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Consumer Preference for Product Bundles: The Role of Reduced Search Costs
Abstract
Most prior research on bundling from a consumer perspective has focused on how bundles are processed, particularly from a
prospect theory or mental accounting perspective. In contrast, relatively little research has examined the factors that might
drive consumer preference for bundles versus individual items. This article addresses one such factor: the potential to reduce
search and assembly costs. Through exploratory interviews and two laboratory experiments, the authors show that preference
for a bundle is greater when bundle choice will reduce search effort than when it will not, particularly among consumers who
are less motivated to process information.
... Prior work by Harris and Blair [4] and Sharpe and Staelin [5] suggests consumers may prefer bundles because bundle selection requires less cognitive effort-resulting in less information processing and a reduction in consumer search efforts. In addition to cognitive load, cognitive traits, such as one's need for cognition, have also been suggested as having an influence on the likelihood of bundle selection. ...
... Need for cognition can be thought of as an individual's motivation to process information and their inclination to engage in effortful thinking [6][7][8][9]. Consumers with lower need for cognition have been found to exhibit even greater preference for bundled products [4]. ...
... Prior work by Guiltinan [24] suggested consumers may prefer bundles because of the value they provide in reducing search efforts-not having to search for and assemble a set of individual selections. Work by Harris and Blair [4] has shown that consumers may prefer bundled choices over individual options, as it has been suggested that bundle selection reduces search efforts and requires less information processing. However, although Harris and Blair propose that bundle preference may be associated with an inclination towards reducing one's mental strain, cognitive load was not directly manipulated. ...
Product bundling is a common retail marketing strategy. The bundling of food items has the potential to increase profits in the grocery sector, particularly for fresh produce, which often has lower profit margins. Although prior work suggests consumers prefer bundles because they require less cognitive effort to select, no study has yet experimentally manipulated cognitive load when food bundles are included in the choice set. To test whether bundle preference differs when cognitive resources are constrained, a grocery shopping experiment was conducted with 250 consumers in the midwestern U.S., in a laboratory that featured a grocery store display. Consumers who grocery shopped under cognitive load had a higher odds of selecting a food bundle even when the bundle did not offer a price discount. Results suggest food bundles may be preferred because they require less cognitive effort to process, which could benefit consumers by simplifying the grocery shopping experience. Additional factors found to influence food bundle selection included whether the bundled items were perceived as being complementary and hunger levels. Food bundles could help lessen cognitive effort associated with grocery shopping and may especially appeal to those who do not enjoy food shopping.
... For consumers, bundling represents a reduction in transaction costs (Harris and Blair, 2006;Tanford et al., 2011) and increased savings (Kwon and Jang, 2011) because, usually, the total cost of purchasing the items separately would be more expensive than the buying them in a bundle (Arora, 2008;Heeler et al., 2007;Yan and Bandyopadhyay, 2011). Bundling alone may not create added value for the consumer, so a discount should be offered to motivate consumers (Stremersch and Tellis, 2002). ...
... For five-star hotels, the IPP is €98.00 and the OPP €99.00, which are very close. According to Raab et al. (2009), the closeness between the IPP and the OPP represents respondents' lower price consciousness (in line with the results of Harris and Blair, 2006;Nagle et al., 2014;Dominique-Ferreira et al., 2016). ...
... Results for mixed-joint bundling show that 80.3 per cent of respondents would accept the proposed bundles, with the main product being the room and dinner and massage the services of that would receive the discount. For consumers, bundling can be considered as a means of obtaining a price reduction (Harris and Blair, 2006). Therefore, in this context, the higher acceptance of the bundle offer suggests that consumers understand bundling as a purchase with associated savings and positive (in line with Repetti et al., 2015). ...
Purpose: Price has an important influence on consumers’ purchasing decision and consequently in firms’ revenues and profitability. This paper aims to study customers’ price sensitivity of three and five-star hotels.
Methodology: Data was gathered through an ad hoc questionnaire. The Van Westendorp Price Sensitivity Meter (PSM) was applied in order to estimate customers’ price sensitivity.
Findings: Results show what is the optimal price both to three and five-star hotels.
Research limitations/implications: The size of the sample could be higher. It would be important to know what characteristics and services customers value most in the hospitality industry in order to better understand what factors influence price sensitivity.
This research may be important to managers understand how customers of three and five-stars hotels react to price changes.
Practical implications: Findings help managers to structure effective prices and understand how they can increase or decrease their prices in order to generate more profits.
... For consumers, bundling represents a reduction in transaction costs (Harris and Blair, 2006;Tanford et al., 2011) and increased savings (Kwon and Jang, 2011) because, usually, the total cost of purchasing the items separately would be more expensive than the buying them in a bundle (Arora, 2008;Heeler et al., 2007;Yan and Bandyopadhyay, 2011). Bundling alone may not create added value for the consumer, so a discount should be offered to motivate consumers (Stremersch and Tellis, 2002). ...
... For five-star hotels, the IPP is €98.00 and the OPP €99.00, which are very close. According to Raab et al. (2009), the closeness between the IPP and the OPP represents respondents' lower price consciousness (in line with the results of Harris and Blair, 2006;Nagle et al., 2014;Dominique-Ferreira et al., 2016). ...
... Results for mixed-joint bundling show that 80.3 per cent of respondents would accept the proposed bundles, with the main product being the room and dinner and massage the services of that would receive the discount. For consumers, bundling can be considered as a means of obtaining a price reduction (Harris and Blair, 2006). Therefore, in this context, the higher acceptance of the bundle offer suggests that consumers understand bundling as a purchase with associated savings and positive (in line with Repetti et al., 2015). ...
Purpose
The purpose of this paper is to investigate and identify the price sensitivity of consumers of three- and five-star hotels and to determine the impact of bundling strategies on consumers’ price sensitivity.
Design/methodology/approach
To calculate price sensitivity, authors apply the van Westendorp’s price sensitivity meter (PSM). To understand the impact of bundling strategies, univariate and bivariate techniques are applied.
Findings
PSM results reveal the optimal prices and the range of acceptable prices for three- and five-star hotel. The bundling strategy results reveal that five-star customers are less sensitive to mixed-leader bundling. Regarding mixed-joint bundling, managers could improve sales through bundling strategies if they selected an attractive service (e.g. restaurants).
Practical implications
Findings assist hotel managers to understand the different price sensitivities, according to the hotel typology. Managers can manage prices without the risk of losing market share or revenue. The results help managers in deciding which bundling strategies they can create, as well as the services to be included to achieve highest profitability.
Originality/value
No research to date to the best of the authors’ knowledge has attempted to understand and compare the role of bundling strategies in three- and five-stars hotels. Moreover, no research has attempted to measure and compare customers’ price sensitivity of three- and five-stars hotels.
... A typical travel package, often including transportation, accommodation, and tourist activities, is offered at a discounted price. Prepaying for these bundled services offers several advantages: it allows travelers to save money (Kim et al., 2018(Kim et al., , 2020, streamlines the search process (Harris & Blair, 2006a;Naylor & Frank, 2001;Tanford et al., 2012), and reduces uncertainty (Harris & Blair, 2006b). ...
... Consumers often save money when purchasing bundled travel services through online platforms, with these savings being particularly significant in the luxury hotel category (Kim et al., 2009). Bundles also simplify the search process and reduce uncertainty (Harris & Blair, 2006a, 2006b. However, the attractiveness of such packages diminishes if they fail to meet the "all-inclusive" expectation, thereby affecting their perceived value (Naylor & Frank, 2001). ...
In recent years, consumers have been confronted with the proliferation of package bundling (i.e., marketing multiple products or services together in a single package at a discounted price) in the tourism industry. This paper aims to investigate how different discount framing strategies affect consumers’ purchase intention of a vacation package. Through four experimental studies, this paper reveals that the perceived heterogeneity of a component influences the effectiveness of different discount framing strategies. In particular, consumers prefer the vacation package in which the high-heterogeneity component is not discounted, while the low-heterogeneity component is discounted. The effect of perceived heterogeneity on purchase intention can be explained by the perceived quality of the component. Therefore, the effect is mitigated when quality assurance cues are present.
... Specifically, shoppers under moderate time pressure become faster and slightly more selective at information processing, whereas those under heavy pressure tend to skim through information superficially without examining every single detail. However, some studies have suggested that time pressure typically prompts decision makers to make decisions and execute decision-making strategies through simple means [25,26], and that people under time constraints can turn to other strategies to facilitate their information processing [27]. In addition, Levy [28] showed that when people were in a hurry, they hastened their decision making. ...
... When shopping under time pressure, specific characteristics of products typically draw the attention of consumers [26,36,52]. New characteristics added to a product often become essential factors that affect consumers' purchase decisions [53,54]. ...
The online shopping market is developing rapidly, meaning that it is important for retailers and manufacturers to understand how consumers behave online compared to when in brick-and-mortar stores. Retailers want consumers to spend time shopping, browsing, and searching for products in the hope a purchase is made. On the other hand, consumers may want to restrict their duration of stay on websites due to perceived risk of loss of time or convenience. This phenomenon underlies the need to reduce the duration of consumer stay (namely, time pressure) on websites. In this paper, the browsing behavior and attention span of shoppers engaging in online shopping under time pressure were investigated. The attention and meditation level are measured by an electroencephalogram (EEG) biosensor cap. The results indicated that when under time pressure shoppers engaging in online shopping are less attentive. Thus, marketers may need to find strategies to increase a shopper’s attention. Shoppers unfamiliar with product catalogs on shopping websites are less attentive, therefore marketers should adopt an interesting style for product catalogs to hold a shopper’s attention. We discuss our findings and outline their business implications.
... Additional factors, beyond pricing and promotions, that add to the appeal of bundling and greater consumption of unhealthy foods have been identified. For example, convenience to the consumer through ease of purchase and decreased search effort by limiting decision complexity are added advantages (Harris and Blair, 2006;Sharpe and Staelin, 2010). A more recent study of consumer preferences for food bundles similarly found that bundles were chosen since it required less information processing, even if there was no price saving (Carroll et al., 2022). ...
