Services Marketing Management multiple choice questions with answers Chapter 1 18 Services Marketing Management multiple choice questions with answers Chapter 1 18 Services Marketing Management lOMoAR[.]
lOMoARcPSD Services Marketing Management: multiple choice questions with answers Chapter 1-18 Services Marketing Management lOMoARcPSD Chapter 01 Introduction to Services Multiple Choice Questions (p 4) In the simplest terms, _ are deeds, processes and performances A Attributes B Experiences C Services D Goods E Benefits (p 4) The maintenance contract offered by Sears on its Kenmore refrigerators, dishwashers and microwaves is an example of a(n) _ A Service B Experience C Attribute D Good E Benefit (p 4) When Heather goes to the local gym, she has a personal trainer who helps make sure she is using the equipment correctly The personal trainer is an example of a(n): A Service B Experience C Attribute D Good E Benefit Many people when they go on vacation are choosing to leave their dogs in posh pet resorts that offer a variety of activities for the dogs, such as swimming pool frolics, nature walks and hayrides Dog owners are paying $17 per night for basic boarding at the pet resorts and up to an additional $20 for the other activities, which would be collectively classified as: A Goods B Values C Services D Satisficers E Attributes (p 6) _ is a key determinant of whether a product offering should be classified as a product or a service A Physicality B Audience passivity C Tangibility D Perception E Abstraction (p 4) Which of the following is an intangible component of a car repair shop? A Replacement parts B Employee uniforms C Barrel for storing recyclable motor oil D The training the mechanic has received E Customer waiting area (p 4) Which of the following is an example of a tangible component provided by a hotel? A Wake-up call B Guest rooms C Room service D Express check-out E Guaranteed reservations (p 3, 11) Which of the following is NOT an example of a service business? A Amusement park B Hotel C Bank D Department store E Soft drink bottler (p 17) Extron Electronics makes coaxial cables for connecting computers to all types of peripheral devices like printers, modems and fax machines For the benefit of its customers, Extron provides a laminated card with pictures of all the possible cable connections that a customer could need With this card, a customer can order from one to any number of lOMoARcPSD connectors with as many feet of cable as is needed Orders can be placed using a toll-free number, a fax number or an e-mail address Company reps are also available 24-hours a day in case the customer is not sure which drawing on the card matches his or her needs Orders are shipped within 48-hours of receipt If a customer is not completely satisfied with his or her order, Extron has a 100 percent satisfaction guaranteed return policy Which of the following trends that has influenced the development of services marketing concepts and strategies as illustrated by Extron's focus on customer service? A The increasing importance of service industries to the U.S and world economies B The increase of government regulation of service industries C The growth in information-based technology D Increased competition in professional services E Manufacturing firms are placing increased emphasis on providing services 10 (p 7) Which of the following trends has directly influenced the development of services marketing concepts and strategies? A The decreasing importance of service industries to the U.S and world economies B The growth in information-based technology C Decreased competition in professional services D The fact that manufacturing firms are placing increased emphasis on providing services E None of the above 11 (p 8) On his way to work today, Terry saw a billboard for a physician's group that specialized in vascular surgery In his local newspaper there was a full-page ad for a medical clinic that performed similar surgery Then in his mail, he got a brochure from yet another medical clinic asking him if he wanted to get rid of ugly varicose veins Which trend that influenced the development of services marketing concepts and strategies is illustrated here? A The increasing importance of service industries to the U.S and world economies B The increase of government regulation of professional service industries C The growth in database marketing D Increased competition in professional services E Professional firms are placing increased emphasis on providing services 12 (p 10) Which of the following statements about services is true? A A service economy produces services at the expense of other sectors B Service jobs are low paying and menial C Service production is labor intensive and low in productivity D Service is a necessary evil for manufacturing firms E The skills needed for managing services differ from those used for managing manufacturing businesses 13 (p 14) Without good mailing lists, businesses cannot engage in effective direct-marketing advertising On average 20 percent of the U.S population moves annually Return Path is a company that provides changes of addresses to businesses It takes a business's mailing list, compares it to address changes that it gathers daily in its database and makes any necessary corrections Return Path is a part of which trend in the services marketing industry? A The increasing importance of service industries to the U.S and world economies B The decrease of human interaction as a result of widespread use of technology-based services C The growth in the use of technology-based services D Increased competition in the direct-mail industry E The fact that direct marketing firms are placing increased emphasis on providing services lOMoARcPSD 14 (p 14) Garrett and Hugh were having breakfast when they decided they wanted to have pizza and watch a video that night Garrett turned on her computer, brought up the site of a local video store and ordered the movie Cold Mountain to be delivered to her doorstep at p.m Next she logged on to her favorite pizza restaurant's Web site and ordered a large pepperoni pizza and a bottle of her favorite soda to be delivered at 6:45 p.m Garrett and Hugh enjoyed their evening The next morning the video store had someone pick up their tape at Hugh's office Which trend that influenced the development of services marketing is illustrated here? A The increasing importance of service industries to the U.S and world economies B The decrease of human interaction as a result of widespread use of technology-based services C The growth in the use of technology-based services D Increased competition in the entertainment industry E The fact that manufacturing firms are placing increased emphasis on providing services 15 (p 30) Which of the following statements has been suggested as a plausible explanation for the customer perception that service quality is declining? A Technology-based services, which are superior to human-based services, are not being implemented enough B Services are leveling the playing field and consistently trying to offer the same level of service to every customer C Companies are decreasing their reliance on self-service and increasing the use of human interaction in the performance of services D Customer expectations are higher because of the excellent service they receive from some companies E Even though it is to provide consistent, high-quality service, many companies not want to it 16 (p 30) Which of the following statements has been suggested as a plausible explanation for the customer perception that service quality is declining? A Increasing use of technology is perceived by many customers as less service because there is no human interaction B Companies provide unclear tactics for customers to follow when dealing with service providers C Delivering consistent, high-quality service becomes routine D Customers have no concept of what conditions produce to quality service E Too many talented employees are left mired in front-end