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Price bundling

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  • Simon, Hermann
  • Fassnacht, Martin

Abstract

Price bundling is a potentially powerful method to exploit profit potentials and to maximize profits in any multi-product company. In this presentation of the technique, Hermann Simon and Martin Fassnacht explain that the heterogeneity of demand is reduced and customers' willingness to pay is used to the company's advantage. Profit increases are likely to be in the range of 10 to 30%. Antitrust aspects should be observed, particularly if the company is in a dominant market position. Competitive dynamics may make unbundling necessary.

Suggested Citation

  • Simon, Hermann & Fassnacht, Martin, 1993. "Price bundling," European Management Journal, Elsevier, vol. 11(4), pages 403-411, December.
    • Handle: RePEc:eee:eurman:v:11:y:1993:i:4:p:403-411
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    Cited by:

    1. Huber, Sebastian & Spinler, Stefan, 2012. "Pricing of full-service repair contracts," European Journal of Operational Research, Elsevier, vol. 222(1), pages 113-121.

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