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Chapter 1 - E-commerce
E-commerce
Girne Amerikan Üniversitesi
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E-commerce 2016: Business. Technology. Society., 12e (Laudon) Chapter 1 The Revolution Is Just Beginning 1) E-commerce can be defined as: A) the use of the Internet, the Web, and mobile apps to transact business. B) the use of any Internet technologies in a firm's daily activities. C) the digital enablement of transactions and processes within an organization. D) any digitally enabled transactions among individuals and organizations. Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 1: Define e-commerce and describe how it differs from e-business. 2) Which of the following is an example of e-business? A) Amazon's inventory control system B) the Amazon Web site C) an Amazon mobile app D) Amazon's Pinterest page Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 1: Define e-commerce and describe how it differs from e-business. 3) Which of the following terms can be considered synonymous with the term e-commerce? !1 Copyright © 2017 Pearson Education, Inc. A) e-business B) digital commerce C) the Internet D) the Web Answer: B Difficulty: Easy AACSB: Application of knowledge LO: 1: Define e-commerce and describe how it differs from e-business. 4) The term e-commerce refers to the digital enabling of transactions and processes involving an exchange of value across organizational boundaries. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 1: Define e-commerce and describe how it differs from e-business. 5) E-commerce and e-business systems blur together at the business firm boundary, at the point at which internal business systems link up with suppliers or customers. Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 1: Define e-commerce and describe how it differs from e-business. 6) Explain why a firm's online inventory control system is an example of e-business rather than e-commerce. What is the key factor in determining if a transaction is "commerce"? Answer: E-business refers primarily to digitally enabled transactions within a firm, involving information systems, such an online inventory control system, under the control of the firm. E!2 Copyright © 2017 Pearson Education, Inc. Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 1: Identify and describe the unique feature of e-commerce technology and discuss their business significance. 9) Which of the following features of e-commerce technology allows users to participate in the creation of online content? A) ubiquity B) global reach C) information density D) social technology Answer: D Difficulty: Moderate AACSB: Analytical thinking LO: 1: Identify and describe the unique feature of e-commerce technology and discuss their business significance. 10) Which of the following is the best definition of transaction cost? A) the expense of changing national or regional prices B) the cost of participating in a market C) the cost of finding suitable products in the market D) the cost merchants pay to bring their goods to market Answer: B Difficulty: Moderate AACSB: Application of knowledge !4 Copyright © 2017 Pearson Education, Inc. LO: 1: Identify and describe the unique feature of e-commerce technology and discuss their business significance. 11) In 2015, the world's online population was estimated to be around: A) 310 million. B) 3 billion. C) 31 billion. D) 310 billion. Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 1: Identify and describe the unique feature of e-commerce technology and discuss their business significance. 12) Which of the following features of e-commerce technology is related to the concept of network externalities? A) richness B) interactivity C) universal standards D) information density Answer: C Difficulty: Difficult AACSB: Application of knowledge LO: 1: Identify and describe the unique feature of e-commerce technology and discuss their business significance. !5 Copyright © 2017 Pearson Education, Inc. 14) Interactivity in the context of e-commerce provides which of the following functionalities? A) the ability to physically touch and manipulate a product B) complexity and content of a message C) the ability of consumers to create and distribute content D) the enabling of two-way communication between consumer and merchant Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 1: Identify and describe the unique feature of e-commerce technology and discuss their business significance. 15) The costs incurred by merchants in having to change product prices (such as the costs of reentering prices into computer systems) are referred to as which of the following? A) subscription costs B) fixed costs C) menu costs D) variable costs Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 1: Identify and describe the unique feature of e-commerce technology and discuss their business significance. 16) Which of the following refers to any disparity in relevant market information among parties in a transaction? A) information asymmetry !7 Copyright © 2017 Pearson Education, Inc. B) unfair competitive advantage C) imperfect competition D) dynamic pricing Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 1: Identify and describe the unique feature of e-commerce technology and discuss their business significance. 17) Which of the following is a physical place you visit in order to transact? A) marketspace B) marketplace C) social network D) the Internet Answer: B Difficulty: Easy AACSB: Application of knowledge LO: 1: Identify and describe the unique feature of e-commerce technology and discuss their business significance. !8 Copyright © 2017 Pearson Education, Inc. B) information density C) ubiquity D) reach Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 1: Identify and describe the unique feature of e-commerce technology and discuss their business significance. 21) Ubiquity lowers the cognitive energy required to transact in a marketspace. Answer: TRUE Difficulty: Moderate AACSB: Analytical thinking LO: 1: Identify and describe the unique feature of e-commerce technology and discuss their business significance. !10 Copyright © 2017 Pearson Education, Inc. 22) The fact that e-commerce is conducted on the basis of universal standards increases search costs for consumers. Answer: FALSE Difficulty: Difficult AACSB: Application of knowledge LO: 1: Identify and describe the unique feature of e-commerce technology and discuss their business significance. 23) Universal standards make price discovery more costly, slower, and less accurate. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 1: Identify and describe the unique feature of e-commerce technology and discuss their business significance. 24) Cost transparency refers to the ease with which consumers can find out the variety of prices in a market. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 1: Identify and describe the unique feature of e-commerce technology and discuss their business significance. 25) Personalization involves targeting marketing messages to specific individuals by adjusting the message based upon a consumer's preferences or past purchasing behavior. Answer: TRUE Difficulty: Moderate !11 Copyright © 2017 Pearson Education, Inc. 27) Why study e-commerce? Answer: The reason for the interest specifically in e-commerce is that e-commerce technology is different and more powerful than any of the other technologies we have seen in the past century. E-commerce technologies–and the digital markets that result–have brought about some fundamental, unprecedented shifts in commerce. While these other technologies transformed economic life in the twentieth century, the evolving Internet and other information technologies are shaping the twenty-first century. