TOWARD A NEW PARADIGM FOR MARKETING:

THE EVOLUTIONARY EXCHANGE PARADIGM

by L. Douglas Kiel
School of Social Sciences, University of Texas

and

Robert I? Lusch
College of Business Administration, University of Oklahoma

and

B.G. Schumacher
University of Oklahoma

The paper presents a platform for marketing theory development and

programmatic research. This platform fits marketing into a universal and
evolutionary exchange paradigm that integrates human exchange with that
of other living and nonliving systems. Importantly, it is shown how
marketing exchange is itself a part of evolving exchange systems that are
commonly discussed in the natural sciences. It is proposed that exchange
systems, at all levels, evolve as part of a definable pattern. The integration of
marketing exchange with exchange in all natural systems may afford a means
for enhancing both the study and practice of marketing.

KEYWORDS:exchanging, supplying, demanding, attraction, information, emergence, convergence,

proliference, and divergence
TYPE OF ARTICLE:nonquantitative theory
DIMENSIONS: none

“It is by exchange that they (men) hold
together”-Aristotle
(Niconachean Ethics, Book V [1133aI)
INTRODUCTION
today, therefore involves exchange
systems at all levels of assemblage, both
living and nonliving. These exchange
systems a r e not static; t h e y have
evolved and continue to evolve.
The hierarchical nature of exchange

T HE KNOWN REALITY evolves from

the
exchange of mass, energy a n d
information between various en-
tities. The universe, as it is known
evidences a range from simple nonliving
exchange between physical systems to
human exchange based on reciprocities
involving goods and services. Human

59

Behavioral Science, Volume 37,1992

60 KIEL, LUSCH
AND SCHUMACHER
exchange is thus merely one system of
exchange among a variety of evolving
systems. On a n a b s t r a c t level, ex-
changes t h a t involve humans are no
different than those in the remainder of
the natural realm, except as to the con-
sciousness of the participants and the
range of complexity.
The academic investigation of human
exchange is concentrated in the study of
marketing. Since the 1960s, for example,
the concept of exchange has become a
fundamental element in understanding
marketing phenomena. Exchange has
been examined from a variety of per-
spectives by marketing scholars
(Alderson, 1965; Kotler, 1972; Bagozzi,
1975, 1978; Hunt, 1983; Pandya, 1987;
Houston a n d Gassenheimer, 1987).
These range from efforts to develop
mathematical models of exchange
behavior (Bagozzi, 1978) t o strictly
theoretical expositions of the importance
of exchange phenomena t o marketing
(Houston and Gassenheimer, 1987).
Few marketing scholars, however,
have offered a broader view of exchange
based on t h e universal n a t u r e a n d
importance of exchange in living sys-
tems. One exception is Gunn (1979, p.
14) who recognized marketing exchange
as, “ a n extension into the social en-
vironment of t h e n a t u r a l exchange
process which is responsible for t h e
infinite variety of s t r u c t u r e i n t h e
physical world.”
The conventional study of exchange
by marketing scholars has thus focused
on h u m a n exchange without incor-
porating human exchange into a larger
intellectual framework t h a t encom-
passes the importance of all exchange
phenomena. The anthropocentric view
of exchange employed by marketing
scholars t h u s r e p r e s e n t s a limited
perspective premised solely on human
exchange systems.
Anderson (1983) h a s argued t h a t
marketing should be studied a s a n
intrinsically interesting social phenom-
enon where the exchange process is the
Behavioral Science, Volume 37,1992
focus of a t t e n t i o n . I m p o r t a n t l y ,
Anderson (1983, p. 28) also argues that
marketing needs a “greater commit-
ment to theory-driven programmatic
research.” T h e primary objective of
this paper is to present a platform for
marketing theory development a n d
associated programmatic research.
This platform fits marketing into a
universal and evolutionary exchange
p a r a d i g m that i n t e g r a t e s h u m a n
exchange with that of other living and
nonliving s y s t e m s . F u r t h e r , it i s
proposed that exchange systems evolve
in a universally applicable pattern.
T h i s i n t e g r a t i o n of m a r k e t i n g ex-
change with exchange in all natural
s y s t e m s m a y afford a m e a n s f o r
enhancing both the study and practice
of marketing.
I n their examination of the devel-
opment of marketing paradigm, Fisk
and Meyer (1982) note t h e following
four distinct paradigms in the evolution
of marketing science: (1)network flow,
(2) m a r k e t scarcity, (3) competitive
m a r k e t i n g m a n a g e m e n t , ( 4 ) evolu-
t i o n a r y s y s t e m s change paradigm.
While these authors (Fisk and Meyer,
1982) see t h e evolutionary systems
c h a n g e p a r a d i g m as t h e c u r r e n t
paradigm, they offer general systems
theory and t h e dissipative structure
paradigms as models with potential
promise for paradigmatic development
in marketing theory. The present work
s a t i s f i e s F i s k a n d Meyer’s (1982)
proposal by incorporating elements of
t h e evolutionary s y s t e m s change
paradigm, general systems theory and
dissipative structure theory.
Economics, the parent discipline of
marketing, continues its unification
with t h e n a t u r a l sciences (Rugina,
1989). This paper expedites the con-
vergence of marketing and economics
into the more general movement aimed
a t t h e unification of t h e sciences
(Rugina, 1989). The interdisciplinary
paradigm formulated in this paper thus
provides a platform that facilitates the
 FOR MARKETING:
NEWPARADIGM EVOLUTIONARY
EXCHANGE 61

