Management Information Systems: Managing the Digital Firm, 11e (Laudon/Laudon) Chapter 10 E-Commerce: Digital Markets, Digital

Goods 1) E-commerce refers to the use of any networking technologies to transact business. Answer: FALSE Diff: 2 Page Ref: 375 AACSB: Reflective thinking skills CASE: Content Objective: 10.3 2) Retail consumer e-commerce is still growing at single-digit rates. Answer: FALSE Diff: 3 Page Ref: 375 AACSB: Reflective thinking skills CASE: Content Objective: 10.3 3) The Internet shrinks information asymmetry. Answer: TRUE Diff: 2 Page Ref: 380 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 4) Information asymmetry exists when one party in a transaction has more information for the transaction than the other party. Answer: TRUE Diff: 1 Page Ref: 380 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 5) All previous mass media in modern history, including the printing press, use a broadcast model where content is created in a central location by experts. Answer: TRUE Diff: 2 Page Ref: 380 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 6) Disintermediation provides major benefits to the distributor. Answer: FALSE Diff: 2 Page Ref: 383 AACSB: Analytic skills CASE: Evaluation Objective: 10.1

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7) In general, for digital goods, the marginal cost of producing another unit is about zero. Answer: TRUE Diff: 2 Page Ref: 383 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 8) An information broker provides product, pricing, and availability information to individuals and businesses and generates revenue from advertising or from directing buyers to sellers. Answer: TRUE Diff: 2 Page Ref: 385 AACSB: Reflective thinking skills CASE: Content Objective: 10.2 9) A banner ad opens a new window automatically and does not disappear until the user clicks on it. Answer: FALSE Diff: 1 Page Ref: 386 AACSB: Reflective thinking skills CASE: Content Objective: 10.2 10) Podcasting allows subscribers to listen to live, streaming radio and other audio content. Answer: FALSE Diff: 1 Page Ref: 387 AACSB: Analytic skills CASE: Analysis Objective: 10.2 11) An online syndicator aggregates content or applications from multiple sources, packaging them for distribution, and reselling them to third-party Web sites. Answer: TRUE Diff: 2 Page Ref: 387 AACSB: Reflective thinking skills CASE: Content Objective: 10.2 12) Web sites can gather bountiful detailed information about customer behavior and demographics. Answer: TRUE Diff: 1 Page Ref: 391 AACSB: Reflective thinking skills CASE: Content Objective: 10.1

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Answer: FALSE Diff: 2 Page Ref: 394 AACSB: Use of information technology CASE: Content Objective: 10.3 18) Exchanges proliferated during the early years of e-commerce. but many have failed. Answer: FALSE Diff: 2 Page Ref: 394 AACSB: Reflective thinking skills CASE: Content Objective: 10. Publishing as Prentice Hall .2 15) EDI standards that take advantage of network communications have yet to be fully implemented at the industry level.3 3 Copyright © 2010 Pearson Education.com uses Web personalization as a major marketing tool. Answer: FALSE Diff: 1 Page Ref: 391 AACSB: Reflective thinking skills CASE: Content Objective: 10.13) Companies rarely use Web pages to analyze customer information.1 14) Amazon.3 17) Some Net marketplaces support contractual purchasing based on long-term relationships with designated suppliers. Answer: TRUE Diff: 3 Page Ref: 396 AACSB: Reflective thinking skills CASE: Content Objective: 10. Answer: FALSE Diff: 3 Page Ref: 397 AACSB: Reflective thinking skills CASE: Content Objective: 10.4 16) Web sites cannot currently provide customers with call center interaction. Answer: TRUE Diff: 3 Page Ref: 392 AACSB: Reflective thinking skills CASE: Content Objective: 10. in part because they encouraged competitive bidding that drove prices down. Inc.

C) have returned to solid growth. D) have returned to exponential growth. Answer: FALSE Diff: 1 Page Ref: 399 AACSB: Reflective thinking skills CASE: Content Objective: 10. Inc.3 20) Accumulated balance digital payment systems allow consumers to make instant online payments to merchants and other individuals based on stored value in a digital account. Publishing as Prentice Hall . Answer: TRUE Diff: 2 Page Ref: 397 AACSB: Analytic skills CASE: Analysis Objective: 10.19) Automobile manufacturing is an example of a vertical market. Answer: C Diff: 2 Page Ref: 376 AACSB: Reflective thinking skills CASE: Content Objective: 10. e-commerce revenues: A) have essentially stagnated.1 4 Copyright © 2010 Pearson Education. B) show signs of stabilizing.1 22) Since the dot-com bubble burst of 2001.5 21) Through what channel did e-commerce first evolve? A) online advertising sales B) internet portals C) online book sales D) Internet service providers Answer: A Diff: 3 Page Ref: 375 AACSB: Reflective thinking skills CASE: Content Objective: 10.

