Chap 018

Chapter 18 IMPLEMENTING INTERACTIVE AND MULTICHANNEL MARKETING Test Item Table
Major Section of the Chapter Level 1: Definition (Knows Basic Terms & Facts) Anytime, Anywhere, Anyway: The New Marketing Mantra (p. 387) Creating Customer Value, Relationships, & Experiences in the New Marketspace (pp. 388-393) Online Consumer Behavior & Marketing Practice in Marketspace (pp. 393-399) MultiChannel Marketing to the Online Consumer (pp. 399-401) Video Case: AOL (pp. 403-405) Note: Bold numbers indicate short essay questions. 3, 4, 13, 15, 17, 18, 20, 22, 26, 27, 31, 32, 33, 35, 36, 37, 40, 43, 45, 118, 119 48, 49, 50, 54, 55, 56, 58, 63, 65, 66, 73, 75, 79, 84, 89, 123 Level of Learning Level 2: Conceptual (Understands Concepts & Principles) 1, 2, Level 3: Application (Applies Principles)
6, 7, 8, 10, 14, 16, 115, 116, 117
5, 9, 11, 12, 19, 21, 23, 24, 25, 28, 29, 30, 34, 38, 39, 41, 42, 44, 46,
47, 51, 52, 53, 57, 59, 60, 61, 67, 68, 69, 72, 74, 76, 80, 81, 82, 85, 86, 90, 91, 94, 95, 120, 121, 124, 126 100, 104, 109, 110, 129
62, 64, 70, 71, 77, 78, 83, 87, 88, 92, 93, 122, 125
96, 98, 99, 105, 106, 127, 128
97, 101, 102, 103, 107, 108, 111, 112,
113,
114, 130
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CHAPTER 18 IMPLEMENTING INTERACTIVE AND MULTICHANNEL MARKETING MULTIPLE CHOICE QUESTIONS

