Ent El 4 Reviewer

QUESTIONS 1-4 ARE FROM THE TOPIC “THE ROLE OF SERVICES IN AN ECONOMY”

1. It is a source of service sector growth wherein the services adjust through what's happening
in the population. Example is in what happened after the French Revolution.
A. Innovation
B. Information Technology
C. Changing Demographics
D. None of the above

Correct Answer: C. Changing Demographics

SOURCES OF SERVICE SECTOR GROWTH

1. Information Technology
Information technology has impacted the process of service delivery and created new service
value chains with new business opportunities as creative intermediaries.

2. Innovation
The product development model that is driven by technology and engineering could be
called a push theory of innovation. A concept for a new product germinates in the laboratory
with a scientific discovery that becomes a solution looking for a problem.
For services, the Cash Management Account introduced by Merrill Lynch is an example of the
pull theory of innovation. Pull theory of innovation are service innovations that are driven by
customer needs.

3. Changing Demographics- “population”

The French Revolution provides an interesting historical example of how a social change
resulted in a new service industry. Before the revolution, only two restaurants were in existence
in Paris; shortly afterwards, there were more than 500. The deposed nobility had been forced to
give up their private chefs, who found that opening their own restaurants was a logical solution
to their unemployment.

2. These are deeds, processes, and performances.

A. Services
B. Merchandising
C. Sales
D. Logistics

Correct Answer: A. Services

Services are deeds, processes, and performances.

A service is an activity or series of activities of more or less intangible nature that normally, but
not necessarily, take place in interactions between customer and service employees and/or
physical resources or goods and/or systems of the service provider, which are provided as
solutions to customer problems.

Managing a Service Enterprise

 Ent El 4 Reviewer

3. A concept of a new product is develop through technology and engineering.

A. Push theory of Innovation
B. Pull theory of innovation

Correct Answer: A, Push theory of Innovation

The product development model that is driven by technology and engineering could be
called a push theory of innovation. A concept for a new product germinates in the laboratory
with a scientific discovery that becomes a solution looking for a problem.

Pull theory of innovation are service innovations that are driven by customer needs.

4. It provide public education, health care, well maintained roads, safe drinking water, clean
air, and public safety for a nation’s economy to survive and people to prosper.
A. Infrastructure Services
B. Specialized Services
C. Government Services
D. Distribution Services

Correct Answer: C. Government Services

FACILITATING ROLE OF SERVICES IN AN ECONOMY

Infrastructure services, such as transportation and communications, are the essential links
among all sectors of the economy, including the final consumer. In a complex economy, both
infrastructure and distribution services function as intermediaries and as the channel of
distribution to the final consumer.

In an industrialized economy, specialized firms can supply business services to manufacturing

firms more cheaply and efficiently than manufacturing firms can supply these services for
themselves. Thus, more and more often we find advertising, consulting, and other business
services being provided for the manufacturing sector by service firms.

Government services play a critical role in providing a stable environment for investment and
economic growth. Services such as public education, health care, well maintained roads, safe
drinking water, clean air, and public safety are necessary for any nation’s economy to survive
and people to prosper.

5. The society where the human intellect is the one that is highly used. The central figure is the
professional person, because rather than energy or physical strength, information is the key
resource.
A. Pre Industrial
B. Industrial
C. Post Industrial
D. None of the above

Managing a Service Enterprise

 Ent El 4 Reviewer

Correct Answer: C. Post Industrial

STAGES OF ECONOMIC DEVELOPMENT

Preindustrial Society Industrial Society Postindustrial Society

· Working with muscle power · The predominant activity in The postindustrial society is
and tradition, the labor force an industrial society is the concerned with the quality of
is engaged in agriculture, production of goods. life, as measured by services
mining, and fishing. such as health, education,
· Energy and machines and recreation.
· Life is conditioned by the multiply the output per labor-
elements, such as the hour and structure the nature · The central figure is the
weather, the quality of the of work. Division of labor is professional person, because
soil, and the availability of the operational “law” that rather than energy or
water. creates routine tasks and the physical strength, information
notion of the semiskilled is the key resource. Life now
· Productivity is low and worker. is a game played among
bears little evidence of persons.
technology. · Work is accomplished in the
artificial environment of the · Social life becomes more
· Social life revolves around factory, and people tend the difficult because political
the extended household, and machines. Life becomes a claims and social rights
this combination of low game that is played against a multiply.
productivity and large fabricated nature—a world of
population results in high cities, factories, and · Society becomes aware that
rates of underemployment tenements. the independent actions of
(workers not fully utilized). individuals can combine to
· The standard of living create havoc for everyone, as
becomes measured by the seen in traffic congestion and
quantity of goods.. environmental pollution.

· The individual is the unit of · The community rather than

social life in a society that is the individual becomes the
considered to be the sum social unit.
total of all the individual
decisions being made in the
marketplace.

6. The stage of economic activity where raw materials are extracted. It includes Agriculture,
Mining, Fishing, Forestry.
A. Primary
B. Secondary
C. Tertiary
D. Quaternary
E. Quinary

Managing a Service Enterprise

 Ent El 4 Reviewer

Correct Answer: A. Primary

Stages of Economic Activity

1. Primary (extractive): Agriculture, Mining, Fishing, Forestry
2. Secondary (Goods-Producing): Manufacturing, Processing
3. Tertiary (Domestic Services): Restaurants Hotels, Laundry, Maintenance
4. Quaternary (Trade and Commerce): Transportation, Communications, Retailing, Finance,
and Government
5. Quinary (Extending Human Potential): Health, Education, Research, Arts, Recreation

QUESTIONS 6-9 ARE FROM THE TOPIC “NATURE OF SERVICES”

7. It is like a service and product in one. It is when we buy a service combined with a product
or the other way around.
A. Services
B. Product
C. Service-Product Bundle
D. Package

Correct Answer: C. Service-Product Bundle

The distinction between a product and a service is difficult to make, because the purchase of a
product is accompanied by some facilitating service (e.g., installation) and the purchase of a
service often includes facilitating goods (e.g., food at a restaurant). Each purchase includes a
bundle of goods and services.

8. It is something that we get after acquiring a service that is not visibly seen but we can
sense. Example of this is the psychological benefits.
A. Explicit Services
B. Implicit Services

Correct Answer: B. Implicit Services

The Service Package

The service package is defined as a bundle of goods and services with information that is
provided in some environment. This bundle consists of five features that can be illustrated in the
shape of an onion with the service experience at the core.

1. Supporting facility. The physical resources that must be in place before a service can be
offered. Examples are a golf course, a ski lift, a hospital, and an airplane.

2. Facilitating goods. The material purchased or consumed by the buyer, or the items
provided by the customer. Examples are golf clubs, skis, food items, replacement auto
parts, legal documents, and medical supplies.

3. Information. Data that is available from the customer or provider to enable efficient and

Managing a Service Enterprise

 Ent El 4 Reviewer

customized service. Examples include electronic patient medical records, airline Web site
showing seats available on a flight, customer preferences from prior visits, GPS location of
customer to dispatch a taxi, and Google map link on a hotel Web site.

4. Explicit services. The benefits that are readily observable by the senses and that consist of
the essential or intrinsic features of the service. Examples are the absence of pain after a
tooth is repaired, a smooth-running automobile after a tuneup, and the response time of a
fire department.

5. Implicit services. Psychological benefits that the customer may sense only vaguely, or the
extrinsic features of the service. Examples are the status of a degree from an Ivy League
school, the privacy of a loan office, and worry-free auto repair.

9. Identify the distinctive characteristic of the service operations being shown by the scenario:
"I went to a barber shop and the barber asked me of the haircut that he will be doing on my
hair, and I told him to cut my hair on faded style."
A. Customer Participation in the Service Process
B. Simultaneity
C. Perishability
D. Intangibility

Correct Answer: A. Customer Participation in the Service Process

Distinctive Characteristics of Service Operations

1. Customer Participation in the Service Process

The presence of the customer as a participant in the service process requires an attention to
facility design that is not found in traditional manufacturing operations.

For the customer, service is an experience occurring in the front office of the service facility, and
the quality of service is enhanced if the service facility is designed from the customer’s
perspective.

2. Simultaneity
The fact that services are created and consumed simultaneously and, thus, cannot be stored is
a critical feature in the management of services. This inability to inventory services precludes
using the traditional manufacturing strategy of relying on inventory as a buffer to absorb
fluctuations in demand.

3. Perishability
A service is a perishable commodity. Because a service cannot be stored, it is lost forever when
not used. The full utilization of service capacity becomes a management challenge, because
customer demand exhibits considerable variation and building inventory to absorb these
fluctuations is not an option.

The perishability of services can be seen in an empty spa, a barber shop, or a restaurant where
there are lost opportunity.

Managing a Service Enterprise

 Ent El 4 Reviewer

4. Intangibility
Services are ideas and concepts; products are things. Therefore, it follows that service
innovations are not patentable. To secure the benefits of a novel service concept, the firm must
expand extremely rapidly and preempt any competitors. Franchising has been the vehicle to
secure market areas and establish a brand name.

5. Heterogeneity
The combination of the intangible nature of services and the customer as a participant in the
service delivery system results in variation of service from customer to customer. The
interaction between customer and employee in services, however, creates the possibility of a
more satisfying human work experience.

6. Non-ownership Characteristic of Services

From a marketing perspective, services, unlike goods, do not involve transfer of ownership. If
customers do not receive ownership when they purchase a service, then what are they buying?
One view is that customers gain access or rental of resources for a period of time such as a
hotel room for the night or a seat on an airplane.

In services, the customers are not buying a specific asset but are allowed to use the asset for a
specific period of time. It is in whether the customer is the one using the actual product or it is
use to satisfy his/her needs or wants.

QUESTIONS 10-13 ARE FROM THE TOPIC “SERVICES MARKETING”

10. Introduced by Christian Gronoos in 2000 and shows the relationship of the company,
employees, and consumers as essential elements of service marketing.
A. Services Marketing
B. Paradigm in Service Marketing
C. Service Marketing Triangle
D. Service Categories

Correct Answer: C. Service Marketing Triangle

Christian Gronroos initially developed the service marketing triangle model in the year 2000. It
depicts the relationship between three essential elements of a service industry, i.e., company,
employees and consumers.

11. It typically refers to the promotion of both business to consumer (B2C) and business-to-
business (B2B) services. It is a difficult task as compared to product marketing.
A. Advertisement
B. Service Marketing
C. Paradigm of Marketing
D. Service

Managing a Service Enterprise

 Ent El 4 Reviewer

Correct Answer: B. Service Marketing

Service marketing typically refers to both business to consumer (B2C) and business-to-business
(B2B) services, and includes marketing of services such as telecommunications services,
financial services, all types of hospitality, tourism leisure and entertainment services, car rental
services, health care services and professional services and trade services.

12. Medical Service like check ups is an example of what service category?
A. People Processing Services
B. Product/Possession Processing Services
C. Mental Stimulus Processing Services
D. Information Processing Services

Correct Answer: A. People Processing Services

Service Categories

A. People Processing Services: People processing here refers to the physical presence of
the customer at the service system or location, to avail the service. For example, a person
needs to be physically present at the ‘salon’ to get a hair cut.

B. Product/Possession Processing Services: Such services are related to a specific product

or its possession with limited or no involvement of the customer. For instance, the
services offered by ‘packers and movers’ are primarily concerned with the safe shifting
of customer’s belongings, i.e., furniture and assets from one place to another.
C. Mental Stimulus Processing Services: The services which influence the consumer’s
mental abilities, religious believes, behavior, perception, lifestyle and attitude are termed
as mental stimulus processing services. Like, educational institutes deliver knowledge
which develops the mental ability of a person.

D. Information Processing Services: These are a unique form of intangible products where
the information acts as a product, or information technology is used. Such decisions are
considered to be critical due to massive investment and a high level of risk; therefore,
absolute customer involvement can be seen over here.

13. The consumers prefer prompt services without any interruption. Therefore, the rate with
which the service is provided is considered as a parameter for efficient service.
A. Customer Oriented
B. Single Take
C. Service as a Process
D. Speed and Accuracy

Correct Answer: D. Speed and Accuracy

Paradigm in Service Marketing

Managing a Service Enterprise

 Ent El 4 Reviewer

1. Service Categories
Service industry seems to be more complicated than the manufacturing industry. The services
can be either tangible or intangible; people-oriented or product oriented.

2. Customer Oriented
In the service industry, customization of the product offering becomes essential as compared to
that of the manufacturing industry. The customer’s needs, perception and requirements are
given significance while carrying out the business operations in as a service provider.

3. Single Take
Service is a one-take action, i.e., it cannot be restored, redone, replaced or exchanged. It is
intangible and irreversible; thus, it needs to be perfect and well-delivered at the first time itself.

4. Service as a Process
In the service industry, the process plays an important role. The process here refers to the steps
involved in availing the service by the consumer.

An organization must keep a watch over each of these steps. It must ensure humbleness,
honesty and sincerity of the personnel involved in the interaction with the consumers, while the
execution of each of these steps.

5. Speed and Accuracy

The consumers prefer prompt services without any interruption. Therefore, the rate with which
the service is provided is considered as a parameter for efficient service. It is also responsible
for the selection of one service provider over the other, by the consumers.

QUESTIONS 14-16 ARE FROM THE TOPIC “SERVICE STRATEGY”

14. These are the negative components of a SWOT Analysis.

A. Opportunities and Threats
B. Strength and Weaknesses
C. Strengths and Opportunities
D. Weaknesses and Threats
Correct Answers: D. Weaknesses and Threats

SWOT Analysis: Strengths, Weaknesses, Opportunities, Threats

Positive and Internal- Strength, may good points ng business by internal observation (sa loob
ng company)

Negative and Internal- Weaknesses, mga bad points ng business by internal observation (sa
loob ng company)

Managing a Service Enterprise

 Ent El 4 Reviewer

Positive and External- Opportunities, mga pagkakataon ng business na maka angat sa

external environment

Negative and External- Threats, mga factors na maaaring maka affect sa business related sa
external environment

15. The process wherein target market, service concept, operating strategy and delivery system
is being identified.
A. Services
B. Strategic Service Vision
C. Competitive Environment of Services
D. SWOT Analysis

Correct Answer: B. Strategic Service Vision

The Strategic Service Vision

Ang strategic service vision process kung saan ina-identify natin ang
· target market,
· service concept,
· operating strategy, and
· delivery system.

