Resistance to Brand Switching when a Radically New Brand is Introduced: A Social Identity Theory Perspective

Abstract

There has been little research on how market disruptions affect customer–brand relationships and how firms can sustain brand loyalty when disruptions occur. Drawing from social identity theory and the brand loyalty literature, the authors propose a conceptual framework to examine these issues in a specific market disruption, namely, the introduction of a radically new brand. The framework focuses on the time-varying effects of customers’ identification with and perceived value of the incumbent relative to the new brand on switching behavior. The authors divert from the conventional economic perspective of treating brand switching as functional utility maximization to propose that brand switching can also result from customers’ social mobility between brand identities. The results from longitudinal data of 679 customers during the launch of the iPhone in Spain show that both relative customer–brand identification and relative perceived value of the incumbent inhibit switching behavior, but their effects vary over time. Relative customer–brand identification with the incumbent apparently exerts a stronger longitudinal restraint on switching behavior than relative perceived value of the incumbent. The study has important strategic implications for devising customer relationship strategies and brand investment.