Price Sensitivity and Customer Perceived Switching Costs in Business-to-Business Markets: Joint Effect on Customer Repurchase Intentions

Abstract

Previous research assumes an unconditionally positive association of perceived switching costs-financial, procedural and relational-with repurchase intentions. Building on the theory of context-dependent preference formation, the authors posit price sensitivity as a contextual factor that moderates the relationship of repurchase intentions with three different types of switching costs - financial, procedural and relational. Using a large-scale dataset (N=8,588) spanning multiple industries in the B2B domain, the authors show that price sensitivity moderates these associations such that: (1) the negative association of financial switching costs with repurchase intention is stronger when price sensitivity is low, (2) the positive association of procedural switching costs with repurchase intention is stronger when price sensitivity is low and (3) the positive association of relational switching costs with repurchase intentions is stronger when price sensitivity is high. Linking repurchase intentions to actual sales underscores the practical relevance of their results.

Why did I buy this? Purchase regret and repeat purchase intentions: A model and empirical application

“…Price-conscious people will be more satisfied if they find the best deal; otherwise, dissatisfaction can lead to switching and low repurchase intention (Alford & Biswas, 2002;Suprapto, Stefany, & Ali, 2020). So, such customers with more price-sensitivity (consciousness) will switch among brands in search of low prices (Lichtenstein et al, 1993;Shaik, Bosukonda, Mittal, & Sridhar, 2020). It brings us to the next hypothesis: H4: Price-consciousness hurts repurchase intention.…”

“…It can be due to a lack of substitutes or no apparent differences between alternatives. Customers keep on buying from the current brand even if they are not satisfied until or unless they get aware of a more attractive alternative than the current one (Shaik, Bosukonda, Mittal, & Sridhar, 2020;Sharma & Patterson, 2000). So, if the attractiveness of alternatives is low, repurchase intention from the current brand gets high and vice versa (Jones et al, 2000;Sung & Choi, 2010).…”

Prost with craft beer! Do customer experience and price sensitivity affect product price image, perceived value and repurchase intention?

“…RI has become increasingly pertinent to marketing managers because its comprehension of consumer behavior has financial and economic implications for companies (Keiningham et al, 2015). Academic and managerial scopes seek to understand RI formation and its determinants (Lin and Lekhawipat, 2014;Shaik et al, 2022). Le and Supphellen (2017) found that companies' profitability and return on investments may increase, mainly when customers opt for the same supplier (Le and Supphellen, 2017).…”

“…Price sensitivity is marked as an individual's perception and response to changes or variations in the prices of products or services (Shaik et al, 2022;Wieringa and Verhoef, 2007). Furthermore, customers' dynamic style of processing information and their familiarity with market prices can affect price image and sensitivity (Graciola et al, 2018;Hamilton and Chernev, 2013).…”

Impact of brands' Facebook page characteristics and followers' comments on trust building and purchase intention: Alternative attractiveness as moderator

“…This behavior might be rooted in the lack of substitutes or the similarity of existing alternatives. Thus, customers may keep purchasing from the same brand despite their dissatisfaction until they come across or are introduced to a stronger competitor (Shaik et al, 2020; Sharma & Patterson, 2000). Thus, under the condition of scarcity of attractive alternatives, customers' repurchase intention towards the existing brand rises, while an abundance of attractive alternatives decreases customers' repurchase intention towards the existing brand (Jones et al, 2000; Sung & Choi, 2010).…”