Framing A Price Bundle: The Case Of "Buy/ Get" Offers

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Negotiations and Contracts
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Product,
University Of California At Berkeley
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University of California, Berkeley

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Overview: Two experiments examine how consumers respond to products that have been offered as "free gifts with purchase" of another product. The underlying thesis is that consumers will infer that the costs of production of a product that is offered for free are low, and this will reduce the price they are willing to pay for the product when it's a standalone offering. Study 1 shows that when an economically identical offer is framed as a joint bundle (Buy X and Y for $) as compared to when it is framed as a "Buy one, Get one free" offer (Buy X for $, and get Y free; or Buy Y for $ and get X free), consumers are willing to pay less for the product offered for "Free".

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Format: PDF | Size: 54KB | Date: Sep 2004 | Pages: 25

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