Product bundling is to offer a reduced price when several different products are purchased at the same time.  These multiple products are usually complimentary to a main product and cost less if bought together rather than individually.  An example of this would be to sell a cell phone with a case and headset at a reduced price that is less than the cost of each item if sold separately. 

Product bundling is also referred to as a package deal.

Product bundling is effective if it makes the decision to buy the product easy for the customer.  The combined products must compliment each other and offer a clear value to the customer.

You can offer customers the option to only purchase the bundle items.  This is called pure bundling.  Pure bundling can be divided into joint bundling and leader bundling.  Joint bundling is when two products are offered together for one bundle price.  Leader bundling is when a leader product is offered at a discount price with a non-leader product.

You can also offer customers a choice between purchasing the entire bundle or buy one of the bundled items separately.  This is called mixed bundling.