Chapter 1
New Perspectives on Marketing in the Service Economy
Multiple Choice Questions
1. For-profit firms seek to achieve ____________ profits subject to ____________
constraints, although not-for-profit service suppliers seek to achieve ____________
profits subject to ____________ constraints.
a. social; financial; financial; social
b. social; financial; social; financial
c. financial; transactional; social; regulatory
d. financial; social; social; financial
e. transactional; social; limited; transactional
2. The acronym for the new North American classification system that includes services
is ____________.
a. NAFTA
b. NAICS
c. NACS
d. NACSS
e. NEICE
3. Service markets are shaped by all of the following except ____________.
a. government policies
b. social changes
c. global economic change
d. business trends
e. advances in information technology
4. A useful way to distinguish between goods and services is to place them on a
continuum from ____________ to ____________.
a. practical; impractical
b. tangible-dominant; intangible-dominant
c. low; high
d. reliable; unreliable
e. prepared; unprepared
5. Firms’ market offerings are divided into ____________ and ____________ elements.
a. core product; supplementary service
b. marketing; management
c. product; delivery
d. service; delivery
e. planning; delivery
6. Customers being turned away or having to wait is an implication of which aspect of
services?
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. Customers may be involved in co-production.
e. Most services cannot be inventoried.
7. The three additional Ps of services marketing that extend the original four Ps of
marketing are _____________, _____________, and _____________.
a. price; place; promotion
b. process; people; promotion
c. physical environment; process; people;
d. prosperity; process; promotion
e. physical environment; planning; process
8. Service employees should have which set of the following?
a. Positive attitude, technical skills, and analytical skills.
b. Positive attitude, leadership skills, and analytical skills.
c. Technical skills, leadership skills, and interpersonal skills.
d. Positive attitude, interpersonal skills, and technical skills.
e. Technical skills, leadership skills, and analytical skills.
9. What are the three management functions that are central to meeting the needs of
service customers?
a. Marketing, operations, and finance.
b. Marketing, operations, and human resources.
c. Marketing, finance, and accounting.
d. Marketing, finance, and operations.
e. Finance, accounting, and human resources.
10. Which one of the following is NOT one of the four broad categories of service?
a. People processing
b. Possession processing
c. Mental stimulus processing
d. Information processing
e. Involvement processing
True/False
ALSE
11. Businesses are outsourcing fewer tasks in order to focus on their core business. F
12. In most highly developed nations, services account for between two-thirds and three fourths
of the GDP. TRUE
13. Typically service jobs are not well-paid positions and require little education.FALSE
14. People processing, possession processing, mental stimulus processing, and
information processing make up the four broad categories of services.TRUE
15. In most possession-processing services, the customer’s involvement is usually
limited to dropping off the item that needs treatment, requesting the service,
explaining the problem, and returning later to pick up the item and pay the bill. T RUE
16. For mental-stimulus-processing, recipients must be physically present in the service
Factory. FALSE
17. In all cases of possession processing, production and consumption can be
described as inseparable.FALSE
18. Documenting performance, explaining what was done and why, and offering
guarantees are additional ways to reassure customers and reduce anxiety. TRUE
19. Other customers typically do not impact the satisfaction of other consumers in
service settings.FALSE
20. The appearance of buildings, landscaping, vehicles, and uniforms provide tangible
RUE
evidence of a firm’s service quality. T
Short Answer
21. What are the five broad categories within the non-ownership framework?
Rented good services, defined space and place rentals, labor and expertise rentals, Access to
shared physical environments, Access to and usage of systems and networks.
22. Define services.
Services are economic activities offered by one party to another, most commonly employing
time-based performances to bring about desired results in recipients themselves or in objects or
other assets for which purchasers have responsibility.
23. What are the eight common differences between products and services?
a.Most services products cannot be inventoried
b.Intangible elements usually dominate value creation
c.Services are often difficult to visualize & understand.
d.Customers may be involved by co-production
e.People may be part of service experience
f.Operational inputs and outputs tend to vary more widely
g.Time factor often assumes great importance
h.Distribution may take place through non-physical channels
24. Provide an example of a service that lies at each end of the tangible-dominant to
intangible-dominant spectrum.
Tangible:tailored clothing
Intangible: Internet banking
25. What are the three vital roles of promotion and education?
Providing needed information and advice, persuading target customers of the merits of
a specific brand or service products, and encouraging customers to take action at
specific times.
29. A movie theater seat is an example of _____________.
a. renting durable goods
b. closely engaging customers in the service process
c. renting portions of a larger physical entity
d. the centrality of time to services
e. differences in customer choice criteria
31. Which of the following is the best example of a supplementary service?
a. Appliance maintenance
b. Hotel room rental
c. Fast food consumption
d. House cleaning
e. Landscaping
32. Online educational programs offered by the University of Phoenix are an example of
_____________.
a. revolutionary products/services
b. collective products/services
c. additional services
d. supplementary services
e. core products/services
True/False
33. A typical university is a simple service organization that offers mainly educational
Services. FALSE
34. Less than 15 percent of service jobs around the world can currently be carried out
Remotely. TRUE
35. The Internet is transferring power from suppliers to customers, especially in
consumer markets. TRUE
36. IBM is a good example of a firm that has shifted from manufacturing intensive
operations to service intensive operations.TRUE
37. The best way to help customers visualize your service is to highlight
credentials/experience and educate consumers to make good choices.TRUE
Short Answer
38. Give an example of an industry where the Internet has transferred power from
suppliers to customers.
The travel industry.
39. Give an example of a government policy that has stimulated the transformation of a
service industry.
The smoking prohibition in restaurants and the limitation of trans fats in food preparation has
improved customer comfort and health measures in restaurants. This will encourage people to
go to have dinner out more often.
40. Give an example of an industry where production and consumption are separable.
Dry cleaning, lawn mowing, weather forecasting, etc.
41. Give an example of a service that offers labor and expertise rental.
Car repair, surgery, management consultancy, etc.
42. Give an example of a service that offers access to physical environments as a form of
rental.
Museums, theme parks, trade shows, gyms, zoos, ski resorts, golf courses, toll roads, etc.
