satisfy customers.

False Reason: This is false. When customers spread negative word of mouth about a company, the company cannot recover unless it is accompanied by a complaint directly to the company. Social media helps negative word of mouth spread to a much broader audience.

Identify a true statement about guarantees for services.

Firms can experience tremendous benefits when they offer guarantees for services.

Identify the service recovery strategies followed by companies. (Check all that apply.)

Fix the customer Fix the problem

Which of the following is an example of customer behavior benefits received by an organization through customer retention?

Free word-of-mouth advertising

Which of the following techniques can be used to conduct lost customer research?

In-depth interview

In the context of blueprint components, which of the following is an example of visible contact employee actions?

Initial interview with a client

In the context of service recovery justice, which of the following involves treating customers with care, honesty, and dignity?

Interactional fairness

Which of the following is a concern raised by customers when they are segmented based on profitability tiers?

Intrusion into privacy

Which of the following is true of a service guarantee?

It allows quick recovery after a service failure.

In the context of the evolution of customer relationships, identify a true statement about a company's acquaintance relationship with its customers.

It facilitates transactions by reducing the perceived risk of customers.

Identify a true statement about procedural fairness in service recovery.

It focuses on delivering fair treatment to customers in terms of policies, rules, and timeliness of the complaint process.

Which of the following is an example of outcome fairness in service recovery?

It focuses on providing compensation that matches the dissatisfaction level of customers.

Identify a true statement about building relationship with customers through social bonds.

It focuses on understanding the wants and needs of customers.

Identify the attributes of a good service guarantee. (Check all that apply.)

It forces a company to understand its customer requirements. It helps a company obtain relevant feedback from its customers. It contributes to the continuous improvement efforts of an organization. It helps define clear standards for an organization.

Which of the following is true of service design?

It has emerged because of the complexities and requirements of service innovation.

Which of the following is true of defining a new service innovation strategy?

It helps an organization in generating specific ideas.

In the context of developing a blueprint, which of the following is true of mapping a service process from the viewpoints of customers?

It helps avoid steps that have no impact on customers.

Which of the following is true of service recovery?

It helps companies gather information on improving service delivery.

Identify a true statement about involving customers in service innovation.

It helps companies identify the needs of customers.

Identify a true statement about a service blueprint.

It helps people understand a service objectively, irrespective of their roles or their points of view.

Identify a true statement about making a service fail-safe.

It is the most important service quality dimension across industry contexts.

Identify the true statements about the relationship value of a customer. (Check all that apply.)

It looks at customers based on their profitability contributions to a firm. It helps firms understand the financial impact of losing a customer.

Identify a true statement about relationship marketing.

It primarily focuses on customer retention.

Identify a true statement about the service recovery paradox.

It refers to situations in which customers become more satisfied after service recovery than they originally were.

Identify a true statement about developing a blueprint.

It requires information from customers.

Which of the following economic benefits can be witnessed through customer retention?

Lower marketing costs

Which of the following steps in building a service blueprint forces agreement on who the customer is?

Mapping a service from a customer's viewpoint

What happens when a company resolves its customer complaints within the first 24 hours?

More than one-third of all customers whose problems are resolved are completely satisfied.

PSE&G is a utility company. One of its service guarantees is to keep all appointments. If PSE&G fails to keep an appointment mutually agreed upon by the customer and the company, PSE&G will credit residential customers' accounts by $25 and business customers' accounts by $100. The guarantee only applies to appointments for meter readings, account investigation, gas service, gas appliance repair, and both electric and gas meter work scheduled three days in advance. Which of the following statements about PSE&G's service guarantee is FALSE?

PSE&G's guarantee is unconditional.

Steps in the service innovation and development process:

Phase 1: Front end planning: Business strategy development or review New service strategy development Idea generation Service concept development and evaluation Business analysis Phase 2: implementation Service prototype development and testing Market testing Commercialization Post introduction evaluation

In the context of service recovery justice, which of the following focuses on providing easy access to the complaint process and delivering speedy service recovery?

Procedural fairness

Identify the benefits of service blueprints. (Check all that apply.)

