Chapter 13—Services Marketing
ESSAY
1. Discuss the importance of services in the U.S. economy, and explain the growth of services in our
economy.
2. List and explain the six distinguishing characteristics of service products. Then discuss some of the
marketing issues and problems associated with each characteristic.
3. Explain the role of promises and trust in the successful marketing of a service.
4. How can a service marketer smooth the fluctuations in demand from times of peak demand to times of
off-peak demand?
5. All services suffer from heterogeneity. Explain this problem, and discuss different ways that
heterogeneity can occur in service delivery.
6. Explain how the characteristics of services affect the development and management of marketing
mixes.
7. How does the promotion of services differ from the promotion of goods?
8. What specific marketing problems are experienced by a provider of high-contact services that are not
experienced by a provider of low-contact services?
9. In what ways do inseparability and intangibility affect the pricing of services?
10. What dimensions do customers use to evaluate service quality?
11. Identify and discuss the four factors that affect the delivery of service quality. How can service
marketers use these factors to their advantage?
12. Describe how nonprofit marketing differs from for-profit marketing.
13. How do the target markets of nonprofit organizations differ from the target markets of for-profit
organizations?
14. How does the marketing mix (product, price, distribution, and promotion) differ in nonprofit
marketing?
15. Select a familiar nonprofit organization, and describe its target market and marketing mix.
MULTIPLE CHOICE
16. Services are usually provided through ____ directed at people or objects.
a.
tangible and intangible products
b.
physical labor
c.
the application of human or mechanical efforts
d.
ideas and other intangible efforts
e.
knowledge and technology
17. In general, differences between goods and services are determined by the
a.
degree of labor intensiveness.
b.
type of target market.
c.
degree of tangibility.
d.
type of provider.
e.
degree of consumer contact.
18. Any human or mechanical effort that adds value to a product is called
a.
a service.
b.
an intangible.
c.
overhead.
d.
customer service.
e.
service marketing.
19. Which of the following is not a service product?
a.
Justin Bieber concert
b.
Flight on Southwest Airlines
c.
A 100 percent service satisfaction guarantee
d.
Overnight stay at Holiday Inn Express
e.
Dry cleaning of a suit
20. Service industries account for ____ of the gross domestic product of most developed nations.
a.
more than half
b.
a small portion
c.
approximately 25 percent
d.
nearly all
e.
nearly three-quarters
21. Which of the following countries was the world’s first service economy?
a.
England
b.
United States
c.
Sweden
d.
Canada
e.
Germany
22. Julianne is planning her upcoming wedding later this year. She has made a list of all the expenses
which will be required for the wedding she has planned. Which of the following is not one of the
service products associated with Julianne’s wedding?
a.
Delivery of the wedding cake
b.
Hiring a limo and driver
c.
Flowers for the church
d.
Renting the reception hall
e.
String quartet music
23. Which of the following factors have contributed the least to the growth of services in the U.S.
economy?
a.
Increased interest in travel and entertainment
b.
Increased number of women in the workforce
c.
Increased proportion of older people in the United States
d.
Increased interest of Americans in fitness and recreation
e.
Increased number of high-tech goods
24. The growth of business services is largely attributed to
a.
increases in incomes and living standards.
b.
decreases in the consumption of products.
c.
increases in governmental expenditures.
d.
increases in the complexity and competitiveness of business environments.
e.
increases in population.
25. Zach has just opened Tri-State Partners and has the need for several business services from other
companies. Which of the following is most likely to be considered a service product for Zach’s
business?
a.
Housecleaning
b.
Parking lot maintenance
c.
Computer software
d.
Coffeepot for employees
e.
Uniforms
26. According to your text, one perspective from which to view services is as a ____ targeted at a(n) ____.
a.
sporting event; spectators
b.
concert; audience
c.
play; actors
d.
performance; audience
e.
presentation; spectators
27. Services have six basic characteristics: intangibility, inseparability of production and consumption,
perishability, client-based relationships, customer contact, and
a.
labor-intensiveness.
b.
orientation toward value.
c.
homogeneity.
d.
heterogeneity.
e.
specialization.
28. The intangibility aspect of a service means that
a.
there is a lack of perceived quality compared to a tangible good.
b.
unused capacity cannot be stockpiled or inventoried for later use.
c.
consumers may have a problem evaluating service offerings.
d.
services are not produced at the same time they are consumed.
e.
services are not labor-intensive.
