What are the examples you can find in your everyday lives that represent a seller’s use of price bundles? essay
Answer.
There are two types of price bundling: pure and mixed. Pure bundling takes place when two separate products (commonly matching each other) are sold as a package only, and mixed bundling takes place when these products can be also bought separately, but at higher prices. A good example of mixed price bundling is the package offered by Walmart in 2011: Xbox 360 Super elite bundle, which includes the game console itself, Final Fantasy 13, hard drive for Xbox, wireless controllers, headset, Ethernet cable, face plate for Final Fantasy, and composite AV cable. Most customers are likely to be interested to get several of these items for Xbox anyway, so this offer is a great choice for Final Fantasy fans. Value meals at McDonals and Burger King are also good examples of mixed bundling. Examples of price bundling are the sales of cosmetics in packages: for example, douche gel is often bundled with shampoo of the same brand. Overall, price bundling is frequently used by almost all trademarks to increase demand for their products.
Question 2. How many of these different price bundle offers seem to follow the principles developed in this chapter? Which principles?
Answer.
For both pure and mixed bundling, perceived benefit of the bundled package is greater than the benefits of every product separately, due to reduced prices and greater attractiveness of matching products, and therefore the use of price bundling increases the perceived value through increasing the perceived acquisition value. In addition to that, the costs of packaging and transporting bundled products are lower compared to the purchase of individual products, and, therefore, the perceived transaction value is reduced. The reduction of perceived transaction value leads to further increase of perceived value, and increases customer’s motivation to get the bundled offer. For mixed offers, buyers exposed initially to higher prices, will perceive subsequently lower prices as less expensive, which also increases the customers’ perception of the package’s value.
Question 3. What suggestions can you make to improve the practice of price bundling? Why?
Answer.
Instead of standards bundles, there can be different bundles offered at different time frames; for example, creating different bundles of the week and bundles of the month will attract more customers due to greater diversity. For high-tech products, special bundles might include installation and support, or documentation assisting the user on how to get the system installed and set up. Bundling multiple packs might also be a good idea, because many customers prefer bulk purchases; for example, bundling packages of douche gel and shampoo in 4 or 6 items per offer might increase the interest of such customers. All these suggestions are aimed at increasing the benefits of the product offered to the customer and to decreasing the “sacrifice”, or perceived acquisition value.
