Featured Research

from universities, journals, and other organizations

The Freebie Dilemma: Consumers Are Skeptical About 'Free' Products

Date:
June 15, 2009
Source:
University of Chicago Press Journals
Summary:
It's common for retailers to bundle two different products (like razors and blades) together and describe one as free. A new study in the Journal of Consumer Research shows that this strategy leads consumers to devalue the items when they're sold individually.

It's common for retailers to bundle two different products (like razors and blades) together and describe one as free. A new study in the Journal of Consumer Research shows that this strategy leads consumers to devalue the items when they're sold individually.

Related Articles


Authors Michael A. Kamins (Stony Brook University-SUNY), Valerie S. Folkes (University of Southern California), and Alexander Fedorikhin (Indiana University) found that describing a bundled item as free decreases the amount consumers are willing to pay for each product when sold individually. They call this the "freebie devaluation" effect.

"Why does a freebie decrease the price consumers are willing to pay for each individual product? Our research shows that consumers tend to make inferences about why they are getting such a great deal that detract from perceptions of product quality," the authors explain. "For example, consumers figure the companies can't sell the product without this marketing gimmick."

The authors also found exceptions to the "freebie devaluation" rule. For example, when the researchers explained that the products were paired so consumers would become familiar with the freebies, they were willing to pay more.

The authors also discovered that consumers are willing to pay the same amount for a bundle describing one of the products as "free" as for a bundle without the "free" description. "Our research shows that consumers take a mental shortcut when it comes to thinking about the overall mixed bundle price—a shortcut that they do not resort to when thinking about the price of just one of the items in the bundle." The mental shortcut skips the skeptical thinking that leads to "freebie devaluation."

"Our research findings have important strategic implications for retailers and manufacturers, suggesting that giving away something for free in the context of a bundle may come at the cost for the sellers," the authors write. "Sellers' hopes for immediate gains from freebie bundle sales might be countered by reduced long-term profits."


Story Source:

The above story is based on materials provided by University of Chicago Press Journals. Note: Materials may be edited for content and length.


Journal Reference:

  1. Michael A. Kamins, Valerie S. Folkes, and Alexander Fedorikhin. Promotional Bundles and Consumers' Price Judgments: When the Best Things in Life Aren't Free. Journal of Consumer Research, 2009;

Cite This Page:

University of Chicago Press Journals. "The Freebie Dilemma: Consumers Are Skeptical About 'Free' Products." ScienceDaily. ScienceDaily, 15 June 2009. <www.sciencedaily.com/releases/2009/06/090615171627.htm>.
University of Chicago Press Journals. (2009, June 15). The Freebie Dilemma: Consumers Are Skeptical About 'Free' Products. ScienceDaily. Retrieved December 18, 2014 from www.sciencedaily.com/releases/2009/06/090615171627.htm
University of Chicago Press Journals. "The Freebie Dilemma: Consumers Are Skeptical About 'Free' Products." ScienceDaily. www.sciencedaily.com/releases/2009/06/090615171627.htm (accessed December 18, 2014).

Share This


More From ScienceDaily



More Science & Society News

Thursday, December 18, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

UN: Up to One Million Facing Hunger in Ebola-Hit Countries

UN: Up to One Million Facing Hunger in Ebola-Hit Countries

AFP (Dec. 17, 2014) Border closures, quarantines and crop losses in West African nations battling the Ebola virus could lead to as many as one million people going hungry, UN food agencies said on Wednesday. Duration: 00:52 Video provided by AFP
Powered by NewsLook.com
Los Angeles Police To Receive 7,000 Body Cameras

Los Angeles Police To Receive 7,000 Body Cameras

Newsy (Dec. 17, 2014) Los Angeles Mayor Eric Garcetti announced the cameras will be distributed starting Jan. 1. Video provided by Newsy
Powered by NewsLook.com
Ivory Trade Boom Swamps Law Efforts

Ivory Trade Boom Swamps Law Efforts

Reuters - Business Video Online (Dec. 17, 2014) Demand for ivory has claimed the lives of tens of thousands of African elephants and now a conservation report says the illegal trade is overwhelming efforts to enforce the law. Amy Pollock reports. Video provided by Reuters
Powered by NewsLook.com
Indictments in West Virginia Chemical Spill Case

Indictments in West Virginia Chemical Spill Case

AP (Dec. 17, 2014) A grand jury indicted four former executives of Freedom Industries, the company at the center of the Jan. 9, 2014 chemical spill in Charleston, West Virginia. The spill contaminated the Elk River and the water supply of 300,000 people. (Dec. 17) Video provided by AP
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Science & Society

Business & Industry

Education & Learning

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins