Cultural personal values and switching costs perceptions: Beyond Hofstede

Abstract

Firms operating internationally need to ascertain effective relationship marketing (RM) strategies for their foreign operations. One set of RM strategies is based on understanding and using switching costs perceptions. Based on data from 1,630 customers across 16 countries, we examine the interplay between culture and switching costs perceptions using Triandis and Gelfand’s four cultural personal value dimensions (CPVs), horizontal and vertical individualism and collectivism. These CPVs are assessed on external switching costs (ESC) and internal switching costs (ISC) perceptions along with additional important outcomes, including commitment and share of wallet. We find vertical individualism (VI), horizontal collectivism (HC), and vertical collectivism (VC) positively relate to ESC, and VI and VC positively relate to ISC. VI produced the strongest relationship with both switching costs. Our findings indicate the importance of including the horizontal/vertical dimension in studying cultural values. Implications for RM strategies internationally are offered.