FIRST COME, FIRST SERVED: INVESTIGATING STRATEGIES TO OVERCOME CONSUMER LEAPFROGGING BEHAVIOUR

Abstract

The phenomenon of ‘consumer leapfrogging’ represents a conscious shift of consumers’ purchase decision for an innovation to a future product generation, and results in lower-than-expected demand. As consumers skip product generations, new product diffusion for the initial innovation and corresponding company turnover is capped. While previous studies highlight the importance of consumer leapfrogging behaviour, effective marketing strategies to attenuate detrimental consequences are lacking. To close this research gap, this paper empirically tests the effectiveness of various marketing strategies (trade-in program, bonus program, money-back guarantee, and product bundles) as potential countermeasures to consumer leapfrogging via a scenario-based online experiment with a 5 (four marketing strategies and control group) × 2 (low/high radical product) between-subjects design. Our results reveal that trade-in and bonus programs as well as money-back guarantees are effective countermeasures to consumer leapfrogging behaviour. Furthermore, our findings also show that the effectiveness of the instruments decreases with the degree of product radicality.