You are on page 1of 20






Date: June, 2017 Time allowed: 3hours

General Instructions

1. There are 14 pages in this paper. Please check!

2. This paper has four sections, A, B, C and D. Please check!
3. Follow the instructions for each section.
4. Fill in your details on the answer book provided.
5. Write your name on the top of each page of the answer sheets provided.
6. Write on both sides of the answer sheets.
7. Do not tear any paper from the answer book or question paper.





1. Which of the following is a process a marketer use to serve his or her service?
A. Market segmentation
B. Targeting.
C. Marketing.
D. Positioning.

2. What is used to measure a Firm's performance?

A. Current sales.
B. Customer equity.
C. Market share.
D. Niche market.

3. Which of the following is a potential profitable but less loyal group?

A. Butterflies.
B. Strangers.
C. True friends.
D. Barnacles.

4. Good marketing is no accident, but a result of careful planning and ___________.

A. Execution.
B. Selling.
C. Strategies.
D. Research.

5. K B J Enterprise employs people to clean fireplaces and chimneys in homes and

apartments. The firm is primarily the marketer of which one of the following?

A. An image.
B. A service.
C. A good.
D. An idea.

6. Marketers often use the term ___________ to cover various groupings of customers.
A. People buying power.
B. Demographic.
C. Segment.
D. Market.

7. Which of the following would be the best illustration of a subculture?

A. A religion.
B. A group of close friends.
C. Your university.
D. Your occupation.

8. If actual performance exceeds the expected performance of the service, then customer is
A. Satisfied.
B. Dissatisfied.
C. Delighted.
D. Neutral.

9. The promotion “P” of marketing is also known as ______________?

A. Product differentiation.
B. Distribution.
C. Marketing communication.
D. Cost.

10. The changing market necessitates that managers must see the impact of all except
A. Technologies.
B. Lifestyles.
C. Product line.
D. Benchmarks of quality.

11. Which of the following is the target audience for an advertising campaign?
A. Information base on which to develop the campaign.
B. Location and geographic distribution of persons.
C. Group of people toward whom the advertisements are directed.
D. Overall goal of the advertising campaign.

12. Adoption rate will not be high and fast if the service has _______________.
A. Lower price.
B. Greater utility.
C. Compatibility with society.
D. Less utility.

13. Which one of the following options will be enhanced by delivering the key benefits of a
brand that are important to the customers?
A. Positioning.
B. Competition.
C. Extension.
D. Repositioning.

14. A company’s business model can be based on all of the fundamental factors except
A. High quality.
B. Affordability.
C. Accessibility.
D. Low quality.

15. Introducing certain features in a consumer durable product, that customers may see out of
your brand’s character, can ______________ your ability to stay contemporary.
A. Hurt.
B. Enhance.
C. Supplement.
D. Affect.

16. The power based on a channel member’s superior knowledge and information about his
service is called _______________.
A. Expert power.
B. Legitimate power.
C. Coercion.
D. Retailer power.

17. A great effort in terms of time and money is required for _____________ and despite the
effort, results are not guaranteed.
A. Growth.
B. Profitability.
C. Branding.
D. Promotion.

18. ___________ does not provide a good quality of service because of a direct interface
with the customers, but it is expensive.
A. Direct sales.
B. Telemarketing.
C. E-marketing.
D. Labeling.

19. _________________ Model offers opportunity to set different levels of pricing for
different needs.
A. Segment pricing.
B. Skim pricing.
C. Value-in-use pricing.
D. Strategic account pricing.

20. When Toyota Malawi buys its fleet from General Motors without using an intermediary,
Toyota Malawi is practicing ______________.
A. Direct purchasing.
B. Reciprocity.
C. Leasing.
D. Elastic buying.

21. When a company changes some aspect of its purchase needs and invites both current and
prospective suppliers to bid on the company's business, it is most likely which type of
buying situation?
A. Straight rebuy.
B. Modified rebuy.
C. New task buying.
D. Direct competitive rebuy.

22. Gregg is the manager of his department and must sign all purchase orders before they can
be sent out. He is best described by which of the following buying-centre roles?
A. Gatekeeper.
B. Influencer.
C. Buyer.
D. Decider.

23. American Express has a Platinum card targeted at 1% of its highest spending customers.
In this instance American Express is practicing ______________.
A. Mass marketing.
B. Segment marketing.
C. Niche marketing.
D. Micromarketing.

24. One method used by McDonald's to segment its market is the time a purchase is made.
This is an example of which type of segmentation strategy?
A. Geographic.
B. Demographic.
C. Psychographic.
D. Behavioural.

25. Dividing buyers into groups based upon their knowledge, attitudes, uses, or responses to
a service is called ________________.
A. Geographic segmentation.
B. Demographic segmentation.
C. Psychographic segmentation.
D. Behavioural segmentation.

26. Sony provides camcorder purchasers with warrantees, free operating lessons and quick
repairs. What type of product is Sony offering in this instance?
A. A core product.
B. An actual product.
C. An augmented product.
D. A convenience product.

27. The maintenance contract offered by K B J Enteprise on its Kobaja refrigerators,

dishwashers and microwaves is an example of a(n)____________.
A. Service.
B. Benefit.
C. Experience.
D. Good.

28. Lengthening product lines does all the following except _____________.
A. Increasing design and engineering costs.
B. Increasing inventory costs.
C. Increasing transportation costs.
D. Increasing order processing costs.

29. Restaurants hire part-time employees to serve during peak periods to deal with the
___________ of their services.
A. Variability
B. Inseparability
C. Perishability
D. Intangibility

30. One business promising to do something for another business in return for receiving
compensation is an example of a _____________
A. Contract.
B. Benefit.
C. Treaty.
D. Enterprise

31. When an agent legally acts in the best interests of his/her client, the agent is establishing
a(n) __________ relationship.
A. Authoritative
B. Fiduciary
C. Principal
D. Legislative

32. When Kondwani goes to the local gym, he has a personal trainer who helps make sure he
is using the equipment correctly. The personal trainer is an example of ______________.
A. Service.
B. Experience.
C. Attribute.
D. Benefit.

33. When businesses want to make their products available to customers but do not want to
over-distribute their goods and services, they are seeking ____________.
A. Exclusive marketing channels.
B. Ideal market exposure.
C. Direct distribution capabilities.
D. Intense segment coverage.

34. Cindy's lemonade stand sells lemonade to customers. The route that the lemonade is
taking from the producer to the final consumer is ___________________.
A. Roundabout.
B. Indirect.
C. Direct.
D. Intermediary.

35. The characteristic of a service that means that it cannot be seen, felt, tasted or touched
A. Intangibility.
B. Comparability.
C. Perishability.
D. Compatibility.

36. Which of the following is not an example of a service business?
A. Bank.
B. Amusement Park.
C. Soft drink bottler.
D. Hotel.

37. The office photocopier is jammed again! Fortunately, there is an instruction manual to
guide you through the process of removing the jammed paper. What is the best way to
use the manual to clear the photocopier?
A. Read the entire manual in sequential order and then perform all of the steps in reverse
order to remove the jammed paper.
B. Read step one and then perform step one. Repeat this process in sequential order until
all of the steps are completed and you have removed the paper.
C. Briefly skim the manual in reverse order and then follow the steps in sequential order
to remove the jammed paper.
D. Perform the first step, and then verify that you have performed it correctly in
the manual. Repeat this process in sequential order until all the steps are

38. On a recent visit to The Home Depot store, a sales associate greeted Gugu when she
entered the store, helped her locate the items she needed to repair her gadget and
suggested how she could prevent gadget problems in the future. The assistance provided
by the sales associate illustrates the ______ of services.
A. Intangibility.
B. Heterogeneity.
C. Perishability.
D. Divisibility.

39. Your supervisor has asked you to prepare a marketing status report for each of the
company's six regional offices. The most appropriate way to organize the information is
A. By site location.
B. By sales function.
C. In chronological order.
D. In reverse sequence.

40. What does an enclosure notation at the bottom of a business letter signify?
A. Something is being sent with the letter.
B. Copies of the letter were sent to others.
C. The sender wishes a reply.
D. The sender prepared the letter.

