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The effects of congruence in product bundles

on the value of the bundle

- An experiment within the music festival industry

Master’s Thesis

Name Kevin de Wit Student number 10087532

University Universiteit van Amsterdam Faculty Amsterdam Business School Master Business Administration

Track Entrepreneurship and Management in the Creative Industries Supervisor B. Kuijken MSc

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Statement of Originality

This document is written by Kevin de Wit who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.


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Abstract

This research contributed to the theories around product bundling, congruence and categorization. The main objective of this research is to gain more knowledge about product bundling and the role of congruence with the consumers’ evaluation of the creative good. The empirical setting of this research is the music industry, and especially music festivals. It focuses on the effects of congruence and categorization within product bundles on the value of the bundle. Alleeup, a new online auction platform, was used for the data collection. The participants were randomly assigned to one of the four different treatments where they saw a product bundle with two tickets for Melt! Festival 2015 bundled with either the book “Mary Go Wild: 25 jaar dance in Nederland” or “The Indie Rock Poster Book”. Congruence within these bundles was created by manipulating the description of Melt! Festival 2015 to be either an Electronic Dance Music Festival or an Indie Rock Music Festival. After the bid, they were asked several questions about their perception of fit and their categorization of the festival. This led to the dataset to test the effects on the consumers’ evaluation of the bundle and category ambiguity. There were no significant results found in this research. The conclusion of this research is that products which are not fitting with each other can be used in product bundles without influencing the value of the bundle within the music festival industry. Limitations and suggestions for further research are discussed at the end of this paper.


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Table of contents

1. Introduction Page 6

2. Literature review Page 10

2.1 Bundling strategies Page 10

2.2 Product bundling Page 10

2.3 Product congruence Page 11

2.4 Congruence and consumers’ evaluation Page 12

2.5 Categorization Page 14

2.6 Categorization and consumers’ evaluation Page 16

2.7 Conceptual model Page 19

3. Method Page 20

3.1 Research design Page 20

- Experiment Page 20

3.2 Data collection Page 21

- Alleeup Page 21

- Music festivals Page 23

- Melt! Festival 2015 Page 23

- Books Page 24

- Procedure Page 26

- Treatments Page 26

3.3 Sample Page 28

3.4 Variables Page 29

- Independent variables Page 29

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- Mediating variables Page 31

- Control variables Page 31

- Analysis Page 32

4. Results Page 33

4.1 Descriptive statistics Page 33 4.2 Congruence and willingness to pay Page 35 4.3 Congruence and category ambiguity Page 36 4.4 Category ambiguity and willingness to pay Page 37 4.5 Mediation of category ambiguity Page 38

4.6 Further analyses Page 39

5. General Discussion Page 40

5.1 Congruence and consumers’ evaluation Page 41 5.2 Categorization and consumers’ evaluation Page 42 5.3 Limitations and further research Page 44 5.4 Managerial implications Page 45

6. Conclusion Page 46

7. Acknowledgements Page 47

8. References Page 48

9. Appendix Page 56

Appendix A - Advertisements and their description Page 56 Appendix B - Questionnaire Page 60


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1. Introduction

Product bundling is used by a lot of companies in many different industries, from the video game industry to fast-food restaurants (Gerdeman, 2013). This common selling strategy is pervasive and works in many cases, because people have a preference for bundles when it reduces search effort (Harris & Blair, 2006; Yadav, 1994). Sharpe and Staelin (2010) researched the conditions where a firm should offer a bundle of products instead of selling these products separately. In many cases they found that bundling increase the consumers’ perceived value of the bundled items due to many reasons. Most of the times it is cheaper to buy a bundle like a Happy Meal, better known as an Extra Value Meal, at the McDonalds than buy each product individually (Gerdeman, 2013). This is the practical example of the perceived price promotional effect that Sharpe and Staelin (2010) mention in their research. Besides that, product bundles also help consumers to make decisions easier (Gerdeman, 2013; Khan & Dhar, 2010). However, there is a gap in which situations this would occur. Especially when most of the consumers who buy one product will also buy the other product. For example, when 90% of the buyers of a specific coffee machine also buys a bag of coffee beans. That is why it is important to know for companies in which situations they should bundle the products that will increase their performance.

Besides these facts, bundling also reduces search costs which could lead to higher satisfaction of consumers (Sharpe & Staelin, 2010). But some consumers might not appreciate being given only the option of a bundle without the ability to buy the products separately. They also might value the bundle lower than the separate products together (Gerdeman, 2013). Recent research (Brough & Chernev, 2012) focused on subtraction effects and found that when you add an inexpensive item to a bundle that this will decrease the value of the bundle. Yet, the amount of research about how consumers view and value bundles is

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low. In some cases consumers like product bundles but in other cases the perception of value of the bundle decreases to the extent that it is less profitable than selling the products separately (Reinders, Frambach, & Schoormans, 2010). The sales increase in this case, but the profit margins become too low and it becomes a bad strategy for the firm.

Researchers found in some cases that consumers value the bundle less than the individual products together and call this “negative synergy” (Gerdeman, 2013). This is in line with the detraction effects of Brough and Chernev (2012). It would be great for a company when they discover product bundles where the opposite occurs. This is called “Positive synergy”, where the value of the bundle is higher perceived by consumers than the individual products together. According to earlier research, this could occur when the bundle helps to categorize cross-category products and ambiguous products (Khan & Dhar, 2010; Rajagopal, 2004). The product bundle decreases the adaption problem of products that do not have a clear category and/or radical innovations (Reinders, Frambach, & Schoormans, 2010). Positive synergy could also occur when the bundle reduces the ordering and search costs of the consumer (Sharpe & Staelin, 2010). It is expected that congruence between bundled products helps to categorize the product due to their same image, and consequently will cause positive synergy.

As stated before, little is known so far about product bundling and the evaluations of bundles by consumers. Most research is focused on product bundling as a strategy and emphasize which bundle strategy will lead to the best performance in which situation (Sharpe & Staelin, 2010; Chen, 1997; Paun, 1993). But there are also inconsistencies around bundling and bundling strategies along different industries (Stremersch, 2002). Other earlier research is focused on the effects of categorization and positioning of products, and consumer perceptions of it on the evaluation of the products by consumers (Desai & Raneshwar, 2003;

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Gregan-Paxton, Hoeffler, & Zhao, 2005; Rajagopal & Burnkrant, 2009). Brough & Chernev (2012) researched the effects of product bundling and the role of categorization in perceptions of monetary value. However, they focused on how products of different price tiers can decrease value of an item. Current research focused mainly on consumer adaptions of innovations, but this paper will focus on the effects of congruence between two bundled products on the value of the bundle.

