Ins260 - Testbank 10

Management Information Systems: Managing the Digital Firm, 15e (Laudon)
Chapter 10 E-Commerce: Digital Markets, Digital Goods
1) What event marked the beginning of e-commerce?

A) The first product sold online.
B) The first domain name registered.
C) The first e-mail sent.
D) The first paid advertisements placed on a website.
E) The first product advertised online.
Answer: D
2) All of the following are examples of "on demand" companies except:

A) Uber.
B) Airbnb.
C) Lyft.
D) Instacart.
E) Instagram.
Answer: E
3) A marketplace extended beyond traditional boundaries and removed from a temporal and
geographic location is called a(n):
A) exchange.
B) marketspace.
C) online marketplace.
D) e-hub.
E) net marketplace.
Answer: B
4) When did e-commerce begin?

A) 1965
B) 1983
C) 1995
D) 1999
E) 2000
Answer: C
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5) What standards are referred to when discussing universal standards as a unique feature of e-
commerce?
A) Internet technology standards
B) Common spoken and written languages
C) Universal measuring standards
D) Universal advertising and media format standards
E) EDI standards
Answer: A
6) All of the following are unique features of e-commerce technology, except:

A) personalization/customization.
B) interactivity.
C) transparency.
D) richness.
E) global reach.
Answer: C
7) Which of the following dimensions of e-commerce technology involves engaging consumers

in a dialog that dynamically adjusts the experience to the individual?
A) Ubiquity
B) Personalization/customization
C) Richness
D) Interactivity
E) Information density
Answer: D
8) Which of the following dimensions of e-commerce technology involves the integration of

video, audio, and text marketing messages into a single marketing message and consumer
experience?
A) Ubiquity
B) Personalization/customization
C) Richness
D) Interactivity
E) Social technology
Answer: C
9) Which of the following dimensions of e-commerce technology has the potential to raise the
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quality of information?
A) Information density
B) Richness
C) Customization
D) Interactivity
E) Global reach
Answer: A
10) The effort required to locate a suitable product is called:

A) price discrimination.
B) search costs.
C) menu costs.
D) shopping costs.
E) location costs.
Answer: B
11) Information density refers to the:

A) richness—complexity and content—of a message.
B) total amount and quantity of information delivered to consumers by merchants.
C) total amount and quantity of information available to all market participants.
D) amount of information available to reduce price transparency.
E) amount of physical storage space needed to store data about a specific entity, such as a
product or consumer.
Answer: C
12) Selling the same goods to different targeted groups at different prices is called:
A) cost customization.
B) cost optimization.
C) price gouging.
D) cost personalization.
E) price discrimination. ‫التمييز في األسعار‬
Answer: E
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13) Information ________ exists when one party in a transaction has more information that is
important for the transaction than the other party.
A) transparency ‫الشفافيه‬
B) asymmetry ‫عدم التماثل‬
C) complexity ‫التعقيد‬
D) discrimination ‫التمييز‬
E) competition ‫المنافسه‬
Answer: B
14) Varying a product's price according to the supply situation of the seller is called ________
pricing.
A) menu
B) flexible
C) dynamic
D) asymmetric
E) customized
Answer: C
15) Removing the business process layers in a distribution channel is called:

A) disintermediation.
B) BPR.
C) market segmentation.
D) network effects.
E) market transparency.
Answer: A
16) All of the following are increased in traditional markets compared to digital markets except:
A) search costs.
B) menu costs.
C) switching costs.
D) network effects.
E) information asymmetry.
Answer: D
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17) Compared to digital markets, traditional markets have:
A) lower search costs.
B) stronger network effects.
C) higher delayed gratification effects.
D) reduced asymmetry.
E) higher transaction costs.
Answer: E
18) Compared to traditional goods, digital goods have:

A) greater pricing flexibility.
B) lower marketing costs.
C) higher production costs.
D) higher inventory costs.
E) lower menu costs.
Answer: A
19) Compared to traditional goods, digital goods have:

A) lower costs of production.
B) higher marginal costs per unit.
C) equivalent copying costs.
D) similar inventory costs.
E) less disintermediation.
Answer: A
20) What is the primary benefit to consumers of disintermediation?

