Final answer:
Golf Town's offering of a box of fifteen golf balls for the price of twelve is an example of a bonus pack, which provides more value to customers. This strategy is part of monopolistic competition in the golf industry, where differentiation is key, despite many balls being indistinguishable to the average amateur player. Economists define such deals as creating consumer surplus for shoppers.
Step-by-step explanation:
If Golf Town is offering a box of fifteen PinNaCle golf balls for the price of twelve balls, this promotion is an example of a bonus pack. A bonus pack deal provides extra value to the consumer by offering more of a product for the same price, thereby encouraging the purchase and giving the feeling of a 'good deal'. This is a common marketing strategy used in various industries to increase sales and attract customers.
In the context of the golf industry, where retailers compete in a monopolistically competitive market, these types of promotions are crucial. With annual retail sales of golf balls around the $500 million mark, manufacturers and retailers are incentivized to differentiate their products to capture more market share. For professional players like Tiger Woods, the differences in golf ball features may be noticeable and significant. However, for the average amateur golfer, the differences between many golf balls may not be discernible, especially when considering the fate of numerous balls lost to hazards every summer.
The concept of bundling, while related, is slightly different from a bonus pack. Bundling combines two or more products or services for a lump sum, often at a discounted rate, as compared to buying them separately. This is common in sectors like telecommunications, where services like cable, internet, and phone can be bundled together. Contrary to this, a bonus pack doesn't combine separate products or services but rather increases the quantity of the purchased product, as seen in the Golf Town promotion.
When an economist describes a scenario where a shopper gets a 'good deal', this is commonly referred to as consumer surplus. Consumer surplus happens when consumers are able to purchase a product or service for less than the maximum price they would be willing to pay, thereby gaining additional satisfaction or benefit from the transaction.