CHAPTER THREE

THE E-MARKETING PLAN

Multiple Choice

1. The ________ is a blueprint, or roadmap, that links the firm’s e-business strategy (e-
business models) with technology-driven marketing strategies and details for
implementation through marketing management.
a. e-marketing plan
b. business model
c. situation analysis
d. strategic plan
(a; Easy; LO1)

2. The two most common types of e-marketing plans are known as the venture capital e-
marketing plan and the ________.
a. Nike plan
b. tablecloth plan
c. strategic plan
d. napkin plan
(d; Easy; LO1)

3. The equivalent of the napkin plan used by a large company is known as the _________.
a. Nike plan
b. just-do-it, bottom-up plan
c. venture capital plan
d. strategic plan
(b; Moderate; LO1; Analytic Skills)

4. By far the smallest source of capital for entrepreneurs is ________.

a. banks
b. friends and family
c. angel investors
d. venture capitalists
(b; Moderate; LO4; Analytic Skills)

5. When selecting an e-business investment venture capitalists are looking for a well
composed business plan and ________.
a. sufficient capital
b. a great location
c. a good team of people to implement it
d. government subsidies
(c; Difficult; LO4; Analytic Skills)

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6. A well composed business plan should contain enough data and logic to prove that
________.
a. the e-business idea is solid
b. the entrepreneur has some idea of how to run the business
c. the entrepreneur has some idea of the business’ benefits, costs, and competition
d. all of the above
(d; Moderate; LO1; Communication Abilities)

7. Venture capitalists typically expect to ________.

a. get their money out of an investment immediately
b. get their money out of an investment within a few years as part of an exit plan
c. take over ownership of their investments
d. see a return on every investment they make
(b; Easy; LO4; Reflective Thinking Skills)

8. An initial public offering (IPO) of a company is viewed generally by invested venture

capitalists as a(n)________.
a. golden exit plan
b. threat to his/her investment
c. chance to gain a higher percentage of ownership
d. none of the above
(a; Moderate; LO4; Analytic Skills)

9. Situation analysis should review the firm’s ________.

a. environment and SWOT analysis
b. existing marketing plans
c. e-business objectives, strategies and performance metrics
d. all of the above
(d; Difficult; LO3; Analytic Skills)

10. A(n) ________ is used to identify target markets.

a. SWOT Analysis
b. Balanced Scorecard
c. Marketing Opportunity Analysis (MOA)
d. Environment, Strategy and Performance (ESP)
(c; Easy; LO3; Analytic Skills)

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11. The purpose of a(n) ________ is to assist in forecasting segment profitability as well as to
find competitive advantages to exploit in the online market.
a. situation analysis
b. supply analysis
c. evaluation plan
d. a budgeting plan
(b; Difficult; LO2; Analytic Skills)

12. In order to decide how online prices will compare to offline equivalents, marketers must
consider ________.
a. differing costs of sorting and delivering
b. competitive concerns
c. market concerns
d. all of the above
(d; Moderate; LO4; Analytic Skills)

13. The strategy of applying different price levels for different customers or situations is
referred to as ________.
a. online bidding
b. dynamic pricing
c. direct marketing
d. agent e-business models
(b; Easy, LO4; Analytic Skills)

14. Formulating an objective should take into consideration all of the following elements
except _________.
a. task (what is to be accomplished)
b. measurable quantity (how much)
c. time frame (by when)
d. cost (how much)
(d; Easy; LO2; Analytic Skills)

15. A graphical tool known as a(n) ________ can help marketers better understand the
implementation requirements for their plans.
a. product matrix
b. objective-strategy matrix
c. business model
d. evaluation plan
(b, Moderate; LO2; Communication Abilities)

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16. In the fifth step of the e-marketing planning process ________ tactics are especially
important to e-marketers because information technologies are especially adept at
automating these processes.
a. business process
b. budgeting
c. information gathering
d. evaluation plan
(c; Difficult; LO1; Use of Information Technology)

17. During which of the following steps will marketers closely monitor actual revenues and
costs to make sure that results are on track for accomplishing the objectives?
a. situation analysis
b. formulating objectives
c. plan implementation
d. strategy formulation
(c; Difficult; LO4; Analytic Skills)

18. Firms consider monies saved through internet efficiencies ________.

a. soft revenues
b. difficult currency
c. profits
d. mark-ups
(a; Easy; LO4; Analytic Skills)

19. All of the following are various types of e-marketing costs incurred by site developers
except ________.
a. marketing communication
b. salaries
c. real estate costs
d. site design
(c; Moderate; LO4; Analytic Skills)

