Kim, Moon-Koo Park, Myeong-Cheol Lee, Duk Hee Park, Jong-Hyun
Year of Publication:
14th International Telecommunications Society (ITS) Asia-Pacific Regional Conference: "Mapping ICT into Transformation for the Next Information Society", Kyoto, Japan, 24-27 June, 2017
Since bundlesprovide price discountsto customers and have lock-in effects forbusinessesin the communicationssector, the number of bundlesubscribersisrapidly growing in many countries,including Korea.The consumerwelfareand marketing effects of bundleshavebeen welldocumented. Existing literature, however,has paid little attention to identifyingthe facets of benefitsand risks that influence subscriptions, the differences in switching costs between subscribers and non-subscribers, and the relationships among bundle satisfaction, customerretention, and switching costs. To address these gaps, we performed an empirical analysis using survey data from 550 individuals.Our findingsshow that concernabout lock-inand performanceas well as economicbenefits influencesubscriptionsto the bundles, switching costs arehigher for thesubscribersthan for stand-alone service users, and monetary switching costsof bundlesdirectly affect customer retention. These results show the lock-in effectsofswitching costsof bundlesin subscribers’ decision-making, retention, and churn. The implications for regulatory policyand customer strategyare discussed.
Service bundles Bundling Lock-in effects Switching costs Customer retention Loyalty