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Marketing Management question bankChapter 13: Designing and Managing Services

GENERAL
CONCEPT QUESTIONS

Multiple
Choice

1. Service industries are everywhere. They include the
government sector, private nonprofit sector, business sector, manufacturing
sector, and the ________.
a. insurance salespeople
b. seasonal workers
c. temporary workers
d. retail sector
e. none of the above
2. Manufacturers, distributors, and retailers can provide
________ services, or simply excellent customer service, to differentiate
themselves.
a. financial
b. value-added
c. sales
d. marketinga
e. distribution

3. There are five categories of offerings for a service.
It can be either a minor or a major component of the company’s offerings. Which
of the following is NOTone of
these five categories?
a. Pure tangible good
b. Tangible good with accompanying services
c. Hybrid
d. Major service with accompanying minor goods and
services
e. Major service with accompanying major goods

4. Which of the following would be an example of a hybrid
service?
a. University
b. Professor
c. Restaurant
d. Soap manufacturer
e. Airline

5. Which of the following would be an example of a pure
service?
a. Insurance
b. Airlines
c. Car dealer
d. Copier company
e. None of the above

6. Services vary as to whether they are equipment based
or ________.
a. service based
b. people based
c. process based
d. historical based
e. none of the above

7.
Some services
require that the client be present to conduct the service. An example of such a service is a ________.
a. vending machine
b. fast-food meal
c. medical operation
d. car repair
e. tax service

8. Services differ as to whether they meet a personal
need or a ________.
a. quality need
b. production need
c. business need
d. functional need
e. customer need

9. Services high in ________qualities are those services
that have characteristics the buyer normally finds hard to evaluate even after
consumption.
a. equipment
b. search
c. experience
d. personal attention
e. credence

10. Services have four distinctive characteristics that
greatly affect the design of marketing programs. Which of the following is NOTone of these characteristics?
a. Intangibility
b. Communicability
c. Variability
d. Perishability
e. None of the above

11. Services cannot be seen, tasted, felt, or heard before
they are bought. To reduce uncertainty, buyers will look for evidence of
quality. They will draw inference about quality from place, people, and price
they see. Therefore, the service provider’s task is to “________.”
a. communicate value
b. manage the evidence
c. go full speed ahead
d. provide high touch, high price
e. none of the above

12. Service companies can try to demonstrate their service
quality through physical evidence and ________.
a. predatory pricing
b. people
c. pricing
d. profits
e. presentation

13. Unlike physical goods, services are produced and
________ simultaneously.
a. launched
b. consumed
c. created
d. maximized
e. none of the above

14. One of the special features of services marketing is
the provider–client interaction. This is defined as when the client is also
________ as the service is produced.
a.
prominent
b.
productive
c.
producing
d.
present
e.
paying

15. Services depend on who provides them and when and
where they are provided. They are highly ________.
a. suspect
b.
variable
c.
consistent
d.
substandard
e.
none of the above

16. Better-trained personnel exhibit several
characteristics such as ________, which means they perform the service
consistently and accurately.
a. reliability
b. courtesy
c. credibility
d. competence
e. responsiveness

17. Better-trained personnel exhibit several
characteristics such as ________, which means they respond quickly to
customers’ requests and problems.
a. reliability
b. courtesy
c. credibility
d. competence
e. responsiveness

18. There are three steps service firms can take to
increase quality control. Which of the following is NOTone of these steps?
a.
Reduce customer
contact points
b.
Monitor customer
satisfaction
c.
Standardize the
service-performance process
d.
Invest in good
training procedures
e.
Invest in good
hiring procedures

19. A ________ is a tool that allows service providers to
simultaneously map out the service process, the points of customer contact, and
the evidence of service from the customer’s point of view.
a. service guarantee
b. service blueprint
c. communication material
d. credence quality
e. tangible good

