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

Vithala R. Rao (), Gary J. Russell (), Hemant Bhargava (), Alan Cooke (), Tim Derdenger (), Hwang Kim (), Nanda Kumar (), Irwin Levin (), Yu Ma (), Nitin Mehta (), John Pracejus () and R. Venkatesh ()
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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

Customer Needs and Solutions, 2018, vol. 5, issue 1, 107-120

Abstract: 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.

Keywords: Product bundling; Pricing; Marketing strategy; Consumer choice behavior; Multiple product categories (search for similar items in EconPapers)
Date: 2018
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