Providing a platform for innovation Facilitating strategic innovations in a service system Assessing the productivity of a service system

In the context of the evolution of customer relationships, which of the following transforms a customer's relationship with a company from acquaintance to friendship?

Provision of a unique offering

In the context of new service development, which of the following is a new service for markets yet to be defined?

Radical innovation

Benefits of service blueprints:

Recognizing roles and interdependencies among functions, people, and organizations Providing a platform for both strategic and tactical innovations Transferring and storing innovation and service knowledge Designing moments of truth from the customer's point of view Suggesting critical points for measurement and feedback in the service process Clarifying competitive positioning Understanding the ideal customer experience

Which of the following is one of the first steps in new service development?

Reviewing an organization's vision and mission

Identify an example of economic benefits witnessed through customer retention.

Satisfied customers willing to pay more for a firm's services

Idea Generation

Screen ideas against service strategy.

Identify the factors that are essential for long-term customer retention. (Check all that apply.)

Service quality Customer satisfaction

Identify the key components of service blueprints. (Check all that apply.)

Support processes Customer actions Invisible contact employee actions Visible contact employee actions Physical evidence

Which of the following makes it difficult for a customer to leave one service provider and begin relationship with another one?

Switching barriers

Service concept development evaluation

Test concept with customers and employees.

Business Analysis

Test for profitability and feasibility.

Market testing

Test service and other marketing mix elements.

What happens when a company targets its services to all customer segments?

The company is most likely to attract a customer whose requirements it cannot meet.

Identify the service situations in which service guarantees are not appropriate for a company. (Check all that apply.)

The existing service quality of the company is poor. The company is unable to control its service quality. The guarantee that is provided does not fit the company's image.

What challenges do service firms face that are the reason they are generally less likely to carry out a structured development process for innovations than their manufacturing and consumer-goods counterparts?

The intangibility of the process and the need to assess employee-customer discourses.

Identify the factors that influence the relationship value of a customer. (Check all that apply.)

The length of an average lifetime Customer referrals generated over time Sales of additional products and services over time

Identify the factors that will play a major role in a customer's future repurchase decisions following a service failure. (Check all that apply.)

The magnitude of the failure The criticality of the failure

What happens when customers are required to contact multiple employees for resolving a problem?

The percentage of satisfied customers reduces drastically.

In the context of evolution of customer relationships, identify a true statement about strangers.

They are customers who have not yet had any transactions with a firm.

Platinum tier customers

They are heavy users of a product and are committed customers of a firm. It consists of the most profitable customers in a company.

Which of the following is true of customers who engage in "emotion-focused coping" while dealing with service failures?

They are likely to blame themselves for service failures.

Identify a disadvantage of financial incentive programs aimed at customer retention.

They are more likely to be short lived.

Gold tier customers

They are most likely to be heavy users who work with multiple providers to minimize risk. It consists of customers who are heavy users but want price discounts that limit margins.

Why is it important to involve contact employees in service innovation?

They are psychologically and physically close to customers.

In the context of relational benefits that customers experience in long-term service relationships, identify a true statement about confidence benefits.

They are the most important among the relationship benefits to customers.

Identify a true statement about customers who do not complain even after experiencing service failures.

They believe that filing a complaint with a firm is very difficult.

Lead tier customers

They demand more attention than they deserve based on their spending and profitability. It consists of customers who cost money to a company.

Identify a true statement about switching barriers.

They facilitate customer retention in organizations.

In the context of benefits associated with a customer's long-term relationship with a firm, identify a true statement about social benefits.

They help improve a consumer's quality of life.

Identify a true statement about service guarantees with many restrictions and exclusions.

They lose power in direct proportion to the number of conditions contained in them.

Iron tier customers

They provide the volume needed for a firm's capacity utilization, but their spending, loyalty, and profitability are not substantial. It consists of customers who are not profitable enough for special treatment.

Service blueprint invisible contact employee actions

They refer to the activities performed by contact employees behind the scenes to support the onstage activities.

Service blueprint visible contact employee actions

They refer to the activities performed by contact employees in front of a customer.

