Research On Bundling Sales Strategies For Cross-Industry Products

With the increasingly fierce competition in the market and the dramatic changes in consumer behavior,bundling,as one of the commonly used marketing strategies and tools,has attracted wide attention from both the business community and academia.In general,whether in actual market practice or in academic research,components which assembles the bundled products are often strongly correlated and the bundled products are often sold to consumers in the form of discounted prices.However,the main research questions in this thesis are:For two entirely different industry products,under what conditions the company will choose to sell them by adopting bundling strategies,and whether the company can carry out premium pricing on bundled products,which means the price of the bundled products is higher than the sum of the prices of the two component products.And explaining the reason why such products in the market are relatively rare.In addition,this thesis further studies how companies should determine the optimal pricing and optimal advertising investment when it invests in advertising,and how to choose the optimal related sales strategies.Firstly,this thesis introduces the relevant information of bundling,and reviews and summarizes the relevant literature of domestic and foreign scholars in the field of bundling,supply chain management,multi-function products and new product development,and advertising promotion in recent years,which provides a solid theoretical basis for the establishment and analysis of the follow-up mathematical models;Secondly,through the adoption of the newsvendor model,the corresponding retailer's optimization models under two sales strategies are established,namely,pure components and pure bundling,then the optimal profits of retailers under different strategies are studied,followed by comparing and analyzing the optimal strategies under different conditions;In addition,this thesis further studies the role of retailer's advertising promotion during the selling process by building mathematical models,and determines the optimal pricing and optimal advertising investment of retailer for the products under different strategies,and obtains the optimal sales strategies under different conditions,which verifies that retailers are able to benefit from adopting premium pricing for bundled products.The results of this thesis indicate that companies will choose to conduct premium pricing for the cross-industry bundled product and benefit from it only when such products are sufficiently attractive to consumers so as to reach a certain market share.And such products are usually faced to those consumers who are mainly boundedly rational,such as the children's market,but in fact,most consumers are rational,which explains why such products are so few in the market.In addition,this paper also finds that retailers' sales strategy choices are closely related to the price elasticity of products and the efficacy of advertising.More specifically,when the efficacy of advertising is low and the product elasticity is low,retailers can obtain great benefits from bundling cross-industry products and implementing premium pricing for the bundled products.When the efficacy of advertising is low and the product elasticity is high,retailers should choose the pure component strategy.When the efficacy of advertising is high and the product elasticity is low,retailers should bundle the cross-industry products and obtain great benefits from either premium pricing or discount pricing for the bundled products.However,if both the efficacy of advertising and the product elasticity are high,retailers should choose the pure component strategy.