Bundling is a market strategy that comprises offering numerous products for sale as one combined product (Lloyd, 2016). It is a discounting where a bundled product is sold to buyers at a lower price, as compared to when the items were sold separately. In other words, the products bundled are highly complementary and provide value to the buyer compared to if the products were purchased separately. Sellers carry out bundling when they think the characteristics of combined products or services might appeal to many buyers more as a package or bundle than separate items (Owais, 2013). Generally, businesses uphold bundling as an economic value to consumers. However, the marketing strategy offers both advantages and disadvantages to customers and companies.
One of the advantages of bundling is that it leads to more sales for businesses than when the items were sold separately (Lloyd, 2016). Secondly, packaged bundles often have lower costs, since the businesses can sell many products as one combined product with one promotional effort. The marketing strategy also gives an opportunity to get clients to pay more for products that are less-desirable if they were sold separately. For the customer, bundling offers one-stop shopping.
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One of the disadvantages of bundling is that customers do not get to choose what to bundle and might end up getting products which they do not need. Additionally, some bundling offers require customers to commit a considerable amount of time for them to get special pricing. Early termination fees could apply if the customer terminates the contract. Usually, the promotions are for a specific duration and once the duration lasts the customer might have “sticker shock” with the amount of fee and taxes they have to pay on a combined bill.
References
Lloyd, C. (2016). Advantages of Product Bundles Sales. [Online]. Available at: https://www.homecaremag.com/operations-marketing/april-2016/advantages-product-bundle-sales . Accessed 5 th Feb 2019.
Owais, S. (2012). New Product Development & Pricing Strategies. [Online]. Available at: https://www.slideshare.net/SyedAhmedOwais/new-product-development-final-02 . Accessed 5 th Feb 2019.
