Chapter 13: Designing and Managing Services
GENERAL CONCEPT QUESTIONS
Multiple Choice
1. As companies find it harder and harder to differentiate their physical products, they
turn to service differentiation. Companies seek to develop a reputation for ________,
better and faster answering of inquiries, and quicker resolution of complaints.
a. superior packaging
b. superior “value”
c. superior on-time delivery
d. superior products
e. superior customer service
Answer: c
Page: 401
Level of difficulty: Easy
2. Service industries are everywhere. They include government, private nonprofit,
business sector, manufacturing sector, and the ________.
a. insurance salespeople
b. seasonal workers
c. temporary workers
d. retail sector
e. none of the above
Answer: d
Page: 402
Level of difficulty: Easy
3. Manufacturers, distributors, and retailers can provide ________ services or simply
excellent customer service to differentiate themselves.
a. financial
b. value-added
c. sales
d. marketing
e. distribution
Answer: b
Page: 402
Level of difficulty: Easy
4. There are five categories of offerings for a service. It can be either a minor or a major
component of the company’s offerings. Which of the following is NOT one of these
five categories?
a. Pure tangible good.
b. Tangible good with accompanying services.
c. Hybrid.
d. Major service with accompanying minor goods and services.
e. Major service with accompanying major goods.
Answer: e
Page: 403
Level of difficulty: Medium
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5. Which of the following would be an example of a “hybrid” service?
a. University
b. Professor
c. Restaurant
d. Soap manufacturer
e. Airline
Answer: c
Page: 403
Level of difficulty: Medium
6. Which of the following would be an example of a “pure service”?
a. Insurance
b. Airlines
c. Car dealer
d. Copier company
e. None of the above
Answer: a
Page 404
Level of difficulty: Medium
7. Services vary as to whether they are equipment-based or ________.
a. service-based
b. people-based
c. process-based
d. historical-based
e. none of the above
Answer: b
Page: 404
Level of difficulty: Hard
8. Some services require that the client be present to conduct the service An example of
such a service is a ________.
a. vending machines
b. fast-food
c. medical operation
d. car repair
e. tax service
Answer: c
Page: 404
Level of difficulty: Easy
9. 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
Answer: c
Page: 404
Level of difficulty: Hard
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Chapter 13: Designing and Managing Services
10. Services high in ________qualities are those services that have characteristics the
buyer normally finds hard to evaluate even after consumption.
a. equipment
b. search
c. experience
d. personal attention
e. credence
Answer: e
Page: 404
Level of difficulty: Medium
11. Services have four distinctive characteristics that greatly affect the design of
marketing programs. Which of the following is NOT one of these characteristics?
a. Intangibility
b. Communicability
c. Variability
d. Perishability
e. None of the above
Answer: b
Page: 405
Level of difficulty: Medium
12. Services cannot be seen, tasted, felt, or heard before they are bought To reduce
uncertainty, buyers will look for evidence of quality. They will draw inference about
quality from place, people, and price they see. Therefore, the service provider’s task
is to “________.”
a. communicate value
b. manage the evidence
c. full speed ahead
d. high touch- high price
e. none of the above
Answer: b
Page: 405
Level of difficulty: Hard
13. Service companies can try to demonstrate their service quality through physical
evidence and ________.
a. predatory pricing
b. people
c. pricing
d. profits
e. presentation
Answer: e
Page: 405
Level of difficulty: Medium
14. Unlike physical goods, services are produced and ________ simultaneously.
a. launched
b. consumed
c. created
d. maximized
e. none of the above
Answer: b
Page: 406
Level of difficulty: Easy
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Part 5: Shaping the Market Offerings
15. One of the special features of services marketing is the provider-client interaction.
This is defined as when the client is also ________ as the service is produced.
a. prominent
b. product
c. producing
d. present
e. paying
Answer: d
Page: 406
Level of difficulty: Hard
16. Services depend on who provides them and when and where they are provided they
are highly ________.
a. suspect
b. variable
c. consistent
d. sub-standard
e. none of the above
Answer: b
Page: 406
Level of difficulty: Easy
17. There are three steps service firms can take to increase quality control. Which of the
following is NOT one of these steps?
a. Reduce customer contact points.
b. Monitor customer satisfaction.
c. Standardize the service-performance process.
d. Invest in good training procedures.
e. Invest in good hiring procedures.
Answer: a
Page: 406
Level of difficulty: Hard
18. Services cannot be stored, warehoused, or shelved. This is concept is unique to service
marketers and is called ________.
a. standardization
b. heterogeneity
c. perishability
d. intangibility
e. none of the above
Answer: c
Page: 407
Level of difficulty: Easy
19. To match demand and supply, service marketers can utilize a number of strategies on
the demand side. Which of the following is NOT one of these strategies?
a. Complementary
b. Nonpeak demand
c. Differential pricing
d. Shared services
e. None of the above
Answer: d
Page: 407
Level of difficulty: Hard
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Chapter 13: Designing and Managing Services
20. To match supply and demand on the supply side, marketers can employ a number of
strategies. Which of the following is NOT one of these strategies?
a. Peak-time efficiency.
b. Reservation system.
c. Increased consumer participation.
d. Part-time employees.
e. None of the above
Answer: b
Page: 407
Level of difficulty: Easy
21. There are shifts that favor the customer in the client relationship. Customers are now
becoming more sophisticated about buying product support services and are pressing
for “________.”
