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Provider gap 2 exists in service companies because of a failure of horizontal
communication.
How a customer defines desired levels of service is more likely to change than how
adequate levels of service are defined.
Research by TARP Worldwide, Inc. found that only 7 percent of customers who are
“neutral or very dissatisfied” say they will “definitely repurchase” from the same
company.
Customers typically notice service when it falls outside the zone of tolerance.
The primary goal of relationship marketing is to build and maintain a base of profitable
and committed customers through attraction, retention and customer enhancement.
Boundary spanners provide a link between internal departments of an organization.
Words alone are often more than adequate for describing services such as financial
portfolio management.
In mixed-leader pricing, the price of a catered reception may be less if the bride buys
her wedding cake from the same caterer and pays full price for the cake.
Formal market research of lost customers' motivations is a waste of resources.
When Brendan changes the oil in his truck, he is acting as a service competitor to the
maintenance department at a car dealership.
Standardization of service behaviors and actions is inconsistent with employee
empowerment.
When an on-duty lifeguard must interact with people in a pleasant and professional
manner and go repeatedly into the pool even though he has severe sunburn, the
lifeguard is performing empathetic labor.
An elaborate interpersonal service faces the most complex servicescape decisions.
"Answering questions promptly" would be an example of a hard customer-defined
standard.
An insurance company that used advertising showing satisfied customers thanking the
company for their prompt payment after a flood would be addressing service
intangibility.
The work environment of a lawyer does not affect whether clients and/or colleagues
view her as successful and trustworthy.
It is very difficult to surprise or delight customers by consistently delivering reliable
service.
One of the major difficulties associated with provider gap 4 is that communications to
consumers typically involve issues that cross organizational boundaries.
Process checkpoint evaluations are commonly used in service industries in which the
services are provided quickly on a one-time only basis.
The two research methods used to document customers' opinions about whether service
performance met the standards established are benchmarking and critical incident
surveys.
Evidence shows that customer perceptions of quality do not affect consumer intentions.
Service quality, like advertising, has a cumulative effect on a company's profit.
When a day care center added an after-school program for first through third graders, it
was an example of a service line extension.
The spatial layout and functionality are most important for interpersonal services
environments.
Lead user research brings in customers who are opinion leaders or innovators and asks
them what requirements existing products or services are not currently meeting.
Companies that ask customers about their service expectations raise the customers'
levels of expectations.
Interaction and measurement are tools used to manage internal marketing
communications.
Because Bella Harasian, certified medical doctor, does not like to deal with people, she
can be described as having service competencies but not service inclinations.
One way of promoting teamwork is to encourage the attitude that “everyone has a
customer.”
A company that wants to excel at responsiveness should view service delivery and the
handling of requests from the company's point of view.
One of the steps in the process for developing customer-defined standards is to provide
feedback about performance to employees.
A contractor could use outsourcing as a way to adjust its capacity to meet demand.
In a supermarket, customers who have only a few items will wait longer than customers
who have a full cart of groceries because supermarkets use a differentiating queue.
A guarantee is a particular type of service recovery tool.
All of the following are situations in which a penetration pricing strategy would be
appropriate EXCEPT:
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
WedSafe is the name of a company that provides wedding insurance. For example, in
the event that a wedding is called off, the couple can insure themselves against loss of
their nonrefundable deposits. If WedSafe’s primary marketing effort is to make engaged
couples aware of its services, the company is in which stage of the customer
relationship evolution?
A. Acquaintances
B. Leads
C. Strangers
D. Allies
E. Friends
Kayla has been having her haircut by Duncan, a hairstylist at Studio 21 Salon, for five
years. She has continued to use the same hairstylist even though the price of a haircut at
Studio 21 Salon is $10 higher than at competing hair salons. Duncan stays up to date on
the latest hairstyles and hair care products and Kayla always leaves the salon with a
haircut she loves. Kayla realizes _____ benefits from her relationship with Duncan.
A. Reliability
B. Confidence
C. Transactional
D. Self-actualization
E. Transformational
Clark participated in a research study conducted by Red Lobster restaurants in which he
was asked to provide a verbatim story about a satisfying and dissatisfying service
encounter he had at Red Lobster. Which of the following types of research studies did
Clark participate in?
A. Complaint solicitation
B. Critical incidents studies
C. Relationship surveys
D. Trailer calls
E. Customer panels
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
Kelso Massage Therapy promises its clients that there wait for a massage will be less
than fifteen minutes or the massage is free. What type of service recovery tool is Kelso
Massage Therapy using?
