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2008 DECA Ontario ProvincialsTest 947 E-COMMERCE TEAM DECISION 1

EMDM

1. A online business that is owned and managed by one person is called aA. corporation. C. partnership.B. sole proprietorship. D. cooperative.

2. Which of the following would most likely be protected under the Anticybersquatting Consumer Protection Act:A. annual-report.doc C. www.ont.jpgB. [email protected] D. www.pepsico.com

3. In order to purchase on a timely basis, in small quantities, and on credit, some e-tailers buy goods fromA. requisition delegates. C. wholesalers. B. appraisers. D. order selectors.

4. Technology has helped improve the distribution process by utilizing __________ among channel members.A. integrated information sharing C. automated scheduling B. electronic receiving D. audiovisual programming

5. A channel member that knowingly markets a defective product that is determined to be harmful to the environment and then denies responsibility for its actions is taking a(n) _________ approach to social and ethical responsibility.

A. obstructive C. proactiveB. accommodating D. defensive

6. One reason a channel of distribution that has strong leadership is often able to avoid conflict within the channel is because the leader has the

A. ability to provide training. C. authority to demand cooperation. B. personality to develop friendships. D. capacity to regulate change.

7. An e-tailer that owns its suppliers is using which of the following strategies to control the channels of distribution:A. Indirect distribution C. Forward integration B. Multichannel distribution D. Backward integration

8. Once you know your group's purpose, what should you do next?A. Find out what people know about the subject. C. Volunteer a new idea. B. Agree on ground rules. D. Contribute in a useful way.

9. Which of the following is a guideline for an e-tailer's employees to use in communicating with coworkers:A. Use a direct approach in speaking to an angry coworkerB. Feel free to express their complaints about their jobsC. Be sure to share rumors and gossip with their coworkers D. Think about what they want to say before they say it

10. What is a good technique for an online business's supervisor to use in order to conduct an effective staff meeting?A. Limiting discussion C. Preparing an agendaB. Developing audiovisuals D. Providing notebooks

11. One reason management often works to improve relations between employees and customers is because good relations often create

A. reliable service. C. employee teamwork.B. loyal customers. D. positive comments.

12. Before an e-business can implement an online system to process orders, it must firstA. build customized platforms for each company division and then develop a networked system.B. determine each step in the ordering process and how it relates to each area of the company.C. design a specific program platform and computer database program for inventory control.D. research and solicit outside companies to bid on developing a customized information system.


13. From which of the following forms would an online business obtain the cost of goods that are being returned to the vendor:

A. Invoice B. Freight bill C. Delivery receipt D. Bill of lading

14. Employees may allow vendor-caused inventory shrinkage to occur byA. counting the items the vendor delivers. C. checking vendors' unloaded boxes.B. matching the item count to the invoice. D. signing an invoice that has blank spaces.

15. What is the most important economic resource?A. Equipment B. Minerals C. Energy D. People

16. Which of the following is an example of excess supply:A. Price = $700, demand = 300, supply = 500 C. Price = $600, demand = 400, supply = 400B. Price = $500, demand = 500, supply = 300 D. Price = $400, demand = 600, supply = 200

17. Human resources management is demonstrated in which of the following statements:A. The e-business gives its preferred customers a special discount. B. The e-business takes care of the responsibilities associated with having employees. C. The e-business includes top-level managers in long-term planning. D. The e-business acts on new information about a competitor.

18. Which of the following statements is true of a business risk that is categorized as a "pure" risk:A. There is no way to protect the online business from these risks. B. The online business will gain as a result of these risks. C. These risks are similar to the risk of purchasing stock.D. Insurance may be purchased to cover these risks.

19. The type of work you do in order to earn a living is job specialization byA. trade or profession. C. stage of production.B. geographic region. D. job task.

20. Why might Internet businesses decide to hold on to products to sell later when the economy is experiencing high levels of inflation?

A. Taxes will limit production. C. Cash will be in short supply. B. Prices will continue to rise. D. Income will remain constant.

21. Which of the following government policies is intended to benefit online businesses operating within the country by controlling international trade:

A. Limitations on exports C. Membership in GATT B. Protectionism D. Promotion of tourism

22. Which of the following is a characteristic of online business environments:A. Manages a large work force C. Operates on a limited basis B. Competes on an economic level D. Protects information from theft

23. What is the impact of e-commerce on productivity?A. Analysts are still trying to decide how e-commerce and productivity are related.B. Workers are more productive when they can communicate and access information quickly.C. Customers are so distracted by Internet sites that their productivity has suffered. D. Productivity has fallen, but these same workers purchase more on the Internet.

24. The question, “Who is experiencing the conflict?” can provide insight about theA. type of disagreement that is occurring. C. other person's personality. B. core issue surrounding the disagreement. D. importance of the relationship.


25. The only way that an e-tailer's work team can carry out its assignment in a satisfactory manner is when the team members

A. are appointed by management. C. all have the same opinions.B. cooperate with each other. D. are dominated by the leader.

26. Jeremy, an employee with InfoTech.com, is resisting some new circumstances. What can he do to increase his adaptability?

A. Increase his level of fear C. Lower his expectations B. Examine his attitude D. Ignore the situation

27. Workers who like to set their own goals, exercise their creativity, and be free of control by a supervisor would be most comfortable working for a(n) __________ leader.

A. republican B. laissez-faire C. authoritarian D. democratic

28. Which of the following financial tools shows an estimate of the start-up costs for a new Internet-based business and the sources of those funds:

A. Balance sheet C. Statement of financial requirements B. Break-even analysis D. Cash-flow analysis

29. Benny's Bike Shop manufactures bicycles and sells them to its customers from its web site during the year. Benny's purchases sprockets from Spikes Sprockets, tires from Tiny's Tires, and frames from Freddie's Frames. The expense of purchasing these items is known as

A. cost of goods sold. C. revenue.B. operating expenses. D. gross profit.

30. Which of the following would be categorized as expenses in an e-business's operating budget:A. Training and sales C. Assets and salaries B. Sales and assets D. Salaries and training

31. As an Internet-based business owner, you are trying to decide whether to expand. Cost/benefit analysis would tell you to expand

A. when you can see a break-even point within five years time. B. only when additional benefits are twice as much as additional costs. C. as long as additional benefits match additional costs. D. as long as additional benefits exceed additional costs.

32. What is an e-tailer's return on investment if it has total sales and revenue of $450,000 and total costs and expenses of $325,000?

A. 30% B. 33% C. 35% D. 38%

33. Which of the following is an example of a cost that is often unique to e-commerce:A. Purchasing computers C. Developing softwareB. Creating web sites D. Paying data processors

34. Which of the following is usually the most objective measure for predicting job success:A. Résumés B. Interviews C. Pre-employment tests D. Application blanks

35. An example of a company change that might create a need for an e-business's employees to have additional training and development opportunities is

A. providing employees with a payroll savings plan.B. installing a new computer network and additional software. C. adding a canopy and carpet to the building's entrance.D. offering dental insurance for employees and their families.

36. Which of the following is an action management can take to demonstrate a strong commitment to equity:A. Posting equity information for staff to read C. Attending diversity workshops/training sessionsB. Reading articles about workplace equity D. Talking about equity in staff meetings


37. One of the benefits of a marketing-information management system is that it provides e-tailers withA. a broad view of customers' changing buying patterns. C. up-to-date financial statements about competitors.B. enhanced accounting and payroll procedures. D. greater control of the product life cycle.

38. Which of the following is an overall reason that marketing research is important to Internet businesses:A. It makes competitors take notice of the business. C. It contributes to business success. B. It improves financial management. D. It helps the business to base decisions on opinions.

39. One reason Internet businesses often avoid using open-ended questions as a method of obtaining results from a marketing survey is because the results may be difficult to

A. distribute to management. C. enter into a database. B. store for future use. D. code for evaluation.

40. What is an advantage to e-businesses of using the Internet to search for marketing information?A. Personal selling ability C. Around-the-clock accessibility B. Product storage capability D. Word-processing flexibility

41. What happens when information collected about web-site visitors is combined with that obtained through other means?A. Privacy becomes less of an issue. C. Customer profiles can be developed.B. The data needs to be analyzed by hand. D. The data becomes less useful.

42. Which of the following marketing functions is most likely to affect the image of an e-tailer:A. Product/Service management C. FinancingB. Risk management D. Selling

43. How does having too much merchandise in inventory affect e-tailers?A. They will limit the opportunities for manufacturers to interact with the e-tailer. B. They will automatically need to reduce the price of the merchandise and lose money.C. They will create a consumer attitude that the merchandise is less valuable than it really is.D. They will have excess merchandise to store that will tie up valuable cash.

44. Each marketing activity can fit into one of the 4 Ps of marketing, which means that the marketing mix provides a framework for the e-business's

A. marketing planning. C. personnel selection.B. behavior modeling. D. performance evaluations.

45. An online business that includes target marketing in its business activities is trying toA. determine how many people have heard of the online business. B. forecast how much profit the online business can make. C. keep its operating expenses within the budget.D. find out whether there is a market for its products.

