Bundling and pricing of product with after-sale services

Bundling is the sale of two or more products in combination as a package. In this paper, we consider the bundling and pricing of a complex durable product with the after-sales repair and maintenance services. The product and service are two different, but related markets for this scenario. The problem of bundling and pricing are considered for two product market structures: monopoly and duopoly. In the monopoly case, the decision framework is an optimisation problem, whereas for the duopoly, the strategic interactions of the two firms are modelled as a two stage non-cooperative game. These decision frameworks enable the manufacturing firms to decide upon the product-service bundling and pricing. Copyright © 2009, Inderscience Publishers.