Section 2.

1 Review Questions
1. List the major EC activities.
These activities are detailed in Exhibit 2.1.
2. List the major EC mechanisms. These mechanisms are detailed in Exhibit 2.1.
3. Describe the sellingbuying process among a selling company, its suppliers, and
customers (consult Exhibit 2.2).
The company purchases goods from its suppliers (B2B), then prepares them for
external sales (Intrabusiness transactions), then sells them to end customers (B2C).
4. Describe the major steps in the buying process (consult Exhibit 2.3).
These activities are detailed in Exhibit 2.3.
Section 2.2 Review Questions
1. Define e-marketplace and describe its attributes.
An online market, usually B2B, in which buyers and sellers exchange goods or
services; the three types of e-marketplaces are private, public, and consortia.
2. What is the difference between a physical marketplace and an e-marketplace
(marketspace)?
A marketspace is an electronic marketplace. While traditional marketplaces are
constrained by their physical locations, marketspaces use technology to eliminate
this constraint (by being online).
3. List the components of a marketspace.
A marketspace consists of the following components: customers, sellers, goods,
infrastructure, a front end, a back end, intermediaries/business partners and
support services.
4. Define a digital product and provide five examples.
Digital products are goods that can be transformed to digital formats and delivered
over the Internet. Examples of digital products would include e-books, software,
graphics, video clips and electronic documentation.
5. Describe private versus public e-markets.
Private marketspaces are generally owned by a single firm, whereas public
marketspaces are generally owned and managed by independent third parties.
Public marketspaces are also known as exchanges
Section 2.3 Review Questions
1. Describe electronic storefronts and e-malls.
An electronic storefront is a single companys Web site where products and services
are sold. An electronic mall is an online shopping center where many stores are
located.
2. List the various types of stores and e-malls.
There are several different types of stores and malls including: general stores/malls,
specialized stores/malls, regional or global stores and pure online stores or clickand-mortar stores.
3. What are information portals? List the major types.
Information portals are single, personalized online points of access to business

information inside an organization. They include: commercial, corporate, publishing,

personal, mobile, and voice portals.
4. List the roles of intermediaries in e-markets.
Intermediaries can perform the following functions: reduce search costs, increase
or create privacy, provide more complete information, reduce contract risk, and
reduce pricing inefficiencies.
5. Describe e-distributors.
An online e-distributor is an intermediary that connects suppliers with buyers by
aggregating multiple suppliers product catalogs in a single location.
6. Describe the changing position and location of intermediaries in the supply chain.
Intermediaries are now more often found within hubs, as opposed to between
manufactures and retailers.
Section 2.4 Review Questions
1. List and briefly describe the dimensions by which electronic catalogs can be
classified.
Electronic catalogs can be classified by the dynamics of the information presented,
the degree of customization and their integration with business processes.
2. List the benefits of electronic catalogs.
Online catalogs have several advantages as seen in Exhibit 2.7. Some of these
advantages include: the ease of updating product information, improved search and
comparison capabilities, ease of customization, and several other benefits.
3. Explain how customized catalogs are created and used.
Customized catalogs take information from existing print catalogs and product
information and digitize it. This digitized information is then stored in a database.
Once the information is in a database it is very easy to select products and groups
of products to display to a potential customer. These products and groups of
products are selected and presented to the customer through a custom printed
catalog or through a personalized Web site.
4. Compare search engines with intelligent agents.
Search engines are used to query databases for specific information and provide
results. Software agents perform routine tasks requiring more intelligence.
5. Describe an electronic shopping cart.
An electronic shopping cart is an order-processing technology that allows customers
to accumulate items they wish to buy while they continue to shop.
6. Describe voice- and vision-related search engines.
These services provide an alternative to text-based search.
7. What is self configuration?
These systems allow the customer to configure a product on their own.
8. Compare and contrast Ask.com and Answers.com.
Both provide answers to questions, the difference is in the cost of the responses.
Section 2.5 Review Questions