29. The continuum of tangibility goes from ____ on one end to ____ on the other end.
a.
service-dominant products; good-dominant products
b.
pure products; pure services
c.
rational products; irrational products
d.
mostly service goods; mostly product goods
e.
easy to see; not easy to see
30. Which of the following services falls closest to the middle of the tangibility continuum?
a.
College education
b.
Dinner at the Olive Garden
c.
A new Ford Escape
d.
A custom built yacht
e.
A trip to Brazil
31. Because practically all marketers provide some services, ____ typically do not exist in today’s business
environment.
a.
pure goods
b.
pure services
c.
customer services
d.
service products
e.
tangible-dominant products
32. Hair stylists find it challenging to standardize their service because the customer must be involved in
production (i.e., the haircut). This illustrates which of the following unique features of services?
a.
Intangibility
b.
Inseparability
c.
Perishability
d.
Heterogeneity
e.
Homogeneity
33. Personal trainers cannot complete their work without their clients present because of the ____ feature
of services.
a.
perishability
b.
intangibility
c.
inseparability
d.
heterogeneity
e.
tangibility
34. Jason Robinson, a dentist, finds that he is not bringing in enough revenue to cover his expenses. He
would like to schedule more patients, but he finds that in almost every time slot, he is seeing an
existing patient. Jason’s difficulty in expanding his practice involves the aspect of service called
a.
slotting.
b.
perishability.
c.
credence.
d.
inseparability.
e.
heterogeneity.
35. All of the following are elements of the inseparability characteristic of services except that
a.
consumers are involved in production.
b.
centralized mass production is difficult.
c.
consumption and production are simultaneous.
d.
many services cannot be performed without the customer being present.
e.
services are easy to standardize and control.
36. The fact the services cannot be inventoried and then sold at a later date is called
a.
intangibility.
b.
heterogeneity.
c.
inseparability.
d.
perishability.
e.
nonstorability.
37. Kate, owner of K’s Tanning Salon, looks at the day‘s appointment schedule and notices that it is
completely full. She wishes some of the empty tanning beds from earlier in the week were available on
this Saturday afternoon. Kate’s problem deals with the ____ characteristic of services.
a.
credence
b.
heterogeneity
c.
perishability
d.
search
e.
inseparability
38. Marketers of services must deal with the challenges of balancing supply and demand and planning for
peak and off-peak times. What characteristic of services creates these challenges?
a.
Inseparability
b.
Customer contact
c.
Perishability
d.
Heterogeneity
e.
Intangibility
39. Lashawna is a concert promoter who works for singer Kanye West. She works very hard to make sure
most of Kanye’s concerts are sold out because she understands the concept of perishability, which
means
a.
because the concert is not tangible, customers will have a difficult time judging its quality
in advance.
b.
the production of the concert and the consumption of the concert by the fans cannot be
separated so tickets must be sold.
c.
a high level of interaction will exist between the customers and the musicians, which
makes the customers’ presence necessary.
d.
that if the tickets are not sold, seats will remain empty and they can never be sold to
anyone again.
e.
that each concert is different and customers will miss a unique experience if they are not
present at the concert.
40. The more ____ involved with delivering a service, the greater the degree of heterogeneity.
a.
mechanical efforts
b.
phone contact
c.
perishability
d.
tangibility
e.
human labor
41. Because of a service’s ____, standardization and quality are difficult to control.
a.
intangibility
b.
inseparability
c.
homogeneity
d.
heterogeneity
e.
perishability
42. The fact that the first massage Gretchen gives each day is better than the last massage demonstrates the
____ of services.
a.
heterogeneity
b.
customer contact aspect
c.
intangibility
d.
inseparability
e.
perishability
43. Saresh owns the Change-ezz, a salon specializing in the unique hair needs of minority populations.
Recently, Saresh has been trying to improve the quality of service received by his customers.
However, he has experienced difficulty in finding ways to standardize and control the salon’s quality
of service. Saresh’s problem illustrates which of the following unique features of service?
a.
Intangibility
b.
Inseparability
c.
Perishability
d.
Heterogeneity
e.
Marketability
44. What should marketers do to promote the consistency and reliability of their services most effectively?
a.
Limit the number of employees in their organization
b.
Train employees and develop standard procedures for dealing with customers
c.
Encourage employees to be creative in solving customer issues and complaints
d.
Perform as much of the service as possible before the customer arrives
e.