jobs that not challenge them 17 (p 15) Which of the following statements about how technology has positively influenced service is true? A Technology provides vehicles for delivering existing services in more accessible, convenient, productive ways B Technology facilitates basic customer service functions C Technology facilitates transactions by offering a direct vehicle for making purchases D Technology provides an way for customers to learn and research about products and companies E All of the above statements about how technology has influenced service are true 18 (p 14) Which of the following statements describes how consumers and employees are responding to technology-based services? A Services can readily calm fears that privacy may be sacrificed if technology is used B An infusion of technology can lead to an increase in human interaction C The payback for investments in technology is a certainty D Employees are often reluctant to integrate technology into their work lives E All of the above statements describe lOMoARcPSD how consumers and employees are responding to technology-based services 19 (p 20) The most basic and universally cited, difference between goods and services is: A Heterogeneity B Perishability C Intangibility D Comparability E Divisibility 20 (p 20) The characteristic of a service that means that it cannot be seen, felt, tasted or touched is: A Intangibility B Heterogeneity C Divisibility D Perishability E Compatibility 21 (p 20) On a recent visit to The Home Depot store, a sales associate greeted Gigi when she entered the store, helped her locate the items she needed to repair her gutters and suggested how she could prevent gutter problems in the future The assistance provided by the sales associate illustrates the of services A Intangibility B Comparability C Divisibility D Perishability E Compatibility 22 (p 20) In India weddings are timed to occur when Venus is in the ascendant and Jupiter is strong This day is deemed lucky In 2005, almost 15, 000 couples in New Delhi had their wedding on December 25, the day astrologers announced would be the best day for a wedding The service provided by the astrologers is an excellent illustration of the _ of services A Intangibility B Comparability C Divisibility D Perishability E Compatibility 23 (p 20) Last November, Andrew and Jana went to talk to a wedding consultant about planning their June wedding The consultant congratulated them on thinking ahead and then began to ask them questions about what kind of wedding they wanted She gave them a book that contained all the information they needed to plan a memorable wedding They met with the consultant regularly to talk about how the plans were coming and made more decisions with her help The consultant helped them with everything from invitations to wedding reception favors She even went with Jana to select her wedding gown and her bridesmaids' gowns The sort of assistance provided by the wedding consultant illustrates the _ of services A Intangibility B Comparability C Divisibility D Perishability E Compatibility 24 (p 21) Which of the following statements describes a marketing implication that results from the intangibility of services? A Customers participate in and affect the transaction B Service quality depends on many uncontrollable factors C Services can be readily communicated D There is no sure knowledge that the service delivered matches what was planned and promoted E Services cannot be inventoried 25 (p 21) The characteristic of a service that refers to differences in employees' performances is: A Intangibility B Heterogeneity C Divisibility D Perishability E Simultaneous production and consumption lOMoARcPSD 26 (p 21) The first time Terry brought his car to Auto Lube to have the oil changed he was very satisfied with the service The service manager consulted him several times while his car was being serviced, asked him if there were any problems with the car, recommended when additional services should be performed and answered questions directly and politely However, when Terry went back to Auto Lube after three months to have his oil changed again, he was not satisfied with the service The manager spoke to him only when he arrived and when he paid his bill In addition, the manager was impatient and unfriendly during the interaction Terry's experience at Auto Lube illustrates the _ of services A Intangibility B Heterogeneity C Simultaneous production and consumption D Perishability E Divisibility 27 (p 21) The first time Alexis went to take golf lessons, she had a golf pro who was very patient with her and who was able to pinpoint what she was doing wrong without making her feel uncoordinated Her second golf lesson was not nearly as helpful The golf pro who gave the lesson wanted Alexis to watch what he was doing and imitate his swing He was unable to verbalize his instructions Alexis's experience with the two golf instructors illustrates the _ of service A Intangibility B Heterogeneity C Simultaneous production and consumption D Perishability E Divisibility 28 (p 21) Two roommates both registered for an introduction to business class At midterm, one roommate found his instructor so boring that he was thinking of changing his major to history The other roommate had a charismatic teacher and looked forward to going to class This heterogeneity of instruction demonstrates: A How difficult it is to synchronize supply and demand with service B That customer service depends on employee actions C How customers affect each other D The fact services cannot be readily communicated or displayed E Why services cannot be inventoried 29 (p 21) Weddings have always been lavish in India Vandana Mohan is New Delhi's most successful wedding planner The average New Delhi middle-class wedding in 2005 cost $20,000 with one recent wedding costing more than $10 million Because budgets vary as the desires to show off one's ability to engage in conspicuous consumption, Vandana Mohan sometimes finds it difficult to maintain his reputation for lavish and beautiful weddings The problems associated with the planning of weddings illustrate the _ characteristic of services A Versatility B Heterogeneity C Simultaneous production and consumption D Perishability E Intangibility 30 (p 21) Parents everywhere are very busy and often cannot spend time with their children In the Netherlands, children who want a bedtime story can call the telephone service and request to listen to one of twenty prerecorded fairy tales The phone company charges $7 per story Because of the prerecording of the stories, this bedtime service reduces the problems typically associated with the _ characteristic of services A Versatility B Heterogeneity C Simultaneous production and consumption D Perishability E Intangibility lOMoARcPSD 31 (p 22) Which of the following is a marketing implication that results from the heterogeneity of services? A Services cannot be returned or resold B Services cannot be patented C Services cannot be inventoried D Mass production of services is difficult E All of the above are marketing implications resulting from the heterogeneity of services 32 (p 22) Because of the _ of services, service producers find themselves playing a role as part of the product itself and an essential ingredient in the service experience for the consumer A Comparability B Intangibility C Heterogeneity D Simultaneous production and consumption E Perishability 33 (p 22) Due to the _ characteristic of services, customers can affect the transaction and how others perceive the transaction A Comparability B Intangibility C Heterogeneity D Simultaneous production and consumption E Perishability 34 (p 22) The Offshore Sailing School in Jersey City, New Jersey offers a basic sailing course, which takes place in three days over two weekends, for $495 Students enrolled in the course attend classroom sessions that cover the theory and technology of sailing and receive hands-on sailing instructions in the water that introduces them to