A) Faster service
B) Lower costs
C) Higher quality
D) Greater choices
E) None, because disintermediation primarily benefits manufacturers.
Answer: B
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21) E-commerce refers to the use of any networking technologies to transact business.
Answer: FALSE
22) Retail consumer e-commerce is growing at double-digit rates.
Answer: TRUE
23) The Internet reduces information asymmetry.
Answer: TRUE
24) 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
25) Disintermediation provides major benefits to the distributor.
Answer: FALSE
26) In general, for digital goods, the marginal cost of producing another unit is about zero.
Answer: TRUE
27) Traditional online marketing, such as display ads, still constitutes the majority of all online
marketing.
Answer: TRUE
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28) Information asymmetry exists when there is more information about one product than there
is about a similar product.
Answer: FALSE
29) Price transparency refers to the ability of consumers to discover what merchants actually
pay for products.
Answer: FALSE
30) Switching costs are the merchants' costs of changing prices.
Answer: FALSE
31) What is the most profound way in which e-commerce and the Internet have changed the relationship between
companies and their customers? Support your answer.
Answer: Student answers will vary. A sample answer is: The most profound way in which e-commerce and the
Internet have changed this relationship is in the shrinking of information asymmetry. An information asymmetry
exists when one party in a transaction has more information that is important for the transaction than the other
party. That information helps determine their relative bargaining power. In digital markets, consumers and
suppliers can "see" the prices being charged for goods, and in that sense digital markets are said to be more
"transparent" than traditional markets. For example, until auto retailing sites appeared on the web, there was a
pronounced information asymmetry between auto dealers and customers. Only the auto dealers knew the
manufacturers' prices, and it was difficult for consumers to shop around for the best price. Auto dealers' profit
margins depended on this asymmetry of information. Today's consumers have access to a legion of websites
providing competitive pricing information, and three-fourths of U.S. auto buyers use the Internet to shop around
for the best deal. Thus, the web has reduced the information asymmetry surrounding an auto purchase. The
Internet has also helped businesses seeking to purchase from other businesses reduce information asymmetries and
locate better prices and terms.
32) "Knowledge increases exponentially" is a phrase with which we are all familiar. How does this concept apply to the
emergence of the digital firm? Support your contentions.
Answer: Student answers will vary. A sample answer is: The exponential increases of knowledge refer to shared information.
For example, once the concept of a wheel is established, inheritors of that knowledge do not have to "reinvent the wheel." The
Internet is a tool similar to the wheel: it is based on shared standards and universal tools. The Internet and shared networking
technologies are allowing new techniques for attracting customers and selling customers to be developed and adapted very
quickly. For example, although early Internet retailers had difficulty setting up secure credit card transactions and payment
systems, today there are many systems in place as vendors step in to create shared tools for doing this. The Internet is fostering
shared knowledge and, as such, propagating ever greater increases in that knowledge .
33) What are digital goods, and how does the Internet impact the market for digital goods?
Answer: Digital goods are goods that can be delivered over a digital network. Music tracks, video, Hollywood
movies, software, newspapers, magazines, and books can all be expressed, stored, delivered, and sold as purely
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digital products. For the most part, digital goods are intellectual property, which is defined as "works of the mind."
Intellectual property is protected from misappropriation by copyright, patent, and trade secret laws. Today, all
these products are delivered as digital streams or downloads while their physical counterparts decline in sales. The
impact of the Internet on the market for digital goods is nothing short of revolutionary. Businesses dependent on
physical products for sales—such as bookstores, music stores, book publishers, music labels, and film studios—
face the possibility of declining sales and even destruction of their businesses. In general, for digital goods, the
marginal cost of producing another unit is about zero (it costs nothing to make a copy of a digital file such as a
music file). However, the cost of producing the original first unit is relatively high—in fact, it is nearly the total
cost of the product because there are few other costs of inventory and distribution. Costs of delivery over the
Internet are very low, inventory costs are low, marketing costs often remain the same, and pricing can be highly
variable. On the Internet, the merchant can change prices as often as desired because of low menu costs.
?
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34) What is dynamic pricing and how is it used in e-commerce?
Answer: In dynamic pricing, the price of a product varies depending on the demand characteristics of the customer or the
supply situation of the seller. For instance, online retailers from Amazon to Walmart change prices on many products based on
time of day, demand for the product, and users' prior visits to their sites. Using big data analytics, some online firms can adjust
prices at the individual level based on behavioral targeting parameters such as whether the consumer is a price haggler (who
will receive a lower price offer) versus a person who accepts offered prices and does not search for lower prices. Prices can also
vary by zip code, with higher prices set for poor sections of a community. Uber, along with other ride services, uses surge
pricing to adjust prices of a ride based on demand (which always rises during storms and major conventions).
35) Amazon.com is known primarily for its use of which of the following business models?
A) Content provider
B) Portal
C) Market creator
D) E-tailer
E) Transaction broker
Answer: D
36) Craigslist is an example of:

