Impact Of Switching Costs Research Articles

Modelling sustainable mobility adoption from the urban population view (SMAUP model): The moderating effect of household size

Sustainable mobility is an initiative to address the problems generated by transportation in cities. Electric cars in particular have the potential to improve transport sustainability in the urban context. This study proposes a behavioural model based on the Theory of Reasoned Action (TRA) to analyse the views of the urban population on the adoption of the electric car. For this purpose, data were collected from 336 individuals and analysed through structural equation modelling. The results indicate that urban consumer intention to adopt an electric car, mediated by attitude and subjective norms, is reinforced by word-of-mouth communication, care of environmental consequences and personal innovativeness and, as a barrier, the switching cost to an electric car. The moderating effect reveals that the impact of switching cost is lower in smaller households. Practical recommendations are offered.

Empirical study of employee loyalty and satisfaction in the mining industry using structural equation modeling

Mining is a high-risk industry and a crucial economic driver that has a crucial role in the economies of countries worldwide. The implications of the labor market on the sustainability of the mining industry have increased the importance of sustainable human resource management at the strategic level of mining and safety management. In this article, from the perspective of management research in an energy production enterprise, we investigated the relationship between employee loyalty and employee satisfaction through a survey that targets employee loyalty, work quality, and job satisfaction and the relationship between enterprise image and switching costs. Based on service profit chain theory, we established a research model for mining employee loyalty, and 500 miners in a typical extreme mining environment in China were surveyed. The study hypotheses were tested using a structural equation model and an employee loyalty model, followed by empirical testing of the models. Employee loyalty was significantly associated with enterprise image and employee satisfaction, work quality indirectly affected loyalty through satisfaction, and the impact of switching costs on employee loyalty was not significant. We provide strong empirical evidence to help enterprises improve sustainable human resource management and regulatory policies, with important implications for safety production. Our study also provides a useful reference for further studies of sustainable human resource management in mining.

The impact of switching costs and brand communities on new product adoption: served-market tyranny or friendship with benefits

Purpose The purpose of this paper is to investigate the competing effects of brand community participation, which should enhance loyalty to both the brand and to already-owned products, against switching costs, which should make consumers sensitive about the financial costs associated with new products. Design/methodology/approach Using the participation and weekly adoption data from 7,411 members in two brand communities and one product category forum over a six-month period, switching costs were computed for each member using 10 years of product release and pricing data. Findings Consistent with prior research, switching costs had a significant effect on reducing product adoption. Brand community participation also had a significant effect on overcoming switching costs. However, these main effects were qualified by an interaction, such that the most active participants were more likely to buy the new product when switching costs were higher. Originality/value Most importantly, these findings provide unique insights into financial switching costs and demonstrate ways in which brand community participation provides a way to mitigate switching costs for consumers who would most be affected by them.

The impact of switching costs on customer complaint behavior and service recovery evaluation

PurposeThe purpose of this paper is to examine the impact of three different dimensions of switching costs on customer dissatisfaction response styles as well as on the evaluation of service recovery.Design/methodology/approachStudy 1 is a scenario-based experiment and Study 2 uses a critical incident technique combined with survey-based measures of switching costs, dissatisfaction responses and perceived complaint handling.FindingsThe results of these studies highlight the need to consider the different effects of switching costs. Not only do different switching costs lead to varying customer dissatisfaction responses, they also have differential moderator effects on the interrelationships between customer-perceived recovery justice and service recovery satisfaction.Research limitations/implicationsService failure severity was an influential control variable. Future studies should investigate how the type, context and severity of service failure influence customers’ complaint behavior. Furthermore, participants had trouble differentiating between their relations toward their service provider in general and one particular employee. Hence, further research should explore the relationship between customers and frontline employees.Practical implicationsThe authors encourage managers to take a closer look at the switching cost dimensions of their service industry. This may lead practitioners to promote differentiated strategies for complaint stimulation and complaint handling.Originality/valueThis is the first study to simultaneously explore all three dimensions of switching costs when examining their impact on customers’ dissatisfaction response styles as well as the moderating effects in the recovery process. In doing so, this study reveals some hitherto uncovered effects.

MARKETING MIX, CUSTOMER SATISFACTION AND LOYALTY: AN EMPIRICAL STUDY OF TELECOM SECTOR IN BHUTAN

MARKETING MIX, CUSTOMER SATISFACTION AND LOYALTY: AN EMPIRICAL STUDY OF TELECOM SECTOR IN BHUTAN

Strategic IT investment in B2B e-commerce platform on user loyalty: considering variable investment cost

In the competitive market of B2B e-commerce platform, the early entrants have the advantage of switching cost while the late entrants have the advantage of declining information technology (IT) cost. Considering the variable investment cost due to the improvement of platform quality, the paper develops an IT investment model to investigate the best investment strategy for B2B e-commerce platform under the impact of switching cost, declining IT cost, price-sensitive coefficient and quality-sensitive coefficient. Results show that switching cost helps early entrants increase investment in platform quality, assume an aggressive investment strategy. Declining IT cost helps late entrants increase investment in platform quality and assume an aggressive investment strategy only when switching costs are lower. With the increase of price-sensitive coefficient, early entrants and late entrants should both decrease investment in platform quality. With the increase of quality-sensitive coefficient, early entrants and late entrants should both increase investment in platform quality.

