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), and in the fast food industry in which multiple items are combined into a complete meal. A bundle of products is sometimes referred to as a package deal. The strategy is most successful when: there are economies of scale in production, there are economies of scope in distribution, marginal costs of bundling are low. production set-up costs are high,customer acquisition costs are high.consumers appreciate the resulting simplification of the purchase decision and benefit from the joint performance of the combined product.
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An aggregate of products sold collectively at a price that is lower than the sum of their prices. The price of the set of products is lower than the total of individual products. Bundling is often accomplished in two forms: Direct Bundling – Customer must buy the entire package. Indirect Bundling – Customer cannot buy product X without also buying Y, in fixed proportions.