The ‘Bundling’ Business

Lately, you must have watched an advertisement in which Amir Khan is seen as a Gujarati man who doubts the reality that the ‘Star Value Pack’, which includes 5 plus channels, costs only 49 rupees.

Actually, 2019 itself started with most of the production companies and television channel owning companies publicizing the subscription packs of their channels. It was a direct effect of TRAI (Telecom Regulatory Authority of India) making reforms in laws. It introduced a tariff regime which supported the idea that customers who on an average flip through 50 channels in total shouldn’t be charged for 500 channels by broadcasting firms.

Hence started the race between channel owners to put forth the best value pack for their customers.
But did you wonder that why are these companies selling the subscription of a bunch of channels in such less amount? The reason is quite easy to understand. The technique of marketing that these companies are using is called ‘Bundling’. Bundling is a marketing tactic that involves offering two or more goods or services as a package deal for a discounted price.

Bundling, as a psychological marketing tool, was first developed in the USA for the magazine industry. The sole purpose of this technique is to make the customers feel that they are getting a bargain. To ensure this, companies price each product at a higher amount and packages of two products at a lower amount. For instance, a cloth store sells a t-shirt for 800 rupees and a hoodie for 1000 rupees, and both in a package for 1300 rupees. Most of us will buy the package even if we don’t really want a t-shirt and are just looking for a hoodie. In the underlying process, sellers calculate their income margins and don’t let it drop even if we feel they are.

Right from McDonald’s which offers combo packs to dealers on Amazon, every product distributor uses Bundling to sell off or promote their products or increase their sale. So next time if you want to sell your books and study material to your juniors, try bundling and thank me later (won’t pan out well if your buyer has already read this article).