TY  - JOUR
AB  - Purpose This paper aims to address the following problems: What are the firms’ optimal pricing and quality policies under three scenarios (no bundling, pure bundling and mixed bundling)? In what condition will one bundling strategy dominate the others? How does the degree of complementarity affect the firms’ decision?Design/methodology/approach Using the game theory, this study first establishes three models of bundling strategies: no bundling, pure bundling and mixed bundling and then obtains the optimal prices and quality decisions. This study uses numerical analysis to explore the relationships between the prices (demands and profits) and some key parameters and to obtain some valuable management complications.Findings Some interesting and valuable management implications are established: regardless of the degree of complementarity, adopting a pure bundling or mixed bundling strategy is better than separately selling an individual product; a high degree of complementarity leads to reduced profit in the no bundling and mixed bundling scenarios, whereas the condition in the pure bundling strategy is the opposite; and when the degree of complementarity is adequately large, choosing pure bundling strategy is more profitable.Research limitations/implications On the one hand, this study does not calculate the profit sharing ratio, and hence, the equilibrium profit sharing ratio can be explored in future work. On the other hand, marketing efforts (e.g. advertising and promotion) can be included in the study.Practical implications This study derives the necessary conditions for the most effective bundling strategy that maximizes firm’s profits, and these conclusions can provide a decision reference to the bundling decisions of firms.Originality/value First, the optimal bundling strategies in a horizontal supply chain consisting of two firms is considered. Under the pure and mixed bundling strategies, the two firms sell the bundled product by building a cooperative program. Second, both the pricing policies and quality decisions of supply chain members under the different bundling strategies are studied.
VL  - 47
IS  - 6
SN  - 0368-492X
DO  - 10.1108/K-02-2017-0082
UR  - https://doi.org/10.1108/K-02-2017-0082
AU  - Xu Qingyun
AU  - Xu Bing
AU  - Wang Ping
AU  - He Yi
PY  - 2018
Y1  - 2018/01/01
TI  - Bundling strategies for complementary products in a horizontal supply chain
T2  - Kybernetes
PB  - Emerald Publishing Limited
SP  - 1158
EP  - 1177
Y2  - 2024/04/24
ER  -