CH10 – E-commerce and the EntrepreneuR Flashcards
1) One of the most valuable attributes of the Web is the ability to ________.
A) provide companies with instantaneous customer feedback
B) enable the site to create an appearance that the organization is able to meet customer needs that, in fact, are not possible based on its actual resources
C) eliminate advertising expenses and the amount of printed materials needed to facilitate promotional efforts
D) encourage the use of credit cards as a means of paying for the online transaction
A
2) Experts estimate that nearly ________ percent of the world’s online population has used the Internet to make a purchase.
c
3) A survey by PriceWaterhouseCoopers reports that \_\_\_\_\_\_\_\_ percent of Americans research products online before buying them. A) 40 B) 42 C) 60 D) 83
D
4) An estimated \_\_\_\_\_\_\_\_ percent of small business owners in the U.S. have Web sites. A) 25 B) 82 C) 75 D) 90
B
5) The Internet penetration rate is greatest in North America with 78.6% and the second region of the world in penetration is \_\_\_\_\_\_\_\_. A) Oceania/Australia B) Europe C) Latin America/Caribbean D) Middle East
A
6) Which of the following is an important issue that business owners should consider before launching an e-commerce effort?
A) How to develop long-term relationships with customers.
B) How to exploit the interconnectivity and the opportunities it creates to transform relationships with its suppliers, customers, and external stakeholders.
C) How to measure the success of its Web-based sales effort.
D) All of the above
D
7) All of the following represent benefits of selling on the Web except ________.
A) opportunity to increase revenues
B) power to educate and inform
C) ability to remain open 24 hours a day
D) ability to advertise in a cheaper media form
D
8) To avoid unpleasant surprises in launching an e-commerce effort an entrepreneur should ________.
A) test the Web site with real customers to make sure it is easy to navigate
B) avoid being talked into establishing a privacy policy
C) cancel all current advertisements in other media
D) not try to out-guess customers, and handle order fulfillment as orders come in
A
9) The Web is one of the most efficient ways of reaching both new and existing customers and when properly promoted, a Web site can ________.
A) reduce a company’s cost of generating sales leads
B) be an affordable way to reach customers beyond your geographic area
C) provide an efficient method to provide information about a company and their products
D) All of the above
D
10) E-commerce is replacing traditional retailing.
FALSE
11) A survey by PriceWaterhouseCoopers reports that 83 percent of Americans research products online before buying them.
TRUE
12) Online sales and Internet activity will account for more than 60 percent of total retail sales.
TRUE
13) Research indicates that younger audiences do not take the time to seek product information before they make a purchase.
FALSE
14) The Web is one of the most efficient ways of reaching both new and existing customers.
TRUE
15) More than 75 percent of small business owners who have Web sites engage in e-commerce.
FALSE
16) For many entrepreneurs, the key barrier to not using the Web as a business tool is that they do not see any benefits to selling online.
FALSE
17) The Web typically lacks the ability to lower the cost of doing business.
FALSE
18) Companies quickly learn that setting up a Web site is only the first investment required. The site leads to an ongoing investment of resources — time, money, energy and talent.
TRUE
19) Measuring the success of its Internet-based sales effort is essential if a company is to remain relevant to customers whose tastes, needs, and preferences are always changing.
TRUE
20) Measuring the success of its Web-based sales is not essential because customer tastes and preferences are always changing.
FALSE
25) Entrepreneurs should make sure they do not fall victim to any of the e-commerce myths. Which of the following is not an e-commerce myth?
A) Setting up a business on the Web is easy and inexpensive.
B) If I launch a site, customers will flock to it.
C) Making money on the Web is easy.
D) Privacy and site security is an important issue on the Web.
D
26) To be successful online, small companies must create Web sites with features that appeal to experienced Web shoppers, such as ________.
A) simple navigation and customer reviews
B) solid security and quick access to product information
C) videos and blogs
D) the successful Web site will include all the above
D
27) The intentional and targeted promotion of a Web site is ________.
A) critical to online success
B) optional because once you are on the Web, you will get traffic and sales
C) a luxury that most small businesses cannot afford
D) contrary to current Web trends
A
28) Successful e-tailers have discovered that these factors enhance their reputations for online customer service ________.
A) comprehensive FAQ pages and e-mail order confirmation with shipment notices
B) visible telephone and e-mail contact information
C) quick responses to questions with meaningful information
D) All of these factors enhance a Web-based reputation.
