The impact of service bundles on the mechanism through which functional value and price value affect WOM intent
Ranaweera, C., & Karjaluoto, H. (2017). The impact of service bundles on the mechanism through which functional value and price value affect WOM intent. Journal of Service Management, 28(4), 707-723. https://doi.org/10.1108/JOSM-03-2016-0065
Published in
Journal of Service ManagementDate
2017Copyright
© Emerald Publishing Limited, 2017. This is a final draft version of an article whose final and definitive form has been published by Emerald. Published in this repository with the kind permission of the publisher.
Purpose: The aim was to contribute towards the current limited understanding of service bundles
by investigating how purchasers of combined product-service bundles (bundle customers) differ
from those purchasing a product and associated service separately (non-bundle customers).
Design/methodology/approach: The hypothesized effects were tested on a representative
sample of mobile phone subscribers in Finland, through a multi-group moderated analysis using
variance-based structural equation modeling.
Findings: a) While functional value had a stronger effect on attitude for bundle customers, price
value is a stronger determinant of attitude for non-bundle customers. b) There was no difference
between the groups in terms of how attitude determines WOM intent. c) The total influence of
functional value on positive WOM intent was stronger for bundle customers Vs non-bundle
customers; in contrast, the total influence of price value on positive WOM was weaker for the
bundle customers.
Research limitations/implications: Two inter-related frameworks, prospect theory and mental
accounting theory, are used to analyze customer response to service bundles. Results demonstrate
that bundles play a powerful role in determining engagement behaviors critical to firms.
Purchasing a service bundle Vs a non-bundle influences how price value and functional value
determine attitude and WOM intent in fundamentally different ways.
Practical implications: In devising communication strategies to maximize positive WOM,
managers need to emphasize functional benefits for bundle purchasers and price benefits for nonbundle
customers. The results also demonstrate that it is more important for firms to track
perceived value, as value and not attitude differentiates WOM generation in the two groups.
Originality/Value: This is the first study to demonstrate how bundle and non-bundle customers
determine value, and how functional value and price value determine WOM generation and
attitude towards SP in fundamentally different ways. The comparison of the bundle group where
the firm acts as the main resource integrator to a non-bundle group where the customer is the
main resource integrator in creating value helps demonstrate the need for firms to treat the two
groups in distinct ways.
...


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Emerald Publishing LimitedISSN Search the Publication Forum
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