46. A start-up e-business is most likely to enter which of the following target markets:A. All of the potential target markets the business might have in the futureB. The market with the most direct competitorsC. The international market in undeveloped countries D. The target market that most closely matches its customer profile

47. Marketing planning involves developing objectives and is the basis for developing marketingA. functions. B. strategies. C. elements. D. concepts.

48. What is one reason why many Internet-based businesses are engaging in environmental monitoring?A. To segment target markets C. To identify emerging trends B. To develop recyclable products D. To analyze ethical issues

49. Which of the following questions is appropriate for determining threats:A. What are our assets? C. What niches have our competitors missed?B. What obstacles do we face? D. What new needs of customers can we meet?


50. Which of the following is a marketing activity that online businesses consider when conducting a competitive analysis:A. Purchasing B. Risk management C. Promotion D. Management research

51. Which of the following statements about sales-forecasting methods is true:A. Quantitative methods cost less than qualitative methods.B. Reading industry forecasts is a qualitative method. C. Qualitative methods are based on numerical facts.D. Seeking opinions of experts is a qualitative method.

52. In which of the following situations should an e-tailer consider its competitors' prices when developing a marketing plan:A. Analyzing a new database C. Selecting a new supplierB. Organizing a new division D. Introducing a new product

53. What is your primary source of marketing-research information once you have started your owne-business?

A. Online surveys B. Current customers C. Employees D. Accounting records

54. When conducting a marketing audit, it is important to assess an Internet-based business's marketing objectives, strategies, activities, and

A. personal incentives. C. human resources. B. credit standing. D. fixed assets.

55. Digital certificates are a type of electronicA. file transfer. B. virus protection. C. signature. D. presentation.

56. Which of the following should businesses take into consideration when creating an online shopping cart:A. Advertising strategies C. Inventory levels B. Check-out procedures D. Web-site connections

57. What Windows shortcut will result when "Ctrl" and "V" are held down on the computer keyboard at the same time?A. The selection will be copied onto the clipboard.B. The selection will be moved onto the clipboard. C. The clipboard contents will be pasted at the insertion point.D. The last change will be reversed.

58. An important consideration for a business when selecting a web host is finding out if the business will haveA. time to make design changes. C. access to the server logs. B. control of the search engine. D. responsibility for copywriting.

59. How has the Internet helped businesses increase the efficiency of their purchasing efforts?A. The Internet reduces most of the channel conflict that often occurs in the distribution process.B. Most e-businesses are now using single-sourcing purchasing methods to meet their needs.C. Businesses are no longer required to conduct extensive research to find appropriate vendors.D. Businesses can obtain order status and product information from many vendor web sites.

60. Protective devices which an e-tailer uses to prevent such problems as burglary and employee pilferage are part of the e-tailer's

A. benefits program. C. compensation policies.B. security measures. D. maintenance activities.

61. What do managers often do after the project has been successfully completed?A. Provide feedback C. Give up power B. Close the office D. Prepare a report

62. Which of the following should an e-business deduct from gross profit in order to arrive at net profit:A. Operating expenses C. Product rebatesB. Quantity discounts D. Cost of goods


63. One reason why WhitmoreGoods.com should evaluate the available options when negotiating the terms of a service contract for its photocopier is to make sure that the options are

A. worth the price. C. offered worldwide. B. maintenance free. D. acceptable to employees.

64. What is an aspect of an e-business that should be included in a regular maintenance program?A. Telephone cables C. Water linesB. Utility meters D. Light fixtures

65. Decision making is defined asA. selecting wisely. C. selecting the best option. B. choosing among alternatives. D. choosing confidently.

66. Rob decides that he really can't know if Patrick will help him unless he asks, so he decides to do so. Which step of the seven-step problem-solving method does this situation illustrate?

A. Select and implement a solution C. Define the problemB. Evaluate the solution D. Brainstorm possible solutions

67. A necessary step in time management is to analyze the tasks that need to be done and toA. assign them equal time. C. determine their priority. B. reduce each one. D. make them equally important.

68. When applying for an e-commerce position, is it an acceptable business practice to prepare a job résumé without listing any references?

A. Yes, the résumé can state that references will be provided upon request. B. Yes, providing references is a courtesy that is not really necessary.C. No, a job résumé is incomplete unless it contains a list of references. D. No, a list of references should be at the beginning of the résumé.

69. An Internet company employee whose daily tasks include answering customers' questions, providing product information, and solving problems is probably employed as a

A. web-maintenance supervisor. C. systems programmer.B. technical analyst. D. customer-service representative.

70. The use of technology often affects the pricing process by __________ prices.A. fixing B. maintaining C. lowering D. simplifying

71. An e-tailer purchased six items for $96.00. A profit of $4.50 per item was desired. Operating expenses were $1.75 per item. At what price should each item be sold?

A. $22.25 B. $17.75 C. $18.75 D. $13.25

72. To generate innovative product ideas, an online business oftenA. measures feedback. C. evaluates traits. B. interprets laws. D. monitors trends.

73. Purchasers of the Super Veggie Cutter are dissatisfied because the product does not perform as promised on its web site. The seller can be held responsible because its advertising included a(n) __________warranty.

A. implied B. limited C. full D. express

74. Which of the following is a responsibility of the Food and Drug Administration:A. Requiring producers to label all products C. Educating the public about hazardous productsB. Making sure cosmetics are pure and harmless D. Forbidding false, misleading, or deceptive advertising

75. Which of the following is an action that can negatively affect a customer's experience with an e-tailer:A. Available products C. Active links B. Web-site design D. Secure order process


76. Which of the following is a reason that e-tailers offer a deep product mix:A. To enable the business to compete effectively C. To focus on the needs of a specific marketB. To specialize in a product line D. To control the business's costs

77. Which of the following is a way that an online business can determine if a product will fulfill its target market's needs:A. Develop a prospect list C. Observe workers B. Distribute promotional materials D. Ask the customers

78. When an e-tailer provides intangible benefits to add value to its customers' core purchases, it is providing _________ services.

A. ongoing b. external C. augmented D. conditional

79. A web site using personalization strategies involves gathering and combining information about visitors in order to lead the visitors to

A. e-mail addresses so they can contact the company. C. pages that explain the site's credit policies.B. hyperlinks so they can access additional data. D. products that exactly meet their specifications.

80. Management can create a positive work environment by encouraging cooperation among the e-business'sA. vendors. B. external customers. C. internal customers. D. lawyers.

81. Which of the following is an effective way for an e-business to immediately answer its customers' questions:A. Require the use of personal identification numbers C. Hire response specialists B. Use automatic order confirmation D. Mail product information

82. Why should a small business that takes advantage of the Internet as a marketing tool make sure its brand stands out and connects with customers?

A. Most people become aware of brands from Internet advertisements.B. The Internet is so slow-paced that people often become bored.C. There are many things that distract people as they surf the Web.D. Branding on the Internet is not very effective.

83. What do e-tailers use to plan and control their investment in merchandise inventory?A. SWOT analysis C. Merchandise budget B. Marketing plan D. Cash flow statement

84. BuyMe.com had net sales of $642,000 last year and spent $376,500 buying the goods it sold, but customers returned $48,275 worth of goods. What was the company's gross margin?

A. $216,735 B. $217,225 C. $215,575 D. $218,385

85. For most e-businesses, the ultimate goal of using promotion is toA. introduce new products. C. control consumer demand.B. sell goods or services. D. get people to surf the Web.

86. A local newspaper reporter interviewed the manager and employees at HarrisonElectronics.com about the latest in audio and video equipment available to online consumers. The article appeared in the business section of the Sunday newspaper. What type of exposure did Harrison Electronics receive?

A. Publicity B. Public relations C. Promotions D. Product mix

87. Which of the following is a contemporary ethical issue that relates to promoting products to children:A. A national pharmaceutical company advertises a new flavor of children's cough medicine.B. An Internet service provider displays free announcements that promote reading and literacy. C. A dairy company pays a slotting fee to a grocery store chain to carry its line of cheeses.D. A soft-drink company places vending machines that contain their products in elementary schools.

88. Which of the following is an important policy that is included on most web sites:A. Privacy B. Advertising C. Legal D. Operating


89. Which of the following do many Internet businesses use as a sales promotion technique:A. News conferences C. Electronic coupons B. Press releases D. Television commercials

90. What component of an online business's promotional plan provides detailed information about economic trends?A. Overview of objectives C. Situation analysis B. Executive summary D. Budget justification

91. Salespeople must be knowledgeable about products being promoted online, and the business must have adequate stock of promoted items in order to coordinate __________ activities.

A. public relations and selling C. publicity and sellingB. promotional and selling D. promotional and advertising

92. One reason why some online stores join a cybermall is to benefit from theA. brief description. B. shared opinions. C. free offers. D. increased traffic.

93. Creating chat rooms and a Frequently Asked Questions (FAQ) page are strategies that many businesses use to provide online

A. access control. B. consumer privacy. C. buying ability. D. customer support.

94. Is the following situation legal? Why? Mississippi Mud Make-up produces skin-care products and requires online businesses to purchase a carton of their slow-selling lotions before orders will be filled for their more popular cleansers.

A. Yes, according to the Federal Trade Commission, this is legal.B. Yes, according to the Sherman Act, this is legal.C. No, this arrangement is prohibited by the Clayton Act. D. No, this arrangement is prohibited by the Robinson-Patman Act.