So bundling might fail when wrong products are chosen to be combined, but it offers also opportunities for a company (Gerdeman, 2013). That is why it is important for companies to be aware of the fact that they can increase their sales or be more profitable when they start bundling products. By choosing products which are similar to each other according to their image, organizations can increase the chances to be more profitable. Most of the bundling strategies are based on logic combinations or solutions to become more profitable (Tuli, Kohli, & Bhardwaj, 2007) and most research about optimal prices of bundles is too much related to specific product (Venkatesh & Mahajan, 1993). Especially in the emerging market of music festivals there is not much known about product bundling. Many festivals try to differentiate themselves by offering tickets for more days or sell them in combination with lockers or coins to buy drinks. Music festivals do this also by offering other products and services - next to the music - during the festival, like biological food, clothes and accessories. Smith and Andrews (1995) researched the consumer evaluations of new products with different degrees of congruence with the image of the organization. They found a positive effect on the consumers’ evaluation of the product. However, they also did not examine the effects of congruence between the image of the bundled products. There is expected that congruence between the products in a bundle affects the value of the bundle.

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This leads to the following research question:

RQ: What is the effect of congruence between the different products in a bundle on the consumers’ evaluation of this bundle?

This paper will continue with a review of the literature on bundling strategies in marketing with a focus on mixed product bundling. Secondly, congruence between products within bundles is discussed. Then, literature about categorization and its role within the consumer evaluation of bundled products is introduced. It is expected that congruence between the bundled products will help to categorize the main product and consequently increase the consumers’ evaluation of the bundle. It is also expected that congruence between the bundled products will increase the consumers’ evaluation of the bundle directly. The expectations about the relations are reflected in the conceptual model which is shown after that. In the method section the experimental setup will be explained, which will be followed by the results section. A conclusion and discussion rounds of this paper.

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2. Literature review 2.1 Bundling strategies

Current research about bundling strategies is mainly focused on the conditions when which strategies are the most profitable (Chen & Riordan, 2013; Hui, Yoo, Choudhary, & Tam, 2012; Paun, 1993; Sharpe & Staelin, 2010; Stremersch & Tellis, 2002; Tuli, Kohli, & Bharadwaj, 2007) or how it could be used for new product introductions through categorization processes (Gill & Dubé, 2007; Reinders, Frambach, & Schoormans, 2010; Sheng & Pan, 2009; Simonin & Ruth, 1995). Stremersch and Tellis (2002) classify four different bundling strategies which are commonly used in most of the other research papers. Price bundling is the sale of two or more separate products as a package at a discount, whereas product bundling is the integration and sale of two or more separate products at any price. Also, pure bundling is a strategy in which a firm sells only the bundle and not (all) the products separately, whereas in mixed bundling the firms sell the bundle and (all) the products also separately (Matthews, Somogyi, & Zanten, 2014). This paper is focused on the effects of mixed product bundling which is a bundle of products which can be sold separately at any price.

2.2 Product bundling

As stated before, product bundling is one of the bundling strategies in marketing but there are many different definitions about this used in the existing literature. Chen (1997) states that product bundling is the practice of selling two or more products in a package. However, the most commonly used definition of product bundling is the integration and sale of two or more separate products or services at any price (Stremersch & Tellis, 2002; Reinders, Frambach, & Schoormans, 2010). It could also be described as the practice of marketing two or more

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products and/or services in a single ‘package’ at a special price (Guiltinan, 1987; Venkatesh & Mahajan, 1993; Yadav, 1994). These different definitions lead to our definition of product bundling which is the marketing strategy of selling two products together in a bundle at any price.

2.3 Product congruence

Product congruence is the extent to which the different products in a bundle are similar to each other in terms of image, usage or price tier. This paper will focus on the similarity and fit according to the categorization of the good and especially the music genre. Therefore, product congruence is seen as the extent to which different products are similar to each other regarding their music genre. The opposite of product congruence is commonly named as product heterogeneity within the existing literature and refers to the differences between products based on different product attributes or image (Kalyanaram & Wittink, 1994; Sheikhdah & Elahi, 2013). Perceived fit is the extent to which products are perceived to have the same image and/or can be placed in the same category, and this will logically be a perceptive result of product congruence. Congruence is also the basis for product evaluation where the level of congruence between a products and its category influences the nature of information processing (Meyers-Levy & Tybout, 1989).

Sheikhzadeh and Elahi (2013) researched the impact of product heterogeneity on bundling decisions and risk considerations in a bundling problem from the perspective of the firm. They state that product heterogeneity can exist when there is a difference in the average prices that customers are willing to pay for the bundled products. This is often the result of large price difference between the products. The difference is based on the uncertainty in the customers valuations of the products, so it commonly exists when a new product is

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introduced and bundled with an established product. They conclude that product heterogeneity lead to lower profits and higher profit variances. However, this was tested in homogenous markets without different segments which gives a bad representation of the whole population. Arora (2008), and Andrews, Benedicktus and Brady (2010) did research about the same product attributes within bundling research and used products with a close fit of image with each other. Arora (2008) investigated the effectiveness of price bundling, which is selling products in a bundle at a price which is lower than when they are bought separately, and pricing strategies at teeth whitening products. They found that price bundling has a positive influence on the purchase intention of consumers. Andrews et al. (2010) focused more on the customer evaluations like the perceived value of service bundles. They also found that bundles with products that have a the same image in terms of categorization have positive effects like an increased perceived value and search intentions of consumers. Expected is that when products with a similar image are used in a bundling strategy, a higher perceived fit of the products by consumers will reduce the uncertainty of consumers about the value of the bundle. Sheikhdah and Elahi (2013) found lower profits and higher profit variances at product heterogeneity due to this uncertainty of consumers’ valuation. It can be expected that product congruence will lead to higher consumer valuations due to certainty about the products. Higher valuations can be presented by a higher willingness to pay and higher profits.

2.4 Congruence and consumers’ evaluation

Consumers evaluate product bundles based on many aspects. Yadav (1994) researched how consumers evaluate product bundles. He found that overall product evaluations can be predicted as a weighted average of the evaluations of the individual items. However, many

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other studies show that this is not always the case and that there are many aspects that can affect the consumers’ evaluation (Brough & Chernev, 2012; Sharpe & Staelin, 2010; Reinders, Frambach, & Schoormans, 2010; Sheikhdah & Elahi, 2013).

