Behaviour Change

PROPAGANDA FOR CHANGE is a project created by the students of Behaviour Change (ps359) and Professor Thomas Hills at the Psychology Department of the University of Warwick. This work was supported by funding from Warwick's Institute for Advanced Teaching and Learning.

Wednesday, March 20, 2013

Bundling



Here the shop is offering the customer not only an xbox 360 but also a game, all for one price, this is an example of product bundling. Product bundling is a marketing strategy that involves offering several products for sale as one combined product. Bundling offers benefits to the customer and the business.

Business benefits:

When effective, a product bundling strategy can significantly increase profits on individual sales and over time. Selling multiple products or components in one package means a greater initial return on the costs of acquiring a customer. Some companies use bundling as a way to package less popular products with hot selling items. You can also create longer-term opportunities for add-on sales when you get multiple products in a customer's hands.
Customer benefits:
Customers often prefer to achieve a cluster of satisfactions through one purchase. People buy products to solve problems or address needs. If a customer has multiple needs and your product bundle addresses most or all of them, this is convenient for the customer. They can make one stop instead of multiple stops. Additionally, customers often experience economies of scale when buying a bundle of products. If they have a need for the individual components in the bundle, they typically understand that the total price is lower when the products are purchased as a bundle.

In an study done by Burger (1986) using 426 participants, one of the seven experiments looked at whether by offering the participant one deal, then later offering them a better deal, in this case by adding an extra product, increased sales. He found that by offering an extra product he was effective at convincing the participants to agree to the offer.



BURGER, J.M., 1986. Increasing compliance by improving the deal: The that's-not-all technique. Journal of personality and social psychology, 51(2), pp. 277-283.

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