95. Employer-related sales activities that can involve ethical issues include:A. Giving gifts B. Recording expenses C. Entertaining clients D. Answering questions

96. Caroline is an employee for a large online business. She is unable to travel to a client's office but needs to demonstrate product features and be able to answer questions as they arise. What technology tool would be helpful to her in making a sale?

A. High-tech sales-support office C. Cell phone with wireless faxingB. Web presentation combined with a teleconference D. PowerPoint presentation on CD

97. Before developing a product feature-benefit chart, a salesperson must firstA. obtain the necessary facts. C. explain the product's apparent benefits. B. evaluate the competition's reactions. D. list the product's most important features.

98. Offering which of the following brands is most likely to help a new e-business to get started:A. Descriptive B. Private C. Generic D. National

99. One of the features of online account management is the ability toA. locate browsers. B. design web pages. C. confirm orders. D. target markets.

100. In which section of his business plan will Paulo discuss each key manager's skills?A. Management team C. Executive summary B. Company description D. Market analysis

2008 DECA Ontario ProvincialsTest 947 E-COMMERCE TEAM DECISION

9


101. B

Sole proprietorship. In a sole proprietorship, one individual carries all the risk and responsibility for the online business but also receives all the profit. Partnerships are businesses owned by two or more persons. A corporation is a group of individuals organized by a charter granted by the state. A cooperative is designed to supply goods and services to its members who are also its owners.

SOURCE: BL:003SOURCE: BA LAP 7—Own It Your Way

2. Dwww.pepsico.com. The Anticybersquatting Consumer Protection Act is a law that makes it illegal to register a domain name for the purpose of selling it to its trademarked owner for a profit. The web sitewww.pepsico.com is the Internet location for Pepsi soft-drink products. Assuming another person registered the domain name (Pepsi) before the company established its web site and this person tried to sell the Pepsi company the domain name in order to make money, the individual would have violated the Anticybersquatting Consumer Protection Act. Therefore, the Pepsi domain name is protected by the law. The address [email protected] is a personal e-mail address and is not subject to the law. Annual-report.doc is the name of a computer-generated document. Domain names or web sites do not end in jpg. The jpg indicates a computer file that might be a graphic.SOURCE: BL:057SOURCE: BA LAP 5—Legal Considerations in E-Commerce

3. CWholesalers. Wholesalers buy goods from producers in large quantities. They are able to sell to several retailers on a timely basis, offering smaller quantities than the producer would be willing to sell. Producers actually produce and/or package the original product, which is then made available to wholesalers. Appraisers estimate the value of property for buying, selling, or lending purposes. Order selectors work for wholesalers, assembling smaller quantities of goods to be sent to area businesses. Requisition delegate is a fictitious term.SOURCE: CM:003SOURCE: MB LAP 3—Channels of Distribution

4. AIntegrated information sharing. Integrated information sharing allows near-instantaneous computer decisions related to market information, customer information, supply and inventory information, etc. The combination of all available information allows for more efficient supply-chain management. Electronic receiving, automated scheduling, and audiovisual programming do not improve the distribution process. In fact, the receiving process involves having employees check deliveries, and deciding when deliveries are scheduled. SOURCE: CM:004SOURCE: Zikmund, W., & d'Amico, M. (2001). Marketing: Creating and keeping customers in an

e-commerce world (7th ed.) [pp. 436-438]. Mason, OH: South-Western.


11 5. A

Obstructive. An obstructive approach occurs when a business does as little as possible to solve the social or environmental problems it creates when marketing a product. If a business refuses to accept responsibility for actions that harm the environment, the business is being obstructive. When a business takes a defensive approach, it is doing only what is required by law. An accommodating approach is when a business goes beyond its obligation to remedy the situation and extends help to those who ask. In a proactive approach, the business actually seeks out opportunities to contribute to the community/society.SOURCE: CM:006SOURCE: Griffin, R. (2002). Management (7th ed.) [pp. 116-117]. Boston: Houghton Mifflin.

6. CAuthority to demand cooperation. Strong leaders have the authority and power to influence others and direct the actions of others. A channel of distribution that has strong leadership is often able to avoid conflict within the channel because the leader has the authority to set goals for the entire channel and demand cooperation, which reduces the possibility of conflict. The leader's authority makes it possible for the leader to assign specific responsibilities to each channel member and persuade members to accomplish their individual tasks. When each member is cooperating and working for the good of the channel, there is less chance of conflict. It is not necessary for the leader to develop friendships. Channel leaders usually do not provide training. It is not possible to regulate change, although an effective leader will help channel members adjust to change.SOURCE: CM:008SOURCE: Boone, L.E., & Kurtz, D.L. (2004). Contemporary marketing (11th ed.) [pp. 444-445].

Mason, OH: Thomson/South-Western.

7. DBackward integration. E-tailers wishing to maintain control of the products as they move through the distribution channel often use backward integration. Backward integration involves owning the suppliers. Forward integration is a strategy in which the suppliers own the retail outlets. Indirect and multichannel distribution involve intermediaries.SOURCE: CM:009SOURCE: Czinkota, M.R., & Kotabe, M. (2001). Marketing management (2nd ed.) [p. 347].

Mason, OH: South-Western Publishing Co.

8. BAgree on ground rules. Once you know your group's purpose, you can (as a group) lay some simple ground rules for appropriate behavior during the discussion. Finding out what people know about the subject and contributing in a useful way occur later in the process. Volunteering a new idea is a discussion tool for contributing in an open-minded way.SOURCE: CO:053SOURCE: QS LAP 29—Put In Your Two Cents

9. DThink about what they want to say before they say it. An e-tailer's employees should be able to express themselves to their coworkers. However, they should always think about what they want to say before saying it so that they do not cause problems or misunderstandings. Legitimate complaints or problems about the job should be discussed with the supervisor, not coworkers. Rumors and gossip should not be passed on to coworkers as they may not be true and could cause harm. A nondirective approach is best in communicating with angry coworkers as it helps to defuse their anger.SOURCE: CO:014SOURCE: Leskiar, R.V., & Flatley, M.E. (2005). Basic business communication: Skills for

empowering the Internet generation (10th ed.) [pp. 413-414]. Boston: McGraw-Hill/Irwin.


1210. C

Preparing an agenda. An agenda is a list of topics that will be discussed at the staff meeting. It is the plan that an online business's manager follows in order to cover all the issues in a timely manner. Managers usually develop an agenda in advance and give it to staff members so that they will be prepared to discuss the topics during the meeting. Managers usually encourage discussion during staff meetings. It is not necessary for an online business's manager to develop audiovisuals or provide notebooks in order to conduct an effective staff meeting.SOURCE: CO:140SOURCE: Hyden, J.S., Jordan, A.K., Steinauer, M.H., & Jones, M.J. (1999). Communicating for

success (2nd ed.) [pp. 553-554]. Cincinnati: South-Western Educational.

11. BLoyal customers. A business's goal is to create loyal customers who will continue to buy and refer others to the business. An effective way to create loyal customers is to develop good relations between employees and customers. Employees have the most contact with customers and are in the best position to encourage repeat business. By treating customers well and providing good service, employees will improve relations and create loyalty. Offering reliable service is one way to improve relations with customers. Loyal customers often make positive comments about a business. However, businesses are more concerned with creating loyal customers than with what customers say. Employees who work together as a team may be able to provide better service to customers.SOURCE: CR:008SOURCE: Rokes, B. (2000). Customer service: Business 2000 (pp. 17-18). Mason, OH: South-

Western.

12. BDetermine each step in the ordering process and how it relates to each area of the e-business. The managers and owners need to understand the channels of communication within the e-business and how each department works and interfaces with one another in order to develop an online system to process orders. Designing and building platforms and soliciting bids to develop the platforms are done after the steps in the ordering process have been determined.SOURCE: DS:056SOURCE: Coyle, J.J., Bardi, E.J., & Langley, C.J. (2003). The management of business logistics:

A supply chain perspective (7th ed.) [p. 454]. Mason, OH: South-Western.

13. AInvoice. The invoice is the supplier's bill to the purchaser. It shows the cost of each item that was shipped. A bill of lading is a contract between the shipper and the transportation company. A freight bill is a list of shipping charges. A delivery receipt is the carrier's form accompanying a shipment that is signed by the purchasing company to acknowledge receipt of the goods.SOURCE: DS:086SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 350).

New York: Glencoe/McGraw-Hill.

