An Examination of the Antecedents of the Consumer Make-Or-Buy Decision

Abstract

While businesses compete directly with each other, they also compete indirectly with households. Many of the products/services produced by businesses are also produced within the household and therefore substituted by consumers for purchases. There is limited empirical research in the marketing or related literature about this make-or-buy decision. This research provides a comprehensive review of disparate literatures to concisely specify antecedents/motivations to the make-or-buy decision; develops and tests a measurement protocol to measure the variables which influence the make-or-buy decision; and quantifies the tradeoff values or price differentials needed for consumers to shift from make-to-buy and vice versa. The results indicate that enjoyment, avoiding shopping bother, saving money, and quality are significant reasons consumers make products/services at home rather than buy them.

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Notes on contributors

John H. Wicks

John H. Wicks (Ph.D., University of Illinois) is a professor emeritus in the Department of Economics at the University of Montana. Recent publications include Population Research and Policy Review, Review of Income and Wealth, and others.

James Reardon

James Reardon (Ph.D., University of North Texas) is a Wells Fargo professor in the Marketing Department at the University of Northern Colorado. Recent publications have appeared in the Journal of Marketing, Journal of Retailing, and others.

Denny E. McCorkle

Denny E. McCorkle (D.B.A., University of Memphis) is a Professor of marketing at University of Northern Colorado. Recent publications are found in the Journal of Marketing, Journal of Marketing Education, and others.