Focusing On Customers True/False Questions

CHAPTER 4
FOCUSING ON CUSTOMERS
TRUE/FALSE QUESTIONS
1. The total package of products and services offered by a company is often called
the provider’s benefit package.
ANS: F
AACSB: Analytic Skills
2. Producers should focus on a customer’s perception of quality since perceived

quality can influence consumer behavior.
ANS: T
AACSB: Reflective Thinking Skills
3. Expected quality is a measure of what a manufacturer thinks customers want in a

product or service.
ANS: F
4. Unexpected dissatisfaction occurs when expected quality is higher than actual

quality.
ANS: T
5. The first step in designing a customer satisfaction survey is to determine the

necessary sample size.
ANS: F
6. Likert scales allow customers to express their degree of opinion.

ANS: T
7. Failure to identify appropriate quality dimensions has been cited as a common

reason why some customer satisfaction schemes fail.
ANS: T
8. The computation of “customer perceived value” (CPV) involves identifying

product attributes and weighing them equally for consumers.
ANS: F
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9. Sellers that provide the greatest CPV at the time of the purchasing decision
always win the sale.
ANS: T
10. At the process level, the internal customers are other departments or processes
within the organization.
ANS: T
11. Gross present value of the customer (GPVC) is defined as the revenue associated
with a customer minus expenses need to serve the customer, discounted over time.
ANS: F
12. A product’s primary operating characteristics is referred to as the “performance”

dimension of quality.
ANS: T
13. The speed, courtesy, and competence of repair work are referred to as the
“reliability” dimension of quality.
ANS: F
14. Providing a clean service environment (such as a clean auto-repair facility) affects
the “tangible” dimension of service quality.
ANS: T
15. According to Kano’s classifications, as customers become more familiar with new
or innovative product features, an “exciter/delighter” becomes a “satisfier.”
ANS: T
16. Customer-contact employees are employees who experience “moments of truth”

with the customer.
ANS: T
17. A disadvantage of focus groups is the inability to probe the participants.

ANS: F
18. Surveys are a more effective means of gathering customer information than are
focus groups.
ANS: F
19. The scope of customer satisfaction criteria is broader in the ISO 9000:2000
standard than in the Baldrige criteria.
ANS: F
20. Critical to quality (CTQ) characteristics in the Six Sigma methodology cannot be
linked to customer satisfaction.
ANS: F
MULTIPLE CHOICE QUESTIONS
1. If a competitor’s product offers the same benefits at a lower price, then the
competitor’s product provides:
a. higher value.
b. lower quality.
c. lower value.
d. higher quality.
ANS: a
2. The determinants of the American Customer Satisfaction Index value include all
of the following EXCEPT:
a. perceived value.
b. customer loyalty.
c. customer expectations.
d. perceived quality.
ANS: b
3. _____ is the product quality dimension which relates to the degree to which a
product’s physical and performance characteristics match pre-established
standards.
a. Features
b. Performance
c. Conformance
d. Serviceability
ANS: c
4. Maintaining a clean, well-lighted waiting room in a doctor’s office is an example
of which service quality dimension?
a. Competence
b. Courtesy
c. Assurance
d. Tangibles
ANS: d
5. Which of the following is NOT a dimension of product quality listed in the

textbook?
a. Performance
b. Responsiveness
c. Features
d. Conformance
ANS: b
6. According to Kano’s classification of customer requirements, a cup of coffee that

is served hot and fresh at a restaurant specializing in breakfasts fits which class of
customer requirements?
a. Dissatisfier
b. Satisfier
c. Exciter
d. Delighter
ANS: a
7. Which of the following is used to organize large number of ideas or facts into
natural groupings?
a. Process flow chart
b. Scoring system
c. Affinity diagram
d. Likert scale
ANS: c
8. Leading customer-oriented practices of successful companies include all of the

