Chapter 4: True/False

Question 1

Competitive advantage denotes a firm’s ability to achieve market and financial superiority over its competitors.

Answer 1

True

Question 2

Over time, order qualifiers eventually become order winners

Answer 2

False

Question 3

Experience attributes are those that a customer can determine prior to purchasing the goods and/or services

Answer 3

False

Question 4

Credence attributes are any aspects of a good or service that the customer must believe in, but cannot personally evaluate even after purchase and consumption

Answer 4

True

Question 5

Customers seek and rely more on information from personal sources than from non-personal sources when evaluating services prior to purchase

Answer 5

True

Question 6

Customers perceive lower risks when buying services than when buying goods

Answer 6

False

Question 7

Improvements in quality lead to lower costs

Answer 7

True

Question 8

A strategy of quality improvement usually leads to increased market share, but at a cost in terms of reduced short-run profitability

Answer 8

True

Question 9

Businesses offering premium quality goods usually have large market shares and were early entrants into their markets

Answer 9

True

Question 10

Time reductions in processes reduce costs, but increase the opportunity for mistakes and errors

Answer 10

False

Question 11

Flexibility allows companies to sell profitably at lower volumes

Answer 11

True

Question 12

Mass customization is being able to make whatever goods and services the customer wants as long as the volume demanded is sizeable

Answer 12

False

Question 13

Which markets to pursue and how best to compete in those markets are part of a large organization’s corporate strategy

Answer 13

False

Question 14

Operations design choices are the decisions management must make as to what product and service features should be offered in combination

Answer 14

False