18-1 STRAIGHT As How has Internet/Web technology challenged marketers? a. b. c. d. e. to deliver to consumers more selection and service to deliver to consumers more quality and convenience to deliver to consumers more information to deliver to consumers more enjoyment to deliver to consumers all of the above CONCEPTUAL
Answer: e Page: 387 Rationale: Internet/Web technology has challenged marketers to deliver to consumers more (selection, service, quality, enjoyment, convenience, and information) for less (money, time, effort). In short the straight A customer value standard and marketing mantra applies: Anytime, Anywhere, Anyway! 18-2 STRAIGHT As How has Internet/Web technology empowered consumers? a. b. c. d. e. to seek information to evaluate alternatives to make purchase decisions on their own terms to use less time for purchase to do all of the above CONCEPTUAL
Answer: e Page: 387 Rationale: Internet/Web technology has empowered consumers to seek information, evaluate alternatives, and make purchase decisions on their own terms and conditions, all in less time. In short the straight A customer value standard and marketing mantra applies: Anytime, Anywhere, Anyway!
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18-3 MARKETPLACE
DEFINITION
When buyers and sellers engage in exchange relationships in a tangible environment inhabited by people, facilities (stores and offices), and mostly tangible objects, they are in: a. b. c. d. e. the traditional marketplace. the marketspace. a e-commerce storefront. a virtual shopping mall. an exchange portal.
Answer: a Page: 388 Rationale: The traditional marketplace is where buyers and seller engage in face-to-face exchange relationships in a material environment characterized by physical facilities (stores and offices) and mostly tangible objects. 18-4 MARKETSPACE DEFINITION
__________ is an Internet/Web-enabled digital environment characterized by face-to-screen exchange relationships and electronic images and offerings. a. b. c. d. e. An extranet A power center The traditional marketplace The marketspace A portal exchange
Answer: d Page: 388 Other Location: web Rationale: The marketspace is an Internet/Web-enabled digital environment characterized by face-to-screen exchange relationships and electronic images and offerings. 18-5 MARKETSPACE APPLICATION
Jennifer just bought a birthday gift for her best friend at www.Amazon.com. Where did this transaction occur? a. b. c. d. e. in the marketspace in the traditional marketplace at an ATM in a bricks-and-mortar store on a televised shopping network
Answer: a Page: 388 Rationale: Amazon.com is a leading Internet retailer and the archetype of companies that compete in marketspace.
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18-6 MARKETSPACE
CONCEPTUAL
The key difference between the traditional marketplace and the new marketspace is that the marketspace is a(n) __________ environment. a. b. c. d. e. tangible electronic completely transactional information-oriented marketing
Answer: b Page: 388 Rationale: The marketspace is an information- and communication-based electronic exchange environment while the marketplace is a material environment. Both the marketspace and the marketplace are commercial exchange environments where marketing takes place. 18-7 CUSTOMER VALUE CREATION IN MARKETSPACE CONCEPTUAL
Although the economic significance of electronic commerce is small compared to the traditional marketplace, it has captured the eye and imagination of marketers because the marketspace: a. b. c. d. e. will totally replace the traditional marketplace in the near future. is less competitive than the traditional marketplace. offers possibilities for customer value creation that exceed those of the traditional marketplace. mainly attracts male customers. all the above.
Answer: c Page: 388 Rationale: Marketers believe that the possibilities for customer value creation, in the form of time, place, possession, and form utilities, are greater in the marketspace than in the traditional marketplace. 18-8 CUSTOMER VALUE CREATION IN MARKETSPACE CONCEPTUAL
Which of the following characteristics of electronic commerce create customer value by contributing to time and place utility? a. b. c. d. e. Electronic commerce makes goods and services available to customers to use faster. Comparison shopping is easier in the marketspace than in the marketplace. Customers anywhere can shop in the marketspace any time. Products available in the marketspace are always customized. Consumers can tell marketers exactly what they want in the marketspace.
Answer: c Page: 388 Rationale: Geographical constraints and operating hours do not exist in the marketspace.
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18-9 CUSTOMER VALUE CREATION IN MARKETSPACE
APPLICATION
Although Amazon.com, the Internet retailer, is located in the U.S., twenty percent of its book sales are from customers who live outside the United States. This shows how electronic commerce contributes to customer value through the creation of: a. b. c. d. e. service utility. place utility. possession utility. form utility. all the above.
Answer: b Page: 388 Rationale: Electronic commerce creates place utility because there are no geographical constraints in the marketspace. Customers anywhere can shop its website. 18-10 CUSTOMER VALUE CREATION IN MARKETSPACE CONCEPTUAL
In the marketspace, consumers can tell marketers exactly what their requirements are, making customization of a product or service to fit the buyer's exact needs possible. This means that marketers can use electronic commerce to enhance customer value by contributing to: a. b. c. d. e. place utility. form utility. time utility. possession utility. none of the above.
Answer: b Page: 388 Rationale: Electronic commerce creates form utility through the interactive two-way Internet/Web-based communication capabilities in marketspace, which invites consumers to tell marketers exactly what their requirements are. Marketers can then develop customized offerings that fit the buyers exact needs.
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18-11 CUSTOMER VALUE CREATION IN MARKETSPACE
APPLICATION
Which of the following examples shows how electronic commerce creates customer value through form utility? a. b. c. d. e. Recreational Equipment, an outdoor gear marketer, receives 35 percent of its orders on its website between 10:00 p.m. and 7:00 a.m. when its retail stores are closed. Twenty percent of book sales at Amazon.com are from buyers who live outside the U.S. Travelocity.com provides almost immediate access to and confirmation of travel arrangements and accommodations. Bluefly.com, an apparel company, encourages customers to develop their own catalog free of unwanted items. All of the above.
Answer: d Page: 388 Rationale: Interactive two-way Internet/Web-based communication capabilities in the marketspace invites consumers to tell marketers exactly what their requirements are, making customization of a product or service to fit the buyers exact needs possible. This enhances form utility. 18-12 CUSTOMER VALUE CREATION IN MARKETSPACE APPLICATION
Matthew is planning a trip to Mexico for spring break. One night about midnight, he decides to visit Orbitz, the electronic reservation system, to book his flight using the computer in his dorm room. It takes him about 5 seconds to connect to Orbitz where he is prompted to enter his preferred travel dates and times and to specify which of several criteria such as schedule or price is most important to him. Matt is on a tight budget, so he checks price. A second or two after submitting this information, data about several flights on various airlines, arranged from least to most expensive, appears on his computer screen. He requests seats on the connection that best meets his budget and scheduling preferences and receives instantaneous confirmation of his reservation. After providing his credit card number he prints out a copy of his itinerary. The total time to complete the transaction is less than five minutes. Orbitz created customer value for Matt by contributing to which of the following forms of utility? a. b. c. d. e. time utility place utility possession utility form utility all the above utilities
Answer: e Page: 388 Rationale: Orbitz contributes to time utility because it never closes which means Matt could book his reservation at midnight when travel agents are not available. Place utility was created because Matt could visit Orbitz without leaving his dorm room. Possession utility was created through the instantaneous confirmation of the reservation and making the itinerary available within minutes after the flights were booked. Form utility was created because Matt was able to specify the characteristics of his flight that were most important and a customized schedule was generated for him that matched his requirements.
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18-13 INTERACTIVITY AND INDIVIDUALITY
DEFINITION
Marketers benefit from two unique capabilities of Internet/Web technology that promote and sustain customer relationships. They are: a. b. c. d. e. choice and control. choiceboards and collaborative filtering. cost and convenience. communication and convenience. interactivity and individuality.
Answer: e Page: 389 Rationale: Marketers also benefit from two unique capabilities of Internet/Web technology that promote and sustain customer relationships. One is interactivity; the other is individuality. Both capabilities are important building blocks for buyerseller relationships. For these relationships to occur, companies need to interact with their customers by listening and responding to their needs. Marketers must also treat customers as individuals and empower them to (1) influence the timing and extent of the buyerseller interaction and (2) have a say in the kind of products and services they buy, the information they receive, and the prices they pay. Alternative b describes two methods marketers use to benefit from interactivity. Alternatives a, c, and d are customer benefits. 18-14 INTERACTIVITY AND INDIVIDUALITY CONCEPTUAL
Individuality and interactivity are important capabilities that marketers derive from Internet/Web technology. Both capabilities are important building blocks for buyer-seller relationships. For these relationships to develop, companies must: a. b. c. d. e. empower customers to have a say in the kind of goods and services they buy. listen to customers and respond to their needs. empower customers to take charge of the timing and extent of the interaction. treat their customers as individuals. do all of the above.
Answer: e Page: 389 Rationale: Marketers also benefit from two unique capabilities of Internet/Web technology that promote and sustain customer relationships. One is interactivity; the other is individuality. Both capabilities are important building blocks for buyerseller relationships. For these relationships to occur, companies need to interact with their customers by listening and responding to their needs. Marketers must also treat customers as individuals and empower them to (1) influence the timing and extent of the buyerseller interaction and (2) have a say in the kind of products and services they buy, the information they receive, and the prices they pay.
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18-15 INTERACTIVE MARKETING
DEFINITION
__________ involves two-way buyer-seller electronic communications in a computer-mediated environment in which the buyer controls the kind and amount of information received from the seller. a. b. c. d. e. Multichannel marketing Electronic commerce Interactive marketing Electronic materials handling Electronic logistics
Answer: c Page: 389 Other Location: web Rationale: Key term definitioninteractive marketing 18-16 INTERACTIVE MARKETING With interactive marketing, a. b. c. d. e. the seller controls the kind and amount of information presented to the buyer. buyers and sellers communicate face-to-face in the traditional marketplace. media convergence is the key. the buyer controls the kind and amount of information received from the seller. real time transactions are impossible. CONCEPTUAL
Answer: d Page: 389 Other Location: web Rationale: Interactive marketing involves two-way buyer-seller electronic communication in a computer-mediated environment in which the buyer controls the kind and amount of information received from the seller. 18-17 INTERACTIVE MARKETING Interactive marketing is characterized by: a. b. c. d. e. sophisticated choiceboard and personalization systems. niche marketspaces. the digital divide, which separates online consumers from other consumers. a marketing mix strategy that de-emphasizes the promotion elements. a high level of convenience with little concern about cost. DEFINITION
Answer: a Page: 389 Rationale: Key term definitioninteractive marketing
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18-18 CHOICEBOARD
DEFINITION
A __________ is an interactive, Internet/Web-enabled system that allows individual customers to design their own products by answering a few questions and choosing from a menu of product attributes, prices, and delivery systems. a. b. c. d. e. seller menu seller cookie content screen choiceboard bot
Answer: d Page: 390 Rationale: Key term definitionchoiceboard 18-19 CHOICEBOARD APPLICATION
Educational publisher McGraw-Hill/Irwin allows instructors to visit its Primus website and publish customized books comprised of content from its published books. An instructor can select the information he or she wants included in a text. McGraw-Hill/Irwin will deliver the hardcopy of the text for the instructor's students in about four weeks. The selection of text material is made possible through the use of a: a. b. c. d. e. seller menu. seller cookie. content screen. choiceboard. bot
Answer: d Page: 390 Rationale: A choiceboard is an interactive, Internet/Web-enabled system that allows individual customers to design their own products by answering a few questions and choosing from a menu of product attributes, prices, and delivery systems. In this case, the instructor is choosing information from the available books to customized their own book. 18-20 COLLABORATIVE FILTERING DEFINITION
__________ is a process that automatically groups people with similar buying intentions, preferences, and behaviors and then predicts future purchases. a. b. c. d. e. Real-time e-commerce Connectivity Collaborative filtering Interactive marketing Seller personalization
Answer: c Page: 390 Rationale: Key term definitioncollaborative filtering
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18-21 COLLABORATIVE FILTERING
APPLICATION
Amazon.com uses __________ to compare each user's purchases with the purchases of other users with similar preferences to create a list of purchase recommendations. Based on a customer's desire to purchase the latest Gary Allan CD, Amazon might recommend the CDs by Brad Paisley. a. b. c. d. e. real-time e-commerce connectivity collaborative filtering interactive marketing seller personalization
Answer: c Page: 390 Other Location: web Rationale: Collaborative filtering is a process that automatically groups people with similar buying intentions, preferences, and behaviors and then predicts future purchases. 18-22 MARKETING NEWSNET Reflect.com sells __________ on the Internet. a. b. c. d. e. scrapbook materials books on philosophy mirrors lighting fixtures cosmetics DEFINITION
Answer: e Page: 390 Rationale: As described in the Marketing NewsNet, Reflect.com is the first online marketer that allows users to create their own cosmetics. 18-23 MARKETING NEWSNET APPLICATION