all fundamental sailing skills Student participation in the Offshore Sailing School's classroom sessions and hands-on sailing instructions illustrates the _ characteristic of services A Versatility B Heterogeneity C Simultaneous production and consumption D Perishability E Intangibility 35 (p 22) For their wedding anniversary, Beth and Rick wanted to go skydiving They enrolled in a skydiving class at the local airport at a cost of $260 After a 30-minute training course in which everything that was going to happen to them was carefully explained, Beth and Rick were sent up in an airplane with two skydiving experts Each was placed in a harness arrangement with one of the experts and did what is called a tandem dive With a tandem dive, Beth and Rick get to enjoy the experience without having to worry about when to open the parachute The skydiving expert does that for them This tandem jump illustrates the _ characteristic of services A Versatility B Heterogeneity C Simultaneous production and consumption D Perishability E Intangibility 36 (p 22) Which of the following statements describes a marketing implication that results from the simultaneous production and consumption of services? A Services cannot be returned or resold B Service quality depends on many uncontrollable factors C Employees affect the service outcome D Services cannot be readily displayed or communicated E There is no sure knowledge that the service delivered matches what was planned and promoted 37 (p 22) _ refers to the fact that services cannot be saved, stored, resold or lOMoARcPSD returned A Intangibility B Heterogeneity C Simultaneous production and consumption D Perishability E Incompatibility 38 (p 22) In India weddings are timed to occur when the stars and planets are in certain positions, which are deemed lucky In 2005, almost 15,000 couples in New Delhi had their wedding on December 25, the day astrologers announced would be the best day for a wedding Wedding planners had to prepare all year for this one date instead of planning lots of weddings throughout the year The service provided by the Indian wedding planners illustrates the _ characteristic of services A Versatility B Heterogeneity C Simultaneous production and consumption D Perishability E Intangibility 39 (p 22) An attorney who charges a client for a missed appointment is taking into account the _ characteristic of services A Heterogeneity B Simultaneous production and consumption C Incomparability D Perishability E Intangibility 40 (p 22) Bob Wilson owns and operates Flashdance Skating Rink Last Monday afternoon, he had rented the rink out for a birthday party that was cancelled at the last minute due to a flu epidemic that had sickened three-fourths of the children who were invited While Wilson kept the deposit, he did not get the skate rental fees or the snack food money he had anticipated from the rental Wilson lost money as a result of the _ characteristic of services A Heterogeneity B Simultaneous production and consumption C Incomparability D Perishability E Intangibility 41 (p 20) Which of the following is a marketing implication that results from the perishability of services? A Service quality depends on many uncontrollable factors B Employees affect the service outcome C Synchronizing supply and demand is difficult D Customers participate and affect the service outcome E Service delivery and customer satisfaction depend on employee actions 42 (p 23) Which of the following is NOT an element of the traditional marketing mix? A Production B Place C Product D Price E Promotion 43 (p 24) In addition to the elements of the traditional marketing mix, the expanded mix for services includes: A Positioning, personalization and process B People, physical evidence and process C Personalization, procurement and people D Profit, production and psychology E People, partnerships and positioning 44 (p 24) Which of the following is an example of the people element of an airline company's services marketing mix? A Pilots B Baggage handlers C Customers D Flight attendants E All of the above lOMoARcPSD 45 (p 24) Andreason Removal Company removes asbestos from old houses and buildings Which of the following is an example of the people element of services marketing mix? A Federal inspectors who check behind Andreason's employees to make sure the job is done properly B People in the community where it disposes of the asbestos C Physicians who have studied the dangers of breathing asbestos D People who hire the company to remove the asbestos from their property E Suppliers who provide the uniforms and masks to protect Andreason's employees from the asbestos 46 (p 24) When Alicia and Jordan dined at Formia Ristorante, a contemporary Italian restaurant in New Jersey, they both enjoyed Formia's coy, smart and embracing atmosphere Formia creates this atmosphere with a single large dining room that measures 20 by 60 feet and contains 14 roomy tables Ceiling fans slowly swirl as candlelight dances across the tables that are attentively cared for by servers Vertical pink and white florid patterns emerge from old wainscoting Finally, Formia's two-page menu offers guests a range of pasta, chicken, veal and seafood entrees, in addition to nightly specials that are handwritten and presented on large index cards Alicia and Jordan experienced the _ element of Formia Ristorante's services marketing mix A Product B Production C Process D Place E Physical evidence 47 (p 24) Ruth recently visited a day care center that is convenient to her work Ruth is thinking of letting the day care workers care for her infant son while she is at work The first thing Ruth noticed when she walked in the door of the facility was the smell of urine There was a dead plant in the window Three babies were crying and no one was paying them any attention Other children that Ruth could see looked listless In this example, Ruth experienced the negative side of the _ element of the day care center's services marketing mix A Product B Production C Process D Place E Physical evidence 48 (p 24) Historically, the Japanese have had poor dental care As part of their beauty regimen, the Japanese have a habit of lightening and whitening their skin Teethart has developed "tooth manicure" salons, which allow Japanese to match their teeth coloration to their skin Each treatment takes place in a small booth, which contains an ergonomically-designed chair, muted lights and New Age-style music The walls are painted calming shade of blues and greens Teethart uses the _ element of its service to reduce stress associated with dental procedures A Product B Production C Process D Place E Physical evidence 49 (p 24) Historically, the Japanese have had poor dental care As part of their beauty regimen, the Japanese have a habit of lightening and whitening their skin Teethart has developed "tooth manicure" salons, which allow Japanese to match their teeth coloration to their skin A personalized whitening mouthpiece is developed for each patient The mouthpiece is placed around the teeth and a cleaning solution is added The patient listens to soothing music and sits in a comfortable chair while his or her teeth are whitened Monthly treatments in this spa-like environment reflect the _ element of Teethart's service mix A Product B Production C Process D Place E Promotion lOMoARcPSD 50 (p 24) Yesterday, Mike went to the dentist for his 6-month check-up Two weeks before he went to the dentist, he called the office to make an appointment The day before his check-up, the office's receptionist called him to confirm his appointment When Mike arrived at the office, he checked in with the receptionist and then waited in the waiting room for 15 minutes, reading a magazine, before being greeted by the dental hygienist, who escorted him to an examination room The dentist entered the room, greeted Mike, examined Mike's teeth, took a set of x-rays and asked the dental hygienist to clean Mike's teeth When his teeth were cleaned, the hygienist told Mike he should