Technical Note on Bundling
(7 pages of text)
This technical note explores the working mechanisms of bundling—the practice of selling two or more separate products or services as one package. The note also explains various types of bundles, including pure bundles, price bundles, and product bundles. The note uses graphical illustrations, analytical techniques, and spreadsheet simulations to discuss the working principles of each bundling type and the economic logic of bundling. Also discussed are the strategic marketing implications of bundling and the relative efficacies of various bundling strategies.
This technical note is suitable for use in core courses in marketing and microeconomics. After completion of the case, students will have an understanding of the working principles of bundling and the concepts of price discrimination and segmentation.
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