following EXCEPT:
a. recognize that all customers should to be treated in the same manner.
b. understand the linkages between customer needs and business processes.
c. make commitments to customers that build trust and confidence.
d. compare customer satisfaction results to those of their competitors.
ANS: a
9. Employees’ ability to convey trust and confidence pertains to which service
quality dimension?
a. Empathy
b. Responsiveness
c. Assurance
d. Reliability
ANS: c
10. Suppose an advertisement for an automobile stresses that the car does not need a
tune-up for 100,000 miles. It can be best described that this advertisement is
focusing on which product quality dimension?
a. Reliability
b. Features
c. Tangibles
d. Assurance
ANS: a
11. Dave noticed that where he gets his haircut at Hair Town, there is an employee
who (every 15 minutes) sweeps up the hair that has fallen on the floor. By doing
this, the management at Hair Town is trying to affect which quality dimension?
a. Reliability
b. Tangibles
c. Competence
d. Empathy
ANS: b
12. According to Garvin’s quality dimensions, which one of the following definitions
does NOT match the associated dimension?
a. Dimension: features; Definition: the “bells and whistles” of a product
b. Dimension: aesthetics; Definition: how a product looks, feels, smells, etc.
c. Dimension: reliability; Definition: a product’s primary operating
characteristics
d. Dimension: conformance; Definition: the degree to which the product meets
pre-established standards
ANS: c
13. Bill designs and maintains the inventory management software that his coworker
John uses when customers call the company to place an order for merchandise.
Bill is John’s ____________.
a. internal customer
b. external customer
c. internal supplier
d. external supplier
ANS: c
14. “Moments of truth” are instances when:

a. new products are launched.
b. a firm is audited.
c. a customer comes into contact with an employee.
d. a new competitor enters the market with higher quality.
ANS: c
15. Leading practices of customer focused organizations include all of the following
EXCEPT:
a. defining and segmenting customer groups
b. having effective complaint management processes
c. ensuring that every contact with a customer results in a sale
d. employing systematic processes for listening to customers
ANS: c
16. Which of the following is NOT TRUE about the American Customer Satisfaction
Index?
a. It focuses on buyer satisfaction associated with consumer non-durable goods.
b. It was first conducted in 1994.
c. It is based on a large national sample of consumers.
d. It is designed to indicate national trends as well as industry trends.
ANS: a
17. Measurable performance levels that define the quality of customer contact with an
organization’s representatives are known as:
a. customer contact requirements.
b. quality function deployments.
c. indexed service standards.
d. consumer benefits packages.
ANS: a
18. Suggested reasons why many customer satisfaction efforts fail include all of the
following EXCEPT:
a. using poor satisfaction measurement schemes
b. failing to weight quality dimensions equally
c. confusing loyalty with satisfaction
d. failing to identify appropriate quality dimensions
ANS: b
19. The net present value of the customer relates to:

a. the cost to keep the customer minus the cost to replace the customer.
b. the profit gained from the customer minus the cost to keep the customer.
c. the total profits gained from the customer discounted over time.
d. the revenue gained from the customer after deducting rebates.
ANS: c
20. The outcome of the production process that is delivered to the customer is
referred to as:
a. net quality.
b. design quality.
c. perceived quality.
d. actual quality.
ANS: d
21. ________ quality is what the customer assumes will be received from the product.
a. Actual
b. Expected
c. Design
d. Perceived
ANS: b
22. Which one of the following is least likely to occur?

a. Actual quality exceeds design quality
b. Expected quality exceeds actual quality
c. Actual quality exceeds perceived quality
d. Design quality exceeds expected quality
ANS: a
23. A question on a customer service questionnaire uses the following measurement
scale.
Strongly Strongly
Agree Agree Neutral Disagree Disagree
1 2 3 4 5
This is an example of what type of measurement scale?

a. Taguchi
b. Shewhart
c. Garvin
d. Likert
ANS: d
24. The Kano classification scheme segments customer requirements into:

a. responders, non-responders, and no opinions.
b. internalists, externalists, and quasi-receptors.
c. dissatisfiers, satisfiers, and exciters.
d. non-necessities, necessities, and luxuries.
ANS: c
25. The physical facility and equipment of a resort hotel represent which dimension
of service quality?
a. Responsiveness
b. Tangibles
c. Reliability
d. Assurance
ANS: b
26. The willingness to schedule deliveries at the customer’s convenience, explaining