20. Once the e-marketing plan is implemented, its success depends on ________.
a. funding
b. planning
c. continuous evaluation
d. formulating objectives
(c; Moderate; LO2)

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True/False

21. The “paper plan” is a quick method used by entrepreneurs to communicate their ideas to
clients, partners, or investors.
a. True
b. False
(b; Easy; LO1; Communication Abilities)

22. The “binder plan” tends to more preferred than the “napkin plan” when presenting an idea
to solicit funding from investors.
a. True
b. False
(b; Moderate; LO1)

23. Venture capitalists generally enter an investment with a plan to exit within a few years,
following an initial public offering or significant buyout from a large firm.
a. True
b. False
(a; Easy; LO1)

24. Venture capitalists are generally not concerned with exit plans, such as taking the
company public.
a. True
b. False
(b; Moderate; LO1)

25. Strategic refinements are not necessary if marketers create feedback mechanisms in their
e-marketing plans.
a. True
b. False
(b; Moderate; LO1)

26. Tier one and tier two strategies are interrelated for most companies.
a. True
b. False
(a; Moderate; LO3)

27. Tier 2 strategies involve segmentation, targeting, differentiation, and positioning.

a. True
b. False
(b; Difficult; LO3)

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28. E-marketing plans must focus on a single objective.
a. True
b. False
(b; Easy; LO2; Analytic Skills)

29. A strategic plan must identify expected returns from an investment.

a. True
b. False
(a; Moderate; LO4)

30. Since intangible benefits of e-marketing are difficult to establish it is often not worth the
added expense to tie a financial figure to these benefits.
a. True
b. False
(b; Difficult; LO2; Reflective Thinking Skills)

31. The three key environmental factors that affect e-marketing are legal, market-related, and
technological.
a. True
b. False
(a; Moderate; LO1)

32. Tier 1 strategies include designing the offer, value, distribution, communication, and
market/partner relationship management strategies.
a. True
b. False
(b; Difficult; LO3; Analytic Skills)

Essay Questions

33. What is meant by a “napkin plan”?

 Quick, cursory method for communicating the basic gist of a business proposition to
potential business partners or investors.
 Common practice by new entrepreneurs, especially in the early stages of the dot-com
era, when meeting at cafes or restaurants.
(Easy; LO1; Communication Abilities)

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34. What are the seven steps of the e-marketing plan?
 Situation analysis
 E-marketing strategic planning
 Objectives
 E-marketing strategy
 Implementation plan
 Budget
 Evaluation plan
(Moderate; LO1; Analytic Skills)

35. In the creation of an e-marketing plan what are the advantages and draw backs of both the
napkin plan and the venture capital plan?
Napkin Plan
 Advantages – Accidental discovery, Overcome staid corporate culture
 Drawback – Lack of sound long term planning and implementation plan
Venture Capital Plan
 Advantage – Emphasis on strategic plan, comprehensive long term plan, forces
entrepreneurs to critically analyze their business, maximize organization
resources.
 Drawback – Focus is on exit plan for venture capitalists, maximize short term
returns.
(Difficult; LO1; Analytic Skills)

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36. In your own words, what is the argument for the distinction between tiers one and two of
the e-marketing strategies? Make sure to define the elements of each tier.
 Tier One – e-marketing objectives. Segmentation, targeting, differentiation,
and positioning. Marketing opportunity analysis.
 Tier Two-Design the offer, value, distribution, communication, CRM. The 4
P’s of marketing.
 Tier One is involved with the strategy and objectives. Tier two is involved
with the implementation.
(Difficult; p. 49-54; LO3; Reflective Thinking Skills)

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37. What are some of the typical objectives of e-marketing plans?
 Increase market share
 Increase sales revenue
 Reduce costs
 Achieve branding goals
 Improve databases
 Achieve customer relationship management goals
 Improve supply chain management
(Easy; p. 46, 58; LO2; Analytic Skills)

38. What are some of the intangible benefits of e-marketing strategies and how can financial
figures be tied to these benefits?
 Brand equity
 Brand awareness
 Difficult to put a dollar figure to this.
 Evaluate costs and use CRM metrics such as Lifetime Value
(Moderate; p. 54-56; LO2; Analytic Skills)

39. Define dynamic pricing. What are the advantages and disadvantages of using dynamic
pricing?
 Dynamic Pricing-different price levels for different customers
 Advantage- Bases product on demand for product and service, company can
maximize their return using this strategy
 Problem – Customers pay different prices for same service or product. If
alternatives exist many customers will move from the product or service if they
realize others are paying a lower cost.
(Moderate; p. 53; LO4; Analytic Skills)

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