Exploring Brand Switching Matrices through Social

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2010兩岸商管理論與實務研討會.臺南新市遠東科技大學.2010年5月12日~5月14日
Exploring Brand Switching Matrices through Social Network Analysis
Ho, Chia-Hui
Assistant Professor
Department of Tourism Management
Far East University
[email protected]
Wu, Kun-Hsu
Lecturer
Department of Tourism Management
Far East University
[email protected]
Abstract
This paper aims to explore the meaning of brand
switching matrices through Social Network Analysis
(SNA) in order to understand the impacts of brands
attributes to customers purchasing behaviors. Brand
switching matrices can be regarded as simple indicators
of consumer satisfaction in a competitive market.
Understanding customers brand switching is important to
marketers because brand switch has the potential to
impact on a firm’s market share. Brand switching
matrices are square tables that display customer purchases
on two different, usually contiguous occasions. For
market researchers, such matrices can be used in at least
for three purposes: examining substitution patterns-those
brands; consumer loyalty and customer retention;
forecasting losses and gains of each brand (Colombo et al,
2000).
For the research purposes mentioned above, in this
paper, SNA can be regarded as proper methods and to
make sense of brand switching data. In short, SNA is a
"broad intellectual approach”, which views social systems
as networks of relations between social actors (e.g. brands
of course in this paper). It is its contention that attitudes,
strategies and behaviors of the actors of a social system
are affected by their relations to others, by the positions
they hold within the whole system of relations as well as
by its characteristics and structure.
This paper proves that the following observations:
SNA technique accomplishes two very important things
at once: (1) it provides a more-sophisticated analysis of
the brand switching data using techniques already been
used in other fields, and (2) it costs very little to
implement. Managers should be attracted to the idea that
this is a way of working better explanations of brand
switching data.
Key Words烉Social Network Analysis, Brand Switching
Matrix, Switching Cost
Lin, Wei-Jen
Assistant Professor
Department of Tourism Management
Far East University
[email protected]
opened its first retail outlet on the island in 1998. With
the aroma of its specialty coffee, the yuppie image
associated with its brand, and atmosphere of its
coffeehouses, such chain-coffee shops successfully
created a culture of its own among the country's upper
and middle classes. Eager to carve out a slice of the
lucrative coffee business created by higher-priced coffee
shops, many low-priced takeout coffee chains began to
enter the market, offering a cup of joe for less than half of
those of Starbucks, and enticing pastries at reasonable
prices. Thus, more chain-store coffee shops and
convenience stores reintroduced its fresh coffee began
from 2004. As of the end of 2008, the largest convenience
store 7-11 had sold more than 50 million cups island wide.
More than 4,000 stores around the country are now fitted
out with the concept, making the 7-11 Taiwan's largest
takeout coffee chain. There are three main streams of
coffee seller in Taiwan, namely, chain-store,
convenience-store and international brands. These coffee
sellers have their own distinguishing features as
advantages for competition. This paper will use SNA to
explain how coffee sellers can made their marketing
strategic decisions and consumers’ preferences that
represented in the forms of a brand switching matrix.
It is easy to understand that consecutive purchases,
many customers will re-purchase the same brand they
bought last time, while many others will buy a different
brand. Marketers are interested in both aspects of these
phenomena. Repurchasing is measured as a behavioral
loyalty metric, while brand switching is one of a number
of methods used to identify competitive market structure.
To attract consumers towards firms’ brands has become
the major capability of firms’ success. Particularly, it is
important for the survival of a firm to keep its current
customers, and to make them loyal to their brands.
Consumer decision to purchase a brand can be different
from that previously or usually purchased. Colgate and
Hedge (2001) indicate, brand switching can be
understood by price promotions, in-store displays,
superior availability, perceived improvements or
innovations in competitive brands, desire for novelty,
number of available brands, perceived risk, frequency of
purchase, changes in quality, or level of satisfaction with
the most recent purchase. Brand switching is most
common with brands that have no great perceived
variation in quality across brands. Understanding the
Introduction
Coffee is gradually becoming the drink of choice in
Taiwan, a society that prides itself on a rich tradition of
tea culture. Taiwanese have changed their idea of buying
takeout from convenience stores, forcing some in-store
coffee sellers to abandon the project after just a few years.
The local market began to take off after the Starbucks
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