There is an often overlooked substitute for exchange in the marketplace. Organizational units in the form of households and businesses can create, consume and lor use goods and services internally and thus avoid markets. This article offers a unified discussion of why organizations engage in internal as well as external exchange activity, with the objective of encouraging marketing theorists to integrate internal exchange into the discipline. By addressing internal exchange activity, scholars should be able to construct more comprehensive theories of macromarketing, competitive strategy, and perhaps even a general theory of marketing.
Get full access to this article
View all access options for this article.
References
1.
Alba, Joseph W.
and J. Wesley Hutchinson. 1987. "Dimensions of Consumer Expertise."Journal of Consumer Research13 (March): 411-454.
2.
Alchian, Armen A.
and Harold Demsetz. 1972. "Production, Information Costs, and Economic Organization."American Economic Review62 (December): 777-795.
3.
Aldershoff, Danielle
and Hans Kasper. 1986. "Consumption Levels of Households Based on Expenditure and Household Production."Journal of Consumer Studies and Home Economics10: 303-315.
4.
Alderson, Wroe
. 1958. *'The Analytical Framework For Marketing." In Proceedings: Conference of Marketing Teachers from Far Western States. Ed. Delbert J. Duncan. Berkeley, CA: School of Business Administration, University of California, 15-28.
5.
Alderson, Wroe1965. Dynamic Marketing Behavior: A Functionalist Theory of Marketing. Homewood, IL: Richard D. Irwin.
6.
Anderson, Erin
and Barton A Weitz. 1986. "Make-or-Buy Decisions: Vertical Integration and Marketing Productivity."Sloan Management Review27 (Spring): 3-19.
7.
Arndt, John
. 1979. "Toward A Concept of Domesticated Markets."Journal of Marketing43 (Fall): 69-75.
8.
Bagozzi, Richard P.1975. "Marketing as Exchange."Journal of Marketing39 (October): 32-39.
9.
Bagozzi, Richard P.1979. "Toward A Formal Theory Of Marketing Exchanges." In Conceptual and Theoretical Developments in Marketing. Eds. O. C. Ferrell, Stephen W. Browin and Charles W. Lamb, Jr.Chicago: American Marketing Association, 431-447.
10.
Bartels, Robert D. W.1944. "Marketing Principles."Journal of Marketing9 (October): 151-157.
11.
Bearden, William O.
and Jesse E. Teel. 1983. "Selected Determinants of Consumer Satisfaction and Complaint Behavior."Journal of Marketing Research20 (February): 21-28.
12.
Becker, Gary S.1965. "A Theory of the Allocation of Time."The Economic Journal75 (September): 493-517.
13.
Belk, Russell W.1985. "Materialism: Trait Aspects of Living in the Material World."Journal of Consumer Research12 (December): 265-280.
14.
Belk, Russell W.1987. "Material Values in the Comics: A Content Analysis of Comic Books Featuring Themes of Wealth."Journal of Consumer Research14 (June): 26-42.
15.
Benton, Raymond, Jr.
1986. "Patterns of Work and Patterns of Consumer Behavior." Working Paper presented at the Eleventh Macromarketing Seminar, August 7-10, Boulder, CO.
16.
Berk, Richard
and Sarah Fenstermaker Berk. 1976. "A Simultaneous Equation Model for the Division of Household Labor." Revision of paper presented at 1976 Annual Meetings of the American Academy for the Advancement of Science.
17.
Bivens, Gordon E.
and Carol B. Volker. 1986. "A Value-Added Approach to Household Production: The Special Case of Meal Preparation."Journal of Consumer Research13 (September): 272-279.
18.
Blois, Keith J.1990. "Research Notes and Communications: Transaction Costs and Networks."Strategic Management Journal11 (October): 493-496.
19.
Boserup, Ester
. 1965. The Conditions of Agriculture Growth: The Economics of Agrarian Change Under Population Pressure. Chicago: Aldine.
20.
Buchanan, James M.1965. "An Economic Theory of Clubs."Economica32 (February): 1-14.
21.
Chayanov, Aleksandr Vasilevich
. 1942. The Theory of Peasant Economy. Eds. Daniel Thorner, Basile Kerblay, and R.E.F. Smith. Homewood, IL: Richard D. Irwin.
22.
Coase, Ronald H.1937. "The Nature of the Firm."Economica4 (November): 777-795.
23.
Cox, D. F.
and S. Rich. 1964. "Perceived Risk and Consumer Decision Making-The Case of Telephone Shopping."Journal of Marketing Research1 (November): 32-39.
24.
