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Technology advancement strategy on patronage decisions: the role of switching costs in high-technology markets

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  • Pae, Jae H.
  • Hyun, Jung Suk

Abstract

Among the many factors that encourage return patronage of incumbent technologies, one that has received scholarly attention in other contexts is switching costs. The existing literature, however, has yet to provide a detailed explication of the underlying processes involved to link switching costs and technology patronage. Furthermore, no examination has been conducted of the degree to which the factor plays a role in the success or failure of corporate technology advancement strategies designed to encourage technology patronage. In this context, we propose a systematic framework to explore the nature of the links between technology advancement strategies and consumer technology patronage via switching costs. Based on consumer survey data from South Korea, we find empirical support for the link between technology advancement strategies and consumers' technology commitment and patronage. Specifically, switching costs are found to be positively associated with technology commitment and patronage. Further, compatibility strategy is associated with the costs involved in switching away from incumbent technology because of an abundant or varied supply of complementary goods. The results also show that preannouncement is a key communication strategy to achieve favorable expectations and to retain the commitment and patronage of current technology users.

Suggested Citation

  • Pae, Jae H. & Hyun, Jung Suk, 2006. "Technology advancement strategy on patronage decisions: the role of switching costs in high-technology markets," Omega, Elsevier, vol. 34(1), pages 19-27, January.
  • Handle: RePEc:eee:jomega:v:34:y:2006:i:1:p:19-27
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    References listed on IDEAS

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    1. David J. TEECE, 2008. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," World Scientific Book Chapters, in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 5, pages 67-87, World Scientific Publishing Co. Pte. Ltd..
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    Cited by:

    1. Abdul Saleem & Shifa Bibi & Asadullah Lakho & Salman Hussain, 2022. "Determinants Of Customer Switching Intention In Pakistan: A Case Of Cellular Services," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 11(3), pages 27-36.
    2. repec:hal:spmain:info:hdl:2441/eu4vqp9ompqllr09hc03jc5h8 is not listed on IDEAS
    3. repec:spo:wpecon:info:hdl:2441/5l6uh8ogmqildh09h56210pa6 is not listed on IDEAS
    4. repec:spo:wpmain:info:hdl:2441/eu4vqp9ompqllr09hc03jc5h8 is not listed on IDEAS
    5. repec:hal:spmain:info:hdl:2441/5l6uh8ogmqildh09h56210pa6 is not listed on IDEAS
    6. Jamil Bojei & Haliyana Khalid & Geetha Nadarajan, 2018. "Influence of Negative eWOM on Switching Intention," Business Management and Strategy, Macrothink Institute, vol. 9(2), pages 67-85, December.
    7. Evens Salies, 2012. "Product Innovation when Consumers have Switching Costs," Chapters, in: Michael Dietrich & Jackie Krafft (ed.), Handbook on the Economics and Theory of the Firm, chapter 31, Edward Elgar Publishing.
    8. Adkins, Roger & Paxson, Dean, 2013. "Deterministic models for premature and postponed replacement," Omega, Elsevier, vol. 41(6), pages 1008-1019.
    9. repec:hal:wpspec:info:hdl:2441/5l6uh8ogmqildh09h56210pa6 is not listed on IDEAS
    10. Evens Salies, 2011. "Product innovation when consumers have switching costs," Working Papers hal-01069477, HAL.
    11. repec:spo:wpmain:info:hdl:2441/5l6uh8ogmqildh09h56210pa6 is not listed on IDEAS

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