Dyadic Interaction: an Exchange Process

David T. Wilson, The Pennsylvania State University
[ to cite ]:
David T. Wilson (1976) ,"Dyadic Interaction: an Exchange Process", in NA - Advances in Consumer Research Volume 03, eds. Beverlee B. Anderson, Cincinnati, OH : Association for Consumer Research, Pages: 394-397.

Advances in Consumer Research Volume 3, 1976      Pages 394-397

DYADIC INTERACTION: AN EXCHANGE PROCESS

David T. Wilson, The Pennsylvania State University

Selling may be viewed as a process in which two individuals exchange items of value. In the most simple situation, the buyer receives a product and the seller receives money. In reality, it is likely that buyer and seller exchange attributes with both physical and psychological values.

This exchange concept will be expanded later, but first it is necessary to put it in a context. Exchange does not take place in a vacuum but as part of a buyer-seller interaction process. This paper presents a simpleminded view of this buyer-seller interaction process as background to the central theme of the paper -- dyadic interaction as an exchange process. Throughout the paper the focus has been on developing simple views on critical issues rather than mere elegant models and concepts that may encompass more of reality but provide less understanding.

THE DYADIC  PROCESS MODEL

This model is basically concerned with the development of a long-term buyer-seller relationship rather than "one-shot" selling situations. It begins with an initial meeting between the buyer and seller and moves through a number of stages which presumably take place over time and a number of meetings of the dyad. This does not preclude the adaptation of the model to single contact situations.

Figure 1 depicts the model. A strong similarity exists to the Lavidge Steiner (1961) and AIDA (Strong 1925) models. The duration of the stages overlap each other as a number of activities may be carried on simultaneously. The requirements of the basic stages must be met in order to move to the advanced stages of the model. The different stages are only to suggest that they are the focus of the major efforts of the dyad and the other stages receive less effort during the current stage. The model proposed here attempts to reflect the influence of some of the sales research conducted in recent years.

There are two basic assumptions underlying the model:

1. The buyer is attempting to secure a bundle of attributes, both tangible and psychological, from the seller. These attributes may be related to the product, to the company and to the salesman. To illustrate, the product may provide performance attributes that are highly valued by the buyer, the company provides general reputation attributes and the salesman may provide personal service and reliability attributes.

2. The buyer-seller relationship develops over a period of time. Examples of this type of relationship are numerous in organizational buying situations, personal estate planning, life insurance situations and in some retail situations where strong customer loyalties are developed.

In addition, it is recognized that in many organizational and family buying situations, a buying center exists that involves more than one individual. Once recognizing this buying center, it will be ignored for the sake of simplicity in developing the process model. The model can also be expanded to include goals of each individual at each stage and influences upon the individuals at each stage. These complications will also be ignored as complexity at this embryonic stage can be lethal.

SOURCE LEGITIMIZATION

The model assumes the buyer and seller come together in something akin to the Howard and Sheth (1969) extensive problem-solving situation. Monoky, Mathews and Wilson (1975) found that sources of information are differentially preferred as a function of the type of selling situation. The situations ranged from a new task to a rebuy situation. This data would suggest that the salesman's role shifts over time as the buying situation moves from the new task to the rebuy situation.

In the new task situation the salesperson needs to develop source credibility and legitimization. Unless this basic acceptability is developed, further communication is likely to become quite ineffective if not impossible.

Although the salesperson may be perceived on a number of dimensions, the dimensions of expert-non expert and similar-dissimilar have received the greatest attention in the literature.

Based on current studies, it seems likely that in this early stage of the sales process that the salesperson attribute of "expert" may dominate the attribute of "similarity." Woodside and Davenport (1974) in their study of an extensive problem-solving retail sales situation offer some support to this notion. Busch and Wilson (1975) in a simulated sales situation found expert attributes in salesmen to be quite powerful in achieving attitude and behavioral changes in buyers. Their study also concluded that the expert was more powerful than the referent in the early stage. It should be noted that both of these experimental situations were "one-shot" sales situations and as such there may be a bias toward the expert attribute. It seems reasonable that as the buyer-seller relationship matures, the attribute of similarity may take on more value.

