October 23,2009
Strategic Bundling of Products and Prices: A New Synthesis for Marketing
After my studying the paper “ Strategic Bundling of Products and Prices: A New Synthesis for Marketing”, I would like to issue my critique as bellows:
First, the authors deemed that the pure price bundling will be superior if the goal is market penetration. However, according to Kotler & Armstrong ( 1994) , define to the market penetration is rather than setting a high initial price to skim off small but profitable market segments, so some companies set a low initial price in order to penetrate the market quickly and deeply- to attract a large number of buying quickly and win a large market share. Hence, a company that plans to develop a new product faces a product- position problem. In Kotler & Armstrong consideration, it affects to product mix pricing strategy. There is a key element what called product- bundling pricing based on product mix pricing strategy. Therefore, if the goal is market penetration, it will be involved not only pricing but also products. For example, a new high tech products enter to market, it will be embedded new function or solution which come from another products. Obviously, the author’s statement is a little wrong.
Second, the authors provide an optimality of bundling strategy and proceed to discuss the propositions under the five factors- customers’ condition reservation prices, objectives of the firm, competition, costs, and customers’ perceptions of bundles. Now, we review the paper from Telse(1979). Really, Telser issue a theory of monopoly of complementary goods. It is obviously that a market failure issue and product complementary can be a strategy. Nevertheless, Stremersch & Tellis (2002) have a left out product attribution. Therefore, we suggest it should add product attribution here because of products view can be applied in this study.
Third, for products bundling or price bundling what are belong to marketing strategy. So far, we should think both the marketing of services and relationship marketing. We can review the literature on both bundling and relationship marketing and puts forward a new theoretical approach. Based on Legarreta & Miguel (2004), a specific price bundle can have more strategic implications than a different specific product bundle, due to the associative power of bundling and its interactive capacity. As an essential part of this approach, a company must define bundling through an in-depth appraisal of the actual contextual experience of the customer, rather than focusing solely on reservation prices, which is where previous literature had laid its main emphasis. So, relation bundling is a new prospect for market strategy due to service- centered is a new dominant logic for marketing. Here, we suggest a combination of relationship, products, and pricing bundling framework for this research.
First, the authors deemed that the pure price bundling will be superior if the goal is market penetration. However, according to Kotler & Armstrong ( 1994) , define to the market penetration is rather than setting a high initial price to skim off small but profitable market segments, so some companies set a low initial price in order to penetrate the market quickly and deeply- to attract a large number of buying quickly and win a large market share. Hence, a company that plans to develop a new product faces a product- position problem. In Kotler & Armstrong consideration, it affects to product mix pricing strategy. There is a key element what called product- bundling pricing based on product mix pricing strategy. Therefore, if the goal is market penetration, it will be involved not only pricing but also products. For example, a new high tech products enter to market, it will be embedded new function or solution which come from another products. Obviously, the author’s statement is a little wrong.
Second, the authors provide an optimality of bundling strategy and proceed to discuss the propositions under the five factors- customers’ condition reservation prices, objectives of the firm, competition, costs, and customers’ perceptions of bundles. Now, we review the paper from Telse(1979). Really, Telser issue a theory of monopoly of complementary goods. It is obviously that a market failure issue and product complementary can be a strategy. Nevertheless, Stremersch & Tellis (2002) have a left out product attribution. Therefore, we suggest it should add product attribution here because of products view can be applied in this study.
Third, for products bundling or price bundling what are belong to marketing strategy. So far, we should think both the marketing of services and relationship marketing. We can review the literature on both bundling and relationship marketing and puts forward a new theoretical approach. Based on Legarreta & Miguel (2004), a specific price bundle can have more strategic implications than a different specific product bundle, due to the associative power of bundling and its interactive capacity. As an essential part of this approach, a company must define bundling through an in-depth appraisal of the actual contextual experience of the customer, rather than focusing solely on reservation prices, which is where previous literature had laid its main emphasis. So, relation bundling is a new prospect for market strategy due to service- centered is a new dominant logic for marketing. Here, we suggest a combination of relationship, products, and pricing bundling framework for this research.
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