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

Question 1

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
E) global reach

Answer 1

A

Question 2

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
E) information density

Answer 2

D

Question 3

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.
E) declining as users lose interest.

Answer 3

A

Question 4

Reducing the business process layers in a distribution channel is called

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

Question 5

What is the primary benefit to consumers of disintermediation?

A) faster service
B) lower costs
C) higher quality
D) greater choices
E) None, disintermediation primarily benefits manufacturers.

Question 6

What standards are referred to when discussing universal standards as a unique feature of e-commerce?

A) Internet technology standards
B) common spoken and written languages
C) universal measuring standards
D) universal advertising and media format standards
E) EDI standards

Question 7

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
E) social technology

Question 8

Compared to digital markets, traditional markets have

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

Question 9

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) net marketplace.

Question 10

Digital goods are goods that are

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

Question 11

The effort required to locate a suitable product is called

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

Question 12

What event marked the beginning of e-commerce?

A) The first product sold online.
B) The first domain name registered.
C) The first e-mail sent.
D) The first paid advertisements placed on a Web site.
E) The first product advertised online.

Question 13

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

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

Question 14

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) amount of physical storage space needed to store data about a specific entity, such as a product or consumer.

Question 15

Recent developments in e-commerce include all of the following except

A) small businesses continue to flood the e-commerce marketplace.
B) social networking sites become a new platform for e-commerce.
C) Internet-based models of computing, such as smartphone apps.
D) the online demographic of shoppers broadens to match that of ordinary shoppers.
E) social sharing e-commerce sites extend the market creator business model.

Question 16

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 17

Compared to traditional goods, digital goods have

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

Question 18

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) customized

Question 19

All of the following are unique features of e-commerce technology, except

A) personalization/customization.
B) interactivity.
C) universality.
D) richness.
E) global reach.

Question 20

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.
E) less disintermediation.

Question 21

E-commerce refers simply to the use of the Internet and the Web to transact business.

Question 22

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

Question 23

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

Question 24

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 25

Information asymmetry exists when there is more information about one product than there is about a similar product.

Question 26

Switching costs are the merchants' costs of changing prices.

Question 27

________ uses the community provider Internet business model.

A) iTunes
B) Yahoo
C) eBay
D) Google
E) Twitter

Question 28

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) generate revenue from advertising or from directing buyers to sellers.

Question 29

"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 30

The Internet shrinks information asymmetry.

Question 31

eBay is an example of

A) C2C e-commerce.
B) B2B e-commerce.
C) B2C e-commerce.
D) M-commerce.
E) P2P-commerce.

Question 32

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

Question 33

Disintermediation provides major benefits to the distributor.

Question 34

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
E) portal

Question 35

Traditional online marketing, such as display ads, is still the majority of all online marketing.

Question 36

________ refers to businesses selling goods and services electronically to individuals.

A) B2C e-commerce
B) Social e-commerce
C) C2C e-commerce
D) Disintermediation
E) M-commerce

Question 37

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

Question 38

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

A) vontent provider
B) portal
C) market creator
D) e-tailer
E) transaction brokder

Question 39

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

Question 40

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) provide online meeting places where people with similar interests can communicate.

Question 41

Web personalization is used primarily as a major marketing tool.

Question 42

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.
E) crowdsourcing.

Question 43

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 44

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) social shopping.
E) crowdsourcing.

Question 45

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

Question 46

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.
E) Netflix charges customers a monthly fee for access to its library of movies.

Question 47

Which of the following marketing formats is sales oriented, rather than branding oriented or a mix?

A) lead generation
B) search engine
C) rich media
D) display ads
E) video

Question 48

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) affiliate revenue

Question 49

An example of the market creator business model is eBay, a C2C auction site.

Question 50

In the affiliate revenue model, firms derive revenue by selling information or services through partner e-commerce sites.

Question 51

An example of the portal business model is Facebook.

Question 52

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 53

________ 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
E) Social search

Question 54

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
E) newsfeed

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

In the ________ revenue models, a firm offers some services for free but charges a subscription fee for premium services.

A) free/freemium
B) subscription
C) transaction fee
D) affiliate
E) sales

Question 58

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.
E) Netflix charges customers a monthly fee for access to its library of movies.

Question 59

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) all of the relationships in an online community

Question 60

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.
E) Netflix charges customers a monthly fee for access to its library of movies.

Question 61

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

Question 62

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.
E) private industrial network.

Question 63

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

Question 64

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.
E) products.

Question 65

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

Question 66

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) e-mail ads
E) display ads

Question 67

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

Question 68

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
E) lead generation

Question 69

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.
E) slowly becoming the norm for B2B communications.

Question 70

All of the following are activities related to establishing a Web presence except for

A) search.
B) affiliates.
C) apps.
D) newsletters.
E) display.

Question 71

Rich media advertisements are a sales-oriented marketing format.

Question 72

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

Question 73

You have been hired as a marketing consultant by a law firm in Los Angeles that specializes in juvenile justice. What ways can you use the Internet as a marketing tool and to advertise the firm's services?

Question 74

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.
E) production.

Question 75

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.
E) typically consist of a large firm linking to its suppliers and partners.

Question 76

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.
E) net marketplace.

Question 77

What is the difference between personalization and customization, as applied to e-commerce technologies?

A) Customization is any type of adjustment made to a product by the user; personalization refers to a business changing a product or service for the user.
B) Personalization is any type of adjustment made to a product by the user; customization refers to a business changing a product or service for the user.
C) Customization refers to adjusting marketing messages for a consumer; personalization refers to adjusting a product or service based on a user's preferences.
D) Personalization refers to adjusting marketing messages for a consumer; customization refers to adjusting a product or service based on a user's preferences.
E) There is no difference, both terms refer to changing a product or communication for the consumer.

Question 78

Web site tracking software can log the path a customer took through the Web site, 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 79

________ 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
E) A private exchange

Question 80

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

A) In 2014, m-commerce represented about 19 percent of all e-commerce.
B) M-commerce is the fastest growing form of e-commerce.
C) In 2014, mobile advertising is up over 80% from the previous year.
D) Fifty-five percent of online retailers have m-commerce Web sites.
E) In 2014, the main areas of growth are in online banking and location-based services.