Bundling

A pricing strategy that packages multiple products or services together, obscuring individual prices and reshaping the buyer’s perception of total value. Pure bundling offers only the combined set; mixed bundling offers both individual items and a bundle. SaaS plan tiers and software suites (e.g., Microsoft 365) are canonical examples.

Adams and Yellen (1976) showed that when buyers’ WTP distributions differ across items, bundling efficiently converts consumer surplus into firm revenue. The failure mode: including low-perceived-value components reduces the bundle’s overall worth and can trigger a sense of being forced into unwanted purchases, spreading via post-purchase reviews.