• The exchange process allows the parties to assess the relative trade-offs they must make to satisfy their respective needs and wants.
• Individuals on both sides attempt to maximize rewards and minimize costs in their transactions so as to obtain the most profitable outcomes. Ideally, all parties achieve a satisfactory level of reward.
• Two of the key questions that a marketer needs to answer relative to buyer behavior are:
1. How do potential buyers go about making purchase decisions?
2. What factors influence their decision process and in what way?
• The exchange process extends into relationship marketing.
Some types of exchanges:
1) RestrictedExchanges: Simple or “restricted” exchanges are those in which there are only two parties to the exchange. Restricted exchanges are one-on-one relationships, so both parties must receive approximately equal utility. For example, if the person you buy coffee from is rude to you, you receive less utility from the exchange because you feel dissatisfied. This decreases the chances that you will buy coffee from the same person again.
2) GeneralizedExchanges: A generalized exchange involves at least three parties, and each party gives utility to one participant, but receives utility from a different participant. For example, if a woman calls in an order for lunch to be delivered and pays with a credit card over the
phone, and the restaurant employs a delivery driver to bring the food, then the woman gives utility to the restaurant, but receives utility from the driver.
3) ComplexExchanges: A complex exchange involves networks of participants who both give and receive in more than one relationship with each other. For example, a car manufacturer hires an advertising agency, which places an ad on a TV show, which provides entertainment to its viewers, some of whom will see the ad, then buy the car from a dealer, which buys its cars from the manufacturer. The manufacturer, ad agency, TV station, consumer and dealer are all involved in a complex network of marketing exchanges with each other, and all of them receive utility from the relationship.
Also some examples to help understand:
• You use your Android or iPhone to download an app and you pay for it using PayPal. Again you have gone through and completed an exchange
• You see a newspaper advertisement asking you to donate blood and you return a coupon to become a blood donor.
• You watch the news on TV and listen to the views of a political candidate, and on polling day you vote for that person.