A) C2C e-commerce.
B) B2B e-commerce.
C) B2C e-commerce.
D) M-commerce.
E) P2P-commerce.
Answer: A
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37) Which of the following types of e-commerce involves businesses selling goods and services
directly to individuals via the Internet?
A) B2C e-commerce
B) B2B e-commerce
C) C2C e-commerce
D) M-commerce
E) P2P e-commerce
Answer: A
38) All of the following are examples of firms that use the community provider Internet
business model except:
A) eBay.
B) Facebook.
C) Twitter.
D) Instagram.
E) Pinterest.
Answer: A
39) Transaction brokers:

A) generate revenue from advertising or from directing buyers to sellers.
B) save users money and time by processing online sales transactions.
C) provide a digital environment where buyers and sellers can establish prices for products.
D) sell physical products directly to consumers or individual businesses.
E) provide online meeting places where people with similar interests can communicate.
Answer: B
40) Which of the following Internet business models involves a merchant creating an online
digital environment that enables people with like interests to share information?
A) Community provider
B) Service provider
C) Market creator
D) Transaction broker
E) Portal
Answer: A
41) Market creators:

A) save users money and time by processing online sales transactions.
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B) provide a digital environment where buyers and sellers can establish prices for products.
C) create revenue by providing digital content over the web.
D) sell physical products directly to consumers or individual businesses.
E) generate revenue from advertising or from directing buyers to sellers.
Answer: B
42) Which of the following best illustrates the sales revenue model?
A) eBay receives a small fee from a seller if a seller is successful in selling an item.
B) Yelp receives a fee after steering a customer to a participating website where he or she
makes a purchase.
C) Pandora provides basic services for free but charges a premium for advanced services.
D) Apple accepts micropayments for single music track downloads.
E) Netflix charges customers a monthly fee for access to its library of movies.
Answer: D
43) Which of the following best illustrates the affiliate revenue model?
B) Yelp receives a fee after steering a customer to a participating Web site where he or she
makes a purchase.
C) Pandora provides basic services for free but charges a premium for advanced services.
Answer: B
44) Which of the following best illustrates the transaction fee revenue model?
makes a purchase.
C) Pandora provides basic services for free, but charges a premium for advanced services.
Answer: A
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45) In the ________ revenue models, a firm offers some services for free but charges a
subscription fee for premium services.
A) free/freemium
B) subscription
C) transaction fee
D) affiliate
E) sales
Answer: A
46) Content providers use ________ systems to process large amounts of very small monetary
transactions cost-effectively.
A) subscription
B) mobile payment
C) transaction fee
D) micropayment
E) affiliate revenue
Answer: D
47) Which of the following best illustrates the advertising revenue model?
makes a purchase.
C) Facebook provides a social network for free, but shows sponsored content in users' News
Feeds.
Answer: C
Difficulty: Moderate
AACSB: Analytical thinking
LO: 10-2: What are the principal e-commerce business and revenue models?
48) Which of the following companies uses the service provider business model?
A) Expedia
B) ETrade
C) Facebook
D) Yahoo
E) Dropbox
Answer: E
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Difficulty: Easy
AACSB: Application of knowledge
49) Netflix uses which of the following revenue models?

A) Advertising
B) Transaction fee
C) Subscription
D) Freemium
E) Affiliate
Answer: C
Difficulty: Easy
50) Uber uses a form of dynamic pricing.