Reflect.com is the first online marketer that allows women to create their own cosmetics. Reflect.com is targeted to women who crave individualized products. Reflect.com uses a __________ strategy. a. b. c. d. e. product differentiation market aggregation harvesting market development diversification
Answer: a Page: 390 Rationale: A product differentiation strategy involves a firms selling two or more products with different features targeted to different market segments. Using a choiceboard, each cosmetics customer is allowed to make an infinite number of products with different features. Since each customer can do this, Reflect.com is essentially creating market segments of one person each.
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18-24 PERSONALIZATION
APPLICATION
Monster.com is a leading online, job-hunting website. A person hunting for a new job does not have to look at every listing at the website. He or she can type in a job description, and monster.com will find all the matching jobs plus continue the search and e-mail any new relevant listings. If the individual has to stop looking before seeing all the relevant jobs, monster.com will remember where he or she left off. Monster.com uses buyer-initiated: a. b. c. d. e. choiceboards. personalization. collaborative filtering. hierarchical individualization. media convergence.
Answer: b Page: 391 Rationale: Personalization is the consumer-initiated practice of generating content on a marketer's website that is custom-tailored to individual's specific needs and preferences, such as the specific job description that the person is looking for. 18-25 PERSONALIZATION APPLICATION
Educational publisher McGraw-Hill/Irwin allows instructors to visit its Primus website and publish customized books comprised of content from its published books. An instructor can select the information he or she wants included in a text. McGraw-Hill/Irwin will deliver the hardcopy of the text for the instructor's students in about four weeks. This is an example of a high degree of: a. b. c. d. e. choiceboards. personalization. collaborative filtering. hierarchical individualization. media convergence.
Answer: b Page: 391 Rationale: Personalization is the consumer-initiated practice of generating content on a marketer's website (and then turning that content into the desired text) that is custom-tailored to individual professor's specific needs and preferences. 18-26 PERSONALIZATION DEFINITION
__________ is the consumer-initiated practice of generating content on a marketer's website that is custom-tailored to individual's specific needs and preferences. a. b. c. d. e. Personalization Digitalization Normalization Intermediation Innovation by design
Answer: a Page: 391 Rationale: Key term definitionpersonalization
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18-27 PERMISSION MARKETING
DEFINITION
__________ is the solicitation of a consumer's consent to receive e-mail and advertising based on personal data supplied by the consumer. a. b. c. d. e. Opt-out marketing Seller personalization E-mail intermediation E-mail facilitation Permission marketing
Answer: e Page: 391 Rationale: Key term definitionpermission marketing 18-28 PERMISSION MARKETING APPLICATION
Clinique cosmetics has a database of more than 600,000 people who have registered to receive product updates via e-mail. To register, customers have to fill out a brief survey. When Clinique introduced its Anti-Aging Serum, it sent e-mails to all women over 35 who had listed that they were worried about wrinkles. Eight percent of the women who received the e-mail purchased the new product. Clinique used __________ to introduce its new product. a. b. c. d. e. opt-out marketing seller personalization e-mail intermediation e-mail facilitation permission marketing
Answer: e Page: 391 Rationale: Permission marketing is the solicitation of a consumer's consent to receive e-mail and advertising based on personal data supplied by the consumer. The survey information allows Clinique to target the women who would be interested in the product, and contact them about the new product via e-mail.
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18-29 PERMISSION MARKETING
APPLICATION
Monster.com is a leading online, job-hunting website. A person hunting for a new job does not have to look at every listing at the website. He or she can type in a job description, and his or her personal information and monster.com will find all the matching jobs plus continue the search and e-mail any new relevant listings. Monster.com used __________ to send its e-mail updates, which included ads from other businesses. a. b. c. d. e. opt-out marketing seller personalization e-mail intermediation e-mail facilitation permission marketing
Answer: e Page: 391 Rationale: Permission marketing is the solicitation of a consumer's consent to receive e-mail and advertising based on personal data supplied by the consumer. In this case, the consumer is providing information about the job they would like, along with their contact information, and Monster.com sends the consumer e-mail updates and advertising from other businesses. 18-30 PERMISSION MARKETING APPLICATION
The Canadian marketing manager for Schick razors recently launched its first e-mail campaign that was targeted to both men and women. Schick gave out 20,000 Xtreme III razors to customers who agreed to share information about their shaving habits. For sharing their personal information, customers were sent updates about other new products and promotions. Schick used: a. b. c. d. e. individualized marketing. personalized branding. niche marketing. permission marketing. viral marketing.
Answer: d Page: 391 Rationale: Permission marketing is the solicitation of a consumers consent (called opt-in) to receive e-mail and advertising based on personal data supplied by the consumer. In this case, the consumer shared data on their shaving habits with Schick and Schick provided, not only the razors, but also e-mail updates about other new products and promotions.
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18-31 CUSTOMER EXPERIENCE
DEFINITION
From an interactive marketing perspective, __________ is defined as the sum total of the interactions a customer has with a company's website from the first look at a home page through the entire purchase decision process. a. b. c. d. e. consumer digitalization website encounter customer experience the connectivity of a website interactive marketing
Answer: c Page: 391 Rationale: Key term definitioncustomer experience 18-32 CUSTOMER EXPERIENCE DEFINITION
Marketers produce a customer experience through seven website design elements. Which of the following is NOT one of those design elements? a. b. c. d. e. commerce cost community customization communication
Answer: b Page: 391; Figure 18-2 Rationale: From an interactive marketing perspective, customer experience is defined as the sum total of the interactions that a customer has with a companys website from the first look at a home page through the entire purchase decision process. Companies produce a customer experience through seven website design elements. These are context, content, community, customization, communication, connection, and commerce. Low cost is one of the benefits online consumers value rather than a website design element. 18-33 CONTEXT In terms of the customer experience, context is defined as the: a. b. c. d. e. website's ability to tailor itself to different users or to allow users to personalize the website. layout and design of the website. degree the website is linked to other websites. text, pictures, sound, and videos that the website contains. ways the website enables user-to-user communication. Other Location: web DEFINITION
Answer: b Page: 391; Figure 18-2 Rationale: Text term definitioncontext
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18-34 CONTEXT
APPLICATION
Wolfermans.com is a company that sells gourmet English muffins, specialty breads, and exquisite desserts in gift assortments. When you open its website, you discover fourteen pictures that make lavish use of color. The Wolferman website conveys the core consumer benefits provided by the company's offerings through the use of: a. b. c. d. e. context. commerce. communication. connection. customization.
Answer: a Page: 391; Figure 18-2 Rationale: Context refers to a websites visual appeal and functional look and feel reflected in site layout and design. A functionally oriented website focuses largely on the companys offering, be it products, services, or information, whereas a visual website focuses on the products. Context attempts to convey the core consumer benefit provided by the companys offering(s). 18-35 CONTENT In terms of the customer experience, content is defined as the: a. b. c. d. e. all digital information including text, video, audio, and graphics. website's capabilities to enable commercial transactions. degree the website is linked to other websites. layout of the website. ways the website enables user-to-user communication. DEFINITION
Answer: a Page: 391; Figure 18-2 Rationale: Text term definitioncontent 18-36 CUSTOMIZATION DEFINITION
__________ is the ability of a website to modify itself to, or be modified by, each individual user. a. b. c. d. e. Context Customization Content Communication Connection
Answer: b Page: 391; Figure 18-2 Rationale: Text term definitioncustomization
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18-37 CONNECTION In terms of the customer experience, connection is defined as the: a. b. c. d. e.
DEFINITION
text, pictures, sound, and videos that the website contains. website's capabilities to enable commercial transactions. degree the website is linked to other websites. layout of the website. website's ability to tailor itself to different users or to allow users to personalize the website.
Answer: c Page: 392; Figure 18-2 Rationale: Text term definitionconnection 18-38 CONNECTION APPLICATION
A visitor to WWF.com will notice that all of the information contained on the website is websitegenerated. There are no links to other websites. The website provides frequently updated information on WWF wrestlers, matches, and licensed merchandise on a starry black background. The website is lacking __________, an element that influences the customer experience. a. b. c. d. e. context communication commerce connection content
Answer: d Page: 392; Figure 18-2 Rationale: The connection element in website design is the network of formal linkages between a companys site and other sites. These links are embedded in the website; appear as highlighted words, a picture, or graphic; and allow a user to effortlessly visit other sites with a mouse click. 18-39 CONNECTION APPLICATION
The home page for TheKnot.com, a website for locating everything needed for a wedding, contains several links to other websites that an engaged couple might need including a travel agency, a linen store, a wedding gown retailer, and several other formal links between the website and other related websites. TheKnot.coms customer experience includes: a. b. c. d. e. convenience. connection. control. community. communication.
Answer: b Page: 392; Figure 18-2 Other Location: web Rationale: The connection element in website design is the network of formal linkages between a companys site and other sites. These links are embedded in the website; appear as highlighted words, a picture, or graphic; and allow a user to effortlessly visit other sites such as the travel agency, a linen store, and a wedding gown retailer, with a mouse click.
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18-40 COMMUNICATION
DEFINITION
In terms of the customer experience, __________ is defined as the dialogue that unfolds between the website and its users. a. b. c. d. e. context communication commerce connection community Other Location: web APPLICATION
Answer: b Page: 392; Figure 18-2 Rationale: Text term definitioncommunication 18-41 COMMUNICATION
Half.com is an Internet source for new and used books, videos, and CDs that are sold at about half the price you would find in a full-price retailer's. If a book you desire is currently not available at the website, you can put the title on your wish list. As soon as someone lists the book for sale, half.com will e-mail you so that you can buy it. Half.com's customer experience includes: a. b. c. d. e. convenience. connection. control. community. communication.
Answer: e Page: 392; Figure 18-2 Rationale: Communication is defined as the dialogue that unfolds between the website and its users. 18-42 COMMUNITY APPLICATION
GolfWeb.com, is a-popular website for golfing enthusiasts. Its members pay an annual fee of $39.95 to get discounts on merchandise and to trade tips and stories about the best courses and the toughest holes in its chat rooms. This is a description of a website with a strong __________ design element. a. b. c. d. e. context community choice convenience connection
Answer: b Page: 392; Figure 18-2 Rationale: In terms of the customer experience, community is defined as the ways the website enables user-to-user communication.
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18-43 COMMUNITY
DEFINITION
Much like a personal conversation, an increasing number of company websites encourage userto-user communications hosted by the company to create virtual __________. a. b. c. d. e. context community choice convenience connection
Answer: b Page: 392; Figure 18-2 Rationale: Text term definitioncommunity 18-44 COMMERCE APPLICATION
When Andrea visited www.disneystore.com, she looked at several different classic Pooh plush animals before she selected Piglet and Tigger and put them in her shopping cart. She next went to checkout where she confirmed that she wanted to buy the two stuffed animals, typed in her address, and concluded the transaction by providing her credit card information. In terms of customer experience, this example describes the __________ design element. a. b. c. d. e. context community content commerce connection
Answer: d Page: 392; Figure 18-2 Rationale: In terms of the customer experience, commerce is the website's ability to enable complete sales transactions for products and services. Online transactions are quick and simple in well-designed websites. 18-45 COMMERCE DEFINITION
__________ is the websites ability to complete sales transactions for products and services. a. b. c. d. e. context community content commerce connection
Answer: d Page: 392; Figure 18-2 Rationale: Text term definitioncommerce
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18-46 CUSTOMER EXPERIENCE
APPLICATION
A visitor to schoolpop.com will notice that it contains little text and no pictures, sound, or video and a large number of links that have one thing in commonthey are all retailers hoping to attract environmentally-conscious consumers. Which of the following best describes the schoolpop.com website? a. b. c. d. e. The website has an emphasis on context and minimal content. The website has minimal context and an emphasis on community. The website has no content whatsoever. The website has minimal content and an emphasis on connection. The website emphasizes commerce and makes little or no use of the other six elements of website design.
Answer: d Page: 391-392; Figure 18-2 Other Location: web Rationale: The fact the website has little text is a description of a website with minimal content. Its links to retailers shows its strong emphasis on connection. 18-47 ONLINE CONSUMERS Compared to the general population, online consumers tend to be: a. b. c. d. e. female. better educated. less affluent. older. male. CONCEPTUAL
