Chapter 12

These are service components customers use to evaluate service quality

Empathy, assurance, responsiveness, reliability

Chesapeake Energy Corporation was recognized by Fortune Magazine as one of the top companies to work for. Fortune mentioned that Chesapeake Energy provides its employees many perks, including the opportunity to take free scuba diving lessons in Chesapeake's onsite olympic size pool. This example illustrates relationship marketing in action

False, Chesapeake Energy is actually practicing internal marketing. Relationship marketing is focused on customers, not employees

Many businesses have found that it is more expensive to hang on to the customers they have than to focus only on attracting new ones

False, Many businesses have found that it is more cost effective to hang on to the customers they have than to focus only on attracting new ones

Service firms may adopt patronage-oriented pricing to try and maximize the surplus of income over costs

False, Service firms may adopt patronage oriented pricing to try to maximize the number of customers using the service

The advertising budgets of most nonprofits are too small to pay for the running of public service advertisements to promote their programs, activities, or services

False, The sponsor of a public service advertisement does not pay for the time or space. Instead, it is donated by the medium

US service firms such as financial institutions and construction, engineering, and insurance companies will have a difficult time expanding to global markets because competing foreign firms possess many competitive advantages

False, These US firms have the greatest potential for globalization because of their existing competitive advantage

The speed with which an ambulance can get to an accident site is an indication of the reliability dimension of service quality

False, This would be an example of responsiveness

Services tend to exhibit more search qualities than do tangible goods

False, a search quality is a characteristic that can be easily assessed before purchase, and tangible goods tend to exhibit more search qualities than do intangible goods. Services exhibit more experience and credence qualities

The only type of service processing required for a comedian entertaining at a local club is information processing

False, comedians require mental stimulus processing

Greta, the owner of House Mouse Cleaning Services, must be physically present when she cleans a house or office. The need for her presence as the service is performed is an example of the intangibility of services

False, the need for her presence and the customer's presence is an example of how services are produced and consumed simultaneously

Services are considered inseparable because most services cannot be felt or touched in the same way most goods can be sensed

False, this describes the characteristic of intangibility

Which of the following services is an example of possession processing

Heating system repair; possession processing occurs when the service is directed to the customers' physical

Which unique characteristics of services is the variability of the inputs and outputs of services, which causes services to tend to be less standardized and less uniform than goods?

Heterogeneity; because services have greater heterogeneity, or variability of inputs and outputs, they tend to be less standardized

Community Trust Bank has always prided itself on the friendliness of its employees. However, the results of a recent mystery shopper study indicated that the bank tellers rarely greeted customers or thanked them after the transaction. As a result, all bank employees who have customer contact are going through a training program to enhance customer service. What unique aspect of services is Community Trust attempting to address?

Heterogeneity; heterogeneity causes inconsistency and lack of standardization. Training helps to alleviate theses conditions

It is difficult to achieve consistency and standardization of services because of which service characteristic

Heterogeneity; heterogeneity is the variably of the inputs and outputs of services, which causes services to tend to be less standardized and uniform than goods.

Which type of service processing uses technology or brainpower directed at customer's assets?

Information processing

Which of the following serves is an example of information processing?

Investment advice; information processing describes services that use brainpower directed at a customer's assets

Buying a car through eBay may result in a low price, but how do you know you will be getting a good car? One nice feature provided by eBay is the "feedback rating" that provides ratings and comments from people who have made purchases from that seller before. Which service quality component does the feedback rating address?

Assurance; Assurance refers to the knowledge and courtesy of the employees and their ability to convey trust. Customer ratings would provide this information

Which service quality component is the knowledge and courtesy of employees and their ability to convey trust

Assurance; this is a description of assurance. Skilled employees treat customers with respect and make customers feel that they can trust the firm to exemplify assurance

( ) is the strategy that uses technology to deliver customized services on a mass basis

Mass customization; mass customization can deliver customized services on a mass basis, which results in giving each customer whatever he or she asks for

The catalog and online retailer Lands' End offers custom-fit chinos via the Web. For a price of $54, U.S.-based customers can select their style and fit preferences, enter details about their body shape, and receive a pair of custom-made pants in their mailbox two to four weeks later. For Lands' End, this means that the company avoids stocking up to 2.8 billion different styles and sizes of garments. Instead, Lands' End orders each unit to be individually fashioned by a contract manufacturer that ships directly to the consumer. Lands' End is using:

Mass customization; mass customization uses technology to deliver customized service on a mass basis

TeamBuilds is a service organization that has cop orate teams pay $7,500 for an all day team building session with a management consultant while they work together on renovating a Habitat for Humanity home. Which category of service processing does TeamBuilds offer

Mental stimulus processing; mental stimulus processing refers to services directed at people's minds

One of the reasons consumers can purchase cheap flights or hotel rooms on Web sites such as Expedia.com and Hotels.com is due to the fact that airlines cannot sell the seat on a specific flight after the plane takes off and hotels cannot recoup the revenue from that room for that night once the night passes. Which unique characteristic of services does this illustrate?