Answer: TRUE
51) eBay is an example of the market creator business model.
Answer: TRUE
Difficulty: Easy
52) MSN is an example of the portal business model.
Answer: TRUE
53) Web personalization is used primarily as a marketing tool.
Answer: TRUE
54) Podcasting allows subscribers to listen to live, streaming radio and other audio content.
Answer: FALSE
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55) In the affiliate revenue model, firms derive revenue by selling information or services
through partner e-commerce sites.
Answer: FALSE
Difficulty: Easy
56) List and describe at least five different Internet business models. Which of these models do
you think would be the riskiest for a startup business today? Support your answer.
Answer: Internet business models include: e-tailer, transaction broker, market creator, content provider,
community provider, portal and service. The choice of riskiest model will depend on the individual student. A
sample answer is: Today the riskiest model would be a content-provider, because most, if not all, of the major
offline entertainment and content producers such as television networks and newspapers are online. They would be
your competitors, and already have the means for content creation and distribution in place. All of the other
business models do not have the risk of creating brand new content.
Difficulty: Easy
AACSB: Written and oral communication
57) List and describe the three main categories of e-commerce. Which do you think is
ultimately the most valuable to the individual consumer? Support your answer.
Answer: Business-to-consumer, business-to-business, and consumer-to-consumer. All three are valuable to the
consumer, but in the long run, business-to-business may be the most valuable to the individual consumer because
it will reduce prices and increase both goods and services. (Other opinions, of course, are supportable.)
58) What methods could a portal use to generate revenue? Which do you think might be most
successful, and why?
Answer: Advertising, subscriptions, selling collected marketing information, and directing buyers to sellers could all generate
revenue. Student evaluations will vary. A sample answer is: I would think the most successful method would be through
collecting marketing information, because as a portal that links to large amounts of external information and attracts repeat
customers, the portal would have the opportunity to gather a lot of information about each user.
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59) You are consulting for Lucky's, a chain of gas stations. What types of e-commerce
opportunities, if any, are relevant to Lucky's? Could Lucky's make use of any Internet business
models for this opportunity?
Answer: Student answers will vary. A sample answer is: In terms of B2B e-commerce, Lucky's
might be able to procure goods over the Internet, use a private industrial network to coordinate
their supply chain with suppliers and manage inventory. Depending on the structure of the
gasoline retail business, industry net marketplaces and exchanges might be of use. In terms of
B2C e-commerce, there are not many opportunities, as it is inefficient to sell gasoline over the
Internet. Lucky's could make sure that its stations are listed in popular location-based mobile
services that help drivers find nearby gas stations.
Difficulty: Challenging
60) List and describe the top five methods of online marketing and advertising formats, in
terms of 2015 revenue?
Answer: The top five methods of online advertising are: display ads, which are banner ads with
interactive features that increasingly are behaviorally targeted to individual web activity ($33
billion); search engine marketing, which employs text ads targeted at precisely what the
customer is looking for at the moment of shopping and purchase ($30 billion); video ads, which
are the fastest-growing format, and use engaging, entertaining, interactive video that are also
often behaviorally targeted ($9.8 billion); rich media ads, which use interactive, targeted,
entertaining animations, games and/or puzzles ($7.6 billion); and online classified, such as job,
real estate, and services ads ($3.1 billion).
AACSB: Application of knowledge; Written and oral communication
61) Netflix's public announcement of a reward for a technology solution to its movie
recommendation system is an example of:
A) prediction markets.
B) behavioral targeting.
C) long-tail marketing.
D) social shopping.
E) crowdsourcing.
Answer: E
LO: 10-3: How has e-commerce transformed marketing?
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62) Exposing an individual to ads that are chosen and based on the recorded and analyzed
online behavior of the individual is referred to as:
A) clickstream advertising.
B) behavioral targeting.
C) online profiling.
D) long tail marketing.
E) crowdsourcing.
Answer: B
63) Which of the following best describes the digital social graph?
A) A person's direct and indirect relationships
B) All of a person's closest digital relationships
C) A mapping of all online social relationships
D) All of the online and offline relationships a person has
E) All of the relationships in an online community
Answer: C
64) Which of the following marketing formats is sales oriented, rather than branding oriented or
a mix?
A) Lead generation
B) Search engine
C) Rich media
D) Display ads
E) Video
Answer: B
65) Facebook's Like button is an example of which of the following?

