Services are best defined as
A) Physical goods that can be touched
B) Activities or benefits offered for sale that are intangible
C) Durable products with warranties
D) Perishable consumer goods
Answer: B
Which of the following is NOT a characteristic of services?
A) Intangibility
B) Inseparability
C) Variability
D) Storability
Answer: D
Services cannot be seen, tasted, or touched before purchase. This is called
A) Perishability
B) Intangibility
C) Variability
D) Separability
Answer: B
The fact that services cannot be separated from their providers reflects
A) Variability
B) Inseparability
C) Perishability
D) Standardization
Answer: B
The variability of services means that
A) Services are identical each time
B) Service quality depends on who provides them and when
C) Services can be stored for later use
D) Services are highly standardized
Answer: B
The perishability of services implies that
A) Services can be inventoried for future demand
B) Services cannot be stored for later sale
C) Services have tangible components
D) Services never vary in quality
Answer: B
The service profit chain links service quality with
A) Employee satisfaction and customer loyalty
B) Advertising and pricing
C) Product variety and channel design
D) Manufacturing cost
Answer: A
Internal marketing means
A) Selling products inside a company
B) Motivating and training employees to serve customers well
C) Targeting internal suppliers
D) Marketing through internal media
Answer: B
Interactive marketing refers to
A) Communication between employees only
B) The service encounter between employees and customers
C) Business-to-business promotion
D) Technology-based advertising
Answer: B
A distinguishing feature of services marketing is the need for
A) Product packaging
B) Customer participation
C) High capital investment only
D) Standardized production lines
Answer: B
Which of the following is NOT part of the service-profit chain?
A) Internal service quality
B) Employee satisfaction
C) Brand awareness
D) Customer loyalty
Answer: C
The three broad types of marketing in service firms are
A) Direct, indirect, and relational
B) External, internal, and interactive
C) Consumer, industrial, and reseller
D) Digital, print, and broadcast
Answer: B
A service blueprint is used to
A) Illustrate the service delivery process visually
B) Design packaging
C) Control manufacturing cost
D) Plan promotional campaigns
Answer: A
The zone of tolerance in service quality refers to
A) Price flexibility range
B) The range between desired and adequate service levels
C) Employee performance appraisal
D) Market share variation
Answer: B
The SERVQUAL model measures service quality using
A) Price sensitivity
B) Five dimensions
C) Market segmentation
D) Product lifecycle
Answer: B
The five dimensions of SERVQUAL are
A) Reliability, Responsiveness, Assurance, Empathy, Tangibles
B) Quality, Price, Time, Value, Image
C) Trust, Design, Promotion, Value, Place
D) Responsiveness, Innovation, Cost, Delivery, Range
Answer: A
Reliability in services means
A) Prompt delivery of service
B) Performing the promised service dependably and accurately
C) Personal attention to customers
D) Tangible appearance of staff
Answer: B
Responsiveness refers to
A) Willingness to help customers and provide prompt service
B) Knowledge of staff
C) Physical facilities
D) Politeness
Answer: A
Assurance is about
A) Physical evidence of service
B) Employees’ knowledge and courtesy inspiring trust
C) Quickness of delivery
D) Pricing fairness
Answer: B
Empathy reflects
A) Technical skill
B) Caring and individualized attention
C) Low pricing
D) Advertising creativity
Answer: B
Tangibles in SERVQUAL represent
A) Physical evidence such as equipment, facilities, appearance
B) Reliability of processes
C) Emotional appeal
D) Responsiveness of staff
Answer: A
The gap model of service quality identifies
A) Differences between expectations and perceptions
B) Advertising gaps
C) Price elasticity
D) Technology differences
Answer: A
The most critical gap in the gap model is
A) Gap between expected and perceived service
B) Gap between management and employees
C) Gap between advertising and pricing
D) Gap between suppliers and intermediaries
Answer: A
The process of differentiating a service by adding unique features is
A) Service commoditization
B) Service innovation
C) Service customization
D) Service standardization
Answer: B
A high-contact service is one in which
A) Customer interaction is limited
B) Customers participate extensively in the process
