TEST BANK for eMarketing 9th Edition Digital Marketing Strategy by Frost, Fox & Daugherty.

5.

Data, such as digital coupons or customer complaints, exchanged between companies and consumers typically travel via _____, while off-line electronic data collection, such as bar code scanners or databases, shared internally within an organization, travel via ________. a. internet; intranet b. extranet; internet c. extranet; intranet d. the Web; the social network (a; Moderate; LO1; Use of Information Technology)

6.

All the following digital marketing technologies exist without the World Wide Web, except ________. a. electronic data interchange b. email c. text messaging d. hypertext navigation (a; Difficult; LO1; Use of Information Technology)

7. In its technical performance, the internet supports the following roles except ________. a. human users and computers that access content and send email b. technology infrastructure to move, create, and view content c. content providers that create information, entertainment, and so forth d. none; all of the above roles are supported by the internet. (d; Moderate; LO4; Use of Information Technology)

8. The internet can deliver content to all the following except _________. a. televisions sets b. refrigerators c. paper shredders d. automobiles (c; Easy; LO4; Use of Information Technology)

2

9. Which of the following outcomes has been cited as a negative one in terms of the world becoming a globally networked world? a. growing class divisions due to digital divide b. removing cultural differences c. efficient markets driven by more workaholism d. all of the above (d; Difficult; LO5; Analytic Skills)

10. During the “first wave of internet disruption” companies essentially offered _________. a. high-end products for mass markets b. tangible products that can be compared easily and purchased at relatively low prices c. commodities available in bulk quantity d. real estate (b; Moderate; LO5; Analytic Skills)

11. Which of the following strategies and tactics illustrate the comprehensive integration of the internet, technology, and marketing? a. digital commerce b. user-generated content c. social media d. all of the above (d; Difficult; LO5; Analytic Skills)

12. Charles Schwab pitted their online business vs. their established brick and mortar business.

Which of the following is not a result of this competition? a. faster growing accounts and assets b. lower prices c. more sales of treasury bonds and less sales of private securities d. incorporation of successful e-marketing strategies (c; Difficult; LO1; Analytic Skills)

13. Internet properties, or characteristics, that impact marketing include________. a. global reach b. market deconstruction c. scalable capacity d. all of the above (d; Easy; LO1; Use of Information Technology)

3

14. As consumers become more demanding, the internet is a good way to deliver customer value because ________. a. most products on the internet are less expensive than on other marketing channels b. broadband allows marketers to put more cookies on computers c. marketers can send digital coupons to millions of customers instantly d. customers gain ability to create, share, and access information and entertainment at will (d; Moderate; LO3; Reflective Thinking Skills)

15. As a strategy, content marketing could involve: a. Creating content on websites b. Publishing content on social media c. An e-mail offering a free white paper d. All of the above (d; Moderate; LO3; Use of Information Technology)

16. The internet has the power to do all of the following except ________. a. create global communities based on interests b. decrease cultural and language differences c. prevent the upward mobility of people and countries at lower socioeconomic levels d. discourage workaholism (d; Moderate; LO1; Use of Information Technology)

17. Following the boom and bust of the first wave of the internet era, industrialized countries entered the ________. a. boom b. bust c. trough of disillusion d. maturity stage (d; Difficult; LO5; Analytic Skills)

18. Which of the following is true regarding print media? a. It is enjoying a new surge in popularity thanks to websites b. It is declining due to subscriber and advertiser declines c. Twitter, YouTube, and e-mail are used for breaking news d. Both b and c (d; Moderate; LO5; Analytic Skills)

4

True/False 19. Individuals can be both users and content providers on the internet. a. True b. False (a; Moderate; LO1; Use of Information Technology)

20. Digital marketing is simply the result of information technology applied to traditional marketing. a. True b. False (b; Moderate; LO2; Use of Information Technology)

21. The internet provides individual users with the ability to access information, entertainment, and communication. a. True b. False (a; Easy; LO4; Use of Information Technology)

22. A blog is a type of online community, but a peer-to-peer file sharing website, such as Dropbox, is not. a. True b. False (b; Moderate; LO4; Use of Information Technology)

23. The highest proportion of global internet users (almost 50%) are located in Asia. a. True b. False (a; Difficult; LO5; Multicultural and Diversity Understanding)

24. Unsolicited communications, such as spam, represent a threat to the positive impact of emarketing practices. a. True b. False (a; Moderate; LO1; Use of Information Technology)

25. Electronic marketing relies exclusively upon web-based technology. a. True b. False (b; Difficult; LO5; Use of Information Technology)

5

26. The internet has shifted the balance of power from sellers to buyers. a. True b. False (a; Easy; LO3; Reflective Thinking Skills)

27. The internet is largely the product of ARPANET, a project commissioned by the United States’ Department of Defense. a.

True b.

False (a; Difficult; LO5; Use of Information Technology)

28. Content marketing involves strategically creating and publishing content to engage and entice users for information or entertainment purpose. a.

True b.

False (a; Easy; LO3; Use of Information Technology)

29. An example of customer engagement via crowdsourcing is becoming a fan of a brand on Facebook. a.

True b.

False (a; Easy; LO3; Use of Information Technology)

6

Essay Questions 30. What is the difference between the internet, an extranet and an intranet?

The internet is a global network of interconnected computers. Access to the internet is very broad and open.

▪ An extranet is two or more proprietary or company owned networks that are joined to share information. Access to this network is limited.

▪ An intranet is an internal network for a company that uses internet standards. Access is limited to internal company use only.

(Easy; LO1; Use of Information Technology) ▪

31. What is a content provider on the internet?

Content providers are individuals and organizations that create digital text, video, audio, and graphics to be sent over the internet to users who receive it as information, entertainment or communications.

(Moderate; LO1; Analytic Skills)

32. Define what community means for the internet and give examples.

Communities for the internet are groups of users who come together to share information, hold discussions and exchange data. Examples include blogs or web logs, auctions, and peer-to peer networking.

(Easy; LO1; Analytic Skills)

33. Concerning internet usage, what is the digital divide?

Internet adoption is affected by money, literacy, and education. This creates a divide between those who have access to the internet and those who don’t. It impairs the upward mobility of those on the lower socioeconomic level, who don’t have access to the internet and the information that comes with it. This impacts individuals on the lower socioeconomic levels and those living in less developed countries.

(Moderate; LO5; Reflective Thinking Skills)

7

34. What is the semantic web and how will consumers benefit in the future?

Web 3.0 Seamless integration of information and appliance (i.e., computer, phone, device, etc.) connected all of the time ▪ Data with meaning ▪ Examples include wearable computing, artificial intelligence, machine learning, data accessibility, augmented reality, among numerous others areas (Difficult; LO1; Analytic Skills) ▪ ▪

35. The strength of the internet has affected traditional marketing in several ways. List three of them and how they affected marketing.

Power shift from sellers to buyers (focus on customer relationship management) Market Fragmentation (more focus on small target markets and 1 to 1 marketing) Death of distance or geographic location affect (less focus on place for marketing) Knowledge management is key (Track results in real time and focus on database analysis) ▪ Interdisciplinary focus (Marketers must understand technology and use it wisely) ▪ Intellectual Capital rules (focus on creativity and imagination) (Difficult; LO5; Reflective Thinking Skills) ▪ ▪ ▪ ▪

36. Marketers face new challenges with the advent of streaming, on-demand, and other digital video recorders. What is the main challenge and what have companies like Roku or Hulu done to alleviate some of the concerns of marketers?

The main challenge is the ability of consumers to speed through and skip commercials that advertisers have paid for based on their ability to communicate with consumers.

▪ Roku (Hulu) has setup content with advertising included that viewers can watch at their leisure and Roku (Hulu) can provide specific metrics to the advertisers on these programs.

(Difficult; LO4; Reflective Thinking Skills) ▪

8

CHAPTER TWO STRATEGIC DIGITAL MARKETING AND PERFORMANCE METRICS Multiple Choice 1.

Which of the following is a goal oriented focus of strategic planning? a. growth b. competitive position c. geographic scope (e.g., expansion) d. all of the above (d; Easy; LO1; Analytic Skills)

2.

The four performance areas of the balanced scorecard include all of the following except ________. a. customer perspective b. internal business perspective c. learning and growth perspective d. metrics perspective (d; Moderate; LO3; Analytic Skills)

3.

Regarding customers and business partnerships, digital marketing is capable of improving the overall value propositions by ________. a. increasing benefits for customers b. decreasing costs for customers and the company c. increasing the revenues d. all of the above (d; Moderate; LO2; Analytic Skills)

4.

The various levels of organizational commitment to eBusiness include all of the following, except ________. a. activity b. business process c. enterprise d. business policy (d; Moderate; LO2; Use of Information Technology)

5.

Which of the following is true about business use of informational technology? a. It generally increases benefits to stakeholders. b. It generally lowers costs to stakeholders. c. It can lead to a decrease in value to stakeholders. d. All of the above. (d; Easy; LO1; Use of Information Technology)

1

6.

Which of the following is not a viable competitive position for a firm within its given industry? a. industry leader (e.g., Google) b. price leader (e.g., Priceline) c. quality leader (e.g., Mercedes) d. business model leader (e.g., Borders) (d; Moderate; LO1; Analytic Skills)

7.

Corporate level business strategies that include information technology components, such as internet and digital databases, are known as ________. a. marketing strategies b. eBusiness strategies c. eMarketing strategies d. corporate strategies (b; Easy; LO2; Use of Information Technology)

8.

Which of the following is not one of the four appropriate rationales for choosing the objectives of a strategic plan? a. strategic justification b. personal justification c. technical justification d. financial justification (b; Moderate; LO1; Reflective Thinking Skills)

9.

Important elements of value include all of the following except ________. a. customers’ perception of product benefits b. partners’ perception of product costs c. customer evaluations of support services d. all of the above (b, Moderate, LO3; Analytic Skills)

2

10.

Which of the following processes is unlikely to be carried out at the activity level of eBusiness commitment? a. customer relationship management b. online purchasing c. email d. dynamic pricing online (a; Difficult; LO2; Reflective Thinking Skills)

11.

Which of the following is not an activity which is likely to be practiced at the business process level of eBusiness commitment? a. content publishing b. knowledge management c. direct selling d. database marketing (c; Difficult; LO2; Reflective Thinking Skills)

12.

________ are specific measures designed to evaluate the effectiveness and efficiency of an organization’s operations. a. Strategic outcomes b. Key performance metrics c. Business models d. Strategic objectives (b; Moderate; LO3; Analytic Skills)

13.

________ can be learned from dividing net profits by total assets. a. Return on investment (ROI) b. Market capitalization c. Earnings d. Income (a; Easy; LO3; Analytic Skills)

14.

Profits and return on investment (ROI) are among the most common metrics used to assess performance from the ________ perspective. a. customer b. internal c. innovation/learning d. financial (d; Moderate; LO3; Reflective Thinking)

3

15.

Content sponsorship, direct selling, and social networking, occur at the ________ of the eBusiness model. a. activity level b. business process level c. enterprise level d. none of the above (c; Difficult; LO2; Use of Information Technology)

16.

Database marketing and customer relationship management (CRM) occur at the ________ of the e-business model. a. activity level b. business process level c. enterprise level d. none of the above (b; Difficult; LO2; Use of Information Technology)

17.

Within the eBusiness model, email occurs ________. a. at the activity level b. at the business process level c. at the enterprise level d. none of the above (a; Difficult; LO2; Use of Information Technology)

18.

As one of the social media performance metrics, action metrics could include all of the following except: a. click-through b. share of voice c. event attendance d. purchase (b; Easy; LO4; Analytic Skills)

19.

The internal perspective of the Balanced Scorecard gives particular attention to ________. a. market share b. shareholder value c. supply chain value to the company d. customer satisfaction (c; Moderate; LO3; Analytic Skills)

4

True/False 20.

The Balanced Scorecard is based on three stakeholder perspectives. a. True b. False (b; Easy; LO3; Analytic Skills)

21.

Return on investment (ROI) is a popular metric used to measure performance regarding the financial perspective or the Balanced Scorecard. a. True b. False (a; Moderate; LO3; Analytic Skills)

22.

As a marketer using the social commerce business model, you would leverage social media and consumer interactions to facilitate online sales. a. True b. False (a; Moderate; LO2; Use of Information Technology)

23.

Objectives, strategies and tactics exist exclusively at the executive level. a. True b. False (b; Difficult; LO1; Reflective Thinking Skills)

24.

In order to determine whether a business model is an appropriate fit for a given firm it is important to consider connected activities and price. a. True b. False (a; Moderate; LO2; Reflective Thinking Skills)

25.

All eBusiness models are internet business models. a. True b. False (b; Easy; LO2; Reflective Thinking Skills)

26.

Customer relationship management focuses only on retaining existing individual customers. a. True b. False (b; Moderate; LO2; Reflective Thinking Skills)

5

27.

The Balanced Scorecard can be used by all types of businesses. a. True b. False (a, Moderate, LO3; Reflective Thinking Skills)

28.

Strategy represents the means to achieve a goal. a. True b. False (a; Easy; LO1; Reflective Thinking Skills)

29.

An eBusiness model is a method by which the organization sustains itself in the long-term using information technology resources and principles. a. True b. False (a; Moderate; LO2; Use of Information Technology)

30.

Information technology always lowers costs to business stakeholders. a. True b. False (b; Difficult; LO2; Use of Information Technology)

31.

Growth in market share is the main way for eCommerce companies to evaluate long term performance. a. True b. False (b; Difficult, LO3; Analytic Skills)

Essay 32.

What are four types of justifications that a decision maker may cite to support or oppose an organizational or marketing campaign?

▪ Strategic justification ▪ Operational justification ▪ Technical justification ▪ Financial justification (Moderate; LO1, Reflective Thinking Skills)

6

33.

From the customer’s perspective, what are the value-added benefits of e-marketing?

▪ Online mass customization ▪ Personalization ▪ 24/7 Convenience ▪ Self-service ordering and tracking ▪ One-stop shopping (Moderate; LO1; Use of Information Technology)

34.

Business organizations may vary according to their e-business activities. What are the different levels of commitment to e-business available to these organizations?

▪ Activity: e-mail, blog ▪ Business process: customer relationship management (CRM) ▪ Enterprise: offline and online retailing ▪ Pure play: 100% online, dot-com or dot-net, presence (Difficult; LO2; Use of Information Technology)

35.

What are the most important considerations in selecting social media performance metrics?

• Must be easily measurable on a continuous basis • Must be directly applicable to the organization’s social media objectives (Difficult; LO4; Analytic Skills)

36.

What are the four perspectives of the Balanced Scorecard?

▪ Customer ▪ Internal business ▪ Learning and growth ▪ Financial (Easy; LO3, Reflective Thinking Skills)

37.

On what bases can organizations appraise or evaluate their business models?

