Final answer:
Product differentiation and building a good reputation are methods management can use to ensure products and services exceed customer expectations.
Step-by-step explanation:
The method by which management develops policies and practices to ensure products and services exceed customer expectations is through product differentiation. Product differentiation refers to any action that firms do to make consumers think their products are different from their competitors'.
A good reputation is also essential in establishing customer expectations. When buyers know that a firm is concerned about its reputation, they are less likely to worry about receiving a poor-quality product. For example, a well-established grocery store with a good reputation can often charge a higher price than a temporary stand at a local farmer's market.
Firms want repeat customers, who will recommend the business to others. By implementing product differentiation strategies and building a good reputation, management can ensure that products and services exceed customer expectations and secure customer loyalty.