Cross-Cultural Examination of the Marketing-As-An-Exchange Notion

ABSTRACT - The exchange process has been accepted by many marketing scholars as the main foundation for conceptualizing marketing. Application of Foa and Foa's (1974) Social Exchange Theory provides a framework for empirical testing the concept of marketing exchange. A pilot study was conducted to examine both the viability and validity of Foa and Foa's theory. New Zealand and United States consumers were asked to provide specific behaviors that illustrate the six exchange categories (love, information, money, status, goods and services). Results indicate that both similarities and differences exist between the two cultures in terms of the operationalization of these categories and their importance. Implications for international marketing are discussed.

Citation:

Amy Rummel and Lorraine Friend (1993) ,"Cross-Cultural Examination of the Marketing-As-An-Exchange Notion", in E - European Advances in Consumer Research Volume 1, eds. W. Fred Van Raaij and Gary J. Bamossy, Provo, UT : Association for Consumer Research, Pages: 451-458.

European Advances in Consumer Research Volume 1, 1993      Pages 451-458

CROSS-CULTURAL EXAMINATION OF THE MARKETING-AS-AN-EXCHANGE NOTION

Amy Rummel, Alfred University, New York, U.S.A.

Lorraine Friend, Otago University, Dunedin, New Zealand

[The authors would like to acknowledge the funding provided by the International Textile and Apparel Association's The Gap Faculty Development Grant in support of this publication.]

ABSTRACT -

The exchange process has been accepted by many marketing scholars as the main foundation for conceptualizing marketing. Application of Foa and Foa's (1974) Social Exchange Theory provides a framework for empirical testing the concept of marketing exchange. A pilot study was conducted to examine both the viability and validity of Foa and Foa's theory. New Zealand and United States consumers were asked to provide specific behaviors that illustrate the six exchange categories (love, information, money, status, goods and services). Results indicate that both similarities and differences exist between the two cultures in terms of the operationalization of these categories and their importance. Implications for international marketing are discussed.

The exchange process has been accepted by many marketing scholars as the main framework for conceptualizing marketing (Alderson, 1957; Bagozzi, 1975, 1978, 1979; Kolter, 1972, 1979, 1984a, 1984b, 1988). Arndt (1983) goes as far as to suggest that this conceptualization of marketing as an exchange has been the most important contribution to general marketing theory.

Most contemporary definitions of marketing include the exchange concept (e.g. Bagozzi, 1975; Kolter, 1984b, 1988) and in 1985 the American Marketing Association (AMA) incorporated the exchange concept into their definition of marketing (Brown, 1985).

Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives (Brown, 1985, p. 1).

The Nordic definition of marketing echoes a similar theme of exchange being a integral aspect of marketing (Gronroos, 1989):

Marketing is to establish, develop and commercialize long term customer relationships so that the objectives of the parties involved are met. This is done by a mutual exchange and keeping of promises (Gronroos, 1989, p.5).

The concept of exchange, however, has not been limited to the marketing area. Homans (1970) developed an influential model of exchange suggesting that exchange between two parties is based on the satisfaction/dissatisfaction of outcomes. Applying such concepts from the operant conditioning paradigm, exchanges were hypothesized to occur when the interaction resulted in rewarding outcomes. Alternatively, an exchange would be terminated when the interaction was punishing or, in other words, resulted in cost to the party involved. Homans developed his seminal work into the concept of distribute justice, somewhat akin to Equity Theory. The core of this theory is that the ratio of rewards to cost should be beneficial to those involved in the exchange. This theory, as well as other theories in the social/ interpersonal exchange area (Thibaut & Kelley, 1959; Holman, 1961; Kelley & Thibaut, 1978), attempt to explain exchange relationships between consumers and the organization. However, they are somewhat limited because they examine exchanges of similar resource types rather than exchanges of multiple, heterogeneous resources (Brinberg & Castell, 1982; Hirschman, 1987). Further, these theories focus primarily on the outcome of the social interaction (e.g. cooperation, competitive response, retaliation) rather than the process which is central to the understanding of consumer behavior or marketing (Hirschman, 1987). As Bagozzi (1975) suggested, understanding consumer exchanges requires research which examines not only the outcomes or effects of exchange, but also examines the causes of exchanges and the activities involved in exchanges.

Foa and Foa (1974) proposed a theory that is applicable to and parallels the concept of marketing exchange (Hirschman, 1987). Their theory offers a unified framework that accommodates economic as well as social behavior. Multiple, heterogeneous resources are given and/or taken away through interpersonal behavior (i.e., social actions or experiences) depending on the needs and power (i.e., capacity to give appropriate resources) of the exchange parties and the "appropriateness of the environment for an exchange of a particular type" (Foa & Foa, 1974).

