Academic journal article Social Behavior and Personality: an international journal

Effect of Attribute Complementarity on Consumers' Willingness to Pay for Bundled Products

Academic journal article Social Behavior and Personality: an international journal

Effect of Attribute Complementarity on Consumers' Willingness to Pay for Bundled Products

Article excerpt

Many researchers have examined the use of diverse pricing strategies under varying circumstances, such as offering a free product with the purchase of another product (Palmeira & Srivastava, 2013). For example, a company may offer a free belt, provided that the consumer purchases $100 worth of clothing. Let us consider these three situations: you purchase $100 worth of clothes and receive a free belt, you purchase $100 worth of toys and receive a free belt, or you purchase $10 worth of clothes and receive a free belt. If you want to purchase another belt after the promotion ends, what is the first thing that comes to mind when you consider your willingness to pay? Would your willingness to pay be affected by the attribute complementarity of bundled products (clothes and belt vs. toy and belt)? Do other factors, such as the price of the focal product ($100 vs. $10), influence your willingness to pay? We sought to address these issues in this study.

Conditional promotions (e.g., purchasing a focal product and receiving a free supplementary product) are often used to boost short-term sales (Neslin, 2002). Previous researchers have mainly focused on the influence of price on consumers' judgment (Ahmetoglu, Furnham, & Fagan, 2014; Andrews, Luo, Fang, & Aspara, 2014; Byun & Jang, 2015; Drechsler, Leeflang, Bijmolt, & Natter, 2017; Kamins, Folkes, & Fedorikhin, 2009; Raghubir, 2004), such as whether or not a supplementary product that is free or is offered at a low, discounted price influences consumers' willingness to pay (Minnema, Bijmolt, & Non, 2017; Palmeira & Srivastava, 2013). In contrast, there has been limited research on how the relationship between the focal and supplementary products influences consumer judgement (Chandon, Wansink, & Laurent, 2000; Darveau & d'Astous, 2014; Harlam, Krishna, Lehmann, & Mela, 1995).

Chandon et al. (2000) proposed that promotional bundles composed of congruent benefits-specifically, those with high attribute complementarity and benefit congruency-would produce higher purchase intention. Further, Darveau and d'Astous (2014) argued that consumers' judgment of the value of the bundles would depend on the complementarity of the bundled products, whereas other researchers have asserted that the additional value of bundled products is based on the individual value of each component in the bundle (Popkowski Leszczyc & Häubl, 2010; Stremersch & Tellis, 2002). Thus, consumers perceive the bundle with greater (less) attribute complementarity as having the higher (lower) value. However, we posited that the perception of higher value would further influence consumers' willingness to pay separately for the supplementary product.

In addition, previous researchers of bundled products have mainly focused on consumers' perception of the price of focal products after a promotion (Darveau & d'Astous, 2014; Liu & Chou, 2015), whereas consumers' perceived value of the supplementary products has been relatively ignored. Bundled products not only boost short-term sales for focal products, but can also effectively introduce a new product to the market (Neslin, 2002). For instance, cosmetics companies sometimes bundle popular products with small samples of new products (i.e., buy a 1L bottle of shampoo and receive 50 ml of a newly released free body lotion). However, these researchers focused on consumer judgments made during, rather than after, the promotion. Thus, we proposed the following hypothesis:

Hypothesis 1: After the promotion, consumers will have greater (less) willingness to pay for a supplementary product that shares a higher (lower) level of attribute complementarity with the focal product.

We also examined the boundary condition of this effect. Previous researchers have disagreed about what influences consumer judgment and willingness to pay for a supplementary product that was free during a promotion. Kamins et al. …

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