Eastern Michigan University

MKT 510A

Chapter 11-Designing and Managing Services

TRUE/FALSE Questions

1)A service is any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything.  

2. A pure tangible good is an offering that may consist of the good plus some accompanying services.  

3. Characteristics a buyer can evaluate before purchase are called search qualities.  

4. The fact that services are used or consumed at the time of their creation is an example of the service characteristics of intangibility.  

5. Because products are generally higher in experience and credence qualities than services, consumers will generally rely more on word of mouth than on service firm advertising.  

6. Experience qualities are characteristics a buyer can evaluate after purchase.  

7. Experience qualities are characteristics a buyer normally finds hard to evaluate even after consumption.  

8. The quality of services depends upon the provider, location, circumstances, and time. This fact illustrates the service characteristic of variability.  

9. When a Chinese hotel chain leaves cards on its check-in desk for consumers to comment on the service they received, it is an example of one way to deal with service intangibility.

10. The fact that services are generally consumed as they are produced describes the service characteristic of inseparability.  

11. Hiring part-time employees to meet peak demand is a demand-side strategy for improving the match between service demand and supply.  

12. Billing errors constitute a core service failure that can lead to customer switching behavior.  

13. Internal marketing describes the work a company does to train and motivate its employees to serve customers well.  

14. A service company can differentiate itself by designing a better and faster delivery

system.  

15. If a day care provider thinks that the parents want better food, when in fact the parents are more concerned about security, the provider will likely be subject to a gap between customer perception and management perception of service quality.  

16. When the economy is strong, many low-end service workers in the fast-food industry are less motivated to do a good job because they can quickly find another job. If such a worker has poor people skills or cannot count the amount of change to return correctly, the company will experience a gap between service-quality specifications and service delivery.  

17. When deciding whether they have received good service, customers are most likely to compare their expected service ideas with what the service they perceive they actually received.  

18. For more and more companies, the key to customer satisfaction is employee satisfaction.  

19. When a service company provides installation, training, and maintenance as a part of its product, it is offering value-augmenting services.

20. Providing post-sale services to property buyers is not the main responsibility of real estate companies.  

Multiple Choice Questions

21. Best Buy will often try to sell a buyer of a high-end television monitor an extended warranty. This is an example of selling a          .

1. pure tangible good
2. tangible good with accompanying services
3. hybrid
4. pure service
5. major service with accompanying minor goods and services

22. Which of the following is the best example of pure service?

1. A garden maintenance service
2. A car repair shop.
3. A weight loss clinic that provides the consumer with its own brand of food.
4. A movie theater.
5. An amusement park.

23. Mr. Xie and his family took a vacation trip to Beijing. While there, they bought souvenir T-shirts and hats to take home to friends who didn’t have the opportunity to go. The experience of the

Xie is an example of which offering category?

1. A pure tangible good.
2. A tangible good with accompanying services.
3. A hybrid.
4. A pure service.
5. A major service with accompanying minor goods and services.

24. For ¥50 a day, Chen Yuan will go to your home and dust, clean and keep an eye on

your house for you while you are on vacation. The service Chen Yuan provides is an example of a   .

1. pure tangible good
2. tangible good with accompanying services
3. hybrid
4. pure service
5. major service with accompanying minor goods and services

25. Characteristics a buyer can evaluate before purchase are called                                  .

1. search qualities
2. experience qualities
3. credence qualities
4. differentiation qualities
5. productive qualities

26.                             are characteristics a buyer can evaluate after purchase.

1. Search qualities
2. Experience qualities
3. Credence qualities
4. Differentiation qualities
5. Productive qualities

27. In the absence of noticeable and rapid healing, Su Le is not sure whether she got good service by her physician. Medical services are a good example of this type of difficulty—

                           —where the consumer finds hard to evaluate even after consumption.

1. search qualities
2. experience qualities
3. credence qualities
4. differentiation qualities
5. productive qualities

28. On the continuum of evaluation of service, which of the following would be highest in credence quality?

1. A nail fill-in job.
2. Removal of your wisdom teeth.
3. A breakfast at Mcdonald’s.
4. A river trip with China Travel Service.
5. A day care provider.

29. On the continuum of evaluation of service, which of the following would be highest for search quality?

1. A nail fill-in job.
2. Clothing.
3. A breakfast at KFC.
4. A river trip with China Travel Service.
5. A day care provider.

30. Huaxia billboards advertise clean restrooms at SINOPEC gasoline stations, with the idea that clean restrooms imply the entire operation is clean, safe, and customer-oriented. Advertising a clean restroom is one method used to manage the service characteristic of

                           .

1. inseparability
2. intangibility
3. inconsistency
4. perishability
5. variability

31. Holdsworth Contracting operates on the exclusive northwest side of the city. Holdsworth has all employees wear clean khaki uniforms on the job. Clean khaki uniforms imply that since the company cares about how its employees look, it will also do the job with careful attention to details for the clients. This is one way to deal with the characteristic             of service.

