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Promotional Bundles and Consumers' Price Judgments: When the Best Things in Life Are Not Free

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  • Michael A. Kamins
  • Valerie S. Folkes
  • Alexander Fedorikhin

Abstract

A series of experiments examined the amount that consumers were willing to pay for products bundled together in a promotion. Describing one of the disparate products in the bundle as "free" decreased the price consumers were willing to pay for each product when sold individually. However, a "freebie" offer did not influence the overall price for the bundle of disparate products, a finding robust across two different settings and populations. The differential effect of freebies is explained by varying judgment difficulty, with the price being easier to arrive at for just a single product than for the combination. Consistent with this explanation, factors that influence judgment difficulty (the salience of the company's motive for offering the freebie and time pressure to make a judgment) moderated the effects of a free offer on the amount consumers were willing to pay. (c) 2009 by JOURNAL OF CONSUMER RESEARCH, Inc..

Suggested Citation

  • Michael A. Kamins & Valerie S. Folkes & Alexander Fedorikhin, 2009. "Promotional Bundles and Consumers' Price Judgments: When the Best Things in Life Are Not Free," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 36(4), pages 660-670, December.
    • Handle: RePEc:oup:jconrs:v:36:y:2009:i:4:p:660-670
    DOI: 10.1086/599806
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    Cited by:

    1. Aydınoğlu, Nilüfer Z. & Krishna, Aradhna, 2019. "The power of consumption-imagery in communicating retail-store deals," Journal of Retailing, Elsevier, vol. 95(4), pages 116-127.
    2. Marius Johnen & Oliver Schnittka, 2020. "Changing consumers’ minds at the point of sale: price discounts vs. in-store advertising," Marketing Letters, Springer, vol. 31(1), pages 49-71, March.
    3. Santana, Shelle & Thomas, Manoj & Morwitz, Vicki G., 2020. "The Role of Numbers in the Customer Journey," Journal of Retailing, Elsevier, vol. 96(1), pages 138-154.
    4. Liu, Hsin-Hsien, 2013. "How promotional frames affect upgrade intentions," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 237-248.
    5. Ahmetoglu, Gorkan & Furnham, Adrian & Fagan, Patrick, 2014. "Pricing practices: A critical review of their effects on consumer perceptions and behaviour," Journal of Retailing and Consumer Services, Elsevier, vol. 21(5), pages 696-707.
    6. Koo, Jieun & Suk, Kwanho, 2020. "Is $0 Better than Free? Consumer Response to “$0” versus “Free” Framing of a Free Promotion," Journal of Retailing, Elsevier, vol. 96(3), pages 383-396.
    7. Bharadwaj, Neeraj & Naylor, Rebecca Walker & ter Hofstede, Frenkel, 2009. "Consumer response to and choice of customized versus standardized systems," International Journal of Research in Marketing, Elsevier, vol. 26(3), pages 216-227.
    8. Newman, George E. & Jeremy Shen, Y., 2012. "The counterintuitive effects of thank-you gifts on charitable giving," Journal of Economic Psychology, Elsevier, vol. 33(5), pages 973-983.
    9. Mao, Wen, 2016. "Sometimes “Fee” Is Better Than “Free”: Token Promotional Pricing and Consumer Reactions to Price Promotion Offering Product Upgrades," Journal of Retailing, Elsevier, vol. 92(2), pages 173-184.
    10. Byun, Jaemun & Jang, SooCheong (Shawn), 2015. "Effective promotions for membership subscriptions and renewals to tourist attractions: Discount vs. bonus," Tourism Management, Elsevier, vol. 50(C), pages 194-203.
    11. Willem Boom, 2011. "Price Intransparency, Consumer Decision Making and European Consumer Law," Journal of Consumer Policy, Springer, vol. 34(3), pages 359-376, September.
    12. Yunhui Huang & Kai H. Lim & Zhijie Lin & Shunping Han, 2019. "Large Online Product Catalog Space Indicates High Store Price: Understanding Customers’ Overgeneralization and Illogical Inference," Information Systems Research, INFORMS, vol. 30(3), pages 963-979, September.
    13. Anjulie Hähnchen & Bernhard Baumgartner, 2020. "The Impact of Price Bundling on the Evaluation of Bundled Products: Does It Matter How You Frame It?," Schmalenbach Business Review, Springer;Schmalenbach-Gesellschaft, vol. 72(1), pages 39-63, February.
    14. Jia, Yanli & Wyer, Robert S., 2022. "The effect of control deprivation on consumers’ adoption of no-pain, no-gain principle," International Journal of Research in Marketing, Elsevier, vol. 39(3), pages 678-698.
    15. Nicole Koschate-Fischer & Katharina Wüllner, 2017. "New developments in behavioral pricing research," Journal of Business Economics, Springer, vol. 87(6), pages 809-875, August.
    16. Möser, A., 2012. "Coupon, BOGOF, Linksave oder Rabatt? Akzeptanz neuer Verkaufsförderungsaktionen des Lebensmitteleinzelhandels," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 47, March.
    17. Liu, Hsin-Hsien & Chou, Hsuan-Yi, 2015. "The effects of promotional frames of sales packages on perceived price increases and repurchase intentions," International Journal of Research in Marketing, Elsevier, vol. 32(1), pages 23-33.
    18. Acquisti, Alessandro & Spiekermann, Sarah, 2011. "Do Interruptions Pay off? Effects of Interruptive Ads on Consumers' Willingness to Pay," Journal of Interactive Marketing, Elsevier, vol. 25(4), pages 226-240.
    19. Numminen, Emil & Sällberg, Henrik & Wang, Shujun, 2022. "The impact of app revenue model choices for app revenues: A study of apps since their initial App Store launch," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 325-336.
    20. Xiaomeng Fan & Fengyan Cindy Cai & Galen V. Bodenhausen, 2022. "The boomerang effect of zero pricing: when and why a zero price is less effective than a low price for enhancing consumer demand," Journal of the Academy of Marketing Science, Springer, vol. 50(3), pages 521-537, May.

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