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CHAPTER 1

1.Education is an example of a/an _____________ service.C


a. people-processing
b. information-processing
c. mental stimulus-processing
d. possession-processing
e. physical-processing
2.A movie theater seat is an example of _____________.C
a. renting durable goods.
b. engaging customers closely in the service process.
c. renting portions of a larger physical entity.
d. the centrality of time to services.
3.There are several reasons why the marketing services sector is
increasing in almost all countries around the world. Which of the
following is not one of the contributing reasons? D
a. The knowledge-based industries are growing.
b. Countries are less dependent on agriculture.
c. Some manufacturing firms are now focusing on marketing
services as well.
d. The construction and manufacturing industries are booming.
4.The following are all business trends transforming service markets
except ____________.C
a. a push to increase shareholder value.
b. growth of franchising.
c. new agreements on trade in market services.
d. focus on quality and customer satisfaction.
5. The two considerations used
____________ and ____________.D

to

categorize

a. promotion versus place; price versus product


b. place versus time; people versus ideas
c. place versus people; time versus money
d. people versus possession; tangible versus intangible

service

are

6.Customers being turned down or having to wait is an implication


of which aspect of services? D
a. People may be a part of the service experience.
b. Intangible elements usually dominate value creation.
c. Services are often difficult to visualize and understand.
d. Most services cannot be inventoried.
7.Which of the following is an example of co-production? A
a. Withdrawing from ATM.
b. Eating fast-food.
c. Buying a stereo.
d. Selling items on e-Bay.
CHAPTER 2
1. Tangible characteristics that customers can evaluate prior to
purchase are termed ______A______.
a. search attributes
b. experience attributes
c. credence attributes
d. capital attributes
2.An example
____D_________.

of

service

high

in

credence

attribute

is

a) extreme sports
b) vacation
c) spa
d) surgery
3. The key concepts in the pre-purchase stage include all of the
following, except ______C______.
a. servuction system
b. evoked set
c. zone of tolerance
d. credence attributes
4. The three stages in the consumer decision making process are
____________, ____________, and ____________.D
a. pre-awareness stage, pre-purchase, purchase stage
b. pre-purchase stage, awareness stage, post-purchase stage
c. service encounter stage, pre-purchase stage, post-purchase stage
d. pre-purchase stage, service encounter stage, post-purchase stage

5. The pre-purchase stage begins with ______D______.


a. perceived risk
b. moments of truth
c. evoked set
D. need arousal
6. Characteristics that customers find hard to evaluate even after
consumption are termed _____C_______.
a. search attributes
b. experience attributes
c. credence attributes
d. satisfaction attributes
7. Consumer preferences for involvement in the service process may
reflect which of the following factors? D
a. Variability in price structures.
b. Willingness to travel to a service facility.
c. Desire to be served by employees face-to-face.
d. (b) and (c) only.
8. In the theater metaphor, the elements include all of the following,
but _______A_____.
a. positions
B. roles
C. scripts
D. personnel

CHAPTER 3
1.A customer-driven services marketing strategy includes all of the
following, EXCEPT ____C________.
a. customer analysis
b. analyzing market segments
c. handling customer complaint
d. competitor analysis
2. _______D_____ is composed of a group of buyers who share
common
characteristics,
needs,
purchasing
behavior,
or
consumption patterns.

a. Target class
b. Class
c. Focal segment
d. Market segment
3. A____C________ is one that a firm has selected from among those
in the broader market and may be defined on the basis of several
variables.
a. general segment
b. segmentation field
c. target segment
d. mass customization
4. KFC has determined that consumers' taste preferences differ
according to the region of the country in which they live. The firm
has segmented its market on the basis of: C
A) demographics.
B) corporate variables.
C) geographics.
D) psychographics.
E) behavioristics.
5. Which of the following is NOT one of the four basic focus
strategies? D
a. Service focused
b. Unfocused
c. Fully focused
d. Refocused
6. Which of the following is NOT one of the four principles of writing
a good positioning statement? A
a. Competitive advantage.
b. Point of difference.
c. Reason to believe.
d. Frame of reference.
7. Which of the following strategy is suitable for McCafe? A
a. Service focused
b. Unfocused
c. Fully focused
d. Refocused
CHAPTER 4

1. _____C______ is not a facilitating service.


a. Information
Billing

b. Order taking

c. Marketing theories

d.

