Marketing Exchange Relationships, Transactions, and Their Media

By Franklin S. Houston | Go to book overview
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The Marketing Taxonomy

Marketing is the study of potency variation achieved through exchange processes; exchange involves the transfer of value from one entity's assortment to another's assortment for the purpose of enhancing the potency of one's own assortment. We distinguish exchange from other ways we might shift resources among entities. Exchange assumes a bilateral or multilateral process in which each of the parties expects to receive and to give value. When we define exchange as being a transfer of value, we are not intending to include another behavior called "transfer," which involves the unilateral transfer of value.

Transfer is the giving or receiving of value with no expectation of value being passed in return. Transfer can be thought of as an internal process. That is, exchange takes place between entities and transfer takes place within an entity. Transfers are often intended to be shifts of value to enhance the potency of the entity and are worthy of study in and of themselves. A shift in resources within a family, such as a parent sending cash to a child away at school, would be a familial transfer.

Transfer then is reallocation within a unit or entity. As a discipline we have not studied why such transfers take place, nor have we studied when we would expect transfer and when we would expect some other form of behavior to satisfy needs. This would be similar to the more classic "make-buy" decision, but this assumes potency already exists in a useable form.

Transfer can be seen in a wide variety of entities. An organization such as IBM, the United States Postal Service, the Eagles football team, a fraternity or sorority, and a bridge club are all examples of entities and the transfer of potency could take place within any of these. We do think of these transfers as being distinct from marketing exchanges, however. They have different motives from exchange and they have different behaviors.

Notice that within a family we might have individuals, say a brother and sister, who pass their toys from one to the other as they grow older, and we recognize this as a transfer. We might have the same brother and sister negotiate between themselves, swapping household duties. Here we have exchange. The fact that the children do household chores is not an exchange relationship in this example, but the fact that the son is doing the daughter's chores and the daughter


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Marketing Exchange Relationships, Transactions, and Their Media


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