1. intangibility
2. inseparability
3. inconsistency
4. variability
5. perishability

32. A museum in China has a hands-on section where guests can feed horseshoe crabs, touch hermit crabs, and try their hand at catching “sand fleas.” The hands-on section of the museum is a good way to deal with the           characteristic of service.

1. intangibility
2. inseparability
3. inconsistency
4. variability
5. perishability

33. The fact that services are used or consumed at the time of their creation is an example of the service characteristic of              _.

1. intangibility
2. inseparability
3. inconsistency
4. variability
5. perishability

34. Disney advertises a number of reasons why you should frequent its resorts and amusement parks. One reason is the excellent service provided by its “cast.” This is an example of the service characteristic of   __.

1. intangibility
2. inseparability
3. reliability
4. variability
5. perishability

35. When Liang Dashan goes into Yummy Yummy, a local restaurant that features fresh vegetables and good rice, he sometimes gets his food fast and hot. Other times his order is slow, and his food arrives at his table cold. If Wang Zetian wants a special order, like an extra plate of stir-fried mixed vegetables, he never knows how long he’ll have to wait for his food. Wang is experiencing the service characteristic of         .

1. intangibility
2. inseparability
3. variability
4. autonomy
5. perishability

36. The quality of services depends upon the provider, location, circumstances, and time. This fact illustrates the service characteristic of             _.

1. variability
2. inseparability
3. intangibility
4. consumability
5. perishability

37. Which of the following is NOT a prescribed way of dealing with the variable nature of service provision?

1. Careful employee recruiting.
2. Making pricing consistent at all outlets.
3. Creating a service blueprint.
4. Building morale and enthusiasm among employees.
5. Monitoring customer satisfaction.

38. A resort up the mountains from Guilin City in Southwest China has begun to market summer vacation packages to people who like to take nature hikes and enjoy the mountain vistas. This is one way to deal with the         characteristic of service.

1. perishability

2. variability
3. inconsistency
4. inseparability
5. intangibility

39. Tang goes to Chinese Gourmet for lunch because their lunch specials are ¥12.00,

although the same meal after 4 p.m. costs ¥20.00. Chinese Gourmet probably uses

different prices at different times as a strategy for dealing with the                                    characteristic of services.

1. perishability
2. variability
3. inconsistency
4. inseparability
5. intangibility

40. Making the people portion of a service offering work involves careful attention to all of the following EXCEPT:

1. above-industry pay for employees.
2. selection and training of employees.
3. competence of the employees.
4. goodwill and a caring attitude among employees.
5. employees that take the initiative.

41. Which of the following is NOT a demand-side strategy for improving the match between service demand and supply?

1. Use differential pricing to shift demand.
2. Cultivate off-peak demand to build sales.
3. Introduce peak-time efficiency to focus employee activity.

4. Develop complementary services to provide alternatives for waiting customers.
5. Install reservation systems to manage demand levels.

42. Which of the following is NOT a supply-side strategy for improving the match between service demand and supply?

1. Introduce peak-time efficiency to focus employee.
2. Develop complementary services to provide alternatives for waiting customers.
3. Hire part-time employees to meet peak demand.
4. Plan facilities for future demand.
5. Share services with other providers.

43.   marketing describes the work done by the company to train and motivate its employees to serve the customers well.

1. Interactive
2. External
3. Consultative
4. Internal
5. Relationship

44. Zhao is great at providing needed assistance on the phone with students in her online degree program. This is an example of marketing.

1. interactive
2. external
3. internal
4. consultative
5. relationship

45. For an adult day care provider, the primary service package includes                                     .

1. watchful care and physical facilities
2. aerobics and movement instruction
3. computer lessons
4. music appreciation classes
5. an on-staff hair stylist to cut the guest’s hair

46. A situation in which a day care provider thinks that parents want better food, when in fact parents are more concerned about their children’s security is an example of a gap between     .

1. consumer expectation and management perception
2. management perception and service quality perception
3. service quality specifications and service delivery
4. consumer expectations and service delivery
5. service delivery and external communications

47. Dr. Li was trying to register students for the new school term. Unfortunately, there was no one there to answer the phone, and Dr. Li spent more time taking messages for the other faculty members than she would have liked. Several students were disgruntled by their long wait in line. This is an example of a gap between                                                                                                                                           .

1. consumer expectation and management expectation
2. management perception and service quality perception
3. service quality specifications and service delivery
4. consumer expectations and service delivery
5. service delivery and external communications

48. Rent-A-Wreck rents older cars for much lower rates than the competitors charge to rent their newer cars. The brochures for Rent-A-Wreck show cars that look clean and no more than 5 years old, but Pascal is disappointed to find that they provide him with a dinged-up 1998 Toyota Camry when he orders a mid-size. This is an example of a gap between .

