Do switching costs really provide a first‐mover advantage?

Francisco‐Jose Molina‐Castillo, Ana‐Isabel Rodriguez‐Escudero, Jose‐Luis Munuera‐Aleman, Jesus Camra‐Fierro
2012 Marketing Intelligence & Planning  
Purpose -The purpose of this article is to present a model that compares the switching costs that consumers face when they buy pioneering and follower products. Design/methodology/approach -A study of 255 new products indicates that switching costs are actually higher when switching from an existing product to a pioneering product. Findings -The study shows that people who buy a pioneering product may also face switching costs, if the pioneering product is launched in an existing category where
more » ... ting category where consumers are already familiar with similar products. Research limitations/implications -The results help to reinforce the view that first movers have advantages and demonstrate that switching costs do not lead to a higher level of consumer retention. Practical implications -This study provides interesting managerial implications on how to launch new products more effectively when they suffer from switching costs.. Originality/value -Researchers commonly view switching costs as a barrier to market entry that protects enterprises that launch pioneering products and gives them a competitive advantage over those that launch follower products. The underlying idea is that people only experience switching costs when they change to a different follower product, rather than when they purchase a pioneering product instead of the product that they usually purchase.
doi:10.1108/02634501211211966 fatcat:h6k6qb3xqfhuteqfxrg4ljatzu