NEW YORK: It will be no surprise to marketers that consumers like receiving products and services at no cost, but a new examination of free and paid-for apps has found that pricing in the mobile ecosystem can yield counter-intuitive results.
A paper published in the most recent edition of the Journal of Advertising Research (JAR), entitled When Are Apps Worth Paying For? How Marketers Can Analyze the Market Performance of Mobile Apps, uses a variety of trusted marketing-research laws to offer a fresh view on how to analyze the market performance of mobile apps.
One empirical learning is predictable: Apps linked to an offline or online brand attract more users and obtain a stronger brand image if they’re made available to consumers at no cost.
But apps branded independently – in other words, not in support of an existing product of service – attract more users and obtain stronger brand image if offered at a cost to the user.
Authors Lara Stocchi (Flinders Business School, Adelaide, South Australia), Carolina Guerini (LIUC University and SDA Bocconi, the Business School of Bocconi University, Milan) and Nina Michaelidou (Loughborough University, UK) suggest the different results hint at different courses of action for marketers.
In the first instance, they propose, managers should treat the app as a brand extension and an add-on to the promotional mix as a way to appeal to their existing customers.
In the second instance, executives should, by default, make the app available to consumers at a price, as a way to convey a price–quality advantage and a sense of uniqueness.
“These insights,” they write, “offer useful guidance to all sorts of businesses: Existing ones wanting to add an app in their promotional mix, as well as organizations looking at introducing new-to-the-world apps, such as start- up initiatives.”
The pricing-of-apps paper, which appears in a special “What We Know About Mobile Media and Marketing” section of JAR, significantly adds to existing knowledge about branded apps, and also demonstrates that long-standing marketing laws support the understanding and evaluation of market trends in the mobile digital context.
Data sourced from Journal of Advertising Research; additional content by WARC staff