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Bundled Mobile Services: The Impact on Consumers’ Intention to Adopt
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Bundled Mobile Services: The Impact on Consumers’ Intention to Adopt

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Mobile services (m-services) are different from traditional services in that the use of these services takes place through a mobile device and as such can be used any time and any place. Even though …

Mobile services (m-services) are different from traditional services in that the use of these services takes place through a mobile device and as such can be used any time and any place. Even though consumers increasingly use their mobile phones, adoption of m-services is still lingering. In this study, we add to current knowledge on the consumer’s value and adoption of m-service bundles. We determine how m-service bundle compatibility, meaning the extent to which the m-service bundle fits together, affects consumers’ value and intention to use a m-service bundle. We show that m-service bundle compatibility enhances key relationships in the value-intention framework. The analyses reveal that not only does m-service bundle compatibility matter, but also that this varies for current adopters versus non-adopters of m-services. As a result, managers should focus on designing compatible m-service bundles in order to increase adoption amongst new customers.

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  • 1. Bundled Mobile Services: The Impact on Consumers’ Intention to Adopt Marije Teerling, Timber Haaker, Henny de Vos, Mirella Kleijnen HICSS 2009
  • 2. Mobiles are increasingly used as a third screen Mobile seen as integrated communication device But! Mobile TV is taking off slowly Mobile internet usage is relatively low Current reality seems disappointing (Newell & Newell-Lemon, 2001) Hence: Need to move beyond technology push
  • 3. Mobile service bundles
    • Packaged set of mobile services, mobile device, (data) subscription, e-services for one price plan.
    • Examples:
    • Research Motivation:
      • Adoption of mobile services is hampered by [..] mismatch between launched applications and everyday user needs (Carllson, 2006)
      • Bundle may provide ‘bundle of benefits’ (Kotler, 1999)
  • 4. What is a bundle?
    • Focus on bundling from end-user perspective..
    • Bundling is the sale of two or more separate products or services in one package
    • Separate product is one for which a separate market exists for end-users
    • Separate markets for parts exist at other levels in the channel
  • 5. Forms of bundling
      • Pure bundling is selling only the bundle and not (all) products separately
      • Mixed bundling is selling both the bundle and the separate products
      • Unbundling is only selling the products separately
  • 6. Focus of bundling
    • Service bundling is the integration and sale of two or more separate services
      • Customer may benefit from discount price but also from added value from integration
      • Provider may create added value and has possibility for differentiation
    • Bundle compatibility is the level to which the individual services in the bundle enhance each other
      • Customer may benefit more from services that complement each other
  • 7. Objective
    • Examine to what extent bundling contributes to the consumers’ adoption and value perceptions of m-services.
    • Research questions:
    • How does perceived m-service bundle compatibility impact the relationships in the value-intention framework?
    • How do these relationships vary for current adopters versus non-adopters of m-services?
  • 8. Conceptual Background
    • Value – intention framework
      • Value mediates between service quality and intention (Brady et al. 2005)
      • Value-Based adoption Model (Kim et al., 2007)
    • Conditional value
      • Ubiquity increases importance of m-services (Pura 2005, Nysveen et al., 2005)
    • M-service bundle compatibility
      • Compatible services in a bundle may enhance overall value (Stremersch & Tellis, 2002)
      • Not to be confused with service compatibility (Kleijnen et al., 2007)
  • 9. Theoretical Framework
    • H1: Perceived total value is positively related to the intention to use m-services
    • H2: Perceived hedonic and utilitarian value are positively related to the perceived total value of the m-services.
    • H3: Perceived conditional value is positively related to the perceived hedonic and utilitarian value of the m-services.
    • H4: The level of perceived m-service bundle compatibility strengthens the relationships between (H4a) hedonic value and total value and (H4b) utilitarian value and total value increases.
    Hedonic value Utilitarian value Conditional value Total value Intention M-service bundle compatibility
  • 10.
    • 2x2 experimental design
      • Two types of service bundles
        • Experience or hedonic oriented bundle
        • Goal-directed or utilitarian oriented bundle
      • Two types of consumer groups
        • Current adopters of m-services
        • Current non-adopters of m-services
    Research Design (1)
  • 11. M-service bundles
  • 12. Research Design (2)
    • Questionnaire development based on
      • Literature review
      • Extensive pre-testing
    • Data collection:
      • Consumer panel
      • Bundle assigned at random
    • Sample
      • 403 respondents,
        • 245 adopters, 159 non-adopters
  • 13. Analysis & Results (1)
    • Gender
      • 56% women
      • 44% men
    • Age
      • <25: 6%
      • 25 – 35: 19%
      • 36-45: 25%
      • 45-55: 25%
      • >55: 25%
    • Reliability & validity
      • Cronbach’s alpha > .8
      • Average variance extracted > .65
  • 14. Analysis & Results (2)
  • 15. Analysis & Results (3)
  • 16. Conclusions (1)
    • Value  Intention
      • Adopters show stronger relationship
    • M-services compatibility strengthens value-intention relationship
      • Non-adopters use the cue (bundle compatibility) as a means to reduce complexity.
      • Adopters do not necessarily need the bundle to reduce cognitive efforts
    • Utilitarian versus hedonic value
      • Non-adopters: no strong differences  both types of value relevant
      • Adopters: utilitarian value in general determines total value, hedonic value is strongly enhanced by high bundle compatibility
  • 17. Conclusions (2)
    • Conditional value
      • increases total value indirectly through hedonic and utilitarian value.
      • Similar for both groups
        • Non-adopters are capable of perceiving this benefit before having actually used m-services.
    • Adopters perceive a higher overall value for utilitarian m-services rather than for hedonic m-services.
  • 18. Limitations & Future research
    • Laboratory setting
      • results may have limited external validity
    • Age distribution of the sample
      • relatively ‘at age’ given the domain of m-services
      • observed valuations did not differ significantly with age
    • More insight into consumers’ perceived value and adoption of m-services which have high conditional value
      • perhaps the greatest advantage of mobile commerce
      • Are consumers really interested in obtaining m-services that are truly context aware?
  • 19. Q