return in months for another check-up Mike experienced the _ element of the dental office's services marketing mix A Product B Personalization C Process D Place E Physical evidence Chapter 02 Conceptual Framework of the Book: The Gaps Model of Service Quality Multiple Choice Questions (p 33) The central focus of the gaps model of service quality is the: A Constant need to provide value for dollars spent B Four dimensions of service C Difference between customer expectations and perceptions D Temptation to handle services as if they were tangibles E Customer-employee-supplier triumvirate (p 33) The sources of customer expectations are market-controlled factors such as: A The individual's innate needs B The individual's previous experiences C Word-of-mouth communication D Sales promises E What the competition is offering (p 33) To close the customer gap, the gaps model of service quality suggests the _ gaps need to be closed A Services marketing B Service dimensions C Ps D Provider E Value (p 32) The _ gap is the difference between customer perceptions and expectations A Customer B Service C Value D Quality E Delivery (p 32) Customer _ are the standards for performance against which service experiences are compared A Perceptions B Expectations C Attitudes D Judgments E Wants (p 33) Which of the following is NOT a source of customer expectations? A Word-of-mouth communications B Advertising C Pricing D Sales personnel E Target market (p 34) Provider _ is the difference between customer expectations of service and company understanding of those expectations A Gap 1 B Gap 2 C Gap 3 D Gap lOMoARcPSD 36 (p 500-502) Which of the following is NOT a strategy a service provider would use if its goal were to manage customer expectations? A Create tiered-value service offerings B Negotiate unrealistic expectations C Communicate criteria for service effectiveness D Teach customers to avoid peak demand periods and see slow periods E Offer choices 37 (p 500-502) Eddie Bauer, a catalog retailer, offers customers three different delivery options: to days via standard delivery; to days via express delivery; or days via express plus delivery The delivery rates are higher for faster service For example, on orders over $75 standard delivery is $9.95, express delivery is $15.95 and express plus delivery is S18.95 By offering different delivery options, Eddie Bauer is: A Making multilevel service promises B Managing service promises C Managing customer expectations D Managing horizontal communications E Exceeding customer expectations 38 (p 502) Cable TV companies that offer subscribers different programming packages are: A Managing service promises B Creating tiered-value service offerings C Communicating with customers D Managing horizontal communications E Exceeding customer expectations 39 (p 502) Internet service providers that offer subscribers their choice of hook-up speed and type of spam blockers are: A Managing service promises B Creating tiered-value service offerings C Communicating with customers D Managing horizontal communications E Exceeding customer expectations 40 (p 500-502) Creating tiered value service offerings is a strategy for: A Managing service promises B Managing customer expectations C Communicating with customers D Managing horizontal communications E Exceeding customer expectations 41 (p 500-502) Because he has a busy practice, new patients for dentist Dr Kirby Brown are told that, unless there is an emergency, the first available appointment will be in three months If they accept the appointment, they will be reminded of their appointment by a courtesy call This first visit will take about an hour On this visit, their teeth will be cleaned and x-rayed, their gums will be examined and the dentist will talk to them about future dental treatment needs Dr Brown is: A Managing service promises B Managing customer expectations C Communicating with customers D Managing horizontal communications E Exceeding customer expectations 42 (p 503-504) Which of the following is a strategy used for improving customer education? A Teach customers to avoid peak demand periods and see slow periods B Clarify expectations after the sale C Prepare customers for the service process D Conform performance to standards E Create tiered-value offerings 43 (p 503-504) Preparing customers for the service process is a strategy for: A Managing service promises B Resetting customer expectations C Improving customer lOMoARcPSD education D Managing horizontal communications E Exceeding customer expectations 44 (p 499-504) Emory Vision Center has a packet of information that it sends to people who are interested in LASIK surgery as well as a doctor who will come speak to your organization about how vision can be corrected In addition, it publishes a newsletter called The Visionary in which it offers family discounts, clarifies patient expectations and notes awards and honors the center receives The center also manages a web site that contains news on the latest innovative research techniques Through its integrated communications with potential patients and patients, Emory Vision Center is: A Managing service promises and managing internal marketing communications B Resetting customer expectations and educating customers C Improving customer education and managing service promises D Managing both vertical and horizontal marketing communications E Exceeding customer expectations and educating customers 45 (p 503-504) Service providers sometimes need to tell customers that services have been performed for them To get credit for their actions, service providers need to reinforce their actions with appropriate communication about their accomplishment of the service Which of the following services would need to educate its customers by telling them about the services provided in user friendly terms? A Pet grooming B A fluoride treatment given to a child C A full-body massage D Car insurance E Gas station 46 (p 503-504) Service providers sometimes need to tell customers that services have been performed for them To get credit for their actions, service providers need to reinforce their actions with appropriate communication about their accomplishment of the service Services for which customers must be told that the service has been performed have which of the following characteristics? A The service is invisible B No part of the service offering is outsourced C The customer can easily evaluate the effectiveness of the service D The user of the service and the decision maker for the service are the same individual E The service is visible 47 (p 504) Clarifying expectations after the sale is a strategy for: A Managing service promises B Resetting customer expectations C Improving customer education D Managing horizontal communications E Exceeding customer expectations 48 (p 504) When Sarah opened her savings and checking accounts at First National Bank of Chicago, she was given a brochure entitled "How to Lose Wait" that gave her advice on how to avoid delays at the bank and listed her branch's busiest and slowest times By giving Sarah the "How to Lose Wait" brochure, First National Bank of Chicago is: A Managing service promises B Resetting customer expectations C Improving customer education D Managing horizontal communications E Exceeding customer expectations 49 (p 505) The Atlanta Kroger Marketing Area (KMA) publishes a monthly newsletter, Hot Off the Press, to provide information to its employees about food safety and preparation, changes in lOMoARcPSD store policy and exceptional service encounters and the employees who were involved in these encounters This newsletter is an example of: A Vertical communications B Vertical integration C Horizontal integration D Informal communication E Interactive marketing 50 (p 507-508) By creating cross-functional teams, a service firm is: A Managing service promises B Resetting customer expectations C Communicating with customers D Managing internal marketing communications E Exceeding customer