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1 – 10 of over 14000
Article
Publication date: 29 May 2009

Adam Nguyen, Roger M. Heeler and Cheryl Buff

The purpose of this paper is to test inferred bundle saving versus loss aggregation as explanations of consumer evaluations of bundles. Inferred bundle saving posits that consumer…

2333

Abstract

Purpose

The purpose of this paper is to test inferred bundle saving versus loss aggregation as explanations of consumer evaluations of bundles. Inferred bundle saving posits that consumer impressions of bundles are anchored in the daily economic reality that collections of goods as bundles are usually marketed at a discount to the same collection not bundled. Loss aggregation theory posits that consumers perceive an aggregation of prices as being less than the sum of its parts because they perceive prices as losses, and losses have a concave value perception; that is a small loss is perceived as large relative to its physical amount.

Design/methodology/approach

Previous research has shown that inferred bundle saving is a plausible alternative to loss aggregation. This research tests the two theories against each other in three experimental studies where they make opposite predictions. A meta‐analysis of the first two studies provides added evidence.

Findings

The predictions of inferred bundle saving were supported over the predictions of the loss aggregation prediction.

Research limitations/implications

Additional experimental studies are recommended to further test the proposed theory and its boundaries.

Practical implications

The presentation of a bundle to consumers sends a powerful message that “here lies a bargain.” In the absence of other information, consumers will form a favorable impression of the offering just because it is a bundle (and therefore must be a good buy). If the bundle is known to be undiscounted, then consumer reaction to the bundle is negative. Firms that offer bundles should ensure that their total message is consistent with savings of cash, or add consumer value through convenience/time saving.

Originality/value

The everyday observation that consumers expect a bundle to equal a saving has been ignored in favor of more complex theories of consumer behavior in many previous studies. The study presents results that favor the simpler theory.

Details

Journal of Product & Brand Management, vol. 18 no. 3
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 6 November 2007

Roger M. Heeler, Adam Nguyen and Cheryl Buff

The paper seeks to propose and test a theory of the psychological impact of price bundling that is derived from bundling's economic impact. It is called the inferred bundle saving…

2847

Abstract

Purpose

The paper seeks to propose and test a theory of the psychological impact of price bundling that is derived from bundling's economic impact. It is called the inferred bundle saving hypothesis. In the absence of explicit information about bundle savings, consumers infer a bundle saving when presented with a bundle offer. It is suggested that inferred bundle saving provides a simple, parsimonious explanation for pre‐ and post‐purchase bundle effects.

Design/methodology/approach

The theory is tested in two laboratory studies that employ partial replications of two prior price bundle studies.

Findings

The results show that the inferred bundle saving effect is robust in both product and service contexts, and can potentially explain the bundle effects found in these two studies.

Research limitations/implications

Additional experimental studies are recommended to further test the proposed theory.

Practical implications

First, contrary to convention, it is not always optimal for firms to integrate price information in a single bundle price. Second, firms may sometimes use the price‐bundling format to signal a bundle saving without actually offering one. Third, firms can manage consumption and expected refund of bundles by manipulating consumer perception of bundle saving.

Originality/value

It is intuitive that consumers expect a bundle saving. However, this paper is the first to establish empirically the existence of this inferred bundle saving and demonstrate its potential as a theoretical explanation for various bundle effects. The research challenges the extant view that price bundling per se always enhances consumer pre‐purchase evaluation. Moreover, it connects economic and psychological research, as well as pre‐ and post‐purchase analysis, of bundle effects.

Details

Journal of Product & Brand Management, vol. 16 no. 7
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 7 February 2020

Hsuan-Hsuan Ku, Szu-Han Wang and Hao-Wei Chiang

Based on the concept of information salience, the research investigates the factors that might drive potential differences in consumers' preferences between offers framed as free…

Abstract

Purpose

Based on the concept of information salience, the research investigates the factors that might drive potential differences in consumers' preferences between offers framed as free with purchase or as a bundle.

Design/methodology/approach

Four experiments examined how participants' preferences for bundled offers or free-with-purchase offers varied as a function of the perceived benefits to be obtained from the supplementary products (studies 1a and 1b) and identified participants' sensitivity to the price of the supplementary component as a mediator of the framing effect of a promotional offer (study 2) and the provision of information facilitating the drawing of comparisons as the boundary condition constraining the effectiveness of a free-with-purchase offer (study 3).

Findings

Results show that a bundled offer is preferable to a free-with-purchase offer when the supplementary product provides a high-level rather than a low-level benefit and identify price sensitivity as an underlying mechanism behind the observed effect. Furthermore, consumers' sensitivity to the value of the focal product in the deal brought to their attention by comparative information makes a fair charge for a relatively unattractive component the preferable offer.

