MIS Chapter 10

Global reach

Rather than only catering to the consumers in the local area, businesses now can cross cultural and national boundaries conveniently and cost effectively.

Universal standards

The technical standards of the Internet is universal enabling anyone to link with any other computer regardless of what technological platform they are using. Therefore, the technical standards of E-commerce is also universal.

Customization

changing the delivered product or service based on a user's preferences or prior behavior.

E commerce

digitally enabled commercial transactions between and among organizations and individuals.

Social marketing

listening, discussing, interacting, empathizing, and engaging.

Personalization

targeting market messages to specific individuals by adjusting the message to a person's clickstream behavior, name, interests, and past purchases.

Cost transparency

the ability of consumers to discover the actual costs merchants pay for the products.

Richness

the complexity and content of a message.

Market entry costs

the cost merchants pay simply to bring their goods to market.

Transaction costs

the costs of participating in the market.

Commercial transactions

the exchange of value across organizations or individual boundaries in return for products and services.

B2B e commerce

use of the Internet for business to business commerce and collaboration among business partners.

Information asymmetry

when one party in a transaction has more information that is important for the transaction than the other party.

false

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

false

20) 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.

Online advertising sales

21) Through what channel did e-commerce first evolve? A) online advertising sales B) Internet portals C) online book sales D) Internet service providers

sales of financial services

22) Which of the following is not one of the current main areas of growth in mobile e-commerce? A) sales of financial services B) retail sales at the top mobile companies C) sales of digital content D) sales of apps

Technology players such as Yahoo! seek to dominate online advertising and expand into offline ad brokerage.

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.

total amount and quantity of information available to all market participants.

33) 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.

FALSE

4) Eighty-five percent of online retailers now have m-commerce Web sites.

B2C e-commerce

43) 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.

e-tailer

46) Which of the following Internet business models does Amazon.com use? A) content provider B) portal C) market creator D) e-tailer

graph

63) A mapping of a person's significant online, personal relationships is called a social A) Web. B) graph. C) community. D) map.

Personalization

Merchants can target different marketing strategies to different markets based on their behavior. They can also use the consumer's preferences to change the delivered product or service.

False

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

False

10) Amazon's recommender system is an example of the network notification feature of social e-commerce.

false

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

true

13) Ninety-six percent of all U.S. households with Internet access use a broadband connection.

false

14) Behavioral targeting occurs at two levels: individual Web sites and through ISPs.

false

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

true

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

false

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

true

18) Automobile manufacturing is an example of a vertical market.

true

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

False

2) Consumer e-commerce is still growing at approximately 25% annually.

Foursquare

23) Which of the following is an example of a geosocial mobile service? A) Kickstarter.com B) Foursquare C) Shopkick D) Facebook

the availability of the Internet everywhere and anytime.

25) 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.

The music recording industry is disrupted as music creation and distribution become decentralized.

26) Which of the following is not a recent development in e-commerce? A) Mobile e-commerce takes off. 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.

transparency

27) 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

universal standards

28) Which feature of Internet technology has had the most effect in the Internet's rapid spread across the globe? A) ubiquity B) global reach C) universal standards D) social technology

interactivity

29) 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

True

3) The Internet shrinks information asymmetry.

richness

30) 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

information density

31) 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

search costs

32) The effort required to locate a suitable product is called A) price discrimination. B) search costs. C) menu costs. D) shopping costs.

price discrimination

34) 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.

asymmetry

35) 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

dynamic

36) Varying a product's price according to the supply situation of the seller is called ________ pricing. A) menu B) flexible C) dynamic D) asymmetric

disintermediation

37) Reducing the business process layers in a distribution channel is called A) disintermediation. B) BPR. C) market segmentation. D) network effects.

higher transaction costs.

39) Compared to digital markets, traditional markets have A) lower search costs. B) stronger network effects. C) higher delayed gratification effects. D) higher transaction costs.

greater pricing flexibility

40) Compared to traditional goods, digital goods have A) greater pricing flexibility. B) lower marketing costs. C) higher production costs. D) higher inventory costs.

lower distributed delivery costs

41) 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.

C2C e-commerce

42) eBay is an example of A) C2C e-commerce. B) B2B e-commerce. C) B2C e-commerce. D) M-commerce.

C2C e-commerce

44) Consumers selling goods and services electronically to other consumers best describes A) disintermediation. B) C2C e-commerce. C) M-commerce. D) B2C e-commerce.

CNN.com

45) Which of the following businesses utilizes the content provider Internet business model? A) Amazon.com B) eBay.com C) CNN.com D) Motocross.com

save users money and time by processing online sales transactions

47) 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.

provide a digital environment where buyers and sellers can establish prices for products.