expectations Chapter 17 Pricing of Services Multiple Choice Questions (p 512) One of the reasons used to explain why customers evaluate goods and services differently is: A The degree of customer empowerment used to sell services B How services and goods influence opportunity costs C That customers often have limited reference prices for services D The increased customer autonomy in the pricing of goods E The cost of maintaining inventory (p 513-515) Which of the following statements does NOT contain a reason why consumers lack accurate reference prices for services? A Individual customer needs vary within the same service provider B Collection of price information is overwhelming in services C Many service providers are unable or unwilling to estimate price in advance D Low degree of variability exists across providers of the same service E Prices are not visible (p 516-518) All of the following examples are nonmonetary costs EXCEPT: A Time costs B Search costs C Convenience costs D Psychological costs E Utility costs (p 516) _ costs represent other sources of sacrifice perceived by consumers when buying and using a service A Penalty B Forfeit C Opportunity D Nonmonetary E Psychological (p 516) Many white-collar workers have heard the story about the busy executive who billed the doctor for keeping him waiting when the patient showed up promptly at his appointment time or has dreamed of doing it themselves This is an example of the _ costs of services A Convenience B Monetary C Psychological D Time E Search (p 516) The process for installing Leo's new CD player took almost four hours, which Leo spent sitting in the Circuit City store waiting room Leo paid _ costs for the installation of his new CD player A Convenience B Fiscal C Physiological D Time E Search (p 517) _ cost refers to the effort invested in identifying and selecting a service from your consideration set A Convenience B Monetary C Psychological D Time E Search lOMoARcPSD (p 517) After moving to Orlando, Florida, Kaori opened both a savings and a checking account at Barnett Bank Although Barnett had a higher minimum balance requirement for free checking than the other two banks she considered, Kaori chose Barnett because it was located closer to her home than the other banks Kaori would rather expend other costs than _ costs A Convenience B Monetary C Psychological D Time E Search (p 517) Initial consumer resistance to online bill paying resulted from a _ cost in using a new service A Convenience B Monetary C Psychological D Time E Search 10 (p 519) Which of the following statements describes a problem in cost-based pricing for services? A Monetary price must be adjusted to reflect the value of non-monetary costs B Heterogeneity of services limits comparability C Prices may not reflect customer value D Labor is more difficult to price than materials E Information on service costs is not available to customers 11 (p 519) The basic formula for _ is Price = Direct costs + Overhead + Profit margin A Contribution margin B Return on investment C Cost-based pricing D ABC costing E Net profit 12 (p 519-520) To calculate what it charges a client, a detective agency charges $200 a day direct costs plus an additional $50 per day to pay for office expenses, licenses and other fixed costs and fifteen percent of full costs for the profit margin What type of pricing strategy is being used by the detective agency? A Contingency B Cost-based C Perceived value D Fee for service E Going-rate 13 (p 520) In _ pricing, a service firm determines price by calculating component costs of the service and adding a mark-up A Contingency B Fee for service C Perceived value D Cost-plus E Going-rate 14 (p 520-521) In which of the following service industries are you most likely to find the service provider using fee for service pricing? A Apartment rental business B Management consulting business C Cleaning service industry D Airline industry E Internet service providers 15 (p 520-521) Accountants, architects, interior decorators, marriage counselors and lawyers typically use a _ pricing strategy A Going-rate B Perceived value C Fee for service D Price signaling E Cost-plus 16 (p 521-522) _-based pricing is used when there are a small number of large service providers A Demand B Profit C Competition D Supply E Cost lOMoARcPSD 17 (p 521-522) In which of the following service industries would you most likely find the service provider using competition-based pricing? A Banking industry B Hospital industry C Legal services D Tax accounting business E Retail book industry 18 (p 521) _-based occurs when services are standardized across providers A Demand B Profit C Competition D Supply E Cost 19 (p 521) Pizza Hut, Uncle Sam's, Domino's and Papa John's all deliver pizza in Cartersville, Georgia, a town of about 30,000 As a result, one would expect all of the pizza delivery services to use _-based pricing A Standardized B Simultaneous C Competition D Supply E Cost 20 (p 523) Which of the following is an example of competition-based pricing strategy? A Cost-plus pricing B Going-rate pricing C Fee for service D Synchronized pricing E Simultaneous pricing 21 (p 523) _ occurs in markets with a high concentration of sellers Any price offered by one company will be matched by its competitors in order to avoid giving the low-price seller a distinct advantage A Cost-plus pricing B Price signaling C Value pricing D Price lining E Price standardization 22 (p 523) A day after Continental Airlines announced its new low fares for the autumn on travel from New York (i.e., Newark and LaGuardia Airports) to selected cities in the U.S., Canada, the Caribbean and Latin America, USAir and American Airlines matched Continental's fares USAir and American Airlines are using a _ strategy A Value pricing B Price signaling C Demand-based pricing D Going-rate pricing E Price trimming 23 (p 523) _ is a form of competition-based pricing that involves charging the most prevalent price on the market for a service A Value pricing B Price signaling C Fee for service pricing D Going-rate pricing E Price trimming 24 (p 524) Which of the following approaches to pricing considers that customers may judge quality on the basis of pace? A Demand-based pricing B Profit-based pricing C Competitionbased pricing D Supply-based pricing E Cost-based pricing 25 (p 524) Which of the following statements describes a problem with demand-based pricing for services? A Prices may not reflect customer value B Costs are difficult to trace C Heterogeneity of services limits comparability D Monetary price must be adjusted to reflect the value of non-monetary costs E Labor is more difficult to price than materials 26 (p 524) Which of the following statements does NOT describe how consumers typically define value? A Value is all that I get for all that I give B Value is everything I want in a lOMoARcPSD service C Value is low price D Value is reliable service E Value is the quality I get for the price I pay 27 (p 525) Derrick saves coupons from 10-minute oil and lubrication services (e.g., Jiffy Lube, Quick Lube and Speedi-Lube) and when he needs to have his car's oil changed, he chooses the oil and lubrication service that offers the best deal on a 10-minute oil change For 10-minute oil and lubrication services, Derrick defines value as: A All that I get for all that I give B Everything I want in a service C Low price D Reliable service E The quality I get for the pace I pay 28 (p 525) When comparing the value of health clubs, Shaundra believes value comes from having a "women's only" nautilus room and "women's only" aerobic classes Shaundra defines value as: A All that I get for all that I give B Whatever I want in a service C Low price D Reliable service E The quality I get for the price I pay 29 (p 525) Salespeople are often on the road three nights every week They cannot afford to stay in the most luxurious of hotels, but they appreciate amenities like a good mattress, a firm pillow and a comfortable work area They want the price they