Crosby, Lawrence A.
and Nancy Stephens. 1987. "Effects of Relationship Marketing on Satisfaction, Retention, and Prices in the Life Insurance Industry."Journal of Marketing Research24 (November): 404-411.
25.
Deserpa, Alan
. 1971. "A Theory of the Economics of Time."Economic Journal81 (December): 828-846.
26.
Dixon, Donald F.
and Ian F. Wilkinson. 1986. "Toward A Theory of Channel Structure." In Research in Marketing: Distribution Channels and Institutions. Eds. L. P. Bucklin and J. Carman. Greenwich, CT: JAI Press.
27.
Dwyer, F. Robert
, Paul H. Schurr, and Sejo Oh. 1987. "Developing Buyer-Seller Relationships."Journal of Marketing51 (April): 11-27.
28.
Feldman, Laurence P.
and Jacob Hornik. 1981. "The Use of Time: An Integrated Conceptual Model."Journal of Consumer Research7 (March): 407-419.
29.
Ferber, Marianne A.
and Bonnie G. Birnbaum. 1977. "The `New Home Economics': Retrospects and Prospects."Journal of Consumer Research4 (June): 19-28.
30.
Fern, Edward F.
and James R. Brown. 1984. "The Industrial/Consumer Marketing Dichotomy: A Case of Insufficient Justification."Journal of Marketing48 (Spring): 68-77.
31.
Folkes, Valerie S.1984. "Consumer Reactions to Product Failure: An Attributional Approach."Journal of Consumer Research10 (March): 398-409.
32.
Fox, Karl A.
, Ed. 1972. Economic Analysis for Educational Planning: Resource Allocation in Non-Market Systems. Baltimore, MD: The John Hopkins University Press.
33.
Frazier, Gary L.
, Robert E. Spekman, and Charles R. O'Neal. 1988. "Just-in-Time Exchange Relationships in Industrial Markets."Journal of Marketing52 (October): 52-67.
34.
Frenzen, Johnathan K.
and Harry L. Davis. 1990. "Purchasing Behavior in Embedded Markets."Journal of Consumer Research17 (June): 1-12.
35.
Gabarro, John J.1978. "The Development of Trust, Influence, and Expectations."In Interpersonal Behavior: Communication and Understanding in Relationships. Eds. Anthony G. Anthos and John J. Gabarro. Englewood Cliffs, NJ: Prentice-Hall, 290-303.
36.
Graham, Robert J.1981. "The Role of Perception of Time in Consumer Research."Journal of Consumer Research7 (March): 335-342.
37.
Harding, Philip
and Richard Jenkins. 1989. The Myth of the Hidden Economy: Towards a New Understanding of Informal Economic Activity. Philadelphia, PA: Open University Press.
38.
Harmon, Paul
and David King. 1982. Expert Systems: Artificial Intelligence in Business. New York: John Wiley and Sons.
39.
Harrigan, K. R.1985. "Strategies for Intrafirm Transfers and Outside Sourcing."Academy of Management Journal28 (December): 914-925.
40.
Hawrylyshyn, Oli
. 1977. "Towards A Definition of Non-market Activities."Review of Income and Wealth23 (March): 79-97.
41.
Hirschman, Elizabeth C.1985. "Primitive Aspects of Consumption in Modem American Society."Journal of Consumer Research12 (September): 142-154.
42.
Hirschman, Elizabeth C.1987. "People as Products: Analysis of a Complex Market Exchange."Journal of Marketing51 (January): 98-108.
43.
Hirshleifer, Jack
. 1956. "The Economics of Transfer Pricing."Journal of Business29 (July): 172-184.
44.
Hoch, Stephen J.
and John Deighton. 1987. "Managing What Consumers Learn From Experience."Journal of Marketing53 (April): 1-20.
45.
Holbrook, Morris B.
and Donald R. Lehmann. 1981. "Allocating Discretionary Time: Complementarity Among Activities."Journal of Consumer Research7 (March): 395-406.
46.
Houston, Franklin S.
and Jule B. Gassenheimer. 1987. "Marketing and Exchange."Journal of Marketing51 (October): 3-18.
47.
Howard, Michael C.1986. Contemporary Cultural Anthropology. Second Edition. Boston: Little, Brown and Company.
48.
Hunt, Shelby D.1983. "General Theories and the Fundamental Explanada of Marketing."Journal of Marketing47 (Fall): 9-17.
49.
Hunt, Shelby D.1990. Modern Marketing Theory: Critical Issues in the Philosophy of Marketing Science. Cincinnati, OH: Southwestern Publishing.
50.
Jacoby, Jacob
, George J. Szybillo, and Carol Kohn Berning. 1976. "Time and Consumer Behavior: An Interdisciplinary Overview."Journal of Consumer Research2 (March): 320-339.
