Deck 14: Delivering Service Through Intermediaries and Electronic Channels

Question 1

How do company-owned service providers like Waffle House restaurants differ from franchise-owned service providers like Wendy's restaurants?

A) Waffle House has complete control over customer relationships and Wendy's does not
B) Waffle House is able to create completely homogeneous services and Wendy's cannot
C) Inventory control is more efficient at Waffle Houses than at Wendy's
D) Product intangibility is less acute at Waffle House than at Wendy's
E) Employee empowerment is easier at Wendy's than at Waffle House

Answer 1

A

Question 2

Mike Leven is the president and co-founder of US Franchise Systems, one of the nation's fastest growing hotel companies. Its franchises include Microtel Inn & Suites, Hawthorne Suites and Best Inns and Suites. Which of the following is a problem US Franchise Systems is likely to experience with one of its franchisees?

A) Difficulty in maintaining and motivating franchisees
B) Difficulty controlling quality and consistency across hotels
C) Control of customer relationships by intermediary
D) Highly publicized disputes and conflicts
E) All of the above

Answer 2

E

Question 3

Which of the following functions do service intermediaries typically perform for service principal?

A) Provide time and place convenience for the customer
B) Co-produce the service
C) Make services locally available
D) As a link between the brand and the customer
E) All of the above

Answer 3

A

Question 4

Which of the following is a franchising benefit to the franchisee?

A) More control than anticipated
B) Low failure rates
C) Low start-up costs
D) The minimizing of the risks of starting a business
E) All of the above

Question 5

Which of the following is NOT a franchising challenge that a franchiser might have to cope with?

A) Providing financing for franchisees
B) The motivation of franchisees
C) The control of customer relationships by the intermediary rather than the service principal
D) Inconsistent quality which can undermine the company name
E) Highly publicized disputes between franchisees and franchisers

Question 6

Which of the following is NOT an example of a service intermediary?

A) Agents
B) Brokers
C) Electronic channels
D) Franchises
E) Co-operatives

Question 7

Which of the following is NOT a franchising benefit to the franchiser?

A) The opportunity to gain knowledge of local markets
B) The maintenance of consistency in service outlets
C) The control of customer relationships by the intermediary rather than the service principal
D) The sharing of financial risk
E) Leverage for the business to gain expansion and revenues

Question 8

Which of the following is NOT a franchising challenge to the franchisee?

A) Disappointing profits and revenues
B) Lack of perceived control
C) High fees and rigid contracts
D) Encroachment and franchise saturation
E) Inability to build brand awareness

Question 9

_____ are service outlets licensed by a principal to deliver a unique service concept it has created or popularized.

A) Agents
B) Brokers
C) Horizontal marketing systems
D) Franchises
E) Cooperatives

Question 10

The largest impediment for company-owned service chains is:

A) The maintenance of perishable inventories
B) Customer empowerment
C) The creation of store autonomy
D) Controlling customer relationships
E) The company must bear all of the financial risks

Question 11

_____ are the most common type of intermediary for services.

A) Agents and brokers
B) Vertical outlets
C) Franchises
D) Electronic channels
E) Retailer cooperatives

Question 12

Terri Franciosa owns and operates a McDonald's restaurant franchise in New Jersey. Franciosa is the service:

A) Contractor
B) Principal
C) Originator
D) Collaborator
E) Deliverer

Question 13

Nancy Love represents several different mystery book authors to publishers and potential publishers. She operates as a sole proprietorship and is an example of a(n):

A) Franchisee
B) Cooperative
C) Franchiser
D) Retailer
E) Agent

Question 14

The major benefit of distributing through company-owned channels is that:

A) Time and place utilities are created as efficiently as possible
B) The company has complete control over the outlets
C) The company bears all of the financial risks
D) Customers receive homogeneous service
E) Customer empowerment can be readily achieved

Question 15

Encroachment and lack of perceived control are _____ of franchising to the _____.

A) Benefits; franchiser
B) Challenges; franchiser
C) Benefits; franchisee
D) Challenges; franchisee

Question 16

How do company-owned service providers like Waffle House restaurants differ from franchise-owned service providers like Wendy's restaurants?

A) Situation analyses are more revealing when they are comparing the environments of several outlets using the same operating procedures
B) Secondary research data can be more readily obtained by Waffle House local managers than by Wendy's local franchisees
C) Franchise owners of Wendy's are more likely to understand the local markets than Waffle House, especially in international markets
D) Heterogeneous services is more of a problem for Waffle House than for Wendy's
E) Waffle House has more opportunities to create employee-customer relationships than Wendy's does

Question 17

The counterpart of the service _____ is the manufacturer of physical goods.

