E-Commerce: E-Commerce: Digital Markets, Digital Goods True-False Questions
1.
E-comm E-commerce erce refers refers to the the use use of of the the Int Intern ernet et and and the the We Web to transa transact ct bus busine iness. ss. Answer: True
2.
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Difficulty: Medium
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Difficulty: Medium
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,obile commer ,obile commerce ce is the use of wire wireles lesss de%ic de%ices es to to condu conduct ct e-com e-commer merce ce tran transac sactio tions ns from from any location. Answer: True
.
Difficulty: Medium
(n onl online ine sy syndicat ndicator or aggre aggregat gates es cont content ent or a""li a""licat cation ionss from from multi multi"le "le sou source rces* s* "acka "ackagin ging g them for distribution* and reselling them to third-"arty Web Web sites. Answer: True
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( banner banner ad o"en o"enss autom automati atical cally ly and and does does not disa"" disa""ear ear until until the the user user clicks clicks on it. it. Answer: False
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Difficulty: Medium
$isi $isint nter erme medi diat atio ion n "ro% "ro%id ides es ma& ma&or or ben benef efit itss to the the dist distri ribu buto tor. r. Answer: False
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%$Inform Informati ation on asy asymme mmetry try e!is e!ists ts when when one "arty "arty in in a tran transac sactio tion n has has more more infor informa matio tion n for for the the transaction than the other "arty. Answer: True
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Difficulty: Easy
The The Int Inter erne nett shr shrin inks ks info inform rmat atio ion n asy asymm mmet etry ry.. Answer: True
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%$Reta Retail il con consu sume merr e-com e-comme merce rce is is curre current ntly ly gro growi wing ng at at singl singlee-di digi gitt rate rates. s. Answer: False
3.
Difficulty: Easy
Difficulty: Easy
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Web sites sites can gathe gatherr bount bountifu ifull detai detailed led inform informati ation on abou aboutt custo custome merr beha%i beha%ior or and and demogra"hics. Answer: True
Difficulty: Easy
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1.
/logs ha%e had a significant im"act on "olitical affairs. Answer: True
11.
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Difficulty: Medium
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Difficulty: Easy
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Difficulty: Medium
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Difficulty: Medium
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$igital checks are less e!"ensi%e than credit cards. Answer: True
2.
Difficulty: ard
$igital cash can be used for micro"ayments or larger "urchases. Answer: True
1.
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(ccumulated balance digital "ayment systems allow consumers to make instant online "ayments to merchants and other indi%iduals based stored %alue in a digital account. Answer: False
1+.
Difficulty: Medium
o"histicated electronic commerce software has ca"abilities for "rocessing credit card "urchases on the Web. Answer: True
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(lthough Internet-enabled cell "hones are able to access the Web at anytime and from any"lace* the amount of information that they can actually handle at one time is %ery limited. Answer: True
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Difficulty: ard
,any third-"arty et market"laces "ro%ide %ertical markets for a single industry. Answer: True
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(utomobile manufacturing is an e!am"le of a %ertical market. Answer: True
1.
Difficulty: Easy
$irect goods are not directly in%ol%ed in the "roduction "rocess. Answer: False
13.
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0ne use of E$I is Web "ersonaliation. Answer: False
12.
Difficulty: Easy
Difficulty: Medium
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4eer-to-"eer "ayment systems are the "rinci"al "ayment systems for electronic commerce. Answer: False
Difficulty: ard
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Multi!le-Coice Questions 21.
One of the recent critical challenges facing Major League Baseball was: a. b. c. d.
poor coordination between local and national sales channels. poorly managed sales channels. outdated information systems. decreasing ticket sales.
Answer: d 22.
5reated a strategic ad%antage for ma&or league baseball Increased the efficiency of baseball o"erations trengthened the relationshi" with customers and su""liers ,ade it "ossible for ma&or league baseball to sur%i%e
Answer: c
Reerence pp 389–390
0nline ad%ertising sales Internet "ortals 0nline book sales Internet ser%ice "ro%iders
Answer:
a
Difficulty: ard
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%$ince the dot-com bubble burst of 21* e-commerce re%enues7 a. b. c. d.
ha%e essentially stagnated. show signs of stabiliing. ha%e returned to solid growth. ha%e returned to e!"onential growth.
Answer:
2#.
Difculty: Hard
Through what channel did e-commerce first e%ol%e6 a. b. c. d.
