Buy separately or buy together?

Suppose you go into a McDonald, facing with the menu, would you like to buy what you want separately or just buy a meal?

 

In my experience, even sometimes I do not want the French fries, but I will still buy a meal with it instead of buying hamburger and drink separately. Also, there is a research finding that when bundling items together, consumers purchase items that they would not ordinarily purchase if the items were only available individually (Stremersch and Tellis 2002). Why do we tend to choose such bundled products? Now, let’s see the influence of bundling sale in our life.

You can know some basic information about bundling from here, which includes pure-bundling and mixed-bundling.

Why do retailers choose to bundle goods? There can be two main reasons for this marketing strategy. For some retailers, such as supermarkets, choosing to bundle goods can help them to save costs. It will be cheaper to packaging and inventory goods than carrying them separately. In addition, considering the competitive strategy, bundled products may provide more marketing opportunities to enhance profits. It can be found easily that sellers love to bundle successful products with a newer or less successful product to increase sales. In McDonald, you may notice that new product is often included in a popular kind of meal so that more people can try it.

When talking about retailers, money always comes first, but why do consumers choose to purchase bundled products? Firstly, bundled products usually meet customers’ demand. And many bundles are sold at a discount relative to the prices of the individual items that make up the bundle (Sharpe & Staelin, 2010). Just like you enter the McDonald for lunch, most time you need a burger and a drink. However, after you compare the price of meal with the prices of individual items, you are more likely to buy a meal containing fries instead of purchasing burger and drink separately at the similar price. This can be considered as the pre-purchase evaluation of alternatives in the process of consumer decision making. Secondly, sellers “featured” the information of bundled products, which can lead to increased sales even no change in prices (Inman, McAlister, & Hoyer, 1990).

The strategy of bundling sale may result in the misperception of consumers. It is common that we overestimate the value and use of products under the situation of bundling sale (Oren Bar-Gill, 2006). When you buy a meal from McDonald, do you really need fries? Or do you really want to try the new product? Perhaps you buy them just because they are bundled with what you want to eat. There is a question: how many people have ever bought the one-year subscription of some kind of health club? Actually, have you made so many visits to these health clubs as you expected? The overestimation of use may also result in sellers’ increasing offering of bundling sales.

Nowadays, bundles can be seen everywhere. All the reasons above will trigger bundling sales. As a consumer, you need to think it carefully before your purchase. Buy separately or buy together?

 

Reference:

Stremersch, Stefan and Gerard J. Tellis (2002), “Strategic Bundling of Products and Prices: A New Synthesis for Marketing,” Journal of Marketing, 66 (January), 55–72.

Kathryn M. Sharpe and Richard Staelin (2010), “Consumption Effects of Bundling: Consumer Perceptions, Firm Actions, and Public Policy Implications,” Journal of Public Policy & Marketing, Vol. 29 (2) Fall 2010, 170–188.

Inman, J. Jeffrey, Leigh McAlister, and Wayne D. Hoyer (1990), “Promotion Signal: Proxy for a Price Cut?” Journal of Consumer Research, 17 (June), 74–81.

Oren Bar-Gill (2006), “Bundling and Consumer Misperception,” American Law & Economics Association Annual Meetings, Year 2006, 52.