Marketing Multiple Choice Solutions: Marketing in the internet age

CHAPTER 3
MARKETING IN THE INTERNET AGE
MULTIPLE CHOICE QUESTIONS
1. All of the following would be considered to be specific forces that underlie the new
Internet age EXCEPT:
a. digitalization and connectivity.
b. the explosion of the Internet.
c. customization and customerization.
d. increasing affluence and income in the United States.
Answer: (d) Difficulty: (2) Page: 78
2. Which of the following best characterizes digital information?
a. a stream of zeros and ones, or bits
b. something made possible by high speed printers and color reproduction
c. information in virtual space
d. three-dimensional space containing compacted data
Answer: (a) Difficulty: (1) Page: 78
3. Today a growing number of appliances and systems operate on digital information.
For bits to flow from one appliance or location to another requires ___________, a
telecommunications network.
a. customization
b. customerization
c. connectivity
d. concentration
Answer: (c) Difficulty: (2) Page: 78, 79
4. ____________ are networks that connect people within a company to each other and
to the company network.
a. Internets
b. Intranets
c. Extranets
d. Compunets
Answer: (b) Difficulty: (1) Page: 79

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5. A network that connects a company with its suppliers and distributors is called a(n):
a. Internet.
b. Intranet.
c. Extranet.
d. Compunet.
Answer: (c) Difficulty: (2) Page: 79
6. The Johnson Company is seeking to expand its business onto the “information
highway” made possible by recent advances in technology. To do this, the Johnson
Company would most likely choose the:
a. Internet.
b. Intranet.
c. Extranet.
d. Compunet.
Answer: (a) Difficulty: (1) Page: 79
7. By early 2001, Internet penetration in the United States had reached close to:
a. 100 percent.
b. 90 percent.
c. 75 percent.
d. 60 percent.
Answer: (d) Difficulty: (3) Page: 79
8. The explosive worldwide growth in ___________ usage forms the heart of the
so-called New Economy.
a. population
b. cell-technology
c. Internet
d. Intranet
Answer: (c) Difficulty: (1) Page: 79
9. Established store-based retailers of all kinds began to doubt their futures as
competitors sprung up selling their products and services via the Internet. They

feared being _______________ by the new e-tailers.
a. upstaged
b. technologically intermediated
c. disintermediated
d. contaminated
Answer: (c) Difficulty: (3) Page: 80
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10. If brick-and-mortar firms such as Barnes & Noble or Wal-Mart start their own
online sales channels, they would become a ______________ firm.
a. click-only
b. click-and-mortar
c. disintermediated
d. bits-and-mortar
Answer: (b) Difficulty: (1) Page: 80
11. The Old Economy revolved around ____________ companies that mainly focused
on standardizing their production, products, and business processes.
a. service
b. information
c. entrepreneurial
d. manufacturing
Answer: (d) Difficulty: (2) Page: 80
12. In the Old Economy, companies felt that a key to managing their assets would be to
set up command-and-control systems that would run their businesses like:
a. customers would run them.
b. service firms ran.
c. machines.
d. monopolies.
Answer: (c) Difficulty: (2) Page: 80
13. In _______________, the company leaves it to individual customers to design the
offering.

a. customization
b. customerization
c. differentiation
d. standardization
Answer: (b) Difficulty: (2) Page: 80
14. ______________ includes all electronics-based information exchanges within or
between companies and customers.
a. E-commerce
b. E-marketing
c. E-communication
d. E-business
Answer: (d) Difficulty: (2) Page: 82
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15. ___________________ involves buying and selling processes supported by
electronic means, primarily the Internet.
a. E-commerce
b. E-marketing
c. E-communication
d. E-business
Answer: (a) Difficulty: (2) Page: 82
16. Within e-markets, marketplaces have become:
a. market regions.
b. market zones.
c. marketspaces.
d. marketdynamos.
Answer: (c) Difficulty: (1) Page: 82
17. The flip side of e-marketing is:
a. e-advertising.
b. e-selling.
c. e-commerce.