1. Define auctions and describe how they work.

An auction is a market mechanism by which a seller places an offer to sell a product
and buyers make bids sequentially and competitively until a final price is reached
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 limitations. Traditional auctions are limited by the short duration of the
auction itself and the physical location of the auction. Electronic auctions can occur
over greater time periods and are not limited by location since they take place in
electronic marketspaces.
3. List the four types of auctions.
They include: one buyer-one seller, many buyers-one seller, one buyer-many sellers
and many buyers-many sellers.
4. Distinguish between forward and reverse auctions.
A forward auction occurs when sellers entertain bids from buyers. A reverse auction
occurs when buyers indicate the good they wish to purchase, and sellers provide
quotes for that good.
5. Describe the name-your-own-price auction model.
In this model, a would-be buyer specifies the price they are willing to pay to any
seller that is willing to accept the terms.
6. Describe penny auctions.
A formal auction in which participants pay a nonrefundable small fee for each bid.
Bid level changes by small increments.
7. 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 sellers without the constraint of time or
place. The wide variety of different auction styles meets the needs of a wide variety
of different purchasers. Auctions benefit sellers by allowing them to sell to a huge
potential marketplace not constrained by time or place. Additionally, it allows them
to sell goods that may only have a very small target market. Sellers are also able to
sell their goods at the prevailing global market price. Auctioneers benefit from
auctions because it provides a business model that allows their firms to stay in
business. They are able to benefit from usage by both buyers and sellers.
8. What are the major limitations of auctions?
Limitations include lack of security, possibility of fraud, and limited participation.
9. List the major impacts of auctions on markets.
Auctions can have an impact by acting as a coordinating mechanism, acting as a
social mechanism to determine a price, acting as a visible distribution mechanism,
and acting as a portion of the EC system.
10. Define bartering and describe the advantages of e-bartering.
Bartering is an exchange of goods and services. E-bartering has the advantage over
traditional bartering because it transcends its limitations of location and variety.
11. Explain the role of online negotiation in EC.
Online negotiation helps improve the bundling and customization of products and

services.
Section 2.6 Review Questions
1. Define blogs and bloggers.
A blog is a weblog, a published personal or corporate Web site. A blogger is the
author or editor of the blog.
2. Discuss the critical features that distinguish a blog from a user-produced regular
Web page.
A blog is differentiated by its personal nature, unique content and frequency of
updates.
3. Describe the potential advantages and risks of blogs.
Blogs are able to focus on niche areas and react quickly. The major risk is in this
quick reaction, where posts may not be as well-thought-out or vetted as desired.
4. Discuss the commercial uses of blogs and wikis.
Corporate uses of blogs mirror some of the characteristics of personal blogs and can
be used for informational or PR purposes. They can be updated regularly and may
put a human face on a firm.
5. Define wikis.
A blog that allows everyone to participate as a peer; anyone may add, delete, or
change content.
6. Define tags, folksonomy, and social bookmarking.
Tag a nonhierarchical keyword or term assigned to a piece of information (such as
an Internet bookmark, digital image, video clip, or any computer document).
Folksonomy the practice and method of collaboratively creating, classifying, and
managing tags to annotate and categorize content. Social Bookmarking Web
service for sharing Internet bookmarks; the sites are a popular way to store,
classify, share, and search links through the practice of folksonomy techniques on
the Internet and intranets.
Section 2.7 Review Questions
1. Define virtual communities and describe their characteristics.
A group of people with similar interests who interact with one another using the
Internet.
2. List the major types of virtual communities.
The major types are detailed in Exhibit 2.9.
3. Define social network.
A special structure made of individuals (or organizations). It includes the ways in
which individuals are connected through various social familiarities.
4. List some major social network sites.
Examples are listed on pages 80 and 81.
5. Describe the global nature of social networks.
Networks can be accessed globally, allowing users to interact with participants
around the world. Social networks are used all over the world.
6. Define social network analysis.

