Chapter 12—Services and Nonprofit Organization Marketing
TRUE/FALSE
1. Even though the growth of the service sector worldwide has been sluggish in the past decade, the
service sector now accounts for approximately one-fourth of the gross domestic product in the United
States.
2. A barber shop is an example of a service business.
3. Services tend to exhibit more search qualities than do tangible goods.
4. Services are considered inseparable because most services cannot be felt or touched in the same way
most goods can be sensed.
5. Greta, the owner of House Mouse Cleaning Services, must be physically present when she cleans a
house or office. The need for her presence as the service is performed is an example of the intangibility
of services.
6. Heterogeneity of services means the quality of a service may not be consistent.
7. Hotels will often offer deep discounts on weekends and during the off-season; for the same reason,
airlines will adopt a similar pricing strategy during off-peak hours. These services cannot be stored,
warehoused, or inventoried because they are perishable.
8. Responsiveness is the service quality component most valued by customers.
9. Karen has a gluten allergy, which means she is unable to eat certain foods. The chef at her favorite
restaurant understands Karen’s situation and is always happy to modify his recipes for her when she
dines there. The chef is providing assurance to Karen.
10. The gap model of service quality identifies five gaps that can cause problems in service delivery and
influence customer evaluations of service quality.
11. The only type of service processing required for a comedian entertaining at a local club is information
processing.
12. The core service is the most basic benefit the consumer is buying.
13. An Most service organizations market only one specific service.
14. Vera is designing a promotional strategy for a company that provides premium boarding services for
pampered animals. Her promotions should use personal information sources and stress the tangible
cues associated with the service.
15. Revenue-oriented pricing focuses on maximizing the surplus of income over costs.
16. Many businesses have found that it is more expensive to hang on to the customers they have than to
focus only on attracting new ones.
17. Chesapeake Energy Corporation was recognized by Fortune Magazine as one of the top companies to
work for. Fortune mentioned that Chesapeake Energy provides its employees many perks, including
the opportunity to take free scuba-diving lessons in Chesapeake’s on-site Olympic-size pool. This
example illustrates relationship marketing in action.
18. U.S. service firms such as financial institutions and construction, engineering, and insurance
companies will have a difficult time expanding to global markets because competing foreign firms
possess many competitive advantages.
19. A nonprofit organization is an organization that exists to achieve some goal other than the usual
business goals of profit, market share, or return on investment.
20. Nonprofit organizations do not charge prices for the services they provide.
21. Nonprofit managers do not need to worry about developing marketing strategies.
22. Nonprofit organization marketing accounts for over 20 percent of all the economic activity in the
United States.
23. One marketing issue unique to nonprofit organizations is that these organizations must often target
those who are apathetic about or strongly opposed to receiving their services.
24. Nonprofit organizations may or may not require special facilities for distribution of their services.
25. The advertising budgets of most nonprofits are too small to pay for the running of PSAs (public
service advertisements) to promote their programs, activities, or services.
MULTIPLE CHOICE
1. A(n) _____ is the result of applying human or mechanical efforts to people or objects.
a.
application processor
b.
profit intermediary
c.
tangible product
d.
service
e.
nonprofit organization
2. “Girls Just Wanna Have Funds” is a Washington, D.C. support group that consist of mostly young
women that offers tips on budgeting and debt relief. As they state on their Web site, their goal is to
help women break financial ceilings “one stiletto at a time.” Girls Just Wanna Have Funds is providing
a _____ that is helpful to women that want to be financially savvy.
a.
synergy
b.
tangible resource
c.
tangible product
d.
service
e.
good
3. The service sector:
a.
has remained steady at 44 million jobs in the United States for the last 20 years
b.
employs roughly 80 percent of the U.S. workforce
c.
is rarely capital intensive, as most services do not need high technology
d.
is decreasing in importance in the United States
e.
tends to create fewer new jobs than the manufacturing industry
4. Xoom.com is a San Francisco-based online money transfer company that provides consumer
remittance services. With the Xoom bank deposit service, consumers can send money directly to bank
accounts in several countries around the world. Xoom.com would be classified as a:
a.
good
b.
tangible resource
c.