synthesis of marketing with both eco- Later, t h e work of Schumpeter i n

nomics and with theories from a variety developmental economics qualified him
of scientific disciplines. “ t o be identified as a n evolutionary
The paper is organized into three economist’’ (Boulding, p. 85); the early
sections. Initially, the intellectual and use of econometric models, however,
historical unification of economics, were so static that the results were more
marketing and the natural sciences is Newtonian t h a n Darwinian. More
presented. Second, the natural science of recently, Cyert and March maintained
exchange is explained including the t h e possibility of “ t h e discovery of
enumeration of propositions t h a t evi- general laws a n d ...models with pre-
dence the ubiquity of exchange, and the dictive and explanatory power ....eco-
pattern of evolving exchange systems, at nomics should be viewed as a part of the
all levels of assemblage among living study of human behavior” (Cyert and
and nonliving systems. The relevance of March, 1963, p. 309).
these propositions to marketing a r e The historic instances of association of
examined a n d means for measuring biology and economics continue to be
these propositions a r e also offered. observed even today. I n his current
Finally, the elements of the evolutionary book, Gould recounts in one of his essays
exchange paradigm relevant t o mar- the contribution of Fleeming Jenkin,
keting theory building are explained and who was a Scottish engineer (Gould,
the research track necessary for such 1991, pp. 340-353). He is of interest to
theory building is presented. t h i s effort because h e not only suc-
cessfully challenged Darwin to make a
ECONOMICS, MARKETING AND THE concession regarding inheritance, but he
NATURAL SCIENCES was ... “the first English economist to
The historical roots of marketing are draw and clearly understand supply and
imbedded i n classical economics. For demand curves ...” (Gould quotes Robert
example, the idea of exchange can be B. Ekelund, Jr., 1991, p. 351).
found i n most of the classic works of Finally, some economists have gone
economics, including Smith, Malthus, beyond t h e biologic t o t h e physical
Ricardo, and Mill. As a science, more- sciences for the basis of their theory.
over, economics antedates most sciences Nicholas Georgescu-Roegen in his work,
except astronomy and physics (Boulding, The Entropy L a w a n d The Economic
1981, p. 83). There is also a traditional, Process, developed his thesis around
historical relationship of economics with thermodynamics (Georgescu-Roegen,
other sciences. For example, since 1971).
Darwin’s work was influenced by Smith The dependence of m a r k e t i n g on
(Schweber, 1977, pp. 274-283) a n d economic theory a n d t h e historical
Malthus (Boulding, 1981, p. 84), the linkage of economics with the natural
evolutionary paradigm is rooted also in sciences is evidence t h a t a new mar-
economic theory. L a t e r economic keting paradigm based on the natural
theorists sought to relate their works sciences is traditional, r a t h e r t h a n
back to biology. Both Marx and Engels radical. Marketing scholars previously
tried to attach the former’s speculations have applied theory derived from the
with those of Darwin (Schumacher, n a t u r a l sciences t o marketing phe-
1986, p. 5). Alfred Marshall, in his late nomena. Dowling (1983) has applied the
19th century seminal work, Principles of open-systems model which emanated
Economics, also s t a t e d regarding from biology and general systems theory
taxonomy that “economists have much to to examine the evolution of marketing.
learn from...biology.” (Marshall, 1927, p. Reidenbach a n d Oliva (1983) have
50). applied Miller’s (1978) general living

Behavioral Science,Volume 37,1992

62 mL,LUSCH
AND SCHUMACHER
systems theory to m a r k e t i n g i n a n
a t t e m p t to b e t t e r u n d e r s t a n d a n d
systematize marketing phenomena.
Sirgy (1984) has used general systems
theory a s a framework for under-
standing marketing as social behavior.
Furthermore, other vintage scientific
theories such as thermodynamics
(especially the second law concerning
entropy) have been applied to a r e a s
ranging from macrosystemic effects of
marketing (Reidenbach a n d Oliva,
19831, to measures of structural changes
in macromarketing systems (Layton,
1989), to consumer behavior (Lesser and
Lusch, 1988). Additionally, more con-
temporary scientific theories such as
Prigogine’s theory of dissipative
s t r u c t u r e s have been suggested as
possessing relevance to m a r k e t i n g
phenomena (Fisk a n d Meyer, 1982;
Monieson, 1981).
Predictably, these early efforts t o
relate marketing exchange to natural
systems of exchange have enhanced
understanding of marketing. None-
theless, t h e y have not afforded a
complete picture of the importance and
role of exchange in the evolution of all
natural systems. Previous examinations
of exchange by m a r k e t i n g scholars
largely have focused on the behavioral
aspects of human exchange (Bagozzi,
1975; 19781, thus resulting i n anthro-
pocentric microtheory building, while
generally neglecting t h e u n i v e r s a l
nature of exchange phenomena.
Since science deals with t h e
explanation of reality and since reality
evolves from t h e exchange of mass,
energy, a n d information, i t is not
surprising that exchange theory may be
t h e one t i e t h a t binds a l l sciences
together. In fact, the authors’ database
search of doctoral dissertation topics
across all academic disciplines reveals
t h a t all of t h e sciences incorporate
exchange phenomena either directly or
indirectly. To exchange, in all of these
cases, refers to some sort of give and
take between entities.
Behavioral Science, Volume 37,1992
THENATURAL
SCIENCE OF EXCHANGE
Definitions
Only five words will be considered as
basic to the simplest understanding of
marketing as part of a universal system
of exchange. These words are exchang-
ing, supplying, demanding, attraction,
and information.
Exchanging, as a verb, is the dom-
i n a n t t e r m i n t h e u n d e r s t a n d i n g of
marketing. The verbal action implied
from its Latin roots exchange means
“out of change.” This “out of change”
occurs via the give and take, or recipro-
city, typically considered when viewing
marketing as exchange.
T h e concepts, supplying a n d
demanding, a r e descriptive of t h e
functions of exchange-the char-
acteristic actions of t h e reciprocity.
From t h e economic context, supply
means the availability of an amount of
mass, energy, and information; a n d
demand means t h e desirability of a n
amount of mass, energy, a n d infor-
mation. Their ideal state is that of an
equilibrium (S=D). Such equality im-
plies that the two are truly equal states.
One participant’s supply is another one’s
demand, a n d vice versa. This equi-
librium is fundamental to the invisible
even-handedness of the marketplace or
the exchange (here exchange is a noun).
It is easy to theoretically deal with an
ideal state; however, the truth of reality
ground out i n the crucible of science
requires explanations for t h e unbal-
ancing of this ideal equilibrium resulting
from risk and uncertainty. Importantly,
the evolutionary exchange paradigm to
be developed addresses t h i s unbal-
ancing.
Attraction is the fourth word and the
most difficult t o define. I n ordinary
usage the term attraction means to be
drawn to another entity. McInnes (1964,
p. 51-67), i n his classic article “ A
Co ncep t ua 1 Approach to Marketing ” ,
comments on t h e importance of
attraction. As soon as a person (or firm)
 EXCHANGE
NEWPARADIGM FOR hhRKETING: EVOLUTIONARY 63

