CHAPTER 1

MULTIPLE CHOICE QUESTIONS

1. The _____________ reflects the view that the intangible aspects of products are
becoming the key features that differentiate the product in the marketplace.

a. services marketing
b. Servuction model
c. service imperative
d. benefit concept
e. industrial management model

ANS: C
REF: 4

2. Which of the following businesses would be characterized as a pure service?

a. insurance
b. farming
c. mining
d. engineering
e. there is no such thing as a pure service

ANS: E
REF: 4

3. General Motors, the manufacturing giant's, largest supplier is:

a. Blue Cross-Blue Shield Insurance

b. GMAC Financing
c. a parts supplier
d. a legal firm
e. a trucking company

ANS: A
REF: 4

4. Which of the following sets of terms best describes a service?

a. objects, devices, and performances

b. effort, objects, and deeds
c. things, devices, and performances
d. objects, devices, and things
e. deeds, effort, and performances

ANS: E
REF: 4

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5. Deeds, efforts and performances define:

a. products
b. ideas
c. services
d. goods
e. places

ANS: C
REF: 4

6. The continuum that ranges from tangible-dominant to intangible-dominant is

referred to as:

a. the services triangle

b. the Servuction model
c. the scale of market entities
d. the service-profit chain
e. the Q continuum

ANS: C
REF: 5

7. Businesses such as fast food restaurants would fall where along the Scale of Market
Entities?

a. on the extreme end of the intangible-dominant side

b. on the extreme end of the intangible-dominant side
c. in the middle of the continuum
d.. left of the middle towards the tangible-dominant side
e. right of the middle towards the intangible-dominant side

ANS: C
REF: 5

8. Which of the following fields would be least likely to be described as intangible-

dominant?

a. manufacturing
b. education
c. insurance
d. banking
e. engineering

ANS: A
REF: 5

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9. Which of the following products is an example of intangible dominant?

a. Outback steakhouse
b. car rental agency
c. a funeral
d. a magazine subscription
e. math tutoring

ANS: E
REF: 6

10. Which of the following statements is NOT true?

a. Service knowledge is obtained differently than goods knowledge.

b. Firms that define their businesses too narrowly have developed marketing
myopia.
c. Goods are tangible-dominant.
d. Service knowledge is obtained through the experience of receiving the actual
service.
e. All the above are true.

ANS: E
REF: 6

11. _______ results in firms that produce tangible products and overlook the service
aspect of their product.

a. Services marketing
b. Marketing management
c. Services marketing myopia
d. Scale of market entities
e. Customer experience

ANS: C
REF: 6

12. __________ involves a pictorial representation of the relationship between the

tangible and intangible elements of a firm’s operation.

a. Molecular Model
b. Servuction Model
c. Benefit concept
d. Industrial Management Model
e. Market-focused Model

ANS: A
REF: 6
13. Which of the following could NOT be included in the airline molecular model?
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a. long-term parking
b. financing arrangements
c. rental car availability
d. gate attendants
e. baggage handlers

ANS: B
REF: 7

14. The encapsulation of the benefits of product in the consumer's mind is called:

a. the Servuction Model

b. the benefit concept
c. the Service Triangle
d. the Service-Profit Chain
e. the Scale of Market Entities

ANS: B
REF: 8

15. According to the Servuction Model, factors that influence the customer's service
experience include all of the following except:

a. price
b. contact personnel/service providers
c. other customers
d. servicescape
e. organization and systems

ANS: A
REF: 9

16. Which of the following components of the Servuction Model is invisible to

consumers?

a. servicescape
b. organization and systems
c. other customers
d. contact personnel
e. service providers

ANS: B
REF: 9-11

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17. A customer who notices dirty silverware and a dirty floor in his/her favorite
restaurant has been influenced by which of the following components of the Servuction
Model?

a. servicescape
b. organization and systems
c. other customers
d. contact personnel
e. service providers

ANS: A
REF: 9

18. Servicescape consists of which of the following features:

a. personal artifacts
b. inanimate objects
c. signs
d. ambient conditions
e. all of the above

ANS: E
REF: 9

19. The component of the Servuction Model over which most service firms have the
least control is:

a. servicescape
b. organization and systems
c. other customers
d. contact personnel
e. service providers

ANS: C
REF: 10-11

20. If an office did not schedule as many people as were needed during a busy period,
which of the following components of the Servuction Model has influenced the
customer's experience?

a. servicescape
b. organization and systems
c. other customers
d. contact personnel
e. service providers

ANS: B
REF: 11
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21. A customer attempted to pay his bill with his American Express credit card;
however, the service firm did not accept American Express. Which of the following
components of the Servuction Model influenced the customer's experience?

a. servicescape
b. organization and systems
c. other customers
d. contact personnel
e. service providers

ANS: B
REF: 11

22. The demand for services marketing knowledge has increased for all of the
following reasons except:

a. the tremendous growth in service-sector employment

b. increasing service-sector contributions to the world economy
c. the emergence of technologically based e-services
d. developing sustainable services marketing business practices
e. the decline in service sector jobs

ANS: E
REF: 13

23. Ranking from highest to lowest, the countries with the largest service sector
employment are:

a. United Kingdom, United States, Japan

b. Hong Kong, Bahamas, Israel, United Kingdom
c. United States, United Kingdom, Japan
d. United States, United Kingdom, Hong Kong
e. Japan, Bahamas, United States, Israel

ANS: B
REF: 14

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24. With regards to service sector employment in the United States, which of the
following statements is FALSE?

a. Between 2002 and 2012, 65% of all jobs were service jobs.
b. 79% of the U.S. labor force is employed in service sector jobs in the year 2009.
c. Between 2002 and 2012, 96% of all new jobs will be service jobs.
d. 30% of the U.S. labor force was employed in the service sector in the year 1900.
e. All the above statements are false.

