A simple definition of Switching cost, also known as Switching barrier, is by Thompson and Cats-Baril who define Switching costs as “the costs associated with switching supplier”. On the same lines, Farrell and Klemperer refer to switching cost as “a consumer faces a switching cost between sellers when an investment specific to his current seller must be duplicated for a new seller”.
In short, Switching Costs are any costs – tangible or intangible – that a consumer has to bear when changing between brands, products or suppliers. Since a buyer’s product specification, purchasing cycle, production equipment, and other factors are directly proportional to the present supplier’s production and operation, switching between suppliers is bound to cost money, time, effort and other factors to the buyer and this cost is referred to as Switching Cost for the buyer.
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