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

Jae H. Pae, Jung Suk Hyun

Research output: Contribution to journalArticlepeer-review

20 Scopus citations

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.

Original languageEnglish
Pages (from-to)19-27
Number of pages9
JournalOmega (United Kingdom)
Volume34
Issue number1
DOIs
StatePublished - Jan 2006

Keywords

  • Preannouncement
  • Switching costs
  • Technology compatibility
  • Technology patronage
  • Upgradability

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