Introduction to Electronic Commerce, 3e (Turban)
Chapter 3 Retailing in Electronic Commerce: Products and Services
3.1 True/False
1) The top 500 e-tailers accounted for 65 percent of all online sales in 2009.
2) The amount and percentage of goods and services sold on the Internet is increasing rapidly,
despite the failure of many dot-com companies.
3) According to Internet Retailer (2009), approximately 75 percent of adult U.S. Internet users
shopped online and/or researched offline sales online.
4) As the number of Internet users reaches saturation, the rate of increase of online shoppers will
slow, which creates the challenge for e-retailers to increase the amount spent online.
5) A retailer is a sales intermediary, a seller that operates between manufacturers and customers.
6) When comparing retailing to e-tailing, e-tailing has a lower cognitive shopping overhead due
to easy-to-establish mutual trust.
7) Commodities with standard specifications (e.g., books, CDs, airline tickets) are expected to
facilitate higher sales volumes.
8) A business model is a description of how an organization intends to generate revenue through
its business operations.
9) Marketing done online between any seller and buyer is indirect marketing.
10) Direct marketers are firms that sell directly to consumers over the Internet without
maintaining a physical sales channel.
11) A click-and-mortar retailer is a combination of both the brick-and-mortar retailer and an
online transactional Web site.
12) Competition among online travel e-tailers is fierce, with low margins, little customer loyalty,
and increasing commoditization of products and services.
13) WAYN is a social networking Web site with a goal of uniting college student travelers from
North America.
14) The electronic job market can create high turnover costs for employers by accelerating
employees’ movement to other jobs.
15) When compared to the traditional job market, an advantage of the online job market is its
long life cycle.
16) An advantage of the electronic job market for job seekers is that they can assess their market
value.
17) Many insurance companies use a dual strategy, keeping human agents but also selling online.
18) The major risk of online trading is security.
19) Customers accessing a bank system from the outside must go through encryption provided
by SSL and digital certification verification.
20) Both online banks and click-and-mortar banks carry some risks and problems, especially in
international banking, including hackers and liquidity risk.
21) The number of checks the U.S. Federal Reserve System processes has remained constant, but
commercial automated clearinghouse (ACH) volume has increased significantly.
22) Direct sales of digital content through digital download allow a producer of digital content to
bypass the traditional retail channel, thereby reducing overall costs and capturing greater profits.
23) A major problem in B2C is the increasing rate of online fraud.
24) A traditional brick-and-mortar store with a mature Web site that uses a click-and-mortar
strategy can leverage multichannels.
25) Business rating sites can aid consumer purchase decisions.
3.2 Multiple Choice
1) Amazon.com experienced each of the following except
A) maintaining its position as the number one e-tailer in 2008.
B) declaring its first profit in January 2002.
C) establishing a grocery delivery service called AmazonConnect.
D) attracting at least 615 million visitors in 2009.
2) According to Internet Retailer (2009), approximately ________ percent of adult U.S. Internet
users shop online and/or research offline sales online.
A) 25
B) 40
C) 60
D) 85
3) Each of the following describes retailing except:
A) A retailer is a sales intermediary.
B) Many manufacturers sell directly to consumers and through wholesalers and retailers.
C) E-tailing makes it easier for a manufacturer to sell directly to customers by cutting out the
intermediary.
D) Companies that produce a larger number of products, such as Proctor & Gamble, do not need
retailers for efficient distribution.
4) Retailers who sell over the Internet are called
A) cyber marketers.
B) e-tailers.
C) B2B commerce marketers.
D) brick-and-mortar operations.
5) What is the primary advantage of catalog sales?
A) Catalogs eliminate the constraints of space and time.
B) Customers prefer catalog shopping to e-tailing.
C) Catalogs increase interest in products that are then bought online.
D) Products and services can both be sold via catalogs.
6) Conducting e-commerce where the online channel of a business is integrated with the physical
retail business as opposed to being a separate channel best defines
A) referral economy.
B) direct marketing.
C) considered commerce.
D) click-and-mortar retailers.
7) With all else being equal in the online environment, goods with any of the following product
characteristics are expected to facilitate greater online sales except:
A) relatively expensive items.
B) high brand recognition.
C) digitized format.
D) frequently purchased items.
8) Dell’s distribution strategy is best described as
A) a brick-and-mortar strategy.
B) a shared service mall strategy.
C) a click-and-mortar strategy.
D) direct marketing from a manufacturer.
9) The Sears marketing strategy is best described as
A) a brick-and-mortar strategy.
B) a shared service mall strategy.
C) a click-and-mortar strategy.
D) direct marketing by a manufacturer.
10) Competitive advantages of a “pull” vehicle distribution process include
A) virtually real-time market feedback.
B) large cost savings in finished vehicle inventory carrying costs.
C) improved customer satisfaction and pricing.
D) all of the above.
11) A type of online mall that is basically a directory organized by product type best describes
A) referring directory.
B) mall with shared services.
C) brick-and-mortar retailer.
D) cyber directory.
12) An online seller of travel services that generates revenue by charging fees for its services is
an example of a
A) market maker.
B) transaction broker.
C) content disseminator.
D) viral marketer.
13) A marketer that uses e-mail to advertise to potential customers is called a
A) market maker.
B) transaction broker.
C) content disseminator.
D) viral marketer.
