Marketing as exchange

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Marketing is a word which most of us are familiar with, and it is also one of the most common phenomena in the society. When we think about marketing, we will associate it with exchange automatically. Richard P. Bagozzi, who has some important theories on marketing, classifies different exchange activities into three main types according to the relationships between different participators; they are Restricted Exchange, Generalized Exchange and Complex Exchange.

(Bagozzi 1975) In the first type of exchange, two parties are involved directly, and both of them benefit from each other; in the second exchange, no less than three parties participate, and they do not benefit from one another directly but indirectly; in the last exchange, at least three parties are involved, each party benefits from at least one other party directly and all parties construct a interconnection web together. We just take the Vodafone Company’s new policy for instance and see how the exchange takes place between participators.

First of all, we can see there are six parties that are involved into this exchange either directly or indirectly, they are Vodafone Company, ATM network Moneybox (marketing group Ambient), Link Interchange Network, Creation Financial Services, Vodafone’s customers and Duet cardholders. Then we can see obviously Vodafone Company, ATM network Moneybox, Link Interchange and Vodafone’s customers are involved into an exchange activity.

However, they do not benefit from each other directly but indirectly. Vodafone company has a deal with ATM network Moneybox and therefore Vodafone will pay ATM to get the service; ATM network Moneybox has secured a contract with Link to provide the e-top-up service at over 2100 cash machine; Link provides Vodafone’s customers with this e-top-up service at Link cash machines, and finally Vodafone’s customers can use this new service to top up their mobile phones bringing Vodafone Company benefit.

So the exchange activity among them four parties is Generalized Exchange and can be described diagrammatically as Vodafone Company==;ATM Network Moneybox==;Link Interchange Network==;Vodafone’s customers==>Vodafone Company. Apart from that exchange mentioned above, there is another exchange activity among Creation Financial Services, Link Interchange Network and Duet cardholders.

Creation Financial Services, which issues Duet card, has secured a contract with Link by providing Link with certain benefit, and Duet cardholders are allowed to use this e-top-up service via Link cash machines, logically, as a result of this new e-top-up service, the Duet cardholders will feel more satisfied with the Duet card service (Creation Financial Services) and even more people might want to gain Duet card, thus Creation Financial Services will benefit from Duet cardholders directly.

Diagram Creation Financial Services==>Link Interchange Network==>Duet Cardholders==> Creation Financial Services can show the exchange activity among these three parties. So this exchange is also Generalized Exchange. It cannot be denied that some retailers, which Creation Financial Services issues Duet Card for, will also benefit from the exchange indirectly, as there is a new service for this card and more people might choose this card service.

Generalized Exchange also applies to the exchange among Orange Company, Abbey National bank and Orange Company’s customers, and the same diagram Orange Company==;Abbey National Bank==;Orange Company’s customers==>Orange Company can describe the exchange among them. In the highly developed society and modern business world, exchange takes place everywhere and all the time. As everything in the world interacts, individuals and organisations are involved into exchange either directly or indirectly.

Complex exchanges, such as Generalized Exchange and Complex Exchange, can be found everywhere. Personally, I think they do have many positive effects on participators and society. However, they also have some considerable negative effects. As we can see, in those exchange examples mentioned above, many participators are involved either directly or indirectly. If any party of them goes wrong or even collapses, all other parties will be affected negatively either directly or indirectly, and vicious circle might be caused.

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