Case analysis -Atlantic computer: A bundle of pricing options
The main products of Atlantic computer are high-tech goods and servers. And in recent stage, the company has two segments including the basic market and the new market. Atlantic shows its relative advantages in the basic markets with the product Radia and it is a main product of this company. And it is fortunately that the new marketing grows so fast that could bring large profits for the company. The company has the premier products of the server named Tronn and the PESA which is a software tool that could enhance the speed of the server accelerator. The PESA has improved the speed of the server for 4 times based on the original speed. And this company’s main competitor is Ontario which accounts for 50% share in new market. What price should Jowers charge DayTraderJournal.com for the Atlantic Bundle (i.e. Tronn servers + PESA software tool? There are four choices. First, the company could stay the price and provide the free PESA with Tronn server. Second, the company can use the competitive strategy to set price to win the customers in the price: four times the Ontario Zink servers. Third, set a price based on a cost-plus approach. Fourth, value-in-use pricing method could be used. According to the article, the first option is about $2000 which ignore the R&D cost, the second option if you choose 4 times the Zinc, that is 1700*4= $6800, considering the third option, the expected sales in three are about 210500 and the so number of PESA installations would be 105250, so each installation would be about 200, therefore the total cost is about 1500+200=1700 and use 35% mark up, we set the price of 2295. The fourth method is a little bit complicated, we obey the equation that 2 server +PESA=4Zinc, therefore after a series of calculation, the price would be about 6000. Actually, according to the consumer behavior, I recommend the company do not take the method of price war and the forth method is much...
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