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

Question 1

Which of the following dimensions of e-commerce technology involves engaging consumers in a dialog that dynamically adjusts the experience to the individual?

A) Ubiquity
B) Personalization/customization
C) Richness
D) Interactivity
E) Information density

Answer 1

D

Question 2

All of the following are increased in traditional markets compared to digital markets except:

A) search costs.
B) menu costs.
C) switching costs.
D) network effects.
E) information asymmetry.

Answer 2

D

Question 3

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

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

Answer 3

C

Question 4

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

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

Question 5

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
E) Personalization

Question 6

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.
E) ease with which consumers can find out the variety of prices in a market.

Question 7

Compared to traditional goods, digital goods have:

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

Question 8

Disintermediation has which of the following effects?

A) It reduces the ties between consumers and businesses.
B) It lowers costs to the consumer.
C) It increases costs of manufacturing.
D) It reduces the cost of advertising.
E) It has no impact.

Question 9

Which of the following dimensions of e-commerce technology involves the integration of video, audio, and text marketing messages into a single marketing message and consumer experience?

A) Ubiquity
B) Personalization/customization
C) Richness
D) Interactivity
E) Information density

Question 10

Compared to digital markets, traditional markets have:

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

Question 11

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
E) optimization

Question 12

In 2015, what percentage of mobile phone users accessed the Internet by using their phones?

A) About 10 percent
B) About 33 percent
C) About 50 percent
D) About 75 percent
E) About 90 percent

Question 13

The effort required to locate a suitable product is called:

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

Question 14

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.
E) price optimization.

Question 15

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
E) Universal standards

Question 16

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.
E) private industrial network.

Question 17

All of the following are examples of "on demand" companies except:

A) Uber.
B) Airbnb.
C) Lyft.
D) Instacart.
E) Yummly.

Question 18

When did e-commerce begin?

A) 1965
B) 1983
C) 1995
D) 1999
E) 2000

Question 19

Which of the following is the best description of ubiquity as it relates to e-commerce technology?

A) E-commerce technology employs the same set of standards across the globe.
B) E-commerce technology permits commercial transactions to cross cultural and national boundaries.
C) E-commerce technology allows personalized messages to be delivered to individuals as well as to groups.
D) E-commerce technology is available everywhere and anytime.
E) E-commerce technology reduces information costs.

Question 20

Which of the following dimensions of e-commerce technology has the potential to raise the quality of information?

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

Question 21

Compared to traditional goods, digital goods have:

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

Question 22

Which of the following is an example of the content provider Internet business model?

A) ETrade
B) eBay
C) iTunes
D) Facebook
E) Dropbox

Question 23

Menu costs are the merchants' costs of changing prices.

Question 24

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

Question 25

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

Question 26

Craigslist is an example of:

A) C2C e-commerce.
B) B2B e-commerce.
C) B2C e-commerce.
D) M-commerce.
E) B2G e-commerce.

Question 27

Describe the use of personalization and customization in e-commerce. What business value do these techniques have?

Question 28

Which of the following types of e-commerce involves consumers selling goods and services to other consumers?

A) B2B e-commerce
B) C2C e-commerce
C) M-commerce
D) B2C e-commerce
E) B2G e-commerce

Question 29

About 75 percent of all U.S. households have broadband access to the Internet in 2015.

Question 30

What is dynamic pricing and how is it used in e-commerce?

Question 31

"Knowledge increases exponentially" is a phrase with which we are all familiar. How does this concept apply to electronic business and the emergence of the digital firm? Support your contentions.

Question 32

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 33

What are digital goods and how does the Internet impact the market for digital goods?

Question 34

Which of the following Internet business models does Amazon use?

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

Question 35

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

Question 36

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

Question 37

Which of the following types of e-commerce involves selling products and services directly to individual consumers via the Internet?

A) B2B e-commerce
B) G2B e-commerce
C) M-commerce
D) B2C e-commerce
E) B2G e-commerce

Question 38

Disintermediation provides major benefits to the distributor.

Question 39

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

Question 40

The Internet shrinks information asymmetry.

Question 41

What methods could a portal use to generate revenue? Which do you think might be most successful, and why?

Question 42

Blue Nile is an example of the content provider business model.

Question 43

Which of the following Internet business models involves creating 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
E) E-tailer

Question 44

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) Yelp receives a fee after steering a customer to a participating website where he or she makes a purchase.
C) Photobucket provides basic services for free, but charges a premium for advanced services.
D) Apple accepts micropayments for single music track downloads.
E) Pandora provides free service with limited play and advertising.

