Preference between Individual Products and Bundles: Effects of Complementary, Price, and Discount Level in Portugal

Paulo Martins,Carlos Martins,Nelson Duarte,Xiaoguang Yue,Teresa Barros,Yiyi Liao,Paula Rodrigues,Rebecca Kechen Dong,Ubaldo Comite

doi:10.3390/jrfm14050192

Abstract

This paper aims to (1) compare consumers’ preferences between individual products and bundles as well as (2) investigate some of the factors involved in bundle characteristics that may affect consumer’s preferences. Those factors are complementarity, price level, and discount level. An online survey developed by means of questionnaires were collected from the Portuguese population. Student’s t-tests were used to test the hypothesis formulated and to analyze the consumers’ preferences. The findings corroborate that in a scenario where the bundle does not offer any discounts, preference of individual products is higher. When a 20% discount is assigned to bundles, the overall preference for individual products is still superior. By offering a discount level of 45%, the overall preference for bundles becomes higher. The positive effect of complementarity bundles valuation is confirmed. This is the first approach to evaluate the preferences between bundles and individual products in the Portuguese market. The findings contribute to clarify the customer map within a Business Model Canvas. Furthermore, this paper analyzes the bundle complementarity and discount level effects simultaneously.

Highlights

It is a matter of raising to light a number of biases in consumers’ evaluations of bundling offers, since the effects bring natural questions to sellers: Is a bundling sale strategy advantageous when compared to the sale of individual products? Does the complementarity of bundle components affect consumers’ preferences? How do price level and the discount of the bundle affect consumers’ purchase intention? This paper aims to compare the preference that consumers have between individual products and bundles and to investigate certain factors, e.g., price level, discount level, and complementarity, that may affect consumers’ preferences
The results indicate that even when a 45% discount is attributed to bundles, the effect of this price reduction give a higher evaluation to complementary bundles but is not enough for making the noncomplementary bundles valuation higher than individual products
This paper examines the consumers preference between individual products and bundles and investigates some of the factors involved in bundle characteristics that may affect consumers preferences

Summary

Introduction

Developing new products entails substantial efforts, and the improvement of profits by sales and bundling is one relevant sales strategy for companies (Ye et al 2017). Bundling is the popular marketing strategy of sale of two or more separate products or services in one package (Stremersch and Tellis 2002). In other words, bundling is a marketing technique of selling two or more separate products together in the same package (Stremersch and Tellis 2002). This is a common sales format on numerous industries as

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Conclusion