Switching costs in the European postal service. Are there any solutions?

Carlos Pateiro-Rodriguez, Javier Prado-Domínguez, Jesús Manuel García-Iglesias, José Manuel Barreiro-Viñán

Abstract


This article examines the costs of switching that may exist in the European postal sector, where it is carried out an ambitious process of opening to competition since 1997. Inadequate regulation of the access to some elements of postal infrastructure or services within the scope of the universal postal service exists. This article proposes adaptations to ensure transparent and non-discriminatory access conditions to elements of postal infrastructure in line with the sectorial directives aimed at strengthening competition in the long term in the postal market. The proposed adaptations focus on services such as postcode systems, address databases, post office boxes, delivery boxes, re-direction and return to sender services. All of them can help reduce the switching cost and thus strengthen competition.

Keywords


Liberalization; Universal postal service; Switching costs; Postal network

Full Text:

PDF

References


Abramson, Charles, Rick L. Andrews, Imram S. Currim and Morgan Jones (2000) ‘Parameter bias from unobserved effects in the multinomial logit model of consumer choice’, Journal of Marketing Research 37(4): 410–26.

Armstrong, Mark S. and David E. Sappington (2006) ‘Regulation, Competition and Liberalization’, Journal of Economic Literature 44(2): 326-66.

Burnham, Thomas A., Judy K. Frels and Vijay Mahajan (2003) ‘Consumer switching costs: A typology, antecedents, and consequences’, Journal of the Academy of Marketing Science 31(2): 109-26.

Crew, Michael A. and Paul R. Kleindorfer (2005) ‘Competition, universal service and the graveyard spiral’, in Michael A. Crew and Paul R. Kleindorfer (eds) Regulatory and economic challenges in the postal and delivery sector. New York, NY: Kluwer, pp. 1-30.

Crew, Michael A. and Paul R. Kleindorfer (2006) ‘The welfare effects of entry and strategies for maintaining the USO in the postal sector’, in Michael A. Crew and Paul R. Kleindorfer (eds) Progress Toward Liberalization of the Postal and Delivery Sector. New York, NY: Springer, pp. 3-22.

Dijl, Paul, Eric Van Damme and Pierre Larouche (2006). ‘Regulating access to stimulate competition in postal markets? ’, in Michael A. Crew and Paul R. Kleindorfer (eds) Progress Toward Liberalization of the Postal and Delivery Sector. New York, NY: Springer, pp. 153-62.

Deligonul, Seyda, Daekwan Kim, Anthony S. Roath and Erin Cavusgil (2006) ‘The Achilles’ heel of an enduring relationship: Appropriation of rents between a manufacturer and its foreign distributor’, Journal of Business Research 59(7): 802-810.

Directive 97/67/EC on common rules for the development of the internal market of Community postal services and the improvement of quality of service. Official Journal of the European Communities 21.1.98. L15/14-25.

Directive 2002/39/EC Amending Directive 97/67/EC with regard to the further opening to competition of Community postal services. Official Journal of the European Communities 5.7.2002. L176/21-25.

Directive 2008/6/EC Amending D/EC with regard to the full accomplishment of the internal market of Community postal services. Official Journal of the European Union 27.2.2008. L52/3-20.

ECORYS Nederland BV (2008) ‘Main developments in the postal sector (2006-2008) ’, report for the EC, September.

Fabra, Natalia and Alfredo García (2015) ‘Dynamic price competition with switching costs’, Dynamic Games and Applications 5(4): 540-567.

Fève, Fréderique, Jean-Pierre Florens, Frank Rodriguez and Soterios Soteri (2010) ‘Forecasting mail volumes in an envolving markete invironment’, in Michael A. Crew and Paul R. Kleindorfer (eds) Heightening Competition in the Postal and Delivery Sector. Northampton, MA: Edward Elgar Publishing Limited, pp. 116-134.

Fratini, Alessandra, Bernard Roy and Joost Vantomme (2010) ‘Access to infrastructure and service elements in the postal sector’, in Michael A. Crew and Paul R. Kleindorfer (eds) Heightening Competition in the Postal and Delivery Sector. Northampton, MA: Edward Elgar Publishing Limited, pp. 22-37.

Ghosh, Bikram and Michael R. Galbreth (2013) ‘The Impact of Consumer Attentiveness and Search Costs on Firm Quality Disclosure. A Competitive Analysis’, Management Science 59(11): 2604-2621.

Jones, Michael A., David L. Mothersbaugh and Sharon E. Beatty (2002) ‘Why customers stay: measuring the underlying dimensions of services switching costs and managing their differential strategic outcomes’, Journal of Business Research 55(6): 441-450.

Jones, Michael A., Kristy E. Reynolds, David L. Mothersbaugh and Sharon E. Beatty (2007) ‘The positive and negative effects of switching costs on relational outcomes’, Journal of Service Research 9(4): 335-355.

Jonsson, Per, and Sten Selander (2006) ‘The Real Graveyard Spiral. Experiences from the Liberalized Swedish Postal Market’, in Michael A. Crew and Paul R. Kleindorfer (eds) Progress Toward Liberalization of the Postal and Delivery Sector. New York, NY: Springer, pp. 359-366.

Klemperer, Paul (1995) ‘Competition when consumers have switching cost: An overview with applications to industrial organization, macroeconomics, and international trade’, Review of Economic Studies 62(4): 515-539.

Levesque Terrence J., and Gordon H. McDougall (1996) ‘Customer dissatisfaction: the relationship between types of problems and customer response’, Canadian Journal of Administrative Sciences 13(3): 264-76.