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

21. To match demand and supply, service marketers can
utilize a number of strategies on the demand side. Which of the following is NOTone of these strategies?
a. Provide complementary services to waiting customers
b.
Cultivate nonpeak
demand
c.
Differential
pricing
d.
Share services
e.
Manage demand
levels through a reservation system

22. To match supply and demand on the supply
side, marketers can employ a number of strategies. Which of the following is NOTone of these strategies?
a.
Maximize peak-time efficiency
b. Employ a reservation system
c. Increase consumer participation
d. Utilize part-time employees
e. Share services

23. According to Berry, Parasuraman, and Zeithaml, ________
is the single most important dimension of service quality.
a. listening
b. fair play
c. reliability
d. service design
e. recovery

24. Firms have decided to raise fees and lower
service to those customers who barely pay their way and to coddle big spenders
to retain their patronage as long as possible, an example of organizing
customers by ________.
a. purchase frequency
b. profit tiers
c. psychographic characteristics
d. social influence
e. none of the above

25. There are shifts that favor the customer in
the client relationship. Customers are now becoming more sophisticated about
buying product-support services and are pressing for ________.
a. selective pricing
b. institutional pricing/services
c. substitute services
d. promotional pricing
e. services unbundling

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

27. In the context of holistic marketing, ________
describes the normal work of preparing, pricing, distributing, and promoting
the service to customers.
a. internal marketing
b. correlated marketing
c. external marketing
d. integrated marketing
e. universal marketing

28. Factors that lead to customer switching behavior
include all of the following EXCEPT
________.
a. problem solving
b. pricing
c. inconvenience
d. ethical problems
e. none of the above

29. Clients judge the service outcome not only by its
________ but also by its functional quality.
a. length of time
b. price
c. attributes
d. completeness
e. technical quality

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

31. According to the service-quality model, the first
“gap” is the one between ________.
a. perceived service and expected service
b. service delivery and external communications
c. service-quality specifications and service delivery
d. management perception and service-quality
specification
e. consumer expectation and management perception
:

32. According to the service-quality model, the second
“gap” is the one between ________.
a. perceived service and expected service
b. service delivery and external communications
c. service-quality specifications and service delivery
d. management perception and service-quality
specification
e. consumer expectation and management perception

33. According to the service-quality model, the third
“gap” in their service-quality model is the gap between ________.
a. perceived service and expected service
b. service delivery and external communications
c. service-quality specifications and service delivery
d. management perception and service-quality
specification
e. consumer expectation and management perception

34. According to the service-quality model, the fourth
“gap” is the one between ________.
a. perceived service and expected service
b. service delivery and external communications
c. service-quality specifications and service delivery
d. management perception and service-quality
specification
e. consumer expectation and management perception

35. According to the service-quality model, the fifth
“gap” is the one between ________.
a. perceived service and expected service
b. service delivery and external communications
c. service-quality specifications and service delivery
d. management perception and service-quality
specification
e. consumer expectation and management perception

36. The five determinants of service quality include all
of the following EXCEPT ­________.

a. empathy
b. assurance
c. responsiveness
d. reliability
e. reputation

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

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

39. A service company can differentiate itself on three
levels. The first is reliability, the second is resilience, and the third is
________.
a. assuredness
b. employees
c. innovativeness
d. teamwork
e. none of the above

40. Not all SSTs improve service quality, but they have
the potential of making service transactions more accurate, ________, and
faster.
a. convenient
b. discounted
c. inconvenient
d. popular
e. none of the above
:

41. When initiating self-service technologies, some
companies have found that the biggest obstacle is not the technology itself,
but ________ customers to use it.
a. enticing
b. becoming familiar with
c. adapting
d. utilizing
e. convincing
:

42. Top firms audit both their own and their competitors’
service performance on a regular basis by collecting ________ measurements to
probe customer satisfaction.
a. chat room
b. voice of the customer
c. e-mail solicitation
d. consumer activist group
e. none of the above

