Deck 9: Services Marketing

Question 1

The service sector furnishes the majority of jobs and contributes the major portion of the nation's gross domestic product (GDP).

Answer 1

True

Question 2

When thinking of services, it is helpful to think of a continuum with pure services at one extreme of the continuum and mixed services at the opposite extreme.

Answer 2

False

Question 3

The service sector is expected to furnish 58 percent of the total growth in employment in the United States between 2002 and 2012.

Answer 3

True

Question 4

The primary, or major, stimulus in the shift from a manufacturing-based economy to a service-oriented society in the United States is the movement to an information society spurred by the aging population and advances in medicine.

Question 5

In terms of service characteristics, variability refers to the simultaneous production and consumption of a service.

Question 6

In terms of service characteristics, variability refers to the unwanted or random levels of service quality customers receive when they patronize a service.

Question 7

In terms of service characteristics, perishability refers to the inability of a service to be inventoried or stored.

Question 8

In terms of service characteristics, inseparability refers to the lack of tangible assets of a service that can be seen, touched, smelled, heard or tasted prior to a purchase.

Question 9

The intangibility characteristic of a service makes the purchase of a service a higher risk than purchasing a good.

Question 10

In terms of perishability of a service, when demand is less than supply, revenue is lost because the firm has excess capacity.

Question 11

In terms of perishability of a service, when demand exceeds capacity potential revenue is lost.

Question 12

To reduce the importance of the customer-employee interaction, service firms look for methods of automating their service through the use of machines, computers, or other technology.

Question 13

Customizing a service to meet the need of a particular customer cannot be used to reduce the negative impact of the variability characteristic of a service.

Question 14

During the pre-purchase phase of the purchase process, consumers evaluate alternatives, make a purchase decision, and finalize a brand choice.

Question 15

The actual interaction between the service provider and the customer is called the service pre-purchase phase.

Question 16

A customer's level of satisfaction or dissatisfaction and future purchase intentions is determined during the service encounter phase of the purchase process when a customer evaluates the quality of service.

Question 17

For most purchase decisions, external factors are the most critical.

Question 18

In high involvement purchases, consumers spend considerably more time searching for information, both internally and externally.

Question 19

For services, service distribution is the availability and accessibility of a service to consumers.

Question 20

The uncertainty component of risk is the degree of importance or danger of the service outcome.

Question 21

The uncertainty component of risk is the probability that a particular outcome or consequence will occur.

Question 22

To reduce the uncertainty component of purchase risk, service firms must reduce the actual probability of a service failure or poor service performance.

Question 23

Reducing the consequence component of risk can be achieved by having quality control standards and procedures.

Question 24

During the service encounter, the service environment consists of tangible elements of the facility, the facility's atmosphere, and other customers who are present at the time of the service.

Question 25

Through blueprinting a service operation, a firm can see how customers and the firm interact.

Question 26

In service encounters where service personnel and customers have direct interaction, the conduct of service personnel becomes a critical factor.

Question 27

Potential future actions for customers who are dissatisfied with a service experience include switching vendors for the next purchase and negative word-of-mouth communications.

Question 28

Research has shown that only 1 out of every 15 dissatisfied customers will voice some type of complaint to the service firm.

Question 29

On the average, an unhappy customer will tell between 10 and 11 other people about a bad experience, while a satisfied customer will tell 6 to 7 other people about the good experience.

Question 30

In measuring service quality, tangibles refer to the service provider's physical facilities, equipment, and the appearance of the employees.

Question 31

In measuring service quality, assurance is the ability of the service firm to perform the service as promised in a dependable and accurate manner.

Question 32

In measuring service quality, empathy is the willingness of the firm's staff to help consumers and to provide prompt service.

Question 33

In measuring service quality, responsiveness is the caring, individualized attention the service firm provides to each customer.

Question 34

In measuring service quality, assurance is the knowledge and courtesy of the employees and their ability to inspire customers to trust and have confidence in the service provider.

Question 35

The advantage of using internal measures of service quality is that weaknesses as well as strengths can be identified.

Question 36

Service recovery is the process of attempting to regain a customer's confidence after a service failure.

Question 37

Service failures do not automatically result in firm-switching behavior and negative word-of-mouth communications.

Question 38

A successful service recovery program can overcome most service failures, but is not too successful at diminishing the negative impact of the original poor or failed service.

Question 39

In terms of service recovery, the longer it takes to correct the problem, the less likely it can be resolved satisfactorily and the less likely the customer will purchase again.

