Abstract

Bundling strategy is widely used in today products and services markets. While determining which products to bundle together is a critical decision to the success of this strategy, there is a lack of empirical evidence about what type of interrelationship among products drives value in a bundle. Most literature on contingency levels (i.e., products' complementarity, substitutability or independence) has focused on the development of theoretical models and simulations of economical models. The few empirical works in this area reported that bundles of complements are more likely to be purchased than bundles of independent products, without determining the underlying mechanism of this finding. In this dissertation, it is proposed that (1) perceived complementarity between bundled products is a key determinant for bundle value that exists to a certain extent in bundles from complementary, substitutable and independent product categories and (2) perceived complementarity is malleable depending on goals and contextual factors. The first objective of this research is to develop a reliable and valid scale assessing the extent to which bundled products complement each other (study 1) and distinguish perceived complementarity from the related constructs of substitutability and independence. In study 2, the proposed effect of perceived complementarity on bundle evaluation is tested, using the new measure developed in study 1 with a different sample and a new set of bundles from complementary, substitutable and independent product categories. In the second part of the dissertation, the author investigates how context and goals impact perceived complementarity between bundled products, thereby influencing bundle evaluation. The categorization literature provide important insight to the understanding of consumers' stable and flexible construction of product categories that can change bundle value depending on (a) which goal is salient to the individual in a particular situation (study 3) and (b) contextual factors such as image presentation format of the bundled products (study 4) and price discount strategy (study 5). Finally, boundary conditions of the impact of image presentation format on bundle value are examined in study 6. The theoretical and managerial implications of the six studies are finally discussed and their limitations and future research avenues are presented