Bundle Up Before You Go: Toward a Bundle Approach to Product Categorization

Abstract

Market participants, such as producers and audiences, often use a list of categories to label, evaluate, or promote products. Extant category research focuses overwhelmingly on a category's social properties and connectivity to explain why a category is used to describe a product. However, categories often cluster together, and little is known about how this clustering affects the appearance of a category in the description of a product. In this article, we define the easily reproducible clustering of categories as a category bundle and develop a novel measurement, bundle congruence, to measure the fitness of the category bundle. We argue that audiences employ bundle congruence to choose or exclude categories. In markets in which audiences dominate product categorization, a category's bundle congruence in a product's descriptions increases the probability that it is used for the product. Moreover, the overall bundle congruence of a product elevates the economic returns of the focal product. Our arguments are supported by an empirical analysis of feature films produced in North America. This study not only enriches the understanding of the bundle structure of the category system but also provides a novel explanation of why category spanning remains ubiquitous, despite the findings of previous studies, which assert that category-straddling products are prone to be punished financially.