ELECTRICITY SUPPLIER SWITCHING: A CONCEPTUAL MODEL BASED ON MIGRATION THEORY

Abstract

Electricity sector liberalization is moving forward with the purpose of efficiency, better customer service, and lower prices; however it has not fully succeeded yet, neither in Europe nor in the rest of the world. While service provider switching is an indicator of successful liberalization, it also means customer loss and acquisition from the electricity suppliers’ point of view. Therefore, it has a significant importance for both the market regulator and market participants including customers and suppliers, making it a concept that should be understood thoroughly. This paper aims to build a conceptual model of electricity supplier switching behavior to be tested for a relatively neglected customer segment in the business to business market [B2B]: small and medium enterprises [SME]s. The model can also be used for business to consumer [B2C] segment because of the similar behaviors of small organizations and individuals. The model proposed in this study is mainly based on the study of Bansal et al. (2005) who adopt push, pull, and moorings [PPM] migration model to switching, using the similarities between human migration and customer switching. An extensive literature research is conducted to support and contribute to the existing PPM model and to have an extended version of it.

Keywords

• Service switching,Switching factors,Pull-Push-Mooring Model,Migration theory,Utilities

References

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9. address: http://www.oib.gov.tr/tedas/tedas.htm APPENDIX
10. Table 2: Studies that include service quality as a switching factor switching attitude
11. service quality | B2C: Bansal (1997), Bansal and Taylor (1999)
12. service quality | B2C: Anton et al. (2007), Babu (2014) B2B & C: Zeithaml et. al. (1996a)
13. service failure | critical incident B2C: Anton et al. (2007)
14. product quality | B2C: Kim (2008)
15. service quality | B2C: Clemes et al. (2010) service failure | B2C: Colgate and Hedge (2001),
16. Gerrard and Cunningham (2004), reactional triggers B2C: Roos and Gustafsson (2007), core
17. service failure B2C: Keaveney (1995) service recovery | B2C: Colgate and Hedge (2001),
18. Colgate and Lang (2001), response in service failure B2C: Keaveney (1995), service
19. encounter failures B2C: Keaveney (1995) breadth of services | B2C: relationship breadth,
20. number of subscriptions1 B2C: Abdelrahmamn (2011), range of goods B2C: Roos (1999),
21. value added services B2C: Makwana et al. (2014), service attributes (C)2 B2C: Lewis and
22. Soureli (2006) convenience | inconvenience B2C: Keaveney (1995), Gerrard and
23. Cunningham (2004) number of bank branches B2C: distance B2C: Clemes et al. (2010)
24. location B2C: Roos (1999)
25. behavioral intention service quality B2C: Cronin et al. (2000) B2B: Schertzer (2006) loyalty
26. Miller (2007) quality of teaching3 B2C: Hennig-Thurau et al. (2001) call quality B2C: Kim
27. and Yoon (2004) service failure | B2C: Buttle and Burton (2002) service recovery | B2C:
28. Buttle and Burton (2002) service attributes (C)4 B2C: Lewis and Soureli (2006)
29. Convenience | service attributes (B) 3 B2C: Lewis and Soureli (2006)
30. service quality | B2C: Cronin and Taylor (1992) service recovery | B2B: White and Yanamandram (2007)
31. service quality B2B: Lam et al. (2009)
32. service recovery | B2C: Colgate et al. (2007)
33. relationship breadth B2C: Gustafsson et al. (2005) retention
34. terms belong to banking industry
35. Service attributes have measures covering a number of separate constructs representing (A)communication,
36. (B)convenience, and (C)innovative products
37. 3 terms belong to education sector
38. Service attributes have measures covering a number of separate constructs representing (A)communication,
39. (B)convenience, and (C)innovative products
40. Table 3: Studies that include prior switching behavior as a switching factor
41. prior switching behavior | B2C: Thomas et al. (2004)
42. prior switching behavior | B2C: Ganesh et al. (2000)6 length of business relationship | B2B:
