Chapter 11 - Marketing Strategies for a Digitally Networked World

Chapter 11
Marketing Strategies for a Digitally Networked World

Multiple Choice Questions

 
1. When people see something they like on the web or on their mobile phones, they share it
with others. This illustrates the basic concept of:
A. collaborative filtering.
B. positive network effect.
C. really simple syndication.
D. viral marketing.
Answer: d
Level of Difficulty: Easy
Page: 282

2. Tinker Inc. is a firm that provides its search engine technology to many branded search
engine sites. Which of the following roles does Tinker Inc. play?
A. Originator
B. Contactor
C. Distributor
D. Optimizer
Answer: a
Level of Difficulty: Medium
Page: 283 

3. _____ involves the sale of the same good—typically an informational good—to many
customers, who then combine it with information from other sources and distribute it. 
A. Aggregation
B. Syndication
C. Customization
D. Subscription
Answer: b 
Level of Difficulty: Easy
Page: 283

4. In e-commerce business models, a(n) _____ refers to a website that provides news articles
in electronic form and delivers them to other sites, each of which appeals to a different target
audience.
A. originator
B. syndicator
C. contractor
D. optimizer
Answer: b
Level of Difficulty: Easy
Page: 283

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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
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Chapter 11 - Marketing Strategies for a Digitally Networked World

5. The characteristic of a new product becoming more valuable with an increase in the
number of users within informational networks is referred to as _____.
A. network externality
B. increasing returns to scale
C. benchmarking
D. disintermediation
Answer: a 
Level of Difficulty: Easy
Page: 284

6. Collaborative filtering:
A. enables firms to compare a consumer's past purchase to recommend a personalized newer
purchase options.
B. enables firms to identify formal decision rules in the way consumers behave.
C. allows users to specify the nature of what is offered to them and is user-driven rather than
marketer-driven.
D. allows firms to conduct an interactive, online survey with potential target consumers about
their tastes.
Answer: a
Level of Difficulty: Hard
Page: 285 

7. _____ techniques, which are user-driven instead of marketer-driven, allow customers to

specify the nature of what is offered to them.
A. Rules-based personalization
B. Mass-customization
C. Collaborative filtering
D. Mass-media
Answer: b
Level of Difficulty: Easy
Page: 285

8. Quickbeats.com is an online music seller that allows customers to order personalized CDs
that contain only the songs chosen by the customers. Which of the following personalization
techniques does Quickbeats use?
A. Collaborative filtering
B. Rules-based personalization
C. Mass-customization
D. Disintermediation
Answer: c
Level of Difficulty: Medium
Page: 285

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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Marketing Strategies for a Digitally Networked World

9. The Internet makes it possible for marketers to reach customers directly, without the
expense or complication of distribution channels. This phenomenon is known as _____.
A. disintermediation
B. customization
C. network externality
D. really simple syndication
Answer: a
Level of Difficulty: Easy
Page: 286
 
10. Flick Software lets its customers download its products directly from its website. Online
support is also available round the clock, creating great value to customers everywhere. This
illustrates that: 
A. there is a negative network effect.
B. there are decreasing returns to scale.
C. rules-based personalization has been implemented.
D. a global reach exists for these services.
Answer: d
Level of Difficulty: Easy
Page: 287

11. According to the first-mover advantage, success of a firm depends on being the first to:
A. provide alternatives to an established product.
B. establish a significant presence in each market niche.
C. outsource labor in order to cut production costs.
D. launch a frontal attack of competitors to gain market share.
Answer: b
Level of Difficulty: Easy
Page: 289

12. Which of the following is true of firms with a first-mover advantage? 

A. The first-mover advantage is the best technique for building a great company.
B. First movers always need to use a skimming strategy to be successful.
C. All first movers capitalize on their potential advantages.
D. First movers must continue to innovate to maintain their differential advantage.
Answer: d
Level of Difficulty: Medium
Page: 289
 
13. In which of the following stages of customer experience process does the direction of cash
flow occur from customer to producer?
A. Customer insight
B. Product delivery
C. Production promotion, customer acquisition, and brand building
D. Product return or disposal

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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Marketing Strategies for a Digitally Networked World

Answer: b
Level of Difficulty: Easy
Page: 290 

14. In which stage of the consumer experience process does cash flow from the producer to
the consumer? 
A. Product delivery
B. Product return or disposal
C. Customer support and service
D. Customer insight
Answer: b
Level of Difficulty: Easy
Page: 290
 
15. Which of the following is the first stage of the customer experience process?
A. Transaction
B. Production promotion, customer acquisition, and brand building
C. Customer insight
D. Customer support and service
Answer: c
Level of Difficulty: Easy
Page: 290
 