A) Social sign-on
B) Collaborative shopping
C) Network notification
D) Social search
E) Newsfeed
Answer: C
Difficulty: Easy
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66) Which of the following is a marketing format that uses banner ads and pop-ups with
interactive features?
A) Search engine ads
B) Video ads
C) Rich media ads
D) E-mail ads
E) Display ads
Answer: E
Difficulty: Easy
67) ________ attempts to leverage the fact that there is always some demand, however small,
for a product.
A) Long tail marketing
B) Behavioral targeting
C) Crowdsourcing
D) Demand prediction software
E) Lead generation marketing
Answer: A
68) Which of the following is the largest mobile advertising market?

A) Google
B) Yahoo
C) Facebook
D) Microsoft
E) Twitter
Answer: A
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69) What is the difference between personalization and customization, as applied to e-
commerce technologies?
A) Customization is any type of adjustment made to a product by the user; personalization
refers to a business changing a product or service for the user.
B) Personalization is any type of adjustment made to a product by the user; customization refers
to a business changing a product or service for the user.
C) Customization refers to adjusting marketing messages for a consumer; personalization refers
to adjusting a product or service based on a user's preferences.
D) Personalization refers to adjusting marketing messages for a consumer; customization refers
to adjusting a product or service based on a user's preferences.
E) There is no difference. Both terms refer to changing a product or communication for the
consumer.
Answer: D
70) Rich media advertisements are a sales-oriented marketing format.

Answer: FALSE
71) Behavioral targeting occurs at two levels: individual websites and through ISPs.
Answer: FALSE
72) Advertising networks track a user's behavior at thousands of websites.

Answer: TRUE
73) Viral marketing is like traditional word-of-mouth marketing except that it is spread via
online communities.
Answer: TRUE
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74) The behavioral targeting of ads results in consumers responding ten times more frequently
than when delivered ads randomly.
Answer: TRUE
75) Describe the use of personalization and customization in e-commerce. What business value
do these techniques have?
Answer: In personalization, merchants can target their marketing messages to specific
individuals by adjusting the message to a person's name, interests, and past purchases. For
example, Amazon.com greets each logged in user with their user name. With customization,
merchants can change the delivered product or service based on a user's preferences or prior
behavior. 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 ability
of Internet technology to track customer behavior at websites, along with records of purchases
and other behavior, allows merchants to create a detailed profile of a customer. These profiles
can be used to create unique personalized web pages that display content or ads for products or
services of special interest to each user, improving the customer's experience and creating
additional value. The business value of personalization is reduced marketing costs, as you
spend only the money to target customers that are more likely to be receptive and are more
profitable, and improved sales results, from increased customer response to personalized sites
that better serve their own purposes and shopping needs. Personalization can achieve some of
the benefits of using individual salespeople for dramatically lower costs.
76) You have been hired as a marketing consultant by a law firm in Los Angeles that
specializes in juvenile justice. What ways can you use the Internet as a marketing tool and to
advertise the firm's services?
Answer: Student answers will vary. A sample answer is: For marketing research, you could
advertise on search engines. You could pay for marketing research at relevant portals. You
could also collect customer information from the company's website. You could monitor
relevant blogs to see what issues are of concern in juvenile justice, so as to address these
concerns in your advertising campaigns. To advertise, you could advertise on search engine
results and at relevant portals or legal information content providers. If it were feasible, you
could create a juvenile justice portal and blog for the company in order to attract users from
whom you could gather market research as well as promote your services. You might also want
to investigate social network marketing—assuming that your clients might be the best leads for
other clients.
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77) Website tracking software can log the path a customer took through the website, the time
spent on the site, and what geographic area, in general, the customer is from, all of which can
help in customer analysis. It can also log the customer's operating system and which browser
the customer is using. How could these last two data items be of interest to a company? Give
examples.
Answer: Student answers will vary, but should include an understanding that customer OS and
browser interact technologically with a website and might be relevant in data analysis. An
example is: Customer OSs and browsers could help a company determine what technical
functionalities could be used in the site. For example, if it found out that a significant
percentage of its users are using mobile browsers, they might want to make sure that the
website is easily used by various mobile devices. Secondly, this data might be relevant in data
mining or other analysis. For example, a retail clothing company might find that a significant
portion of their most valued customers use an Apple operating system, and from other data
analysis know that Apple users are more likely to purchase cashmere sweaters. Then the
company may want to place a greater emphasis on selling the cashmere sweaters.
78) Which of the following statements about EDI is not true?

