Question 1

If given a choice, a service company that has adopted a customer retention strategy would prefer to use which of the following promotional tools?

Accepted Answer

A)   Word-of-mouth
B)   Personalized direct mail
C)   Network television advertising
D)   Publicity
E)   Advertising in prestige magazinesF) A) and E)
G) A) and D)

Question 2

Traditional measures of company performance:

Accepted Answer

A)   Have relied on financial indicators such as profit, sales and return on investment
B)   Predict the future performance of companies as well as the results of yesterday's decisions
C)   Measure operational process and customer satisfaction as well as other quantitative factors
D)   Are useful in measuring the effect of a short-term increase of service quality on a company's bottom line
E)   Have used the soft measures primarilyF) None of the above
G) B) and C) A

Question 3

To use the return on service quality (ROSQ)  methodology for making decisions about service quality investments, a CEO must NOT assume:

Accepted Answer

A)   Quality is an investment
B)   Quality efforts are financially accountable
C)   It is possible to spend too much on quality
D)   Not all quality expenditures are equally valid
E)   All quality investments are a good investmentF) All of the above
G) A) and D)

Question 4

ROSQ (return on service quality) is used to help managers make decisions about service quality investments.

Accepted Answer

A) True 
 B)False

Question 5

Many companies do not identify and act on the correct non-financial measures. One mistake the companies make is _______ that involves not verifying that the non-financial measures lead to financial performance. They do not analyze the relationships to validate the linkages.

Accepted Answer

A)   Not linking measures to strategy
B)   Not validating the links
C)   Not setting the right performance targets
D)   Measuring incorrectly
E)   Not creating a balanced scorecardF) C) and D)
G) B) and C)

Question 6

Which approach to measuring service quality assumes that not all expenditures aimed at improving quality are equally valid?

Accepted Answer

Return on ...

Question 7

An organization that wanted to create quantitative measures of its innovation and learning should use:

Accepted Answer

A)   Rate of customer defection
B)   The 80/20 principle
C)   Long-term value of innovation to customers
D)   The operating efficiencies continuum
E)   Performance-to-goal percentagesF) C) and D)
G) None of the above

Question 8

_____ is the total of the discounted lifetime value summed over all the firm's customers.

Accepted Answer

A)   The customer equilibrium
B)   Customer equity
C)   Customer empowerment
D)   Fiscal value
E)   Service blueprint valueF) B) and C)
G) A) and C)

Question 9

Executives most frequent questions about how to improve service quality are concerned with:

Accepted Answer

A)   Cost reduction and environmental impact
B)   Good investment and high return
C)   Following federal regulations and employee satisfaction
D)   Operating in the most economic environments and maintaining a satisfactory level of customer retention
E)   Cost reduction and downsizingF) A) and E)
G) A) and D)

Question 10

What is the key determinant of service quality, customer retention and profits?

Accepted Answer

The servic...

Question 11

Which of the following statements about providing customers with service quality is true?

Accepted Answer

A)   All customers must be provided the same superior quality of service
B)   All customers are worth attracting and keeping through the use of service quality
C)   The same services marketing strategy should be used with all customers
D)   All customers will be profitable in the long run; therefore, each is deserving of quality service
E)   Links exist among customer satisfaction, service quality and increased purchasesF) A) and E)
G) All of the above

Question 12

All of the following are measures within the innovation and learning perspective of the balanced performance scorecard EXCEPT:

Accepted Answer

A)   Employee skills
B)   Return on innovation
C)   Number of new products
D)   Time spent talking to customers
E)   Service expectationsF) B) and E)
G) A) and C) E

Question 13

Which of the following statements about customer perceptions of service and consumer purchase intentions are true?

Accepted Answer

A)   There is no relationship between customer perceptions of service and any consumer intentions
B)   While there is no relationship between customer perceptions of service and purchase intentions, there is a strong relationship between perceptions of superior service and increased word-of-mouth communications
C)   Researchers suspect there is a strong relationship between a customer perception of service and his or her intent to buy
D)   Customer perceptions of service affect consumer intentions in several positive ways-including the purchase intention
E)   Customer experiences-not perceptions-affect consumer behavioral intentionsF) C) and D)
G) A) and B) D

Question 14

All of the following are measurement areas contained in a balanced performance scorecard EXCEPT:

Accepted Answer

A)   Competitor measures
B)   Customer perceptual measures
C)   Financial measures
D)   Innovation and learning
E)   Operational measuresF) B) and E)
G) A) and B)

Question 15

In 1991 when the US. General Accounting Office (GAO)  studied the financial effect of service quality on companies that had won the Malcolm Baldrige National Quality Award, it determined improved service did NOT:

Accepted Answer

A)   Increased the market share of these firms
B)   Improved the return on sales for these firms
C)   Improved the sales per employees for these firms
D)   Increased these firms' returns on assets
E)   Increased advertisingF) B) and E)
G) B) and D)

Question 16

Companies can actually measure increases and decreases in revenue from the retention and defection of customers.

