Marketing Exchanges

Exchange is generally viewed as the core element of marketing. Exchange has been defined as the “transfer of something tangible or intangible, actual or symbolic, between two or more social actors. “ Thus, the basic purpose of marketing is to get individuals or organizations to transfer something of value (tangible or intangible, actual or symbolic) to each other. The most familiar type of exchange occurs when a customer exchanges money with a retail store for a product. Every time a customer pays a Papa John’s pizza delivery person and receives a pizza, a marketing exchange takes place.

Marketing exchanges are not confined to transactions of money for products. Businessses engage in barter where they exchange their goods and services of another firm. Nonprofit organizations, colleges and universities, politicians, and many other “social actors” are also involved in exchanges. Volunteers and contributors to nonprofit organizations, for example, exchange their time and money for the satisfaction derived from helping a good cause. Or consider the tuition that students pay a university or college in exchange for the education they receive. Even politics involves exchanges, with people trading their votes for the promise of representation from a political candidate.

The major objective of marketing exchanges is to satisfy the needs of the individuals and organizations involved. For an exchange to take place, each party must be willing to give up something to get something. What each party gets must be as satisfying as what it gives up. If someone decides to buy a delivered pizza from Papa John’s, the pizza must be as important as the money exchanged to get it. Similarly, Papa John’s must think the money it receives from the customer is as important as the delivered pizza it exchanges.

Creating exchanges that satisfy customer needs requires that marketing strategies be developed and marketing activities performed. The process involves people in various marketing positions who determine what is to be done (they plan) and then do it (they execute). Some people in marketing positions are employed by the firm that produces the product and some by other organizations that specialize in specific marketing activities.

Comprehension questions:

1. How can “exchange” be defined?

2. What is the basic purpose of marketing?

3. What is the major objective of marketing exchanges?

4. What does the process of creating exchanges involve?