Open AccessJournal Article
Bundling--new products, new markets, low risk.
G D Eppen,W A Hanson,R K Martin +2 more
TLDR
Eppen, Hanson, and Martin this paper argue that the best approach is to treat bundles not as marketing gimmicks but as new products, and they offer seven guidelines for creating competitive bundles and a framework for implementing them.Abstract:
It has long been a marketing axiom that customers buy bundles of satisfaction, not products. It follows, then, that they'll respond to certain combinations of products and services--air conditioners with free installation, combinations of software packages, or season tickets with parking privileges. The difficulty is in devising the bundles that both appeal to consumers and give cost or demand enhancing benefits to the producer. Eppen, Hanson, and Martin argue that the best approach is to treat bundles not as marketing gimmicks but as new products. They offer seven guidelines for creating competitive bundles and a framework for implementing them.read more
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Estimating Correlated Valuations for Data-Driven Bundle Pricing with Copula Inference
TL;DR: This work develops a statistically consistent and efficient inference procedure for fitting a copula model over the latent consumer valuations, using only transaction data, and shows that the joint valuation estimation can be integrated into a choice modeling framework which is popular in many industries.
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Product bundling: theory and application
TL;DR: In this paper, the authors integrate the existing microeconomic and marketing literature on product bundling in a comprehensive framework, which allows them to point out the lacunas and present a new method to compute bundle reservation prices on the basis of paired comparison choice data.