The Effect of Promotion Framing on the Evaluation of Price Bundling

Nai-Chi Yeh, National Chengchi University, Taiwan
Lien-Ti Bei, National Chengchi University, Taiwan
This research examines the differential effects of three types of promotional frames applied to bundles of identical or different products. In contrast to most framing research, this study uses mental accounting theory (Thaler, 1985) to analyze how consumers code different promotional frames. Further, the internal reference price (IRP) variations of focal and tie-in products were also observed to verify consumers’ “mental accounts.” Results showed that when bundles offer similar products, only “buy one, get one free” increases the IRP of focal product and code two mental accounts. Whether “buy one and get the second for only $1” decreases or increases the IRP of the focal product depends on whether it is bundled with the same or different components. Finally, for “buy two, get 50% off,” bundles’ IRP decreases under both conditions.
[ to cite ]:
Nai-Chi Yeh and Lien-Ti Bei (2008) ,"The Effect of Promotion Framing on the Evaluation of Price Bundling", in NA - Advances in Consumer Research Volume 35, eds. Angela Y. Lee and Dilip Soman, Duluth, MN : Association for Consumer Research, Pages: 966-966.