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Country/Service Bundling in International Tourism: Criteria for the Selection of an Efficient Bundle Mix and Allocation of Joint Revenues

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  • Yoram Kinberg

    (Chase Manhattan Bank)

  • Ephraim F Sudit

    (Rutgers University)

Abstract

This paper addresses key aspects of commodity bundling decisions in business enterprises both in general and as they relate to the International Tourism industry in particular. The considerable importance and complexity of bundle mix and bundle pricing decisions on the transportation, sightseeing, and resort level of Tourism are discussed. The authors develop the basic theoretical structure and framework underlying bundling decisions and define key elements of required decision information. The complexity of the determination of optimal bundling mixes in a multiservice environment is demonstrated, and an algorithm which greatly facilitates such determination under certain assumptions is outlined and discussed. Finally, the problem of allocating joint bundle profits among associated profit or cost centers is reviewed in detail. A number of alternative allocation criteria based on commonly acceptable notions of bargaining power and fairness are proposed. Their relevance and applicability to international tourism and tourist enterprises are discussed.© 1979 JIBS. Journal of International Business Studies (1979) 10, 37–50

Suggested Citation

  • Yoram Kinberg & Ephraim F Sudit, 1979. "Country/Service Bundling in International Tourism: Criteria for the Selection of an Efficient Bundle Mix and Allocation of Joint Revenues," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 10(2), pages 51-62, June.
    • Handle: RePEc:pal:jintbs:v:10:y:1979:i:2:p:51-62
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    Cited by:

    1. Ali Azadeh & Hassan Songhori & Nima Salehi, 2017. "A unique optimization model for deterministic bundle pricing of two products with limited stock," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 8(2), pages 1154-1160, November.
    2. Ferreira, Kevin D. & Wu, Desheng Dash, 2011. "An integrated product planning model for pricing and bundle selection using Markov decision processes and data envelope analysis," International Journal of Production Economics, Elsevier, vol. 134(1), pages 95-107, November.
    3. Paulo Martins & Paula Rodrigues & Carlos Martins & Teresa Barros & Nelson Duarte & Rebecca Kechen Dong & Yiyi Liao & Ubaldo Comite & Xiaoguang Yue, 2021. "Preference between Individual Products and Bundles: Effects of Complementary, Price, and Discount Level in Portugal," JRFM, MDPI, vol. 14(5), pages 1-19, April.
    4. Panou, Konstantinos & Kapros, Seraphim & Polydoropoulou, Amalia, 2015. "How service bundling can increase the competitiveness of low market share transportation services," Research in Transportation Economics, Elsevier, vol. 49(C), pages 22-35.

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