d. e-purchasing.
Answer: (d) Difficulty: (1) Page: 82
18. All of the following could be listed as benefits to buyers should they choose to buy
via the Internet EXCEPT:
a. it can be convenient.
b. it always provides buyers with the lowest competitive prices.
c. it can provide buyers with greater product access and selection.
d. it can provide buyers with access to a wealth of comparative information.
Answer: (b) Difficulty: (2) Page: 82
19. Buyers can often use the seller’s Web site to create exactly the configuration
of information, products, or services they desire. Which of the following buyer
benefits would most appropriately match the above phrase?
a. The Internet can be convenient.
b. The Internet is interactive and immediate.
c. The Internet can provide buyers with greater product access and selection.
d. The Internet can always provide the lowest prices on merchandise.
Answer: (b) Difficulty: (2) Page: 82, 83
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20. All of the following could be listed as benefits to sellers should they choose to sell
via the Internet EXCEPT:
a. the Internet is a powerful tool for customer relationship building.
b. the Internet is a more secure place to conduct transactions than in a retail
environment.
c. the Internet reduces costs and increases speed and efficiency.
d. the Internet offers truly global commerce.
Answer: (b) Difficulty: (2) Page: 83, 84
21. One author concludes that Web customers are often very loyal, and the Internet
promotes this loyalty. This would be an example of which of the following benefits
to sellers for using the Internet to conduct commerce?
a. The Internet is a powerful tool for customer relationship building.

b. The Internet is a more secure place to conduct transactions than in a retail
environment.
c. The Internet reduces costs and increases speed and efficiency.
d. The Internet offers truly global commerce.
Answer: (a) Difficulty: (2) Page: 83, 84
22. Which of the following would not be considered to be among the major Internet
domains?
a. B2C (business-to-consumer)
b. B2B (business-to-business)
c. G2C (government-to-consumer)
d. C2C (consumer-to-consumer)
Answer: (c) Difficulty: (1) Page: 84
23. Which of the following most accurately describes a transaction wherein online
selling of goods and services goes to final consumers?
a. B2C
b. B2B
c. C2B
d. C2C
Answer: (a) Difficulty: (2) Page: 84
24. Although Internet users are still younger on average than the population as a whole,
consumers aged 50 and older make up:
a. almost 10 percent.
b. almost 20 percent.
c. almost 30 percent.
d. almost 40 percent.
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Answer: (b) Difficulty: (2) Page: 85
25. With respect to Internet usage, Americans at the lower end of the socioeconomic
ladder are more likely to view the Internet as:
a. a way to accelerate their knowledge acquisition and as a means to step up the

ladder.
b. a technological roadblock that holds them down.
c. a kind of home entertainment center for fun and games.
d. a mechanism to correct social injustice and enhance income.
Answer: (c) Difficulty: (3) Page: 87, Marketing at Work 3-1
26. With respect to the dollar volume for transactions, which of the following
Internet domains is expected to reach more than three trillion by 2003?
a. B2C
b. B2B
c. C2B
d. C2C
Answer: (b) Difficulty: (1) Page: 89
27. Much of B2B e-commerce takes place in ____________, which are huge
e-marketspaces in which buyers and sellers find each other online, share information,
and complete transactions efficiently.
a. global networks
b. private trading networks
c. open trading networks
d. Oracle trading networks
Answer: (c) Difficulty: (2) Page: 89
28. B2B trading networks that link a particular seller with its own trading partners are
called:
a. global networks.
b. private trading networks.
c. open trading networks.
d. Oracle trading networks.
Answer: (b) Difficulty: (2) Page: 90
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29. Josh Nielsen has decided to sell demonstration ski equipment that he has obtained
from a Head Ski salesperson via eBay using its auction feature. Which of the

