A Lesson on Bundle Pricing for Businesses

Consider this; hamburger-fries-drink combo at a fast-food joint, an internet-phone-cable bundle from a telecommunication company, an all-in-one reading materials from stationery shops, etc. What all of these have in common is that they’re emphasizing the bundle packages and the reduced price that they come in. 

Bundle Pricing

It refers to a strategy that is used for putting two or more products in a bundle and selling them in the form of one combined package. Consumers love this idea because then they can purchase multiple items at a reduced cost than if they purchased the same items separately. Hence, that is advantageous for a business owner like yourself since it can attract more customers, sell products or services that are less popular, and thus create brand loyalty.

You will often find bundle deals on e-commerce platforms such as Amazon, where retailers often sell multiple products in a bundle at attractive rates. Examples of common bundle pricing include selling a camera along with various accessories such as lenses, memory cards, camera straps, etc. Others include internet, home phones, and cable TV services in a bundle from the likes of telecommunication companies such as Xfinity, which you can visit now to peruse over the Xfinity bundles designed to best suit your needs. 

Types of Bundle Pricing

The five types of bundle pricing are as follows;

  • Pure Bundling. When products/services are only sold together. The customer cannot purchase some of the items in the bundles separately and must buy them as a package.  Businesses find this to be a great tactic for a highly popular product, but also for the least attractive products as well. 
  • Joint Bundling. When two or more products are sold to customers for a single bundled price.
  • Leader Bundling. When a leader product (popular item or service) is sold for a discount when bundled together with non-leader items.
  • Mixed Bundling. When customers are encouraged to purchase either a bundle or separate products. Telecommunication companies offer mixed bundling, where customers can purchase a complete package of internet, cable, and telephone but they can also buy them separately. However, buying these services separately would be more expensive than buying them in a package.

Advantages of Bundle Pricing

Bundle pricing is a highly effective pricing tool, and the following will describe why you should apply bundle pricing to your products or services. 

  • Lower Marketing/Selling Costs. Selling products can be quite expensive for businesses, what with having to deal with the costs of promotional materials, shipping, affiliate commissions, managing total pre-product costs, etc. But bundling can help them save on a lot of such expenses.
  • Subsidized Long-Tail Product Development. Another big advantage to bundle pricing is that long-tail product development is subsidized by basic users. However, most customers will only utilize a small number of goods/services, but they will turn out to be the most dedicated customers.
  • Personalized Pricing. Your customers appreciate personalized experiences, and they are more likely to frequent a brand if the company tailors to their needs. 

Additional market research will go on to show how the classification of customers can be done into two groups; customers who are more focused on pricing, and customers who value dynamism. Whatever the customer’s preference, designing the bundles according to their preference is a great way to retain customer loyalty. 

  • Output Simplification. It requires a lot of work to either produce any goods or services or simply execute a transaction. But if businesses can simplify their output by half in bundling, then they can save themselves a lot of time and money, and use the required resources to better use.
  • Speed Transaction Process. More often than not, people don’t realize how long it can take for a transaction of just one product, and that is true for something as simple as getting a cheeseburger or something as intricate as signing up for a satellite internet connection. 

With bundling, the overall transaction process can be sped up, hence, building the business-customer relationship.

  • Reduced Pricing Disputes. With bundling, pricing disputes with the customers can be eliminated, and in turn, helping businesses to avoid bad publicity on social media. If customers are aware of all things included in a bundle and its fixed pricing, then there is little room for dispute from the customers’ ends.

Final Thoughts

Whatever kind of retail industry you belong to, the benefits of having bundling options are more than enough for you to introduce your products or services. It can help the cost-pricing and value-based pricing of your business. 

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