Service blueprint support processes

They refer to the internal services, steps, and interactions that occur to support contact employees in service delivery.

Service blueprint customer actions

They refer to the steps, choices, activities, and interactions performed by a customer in a service process.

Service-line extensions

They represent augmentations to the existing group of services.

Service improvements

They represent modification in features of already offered services.

Identify a true statement about major innovations in an organizational context.

They represent new services for undefined markets.

True or false: A new service strategy must fit the larger strategic mission of an organization.

True Reason: This is true. A new service strategy must fit the larger strategic mission of an organization. This is one of the first steps in new service development.

True or false: When ending relationships with customers, firms should communicate the reasons for terminating service.

True Reason: This is true. Firms should clearly communicate the reasons for ending relationships with customers. This helps customers understand what is happening and why.

True or false: According to research, customers who want to continue their relationship with a firm have lower service recovery expectations.

True Reason: This is true. Research suggests that customers who expect to continue their relationship with a firm have lower service recovery expectations. Also, they are likely to demand less compensation for service failures.

True or false: The guarantee provided by a service firm should be easy to understand.

True Reason: This is true. The guarantee provided by a service firm should be easy to understand. If the wording is confusing, customers and employees find it really difficult to understand.

True or false: Service blueprints help companies determine the possible bottlenecks in a service process.

True Reason: This is true. Service blueprints can be analyzed to determine the possible bottlenecks in a service process. By discovering this, companies can introduce measures to track failures.

True or false: The labels used for drawing a service blueprint may vary depending on the complexity of the blueprint.

True Reason: This is true. The labels used for drawing a service blueprint may vary depending on the complexity of the blueprint. This is because there are no rigid conventions for drawing service blueprints.

In the context of evolution of customer relationships, a firm's primary goal with strangers is to ______________________________

acquire their business

The actual steps followed in service innovation and development can be applied to:

any type of new service.

Traditional organizational thinking has viewed solutions, as defined by firms as

bundles of goods and services that they offer to customers.

When service failures occur, customers expect ___________________

companies to be accountable for their failures

John has been working for a start-up company after graduation. What will be the company's challenge in terms of customer relationships?

converting strangers into acquaintances

In the context of benefits received by organizations through customer retention, a loyal customer serving as a mentor to help a new customer understand a firm's rules of conduct is an example of _________________

customer behavior benefits

An assumption of relationship marketing is that _________________

customer retention is less expensive than customer acquisition

From a client's point of view, service design focuses on ensuring that service interfaces are ____________.

desirable

The first rule of service quality is to _________________

do it right the first time

A holiday resort offering a discount to its loyal customers is an example of _______________________

financial bond

When conducting lost customer research, a firm must ______________

focus on important or profitable customers

In a business context, _________________ is a pledge or assurance that promises effective performance of a product offered by a firm.

guarantee

A company that uses a four-tier scheme to segment its customers by profitability ________________________

identifies customers who need different sorts of attention.

When a company conducts root-cause analysis during service recovery, it can ____________________

identify problem sources and improve its processes

A firm can retain its customers by ___________________

increasing the customers' perceived effort in switching service providers

A restaurant network developing a new application for its customers to order food through their cellphones is an example of _bank_.

innovation around customer roles

Once Mariko had carried her dry cleaning to the car, she took a minute to see if the cleaners had removed the stain from her wool skirt. The stain was still there, so Mariko took the skirt back to the cleaner. When Mariko showed the stained skirt to the cleaner employee, she shrugged and said, "I guess you want us to reclean the skirt?" Mariko responded, "Yes, please." The employee took the skirt, gave Mariko a dirty look, and began sorting some items on the counter. The employee did not treat Mariko with

interactional fairness.

