1.

Services marketing become difficult because of

A. Intangibility.
B. no demand
C. More complex market
D. Difficult to enter the market
ANSWER: A
2. Which of the following businesses would be characterized as a pure service
A. Insurance
B. Farming.
C. Mining.
D. There is no such thing as a pure service
ANSWER: D
3. Which of the following statements about the pricing of services (compared to
the pricing of goods) is false?
A. The demand for services tends to be more elastic than the demand for goods
B. Cost-oriented pricing is more difficult for services.
C. Comparing prices of competitors is more difficult for service consumers
D. Consumers are less able to stockpile services by taking advantage of discount
prices
ANSWER: B
4. Charging customers different prices for essentially the same service is called
A. Price discrimination
B. Supply and demand.
C. Complementary
D. Substitutes.
ANSWER: A
5. Results in the practice of too narrowly defining one’s business
A. Services marketing
B. Marketing management
C. Marketing myopia
D. Customer experience
ANSWER: C
6. A buyer’s perception of value is considered a trade-off between
A. Product value and psychic cost.
B. Total customer value and total customer cost
C. Image value and energy cost
D. Service value and monetary cost.
ANSWER: D
7. Services are characterized by all of the following characteristics except for
A. Intangibility.
B. Homogeneity
C. Perishability.
D. Inseparability
ANSWER: B
8. Which of these statements can be considered as false.
A. Services cannot be touched or seen in the same manner as goods
B. Consumer judgments about services tend to be more subjective than objective
C. Customers involvement affects service quality
ANSWER: D
9. Of the four unique service characteristics that distinguish goods from services,
the one that is the primary source of the other three characteristics is:
A. Intangibility
 B. Inseparability.
C. Perishability.
D. Heterogeneity.
ANSWER: A
10. Services that occur without interruption, confusion, or hassle to the customer
is called
A. Seamless service
B. Service audit.
C. Functional service
D. Departmental service
ANSWER: A
11. The mental energy spent by customers to acquire service is referred to as
_____.
A. Image costs
B. Monetary price.
C. Energy costs
D. Psychic costs.
ANSWER: C
12. The unique service characteristic that reflects the interconnection between
the service firm and its customer is called
A. Intangibility
B. Inseparability
C. Homogeneity
D. Perishability
ANSWER: B
13. Marketing problems caused by inseparability include all of the following
except for
A. The service provides a physical connection to the service
B. The involvement of the customer in the production process
C. Service standardization and quality control are difficult to achieve.
D. The involvement of other customers in the production process
ANSWER: C
14. Which of the following statements pertain to inseparability is false?
A. As customer contact increases, the efficiency of the firm decreases.
B. Customers can affect the type of service desired
C. Customers can affect the length of the service transaction.
D. Customers can affect the cycle of deman
ANSWER: A
15. The centralized mass production of services is difficult due to
A. Inseparability.
B. Intangibility.
C. Homogeneity.
D. Perishability.
ANSWER: D
16. Solutions used to minimize the marketing problems attributed to
heterogeneity include
A. Standardizing or customizing the service
B. Using multi-site locations
C. Stressing tangible clues
D. Appealing to different market segments with different demand patterns
ANSWER: A
17. The unique service characteristic that deals specifically with the inability to
inventory services is
A. Inseparability
B. Intangibility
C. Homogeneity
D. Perishability
ANSWER: D
18. Which of the following strategies increases the supply of service available to
consumers?
A. The use of creative pricing strategies
B. The use of reservation systems
C. Capacity sharing
D. Developing complementary services
ANSWER: B
19. Customer satisfaction can be defined by comparing
A. Predicted service and perceived service
B. Predicted service and desired service
C. Desired service and perceived service
D. Adequate service and perceived service
ANSWER: C
20. The demand strategy in which service providers utilize their downtime by
marketing to different segments with different demand patterns is associated with
which of the following?