2.
Reerence p. 389
What was the most important impact of Major League Baseball’s Web site deelopment e!orts"
a. b. c. d.
23.
Difculty: Medium
c
Difficulty: Medium
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%$Which of the following is not a recent de%elo"ment in e-commerce6 a. b. c. d.
8rowth of wireless Internet connections 0nline* interacti%e models for news"a"ers and other traditional media 9se of blogs as a commercial medium E!"onential growth of e-commerce retail sales
Answer:
d
Difficulty: ard
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2'.
Which new de%elo"ment is hel"ing e!"and /2/ e-commerce o""ortunities6 a. b. c. d.
4odcasting /logs .ET and Web ser%ices $ro""ing of com"uting and networking com"onent "rices
Answer:
2).
c
Difficulty: ard
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/ased on your reading of the cha"ters* e-commerce is7 a. still in its beginning "hases. b. widely acce"ted by consumers* although technology is still :uickly changing. c. not yet fully acce"ted by consumers* although much of its dri%ing technology is firmly in "lace. d. well entrenched as a form of modern commerce. Answer:
2+.
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Information density Information asymmetry Richness Interacti%ity
Answer:
/
Difficulty: Medium
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The :uality of ubi:uity* as it relates to e-commerce* is illustrated by7 a. b. c. d.
the same set of standards being used across the globe. "lentiful* chea" information. the enabling of commerce worldwide. the a%ailability of Internet technology e%erywhere and anytime.
Answer:
3.
Difficulty: Medium
Which of the following is not one of the uni:ue features of e-commerce technology6 a. b. c. d.
2.
a
d
Difficulty: Medium
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The lowered costs of information storage* "rocessing* and communication* along with the im"ro%ement of data :uality has resulted in which uni:ue :uality of e-commerce6 a. b. c. d.
Information density Richness 5ustomiation Interacti%ity
Answer:
a
Difficulty: Medium
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31.
( market"lace e!tended beyond traditional boundaries and remo%ed from a tem"oral and geogra"hic location is called a;n<7 a. b. c. d.
the com"le!ity and content of a message. the total amount and :uantity of information deli%ered to consumers by merchants. the total amount and :uantity of information a%ailable to all market "artici"ants. the amount of information a%ailable to reduce "rice trans"arency.
Answer:
c
Difficulty: Easy
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elling the same goods to different targeted grou"s at different "rices is called7 a. b. c. d.
"rice discrimination. search costs. menu costs. trans"arency costs.
Answer:
3.
Difficulty: Medium
The effort re:uired to locate a suitable "roduct is called7 a. b. c. d.
33.
/
d
Difficulty: Easy
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Information ================== e!ists when one "arty in a transaction has more information that is im"ortant for the transaction than the other "arty. a. b. c. d.
trans"arency asymmetry symmetry imbalance
Answer:
/
Difficulty: Easy
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3'.
The cost to a merchant of changing the "rice of a "roduct is called a7 a. b. c. d.
"ricing cost. dynamic "ricing cost. menu cost. switching cost.
Answer:
3).
c
Difficulty: Easy
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Reducing the business "rocess layers in a distribution channel is called7 a. b. c. d.
Which of the following businesses utilies the content "ro%ider Internet business model6 a. b. c. d.
(maon.com e/ay.com 5.com ,otocross.com
Answer:
c
Difficulty: Medium
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Which of the following is an ad that o"ens automatically and does not disa""ear until the user clicks on it6 a. b. c. d.
/anner ad 5ontrolled ad 4ortal ad 4o"-u" ad
Answer:
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Information broker Transaction broker 0nline ser%ice "ro%ider >irtual storefront
Answer:
.
Difficulty: Medium
Which of the following Internet business models does (maon.com use6 a. b. c. d.
3.
c
d
Difficulty: Medium
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Internet content "ro%iders7 a. b. c. d.
generate from directing buyers to sellers. sa%e users money and time by "rocessing online sales dealings. "ro%ide a digital en%ironment where buyers and sellers can establish "rices for "roducts. create re%enue by "ro%iding digital content o%er the Web.
Answer:
d
Difficulty: Easy
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Transaction brokers7 a. b. c. d.
generate re%enue from ad%ertising or from directing buyers to sellers. sa%e users money and time by "rocessing online sales dealings. "ro%ide a digital en%ironment where buyers and sellers can establish "rices for "roducts. sell "hysical "roducts directly to consumers or indi%idual businesses.