following Internet domains would most accurately describe the form of business
Josh is using?
a. B2C
b. B2B
c. C2B
d. C2C
Answer: (d) Difficulty: (2) Page: 91
30. Sheryl Scott checked in to her favorite “chat room.” In her chat room, she was able
use library features, exchange information with online acquaintances in real time, and
make new friends with whom she can air her views on a variety of subjects. Which of
the following terms would be an appropriate description of Ms. Scott’s chat room?
a. an open trading network
b. a private trading network
c. a forum
d. a private channel
Answer: (c) Difficulty: (2) Page: 91
31. _____________ is the Internet version of forums. However, such groups are
limited to people posting and reading messages on a specified topic, rather than
managing libraries or conferencing.
a. An open trading network
b. A private trading network
c. A private channel
d. A newsgroup
Answer: (d) Difficulty: (3) Page: 92
32. Using Priceline.com, would-be buyers bid for airline tickets, hotel rooms, rental cars,
and even home mortgages, leaving the sellers to decide whether to accept their offers.
Which of the following Internet domains best matches the above example?
a. B2C
b. B2B
c. C2B

d. C2C
Answer: (c) Difficulty: (3) Page: 92
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33. If an e-marketing distribution channel consisted of a seller, brick-and-mortar store
channels, and consumers, which of the following most accurately describes this
method of marketing?
a. brick-and-mortar (brick-only) marketers
b. click-only marketers
c. click-and-mortar marketers
d. click-and-service marketers
Answer: (a) Difficulty: (1) Page: 92, Figure 3-3
34. If an e-marketing distribution channel consisted of a seller, brick-and-mortar store
channels, e-commerce channels (and interaction between the brick-and-mortar store
and e-commerce channels), and consumers, which of the following most accurately
describes this method of marketing?
a. brick-and-mortar (brick-only) marketers
b. click-only marketers
c. click-and-mortar marketers
d. click-and-service marketers
Answer: (c) Difficulty: (3) Page: 92, Figure 3-3
35. Which of the following would be the most appropriate example of a transaction site?
a. Amazon.com
b. Yahoo
c. AOL
d. eBay
Answer: (d) Difficulty: (3) Page: 93
36. Which of the following would be the most appropriate example of a search
engine/portal?
a. Amazon.com
b. Yahoo

c. AOL
d. eBay
Answer: (b) Difficulty: (1) Page: 93
37. Dot-coms failed for a variety of reasons. Which of the following would be one of
the chief reasons for this failure?
a. Companies were unable to secure recognizable Web addresses.
b. Companies had poor technological advice and had great technical difficulties.
c. Companies tended to devote too much effort to acquiring new customers instead
of building loyalty and purchase frequency among current customers.
d. Companies tended to have inflated prices which discouraged purchase.
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Answer: (c) Difficulty: (2) Page: 93
38. According to information found in the text, all of the following would be potential
sources of e-commerce revenue EXCEPT:
a. patent royalties.
b. product and service sales income.
c. profile income.
d. market research and information fees.
Answer: (a) Difficulty: (3) Page: 95, Table 3-1
39. Many Web sites have built elaborate databases based on customer information. If
the Web site were to sell this information and use the database as a means of
generating revenue for the firm, this would be an illustration of which of the
following?
a. referral income
b. product and service sales income
c. profile income
d. market research and information fees
Answer: (c) Difficulty: (2) Page: 95, Table 3-1
40. eBay puts buyers in touch with sellers and takes from a 1.25 percent to a 5 percent
commission on each sale. This would be an illustration of which of the following

sources of e-commerce revenue?
a. referral income
b. product and service sales income
c. profile income
d. transaction commissions and fees
Answer: (d) Difficulty: (2) Page: 95, Table 3-1
41. Click-and-mortar companies are becoming more popular. Of the top 50 retail Web
sites, ranked by the number of unique visitors, __________ were click-and-mortar
retailers versus their Internet-only retailing counterparts.
a. 45 percent
b. 56 percent
c. 68 percent
d. 75 percent
Answer: (b) Difficulty: (3) Page: 96
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42. A(n) ________________ is a Web site designed to build customer goodwill and to
supplement other sales channels rather than to sell the company’s products directly.
a. e-mail and Webcasting site
b. corporate Web site
c. online advertising or promotion Web site
d. Web community site
Answer: (b) Difficulty: (2) Page: 97, Figure 3-4
43. A company provides information about its history, its mission and philosophy, and
the products and services that it offers on its:
a. e-mail and Webcasting site.
b. corporate Web site.
c. online advertising or promotion Web site.
d. Web community site.
Answer: (b) Difficulty: (2) Page: 98
44. A Web site that engages consumers in interactions that will move them closer to a

