The Unwilling Customer - How Organisations Deal with Customer-Related Problems on an Imperfect Market

Sammanfattning: According to neo-classical market theory the market is self-correcting and strives towards equilibrium. There are however instances when market imperfections occur. Market imperfections relating to customers can involve for instance customer inability to pay, insufficient knowledge or information, or lack of commitment or interest in consuming a product which is valuable for the customer. In these cases when market theories about a self-correcting equilibrium do not apply, there is a need for organisations to intervene in the market. In doing so there are certain mechanisms that organisations can use, and their actions are based on a certain logic. This thesis addresses how organisations handle imperfect markets with a customer-related problem and how their behaviour can be explained. The findings are based on one principal case study on Company X, and three complimentary case studies on organisations facing a similar problem. The findings conclude that customers often do not behave in a rational way, and organisations therefore use different organisational mechanisms to organise the market. Organisations create market imperfections in the form of barriers to entry to prevent competitors from entering the market, and switching costs to ensure that customers remain loyal to the own organisation. These market imperfections, that are positive for the organisation itself, are used to overcome the market imperfection stemming from a customer-related problem.