Bundling / Classes of Service / pricing / Unbundling / Usage Based Pricing

Unbundling The Product For Micro-Targeting

PowerFrameworks is a website that offers Microsoft PowerPoint frameworks for visually showing concepts. Their pricing strategy stands out as an example of pricing done right. Their pricing is a very good example of product unbundling and pricing the unbundled components separately. What they sell it as a subscription service with recurring revenue. Their pricing is … Continue reading

Bundling / Reference Price / Unbundling

Going from unbundled to bundled

The reference price experiment my colleagues and I conducted recently, proved our hypothesis that people do not like unbundled pricing because their reference price for these was $0.00 but can be nudged towards unbundled pricing if their reference price can be improved. But what if the marketer who offered unbundled option wants to shift the … Continue reading

Behavioral Economics / Bundling / Classes of Service

The Pricing Story

This study has been focusing on unbundling, doing it as a strategy and not as a reaction to economic conditions. I recently read an article by author Seth Godin, who recommended changing the pricing schemes for certain services.  He recommends bundling for previously unbundled services and unbundling for some. One good example of unbundling that … Continue reading

Bundling / Menu Cost / Unbundling / Variable Costs

The Effect of Costs and Economies of Scale on Bundling

Stremersch and Tellis make this proposition in their paper on Strategic Bundling. P10: The profitability of price bundling is likely to be higher than that of unbundling (a) the higher the relative contribution margin and (b) the stronger the economies of scale or scope. Relative contribution margin is the ratio of price less variable cost … Continue reading

Bundling / Definition / Unbundling

Getting The Definitions Right

This is an attempt to get a more precise definition of  Bundling and Unbundling.  To add to the definition mix, there are different two kinds of bundling, Product and Price Bundling. The definitions here are based on “Strategic Bundling of Products and Services” by Stefan Stremersch & Gerard J. Tellis. The definitions are lifted verbatim … Continue reading