Answer: b Page: 394 Rationale: As a group, online consumers, like Internet/Web users, are evenly split between men and women and tend to be better educated, younger, and more affluent than the general U.S. population. 18-48 ONLINE CONSUMERS Online consumers are: a. b. c. d. e. a subsegment of all Internet/Web users people who research products and services and purchase on-line. consist of about two-thirds of adult Internet/Web users. are younger than the general U.S. population. All of the above describe on-line consumers. DEFINITION
Answer: e Page: 394 Rationale: Online consumers are the subsegment of all Internet/Web users who use this technology to research products and services and make purchases. As a group, online consumers, like Internet/Web users, are evenly split between men and women and tend to be better educated, younger, and more affluent than the general U.S. population.
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18-49 ONLINE CONSUMERS
DEFINITION
__________ are the subsegment of all Internet/Web users who use this technology to research products and services and make purchases. a. b. c. d. e. Online consumers Computer users Computer consumers General consumers Electronic consumers
Answer: a Page: 394 Rationale: Text term definitiononline consumers 18-50 ONLINE CONSUMER PROFILE DEFINITION
Which of the following profiles would most likely describe an online consumer? a. b. c. d. e. a 20-something high-school graduate earning $18,000 annually a 30-something college graduate with an annual income of $65,000 a 50-something traditional housewife with an annual income under $35,000 a 70-something retired postal worker receiving $45,000 in annual retirement benefits all of the above
Answer: b Page: 394 Rationale: Online consumers are the subsegment of all Internet/Web users who use this technology to research products and services and make purchases. As a group, online consumers, like Internet/Web users, are evenly split between men and women and tend to be better educated, younger, and more affluent than the general U.S. population. 18-51 ONLINE CONSUMER PURCHASING BEHAVIOR CONCEPTUAL
Which of the following product categories is particularly well suited for electronic commerce? a. b. c. d. e. computers and computer accessories CDs, videos, and books travel reservations clothing and accessories all the above
Answer: e Page: 394; Figure 18-3 Other Location: web Rationale: There are six general product and service categories that dominate online consumer buying today and for the foreseeable future. One category consists of items for which product information is an important part of the purchase decision but prepurchase trial is not necessarily critical. Books and computers are in this category. A second category consists of CDs and videos. A third contains items that can be delivered digitally, including computer software, travel and lodging reservations, etc. A fourth consists of unique items such as collectibles, specialty goods and foods. A fifth includes items that are regularly purchased and where convenience is very important such as grocery products are in this category. Finally, highly standardized products and services for which price is important such as insurance and home improvement products make the last category.
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18-52 ONLINE CONSUMER PURCHASING BEHAVIOR
CONCEPTUAL
Electronic booksellers like amazon.com and barnesandnoble.com are likely to enjoy strong sales in the future because books are a product category that: a. b. c. d. e. can be delivered digitally. are highly standardized. require audio or video demonstration. do not require pre-purchase trial. are purchased mainly on the basis of price.
Answer: d Page: 394-395 Rationale: There are six general product and service categories that dominate online consumer buying today and for the foreseeable future. One category consists of items for which product information is an important part of the purchase decision but prepurchase trial is not necessarily critical. Books and computers are in this category. A second category consists of CDs and videos. A third contains items that can be delivered digitally, including computer software, travel and lodging reservations, etc. A fourth consists of unique items such as collectibles, specialty goods and foods. A fifth includes items that are regularly purchased and where convenience is very important such as grocery products are in this category. Finally, highly standardized products and services for which price is important such as insurance and home improvement products make the last category. 18-53 ONLINE CONSUMER PURCHASING BEHAVIOR CONCEPTUAL
Auto and homeowners insurance are particularly well suited for electronic commerce because these services: a. b. c. d. e. require pre-purchase trial. are highly standardized and use price competition. are purchased on the basis of attributes other than price. require one-to-one selling. require video or audio demonstration.
Answer: b Page: 394-395 Rationale: There are six general product and service categories that dominate online consumer buying today and for the foreseeable future. One category consists of items for which product information is an important part of the purchase decision but prepurchase trial is not necessarily critical. Books and computers are in this category. A second category consists of CDs and videos. A third contains items that can be delivered digitally, including computer software, travel and lodging reservations, etc. A fourth consists of unique items such as collectibles, specialty goods and foods. A fifth includes items that are regularly purchased and where convenience is very important such as grocery products are in this category. Finally, highly standardized products and services for which price is important such as insurance and home improvement products make the last category.
1188
DEFINITION
By 2005, which of the following product categories is expected to account for the largest proportion of total online consumer sales? a. b. c. d. e. travel reservations clothing and accessories food and beverages music and books ticket event sales
Answer: b Page: 394; Figure 18-3 Rationale: As shown in Figure 18-3, while clothing and accessories were in fourth place with 13% of online sales in 2001, by 2005 they are expected to have 17% of online sales and be the number one category online. 18-55 ONLINE CONSUMER PURCHASING BEHAVIOR The six reasons why consumers shop and buy online are: a. b. c. d. e. interest, intuitive, cost, control, flexibility, and customization. customization, customerization, price, service, entertainment, and convenience. cost, convenience, customization, communication, control, and choice. content, context, utility, entertainment, communication, and cost. control, utility, interest, personalization, choice, and flexibility. DEFINITION
Answer: c Page: 395; Figure 18-4 Rationale: Marketers emphasize the customer value-creation possibilities, the importance of interactivity, individuality and relationship building, and producing customer experience in the new marketspace. However, consumers typically refer to six reasons why they shop and buy online: convenience, choice, customization, communication, cost and control. 18-56 ONLINE CONSUMER PURCHASING BEHAVIOR DEFINITION
Which of the following is NOT one of the six reasons why consumers say they prefer to shop online? a. b. c. d. e. convenience cost choice cookies customization
Answer: d Page: 395; Figure 18-4 Rationale: Marketers emphasize the customer value-creation possibilities, the importance of interactivity, individuality and relationship building, and producing customer experience in the new marketspace. However, consumers typically refer to six reasons why they shop and buy online: convenience, choice, customization, communication, cost and control. Cookies represent a potential loss of privacy for customers. They are, therefore, potentially a reason why consumers would avoid online shopping.
1189
CONCEPTUAL
Which of the following characteristics of online shopping contributes to its convenience? a. b. c. d. e. Customers don't have to fight traffic, find a parking space, walk long aisles, or stand in store check-out lines. Consumers can avail themselves of numerous websites for almost any product or service they want. Consumers who prefer one-of-a-kind items that fit their specific needs can create them online. Consumers can engage in an electronic dialogue with marketers. Consumers are in charge in the marketspace.
Answer: a Page: 395 Rationale: The convenience of shopping online is due to the fact that consumers do not have to physically go to a store. This means they don't have to fight traffic, look for a parking space, walk the store aisles, or wait in line to check out. However, for convenience to remain a source of customer value creation, websites must be easy to locate and navigate, and image downloads must by fast. 18-58 BOTS DEFINITION
__________ are electronic shopping agents that comb websites to compare prices and product features. a. b. c. d. e. Cookies Weblinks Intranets Bots Extranets
Answer: d Page: 395 Rationale: Key term definitionbots 18-59 BOTS CONCEPTUAL
Which of the following marketing tools contribute to the convenience of online shopping? a. b. c. d. e. bots extranets digital divides cookies weblinks
Answer: a Page: 395 Rationale: A bot is an electronic shopping agent or robot that combs websites to compare prices and product or service features.
1190
18-60 BOTS Bots contribute to the convenience of online shopping because they: a. b. c. d. e.
CONCEPTUAL
increase time spent online. allow customers to make online comparisons of prices and product features. permit customers to design one-of-a-kind items that fit their specific needs. allow customers to engage in an electronic dialogue with marketers. offer customers almost any product or service they want.
Answer: b Page: 395 Rationale: Bots are electronic shopping agents or robots that comb websites, to compare prices and product or service features so that customers do not have to physically visit stores to make these comparisons. 18-61 BOTS Why would an online consumer want to use a bot? a. b. c. d. e. Bots help customers design one-of-a-kind products that fit their specific needs. Bots increase the selection of goods and services from which online consumers can choose. Bots allow online consumers to engage in an electronic dialogue with marketers. Bots enhance the convenience of online shopping. Bots allow marketers to record an online consumer's visits to websites. CONCEPTUAL
Answer: d Page: 395 Other Location: web Rationale: Bots are electronic shopping agents or robots that comb websites, to compare prices and product or service features so that customers do not have to physically visit stores to make these comparisons, making their shopping more convenient. 18-62 BOTS APPLICATION
Megan is looking for a gift for her older brother who enjoys reading mysteries. A book by one of his favorite authors was recently published and she plans to buy it. However, she is on a limited budget so she wants to find the lowest price. The most convenient way for Megan to find the best price for the book would be to: a. b. c. d. e. drive to a large shopping center where there are several bookstores to see which one has the book at the lowest price. call all the bookstores in her community to inquire about the price of the book at each one. use a bot to comb the websites of online booksellers and locate the website with the best price. use a cookie to contact various bookstores and find the one with the best price. do none of the above.
Answer: c Page: 395 Other Location: web Rationale: Bots enhance the convenience of online shopping by allowing consumers to make price comparisons without having to physically visit of telephone a store.
1191
18-63 CHOICE
DEFINITION
Choice is a second reason consumers shop and buy online and has two dimensions. First, choice exists in the product or service selection offered to consumers. Second, a. b. c. d. e. consumers can engage in electronic dialogue to make informed choices. customers can use bots to find the products online at low prices. cookies can be used to identify the consumer to the website. the object of the Web is to overwhelm consumers with choices. the products or services presented match consumer preferences right away.
Answer: a Page: 396 Rationale: Text term definitionchoice 18-64 ONLINE CONSUMER PURCHASING BEHAVIOR APPLICATION
Suppose you visit www.cdnow.com and purchase a Shania Twain CD. During your visit, you click on the Album Advisor feature, which instantly creates a list of other CDs that someone like you, who likes Shania Twain, might like. The Album Advisor has the greatest influence on which of the reasons consumers give for shopping online? a. b. c. d. e. convenience cost communication customization control
Answer: d Page: 396 Rationale: The Album Advisor creates a customized list of recommendations for each customer, based on what that particular customer purchases. 18-65 CUSTOMIZATION DEFINITION
__________ arises from Internet/Web enabled capabilities that make possible a highly interactive and individualized information and exchange environment for shoppers and buyers. a. b. c. d. e. connectivity customerization customization online facilitation intermediation
Answer: c Page: 396 Rationale: Text term definitioncustomization
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18-66 CUSTOMERIZATION
DEFINITION
To varying degrees, online consumers also benefit from __________, which is the growing practice of customizing not only a product or service but also personalizing the marketing and overall shopping and buying interaction for each customer. a. b. c. d. e. connectivity customerization customer digitalization online facilitation intermediation
Answer: b Page: 396 Rationale: Key term definitioncustomerization 18-67 CUSTOMERIZATION Customerization: a. b. c. d. e. is a technique used by traditional retailers to get online consumers to engage in more bricksand-mortar shopping. makes shopping and buying an enjoyable, personal experience. uses multisensory communication to bombard online consumers with untargeted advertising. is a method of modifying a generic website for use by small low-tech businesses. is a technique used by online retailers to make their websites destination websites instead of portals. CONCEPTUAL
Answer: b Page: 396 Rationale: Customerization is the growing practice of customizing not only a product or service but also personalizing the marketing and overall shopping and buying interaction for each customer. Customerization seeks to do more than offer consumers the right product, at the right time, at the right price. It combines choiceboard and personalization systems to expand the exchange environment beyond a transaction and makes shopping and buying an enjoyable, personal experience.
1193
CONCEPTUAL
The relationship between the interactive communication capabilities of the Internet/Web and customization is that interactive communication: a. b. c. d. e. allows online consumers to inform marketers about what they want so that customized offerings can be created. helps customers reduce their search costs and more conveniently find the offerings with the desired features. protects online consumer privacy about the customized products and services they desire. records a user's visits to websites which enhances online consumers' convenience. is described by none of the above.
