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The Effect of Product Assortment Size and Bundle Discount on Bundle Component Selection

Park, Sojin

Kyungnam University

Published: January 2012 · Vol. 41, No. 2 · pp. 259-278
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Abstract

Bundle promotion-the practice of granting consumers a discount when they buy a certain number of units from a designated range of stock-keeping units- have gained popularity among manufacturers and retailers. In this type of bundle promotion, consumers can choose a variety of items in the range of designated products. For example, a snack brand could offer a discount if the consumer buys four units from a range of flavors. The author presents a question when assortment size can have an influence on option choice in a mix of hedonic and utilitarian options. Let's suppose that a retailer provides a bundle promotion consisted of delicious but unhealthy snacks(hedonic option) and less tasty but healthy snacks(utilitarian option). The retailer gives a discount if the consumer buys four units. Could the number of options influence the type of option consumers select? Would consumers who choose from a larger assortment (e.g. 8 options) be more likely to select hedonic options than a smaller set (e.g. 4 options)?Recently, Sela et al.(2009) suggested choosing from larger assortments is often difficult, it leads people to select options that are easier to justify. Since virtues and utilitarian options are generally easier to justify than indulgences; consequently, choosing from larger assortments often shifts choice from hedonic to utilitarian options. However, the author anticipated this effect would be reversed when consumers choose multiple items simultaneously. Specifically, the author predicted choosing from larger assortments consisted of hedonic and utilitarian options lead people to pursue variety seeking and increase the choice share of hedonic options. The author also expected consumers' variety seeking behavior and the choice share of hedonic options would increase when bundle discount rate is high rather than low discount rate. To test these hypotheses, this study conducted a 2(assortment size: 4 vs. 8) x 2 (discount size: 10%vs. 50%) between subject design. There were half hedonic and half utilitarian beverages (carbonated drinks and traditional drinks) in each option. Participants were randomly assigned to four conditions and were asked to choose a total of four beverages from the assortment. The dependant variables are the choice share of hedonic options and variety seeking behavior. It was found that choosing from larger assortment leads people to pursue diversity and select more hedonic options when they choose options simultaneously. The author explains this result that consumers' variety seeking simply makes people include hedonic options which are inferior in hierarchy of needs. Another explanation is that choosing multiple items simultaneously reduces guilt associated with hedonic consumption and provide an excuse for hedonic consumption. In the experiment, bigger bundle discount size increased consumers’ variety seeking behavior but it didn't have a significant influence on the choice share of hedonic options. Finally, this research suggests managerial implication for bundle promotions and develops directions for future research.
Keywords: 가격번들링가격할인동시 선택실용적 대안제품구색쾌락적 대안