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