The Origins of Captive Pricing: Electric Lamp Renewal SystemsJournal of Historical Research in Marketing
ISSN or ISBN1755-750X
DescriptionPurpose – The purpose of this paper is to describe the development of electric lamp renewal systems, an early, successful program to encourage the adoption of new technology, electric lighting. Design/methodology/approach – Much material for the research comes from a variety of archival sources and publications of the early part of the twentieth century. Findings – The free lamp renewal system was brilliant and effective: its high level of customer service and human contact dispelled fear raised by the new energy source, increasing the acceptance and use of electric lighting and thereby electricity. Lighting, in the absence of electrical appliances, was one of the few users of electricity. Thus, the electric companies created a marketing strategy that encouraged adoption of the new technology. Research limitations/implications – We examined the electric lighting industry at the turn of the twentieth century. Other examples of technology adoption could generalize our findings. Practical implications – Our research suggests that supportive programs, which are high in customer contact and customized service, can aid in the adoption of new technology and unfamiliar products. By encouraging the use of such free or cheap products, customers are induced to higher usage of related products that increase the revenue stream to the provider. Originality/value – The lamp renewal system is forgotten today, yet was a crucial factor in winning consumer acceptance of electric lighting and an early example of how companies can encourage adoption of new technology. Although the concept of uniformed men in trucks coming to customer homes once a month to clean and replace light bulbs is quaint – it worked!
Citation InformationRegina A. Greenwood, Charles D. Wrege and Peter Gordon. "The Origins of Captive Pricing: Electric Lamp Renewal Systems" Journal of Historical Research in Marketing Vol. 6 Iss. 4 (2014) p. 485 - 500
Available at: http://works.bepress.com/regina-greenwood/152/