South Africa has high levels of obesity and overweight, which contribute to non-communicable diseases and are associated with poor diets high in ultra-processed foods. Bundling occurs when two or more products are packaged and sold together, often at a discount and is a marketing strategy for unhealthy foods. Given the paucity of data on bundling of unhealthy foods, this exploratory study sought to document how unhealthy foods are bundled together to be more attractive to consumers in Johannesburg, South Africa. Fifty food outlets were included and compared across two regions. In-store photos were taken of bundles and individual items, and data were captured on the costs of the bundle and of individual components. Descriptive analysis and the contents of the bundles based on the photographs and promotional material were conducted. Almost half of all outlets had more than five bundles and nearly a quarter had bundles targeting children. Most children’s meals were burgers, and all had fries as part of the bundle. The average savings per bundle when compared to the combined cost of individual items was R21,39 overall, or 18%. The study demonstrated that unhealthy food bundling is a common practice in food outlets in Johannesburg, often with cost advantages and promotional appeal. Policy options for promoting a favourable food environment include regulating portion sizes of bundles and offering healthy options as part of a bundle. Marketing food to children by bundling unhealthy food with toys is of particular concern and is prohibited in the recently gazetted Regulations Relating to the Labelling and Advertising of Foodstuffs.
... This reduces unfairness perceptions. 24 Service products can be designed to hide discounts. Instead of varying the prices of food, which makes it difficult to increase once it has been lowered, restaurants can vary the product. ...
... Bundling the inputs will lead to reduced costs of searching, assembling and holding the separate agricultural inputs that need to be used in combination (cf. Harris & Blair, 2006;Leszczyc & Häubl, 2010). This reduction in transaction costs is very important to increase adoption in the smallholder context where poorly functioning input and service markets often increase transaction costs (Dillon & Barrett, 2017;Gollin, 2014;Hazell et al., 2010). ...
Product bundling is receiving increasing attention in sustainable agricultural development as a means to ensure access to and enhance the uptake of, agricultural technologies by smallholders. Yet, the how and why of bundling for smallholders are not well-understood. The current paper, therefore, brings bundling theory from the marketing literature to the smallholder context. We use a conjoint experiment, a proven marketing technique for designing new products, services and bundles, to design agricultural input and service bundles for soybean-producing smallholders in rural Ethiopia. The empirical findings from 252 smallholders suggest that product bundling enhances smallholders’ preferences and hence intentions to adopt technologies but that bundles must be designed carefully following a smallholder-centric approach. Drawing on our findings and the literature, we delineate the different steps that need to be taken to develop bundles for the successful uptake of new technologies by smallholders.
... Batasan tarif secara fisik mengacu pada perbedaan produk nyata yang terkait dengan harga yang berbeda (misalnya, lokasi kursi di teater, ukuran kamar hotel, atau tingkat layanan). komponen (Harris & Blair, 2006;Wirtz & Kimes, 2007). ...
Buku ini adalah buku ajar untuk mata kuliah Pemasaran Jasa. Buku
ini dimaksudkan untuk memudahkan mahasiswa memahami buku-buku teks
barat yang sering menjadi acuan mata kuliah Pemasaran Jasa, antara lain
Services Marketing yang ditulis oleh Christopher Lovelock dan Jochen Wirtz.
Buku ajar ini juga merangkum berbagai teori pemasaran maupun
psikologi yang diaplikasikan pada setting industri jasa. Selain itu, tulisan
disertai dengan artikel jurnal ilmiah dengan bahasa yang mudah dipahami
oleh mahasiswa. Diharapkan buku ini dapat membantu mahasiswa dalam
penerapan mempelajari prinsip-prinsip pemasaran jasa.
... Günümüzde tüketiciler bu şekilde katılım gösterme ve kendini ilgilendiren süreçlere doğrudan dahil olma ve aktif bir rol oynama meyiline girmişlerdir.Bir hizmet sağlayıcının eylemleri bir müşteriyi daha da kötüleştirebilir(Echeverri ve Scale 2011), bu da bir değer oluşturma sürecinin olumsuz bir dönüş alabileceğini ima eder.Strandvik et al. (2012)'e göre müşteriler bireysel satıcıları ve ürünleri ve hizmetleri ayrı ayrı değerlendirmez, bunun yerine mevcut veya gelecekteki ürün ve hizmetlere (ve satıcılara) ne kadar uygun olduklarını ve bu eşleşmenin ne anlama geldiğini düşünürler. Bu nedenle, ürün ve hizmet ilişkileri, müşterilerin kullanımdaki değer algısını benimsediği ve etkilediği mantığın bir parçasıdır(Harris and Blair 2006). Ortak yaratma kavramı, süpermarket hizmet sektörü içerisinde satış personeli ve müşterinin iletişim halinde karşı karşıya gelip, bu iletişim esnasında gerçekleşen etkileşim, karşılıklı tavsiye verme durumu, satış personeli ve müşterinin tavır ve sözleri, giyim ve tutumları gibi kavramlarla açıklanmaktadır. ...
... Bundles might also give an illusion of worth when in fact some of the obtained items are worthless. Players are often drawn to choose bundles over single-priced options, because this cuts down on effort and search costs (Harris & Blair, 2006). However, this 'bundling bias' was shown to alter people's behaviour, so that they are less likely PE 652.727 to experience full value from all purchased items (Soman & Gourville, 2001) and might buy more than they had initially planned to; ...
This paper defines loot boxes and describes their behavioural effects, including problematic behaviour. It examines the regulatory framework at EU and national level within which loot boxes operate, provides an overview of public and industry practices, and derives recommendations. Framing the debate around loot boxes, away from gambling and towards consumer protection, would provide the EU with an array of tools to address problematic practices and minimise potential harm, especially for minors.
... Previous research also shows that the presentation format of bundle prices and discounts influences consumers' evaluations and choices (Arora, 2011;Hamilton & Koukova, 2008;Hamilton & Srivastava, 2008;Janiszewski & Cunha, 2004;Johnson et al., 1999). Generally, bundled products are attractive to consumers because they represent reduced search costs, contribute to reducing risk, and add value by integrating the components needed to create a valuable overall product experience (Harris & Blair, 2006a, 2006b). On the other hand, price promotion strategies are strongly related to lower competitor price levels. ...
Price dispersion is an important indicator of pricing strategy and market efficiency. However, the relationship between price dispersion and sales has not been explored, especially for durable goods such as automobiles. In this study, we use a unique data set from Autohome comprising the actual transaction prices of buyers to assess the extent of price dispersion in the new automobile market. Based on an empirical analysis of over 222,592 price observations for 59 vehicle models collected over a period of 48 months, we find that the percentage difference ( PD) and coefficient of variation ( CV) of new automobile transaction prices are 43.4% and 9.9%, respectively. In addition, the empirical results show that the price dispersions lower for non-sedan type, Chinese car brands, and produced by state-owned companies. We further investigate whether the increase in the price dispersion of a new automobile has a positive impact on automobile sales using a multiple quadratic regression model. The findings show that price dispersion has positively impact of sales. More interestingly, negative quadratic effects are observed, indicating a concave-down-increasing relationship between price dispersion and sales. This implies that an extreme price dispersion is less helpful than a moderate price dispersion. These findings advance knowledge of consumer buying behavior and seller pricing strategies, with important theoretical contributions and practical implications for automobile companies.
... This might be due to the consumer needs to spend a bigger size and quantity on the food product for the household consumption befitting their family size. According to Harris & Blair (2006), for consumers, buying in a bundle would also mean gaining a reduction in cost transaction. Only 121 respondents showed an interest in nutritional facts when buying food products for household consumption. ...
The aim of this study is to determine the factors affecting the consumer buying behaviour toward food products in Selangor. Consumer behaviours comprise four factors: cultural, social, personal, and psychological factors. These factors influence consumer buying behaviour toward Malaysian local brands. Data were collected through online questionnaires using Google form. The sample of study consisted of 210 consumers in Selangor. In particular, principal components analysis (PCA) was employed in order to identify the factors that affect consumers on preferring locally produced food products. The findings of this study indicate that Halal logo was the first choice in terms of consumer’s perspective on the product attributes when buying food products followed by price. Size and quantity, and packaging are the third and fourth attributes considered by consumers when buying food products. Our result suggests that, by providing this consumer information to small scale or local sellers will encourage more consumers to purchase local food products.
... Bundling is well known to be an efficient way to introduce new products, and new products are often tied in with popular products in the market (Reinders et al., 2010). When shopping for frequently purchased products, consumers often are used to purchasing bundles of products due to the lower unit price compared to single products (Janiszewski & Cunha, 2004), higher efficiency in product searching (Harris & Blair, 2006), the convenience of purchasing (Nagyová & Košičiarová, 2017), and accommodation for both current and future consumption (Kwak et al., 2015). Bundle preference often relies on its global features derived from all components (Farquhar & Rao, 1976). ...
New product development can not only satisfy consumers’ need to seek variety but also is important for a company to achieve long-term financial success in the food market. Bundling is well known to be an efficient way to introduce new products, especially when new products are tied in with popular products. Here we report a study designed to investigate how the variation in the flavors of the items within a three-item food bundle (i.e., flavor variety) and the difference in the packaging colors of these items (i.e., color variety) may interact to influence consumers’ ratings and choices of the bundles. The participants were asked to rate their liking of and willingness-to-pay (WTP) for each three-yogurt bundle before choosing a more favorable bundle out of each two-bundle choice set. On one hand, the results revealed that participants preferred the bundles consisting of two of the same popular flavors and one new flavor over those consisting of three different new flavors. On the other hand, the results revealed the color variety of bundles modulated their preference for bundles consisting of one popular flavor and two different new flavors. Collectively, our findings demonstrated how the color of food packaging might be used as a marketing tool to influence consumers’ preference for bundles by modulating their perception of the flavor variety of food bundles. These findings shed light on how to skillfully design the packaging and assortment for foods.
... Durante as primeiras décadas do século XXI foi possível identificar um significativo crescimento do número de usuários de smartphones pela população mundial e brasileira e consequentemente as empresas prestadoras de serviço buscam ferramentas para que o cliente permaneça mais tempo on-line possível e uma das alternativas encontradas foi a oferta de serviços e aplicativos a estes usuários Harris e Blair (2006). ...
