The market performance indicator: a macro understanding of service provider switching

Purpose

The purpose of this paper is to adapt the market performance indicator (MPI), used by the European Commission to evaluate market conditions, over time, to show that the MPI explains actual switching behavior better than stated intent and satisfaction. While research on service provider switching has focused on the outcomes of service transactions and the benefits of switching, there is little research on how consumers view market conditions as being favorable or not for switching.

Design/methodology/approach

The authors used a mixed methodology of focus groups and longitudinal survey research of cell phone consumers to evaluate the effect of the MPI on satisfaction, perceptions of value, switching intentions and behavior.

Findings

The MPI was found to influence perceptions of satisfaction and value, and was found to contribute strongly to actual switching behavior. The results also showed that an improvement in the MPI or market conditions lead to a much greater relationship between it and actual switching behavior, suggesting that there may well be important threshold level, upon which greater switching behavior occurs.

Originality/value

The MPI provides marketers and policy-makers with benchmarks to compare the consumer welfare of different markets in different countries. Switching studies with MPI figures can be more easily generalized to different contexts.