5suppliers are regular expense items that are

5.Suppliers are regular expense items that are necessary in the firms daily operation but are not
part of the final product.
PTS: 1 DIF: 1 REF: 353-355 OBJ: 11-4
NAT: AACSB Analytic | CB&E Model Product | R&D Managing strategy & innovation
TYP: KN

8. What is Total Quality Management (TQM)? Discuss the standards the United States and Europe
have established in the quality management movement.
ANS:
a)
Total Quality Management (TQM) is a firm’s expectation that employees continually improve
products and work processes with the goal of achieving customer satisfaction and world-
class performance.
b)
The United States has established the Malcolm Bainbridge Award for excellence in quality
management.
c) The European Union has developed ISO 9002 standards, which set international standards
for quality management and assurance. These standards are designed to ensure consistent
quality among products manufactured and sold throughout the nations of the European
Union. Firms outside the European Union, fearing exclusion from this market, have moved

quickly to meet the ISO 9002 standards.
PTS: 1 DIF: 3 REF: 357 OBJ: 11-5
NAT: AACSB Analytic | CB&E Model Product | R&D Managing strategy & innovation
TYP: KN
9. Define benchmarking and discuss how it helps to improve a marketing strategy.
ANS:
Benchmarking is a process where an organization can continuously compare and measure itself
against industry leaders to learn how the best become the best. Its purpose is to achieve superior
performance that results in a competitive advantage in the marketplace.
Benchmarking involves:
a) Identifying processes that need improvement.
b)
Comparing internal processes against similar processes of industry leaders in order to
determine a firm’s strengths and weaknesses. This establishes a baseline for comparison. An
external analysis does the same for the firm’s competition. A comparison of both sets of
analysis can provide an objective basis for comparison of one’s firm with all others.
c)
Implementing improvements and measuring the effect of new work practices on a
continuing basis.
PTS: 1 DIF: 2 REF: 357-358 OBJ: 11-5
NAT: AACSB Analytic | CB&E Model Product | R&D Managing strategy & innovation

TYP: KN
10. What are the five variables of service quality? Define service gap.
ANS:
The five variables are: tangibles, reliability, responsiveness, assurances, and empathy. A service
gap is the difference between the level of service customers expect and the level they think
they’ve received. The service gap can be either favorable (better than expected) or unfavorable
(worse than expected).
PTS: 1 DIF: 2 REF: 358-359 OBJ: 11-5
NAT: AACSB Analytic | CB&E Model Product | R&D Managing strategy & innovation
TYP: KN