A. The use of creative pricing strategies
B. The use of reservation systems
C. Capacity sharing
D. Developing complementary services
ANSWER: C
21. The __________ dimension is an assessment of the firm’s consistency and
dependability in service performance
A. Empathy.
B. Responsiveness.
C. Assurance
D. Reliability.
ANSWER: D
22. Which of the following would not be considered a tangible clue?
A. The appearance of employees
B. The appearance of the firm’s physical facilities
C. The smile on an employee’s face
D. The quality of instruction in an educational setting.
ANSWER: D
23. Minimizing the amount of role conflict and role ambiguity experienced by
employees will help reduce the size of this gap is known as ____________.
A. Knowledge gap.
B. Standards gap
C. Delivery gap.
D. Communications gap
ANSWER: C
24. Fixing the right price for services offered is difficult because of ……………..
A. perishability.
B. heterogeneity.
C. inseparability.
 D. intangibility.
ANSWER: D
25. The world’s largest industry in the private sector and highest projected
generator of jobs is______
A. The hospitality industry
B. Health services
C. Professional services.
D. Business services
ANSWER: D
26. Focusing the firms marketing efforts toward the existing customer base is
called
A. Excellent customer service
B. Conquest retention
C. Customer retention
D. Courteous retention
ANSWER: C
27. The pursuit of new customers, as opposed to the retention of existing ones, is
called
A. Services marketing
B. B2B marketing
C. Conquest marketing
D. Consumer marketing
ANSWER: C
28. The consumer decision process consists of
A. Stimulus, problem awareness, and purchase stages
B. Pre-purchase, consumption, and post-purchase stages
C. Problem awareness, evaluation of alternatives, and post-purchase behaviour
D. Stimulus, information search, and post-purchase behavior
ANSWER: B
29. Which of the following statements is not true?
A. Service purchases are perceived as riskier than goods purchases
B. The participation of the consumer in the service process increases the amount
of perceived risk.
C. The variability in services increases the perceived risk associated with the
Purchase
D. Consumers of services have less pre-purchase information versus goods
ANSWER: B
30. Service consumers tend to be more brand loyal than goods consumers
because
A. More choices are available
B. Brand loyalty lowers the amount of perceived risk
C. Each service provider provides many brands
D. Location of the provider is the major driver in the consumer selection process
ANSWER: B
31. Competitor intelligence should be gathered
A. Once a year.
B. Twice a year.
C. Continuously
D. When competition is more.
ANSWER: C
32. Which of the following is not a benefit of customer satisfaction?
A. The firm is more insulated from price competition.
 B. The firm provides a positive work environment for its employees
C. Positive word-of-mouth is generated from satisfied customers
D. Satisfied customers make purchases more frequently
ANSWER: B
33. The service industry has several emerging trends that organisations need to
be aware of. Which of these should organisations keep a look out for?
A. New competitors entering the marketplace
B. Advances in the internet
C. Heightened customer expectations
D. Advances in e-commerce.
ANSWER: A
34. The zone of tolerance is defined by the difference between
A. Expected service and desired service.
B. Predicted service and desired service
C. Desired service and adequate service.
D. Predicted service and perceived service
ANSWER: D
35. Customers ultimately determine the services by……………..
A. The type of competitors.
B. The levels of marketing effectiveness and operational efficiency
C. The cycle of fluctuations
D. The price of the competitors.
ANSWER: B
36. During a service recovery effort, the employee promptly refunded the
customers money but threw the money at the customer. As a result, the recovery
effort violated the customers ___________ justice need
A. Interactional
B. Ethical.
C. Social.
D. Procedural
ANSWER: C
37. Soft technologies refer to
A. Flexible rules that can be bent to meet customer needs.
B. The personal touches that ultimately lead to customer satisfaction.
C. Guidelines that permit employee empowerment
D. Hardware that facilitates the production of a standardized
ANSWER: B
38. The __________ is calculated by dividing the activity time by the number of
locations at which the activity is performed.
