Final answer:
Service guarantees, such as money-back guarantees, are used at a company's core competency level to ensure focus on quality and customer satisfaction, especially important in situations where goods are sold without the customer seeing them first.
Step-by-step explanation:
Service guarantees can be used at the core competency level to focus the firm's delivery system on the things it must do well to satisfy the customer. A core competency is the area in which a business excels and is often limited to one or a few products or services. By concentrating on these strengths, the firm can ensure high-quality performance and offer money-back guarantees, which serve as a promise of quality and instill confidence in consumers.
Especially in situations where customers cannot physically inspect the products prior to purchase, such as with mail-order catalogs or online shopping, money-back guarantees are crucial in encouraging sales. This strategy highlights the company's commitment to quality and customer satisfaction, essential for maintaining a competitive edge. In this way, service guarantees become both an indicator and a driver of a business's focus on its core competencies.