DO YOU OFFER MULTIPLE PRODUCTS TO YOUR CUSTOMERS?
YES…
THEN BUNDLING MAY BE AN OPTION FOR YOU TO CONSIDER…
Let me share with you how...
As a business coach, I get to have great conversations with fantastic people. Time and time again, people ask me about bundling. Just today I had one such conversation with one of my professional speaking clients. And a few days ago I sat in a local coffee shop discussing the topic with a friend and had six other people join in the conversation in minutes.
I gathered from this reaction, this is a topic of interest.
So, I thought I would put my mind to getting some information about creating mixed bundles down on paper and out to my private email list today.
Mixed bundling offers a choice between purchasing the entire bundle or one of the separate parts of the bundle.
Mixed product bundling is a marketing strategy that involves offering several or many products for sale as one combined product through one purchase method. For example, a professional speaker might include a book, another advertising item, and several or many informational products. Another professional might include an e-book, an audio product and some type of consulting services.
When you think of mixed bundling look examples are available at fast food restaurants or catalog purchases on the Internet. For example, a number 3 at Burger King might include a chicken sandwich, soda, and fries. A gold package might include the whole product line from a particular speaker – not necessarily all on the same topic.
Here are a few format ideas on what you can include in a bundle – this list isn’t all comprehensive.
* Small ad-created product – a pen, pen set, page magnifier, a bag, even a t-shirt.
* Software
* Forms
* Spreadsheet
* Database
* Audio products with valuable information (CD, DVD, Cassettes)
* eBooks or books
* Lessons or how-to information (in plastic or bigger, in a binder)
* Pamphlets
The bundling strategy is more financially successful when:
* There is economy of scale in production. In economics, economy of scale describes what happens as the scale of production increases.
* There is economy of scope in distribution. Similar to economy of scale, economy of scope says that when the number of products promoted is increased and broad media used; more people can be reached with each dollar spent. This efficiency goes only so far. At some point additional advertising expenditure of new product or new product development will start to be less effective and becomes diseconomy of scope.
* Buyers appreciate the resulting simplification of the purchase.
* Purchasers benefit from the joint performance of the combined set of products. Normally when grouped by likeness. For example: A single topic but leading from one step to another.
* Marginal costs of bundling are low. Marginal cost is the change in total cost that arises when the quantity produced (or purchased) changes by one unit. Digital products, like eBooks have an excellent marginal cost.
* Production set-up costs are high. Production decisions concentrate on what goods to produce, how to produce them, the cost involved in producing them, and optimizing the mix of resource inputs used in their production. Production information is then combined with market information to determine the quantity of products to produce and the optimum pricing.
* When the purchase price is high. The higher the product’s price point the more it is to advantage to bundle. However, even lower end products can be bundled with perceived customer value if done correctly.
Placing mixed bundles together is not all positive. There is one major down side. The more items you add to the bundle the fewer the people it appeals to. At least there is a line when this occurs. Careful consideration must be placed not to cross this line, especially if items are perceived as similar to the consumer.
Mixed bundles can also be used separately as an incentive to buy now. I am sure you have already experienced this some where along your purchasing traveling. For example, call now and get X. Television does it, buy one get one free if you call in the next 10 minutes. You must use this wisely, limitedly, and with a definite cut off point. If you offer it to consistently the value of what you offer vanishes in consumer eyes. If you do this type of offer I highly recommend that you include something that you aren’t going to ever offer again.
Would you like to find out how you are doing in a particular marketing strategy? Email Catherine today and set up an marketing strategy assessment. Normally a $250 fee, Catherine is waving the fee until Tuesday, May 23.
Here is your opportunity to talk with a marketing expert on your toughest marketing problem. Don’t miss out. This opportunity is only available to four individuals.
About the author
Catherine Franz, Certified Master Life and Business Coach, resides in Virginia and is a syndicated columnist, radio producer and host of the "Let's Talk Marketing" show, International speaker, and author. Newsletters and addtional articles are available at: http://www.abundancecenter.com
Radio show information is available at:
http://www.LetsTalkMarketingShow.com
