Testbank Chapter 3 7.Edition With Answer

Electronic Commerce 2012 7E Test Bank Chapter 3

Electronic Commerce 2012, 7e (Turban)

Chapter 3 Retailing In Electronic Commerce: Products and Services

3.1 True/False

1) Amazon is recognized as an online leader in creating sales through customer

intimacy and customer relationship management (CRM).

Answer: TRUE

Diff: 1 Page Ref: 100

2) According to Internet Retailer, in 2009, approximately 20 percent of adult U.S.

Internet users shopped online and/or research offline sales online.

Answer: FALSE


3) Sales of goods on the Internet are no longer increasing rapidly because of the

bankruptcy of numerous dot-coms.

Answer: FALSE


4) As the number of Internet users reaches saturation, the challenge for e-retailers

now is to increase the amount that shoppers spend online.

Answer: TRUE


5) E-tailing is retailing conducted online over the Internet.

Answer: TRUE


6) A retailer is a sales intermediary, a seller that operates between manufacturers

and customers.

Answer: TRUE


7) When new capabilities are required to conduct EC, for example capabilities in

logistics and distribution, one method is to obtain them through external strategic

alliances.

Answer: TRUE


8) With all else being equal in the online environment, goods that are relatively

expensive or frequently purchased are expected to have higher sales volumes than

goods that are inexpensive or infrequently purchased.

Answer: FALSE


9) A business model is a description of how an organization intends to generate

revenue through its business operations.

Answer: TRUE


10) Direct marketing describes marketing that takes place over the Internet involving

wholesalers and retailers.

Answer: FALSE


11) Click-and-mortar retailers are brick-and-mortar retailers that offer a transactional

Web site from which to conduct business.

Answer: TRUE


12) Target, Sears, and Macys are click-and-mortar businesses selling in a

multichannel business model.

Answer: TRUE


13) Types of online malls include referring directories and event shopping malls.

Answer: FALSE


14) Viral marketing, market makers, and information portals are types of B2C

business models.

Answer: TRUE


15) Event-based commerce is a wireless based technology in which vendors send

advertisements relevant to the location where customers are at a given time.

Answer: FALSE


16) Private shopping clubs and group gifting online are two variations of the

personalized event shopping model.

Answer: TRUE


17) Competition among online travel e-tailers is fierce, with low margins, little

customer loyalty, and increasing commoditization of products and services.

Answer: TRUE


18) WAYN is a social networking Web site with a goal of uniting college student

travelers from North America.

Answer: FALSE


19) When compared to the traditional job market, the online job market has low

reliability.

Answer: FALSE


20) The electronic job market creates high turnover costs for employers by facilitating

employees’ movement to better jobs.

Answer: TRUE


21) Assessing their market value is an advantage of the electronic job market for

employers.

Answer: FALSE


22) Many insurance companies use a dual strategy, keeping human agents but also

selling online.

Answer: TRUE


23) The major risk of online trading is security.

Answer: TRUE


24) Virtual banks have a brick-and-mortar location and also conduct online

transactions.

Answer: FALSE


25) Online banking and other financial services are growing slowly on the Internet

because many customers are not yet embracing it.

Answer: FALSE


26) Electronic banking refers to the various banking activities conducted from home

or the road using an Internet connection.

Answer: TRUE


27) Only a few pure-play virtual banks failed by 2003 due to lack of financial viability.

Answer: FALSE


28) Both online banks and click-and-mortar banks carry some risks and problems,

especially in international banking, including hackers and liquidity risk.

Answer: TRUE


29) An on-demand delivery service is express delivery made fairly quickly after an

online order is received.

Answer: TRUE


30) The direct sale of digital content through digital download allows a producer of

digital content to bypass the traditional retail channel, thereby reducing overall costs

and capturing greater profits.

Answer: TRUE


31) As a paid content category, dating services are the largest attractor of Internet

users.

Answer: FALSE


32) Electronic coughing describes the attention-grabbing behavior of agencies that

go out to consumer environments and boast about how great a brand or item is in

order to spread the word.

