Bundle Pricing

Example

An audio equipment store sets system prices for audio kits, including amplifier, speakers plus various media and control devices.

A soap manufacturer produces and prices multi-packs that offer better value per soap bar.

A computer company sells a standard bundle of computer, printer, and other hardware and software, plus 'free' installation.

Discussion

When people buy items they use them to gain value in some form, for example by providing entertainment or fixing a problem. If all the items to create that value are sold together, this itself is a value-add and can make it seem worth buying all of the items together.

There is also a perception that when buying in bulk is much cheaper. For the suppliers, bulk-sales can be more profitable even when unit costs are less, as there are savings on packaging and distribution as well as the overall revenue increase.

When competitors sell bundles, it is important to understand the sales dynamics of these and hence to be able to compete for the bundle market as well as any individual-item sales.

When costs associated with selling parts and individual items are high, it may make sense to only sell in bundles or other grouping. For example you may decide not to sell spare parts, shipping only complete items or kits.

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Bundle Pricing

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Example

Discussion

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Disciplines

Techniques

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Explanations

Theories

And