Resumo A popularização dos smartphones tem evoluído bastante nas primeiras décadas do século XXI, o que gerou também a oportunidade mercadológica para o uso deste tipo de equipamento para o entretenimento, o objetivo deste artigo é realizar um levantamento do comportamento dos gamers de smartphones do Estado do Pará na preservação da privacidade de seus dados e sua segurança on-line, sendo que a metodologia da pesquisa foi baseada no modelo netnográfico aplicados em redes sociais, especificamente em grupo de gamers de jogos online, o resultado evidenciou a existência do paradoxo da privacidade nestes grupos de usuários de smartphones uma vez que 30% jogam por mais de 3 horas diárias e 77% não utiliza aplicativo de análise estática e 10% dos respondentes armazenam senhas no smartphone sem qualquer criptografia, sendo assim pode-se concluir que o paradoxo da privacidade é uma ação que ocorre concomitante entre o saber o que deve ser feito e realmente realizar a ação, mesmo sabendo que a omissão poderá acarretar sérios problemas futuros na preservação da informações pessoais. Palavras-Chave Informação; Telefonia móvel; Sistema de informação.
... Many retail stores already use bundles for other products and research has shown that consumers are motivated to purchase bundles when they perceive it reduces the total cost of goods and/or reduces search costs. [21][22][23] In this study, one store that was frequented by participants capitalized on product placement by locating a WIC-only section near the front of the store. This made it convenient for customers to quickly find items and/or replace ineligible items for WICeligible items at the check-out. ...
The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) successfully improves participant nutrition, but program effectiveness is threatened by retail shopping challenges, which may reduce benefit redemption and participant retention. Focus groups with WIC participants examined barriers to using WIC benefits and potential strategies to improve redemption. The analysis included a three-pass qualitative process using deductive and inductive thematic analysis. Barriers included confusion over finding eligible products, difficulty checking out, and perceived stigma. Strategies included promotion and strategic placement of approved items and better customer service. Retailer practices and regional policy amendments are potential strategies for improving the WIC shopping experience and program effectiveness.
... Thus, as bike sharing, together with PT, was already included as baseline elements of the MaaS bundle, the respondents in our sample might not have perceived additional value in the mobility services provided by e-scooter sharing. Third, research on product/service bundling emphasizes the importance of value-adding complementarity of the products or services in the bundles, because otherwise consumers are more likely to purchase the products or services separately e.g., [77,79]. This agrees with Guidon et al.'s [45] findings, which showed that complementary mobility services such as PT and car sharing achieved the highest WTP among their respondents. ...
Current mobility trends indicate that the popularity of privately-owned cars will decrease in the near future. One reason for this development is the diffusion of mobility services such as car or bike sharing, or Mobility-as-a-Service (MaaS) bundles. Especially, MaaS bundles have the potential to respond to environmental issues and provide reliable mobility to users, thus illustrating the possibilities of being mobile without owning a car. Most of the past research on MaaS bundles, however, has focused on bigger cities that already have good infrastructural bases. Building on previous work in the MaaS field, we conducted a choice-based conjoint survey (n = 247) in Austria to investigate consumer preferences for MaaS packages in a suburban area. Further, we gathered data on the consumers’ willingness to pay, especially for including electric vehicles in the form of e-car sharing and e-scooter sharing in MaaS packages. The results highlight the importance of package price as the attribute with the highest impact on purchase intention. Further, participants in our study most preferred MaaS packages that included e-car sharing to ones with e-scooter sharing. Using latent class analysis, we classified the respondents into three different segments with varying preferences for MaaS bundle features, and conducted market simulations.
... Hal ini dikembangkan kembali oleh (Estelami, 1999) yang membedakan dalam pemilihan produk, konsumen juga memperhatikan pada ada tidaknya barang pendukung (complementary bundles) atau yang bukan pendukung (noncomplementary bundles). Lebih lanjut (Harris & Blair, 2006) melakukan komparasi pemilihan produk dengan satu varian atau barang yang bervarian. ...
This research aim to examine the affects of price bundling, product bundling on purchase intention and complementary product as moderating variable in convenience store. Sample was taken with purposive method as much 160 sample in questionnaire survey with closed question and 5-point likert scale. the collected data was processed using SmartPLS02. As the result of hyphoteis test are H1 accepted, which means that the price bundling variable has a significant on purchase intention. H2 is accepted, which means product bundling variable has a significant on purchase intention. H3 is accepted, which means complementary product has moderating effect on on relationship of price bundling to purchase intention. H4 is rejected, which means complementary product can’t be moderating variable on relationship of product bundling to purchase intention. Based on the result, price bundling and product bundling has a signinficant effect on purchase intention.
... Another context principle is product bundling. Bundles are sometimes perceived to be worth more than the individual parts because they reduce search effort, reduce ordering costs, or are featured and perceived to be a promotion (Harris & Blair, 2006;Sharpe & Staelin, 2010). Consumers are likely to spend more when initially offered a "loaded" model with the opportunity to delete some options opposed to when they are offered a base model with the opportunity to add some options (Levin et al., 2002). ...
Variations in the pricing approaches firms employ may partially explain why observed industry prices appear inconsistent with economic theory. Some firms may use principles developed from psychology that do not fit traditional economic models to enhance their profits beyond the basic solutions from economic theory. This paper describes more than fifty of these principles, dividing them into four categories: framing, congruency, context, and signaling. By studying these principles from psychology, researchers and policy makers can better understand the prices they observe in the marketplace. By following more of these principles, firms may be able to enhance their performance.
Journal of Applied Business and Economics
http://www.na-businesspress.com/JABE/LarsonRB_Web16_1_.pdf
... Tourists receive numerous services at a lower cost on vacation packages (Wong and Kwong 2004;Wickens 2002). If a visitor selects to buy an all-inclusive package is due to the fact that the anticipated value of the package is high enough in contrast to the required market research and the acquisition of holiday services from various sellers (Harris and Blair 2006). Sheldon and Mak (1987) contribute that a lot of visitors believe package tours to be less expensive that independent holidays. ...
All-inclusive hotels have been evolved as an attractive holiday choice for several travelers due to their ability to provide a relaxed holiday with predetermined costs and full amenities. Previous studies on that specific feature of hospitality firms have examined the motivations of travelers behind that choice, yet there is scarce evidence regarding the satisfaction of all-inclusive visitors and whether income and family size are significant determinants of their satisfaction. The study utilizes a large survey of “all-inclusive” visitors summing up to 1600 questionnaires for the exploration of the factors determining tourists’ satisfaction. This research adjoins the existent bibliography by exploring some additional determinants not examined by previous studies such as the size of the family and the income level of the travelers. Empirical evidence indicated that the factors of convenience and economy of resources were impacting customer satisfaction positively along with previous positive experience of visitors. Nevertheless, empirical evidence seem to differentiate when the impact of income and family size is taken into consideration. Specifically, the previous all-inclusive experience, convenience and economy of resources seem to be highly significant only for families with children while the same factors were insignificant for families without children. Finally, the same factors were highly and positively significant for low income visitors and start to become insignificant when examining the medium and high income groups. These evidence provide useful policy implications for hotel managers which offer all-inclusive packages, in order to improve their services and target adjust their tactic strategically based on customer characteristics.
... This is especially true if customers get used to their new found Internet speed or new exciting channels; they will be more reluctant to give them up. Marketers might wish to encourage bundle purchases to extend brand preference or to encourage consumers to spend more (Harris and Blair 2006). The added entertainment not only makes it harder for Comcast customers to leave, but in their minds it also helps justify the price for services. ...
Students in Principles of Marketing often have little appreciation for the importance of pricing strategies. Given the emphasis on promotion in the marketing mix, students at this level often view marketing as advertising or selling and consider pricing as an afterthought. Instruction on pricing perpetuates this lack of awareness when pricing strategies are presented as mutually exclusive. The Comcast case as detailed in this paper provides a comprehensive yet concise overview of several key concepts in pricing. Its main value to marketing educators is in demonstrating how a company can use an integrated pricing strategy to increase revenue and customer satisfaction.
... Promoting certain dishes alongside complementary products, like a suitable wine, side dish, sauce, or dessert, is a well-known marketing technique used extensively in food service. Cross-product promotions like these can boost sales of plant-rich options by making it easier for diners to choose what to eat in combination (Harris and Blair 2006;Carroll et al. 2018), as well as encouraging diners to associate plant-rich dishes with other high-quality and well-branded products, leading them to transfer their positive perceptions from these to the target plant-rich dish. ...
... The literature on marketing has provided several justifications of bundling amongst which the creation of additional value by integrating products adapted to a specific need (Chiambaretto & Dumez, 2012). When there is a complementarity between different products, customers have an interest in purchasing them together due to additional advantages such as the reduction of search costs (Harris & Blair, 2006). In Senegal, CNAAS and the aggregators it works with, have trialled a range of options to encourage take-up of WII. ...
... It impacts our governing according the sociological structure, political environment and interactions between society and institutions. The use of different tools and strategies in the new technological environment (Zhou, Dong, Kong, & Liu, 2019) is becoming more and more common, attractive and integrated (Harris & Blair, 2006;Lee, Park, & Kang, 2018). The internet of things, nanotechnologies, robotics, artificial intelligence and innovative technology centers, among others, are transforming organizations and our society. ...