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 1: Identify and describe the unique feature of e-commerce technology and discuss their business significance. 28) Identify the eight unique features of e-commerce technology and explain how these features set e-commerce apart from more traditional ways of conducting commercial transactions. Answer: The eight unique features of e-commerce technology are ubiquity, global reach, universal standards, richness, interactivity, information density, personalization/customization, and social technology. The fact that e-commerce is available nearly everywhere, at any time, (ubiquity) extends the marketplace beyond traditional boundaries and removes it from a temporal and geographic location. A marketspace is created in which shopping can take place anywhere, enhancing consumer convenience and reducing shopping costs, whereas in traditional commerce the marketplace is a physical place you must visit in order to transact. The global reach of ecommerce means that commerce is enabled across national and cultural boundaries as never before, with potentially billions of consumers and millions of businesses worldwide included in the marketspace. Traditional commerce, by contrast, is local or regional involving local merchants or national merchants with local outlets. Universal standards (one set of technical media standards) also allow for the seamless enablement of global commerce. In contrast, most traditional commerce technologies differ from one nation to the next. In traditional markets, national sales forces and small retail stores can provide a complex and content-rich message. However, there is generally a trade-off between the richness of the message and the number of consumers who can be reached with the marketing message. In e-commerce the trade-off is no longer necessary. An information rich environment is extended globally. Unlike any other commercial technology of the twentieth century, except perhaps the telephone, e-commerce technologies are interactive, allowing for two-way communication between the seller and the consumer. E-commerce technologies reduce information collection, storage, processing, and !13 Copyright © 2017 Pearson Education, Inc. communication costs, thereby greatly increasing the prevalence, accuracy, and timeliness of information. This information density (information that is more plentiful, cheaper, and of higher quality) sets e-commerce apart from all other traditional methods of conducting transactions. Ecommerce technologies also permit the personalization and customization of marketing messages on a level that was impossible with previous commerce technologies. Marketing messages can be targeted to specific individuals based on their interests and past purchasing behavior, and the product or service can be altered to suit a customer's preferences and prior behavior. Social technology allows users to easily generate and share content and permits a many-to-many model of mass communications that is different from previous technologies. This supports the creation of new business models and products that support social network services. Difficulty: Difficult AACSB: Analytical thinking; Information technology; Written and oral communication LO: 1: Identify and describe the unique feature of e-commerce technology and discuss their business significance. 29) How has e-commerce changed the marketing of goods? Answer: E-commerce has greatly changed the marketing of goods. Before e-commerce was developed, the marketing and sale of goods was a mass-marketing and sales force-driven process. Marketers viewed consumers as passive targets of advertising campaigns. E-commerce has brought many new possibilities for marketing. The Internet and Web can deliver, to an audience of millions, rich marketing messages with text, video, and audio in a way not possible with traditional commerce technologies such as radio, television, or magazines. Merchants can target their marketing messages to specific individuals by adjusting the message to a person's name, interests, and past purchases. In addition, much information about the consumer can be gathered from the Web site the consumer visits. With the increase in information density, a great deal of information about the consumer's past purchases and behavior can be stored and used by online merchants. The result is a level of personalization and customization unthinkable with existing commerce technologies. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 1: Identify and describe the unique feature of e-commerce technology and discuss their !14 Copyright © 2017 Pearson Education, Inc. 32) Business-to-consumer (B2C) e-commerce in the United States: A) has grown at double-digit rates between 2010 and 2015. B) has less revenue than C2C e-commerce. C) now constitutes over 50% of the overall U. retail market. D) is growing more slowly as it confronts its own fundamental limitations. Answer: A Difficulty: Difficult AACSB: Application of knowledge LO: 1: Describe the major types of e-commerce. 33) Which of the following is not true about the use of apps? A) The average U. consumer spends over two hours a day using apps. B) Users still spend less time using apps than they do using desktops or mobile Web sites. C) Apps are easier to control and monetize than Web sites. D) Around 280 million people worldwide launch a smartphone app more than 60 times a day. Answer: B Difficulty: Difficult AACSB: Application of knowledge LO: 1: Describe the major types of e-commerce. 34) Which of the following is an example of an on-demand service company? A) YouTube B) Airbnb C) Tumblr !16 Copyright © 2017 Pearson Education, Inc. D) Facebook Answer: B Difficulty: Easy AACSB: Analytical thinking LO: 1: Describe the major types of e-commerce. 35) Which of the following is an example of B2B e-commerce? A) Airbnb B) Facebook C) Groupon D) Go2Paper Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 1: Describe the major types of e-commerce. !17 Copyright © 2017 Pearson Education, Inc. LO: 1: Describe the major types of e-commerce. 39) List and briefly explain the main types of e-commerce. Answer: The main types of e-commerce are Business-to-Consumer (B2C), in which online businesses attempt to reach individual consumers; Business-to-Business (B2B), in which businesses focus on selling to other businesses; Consumer-to-Consumer (C2C), which provides a market in which consumers can sell goods to each other; mobile e-commerce (m-commerce), which refers to the use of wireless digital devices to enable Web transactions; social e-commerce, which is commerce enabled by social networks and online social relationships; and local ecommerce, which is e-commerce that is focused on engaging the customer based on his or her geographical location. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 1: Describe the major types of e-commerce. !19 Copyright © 2017 Pearson Education, Inc.
Chapter 1 - E-commerce
Course: E-commerce
University: Girne Amerikan Üniversitesi
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