43. Lam and Burton (2006)
44. prior churn | B2C: Gustafsson et al. (2005) Retention
45. Table 4: Studies that include satisfaction as a switching factor Switching intention
46. satisfaction | B2C: Bansal (1997), Bansal and Taylor (1999), Walsh et al. (2005), Walsh et al. (2006)
47. satisfaction | B2C: Keaveney and Parthasarathy (2001)7 , Kim and Yoon (2004)
48. satisfaction | B2C: Cronin et al. (2000)
49. satisfaction | B2C: Rust and Zahorik (1993), Jones and Sasser (1995), Gremler and Brown
50. (1996), Mittal and Lassar (1998), Oliver (1999), Beerli et al. (2004), Buttle and Burton
51. (2002), Hennig-Thurau et al. (2001), Ball et al. (2004), Kim et al. (2004), Aydin et al.
52. (2005), Lewis and Soureli (2006), Eshghi et al. (2007), Li and Petrick (2008), Lai et al.
53. (2009), Ibáñez et al. (2006), Hartmann and Ibanez (2007) B2B: Lam et al. (2004)
54. satisfaction (in relationship quality) B2B: Rauyruen & Miller (2007) relationship
55. satisfaction | B2B: Caceres and Paparoidamis (2007)
56. Repurchase intentions satisfaction |
57. B2C: Cronin and Taylor (1992), Jones (1998 B2B: Patterson and Spreng (1997)
58. satisfaction | B2B: Molinari et al. (2008)
59. satisfaction | B2C: Gustafsson et al. (2005) Retention
60. Table 5: Studies that include value as a switching factor
61. Behavioral intention
62. value | B2C: Cronin et al. (2000)
63. value | B2C: Buttle and Burton (2002), Chiu et al. (2004), Lewis and Soureli (2006), Lai et Loyalty
64. al. (2009) B2B: Lam et al. (2004)
65. Repurchase intentions value | B2B: Patterson and Spreng (1997) Repurchase behavior
66. value | B2B: Molinari et al. (2008)
67. Authors study the the probability of a firm reacquiring a customer according to the lapse duration
68. Authors don't directly mention the related construct as a factor, but group customers accordingly and identify their differences
69. Authors don't directly mention the related construct as a factor, but group customers accordingly and identify their differences
70. Table 6: Studies that include trust as a switching factor
71. switching behaviour reputation | B2C: Clemes et al. (2010)0 ethical problems | B2C: Keaveney (1995) loyalty
72. (2006), Ibáñez et al. (2006) B2B: Caceres & Paparoidamis (2007) brand trust | B2C:
73. Hartmann and Ibanez (2007) confidence benefits | B2C: Hennig-Thurau et al. (2001) trust
74. (in relationship quality) B2C: Hennig-Thurau et al. (2001) B2B: Rauyruen & Miller (2007)
75. anticipated future trust of supplier | B2B: Doney and Cannon (1997)0 trust of sales- person | B2B: Doney and interaction reasons to stay
76. confidence | B2C: Colgate et al. (2007)
77. Table 7: Studies that include commitment as a switching factor switching intention
78. commitment | B2C: Anton et al. (2007)
79. commitment | B2C: Hennig-Thurau et al. (2001) B2B: Caceres and Paparoidamis (2007)
80. emotional commitment (in relationship quality) | B2C: Hennig-Thurau et al. (2001)
81. commitment (in relationship quality) | B2B: Rauyruen & Miller (2007)
82. commitment | B2C: Gustafsson et al. (2005) retention
83. Table 8: Studies that include attitude and subjective norms as a switching factor switching attitude
84. subjective norms B2C: Bansal (1997), Bansal and Taylor (1999)
85. switching intention attitude towards switching / subjective norms B2C: Bansal (1997), Bansal and Taylor (1999)
86. Table 9: Studies that include influential triggers as a switching factor
87. Switching behaviour influential triggers | B2C: Roos and Gustafsson (2007) advertisement | B2C: Clemes et al. (2010)
88. Table 10: Studies that include price as a switching factor switching attitude
89. switching intention price changes | B2C: Anton et al. (2007)0 switching decision
90. price | B2C: Kim (2008)0
91. price | B2C: Roos (1999), Thomas et al. (2004), Clemes et al. (2010) pricing | B2C: Keaveney
92. switching behaviour (1995), Gerrard and Cunningham (2004), Makwana et al. (2014) pricing problems | B2C:
93. Colgate and Hedge (2001) interest rate loyalty
94. 8 | B2C: Abdelrahmamn (2011)
95. price | B2B: Naumann et al. (2010)0