2. ____B________ augment the core product, both facilitating its use,


and enhancing its value and appeal.
a. Core products
b. Supplementary services
c. Delivery processes
d. Conditional services
3. ______B______ represent a special type of order taking that entitles
customers to a specific unit of service.
a. Suggestions
b. Reservations
c. Trackers
d. Repossessions
4. Which of the following is NOT considered an example of
hospitality element? C
a. Greeting.
b. Toilets and washrooms.
c. Advice.
d. Food and beverages.
5. Which of the following is NOT one of the ways to build strong
brands? C
a. Dare to be different from competitors.
b. Determining their fame by creating a unique competitive
advantage.
c. Building a parent brand.
d. Fostering an emotional connection with the customers.
CHAPTER 5
1. When customers visit the service site, which factor(s) must be
considered in designing the service?D
a. How expensive the service is?
b. Convenience of the location.

c. Operational hours. d.
B and C only.
2. A truck stop is a good example of a ____D________.
a. centralized control center.
b. single-source facility.
c. k-minus strategy.
d. multi-purpose facility.
3. The interesting innovations for service delivery arising from the
Internet include all of the following EXCEPT _____B________.
a. Multi-channel banking without branches.
b. DVDs that can store huge amounts of information.
c. Usage of voice recognition technology that allows customers to
give information and request service by speaking into a microphone.
d. Smart card containing a microchip acting as an electronic purse
containing digital money.
4. Integrating mobile devices into the service delivery infrastructure
can be used as a means to ____________ services, ____________
customers to opportunities or problems, and ____________
information in real time to ensure that it is continuously accurate
and relevant. A
a. access; alert; update
b. complement; alert; conceal
c. access; attract; conceal
d. access; guide; conceal
5. Franchisors usually seek to exercise control over all aspects of the
service performance through tightly defined ___D_________.
a. service standards.
b. procedures.
c. scripts.
d. all of the above.
CHAPTER 6
1.Which of the following is NOT an objective for service pricing? B
a. Build supply.
b. Build demand.
c. Seek profit.
d. Cover costs.

2.Which of the following is NOT a firm that uses dynamic pricing? B


A.
B.
C.
D.

Eagles.
University of Wollongong
Tickets.com.
All of the above firms use dynamic pricing.

3.Which of the following is the best example of a service industry


that utilizes price complexity? C
A. Fastfood.
B. Education.
C. Cellular phone.
D. Moving/transportation.
E. Roofing.
4._____B_______ refers to the practice of price discrimination.
a. Critical ratio pricing
b. Dynamic pricing
c. Collective pricing
d. Fixed pricing
5. ____D________ recognizes that resource expenses are linked to the
variety and complexity of goods and services produced and not just
to their physical volume.
a. Variable cost
b. Fixed cost
c. Activity-based costing
d. Semi-fixed cost
6. Which of the following intensifies price competition? B
a. Non-price-related costs of using competing alternatives are high.
b. Wider distribution of competitor and/or substitution offers.
c. Personal relationships have been established.
d. Switching costs are high.
7. Revenue management is the most effective when applied to firms
characterized
by
all
the
following
conditions
EXCEPT
______D________.
a. perishable inventory
b. relatively fixed capacity
c. varying customer price sensitivity
d. fixed inventory

8. Which of the following is NOT an example of a non-physical


fence? C
a. Time or duration of use.
b. Group membership.
c. Service level.
d. Location of reservation.
CHAPTER 7
1. The CEO of Commonwealth Bank identifies the following
necessary component for direct marketing to be effective: E
A) a well-trained sales force
B) inbound telephone marketing
C) an online presence
D) use of new digital direct marketing technologies
E) a good customer database
2.Which of the following would be classified under generality in
intangibility?
A.
B.
C.
D.

Safety.
A hamburger.
An airline seat.
Expert advice.

