E Commerce Questions and Answers

Q2. Explain, how the internet helps marketers deal with the issue of “place”.

  In case of digital products (such as information, news, software, music, video, and e-books) can be delivered right after customers purchase it through the Internet. Furthermore, Internet is a best tool for the companies selling products that must be shipped to track shipment and control inventory.  

Q4. List and briefly explain three different factors that should be considered in defining the “product” element of a marketing strategy.

Quality : Characteristics of good which determine its desirability and which can be controlled by a manufacturer to meet certain basic requirements.

Design : It is detailed specification of product and it determines functionality of product.

Features : it is one of the distinguishing characteristics of a product that helps boost its appeal to potential buyers and highlights the usefulness of the product.

Q10. In a paragraph of two, define conversion cost and explain briefly why companies need to calculate it.

Conversion cost is that the total amount of money that a site spends to entice website visitor to make a purchase, sign up for a subscription, or register. Conversion cost includes acquisition cost which is the total amount of money that a site spends to draw one visitor to the site. So conversion cost is greater than the profit earned on the average sale. So the web business have to make the customer to return to the site and buy again.

Measuring Conversion cost is important to evaluate its advertising and promotion strategy. Conversion cost can be compared by the profit generated by the average first-time sale and retention costs. By doing so, it is much easier to determine whether a customer has been converted or retained.

Q11. Write a paragraph in which you briefly outline the reason for the decline in the use of banner advertising online.

There are web site visitors who are influenced by banner ads that they didn’t click. So advertisers hesitate to pay for ads that don’t produce directly measurable results.

Q14. In about 10 words, explain what online businesses can learn from data mining (or analytical processing) activities.

Analyze customer’s information of purchasing pattern and suggest customer-oriented products.