produces a good or service, he is in the systems and properly positions mar-

market for a consumer. As soon as a keting in this evolutionary exchange
person (or institution) develops the paradigm.
capacity t o consume, he i s in t h e
market for a producer. There i s a Proposition One
mutual, necessary attraction between P1. All exchanging is the result of
the parties. Another name for this real, attraction.
interdependent relationship between An understanding of t h i s first
producer and consumer is a market. proposition is assisted by elaborating on
Thus attraction is t h e force t h a t the notion that exchanging is the entire
creates markets. Creation is of utmost method t h a t results i n t h e orderly
importance and of scientific interest unfolding of masdenergy over timehpace
and meaning because attraction is the called evolution. When this funda-
primal reaction to the repulsion of the mental notion is incorporated with
Big Bang, which set into place t h e proposition one, that “all exchanging is
creation. This singular event, some the result of attraction,” one will have
twenty billion years ago, marks the t h e basis of understanding t h e ad-
genesis of all exchange systems. Human ditional propositions that comprise the
exchange is thus one outcome of this evolutionary exchange paradigm. Let’s
evolutionary process. begin by examining t h e concept of
Information is the final word that attraction more closely.
needs defining. Information is order, What is attraction? Elementary
or alternatively, “to put into form.” A Newtonian physics teaches t h a t for
term in the sciences that is often used every action there is a reaction. A-
for information is negentropy (Miller ttraction is the primal reaction t o the
1978, p.13), where entropy is disorder. repulsion of the Big Bang. It is theorized
The second law of thermodynamics t h a t t h e largest components of t h e
tells u s t h a t entropy increases i r - universe, galaxies and clusters of
reversibly for a n isolated system. galaxies, continue to be subject t o this
Consequently, isolated systems have initial repulsion and are flying away
declining information content. Mar- from each other. The attraction is taking
keting, however, is an open system and place in these groupings on selective
thus information content is protected bases over time/space. The selective
and, as we will show shortly, actually nature of attraction means that not all
expands. matter that began t o disperse after the
Jantsch (1980, p. 219) puts infor- Big Bang is equally attracted to all other
mation into t h e exchange concept: matter. Attraction itself is, t h u s ,
information is at first primarily novelty.selective. If it were otherwise then what
But as soon as the new structure has was dispersed after the Big Bang would
become established it seeks t o confirm be attracted back together t o form a
itself and increasingly retrieves and usesunified and singular mass i n t h e
only that information which serves its universe (Schumacher 1986, p. 70).
exchanges with the environment. How does attraction work? This is
perhaps the most important question to
Propositions answer t o gain a n understanding of
The preceding five words (exchanging, exchange and the evolution of exchange
supplying, demanding, attraction, systems. If the repulsive force of the Big
information) will be used to develop four Bang can be expressed as force equals
propositions. Collectively, these will be mass times acceleration (f=ma), then
used t o develop a paradigm which attraction as a reaction can be stated as
explains the evolution of all exchange -f = -ma. If there had been no reaction