Sharpe and Staelin (2010) state that bundling increases the customers’ perceived value of the bundled items while Brough and Chernev (2012) conclude that customer valuations around product bundling can increase but also can decrease if the bundled products are located in different price tiers. Sheikhdah and Elahi (2013) also showed that customer valuations can decrease when the bundled products are from different price tiers due to product heterogeneity. However, product heterogeneity can also occur when the products are incongruent with each other and leads to product ambiguity. As mentioned before, Arora (2008) found that price bundling has a positive influence on the purchase intention of consumers. This increased purchase intention is a sign that the consumers’ evaluation of the product bundle increased. Andrews et al. (2010) researched the customer valuations of service bundles and found that the valuation of savings creates higher perceived value than convenience alone. So customers usually valuate a bundle higher than when they have to buy the products separately, because they think they save money with the bundle. Consumers’ quality perception of a new brand will be affected by the brand image of a bundle partner (Sheng & Pan, 2009). They show that quality perception of a product can increase when it is bundled with a product of a stronger and/or fitting brand, or decrease when it is bundled with a product of a weaker and/or misfitted brand. Sheikzadeh and Elahi (2013) concluded that product ambiguity, the opposite of product congruence, in a bundle will lead to uncertainty in consumer valuations of the bundle. This decreases the consumers’ evaluations of the bundle and their willingness to pay. Reinders, Frambach and Schoormans (2010) researched how product bundling facilitates the adoption process of radical innovations. They found that

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product bundling enhances the new product’s evaluation and it increases the purchase intention of consumers when the innovative product and the existing product have a high perceived fit. This enhancement could also occur when two bundled product have a closer fit together. Therefore, there is expected that congruence between the products within a bundle will lead to a higher valuation of the consumer and a higher willingness to pay.

H1: Congruence in terms of the categorization between products in product bundles has a positive influence on the consumers’ willingness to pay for the bundle.

2.5 Categorization

Categorization is a subject that is widely researched in the existing literature and mainly within the psychology (Goode, Dahl, & Moreau 2013; Hugenberg & Bodenhausen, 2004; Lajos, Katona, Chattopadhyay, & Sarvary, 2009; Rajagopal, 2004; Yamaguchi & Markman, 2000). Consumer categorization refers to the act of categorizing or classifying (Rajagopal, 2004). People can categorize products based on different elements of the product. This enables individuals to efficiently store and recall information learned from experience, make inferences about newly encountered products, and form evaluations of them (Lajos et al., 2009). Yamauchi and Markman (2000) show in their research that people can categorize products in different categories based on the category signals that they receive. Category membership, which is the category to which a product belongs to, and category label, which is the category that the label states, both positively influence classification tasks. Category membership even inference when it contradicts that the category label states. Consumers also learn through internal knowledge transfer and use this as category signals (Gregan-Paxton & John, 1997). According to the analogical transfer paradigm, consumers learn by analogy

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where familiar products and their category are used to understand novel products. Structures of previous knowledge, product attributes, and the relation of the product with other products are used to structure the information and categorize the product. This is in line with Moreau, Lehmann and Markman (2001) who also add that segmentation and categorization is important for creating product and brand loyalty.

The categorization process of consumers can also have negative effects, for example when the category is ambiguous and not facilitated by clear category signals. Category ambiguity is the difficulty to place a product in a single or existing category based on the information that is given (Gregan-Paxton, Hoeffler, & Zhao, 2005). That information contains conflicting conceptual and perceptual category cues that lead to confusion among customers about the category in which the product has to be placed. Goode, Dahl and Moreau (2013) focused their research more on innovation aesthetics and found that category cues lead to more certainty among consumers to categorize the product. They also found that the product evaluations will be more negative if this cue is ambiguous and consumers cannot relate a category label to a new innovative product. Lajos, Katona, Chattopadhyay and Sarvary (2009) researched the effects of categorization uncertainty which follows from the category ambiguity. They conclude that consumers will position a subcategory for a new product when there is a high amount of uncertainty. Category ambiguity could also have an effect on the product experience of consumers (Hoch & Ha, 1986). Hoch and Ha (1986) researched the effects of ambiguity in evidence about product quality of product categories. They found that ambiguity negatively affects the perceptions of quality and the quality judgements. This shows that ambiguity in (quality) signals of a product are important for the categorization of the product. Category ambiguity is also important in terms of social categorization, Hugenberg and Bodenhausen (2004) show that this leads to uncertain

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categorization among consumers. This is in line with previous research (Latos, Katona, Chattopadhyay & Sarvary, 2009; Goode, Dahl, & Moreau, 2013).

2.6 Categorization and consumers’ evaluation

Categorization is also often used in product bundling strategies by using conceptual combinations to generate and understand new product concepts (Gill & Dubé, 2007). They show that combining existing products within an established category contributes the establishment of new products within a specific category. This makes it easier to understand what the product is and what it does. This helps consumers to evaluate these products in a better way, because they have more knowledge about it. Desai and Ratneshwar (2003) researched the consumer perceptions of product variants positioned on atypical attributes. They focused on the brand familiarity, retail shelf display, and consumer goal orientation. However, they measured the consumer perceptions of the product variances and found that the variant positioned on an atypical product attributes lead to less favorable perceptions of the consumers. The same happens when products are combined which have a different image in terms of categorization than each other. As a result, consumers become uncertain about the categorization of the product. They conclude that this leads to unfavorable perceptions and has a negative effect on the brand equity. This is in line with the results of earlier research about the effects of brand positioning of product bundles on the evaluation of the bundle by consumers (Simonin & Ruth, 1995) This shows how important categorization and the positioning on specific attributes is.

Categorization can have many effects but current literature is focused on the effects on consumer evaluations of products. Rajagopal and Burnkrant (2009) researched the consumer evaluation of hybrid products, which possess features of more than one category

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and may be categorized in alternative categories. However, they looked to the differences in product beliefs and attitudes toward hybrid products and show how these differences can be reduced through priming strategies. Chernev and Gal (2010) focused on the value judgements of consumers around combinations of items representing conflicting goals. These combinations can be seen as the opposite of congruence between products within product bundling. They conclude that the value judgements are more negative and diverse when there is no congruence between the bundled products. This suggests that this leads to more category ambiguity. Brough and Chernev (2012) looked upon the consumers’ perceptions of monetary value when products from different price tiers are combined. They focused on the categorical nature of processing information by consumers when they evaluate products which can be classified in opposing categories according to their price tier. This means that consumers evaluate cheap products in an other way than expensive products. These opposing categories are also seen as the opposite of congruence show that these different evaluations are the result of different categorization by consumers. It also shows that there is more category ambiguity when there is no congruence between the bundled products. This leads to the following hypothesis:

H2: A lack of congruence in terms of categorization of the bundled products increases the consumers’ perceived category ambiguity of the main product.