41. An effective executive summary _____________.
A. Is written for people who won't read the whole document.
B. Includes every point from the business report.
C. Uses technical terminology to show the writer's expertise.
D. Features complex compound sentences.

42. A memo on the bulletin board from a supervisor to staff members is an example of
__________ communication.
A. Downward.
B. Formal.
C. Upward.
D. Horizontal.

43. Thomas does not know the answer to Mr. O'Malley's question about a complex product.
Which of the following is the best way for Thomas to respond to Mr. O'Malley's inquiry?
A. "I'll need to read the product manual before I can answer your question, Mr.
O'Malley. I'll get back to you next week."
B. "Let me give you the manufacturer's website address. The information is probably
available on the product-specifications page."
C. "I'm not sure, Mr. O'Malley. My coworker, Reggie, knows a lot about this
model. If you can wait a moment, I will have him speak with you."
D. "I don't know. We do have a customer who just purchased this model. I'll get Mrs.
Thompson's telephone number for you."

44. Negative word-of-mouth advertising due to unresolved customer complaints can cost a
business it’s _________________.
A. Facilities.
B. Employees.
C. Reputation.
D. Licenses.

45. How can a business build its customers' trust and communicate its commitment to ethical
A. Develop liberal business policies.
B. Publish its confidentiality statement.
C. Hire employees who have a positive attitude.
D. Post its earnings on its website.

46. In the simplest terms, _____ are deeds, processes and performances.
A. Attributes.
B. Experiences.
C. Services.
D. Benefits.

47. ___________ refers to the fact that services cannot be saved, stored, resold or returned.
A. Intangibility.
B. Perishability.
C. Heterogeneity.
D. Tangibility.

48. Businesses are being socially responsible to their customers when they
A. Contribute to community causes.
B. Provide safe working environments.
C. Offer employees job training.
D. Test the safety of their products.

49. One of the freedoms provided to individuals by the private enterprise system is the
freedom to choose ________________.
A. Which taxes they will pay.
B. How their employers pay them.
C. Where they will work.
D. Which laws they will obey.

50. Operating expenses are defined as the ________________.

A. Start-up expenses of a business.
B. Salaries paid to managers.
C. Cost of goods sold.
D. Costs of running a business.

51. A specialty product is ________ intensively distributed than a shopping product.

A. More
B. Less
C. Extra
D. Additionally

52. The demand for a product is __________ when price cut causes revenue to increase.
A. Income elastic.
B. Price elastic.
C. Cross elastic.
D. Product elastic.

53. Image building” objectives are common in _____________ type of market structure?
A. Competition.
B. Oligopoly.
C. Monopoly.
D. Monopony.

54. When the market is run by a small number of firms that together control the majority of
market share is known as _________________.
A. Oligopoly.
B. Duopoly.
C. Oligosony.
D. Perfect competition.

55. The following is (are) the Tangible source(s) _________________.

A. Capital.
B. Time.
C. Technology.
D. Information.

56. The following is (are) the Intangible source(s) ______________.

A. Capital.
B. Time.
C. Raw material.
D. Machine.

57. In marketing, ___________ is the focal point.

A. Profit.
B. Sales.
C. Customer.
D. Product.

58. The brand choice is heavily influenced by reference group in which stage of Product life
A. Introduction.
B. Growth.
C. Maturity.
D. Decline.

59. This is not a major components of marketing mix are _______________.

A. Product.
B. Price.
C. Place.
D. Prime.

60. Adding new features to a service is advocated by which of the approaches?
A. Service Approach.
B. Production Approach.
C. Marketing Approach.
D. Selling Approach.