Resumo Este artigo tem como objetivo resumir as perspectivas tecnológicas e os cenários inovadores aplicados na região amazônica. Uma chamada de artigos para a edição especial possibilitou quatro manuscritos aceitos que servem como fonte para este resumo. Todos esses artigos enfocam casos específicos na região da Amazônia Legal e fornecem evidências empíricas sustentadas por teorias e literatura relevante. Todos os artigos enfatizaram a necessidade de investimento na forma de redes para desenvolvimento e inovação. Um descritivo, usando de abordagem qualitativa utilizando o software bibliométrico WordStat 8® identificou as palavras mais utilizadas nos quatro artigos que incluem esta edição especial. Os termos mais relevantes identificados foram: rede, inovação, firmas, produção, pesquisa e desenvolvimento. No total, esses artigos apontam para parceiros e instituições variadas, necessários para construir redes de desenvolvimento e inovação. Esta edição especial é um primeiro passo para construir uma base de conhecimento focada na região amazônica que falta na literatura acadêmica. Contribuições futuras devem construir e expandir a discussão de casos empíricos e refletir diferentes disciplinas que contribuem para indústrias, políticas, sociedade e redes. Isso é necessário para melhorar inovação e desenvolvimento econômico desta importante região. Palavras-chave: inovação; rede; empresas; pesquisa e desenvolvimento; região amazônica. Abstract This paper aims to summarize the technology perspectives and innovative scenarios applied in the Amazon region. A call for papers for the Special Issue yielded four accepted articles that serve as the source for the summary. All these articles focus on specific cases in the Legal Amazon region and provide empirical evidence supported by theories and relevant literature. All the articles emphasized the need for investment in the form of networks for development and innovation. A descriptive, qualitative approach using the bibliometric software WordStat 8® identified the words most frequently used in the four papers included this special issue. The most relevant terms identified were: network, innovation, firms, production, research and development. In total, these articles point to varied partners and institutions necessary for building networks to further development and innovation. This Special Issue is a first step to building a knowledge base focused on the Amazon region that is missing in the academic literature. Future contributions must build and expand the discussion of empirical cases and reflect different disciplines that contribute to industries, policies, society and networks. This is necessary to improve innovation and economic development of this important region.
... It impacts our governing according the sociological structure, political environment and interactions between society and institutions. The use of different tools and strategies in the new technological environment (Zhou, Dong, Kong, & Liu, 2019) is becoming more and more common, attractive and integrated (Harris & Blair, 2006;Lee, Park, & Kang, 2018). The internet of things, nanotechnologies, robotics, artificial intelligence and innovative technology centers, among others, are transforming organizations and our society. ...
Resumo Este artigo tem como objetivo resumir as perspectivas tecnológicas e os cenários inovadores aplicados na região amazônica. Uma chamada de artigos para a edição especial possibilitou quatro manuscritos aceitos que servem como fonte para este resumo. Todos esses artigos enfocam casos específicos na região da Amazônia Legal e fornecem evidências empíricas sustentadas por teorias e literatura relevante. Todos os artigos enfatizaram a necessidade de investimento na forma de redes para desenvolvimento e inovação. Um descritivo, usando de abordagem qualitativa utilizando o software bibliométrico WordStat 8® identificou as palavras mais utilizadas nos quatro artigos que incluem esta edição especial. Os termos mais relevantes identificados foram: rede, inovação, firmas, produção, pesquisa e desenvolvimento. No total, esses artigos apontam para parceiros e instituições variadas, necessários para construir redes de desenvolvimento e inovação. Esta edição especial é um primeiro passo para construir uma base de conhecimento focada na região amazônica que falta na literatura acadêmica. Contribuições futuras devem construir e expandir a discussão de casos empíricos e refletir diferentes disciplinas que contribuem para indústrias, políticas, sociedade e redes. Isso é necessário para melhorar inovação e desenvolvimento econômico desta importante região. Palavras-chave: inovação; rede; empresas; pesquisa e desenvolvimento; região amazônica. Abstract This paper aims to summarize the technology perspectives and innovative scenarios applied in the Amazon region. A call for papers for the Special Issue yielded four accepted articles that serve as the source for the summary. All these articles focus on specific cases in the Legal Amazon region and provide empirical evidence supported by theories and relevant literature. All the articles emphasized the need for investment in the form of networks for development and innovation. A descriptive, qualitative approach using the bibliometric software WordStat 8® identified the words most frequently used in the four papers included this special issue. The most relevant terms identified were: network, innovation, firms, production, research and development. In total, these articles point to varied partners and institutions necessary for building networks to further development and innovation. This Special Issue is a first step to building a knowledge base focused on the Amazon region that is missing in the academic literature. Future contributions must build and expand the discussion of empirical cases and reflect different disciplines that contribute to industries, policies, society and networks. This is necessary to improve innovation and economic development of this important region.
... Tourists receive numerous services for less money on package tours (Wong and Kwong, 2004;Wickens, 2002). If a visitor selects to buy an all-inclusive package is due to the fact that the anticipated value of the package is high enough regarding to shopping around and accumulating tourism products from various vendors (Harris and Blair, 2006). Sheldon and Mak (1987) contribute that a lot of visitors perceive package tours to be less expensive that independent holidays. ...
... Also, each item was purchased a la carte at $6.95 for each entrée and $2 for each option of side dishes and vegetables. Purchasing each item separately has been shown to decrease the purchase of vegetables, while a combination of products with a fixed single price (such as an entrée plus vegetable) increases the purchase of vegetables [32][33][34]. Finally, the perceived value assigned to certain products may have been problematic. ...
In the transition from high school to university, vegetable consumption tends to deteriorate, potentially influencing immediate and longer-term health outcomes. Nudges, manipulation of the environment to influence choice, have emerged as important to behavior change goals. This quasi-experimental pilot study examined the impact of a contextually feasible evidence-informed nudge intervention on food purchasing behavior of older adolescents (1st year students) in a university residence cafeteria in British Columbia, Canada. A co-design process with students and staff identified a student relevant and operationally feasible nudge intervention; a placement nudge, fresh vegetables at the hot food table, combined with a sensory and cognitive nudge, signage encouraging vegetable purchase). Using a 12-week single-case A-B-A-B design, observations of the proportion of vegetables purchased were used to assess intervention efficacy. Data analysis included visual trend inspection, central tendency measures, data overlap, variability and latency. Visual trend inspection showed a positive trend when nudges were in place, which was more apparent with female purchases and during the first intervention (B) phase. However, further analysis showed lack of baseline stability, high variability across phases and overlapping data, limiting efficacy conclusions. Menu choices, staff encouragement, term timing and student finances are other potential influences. Further ‘real world’ nudge research is needed.
... Past research on consumers' evaluation of product bundles has largely focused on identifying factors that positively affect bundle attractiveness and profitability. These studies have found that several factors including search cost reduction (Harris & Blair, 2006a), compatibility risk reduction (Harris & Blair, 2006b), and bundle size (Engeset & Opstad, 2017) significantly influence consumers' evaluation of product bundles. Among these factors, functional complementarity between bundle items has been identified as the factor that most significantly influences the attractiveness of bundles (Gaeth, Levin, Chakraborty, & Levin, 1991;Harlam et al., 1995;Herrmann, Huber, & Coulter, 1997;Koukova, Kannan, & Ratchford, 2008;Strahilevitz & Myers, 1998). ...
Past research shows that consumers evaluate bundles with complementary items more favorably than they evaluate bundles with non‐complementary items. In a series of four experiments that involve evaluation, willingness to pay, and real choice, we show that this well‐established effect is moderated by the level of mindset abstraction. Complementarity (vs. non‐complementarity) among bundle items prompts relatively concrete (vs. abstract) thinking (Study 1). Consequently, consumers evaluate complementary (vs. non‐complementary) bundles more favorably when they think in more concrete (vs. abstract) terms (Study 2) or when the consumption context involves lower (vs. higher) spatial (Study 3) or temporal (Study 4) distance. These effects are mediated by consumers' heightened sense of “feeling right” during decision making under construal fit (Study 4). Finally, the level of complementarity among bundle items differentially influences mental abstraction because of consumers' tendency to perceive bundles as a single inseparable unit. Therefore, the effect attenuates when consumers adopt a separating—rather than a connecting—mindset (Study 3). Overall, this work significantly extends past research on product bundles and offers several managerial implications. This article is protected by copyright. All rights reserved.
Product bundling has gained significant traction in the hospitality industry, with an increasing number of businesses offering all-inclusive resort packages to attract consumers. With the increase in online travel purchases, both academics and industry professionals are increasingly interested in understanding the factors influencing consumer travel package choices. This study employs a 2 x 5 mixed-design experiment where participants evaluated both an all-inclusive and a non-inclusive resort, with variations in price presentation. Pricing was presented either transparently or non-transparently, and package savings were displayed in multiple formats. The results reveal a strong consumer preference for all-inclusive resort packages, regardless of the perceived value. Moreover, how pricing information is presented plays a crucial role in shaping consumer purchase decisions. These findings highlight the importance of price presentation strategies in the marketing of travel packages and offer valuable insights for both marketers and practitioners in the hospitality sector.
The advancement in technology has enabled sellers to discriminate based on customer-revealed purchasing intention. Sellers can now track the things purchased by buyers using various new technologies like sensors and RFID tags, and with this, there are new challenges in the implementation of bundling. To use this data, see what this new perceivability means for evaluating and market results. A detailed critical review was carried out on product bundling and their practices across the world in different markets. On the basis of our review of literature, it can be concluded that there are certain factors that are significantly more important than others. In this study, observations are made on how different factors compare to each other, and which should be prioritized. Information quality for the relevant bundling as per the market requirements is the most critical factor and transportation, while significant, is the least important.
Bundling sales exhibit significant advantages and popularity on e-commerce platforms. However, information asymmetry between the platform and upstream suppliers dramatically affects bundling sales, but the influencing mechanism remains unclear. In this article, we introduce information sharing into bundling sales and focus on the interaction between information sharing decisions and bundling sales strategies. Our findings show that under the reselling mode, the platform exhibits a reluctance to share information with suppliers, and the inclination toward bundling diminishes as demand uncertainty rises. Conversely, under the agency mode, the platform tends to engage in information sharing when faced with high commission rates, while leaning toward bundling sales when the degree of substitution between individual products and bundled products, as well as commission rates, is moderate. Specifically, we find that in the agency mode, the platform's information sharing decisions inhibit its bundling sales strategies. Furthermore, we observe a gradual shift in the platform's distribution mode preference toward the reselling mode as demand uncertainty escalates. These findings offer valuable insights for platform management in optimizing the operational efficiency of the entire supply chain.
The primary purpose behind undertaking this research was peculiarity of life insurance
contract and secondarily it intended to understand role of financial literacy, saving
motives, insurance literacy in designing of insurance product preference.
This purpose led to natural but necessary to answer research questions: Is financial
literacy level similar across respondents of different age-group, gender, city,
education, occupation, income? Are saving motives (comprising of bequeath, wealth
accumulation, risk aversion, life style and precautionary motives) different among
respondents of different age-group, gender, city, education, occupation, income
similarly? Is insurance literacy level different for different age-group, gender, city,
education, occupation, income? Are there any underlying structures or dominating
factors in form of reasons responsible for life insurance consideration? Are financial
literacy, saving motives and insurance literacy resulting in varied product preferences?
