Divide and prosper? When partitioned prices make sense
Abstract
Purpose
This research seeks to investigate the relationship between product bundling strategies and brand value.
Design/methodology/approach
Three studies were conducted, two using student subject pools and another using data collected from online auctions. The impacts of brand and bundling strategy stimuli on the dependent variables product choice and price paid were measured.
Findings
Bundles offered by low‐tier brands are more attractive when they are offered in a combined price format than in a partitioned price format. Bundles offered by high‐tier brands are more attractive when they are offered in a partitioned price format than in a combined price format.
Research limitations/implications
The cost of bundle elements to the firm, which may influence consumer reference prices, is not considered in this research. Also, the impacts of bundle pricing strategies are evaluated on the bundles only; the influence of a given strategy on a product portfolio is left for future research.
Practical implications
Firms should consider the status of its brand within its product category before deciding on a bundle pricing strategy.
Originality/value
This research has important implications regarding the pricing of product bundles. It also provides a new perspective on how consumers evaluate product bundles
Keywords
Citation
Love, E. (2012), "Divide and prosper? When partitioned prices make sense", Journal of Product & Brand Management, Vol. 21 No. 1, pp. 61-67. https://doi.org/10.1108/10610421211203150
Publisher
:Emerald Group Publishing Limited
Copyright © 2012, Emerald Group Publishing Limited