C) not yet fully accepted by consumers. cheap information. B) marketspace.23) Based on your reading of the chapter. D) the availability of Internet technology everywhere and anytime. Inc. although much of its driving technology is firmly in place. Answer: B Diff: 2 Page Ref: 376 AACSB: Reflective thinking skills CASE: Content Objective: 10. D) e-hub.1 25) A marketplace extended beyond traditional boundaries and removed from a temporal and geographic location is called a(n) A) exchange. C) online marketplace. B) plentiful. B) widely accepted by consumers. e-commerce is A) still in a revolutionary phase. Answer: D Diff: 2 Page Ref: 376 AACSB: Reflective thinking skills CASE: Content Objective: 10. Publishing as Prentice Hall . C) the enabling of commerce worldwide.1 5 Copyright © 2010 Pearson Education. D) well entrenched as a form of modern commerce.1 24) The quality of ubiquity. as it relates to e-commerce.NET and Web services D) dropping of computing hardware prices Answer: C Diff: 3 Page Ref: 377 AACSB: Reflective thinking skills CASE: Content Objective: 10. Answer: A Diff: 2 Page Ref: 376 AACSB: Analytic skills CASE: Evaluation Objective: 10. although technology is still quickly changing. is illustrated by A) the same set of standards being used across the globe.1 26) Which development is helping expand B2B e-commerce opportunities? A) intranets B) HTTP C) .

interactive models for newspapers and other traditional media C) use of blogs as a commercial medium D) transformation of the music recording industry Answer: D Diff: 3 Page Ref: 377 AACSB: Reflective thinking skills CASE: Content Objective: 10. are emerging.2 29) Which of the following is NOT one of the unique features of e-commerce technology? A) information density B) transparency C) richness D) social technology Answer: B Diff: 2 Page Ref: 378 AACSB: Reflective thinking skills CASE: Content Objective: 10.27) Which of the following is NOT a recent development in e-commerce? A) growth of wireless Internet connections B) online. Publishing as Prentice Hall . B) Technology players such as Yahoo! seek to dominate online advertising. D) The market entry costs for online advertising services are extremely low. Answer: B Diff: 3 Page Ref: 377 AACSB: Analytic skills CASE: Evaluation Objective: 10. such as blog advertising.1 28) How is the Internet and e-commerce causing severe disruption to the existing advertising business model? A) Ties between customer and businesses are being rethought. C) New methods of advertising. Inc.1 30) The act of engaging consumers in a dialog that dynamically adjusts the experience to the individual describes which dimension of e-commerce technology? A) ubiquity B) personalization/customization C) richness D) interactivity Answer: D Diff: 2 Page Ref: 379 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 6 Copyright © 2010 Pearson Education.

B) search costs.1 32) The effort required to locate a suitable product is called A) price discrimination. audio. and text marketing messages into a single marketing message and consumer experience describes which dimension of e-commerce technology? A) ubiquity B) personalization/customization C) richness D) interactivity Answer: C Diff: 2 Page Ref: 378 AACSB: Reflective thinking skills CASE: Content Objective: 10.31) The integration of video. B) total amount and quantity of information delivered to consumers by merchants. and communication. D) transparency costs.1 34) Information density refers to the A) richnesscomplexity and contentof a message.1 7 Copyright © 2010 Pearson Education. C) total amount and quantity of information available to all market participants.1 33) The lowered costs of information storage. along with the improvement of data quality has resulted in which unique quality of e-commerce? A) information density B) richness C) customization D) interactivity Answer: A Diff: 2 Page Ref: 379 AACSB: Reflective thinking skills CASE: Content Objective: 10. D) amount of information available to reduce price transparency. Inc. Answer: C Diff: 2 Page Ref: 379 AACSB: Reflective thinking skills CASE: Content Objective: 10. C) menu costs. Publishing as Prentice Hall . processing. Answer: B Diff: 2 Page Ref: 378 AACSB: Reflective thinking skills CASE: Content Objective: 10.

