Turban- 3e
Instructor’s Manual
Chapter 2
E-Marketplaces: Mechanisms, Tools, and Impacts of E-
Commerce
Learning Objectives
Upon completion of this chapter, you will be able to:
1. Describe the major electronic commerce (EC) activities and processes and the
mechanisms that support them.
3. List the major types of e-marketplaces and describe their features.
5. Describe the major types of auctions and list their characteristics.
7. Describe bartering and negotiating online.
9. Understand virtual worlds and their use in EC.
Content
Opening Case: Web 2.0 Tools at Eastern Mountain Sports
2.1 Electronic Commerce Mechanisms: An Overview
2.3 Customer Interaction Mechanisms: Storefronts, Malls, and Portals
2.5 Auctions, Bartering, and Negotiating Online
2.7 Virtual Worlds as an Electronic Commerce Mechanism
Managerial Issues
Supplementary Videos for this Chapter
1. Social Media in Plain English (3:44 min)
4. The Future of M-Commerce- Did you know 4.0 (4:30 min)
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Answers to Pause/Break Section Review Questions
Section 2.1 Review Questions
1. List the major EC activities.
2. List the major EC mechanisms.
3. Describe the selling–buying process among a selling company, its suppliers, and customers
(consult Exhibit 2.2).
4. Describe the major steps in the buying process (consult Exhibit 2.3).
Section 2.2 Review Questions
1. Define e-marketplace and describe its attributes.
2. What is the difference between a physical marketplace and an e-marketplace (marketspace)?
3. List the components of a marketspace.
4. Define a digital product and provide five examples.
Digital products are goods that can be transformed to digital formats and delivered over the
5. Describe private versus public e-markets.
Section 2.3 Review Questions
1. Describe electronic storefronts and e-malls.
2. List the various types of stores and e-malls.
3. What are information portals? List the major types.
4. List the roles of intermediaries in e-markets.
5. Describe e-distributors.
Section 2.4 Review Questions
1. List and briefly describe the dimensions by which electronic catalogs can be classified.
2. List the benefits of electronic catalogs.
Online catalogs have several advantages as seen in Exhibit 2.7. Some of these advantages
3. Explain how customized catalogs are created and used.
Customized catalogs take information from existing print catalogs and product information and
4. Compare search engines with software intelligent agents.
5. Describe an electronic shopping cart.
Section 2.5 Review Questions
1. Define auctions and describe how they work.
2. Describe the benefits of electronic auctions over traditional (off-line) auctions.
Electronic auctions are superior to traditional auctions because they do not suffer the same
3. List the four types of auctions.
4. Distinguish between forward and reverse auctions.
5. Describe the “name-your-own-price” auction model.
6. List the major benefits of auctions to buyers, sellers, and auctioneers.
Auctions provide a wide variety of benefits to buyers, sellers and auctioneers. Auctions provide
several advantages to buyers because they allow them to purchase goods from a wide variety of
7. What are the major limitations of auctions?
8. List the major impacts of auctions on markets.
9. Define bartering and describe the advantages of e-bartering.
10. Explain the role of online negotiation in EC.
1. Define blogs and bloggers.
2. Discuss the critical features that distinguish a blog from a user-produced regular Web page.
3. Describe the potential advantages and risks of blogs.
4. Discuss the commercial uses of blogs and wikis.
5. Define tags, folksonomy, and social bookmarking.
Tag – a nonhierarchical keyword or term assigned to a piece of information (such as an Internet
6. Define wikis.
Section 2.7 Review Questions
1. Define virtual worlds.
2. Describe avatars. Why do we use them?
3. List some business activities in virtual worlds. Categorize them by type.
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Answers to EC Application Case Questions
EC Application Case 2.1: WebMD
Questions
1. Visit webmd.com to learn more about the types of intermediation it provides. Write a report
based on your findings.
Student reports will vary.