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

44. Companies that ________ disappointed customers to
complain—and also empower employees to remedy the situation on the spot—achieve
higher revenues and greater profits than companies that lack a systematic
approach for addressing service failures.
a. ignore
b. frustrate
c. discourage
d. encourage
e. none of the above

Research has shown that customers evaluate
complaint incidents in terms of the________.
f. anger of the customer
g. personality of the manager
h. outcomes they receive
i.
monetary rewards
j.
none of the
above

45. Getting front-line employees to adopt ________ and to
advocate the interests and image of the firm to consumers as well as take
initiative and engage in conscientious behavior in dealing with customers can
be a critical asset.
a. company policies and procedures
b. win-win philosophy
c. conflict-management courses
d. training lessons
e. extra-role behaviors

46. Excellent service companies know that ________
employee attitudes will promote stronger customer loyalty.
a. accommodating
b. nonthreatening
c. neutral
d. negative
e. positive

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

48. Service offerings can be differentiated in many ways.
The offering can include innovative features. What the customer expects is
called the ________.
a. brand package
b. complete service package
c. primary service package
d. bundled package
e.
none of the above

49. To differentiate its service, a provider can
add ________ to the package of services
already provided.
a. secondary service features
b. primary service features
c. value bundling
d. branding
e. price bands of like services

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

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

52. Because service decisions and arrangements are often
made away from the actual service location, brand ________ becomes critical.
a. design
b. slogans
c. image
d. recall
e. remind

53. Because a physical product does not exist, the
________ of the service provider are especially important.
a. characteristics
b. logos
c. physical facilities
d. brand images
e. colors

54. Service firms can design ________ and information
programs so that consumers learn more about the brand than the information they
get from the service encounter alone.
a. advertising campaigns
b. marketing measures
c. ad agencies
d. marketing communications
e. marketing strategy

55. Services must consider developing a brand hierarchy
and brand portfolio that permits ________ and targeting of different market
segments.
a. differentiation
b. product placement

c. positioning
d. image
e. none of the above
56. Manufacturers of equipment all must provide
product-support services. Companies in these industries must define customer
needs carefully in designing their service support program. Customers have
three specific worries when discussing product-support services. These three
worries include all of the following EXCEPT
________.
a. out-of-pocket costs
b. reputation of manufacturer
c. service dependability
d. downtime
e. failure frequency

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

d. product’s purchase cost plus any salvage value.
e. product’s purchase cost plus discounted cost of
maintenance and repair

58. To provide the best support, a manufacturer
must identify the services customers value most and their ________ importance.
a. competitive
b. popular
c. absolute
d. relative
e. none of the above

59. Classes of services can be branded vertically on the
basis of ________.
a. popularity and price
b. cost of providing the service
c. price and quality
d. price and frequency

e. target return on investment

True/False

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

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

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

63. A pure tangible good consists of
unequal parts of goods and services, with services being in the majority.

64. An example of a pure service provider might be a car
repair facility.
Answer:
False Service providers typically develop very similar marketing programs for
personal and business markets.

65. Service consumers can always judge the quality that
they receive from the service provider.

66. Because services are generally high in experience and
credence qualities, there is more risk in purchase.
Answer:
True Services have five distinctive characteristics, one of these five being
“pure service.”

67. Intangibility with regards to a service means that the
service cannot be duplicated across providers.

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

69. Inseparability in the context of a service
means that the service provider and the service customer/consumer cannot be
separated because one effects another.
70. The quality of services is independent of who
provides them.

71. Services cannot be stored, so their
perishability can become a problem when demand fluctuates.

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

73. Customers are becoming more sophisticated
about buying product-support services and are pressing for services unbundling.

Answer:
True Customers generally acknowledge when they are at fault for a service
failure and do not hold the service provider responsible.

74. Because service encounters are complex
interactions affected by multiple elements, adopting a holistic marketing
approach might not work effectively.
75. Interactive marketing describes the employees’ skill
in serving the client.

