Concept of Marketing as an Exchange

The Concept of Marketing as an Exchange
The concept of exchange, according to most marketing academics and practitioners,
is central to our understanding of marketing. For an exchange to take place there
must be two or more parties, each of whom can offer something of value to the
other and is prepared to enter freely into the exchange process, a transaction. It is
possible to identify two main forms of exchange: market (or transactional) exchanges and relational (or collaborative) exchanges.
Market exchanges (Bagozzi, 1978; Houston and Gassenheimer, 1987) are transactions that occur independently of any previous or subsequent exchanges. They have
a short-term orientation and are motivated primarily by self-interest. When a
consumer buys a bag of Walkers Crisps, a brand they do not buy regularly, then a
market exchange can be identified. In contrast to this, relational exchanges
(Dwyer et al., 1987) have a longer-term orientation and develop between parties who
wish to build long-term supportive relationships. So, when a consumer buys
Walkers Crisps on a regular basis, and even buys the same flavour on a majority of
purchase occasions, relational exchanges are considered to be taking place.
These two types of exchange represent the extremes in a spectrum of exchange transactions. In industrial societies market exchanges have tended to
dominate commercial transactions, although recently there has been a substantial
movement towards relational exchanges. In other words a mixture of exchanges
occurs, and each organisation has a portfolio of differing types of exchange that it
maintains with different customers, suppliers and other stakeholders. Communication is an essential element, similar to an oil, that lubricates these exchanges,
enabling them to function. However, to enable these different exchanges to
function properly, different types of communication are necessary.
Relational exchanges form the basis of the ideas represented in relationship marketing. Many organisations use relationship marketing principles, manifest in the
form of customer relationship marketing or loyalty marketing programmes. This
text is developed on relationship marketing principles, and marketing communica-
Module 1 / Introduction to Marketing Communications
1/4 Edinburgh Business School Marketing Communications
tions are considered to be a means by which long-term relationships among
organisations, and between organisations and consumers, are developed.
1.3 The Role of Communication in Exchange Transactions
Bowersox and Morash (1989) demonstrated how marketing flows, including the
information flow, can be represented as a network whose sole purpose is the
satisfaction of customer needs and wants. Communication plays an important role
in these exchange networks. At a basic level, communication can assume one of
four main roles:
1. It can inform and make potential customers aware of an organisation’s offering.
2. Communication may attempt to persuade current and potential customers of
the desirability of entering into an exchange relationship.
3. Communication can also be used to reinforce experiences. This may take the
form of reminding people of a need they might have, or of reminding them of
the benefits of past transactions with a view to convincing them that they should
enter into a similar exchange. In addition, it is possible to provide reassurance
or comfort either immediately prior to an exchange or, more commonly, postpurchase. This is important, as it helps to retain current customers and improve
profitability. This approach to business is much more cost-effective than constantly striving to lure new customers.
4. Marketing communications can act as a differentiator, particularly in
markets where there is little to separate competing products and brands.
Mineral water products, such as Perrier and Highland Spring, are largely similar:
it is the communications surrounding the products that have created various
brand images, enabling consumers to make purchasing decisions. In these cases
the images created by marketing communications disassociate one brand from
another and position them so that consumers’ purchasing confidence and positive attitudes are developed.