Partitioning or bundling? Perceived fairness of the surcharge makes a difference

Abstract

Partitioned pricing charges a base price and a surcharge instead of an equivalent all-inclusive price. In contrast, a bundling strategy offers a bundled price instead of separate prices for products in one package. Which pricing practice is more profitable? Previous research has shown conflicting results. This research identifies the boundary conditions which circumscribe the profitability of partitioned and bundled pricing. Results of three experiments indicate that the relative significance of the surcharge to the base price influences consumers' perception of the fairness of the surcharge, which in turn influences consumer purchase intentions. Furthermore, given the same level of surcharge, consumers' perceptions of the fairness of the surcharge moderates the effect of the pricing strategies. Thus, perceived fairness of the surcharge appears to be the key in determining whether or not the partitioning strategy is more profitable than the bundling strategy.

How price increases affect future purchases: The role of mental budgeting, income, and framing

“…However, there is recent work that focuses on the ease of processing numerical (price) information and of calculating final prices in order to analyze customer reactions to different presentations of price changes (e.g., DelVecchio, Krishnan, & Smith, 2007;Estelami, 2003;Min Kim & Kramer, 2006). Although there is no evidence for such a rationale for the price stimuli used in the present study, future research could address the effects of price increases on future purchases by using more complex price stimuli such as multidimensional prices and prices with odd numbers (e.g., Estelami, 2003;Sheng, Bao, & Pan, 2007). In this context, more complex price information might also affect the principles of mental budgeting (i.e., of booking and posting particular expenses) as expense tracking becomes more difficult.…”

Partitioned pricing, price fairness perceptions, and the moderating effects of brand relationships in SME business markets

“…Further, how offerings are framed (e.g., product bundle versus focal product plus a free gift) affects the perceptions of prices (Liu & Chou, 2014). Sheng, Bao, and Pan (2007) find that if the components of partitioned pricing include a base price and a surcharge, the rate of the surcharge influences perceptions of fairness -the lower the surcharge price compared to the base price, the higher the perception of fairness. Additionally, demonstrate that partitioned pricing leads to increased purchase intentions.…”

Irrationaler Kunde - Effekte verstehen und nutzen

“…und Preisfairness, was wiederum verkaufsfördernd wirken kann (Xia/Monroe 2004). Bei der Ausgestaltung der Preise sollte jedoch vorsichtig vorgegangen werden: Nehmen Konsumenten Gebührenelemente als unverhältnismäßig hoch wahr oder haben das Gefühl, dass der Anbieter durch über-mäßige Preisaufteilung den Gesamtpreis verschleiert, sinkt die Zahlungsbereitschaft im Vergleich zu kombinierten, einfachen Preisen (Sheng/Bao/Pan 2007).…”