direct purchase or other marketing outcome is called a(n):
a. e-mail and Webcasting site.
b. online advertising or promotion Web site.
c. marketing Web site.
d. Web community site.
Answer: (c) Difficulty: (2) Page: 98
45. The key to designing an attractive Web site is to:
a. create enough value and excitement to get customers to come to the site, stick
around, and come back again.
b. have cutting edge graphics that demonstrate the technology available to the Web
marketer.
c. have a least $2 million in design funds which provide for the interactivity
demanded by today’s Web savvy consumer.
d. be willing beg, borrow, or steal ideas from the top Web page designers and
incorporate these ideas into the firm’s own site.
Answer: (a) Difficulty: (2) Page: 99
46. For low-interest Web sites, such as one for dental floss, a company should create a
corporate Web site to do all of the following EXCEPT:
a. answer customer questions.
b. build goodwill and excitement.
c. become the primary selling channel because of the reach of the Internet.
d. collect customer feedback.
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Answer: (c) Difficulty: (2) Page: 99
47. All of the following would be among the 7Cs for effective Web site design EXCEPT:
a. context.
b. content.
c. community.
d. conceptualization.
Answer: (d) Difficulty: (3) Page: 100

48. With respect to the 7Cs of effective Web site design, ___________ refers to a site’s
layout and design.
a. context
b. content
c. community
d. customization
Answer: (a) Difficulty: (2) Page: 100
49. All of the following are characteristics of effective Web sites EXCEPT:
a. the lowest prices within an industry group.
b. deep and useful information.
c. changing promotional features.
d. links to other related sites.
Answer: (a) Difficulty: (2) Page: 100
50. Advertising that appears while consumers are surfing the Web, including banner and
tickler ads, interstitials, skyscrapers, and other forms is called:
a. specialty advertising.
b. portal promotion.
c. online advertising.
d. virtual advertising.
Answer: (c) Difficulty: (1) Page: 101
51. Sam Harrison is reviewing a Web site for tennis shoes. He notices several
advertisements that move across the screen announcing special discount travel offers
if he purchases Nike tennis shoes. These crawling advertisements are called:
a. interstitials.
b. content sponsorships.
c. banner ads.
d. microsites.
Answer: (c) Difficulty: (1) Page: 101
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52. __________ are online ads that pop up between changes on a Web site.

a. Interstitials
b. Content sponsorships
c. Banner ads
d. Browser ads
Answer: (a) Difficulty: (3) Page: 101
53. If Coca-Cola were to pay Web surfers a small fee to watch their ads, these ads would
be called:
a. interstitials.
b. content sponsorships.
c. banner ads.
d. browser ads.
Answer: (d) Difficulty: (2) Page: 101
54. Which of the following marketing practices would be about the same thing as the
Internet practice of viral marketing?
a. coupon clipping
b. word-of-mouth marketing
c. disintermediation
d. tele-marketing
Answer: (b) Difficulty: (3) Page: 102
55. Which of the following Web sites is the best illustration of a Web community?
a. Ben & Jerry’s Ice Cream—www.benjerry.com.
b. Nike—www.nike.com.
c. Hallmark Greeting Cards—www.hallmark.com.
d. iVillage—www.ivillage.com.
Answer: (d) Difficulty: (2) Page: 104
56. Jack Strong would like to receive up-to-date financial information so he can carefully
manage his financial portfolio. He decides to use Internet Financial Network’s
Infogate to supply financial news, market data, and real-time stock quotes to his
PC. Internet Financial Network is supplying Mr. Strong with a ____________
service.