Question 40

In service recovery, many firms begin the resolution stage by asking customers what the firm can do to correct the problem.

Question 41

The components of the customer value package are price, technical service quality, functional service quality, and distribution.

Question 42

All of the following would be examples of a pure service except

A) computer systems design
B) personal physical fitness trainer
C) computer
D) algebra tutor

Question 43

All of the following would be examples of a pure good except

A) computer disk
B) exercise equipment
C) running shoes
D) automobile repair

Question 44

The gross domestic product (GDP) is the sum of

A) all goods and services produced by a country regardless of the location of the company
B) all goods and services produced within the boundaries of a country
C) all manufacturing and retail operations within the boundaries of a country
D) all business gross incomes over the last year

Question 45

The sum of all goods and services produced within the boundaries of a country is the

A) gross domestic product (GDP)
B) gross national product (GNP)
C) net domestic product (NDP)
D) net national product (NNP)

Question 46

The service sector in the United States accounts for _____ percent of the country's GDP and 77 percent of the total U.S. employment.

A) 50
B) 63.5
C) 69.3
D) 78.6

Question 47

The service sector in the United States accounts for 78.6 percent of the country's GDP and _____ percent of the total U.S. employment.

A) 50
B) 63
C) 69
D) 77

Question 48

The GDP of France would include

A) all goods and services produced by American companies in France
B) all goods and services produced in France regardless of the nationality of the company
C) all goods and services produced in France by French-owned companies
D) all goods and services produced by French-owned companies regardless of whether the companies are located in France or in other countries

Question 49

The fastest growth service areas in the United States will be in all of the following areas except

A) Internet, cable, and telecommunication industries
B) retail and wholesale services
C) computer software industry
D) professional and business services

Question 50

The service sector's rapid growth in the United States is primarily due to the shift from a manufacturing-based economy to a services-oriented economy. The major stimulus to this shift is the movement to an information age spurred by

A) an aging population
B) changing social and cultural values
C) the computer and advances in telecommunications
D) divesting from the manufacturing sector

Question 51

All of the following are factors that have contributed to the growth of the services sector except

A) younger population
B) increased leisure time
C) higher per-capita income
D) changing social and cultural values

Question 52

All of the following are factors that have contributed to the growth of the services sector except

A) aging population
B) less leisure time
C) increased time pressure
D) advances in technology

Question 53

The aging population and increase in life expectancy has spurred the need for

A) goods and services that save time, such as lawn care and housecleaning services
B) exercise facilities, fitness centers, and diet programs
C) medical services, nursing homes, and limited-care facilities
D) luxury-type goods and services such as entertainment and vacations

Question 54

More females in the workforce has created higher per-capita incomes, which has spurred the demand for

A) goods and services that save time, such as lawn care and housecleaning services
B) exercise facilities, fitness centers, and diet programs
C) medical services, nursing homes, and limited-care facilities
D) luxury-type goods and services such as entertainment and vacations

Question 55

Increased time-pressure faced by people has spurred the demand for

A) goods and services that save time, such as lawn care and housecleaning services
B) exercise facilities, fitness centers, and diet programs
C) medical services, nursing homes, and limited-care facilities
D) luxury-type goods and services such as entertainment and vacations

Question 56

For the next decade, the largest growth in jobs is forecasted for

A) registered nurses
B) postsecondary teachers
C) customer service representatives
D) waiters and waitresses

Question 57

The service sector as a percentage of GDP is greater than 70% for all of the following countries except

A) China
B) Germany
C) Mexico
D) United States

Question 58

In terms of service characteristics, intangibility refers to the

A) simultaneous production and consumption of a service
B) lack of tangible assets of a service that can be seen, touched, smelled, heard or tasted prior to a purchase
C) inability of a service to be inventoried or stored
D) unwanted or random levels of service quality customers receive when they patronize a service

Question 59

In terms of service characteristics, perishability refers to the

A) simultaneous production and consumption of a service
B) lack of tangible assets of a service that can be seen, touched, smelled, heard or tasted prior to a purchase
C) inability of a service to be inventoried or stored
D) unwanted or random levels of service quality customers receive when they patronize a service

Question 60

In terms of service characteristics, inseparability refers to the

A) simultaneous production and consumption of a service
B) lack of tangible assets of a service that can be seen, touched, smelled, heard or tasted prior to a purchase
C) inability of a service to be inventoried or stored
D) unwanted or random levels of service quality customers receive when they patronize a service

