Although product and service bundling isn’t a new concept, it is giving companies such as IBM, General Electric and Magna a new edge in very competitive markets.
Ivey Associate Professor Roger More revealed the secrets of these companies’ successes at the August 13 Ivey Idea Forum, Bundling Products and Services for B2B: The new super solution that gives companies an edge. This special event for Ivey MBA students was based on insights from More’s new book, Marketing High Profit Product/Service Solutions.
More told how General Electric was successful in switching from selling individual products to hospitals to a full bundle of products and services for hospitals’ entire radiological floors.
“General Electric realized that somebody needed to put together a process of management on these floors and a bundle of products and services so that hospitals could be more efficient and effective,” he said. “General Electric used to be involved only at the intervention portion of the patient-treatment cycle, but is now involved in the entire process of imaging and information transfer for patient management across the life cycle of patients, from conception to death. The company’s vision now involves early diagnosis, intervention and prevention.”
More described a successful product-service bundle as the mirror image of a customer’s ideal solution or experience. For instance, cruise packages are essentially a super bundle of products and services that provide a customer experience.
“When people see a cruise brochure, they see themselves. They don’t see the ship and the food and the bits and pieces, they see what their life is going to be like for 21 days during a cruise. They literally see themselves in the experience,” he said.
This concept also proved true for General Electric because it was able to create a product-service bundle for hospitals that mirrored their needs for radiological floors.
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