14. DSigning an invoice that has blank spaces. Invoices should not have any blank spaces that could be filled in by vendors at a later time because this gives dishonest vendors an opportunity to cheat the business. Counting the vendors' deliveries, matching the count with the invoice, and checking vendors' carts and boxes after they have been unpacked are all ways to reduce vendor-caused shrinkage.SOURCE: DS:026SOURCE: DS LAP 4—Inventory Shrinkage


1315. D

People. Human resources, people, are the most important economic resource because they combine the other resources to produce goods and services. Without the work of people, land would not be used to grow crops, roads would not be built, and equipment would not be used to manufacture goods. Minerals and energy are natural resources. Equipment is capital goods.SOURCE: EC:003SOURCE: EC LAP 14—Economic Resources

16. APrice = $700, demand = 300, supply = 500. Excess supply is the situation that exists when supply is greater than demand. When the price is $600, supply and demand are equal. At the prices of $500 and $400, demand is greater than supply, and excess demand exists.SOURCE: EC:006SOURCE: EC LAP 12—Price

17. BThe e-business takes care of the responsibilities associated with having employees. Human resources management involves taking care of the responsibilities associated with having employees. Giving preferred customers a special discount is part of marketing. Including top-level managers in long-term planning is part of strategic management. And, acting on new information about a competitor can be marketing and/or operations management.SOURCE: EC:071SOURCE: EC LAP 19—Strictly Business (Business Activities)

18. DInsurance may be purchased to cover these risks. "Pure" risk means the possibility of loss or no loss, as in the case of fire or a hurricane. An online business may gain from a speculative risk, where there may be a loss, no change, or a gain. Buying shares of stock is an example of a speculative risk. "Pure" risks can be insured against; no insurance will cover speculative risks.SOURCE: EC:011SOURCE: EC LAP 3—Lose, Win, or Draw (Business Risk)

19. ATrade or profession. This is the most common type of job specialization. Specialization by job task occurs when a worker becomes skilled in one, very small portion of a job. Specialization by stage of production occurs when more than one stage is required to change a raw material into a finished product. Geographic region may affect your work if it is subject to climatic conditions, but it is not a category of specialization.SOURCE: EC:014SOURCE: EC LAP 7—Specialization of Labor

20. BPrices will continue to rise. When inflation is at a high level, prices are also high. During times of inflation, prices often continue to rise. As a result, some Internet businesses might decide to hold on to products to sell later because they anticipate that prices will continue to increase, and they can sell products for more at a later time. Consequently, inflation can cause a decrease in supply because businesses are waiting to sell products at the highest price possible. Businesses do not hold on to products to sell later because taxes will limit production, cash will be in short supply, or income will remain constant.SOURCE: EC:083SOURCE: O'Sullivan, A., & Sheffrin, S.M. (2003). Economics: Principles in action (pp. 119-120).

Upper Saddle River, NJ: Prentice Hall.


1421. B

Protectionism. Protectionism is a government's policy to protect domestic industry and online businesses against foreign competition. It involves limiting trade through the use of trade barriers such as tariffs, quotas, licenses, and product standards. Limitations on exports would harm online companies within the country rather than benefit them. Membership in GATT (the General Agreement of Tariffs and Trade) is not a government policy but an international organization that helps expand world trade. The promotion of tourism helps to support and improve international trade rather than control it.SOURCE: EC:016SOURCE: EC LAP 4—International Trade

22. BCompetes on an economic level. The business environment is the environment in which the business operates. The online business environment is highly competitive because similar businesses are competing on an economic level for the same customers. There are only so many customers and those customers have only so much money to spend. As a result, online businesses are competing for limited customer dollars. Many online businesses are small and have only a few employees rather than a large work force. Online businesses operate 24/7 which means they do not operate on a limited basis. Although businesses try to protect information from theft, that is not always possible because of the advanced skills of many computer hackers.SOURCE: EC:090SOURCE: Kleindl, B.A. (2001). Strategic electronic marketing: Managing e-business (pp. 221-

222). Cincinnati: South-Western College Publishing.

23. BWorkers are more productive when they can communicate and access information quickly. E-commerce links people together instantly, even globally, and gives people access to information that would have taken hours and days to gather manually. It frees people up from mundane tasks, such as order entering, and lets them concentrate on more meaningful activities, such as sales analysis. Internet access at work may be viewed by some employers as a threat to their employees' productivity, but many have taken steps to remedy the situation, such as restricting access to some types of sites. Productivity has risen, not fallen, and it is true that a large percentage of the population overall makes purchases via the Internet. Even though there are questions about the many different ways e-commerce impacts the economy, analysts are clear that it has and continues to improve productivity.SOURCE: EC:063SOURCE: Oelkers, D.B. (2002). E-commerce: Business 2000 (p. 13). Cincinnati: South-Western

Educational.

24. DImportance of the relationship. Identifying who is involved in a conflict, such as a salesperson and a customer, provides insight about the nature of the relationship and its importance. Identifying who is involved in the conflict does not necessarily provide insight about personality, disagreement type, or the disagreement's core issue.SOURCE: EI:015SOURCE: EI LAP 7—Stop the Madness (Conflict Resolution in Business)


1525. B

Cooperate with each other. Teamwork and cooperation are synonymous. The members of a team must help each other and work well together. This is true whether the team is voluntary or appointed by the e-tailer's management. Team members should not all have the same opinions but contribute their individual thoughts and ideas. The leader should guide the team, not dominate it.SOURCE: EI:045SOURCE: HR LAP 26—Teamwork

26. BExamine his attitude. One characteristic of an adaptable person is a positive or “can-do” attitude. A person who resists new situations or circumstances often has a negative attitude. By being aware of personal attitudes and being willing to change them, a person can effectively adapt to new circumstances. A person's expectations can be defined as the anticipated outcome of a specific action. Low expectations do not necessarily make a person adaptable. Fear is a negative effect of low adaptability. Ignoring the situation, or pretending that it doesn't exist, does not generally increase a person's adaptability.SOURCE: EI:006SOURCE: QS LAP 15—Stuff Happens

27. BLaissez-faire. Persons in creative occupations who need free rein and only general guidance perform best under a laissez-faire leader. Democratic and authoritarian styles provide more structure and control than laissez-faire. There is no style of leadership classified as republican.SOURCE: EI:037SOURCE: EI LAP 5—Can You Relate?

28. CStatement of financial requirements. The start-up costs include fixed assets, prepaid items and deposits, pre-opening expenses, inventory and supplies purchases, and working capital (cash) requirements. The monthly cash-flow analysis predicts whether the cash generated by the Internet-based business can cover the operating expenses and loan repayments. The break-even analysis shows the level of sales needed to pay the operating expenses and to make the debt payments. The balance sheet shows the financial status of the Internet-based business.SOURCE: FI:084SOURCE: BA LAP 2—Risk Management

29. ACost of goods sold. Cost of goods sold includes all costs used in obtaining or producing the goods or services that an Internet-based business sells such as materials and supplies. Operating expenses are all other expenses in operating the Internet-based business such as wages, advertising, insurance, rent, and utilities expenses. Gross profit is revenue minus cost of goods sold. Revenue is the total amount of money earned by a business.SOURCE: FI:094SOURCE: FI LAP 4—Watch Your Bottom Line (Income Statements)


1630. D

Salaries and training. An operating budget is an estimation of all expenses involved in running an e-business during a certain period of time. An expense is the money that an e-business spends. Some expenses that an e-business includes in its operating budget are for salaries, training, equipment, rent, utilities, inventory, and insurance. Assets are anything of value that an e-business owns. Assets can be converted to cash and are considered a source of income rather than an expense. Sales are a source of income.SOURCE: FI:098SOURCE: Eggland, S.A., Dlabay, L.R., & Burrow, J.L. (2004). Intro to business (5th ed.) [p. 185].

Mason, OH: South-Western.

31. DAs long as additional benefits exceed additional costs. Cost/benefit analysis estimates the cost of an action and compares it with an estimate of the benefits of that action. As long as the benefits exceed the costs, the project should be pursued. Cost/benefit analysis does not require benefits to be twice as much as costs. Additional benefits should exceed, not match, additional costs. Cost/benefit analysis does not require you to estimate a break-even point in any particular time period.SOURCE: FI:357SOURCE: Miller, R.L. (2005). Economics: Today and tomorrow (pp. 265-267). Columbus, OH:

Glencoe/McGraw-Hill.

32. D38%. Return on investment (ROI) is a cost/benefit analysis that is calculated by dividing the profit by the investment, which includes the total costs and expenses involved in operating the business. To calculate ROI, first determine the profit by subtracting the costs and expenses from total sales and revenue ($450,000 – $325,000 = $125,000). Then, divide that figure by the amount of investment ($125,000 ÷ $325,000 = .038 or 38%). In this example, the e-tailer invested a total of $325,000 in the business and achieved a 38% return on investment. E-tailers calculate return on investment to determine if they are earning a sufficient profit based on the cost.SOURCE: FI:302SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 528-

529). New York: Glencoe/McGraw-Hill.

33. BCreating web sites. E-commerce businesses either create their own web sites or buy space on a commercial online service. There are costs associated with both because businesses often hire professionals to create appealing web sites and then update them on a regular basis. If the businesses buy space on an online service, there are annual fees and possibly creative charges. Businesses need to consider these costs because they may be significant over time. Creating web sites is more unique to e-commerce than to other types of businesses because not all businesses have web sites. However, many businesses today purchase computers and pay data processors. Businesses involved in e-commerce usually purchase software rather than develop it.SOURCE: FI:306SOURCE: Kotler, P., & Armstrong, G. (1999). Principles of marketing (8th ed.) [pp. 522-523].