tangible product
d.
service
e.
nonprofit organization
5. All of the following are unique characteristics that distinguish services from goods EXCEPT:
a.
intangible
b.
inseparable
c.
searchable
d.
heterogeneous
e.
perishable
6. A service cannot be touched, seen, tasted, heard, or felt in the same manner in which goods can be
sensed and, therefore, is referred to as:
a.
impervious
b.
extraneous
c.
synergistic
d.
perishable
e.
intangible
7. A(n) _____ is a characteristic that can be easily assessed prior to purchase, such as the softness of a
mattress or the color of curtains.
a.
search quality
b.
intangible attribute
c.
experience quality
d.
credence quality
e.
heterogeneity feature
8. Maribeth and Asher are trying to think of someplace to take their kids this weekend. Asher thinks it
might be fun to take the kids to Coco Key, an indoor waterpark located in a nearby city. However,
since no one in the family has ever been to Coco Key before, they will be unable to assess the _____
of the waterpark until they actually visit.
a.
tangible attribute
b.
experience quality
c.
creative quality
d.
credence quality
e.
heterogeneity feature
9. “Girls Just Wanna Have Funds” is a Washington, D.C. support group that consist of mostly young
women that offers tips on budgeting and debt relief. Since you cannot evaluate the quality of the
financial advice until after you have received it, this is an example of the _____ characteristic of
service.
a.
reliability
b.
heterogeneous satisfaction
c.
search quality
d.
temporal quality
e.
experience quality
10. A characteristic that consumers may have difficulty assessing even after purchase because they do not
have the necessary knowledge or experience is referred to as _____ quality.
a.
search
b.
experience
c.
credence
d.
abstract
e.
inert
11. Alec had his gall bladder removed, but he was unconscious during the operation. In fact, even though
he has an incision, he really has no way of knowing if the service was actually performed even after it
was allegedly performed. That is because medical services such as this exhibit _____ qualities.
a.
credence
b.
perishable
c.
experience
d.
search
e.
homogeneous
12. Which of the following services would be most likely to exhibit strong credence qualities?
a.
A math tutorial service
b.
The repair of a leaky drain
c.
The preparation of a dead body for burial
d.
Tax return preparation
e.
A landscaping service that mows lawns
13. Which unique characteristic of services means consumers must be present during the production?
a.
Intangibility
b.
Inseparability
c.
Heterogeneity
d.
Perishability
e.
Connectivity
14. Auto repair, manicures, and landscaping are all services that are produced and consumed at the same
time. All of these services exhibit the service characteristic of:
a.
inseparability
b.
intangibility
c.
heterogeneity
d.
perishability
e.
variability
15. It is difficult for most of us to talk about mistakes we have made. Unfortunately, for organizations like
Consumer Credit Counseling to help you work through your financial issues, you must be willing to
honestly discuss your financial condition. In other words, for these organizations to help you must be
actually involved in the process of developing your financial plan, which points to the _____ nature of
services.
a.
intangible
b.
inseparable
c.
heterogeneous
d.
perishable
e.
flexible
16. Which unique characteristic of services is the variability of the inputs and outputs of services, which
causes services to tend to be less standardized and less uniform than goods?
a.
Intangibility
b.
Inseparability
c.
Heterogeneity
d.
Perishability
e.
Flexibility
17. It is difficult to achieve consistency and standardization of services because of which service
characteristic?
a.
Customization
b.
Simultaneous production and consumption
c.
Intangibility
d.
Perishability
e.
Heterogeneity
18. A reading service for the visually impaired requires each reader applicant to prepare and submit a
one-hour interview tape of material chosen by the service to determine whether the reader has pleasing
vocal characteristics and is accent-free so that it is not necessary to use the same reader every time.
