Exchange, Transactions and Relationships:

The fact that people have needs and wants and can place value and utility on them does not fully explain marketing. Marketing emerges when people decide to satisfy needs and wants through exchange. Exchange is the act of obtaining a desired product from someone by offering something in return. For exchange to take place the following must exist:

            (a)         two parties

            (b)        each party has something that might be of value to the other

            (c)         each party can communicate and deliver

            (d)        each party is free to accept or reject the offer

            (e)         each party feels it's desirable to deal with the other party.

Whether the exchange will take place or not will depend on whether the parties can agree on the terms of exchange. If they agree then a transaction takes place i.e. trade of value between the two parties. So transactions are the basic units of exchange. A transaction can either be a monetary transaction or a barter transaction.

Smart marketers try to build long-term trusting, win-win relationships with customers, distributors, dealers and suppliers. This way a company builds a marketing network of solid dependable relationships between itself and other actors in the market place.