Bundling or unbundling frequently purchased products: a mixed method approach

Abstract

PurposeThis paper aims to use a mixed method (qualitative and quantitative) approach to exploring the effectiveness of price bundling.Design/methodology/approachThe study is based on a concurrent, two‐studies design where quantitative and qualitative data are both collected (concurrently or sequentially) and analyzed separately. The first study is based on a nested experimental design, and the second study is based on in‐depth interviews. The setting for the study is frequently purchased products, specifically teeth‐whitening products. The bundled items are: teeth whitener, toothpaste, mouthwash, toothbrush and dental floss. Various forms of discounts are tested to assess the effectiveness of bundles. While bundling has been investigated in marketing settings, the focus has been limited to consumer durables using quantitative scales. The experimental study is followed by a qualitative investigation in order to add further insight into the consumer's choice of a bundle. This mixed method approach provides rich narrative that adds important insights about the decision process and offers suggestions for advertising development.FindingsThe findings do not support a bundling approach. Although the consumers perceive higher value of the bundle, the attitudes, intentions and narratives support promoting these items individually rather than as a bundle.Research limitations/implicationsCaution is advised in extrapolating the results beyond the issues investigated in the study.Practical implicationsThe findings suggest caution for marketers in designing product bundles, positioning, and promotion strategies.Originality/valueThere are three major contributions of this study. First, the current literature suggests price bundling is an effective strategy. This study suggests that for certain products bundling may not be effective. Second, the past literature has not investigated the influence of type of discount on effectiveness of a bundle. Third, most studies in price bundling are quantitative in nature. This study uses a mixed method approach. The quantitative study is followed by a qualitative study to add further insights that will help understand consumer motivations behind the preferences.