Answer: a Page: 396 Rationale: Interactive communication between online buyers and sellers is the basis for creating customized product and service offerings. Buyers communicate their unique needs to marketers who can use this information to create offerings that are specifically suited to these needs. 18-69 COMMUNICATION CONCEPTUAL
__________ has proven to be a double-edged sword for online consumers. On the one hand, information search costs can be reduced, but on the other hand electronic junk mail may increase. a. b. c. d. e. Cost Control Customization Communication Choice
Answer: d Page: 396 Rationale: Communication has proven to be a double-edged sword for online consumers. On the one hand, the interactive communication capabilities of Internet/Web-enabled technologies increase consumer convenience, reduce information search costs, and make choice assistance and customization possible. On the other hand, communication can take the form of electronic junk mail or unsolicited e-mail, called spam.
1194
18-70 WEB COMMUNITIES
APPLICATION
Bolt.com is a popular online destination for people between the ages of 15 and 24. The main reason users come to this website is to communicate with their peers and voice their opinions through chat rooms, message boards, instant messaging, and polling. Topics of discussion range from school to music to dating. Bolt.com is an example of: a. b. c. d. e. spam. a shopping bot. a web community. interactive linking. a web caf.
Answer: c Page: 396 Rationale: Web communities are websites that allow people to meet online and exchange views on topics of common interest. 18-71 WEB COMMUNITIES APPLICATION
The unofficial Dawson's Creek website (www.dawsonsite.cjb.net) encourages its users to discuss the show's plotting and character development in chat rooms and through a message board. This website is: a. b. c. d. e. spam. a shopping bot. a web community. interactive linking. a web caf.
Answer: c Page: 396 Rationale: Web communities are websites that allow people to meet online and exchange views on topics of common interest. 18-72 SPAM Which of the following statements about spam is true? a. b. c. d. e. Online services cannot legally prevent spammers from spamming their subscribers. Spam is defined as solicited e-mail. Spam is the result of permission e-mail. The Federal government has no interest in regulating spam. Spam is electronic junk mail. CONCEPTUAL
Answer: e Page: 396 Rationale: Spam is electronic junk mail or unsolicited e-mail. Hotmail has implemented procedures to free its subscribers from spam. Spam is unsolicited e-mail. 17 states have antispamming laws. In addition pending Federal legislation will impose a fine of $500,000 and a jail sentence of one year on professional spammers.
1195
18-73 BUZZ
DEFINITION
Internet/Web-enabled communication capabilities also make possible __________, a popular term for word-of-mouth behavior in marketspace. a. b. c. d. e. spam e-mail customerization interactive advertising promotional punch
Answer: e Page: 396 Rationale: Text term definitionbuzz 18-74 BUZZ Buzz is most closely related to __________. a. b. c. d. e. spam word-of-mouth e-mail customerization publicity CONCEPTUAL
Answer: b Page: 396 Other Location: web Rationale: Internet/Web-enabled communication capabilities also make possible buzz, a popular term for word-of-mouth behavior in marketspace. 18-75 VIRAL MARKETING DEFINITION
__________ is the Internet/Web-enabled promotional strategy that encourages individuals to forward marketer-initiated messages to others via e-mail. a. b. c. d. e. Opt-out marketing Customerization Viral marketing Niche marketing Permission marketing
Answer: c Page: 397 Rationale: Key term definitionviral marketing
1196
18-76 VIRAL MARKETING
CONCEPTUAL
To which element of the marketing mix is viral marketing most closely related? a. b. c. d. e. product place production promotion price
Answer: d Page: 397 Rationale: Viral marketing is an Internet/Web-enabled promotional strategy that encourages individuals to forward marketer-initiated messages to others via e-mail. 18-77 VIRAL MARKETING APPLICATION
In an online survey, La Senza, a Montreal-based apparel chain, asked women about their clothes. The query was part of an online survey designed to drive traffic to the company website, www.lasenza.com. The survey asked participants several multiple-choice questions and used the answers to describe the participant's personality style. Contestants, who sent the survey to at least five friends and got them to enter it, were then entered in a drawing to win a $300 personalized lingerie wardrobe. Names and information gathered were put into a database for later marketing efforts. This survey is an example of: a. b. c. d. e. opt-out marketing. customerization. viral marketing. niche marketing. permission marketing.
Answer: c Page: 397 Rationale: Viral marketing is the Internet/Web-enabled promotional strategy that encourages individuals to forward marketer-initiated messages to others via e-mail. 18-78 VIRAL MARKETING APPLICATION
Visitors to the Universal Studios theme park can borrow one of three user-controlled webcams to take pictures of the park and themselves enjoying the park. Then the webcam users can e-mail the pictures to their friends. The average webcam user sends four e-mails to friends and has resulted in more than 6 million park images being sent to potential visitors. Universal Studios is using __________ to promote its theme park. a. b. c. d. e. opt-out marketing customerization viral marketing niche marketing permission marketing
Answer: c Page: 397 Other Location: web Rationale: Viral marketing is the Internet/Web-enabled promotional strategy that encourages individuals to forward marketer-initiated messages to others via e-mail.
1197
18-79 DYNAMIC PRICING
DEFINITION
__________ is the practice of changing prices for products in real time in response to supply and demand conditions. a. b. c. d. e. Dynamic pricing Targeted return-on-investment pricing Experience curve pricing Skimming pricing Request-for-bid pricing
Answer: a Page: 397 Rationale: Key term definitiondynamic pricing 18-80 ONLINE CONSUMER PURCHASING BEHAVIOR CONCEPTUAL
Which of the following statements about cost and its impact on online shopping is true? a. b. c. d. e. Lower external search costs are one of the major reasons for the popularity of online shopping. Dynamic pricing is used for all products sold on the Internet. All items purchased online have lower prices than they would if purchased at traditional retailers. Fixed pricing is commonly used online because there is no need to respond quickly to changes in supply and demand conditions. All of the above statements about cost and its impact on online shopping are true.
Answer: a Page: 397 Rationale: Many popular items bought online can be purchased at the same price or cheaper than in retail stores. Lower prices also result from software that permits dynamic pricing, typically used for time-sensitive items, scarce items, and out-of-date items. To be able to respond quickly to changes in supply and demand conditions, online marketers rely on dynamic pricing. A consumers cost of external information search, including time spent and often the hassle of shopping, is also reduced. Greater shopping convenience and lower external search costs are two major reasons for the popularity of online shopping and buying among women.
1198
18-81 ONLINE CONSUMER PURCHASING BEHAVIOR Consumers cite cost as one of the reasons they prefer to buy online because: a. b. c. d. e.
CONCEPTUAL
shopping in the marketspace allows for easier price comparisons. the majority of the most popular items bought online can be purchased at the same price or cheaper than in retail stores. the time and effort of shopping is reduced. external search costs are lower. all the above.
Answer: e Page: 397 Rationale: Many popular items bought online can be purchased at the same price or cheaper than in retail stores. Lower prices also result from software that permits dynamic pricing, typically used for time-sensitive items, scarce items, and out-of-date items. To be able to respond quickly to changes in supply and demand conditions, online marketers rely on dynamic pricing. A consumers cost of external information search, including time spent and often the hassle of shopping, is also reduced. Greater shopping convenience and lower external search costs are two major reasons for the popularity of online shopping and buying among women. Bots permit easy price comparisons. And, online searches for information is less time consuming and less effortful than visiting retail stores which lowers the cost of external search. 18-82 ONLINE CONSUMER PURCHASING BEHAVIOR Online consumers are called empowered consumers because: a. b. c. d. e. products and services purchased online often cost less than in a retail store. online shopping does not require that they fight traffic, find a parking space, walk long store aisles and wait in line at check-out. they are more informed and discerning shoppers. there are websites for almost any good or service they want. they can engage in an electronic dialogue with marketers. CONCEPTUAL
Answer: c Page: 398 Other Location: web Rationale: Online consumers are empowered because they control the purchase decision process. They enjoy more control in marketspace than in the marketplace because they have access to more information. This allows them to more knowledgeably evaluate alternatives, and make better purchase decisions.
1199
APPLICATION
Frank needs to buy a new car. Before visiting a showroom, however, he logs onto www.autobytel.com. Here, he can compare the attributes of various makes and models, find information about the prices of various option packages and learn the manufacturer's suggested retail prices for different cars. After deciding on the car he wants to buy, Frank visits the local showroom and negotiates with the salesperson for the model and options package he wants. Because Frank is so well informed about prices, he is able to make a deal several hundred dollars less than the salesperson's best offer. Frank's car buying experience illustrates which reason why consumers shop online? a. b. c. d. e. convenience communication customization choice control
Answer: e Page: 398 Rationale: Online shoppers and buyers are empowered consumers. They readily use Internet/Web technology to seek information, evaluate alternatives, and make purchase decisions on their own time, terms, and conditions. The result is a more informed consumer and discerning shopper. Frank used the Internet to become more informed about the price of the car he wanted. His knowledge gave him more power and control in negotiating with the result that he was able to get a better deal. 18-84 PORTALS DEFINITION
__________ are electronic gateways to the World Wide Web that supply a broad array of news and entertainment, information resources, and shopping services. a. Cookies b. Bots c. Portals d. Promotional websites e. Transactional websites Answer: c Page: 398 Rationale: Key term definitionportals
1200
18-85 PORTALS
CONCEPTUAL
Portals help consumers exercise greater control over the online purchase decision process because a portal: a. b. c. d. e. is the means by which online consumers engage in electronic dialogue with marketers. gives online consumers access to information that enables them to make purchase decisions on their own terms and conditions. records an online consumer's visit to a website. contains information about online consumers' product preferences. all the above.
Answer: b Page: 398 Rationale: Portals supply a broad array of information resources and shopping services that allow online customers to be more informed and more discerning and therefore enjoy greater control over their purchase decisions. 18-86 PORTALS The main difference between a portal and a bot is that a portal: a. b. c. d. e. contributes to online consumers' control but a bot contributes to cost. provides access to a broad array of information resources and shopping services while bots are used mostly for comparison shopping. permits online consumers to design their own one-of-a-kind product while bots allow consumers to engage in an electronic dialogue with marketers. limits the number of choices available to online consumers while bots increases the choices. contributes to online consumer convenience but bots contribute to customization. CONCEPTUAL
Answer: b Page: 398 Rationale: Portals are electronic gateways to the World Wide Web that supply a broad array of news and entertainment, information resources, and shopping services. Among these services may be comparison shopping bots. Thus, bots are more limited in scope than portals. 18-87 PORTALS APPLICATION
Troutunlimited.com is a small website designed to appeal to people who love fly fishing. The website contains weather information and numerous links to e-commerce websites such as those operated by Orvis and L.L. Bean and to other websites that provide information about flyfishing. Troutunlimited.com is an example of a(n): a. b. c. d. e. affiliate. destination. portal. dynamic website. hub.
Answer: c Page: 398 Rationale: Portals are electronic gateways to the World Wide Web that supply a broad array of information resources and shopping services, such as the ones provided by Troutunlimited.com.
1201
18-88 PORTALS
APPLICATION
Iwon.com is an example of a(n) __________ because it contains a broad array of news, shopping information, entertainment, and links to a variety of other websites. a. b. c. d. e. affiliate destination portal dynamic website hub
Answer: c Page: 398 Other Location: web Rationale: Portals are electronic gateways to the World Wide Web that supply a broad array of news, entertainment, information resources, and shopping services. 18-89 COOKIES DEFINITION
__________ are computer files that a marketer can download onto the computer of an online shopper who visits the marketer's website. a. b. c. d. e. Cookies Bots Locator websites Interstitials Promotional websites
Answer: a Page: 398 Rationale: Key term definitioncookies 18-90 COOKIES CONCEPTUAL
How do cookies contribute to improving a consumer's online buying and shopping experience? a. b. c. d. e. convenience cost choice communication customization.
Answer: e Page: 398 Rationale: By providing marketers with information about online consumers product preferences, cookies allow marketers to create customized offerings that more closely fit those preferences.
1202
18-91 COOKIES
CONCEPTUAL
Cookies represent a potential loss of privacy to online consumers because they: a. b. c. d. e. contain personal data, financial information, and consumers' credit card numbers. make a website user friendly. help marketers create customized product offerings that fit customers' expressed product preferences. allow online consumers to engage in interactive communication with marketers. none of the above.
Answer: a Page: 398-399 Rationale: Cookies contain personal data, financial information, and credit card numbers. This information represents a potential violation of online consumers' privacy. 18-92 COOKIES APPLICATION
Suppose you are designing a marketing website and you would like it to be as user-friendly as possible. In particular, you do not want repeat customers to have to enter in their address, e-mail, telephone number, and credit card data every time they make an online purchase. Rather, you would like your website to recognize each customer by name every time he or she visits the website and to retrieve all the information about that customer automatically whenever he or she wishes to make a purchase. To achieve this goal, you should use: a. b. c. d. e. cookies. portals. search engines. push technologies. bots.
