Essentials of Services Marketing 2nd Edition by Jochen Wirtz – Test Bank

 

 

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Sample Test

Chapter 3

Positioning Services in Competitive Markets

 

 

GENERAL CONTENT

Multiple Choice Questions

 

1.    A customer-driven services marketing strategy includes all of the following except ____________.

2.    customer analysis

3.    analyzing market segments

4.    handling customer complaint

5.    articulating desired position in the market

6.    competitor analysis

(c; Easy; p. 69)

 

2.    Market analysis addresses all of the following factors EXCEPT ____________.

3.    overall level of demand

4.    trend of demand

5.    government regulations

6.    geographic location of demand

7.    market analysis addresses all of the above factors

(c; Easy; p. 69)

 

3.    Competitive analysis addresses all of the following factors EXCEPT ____________.

4.    examines competitors’ strengths

5.    identifies competitors’ future positioning

6.    examines competitors’ current positioning

7.    examines competitors’ weaknesses

8.    suggests opportunities for differentiation

(b; Moderate; p. 69)

 

4.    A ____________ is composed of a group of buyers who share common characteristics, needs, purchasing behavior, or consumption patterns.

5.    target class

6.    class

7.    focal segment

8.    market segment

9.    financial segment

(d; Moderate; p. 70)

 

 

 

5.    A(n) ____________ is one that a firm has selected from among those in the broader market and may be defined on the basis of several variables.

6.    general segment

7.    segmentation field

8.    target segment

9.    holistic segment

10.  mass customization

(c; Easy; p. 71)

 

6.    The same individuals may set different priorities for attributes according to all EXCEPT which of the following?

7.    The purpose of using the service.

8.    Who makes the decision.

9.    The timing of use.

10.  Whether the individual is using the service alone or with a group.

11.  The cost of the service.

(e; Moderate; p. 73)

 

7.    ____________, refers to an explicit form of positioning strategy that is based upon offering several price-based classes of service concept, each based on packaging a distinct level of service performance across many attributes.

8.    Service tiering

9.    Service conscription

10.  Broad-basing

11.  Price-setting

12.  Matching

(a; Challenging; p. 74)

 

8.    Which of the following is the best example of a determinant characteristic for airline travel?

9.    Oxygen masks

10.  Plane size

11.  Quality of food and drinks

12.  Having cocktail service

13.  Floatation devices

(c; Moderate; p. 74)

 

9.    Which of the following is NOT one of the four basic focus strategies?

10.  Service focused

11.  Unfocused

12.  Fully focused

13.  Refocused

14.  Market focused

(d; Easy; p. 76)

 

10.  Which of the following is NOT one of the four principles of writing a good positioning statement?

11.  Competitive advantage.

12.  Point of difference.

13.  Target audience.

14.  Reason to believe.

15.  Frame of reference.

(a; Moderate; p. 82)

 

 

True/False

 

11.  The objective of internal corporate analysis is to identify the organization’s resources, any limitations or constraints, its goals, and how it values shape the way it does business.

(True; Easy; p. 70)

 

12.  The best way to anticipate possible competitive responses is to identify all current or potential competitors and to put oneself in their own management’s shoes by conducting an internal corporate analysis for each of these competitors.

(True; Moderate; p. 70)

 

13.  A target segment should only be selected on the basis of their sales and profit potential.

(False; Moderate; p. 72)

 

14.  No service attribute can be easily quantified because of the intangibility of services.

(False; Challenging; p. 74)

 

15.  It is usually a good idea for firms to try to appeal to all potential buyers in a market, because customer variety leads to full capacity.

(False; Moderate; p. 76)

 

16.  Market niches that seem too narrow to offer sufficient sales in one country are indicative of globally narrow market niches.

(False; Moderate; p. 77)

 

17.  A fully-focused organization concentrates on a narrow market segment, but has a wide range of services.

(False; Moderate; p. 77)

 

18.  One of the reasons why firms with a narrow product line elect to serve multiple segments is to create a portfolio of customers that hedge against low demand risks.

(True; Challenging; p. 77)

 

19.  A service-focused firm offers a narrow range of services to a fairly broad market.

(True; Moderate; p. 77)

 

20.  Positioning plays a pivotal role in marketing strategy, because it links market analysis and competitive analysis to environmental analysis.

