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PurposeThe purpose of this study is to investigate tourist in-destination consumption patterns in the context of bundled holiday packages in different resort categories to identify demand behavior that allows implementing profit-enhancing policies through attractive bundled offers for specific tourist segments.Design/methodology/approachThis study relies on data gathered in a quasi-experiment to analyze differences in consumption patterns at resort bars over a two-year period (summer 2018 and 2019) before and after the introduction of an all-inclusive soft drinks package.FindingsThe findings inform on bundling strategies according to different degrees of price consciousness and resort category. In particular, guests in upscale resorts are more likely to under-consume items included in a pre-paid bundle and significantly engage in additional spending than economy resort guests.Originality/valueThe quasi-experiment provides the actual in-destination consumption patterns and offering managerial insights and tools to tailor the form and content of bundles according to resort category.

This article is an attempt to identify the impact of the customer age (especially the Baby boomers generation and the X and the Y generation) on the assessment of incentives to buy service package. Belonging to different age generations seems to be important for the effectiveness of service packages sales – the entrance by the consumers in subsequent phases of the life cycle is related to their perception of the market offer. The starting point for the empirical part of the article was to analyze the different average scores attractiveness of the ten packages service features (incentives to purchase). Then, using multidimensional scaling authors determined the similarity or dissimilarity data on a set of applied incentives to use service packages. Visible differences indicate a different perception of the attractiveness of packages representatives of the Baby boomer generation and Y generation. Managerial implications and directions for future research are discussed.

Price bundling, the practice of selling two or more separate products in a single package at a price discount, is a tool for cross selling a given product A to customers who only buy product B and vice versa. Cross selling works by transference of consumer surplus from the higher to the lower valued product in the bundle. The mechanism of transfer of consumer surplus assumes independence of demand of the bundled products. Studies have, however, highlighted the strategic importance of relaxing the independence assumption, by considering various types of complementary relations between components of bundles [which do not necessitate the transfer of consumer surplus]. It is suggested that this strategy incentivizes the customer vis-H-vis a price discount by raising their reservation price for the bundle. Value is created through integration of the bundle components. This strategy of integrating the bundle components is known as product bundling (Stremersch and Tellis, 2002). Empirical research on the efficacy of product bundles vis-H-vis price bundles is, however, scant. In this study we investigate how consumers choose and evaluate product bundles vis-H-vis comparable price bundles by considering the image enhancement and the product enhancement product bundling strategies as proposed by Guiltinan (1987). The choice between a product bundle and an equivalent price bundle is framed as (i) a loss in utility, and (ii) an economic loss. Subsequently we investigate how the choice and evaluation of the product bundle vary across the aforementioned frames. Further, we study how individual differences in consumers chronic goal orientation [promotion focus and prevention focus] (Higgins, 1997, 1998) affect choice and evaluation of the product vis-H-vis price bundles, thereby contributing to the highly scarce literature on process oriented studies in bundling. Consideration of consumers goal orientation also serves to link the scarce process oriented studies and the popular outcome oriented ones. Finally, effects of price presentation format [consolidated or partitioned] on consumers choice and evaluation of product versus price bundles was investigated. In this research, two full factorial between subjects experiments were conducted for each of the product bundling strategies mentioned above. The sample sizes for the experiments corresponding to the Image Enhancement and the Product Enhancement product bundling strategies were 128 and 120 respectively. Respondents were gathered from around Ahmedabad and Calcutta. Consistent with the extant theoretical tenets in framing [Prospect Theory: reference dependence and the endowment effect], results from two experiments suggest: while forgoing the enhancement [utility loss] is perceived as a loss, forgoing the price discount is not perceived as a loss as much. Specifically for the image enhancement product bundling strategy it was found that prevention oriented consumers, who are more sensitive to losses as compared to the promotion oriented consumers, value the enhancement more in the fit condition [prevention orientation and utility loss] as compared to the non-fit condition [promotion orientation and economic loss]. Given the weaker effect of loss framing in the economic loss frame, we did not find any significant differences in choice and evaluation of the product bundle across prevention and promotion focused consumers. Thus the moderating effect of consumers goal orientation was established. For the product enhancement bundling strategy, goal orientation moderated the effect of price structure on consumers choice and evaluation of the product bundle. Our research directly compares the efficacy of the two fundamentally different product bundling strategies and paves the way for an integrated theory in bundling. We also contribute to the literature on process oriented research in bundling by considering the effects of consumers goal orientation. The significant interactions between consumers goal orientation and the price structure and framing manipulation establish a link between the process oriented theories on consumers goal orientation, and the outcome oriented Prospect Theory (Kahneman and Tversky, 1979). With the product bundle as the point of reference for choice and evaluation, firms can make the same look relatively more attractive with respect to a comparable price bundle and thus sell a bundle at a higher price. Price partitioning emerges as the strategy of choice for prevention oriented consumers in the Utility Loss frame and promotion oriented consumers in the Economic Loss frame.

We conduct a natural field experiment on direct and indirect transfer mechanisms for small donations. Charitable contributions are significantly higher if made indirectly, i.e. if they are tied to the purchase of a good sold at a premium, than if they are made directly. Donations are significantly higher under both transfer mechanisms if people are given a suggested reference donation.