a. selective pricing
b. institutional pricing/services
c. substitute services
d. promotional pricing
e. services unbundling
Answer: e
Page: 409
Level of difficulty: Hard
22. Holistic marketing for services requires external, ________, and internal marketing.
a. exceptional
b. incremental
c. consistent
d. interactive
e. influential
Answer: d
Page: 410
Level of difficulty: Hard
23. 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
Answer: a
Page: 411
Level of difficulty: Hard
24. 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
Answer: e
Page: 411
Level of difficulty: Easy
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Part 5: Shaping the Market Offerings
25. ________ describes the employees’ skill in serving the client.
a. Interactive marketing
b. Internal marketing
c. Client marketing
d. Fixed marketing
e. Technical marketing
Answer: a
Page: 411
Level of difficulty: Easy
26. According to Parasuraman, Zeithaml, and Berry, the first “gap” in their servicequality 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
Answer: e
Page: 412
Level of difficulty: Hard
27. According to Parasuraman, Zeithaml, and Berry, the second “gap” in their servicequality 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
Answer: d
Page: 413
Level of difficulty: Hard
28. According to Parasuraman, Zeithaml, and Berry, the third “gap” in their servicequality 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
Answer: c
Page: 413
Level of difficulty: Hard
29. According to Parasuraman, Zeithaml, and Berry, the fourth “gap” in their servicequality 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
Answer: b
Page: 413
Level of difficulty: Hard
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Chapter 13: Designing and Managing Services
30. According to Parasuraman, Zeithaml, and Berry, the fifth “gap” in their servicequality 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
Answer: a
Page: 413
Level of difficulty: Hard
31. The five determinants of service quality include all of the following EXCEPT
________.
a. empathy
b. assurance
c. responsiveness
d. reliability
e. reputation
Answer: e
Pages: 413–414
Level of difficulty: Medium
32. There is a ________ where consumer perceptions on a service dimension would be
deemed satisfactory, anchored by the minimum level consumers would be willing to
accept and the level that customers believe can and should be delivered.
a. empathy
b. zone of tolerance
c. zone of forgiveness
d. perceived forgiveness
e. value definition
Answer: b
Page: 414
Level of difficulty: Medium
33. Top service companies are “customer obsessed.” They have a clear sense of their
target customers and their needs. Their management looks not only at financial
performance on a monthly basis, but also at ________.
a. service performance
b. tangible rewards
c. consumer complaints
d. marketing activities
e. none of the above
Answer: a
Page: 415
Level of difficulty: Medium
34. A service company can differentiate itself on three levels. The first is reliability, the
second is resilience, and the third is ________.
a. assuredness
b. employees
c. innovativeness
d. teamwork
e. none of the above
Answer: c
Page: 416
Level of difficulty: Hard
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Part 5: Shaping the Market Offerings
35. 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
Answer: a
Page: 417
Level of difficulty: Easy
36. When initiating self-service technologies, some companies have found that the
biggest obstacle is not the technology itself, but ________ customers to use it.
a. enticing
b. feeling comfortable with
c. adapting
d. utilizing
e. convincing
Answer: e
Page: 417
Level of difficulty: Easy
37. Delta Airlines has been successful in getting customers to use its self-service kiosks
by employing a number of tactics. Which of the following was NOT a tactic used by
Delta Airlines.
a. Advertise the advantages.
b. Charge for the convenience.
c. Be there to help.
d. Maintain the machines.
e. None of the above.
Answer: b
Page: 418
Level of difficulty: Easy
38. Top firms audit service performance, both their own and their competitors’ on a
regular basis. They collect ________ to probe customer satisfiers and dissatisfiers.
a. chat rooms
b. voice of the customer
c. e-mail solicitations
d. consumer activists groups
e. none of the above
Answer: b
Page: 418
Level of difficulty: Easy
39. Services can be judged on customer importance and company performance.
________ is used to rate the various elements of the service bundle and identify what
actions are required.
a. SERVQAL
b. Consumer-quality analysis
c. Importance-performance analysis
d. Key-service indices analysis
e. Reliability-service indices analysis
Answer: c
Page: 418
Level of difficulty: Hard
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Chapter 13: Designing and Managing Services
40. Studies of customer dissatisfaction show that customers are dissatisfied with their
purchases about 25 percent of the time but that only about ________ complain.
a. 2 percent
b. 10 percent
c. 5 percent
d. 15 percent
e. none of the above
Answer: c
Page: 419
Level of difficulty: Easy
41. Customers whose complaints are satisfactorily resolve often become ________
company loyal than customers who were never dissatisfied.
a. effective
b. no change
c. more
d. less
e. indifferent
Answer: c
Page: 420
Level of difficulty: Easy
42. Companies that ________ disappointed customers to complain—and also empower
employees to remedy the situation on the spot—have been shown to achieve higher
revenues and greater profits than companies that do not have a systematic approach
for addressing service failures.
a. ignore
b. frustrate
c. discourage
d. encourage
e. none of the above
Answer: d
Page: 420
Level of difficulty: Easy
43. Research has shown that customers evaluate complaint incidents in terms of
the________, the procedures used to arrive at those outcomes, and the nature of the
interpersonal treatment during the process.
a. anger of the customer
b. personality of the manager
c. outcomes they receive
d. monetary rewards
e. none of the above
Answer: c
Page: 420
Level of difficulty: Medium
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Part 5: Shaping the Market Offerings
44. Getting front-line employees to adopt ________ and to advocate the interests and
image of the firm to consumers as well as take initiative and engage in conscientious
behavior in dealing with customers can be a critical asset.