A. Offer a guarantee
B. Respond quickly
C. Do it right the first time
D. Implement the service paradox
E. Act proactively instead of reactively
On certain days during the week, Disneyworld allows guests who stay at a Disney
Resort hotel to enter the Magic Kingdom, Epcot Center or Disney-MGM Studios one
hour before the parks are open to the public. Walt Disney World is minimizing waiting
time by differentiating customers on the basis of:
A. Their willingness to perform the service role
B. The importance of the customer
C. The duration of their stay in the amusement park
D. Their need to have fun
E. The payment of a premium price
Nike's introduction of women-only boutiques called Nike Goddess to satisfy the needs
of a growing number of women athletes is an example of a(n):
A. Compliant standard
B. Concrete substitution
C. Internal anchor
D. One-time fix
E. Quick solution
Customer retention strategies based on customization bonds:
A. Do not exist in business-to-business marketing
B. Create tying contracts, refusals to deal, exclusive dealing and areas of gray
marketing
C. Are not concerned with the pricing element of the marketing mix
D. May include the customer intimacy approach
E. Support transactional marketing as well as relationship marketing
A service blueprint depicts:
A. The process of service delivery
B. All stakeholders that will be affected by the service process
C. The intangible elements of the service
D. The relation of the service to the services marketing mix
E. How the service dimensions will interact before, during and after the service process
The term customer intimacy is most closely related to the establishment of _____
bonds.
A. Financial
B. Social
C. Customization
D. Structural
E. Security
The development of strong customer relationships is strongly influenced by:
A. Legal barriers to loyalty programs
B. The composition of the buying center
C. Barriers the customer faces in leaving a relationship
D. Differences in organizational cultures
E. All of the above
Since service companies have found that customers differ in their relationship value and
that it may be neither practical nor profitable to meet or exceed all customers’
expectations, they have divided their target markets according to:
A. Current and/or future profitability
B. Behavior
C. Usage
D. Volume
E. User characteristics
Once an organization that is developing a physical evidence strategy has recognized the
strategic impact of physical evidence, it should next:
A. Update and modernize this physical evidence
B. Clarify the tactical roles of the servicescape
C. Create a cross-functional work team
D. Blueprint the physical evidence of service
E. Map the service encounter points
On a recent trip to Disneyland, Rose had her picture taken with Minnie Mouse. After
the picture was taken, Minnie Mouse signed Rose's autograph book. Rose's interaction
with Minnie Mouse was actually a(n) _______ with Disneyland.
A. Advertising event
B. Socialization
C. Service encounter
D. Service arrangement
E. Acculturation
For a physical evidence strategy to be effective, it must:
A. Offer customization capabilities
B. Create departmental integration
C. Be linked clearly to the organization's overall goals and vision
D. Be blueprinted
E. Avoid creating negative ambient conditions
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
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
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
Which of the following statements about predicted service is true?
A. If the consumer predicts good service, the level of adequate service is likely to be
higher than if he or she predicted poor service
B. Predicted service estimates the level of service for all future transactions
C. With no more than three inputs, a consumer can determine the future predicted
service of nearly all types of service providers on all occasions
D. Predicted service is unaffected by situational factors or personal needs
E. Predicted service is calculated by the service provider not the customer
Provider ______ is the difference between company understanding of customer
expectations and the development of customer-driven service designs and standards.
A. Gap 1
B. Gap 2
C. Gap 3
D. Gap 4
Sales associates at Nordstrom are given a "personal" book to keep track of customers'
names, telephone numbers, height and weight, likes and dislikes (e.g., color, style and
texture preferences) and charge account numbers to help them become a personal
shopper for the customer. In addition, sales associates have an open account to send
thank-you notes or flowers to customers. By having a personal book and sending
thank-you notes or flowers to customers, Nordstrom's sales associates are showing they
care by emphasizing the _____ dimension to influence customer perceptions of
Nordstrom's service quality.
A. Reliability
B. Responsiveness
C. Assurance
D. Empathy
E. Tangibles
The augmentation of an existing service line is a:
A. Major innovation
B. New service for the currently served market
C. Service line extension
D. Service improvement
E. Service franchise
The ________ metric is obtained by summing up the customer lifetime values of the
firm’s customers.
A. The customer equilibrium
B. Customer equity
C. Customer empowerment
D. Fiscal value
E. Service blueprint value
Shelton Elementary School only needs its gymnasium from Monday through Friday. On
the weekends it rents the facilities to an Upward Bound basketball program sponsored
by a local church. By renting its facilities, the elementary school is:
A. Adjusting capacity to match demand
B. Creating optimal supply
C. Optimizing its demand pattern
D. Outsourcing
E. Smoothing peaks and valleys of demand
Variations in the supply and demand of services result in:
A. Inadequate management of service promises
B. Over-promising in advertising and personal selling
C. Insufficient word-of-mouth-communication
D. Inadequate horizontal communication
E. Differences in policies and procedures across distribution units
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
Hildy's children are giving her a weekend trip to a Lake Tahoe resort. Their
expectations of the amenities and services the resort will provide are much higher
because they are planning the trip for their mother's approval rather than for their own
use. This is an example of a(n) _____ expectation.
