• Journal of the Korea Institute of Information and Communication Engineering
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• v.13 no.2
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• pp.207-214
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• 2009

This paper provides the analysis of economic theories about bundling in telecommunications service. First, the negative aspect of bundling is discussed. Second, the competitively neutral aspect of bundling which is counter response of negative effect is analyzed. Third, some variables affecting the bundling is investigated and the corresponding effect of bundling is discussed. The bundling can increase the social welfare under some circumstance while it sometimes decreases economic efficiency by detering the entry of competitive firms. Finally, regulatory approaches on bundling such as the criteria of bundling provision, the requirement of equal access, the discounting scheme ad a price control, ex anti regulation vs. ex post regulation, and the criteria of predatory pricing are provided.

• Journal of Digital Convergence
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• v.12 no.7
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• pp.11-20
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• 2014

This paper finds that the ultimate source of problems facing Korean mobile telecommunications such as excessive subsidies of handsets, waste of resources, and a vicious circle of expensive handsets and high prices for services, is bundling of handset and subscription. The analysis suggests that bundling causes consumers to confuse about prices of handsets and services, and firms focus on handset subsidy competition rather than on upgrading service qualities and lowering prices due to anti-competitive effects of bundling. Because most of the cost of bundling is passed on to consumers, the welfare of consumers decline. In particular, equality among consumers worsens due to price discriminations. To resolve these problems, unbundling of handset and subscription is a necessity. Mixed bundling allowing separate selling of handsets under bundling does not seem to work as a cure because bundling tends to be a dominant strategy. The best regulatory policy is a complete separation of handset and subscription.

• Management & Information Systems Review
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• v.38 no.4
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• pp.1-24
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• 2019

This study confirms the responses of consumers when the composition of emoticon bundles can be selected by individuals in MIM service. This aims to verify that customized bundling is a valid marketing strategy in the MIM emoticon market. Currently, the emoticon bundling used in Korean MIM services is in the form of pure bundling. As a result, Consumers must purchase an entire bundle even though he/she doesn't need to use all the emoticons contained in it. Some researches(e.g. Hitt & Chen, 2005; Wu & Anandalingam, 2002) show that when consumers value only part of the products or services included in pure bundling, customized bundling is much more profitable. In their works, customized bundling is appropriate when marginal costs are near zero. Information goods, such as emoticons, meet the condition. On the other hand, customized bundling increase the choosable options, so it can pose a problem of complexity (Blecker et al., 2004). And consumers may experience information overload(Huffman & Kahn, 1998). Thus, judgement on the necessity to introduce customized bundling needs to be made through empirical analyses in the light of characteristics of the product and the reaction of consumers. Results show that when customized bundling was introduced, consumers' purchase intention and willingness to pay significantly increased. Purchase intention for customized bundles has increased by 0.44 based on the five point Likert scale than the purchase intention for existing pure bundles. The increase in purchase intention for customized bundles was statistically independent of the existing purchasing experience. In addition, the willingness to pay was increased by about 2.8% compared to the price of the existing emoticon bundles in the whole group. The group with experience in purchasing pure bundles were willing to pay 5.9% more than pure bundles. The other group without experience in purchasing pure bundles were willing to buy if they were about 5% cheaper than the existing price. Overall, introducing customized bundling into emoticon bundles can lead to positive consumers responses and be a viable marketing strategy.

• Journal of Digital Convergence
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• v.12 no.10
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• pp.135-144
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• 2014

This study examined whether there is difference in consumers' product attitude according to the type of buying behavior values and the type of price discount among their lifestyle. First, the factors of values comprising consumers' buying behavior were derived as frugal buying, impulse buying, quality buying, and principle buying. Cluster analysis showed that the types of buying behavior value included high quality impulse buying, reasonable buying and practical buying. Second, it was found that there were differences in product attitude according to the type of consumers' buying behavior values. Third, interaction effect was found between the type of price discount and consumers' product attitude according to the type of buying behavior values. Fourth, among the factors of value comprising consumers' buying behavior, frugal buying factor has an effect on the product attitude with price discount of 50% and quality buying and impulse buying factors have an effect on the product attitude with bundle price discount (1+1). The above mentioned result of study suggests that when a company establishes a strategy of price discount, it should consider sales promotion strategy taking account of consumers' buying behavior values and type of product price discount.

