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Do switching costs really provide a first‐mover advantage?

Francisco‐Jose Molina‐Castillo (Department of Marketing, University of Murcia, Murcia, Spain)
Ana‐Isabel Rodriguez‐Escudero (Department of Marketing, University of Valladolid, Valladolid, Spain)
Jose‐Luis Munuera‐Aleman (Department of Marketing, University of Murcia, Murcia, Spain)

Marketing Intelligence & Planning

ISSN: 0263-4503

Article publication date: 23 March 2012

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.

Keywords

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

Publisher

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Emerald Group Publishing Limited

Copyright © 2012, Emerald Group Publishing Limited