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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