When the shopper sees a bonus pack on shelf that announces “30% More Free” and right next to it a pack from a competing brand, also in their purchase repertoire, that has a 30% discount, they will often neglect the base – everyday price when evaluating the offers.

This results in a substantial advantage in sales volume for a bonus pack over an economically equivalent price discount. (Chen, Marmorstein, Tsiros, & Rao, 2012)

Because of this:

a. bonus packs should be the preferred promotional tactic as long as the incremental costs of producing, transporting, and shelving the bonus pack do not exceed the benefits.

b. Use the word Free over Discount

This seems to intuitively make sense too! More Free is perceived as a gain while a price reduction might be perceived as a reduction in a loss. As humans, consumers and shoppers; we prefer gains to losses. (Kahneman, 2011)

References

Chen, H. (., Marmorstein, H., Tsiros, M., & Rao, A. R. (2012). When More Is Less: The Impact of Base Value Neglect on ConsumerPreferences for Bonus Packs ove rPrice Discounts. Journal of Marketing July, 64–77.

Kahneman, D. (2011). Thinking, Fast and Slow. Farrar, Straus and Giroux.

. (2011). Thinking, Fast and Slow. Farrar, Straus and Giroux.