How are product preferences associated with different demographic profiles of agegroup, gender, city, education, occupation, income?
Based on the above research questions, research hypotheses were formed. In the study,
financial literacy, saving motives, insurance literacy were in form of score of
statements individually ranked on likert scale of 1 to 5. These scores were falling in
interval category of data. Product preferences were obtained in form of rank of
preference representing ordinal data. Demographic and socio- economic variable were
continuous and nominal/ ordinal in nature. Based on this one way ANOVA tests were
run for comparing differences in financial literacy, saving motives and insurance
literacy scores for different demographic profiles and subsequently post hoc tests were
conducted in case of significance. Similarly for finding differences in life insurance
product preference for financial literacy, saving motives and insurance literacy scores,
one way ANOVA tests were conducted. Chi square tests were conducted for finding
association between ordinal data (product preference) and demographic profile
variables. Factor analysis was conducted to find presence of underlying structures and
load of various variables.
X
Based on this statistical treatment and analysis of data, it was found that there is citywise variation in financial literacy, saving motives, insurance literacy and product
preferences. Marital status, occupation, monthly income and expected changes in
income have resulted in major difference in financial literacy and insurance literacy.
Financial literacy was found to be varying with financial literacy. Major factors
affecting reason for consideration of life insurance were: child and parental
aspirations, capability building, contingency control, comfort and credit creation.
Life insurance responds to life cycle stage, perceived need for protection, and
realisation of risk and falling short in adverse situations. Life insurance goes hand
in hand with psychological input rather than financial logic. Consideration of life
insurance is contemplated to be a function of self-assessment.
Suggestions on the basis of this research were:
1 Making consumers realise insurance as distinct tool with immediate protection
rather than positioning as savings, investment etc.
2 Insurance awareness programs for making consumers aware of distinct role of life
insurance in financial and life style planning.
3 Visibility of financial need for different stages of life need to be created
4 Consumers should be provided with images of planned need / probable beneficiary
for better perception and better retention of logic followed during financial planning.
5 Differentiation to be made clear in minds of consumer pertaining to protection,
saving, investment need.
Teoride ve pratikte sıklıkla kullanılan fiyat promosyonlarına yönelik olarak tüketici fiyat algılarını anlamak sadece pazarlama teorileri kapsamında ele alınmamalı; aynı zamanda ekonomi ve psikoloji gibi farklı bilimlerden beslenerek kendi özünü yaratan pazarlamanın bu gibi bilim dallarındaki teoriler çerçevesinde de ele alınması gerekmektedir. Bu çalışmanın amacı, fiyat promosyonlarına yönelik olarak ele alınan teorilerin incelenmesi ve tüketicilerin rasyonel bireylerden çok irrasyonel bireyler olduğunu savunan davranışsal ekonomi teorileri kapsamında incelenmesidir. Araştırmanın bir diğer amacı ise, fiyat indirimlerinin birden fazla ürün ya da hem ürün hem de ek hizmetine ilişkin indirim gibi çoklu durumlarda, tüketicilerin fiyat indirimlerini karşılaştırmalı olarak analiz edebilmesine olanak sağlayacağı düşünülen zihinsel muhasebe teorisi ve hedonik çerçeveleme ilkeleri kapsamında ele alınmasıdır. Bu amaçlar doğrultusunda, literatürdeki ana konuları, yazarları, kaynakları, en çok atıf alan makaleleri ve ülkeleri bulmak için bilimsel literatür, bibliyometrik bir analizle belirlenmiş ve analiz edilmiştir. Bunu yapmak için, Web of Science (Wos) ve Scopus’un ana koleksiyonlarında indekslenen makaleler analiz edilmiştir. Araştırma sonuçları iki aşamalı olarak sunulmuş olup ilk aşamada davranışsal ekonomi ve fiyat promosyonlarına yönelik çalışmalar incelenmiştir. İkinci aşamasında ise spesifik olarak zihinsel muhasebe teorisi & hedonik çerçeveleme ve fiyat promosyonlarına yönelik çalışmalar ele alınmıştır.
The rise of omni‐channel retailing poses challenges for e‐marketplace platforms. To retain third‐party sellers in the face of competitive pressure from rivals, e‐marketplace platforms are compelled to provide support for online‐offline channel integration (OOCI). However, the provision of OOCI support can adversely affect an OOCI‐enabled platform's product sales growth by encouraging consumers to switch to brick‐and‐mortar stores operated by third‐party sellers. To ascertain how the OOCI‐enabled platform can outperform under such circumstances, we analyzed data on sales of 51,409 products on a dominant Chinese e‐marketplace platform as well as inter‐platform function usage difference across 209 third‐party sellers. Combining propensity score matching with hierarchical linear modeling, we discovered that informational OOCI (e.g., concurrent availability of a product on both online and offline channels) negatively influences the OOCI‐enabled platform's product sales growth, whereas the effect of physical OOCI (e.g., the option of store pickup for online purchases) is not significant. Additionally, we found that the three constituent sub‐dimensions of third‐party sellers' inter‐platform function usage difference (i.e., volume difference, category orientation specialization, and uniqueness) moderate the impact of OOCI on the OOCI‐enabled platform's product sales growth differently. Findings from this study thus yield actionable guidelines for e‐marketplace platforms pursuing omni‐channel retailing strategies.
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.
A discount through bundling can harm consumers’ perception of the reference price of, and willingness to pay for, the bundled products. This study investigates how types of bundling such as mixed‐leader and mixed‐joint bundling affect the value perception of a primary product. Three experiments were developed and used to test theoretical hypotheses. Data were collected and analyzed using multivariate analyses of variance and mediation analysis with the bootstrapping procedure. Results show that leader bundling is more efficient in protecting the value perception of the primary product than joint bundling. The bundling type effect is mediated by consumers’ discount attribution and is strengthened in a low product similarity scenario. Further, cognitive style and attention level significantly mediate the relationship between product similarity and consumers’ discount attribution, especially under leader bundling. These findings provide a deeper understanding of the bundling type effect. The moderating effects of product similarity show the conditions for the bundling type effect. Additionally, the mediating effect of discount attribution is very meaningful since attribution is the most frequently mentioned theory in bundling research, while no study has directly examined it to date. The findings also provide useful implications for retailers to design efficient bundling promotion.
The adoption of electric vehicles (EVs) is accelerating. Knowing which factors determine EV purchases among the first innovative adopters, we now need to understand the preferences of wider customer segments that are currently entering the market. The bundling of EVs with additional services is one strategy for fostering EV adoption among the latter. Early studies have shown the potential of this marketing strategy for increasing EV customer acceptance. However, they often do not empirically test the identified bundles; no investigation to date has analyzed the effect of the most commonly applied bundle in practice – that of EV and charging services. We address this gap and create relevant insights for academia by conducting an online study with potential Swiss EV adopters. We applied two empirical approaches: a between-subject design experiment to study the effect of the essential bundle type on EV purchase willingness, and a choice experiment to identify the preferred bundle type of individual customer segments. We find that bundling EV and charging services increases EV purchase willingness of respondents with little prior knowledge of EVs. The choice experiment identified three customer segments that we name Tech-oriented adopters, Convenience-oriented adopters, and Likely non-adopters. They differ in the importance scores and part-worth utilities they attach to the individual attribute levels and general bundle preferences. Based on these results, we provide recommendations for policy and practice regarding how to promote and utilize bundles to foster EV purchases among later groups of adopters, and propose avenues for further research.
Ahire, DeepakBhandari, SmritiKamble, KiranThe algorithm aims to find the Kth max sum pair of two indices of an array of N (N≥ 2) distinct elements [a1, a2, a3, ..., an]. If the sum of values represented by the 2 indices of a single pair in array A is the same as that of any other pair, i.e., if P(i, j) and P(m, n) are 2 distinct pairs and if (A[i]+A[j]=A[m]+A[n]), then the pair containing the index which represents the maximum of all 4 values represented by indices of the 2 pairs in the array obtains the highest priority, i.e., if (A[m]>A[i]>A[n]>A[j]), then the pair containing the index m obtains the highest priority. The purpose of this algorithm is to optimize the computation of recommendations on real time platforms. At the time of making a purchase on e-commerce platforms, with millions of options available in the product catalog, the algorithm can be used to recommend the best complementary product that can be bought as a pair with the main product or two all together different products of same type as of main product which can be bought as a combo or a pair. Not only the top recommendations, but random recommendations are also necessary so that the customers get a good breadth or variety of the available products in the catalog. In this paper, we propose an algorithm which can be used to address both the scenarios in real time and conclusively, it is evident that the time and space complexities are independent of K.
In this research, we examine the effect of joint versus separate visual presentation on consumers’ product evaluation. Counter to prior research on hedonic editing and unpacking, which suggests that separate presentation or unpacking produces greater utility, we propose and demonstrate in this paper that joint visual presentation can increase product evaluation. This pattern of effects occurs because presenting products together facilitates mental imagery of the product consumption, which leads to greater perceived psychological ownership and higher product evaluation. As such, the effect of joint presentation on product evaluation is attenuated when mental imagery is disrupted under joint presentation, encouraged under separate presentation, or when products lack complementarity to elicit mental imagery of one cohesive consumption episode. Evidence from seven studies provides converging support for these hypothesized effects and their underlying process. Our findings contribute to the literature on visual presentation, unpacking, and imagery, offering relevant implications to marketers and retailers.
Package promotion (or product bundling and bundle promotion) is widely adopted as an effective marketing strategy to increase sales, but the social tightness of the users significantly influences their willingness to purchase certain products. However, addressing these two factors simultaneously is not a trivial task because it is critical to properly choose a set of socially tight target users to encourage them to buy the products together (social tightness factor), and the selected users should have high preference for the package of products (preference factor). To address the aforementioned challenges, in this article, we study the research problem of promoting a package of products to a set of closely related friends. We formulate a new research problem, named package-oriented group identification (PGI), which can obtain a set of
t
socially tight users (i.e., inducing more than
k
edges) who have the maximum preference for a package of items. We prove that the proposed PGI problem is NP-hard, and we develop a polynomial-time algorithm named incremental solution construction with redundancy and infeasibility avoidance for PGI (ISCP) that can effectively and efficiently obtain a good solution to the PGI problem. We compare the performance of ISCP with four other baselines on a large-scale product copurchasing data set with more than 500 k products and 1.7 M copurchasing relationships. The results show that our proposed ISCP algorithm outperforms the other baselines in terms of solution quality and efficiency.
