Exchange, Transactions, and Relationships in Marketing
“Exchange, Transactions, and Relationships in Marketing”
Marketing occurs when people decide to satisfy needs and wants through exchange. Exchange is the act of obtaining a desired object from someone by offering something in return. Exchange is only one of many ways people can obtain a desired object.
For example, hungry people can find food by hunting, fishing, or gathering fruit. They could beg for food or take food from someone else. Finally, they could offer money, another good, or a service in return for food.
As a means of satisfying needs, exchange has much in its favor. People don not have to prey on others or depend on donations. Nor must they possess the skills to produce every necessity for themselves. They can concentrate on making things they are good at making and trade them for needed items made by others. Thus, exchange allows a society to produce much more than it would with any alternative system.
Exchange is the core concept of marketing. For an exchange to take place, several conditions must be satisfied. Of course, at least two parties must participate, and each must have something of value to the other. Each party also must want to deal with the other party and each must be free to accept or reject the other’s offer. Finally, each party must be able to communicate and deliver.
These conditions simply make exchange possible. Whether exchange actually takes place depends on the parties coming to an agreement, if they agree, we must conclude that the act of exchange has left both of them better off, or a least not worse off. After all, each was free to reject or accept the offer. In this sense, exchange creates value just as production creates value. It gives people more consumption possibilities.
Whereas exchange is the core concept of marketing, a transaction is marketing’s unit of measurement. A transaction consists of a trade of values between two parties. In a transaction, we must be able to say that one party gives X to another party and gets Y in return. For example, you pay Sears $300 for a television set. This is a classic monetary transaction, but not all transactions involve money. In a barter transaction, you might trade your old refrigerator in return for a neighbor’s secondhand television set. A barter transaction also can involve services as well as goods—for example, when a lawyer writes a will for a doctor in return for a medical exam. A transaction involves at least two things of value, conditions that are agreed upon, a time of agreement, and place of agreement.
In the broadest sense, the marketer tries to bring about a response to some offer. The response may be more than simply “buying” or “trading” goods and services. A political candidate, for instance, wants a response called “votes,” a church wants “membership,” and a social-action group wants “idea acceptance.” Marketing consists of actions taken to obtain a desired response from a target audience toward same product, service, idea, or other object.
Transaction marketing is part of the larger ideal of relationship marketing. Smart marketers work at building long-term relationships with valued customers, distributors, dealers, and suppliers. They build strong economic and social ties by promising and consistently delivering high-quality products, goods, service, and fair prices. Increasingly, marketing is shifting from trying to maximize the profit on each individual transaction to maximizing mutually beneficial relationships with consumers and other parties. The operating assumption is: Build good relationships and profitable transactions will follow.