a. company policies and procedures
b. win/win philosophy
c. conflict management courses
d. training lessons
e. extra-role behaviors
Answer: e
Page: 420
Level of difficulty: Hard
45. Excellent service companies know that ________ employee attitudes will promote
stronger customer loyalty.
a. accommodating
b. non-threatening
c. neutral
d. negative
e. positive
Answer: e
Page: 420
Level of difficulty: Medium
46. Service marketers frequently complain about the difficulty of ________ their
services.
a. marketing
b. diffusing
c. differentiating
d. developing
e. designing
Answer: c
Page: 422
Level of difficulty: Medium
47. 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
Answer: c
Page: 422
Level of difficulty: Hard
48. To differentiate their 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
Answer: a
Page: 422
Level of difficulty: Medium
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Chapter 13: Designing and Managing Services
49. Sometimes, companies achieve differentiation through the sheer range of its service
offerings and the success of its ________ efforts.
a. pricing
b. cross-selling
c. advertising
d. sales representatives
e. none of the above
Answer: b
Page: 422
Level of difficulty: Hard
50. Developing brand strategies for a service requires special attention to choosing brand
elements, establishing image dimensions, and ________.
a. developing a marketing niche
b. developing an advertising campaign
c. devising a branding strategy
d. developing differentiation
e. none of the above
Answer: c
Page: 423
Level of difficulty: Easy
51. The intangibility of services has implications for the choice of brand elements.
Because service decisions and arrangements are often made away from the actual
service location, brand ________ becomes critical. In such cases, an easy-toremember brand name is imperative.
a. design
b. slogans
c. image
d. recall
e. remind
Answer: d
Page: 423
Level of difficulty: Easy
52. Because a physical product does not exist, the ________ of the service provider-its
primary and secondary signage, environmental design and reception areas, etcetera
are especially important.
a. characters
b. logo
c. physical facilities
d. brand image
e. colors
Answer: c
Page: 423
Level of difficulty: Easy
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Part 5: Shaping the Market Offerings
53. Organizational associations—such as perceptions about the people who make up the
organization and who provide the service-are likely to be particularly important brand
associations that may affect evaluations of service quality directly or indirectly. One
particular important association is company ________ and perceived expertise,
trustworthiness, and likeability.
a. credibility
b. reliability
c. assurance
d. tangibility
e. heterogeneity
Answer: a
Page: 423
Level of difficulty: Hard
54. Service firms must therefore design ________ and information programs so that
consumers learn more about the brand than the information they get from the service
encounter alone.
a. advertising campaigns
b. marketing measures
c. ad agencies
d. marketing communications
e. marketing strategy
Answer: d
Page: 423
Level of difficulty: Medium
55. Services must consider developing a brand hierarchy and brand portfolio that permits
________ and targeting of different market segments.
a. differentiation
b. product placement
c. positioning
d. image
e. none of the above
Answer: c
Page: 423
Level of difficulty: Easy
56. Manufacturers of equipment all have to provide product support services. Companies
in these industries must define customer needs carefully in designing their service
support program. Customers have three specific worries when discussing product
support services. These three worries include all of the following EXCEPT
________.
a. out-of-pocket costs
b. reputation of manufacturer
c. service dependability
d. downtime
e. failure frequency
Answer: b
Page: 425
Level of difficulty: Medium
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Chapter 13: Designing and Managing Services
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
Answer: b
Page: 425
Level of difficulty: Hard
58. A manufacturer can offer and charge for product support services in different ways.
Which of the following is NOT one of the ways manufacturers charge for additional
product support services?
a. Increase annual purchases for additional services.
b. Service contracts.
c. Extended warranties.
d. Pay for the services upfront.
e. Increase the initial cost of the product.
Answer: e
Page: 425
Level of difficulty: Medium
59. 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
Answer: d
Page: 425
Level of difficulty: Easy
60. 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
Answer: c
Page: 423
Level of difficulty: Easy
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Part 5: Shaping the Market Offerings
True/False
61. The Bureau of Labor Statistics reports that the service-producing sector will continue
to lose jobs over the next five years.
Answer: False
Page: 402
Level of difficulty: Easy
62. Services include government, private nonprofit, business, and the manufacturing
sector.
Answer: True
Page: 402
Level of difficulty: Easy
63. A “service” is defined as any act or performance that one party can offer to another
that is essentially intangible and does not result in the ownership of anything.
Answer: True
Page: 402
Level of difficulty: Medium
64. A hybrid service consists of unequal parts of goods and services, with services being
in the majority.
Answer: False
Page: 403
Level of difficulty: Medium
65. An example of a pure service provider might be for example a car repair facility.
Answer: False
Page: 404
Level of difficulty: Medium
66. Services vary as to whether they are equipment-based and/or people-based.
Answer: True
Page: 404
Level of difficulty: Medium
67. No matter what the “service” consumers can judge the quality that they receive from
the service provider.
Answer: False
Page: 404
Level of difficulty: Medium
68. Because services are generally high in experience and credence qualities, there is
more risk in purchase.
Answer: True
Page: 404
Level of difficulty: Hard
69. Services have five distinctive characteristics, one of these five being “pure service.”
Answer: False
Page: 405
Level of difficulty: Medium
70. Intangibility with regards to a “service” means that the service cannot be duplicated
across providers.