• Customer Value • Scope • Price • Revenue Sources • Connected Activities • Implementation • Capabilities • Sustainability (Moderate, LO2; Analytic Skills)

7

38.

The Balanced Scorecard provides several metrics for evaluating the customer perspective.

What are these specific metrics?

▪ Customer Loyalty ▪ Lifetime Value ▪ Customer perceptions ▪ Penetration of target market ▪ Customer buying patterns (Difficult; LO3, Reflective Thinking Skills)

8

CHAPTER THREE THE DIGITAL MARKETING PLAN Multiple Choice 1.

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

2.

The two most common types of digital marketing plans are known as the venture capital 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 eBusiness 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)

1

6.

A well composed business plan should contain enough data and logic to prove that ________. a. the eBusiness 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. eBusiness 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)

2

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)

3

16.

In the fifth step of the digital 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 digital 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 digital marketing plan is implemented, its success depends on ________. a. funding b. planning c. continuous evaluation d. formulating objectives (c; Moderate; LO2)

4

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 be 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 digital 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)

5

28.

Digital 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 digital 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 digital 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)

6

34.

What are the seven steps of the digital marketing plan?

▪ Situation analysis ▪ Digital marketing strategic planning ▪ Objectives ▪ Digital marketing strategy ▪ Implementation plan ▪ Budget ▪ Evaluation plan (Moderate; LO1; Analytic Skills)

35.

In the creation of a digital marketing plan what are the advantages and drawbacks 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)

7

36.

In your own words, what is the argument for the distinction between tiers one and two of digital marketing strategies? Make sure to define the elements of each tier.

▪ Tier One – 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)

8

37.

What are some of the typical objectives of digital marketing plans?

• Increase market share • Increase sales revenue • Reduce costs • Achieving 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 digital 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 the 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)

9

CHAPTER FOUR GLOBAL MARKETS 3.0 Multiple Choice 1.

The web’s content and language will become ________ while companies cater to a variety of cultures and provide local content. a. less diversified b. more diversified c. less visual d. none of the above (b; Moderate; LO1; Dynamics of Global Economy)

2.

The greatest challenges to digital marketing opportunities lie in ________. a. countries with emerging economies b. countries with developed economies c. countries in Asia d. countries in South America (a; Moderate; LO3; Dynamics of Global Economy)

3.

________ are ideally suited for the broad range of digital marketing activities. a. Emerging economies b. Developed countries c. Underdeveloped countries d. Least developed countries (LDCs) (b; Moderate; LO2; Multicultural and Diversity Understanding)

4.

Emerging economies ________. a. have low levels of GDP b. are experiencing rapid growth c. are working toward improved standards of living for their citizens d. all of the above (d; Easy; LO2; Dynamics of Global Economy)

5.

Businesses in emerging economies must deal with problems such as ________. a. fewer computer users b. expanded credit card use c. several methods of online payment d. all of the above (a; Moderate; LO2; Dynamics of Global Economy)

1

6.

A company operating from a country with an emerging economy and wanting to target markets in developed countries must understand ________ within the population. a. market similarity b. market differences c. market dissimilarity d. domestic markets (b; Moderate; LO3; Multicultural and Diversity Understanding)

7.

All of the following are examples of market similarity between developed countries, except ________. a. high literacy rates b. high internet usage rates c. distrust of credit cards d. efficient package delivery services (c; Moderate; LO3; Multicultural and Diversity Understanding)

8.

eCommerce is emerging markets is often hampered, or hindered, by ________. a. limited use and acceptance of credit cards b. types of products purchased online c. clear definition of market segments willing to shop online d. all of the above (a; Moderate; LO3; Dynamics of Global Economy)

9.

eMarketers working in emerging economies should know and understand ________. a. how many credit cards are in circulation b. consumer attitudes toward online purchasing c. both of the above d. none of the above (c; Easy; LO3; Analytic Skills)

10.

Why are diaspora communities an important consideration for eBusinesses? a. Infrastructure is not yet sufficiently developed in home countries. b. Markets in home countries must deal with slow internet connection speeds. c. eBusinesses operating in countries with emerging markets can use market similarity to target diaspora communities living abroad. d. Market convergence runs ahead of the curve in emerging economies, providing a useful entry point to eBusinesses. (c; Moderate; LO3; Dynamics of the Global Economy)

2

11.

Within emerging economies, labor costs may be quite low, but technology and other business costs can be quite high because of ________. a. privately-owned telephone monopolies b. lack of competition between ISPs c. lower internet-related business costs than those in developed countries d. all of the above (b; Difficult; LO2; Analytic Skills)

12.

According to the text, _________ saw the greatest growth in internet use from 2011 to 2017. a. Asia b. Africa c. Europe d. North America (b; Difficult; LO1; Analytic Skills)

13.

With the explosive growth and diffusion of ________ the face of digital marketing has changed quite dramatically throughout the world. a. electricity sources b. mobile/cellular phones c. language translators d. internet cafes (b; Moderate; LO1; Dynamics of Global Economy)

14.

_________ consumers are much more likely to use messaging apps such as WeChat than default messaging platforms that come installed on smartphones. a. Cambodian b. Nigerian c. British d. Chinese (d; Moderate; LO1; Multicultural and Diversity Understanding)

15.

________ are those countries with the world’s poorest economies. a. Underdeveloped countries b. Emerging economies c. Least developed countries d. Developed countries (c; Easy; LO2; Multicultural and Diversity Understanding)

3

16.

In which of the following BRIC countries is Facebook not the dominant social networking site, according to the text? a. Brazil b. Russia c. India d. China (b; Difficult; LO2; Multicultural and Diversity Understanding)

17.

________ means that between countries and between different groups of people within countries, there is a wide division between those who have real access to information and communication technology and those who do not. a. Digital disparity b. The digital divide c. Technological division d. Technological poverty (b; Moderate; LO3; Multicultural and Diversity Understanding)

18.

________ are businesses that are completely Web-based at their founding. a. broadband firms b. electronic infrastructure firms c. born global firms d. epicenter firms (c; Moderate; LO3; Multicultural and Diversity Understanding)

19.

Successful global eMarketers understand that one of the keys to success is to ________. a. have a strategy that is adaptable to different local markets b. have a strategy that is similar in all countries c. have a strong wireless campaign d. emphasize web design and graphic in their web sites (a; Difficult; LO3; Multicultural and Diversity Understanding)

20.

Internet penetration can be affected by many factors, including ________. a. income b. infrastructure c. computer ownership d. all of the above (d; Moderate; LO3; Multicultural and Diversity Understanding)

4

True/False 21.

According to the text, a truly global internet is likely to accelerate the convergence of styles, tastes, and products to create a more homogeneous marketplace. a. True b. False (a; Moderate; LO1; Dynamics of Global Economy)

22.

BRIC nations among the world’s Big Emerging Economies (BEMs) account for more than 40% of the world’s population. a. True b. False (a; Moderate; LO1; Multicultural and Diversity Understanding)

23.

Technology plays an important role in helping any country improve its level of economic development through increased efficiencies in production, distribution, and sale of goods and services. a. True b. False (a; Difficult; LO2)

24.

Limited credit card use among non-US customers slightly restricts a target market’s purchasing ability. a. True b. False (b; Moderate; LO3; Analytic Skills)

25.

As evidenced by Druk.net of Bhutan, successful digital marketing can leapfrog a company from nowhere to somewhere in a relatively short period of time. a. True b. False (a; Easy; LO2; Use of Information Technology)

26.

Low rates of computer ownership always inhibit opportunities for eBusiness entrepreneurs in emerging economies. a. True b. False (b; Difficult; LO2; Use of Information Technology)

5

27.

Countries with emerging economies often have lower internet-related business costs. a. True b. False (b; Moderate; LO1; Analytic Skills)

28.

Companies often consider market similarities across different in order to evaluate entry risks. a. True b. False (a; Easy; LO3; Multicultural and Diversity Understanding)

29.

Understanding the national infrastructure for providing electricity throughout a country is an unimportant element in assessing foreign markets. a. True b. False (b; Moderate; LO3; Analytic Skills)

30.

The increased availability of mobile phones will definitely eliminate the challenges of wireless marketing. a. True b. False (b; Difficult; LO2; Use of Information Technology)

31.

Media dark refers to rural Indian communities that have no access to radio or TV. a. True b. False (a; Easy; LO2; Use of Information Technology)

32.

With regards to purchasing patterns and practices, it is crucial for global eMarketer to understand the world from their target market’s perspective. a. True b. False (a; Moderate; LO3; Multicultural and Diversity Understanding)

6

Essay Questions 33.

What effects will the increasing number of non-US users have on the internet?

▪ Content more diversified ▪ Language more important issue ▪ Convergence of style, tastes and products ▪ More homogeneous marketplace (Easy, LO1; Dynamics of Global Economy)

34.

What are some of the possible solutions to the limited use of credit cards in emerging economies?

▪ Cash on delivery (COD) ▪ Payment at physical location ▪ Bank Transfers ▪ Postal or money orders ▪ Prepaid credit cards or digital cash (eBanka of the Czech Republic) (Moderate, LO3; Analytic Skills)

35.

What are some significant technological challenges to digital marketing in emerging economies?

▪ Limited access to computers ▪ Telephone access ▪ Slow internet connection speeds ▪ Cost or lack of availability of internet Service Providers (ISPs) ▪ Inconsistent or lack of electricity ▪ Limited use of and support for credit cards for purchases (Moderate; LO2; Analytic Skills)

36.

The use of mobile phones to connect to the internet solves some of the problems for eMarketers in emerging economies. What new challenges arise out of the use of mobile phones for internet access?

▪ Smaller screens ▪ Small keypads ▪ Short length for e-mails ▪ Create content that works on the Short Messaging Service (SMS) (Moderate; LO5; Use of Information Technology)

7

37.

Discuss global trends related to the adoption of smartphones, and what eMarketers must understand about these trends.

▪ Globally, smartphone use is on the rise ▪ Smartphone adoption rates the fastest of any technology innovation ever ▪ eMarketers must understand how smartphones are actually influencing consumer purchase behavior in various countries ▪ eMarketers must understand that while mobile and smartphone devices may be fairly similar, consumer behavior in various countries is not (Moderate; LO1; Use of Information Technology)

38.

Consider an internet or eCommerce company that sells exclusively in the US but wants to expand globally. What kind of strategy would you recommend for their initial expansion?

What are some of the factors they should consider in pursuing this expansion?

▪ Market similarity strategy ▪ Foreign markets that have similar characteristics to the US ▪ Developed economy ▪ High usage of computers and the internet ▪ High penetration of broadband ▪ High literacy rates ▪ General acceptance and usage of credit cards ▪ Efficient delivery system ▪ Secure online payment system (Difficult; LO3; Multicultural and Diversity Understanding)

39.

How has the China-based company Haier used its web presence to improve its global engagement of consumers and overall competitiveness?

▪ Language-specific versions of its website (e.g., www.haieramerica.com/en) ▪ Enabling customers to shop for and register products, and get warranty details ▪ Helping consumers locate after-sales and maintenance support ▪ Receiving inquiries from prospective dealers and distributors (Difficult; LO3; Use of Information Technology)

8

CHAPTER FIVE ETHICAL AND LEGAL ISSUES Multiple Choice 1.

Which of the following is not true in relation to law? a. law is directed toward the behavior of individuals or small groups, as opposed to entire populations b. law attempts to be consistent in time and place c. making law is often slow and complex d. law is an expression of values (a; Moderate; LO1; Analytic Skills)

2.

The central focus of ________ is the analysis and description of what is right and wrong and how we judge the difference. a. law b. ethics c. self-regulation d. privacy (b; Easy; LO1; Ethical Understanding and Reasoning Abilities)

3.

Which of the following is an ethical issue currently confronting those who work in electronic environments? a. intellectual property b. the role of privacy c. freedom of expression d. all of the above (d; Easy; LO5; Ethical Understanding and Reasoning Abilities)

4.

Favor for the model of self-regulation is supported by all of the following points except ________. a. the private sector’s speed in resolving problems within its area of expertise b. the often contradictory and confusing nature of law c. the motivation to voluntary compliance is compelled by greater consumer confidence d. the insufficiently compelling incentives (d; Moderate; LO2)

1

5.

The concept of privacy encompasses ________. a. ethical aspects b. legal aspects c. both of the above d. neither of the above (c; Easy; LO3)

6.

The general attributes of privacy fall into each of the following categories except the ________. a. seclusion theory b. autonomy model c. access-control viewpoint d. vacuum model (d; Difficult; LO3; Analytic Skills)

7.

What purpose(s) do digital cookies serve? a. recalling stored sales information b. collecting user data, such as name, addresses and phone numbers c. creating/updating features such as virtual shopping baskets d. all of the above (d; Easy; LO3; Use of Information Technology)

8.

Critics of opt out presumptions argue which of the following points? a. average consumers are often confused by many opt out routines b. consumers prefer targeted advertising c. the ability of consumers to opt-out cuts down on the effectiveness of marketing efforts d. opt out policies keep marketers from learning anything about consumers (a; Moderate; LO3; Use of Information Technology)

9.

Which of the following companies have been subject to criticism regarding their possible misuse of users’ private information? a. DoubleClick b. America Online c. Facebook d. All of the above (d; Difficult; LO3; Use of Information Technology)

2

10.

Which of the following is a ubiquitous application, meaning it is able to function without a user’s knowledge or control? a. Java applet b. Windows c. E-mail d. XML (a; Moderate; LO3; Use of Information Technology)

11.

Which of the following issues can be addressed by current conventional criminal statutes? a. workers are extended an expectation of privacy from their employers b. privacy of all American citizens is assured by federal law c. sanctions against the misuse of consumer data d. right of users to opt-out of data submission (c; Moderate; LO3)

12.

Traditionally, the law has used _______ to define ownership and protect intellectual property rights? a. copyrights b. patents c. trademarks d. all of the above (d; Moderate; LO4)

13.

Thus far, ________ have been established as the primary means of protecting most of content on the Internet. a. copyrights b. patents c. trademarks d. licenses (a; Difficult; LO4)

14.

According to trademark law, a certain redundancy is permitted as long as there is enough dissimilarity in which of the following factors? a. type of business b. product name c. language in brand promotions d. all of the above (d; Easy; LO4)

3

15.

________ allow a buyer to use a company’s product, but with restrictions on the ability to duplicate or distribute it. a. Copyrights b. Patents c. Trademarks d. Licenses (d; Moderate; LO4)

16.

All of the following can be defined as trade secrets except ________. a. formulas b. facts c. market data d. algorithms (b; Moderate; LO4)

17.

Which of the following is not a widely held criticism of spam? a. it places burdens on network resources b. it reduces the costs of marketing to target consumers c. it is an unwanted intrusion for receivers d. it is often derived from mailing lists not intended to be used for mass solicitation (b; Moderate; LO2; Analytic Skills)

18.

