ITM100 CHAPTER 10 QUIZ

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Questions and Answers

What was the primary measure of success for display ads in the early days of the Internet?

Click-through rate and conversion rate

Number of unique visitors and impressions (correct)

Number of video ad views

Social media engagement and shares

What concept characterizes the new world of social-mobile-local e-commerce?

Display ads and unique visitors

Conversations and engagement (correct)

Television ads and brand messages

Impressions and click-through rate

What marketing method is increasingly replacing display ads?

Search-related ads

Email marketing

Television ads

Video ads (correct)

What triggered the change in online marketing after 2007?

Rapid growth of social sites and smartphones Signup and view all the answers

What does social marketing involve?

Engaging in online conversations with customers, potential customers, and critics, emphasizing listening, discussing, and interacting. Signup and view all the answers

Which platforms are considered leading social commerce platforms?

Facebook, Instagram, Twitter, and Pinterest. Signup and view all the answers

What percentage of advertising worldwide is now constituted by online advertising?

Over 55% Signup and view all the answers

What percentage of online advertising is mobile marketing?

Over 70% Signup and view all the answers

What does e-commerce technology allow?

Commercial transactions to cross cultural and national boundaries more conveniently and cost-effectively. Signup and view all the answers

What do technical standards for conducting e-commerce do?

They are universal, reducing market entry costs for merchants and search costs for consumers. Signup and view all the answers

What does information richness refer to?

The complexity and content of a message, which the web enables the delivery of rich messages with text, audio, and video to large audiences simultaneously. Signup and view all the answers

What do e-commerce technologies enable?

Interactive two-way communication between merchants and consumers, similar to face-to-face experiences but on a global scale. Signup and view all the answers

What impact do the Internet and web have on information density?

Vastly increase information density, reducing information collection, storage, processing, and communication costs while increasing the currency, accuracy, and timeliness of information. Signup and view all the answers

What does information density in e-commerce markets do?

Make prices and costs more transparent, benefiting both consumers and merchants. Signup and view all the answers

What can online merchants do with regards to price discrimination?

Segment the market into groups willing to pay different prices and engage in price discrimination, selling the same goods to different targeted groups at different prices. Signup and view all the answers

Which technology enables personalization and customization of marketing messages, products, and services based on consumer behavior, interests, and past purchases?

E-commerce technology Signup and view all the answers

What does the Internet and e-commerce technologies enable online merchants to gather and store about consumers' past purchases and behavior?

Vast amount of information Signup and view all the answers

What has the Internet and e-commerce technologies evolved to be more of, allowing users to create and share content?

Social Signup and view all the answers

What unique model of mass communications does the Internet provide, enabling users to create and distribute content on a large scale?

Many-to-many Signup and view all the answers

What do digital markets reduce, as consumers and suppliers can see the prices being charged for goods?

Information asymmetry Signup and view all the answers

What have digital markets reduced the information asymmetry surrounding, by providing consumers with access to competitive pricing information?

Purchases, such as automobile retailing Signup and view all the answers

What are digital markets flexible and efficient in, operating with reduced search and transaction costs, and dynamic pricing based on market conditions and consumer behavior?

Reducing search and transaction costs Signup and view all the answers

Which online retailers change prices on thousands of products based on time of day, demand, and users' prior visits?

Amazon and Walmart Signup and view all the answers

What can digital markets either reduce or increase, and might cause some extra delay in gratification due to shipping times for physical products?

Switching costs Signup and view all the answers

What is not always possible with products purchased over the web, as shipping times may cause delays in gratification?

Immediate consumption Signup and view all the answers

What has e-commerce technology transformed the way businesses operate, communicate, and interact with consumers, leading to enhanced personalization, customization, and global reach?

All of the above Signup and view all the answers

Which business model generates revenue through large audiences, display ad placement, referral fees, and premium services?

Portals Signup and view all the answers

What is the estimated worldwide revenue generated by online retail (e-tailers) in 2020?

$3.9 trillion Signup and view all the answers

Which business model involves distributing various forms of intellectual property, with online content generating about $60 billion in the United States in 2019?

Content providers Signup and view all the answers

Which business model processes transactions for financial and travel services, offering savings of money and time and an extensive inventory of products?

Transaction brokers Signup and view all the answers

Which business model builds digital environments for buyers and sellers to meet, display products, search, and establish prices, with examples like eBay and Amazon's Merchants platform?

Market creators Signup and view all the answers

Which business model is exemplified by Uber and Airbnb, built on the idea of a market creator?

The on-demand economy Signup and view all the answers

What do crowdsource funding markets such as Kickstarter.com bring together?

Private equity investors and entrepreneurs Signup and view all the answers

Which business model offers services online, including photo sharing, data backup, storage, and software as a service (SaaS)?

