Abstract
In the competitive wireless market, there are many drivers behind customer defection. Switching barriers, service performance, perceived value in carriers' offers, satisfaction and other constructs can play a pivotal role in customer switching processes among carriers. This study attempts to compare the influence of these factors, taking into account cultural similarities and dissimilarities, between Brazilian and German mobile users. A survey was conducted on two samples, comprising 202 users in Brazil and 200 users in Germany, with culture being employed as a context variable to compare their behavior. Analysis by means of multi-group structural equation modeling suggests that, in both countries, customer satisfaction, service performance and perceived value have important roles in defining customer switching intentions, while switching barriers did not prove to have significant effects upon switching behavior. The results also suggest that the two cultures are sufficiently similar (considering the sample and the variables involved in the model) to not present differences in the studied consumer behavior, except for the effect of service performance upon satisfaction.
Highlights
Latin America, with 530 million wireless subscribers, has surpassed Western Europe to become the second largest cellular market in the world
The results indicate that consumer satisfaction is the construct with the greatest impact on the formation of switching intention, with a total effect of -1.14, suggesting that a one point increase in consumer satisfaction leads to a 1.14 point decrease in switching intention
Cultural distance 1.39 1.11 0.25 0.68 0.68 1.11. This may suggest that the two cultures are sufficiently similar to not present differences in the studied consumer behavior, except for the effect of service performance upon satisfaction
Summary
Latin America, with 530 million wireless subscribers, has surpassed Western Europe to become the second largest cellular market in the world. In the mobile phone industry, such barriers would include costs incurred in switching carriers and the effects of lock-in techniques used by carriers (Shin & Kim, 2008) Switching costs are those involved in changing from one service provider to another (Porter, 1998), accounting for psychological effects (e.g., learning and sunk costs) and for the effort and time involved in adapting to a new firm (Klemperer, 1995). In addition to the psychological and social costs that compose switching costs (Klemperer, 1987), financial barriers created by the imposition of longer contracts (Klemperer, 1987, 1995) and contract termination fees (Büschken, 2004) can act as resources for customer retention, even when satisfaction with the service is lacking (Lee, Kim, & Park, 2004) Those contractual lock-in costs are monetary penalties created to penalize switching (Büschken, 2004; Caruana, 2004), distinguished from switching costs by the absence of any social, time consuming or psychological aspect (Klemperer, 1987). German consumers will present higher positive effects of contractual lock-in over switching barriers than Brazilian consumers
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