Price bundling is one of the most prevalent marketing practices in many industries, including hospitality and travel. Virtually all types of firms in the hospitality and travel industry, from suppliers such as hotels and airlines to intermediaries such as travel agents, are encouraging customers to purchase travel “packages” rather than a single component of travel to save money and streamline the purchasing process. The purpose of this research is to determine whether the practice of price bundling by online travel agents results in actual monetary savings for consumers (i.e., lower prices) relative to the prices charged by individual service providers (i.e., hotels and airlines) through their own online Web sites. The results indicate that there are monetary savings in the form of lower prices realized by consumers who purchase bundled offerings from online travel agents, and there is an interaction effect between channel and hotel class. 403-412

This paper analyzes the effects of tying arrangements on market competition and social welfare in two-sided markets when economic agents can engage in multi-homing; that is, they can participate in multiple platforms in order to reap maximal network benefits. The model shows that tying induces more consumers to multi-home and makes platform-specific exclusive contents available to more consumers, which is also beneficial to content providers. As a result, tying can be welfare-enhancing if multi-homing is allowed, even in cases where its welfare impacts are negative in the absence of multi-homing. The analysis thus can have important implications for recent antitrust cases in industries where multi-homing is prevalent.

This paper studies the relation between Bayesian mechanism de- sign and the Ramsey-Boiteux approach to the provision and pricing of excludable public goods. For a large economy with private informa- tion about individual preferences, the two approaches are shown to be equivalent if and only if, in addition to incentive compatibility and par- ticipation constraints, the …nal allocation of private-good consumption and admission tickets to public goods satis…es a condition of renegoti- ation proofness. Without this condition, a mechanism involving mixed bundling, i.e. combination tickets at a discount, is superior.

We apply and extend the cost-based approach to bundling and tying under competition developed in Evans and Salinger (2004) to over-the-counter pain relievers and cold medicines. We document that consumers pay much less for tablets with multiple ingredients than they would if they bought tablets with each ingredient separately. We then decompose the sources of these savings into marginal cost savings and a component that reflects fixed costs of product offerings. The analysis both documents substantial economies of bundling and illustrates the sort of cost analysis that is necessary for understanding tying.

Tying arrangements recently have been a major and contentious issue in many high profile antitrust cases in the US and Europe. Examples include the Microsoft case, the Visa and MasterCard case, and the proposed GE/Honeywell merger to name a few. This paper conducts a selective review of the recent developments in the analysis of tying arrangements. It also discusses relevant antitrust cases concerned with tying arrangements in light of recent theoretical advances in this area.

Software platforms are a critical component of the computer systems underpinning leading? edge products ranging from third? generation mobile phones to video games. After describing some key economic features of computer systems and software platforms, the paper presents case studies of personal computers, video games, personal digital assistants, smart mobile phones, and digital content devices. It then compares several economic aspects of these businesses including their industry evolution, pricing structures, and degrees of integration.

We apply and extend the cost-based approach to bundling and tying under competition developed in Evans and Salinger (2004a) to over-the-counter pain relievers and cold medicines. We document that consumers pay much less for tablets with multiple ingredients than they would to buy tablets with each ingredient separately. We then decompose the sources of these savings into marginal cost savings and a component that reflects fixed costs of product offerings. The analysis both documents substantial economies of bundling and illustrates the sort of cost analysis that is necessary for understanding tying.

Bargaining over two issues as a bundle permits credible cheap talk about their relative importance even when interests are directly opposed on each issue. The resulting communication gains can exceed the gains from bundling previously identified in the monopoly pricing literature.

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.

The current report presents a theoretical and empirical investigation of a pricing method called price bundling and its application in retail banking in Sweden and Finland. Price bundling was found to be an appropriate model for banks since by price bundling it was possible to reduce selling, marketing and production/delivery costs and therefore to utilise the banks' fixed capacity more efficiently. The greatest potential in price bundling is, however, the way it stimulates demand for additional services. Banks can take advantage of this by introducing new complementary services to the customers since it is likely to reduce customers' uncertainty and to increase their awareness of the bank's services. Price bundling also creates switching costs for the customer which means that their loyalty may increase. From a competetive point of view price bundling was found out to be beneficial since it diminishes competition between the banks and therefore will lead to higher profit potentials in the market. Retail banks in Sweden and Finland use price bundling extensively. Bundles seemed to be more like a reward system for customers' existing demand rather than introducing new demand. Thereby price bundling would in the first place affect customers' loyalty, and sales only indirectly. Another base model was a bundle around a current account and most cost efficient transaction services to minimise banks' costs. The author wants to thank Jan Wallanders och Tom Hedelius stiftelse för samhällsvetenskaplig forskning for financing this project.

Price Bundling, which is the practice of marketing two or more products or services in a single ‘package’ for a single price, has been described as a potent method of maximising the profit potential of an organisation. It is a form of price discrimination which essentially enables the marketer to charge prices which are as close as possible to the maximum amount that consumers are willing to pay. It stimulates demand for the weaker components of the bundle and so provides access to economies of scope while simultaneously enhancing consumer value perceptions through increased savings and convenience elements. To implement a price bundling strategy, specific knowledge of the reservation prices of the various market segments for each element of a potential bundle is required. A reservation price is the maximum amount of money that a consumer is willing to pay for a certain product or service. Reservation price information can often be difficult to obtain as respondents themselves are not always able to accurately declare how much they are willing to pay. Conjoint analysis has been identified as a statistical technique which can overcome this problem. The choice based variant of conjoint analysis, used in this study, provides a means by which to simulate the choices in a market place. A relative value for each product attribute is determined from the respondents choice information. This study explored the application of price bundling in the context of a tourism product. The product chosen for the purposes of the study was weekend breaks. The questionnaire was administered to 268 respondents at a consumer holiday fair. Respondents were required to choose preferred bundles from arrays of tourism bundles. Analysis of the data identified a distinct order of preference for the attributes under investigation. Choices seem to have been dominated by a very strong preference for lower priced bundles, with affordable grade three star accommodation in central city locations. The strong influence of accommodation grade is understandable considering the large price differentials incurred by higher graded hotels. The most and least preferred bundles were identified alongside the dominant tradeoffs which occurred between these two extremes.