크루즈 승객들의 인지된 혼잡성, 고객만족, 태도, 재방문의도에 관한 연구: 전환비용의 조절효과를 중심으로

크루즈 승객들의 인지된 혼잡성, 고객만족, 태도, 재방문의도에 관한 연구: 전환비용의 조절효과를 중심으로

Securing business-to-business relationships: The impact of switching costs

While the relationship marketing literature acknowledges the importance of switching costs for increasing customer retention, little is known about its relevance in industrial markets. In particular, it is unclear whether switching costs, and associated dimensions, impact on behavioral outcomes of buyer–seller relationships in business-to-business (B2B) markets. In order to contribute to theory development in this important area, our research first explores the dimensions of switching costs for the B2B domain and also tests the relative impact of these dimensions on business customers' actual purchase behavior. Results suggest that switching costs in B2B settings are a multi-faceted construct, including (i) procedural, (ii) financial, and (iii) relational switching costs. Moreover, we find relational switching costs to be most important for securing B2B buyer–seller relationships since they impact a customer's (a) share-of-wallet, (b) cross-buying behavior, and (c) actual switching behavior. While procedural switching costs only influence share-of-wallet, financial switching costs solely impact customer's cross-buying behavior. These findings contribute to a better understanding on how to secure B2B buyer–seller relationships.

Understanding online customers' ties to merchants: the moderating influence of trust on the relationship between switching costs and e-loyalty

Fostering customer loyalty is a key objective for online businesses. Initial transactions with new customers are less profitable than transactions with existing customers, making loyalty an important strategy. Drawing on research examining online customer loyalty (termed e-loyalty), switching costs, and trust, this study provides an empirical test of the relative influence of trust vs switching costs on e-loyalty for e-service providers. We further examine whether trust moderates the relationship between switching costs and e-loyalty. We propose that in the presence of high customer trust, e-service providers should have less need to rely on switching costs as a driver of e-loyalty. We test the hypothesized relationships using data collected from 299 repeat users of online travel services. Our results confirm that trust is a more important predictor of e-loyalty than switching costs. In addition, we find that the impact of switching costs on e-loyalty depends on the level of trust felt by customers. This study extends our understanding of customer loyalty, switching costs, and trust in e-commerce environments and provides practical, theory-driven guidelines to e-businesses seeking to develop customer loyalty programmes.

스포츠센터 이용고객의 전환비용 인식과 재등록의도의 관계에 있어 관계몰입의 매개효과에 관한 연구

The purpose of this study is providing with basic information for differentiated marketing strategy, which can enhance the re-registration intention of sports center users, by verifying the mediating effect of relationship commitment on the switching cost awareness and re-registration intention of sports center users. Sports center users are the population of this study object. During 9 days from May 2nd to 11th of 2013, 1 study surveyor and 2 study assistants explained the purpose and significance of this study and distributed questionnaire survey sheets to the users of 3 sports centers (2 in Seoul and 1 in Gyeonggi-do). The users were asked to answer the questionnaire by self-administrated method. SPSS 21.0 statistics program was used for the analysis in this study. Detail data processing procedure includes frequency analysis, exploratory factor analysis (EFA), reliability analysis and correlation analysis. For the verification of mediating effect, three-step regression was done and the three-step approach method suggested by Baron & Kenny (1986) was tested. The conclusion drawn by the analysis is as following. First, it was found that emotional commitment had partial mediating effect in the impact of switching cost on re-registration intention. Second, continuous commitment had partial mediating effect in the impact of switching cost on re-registration intention.

Estimating the switching costs in wireless telecommunication market

PurposeSwitching cost is an important concept in the study of consumer loyalty which has implications for organizational business strategy and regulatory policies. Much research has already examined the formation and influence of switching costs on the consumers' repeated purchase intentions, but little research has focused on quantitative measurement of the switching cost itself. This paper aims to address this issue.Design/methodology/approachBy game theory, a complete Nash‐Bertrand model is proposed to accurately estimate consumer switching costs considering price compensation and transport costs in a duopoly. The relationship between switching costs and market structure is then analyzed by using the example of Hong Kong's wireless telecommunication market. From the observed data of China's wireless telecommunication industry, the model calculates switching costs per year of China Mobile and China Unicom's users respectively, as well as other variables.FindingsThe results demonstrate that reducing consumer switching costs will benefit small operators and increase competition in a winner‐take‐all market.Originality/valueThe model is valuable in calculating unseen switching costs and studying the impact of switching costs on market structure, especially for a duopoly in telecommunication.

