Redefining the market: A treatise on exchange and shared understanding

Robert F. Lusch, Jameson K.M. Watts

Research output: Contribution to journalArticle

8 Scopus citations

Abstract

Marketing executives operate in increasingly complex marketplaces characterized by global competition, accelerating sustainability concerns, and an increased focus on innovation. This complexity risks a fragmentation of thought more severe than that which Theodore Levitt discussed in his seminal article on marketing myopia. Indeed, we’ve become market myopic as a discipline and lost focus on the generalities that apply to markets and exchange more broadly. Our goal is to provide a description of the modern marketplace that allows us to re-envision this complexity as a symptom of a more general phenomenon. We do this by arguing that market complexity can (and should) be understood as a consequence of the circular relationship between exchange and shared understanding. We then show how this relationship can be expressed in simple terms using vectors to symbolize the degree to which this understanding is shared across actors and the rate at which this “shared-ness” is changing in time. The resulting model allows us to cast the variety and variability of the complex modern marketplace as a symptom of shared understanding dynamics. This, in turn, helps us move beyond the morass of contextual idiosyncrasy and toward a more parsimonious description of the market.

Original languageEnglish (US)
Pages (from-to)435-449
Number of pages15
JournalMarketing Theory
Volume18
Issue number4
DOIs
StatePublished - Dec 1 2018

Keywords

  • Exchange theory
  • institutional theory
  • market system dynamics
  • markets
  • shared understanding

ASJC Scopus subject areas

  • Marketing

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