Accepted Answer

A) True 
 B)False

Question 17

Which of the measurement areas in the balanced performance scorecard is the most difficult to capture quantitatively?

Accepted Answer

A)   Operations measures
B)   Financial measures
C)   Customer measures
D)   Sales measures
E)   Innovation and learning measuresF) B) and C)
G) A) and E)

Question 18

What is ROSQ? Why would the manager of a large management consulting firm use ROSQ to determine which service offerings customers like and which customers don't really care for? Explain the assumptions that the manager must accept in order to use this approach.

Accepted Answer

ROSQ (return on service quality) looks a...

Question 19

Which of the following statements about service quality and market share is NOT true?

Accepted Answer

A)   When service is good, a company can charge more for its services than its competitors can and still maintain or even increase its market share
B)   The implementation of superior service yields higher-than-normal market share growth
C)   The relationship between service quality and market share is hard to discern because it happens over time
D)   Advertising that an organization offers service excellence without sufficient service quality to back it up will NOT increase market share
E)   Advertising that an organization offers service excellence without sufficient service quality to back it up will increase market shareF) All of the above
G) A) and B)

Question 20

What area of the balanced performance scorecard is a company studying when it examines transaction time, throughput time, reduction in waste and process quality?

Accepted Answer

Operation ...

Exam 18: The Financial and Economic Impact of Service

If given a choice, a service company that has adopted a customer retention strategy would prefer to use which of the following promotional tools?

Correct AnswerverifiedShow Answer

Traditional measures of company performance:

Correct AnswerverifiedA

To use the return on service quality (ROSQ) methodology for making decisions about service quality investments, a CEO must NOT assume:

Correct AnswerverifiedShow Answer

ROSQ (return on service quality) is used to help managers make decisions about service quality investments.

Correct AnswerverifiedShow Answer

Many companies do not identify and act on the correct non-financial measures. One mistake the companies make is _______ that involves not verifying that the non-financial measures lead to financial performance. They do not analyze the relationships to validate the linkages.

Correct AnswerverifiedShow Answer

Which approach to measuring service quality assumes that not all expenditures aimed at improving quality are equally valid?

Correct AnswerverifiedReturn on ...View AnswerShow Answer

An organization that wanted to create quantitative measures of its innovation and learning should use:

Correct AnswerverifiedShow Answer

_____ is the total of the discounted lifetime value summed over all the firm's customers.

Correct AnswerverifiedShow Answer

Executives most frequent questions about how to improve service quality are concerned with:

Correct AnswerverifiedShow Answer

What is the key determinant of service quality, customer retention and profits?

Correct AnswerverifiedThe servic...View AnswerShow Answer

Which of the following statements about providing customers with service quality is true?

Correct AnswerverifiedShow Answer

All of the following are measures within the innovation and learning perspective of the balanced performance scorecard EXCEPT:

Correct AnswerverifiedE

Which of the following statements about customer perceptions of service and consumer purchase intentions are true?

Correct AnswerverifiedD

All of the following are measurement areas contained in a balanced performance scorecard EXCEPT:

Correct AnswerverifiedShow Answer

In 1991 when the US. General Accounting Office (GAO) studied the financial effect of service quality on companies that had won the Malcolm Baldrige National Quality Award, it determined improved service did NOT:

Correct AnswerverifiedShow Answer

Companies can actually measure increases and decreases in revenue from the retention and defection of customers.

Correct AnswerverifiedShow Answer

Which of the measurement areas in the balanced performance scorecard is the most difficult to capture quantitatively?

Correct AnswerverifiedShow Answer

What is ROSQ? Why would the manager of a large management consulting firm use ROSQ to determine which service offerings customers like and which customers don't really care for? Explain the assumptions that the manager must accept in order to use this approach.

Correct AnswerverifiedROSQ (return on service quality) looks a...View AnswerShow Answer

Which of the following statements about service quality and market share is NOT true?

Correct AnswerverifiedShow Answer

What area of the balanced performance scorecard is a company studying when it examines transaction time, throughput time, reduction in waste and process quality?

Correct AnswerverifiedOperation ...View AnswerShow Answer

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Return on ...
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The servic...
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Operation ...
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