Martin Vance L., Chris Paterson and Jessie X. Wang (2012) ‘Forecasting letter volumes: augmenting econometric baseline projections’, in Michael A. Crew and Paul R. Kleindorfer (eds), Multi-modal competition and the future of mail, Edward Elgar Publishing Limited, Northampton, Massachusetts, pp. 60-76.

McAfee Preston, Hugo Mialon and Williams, Michael A. (2004) ‘What is a barrier to entry?. American Economic Review 94(4):461-65.

Okholm H., Winiarczyk M., Möller A. and Nielsen C. (2010) Main developments in the postal sector (2008-2010), Copenhagen Economics. www.copenhageneconomics.com.

Palmatier Robert W., Rajiv P. Dant, Dhruv Grewal and Kenneth R. Evans (2006) ‘Factors influencing the effectiveness of relationship marketing: A meta-analysis’, Journal of Marketing 70(4):136-53.

Pateiro Rodríguez Carlos and Javier Prado Domínguez (2010) ‘Un análisis de la transformación del servicio universal y el ámbito reservado en las políticas para la competencia del sector postal en la Unión Europea’, Gestión y Política Pública 19, 187-237.

Pateiro Rodríguez Carlos, García Iglesias Jesús M. and José M. Barreiro Viñán (2013a) ‘Las dimensiones territoriales urbana e interurbana de la liberalización del sector postal y cuestiones de ineficiencia del acceso a la red’, Urban Public Economics Review 17, 78-105.

Pateiro Rodríguez Carlos, José M. Barreiro Viñán and García Iglesias Jesús M. (2013b) ‘Efectos de los costes de cambio y de retención sobre el bienestar social en el proceso de apertura del servicio postal europeo’, Anales de Economía Aplicada 27, 209-230.

Prado Domínguez, Javier and Carlos Pateiro Rodríguez (2012) ‘La prestación del servicio postal universal ¿conlleva un riesgo inexorable de quiebra?’, Revista de Ciencias Sociales 83 (1):1-9.

Patterson Paul G. and Tasman Smith (2003) ‘A cross-cultural study of witching barriers and propensity to stay with service providers’, Journal of Retailing 79(2): 107-20.

Plaut Economics (2007) ‘Opening postal markets in Switzerland. Monopolistic bottlenecks, technical co-ordination and social regulations’, Olten, January.

Porter, Michael E. (1980) Competitive strategy: Techniques for analysing industries and competitors, Free Press, New York.

Reinartz, Werner J. and Vinod Kumar (2003) ‘The impact of customer characteristics on profitable lifetime duration’, Journal of Marketing 67(1):77-99.

Seetharaman, P.B. (2003) ‘Probabilistic versus random-utility models of state dependence: an empirical comparison’, Journal of Research in Marketing 20(1): 87-96.

Seetharaman, P.B., Andrew Ainslie and Pradeep K. Chintagunta (1999) ‘Investigating Household State Dependence Effects across Categories’, Journal of Marketing Research 36(4):488-500.

Sharma, Neeru and Paul G. Patterson (2000) ‘Switching costs, alternative attractiveness and experience as moderators of relationship commitment in professional, consumer services’, International Journal of Service Industry Management 11(5):470-90.

Shi, Mengze, Jeonweng Chiang and Byong-Duk Rhee (2006) ‘Price Competition with Reduced Consumer Switching Costs: the Case of Wireless Number Portability in the Cellular Phone Industry’, Management Science 52(1), 27-38.

Stigler, George J. (1968) ‘Barriers to entry, economies of scale, and firm size’, in George J. Stigler (ed.) The organization of Industry , Homewood, IL: Irwin, pp. 67-70.

Trinkner, Urs and Martin Grossman (2006) ‘Forecasting Swiss mail demand’, Michael A. Crew and Paul R. Kleindorfer (eds), Progress toward Liberalization of the Postal and Delivery Sector. Springer, New York, pp. 267-80.

Valenzuela, Fredy, David Pearson and Roger Epworth (2005) ‘Influence of switching barriers on service recovery evaluation’, Journal of Service Research, Special Issue, December: 239-57.

Varela, Concepción, Rodolfo Vázquez and Victor Iglesias (2009) ‘Comportamiento de abandono de la relación de un cliente con la empresa en un contexto de fallo y recuperación del servicio’, Cuadernos de Economía y Dirección de la Empresa 12(40):143-70.

Viard, V. Brian (2007) ‘Do switching costs make markets more or less competitive? The case of 800-number portability’, RAND Journal of Economics 38(1): 146-63.

Villas-Boas, J. Miguel (2004) ‘Consumer Learning, Brand Loyalty, and Competition’, Marketing Science 23(1): 134-45.

Villas-Boas, J. Miguel (2006) ‘Dynamic Competition with Experience Goods’, Journal of Economics and Management Strategy 15(1):34-66.

White, Lesley and Venkata K. Yanamandram (2006) ‘Exploring the switching costs-behavioural loyalty relationship amongst dissatisfied customers in the B2B services sector’, Research online, University of Wollongong. Library. Available at: http://ro.uow.edu.au/commpapers/235/.

White, Lesley and Venkata K. Yanamandram (2007) ‘A model of customer retention of dissatisfied business services customers’, Managing Service Quality 17(3):298-316.

Woisetschläger, David M., Patrick Lentz and Heiner Evaschitzky (2011) ‘How habits, social ties, and economic switching barriers affect customer loyalty in contractual service setting’, Journal of Business Research 64(8): 800-8.


Refbacks

  • There are currently no refbacks.




Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

RepecSparc EuropeCOREEconBib