325465465-Kotler-Chapter 3 PDF

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CHAPTER 3MARKETING IN THE INTERNET AGEMULTIPLE CHOICE QUESTIONS 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 affluenc...

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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...