Exchange Mechanism: The procedure of marketing works through the exchange instrument. The individuals (buyers and sellers) obtain what they need and want through the procedure of exchange. In other words, the procedure of marketing involves exchange of products and services for money or something considered important by the people.
Exchange has a particular significance in marketing. Factual meaning of marketing is exchanging things. Marketing has two sides-buyer and seller. Marketing becomes potential only by the medium of exchange between the two.
For example, the seller gives goods and services and in exchange the buyer gives money or something correspondent to it. These days the distance between the place of production and the place of expenditure has increased.
Exchange is, therefore, referred to as the essence of marketing. For any exchange to take place, it is significant that the following circumstances are satisfied:
(a) Involvement of at least two parties’ viz., the buyer and the seller.
(b) Both should be capable of playing each other something, e.g., money in exchange of product.
(c) Both must have the ability to communicate. In the absence of communication no buying and selling can take place.
(d) Both do the transaction separately and without any difficulty.
(e) Both the parties make transaction for their own pleasure.
The points listed above are the essential surroundings for an exchange to take place. Whether the exchange in fact takes place or not depends on the appropriateness of the act of exchange to both the parties, whether it makes the parties enhanced off or at least not poorer off.