Answer: False
Page: 405
Level of difficulty: Medium
71. Service companies try to demonstrate their service qualities through physical
evidence and presentation.
Answer: True
Page: 405
Level of difficulty: Medium
72. Inseparability in the context of a “service” means that the service provider and the
service customer/consumer cannot be separated since one effects another.
Answer: True
Page: 406
Level of difficulty: Hard
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Chapter 13: Designing and Managing Services
73. One of the strategies to equalize supply and demand for service providers is to price
their services “high” when demand is low and “low” when demand is at its highest.
Answer: False
Page: 407
Level of difficulty: Hard
74. Currently, businesses have so much data on their customers that they are able to
differentiate customers by “tiers” thus providing equal services to each level or “tier.”
Answer: False
Page: 408
Level of difficulty: Hard
75. Customers are becoming more sophisticated about buying product support services
and are pressing for “services unbundling.”
Answer: True
Page: 409
Level of difficulty: Medium
76. Because service encounters are complex interactions affected by multiple elements,
adopting a holistic marketing approach might not work effectively.
Answer: False
Page: 410
Level of difficulty: Medium
77. Interactive marketing describes the employees’ skill in serving the client.
Answer: True
Page: 411
Level of difficulty: Medium
78. Clients judge service not only by its technical quality but also by its price.
Answer: False
Page: 411
Level of difficulty: Medium
79. The service quality of a firm is tested at each service encounter.
Answer: True
Page: 412
Level of difficulty: Medium
80. Customers form service expectations from such areas as past experiences, word of
mouth, and advertising.
Answer: True
Page: 412
Level of difficulty: Easy
81. The “gaps” of service quality as illustrated by Parasuraman, Zeithaml, and Berry
show exactly how a firm can eliminate all service failures quite easily.
Answer: False
Page: 412
Level of difficulty: Hard
82. The first “gap” is the “gap” between management’s perceptions of consumer
expectations and consumers’ expected service.
Answer: True
Page: 413
Level of difficulty: Hard
83. The second “gap” is the “gap” between management perceptions of consumer
expectations and the translation of these perceptions into service-quality
specifications.
Answer: True
Page: 413
Level of difficulty: Medium
84. The third “Gap” is the “gap” between service-quality specifications and external
communications to consumers.
Answer: False
Page: 413
Level of difficulty: Medium
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Part 5: Shaping the Market Offerings
85. The fifth “gap” is the “gap” between external communications and the consumers
expected service.
Answer: False
Page: 413
Level of difficulty: Medium
86. Various studies have found that the well-managed service companies share no
common service characteristics.
Answer: False
Page: 414
Level of difficulty: Hard
87. Top service companies are “customer obsessed.”
Answer: True
Page: 415
Level of difficulty: Medium
88. A service company can differentiate itself by designing a better and faster delivery
system.
Answer: True
Page: 416
Level of difficulty: Hard
89. The three levels of differentiation for a service company include reliability, resilience,
and cost.
Answer: False
Page: 416
Level of difficulty: Hard
90. Services can be judged on customer importance and company performance.
Answer: True
Page: 418
Level of difficulty: Medium
91. Studies of customer dissatisfaction show that customers are dissatisfied with their
purchases about 25 percent of the time and about 15 percent of them complain.
Answer: False
Page: 419
Level of difficulty: Medium
92. Excellent service companies know that positive employee attitudes will promote
stronger customer loyalty.
Answer: True
Page: 420
Level of difficulty: Medium
93. Service marketers have no problem in differentiating their services from the
competition.
Answer: False
Page: 422
Level of difficulty: Easy
94. Service offerings can be differentiated in numerous ways because the consumer only
expects to see the company’s primary service package.
Answer: True
Page: 422
Level of difficulty: Hard
95. The company need not define the customer needs carefully because customer’s can
always switch providers.
Answer: False
Page: 425
Level of difficulty: Medium
96. A manufacturer can offer and charge for product support services only when
negotiating the final price of the product.
Answer: False
Page: 425
Level of difficulty: Easy
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Chapter 13: Designing and Managing Services
97. Service contracts and extended warranties are examples of companies charging for
additional services.
Answer: True
Page: 425
Level of difficulty: Easy
98. Developing brand strategies for a service brand requires special attention to choosing
brand elements, establishing image dimensions, and devising the branding strategy.
Answer: True
Page: 423
Level of difficulty: Hard
99. Service firms must therefore design marketing communications and information
programs so that consumers learn more about the brand than the information they get
from service encounters alone.
Answer: True
Page: 423
Level of difficulty: Hard
100. Services must consider developing a brand hierarchy and brand portfolio that
permits positioning and targeting of different market segments.
Answer: True
Page: 423
Level of difficulty: Hard
Essay
101.
A company’s offerings often include services. The service component can be a
minor or a major part of the total offering. Five categories of offering can be
distinguished. Please list, briefly explain each category, and offer an example of
each.
Suggested Answer: The five offerings are: (1) pure tangible good—offering
consists primarily of a tangible good—no services accompany this product;
(2) tangible good with accompanying services—offering consists of a tangible
good accompanied by one or more services—cars; ( 3) hybrid—offering consists
of equal parts of goods and services—restaurants; (4) major service with
accompanying minor goods and services—offering consists of major services
along with additional services or supporting goods—airlines; and (5) pure service
—offering consists primarily of a service—baby-sitting.
