Study On Customer’s Switching Barriers Of The Group-purchase Market

Authoritative survey shows the group purchase market has cooled and70percent of the websites are closed or transformed since the second half of2011. The situation has its root in that the market cannot find ways to make the customer resource keep increase and retain the existing customers. Because of the relatively low threshold, numerous imitators, thousands of websites fight against each other. What more, all websites are spare no efforts in promoting other than the quality of product/service or the shaping of the brand, moreover, they didn’t pay any attention to customer satisfaction and customer loyalty. All these are induce the customer loss and lead to insufficient earnings. This paper focus on the way letting the market goes out of the trouble and retains the customers.This article discussed how deeply the customer distribution and market parameters affect the switching barriers through build up the model.The research indicates that, in duopoly the competitive advantage of their relative balance or complementary scenario, the bulk of the high discount rate can stimulate the transfer of bulk manufacturers’ obstacles investment, but will force the follower use the low price strategy to hinder the customer transforming. Both of their strategy will be more aggressive at the moment. High losses of platform marginal utility could stoke the prices competition, and will force consumer surplus into enterprise profits. In this influence mechanism, marginal investment cost has effect on the leaders’and the followers’the balanced investment. When marginal investment cost is relatively small, only the followers will increase its transfer obstacles investment, while the marginal cost of the investment is relatively large, the leader’s balanced investment will increase.The study also found that, the relative advantage in system usability will make the decision be advantageous to leader, while transfer cost is the investment will weaken the follower disadvantage, and make the follower’s price decisions more aggressively. The former can raise the ability against low price, and the latter will increase the leader’s investment decision-making advantage further.In addition, the proportion of non-loyal users’distribution will increase the price competition between duopoly, and will furthermore reduce duopoly’s equilibrium price and profit. Meanwhile the balance of investment will depend on other parameters adjustment in the reality of the situation. For example, in followers’low user transfer cost circumstances, the leader tend to increase its balanced investment, while the followers will reduce its equilibrium investment; And when the followers of users transfer cost is high, the decision of the adjustment result is just the opposite.Finally, we also found that, the group purchase websites always have countermeasure to deal with the user transformation, among which the most direct strategy is improving equilibrium pricing to take up consumer surplus. However, in the long run, it may damage the entire user scale, which is adverse to the long time development of the market. Therefore, improve user satisfaction and user loyalty is the only way to reduce platform marginal utility cost, better achieve the user reservation and sustainable development and improve profits.