In just a few years, the Mobility as a Service (MaaS) concept has gone from an idea discussed by very few, to being a prominent topic in any transportation related debate. However, within this time, there have only been few rigorous studies that explore the various aspects of MaaS. This thesis aims to contribute to existing knowledge by providing empirical evidence on individual preferences for MaaS plans and their components. In doing so, first desk-research is conducted to summarise existing MaaS schemes and outline the MaaS ecosystem. Next, MaaS surveys that are able to capture individual preferences for MaaS products are designed and specific challenges in the design process identified. The MaaS surveys, including MaaS plan stated preference experiments, are applied in two case study areas of London and Greater Manchester. Using the novel data collected, individual preferences for MaaS plans are examined using two distinct studies: (1) a mixed methods research conducted in London, which expands the survey by adding a qualitative (in-depth interview) element to examine user preferences for MaaS plans and the ways individuals choose between them; and (2) a latent class choice model based on data collected from Manchester to examine whether there is heterogeneity in preferences. Finally, implications for industry and policy stakeholders are discussed as well as interventions that can best support the widespread adoption of MaaS.
The results of this thesis show there is interest in the concept of MaaS among potential users as many see value in a single app that integrates different transport modes into a single service. In general, individuals are hesitant in purchasing pre-payed MaaS plans and would be more comfortable with a pay-as-you-go product option. While many people are reluctant towards MaaS plans, the results indicate that heterogeneity exists in preferences towards them and there are different user groups based on socio- demographic characteristics and current mobility habits. Smaller, less expensive plans including modes such as public transport and bike sharing can be used to target students or middle-income people with have high overall mode usage. Larger, more expensive plans that include modes such as taxi and car sharing in addition to public transport, will be attritive to individuals who are likely younger, male, well-educated, have higher income and already use many transport modes. Older population groups, individuals with low income and those that do not use any transport modes or are uni-modal are least likely to adopt MaaS plans.
The thesis also provides insights into individuals’ preferences towards transport modes within MaaS plans. The analysis showed that respondents classify modes within MaaS plans into three categories: ‘essential’ modes that are pivotal to the individual and which
they most likely already frequently use; ‘considered’ modes are those that they would be willing to include but may not yet use; and ‘excluded’ modes are those that they definitely do not want in their plans and would eliminate any plan that included these. Public transport consistently proved to be an essential mode, while taxi, car sharing and bike sharing could be ‘essential’, ‘considered’ or ‘excluded’ depending on the characteristics of the individual.
The main contributions of this thesis are the novel data collected in two case study cities about individuals’ preferences for MaaS plans and the findings gained through the analysis providing insights into possible target audiences and product designs for MaaS plans.
In just a few years, the Mobility as a Service (MaaS) concept has gone from an idea discussed by very few, to being a prominent topic in any transportation related debate. However, within this time, there have only been few rigorous studies that explore the various aspects of MaaS. This thesis aims to contribute to existing knowledge by providing empirical evidence on individual preferences for MaaS plans and their components. In doing so, first desk-research is conducted to summarise existing MaaS schemes and outline the MaaS ecosystem. Next, MaaS surveys that are able to capture individual preferences for MaaS products are designed and specific challenges in the design process identified. The MaaS surveys, including MaaS plan stated preference experiments, are applied in two case study areas of London and Greater Manchester. Using the novel data collected, individual preferences for MaaS plans are examined using two distinct studies: (1) a mixed methods research conducted in London, which expands the survey by adding a qualitative (in-depth interview) element to examine user preferences for MaaS plans and the ways individuals choose between them; and (2) a latent class choice model based on data collected from Manchester to examine whether there is heterogeneity in preferences. Finally, implications for industry and policy stakeholders are discussed as well as interventions that can best support the widespread adoption of MaaS. The results of this thesis show there is interest in the concept of MaaS among potential users as many see value in a single app that integrates different transport modes into a single service. In general, individuals are hesitant in purchasing pre-payed MaaS plans and would be more comfortable with a pay-as-you-go product option. While many people are reluctant towards MaaS plans, the results indicate that heterogeneity exists in preferences towards them and there are different user groups based on socio-demographic characteristics and current mobility habits. Smaller, less expensive plans including modes such as public transport and bike sharing can be used to target students or middle-income people with have high overall mode usage. Larger, more expensive plans that include modes such as taxi and car sharing in addition to public transport, will be attritive to individuals who are likely younger, male, well-educated, have higher income and already use many transport modes. Older population groups, individuals with low income and those that do not use any transport modes or are uni-modal are least likely to adopt MaaS plans. The thesis also provides insights into individuals’ preferences towards transport modes within MaaS plans. The analysis showed that respondents classify modes within MaaS plans into three categories: ‘essential’ modes that are pivotal to the individual and which they most likely already frequently use; ‘considered’ modes are those that they would be willing to include but may not yet use; and ‘excluded’ modes are those that they definitely do not want in their plans and would eliminate any plan that included these. Public transport consistently proved to be an essential mode, while taxi, car sharing and bike sharing could be ‘essential’, ‘considered’ or ‘excluded’ depending on the characteristics of the individual. The main contributions of this thesis are the novel data collected in two case study cities about individuals’ preferences for MaaS plans and the findings gained through the analysis providing insights into possible target audiences and product designs for MaaS plans.
We evaluate the impact of bundling on firms’ product and pricing strategies by developing and solving a multi-stage game theoretic model to represent strategic interactions between two competing firms. Each firm is able to produce two homogeneous products and can opt to bundle them together, which may have the dual benefits of providing added value to consumers and reducing marginal cost for firms. One firm (the leader) determines its product offering before the other (the follower), and both then simultaneously set prices. We demonstrate the existence and uniqueness of a Nash equilibrium and show that the option to bundle can benefit all competitors simultaneously. When mixed bundling is not an option, we characterize and quantify the leader’s advantage in terms of profitability. However, when mixed bundling is an option, the follower may reverse its profit disadvantage by using it as a potential threat. Furthermore, our numerical results show that (i) bundling enhances the balance between firms’ total profit and consumer surplus; (ii) for the firm that bundles, value addition and cost saving brought by bundling act as strategic complements in that their combined benefit is larger than the sum of individual benefits; and (iii) value addition and cost saving improve the market demand, firms’ total profit as well as consumer surplus.
Software made from autonomous business services is gaining popularity. Now end users can build large applications by assembling a suite of services. Because some end users might have limited knowledge of their requirements and the functionality of available services, the key challenge is to find the services needed to build an application. The task of finding the services matching requirements requires specialized knowledge—knowledge of requirements and the functionality of available services—not just mere general competence. Moreover, the complexity of the requirements could also hinder the ability of end users to select services. However, there is little research into how the end users’ sophistication and requirement complexity affect their ability to avoid duplication (i.e., select the most cost-effective set of services) and select a set of services that satisfy their requirements. We provide a conceptual framework for the choice problem faced by the decision maker and develop a set of hypotheses on end user's sophistication and requirement complexity, and the impact of these factors on outcome performance—the ability to avoid duplication and select the appropriate services. Then we conduct an empirical study to test the hypotheses. Empirical results offer support for all hypotheses. Our work has several implications. We demonstrate both conceptually and empirically that end users’ naivety has a significant impact on service duplication. For a profit-maximizing service vendor, knowledge of the end user's sophistication/naivety allows there to be different pricing strategies: (1) a pure component strategy, (2) a pure bundling strategy, or (3) a mixed bundling strategy.
In this paper, we study the bundle design problem for offering personalized bundles of services using historical consumer redemption data. The problem studied here is for an operator managing multiple service providers, each responsible for an attraction, in a leisure park. Given the specific structure of interactions between service providers, consumers and the operator, a bundle of services is beneficial for the operator when the bundle is underutilized by service consumers. Such revenue structure is commonly seen in the cable television and leisure industries, creating strong incentives for the operator to design bundles containing lots of not-so-popular services. However, as customers might choose to bypass a bundle completely if it is not sufficiently attractive, we need to impose a quality of service (QoS) constraint on the lower bound of the perceived attractiveness. In this paper, we make two major contributions (1) recognizing the inherent differences in customer preferences, we propose an approach for detecting different user classes, and for each user class, make an appropriate bundle recommendation; and (2) in order to make the bundling scheme even more adaptive to unknown customer preferences, we propose a dynamic bundling strategy, which allows customers to “trade in” any number of undesirable services dynamically so that they can be replaced by an alternative set of services. A step to generate fixed or static bundles is also studied. The pros and cons of different bundling strategies are illustrated using a real-world dataset collected from a large leisure park operator in Asia that manages a large collection of attraction providers.
New data on the duration of the purchase decision process for cars and major household appliances are analyzed using two multivariate techniques (AID and MCA) in combination. The results emphasize the importance and complexity of interactions among variables and highlight the effects of previous experience in buying and using the product.
When offering product/service bundles to customers, marketers must decide how best to configure the bundles such that consumers do not find the bundle-choice particularly difficult. This paper examines perceived decision difficulty in selecting from a menu of bundles, where the bundles vary on the number of component services, the number of unique services between competing bundles, and their perceived similarity. It is found that larger bundles make decisions more difficult, more unique services between the competing bundles increases decision difficulty for small, but not large, bundles and similar bundles pose greater choice difficulty than dissimilar bundles. Implications of the results are discussed.
The authors examine the growing and pervasive phenomenon of brand alliances as they affect consumers' brand attitudes. The results of the main study (n = 350) and two replication studies (n = 150, n = 210) together demonstrate that (1) consumer attitudes toward the brand alliance influence subsequent impressions of each partner's brand (i.e., "spillover" effects), (2) brand familiarity moderates the strength of relations between constructs in a manner consistent with information integration and attitude accessibility theories, and (3) each partner brand is not necessarily affected equally by its participation in a particular alliance. These results represent a first, necessary step in understanding why and how a brand could be affected by "the company it keeps" in its brand alliance relationships.
