The impact of switching costs and brand communities on new product adoption: served-market tyranny or friendship with benefits
| Pages | 140-153 |
| Published date | 11 March 2019 |
| DOI | https://doi.org/10.1108/JPBM-10-2017-1604 |
| Date | 11 March 2019 |
| Author | Scott A. Thompson,James M. Loveland,Katherine E. Loveland |
| Subject Matter | Marketing,Product management,Brand management/equity |
The impact of switching costs and brand
communities on new product adoption:
served-market tyranny or friendship
with benefits
Scott A. Thompson
Department of Marketing, St. Louis University, St. Louis, Missouri, USA, and
James M. Loveland and Katherine E. Loveland
Department of Marketing, Xavier University, Cincinnati, Ohio, USA
Abstract
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 financi al 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.
Keywords Brand communities, Big data, Switching costs, New product adoption
Paper type Research paper
Consumer communities in general, and brandcommunities in
particular, have become very prominent components of many
firms’marketing strategies. These often virtual communities,
which allow consumers to connect and communicatebased on
their shared love of a product or product category, are effective
because participation in these communities fosters admiration
for a brand and its products while increasing the attachment
that individuals feel towards the brand and its offerings
(Dessart et al.,2014). This attachment, demonstrated by their
participation within these communities, increases the
emotional connection consumers have with the branded
products they own, hopefully inciting them to purchase the
brand’s new products and, perhaps more importantly, to stay
away from competitors’products (Thompson and Sinha,
2008). Thus, community-based strategies, in which managers
actively foster the creation and consumerparticipation in these
brand communities, are one way for a firm to encourage the
adoption of its new products while constructing barriers to
competitors. However, firms use many strategies with
consumers, often simultaneously, necessitating a greater
understandingof how these strategies might interact.
Switching costs, which have been shown to effectively generate
loyalty and create barriers to the adoption of competitors’
products, represents an important marketing strategy that has not
been considered within the context of brand communities. As
defined in Klemperer (1995),“switching costs arise from a
consumer’s desire for compatibility between his current purchase
and previous investment”(p. 516). Producers may also
artificially create switching costs through strategic product
positioning and marketing, or by making their products
incompatible with the products of competitors. As their advent,
switching costs have become a standard component of marketing
plans and have been expanded to include emotional and
psychologicalcosts,aswellaseconomicones(Farrell and
Klemperer, 2007;Polo and Sese, 2009;Dube et al.,2009).
While switching costs ideally keep consumersfrom switching
to competing brands and products, they can also potentially
prevent consumers from upgrading to new products from the
preferred brand. This can be especially problematic in
technology-driven markets, where advancements make not
only a central product, but all its accessories, obsolete. This
tension, in which switching costs become a barrier to adopting
The current issue and full text archive of this journal is available on
Emerald Insight at: www.emeraldinsight.com/1061-0421.htm
Journal of Product & Brand Management
28/2 (2019) 140–153
© Emerald Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/JPBM-10-2017-1604]
Received 5 October 2017
Revised 1 March 2018
Accepted 12 April 2018
140
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