Behavioral Science, Volume 37,1992

64 KIEL,
to t h e Big Bang, t h e n all masses of
m a t t e r would have s e p a r a t e d ad
infiniturn resulting in perpetual disorder
or entropy. According to the previously
stated second law of thermodynamics,
such entropy or disorder increases
irreversibly for an isolated system. As a
result of attraction (-0,mass begins to
aggregate; t h e r e s u l t i n g order is
accompanied by an increase in negative
entropy o r negentropy, which a s we
reviewed earlier is another word for
information. Attraction, therefore,
results in changes that are both physical
and abstract.
Where does attraction t a k e place?
The products of attraction are evident
throughout the visible universe, but all
mass did not and does not participate
equally. This can be seen over evolu-
tionary time. The first physical entities
were massive “first” stars with relatively
simple information s y s t e m s e.g.
B e t h e / W e i z s c h e r ( c a r b o n cycle)
(Weinberg 1977, p. 113); whereas, the
most recent physical evolutionary entity
is t h e h u m a n b r a i n , which is com-
paratively infinitesimal in size but much
more advanced as a n information
system. The key to understanding this
fact can be found i n t h e formula for
attraction, -f = -ma; the term -m, implies
a reduction in mass (Schumacher, 1986,
p. 70). Evolutionary attraction, there-
fore, has followed a favored pathway of
selective or reducing m a s s with
increasing advancement of information.
Marketing Insights. Does the pro-
position “all exchanging is the result of
attraction” make logical sense for what
we know about marketing? Clearly the
answer is yes. McInnes (1964, p. 51-67)
identifies t h i s relationship q u i t e
accurately when he equates marketing
with attraction. If a market represents
a separation-in space, time, perception,
valuation, a n d ownership (between
makers and users of economic goods)-
then some force is required to bridge the
gap and realize the opportunity latently
existing in the market potential. That
Behavioral Science,Volume 37,1992
LUSH AND SCHUMACHER
force, or activity, we call marketing. The
notion that marketing activity itself is a
force t h a t s t i m u l a t e s a t t r a c t i o n is
implicitly supported by many theories of
buyer or consumer behavior. For
example, the classic Howard and Sheth
(1969) theory of buyer behavior treats
m a r k e t i n g effort as a variable t h a t
stimulates attraction.
H u n t (1983) i n h i s seminal work
“General Theories and the Fundamental
Explananda of Marketing” suggests that
t h e r e a r e four i n t e r r e l a t e d s e t s of
fundamental explananda of marketing
science. The first two of these explan-
anda (Hunt, 1983, p. 13): (1)the be-
haviors of buyers directed a t con-
s u m m a t i n g exchanges, a n d (2) t h e
behavior of sellers directed at consum-
mating exchanges, deal with the concept
of attraction a n d proposition -1 “all
exchanging is the result of attraction.”
Consequently a n y a t t e m p t s a t con-
structing theories that help t o answer
such questions as “why do which buyers
purchase what they do, where they do,
when they do, and how they do?” and
“why do sellers produce, price, promote,
and distribute what they do, where they
do, when they do, and how they do?”
(Hunt, 1983, p. 13) should benefit from
inclusion of t h e a b s t r a c t concept of
attraction being a primary theoretical
construct.
Finally, in addressing attraction it is
a p p a r e n t t h a t t h e r e is a l r e a d y a
recognition of the applicability of similar
laws between the sciences. For example,
Newton’s inverse-square laws regarding
the velocity of falling bodies (gravity)
can be shown t o be s i m i l a r m a t h -
ematically to Coulomb’s law in chem-
istry (Schumacher, 1986, p. 25). Fur-
thermore, i n 1929 William Reilly
developed the law of retail gravitation,
dealing with how large organized areas
a t t r a c t e d customers from smaller
communities serving the rural hinter-
land (Reilly, 1929). As its name implies,
Reilly’s law emulates the gravitational
law of physics. In it, mass is replaced by
 NEWPARADIGM FOR hbWWlT”l’IN:EVOLUTIONARY
population a n d distance remains
distance. The most popular version of
Reilly’s law was developed by P.D.
Converse (1949) and is as follows, where:
Dy = distance from which
community Y can attract households
Dxy = distance separating
communities X and Y
Px = population of X (the larger
community)
Py = population of Y (the smaller
community)
Essentially the larger community has
more mass which makes it a “magnet” to
pull people from t h e h i n t e r l a n d s .
Actually, however, the population is not
the attractive force, but rather the large
assortment of goods and services that
a r e associated with large population
centers. The theory that explains the
large assortments in population centers
was developed by Walter Christaller in
1933 and is referred to as central place
theory. This theory also implicitly deals
with the concept of attraction.
The mathematics of attraction is often
used in marketing models. For example,
it is often assumed in marketing models
that a firm’s ability to attract customers
is a function of relative marketing effort
or resources. Stated alternatively a firm
will attract x% of the customers if it
invests x% of the marketing resources in
a market (Lilien and Kotler, 1983; Bell,
Keeney, Little, 1975). The essential
point here is t h a t attraction is meas-
urable at the level of human systems.
Proposition Two
P2. Exchanging has the characteristic
nature of dynamic equilibrium.
If a l l exchanges a r e a r e s u l t of
attraction, then the supplying and the
demanding of attractive masslenergy are
the characteristic actions or functions of
attraction. I n t h i s context mass is
considered the physical manifestations
resulting from supplyldemand a n d
information, the abstract manifestation
Behavioral Science, Volume 37,1992
EXCHANGE 65
thereof. Energy represents the ability to
do this work of attraction. The word,
energy, which comes from the Greek,
basically means work. More specifically,
Vander, Sherman, and Lucian0 (1970, p.
129) explain: All physical and chemical
changes involve a redistribution of
energy. But just what is energy? It is
not a “thing” t h a t can be described in
terms of size, shape, or mass ... We shall
define energy as the ability to produce
charge or more precisely, the ability to
do work. The i m p o r t a n t point t o
recognize is t h a t energy enables t h e
producing of change a n d , as noted
