Chapter 10

Compared to traditional goods, digital goods incur
less disintermediation.
equivalent copying costs.
higher marginal costs per unit.
similar inventory costs.
lower distribution costs.
lower distribution costs.
Rich media advertisements are a sales-oriented marketing format.
True
False
False
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?
service provider
portal
transaction broker
market creator
community provider
community provider
Disintermediation provides major benefits to the distributor.
True
False
False
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?
information density
customization
global reach
interactivity
richness
information density
The integration of video, audio, and text marketing messages into a single marketing message and consumer experience describes which dimension of e-commerce technology?
personalization/customization
social technology
ubiquity
richness
interactivity
richness
Netflix’s public announcement of a reward for a technology solution to its movie recommendation system is an example of
behavioral targeting.
crowdsourcing.
social shopping.
long-tail marketing.
prediction markets.
crowdsourcing.
What event marked the beginning of e-commerce?
The first product sold online.
The first paid advertisements placed on a Web site.
The first e-mail sent.
The first domain name registered.
The first product advertised online.
The first paid advertisements placed on a Web site.
Which of the following marketing formats is sales oriented, rather than branding oriented or a mix?
lead generation
search engine
rich media
video
display ads
search engine
Compared to traditional goods, digital goods have
lower menu costs.
greater pricing flexibility.
higher inventory costs.
higher production costs.
lower marketing costs.
greater pricing flexibility.
Which of the following is not one of four types of presence to be considered when building an E-commerce presence?
offline media
corporate
social media
Web sites
e-mail
corporate
Exposing an individual to ads that are chosen and based on the recorded and analyzed online behavior of the individual is referred to as
long tail marketing.
crowdsourcing.
behavioral targeting.
online profiling.
clickstream advertising.
behavioral targeting.
The Internet enables ________ marketing, by leveraging the fact that there is always some demand, however small, for a product.
behavioral
long-tail
lead generation
crowdsource
prediction
long-tail
Podcasting allows subscribers to listen to live, streaming radio and other audio content.
True
False
False
________ describes the concept that a large group of people is better at making good decisions than a single person.
Outsourcing
Social graphing
Social search
Crowdsourcing
The wisdom of crowds
The wisdom of crowds
Which of the following Internet business models does Amazon.com use?
transaction brokder
e-tailer
market creator
portal
vontent provider
e-tailer
Exchanges have become one of the most popular types of Net marketplace because they encourage competitive bidding that drives prices down.
True
False
False
A secure Web site that links a large firm to its suppliers and other key business partners is called a(n)
e-hub.
net marketplace.
marketspace.
exchange.
private industrial network.
private industrial network.
In general, for digital goods, the marginal cost of producing another unit is about zero.
True
False
True
In the affiliate revenue model, firms derive revenue by selling information or services through partner e-commerce sites.
True
False
False
Varying a product’s price according to the supply situation of the seller is called ________ pricing.
asymmetric
flexible
menu
dynamic
customized
dynamic
Web personalization is used primarily as a major marketing tool.
True
False
True
Based on your reading of the chapter, e-commerce is
still in a revolutionary phase.
widely accepted by consumers, although technology is still quickly changing.
well entrenched as a form of modern commerce.
declining as users lose interest.
not yet fully accepted by consumers, although much of its driving technology is firmly in place.
still in a revolutionary phase.
In the ________ revenue models, a firm offers some services for free but charges a subscription fee for premium services.
sales
subscription
free/freemium
transaction fee
affiliate
free/freemium
Which of the following best illustrates the sales revenue model?
eBay receives a small fee from a seller if a seller is successful in selling an item.
Netflix charges customers a monthly fee for access to its library of movies.
Apple accepts micropayments for single music track downloads.
Flickr provides basic services for free, but charges a premium for advanced services.
Epinions receives a fee after steering a customer to a participating Web site where he or she makes a purchase.
Apple accepts micropayments for single music track downloads.
Information ________ exists when one party in a transaction has more information that is important for the transaction than the other party.
transparency
asymmetry
complexity
discrimination
asymmetry
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.
geoinformation
geosocial
geomapping
geolocating
geoadvertising
geoinformation
Which of the following is a milestone for the Web site development phase of building an e-commerce presence?
Web presence map
functional Web site
Web site plan
Web mission statement
social media plan
Web site plan
eBay is an example of
B2B e-commerce.
M-commerce.
C2C e-commerce.
P2P-commerce.
B2C e-commerce.
C2C e-commerce.
An example of the market creator business model is eBay, a C2C auction site.
True
False
True
Information asymmetry exists when there is more information about one product than there is about a similar product.
True
False
False
Which of the following best describes the digital social graph?