3. Any activity designed to build good relations with a company's


various publics by obtaining publicity, building corporate image or
handling unfavorable rumors is known as: B
A) sales promotion.
B) public relations.
C) publicity.
D) personal selling.
E) direct marketing.
4. ____D______ technology facilitates the rise of user- generated
content.
A.
B.
C.
D.

Podcasting
Narrowcasting
TiVo
Web 2.0

5. The sending of unwanted or unsolicited email messages is known


as: D
A) whamming.
B) instrusion.
C) invasion.
D) spamming.
E) all of the above
6. Which of the following is not a role played by service marketing
communications? C
a. Add value through communication content.
b. Facilitate customer involvement in service production.
c. Positioning to attract investors.
7. One approach recommended by advertising experts to train
customers is to ________C____.
a. train employees like customers
b. use radio advertising
c. show service delivery in action
d. design palpable service environments
8. Which of the following is NOT one of the four problems for
marketers seeking to promote a services benefits? A
a. Distribution.
b. Abstractness.
c. Generality.
d. Mental impalpability.
9. Advertisements based on ____________ strategies are often
perceived as more informative than ____________ advertisements. A
a. visualization; text-only
b. expert; power
c. utilitarian; text-only
d. visualization; expert
10. Which of the following is NOT a common educational and
promotional objective in service settings? D
a. Build awareness of and interest in an unfamiliar service or brand.
b. Reposition a service relative to competing offerings.
c. Familiarize customers in advance with service processes and their
use.
d. Encourage trial of competing products.

CHAPTER 8
1. The line of _____D_______ divides front-stage activities from
backstage activities.
a. service standards and scripts
b. physical evidence
c. internal physical interaction
d. visibility
2, Service process redesign efforts typically focus on achieving all
EXCEPT which of the following key performance measures? D
A. Reduced number of service failures.
B. Reduced cycle time.
C. Enhanced productivity.
D. Increased profitability.
3.Blueprinting is a more complex form of _____B_______.
a. linear graphing
b. flowcharting
c. non-linear graphing
d. cluster analysis
4. Service blueprints ___C_________, and how these are supported by
backstage activities and systems.
a. enhance services cape features such as furniture and lighting
b. complicate employee handling of special requests
c. clarify the interactions between customers and employees
d. diminish customer complaining capacity
5. Which of the following is NOT a key component of a service
blueprint? A
a. Line of transference.
b. Line of interaction.
c. Line of visibility.
d. Front-stage actions by customer contact personnel.
6. Server ____B________ ensure that service staffs do things correctly,
as requested, in the right order, and at the right speed.
A. kanbans

B. poka-yokes
C. banzais
D. sudokus
7.Service process redesign can be categorized into all EXCEPT which
of the following types? D
a. Getting rid of non-value adding steps.
b. Shifting to self-service.
c. Delivering direct service.
d. Separating services.
8. Marriage counseling is a service that requires a _____C_______
level of participation from customers.
a. minimal
b. high
c. low
d. absolute
CHAPTER 9
1. Which of the following is NOT one of the conditions that fixedcapacity firms may face? D
A. Excess capacity.
B Demand exceeds desired capacity.
c. Demand and supply is well-balanced.
d. Ideal demand exceeds capacity.
2. Which of the following is the correct action to be taken by a firm
that wants to reduce demand and has insufficient capacity? D
a. Take no action.
b. Consider override for most desirable segments.
c. Consider priority systems for most desirable segments.
d. Increase prices or encourages use in other time slots.
3. All of the following questions ask about demand patterns and
their underlying causes EXCEPT _______C_____.
a. Does demand level follow a predictable cycle?
b. What are the underlying causes of these cyclical variations?
c. What is the demand for competitors products?
d. Can demand for a particular service over time be disaggregated
by market segment?
4. Which one of the following is unwholesome demand? D
a. Watching adventure movies
b. Reading books
c. Playing soccer

