MGMT 3850 CHAPTER 9 HOMEWORK QUESTION AND ANSWERS

MGMT 3850 CHAPTER 9 HOMEWORK QUESTION AND ANSWERS Essentials of Entrepreneurship & Small Business Mgmt., 7e (Scarborough) Chapter 9 E-Commerce and the Entrepreneur 1) One of the most valuable attributes of the Web is the ability to: A) provide companies with instantaneous customer feedback. B) enable the site to create an appearance that the organization is able to meet customer needs that, in fact, are not possible based on its actual resources. C) eliminate advertising expenses and the amount of printed materials needed to facilitate promotional efforts. D) encourage the use of credit cards as a means of paying for the online transaction. Answer: A Diff: 2 Page Ref: 316 AACSB: Use of IT Learning Obj.: 1 2) Experts estimate that nearly of the world's online population has used the Internet to make a purchase. A) 46 percent B) 66 percent C) 84 percent D) 96 percent Answer: C Diff: 2 Page Ref: 317 AACSB: Use of IT Learning Obj.: 1 3) A study by the Pew Internet and American Life Project reports that percent of Americans research products and services online before buying them, an increase of percent in the year 2000. A) 40; 15 B) 40; 35 C) 60 ;15 D) 60; 35 Answer: D Diff: 3 Page Ref: 316 AACSB: Analytic Skills Learning Obj.: 1 4) An estimated percent of small business owners in the U.S. have Web sites. A) 25 percent B) 64 percent C) 75 percent D) 85 percent Answer: B Diff: 3 Page Ref: 317 AACSB: Use of IT Learning Obj.: 1 5) The Internet penetration rate is greatest in North America with 78.3% and the second region of the world in penetration is: A) Oceania/Australia. B) Europe. C) Latin America/Caribbean. D) Middle East. Answer: A Diff: 3 Page Ref: 318, Table 9.2 AACSB: Analytic Skills Learning Obj.: 1 6) Which of the following is an important issue that business owners should consider before launching an e-commerce effort? A) How to develop long-term relationships with customers B) How to exploit the interconnectivity and the opportunities it creates to transform relationships with its suppliers, customers, and external stakeholders C) How to measure the success of its Web-based sales effort D) All of the above Answer: D Diff: 1 Page Ref: 317-319 AACSB: Analytic Skills Learning Obj.: 1 7) All of the following represent benefits of selling on the Web except: A) opportunity to increase revenues. B) power to educate and inform. C) ability to remain open 24 hours a day. D) ability to advertise in a cheaper media form. Answer: D Diff: 2 Page Ref: 318 AACSB: Reflective Thinking Learning Obj.: 1 8) To avoid unpleasant surprises in launching an e-commerce effort an entrepreneur should: A) test the Web site with real customers to make sure it is easy to navigate. B) avoid being talked into establishing a privacy policy. C) cancel all current advertisements in other media. D) not try to out-guess customers, and handle order fulfillment as orders come in. Answer: A Diff: 2 Page Ref: 346 AACSB: Use of IT Learning Obj.: 4 9) The Web is one of the most efficient ways of reaching both new and existing customers and when properly promoted, a Web site can: A) reduce a company's cost of generating sales leads. B) be an affordable way to reach customers beyond your geographic area. C) provide an efficient method to provide information about a company and their products. D) All of the above Answer: D Diff: 1 Page Ref: 333, Table 9.1 AACSB: Reflective Thinking Learning Obj.: 3 10) Entrepreneurs should make sure they do not fall victim to any of the e-commerce myths. Which of the following is not an e-commerce myth? A) Setting up a business on the Web is easy and inexpensive. B) If I launch a site, customers will flock to it. C) Making money on the Web is easy. D) Privacy and site security is an important issue on the Web. Answer: D Diff: 1 Page Ref: 318-328 AACSB: Analytic Skills Learning Obj.: 2 11) To be successful online, small companies must create Web sites with features that appeal to experienced Web shoppers, such as: A) simple navigation and customer reviews. B) solid security and quick access to product information. C) videos and blogs. D) The successful Web site will include all the above. Answer: D Diff: 2 Page Ref: 319, Myth 1 AACSB: Use of IT Learning Obj.: 2 12) The intentional and targeted promotion of a Web site is: A) critical to online success. B) optional because once you are on the Web, you will get traffic and sales. C) a luxury that most small businesses can not afford. D) contrary to current Web trends. Answer: A Diff: 2 Page Ref: 321, Myth 2 AACSB: Use of IT Learning Obj.: 2 13) Successful e-tailers have discovered that these factors enhance their reputations for online customer service: A) comprehensive FAQ pages and e-mail order confirmation with shipment notices. B) visible telephone and e-mail contact information. C) quick responses to questions with meaningful information. D) All of these factors enhance a Web-based reputation. Answer: D Diff: 2 Page Ref: 322, Myth 3 AACSB: Use of IT Learning Obj.: 2 14) monitor customers' behavior while they are on a site, giving Web-based businesses the information they need to make their Web sites and their online efforts more effective. A) Wikis; social marketing B) Tracking tools; marketing C) Tracking tools; security D) Tracking tools; listings Answer: B Diff: 2 Page Ref: 324, Myth 4 AACSB: Use of IT Learning Obj.: 2 15) An important part of any e-commerce effort is: A) the use of current technology and its successful implementation. B) the ability to understand the underlying business and to develop a workable business model. C) to have a site that is fast and dependable. D) to have high traffic to the site, regardless of the customers' interest in what the site actually offers. Answer: B Diff: 2 Page Ref: 324, Myth 5 AACSB: Analytic Skills Learning Obj.: 2 16) Before a Web site can become the foundation for a successful e-business: A) the technology must be right. B) it should be previewed by a Web designer. C) it must be created with the target audience in mind. D) the physical storefront must be established. Answer: C Diff: 2 Page Ref: 325, Myth 5 AACSB: Analytic Skills Learning Obj.: 2 17) Building a Web strategy based on a clear definition of the company's target audience and an understanding of those customers' needs, wants, likes, and dislikes is: A) relatively unimportant for a company's Web site due to its flexibility. B) something that the entrepreneur no longer has to focus on to realize success. C) also critically important for a company's presence on the Web. D) an exercise that should eventually be addressed after the site is launched. Answer: C Diff: 2 Page Ref: 324, Myth 5 AACSB: Analytic Skills Learning Obj.: 2 18) The entrepreneurs who are proving to be the most successful in e-commerce are those who know how: A) their industries work, inside and out. B) technology works, inside and out. C) to turn a profit. D) to effectively finance their e-commerce effort. Answer: A Diff: 2 Page Ref: 325, Myth 6 AACSB: Use of IT Learning Obj.: 2 19) The most common reasons for leaving a site without purchasing include which of the following? A) Shipping charges were too high. B) Site did not look trustworthy. C) Customers could not find the items they were looking for. D) All of the above Answer: D Diff: 1 Page Ref: 326, Myth 7 AACSB: Use of IT Learning Obj.: 2 20) Which of the following is not a common reason customers leave Web sites before checking out? A) Total shipping charges were too high. B) The privacy policy was not posted. C) The shopping cart was too hard to find. D) The site did not appear trustworthy. Answer: B Diff: 2 Page Ref: 326, Myth 7 AACSB: Use of IT Learning Obj.: 2