a. portal
b. corporate Web site
c. Webcasting
d. Interstitial
Answer: (c) Difficulty: (2) Page: 105
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57. Webcasting is also known as _____________, as it affords an attractive channel
through which online marketers can deliver their Internet advertising or other
information content.
a. pull programming
b. push programming
c. customized programming
d. viral programming
Answer: (b) Difficulty: (3) Page: 107
58. Along with its considerable promise, e-commerce faces many challenges. All of the
following, according to the text, would be among those challenges EXCEPT:
a. poor revenue potential.
b. limited consumer exposure and buying.
c. skewed user demographics and psychographics.
d. chaos and clutter.
Answer: (a) Difficulty: (2) Page: 108
59. Online users still tend to be somewhat more upscale and more technology-oriented
than the general population. Which of the following e-commerce challenges most
appropriately corresponds with this statement?
a. ethical concerns
b. limited consumer exposure and buying
c. skewed user demographics and psychographics
d. chaos and clutter
Answer: (c) Difficulty: (2) Page: 108
60. One study found that a Web site must capture a Web surfer’s attention within eight

seconds or lose them to another site. Which of the following e-commerce challenges
most appropriately corresponds with this statement?
a. ethical concerns
b. security
c. skewed user demographics and psychographics
d. chaos and clutter
Answer: (d) Difficulty: (3) Page: 108
TRUE/FALSE QUESTIONS
61. According to information provided in the text, Charles Schwab now runs the
world’s largest e-commerce site.
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Answer: (True) Difficulty: (2) Page: 78
62. New types of intermediaries are among the four specific forces underlying the new
Internet age.
Answer: (True) Difficulty: (2) Page: 78, Figure 3-1
63. The increasing age factor of U.S. consumers is among the four specific forces
underlying the new Internet age.
Answer: (False) Difficulty: (2) Page: 78, Figure 3-1
64. Digital information, which operates a growing number of appliances and systems,
comes in streams of Xs and 0s.
Answer: (False) Difficulty: (1) Page: 78
65. Extranets are networks that connect a company with its suppliers and distributors.
Answer: (True) Difficulty: (1) Page: 79
66. By early 2001, Internet penetration in the United States had reached close to 80
percent.
Answer: (False) Difficulty: (3) Page: 79
67. The Old Economy revolved around advertising and promotion that mainly focused
on the idea of sell, sell, sell.
Answer: (False) Difficulty: (2) Page: 80
68. In customerization, the company leaves it to individual customers to design the

offering.
Answer: (True) Difficulty: (1) Page: 80
69. The text defines e-business as buying and selling processes supported by electronic
means, primarily the Intranet.
Answer: (False) Difficulty: (2) Page: 82
70. E-markets have physical marketplaces just like traditional commerce.
Answer: (False) Difficulty: (1) Page: 82
71. B2C e-commerce is the online selling of goods and services to final consumers.
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Answer: (True) Difficulty: (1) Page: 84
72. Trading networks, auction sites, spot exchanges, barter sites, and online product
catalogs would all be examples of B2B e-commerce.
Answer: (True) Difficulty: (2) Page: 89
73. Private trading networks (PTNs) are huge e-marketspaces in which B2B buyers and
sellers find each other online, share information, and complete transactions efficiently.
Answer: (False) Difficulty: (2) Page: 89
74. Buyers using Priceline.com to place bids on airline tickets would be an example of
C2C e-commerce.
Answer: (False) Difficulty: (2) Page: 92
75. Click-only marketers use e-commerce channels to connect to consumers.
Answer: (True) Difficulty: (1) Page: 92, Figure 3-3
76. One of the sources of e-commerce revenue cited by a table in the text is that of
endorsement fees.
Answer: (False) Difficulty: (3) Page: 95, Table 3-1
77. A corporate Web site is designed to build sales without regard to practices of any
brick-and-mortar counterpart.
Answer: (False) Difficulty: (2) Page: 97, Figure 3-4
78. The C (of the 7Cs of effective Web site design) that concerns itself with Web site
layout and design is Context.
Answer: (True) Difficulty: (2) Page: 100

