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The Impact of Bundle Components on the Focal Product Evaluations

Associate Professor Alexander (Sasha) Fedorikhin, Indiana University

11th Apr 2014  12:00 pm - 01:00 pm Room 214/215, Economics and Business Building (H69)

Research on consumer evaluations of products offered with ad-ons (discretionary benefits that provide utility only if consumed with the corresponding base good; Guiltinam 1987) shows that the evaluation of the base product is affected negatively, if the ad-ons are alignable (enhance an existing feature). If the ad-ons are non-alignable (introduce a new capability), the base product evaluation is affected positively (Bertini, Ofek, Ariely 2008). The present research demonstrates that alignability of the supplemental products has a different effect, when the supplementary products are offered as part of a bundle with the focal product. In contrast to ad-on effects, bundling an alignable supplementary product (extra memory) with the focal product (camera) has a positive effect on the evaluation of the focal product. For the non-alignable supplementary product (tripod) the effect is negative. Further, we reverse the effect of alignability of supplementary product on the evaluation of the focal product, by prompting the participants to think about why the manufacturer would offer the products in a bundle. We also demonstrate the mediating effect of the prompt on the evaluations of the focal product.