(False; Challenging; p. 79)

 

Short Answer

 

21.  What are the three Cs to analyze when developing a market positioning strategy?

 

Customer, competitor, company.

(Moderate; p. 69)

 

22.  Why is it possible to segment customers according to price levels?

 

Customers have different sensitivities to price. Price insensitive customers are willing to pay a relatively high price to obtain high levels of service. Price sensitive customers look for inexpensive service with relatively low levels of performance.

(Moderate; p. 72)

 

23.  Distinguish between important and determinant attributes.

 

Important attributes represent what customer’s value in a service, whereas determinant attributes are those that actually determine buyers’ choices between competing alternatives.

(Moderate; p. 74)

 

24.  What are the two dimensions along which a company’s focus can be described?

 

Market and service.

(Easy; p. 76)

 

25.  What are the characteristics of an unfocused service category?

 

Serving broad markets and providing a wide range of services.

(Moderate; p. 77)

 

Essay

 

26.  Explain what a fully-focused and a market-focused strategy are and discuss the opportunities and risks inherent in selecting each strategy.

 

A fully-focused organization provides a limited range of services to a narrow and specific market segment. Opportunities in this strategy include developing recognized expertise that retains a competitive advantage over other firms. A risk is that the market may be too small to generate the volume of business necessary.

 

A market-focused organization concentrates on a narrow segment with a wide range of services. This strategy offers the opportunity to sell multiple services to a single customer that enhances the value of promotional efforts. Managers need to ensure that the firm has the ability to excel at many different tasks and understand what services go together per customer purchasing practices and preferences.

(Challenging; p. 77)

 

27.  What are the advantages of positioning charts?

 

Graphic representations of a firm’s profile and product positions are much easier to understand than tables of quantitative data or paragraphs of writing.  Charts and maps can help to achieve a “visual awakening.” By allowing senior managers to compare their business with that of competitors and understand the nature of competitive threats and opportunities, visual presentations can highlight gaps between how customers (or potential customers) see the organization and how management sees it. This can thus help confirm or get rid of beliefs that a service or a firm occupies a unique position in the marketplace.

(Moderate; p. 82)

APPLICATION CONTENT

Multiple Choice Questions

 

28.  Bright Horizons strategy included which of the following?

29.  Marketing services to employers instead of parents.

30.  Hiring inexpensive labor.

31.  Commoditized service offerings.

32.  Heavy regulatory oversight.

33.  All of the above are strategies employed by BH.

(a; Moderate; p. 67)

 

29.  Segmentation variables at Contiki Holidays include all of the following EXCEPT ____________.

30.  geographic

31.  income

32.  lifestyle

33.  household size

34.  age

(d; Challenging; p. 73)

30.  Capsule hotels originated from _____________.

31.  New York

32.  London

33.  Japan

34.  India

35.  Malaysia

(c; Easy; p. 75)

 

31.  Which of the following is most likely the determinant attribute for customers of private air charter services?

32.  Duration of usage.

33.   

34.  Time of usage.

35.   

36.  Availability of online booking.

(b; Challenging; p. 77)

 

32.  Grant Thornton, the fifth largest firm in the accounting industry, has successfully positioned itself as offering ____________ and having ____________.

33.  high investment yield; “a passion for the business of accounting”

34.  limited financial obligation; “a desire to exceed expectations”

35.  easy access to partners; “a passion for the business of accounting”

36.  low employee turnover; “a desire to exceed expectations”

37.  high asset turnover; “a passion for the business of accounting”

(c; Moderate; p. 81)

 

True/False

 

33.  Banco Azteca is serving a niche market of customers.

(True; Moderate; p. 71)

 

34.  Yotel and Qbic are capsule hotel chains.

(True; Easy; p. 75)

 

35.  Rentokil started off as a firm that manufactured rat poison and a pesticide for killing leeches.

(False; Easy; p. 78)

 

36.  Visa’s positioning is about having one card fits all.

(False; Moderate; p. 80)

 

37.  Bright Horizons used low-cost strategies to achieve their competitive advantage.

(False; Moderate; p. 81)

 

Short Answer

 

38.  Give an example of a psychographic segmentation variable.

 

Confident risk takers, seeking constant adventure.

