61) Most customers never complain to the business; in fact, for every complaint that a company
receives, there are ________ other complaints that go unspoken.
A) 2
B) 7
C) 10
D) 17
62) How can a company achieve stellar customer service and satisfaction?
A) Listen to customers and define superior service.
B) Set standards and measure performance.
C) Hire the right employees and treat them with respect.
D) All the above
63) The majority of customers who stop patronizing a particular store do so because ________.
A) its prices are too high
B) its quality is too low
C) an indifferent employee treated them poorly
D) it failed to advertise enough
64) The best companies seek to go beyond customer satisfaction, striving for customer
________.
A) automation
B) aggrandizement
C) apprehension
D) astonishment
65) Superior service companies devote ________ percent of their employees’ work hours to
training, concentrating on how to meet, greet, and serve customers.
A) 2 – 7
B) 3 – 8
C) 1 – 5
D) 7 – 10
66) Research shows that repeat customers spend ________ percent more than new customers.
A) 5
B) 52
C) 67
D) 97
67) In your training program, you stress to all new employees the importance of customer
satisfaction, citing the fact that ________ of the average company’s sales come from present
customers.
A) a small amount
B) about one-half
C) a majority
D) an undetermined percentage
68) Approximately ________ percent of a typical company’s customers account for ________
percent of its sales.
A) 90; 100
B) 80; 20
C) 20; 80
D) 20; 50
69) Companies with a customer focus typically ask their customers all but which of the
following questions?
A) What are we doing right?
B) What have we done wrong?
C) What can we do in the future?
D) What have our competitors done wrong?
70) The philosophy of producing a high-quality product or service and achieving quality in every
aspect of the business and its relationship with the customer, with a focus on continuous
improvement in the quality delivered to customers is ________.
A) total quality management, or TQM
B) time compression management, or TCM
C) bootstrap marketing
D) customer experience management, or CEM
71) The process of systematically creating the optimum experience for customers every time
they interact with the company is ________.
A) total quality management (TQM)
B) time compression management (TCM)
C) customer experience management (CEM)
D) guerilla marketing
72) Which of the following is not a suggestion of a means of focusing on the customer?
A) Seeing the customer’s point of view.
B) Get total commitment to superior customer service from everyone in the organization.
C) Carefully select and train everyone who will deal with the customer.
D) Actually, all of the above are suggested as a means of focusing on the customer.
73) Which of the following is a way to improve customer service?
A) Encourage customers to complain.
B) Ask employees for feedback on improving customer service.
C) Develop a service theme that communicates the importance of customer service in the
company.
D) All of the above
74) The total quality management (TQM) concept ________.
A) strives to achieve quality not just in the product or service itself, but in every aspect of the
business and its relationship with the customer
B) relies on quality inspections through an army of quality control inspectors
C) focuses on reducing the time it takes to fulfill a customer’s request for a product
D) None of the above
75) Companies with strong reputations for quality follow certain guidelines, such as ________.
A) establishing long-term relationships with suppliers
B) fostering individual effort and pride of workmanship
C) securing employees’ commitment to the quality philosophy; it is not important to secure top
management’s full support, as the employees are the ones who work more closely with the
products and the customers
D) All of the above
76) ________ pay the bills: without them, you have no business.
A) Accountants
B) Employers
C) Employees
D) Customers
77) Location, delivery services, effective use of easy-to-use technology and multiple
communication options are examples of ________.
A) convenience
B) customer service
C) blogging
D) social media marketing
78) A marketing strategy that relies on three principles to speed products to market, shorten
customer response times in manufacturing, and deliver and reduce the administrative time
required to fill an order is ________.
A) total quality management (TQM)
B) time compression management (TCM)
C) customer experience management (CEM)
D) bootstrap marketing
79) ________ is the key to future success and small companies can detect and act on new
opportunities faster than large companies.
A) Innovation
B) Speed
C) Convenience
D) Technology
80) What can a company do to achieve stellar customer service and satisfaction?
A) Listen to customers with the help of suggestion boxes, focus groups, surveys, and other tools.
B) Define what “superior service” means so that customers and employees know exactly what to
expect and what to provide.
C) Hire friendly, courteous sales and service representatives.
D) All of the above
81) The key ingredient in the superior customer service equation is ________.
A) state-of-the-art equipment
B) standards and measurements of customer service
C) the support of managers
D) friendly, courteous, well-trained people delivering customer service
82) Time compression management (TCM) involves ________.
A) speeding new products to market
B) reducing the administrative time required to fill an order
C) shortening customer response time in manufacturing and delivery
D) All of the above
83) Which of the following is not a suggestion for using time compression management (TCM)
to turn speed into a competitive advantage?
A) Instill speed in the company’s culture.
B) Use technology to find shortcuts wherever possible.
C) Pay workers more if they do their jobs the same way — only faster.
D) Set aggressive goals for time reduction and stick to them.
84) To attract potential customers, a ________ can serve multiple business purposes, including
keeping customers updated on new products, enhancing customer service, and promoting the
company.
A) newspaper advertisement
B) brochure
C) blog
D) radio promotion
85) The Internet offers entrepreneurs tools to provide existing and potential customers with
meaningful information ________.
A) in a passive, one-directional manner
B) for those with advanced high-tech skills
C) in a complex and difficult-to-manage method
D) in an interactive rather than passive setting
86) In addition to treating employees with respect, smart entrepreneurs see customer service as
an investment that builds long-term value for their companies through ________.