pay to be commensurate with the amenities provided by the hotels They tend to define value as: A All that I get for all that I give B Whatever I want in a service C Low price D Reliable service E The quality I get for the price I pay 30 (p 525) In talking to a travel agent, T J Matthews learned that he could get a three-day/two night package near Disneyworld for his family of four or for the same amount of money, he could have a five-day/four-night stay at a hotel that was about fifty miles away from Disneyworld Matthews decided the farther hotel was a much better value Matthews defined value as: A All that I get for all that I give B Whatever I want in a service C Low price D Reliable service E The quality I get for the price I pay 31 (p 529-532) Which of the following is NOT an effective pricing strategy to use when customers define value as "low price"? A Odd pricing B Synchronized pricing C Value pricing D Penetration pricing E Discounting 32 (p 529) American Woman Fitness Centers offer first-time customers a 3-month membership for $59, a saving of $20 off the regular 3-month membership price American Woman Fitness Centers' pricing strategy is aligned with which of the following customer definitions of value? A Value is all that I get for all that I give B Value is everything I want in a service C Value is low price D Value is reliable service E Value is the quality I get for the pace I pay 33 (p 529) Bell Atlantic NYNEX Mobile introduced its Talk Along portable phone service at a price of $14.99 a month Bell Atlantic is using a(n) _ pricing strategy A Odd B SynchroC Discounting D Prestige E Complementary lOMoARcPSD 34 (p 529) Because most people like to get tattoos and body piercings on the weekends, a tattoo parlor in Portland, Maine, offers a reduced rate Monday to Thursday for all of its services Prices on Friday and Saturday are 45 percent higher than they are during the rest of the week The tattoo parlor is using a(n) _ pricing strategy A Odd B SynchroC Discounting D Prestige E Complementary 35 (p 530-531) Which of the following is NOT a type of differential used by service providers to synchronize demand and supply? A Time B Quantity C Place D Utility E Incentive 36 (p 530-531) American Airlines BreakAway fares offer travelers substantial savings on nonstop flights from Newark, New Jersey to Los Angeles from mid-August to mid-October The round-trip airfare is $299 for customers who depart on Friday and return the following Monday or Tuesday American Airlines is using a(n) _ differential A Place B Time C Quality D Incentive E Quantity 37 (p 531) If a family has one child enrolled in Kid's Corral day care center, it costs $75 per week If a family has two children enrolled in Kid's Corral, it costs $135 Step-by-Step is using a(n) _ differential A Place B Time C Quality D Incentive E Quantity 38 (p 532) In which of the following situations would a penetration pricing strategy be inappropriate? A Sales volume of the service is very sensitive to price B Economies in unit costs can be achieved by operating at large volumes C A service faces threats of strong potential competition very soon after introduction D There is no class of buyers willing to pay a higher price to obtain the service E The service is a major improvement over past services 39 (p 532-533) A prestige pricing strategy is appropriate when customers define value as: A All that I get for all that I give B Everything I want in a service C Low price D Reliable service E The quality I get for the price I pay 40 (p 533) In a _ pricing strategy, new services are introduced at high prices with large promotional expenditures A Penetration B Skimming C Prestige D Contingency E Visible 41 (p 533-534) What two pricing strategies are most commonly used when the customer defines value as quality for the price paid? A Market segmentation pricing and value pricing B Psychological pricing and value pricing C Penetration pricing and value pricing D Discounting and value pricing E Market segmentation pricing and price skimming 42 (p 534) The New York Yankees, a major league baseball team, offer half-price tickets for high school and college students every Wednesday home game at Yankee Stadium The New York Yankees are using a(n) _ pricing strategy A EDLP B Value C Penetration D Market lOMoARcPSD segmentation E Cost-based 43 (p 532-536) Which of the following is NOT an example of an effective pricing strategy to use when the target market defines value as all that is received is all that is given? A Price framing B Price skimming C Complementary pricing D Results-based pricing E Price bundling 44 (p 536) Price framing would be used when the customer defines value as: A All that is received for all that is given B Superior quality C Quality for the price paid D Everything wanted in a service E Low price 45 (p 535) Deana and Rod Li went on a one-week vacation at the Club Med Turkoise village, located in Turks and Caicos, a chain of islands in the Caribbean Club Med's per person price of $1199 included round-trip air travel from New York, one-week accommodations, all meals, sports, activities and nightly entertainment Club Med is using a _ strategy A Market segmentation pacing B Price framing C Complementary pricing D Price bundling E Contingency pricing 46 (p 535) The price for an all-day trip to the Alpine Spa is $175 and includes an hour-long massage, a facial, a manicure and pedicure and a hair styling and make-up application Any of these services can be purchased individually for the total cost of almost $300 What kind of pricing strategy is Alpine Spa using? A Synchro-pricing B Complementary pricing C Mixed bundling D Contribution margin pricing E Contingency pricing 47 (p 535-536) The three types of complementary pricing are: A Substitute pricing, price bundling and leader pricing B Leader pricing, value pricing and price lining C Leader pricing, penetration pricing and captive pricing D Two-part pricing, results-based pricing and bundling E Two-part pricing, captive pricing and loss leadership pricing 48 (p 536) If you visit a county or state fair, you will pay a basic admission fee plus other fees if you want to enjoy any of the amusement rides County and state fairs that price this way is using: A Synchro-pricing B Two-part pricing C Mixed bundling D Contribution margin pricing E Contingency pricing 49 (p 536) Kendra teaches swimming lessons at the YWCA pool She will charge $75 per child for four weeks worth of lessons Payment is not due until the child can swim the length of the pool If the child cannot accomplish this task, he or she will be automatically enrolled in the next swimming lesson session until the child can swim the length of the pool At that time, the parents will be expected to pay the $75 The YWCA is using a(n) _ pricing strategy A Price framing B Complementary pricing C Price bundling D Results-based E Value-based 50 (p 536) The ad for legal services that Marla saw indicated the lawyers would receive no money unless their client did To Marla, this statement indicated the legal firm offering this lOMoARcPSD service was using: A Synchro-pricing B Two-part pricing C Mixed bundling D Contribution margin pricing E Contingency pricing Chapter 18 The Financial and Economic Impact of Service Multiple Choice Questions (p 542) The ROSQ approach would be appropriate for a service provider: A That used service blueprints B That terminated relationships with its least profitable customers C Deciding to purchase employee dental insurance D That was thinking of developing a home delivery service in addition to offering products at a central location E Deciding to increase prices for basic services by ten percent (p 543) The best known and most widely respected approach that executives use for making decisions about service quality investments is: A Total quality management returns B Observational research C Focus groups D Return on service quality E Ethnographic research (p 543) To use the return on service quality (ROSQ) methodology for