Chapter 4 – Customer Focus

1. Company M has short-term goals like achieving the predicted quarterly profit. Company N has
long-term goals like achieving sustained customer satisfaction. What can you infer about the
management culture?
a) Company M and Company N follows TQM
b) Company M and Company N follows traditional management
c) Company N follows traditional management, Company M follows TQM
d) Company M follows traditional management, Company N follows TQM
Answer: d
Explanation: Company M has a short-term goal to achieve the predicted quarterly profit which is
one of the characteristics of traditional management. Company N has a long-term goal which is
to sustain customer satisfaction. Customer satisfaction is TQM’s highest priority.
2. Which of the following is not part of customer perceptions, according to the ASQ survey?
a) Service
b) Discredit
c) Performance
d) Features
Answer: b
Explanation: Performance, Features and Service are part of customer perceptions. Discredit is
opposite to Reputation. The other customer perceptions are Warranty, Price and Reputation.
3. Which of the following is not an element of customer service?
a) Customer care
b) Organization
c) Co-founder
d) Communication
Answer: c
Explanation: Organization, Customer care, Communication, Front-line People and Leadership are
the elements of customer service. Customer service refers to the set of activities performed by
an organization to satisfy customers and their needs.
4. Organizations / People who use the product or output as an input for producing their own
product are called _________
a) Potential Customers
b) Hidden Customers
c) Suppliers
d) Processors
Answer: d
Explanation: Organizations / People who use the product or output as an input for producing
their own product are called Processors. For example, a refinery that receives crude oil and
processes it further into different products.
5. Who among the following do not fall under the category of External Customers?
a) Purchasers
b) Merchants
c) Hidden Customers
d) Quality Management Unit of a Company
 Answer: d
Explanation: Purchasers, Merchants and Hidden Customers fall under the category of External
Customers. Quality Management Unit of a Company can be considered to be an Internal
Customer.
6. According to ASQ survey, which of the following is not part of customer perceptions?
a) Performance
b) Features
c) Service
d) Discredit
Answer: d
Explanation: Performance, Features and Service are part of customer perceptions. Discredit is
opposite to Reputation. The other customer perceptions are Warranty, Price and Reputation.
7. Which among the following is not a factor influencing customer perception of quality before
making a purchase?
a) Company’s brand name and image
b) Opinions of friends
c) Spare parts availability
d) Published Test Results
Answer: c
Explanation: Company’s brand name and image, Opinions of friends and Published Test results
are important factors influencing customer perception of quality before making a purchase.
Spare parts availability is an important factor influencing customer perception of quality after
purchase.
8. Which among the following does not fall under the category of factors influencing customer
perception of quality before making a purchase?
a) Previous experience
b) Advertised price for performance
c) Store reputation
d) Reliability
Answer: d
Explanation: Previous experience, advertised price for performance and Store reputation are
important factors influencing customer perception of quality before making a purchase.
Reliability is an important factor influencing customer perception of quality after purchase.
9. Which among the following does not fall under the category of factors influencing customer
perception of quality at the point of making a purchase?
a) Performance specifications
b) Comments of sales people
c) Warranty provisions
d) Service effectiveness
Answer: d
Explanation: Performance specifications, Comments of sales people and Warranty provisions are
important factors influencing customer perception of quality at the point of making a purchase.
Service effectiveness is an important factor influencing customer perception of quality after
purchase.
10. Which among the following is not a factor influencing customer perception of quality at the
point of making a purchase?
a) Service and Repair Policies
b) Support Programs
c) Quoted Price for Performance
d) Comparative Performance
Answer: d
Explanation: Service and Repair Policies, Support Programs and Quoted Price for Performance
are important factors influencing customer perception of quality at the point of making a
purchase. Comparative Performance is an important factor influencing customer perception of
quality after purchase.
11. Which among the following is not a factor influencing customer perception of quality after
making a purchase?
a) Ease of use
b) Ease of installation
c) Previous experience
d) Handling of repairs claims and warranty
Answer: c
Explanation: Ease of use, Ease of installation and Handling of repairs, claims and warranty are
important factors influencing customer perception of quality after making a purchase. Previous
experience is an important factor influencing customer perception of quality before making a
purchase.
12. Which of the following is not the best way to gather information about customer needs?
a) Information on competitor’s products
b) Personal visits to customer locations
c) Employees with special knowledge of the customer
d) Threatening customers to tell their needs
Answer: d
Explanation: Information on competitor’s products, Personal visits to customer locations and
Employees with special knowledge of the customer are some of the best ways to gather
information about customer needs. Identifying customer needs is an essential duty of any
organization so as to deliver more relatable products or services to the customer.
13. Which of the following cannot be considered as a technique to gather information about
customer needs?
a) Customer meetings
b) Tracking customer complaints
c) Government or Independent Laboratory Data
d) Waiting for customer to come and talk about their needs
Answer: d
Explanation: Customer meetings, tracking customer complaints and Information from
Government or Independent Laboratory Data are all techniques to gather information about
customer needs. Waiting for customers to come and talk about their needs is something an
organization should never plan.
14. The customer needs that bring with them pleasant surprises and customer delight are called
________________
a) Performance Needs
b) Basic Needs
c) Excitement Needs
d) Excess Needs
Answer: c
Explanation: The customer needs that bring with them pleasant surprises and customer delight
are called Excitement Needs. Excitement needs if not fulfilled has no effect on customer
satisfaction.
15. The expression of dissatisfaction with a product/service, either orally or in writing, from an
internal customer or external customer is called _______
a) customer needs
b) customer delight
c) customer expectations
d) customer complaints
Answer: d
Explanation: The expression of dissatisfaction with a product/service, either orally or in writing,
from an internal customer or external customer, is called customer complaints. Customer
complaints may be due to a genuine cause, misunderstanding or unreasonable expectations.
16. Which of the following is not a tool used to collect customer complaints?
a) Ask the manager of the company to list down potential reasons for customer complaints
b) Social media
c) Toll – free telephone numbers
d) Customer visits
Answer: a
Explanation: Social media, Toll – free telephone numbers, Customer visits, Customer
questionnaire, Post – transaction surveys and Focus groups are some of the tools used to collect
information about customer complaints. Customer complaints may be related to the product or
after-sales service.
17. _________ is the set of activities performed by an organization used to satisfy the customer and
their needs.
a) Customer satisfaction
b) Customer service
c) Customer needs
d) Customer delight
Answer: b
Explanation: Customer service is the set of activities performed by an organization used to
satisfy the customer and their needs. The service can be provided before the sale of the product,
during the sale of the product and after the sale of the product.
18. Which of the following is not an element of customer service?
a) Organization
b) Customer care
c) Communication
 d) Co-founder
Answer: d
Explanation: Organization, Customer care, Communication, Front-line People and Leadership are
the elements of customer service. Customer service refers to the set of activities performed by
an organization to satisfy customers and their needs.
19. ________ defines activities which occur within an organization that ensures a customer is not
only satisfied but also retained.
a) Customer care
b) Customer satisfaction
c) Customer needs
d) Customer delight
Answer: a
Explanation: Customer care defines activities that occur within an organization that ensures a
customer is not only satisfied but also retained. Customer retention is more important than
attracting new customers.