Essentials of Entrepreneurship and Small Business Management, 9e (Scarborough)
Chapter 10 E-Commerce and the Entrepreneur
1) One of the most valuable attributes of the Web is the ability to ________.
A) provide companies with instantaneous customer feedback
B) enable the site to create an appearance that the organization is able to meet customer needs
that, in fact, are not possible based on its actual resources
C) eliminate advertising expenses and the amount of printed materials needed to facilitate
promotional efforts
D) encourage the use of credit cards as a means of paying for the online transaction
2) More than ________ percent of the world’s online population has used the Internet to make a
purchase.
A) 46.6
B) 50.8
C) 51.5
D) 61.2
3) Online and Internet-influenced sales account for ________ percent of total retail sales.
A) 40
B) 42
C) 60
D) 83
4) An estimated ________ percent of small business owners in the U.S. have Web sites.
A) 25
B) 54
C) 75
D) 90
5) Multichannel sales account for ________ percent of all retail purchases.
A) 38
B) 41
C) 46
D) 49
6) Which of the following is an important issue that business owners should consider before
launching an e-commerce effort?
A) How to develop long-term relationships with customers.
B) How to exploit the interconnectivity and the opportunities it creates to transform relationships
with its suppliers, customers, and external stakeholders.
C) How to measure the success of its Web-based sales effort.
D) All of the above
7) All of the following represent benefits of selling on the Web except the ________.
A) opportunity to increase revenues
B) power to educate and inform
C) ability to remain open 24 hours a day
D) ability to advertise in a cheaper media form
8) To avoid unpleasant surprises in launching an e-commerce effort an entrepreneur should
________.
A) test the Web site with real customers to make sure it is easy to navigate
B) avoid being talked into establishing a privacy policy
C) cancel all current advertisements in other media
D) not try to out-guess customers, and handle order fulfillment as orders come in
9) The Web is one of the most efficient ways of reaching both new and existing customers and
when properly promoted, a Web site can ________.
A) reduce a company’s cost of generating sales leads
B) be an affordable way to reach customers beyond your geographic area
C) provide an efficient method to provide information about a company and their products
D) All of the above
10) E-commerce is replacing traditional retailing.
11) A survey reports that 84 percent of consumers trust online reviews as much as personal
recommendations.
12) Online sales and Internet activity will account for more than 60 percent of total retail sales.
13) Research indicates that younger audiences do not take the time to seek product information
before they make a purchase.
14) The Web is one of the most efficient ways of reaching both new and existing customers.
15) More than 75 percent of small business owners have Web sites.
16) For many entrepreneurs, the key barrier to not using the Web as a business tool is that they
do not see any benefits to selling online.
17) The Web typically lacks the ability to lower the cost of doing business.
18) Companies quickly learn that setting up a Web site is only the first investment required. The
site leads to an ongoing investment of resources – time, money, energy and talent.
19) Measuring the success of its Internet-based sales effort is essential if a company is to remain
relevant to customers whose tastes, needs, and preferences are always changing.
20) Measuring the success of its Web-based sales is not essential because customer tastes and
preferences are always changing.
21) How significant are the Internet and a Web site presence to small businesses of the twenty-
first century? How have they transformed the way we do business?
22) Identify the benefits of selling on the Web.
23) After years of being an entrepreneur, Wynn has come to you for help in establishing his first
Web site. He has expressed a desire to have a site with all the “bells and whistles” he can get.
What should your advice to him be? Which other factors should he consider before launching an
e-commerce site?
Mini-Case 10-1: Marketing a Nonprofit – Virtual Opportunities
New Wave Chance Youth Club is a local youth organization supported solely by the donations
of individuals and the local church community. Its co-founders, Valerie and Kristen, are
considering launching a Web site to promote upcoming events and raise money for a new gym.
Their good friend Paul has volunteered to develop a Web site, which they feel will help promote
their efforts.
24) How might a Web site benefit the youth club?
25) Entrepreneurs should make sure they do not fall victim to any of the e-commerce myths.
Which of the following is not an e-commerce myth?
A) Setting up a business on the Web is easy and inexpensive.
B) If I launch a site, customers will flock to it.
C) Making money on the Web is easy.
D) Privacy and site security is an important issue on the Web.
26) To be successful online, small companies must create Web sites with features that appeal to
experienced Web shoppers, such as ________.
A) simple navigation and customer reviews
B) solid security and quick access to product information
C) videos and blogs
D) the successful Web site will include all the above
27) The intentional and targeted promotion of a Web site is ________.
A) critical to online success
B) optional because once you are on the Web, you will get traffic and sales
C) a luxury that most small businesses cannot afford
D) contrary to current Web trends
28) Successful e-tailers have discovered that these factors enhance their reputations for online
customer service ________.
A) comprehensive FAQ pages and e-mail order confirmation with shipment notices
B) visible telephone and e-mail contact information
C) quick responses to questions with meaningful information
D) All of these factors enhance a Web-based reputation.
29) ________ monitor customers’ behavior while they are on a site, giving Web-based
businesses the information they need to make their Web sites and their online ________ efforts
more effective.
A) Wikis; social marketing
B) Tracking tools; marketing
C) Tracking tools; security
D) Tracking tools; listings
30) An important part of any e-commerce effort is ________.
A) the use of current technology and its successful implementation
B) the ability to understand the underlying business and to develop a workable business model
C) to have a site that is fast and dependable
D) to have high traffic to the site, regardless of the customers’ interest in what the site actually
offers
31) Before a Web site can become the foundation for a successful e-business ________.
A) the technology must be right
B) it should be previewed by a Web designer
C) it must be created with the target audience in mind
D) the physical storefront must be established
32) Building a Web strategy based on a clear definition of the company’s target audience and an
understanding of those customers’ needs, wants, likes, and dislikes is ________.