2. How do the types in Question 1 differ from traditional intermediation services?
3. WebMD Health does not bring in much revenue despite the hefty increase in ad revenue. Should
the company be closed? Why or why not? (Check the financial reports at money.cnn.com or
business.yahoo.com.)
EC Application Case 2.2: Craigslist
Questions
1. Identify the business model used by Craigslist.
2. Visit craigslist.org and identify the social network and business network elements.
3. Why is Craigslist considered a site that “changes the world”?
4. What do you like about the site? What do you dislike about it?
Student responses will vary.
5. What are some of the risks and limitations of using this site?
Student responses will vary.
Some possible examples of risks include:
• Theft and crime
Answers to Individual Discussion Questions
1. Compare marketplaces with marketspaces. What are the advantages and limitations of each?
2. Compare wikis and blogs.
3. Discuss the competitive advantage of Craigslist in classifieds.
4. Discuss the value of a virtual world as an EC environment. Why does it attract users? Why
does it attract companies?
5. Discuss how wikis, blogs, and virtual worlds can be used for collaboration.
6. Discuss the reasons why Twitter is becoming so popular.
7. Discuss the potential risks of using Web 2.0 tools.
8. Discuss the need for portals in EC.
Answers to Class Discussion Questions
1. Compare and contrast competition in traditional markets with that in digital markets.
Competition in digital markets is generally more intense than that of traditional markets. In
2. Explain why sell-side and buy-side markets in the same company are usually separated,
whereas in an exchange they are combined?
3. Discuss the advantages of dynamic pricing over fixed pricing. What are the potential
disadvantages of dynamic pricing?
4. Some say that blogs and wikis are going to eliminate e-mail. Discuss.
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Student opinions will vary.
5. Should the content of Craigslist be monitored and controlled by the company? By users? By the
government?
Student opinions will vary.
6. What is the advantage of a business using eBay instead of conducting auctions from its own
site? Distinguish between C2C and B2B.
Internet Exercises
(Note: URLs may change over time; please check the Internet Exercises on the Turban Web
site for possible updates: www.pearsonhighered.com/turban.)
1. Go to cisco.com, google.com, and cio.com and locate information about the status of the
“virtual close.” Write a report based on your findings.
2. Examine how bartering is conducted online at tradeaway.com, buyersbag.com, u-
exchange.com and intagio.com. Compare the functionalities and ease of use of these sites.
3. Enter blogger.com and find its capabilities. Then enter blogsearch.google.com and find what
4. Enter mfgquote.com and review the process by which buyers can send RFQs to merchants of
their choice. Evaluate all of the online services provided by the company. Write a report based on
your findings.
With this service, individuals fill out forms to indicate the products or services that they are
5. Enter bloomsburgcarpet.com. Explain how the site solves the problem of sending carpet
sample books to representatives all over the country. What are the special features of the
electronic catalogs here? (Hint: It might be useful to read Kapp, 2001.)
6. Enter respond.com and send a request for a product or a service. Once you receive replies,
select the best deal. You have no obligation to buy. Write a short report on your experience.
The system is intended to allow customers to indicate particular types of items that they are
7. Enter Web 2.0 Journal at web2.sys-con.com and find recent material on wikis and blogs. Write
a report.
Student reports will vary.
8. Enter yahoo.com and find what personalization methods it uses.
9. Enter cars.com. List all services available to sellers and to buyers of cars. Compare it to
carsdirect.com. Also, identify the revenue sources of the sites.
10. Enter craigslist.org. From what you know about the design of Web sites and from
comparisons with monster.com, what suggestions would you make to improve the site?
Student reports will vary.
11. Enter ups.com.
a. Find out what information is available to customers before they send a package.
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Student reports will vary.
12. Register at Second Life, and enter the site.
Student reports will vary.
13. Create an avatar in Second Life. Let your avatar interact with avatars of some companies.
Why do we consider an avatar a mechanism for EC? Write a report.