1734. C

Pre-employment tests. When pre-employment tests are valid, they can be some of the most objective measures for predicting job success. The evaluation of résumés and application blanks is usually subjective. Interviews have been highly criticized for providing unreliable results due to the subjectivity of interviewers.SOURCE: HR:356SOURCE: MN LAP 51—Selecting New Employees

35. BInstalling a new computer network and additional software. Employees would need additional training and development to use and to understand this new technology. Payroll-deducted savings and dental insurance are employee benefits to be explained, rather than skills to be taught. A canopy and carpet at the entrance are conveniences for employees and customers.SOURCE: HR:362SOURCE: MN LAP 42—Training/Human Resource Development

36. CAttending diversity workshops/training sessions. This is a positive step that requires management to give both time and attention to learning how to create an equitable work environment. Talking about equity with staff, posting articles for them to read, and reading articles are indications of an interest in equity but don't show a strong commitment to ensuring equity for workers.SOURCE: HR:367SOURCE: MN LAP 55—Managing Diversity in the Workplace

37. AA broad view of customers' changing buying patterns. The scope of marketing has become wider and more complicated, and product life cycles have become shorter. Customers buy the same items for a shorter amount of time, which means that e-tailers must bring out new products at a faster rate. A marketing-information management system helps e-tailers to track buying trends and develop new products to meet consumer demand.SOURCE: IM:001SOURCE: IM LAP 2—Marketing-Information Management

38. CIt contributes to business success. Marketing research contributes to business success because Internet businesses that obtain reliable marketing-research data are better able to make good decisions because their decisions are based on fact, not opinion. Whether marketing research improves an Internet business's financial management would depend upon the kind of problem the Internet business is trying to solve and the data gathered. Competitors are often unaware of an Internet business's marketing-research efforts.SOURCE: IM:010SOURCE: IM LAP 5—Nature of Marketing Research

39. DCode for evaluation. Internet businesses assign codes to survey responses in an effort to use the information in a numerical mode. Open-ended questions are designed so that respondents react to questions in a manner that requires more than "yes" or "no" as an answer. Because possible responses are not controlled or limited, coding is often more difficult. If businesses are not able to assign codes to the responses, the survey results may be extremely difficult to evaluate. The results of surveys that contain open-ended questions are not difficult to store for future use, to enter into a database, or to distribute to management.SOURCE: IM:062SOURCE: Hair, J.F., Jr., Bush, R.P., & Ortinau, D.J. (2000). Marketing research: A practical

approach for the new millennium (p. 488). Boston: Irwin/McGraw-Hill.


1840. C

Around-the-clock accessibility. One of the advantages of using the Internet to search for marketing information is that the Internet can be accessed at any time of the day or night. Businesses located in one time zone are able to access the web sites and online documents of businesses and organizations located in distant time zones at any time that is convenient. There is no need to wait for the traditional work hours to search for information. Computer software programs provide word-processing capability. The Internet makes it possible to access documents online but does not store products. Most often done face-to-face, personal selling is an element of promotion that aims to meet the a customer's specific needs and is used to build long-term customer relationships.SOURCE: IM:185SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.)

[pp. 170-171]. Woodland Hills, CA: Glencoe/McGraw-Hill.

41. CCustomer profiles can be developed. Marketers collect data obtained through various means to develop customer profiles that will help them to sell more products. These customer profiles consist of many different pieces of demographic information, including age, income, and lifestyle. Data actually becomes more useful to marketers as it becomes more abundant; marketers get a better idea as to what products are most likely to appeal to customers. Analyzing information by hand is okay when the amount of data is limited, but when there is a lot of it, computers are necessary for the analysis. The more information that marketers collect about customers, the more of an issue privacy becomes. People are very concerned that the collected information will be misused in some way. SOURCE: IM:232SOURCE: Wilson, R.F. (2002). Planning your Internet marketing strategy (p. 80). New York: John

Wiley & Sons.

42. AProduct/Service management. The product/service management function involves obtaining, developing, maintaining and improving a product or service mix in response to market opportunities. It affects the image of the e-tailer by creating an image for the products the e-tailer offers. Risk management is a business activity intended to limit business losses and help to assure financial security. Selling is a marketing function that involves determining client needs and wants and responding through planned, personalized communication that influences purchase decisions and enhances future business opportunities. Financing is a business function that involves understanding the financial concepts used in making business decisions.SOURCE: MK:002SOURCE: MK LAP 1—Work the Big Six (Marketing Functions)

43. DThey will have excess merchandise to store that will tie up valuable cash. An e-tailer that has too much inventory on hand must pay for it even if it doesn't sell quickly, which ties up cash. Also, the merchandise must be stored to prevent damage and insured to protect it in case of disasters. Having a lot of merchandise on hand does not automatically mean that the e-tailer must lower the price or that customers will think it less valuable. The amount of merchandise does not limit the opportunities for manufacturers to interact with the e-tailer.SOURCE: MK:009SOURCE: Everard, K.E., & Burrow, J.L. (2001). Business principles and management (11th ed.)

[pp. 395-396]. Cincinnati: South-Western.


1944. A

Marketing planning. Each e-business must select the marketing mix that is most appropriate for its purposes. This mix then becomes the basis for the firm's marketing planning and problem solving. Personnel selection is usually by department or function, rather than by the elements of the marketing mix. Performance evaluations are formal assessments by the supervisor of a worker's job performance. Behavior modeling is an instructional method in which trainees are given a specific model of behavior to follow.SOURCE: MP:001SOURCE: IM LAP 7—Pick the Mix (Marketing Strategies)

45. DFind out whether there is a market for its products. Target marketing is the identification and selection of markets for a business or for a product. Online businesses need to know whether there are consumers who are likely to buy from them in order to know what to sell and how to sell it. Identifying the target market will not enable the online business to predict the amount of profit that it can earn. Finding out how many consumers have heard of the online business is not a purpose of target marketing since those who have heard about the online business still may not buy from it. Identifying the target market does not help to control operating expenses, the costs of running the online business.SOURCE: MP:003SOURCE: IM LAP 9—Have We Met?

46. DThe target market that most closely matches its customer profile. Start-up e-companies want to first focus on target markets where they will find it easiest to make sales. Those markets are the ones that match their customer profile. Then, these sales provide for future growth and expansion into other markets. The international market in undeveloped countries is appropriate only for certain businesses. Underdeveloped countries tend to have less access to technology and Internet capabilities. A start-up e-business would look for a market that was not filled with direct competitors. Future markets are important after a e-business has successfully entered its original market.SOURCE: MP:005SOURCE: Meyer, E.C., & Allen, K.R. (2000). Entrepreneurship and small business management:

Teacher's manual (2nd ed.) [p. 94]. New York: Glencoe/McGraw-Hill.

47. BStrategies. Marketing planning involves developing objectives that a business wants to achieve. Once a business has clearly-defined objectives, it can develop strategies to achieve those objectives. Marketing strategies are the specific plans of action for achieving marketing goals and objectives. However, it is impossible to develop plans of action until the business identifies its objectives. Marketing functions are interrelated activities that must work together to get goods and services from producers to consumers. Marketing elements are product, place, promotion, and price. Marketing concepts are based on beliefs that all business activities should be aimed toward satisfying consumer wants and needs while achieving company goals.SOURCE: MP:006SOURCE: Boone, L.E., & Kurtz, D.L. (2004). Contemporary marketing (11th ed.) [p. 39]. Mason,

OH: Thomson/South-Western.


2048. C

To identify emerging trends. Environmental monitoring involves tracking a variety of data and statistics to identify emerging trends. The benefit of environmental monitoring is that it enables Internet-based businesses to understand trends and make changes in order to remain competitive. For example, environmental monitoring might indicate that consumers are buying more American-made products than products made in foreign countries. Internet-based businesses do not engage in environmental monitoring to develop recyclable products, to segment target markets, or to analyze ethical issues.SOURCE: MP:008SOURCE: Zikmund, W.G., & d'Amico, M. (1999). Marketing (6th ed.) [pp. 42-43]. Cincinnati:

South-Western College.

49. BWhat obstacles do we face? "What obstacles do we face?" is an appropriate question for determining threats. Obstacles in a business's path pose threats to the business. "What are our assets?" is a question for determining strengths. "What niches have our competitors missed?" and "What new needs of customers can we meet?" are questions for determining opportunities.SOURCE: MP:010SOURCE: IM LAP 8—Analyze This! (SWOT Analysis)

50. CPromotion. Promotion is a marketing activity that refers to the various types of communications that marketers use to inform, persuade, or remind customers of their products. When online businesses conduct a competitive analysis, they consider their competitors' promotional activities because promotional activities have an impact on an online business's success in attracting customers and selling products. As a result of analyzing competitors' promotional activities, an online business might decide to use similar activities because they have proven to be effective. Risk management and purchasing are business activities rather than marketing activities. Management research is not a marketing activity.SOURCE: MP:012SOURCE: Boone, L.E., & Kurtz, D.L. (2004). Contemporary marketing (11th ed.) [pp. 64-68].

Mason, OH: Thomson/South-Western.