35) Selling the same goods to different targeted groups at different prices is called price ________. A) menu B) flexible C) dynamic D) asymmetric Answer: C Diff: 2 Page Ref: 382 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 38) Varying a product's price according to the supply situation of the seller is called ________ pricing. A) customization B) opacity C) gouging D) discrimination Answer: D Diff: 1 Page Ref: 379 AACSB: Reflective thinking skills CASE: Content Objective: 10. A) transparency B) asymmetry C) complexity D) imbalance Answer: B Diff: 1 Page Ref: 380 AACSB: Reflective thinking skills CASE: Content Objective: 10. Inc. Publishing as Prentice Hall .1 8 Copyright © 2010 Pearson Education. A) pricing B) dynamic pricing C) menu D) switching Answer: C Diff: 2 Page Ref: 380-382 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 36) Information ________ exists when one party in a transaction has more information that is important for the transaction than the other party.1 37) The cost to a merchant of changing the price of a product is called a ________ cost.

39) Compared to digital markets. Publishing as Prentice Hall . C) higher delayed gratification effects. D) network effects. Answer: A Diff: 2 Page Ref: 383 AACSB: Reflective thinking skills CASE: Content Objective: 10. B) sold over digital networks. B) BPR. Answer: C Diff: 2 Page Ref: 383 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 40) Reducing the business process layers in a distribution channel is called A) disintermediation. digital goods have A) greater pricing flexibility.1 9 Copyright © 2010 Pearson Education.1 41) Digital goods are goods that are A) produced digitally. C) delivered digitally. C) higher production costs. D) used with digital equipment. B) lower marketing costs. D) higher transaction costs. D) higher inventory costs.2 42) Compared to traditional goods. C) market segmentation. Answer: D Diff: 3 Page Ref: 382 AACSB: Reflective thinking skills CASE: Content Objective: 10. traditional markets have A) lower search costs. Inc. Answer: A Diff: 3 Page Ref: 383 AACSB: Reflective thinking skills CASE: Content Objective: 10. B) stronger network effects.

com C) CNN. B) save users money and time by processing online sales dealings.1 44) Which of the following Internet business models does Amazon. D) sell physical products directly to consumers or individual businesses.2 45) Which of the following businesses utilizes the content provider Internet business model? A) Amazon.com Answer: C Diff: 2 Page Ref: 385 AACSB: Analytic skills CASE: Analysis Objective: 10. C) equivalent copying costs. B) higher marginal costs per unit. Answer: A Diff: 3 Page Ref: 384 AACSB: Reflective thinking skills CASE: Content Objective: 10.com B) eBay. Answer: B Diff: 1 Page Ref: 385 AACSB: Reflective thinking skills CASE: Content Objective: 10.2 10 Copyright © 2010 Pearson Education.com D) Motocross.43) Compared to traditional markets. D) similar inventory costs. Publishing as Prentice Hall . digital markets have A) lower distributed delivery costs.com use? A) information broker B) transaction broker C) online service provider D) virtual storefront Answer: D Diff: 2 Page Ref: 385 AACSB: Analytic skills CASE: Analysis Objective: 10. Inc. C) provide a digital environment where buyers and sellers can establish prices for products.2 46) Transaction brokers A) generate revenue from advertising or from directing buyers to sellers.

B) provide a digital environment where buyers and sellers can establish prices for products. Inc.47) Online marketplaces A) save users money and time by processing online sales dealings. D) sell physical products directly to consumers or individual businesses.2 11 Copyright © 2010 Pearson Education.2 49) Why are companies interested in setting up MySpace profiles for their products? A) to bypass broadcast regulations for advertising to children B) to gather data on MySpace users linking to them C) to take advantage of free advertising D) to create personal relationships with consumers Answer: A Diff: 2 Page Ref: 386 AACSB: Analytic skills CASE: Evaluation Objective: 10.2 48) Which of the following is an ad that opens automatically and does not disappear until the user clicks on it? A) pop-up ad B) controlled ad C) portal ad D) banner ad Answer: A Diff: 1 Page Ref: 386 AACSB: Reflective thinking skills CASE: Content Objective: 10.2 50) Which Internet business model is Photobucket most closely aligned with? A) service provider B) content provider C) portal D) social network Answer: A Diff: 3 Page Ref: 387 AACSB: Analytic skills CASE: Analysis Objective: 10. C) create revenue by providing digital content over the Web. Publishing as Prentice Hall . Answer: B Diff: 2 Page Ref: 385 AACSB: Reflective thinking skills CASE: Content Objective: 10.