Answer: a Page: 398 Rationale: Cookies are computer files that a marketer can download onto the computer of an online shopper who visits the marketers website. Cookies allow the marketers website to record a users visit, track visits to other websites, and store and retrieve this information in the future. Cookies also contain information provided by visitors, such as expressed product preferences, personal data, and financial information, including credit card numbers. Clearly, cookies make possible customized and personalized content for online shoppers. But, they can also represent a potential loss of privacy. Cookies can be used to enhance the user-friendliness of a website in the ways described in this question.
1203
18-93 COOKIES
APPLICATION
Wolfermans.com is a website that sells delectable muffins, rich desserts, smoked turkeys, and other food attractively packaged and ready for gift-giving. All a visitor has to do is decide which to buy. Wolfermans.com keeps an address book for each customer. The address book contains the name and address of everyone to whom the customer has sent a gift in the past to make it easier and quicker to send additional gifts. The address book information is more than likely stored in a: a. b. c. d. e. cookie. bot. search engine. weblink. portal.
Answer: a Page: 398 Other Location: web Rationale: Cookies are computer files that a marketer can download onto the computer of an online shopper who visits the marketers website. Cookies allow the marketers website to record a users visit, track visits to other websites, and store and retrieve this information in the future. Cookies also contain information provided by visitors, such as expressed product preferences, personal data, and financial information, including credit card numbers. Clearly, cookies make possible customized and personalized content, such as an address book, for online shoppers. But, they can also represent a potential loss of privacy. 18-94 ETHICS AND SOCIAL RESPONSIBILITY ALERT CONCEPTUAL
Self-regulatory efforts to respond to online consumers' concerns about privacy and security include: a. b. c. d. e. eliminating the use of cookies on marketing websites. prohibiting the collection of online consumers' personal and financial information. promoting online privacy policies. lobbying against the adoption of federal Internet/Web privacy laws. relying on the U.S. government to protect online consumer privacy.
Answer: c Page: 398 Rationale: The Online Privacy Alliance is a consortium of businesses and associations that aims to promote electronic commerce through online privacy policies and self-regulation.
1204
18-95 ONLINE CONSUMER SHOPPING BEHAVIOR
CONCEPTUAL
Which of the following statements about online consumer shopping behavior is true? a. b. c. d. e. The busiest shopping day online is Wednesday. Consumers who go online are more likely to buy than to simply browse. There is typically very little online shopping during what is considered to be normal working hours. Saturday is the busiest shopping day for both online and traditional retailers. Users are just as likely to visit websites selling health and beauty aids and clothing whether they are at work or at home.
Answer: a Page: 399 Rationale: Consumers are much more likely to browse than to buy. A large percentage of online shopping occurs during normal working hours. Wednesday is the busiest shopping day in the marketspace. Saturday is the busiest shopping day for traditional retailers. Websites selling health and beauty aids and clothing are typically visited from home. 18-96 MULTICHANNEL MARKETING Multichannel marketing: a. b. c. d. e. seeks to integrate a firm's communication and distribution channels. can be used to leverage the value-added capabilities of different channels. bears some resemblance to dual distribution. allows buyers to browse and buy anytime, anywhere, anyway expecting that the experience will be similar regardless of channel. is accurately described by all of the above. DEFINITION
Answer: e Page: 399 Rationale: Key term definitionmultichannel marketing 18-97 MULTICHANNEL MARKETING APPLICATION
The ad for babyGap advises readers there are three ways to shop at babyGapbabygap.com. 1800-GAPSTYLE, and babyGap stores. The promotion of all three information and delivery channels indicates that babyGap would like its customers to not distinguish between channels but think of it all as babyGap. BabyGap is likely following a(n) __________ strategy. a. b. c. d. e. viral marketing permission marketing multichannel marketing dual distribution market penetration
Answer: c Page: 399 Other Location: web Rationale: Multichannel marketing is the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building customer relationships with consumers who shop and buy in the traditional marketplace and marketspace. Multichannel marketing seeks to integrate a firms communication and delivery channels, not differentiate them, the case with babyGap.
1205
18-98 TRANSACTIONAL & PROMOTIONAL WEBSITES The two general applications of websites based on their intended purposes are: a. b. c. d. e. information and exchange. selling and promotional. transactional and promotional. corporate and marketing. utility and promotional.
DEFINITION
Answer: c Page: 400 Rationale: Websites play multiple roles in multichannel marketing because they can serve as either a communication or delivery channel. Two general types of websites exist based on their intended purpose: (1) transactional websites and (2) promotional websites. 18-99 TRANSACTIONAL WEBSITE The primary purpose of transactional websites is to: a. b. c. d. e. convert an online browser into an online, catalog, or in-store buyer. provide access to human service representatives to assist in making purchases. conduct customer research. obtain feedback from customers. all the above. DEFINITION
Answer: a Page: 400 Rationale: Text term definitiontransactional website 18-100 TRANSACTIONAL WEBSITE CONCEPTUAL
__________ is a problem for some consumer marketers that use transactional websites even though marketers claim this problem is offset by the number of new customers they attract to stores. a. b. c. d. e. Cannibalization of sales volume An opt-out restriction Permission marketing Viral marketing None of the above
Answer: a Page: 400 Rationale: Retailers and direct selling firms have found that their websites, while cannibalizing sales volume from stores, catalogs, and sales representatives, attract new customers and influence sales.
1206
18-101 TRANSACTIONAL WEBSITE
APPLICATION
Cisco Systems website, Cisco Connection Online, generates about 60 percent of Cisco's sales. Cisco Connection Online is an example of a(n): a. b. c. d. e. promotional website. web community. transactional website. portal. information website.
Answer: c Page: 400 Other Location: web Rationale: Transactional websites are essentially electronic storefronts. They focus mainly on converting an online browser into an online, catalog, or in-store buyer using the website design elements. 18-102 TRANSACTIONAL WEBSITE APPLICATION
A visitor to proflowers.com can select and buy beautiful cut flower arrangements to be sent anywhere in the U.S. Its home page contains exquisite photos of the month's featured bouquets. Proflowers.com is a __________ website. a. b. c. d. e. portal transactional promotional supplier employee
Answer: b Page: 400 Rationale: Transactional websites are essentially electronic storefronts. They focus mainly on converting an online browser into an online, catalog, or in-store buyer using the website design elements. The context of the proflowers.com site shows exquisite photos of the bouquets, encouraging browsers to buy. 18-103 TRANSACTIONAL WEBSITE APPLICATION
Wolfermans.com is a website that sells delectable muffins, rich desserts, smoked turkeys, and other food attractively packaged and ready for gift-giving. All a visitor has to do is decide what to buy. Wolferman's is an example of a __________ website. a. b. c. d. e. portal transactional promotional supplier employee
Answer: b Page: 400 Rationale: Transactional websites are essentially electronic storefronts. They focus mainly on converting an online browser into an online, catalog, or in-store buyer using the website design elements.
1207
18-104 TRANSACTIONAL WEBSITE
CONCEPTUAL
Transactional websites are used less frequently by manufacturers of consumer products because: a. b. c. d. e. in some industries, this form of vertical integration is illegal. of the threat of channel conflict. it is difficult to maintain a product development strategy. some stakeholders are opposed to websites that drain resources without providing any direct return on investment. such websites require dynamic pricing, which is difficult to use if supply and demand change frequently.
Answer: b Page: 400 Rationale: Transactional websites are essentially electronic storefronts. They focus mainly on converting an online browser into an online, catalog, or in-store buyer using the website design elements. This may lead to potential harm to trade relationships with the retailing intermediaries and channel conflict. There is no direct relationship between a decision to implement a transactional website and a product development strategy. Dynamic pricing is the practice of changing prices for products in real time in response to supply and demand conditions. 18-105 CHANNEL CONFLICT DEFINITION
A recurring issue for manufacturers is the threat of __________ and the potential harm to trade relationships with their retailing intermediaries. a. b. c. d. e. vertical integration channel conflict a product development strategy draining resources without providing any direct return on investment dynamic pricing
Answer: b Page: 400 Rationale: A recurring issue for manufacturers is the threat of channel conflicts and the potential harm to trade relationships with their retailing intermediaries. 18-106 PROMOTIONAL WEBSITE DEFINITION
A __________ website is designed to advertise a company's products and provide information on how items can be used and where they can be purchased. a. b. c. d. e. marketing choiceboard convenient transactional promotional
Answer: e Page: 400 Rationale: Text term definitionpromotional website
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18-107 PROMOTIONAL WEBSITE
APPLICATION
Proctor and Gamble maintains separate websites for its leading brands to generate interest in and trial of its products and services, however the products must be purchased at a participating retailer. Proctor and Gamble uses a(n) ___________ website: a. b. c. d. e. bot promotional transactional investor employee
Answer: b Page: 400 Rationale: A promotional website is designed to advertise a company's products and provide information on how items can be used and where they can be purchased. 18-108 PROMOTIONAL WEBSITE APPLICATION
OceanSpray.com has a website that describes the company's products. The website also includes nutritional information and recipes featuring Ocean Spray products. Since Ocean Spray products are available at nearly all supermarkets, there was no need to include dealer information. Ocean Spray uses a(n) __________ website. a. b. c. d. e. viral transactional permission-based promotional product
Answer: d Page: 400 Rationale: A promotional website is designed to promote a company's products and services and provide information on how items can be used and where they can be purchased. 18-109 TRANSACTIONAL & PROMOTIONAL WEBSITES CONCEPTUAL
The principal difference between the two major types of websites is that promotional websites are designed to __________ while transactional websites are designed to __________. a. b. c. d. e. promote a company's products and services; convert online browsers into online buyers convert online browsers into online buyers; promote a company's products and services provide information about a company; move consumers closer to a purchase move consumers closer to a purchase; provide information about a company create portals; act as bots
Answer: a Page: 400 Rationale: A promotional website is designed to promote a company's products and services and provide information on how items can be used and where they can be purchased. Transactional websites are essentially electronic storefronts. They focus mainly on converting an online browser into an online, catalog, or in-store buyer using the website design elements.
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18-110 PROMOTIONAL WEBSITE
CONCEPTUAL
Promotional websites generate interest in and trial of a company's products and services by: a. b. c. d. e. providing access to human service representatives to assist in making purchases. accommodating interactive communication initiated by a company's employees, investors, and suppliers. converting online browsers into online buyers. providing information on how items can be used and where they can be purchased. obtaining information on customer preferences and buying habits.
Answer: d Page: 400 Rationale: A promotional website generates interest in and trial of a company's products and services by providing information on how items can be used and where they can be purchased. 18-111 PROMOTIONAL WEBSITE APPLICATION
General Motors reported 70 percent of the people visiting a Saturn store first visited the brand's __________ website at www.saturn.com. a. b. c. d. e. portal convenient employee transactional promotional
Answer: e Page: 401 Other Location: web Rationale: Saturn.com is a promotional website that is designed to generate interest in and trial of Saturns products and services. The fact that 70 percent of people visiting a Saturn store first visited the website indicates the brand's promotional website is very effective in achieving this goal. 18-112 PROMOTIONAL WEBSITE APPLICATION
Oster makes small kitchen appliances. Its website describes its productsespecially its newest raspberry blue line. The __________ website also has cooking and entertainment suggestions and where Oster products can be purchased. a. b. c. d. e. portal supplier employee transactional promotional
Answer: e Page: 400 Other Location: web Rationale: A promotional website generates interest in and trial of a company's products and services by providing information on how items can be used and where they can be purchased.
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18-113 VIDEO CASE: AOL The essence of AOL's growth strategy is to be the: a. b. c. d. e. cheapest Internet online service. easiest and most convenient Internet online service provider. only Internet online service provider. largest Internet online service provider. most profitable Internet online service provider.
CONCEPTUAL
Answer: b Page: 403 Rationale: The essence of AOL's growth strategy is stated specifically in its mission to become the worlds most respected and valued company by connecting, informing, and entertaining people everywhere in innovative ways that will enrich their lives. Its growth strategy is to be the easiest and most convenient Internet online service. 18-114 VIDEO CASE: AOL APPLICATION
AOL's realization of the importance of portals to online consumers reflects a concern with: a. b. c. d. e. choice. control. communication convenience. continuity
Answer: d Page: 403 Rationale: AOL has become the convenient tool that, according to VP of commerce strategy, Wendy Brown, people use to be able to manage their lives, stay in touch with others, buy things, and learn.
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CHAPTER 18 IMPLEMENTING INTERACTIVE AND MULTICHANNEL MARKETING SHORT ESSAY QUESTIONS