Social network analysis the mapping and measuring of relationships and flows
between people, groups, organizations, animals, computers or other information or
knowledge processing entities. The nodes in the network are the people and groups,
whereas the links show relationships or flows between the nodes. SNA provides both
a visual and a mathematical analysis of relationships.
7. Describe social networking.
Networks that are used mostly for creating contacts, providing requirements, and
enlisting members support for problem solving and knowledge sharing.
Section 2.8 Review Questions
1. Define virtual worlds.
A user-defined world in which people can interact, play, and do business. The most
publicized virtual world is Second Life.
2. Describe avatars. Why do we use them?
Avatars are animated computer characters that exhibit humanlike movements and
behaviors that individuals use to portray themselves in virtual worlds.
3. List some business activities in virtual worlds. Categorize them by type.
Some categories include creating and managing virtual businesses, conducting
business activities and providing services.
4. Describe virtual shopping.
Selecting products and e-commerce within a virtual world.
Section 2.9 Review Questions
1. What is Web 3.0, and how will it differ from Web 2.0?
Web 3.0 will be the convergence of Web 2.0 and business applications.
2. Define Semantic Web.
An evolving extension of the Web in which Web content can be expressed not only
in natural language, but also in a form that can be understood, interpreted, and
used by intelligent computer software agents, permitting them to find, share, and
integrate information more easily.
3. List the major potential inhibitors of e-commerce and Web 2.0.
Inhibitors could include: Security concerns Lack of Net Neutrality Copyright issues
Connectivity issues
4. What is Web 4.0?
The Web generation after Web 3.0. It is still an unknown entity. However, it is
envisioned as being based on islands of intelligence and as being ubiquitous.
5. What are the major computing and IT trends?
Examples include increasing speed, visualization, pervasive computing and others
predicted by McKinsey and Carr.
Section 3.1 Review Questions
1. Describe the nature of B2C EC.
B2C e-commerce is concerned with businesses selling products to customers.
2. What sells well in B2C?

A variety of goods sell well online. These goods include: computers and electronics,
sporting goods, office supplies, books and music, toys, health and beauty products,
entertainment, apparel, services and cars.
3. What are the characteristics of high-volume products and services?
The characteristics of high-volume products and services include: high brand
recognition, recognized guarantees, digitized formats, relatively inexpensive items,
frequently purchased items, commodities with standard specifications and wellknown, un-openable packaged items (that do not need to be inspected before
purchase).
Section 3.2 Review Questions
1. List the B2C distribution channel models.
The B2C distribution channel models include: direct marketing, pure-play e-tailers,
and clickand-mortar retailers.
2. Describe how mail-order firms are going online.
Companies are attempting to leverage their existing infrastructures by using a new
marketing system (online), in addition to their existing method (catalogs, etc.).
3. Describe the direct marketing model used by manufacturers.
The direct marketing model takes place without intermediaries between
manufacturers and buyers.
4. Describe virtual e-tailing.
These firms sell to customers over the Internet while not maintaining any type of
physical sales location.
Section 3.3 Review Questions
1. What travel services are available online that are not available off-line?
Some of the additional services provided include: travel tips, electronic travel
magazines, fare comparisons, currency conversion calculators, fare tracking,
worldwide place locators, a travel products store, expert opinions, travel news,
driving maps, chat rooms, bulletin boards and frequent-flyer deals.
2. List the benefits of online travel services to travelers and to service providers.
Online travel services provide the benefits of large amounts of free information,
24/7 availability and the potential for significant reductions in price. Service
providers are able to reach a broader potential market, and provide services that
may be evaluated on more than just price.
3. How do social networks facilitate travel?
Social networks allow for additional marketing through direct and indirect methods,
including word-of-mouth.
4. Describe corporate online travel services.
Corporations can use all the travel services that individuals do, but in addition may
receive extra services to assist with cost control and authorization.
Section 5.1 Review Questions
1. Define e-government.