technical jargon in a layperson’s language, and recognizing regular customers by
name are all examples of the _____ dimension of service quality.
a. reliability
b. assurance
c. responsiveness
d. empathy
ANS: d
27. The ability to accurately and dependably provide a customer with what was
promised illustrates the service quality dimension of:
a. reliability
b. assurance.
c. responsiveness.
d. empathy.
ANS: a
28. Which of the following is a critical question to ask when developing a customer
satisfaction measurement program?
a. What is the cost of the program?
b. Who is the customer?
c. Why is the program needed?
d. Which level of management has responsibility for the program?
ANS: b
29. The easiest way to identify customers is to think in terms of:

a. communication channels.
b. service-delivery models.
c. customer–supplier relationships.
d. stakeholders in the service delivery system.
ANS: c
30. Actionable results are achieved if survey responses are:

a. skewed toward the pain points in the system.
b. tied directly to key business processes.
c. similar to key problems identified by the management.
d. collected from an even mix of internal and external customers.
ANS: b
31. Questions in a satisfaction survey must be properly designed in order to:

a. be short.
b. cover all facets of the market.
c. achieve actionable results.
d. address more than one issue per question.
ANS: c
32. Efficient customer satisfaction measurement schemes should try to identify:
a. the customer's importance and the firm’s performance of key quality
characteristics.
b. inconsistencies in satisfaction responses of the target customer group.
c. the firm’s performance of key quality characteristics but not the customer’s
importance.
d. key customer groups that provide the major revenue to the business.
ANS: a
33. Modern outlook on customer satisfaction requires that firms must first:
a. avoid creating dissatisfied customers because of product or service failures.
b. design efficient customer service systems.
c. enforce stringent quality control standards for product delivery.
d. conduct effective feasibility studies before delivering a product or service.
ANS: a
34. _____ is an important outcome of a customer-focused culture and the

organization’s listening, learning, and performance- excellence strategy.
a. Customer benefit package
b. Feedback loop
c. Customer service
d. Customer engagement
ANS: d
35. The _____ includes the physical product and its quality dimensions, presale
support, and post-sale support.
a. customer engagement
b. customer benefit package
c. organizational support
d. total quality package
ANS: b
36. Organizations can use the ACSI data to do all of the following EXCEPT:
a. predict customer loyalty.
b. identify potential barriers to entry within markets.
c. predict return on investments.
d. pinpoint areas in which customer expectations are not being satisfied.
ANS: a
37. Identifying customer–supplier relationships begins with asking some fundamental
questions as mentioned below EXCEPT:
a. What goods or services are produced by my work?
b. Who uses these products and services?
c. Why do I call, write to, or answer questions for?
d. Who supplies the inputs to my process?
ANS: c
38. Juran suggests classifying customers into two main groups: the ____ and the
_____.
a. vital few; useful many
b. organizers; opportunists
c. exciters; delighters
d. internal; external
ANS: a
39. _____ can be measured by the net present value of the customer.
a. Break-even point
b. Repeat sales
c. Profit potential
d. Market value
ANS: c
40. Which of the following is NOT TRUE of the net present value of customers?
a. A firm can determine the net value of offering increasing levels of benefits to
users.
b. Profit potential can be measured by the net present value of the customer.
c. The number of transactions associated with repeat customers cannot be
estimated.
d. Firms can use it to eliminate customers with low or negative values that
represent a financial liability.
ANS: c
41. _____ allows the company to align its internal processes according to the most
important customer expectations or their impact on shareholder value.
a. Market value
b. Segmentation
c. Penetration strategy
d. Relation analysis
ANS: b
42. _____ refers to a product’s primary operating characteristics.
a. Performance
b. Features
c. Conformance
d. Aesthetics
ANS: a
43. A car’s fit and finish and freedom from noises and squeaks can reflect this
dimension.
a. Performance
b. Features
c. Conformance
d. Aesthetics
ANS: c
44. Research identified five principal dimensions that contribute to customer