A) Collaborator
B) Principal
C) Collaborator
D) Creator
E) Originator

Question 18

A _____ of franchising to the _____ is that franchising leverages the business format to gain wider distribution.

A) Benefit; franchiser
B) Challenge; franchiser
C) Benefit; franchisee
D) Challenge; franchisee

Question 19

Which of the following statements about service distribution is true?

A) Intermediaries provide the same services for goods and services
B) In service distribution, rights and/or titles to the service are passed through the distribution channel
C) Channels for goods are more likely to be direct than channels for services
D) Many of the primary functions that distribution channels serve have no meaning in services
E) Warehousing is an important function in services marketing

Question 20

When two or more service companies want to offer a service and neither has the financial capability or expertise, they often undertake:

A) Horizontal service systems
B) Service partnerships
C) Service integration
D) Service mentoring
E) Vertical service systems

Question 21

Which of the following is NOT a benefit of electronic channels?

A) Low costs
B) Wide distribution
C) Customer convenience
D) Buyer confidence about security of information
E) Quick customer feedback

Question 22

Which of the following is a challenge experienced by service providers when delivering services through agents and brokers?

A) Representation of multiple service providers
B) High selling and distribution costs
C) Limited knowledge of local markets
D) Narrow geographical representation
E) All of the above

Question 23

There are many sites on the Internet where consumers can buy plane tickets at a reduced rate. Travelocity is the only Internet site where consumers can go to purchase airplane tickets, hotel reservations, amusement park tickets and admission to other tourist places. Consumers get to pick from a wide array of services. What benefit does Travelocity offer to travelers?

A) Knowledge of local markets
B) Customer choice
C) Pricing control
D) Narrow representation
E) All of the above

Question 24

Mike Leven is the president and co-founder of US Franchise Systems, one of the nation's fastest growing hotel companies. Its franchises include Microtel Inn & Suites, Hawthorne Suites and Best Inns and Suites. Which of the following is a problem US Franchise Systems is likely to experience with one of its franchisees?

A) Channel conflict over objectives and performance
B) Difficulty controlling quality and consistency across hotels
C) Channel ambiguity
D) Tension between control and empowerment
E) All of the above

Question 25

Heffner Funeral Homes uses the Internet to sell some 300 different products including jewelry, urns, coffins and funeral memorabilia as well as a complete line of funeral services. Heffner Funeral Homes uses a(n):

A) Agent
B) Broker
C) Electronic channel
D) Franchise
E) Retail cooperative

Question 26

Wal-Mart developed a web site ( HYPERLINK "http://www.walmart.com/" walmart.com) that most consumers were unaware of. To entice customers to visit its web site, Wal-Mart sold roses for $29 a dozen the weeks prior to Mother's Day. This price included delivery and was considerably less than what was offered by most other flower retailers. Why did Wal-Mart offer this great deal?
A. Wal-Mart realized customers are active and need a reason to visit a web site
B. Wal-Mart did not want to engage in price competition at its traditional stores
C. Wal-Mart wanted quick customer feedback on how people rated its web site
D. Wal-Mart wanted to take advantage of how consistent service offerings become with customer involvement
E. Customers are passive and will always locate the best deals

Question 27

Many companies send important proprietary data to their various subsidiaries through the Internet. Someone who wanted to capture this data as it moves through electronic channels can use sniffing software. This is only one of many means through which unauthorized people can get access to data. This unauthorized interception of data is an example of which of the following challenges associated with electronic distribution of services?

A) Security concerns
B) The passivity of online users
C) Slow customer feedback
D) The inability to customize highly standardized electronic services
E) The need to change consumer behavior

Question 28

_____ are the only service distributors that do not require direct human interaction.

A) Agents
B) Brokers
C) Electronic channels
D) Franchises
E) Retail cooperatives

Question 29

Which of the following is a challenge faced by service providers who use electronic distribution?

A) High costs
B) Slow customer feedback
C) Inconsistent delivery for standardized services
D) Inability to customize
E) Competition from widening geography

Question 30

If you want to buy a vacation cruise to the Bahamas and you'd like to buy on the Internet, there are several ways to shop. One of the most efficient methods is to use a shopping bot, which is an electronic agent that will comb web sites for you and then present you with a list of sites where vacation cruises are available, descriptions of each cruise and how they are priced. Shopping bots encourage:

A) Customization
B) Homogeneity in commodity products
C) Price competition
D) Electronic saturation
E) Overlapping merchandising

Question 31

Heffner Funeral Homes uses the Internet to sell some 300 different products including jewelry, urns, coffins and funeral memorabilia as well as a complete line of funeral services. How would the use of electronic channels challenge the funeral home chain?