A. Service cost per meal
B. Maximum output per hour
C. Process time.
D. Activity time.
ANSWER: C
39. Which of the following is not a step in the construction process of a service
blueprint?
A. Obtaining scripts from both customers and employees
B. Segmenting customers based on the content of the script.
C. Identify steps in the process where the system can go awry.
D. Calculating the time frame for the service execution.
ANSWER: C
40. A volume-oriented positioning strategy is achieved by
A. Reducing divergence.
B. Increasing complexity
C. Reducing complexity.
D. Increasing divergence
ANSWER: D
41. A buyers perception of value is considered a tradeoff between
A. Product value and psychic cost
B. Total customer value and total customer cost.
C. Image value and energy cost
D. Service value and monetary cost.
ANSWER: D
42. Total customer value consists of all of the following components except
A. Product value.
B. Service value.
C. Image value
D. Personnel value.
ANSWER: D
43. Total customer cost consists of all of the following components except
A. Monetary cost
B. Social cost.
C. Time cost.
D. Energy cost.
ANSWER: B
44. Which of the following statements about the pricing of services (compared to
the pricing of goods) is false?
A. The demand for services tends to be more elastic than the demand for goods
B. Cost-oriented pricing is more difficult for services
C. Comparing prices of competitors is more difficult for service consumers.
D. Self-service is a viable competitive alternative.
ANSWER: D
45. __________ is a firm view toward planning its operations according to market
needs
A. Marketing orientation
B. Marketing functions.
C. Marketing department.
D. Marketing forecast.
ANSWER: A
46. Which of the following is not a criterion for effective price discrimination?
A. The segments should be identifiable, and a mechanism must exist to price them
differently.
B. Different groups of consumers should have similar responses to price.
C. Segments should be large enough to be profitable
D. Incremental revenues should exceed incremental costs.
ANSWER: B
47. Service firms often find themselves in a three-cornered fight between
A. Engineering, production, and accounting
B. Marketing, finance, and human resources
C. Operations, accounting, and marketing
D. Human resources, marketing and operations
ANSWER: D
48. Customer frustration resulting from receiving poor service is most similar to
A. Image costs.
B. Monetary price
C. Energy costs.
D. Psychic costs.
ANSWER: D
49. Among many services, the demand for medical services tends to be
__________.
A. Inelastic.
B. Elastic.
C. Substitute demand
D. Price cross elastic demand
ANSWER: A
50. Customer competencies can be described as
A. Consumer expectations pertaining to the service delivery process and the final
outcome
B. Customer perceptions regarding the quality of the outcome
C. Customer abilities that enable them to properly evaluate the servicescape.
D. The ability to interact effectively with other
ANSWER: C
51. Costs that are planned and are accrued during the operating period regardless
of the level of production and sales are called
A. Direct variable costs
B. Fixed costs.
C. Average costs
D. Marginal costs.
ANSWER: B
52. Direct labour cost and sales commissions cost incurred in services are called
as………..
A. Fixed costs.
B. Variable costs.
C. Average costs.
D. Marginal costs.
ANSWER: B
53. The technique that allows consumers to either buy Service A and Service B
together on purchase one service separately is called
A. Long-term bundling
B. Mixed bundling
C. Price bundling.
D. Product bundling
ANSWER: C
54. Which pricing strategies encourage the customer to expand his/her dealings
with the service provider?
A. Relationship pricing
B. Price bundling.
C. Benefit-driven pricing.
D. Efficiency pricing.
ANSWER: A
55. Do studies suggest that price is more likely to be used as a cue to quality
under the following conditions?
