This paper analyzes the effects of three bundling strategies – unbundling, mixed bundling, and pure bundling – on profit and sales, using a simulation study based on a model by Schmalensee (1984). The analysis shows under what conditions which strategy is the most profitable, how large the profit and sales differentials are for each strategy, and what characteristics the corresponding price structures have. Based on our results, we explain the differences observed in the study and derive a set of implications for practical price structuring.
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Article provided by Wolfgang Ballwieser, Managing editor of sbr, LMU Munich School of Management, University of Munich, Ludwigstr. 28/RG, D-80539 Munich, Germany in its journal Schmalenbach Business Review.
Volume (Year): 52 (2000) Issue (Month): 2 (April) Pages: 137-159 Download reference. The following formats are available: HTML,
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