A) Price competition
B) Low customer involvement
C) Slow customer feedback
D) High costs
E) Inability to customize services

Question 32

A company that sells children's clothing at its web site learns shortly after opening its electronic store that it has many customers who are making selections of items they would like to buy, but abandoning their selections before purchasing due to a complex checkout process. This is an example of how electronic channels can benefit service providers by:

A) Protecting customer privacy
B) Providing quick customer feedback
C) Giving intermediaries control of the electronic environment
D) Increasing awareness of price competitors
E) Increasing customers' abilities to customize

Question 33

Which of the following is a benefit enjoyed by service providers who use electronic distribution?

A) No security concerns as with other channels
B) Wide distribution
C) Absence of customer involvement in service delivery
D) Absence of price competition
E) All of the above

Question 34

Which of the following is NOT a benefit offered by agents and brokers to service principals?

A) Possession of special skills and knowledge
B) Customer choice
C) Reduced selling and distribution costs
D) Wide geographical representation
E) Control over pricing

Question 35

Mike Leven is the president and co-founder of US Franchise Systems (USFS), one of the nation's fastest growing hotel companies. Its franchises include Microtel Inn & Suites, Hawthorne Suites and Best Inns and Suites. If a franchisee were to conduct market research on the motel preferences of a frequent business traveler, conflict could arise as the franchisee and USFS decide who own the research results. This would be an example of:

A) Channel conflict over span of control
B) Difficulty controlling quality and consistency across hotels
C) Channel autonomy
D) Channel ambiguity
E) Tension between control and empowerment

Question 36

Heffner Funeral Homes uses the Internet to sell some 300 different products including jewelry, urns, coffins and funeral memorabilia as well as a complete line of funeral services. How would the company benefit from using electronic channels?

A) Customer convenience
B) The ability to ignore changes in consumer behavior
C) The absence of price competition
D) A high degree of consistency due to low customer involvement
E) Guaranteed privacy

Question 37

Which of the following statements about agents is true?

A) Agents can be classified as either facilitating agents or end-user agents
B) Agents work for their principals continuously, rather that just for a single deal
C) Agents take title to the goods they sell
D) Agents perform the same services as brokers
E) Agents are accurately described by all of the above

Question 38

A retail travel agent is a _____ agent.

A) Facilitating
B) Leading
C) Selling
D) Purchasing
E) Mediating

Question 39

An agent who negotiates commercial endorsements and speaking engagements for professional athletes is an example of a _____ agent.

A) Facilitating
B) Leading
C) Selling
D) Purchasing
E) Mediating

Question 40

A broker:

A) Typically becomes involved in financing
B) Is a long-term representative of buyers and sellers
C) Does not engage in negotiations
D) Is paid by the party who hired them
E) Is accurately described by all of the above

Question 41

In a franchise, the intermediary controls customer relationships rather than the service principal.

Question 42

Because agents and brokers are paid by commission rather than by salary, there is little risk in extending the service offerings to a wide geography.

Question 43

One of the principal problems a service provider involves the inconsistency and lack of uniform quality that result when multiple outlets deliver service.

Question 44

Electronic channels are the only service distributors that do not require human interaction.

Question 45

Mike Leven is the president and co-founder of US Franchise Systems (USFS), one of the nation's fastest growing hotel companies. Its franchises include Microtel Inn & Suites, Hawthorne Suites and Best Inns and Suites. Its franchise owners are held to the highest standards of cleanliness and property maintenance. Monthly mystery shoppers visit each hotel and a franchisee can lose his or her franchise if the hotel does not meet minimum standards. USFS uses a(n) _____ strategy.

A) Partnering
B) Venture
C) Control
D) Empowerment
E) Proactive

Question 46

Agents take title to services when acting on behalf of a service principal.

Question 47

With _____ strategies, the service principal allows greater flexibility to intermediaries based on the belief that their talents are best revealed in participation rather than acquiescence.

A) Autonomous
B) Venture
C) Control
D) Empowerment
E) Proactive

Question 48

Which of the following is an example of a partnering strategy?

A) Ongoing measurement programs
B) Alignment of company and intermediary goals
C) Developing intermediaries to deliver service quality
D) Changing to a cooperative management structure
E) Providing needed support systems

Question 49

Electronic media is a less efficient means for service delivery than interpersonal distribution.

Question 50

Which of the following intermediary-management strategies has the highest potential to be effective?

A) Partnering strategy
B) Venture strategy
C) Control strategy
D) Empowerment strategy
E) Proactive strategy

Question 51

By having a worldwide reservation system and allowing each agency to develop its own customer-oriented service processes, Hertz Rent A Car is using a(n) _____ strategy.