Answer: FALSE


33) An electronic pouch is a program that expedites online shopping by containing a

shopper’s information.

Answer: FALSE


34) Channel conflict occurs when the addition of an online distribution channel

causes problems with existing distribution channels.

Answer: TRUE


35) A major problem in B2C is the increasing rate of online fraud.

Answer: TRUE


3.2 Multiple Choice

1) Amazon.com experienced each of the following except

A) maintaining its position as the number one B2C money-making EC site in the

world.

B) driving growth largely by product diversification and its international presence.

C) declaring its first profit in 2005.

D) patenting its 1-click feature which allows customers to place an order in a secure

manner without having to enter personal, billing, and shipping information each time

they shop.

Answer: C

Diff: 3 Page Ref: 100-101

2) According to Internet Retailer (2009), approximately ________ percent of adult

U.S. Internet users shop online or research offline sales online.

A) 25

B) 60

C) 65

D) 85

Answer: B


AACSB: Use of information technology

3) Each of the following describes retailing except

A) a retailer is a sales intermediary.

B) many manufacturers sell directly to consumers and through wholesalers and

retailers.

C) e-tailing makes it easier for a manufacturer to sell directly to customers by cutting

out the intermediary.

D) companies that produce a large number of products, such as Procter & Gamble,

do not need retailers for efficient distribution.

Answer: D



4) Retailers who sell over the Internet are

A) e-tailers.

B) disintermediaries.

C) marketing managers.

D) multichannel marketers.

Answer: A


5) Each of the following sells well on the Internet except

A) tobacco.

B) travel.

C) cars.

D) health and beauty.

Answer: A



6) With all else being equal in the online environment, goods with any of the following

product characteristics are expected to facilitate greater online sales except

A) relatively expensive items.

B) high brand recognition.

C) digitized format.

D) frequently purchased items.

Answer: A



7) Which of the following is a characteristic of e-tailing?

A) Competition is local.

B) Customer relations are less stable due to anonymous contacts.

C) Price changes are expensive, but can be done at anytime.

D) Fewer resources are needed to increase customer loyalty.

Answer: B



8) Major advantages of e-commerce to buyers include

A) finding products and services that are not available in local stores.

B) buying in groups.

C) shopping globally.

D) all of the above.

Answer: D


9) Major advantages of e-commerce to sellers include each of the following except

A) charging less for items.

B) lower supply chain costs.

C) reacting quickly to customer’s needs.

D) competing with larger companies.

Answer: A


10) A method of doing business by which a company generates revenue to sustain

itself and achieve its goals best describes

A) strategic plan.

B) mission statement.

C) business model.

D) marketing plan.

Answer: C


11) The B2C business model used by QVC, Sharper Image, and Lands’ End is

A) direct marketing by mail-order companies.

B) direct sales by manufacturers.

C) pure-play e-tailers.

D) click-and-mortar retailers.

Answer: A


12) Based on distribution channel used, which of the following is not a B2C model

classification?

A) pure-play e-tailers

B) click-and-mortar retailers

C) Internet malls

D) online medical diagnostic center

Answer: D


13) Based on distribution channel used, Dell’s B2C business model can be classified

as a

A) direct marketing by mail-order company.

B) pure-play e-tailer.

C) click-and-mortar retailer.

D) direct sales by manufacturer.

Answer: D



14) A business model where a company sells in multiple marketing channels

simultaneously best defines

A) multichannel business model.

B) concurrent business model.

C) direct marketing.

D) revenue enhancement.

Answer: A


15) Marketing done online between any seller and buyer best defines

A) personalization.

B) direct marketing.

C) target marketing.

D) multichannel marketing.

Answer: B


16) The competitive advantages of a “pull” vehicle distribution process include each

of the following except

A) improved customer satisfaction and better pricing.

B) large cost savings in finished vehicle inventory carrying costs.

C) better cash flow to the manufacturers.

D) creating a build-to-stock environment.

