Consumers Prefer Bundle Packs to Discounts
If you’re looking to boost sales, consider offering bundle packs to discounts.
In a 2008 study, a group of American researchers linked up with a supermarket to test the two promotional models.
Their guinea pig, per se, was a 9oz unit of Fruits & Passion hand lotion, regularly priced at $13.50. Over a sixteen week period, the store offered either a 35% price discount or a bonus pack with 50% extra free. The offers alternated each week.
After the trial period, the researchers went through the sales figures. The bundle pack promotion generated 73% more sales than the price discount offer.
Interestingly, consumers would have received better value if they picked the 35% discount. So what’s happening here? Simply, consumers are not doing the math. Assumptions are being made that 50% extra free is better than 33% off the price. The base values associated with the percentage changes are being ignored.
Irish retailers tend to offer both discounts and bundle offers on the shelves. Is it now time to drop discount offers altogether? When developing bundle offers, marketing managers need to make sure the incremental costs involved with the production, transport and shelving of their bulkier products do not exceed the financial benefits.