Bus268 Chapter 1 MCQ Qns Ans

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BUS268 Chapter 1 MCQ Qns Ans
Services Marketing (Murdoch University)
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Chapter 1
New perspectives on marketing in the service economy
Multiple Choice Questions
1. A service is any act, performance or __________ that one party can offer to another and
that is essentially __________ and does not result in the __________ of anything.
a. product; tangible; ownership
b. experience; tangible; production
c. experience; intangible; ownership
d. product; intangible; ownership
e. thing; of value; transfer
Answer: c Diff: 2 Page: 6
2. Which of the following can NOT be classified as a consumer service?

a. Architecture
b. Telecommunications
c. Restaurant
d. Football match
e. Airline
Answer: a Diff: 2 Page:6
3. Which of the following types of value are NOT provided by services?

a. Time
b. Experiential
c. Place
d. Problem generating
e. Form
Answer: d Diff: 3 Page: 7
4. Arrange the following aspects of the customer value framework in sequential order:
1. develop positioning strategy
2. develop distinctive service concepts
3. understand target consumer needs and behaviours
4. create service value propositions
a. 1, 2, 4, 3
b. 3, 1, 4, 2
c. 3, 4, 2, 1
d. 1, 3, 2, 4
e. 2, 4, 1, 3
Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –
9781442517011/Lovelock/Services Marketing/5e

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Answer: b Diff: 2 Page: 8
5. Which of the following services could be said to be the most intangible?

a. Airline
b. Hotel
c. Consultancy firm
d. Fast food outlet
e. Taxi firm
Answer: c Diff:2 Page: 9
6. Soft drinks would be considered as __________ while a lawyer’s advice would be

considered __________.
a. balanced; tangible dominant
b. intangible dominant; balanced
c. balanced; intangible dominant
d. tangible dominant; balanced
e. tangible dominant; intangible dominant
Answer: e Diff:2 Page: 9
7. Activities or amenities that enhance the use of the core offering are called:
a. supplementary product elements
b. extended product concepts
c. supplementary service elements
d. optional extras
e. accessory products
Answer c Diff: 1 Page: 10
8. Which of the following could a retailer of flat screen televisions offer as supplementary
services?
a. Financing
b. Installation
c. In-home consultation
d. After-sales service
e. All of the above
Answer: e Diff: 1 Page: 10
9. IBM, once known mainly as a manufacturer of computers and office machines, now
offers four main groups of services which are:
a. legal services, business consulting, integrated technology and maintenance
b. strategic outsourcing, business consulting, logistics consulting and maintenance
c. strategic outsourcing, logistics consulting integrated technology and maintenance
d. strategic outsourcing, marketing research, integrated technology and maintenance
e. strategic outsourcing, business consulting, integrated technology and maintenance

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10. It has been suggested that in the last 20 years countries like Australia and New Zealand
have moved much of their low technology manufacturing, which is labour intensive, to
less developed economies such as Indonesia, Malaysia or China. What is this process
being labelled as?
a. Deregulation
b. Globalisation
c. Hollowing out effect
d. Privatisation
e. Economies of scale effect
11. Which of the following is NOT a reason for the rapid growth of services?
a. Government deregulation of service industries
b. Banning advertising and promotional activities for professional services
c. Privatisation of previously government-controlled services
d. The emergence of a global middle class demanding more and better services
e. Professional services and franchises competing globally
12. In a service encounter, value is created through __________ without obtaining

_________ of any __________ good.
a. monetary exchanges; ownership; intangible
b. utility exchanges; allocation; valuable
c. utility functions; transfer; tangible
d. service processes; transfer; tangible
e. service processes; ownership; tangible
13. Which of the following organisations could be classified as a global franchise network?
a. Coffee world
b. H & R Block
c. Snap printing
d. All of the above
e. a and b only
14. Which of the following is NOT one of the four generic differences between goods and
services?
a. Homogeneity
b. Intangibility
c. Simultaneity
d. Perishability
e. Variability

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Answer: a Diff: 2 Page: 14
15. Which one of the following is NOT an example of an intangible component of a

restaurant meal?
a. The cleanliness of employees' uniforms
b. The waiter or waitress taking the customer's order
c. The availability of credit card payment
d. Calling a taxi on behalf of the customer to take the customer home
e. Advice provided by the wine steward
16. During a stay in a hotel, which of the following is NOT a tangible component?
a. The complimentary newspaper
b. The towels
c. The hotel bed
d. The wake up call
e. The room key
17. The phrase ‘customers are asked to buy promises’ refers to the fact that:
a. intangible aspects are often not delivered
b. consumers try out and then select services
c. consumers cannot try out services in advance
d. intangible aspects can be quantified and measured
e. all services received are the same
Answer: c Diff:1 Page: 15
18. In a visit to a dentist surgery, which of the following would NOT be classed as physical
evidence?
a. Healthy plants in the waiting room
b. Uniforms worn by the dentist and staff
c. Teeth cleaning, x-rays and filling
d. Framed university degrees
e. Business cards listing professional affiliations
19. The _________ a product or service is to __________ in advance of purchase and use,
the greater the __________ for the customer.
a. harder; evaluate; experience value;
b. easier; evaluate; perceived risk;
c. easier; pay for; enjoyment; increase;
d. more difficult; understand; time risk;
e. harder; evaluate; perceived risk;


