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

Question 1

Automobile manufacturing is an example of a vertical market.

Answer 1

True

Question 2

Which of the following events signified the beginning of e-commerce?

A) the first online advertisements
B) the first telephone sales
C) the first online retail store
D) the first web site

Answer 2

A

Question 3

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

Answer 3

False

Question 4

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

Question 5

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

Question 6

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

Question 7

In the technique of product customization, merchants customize marketing messages to specific individuals by adjusting the message for the person's name and interests.

Question 8

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

Question 9

Retail e-commerce has grown consistently at double-digit rates since 1995.

Question 10

The goal of behavioral targeting is to increase the size of the audience to whom the advertiser can market a product.

Question 11

An example of the content provider business model is Salon.com, an online magazine.

Question 12

In general, the cost of hardware, software, and telecommunications for building and operating a Web site has fallen by over 50 percent since 2000.

Question 13

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

Question 14

The Internet shrinks information asymmetry.

Question 15

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

Question 16

Information asymmetry exists when one party in a transaction has more information for the transaction than the other party.

Question 17

Amazon.com uses Web personalization as a major marketing tool.

Question 18

An example of the service provider business model is Netflix, an online video store and streaming media outlet.

Question 19

Disintermediation provides major benefits to the distributor.

Question 20

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

Question 21

Compared to traditional goods, digital goods have

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

Question 22

The effort required to locate a suitable product is called

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

Question 23

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 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

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 27

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 28

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 29

Reducing the business process layers in a distribution channel is called

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

Question 30

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 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

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 33

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 34

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 35

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 36

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 37

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 38

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 39

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

A) an online auction house
B) an online newspaper
C) a video-sharing site
D) an online bookseller

Question 40

Because of outsourcing and increased automation, the costs of system maintenance and content creation have fallen and typically make up less than a quarter of Web site budgets.

Question 41

In a phenomenon called ________, some argue that large numbers of people can make better decisions about a wide range of topics or products than a single person or even a small committee of experts.

A) the wisdom of crowds
B) outsourcing
C) crowdsourcing
D) social networking

Question 42

Which of the following was the leading marketing format in 2010?

A) display ads
B) e-mail
C) classifieds
D) search engine

Question 43

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 44

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 45

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 or buy and sell goods?

A) community provider
B) service provider
C) market creator
D) transaction broker

Question 46

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 47

Which of the following describes long-tail marketing?

A) The unexpected growth of sales of a product long after its initial release.
B) The yearly sales of one or two copies each of thousands of obscure films.
C) The dwindling sales of a once-popular book.
D) The continued successful sales of a product over years.

Question 48

EBay is an example of

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

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

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 51

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

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

Question 52

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 53

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 54

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 55

Your company provides online tax preparation software. Users can download forms and read tips online without paying, but a fee is charged for using the advanced tax form management services. This is an example of which type of revenue model?

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

Question 56

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 57

Compared to traditional markets, digital markets have

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

Question 58

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 three-quarters of the overall B2B marketplace.
C) B2B e-commerce only includes commercial transactions between firms.
D) B2B e-commerce revenues in 2009 were over $3 trillion.

Question 59

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

A) In 2010, m-commerce represented less than 10 percent of all e-commerce.
B) M-commerce is the fastest growing form of e-commerce.
C) M-commerce applications are especially popular in Europe, Japan, and South Korea.
D) In 2010, the top-grossing category of m-commerce was e-book sales.

Question 60

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 61

In Web server ________, a firm purchases or leases a Web server but locates the server in a vendor's physical facility.

Question 62

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

Question 63

Which of the following is not one of the categories of services that are popular for m-commerce?

A) location-based services
B) financial services
C) games and entertainment
D) retail shopping

Question 64

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 65

A(n) ________ is another term for a private industrial network.

Question 66

E-hubs are more ________ than private industrial networks.

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

Question 67

In the United States, m-commerce

A) has become widely adopted.
B) is still in its infancy.
C) now represents a major fraction of total e-commerce transactions.
D) is growing slowly.

Question 68

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 69

The system functionalities of an e-commerce site are best described as the

A) general capabilities wanted.
B) information systems capabilities wanted.
C) information elements needed.
D) software and hardware required.

Question 70

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

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

Question 71

Before building an e-commerce site, business objectives and system functionalities must be translated into a set of precise information ________.

Question 72

________ goods, such as office supplies, are those not involved firsthand in the production process.

Question 73

An extranet 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 74

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 75

The costs that a consumer spends in making a purchase, such as traveling to a store, are called ________ costs.

Question 76

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

Question 77

You are planning the requirements for a site tracking and reporting system for your company Web site. Which of the following information requirements would not be essential for this function?

A) number of unique visitors
B) pages visited
C) products purchased
D) secure credit card clearing

Question 78

An online arena in which participants bet on specific outcomes of popular events, such as elections or designs for a new product, is called a(n) ________.

Question 79

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

Question 80

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