Brough and Chernev (2012) conclude that categorical reasoning leads to subtractive judgements which means that consumers valuate the monetary value of product bundles lower when both products can be classified in different categories. Congruence between bundled products can help classifying the products of the bundle in the same category and

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will decrease the ambiguity about the perceived category among consumers. When there is less ambiguity, consumers will have higher perceptions of the monetary value of the bundle, so a higher willingness to pay for the product bundle. Gregan-Paxton, Hoeffler and Zhao (2005) researched the effects of ambiguous categorization and also found that when conflicting conceptual and perceptual category cues describe an ambiguous product, consumers use a single category inference strategy to categorize it. They are not likely to conceptualize a newly cued category what will lead to many different perceptions of existing categories. This is in line with the paper of Goode, Dahl and Moreau (2013) which conclude that the product evaluations will suffer when consumers are uncertain about the product category in which the product has to be placed. It is expected that the category ambiguity will decrease the willingness to pay because it is not clear for consumers in which category the product bundle belongs which makes it harder to evaluate it. This leads to the following hypotheses:

H3: The consumers’ perceived category ambiguity has a negative effect on the consumers’ willingness to pay for the bundle.

H4: The consumers’ perceived category ambiguity mediates the effect of congruence in terms of categorization of the bundled products on the consumers’ willingness to pay for the bundle.

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2.8 Conceptual model

The research question and the different hypotheses are shown in figure 1 as a conceptual model to give a better impression about how the different variables are related to each other.

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3. Method

The method section focuses on the empirical setting of this research. It contains the following subsections: the research design, the data collection, the sample and the different variables.

3.1 Research design

The empirical setting of this paper is product bundles within the music industry, and especially the music festival industry. In the music festival industry the theories about congruence and categorization can be tested by bundling festival tickets with products that represent a specific genre. The description of the music festival is manipulated towards a certain genre to categorize the festival. Books that represent one of the described genres are used to manipulate the congruence of the product bundle. The first objective is to see to which extent congruence within a product bundle can support the categorization of a music festival. The second objective is to see if and to which extent congruence within a product bundle affects the value of the product bundle as a whole.

Experiment

To test the hypotheses and to answer the research question, a quantitative research method is chosen. The experiment is the most suitable way to test the hypotheses of this paper. This strategy is perfect for manipulating the independent variables, which is congruence, and to measure its effect on the dependent variable, which is the categorization of the music festivals and the consumers’ willingness to pay for the product bundle. Effects of the independent variable on the dependent variables can be attributed to the experimental intervention (Lewis, Thornhill & Saunders, 2007).


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3.2 Data collection

To collect the data and test the differences in consumers’ willingness to pay for the different product bundles in an experimental design, a collaboration with the new, online auction platform Alleeup was made. All data was collected between the 28th of May and June 15th.

Alleeup

The online auction system Alleeup is a perfect way to execute this experiment through an online auction and questionnaire. Alleeup is an online platform where online auctions are executed. People can register, either with their Facebook account or an e-mail account, and bid on the products that they want at www.alleeup.nl. They will also automatically become part of the panel of Alleeup. This panel receives an e-mail when new products are added to the website with the invitation to join the auction. The people who join the auction can see a picture, movie and/or description of the product, but they can not see what the other participants have bid. After that, the participants are asked to answer a maximum amount of five questions which are mainly used by researchers as a manipulation check, to control for several variables and/or to find relevant relationships/correlations. When the auction closes, the highest bidder wins the auction but pays the second-highest bid for the product. This is called a second price auction which provides incentives for consumers to truthfully reveal their preferences (Lusk, Alexander & Rousu, 2007). This leads to more reliable results since the participants receive an incentive to provide their true maximum willingness to pay for the product bundle. It also increases the amount of people who compete in the auction and people are more symmetrical distributed in the auction due to the lack of a priori information about what other people bid (Vickrey, 1961). Participants who do not want the product bundle can bid an amount of zero or close to zero. Participants who want the product bundle can bid the

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full amount that they are willing to pay for the product which is a clear view on their evaluation of the product bundle. In sum, Alleeup is a perfect tool to measure both the consumers’ willingness to pay and other variables to control and measure effects.

More advantages of Alleeup are that the online auction is available for every person who visits the website. Besides that, every student is asked to deliver at least 100 new relevant participants which will added to the panel of Alleeup. People who are gathered by other students are also suggested to bid on this product, which delivers a bigger chance on a bigger dataset. This happens after they subscribed and joined the primary auction of the student who gathered him or her. New participants are approached through different online media, but mainly through Facebook. Another advantage of Alleeup is that researchers can combine the auction with a small questionnaire which delivers a bigger dataset. This dataset allows researchers to control for specific variables. The dataset also gives researchers more possibilities to find relevant relationships among the different variables.

There are also some disadvantages of using Alleeup for the data collection. According to many authors, auctions lead to more competition which leads to overbidding (Crawford, Iriberri, 2007; Goeree, Holt, Palfrey, 2002; Kagel, Harstad, Levin, 1987). This is a consequence and explanation of the winner’s curse in common-value auctions. On the other hand, in Alleeup, participants can not see the bids of the other participants which decreases the effects of competition in an auction. Cooper and Fang (2008) also conclude in their research that overbidding still occurs in a second price auction when bidders perceive their rivals to have similar values. However, large overbids only occur in second price auctions when the bidders believe that their opponents have much higher values. Furthermore, overbidding will occur in all treatments equally and the treatments are randomly assigned to the participants (Lewis, Thornhill, & Saunders, 2007). Therefore, the relative difference will

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remain the same over all treatments. Another disadvantage has to do with the convenience sampling. All the participants which are already in the panel or approached to subscribe for the panel were gathered through a convenience sample. This decreases the external validity and restricts the generalizability.

