Chapter 3: Fundamental Differences Between Goods and Services

Question 1

Philosophical viewpoint that the primary role of marketers is to deliver service. Consequently, goods are simply a means of rendering a service to the customer.

Answer 1

Service-dominant logic

Question 2

A distinguishing characteristics of services that makes them unable to be touched or sensed in the same manner as physical goods.

Answer 2

Intangibility

Question 3

The physical characteristics that surround a service to assist consumers in making service evaluations, such as the quality of furnishings, the appearance of personnel, or the quality of paper stock used to produce the firm’s brochure.

Answer 3

physical evidence/tangible clues

Question 4

Sources such as friends, family, and other opinion leaders that consumers use to gather information about a service.

Answer 4

Personal sources of information

Question 5

Costing method that breaks down the organization into a set of activities, and activities into tasks, which convert materials, labour, and technology into outputs.

Answer 5

Activity-based costing

Question 6

A distinguishing characteristic of services that reflects the interconnections among the service provider, the customer involved in receiving the service, and other customers sharing the service experience.

Answer 6

Inseparability

Question 7

A specific interaction between a customer and a service provider.

Answer 7

Critical incident

Question 8

The term used to describe customers who share a service experience.

Answer 8

Other customers

Question 9

A strategy service personnel can implement that minimizes the impact of other customers on each individual customer’s service experience (eg. separating smokers from non-smokers in a restaurant).

Answer 9

Consumer management

Question 10

A way service firms that mass-produce combat inseparability, involving multiple locations to limit the distance the consumer’s have to travel and staffing each location differently to serve a local market.

Answer 10

Multisite locations

Question 11

Another name for multisite locations.

Answer 11

Factories in the field

Question 12

A distinguishing characteristic of services that reflects the variation in consistency from one service transaction to the next.

Answer 12

Heterogeneity

Question 13

Taking advantage of the variation inherent in each service encounter by developing services that meet each customer’s exact specifications.

Answer 13

Customization

Question 14

The goal of _______ is to produce a consistent service product from one transaction to the next.

Answer 14

Standardization

Question 15

A distinguishing characteristic of services in that they cannot be saved, their unused capacity cannot be reserved, and they cannot be inventoried.

Answer 15

Perishability

Question 16

Pricing strategies often used by service firms to help smooth demand fluctuations, such as offering “matinee” prices or “early bird specials” to shift demand from peak to nonpeak periods.

Answer 16

Creative pricing

Question 17

A strategy to help smooth demand fluctuations in which consumers ultimately request a portion of the firm’s arrives for a particular time slot.

Answer 17

Reservation system

Question 18

Services provided for consumers to minimize their perceived waiting time, such as driving ranges at golf courses, arcades at movie theaters, or reading materials in doctor’s offices.

Answer 18

Complimentary services

Question 19

A strategy in which service providers use their downtime to prepare in advance for peak periods or to market to different target markets that follow different demand patterns than the firm’s traditional market segment.

Answer 19

Nonpeak demand development

Question 20

Strategy to increase the supply of service by forming a type of co-op among service providers that permits co-op members to expand their supply or service as a whole.

Answer 20

Capacity sharing

Question 21

Planning for future expansion in advance and taking a long-term orientation to physical facilities and growth.

Answer 21

Expansion preparation

Question 22

A supply strategy in which a service firm used an outside party to service customers and thereby save on costs, personnel, etc.

Answer 22

(Utilization of) third parties

Question 23

A supply strategy that increases the supply of service by having the customer perform part of the service, such as providing a salad bar or dessert bar in a restaurant.

Answer 23

(Increase) Customer participation