Exchange:
Marketing emerges when people decide to satisfy needs and wants through exchange. Exchange is one of four ways people can obtain products.
• The first way is self-production . People can relieve hunger through hunting , fishing , or fruit gathering . They need not interact with anyone else. In this case , there is no market and no marketing.
• The second way is coercion. Hungry people can wrest or steal food from others. No benefit is offered to the others except that of not being harmed.
• The third way is begging. Hungry people can approach others and beg for food. They have nothing tangible to offer except gratitude.
• The fourth way is exchange. Hungry people can approach others and offer a resource in exchange , such as money , another good , or a service.
Marketing arises from this last approach to acquiring products. Exchange is the act of obtaining a desired product from someone by offering something in return. For exchange to take place , five conditions must be satisfied:
1. There are at least two parties.
2. Each party has something that might be of value to the other party.
3. Each party is capable of communication and delivery.
4. Each party is free to accept or reject the offer.
5. Each party believes it is appropriate or desirable to deal with the other party.
If these conditions exist , there is a potential for exchange. Whether exchange actually takes place depends upon whether the two parties can agree on terms of exchange that will leave them both better off (or at least not worse off) than before the exchange . This is the sense in which exchange is described as a value-creating process ; that is , exchange normally leaves both parties better off than before the exchange.
Exchange must be seen as a process rather than as an event. Two parties are said to be engaged in exchange if they are negotiating and moving toward an agreement . If an agreement is reached, it means that a transaction has taken place. Transactions are the basic unit of exchange. A transaction consists of a trade of values between two parties. It is possible to say : A gave X to B and received Y in return. A gave Rs.14000/- to B and obtained a television set. This is a classic monetary transaction. Transactions , however , do not require money as one of the traded values. A barter transaction would consist of A giving a refrigerator to B in return for a television set. A barter transaction can also consists of the trading of services instead of goods , as when a lawyer writes a will for a physician in return for a medical examination.
To conduct sucessful exchanges , the marketer analyzes what each party expects to give and get. Simple exchange situations can be mapped by showing the two actors and the wants and offers flowing between them. Suppose the process of trying to arrive at mutually agreeable terms is called negotiation. Negotiation leads to either mutually acceptable terms or a decision not to transact.
Transaction marketing is part of a larger idea, that of relationship marketing. Smart marketers try to uild up long-term , trusting, "win-win" relationships with valued customeres , distributors , dealers , and suppliers . That is accomplished by promising and delivering high quality goods, good service, and fair prices to the other parties over time. It is accomplished by building strong economic,technical,and social ties with the other parties. Relationship marketing cuts down on transaction costs and time ;in the best cases , transactions move from being negotiated each time to being routinized.
The ultimate outcome of relationship marketing is the building of a unique company asset called a marketing network. A marketing network consists of the company and its suppliers, distributors , and customers with which it has built solid, dependable business relationships. Increasingly, marketing is shifting from trying to maximize the profit on each individual transaction to maximizing mutually beneficial relationships with other parties. The operating principle is to build good relationships , and profitable transactions will follow.