Music festivals

The existing literature about music festivals mainly focusses on the motivations of consumers to attend (Bowen & Daniels, 2005; Pegg & Patterson, 2010), sponsorships (Oakes, 2003; Rowley & Williams, 2008) and medical services (Chapman, Carmichael, & Goode, 1982; Levens & Durham, 1971). These subjects are mainly important for making the festivals more profitable through better targeting and receiving the best sponsors, because tickets and sponsorships are the most important revenue streams (Rowley & Williams, 2008). However, less attention is paid to the part of selling the tickets. This paper is focused on the ticketing part and if bundling is a solution to become more profitable and to be better categorized.

Melt! Festival 2015

This research is focused on the music industry and especially the emerging market of music festivals. There are many festivals which fit in this category and many of them are trying to differentiate themselves from other festivals. Melt! Festival is a music festival that started in 1997 for techno enthusiasts but it became a major force on the international festival circuit (Melt! Festival., n.d.). Nowadays, Melt! Festival 2015 is a three day festival focused on musical euphoria. According to their description, they are trying to break the boundaries between different music genres by using artists among different opposing genres. It contains artists from indie and electro, and from mainstream and subculture. Therefore, the festival

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itself is hard to put in a single genre. The description of the festival will be manipulated by naming it either as an electronic music festival or an indie rock festival in the description. The books that are bundled with the festival ticket are used to create congruence or not with the description. The following picture (figure 2) has been used on the website of Alleeup and this was the first image that they saw when they started with the experiment:

Figure 2. Cover of Melt! Festival 2015

Books

Books with a clear genre are easy to categorize and could help the categorization of another product by bundling it. For categorizing Melt! Festival, a book about indie music and the corresponding subculture, and a book about electro music and the corresponding mainstream culture is used. The books that are used include a clear description about the type of music and its corresponding (sub)culture.

The book about electronic dance music and its corresponding mainstream culture that has been chosen is “Mary Go Wild: 25 jaar dance in Nederland”, which is a book about 25

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years of dance in the Netherlands. In almost 600 pages the history of the Dutch dance history is described through different interviews. Besides that, the book contains almost 1000 photos mainly from personal sources and most of them were never published before (Mary Go Wild: Het boek., n.d.). This book supports the categorization of Melt! Festival 2015 by showing different category cues of the category electronic dance music.

The book about indie rock music and its corresponding subculture that has been chosen is “The Indie Rock Poster Book”, which is a colorful celebration of indie rock music and art. Showcasing original artwork by thirty of today’s cutting-edge illustrator including Mike Perry, Deanne Cheuk, Jeremyville, Andy J. Miller and more, this poster collection is inspired by classic indie rock songs of each artist’s choosing (Indie Rock Poster Book., n.d.). To give an impression of the books, the covers of both books are shown in figure 3.

Figure 3. Covers of the books

The book about electronic dance music does not contain the same clear category signals as the book about indie rock music. To compensate this, the descriptions of the books

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emphasized the fact that the books contain text and pictures about either electronic dance music or indie rock music.

Procedure

The experiment will be conducted with the online auction system Alleeup. There will a 100 people be added to the panel of this website through a convenience sample, so by putting the link online through different social media. Respondents will randomly be assigned to one of the four treatments where they will see an advertisement of a product bundle. The main product is a music festival ticket for Melt! Festival 2015 and bundled with a book about a specific music genre. That genre is congruent or incongruent with the description of the festival. The books have been chosen based on their title and their. While seeing the advertisement there is being asked what they would pay for the product bundle, without seeing what other people bid. After that, the respondents received a few questions that will measure a few demographics (gender, age and education level), the categorization of the music festival, and the perceived fit between the book and the festival tickets. After three weeks, the auction closed an the highest bidders receive an e-mail with a link to buy the product bundle.

Treatments

Participants are randomly assigned to one of the four treatments where they will see an advertisement of a product bundle or just the festival tickets as a baseline. The main product is a music festival ticket for Melt! festival 2015 and bundled with a fitting product or a misfitting product. In the description there will be mentioned that this is a ticket for an electronic music festival or a rock festival to position it in a specific genre. The ticket is

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bundled with a book that fits with the mentioned genre or not. This leaded to the following four treatments.

Treatment 1: Melt! Festival 2015 - Electronic Dance Music bundle with congruence

In the first treatment there is congruence between the bundled products with a genre indication of an electronic music festival. This is the ticket for Melt! festival 2015 mentioned to be an electronic music festival bundled with a book about dance music.

Treatment 2: Melt! Festival 2015 - Indie Rock Music bundle with no congruence

In the second treatment there is no congruence between the bundled products with a genre indication of an electronic music festival. This is the ticket for Melt festival 2015 mentioned to be an electronic music festival bundled with a book about indie rock music.

Treatment 3: Melt! Festival 2015 - Indie Rock Music bundle with congruence

In the third treatment there is congruence between the bundled products with a genre indication of a rock music festival. This is the ticket for Melt festival 2015 mentioned to be a rock music festival bundled with a book about indie rock music.

Treatment 4: Melt! Festival 2015 - Electronic Dance Music bundle with no congruence

In the fourth treatment there is no congruence between the bundled products with a genre indication of an rock music festival. This is the ticket for Melt festival 2015 mentioned to be a rock music festival bundled with a book about dance music.

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3.3 Sample

A total of 205 participants participated in the experiment. The sample of this experiment contains 141 participants who have been gathered personally through different media by subscription for Alleeup. All people in the panel are gathered through convenience sampling where friends and family members have been invited through social media, especially Facebook, and e-mail contact. The sample also contains some people who have been gathered by other students who each gathered at least 100 participants for their experiment. Furthermore, participants have been gathered by Alleeup from Euroclix and through advertising on Facebook. In total, 185 participants have finished the auction by bidding on the product bundle and answering the questions. All participants were used for the data analyses.

The division of all the participants is 50% men and 50% women, which makes the sample completely equal in terms of gender. However, they are a bit less equally divided among the different treatments as can be seen in table 1. The treatments 1 contains more women (61%) while treatment 2 and 3 contain slightly more men (56% and 55%). The age of the participants lies between 15 and 63 (M = 24.63, SD = 5.93). There are no big differences among the different treatments in terms of age. The highest level of achieved or current education is relatively high. Most of the participants are doing or have achieved an HBO Bachelor’s degree (32.6%), a University Bachelor’s degree (22.1%), or a University Master’s degree (30%) (M = 6.39, SD = 1.56). This can be explained due to the fact that most of the participants are gathered through a convenience sample by master students. There are also no big differences in education level among the different treatments, so there is not controlled for any of these variables. Table 1 gives an overview of the distribution of gender, average age and education level among the different treatments.