What is considered the single most significant change, challenge, and opportunity for companies across industries to transform competition and company practices and provide unheralded service innovation opportunities?

interconnected products

The strategy used by a luxury car manufacturer to target customers in the low-income category is an example of ____________________

marketing to the wrong segment

According to research, customers who experience service failure but are ultimately satisfied through service recovery efforts of a firm become ___________________

more loyal to the firm than customers whose problems are not resolved

The overriding goal of relationship marketing is to ___________________.

move customers up in the relationship continuum

United Jersey Bank offers customers, who have a combined balance of $3000 or more in a United Jersey Checking Account and Preferred Money Market Account, a service called United Jersey Preferred Banking. This service is designed to make banking more convenient and profitable for customers. United Jersey Preferred Banking eliminates monthly maintenance fees, provides unlimited free transactions at ATMs, preferred rates on personal loans, higher interest rates on savings with higher balances and a consolidated monthly statement. United Jersey Bank does not offer United Jersey Preferred banking to customers with a combined balance of less than $3000 in a United Jersey Checking Account and Preferred Money Market Account since these customers are

not profitable in the long run.

In blueprints for technology-delivered self-service, the interface between a customer and a website or a physical interaction with a kiosk can be represented using the label called _________________

onstage technology

In the context of risks involved in describing services in words alone, _________ occurs when words are inadequate in describing a complex service system.

oversimplification

Solutions, as defined by customers, are sets of customer-facing processes comprised of:

post deployment customer support customization and integration of goods and/or services deployment of integrated solutions customer requirements definition

The final step in the service innovation and development process is

post-introduction evaluation.

In the context of the steps involved in developing a service blueprint, the next step after identifying the process (step 1) to be blueprinted is ______________

recognizing the customer or customer segment (step 2)

The _______________________ of a customer is a concept that looks at customers from the perspective of their lifetime revenue or profit contributions to a company.

relationship value

Unlike service-line extensions, service improvements ________________.

represent perhaps the most common type of service innovation

When there is a strong relationship between a firm and its customers, the customers ____________________

respond positively to the firm's service recovery efforts

What themes were revealed to underly the decision to defect in a study of 500 service-switching incidents?

response to service failure involuntary switching competition pricing core service failure service encounter failure inconvenience

When a firm has an acquaintance relationship with a customer, its primary goal is to ________________.

satisfy the customer

When a firm has an acquaintance relationship with a customer, its primary goal is to __________________

satisfy the customer

A ___________ _______________ is a picture or map that portrays the customer experience and the service system of an organization.

service blueprint

________________________ __________________________occurs when the service provided by an organization falls below the expectations of customers and leads to customer dissatisfaction.

service failure

By defining a new __________ _______________ strategy in terms of markets, types of services, the time horizon for development, profit criteria, or other relevant factors, the organization will be in a better position to begin generating specific ideas.

service innovation

An organization can take action against service failure and improve the situation for a customer through __________ ____________________

service recovery

To minimize the impact of service failure, excellent _________ __________ is needed

service recovery

Ahmed runs a small bodega (convenient store) in a major urban area. He was pleasantly surprised that his new fresh egg supplier gave him a free dozen eggs for any egg that was delivered broken. He had never received such customer service from his previous supplier. In fact, he now tells other relatives who run other shops in the city how much he valued the new supplier. This is an example of

service recovery paradox.

Many high schools honor former graduating classes at homecoming celebrations, partnering them individually with members of the senior class acting as hosts. This is seeking to strengthen which type of bonds with the alumni?

social bonds

A fashion store offers an additional 20 percent discount on its products for customers who have purchased from the store for more than $2 thousand in the last six months. This is an example of _______________

special treatment benefit

Receiving the "benefit of the doubt" from a service provider is an example in which a customer enjoys ________________

special treatment benefit

When personal experiences or degree of exposure to a service influences a person describing a service in words, it results in __________________

subjectivity

A consumer is more likely to complain when

the level of ego involvement in the purchase is high.

A service guarantee is not the right strategy for a company when ______________

there is potential for customer abuse of the guarantee

In the context of the evolution of customer relationships, a primary goal for companies at the friendship stage is _________________

to retain customers

A business traveler checked into a Hyatt hotel and was given a room next to the elevator. When he turned on the television, he was greeted with a Hyatt customer service survey. He immediately took advantage of having the survey to let Hyatt know how unhappy he was with his room location. The business traveler would most likely be classed as a(n) ________

voicer