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Business Fundamentals was developed by the Global Text Project, which is working to create open-content electronictextbooks that are freely available on the website http://globaltext.terry.uga.edu. Distribution is also possible viapaper, CD, DVD, and via this collaboration, through Connexions. The goal is to make textbooks available to the manywho cannot afford them. For more information on getting involved with the Global Text Project or Connexions email us atdrexel@uga.edu and dcwill@cnx.org.
Editor: Steven D Sheetz (Virginia Tech, USA)
Contributors: Kimberly Watkins, Sarah ElShawarby, Nicholle Depaz (Virginia Tech, USA)
Reviewer: Robin S Russell (Virginia Tech, USA)
In 2005, Barton A Weitz, Stephen B Castleberry, and John F Tanner published their book “Selling: Building Relationships” in which they discuss many of the aspects of modern business relationships, including market exchanges and partnerships. According to their book, a market exchange is defined as a relationship where each party is only concerned with their own welfare. A partnership, conversely, is based on creating a mutually beneficial affiliation for both of the organizations. Market exchanges and partnerships both generate commercially oriented connections, which classifies the two relationships as external (Weitz, Castleberry, and Tanner, 2005).Market exchange:
A market exchange is a type of relationship between a buyer and seller in which each party is only concerned about that particular party’s benefit (Weitz, Castleberry, and Tanner, 2005).
A solo exchange is a transaction that occurs between the buyer and seller where each pursues’ their own individual self-interest (Weitz, Castleberry, and Tanner, 2005). Suppose you are traveling to visit relatives in a nearby town on a warm and sunny Saturday morning. As you pass a small store that is having a sale you see a wooden bench, much like one your grandmother had, with a USD 25 selling price. At this point you might pay the USD 25 for the bench, haggle for a lower price, or walk away from the transaction. You decide to make the seller an offer of USD 10 for the bench. After minimal negotiations the bargain price of USD 15 is agreed upon.
This transaction is an example of a solo exchange. The two parties are not interested in or concerned about the well-being of the other party. Neither you, nor the seller, expect to engage in future transactions, and both parties are successful in pursuing their individual goals. The consumer receives the bench for the lowest possible price, while the seller charges the highest acceptable price. A solo exchange should not be considered an ethical decision, merely an uncomplicated, one-time choice.
The two basic relationship types of market exchange and partnerships are divided further based on eight factors shown in column 1 of [link] . Varying values of these factors represent situations where the organizations reach greater levels of integration and provide greater returns to both sides of the relationship.
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