Mobile Service Bundles: The Example of Navigation Services

Mobile service providers can use service bundling to offer attractive services to customers. Customers may find bundles convenient compared to single services and there may be a price discount involved. This paper examines what kind of service bundle may be attractive to users in the car navigation system market. We hypothesize that customers are more likely to acquire enhanced services than supplementary services and that bundle price has a positive effect on the intent to purchase. We used a conjoint analysis to assess which combination of services and price level is the most attractive to users. It turned out that enhanced services, i.e. services that reinforce the functionality of the core navigation service, are more relevant than supplementary services. However, the relative importance of price discounts is almost similar to the importance of bundle composition, implying that a customer may appreciate a careful composition of a bundle above a simple price discount. [PUBLICATION ABSTRACT]