Quaker Oats: Branding Challenges: Quaker Oats
costs ϩ energy costs ϩ psychic costs
Based on this equation, the marketer can increase the value of the customer offering by
(1) raising beneﬁts, (2) reducing costs, (3) raising beneﬁts and reducing costs, (4) raising beneﬁts by more than the raise in costs, or (5) lowering beneﬁts by less than the
reduction in costs. A customer choosing between two value offerings, V1 and V2, will
examine the ratio V1/V2. She will favor V1 if the ratio is larger than one; she will favor V2
if the ratio is smaller than one; and she will be indifferent if the ratio equals one.
Exchange and Transactions
Exchange, the core of marketing, involves obtaining a desired product from someone
by offering something in return. For exchange potential to exist, ﬁve conditions must
There are at least two parties.
Each party has something that might be of value to the other party.
Each party is capable of communication and delivery.
Each party is free to accept or reject the exchange offer.
Each party believes it is appropriate or desirable to deal with the other party.
Whether exchange actually takes place depends upon whether the two parties can
agree on terms that will leave them both better off (or at least not worse off) than
before. Exchange is a value-creating process because it normally leaves both parties
Note that exchange is a process rather than an event. Two parties are engaged in