Bundling

Bundling comes from the word bundle, which means to merge together. By combining several offers as one package, the purpose is to increase the attractiveness of the offer. It could lead to a more affordable price or simply make it easier for the buyer. Common bundling might consist of buying two phone subscription plans and receiving a phone with the purchase. The subscription sometimes also contains other benefits such as one year of free Spotify Premium. Other examples are “Buy 3 games, only pay for 2” or “book two nights and we will include a spa treatment” and so on. When bundling, the marginal income is usually reduced for the different offers included in the bundle, which means this kind of strategy isn’t always a given.

So when should a company choose to “bundle” an offer?
There is no definite answer to this question, but generally the probability for bundling will increase when there is high competition in a market. If you have a unique market position with your offer, it usually doesn’t pay off to combine this offer with another one to maintain the margins. Sometimes it is all about bundling in different phases, for example starting off with an individual offer and when the demands of the market begin to fade, packaging the offer with a different one.