51.
Jarillo, J. Carlos
. 1990. "Research Notes and Communications: Comments on `Transaction Costs and Networks'."Strategic Management Journal11 (October): 497-499.
52.
Jensen, Michael C.
and William H. Meckling. 1976. "Theory of the Firm: The Managerial Behavior, Agency Costs, and Ownership Structure."Journal of Financial Economics3: 305-360.
53.
Kotler, Philip
. 1986. "Prosumers: A New Type of Consumer."Futurist20 (September-October): 24-28.
54.
Leonesio, Michael V.1988. "A Simple Econometric Procedure for Valuing a Housewife's Time."Midwestern Journal of Business and Economics3 (Spring): 1-10.
55.
Leuthold, Jane H.1981. "Taxation and the Consumption of Household Time."Journal of Consumer Research7 (March): 388-394.
56.
Levy, Sidney J.1981. "Interpreting Consumer Mythology: A Structural Approach to Consumer Behavior."Journal of Marketing45 (Summer): 49-61.
57.
Lopes, Ellen
. 1987. "Between Hope and Fear: The Psychology of Risk."Advances in Experimental Social Psychology, Volume 20. San Diego, CA: Harcourt Brace Jovanovich, 255-295.
58.
Maclachlan, Morgan D.1987. Household Economies and Their Transformations. Boston: Society for Economic Anthropology and the University Press of America.
59.
McCammon, Bert C., Jr.1965. "The Emergence and Growth of Contractually Integrated Channels in the American Economy." In Marketing and Economic Development. Ed. Peter D. Bennett. Chicago: American Marketing Association, 496-515.
60.
McCammon, Bert C., Jr.
, Bradley T. Farnsworth, Toby R. Stone, and Joeanne F. Hixon. 1980. "The Changing Do-It-Yourself Consumer: A Psychographic Profile of the Do-It-Yourself Market." Research report for the Russell R. Mueller Retail Hardware Research Foundation, Indianapolis, IN.
61.
Mick, David Glen
. 1986. "Consumer Research and Semiotics: Exploring the Morphology of Signs, Symbols, and Significance."Journal of Consumer Research13 (September): 196-213.
62.
Oliver, Richard L.1980. "A Cognitive Model of the Antecedents and Consequences of Satisfaction Decisions."Journal of Marketing Research17 (November): 460-469.
63.
Ouchi, William G.1980. "Markets, Bureaucracies, and Clans."Administrative Science Quarterly25 (March): 129-141.
64.
Robinson, John P.1977. "The `New Home Economics': Sexist, Unrealistic, or Simply Irrelevant?"Journal of Consumer Research4 (June): 178-184.
65.
Scitovsky, Tibor
. 1976. The Joyless Economy. New York: Oxford University Press.
66.
Solomon, Michael R.1983. "The Role of Products as Social Stimuli: A Symbolic Interactionsim Perspective."Journal of Consumer Research10 (December): 319-329.
67.
Spekman, Robert E.1987. "Perceptions of Strategic Vulnerability Among Industrial Buyers and Its Effects on Information Search and Supplier Evaluation." Unpublished working paper.
68.
Stalk, George, Jr.1988. "Time-The Next Source of Competitive Advantage."Harvard Business Revieuw66 (July-August): 41-51.
69.
Thaler, Richard
. 1984. "Transaction Utility Theory." In Advances in Consumer Research, Volume 10. Eds. Richard P. Bagozzi and Alice M. Tybout. Ann Arbor, MI: Association for Consumer Research, 229-232.
70.
Thomas, Robert J.1982. "Correlates of Interpersonal Purchase Influence in Organizations."Journal of Consumer Research9 (September): 171-182.
71.
Toffler, Alvin
. 1981. The Third Wave. New York: Bantam Books.
72.
Veblen, Thorstein Bunde
. 1899. The Theory of the Leisure Class: An Economic Study of the Evolution of Institutions. New York: The Modern Library.
73.
Walker, Gordon
and David Weber. 1987. "Supplier Competition, Uncertainty, and Make-or-Buy Decisions."Academy of Management Journal30 (September): 589-596.
74.
Walker, Gordon
and David Weber. 1984. "A Transaction Cost Approach to Make-or Buy Decisions."Administrative Science Quarterly29 (September): 373-391.
75.
Weitz, Barton A.1981. "Effectiveness in Sales Interactions: A Contingency Framework."Journal of Marketing45 (Winter): 85-103.
76.
Williamson, Oliver
. 1975. Markets and Hierarchies: Analysis and Anti-trust Implications: A Stud) in The Economics of Internal Organization. New York: The Free Press.
