Tuesday, November 10, 2009

The exchange process

The exchange process is the process by which two or more parties give something of value to each other to satisfy the perceived needs. The marketer (a company like Procter and Gamble) offers goods and services desired by the market (the pool of potential customers). In return, the market (the customer) gives back something of value to the marketer, generally money. Both ends receive something of value in the exchange process. The marketer makes money and the customer receives goods, services, or ideas that satisfy their needs. The exchange process is the origin of marketing. The exchange process creates utility.
For an exchange to occur:
-Both parties must have something of value to exchange
-Both parties need to be able to communicate (Procter and Gamble (P&G) must have money to buy advertising on TV/radio/Internet)
-Both parties must be able to exchange (the toothpaste (in some cases) must be approved by the FDA; the customer must have the money to buy it, and have access to a retail store where the product is sold)
-Both parties must want to exchange
-At least 2 people are needed for an exchange to occur