What is a legal method of protecting children from exposure to inappropriate, obscene, or indecent material online? a. filtering models b. censorship of the entire Internet c. the Computer Decency Act of 1996 d. all of the above (a; Difficult; LO5)

19.

Spoofing ________. a. is a legal term that describes the authority of a court over individuals, groups, or firms b. has traditionally been based upon physical presence or location c. is the action of extracting sensitive information by leading a user to believe the request is coming from a reputable source d. is unlikely to be experienced outside boundaries of other nations or states (c; Moderate; LO4)

4

20.

Which of the following is not a possible sanction for fraudulent conduct? a. forfeiture of property b. lifetime bans on Internet commerce c. civil judgments d. consumer education (d; Difficult; LO2)

True/False 21.

The study of ethics has been in existence for over 2,500 years. a. True b. False (a; Moderate; LO1; Ethical Understanding and Reasoning Abilities)

22.

If individuals copy, share, or distribute computer software without having purchased it under a licensed, then they may be supporting software piracy. a. True b. False (a; Moderate; LO4; Ethical Understanding and Reasoning Abilities)

23.

There is currently no law regulating consumers’ right to opt-out of unwanted data collection. a. True b. False (a; Moderate; LO3; Ethical Understanding and Reasoning Abilities)

24.

The issue of data collection is the only problem within the context of online privacy. a. True b. False (b; Easy; LO3; Use of Information Technology)

25.

Cybersquatting refers to practices whereby one party registers domain names belonging to or resembling the trade names of others. a. True b. False (a; Moderate; LO4; Use of Information Technology)

26.

Only registered trademarks are protected under the rules outlined in the US Lanham Act. a. True b. False (b; Difficult; LO4)

5

27.

Metatags can be used to protect against one’s own or cyber squat against another’s intellectual property, product, or trade name. a. True b. False (a; Moderate; LO4; Use of Information Technology)

28.

Shrinkwrap, clickwrap, and break-the-seal represent methods of corporate attempts to communicate software licensing obligations to consumers. a. True b. False (a; Difficult; LO4; Communication Abilities)

29.

The mass distribution of unsolicited electronic mail is often referred to as spam. a. True b. False (a; Easy; LO3; Use of Information Technology)

30.

The use of email or websites to impersonate individuals or corporations is known as spidering. a. True b. False (b; Moderate; LO3; Use of Information Technology)

31.

According to the text, privacy issues have been a subject of close international attention. a. True b. False (a; Easy; LO3; Ethical Understanding and Reasoning Abilities)

32.

The Federal Economic Espionage Act of 1996 was enacted, in part, to prevent and prosecute against foreign distribution of corporate trade secrets. a. True b. False (b; Difficult; LO4)

6

Essay Questions 33.

What is the distinction between law and ethics?

▪ Ethics- values and practices of professional and others who have expert knowledge in a specific field ▪ Also general endeavor that reflects concerns and value of society as a whole ▪ Ethics are directed towards individuals or groups ▪ Laws – values of society that are directed to all members of society ▪ Laws are made by governing bodies to cover the whole affected population ▪ Laws are the result of social and political compromise ▪ Are the combination of interests, beliefs and goals (Moderate; LO1; Ethical Understanding and Reasoning Abilities)

34.

What are the arguments for and against self-regulation? Which position holds more validity in your opinion?

▪ Pro: Private sector ability to identify and resolve problems more quickly than laws ▪ Pro: Technological environments are controlled by the marketplace ▪ Con: Incentives for self-regulation are not strong enough to prevent fraud and deception ▪ Con: Self interest and external pressure compromise the private sector and the marketplaces ability to police itself.

(Moderate; LO2; Ethical Understanding and Reasoning Abilities)

35.

The issue of privacy can be broken down into three general areas. Identify and define these areas.

▪ Seclusion Theory – right to be left alone or isolated ▪ Access Control Theory– laws that allow the individual to protect personal material from unauthorized release ▪ Autonomy Theory – freedom for coercive use of personal information and the ability to be alone when an individual wants to remain isolated (Difficult; LO3; Ethical Understanding and Reasoning Abilities)

7

36.

What are the arguments for and against the mass distribution of unsolicited email?

Support one of these viewpoints using evidence from your own use of email.

▪ Pro – In the US the First Amendment to the Constitution, Freedom of Expression ▪ Restrict the ability to do targeted e-mails.

▪ Con – Addresses collected from newsgroup or web bulletin boards. Information given for one use or purpose is used as a means to contact the consumer ▪ Messages sent without return addresses, sender unknown (Easy; LO5; Analytic Skills)

37.

What are some ways for consumers to protect themselves from fraud? Your answer should include a definition of fraud and a specific website useful in protecting consumers.

▪ Fraud – use of deception and false claims to obtain money ▪ Protection includes consumer education ▪ References from professional organizations ▪ Use of intermediaries ▪ Using organizations that belong to anti-fraud groups such as the Better Business Bureau www.bbb.org, or posting reviews online (e.g., yelp.com, citysearch.com) ▪ Using businesses that require licensees to follow strict legal and ethical protocols.

(Difficult; LO5; Reflective Thinking Skills)

38.

What are the norms used by the FTC that represent the minimum requirements essential to the ethical use of consumer information?

▪ Notice- User should be aware of site’s information policy before data are collected ▪ Consent – Users should be allowed to choose to participate or not ▪ Access – Users should have access their data and correct errors.

▪ Security – Policies to ensure the integrity of data and prevention of misuse should be in place ▪ Enforcement – User have means to hold data collectors to their policies (Moderate; LO3; Ethical Understanding and Reasoning Abilities)

39.

What are some examples of trade secrets that could be distributed illegally according to the US Economic Espionage Act of 1996?

▪ Algorithms ▪ Models ▪ Market data ▪ Formulas ▪ Program codes (Easy; LO4)

8

CHAPTER SIX DIGITAL MARKETING RESEARCH Multiple Choice 1.

Knowledge management is the process of managing ________ of information. a. creation b. use c. dissemination d. all of the above (d; Moderate; LO1; Analytic Skills)

2.

A complete marketing knowledge database includes all the data about ________. a. customers b. prospects c. competitors d. all of the above (d; Moderate; LO1; Analytic Skills)

3.

Which of the following is not a part of the marketing information system? a. assessing information needs b. gathering information c. manipulating information to align with the company’s vision d. dissemination information to marketing decision makers (c; Difficult; LO1; Analytic Skills)

4.

Internal records ________. a. focus entirely on customer characteristics and behavior b. are generally under the control of the marketing department c. can provide marketers with information about sales and inventory movements d. are of little importance to marketers (c; Difficult; LO1; Analytic Skills)

5.

Secondary data ________. a. are generally more costly to acquire or generate than primary data b. are always publicly generated and available c. are almost always derived from surveys and focus groups d. can be collected more quickly and less expensively than primary data (d; Moderate; LO1; Analytic Skills)

1

6.

Primary data ________. a. are gathered for the first time to solve a specific problem b. can be collected online using focus groups, observation, interviews and survey research c. are more expensive and time consuming than secondary data collection d. all of the above (d; Moderate; LO1; Analytic Skills)

7.

All of the following are true of data mining except ________. a. It focuses on human-made data rather than nature b. It can utilize cross-sell data c. Its major task is to single out online opinion leaders d. Evolutionary programming is a sophisticated form of data mining (c; Difficult; LO3; Use of Information Technology)

8.

Which of the following is not a disadvantage of online focus groups as compared to traditional focus groups? a. online focus groups can accommodate only 4 to 8 participants b. nonverbal communication is lost c. there is a problem of authenticity d. some participants can be more influenced by opinions of other participants (d; Moderate; LO3; Analytic Skills)

9.

Response rates for email surveys are best when respondents ________. a. are called by a third-party research organization b. use spam filters c. are members of special interest lists d. none of the above (c; Moderate; LO2; Analytic Skills)

10.

________ is/are the biggest disadvantages of online survey research? a. Sample representativeness and measurement validity b. Rising cost of online surveys c. Response time of those who complete questionnaires online d. Data entry errors (a; Difficult; LO3; Analytic Skills)

11.

Which of the following is not of ethical concern regarding survey research on the Internet? a. respondents are increasingly upset at getting unsolicited e-mail for online surveys b. some researchers harvest e-mail addresses from forums without permission c. opt-in communities usually cost the client firms more than traditional methods d. user data is relatively easy and profitable to sell, although many users prefer that it be kept private (c; Difficult; LO3; Analytic Skills)

2

12.

Client-side data collection involves ________. a. collecting data about consumers navigation and click behavior at a website b. collecting information about consumer click behavior from the user’s computer c. using cookies to manage e-commerce tools, such as shopping carts d. all of the above (b; Difficult; LO5; Analytic Skills)

13.

Data warehouses are repositories for ________. a. marketing data b. current customer data c. accounting data d. the entire organization’s historical data (d; Moderate; LO5; Analytic Skills)

14.

Data mining allows marketers to uncover data patterns that can help them ________. a. refine marketing mix strategies b. identify new product opportunities c. predict consumer behavior d. all of the above (d; Easy; LO5; Analytic Skills)

15.

Customer profiling can aid in all of the following except ________. a. increasing direct mailing costs by targeting high-response customers b. selecting target groups for promotional appeals c. understanding the important characteristics of heavy product users d. directing distinctive cross-selling activities to particular customer segments (a; Difficult; LO4; Analytic Skills)

16.

RFM analysis scans the database for all of the following criteria except ________. a. relevancy b. recency c. frequency d. monetary value (a; Easy; LO6; Analytic Skills)

3

17.

________ can perform all data mining, customer profiling, and RFM analysis at any time through access to the data warehouse and distribute results to appropriate staff members. a. IT personnel b. Individual marketing personnel c. Data warehouse consultants d. Transaction processing databases (b; Difficult; LO6; Analytic Skills)

18.

________ are two metrics currently in widespread use for knowledge management? a. Return on Investment (ROI) and Total Quality Management (TQM) b. Return on Assets (ROA) and Total Cost of Ownership (TCO) c. Return on Investment (ROI) and Total Cost of Ownership (TCO) d. Return on Assets (ROA) and Total Quality Management (TQM) (c; Moderate; LO1; Analytic Skills)

19.

The internet is fertile ground for primary data collection because of ________. a. clickstream data collection b. electronic data interchange c. declining cooperation from consumers using traditional approaches d. increasing payments to research subjects (c; Moderate; LO1; Analytic Skills)

20.

Bar code scanners, credit card terminals, and manual computer entry by retail clerks represent various forms of ________. a. virtual space data collection b. real-space primary data collection c. Catalina marketing d. all of the above (b; Moderate; LO5; Analytic Skills)

True/False 21. Information overload is a reality for consumers and marketers alike. a. True b. False (a; Easy; LO1; Analytic Skills) 22. Computers and the internet create knowledge, but people are the enablers of learning. a. True b. False (b; Difficult; LO2; Analytic Skills)

4

23. The internet is a consistent source of high quality, reliable information. a. True b. False (b; Difficult; LO2; Analytic Skills) 24. Experimental research attempts to test cause-and-effect relationships. a. True b. False (a; Easy; LO1; Analytic Skills) 25. In-depth interviews are better conducted in person than over the web. a. True b. False (a; Difficult; LO1; Analytic Skills) 26. Marketers cannot draw a specific probability sample of internet users because a list of all users does not exist. a. True b. False (a; Moderate; LO1; Analytic Skills) 27. Although Really Simple Syndication (RSS) is a powerful information sharing tool, it is limited because users cannot subscribe to it. a. True b. False (b; Difficult; LO4; Use of Information Technology) 28. Data mining involves the extraction of hidden predictive information in large databases through statistical analysis. a. True b. False (a; Easy; LO6; Analytic Skills) 29. Marketing research is relatively inexpensive. a. True b. False (b; Easy; LO1; Analytic Skills)

5

30. It is mandatory that eMarketers know the techniques (e.g., algorithmic objectives) that search engines use to direct users to websites in order to create effective websites. a. True b. False (b; Easy; LO1; Analytic Skills) 31. In judging information quality on the web, eMarketers should not be seduced by good design. a. True b. False (b; Easy; LO2; Analytic Skills) Essay Questions

32. What are the most important inclusions in a marketing knowledge database?

▪ Data about customers ▪ Prospects ▪ Competitors ▪ Analyses and outputs based on the data ▪ Access to marketing experts (Easy; LO1; Analytic Skills) 33. Compare and contrast primary and secondary data.

▪ Secondary Data a. Information not collected to solve a specific problem b. Collected more quickly c. Less expensive d. May not meet the meet the e-marketers needs e. No control on quality of the information f. Can be out dated ▪ Primary Data a. Information collected to solve specific problem b. Time consuming c. More expensive d. Directed to meet the e-marketers needs e. Marketers controls the quality f. Proprietary g. Data is current (Easy; LO1; Analytic Skills)

6

34. What can eMarketers learn about internet users through content analysis?

▪ Consumer characteristics (e.g., Facebook profiles) ▪ Customer preferences (e.g., company and competitor site traffic and Twitter streams) ▪ Brand images (e.g., product review and rating sites and Google group discussions) 35. What are the ethical concerns facing online marketing research and how do they affect data collection?

▪ Unsolicited email requests, which can lead to negative responses ▪ Harvesting of email addresses without permission can lead to negative response or low response rate ▪ Conduct “surveys” for the purpose of building a database for later solicitation. Lead to lower response rates ▪ Issue of privacy of data. Result of lower response rates.

(Moderate; LO2; Analytic Skills) 36. List and define the four types of analysis of data from a data warehouse that eMarketers can use?

▪ Data Mining – extraction of information in databases to find patterns in the data to predict future behavior ▪ Customer Profiling – Uses data warehouse information to help marketers understand characteristics and behavior of specific target markets ▪ RFM Analysis- Reviews database for individual customer information for recency (last purchase; LO1; Analytic Skills), frequency (how often have purchases been made; LO1; Analytic Skills) and monetary (amount of money spent on product purchases; LO1; Analytic Skills) ▪ Report Generation – regular generated reports that marketers specify the information that appears in these reports (Difficult; LO1; Analytic Skills) 37. Identify 3-4 different kinds of primary data collection methods that can be implemented on the Internet.

▪ Online experiments ▪ Online focus groups ▪ Online observation ▪ Online survey research (e-mail or Web) (Easy; LO1; Analytic Skills)

7

CHAPTER SEVEN CONSUMER BEHAVIOR ONLINE Multiple Choice 1.

According to the text, _____ percent of US consumers used the internet in 2012. a. 50 b. 60 c. 88 d. 90 (c; Difficult; LO1; Analytic Skills)

2.

What is the main reason for which consumers do not use the Internet? a. social b. political c. technological d. all of the above (d; Easy; LO2; Analytic Skills)

3.

_____ is a basic marketing concept that refers to the act of obtaining a valued object from someone by offering something in return. a. Commerce b. Barter c. Exchange d. Promotion (c; Difficult; LO2; Analytic Skills)

4.

