Atlantic Computer: a Bundle of Pricing Options

eluding Write-Up 5, 2011-11-14 Case 6. Atlantic reckoner Group 11 2010123281 Lim, Min A 2010123380 Lee, Yoon Ji 2010101026 Na, Hyeon Jung 2010123031 Park, Jae Eon ?. Executive succinct At the present, with the growth of the Internet, the sanctioned master of ceremonies commercialise is growing rapidly and the Atlantic computer, which is aimed at producing the risque process server, is ready to sell the gougeonic server. It launches the Tronn loaded with PESA. PESA, the software increases the speed of file sharing and nett servers, two of the most used application for the consumers, so it should be sold with the Tronn, the hardware.At first year, if we assume that the incorruptible will be able to sell all of the Tronn servers it can produce, Atlantics resulting overlap of the rudimentary server subdivision will be 4%. We suggest that possibility as our design to pursue. exclusively the basic commercialise is already full with the competitor, Ontario with the Zink an d the company has a tendency to stick to the traditional trade approach. To overcome these impediments, we suggest to set the price based on the calculation of cost-based pricing and to abandon the schoolmaster direct marketing methods and accept the indirect ways like online-marketing and the advertisement through diverse media. . paradox Analysis (Goal & Impediments) Goal As new-comer of the basic server market, Atlantics computer begins from the scratch. If Atlantics computer can sell all of its product, the Tronn, it can occupy 4% in basic server market. But the thing is, it is a ground stone to enlarge the market share in the unyielding run, so it would better not to harm the revenue to reach that figure. The targeted consumers is people who take demand for basic server, especially who are interested in one application, especially either of file sharing and sack up servers, and who seeks the way to inimize the initial purchase costs and subsequent possession costs. Impedi ments We carry two main impediments for our goal, untouchable competitor and Atlantic computers traditional marketing outline. Our strong competitor, Ontario, has already half of the market share in basic server segment. Also their product Zink has similar spec with Tronn. So we have to compete with Zink in price or innovative supply chain strategy. It is hard to appeal to consumers that we have not technological superiority yet fall behind Zink in market share in truth much. Another main impediment is Atlantic Computers existing traditional marketing strategy.Atlantic Computer already won success in high performance 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 do intimate relationship with customers and maintaining its post-sales tending service level in high performance segment. But situation in basic segment and high performance segment is different, we hav e 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 whatsoever unique marketing strategy in basic segment. ?. Solution Analysis Solution To boost market share in basic segment, Atlantic Company should develop proper the pricing strategy. The company should count on four strategies status-quo pricing, competition-based pricing, cost-based pricing and value-based pricing. ? Status-quo pricing cost of horde only and PESA for free Price of one Tronn boniface = $2000 2 Tronn Servers + PESA software free = 2*2000 = $4000 Total Price of 2 Atlantic hoards to Daytradejournal. com = $4000 Price of 1 Atlantic Bundle = $2000 ? Competition-based pricing set the Tronn servers based on price of competitor server (Zink by Ontario) and PESA for free. Since 2 Tronn Server with PESA software is equivalent to 4 Zink servers Price of one Zink Server = $1700 / 2 Tro nn Servers + PESA software free=4*1700= $6800 Total Price of 2 Atlantic Bundles = $6800 Price of 1 Atlantic Bundle = $3400 ? follow-based pricing (figure1, figure2) Cost incurred in PESA software development = $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 simoleons, but price is alike 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 look at 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 subside price makes company get high market sha re in the beginning and moderate profit for first year.There could be an argument that status-quo pricing is more appropriate way to reach our goal of comer 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 view marketing. In high performance server market, it was efficient 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 lower the price.So the company should use the indirect and comparatively cheaper way to connect with the smaller 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 mor e 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