earlier. the verbal action implied from
the Latin roots exchange means “out of
change.” Consequently, energy repre-
sents the potential to do the work of
exchange. This potential to do the work
of exchange is recognized only if meas-
urable, e.g. volts, horsepower, etc.
Ideally, most energy supply equals
masslenergy demand; or since opposites
attract, the number of positives equals
the number of negatives. This certainty
of attraction to m a i n t a i n t h i s equi-
librium can be constant. But, if i t is
achieved, then the mass that is in this
new state of equilibrium becomes subject
again to entropy, which c a n be un-
balanced by further attraction of a risky
or uncertain nature. It is the pattern of
this constancy, and change of supplying
and demanding, that gives exchanging
the characteristic n a t u r e of dynamic
equilibrium.
Marketing Insights. Does the propo-
sition t h a t “exchanging h a s t h e
characteristic n a t u r e of dynamic
equilibrium” have marketing relevance?
Certainly yes. Perhaps the best mar-
keting illustration of this proposition is
grounded i n economic theory. When
profits exist in a market there is a signal
sent that demand is greater than supply
and thus more supply should be created.
At the same time when losses exist in a
market there is a signal sent that supply
is g r e a t e r t h a n demand. Seldom is
supply equal t o demand because
66 KIEL,
exchange occurs u n d e r r i s k or un-
certainty. In addition suppliers make
independent supply decisions. However
when supply equals demand the equi-
librium is temporary because supply
and demand continue to fluctuate due to
attraction and exchange of this risky or
uncertain nature.
Dynamic equilibrium characterizing
all exchanging is also something that
will need t o be incorporated into a
general theory of marketing. Regardless
of which of t h e four f u n d a m e n t a l
explananda that Hunt (1983) addresses,
dynamic equilibrium is a useful
construct which must be further devel-
oped i n marketing science. I t is the
unequalness of supply and demand, and
the risk or uncertainty that surrounds
exchange, t h a t puts the behaviors of
buyers, sellers, institutional frame-
works, and society in a dynamic equi-
librium. Finally, t h e m e a s u r e m e n t
standard for this dynamic equilibrium is
money or capital-the media of ex-
change-which is a n o t h e r t e r m for
energy (Schumacher, 1986, p. 65).
The mathematics of s t a t i c equi-
librium in economics and marketing has
been well accepted since the early years
of each discipline. Importantly, these
analyses ignored time as a variable (i.e.
they were static) and assumed linear
demand and supply. In the 1930s the
mathematics of dynamic equilibrium
came into vogue, see for example
Samuelson (1939). These models were
more realistic in capturing the world in
which we live. Finally, in the 1980s
attention focused on nonlinear behavior
over time. This mathematics shows that
chaos is a common phenomena which
can make forecasting very difficult
(Baumol and Quandt, 1985). An excel-
lent treatment of the mathematics of
nonlinear dynamic models and economic
applications is provided by Baumol and
Benhabib (1989). Importantly, Baumol
and Benhabib (1989, p. 99) show that
t h e models a n d mathematics they
develop can be applied t o marketing
Behavioral Science, Volume 37,1992
LUSCHAND SCHUMACHER
such as i n modeling the relationship
between a firm’s profit and advertising.
It is important to note that the basic
notion of a dynamic equilibrium is the
major assumption behind s t r a t e g i c
m a r k e t planning. These p l a n n i n g
models, which have been championed by
Day (1984, 1986), essentially argue that
a firm h a s s t r e n g t h s , weaknesses,
opportunities, a n d t h r e a t s all i n a
dynamic market place. An organization
should take its sources of advantage to
create a competitive advantage i n a
dynamic marketplace. Efforts are
needed, however, to mathematize these
models as a means for measuring the
capacity of marketing systems to adapt
to changing circumstances.
Proposition Three
P3.Exchanging allows for the evolu-
tion of complexity and the main-tenance
of structural integrity in open systems by
the importing of energy and exporting of
entropy.
To begin to understand the critical
importance of this proposition we must
again rely on understanding the concept
of attraction. It must be recognized that
without attraction there would be no
density of m a t t e r , from galaxies to
human brains. Further, without attrac-
tion t h e r e would be no information;
principles, functions, and systems of
masses would not be possible. Finally,
without attraction there would be no
open systems. The universe as we know
it would not exist.
Clearly, the universe has undergone
evolutionary change which has resulted
in increasing complexity. T h e most
recent a n d comprehensive effort to
explain this evolution of complexity is
Prigogine’s theory of dissipative
structures (Nicolis and Prigogine, 1977).
Prigogine’s theory is founded on the
thermodynamics of open systems. These
open systems, referred to as dissipative
structures, import high levels of energy
from t h e i r environments while dis-
sipating the entropy created from energy
 NEWPARADIGM FOR MARKETING: EVOLUTIONARY
usage back t o t h e environment. The
capacity of dissipative structures t o
export entropy into their environments
allow these systems t o maintain the
integrity of their structure and thus
avoid the degenerative effects of entropy.
Dissipative structures consist of a
variety of subsystems interacting in a
nonlinear fashion. Such nonlinearity, in
which the relationships between com-
ponents is unstable, creates the potential
for relatively small, or minor, events to
have explosive and systemwide effects.
Furthermore, dissipative structures are
continually subject t o random “fluctu-
ations,” o r disturbances from both the
external environment and from existing
subsystems. These “non-average”events
probe t h e stability of t h e existing
structure. During some time periods
dissipative structures remain relatively
stable; however, during other periods a
random fluctuation amplifies existing
nonlinear interactions driving t h e
structure t o a s t a t e of extreme in-
stability.
During this state of instability, the
structure may reach a critical point,
referred t o a s a bifurcation point, in
which t h e symmetry of t h e existing
structure breaks down. Once t h e
destruction of the pre-existing structure
occurs a t such a bifurcation point
