Deck 10: E-Commerce: Digital Markets, Digital Goods

Question 1

Exchanges have become one of the most popular types of Net marketplace because they encourage competitive bidding that drives prices down.

Answer 1

False

Question 2

Ninety-six percent of all U.S. households with Internet access use a broadband connection.

Answer 2

True

Question 3

Intellectual property refers to all forms of human expression, both tangible and intangible.

Answer 3

False

Question 4

An example of the service provider business model is Flickr, a photo management and sharing Web site.

Question 5

E-commerce refers to the use of any networking technologies to transact business.

Question 6

Podcasting allows subscribers to listen to live, streaming radio and other audio content.

Question 7

Rich media advertisements are a sales-oriented marketing format.

Question 8

An example of the content provider business model is Barnesandnoble.com, a retailer of printed books.

Question 9

EDI standards that take advantage of network communications have yet to be fully implemented at the industry level.

Question 10

Advertising networks track a user's behavior at thousands of Web sites.

Question 11

In the free/freemium revenue model, firms offer basic services for free and charge a fee for special features.

Question 12

Automobile manufacturing is an example of a vertical market.

Question 13

The Internet shrinks information asymmetry.

Question 14

Behavioral targeting occurs at two levels: individual Web sites and through ISPs.

Question 15

Disintermediation provides major benefits to the distributor.

Question 16

In general, for digital goods, the marginal cost of producing another unit is about zero.

Question 17

Net marketplaces may either support contractual purchasing based on long-term relationships with designated suppliers, or short-term spot purchasing.

Question 18

Retail consumer e-commerce is growing at single-digit rates.

Question 19

Web personalization is used primarily as a major marketing tool.

Question 20

All previous mass media in modern history, including the printing press, use a broadcast model where content is created in a central location by experts.

Question 21

Through what channel did e-commerce first evolve?

A)Online advertising sales
B)Internet portals
C)Online book sales
D)Internet service providers

Question 22

Compared to digital markets, traditional markets have:

A)lower search costs.
B)stronger network effects.
C)higher delayed gratification effects.
D)higher transaction costs.

Question 23

Varying a product's price according to the supply situation of the seller is called ________ pricing.

A)menu
B)flexible
C)dynamic
D)asymmetric

Question 24

How are the Internet and e-commerce causing severe disruption to the existing advertising business model?

A)Ties between customer and businesses are being rethought.
B)Technology players such as Yahoo! seek to dominate online advertising and expand into offline ad brokerage.
C)New methods of advertising, such as blog advertising, are emerging.
D)The market entry costs for online advertising services are extremely low.

Question 25

Information density refers to the:

A)richness-complexity and content-of a message.
B)total amount and quantity of information delivered to consumers by merchants.
C)total amount and quantity of information available to all market participants.
D)amount of information available to reduce price transparency.

Question 26

A marketplace extended beyond traditional boundaries and removed from a temporal and geographic location is called a(n):

A)exchange.
B)marketspace.
C)online marketplace.
D)e-hub.

Question 27

Which of the following is not one of the unique features of e-commerce technology?

A)Information density
B)Transparency
C)Richness
D)Social technology

Question 28

Information ________ exists when one party in a transaction has more information that is important for the transaction than the other party.

A)transparency
B)asymmetry
C)complexity
D)discrimination

Question 29

The effort required to locate a suitable product is called:

A)price discrimination.
B)search costs.
C)menu costs.
D)shopping costs.

Question 30

Which feature of Internet technology has had the most effect in the Internet's rapid spread across the globe?

A)Ubiquity
B)Global reach
C)Universal standards
D)Social technology

Question 31

Digital goods are goods that are:

A)produced digitally.
B)sold over digital networks.
C)delivered digitally.
D)used with digital equipment.

Question 32

Compared to traditional goods, digital goods have:

A)greater pricing flexibility.
B)lower marketing costs.
C)higher production costs.
D)higher inventory costs.

Question 33

The integration of video, audio, and text marketing messages into a single marketing message and consumer experience describes which dimension of e-commerce technology?

A)Ubiquity
B)Personalization/customization
C)Richness
D)Interactivity

Question 34

Which of the following is not a recent development in e-commerce?

A)Wireless Internet connections grow rapidly.
B)Social networking sites become a new platform for e-commerce.
C)The music recording industry is disrupted as music creation and distribution become decentralized.
D)Online entertainment business models surge.

