E-Com

Chapter 1

Company ABC sells a variety of products on its Web site to the highestbidder. What type of business model are they using?

Affiliate marketing

Online auction

Supply chain improver

Name your price

Note: The affiliate marketing model enlists other businesses to refer customers.

Company XYZ helps individuals sell products to other individuals and takes asmall commission on each sale. What EC classification do they fit?

B2C

B2B

C2C

P2P

Note: In a B2C model, XYZ would have to sell to individuals.

Which of the following is a virtual organization?

Two companies combine resources to market a new product. They hope to continue thisrelationship well into the future.

Two Internet companies merge to expand their product lines.

An Internet company allows half of its staff to begin working from home.

Two companies combine resources to market a new product. They know thisproduct can only be sold for the next 3 months.

Note: These companies are pursuing a specific goal, but it is not temporary.

Customization allows companies to:

Produce a large number of identical products.

Produce customized products for the public ("the masses").

Produce a large number of individualized products.

Understand the specific features the general public desires in order to create a successfulproduct.

Note : This is mass production.

Which of the following is not a limitation of EC?

Some customers like to physically inspect products before buying.

Customers now have nearly unlimited bandwidth.

The standards for security are still evolving.

Software tools change frequently.

Note: This limits EC because customers cannot touch items on a Web site.

Company XYZ sells products to individuals. What EC classification do they fit?

B2C

B2B

C2C

P2P

Note: In a B2C model, XYZ sells to individuals.

Which of the following is not an attribute of a corporate portal?

A company's partners use the portal to communicate.

The company's employees use this system to communicate.

The public uses this portal to access the Internet.

The public uses this portal to access information about the company.

Note: This is a feature of a corporate portal.

Which of the following is a limitation of EC?

Ability to operate 24 hours a day

Integration of distributor and supplier IT systems

Special network and hardware requirements

Increased market area

Note: This is a benefit of EC.

Which of the following is a benefit of EC?

Insufficient telecommunications bandwidth

Individuals can telecommute more easily

Customers may be unsure of EC security

EC theory and practice is constantly evolving

Note: This is a limitation of EC.

EC reduces cycle time in all of the following ways except:

Customer satisfaction.

Development of marketing materials.

Product distribution.

Time to market.

Note: EC is unable to reduce this cycle time.

Why is B2C generally less attractive than B2B?

Easier to implement

Less expensive to implement

Larger number of organizations

Channel conflict

Note: B2B is easier (on a small scale) to implement.

Company XYZ helps individuals exchange digital products. What ECclassification do they fit?

B2C

B2B

C2C

P2P

Note: In a B2C model, XYZ would sell to individuals.

Company ABC has several divisions that have created private resources thatcan be accessed using Internet protocols. The company is now going to linkthese resources together. What type of network is being described?

Internet

Extranet

Intranet

Virtual private network

Note: The Internet is public.

Company XYZ sells a variety of products on its Web site. What type ofbusiness model are they using?

Affiliate marketing

Online auction

E-tailing

Name your price

Note: The affiliate marketing model enlists other businesses to refer customers.

Association ABC helps its members get discounts on the purchases by buyingin bulk. What type of business model are they using?

Group purchasing

Online auction

Affiliate marketing

Name your price

Note: Group purchasing involves securing discounts based on the quantity of items purchased.

An extranet uses private data lines to connect several intranets.

True

False

Note: An extranet uses the Internet to connect several intranets.

A business using B2C business model trades with other businesses.

True

False

Note: B2C business have transactions with customers.

An e-marketplace does not have to be centered around a physical location.

True

False

Note: Their participants, not by their locations, define e-marketplaces.

A company that sells products directly to the end consumer is considered aB2C firm.

True

False

Note: Businesses that sell to consumers are defined as B2C. Businesses that sell to other businesses are defined asB2B.

Social networks connect people with specific interests.

True

False

Note: This is the definition of a social network.

An intranet is a private network that uses Internet protocols.

True

False

Note: Corporations and other groups use intranets.

E-business refers to selling goods and services.

True

False

Note: E-business also refers to customer service, collaboration, etc.

Affiliate marketing refers to using banner advertisements to bring customersto your site.

