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    Atlantic Y1

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    Shivani Sharma
    Jason needs to decide on a pricing strategy for a new server bundle offering from Atlantic Computers. The document evaluates four pricing strategies: traditional pricing, competition-based pricing, cost-plus pricing, and value-in-use pricing. It recommends value-in-use pricing, as this strategy would allow Atlantic to charge $6400 for a bundle that saves customers $4800 compared to purchasing individual servers from a competitor, making the bundles more appealing while also providing profits for Atlantic. An implementation strategy is provided focusing on marketing the cost savings to customers.

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    Atlantic Y1

    Uploaded by

    Shivani Sharma
    13 views9 pages
    Jason needs to decide on a pricing strategy for a new server bundle offering from Atlantic Computers. The document evaluates four pricing strategies: traditional pricing, competition-based pricing, cost-plus pricing, and value-in-use pricing. It recommends value-in-use pricing, as this strategy would allow Atlantic to charge $6400 for a bundle that saves customers $4800 compared to purchasing individual servers from a competitor, making the bundles more appealing while also providing profits for Atlantic. An implementation strategy is provided focusing on marketing the cost savings to customers.

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    Jason needs to decide on a pricing strategy for a new server bundle offering from Atlantic Computers. The document evaluates four pricing strategies: traditional pricing, competition-based pricing, cost-plus pricing, and value-in-use pricing. It recommends value-in-use pricing, as this strategy would allow Atlantic to charge $6400 for a bundle that saves customers $4800 compared to purchasing individual servers from a competitor, making the bundles more appealing while also providing profits for Atlantic. An implementation strategy is provided focusing on marketing the cost savings to customers.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    13 views9 pages

    Atlantic Y1

    Uploaded by

    Shivani Sharma
    Jason needs to decide on a pricing strategy for a new server bundle offering from Atlantic Computers. The document evaluates four pricing strategies: traditional pricing, competition-based pricing, cost-plus pricing, and value-in-use pricing. It recommends value-in-use pricing, as this strategy would allow Atlantic to charge $6400 for a bundle that saves customers $4800 compared to purchasing individual servers from a competitor, making the bundles more appealing while also providing profits for Atlantic. An implementation strategy is provided focusing on marketing the cost savings to customers.

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    You are on page 1of 9

    ATLANTIC

    COMPUTERS
    A Bundle of pricing options.
    Case Analysis
    PROBLEM
    STATEMENT
    Jason needs to decide the pricing strategy for the bundle
    offering.
    The pricing strategy for the bundle can be selected from:
     Traditional Pricing Model. 
     Competition based Pricing Model.
     Cost-plus Pricing Model.
     Value-in-use Pricing Model.

    Atlantic Computer wants to disrupt the market share by competing


    with bigger player Ontario providing Zink in the basic server
    segment. 
    2
    EVALUATION OF
    PRICING STRATEGY
    1. TRADITIONAL 2. COMPETITION
    MODEL OF THE BASED PRICING:
    COMPANY Atlantic to match
    competitor's price for
    market launch.
    Traditional norm: Price/server
    $2000 (Tronn)=
    Price/server (Zink)=
    No. of servers= 2 $1700
    Atlantic compares 2 Tronn servers to 4 of servers= 4 No.
    Ontario Zink servers. Total cost= $4000
    Total Cost= $6800
    Price per server= $2000
    No. of servers= 2 So, the price charged would
    Total price of the servers= $4000 be $6800 for Tronn through
    this method of pricing.

    3
    EVALUATION OF
    PRICING STRATEGY
    3. COST-PLUS PRICING:
    Approach of pricing: direct costs, indirect costs, fixed costs related to the
    production, and the sale of the servers.

    Atlantic’s resulting share in basic server segment : 4% in 2001, 9% in 2002, and


    14% in 2003.
    Year Basic server % market share No. of units
    market share for Atlantic
    Computer
    2001 50,000 4% 50,000*0.04= 2,000
    2002 70,000 9% 70,000*0.09= 6,300
    2003 92,000 14% 92,000*0.14=12,880

    For 2 years, the price of 2 servers are going to be 2245*2 = $4490

    4
    EVALUATION OF
    PRICING STRATEGY
    4. VALUE-IN-USE
    PRICING:
    Capturing a portion of what a customer would save by purchasing the product.
    We will assume a 50-50 sharing of the savings gain with the customer.
      2 Tronn Servers 4 Zink Servers
    Price of servers $4000 $6800
    Electricity costs $500 $1000
    Licensing $1500 $3000
    costs($750/server)
    Total costs $6,000 $10,800

    Saving by Tronn = $4800


    Now, since, the sharing of the savings gain was 50-50. Therefore,

    50% of 4800 = $2400

    So, the Final cost for the Bundle = 4000+2400 = $6,400


    5
    RECOMMENDATIONS
    Status Quo   Competition   Cost Plus pricing   Value in use pricing 

    The company will lose Atlantic computers is In this pricing strategy, Using this pricing
    $2M spent on Research competing with well- Tronn is offered at a strategy would offer
    &development. It is a established competitors, higher price than Zink customers a saving of
    huge cost and will take a offering price with and hence, capturing 4800$ as compared to
    long duration to break competition pricing will the market for a new Zink.  
    even and earn profits.   offer the highest profit player in the segment
    but the price is higher would be difficult.  
    than the competitor and
    hence, it is not a
    feasible option.  

    Jason should proceed with value-in-use pricing. 

    Value in pricing offers efficiency, profits for the organization by keeping in


    mind maximum value provided to the customer.  6
    IMPLEMENTATION STRATEGY

    1. Tronn's target audience: web servers & file sharing. Bundle for half, no bundle
    for email & enterprise.

    2. The competition won’t react immediately. Atlantic to capture 14% market share
    in 3 years. Value, efficiency, cost savings will help Atlantic compete.

    3. Training salespeople of Cadena will play a pivotal role in increasing the


    awareness and sales of the company. The marketing campaign should be focused
    on terms like, “value for money”, and “saving cost for long term”. 

    7
    SUMMARY
    It is suggested to use value-in-use Pricing strategy because
    this package deal will cost $6400. If a customer buys 2
    Atlantic bundles instead of four Zink servers, they will save
    $4800. This makes buying the Atlantic bundles more
    appealing to customers as they can see how much money
    they're saving. Value-in-use pricing will provide efficiency and
    cost savings as compared to Zink.

    20XX Pitch deck title 8


    THANK YOU
    Aman
    Raghuvanshi 
    Sagar Chawla 
    Sarvjeet Kour 
    Shivani Sharma 
    Vaibhav Sharma 
     

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