18-115 MARKETSPACE What is the marketspace? How has its creation helped consumers? Answer: The marketspace is an Internet/Web-enabled digital environment characterized by face to screen exchange relationships and electronic images and offerings. To answer the second part of the question, students will need to refer to the six reasons why consumers shop and buy online greater convenience, lower costs, more choices, greater control over when and where shopping occurs, ability to customize products, and communications with sellers and other consumers. Page: 388-389 18-116 E-COMMERCE AND CUSTOMER VALUE CREATION Explain the four ways the marketspace creates value for customers.. Answer: The marketspace creates customer value by contributing to time, place, form, and possession utility. Time and place utility are enhanced because there are no geographical constraints in the marketspace and virtual stores are always open for business. Electronic commerce enhances possession utility by getting products and services to customers faster and more easily. Finally, the interactive two-way communication capabilities of electronic commerce enhance form utility because consumers can tell marketers exactly what they want and marketers can customize product/service offerings to fit the customer's exact needs. Page: 388 18-117 INTERACTIVITY AND INDIVIDUALITY CONCEPTUAL CONCEPTUAL CONCEPTUAL
What two unique capabilities of Internet/Web technology promote and sustain customer relationships. How is this accomplished? Answer: One is interactivity; the other is individuality. Both capabilities are important building blocks for buyer-seller relationships. For these relationships to occur, companies need to interact with their customers by listening and responding to their needs. Marketers must also treat customers as individuals and empower them to (1) influence the timing and extent of the buyerseller interaction and (2) have a say in the kind of products and services they buy, the information they receive, and in some cases, the prices they pay. Page: 389
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18-118 INTERACTIVE MARKETING
DEFINITION
What is interactive marketing? Be sure to discuss choiceboards and personalization systems in your answer. Answer: Interactive marketing involves two-way buyerseller electronic communication in a computermediated environment in which the buyer controls the kind and amount of information received from the seller. Interactive marketing today is characterized by sophisticated choiceboard and personalization systems that transform information supplied by customers into customized responses to their individual needs. A choice board is an interactive, Internet/Web-enabled system that allows individual customers to design their own products and services by answering a few questions and choosing from a menu of product or service attributes, prices, and delivery options. Dell Computer uses this system. Personalization is the consumer-initiated practice of generating content on a marketers website that is custom tailored to an individuals specific needs and preferences. Page: 390-391 18-119 CUSTOMER EXPERIENCE DEFINITION
Define the customer experience from an interactive marketing perspective. List the seven design elements that companies use to produce a customer experience. Which two of these design elements provide a platform for the other five? Answer: Customer experience is defined as the sum total of interactions a customer has with a company's website, from the initial look at the homepage though the entire purchase process. The seven design elements are content, context, commerce, customization, connection, communication, and community. Content and context elements provide a platform for the other five. Page: 391-392 18-120 ONLINE CONSUMER PROFILE CONCEPTUAL
What three characteristics of online consumers make them an attractive market? Answer: As a group, online consumers tend to be better educated, younger, and more affluent than the general population. These characteristics make them an attractive market for electronic commerce. Page: 394
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CONCEPTUAL
The greatest marketspace opportunity for marketers lies in its potential for creating form utility. Explain how form utility contributes to customer value through communication, customization, and choice. Answer: The marketspace allows marketers to enhance form utility because interactive two-way Internet/Web-based communication capabilities in marketspace invite consumers to tell marketers exactly what their requirements are, making customization of a product or service to fit the buyer's exact needs possible. This means the customer can choose from a selection of offerings that is free of unwanted items. Page: 394 18-122 ONLINE CONSUMER BUYING APPLICATION
Explain why books, travel reservations, media, travel reservations, clothing and insurance are often bought on the web. Answer: There are six general product and service categories that dominate online consumer buying: (1) items for which product information is an important part of the purchase decision but prepurchase trial is not necessarily critical (books would be in this category); (2) items for which audio or video demonstration is important (CDs and videos belong here); (3) items that can be delivered digitally (travel reservations); (4) unique items such as collectibles, specialty goods (designer clothes); (5) items that are regularly purchased and where convenience is very important; and (6) items that are highly standardized products and services for which information about price is important (insurance and casual apparel). Page: 395 18-123 WHY CONSUMERS SHOP AND BUY ONLINE DEFINITION
Consumers typically refer to six reasons why they shop and buy online. List each. Answer: Convenience, choice, customization, communication, cost, and control. Page: 395; Figure 18-4
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18-124 WEB COMMUNITIES
CONCEPTUAL
Explain what web communities are and why marketers would want to develop them on company websites. Answer: Web communities are websites that allow people to meet online and exchange views on topics of common interest. Marketers would want to develop these communities, perhaps through chat rooms on company websites as one means of generating buzz or word-of-mouth electronic discussion about its products. Page: 396 18-125 COOKIE APPLICATION
When John subscribed to a financial news publication online, the company told him that as a service it would be creating a cookie. Explain what the online publication did. Answer: Cookies are computer files that a marketer can download onto the computer of an online consumer who visits the marketer's website. In other words, the online publication will store his personal information on a cookie, and the subscriber will not have to re-enter the information to confirm a subscription every time the website is visited. Page: 398 18-126 ETHICS AND SOCIAL RESPONSIBILITY ALERT CONCEPTUAL
Explain why a majority of online consumers are concerned about privacy and security issues. Answer: Cookies are the source of consumer concern. These computer files allow marketers to obtain personal information about an online consumer's search and purchase behavior on the Internet. Although this information is ideally used to increase customer value, especially through customization, consumers fear the information may be used inappropriately or disclosed to others without their knowledge or permission, constituting a violation of consumer privacy. Page: 398 18-127 MULTICHANNEL MARKETING DEFINITION
How does multichannel marketing differ from integrated marketing communications? Answer: Multichannel marketing is the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building customer relationships. Students should be able to remember that IMC is as its name statesan integration of all the promotional elements a seller uses to communicate with a buyer. Page: 399
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18-128 TRANSACTIONAL & PROMOTIONAL WEBSITES How are transactional and promotional websites different?
DEFINITION
Answer: Transactional websites are essentially electronic storefronts. They focus primarily on converting an online browser into an online, catalog, on in-store buyer using the web design elements. Transactional websites are most common among stores and catalog retailers and direct selling companies. Promotional websites have a very different purpose than transactional websites. Promotional websites are designed to advertise and promote a company's goods and services and provide information on how items can be used and where they can be purchased. Promotional websites can also be used to support a company's traditional marketing channel and build customer relationships. Page: 400-401 18-129 TRANSACTIONAL WEBSITES CONCEPTUAL
Describe two potential problems associated with transactional websites. Why do manufacturers continue to use transactional websites in spite of the problems? Answer: The first problem is the potential for the online retailer to cannibalize sales for its bricks-andmortar stores. Research indicates this fear is unfounded. Many consumers visit the websites to gain information before shopping at the traditional outlets. The second potential problem is the threat of channel conflict and the possible harm it will do to channel relationships. One method used to counter this problem is to use the transactional websites in cooperation with retail websites. For example, the order can be placed at the website, but it has to be picked up at a traditional retail outlet--thus, creating store traffic. Page: 400 18-130 VIDEO CASE: AOL APPLICATION
What are the control issues facing AOL's Shopping Channel and other online retailers in the future? Answer: Online consumers want to control the personal and financial data that are gathered during an online visit or transaction. They want to know whether their information is safeguarded, how it is used by e-tailers, and whether it is disclosed to other organizations for marketing purposes. Consumers also want the ability to restrict access to morally objectionable websites and chat rooms, to avoid messages from spammers, and to protect their computers from viruses. Page: 405
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Chapter 18 IMPLEMENTING INTERACTIVE AND MULTICHANNEL MARKETING Test Item Table

