Price Bundling: Added Value vs. Added Burden

My family recently enjoyed a vacation in Canada. A great time was had by all as we took in tourist attractions in Montreal and Toronto as well as visited relatives near Montreal. Being ever-observant of marketing practice as I am, I couldn't escape noticing the marketing activity going on all around us. In particular, I was struck by the pricing practices of two tourist attractions and how one used price bundling effectively while another's use of price bundling may actually hurt rather than help.

While in Toronto, we purchased a City Pass to take in six different attractions. City Pass bundles multiple attractions together for a single price. The price of the bundle is substantially less than purchasing tickets for each of the six attractions. Besides being a good deal for consumers, the tourist attractions that participate in City Pass benefit because they are likely to gain revenues from visitors who might opt to not visit an attraction when unbundled. In our case, we visited all six attractions in the bundle: Casa Loma, CN Tower, Hockey Hall of Fame, Ontario Science Centre, Royal Ontario Museum, and Toronto Zoo. We likely would have only visited 3 or 4 of these attractions if the bundle hadn't been available. Our vacation experience was enhanced because of the added value the City Pass provided.

I wish I could say the same for another attraction I had hoped we could visit on our trip. The Granby Zoo, located about an hour's drive from Montreal, is outstanding. I have fond memories of visiting the Zoo as a child and wanted to share that experience with my three sons. My enthusiasm was tempered, however, when I discovered that the only ticket the Zoo sold was a combination ticket for the Zoo and a water park. The price itself ($26.95, Canadian) is not the issue. The issue is I want a choice of purchasing a bundle or buying each attraction separately. We did not have time nor the desire to visit the water park, but we could not buy a ticket just for the Zoo. So, we opted not to go.

Price bundling is great because it can be used to deliver greater value on a cost-per-item basis when compared to buying items unbundled. However, price bundling should not be offered as a take-it-or-leave-it proposition, making consumers feel burdened if they buy a bundle of items that they cannot or do not want to use.

Labels: