Chapter 4

Developing Service Concepts: Core and Supplementary Elements

GENERAL CONTENT
Multiple Choice Questions
1. ____________ supply the central, problem-solving benefit that customers seek.
a. Core products
b. Supplementary services
c. Delivery processes
d. Sustaining processes
e. Conditional services

2. ____________ augment the core product, both facilitating its use and enhancing its
value and appeal.
a. Core products
b. Supplementary services
c. Delivery processes
d. Sustaining processes
e. Conditional services

3. A company’s ____________ helps to determine which supplementary services should

be included.
a. location
b. delivery system
c. key service representative
d. service atmosphere
e. market positioning strategy

4. The order-taking process should be ____________, ____________, and

____________ so that customers do not waste time and endure unnecessary mental
physical effort.
a. short; curt; abrupt
b. simple; slow; effortful
c. short; sweet; ineffective
d. powerful; simple; abrupt
e. polite; fast; accurate

5. ____________ represent a special type of order taking that entitles customers to a

specific unit of service.
a. Suggestions
b. Reservations
c. Trackers
d. Repossessions
e. Contracts

6. At it’s simplest, ____________ consists of immediate advice from a knowledgeable

service person in response to the request: “What do you suggest?”
a. billing
b. payment
c. consultation
d. hospitality
e. selling

7. Which of the following is NOT considered an example of a hospitality element?

a. Greeting
b. Toilets and washrooms
c. Advice
d. Food and beverages
e. Transport

8. Which of the following is NOT one of the eight basic steps to developing and
delivering a branded customer experience?
a. Target profitable customers, employing behavior segmentation rather than
demographics.
b. Achieve a superior understanding of what your targeted customers value.
c. Design facilities that delight your customers and reduce complaints.
d. Give employees the skills, tools, and supporting processes needed to deliver the
defined customer experience.
e. Make everyone a brand manager.

9. Which of the following is NOT a category of new service innovation?

a. Supplementary service innovations
b. Product line extensions
c. Major product innovations
d. Process line extensions
e. Self-sustaining innovations

10. The three factors that contribute the most to achieving success of new service
development in order of importance are:
a. Market research factors, organizational factors, market synergy
b. Market synergy, organizational factors, market research factors
c. Organizational factors, market synergy, market research factors
d. Market synergy, market research factors, organizational factors
e. Market research factors, market synergy, organizational factors

True/False
11. Service marketers need to create a coherent offering in which each element is
compatible with the others and all are mutually reinforcing. ​TRUE
12. The search for competitive advantage rarely centers on supplementary services. ​FALSE
13. All service elements must be delivered in a prescribed sequence. ​FALSE
14. Consumption of the core product is sandwiched between use of supplementary
services that are needed earlier or later in the delivery sequence. ​TRUE
15. Core products are always surrounded by the same eight supplementary elements as
they evolve. ​FALSE
16. To obtain full value from any good or service, customers need relevant information.
TRUE
17. Hospitality represents a more subtle approach to consultation because it involves
helping customers better understand their situations. ​FALSE
18. “Exceptions” involve supplementary services that fall outside the routine of normal
service delivery. ​TRUE
19. Information processing services tend to be the most demanding in terms of
supplementary elements. ​FALSE
20. Style changes represent the simplest type of innovation, typically involving no
changes in either process or performance. ​TRUE

Short Answer
21. What three components must the value proposition address and integrate?
Core products, supplementary services, and delivery processes.
22. What four things must the design of the service offerings address?
How the different service components are delivered to the customer, the
nature of the customer’s role in those processes, how long delivery lasts, and
the prescribed level and style of service to be offered.
23. List three examples of order-taking elements in order entry.
On-site order fulfillment. Mail/telephone order placement. E-mail/Web site order
placement.
24. Give two examples of billing elements.
Periodic statements of account activity. Invoices for individual transactions.
25. Give an example of a consultation element.
Advice—personal counseling, tutoring/training in product use, or
management or technical consulting.

APPLICATION CONTENT
Multiple Choice Questions
25. Airlines make use of ____________ systems, based on telephone or Web site
reservations. This provides enormous cost savings for airlines because it reduces
____________.
a. Ticketless; gross revenue charges
b. Partial; gross revenue charges
c. Ticketless; travel agent commissions
d. Partial; travel agent commissions
e. Ticketless; net revenue charges

26. Which of the following is an example of a special request in advance of service

delivery?
a. Dietary requirements
b. Complaints
c. Warranties
d. Refunds
e. Suggestions

Short Answer
27. What are the two roles of supplementary services?
Facilitating or enhancing.
28. Give two examples of facilitating services.
Information, order-taking (billing, payment)
29. Give two examples of enhancing services.
Consultation, hospitality (safekeeping, exceptions).
30. Why do firms benefit from prompt payments?
It reduces the amount of accounts receivable that is counted as a liability