The basic objective of this first stage is to establish the salesman as a legitimate and credible partner in the dyadic interaction process. It is likely that this process continues through the early interactions of the dyad.

INFORMATION EXCHANGE - PROBLEM IDENTIFICATION

This stage involves bounding the problem to be solved through a purchase. The amount and nature of the information exchange is likely a function of the relationship established in the previous stage. A salesperson perceived as an expert and similar is likely to be given more information quicker than other salespersons. All salespersons may get the standard type of information but the more favored salesperson may get additional data such as which attributes are important and who is the key decision maker in the buying center.

The salesperson attempts to establish the nature of the problem in order to be able to suggest an attribute package that will result in a sale. The salesperson is also concerned about positioning the attribute package with respect to competition and in developing a strong bargaining base.

ATTRIBUTE DELINEATION

In this stage, the dyad develops the bundle of attributes that will be exchanged. Many of the attributes will be explicitly discussed; for example, product features and credit terms, while other attributes may be implicitly determined. Olshavsky (1973) observed that the salesman clearly influenced attribute determination and evaluation. Again, this study is limited by its one-shot nature in a retail setting where the buyer may lack the buying expertise that is present in organizational purchasing. Nevertheless, the study does indicate that although both parties developed the attribute set, the salesman can have a major influence in the development of the attribute set through guidance and direction of the buyer.

It seems reasonable to expect the determinant attributes to shift over time. Attributes such as product quality, delivery, etc., may remain important but not determinant in how the dyad relationship is maintained. Interpersonal exchanges between the buyer and seller may become more important as the purchasing problem moves to the rebuy situation.

Also of importance is the nature of the product. If there are clear product differences they may be used to differentiate the various attribute packages. However, if substantial product differences do not exist, then intangible attributes may dominate.

ATTRIBUTE VALUE NEGOTIATION

The determining of the attribute set and the exchange rate of each attribute can be viewed as a bargaining process. Pennington (1968) p. 262, concluded "that bargaining behavior between customers and salespersons, although not overwhelming in frequency or volumes, exerts an important impact on ultimate purchase outcomes." He found that the greatest bargaining was "on the presentation of concession limits -- such as presentation of prices, delivery dates, product features -- by the salesman, and statements of desired price ranges, styles, and product features by the customers," (p. 257). These findings support the notion of bargaining the rate of exchange on attributes. The value of individual attributes may be subject to limited negotiation. The seller will likely attempt to increase the importance in the choice of his strong attributes while the buyer may attempt to suggest an increased importance of the seller's weaker attributes in hopes of gaining an increased level of other attributes. For example, the buyer may suggest that price is important when he really hopes to gain better credit terms. In other words, there may be a trading of the amount of each attribute that will make up the final package of attributes.

Wilson, Mathews and Monoky (1973) and Mathews, Wilson and Monoky (1972) found that perceived similarity improved cooperation in a simulated buyer-seller bargaining situation. A "prisoner's dilemma" game was used as the bargaining vehicle. They (1973) used an extended Fishbein attitude model and found that although attitude towards the act of cooperation was important, the normative component was influential for the similar subjects and not influential for the dissimilar subjects.

The similarity variable may be operational throughout the total process. Its power to influence behavior may be greatest at the bargaining stage.

RELATIONSHIP MAINTENANCE

In the final stage of the model, the dyad maintains and builds upon their relationships. New personal attributes of the relationship may develop which enables it to grow from a business relationship to a more personal business/ friendship relationship. A certain amount of implicit bargaining over exchange values may take place particularly if problems with performance attributes arises. From a salesperson's point of view, the maintenance of friendly accounts is much easier than the development of new accounts.

DYADIC INTERACTION: AN EXCHANGE PROCESS

The development of the process model seems a roundabout road to the focus of this paper which is examining dyadic seller behavior as an exchange process. It was necessary to establish the notion that this dyadic relationship goes through a number of stages during which a bundle of attributes valuable to the buyer is developed.