Question 35

Based on your reading of the chapter, e-commerce is:

A)still in a revolutionary phase.
B)widely accepted by consumers, although technology is still quickly changing.
C)not yet fully accepted by consumers, although much of its driving technology is firmly in place.
D)well entrenched as a form of modern commerce.

Question 36

Selling the same goods to different targeted groups at different prices is called:

A)cost customization.
B)cost optimization.
C)price gouging.
D)price discrimination.

Question 37

The quality of ubiquity, as it relates to e-commerce, is illustrated by:

A)the same set of standards being used across the globe.
B)the spread of plentiful, cheap information.
C)the enabling of commerce worldwide.
D)the availability of the Internet everywhere and anytime.

Question 38

Reducing the business process layers in a distribution channel is called:

A)disintermediation.
B)BPR.
C)market segmentation.
D)network effects.

Question 39

The act of engaging consumers in a dialog that dynamically adjusts the experience to the individual describes which dimension of e-commerce technology?

A)Ubiquity
B)Personalization/customization
C)Richness
D)Interactivity

Question 40

The lowered costs of information storage, processing, and communication, along with the improvement of data quality, has resulted in which unique quality of e-commerce?

A)Information density
B)Richness
C)Customization
D)Interactivity

Question 41

In which of the following Internet business models does a merchant create an online digital environment that enables people with like interests to share information?

A)Community provider
B)Service provider
C)Market creator
D)Transaction broker

Question 42

Compared to traditional goods, digital goods incur:

A)lower distribution costs.
B)higher marginal costs per unit.
C)equivalent copying costs.
D)similar inventory costs.

Question 43

Which of the following best illustrates the transaction fee revenue model?

A)eBay receives a small fee from a seller if a seller is successful in selling an item.
B)Epinions receives a fee after steering a customer to a participating Web site where he or she makes a purchase.
C)Flickr provides basic services for free, but charges a premium for advanced services.
D)Apple accepts micropayments for single music track downloads.

Question 44

Transaction brokers:

A)generate revenue from advertising or from directing buyers to sellers.
B)save users money and time by processing online sales transactions.
C)provide a digital environment where buyers and sellers can establish prices for products.
D)sell physical products directly to consumers or individual businesses.

Question 45

Which of the following Internet business models does Amazon.com use?

A)Content provider
B)Portal
C)Market creator
D)E-tailer

Question 46

Exposing an individual to ads that are chosen and based on the recorded and analyzed online behavior of the individual is referred to as:

A)clickstream advertising.
B)behavioral targeting.
C)online profiling.
D)long tail marketing.

Question 47

Which of the following best describes the digital social graph?

A)A person's direct and indirect relationships
B)All of a person's closest digital relationships
C)A mapping of all online social relationships
D)All of the online and offline relationships a person has

Question 48

The process of sourcing goods and materials, negotiating with suppliers, paying for goods, and making delivery arrangements is called:

A)e-procurement.
B)SCM.
C)procurement.
D)sourcing.

Question 49

Market creators:

A)save users money and time by processing online sales transactions.
B)provide a digital environment where buyers and sellers can establish prices for products.
C)create revenue by providing digital content over the Web.
D)sell physical products directly to consumers or individual businesses.

Question 50

eBay is an example of:

A)C2C e-commerce.
B)B2B e-commerce.
C)B2C e-commerce.
D)M-commerce.

Question 51

In which of the following revenue models does a Web site charge a fee for access to some or all of its offerings on a continual, regular basis?

A)Subscription
B)Free/freemium
C)Transaction fee
D)Sales

Question 52

Netflix's public announcement of a reward for a technology solution to its movie recommendation system is an example of:

A)prediction markets.
B)behavioral targeting.
C)long-tail marketing.
D)crowdsourcing.

Question 53

Which of the following statements about B2B commerce is not true?

A)Eighty percent of online B2B e-commerce is still based on EDI.
B)B2B e-commerce represents approximately 10% of the overall B2B marketplace.
C)B2B e-commerce only includes commercial transactions between firms.
D)B2B e-commerce revenues in 2013 were over $4 trillion.

Question 54

Which of the following best illustrates the affiliate revenue model?

A)eBay receives a small fee from a seller if a seller is successful in selling an item.
B)Epinions receives a fee after steering a customer to a participating Web site where he or she makes a purchase.
C)Flickr provides basic services for free, but charges a premium for advanced services.
D)Apple accepts micropayments for single music track downloads.

Question 55

Which of the following businesses utilize the content provider Internet business model?

