Switching Cost

Switching Cost are defined as the one time cost that customers associate with the process of switching
from one provider to another (Burnham 2003), When customers state that its not worth to switch a
providers they may find obstacles which ranges from search costs, transaction cost, learning cost
emotional cost and it also includes financial, social and psychological risk on the part of the customer.
According to Burnham there are 3 types of switching cost which are
1.

Procedural switching cost: which mainly consists of economic risk, evaluation, and learning. This
type of switching cost mainly involves the expenditure of time and effort.
2. Financial Switching cost: Consists of the benefits lost and financial cost, this type of switching cost
involves the loss of financially quantifiable resource.
3. Relational switching cost: mainly deal with relationship lost, this type of switching cost involves
psychological or emotional discomfort due to loss of identity and the breaking of bonds.
Switching cost are basically found to be impediment to explore new suppliers. To an extent customers
view switching cost as a barrier to exit the relationship and will tend them to maintain relationship with
the supplier. If switching cost are low, dissatisfaction with service quality and firm commitment will drive
the intention to switch suppliers. Studies have been conducted that shows switching cost acts a
moderating variable between service qualities, firm commitment and switching intention (Carmen).

Service Quality
Service quality has become an increasing important factor for success and survival of any firm in
an industry. Service quality has be defined as. From the perspective of Gronroos (1990) the
quality of service is conceptualized from 2 dimensions that it technical quality (what is delivered
to the customer) and the functional quality (how it is delivered) The SERVQUAL scale which
was proposed by Zeithmal, Berry 1988 consisted of 5 dimensions (tangibles, reliability,
responsiveness, assurance and empathy). But this scale had led to controversy. Instead an
alternative was proposed by Brady and Cronin (2001) that explains service quality is of three
dimensions: The outcome, interaction and physical environment. The outcome quality is defined
as what the customer obtains when the productive process ends; Interaction quality is referred as
the interaction that is taken place while the service is being delivered and environment quality
refer to the conditions of the environment where the service is delivered or the product is sold.
Commitment
Commitment can be defined as the desire to develop and maintain long term exchange
relationship, relationships, a desire that materializes in the realization of implicit and explicit
promises, as well as sacrifices in favor of the economic and social well-being of all the parties
having some interest in the relationship. The organizations commitment is referred to as the
organization interest in the customer and its effort to main taint her loyalty by adapting to their
specific needs, offering frequent communication, special treatment and full information. When
customers perceive added value in the firms efforts to offer them special treatment to foster their
loyalty, they will not switch suppliers.

Customer Satisfaction
Customer satisfaction continues to be a vital objective in the marketing community, since it is a
critical focus for designing effective marketing programs. At the theoretical level satisfaction is a
concept that has been amply debated in the literature. For the purpose of the current study
satisfaction is considered to be achieved when customers expectation about the performance of
the product or service being consumed are met or exceeded, that is a sensation or feeling
generated both by cognitive and emotional aspects of the product or service; and that is a
cumulative evaluation of the sum of diverse aspects of the product or service.
Satisfaction as a factor of switching intention has been used in earlier research. Various author
did not conduct empirical tests of the association between satisfaction and customers intention
to switch but they did propose that there was a causal relationship between the two. Carmen
demonstrated that satisfaction acts as mediating variable between service quality and customer
intention to switch service providers. From his study it was able to understand that customer
satisfaction acts as a mediating variable between service quality and switching intention.
Perceived satisfaction was measured by adapting the six-item satisfaction scale used by Bansal
which was derived from bipolar adjective scale of satisfaction tested b West Brook and Oliver
(1981).