all of the relationships in an online community
a mapping of all online social relationships
a person’s direct and indirect relationships
all of a person’s closest digital relationships
all of the online and offline relationships a person has

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a mapping of all online social relationships
Viral marketing is like traditional word-of-mouth marketing except that it is spread via online communities.
True
False
True
Advertising networks track a user’s behavior at thousands of Web sites.
True
False
True
E-commerce refers simply to the use of the Internet and the Web to transact business.
True
False
True
Information density refers to the
total amount and quantity of information delivered to consumers by merchants.
richness complexity and content of a message.
total amount and quantity of information available to all market participants.
amount of information available to reduce price transparency.
amount of physical storage space needed to store data about a specific entity, such as a product or consumer.
total amount and quantity of information available to all market participants.
What is the primary benefit to consumers of disintermediation?
higher quality
greater choices
faster service
lower costs
None, disintermediation primarily benefits manufacturers.
lower costs
The process of sourcing goods and materials, negotiating with suppliers, paying for goods, and making delivery arrangements is called
production.
SCM.
e-procurement.
sourcing.
procurement.
procurement.
Which of the following is a marketing format that uses banner ads and pop-ups with interactive features?
video ads
search engine ads
rich media ads
e-mail ads
display ads
display ads
Digital goods are goods that are
created with software.
sold over digital networks.
used with digital equipment.
delivered digitally.
produced digitally.
delivered digitally.
The act of engaging consumers in a dialog that dynamically adjusts the experience to the individual describes which dimension of e-commerce technology?
richness
ubiquity
information density
interactivity
personalization/customization
interactivity
The Internet shrinks information asymmetry.
True
False
True
The behavioral targeting of ads results in consumers responding ten times more frequently than when delivered ads randomly.
True
False
True
EDI standards that take advantage of network communications have yet to be fully implemented at the industry level.
True
False
False
________ refers to businesses selling goods and services electronically to individuals.
B2C e-commerce
M-commerce
Disintermediation
C2C e-commerce
Social e-commerce
B2C e-commerce
In planning a robust e-commerce presence, you will want to consider the blog platform as part of your ________ presence.
e-mail
community
social media
offline media
Web site
social media
EDI is
the use of Internet technologies for electronic data transactions.
electronic data invoicing.
slowly becoming the norm for B2B communications.
the exchange between two organizations of standard transactions through a network.
electronic delivery infrastructure.
the exchange between two organizations of standard transactions through a network.
Switching costs are the merchants’ costs of changing prices.
True
False
False
Traditional online marketing, such as display ads, is still the majority of all online marketing.
True
False
True
An example of the portal business model is Facebook.
True
False
False
A third-party Net marketplace that connects many buyers and suppliers for spot purchasing is called a(n)
private exchange.
vertical market.
private industrial network.
e-hub.
exchange.
exchange.
Compared to digital markets, traditional markets have
lower search costs.
reduced asymmetry.
higher delayed gratification effects.
higher transaction costs.
stronger network effects.
higher transaction costs.
Indirect goods are not involved firsthand in the production process.
True
False
True
Reducing the business process layers in a distribution channel is called
disintermediation.
market transparency.
market segmentation.
BPR.
network effects.
disintermediation.
Which of the following statements about m-commerce is not true?

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

In 2014, the main areas of growth are in online banking and location-based services.
Price transparency refers to the ability of consumers to discover what merchants actually pay for products.
True
False
False
The effort required to locate a suitable product is called
search costs.
shopping costs.
location costs.
menu costs.
price discrimination.
search costs.
Geoadvertising sends ads to users based on their
shopping preferences.
home addresses.
GPS locations.
Google Maps settings.
web site behaviors.
GPS locations.
Which of the following best illustrates the transaction fee revenue model?

