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DISCUSSION QUESTIONS
1. Why has it been difficult for executives to understand the relationship between service improvements
and profitability in their companies?
One of the main reason it has been difficult for executives to understand the relationship between
service improvements and profitability is that expenditures on service do not have an immediate,
evident impact. Service improvements are cumulative, like advertising, and take several years to be
2. To this day, many companies believe that service is a cost rather than a revenue producer. Why might
they hold this view? How would you argue the opposite view?
Companies believe that service is a cost because they have not traditionally had ways to track the
3. What is the difference between offensive and defensive marketing? How does service affect each of
these?
Offensive marketing means getting new customers while defensive marketing involves retaining the
ones a company already has. The main figure in the chapter shows how service quality affects each
4. What are the main sources of profit in defensive marketing?
The main sources of profit in defensive marketing are reduced costs (marketing, administrative and
5. What are the main sources of profit in offensive marketing?
