Product bundling





Product Bundling is a marketing strategy that involves offering several
products for sale as one combined product. This strategy is very common in
the software business (for example: bundle a word processor, a spreadsheet,
and a database into a single office suite). It is most successful when :

   * a) there are economies of scale in production,
   * b) there are economies of scope in distribution,
   * c) consumers appreciate the resulting simplification of the purchase
     decision and benefit from the joint performance of the combined
     product,
   * d) when the marginal costs of bundling are low.
   * e) when production set-up costs are high,
   * f) when customer acquisition costs are high

Product bundling is most suitible for high volume and high margin (ie.; low
marginal costs) products.