• Asia Marketing Journal
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• v.14 no.1
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• pp.53-81
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• 2012

Constructing attractive bundle offers depends on more than an understanding of the distribution of consumer preferences. Consumers are also sensitive to the framing of price information in a bundle offer. In classical economic theory, consumers' utility should not change as long as the total price paid stays same. However, even when total prices are identical, consumers' preferences toward a bundle product could be different depending on the format of price presentation and the locus of price discount. A weighted additive model predicts that the impact of a price discount on the overall evaluation of the bundle will be greater when the discount is assigned to the more important product in the bundle(Yadav 1995). Meanwhile, a reference dependent model asserts that it is better to assign a price discount to a tie-in component that has a negative valuation at its current offer price than to a focal product that has a positive valuation at its current offer price(Janiszewski and Cunha 2004). This paper has expanded previous research regarding price discount presentation format, investigating the reasons for mixed results of prior research and presenting new mechanisms for price discount framing effect. Prior research has hypothesized that bundling is used to sell a tie-in component with an offer price above the consumer's reference price plus a focal product of the same offer price with reference price(e.g., Janiszewski and Cunha 2004). However, this study suggests that bundling strategy can be used for increasing product's attractiveness through the synergy between components even when offer prices of bundle components are the same with reference prices. In this context, this study employed various realistic bundle sets with same price between offer price and reference price in the experiment. Hamilton and Srivastava(2008) demonstrated that when evaluating different partitions of the same total price, consumers prefer partitions in which the price of the high-benefit component is higher. This study determined that their mechanism can be applied to price discount presentation formats. This study hypothesized that price discount framing effect depends not on the negative perception of tie-in component with offer price above reference price but rather on the consumers' perceived consumption benefit in bundle product. This research also hypothesized that preference for low-benefit discount mechanism is that perceived consumption benefit reduces price sensitivity. Furthermore, this study investigated how consumers' concern for quality in a price discount--a factor not considered in previous research--influences price discount framing. Yadav(1995)'s experiment used only one magazine bundle of relatively low quality uncertainty and could not show the influence of perceived uncertainty of quality. This study assumed that as perceived uncertainty of quality increases, the price sensitivity mechanism for assigning the discount to low-benefit will increase. Further, this research investigated the moderating effect of uncertainty of quality in price discount framing. The results of the experiment showed that when evaluating different partitions of the same total price and the same amount of discounts, the partition that discounts in the price of low benefit component is preferred to the partition that decreases the price of high benefit component. This implies that price discount framing effect depends on the perceived consumption benefit. The results also demonstrated that consumers are more price sensitive to low benefit component and less price sensitive to high benefit component. Furthermore, the results showed that the influence of price discount presentation format on the evaluation of bundle product varies with the perceived uncertainty of quality in high consumption benefit. As perceived uncertainty of quality gradually increases, the preference for discounts in the price of low consumption benefit decreases. Besides, the results demonstrate that as perceived uncertainty of quality gradually increases, the effect of price sensitivity in consumption benefit also increases. This paper integrated prior research by using a new mechanism of perceived consumption benefit and moderating effect of perceived quality uncertainty, thus providing a clearer explanation for price discount framing effect.

