Exam 3 CH.12

Question 1

service

Answer 1

the result of applying human or mechanical efforts to people or
objects

• The service sector accounts for approximately 80 percent of U.S. economic output.

− Includes technology, financial services, health care, and retail.

• Manufacturing firms can point to service as a major factor in their success

Question 2

intangibility

Answer 2

the inability of services to be touched, seen, tasted, heard, or felt in the same manner that goods can be sensed

Question 3

search quality

Answer 3

a characteristic that can be easily assessed before purchase

Question 4

experience quality

Answer 4

a characteristic that can be assessed only after use

Question 5

credence quality

Answer 5

a characteristic that consumers may have difficulty assessing even
after purchase because they do not have the necessary knowledge or experience

Question 6

inseperability

Answer 6

he inability of the production and consumption of a service to
be separated; consumers must be present during the production

• Because consumers must be present during the production of services, they are actually involved in the production of the services they buy.
• Services normally cannot be produced in a separate location from where they are consumed.
• The quality of service that firms can deliver depends on the quality of their employees

Question 7

Heterogeneity

Answer 7

the variability of the
inputs and outputs of services, which causes services to tend to be less standardized and uniform than goods

• Standardization and training help
  increase consistency and reliability

Question 8

perishability

Answer 8

the inability of services to be stored, warehoused, or inventoried

• One of the most important challenges in many service industries is finding ways
  to synchronize supply and demand rather than suffer a total loss of revenue when there is no demand for full-price services

Question 9

reliability

Answer 9

the ability to perform a service dependably, accurately, and consistently

Question 10

responsiveness

Answer 10

the ability to provide prompt service

Question 11

assurance

Answer 11

he knowledge and courtesy of employees and their ability to convey trust

Question 12

empathy

Answer 12

caring, individualized attention to customers

Question 13

tangibles

Answer 13

the physical evidence of a service, including the physical facilities, tools, and equipment used to provide the service

Question 14

gap model

Answer 14

a model identifying five gaps that can cause problems
in service delivery and influence customer evaluations of service quality

• Gap 1: the gap between what customers want and what management thinks
  customers want
• Gap 2: the gap between what management thinks customers want and the quality specifications that management develops to provide the service
• Gap 3: the gap between the service quality specifications and the service that is
  actually provided
• Gap 4: the gap between what the company provides and what the customer is told it provides
• Gap 5: the gap between the service that customers receive and the service they want
• When one or more of these gaps is large, service quality is perceived as low, but as the gaps shrink, perceptions of service quality improve

Question 15

core service

Answer 15

the most basic benefit the consumer is buying

Question 16

supplementary services

Answer 16

a group of services that support or enhance the core service

• Firms may emphasize supplementary services to create a competitive advantage

Question 17

mass customization

Answer 17

a strategy that uses technology to deliver customized services on a mass basis

Question 18

place (distribution) strategy - service mix

Answer 18

Convenience – solutions that make shopping, order processing, and returns convenient for customers

− Number of outlets – intensity of distribution should meet, but not exceed, the target market’s needs
and preferences

− Direct versus indirect distribution – direct distribution or franchising for customized services, and indirect channels using independent intermediaries for standardized service packages

− Location – reveals the relationship between a target market strategy and distribution strategy

− Scheduling – an important factor for time-dependent service providers

Question 19

promotion strategy - service mix

Answer 19

Although promoting intangible services is more difficult than promoting tangible goods, marketers can try these four promotion strategies:

− Stressing tangible cues by using concrete symbols of the service offering

− Using personal information sources that consumers are familiar with (such as a
celebrity or real customers) in ads to simulate positive word-of-mouth communication

− Creating a strong organizational image across the service facility, the appearance of the service employees, and the tangible items associated with a service

− Engaging in post purchase communication to get feedback

Question 21

price strategy - service mix

Answer 21

In order to price a service, it is important to define the unit of service consumption.

• For services that are composed of multiple elements, one issue is whether pricing should be based on a “bundle” of elements or whether each element
  should be priced separately.

− In some cases, bundles may be more appealing and are simpler for the firm to administer.

− In other cases, consumers may prefer to choose individual options

Question 22

internal marketing

Answer 22

treating employees as customers and developing systems and benefits that meet their needs

Question 23

non profit organization marketing

Answer 23

the effort by nonprofit organizations to bring about mutually satisfying exchanges with target markets

• Among the marketing activities they perform are:

− Identifying the customers (clients, members, sponsors) they wish to serve or attract

− Specifying objectives and managing related programs and services

− Deciding on prices (fees, donations, tuition, fares, fines) to charge

− Communicating their availability through brochures, signs, public service announcements, or
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