INMA_A01.QXD

Location of trading in marketplace

While traditional marketplaces have a physical location, Internet-based markets have no

physical presence – it is a virtual marketplace. Rayport and Sviokla (1996) used this dis-

tinction to coin the new term electronic marketspace. This has implications for the way

in which the relationships between the different actors in the marketplace occur.

The new electronic marketspace has many alternative virtual locations where an

organisation needs to position itself to communicate and sell to its customers. Thus, one

tactical marketing question is ‘What representation do we have on the Internet?’ A par-

ticular aspect of representationthat needs to be reviewed is the different types of

marketplace location. Berryman et al. (1998) have identified a simple framework for this.

They identify three key online locations for promotion of services and for performing e-

commerce transactions with customers (Figure 2.11). The three options are:

(a) Supplier-controlled sites (sell-side at supplier site, one supplier to many customers). This is

the main web site of the company and is where the majority of transactions take

place. Most e-tailers such as Amazon (www.amazon.com) or Dell (www.dell.com) fall

into this category.

(b)Buyer-controlled sites (buy-side at buyer site, many suppliers to one customer). These are

intermediaries that have been set up so that it is the buyer that initiates the market-

making. This can occur through procurement posting where a purchaser specifies what

they wish to purchase, it is sent by e-mail to suppliers registered on the system and

MARKETPLACE

Electronic
marketspace
A virtual marketplace
such as the Internet in
which no direct contact
occurs between buyers
and sellers.

Representation
The locations on the
Internet where an
organisation is located
for promoting or selling
its services.

Figure 2.11Different types of online trading location

Sell-side @ supplier site

One-to-many

(a)

(b)

(c)

Buy-side @ buyer site

Many-to-one

Trade via

supplier’s

web site

Many-to-many

Neutral exchanges

Key

Supplier Customer

Trade via

intermediary

web site

Trade via

buyer’s

web site