1. consumer expectation and management expectation
2. management perception and service quality perception
3. service quality specifications and service delivery
4. consumer expectations and service delivery
5. service delivery and external communications

49. Wu Long is a part-time, night MBA student who works for an international shipping firm. He is disappointed when he gets a “B” in his international marketing course, and in a confrontation with the professor, tells him, “you know it’s not my fault that I had to travel so much this semester.” This dissatisfaction is a result of the service quality gap of

                           .

1. perceived service and expected service
2. service delivery and internal communications
3. management perception and service-quality perception

4. service-quality specifications and service delivery
5. service delivery and external communications

50. Which of the following is NOT a method typically used by a service provider to monitor how consumers perceive its service quality?

1. Comparison shopping.
2. Customer surveys.
3. SWOT analysis.
4. Service-audit teams.
5. Secret shoppers.

51. Which of the following is NOT  about dissatisfied customers, according to the text?

1. Consumers generally complain because they feel it will be worth their effort.
2. Customers are dissatisfied with their purchases about 25 percent of the time.
3. Only about 5 percent of dissatisfied customers actually complain to the company.
4. The average dissatisfied customer complains to eleven people.
5. When consumers complain to companies, they only feel they had the problem resolved satisfactorily about half the time.

52. Which of the following is NOT  of customer complaints and repurchasing?

1. Of customers who register a major complaint, 34 percent will buy again from the company if the complaint is resolved.
2. Of customers who register a minor complaint, 52 percent will buy again from the company if the complaint is resolved.
3. If their major complaint is resolved quickly, 52 percent of customers will buy again from a company
4. Because only 5 percent of consumers actually complain, responding to them is not an effective use of company resources.
5. If their minor complaint is resolved quickly, 95 percent of customers will buy again from a company.

53. Service missteps can hurt customer relationships. When something goes wrong, the company should listen to the customer, apologize when appropriate, offer a solution, and follow up. These are major steps in   .

1. the “12-step” program for better service
2. meeting company goals
3. good service recovery
4. making the sale
5. after-sale service

54. When a service company provides installation, training, and maintenance as part of its product, it is offering    .

1. value-augmenting services
2. dependability services
3. core services
4. a warranty
5. facilitating services

55. When considering the purchase of a service or product, industrial customers are likely to worry about all of the following EXCEPT:

1. the status related to the purchase.
2. out-of-pocket maintenance costs.
3. lost time.
4. reliability.
5. failure frequency.

56. Sears sometimes offers promotional free delivery and set-up for appliances that cost more than $750. This is an example of _.

1. value-augmenting services
2. facilitating services
3. service contracts
4. post-sale service strategy
5. lifecycle cost

57. Sun decides he can afford a $200 monthly car payment. The saleswoman steers him

toward a new 2-door Hyundai Accent and tells him she can do the deal within Sol’s budget, and will even include an extended warranty that lengthens the standard warranty by 2 years and lowers the deductible for some repairs. This extended warranty is an example of         .

1. value-augmenting services
2. facilitating services
3. service contracts
4. post-sale service strategy
5. lifecycle cost

 Essay Questions

58. Many talented programmers in Zhongguancun Science Park of Beijing do not have the requisite social or grooming skills to work closely with their busy and more formal managers. Bowers Employee Success Service teaches a four-hour class on grooming and dress-for-success. Use the four characteristics of service to describe this teaching service and provide one method that can be used to reduce the problems associated with each characteristic.

59. Draw, label, and explain the Continuum of Evaluation for Different Types of Products. What is a product that is high in search qualities and why? What is a product that is high in experience qualities and why? What is a product that is high in credence qualities and why?

60. In a short essay, define internal marketing, external marketing, and interactive marketing in terms of a dog grooming service.

61. Kang gets lucky enough to be accepted as a new owner of a Pizza Hut franchise in Changsha, Hunan Province. Explain five gaps that could cause unsuccessful service delivery at her new store.

62. A Chinese auto agent is looking to enhance its reputation for providing excellent service. Ma Cheng, Marketing Manager advises how to provide the company with excellent product support services—because selling cars is more than “moving metal,” it also involves providing customers with a service bundle.

Mini-Cases

Mini-Case 11-1

Horizons Unlimited is a medium-sized travel agency that wants to become larger. Its slogan is, “You dream. We deliver. We plan. You play.” Currently, it offers customers travel bags, personal electronic organizers, and city maps as ancillary products to the trips it arranges. The staff dresses informally. A gregarious soft-spoken receptionist takes incoming calls and greets each caller like a long-lost friend. The travel agency makes every single arrangement for the traveler down to the slightest detail, and even provides travelers with a cellular phone to call the agency if they have any problems on their trip.

63. Refer to Mini-Case 11-1. The travel agency is an example of a                                       .

1. pure service
2. major service with minor goods and services
3. hybrid