Pages: 403-404
Level of difficulty: Easy
102.
Services have four distinctive characteristics that greatly affect the design of
marketing programs. Please list these characteristics and briefly explain each.
Suggested Answer: The characteristics are: (1) intangibility—services cannot
be seen, tasted, felt, heard, or smelled before they are bought; (2) inseparability—
services are produced and consumed simultaneously; (3) variability—because
services depend on who provides them and when and where they are provided,
they are highly variable in their delivery/consistency; and (4) perishability—
services cannot be stored, inventoried, or shelved
Pages: 405-407
Level of difficulty: Medium
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Part 5: Shaping the Market Offerings
103.
Customers’ expectations are the true standards for judging service quality. The
chapter provides a service-marketing checklist of six questions to see if the firm is
managing and exceeding customer expectations. List these “six” items from the
checklist.
Suggested Answer: (1) Do we strive to present a realistic picture of our service to
customers? (2) Is performing the service right the first time a top priority? (3) Do
we communicate effectively with customers? (4) Do we surprise customers during
the service process? (5) Do our employees regard service problems as
opportunities to impress customers? (6) Do we continuously evaluate and improve
our performance against customers’ expectations?
Page: 409
Level of difficulty: Hard
104.
The service quality of a firm is tested at each customer encounter. Parasuraman,
Zeithaml, and Berry formulated a service-quality model that highlights the main
requirements for delivering high service quality. The model identifies five gaps
that cause unsuccessful delivery. Please list and define each of these “gaps.”
Suggested Answer: The five gaps are: (1) the gap between consumer expectation
and management perception; (2) the gap between management perception and
service-quality specification; (3) the gap between service-quality specifications
and service delivery; (4) the gap between service delivery and external
communications; and (5) the gap between perceived service and expected service.
Page: 413
Level of difficulty: Hard
105.
Based on the service-quality “gaps” model, the researchers identified five
determinants of service quality. List and briefly explain each.
Suggested Answer: The five determinants of service quality are: (1) reliability—
the ability to perform the promised service dependably and accurately; (2)
responsiveness—the willingness to help customers and to provide prompt service;
(3) assurance—the knowledge and courtesy of employees and their ability to
convey trust and confidence; (4) empathy—the provision of caring, individualized
attention to customers; and (5) tangibles—the appearance of physical facilities,
equipment, personnel, and communication material.
Page: 414
Level of difficulty: Hard
106.
The model of service-quality expectations is based on the premise that customer
perceptions and expectations of service quality change over time, but at any one
point in time are a function of prior expectations of what will and what should
happen during the service encounter, as well as the actual service delivered
during the last contact. The researchers’ empirically tested model contends that
the two different types of expectations have opposing effects on perceptions of
service quality. List these two models.
Suggested Answer: The two models are: (1) increasing customer expectations of
what the firm will deliver can lead to improved perceptions of overall service
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quality; and (2) decreasing customer expectations of what the firm should deliver
can lead to improved perceptions of overall service quality.
Page: 415
Level of difficulty: Hard
107.
Developing brand strategies for a service brand requires special attention to the
elements of branding and marketing. Explain why it is different for branding a
service versus a tangible product.
Suggested Answer: First, choosing brand elements—the intangibility of services
has implications for the choice of brand elements. Because service decisions and
arrangements are often made away from the actual service location, brand recall
becomes critically important. Second, establishing image dimensions—
organizational associations are likely to be particularly important brand
associations that may affect evaluations of service quality directly or indirectly.
Service firms must design marketing communication and information programs
so that consumers learn more about the brand than the information they get from
service encounters alone. Lastly, devising branding strategy—services must also
consider developing a brand hierarchy and brand portfolio that permits
positioning and targeting of different market segments. Classes of service can be
branded vertically on the basis of price and quality and vertically by sub-branding
strategies where the corporate name is combined with an individual name or
modifier.
Pages: 423—424
Level of difficulty: Hard
108.
Manufacturers’ of equipment have to provide product support services. Product
support services are becoming a major battleground for competitive advantages.
Firms that provide high-quality service outperform their less-service orientated
competitors. In service support programs, customers generally have three specific
worries. Please list these three worries and briefly explain each.
Suggested Answer: These are: (1) Customers worry about the reliability and
failure frequency of the product.
2) Customers worry about downtime caused by the failure of the product.
3) Customers worry about out-of-pocket costs associated with the product failure.
Page: 425
Level of difficulty: Hard
109.
Several strategies exist for managing supply and demand of services. List the
strategies for both managing “supply” and then for managing “demand.”
Suggested Answer: To manage “demand”—differential pricing, non-peak
demand, complementary services, and reservation systems can all be used.
To manage “supply”—part-time employees, peak-time efficiency, increased
consumer participation, shared services, and facilities for future expansion.
Page: 407
Level of difficulty: Hard
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110.
Service companies can try to demonstrate their service quality through physical
evidence and presentation. Service marketers must be able to transform intangible
services into concrete benefits. Carbone and Haeckel proposed a set of concepts
called “customer experience engineering”. Explain this concept.
Suggested Answer: Companies must first develop a clear picture of what they
want the customer’s perception of an experience to be and then design a
consistent set of performance and context clues to support that experience. The
context clues are delivered by people (humanics), and things (mechanics). The
company assembles the clues in an experience blueprint. To the extent possible,
the clues should address all five senses.
