Question 1

Which of the following is an example of an economic incentive to improve asset utilization?
A) Fixed costs are relatively easy to cover because not much capital is tied up in service facilities
B) Incremental costs of extended hours may be covered by increased revenue and decreased crowding
C) Advertising expenditures can be reduced because of the substantial increases in positive word-of-mouth
D) Workers are relatively less expensive when they work more hours
E) The cost to keep lights on and equipment running is not easily recouped by a few extra patrons.

Accepted Answer

Option B suggests that extended hours may result in increased revenue, thus incentivizing the organization to utilize its assets better. This is because the increased revenue can help cover the incremental cost incurred due to extended hours while also reducing crowding, ultimately leading to improved asset utilization. The other options either do not directly relate to improving asset utilization or do not provide an economic incentive to do so.

Question 2

All customers will eventually voluntarily shift from high-contact delivery environments to new electronic channels.

Accepted Answer

While many customers may shift to electronic channels, not all customers will prefer it and some may still prefer traditional high-contact delivery environments. Factors such as personal preferences, trust in technology, and the complexity of the product/service may influence their choice.

Question 3

What three interrelated elements does distribution embrace in a typical sales cycle?
A) Information and process flow, promotion flow, and place flow.
B) Information and promotion flow, negotiation flow, and product flow.
C) Product flow, price flow, and place flow.
D) Product flow, promotion flow, and place flow.
E) Process flow, promotion flow, and place flow.

Accepted Answer

B

Question 4

Banks seeking to move into investment services will often act as the distributor for mutual fund products created by an investment firm that lacks extensive distribution channels of its own.

Accepted Answer

This statement is true. Banks may partner with investment firms to distribute mutual fund products to their clients.

Question 5

A local presence may be necessary when exporting information-based services for which of the following reasons?
A) Appeasing local citizens.
B) Conducting secondary research.
C) Building personal relationships.
D) Bargaining for cheaper facilities.
E) Restructuring out of date systems.

Accepted Answer

Building personal relationships is necessary when exporting information-based services as it helps in understanding the local market nuances, culture, and norms. Having a local presence allows for face-to-face interactions that can facilitate trust, communication, and relationship-building with potential clients or partners. This can ultimately lead to better business opportunities and success in the local market. The other options listed are not directly related to the need for a local presence when exporting information-based services.

Question 6

The need for economies of scale often restricts choice of location for service facilities.

Accepted Answer

Economies of scale require large scale production or delivery of services which can limit the choice of location for service facilities as they need to be centralized and accessible to a broader population.

Question 7

____________ has become a popular way to expand delivery of an effective service concept, embracing all of the seven Ps, to multiple sites, without the level of investment capital that would be needed for rapid expansion of company-owned and managed sites.
A) The Internet
B) International trade
C) Franchising
D) Sole proprietorship
E) Limited partnership

Accepted Answer

Franchising allows a company to expand its service concept to multiple locations without the same level of investment capital required for company-owned sites. Franchisees invest their own capital to open and operate a site, while the franchisor provides support and guidelines for uniformity in service delivery. This method embraces all seven Ps: product, price, promotion, place, people, process, and physical evidence. The Internet and international trade may aid in expansion, but do not necessarily involve franchising as a business model. Sole proprietorship and limited partnerships refer to types of businesses, not methods of expansion.

Question 8

In general, service providers are more likely to visit corporate customers at their premises than to visit individuals in their homes.

Accepted Answer

This is generally true because corporate customers often require more complex and tailored services that need to be provided on-site, whereas individuals are more likely to receive standard services that can be provided remotely or at a centralized location.

Question 9

The convenience of service factory locations and operational schedules assumes little importance when a customer has to be physically present throughout the service delivery or even just to initiate and terminate the transaction.

Accepted Answer

The statement implies that the convenience of service factory locations and operational schedules is important, which contradicts the truth. Therefore, the answer is false.

Question 10

Physical logistics services now find themselves competing with telecommunications services. This is a result of the instantaneous delivery capability of information-based products.

Accepted Answer

With the rise of e-commerce and online shopping, physical logistics services are competing with telecommunications services due to the instant delivery capability of information-based products. Customers expect fast and reliable delivery of both physical goods and digital products, creating a need for logistics companies to integrate technology and provide efficient transportation and delivery solutions.

Question 11

Which of the following is NOT listed as a factor in favoring adoption of transnational strategies?
A) Market
B) Language
C) Competition
D) Technology
E) Cost

Accepted Answer

Language barriers can make it difficult to implement a transnational strategy as communication and cultural misunderstandings can occur across global operations. The other factors listed, such as market, competition, technology, and cost, can all create opportunities or incentives for a company to adopt a transnational strategy.

Question 12

People, possession, and information-based services have strikingly similar requirements on an international distribution strategy.

Accepted Answer

People, possession, and information-based services often have different requirements on an international distribution strategy due to their inherent characteristics. People-based services (like education or healthcare) often require the physical presence of the customer, possession-based services (like retail or repair services) involve tangible products, and information-based services (like consulting or software) can often be distributed digitally, leading to varying strategic needs.

