Implications of the Revised Definition ofMarketing: From Exchange to Value Creation

By- Group 7Section B

(PGDM 2016-2018)

1985 2004

Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of goods, ideas, and services to create exchanges that satisfy individual and organizational goals.

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners and society at large.

From Exchange to Value Creation

The Limits of Exchange and the Merits of Value Creation1985 2004

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In a producers market, the manufacturers do not emphasis on the value that a customer would expect from a product, but instead they emphasis on selling their products and producing more for the purpose of making profits.

Nowadays producers have become more consumer centric and lay more emphasis on creating value for the product instead of just focusing on exchange. Manufacturers have started introducing more services to their customers like after sale services to ensure that customers are more satisfied with their products.

Value Co-creation

In value cocreation, value is cocreated by the firm and the consumer. The implication is that value cocreation is more than decomposing a process and shifting part of the work to the consumers. Extending the value creation paradigm further, the need for and desire of actors to cocreate value preempts and supersedes the need for exchange. Success of the value cocreation process relies heavily on customers’ efforts and involvement. Thus, value cocreation effectively leads to greater interdependence among the main actors (consumers and producers), which in turn builds trust and sustains relationships.

Conclusion

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. (Approved July 2013)

As we can observe, over the 9 years, value co creation has not been added to the definition of marketing by AMA. Collectively we don’t criticize this, because value co creation is still an aspect that many companies are still not taking part in. it took value about 19 years to be added into the definition