Unbundling

Unbundling involves splitting apart items that would normally be sold together and selling them as individual goods and services. A business might engage in unbundling as a pricing strategy, so that it gives customers a better choice in regard to what they want to purchase. For example, an airline offers a very low price for a middle seat in the back of a plane, but imposes additional charges if a traveler wants an aisle seat or extended seating. Customers can find unbundling to be confusing and annoying, since it can be difficult to sort through the various options. Also, a buyer may find that unbundling has hidden a price increase, which is only apparent when the various components of a purchase are added together.

The unbundling concept can also refer to a breakdown of the prices of each item being invoiced to a customer. Thus, a car repair bill is unbundled to list each of the parts and labor types required to complete a repair.

Related Courses

Revenue Management 
Revenue Recognition