Longitudinal Differentiated Products Optimal Bundling Strategy

In recent years, with the development of commodity economy and the rich of product categories, more and more enterprises begin to select the bundling strategies as a part of its product sales strategy. However, the bundling strategies are like a double-edged sword. On the one hand, if you use the right bundling strategies, it can not only improve the efficiency of enterprises, but also brings consumers greater satisfaction and utility. On the other hand, the implementation of wrong bundling strategy will result in the loss of buyers and sellers, and even bring long-term negative impact on business. Based on this, the proper and effective implementation of the optimal bundling strategies will be of great practical significance.In this paper, I treat vertical product differentiation of the optimal bundling strategy as the main object of study. First of all, I do some research and analysis on domestic and international status of vertical product differentiation and bundling strategy. In the second place, I use two typical vertical product differentiations:TV advertising products & online advertising products as a practical background to improve Two-Products Banciu-Gal-Mirchandani (BGM) bundling strategy models, and then proposed random Multi-Products A-BGM (Advanced-BGM) bundling strategy model. In the subsequent analysis, in order to get answers of A-BGM model, I propose two assumptions, which are unlimited number of products' supply & limited number of products' supply. Finally, the result shows that on the assumption of unlimited number of products' supply, there is the only dominant enterprise sales strategy:PB (pure-bundling) strategy, that is to say, PB strategy is optimal bundling strategy at this time. In addition, on the assumption of limited number of products' supply and different situations, companies should take the optimal bundling strategy, and thus obtained Three-Products A-BGM optimal product bundling strategy set.