C) Automation replaces people
D) The service is standardized
Answer: B
Services that require little customer contact are called
A) Core services
B) Low-contact services
C) Variable services
D) Hybrid services
Answer: B
A company’s physical environment that influences customer perceptions is termed
A) Service scape
B) Market scape
C) Value chain
D) Demand curve
Answer: A
A moment of truth in services marketing refers to
A) Every customer interaction that forms an impression of the service
B) Pricing decision points
C) Advertising evaluation
D) Financial audit
Answer: A
Service recovery involves
A) Resolving problems to restore customer satisfaction
B) Increasing market share
C) Cost reduction
D) Retrenching employees
Answer: A
Empowering frontline employees means
A) Allowing them to take decisions to satisfy customers
B) Restricting their authority
C) Assigning repetitive tasks only
D) Outsourcing responsibilities
Answer: A
Customer loyalty in services is driven primarily by
A) Perceived service quality and trust
B) High price promotions
C) Frequent advertising
D) Market size
Answer: A
The “people” component in the services marketing mix refers to
A) Employees and customers involved in delivery
B) Government regulations
C) Demographic profile only
D) Shareholders
Answer: A
Physical evidence in services includes
A) Brochures, uniforms, signage, and facility design
B) Product features
C) Price lists
D) Supplier contracts
Answer: A
The “process” element in services marketing concerns
A) The system by which the service is delivered
B) Pricing levels
C) Product assortment
D) Channel logistics
Answer: A
The extended marketing mix for services is known as the
A) 5 Ps
B) 7 Ps
C) 4 Cs
D) 3 Rs
Answer: B
Services marketing requires an emphasis on
A) Managing customer expectations
B) Reducing costs alone
C) Eliminating personal contact
D) Price competition
Answer: A
Which pricing strategy is common in services due to perishability?
A) Differential pricing
B) Cost-plus pricing
C) Predatory pricing
D) Skimming
Answer: A
Yield management aims to
A) Match service capacity with fluctuating demand
B) Reduce employee turnover
C) Maximize brand awareness
D) Increase advertising reach
Answer: A
The process of adding physical goods to services to enhance value is called
A) Tangibilizing the service
B) Service elimination
C) Cost diversification
D) Product standardization
Answer: A
Service innovation success depends on
A) Customer co-creation and feedback integration
B) Product standardization
C) Cost control alone
D) Technology imitation
Answer: A
A “core service” provides
A) The main benefit or problem-solving capability
B) Peripheral add-ons
C) Only aesthetic appeal
D) Low-cost advantage
Answer: A
Augmented services include
A) Additional benefits such as support, installation, or warranty
B) The core function only
C) Tangible products
D) Internal training programs
Answer: A
Service differentiation can be achieved through
A) People, process, and physical evidence
B) Pricing alone
C) High advertising spend
D) Commodity strategy
Answer: A
The key challenge in global service marketing is
A) Standardizing delivery while respecting local culture
B) Ignoring cultural norms
C) Reducing all personal interaction
D) Maintaining identical pricing globally
Answer: A
“Service quality audits” help managers
A) Identify performance gaps and training needs
B) Measure advertising ROI
C) Evaluate cost accounting
D) Plan product distribution
Answer: A
A customer who repeatedly uses the same airline for perceived reliability demonstrates
A) Behavioral loyalty
B) Situational loyalty
C) Brand awareness
D) Variety-seeking behavior
Answer: A
The term “internal service quality” refers to
A) Quality of support provided to employees within the company
B) Quality of external advertising
C) Customer feedback surveys
D) Supplier relationships
Answer: A
Service culture is built through
A) Leadership commitment and employee empowerment
B) Technology alone
C) Price discounting
D) Outsourcing staff
Answer: A
In services, managing demand and capacity ensures
A) Balanced workloads and improved customer experience
B) Reduced brand recognition
C) Higher variability
D) Fixed costs only
Answer: A
The most critical factor for success in service marketing is
A) Consistent quality and customer satisfaction
B) Frequent product changes
C) Heavy price discounts
D) Limiting customer interaction
Answer: A
Which of the following is NOT a challenge faced in service marketing?