Perishability; Services cannot be stored, inventoried, or warehoused

David and Kathy like to take their young son, Chaz, to Moe's for lunch after church on Sundays. While they like to eat at Moe's at any time, Sunday is particularly good because it's "kids-eat-free" day at Moe's southwestern grill. Until Moe's began the reduced pricing program, Sundays were very slow. Now it is one of the busiest days of the week. This price reduction was a way to contend with the service characteristic of:

Perishability; differential pricing tries to even out demand. This is important because services cannot be stored, inventoried, or warehoused

Sir Paul McCartney and Alicia Silverstone are two of the many celebrities serving as spokespeople for the animal rights group People for the Ethical Treatment of Animals (PETA). Both are committed to vegetarianism. In terms of promotion strategy, they will be considered a(n) _____ information source.

Personal; a personal information source is someone consumers are familiar with, such a celelbrities

Which type of service processing occurs when the service is directed at customers' physical possessions, such as lawn care, dry-cleaning, and veterinary service?

Possession processing

Virtual Bellhop is a company that ships awkward sporting goods to vacation destinations so its customers do not have to worry about lugging them through airports or having them damaged in transit. Thus far, its record for getting the sporting equipment to the correct destination for the vacationer is perfect. This indicates that the company excels at which component of service quality?

Reliability; reliability is the ability to perform the service dependably and consistently

Which of the following services would be most likely to exhibit strong credence qualities

The preparation of a dead body for burial; a credence quality is a characteristic that cannot easily be assessed even after purchase and experience

A nonprofit organization is an organization that exists to achieve some goal other than the usual business goals of profit, market share, or return on investment

True

An important issue in developing the service offerings is whether to customize it or standardize it

True

Hetergencity of services means the quality of a service many not be consistent

True

Hotels will often offer deep discounts on weekends and during the off season; for the same reason, airlines will adopt a similar pricing strategy during off peak hours. These services cannot be stored, warehoused, or inventoried because they are perishable

True

Insurance companies are examples of service organizations

True

Nonprofit organizations may or may not require special facilities for distribution of their services

True

The most basis benefit the consumer is buying in a service in referred to as the

core service

TeamBuilds is a service organization that has corporate teams pay $7500 for an all day team building session with a management consultant while they work together on renovating a Habitat for Humanity home. TeamsBuilds' ( ) service is improved work team relationships

core; core service is the most basic benefit the consumer is buying

Alec had his gall bladder removed, but he was unconscious during the operation. In fact, even though he has an incision, he really has no way of knowing if the service was actually performed even after it was allegedly performed. That is because medical services such as this exhibit _____ qualities.

credence; a credence quality is a characteristic that consumers may have difficult assessing even after purchase because they do not have the necessary knowledge or experience

A characteristic that consumers may have difficulty assessing even after purchase because they do not have the necessary knowledge or experience is referred to as quality

credence; medical and consulting services are examples of services that exhibit credence qualities

Starbucks management has been trying to refocus on the things that made the company so successful. For example, Starbucks stores across the United States recently shut down for a short period of time for retraining, and the company has worked to make sure you can smell the fresh ground coffee aroma when you enter the store. However, when questioned, consumers tend to focus on the need for pricing incentives such as a frequent purchasing program. According to the _____, there may be a gap between what customers want and what Starbucks management thinks customers want.

gap model of service quality; the gap model identifies five gaps that can cause problems in service delivery and influence customer evaluation of service quality

The model of service quality that identifies five gaps that can cause problems in service delivery and influence customer evaluations of service quality is referred to as the ( ) model

gap; the gap model identifies five gaps that can cause problems in service delivery and influence customer evaluations of service quality

A reading service for the visually impaired requires each reader applicant to prepare and submit a one-hour interview tape of material chosen by the service to determine whether the reader has pleasing vocal characteristics and is accent free so that it is not necessary to use the same reader every time. The reading service is trying to limit problems associated with the service characteristic of:

heterogeneity; heterogeneity means that a service tends to be less standardized and uniform than goods

It is difficult for most of us to talk about mistakes we have made. Unfortunately, for organizations like Consumer Credit Counseling to help you work through your financial issues, you must be willing to honestly discuss your financial condition. In other words, for these organizations to help, you must be actually involved in the process of developing your financial plan, which points to the _____ nature of services.

inseparability; inseparability is when services or goods are produced and consumed at the same time