A) Partnering
B) Venture
C) Control
D) Empowerment
E) Proactive

Question 52

A(n) _____ strategy capitalizes on the skills and strengths of both service principal and service intermediary and engenders a sense of trust that improves the relationship.

A) Partnering
B) Venture
C) Control
D) Empowerment
E) Proactive

Question 53

One of the challenges inherent in distributing services through electronic channels is the fact that customers are active, not passive and must be enticed.

Question 54

A service principal that wanted to adopt an empowerment strategy should:

A) Help intermediaries develop customer-oriented service processes
B) Develop intermediaries to deliver service quality
C) Adopt a cooperative management structure
D) Provide needed support systems
E) Do all of the above

Question 55

Most people who buy franchises view the franchise as a way to get rich quickly.

Question 56

Franchising works well with services that can be standardized and virtually duplicated.

Question 57

Brokers are short-term representatives of buyers and sellers.

Question 58

Measurement programs are used by franchisers as a(n) _____ strategy.

A) Partnering
B) Venture
C) Control
D) Empowerment
E) Proactive

Question 59

The largest impediment to most direct service channels is the loss of economies of scale.

Question 60

There are a number of Fantastic Sam's hair salons around the U.S. Assume Fantastic Sam's developed worker teams in its franchised salons to hire, discipline and handle financial tasks such as deposits and audits. The result has been improved revenues, profits and employee morale. Fantastic Sam's would be using a(n) _____ strategy.

A) Partnering
B) Venture
C) Control
D) Empowerment
E) Proactive

Question 61

What is the major benefit derived from distributing through company-owned channels?

Question 62

Partnering strategies that capitalize on the skills and strengths of both the service provider and the intermediary engender a sense of trust that improves the relationship.

Question 63

What is the greatest impediment to a service provider using a company-owned channel of distribution?

Question 64

When are service providers likely to enter a service partnership?

Question 65

An empowerment strategy is effective when the service principal is the most powerful participant in the service channel.

Question 66

What is the most common type of distribution used by services?

Question 67

List the two types of agents.

Question 68

The Jen Cohen Band has a female lead singer with 2 back-up musicians. The group plays a lot of dates on college campuses as well as in small clubs along the eastern seaboard. The group is more interested in the music side of the business rather than developing contacts, finding jobs and negotiating contracts. For this purpose the group has hired the services of Auburn Moon, a talent agency out of Pennsylvania. If a college activities board wants to hire the Jen Cohen Band for a performance on its campus, it must use the services of Auburn Moon. Auburn Moon acts as an agent for the band and for several other similar acts. Discuss the benefits and challenges the Jen Cohen Band and someone who wanted to hire the band might experience as they use the services of an agent to book talent.

Question 69

Which of the strategies for effective service delivery through intermediaries is being used when the service principal is the most powerful participant in the channel and possesses unique services with strong consumer demand of loyalty?

Question 70

Jeff Leathers and Chuck Ellis operate three 9-hole golf courses called The Nightlinks in the Southeastern U.S. These golf courses are specifically designed for night playing and are described as 24-hour courses even though they are only open from 9 a.m. until midnight. It costs almost $5 million to build one of these golf courses, but the fees charged each player is $40 and there is usually a waiting list for night play. What challenges will Ellis and Leathers potentially face if they decide to franchise The Nightlinks? What challenges will The Nightlinks franchisee potentially face?

Question 71

Unlike the distribution of tangible products, there is no channel ambiguity with service distribution.

Question 72

In control strategies, the service principal helps intermediaries develop customer-oriented service processes.

Question 73

There are two challenges associated with the distribution of services through agents and brokers. List them.

Question 74

Jeff Leathers and Chuck Ellis operate three 9-hole golf courses called The Nightlinks in the Southeastern U.S. These golf courses are specifically designed for night playing and are described as 24-hour courses even though they are only open from 9 a.m. until midnight. It cost almost $5 million to build one of these golf courses. The fees charged each player is $40 and there is usually a waiting list for night play. What advantages would Leathers and Ellis receive if they decide to franchise their 24-hour golf course concept? What advantages would a potential franchisee receive?

Question 75

What two approaches are used when the principal and intermediaries engage in a partnering strategy?

Question 76

How do vandalism, penetration, eavesdropping and impersonation affect electronic channels?

Question 77

Which of the strategies for effective service delivery through intermediaries should be used when the principal is new or lacks sufficient power to govern the strategy using control strategies?

Question 78

Benetton is a clothing retailer. Imagine Iman's amazement when she saw two Benetton stores less than three blocks apart in New Orleans. What franchising challenge for the franchisee does this example illustrate?

Question 79

Not all services can be franchised. Briefly describe what kind of services can be franchised most effectively.