The Dynamic of Competition in Presence of Switching Costs

Theoretical models with switching costs have shown that, in a dynamic game, firms have incentives to adopt two-period strategies. Initially firms will ‘invest’ in markets at an early stage in their development to be able to then ‘harvest’ at a later stage when consumers are locked-in to the supplier they have previously patronized. This article illustrates, based on a case study: the supply of electricity in Great Britain, that this two-period strategy is not always crowned with success. Specifically, certain firms (in this case British Gas) may have difficulties sustaining customer loyalty in the second phase because customers benefit from a ‘learning effect’, which in turn lowers their switching costs. Taking these learning effects into account could enrich the range of situations analyzed in the existing economic literature with respect to the understanding of the impact of switching costs on competition.

The impact of switching costs on vendor financing

We show that vendor financing appears in equilibrium as the result of repeated trade interactions between a buyer and a supplier when changing supplier is costly. Competition between suppliers forces them to offer a rebate before the relationship is initiated and switching costs allow the buyer to borrow from the supplier in the first period and to roll over the debt until the end of the relationship. The sequence of transfers is similar to a long-term financing structure. Our model suggests that switching costs allow small business owners to smooth their dividend income by using vendor financing.

The Impact of Switching Costs on Customer Loyalty: A Study among Customers of Mobile Telephony

The conditions for doing business are changing rapidly. In last few years the mobile telecom market has witnessed a substantial growth and rapid changes globally as well as domestically. Customer loyalty is a critical issue in the success of any business system, for this reason, the main condition for protecting the subscriber base is to win customer loyalty, a key necessity for the maintenance of a brand’s life in the long term. To achieve this aim, customer loyalty must be measured and “switching costs” identified. The latter render subscribers’ preference for rival operator more expensive. In this connection, this study aim is to measure the impact of switching costs on customer loyalty, and the direct and indirect of “switching costs” on customer loyalty. For doing so, a survey has been performed on customers of the prepaid and postpaid mobile service operator in Indonesia, questionnaire were distributed among them and the results analyzed base upon the proposed research questions and hypotheses, and finally the conclusions and implications were made.

Strategic IT Investments: The Impact of Switching Cost and Declining IT Cost

The declining cost of information technology (IT) over time provides the later entrant in information-intensive industries a cost advantage. On the other hand, the earlier entrant has the potential to build and retain its market share if consumers incur a cost in switching to the later entrant. We investigate the impact of a decline in the IT cost and the switching cost on IT investment strategies of firms. We find that a declining IT cost always hurts the early entrant’s profit. The early entrant may assume an aggressive investment strategy or a defensive investment strategy in response to a decline in the IT cost, depending on whether the switching cost relative to the extent of decline in the IT cost is high or low, respectively. A decline in IT cost also hurts the later entrant’s profit if the switching cost is high. A surprising result is that when the decline in the IT cost is higher than a critical value, a higher switching cost increases consumer surplus. When firms control the switching cost, the early entrant increases its investment in quality and switching cost and maintains its quality and its market-share leadership irrespective of the extent of decline in the IT cost.

The impact of switching costs on customer loyalty: A study among corporate customers of mobile telephony

Switching costs are known to influence customer loyalty. This paper primarily investigates which dimensions of switching costs affect which dimensions of customer loyalty. Data are collected among corporate customers of a mobile phone operator and canonical correlation analysis is undertaken to investigate these relationships. Managerial implications are discussed, limitations are noted and future research directions are indicated.

Golden cages for showy birds: Optimal switching costs in labor contracts

Under what circumstances do workers sign contracts with high quitting penalties? Our answer points to market transparency. When the worker's performance is privately observed by the incumbent firm, alternative employers face an adverse selection problem. As a result, efficient separations can only take place through involuntary layoffs and there is no role for quitting fees. In contrast, when performance is public, quitting fees are useful devices to appropriate the surplus from workers’ reallocation. Separations are amicable and take the form of quitting after downwardly renegotiating the fees. Qualitative features of contracts are independent of the distribution of ex-post bargaining power. The impact of switching costs on total welfare and its distribution depends on the degree of market transparency and the ex-ante distribution of market power.

The impact of switching costs on the customer satisfaction‐loyalty link: mobile phone service in France

The main objective of customer satisfaction programs is to increase customer retention rates. In explaining the link between customer satisfaction and loyalty, switching costs play an important role and provide useful insight. For example, the presence of switching costs can mean that some seemingly loyal customers are actually dissatisfied but do not defect because of high switching costs. Thus, the level of switching costs moderates the link between satisfaction and loyalty. The purposes of this paper are: to examine the moderating role of switching costs in the customer satisfaction‐loyalty link; and to identify customer segments and then analyze the heterogeneity in the satisfaction‐loyalty link among the different segments. An empirical example based on the mobile phone service market in France indicates support for the moderating role of switching costs. Managerial implications of the results are discussed.