Originality/value

While much of the existing published research on bundled offers focuses on the assigning of discounts to individual products in the bundle, this study adds to the body of knowledge by showing that variation in perceived benefits is the key driver of different responses to a free-with-purchase offer versus a bundled offer.

Details

Marketing Intelligence & Planning, vol. 38 no. 4
Type: Research Article
ISSN: 0263-4503

Keywords

Article
Publication date: 13 July 2015

Toni Repetti, Susan Roe and Amy Gregory

The purpose of this study is twofold: to determine hotel customers’ preference among hotel amenities pricing strategies, specifically a bundled, all-inclusive charge in the form…

3177

Abstract

Purpose

The purpose of this study is twofold: to determine hotel customers’ preference among hotel amenities pricing strategies, specifically a bundled, all-inclusive charge in the form of a resort fee, a limited choice resort fee at a lower price or a la carte pricing, and to determine whether hotel customer prefer bundled or partitioned pricing when faced with a mandatory resort fee.

Design/methodology/approach

An online survey of participants aged 18 years and older who had taken an overnight leisure trip in the past six months is conducted. A fixed-choice set conjoint analysis is performed to analyze the 353 usable surveys.

Findings

Results of this conjoint analysis show that 67 per cent of respondents prefer bundled pricing over partitioned pricing. Respondents also show higher utility for no resort fee and paying for amenities based on usage instead of being forced to pay a mandatory resort fee.

Practical implications

Guest preferences for pricing strategies can provide hotel operators with valuable information on how to establish pricing structures. Results suggest that hotel operators could benefit from presenting a bundled price inclusive of room rates and mandatory fees.

Originality/value

This is the only known study that examines mandatory fees in which customers receive additional amenities or services in exchange for an additional surcharge. This study also adds to the literature on pricing research in the hospitality industry.

Details

International Journal of Contemporary Hospitality Management, vol. 27 no. 5
Type: Research Article
ISSN: 0959-6119

Keywords

Article
Publication date: 25 January 2011

Raj Arora

This paper aims to use a mixed method (qualitative and quantitative) approach to exploring the effectiveness of price bundling.

5000

Abstract

Purpose

This paper aims to use a mixed method (qualitative and quantitative) approach to exploring the effectiveness of price bundling.

Design/methodology/approach

The study is based on a concurrent, two‐studies design where quantitative and qualitative data are both collected (concurrently or sequentially) and analyzed separately. The first study is based on a nested experimental design, and the second study is based on in‐depth interviews. The setting for the study is frequently purchased products, specifically teeth‐whitening products. The bundled items are: teeth whitener, toothpaste, mouthwash, toothbrush and dental floss. Various forms of discounts are tested to assess the effectiveness of bundles. While bundling has been investigated in marketing settings, the focus has been limited to consumer durables using quantitative scales. The experimental study is followed by a qualitative investigation in order to add further insight into the consumer's choice of a bundle. This mixed method approach provides rich narrative that adds important insights about the decision process and offers suggestions for advertising development.

Findings

The findings do not support a bundling approach. Although the consumers perceive higher value of the bundle, the attitudes, intentions and narratives support promoting these items individually rather than as a bundle.

Research limitations/implications

Caution is advised in extrapolating the results beyond the issues investigated in the study.

Practical implications

The findings suggest caution for marketers in designing product bundles, positioning, and promotion strategies.

Originality/value

There are three major contributions of this study. First, the current literature suggests price bundling is an effective strategy. This study suggests that for certain products bundling may not be effective. Second, the past literature has not investigated the influence of type of discount on effectiveness of a bundle. Third, most studies in price bundling are quantitative in nature. This study uses a mixed method approach. The quantitative study is followed by a qualitative study to add further insights that will help understand consumer motivations behind the preferences.

Details

Journal of Consumer Marketing, vol. 28 no. 1
Type: Research Article
ISSN: 0736-3761

Keywords

Open Access
Article
Publication date: 8 November 2022

Claudia Cozzio, Oksana Tokarchuk and Oswin Maurer

The purpose of this study is to investigate tourist in-destination consumption patterns in the context of bundled holiday packages in different resort categories to identify…

1675

Abstract

Purpose

The purpose of this study is to investigate tourist in-destination consumption patterns in the context of bundled holiday packages in different resort categories to identify demand behavior that allows implementing profit-enhancing policies through attractive bundled offers for specific tourist segments.