A. Derived service
B. Other-self
C. Dyadic
D. Service-vision
E. Shared
Customers who enjoy participating in the service delivery process are performing which
of the following service delivery roles?
A. Customer mix manager
B. Competitor
C. Productive resource
D. Contributor to quality and satisfaction
E. Recruiter
If customers believe they have multiple service providers to choose from, or if they can
provide the service for themselves, their levels of _____________ are higher than those
of customers who believe it is not possible to get better service elsewhere.
A. Adequate service
B. Desired service
C. Predicted service
D. Ideal service
E. Derived service
Mike hurt his back and has to go to physical therapy every other day. He has a series of
exercises he is supposed to do on the days he does not see the therapist. After two
months, Mike was not feeling any better and complained to the therapist who at that
point realized Mike was not performing all of the stretching exercises that he should be
at this point in his rehabilitation. Mike had been handed a booklet when he started his
therapy. Because he had only been instructed in how to perform some of the exercises
in the booklet but not all of them, he had thought he was not to do the others. Mike feels
like he has been wasting his time. The service provider has erred by:
A. Inadequate internal marketing communications
B. Inappropriate external marketing communications
C. Providing inadequate customer education
D. Under-promising and over-delivering
E. Inadequate management of customer expectations
Which of the following is a strategy used for managing 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
Benford Bank hired marketing researchers when it noticed many people who had
savings accounts with the bank did not have checking accounts and credit cards with it.
The researchers would conduct _____ research if they wanted to test the hypothesis that
customers do not like the checking account and credit card services of Benford Bank.
A. Functional
B. Exploratory
C. Quantitative
D. Secondary
E. Qualitative
Which of the following factors in managing demand and capacity does NOT lead to
provider gap 3, failure to deliver what was designed and specified?
A. Lack of communication between contact personnel and company management
B. Under use of service capacity
C. Failure to smooth the peaks and valleys of demand
D. Overuse of service capacity
E. The attraction of an inappropriate customer mix in an effort to build demand
What kind of research is being used when an insurance company representative sits
down with people who have lost their homes to tornadoes and asks, "What could have
been done to better handle your needs immediately after the storm"?
may vary
What is the first step in developing customer-defined standards?
may vary
Will and Jason NaJami are going to open a swimming pool service this summer. They
will put in pools, repair damaged ones and provide a pool-cleaning service. Why should
they consider designing and implementing an effective service recovery strategy?
may vary
When calculating share of wallet, what is meant by rank?
may vary
Pierce loves his new job as a city bus driver but he hates his polyester uniform that he
believes makes him look like an overgrown Boy Scout. What kind of conflict is Pierce
experiencing?
may vary
Even though it was unusual, the retailer wanted the sign painter to do reverse painting
on her store windows. (Paint the glass and leave the letters clear.) The retailer felt that
this would make her store stand out as a unique place to shop. She had to talk to four
sign painters before she found one that was agreeable to her plan. Which service
dimension were the first three sign painters lacking?
may vary
Discuss the underlying logic of the service-profit chain
may vary
Byron Wheatley recently began teaching his tenth 2-hour wine-tasting seminar in the
banquet hall of a restaurant that has a large and varied wine cellar. His class participants
are complaining the class he is teaching is not what they expected. Some are leaving
after the first hour without a word to Wheatley. No participant has ever taken another
one of Wheatley's classes even though each class studies a different variety of wine.
Which provider gap is causing Wheatley the most difficulty? List some possible
strategies Wheatley can use to close or possibly eliminate this provider gap.
may vary
For what communications purpose would a service company create cross-functional
teams?
may vary
Which service recovery strategy is most closely connected to an employee
empowerment strategy?
may vary
List the three major roles played by customers in service delivery.
may vary
Rusty Black owns and manages a costume store. It is not part of a chain, so Black has
had to experiment with ways to get customers into his store and make them want to
browse when they get there. He is thinking of specializing in zombies and monster
costumes. Explain how Black could use the servicescape in a variety of strategic roles
to increase store traffic. Provide specific examples of how the servicescape could
perform the four different strategic roles.
may vary
What is the fundamental issue underlying supply and demand management in services?
may vary
Once a service provider has translated customer expectations into behaviors and
actions, it must select those behaviors and actions that will be used to create employee
standards. What are the six most important criteria for the creation of those standards?
may vary
What is the wallet allocation rule?
may vary
