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Chapter 2 E-commerce fundamentals 67

own intermediary. A further example is Opodo (www.opodo.com) which has been set up by
nine European airlines including Air France, BA, KLM and Lufthansa. Such collaboration
would have been inconceivable just a short time ago.

Location of trading in the marketplace

While traditional marketplaces have a physical location, an Internet-based market has no
physical presence – it is a virtual marketplace. Rayport and Sviokla (1996) used this distinc-
Electronic tion to coin a new term: electronic marketplace. This has implications for the way in
marketplace which the relationships between the different actors in the marketplace occur.
A virtual marketplace The new electronic marketspace has many alternative virtual locations where an organization
such as the Internet in
which no direct contact needs to position itself to communicate and sell to its customers. Thus one tactical marketing
occurs between buyers question is: ‘What representation do we have on the Internet?’ One aspect of representation that
and sellers.
needs to be considered is the different types of marketplace location which indicate the balance
of power in a relationship. Berryman et al. (1998) identified a useful framework for this, identi-
fying three different types of location. Seller-controlled sites are the main home page of the
company and are e-commerce-enabled. Buyer-controlled sites are intermediaries which have
been set up so that it is the buyer who initiates the market-making. This can occur through pro-
curement posting where a purchaser specifies what they wish to purchase, it is sent by e-mail to
suppliers registered on the system and then offers are awaited. Aggregators involve a group of
purchasers combining to purchase a multiple order, thus reducing the purchase cost. Neutral
sites are independent evaluator intermediaries that enable price and product comparison.
The framework of Berryman et al. (1998) has been updated by McDonald and Wilson
(2002) who introduce two additional locations for purchase which are useful (Table 2.3).

Table 2.3 Different places for online representation

Place of purchase Examples of sites

A. Seller-controlled • Vendor sites, i.e. home site of organization selling products, e.g. www.dell.com
B. Seller-oriented • Intermediaries controlled by third parties to the seller such as distributors and agents,

e.g. Opodo (www.opodo.com) represents the main air carriers
C. Neutral • Intermediaries not controlled by buyer’s industry, e.g. EC21 (www.ec21.com)
• Product-specific search engines, e.g. CNET (www.computer.com)
• Comparison sites, e.g. MoneySupermarket (www.moneysupermarket.com)
• Auction space, e.g. eBay (www.ebay.com)
D. Buyer-oriented • Intermediaries controlled by buyers, e.g. Covisint used to represent the major motor
manufacturers (www.covisint.com) although they now don’t use a single marketplace,
but each manufacturer uses the technology to access its suppliers direct
• Purchasing agents and aggregators
E. Buyer-controlled • Web-site procurement posting on company’s own site, e.g. GE
• Trading Process Network (www.gxs.com)

Source: Adapted from McDonald and Wilson (2002)

A Seller-controlled sites are those that are the main site of the supplier company and are
e-commerce-enabled.
B Seller-oriented sites are controlled by third parties, but represent the seller rather than
providing a full range of options.