A) Intangibility
B) Inseparability
C) Variability
D) Divisibility
Answer: D
The service triangle connects which three components?
A) Company, Employees, Customers
B) Suppliers, Retailers, Consumers
C) Product, Price, Place
D) Management, Operations, Finance
Answer: A
The concept of moment of truth emphasizes
A) Key points where customers interact with service providers
B) Price negotiation
C) Advertising effectiveness
D) Supplier contracts
Answer: A
Which of the following is an example of a pure service?
A) Restaurant meal
B) Airline flight
C) Legal advice
D) Fast food combo
Answer: C
A hybrid offering consists of
A) Equal parts of goods and services
B) Tangible products only
C) Only digital products
D) Standardized outputs
Answer: A
The core service of a hotel is
A) Providing lodging and comfort
B) Restaurant operations
C) Event management
D) Gym access
Answer: A
A supplementary service offered by a bank is
A) Customer support helpline
B) Cash withdrawal
C) Account balance
D) Core financial transaction
Answer: A
Which is an example of a facilitating service?
A) Reservation system
B) Loyalty program
C) Room upgrade
D) Welcome drink
Answer: A
“Supporting services” add
A) Extra value and differentiation
B) Lower quality
C) Standardization
D) Core product functions
Answer: A
The service continuum ranges from
A) Pure tangible goods to pure services
B) B2B to B2C
C) High price to low price
D) Customer to employee
Answer: A
Service innovation typically follows
A) Customer need identification
B) Cost-cutting first
C) Technology imitation
D) Market withdrawal
Answer: A
Service blueprinting helps managers to
A) Map customer and employee interactions
B) Design advertising campaigns
C) Track competitor pricing
D) Define corporate strategy
Answer: A
Frontstage activities in a service blueprint are
A) Visible to the customer
B) Back-office processes
C) Internal management reviews
D) Supplier negotiations
Answer: A
Backstage activities refer to
A) Behind-the-scenes processes not visible to customers
B) Customer waiting area
C) Public relations
D) Retail promotions
Answer: A
The purpose of fail-proofing in services is to
A) Prevent errors and defects in delivery
B) Reduce price
C) Increase inventory
D) Standardize packaging
Answer: A
Service recovery paradox suggests
A) Effective recovery can increase customer loyalty after failure
B) Poor recovery reduces brand equity
C) Customers forget service failures easily
D) No recovery is needed for minor issues
Answer: A
Customer co-production means
A) Customers play a role in creating the service experience
B) Customers design advertising
C) Employees supervise customers
D) Outsourcing services
Answer: A
Which strategy helps manage demand fluctuations in services?
A) Differential pricing
B) Cost leadership
C) Standardized offerings
D) Batch production
Answer: A
Queuing systems are used to
A) Manage customer waiting experience
B) Measure pricing elasticity
C) Reduce advertising cost
D) Determine market share
Answer: A
The idle capacity problem in services occurs when
A) Demand is lower than available capacity
B) Supply exceeds raw materials
C) Costs are higher than prices
D) Advertising fails
Answer: A
Service guarantees are designed to
A) Reduce perceived risk and build trust
B) Increase price
C) Limit demand
D) Replace employees
Answer: A
A well-designed service guarantee should be
A) Unconditional and meaningful
B) Ambiguous and restrictive
C) Complex and lengthy
D) Optional for customers
Answer: A
The Service Quality Model (Gronroos) includes
A) Technical and functional quality dimensions
B) Tangible and intangible assets
C) Pricing and promotion
D) Technology and delivery
Answer: A
Technical quality in services measures
A) What customers actually receive
B) How service is delivered
C) Facility appearance
D) Employee uniform
Answer: A
Functional quality measures
A) How the service is delivered
B) Cost efficiency
C) Brand equity
D) Production quantity
Answer: A
The SERVQUAL gap between expectation and perception is
A) Gap 5
B) Gap 3
C) Gap 1
D) Gap 2
Answer: A
Gap 1 in the SERVQUAL model represents
A) Management perception vs customer expectations
B) Service delivery vs external communication
C) Expected vs perceived service
D) Internal vs external communication
Answer: A
A company can close the communication gap by
A) Aligning advertising promises with actual service
B) Cutting marketing budgets
C) Outsourcing customer service
D) Ignoring complaints
Answer: A
Which is a key driver of perceived service quality?