Answer: D


17) Firms that sell directly to consumers over the Internet without maintaining a

physical sales channel describes

A) click-and-mortar stores.

B) viral marketers.

C) virtual e-tailers.

D) social network.

Answer: C


18) Sears’ marketing strategy is best described as a

A) brick-and-mortar strategy.

B) shared service mall strategy.

C) click-and-mortar strategy.

D) direct marketing from a manufacturer strategy.

Answer: C



19) An online seller of travel services that generates revenue by charging fees for its

services is an example of a

A) market maker.

B) transaction broker.

C) content disseminator.

D) viral marketer.

Answer: B



20) A marketer that uses e-mail to advertise to potential customers is called a

A) market maker.



D) viral marketer.

Answer: D



21) A company that creates and manages many-to-many markets is called a

A) market maker.



D) viral marketer.

Answer: A



22) In an e-market, PayPal serves as a(n)

A) intermediary.

B) service provider.


D) viral marketer.

Answer: B



23) A B2C model in which sales are done to meet the needs of special events

describes

A) anniversary shopping.

B) time-based shopping.

C) event shopping.

D) choreographed shopping.

Answer: C


24) Which of the following is not a social shopping model?

A) personalized event shopping

B) location-based e-commerce

C) private shopping clubs

D) private auctions

Answer: D


25) A members-only shopping club, where members can buy goods at large

discounts describes

A) specialty club.

B) membership-based club.

C) exclusive club.

D) private shopping club.

Answer: D


26) Delivery of e-commerce transactions to individuals in a specific location, at a

specific time defines

A) location-based commerce.

B) event-driven commerce.

C) mobile computing.

D) service on demand.

Answer: A


27) Each of the following is a revenue model for online independent travel

agents except

A) contract negotiators.

B) direct revenues from commissions.

C) subscription or membership fees.

D) revenue sharing fees.

Answer: A



28) Each of the following is a characteristic of WAYN except

A) it is a popular social networking Web site.

B) when it introduced fees for its premier travel membership service, it lost most of its

new subscriptions.

C) it is not aimed at any particular age group.

D) it enables its users to create a personal profile and upload and store photos.

Answer: B



29) Limitations of online travel services include

A) limited amount of free information.

B) substantial discounts.

C) the difficulty of using virtual travel agents can be very large.

D) increases in provider’s commission and its processing.

Answer: C


30) Compared to the traditional job market, the online job market

A) has a shorter life cycle.

B) is usually specialized and local in scope.

C) tends to be less reliable.

D) tends to be much less expensive.

Answer: D



31) Advantages of the electronic job market for job seekers include

A) accessing newsgroups that are dedicated to finding jobs.

B) reducing application-processing costs by using electronic application forms.

C) conducting interviews online.

D) viewing salary surveys for recruiting strategies.

Answer: A


32) Which of the following is not a characteristic of e-banking?

A) saves users time and money

B) is more expensive for banks

C) is becoming an enabling feature of business growth in the developing world

D) is increasing peer-to-peer (P2P) online lending

Answer: B



33) Types of online banking applications include each of the following except

A) informational.

B) administrative.

C) directional.

D) portal.

Answer: C


34) The portal online banking application provides

A) general bank information and history.

B) account transfer capabilities.

C) online brokerage services.

D) links to local business.

Answer: D


35) Security for online bank transactions includes each of the following except

A) firewalls.

B) SSL encryption.

C) virtual biometrics.

D) digital certificates.

Answer: C



36) Gateways to storefronts and e-malls are

A) shopping portals.

B) shopbots.

C) shopping browsers.

D) intelligent search engines.

Answer: A



37) Software tools that scout the Web on behalf of consumers who specify search

criteria are

A) shopping portals.

B) shopbots.

C) shopping browsers.

D) intelligent search engines.

Answer: B



38) The TRUSTe seal is an example of a(n)

A) business rating.

B) intermediary.

C) B2B exchange.

D) trustmark.