A) listening to customers and providing superior service
B) setting standards and measuring performance
C) examining the company’s service cycle and empowering employees
D) All the above build long-term customer service value
87) The increasing diversity of our population is creating a marketing “threat” to small
businesses because they cannot profitably serve small niches.
88) A company has a competitive edge when customers perceive that its products or services are
superior to those of competitors.
89) Branding is communicating a company’s unique selling proposition to its target customers in
a consistent and integrated manner.
90) Because about 20 percent of a typical company’s customers account for about 80 percent of
its sales, a business should focus its resources on keeping its best customers rather than trying to
chase “fair weather” customers who will defect to any better deal that comes along.
91) Customer experience management (CEM) is the process of systematically creating the
optimum experience for their customers every time they interact with the company.
92) Most dissatisfied customers complain about rude or discourteous service to the owner or the
manager.
93) Giving customers a chance to complain about a problem usually is fruitless; once a business
makes a customer angry, (s)he typically will not buy from that company again under any
circumstances.
94) One of the most important variables that determine whether employees deliver superior
service is the degree to which they perceive they have the permission to do so.
95) Truly customer-oriented companies seek to go beyond customer satisfaction, striving for
superior customer service.
96) When an employee in a business treats a customer poorly, that customer usually does not
complain; however, she does tell her “horror story” about that business to more than 10 other
people.
97) Since front-line service workers are not able to predict the causes of customer complaints,
managers must be the ones to identify potential customer service problems.
98) One disadvantage of total quality management (TQM) is that its principles apply only to
manufacturers.
99) If employees are committed to quality, management’s commitment becomes unimportant.
100) It takes much less money and time to keep existing customers than it does to attract new
ones.
101) Because a majority of the average company’s sales come from present customers, few can
afford to alienate any customers.
102) Providing low prices is the most effective way for a small business to attract and maintain a
growing customer base.
103) Total quality management (TQM) works best when it becomes an integral part of a small
company’s strategy and focuses on continuous improvement in the quality the company delivers
to customers.
104) The best way for a small business to ensure quality products is to use quality inspections.
105) Studies have found that customers value convenience and easy access to goods and
services.
106) Adding innovative products and services is important to a companies’ success and small
entrepreneurial companies may be able to respond faster than larger organizations.
107) Most businesses are finding technology provides efficiency and speed in providing a wide
array of services to their customers.
108) The Internet allows creative small business owners to make their companies look as big as
their larger rivals.
109) For many small businesses, nonprice competition (focusing on factors other than price) is a
more effective strategy than trying to beat larger competitors in a price war.
110) Describe what is meant by bootstrap marketing. What objectives should a bootstrap
marketing plan accomplish? List at least five bootstrap marketing tactics your small business
might be able to use successfully.
111) Describe why a small business might gain a competitive edge over its rivals by using a
focus on the customer, devotion to quality, paying attention to convenience, concentration on
innovation, dedication to service, and emphasis on speed.
112) Explain the concept of total quality management. How is it different from the quality
inspection of a final product just before being packaged?
113) Why is it important for a small business to keep existing customers satisfied? How can a
company achieve such customer satisfaction?
114) What marketing potential does the Internet offer small business owners?
Mini-Case 9-1: Customers: Key to Success
Lloyd Dixon has owned and operated a small dress shop for the past three years. Each fashion
season, Lloyd attends the apparel shows and he is always very impressed by the glamour and the
hundreds of different manufacturers, all with the merchandise that they say will be this season’s
biggest sellers. Lloyd caters to an older market and baby boomers. He hopes to tap into the
upscale market.
After his first year of operation, Lloyd recognized that some of his merchandise was not selling.
The “inventory close-out sale” did rescue his investment in this merchandise but did not make
him a profit or contribute much to his overhead. Lloyd knew that it was not reasonable to expect
to sell everything you bought, but he was not sure exactly how much of his inventory was
comprised of slow movers. Lloyd believed that when he went into business he knew what
women wanted in dresses. He had always prided himself on having good taste. When he had the
opportunity to open this store, he was confident that he could choose merchandise that would be
well received. In the first three years of operations, sales have not met Lloyd’s expectations.
115) How could Lloyd realistically create a competitive advantage by giving customer service a
focus in his business?
Case 9-2: TQM and TV in Omaha
Nobody who knew Marvin Tollison ever met a man who liked television better. In the Navy, he
had the opportunity to learn a great deal about his trade. When he finished his tour of duty,
Marvin opened a television repair shop back home in Omaha, Nebraska. Over the years the
quality of his workmanship, his fair prices, and his general overall good nature made his business
flourish. Marvin had a way of finding men and women like himself when expansion was needed.
Over 17 years, the business had grown from a one-man shop operating in his garage to a 38-
employee television repair staff that was dispatched to customers by two-way truck radio. Over
the years, the time between a customer’s call and the television repairman getting to the home
had increased to about two days because the repairmen were taking longer with each call. Call–
backs (having to “re-repair” equipment) are up significantly. Marvin wasn’t sure, but he thought
some of his customers were going elsewhere for service.
116) Can Marvin use TQM to develop a competitive edge? If so, what would you recommend he
do?
117) How can Marvin develop “stellar” customer service?