Service providers Signup and view all the answers

Which portals gather over 90 percent of the Internet’s U.S. portal traffic due to superior brand recognition?

Yahoo, MSN, and AOL Signup and view all the answers

What is the estimated online retail sales revenues of Amazon in 2020?

More than $280 billion Signup and view all the answers

What type of content do online content providers distribute over the web?

Digital video, music, photos, text, and artwork Signup and view all the answers

What is the value proposition of online content providers?

Convenient access and inexpensive purchases Signup and view all the answers

What is disintermediation?

The process of reducing the number of intermediaries in the distribution channel Signup and view all the answers

How do digital markets differ from traditional markets?

They have lower copying costs Signup and view all the answers

What is an example of business-to-business (B2B) e-commerce?

Elemica’s website for buying and selling chemicals and energy Signup and view all the answers

What is consumer-to-consumer (C2C) e-commerce?

Consumers selling directly to consumers Signup and view all the answers

What impact has e-commerce had on the market for services?

Decreased prices due to disintermediation Signup and view all the answers

What are the major categories of electronic commerce?

Business-to-consumer (B2C), business-to-business (B2B), and consumer-to-consumer (C2C) Signup and view all the answers

How does digital markets affect purchase transaction costs?

Significantly reduces purchase transaction costs Signup and view all the answers

What has e-commerce led to the rise of?

New intermediaries like Amazon and eBay Signup and view all the answers

What is an impact of disintermediation on different industries?

Different impacts on different industries Signup and view all the answers

What is the primary focus of business-to-consumer (B2C) e-commerce?

Retailing products and services to individual shoppers Signup and view all the answers

What does disintermediation refer to?

The removal of organizations or business process layers responsible for intermediary steps in a value chain Signup and view all the answers

What is a characteristic of traditional distribution channels?

They can inflate product prices by as much as 135% Signup and view all the answers

Study Notes

E-commerce Business Models Overview

Portals serve as destination sites for web searching and generate revenue through large audiences, display ad placement, referral fees, and premium services.
Online retail (e-tailers) will generate around $3.9 trillion in revenues worldwide in 2020, offering convenient, low-cost shopping and large selections.
Content providers distribute various forms of intellectual property, with online content generating about $60 billion in the United States in 2019.
Transaction brokers process transactions for financial and travel services, offering savings of money and time and an extensive inventory of products.
Market creators build digital environments for buyers and sellers to meet, display products, search, and establish prices, with examples like eBay and Amazon's Merchants platform.
The on-demand economy, exemplified by Uber and Airbnb, is built on the idea of a market creator.
Crowdsource funding markets such as Kickstarter.com bring together private equity investors and entrepreneurs in a funding marketplace.
Service providers offer services online, including photo sharing, data backup, storage, and software as a service (SaaS).
The top portals, including Yahoo, MSN, and AOL, gather over 90 percent of the Internet’s U.S. portal traffic due to superior brand recognition.
E-tailers, from giant Amazon to small local stores, provide convenient, low-cost shopping and will generate approximately $3.9 trillion in revenues worldwide in 2020.
Online retail sales revenues of Amazon are estimated to be more than $280 billion in 2020.
Online content providers distribute information content such as digital video, music, photos, text, and artwork over the web, with a value proposition of convenient access and inexpensive purchases.

E-commerce and Digital Markets

Digital markets offer opportunities to sell directly to consumers, bypassing intermediaries like distributors or retail outlets
Eliminating intermediaries in the distribution channel can significantly reduce purchase transaction costs
Traditional distribution channels can inflate product prices by as much as 135% due to the need to pay for each step
Disintermediation refers to the removal of organizations or business process layers responsible for intermediary steps in a value chain
E-commerce has led to the rise of new intermediaries such as Amazon, eBay, PayPal, and Blue Nile
Disintermediation affects different industries differently
Disintermediation has impacted the market for services, as airlines and hotels earn more per ticket by eliminating travel agents as intermediaries
Digital markets differ from traditional markets in terms of marginal cost, cost of production, copying cost, delivery cost, inventory cost, marketing cost, and pricing
There are three major electronic commerce categories: business-to-consumer (B2C) e-commerce, business-to-business (B2B) e-commerce, and consumer-to-consumer (C2C) e-commerce
Business-to-consumer (B2C) e-commerce involves retailing products and services to individual shoppers, with examples like Amazon, Walmart, and Apple Music
Business-to-business (B2B) e-commerce involves sales of goods and services among businesses, with examples like Elemica’s website for buying and selling chemicals and energy
Consumer-to-consumer (C2C) e-commerce involves consumers selling directly to consumers, with examples like eBay and Gumtree

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Description

Explore the overview of various e-commerce business models, including portals, online retail, content providers, transaction brokers, market creators, and on-demand economy. Learn about disintermediation, digital markets, and the different categories of electronic commerce.