51. DSeeking opinions of experts is a qualitative method. Qualitative methods of sales forecasting are based on expert opinion and personal experience. Quantitative methods are based on the results of gathering and analyzing all kinds of numerical market data. Quantitative methods are generally more expensive than qualitative methods. Reading industry forecasts is not a method of forecasting but is a step in quantitative forecasting.SOURCE: MP:013SOURCE: IM LAP 3—Nature of Sales Forecasts

52. DIntroducing a new product. E-tailers usually develop a marketing plan before introducing a new product. They take into consideration a variety of factors that may have an effect on the success of the new product, such as the prices that competitors are charging for similar products. When introducing a new product, e-tailers usually want to set prices that are comparable to, or lower than, the prices offered by their competitors in order to attract customers and build market share. The e-tailers do not consider their competitors' prices when organizing a new division, selecting a new supplier, or analyzing a new database.SOURCE: MP:018SOURCE: Churchill, G.A., Jr., & Peter, J.P. (1998). Marketing: Creating value for customers (2nd

ed.) [pp. 98-100]. Boston: Irwin/McGraw-Hill.


2153. B

Current customers. Current customers are an excellent source of marketing information. You can gather information from current and former customers in surveys by mail, on the phone, in personal interviews, etc. Internet surveys are effective if they involve current customers. Employees may provide useful information, but the primary source is current customers. Accounting records are a type of secondary information.SOURCE: MP:022SOURCE: Meyer, E. C., & Allen, K. R. (2000). Entrepreneurship and small business management:

Teacher's manual (2nd ed.) [p. 171]. New York: Glencoe/McGraw-Hill.

54. CHuman resources. A marketing audit is an evaluation of a company's marketing activities. In addition to analyzing the Internet-based business's marketing objectives, strategies, and activities, the audit should assess the capacity in which marketing personnel perform necessary tasks. Credit is the arrangement by which Internet-based businesses or individuals can purchase a product now and pay later. An Internet-based business's credit standing reveals a business's ability to pay its financial debts. A personal incentive is a reward that motivates an individual to engage in a specific behavior. Fixed assets are items of value that an Internet-based business owns (e.g., building) that are not expected to change. Credit standing, personal incentives (e.g., financial bonus), and fixed assets are important factors that affect the financial well-being of an Internet-based business, but are not necessarily the primary considerations in a marketing audit.SOURCE: MP:024SOURCE: Zikmund, W., & d'Amico, M. (2001). Marketing: Creating and keeping customers in an

e-commerce world (7th ed.) [p. 634]. Mason, OH: South-Western.

55. CSignature. Digital certificates are a type of electronic signature that verify that the person sending a message is the legitimate sender. It is a method of making sure the sender is not an imposter. The use of digital certificates is one type of e-commerce security. A digital certificate is not an example of an electronic virus protection, file transfer, or presentation. SOURCE: NF:027SOURCE: Tiernan, B. (2000). e-tailing (pp. 199-200). Chicago: Dearborn Financial.

56. BCheck-out procedures. A shopping cart is a computer program designed to act as an online catalog and order processing center. When creating an online shopping cart, businesses should consider the check-out procedures. These procedures should be as simple as possible to prevent customers from becoming confused and giving up on trying to complete a purchase. For example, asking a lot of questions during the check-out process may discourage customers who then abandon their carts and leave the site. When creating online shopping carts, businesses do not consider advertising strategies, inventory levels, or web-site connections. Businesses focus on making the shopping easy to use.SOURCE: NF:030SOURCE: Tiernan, B. (2000). e-tailing (pp. 169-170). Chicago: Dearborn Financial.

57. CThe clipboard contents will be pasted at the insertion point. Pressing "Ctrl" and "V" at the same time will paste whatever content has been copied onto the clipboard next to the cursor. Copying a selection to the clipboard is accomplished by holding down "Ctrl" and "C" simultaneously. The Windows shortcut, "Ctrl" + "X", will move a selection onto the clipboard. The Windows shortcut that reverses a last change is "Ctrl" + "Z."SOURCE: NF:067SOURCE: WebmasterNow. (n.d.). How to copy and paste. Retrieved November 5, 2007, from

http://www.webmasternow.com/copyandpaste.html


2258. C

Access to the server logs. Many businesses do not have the resources in-house to maintain their web sites and select an outside company to host the site. When selecting a web host, it is important to find out if the business will have access to the server logs. These logs contain the history of every transaction on the site such as number of visits, length of time visitors stay on the site, what they viewed, if they made any purchases, etc. Businesses need this information to monitor the site and the traffic, and to make changes to keep the site effective. The web host stores a business's web pages, which means that the business makes design changes and is responsible for copywriting. The web host does not control the search engine.SOURCE: NF:074SOURCE: Chorney, R. (n.d.). How to select a web hosting provider. Retrieved November 5, 2007,

from http://www.globaldesigns.ca/article_2.asp

59. DBusinesses can obtain order status and product information from many vendor web sites. The Internet is available to users twenty-four hours a day, seven days a week. A purchasing agent who uses a vendor with a web site can log onto a web site at anytime to obtain product information (e.g., pricing, specifications).The information posted on a web site reduces the need to wait for returned telephone calls from sales representatives or for materials sent by the traditional postal services. Use of the Internet can increase the conflict among members of a distribution channel. For example, a manufacturer might develop a web site to sell directly to the consumer and reduce the need to use distributors to sell to retail outlets. Although the Internet can greatly reduce the time it takes to research suppliers, it does not eliminate the research process. Single-sourcing is the use of one vendor. It cannot be assumed that most businesses use one source to meet all of their needs.SOURCE: OP:116SOURCE: Zikmund, W., & d'Amico, M. (2001). Marketing: Creating and keeping customers in an

e-commerce world (7th ed.) [p. 192]. Mason, OH: South-Western.

60. BSecurity measures. Taking security measures involves using a variety of security methods and devices to protect the physical building and its contents. If used properly, they protect the e-tailer from the risk of theft of inventory, office equipment, and other valuables and even loss of life. E-tailers must work toward detecting and preventing losses that result from such activities as burglary and employee pilferage. Maintenance activities involve the repair and general upkeep of e-tailer's equipment and property. A benefits program includes all of the vacation time, health insurance, and other employee benefits provided by the e-tailer. Compensation policies are guidelines the e-tailer follows in paying employees.SOURCE: OP:013SOURCE: RM LAP 4—Security Precautions

61. DPrepare a report. When the project has been successfully completed, it's a good idea to have a final meeting. Group members often will have suggestions for improvement that the manager can include in a report. Managers usually prepare some type of brief report that explains the project, what worked, and what didn't work. This is particularly helpful if the project is one that will be completed again. The information in the report will make next year's project much easier to plan and manage. In many cases, there is no office to close. Managers do not actually give up power or authority. The project they were in charge of is simply over. After the project has been completed, managers often obtain feedback from the group to include in a report.SOURCE: OP:002SOURCE: QS LAP 18—Make It Happen


2362. A

Operating expenses. Operating expenses are the expenditures necessary to keep the e-business running. Gross profit does not take into consideration these types of expenses. Therefore, an e-business must deduct operating expenses from gross profit in order to arrive at net profit. Cost of goods is the amount of money an e-business pays for the products it sells or for the raw materials from which it produces goods to sell. Quantity discounts are deductions from the seller's price for purchasing large volumes of goods. Product rebates are returning part of the price customers pay for goods.SOURCE: OP:024SOURCE: MN LAP 57—Operating Expenses

63. AWorth the price. Many service contracts are available with a variety of optional features that usually add to the overall cost of the contract. For example, a basic contract might include a certain number of repairs per month. If the business wants unlimited repairs or wants the service company to make a house call, it often adds to the cost. However, businesses should analyze the extra cost involved to decide if the options are worth the price. In some cases, businesses will never use the options. Options are additional services and do not require maintenance. It is usually not important to the business if the options are offered worldwide or acceptable to employees. SOURCE: OP:027SOURCE: CCH Inc. (n.d.). Service contracts. Business owner's toolkit. Retrieved November 5,

2007, from http://www.toolkit.cch.com/text/P06_4488.asp

64. DLight fixtures. An e-business should plan to check the facility's light fixtures on a regular basis in order to make sure that they are working properly. Part of the maintenance program should involve routinely replacing the bulbs in light fixtures. Many e-businesses set a schedule for checking lights and replacing bulbs in order to prevent them from burning out at inconvenient times. Utility meters, water lines, and telephone cables usually are maintained by their respective utility companies.SOURCE: OP:033SOURCE: Berman, B., & Evans, J.R. (1998). Retail management: A strategic approach (7th ed.)

[p. 409]. Upper Saddle River, NJ: Prentice Hall.

65. BChoosing among alternatives. Decision making is defined as choosing among alternatives. Although selecting the best option is wise, it is not the definition of decision making. Selecting wisely and choosing confidently are helpful—but, again, they are not definitions for decision making.SOURCE: PD:017SOURCE: PD LAP 10—Weigh Your Options

66. ASelect and implement a solution. Rob has decided to take an action (asking Patrick for help) that can solve his problem with an assignment. The problem has already been defined, and Rob is no longer brainstorming possible solutions because he has decided on one. He won't be able to evaluate this solution until after he talks to Patrick.SOURCE: PD:077SOURCE: IS LAP 2—No Problem


2467. C

Determine their priority. It is important in time management to evaluate tasks so that an appropriate amount of time is assigned to them according to their priority or importance. Some tasks are more important than others and should be completed first. In some cases, the time assigned to the task may be reduced if the importance of the task does not seem to be great. However, it is not possible to reduce the time needed for all tasks. Tasks cannot be done in equal amounts of time or given equal importance.SOURCE: PD:019SOURCE: OP LAP 1—About Time (Time Management in Business)

68. AYes, the résumé can state that references will be provided upon request. This statement is often made at the end of the résumé where the references would customarily be listed. It indicates that the job applicant has references available and that s/he will provide their names, telephone numbers, and addresses if asked to do so. This is an acceptable business practice since the employer does not need the names unless s/he is considering hiring the applicant. A résumé is complete if it contains all other necessary information and either a list of references or the promise of them.SOURCE: PD:031SOURCE: Daggett, W.R., & Miles, J.E. (1998). The dynamics of work: Introduction to occupations

(2nd ed) [pp. 53-57]. Cincinnati: South-Western Educational.