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3.4 Variables

The key constructs of this study are congruence between the bundled products, category ambiguity, and the willingness to pay.

Independent variables

The independent variable is congruence between the bundled products which is the extent to which products within the bundle are similar to each other regarding their image. This is measured by pretests where existing or potential product bundles are shown to consumers. There will be asked to which extent people think the products are similar to each other. Perceived fit is the similarity of two products within a bundle as perceived by consumers. Perceived fit will be measured in the questionnaire after the online auction to test if the pretest was valid and reliable enough to assume that there is a significant difference in congruence between the bundled products. This is also a manipulation check to see whether or not the manipulation was successful or not. The statement and scale is based on the

Table 1: Distribution of participants among the different treatments

Age distribution, average age and average education level

Treatment Gender Average age Education level 1. EDM bundle with

congruence

39% male (N=41) 23 6.49

2. Indie Rock bundle with no congruence

56% male (N=45) 26 6.56

3. Indie Rock bundle with congruence

55% male (N=58) 24 6.43

4. EDM bundle with no congruence

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existing scale of DelVecchio and Smith (2005). The next statement is used to check if the congruence between the products was perceived by the participants:

-

The festival has the same image as the book.

(Yes - No)

The results of an Independent Samples T-test shows that the perceived fit was slightly higher in the congruent conditions (M = 0.46, SD = 0.51) than in the conditions which were incongruent (M = 0.44, SD = 0.50), but they do not significantly differ from each other, t

(193) = -0.23, p = .82, 95% CI [-0.16, 0.12]. Even though the manipulation has not been

succeeded, the congruent and incongruent treatments have been used as the independent variable. It might be possible that the manipulation is not perceived by the participants, but it still can have an effect on the dependent variables.

Dependent variables

The dependent variable is the consumers’ willingness to pay for the bundle which is the maximum amount that a consumer is willing to pay for the product bundle. This is measured through an online second price auction (Vickrey, 1961). Respondents are asked to bid the maximum amount that they are willing to pay for the product bundle while seeing the advertisement and the description of the product bundle. After the auction, the highest bidder will receive the product for the second highest bid. According to Lowball (1985) in Venkatesh and Chatterjee (2006), is the willingness to pay the best determination for choosing the optimal strategy related to decisions about product bundling.

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Mediating variables

The mediating variable is category ambiguity which is the extent to which there is uncertainty among the consumers about the category in which the main product is placed. In order to measure category ambiguity, two questions were asked based on the existing, and opposing, scale of Goode et al. (2012) that measures category certainty. The scale is mirrored afterwards to get a clear indication of the category ambiguity among the consumers. Participants indicated their agreement on a 5-point Likert scale (1 = strongly disagree, 5 = strongly agree) about the following statements:

-

I am sure that Melt! Festival 2015 can be placed in the following genre:

-

Electronic Dance Music

(Strongly disagree - Disagree - Neutral - Agree - Strongly agree)

-

Indie Rock Music

(Strongly disagree - Disagree - Neutral - Agree - Strongly agree)

Control variables

In the questionnaire there is also asked for some demographics. Age, gender and highest achieved or current level of education of the participants are measured to see if the participants of the different treatments are equally divided among the treatments and not significantly different from each other (Rowe, Jacobson, & Van den Oord, 1999). The following questions are used to measure these variables:

-

What is your gender?

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-

What is your date of birth?

(Day) (Month) (Year)

-

What is your highest achieved or current level of education?

(No education - VMBO - HAVO - VWO - MBO - HBO - University Bachelor Degree - University Master Degree - Else)

Analysis

To discover what the effects are of congruence between the bundled products on the consumers’ category ambiguity and their evaluation of the product bundle, Independent

Sample T-tests, one-way ANOVA analyses and Regression analyses were conducted. The Levene’s Test for Equality of Variances was conducted to see if there can be assumed that the

variance between the different groups is equal. SPSS Statistics 23 has been used for all the statistical analyses.


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4. Results 4.1 Descriptive statistics

A total of 205 participants conducted the experiment while 198 participants completed the experiment. All data was used for the analyses. The average willingness to pay of all participants, including the zero bids, is €52,33 (M = 52.32, SD = 73.05). There are 140 bids above zero, if we exclude them, the average willingness to pay is €76,62 (M = 76.62, SD = 77.19). Table 2 gives an overview how the bids, in- and excluding zero bids, are distributed among the different treatments.

Zero bids also contain valuable information, because it shows for example that they are not interested in the product or already have the product. In this research, it is fairly possible that an amount of the participants already have a ticket for this festival or have other plans on the

Table 2: Average willingness to pay per treatment

Willingness to pay with and without zero bids

Treatment Willingness to pay Willingness to pay without zero bids

M SD M SD

1. EDM bundle with congruence

40.38 67.27 77.25 76.59 2. Indie Rock bundle with no

congruence

66.39 79.68 78.74 81.00 3. Indie Rock bundle with

congruence

54.36 74.58 81.53 78.36 4. EDM bundle with no

congruence

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date of the festival like vacations. Therefore, the zero bids are included in all the further analyses.

The category ambiguity is divided in two separate variables which indicate to which extent there is ambiguity in the categorization of Electronic Dance Music or Indie Rock Music. In this way, there can be seen if congruence and/or a book with category cues supports the categorization of the main product. The ambiguity of all the participants of categorizing Melt! Festival 2015 as an Electronic Dance Festival (M = 2.56, SD = 1.03) is less than the ambiguity of categorizing it as an Indie Rock Festival (M = 3.18, SD = 1.05). This means that all the participants are more certain that Melt! Festival 2015 is an Electronic Dance Festival. Table 3 gives an overview to which extent there exists category ambiguity among the different treatments.