D
29) \_\_\_\_\_\_\_\_ monitor customers' behavior while they are on a site, giving Web-based businesses the information they need to make their Web sites and their online \_\_\_\_\_\_\_\_ efforts more effective. A) Wikis; social marketing B) Tracking tools; marketing C) Tracking tools; security D) Tracking tools; listings
B
30) An important part of any e-commerce effort is ________.
A) the use of current technology and its successful implementation
B) the ability to understand the underlying business and to develop a workable business model
C) to have a site that is fast and dependable
D) to have high traffic to the site, regardless of the customers’ interest in what the site actually offers
B
31) Before a Web site can become the foundation for a successful e-business ________.
A) the technology must be right
B) it should be previewed by a Web designer
C) it must be created with the target audience in mind
D) the physical storefront must be established
C
32) Building a Web strategy based on a clear definition of the company’s target audience and an understanding of those customers’ needs, wants, likes, and dislikes is ________.
A) relatively unimportant for a company’s Web site due to its flexibility
B) something that the entrepreneur no longer has to focus on to realize success
C) also critically important for a company’s presence on the Web
D) an exercise that should eventually be addressed after the site is launched
C
33) The entrepreneurs who are proving to be the most successful in e-commerce are those who know how ________.
A) their industries work, inside and out
B) technology works, inside and out
C) to turn a profit
D) to effectively finance their e-commerce effort
A
34) The most common reasons for leaving a site without purchasing include which of the following?
A) Shipping charges were too high.
B) Site did not look trustworthy.
C) Customers could not find the items they were looking for.
D) All of the above
D
35) Which of the following is not a common reason customers leave Web sites before checking out?
A) Total shipping charges were too high.
B) The privacy policy was not posted.
C) The shopping cart was too hard to find.
D) The site did not appear trustworthy.
B
36) The average conversion rate for e-commerce sites is just \_\_\_\_\_\_\_\_ percent. A) 9.35 B) 6.67 C) 2.55 D) 1.1
C
37) The most significant ways online companies can bolster customer service include all of the following except ________.
A) create a well-staffed and well-trained customer response team
B) offer a simple return policy
C) provide an easy order tracking process
D) make financing available
D
38) The single most common reason for abandoning online shopping carts is ________.
A) shipping and handling charges were too high
B) delivery times were too long and the checkout process required too much information and time
C) there was insufficient product information available
D) the inability to compare the final price before buying
A
39) The \_\_\_\_\_\_\_\_ while downloading a Web page is one of the most important determinants of its sales effectiveness. A) visual stimuli B) "flash and show" C) memory required D) time required
D
40) Although e-commerce can lower many costs of doing business, it still requires ________.
A) a professional Web designer’s input
B) a basic infrastructure in the distribution channel to process orders, maintain inventory, fill orders, and handle customer service
C) a brick-and-mortar store presence
D) None of the above
B
41) One survey reports that \_\_\_\_\_\_\_\_ percent of shoppers have gone into a store as a result of an online encounter with a business. A) 63 B) 91 C) 85 D) 72
B
42) Listing a site with a popular Web search engine will guarantee that surfing customers will find your site.
FALSE
43) Virtual shop owners using banner ads have no reason to buy ads in traditional advertising media.
FALSE
44) Experienced online shoppers tend to be unforgiving, quickly clicking to another site if their shopping experience is unsatisfactory or they are unable to find the products and information they want.
TRUE
45) Making money on the Web is easy.
FALSE
46) It is important that customers trust the Web sites they visit and one study reports that 89 percent of consumers worry about their privacy online.
TRUE
47) Businesses that publish privacy policies, and then adhere to them, build trust among their customers, an important facet of doing business on the Web.
TRUE
48) One of the surest ways to alienate online customers is to abuse the information collected from them by selling it to third parties or by spamming them with unwanted solicitations.
TRUE
49) Trust is the foundation on which the long-term customer relationships that are so crucial to the Web success are built.
TRUE
50) Building a successful e-business does not necessarily require a well-thought-out strategy, it simply involves securing a good URL and getting online.
FALSE
51) The concept of a traditional marketing strategy is not necessary in building a successful e-business.
FALSE
52) The most important part of any e-commerce effort is technology.
FALSE
53) E-commerce requires focusing on technology first and then determining how the technology fits the business idea.
FALSE
54) On the Web, service is not as important as it is in a traditional retail environment.
FALSE
55) The most common reason online customers abandon their shopping carts is that the shipping charges are too high.