Design/methodology/approach

This study relies on data gathered in a quasi-experiment to analyze differences in consumption patterns at resort bars over a two-year period (summer 2018 and 2019) before and after the introduction of an all-inclusive soft drinks package.

Findings

The findings inform on bundling strategies according to different degrees of price consciousness and resort category. In particular, guests in upscale resorts are more likely to under-consume items included in a pre-paid bundle and significantly engage in additional spending than economy resort guests.

Originality/value

The quasi-experiment provides the actual in-destination consumption patterns and offering managerial insights and tools to tailor the form and content of bundles according to resort category.

目的

本研究的目的是调查游客目的地消费模式在不同度假村类别的捆绑度假套餐的背景调查及研究。本研究旨通过深入了解市场需求, 来针对特定游客细分市场提供对其具有吸引力的捆绑优惠, 目的是让完善定价决策, 从而达到更优化利润。

设计/方法/途径

本研究依赖于通过准实验收集的数据, 该准实验侧重于分析度假村客人在两年期间(2018 年和 2019 年夏季)在推出全包无酒饮料套餐前后在度假村酒吧的消费模式的变化。

研究结果

研究结果为如何根据度假村类别相关的不同价格意识程度来运用捆绑策略。到达目的地后, 高档度假村的客人更有可能对预购捆绑包中包含的物品消费不足, 并且与入住经济型度假村的游客相比, 大幅增加额外支出。

独创性

我们的准实验审查了几乎没有被研究学习过的客人在目的地的实际消费模式。本研究对有用的管理工具的认识有更进一步的贡献:捆绑包的内容重点应由经济度假村的从业人员精心设计; 而在高档度假村, 应该以混合捆绑作为捆绑策略的一种形式。

Objetivo

El objetivo de este estudio es investigar los patrones de consumo de los turistas en destino en el contexto de los paquetes vacacionales combinados en diferentes categorías de complejos turísticos. Esta investigación persigue la adquisición de un conocimiento profundo del comportamiento de la demanda que permita la aplicación de políticas de precios que aumenten los beneficios mediante la orientación de ofertas con paquetes atractivos a segmentos específicos de turistas.

Diseño/metodología/enfoque

El estudio actual se basa en los datos recogidos a través de un cuasi-experimento centrado en el análisis de las diferencias en los patrones de consumo de los huéspedes del resort en los bares del mismo durante un período de dos años (temporadas de verano 2018 y 2019), antes y después de la introducción de un paquete de refrescos con todo incluido.

onclusiones

Los resultados del estudio informan sobre cómo aprovechar las estrategias de agrupación según los diferentes grados de conciencia de los precios asociados a la categoría del complejo turístico considerado. Una vez que llegan al destino, los huéspedes de los complejos turísticos de categoría superior son más propensos a no consumir los artículos incluidos en un paquete precomprado y a realizar un gasto adicional significativo en comparación con los turistas alojados en complejos turísticos económicos.

Originalidad

Nuestro cuasi-experimento examina empíricamente las pautas de consumo reales de los huéspedes en el destino, que apenas han sido examinadas. Este estudio contribuye además al reconocimiento de herramientas de gestión útiles: los profesionales de los complejos turísticos económicos deberían diseñar cuidadosamente el enfoque del paquete en términos de su contenido, mientras que el paquete mixto como forma de estrategia de agrupación debería favorecerse en los complejos turísticos de alto nivel.

Article
Publication date: 26 January 2010

Anders Henten and Helge Godoe

The purpose of this paper is to discuss the concept of demand side economies of scope in relation to multiplay services. The basic question raised in the paper is the extent to

1274

Abstract

Purpose

The purpose of this paper is to discuss the concept of demand side economies of scope in relation to multiplay services. The basic question raised in the paper is the extent to which demand side economies of scope in the area of multiplay is based on an externality founded in a positive feedback mechanism as in the case of demand side economies of scale in interactive communication networks.

Design/methodology/approach

In order to elucidate this, the paper first presents and explores the concept of economies of scope, and more specifically demand side economies of scope. Second, an analysis of the bundling strategies of operators in the field is presented, including an examination of the forms of bundling with respect to how open or close the business models implemented are. After this analysis, the paper concludes with a discussion of the demand side economies of scope concept aiming to contribute to a qualification of the concept and its applicability.

Findings

The paper concludes that the value proposition of multiplay services is more related to the intrinsic value of the service than its extrinsic value. This constitutes a major difference between demand side economies of scale and demand side economies of scope.

Practical implications

The findings of the paper have practical implications for operators offering multiplay services with respect to the drivers of this market.

Originality/value

The value of the paper lies in its discussion of the concept of demand side economies of scope.