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20. One of the characteristics that make services different is that customers have a:
a. production role but no consumption role
b. consumption role but no production role
c. neither production role nor consumption role
d. consumption and advisory role
e. both production and consumption role
21. Although many services require customers to be present for the production and
consumption of those services to take place, which of the following services does NOT
require customers to be present?
a. University lecture
b. Car repairs
c. Medical diagnosis
d. Fitness training
e. A stay in a hotel
22. It has been suggested that services have many causes to their quality control problem.
Which of the following is NOT a cause to this problem?
a. The variability of employees' skills and knowledge
b. The decentralised nature of many services
c. The presence of service personnel and other customers
d. The rapid growth of the services industry in the last three or four decades
e. The fact that many services involve a simultaneous consumption in the production
process
23. Characteristics of a service that consumers find hard to evaluate even after purchase
and consumption are called:
a. search qualities
b. experience qualities
c. credence qualities
d. intangible qualities
e. variable qualities
24. Attributes which can be discerned only during consumption are called:
a. search quality
b. experience quality
c. credence quality
d. tangible quality
e. heterogenous quality

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25. Which of the following is NOT a way that service marketers can smooth demand levels
to match capacity?
a. Offer price reductions at non-peak times
b. Reduce productive capacity to match predicted fluctuations
c. Use promotional campaigns to increase demand in non-peak times
d. Have necessary facilities, equipment and staff always on standby
e. Charge premium prices during peak times
26. Since service operations’ inputs and outputs tend to vary more widely than those in the
manufacturing industry, which of the following variables can affect customer
satisfaction?
a. Staff
b. Automatic tasks
c. Attitudes
d. Speed and quality of performance
e. all of the above
27. Lovelock suggests services can be grouped into clusters based on which of the
following marketing-relevant characteristics?
a. Relationships with customers
b. Customisation versus standardisation
c. Degree of tangibility/intangibility of service processes
d. The place of service delivery
e. All of the above
28. Which of the following best represents a discrete service encounter?

a. Retail banking
b. Power supplier
c. Mobile phone company
d. Emergency surgery
e. University
29. Lovelock suggests service processes can be classified based on which of the following?
a. Whether the activity is directed at people or their possessions
b. Whether the activity is tangible or intangible
c. Whether the individual involved is part of the target segment
d. b and c

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e. a and b
30. Which of the following best represents a service directed at physical possessions?
a. Fitness centre
b. Landscaping and lawn-mowing
c. Education
d. Legal services
e. Beauty salon
31. Which of the following best represents a service directed at people’s minds?
a. Banking
b. Beauty salon
c. Insurance
d. Laundry and dry cleaning
e. Arts and entertainment
32. Which of the following mental-stimulus processes are not able to be transmitted to
customers in distant locations?
a. Music
b. Teaching
c. Religious service
d. Training
e. None of the above
33. As service delivery systems rely more heavily on information technology and self-
service, the __________ component of the service operations system is shrinking and
the service itself is moving from higher to lower levels of __________.
a. visible; contact
b. invisible; experience
c. visible; satisfaction
d. invisible; cost effectiveness
e. visible; cost effectiveness
34. Which of the following elements of a service business are not visible to customers in
high contact services?
a. Exterior facilities
b. Technical core
c. Service personnel
d. Other customers
e. Interior facilities

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Answer: b Diff:1 Page: 25
35. Which of the following elements of a service business are visible to customers in low
contact services?
a. Self-service equipment such as ATMs
b. Advertising
c. Corporate website
d. Billing/statements
e. All of the above
36. Bitner, Booms and Tetreault suggest 7 Ps of service by adding which of the following
into the traditional 4Ps?
a. People
b. Physical evidence
c. Packaging
d. Process
e. a, b and d
37. In high- and medium-contact service, a trusting relationship between client and service
provider sometimes develops to the extent that the person delivering the service
becomes __________ from the service.
a. independent
b. dependent
c. separable
d. inseparable
e. none of the above
38. Which of the following terms has been used to describe such elements as the physical
layout, ambience, background music and seating?
a. Fixed costs
b. Service quality
c. Servicescape
d. Variable costs
e. Backstage
39. Contact between customers and service personnel via face to face or through media
such as telecommunication and mail is known as:
a. customer service
b. critical phase
c. moments of truth