Table 3: Average category ambiguity

Category ambiguity among the different treatments Treatment Electronic Dance Music

Ambiguity

Indie Rock Music Ambiguity

M SD M SD

1. EDM bundle with congruence

2.42 1.05 3.44 0.98

2. Indie Rock bundle with no congruence

2.63 1.02 3.13 1.20

3. Indie Rock bundle with congruence

2.58 1.08 3.05 1.03

4. EDM bundle with no congruence

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4.2 Congruence and willingness to pay

The first hypothesis, stating that congruence between products in product bundles has a positive influence on the consumers’ willingness to pay for the bundle, a one-way ANOVA

analysis has been conducted. The congruent conditions and the incongruent conditions were

taken together and compared with each other. The willingness to pay has been standardized to compare both product bundles with different books with each other. The Levene’s Test of

Variances shows no significance, so there can be assumed that the variance between the two

conditions is equal, F (1, 203) = 0.25, p = 0.62. The results of the one-way ANOVA analysis shows that there is no significant difference in willingness to pay between the congruent conditions and the incongruent conditions, F (1, 203) = 0.58, p = 0.45. This means that the participants in the congruent conditions (M = -0.05, SD = 0.98) do not have a significant higher willingness to pay than the participants in the incongruent conditions (M = 0.06, SD = 1.02).

More one-way ANOVA analyses have been conducted to check if there is a significant difference in willingness to pay between the congruent and incongruent conditions when the participants are being segmented. The variables which were used to segment them were gender, age (category) and education level. The only significant result was found among the participants with a low education level, who are those who have achieved or currently doing high school (VMBO, HAVO, VWO). The results show these participants of the congruent conditions (M = -0.67, SD = 0.10) have a significant lower willingness to pay than the participants of the incongruent conditions (M = 0.11, SD = 1.21), F (1, 22) = 3.35, p < 0.1.

The first hypothesis is not supported and partially contrasted. People with a low education level have a higher willingness to pay if the bundled products are incongruent. In

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general, there can be concluded that congruence of the bundled products has no effect on the consumers’ evaluation of the bundle.

4.3 Congruence and category ambiguity

The second hypothesis, stating that a lack of congruence of the bundled products increases the consumers’ perceived category ambiguity of the main product, three Independent Sample

T-tests were conducted.

In the first test, both congruent conditions were compared with both incongruent conditions. The result shows that participants who saw either the Electronic Dance Music bundle or the Indie Rock Music bundle with a congruent description (M = 2.86, SD = 0.68), did not significantly differ in category ambiguity compared to participants who saw one of the incongruent conditions (M = 2.88, SD = 0.75), t (187) = 0.19, p = 0.85, 95% CI [-0.18, 0.22]. This rejects our expectation that a lack of congruence increases the category ambiguity. For the second and the third test, the conditions were separated per bundle. The results of the second test show that the category ambiguity of Electronic Dance Music among the participants who saw the Electronic Dance bundle with a congruent description (M = 2.42, SD = 1.05), did not significantly differ from the participants who saw the Electronic Dance bundle with an incongruent description (M = 2.60, SD = 0.99), t (85)= 0.83, p = 0.41 95% CI [-0.25, 0.61]. The results of the third test show that the category ambiguity of Indie Rock Music among the participants who saw the Indie Rock bundle with a congruent description (M = 3.05, SD = 1.03), did not significantly differ from the participants who saw the Indie Rock bundle with an incongruent description (M = 3.13, SD = 1.20), t (93) = 0.35, p = .72, 95% CI [-0.35, 0.51].

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The second hypothesis is not supported, because there were no significant differences found. There can be concluded that congruence of the bundled products has no effect on the consumers’ perceived category ambiguity of the main product.

4.4 Category ambiguity and willingness to pay

The third hypothesis, stating that the consumers’ perceived category ambiguity has a negative effect on the consumers’ willingness to pay for the bundle, was tested with a Regression

Analyses. The results of the first regression show that 0% of the variance in the willingness to

pay is accounted by the category ambiguity, R2 = 0.000, F (1, 196) = 0.01, p = 0.93. This result rejects the expectation that the perceived category ambiguity negatively affects the consumers’ willingness to pay for the bundle.

To check if either category ambiguity of Electronic Dance Music or category ambiguity of Indie Rock Music affects the willingness to pay, another two Regression Analyses were conducted with the two separate variables that measure category ambiguity. The results of the regression indicates that 0.4% of the variance in the willingness to pay is accounted by the category ambiguity of Electronic Dance Music and the category ambiguity of Indie Rock Music, R2 = 0.004, F (2, 195) = 0.40, p = 0.67. The willingness to pay can not significantly predicted neither by category ambiguity of Electronic Dance Music (β = -0.04, p = 0.59) nor by category ambiguity of Indie Rock Music (β = 0.05, p = 0.50). This rejects the expectation that perceived category ambiguity negatively affects the consumers’ willingness to pay for the bundle.

More Regression Analyses were conducted to check if a significant difference in willingness to pay can be found if the participants are segmented. The segmentation was done based on their gender, age category and education level. No significant results were found.

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Taken together, there can be concluded that the consumers’ perceived category ambiguity has not an effect on the consumers’ willingness to pay for the bundle.

4.5 Mediation of category ambiguity

The fourth hypothesis, stating that the consumers’ perceived category ambiguity mediates the effect of congruence of the bundled products on the consumers’ willingness to pay for the bundle, is tested by a Regression analysis with an SPSS macro of Hayes (2012). Bootstrapping was applied on 5000 samples with a Confidence Interval of 95%, because the variables are not normally distributed.

Results of the test show that there is no indirect effect of congruence on the willingness to pay, B = 0.01, BCa95 = [-0.03, 0.15]. This provides no support for the expectation that consumers’ perceived category ambiguity mediates the effect of congruence of the bundled products on the consumers’ willingness to pay. Table 4 gives an overview of the statistic results. This rejects the fourth hypothesis and there can be concluded that the consumers’ perceived category ambiguity does not mediate the effect of congruence of the bundled product on the consumers’ willingness to pay.

Table 4: Statistics of the indirect effect

Statistics of the indirect effect of congruence on willingness to pay

BC 95% CI B SE Lower Upper Indirect effect of Congruence on willingness to pay 0.01 0.04 -.01 .03 Note: N=133. BCa: bias corrected and accelerated; 5000 bootstrap resample’s.

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4.6 Further analyses

Since books were chosen to bundle with the festival tickets, because they can support or lack the categorization of the main good, there will also be tested if the books support the categorization. Two Independent Sample T-tests were conducted to find out if the category certainty of Electronic Dance Music and Indie Rock Music is significantly higher in the condition where the corresponding books were bundled. The certainty of categorizing Melt! Festival 2015 as an Electronic Dance Music festival was not significantly higher among the participants who saw the Electronic Dance Music bundle (M = 0.05, SD = 0.98), compared to the participants who saw the Indie Rock Music bundle (M = -0.04, SD = 1.02), t (189) = 0.60,

p = 0.55, 95% CI [-0.20, 0.37]. The certainty of categorizing Melt! Festival 2015 as an Indie

Rock Music festival was also not significantly higher among the participants who saw the Indie Rock Music bundle (M = 0.10, SD = 1.05), compared to the participants who saw the Electronic Dance Music bundle (M = -0.12, SD = 0.92), t (194) = -1.53, p = 0.13, 95% CI [-0.49, 0.06]. Therefore, there can also be concluded that the bundled books do not support the categorization of the main product, respectfully the festival tickets.