The basic premise of the concept of an exchange process derives from Homan's (1961, p. 7) contention that "elementary social behavior is the face-to-face contact between individuals, in which the reward each gets from the behavior of the other is relatively direct and immediate.'' He suggests that this exchange of interaction can yield a profit to both parties if you "give the other man behavior that is more valuable to him than it is costly to you and to get from him behavior that is more valuable to you than it is costly to him" (p. 62).

Homan's concept may be extrapolated to the buyer-seller dyad as the notion that each individual develops a bundle of attributes that can be exchanged and which have utility to him. The successful dyad exchanges these bundles of attributes at a profit. On one level, the salesman provides product and receives payment while on another level he may provide advice and receive esteem. The buyer receives product and gives payment. He also may receive this advice which helps him solve a purchasing problem and gives esteem as payment. The exchange of advice may not directly relate to the salesman's product.

Again to simplify the discussion, the linkage of the value of the attribute to the buyer or seller may depend upon the attribute to satisfy the needs of others within either the buyer's or seller's firms will be recognized and then ignored. The exploration of these linkages needs a paper in itself.

To illustrate the exchange concept, assume a purchasing situation in which the buyer must choose between the offerings of three salespersons. Each salesperson goes through the early stages of the process model of Figure 1; i.e., source legitimization, information exchange, and attribute delineation. The individual salesperson attempts to establish a set of attributes that have value to the buyer and if possible, are unique from his competitor's offerings. Hence, the buyer is confronted with three unique sets of attributes (Xnqj). The subscript j refers to the salesman, the subscript n refers to the attributes, and the subscript q refers to the level of attributes in the set. The buyer must select Xnq1, Xnq2, or Xnq3. It is assumed that each of these attribute sets have some cost to the buyer and that the buyer seeks to maximize his profit in the transaction, that is, the buyer seeks the maximum multi-attribute utility (MAU). The choice is now to select from the utility set that Unqj with the highest value. It is assumed that individual attributes can be positive or negative and that the summing of the attribute utility nets out to the "profit" of the relationship.

Profit in this situation is a nebulous concept but may be thought of as the netting out of positive attributes and negative attributes. For example, could price be a negative attribute. It is suspected that exploratory research may eliminate the need for the profit notion and that a summation of the values positive and negative attributes will be sufficient.

Recalling that the attribute sets contain product, company and salesman attributes it is then possible to examine the impact of the salesman upon the total value of the attribute package.

The exchange notion enters in that the salesman must allocate his time and effort over a number of buyers and he presumably seeks to maximize his total return by choosing to deal with those buyers who offer him a "profit." Therefore, the buyer must present a set of attributes to the salesmen, the principle one being the monetary value of the order. This concept may become even more relevant in this era of shortages and sellers' markets.

MEASUREMENT OF THE VALUE ATTRIBUTE SETS

There has been a considerable amount of research conducted on MAU models, both in the laboratory and in the field. Huber (1974a, 1974b) presents a useful summary of the state of the art. The attribute set in the selling dyad is likely to be much more complex than those that have been reported in the literature.

A general additive form of the multi-attribute utility model is

EQUATION

where bn is a measure of the relative importance of the attributes and can be represented on a 0 to 1.0 scale. U(Xnq) is the utility value of attribute Xn at the q level. It is suggested that since the attribute sets include salesman attributes which are unique to the individual, it might be useful at this early stage of development to describe the utility sets as U(Xnqj) where j refers to the salesmen. If in fact the attribute sets prove to be consistent across salesmen, then only the level of an attribute need be used. If uncertainty associated with the attributes is considered a subjective expected multi-attribute model (SEMAU) is created. Wilson and Busch (1973) in a test of the association between an attitude intention model and a SEU model found a high correlation between the predictions of the two models. Although the models are theoretically different, their robustness may allow them to approximate the same results.