61. Today’s customer service organizations recognize the competitive challenges of and
opportunities from delivering superior service across channels and touch points. Is this
statement true or False?
A. True
B. False

62. The biggest challenge that customer service agents — the frontline providers of customer
service face is having to use multiple applications during a single customer interaction.
This affects their productivity and forces them to focus on their tool set instead of paying
attention to the customer’s conversation. Is this statement true or False?
A. True
B. False

63. Organizations today struggle with outdated customer service technologies that do not let
them deliver service in line with expectations. Is this statement true or False?
A. True
B. False

64. Return on investment (ROI) can be calculated by correlating customer loyalty and
experience over three dimensions: increased cross-sells and upsells, reluctance to switch
away from the brand, and recommendations to family and friends. Is this statement true
or False?
A. True
B. False

65. Positive experiences lead to satisfied customers, which correlate to loyal customers and
increased lifetime wallet share for these loyal customers. Is this statement true or False?
A. True
B. False

66. As organizations compete to attract and retain their client base in an increasingly
competitive environment, the importance of customer experience is rising. Is this
statement true or False?
A. True
B. False

67. Businesses that fail to meet their customers' expectations and that do not empower their
customer service agents to deliver good service run the risk of being left at a competitive
disadvantage. Is this statement true or False?
A. True
B. False

68. One successful way to move the needle and deliver an improved customer service
experience in a way that is cognizant of business cost parameters is to focus on the core
needs of customers and customer service agents, who are the frontline providers of
customer service, as well as the technologies that power customer service. Is this
statement true or False?
A. True
B. False

69. Companies must be pragmatic about engaging in initiatives that will deliver service in
line with customer expectations at a cost that makes sense to the business. Is this
statement true or False?
A. True
B. False

70. Customers are quick to voice their disappointment, which is amplified via social media
channels and can lead to brand erosion and customer defection. Is this statement true or
A. True
B. False

71. A service is an activity or benefit that one party can offer to another that is essentially
intangible and does not result in the ownership of anything. Is this statement true or
A. True
B. False

72. Service providers would have to find their optimum service quality/cost ratios. Is this
statement true or False?
A. True
B. False

73. Not every consumer is willing to pay extra for service quality. Is this statement true or
A. True
B. False

74. Giving quality service is an expensive business. Is this statement true or False?
A. True
B. False

75. A dissatisfied consumer gripes to, on an average 11 persons about his/her unpleasant
experience. Is this statement true or False?
A. True
B. False

76. A satisfied consumer speaks to an average of 3 people on his her experience. Is this
statement true or False?
A. True
B. False

77. On an average only 5 % dissatisfied customers complain. Others simply go over to the
competitor. Is this statement true or False?
A. True
B. False

78. Service quality is directly proportional to employee satisfaction. Is this statement true or
A. True
B. False

79. A service is the part of the product or the full product for which the customer is willing to
see value and pay for it. Is this statement true or False?
A. True
B. False

80. According to Theodore Levitt there are no such thing as service industries. There are only
industries whose service components are greater or less than those of other industries.
Everybody is in service. Is this statement true or False?
A. True
B. False


81. Briefly explain five dimension of service quality (5 Marks)

 TANGIBLES-Appearance of physical facilities, equipment, personnel, and
communication materials
 RELIABILITY-Ability to perform the promised service dependably and
 RESPONSIVENESS-Willingness to help customers and provide prompt
 ASSURANCE-Knowledge and courtesy of employees and their ability to
convey trust and confidence
 EMPATHY-Caring, individualized attention the firm provides its customers

82. List down five characteristics of a service (5 Marks)

 Perishability,
 Intangibility,
 Variability,
 Inseparably and
 Non-ownership

83. Identify five gaps in service quality (5 Marks)

 Gap1: Customers’ expectations versus management perceptions: as a result
of the lack of a marketing research orientation, inadequate upward
communication and too many layers of management. ·
 Gap2: Management perceptions versus service specifications: as a result of
inadequate commitment to service quality, a perception of unfeasibility,
inadequate task standardisation and an absence of goal setting. ·
 Gap3: Service specifications versus service delivery: as a result of role
ambiguity and conflict, poor employee-job fit and poor technology-job fit,
inappropriate supervisory control systems, lack of perceived control and lack
of teamwork. ·
 Gap4: Service delivery versus external communication: as a result of
inadequate horizontal communications and propensity to over-promise. ·
 Gap5: The discrepancy between customer expectations and their perceptions
of the service delivered: as a result of the influences exerted from the
customer side and the shortfalls (gaps) on the part of the service provider. In
this case, customer expectations are influenced by the extent of personal
needs, word of mouth recommendation and past service experiences. ·
 Gap6: The discrepancy between customer expectations and employees’
perceptions: as a result of the differences in the understanding of customer
expectations by front-line service providers.

