Atlantic Computer A Bundle of Pricing Options Case Solution

Case Solution

When students hold the British-language PDF from the Brief Case in the course pack, they'll may also buy a sound version. Atlantic Computer, a respected player inside the high-finish server market, has detected a marketplace chance inside the fundamental server segment. They have produced a brand new server, the Tronn, to satisfy the needs from the segment. Furthermore, they have created a credit card application tool, referred to as Performance Enhancing Server Accelerator, or PESA, that allows the Tronn to complete around four occasions faster than its standard speed. The central question involves the best way to cost the Tronn and PESA. Although cost-plus, competition-based, and standing-quo costs are the most frequent methods through which firms establish prices for options, these approaches prevents firms from fully realizing the benefits that are due to them. Provides an opportunity to optimize value capture for your firm by using value-in-use prices (i.e., examining the value the firm's offering produces for your customer, and utilizing the savings created since the cause for developing prices). Also allows for your look for the down sides all over the implementation from the value-in-use prices strategy. Incorporated within this would be the reactions of rivals, customers, and stakeholders within the firm.

Excel Calculations

Option 1             

Status Quo Pricing

Option 2             

Competetive Based Pricing        

Option 3                                             

Cost Plus Pricing                                             

Option 4                             

Value In Pricing                               

Conservative Strategy                  

Pricing Method

Expected

Sales    

Revenues           

Costs    

Profit   

Difference

Questions Covered

What price should Jowers charge DayTraderJournal.com for the Atlantic Bundle (i.e., Tronn servers + PESA software tool)?

Think broadly about the top-line revenue implications from each of the four alternative pricing strategies.  Approximately how much money over the next three years will be “left on the table” if the firm were to give away the software tool for free (i.e., status quo pricing) versus utilizing one of the other pricing approaches?

How is Matzer likely to react to your recommendation?

How is Cadena‟s sales force likely to react to your recommendation?

What can Jowers recommend to get Cadenza’s hardware oriented sales force to understand and sell the value of the PESA software effectively?

How are customers in your target market likely to react to your recommended pricing strategy?  What response can be provided to overcome any objections?

How is Ontario Zinc‟s senior management team likely to react to the Atlantic Bundle?