Lethal Combination – Bundle Pricing Simplified
?????????? ?????????????? - вυ?ιη??? ?тяαт?gι?т ??
Blogger (5 Million+ Views) | IIM-C | ESG | MDF | PB | laminates | Tyres | Lifestyle Products | blogs on day-to-day marketing problems | views are Personal,
Sometimes a partnership transforms into a winning combination. It’s a “lethal Combination” for the competition and they have difficulties in finding an answer. Who can forget the combination of Sachin Tendulkar and Sourav Ganguly in One Day Internationals (ODI). The records say it all:
- Partnerships – 176
- Runs – 8227
- Average – 47.55
No other pair has crossed even 6,000 runs together in ODI’s. Unmatched partnership and a “Lethal Combination” when they batted together. Both complement each other, resulting in a winning formula for Indian Team.
Some of you must be wondering what has this to do with the topic “ Bundle Pricing”? Well the answer is simple: like cricket partnerships, Bundle Pricing is also about combining two or more products and creating a winning partnership.
The simplest example is , when you book a hotel if the price for room is Rs.4000/-and Rs.20/- extra for water per bottle. It may sound bit harsh or odd to you but if the room price is Rs.4050/- and water is complimentary (2 bottles), you will not mind. Whereas the hotel has charged you more . This module of pricing is very common in Fast food chains like Burger King and McDonalds.
Major Benefits to Companies, Distributors and Dealers of Bundle Pricing:
- This is an opaque pricing and the customers generally fall for the offers (Hotel Example). This can create an opportunity for Distributors to earn more.
- This gives an opportunity to reduce inventory, you can bundle some slow moving product and keep your inventory lean.
- It reduces cost on marketing as you can run a single campaign for multiple products.
- This also helps in creating demand for products that people don’t generally buy or can do without too.
We have seen that some of the dealers follow this method and they gain. It’s a very common practice in the automobile and FMCG segment. Very few do this in the building material industry. Whereas the scope is huge. When you analyze every product or most of the products are complementary to each other and they can be sold as a combination. Paint with Putty, Plywood/ MDF with laminate, Glue with Laminate, masking tape with Laminate. There can be thousands of such examples. Question is to break the conventional mold of thinking and evolve into new Avtar.
Read more interesting case studies on Marketing, leadership and Sales on
www.freesaletips.com
VP, M&A Consulting at KPMG India | Corporate Strategy | Business Growth & Diversification Specialist | Ex-PwC | Ex-HSIL(Hindware Group) | MBA-Dean's List (SPJIMR), M.E (Thapar University)
4 年Sir just a thought on how the margins are impacted gross and operating through bundled pricing and and whether there is scope for customers to negotiate on the same especially in retail channel sales? Would appreciate if you can through some light through some quantitative examples on some industry.