_____ is the idea that there is infinite information, but the demand for it is limited by human capacity. a. Attention economy b. Bunkering c. Time poverty d. Multiple channel shopping (a; Difficult; LO2; Analytic Skills)

5.

According to the text, some research shows that online shoppers tend to be more _____ oriented than ______ oriented. a. time; experience b. goal; experience c. experience; time d. experience; goal (b; Difficult; LO1; Analytic Skills)

1

6.

Which of the following constitutes the cost of a consumer’s resources for exchange? a. money b. energy c. time d. all of the above (d; Easy; LO2; Analytic Skills)

7.

Because time poverty is a problem for today’s consumers, they want _____. a. bunkering b. appropriate benefits for the time they spend online c. more multimedia on websites d. less expensive dial-up connections (b; Moderate; LO3; Analytic Skills)

8.

Which of the following is not identified as one of the five major activities that consumers do as they spend time online? a. Connect b. Create c. Transform d. Give (c; Moderate; LO2; Analytic Skills)

9.

High bandwidth allows consumers to enjoy which of the following services? a. phone calls delivered over the Internet b. delivery of music and movies over the Web c. real-time virtual reality d. all of the above (d; Easy; LO1; Analytic Skills)

10.

Which of the following strategies have been implemented to deal with a mixed bandwith audience for a website? a. design for the slowest user b. design for the fastest user c. design fast and slow versions of the site d. all of the above (d; Moderate; LO2; Analytic Skills)

11.

One way for marketers to watch the trends of internet users is to _____. a. monitor RSS feeds b. monitor search terms entered at Google, Yahoo!, and other search engines/directories c. measure the use of chat rooms d. all of the above (b; Difficult; LO2; Analytic Skills)

2

12.

DSL technology is a method for _____, a. transmitting wireless data b. providing video on demand c. transmitting data at high speed over phone lines d. connecting high speed cable modems (c; Difficult; LO2; Analytic Skills)

13.

Which of the following is not one of the social/cultural trends that have impacted online exchange? a. Information overload b. Time poverty c. Work at home d. None of the above (d; Easy; LO2; Analytic Skills)

14.

Strategies to deal with users with mixed bandwidths include all the following except _____. a. design for the slowest user b. use text only Websites c. design for the fastest user d. create fast and slow versions of the website (b; Difficult; LO2; Analytic Skills)

15.

_________ is a psychological state consumers experience when they are completely immersed when online and not easily distracted. a. Flow b. Lost c. Internet addiction d. Behavioral targeting (a; Moderate; LO2; Analytic Skills)

True/False 16.

In order for eMarketers to create effective marketing strategies it is important to understand only what motivates consumers to buy in the short run. a. True b. False (b; Moderate; LO4; Analytic Skills)

17.

The Internet has moved from a utility to a novelty. a. True b. False (b; Easy; LO4; Analytic Skills)

3

18.

Most online shoppers have either a price or quality orientation. a. True b. False (b; Difficult; LO3; Analytic Skills)

19.

Consumers apply psychic resources when web pages are difficult to comprehend. a. True b. False (a; Difficult; LO3; Analytic Skills)

20.

Unfortunately, over half of online shopping carts are abandoned. a. True b. False (a; Easy; LO1; Analytic Skills)

21.

Streaming media causes fewer consumers to have access to online entertainment. a. True b. False (b; Difficult; LO1; Analytic Skills)

22.

Few Internet users currently seek information online prior to buying products, although this segment holds huge growth potential. a. True b. False (b; Difficult; LO1; Analytic Skills)

23.

The most dramatic increase in online trade over the past two years has been in travel reservations. a. True b. False (b; Easy; LO1; Analytic Skills)

24.

The “killer app” for the global internet is email. a.

True b.

False (a; Easy; LO2; Analytic Skills)

25.

The “killer app” among all media is television. a. True b. False (a; Easy; LO2; Analytic Skills)

4

26.

Many consumer behavior principles that describe offline buying behavior do not apply to online marketing. a. True b. False (b; Easy; LO2; Analytic Skills)

Essay Questions

27.

What are the main social/cultural trends that have impacted online exchange?

▪ Information Overload – the Internet has brought us more data and information then we can handle. Negative views on spam and advertising on the Web ▪ Time Poverty – Internet users as a rule have less and less time to spend on any activity. We don’t want to waste time on the Internet with slow transaction processing or jumping from page to page to complete a transaction.

▪ Home and Work – the Internet has lowered the barrier between work and home.

We are always connected to our work. More work is done at home and more personal affairs such as shopping and travel arrangements are done at work ▪ Anywhere, Anytime convenience – We want to shop and complete transactions 24/7. We expect all operations on the Internet to be available at our convenience.

▪ Online Oxygen- Some users have become addicted to the Internet.

▪ Self Service- We expect a fairly low level of service on the Internet and in exchange we expect low prices. As consumer we are empowered to get information, purchase and track our purchases.

▪ Sophisticated Consumers – Consumers have control through information and the transparency of pricing.

▪ Privacy and Security – We expect our information to remain private and that there are safeguards for children.

▪ Online Crime – Consumers are concerned about Fraud and viruses on the Internet (Moderate; LO2; Analytic Skills)

28.

What resources must consumers use in exchange for the benefits of the Internet?

▪ Monetary Costs ▪ Time Costs ▪ Energy and Psychic Costs (Easy; LO2; Analytic Skills)

5

29.

What are the individual characteristics that differentiate Internet users from non-users and high users from low users?

▪ Demographics – Age, income, education, ethnicity, gender, and family lifecycle ▪ Positive attitude towards technology ▪ Online skill and experience ▪ Online shoppers more goal oriented than experience oriented (Difficult; LO3; Analytic Skills)

30.

From the individual consumer perspective what two technological developments affect online consumer behavior today?

▪ High speed broadband connections – Broadband users have access to more games, multimedia, video, music ▪ Receiving Appliance Convergence – Internet is available on more then computers (Moderate, LO2; Analytic Skills)

6

CHAPTER EIGHT SEGMENTATION, TARGETING, DIFFERENTIATION, AND POSITIONING STRATEGIES Multiple Choice 1.

________ is the process of aggregating individuals or businesses along similar characteristics that pertain to the use, consumption, or benefits of a product or service. a. Marketing segmentation b. Targeting c. Geodemographics d. Value positioning (a; Difficult; LO2; Analytic Skills)

2.

Marketers commonly base their segmentation of consumer markets on ________. a. demographics b. geographic location c. psychographics d. all of the above (d; Easy; LO3; Analytic Skills)

3.

Which of the following are the top three languages used on most webpages? a. English, Spanish, and German b. English, Chinese, and Spanish, c. English, Spanish, and Japanese d. English, Japanese, and Chinese (b; Difficult; LO3; Analytic Skills)

4.

User psychographics include all of the following except _________. a. personality b. lifestyle c. geographic location d. values (c; Easy; LO3; Analytic Skills)

5.

Marketers using ________ often form groups of consumers based on the outcomes they desire from the product. a. behavioral segmentation b. benefit segmentation c. online selling d. usage segmentation (b; Easy; LO3; Analytic Skills)

1

6.

While marketers will probably use a variety of segmentation methods, _____ is relied upon as the key driver of marketing mix strategy? a. benefits sought b. behavior c. identifying target markets d. product usage (a; Difficult; LO3; Analytic Skills)

7.

All of the following are used as bases for segmenting usage except ________. a. home versus work access b. mobile access c. brand loyalty d. online engagement level (c; Moderate; LO3; Analytic Skills)

8.

According to Forrester Research consumer technographic segments, ________ are technophiles and technology laggards, being least receptive audience for new technologies. a. techno strivers b. sidelined citizens c. fast forwards d. surfers (b; Difficult; LO4; Analytic Skills)

9.

According to Forrester Research’s scheme of technographic segments, which of the following is most likely to be a receptive audience of new technologies. a. fast followers b. sidelined citizens c. cautious onlookers d. handshakers (a; Moderate; LO4; Analytic Skills)

10.

Demographics include all the following except ________. a. ethnicity b. age c. education d. lifestyle (d; Difficult; LO3; Analytic Skills)

2

11.

________ represent an important group for e-marketers to target to develop strong buzz or word of mouth. a. Influentials b. Market Leaders c. Hispanics d. Millennials (a; Moderate; LO5; Analytic Skills)

12.

Social networking pertains to ________. a. specialized chat room for online dating b. expanding the number of one’s business and/or contacts by making connections through individuals online c. form of tying together a number of e-mail accounts d. an internet tool for building databases (b; Difficult; LO2; Analytic Skills)

13.

________ are internal evaluations about people, products, and objects, while ________ refers to what a person physically does. a. Lifestyles; behaviors b. Behaviors; attitudes c. Attitudes; behavior d. Attitudes; lifestyle (c; Moderate; LO3; Analytic Skills)

14.

According to the text, ________ are the most ignored group of technology consumers. a. Mouse Potatoes b. Techno-Strivers c. New Age Nurturers d. Traditionalists (c; Difficult; LO4; Analytic Skills)

15.

________ occurs when a company tailors all or part of the marketing mix to a small group of consumers/users.. a. Undifferentiated marketing b. Micromarketing c. Niche marketing d. Direct marketing (c; Easy; LO2; Analytic Skills)

3

16.

All of the following are criteria for targeting except ________. a. reliability b. accessibility c. profitability d. growth (a; Moderate; LO5; Analytic Skills)

17.

To be an attractive online segment the segment must be all the following except ________. a. be sizable b. hold great potential for profit c. be technically savvy d. have access to the Internet (c; Moderate; LO2; Analytic Skills)

18.

________ is what a company does to the product, as opposed to ________, which is what a company does to the mind. a. Differentiation; Positioning b. Positioning; Differentiation c. Differentiation; Commercialization d. Positioning; Commercialization (a; Moderate; LO6; Analytic Skills)

19.

________ is the process of adding a set of meaningful and valued differences to distinguish the company’s offering from competitors’ offerings. a. Positioning b. Differentiation c. Marketing d. Customization (b; Moderate; LO6; Analytic Skills)

20.

According to the text, market offerings can be differentiated along many dimensions, except ________. a. product b. service c. personnel d. price (c; Difficult; LO6; Analytic Skills)

21.

Which of the following is the biggest problem with price differentiation? a. difficult to market b. lowers value proposition c. easily duplicated d. quality is more important to buyers on the Internet (c; Difficult; LO6; Analytic Skills)

4

True/False 22.

Targeting is the process of selecting the market segments that are most attractive to the firm and selecting an appropriate segment coverage strategy. a. True b. False (a; Easy; LO5; Analytic Skills)

23.

Product distribution is a critical driving force in geographic segmentation. a. True b. False (a; Easy; LO3; Analytic Skills)

24.

Many Asian and Middle Eastern countries have an easier time setting up databases in their local languages than western countries, since their language often require double-byte character sets. a. True b. False (b; Difficult; LO3; Analytic Skills)

25.

Chinese is the second most popular Internet language. a. True b. False (a; Easy; LO3; Analytic Skills)

26.

Most marketers believe that demographics are useful for finding targets for communication but are less than ideal for predicting online purchase behavior. a. True b. False (a; Difficult; LO2; Analytic Skills)

27.

Social networking is based on the idea of six degrees of separation. a. True b. False (a; Easy; LO5; Analytic Skills)

28.

Psychographics include consumer lifecycles, ethnicity, and income. a. True b. False (b; Moderate; LO3; Analytic Skills)

5

29.

Individuals belonging to the Millennials segment number about 60 million and were born between 1979 and 1994. a. True b. False (a; Easy; LO1; Analytic Skills)

30.

In developing countries a greater percentage of companies versus consumers are connected to the internet. a. True b. False (a; Moderate; LO1; Analytic Skills)

31.

C2C is the commonly accepted abbreviation for consumer-to-consumer marketing. a. True b. False (a; Moderate; LO1; Analytic Skills)

32.

B2B is the commonly accepted abbreviation for business-to-business marketing. a. True b. False (a; Moderate; LO1; Analytic Skills)

Essay Questions 33.

Clearly define segmentation and targeting. What are the differences in how these two marketing tools are used and how are they interrelated?

▪ Segmentation – process of aggregating or putting together individuals or organizations along similar characteristics that pertain to the use or benefits of a product or service ▪ Targeting is a subset of segmentation. It is the strategy or process of selecting segments that are most attractive for the organization to market to.

▪ Segments are divide up a population into smaller groups for marketing purposes.

Targeting is choosing which segments are most appropriate for the organization or firm to market to.

(Moderate; LO1; Analytic Skills)

34.

Explain how psychographics can be used to segment markets. What useful information is gathered by focusing on this kind of information?

▪ Segment by personality, values, lifestyle, activities, interests and opinions ▪ Non-product oriented behavioral information including attitudes ▪ Ways that consumers spend their time ▪ Help to define and describe segments ▪ Useful for Web page design (Moderate; LO1; Analytic Skills)

6

35.

What are the ways to target online communities? If you were making a recommendation to the digital marketing officer of Amazon.com which one or ones would you recommend the firm to use?

▪ Build a community at its own website through online chat rooms, discussion groups, bulletin boards, and online events ▪ Advertise or promote on another firm’s community site or within emails to the community ▪ Pose as consumers and post positive response about products or services on another community chat rooms or bulletin boards.

(Difficult; LO1; Analytic Skills)

36.

The text presented Forrester Research’s Consumer Technographics Segments for describing online user segments. Identify 3-4 of these segments and provide a brief description of each.

▪ Fast Forwards are the biggest users of business software.

▪ New Age Nurturers are the most ignored group of technology consumers.

▪ Mouse Potatoes love interactive entertainment on the PC. ▪ Techno- Strivers have the highest proportion of PC ownership.

▪ Digital Hopefuls are a strong potential market for low-cost PCs. ▪ Gadget Grabbers buy low-cost, high-tech toys such as Nintendo.

▪ Handshakers are not into technology for their business dealings.

▪ Traditionalists use VCRs but not anything more.

▪ Media Junkies love TV and are early adopters of satellite television.

▪ Sidelined Citizens are technology laggards.

(Moderate; LO1; Analytic Skills)

37.

Discuss the issues surrounding global Facebook and internet adoption, as well as their implications for eMarketers.

▪ China is the big bang in internet adoption, but is very low with Facebook adoption ▪ Google and Facebook are international but other countries have their own similar search engines and social networks that gain many local adopters ▪ A global eMarketer must study geographic markets carefully before planning internet strategies and tactics (Moderate; LO2; Multicultural and Diversity Understanding)

38.

Find an example of a website that is using integrator positioning to market their products.

Your answer should include a definition of integrator positioning.

▪ Integrator Position is offering an extensive and broad assortment within a product category, within an industry or across many categories ▪ www.bestbuy.com www.walmart.com (Moderate; LO1; Analytic Skills)

7

CHAPTER NINE PRODUCT: THE ONLINE OFFER Multiple Choice 1.