(Moderate; p. 70)

 

39.  Give an example of service tiering in the airline industry.

 

Classes (first, business, economy),

(Easy; p. 74)

 

40.  Give an example of a key service attribute used in transportation services.

 

Punctuality.

(Easy; p. 74)

 

41.  Give an example of an industry that utilizes service tiering.

 

Hotels, airlines, car rentals, hardware and software support, healthcare insurance, cable television, and credit cards.

(Easy, p. 74)

 

42.  What were the main benefits of capsule hotels when they first started up?

 

Convenience and price.

(Easy; p. 75)

 

 

Essay

 

43.  Discuss the analysis that took place to develop Bright Horizons and the ways in which they overcame unappealing industry characteristics.

 

Bright Horizons (BH) is a childcare company that was born from an industry with many unappealing characteristics. The firm’s analysis showed an industry with no barriers to entry, chronically low margins, high labor intensity, no proprietary technology, low economies of scale, weak brand distinction, and heavy regulatory oversight. Instead of establishing new independent centers, BH formed partnerships with companies to provide daycare services to employees with small children. The advantages over traditional methods included a powerful, low-cost marketing channel, a partner to supply the capital to build and outfit the centers, a partner with a vested interest in the success of the programs, and proximity benefits to parents.

(Moderate; p. 67)

 

44.  How did Rentokil Initial grow from a manufacturer of rat poison, to the world’s large business support services company?

 

Through growth within the firm and buying over other companies, Rentokil Initial has developed an wide range of products that includes testing and safety services; security; parcels delivery; interior plants landscaping (including sale or rental of tropical plants); specialized cleaning services; pest control; rental and cleaning of uniforms; clinical waste collection and disposal; personnel services; and a washroom solutions service. The firm sees its core competence as “the ability to carry out high quality services on other people’s premises through well-recruited, well-trained, and motivated staff.” Promoting use of additional services to existing customers is an important part of the firm’s strategy.  Initial Integrated Services offers clients full integration of services. Clients purchase sector-specific solutions that deliver multiple services but features just “one invoice, one account manager, one helpdesk, one contract and one motivated service team”. Rentokil Initial’s success lies in its ability to position each of its many business and commercial services in terms of the company’s core brand values, which include providing superior standards of customer care and using the most technically advanced services and products.

(Moderate; p. 78)

 

45.  How did positioning maps help the managers of Palace?

 

The positioning maps first helped them to identify who their competitors were and where they were positioned relative to their competitors on the attributes of room price, level of personal service, level of physical luxury and location. From there, they understood that higher service levels are expensive. They also used the maps to identify potential competitive responses, to help them plan their strategy to tackle the challenges ahead.

(Moderate; p. 83)

 

 

Chapter 4

Developing Service Products: Core and Supplementary Elements

 

 

GENERAL CONTENT

Multiple Choice Questions

 

1.    ____________ is not a facilitating service.

2.    Information

3.    Order taking

4.    Marketing theories

5.    Billing

6.    Payment

(d; Easy; p. 98)

 

2.    ____________ supply the central, problem-solving benefit that customers seek.

3.    Core products

4.    Supplementary services

5.    Delivery processes

6.    Sustaining processes

7.    Conditional services

(a; Moderate; p. 98)

 

3.    ____________ augment the core product, both facilitating its use and enhancing its value and appeal.

4.    Core products

5.    Supplementary services

6.    Delivery processes

7.    Sustaining processes

8.    Conditional services

(b; Easy; p. 98)

 

4.    The order-taking process should be ____________, ____________, and ____________ so that customers do not waste time and endure unnecessary mental physical effort.

5.    short; curt; abrupt

6.    simple; slow; effortful

7.    short; sweet; ineffective

8.    powerful; simple; abrupt

9.    polite; fast; accurate

(e; Moderate; p. 100)

 

 

5.    ____________ represent a special type of order taking that entitles customers to a specific unit of service.

6.    Suggestions

7.    Reservations

8.    Trackers

9.    Repossessions

10.  Contracts

(b; Moderate; p. 100)

 

6.    At its simplest, ____________ consists of immediate advice from a knowledgeable service person in response to the request: “What do you suggest?”