The reading service is trying to limit problems associated with the service characteristic of:
a.
tangibility
b.
credence quality
c.
heterogeneity
d.
simultaneous production and consumption
e.
flexibility
19. The consistency and reliability of a service can be increased by:
a.
making sure that consumers are present during the production of the service
b.
eliminating credence quality
c.
standardization and training
d.
simultaneous production and consumption
e.
raising prices
20. Due to service _____, services cannot be stored, warehoused, or inventoried.
a.
tangibility
b.
variability
c.
intangibility
d.
perishability
e.
heterogeneity
21. David and Kathy like to take their young son, Chaz, to Moe’s for lunch after church on Sunday. While
they like to eat at Moe’s anytime, Sunday is particularly good because it’s “kids-eat-free” day at Moe’s
southwestern grill. Until Moe’s began the reduced pricing program, Sundays were very slow. Now it is
one of the busiest days of the week. This price reduction was a way to contend with the service
characteristic of:
a.
variability
b.
perishability
c.
intangibility
d.
inseparability
e.
simultaneous production and consumption
22. One of the reasons consumers can purchase cheap flights or hotel rooms on Web sites such as
Expedia.com and Hotels.com is due to the fact that airlines cannot sell the seat on a specific flight after
the plane takes off or hotels cannot recoup the revenue from that room for that night once the night
passes. Which unique characteristic of services does this illustrate?
a.
Intangibility
b.
Inseparability
c.
Perishability
d.
Simultaneous production and consumption
e.
Variability
23. All of the following are service components customers use to evaluate service quality EXCEPT:
a.
validity
b.
empathy
c.
assurance
d.
responsiveness
e.
reliability
24. Which component of a service is the ability to perform the service dependably, accurately, and
consistently?
a.
Responsiveness
b.
Reliability
c.
Assurance
d.
Empathy
e.
Tangibles
25. Canyons ski resort is so positive that guests will enjoy their visit that they offer a money-back
guarantee for special lift tickets purchased at the resort Web site. Canyons’
“You’ll-Love-It–Or–It’s-Free-Guarantee” provides consumers which of the following service quality
aspects?
a.
Tangibility
b.
Responsiveness
c.
Sympathy
d.
Responsibility
e.
Reliability
26. Virtual Bellhop is a company that ships awkward sporting goods to vacation destinations so its
customers to not have to worry about lugging them through airports or having them damaged in transit.
Thus far, its record for getting the sporting equipment to the correct destination for the vacationer is
perfect. This indicates the company excels at which component of service quality?
a.
Tangibles
b.
Empathy
c.
Reliability
d.
Flexibility
e.
Assurance
27. Which component of service quality represents the ability to provide prompt service?
a.
Reliability
b.
Responsiveness
c.
Assurance
d.
Empathy
e.
Tangibles
28. Jonathon had a problem when submitting an exam in his online marketing class and he received a
score of zero, so he sent an email to the professor explaining his problem. He was really worried
because the exam was due that evening, and he was very pleased when the professor replied within an
hour telling him that he scored a 90 on the exam. The professor’s prompt reply to his inquiry is an
example of which service quality component?
a.
Reliability
b.
Responsiveness
c.
Assurance
d.
Empathy
e.
Tangibles
29. Which service quality component is the knowledge and courtesy of employees and their ability to
convey trust?
a.
Reliability
b.
Responsiveness
c.
Assurance
d.
Empathy
e.
Tangibles
30. Buying a car through eBay may result in a low price, but how do you know you will be getting a good
car? One nice feature provided by eBay is the “feedback rating” that provides ratings and comments
from people that have made purchases from that seller before. Which service quality component does
the feedback rating address?
a.
Empathy
b.
Assurance
c.
Tangibles
d.
Flexibility
e.
Responsiveness
31. Service personnel who exhibit caring, individualized attention to customers are addressing which
service quality component?
a.
Reliability
b.
Responsiveness
c.
Assurance
d.
Empathy
e.
Tangibles
32. Emily’s nephew is on the autism spectrum, and she has read stories on the Internet about how vaccines
supposedly cause autism. Though Emily knows this theory has been debunked and that vaccines are
safe, she is surprised that she feels a bit worried when she takes her own child into the pediatrician for
her shots. Emily is glad her pediatrician does not think her fears are silly and will answer all of her
questions without making her feel stupid for asking them. By which of the following components of
service quality is Emily most likely to rate her pediatrician?
a.
Empathy
b.
Assurance
c.
Tangibles
d.
Reliability
e.