The term “product” may include such items as the following except ________. a. goods b. places c. people d. times (d; Moderate; LO1; Analytic Skills)

2.

Which of the following is not an attribute of value? a. Value is the entire product experience. b. Value is defined wholly by the producer. c. Value is defined wholly by the mental belief and attitudes held by customers. d. Value involves customer expectations. (b; Difficult; LO2; Analytic Skills)

3.

Which of the following is not a desired benefit unique to the Internet? a. effective web navigation b. quick download speeds c. high product quality d. free information or services (c; Difficult; LO1; Analytic Skills)

4.

Both ________ and ________ are forms of customization available online. a. benefit bundling; user personalization b. personalization; service marking c. personalization; bidding d. bidding; trade marking (a; Easy; LO3; Analytic Skills)

5.

Why might successful brick-and-mortar firms want to use different brand names online and offline? a. to avoid harming the brand’s name by associating it with a risky product or channel b. to avoid inadvertently repositioning the offline brand due to a success on the Internet c. to position differently the online and offline brands d. all of the above (d; Moderate; LO3; Analytic Skills)

1

6.

All of the following are attributes of a good brand name except ________. a. the name should suggest something about the product b. the name should differentiate the product from competitors c. the name should be memorable and translate well into other languages d. the name should be long and spelled in a unique way (d; Difficult; LO2; Analytic Skills)

7.

A domain name, or URL, is likely to be made up of ________. a. hypertext protocol b. a second-level domain c. a top-level domain d. all of the above (d; Moderate; LO3; Analytic Skills)

8.

________ is a critical component in the value proposition. a. Customer retention b. Customer support c. Employee loyalty d. All of the above (b; Difficult; LO1; Analytic Skills)

9.

When Chris Anderson wrote his book, The Long Tail, he posted draft copies on his blog and engaged readers, who then posted comments about the book. This was an example of: a. Customer co-design b. crowdsourcing c. idea streaming d. both a and b (d; Moderate; LO3; Analytic Skills)

10.

________ is a reflection of the power shift to buyers from sellers. a. Discontinuous innovation b. Customer co-design c. Internet labeling d. Uniform resource locations (b; Difficult; LO1; Analytic Skills)

11.

All of the following are ways in which marketers can integrate hot product ideas for the internet into current product mixes except ________. a. Introducing discontinuous innovations b. subtracting from existing product lines c. adding new product lines d. repositioning products (b; Difficult; LO3; Analytic Skills)

2

12.

Many companies (producers) benefit from the ideas of their consumers received via all the following except ________. a. blogs b. product reviews c. online monitoring services d. all of the above (d; Difficult; LO3; Analytic Skills)

13.

Software viruses that do not replicate but can damage the computer by opening doors for hackers to enter the computer are known as a ________. a. worm b. Trojan horse c. boot virus d. none of the above (b; Moderate; LO2; Analytic Skills)

14.

Marketers deal with five product decisions that comprise its bundle of benefits for meeting customer needs. Which of the following is among these? a. price b. support services c. quality d. location (b; Difficult; LO1; Analytic Skills)

15.

According to the text, the most important customer benefit that the internet can provide is the capability for ________. a. price transparency b. mass customization c. convenience d. product assortment (b; Difficult; LO1; Analytic Skills)

16.

A trademark can be ________. a. a computer program b. patented c. a symbol or design d. copied by other companies or organizations (c; Difficult; LO2; Analytic Skills)

17.

Brands are promises to customers. Delivering on this promise ________. a. builds trust b. reduces customer stress of making product switching decisions c. lowers risk d. all of the above (d; Moderate; LO2; Analytic Skills)

3

18.

In terms of branding the dot com crash showed ________. a. that traditional brand equity did not carry over to the internet b. that the strength of brick-and-mortar brands carried over to the internet c. that technology was more important than brand equity d. all of the above (b; Moderate; LO2; Analytic Skills)

19.

Good names for a new internet brand should do all of the following except ________. a. differentiate the product from competitors b. translate well into other languages c. be similar to other brand names d. be suitable for legal protection (c; Easy; LO2; Analytic Skills)

True/False 20.

An idea can be marketed as a product. a. True b. False (a; Easy; LO1; Analytic Skills)

21.

Trusted brand names, such as Microsoft and Apple, generate customer trust and add to customer-perceived benefits. Therefore, they can command higher prices from customers. a. True b. False (a, Moderate; LO2; Analytic Skills)

22.

Customers and prospects develop a brand image only through one-way brand contact. a. True b. False (b; Easy; LO2; Analytic Skills)

23.

When purchasing a domain name in the United States companies must try to find and reserve an available second-level domain name, which itself must be followed by a “.com.” a. True b. False (b; Difficult; LO3; Analytic Skills)

4

24.

The power shift to buyers, combined with the internet’s global reach, allows for unprecedented business and consumer collaboration. a. True b. False (a; Easy; LO1; Analytic Skills)

25.

The internet is a great information equalizer, which means less competition, less product imitation, and somewhat longer product life cycles. a. True b. False (b; Difficult; LO1; Analytic Skills)

26.

Return on Investment (ROI) and break-even are important metrics for selling newproduct ideas internally and measuring their success in the market. a. True b. False (a; Moderate; LO3; Analytic Skills)

27.

Toymaker LEGO allows consumers to create and upload their own virtual designs, which can be custom-priced for those who want to order pieces and build the designs at home. a. True b. False (a; Moderate; LO3; Analytic Skills)

28.

Disruptive innovations are new products that failed to perform well in the marketplace. a. True b. False (b; Moderate; LO1; Analytic Skills)

29.

According to the text, product benefits are key components in the value proposition. a. True b. False (a; Easy; LO2; Analytic Skills)

30.

Customer value can be described as attribute costs minus benefits. a. True b. False (b; Easy; LO1; Analytic Skills)

31.

Brand equity refers to the intangible value of a brand. a. True b. False (a; Moderate; LO1; Analytic Skills)

5

32.

The lowest level of brand relationship intensity is advocacy. a. True b. False (b; Moderate; LO2; Analytic Skills)

33.

The highest level of brand relationship intensity is community. a. True b. False (b; Moderate; LO3; Analytic Skills)

Essay Questions 34.

In what ways do customers develop brand images?

▪ From every brand contact ▪ One way contacts – advertising, packaging ▪ Two way contacts – customer service personnel, sales personnel, trade shows, websites or company initiated e-mail.

(Easy; LO2; Analytic Skills)

35.

What reasons are there for existing brick-and-mortar firms to choose a different name for their online offerings than for their offline products? What reasons are there for using the same name?

Choose a different name ▪ Don’t want to jeopardize brand’s good name ▪ Could reposition the offline brand Keep the same name ▪ Leverage off the existing brand ▪ Take advantage of brand equity ▪ Create Synergy between offline and Internet (Moderate; LO3; Analytic Skills)

36.

List and describe the three roles for social media in branding according to Forrester Research, Inc. ▪ Build trust through social media relationships with consumers ▪ Differentiate the brand in social media to enhance the emotional connections ▪ Nurture consumers in social media to build brand loyalty

37.

How can marketers integrate hot product ideas into current product mixes? Your answer should include at least four of the six strategies mentioned in the text.

▪ Discontinuous innovation ▪ New product lines ▪ Additions to existing product lines ▪ Improvements or revisions of existing products ▪ Repositioned products ▪ Me-too lower-cost products (Difficult; LO3; Analytic Skills)

6

38.

The Internet is a great information equalizer. What does that mean for firms involved in eCommerce?

▪ Fierce Competition ▪ Product Imitation ▪ Short product life cycles ▪ Product could become a price-driven commodity (Moderate; LO1; Analytic Skills)

7

CHAPTER TEN PRICE: THE ONLINE VALUE Multiple Choice 1.

Broadly speaking, the definition of price includes all of the following values except ________. a. money b. time c. physical cost d. psychic cost (c; Easy; LO1; Analytic Skills)

2.

________ refers to the idea that both buyers and sellers can view all competitive prices for items sold online. a. Price transparency b. Dynamic pricing c. Online pricing d. None of the above (a; Easy; LO1; Analytic Skills)

3.

The phenomenon that some people may actually pay a higher price for auctioned products than they would pay an online retailer is known as ________. a. seller control b. buyer control c. dynamic pricing d. the winner’s curse (d; Moderate; LO2; Analytic Skills)

4.

________ power is based largely on the huge quantity of information and product availability on the web. a. Buyer b. Seller c. Market d. All of the above (a; Easy; LO2; Analytic Skills)

5.

________ is the most common profit-oriented objective for pricing. a. Competition-based pricing b. Dynamic pricing c. Current profit maximization d. Segmented pricing (c; Difficult; LO3; Analytic Skills)

1

6.

Which of the following attributes of the internet puts upward pressure on prices? a. online customer service b. affiliate programs c. customer acquisition costs d. all of the above (d; Moderate; LO4; Analytic Skills)

7.

Which of the following attributes of the internet puts downward pressure on prices? a. distribution b. price dispersion c. self-service order processing d. all of the above (c; Difficult; LO4; Analytic Skills)

8.

All of the following are types of markets recognized by except ________. a. pure competition b. oligopolistic monopoly c. monopolistic competition d. oligopolistic competition (b; Moderate; LO4; Analytic Skills)

9.

A market is truly efficient when customers have equal access to information about ________. a. products b. prices c. distribution d. all of the above (d; Easy; LO4; Analytic Skills)

10.

________ refers to the variability of purchase behavior with changes in price. a. Price elasticity b. Price transparency c. Dynamic pricing d. Competition-based pricing (a; Moderate; LO1; Analytic Skills)

11.

Which of the following are possible explanations of online price dispersion? a. delivery options b. time-sensitive shopping habits c. switching costs d. all of the above (d; Moderate; LO4; Analytic Skills)

2

12.

In general, marketers can employ which of the following types of pricing strategies both online and offline ________. a. fixed pricing b. auction pricing c. dynamic pricing d. all of the above (d; Easy; LO3; Analytic Skills)

13.

________ and ________ are types of fixed pricing strategies. a. Price leadership; promotional pricing b. Price leadership; negotiation c. Promotional pricing; segmented pricing d. Negotiation; segmented pricing (a; Moderate; LO1; Analytic Skills)

14.

________ pricing uses the internet properties for mass customization, automatically devising pricing based on order size and timing, demand and supply levels, and other preset decision factors. a. Promotional b. Auction c. Segmented d. Negotiated (c; Difficult; LO1; Analytic Skills)

15.

In order to avoid upsetting customers who learn they are getting different prices than their neighbors, eMarketers should use customer-accepted reasons. These reasons may include ________. a. giving discounts to new customers b. giving discounts to loyal customers c. adjusting shipping fees due to outlying locations d. all of the above (d; Moderate; LO3; Analytic Skills)

16.

When using ________ segment pricing, a company may set different prices when selling a product in different states or regions. a. value b. distance c. geographic d. market (c; Easy; LO3; Analytic Skills)

3

17.

________ suggests that 80% of a firm’s business typically comes from the top 20% of customers. a. The Pareto principle b. Customer loyalty c. Value segmenting d. Dynamic pricing (a; Easy; LO3; Analytic Skills)

18.

Which of the following customer group is of least value to a seller? a. A+ b. A c. B d. C (d; Moderate; LO3; Analytic Skills)

19.

Buyer power on the internet is the result of all the following except ________. a. product availability b. product costs c. large amount of information d. willingness of sellers to negotiate (b; Moderate; LO2; Analytic Skills)

20.

Companies select market-oriented pricing on the internet to ________. a. maximize profits b. grow market share c. increase return on investment (ROI) d. all of the above (b; Moderate; LO1; Analytic Skills)

True/False 21.

Today’s buyer must be quite sophisticated to understand even the simple dollar cost of a product. a. True b. False (a; Moderate; LO2; Analytic Skills)

22.

The seller’s perspective on pricing includes both internal and external factors affecting pricing levels. a. True b. False (a; Difficult; LO3; Analytic Skills)

4

23.

The objective of competition-based pricing is to price according to the company’s costs or demand. a. True b. False (b; Moderate; LO1; Analytic Skills)

24.

Price dispersion is the observed spread between the highest and lowest price for a given product. a. True b. False (a; Easy; LO4; Analytic Skills)

25.

The internet is currently an efficient market. a. True b. False (b; Easy; LO4; Analytic Skills)

26.

Menu pricing is the strategy of offering different prices to different customers. a. True b. False (b; Difficult; LO1; Analytic Skills)

27.

In terms of dynamic pricing, negotiation is most often initiated by the seller. a. True b. False (b; Difficult; LO1; Analytic Skills)

28.

With value segment pricing the seller recognizes that not all customers provide equal value to the firm. a. True b. False (a; Moderate; LO3; Analytic Skills)

29.

Giving high-value customers the first shot at discounts will reinforce their loyalty. a. True b. False (a; Easy; LO5; Analytic Skills)

30.

In a “flash sale,” a site member may be eligible to purchase a product at a deep discount for a limited time. a. True b. False (a; Moderate; LO1; Analytic Skills)

5

31.

Online sellers are less willing to negotiate than offline sellers, giving more power to seller. a. True b. False (b; Easy; LO1; Analytic Skills)

32.

A key issue for companies who have an online and an offline presence is how to coordinate pricing between the two channels. a. True b. False (b; Easy; LO5; Analytic Skills)

Essay Questions

33. In the narrowest sense, price is the amount of money charged for a product. However, a much broader definition of price may be more accurate. What factors are accounted for in a broader definition of price? Give real life examples of each.

▪ Price is sum of all values both monetary and non-monetary. It may include factors/values such as money, time, energy, and psychic cost.

▪ Monetary cost - what you pay at the grocery for milk ▪ Time - Buying Airline tickets on the net can take much more time, than dealing with an agent ▪ Energy - Like time finding something on e-Bay can take a lot of energy ▪ Psychic Cos t- Buying clothing on the internet can involve high psychic cost. What looks good in a picture alone, or on a model, may not look or feel good on you.

(Moderate; LO1; Analytic Skills) 34. There are several attributes of the internet that may allow for cost savings online. Define and give examples of at least four.

▪ Convenience- Buy at any time and any place ▪ Speed of the Net- Typical transaction is very quick, once the buyer has made a decision ▪ Self Service – Saves time and money. Customer performs job of sales rep and can access information across the internet ▪ One Stop Shopping – Saves time and convenience.

▪ Integration – Saves time, Web Portals act as malls to pull product assortments together ▪ Automation – Saves energy, keep track of previous purchases, automatic bidding (Difficult; LO5; Analytic Skills)

6

35.

Define and distinguish between the four types of markets recognized by economists.

What kind of market is the internet at this time?

▪ Pure Competition – Many buyers and sellers selling a non-differentiated product like wheat or corn. Since it is a commodity with little product differentiation, marketers spend little time on marketing.

▪ Monopolistic competition – Many buyers and sellers who trade over a range of prices, because sellers can differentiate product and their offers.