Huber (1975) had similar results when he attempted to use different models to predict individual preferences on stimuli defined by physical characteristics. He suggests that the robustness of his models allows them to approximate preference surfaces in spite of theoretical invalidity," (p. 295).

The large literature on expectation models may provide some guidance in developing empirical tests of the MAU proposition.

CONCLUSIONS

This paper has attempted to describe one way of conceptualizing buyer-seller dyadic interaction. The focus has been on the changing relationship over time as the dyad goes through the stages of the selling process model. In particular the development of a bundle of attributes that has utility to the buyer and a similar bundle that has utility to the seller was examined as a basis for an exchange process.

The importance of individual attributes likely varies as a function of the stage of the relationship. Careful work needs to be done on the stages in which the attributes set is developed and values of the individual attributes are negotiated.

On the seller side insights might be gained by studying the MAU sets that a salesman perceives in his customer and prospect set. How does he assign his time? To what extent does he interact with buyers where he receives a "profit" or has the lowest cost? The exchange process, particularly involving non-product attributes in situations where product and price is relatively homogeneous, for example, the steel industry is worth study. Then, if the researcher is astute enough, it might be possible to describe and measure the psychological attributes that are operating.

Obviously, this whole paper is a beginning attempt to conceptualize a difficult process. It is likely that many changes will be made as empirical studies provide additional information. The task now ia to begin a series of studies that will help to clarify the area.

FIGURE 1

A DYADIC SALES PROCESS MODEL

REFERENCES

Paul Busch and David T. Wilson, "An Experimental Analysis of a Salesman's Expert and Referent Bases of Social Power in the Buyer-Seller Dyad," unpublished manuscript.

George C. Homans, Social Behavior: Its Elementary Forms. New York: Harcourt, Brace and World, Inc., 1961.

John A. Howard and Jagdish N. Sheth, The Theory of Buyer Behavior. New York: John Wiley, 1969.

George P. Huber, "Methods for Qualifying Subjective Probabilities and Multi-Attribute Utilities," Decision Sciences, Vol. 5, 1974.

George P. Huber, "Multi-Attribute Utility Models: A Review of Field and Field-Like Studies," Management Science, Vol. 20, No. 10 (June, 1974).

Joel Huber, "Predicting Preferences on Experimental Bundles of Attributes: A Comparison of Models," Journal of Marketing Research, Vol. XII, 290-7 (August, 1975).

Robert J. Lavidge and Gary A. Steiner, "A Model for Predictive Measurements of Advertising Effectiveness," Journal of Marketing, 61 (October, 1961).

H. Lee Mathews, David T. Wilson, and John F. Monoky, Jr., "Bargaining Behavior in a Buyer-Seller Dyad," Journal of Marketing Research, Vol. IX, 103-5, (February, 1972).

John F. Monoky, Jr., H. Lee Mathews, and David T. Wilson, "Information Source Preference by Industrial Buyers as a Function of the Buying Situation," Pennsylvania State University Working Series.

Richard W. Olshavsky, "Customer-Salesman Interaction in Appliance Retailing," Journal of Marketing Research, Vol. X, 208-12, (May, 1973).

Allan L. Pennington, "Customer-Salesman Bargaining Behavior in Retail Transactions," Journal of Marketing Research, Vol. V, 255-62, (August, 1968).

E. K. Strong, The Psychology of Selling. New York: McGraw-Hill Co., 1925.

David T. Wilson and Paul Busch, "A Theoretically Integrative Approach to the Study of Decision Making: An Empirical Analysis," Proceedings of the Fifth Annual Conference, American Institute for Decision Sciences, November, 1973.

David T. Wilson, H. Lee Mathews, and John F. Monoky, Jr., "Attitude as a Predictor of Behavior in a Buyer-Seller Bargaining Situation: An Experimental Approach," The Proceedings of the American Marketing Association, August, 1973.

Arch G. Woodside and J. William Davenport, Jr., "The Effect of Salesman Similarity on Consumer Purchasing Behavior,'' Journal of Marketing Research, Vol. XI, 198-202, (May, 1974).

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