A) Reliability
B) Advertising spend
C) Market share
D) Price discount
Answer: A
The service encounter is often called
A) The moment of truth
B) Product lifecycle
C) Brand equity point
D) Marketing funnel
Answer: A
Which of the following tools helps measure customer satisfaction over time?
A) SERVPERF
B) ROI
C) Cost index
D) Balanced scorecard
Answer: A
The goal of service design is to
A) Create seamless, efficient, customer-centered processes
B) Lower wages
C) Reduce staff interactions
D) Eliminate technology
Answer: A
The process of balancing customer demand with available capacity is
A) Yield management
B) Cost engineering
C) Value analysis
D) Segmentation
Answer: A
In relationship marketing, services firms focus on
A) Long-term customer retention
B) Short-term sales
C) Price competition
D) Mass production
Answer: A
Which of the following represents a high-contact service?
A) Hospital treatment
B) ATM withdrawal
C) Online ticket booking
D) Vending machine
Answer: A
Which of the following represents a low-contact service?
A) Restaurant dining
B) Self-service car wash
C) Personal training
D) Haircut
Answer: B
Customer empowerment in services means
A) Giving customers tools to customize their experience
B) Reducing their role in production
C) Limiting communication
D) Outsourcing service delivery
Answer: A
Employee empowerment improves
A) Responsiveness and service recovery effectiveness
B) Cost accounting
C) Advertising recall
D) Standardization
Answer: A
Frontline employees are often called
A) Boundary spanners
B) Supervisors
C) Decision-makers
D) Planners
Answer: A
The service scape affects
A) Customer emotions and behavior
B) Employee turnover
C) Pricing strategy
D) Market share only
Answer: A
A key feature of service culture is
A) Commitment to consistent quality and customer focus
B) Dependence on cost minimization
C) Hierarchical control
D) Profit maximization alone
Answer: A
A customer journey map identifies
A) All touchpoints and experiences along the service process
B) Advertising channels
C) Distribution partners
D) Employee schedules
Answer: A
Service scripts are used to
A) Guide employees during service interactions
B) Replace training programs
C) Automate billing
D) Design pricing
Answer: A
Service demand forecasting helps firms
A) Prepare capacity and staffing plans
B) Predict advertising ROI
C) Track production defects
D) Benchmark competitors
Answer: A
Customer delight goes beyond satisfaction by
A) Exceeding expectations
B) Meeting minimum requirements
C) Cutting costs
D) Offering discounts
Answer: A
The flywheel of service excellence starts with
A) Hiring and training the right employees
B) Reducing advertising costs
C) Expanding product lines
D) Lowering service standards
Answer: A
The key challenge of variability in services can be reduced by
A) Standardizing procedures and training staff
B) Automating advertising
C) Lowering prices
D) Reducing capacity
Answer: A
Customer retention is often more profitable because
A) Existing customers are cheaper to serve
B) New customers spend more
C) It reduces service encounters
D) It decreases loyalty
Answer: A
A service guarantee increases profitability when
A) It builds trust and differentiates the brand
B) It increases refunds
C) It lowers employee morale
D) It complicates delivery
Answer: A
The ultimate goal of designing and managing services is
A) Consistent quality, customer satisfaction, and loyalty
B) Frequent cost reductions
C) Market share expansion only
D) Product standardization
Answer: A
A service firm’s key competitive advantage often lies in
A) Product packaging
B) Customer relationship and experience
C) Low manufacturing cost
D) Advertising volume
Answer: B
The intangible nature of services makes it important to
A) Build strong brand images and trust cues
B) Focus only on price cuts
C) Avoid promotion
D) Standardize all offerings globally
Answer: A
When a service cannot be separated from its provider, firms must focus on
A) Employee training and interpersonal skills
B) Increasing automation only
C) Product redesign
D) Pricing control
Answer: A
The best method to evaluate service quality is
A) Customer perception measurement
B) Sales volume only
C) Production output
D) Profit margin
Answer: A
The Gaps Model suggests that closing all gaps leads to
A) Service excellence and customer satisfaction
B) Higher production costs
C) Reduced employee involvement
D) Market saturation
Answer: A
In service design, fail points represent
A) Moments where errors are most likely to occur
B) Customer feedback forms
C) Competitor weaknesses
D) High sales locations
Answer: A
Blueprint analysis identifies
A) Service process flow and customer contact points
B) Advertising channels
C) Production costs
D) Inventory turnover
Answer: A
Which statement about services is TRUE?
