As with all definitions, AMA’s 2004 definition of marketing can be critiqued for various reasons, but the conspicuous absence of “exchange” is not one of them. They compared market share to financial performance, and found that small, niche-market specialists and large, full-line generalists were those who performed best when holding a large market share.

However, pure make or buy decisions, which lead to discrete exchanges, are rare. Reinartz, Werner J. and V. Kumar (2003), “The Impact of Customer Relationship Characteristics on Profitable Lifetime Duration,” Journal of Marketing, 67 (January), 77–99. Barns, eds. [2], The rule of three as put forward by Sheth and Sisodia in 2002 states that in a mature market, there will normally be three major competitors and several others, who only succeed if they are able to operate in a niche market.

For example, Dell not only has an efficient supply chain process in place for various models (supplier) but also makes customer credit avail-able through various options (financier), builds to order, and provides extended warranties/maintenance contracts (producer/customer support/service provider). For example, the recent trend in both the banking and the airline industries to charge for keeping the account or for meals and beverages is bound to provoke consumer backlash. Chicago: American Marketing Association, 431–47. It is simply assumed that all agents try to maximize their own utility within social, legal, and cognitive constraints. This drive for value creation through differential advantage fills the void in the structural holes between and within producer and consumer networks that do not interact with each other (Alderson 1965, 2006; Burt 1992). We contend that this framework is limiting for the conceptualization of marketing. Armonk, NY: M.E. In this world, consumers complain, they are not informed, they are a hazard to themselves, and they are potential problems to the firm. At least a buyer and a seller must exist before a market exchange can occur.
Similarly, both Google and eBay have become corporate giants in a short time by focusing on value in information and value in possession, respectively, in addition to value in exchange. New York: John Wiley & Sons. “Cooperation is as prevalent in economic activity as competition” (Alderson 1965, p. 239). Consider word-of- mouth campaigns before a movie is launched, movie reviews by viewers, and fan clubs and Web sites devoted to the movie. Lusch and Vargo (2006) describe the virtuous shift from value in exchange to value in use. Success of the value cocreation process relies heavily on customers’ efforts and involvement. It could also be argued that marketing is at least partially responsible for converting ongoing short-term debt into a socially accept-able phenomenon in the form of credit cards (Frenzen, Hirsch, and Zerillo 1994). Armonk, NY: M.E. Similarly, cocreation of values enables, in an inclusive way, other stakeholders, such as suppliers, investors, community, and governments, to con-tribute in value creation. Armonk, NY: M.E. The proponents of the exchange paradigm seem to agree that “[e]xchange is not an end in itself” (Houston and Gassenheimer 1987, p. 10) and that “end is need satisfaction” (Houston, Gassenheimer, and Maskulka 1992, p. 131). Edmund Jerome McCarthy’s 4 P’s of marketing (The original marketing mix) (1960) Created by Jerome McCarthy in 1960, the marketing mix is a classic tool to help plan what to offer and how to offer it to the customers. We believe that these paradigms are potentially commensurable, and plurality can be beneficial for theory construction (Lewis and Grimes 1999). For example, Jaworski and Kohli (2006) suggest that the notion of value cocreation should be actively extended (beyond self-service) to uncover customer needs and wants (i.e., voice of the customer), Lambert and García-Dastugue (2006) point out the benefits of value cocreation for the supply chain process, and Flint and Mentzer (2006) and Kalaignanam and Varadarajan (2006) argue for its benefits for an integrated value chain. and Venkat Ramaswamy (2004), The Future of Competition: Co-creating Unique Value with Customers. Armonk, NY: M.E. We expect that the value creation paradigm will accelerate the study and practice of mutual interest for differential advantage. The roles of institutions and processes, as well as marketing’s impact on society, are clearly acknowledged. A connection is made when two people are officers, directors, or otherwise associated with the same company. ———, ———, and James M. Maskulka (1992), Marketing Exchange Transactions and Relationships. Another notable difference is a managerial viewpoint in neglect of the broad impact of marketing on society. Data inaccuracies may exist. However, the primary focus within the exchange paradigm has been on value in exchange (between the buyers and sellers) at the cost of ignoring and/ or deemphasizing other types of value created (between producers and consumers).