Page: 405
Level of difficulty: Hard
APPLICATION QUESTIONS
Multiple Choice
111.
A plumbing firm is considered a service firm since they are providing “services”
to households and businesses. The service component then would fall into which
one of the following categories of offerings?
a. Pure tangible good.
b. Tangible good with accompanying services.
c. Hybrid.
d. Major service with accompanying minor goods and services.
e. Pure service.
Answer: b
Page: 403
Level of difficulty: Easy
112.
Some services are easy to evaluate by the consumer and others are not. Which one
of the following would be considered high in credence qualities and thus hard to
evaluate by the majority of consumers?
a. Decorating.
b. A restaurant.
c. A haircut.
d. A medical diagnosis.
e. None of the above.
Answer: d
Page: 404
Level of difficulty: Medium
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113.
Services can be high in search qualities. Which one of the following is NOT seen
as high in search qualities?
a. Decorating.
b. A restaurant.
c. A haircut.
d. A medical diagnosis.
e. None of the above.
Answer: d
Page: 404
Level of difficulty: Medium
114.
If we say that services cannot be seen before purchasing—that is a customer must
experience other clues to the service quality besides the tangible aspect, we are
saying that a service is _________.
a. intangible
b. inseparable
c. perishable
d. varies
e. none of the above
Answer: a
Page: 404
Level of difficulty: Medium
115.
Service companies try to communicate quality to their customers through physical
evidence. For a restaurant, which of the following would play a key role in
communicating the message “eat here” to customers’ best?
a. People
b. Place
c. Equipment
d. Price
e. Symbols
Answer: b
Page: 405
Level of difficulty: Medium
116.
Services are produced and consumed simultaneously. As a service provider how
can you overcome this limitation in an attempt to reach an ever-greater market
and customer base?
a. Train others to perform my service.
b. Use television.
c. Work with larger groups.
d. Use the Internet.
e. All of the above.
Answer: e
Page: 406
Level of difficulty: Hard
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Part 5: Shaping the Market Offerings
117.
Services vary depending who provides them and when and where they are
performed. Which of the following strategy would work for you to increase the
quality control over your tax preparation services as you expand to other markets?
a. Invest in good training and hiring procedures.
b. Standardize the service.
c. Monitor customer satisfaction.
d. None of the above.
e. Answers a, b and c.
Answer: e
Page: 406
Level of difficulty: Hard
When the cell phone providers’ offer “weekends free” they are attempting to
________ when it comes to the perishability of the service they provide.
a. manage supply and demand
b. manage supply
c. manage demand
d. offer to sign up new subscribers
e. increase usage
Answer: a
Page: 407
Level of difficulty: Medium
118.
119.
When restaurants and theme parks add summer workers, they are attempting to
manage supply and demand for their services by ________.
a. shared services
b. complementary services
c. nonpeak demand
d. using part-time employees
e. increasing enrollment
Answer: d
Page: 407
Level of difficulty: Easy
When a “good customer’s” phone call is answered within 15 seconds, and others
within 10 minutes, firms are providing high service to their best customers. This
is an example of ________ in service marketing.
a. increased customer participation
b. performing for the “key” customer
c. customer relationships
d. customer differentiating
e. peak-time efficiency
Answer: d
Pages: 408–409 Level of difficulty: Medium
120.
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121.
I have switched my dry cleaning provider because the cleaner did not perform up
to my standards. This is an example of which of the following customer switching
behaviors?
a. Service encounter failure.
b. Core service failure.
c. Response to service failure.
d. Involuntary switching.
e. Competition.
Answer: b
Page: 411
Level of difficulty: Medium
122.
After sending registered letters to the roofing company, numerous attempts to
contact the president of the company by phone, and sending copies of the
complaint to the Better Business Bureau, you finally received a response from the
firm that did not satisfy you. In desperation, you decided to have another
company complete the repairs to your home. This is an example of what kind of
customer switching behavior on your part?
a. Involuntary switching.
b. Competition.
c. Response to service failure.
d. Service encounter failures.
e. Inconvenience.
Answer: c
Page: 411
Level of difficulty: Medium
123. As you prepare to enjoy a night at the theater, your expectations rise as you listen to
the music, read the reviewers comments, and reflect back to the last time you saw
the same musical. All of these form your “expected service.” If a “gap” were to
exist, it would exist here between your “expected service” and the _________ of
the musical.
a. perceived performance
b. external communication of the performance
c. management perceptions of consumer expectations
d. translation of perceptions into service-quality specifications
e. none of the above
Answer: a
Page: 413
Level of difficulty: Medium
When the lawn service firm advertises, “We can handle all your lawn needs in
one stop” and then requires three or four visits to satisfy you, this is an example of
which one of the “gaps” of service performance?
a. Between service delivery and translation of perceptions.
b. Between expected service and perceived service.
c. Between service delivery and external communications.
d. Between management’s perception and consumers expectations.
e. None of the above.
Answer: c
Page: 413
Level of difficulty: Medium
124.
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125.
At the customer counter of your neighborhood tire dealer, you overhear the
manager tell a customer “Mrs. Jones, you have our assurance that we can fix your
car.” This comment increases your belief in the service quality of the organization
by communicating _________ to you and Mrs. Jones.
a. tangibles
b. reliability
c. assurance
d. responsiveness
e. empathy
Answer: c
Page: 413
Level of difficulty: Medium
126.
The first time you tried a local restaurant, the food and service was disappointing.