A. When alternatives are of bad products
B. When the company new to the market
 C. When a price is the primary differential information available
D. When a customer does not have knowledge
ANSWER: C
56. The primary role of a service firm for the customer in the communication mix
is to ……
A. Confuse customers.
B. Inform and remind customers
C. Oppose the competitor s claim
D. Persuade the dealers.
ANSWER: B
57. The plan for differentiating the firm from its competitors in consumers eyes is
referred to as the firms
A. Communication mix
B. Positioning strategy.
C. Publicity.
D. Target marketing
ANSWER: B
58. Differentiation approaches such as competence, courtesy, reliability, and
responsiveness are forms of
A. Product differentiation
B. Personnel differentiation
C. Image differentiation
D. Service differentiation.
ANSWER: B
59. The appropriate communication content during the introduction stage of the
product life cycle would be
A. Informational.
B. Informational and persuasive
C. Persuasive.
D. Persuasive and reminder.
ANSWER: B
60. Which of the following is not a communication objective during the maturity
and decline stages of the product life cycle?
A. Encourage repeat purchases
B. Provide ongoing contact with customers
C. Prepare the way for personal selling efforts
D. Express gratitude to the existing customer base.
ANSWER: B
61. Which one of the following communication approaches would be appropriate
during the growth and maturity stages of the product life cycle?
A. Informational.
B. Informational and persuasive
C. Persuasive.
D. Persuasive and reminder
ANSWER: D
62. The primary objective of a firms communication mix during the pre-
consumption choice stage is to
A. sell the product
B. Minimize the perceived risk associated with the purchase
C. Encourage repeat purchases
D. Persuasively convince customers why the firms brand is superior to the
 competitors
ANSWER: D
63. The perceived consequences of a consumer s purchase decision are
A. Financial, social and performance
B. Social, ethical and performance.
C. Performance, social and ethical.
D. Ethical, social and psychological
ANSWER: A
64. Tangible clues are more important when services are
A. Highly perishable.
B. Tangible dominant.
C. Intangible dominant
D. Heterogeneous
ANSWER: C
65. Which of the following communication objectives becomes the most important
during the post-consumption evaluation stage
A. Informing customers
B. Managing customer expectations.
C. Reducing consumer perceived risk
D. Persuading customers
ANSWER: C
66. Branding of services becomes difficult because they are
A. Intangible.
B. Heterogeneous.
C. Perishable.
D. Inseperable.
ANSWER: A
67. Word-of-Mouth communication networks are particularly important for service
firms because
A. Service customers tend to rely more on personal than the non-personal source
of information
B. Service firms only offer one brand of service.
C. Service firms can seldom afford to pay for promotional efforts.
D. Service customers tend to rely more on non-personal than personal sources of
information
ANSWER: A
68. The suggested communication strategy to use when the product is intangible
dominant is to
A. Create an intangible image for the product.
B. Create awareness for the product
C. Surround the product with tangible evidence.
D. Make sure the product is in the evoked set of
ANSWER: C
69. __________ is an overall favourable impression or unfavourable impression
based on the early stages of the service encounter.
A. Cognitive dissonance.
B. Environmental stimulus
C. Visual pathway.
D. Halo effect.
ANSWER: D
70. The advantage that the E-marketing communications carries are…………
A. Reaching a widely dispersed audience.
 B. Being cost effective.
C. Being personalized.
D. More customer satisfaction.
ANSWER: A
71. A disadvantage of e-marketing is
A. High cost.
B. Low reach.
C. Loss of personal contact
D. Less satisfaction.
ANSWER: C
72. Which of the following is not a component of service firms physical evidence?
A. Parking.
B. Employee appearance
C. Billing statements.
D. In-house process equipment
ANSWER: D
73. One of the advantages of requiring employees to wear uniforms is that it
reduces the customers’ perception of_______.
A. Intangibility.
B. Inseparability.
C. Heterogeneity.
D. Socialization.
ANSWER: C
74. which of the following is not an advantage of requiring employees to wear
uniforms?
A. Identifies the firm’s personnel
B. Provides price expectations to customers.
C. Implies a coherent group structure
D. Provides a physical symbol that embodies the group’s ideas and attributes
ANSWER: B
75. __________ is the study of the use of physical evidence to
create service environments and their influence on the perceptions and behaviours
of individuals
A. Ergonomics
B. Environmental psychology.
C. Physics
D. Physical sociology
ANSWER: B