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A model for analyzing churn effect in saturated markets

A model for analyzing churn effect in saturated markets Purpose – The purpose of this paper is to propose a model that predicts information communication technology (ICT) adoption in saturated markets, to analyze the shifting behaviors of the subscribers and to present the results. Design/methodology/approach – By developing an expanded Bass model, the authors analyzed post‐adopters' switching behaviors in the mobile phone market, using the officially verified time‐series data for the number of mobile phone adopters in South Korea. Findings – The results show that: the expanded Bass diffusion model can delineate the stream of post‐adopter's switching behaviors in saturated ICT markets; based on innovation value p and imitation value q , the authors conclude that customer immigrations during market saturated period are mainly caused by innovation effect, which is closely related to launching innovative products; and fast mover still has its imitation effect, which is closely related to first mover advantage. Originality/value – The paper provides novel insights for the frame of practical strategies. To survive in a saturated market, late movers should continuously develop new and innovative products. In addition, fast movers should also develop innovative products to prevent customer immigrations, and they also should utilize their first mover advantage more efficiently, even in matured market. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Industrial Management & Data Systems Emerald Publishing

A model for analyzing churn effect in saturated markets

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References (58)

Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
0263-5577
DOI
10.1108/02635571111161271
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to propose a model that predicts information communication technology (ICT) adoption in saturated markets, to analyze the shifting behaviors of the subscribers and to present the results. Design/methodology/approach – By developing an expanded Bass model, the authors analyzed post‐adopters' switching behaviors in the mobile phone market, using the officially verified time‐series data for the number of mobile phone adopters in South Korea. Findings – The results show that: the expanded Bass diffusion model can delineate the stream of post‐adopter's switching behaviors in saturated ICT markets; based on innovation value p and imitation value q , the authors conclude that customer immigrations during market saturated period are mainly caused by innovation effect, which is closely related to launching innovative products; and fast mover still has its imitation effect, which is closely related to first mover advantage. Originality/value – The paper provides novel insights for the frame of practical strategies. To survive in a saturated market, late movers should continuously develop new and innovative products. In addition, fast movers should also develop innovative products to prevent customer immigrations, and they also should utilize their first mover advantage more efficiently, even in matured market.

Journal

Industrial Management & Data Systems – Emerald Publishing

Published: Aug 23, 2011

Keywords: ICT adoption; First mover advantage; Customer switching behaviors; Churn effect; Bass diffusion model; South Korea; Mobile telecommunications; Marketing

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