Foa and Foa exchange theory (1974) classifies resources into six categories as defined by Donnenworth and Foa (1974):

LoveC an expression of affectionate regard, warmth, or comfort;

StatusC an evaluation judgment conveying high or low prestige, regard, or esteem;

InformationC any advice, opinion or instructions;

MoneyC any coin or token that has some standard of exchange value;

GoodsC any product or objects; and

ServicesC activities on the body or belongings to the body.

Foa and Foa, in their discussion on social exchange, liken it to that of a game, where resources are given, taken and traded for gain. Examples of game rules are as follows as well as possible applications to the marking exchange:

* the smaller the amount of a resource possessed by a person, the more likely s/he is to take it away from someone else. This is a relationship that can be used to explain shoplifting, conspicuous consumption and even violence in today's American schools over product ownership.

* the optimal range (neither too little nor too much) of a resource is narrowest for love and increases progressively for resources closer to money. Having sales clerks overly friendly is often felt to be too pushy and a big consumer turn-off. Similarly a sale price would have to be very low before consumers would begin to worry.

* the probability of love exchange is higher in small groups. Closeness or a familiar greeting in a retail shop is more likely to within a small shop.

* other conditions being equal, the probability of occurrence of a given exchange is contingent upon the institutional setting in which it may take place. People shop certain stores for bargain prices and are willing to give up that personal touch. The reverse should also be true. People who shop in a small shop might expect to be remembered on a return visit and acknowledge that they are not getting the cheapest price in town.

Foa and Foa developed these "rules of the game" to explicitly identify heuristics of their social exchange notion. Yet their application of these heuristics in theory to the arena of marketing, retailing or any business setting appears to be fairly straightforward.

While there have been numerous studies (e.g., Beach & Carter, 1976) that have examined interpersonal interactions and supported Foa and Foa's proposed exchange of resources, there has been limited research using Foa and Foa's theory which directly examines the marketing-as-exchange notion. Two research investigations (Hirschman, 1987; Brinberg & Wood, 1983) lend support to the use of Foa and Foa's resource exchange theory as a foundation to explain the marketing-as-exchange notion. However, theoretical support has never been extended fully into the empirical realm. To gain a better understanding of the validity of the model, researchers must examine what specific resources consumers exchange and what expectations, if any, they have in terms of what they should gain in return.

The first purpose of this research was to establish the specific behavioral categories which will be used to examine the validity of Foa and Foa's theory in a marketing context. This work advances the previous work of Brinberg and Castell (1982) and Brinberg and Wood (1983) in that specific behavioral aspects of Foa's theory are identified through qualitative measures. As a further extension of their work and the work done by others in this area, the effect of culture on exchange patterns are examined. Foa and Foa (1974) suggest that in pursuing the area of cross-cultural invariance it must be determined whether or not the structural meanings of interpersonal variables are the same in various societies. International marketing researchers would argue that there must be some structural similarities in how consumers think, behave and feel regarding their interactions within the realm of consumption. At the very base of this assumption, according to Foa and Foa, is the notion that the patterns of exchange should be similar. To date there has been a lack of research to examine the viability of these exchange patterns across culture. Therefore, the second purpose of this research is to compare the exchange of specific behaviors across two cultures, the United States and New Zealand.

While this initial phase of the research was exploratory and no specific hypotheses were made, a few patterns were "expected" to emerge. First, it was expected that the cross-cultural responses would, on a macro-level, be fairly similar. This expectation was formed because the cultures are not dramatically dissimilar regarding basic consumer-retailer interaction. Additionally, if Foa's theory is valid, then it should be generalizable to a setting outside the United States where it was developed. However, it was also expected that the frequencies of behaviors might differ due to subtle cultural differences.

METHODOLOGY

The primary focus of this research was twofold. The first objective was to determine those behaviors identified by consumers in both countries. Second, it was necessary to establish if there was indeed any correspondence between the categories across cultures so that Foa and Foa's exchange theory could be subject to further theory testing.

Fifty-two (52) respondents from a mid-size N.Z. city and 48 respondents from a comparable sized midwest U.S. city were provided with the definition of each resource category (eg, love, status) and asked to identify behaviors in an clothing consumer-retailer exchange associated with each definition. Specifically, all respondents were asked how they give "(love, status, etc.)" to clothing retailers and how clothing retailers give "(love, status, etc.)" to consumers?

