Part A4 · Price Discrimination and Bundling

Why Bundling Works

Bundling sells several products for one price. It earns more than separate pricing when different customers value the parts differently.

Why Bundling Works · Illustrated by Hendra Saputra with AI assistanceSelect the illustration to explore it at a larger size.

The idea

Bundling can improve revenue when customers value the components differently. In the illustrative two-customer example, separate pricing earns Rp 110,000 while a Rp 70,000 bundle earns Rp 140,000, before allowing for component costs. Usage can suggest segments but is not the same as willingness to pay. Test both revenue and contribution, and compare the bundle with separate and mixed-bundle options.

Use it thoughtfully

  • Use usage patterns to form hypotheses, then test willingness to pay.
  • Compare separate pricing, pure bundling and mixed bundling.
  • Measure contribution and cannibalisation before scaling.

An example

ILLUSTRATIVE EXAMPLE: A team uses different data and video usage patterns to identify potential segments, then tests willingness to pay for the bundle and separate offers before choosing a menu.

A question to try

Do the customers who value your data most also value the service you want to bundle?

A useful framework is a starting point, not a guarantee. Effects vary with the audience, product and situation. Use truthful evidence, respect customer choice, and test the result.

Connect the ideas

Illustration

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