(Prigogine and Stengers 1984, p. XV), it
is inherently impossible to determine in
advance which direction change will
take: whether t h e system will dis-
integrate into ‘chaos’ or leap t o a new
more differentiated, higher level of order
or organization.
A “leap”to a new, higher level of order
represents t h e creation of a new
dissipative structure. The pre-existing
nonlinearities that lead to the structural
shift, however, also serve t o alter the
relative importance of system parts
following a symmetry break. This new
structural symmetry t h u s generates
novel patterns of interaction in the new
dissipative structure. The new dis-
sipative structure is typically more
Behavioral Science,Volume 37,1992
EXCHANGE 67
organized, o r complex than its prede-
cessor, due t o i t s capacity t o attract
sufficient mass/energy t o form the new
organization.
For Prigogine, the evolution of a sys-
tem is an interplay between chance and
determinism. While the history of a
system maps its evolution, the element of
chance plays a n essential role in
“selecting” the evolutionary outcome.
Furthermore, a systems capacity for
exchange determines its potential for
both handling and generating com-
plexity. Prigogine sees this theory as
explaining the fundamental evolution of
complexity in nature.
Marketing Insights. This third pro-
position, which deals with the evolution
of complexity, helps to reveal the story of
the evolution of marketing systems. The
evolution of complexity in marketing
systems has arisen a s a result of a n
increasing division of labor. Alderson
(1965, p.39) has stated that exchange in
a society results when specialization of
labor removes the production function
from the household. As the division of
labor increases, firms and households
need a more complex marketing system
t o link them together. Some of these
more complex systems have become
known a s vertical marketing systems
(McCammon, 1965; McCammon, Doody,
Davidson, 1969).
The evolution of marketing insti-
tutions and especially retail institutions
have been a topic of continuing research
and writing in marketing. McNair (1958)
developed t h e wheel of retailing hy-
pothesis, Hollander (1966) elaborates in
the retail accordion theory, Gist (1968)
developed t h e dialectic process of
retailing, and Davidson et al. (1976)
developed the retail life cycle theory.
These theories deal with Hunt’s (1983, p.
13) third fundamental explananda “the
institutional framework directed a t
consummating and/or facilitating
exchanges.” Importantly, t h e third
exchange proposition “exchanging allows
for the evolution of complexity and the
68 KIEL, LUSCHAND SCHUMACHER
maintenance of structural integrity in
open systems by t h e importing of
energy and exporting of entropy” when
used t o answer such f u n d a m e n t a l
questions in marketing science as: “Why
do which kinds of institutions develop to
engage in what kinds of functions o r
activities to consummate and/or facil-
i t a t e exchanges, when will t h e s e
institutions develop, where will they
develop, and how will they develop?”
H u n t (1983, p. 13) c a n be of g r e a t
potential help in developing a general
theory of marketing.
T h e basic u n i t of all m a r k e t i n g
systems regardless of t h e level of
aggregation (product, organization,
industry) is the monetary unit of ex-
change. Consequently, the cumulative
measure of t h e u n i t s become total
product sales, total firm sales, or total
industry sales. Layton (1989) suggests
t h a t i n aggregate a network of
exchanges result in trade flows. He
shows how these trade flows can be
modeled in terms of entropy and be
f u r t h e r used t o m a p evolutionary
stages. Using such mathematics he
shows t h a t t h e A u s t r a l i a n macro-
marketing system is moving away from
a maximum entropy solution. The
research further supports the propo-
sition that exchanging allows for the
evaluation of complexity a n d t h e
maintenance of structural integrity in
open systems by importing energy and
exporting entropy.
Free market pricing and trade flows
and the profit or loss outcomes will
facilitate the emergence of complexity
and structural integrity. A contem-
porary example is in the health care
industry. Since costs/prices have been
rising much quicker than overall prices
in the economy, the emergence of new
complex forms for providing health care
have emerged. Although casual obser-
vation helps to validate proposition
three, there has been little effort i n
economics and marketing t o mathe-
matize t h e underlying nonlinear
Behavioral Science,Volume 37,1992
behavior occurring in these dissipative
structures. We believe that the major
progress to be made i n economics and
marketing over the next 25 years will be
in developing this mathematics.
Proposition Four
P 4 . Exchange systems progress to
higher states of matter and complexity by
repeatedly evolving through four stages
layer upon layer: emergence, covergence,
proliference, divergence (Schumacher,
1986, pp. 20-11).
The sequence outlined in this pro-
position can be viewed as a general system
of exchange t h a t results i n a n evolu-
tionary trajectory. Furthermore, the
sequence in proposition four recognizes
that exchange systems participate in the
hierarchical evolution of matter, energy,
and information over universal time. Let’s
begin o w coments on this proposition with
elementary particles. Initially, physics
dealt with elementary particles; however,
today there is a race to see who can
discover the nature of subelementary
particles. Since these smaller entities have
yet to be filly explained, we will begin our
genesis of attraction with particles.
Figure 1 illustrates the concepts in
proposition four. The paradigm por-
trayed is a modified version of t h a t
proposed by Schumacher (1986) which
consists of functional stages of evolution
labeled emergence, convergence, pro-
liference, and divergence. These stages
are both hierarchical and sequential. The
hierarchical nature is evident in the
layering of these evolutionary entities
inside each forthcoming entity. For
example, considering any human being as
an evolutionary entity, each one of us
consists of particles inside of nuclei of
atoms, inside of atoms, inside of
molecules, inside of nuclei of cells, inside
of cells, inside of tissue, inside of organs,
inside of the human organisms. The
sequential aspect relates to the fact that
each layer of these entities evolved over
time as the universal clock of cooling
takes place.
 NEWPARADIGM G: EXCHANGE
FOR ~ M A R ~ T ~EVOLUTIONARY 69