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d. people processing
e. critical incidents
40. Which of the following statements represents the interdependence of marketing and
other functional areas such as information technology?
a. Front line staff in high-contact services have been given more authority and
empowered to make decisions
b. In technology-driven firms, operations managers have primary responsibility for
technology infrastructures and interfaces such as websites
c. Research and development specialists design and implement innovative delivery
systems
d. Human resource strategies ensure that all employees understand the organisation’s
goals and are provided with required training in customer service
e. All of the above
True/False Questions
1. In a service encounter, value is created only by the seller.

a. True
b. False
Answer: False Diff: 1 Page: 7
2. Customers only buy services where they perceive that the total benefits obtained exceed
financial and other costs.
a. True
b. False
Answer: True Diff: 1 Page: 8
3. The distinction between services and manufactured goods has become increasingly
blurred.
a. True
b. False
4. Supplementary services can either be bundled into the initial purchase price or priced
separately.
a. True
b. False

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5. In Australia and New Zealand, for example, increased government regulation has
eliminated (or minimised) constraints on competitive activity in such industries as
freight, rail services, securities, insurance and some public utilities.
a. True
b. False
6. In some services, such as fast food restaurants, customers obtain ownership of tangible
goods.
a. True
b. False
7. Services involve actions and performances and as such can easily be inventoried.
a. True
b. False
Answer: False Diff: 3 Page 15
8. In services, tangible elements create the most value.

a. True
b. False
9. Intangible elements usually dominate value creation.

a. True
b. False
Answer: True Diff: 1 Page 15
10. A visit to a doctor’s surgery or a beauty salon is a good example of standardised

services.
a. True
b. False
11. The phrase ‘mentally intangible’ means that it is difficult for the customer to visualise
the experience in advance.
a. True
b. False
12. The acronym ‘SST’ stands for self-service technology.


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a. True
b. False
13. People, other than the service provider, do not affect customer satisfaction ratings.
a. True
b. False
Answer: False Diff: 2 Page 17
14. The time taken to provide a service will impact on future customer satisfaction.
a. True
b. False
15. Services can be classified according to whether they are customised or standardised.
a. True
b. False
16. The service ‘performance’ can be provided in terms of both tangible and intangible
services.
a. True
b. False
17. When a possession is being processed there is no real need for the customer to be
present.
a. True
b. False
18. Customers have little interest in what happens ‘backstage’.

a. True
b. False
19. New technologies have not radically changed the ways in which many service
organisations do business with their customers.
a. True

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b. False
20. Service marketers only need to be concerned with the traditional 4Ps of product/service,
place, price and promotion.
a. True
b. False

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BUS268 Chapter 1 MCQ Qns Ans

Services Marketing (Murdoch University)

StuDocu is not sponsored or endorsed by any college or university

Multiple Choice Questions

Answer: c Diff: 2 Page: 6

2. Which of the following can NOT be classified as a consumer service?

Answer: a Diff: 2 Page:6

3. Which of the following types of value are NOT provided by services?

Answer: d Diff: 3 Page: 7

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Answer: b Diff: 2 Page: 8

5. Which of the following services could be said to be the most intangible?

Answer: c Diff:2 Page: 9

6. Soft drinks would be considered as __________ while a lawyer’s advice would be

Answer: e Diff:2 Page: 9

Answer c Diff: 1 Page: 10

Answer: e Diff: 1 Page: 10

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Answer: c Diff: 2 Page: 11

Answer: b Diff: 3 Page: 13

12. In a service encounter, value is created through __________ without obtaining

Answer: e Diff: 3 Page: 13

Answer: e Diff: 2 Page: 13

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Answer: a Diff: 2 Page: 14

15. Which one of the following is NOT an example of an intangible component of a

Answer: a Diff: 2 Page: 14

Answer: d Diff: 2 Page: 15

Answer: c Diff:1 Page: 15

Answer: c Diff: 2 Page: 15

Answer: e Diff: 2 Page: 15

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Answer: e Diff: 2 Page: 16

Answer: b Diff: 1 Page: 16

Answer: d Diff: 3 Page: 16

Answer: c Diff: 3 Page: 16

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Answer: b Diff: 1 Page: 16

Answer: d Diff: 1 Page: 15

Answer: e Diff: 2 Page: 18

Answer: e Diff: 2 Page: 19

28. Which of the following best represents a discrete service encounter?

Answer: d Diff: 2 Page: 20

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Answer: e Diff: 3 Page: 21

Answer: b Diff: 2 Page: 21

Answer: e Diff: 1 Page: 21

Answer: e Diff: 1 Page: 21

Answer: a Diff: 3 Page: 25

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Answer: b Diff:1 Page: 25

Answer: e Diff: 1 Page: 25

Answer: e Diff: 2 Page: 28

Answer: d Diff: 1 Page: 28

Answer: c Diff: 1 Page: 29

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Answer: c Diff: 3 Page: 30

Answer: e Diff: 3 Page: 30

1. In a service encounter, value is created only by the seller.

Answer: False Diff: 1 Page: 7

Answer: True Diff: 1 Page: 8

Answer: True Diff: 1 Page: 9