Answer: D



39) Charles wants to buy a John Lennon lithograph over the Internet, but he is

unwilling to pay for it until he inspects it to ascertain authenticity. The auction site

through which he purchases the painting agrees to hold his money until he tells them

to release it to the seller. This is an example of a(n)

A) escrow service.

B) trustmark.

C) warranty.

D) verification.

Answer: A



40) The effect upon sales of consumers receiving a referral or recommendation from

other consumers defines

A) location-based economy.

B) referral economy.

C) regional economy.

D) viral marketing.

Answer: B


41) A search engine whose mission is to help people find local qualified services

ranging from mechanics to restaurants to hairstylists describes

A) Freddy’s List.

B) Pricescan.com.

C) Yelp.

D) Local.com.

Answer: C


42) The removal of organizations or business process layers responsible for certain

intermediary steps in a given supply chain describes

A) reintermediation.

B) extraction.

C) relocation.

D) disintermediation.

Answer: D


43) The process whereby intermediaries take on new intermediary roles defines

A) reintermediation.

B) seller reassignment.

C) relocation.

D) disintermediation.

Answer: A


44) The situation in which an online marketing channel upsets the traditional

channels due to real or perceived damage from competition defines

A) disintermediation.

B) channel conflict.

C) distributor reassignment.

D) partner disassociation.

Answer: B


45) A traditional brick-and-mortar store with a mature website that uses a successful

click-and-mortar strategy is able to

A) give customers the opportunity to perform various functions interactively at any

time.

B) link all of its back-end systems to create an integrated customer experience.

C) leverage its marketing channels by offering the advantages of each marketing

channel to customers from all channels.

D) do all of the above.

Answer: D


3.3 Essay

1) Identify five major advantages of e-tailing to sellers.

Answer: Major advantages of e-tailing to sellers include lower product cost and

increasing competitive advantage; reaching more customers; changing price and

catalogs quickly; lower supply chain costs; and competing with larger companies.

Additional advantages are listed on page 106.


2) Based on the distribution channel used, identify five categories of e-tailing

business models. For each category, provide an example.

Answer: Direct marketing by mail-order company, direct sales by manufacturer,

pure-play e-tailer, click-and-mortar retailer, and retailing in online malls are five

categories. QVC is an example of a direct marketing by mail-order company. Dell is

an example of a direct sales by manufacturer. Amazon.com is a pure-play e-tailer.

Target is an example of a click-and-mortar retailer, and bing.com/shopping is an

example of an online mall retailer.


3) What are virtual (pure play) e-tailers? Give an example. List one advantage and

one disadvantage of this business model.

Answer: Virtual (pure-play) e-tailers are firms that sell directly to consumers over the

Internet without maintaining a physical sales channel. Amazon.com is a prime

example of this type of e-tailer. Virtual e-tailers have the advantage of low overhead

costs and streamlined processes. One disadvantage is a lack of established

infrastructure or back office to support the online front-office activities.


4) Why are trust verification sites important to e-tailers and other online sellers? List

two verification sites. What is their function?

Answer: With so many sellers online, many consumers are not sure whom they can

trust. Several companies evaluate and verify the trustworthiness of various e-tailers.

One such company is TRUSTe. The TRUSTe seal appears at the bottom of each

TRUSTe-approved e-tailer’s Web site. E-tailers pay TRUSTe for use of the seal or

trustmark. Two trust verification sites are VeriSign and BBBOnline. TRUSTe’s

members hope that consumers will see the seal as an assurance of their ethical

conduct, privacy policy, and personal information protection.


5) Identify five social shopping models.

Answer: Personalized event shopping, private shopping clubs, group gifting online,

location-based commerce, and shopping in virtual worlds are five social shopping

models. Personalized event shopping is a B2C model in which sales are done to

meet the needs of special events. A private shopping club is a members-only

shopping club, where members can buy goods at large discounts. Online group

gifting enables individuals to share in the cost of a gift. Location-based commerce

delivers e-commerce transactions to individuals in a specific location, at a specific

time. Shopping in virtual worlds allows individuals to purchase virtual products or real

products for use.


Testbank Chapter 3 7.Edition With Answer

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