Student reports will vary.
14. Enter ca.com/products and register. Take the Clever Path Portal Test Drive. (Flash Player
from Macromedia is required.) Then enter ibm.com and oracle.com/bea. Prepare a list of the
major products available for building corporate portals.
Student reports will vary.
15. Enter findwhitepapers.com/knowledgemanagement/corporate-portals. Find the white papers
about corporate portals and their justification. Prepare a report based on your findings.
Student reports will vary.
16. Enter sap.com and find the key capabilities of their enterprise portals. List the benefits of
using five of the capabilities of portals.
Student reports will vary. Students may focus on the content at
Benefits may include:
• Easier administration
17. Enter networksolutions.com. View the shopping cart demo. What features impress you the
most and why? What related services does it provide? Compare it to storefront.net and
nexternal.com.
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Student reports will vary.
18. Compare the shopping malls of Yahoo!, amazon.com, and internetmall.net.
Student reports will vary. Each of these services provides a “mall” with a shared shopping cart
Team Assignments and Role Playing
1. Read the opening case about EMS and answer the following questions.
a. Why not just have meetings and send e-mails rather than using blogs, wikis, and RSS
feeds?
b. What are the benefits to EMS of combining its BI system with the Web 2.0 tools?
c. In what ways is corporate performance bolstered?
d. How can customers of the retail stores utilize the Web 2.0 tools?
e. Can the company use any other Web 2.0 technologies? What and how?
Student answers will vary.
2. Assign each group to a large e-tailer (e.g.,Amazon.com, Walmart.com, Target.com, Dell.com,
Apple.com, and HP.com). Trace the purchasing process. Look at the catalogs, search engines,
shopping carts, and any other mechanism that improves e-shopping. Make a presentation that
will include recommendations for improving the existing process.
Student presentations will vary.
3. Enter en.wikipedia.org/wiki/Businesses_and_organizations_in_Second_Life and view the list of
businesses. Identify some virtual companies and explore several in depth. Find what product
(service) they offer and how much they charge if they sell their product (service). Then, identify
several companies that are related to real-world businesses. (e.g., SL Bay auctions allow you to
purchase real-world items with Linden dollars).
Student reports will vary.
4. Build your own business in Second Life (SL).This can be each member or each group. Using
the company cited in question four, determine what business you want to build. Then obtain a
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copy of Terdiman’s book (2008) or a similar guide. Register at SL and go to work. In your project
do the following:
a. Select a business category and develop a business strategy.
b. Develop a business plan and model (see the Online Tutorial) for your virtual enterprise.
c. Choose where to set up your business.
d. Conduct a budget and cash flow analysis (see Appendix B in Terdiman 2008).
e. Buy virtual land and other virtual properties.
f. Develop marketing and advertising plans (examine the competition!)
g. Look for any possible revenues; make a pricing decision.
h. Examine the possibility of running your business in “Teen SL.”
i. Plan all support business using the SL tools.
j. Watch for legal issues and other risks.
k. Build the business (using the SL tools).
l. Build a supporting blog. How would you use it for viral marketing?
Student reports will vary.
5. GM and eBay are experimenting with selling new cars on eBay. In California, 250 GM dealers
are using eBay as a channel to sell new cars. Customers can haggle with the dealers over the
Internet. This is negotiation, not auctions. Find information on who is selling new and used cars
online and how they do it. Write a report. Do you think the experiment will succeed?
Why or Why not?
Student opinions will vary.
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Closing Case 2.3: SECOND LIFE
Questions
1. Enter the Second Life site (secondlife.com) and identify EC activities there. (You need to
register for free and create an avatar.)
Student experiences will vary.
2. Which types of transactions are observable at the site?
3. Which business models are observable on the site?
4. If you were a travel agent, how would you utilize the site?
5. Have your avatar communicate with five others. Write a report on your experience.
Student reports will vary