B) do not sell a physical product. Answer: B Diff: 2 Page Ref: 388 AACSB: Analytic skills CASE: Analysis Objective: 10. D) an online exchange. D) B2C electronic commerce. Answer: D Diff: 1 Page Ref: 388 AACSB: Reflective thinking skills CASE: Content Objective: 10. C) M-commerce.51) A "supersite" that provides a comprehensive entry point for a huge array of Internet resources and services is called a(n): A) portal. Inc. B) C2C electronic commerce. B) online syndicator. Answer: D Diff: 2 Page Ref: 387-388 AACSB: Reflective thinking skills CASE: Evaluation Objective: 10. C) B2C electronic commerce. C) content provider. D) information broker. D) did not have an earlier existing bricks-and-mortar business before they went to the Internet. Answer: A Diff: 2 Page Ref: 387 AACSB: Reflective thinking skills CASE: Content Objective: 10.3 12 Copyright © 2010 Pearson Education.2 53) eBay is an example of A) a click-and-mortar business.3 54) Businesses retailing products and services directly via the Internet to individual consumers best describes A) B2B electronic commerce. C) are extensions of traditional bricks-and-mortar businesses. Publishing as Prentice Hall . B) C2C electronic commerce.2 52) Pure-play businesses A) are an example of business-to-business electronic commerce.

3 56) Which Internet business model is JR. Answer: B Diff: 1 Page Ref: 388 AACSB: Reflective thinking skills CASE: Content Objective: 10. A) clickstream tracking B) customer tracking C) collaborative filtering D) filtering Answer: A Diff: 2 Page Ref: 391 AACSB: Use of information technology CASE: Content Objective: 10. Publishing as Prentice Hall . Answer: B Diff: 2 Page Ref: 392 AACSB: Reflective thinking skills CASE: Content Objective: 10. Inc.2 57) Tools that record customer activities at Web sites and store them in a log for further analysis are called ________ tools. B) C2C electronic commerce.55) Consumers selling goods and services electronically to other consumers best describes: A) disintermediation.com most closely aligned with? A) virtual storefront B) exchange C) transaction broker D) online marketplace Answer: A Diff: 1 Page Ref: 389 AACSB: Analytic skills CASE: Analysis Objective: 10. D) twitters.3 13 Copyright © 2010 Pearson Education. D) B2C electronic commerce.3 58) A blog is typically composed of a series of A) blogrolls. B) dated entries. C) trackbacks. C) M-commerce.

D) sales department. A) clickstream tracking B) customer tracking C) collaborative filtering D) filtering Answer: C Diff: 2 Page Ref: 392 AACSB: Reflective thinking skills CASE: Content Objective: 10.3 60) What strategy was implemented by Stonyfield Farm in its use of blogs? A) low-cost leadership B) product differentiation C) focus on market niche D) strengthen customer and supplier intimacy Answer: D Diff: 3 Page Ref: 393 AACSB: Analytic skills CASE: Analysis Objective: 10.59) Tools that compare user behavior and interests to make purchasing recommendations to users are called ________ tools.3 61) The organizational department responsible for handling customer service issues is the A) service center.3 62) EDI is A) the use of Internet technologies for electronic data transactions. C) call center. B) customer support department.3 14 Copyright © 2010 Pearson Education. Answer: C Diff: 2 Page Ref: 394 AACSB: Use of information technology CASE: Content Objective: 10. C) electronic data invoicing. D) electronic delivery infrastructure. B) the exchange between two organizations of standard transactions through a network. Answer: B Diff: 2 Page Ref: 394 AACSB: Use of information technology CASE: Content Objective: 10. Publishing as Prentice Hall . Inc.

