bundling

Definition

The practice of joining related products together for the purpose of selling them as a single unit. This is generally carried out when the seller thinks that the characteristics of two or more products and services are such that these products might appeal to many consumers more as a package than as individual offerings e.g. local and long distance services. Bundling arrangements usually feature a special pricing arrangements which make it cheaper to buy the products and services as a bundle than separately. Bundling is also often a way for creating a larger market for relatively low value products by selling them cheap (or giving them away free) with a higher value product e.g. giving away free floppy disks with the purchase of high-end computer software. The floppies might be an incentive to buy that particular software, and quite possibly the software price has a slight mark-up in it to cover the cost of the floppies.

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