Format Effects in Volume Discounts to Consumers

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.