▪ Oligopolistic competition – A few sellers who are highly price sensitive to the competition.

▪ Pure Monopoly – One seller with price typically regulated by government ▪ Currently most companies on the internet operate in a monopolistic competition environment.

(Moderate; LO3; Analytic Skills)

36.

What factors might explain the wide price dispersion on the internet? In your opinion, which of these factors has the biggest effect on the spread between online prices?

▪ Branding ▪ Dynamic Pricing of goods online ▪ Delivery options impact pricing ▪ Time Sensitive Buyers ▪ Perceived Product Differentiation ▪ Switching Costs ▪ Shopping Agents ▪ The biggest factor on the internet currently is Branding (Moderate; LO4; Analytic Skills)

37.

What are the three types of pricing strategies marketers can employ both online and offline? Give an example of a website that uses each of these strategies.

▪ Fixed Pricing www.walmart.com ▪ Dynamic Pricing www.priceline.com ▪ Segmented Pricing www.southwest.com (Moderate; LO3; Analytic Skills)

38.

The internet is always considered a low cost option for selling products and services.

From a firm’s perspective what are some factors that add to the expense of doing business on the internet and why?

▪ Online Customer Service – Personnel and training costs.

▪ Distribution – Shipping to individuals, Last mile factor.

▪ Affiliate – Payments of commissions.

▪ Site Development and maintenance – Need a highly developed site to remain competitive and it is usually very expensive.

▪ Customer Acquisition Costs – Getting new customers is an expensive proposition in the online environment.

(Difficult; LO3; Analytic Skills)

7

CHAPTER ELEVEN THE INTERNET FOR DISTRIBUTION Multiple Choice 1.

A distribution channel is composed of all of the following except ________. a. producers b. intermediaries c. marketers d. buyers (c; Moderate; LO1; Analytic Skills)

2.

Which of the following is a channel intermediary? a. wholesaler b. broker c. agent d. all of the above (d; Easy; LO1; Analytic Skills)

3.

A distribution channel in which the manufacturer deals directly with the customer (e.g., sale of digital products) is called a(n) ________. a. indirect channel b. direct channel c. outsourcing channel d. brokered channel (b; Moderate; LO4; Analytic Skills)

4.

________ functions refer to making contact with buyers and using marketing communication strategies to make those buyers aware of products. a. Advertising b. Selling c. Transactional d. One-to-one marketing (c; Difficult; LO1; Analytic Skills)

5.

Regarding mobile commerce, all of the following is true except . a. it is a declining area of eCommerce b. it occurs when consumers make a purchase with a smartphone or other mobile device c. mCommerce is a subset of eCommerce. d. Users can order products from websites (a; Moderate; LO5; Use of Information Technology)

1

6.

Which of the following is true of logistical functions? a. They include physical distribution activities b. They include aggregating products c. They are often outsourced to third-party specialists d. All of the above (d; Moderate; LO1; Analytic Skills)

7.

Which of the following is a possible solution to the “last mile problem”? a. dummy boxes b. the retail aggregator model (shipping product to participating retailers in a network) c. FedEx d. all of the above (b; Moderate; LO1; Analytic Skills)

8.

The benefits of market research include ________. a. it can be helpful in estimating the size of a target market b. it carries no cost when gathered online c. it is always available from outside sources d. all of the above (a; Difficult; LO1; Analytic Skills)

9.

Supply chain management refers to the coordination of flows in three categories: material, information and ________. a. marketing b. distribution c. logistics d. financial (d; Difficult; LO3; Analytic Skills)

10.

________ is the computerized exchange of information between organizations, typically used to reduce or eliminate paperwork. a. Enterprise resource planning (ERP) b. Electronic data interchange (EDI) c. Supply chain management (SCM) d. Secure electronic transfers (b; Difficult; LO1; Analytic Skills)

11.

Electronic data interchange (EDI) is based upon which of the following key variables? a. openness of the system b. transport method c. type of technology used for implementation d. all of the above (d; Moderate; LO1; Analytic Skills)

2

12.

________ save(s) customers money by avoiding the middleman; sometimes it leads to more rapid delivery of the product. a. Infomediaries b. Disintermediation c. Indirect selling d. All of the above (b; Difficult; LO4; Analytic Skills)

13.

________ is an online organization that aggregates and distributes information. A market research firm is one example of such an organization. a. An infomediary b. A disintermediator c. A distribution system d. A brokerage model (a; Difficult; LO1; Analytic Skills)

14.

All of the following are intermediary models in common use on the internet except ________. a. brokerage models b. direct selling models c. agent models d. online retailing (b; Moderate; LO4; Analytic Skills)

15.

A brokerage model’s primary benefit(s) to the buyer is ________. a. convenience b. speed of order execution c. transaction processing d. all of the above (d; Moderate; LO4; Analytic Skills)

16.

An agent that represents a cluster of manufacturers, eTailers, and content providers organized around a life event or major asset purchase is known as a ________. a. metamediary b. manufacturer’s agent c. virtual mall d. all of the above (a; Difficult; LO4; Analytic Skills)

3

17.

________ pool many buyers together to achieve larger volume purchases and drive down the price on selected items. a. Reverse auctions b. Shopping agents c. Buyer cooperatives d. Metamediaries (c; Moderate; LO2; Analytic Skills)

18.

The most effective online marketing communications ________. a. are initiated by pull marketing b. represent a coordinated effort among channel members c. give little attention to differentiated market segments d. all of the above (b; Difficult; LO1; Analytic Skills)

True/False 19.

Brokers usually represent sellers, not buyers, when provide exchange and negotiation services. a. True b. False (b; Moderate; LO4; Analytic Skills)

20.

In general, suppliers operate more efficiently when they produce a low volume of a wide range of products. a. True b. False (b; Moderate; LO1; Analytic Skills)

21.

Both continuous replenishment and build-to-order help to eliminate unnecessary inventory. a. True b. False (a; Easy; LO1; Analytic Skills)

22.

Most eBusiness models are entirely original in terms of traditional existing marketing concepts. a. True b. False (b; Moderate; LO4; Analytic Skills)

4

23.

The content sponsorship model is always used alone in order to create multiple revenue streams. a. True b. False (b; Moderate; LO4; Analytic Skills)

24.

Unlike agents, brokers do represent either the buyer or the seller depending upon who pays the fee. a. True b. False (b; Easy; LO4; Analytic Skills)

25.

In a reverse auction the buyer specifies a price and sellers bid for individual buyers. a. True b. False (a; Easy; LO4; Analytic Skills)

26.

It is critical to understand how eCommerce fits into overall marketing strategy, what the firm expects to accomplish through it, and whether or not is working. a. True b. False (a; Moderate; LO4; Analytic Skills)

27.

Marketing research is not a facilitating function performed by channel intermediaries. a. True b. False (b; Easy; LO1; Analytic Skills)

28.

Financing is not a facilitating function performed by channel intermediaries. a. True b. False (b; Moderate; LO1; Analytic Skills)

29.

Buyer cooperatives are formed to many buyers to help control prices paid on select items. a. True b. False (a; Moderate; LO3; Analytic Skills)

5

Essay Questions 30. In what ways does the internet add value to the marketing communications function? Your answer should include at least three of the four ways listed in the text and give an example for each.

▪ Automate previously manual processes, such as postal mail to e-mail.

▪ Customization of contact towards consumer’s needs ▪ Monitor communications and alter messages immediately.

▪ Software for tracking user’s behavior can be used to direct highly targeted and individual communications.

▪ Enhances promotional coordination among intermediaries.

(Moderate; LO1; Analytic Skills) 31.

How does the content sponsorship model generate revenues for the firm?

▪ Generates revenue by selling advertising to other firms.

▪ Ad space on websites.

▪ Newspapers sell archived articles.

(Easy; LO5; Analytic Skills)

32.

What are the benefits of online auctions for buyers? What are the benefits for sellers? Are there any drawbacks to this model?

▪ Buyers- Good pricing, Thrill of auction, convenience.

▪ Sellers- Move excess inventory, market price for good, large pool of buyers, lowered customer acquisition costs.

▪ Drawbacks for buyers – Time monitoring the auction, get caught up in auction and pay more than retail price.

(Difficult; LO3; Analytic Skills)

33.

Define social commerce and discuss its advantages for eMarketers.

▪ A piece of eCommerce that uses social media and consumer interactions to facilitate online sales.

▪ Demonstrates a move from corporate to user control.

▪ Social media conversations provide great opportunities for building revenue, cutting costs, and increasing customer satisfaction through social commerce.

(Moderate; LO5; Analytic Skills)

6

34.

What is the role of an infomediary in the distribution system? What benefits does a consumer receive from an infomediary? What benefits accrue to an infomediary and an advertiser?

▪ Online organization pulls together and distributes marketplace information.

▪ One form is as a market research firm gathering purchase or other marketing information that they sell to advertisers.

▪ Content sponsorship model, firm pays customer for space on their computer that is resold to advertisers. Customer grants permission to be marketed to.

▪ Consumer benefits – payment from the infomediary, receiving targeted ads.

▪ Infomediary benefits by selling to the advertiser consumer information and a targeted consumer group.

▪ Advertiser benefits- market to a highly targeted audience, with a high propensity to consider their product or service. Also targeted market has given permission to be contacted.

(Difficult; LO4; Analytic Skills)

7

CHAPTER TWELVE DIGITAL MARKETING COMMUNICATION: OWNED MEDIA Multiple Choice 1.

________ is a cross-functional process for planning, executing, and monitoring brand communications designed to profitably acquire, retain, and grow customers. a. Integrated marketing communication (IMC) b. The hierarchy of effects c. Brand advertising d. Wireless advertising (a; Difficult; LO1; Analytic Skills)

2.

The think, feel, do “hierarchy of effects” model does not include ________. a. awareness b. intellect c. desire d. action (b; Difficult; LO1; Analytic Skills)

3.

A major difficulty now facing marketers is ________. a. that consumers now largely prefer online purchases b. dealing with more empowered consumers, who are often irate c. how define marketing in the face of integration efforts. d. how to retain control over brand images in light of the social media (d; Moderate; LO3; Analytic Skills)

4.

________ is nonpersonal communication of information through various media, usually persuasive in nature about products and usually paid for by an identified sponsor. a. Integrated marketing communication (IMC) b. Adware c. Advertising d. Direct marketing (c; Difficult; LO1; Analytic Skills)

5.

What is the key difference between paid media and earned media? a. Paid media is owned by others who are paid by the organization to carry its promotional messages. b. Earned media are when individual conversations become the channel. c. Both a and b. d. There is no difference between the two. (c; Easy; LO4; Use of Information Technology)

1

6.

Which of the following are goals of owned media? a. To engage consumers with positive brand content b. To entice them to pass content along to others c. To exercise CRM d. All of the above (d; Moderate; LO4; Analytic Skills)

7.

When marketers use digital content as inbound marketing that attracts customers and prospects, they are engaging in _________. a. mobile marketing b. content marketing c. CRM d. website chat (b; Difficult; LO5; Analytic Skills)

8.

When companies create online spaces for consumers, prospects and customers to discuss topics of interest, they are creating ________. a. owned media b. paid media c. earned media d. social media (c; Moderate; LO4; Use of Information Technology)

9.

A ________ is a digital media file produced and distributed for playback on a variety of fixed and/or mobile media players. a. meta file b. podcast c. hypertext markup d. widget (b; Moderate; LO1; Analytic Skills)

10.

Which of the following is true of marketing public relations (MPR)? a. It may include third-party media coverage b. It may include paid brand-related activities c. It is meant to positively influence target markets d. All of the above are true (d; Easy; LO2; Analytic Skills)

11.

Online sales promotions can ________. a. build brands b. expand databases c. support increased offline sales d. all of the above (d; Easy; LO2; Analytic Skills) 2

12.

Which is most true of email as a content marketing tool? a. It remains the most important communication technique for building customer relationships. b. Marketers analyze its activity on a database. c. RSS feeds, blogs, and social networking are replacing e-mail. d. Although it is reliable, responses from recipients are delayed. (a; Moderate; LO6; Analytic Skills)

13.

Which of the following is not an advantage of email over direct mail? a. no postage or printing charges b. convenience c. spam d. all of the above are advantages of email (c; Easy; LO4; Analytic Skills)

14.

Promotional offers that are pushed to mobile devices and customized based on the user’s physical location are known as ________. a. location based marketing b. short text messaging c. instant messaging d. viral marketing (a; Easy; LO2; Analytic Skills)

15.

________ is the marketing department’s portion of public relations directed to the firm’s customers and prospects in order to build awareness and positive attitudes about its brands. a. Marketing public relations b. Sales promotion c. Event marketing d. All of the above (a; Moderate; LO2; Analytic Skills)

16.

Astute marketers have found that consumers will readily give personal information to firms that ________. use it to provide value do not share it with others unless given permission share it with others for special consumer promotions both a and b (d; Moderate; LO5; Analytic Skills)

a. b. c. d.

3

17. a. b. c. d.

18.

Online advertisers typically want to know a measure of a website’s ________, which is the number of times an ad would be displayed on a user’s page.

Impressions Hits Efficiencies score matrix (a; Difficult; LO4; Analytic Skills) Which of the following is true of search engine optimization? a. It is losing ground to social media b. It is a complex art and science c. It can involve natural search and paid search d. Both b and c (d; Moderate; LO7; Use of Information Technology)

True/False

19.

The traditional “think, feel, do” hierarchy of effects model guides marketer’s selection and evaluation of marketing communication tools for use on the internet. a. True b. False (a; Easy; LO1; Analytic Skills)

20.

The AIDA model is comprised of four elements, namely awareness, interest, decision, and action. a. True b. False (b; Moderate; LO1; Analytic Skills)

21.

Public relations involves building good relations with the company’s various publics by obtaining favorable publicity and building up a good corporate image. a. True b. False (a; Easy; LO1; Analytic Skills)

22.

The term media formerly meant traditional media, the definition now includes both communications media and social media. a. True b. False (a; Moderate; LO3; Analytic Skills)

4

23.

If you are carrying communication messages from your organization to internet users on channels that are owned by your company, you are utilizing owned media. a. True b. False (a; Moderate; LO4 Analytic Skills)

24.

Location marketing and SMS text are two popular direct marketing techniques for mobile media. a. True b. False (a; Difficult; LO3; Analytic Skills)

25.

Although content marketing is beginning to emerge online, its main strengths are still found in offline vehicles. a. True b. False (b; Difficult; LO5; Analytic Skills)

26.

Research shows that lists with opt-in members get a much lower response than do lists without. a. True b. False (b; Moderate; LO4; Analytic Skills)

27.

Viral marketing can work in reverse. a. True b. False (a; Easy; LO2; Analytic Skills)

28.

All unsolicited email is considered spam. a. True b. False (a; Difficult; LO2; Analytic Skills)

29.

