Branding of post‐purchase ancillary products and services: An application in the mobile communications industry

• Published in: European journal of marketing 2010-01, Vol.44 (5), p.547-566
• Main Authors: Baker, William E., Sciglimpaglia, Donald, Saghafi, Massoud
• Format: Article
• Language: English
• Subjects: Affinity credit cards; Alliances; Brand equity; Brand loyalty; Brand names; Brands; Cellular telephones; Co-branding; Communications industry; Customer services; Information services; Marketing; Mobile communications networks; Pricing policies; Product development; Sales; Studies; Willingness to pay
• ISSN: 0309-0566; 1758-7123
• DOI: 10.1108/03090561011032261

Purpose - After the sale of a primary product, firms often have the opportunity to sell ancillary products or services in support of the primary brand. These add-ons or services may be offered in a generic or in a branded form. The aim of the this paper is to study the demand for add-on services in the mobile communications industry and to detail a methodology that can be employed to make this assessment. Design/methodology/approach - A field experimental design approach using two-brand manipulations, four-price points and six content applications was employed. The study was fielded at a mall intercept facility in a major urban center. Interviews with 389 mobile phone users between the ages 18-31 were conducted. Findings - Results extend brand equity theory into the context of ancillary product sales and demonstrate that branded ancillary services can command a price premium and are less sensitive to price increases than unbranded alternatives. Practical implications - Given the growth of demand for non-voice mobile services, proliferation of such services and the global competition in the industry, marketing managers are under constant pressure to differentiate while achieving revenue goals. This study provides a methodology for managers to calculate the price premium that branded ancillary services may provide over unbranded alternatives and, hence, estimates the worth of potential brand partnerships. Originality/value - This study extends brand equity theory by recognizing an overlooked scenario: offering branded versus generic ancillary services after the sales of the primary products, through which firms can leverage brand equity benefits. [PUBLICATION ABSTRACT]