What’s The Definition of Product Bundling?
Bundling is a pricing strategy used by businesses to create a package deal for customers. It’s a way of upselling products and services that go together, such as the purchase of one product with another or two products at once. Businesses can use bundling to increase sales, reduce costs and create better customer experiences.
Bundling is often used with other marketing strategies like upselling, cross-selling, and product integration. While it can be used as a standalone strategy, it often works best when combined with other tactics. Now that you know the definition of product bundling let’s dive into the advantages of such a technique.
What Are The Advantages of Product Bundling?
A product bundle can offer a wider range of benefits for a company.
- Offering product bundles can simplify this experience by grouping related products with the customer’s needs. Mixed bundles, in particular, can be executed without removing the customer’s autonomy. They can add on additional products they need, recreate the curated solution without a component part, and so on.
- Customers often prefer to achieve a cluster of satisfactions through one purchase. People buy products to solve problems or to address specific needs. If a customer has multiple needs and your product bundle addresses most or all of them, this is convenient for the customer so there are high chances that he will prefer to buy the product bundle instead of buying each product individually.
- While bundles can be presented as an option, it’s also possible to offer some products only within bundles. In the first scenario, logically, the price of the bundle should be at least a little cheaper than the total amount of the bundled products’ separate sales prices.
What About Their Techniques?
There are several techniques when selling product bundles. Specifically, there are inventory clearance bundles, gifting bundles, buy one get one bundles, cross-sell bundles, mix and match bundles, new product bundles, and pure bundles.
Inventory Clearance Bundles
In order to free up inventory space and cut your inventory holding costs, you match a faster-moving item in the inventory with a slower-moving or static one. This strategy involves offering discounts on your bundles so that customers interested in a fast-selling product would consider the entire bundle to be a great deal and be more likely to purchase it.
Gifting bundles are designed for customers who wish to present a loved one with a collection of complimentary items. Most of the time, holiday seasons are when this kind of package is marketed. For instance, the famous protect-and-hydrate gift box from the cosmetics company Estee Lauder features four complementary skincare items.
Buy One Get One Bundles
When you purchase one major item, you might save money or receive a free additional item by combining them together. This method works well for one-time purchase goods. In the case of electronics, for instance, a client who purchases a hair dryer would not return to the store to purchase the same item. Giving your consumers a free item, a discount, or a gift card can therefore encourage them to add additional things to their carts at a lower cost.
In this bundling technique, retailers sell a complementary product as an add-on to the main product. This type of bundling works well with lower-priced items, or accessories or parts that go with a more expensive item. For example, if you buy an iPhone, you would probably like to buy a case along with it. So the iPhone and case can be sold together as a bundle.
Mix and Match Bundles
The mix-and-match bundling method enables customers to select from a variety of related items. Brick and mortar retailers typically do this for quickly moving consumer goods like perishables or bulk items. Usually, you provide a few things for your consumers to select from, and they may put the selections together to make their own unique bundle.
New Product Bundles
In this technique, recently released items are promoted alongside more established or well-liked products in an effort to get clients to find your most recent offering. By combining new items with existing well-known offerings, e-commerce shops may increase the visibility of the new product. The more well-liked the current product is, the closer the customer is brought to the new product.
Pure bundling prohibits the sale of the individual items that make up the bundle separately. Instead, they can only be bought together. The options available to the consumer are constrained by this strategy.
Examples In Product Bundling
If you buy three books in one bundle, you might receive them at a discount compared to buying each book individually. This makes sense when buying related items together (for example, three textbooks), but it also works well when selling unrelated products that consumers find complementary or useful together (for example, an umbrella and raincoat).