Atlantic Computer: a Bundle of Pricing Options

Case Write-Up 5, 2011-11-14 Case 6. Atlantic calculating machine Group 11 2010123281 Lim, Min A 2010123380 Lee, Yoon Ji 2010101026 Na, Hyeon Jung 2010123031 Park, Jae Eon ?. Executive Summary At the present, with the give riseth of the Internet, the fundamental waiter foodstuff is growing rapidly and the Atlantic computer, which is aimed at producing the high slaying server, is ready to sell the prefatorial server. It launches the Tronn puckish with PESA. PESA, the software change magnitudes the speed of file sharing and web servers, two of the or so rehearsed application for the consumers, so it should be sold with the Tronn, the hardware.At first year, if we latch on that the firm leave female genital organ be able to sell all of the Tronn servers it washstand produce, Atlantics resulting constituent of the elementary server segment will be 4%. We suggest that possibility as our goal to pursue. besides the basic merchandise is already full with the competition, Ontario with the Zink and the corporation has a propensity to stick to the traditional marketing approach. To overcome these stops, we suggest to set the determine based on the calculation of greet-based set and to abandon the original come up to marketing methods and accept the indirect commissions like online-marketing and the advertisement by means of diverse media. . Problem Analysis (Goal & Impediments) Goal As new-comer of the basic server market, Atlantics computer begins from the scratch. If Atlantics computer plenty sell all of its harvesting, the Tronn, it slew occupy 4% in basic server market. only when the thing is, it is a ground stone to expound the market share in the long run, so it would better non to harm the revenue to reach that figure. The targeted consumers is people who have demand for basic server, especially who are interested in one application, especially each of file sharing and web servers, and who seeks the way to inimize the initial pur chase cost and subsequent possession costs. Impediments We have two main impediments for our goal, strong competitor and Atlantic computers traditional marketing schema. Our strong competitor, Ontario, has already half of the market share in basic server segment. likewise their product Zink has similar spec with Tronn. So we have to compete with Zink in harm or innovative supply chain strategy. It is hard to entreaty to consumers that we have not technological superiority but fall behind Zink in market share very much. Another main impediment is Atlantic Computers existing traditional marketing strategy.Atlantic Computer already won success in high exploit segment, so many people in the company tend to think that its just right to apply existing marketing strategy to basic segment. Atlantics computer is interested in making sexual relationship with customers and maintaining its post-sales assistance service level in high performance segment. hardly situation in basic segment a nd high performance segment is different, we have to apply different marketing strategy each other. As mentioned above, there is specific situation where Zink and Tronn is very similar in technological aspect.Therefore, there should be some unique marketing strategy in basic segment. ?. Solution Analysis Solution To win market share in basic segment, Atlantic Company should develop straightlaced the pricing strategy. The company should consider four strategies status-quo pricing, competition-based pricing, cost-based pricing and value-based pricing. ? Status-quo pricing cost of Server only and PESA for waive terms of one Tronn Server = $2000 2 Tronn Servers + PESA software free = 2*2000 = $4000 Total Price of 2 Atlantic Bundles to Daytradejournal. com = $4000 Price of 1 Atlantic Bundle = $2000 ? Competition-based pricing set the Tronn servers based on charge of competitor server (Zink by Ontario) and PESA for free. Since 2 Tronn Server with PESA software is eq to 4 Zink server s Price of one Zink Server = $1700 / 2 Tronn Servers + PESA software free=4*1700= $6800 Total Price of 2 Atlantic Bundles = $6800 Price of 1 Atlantic Bundle = $3400 ? Cost-based pricing (figure1, figure2) Cost incurred in PESA software maturement = $2000000 / Cost of Tronn Server = $1538 Price of 1 Atlantic Bundle = $ 2245 ?Value-based Pricing (figure3) Considering 4 Zink server is equivalent to 2 Tronn server and 2 PESA software. Price of 1 Atlantic Bundle = $ 4200Above diagram, we can know that fourth pricing strategy get high profit, but price is also high. If price is too high, customers are reluctant to buy Atlantic Bundle, and this harms the market share. So, the company should avoid to select Value-based pricing and Competition-based pricing. Status-quo pricing could be an effective way for increasing market share because of its cheap price, but it will not give benefit in the long-run. Cost-based pricing is the best choice for Atlantic Company, because its moderate price ma kes company get high market share in the beginning and moderate profit for first year.There could be an lineage that status-quo pricing is more(prenominal) appropriate way to reach our goal of make the 4% of the market share in basic server field. But as mentioned above our goal is a ground stone to grow in the long run, it is better to choose the price making more profit with similar figure market share basis. Moreover to boost market share in basic segment the company should use indirect mass marketing. In high performance server market, it was good to use expensive direct marketing to the giant and few consumers. But it is non-matching to basic segment where the company should put its great effort to take down the price.So the company should use the indirect and comparatively cheaper way to connect with the little and much consumers of the basic server market. The Atlantics computer can use online-marketing like its competitor, Ontario, or it can use mass market advertising through mass media. It could affect to more consumers easily. Although this method the product could affect each consumer less, the total quantity of influence on the targeted consumers should increase assuming the number of the customers in this market, figure 1 figure 2 figure 3