A) Services are performances rather than objects
B) Services can be inventoried
C) Services are independent of people
D) Services are always tangible
Answer: A
Service variability can be minimized through
A) Employee training and automation
B) Frequent rebranding
C) Aggressive advertising
D) Price adjustments
Answer: A
Service perishability requires firms to
A) Manage demand and capacity effectively
B) Increase storage
C) Extend shelf life
D) Export services
Answer: A
Which component of the 7 Ps is unique to service marketing?
A) Product, Price, Place
B) People, Process, Physical evidence
C) Promotion, Price, Product
D) Cost, Convenience, Communication
Answer: B
The term customer experience management (CEM) refers to
A) Tracking, shaping, and enhancing every interaction with customers
B) Reducing product prices
C) Increasing advertising budgets
D) Controlling employee turnover
Answer: A
The service factory concept refers to
A) Highly standardized, low-contact services such as airlines or hotels
B) Small local services
C) Governmental institutions
D) Nonprofit agencies only
Answer: A
Professional services like consulting are typically
A) High-contact and customized
B) Low-contact and standardized
C) Mass-produced
D) Non-differentiated
Answer: A
Employee empowerment enhances service quality because
A) Staff can solve problems instantly
B) It reduces supervision cost only
C) It replaces training
D) It increases bureaucracy
Answer: A
A service encounter is
A) Any direct interaction between customer and provider
B) Advertising exposure
C) Supplier meeting
D) Brand awareness campaign
Answer: A
The first step in service design is
A) Understanding customer needs
B) Training staff
C) Setting prices
D) Promoting the offer
Answer: A
Moment of truth interactions must be
A) Managed for positive impressions
B) Avoided
C) Automated completely
D) Outsourced
Answer: A
The role of internal marketing is to
A) Treat employees as internal customers
B) Reduce payroll
C) Eliminate training
D) Focus solely on external customers
Answer: A
A successful service recovery requires
A) Apology, compensation, and quick response
B) Blaming customers
C) Ignoring feedback
D) Delaying resolution
Answer: A
Customer delight occurs when
A) Perceived performance exceeds expectations
B) Expectations are barely met
C) Prices are lowered
D) Competitors exit the market
Answer: A
Word-of-mouth promotion in services is
A) A key influencer of customer acquisition
B) Irrelevant
C) Controlled by advertising
D) Unmeasurable
Answer: A
The most effective way to tangibilize a service is through
A) Symbols, testimonials, and physical cues
B) Pricing strategy
C) Product bundling
D) Trade promotions
Answer: A
Employee morale directly affects
A) Customer satisfaction and loyalty
B) Brand registration
C) Cost accounting
D) Advertising spend
Answer: A
A front-line employee represents
A) The brand’s image in real time
B) Middle management
C) Board of directors
D) Supplier relations
Answer: A
The cycle of failure in services occurs when
A) Firms cut costs at the expense of employee satisfaction
B) Service recovery is efficient
C) Training is increased
D) Empowerment is high
Answer: A
The opposite, the cycle of success, begins with
A) Employee satisfaction and retention
B) Automation
C) Price reductions
D) Brand awareness
Answer: A
The service quality gap 2 arises when
A) Management perception ≠ service-quality specification
B) Employee performance ≠ customer expectation
C) Communication ≠ advertising
D) Price ≠ value
Answer: A
Service differentiation can be achieved through
A) People, physical evidence, and process
B) Pricing only
C) Advertising repetition
D) Location exclusivity
Answer: A