76. Clients
judge service not only by its technical quality but also by its functional
quality.

77. As companies collect, store, and use more information
about customers, they must also incorporate the proper safeguards to protect
that information and reassure customers about their efforts.

78. The service quality of a firm is tested at each
service encounter.

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

80. The appearance of physical facilities, equipment,
personnel, and communication materials are the tangibles that convey service
quality to consumers.

81. With continuously provided services, such as public
utilities or health care, customers have been observed to mentally calculate
their payment equity—the perceived fairness of the level of economic benefits
derived from service usage in relationship to the level of economic costs.

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

83. Top service companies are “customer obsessed.”

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

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

86. All customers seek social exchange and affirmation in
their service experiences.

Services can be judged on customer importance
and company performance.

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

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

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

90. Brand personality is an important image dimension for
services.

91. The company need not define the customer needs
carefully because customers can always switch providers.

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

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

94.
Services must
consider developing a brand hierarchy and brand portfolio that permits
positioning and targeting of different market segments.

Essay

101.
A company’s
offerings often include services as a minor or a major part of the total
offering. List and briefly explain each
of the five categories of offerings.

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

102.
The service
outcome, and whether people will remain loyal to a service provider, is
influenced by a host of variables.
Identify the eight categories into which these factors fall.

103.
The service
quality of a firm is tested at each customer encounter. The service-quality
model highlights the main requirements for delivering high service quality. The
model identifies five gaps that cause unsuccessful delivery. List each of these
gaps.

104.
Based on the
service-quality “gaps” model, the researchers identified five determinants of
service quality. List and briefly explain each.

105.
The model of service-quality
expectations is based on the premise that customer perceptions and expectations
of service quality change over time, but at any one point in time are a
function of prior expectations of what will and what should happen during the
service encounter, as well as the actual service delivered during the last
contact. The researchers’ empirically tested model contends that the two
different types of expectations have opposing effects on perceptions of service
quality. List these two models.

106.
Marketing
academics and consultants Jeffrey Rayport and Bernie Jaworski believe that to
deliver high levels of customer-perceived value, any customer-service interface
should excel on four dimensions. Define
the term “customer-service interface” and identify the four dimensions on which
it should excel.

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

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

Suggested
Answer:Customers
worry about: (1) the reliability and failure frequency of the product; (2)
downtime caused by the failure of the product; and (3) out-of-pocket costs associated with the product failure.

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

APPLICATION
QUESTIONS

Multiple
Choice

110.
A plumbing firm
is considered a service firm because they are providing “services” to
households and businesses. The service component then would fall into which one
of the following categories of offerings?
a.
Pure tangible
good
b.
Tangible good
with accompanying services
c.
Hybrid
d.
Major service
with accompanying minor goods and services
e.
Pure service
111.
Some services are easy to evaluate by the consumer and
others are not. Which one of the following would be considered high in credence
qualities and thus hard to evaluate by the majority of consumers?
a.
Decorating
b.
A restaurant
c.
A haircut
d.
A medical diagnosis
e. None of the above

112.
Services can be high in search qualities. Which one of the following is NOT seen as
high in search qualities?
a.
Decorating
b.
A restaurant
c.
A haircut
d.
A medical diagnosis
e. None of the above

113.
If we say that services cannot be seen before purchase,
forcing customers to look for other clues to assess service quality, we mean
that services are _________.
a.
intangible
b.
inseparable
c.
perishable
d.
variable
e. none of the above

114.
When Blue Man Group began, the three founders performed
every show. In order to expand the
concept and overcome the limits of service ________, the founders added more
Blue Men.
a.
perishability
b.
inseparability
c.
variability
d.
intangibility
e.
temporality

115.
Services vary depending who provides them and when and
where they are performed. Which of the following strategy would work for you to
increase the quality control over your tax preparation services as you expand
to other markets?
a.
Invest in good training and hiring procedures.
b.
Standardize the service.
c.
Monitor customer satisfaction.
d.
All of the above
e.
None of the above

