Bundling is a pricing strategy that many companies use to get their customers to buy more than they usually would. Bundling is taking more than one product and selling it as one with one price. The price of the bundle is usually set at a lower price than the products would individually sell. This gets the consumer that may have originally set out to buy only one product to consider buying two or three products to receive a discount on their original product and get more value by having the other products.
There are two types of bundling. The first is pure bundling the second is mixed bundling. Qwest uses mixed bundling which gives the consumer the option of purchasing their products either separate or bundling them. Pure bundling is selling the products in a bundle exclusively. Many products at the store seem to utilize this pure bundling.
Pure bundling and mixed bundling are profitable only when direct segment discrimination is not possible and the demands of the produces are negatively correlated. Mixed bundling is profitable when the marginal costs are low. Qwest is a perfect example of mixed bundling. Their costs for adding cable internet to a customer that is purchasing cable TV is very small.
I am of the opinion that many companies do not have the time or resources to research their own product's demand and supply to utilize bundling to its fullest extent. Many small business owners learn whether or not bundling is profitable through trial and error rather than market research. Larger companies like Qwest have done very well capitalizing on bundling pricing strategy.