bundling

Bundling, also called price bundling, is the combined offer of at least two products or services at a single price.

Different products / independent partial services are combined into a bundle and sold as a combined product / total service. In general, the all-in bundled price is lower than if the individual components of the bundle were sold separately. In practice, bundling is widely used:

• Online providers such as Amazon combine several products into a complete package (e.g. Amazon Alexa and Smart Home Lamp from Phillips Hue).
• Fast food suppliers such as McDonalds offer meals where the meal price is cheaper than the total individual prices of the included items.
• Many cinema operators offer packages that include popcorn and drinks in addition to the admission ticket.

Companies can pursue different objectives with price bundling:

• Competitive differentiation: Simple products become more difficult for the customer to compare by combining them.
• Customer loyalty: The combined sale of high-maintenance products and services increases long-term customer loyalty.
• Cost reduction: By combining several products, costs for marketing and sales can be saved.
• Price image: Paying a single price can reduce the perceived negative customer benefit of paying.