True

False

Note: Affiliate marketing uses other businesses to help sell products.

The membership business model gives members discounts when they makepurchases.

True

False

Note: This is the membership model.

EC is primarily an IT field, it is not interdisciplinary.

True

False

Note: EC is very interdisciplinary.

MySpace is an example of a B2B site.

True

False

Note: MySpace is an example of a social network.

A revenue model describes how a company will generate profits.

True

False

Note: This is the definition of a revenue model.

Lower prices on products is not a consumer benefit of EC.

True

False

Note: EC increases competition and creates lower prices for consumers.

A portal is an Internet gateway to a large variety of information and services.

True

False

Note: A portal is a quick way to access a variety of resources.

Lack of consumer confidence in EC security is a limitation of EC.

True

False

Note: Some customers do not feel secure with online ordering.

Chapter 2

Which of the following is not the function of a market?

Matching buyers and sellers

Facilitation of transactions

Ensuring profits of brokers

Provide institutional infrastructure

Note: Matching buyers and sellers is an important feature of a market. It is necessary before transactions can occur.

Which of the following is an intermediary?

Marketing firm that prepares advertising materials

Computer system that matches buyers with "Goods Wanted" to seller with"Goods for Sale"

Seller who makes products available online

UPS delivering the products to the customer

Note: This firm aids in the sale, but does not facilitate it.

Lowering a customer's search cost allows them to:

Research more items to find the best price.

Make correct purchasing decisions.

Apply the savings to the cost of the product.

Negotiate the best price.

Note: With a low or no search cost, customers can examine more options and vendors.

In what way does mobile computing not help organizations?

Improves productivity

Costs of hardware are increasing

Application selection is improving

Telecom support is growing

Note: This is one of the benefits.

Which of the following is not a disadvantage of paper catalogs?

Difficult to update

Limitation of number of products displayed

Large fixed cost

Portability

Note: This is a stated disadvantage.

What is NOT one of Porter's Five Forces?

Threat of Substitutes

Power of Suppliers

Rivalry of Competitors

Effects of EC Systems

Note: Threat of Substitutes is a part of Porter's model.

Why would a merchant want to customize products?

To charge a higher price

To decrease costs

It is required in EC

Customers will only accept customized products

Note: Custom products can be priced higher because they meet very specific needs.

A Web site offering content created by a third party transparently tocustomers is an example of:

Reintermediation.

Syndication.

Virtual manufacturing.

Build-to-order.

Note: Syndication is offering products and services, created by others, to customers.

Which is an example of reintermediation?

Using a salesperson to negotiate a large, complex agreement

Buying tickets directly from the airline

Purchasing insurance from the national company, not your local agent

Eliminating a broker and using EC instead

Note: This is an example of reintermediation.

Which of the following is not a limitation of traditional auctions?

Duration of sale

Time to examine products

Technical ability of buyers

Physical presence required

Note: This is a limitation of traditional auctions.

An item is offered with a minimum bid. The winner pays the exact price of hisbid. What type of auction is being described?

Reverse auction

Forward auction

Name-your-own-price auction

Double auction

Note: A forward auction is described.

The bidder details exactly what they are willing to pay. The Seller accepts orrejects the price. What type of auction is being described?

Forward auction

Name-your-own-price auction

Reverse auction

Double auction

Note: A name-your-own-price auction is described.

Which of the following is not a benefit of auctions to sellers?

Expanded customer base

Entertainment

Liquidation

Disintermediation

Note: This is a benefit to sellers.

What three factors facilitate online negotiations?

Bundling & customization

Voice over IP systems

Technology that facilitates the process

Intelligent agents

Note: This is one of the stated factors.

Which of the following is a limitation of auctions?

Market size

Diversity of offerings

Potential for fraud

Dynamic nature of sales

Note: This is a benefit of auctions.

The three functions of a market include: matching buyers and sellers,facilitating transactions and institutional infrastructure.

True

False

Note: These three functions are inherent in a market.

Marketspaces are defined by their physical locations.

True

False

Note: Marketplaces are defined by their locations.

In a marketspace, some goods can be digitized.

True

False

Note: Many goods are digital products and are sold in marketspaces.

