Not so obvious: Consumers don't just assume bundled products are a better value
Product bundling is a common marketing strategy. According to a new study in the Journal of Consumer Research, retailers need to draw attention to the value of a package deal since consumers prefer products that are packaged individually.
"The advantages of bundling products may not be as straightforward as previously thought. Consumers may not always be aware of a bundle's added value over a single item and this could undermine the entire purpose of the bundling strategy. Without drawing attention to a product bundle's added value, a bundle may not be perceived as more attractive than the respective single product without the add-on," write authors Tobias Krüger, André Mata, and Max Ihmels (all University of Heidelberg).
In one study, consumers were more likely to purchase a coffee maker that came with a milk frother than the coffee maker alone only when it was compared to the same coffee maker without the milk frother. When the bundle was contrasted with the single product, consumers were more likely to notice the add-on and realize that the bundle was a better value.
This research shows the importance of making consumers aware of the added value of a bundle when relying on product bundling as a marketing strategy. Retailers may still want to offer a single version of a product even when they prefer to sell the product as part of a package deal. Presenting the package together with the single version makes consumers aware of the bundle's value and more likely to purchase the bundle.
"Our research sheds new light on 'the presenter's paradox,' according to which presenters (people deciding what to sell) tend to choose bundled options, believing that consumers will prefer them over single products, even though evaluators (consumers deciding what to buy) actually prefer the single option. We find that consumers will also prefer the bundled product if they are able to compare it to the single item," the authors conclude.