A Study of Brand Switching Intention--Transaction Cost Theory Application

Company's existence bases on the customers it owns. The benefit that the customers bring about is the key factor that firm lasts and grows. Study of brand switching helps us understand the forces that lead consumers to stay with or switch to an other brand. Factors that affect brand switching intention found in the study are three types of costs derived from transaction cost theory. They are information searching cost, moral hazard cost, and asset specificity cost. Respondents were Taipei residents who were over the age of 18. The sample of 283 respondents in Taipei were took part in this study The Liniear Structure Relationship (LISREL) is used to conduct data analysis. The research results are as following. 1.Brand substitutability significantly affects brand switching intention positively. The more competitive offerings the higher brand switching intentions consumers have. 2.Brand variety seeking significantly affects brand switching intention positively. The more variety seeking motivation the higher brand switching intentions consumers have. 3.Brand substitutability is affected negatively by external information searching cost because additional time and efforts needed to access enough information for the transaction decision will reduce new brand trial desire. 4.Brand substitutability is affected negatively by moral hazard opportunism because increased perceived risks toward the transaction may harm consumers' willingness to try new brand. 5.Brand variety seeking is affected negatively by external information searching costs because additional time and efforts needed to access enough information for the transaction decision may reduce the variety motivation. 6.Brand variety seeking is affected negatively by asset specificity because lose of previous physical or nonphysical investment made by consumers and sellers in order to manage the transaction efficiently will restrain variety seeking motivation. 7.Consumer satisfaction does not affect brand switching intention directly but indirectly by brand loyalty. 8.Customer loyalty is affected by both customer satisfaction and asset specificity. The research results were supplemental to brand switching theory and can be applied to practical marketing and hairstylist service to holdup current customer and attract new customer strategy