The Influence of Product Design on Switching Decisions for Capital-intensive Technologies: The Case of MRI Purchasing in Research Facilities

This research investigates the role of product design on technology switching in the context of a capital-intensive product. I focus on switching rather than on new sales because switching is the primary means of changing market share in nearly mature markets. Further, the dominant logic — is that, because of switching costs and the related consequences, incumbents have a strong advantage when upgrading or replacing equipment. However, the literature on lead users suggests that those users at the cutting-edge are willing to meet the costs of changing technology because they have the capabilities needed to leverage significant advantages from the new technology. The extant literature on switching focuses primarily on consumers in highly competitive markets. There is little understanding of the antecedents of switching in business markets, especially in markets for capital-intensive technology-based products. This research investigates the influence of product design on switching behavior for capital-intensive high technology products, where buyers are faced with numerous implications and significant costs at each step of the process. The switching behavior for capital-intensive products has not been studied previously; because of this deficiency, we do not know the consequences for theory, that is, how different theoretical assumptions will contribute to the final decision to switch, or for managerial practice, that is, the kind of strategies managers should follow to retain existing buyers under such conditions. Previous literature did not explore explicitly the concept of product design as an influence on switching, because satisfaction and switching cost were widely used as determinants of switching decisions in competitive markets. This gap in knowledge is due to the difficulty in identifying a method that would allow one to differentiate among the products’ performance and how the difference would impact consumers’ objectives. It is also difficult for researchers to define the characteristics of high technology products that make certain products more attractive on the market than others, without substantial assistance from experts in particular products. These conditions create a barrier to investigating switching behavior for high technology products. This research is positioned in the overlapping area between product design and switching behavior. The linkage between these two bodies of literature has never been explored. The research answers two important questions: (1) what are the antecedents of technology switching in a context where there are considerable costs?, and (2) does product design encourage technology switching behavior? Dynamic capabilities theory is used to explain this research, because the decision to switch an old technology for a new one in rapidly changing technology markets is about renewing resources and capabilities to maintain competitive advantages. This research is conducted in the context of the Magnetic Resonance Imaging (MRI) industry as a case study. Considerable switching has occurred in this industry over the last decade, resulting in this industry offering a good opportunity to investigate the reasons why. The market is divided into different segments based on the region and the health care system. I selected the university hospitals segment, MRI research centers, to conduct this research study, because it is feasible to track the technology switching process for this segment over time and because this segment’s market is nearly mature. Data were collected from multiple sources including personal interviews, online surveys, annual conference database, product technical reports, and patent data. In this study, the independent variable is product design and other variables related to switching costs and marketing strategies. The dependent variable is switching behavior, which has two values: (1) “switched,” defined as purchasing a new technology from a different supplier, and (2) “not switched,” defined as repurchasing from the same supplier. After collecting surveys from decision makers who purchased MRI technology, I use logistic regression analysis to test the hypothesis that the product design has a direct impact on the switching decision of capital-intensive products. Research findings have shown that buyers are willing to switch to a different technology in spite of high associated costs, particularly when they are faced with a product that restricts their capabilities. Product design represents the most influential factor underpinning switching, because it provides more capabilities that motivate switching. Notwithstanding the fact that moving to a new supplier imposes significant challenges, including technology and relationship incompatibility, findings confirm that this distinction in product capabilities has induced some MRI buyers to move to a new supplier in order to maintain a competitive market position. The findings also confirm that support during the transition process can be achieved through marketing strategies. The findings of this research clarify our understanding of the switching behavior of capital-intensive products where successful product design is expected to play a significant role. This behavior is expected to be different from the behavior identified in previous research, because the previous research was conducted using mainly competitive markets with frequently purchased products. For lead users faced with products that restrict their capabilities, switching is an expected option despite high switching costs. Those early switchers, having capitalized on the real value of the new product, serve to encourage other users to pursue the same behavior later. The outcomes from this MRI study — as one example of a high technology device — could be applied to the different industries that share the same characteristics in terms of high rates of technological change and high switching costs, for example, military devices, aircrafts, and advanced medical and industrial devices.1 yea

Dynamics of Muslim consumers’ behavior toward Halal products: Exploration study using fMRI technology