79. The C (of the 7Cs of effective Web site design) that concerns itself with a Web
site’s ability to tailor itself to different users or to allow users to personalize the site
is Connection.
Answer: (False) Difficulty: (2) Page: 100
80. New online ad formats include skyscrapers, which are online ads that pop up
between changes on a Web site.
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Answer: (False) Difficulty: (3) Page: 101
81. Sam gets an e-mail from Microsoft describing a new feature on Windows 2000. Sam
then uses his e-mail to tell Bart about the new feature. This would be an example of
viral marketing.
Answer: (True) Difficulty: (2) Page: 102
82. Viral marketing is the automatic downloading of customized information of interest
to recipient’s PCs.
Answer: (False) Difficulty: (3) Page: 102, 105
83. One of the major challenges facing online marketers is the inability to ensure privacy.
Answer: (True) Difficulty: (1) Page: 108
ESSAY QUESTIONS
84. List and briefly discuss the four specific forces that underlie the new Internet age.
Answer:
The four specific forces referred to in the text are:
a). Digitalization and connectivity—much of today’s business operates on digital
information, which flows through connected networks.
b). The explosion of the Internet—the Internet has grown explosively to become the
revolutionary technology of the new millennium, empowering consumers and businesses
alike with the blessings of connectivity.
c). New types of intermediaries—new Internet marketers and channel relationships have
arisen to replace some types of traditional marketers. Marketing offers can be tailored.
d). Customization and customerization—the New Economy is blurring the boundaries
between industries, allowing companies to pursue opportunities that lie at the

convergence of two or more industries.
Difficulty: (2) Page: 78-81
85. Discuss the difference between customization and customerization. Use examples to
illustrate the difference.
Answer:
Customization involves taking the initiative to customize the market offering. For
example, a Levi-Strauss salesperson takes a person’s measurements, and the company
customizes the jeans at a factory.
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In customerization, the company leaves it to the individual customers to design the
offering. For example, jeans customers take their own measurements and add specific
features that they may want in their jeans, such as colorful patches.
Difficulty: (1) Page: 80
86. State the definitions of e-business, e-commerce, and e-marketing. Discuss the
differences between the concepts.
Answer:
a). E-business—the use of electronic platforms (intranets, extranets, and the Internet) to
conduct a company’s business.
b). E-commerce—buying and selling processes supported by electronic means, primarily
the Internet.
c). E-marketing—the “e-selling” side of e-commerce the company’s efforts to
communicate about, promote, and sell products and services over the Internet.
E-business focuses on the platforms for delivery of business activities. E-commerce
focuses on the processes for bringing goods and services to consumers via the Internet.
E-marketing is the e-selling side of e-commerce (using the promotional mix components
over the Internet).
Difficulty: (2) Page: 82
87. E-commerce and the Internet bring many benefits to both buyers and sellers. List and
briefly describe the major benefits to (a) buyers and (b) sellers.
Answer:

Benefits to buyers:
a). It can be convenient. Customers do not have to battle traffic, find parking spaces, and
trek through stores and aisles to find and examine products.
b). Buying is easy and private. Customers encounter fewer buying hassles and don’t
have to face salespeople or open themselves up to persuasion and emotional pitches.
c). The Internet often provides buyers with greater product access and selection. The
sky is the limit on the Web.
d). Buyers have access to a wealth of comparative information—information about
companies, products and competitors.
e). Online buying is interactive and immediate. Consumers have a greater measure of
control.
Benefits to sellers:
a). The Internet is a powerful tool for customer relationship building.
b). The Internet and other electronic channels can reduce costs and increase speed and
efficiency. E-marketers avoid the expense of maintaining a store and the accompanying
costs of rent, insurance, and utilities. Communication costs are less.
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c). E-marketing offers greater flexibility. Marketers are allowed to make ongoing
adjustments to offers and programs.
d). The Internet is a truly global medium that allows buyers and sellers to click from one
country to another in seconds.
Difficulty: (2) Page: 82-84
88. There are four major Internet domains through which e-commerce can be conducted.
List and briefly describe each.
Answer:
a). B2C (business-to-consumer) e-commerce—the online selling of goods and services to
final consumers. This form is targeted to consumers and is initiated by businesses.
b). B2B (business-to-business) e-commerce—using B2B trading networks, auction sites,
spot exchanges, online product catalogs, barter sites, and other online resources to reach
new customers more effectively, and obtain buying efficiencies and better prices. This