perceptions of service quality. Which of the following is NOT one of them?
a. Reliability
b. Assurance
c. Fringe benefits
d. Responsiveness
ANS: c
45. _____ refer to the requirements that are expected in a product or service.
a. Dissatisfiers
b. Satisfiers
c. Exciters
d. Delighters
ANS: a
46. Providing _____ is often considered the minimum required to stay in business.
a. dissatisfiers
b. satisfiers
c. exciters
d. delighters
ANS: b
47. Customer requirements, as expressed in the customer’s own terms, is called the:
a. appreciative inquiry
b. market intelligence
c. customer’s meaning
d. voice of the customer
ANS: d
48. Some of the key approaches to gathering customer information include all of the
following EXCEPT:
a. direct customer contact.
b. focus groups.
c. external consultant information.
d. monitor the Internet.
ANS: c
49. Any employee who comes in direct contact with customers can obtain useful
information simply by engaging in conversation and listening to customers. This
is an example of:
a. focus groups
b. direct customer contact
c. field intelligence
d. study complaints
ANS: c
50. One useful tool for organizing large volumes of information efficiently and
identifying natural patterns or groupings in the information is the _____.
a. interrelationship diagraph
b. tree diagram
c. matrix diagram
d. affinity diagram
ANS: d
51. _____ quality is the outcome of the production process and what is delivered to
the customer.
a. Delivery
b. Actual
c. Service
d. Design
ANS: b
52. Because _____ quality drives consumer behavior, producers should make every
effort to ensure that ____ quality conforms to _____ quality.
a. perceived; actual; expected
b. expected; perceived; actual
c. expected; actual; perceived
d. actual; perceived; expected
ANS: a
53. _____ are measurable performance levels or expectations that define the quality
of customer contact with representatives of an organization.
a. Attitude scales
b. Behaviorally Anchored Rating Scales
c. Customer experience indexes
d. Customer contact requirement
ANS: d
54. Customer-focused organizations consider complaints as:

a. outcomes of public relations failure.
b. opportunities for improvement.
c. a symptom of systemic defects.
d. the rationale for customer service.
ANS: b
55. Studies in the service management literature suggest that customers who rated
service quality highly also had the highest expectations for _____.
a. service recovery
b. customer service
c. perceived value
d. net present value
ANS: a
56. Which of the following is NOT TRUE of complaints?

a. Organizations involved in customer relationship management train customer
contact personnel to deal with complaints.
b. The objective of customer service is to convert complaints into chargeable
service opportunities.
c. Complaints provide a source of product and process improvement ideas.
d. The complaint process itself needs to be monitored, evaluated, and improved.
ANS: b
57. Benefits of customer–supplier partnerships include all of the following EXCEPT:
a. access to technology or distribution channels not available internally.
b. shared risks in new investments and product development.
c. improved products through early design recommendations based on supplier
capabilities.
d. increased operations costs through better communications.
ANS: d
58. Measurement of customer engagement through the feedback process helps the
organization in all of the following EXCEPT:
a. discover customer perceptions of how well the organization is doing in
meeting customer needs, and compare performance relative to competitors.
b. identify market demographics to effectively segment the product market to
achieve better results.
c. identify internal work process that drive satisfaction and loyalty and discover
areas for improvement.
d. track trends to determine whether changes actually result in improvements.
ANS: b
59. Which of the following statements is NOT TRUE of designing customer

satisfaction surveys?
a. The first step in developing a customer satisfaction survey is to determine its
purpose.
b. Customer satisfaction measurement should not be confined to external
customers.
c. Independent third-party organizations often have more credibility to
respondents and can ensure objectivity in the results.
d. Telephone interviews are the most common means of measuring customer
satisfaction.
ANS: d
60. One way to evaluate customer satisfaction and use it effectively is to collect
information on both the importance and the performance of _____.
a. the marketing process
b. customer service personnel
c. key quality characteristics
d. sales data.
ANS: c
61. Customer perceived value (CPV) focuses more on _____ than on _____.
a. customer loyalty; satisfaction
b. net present value; expected value
c. quality characteristics; service delivery
d. customer experience; product features
ANS: a
ESSAY QUESTIONS
1. Beginning with the step of customer needs and expectations (expected quality),
identify and describe the remaining steps in the customer-driven quality life cycle.
(hint: drawing a diagram may be helpful)
ANS: The response should elaborate on the customer-driven quality cycle

presented in the text. The major steps in the cycle are identification of customer
needs, translation into product/service specifications (design quality), output
(actual quality), customer perceptions (perceived quality), and measurement and
feedback. A reproduction of the diagram presented in the text would augment the
response.
2. In addition to technical quality characteristics, customers have other needs and

expectations throughout the life cycle of product purchase and use. Discuss these
needs and expectations with respect to the dimensions of product quality as
appropriate.
ANS: In addition to technical quality characteristics, customer needs and

expectations may include knowledgeable sales representatives, functionality of
the product in the customer’s environment, reliable delivery, clear instructions on
how to use product, easy to service, accessible service representatives, and spare
parts availability over life of the product.
3. A mail order clothing company is considering using customer segmentation.
a. Discuss the benefits associated with customer segmentation.