TRUE
57) The amount of time the average person spends online is \_\_\_\_\_\_\_\_ than she/he spends watching television. A) less B) about the same C) almost one-half D) more
D
58) Rather than trying to compete head to head with the dominant players on the Web with greater access to resources, entrepreneurs should consider focusing on \_\_\_\_\_\_\_\_. A) serving a market niche B) serving a geographic niche C) only brick-and-mortar retail channels D) building a Web site in-house
A
59) Many Web sites seek to create, develop, and facilitate a ________.
A) technology that is fast and complex
B) site that appeals to a broad range of diverse visitors
C) community of customers with similar interests
D) site that provides a variety of information that most anyone can find useful
C
60) Customers will typically welcome well-constructed permission e-mail that directs them to company sites for information or special deals, unlike unsolicited and universally despised e-mail known as \_\_\_\_\_\_\_\_. A) spam B) electronic flyers C) voice mail D) clipboards
A
61) Strategies for successful e-commerce efforts should include all of the following except ________.
A) focusing on a niche market
B) developing a community of customers
C) attracting visitors by giving away “freebies”
D) adding value to recipients by sending spam e-mail
D
62) For entrepreneurial companies that lack brand and name recognition, and if building name recognition is one of the keys to success on the Web, one effective and affordable option may be to ________.
A) invest more in online promotion
B) rely on viral marketing
C) develop better brand recognition
D) form strategic alliances with larger companies that can add credibility
D
63) Visitors begin to evaluate the credibility of a Web site as soon as they arrive. Which of the following does not help develop a site’s credibility?
A) Posting a privacy policy.
B) Citing reference sources.
C) Presenting fair and objective information.
D) Avoiding the promotion of brand names.
D
64) Businesses selling less well-known brands should ________.
A) reduce prices
B) offer freebies
C) use customer testimonials and endorsements
D) All of the above
C
65) Approximately \_\_\_\_\_\_\_\_ percent of Web users speak English. A) 38 B) 27 C) 37 D) 29
B
66) An estimated \_\_\_\_\_\_\_\_ percent of adults participate in social networks and the highest level of participation is social media is among adults \_\_\_\_\_\_\_\_ 30 years of age. A) 65; over B) 73; under C) 55; over D) 55; under
B
67) One common mechanism to attract international visitors is to include several ________.
A) alternative forms of payment options
B) language buttons
C) images reflecting multiple cultures
D) colors and symbols reflective of international cultures
B
68) A Web site or an application that combines content from multiple sources is a \_\_\_\_\_\_\_\_. A) mashup B) Really Simple Syndication (RSS) C) wiki D) widget
A
69) Examples of social media tools include \_\_\_\_\_\_\_\_. A) mashups and podcasts B) social networking and RSS feeds C) wikis and blogs D) All the above
D
70) Some companies use \_\_\_\_\_\_\_\_ to encourage customers to participate in the design of their products, a process called \_\_\_\_\_\_\_\_. A) wikis; co-creation B) wikis; collaboration C) widgets; co-creation D) mashups; co-creation
A
71) Search engine listings that are the result of "spiders," powerful programs that crawl around the Web and analyze sites for keywords links, and other data are \_\_\_\_\_\_\_\_ listings. A) wikis, or Web 2.0 B) widgets, or organic C) mashups, or natural D) natural, or organic
D
72) An effective search engine optimization (SEO) strategy can be maintained through \_\_\_\_\_\_\_\_. A) natural, or organic, listings B) paid or sponsored listings C) paid inclusions D) All of the above
D
73) A situation that occurs when a company pays for clicks that are generated by someone with no interest in or intent to purchase its products or services is called \_\_\_\_\_\_\_\_. A) paid inclusion B) unpaid inclusion C) click fraud D) an unnatural listing
C
74) When creating a Web site, the goal is to create a design ________.
A) in which customers “see themselves” when they visit
B) that is flashy
C) in which customers cannot relate
D) that is inclusive of everyone in most every situation
A
75) A company that pays a search engine for the right to submit either selected pages or the entire content of the Web site is referred to as \_\_\_\_\_\_\_\_. A) click fraud B) web analytics C) paid or sponsored listings D) Really Simple Syndication (RSS)
C
76) All of the following are effective ways to encourage customers to return to a site except ________.
A) offer “frequent buyer” programs
B) clearly state prices and shipping charges
C) advertise with “pop-ups”
D) provide a search function
C
77) A key aspect of an online strategy is to create it with the target audience in mind.
TRUE
78) Before your Web site can become the foundation of a successful e-business, you must create it with your target audience in mind.
