Services Cannot Be Seen, Tasted, or Felt, Before Purchase

question 1

Essay

Services cannot be seen, tasted, or felt, before purchase. The challenge to marketers of services is to "tangibilize the intangible" and "manage the evidence." What do these statements really mean for a marketer of a service firm, such as H&R Block?

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Definitions:

Discretionary Accruals

Accounting adjustments that management can influence, often used to smooth out earnings or manipulate financial results.

Debt Covenants

Restrictions lenders put on borrowing agreements to preserve their interests by restricting certain actions of the borrower.

Accounting Changes

Modifications in an entity's accounting principles, estimations, or reporting entity that necessitate restatements or disclosures in financial statements to reflect these changes accurately.

Fixed Charge Coverage

A financial ratio that measures a company's ability to cover its fixed charges, such as interest and lease expenses, with its earnings before interest, taxes, depreciation, and amortization (EBITDA).