When this is accomplished, we envision that value cocreation will assume a central role in the next major revision of AMA’s marketing definition. Armonk, NY: M.E. Burt, Ronald S. (1992), Structural Holes: The Social Structure of Competition. Notably, possession utility has become less important in an increasingly services-based economy, in which customers pay for usage and not for ownership. The Internet revolution has actually produced new intermediaries, such as eBay and Amazon, to fill these structural holes between producers and consumers. Sharpe, 196–207. Although this stance meshes with the exchange paradigm, which is driven by self-interest (win–loss), value creation is inherently about mutual interest (win–win). On the basis of the importance, prevalence, and unique nature of network orga-nizations, Achrol and Kotler (1999, p. 162) suggest that “a paradigm shift for marketing may not be far over the horizon.” Arguably, marketing is now amidst a paradigm shift from exchange (value in exchange) toward value cocreation (value for all stakeholders), with an intermediate iteration at value creation (value in use and relationship marketing). Value cocreation should be viewed as a continuum from a pure transaction in which the consumer can be entirely passive (e.g., movies) to a process in which most value is cocreated (e.g., Wikipedia). As a reviewer argued, despite its success, Wal-Mart does not appear to be about value cocreation. Frenzen, Jonathan, Paul M. Hirsch, and Philip C. Zerillo (1994), “Consumption, Preferences, and Changing Lifestyles,” in The Handbook of Economic Sociology, Neil J. Smelser and Richard Swedberg, eds. In the new definition, a focus on creating and delivering value through customer relationships permeates over creating satisfactory exchanges.

However, the first-ranked player may 'steal' ideas from the third-ranked player.
Alderson, Wroe (1957), Marketing Behavior and Executive Action. Please see Wikipedia's template documentation for further citation fields that may be required. Grimes (1999), “Metatriangulation: Building Theory from Multiple Paradigms,” Academy of Management Review, 24 (4), 672–90. A consumer’s ability to evaluate his or her inter and intra organizational options (alternative satisfactory out-comes) is rather limited because of high asymmetry of information between agents within the exchange paradigm.

For example, in the typical treatment of a patient, the doctor is the selector (through prescription), the insurance company and the employer are the payers, and the consumer (patient) is the user of medical products and services. Most impractical regulations and penalties have been enacted in a caveat emptor world to protect the weak: consumers. For example, a producer network in China needs a distributor net-work in Hong Kong to serve U.S. consumer networks.

Levy (1969), “Broadening the Concept of Marketing,” Journal of Marketing, 33 (January), 10–15. Howard and Sheth (1969) then extended Howard’s earlier work by defining the construct inhibitors as non-internalized forces that impede buyers’ preferences. Marketing exchanges are also mostly mixed with both utilitarian (economic) and intangible (symbolic) aspects.

This can be the difference between getting a new faucet installed (e.g., $200 and time costs) and self-fixing it in minutes for $2.50 (Marcus, Blank, and Andelman 2001). Previous President for Molly Specialties Inc. Their findings provided empirical support for the “Rule of Three”. Most marketing exchanges are generalized (at least three actors benefiting one another only indirectly) and complex (at least three actors with at least one direct exchange and a web of relationships) rather than simply restricted exchanges (i.e., two-party reciprocal) (Bagozzi 1975). Paradigm shifts that transform and shape a scientific discipline do not occur frequently and are not welcomed unanimously (Kuhn 1962). Thus, the exchange paradigm has been questioned by mar-keting scholars with respect to its ability to explain the relational engagement of firms (e.g., Grönroos 1990; Sheth, Gardner, and Garrett 1988; Sheth and Parvatiyar 1995; Webster 1992). Ferrell, Stephen W. Brown, and Charles W. Lamb, eds.

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