Answer:
).
/
Difficulty: Easy
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Which of the fi%e moral dimensions does the Interacti%e ession on ,y"ace.com raise6 a. b. c. d.
Information rights and obligations @uality of life ystem :uality 4ro"erty rights and obligations
Answer:
/
Difficulty: ard
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( Asu"ersiteB that "ro%ides a com"rehensi%e entry "oint for a huge array of Internet resources and ser%ices is called a;n<7 a. b. c. d.
"ortal. online syndicator. content "ro%ider. information broker.
Answer:
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sa%e users money and time by "rocessing online sales dealings. "ro%ide a digital en%ironment where buyers and sellers can establish "rices for "roducts. create re%enue by "ro%iding digital content o%er the Web. sell "hysical "roducts directly to consumers or indi%idual businesses.
Answer:
.
Difficulty: Easy
0nline market"laces7 a. b. c. d.
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a
Difficulty: Medium
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4ure-"lay business models7 a. b. c. d.
are "rimarily used in business-to-business electronic commerce. do not sell a "hysical "roduct. are e!tensions of traditional bricks-and-mortar businesses. did not ha%e an earlier e!isting bricks-and-mortar business before they went to the Internet.
Answer:
d
Difficulty: Easy
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#1.
e/ay is an e!am"le of7 a. b. c. d.
a click-and-mortar business. 525 electronic commerce. /25 electronic commerce. an online e!change.
Answer:
#2.
d
Difficulty: Easy
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5onsumers selling goods and ser%ices electronically to other consumers best describes7 a. b. c. d.
The "resentation of Web "ages tailored to a customer* based on the gathering of demogra"hic information "ro%ided by the customer* is called7 a. b. c. d.
Dow-cost leadershi" 4roduct differentiation Cocus on market niche trengthen customer and su""lier intimacy
Answer:
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Difficulty: Easy
Crom your reading of the te!t* which general strategy to o%ercome market forces is an o%erarching focus for tonyfield Carm6 a. b. c. d.
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c
c
Difficulty: Medium
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E$I is7 a. b. c. d.
the use of Internet technologies for electronic data transactions. the e!change between two organiations of standard transactions through a network. electronic data in%oicing. electronic deli%ery infrastructure.
Answer:
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Difficulty: Medium
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'1.
The "rocess of sourcing goods and materials* negotiating with su""liers* "aying for goods* and making deli%ery arrangements is called7 a. b. c. d.
====================== are more transaction oriented than "ri%ate industrial networks. a. b. c. d.
4ri%ate e!changes E-hubs E!tranets (ll of the abo%e
Answer:
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Difficulty: Easy
(n e!tranet that links a large firm to its su""liers and other key business "artners is called a;n<7 a. b. c. d.
'3.
a
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Difficulty: ard
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et market"laces7 a. focus on continuous business "rocess coordination between com"anies for su""ly chain management. b. o"erate as inde"endent intermediaries between buyers and sellers. c. are geared towards short-term s"ot "urchasing. d. are more relationshi" oriented and less transaction oriented than "ri%ate industrial networks. Answer:
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/
Difficulty: Medium
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( third-"arty et market"lace that connects many buyers and su""liers for s"ot "urchasing is called a;n<7 a. b. c. d.
The electronic "ayment system that uses a credit card-sie "lastic card that stores digital information and that can be used for electronic "ayments in "lace of cash is called7 a. b. c. d.
digital cash. e-cash. digital wallet. smart card.
Answer:
d
Difficulty: Easy
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/ased on your reading of the case study te!t* which of the four generic strategies to deal with com"etiti%e forces was the moti%ating factor behind e/ay?s ac:uisition of Fot"ot and Gaboodle6 a.
Dow-cost leadershi"
b. c. d.
4roduct differentiation Cocus on market niche trengthen customer and su""lier intimacy
Answer:
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smart card accumulated balance digital stored %alue digital cash
Answer:
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Difficulty: Medium
The electronic "ayment system in which users make micro"ayments and "urchases on the Web* accumulating a debit balance on their credit card or tele"hone bill is called a;n< ======= "ayment system. a. b. c. d.
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c
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Difficulty: ard
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/ased on your reading of the te!t* how do wireless marketing strategies differ from AtraditionalB Internet marketing strategies6 a. b. c. d.
