Format Effects in Volume Discounts to ConsumersReport as inadecuate

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1 DRM - Dauphine Recherches en Management 2 PhD Program 3 Marketing Department

Abstract : PurposeUsing a classification of benefits and costs of promotional offers Raghubir et al., 2004 along three routes - economic, informational and affective - this paper aims at evaluating, from the consumer-s point of view, the relative perceptual disadvantages of separate-item bundles compared to pre-wrapped bundles.Design-methodology-approachThe marketing literature and a qualitative study based on 18 consumers permit us to identify the relative perceived costs and benefits associated with separate-item bundles and to derive hypotheses. An experiment on a sample of 120 adult consumers was then set up to test these hypotheses. FindingsThe findings suggest that consumers associate separate-item bundles with higher economic benefit but also with higher inspection costs. From a more global perspective, there is no loss of interest in separate-item bundles compared to pre-wrapped bundles.Research limitations-implicationsFocusing our research on separate-item bundles clarifies the way consumers evaluate promotions. Its qualitative phase gives support to the relevance of an -informational route- Raghubir et al., 2004, beyond the traditional utilitarian and hedonic routes Chandon et al., 2000. Its quantitative phase confirms the importance of cognitive biases in consumers- perceptions of promotions.Practical implicationsThe numerous advantages of separate-item bundles for manufacturers and retailers and their attraction to consumers should lead to an increasingly intensive use in promotional campaigns. Besides, the quality of in-store communication is the most important factor of the success of separate-item bundles, which provides the opportunity to propose meaningful recommendations for practitioners.Originality-value of paperIf the strengths and weaknesses of separate-item bundles have already been studied from a managerial point of view, to our knowledge, no research has focused on separate-item bundle efficiency from the consumer-s point of view.

Keywords : volume discount format effect promotion benefits and costs experimentation

Author: Béatrice Parguel - Pauline De Pechpeyrou - Ouidade Sabri-Zaaraoui - Pierre Desmet -



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