The Measurement of Switching Costs as a Perception of Customers in the Turkish Credit Card Market

Journal of Electrical & Electronics Engineering, Vol. 9, No. 2, 2009

14 Pages Posted: 10 Apr 2013

See all articles by Serkan Aydin

Serkan Aydin

Gebze Institute of Technology (GIT)

Gökhan Özer

Gebze Technical University

Halim Kazan

Gebze Institute of Technology (GIT)

M. Cuneyt Doğruer

Gebze Institute of Technology (GIT)

Date Written: October 7, 2009

Abstract

Nowadays, protecting market share against rival firms is more important than ever due to the decline in market growth rate and the increase in the competition. The main requirement for protecting market share is to create loyal customers. Switching costs are one of the strategies for reaching this goal. Switching costs are important factors in terms of both banks and customers. Switching costs occur, when a customer prefers a different brand in his new purchasing decision process and they contain financial, procedural and psychological dimensions.

In this study, the aim is to develop a third-order measurement model with all the dimensions. Such dimension as multi-dimensional switching costs is used to determine switching costs value of subscribers in Turkish credit card market. We also examined the existing studies in literature on switching costs with regard to credit cards. It may have been previously studied but in the literature we didn’t come across any metrics for measuring the switching costs and perception costs of the customers in considering three dimensions of this structure or model. We developed a third-order measuring model and tested the third-order measurement model’s validity and reliability and it was verified using exploratory and confirmatory factor analysis. We used a survey of switching costs and perception costs associated with the banks and credit card users. The survey was sent to 1020 credit card users. 450 users responded to the survey. A return rate of the survey was 45%. Psychological switching costs were found to be the most important factor.

Keywords: switching costs, credit card market, third-order measurement model, confirmatory factor analysis

Suggested Citation

Aydin, Serkan and Özer, Gökhan and Kazan, Halim and Doğruer, M. Cuneyt, The Measurement of Switching Costs as a Perception of Customers in the Turkish Credit Card Market (October 7, 2009). Journal of Electrical & Electronics Engineering, Vol. 9, No. 2, 2009, Available at SSRN: https://ssrn.com/abstract=2247428

Serkan Aydin (Contact Author)

Gebze Institute of Technology (GIT) ( email )

Cayirova-Gebze
Kocaeli, Istanbul 41400
Turkey

Gökhan Özer

Gebze Technical University ( email )

Cayirova-Gebze
Kocaeli, Istanbul 41400
Turkey

Halim Kazan

Gebze Institute of Technology (GIT) ( email )

Cayirova-Gebze
Kocaeli, Istanbul 41400
Turkey

M. Cuneyt Doğruer

Gebze Institute of Technology (GIT) ( email )

Cayirova-Gebze
Kocaeli, Istanbul 41400
Turkey

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