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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
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    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..

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    File URL: http://www.journals.uchicago.edu/doi/pdf/10.1086/599806
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    Bibliographic Info

    Article provided by University of Chicago Press in its journal Journal of Consumer Research.

    Volume (Year): 36 (2009)
    Issue (Month): 4 (December)
    Pages: 660-670

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    Handle: RePEc:ucp:jconrs:v:36:y:2009:i:4:p:660-670

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    Web page: http://www.journals.uchicago.edu/JCR/

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    Cited by:
    1. Liu, Hsin-Hsien, 2013. "How promotional frames affect upgrade intentions," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 237-248.
    2. 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.

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