Final answer:
It is false that merely beating the competition in service performance fulfills all customer service expectations. Satisfying customers in a monopoly or maintaining internal customer relations also matter, and market competition's role in fostering innovation is critical for long-term satisfaction.
Step-by-step explanation:
The statement that beating the competition in service performance is all a firm needs to do to satisfy customer service expectations is false. While exceeding competitors can give a firm an edge, there are multiple factors at play in customer satisfaction. Consider a monopoly where there is no competition; dominant firms still need to meet customer expectations to maintain positive relationships and reputation. Furthermore, taking an internal approach, treating managers as important internal customers requires offering exceptional customer service. Market competition is also key in driving innovation, which can lead to an increase in customer satisfaction due to improved products and services. Hence, it is clear that beating the competition is just one aspect of satisfying service expectations.