Require employees to be shining, happy people all day long
45. H&R Block, a major tax preparation firm, reported having a problem with its employees being
inconsistent in the filing of returns. The firm is experiencing a problem with which of the following
characteristics of the service offering?
a.
Tangibility
b.
Intangibility
c.
Perishability
d.
Inseparability
e.
Heterogeneity
46. Services delivered through machinery such as computer kiosks, ATMs, and vending machines can
reduce the ____ that comes from increased contact with human employees.
a.
intangibility
b.
perishability
c.
inseparability
d.
heterogeneity
e.
tangibility
47. Maria asks Glenda what housecleaning service she would recommend in Oakview. Glenda responds
that Pristine Cleaning is great if you can be assured that Janice will be the person assigned to your
house. Glenda’s recommendation addresses which of the following service features?
a.
Heterogeneity
b.
Intangibility
c.
Perishability
d.
Inseparability
e.
Homogeneity
48. Many services base their success on building a group of satisfied customers who use their services on a
regular basis over long periods of time. This critical component of success is referred to as
a.
partnerships.
b.
repeated customer contact.
c.
inseparable clientele.
d.
long-term customers.
e.
client-based relationships.
49. The main characteristic of a ____ is that customers are satisfied to the point that they use a service
repeatedly over a period of time.
a.
service relationship
b.
professional marketer
c.
high-contact service
d.
heterogeneous service
e.
client-based relationship
50. Client-based relationships are least likely to be developed by
a.
appliance repairmen.
b.
accountants.
c.
beauticians.
d.
orthodontists.
e.
psychiatrists.
51. Carlos is speaking to his brother about the interaction he had today with one of his clients. Since he is
referring to his customer as a client, Carlos is most likely a(an)___
a.
Funeral director
b.
House painter
c.
Masseur
d.
Dry cleaner
e.
Auto repairman
52. Client-based relationships are most likely to be developed by
a.
funeral directors.
b.
electricians.
c.
installers.
d.
doctors.
e.
brick layers.
53. When service companies change high-contact services into low-contact services, the
a.
service becomes more expensive to deliver.
b.
quality of the service declines.
c.
service becomes less personalized.
d.
time required to deliver the service increases.
e.
service becomes less standardized.
54. The necessary interaction between service provider and customer that allows a service to be delivered
is called
a.
customer contact.
b.
service exchange.
c.
marketing.
d.
relationship marketing.
e.
service contact.
55. Troy is a service provider for a low-contact type of service. Which of the services below is Troy most
likely to provide?
a.
Childcare
b.
Website design
c.
Health care
d.
Auto detailing
e.
Personal trainer
56. Andrea has just opened a new service business called Paws n’ Claws, which provides dog grooming
and doggie day care. Andrea has done research about the role dogs play in today’s culture, particularly
for those people who do not have children. She knows that some of these people represent a target that
is urban, professional, and who travel frequently. Andrea’s business is likely to have a _____ and she
will probably refer to the dog owners as ___.
a.
high level of tangibility; customers.
b.
high level of inseparability; customers.
c.
high level of customer contact; clients
d.
low level of perishability; customers
e.
low level of intangibility; clients
57. Which of the following is the best example of a high-contact service?
a.
Appliance repair
b.
Newspaper delivery
c.
Dog training
d.
Interior decorating
e.
Plastic surgery
58. Which of the following statements about customer contact in services marketing is false?
a.
Service employees are important in creating satisfied customers.
b.
High-contact services are less expensive to deliver because they are typically equipment–
based.
c.
The main principle of customer contact is that satisfied employees lead to satisfied
customers.
d.
Service companies can minimize customer dissatisfaction by changing high-contact
services into low-contact services.
e.
Employee training programs are an effective way to ensure good customer contact and
reduce problems.
59. If Best Western bundles its rooms with services such as free local phone calls, cable television,
wireless Internet access, and complimentary breakfast, these services are known as ____ services.
a.
core
b.
supplementary
c.
bundled
d.
business
e.
complimentary
60. A service is usually offered as part of a bundled package of services with a core service and one or
more ____ services.
a.
basic
b.
tangible
c.
supplementary
d.
auxiliary
e.
other core
61. A first class airline ticket offers a ____ service of transportation as well as ____ services of drink and
food service, special boarding rights, and extra customer service.
a.
primary; secondary
b.
core; supplementary
c.
bundled; extra
d.
complementary; main
e.
major; minor
62. Which of the following service characteristics results in variability of service quality yet provides the
opportunity for customizing services to match the specific needs of individual customers?
a.
