Buying Modular Systems in Technology-Intensive Markets

R.T. Frambach, S. Stremersch, Allen M. Weiss, B. Dellaert

Research output: Contribution to JournalArticleAcademic

Abstract

Technology-intensive markets consist of products that are often interdependent and operate together as a modular system. Although prior research has extensively addressed standardization and network externalities in such markets, it has not addressed the buying of modular systems. The authors identify two focal decision dimensions of the buyer, namely the decision of whether to outsource system integration and the decision of how much to concentrate the purchase of system components with one or more suppliers. The authors develop a comprehensive production- and transaction-cost framework to explain companies' positions on these two decisions. They find that especially leakage and the buyer's know-how, together with the technological volatility the buyer faces, drive the preference for outsourcing system integration and the purchase concentration of system components. An empirical test in the market for telecommunications systems supports the theory developed.
LanguageEnglish
Pages335-350
Number of pages16
JournalJMR. Journal of Marketing Research
Volume40
Issue numberaugustus
DOIs
Publication statusPublished - 2003

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Buyers
System integration
Purchase
Leakage
Transaction costs
Empirical test
Outsourcing
Network externalities
Telecommunications
Suppliers
Production cost
Standardization

Cite this

Frambach, R.T. ; Stremersch, S. ; Weiss, Allen M. ; Dellaert, B. / Buying Modular Systems in Technology-Intensive Markets. In: JMR. Journal of Marketing Research. 2003 ; Vol. 40, No. augustus. pp. 335-350.
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Buying Modular Systems in Technology-Intensive Markets. / Frambach, R.T.; Stremersch, S.; Weiss, Allen M.; Dellaert, B.

In: JMR. Journal of Marketing Research, Vol. 40, No. augustus, 2003, p. 335-350.

Research output: Contribution to JournalArticleAcademic

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