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Exchange, Transactions and Relationships

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Marketing occurs when people decide to satisfy needs and wants throughexchange. 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 favour. People do 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 offer the other. Each party must also 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, at 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 choices or possibilities.

Whereas exchange is the core concept of marketing, a transaction is marketing’s unit of measurement. A transaction consists of a trading of values
between two parties. In a transaction, we must be able to say that one party gives X to another party and gets Fin return. For example, you pay a retailer £300 fora television set or the hotel £90 a night for a room. 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 neighbour’s second-hand television set.



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