Article thumbnail

Partitioning or Bundling? Perceived Fairness of the Surcharge Makes a Difference

By Shibin Sheng, Yeqing Bao and Yue Pan


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\u27 perception of the fairness of the surcharge, which in turn influences consumer purchase intentions. Furthermore, given the same level of surcharge, consumers\u27 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

Topics: Business, Business Administration, Management, and Operations, Marketing
Publisher: 'Wiley'
Year: 2007
DOI identifier: 10.1002/mar.20194
OAI identifier:
Provided by: University of Dayton
Download PDF:
Sorry, we are unable to provide the full text but you may find it at the following location(s):
  • (external link)
  • (external link)
  • Suggested articles

    To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.