Benefits and Drawbacks of Bundling

Orangeville, ON (Jason Mead) On MasterClass.com, I noticed an author I greatly admire was teaching a three-hour writing class. Sweet! However, I couldn’t just pay for her course when I signed up. It only had one option: $180 for a year’s worth of classes with celebrities and experts.

If I liked one class, MasterClass thought I’d love a year-long subscription. Although I browsed their offerings, not one other class caught my eye. By not allowing a la carte purchases, or a subscription like Netflix, they lost me.

Typically, when companies bundle disparate items, the collection costs less than its parts separately. Instead of buying a beach towel ($12), sunscreen ($8) and hat ($15), you can get the “Fun in the Sun” package deal for $22. This is a pretty good deal if you want all three items. Having to buy all three to get sunscreen would leave you feeling a little burned.  

1 Comment

  1. There’s not a lot of research on how consumers view bundles. Do shoppers like them? When companies bundle their products, do sales go up? Could a bundle eat into sales of existing products, bringing down overall revenues?

    In fact, consumers might value the bundle less than the individual components, so there was “negative synergy” with the bundle.

    Pure bundling might not be what entrepreneurs want. Sometimes bundling doesn’t work because the product isn’t right.

    Like

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