Apple accepts micropayments for single music track downloads.
Netflix charges customers a monthly fee for access to its library of movies.
Flickr provides basic services for free, but charges a premium for advanced services.
Epinions receives a fee after steering a customer to a participating Web site where he or she makes a purchase.
eBay receives a small fee from a seller if a seller is successful in selling an item.

eBay receives a small fee from a seller if a seller is successful in selling an item.
Net marketplaces may either support contractual purchasing based on long-term relationships with designated suppliers or short-term spot purchasing.
True
False
True
Recent developments in e-commerce include all of the following except
Internet-based models of computing, such as smartphone apps.
social networking sites become a new platform for e-commerce.
social sharing e-commerce sites extend the market creator business model.
the online demographic of shoppers broadens to match that of ordinary shoppers.
small businesses continue to flood the e-commerce marketplace.
Internet-based models of computing, such as smartphone apps.
Goods that are involved in the actual production process are referred to as
purchasing goods.
products.
raw materials.
direct goods.
indirect goods.
direct goods.
All of the following are activities related to establishing a Web presence except for
affiliates.
display.
newsletters.
apps.
search.
newsletters.
Intellectual property refers to all forms of human expression, both tangible and intangible.
True
False
False
Content providers use ________ systems to process large amounts of very small monetary transactions cost-effectively.
mobile payment
affiliate revenue
transaction fee
micropayment
subscription
micropayment
________ is a peer-to-peer market in which participants bet on the outcomes of current events, business, or social trends.
A net marketplace
A futures auction
A private exchange
Crowdsourcing
A prediction market
A prediction market
What standards are referred to when discussing universal standards as a unique feature of e-commerce?
universal advertising and media format standards
common spoken and written languages
universal measuring standards
Internet technology standards
EDI standards
common spoken and written languages
A marketplace extended beyond traditional boundaries and removed from a temporal and geographic location is called a(n)
marketspace.
net marketplace.
e-hub.
exchange.
online marketplace.
marketspace.
Which of the following best illustrates the affiliate revenue model?

Apple accepts micropayments for single music track downloads.
Flickr provides basic services for free, but charges a premium for advanced services.
Epinions receives a fee after steering a customer to a participating Web site where he or she makes a purchase.
eBay receives a small fee from a seller if a seller is successful in selling an item.
Netflix charges customers a monthly fee for access to its library of movies.

Epinions receives a fee after steering a customer to a participating Web site where he or she makes a purchase.
Selling the same goods to different targeted groups at different prices is called
price gouging.
cost customization.
price discrimination.
cost personalization.
cost optimization.
price discrimination.
Market creators

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

provide a digital environment where buyers and sellers can establish prices for products.
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?
newsfeed
network notification
social search
collaborative shopping
social sign-on
network notification
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.
True
False
True
Behavioral targeting occurs at two levels: individual Web sites and through ISPs.
True
False
False
Transaction brokers

sell physical products directly to consumers or individual businesses.
save users money and time by processing online sales transactions.
provide online meeting places where people with similar interests can communicate.
generate revenue from advertising or from directing buyers to sellers.
provide a digital environment where buyers and sellers can establish prices for products.

save users money and time by processing online sales transactions.
Net marketplaces

are more relationship oriented than private industrial networks.
are industry owned or operate as independent intermediaries between buyers and sellers.
are geared towards short-term spot purchasing.
focus on continuous business process coordination between companies for supply chain management.
typically consist of a large firm linking to its suppliers and partners.

are industry owned or operate as independent intermediaries between buyers and sellers.
________ uses the community provider Internet business model.
eBay
Yahoo
Google
iTunes
Twitter
Twitter
All of the following are unique features of e-commerce technology, except
global reach.
personalization/customization.
universality.
richness.
interactivity.
universality.
Retail consumer e-commerce is growing at single-digit rates.
True
False
False
What is the difference between personalization and customization, as applied to e-commerce technologies?

Personalization refers to adjusting marketing messages for a consumer; customization refers to adjusting a product or service based on a user’s preferences.

Customization refers to adjusting marketing messages for a consumer; personalization refers to adjusting a product or service based on a user’s preferences.

There is no difference, both terms refer to changing a product or communication for the consumer.

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.

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.

Personalization refers to adjusting marketing messages for a consumer; customization refers to adjusting a product or service based on a user’s preferences.