Service Augmentation and Customer Satisfaction: An Analysis of Cell Phone Services in Base-of-the-Pyramid Markets

In this study, we investigate how IT-enabled service augmentation influences customer satisfaction for cell phone services in Base-of-the-Pyramid (BOP) markets. We conceptualize value added service and customer care as two components of service augmentation. In spite of the acknowledged competitive significance of digital services, the impact of service augmentation on customer satisfaction remains an unexplored area of research. Arguing for priceand relationalevaluations, we develop hypotheses for a substitution effect of value added services, and a complementary effect of customer care, on the relationship between core service and customer satisfaction. Specific to the BOP market context, we argue for a differentiated influence of service augmentation for different categories of providers. We empirically examine and find support for the hypothesized relationships using an archival data set from surveys of cell phone customers in seven South Asian BOP markets. We discuss the managerial implications and contributions of the findings.