A professor, dissatisfied with a product he's purchased, bad mouths the product to his class, resulting in decreased market share (since the students believe everything he tells them). The manufacturer suffers:
A) an internal failure cost.
B) an external failure cost.
C) a prevention cost.
D) an appraisal cost.

Question

Quizplus · Accepted Answer

This scenario represents an external failure cost, as the negative word-of-mouth from the professor led to decreased market share and ultimately lost sales for the manufacturer.

A Professor, Dissatisfied with a Product He's Purchased, Bad Mouths