Product and Service Bundling

Product or service Bundling is defined as combining two or more products/services with a reward benefit for the customer that takes up the combined product/service set.

It sounds so simple to create product and service Bundles – combine some products into a package and give customers a discount for taking it up and the task is done. The result is higher revenue, lower operational costs and better profits, i.e. 1+1=3; the synergistic profitability impact.

However, there are many unique issues in developing and implementing a bundling strategy that will ultimately drive success or failure. As bundling involves combining a range of products, it exacerbates the complexity and importance of resolving these issues and challenges in order to reap the potential profits from bundling. What appears to be a winning profit strategy could end up with disastrous results to a company’s bottom line if not managed correctly.

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