ANS: A
REF: 14

25. What approximate percentage of the United States' Gross Domestic Product is
generated by the service sector?

a. 87%
b. 77%
c. 67%
d. 57%
e. 47%

ANS: B
REF: 14

26. Economies throughout the world tend to transition from an agricultural economy to
an industrial economy to a service economy. Who was the first economy in the modern
world to make this transition?

a. Hong Kong
b. United Stated of America
c. United Kingdom
d. Bahamas
e. Japan

ANS: C
REF: 13

27. What are E-services?

a. Application of science to solve problems or conduct transactions

b. Customer service activities via the net
c. Technologically based services that help customers help themselves
d. An electronic service available via the net that completes tasks
e. All of the above

ANS: E
REF: 16-17
28. Which of the following service industries have NOT employed self-service
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technologies?

a. banks
b. insurance companies
c. hotels
d. movie rental chains
e. manufacturing operations

ANS: E
REF: 17

29. Most people tend to associate this term with being “green” and protecting the
environment.

a. sustainability
b. tangibility
c. intangibility
d. social responsibility
e. none of the above

ANS: A
REF: 19

30. Which of the following areas is NOT a sustainable business practice that
companies hope to pursue as a source of competitive advantage?

a. eco-efficiency
b. environmental cost leadership
c. e-service
d. beyond compliance leadership
e. eco-branding strategies

ANS: C
REF: 19

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SHORT-ANSWER ESSAYS

31. What is a service?

ANS:
 The distinction between goods and services is not always perfectly clear.
 In general, services can be defined as deeds, efforts, or performances.
 The scale of Market Entities helps to distinguish goods from services based on
their tangibility and often highlights areas that are often overlooked that may be
used as sources of competitive advantage.

REF: 4-5

32. What are the seven categories of complaints that customers have toward service
providers?

ANS:
• Apathy: What comedian George Carlin refers to as DILLIGAD—Do I look like I
give a damn?
• Brush-off: Attempts to get rid of the customer by dismissing the customer
completely...the “I want you to go away” syndrome
• Coldness: Indifferent service providers who could not care less what the
customer really wants
• Condescension: The “you are the client/patient, so you must be stupid”
approach
• Robotism: When the customers are treated simply as inputs into a system that
must be processed
• Rulebook: Providers who live by the rules of the organization even when those
rules do not make good sense
• Runaround: Passing the customer off to another provider, who will simply pass
them off to yet another provider.

REF: 10

33. Discuss the components of the Servuction Model. What does the model attempt to
explain?

ANS:
 The components of the Servuction Model include: other customers, contact
personnel/service providers, servicescape, and organization and systems (the
rules, regulations, schedules and all other behind the scenes activities that
influence the customer's service experience).
 The first three components are visible to the consumer, the invisible organization
and systems are not.
 The model attempts to explain that the bundle of benefits received by the
customer is the experience created for the customer by the service firm.
 Unlike goods customers, service customers are involved in the production
process of the service.
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REF: 9-12

34. Why has the demand for services marketing knowledge increased in recent years?

ANS:
 The tremendous growth in the global service workforce.
 Service sector contributions to the world economy in terms of contributions to
GDP.
 The emergence of technologically based e-services.
 The importance of developing sustainable services marketing business
practices.

REF: 13-15

35. Discuss the service sector contributions to the world economy.

ANS:
 New technology has led to considerable changes in the nature of many services
and in the development of new services.
 Higher disposable incomes have led to a proliferation of personal services,
particularly in the entertainment sector.
 All developed economies now have large service sectors.
 Many service firms now operate internationally, and exports of services are
increasing.

REF: 13

36. Describe the four areas of improvement in which a company can achieve
sustainability.

ANS:
 Eco-efficiency focuses on the concept of the “double dividend.” Companies that
attempt to reduce wastes and inefficiencies within the system see positive
results both financially and environmentally.
 Environmental cost leadership involves developing a radical innovation that will
allow the company to be more environmentally friendly while maintaining cost
competitiveness.
 Beyond compliance leadership involves companies wanting to increase their
sustainability efforts, but also wanting these efforts to be acknowledged by the
public. These companies often spend money on environmental certifications,
such as LEEDS building certifications. The first-movers in an industry in this
case have the greatest advantage. Those who take the first initiative are seen as
innovative, while the rest of the companies within the industry are forced to
follow suit.
 Eco-branding strategies focus on the use of marketing differentiation based on
the environmental attributes (e.g., organic, vegan, or fair-trade status) of

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 products. There are three basic prerequisites that often exist for firms to
successfully execute this approach: consumers must be willing to pay for the
costs of ecological differentiation; reliable information about product’s
environmental performance must be readily available to the consumer; and the
differentiation must be difficult to imitate by competitors.

REF: 19

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