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

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.