The Internet ecosystem refers to animals and plants discussed online.

True

False

Note: The Internet ecosystem is the business model of the Internet economy.

When choosing between two identical goods, customers will always choosethe lowest price.

True

False

Note: Many other factors can come into play, including customer service.

Intermediaries help to decrease contracting risk in marketspaces.

True

False

Note: Because a seal of approval can be removed or because feedback can be posted, marketspaces help increasethe likelihood of fair dealing.

Ordering using EC benefits buyers, but not sellers.

True

False

Note: Sellers also benefit from increased accuracy and speed.

Electronic cash is not an important part of EC.

True

False

Note: Electronic cash offers a large benefit to EC because of its flexibility.

Mobile commerce refers to transactions made using wireless devices.

True

False

Note: This technology offers many applications and benefits.

An auction is characterized by the competitive nature by which the final priceis reached.

True

False

Note: This is the definition of an auction.

Bargaining power of suppliers is not one of Porter's five forces.

True

False

Note: Bargaining power of suppliers is one of Porter's five forces.

Rivalry among existing competitors is one of Porter's five forces.

True

False

Note: Rivalry among existing competitors is one of Porter's five forces.

Increasing self service is a benefit of EC.

True

False

Note: Self-service benefits both buyers and sellers.

Virtual manufacturing involves pretending you are creating something.

True

False

Note: Virtual manufacturing is the ability to run multiple plants as though they were at one location.

The time required for negotiation online is the same for all products becauseof the use of intelligent agents.

True

False

Note: Negotiation time will vary based on the type of goods and the parties involved.

Chapter 3

Jeff wants to purchase online, but is concerned about a company's privacypolicy. What online purchase decision aid should he use?

Shopbot

Trust verification site

Business rating site

Shopping portals

Note: Shopbots are tools that help individuals find products and prices.

Trust verification sites evaluate a business's trustworthiness. Howcomprehensive is this evaluation?

Complete, verification guarantees trustworthiness.

Moderate, generally verification indicates a trustworthy user.

Poor, verification is offered to all.

Poor, verification services only examine untrustworthy companies.

Note: No evaluation is complete, some TRUSTe sites have had major failings.

Which type of shopping software agent learns a user's preferences overtime?

Aggregator Portal

Real-time agent

Comparison shopping agent

Learning agent

Note: This is not the type of shopping software agent described.

Which of the following is an example of a general purpose pure-play e-tailer?

Store A does not have a physical location and sells a variety of products.

Store B does not have a physical location and sells a specific type of products.

Store C has a physical location and a Web site. A variety of products are sold.

Store D has a physical location. A variety of products are sold.

Note: This is an example of a general purpose pure-play e-tailer.

Which of the following is not a typical service provided by online travelagents?

Purchase and reserve tickets

Informational articles

True bargains on airfare cost

Currency conversion calculators

Note: This is a typical service.

Which of the following is not a change in the travel industry created by onlinetravel agents?

More personalized services

Increased convenience

Increased understanding of available products

Higher total trip cost due to lost services

Note: This has been the impact of online travel agents.

Which of the following is the most serious strategic threat to traditionaltravel agents?

Low prices

Intelligent software agents

Automated Services

24-hour service

Note: While this does hurt traditional agents, they still maintain an advantage in their knowledge and ability to helpcustomers.

Which of the following is not a driver in the electronic job market?

Size of labor market

Cost

Search time

Speed of communication

Note: This is not a driver in the electronic job market.

Which of the following is not one of the advantages of the electronic jobmarket for employees?

Speed of communication

Ability to search a large number of positions

Ability to asses your market value

Lack of Internet users

Note: This is an advantage of the electronic job market.

Which of the following is not a benefit of using the Internet to aid real estatetransactions?

View properties online, saves time

Sort properties by attributes to decrease number reviewed

Find detailed information about properties

Online services eliminate the need to visit houses

Note: This is a benefit of using EC in the real estate transaction process.

Which of the following companies does not trade stocks online?

Priceline.com

Schwab.com

E-Trade.com

Datek.com

Note: This company offers reverse auctions, but does not trade stocks online.

Which of the following is not a capability of home banking?

