Question

A large software manufacturer attempts to lock in customers by making it difficult for customers to change to another product. The strategy used by the company is referred to as ________.

a. consumerist strategy.
b. low cost operation strategy
c. standardization strategy
d. switching costs strategy

Answer 1

Switching Costs Strategy

Step-by-step explanation:

Switching Costs represent costs that are to be incurred by a customer due to a change of products, service providers or brands. Switching costs which is usually quantified monetarily represents the effort and time involved in changing products, failure of the new product being switched to, exorbitant cancellation costs that may be set by brands and manufacturers and also the disruption of smooth daily operations.

The effect of switching costs strategy is that customers will consider them carefully and could be discouraged from making the switch or change in product simply as a result of the costs.

As seen in the question, any attempt time, psychological or effort put in place by a manufacturer to discourage a customer from switching brands or products or even services is a switching cost strategy.