Details

info, vol. 12 no. 1
Type: Research Article
ISSN: 1463-6697

Keywords

Article
Publication date: 8 March 2022

André Hackbarth, Timo Tremml and Sabine Löbbe

The purpose of this study is to examine private households’ preferences for service bundles in the German energy market.

Abstract

Purpose

The purpose of this study is to examine private households’ preferences for service bundles in the German energy market.

Design/methodology/approach

This investigation is based on survey data collected from 3,663 customers of seven mainly municipal energy suppliers in the German energy market. The data set was analyzed via a binary logistic regression model to identify the most prospective customers and their preferences regarding bundles of energy services.

Findings

The results indicate that potential adopters of energy-related service bundles have greater prior knowledge about service bundles; place higher importance on simplified handling, flat rates and long price guarantees; prefer to purchase a service bundle from an energy supplier; live in urban areas and have a gas tariff; are both less likely to have a green electricity tariff and to support the German energy transition; have a greater intention to purchase a smart home product; are less likely to already be prosumers; and prefer customer centers and social media as communication channels with energy providers.

Practical implications

This paper offers several implications for decision-makers in developing marketing strategies for bundled offerings in a highly competitive energy market.

Originality/value

This paper contributes to the sparse research on service bundles in the energy sector, despite the growing interest of energy suppliers and consumers in this topic. It expands the research focusing on the telecommunications sector.

Details

International Journal of Energy Sector Management, vol. 16 no. 6
Type: Research Article
ISSN: 1750-6220

Keywords

Article
Publication date: 19 July 2021

Misun Won and Stephen L. Shapiro

The purpose of this study is to examine consumer behaviors toward a bundle of tickets and lodging using two different message framing: (1) scarcity framing for a high demand…

629

Abstract

Purpose

The purpose of this study is to examine consumer behaviors toward a bundle of tickets and lodging using two different message framing: (1) scarcity framing for a high demand event, the All-Star Game, and (2) discount framing for a lower demand event, an MLB mid-week game.

Design/methodology/approach

Data were collected through two online surveys of 836 sport consumers in total on Amazon Mechanical Turk (MTurk) and were analyzed using a mix of analysis of variances (ANOVAs) and analysis of covariance (ANCOVA).

Findings

Consumers are likely to buy products separately in a scarce situation. When discounts are offered as benefits of choosing a bundle, consumers with high willingness to pay (WTP) have higher purchase intentions (PI) and perceived value toward cumulative discounts.

Originality/value

This is the one of few studies that investigate (1) price bundling of products from two disparate industries where consumer demands fluctuate, (2) the effects of scarcity in a bundle, and (3) all possible discount messaging in a bundle.

Details

Sport, Business and Management: An International Journal, vol. 11 no. 5
Type: Research Article
ISSN: 2042-678X

Keywords

Article
Publication date: 6 October 2023

Thowayeb Hassan and Mahmoud Ibraheam Saleh

The study aims to investigate how attribution theory in the context of pricing strategies can help tourism destinations recover from the negative impacts of the COVID-19 pandemic.

Abstract

Purpose

The study aims to investigate how attribution theory in the context of pricing strategies can help tourism destinations recover from the negative impacts of the COVID-19 pandemic.

Design/methodology/approach

The study adopted a qualitative research design using semi-structured interviews to address the lack of research in this area. Interview participants included tourists and tourism customers. The interview responses were then analyzed using “Nvivo” qualitative data analysis software to identify critical themes regarding applying attribution theory to pricing strategies.

Findings

The findings revealed that tourists prefer bundled and hedonic pricing strategies that integrate the service providers' pricing strategies' locus of control, stability and controllability. Tourists do not favor dual pricing strategies unless the reasons for price controllability or stability are justified. Tourists also prefer the controllable pay-what-you-want pricing strategy. Although tourists accept dynamic pricing, certain conditions related to price locus, stability and controllability must be met.

Practical implications

The research shows tourists prefer pricing strategies that give them control and flexibility, like bundled packages and pay-what-you-want models. Service providers should integrate pricing strategies that transparent costs and justify price fluctuations. While dynamic pricing is accepted if necessitated by external factors, tourists are wary of unnecessary price changes. Providers can build trust and satisfaction by explaining pricing rationale and offering controllable options like bundles.

Originality/value

The study contributes to the theory by applying attribution theory to the context of pricing strategies in tourism. It also provides innovative recommendations for tourism managers on how to use pricing strategies after the COVID-19 pandemic. The findings offer new insights that extend beyond previous research.

Details

Journal of Hospitality and Tourism Insights, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2514-9792

Keywords

1 – 10 of over 14000