Functional Compatibility Risk and Consumer Preference for Product Bundles

Abstract

The authors report the results of an experiment examining the effect of functional compatibility risk on consumer’ preference for product bundles vis-a-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.