7.    billing

8.    payment

9.    consultation

10.  hospitality

11.  selling

(c; Easy; p. 102)

 

7.    Which of the following is NOT considered an example of a hospitality element?

8.    Greeting

9.    Toilets and washrooms

10.  Advice

11.  Food and beverages

12.  Transport

(c; Moderate; p. 103)

 

8.    A company’s ____________ helps to determine which supplementary services should be included.

9.    location

10.  delivery system

11.  key service representative

12.  service atmosphere

13.  market positioning strategy

(e; Easy; p. 106)

 

9.    Which of the following is NOT one of the ways to build strong brands?

10.  Dare to be different from competitors.

11.  Determining their fame by creating unique a competitive advantage.

12.  Building a parent brand.

13.  Fostering an emotional connection with the customers.

14.  Having the service employees internalize the brand.

(c; Moderate; p. 111)

 

 

 

 

10.  Achieving success in new service development requires

11.  market synergy.

12.  strong interfunctional cooperation and coordination.

13.  detailed and properly designed market research studies.

14.  all of the listed choices.

15.  none of the listed choices.

(d; Moderate; p. 100)

 

True/False

 

11.  Information processing services tend to be the most demanding in terms of supplementary elements.

(False; Moderate; p. 98)

 

12.  The search for competitive advantage rarely centers on supplementary services.

(False; Moderate; p. 98)

 

13.  Service marketers need to create a coherent offering in which each element is compatible with the others and all are mutually reinforcing.

(True; Easy; p. 98)

 

14.  Core products are surrounded by supplementary elements from each of the eight clusters of supplementary services.

(False; Easy; p. 98)

 

15.  To obtain full value from any good or service, customers need relevant information.

(True; Moderate; p. 99)

 

16.  Hospitality represents a more subtle approach to consultation because it involves helping customers better understand their situations.

(False; Easy; p. 103)

 

17.  “Exceptions” involve supplementary services that fall outside the routine of normal service delivery.

(True; Moderate; p. 105)

 

18.  Branding can only be used at the company level for service businesses.

(False; Moderate; p. 108)

 

19.  Brand meaning has a stronger impact on brand equity than brand awareness.

(True; Moderate; p. 112)

 

20.  Supplementary service innovations are the most common type of innovation.

(False; Moderate; p. 113)

 

 

Short Answer

 

21.  What are the components that the value proposition must address?

 

Core products, and supplementary services, and delivery processes.

(Moderate; p. 98)

 

22.  List three examples of order-taking elements in order entry.

 

On-site order fulfillment.

Mail/telephone order placement.

E-mail/Web site order placement.

(Moderate; p. 100)

 

23.  Give two examples of billing elements.

 

Periodic statements of account activity.

Invoices for individual transactions.

Verbal statements of amount due.

Machine display of amount due.

Self-billing (computed by the customer).

(Moderate; p. 101)

 

24.  Give an example of a consultation element.

 

Advice—personal counseling, tutoring/training in product use, or management or technical consulting.

(Easy; p. 102)

 

25.  Give an example of an exception.

 

A child needs to be met at the airport by a child minder from the hotel.

(Moderate; p. 105)

 

 

Essay

 

26.  Describe the four types of “exceptions” listed in the chapter.

 

Special requests are one type of exception. These involve a departure from normal operating activities and are common in travel and hospitality industries. Problem-solving refers to an exception where normal service fails to run smoothly as a result of accidents, delays, etc. Handling of complaints/complements/suggestions help service providers react quickly to failures and thrive off of complements. Restitution is the final type of exception listed. This involves repaying customers for severe performance failures.

(Moderate; p. 105)

 

27.  Discuss the three factors that discriminate between successful and unsuccessful new financial services.

 

The three factors that lead to success in new financial services are market synergy, organizational factors, and market research factors. Market synergy refers to the ability of new offerings to fit well with the existing image of a firm, to meet customer needs, and to receive strong support from a firm and its branches. Organizational factors include strong interfunctional cooperation and coordination and a clear direction for the development team. Finally, market research is conducted early in the development process with a clear idea of the type of information needed.

(Challenging; p. 115)

APPLICATION CONTENT

Multiple Choice Questions

 

28.  DHL offers customers the opportunity to track the movements of their packages, which have been assigned a unique identification number. This is an example of ____________.