6, 7, 8, 10, 14, 16, 115, 116, 117

96, 98, 99, 105, 106, 127, 128

97, 101, 102, 103, 107, 108, 111, 112,

CHAPTER 18 IMPLEMENTING INTERACTIVE AND MULTICHANNEL MARKETING MULTIPLE CHOICE QUESTIONS

18-9 CUSTOMER VALUE CREATION IN MARKETSPACE

18-11 CUSTOMER VALUE CREATION IN MARKETSPACE

18-13 INTERACTIVITY AND INDIVIDUALITY

18-15 INTERACTIVE MARKETING

Answer: a Page: 389 Rationale: Key term definitioninteractive marketing

Answer: c Page: 390 Rationale: Key term definitioncollaborative filtering

18-21 COLLABORATIVE FILTERING

Answer: a Page: 391 Rationale: Key term definitionpersonalization

18-27 PERMISSION MARKETING

18-29 PERMISSION MARKETING

18-31 CUSTOMER EXPERIENCE

Answer: b Page: 391; Figure 18-2 Rationale: Text term definitioncontext

Answer: b Page: 391; Figure 18-2 Rationale: Text term definitioncustomization

18-37 CONNECTION In terms of the customer experience, connection is defined as the: a. b. c. d. e.

Answer: d Page: 392; Figure 18-2 Rationale: Text term definitioncommerce

18-46 CUSTOMER EXPERIENCE

18-49 ONLINE CONSUMERS

18-52 ONLINE CONSUMER PURCHASING BEHAVIOR

18-54 ONLINE CONSUMER PURCHASING BEHAVIOR

18-57 ONLINE CONSUMER PURCHASING BEHAVIOR

Answer: c Page: 396 Rationale: Text term definitioncustomization

18-68 ONLINE CONSUMER PURCHASING BEHAVIOR

18-70 WEB COMMUNITIES

Answer: c Page: 397 Rationale: Key term definitionviral marketing

18-76 VIRAL MARKETING

18-79 DYNAMIC PRICING

18-83 ONLINE CONSUMER PURCHASING BEHAVIOR

18-95 ONLINE CONSUMER SHOPPING BEHAVIOR

18-101 TRANSACTIONAL WEBSITE

18-104 TRANSACTIONAL WEBSITE

Answer: e Page: 400 Rationale: Text term definitionpromotional website

18-107 PROMOTIONAL WEBSITE

18-110 PROMOTIONAL WEBSITE

CHAPTER 18 IMPLEMENTING INTERACTIVE AND MULTICHANNEL MARKETING SHORT ESSAY QUESTIONS

18-118 INTERACTIVE MARKETING

18-121 ONLINE CONSUMER PURCHASING BEHAVIOR

18-124 WEB COMMUNITIES

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