Chapter 16- The Financial and Economic Impact of Service

1. _______________ is the percentage of a customer’s spending within a category that is captured by a given service.   

• Share of spending

• Share of market

• Share of customer

• Share of wallet

21. Which type of promotion has more credibility than other sources of information about a service?   

• Word-of-mouth

• Personalized direct mail

• Network television advertising

• Publicity

15. _____ marketing is used by companies to prevent customer defection.   

• Vertical integration

• Guerilla

• Defensive

• Flank-movement

14. A review of two decades of studies examining the links among customer satisfaction, service quality and firm performance concluded that improvements in customer satisfaction have _________ impact on firms’ financial performance.

• A significant and positive

• Absolutely no

• A small negative

• An undetermined

8. Service quality can help companies attract more and better customers to the business through _____ marketing.   

• Insurgent

• Offensive

• Flank-movement

• Defensive

7. In the early 1990s 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 that these elite quality firms benefited in all of the following ways EXCEPT:

• Improved return on salesImproved return on sales

• Increased market share

• Increased advertising

• Increased return on assets

3. The correlation between a brand’s wallet allocation rule and its financial results is ________ than the relationship between previous service and financial measures.

• Far lower

• Somewhat lower

• Not much different

• Far higher

4. The wallet allocation rule takes into account both _________ and the number of brands in the set the consumer uses.   

• Size

• Rank

• Revenue

• Spending

6. All of the following are strategic issues that the wallet allocation rule addresses EXCEPT:   

• Managers cannot evaluate their firms without taking competition into account.

• The rank that consumers assign to a service relative to the others in the same category matters.

• Parity among brands the customer uses is unfavorable

• All of the above are strategic issues that the wallet allocation rule addresses.

18. Which of the following is NOT likely to be a source of money when a company uses a defensive marketing effect?   

• Increased market share

• Increased volume of purchases

• Lower costs

• Increased word-of-mouth communication