Homogeneity
b.
Perishability
c.
Heterogeneity
d.
Intangibility
e.
Inseparability
63. The heterogeneity characteristic of services provides marketers with tremendous opportunity to
a.
customize their services to meet unique individual needs.
b.
hold down the cost of providing services to customers.
c.
create standardized packages that will appeal to many customers.
d.
offer the same service as all of their competitors.
e.
develop relationship marketing with their customers.
64. Service marketers make promises to customers, suggesting that the customer place some degree of
trust in the service provider. In this way, service marketers are trying to address the challenge of the
service characteristic of
a.
perishability.
b.
heterogeneity.
c.
inseparability.
d.
intangibility.
e.
customer contact.
65. Brittany recently moved to a new city and is trying to find a new mechanic to do maintenance and
repair on her car. She visits several places to judge their overall appearance, cleanliness, and
organization and finally chooses a mechanic. Brittany was trying to overcome the ____ aspect of
services.
a.
heterogeneity
b.
perishability
c.
customer contact
d.
intangibility
e.
inseparability
66. One way service businesses communicate a higher level of service quality to their customers is by
having their employees be clean, sharp looking, and dressed in appropriate uniforms. This is a way to
address the ____ characteristic of services.
a.
intangibility
b.
perishability
c.
tangibility
d.
inseparability
e.
heterogeneity
67. If a nonsmoker dines in a restaurant without a no-smoking section, then the overall quality of service
experienced by the nonsmoking customer probably declines. This is an example of which of the
following service characteristics?
a.
Perishability
b.
Inseparability
c.
Heterogeneity
d.
Intangibility
e.
Homogeneity
68. In an attempt to attract customers, service marketers often promise great results and satisfaction to
customers, but marketers should be careful not to
a.
deliver on these promises and risk financial losses and the success of the company.
b.
promise less than they can actually deliver and keep customers away.
c.
make the appearance of their facilities consistent with their promises to customers.
d.
promise too much and cause customer expectations beyond what they can deliver.
e.
make the quality of their services too tangible in the eyes of the customer.
69. A sign in a doctor’s office waiting room says “Please be courteous of the others waiting with you.” The
doctor’s office is trying to positively influence the ____ aspect of services.
a.
tangibility
b.
perishability
c.
inseparability
d.
customer contact
e.
heterogeneity
70. Prudential Insurance uses “the rock” symbol to communicate stability and security to customers. This
is Prudential’s attempt to help customers better understand its services by
a.
emphasizing tangible cues in promoting the service.
b.
using word association.
c.
personalizing the selling of the service.
d.
utilizing publicity techniques to enhance the service.
e.
distributing the service directly through television.
71. What are the three primary ways that marketers deliver services?
a.
Over the phone, online, or in-person
b.
Continuously, periodically, or on demand
c.
At the customer’s home, in-person, or by telecommunications
d.
Through service centers, delivery vehicles, or the mail
e.
Service facilities, customer’s home, or from a distance
72. The marketing channels for services are usually
a.
complex and multifaceted.
b.
characterized by two to three intermediaries.
c.
dependent on the geographical location of the consumer.
d.
determined by the customer.
e.
direct from provider to customer.
73. Using appointments or reservations for scheduling delivery of services is an attempt to address the
____ characteristic of services.
a.
perishability
b.
intangibility
c.
heterogeneity
d.
inseparability
e.
homogeneity
74. By installing automated check-in kiosks in some airports, airlines have increased production capacity
and reduced the number of personnel. This results in a decrease in
a.
perishability.
b.
intangibility.
c.
customer contact.
d.
inseparability.
e.
customer service.
75. Compared to goods marketers, services providers are more likely to promote performance
documentation, availability, guarantees, and
a.
distribution.
b.
tangible elements.
c.
management expectations.
d.
price.
e.
customer expectations.
76. Symbols such as the Travelers’ Financial Services umbrella are designed to help customers overcome
the ____ of services.
a.
heterogeneity
b.
unpredictability
c.
inseparability
d.
intangibility
e.
perishability
77. Flo, the spokesperson in Progressive Insurance TV commercials, is used to symbolize friendliness,
reliability, and knowledge of the company’s products. The part Flo plays in the promotion is designed
to address the ____ characteristic of services.
a.
intangibility
b.
perishability
c.
heterogeneity
d.
inseparability
e.
customer service
78. Just Relax Massage Therapists have a large customer base although they do very little advertising.
Their promotion strategy relies mostly on
a.
news stories.
b.
a webpage.
c.
word of mouth.
d.
newspaper ads.
e.
television ads.