Which unique characteristic of services means that consumers must be present during the production

inseparability;inseparability is the inability of the production and consumption of a service to be separated

These are unique characteristics that distinguish services from goods

intangible, inseparable, heterogeneous, perishable

A service cannot be touched, seen, tasted, heard, or felt in the same manner in which goods can be sensed and, therefore, is referred to as being

intangible; the basic difference between services and goods is that services are intangible performances

Due to service ( ) services cannot be stored, warehoused, or inventoried

perishability; perishability is the inability of services to be stored, warehoused, or inventoried

A focus on maximizing the surplus of income over costs is an ( ) pricing objectives for service firms

revenue-oriented; this is a description of a revenue oriented pricing objective

A ( ) is a characteristic that can be easily assessed prior to purchase, such as the softness of a mattress or the color of curtains

search quality; search quality is a characteristic that can be easily assessed before purchase

Girls Just Wanna Have Funds is a Washington DC support group that consists mostly of young women who offer tips on budgeting and debt relief. As they state on their web site, their goal is to help women break financial ceilings one stiletto at a time. Girls Just Wanna Have Funds is providing a ( ) that is helpful to women who want to financially savvy

service; a service is the result of applying human or mechanical efforts to people or objects

A ( ) is the result of applying human or mechanical efforts to people or objects

service; this is the definition of a service

Western Union is in the business of providing a medium for international money transfers. Through the services of Western Union, a Mexican working in the United States can transfer a portion of his or her earnings to family members still living in Mexico. The wire transfer of funds is the _____ service the company provides.

supplementary; Supplementary services are a group of services that support or enhance the core service

James recently went to a new health clinic because he had a sore throat that wouldn't go away. He was not familiar with this clinic and was a bit surprised when the doctor came in and was wearing blue jeans, a flannel shirt, and tennis shoes. The doctor and nurse took proper care of James, but it seemed strange to him that the doctor was dressed that way. Which component of service quality does this illustrate?

tangibles; tangibles are the physical evidence of the service

The physical evidence of a service, including the physical facilities, tools, and equipment used to provide the service, represents which component of service quality

tangibles; tangibles are the physical evidence of the service

If a customer expects to wait one week for a pair of shoes to be mended but is told that the shoes are ready to be picked up less than 24 hours after leaving them at the repair shop, the customer's evaluation of service quality will be high. However, a two-week wait would result in a lower evaluation. The two-week gap would illustrate a gap between:

the service customers receive and the service they want; gap 5 is the gap between the service that customers receive and the service they want

To improve its friendliness, the First National Bank hired Joy Taylor as a greeter. Joy's job is to sit at a desk near the front lobby and greet customers as they enter with a warm, friendly smile along with a "Good Morning" or "Good Afternoon." Unfortunately, Joy is also required to answer the bank's main telephone line. Since she spends most of her day on the telephone, Joy rarely gets to flash her smile or greet anyone who is entering the bank. In fact, Joy is on the phone so much that she doesn't really even seem friendly. This is an example of a gap between:

the service quality specifications and the service that is actually provided; The gap model identifies five gaps that can cause problems in service delivery and influence customer evaluation of service quality. This is an example of gap 3--the gap between the service quality specification and the service that is actually provided.

First Community Bank spent a considerable amount of money updating its lobby with plush sofas, a large-screen television, and a refreshment counter with popcorn and soft drinks. However, very few customers spend time in the lobby. In fact, most customers want to be in and out of the bank, with their financial transaction completed as quickly as possible. The gap model of service quality would suggest that a gap exists between:

what customers want and what management things customers want; management things people want to spend time in a really nice bank lobby, but consumers seem much more concerned with timely service, which is characteristic of gap 1 in the gap model. Thus what the customers really want seems different from what management things they want

Purchasing your clothes online can be fun, allowing you to shop from companies around the world without leaving your home. You can also often get great prices on the items you purchase. However, you could get stuck with a product that doesn't look nearly as nice in reality as it does on your computer screen. Lands' End takes this concern away with its "Guaranteed Period" promise. Lands' End will happily return your purchase price on any item you purchase for any reason. If Lands' End ever failed to follow through with this promise, it would represent a gap between:

what the company tells the customer it provides and what it actually provide; this is an example of gap 4-the gap between what the company provides and what the customer is told it provides

Which of the following services is an example of mental stimulus processing?

A professional tennis match; metal stimulus processing refers to services directed at people's minds

Nonprofit organizations do not use all four Ps of marketing

False, Although nonprofit organizations have a different purpose than for profit businesses and operate in different environments, most perform marketing activities that involve the four Ps. See the nonprofit mix at a glade box

The service characterized by caring, individualized attention to customers is referred to as sympathy

False, This is empathy

Which service pricing objectives seeks to match supply and demand by varying prices?