Question 61

In terms of service characteristics, variability refers to the

A) simultaneous production and consumption of a service
B) lack of tangible assets of a service that can be seen, touched, smelled, heard or tasted prior to a purchase
C) inability of a service to be inventoried or stored
D) unwanted or random levels of service quality customers receive when they patronize a service

Question 62

To reduce the risk involved in purchasing a service that cannot be seen or touched prior to the purchase, firms should strive to

A) produce services in advance so they can be inventoried and available when consumers want them
B) train employees so customers can receive the same level of service with each purchase
C) reduce the level of intangibility in a service
D) reduce the separation of the service's production from its consumption

Question 63

To reduce the level of intangibility in a service, a firm can

A) train employees to perform consistent service quality
B) provide certification for their employees
C) create a strong corporate culture
D) manage supply and demand

Question 64

Using testimonials of students in an advertisement for a college would be a method for reducing the _____ characteristic of a service.

A) perishability
B) inseparability
C) variability
D) intangibility

Question 65

Showing a college's campus, its buildings, and its professors in an advertisement would be a method for reducing the _____ characteristic of a service.

A) perishability
B) inseparability
C) variability
D) intangibility

Question 66

Sporting events, such as football, basketball, or baseball, are live events. Empty seats is lost revenue for the team. This illustrates the _____ characteristic of a service.

A) perishability
B) inseparability
C) variability
D) intangibility

Question 67

To reduce the negative impact of perishability of a service operation, a service can

A) train employees to perform consistent service quality
B) provide certification for their employees
C) create a strong corporate culture
D) develop strategies to deal with fluctuating demand

Question 68

In developing strategies to manage supply and demand to reduce the negative impact of perishability, the optimal goal would be for

A) demand to equal supply, but less than capacity
B) demand to equal supply, which in turn will equal capacity
C) demand to be less than supply, which in turn will be less than capacity
D) demand to be greater than supply, but not exceed capacity

Question 69

Reducing the negative impact of perishability for a rock concert can be accomplished using all of the following strategies except

A) demand can be reduced through increasing ticket prices
B) demand at various venues can be controlled through a website showing sold-out venues and locations were tickets are still available
C) increase supply by lengthening how long the show lasts
D) increase supply by increasing the number of venues where the concert can be seen

Question 70

In terms of perishability of a service operation, revenue is lost when demand is less than supply because

A) prices have to be reduced
B) supply cannot be reduced
C) the service is not tangible
D) of excess capacity

Question 71

Lowering prices to stimulate demand during a time when a service business has excess capacity would be a method for reducing the negative impact of

A) perishability
B) inseparability
C) variability
D) intangibility

Question 72

Banks encouraging customers to use ATM's and online banking services are reducing the level of _____ of the service operation.

A) intangibility
B) inseparability
C) perishability
D) variability

Question 73

To reduce the negative impact of inseparability of a service operation, a service can

A) train employees to provide a consistent level of service quality
B) hire part-time employees to increase the level of supply
C) create a strong corporate culture
D) develop strategies to deal with fluctuating demand

Question 74

A service can reduce the negative impact of _____ by emphasizing the selection and training of employees, especially in the area of customer-employee interactions.

A) perishability
B) inseparability
C) variability
D) intangibility

Question 75

A service can reduce the negative impact of _____ by ensuring a high quality interaction between customers and service providers.

A) perishability
B) inseparability
C) variability
D) intangibility

Question 76

Variability in a service operation is primarily caused by

A) the human element
B) machines used in the service operation
C) excess demand for the service
D) lack of tangibles used in the service

Question 77

To reduce the negative impact of variability of a service operation, the primary methods a service operation can use are

A) training employees to perform consistent service quality and hiring employees who have good people skills
B) managing both demand and supply
C) creating a strong corporate culture and using word-of-mouth communications
D) industrialization and standardization procedures

Question 78

A service can reduce the negative impact of _____ by standardizing their service operation and by automating the process as much as possible.

A) perishability
B) inseparability
C) variability
D) intangibility

Question 79

For most purchase situations, _____ are the most critical set of factors in the purchase decision.

A) internal factors
B) external factors
C) firm-produced factors
D) competitive factors

Question 80

In the pre-purchase phase, internal factors that impact the purchase decision include all of the following except

A) individual needs and wants
B) word-of-mouth communications
C) past experience
D) expectations of service alternatives