69. DCustomer-service representative. Internet companies often hire individuals who are trained to know and understand products so that they can help customers with their questions or problems. Internet companies might have customer-service representatives work with customers via telephone or by computer (e.g., e-mail). A technical analyst usually evaluates different types of technical data. A systems programmer develops programs or platforms for computer networks. A web-maintenance supervisor is generally responsible for managing the department that updates and maintains a company's web site.SOURCE: PD:065SOURCE: PD LAP 3—E-Commerce Career Options

70. CLowering. Modern technology has enabled some manufacturers to create quality products that are inexpensive to produce. As a result, companies can charge lower prices for these products. As the technology improves, the quality of some of the products increases, and the prices decrease. The use of technology often lowers prices rather than simplifying, maintaining, or fixing them.SOURCE: PI:016SOURCE: Kotler, P., & Keller, K.L. (2006). Marketing management (12th ed.) [pp. 446-447]. Upper

Saddle River, NJ: Prentice-Hall.

71. A$22.25. The selling price of an item is the price at which it is sold by the e-tailer. The price must cover the costs of buying the item, the expenses involved in selling it, and an amount of profit for the e-tailer. In this problem, the cost of one item is found by dividing 6 into $96.00 ($16.00) and adding to that the operating expenses and desired profit per item ($16.00 + $1.75 + $4.50 = $22.25).SOURCE: PI:002SOURCE: PI LAP 3—Factors Affecting Selling Price


2572. D

Monitors trends. A trend is the general direction in which people or events are moving. By monitoring economic, cultural, and societal trends, an online business can identify needs and develop new-product ideas to accommodate these needs. Businesses do not need to interpret laws so they can generate product ideas. Traits are an individual's personal characteristics, which s/he expresses by exhibiting a regular pattern of behavior that becomes a part of that person over time. Feedback can take place only after the business generates product ideas.SOURCE: PM:128SOURCE: Kuratko, D.F., & Hodgetts, R.M. (2001). Entrepreneurship: A contemporary approach

(5th ed.) [pp. 133-135]. Mason, OH: South-Western.

73. DExpress. An express warranty is a warranty that is written or expressed verbally. An oral promise given in advertising or by the salesperson is an express warranty. A full warranty is a warranty which covers the entire product. A limited warranty is a warranty that does not contain the provisions of a full warranty. An implied warranty is an unwritten warranty understood by the consumer and the seller that the product will perform as expected.SOURCE: PM:020SOURCE: PP LAP 4—Warranties and Guarantees

74. BMaking sure cosmetics are pure and harmless. The FDA sets standards for cosmetics to ensure that they contain no harmful ingredients and are produced under sanitary conditions. Other areas of responsibility for the FDA are making sure the food supply is safe, making sure drugs and medical devices are safe, ensuring that labels are honest and informative, and removing harmful products from the market. The FDA administers labeling laws that apply only to foods, drugs, medical devices, and cosmetics. The Consumer Product Safety Commission is responsible for educating the public about hazardous products and requiring producers to provide warnings and instructions. The Federal Trade Commission forbids false, misleading, or deceptive advertising of consumer products.SOURCE: PM:017SOURCE: PP LAP 7—Consumer Protection in Product Planning

75. BWeb-page design. To compete effectively in today's market, an e-tailer must make sure that its customers are satisfied with its products, services, and experiences with the business. The web site is the primary selling tool for the e-tailer. Customers do not want to spend a lot of time navigating through a lot of pages to get information they want, nor do they want to wait for large graphics to load on their computer screens. These design flaws can negatively affect a customer's experience with the e-tailer. Therefore, an e-tailer must streamline the web site so customers can navigate to the web pages quickly. Available products, active links, and secure ordering processes usually enhance a customer's experience with an e-tailer.SOURCE: PM:138SOURCE: Rokes, B. (2000). Customer service: Business 2000 (pp. 55-62). Mason, OH: South-

Western.

76. ATo enable the business to compete effectively. The e-tailer with a deep product mix offers a great many items in the product line. This allows the e-tailer to meet the needs of a variety of consumers, use a range of prices, and compete effectively. A shallow product mix helps an e-tailer to control its costs. The use of a narrow product mix enables an e-tailer to specialize in a product line and to relate the products to a target market.SOURCE: PM:003SOURCE: PP LAP 3—Product Mix


2677. D

Ask the customers. To compete in the marketplace, an online business must develop or find products that will fulfill its customers' changing needs and wants. One way to determine what the customers want is by asking them. Obtaining customer feedback is a good way for an online business to evaluate how it is meeting its customers' needs and what it needs to do to increase customer satisfaction. Distributing promotional materials, observing workers, and developing a prospect list are not activities that necessarily help an online business identify products that will fulfill its customers' needs.SOURCE: PM:130SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.) [p.

550]. Woodland Hills, CA: Glencoe/McGraw-Hill.

78. CAugmented. A core product is the primary product that a customer purchases. To entice customers to buy, e-tailers often provide additional services, or augmented services, to increase the perceived value of the core purchase. For example, an e-tailer might offer free gift wrapping when customers purchase gifts from a bridal registry. External, ongoing, and conditional are not types of services that add value to core products.SOURCE: PM:036SOURCE: Solomon, M.R., & Stuart, E.W. (2000). Marketing: Real people, real choices (2nd ed.)

[p. 297]. Upper Saddle River, NJ: Prentice Hall.

79. DProducts that exactly meet their specifications. One aspect of personalization involves providing web-site visitors with the products that exactly meet their specifications. One way to do this is to gather and combine information about visitors in order to lead them to the correct product. For example, a site might ask a series of questions and the answers to those questions take visitors to other pages, finally ending on the page that displays the product that exactly matches the visitor's specifications. Using personalization strategies does not involve gathering and combining information about visitors in order to lead them to pages that explain the site's credit policies, hyperlinks so they can access additional data, or e-mail addresses so they can contact the company.SOURCE: PM:115SOURCE: Hanson, W. (2000). Principles of Internet marketing (pp. 210-213). Cincinnati: South-

Western College.

80. CInternal customers. Employees are an e-business's internal customers, and they need to be encouraged by management to work together serving each other and customers. In turn, this creates a positive work environment. External customers are who a person normally thinks of as customers, and management's role is not to get them to work together but rather help them to enjoy buying from the e-business. A manager's responsibility regarding the e-business's vendors is to get them to deliver products in a timely fashion with minimal interruption to employees and customers. Managers do not have control over the actions of the e-business's lawyers; besides, most lawyers work off the e-business's premises.SOURCE: PM:013SOURCE: PM LAP 1—Customer Service Supersized!


2781. C

Hire response specialists. Customer response specialists are service representatives who are available to answer customers' questions online or on the telephone. Hiring response specialists can facilitate the e-business's service efforts because the response specialists can help customers with questions or problems in real time. Positive outcomes of hiring response specialists are that the e-business has satisfied customers and sales may increase. Automatic order confirmation occurs when an online business automatically provides confirmation that it has received a customer's order. Requiring personal identification numbers (PINs) and mailing product information does not answer customers' questions immediately.SOURCE: PM:118SOURCE: Kleindl, B.A. (2001). Strategic electronic marketing: Managing e-business (pp. 124-

125). Cincinnati: South-Western College.

82. CThere are many things that distract people as they surf the Web. Not only does the Internet consist of millions of web pages, it is plagued with pop-up ads, sweepstakes, and contests of all kinds. This makes it very easy for a person to start out with a research goal in mind only to find themselves somewhere completely different from where they set out to be. All of this can happen with a single click of the mouse button in a relatively fast-paced manner, which many people consider to be far from boring. Traditional advertising through print, broadcast, and out-of-home media is still the primary method in which people learn about brands. Amazon.com and Yahoo! are two great examples of how powerful and effective branding on the Internet can truly be.SOURCE: PM:126SOURCE: PM LAP 10—Building Your Business's Brand

83. CMerchandise budget. A merchandise budget allows e-tailers to plan and control their investment in inventory, including such things as how much stock they have on hand, sales volumes, and profitability. A marketing plan is a set of procedures or strategies for attracting targeted customers to a business. A SWOT analysis outlines a business's strengths, weaknesses, opportunities, and threats. A cash flow statement is a financial summary with estimates as to when, where, and how much money will flow into and out of a business.SOURCE: PM:061SOURCE: Diamond, J., & Diamond, E. (1999). Contemporary visual merchandising (pp. 10-11).