D) exchange. and making delivery arrangements is called A) procurement. B) e-hub. C) supply chain management.63) The process of sourcing goods and materials. B) are industry owned or operate as independent intermediaries between buyers and sellers. C) marketspace. A) transaction-oriented B) collaborative C) independent D) supply-chain oriented Answer: A Diff: 3 Page Ref: 396 AACSB: Analytic skills CASE: Evaluation Objective: 10.3 64) An extranet that links a large firm to its suppliers and other key business partners is called a(n) A) private industrial network. negotiating with suppliers.3 65) E-hubs are more ________ than private industrial networks.3 15 Copyright © 2010 Pearson Education. D) electronic commerce. C) are geared towards short-term spot purchasing. Answer: B Diff: 3 Page Ref: 396 AACSB: Reflective thinking skills CASE: Content Objective: 10. Publishing as Prentice Hall . Answer: A Diff: 2 Page Ref: 394-395 AACSB: Reflective thinking skills CASE: Content Objective: 10. Inc. D) are more relationship oriented than private industrial networks. Answer: A Diff: 2 Page Ref: 395 AACSB: Use of information technology CASE: Content Objective: 10.3 66) Net marketplaces A) focus on continuous business process coordination between companies for supply chain management. B) e-procurement. paying for goods.

C) represents a major fraction of total e-commerce transactions.4 16 Copyright © 2010 Pearson Education. C) private exchange. Answer: A Diff: 2 Page Ref: 397 AACSB: Reflective thinking skills CASE: Content Objective: 10. m-commerce A) has become widely adopted. Inc. D) is growing. D) e-hub. Publishing as Prentice Hall . B) vertical market. due to the emergence of 2G networks Answer: B Diff: 2 Page Ref: 397 AACSB: Reflective thinking skills CASE: Content Objective: 10.3 68) Which of the following is NOT one of the categories of services that are popular for mcommerce? A) location-based services B) financial services C) games and entertainment D) e-books Answer: D Diff: 1 Page Ref: 397-399 AACSB: Analytic skills CASE: Evaluation Objective: 10.67) A third-party Net marketplace that connects many buyers and suppliers for spot purchasing is called a(n) A) exchange.4 69) In the United States. B) is still in its infancy.

5 71) The ubiquity of the Internet reduces the costs of participating in a market. Answer: Menu costs Diff: 2 Page Ref: 380 AACSB: Reflective thinking skills CASE: Content Objective: 10. Answer: D Diff: 2 Page Ref: 400-401 AACSB: Reflective thinking skills CASE: Content Objective: 10. B) The cell phone in the United States is not connected to a wide network of financial institutions.1 73) ________ are the merchants' costs of changing prices. containing a variety of payment mechanisms.1 74) A(n) ________ provides an online meeting place where people with similar interests can communicate and find useful information. Answer: Cost transparency Diff: 2 Page Ref: 379 AACSB: Reflective thinking skills CASE: Content Objective: 10.70) Which of the following statements about m-commerce payments is NOT true? A) Use of mobile handsets as payment devices is already well established in Europe. Answer: social network Diff: 2 Page Ref: 385 AACSB: Reflective thinking skills CASE: Content Objective: 10. and South Korea. Inc. C) Japanese cell phones act like mobile wallets. and digital wallets. Answer: transaction Diff: 2 Page Ref: 376 AACSB: Reflective thinking skills CASE: Content Objective: 10. D) The three kinds of mobile payments systems used in Japan are mobile credit cards.1 72) ________ refers to the ability of consumers to discover what merchants actually pay for products. mobile debit cards. Japan. Publishing as Prentice Hall . These costs are called ________ costs.2 17 Copyright © 2010 Pearson Education.

Answer: digital wallet Diff: 2 Page Ref: 399 AACSB: Reflective thinking skills CASE: Content Objective: 10.5 78) Wireless ________ feature content and services optimized for mobile devices to steer users to the information they are most likely to need. Answer: clicks-and-mortar Diff: 1 Page Ref: 388 AACSB: Reflective thinking skills CASE: Content Objective: 10.5 18 Copyright © 2010 Pearson Education.2 76) A(n) ________ is another term for a private industrial network. Answer: private exchange Diff: 2 Page Ref: 396 AACSB: Reflective thinking skills CASE: Content Objective: 10. Answer: digital checking Diff: 2 Page Ref: 400 AACSB: Reflective thinking skills CASE: Content Objective: 10. Inc. Publishing as Prentice Hall .75) A(n) ________ business model has the Web site as an extension of a traditional bricks-andmortar business.5 80) A(n) ________ system extends the functionality of existing checking accounts so they can be used for online shopping payments.3 77) A(n) ________ stores credit card and owner identification information and provides these data automatically during electronic commerce purchase transactions. Answer: stored value Diff: 2 Page Ref: 400 AACSB: Reflective thinking skills CASE: Content Objective: 10. Answer: portals Diff: 1 Page Ref: 399 AACSB: Reflective thinking skills CASE: Content Objective: 10.4 79) A(n) ________ payment system enables a consumer to make instant online payments based on the amount of money they have in a digital account.