Relationship marketing seeks to
A) Build long-term customer loyalty rather than short-term sales
B) Reduce customer interaction
C) Focus on one-time transactions
D) Maximize price promotions
Answer: A
A service brand is built primarily through
A) Customer experience and consistency
B) Product packaging
C) Mass production
D) Discount offers
Answer: A
The zone of tolerance is narrower when
A) The service is important to the customer
B) The price is low
C) The brand is new
D) The service is standardized
Answer: A
Customer expectations are influenced by
A) Past experiences, word-of-mouth, and marketing communications
B) Production cost
C) Supply chain partners
D) Employee wages
Answer: A
Demand-based pricing in services aims to
A) Match prices with customer value perception
B) Lower price below cost
C) Ignore seasonality
D) Fix uniform rates
Answer: A
Blueprint symbols such as lines of visibility and interaction represent
A) Boundaries between frontstage and backstage activities
B) Financial ratios
C) Product hierarchies
D) Customer demographics
Answer: A
Capacity management ensures
A) Resources are used efficiently during demand fluctuations
B) Higher prices always
C) Advertising reach
D) Employee layoffs
Answer: A
A service script helps
A) Standardize interactions for consistent experience
B) Automate production
C) Replace training
D) Eliminate employees
Answer: A
Customer complaints are valuable because they
A) Identify service gaps and recovery opportunities
B) Reduce costs
C) Damage reputation only
D) Should be ignored
Answer: A
Service metrics like Net Promoter Score (NPS) measure
A) Likelihood of customer recommendation
B) Profit margin
C) Employee turnover
D) Market share
Answer: A
A loyalty program in services aims to
A) Encourage repeat purchases and retention
B) Reduce customer database
C) Limit personalization
D) Raise short-term sales only
Answer: A
In service design, fail-safe systems (poka-yoke) are used to
A) Prevent or quickly detect errors
B) Increase manual work
C) Reduce automation
D) Delay recovery
Answer: A
Customer lifetime value (CLV) helps service firms
A) Focus marketing on profitable relationships
B) Set daily sales targets
C) Reduce product range
D) Fix advertising budgets
Answer: A
Service productivity is improved by
A) Balancing efficiency and quality
B) Cutting training costs
C) Lowering customer involvement
D) Reducing prices
Answer: A
A shared service model enables
A) Multiple units to use the same service resources efficiently
B) Brand cannibalization
C) Customer segmentation
D) Supplier exclusivity
Answer: A
Technology-enabled self-service (e.g., ATMs, kiosks) provides
A) Convenience and cost savings
B) Personal touch only
C) Lower reliability
D) No customization
Answer: A
AI chatbots in service design primarily enhance
A) Responsiveness and 24/7 support
B) Tangibility
C) Price elasticity
D) Employee turnover
Answer: A
The service encounter triad consists of
A) Customer, Contact personnel, Service organization
B) Supplier, Distributor, Retailer
C) Buyer, Seller, Agent
D) Producer, Consumer, Middleman
Answer: A
Customer orientation training focuses on
A) Teaching employees to understand and meet customer needs
B) Financial accounting
C) Technical repairs
D) Advertising design
Answer: A
A service paradox occurs when
A) Customers demand higher quality but resist higher prices
B) Service quality and cost both decrease
C) Automation eliminates employees
D) Advertising misleads
Answer: A
The final objective of service management is
A) Delivering superior value and building enduring relationships
B) Short-term profitability only
C) Sales maximization regardless of quality
D) Brand imitation
Answer: A