a r

Nonliving
4 ynisn
3

Figure 1

THE HIERARCHICAULINEAR EVOLUTION

OF MATTER, ENERGY AND INFORMATION
OVER UNIVERSAL TIME

Evolutionary Stages:
1 emergence, 2 convergence, 3 proliference, 4 divergence

General Systems
1 attraction, 2 combination, 3 recombination, 4 concentration

Behavioral Science, Volume 37,1992

70 mL,LUSCH
AND SCHUMACHER
These stages of evolution begin with
emergence, which is an event of birth of
a new s t a t e of m a t t e r , energy, a n d
information having t h e potential of
attraction (and repulsion). The emer-
gent example shown i n Figure 1 a r e
particles, molecules, and tissue.
The convergence stage involves these
emergents as they achieve t h e i r
attraction potential to p a i r up or
combine into nuclei. The convergent
evolutionary examples shown in Figure 1
are atomic nuclei, cellular nuclei, and
organs. It should be noted that organs
are not usually called nuclei, but it is
also evident that organs are paired quite
often e.g. lungs, kidneys, etc. These
organs a s binary products do not
nucleate, with the exception of the brain.
The hemispheres of t h e brain, while
being separate, actually work in abstract
concert. Such nucleic synthesis i s
dynamic in that, in case of injury, one
hemisphere can be taught t o process the
information of the injured part. The
unique bilateralization of t h e brain
allows i t to be a n evolutionary con-
vergent .
The proliference stage involves these
nucleated products as they recombine as
a result of attraction of external energy
into new organizations. The nuclei do
not disappear, but rather they grow by
pairs a n d become t h e center around
which energy converted to mass as-
semblies. Such organized e n t i t i e s
compete for this energy in a conditional
competitive environment-the goal of
which is t o achieve energy dominance
over the larger possible niche (space).
Such maturity is a fitter state for future
attractive evolution. The proliferent
evolutionary examples in Figure 1 are
atoms, cells, and organisms.
The divergent stage of evolutions
involves these fitter proliferent entities
that bifurcate or separate. The fitter
becomes the fittest because of its having
improved motility o r ability to better
move about. These fittest entities then
give themselves up in order to concentrate
Behavioral Science, Volume 37,1992
into new states of matter becoming a
new e m e r g e n t . T h u s , t h e cycle of
emergence, convergence, proliference,
and diver-gence repeats over time. The
divergent examples i n Figure 1 a r e
molecules and tissues. It should also
be noted that Figure 1 illustrates this
4/1 r e l a t i o n s h i p by showing t h e s e
stages a s being t h e same. The con-
c e n t r a t i o n of s t a g e 4 becomes t h e
emergent stage 1. The dotted line is
t h e s e p a r a t e point i n d i c a t i n g t h e
emergent birth. Thus, the law of evolu-
tionary continuity is confirmed.
Figure 1 also illustrates t h a t the
stages of evolution are numbered the
same as general systems. The stages
and general systems a r e closely as-
sociated; t h e stages a r e functions o r
characteristic actions t h a t relate t o
each other while the general systems
are units of these relationships. They
do differ i n t h a t the stages delineate
the main line of evolution while general
systems can occur inside or outside of
this main line. These general systems
vary at each instance of expression at
all hierarchical levels as well as outside
of these levels. The variations on the
theme of general systems gives t h e
u n i v e r s e i t s p l e t h o r a of physical
richness inside a n d outside of t h i s
evolutionary line. General systems are,
t h e r e f o r e , isomorphs o r p a r a l l e l
systems, t h a t are generally alike but
specifically different ( S c h u m a c h e r
1986, p. 75).
In Figure 1, the evolutionary example
ends with organisms. There is no evi-
dence evolution has stopped with the
appearance of organisms. The varia-
tions on t h e theme of these general
systems did not end as well but can be
traced using t h e same p a t t e r n or
paradigm of general systems in other
disciplines. The following examples trace
a few of these other disciplines and show
how the general systems are indeed the
skeletons of these bodies of knowledge.
Further, the evolution of their cumulative
information means a r e presented.
 NEWPARADIGM
FOR MARKETING:
EVOLUTIONARY
EXCHANGE 71

FIG. 2 understanding marketing phenomena.

For example, in terms of product life
cycle theory, the four evolutionary stages
EVOLUTION OF INFORMATION MEANS of emergence, convergence, proliference,
IN GEOLOGIC Ems divergence can be used to help recon-
ceptualize stages of the product life cycle.
Emergence is the first stage and involves
General Systems Geologic Eras Cumulative innovation and attraction; convergence is
Information Means the second stage and involves the supply
and demand of the innovation including
attraction Proterozoic reflexive combinations of related technologies etc.;
combination Paleozoic instinctive
recombination Mesozoic conditional response
proliference involves a maturation of the
concentration Cenozoic analytical product market where high competition
results i n f u r t h e r recombinations of
Figure 2 thus reveals that the ana- product attributes and technologies; and
lytical information means of the Ceno- divergence represents a new concen-
zoic period, expressed most distinctively tration of mass and thus a new source of
by the evolution of Homo sapiens, gives attraction (i.e., evolution into another
rise t o such relatively recent outcomes innovation or product life cycle). The
as marketing. four stages and the linking of the fourth
Similarly, those disciplines that use back to t h e f i r s t allow for t h e hier-
as their basis of study the evolution of archical a n d l i n e a r evolution t h a t
Homo sapiens, a Cenozoic organism, proposition four addresses. Importantly,
follow the general systems format. The the four abstract evolutionary stages
evolution of h u m a n economic a n d presented in this proposition can not only
informational means a r e detailed in be applied to understand product growth
Figure 3. but also to understanding the growth of
m a r k e t i n g i n s t i t u t i o n s , (e.g., r e t a i l
FIG. 3 formats) consumers or households (e.g.,
family life cycle), a n d concepts a n d
paradigms themselves which have been
EVOLUTION OF HUMAN ECONOMIC used to develop a scientific under-
AND INFORMATIONAL MEANS s t a n d i n g of marketing. Predictably
therefore, this proposition can also be of
use in developing further expressions of
General Systems Economic Means Cumulative
general theory that addresses several of
Information Means t h e f u n d a m e n t a l explananda i n
marketing that Hunt (1983) identified.
attraction huntinglgathering oral The biggest challenge confronting
combination agricultural written marketers in regard to proposition four is
recombination industrial electro/mechanical
concentration post-industrial electronic mathematical modeling of the progres-
sions through the stages and the layering
of complexity. Frankly, results to date
Thus, it is possible to see how various with mathematically modeling t h e
bodies of knowledge can be hung on the product life cycle have been poor (Rink
skeleton of the general systems based on and Swan, 1979). Possibly the key is to
the stages of evolution. develop a broader view of life cycles as
Marketing Insights. Proposition four, evolutionary processes. Tellis a n d
which identifies the evolutionary stages Crawford (1981) develop such a paradigm
of emergence, convergence, proliference, which views life cycles not so much a
divergence, offers strong potential for function of time, but as reflecting the