b. Identify five different ways in which the clothing company could segment
customers.
ANS: Segmentation allows a company to prioritize customer groups. One way to

prioritize segments is to consider, for each group, the benefits of satisfying
requirements and the consequences of not satisfying requirements. This
determination of benefits and consequences allows the company to align its
internal processes with the appropriate group of customer expectations. A
clothing company might segment its customers by income level (high, middle,
low), by place of residence (urban, suburban, rural), by position in the distribution
chain (wholesale or retail), by country, or by clothing type (shirts, pants, shoes).
4. Identify and discuss the five key dimensions of service quality. Given an example
of a service and describe how a customer may define quality along each of these
dimensions.
ANS: Response should elaborate on the five dimensions of service quality:

reliability, assurance, tangibles, empathy, and responsiveness. Examples will
vary.
5. Describe at least four leading practices of customer-focused organizations.
ANS: Leading practices at customer focused organizations include: clearly

defining customer groups and segmenting markets; understanding near- and long-
term needs of customers and employing systematic listening processes;
understanding the linkages between the voice of the customer and the
organization’s processes; building customer relationships through effective
customer service processes; effective complaint management; measuring
customer satisfaction and using this information to improve internal processes.
6. In services, customer satisfaction or dissatisfaction takes place during “moments

of truth.” Explain this statement and identify a moment of truth that you recently
experienced.
ANS: Moments of truth represent any transaction between a company’s employee

and a potential customer. It has been proposed that a company’s reputation is on
the line during each of these transactions. This notion is particularly appropriate
in the context of service operations, due to the high degree of customer
interaction. A firm should anticipate and plan for these moments of truth so that
its reputation is maintained or enhanced.
7. Define each of the following terms as they relate to Kano’s model: dissatisfier,
satisfier, and exciters/delighters. Explain how an exciter/delighter can become a
satisfier in general and then provide a specific product example.
ANS: Dissatisfiers are requirements that are expected in a product or service.

Satisfiers are requirements that customers say they want. Exciters/delighters are
innovative features that customers do not expect. An exciter/delighter can
become a satisfier (and perhaps even a dissatisfier) over time, as customers
become familiar with them to the point where such features become a standard
expectation.
8. In addition to focus groups and mail questionnaires, identify other methods that
can be used to collect customer service information.
ANS: Other methods to collect customer information include direct customer

contact, gathering field intelligence through marketing or service employees,
studying complaints, and involving customers in prototype product development.
9. Discuss the role of complaint management in customer relationship management.
ANS: Response should focus on the role of effective complaint resolution in