As a marketer, if you wanted to determine the conversion rate to sales at your website, you would utilize earned media metrics. a. True b. False (b; Difficult; LO8; Use of Information Technology)

5

Essay Questions 30.

Discuss the major differences between owned, earned, and paid media.

• Owned media carry communication messages from the organization to internet users on channels that are owned and partially controlled by the company.

•

Paid media are properties owned by others who are paid by the organization to carry its promotional messages (e.g., advertising). The company controls the content.

•

Earned media are when individual conversations become the channel: messages about a company that are generated by social media authors (such as bloggers), traditional journalists on media websites, and by internet users.

(Moderate; LO4; Analytic Skills)

31.

Explain how the AIDA (“think, feel, do”) hierarchy of effects model relates to marketing on the internet.

• E-marketers can understand where consumers, especially their target market are in the purchase cycle.

• Based on where they are in the cycle for the company’s products allows marketers to select appropriate communication objectives.

• Think level want to create awareness • Feel create interest and desire • Do develop communications to close the purchase (Moderate; LO1; Analytic Skills)

32.

Why is it important for marketers to allow users to opt-in to sharing personal information? Why is it preferable to allow customers to opt-in instead of opt-out?

• Higher response rate for opt-in.

• Shifting marketing dollars to consumers for rewards rather than purchasing ad space.

• Opt-in is preferable because the marketer is in effect asking permission and it results in higher response rates.

(Moderate; LO3; Analytic Skills)

33.

What is viral marketing? Give an example of a time when you were a part of viral marketing on the internet.

• Viral marketing is an attempt by marketers to establish word or mouth or buzz about a product or service using internet capabilities such as e-mails to friends and families.

(Moderate; LO1; Analytic Skills)

6

34.

How do eMarketers measure efficiency of marketing campaigns on the internet?

• Cost per Thousand CPM • Impressions • Cost per Action CPA • Click through Rate CTR • Cost per click CPC • Conversion Rate • Cost per Order (CPO) • Customer Acquisition Cost CAC • Cost per message • Opt-out rate • Response time • Site Stickiness (Moderate; LO1; Analytic Skills)

35.

Search engines are a key means of attracting traffic to a website. List and define two tactics used in search engine marketing (SEM).

• Keyword advertising or paid search – buying key search words at search engine site.

• Search Engine Optimization – developing a website so that does well in the search engine rankings (Moderate; LO1; Analytic Skills)

7

CHAPTER THIRTEEN DIGITAL MARKETING COMMUNICAITON: PAID MEDIA Multiple Choice 1.

Regarding paid media, which of the following is most true? a. The term is synonymous with advertising. b. The line between physical and digital platforms is blurring. c. The medium is not the appliance. d. All of the above are true. (d; Moderate; LO1; Analytic Skills)

2.

Which media do global consumers trust the most? a. Earned media, followed by owned media, then paid media b. Paid media, followed by owned media, then earned media c. Owned media, followed by earned media, then paid media d. Consumers trust all media equally (a; Easy; LO1; Analytic Skills)

3.

Examples of paid media online could include all of the following except _______. a. positive blog mentions b. video c. hyperlinks d. an animated car driving through a page (a; Moderate; LO2; Analytic Skills)

4.

Considering rich media ads, what is one downside of highly interactive display ads? a. They do not always fully engage users b. Click-through to the advertiser’s website can be a complex process c. The use d. They require more bandwidth (a; Easy; LO1; Analytic Skills)

5.

Online gaming creates special opportunities for ________. a. classified ads b. contextual advertising c. product placement d. sponsored content (c; Moderate; LO2; Analytic Skills)

1

6.

Which of the following is true regarding advertising on the internet? a. Many of the best ideas have already been developed. b. Anything goes, and novelty gains attention. c. Owned media claims the lion’s share of revenue. d. Consumer trust levels have never been lower. (a; Easy; LO1; Analytic Skills)

7.

Paid social media advertising is used for ________. a. building awareness b. creating positive brand attributes c. collecting valuable customer information d. All of the above. (d; Moderate; LO3; Use of Information Technology)

8.

Social networks contain all of the following unique aspects except ________. a. email records b. personal profile c. data graph d. interpersonal interaction data (a; Difficult; LO3; Analytic Skills)

9.

If an advertiser wants to narrowly target their well defined markets through Facebook, what information do they need? a. Social performance metrics b. Paid media records c. Competitor profiles d. Member profiles (d; Moderate; LO5; Analytic Skills)

10.

Considering social ads, a “social graph” is synonymous with _______. a. business connections b. friend connections c. online popularity d. number of “likes.” (b; Easy; LO4; Analytic Skills)

11.

How does a promoted tweet differ from a promoted trend? a. Promoted tweets are ads that appear as content at the top of a Twitter search page. b. Promoted trends are ads placed on hot topics on Twitter that are presented near a user’s timeline. c. Both a and b. d. There is no difference. (c; Moderate; LO4; Use of Information Technology)

2

12.

The best target audience for LinkedIn advertising is ________. a. widely dispersed millennials b. narrowly targeted business professionals c. Retirees over age 50 d. High-achieving teenagers (b; Easy; LO4; Analytic Skills)

13.

When considering mobile advertising, how do marketers view the mobile phone? a. As marketing’s dilemma to be solved b. As advertising’s wasteland c. As advertising’s promised land d. As marketing’s ultimate search tool (c; Moderate; LO5; Use of Information Technology)

14.

Mobile advertising can be viewed as an evolving area with ______. a. great promise b. many unanswered questions c. Both a and b. d. None of the above. (c; Easy; LO5; Analytic Skills)

15.

How does paid inclusion occur? a. Text or display ads appear on the SERP. b. An organization pays to be included in a searchable directory. c. Sites receive guaranteed indexing in a search engine. d. Google AdWords creates a customized, searchable ad. (c; Difficult; LO5; Use of Information Technology)

16.

When considering which media to buy, marketers consider all of the following except ________ . a. Media investment b. Media characteristics c. Media effectiveness d. Media efficiency (a; Easy; LO7; Analytic Skills)

17.

In making an internet buy, what is the formula for calculating CPM? a. Ad cost multiplied by audience size, divided by 1,000 b. Audience size divided by ad cost, multiplied by 1,000 c. Ad cost divided by audience size, multiplied by 1,000 d. Ad cost multiplied by audience size, multiplied by 1,000 (c; Moderate; LO7; Analytic Skills)

3

18.

________ refers to reaching and gaining the attention of a target market at the lowest cost possible. a. Eliciting b. Effectiveness c. Efficiency d. None of the above (c; Easy; LO5; Analytic Skills)

20.

To measure efficiency before buying advertising space, media buyers sometimes consider a metric known as ________ to determine the most efficient buy. a. SERP b. SEO c. CPM d. AOL (c; Moderate; LO7; Analytic Skills)

True/False 21.

The terms paid media and advertising should not be used interchangeably because they are not the same thing. a. True b. False (b; Easy; LO1; Analytic Skills)

22.

Communications media are tools used for disseminating information, such as online video, email, or newspaper. a. True b. False (a; Easy; LO1; Analytic Skills)

23.

Globally, consumers trust paid media the most, followed by owned media. a. True b. False (b; Moderate; LO1; Analytic Skills)

24.

Considering formats for paid media, it is fair to say that anything goes. a. True b. False (a; Moderate; LO1; Analytic Skills)

4

25.

Sponsored content is now illegal, due to the required separation of editorial and advertising content. a. True b. False (b; Moderate; LO2; Analytic Skills)

26.

Reviewing the statistics for social media advertising, one can conclude that it is a promising and fast-growing media channel. a. True b. False (a; Easy; LO3; Analytic Skills)

27.

Although smartphones and tablets have high penetration, mobile internet usage is unlikely to ever surpass computer usage. a. True b. False (b; moderate; LO5;Use of Information Technology)

28.

Keyword advertising prompts text or display ads to appear on the SERP. a. True b. False (a; Easy; LO5; Use of Internet Technology)

29.

When deciding which media to buy, consumers’ level of trust in each medium is relatively unimportant; it is more about effectiveness. a. True b. False (b; Moderate; LO2; Analytic Skills)

30.

It is possible for an internet buy to be effective, but not efficient. a. True b. False (a; Easy; LO7)

31.

The best paid media performance metrics closely match the campaign’s objectives. a. True b. False (a; Moderate; LO7; Analytic Skills)

32.

When viewed as a direct response medium, display ads are relatively ineffective. c. True d. False (a; Easy; LO7; Analytic Skills)

5

Essay Questions 33.

Describe the history and development of internet advertising.

• Began in the United States with the first series of banner ads on Hotwired.com on October 27, 1994 • Early AT&T ads received an amazing 30 percent click-through rate • U.S. online advertising reached $1 billion in 1998, grew quickly to $8.2 billion in 2000, and continued to grow to $31 billion in 2011. In 2016, that number had climbed to $73 billion.

• Most advertisers realize that the internet is an important medium for reaching their target markets, especially retailers (Moderate; LO1; Use of Information Technology)

34.

Discuss the level of trust consumers place in media, and how that trust helps or hinders eMarketers.

• Globally, consumers trust earned media the most, followed by owned media, and then paid media • The most trusted digital media includes branded websites, opt-in emails, coupons (owned media), and recommendations from like-minded people and social network contacts (earned media) • Several studies place most paid media at the bottom of the trust scale • Even though a majority of consumers love to hate advertising, they usually recognize that someone has to pay for free content in the media (Difficult; LO1; Analytic Skills)

35.

List and describe several paid media formats advertisers can use in a campaign.

• Display ads • Rich media ads • Contextual advertising • E-mail advertising • Text link ads • Sponsored content • Classified ads • Product placement • Paid media on Facebook • LinkedIn advertising • Advertising in Second Life • Paid media in online videos (Moderate; LO2; Use of Information Technology)

6

36.

Describe the differences between paid search, keyword advertising, and paid inclusion.

• Paid search occurs when an advertiser pays a search engine a fee for directory submission, inclusion in a search engine index, or to display its ad when users type in particular keywords • Keyword advertising at search engine sites prompts sponsored text or display ads to appear on the SERP • Paid inclusion occurs when sites receive guaranteed indexing in a search engine (Moderate; LO5; Analytic Skills)

37.

When consider online advertising efficiency, marketers often evaluate vendor options using a metric called cost per thousand (CPM). How is the metric calculated?

• Cost per thousand = (Cost / Audience Size) x 1000.

(Moderate; LO5; Analytic Skills)

38.

How can advertisers know whether they have made an effective advertising buy?

They can utilize the following paid media performance metrics: • Website page views and registrations measure the number viewing the pages and number registering at the site • Click-Through Rate (CTR) measures the number of clicks as percent of total impressions • Volume and origin of site traffic measures the number of visitors coming from different sources, such as Google or referring sites • Lead generation measures the number of people who are potential buyers • New account acquisition or opportunities measures the number of new accounts or likely accounts • Search prominence and site preference measures ranking on search engine results pages based on keyword searches • Incremental sales measures the number of additional sales • Return on investment (ROI) measures tactic profit/investment • Incidence of content downloads measures number of users downloading white papers, and other content • Transactions and/or subscriptions measures number of users purchasing or subscribing • Brand awareness or reputation as measured by survey or blog sentiment analysis • Requests for information measures number requesting • Engagement with Web content utilizes various measures, such as incoming e-mail or content download/upload • Increased knowledge of customers as measured by database information increase • Media impressions measures number of users exposed to a medium where ad or other communication is presented • Redemption rates measures number redeeming coupons or other offers (Moderate; LO5; Analytic Skills)

7

CHAPTER FOURTEEN DIGITAL MARKETING COMMUNICATION: EARNED MEDIA Multiple Choice 1.

Earned media is like ________. a. The ultimate one-way communication b. physical word of mouth on steroids c. a social megaphone d. both b and c (d; Moderate; LO1; Analytic Skills)

2. Consumers at the highest level of engagement online ________. a. collaborate with the company b. are creators of multimedia content c. collect information and tag what they find valuable d. connect with others by creating a social profile (a; Easy; LO1; Analytic Skills) 3. Engagement occurs when internet users do all of the following except ________. a. consume media content b. connect with companies c. contradict negative opinions d. collaborate with brands (c; Moderate; LO1; Analytic Skills) 4. How can companies identify social media influencers? a. Observe and participate in conversations in key social media locations b. Use an independent service to measure relevant variables c. It is not possible to accurately identify social media influencers d. Both a and b. (d; Moderate; LO1; Analytic Skills) 5. Viral marketing is synonymous with all of the following terms except ________. a. uncontrollable popularity b. word of mouth online c. word of mouse d. both b and c (d; Moderate; LO3; Use of Information Technology) 6. One of the most important functions of ratings and reviews is that they ________. a. reveal the real truth about companies and brands b. facilitate commerce, both online and offline c. provide a policing function for poor products and services d. give consumers unbiased advice on purchasing decisions (b; Moderate; LO1; Analytic Skills)

1

7. Of the following statements regarding email, which one is most accurate? a. The “unsubscribe” process is frustrating for consumers. b. It is limited by its one-way nature. c. It is like a social megaphone. d. It is not dead. (d; Moderate; LO3; Use of Information Technology) 8. If you visit an automobile company’s website and click around to change the color of the car or give it leather seats, you are engaging in ________: a. collaborative content creation b. crowdfunding at its best c. altruism toward the company d. an implicit product endorsement (a; Easy; LO1; Analytic Skills) 9. In order to become more engaged with a brand, social media participants want to be ________. a. informed b. entertained c. appreciated d. All of the above (d; Easy; LO1; Analytic Skills) 10. In a survey conducted by Weber Shandwick, researchers discovered that ____ percent of a company’s market value is attributable to reputation. a. 15 b. 32 c. 63 d. 90 (c; Moderate; LO6; Analytic Skills) 11. Photos, video, and music playlists are most representative of the _____ type of social media. a. reviews and opinions b. multimedia sharing c. collaboration d. entertainment (b; Moderate; LO3; Analytic Skills) 12. _____ involves attaching keywords to videos, photos, or text to help users find desired content. a. parking b. tweeting c. bookmarking d. tagging (d; Easy; LO3; Analytic Skills)

2

13. Marketers use social networks by ____. a. creating profiles and pages b. advertising on user pages c. providing applications to network users d. all of the above (d; Easy; LO3; Analytic Skills) 14. Marketers use blogs for a variety of reasons, such as _____. a. to disseminate the views b. gain clients c. direct or draw users to websites d. all of the above (b; Easy; LO5; Reflective Thinking Skills) 15. Many businesses use Twitter as a means to _____. a. talk about what is happening in the company b. encourage feedback from customers c. get ideas from consumers d. all of the above (d; Easy; LO3; Reflective Thinking Skills) 16. Some companies import and embed existing media, such as their own photos or YouTube video, into their blogs using a tool known as a _____. a. bot b. hyperlink c. widget d. none of the above (c; Moderate; LO5; Use of Information Technology) 17. Which of the following steps is an example of an earned media performance metric? a. Number of likes and shares b. Actions taken by users c. Conversations on blogs and elsewhere d. All of the above (d; Difficult; LO7; Reflective Thinking Skills) 18. When companies want to learn about where, how, and how often their brand is mentioned online, they would get the best information by utilizing a tool known as a social _____. a. syndication aggregator b. feed collector c. media dashboard d. brand scanner (c; Difficult; LO7; Use of Information Technology)