16. In which of the following stages of the customer experience process does information
flow from the producer to the customer?
A. Customer insight
B. Product delivery
C. Product return or disposal
D. Production promotion, customer acquisition, and brand building
Answer: d
Level of Difficulty: Easy
Page: 290

17. In which stage of the consumer experience process is information about price, terms,
delivery, warranty, etc. shared between both the producer and the consumer? 
A. Customer insight
B. Product disposal
C. Promotion and brand building
D. Transaction
Answer: d
Level of Difficulty: Easy
Page: 291 

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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Marketing Strategies for a Digitally Networked World

18. If the customer likes an offering, a(n) _____ ensues, requiring that information about
pricing, terms, delivery, and so on flows to the customer, and cash—either now or upon
delivery—flows the other way.
A. transaction
B. disintermediation
C. syndication
D. aggregation
Answer: a
Level of Difficulty: Easy
Page: 291

19. In which of the following stages of the customer experience process do firms obtain data
from social networking sites and instant messaging?
A. Product return or disposal
B. Customer insight
C. Transaction
D. Customer support and service
Answer: b
Level of Difficulty: Medium
Page: 291-292
 
20. Which controversial system gauges a customer's desire to buy, measures his means, and
sets the price accordingly? 
A. Dynamic pricing
B. Price pooling
C. Price skimming
D. Hedonic pricing
Answer: a
Level of Difficulty: Easy
Page: 294

21. _____ involves companies carefully considering which burdens they can remove from the
customer, using digital technologies, and which customers can perform, assessing costs and
benefits to both parties. 
A. Benchmarking
B. Paid inclusion
C. Coproduction
D. Affiliate schemes
Answer: c
Level of Difficulty: Medium
Page: 296

Essay Questions
 

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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Marketing Strategies for a Digitally Networked World

22. What is syndication of information? List the types of syndication and explain briefly how
syndication of information helps marketers. 
Answer: Syndication involves the sale of the same good—typically an informational good—
to many customers, who may then combine it with information from other sources and
distribute it. The types of syndication include the originator, syndicator, and the distributor.
There are numerous ways in which syndication of information helps in the new-economy.
Since syndication delivers informational goods, rather than tangible goods, a company can
syndicate the same informational goods or services to an almost infinite number of customers
with little incremental cost. The syndication process can be automated and digitized, enabling
syndicated networks to be created, expanded, and flexibly adapted far more quickly than
would be possible in the physical world. Syndication via the Internet—and via mobile phones
or other devices—opens up endless opportunities for marketers. It replaces scarcity with
abundance. Information can be replicated an infinite number of times and combined and
recombined in an infinite number of ways. It can be distributed everywhere, all at once, and
be available all the time.
Level of Difficulty: Medium
Page: 283-284 

23. Discuss the use of mass-customization techniques in customizing market offerings. 

Answer: Mass-customization techniques, which are user-driven instead of marketer-driven,
allow customers to specify the nature of what is offered to them, from T-shirts to coffee mugs
and more. Several office supply firms offer corporate users the ability to create customized
office supply catalogs tailored to their company. Such catalogs simplify ordering procedures,
save time and money in the purchasing department, and help control expenses by offering to
perhaps far-flung employees only what the purchasing department has approved in advance.
Similarly, some online music sellers offer consumers the opportunity to order customized
CDs consisting of only the songs the customer chooses. In today’s highly competitive
markets, personalization and customization can help build customer loyalty and make it less
likely that customers will switch to other suppliers.
Level of Difficulty: Medium
Page: 285-286

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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Marketing Strategies for a Digitally Networked World

24. How can entrepreneurs better serve the digitally networked markets of tomorrow?
Answer: Would-be internet or social networking entrepreneurs should consider the various
ways in which revenue can be generated on the web or in other settings such as mobile
phones. Unless someone, a business or a consumer, is eventually willing to fork over money
for what a new business offers, its chances for success lie somewhere between slim and none.
Thus, understanding one’s revenue model and being willing to change it as market and
technological conditions warrant are essential.
Next, such entrepreneurs must ask not what can I sell but what do today’s and tomorrow’s
customers need, and how and where might they want to consume what I have to offer?
Finally, would-be entrepreneurs must realize that barriers to entry are incredibly low in this
new world. For everyone who has the next latest and greatest web-based or social networking
idea, there are dozens of other prospective entrepreneurs likely to be exploring similar ideas
concurrently. It’s not really the ideas that count. What matters is the team that will execute an
idea to deliver the performance and value that customers, whether businesses or consumers, or
even potential acquirers of the nascent business want and will pay for.
Level of Difficulty: Medium
Page: 301

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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.