Evidence suggests that some consumers react to promotion signals without considering relative price information. We adopt Petty and Cacioppo's Elaboration Likelihood Model (ELM) to explain this behavior in terms of the ELM's peripheral route to pursuasion in which the promotion signal is taken as a cue for a price cut. Experimental results show that low need for cognition individuals react to the simple presence of a promotion signal whether or not the price of the promoted brand is reduced, but that high need for cognition individuals react to a promotion signal only when it is accompanied by a substantive price reduction. Copyright 1990 by the University of Chicago.
Investigated dominant simplifying strategies people use in adapting to different information processing environments. It was hypothesized that judges operating under either time pressure or distraction would systematically place greater weight on negative evidence than would their counterparts under less strainful conditions. 6 groups of male undergraduates (N = 210) were presented 5 pieces of information to assimilate in evaluating cars as purchase options. 3 groups operated under varying time pressure conditions, while 3 groups operated under varying levels of distraction. Data usage models assuming disproportionately heavy weighting of negative evidence provided best fits to a signficantly higher number of Ss in the high time pressure and moderate distraction conditions. Ss attended to fewer data dimensions in these conditions. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Bundling is pervasive in today's markets. However, the bundling literature contains inconsistencies in the use of terms and ambiguity about basic principles underlying the phenomenon. The literature also lacks an encompassing classification of the various strategies, clear rules to evaluate the legality of each strategy, and a unifying tramework to indicate when each is optimal. Based on a review of the marketing, economics, and law literature, this article develops a new synthesis of the field of bundling, which provides three important benetits. First, the article clearly and consistently defines bundling terms and identifies two key dimensions that enable a comprehensive classitícation of bundling strategies. Second, it formulates clear rules for evaluating the legality of each of these strategies. Third, it proposes a framework of 12 propositions that suggest which bundling strategy is optimal in various contexts. The synthesis provides managers with a framework with which to understand and choose bundling strategies. It also provides researchers with promising avenues for further research.
Individuals often use several different strategies such as the expected value rule, conjunctive rule, and elimination-by-aspects, to make decisions. It has been hypothesized that strategy selection is, in part, a function of (1) the ability of a strategy to produce an accurate response and (2) the strategy's demand for mental resources or effort. We examine effort and accuracy and their role in strategy selection. Several strategies that may be used to make choices under risk are simulated using a production system framework. This framework allows the estimation of the effort required to use the strategy in a choice environment, while simultaneously measuring its accuracy relative to a normative model. A series of Monte-Carlo studies varied several aspects of the choice environments, including the complexity of the task and the presence or absence of dominated alternatives. These simulations identify strategies which approximate the accuracy of normative procedures while requiring substantially less effort. These results, however, are highly contingent upon characteristics of the task environment. The potential of production system models in understanding task effects in decisions is stressed.
Three studies were conducted to examine the role of need for cognition on attitudes formed as a result of exposure to advertisements. Prior research on need for cognition has used only long messages, counterattitudinal topics, or employed instructions that specifically told participants to evaluate products. Results of our studies reveal that need for cognition also affects the processes of attitude change when no explicit evaluation instructions are provided and when exposures are to relatively short, unfamiliar advertising messages presented in either self-paced or externally controlled formats. Consistent with prior research, attitudes of high need for cognition individuals were based more on an evaluation of product attributes than were the attitudes of low need for cognition persons (Studies 1 and 2). In addition, the attitudes of low need for cognition individuals were based more on simple peripheral cues inherent in the ads than were the attitudes of high need for cognition persons (Study 3). Implications for the study of personality variables in consumer behavior are discussed.
Bundling of products is very prevalent in the marketplace. For example, travel packages include airfare, lodging, and a rental car. Considerable economic research has focused on the change in profits and consumer surplus that ensues if bundles are offered. There is relatively little research in marketing that deals with bundling, however. In this article we concentrate on some tactical issues of bundling, such as which types of products should be bundled, what price one can charge for the bundle, and how the price of the bundle should be presented to consumers to improve purchase intent. For example, we hypothesize that bundles composed of complements or equally priced goods will result in higher purchase intention. We also hypothesize that price increases will result in larger purchase intention changes than price decreases. Further, we expect that the presentation format for describing the price of the bundle will influence purchase intention in general, and, depending on the price level of the bundle, different presentation formats will result in higher purchase intention. Finally, we hypothesize that purchase intention changes associated with different price levels will be higher for subjects who are familiar with the products than for subjects who are less familiar with the products. We used an interactive computer experiment conducted among 83 Master of Business Administration (MBA) students to test our hypotheses. Our findings suggest that: (1) bundles composed of complements have a higher purchase intent than bundles of similar or unrelated products, (2) consumers are more sensitive to a bundle price increase than to a bundle price decrease of equal amounts, (3) different presentation formats for describing the price of the bundle influence purchase intention, and (4) more familiar subjects respond to different presentations of equivalent bundles in different ways than less familiar subjects. We did not find any support for the hypothesis that bundles composed of similarly priced items have higher purchase intent than bundles composed of unequally priced products.
Information search is a critical component of the purchase decision process for most consumer durables. This paper postulates a descriptive model of information search and tests the hypothesized relationships using survey data obtained from a probability sample of new automobile purchasers. The results support the hypothesis that there are at least two unique components of prior knowledge: specific product knowledge and general product-class knowledge. The former causes less external search, the latter causes more external search. Cost of search was found to be negatively related to external search, while external search was found to be positively related to cost savings. Satisfaction was found to be related to cost savings but not to external search.
Issues and problems that emerged in using the Bettman-Park coding scheme for verbal “think-aloud” protocols are discussed, and ways to resolve them are suggested.
Bundle offers consisting of two or more products often include a price discount. The impact of the price discount on the perceived attractiveness of the bundle has been shown to depend on which product is discounted. It has been argued that discounts are more effective when they are assigned to the product that will receive the most weight in the overall evaluation of the bundle. We propose that the perceived value of the discount may also depend on a referent specific to each product. Six studies are used to provide evidence that (1) price discount framing effects can be explained by reference dependence and (2) that reference dependence and product importance independently contribute to price discount framing effects. Copyright 2004 by the University of Chicago.
This article focuses on the bundling of products with promised contributions to charity. Two lab experiments and one field study are conducted that compare the effectiveness of promised donations to charity in promoting "practical necessities" (e.g., a box of laundry detergent) to their effectiveness in promoting "frivolous luxuries" (e.g., a hot fudge sundae). The results suggest that charity incentives are more effective-in-promoting frivolous products than in promoting practical products. This research extends prior work on the effects of bundling complementary positive outcomes into the domain of affect-based complementarity with product-charity bundles. Copyright 1998 by the University of Chicago.
The effects of prior knowledge about a product class on various characteristics of pre-purchase information search within that product class are examined. A new search task methodology is used that imposes only a limited amount of structure on the search task: subjects are not cued with a list of attributes, and the problem is not structured in a brand-by-attribute matrix. The results indicate that prior knowledge facilitates the acquisition of new information and increases search efficiency. The results also support the conceptual distinction between objective and subjective knowledge.
A short form for assessing individual differences in need for cognition is described.
Although bundling, the selling of two or more products and/or services at a single price, has a history of economic research, marketing-oriented investigations have appeared only recently. This paper examines buyers' perceptions of overall savings when they evaluate a bundle offer. Such perceptions of overall bundle savings may consist of two separate perceptions of savings, each with a different relative influence: (1) perceived savings on the individual items if purchased separately and (2) perceived additional savings on the bundle. Results of an experiment indicate that additional savings offered directly on the bundle have a greater relative impact on buyers' perceptions of transaction value than savings offered on the bundle's individual items. The effect of each saving is also influenced by the magnitude of the other saving.
The subjective value given to time, also known as the psychological interest rate, or the subjective price of time, is a core concept of the microeconomic choices. Individual decisions using a unique and constant subjective interest rate will refer to an exponential discounting function. However, many empirical and behavioural studies underline the idea of a non-flat term structure of subjective interest rates with a decreasing slope. Using an empirical test this paper aims at identifying in individual behaviours if agents see their psychological value of time decreasing or not. A sample of 243 individuals was questioned with regard to their time preference attitudes. We show that the subjective interest rates follow a negatively sloped term structure. It can be parameterized using two variables, one specifying the instantaneous time preference, the other characterizing the slope of the term structure. A trade-off law called “balancing pressure law” is identified between these two parameters. We show that the term structure of psychological rates depends strongly on gender, but appears not linked with life expectancy. In that sense, individual subjective time preference is not exposed to a tempus fugit effect. We also question the cross relation between risk aversion and time preference. On the theoretical ground, they stand as two different and independent dimensions of choices. However, empirically, both time preference attitude and slope seem directly influenced by the risk attitude.
As product lines have broadened in many industries (particularly service industries), the use of mixed price bundling has increased. In mixed price bundling, a firm offers its customers the choice of buying one or more products/services individually or of buying a "bundle" of two or more products or services at a special discount. The author presents a normative framework for selecting appropriate types of services for different mixed-bundling discount forms. The framework extends the economic theory of bundling (which historically has been applied to tie-in sales) to permit explicit consideration of different types of complementarity relationships and strategic marketing objectives.
The authors propose a probabilistic approach to optimally price a bundle of products or services that maximizes seller's profits. Their focus is on situations in which consumer decision making is on the basis of multiple criteria. For model development and empirical investigation they consider a season ticket bundle for a series of entertainment performances such as sports games and music/dance concerts. In this case, they assume consumer purchase decisions to be a function of two independent resource dimensions, namely, available time to attend performances and reservation price per performance. Using this information, the model suggests the optimal prices of the bundle and/or components (individual performances), and corresponding maximum profits under three alternative strategies: (a) pure components (each performance is priced and offered separately), (b) pure bundling (the performances are priced and offered only as a bundle), and (c) mixed bundling (both the bundle and the individual performances are priced and offered separately). They apply their model to price a planned series of music/dance performances. Results indicate that a mixed bundling strategy is more profitable than pure components or pure bundling strategies provided the relative prices of the bundle and components are carefully chosen. Limitations and possible extensions of the model are discussed.