A) relatively unimportant for a company’s Web site due to its flexibility
B) something that the entrepreneur no longer has to focus on to realize success
C) also critically important for a company’s presence on the Web
D) an exercise that should eventually be addressed after the site is launched
33) The entrepreneurs who are proving to be the most successful in e-commerce are those who
know how ________.
A) their industries work, inside and out
B) technology works, inside and out
C) to turn a profit
D) to effectively finance their e-commerce effort
34) The most common reasons for leaving a site without purchasing include which of the
following?
A) Shipping charges were too high.
B) Site did not look trustworthy.
C) Customers could not find the items they were looking for.
D) All of the above
35) Which of the following is not a common reason customers leave Web sites before checking
out?
A) Total shipping charges were too high.
B) The privacy policy was not posted.
C) The shopping cart was too hard to find.
D) The site did not appear trustworthy.
36) Which of following is not a key to promoting a website?
A) Networking
B) Connecting
C) Frequenting
D) Interacting
37) The most significant ways online companies can bolster customer service include all of the
following except ________.
A) create a well-staffed and well-trained customer response team
B) offer a simple return policy
C) provide an easy order tracking process
D) make financing available
38) The single most common reason for abandoning online shopping carts is ________.
A) shipping and handling charges were too high
B) delivery times were too long and the checkout process required too much information and
time
C) there was insufficient product information available
D) the inability to compare the final price before buying
39) The ________ while downloading a Web page is one of the most important determinants of
its sales effectiveness.
A) visual stimuli
B) “flash and show”
C) memory required
D) time required
40) Although e-commerce can lower many costs of doing business, it still requires ________.
A) a professional Web designer’s input
B) a basic infrastructure in the distribution channel to process orders, maintain inventory, fill
orders, and handle customer service
C) a brick-and-mortar store presence
D) None of the above
41) The average conversion rate for e-commerce sites is ________ percent.
A) 2.82
B) 3.16
C) 4.91
D) 5.71
42) Listing a site with a popular Web search engine will guarantee that surfing customers will
find your site.
43) Virtual shop owners using banner ads have no reason to buy ads in traditional advertising
media.
44) Experienced online shoppers tend to be unforgiving, quickly clicking to another site if their
shopping experience is unsatisfactory or they are unable to find the products and information
they want.
45) Making money on the Web is easy.
46) It is important that customers trust the Web sites they visit and one study reports that 89
percent of consumers worry about their privacy online.
47) Businesses that publish privacy policies, and then adhere to them, build trust among their
customers, an important facet of doing business on the Web.
48) One of the surest ways to alienate online customers is to abuse the information collected
from them by selling it to third parties or by spamming them with unwanted solicitations.
49) Trust is the foundation on which the long-term customer relationships that are so crucial to
Web success are built.
50) Building a successful e-business does not necessarily require a well thought-out strategy, it
simply involves securing a good URL and getting online.
51) The concept of a traditional marketing strategy is not necessary in building a successful e-
business.
52) The most important part of any e-commerce effort is technology.
53) E-commerce requires focusing on technology first and then determining how the technology
fits the business idea.
54) On the Web, service is not as important as it is in a traditional retail environment.
55) The most common reason online customers abandon their shopping carts is that the shipping
charges are too high.
56) Identify the 11 myths of e-commerce and capture one aspect that negates that myth.
57) The amount of time the average person spends online is ________ than (s)he spends
watching television.
A) less
B) about the same
C) almost one-half
D) more
58) Rather than trying to compete head-to-head with the dominant players on the Web with
greater access to resources, entrepreneurs should consider focusing on ________.
A) serving a market niche
B) serving a geographic niche
C) only brick-and-mortar retail channels
D) building a Web site in-house
59) Many Web sites seek to create, develop, and facilitate a ________.
A) technology that is fast and complex
B) site that appeals to a broad range of diverse visitors
C) community of customers with similar interests
D) site that provides a variety of information that most anyone can find useful
60) Customers will typically welcome well-constructed permission e-mail that directs them to
company sites for information or special deals, unlike unsolicited and universally despised e-
mail known as ________.
A) spam
B) electronic flyers
C) voice mail
D) clipboards
61) Strategies for successful e-commerce efforts should include all of the following except
________.
A) focusing on a niche market
B) developing a community of customers
C) attracting visitors by giving away “freebies”
D) adding value to recipients by sending spam e-mail
62) For entrepreneurial companies that lack brand and name recognition, and if building name
recognition is one of the keys to success on the Web, one effective and affordable option may be
to ________.
A) invest more in online promotion
B) rely on viral marketing
C) develop better brand recognition
D) form strategic alliances with larger companies that can add credibility
63) Visitors begin to evaluate the credibility of a Web site as soon as they arrive. Which of the
following does not help develop a site’s credibility?
A) Posting a privacy policy.
B) Citing reference sources.
C) Presenting fair and objective information.
D) Avoiding the promotion of brand names.
64) Businesses selling less well-known brands should ________.
A) reduce prices
B) offer freebies
C) use customer testimonials and endorsements
D) All of the above
65) Approximately ________ percent of Web users speak English.
A) 38
B) 26
C) 37
D) 29
66) ________ percent of small business owners use social media in their marketing mix.
A) 65
B) 58
C) 55
D) 71
67) One common mechanism to attract international visitors is to include several ________.
A) alternative forms of payment options
B) language buttons
C) images reflecting multiple cultures
D) colors and symbols reflective of international cultures
68) ________ of the time mobile users spend online is on apps.
A) 90
B) 80
C) 70
D) 60
69) Examples of social media networks include ________.
A) Facebook
B) Twitter
C) YouTube
D) All the above