However, giving them the benefit of the “doubt” you agree to try the restaurant a
second time. Your rationale is that you have a minimum level of service that you
would deem satisfactory and a ________ where you believe that service can and
should be delivered within.
a. reliability
b. responsiveness
c. expectations
d. gap
e. zone of tolerance
Answer: e
Page: 414
Level of difficulty: Medium
127.
After visiting a local car dealer and having your car serviced, a day later you
receive a phone call from a research firm asking you to comment on your service
experience. This is part of the manufacturer’s quality control over its dealers and
the firm’s audit of the service performance by collecting _________.
a. satisfying customer complaints
b. dealer performance
c. customer performance
d. “voice of the customer measurements”
e. “competitive data”
Answer: d
Page: 418
Level of difficulty: Hard
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Chapter 13: Designing and Managing Services
128.
You were disappointed in the way your carpets were cleaned by a carpet cleaning
company. The manager of the firm immediately dispatched a “second” team to reclean your carpets at no additional costs. In addition, the manager made a visit to
your house the next day to personally inspect the work and to ensure that you
were completely satisfied with his company. As a result, you will recommend this
carpet cleaning company to friends and family. This service provider knows that
________.
a. if the complaint is resolved quickly, the consumer will not “bad mouth” the
firm
b. major and minor complaints do not affect future purchases
c. if the complaint is resolved quickly between 52 percent and 95 percent of the
consumers will buy again from the company
d. if the complaints are handled quickly, the firm will not be liable for future
damages
e. none of the above
Answer: c
Page: 420
Level of difficulty: Medium
129.
Because services are intangible and the service decisions are often made away
from the actual service location itself, brand recall becomes critically important.
As you begin to consider a starting your own tax service firm, you must consider
the importance of ________.
a. your educational experience
b. the location of your office
c. using the family’s ethnic surname
d. using a name that reflects your occupation
e. creating an easy to remember brand name
Answer: e
Page: 423
Level of difficulty: Easy
130.
The prominent location of diploma’s, organizational memberships, board
memberships, and certifications/qualifications on the walls of service providers is
their attempt(s) to _________.
a. establish image dimensions such as perceptions
b. establish the fact that they can charge higher fees due to their superior
qualifications
c. attempt to discourage customers that cannot afford their fees
d. attempt to compensate for some other shortcoming like years of experience
e. none of the above
Answer: a
Page: 423
Level of difficulty: Medium
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Part 5: Shaping the Market Offerings
Short Answer
131.
Manufacturers can offer and charge for product support services in different ways.
One firm charges for extended warranties. What are some other ways that
manufacturers charge for services?
Suggested Answer: They can offer facilitating services, value-augmenting
services, and service contracts.
Page: 425
Level of difficulty: Hard
132.
When a consumer buys a piece of equipment, such as a lawn tractor, they consider
the life-cycle cost of the equipment. Explain what is meant by “life-cycle” cost?
Suggested Answer: The life-cycle cost is the product’s purchase cost plus the
discounted cost of maintenance and repair less the discounted salvage value.
Page: 425
Level of difficulty: Hard
133.
The “brown trucks” of UPS is a strong moniker for the firm. Explain why such
physical facilities are especially important.
Suggested Answer: The intangibility of services has implications for the choice
of brand elements. Because service decisions and arrangements are made away
from the actual service location, brand recall becomes critically important. And
because a physical product does not exist, all aspects of the service delivery
process can be branded.
Page: 423
Level of difficulty: Easy
134.
Researchers have outlined 10 “lessons” for improving service quality across
services industries. What are the 10 “lessons”?
Suggested Answer: These 10 “lessons” are: listening, reliability, basic service,
service design, recovery, surprising customers, fair play, teamwork, employee
research, and servant leadership.
Page: 417
Level of difficulty: Hard
135.
The SERVQUAL scale includes the five determinants of service quality.
Companies schooled in and practitioners of this craft are among the highest
rated consumer friendly firms doing business today. What are the five
determinants that firms like Southwest, Disney, and Marriott honor so highly?
Suggested Answer: These five determinants are: reliability, responsiveness,
assurance, empathy, and tangibles.
Page: 414
Level of difficulty: Medium
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Chapter 13: Designing and Managing Services
136.
The last time you were in this restaurant, your dinner was excellent “as you
remember it” and tonight is your anniversary and as such, you are looking
forward to an enjoyable evening. At the end of the meal, your perception is that
the service was not up to “par” and the evening was not as successful as you had
hoped. In the service quality model, which “gap” prevailed?
Suggested Answer: This would be “gap” number 5—the difference between
expected service and perceived service.
Page: 413
Level of difficulty: Easy
137.
As a newly hired marketing associate, you have asked your boss if the firm has
service-quality specifications spelled out for ensuring exceptional customer
service. His answer is “no, we all know what the consumer expects; after all we
have been doing this for over 30 years.” Recalling your marketing management
services marketing chapter, you identify this attitude as a factor leading to the
creation of what “gap” in the service-quality model?
Suggested Answer: The “gap” between management’s perception of consumer
expectations and the expected service by the consumer—”gap” number 1.
Page: 413
Level of difficulty: Hard
138.
The creation of “service standards” such as a policy of answering the company’s
phone on the second ring, is an example of a firm trying to prevent which of the
service-quality “gaps” from ever beginning?
Suggested Answer: This is an example of translating the consumer perceptions
into service-quality specifications in order to prevent “gap” number 2 from
existing—the difference between management perceptions of consumer
expectations and the translations of perceptions into service-quality specifications.
