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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 e-commerce
b. it occurs when consumers make a purchase with a smartphone or other mobile device
c. m-commerce is a subset of e-commerce.
d. Users can order products from websites
(a; Moderate; LO5; Use of Information Technology)
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)
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, e-tailers, 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)
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
21. Brokers usually represent sellers, not buyers, when provide exchange and negotiation services.
a. True
b. False
(b; Moderate; LO4; Analytic Skills)
22. 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)
23. Both continuous replenishment and build-to-order help to eliminate unnecessary inventory.
a. True
b. False
(a; Easy; LO1; Analytic Skills)
24. Most e-business models are entirely original in terms of traditional existing marketing concepts.
a. True
b. False
(b; Moderate; LO4; Analytic Skills)
25. The content sponsorship model is always used alone in order to create multiple revenue streams.
a. True
b. False
(b; Moderate; LO4; Analytic Skills)
26. 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)
27. In a reverse auction the buyer specifies a price and sellers bid for individual buyers.
a. True
b. False
(a; Easy; LO4; Analytic Skills)
28. It is critical to understand how e-commerce 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)
31. Marketing research is not a facilitating function performed by channel intermediaries.
a. True
b. False
(b; Easy; LO1; Analytic Skills)
32. Financing is not a facilitating function performed by channel intermediaries.
a. True
b. False
(b; Moderate; LO1; Analytic Skills)
33. Buyer cooperatives are formed to many buyers to help control prices paid on select items.
a. True
b. False
(a; Moderate; LO3; Analytic Skills)
Essay Questions
34. 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)
35. 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)
36. 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)
37. Define social commerce and discuss its advantages for e-marketers.
§ A piece of e-commerce 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)
38. 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)
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