TRUE
79) For some businesses, e-mail takes a very low priority.
TRUE
80) Establishing a policy of responding to all customer e-mails within 24 hours and sending customers order and shipping confirmations and “thank you for your order” e-mails are not very important to enhancing online customer service.
FALSE
81) Flash always makes a Web site better.
FALSE
82) Web-based companies should not be concerned with supply-chain management, warehouses, or typical customer service policies.
FALSE
83) Although e-tailers avoid the major problems that managing inventory presents, they lose control over delivery times and service quality.
TRUE
84) The greatest opportunities for e-commerce lie in the retail sector.
FALSE
85) An important factor of e-commerce is speed.
TRUE
86) It is better to avoid delays in going online by simply getting your site up and running, and then fixing it, tweaking it, and updating it to meet changing customer demands, rather than taking so much time trying to create the perfect online store at first attempt - try it, learn from it, and then fix it.
TRUE
87) The goals of e-commerce are not different from traditional offline businesses — to increase sales, improve efficiency, and boost profits by serving customers better.
TRUE
88) Launching an e-business is very different from launching a traditional off-line company.
FALSE
89) The typical Internet user now spends more time on the Internet than watching television.
TRUE
90) How a company integrates the Web into its overall business strategy is a major factor in determining how successful it ultimately will become.
TRUE
91) Rather than try to compete head-to-head with the dominant players on the Web who have almost unlimited resources and recognition, entrepreneurs should consider focusing on serving a market niche.
TRUE
92) A marketing niche can be defined by customer profile, product, product usage, and many other ways.
TRUE
93) Before launching into the design of their Web sites, entrepreneurs must develop a clear picture of their target customers.
TRUE
94) A method of increasing customer loyalty and establishing better relationships is to develop a community of customers with similar interests who can use chat rooms, message boards, guest books, etc.
TRUE
95) You should never offer your customers “freebies” unless they are truly valuable and expensive, otherwise you will earn a negative reputation among your customers.
FALSE
96) Most customers welcome well-constructed permission e-mail that directs them to a company’s site for information or special deals however, they usually do not appreciate spam.
TRUE
97) One of the simplest ways to establish credibility with customers is to use brand names they know and trust.
TRUE
98) A method small businesses might use to achieve more of the brand and name recognition that larger, more established companies have is to form strategic alliances with bigger companies.
TRUE
99) Almost 75 percent of Internet users live within the United States.
FALSE
100) Really Simple Syndication (RSS) is an application that allows subscribers to aggregate content from their favorite Web sites into a single feed.
FALSE
101) A mashup is a Web site or an application that combines content from multiple sources into a single Web service.
TRUE
102) Mashups, blogs, social networking, RSS feeds, wikis and widgets are popular social media tools used by businesses.
TRUE
103) A wiki is a low-cost application that appears like a small television screen on a Web site, a blog, or a computer desktop and performs a specific function.
FALSE
104) An effective search engine optimization (SEO) strategy must recognize the three basic types of search engine results — natural or organic listings, paid or sponsored listings, and paid inclusion.
TRUE
105) Paid or sponsored listings are long, heavy-text advertisements with links to the sponsoring company’s Web site that appear on the results page of a search engine when the user types in a keyword or phrase.
FALSE
108) Perhaps the best domain name is one that ________.
A) customers can easily guess if they know the company’s name
B) is complex to stop competitors from copying it
C) sounds very much like a larger competitor’s name
D) does not use the company’s initials
A
109) The ideal domain name should be \_\_\_\_\_\_\_\_. A) short B) memorable C) easy to spell D) All of the above
D
110) To launch a successful Web site, business owners should consider ________.
A) a simple design that is easy to navigate
B) that to stand out on the Web, the site really has to sparkle
C) all the “bells” and “whistles” technology can provide
D) that flash makes a Web site better
A
111) Responsible online merchants should make sure shipping and handling charges are \_\_\_\_\_\_\_\_. A) reasonable B) displayed early in the buying process C) easy to find D) All of the above
D
112) A successful Web site should include all of the following characteristics except ________.
A) a FAQ section
B) continuous automated music that cannot be cut off
C) updated and timely information
D) readable font sizes
B
113) The pages on which visitors land after they click on a sponsored link in a search engine, e-mail ad, or online ad are referred to as \_\_\_\_\_\_\_\_ page(s). A) landing B) the home C) the transition D) the search
A
114) Popular social media tools for small businesses include \_\_\_\_\_\_\_\_. A) social networking B) online videos C) Webcasts D) All the above
D
115) One of the most valuable benefits of giving customers a reason to return to your site is that it can be an effective tool to \_\_\_\_\_\_\_\_. A) deter competitive action B) increase traffic C) build customer loyalty D) establish online habits
C
116) The purchase funnel identifies ways to improve the online shopping experience. The process begins with ________ and ends with ________.