Print new checks online

Pay bills

Get current account balances

Transfer funds between accounts

Note: This feature is not yet available.

Which of the following is not an advantage of online banking?

Pay bills online

Access anytime

Personal interaction with staff

Obtain account histories

Note: This is an advantage of online banking.

What is the likely effect on intermediation of the following market events:aggregation, complex search requirements, and new markets?

Disintermediation

Cybermediation

Reintermediation

No effect

Note: This is not the likely effect on intermediation.

Content created by a publisher that must be read using a computer or similarhandheld device is an example of what type of digital publishing?

Edutainment

E-book

P2P publishing

Distance learning

Note: This is not the type of digital publishing described.

Digital goods are also referred to as hard goods.

True

False

Note: Digital goods are also referred to as soft goods.

Shopbots are tools that rate businesses based on multiple criteria.

True

False

Note: Business rating sites rate businesses based on multiple criteria.

Paying a yearly fee to access Salon.com's articles is an example of asubscription business model.

True

False

Note: This is an example of a subscription model.

A pure-play e-tailer dedicates the majority of their capital to online sales,with offline sales lagging behind.

True

False

Note: A pure-play e-tailer has no offline sales.

A niche e-tailer may be able to support an online effort that may not haveenough customers in any particular local market.

True

False

Note: A niche e-tailer can pull global customers to a very specific product offering.

Direct marketing attempts to bring customers into local stores.

True

False

Note: Direct marketing bypasses stores and sells direct to the end user.

On-demand delivery services usually rely on third party shipping agents (likeUPS).

True

False

Note: ODDS generally rely on their own vehicles.

Virtual travel agents offer only a small subset of the services provided by atraditional travel agent.

True

False

Note: Virtual travel agents provide almost all of the services provided by traditional travel agents.

Most online travel agents do not offer real travel bargains.

True

False

Note: Buyers will usually have to go to a special site to get true bargains.

Some Web sites allow buyers to purchase travel at a deep discount if it ispurchased at the last minute.

True

False

Note: Americanexpress.com is an example.

The electronic job market has increased the number of individuals whoadvertise their availability.

True

False

Note: The number of people listing their availability has increased.

Job seekers can both reply to ads and post their information on severalonline recruiting sites.

True

False

Note: This a common practice on sites like monster.com and hotjobs.com.

Online trading and investing in stocks is one of the fastest growing areas ofEC.

True

False

Note: This area is one of the fastest growing in EC.

Online banking is purely an expense for banks, it offers no advantage otherthan to retain current customers.

True

False

Note: Cyberbanking provides several advantages to banks including reducing costs (fewer branch locations) andfinding new customers (no longer limited by location).

Online publishing only seeks to digitize materials that have traditionally beenavailable in print.

True

False

Note: Online publishing is also concerned with using new types of media and creating media as it is requested.

Chapter 4

Which of the following is not an organizational buyer?

Student purchasing school supplies

Employee purchasing desks for the company

Computer reseller purchasing CD drives

Government employee purchasing red tape

Note: This is an example of an individual buyer.

Which of the following is not a part of the EC Consumer Behavior Model?

Independent variables

Intervening variables

Dependant variables

Decider variables

Note: This variable is a part of the model.

Which of the following is not an environmental variable in EC purchasing?

Cultural variables

Climate variables

Psychological variables

Social variables

Note: This is an environmental variable in EC purchasing.

What are the two most cited reasons for not purchasing online?

Security and price

Security and reputation

Security and quality assessment

Price and quality assessment

Note: A combined total of 50% of users cited security and quality assessment as reasons for not purchasing online.

Janice and Tony decided to buy the new computer system Paul suggestedafter careful analysis. Janice directed Rich, her assistant, to order thesystem. In this example, what purchasing role does Rich play?

Initiator

User

Buyer

Decider

Note: Paul is the initiator.

Janice and Tony decided to buy the new computer system Paul suggestedafter careful analysis. Janice directed Rich, her assistant, to order thesystem. In this example, what purchasing role does Janice play?

Initiator

User

Buyer

Decider

Note: Paul is the initiator.

