How does brand experience affect mobile phone users’ willingness-to-pay a price premium? The intervening role of brand credibility

Abstract

Firms’ brand management has continuously and consistently evolved not only to satisfy consumers’ various needs and wants but also to maximize profitability and sustain competitive advantage. Companies are unceasingly seeking ways to make the price of their product offerings less of a factor in the consumer decision-making process. Thus, this study investigates the role of brand credibility in the relationship between brand experience and willingness-to-pay (WTP), a price premium for a mobile phone brand, using the stimulus-organism-response (SOR) model. The participants of the study were Filipino iPhone users who were identified through a purposive sampling method. To evaluate the hypothesized relationships, a predictive research design using partial least squares (PLS) path modeling was used. The findings show that brand experience and brand credibility are significantly and directly related, and both variables were found to have a significant and positive influence on WTP a price premium. Furthermore, brand credibility was identified to play a mediating role in the link between brand experience and WTP, a price premium.

Keywords

• Willingness-to-pay
• Brand credibility
• Brand experience
• Mobile phones
• Price premium

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