Table 5: Average category certainty

Category certainty among the different product bundles Product bundle Electronic Dance Music

Certainty

Indie Rock Music Certainy

M SD M SD

Electronic Dance Music bundle

0.05 0.98 -0.12 0.92

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5. General Discussion

This research attempted to examine the effects of congruence within product bundles on the value of the bundle. The empirical setting is product bundles in the music festival industry, where tickets for a music festival were bundled with books that supported the categorization of the music festival (Electronic Dance Music or Indie Rock Music). The description of the festival was manipulated to create congruent conditions (same genre as the book) and incongruent conditions (different genre as the book). However, the manipulation of the treatments was probably not strong enough according to the fact that the perceived fit was just a little bit higher in the congruent conditions compared to the incongruent conditions.

The first objective was to see if congruence has an effect on the value of the bundle, measured by the willingness to pay. The second objective was to see if congruence affects the categorization of the festival and if category ambiguity has an effect on the value of the bundle. An experiment with a total of 205 participants was conducted through the online auction platform Alleeup. The price that they bid on the product bundle measured their willingness to pay, by hiding the bids of other participants. The four treatments that were used are the Electronic Dance Music bundle with congruence, the Electronic Dance Music bundle without congruence, the Indie Rock Music bundle with congruence, and the Indie Rock Music bundle without congruence. After bidding on the product bundle, the participants were asked to answer a few short questions that measured their demographics (gender, age and education level), the perceived fit between the festival tickets and the book in the bundle, and their categorization of the festival (Electronic Dance or Indie Rock).

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5.1 Congruence and consumers’ evaluation

The first hypothesis is rejected. The results show that people do not have a higher willingness to pay for the product bundle when the products within the bundle are congruent. Only the people with a low education level who saw an incongruent product bundle had a higher willingness to pay than the people with a low education level and saw a congruent product bundle. This result even contradicts our expectation that congruence increases the value of the bundle.

This is not in line with most of the discussed theories (Andrews et al., 2010; Arora, 2008; Reinders, Frambach, & Schoormans, 2010; Sharpe & Staelin, 2012; Sheikhdah & Elahi, 2013). However, Sharpe and Staelin (2010) focused on mixed product bundling where the price of the product bundle is mentioned. They measured the perceived value of the bundle not in the monetary way of this research. The theory about valuation of savings, as mentioned in Andrews et al. (2010), probably has a bigger influence on the valuation of the bundle in the way they measured it. This effect could not be measured in this research where people have to show which price they would pay for a product bundle through an auction. Sheikhdah and Elahi (2013) found in their research that product ambiguity, a perceived misfit between the bundled products, would lead to uncertainty in the valuation of the bundle. This is not in line with our results, but can be explained due to the fact that there was no significant difference found in perceived fit between the congruent and incongruent conditions. The results of this research were also not in line with the outcomes of Reinders, Frambach and Schoormans (2010) which show that congruence increases the value of the bundle by enhancing the product evaluation. However, they researched this among radical innovations and the tickets for Melt! Festival are not a radical innovation.

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Still, some the results are in line with the discussed theories (Brough & Chernev, 2012; Sheikhdah & Elahi, 2013). Both research papers conclude that customer valuations could also decrease if the products are located in different price tiers, due to product heterogeneity. The average willingness to pay for the bundles was including zero bids €52,33 and excluding zero bids €76,62. This is much lower than the original price of the bundle which was €297,-. However, this can also be the result of the way how willingness to pay is measured, respectfully a real auction instead of a fake auction. It could also be the result of uncertainty about what the product is worth while they also can not see what other people have bid. Besides that, the price of the main product, two tickets for Melt! Festival 2015, is €176,- while the price of the books is €25,-. The bundled products are located in totally different price tiers and results show that this also could have lead to a decreased value of the bundle.

5.2 Categorization and consumers’ evaluation

The discussed literature focused on how categorization is used in product bundling strategies (Desai & Ratneshwar, 2003; Gill & Dubé, 2007; Simonin & Ruth, 1995). However, they used it to generate and understand new product concepts. Festival tickets are not a new product concept and Melt! Festival 2015 is also not a completely new festival but exists since 1997. The theories also focus on how a product bundle could help to position the main product while Melt! Festival positioned itself over all the years that it exists. This could be the main reason that there were no significant effects found around the categorization of the product in the bundle.

As mentioned before, the second hypothesis is also rejected. The results show that a lack of congruence between the products does not have an effect on the categorization of the

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main product. So congruence within a product bundle does not support or lack the categorization of the main product. Even when the different product bundles were separately tested, results did not show significant differences in category ambiguity. The results from the further analysis show also that the books of the bundles did not support the categorization of the festival. These results are not in line with the results of Chernev and Gal (2010). They focused on combinations of items representing conflicting goals as being incongruent. In this research, the product bundles did not contain such extreme different products in terms of conflicting goals. This could also be an explanation that the perceived fit did not significantly differ in the congruent and incongruent conditions.

The third and the fourth hypothesis have also been rejected. The results show that categorization does not have a negative effect on the value of the bundle and that categorization does not mediate the effect of congruence on the value of the bundle. This is not in line with the findings of Brough and Chernev (2012). They concluded that consumers’ have higher perceptions of the monetary value of the bundle when there is less category ambiguity. However, they focus on congruence in terms of products in the same product category. Festival tickets can hardly be seen as the same product and this research focuses on categorization in terms of music genres. Furthermore, the results are also not in line with the other discussed theories (Gregan-Paxton, Hoeffler, & Zhao, 2005; Goode, Dahl, & Moreau, 2013). They focused on ambiguous categorization and category certainty, and found that this affects the evaluation of the products. As mentioned before, Melt! Festival 2015 is not a product that is very hard to put in a single category. Still, Melt! Festival 2015 is a festival that can be put in more than one category due to their wide variety of music genres that they offer but people do not see large differences when they are positioned otherwise. Especially not when a festival like Melt! Festival 2015 has been positioning itself for several years. The

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