Question 13

Which of the following is NOT one of the factors that encourage extended operating hours?
A) Availability of employees to work during "social" hours.
B) Economic pressure from consumers.
C) Changes in legislation.
D) Economic incentives to improve asset utilization.
E) Automated self-service facilities.

Accepted Answer

Availability of employees to work during "social" hours does not necessarily encourage extended operating hours. Instead, it's factors like economic pressure from consumers, changes in legislation, economic incentives to improve asset utilization, and automated self-service facilities that directly encourage businesses to operate for longer periods.

Question 14

Franchising is not an appealing strategy for growth-oriented service firms because franchisees tend to be less motivated and less concerned about quality than managers in company-owned stores.

Accepted Answer

This statement is not necessarily true. While it is true that franchisees may have different levels of motivation and attention to quality compared to company-owned store managers, there are many successful service firms that have expanded through franchising. The success of franchising as a growth strategy depends on various factors such as the business model, the quality control measures put in place, and the support provided to franchisees.

Question 15

Franchisors usually seek to exercise control over all aspects of the service performance through tightly defined ____________.
A) service standards
B) procedures
C) scripts
D) physical presentations
E) all of the above

Accepted Answer

Franchisors seek to maintain consistency and quality in their services by establishing tightly defined service standards, procedures, scripts, and physical presentations that their franchisees must follow. By controlling all these aspects, franchisors can ensure that their brand image remains consistent across all franchise locations.

Question 16

A ministore is a single-site service business that involves creating an innovative service factory.

Accepted Answer

A ministore is typically a small retail store that specializes in a specific product category, while a service factory involves creating a system for efficient and effective service delivery. While a ministore may provide services as well as retail products, it is not necessarily considered a service factory.

Question 17

Service delivery is shifting to arm's length transactions for many services due to advances in telecommunications.

Accepted Answer

Advances in telecommunications have enabled remote service delivery, which often involves arm's length transactions.

Question 18

A truck stop is a good example of a ____________.
A) centralized control center
B) single-source facility
C) k-minus strategy
D) multi-purpose facility
E) cash cow

Accepted Answer

A truck stop typically serves multiple purposes such as refueling, parking, dining, restroom facilities, and sometimes even maintenance and repair services. Therefore, it can be considered a multi-purpose facility.

Question 19

Integrating mobile devices into the service delivery infrastructure can be used as a means to ____________ services, ____________ customers to opportunities or problems, and ____________ information in real time to ensure that it is continuously accurate and relevant.
A) Access; alert; update
B) Complement; alert; conceal
C) Access; attract; conceal
D) Access; guide; conceal
E) Complement; guide; conceal

Accepted Answer

Integrating mobile devices can help access services, alert customers to opportunities or problems, and update information in real time to ensure accuracy and relevance. Choice A is the only option that accurately reflects these benefits.

Question 20

The Internet is superior to traditional channels because ____________.
A) costs are much lower when there is no physical location.
B) the Internet is always open for business, whereas traditional channels may have limited hours.
C) more customers will eventually access the Internet than will use traditional channels.
D) it's better able to help researchers collect data on consumer information and search behaviors.
E) it can distribute both products and services much faster.

Accepted Answer

The answer of The Internet is superior to traditional channels...

Quiz 5: Distributing Services Through Physical and Electronic Channels

Which of the following is an example of an economic incentive to improve asset utilization?

All customers will eventually voluntarily shift from high-contact delivery environments to new electronic channels.

What three interrelated elements does distribution embrace in a typical sales cycle?

Banks seeking to move into investment services will often act as the distributor for mutual fund products created by an investment firm that lacks extensive distribution channels of its own.

A local presence may be necessary when exporting information-based services for which of the following reasons?

The need for economies of scale often restricts choice of location for service facilities.

____________ has become a popular way to expand delivery of an effective service concept, embracing all of the seven Ps, to multiple sites, without the level of investment capital that would be needed for rapid expansion of company-owned and managed sites.

In general, service providers are more likely to visit corporate customers at their premises than to visit individuals in their homes.

The convenience of service factory locations and operational schedules assumes little importance when a customer has to be physically present throughout the service delivery or even just to initiate and terminate the transaction.

Physical logistics services now find themselves competing with telecommunications services. This is a result of the instantaneous delivery capability of information-based products.

Which of the following is NOT listed as a factor in favoring adoption of transnational strategies?

People, possession, and information-based services have strikingly similar requirements on an international distribution strategy.

Which of the following is NOT one of the factors that encourage extended operating hours?

Franchising is not an appealing strategy for growth-oriented service firms because franchisees tend to be less motivated and less concerned about quality than managers in company-owned stores.

Franchisors usually seek to exercise control over all aspects of the service performance through tightly defined ____________.

A ministore is a single-site service business that involves creating an innovative service factory.

Service delivery is shifting to arm's length transactions for many services due to advances in telecommunications.

A truck stop is a good example of a ____________.

Integrating mobile devices into the service delivery infrastructure can be used as a means to services, customers to opportunities or problems, and information in real time to ensure that it is continuously accurate and relevant.

The Internet is superior to traditional channels because ____________.