Do switching costs really provide a first‐mover advantage?

Abstract

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 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.

Citation

Molina‐Castillo, F., Rodriguez‐Escudero, A. and Munuera‐Aleman, J. (2012), "Do switching costs really provide a first‐mover advantage?", Marketing Intelligence & Planning, Vol. 30 No. 2, pp. 165-187. https://doi.org/10.1108/02634501211211966