A)Amazon.com
B)eBay.com
C)CNN.com
D)Facebook

Question 56

EDI is:

A)the use of Internet technologies for electronic data transactions.
B)the exchange between two organizations of standard transactions through a network.
C)electronic data invoicing.
D)electronic delivery infrastructure.

Question 57

________ describes the concept that a large group of people is better at making good decisions than a single person.

A)The wisdom of crowds
B)Outsourcing
C)Crowdsourcing
D)Social graphing

Question 58

Selling products and services directly to individual consumers via the Internet best describes:

A)B2B e-commerce.
B)C2C e-commerce.
C)M-commerce.
D)B2C e-commerce.

Question 59

Which of the following best illustrates the sales revenue model?

A)eBay receives a small fee from a seller if a seller is successful in selling an item.
B)Epinions receives a fee after steering a customer to a participating Web site where he or she makes a purchase.
C)Flickr provides basic services for free, but charges a premium for advanced services.
D)Apple accepts micropayments for single music track downloads.

Question 60

Consumers selling goods and services electronically to other consumers best describes:

A)disintermediation.
B)C2C e-commerce.
C)M-commerce.
D)B2C e-commerce.

Question 61

Net marketplaces:

A)focus on continuous business process coordination between companies for supply chain management.
B)are industry owned or operate as independent intermediaries between buyers and sellers.
C)are geared towards short-term spot purchasing.
D)are more relationship oriented than private industrial networks.

Question 62

Indirect goods are not involved firsthand in the production process.

Question 63

________ is a peer-to-peer market in which participants bet on the outcomes of current events, business, or social trends.

A)Crowdsourcing
B)A net marketplace
C)A prediction market
D)A futures auction

Question 64

Which of the following is a marketing format that uses banner ads and pop-ups with interactive features?

A)Search engine ads
B)Video ads
C)Rich media ads
D)Display ads

Question 65

Content providers use ________ systems to process large amounts of very small monetary transactions cost-effectively.

A)subscription
B)mobile payment
C)transaction fee
D)micropayment

Question 66

A third-party Net marketplace that connects many buyers and suppliers for spot purchasing is called a(n):

A)exchange.
B)vertical market.
C)private exchange.
D)e-hub.

Question 67

Switching costs are the merchants' costs of changing prices.

Question 68

The behavioral targeting of ads results in consumers responding ten times more frequently than when delivered ads randomly.

Question 69

Goods that are involved in the actual production process are referred to as:

A)raw materials.
B)direct goods.
C)purchasing goods.
D)indirect goods.

Question 70

Which of the following is not one of the four main types of e-commerce presence?

A)Social media
B)Offline media
C)Blogs
D)E-mail

Question 71

Which of the following social commerce features allows social network sites to gather and distribute to others information about which products a user likes and dislikes?

A)Social sign-on
B)Collaborative shopping
C)Network notification
D)Social search

Question 72

Viral marketing is like traditional word-of-mouth marketing except that it is spread via online communities.

Question 73

A new social mobile app you are developing allows users to find friends who are logged in and within a 10-mile radius. This would be categorized as a ________ service.

A)geosocial service
B)geoinformational
C)geoadvertising
D)geomapping

Question 74

Which of the following statements about m-commerce is not true?

A)In 2013, m-commerce represented about 10 percent of all e-commerce.
B)M-commerce is the fastest growing form of e-commerce.
C)In 2013, Amazon's m-commerce retail sales contributed approximately 10% of all m-commerce revenues.
D)In 2013, the main areas of growth are in online banking and location-based services.

Question 75

A secure Web site that links a large firm to its suppliers and other key business partners is called a(n):

A)e-hub.
B)marketspace.
C)exchange.
D)private industrial network.

Question 76

E-hubs are more ________ than private industrial networks.

A)transaction oriented
B)collaborative
C)independent
D)supply-chain oriented

Question 77

Price transparency refers to the ability of consumers to discover what merchants actually pay for products.

Question 78

Which of the following is not one of the platforms to be considered in building a Web site presence?

A)Mobile platform
B)Tablet platform
C)Traditional desktop platform
D)Facebook platform

Question 79

The Internet enables ________ marketing by leveraging the fact that there is always some demand, however small, for a product.

A)long-tail
B)behavioral
C)crowdsource
D)prediction

Question 80

Geoadvertising sends ads to users based on their:

A)GPS locations.
B)user addresses.
C)shopping preferences.
D)web site behaviors.