 Bundling Models in Retail Banking Sector /in Slovakia/Microeconomics from University Library of Munich, Germany Abstract: The current overview of bundling theory is combined with author's experiences of its practical application into several step-by-step guidelines. These models consist of the whole process of the construction and performance appraisal of product bundles in retail banking sector and show how the system of bundles provide an extra value for a customer and profit for a bank as well. Application of bundling strategies in retail banking reduces a bank's variable cost for selling, secures both stable and higher income by periodical fees for covering high fix running costs as well. The biggest opportunity for current retail banking is building a strong relationship with customer by cross- selling extra bundled products, which leads to a higher retention and loyalty of customers. A bank's point of view is combined with customer perceptions, because understanding of current behavior and a prediction of future decision-making process of clients /current clients or prospects/ is fundamental for a success of bundled products. A product bundle as a bilateral contract must guarantee a possibility to obtain extra profit /or saving/ for each partner /bank versus customer/ at agreed price level /or discount/, but as well as both of them must accept some uncertainty or risk of lost. Finding a solution for problems of number, content and price of product bundles generate a strong competition advantage in such a though competition market with easy- copied products as retail banking sector. Empirical findings prove the paradox, that product bundles with discounted price for customer generate extra profit for bank, hand in hand with a still increasing customer satisfaction. Clever construction of bundles and bounded rationality decision making of customer offers a solution of 'profitable discounts' not only for a banking sector, but at least for sector of services. These models face mathematical and statistical methods with business case's needs and test their abilities to reach goals required in every day live. Keywords: bundle of products; bundling; pricing; retail; banking; pricing strategy; customer profitability (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:wpa:wuwpmi:0404006 Access Statistics for this paper More papers in Microeconomics from University Library of Munich, Germany |
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