3

True/False 19. Earned media can be likened to physical word-of-mouth on steroids. a. True b. False (a; Moderate; LO1; Analytic Skills) 20. These days, traditional media is no longer a useful for prompting consumer engagement with a brand. a. True b. False (b; Difficult; LO1; Analytic Skills) 21. Trust is a key component of word-of-mouth communication resulting from customer engagement. a. True b. False (a; Moderate; LO2; Analytic Skills) 22. With an innovative strategy, it is possible to get the entire internet universe talking about an organization and its products. a. True b. False (b; Difficult; LO3; Reflective Thinking Skills) 23. The team “earned media” came about after the advent of the internet, and refers to social media influencers. a. True b. False (b; Moderate; LO2; Analytic Skills) 24. Most social media, and many websites and mobile apps provide space and tools for earned media content. a. True b. False (a; Moderate; LO3; Use of Information Technology) 25. Despite its functionality, email is now considered dead in the social media world. a. True b. False (b; Moderate; LO3; Analytic Skills) 26. The most engaged consumers can actually help a company improve its products and promotions. c. True d. False (a; Moderate; LO5; Reflective Thinking Skills) 4

27. Like all media, social media focuses on bringing information, photos, video, and other content an audience that wants to be entertained. a. True b. False (a; Easy; LO3; Analytic Skills) 28. According to the text, social media adoption by business is most prevalent with YouTube and Blogs and less so with Twitter and Facebook. a. True b. False (b; Moderate; LO3; Analytic Skills) 29. The reputation of a company or individual executive can be lost in matter of hours online. a. True b. False (a; Easy; LO6; Reflective Thinking Skills) 30. A social dashboard allows a user to click through to other users who have bookmarked the same article to see what else they are reading on the same topic. a. True b. False (b; Easy; LO7; Analytic Skills)

Essays 31. Discuss some of the ways in which earned media can be initiated by a company.

▪ Branded content distribution such as entertaining YouTube videos about the product ▪ Press releases (public relations) ▪ Placing social hooks on company brand and microsites (e.g., Facebook register, subscribe or “like,” RSS, other buttons.

▪ Putting “follow us” links to social sites in e-mail messages sent to customer or prospect databases (Moderate; LO1; Reflective Thinking Skills) 32. Contrast the concept of user engagement in social media with that of traditional media.

▪ Use engagement in social media occurs among and between the company and internet users, who are actively discussing the brand ▪ Traditional media, by contrast, allows only passive exposure, such as when a consumer is watching television ▪ Occasionally, traditional media will prompt engagement when the consumer writes an email to the magazine editor or sends a text to a friend about a television program ▪ Traditional media can also prompt communication to companies about their brands when designed for this purpose, such as awarding a prize to the first 100 people who comment on a company Facebook page or the American Idol voting by text message (Difficult; LO1; Reflective Thinking Skills)

5

33. List and describe two major audiences that a company should engage via earned media. How can these audiences be identified?

▪ Social media influencers. Companies identify them either by observing and participating in conversations in social media locations where people discuss their industries. Companies also find influentials by using a service such as Klout, Inc. (klout.com). Klout measures 35 variables for each of over 80 million social network participants and ranks them based on (1) number of people they reach, (2) how much influence participants have on their followers (e.g., number of “likes” or “retweets”), and (3) how influential the person’s network members are.

▪

Traditional journalists. Today, traditional journalists want to gain quick bits of information and expert quotes on topics they are writing about. Because they want to include images, video, and text information for articles, news releases are beginning to become social media-friendly. For example, a model social media press release created

by Shift Communications, to be used on company Web sites. It includes the important facts and is largely interactive, providing links to company-created multimedia and white papers. This means that company news can move around the internet quickly as these small information bits are shared, leading to more earned media.

(Moderate; LO3; Analytic Skills) 34. What are some techniques for engaging social media users?

▪ Viral marketing ▪ Viral blogging ▪ Multimedia sharing ▪ Wikis ▪ Ratings and reviews ▪ Social recommendations and referrals ▪ Email ▪ Social media site discussions ▪ Community discussion/forums ▪ Widgets and social apps ▪ Location based services (Moderate; LO3; Reflective Thinking Skills) 35. List and describe at least three techniques that companies can use to entice engagement.

▪ Provide high quality, timely, unique, and relevant information ▪ Create entertaining content ▪ Offer competitions ▪ Appeal to altruism ▪ Make an exclusive offer ▪ Reward influential and fans ▪ Incentivize group behavior (Difficult; LO3; Reflective Thinking Skills)

6

36. What are some examples of earned media performance metrics?

▪ Number of likes and shares ▪ Number of ideas uploaded ▪ Share of voice

▪ ▪ ▪ ▪ ▪

Sentiment analysis Number of (user) interactions with advertisement or application Time spent playing game, listening to music, watching video, etc.

Actions taken by users Conversations on blogs and elsewhere (Moderate; LO7; Reflective Thinking Skills)

7

CHAPTER FIFTEEN CUSTOMER RELATIONSHIP MANAGEMENT Multiple Choice 1.

Which of the following represents a major shift in current marketing practice? a. From high fixed costs to low fixed costs b. From mass marketing to individualized marketing c. From focusing on a small base of customers to focusing on acquiring many new customers d. All of the above (b; Difficult; LO1; Analytic Skills)

2.

A firm using relationship marketing focuses on ________. a. market share b. wallet share c. time share d. relationship share (b; Easy; LO1; Analytic Skills)

3.

Companies can use relationship marketing techniques to build relationships with ________. a. customers b. employees c. lateral partners d. all of the above (d; Moderate; LO1; Analytic Skills)

4.

Which of the following is a facet of customer relationship management (CRM)? a. customer service b. sales force automation c. marketing automation d. all of the above (d; Moderate; LO1; Analytic Skills)

5.

Social CRM means that companies must interact with customers ________. a. on the customer’s terms b. based on company data c. based on company strategy d. based on company desires (a; Difficult; LO3; Use of Information Technology)

1

6.

In order to keep customers from viewing their communications as spam, the firm should build relationships by ________. a. offering promotions b. purchasing new consumer lists periodically c. using consumer information to build more precise target profiles d. rewarding customers for giving out their friend’s email addresses (c; Difficult; LO1; Analytic Skills)

7.

Which of the following is referred to as level one of relationship marketing? a. Marketers learn the names and needs of customers b. Marketers create solid solutions to customer problems c. Marketers build a financial bond with customers by using pricing strategies d. Marketers stimulate social interaction with customers (c; Difficult; LO2; Analytic Skills)

8.

Which of the following is an advantage of connecting customers with supply chain businesses? a. all companies will share transaction data so inventories can be kept low b. customer service reps will have up-to-the-minute inventory information and be able to help consumers more immediately c. upstream firms can use data to design products that better meet consumer needs d. all of the above (d; Moderate; LO3; Analytic Skills)

9.

As more companies integrate customer relationship management (CRM) and supply chain management (SCM) activities ________. a. they will experience an increase in variable costs b. they will be slightly less able to learn how to create value throughout the supply chain c. they will become more responsive to individual customer needs d. all of the above (c; Difficult; LO3; Analytic Skills)

10.

If two or more companies were to link their intranet networks for the purpose of sharing information, then they would have a(n) ________. a. supply chain b. extranet c. ethernet d. internet (b; Easy; LO4; Analytic Skills)

2

11.

Companies obtain transactional, behavioral, and interaction data about prospects, business customers, and end customers through ________. a. personal disclosure b. automated tracking of the sales force c. website activity d. all of the above (d; Moderate; LO1; Analytic Skills)

12.

CRM allows companies to leverage their resources by investing more in the ________ customers. a. average b. least profitable c. most lucrative d. none of the above (c; Moderate; LO5; Analytic Skills)

13.

When everyone in the company who touches the customer understands all aspects of the customer’s relationship with the company, this is regarded as ________. a. owning the customer’s total experience b. streamlining business processes that impact the customer c. having a 360-degree view of the customer relationship d. fostering community (c; Difficult; LO3; Analytic Skills)

14.

Important tools that aid firms in customizing products to groups of customers or individuals include ________ strategies that reside on the company’s web and email servers, and ________ strategies that are initiated by internet users. a. push; pull b. pull; push c. marketing; brochureware d. marketing; inquiry (a; Moderate; LO4; Analytic Skills)

15.

Using _________ firms can develop customized web pages based on visitor behavior. a. web log analysis b. ongoing email c. client-side tools d. agents (a; Difficult; LO4; Analytic Skills)

3

16.

________ allows marketers to monitor users’ online behavior and make instantaneous and/or automatic adjustments to online promotional offers and web content. a. Collaborative filtering b. Real-time profiling c. An agent d. Email communication (b; Difficult; LO4; Analytic Skills)

17.

Through real-time chat, forums, and email postings at its website, companies are able to ________. a. aggregate data used to design marketing mixes that meet user needs b. build community c. learn about products d. all of the above (d; Moderate; LO4; Analytic Skills)

18.

Software agents such as shopping agents and search engines ________. a. scour the internet for terms matching the users’ search criteria b. use web portals to access partner information c. are forms of experiential marketing d. match user input to databases and return customized information (d; Difficult; LO4; Analytic Skills)

19.

Individualized web portals are most often used to build relationships in the ________. a. B2C market b. B2B market c. B2G market d. G2C market (b; Difficult; LO1; Analytic Skills)

20.

All of the following are metrics used to assess the internet’s value in delivering CRM except ________. a. lifetime value (LTV) b. cost savings c. employee satisfaction d. customer satisfaction (c; Difficult; LO5; Analytic Skills)

4

True/False 21. Most businesses spend more money acquiring new customers than they spend keeping current customers. a. True b. False (a; Easy; LO1; Analytic Skills) 22. Customer service occurs only post-purchase when customers have questions or complaints. a. True b. False (b; Easy; LO1; Analytic Skills) 23. Most customers would prefer to be brand disloyal in favor of finding the lowest price for each purchase, so marketers must entice them into loyalty through special offers. a. True b. False (b; Difficult; LO1; Analytic Skills) 24. One important tenet of CRM is that it is better to attract, retain, and grow customers than to focus only on customer acquisition. a. True b. False (a; Moderate; LO1; Analytic Skills) 25. Social CRM does not retain any of the tenets of CRM 1.0. a. True b. False (b; Difficult; LO3; Analytic Skills) 26. Permission marketing dictates that customers will be pleased to receive email for which they have opted in. a. True b. False (a; Moderate; LO4; Analytic Skills) 27. Lively and useful chat and forums increase repeat site visits and stickiness. a. True b. False (a; Easy; LO4; Analytic Skills)

5

28. Post – transaction customer service is an important part of the customer care life cycle. a. True b. False (a; Easy; LO5; Analytic Skills) 29. No matter how good a company may be at retaining customers, new customer acquisition is still an important activity. a. True b. False (a; Moderate; LO5; Analytic Skills) 30. Personalization involves ways that marketers individualize in an impersonal, computer networked environment. a. True b. False (a; Easy; LO4; Analytic Skills) 31.

Unlike SCM, CRM activities usually refer to back-end operations. a. True b. False (b; Moderate; LO1; Analytic Skills)

Essay Questions

32.

Why are the three pillars of relationship management?

▪ Customer relationship management (CRM) ▪ Customer experience management (CEM) ▪ Customer collaboration management (CCM) (Easy; LO2; Analytic Skills)

6

33.

Why is it important to implement CRM effectively and efficiently? In what ways can a firm ensure that their use of CRM is both effective and efficient?

▪ Many companies that invest in CRM software lose money on the investment.

▪ Companies need to focus on CRM applications to ensure effectiveness and efficiency ▪ Vision of CRM that fits with the company culture, is bought into by management, and fits with the firm’s brands and value propositions.

▪ CRM Strategy ▪ CEM – Valued Customer experience ▪ CCM – Organization-and-Customer Collaboration ▪ CRM Processes ▪ CRM Information ▪ CRM Technology ▪ CRM Metrics (Difficult; LO2; Analytic Skills)

34.

Discuss the major principles behind Social CRM (CRM 2.0) and contrast it with CRM 1.0.

▪ Social CRM (CRM 2.0) retains all the tenets of CRM 1.0. However, it adds social media technology and customer collaborative conversations to the process.

▪ Social CRM means that companies must interact with customers on their terms, and not based solely on the company’s data, strategy and desire.

▪ Social CRM extends CRM 1.0, but does not replace it; in CRM 1.0, customers would forward e-mails to friends or talk in business meetings about products.

▪ Social CRM added more conversation among customers due to social media and gave companies many additional media for building long-term customer relationships and sales.

(Difficult; LO3; Use of Information Technology)

35.

What is the difference between push strategies and pull strategies used by firms that customize products to customers? Your answer should include an example of each.

▪ Push strategies are marketing efforts initiated by (internet) companies. The firms are “pushing” customized information down the channel to customers.

▪ Pull strategies are customer-initiated requests to retailers which ultimately get passed onto producers that make the branded products purchased by customers.

(Moderate; LO4; Analytic Skills)

36.

The text notes that relationship marketing is practiced on three levels. Describe each of the three levels from the lowest to the highest.

▪ Level one is financial. Differentiation is based on pricing ▪ Level two is stimulating social interaction – ongoing personal communication or community building and aggressive pricing.

▪ Level three is creating and selling a structural solution to customer problems. At this point the customer is buying a solution or benefit from the firm, which results in strong bonds between customer(s) and the firm that serves them.

(Moderate; LO2; Analytic Skills)

7

37.

Explain what is meant by CRM – SCM Integration. What are the advantages of this integration for internet companies?

▪ CRM – customer relationship management, which is the “front-end” connection between the customer and the firm. It includes all touch points with the customer, marketing efforts, customer service ▪ SCM – Supply Chain Management, which is the back-end connection between the firm and its suppliers.

▪ Integration ties the customer to suppliers.

▪ Advantages for internet companies include lower levels of inventory needed on hand, firms use the data to design products that better meet customer needs, and customer service representatives have current information to better serve customers.

▪ Firms become more responsive to individual customer needs.

(Moderate; LO1; Analytic Skills)

38.

Give an example of a time when you experienced some aspect of CRM via the internet.

Did this experience represent a CRM success or failure in your mind? Why? ▪ www.amazon.com suggesting products based on previous orders is a success in CRM on the internet. They personalize/customize automatically the web site based on a customer buying patterns, live or past browsing patterns, and/or projected preferences based on similar customers’ past purchases.

(Moderate; LO2; Analytic Skills)

8