Customized service bundles in a competitive context : integrating consumer's bundling, brand and quantity decisions

The widespread use of bundling enables consumers to increasingly choose between different bundles from different firms. Therefore, while previous research has primarily examined fixed bundles in monopoly situations, we propose and estimate a latent class joint conditional model of bundling decions in a competitive customizable bundle context. Using individual choice data, we examine the impact of promotions and brand preference on bundling, brand choice, and bundle size decisions. We find promotions to primarily influence brand choice and secondarily bundling preference, but to have little impact on bundle size. The results confirm the importance of studying bundling in competitive contexts.