A Web site asks users to fill out a questionnaire about themselves. The Website then personalizes to the user and makes recommendations. What type ofpersonalization is being used?

Content-based filtering

Rule-based filtering

Constraint-based filtering

Learning-agent technology

Note: This filter would use information on product preferences to personalize for the user.

Which of the following is the most popular online customer service tool?

FAQs

Chat rooms

E-mail

Call centers

Note: This is a helpful tool, but not the most popular.

Web mining hopes to accomplish all of the following except:

Discover previous unknown patterns.

Refine knowledge about known patterns.

Determine characteristics of specific users.

Predict trends and behavior

Note: This is a goal of web mining.

Mark is using an intelligent agent to help him determine which CD topurchase. What type of agent is he using?

Negotiation

Merchant brokering

Auction support

Product brokering

Note: Mark is not ready to purchase yet, so he cannot negotiate the price.

Julie is using an intelligent agent to help her find the best price on a CD shewould like to purchase. What type of agent is she using?

Negotiation

Merchant brokering

Auction support

Product brokering

Note: Julie is purchasing in a B2C environment, so she cannot negotiate the price.

What is not a benefit of an FAQ?

FAQs allow the customer to quickly find answers to questions.

The answers can change dynamically based on the questions.

The merchant is able to avoid questions by answering common ones up front.

The merchant is able to answer questions at a lower cost.

Note: This is a benefit of an FAQ.

Which of the following advertising methods involves the use of games?

Advergaming

Banner ads

Pop-ups

Classified ads

Note: This is the method described.

What is the proper order for the steps in market research?

Research Methodology, Problem Definition, Data Collection and Analysis, Results andRecommendation.

Problem Definition, Data Collection and Analysis, Research Methodology, Results andRecommendation

Research Methodology, Data Collection and Analysis, Problem Definition, Results andRecommendation

Problem Definition, Research Methodology, Data Collection and Analysis,Results and Recommendation

Note: The correct order is: Problem Definition, Research Methodology, Data Collection and Analysis, Results andRecommendation.

Which is not a characteristic of permission marketing?

Spamming

Sign-up

Incentives

Permission

Note: This is not a feature of permission marketing.

Individual buyers are more important than organizational buyers.

True

False

Note: Organizational buyers do the majority of purchasing online.

A consumer who purchases an item for a business can be described as anorganizational buyer.

True

False

Note: This is the definition of an organizational buyer.

Companies that sell to intermediaries do not care about the final customer'ssatisfaction.

True

False

Note: Many times these companies try to assist in the customer's satisfaction.

Someone being influenced by friends is an example of a social environmentvariable.

True

False

Note: The other variables include cultural and psychological variables.

The most cited reason for not purchasing online is price.

True

False

Note: Security is the most cited reason not to buy online. Price is generally an incentive.

The person who first suggests a purchase is the Initiator.

True

False

Note: The other roles include influencer, decider, buyer and user.

Customer loyalty is the most significant contributor to profitability.

True

False

Note: Customer loyalty helps companies grow their sales and profits.

Learning agent technology is a nonintrusive way to personalize web contentby watching a user's actions.

True

False

Note: This technology uses cookies or other methods to "learn" about the user's preferences.

Market segmentation increases the size of the group you are selling to.

True

False

Note: Market segmentation decreases group size by focusing on specifics.

Psychographic segmentation involves dividing customers based on wherethey live.

True

False

Note: Psychographic segmentation divides customers based on lifestyle factors.

Conducting research online is not always ideal, because the demographics ofInternet users are not the same as the general population.

True

False

Note: Web users are generally better educated and wealthier than the general population.

Intelligent agents are capable of more sophisticated tasks than searchengines.

True

False

Note: Intelligent agents can perform a wealth of functions beyond what a search engine is capable of.

Merchant brokering agents help users decide which product to purchase.

True

False

Note: Merchant brokering agents help users find appropriate merchants, not products.

Negotiation agents are most commonly used in a B2B setting.

True

False

Note: Since B2B settings (especially markets) generally support variable pricing, agents can work in this arena.

Online market research is generally less expensive than traditional marketresearch.

True

False

Note: Because information can be gathered quickly and without human intervention, online market research isgenerally less expensive.