Title: A theoretical basis for a sponsored location program as a form of joint marketing: a mixed bundling model approach

Authors: Yoshihiro Ito; Hideo Noda

Addresses: Nagaoka University of Technology, 1603-1 Kamitomiokamachi, Nagaoka, Niigata 940-2188, Japan ' Tokyo University of Science, 1-11-2 Fujimi, Chiyoda-ku, Tokyo 102-0071, Japan

Abstract: This study provides the theoretical basis for a 'sponsored location program' - a joint marketing effort designed to benefit all participating parties. We present a mixed bundling model involving two firms: an online game company and an alliance partner. Our model assumes joint sales by the two firms, with generated profit allocated between them. The model implies that under a conventional sponsored location program, changing from separate sales to mixed bundling allows only one, but not both, of the firms to increase profits. But when both firms are free to set prices, changing the retailing mode allows both to increase profits.

Keywords: bundling profit; game industry; information goods; joint marketing; mixed bundling; online game; Pokémon GO; retailing mode; separate selling; sponsored location program.

DOI: 10.1504/IJTM.2023.127861

International Journal of Technology Management, 2023 Vol.91 No.1/2, pp.133 - 144

Received: 12 May 2021
Accepted: 21 Jan 2022
Published online: 20 Dec 2022 *