Unbundling and Bundling Pricing Strategy Example

Pricing strategy is one of the most powerful levers a business can use to increase revenue, shape customer behavior, and differentiate in competitive markets. Two approaches that often go hand in hand are bundling and unbundling. These strategies allow companies to package or separate products and services in ways that influence perceived value, buying decisions, and profitability.

In this article, we’ll walk through what bundling and unbundling are, when and how to use them, and go through more than one bundling pricing strategy example to help you see how it plays out in the real world.

Table of Contents

What Is Bundling?

Bundling is a pricing strategy where multiple products or services are sold together as a single package, often at a lower total price than if the items were purchased separately.

There are two primary types of bundling:

Pure bundling: Products are only available as part of the bundle.
Mixed bundling: Customers can choose to buy items individually or as part of the bundle.

Bundling helps simplify the buying process, increase the average order value, and introduce customers to products they might not have purchased on their own.

What Is Unbundling?

Unbundling is the opposite approach. Instead of grouping products together, a company separates them and sells each item individually. This gives customers more control over what they purchase and how much they pay.

Unbundling is often used to:

Appeal to price-sensitive customers
Create premium upsell opportunities
Let users customize their purchases
Break down a previously fixed package

Both strategies can be used independently or in tandem, depending on your product, market, and revenue goals.

Why Use Bundling and Unbundling Strategies?

These strategies are especially useful in businesses with:

Digital products or services
SaaS or subscription models
Retail or e-commerce with multiple SKUs
Tiered service offerings

They influence perceived value and can be used to segment customers, increase conversions, and maximize lifetime value.

Let’s now explore how these strategies work with specific bundling pricing strategy example cases.

Bundling Pricing Strategy Example: Microsoft Office

One of the most cited bundling pricing strategy example cases is Microsoft Office. Instead of selling Word, Excel, PowerPoint, and Outlook separately, Microsoft sells them as part of an Office 365 subscription.

Customers can still purchase individual apps, but the bundle offers significantly better value, especially for business users who use multiple tools regularly.

This approach:

Increases perceived value
Simplifies marketing and purchase decisions
Encourages broader adoption of less-used tools

Bundling Pricing Strategy Example: Fast Food Combos

Restaurants and fast food chains use bundling constantly. A burger, fries, and drink are sold together as a combo meal for less than the total of each item separately.

This strategy:

Increases average transaction size
Makes the ordering process easier for customers
Moves inventory more efficiently

It also creates upsell opportunities, as customers are more likely to choose a bundle than select items individually.

Bundling Pricing Strategy Example: Adobe Creative Cloud

Adobe previously sold its creative tools individually. Today, it offers them as a bundled subscription known as Adobe Creative Cloud.

Customers can subscribe to the full suite (Photoshop, Illustrator, Premiere Pro, etc.) for a monthly fee
Individual apps can still be purchased, but the full bundle is promoted more heavily

This bundling pricing strategy example has helped Adobe move to a recurring revenue model and increase customer lifetime value by encouraging multi-app usage.

Unbundling Example: Airlines

Airlines are a classic unbundling example. What used to be included in the base price (checked bags, meals, seat selection) is now often sold separately.

This allows:

Competitive base pricing on comparison websites
More control for the customer
Opportunities to upsell add-ons

While controversial, this strategy has increased revenue per passenger for many airlines.

Unbundling Example: Cable and Streaming

Traditional cable TV bundled dozens of channels into a single package. With the rise of streaming platforms, services like Netflix, Disney+, and HBO Max now offer content a la carte.

This unbundling gives consumers more freedom to pay only for the content they want, even if it ultimately results in subscribing to multiple platforms.

Benefits of Bundling

1. Increases Average Order Value (AOV)

By offering related products together, you can boost the total amount each customer spends. This is one of the most direct financial benefits in any bundling pricing strategy example.

2. Simplifies Decision-Making

Customers overwhelmed by too many choices can feel more confident selecting a pre-built bundle. This increases conversion rates and speeds up the buying process.

3. Promotes Discovery of New Products

Bundling allows you to introduce customers to new or less popular products. This exposure can lead to repeat purchases or greater product adoption.

4. Creates Perceived Savings

When bundles are priced lower than the sum of individual items, customers feel like they are getting a deal, even if the margin is still favorable for the business.

5. Reduces Marketing and Sales Costs

It’s often more cost-effective to sell a bundle to one customer than to market multiple items separately to different buyers.

Benefits of Unbundling

1. Increases Flexibility for Customers

Unbundling gives users more control over what they buy. This is especially appealing in SaaS, where businesses may only need certain features.

2. Attracts Price-Sensitive Customers

By breaking down large packages into affordable components, you can serve a broader market. Customers can start small and upgrade over time.

3. Encourages Upsells and Customization

With unbundled pricing, you can add premium options that users pay extra for. This allows for higher revenue per user among those willing to spend more.

4. Supports Tiered Pricing Strategies

Unbundling allows for modular pricing, where features or services can be sold as add-ons. This creates a flexible framework for future product growth.

Challenges of Bundling

While bundling has many benefits, it also presents challenges:

Perceived value may vary – Customers might feel forced to pay for products they don’t want.
Lower margin on some items – Discounted bundles may reduce the profitability of individual products.
Complex inventory management – In physical retail, bundles may require repackaging or forecasting adjustments.

Challenges of Unbundling

Unbundling also comes with its own risks:

Customer confusion – Too many separate options may overwhelm customers.
Decreased perceived value – What was once included now costs extra, which may feel like a downgrade.
Harder to forecast revenue – When customers only buy a portion of your offering, revenue per user may be less predictable.

When to Use Bundling

Use bundling when:

Your products complement each other
Customers often buy multiple items together
You want to boost new product exposure
You want to simplify the buying process
Your goal is to increase AOV or lifetime value

Many bundling pricing strategy example cases show success when bundles are designed around customer behavior, not internal goals.

When to Use Unbundling

Use unbundling when:

Your audience is price-sensitive or budget-conscious
Customers want flexibility and choice
You have a modular product or platform
You want to attract new customers with low entry pricing
Upsell potential is high for power users

Unbundling works best when customers can see clear value in paying for only what they use or need.

Best Practices for Bundling and Unbundling

For Bundling:

Keep bundles relevant and cohesive
Show individual prices to highlight savings
Use data to find commonly bought-together items
Avoid bundling items that aren’t in demand
Test pricing against individual purchases

For Unbundling:

Start with a core product, then offer modular upgrades
Be transparent about what’s included and what’s extra
Avoid breaking apart core functionality customers expect
Bundle strategically for power users while keeping entry low
Test willingness to pay for individual features

If you are also curious about pay per use pricing models, read more about it in our website.

Final Thoughts

Bundling and unbundling are not opposing strategies. They are tools to shape pricing based on customer needs, business goals, and market trends. As you’ve seen from each bundling pricing strategy example in this guide, the most successful businesses often combine both approaches.

By understanding when and how to apply each strategy, you can create offers that boost revenue, reduce churn, and enhance customer satisfaction. Whether you sell software, services, physical goods, or subscriptions, the right pricing structure can give you a serious competitive advantage.