Tasman Smith

A cross-cultural study of switching barriers and propensity to stay with service providers

Abstract This study examines the important and often underestimated role that switching barriers play in the propensity to stay with service providers. Three service types (with different structural characteristics) were studied across two diverse cultures—Australia (Western, individualistic culture) and Thailand (Eastern, collectivist culture). Six potential switching barriers are examined: search costs; loss of social bonds; setup costs; functional risk; attractiveness of alternatives; and loss of special treatment benefits. The results from a series of multiple regression analyses show switching costs capture a substantial amount of the explained variance in the dependent variable, propensity to stay with a focal service provider. Furthermore we demonstrate using interaction terms that these switching costs appear to be universal across west–east cultures. However, significant variations were found across industries. Next, using a hierarchical regression procedure, we add a satisfaction variable into each model. The incremental gain in R2 is significant in each industry. Nonetheless the significant impact of switching barriers gives rise to the identification of a new type of service loyalty, which we term “captive loyalty.”

Relationship benefits in service industries: a replication in a Southeast Asian context

Because service encounters and service relationships are first and foremost social encounters, norms and expectations related to such encounters are likely to vary from culture to culture, but especially between high context Eastern, collectivist and low context, Western individualistic cultures. The purpose of this study was, in part, to replicate and then extend the work of Gwinner et al. in the USA, but this time in a Southeast Asian context. Gwinner et al.’s work examined the benefits customers perceive they receive from engaging in long‐term relationships with a variety of service‐providers. The current sample comprised 155 respondents in Bangkok, Thailand who each completed a series of questionnaires concerning their relational behavior with service suppliers. The results support the earlier study showing relational benefits can be categorized into three distinct benefit types. However, compared with the past research results in a Western context (USA), the results indicate some clearly discernible variations. It is apparent that we should not rely wholly on empirical research emanating from Western cultures, but also develop reliable models of how various marketing phenomena work in the rapidly expanding Asian economies.

Modeling relationship strength across service types in an Eastern culture

This study examines for the first time, antecedents of relationship commitment in service industries in an Eastern cultural context. The study investigates the reasons for customers engaging in long‐term relational exchanges with service firms, as well as the impact of attractive alternatives and switching costs on such relationships. The sample comprised respondents in Bangkok, Thailand, who each completed a series of five questionnaires over a period of two weeks pertaining to their relational behaviour (technical service performance, social bonds and communication) with five predesignated service types. The results indicate that collectivist cultural norms impact the nature of relationships, and that antecedent variables have significantly different impacts across service types. Furthermore, switching costs were identified, which act as powerful inducements to stay in a service relationship. Management implications for relational strategies and future research implications of the findings are discussed.

Countering Brand Counterfeiters

Brands represent the most valuable asset that many firms possess, and the associated brand equity is usually the result of years of development efforts. Yet many brands are becoming increasingly threatened by the worldwide phenomenon of brand counterfeiting, whereby imitations of the brand are sold to unwary consumers as the original. Counterfeits are known to flourish especially in developing countries that have weak legal infrastructures and corruptible public officials. What can a company do in the face of this threat? The authors summarize the literature that addresses this issue and provide an in-depth description of how one company addressed the threat of counterfeits in a lucrative developing market. The case illustrates the lengths companies may need to go to respond to counterfeits and raises many issues in relation to these actions.

Macroeconomic Shock and Product Disposition in an Emerging Market

Emerging markets are often viewed as the source of greatest business expansion in coming years. Yet, their economies tend to be more volatile, and the associated economic crises are deeper and more prolonged than is the case in advanced economies. This study examines consumer disposition processes in Thailand at the time of that nation’s economic crisis. Disposition has not been studied either in an emerging market context or in the context of consumers faced with crises derived from macroeconomic forces. The study examines sellers’ motives and behavior at a retail institution that arose spontaneously out of the Thai economic crisis: the car boot sale (CBS). This institution and its variants are well known in the United States and United Kingdom but had not existed as acceptable upper-middle and upper-class retail formats in Thailand prior to the crisis. The study also examines the Thai CBS phenomenon in cultural terms.

Retailing in Bangkok: an intriguing example of agglomeration

Retailing organizations in Bangkok range in type from the traditional through to the most modern. Also, while there are agglomerations of small stores selling similar ranges of goods, there are also some of the most up‐to‐date large shopping malls in the world. Although such agglomerations of retailing activity are not unique to Bangkok, Bangkok’s development is arguably unusual in three ways: the number of agglomerations continues to grow; these new agglomerations are dealing in a wide range of goods and not just electronic gadgets; and one particular agglomeration dominates the Bangkok market for its range of goods. A survey was carried out in 1999 of a sample of the stores in Pantip Plaza, a mall that is in an agglomeration. The results show the need to improve our understanding of the factors leading to agglomeration.

Switching Costs as a Moderator of Service Satisfaction Processes in Thailand

SUMMARY Satisfaction is a well established outcome of a successful service encounter, and increasingly satisfaction is being linked to perhaps the most important construct in marketing-behavioral loyalty. In this paper satisfaction as the dependent variable is regressed on technical quality and functional quality, as independent variables. However, the study moves beyond the modeling the pure antecedents of satisfaction to a contingency model of satisfaction evaluation where psychological switching costs is employed as a moderator. The results show that switching costs have a strong impact on the relationship between technical and functional quality, and satisfaction, across all four service industries studied in Thailand. In other words, the impact of technical and functional quality varies under different contingency conditions.

Regional Learning Networks: Evidence from Japanese MNEs in Thailand and Australia

Japanese firms have been depicted as ‘learning organizations’, with regional governments implementing incentives regions to attract Japanese multinational enterprises (MNEs). To test for regional learning networks, firm-specific surveys were undertaken of Japanese subsidiaries in Thai and Australian manufacturing and Japanese parent investment decisions in Southeast Asia, Australia, China and the EU. Japanese parents regionalized their investment decisions, treating Australia and Southeast Asia as different investment regions. Further, regional networks were created. For both Australia and Thailand, Japanese buyers established regional networks when parent B2B know-how was transferred to their Thai and Australian subsidiaries, and when Australian and Thai-based subsidiaries implemented B2B pre and post-contractual practices with indigenous suppliers. There was no evidence that experienced and large size Japanese MNEs learned from these regional subcontracting networks.