form is targeted to businesses and is initiated by businesses.
c). C2C (consumer-to-consumer) e-commerce—online exchanges of goods and
information between final consumers. This form is targeted to consumers and is initiated
by consumers.
d). C2B (consumer-to-business) e-commerce—online exchanges in which consumers
search out sellers, learn about their offers, and initiate purchases, sometimes even driving
transaction terms. This form is targeted to businesses and is initiated by consumers.
Difficulty: (3) Page: 84-92, Figure 3-2
89. Define and then discuss the differences between open trading networks and private
trading networks.
Answer:
a). Open trading networks—huge e-marketers in which B2B buyers and sellers find each
other online, share information, and complete transactions efficiently. However, only
about 7 percent of all B2B transactions use this form. Example: PlasticsNet.com.
b). Private trading networks (PTNs)—B2B trading networks that link a particular seller
with its own trading partners. Account for 93 percent of all B2B transactions. PTNs give
sellers greater control over product presentation (instead of just completing transactions)
and allow them to build deeper relationships with buyers and sellers by providing value-
added services.
Difficulty: (2) Page: 89, 90
90. Examine the three types of e-marketers, characterize each, and describe the channels
each uses to reach consumers.
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Answer:
a). Brick-and-mortar (brick-only) marketers—these marketers would be considered the
types of marketers present before the Internet revolution and the advent of the New
Economy. In this form, a seller would sell through brick-and-mortar store channels
(intermediaries) to consumers.
b). Click-only marketers—the so-called dot-coms, which only operate online without
any brick-and-mortar market presence. In this form, a seller uses e-commerce channels

to reach consumers.
c). Click-and-mortar marketers—this is a hybrid form. It is a traditional brick-and-
mortar company that has added e-marketing to its operations. In this form, a seller uses a
combination of brick-and-mortar and e-commerce channels to reach consumers.
Difficulty: (2) Page: 92-97, Figure 3-3
91. List and briefly characterize the four methods for setting up an e-marketing presence.
Answer:
a). Corporate Web site—a Web site designed to build customer goodwill and supplement
other sales channels, rather than to sell the company’s products directly. This is the most
basic type of e-marketing presence. These sites generally provide information about the
company’s history, its mission and philosophy, and the products and services that it
offers.
b). Marketing Web site—a Web site that engages consumers in interactions that will
move them closer to a direct purchase or other marketing outcome. Such sites might
include a catalog, shopping tips, and promotional features.
c). Online advertising and promotion—advertising that appears while consumers are
surfing the Web, including banner and ticker ads, interstitials, skyscrapers, and other
forms.
d). Web communities—Web sites upon which members can congregate online and
exchange views on issues of common interest. These communities are the online
equivalent of a coffeehouse (a place where everybody knows your e-mail address). Web
communities can either be social or work-related.
Difficulty: (3) Page: 97-105, Figure 3-4
92. List and briefly characterize the 7Cs of effective Web site design.
Answer:
The 7Cs are:
a). Context—site’s layout and design
b). Content—text, pictures, sound, and video that the Web site contains
c). Community—the ways that the site enables user-to-user communication
d). Customization—site’s ability to tailor itself to different users, or allow users to