96. terms belong to banking industry
97. Table 11: Studies that include alternative attractiveness as a switching factor
98. attraction by competitors | B2C: Keaveney (1995) apathy (B)9 | B2C: Colgate and Lang (2001)
99. quality of alternative options | B2C: Li and Petrick (2008) better service | B2B: Naumann Loyalty et al. (2010)
100. Repurchase intentions attractiveness of alternatives | B2B: White and Yanamandram (2007) Reasons to stay
101. alternatives | B2C: Colgate et al. (2007)
102. Table 12: Studies that include segment focus as a switching factor
103. Behavioral intention image - industry knowledge | B2B: Schertzer (2006) image - customer focus and expertise |
104. B2B: Schertzer (2006)
105. Table 13: Studies that include variety seeking as a switching factor Switching behaviour
106. variation B2C: Roos (1999)
107. Repurchase intentions
108. inertia (B)10 B2B: White and Yanamandram (2007)
109. Table 14: Studies that include switching costs as a switching factor
110. switching attitude information search costs | B2C: Gamble et al. (2009)
111. switching decision switching costs | B2C: Kim (2008) switching behaviour
112. Abdel-rahmamn (2011) apathy (A)14 | B2C: Colgate and Lang (2001) negativity | B2C: Colgate and Lang (2001)
113. switching costs | B2C: Gremler and Brown (1996), De Ruyter et al. (1998), Beerli et al. (2004),
114. Aydin and Özer (2004), Aydin et al. (2005), Ibáñez et al. (2006), Hartmann and Ibanez (2007
115. B2B: Lam et al. (2004) investment in the relationship | B2C: Li and Petrick (2008)
116. switching costs | B2C: Jones et al. (2000) B2B: White and Yanamandram (2007) inertia (A)15 |
117. B2B: White and Yanamandram (2007) intentions
118. 9 Apathy has two measures; (A) relating to switching costs and (B) relating to attractiveness of alternatives
119. 10 White and Yanamandram (2007) define two dimensions of inertia: "(A) Inertia as the outcome, the customer
120. thinks that the alternatives are unattractive due to switching costs), (B) Inertia as a behavioural characteristic
121. defined as "the customer is lazy, inactive, or passive"
122. 11 Matthews et al. (2008) found out that "switching costs on the relationship between a person’s desire to switch
123. banks and the likelihood that they will actually do so", however in the table it is located under switching
124. behaviour column for the sake of the presentation
125. Relationship investment has two parts of measures; A relating to switching costs and B relating to social bonds
126. terms belong to banking industry
127. Apathy has two measures; (A) relating to switching costs and (B) relating to attractiveness of alternatives
128. 15 White and Yanamandram (2007) define two dimensions of inertia: "(A) Inertia as the outcome, the customer
129. thinks that the alternatives are unattractive due to switching costs), (B) Inertia as a behavioural characteristic
130. defined as "the customer is lazy, inactive, or passive" retention switching costs | B2C: Hess and Ricard (2003) reasons to stay switching costs | B2C: Colgate et al. (2007) time and effort |B2C: Colgate et al. (2007)
131. Table 15: Studies that include social bonds as a switching factor switching intention
132. switching behaviour relational bonds | B2B: Lam et al. (2009)
133. relationship investment (B)16 | B2C: Colgate and Lang (2001)
134. Inter-personal bonds | B2C: Gremler and Brown (1996)0 special treatment | B2C: Gremler
135. and Brown (1996) special treatment benefits | B2C: Hennig-Thurau et al. (2001) social
136. benefits | B2C: Hennig-Thurau et al. (2001) personnel | B2C: Roos (1999)
137. repurchase intentions interpersonal relationships B2B: White and Yanamandram (2007) reasons to stay
138. social bonds | B2C: Colgate et al. (2007) emotional bonds B2C: Colgate et al. (2007)
139. Table 16: Studies that include image as a switching factor Loyalty
140. image | B2C: Lewis and Soureli (2006) brand image | B2C: (Kim and Yoon (2004) corporate image | B2C:
141. Aydin and Özer (2004)
142. Relationship investment has two parts of measures; A relating to switching costs and B relating to social bonds