– 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.
– A study of 255 new products indicates that switching costs are actually higher when switching from an existing product to a pioneering product.
– 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.
– 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.
– This study provides interesting managerial implications on how to launch new products more effectively when they suffer from switching costs..
– 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.