A) Each major industry in the United States has EDI standards.
B) Today, EDI is only used for document automation.
C) Many organizations still use private networks for EDI.
D) EDI systems are increasingly web-enabled.
E) About 80 percent of online B2B e-commerce is still based on EDI.
Answer: B
LO: 10-4: How has e-commerce affected business-to-business transactions?
79) The process of sourcing goods and materials, negotiating with suppliers, paying for goods,
and making delivery arrangements is called:
A) e-procurement.
B) SCM.
C) procurement.
D) sourcing.
E) production.
Answer: C
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80) A secure website that links a large firm to its suppliers and other key business partners is
called a(n):
A) e-hub.
B) marketspace.
C) exchange.
D) private industrial network.
E) net marketplace.
Answer: D
AACSB: Information technology
81) Which of the following statements about Net marketplaces is not true?
A) Some Net marketplaces sell direct goods.
B) Some Net marketplaces serve vertical markets.
C) Some Net marketplaces sell indirect goods.
D) Some Net marketplaces support contractual purchases based on long-term relationships.
E) Some Net marketplaces are owned by a single firm and used to link solely to the firm's
suppliers and key business partners.
Answer: E
82) Which of the following statements about exchanges is not true?

A) Exchanges are independently owned third-party Net marketplaces.
B) Some exchanges provide vertical markets.
C) Exchanges are the most successful form of B2B commerce.
D) Some exchanges enable a spot market.
E) Go2Paper is an example of an exchange.
Answer: C
83) Which of the following is an example of a direct good in the automobile industry?
A) Computer equipment
B) Paper
C) Office furniture
D) Roofing shingles
E) Sheet steel
Answer: E
Difficulty: Easy
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84) Which of the following is an example of a private industrial network?
A) Exostar
B) Go2Paper
C) Elemica
D) Expedia
E) VW Group Supply
Answer: E
85) Procurement involves all of the following except:

A) negotiating with suppliers.
B) paying for goods.
C) making delivery arrangements.
D) sourcing.
E) production scheduling.
Answer: E
86) EDI standards that take advantage of network communications have yet to be fully
implemented at the industry level.
Answer: FALSE
AACSB: Information technology
87) Net marketplaces may either support contractual purchasing based on long-term
relationships with designated suppliers or short-term spot purchasing.
Answer: TRUE
88) Exchanges have become one of the most popular types of Net marketplace because they
encourage competitive bidding that drives prices down.
Answer: FALSE
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89) Indirect goods are not involved firsthand in the production process.
Answer: TRUE
90) A new social mobile app you are developing allows users to find friends who are logged in
and within a 10-mile radius. This would be categorized as a ________ service.
A) geosocial
B) geoinformation
C) geoadvertising
D) geomapping
E) geolocating
Answer: B
Difficulty: Easy
LO: 10-5: What is the role of m-commerce in business, and what are the most important m-
commerce applications?
91) Geoadvertising sends ads to users based on their:

A) GPS locations.
B) home addresses.
C) shopping preferences.
D) website behaviors.
E) Google Maps settings.
Answer: A
92) What percent of online retailers now have m-commerce websites?

