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Does size matter? : disentangling consumers' bundling preferences

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  • Agarwal, Manoj K.

    (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics)

  • Frambach, Ruud T.
  • Stremersch, Stefan

Abstract

Previous marketing literature has focused to a large extent on the effect of bundle characteristics on a consumer's decision to buy a (fixed) bundle in a non-competitive setting. This study extends this narrow focus in four major ways. First, the authors address bundles that are customizable. Second, they distinguish between a consumer's decision of whether to bundle (bundle choice) and the decision of how many goods or services to include in a bundle (bundle size). Third, they extend the focus on bundle characteristics towards the impact of consumer and supplier characteristics on both bundle choice and bundle size. Fourth, they do so in a competitive context. They find that bundle, consumer and supplier characteristics differentially influence bundle choice and bundle size decisions. For instance, consumer socio-demographics were found to significantly affect the decision to obtain a bundle, but had no significant effect on the preferred size of the bundle. Further it was found that heavy users prefer to bundle fewer services compared to light users. This study has important managerial implications towards a successful bundling strategy. Strategies to encourage consumers to bundle should focus on different segments than strategies to encourage consumers to buy larger bundles.

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Bibliographic Info

Paper provided by VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics in its series Serie Research Memoranda with number 0033.

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Date of creation: 2000
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Handle: RePEc:dgr:vuarem:2000-33

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  1. Yadav, Manjit S, 1994. " How Buyers Evaluate Product Bundles: A Model of Anchoring and Adjustment," Journal of Consumer Research, University of Chicago Press, vol. 21(2), pages 342-53, September.
  2. Labay, Duncan G & Kinnear, Thomas C, 1981. " Exploring the Consumer Decision Process in the Adoption of Solar Energy Systems," Journal of Consumer Research, University of Chicago Press, vol. 8(3), pages 271-78, December.
  3. Gatignon, Hubert & Robertson, Thomas S, 1985. " A Propositional Inventory for New Diffusion Research," Journal of Consumer Research, University of Chicago Press, vol. 11(4), pages 849-67, March.
  4. Swift, Cathy Owens, 1995. "Preferences for single sourcing and supplier selection criteria," Journal of Business Research, Elsevier, vol. 32(2), pages 105-111, February.
  5. Lichtenstein, Donald R & Bloch, Peter H & Black, William C, 1988. " Correlates of Price Acceptability," Journal of Consumer Research, University of Chicago Press, vol. 15(2), pages 243-52, September.
  6. Lakshman Krishnamurthi & S. P. Raj, 1991. "An Empirical Analysis of the Relationship Between Brand Loyalty and Consumer Price Elasticity," Marketing Science, INFORMS, vol. 10(2), pages 172-183.
  7. Harlam, Bari A. & Krishna, Aradhna & Lehmann, Donald R. & Mela, Carl, 1995. "Impact of bundle type, price framing and familiarity on purchase intention for the bundle," Journal of Business Research, Elsevier, vol. 33(1), pages 57-66, May.
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