84. B$217,225. Gross margin is calculated by subtracting the cost of goods sold and customer returns from net sales. To determine gross margin, first subtract customer returns from net sales ($642,000 - $48,275 = $593,725). Then subtract the cost of goods sold from that figure ($593,725 - $376,500 = $217,225).SOURCE: PM:065SOURCE: Stull, W.A. (1999). Marketing and essential math skills: Teacher's edition (pp. 234-235).

Cincinnati: South-Western Educational.

85. BSell goods or services. The major purpose of using promotion for most businesses is to increase their sales. Promotion helps to do this by informing, reminding, and persuading customers. Promotion is also used to introduce new products and to attract customers to a business rather than to get people to surf the Web. Consumer demand can be created but not controlled.SOURCE: PR:001SOURCE: PR LAP 2—Promotion


2886. A

Publicity. Publicity is any nonpersonal presentation of ideas, goods, or services that is not paid for by the company or individual that benefits from it. The newspaper article provided information about HarrisonElectronics.com to a wide audience, but the business did not have to pay for the exposure. Promotion is the marketing element referring to the various types of communications that marketers use to inform, persuade, or remind customers of their products. Public relations is a type of institutional promotion created to deal with controversial public issues that are related to a company or its products. Product mix is the particular assortment of products that a business offers in order to meet its market's needs and its company's goals.SOURCE: PR:003SOURCE: PR LAP 1—Promotional Mix

87. DA soft-drink company places vending machines that contain their products in elementary schools. Many vending machines provide offerings that have little, if any, nutritional value. Often, young children do not make appropriate choices when selecting food items. Some research attributes childhood obesity and other health issues to poor nutritional habits and lack of exercise. Some people feel that this is an ethical issue and support the notion that soft-drink companies are promoting unhealthy nutritional habits by placing these types of vending machines in schools. As a result, there has been an effort to place healthier options in school vending machines. Although slotting fees are controversial, a dairy company that pays a slotting fee to a grocery store chain does not necessarily present an ethical issue as it relates to children. In addition, flavored cough medicine and the promotion of reading and literacy do not necessarily present an ethical dilemma.SOURCE: PR:099SOURCE: De Gersdorff, S. (2004, May 12). School Vending Machines Fattening Kids, Study

Says. Retrieved November 5, 2007, from http://www.wcfcourier.com/articles/2004/05/12/news/top_news/7b5ae5953d78095186256e920049c04b.txt

88. APrivacy. Policies are general rules to be followed by the web site. An important policy that is included on most web sites is a privacy policy, which explains how the site handles the personal information that visitors provide. Before giving out personal information, visitors have a right to know what web sites do with their information and if they provide it to other businesses. Although businesses have legal, advertising, and operating policies, these policies usually are not included on their web sites.SOURCE: PR:103SOURCE: PR LAP 15—Planning Your Web Site

89. CElectronic coupons. Sales promotion is promotional activities other than advertising, personal selling, and publicity that stimulate customer purchases. The sales promotion techniques that Internet businesses use are similar to the techniques used by other types of businesses. An example is coupons, which many Internet businesses provide electronically to regular customers or to users who visit their web sites. These types of coupons may be sent to customers by e-mail or downloaded by customers directly from the business's web site. Press releases and news conferences are examples of publicity. Television commercials are a type of advertising.SOURCE: PR:169SOURCE: Strauss, J., & Frost, R. (1999). Marketing on the Internet: Principles of online marketing

(pp. 220-225). Upper Saddle River, NJ: Prentice Hall.


2990. C

Situation analysis. A situation analysis is a determination of an online firm's current business situation and the direction in which the online business is headed. The analysis includes information regarding the internal and external factors currently affecting the online business. Information regarding economic, demographic, and industry trends are often included in the situational analysis. The executive summary is the introductory element of the promotional plan that highlights key points of the document's content. The objectives are the goals of the promotional plan. The budget justification provides the rationale for funding promotional activities.SOURCE: PR:073SOURCE: Semenik, R.J. (2002). Promotion and integrated marketing communications (p. 68).

Mason, OH: South-Western.

91. BPromotional and selling. Failing to inform salespeople about promotions or failing to have adequate stock on hand can lead to dissatisfied customers and lost sales. Promotional and selling activities should be coordinated in order to increase sales. Promotional activities include advertising, visual merchandising, public relations, and publicity.SOURCE: PR:076SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.) [p.

302]. Woodland Hills, CA: Glencoe/McGraw-Hill.

92. DIncreased traffic. Cybermalls are made up of online stores, often related to a specific category. As in physical shopping malls, customers sometimes stumble upon stores located within a cybermall that they might not have known existed otherwise. Online stores that join a cybermall benefit from the increased traffic that results from customers accidentally locating them. The purpose of a cybermall is not to provide free offers, shared opinions, or brief descriptions.SOURCE: PR:170SOURCE: PR LAP 16—WWW Site Promotion

93. DCustomer support. Online businesses realize the importance of providing customer support, although that is often more difficult because there is no face-to-face contact. To overcome the problem of being able to speak directly to customers, businesses use various strategies such as creating chat rooms and a FAQs page. These strategies enable customers to quickly find the answers to many routine questions or to discuss problems or concerns with others. For example, chat rooms allow users to communicate with each other in real time, which enables them to obtain immediate assistance. Access control and consumer privacy are security issues. Chat rooms and FAQ pages do not allow customers to buy.SOURCE: SE:305SOURCE: Tiernan, B. (2000). e-tailing (pp. 176-177). Chicago: Dearborn Financial.

94. CNo, this arrangement is prohibited by the Clayton Act. The Clayton Act prohibits tying arrangements in which the purchase of one good or service depends on other purchases. The Clayton Act is a federal law intended to ensure fair competition among businesses. The Federal Trade Commission Act declares competition illegal that is deemed unfair by the Commission. Examples would include deceptive product claims or interfering with the efforts of a competitor's sales staff. The Robinson-Patman Act is a federal law that forbids businesses from discriminating in the prices or services offered to competing customers. The Sherman Act is a federal law that prohibits competing businesses from conspiring to control, or fix, their prices.SOURCE: SE:932SOURCE: SE LAP 121—Selling Policies


3095. B

Recording expenses. Employer-related sales activities that can involve ethical issues include recording sales expenses. Fudging an expense account is a questionable activity, even if you think the result is in the company's favor. Ethical issues can also surround customer-related activities, such as giving gifts, entertaining clients, and answering questions.SOURCE: SE:106SOURCE: SE LAP 129 — Keep It Real—In Sales (Selling Ethics)

96. BWeb presentation combined with a teleconference. Utilizing this combination, Caroline's client could view the demonstration online as she walks the customer through the presentation. Teleconferencing allows her to answer questions as they arise during the presentation. A PowerPoint presentation on CD could be sent to the client to view, but this would not provide a live demonstration. Also, questions would have to be addressed via another method. The high-tech, sales-support office is maintained for the use of salespeople who may be dispersed geographically or travel a great deal. A cell phone with wireless faxing would provide a static picture while allowing questions to be answered. This could also be time consuming for the salesperson and the client.SOURCE: SE:107SOURCE: Ingram, T.N., LaForge, R.W., Avila, R.A., Schwepker, C.H., & Williams, M.R. (2001).

Professional selling: A trust-based approach (pp. 131-132). Mason, OH: South-Western.

97. AObtain the necessary facts. A salesperson can get information about product features from many sources. These sources include manufacturers, coworkers, promotional materials, repeat customers, and the product itself. Once the salesperson obtains the necessary product information, s/he can develop a feature-benefit chart. A salesperson doesn't evaluate the competition's reactions or explain the product's apparent benefits before developing a feature-benefit chart for a product. A salesperson lists the product's features while s/he is developing the chart rather than before developing it.SOURCE: SE:109SOURCE: SE LAP 113—Find Features, Boost Benefits (Feature-Benefit Selling)

98. DNational. These brands are well established and may attract customers to the new e-business. Private brands are brand names owned by the seller, and the private brands of a new e-business would be unfamiliar to customers. Generics are products sold without a brand. A descriptive brand is a name that has fallen into everyday use so that the brand is used to refer to every product in the brand's product category (e.g., aspirin).SOURCE: SE:019SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 656-

659). New York: Glencoe/McGraw-Hill.

99. CConfirm orders. Businesses that sell online must be able to manage customers' accounts and process orders. One feature of online account management is the ability to confirm orders. Customers want to know that their online orders have been received. Therefore, businesses develop a method of acknowledging the order and providing a customer with a confirmation number. This method allows the business to track the order from the time it was placed until it is shipped, and gives the customer a way of checking on the status of the order. Designing web pages, locating browsers, and targeting markets are not features of online account management.SOURCE: SE:344SOURCE: Tiernan, B. (2000). e-tailing (pp. 217-219). Chicago: Dearborn Financial.


31100. A

Management team. The managers' skills are discussed in the management team section. The managers' capabilities (and track record) are often considered to be the single most important indicator of success. The company description accurately portrays the new company or venture, provides a history of the company, and shows the current business structure, among other things. The executive summary gives an overview of the entire document. In the market analysis, you see how the market has responded (or is likely to respond) to the new company or product/venture.SOURCE: SM:007SOURCE: SM LAP 1—Plan Now, Succeed Later

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