making decisions about service quality investments, a CEO must NOT assume: A Quality is an investment B Quality efforts are financially accountable C It is possible to spend too much on quality D Not all quality expenditures are equally valid E All quality investments are a good investment (p 543) Return on service quality (ROSQ): A Is based on the assumption that it is impossible to spend too much money on quality B Replaces intuition as a guide for service quality investments C Is an intuitive approach to determining whether a company should implement specific service quality strategies D Is based on the assumption that all quality expenditures are valid E Is accurately described by all of the above (p 543) When service quality first emerged as a pivotal competitive strategy what method did managers use to determine the effect of improved service quality on financial success? A Intuition B Return on service quality (ROSQ) C Trend analysis D Experiential research E Focus groups (p 542) Executives most frequent questions about how to improve service quality are concerned with: A Cost reduction and environmental impact B Good investment and high return C Following federal regulations and employee satisfaction D Operating in the most economic environments and maintaining a satisfactory level of customer retention E Cost reduction and downsizing (p 545) In 1991 when the US General Accounting Office (GAO) studied the financial effect of service quality on companies that had won the Malcolm Baldrige National Quality Award, it determined improved service did NOT: A Increased the market share of these lOMoARcPSD firms B Improved the return on sales for these firms C Improved the sales per employees for these firms D Increased these firms' returns on assets E Increased advertising (p 545) Service quality can help companies attract more and better customers to the business through _ marketing A Insurgent B Offensive C Flankmovement D Defensive E Guerilla (p 546, 548) Offensive marketing effects involve market, reputation and: A Word-of-mouth communication B Vertical integration C Price premiums D High purchase volumes E Geodemographic segmentation 10 (p 546-548) The benefits of offensive marketing have been documented through the use of: A PIMS (profit impact of marketing strategy) B Multiple regression analysis C Return on investment (ROI) analysis D Financial ratios E All of the above 11 (p 545-548) There are several auto repair shops in a three-block area on King Street One of the shop owners decided to extend her shop's operating hours until 10 p.m Monday-Thursday and provide a pick-up and delivery service with bonded drivers as well as guarantee all repairs for six months This job owner is engaged in _ marketing A Defensive B Churn C Guerilla D Flank-movement E Offensive 12 (p 546) PIMS (profit impact of marketing strategy) research: A Is used for determining the short-term effect of service quality on company profits B Shows that companies offering superior service achieve the same market share growth as those who offer average service C Demonstrates the advantages of offensive marketing D Relies on executives' opinions to predict how services will affect profit E Is accurately described by all of the above 13 (p 546-548) Which of the following is NOT likely to occur when a company uses an offensive marketing effect? A Higher market share B Increased price premium C Customer churn D Customer acquisition E Improved word-of-mouth communication 14 (p 546-548) Which of the following statements about service quality and market share is NOT true? A When service is good, a company can charge more for its services than its competitors can and still maintain or even increase its market share B The implementation of superior service yields higher-than-normal market share growth C The relationship between service quality and market share is hard to discern because it happens over time D Advertising that an organization offers service excellence without sufficient service quality to back it up will NOT increase market share E Advertising that an organization offers service excellence without sufficient service quality to back it up will increase market share 15 (p 548) _ marketing is used by companies to prevent customer defection A Vertical lOMoARcPSD integration B Guerilla C Defensive D Flank-movement E Offensive 16 (p 548) The owner of Fiori Flower and Gift Shop has noticed a gradual decline in its number of customers over the last three years The owner suspects that it is experiencing _ due to the recent opening of a Kroger supermarket in the community A Customer churn B Customer empowerment C An ethical dilemma D Customer autonomizing E Customerization 17 (p 548) The owner of Fiori Flower and Gift Shop has noticed a gradual decline in its number of customers over the last three years The owner suspects that many of its regular customers are now buying flowers at the newly opened Kroger supermarket It would be appropriate for the owner to institute _ marketing A Guerrilla B Flanking-movement C Vertical integration D Defensive E Offensive 18 (p 548) Which of the following is NOT likely to be a source of money when a company uses a defensive marketing effect? A Increased market share B Customer retention C Lower costs D Increased word-of-mouth communication E Increased price premium 19 (p 548-552) The increased profits a service firm realizes from customer retention result from all of the following EXCEPT: A Lower costs B Increased volume of purchases C The ability to charge a price premium D Customer churn E Increased word-of-mouth communication 20 (p 548) Which of the following has the strongest effect on a service provider's profits? A Market share B Unit costs C Location D Employee salaries E Customer defection 21 (p 549) Which type of promotion has more credibility than other sources of information about a service? A Word-of-mouth B Personalized direct mail C Network television advertising D Publicity E Advertising in prestige magazines 22 (p 549) A Marriott hotel is able to charge four times as much as an Econo-Lodge for a room because of the amenities the Marriott offers These amenities include a swimming pool, room service, exercise equipment, in-room iron, hair dryer and coffee maker and more The EconoLodge provides guests with a clean room to sleep in and little else Marriott's ability to charge a premium price is the result of its _ strategy A Defensive B Price skimming C Neutral D Guerrilla E Flanking 23 (p 549-552) If given a choice, a service company that has adopted a customer retention strategy would prefer to use which of the following promotional tools? A Word-ofmouth B Personalized direct mail C Network television advertising D Publicity E Advertising in prestige magazines 24 (p 553-554) Which of the following statements about customer perceptions of service and lOMoARcPSD consumer purchase intentions are true? A There is no relationship between customer perceptions of service and any consumer intentions B While there is no relationship between customer perceptions of service and purchase intentions, there is a strong relationship between perceptions of superior service and increased word-of-mouth communications C Researchers suspect there is a strong relationship between a customer perception of service and his or her intent to buy D Customer perceptions of service affect consumer intentions in several positive ways-including the purchase intention E Customer experiences-not perceptions-affect consumer behavioral intentions 25 (p 552) Which of the following is NOT a question managers want researchers to answer about defensive marketing? A What is a loyal customer? B How can defect-prone customers be identified? C What is the role of service in defensive marketing? D What aspects of service are most important for customer retention? E What aspects of service are most important for increasing market share? 