New Service Development

CHAPTER 3

NEW SERVICE Development

CHAPTER QUIZ QUESTIONS

True/False

1. The "line of visibility" found in a service blueprint separates the front office operations from the back office operations. (T)

2. A factor that simplifies the design of service systems is the presence of the customer in the process. (F)

3. A “line of interaction” also can be found on a service blueprint. (T)

4. An increase in divergence can maximize the revenue that is generated by each customer. (T)

5. Dry cleaning is an example of a service where isolation of the technical core would be inappropriate. (F)

6. Fast-food restaurants have adopted the production-line approach to service design. (T)

7. An important variable in the design process is the amount of customer participation in the delivery of the service. (T)

8. Financial consulting is a service with low complexity and high divergence. (T)

9. Ideas for new service innovations often originate with customers. (T)

10. A major incentive for innovation in services is the ability to patent an idea. (F)

11. Service complexity can be measured by analyzing the number and intricacy of the steps required performing it. (T)

12. The “project authorization” in the NSD cycle is part of the development step. (F)

13. The “line of visibility” for a self-service process blueprint would be near the top of the diagram. (F)

14. A service blueprint will not facilitate creative problem solving because it will be too rigid a definition of the service delivery system. (F)

15. Investment banking is a financial service that has high complexity and high divergence. (T)

16. Limited discretion of service workers is a feature of the production-line approach to service design. (T)

17. Basic research typically is limited to federal, university, and nonprofit organizations. (T)

18. In the new service development process cycle, development follows design. (F)

19. JIT is an example of information driven technology innovation. (F)

20. The service encounter is a structural service design element. (F)

21. Intellectual property is a creation of the mind. (T)

22. Intellectual property rights allow the owner to secure monopoly profits for a limited time. (T)

23. Radical service innovations are driven mostly by technological innovations. (T)

24. Readiness to embrace new technology is a measure of how fast new technology is adopted in the marketplace. (F)

Multiple Choice

1. Which of the following is not a characteristic of a production-line approach to provide a service?

a. Division of labor

b. Substitution of technology for people

c. Standardization of the process and service provided

d. High employee autonomy in task execution*

2. One advantage of reduced divergence is

a. quicker response to market demands.

b. greater efficiency.*

c. maximization of revenue per customer.

d. the ability to command higher prices.

3. Service processes can be classified according to each of the following, except the

a. degree of customer satisfaction.*

b. degree of customer contact.

c. object of the service activity defined as goods, information or people.

d. degree of divergence ranging from standard to customized service.

4. Which one of the following is not an example of a high customer contact service?

a. Dry cleaning*

b. Banking

c. School

d. Hotel

5. The term "customer contact" refers to the

a. handling of the product by the customer.

b. influence the customer has on service design.

c. amount of time spent waiting in the system.

d. physical presence of the customer in the system.*

6. A service with a low degree of divergence allows a manager to consider all but one of the following options?

a. Hire workers who have little technical skills.

b. Substitute automation for repetitive tasks.

c. Empower workers with decision-making authority.*

d. Incorporate a "production-line" approach to service.

7. The most interactive element in the service blueprint of a fitness facility is the

a. choice of music played.

b. amount and type of exercise equipment.

c. attention given to prospective members on their initial visit.*

d. cleanliness of the locker rooms.

8. A service blueprint can be used for all but one of the following:

a. Educate customers.

b. Identify areas of service improvement.

c. Maintain the level of service complexity and divergence.*

d. Identify points where moments of truth will occur.

9. For companies offering customized services, which one of the following is true?

a. A comprehensive employee hiring process is very important.*

b. Employee tasks are low on divergence.

c. A production-line approach to service is desirable.

d. Information processing plays a minor role.

10. Which of the following is not an increase in service complexity?

a. A supermarket adds a florist shop.

b. A supper club opens for Sunday brunch.*

c. A restaurant switches from “house salad” to a salad bar with 40 items.

d. A health spa hires a massage therapist.

11. Which of the following is not an advantage of reducing the divergence of a service process?

a. Improved productivity

b. Uniformity

c. Greater flexibility*

d. Reduced costs

12. A service blueprint with a large number of intricate steps is considered to have a

a. high degree of divergence.

b. low degree of complexity.

c. high degree of complexity.*

d. low degree of divergence.

13. The new service development process cycle contains all but one of the following activities:

a. Engineering*

b. Analysis

c. Development

d. Full launch

14. Which of the following is not an incremental service innovation?

a. Service line extension

b. Service improvements

c. Style changes

d. Service quality initiative*

15. Which of the following is not a service design element?

a. Capacity planning

b. Managing capacity and demand

c. Market research*

d. Information

16. Which of the following features does not illustrate a contribution that the customer can make in the delivery of services?

a. Substitution of customer labor for provider labor

b. Smoothing service demand

c. Service standardization *

d. None of the above

17. Only _______ exceeded the United States in percent non-manufacturing share of total business R&D expenditure in 2001.

a. a. Japan

b. b. Norway*

c. c. Sweden

d. d. United Kingdom

18. Internet ________ shared the highest customer satisfaction score with Express Delivery.

a. search engines

b. auctions

c. brokerage

d. retail*

19. _________ is not a source of technology-driven service innovation.

a. Power/energy

b. Material

c. Location*

d. Facility design

20. In service design, to promote sales opportunity _______ is preferred to ________.

a. Phone Contact, Face-to-face Customized

b. Onsite Technology, Website*

c. Website, Onsite Technology

d. None of the above.

21. ___________ is not one of the categories of intellectual property.

a. A trademark

b. A trade secret

c. Industrial design.

d. Process layout*

22. Check processing is an example of a process with

a. indirect customer contact and low divergence.

b. direct customer contact and low divergence.

c. c. no customer contact and high divergence.

d. d. no customer and low divergence.*

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