Operations oriented, operations-oriented pricing seeks to match supply and demand by varying prices (matching hotel demand to the number of available rooms)

Which component of a service is the ability to perform the service dependably, accurately, and consistently?

Reliability; Reliability is performing the service right the first time

FedEx advertises that your documents will Absolutely Positively be delivered tomorrow morning. FedEx is providing which of the following service quality aspects to its users?

Reliability; reliability is the ability to perform the service dependably, accurately, and consistently

PayPal allows you to pay for items that you buy at online sites such as eBay without exposing your credit card or bank account number. To use PayPal, you simply select PayPal when checking out at the online store and then allow PayPal to pay directly from a credit card or from your PayPal balance or linked bank account. PayPal would be classified as a

Service; a service is the result of applying human or mechanical efforts to people or objects

The following is recommended promotional strategies for services

Stressing tangible cues, using personal information sources, creating a strong organizational image, engaging in post purchase communications

Allstate Insurance says "You're in good hands with Allstate," and Prudential Life Insurance shows a rock in its commercials because it wants to convey stability. These companies are using what type of promotion strategy?

Stressing tangible cues; a tangible cue is a concrete symbol, like hands or a rock, of the service offerings

One marketing issue unique to nonprofit organizations is that these organizations must often target those who are apathetic about or strongly opposed to receiving their services

True

Terms such as fees, donations, tuition, fares, or rates are typically used instead of price for nonprofit organizations

True

The core service is the most basic benefit the consumer is buying

True

The gap model of service quality identifies five gaps that can cause problems in service delivery and influence customer evaluations of service quality

True

Vera is designing a promotional strategy or a company that provides premium boarding services for pampered animals. Her promotions should use personal information sources and stress the tangible cues associated with the service

True

The following are key factors in the distribution strategy for services

customization; customization is a key factor in the product component of the service marketing m ix

After years of expansion, Starbucks recently closed 600 of its poorer performing stores. Many of the stores closed were near other Starbucks locations. In those areas, management felt that the company had too many outlets, which was boosting the company's cost unnecessarily. Decisions concerning the number of outlets are a part of the _____ strategy of service organizations.

distribution; distribution strategies for service organizations focus on convenience, number of outlets, direct versus indirect distribution, location, and scheduling

Service personnel who exhibit caring, individualized attention to customers are addressing which service quality component

empathy; empathy is providing caring, individualized attention to customers

Courtney's mother died of breast cancer, and she is afraid of getting cancer. When she went to get a baseline mammogram, she wanted a facility where the personnel would not think her fears were silly and would answer all of her questions without making her feel stupid for asking them. By which of the following components of service quality is Courtney most likely to rate the mammogram provider?

empathy; empathy refers to providing caring and individualized attention to customers

David and Kathy are trying to decide where to go on vacation. David has suggested a cruise. Since neither of them have been on a cruise before, they will be unable to assess the ( ) of a cruise until they actually take the vacation

experience quality; an experience quality is a characteristic that can only be assess after use

"Girls Just Wanna Have Funds" is a Washington, DC, support group that consists mostly of young women who offer tips on budgeting and debt relief. Since you cannot evaluate the quality of the financial advice until after you have received it, this is an example of the _____ characteristic of service.

experience quality; experience quality is described as a characteristic that can be assessed after use

Management labor mediation, child care, and college preparation classes are all services that are produced and consumed at the same time. All of these services exhibit the service characteristics of

inseparability; inseparability is the inability of the production and consumption of a service to be separated

The ability of customers to go online to design their own dining room table or sofa at Norwalkfurniture.com is an example of

mass customization; mass customization is a strategy that uses technology to deliver customized service on amass basis

The following are the types of service processing that can occur

people processing, possession processing, information processing, mental stimulus processing

Which category of service processing takes place when the service is directed at a customer

people processing; people processing takes place when the service is directed at a customer

Jonathon had a problem when submitting an exam in his online marketing class and he received a score of zero, so he sent an e-mail to the professor explaining his problem. He was really worried because the exam was due that evening, and he was very pleased when the professor replied within an hour telling him that he scored a 90 on the exam. The professor's prompt reply to his inquiry is an example of which service quality component?

responsiveness; responsiveness is the ability to provide prompt service

Which component of service quality represents the ability to provide prompt service

responsiveness; this describes responsiveness

The three categories of pricing objectifies for services are

revenue, operations, and patronage oriented

Determining costs can be extremely difficult for a service provider who has adopted a(n) _____ pricing objective and may limit the usefulness of the objective.

revenue-oriented, revenue-oriented, objectives require calculations of income and costs, which can be difficult for many services