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Classification of goods and services and distribution strategy

Case 1

Read the following fictitious case and answer the questions that follow:

Insurance fraud is the second most prevalent crime in the United States (income tax fraud is the first). It is one of the fastest growing crime categories during economic downturns. This spells good news for TLS Service Bureau, Inc. The company has more than forty employees who help insurance companies root out fraud. It also investigates embezzlement, internal theft, and other white-collar crimes for a number of corporations. Thomas L. Santamorena founded the company in 1997, and in 2001 its annual revenues topped $1.5 million. When asked how his business looked in the future, Santamorena said, "They (the insurance companies) don't care if it costs $10,000 to investigate a $500 bogus claim. They want to send out the message that they won't tolerate insurance fraud."

1. Answer each on the following:

A. A pure tangible good
B. A tangible good with accompanying services
C. A hybrid
D. A pure service
E. A major service with accompanying minor goods and services

2. Based on the previous question, how would you classify TLS Service Bureau, Inc? Support your answer with a logical reason.

Solution Preview

Case 1

Read the following fictitious case and answer the questions that follow:

Insurance fraud is the second most prevalent crime in the United States (income tax fraud is the first). It is one of the fastest growing crime categories during economic downturns. This spells good news for TLS Service Bureau, Inc. The company has more than forty employees who help insurance companies root out fraud. It also investigates embezzlement, internal theft, and other white-collar crimes for a number of corporations. Thomas L. Santamorena founded the company in 1997, and in 2001 its annual revenues topped $1.5 million. When asked how his business looked in the future, Santamorena said, "They (the insurance companies) don't care if it costs $10,000 to investigate a $500 bogus claim. They want to send out the message that they won't tolerate insurance fraud."

1. Answer each on the following:

A. A pure tangible good

- Pure Tangible goods are those which a person can see, touch and has some physical properties. Pure tangible goods are not linked to service in any way and are used purely in their physical form. Such goods are very high on the tangibility spectrum towards the tangibility. For example, the pure tangible goods involve salt, soaps, shirts, fruits, vegetables etc. Salt lies high on the tangibility spectrum and also does not ...

Solution Summary

The first case is concerned with TLS Services Bureau Inc. The first part of the solution explains the differences between pure tangible goods, tangible goods accompanying services, hybrid, pure service and major services with accompanying minor goods and services. The second part explains the category to which TLS Services Bureau belong to and the reasons for the same.

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