26 (p 553) Which of the following statements about providing customers with service quality is true? A All customers must be provided the same superior quality of service B All customers are worth attracting and keeping through the use of service quality C The same services marketing strategy should be used with all customers D All customers will be profitable in the long run; therefore, each is deserving of quality service E Links exist among customer satisfaction, service quality and increased purchases 27 (p 555) The key drivers of service quality, customer retention and profits are: A The servicescape B The five dimensions of service C External marketing communications D Service encounters E All of the above 28 (p 554) The research exploring the relative importance of service dimensions on overall service quality or customer satisfaction has confirmed _ as the most critical dimension A Assurance B Tangibles C Empathy D Responsiveness E Reliability 29 (p 558) Traditional measures of company performance: A Have relied on financial indicators such as profit, sales and return on investment B Predict the future performance of companies as well as the results of yesterday's decisions C Measure operational process and customer satisfaction as well as other quantitative factors D Are useful in measuring the effect of a short-term increase of service quality on a company's bottom line E Have used the soft measures primarily 30 (p 556) _ is the total of the discounted lifetime value summed over all the firm's customers A The customer equilibrium B Customer equity C Customer empowerment D Fiscal value E Service blueprint value 31 (p 556) The customer equity model illustrates how: A Customer equity is influenced by value equity, brand equity and relationship equity B Interactive marketing, external marketing lOMoARcPSD and internal marketing are interrelated C To identify unexpected service encounters D Customer equity leads to more efficient defensive marketing E Organizations can more effectively monitor customer churn 32 (p 559-561) The _ is a set of measures that gives top managers a fast, but comprehensive view of the business It complements financial measures with operational measures of customer satisfaction, internal processes and the organization's innovation and improvement activities A Lifetime value of a customer B Multi-measure quality indicator C Balanced performance scorecard D FOCI satisfaction ratio E Benchmark of augmented success 33 (p 559) All of the following are measurement areas contained in a balanced performance scorecard EXCEPT: A Competitor measures B Customer perceptual measures C Financial measures D Innovation and learning E Operational measures 34 (p 558) Which of the following is an example of a soft measure of a company's success? A Return on investment B Customer satisfaction C Sales volume D Gross margin E Inventory turnover 35 (p 558) The development of _ allows service companies to create, automate and integrate measurements in all parts of the company in a balanced performance scorecard A Relationship marketing B Search engines C Data mining D Integrative marketing E Enterprise software 36 (p 559) All of the following are customer perceptual measures within the balanced performance scorecard EXCEPT: A Number of defections B Number of cross sales C Service perceptions D Long-term value of customer E Service expectations 37 (p 559) All of the following are examples of operational measures within the balanced performance scorecard EXCEPT: A Process quality B Throughput time C Number of cross sales D Reduction in waste E Transaction time 38 (p 561) The operational measures used within the balanced performance scorecard should be: A Customer-defined B Cost-driven C Competitively sensitive D Front-line employeedefined E Environmentally-derived 39 (p 559) All of the following are measures within the innovation and learning perspective of the balanced performance scorecard EXCEPT: A Employee skills B Return on innovation C Number of new products D Time spent talking to customers E Service expectations lOMoARcPSD 40 (p 561) Which of the measurement areas in the balanced performance scorecard is the most difficult to capture quantitatively? A Operations measures B Financial measures C Customer measures D Sales measures E Innovation and learning measures 41 (p 561) An organization that wanted to create quantitative measures of its innovation and learning should use: A Rate of customer defection B The 80/20 principle C Long-term value of innovation to customers D The operating efficiencies continuum E Performance-to-goal percentages 42 (p 559) All of the following are financial measures used in the balanced performance scorecard EXCEPT: A Value of price premiums B Customer satisfaction C Volume increases D Long-term value of customers E Cross sales 43 (p 559) A service firm that calculates the long-term value of a customer is looking at the _ in its balanced performance scorecard A Competitor perspective B Customer perspective C Financial measures D Innovation and learning perspective E Operational measures 44 (p 559) Guests who stay at a Walt Disney resort hotels are asked to complete a comment card when they checkout In one section of the comment card, guests are asked if they would recommend the hotel they stayed at to a friend and if they would return to the same hotel These two behavioral intention questions are focusing on the _ perspective of its balanced performance scorecard A Competitive B Customer C Financial D Innovation and learning E Operational 45 (p 560) The comment card that is often found on the tables at a Wendy's fast-food restaurant asks about the customer's perceptions of the quality of the food, its cleanliness and the friendliness of the employees These questions are focusing on _ in Wendy's balanced performance scorecard A Competitive measures B Customer perceptual measures C Financial measures D Innovation and learning E Operational measures 46 (p 560-561) FedEx measures customer satisfaction and service quality with a 12-item statistical measure called the Service Quality Indicator One of the items measured by FedEx is the number of missed pickups per day In a balanced performance scorecard, the number of missed pickups per day would represent a(n) _ measure A Competitor B Customer C Financial D Innovation and learning E Operational 47 (p 564) Many companies not identify and act on the correct non-financial measures One mistake the companies make is _ that involves not laying out the cause-and-effect relationships between drivers and strategic success A Not linking measures to strategy B Not validating the links C Not setting the right performance targets D Measuring incorrectly E Not creating a balanced scorecard lOMoARcPSD 48 (p 564) Many companies not identify and act on the correct non-financial measures One mistake the companies make is _ that involves not verifying that the non-financial measures lead to financial performance They not analyze the relationships to validate the linkages A Not linking measures to strategy B Not validating the links C Not setting the right performance targets D Measuring incorrectly E Not creating a balanced scorecard 49 (p 565) Many companies not identify and act on the correct non-financial measures One mistake the companies make is _ that involves measuring complex phenomenon with one or two simple measures or using quantitative metrics to capture qualitative results for factors such as leadership A Not linking measures to strategy B Not validating the links C Not setting the right performance targets D Measuring incorrectly E Not creating a balanced scorecard 50 (p 564) It is difficult to measure non-financial performance measures Managers tend to make mistakes in this area by assuming: A Leading and lagging variables not influence time utility B Qualitative metrics are more telling than quantitative metrics C 100 percent customer satisfaction is the only important goal D Statistical reliability and statistical validity are always important E The improvement of non-financial measures leads to offensive marketing