Purpose Since Islamic markets are growing substantially, there is an urgent need to gain a better understanding of how Muslim consumers perceive products from a religious perspective. The purpose of this paper is to investigate the brain responses of Muslim consumers to Halal and non-Halal products using a functional magnetic resonance imaging (fMRI) technology. Design/methodology/approach The research model is a simplified version of the theory of planned behavior. The initial experiment began by asking participants to divide a set of images into two groups: Halal and non-Halal products. The fMRI experiment uses a blocked design approach to capture brain activities resulting from presenting the two groups of images to participants, and to record the strength of their attitudes toward purchasing the products. Findings Across all participants, the level of brain activation in the ventromedial prefrontal cortex increased significantly when Halal images were presented to them. The same results emerged when the Halal images showed raw and cooked meat. The variations in the results may be due to the high emotional sensitivity of Muslim consumers to using religious products. Research limitations/implications This study uses a unique approach to monitor brain activity to confirm that consumers from specific market segments respond differently to market products based on their internal beliefs. Findings from this study provide evidence that marketing managers targeting Muslim markets should consider the sensitivity of presenting products in ways that reflect religious principles, in order to gain higher acceptance in this market segment. Originality/value Although the literature reports considerable research on Muslim consumers’ behavior, most of the previous studies utilize conventional data collection approaches to target broad segments of consumers by using traditional products. This paper is the first to track the reactions of the Muslim consumer segment to specific types of market products.Scopu

Services marketing practices in diverse cultures: Canada compared to Qatar

Purpose The service marketing literature has traditionally argued that the marketing practices of service firms that operate in diverse cultures should also differ. This paper aims to investigate this argument by examining the marketing practices of service firms in two highly diverse countries “Canada and Qatar” in the context of a contemporary conceptual framework. Design/methodology/approach Survey data were collected in both countries using a self-administered questionnaire that was used in previous contemporary marketing practice (CMP) studies. The data analysis was conducted in two stages. First, descriptive statistics were used to determine cross-national differences in the intensity of use of various CMP activities in Qatar compared to Canada. Second, cross-national differences in various combinations of marketing practices were identified using a cluster analysis. Findings The results indicate that service firms in both countries have more similarities than differences and that the overall patterns of marketing practices are similar. In addition, the firms’ marketing practices reflect aspects of all four marketing approaches rather than just one. Research limitations/implications The study was conducted in only two countries, thus generalisability of its findings and conclusions may not be possible. Practical implications The results of this study can help marketers to better understand the changing marketing environment and identify new marketing solutions when operating in different environments. Originality/value This study enhances the literature on service marketing and expands the application of the CMP framework to a new context that has not been addressed in previous studies.Scopu

Competitive Dynamics Between Multinational Companies and Local Rivals in Emerging Markets

Multinational Companies from Emerging Economies (EMNCs) have become key players in the global economy. EMNCs have started to operate in highly dynamic, competitive environments where they are faced with competition from multinational companies (MNCs) from developed economies. This study applied Mutlu et al.’s (2015) awareness–motivation–capability (AMC) framework to the airline industry to investigate how EMNCs outperform MNCs. The development of each round of Mutlu et al.’s framework was tested using secondary data sources that cover 16 years, from 2001 to 2016. A fourth round, relating to the determination of ‘who will be the market leader’, was added to the framework and tested. The findings demonstrate that firms’ awareness and capabilities evolve in each round to develop the competitive advantages required to enhance their market position. The complex nature of competition requires firms to analyse information constantly to define key influential factors and to build essential capabilities and resources to initiate an action strategy quickly. From a managerial perspective, it is important for managers to build a comprehensive view of the competition and understand how this competition is evolving over time, to develop capabilities, pursue new opportunities and predict competitors’ responses

Does trade openness mitigate environmental degradation in Organisation for Economic Co-operation and Development (OECD) countries? Implications for achieving sustainable development

The link between trade openness and CO2 emissions is a key research focus in times of pressing global sustainability needs and ongoing climate change discussions. In this study, we address the critical issue of the impact of trade openness on CO2 emissions in 20 OECD countries over a 150-year period using historical datasets. We investigate how trade openness affects environmental sustainability within this group of nations. To overcome the challenges related to heterogeneity and cross-sectional dependence, we applied robust cointegration techniques. Our analysis reveals direct and indirect impacts of trade openness on CO2 emissions. The direct effect demonstrated a positive correlation between trade openness and CO2 emissions, whereas the indirect effect, mediated by income growth, exerted a counteractive negative influence on this relationship. These divergent effects support the environmental Kuznets curve hypothesis. Our findings suggest that as income levels rise, the indirect effect gradually outweighs the direct effect, leading to a significant reduction in long-term CO2 emissions in OECD countries.Scopu

Preface

[No abstract available]Scopu