online marketplace. online service provider. and portal.S. content provider. Inc. Diff: 2 Page Ref: 375-388 AACSB: Analytic skills CASE: Evaluation Objective: 10. Only the auto dealers knew the manufacturers' prices. For example.81) What is the most profound way in which e-commerce and the Internet has changed the relationship between companies and their customers? Support your answer. Today's consumers have access to a legion of Web sites providing competitive pricing information. virtual community. and it was difficult for consumers to shop around for the best price. information broker. Thus. there was a pronounced information asymmetry between auto dealers and customers. auto buyers use the Internet to shop around for the best deal. The choice of riskiest model will depend on the individual student. Auto dealers' profit margins depended on this asymmetry of information. the Web has reduced the information asymmetry surrounding an auto purchase. Answer: The eight models are: virtual storefront. Which of these models do you think is the most risky for a dot-com business? Support your answer. Diff: 1 Page Ref: 384-388 AACSB: Analytic skills CASE: Evaluation Objective: 10. In digital markets. and in that sense digital markets are said to be more "transparent" than traditional markets. and three-fourths of U. That information helps determine their relative bargaining power.2 19 Copyright © 2010 Pearson Education. transaction broker. consumers and suppliers can "see" the prices being charged for goods. one answer is: The most profound way in which e-commerce and the Internet has changed this relationship is in the shrinking of information asymmetry. The Internet has also helped businesses seeking to purchase from other businesses reduce information asymmetries and locate better prices and terms. Publishing as Prentice Hall . until auto retailing sites appeared on the Web. Answer: Answers will vary.1 82) List and describe at least five different Internet business models. An information asymmetry exists when one party in a transaction has more information that is important for the transaction than the other party.

once the concept of a wheel is established. interests. you may be able to shape what you see on television by selecting a channel. One answer might be: The exponential increases of knowledge refer to shared information." The Internet is a tool similar to the wheel: it is based on shared standards and universal tools. although early Internet retailers had difficulty setting up secure credit card transactions and payment systems. Diff: 2 Page Ref: 379-380. marketers achieve the benefits of using individual salespeople at dramatically lower costs. By using personalization technology to modify the Web pages presented to each customer. but you cannot change the content of the channel you have chosen. The Internet is fostering shared knowledge and as such propagating ever greater increases in that knowledge. and past purchases.1 20 Copyright © 2010 Pearson Education. For example. as you spend only the money to target customers that are more likely to be receptive and are more profitable. 391-392 AACSB: Analytic skills CASE: Synthesis Objective: 10. The result is a level of personalization and customization unthinkable with traditional commerce technologies. the Wall Street Journal Online allows you to select the type of news stories you want to see first and gives you the opportunity to be alerted when certain events happen. The technology also permits customization–changing the delivered product or service based on a user's preferences or prior behavior. The business value of personalization is reduced marketing costs. today there are many systems in place as vendors step in to create shared tools for doing this.83) "Knowledge increases exponentially" is a phrase with which we are all familiar. Customer information also enables firms to create unique personalized Web pages that display content or ads for products or services of special interest to each user. a great deal of information about the consumer's past purchases and behavior can be stored and used by online merchants. Diff: 3 Page Ref: 375-388 AACSB: Analytic skills CASE: Analysis Objective: 10. Inc. How does this concept apply to electronic business and the emergence of the digital firm? Support your contentions. which compares information gathered about a specific user's behavior at a Web site to data about other customers with similar interests to predict what the user would like to see next. Given the interactive nature of e-commerce technology. and improved sales results. The software then makes recommendations to users based on their assumed interests. The Internet and shared networking technologies are allowing new techniques for attracting customers and selling customers to be developed and adapted very quickly. In contrast. One technique for Web personalization is collaborative filtering. inheritors of that knowledge do not have to "reinvent the wheel.3 84) Describe the use of personalization in e-commerce. Publishing as Prentice Hall . improving the customer's experience and creating additional value. What business value does personalization have? Answer: E-commerce technologies permit personalization: Merchants can target their marketing messages to specific individuals by adjusting the message to a person's name. from increased customer response to personalized sites that better server their own purposes and shopping needs. For instance. For example. Answer: Student answers will vary.

