Compatibility and bundling of stand and No stand-alone use complements

Vamosiu, Adriana

doi:10.1016/j.ijpe.2017.12.029

Cited by 12 publications

(5 citation statements)

References 16 publications

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“…In addition, since most markets operate under some degree of competition, the absence of interfirm competition (e.g. Vamosiu, 2018aVamosiu, , 2018b is clearly a limitation of the analysis carried out here. These issues constitute promising areas for future research.…”

Section: Resultsmentioning

confidence: 99%

“…Such practices have been carried out in high-tech sectors, as was the case of product bundling by Microsoft (Stremersch and Tellis 2002;Peitz, 2008). In fact, bundling has been studied in the presence of different levels of market competition, including monopolies (Sheikhzadeh and Elahi, 2013;Li et al, 2013) and imperfectly competitive firms (Vamosiu, 2018a(Vamosiu, , 2018b.…”

Section: Introductionmentioning

confidence: 99%

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The role of complementarity of goods in a mixed bundling strategy

Álvarez‐Albelo

2020

Econ Bus Lett

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This paper studies optimal pricing when a monopolist firm produces two complementary goods and may undertake a bundling strategy. To do so, a modified version of Yan and Bandyopadhyay’s (2011) framework is used, in which the efficacy of the bundling strategy depends positively on the degree of complementarity of goods. Two main results are obtained. First, mixed bundling turns out to be the optimal strategy for the firm, since it yields higher profits than pure unbundling and pure bundling. Second, sales and profits from the bundling (unbundling) strategy increase (decrease) as the products become more complementary, which entails an empirically sensible behavior.

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Section: Resultsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The role of complementarity of goods in a mixed bundling strategy

Álvarez‐Albelo

2020

Econ Bus Lett

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“…Thus, scholars have recently examined decision-making concerns in bundle pricing from various viewpoints in the supply chain management literature. Vamosiu [13] developed a differentiated products model to examine compatibility and bundling for a duopolist, namely, product bundling and price bundling under competition. Wei and Chen [25] examined the effect of pricing strategy and channel choice on a dual-channel supply chain profit model under different market-dominant powers and bundling strategies.…”

Section: B Bundling Strategy In Pricing Decisionsmentioning

confidence: 99%

“…Unbundling warranty pricing, however, provides greater price transparency and customization potential to meet customers' needs and preferences. Thus, warranty and bundling strategies influence pricing decisions and are an effective marketing strategy to increase customer value and satisfaction [11], [12], [13]. By exploiting warranty and bundling strategies, firms have different pricing options and a greater ability to differentiate themselves from competitors and therefore increase a competitive advantage.…”

Section: Introductionmentioning

confidence: 99%

“…Nonetheless, market competition occurs when multiple firms offer similar products or services to the same customer base and attempt to gain a larger market share. There are different types of market competition, one of which is duopolistic competition, in which two businesses dominate a particular market and compete for market share and profit maximization [13], [14], [15]. Interestingly, in a duopoly, each firm encounters spatial competition and should therefore consider the actions and reactions of its rival when making decisions [16], [17].…”

Section: Introductionmentioning

confidence: 99%

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Warranty and Bundling Strategies for Pricing Decisions in a Duopoly

Andriani

Tseng

2023

IEEE Access

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This study examines pricing decisions by considering two manufacturers' warranty and bundling strategies using spatial competition in a duopolistic market. With the development of advanced technology and evolving societal needs, manufacturers now sell a product with its complement-a warrantyusing either a bundled base warranty or an unbundled extended warranty strategy. To investigate the impact of the bundling strategy on warranty and pricing models, we develop two scenarios for the pure bundling and mixed bundling scenarios. By constructing a Nash equilibrium model and assessing customer preferences, we determine the optimal warranty length and level of customer demand corresponding to a manufacturer's pricing and strategic decisions. The analysis demonstrates that one manufacturer's strategic decisions are interdependent with those of its competitor. Moreover, a longer warranty period in the unbundled extended warranty strategy not only attracts customers and increases demand but also imposes additional costs on manufacturers. As a result, while providing more personalized features and flexibility, the unbundled extended warranty strategy is not always more profitable. Thus, a manufacturer must carefully evaluate its warranty and bundling strategies when making pricing decisions to gain a competitive advantage. Finally, numerical and sensitivity analyzes confirm the results of the theoretical analysis and provide managerial insights.

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