 Gap7: The discrepancy between employee’s perceptions and management
perceptions: as a result of the differences in the understanding of customer
expectations between managers and service providers.
84. Give five reasons as to why services fail (5 Marks)
 People are not trained. When an organization does not spend the time to
fully train their people the consequence is poor service.
 Sabotage. Angry or frustrated employees can actively work to sabotage and
try to destroy the company
 Employees don’t believe in the company, product or service. If the image,
marketing and promotion of the company is quite different from the reality,
workers will not be able to sustain a positive attitude in the face of problems
they know exist
 Personal problems reflected in work. When an employee’s personal life is in
crisis or out of control, they may exercise control, aggression and negativism
toward customers in an attempt to put some part of their life in order.
 Burnt out. Too much negative, too many complaints can lower a person’s
level of commitment and move their positive and helpful attitude to an
apathetic one
 Not providing the correct solutions to customers, lack of empowerment.
 Don’t see the benefits – don’t understand their role in the company
 Apathetic from hearing the same problems over and over.
 Incentives/salary not tied to results.



85. Explain the four broad categories of services. Provide a good example of a service
“business” for each category. (20 Marks)
 Four broad categories of services
Based on differences in nature of service act (tangible/intangible) and who or
what is direct recipient of service (people/possessions), there are four
categories of services:
• People processing
• Possession processing
• Mental stimulus processing
• Information processing
Challenges posed by services

Services Pose Distinctive Marketing Challenges
Marketing management tasks in the service sector differ from those in the manufacturing
• The eight common differences are:
• Most service products cannot be inventoried
• Intangible elements usually dominate value creation
• Services are often difficult to visualize and understand
• Customers may be involved in co-production
• People may be part of the service experience
 Operational inputs and outputs tend to vary more widely
• The time factor often assumes great importance
• Distribution may take place through nonphysical channels
86. What's probably more important, Facilitating Services, or Enhancing Services? Discuss
(20 Marks)
 The facilitating services are needed for core service delivery and they help in
the use of the core service/product. Here are some examples of facilitating
services: billing, payment, order tacking, and information - it is up to each
management team in part to decide which the facilitating services for their
business are.

On the other hand the enhancing services are meant to add extra value to the
customers (you can think about them as additional features). Enhancing
services might consist of: customer support, consulting, hospitality - like in
the case of the facilitating services the enhancing ones are not set in stone, so
it's up to you to decide what's enhancing and what not.

For companies that go for the cost leadership strategy, the number of
supplementary services that they offer, be it enhancing or facilitating, is quite
small opposed to the number of services offered by companies that aim for

A good example of flower of service approach, from the Internet business, is

Google. At the beginning there was only the search engine, and it still is the
core of the company, later on came Analytic, Docs or Translate.

87. Even though some business are “moving their customers to the online channel,” many
service businesses need to have “bricks and-mortar” locations. Explain four key reasons
why bricks-and mortar are necessary to best serve customers. (20 Marks)
 Location Based Marketing
One of the biggest advantages of owning a brick and mortar business is your
physical location actually serves as marketing in and of itself. In other words,
if you pick a good location, people will drive or walk by your store or
business. For many businesses, the location of the business combined with
good word of mouth is all the marketing they need.
The two big questions you need to ask yourself is (1) what location would be
good for my business and (2) how can I make my products or services
appealing enough to customers so that they will spread the word.
Cheaper rates can be found for locations that have less traffic, so you will
have to determine whether or not your business will benefit enough from a
good location to justify the cost.
 Legitimacy
Having a physical presence increase the legitimacy of the business. People are
more willing to trust businesses that have a physical place that they can walk
into. Additionally, being able to speak with your potential customers face to
face can be helpful as well.
 Higher Startup Cost
Rent and employees can lead to much higher startup costs for brick and
mortar businesses. If you are just starting out, the perhaps you should
consider trying out lower cost alternatives to test the market.
For example, if you are offering dance lessons, rent out a space within
another facility. One successful dance instructor in Philadelphia rents out
space at a fitness center, which is less expensive than renting out a dedicated
For physical products, consider starting out with a kiosk or a flea market.
 Long Hours
Another disadvantage is that brick and mortar business owners usually work
super long hours, at least at the beginning. The key to avoiding this is to be
able to hand off responsibilities to your employees and trust them to make
the necessary decisions.
 Web Based Businesses
I love web based businesses because of their lower start up cost and the
ability to reach tons of people around the world.
 Lower Startup costs
Low startup cost is a good reason to get into online business. You can get a
simple website up for a few hundred dollars. In fact, you don’t even need a
website to get started.
Elance, Ebay, and Amazon are just some websites where you can sell
products or services without any large upfront investment. They are
inexpensive to try and if you fail, then you didn’t risk that much upfront to
begin with.
 Work at Home