Two researchers independently grouped the responses in each resource category according to common themes. Where discrepancies occurred between the researchers' codings, they discussed the classifications until 100% agreement was reached. Another researcher was presented with the theme classifications and the raw data (i.e., responses from the questionnaire) from each resource category and asked to code responses into the appropriate themes. Total interjudge reliability was 93% with the category of love having the lowest initial consensus (74%) and goods having the highest (99%).

Subjects were randomly selected from both areas and had similar demographics. For example, the N.Z. respondents ages varied from 16 to 65 with an average age of 30.7 years Seventy-two percent (72%) were female and 48.7% were married.

Given that the purpose of this pilot study was to establish the behaviors which operationalize the six resource categories, only frequency comparisons were examined based on the total number of responses made within each group. A chi-square test of significance for independent samples was performed to give some indication of where there were true differences between the response frequencies. However, this research is qualitative in nature so any interpretation of these numbers based only on chi-square should be done with caution.

RESULTS AND DISCUSSION

Overall, consumers could identify specific behaviors which represent to them the exchange process. Not only were consumers able to operationalize what they give to retailers in terms of love, status, etc., but were also able to list what retailers offer in the exchange process (see Tables 1-12). The only category where respondents had difficulty identifying behaviors being exchanged was how consumers offer goods to retailers. This category resulted in a high number of non-responses or don't knows.

Retailers Offerings to Consumers

Comparison between responses from New Zealanders and Americans illustrate a number of similarities, as well as a number of significant differences. These differences may illustrate the importance placed on the themes by each culture. As shown in Table 1, both U.S. and N.Z. retailers offer love to their consumers by staff knowing their names, giving honest opinions and having a comfortable shop environment (e.g., secure changing rooms, chairs for resting). However, there were some large differences between the responses of the two groups. The authors who have lived in both these nations can only provide subjective interpretations of these differences. New Zealanders identified getting individual attention as a way retailers offer love while American respondents failed to mention this behavior (see Table 1). Individual attention is an expectation of N.Z. consumers since most shops are small and personal. Alternatively, New Zealanders being much more reserved than Americans do not operationalize having physical contact with the sales staff as a means for retailers to convey love.

Another pattern that emerged from what retailers offer in the exchange (see Table 2), is that New Zealanders use the store/shop environment in their operationalization of love, status, and information (see Tables 1, 2, 3) to a much larger degree than U.S. consumers. New Zealanders also perceive sales personnel to be an integral part of the status exchange relative to the United States which is consistent with the emphasis placed on the store environment in the sense that New Zealanders appear to place more emphasis on the physical or extrinsic retail cues.

TABLE 1

RETAILER OFFERS LOVE TO CONSUMER

TABLE 2

RETAILERS OFFER STATUS TO CONSUMERS

Advertising was identified more often by the New Zealand counterpart to be a primary vehicle for providing information. It might be that the advertising provided in the U.S. is at such a high volume that American's do not perceive it as anything but a nuisance (see Table 3).

When examining Tables 4 through 6 it is interesting to note that there appears to be fewer differences between the two cultures. It is possible that this is due primarily to the concreteness of these particular resource categories (i.e., money, goods and services). Central differences that exist between the two cultures are in the areas of lay-aways and discounts. While lay-aways appear to be a more common form of money management in New Zealand, explaining the higher frequency rate of discounts mentioned by New Zealanders compared to Americans is challenging. It might be that New Zealand's lack of discount stores make such individual retail discount specials all that more important. Once again, as seen in Table 5, store layout/accessibility of items is perceived to be a goods offering to consumers. This represents the only difference for this exchange situation between the two societies. Overall, both countries perceive the physical goods, packaging, store services and advertising as ways in which retailers offer goods to consumers.

TABLE 3

RETAILERS OFFER INFORMATION TO CONSUMER

TABLE 4

RETAILERS OFFER MONEY TO CONSUMER

Service offerings are represented in very similar ways. Only financial services and alterations reflected any cultural differences. Because of the lack of financial services (e.g., retail credit cards, mastercard, visa) New Zealanders do not operationalize this type of offering.

Operationalization of Consumers Offerings to Retailers

Overall, there again appears to be considerable similarity for the operationalization of consumer offerings between the two countries (see Tables 7-12). Store loyalty is identified as a way in which consumers offer both love and status to retailers across these two cultures (see Tables 7 and 8). However, store loyalty appears to have different structural meaning to the two cultures. Comparing Tables 7, 8 and 10, American consumers offer love and money to retailers through their loyalty while their counterparts appear to conceptualize store loyalty more as a means by which they can offer status to retail establishments. Table 8 reveals that many New Zealanders believe that personal feedback to staff is one way of offering status to retailers. This had significantly more mentions than from the American sample. Treatment of staff, willingness to pay high prices, and social class of customer were acknowledged cross-cultural ways of providing status.

