Delivered August 27, 2019. Contributor: Emmanuel A.
To understand bundled price/offer best practices and how it affects consumers purchase intent in order to evaluate strategy recommendation in a client report.
A study by Kumar and Derdenger on the effect of bundling on the portable video game market revealed that "bundling did lead to the cannibalization of over half a million consoles—that is, the introduction of bundles led to a loss in sales of about 500,000 plain consoles. But the overall effect was an increase in hardware sales and revenue."
Although price bundling has been shown to improve sales speed and volume, recent research has also shown that "the purchase quantity requirement in traditional bundling deters non-buyers from becoming buyers."
The researchers' findings show that "itemizing prices results in more realistic price expectations and that this effect is stronger for larger bundles. In turn, more realistic price expectations lead to higher evaluation.