customer service & airline industry

Annotated Bibliography

Foubert , B Gijsbrechts , E (2007 , Nov . Shopper Response to Bundle Promotions for

Packaged Goods . Journal of Marketing Research , Vol . XLIV ,

. 647-662

Summary : Two professors from the Netherlands , Foubert Gijsbrechts (2007 ) have published a study on the impact of bundle promotions on the behavior of buyers . The article , Shopper Response to Bundle Promotions for Packaged Goods ' published in the Journal of Marketing Research reports that bundle promotions of a range of consumer packaged goods tend to induce switching behavior , that is , consumers in general tend to switch to brands

that offer bundle promotions of their products As an example , a bundle promotion granting a discount of fifty cents on the purchase of three bags of Lay 's chips can motivate a regular consumer of Kettle chips to switch to Lay 's , provided that he or she is willing to increase the volume that is purchased . However , bundle promotions do not motivate consumers to buy products that they are usually not interested in purchasing anyhow . Thus , there is a limit to the effectiveness of a bundle promotion as a sales boosting tool

After thorough quantitative research into the phenomenon of bundle promotions , the authors further report that there is a particular kind of bundle that marketers can design so as to maximize sales . Consumers are typically attracted to discounts on bundle promotions even if they do not plan to purchase the entire range and quantity of goods that a bundle consists of . But , if the quantity and range of goods in a bundle is not practicable for them to purchase , they tend to refuse the bundle altogether . Hence , it is best for marketers to design bundle promotions that consist of three to four items only with shallow discounts Moreover , marketers need to decide on the focal item that a bundle is meant to boost the sales of . If the marketer 's objective is to increase the sales of the entire product line , the bundle should consist of all products sold by the firm . If , however , there is only one focal item in a bundle , it is useful to include some attractive items with the focal item in the bundle

Critique : This article is highly useful for marketing managers as it explains the importance of bundle promotions while advising marketers to create effective bundles to boost sales . The fact that consumers are generally attracted to discounts is well known . All the same , it is equally essential for marketing managers to understand the kinds of discounts that actually result in increases in sales . All bundles available in the market are obviously not attractive enough to motivate consumers to purchase them . Then there are bundles that consumers would consider practical to purchase . The authors describe such bundles as consisting of only a few articles . Bundles that consist of too many consumer products may not be feasible to design and promote . By describing this finding , the authors have saved marketing managers a great deal of time and resources that they may have spent...