and why? Answer: Advertising. Answer: The principal electronic payment systems for electronic commerce for the individual are credit card.5 86) List and describe the three major types of electronic commerce. selling collected marketing information.) Diff: 2 Page Ref: 388 AACSB: Analytic skills CASE: Evaluation Objective: 10.3 87) What methods could a portal use to generate revenue? Which do you think might be most successful. and directing buyers to sellers could all generate revenue. 387 AACSB: Analytic skills CASE: Evaluation Objective: 10. Diff: 2 Page Ref: 385. but in the long run. and consumer-to-consumer. of course. Which do you think is ultimately the most valuable to the individual consumer? Support your answer. Publishing as Prentice Hall . Most consumers use their credit card. are supportable. (Other opinions. peer-to-peer payment systems. subscriptions. the portal would have the opportunity to gather a lot of information about each user.2 21 Copyright © 2010 Pearson Education. digital wallet. because as a portal that links to large amounts of external information and attracts repeat customers. Inc. business-to-business may be the most valuable to the individual consumer because it will reduce prices and increase both goods and services. accumulated balance digital payment systems. digital cash. Answer: Business-to-consumer. Diff: 2 Page Ref: 399-400 AACSB: Analytic skills CASE: Analysis Objective: 10. business-to-business. and electronic checks. stored value systems. I would think the most successful method would be through collecting marketing information.85) List and describe five ways in which the individual consumer may pay for purchases on the Internet. All three are valuable to the consumer.

What ways can you use the Internet as a marketing tool and to advertise the firm's services? Answer: For market research. To advertise. Inc. you could create a juvenile justice portal and blog for the company in order to attract users whom you could gather market research as well as promote your services. You could pay for marketing research at relevant portals.3 22 Copyright © 2010 Pearson Education. 391-394 AACSB: Analytic skills CASE: Synthesis Objective: 10. similar to Mobil's SpeedPass payment system. Lucky's might be able to procure goods over the Internet.88) You are consulting for Lucky's. Lucky's could make sure that it's stations are listed in popular location-based mobile services that help drivers find nearby gas stations. there are not many opportunities. What types of e-commerce opportunities. so as to address these concerns in your advertising campaigns. In terms of B2C e-commerce. Additionally. a chain of gas stations. You could also collect customer information from the company's Web site. using banner ad or popup ads. if any. Diff: 3 Page Ref: 384-397 AACSB: Analytic skills CASE: Synthesis Objective: 10. However. If it were feasible. use a private industrial network to coordinate their supply chain with suppliers and manage inventory. is a way of offering more convenient services to customers. Publishing as Prentice Hall . Diff: 3 Page Ref: 384-387. you could advertise on search engines. industry net marketplaces and exchanges might be of use. are relevant to Lucky's? Could Lucky's make use of any Internet business models for this opportunity? Answer: In terms of B2B e-commerce.2 89) You have been hired as a marketing consultant by a law firm in Los Angeles that specializes in juvenile justice. as it is inefficient to sell gasoline over the Internet. you could advertise on search engine results and at relevant portals or legal information content providers. You could monitor relevant blogs to see what issues are of concern in juvenile justice. Depending on the structure of the gasoline retail business. a mobile payment system.

and even films designed for cell phone screens. Location-based services such as Mobio and Where enable users to locate nearby restaurants and gasoline stations. Citibank and Bank of America customers can use their cell phones to check account balances. and pay bills. Inc. When done right. Cell phone service providers who have information valuable to advertisers about where subscribers live. wireless advertising.4 23 Copyright © 2010 Pearson Education. Banks are rolling out services that let customers manage their bank accounts from their cell phones or other mobile devices. mobile campaigns yield high response rates and increased consumer engagement. Answer: Types of applications include location-based services. and other services they use on their phones. Diff: 2 Page Ref: 397-399 AACSB: Analytic skills CASE: Analysis Objective: 10. find local entertainment and movie times. music. Publishing as Prentice Hall . Games and entertainment are another popular area. ringtones.90) Describe four types of applications that are especially well-suited for m-commerce. digital games. their age. New York-based MeetMoi provides a dating service that helps users identify people who are nearby and looking for dates. providing maps showing how to reach their locations. and games and entertainment. transfer funds. with music. and call a cab. banking and financial services. their location the moment they view ads. and the games.

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