Title of the book The Convenience and Bundling Trends Chapter 5 Ľudmila Nagyová – Ingrida Košičiarová

Definition of Convenience Convenience is an attribute of a food product for which the demand is increasing. The result of many studies done on the issue of convenience is that convenience is just as important as attributes like taste, health and price in determining a consumer’s preference towards a food-product. We can find many different meanings of the word convenience, referring to time utilisation, accessibility, portability and handiness. The increasing importance of convenience in food products is manifested in the development of selected product lines or ranges: the greater importance of both frozen and chilled products and dried ready-made products is noteworthy – the brands from companies such as Unilever, Dr. Oetker or Nestlé are the market leaders within these product groups in Europe, predominantly fresh ranges, which are generally not branded but are strongly influenced by the retailer, e.g. salads, sandwiches or other prepared products – these fresh convenience ranges correspond to the desire of retailers to add value, which shows that both retailers and manufacturers of branded goods have recognised the increasing significance of convenience and endeavour to position their brands in this sector.

Convenience in the context of good/Convenience food Convenience in the context of food can be defined in terms of reductions in time and effort (even if it is mental or physical effort) spent by buying, storing, preparing and consuming the food. Convenience foods are then defined as any fully or partially prepared food in which significant preparation time, culinary skills or energy inputs have been transferred from the homemaker’s kitchen to the food processor and distributor. Convenience food can include products such as candy, beverages such as soft drinks, juices and milk, fast food, nuts, fruits and vegetables in fresh or preserved states, processed meats and cheeses, and canned products such as soups and pasta dishes. Additional convenience foods include frozen pizza and cookies (Rees 2005), or chips and pretzels. These products are often sold in portion-controlled, single-serving packaging designed for portability and they can be sold as hot ready-to-eat meals, room temperature products or as refrigerated or frozen products that require little preparation (usually microwave or oven-ready).

Factors leading to the convenience The convenience trend symbolizes the increased time pressure, stress and work-life balance problems that consumers are experiencing, which are also shown in the Figure.

Benefits and drawbacks of convenience food Benefits: reduction in the time required for preparation and/or the cooking time; variety in the market; information on the package; convenience to carry, stack and store; longer shelf life; easy in the storage; help in saving the labour; reduction of spoilage of the food; permanent availability, as well the consistence in taste, texture and taste. Drawbacks: some convenience food provide only little of nutritional value; most of convenience food have excessive amounts of sodium, sugar, saturated fats; loaded with preservatives (e.g. MSG), unnatural colouring, added flavouring, etc.; some processed food is filled with indiscernible parts and pieces; aded synthetic vitamins and minerals ; regular eating of processed food can increase the risk of diseases (e.g. cancer, obesity, diabetes etc.).

Definition of Bundling The most common definition of bundling comes from the year 2002 and it says that bundling is a sale of two or more separate products in one package. Its formulation however was not simple. Term Definition Examples Bundling Bundling is the sale of two or more separate products in one package. multipacks of beer, juices, soft drinks; 1 kg pack of apples Price bundling Price bundling is the sale of two or more separate products as a discount, without any integration of the products. variety pack of cereals, lunchtime menu in a restaurant Product bundling Product bundling is the integration and sale of two or more separate products at any price. Starbucks Pure bundling Pure bundling is a strategy in which a firm sells only the bundle and not (all) the products separately.   Mixed bundling Mixed bundling is a strategy in which a firm sells both the bundle and (all) the products separately. fast food or cinema combos

Implementation forms of bundling

Mostly used forms of bundling pure bundling, which refers to the practice of selling two or more discrete products only as part of a bundle, mixed bundling, which refers to the practice of selling a bundle of the products as well as the individual products themselves

Price discrimination First-degree price discrimination – also known as perfect price discrimination, where the supplier of some product can sell it to every customer at a different price. The prices for different units of the product can also vary from customer to customer. Second-degree price discrimination – the supplier sells different units of a product for different prices, but every customer who buys the same amount of the product pays the same price. It means that the price depends on the amount of the purchased product. Third-degree price discrimination – occurs when the supplier sells some product to different customer groups or segment at different prices, but every unit of the product sold to a group sells for the same price. This is the most common form of price discrimination, where examples are student discounts, senior discounts etc. Product bundling is a form of third-degree price discrimination, where the price depends on how much the customers are willing to pay for sold products/services.

Summary Convenience is multi-faceted and will continue to evolve and converge with other trends to meet the customer´s needs and the demands of society. The convenience trend is supplemented by the bundling trend. “Bundling plays an increasingly important role in many industries and some companies even build their business strategies on bundling.” Bundling is based on the convenience trend, because the customers can save time by buying two or more products packed together instead of having to think and buy them separately. To rise to the challenge of meeting customers' need for greater convenience, retailers must offer products that provide speed and ease. In this chapter we discussed the following topics: Convenience – its definition, basic forms, factors leading to it, and benefits Bundling – its definition, basic forms and benefits Convenience and bundling trends