5. Khan & Dhar (2010): Price-framing effects on the purchase of hedonic and utilitarian bundles

Question 1

this article examines

Answer 1

the conditions under which framing a discount as savings on certain items of cross-category bundles is more effective for increasing bundle purchase

Question 2

results:

Answer 2

three experiments show that the purchase of a cross-category bundle is more likely when the discount is framed as savings on the relatively hedonic component rather than on the utilitarian component or on the total bundle

Question 3

why?

Answer 3

a discount provides a justification that increases the likelihood of hedonic purchases but has little impact on utilitarian consumption

Question 4

purchasing hedonic goods is often associated with

Answer 4

guilt and greater need for justification

Question 5

hypothesis:

Answer 5

In heterogeneous bundles, discounting a hedonic item is more effective in increasing bundle purchase than discounting a utilitarian item; framing an equivalent discount on different items does not affect purchase likelihood in homogeneous bundles

Question 6

Method
2

Answer 6

many different discount frames: two hedonic, two utilitarian, mix
the bundle offers a discount, where the first option is framed as a discount on the utilitarian product vs. on the hedonic product

Question 7

Study 1`condtiond

Answer 7

six different two-pair bundles, hedonic: grill, fondue set vs. utilitarian: office chair, printer

Question 8

study 2 conditions

Answer 8

hedonic: sweater with university logo, utilitarian: textbook

Question 9

study 3 conditons

Answer 9

hedonic: box of chocolate, utilitarian: set of three binders, vs. discount on whole bundle

Question 10

Hedonic vs. utilitarian
method:

Answer 10

‘imagine you are looking for a grill, as you are about to order, you see a bundle deal offering a discount if you buy a fondue set along with the grill’ fondue set: $79 (hedonic product) and grill $79 (utilitarian product) > 20$ discount, if bought together

Question 11

Hedonic vs. utilitarian which product should be discounted?

Answer 11

the hedonic product

Question 12

likelihood of a bundle purchase was significantly higher when

Answer 12

the discount was framed as savings on the hedonic items
framing the bundle discount as hedonic product discount is more effective

Question 13

why hedonic?

Answer 13

having the discount on the hedonic option makes us feel less guilty, guilt reduction

Question 14

Anchoring bias

Answer 14

cognitive bias for an individual to rely too heavily on an initial piece of information offered (known as the anchor) when making decisions
these starting points might be random, unrelated and meaningless
we usually have insufficient adjustment afterwards

Question 15

Arbitrary anchoring
study by Ariely et al. (2003):
method and result

Answer 15

social security number as an anchor and respondents deny the impact of the anchor
students needed to write down the last two digits of their social security numbers
people with high social security numbers paid a lot more than people with low numbers