Cocus is on bringing message related to the customer?s "oint of need or locale. 5ontent-rich messaging 8reater "ersonaliation 4ushing Web sites to customers
Answer:
a
Difficulty: Medium
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Fill 1n te 2lanks )1.
Menu costs are the merchants? costs of changing "rices. Difficulty: ard
)2.
(;n< virtual storefront sells "hysical "roducts directly to consumers or indi%idual businesses. Difficulty: Medium
)3.
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Peer-to-peer "ayment systems allow "eo"le to send money to %endors or indi%iduals who are not set u" to acce"t credit card "ayments. Difficulty: Medium
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Stored value "ayment systems enable a consumer to make instant online "ayments to merchants and other indi%iduals based on %alue stored in the digital account. Difficulty: Medium
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(;n< micropayment is a "ayment for a %ery small sum of money* often less than H1. Difficulty: Medium
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(;n< digital wallet stores credit card and owner identification information and "ro%ides these data automatically during electronic commerce "urchase transactions. Difficulty: Medium
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Exchanges are a third-"arty et market"lace "rimarily transaction oriented and that connect many buyers and su""liers for s"ot "urchasing. Difficulty: Medium
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(;n< portal "ro%ides the initial "oint of entry to the Web along with s"ecialied content and other ser%ices. Difficulty: Easy
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(;n< virtual community "ro%ides an online meeting "lace where "eo"le with similar interests can communicate and find useful information. Difficulty: Medium
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(;n< digital checking system e!tends the functionality of e!isting checking accounts so they can be used for online sho""ing "ayments. Difficulty: Medium
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Essay Questions +1.
Descri/e ow e-commerce affects careers in te four ma3or /usiness functions" 4ic function do you tink is most affected currently5
If your career is in finance and accounting* you will be working with systems for recei%ing "ayments electronically o%er the Internet and for deli%ering new online financial ser%ices based on the Web. If your career is in human resources* you will be using online &ob-hunting sites to attract new em"loyees. If your career is in manufacturing* "roduction or o"erations management* you will be using the Internet for sourcing* and using "ublic /2/ commerce systems and "ri%ate industrial networks for "rocurement and management of your su""ly chain. If your career is in sales and marketing* you will be using the Web to "ro%ide digital "roducts and ser%ices* and to sell and "romote "roducts by using "ersonaliation* customiation* and community marketing techni:ues.
I think the function most affected currently by e-commerce is manufacturing and "roduction* as a com"any?s su""ly chain can affect )#J of its total o"erating budget. The efficiency and better decision making afforded by e-commerce can make significant changes in a com"any?s su""ly chain and* therefore* "rofits. Difficulty: ard
+2.
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67nowledge increases e8!onentially,6 is a !rase wit wic we are all familiar" ow does tis conce!t a!!ly to electronic /usiness and te emergence of te digital firm5 9u!!ort your contentions"
tudent answers will %ary7 0ne answer might be7 The e!"onential increases of knowledge refer to shared information. Cor e!am"le* once the conce"t of a wheel is established* inheritors of that knowledge do not ha%e to Arein%ent the wheel.B The Internet is a tool similar to the wheel7 it is based on shared standards and uni%ersal tools. The Internet and shared networking technologies are allowing new techni:ues for attracting customers and selling customers to be de%elo"ed and ada"ted %ery :uickly. Cor e!am"le* although early Internet retailers had difficulty setting u" secure credit card transactions and "ayment systems* today there are many systems in "lace as %endors ste" in to create shared tools for doing this. The Internet is fostering shared knowledge and as such "ro"agating e%er greater increases in that knowledge. Difficulty: ard
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+3.
