Then, for each of the switching cost types (procedural, financial, and relationa
ID: 447356 • Letter: T
Question
Then, for each of the switching cost types (procedural, financial, and relational), identify one product/service that has high switching costs and another that has low switching costs. Explain why.
The structure of the post should be like this:
High procedural switching costs and why
Low procedural switching costs and why
High financial switching costs and why
Low financial switching costs and why
High relational switching costs and why
Low relational switching costs and why
This post should be at least 500 words long.
Explanation / Answer
Procedural switching cost: procedural switching costs are related to time or effort required to obtain a benefit. An example of high procedural switching cost could be being appointed in an operation in a hospital, especially when it’s the first time being registered in this hospital and/or if your insurance isn’t working here. This requires a high procedure and data verification. An example of low procedural switching cost could be changing you cellphone services, for example changing to a plan that gives you more minutes to talk. This can be solved by a phone call.
Financial switching cost is associated to a loss of money in the change of supplier of a particular product or service. An example of high financial switching cost could be switching from android to mac or viceversa; changing from one operative system to another requires purchasing new devices such as cellphone, laptop and tablet according to each one’s needs.
In the case of relational switching cost, this is about discomfort that customers feel about a product or brand because of a change of supplier, quality, etc. An example of high relational switching cost is the case that Toyota and Bridgestone faced in 2000, when their recently released ford explorer has a lot of complaints from customers because of accidents caused by a bad quality tires on the side of Bridgestone, and a lack of quality revision from Ford company of the car design; this case costed the company not only costed a lot of money in lawsuits and the loss of the loyalty of many customers.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.