A) promoting an online presence; a streamlined checkout process
B) making the site easy to find; a streamlined checkout process
C) promoting the URL; a purchase
D) creating customer confidence; the payment process
A
117) The more innovative your domain and name, the better.
FALSE
118) Establishing hyperlinks with different product types will ensure you cover a variety of different customers and give customers what they want.
FALSE
119) The better Web sites avoid clutter, include a menu bar for easier navigation, include a FAQ section, and are careful about typos, formatting, font sizes, and colors
TRUE
120) Responsible online merchants should keep shipping and handling charges reasonable, but do not need to show them early in the check-out process.
FALSE
124) Tools that measure a Web site's ability to attract customers, generate sales, and keep customers coming back are \_\_\_\_\_\_\_\_. A) Web analytics B) recency C) cost per acquisition tools D) conversion tools
A
125) The number of visitors to a company's Web site who view a single page and leave without viewing other pages is referred to as the \_\_\_\_\_\_\_\_. A) stickiness of the site B) click-stream C) conversion ratio D) bounce rate
D
126) A measurement of the cost a company incurs to generate each purchase or customer registration is the \_\_\_\_\_\_\_\_. A) cost per acquisition (CPA) B) bounce rate C) conversion ratio D) browser-to-buy ratio
A
127) The percentage of shoppers who place at least one item in a shopping cart but never complete the transaction is called the \_\_\_\_\_\_\_\_. A) bounce rate B) cart abandonment rate C) conversion rate D) cost per acquisition
B
128) The \_\_\_\_\_\_\_\_ is the percentage of visitors to the site who actually make a purchase and the average is about \_\_\_\_\_\_\_\_ percent. A) conversion rate; 1.28 B) bounce back rate; 3.21 C) conversion rate; 2.55 D) cost per acquisition; 3.29
C
129) The conversion ratio, or browse-to-buy ratio is the proportion of visitors to a site who visit, but do not actually make a purchase.
FALSE
130) The bounce rate measures the percentage of shoppers who place at least one item in a shopping cart but never complete the transaction.
FALSE
131) The conversion rate measures the proportion of visitors to a site who actually make a purchase.
TRUE
132) Web analytics are a variety of tools that measure a Web site’s ability to attract customers, generate sales, and keep customers coming back.
TRUE
133) To minimize the likelihood of invasion by hackers, e-commerce companies rely on several tools, including \_\_\_\_\_\_\_\_. A) virus detection software B) intrusion detection software C) firewalls D) All of the above
D
134) Which of the following is a security software that can trace a hacker's location? A) Virus detection software B) Intrusion detection software C) A firewall D) A viral site
B
135) A combination of hardware and software that allows employees to have access to the Internet but keeps unauthorized users from entering the company's network is called \_\_\_\_\_\_\_\_. A) virus detection software B) intrusion detection software C) a firewall D) Web protection
C
136) Web sites have two conflicting goals regarding security. The first is to establish a presence on the Web so that customers from across the globe can have access to its site, and the second goal is to ________.
A) maintain a database system of customer information and preferences
B) have a system in place to prosecute hackers
C) maintain a high level of security so that the business, its site, and the information it collects are safe from hackers and intruders intent on doing harm
D) develop an in-house payment processing system
C
137) A valuable method of preventing online fraud is to ________.
A) ask customers for their card verification value
B) not accept credit cards
C) run background checks on customers
D) All of the above
A
138) The most common problem is the online transactions that customers dispute, referred to as \_\_\_\_\_\_\_\_. A) acts of fraud B) chargebacks C) torts D) recency
B
139) Virus detection software, intrusion detection software, and a firewall are tools that minimize the likelihood of invasion by hackers and eliminate your responsibility for damages they inflict.
FALSE
140) Intrusion detection software scan computer drives for viruses designed to harm computers and the information they contain.
FALSE
141) An important way to prevent online credit card fraud is to ask customers not only for their card number and expiration date, but also for the three-digit number above the signature panel on the back of the credit card — the card verification value.
TRUE
142) Click-through rate measures the proportion of people who see an online ad and actually click on it to reach the company’s Web site.
TRUE
