Application of Price Bundling Strategies in Retail Banking in Europe
AbstractApplication of price bundling strategies in retail banking in Europe is a report based on an empirical study of price bundling practices in Southern, Central and Northern Europe. The current report defines three core price bundling models that are in one form or another applied by the interviewed banks. The models are cost efficiency bundling, cross-selling bundling and loyalty bundling. Price bundling has been started to apply in retail banking in Europe in the 1980’s. Price bundling is regarded as an important strategy in the intensified competitive market and it is also supposed to satisfy increasingly sophisticated customers in the future. The price bundles that the interviewed banks apply can be explained by the competitive conditions in the retail banking markets concerning both what the banks aim at, their competitive advantages, and the market factors. Banks in different parts of Europe have different competitive advantages that they find important when pursuing their price bundling strategies. Common to all the markets is the threat of customers to switch banks, which was identified as the main driving force in competition.
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Bibliographic InfoPaper provided by University of Gothenburg, Department of Business Administration in its series FE rapport with number 2001-379.
Length: 37 pages
Date of creation: 23 Feb 2001
Date of revision:
Contact details of provider:
Postal: Dept of Business Adminstration, School of Business, Economics and Law, University of Gothenburg, Box 610, SE 405 30 Göteborg, Sweden
Web page: http://www.handels.gu.se/fek/
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Price bundling; strategy; competition; competitive advantage; retail banking;
Find related papers by JEL classification:
- D49 - Microeconomics - - Market Structure and Pricing - - - Other
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- M29 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-02-27 (All new papers)
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- J.W.B. Bos & J.A.J. Draulans & D. van den Kommer & B.A. Verhoef, 2006. "An international scorecard for measuring bank performance: The case of Dutch banks," DNB Occasional Studies 402, Netherlands Central Bank, Research Department.
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