Responsiveness
33. The physical evidence of a service, including the physical facilities, tools, and equipment used to
provide the service represents which component of service quality?
a.
Reliability
b.
Responsiveness
c.
Assurance
d.
Empathy
e.
Tangibles
34. James recently went to a new health clinic because he had a sore throat that wouldn’t go away. He
was not familiar with this clinic and was a bit surprised when the doctor came in and was wearing blue
jeans, a flannel shirt, and tennis shoes. The doctor and nurse took proper care of James, but it seemed
strange to him that the doctor was dressed that way. Which component of service quality does this
illustrate?
a.
Reliability
b.
Responsiveness
c.
Assurance
d.
Empathy
e.
Tangibles
35. The model of service quality that identifies five disparities that can cause problems in service delivery
and influence customer evaluations of service quality is referred to as the _____ model.
a.
gap
b.
theory of reasoned action
c.
attribution
d.
dual-coding
e.
Fishbein
36. Starbucks management has been trying to refocus on the things that originally made the company so
successful. For example, Starbucks across the U.S. recently shut down for a short period of time for
re-training, and the company has worked to make sure you can smell the fresh ground coffee aroma
when you enter the store. However, when questioned, consumers tend to focus on the need for pricing
incentives such as a frequent purchasing program. According to the _____, there may be a difference
between what customers want and what Starbucks management thinks customers want.
a.
gap model of service quality
b.
service pyramid
c.
four dimensions of service quality
d.
service paradigm
e.
service delineation matrix
37. First Community Bank spent a considerable amount of money updating their lobby with plush sofas, a
big screen television, and a refreshment counter with popcorn and soft drinks. However, very few
customers spend time in the lobby. In fact, most customers want to be in and out of the bank, with their
financial transaction completed as quickly as possible. The gap model of service quality would suggest
that a gap exists between:
a.
the service quality specifications and the service that is actually provided
b.
what the company provides and what the customer is told it provides
c.
the service customers receive and the service they want
d.
what customers want and what management thinks customers want
e.
what management thinks customers want and the quality specifications management
develops to provide the service
38. To improve its friendliness, the First National Bank hired Joy as a greeter. Joy’s job is to sit at a desk
near the front lobby and greets customers as they enter with a warm friendly smile along with a “Good
Morning” or “Good Afternoon.” Unfortunately, Joy is also required to answer the bank’s main
telephone line. Since she spends most of her day on the telephone, Joy rarely gets to flash her smile or
greet anyone as they enter the bank. In fact, Joy is on the phone so much that she doesn’t really even
seem friendly. This is an example of a gap between:
a.
the service quality specifications and the service that is actually provided
b.
what the company provides and what the customer is told it provides
c.
the service customers receive and the service they want
d.
what customers want and what management thinks customers want
e.
what management thinks customers want and the quality specifications management
develops to provide the service
39. Purchasing your clothes online can be fun as you can shop from companies around the world without
leaving your home. You can also often get great prices on the items you purchase. However, you could
get stuck with a product that doesn’t look anywhere as nice in reality as it does on your computer
screen. Land’s End takes this concern away with their “Guaranteed Period” promise. Land’s End will
happily return your purchase price on any item you purchase for any reason. If Land’s End ever failed
to follow-through with this promise, it would represent a gap between:
a.
what management thinks customers want and the quality specifications that management
develops to provide the service
b.
what the company tells the customer it provides and what is actually provided
c.
service quality specifications and employee training
d.
what customers want and what management thinks customers want
e.
none of these
40. If a customer expects to wait three hours for an auto repair but is told that the repair is finished just one
hour later, the customer’s evaluation of service quality will be high. However, a two-day wait would
result in a lower evaluation. The two-day wait would illustrate a gap between:
a.
service quality specifications and the service that is actually provided
b.
the service customers receive and the service they want
c.
what the company provides and what the customer is told it provides
d.
what customers want and what management thinks customers want
e.
what management thinks customers want and the quality specifications management
develops to provide
41. All of the following are types of service processing that can occur EXCEPT:
a.
people processing
b.
product processing
c.
possession processing
d.
information processing
e.
mental stimulus processing
42. Which category of service processing takes place when the service is directed at a customer?
a.
