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Application of Price Bundling Strategies in Retail Banking in Europe

Author

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  • Mankila, Merja

    (Department of Business Administration, School of Economics and Commercial Law, Göteborg University)

Abstract

Application 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.

Suggested Citation

  • Mankila, Merja, 2001. "Application of Price Bundling Strategies in Retail Banking in Europe," FE rapport 2001-379, University of Gothenburg, Department of Business Administration.
    • Handle: RePEc:hhb:gunwba:2001_379
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    Cited by:

    1. 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.

    More about this item

    Keywords

    Price bundling; strategy; competition; competitive advantage; retail banking;
    All these keywords.

    JEL classification:

    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - 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; Personnel Economics - - Business Economics - - - Other

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