14) A company that creates and manages many-to-many markets is called a
A) market maker.
B) transaction broker.
C) content disseminator.
D) viral marketer.
15) Each of the following is a revenue model for online independent travel agents except
A) direct competition revenues.
B) direct revenues from commissions.
C) subscription or membership fees.
D) revenue sharing fees.
16) Each of the following is a characteristic of WAYN except:
A) It is a popular social networking Web site.
B) When it introduced fees for its premier travel membership service, it lost most of its new
subscriptions.
C) It is not aimed at any particular age group.
D) It enables its users to create a personal profile and upload and store photos.
17) Compared to the traditional job market, the online job market
A) has a shorter life cycle.
B) is usually specialized and local in scope.
C) tends to be less reliable.
D) tends to be much less expensive.
18) Which of the following parties use the Internet job market?
A) employers seeking employees
B) classified ads
C) job agencies
D) all of the above
19) Advantages of the electronic job market for employers include each of the following except
A) charging online processing fees.
B) providing greater equal opportunity for job seekers.
C) learning how to use their voice effectively in an interview.
D) conducting interviews online.
20) Advantages of the electronic market for job seekers include each of the following except
A) assessing their market value.
B) competing with less qualified applicants.
C) marketing themselves directly to potential employers.
D) communicating quickly with potential employers.
21) E-banking
A) saves time and money.
B) is more expensive for banks.
C) is primarily done using wireless devices.
D) is done by less than 40 percent of U.S. adult Internet users.
22) Which of the following is not an online banking application category?
A) informational
B) delivery
C) administrative
D) transactional
23) The portal online banking application provides
A) financial education information.
B) current bank and local news.
C) links to local business.
D) bill-pay services.
24) Implementation issues for online financial transactions include
A) security.
B) imaging systems.
C) fee issues.
D) all of the above.
25) Gateways to storefronts and e-malls are
A) shopping portals.
B) shopbots.
C) shopping browsers.
D) intelligent search engines.
26) Tools that scout the Web on behalf of consumers who specify search criteria are
A) shopping portals.
B) shopbots.
C) shopping browsers.
D) intelligent search engines.
27) The TRUSTe seal is an example of
A) a business rating.
B) an intermediary.
C) a B2B exchange.
D) a trustmark.
28) The effects upon sales of consumers receiving a referral or recommendation from other
consumers best defines
A) consumer economy.
B) referral economy.
C) channel conflict.
D) word-of-mouth economy.
29) The attention-grabbing behavior of agencies that go out to consumer environments and boast
about how great a brand or item is in order to spread the word best defines
A) referral economy.
B) blasting.
C) sneezing.
D) shouting.
30) Charles wants to buy a John Lennon lithograph over the Internet, but he is unwilling to pay
for it until he inspects it to ascertain authenticity. The auction site thorough which he purchases
the painting agrees to hold his money until he tells them to release it to the seller. This is an
example of
A) an escrow service.
B) a trustmark.
C) a warranty.
D) a verification.
3.3 Fill in the Blank
1) ________ is retailing conducted online, over the Internet.
2) ________ are retailers who sell over the Internet.
3) Conducting e-commerce where the online channel of a business is integrated with the physical
retail business as opposed to being a separate channel describes ________.
4) Broadly, marketing that takes place without intermediaries between manufacturers and buyers
describes ________.
5) ________ are firms that sell directly to consumers over the Internet without maintaining a
physical sales channel.
6) ________ are brick-and-mortar retailers that offer a transactional Web site from which to
conduct business.
7) ________ are retailers who do business in the non-Internet, physical world in traditional
brick-and-mortar stores.
8) Virtual e-tailers can be categorized as ________ and ________.
9) A business model where a company sells in multiple marketing channels simultaneously
describes ________.
10) ________ and ________ are two types of online malls.
11) A ________ is a type of mall that is basically a directory organized by product type.
12) The B2C business model that combines community services with selling or affiliate
marketing is ________.
13) The ________ is the online B2C business model where a manufacturer sells to a business,
but delivers to individual customers.
14) ________ is the online B2C business model where manufacturers customize their products
and services via online orders.
15) Various banking activities conducted from home or the road using an Internet connection
describes ________.
16) ________, ________, ________, ________, and ________ are the five types of online
banking applications.
17) ________ is the risk of not having sufficient funds to pay obligations as they come due.
18) A grocer that takes orders online and provides deliveries on a daily or other regular schedule
or within a very short period of time defines ________.
19) Express delivery made fairly quickly after an online order is received defines ________.
20) Gateways to e-storefronts and e-malls describes ________.
21) Tools that scout the Web on behalf of consumers who specify search criteria describes
________.
22) The effect upon sales of consumers receiving a referral or recommendation from other
consumers defines ________.
23) The removal of organizations or business process layers responsible for certain intermediary
steps in a given supply chain defines ________.
24) The process whereby intermediaries take on new intermediary roles describes ________.
25) ________ is the situation in which an online marketing channel upsets the traditional
channels due to real or perceived damage from competition.
3.4 Essay
1) List the seven characteristics that enable items to facilitate higher sales volumes in an online
environment.
2) List five business models by distribution channel.
3) What are virtual (pure-play) e-tailers? Give an example. List one advantage and one
disadvantage of this model.
4) List five of the online revenue models for online travel services.
5) Identify five advantages of the online job market over the traditional job market.