E-government is the use of IT and e-commerce to provide access to government

information and delivery of public services to citizens and business partners.
2. What are the four major categories of e-government services?
The four categories are: government-to-citizens, government-to-business,
government-togovernment, and government-to-employees.
3. Describe G2C.
The government-to-citizens model includes all interactions between a government
and its citizens. This model is meant to increase efficiencies and create greater
transparency to citizens.
Section 5.2 Review Questions
1. Define e-learning and describe its drivers and benefits.
E-learning is the online delivery of information for purposes of education, training
and knowledge management. It can provide learning at a lower cost with greater
flexibility.
2. List some of the major drawbacks of e-learning and describe how they can be
prevented.
Drawbacks and challenges to e-learning are listed on pages 209 and 210.
3. Describe virtual universities and distance learning.
Virtual universities are universities where students can take online classes from any
location. Distance learning is the online delivery of information for purposes of
education, training, or knowledge management.
4. Define e-training and describe how it is done.
E-training is the use of e-learning technologies to train employees and others. It
benefits from the advantages of e-learning over traditional training and learning
methods.
5. Describe the connection between learning and social networking.
Many believe that students learn through interaction with each other. By increasing
the social aspects of training, better learning outcomes can be achieved.
Section 5.3 Review Questions
1. Define Knowledge Management.
KM is the process of capturing or creating knowledge, storing it, updating it
constantly, interpreting it and using it whenever necessary.
2. Discuss the relationship between KM and EC.
EC can be better performed based on what can be learned from effective KM.
8.3 Section Review Questions
1. Define loyalty and describe e-loyalty.
Customer loyalty is the degree to which a consumer will stay with a specific vendor
or brand. Eloyalty is a measure of a customers commitment to an online retailer.
2. Describe the use of business intelligence and analytical software for e-loyalty.
These systems analyze customer data to determine satisfaction level and the
potential for crossselling products. It also helps to gain insights fast enough to stop

unhappy customers before they leave the site.

3. Describe the issue of trust in EC and how to increase it.
Trust is very important in EC because of the lack of direct human interaction
between the customer and the merchant. Merchants are able to increase the
amount of trust their customers have through brand recognition, security
mechanisms and business transparency
8.4 Section Review Questions
1. Define and describe mass marketing.
Mass marketing directs advertisements to a large, undifferentiated group of
potential customers.
2. Define market segmentation. How is segmentation done?
Market segmentation is the dividing of potential customers by type. The goal is to
create a subgroup that is more likely to be interested in the product than the whole.
3. Define one-to-one marketing. What are its advantages?
One-to-one marketing uses special marketing techniques that treat each customer
in a unique way. Internet technologies greatly facilitate the ease of one-to-one
marketing. This approach allows a firm to meet the unique needs of a customer to
build loyalty.
Section 8.7 Review Questions
1. Define Web advertising and the major terms associated with it.
Web advertising is the use of the World Wide Web to advertise to customers. Some
important terms in Internet advertising include: ad views (the number of times
users call-up the page that has a banner on it), button (a small banner link to a Web
site), page (an HTML document), click (a tally of each time a visitor clicks on an
advertising banner), CPM (the cost per thousand impressions), hit (a request for
data from a Web page or file), and visit (a series of requests during one navigation
of the Web site).
2. Describe the reasons for the growth in Web advertising.
Advertisers are looking to the Web because it is a viable advertising medium.
Individuals may be moving away from other advertising mediums and to the
Internet. Additionally, the demographics of individuals who use the Internet are
generally more affluent then the population as a whole, making an attractive
population to advertise to. Web ads also have the benefit of lower cost, increased
richness of format and the ability to personalize.
3. Describe emerging Internet advertising approaches.
Most of these methods are reliant on interactive marketing, which is Online
marketing, facilitated by the Internet, by which marketers and advertisers can
interact directly with customers, and consumers can interact with
advertisers/vendors.
4. List the major benefits of Web advertising.
These advantages are detailed on pages 419 and 420.

Section 8.8 Review Questions

1. Define banner ads and describe their benefits and limitations.
Banner ads are graphic advertisements displayed on Web pages that link to the
advertisers Web site. Banner ads are limited by their cost, space for information
and customer indifference.
2. Describe banner swapping and banner exchanges.
Banner swapping is an agreement between two companies to display the others
banner ad on its Web site. Banner exchanges are markets in which companies can
trade or exchange placement of banner ads on each others Web sites.
3. Describe the issues surrounding pop ups and similar ads.
These ads can be highly effective for advertisers, but many users consider them
annoying and intrusive.
4. Explain how e-mail is used for advertising.
It is possible for advertisers to send out large volumes of advertisements contained
inside e-mail messages. This is an effective method of advertising to large groups. If
the advertiser sends a large number of unrequested e-mail solicitations, it is
considered spamming, which is considered by some to be illegal and rude.