Chapter 11

c. The concept of service perishability states that services (such as airline tickets) cannot be stored in inventory for future use or sale.

a. Service intangibility refers to the fact that you can’t see or touch a service before it is performed.

c. Service variability may be defined as the changes in the quality of the same service provided by different service providers.

c. People-based services are those in which people, rather than equipment or machinery, play the major role in delivery, and within this classification, people-based services can be broken down further into services provided by unskilled labor (e.g., parking lot attendant), skilled labor (e.g., plumber), and professionals (e.g., attorneys and accountants).

d. Equipment-based services are those in which machinery or other forms of technology are used to perform the service tasks required by customers. Since there is no person involved in the parking service, the parking meter is considered an automated equipment-based service.

c. According to the service-profit chain model, customer loyalty drives profitability and growth.

a. Employee satisfaction is the extent to which employees are happy and/or content with their jobs and work environment.

c. According to the model, customer satisfaction (Step 5) and customer loyalty (Step 6) are related and directly linked.

c. Interactive marketing occurs when employees and customers interact. It is there where the promises made during external marketing are either kept, broken, or exceeded by employees.

d. According to the service-profit chain model, employee satisfaction is inversely related to employee turnover (i.e., an increase in employee satisfaction results in a decrease in turnover).

c. The knowledge gap represents the difference between what customers expect and what the company thinks they expect.

a. The policy gap is the difference between management’s perception of the customer’s needs and the translation of that understanding into service delivery policies and standards.

c. The customer gap is the difference between the customer’s expectations of the service and their perception of the experience itself.

c. According to the model, the five dimensions that would result in service excellence and lead to higher customer loyalty are reliability, assurance, tangibles, empathy, and responsiveness.

d. Tangibles represent the physical facilities, employees’ appearance, equipment, machinery, and information systems.