personalize the site
e). Communication—the ways the site enables site-to-user, user-to-site, or two-way
communication
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f). Connection—degree that the site is linked to other sites
g). Commerce—site’s capabilities to enable commercial transactions
Difficulty: (3) Page: 100
93. Briefly describe the following online advertising formats—banner ads, tickers,
interstitials, skyscrapers, browser ads, and rectangles.
Answer:
a). Banner ads—an ad that flashes information to the consumer while visiting a Web
page
b). Tickers—banner ads that move across the screen
c). Interstitials—online ads that pop up between changes on a Web site
d). Skyscrapers—tall, skinny ads at the side of a Web page
e). Browser ads—pay viewers to watch them
f). Rectangles—boxes that are much larger that a banner
Difficulty: (1) Page: 101
94. Describe what happens in “Webcasting.” Provide a descriptive example.
Answer:
Webcasting is the automatic downloading of customized information of interest to
recipients’ PCs, affording an attractive channel for delivering Internet advertising or other
information content. An example would be Internet Financial Network’s Infogate, which
sends up-to-date financial news, market data, and real-time stock quotes to subscribers in
the financial services industry for a fee.
Difficulty: (1) Page: 105
95. Many believe that e-commerce has a bright future. However, e-commerce will also
face many challenges in the next decade. List and briefly describe the five major
challenges discussed in the text. Be specific in your comments and descriptions.
Answer:

The major challenges are:
a). Limited consumer exposure and buying—although rapidly expanding, online
marketing still only reaches a limited marketspace. Market buying has not yet caught up
with browsing.
b). Skewed user demographics and psychographics—the audience is becoming more
mainstream, however, online users still tend to be somewhat more upscale and more
technology oriented than the general population. Mainstream products have a difficult
time being accepted.
c). Chaos and clutter—there are millions of Web sites and a staggering volume of
information. Navigating the Internet can be frustrating, confusing, and time-consuming
for consumers.
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d). Security—snooping on online transactions and interception of credit card numbers
are fears on the part of consumers. Poorer consumers have less access to the Internet.
e). Ethical concerns—privacy is a real issue. Information abuse and monitoring
consumer movements occurs frequently.
Difficulty: (3) Page: 108
APPLICATION QUESTION
96. Jason Smith has just created his own Internet business. Jason sells skis and ski
accessories via the Web. In order to have a low-cost source of supply, he has formed an
alliance with a manufacturer’s representative for a national ski line. The manufacturer’s
rep sells demo models of skis to Jason for cost once the demo’s useful life has expired.
In general, a good set of skis costs him 50 percent less than what it could be sold for in a
retail store. This allows for a good markup and a profit averaging about 20 percent.
However, Jason is looking to make more money from his operation. A friend tells him
that one of the ways to increase his income is to consider the following alternative ways
of generating revenue through his Web site: advertising income, alliance income, profile
income, and referral income. Consider yourself to be a consultant. Give Jason Smith
advice on how he might expand his revenue flow using all of the four forms mentioned
above. Be specific in your suggestions to him.

Answer:
According to the information found in Table 3-1, there are numerous ways e-commerce
merchants can expand their revenue. With respect to Mr. Smith’s opportunities, consider
the following:
a). Advertising income—sales of online advertising space can provide a major source of
revenue. Those that would like to reach Jason’s ski buyers could provide advertisements
for related products and services and have this information carried on Jason’s Web site.
For example, information on a ski resort or air fares to ski areas.
b). Alliance income—online companies can invite business partners to share costs in
setting up a Web site and offer them free advertising on the site. Jason could expand his
Web site or make it more attractive and interactive by using revenue from alliances. As
an example, a ski resort could enter into a partnership with Jason, and Jason would
provide a separate Web page where consumers could register online with the facility or
ski conditions could be posted.
c). Profile income—Web sites that have built databases containing the profiles of
particular target groups may be able to sell these profiles if they get permission first.
Jason could provide information to clothing manufacturers, other extreme sports
companies, resorts, airlines, or travel tours. This form of income would be a primary
consideration for Jason.
d). Referral income—Companies can collect revenue by referring customers to others.
Jason might be able to collect “finder’s fees” for providing clients to ski resorts, extreme
sports companies, airlines, et cetera. This would mean that a method would have to be
devised to conduct this form of marketing.
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Allow students to be creative with these answers. This could be given as an at-home
assignment.
Difficulty: (2) Page: 95, Table 3-1
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