Working at home is another great perk of owning a web based business. Not
having to commute saves a lot of time. Even if your commute is short, it
usually takes you an hour or two to prepare and then go to work and back.
Working at home offers conveniences and freedoms that you don’t get from
running a brick and mortar business.
 Marketing Intensive
One of the biggest drawbacks is that you cannot benefit from people finding
out about you through a physical location. You need to market your services,
products, or website or else no one will know you exist.
This will require you to learn about things like SEO, pay per click
advertising, affiliate marketing, and various other methods of online
promotion. Forming relationships with other people online is also beneficial.
 If you want to start an online business, come up with a plan to market it. I’ve
seen many people build websites and do almost nothing to promote it.
Coming up with and executing an online marketing plan will be crucial to
your success.

88. Explain in detail several ways that technology has impacted how many firms deliver and
manage their service offerings. (20 Marks)
 The move from personal service to automation and self service

 Previously, when facing a service delivery, you were met with service
personnel ready to support you all the way through your customer journey.
Today, and due to the emerging impact of technology, we see more and more
examples of self service and automated service solutions. These include
online airline check-in, self-service checkout lanes in retail stores, gas pumps
and supermarkets. When calling up customer service, you are more likely to
be met with an automated operator rather than a human one, just like clever
language software programs are likely to be the ones responding to you when
reaching out via email.

In many instances, self-service technologies and automated back-office

services can directly be considered as a huge win for us as consumers. Now
consumers can receive service on their premises, avoiding wasting time in
long queues and get our inquiries processed faster than ever. And as the
operational costs of companies’ decrease, services can also be delivered at a
much lower cost. Companies, however, must be aware not to alienate
customer segments not comfortable using self-service and automated
technologies as well as balance the danger of losing the human touch as part
of the process

 The portfolio of accessible services is increasing

With the worldwide web also came a world without boundaries. Or in other
words, technology has now expanded our potential to reach out to customers
around the globe in ways that were not to be dreamed off in the not so distant

past. While we previously commonly serviced consumers locally, with one
click, service and transactions today can move across continents and
countries reaching anyone possible with access to the worldwide web.

Recognizing that these global service deliveries primarily account for digital
services also means that companies free up space that before was locked to
costly physical inventories. Consider service giants such as Amazon and
Netflix. Due to technology advancements they can now offer a great portfolio
of services at the lowest cost possible, while reaching all web connected
customers around the world.

 The rise in consumer data

When talking about self-service delivery, automation and an increase in

online services, some critics point to the idea that service deliveries
increasingly will become less and less personal. But does this mean that we
sooner or later will lose the human touch? Not necessarily. It depends on how
good we are at balancing the great things technology can provide us with as
well as our sense of what defines quality service. The thing is that technology
gives us more than automation and the ability of providing service at a lower
cost. It also gives us the opportunity to gather customer data, analyse
customer data and use the data analysed to better meet customers’ needs.

As companies we can then use these findings and insights to adjust and
personalise our service offerings and deliveries to better increase customer
satisfaction and service experience. As we’ve seen in other industries, Netflix
analyses user behaviour data to be able to offer suggestions for new movies to
watch, while online booking services such as analyse user
behaviour data to be able to recommend the best hotels to its users based on
previous search and behavioural patterns.