116.
When cell phone providers offer “weekends free,” they
are attempting to ________ when it comes to the perishability of the service
they provide.
a.
manage supply and demand
b.
manage supply
c.
manage demand
d.
offer to sign up new subscribers
e.
increase
usage

When restaurants and theme parks add summer workers, they are attempting to
manage supply and demand for their services by ________.
f.
sharing services
g.
introducing complementary services
h.
maximizing nonpeak demand
i.
using part-time employees
j.
increasing
enrollment
117.
Charles Schwab’s best customers get their calls
answered in 15 seconds; other customers
can wait longer. This is best described
as ________.
a.
fair play in service delivery
b.
customer empowerment through the Internet
c.
raising service levels to retain the patronage of
profitable customers
d.
increasing consumer participation
e.
standardizing the service-performance process

118.
Although I used to use the U.S. Postal Service because
it offered better prices on package shipping, now I almost always use FedEx
because I can ship from any FedEx*Kinkos location 24 hours per day. This is an example of which of the following
factors leading to customer switching behavior?
a.
Inconvenience
b.
Pricing
c.
Response to service failure
d.
Ethical problems
e.
Involuntary switching

119.
I have switched my dry cleaning provider because the
cleaner did not perform up to my standards. This is an example of which of the
following factors leading to customer switching behavior?
a.
Service encounter failure
b.
Core service failure
c.
Response to service failure
d.
Involuntary switching
e.
Competition

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

120.
When the lawn service firm advertises, “We can handle
all your lawn needs in one stop” and then requires three or four visits to
satisfy you, this is an example of which of the gaps of service performance?
a.
Between service delivery and translation of perceptions
b.
Between expected service and perceived service
c.
Between service delivery and external communications
d.
Between management’s perception and consumers
expectations
e.
None of the above
121.
Bill always takes his shoes to the same cobbler when
they need to be resoled because that cobbler always has the shoes ready
quickly. This cobbler excels at which of
the following five determinants of service quality?
a.
Reliability
b.
Responsiveness
c.
Assurance
d.
Empathy
e.
Tangibles
Gloria always goes to the same
bagel shop in the morning because the
workers there remember her name and know her order. They always make her feel welcome. The employees of this bagel shop excel at
which of the following determinants of service quality?
f.
Reliability
g.
Responsiveness
h.
Assurance
i.
Empathy
j.
Tangibles

122.
A service company can differentiate itself by designing
a better and faster delivery system. Of
the three levels of differentiation, ________ describes how well suppliers
handle emergencies, product recalls, and answering inquiries.
a.
reliability
b.
resilience
c.
innovativeness
d.
preparedness
e.
none of the above

123.
Not all ________ improve service quality, but they can
make service transactions more accurate, convenient, and faster.
a.
service standards
b.
top management commitment
c.
self-service technologies
d.
strategic concepts
e.
service-quality perceptions
124.
After visiting a local car dealer and having your car
serviced, a day later you receive a phone call from a research firm asking you
to comment on your service experience. This is part of the manufacturer’s
quality control over its dealers and the firm’s audit of the service performance
by collecting _________.
a.
satisfying customer complaints
b.
dealer performance
c.
customer performance
d.
“voice of the customer measurements”
e.
“competitive data”

125.
Employees thrive in customer-contact positions when
they have an internal drive to _____.
a.
pamper customers
b.
accurately read customer needs
c.
develop a personal relationship with customers
d.
deliver quality service to solve customers’ problems
e. all of the above

126.
To provide the best support, a manufacturer must
identify the services customers value most and their relative importance. Johnson Controls introduced services that
extend beyond its climate control equipment and components business to manage
integrated facilities by offering products and services that optimize energy
use and improve comfort and security.
This is an example of adding ________.
a.
facilitating services
b.
extended warranties
c.
life-cycle services
d.
service contracts
e.
value-augmenting services

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