Table 9 reveals that both samples view providing opinons on trends and product satisfaction and filling out market research surveys as an information avenue. Some incongruencies are noted for the specific information exchange behaviors between the two countries. New Zealanders perceive pricing comments, special product requests and specific product information as ways they offer information to retailers. Americans did not identify these as information categories at all, highlighting one of the strongest differences between the two cultures. A strong divergence of this nature is also seen in the money offerings (see Table 10). It is humorous to note that U.S. consumers do not view "prompt payment" as a means to offer retailers money.

While there appears to be complete structural consensus for goods offering to retailers (see Table 11), there are a number of significant differences between the two cultures concerning how consumers offer services to retailers. New Zealanders mention contact with the sales staff by giving them direct feedback more often than Americans. Also, self-service has the highest consensus of a service offering among these respondents.

TABLE 5

RETAILERS OFFER GOODS TO CONSUMERS

TABLE 6

RETAILERS OFFER SERVICES TO CONSUMERS

TABLE 7

CONSUMERS OFFER LOVE TO RETAILERS

TABLE 8

CONSUMERS OFFER STATUS TO RETAILERS

TABLE 9

CONSUMERS OFFER INFORMATION TO RETAILERS

CONCLUSION

The exchange process serves as one of the founding conceptual frameworks for understanding consumer behavior in a marketing context. Yet few researchers have examined it empirically. Foa and Foa's (1974) theory of exchange might serve as a framework for empirical testing.

The purpose of this pilot study was twofold. First, subjects were asked to identify specific behaviors which could operationalize retailer's offerings to consumers within the six categories of exchange. Subjects were asked to complete this same task but in terms of consumer offerings to retailers. As the results show subjects could, in fact, do this.

The second objective of this study was to determine if there was structural similarities between two countries, namely New Zealand and the U.S.. This was achieved by comparing responses across these countries. The comparison of the response frequencies reveal both similarities and differences across the behavioral exchange categories. Out of the total 97 specific behavioral categories 16 were unique to one of the countries. This does indicate that there are some differences in terms of consumer expectations. Similarly, the rank ordering of the behaviors within each one of Foa and Foa's categories (if indeed the frequencies indicate a rank order of importance) reveal that the expectations of consumers and retailers towards each other are very different between the two countries. This highlights the need for a better understanding of our consumers both at home and abroad. Using Foa and Foa's framework it is easier to understand how the same behaviors are different offerings from consumers to retailers. Concurrently this model identifies where there are similar patterns of behavior expressing similar needs.

Further research needs to be undertaken to understand the structural and functional aspects of this model as it applies to the marketing and international marketing context.

At this point, the question might be asked, why empirically test to see if marketing is indeed a process of exchange? Their appears to be two immediate outcomes from the validation of this exchange notion. The first outcome might be a better understanding of satisfaction. To date the majority of the satisfaction literature examines those specific factors that increase or decrease customer satisfaction. It is suggested here that this is in fact a very stagnant way of looking at satisfaction. As this model and other exchange models suggest, it is process of the exchange which is important in predicting consumer satisfaction, not the specific operationalizations of the exchange. In other words, we should be placing more focus on whether or not similar resources or resources close in proximity are being exchange and not if the sales clerk said hello to every customer that walked through the door. It is suggested here that by understanding the relationship between or among the resource categories and their exchange relationships we can better understand what drives customer satisfaction.

TABLE 10

CONSUMERS OFFER MONEY TO RETAILERS

TABLE 11

CONSUMERS OFFER GOODS TO RETAILERS

TABLE 12

CONSUMERS OFFER SERVICES TO RETAILERS

Similarly the second outcome from the examination of this exchange paradigm is the understanding of customer dissatisfaction and, more specifically, consumer complaint behavior. Up until this point, including this paper, the focus is primarily on the positive side or the giving side of the exchange relationship. If in fact this exchange paradigm is valid, it is proposed here that complaint behavior then would be the actual withdraw of resources from the exchange relationship. This would help explain why some consumers do not vocally express their dissatisfaction. What in fact might be happening is that they are withdrawing another resource such as store patronage/loyalty. Again, by focusing on the process proposed by this exchange theory a better understanding of customer satisfaction and dissatisfaction might be obtainable.

This research was exploratory in nature and as such these results have limited generalizability. Research should be undertaken which is directed towards the identification of these specific behavior categories as they have impact of consumer satisfaction or dissatisfaction. Understanding what is expected or being offered on the part of the consumer might be key in understanding this particular area. Unquestionably it sheds light on the roots of culturally differences in a consumption situation.

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