29.  order-taking

30.  safekeeping

31.  information

32.  consultation

33.  exceptions

(c; Moderate; p. 99)

 

 

 

 

 

29.  Customers who visit Giordano outlets are greeted with a cheerful “Hello” and “Thank you” when they enter and leave the store. That is an example of ____________ .

30.  consultation

31.  hospitality

32.  exceptions

33.  courtesy

34.  safekeeping

(b; Moderate; p. 103)

 

30.  Which of the following is an example of a special request in advance of service delivery?

31.  Dietary requirements

32.  Complaints

33.  Warranties

34.  Refunds

35.  Suggestions

(a; Easy; p. 105)

 

31.  Singapore Airlines Raffles Class is an example of a(n) ____________.

32.  branded house

33.  endorsed brand

34.  house of brands

35.  sub-brand

36.  clear strategy

(d; Moderate; p. 107)

 

32.  Which of the following is NOT one of Sun Microsystem’s hardware and software support level?

33.   

34.   

35.   

36.   

37.   

(c; Moderate; p. 110)

 

True/False

 

33.  For self-service payment, customers may make payment by inserting coins, banknotes, tokens or cards into machines.

(True; Easy; p. 102)

 

34.  Giordano is well recognized for both their superior meals and attentive cabin crew.

(True; Moderate; p. 103)

 

35.  The difference between a product and a service is that a product is a bundle of output while a service is a bundle of supplementary services.

(False; Moderate; p. 106)

 

36.  The term “branded house” is used to describe firms like Virgin Group that uses distinct individual brand names to cover a range of diverse service offerings in unrelated fields.

(False; Moderate; p. 107)

 

37.  Crown Plaza hotels are part of the Intercontinental Hotel Group (IHG) but are usually not identified as part of IHG to protect IHG’s exclusive image.

(False; Moderate; p. 108)

 

Short Answer

 

38.  What are the two roles of supplementary services?

 

Facilitating or enhancing.

(Moderate; p. 98)

 

39.  Give two examples of facilitating services.

 

Information, order-taking (billing, payment).

(Moderate; p. 98)

 

40.  Give two examples of enhancing services.

 

Consultation, hospitality (safekeeping, exceptions).

(Moderate; p. 98)

 

41.  What are the branding alternatives for service firms?

 

Branded house, subbrands, endorsed brands, and house of brands.

(Moderate; p. 107)

42.  Provide an example of a major process innovation.

 

University of Phoenix competes with other universities by delivering their courses online or in rented facilities at night. It does not have any permanent campus.

(Challenging; p. 114)

 

Essay

 

43.  Explain how the core product and supplementary services are integrated in the context of an overnight hotel stay.

 

The core product refers to the overnight rental of a bedroom. Supplementary services include things like parking, room service, reservations, and a breakfast buffet. Delivery of both the core and the supplementary services is provided electronically, via hotel employee, or by the customer. Phone use and pay TV are automatically billed to the room. Room service and check-in are provided by a hotel employee. Most breakfast buffets are self-service, requiring the customer to take action.

(Moderate; p. 98)

 

44.  Discuss how multi-brand strategies can succeed and what the strategies should be based on in the hotel industry.

 

Many hotel chains offer groups of sub-brands or endorsed brands. For example, Hilton Hotels Corporation has ten sub-brands, while Marriott International has fifteen. To succeed, each sub-brand must offer a distinct value to customers. For example, catering to the ultra wealth at one end of the spectrum with one brand and also serving the economy class with another brand. Accommodations, amenities, and service must be consistent with the level of customer sought. Target considerations include, short-term versus extended stay, business versus pleasure, and ability to pay matched with customer needs and desires.

(Challenging; p.107)

 

45.  Explain where Sun Microsystems falls on the spectrum of branding alternatives and discuss what their strategy involves.

 

Sun Microsystems utilizes a sub-branded strategy. The company offers a comprehensive hardware and software support program with four different levels of support. These range from bronze to platinum. Different levels of support give customers the flexibility to tradeoff price for increased service. For example, 24/7 service is costly, but potentially necessary for some high-powered business customers.

(Challenging; p. 109)