SECTION 2 TIME—25 MINUTES 18 QUESTIONS DIRECTIONS

15.

The passage suggests which of the following about

advantage for a company does not mean that every attempt

service provided by the regional bank prior to its

at improving service will create such an advantage. Invest-

investment in enhancing that service?

Line

ments in service, like those in production and distribution,

(A) It enabled the bank to retain customers at an

(5

) must be balanced against other types of investments on the

acceptable rate.

basis of direct, tangible benefits such as cost reduction and

increased revenues. If a company is already effectively on a

(B) It threatened to weaken the bank's competitive

par with its competitors because it provides service that

position with respect to other regional banks.

avoids a damaging reputation and keeps customers from

(C) It had already been improved after having caused

(10

) leaving at an unacceptable rate, then investment in higher

damage to the bank's reputation in the past.

service levels may be wasted, since service is a deciding

factor for customers only in extreme situations.

(D) It was slightly superior to that of the bank's

This truth was not apparent to managers of one regional

regional competitors.

bank, which failed to improve its competitive position

(E) It needed to be improved to attain parity with the

(15

) despite its investment in reducing the time a customer had

service provided by competing banks.

to wait for a teller. The bank managers did not recognize

the level of customer inertia in the consumer banking