• Asia Marketing Journal
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• v.13 no.3
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• pp.55-77
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• 2011

This study investigate the interaction effects of bundle price discount framing and message framing on consumer's attitude of bundle component. Although each effect of bundle price discount framing and message framing has been explored individually, few attempts have been made to invest them jointly. This study tests the interaction effects of bundle price discount framing and message framing on consumer's evaluation of bundle component. Moreover, this research focuses on consumer's evaluation of individual bundle component while the existing research on bundling primarily focused on consumer's evaluation of the bundle. Prior research suggests that consumers are sensitive to the framing of prices and discounts in the presentation of the bundle offer. For example, there is considerable evidence that partitioning or consolidating the prices of a bundle can influence the attractiveness of the bundle offer. Similarly, there is evidence that an equivalent price reduction to the overall bundle, one of the individual products in the bundle, or distributed among the individual products in the bundle can alter the perceived attractiveness of the offer (e.g. Chakravarti, Krish, Paul, and Srivastava 2002; Hamilton and Srivastava 2008; Janiszewski and Cunha 2004; Johnson, Herrmann and Bauer 1999; ; Morwitz, Greenleaf, and Johnson 1998; Yadav 1994; 1995). In line with these earlier research, this research suggests that the bundle type can influence the consumer's evaluation of bundle component. There are two types of bundle - mixed-leader bundle and mixed-joint bundle. In mixed-leader bundling, the price of one of the two products is discounted when the other product is purchased at the regular price. In mixed-joint bundling, a single price is set when the two product are purchased jointly. This study supposes that the teeth whitening product is the leader product in a mixed-leader bundle. So bundle price discount framing is manipulated such as "Buy the teeth whitening product (regular price \80,000) and get 50% discount on the functional toothpaste(regular price \40,000), special set price \100,000" or "Buy the functional toothpaste and the teeth whitening product as a set and get discount for the set, special set price \60,000". Message framing is manipulated through the product claims described in an advertising bill. The positive framing presents that "Over 95% of users achieved the expected 2-3 shades of improvement in two weeks" where as the negative framing presents "less than 5% of users did not achieve the expected 2-3 shades of improvement in two weeks". This study uses hypothetical brand name of the teeth whitening product and the functional toothpaste This study is based on a 2x2 factorial design with bundle discount framing (mixed-leader bundle vs. mixed-joint bundle) and massage framing (positive vs. negative). The dependant variables are consumer's perceived quality and attitude of the teeth whitening product The data reveals that two dependant variables are correlated, so the data is analyzed with two-way MANOVA. This research explores the significant interaction effect of bundle discount framing and message framing on consumer's perceived quality and attitude of the teeth whitening product. When the message framing is positive, consumer's perceived quality and attitude of the teeth whitening product is higher in mixed-leader bundle than mixed-joint bundle condition. However, when the message framing is negative, consumer's evaluation is higher in mixed-joint bundle than mixed-leader bundle. The author explains this result by stating that consumers are less likely to use heuristics such as price-quality association and value discounting hypothesis(Raghubir 2004) in the negative message framing condition. Additionally, consumer's perceived risk of the teeth whitening product in the negative message framing condition can be more reduced by the bundle partner(e.g. the toothpaste) in mixed-joint bundle than mixed-leader bundle. Based on the results, marketing managers are advised to use different bundle type based on message framing of their product.

• The Journal of the Korea Contents Association
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• v.15 no.9
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• pp.509-526
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• 2015

The study investigated the N-Screen strategies of paid digital contents of foreign newspapers belonging to advanced companies: USA, United Kingdom, and Japan. This research employed the time to launch paid digital content business, whether or not to segment market, and 4p marketing mix strategies for analyzing the strategies. The results show that the strategies, starting around the year 2000, had experience chasm, and then revived since the year 2010, when the penetration rate of mobile devices proliferated. Most newspapers still supply contents under the assumption that they paly in a mass market. The items of paid digital contents are mainly composed of e-paper and digital contents. Regarding the price strategy, soft paywall and combination paywall are largely used. Distribution strategy is subject to whether or not to discriminate the path of digital contents. As for promotion strategy, bundling strategy with newspaper is mostly utilized. The difference between western countries and Japan was found in term of the free trial service.