d. Drink driving
5. Marketing mix strategies can be used to shape demand in all
ways EXCEPT _______A_____.
a. modifies mode of delivery.
b. use price and other costs to manage demand.
c. change product elements.
d. use promotion and education.
6. Which of the following is NOT one of the alternative queuing
configurations discussed? A
a. Single line/single servers at sequential stages.
b. Multiple lines to single servers (snake).
c. Parallel lines to multiple servers.
d. Designated lines to designated servers.
7. New York Citys 911 service uses education to ____C__________.
a. attracts new callers.
b. show callers the peak periods.
c. discourages undesirable demand.
d. channel calls to medical services.
CHAPTER 10
1. Service environments, also called _______B_____, relate to the
style and appearance of the physical surroundings and other
experiential elements encountered by customers at service delivery
sites.
a. service planes
b. servicescapes
c. service boxes
d. service vaults
2. In environmental psychology the typical outcome variable is
____________ or ____________ of an environment. D
a. service; re-purchase
b. control; reproach
c. control; avoidance
d. approach; avoidance
3. Which one of the following is an ambient condition? D

a. layout
b. equipment
c. signage
d. music
4. Which of the following is NOT one of the dimensions of the service
environment? D
a. Exterior facilities.
b. General infrastructure.
c. Store layout.
d. Location.

5. Which of the following fragrances would you use to boost


energy levels and help customers feel happy and rejuvenated? A
a. Lemon.
b. Black pepper.
c. Lavender.
d. Rose.
CHAPTER 11
1.Service employees are important to customers and competitive
positioning because the front line _____A_______.
a. is the most visible part of the firm
b. is often the first to deal with customer complaints
c. is better trained in dealing with customers than are managers
d. all of the above
2. Emotional labor is when employees _____B_______.
a. finds it hard to be emotional because they are too overworked
b. experience a gap between what they feel inside, and what
management expects them to display to their customers
c. has to keep their emotions under control at the workplace
d. feel happy all the time because they enjoy their job
3. The Cycle of Failure includes all of the following, EXCEPT
____C________.
a. emphasis on rules
b. emphasis on attracting new customers
c. adequate pay and job security

d. low skill levels


4. From the customers perspective which of the following is the
most important aspect of service? D
a. Managements responsiveness to occurrences of failure.
b. Timely delivery of service.
c. Efficient handling of special requests.
d. The encounter with service staff.
5. Training is most effective at reducing ____A________.
a. person/role stress
b. organization/client conflict
c. inter-client conflict
d. intra-organizational conflict
6. Outcomes of the Cycle of Failure for firms include ____________
and ______B______.
a. low service quality; low employee turnover
b. low service quality; high employee turnover
c. high service quality; low employee turnover
d. high service quality; high employee turnover
7. Which of the following are companies that engage in a Cycle of
Success more likely to have? D
a. Happier employees.
b. More loyal customers.
c. Higher profit margins.
d. All of the above.
8. Employees should be trained in all of these areas EXCEPT
____B________.
a. organizational culture
b. organizational revenue
c. service knowledge
d. product knowledge
9. 5. If a Nordstrom sales associate replaces shirts at no cost to the
client, it is an example of ____C________.
a. centralized decision-making
b. service theft

c. employee empowerment
d. rule setting
CHAPTER 12
1.In the worksheet for calculating customer lifetime value, sources
of annual revenues include all of the following EXCEPT
_____D________.
a. annual account fee
b. sales
c. service fees
d. account management
2. Which of the following is NOT one of the strategies for developing
loyalty bonds with customers? B
a. Deepening the relationship.
b. Lag-based bonds.
c. Social bonds.
d. Structural bonds.
3. Which of the following is NOT one of the key strategies used to
reduce customer defections? A
a. Eliminate nuisance customers.
b. Address key churn drivers.
c. Increase switching costs.
d. Analyze customer defections and monitor declining accounts
4. Which of the following is NOT one of the key strategies in CRM
process? D
a. Strategy development process.
b. Value creation process.
c. Multi-channel integration process.
d. Satisfaction process.
5. Which of the following is NOT one of the advantages to
incremental profits of a loyal customer? B
a. Profit from increased purchases.
b. Profit from decreased advertising.
c. Profit from reduced operating costs.
d. Profit from referrals to other customers.
6. According to the wheel of loyalty, steps to building a foundation
of loyalty include all of the following EXCEPT ______A_______.

