Estimating the price range and the effect of price bundling strategies

Sérgio Dominique-Ferreira and Cristina Antunes

European Journal of Management and Business Economics, 2019, vol. 29, issue 2, 166-181

Abstract: Purpose - The purpose of this paper is to investigate and identify the price sensitivity of consumers of three- and five-star hotels and to determine the impact of bundling strategies on consumers’ price sensitivity. Design/methodology/approach - To calculate price sensitivity, authors apply the van Westendorp’s price sensitivity meter (PSM). To understand the impact of bundling strategies, univariate and bivariate techniques are applied. Findings - PSM results reveal the optimal prices and the range of acceptable prices for three- and five-star hotel. The bundling strategy results reveal that five-star customers are less sensitive to mixed-leader bundling. Regarding mixed-joint bundling, managers could improve sales through bundling strategies if they selected an attractive service (e.g. restaurants). Practical implications - Findings assist hotel managers to understand the different price sensitivities, according to the hotel typology. Managers can manage prices without the risk of losing market share or revenue. The results help managers in deciding which bundling strategies they can create, as well as the services to be included to achieve highest profitability. Originality/value - No research to date to the best of the authors’ knowledge has attempted to understand and compare the role of bundling strategies in three- and five-stars hotels. Moreover, no research has attempted to measure and compare customers’ price sensitivity of three- and five-stars hotels.

Keywords: Hospitality management; Price; Price sensitivity; Bundling strategies; Pricing strategies (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:ejmbep:ejmbe-04-2019-0066

DOI: 10.1108/EJMBE-04-2019-0066

Access Statistics for this article

European Journal of Management and Business Economics is currently edited by Enrique Bigne

More articles in European Journal of Management and Business Economics from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().