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Emerging Trends in Product Bundling: Investigating Consumer Choice and Firm Behavior

Author

Listed:
  • Vithala R. Rao

    (Cornell SC Johnson College of Business, Johnson Graduate School of Management, Cornell University)

  • Gary J. Russell

    (Tippie College of Business, University of Iowa)

  • Hemant Bhargava

    (Graduate School of Management, University of California)

  • Alan Cooke

    (Warrington College of Business, University of Florida)

  • Tim Derdenger

    (Tepper School of Business, Carnegie Mellon University)

  • Hwang Kim

    (CUHK Business School, The Chinese University of Hong Kong)

  • Nanda Kumar

    (Naveen Jindal School of Management, University of Texas at Dallas)

  • Irwin Levin

    (University of Iowa)

  • Yu Ma

    (Desautels Faculty of Management, University of Alberta)

  • Nitin Mehta

    (Rotman School of Management, University of Toronto)

  • John Pracejus

    (Alberta School of Business, University of Alberta)

  • R. Venkatesh

    (Joseph M. Katz Graduate School of Business, University of Pittsburgh)

Abstract

Bundling is the practice of selling two or more products together, often at a discounted price. In this article, we extend the concept of bundling to a wide variety of choice settings. We argue that bundle choice covers consumer decision scenarios, which differ with respect to three key dimensions: the number of product categories in the bundle, the party in the distribution system who constructs the bundles, and the time frame of the bundle choice decision. These situational differences are important, from the standpoint of constructing an appropriate choice model and developing an appropriate framework for managerial decision-making. We describe five research perspectives prevalent in bundle choice research (i.e., economic, attribute-based, psychological, multi-category choice, and bundle dynamics). We provide detailed discussion of several areas of current interest: and identify unresolved issues in bundling research: understanding the multiple rationales behind bundling strategies, specification and calibration of bundle choice models, and impact of Big Data, and optimal bundle design. We conclude that bundle choice research provides rich opportunities for collaboration among economists, psychologists, and choice theory experts in marketing science.

Suggested Citation

  • Vithala R. Rao & Gary J. Russell & Hemant Bhargava & Alan Cooke & Tim Derdenger & Hwang Kim & Nanda Kumar & Irwin Levin & Yu Ma & Nitin Mehta & John Pracejus & R. Venkatesh, 2018. "Emerging Trends in Product Bundling: Investigating Consumer Choice and Firm Behavior," Customer Needs and Solutions, Springer;Institute for Sustainable Innovation and Growth (iSIG), vol. 5(1), pages 107-120, March.
    • Handle: RePEc:spr:custns:v:5:y:2018:i:1:d:10.1007_s40547-017-0075-x
    DOI: 10.1007/s40547-017-0075-x
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