Comparison of product bundling strategies on diﬀerent onlineshopping behaviors
, Hsiangchu Lai
Department of Computer Science and Information Management, Providence University, 200 Chung-Chi Road, Taichung 433, Taiwan
Department of Information Management, National Sun Yat-sen University, 70 Lien-Hai Road, Kaohsiung 804, Taiwan
Received 2 May 2005; received in revised form 3 November 2005; accepted 27 April 2006Available online 12 June 2006
Bundling is a very popular sales-promotion tool, in which a critical issue is to decide what products should be sold together in order toimprove sales. Traditionally, this decision is based on the order data collected from the points of sale. However, Internet marketing nowallows marketers to eﬃciently collect not only order data but also browsing and shopping-cart data, which provide marketers with infor-mation on the consumers’ decision-making processes, rather than only the ﬁnal shopping decisions. The present study aimed to deter-mine the value of this newly available information by comparing the performance of decision-making on product bundling based onthree types of data on online shopping behaviors. The results from a ﬁeld experiment reveal that signiﬁcantly better decisions are madeon the bundling of products when browsing and shopping-cart data are integrated than when only order data or browsing data are used.
2006 Elsevier B.V. All rights reserved.
Online behavior; Product bundling; Shopping cart; Market basket analysis; Association rules
A better understanding of customers allows better mar-keting strategies to be designed. The Internet provides mar-keters with much more data on customers, andconsequently has brought marketing management into anew age. In addition to collecting order data throughthe point of sale (POS), as in the pre-Internet age, on theInternet the entire shopping procedure of any customercan be recorded, including not only what has been ordered,but also what has been clicked or browsed and what hasbeen moved in or moved out from the shopping cart, andthe timings of all of these processes.Various studies have demonstrated the usefulness of data on shopping processes and outcomes[21,22]. Theessential diﬀerence between order data and other data ononline shopping behaviors is that the former indicates theﬁnal shopping decisions while the latter provides informa-tion on customer behavior whilst making shopping deci-sions. Moreover, a major diﬀerence between browsingand shopping-cart data is that the information embeddedin the latter is more closely related to the ﬁnal shoppingdecision. Data on customer browsing behavior havebeen explored in many studies, such as to ﬁnd path travelpatterns[6,12], website traﬃc, the products being browsedthe most, the hot area of a web page, and the customer pro-ﬁles based on these browsing data[30,31]. However, veryfew studies have investigated data related to customershopping carts[15,32].The usefulness of data on customer online shoppingbehaviors to learning about customers has resulted in datamining becoming an important and popular technique forexploring customer proﬁles, shopping behaviors, and otheraspects of online shopping, because the associated data setsare often huge. For example, Chen et al.integratedcustomer behavioral variables, demographic variables,and a transaction database to establish a method for min-ing changes in customer behavior. Jiao and Zhang
1567-4223/$ - see front matter
2006 Elsevier B.V. All rights reserved.doi:10.1016/j.elerap.2006.04.006
Corresponding author. Tel.: +886 7 5254 776; fax: +886 7 5254 799.
Electronic Commerce Research and Applications 5 (2006) 295–304