Question 45

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
E) freemium

Question 46

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.
E) provide an online meeting place where people with similar interests can communicate.

Question 47

List and describe the three main categories of electronic commerce. Which do you think is ultimately the most valuable to the individual consumer? Support your answer.

Question 48

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

A) Subscription
B) Advertising
C) Transaction fee
D) Sales
E) Affiliate

Question 49

Photobucket is an example of the service provider business model.

Question 50

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) Yelp receives a fee after steering a customer to a participating website where he or she makes a purchase.
C) Photobucket provides basic services for free, but charges a premium for advanced services.
D) Apple accepts micropayments for single music track downloads.
E) Pandora provides free service with limited play and advertising.

Question 51

Netflix uses which of the following revenue models?

A) Advertising
B) Transaction fee
C) Subscription
D) Freemium
E) Affiliate

Question 52

List and describe at least five different Internet business models. Which of these models do you think would be the most risky for a startup business today? Support your answer.

Question 53

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

Question 54

Uber uses a form of dynamic pricing.

Question 55

You are consulting for Lucky's, a chain of gas stations. What types of e-commerce opportunities, if any, are relevant to Lucky's? Could Lucky's make use of any Internet business models for this opportunity?

Question 56

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

Question 57

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) Yelp receives a fee after steering a customer to a participating website where he or she makes a purchase.
C) Photobucket provides basic services for free, but charges a premium for advanced services.
D) Apple accepts micropayments for single music track downloads.
E) Pandora provides free service with limited play and advertising.

Question 58

Which of the following companies uses the market creator business model?

A) Expedia
B) ETrade
C) Facebook
D) Yahoo
E) eBay

Question 59

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.
E) create revenue by providing digital content.

Question 60

Which of the following best illustrates the advertising revenue model?

A) eBay receives a small fee from a seller if a seller is successful in selling an item.
B) Yelp receives a fee after steering a customer to a participating website where he or she makes a purchase.
C) Photobucket provides basic services for free, but charges a premium for advanced services.
D) Apple accepts micropayments for single music track downloads.
E) Pandora provides free service with limited play and advertising.

Question 61

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
E) A map of your 10 closest friends

Question 62

What is the most profound way in which e-commerce and the Internet has changed the relationship between companies and their customers? Support your answer.

Question 63

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.
E) social sign-on.

Question 64

Rich media advertisements are a sales-oriented marketing format.

Question 65

Which of the following is the fastest growing format of online advertising?

A) Search engine ads
B) Video ads
C) Rich media ads
D) Classified ads
E) Email

Question 66

A secure website 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.
E) Net marketplace.

Question 67

Net marketplaces typically provide all of the following except:

A) catalogs.
B) automated purchasing.
C) processing and fulfillment.
D) sourcing.
E) shared product design and development.

Question 68

Which of the following statements about B2B e-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 are expected to grow to over $8 trillion by 2019.
E) B2B e-commerce accounts for more revenue than B2C e-commerce.

Question 69

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

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

Question 70

List and describe the top five methods of online marketing and advertising formats in terms of 2014 revenue?

Question 71

Facebook's Like button is an example of which of the following?

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

Question 72

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

Question 73

________ attempts to leverage the fact that there is always some demand, however small, for a product.

A) Long tail marketing
B) Behavioral targeting
C) Crowdsourcing
D) Predictive marketing
E) Profiling

Question 74

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

Question 75

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

A) social media.
B) SCM.
C) procurement.
D) sourcing.
E) EDI.

Question 76

Which of the following statements about EDI is not true?

A) Each major industry in the United States has EDI standards.
B) Today, EDI is only used for document automation.
C) Many organizations still use private networks for EDI.
D) EDI systems are increasingly web-enabled.
E) About 80 percent of online B2B e-commerce is still based on EDI.

Question 77

Web personalization is used primarily as a marketing tool.

Question 78

Which of the following statements about Net marketplaces is not true?

A) Some Net marketplaces sell direct goods.
B) Some Net marketplaces serve vertical markets.
C) Some Net marketplaces sell indirect good.
D) Some Net marketplaces support contractual purchases based on long-term relationships.
E) Some Net marketplaces are owned by a single firm and used to link solely to the firm's suppliers and key business partners.

Question 79

Website tracking software can log the path a customer takes through the website, the time spent on the site, and what geographic area, in general, the customer is from, all of which can help in customer analysis. It can also log the customer's operating system and which browser the customer is using. How could these last two data items be of interest to a company? Give examples.

Question 80

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