Bundling
1. Evaluate the consequences of offering a single ticket for the concert series either in addition to, or in place of, offering the tickets for each concert separately.
The primary aim here should be to maximize profit.
Below table gives the Willingness –to-pay of Concert Patrons:
Case 1: Only Bundling
Bundle at $50- This is the maximum that the last two categories of patrons are ready to pay. Hence, the revenue we get is $200.
Bundle at $60- Only the top two categories of patrons are ready to pay this amount for both the concerts together. The revenue we get is $120.
So by bundling, the maximum we can get is $200.
Case 2: Not bundling
Both concert tickets individually $20 – In this case we are not capturing Tchaikovsky lover patron for the Bartok/Stravinsky concert and the Sophisticate patron for the Berlioz/Tchaikovsky concert. The maximum revenue we get by doing so is $120.
Both concert tickets individually $40 – In this case we are not capturing Romantic & Tchaikovsky lover patron for the Bartok/Stravinsky concert and the Sophisticate & Neo-Classical patron for the Berlioz/Tchaikovsky concert. The maximum revenue we get by doing so is $160.
So the maximum we can gain by NOT BUNDLING AT ALL is $160.
Case 3: Mix of Bundle and Individual
Bundle at $60 and sell Individual tickets at $45 – The Romantic & Neo-Classical Patrons for both the concerts shall pick the bundle at $60. The Tchaikovsky lover and Sophisticate patrons shall pick the individual tickets for Berlioz/Tchaikovsky and the Bartok/Stravinsky concerts respectively at $45. But we are unable to capture Sophisticate patron for the Berlioz/Tchaikovsky concert and Tchaikovsky lover patron for the Bartok/Stravinsky concert. The revenue we get by doing this $210.
So the maximum we get by keeping a mix of both bundling and individual tickets is $210.
From the above analysis, we can easily conclude that keeping a mix of bundling (at $60) and individual tickets (at $45) is the
The primary aim here should be to maximize profit.
Below table gives the Willingness –to-pay of Concert Patrons:
Case 1: Only Bundling
Bundle at $50- This is the maximum that the last two categories of patrons are ready to pay. Hence, the revenue we get is $200.
Bundle at $60- Only the top two categories of patrons are ready to pay this amount for both the concerts together. The revenue we get is $120.
So by bundling, the maximum we can get is $200.
Case 2: Not bundling
Both concert tickets individually $20 – In this case we are not capturing Tchaikovsky lover patron for the Bartok/Stravinsky concert and the Sophisticate patron for the Berlioz/Tchaikovsky concert. The maximum revenue we get by doing so is $120.
Both concert tickets individually $40 – In this case we are not capturing Romantic & Tchaikovsky lover patron for the Bartok/Stravinsky concert and the Sophisticate & Neo-Classical patron for the Berlioz/Tchaikovsky concert. The maximum revenue we get by doing so is $160.
So the maximum we can gain by NOT BUNDLING AT ALL is $160.
Case 3: Mix of Bundle and Individual
Bundle at $60 and sell Individual tickets at $45 – The Romantic & Neo-Classical Patrons for both the concerts shall pick the bundle at $60. The Tchaikovsky lover and Sophisticate patrons shall pick the individual tickets for Berlioz/Tchaikovsky and the Bartok/Stravinsky concerts respectively at $45. But we are unable to capture Sophisticate patron for the Berlioz/Tchaikovsky concert and Tchaikovsky lover patron for the Bartok/Stravinsky concert. The revenue we get by doing this $210.
So the maximum we get by keeping a mix of both bundling and individual tickets is $210.
From the above analysis, we can easily conclude that keeping a mix of bundling (at $60) and individual tickets (at $45) is the