a. delivering customer satisfaction


b. delivering service quality
c. acquiring customers who fit the core value proposition
d. managing the customer base through effective tiering
7. Firms should not assume that the right customers are always
the ______B_____.
a. ones that are easily delighted
b. high spenders
c. average income earners
d. least costly to acquire
8. Which of the following are the three main zones of the
satisfaction-loyalty relationship? B
a. Direction, institution, affluence.
b. Defection, indifference, affection.
c. Detection, affluence, rejection.
d. Direction, intention, rejection.
CHAPTER 13
1. Which of the following is NOT one of the guidelines provided for
the Frontline on how to handle customer complaints? C
a. Consider compensation.
b. Keep the customer informed of progress.
c. Explain the problem from the service firms point of view.
d. Act fast.
2. All EXCEPT which of the following are reasons that service
guarantees are powerful tools for both promoting and achieving
service quality? A
a. Guarantees reduce consumer complaints, increasing customer
satisfaction and information from customers.
b. Guarantees force firms to focus on what their customers want and
expect in each element of the service.
c. Guarantees set clear standards, telling customers, and employees
alike what the company stands for.
d. Guarantees build market muscle by reducing the risk of the
purchase decision, and developing long-term loyalty.
3.Which of the following is NOT one of the options customers take
when they are dissatisfied with a service encounter? B

a. Take legal action.


b. Vent their anger on the service equipment.
c. Complain to the service firm.
d. Circulate negative feedback word-of-mouth.
4. On an average, what percentages of customers complain when
they are unhappy with service? B
a. 0 percent.
b. 510 percent.
c. 1525 percent.
D. 6075 percent.
5 The ____________ refers to the sometimes-observed effect, that
customers who experience a service failure, and then have it
resolved to their full satisfaction are more likely to make future
purchases than are customers who have experienced no problem in
the first place. D
a. referent renewal paradox
b. referent contribution paradox
c. referent acquisition paradox
d. service recovery paradox
6. Effective service recovery procedures should be ____________,
____________, ____________, and ____________. C
a. proactive, engaged, universal, empowered
b. planned, engaged, universal, trained
c. proactive, planned, trained, empowered
d. trained, engaged, flexible, spontaneous
CHAPTER 14
1. The ____________ is the difference between what service providers
believe customers expect, and customers actual needs and
expectations. C
a. interpretation gap
b. standard gap
c. knowledge gap
d. service quality gap
2. Which of the following is NOT one of the six service quality gaps?

B
a. The knowledge gap.
b. The proportion gap.
c. The policy gap.
d. The delivery gap.
3. ____________ and ____________ typically measure satisfaction with
all major customer service processes and products. D
a) Total market surveys; ordinary surveys
b) Regular surveys; ordinary surveys
c) Regular surveys; reverse surveys
d) Total market surveys; annual surveys
4.Which of the following is the best example of the source of a
delayed flight caused by procedures? A
a. Cutoff too close to departure time.
b. Late cabin crews.
c. Late cabin cleaners.
d. Oversize baggage.
5.Which of the following is the best example of the source of a
delayed flight caused by front-stage personnel? B
a. Air traffic.
b. Late food service.
c. Late fuel.
d. Gate agents cannot process passengers quickly enough.
6.The Return on Quality approach is based on all of the following
assumptions EXCEPT
C
a) Not all quality expenditures are equally justified.
b) It is possible to spend too much on quality.
c) Quality is imperative so we need to put our resources behind it.
d) Quality is an investment.
7.Which of the following is one of the customer-driven approaches to
improving productivity? C
a. Ask customers not to use third parties.
b. Limiting customer involvement in production.
c. Changing the timing of customer demand.
d. Reducing backstage elements of production.
8. Which of the following is NOT a broad dimension of service

quality? D
a. Tangibles.
b. Reliability.
c. Responsiveness.
d. Transcendence.
9. Competence and courtesy are aspects of ____C_______.
a. tangibles
b. reliability
c. responsiveness
d. transcendence

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