An examination of how buyers subjectively perceive and evaluate product bundles

This dissertation examines how buyers evaluate a bundle of items and how perceptions of savings are formed in the context of a bundle offer. Two conceptual models were developed and tested: 1) a model of the bundle's acquisition value, and 2) a model of the bundle's transaction value. Based on behavioral decision theory and recent developments in pricing research, the model of acquisition value focuses on the role of both price and non-price information. It is proposed that buyers use an anchoring and adjustment process to evaluate a bundle of items, evaluating the most important item first and then making incremental adjustments based on the evaluation of other items. The model of transaction value is based on the premise that buyers combine perceived savings on the individual items and perceived additional savings on the bundle to form their overall perception of savings in a bundle offer.

Two laboratory experiments were conducted using student subjects to test the proposed hypotheses. Experiment 1 tested the anchoring and adjustment hypothesis, while experiment 2 investigated the model of transaction value. A 3(bundle context) X 2(anchor context) between-subjects design was employed in the first experiment. The experimental factor "bundle context" provided an opportunity to create evaluative scenarios in which subjects evaluated either only individual items or bundles with two or three items; "anchor context" manipulated the most important item in the bundles to be either excellent or poor. A computer-assisted data collection procedure was employed to obtain unobtrusive measures of the order in which subjects examined items in a bundle.

Results of the first experiment provided evidence consistent with the proposed anchoring and adjustment process: 1) subjects examined bundle items perceived as more important prior to those items that were perceived as less important, and 2) the overall evaluation of a bundle was a weighted average of the bundle items' evaluations. However, the hypothesis that the anchor item's evaluation may influence the evaluation of other bundle items was supported only for one of the four non-anchor items.

The second experiment manipulated savings on items and additional savings on a bundle in a 3X3 between-subjects design. Subjects examined an advertisement featuring two luggage items and then responded to items in a questionnaire. The hypothesis that buyers combine perceived savings on items and perceived additional savings on the bundle to form perceptions of overall savings in a bundle offer was supported. As hypothesized, the relative influence of perceived additional savings on the bundle was greater than the influence of perceived savings on the individual items. Although no hypotheses about interaction effects were proposed, there was evidence that perceived savings on items and perceived additional savings on the bundle interact. Tests of the model using LISREL yielded further evidence supporting the proposed transaction value model.