A) 15 percent
B) 25 percent
C) 55 percent
D) 75 percent
E) 85 percent
Answer: C
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93) Foursquare is an example of which of the following?
A) Social graph
B) Collaborative shopping
C) Net marketplace
D) Crowdsourcing application
E) Geosocial services
Answer: E
94) Define location-based services and describe the main categories of these services. Which of
the categories do you feel has the most potential in terms of e-commerce revenues, and why?
Answer: Location-based services are services that use GPS mapping services available on
smartphones to deliver value-added services. They include geosocial services, geoadvertising,
and geoinformation services. A geosocial service can tell you where your friends are meeting.
Geoadvertising services can tell you where to find the nearest Italian restaurant, and
geoinformation services can tell you the price of a house you are looking at, or about special
exhibits at a museum you are passing. Student answers as to the most valuable of these services
will vary; an example is: I feel that geoadvertising services have the most potential for profit, as
it is based on a profit-making mechanism: advertising. Geosocial services and geoinformation
services, by themselves, are more content- and communication-oriented.
95) What are geosocial services and how are they being used?
Answer: Geosocial services help you find friends, or your friends to find you, by checking in
to the service, announcing your presence in a restaurant or other place. Your friends are
instantly notified. About 20 percent of smartphone owners use geosocial services. One example
of a firm using geosocial services is Foursquare. Foursquare provides a location-based social
networking service to 60 million registered individual users, who may connect with friends,
update their location, and provide reviews and tips for enjoying a location. Points are awarded
for checking in at designated venues. Users choose to post their check-ins on their accounts on
Twitter, Facebook, or both. Users also earn badges by checking in at locations with certain tags,
for check-in frequency, or for the time of check-in. More than 500,000 local merchants
worldwide use the merchant platform for marketing.
Difficulty: Easy
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96) Which of the following is a milestone for the Phase 1: Planning phase of developing an e-
commerce presence?
A) Website plan
B) Web mission statement
C) Functional website
D) Social media plan
E) Mobile media plan
Answer: B
Difficulty: Easy
LO: 10-6: What issues must be addressed when building an e-commerce presence?
97) Which of the following is a milestone for the website development phase of building an e-
commerce presence?
A) Web mission statement
B) Social media plan
C) Website plan
D) Web presence map
E) Functional website
Answer: C
98) In planning a robust e-commerce presence, you will want to consider the blog platform as
part of your ________ presence.
A) social media
B) e-mail
C) community
D) website
E) offline media
Answer: A
99) Which of the following is not one of four types of presence to be considered when building
an e-commerce presence?
A) Offline media
B) Websites
C) Social media
D) Corporate
E) E-mail
Answer: D
Difficulty: Easy
25
100) What are the steps involved in developing an e-commerce presence for a start-up
company?
Answer: A one-year timeline for developing an e-commerce presence for a start-up company
would involve the following:
Phase 1: Planning, which involves envisioning the company's web presence and determining
personnel, and producing a web mission statement; Phase 2, Website development, which
involves acquiring content, developing a website design, arranging for hosting a website, and
producing a website plan; Phase 3: Web implementation, which involves developing keywords
and metatags, focusing on search engine optimization, identifying potential sponsors, and
producing a functional website; Phase 4: Social media plan, which involves identifying
appropriate social platforms and content for the company's products and services, and
producing a social media plan; Phase 5, Social media implementation, which involves
developing Facebook, Twitter and Pinterest presences, and results in a functioning social media
presence, and Phase 6: Mobile plan, which involves developing a mobile media plan and
considering options for porting the website.
26

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Management Information Systems: Managing the Digital Firm, 15e (Laudon)

Chapter 10 E-Commerce: Digital Markets, Digital Goods

1) What event marked the beginning of e-commerce?

2) All of the following are examples of "on demand" companies except:

4) When did e-commerce begin?

6) All of the following are unique features of e-commerce technology, except:

7) Which of the following dimensions of e-commerce technology involves engaging consumers

8) Which of the following dimensions of e-commerce technology involves the integration of

10) The effort required to locate a suitable product is called:

11) Information density refers to the:

15) Removing the business process layers in a distribution channel is called:

18) Compared to traditional goods, digital goods have:

19) Compared to traditional goods, digital goods have:

20) What is the primary benefit to consumers of disintermediation?

22) Retail consumer e-commerce is growing at double-digit rates.

23) The Internet reduces information asymmetry.

25) Disintermediation provides major benefits to the distributor.

30) Switching costs are the merchants' costs of changing prices.

36) Craigslist is an example of:

39) Transaction brokers:

41) Market creators:

49) Netflix uses which of the following revenue models?

50) Uber uses a form of dynamic pricing.

51) eBay is an example of the market creator business model.

52) MSN is an example of the portal business model.

53) Web personalization is used primarily as a marketing tool.

65) Facebook's Like button is an example of which of the following?

68) Which of the following is the largest mobile advertising market?

70) Rich media advertisements are a sales-oriented marketing format.

72) Advertising networks track a user's behavior at thousands of websites.

78) Which of the following statements about EDI is not true?

82) Which of the following statements about exchanges is not true?

85) Procurement involves all of the following except:

91) Geoadvertising sends ads to users based on their:

92) What percent of online retailers now have m-commerce websites?

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