People processing
b.
Possessions processing
c.
Information processing
d.
Mechanical processing
e.
Personal processing
43. Trina is a physical fitness trainer who tries to get to know her clients and their specific fitness goals.
Trina understands that she is in the _____ processing business.
a.
people
b.
mechanical
c.
possession
d.
mental
e.
information
44. Which type of service processing occurs when the service is directed at customers’ physical
possessions such as cars, homes, or clothing?
a.
People processing
b.
Possession processing
c.
Mental stimulus processing
d.
Information processing
e.
Tangible processing
45. Which of the following services is an example of possession processing?
a.
A theatrical performance
b.
An X-ray of a broken bone
c.
An advertising agency
d.
Marriage counseling
e.
Heating system repair
46. TeamBuilds is a service organization that has corporate teams pay $7,500 for an all-day team-building
session with a management consultant while they work together on renovating a Habitat for Humanity
home. Which category of service processing does TeamBuilds offer?
a.
Possession processing
b.
Information processing
c.
Mental stimulus processing
d.
People processing
e.
Homogeneous processing
47. Which of the following services is an example of mental stimulus processing?
a.
Taxi cab service
b.
Insurance
c.
A professional tennis match
d.
Veterinarian care
e.
A hair cut
48. Which type of service processing uses technology or brainpower directed at customer’s assets?
a.
People processing
b.
Possession processing
c.
Mental stimulus processing
d.
Information processing
e.
Technology processing
49. Which of the following services is an example of information processing?
a.
Drafting a will
b.
Having a prescription filled
c.
Getting a down comforter dry cleaned
d.
Taking a class at the local community college
e.
Ordering a pizza for delivery
50. The most basic benefit the consumer is buying in a service is referred to as the:
a.
primary service
b.
inherent service
c.
core service
d.
tangible service
e.
complete service
51. TeamBuilds is a service organization that has corporate teams pay $7,500 for an all-day team-building
session with a management consultant while they work together on renovating a Habitat for Humanity
home. TeamBuilds’ _____ service is improved work team relationships.
a.
primary
b.
core
c.
niche
d.
supplementary
e.
foundation
52. Western Union is in the business of providing a medium for international money transfers. A Mexican
working in the United States can transfer a portion of his or her earnings to family members still living
in Mexico. The wire transfer of funds is the _____ service the company provides.
a.
supplementary
b.
benchmarked
c.
core
d.
primary
e.
fundamental
53. A group of services that support or enhance the core service is called:
a.
secondary services
b.
peripheral services
c.
additional services
d.
supplementary services
e.
complementary services
54. Western Union is in the business of providing a medium for international money transfers. A Mexican
working in the United States can transfer a portion of his or her earnings to family members still living
in Mexico. It is now planning to move into areas traditionally handled by banks such as offering its
customers checking accounts and loans. If it does follow through and provide these additional services,
they will exemplify _____ services.
a.
complementary
b.
secondary
c.
peripheral
d.
supplementary
e.
additional
55. _____ is the strategy that uses technology to deliver customized services on a mass basis.
a.
Mass standardization
b.
Aggregated services
c.
Technological processing
d.
Mass customization
e.
Aggregated marketing
56. At the My M&M’s Web site, customers can design their own versions of the famous candy. Customers
choose from 25 M&M’S colors; write a message, add clip-art, or even a face to each M&M, and select
specific packaging. This is an example of:
a.
a cooperative service
b.
mass customization
c.
aggregated standardization
d.
a market development strategy
e.
mental stimulus processing
57. TruGreen offers lawn care, shrub care, carpet cleaning, and industrial lawn serices. These different
services combine to make TruGreen’s:
a.
service mix
b.
standardization strategy
c.
component services
d.
customized services
e.
distribution strategy
58. After years of expansion, Starbucks recently closed 600 of its poorer performing stores. Many of the
stores closed were near other Starbucks locations. In those areas management felt that the company
had too many outlets, which was boosting the company’s cost unnecessarily. Decisions concerning the
number of outlets are a part of the _____ strategy of service organizations.
a.
distribution
b.
promotion