16. It is a factor in Five Porter's Forces Analysis that is the major determinant of market
competitiveness. It is where the competitors are being identified so that the business are
aware of price and non price strategies of the latter.
A. Competitive Rivalry within Industry
B. Potential New Entrants
C. Bargaining Power of Customers
D. Bargaining Power of Suppliers

Correct Answer: A. Competitive Rivalry within the Industry

Porter’s Five Forces Analysis

It determines the competitive intensity and, therefore, attractiveness of a market. The five forces
affect the ability of a firm to attract customers and make a profit.

Managing a Service Enterprise

 Ent El 4 Reviewer

· Competitive Rivalry within Industry. 

Major determinant ng industry competitiveness. Kailangan nating i-identify ang mga kalaban
natin dahil kalaban natin sila sa price and nonprice strategies.

· Potential New Entrants.

Ito yung mga kailangan sa pagpasok sa market kagaya ng capital requirements at even yung
mga problem na pwedeng kaharapin ng business.

· Threat of Substitutes.
Identify natin dito yung mga related sa tendency ng mga customers na mag product na lang as
substitute for services.

· Bargaining Power of Suppliers.

Related sa ating mga inputs or ginagamit natin sa pagbuo ng services.

· Bargaining Power of Customers. 

Magiging reaction ng customers sa prices, dami ng customers, at iba pang information about
customers.

QUESTIONS 17-20 ARE FROM THE TOPIC “SERVICES MARKETING”

17. There are many customers in the AM Bar and Restaurant to the point that some were
already standing because they cannot find a seat. Most of them are also denied of service.
A. Excess Demand
B. Demand exceeds optimum capacity
C. Demand and supply are well balanced at the level of optimum capacity
D. Excess capacity
Correct Answer: A. Excess Demand

Demand/Capacity Variations
1. Excess demand- the level of demand exceeds maximum available capacity, with the result
that some customers are denied service and business is lost.
2. Demand exceeds optimum capacity- no one is actually turned away, but conditions are
crowded and all customers are likely to perceive a decline in service quality.
3. Demand and supply are well balanced at the level of optimum capacity- staff and
facilities are busy without being overtaxed, and customers receive good service without delays.
4. Excess capacity- demand is below optimum capacity and productive resources are
underutilized resulting in low productivity.

Managing a Service Enterprise

 Ent El 4 Reviewer

18. A set of patterns can actually be predicted using recorded demand schedules, it can be from
a log book as an example.
A. Sketching Demand Patterns
B. Foreseeable/Predicted Cycles
C. Random Variations
D. Demand Patterns by Market Segments
Correct Answers: A. Sketching Demand Patterns

Demand Patterns
1. Sketching Demand Patterns- After some time of recording demands, a set of patterns can
actually predicted.
2. Foreseeable/Predictable Cycles- services can be planned based on predicted cycles
3. Random Demand Variations- where demands are not easily predictable, or they occur
randomly
4. Demand Patterns by Market Segments- different demand pattern for different segments

19. It is defined as the ability to meet demand and the extent to which it can do it.
A. Demand
B. Capacity
C. Services
D. Management

Correct Answer: B. Capacity Capacity Constraints

Capacity- is defined as the ability to meet demand and the extent to which it can do it.
Four Factors involved in Capacity Planning:
1. Time
2. Equipment
3. Labor
4. Facility

20. It is a demand shift sub-strategy that worked with the concept of supply, demand, and price
A. Varying the original services offer
B. Communicating with the customers
C. Altering the service delivery timings
D. Price differentiation

Correct Answer: D. Price differentiation

Strategies to match Demand and Capacity

1. Demand Shift
a. Varying the original services offer- bigger services offering small services during low
demand period
b. Communicating with the customers- explain the situation to the customer, so that

Managing a Service Enterprise

 Ent El 4 Reviewer

they can adjust

c. Altering the service delivery timings
d. Price differentiation- worked with concept of supply, demand, and price

2. Align Capacity with Demand Fluctuations or Chase Demand Strategy

a. Schedule downtime during periods of low demand
b. Use part-time employees
c. Rent or share extra facilities or equipment
d. Cross-train employees
e. Modify or move facilities and equipment

Managing a Service Enterprise