increasing customer loyalty and retention. Some statistics citing complaints and
influence on retention, loyalty, and performance should augment the response.
The response should also consider the importance of qualified, empathic customer
service personnel, and the notion of complaints as a source of improvement ideas.
10. Describe issues that should be considered in the design of an effective survey to
measure customer satisfaction.
ANS: Issues related to questionnaire design include first defining the purpose of
the survey, developing questions that can detect differences in satisfaction levels,
wording questions so that they are clear, being able to relate results to actionable
items, how to conduct the survey, and balancing questionnaire comprehensiveness
with length.
11. Identify the category of the Baldrige criteria that directly relates to focusing on
customers. List the examination items associated with this category. Explain the
specific management processes that comprise each examination item.
ANS: As of 2009- 10, the Baldrige category was Customer Focus (Category 3).
The examination items included Customer Engagement (3.1) and Voice of the
Customer (3.2). The text lists the management processes associated with this
version of the Criteria. The response should focus on the examination items and
management processes associated with the current version of the Criteria, since
the requirements are revised annually.
12. Discuss how customer satisfaction measurement efforts can fail. Provide one
company example provided in the text that development a customer satisfaction
scheme that prevented one of these failures from occurring.
ANS: The answer should focus on the use of poor measurement schemes, failure
to identify appropriate quality dimensions, failure to weigh dimensions, lack of
comparisons with competitors, failure to measure potential and former customer
perceptions, and confusing loyalty with satisfaction.
13. Discuss how customer relationship management software may assist a firm in
understanding its customer needs and preferences, both present and anticipated.
ANS: The answer should focus on the capabilities of the software as described in
the text. By following purchase trends, firms that target the customer with
specific ads or information to anticipate the future purchase preferences and,
therefore, satisfaction.
14. Describe how a Six Sigma project may lead to increase customer satisfaction.
ANS: The answer should focus on the project’s identification of CTQs. In this
manner, these measures may indeed be ultimately tied to customer satisfaction
and improvement if the CTQ measures are directly linked to product or service
quality purchased by the consumer.
CASE QUESTIONS
1. In the American Parkinson’s Disease Association Center case, discuss how the
center can improve the customer benefit package it can offer to its customers.
Answer: Student suggestions will vary. As discussed in the chapter, the Center
should look at how to link customer information to the design and service
delivery in each case. Feedback mechanisms are of utmost importance in this
regard. The benefit package should take into account the ambience, medications,
staff support, and after-service support.
2. Considering the design of the La Rosa restaurant, examine the customer profile
the restaurant will be targeting. What aspects of the design led you to this
conclusion? Discuss.
Answer: Student answers will vary. For any design to be effective, it has to have
the customer in mind before the initial plans are drawn. Analyzing the
infrastructure and feel of the La Rosa restaurant, students may be able to conclude
at the demographics of the target customers. Various factors like age, socio-
economic segment, lifestyle, etc. should be considered to arrive at a consensus.

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CHAPTER 4

2. Producers should focus on a customer’s perception of quality since perceived

3. Expected quality is a measure of what a manufacturer thinks customers want in a

4. Unexpected dissatisfaction occurs when expected quality is higher than actual

5. The first step in designing a customer satisfaction survey is to determine the

6. Likert scales allow customers to express their degree of opinion.

7. Failure to identify appropriate quality dimensions has been cited as a common

8. The computation of “customer perceived value” (CPV) involves identifying

12. A product’s primary operating characteristics is referred to as the “performance”

16. Customer-contact employees are employees who experience “moments of truth”

17. A disadvantage of focus groups is the inability to probe the participants.

MULTIPLE CHOICE QUESTIONS

5. Which of the following is NOT a dimension of product quality listed in the

6. According to Kano’s classification of customer requirements, a cup of coffee that

8. Leading customer-oriented practices of successful companies include all of the

14. “Moments of truth” are instances when:

19. The net present value of the customer relates to:

22. Which one of the following is least likely to occur?

This is an example of what type of measurement scale?

24. The Kano classification scheme segments customer requirements into:

26. The willingness to schedule deliveries at the customer’s convenience, explaining

29. The easiest way to identify customers is to think in terms of:

30. Actionable results are achieved if survey responses are:

31. Questions in a satisfaction survey must be properly designed in order to:

34. _____ is an important outcome of a customer-focused culture and the

44. Research identified five principal dimensions that contribute to customer

54. Customer-focused organizations consider complaints as:

56. Which of the following is NOT TRUE of complaints?

59. Which of the following statements is NOT TRUE of designing customer

ANS: The response should elaborate on the customer-driven quality cycle

2. In addition to technical quality characteristics, customers have other needs and

ANS: In addition to technical quality characteristics, customer needs and

3. A mail order clothing company is considering using customer segmentation.

a. Discuss the benefits associated with customer segmentation.

ANS: Segmentation allows a company to prioritize customer groups. One way to

ANS: Response should elaborate on the five dimensions of service quality:

5. Describe at least four leading practices of customer-focused organizations.

ANS: Leading practices at customer focused organizations include: clearly

6. In services, customer satisfaction or dissatisfaction takes place during “moments

ANS: Moments of truth represent any transaction between a company’s employee

ANS: Dissatisfiers are requirements that are expected in a product or service.

ANS: Other methods to collect customer information include direct customer

9. Discuss the role of complaint management in customer relationship management.

ANS: Response should focus on the role of effective complaint resolution in

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