Behavioral Science,Volume 37,1992

72 &EL,
result of many market, technology and
competitive forces which each act in
concert with others to determine the
product sales growth or decline. Such a
view will result in the mathematics not
being deterministic which is at odds
with traditional life cycle models. The
biggest mathematical challenge will be
in modeling t h e underlying market,
technology and competitive forces which
will impact with uncertainty in terms of
timing and force. Nevertheless, these
are essentially the challenges also faced
in evolutionary biology which deal with
genetic systems, variation, selection,
and increasingly human intervention
via a mediative force.
TOWARD MARKETING THEORY BUILDING
AND PROGRAMMATIC RESEARCH
The mechanics of building a theory
have been well known for 200 years.
Lavoisier s t a t e d , “...every n a t u r a l
science always involves three things: the
sequence of phenomena ...; the abstract
concepts...; and the words in which these
concepts a r e expressed” (Lavoisier,
1789). Similarly, G. J. Stigler in the
first edition of his classic economics
work, The Theory of Price, discusses
theory’s involvement with assumptions
or hypotheses and conclusions (Stigler,
1946, p. 4). Cyert a n d March quote
Stigler (1963, p. 3131, stating t h a t a
theory consists of t h r e e elements:
definitions, assumptions, a n d con-
clusions.
The aim of this paper is to provide a
platform for m a r k e t i n g theory de-
velopment a n d associated program-
matic research. This paper satisfies
Stiglers call for definitions a n d
assumptions in theory development. In
t h i s case t h e word, propositions,
substitutes for the notion of assum-
ptions. Initially, the five concepts and
definitions of the terms exchanging,
supplying, demanding, attraction, and
information should serve as a foun-
dation for developing marketing theory.
These terms represent the essential
Behavioral Science, Volume 37,1992
LUSCHAND SCHUMACHER
“elements” that generated and continue
to generate the evolution of marketing
systems.
Programmatic research must follow
with efforts to measure these concepts as
they relate to marketing systems. These
concepts must be measured in light of
t h e expected nonlinearities a n d
mathematical chaos that may generate
new means and forms of organization
that either expedite or inhibit human
exchange. The understanding of ex-
change systems developed i n t h i s
paper-and especially proposition four
which presents the emergence, con-
vergence, proliference, divergence
paradigm-offers an immediate research
agenda. Marketing should be tracked
within and across these evolutionary
stages. This undertaking may afford
insight into the role of marketing as an
agent of attraction and exchange and
thus its impact on system change and
maintenance. This perspective thus
provides a natural systems approach to
marketing as a functional aspect of
necessary energetic exchange.
Marketing practitioners also may use
the proposed paradigm t o assess the
value of particular marketing techniques
during the four system stages. Further-
more, marketing managers may use the
paradigm to provide guidance on how to
reorganize a system after a chaotic
episode. Importantly, research using the
paradigm is needed if marketing
managers are to optimally benefit from
using and applying the paradigm.
The conclusions required for devel-
oping an evolutionary exchange theory of
marketing will result from program-
matic research t h a t measures t h e
concepts of exchanging, supplying,
demanding, attraction, and information
in marketing systems. Perhaps, most
importantly, since exchange systems are
evolutionary systems, measures of
change i n marketing systems a r e
initially critical as a means of deter-
mining t h e evolutionary s t a g e of
marketing systems. Only through this
 NEWPARADIGM FOR MARKETING: EVOLUTIONARY
means will the opportunity arise t o
make some predictions as to the nature
of expected changes i n m a r k e t i n g
systems.
Since marketing exchange is part of
a general system of exchange, it is
predictable t h a t marketing can be a
source of fluctuation i n t h e larger
system of exchange. S t a t e d a l t e r -
natively, m a r k e t i n g is a potential
source of change in exchange systems.
Dixon (1984) recognizes this i n the
development of his social systems
perspective for analyzing macro-
marketing. Viewing exchange from the
active perspective enunciated in this
work as from the Latin “out of change”,
reveals exchange as an essential and
universal component of the evolution of
complexity throughout known systems.
The practice of marketing is a result of
this evolving complexity and thus is
one subset of this enormous process of
generating change. In brief, marketing
is about change. Regardless of whether
that change concerns human attitudes
or economic (human energy) attraction,
marketing is a change agent subject to
deleterious, n e u t r a l , or salubrious
results for the engaged entities.
The understanding developed in this
paper is not meant to suggest t h a t
approaching marketing exchange as
one element of universal evolutionary
exchange should be considered as one of
t h e many metaphors for marketing
commonly enumerated (Sirgy, 1990).
On the contrary, marketing as a result
of evolutionary exchange processes is
not a metaphor, but rather represents
t h e inevitable r e s u l t of evolving
complexity represented i n h u m a n
systems and their associated demands
for exchange.
Furthermore, a brief glance at the
traditional metaphors used to describe
m a r k e t i n g shows t h a t t h e view of
marketing presented here encompasses
all of the traditional images (Sirgy,
1990). Whether the metaphor views
marketing as a n organized behavior
Behavioral Science,Volume 37,1992
EXCHANGE 73
system (Alderson, 1957, 19651, as power
and conflict relations (Dwyer e t al.,
19871, or as diffusion of innovations
(Bass, 1969) all of these approaches are
results of attractive exchange of systems
competing for maintenance and growth.
CONCLUSION
The perspective detailed in this work
places marketing within the general
systems a n d dissipative s t r u c t u r e
paradigm expressed by Fisk and Meyer
(1982). This perspective also places
m a r k e t i n g within t h e l a r g e r , a n d
perhaps more fruitful paradigm of the
unification of t h e sciences (Rugina,
1989). Finally, this is a framework more
suitable t o both a more comprehensive
and scientific model of exchange and to
a greater understanding of the place and
function of marketing in the trajectory
of evolution a n d complexity. This
platform should enhance both mar-
keting theory and research.
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