79. Production and consumption of services must simultaneously occur due to the ____ characteristic of
services.
a.
intangibility
b.
heterogeneity
c.
customer contact
d.
perishability
e.
inseparability
80. An American West Airlines flight from Dallas to Houston was full, and the tickets were more
expensive than the almost-empty American West flight from Chicago to Phoenix. This is an example
of what kind of service pricing?
a.
Bundled
b.
Demand-based
c.
Supply-based
d.
Upfront
e.
Customer-based
81. Tutors, attorneys, and consultants are most likely to price their services based on ____, while auto
repair, hair stylists, and house painters are likely to price their services based on ___.
a.
functions performed; time
b.
time; functions performed
c.
objectives accomplished; time
d.
demand; objectives accomplished
e.
time; demand-based pricing.
82. Demand-based pricing most closely relates to the ____ of services.
a.
perishability
b.
intangibility
c.
heterogeneity
d.
customer contact aspect
e.
inseparability
83. Service activities are time-dependent, meaning that the service must be provided at a point in time
when customers want to use it. This point in time is also known as
a.
peak demand.
b.
preferred demand.
c.
off-peak demand.
d.
high-contact time.
e.
high intensity time.
84. Many cellular phone plans contain a certain number of anytime minutes and then either significantly
more or even unlimited night and weekend minutes. This is an example of
a.
time-based pricing.
b.
off-peak demand.
c.
demand-based pricing.
d.
time dependence pricing.
e.
bundled costing.
85. When a theater entices customers to see movies during the daytime by offering tickets at a reduced
price, it is trying to solve the services marketing problem of
a.
inseparability.
b.
intangibility.
c.
customer contact.
d.
off-peak demand.
e.
heterogeneity.
86. Any service provider that offers time-sensitive services receives most of its revenue during
a.
peak demand.
b.
heavy use time.
c.
the off-season.
d.
preferred demand.
e.
customer contact time.
87. Which of the following service providers are most likely to use demand-based pricing?
a.
Dentists
b.
Lawyers
c.
Doctors
d.
Hair stylists
e.
Cruise ships
88. When Expedia.com offers a special price for customers who chose an airline ticket, hotel, and a rental
car, it is using ____
a.
bundled-pricing.
b.
time-based pricing.
c.
off-peak demand pricing.
d.
preferred demand.
e.
time dependent pricing.
89. Safe Auto Insurance advertises “minimum coverage for minimum budgets” for its automobile
insurance. Which of the following best describes Safe Auto’s approach?
a.
Customers often use price as an indicator of quality, and Safe wants to be seen as a low–
quality provider.
b.
This type of advertising makes insurance more tangible to the customer.
c.
Safe wants to reassure customers that they provide the highest level of service quality
available.
d.
Because market conditions limit prices on auto insurance, Safe uses this approach to gain
customers.
e.
For some services, customers look for the low-cost provider, which is what Safe claims to
be.
90. American Life uses leather-look portfolios and high-quality paper and printing for its life insurance
policies in order to indicate
a.
the success of its business.
b.
the intangibility of its service.
c.
the tastes of its management.
d.
the inseparability of its agents and customers.
e.
the quality of its services.
91. Who judges service quality?
a.
Employees
b.
The company
c.
Independent raters
d.
Customers
e.
Marketers
92. Consumers look closely at service quality when comparing competing services because
a.
they perceive all services to be essentially the same.
b.
they typically have very few services from which to select.
c.
all services are priced about the same.
d.
quality is the only relevant service characteristic.
e.
services are very difficult to evaluate.
93. Tina, a waitress at the Riverfront Grill, is angry that a customer complained that his soup was cold
because of her slow service. Riverfront owner Max Griffin reminds her that she must focus on service
quality as defined by
a.
the health department.
b.
restaurant management.
c.
the customer’s perceptions.
d.
temperature guidelines.
e.
general practices.
94. Tara finds evaluating a new pair of jeans much easier than evaluating tennis lessons because she can
try on the jeans to see exactly how they feel and fit. In other words, the jeans have many ____
qualities.
a.
experience