 Product bundling: Theory and applicationWorking Papers from University of Antwerp, Faculty of Business and Economics Abstract: For more than three decades, microeconomists have been studying the conditions under which product bundling is a remunerative sales strategy. Only recently, bundling aroused the interest of marketing academics. Until now, no serious attempts have been made to integrate the existing research streams in the bundling literature. A first merit of this paper is the integration of the existing microeconomic and marketing literature on product bundling in a comprehensive framework, which allows us to point out the lacunas. It turns out that little has been said about the actual implementation of a bundling strategy. One of the hardly addressed issues is the derivation of bundle reservation prices, which are indispensable when determining the optimal bundle composition and price. Therefore, as a second merit, we present a new method to compute bundle reservation prices on the basis of paired comparison choice data and the latent class binomial logit methodology. We then apply our method to the case of multiple textbook bundles and use an existing LP bundling procedure to compute the optimal bundle compositions and prices. Keywords: Product bundling; Optimal bundle composition; Pricing; Linear programming; Reservation prices; Conjoint analysis; Logit analysis; Latent class estimation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ant:wpaper:1999027 Access Statistics for this paper More papers in Working Papers from University of Antwerp, Faculty of Business and Economics Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.