Page: 413
Level of difficulty: Medium
139.
In your service firm, you and your colleagues are always choosing between fully
answering the consumer’s questions and waiting on the next customer. The firm’s
standards are not clear on how they want you to perform. When asked, your boss
answers “you make the decision.” This is an example of which service-quality
“gap”?
Suggested Answer: “Gap 3”—the difference between service-quality
specifications and service delivery.
Page: 413
Level of difficulty: Medium
140.
In the pool advertisement, it reads “a pool for $3,000 total cost.” Upon contracting
with the firm for the pool, the sale representative tells you that the total cost will
be $6,000. When you ask why the extra $3,000, the sales rep says that is for the
removal of the dirt. This is an example of which one of the service-quality
“gaps”?
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Part 5: Shaping the Market Offerings
Suggested Answer: This is an example of “gap” number 4—external
communications to consumers and service delivery.
Page: 413
Level of difficulty: Medium
141.
Interactive marketing describes the employees’ skill in serving the client. After
your recent stay in the hospital, the hospital calls and asks you a series of
questions
about your stay. Here the hospital is trying to collect data about the
two aspects of the service that clients use to judge a service.
Suggested Answer: Service is judge by its technical quality (did the service
provider actually fix the car), and its functional quality (am I confident that the
car will work correctly).
Page: 438
Level of difficulty: Medium
142.
What are the risks to a firm that continuously proclaims “superior service”?
Suggested Answer: Customers that receive poor treatment will bad-mouth the
company and injure its reputation. Delivering services that maximize both
customer satisfaction and company profitability can be challenging.
Page: 409
Level of difficulty: Easy
143.
When you call your bank to inquire about your balance, instantaneously the bank
relegates you to a “tier” based upon your profitability to the bank. The best
customers receive the best service and so on. What are the causes that shifted
customer service from a democracy to a meritocracy?
Suggested Answer: The shift from customer service democracy to a meritocracy
is a response to lower profit margins resulting from customers becoming more
price-driven and less loyal. Companies are now driven to seek ways to squeeze
more profit out of the different customer tiers.
Page: 408
Level of difficulty: Hard
144.
In developing a service blueprint, your firm has outlined each step in the delivery
process of the service it provides. The development of a service blueprint is an
attempt to minimize what element or characteristic of a service?
Suggested Answer: This is an attempt to reduce the variability of the service by
standardizing the service-performance process.
Page: 406
Level of difficulty: Medium
145.
Services cannot be stored. Attempts to regulate the “demand” of a service include
reservation systems and differential pricing. What are some other ways a firm can
“shift” demand for its services to nonpeak times?
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Chapter 13: Designing and Managing Services
Suggested Answer: Complementary services can be provided to provide
alternatives to waiting customers; nonpeak demand can be cultivated by offering
“specials” during slower periods of the day/week/month/season.
Page: 407
Level of difficulty: Easy
146.
Services cannot be stored or inventoried. Attempts to regulate the “services” on
the supply side—to increase the service providers when needed include such
strategies as part-time workers. What are some other ways a firm can “shift”
supply for its services?
Suggested Answer: Other strategies include peak-time efficiency; increased
customer participation in the service; shared services; and facilities for future
expansion rent necessary equipment for the short period.
Page: 407
Level of difficulty: Medium
147.
Services cannot be seen, tasted, or felt, before purchase. The challenge to
marketers of services is to “tangibilize the intangible” and “manage the evidence.”
What do these statements really mean for a marketer of a service firm?
Suggested Answer: Service companies can try to demonstrate their service
quality through physical evidence and presentation. Customers will draw
inference about the quality of the service to be provided by the place, people,
equipment, communication material, symbols, and price.
Page: 405
Level of difficulty: Medium
148.
You have been asked by your firm to evaluate the “service” of one of its
competitors (a restaurant). As you understand service, services differ according to
form and purpose. Explain how you classify services.
Suggested Answer: Services vary as to whether they are equipment-based or
people-based. Services can be differentiated as to the processes used and whether
or not the client/customer needs to be physically present for the service to be
performed. Services differ whether or not there are people-based or businessbased and whether or not they are profit or nonprofit objectives.
Page: 404
Level of difficulty: Medium
149.
There are five categories of service offerings depending upon whether or not the
service component is minor or major. In which of the five categories would you
place a restaurant?
Suggested Answer: A restaurant would be considered a hybrid—the offering
consists of equal parts of goods and services.
Page: 403
Level of difficulty: Easy
150.
Customers’ expectations are the true standards for judging service quality. In
service delivery, asking key questions and honestly answering them is critical to
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Part 5: Shaping the Market Offerings
delivering excellent customer service. On the employees lunch room bulletin
board is this question: Are you performing the service right the first time? Explain
this question from a service perspective.
Suggested Answer: Service providers constantly need to ask questions to ensure
that they are exceeding customer’s expectations as customer’s expectations
change over time. From a service provider’s perspective, it is cheaper to perform
the service right the first time than to have to re-do it. Other questions that
service providers can ask include: Are we regularly evaluating our service designs
to identify and correct potential flaws? Have we trained our employees to perform
the service right the first time and have we rewarded them for delivering errorfree service? Are we asking our employees to “choose” between error-free
service performance and increased efficiency/increased productivity?
Page: 409
Level of difficulty: Hard
384