Though consumers commonly are assumed to be actively involved in important purchase decisions, the author proposes that consumers in fact often relinquish control to external experts, or surrogates, in such situations. As a result, the purchase decision is often a joint process over which the end consumer does not necessarily retain primary control. The author conceptualizes the surrogate function as an interface between the flow of market channels and the sequence of stages involved in consumer decision making. The roles played by surrogates at these stages are explored and ramifications for marketing theory, consumer research, and managerial practice are discussed.
Two studies explored how and why the camera angle used to photograph products in ads may affect viewers' product evaluations. The findings suggest that such camera angle effects are likely to emerge when viewers' motivation to process ad information is either low or moderate rather than high. When processing motivation was low, evaluations were most favorable when the viewer seemed to be looking up at the product, least favorable when he or she looked down at the product, and moderate when the product was at eye level. However, when processing motivation was moderate, eye-level shots produced the most favorable evaluations. The authors suggest that the use of different processing heuristics may be responsible for these camera angle effects.
In today's marketplace, price bundling is widespread: Manufacturers and retailers routinely offer multiple products for a single, bundled price. Although the effects of price bundling on purchase behavior have been well researched, the effects of price bundling on postpurchase consumption behavior have received almost no attention. In this article, the authors build on the sunk cost literature (e.g., Thaler 1980, 1985) and predict that price bundling leads to a disassociation or "decoupling" of transaction costs and benefits, thereby reducing attention to sunk costs and decreasing a consumer's likelihood of consuming a paid-for service (e.g., a theater performance). Four studies show this to be the case. In two lab studies, the authors show that having a bundled four-day ski pass as opposed to four one-day ski tickets decreases a person's likelihood of skiing on the final day of a four-day ski vacation. They replicate this result in a field study, showing that multiperformance ticket holders are more likely to forgo a given theatrical performance than are single-performance ticket holders, all else held constant. In a final study, the authors show that the decreased attention to sunk costs brought about by price bundling can be either cognitively driven (i.e., it is difficult to allocate a single payment across multiple benefits) or motivationally driven (i.e., there is an underlying desire to avoid consumption). Their findings have practical implications for managers interested in predicting or influencing actual product consumption.
The authors report the results of an experiment examining the effect of functional compatibility risk on consumer’ preference
for product bundles vis-à-vis separate items. In a laboratory experiment, 90 undergraduate business students were asked to
choose bundled or unbundled stereo equipment after reading product information that either did or did not prime fears of functional
compatibility risk. The results indicate that heightening the salience of functional compatibility risk may be a practical
way for marketers to increase consumer’ choice of bundled products, particularly among consumers who are more uncertain of
their product knowledge.
The paper investigates the premise that bundling prompts consumers to purchase more than they ordinarily would. Two theoretical justifications for increased purchasing with bundling are reviewed, and an experiment regarding consumer evaluation of bundling is reported. Anomalies in the experimental results demonstrate that bundles appear to create contexts that influence evaluation and choice, and some support for increased purchasing was found. Further research is needed to understand more fully the bundle context, the effects created and the process evoked.
Consumers' reactions to multi-product bundles — two different products sold for one price — were obtained by systematically varying the attributes of both the primary product (e.g., VCRs) and the tie-in product (e.g., videocassette tapes). Respondents were given written product descriptions as well as the opportunity to inspect the actual products before responding. The results across a variety of dependent measures suggest that evaluations of the primary product and the tie-in product are averaged or balanced when evaluating product bundles. Furthermore, attributes of the tiein product had a much larger effect on the evaluations of product bundles than would be expected on the basis of their monetary worth alone. Other aspects of our results suggest that product bundling as a marketing strategy compares favorably with the use of cash rebates, especially when the bundle is enhanced by including a high-quality tie-in product.
The identification of sellers and the discovery of their prices is given as an example of the role of the search for information in economic life.
A theory and methodology are developed for explicitly considering the cost of comparing diverse choice alternatives. The theory allows (1) explicit analytical measures of the cost of using various simplified decision strategies, and (2) predictions regarding the distribution of mistakes a consumer is likely to make when reducing decision-making effort.
Bundling, the joint offering of two or more items, is a common selling strategy, yet little research has been conducted on buyers' evaluation of bundle offers. We developed and tested a model of bundle evaluation in which the buyers anchored their evaluation on the item perceived as most important and then made adjustments on the basis of their evaluations of the remaining bundle items. The results of two computerized laboratory experiments suggested that people tend to examine bundle items in a decreasing order of perceived importance and make adjustments to form their overall evaluation of the bundle. Copyright 1994 by the University of Chicago.
This article examines how consumer evaluations of multiple price changes differ from the evaluation of a single price change of an equal amount. Consistent with R. Thaler's theory about segregation versus integration of gains and losses, we find that multiple price decreases are evaluated more favorably than a single price decrease and multiple price increases are evaluated more unfavorably than a single price increase. However, these effects are moderated by consumer price uncertainty and relative magnitude of the prices being evaluated. Because price-uncertain consumers consider higher ranges of prices acceptable, they are less unfavorable to multiple price increases and more favorable to multiple price decreases than certain consumers. Moreover, when the magnitude of one price is very small relative to other prices, consumers' preference for multiple price decreases (relative to a single price decrease) is reduced. However, this effect is not found when there are price increases.
If utility (net of price) varies by consumption occasion, the consideration set of a rational consumer will represent trade-offs between decision costs and the incremental benefits of choosing from a larger set of brands. If evaluating a brand decreases bias and uncertainty in perceived utility, the decision to evaluate a brand for inclusion in a consideration set is different from the decision to consider an evaluated brand. The decision to consumer is, in turn, different from the decision to consider. This article provides analytical expressions for these decision criteria and presents four aggregate implications of the model: (1) distributions of consideration set sizes, (2) order-of-entry penalties, (3) dynamic advertising response, and (4) competitive promotion intensity. Copyright 1990 by the University of Chicago.
Utilizing an involvement perspective and Punj and Stewart's (1983) interaction framework of decision making, the relationship between external search effort and a number of motivating antecedent variables is investigated and evaluated across five related consumer electronic products. The findings confirm four of five hypothesized relationships between total search effort and the following variables: purchase involvement (+), attitudes toward shopping (+), time availability (+), and product class knowledge (−). The relationship between ego involvement and total search effort was not significant. The influence of these variables upon a number of subindices of external search, including retailer search, media search, interpersonal search, and neutral sources search, is also investigated and reported.
I. Introduction, 475.—II. The model: positive properties, 477.—III. The model: normative properties, 490.—IV. Implications
and conclusion, 495.
This paper addresses key aspects of commodity bundling decisions in business enterprises both in general and as they relate to the International Tourism industry in particular. The considerable importance and complexity of bundle mix and bundle pricing decisions on the transportation, sightseeing, and resort level of Tourism are discussed. The authors develop the basic theoretical structure and framework underlying bundling decisions and define key elements of required decision information. The complexity of the determination of optimal bundling mixes in a multiservice environment is demonstrated, and an algorithm which greatly facilitates such determination under certain assumptions is outlined and discussed. Finally, the problem of allocating joint bundle profits among associated profit or cost centers is reviewed in detail. A number of alternative allocation criteria based on commonly acceptable notions of bargaining power and fairness are proposed. Their relevance and applicability to international tourism and tourist enterprises are discussed.© 1979 JIBS. Journal of International Business Studies (1979) 10, 37–50
This research investigates the effects of bundling on consumers' reservation prices for the bundle and its components including a new product (i.e., the primary product) and a tie-in product. Based on a quasi-experimental procedure (n = 180) involving mixed-product bundles of personal care products, the study examines the effect of the product combination, the form of the bundle (whether a within- or between-brand bundle), and attitudes toward the brand(s) as important determinants of consumers' evaluation of the bundle itself. The results show that prior attitudes toward the component brands significantly affect the evaluation of the bundle, which, in turn, mediates the influence of these prior attitudes on consumer reservation prices for the bundle itself and, subsequently, for both the new product and the tie-in individually.
Analysis of decision making under risk has been dominated by expected utility theory, which generally accounts for people's actions. Presents a critique of expected utility theory as a descriptive model of decision making under risk, and argues that common forms of utility theory are not adequate, and proposes an alternative theory of choice under risk called prospect theory. In expected utility theory, utilities of outcomes are weighted by their probabilities. Considers results of responses to various hypothetical decision situations under risk and shows results that violate the tenets of expected utility theory. People overweight outcomes considered certain, relative to outcomes that are merely probable, a situation called the "certainty effect." This effect contributes to risk aversion in choices involving sure gains, and to risk seeking in choices involving sure losses. In choices where gains are replaced by losses, the pattern is called the "reflection effect." People discard components shared by all prospects under consideration, a tendency called the "isolation effect." Also shows that in choice situations, preferences may be altered by different representations of probabilities. Develops an alternative theory of individual decision making under risk, called prospect theory, developed for simple prospects with monetary outcomes and stated probabilities, in which value is given to gains and losses (i.e., changes in wealth or welfare) rather than to final assets, and probabilities are replaced by decision weights. The theory has two phases. The editing phase organizes and reformulates the options to simplify later evaluation and choice. The edited prospects are evaluated and the highest value prospect chosen. Discusses and models this theory, and offers directions for extending prospect theory are offered. (TNM)
edu) is a professor and chair of the Department of Marketing and Entrepreneurship He is the author of several books, along with numerous articles in such journals as the Public Opinion Quarterly, and others. He has served on the editorial boards of the
- A Edward
- Blair
Edward A. Blair (blair@uh.edu) is a professor and chair of the Department of Marketing and Entrepreneurship, Bauer College of Business, University of Houston. He is the author of several books, along with numerous articles in such journals as the Journal of Marketing, the Journal of Marketing Research, the Journal of Consumer Research, Public Opinion Quarterly, and others. He has served on the editorial boards of the Journal of Marketing Research, the Journal of the Academy of Marketing Science, and the Journal of Business Research. by guest on June 2, 2013jam.sagepub.comDownloaded from
Duluth, MN: Association for Consumer Research
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- B Kent
- Monroe
Ed. Kent B. Monroe. Duluth, MN: Association for Consumer Research, 61-65.
Consumer External Search: Amount and Determinants InConsumer and Industrial Buying Behavior
- Joseph W Newman