4at are transaction costs5 ist and descri/e at least four ways tat te 1nternet can reduce transaction costs"
Transaction costs are the costs in "artici"ating in a market and "urchasing goods and ser%ices that a business cannot make itself. /ecause of its s"eed and the a%ailability of information* the Internet makes it "ossible to reduce the time e!"enditure in such transactions as answering the customer :uestions* trading shares of stock* correcting an em"loyee record* "rocessing customer orders* making ad%ertising information a%ailable* or "aying a bill. /ecause time and effort is reduced* transaction costs are reduced. Difficulty: ard
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ist and descri/e at least fi;e different 1nternet /usiness models" 4ic of tese models do you tink is te most risky for a dot-com /usiness5 9u!!ort your answer"
The eight models are7 %irtual storefront* information broker* transaction broker* online market"lace* content "ro%ider* online ser%ice "ro%ider* %irtual community* and "ortal. The choice of riskiest model will de"end on the indi%idual student. Difficulty: Medium
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Web "ersonaliation is the art of gathering enough information about %isitors to your Web site that you can "resent that site to returning %isitors* ho"efully new customers* by name and by interest area. 5ustomer-centered retailing allows a com"any to tailor "roducts indi%idually to many customers at the same time. In Internet terms* this is referred to as Amass customiation.B In the "ast* because it could not know each of its customers indi%idually* a com"any had to create a "roduct aimed at a broad %ariety of needs and ho"e that the needs of enough customers could be met with that "roduct to create a "rofit. 5ustomers* on the other hand* had to choose among "roducts that already e!isted* or "ay an increased "rice for a "roduct tailored indi%idually to them. The Internet* by making it "ossible for com"anies and their customers to interact indi%idually* has changed this e:uation. 5om"anies can now use the ca"acities of the Internet to "ro%ide ongoing information* ser%ice* and su""ort to indi%iduals* which will create "ositi%e interactions with customers that can ser%e as the foundations for long-term relationshi"s and re"eat "urchases. Difficulty: ard
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ist and descri/e at least tree ways in wic te indi;idual consumer may !ay for !urcases on te 1nternet"
The "rinci"al electronic "ayment systems for electronic commerce for the indi%idual are credit card* digital wallet* accumulated balance digital "ayment systems* stored %alue systems* digital cash* "eer-to-"eer "ayment systems* and electronic checks. ,ost consumers use their credit card. Difficulty: Medium
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ist and descri/e te tree ma3or ty!es of electronic commerce" 4ic do you tink is ultimately te most ;alua/le to te indi;idual consumer5 9u!!ort your answer"
/usiness-to-consumer* business-to-business* and consumer-to-consumer. (ll three are %aluable to the consumer* but in the long run* business-to-business may be the most %aluable to the indi%idual consumer because it will reduce "rices and increase both goods and ser%ices. ;0ther o"inions* of course* are su""ortable.< Difficulty: Medium
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4at metods could a !ortal use to generate re;enue5 4ic do you tink migt /e most successful, and wy5
(d%ertising* subscri"tions* selling collected marketing information* and directing buyers to sellers could all generate re%enue. I would think the most successful method would be through collecting marketing information* because as a "ortal that links to large amounts of e!ternal information and attracts re"eat customers* the "ortal would ha%e the o""ortunity to gather a lot of information about each user. Difficulty: Medium
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>ou are consulting for ucky?s, a cain of gas stations" 4at ty!es of e-commerce o!!ortunities, if any, are rele;ant to ucky?s5 Could ucky?s make use of any 1nternet /usiness models for tis o!!ortunity5
In terms of /2/ e-commerce* Ducky?s might be able to "rocure goods o%er the Internet* use a "ri%ate industrial network to coordinate their su""ly chain with su""liers and manage in%entory. $e"ending on the structure of the gasoline retail business* industry net market"laces and e!changes might be of use. In terms of /25 e-commerce* there are not many o""ortunities* as it is inefficient to sell gasoline o%er the Internet. Kowe%er* a mobile "ayment system* similar to ,obil?s "eed4ass "ayment system* is a way of offering more con%enient ser%ices to customers. (dditionally* Ducky?s could make sure that it?s stations are listed in "o"ular location-based mobile ser%ices that hel" dri%ers find nearby gas stations. Difficulty: ard
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>ou a;e /een ired as a marketing consultant /y a law firm in os Angeles tat s!eciali=es in 3u;enile 3ustice" 4at ways can you use te 1nternet as a marketing tool and to ad;ertise te firm?s ser;ices5
Cor market research* you could ad%ertise on search engines. Lou could "ay for marketing research at rele%ant "ortals. Lou could also collect customer information from the com"any?s Web site. Lou could monitor rele%ant blogs to see what issues are of concern in &u%enile &ustice* so as to address these concerns in your ad%ertising cam"aigns. To ad%ertise* you could ad%ertise on search engine results and at rele%ant "ortals or legal information content "ro%iders* using banner ad or "o"u" ads. If it were feasible* you could create a &u%enile &ustice "ortal and blog for the com"any in order to attract users whom you could gather market research as well as "romote your ser%ices. Difficulty: ard