48) 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.

The products bought online by one individual will influence purchases by others.

49) Which of the following best describes why small world theory is important to e-commerce? A) The products bought online by one individual will influence purchases by others. B) The greater the number of people using your product, the more valuable it becomes. C) You do not need to attract a large consumer base to become profitable. D) Global products create a global community.

True

5) 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.

Apple accepts micropayments for single music track downloads.

50) 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.

subscription

51) 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

Epinions receives a fee after steering a customer to a. participating Web site where he or she makes a purchase.

52) 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.

eBay receives a small fee from a seller if a seller is successful in selling an item.

53) 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.

The wisdom of crowds

54) ________ describes the concept that a large group of people is better at making correct decisions than a single person. A) The wisdom of crowds B) Outsourcing C) Crowdsourcing D) Social graphing

crowdsourcing

55) 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.

behavioral targeting

56) 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.

search engine

57) Which of the following was the leading online advertising format in 2012? A) display ads B) e-mail C) classifieds D) search engine

B2B e-commerce represents approximately three-quarters of the overall B2B marketplace.

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 2012 were over $4 trillion.

the exchange between two organizations of standard transactions through a network.

59) 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.

False

6) Disintermediation provides major benefits to the distributor.

procurement

60) The process of sourcing goods and materials, negotiating with suppliers, paying for goods, and making delivery arrangements is called A) e-procurement. B) SCM. C) procurement. D) sourcing.

private industrial network

61) 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

transaction-oriented

62) E-hubs are more ________ than private industrial networks. A) transaction-oriented B) collaborative C) independent D) supply-chain oriented

exchange

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.

direct goods

65) Goods that are involved in the actual production process are referred to as A) raw materials. B) direct goods. C) purchasing goods. D) indirect goods.

In 2012, the top-grossing category of m-commerce was e-book sales.

66) Which of the following statements about m-commerce is not true? A) In 2012, 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 annual revenues are approximately $30 billion. D) In 2012, the top-grossing category of m-commerce was e-book sales.

inventory management

67) You are building an e-commerce Web site that will sell e-books and are looking for a hosted solution. Which of the following functionalities is least important for your business goals? A) site tracking system B) inventory management C) digital catalog D) customer database

secure credit card clearing

68) 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

Use a hosted solution and prebuilt templates.

69) Which of the following is the least costly way to build a Web site? A) Outsource the Web site development to overseas vendors. B) Use a hosted solution and pre-built templates. C) Build your site yourself from scratch using existing software. D) Use a site-building package.

True

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

10 percent

70) You are advising an accounting firm that wants to establish its first Web site. Approximately how much of the Web site budget should you assign to purchasing software? A) 10 percent B) 25 percent C) 50 percent D) none, as no software will need to be purchased

true

8) Telecommunications hardware and software is typically the least costly portion of a Web site budget

false

9) An example of the content provider business model is Barnesandnoble.com, a retailer of printed books.

Information Density

Because information is more available to consumers, prices have to be more transparent. The consumer can find other companies prices, and can find out what the merchant paid for the product. Merchants can also use the availability of information to determine what markets will pay what prices.

Social technology

Consumers are allowed to create and share content with their friends, in the form of text, videos, music, or photos. Content can be distributed on a large scale to many consumers at once.

delivered digitally

38) Digital goods are goods that are A) produced digitally. B) sold over digital networks. C) delivered digitally. D) used with digital equipment

Ubiquity

E-commerce is available almost everywhere all of the time. Consumers can shop from home, work, or anywhere else using their smartphones.

Richness

Messages can now be delivered via the Internet with text, audio, and video at the same time to large audiences.

Web sites, display ads, measures eyeballs and impressions of display ads

Original e commerce marketing.

Interactivity

The consumer and merchant can have two way communication through the Internet.

Marketspace

a marketplace extended beyond traditional boundaries and removed from a temporal and geographic location.

Menu costs

merchants' costs of changing prices.

Price discrimination

selling the same goods, or nearly the same goods, to different targeted groups at different prices.

Social media, mobile localized ads and apps, measures conversations and engagement

social, mobile, local e commerce marketing.

Price transparency

the ease to which consumers can find out the variety of prices in a market.

Search costs

the effort required to find suitable products.

Ubiquity, global reach, universal standards, richness, interactivity, information density, personalization, social technology

the eight unique features of E commerce technology.

Dynamic pricing

the price of a product varies depending on the demand characteristics of the customer or the supply situation of the seller.

Disintermediation

the removal of organizations or business process layers responsible for intermediary steps in a value chain.

Information density

the total amount and quality of information available to all market participants, consumers, and merchants alike.