Atlantic Computer: A Bundle of Pricing Options Case Solution
- The first alternative decision to focus for achieving the pricing of Tronn and PESA would be charging the hardware on company’s traditional basis and give PESA for free for the use of a particular server. This offer would definitely attract most of the customers in corporate sector and retain them for long-term due to the nature of free software with the new server.
- The second option to include would be offering the price of the new product, which is same as the price of four servers used by Ontario Corporation. This would balance the market price of the product by allowing new customers to use four related servers without any additional quantity used for repair or other issues.
- The third option to determine the price of the new product would by using cost-plus approach because it would allow to first assess the initial cost of the product and to add the amount related to the profits further in order to fix the price of the server and the PESA software.
- The last option to choose would be determine the price through the use of Value-in-use pricing strategy, as it allows to analyze the cost savings incurred by using the new server and software and to maintain the position of offering the same benefits by estimating the price, which would be preferable to the customers as well as for Atlantic Computer.
However, either one of these four options would considered the best for pricing the new server and software for the company. The problem is raised for the management regarding which option would be preferable for the company’s long-term growth. The management was also worried about the pros and cons of using the new product because according to the market analysts, the initial cost of Tronn and PESA were high and above the market trends as compared to the products offered by other companies. However, the advantage was the long-term reliability of the product. This statement sometimes makes no sense to the customers because they only want attractive price of the product rather than a guarantee of the life of the product. Therefore, if such perception would have been made, then there is less chance to quickly grab the market and to stand in a competitive position in future.
In order to assess the company’s internal as well as external performance and the trends that would allow it to boost the performance or the inability to stand in the desired position in the future. The tool of SWOT analysis has been used in order to analyze all these critical factors of the company. So it is determined that this model would identify the need to implement or to maintain the industry standards according to the need of Atlantic Computer for future survival.
The biggest strength of the company was its ability to develop unique products and services that are uncommon with the recent product line of other companies. Therefore, such uniqueness of the products would allow it to increase the customer’s size overtime and to increase the profits by selling the technological products under the market value, which would be the same as for the other products. The other strength of the company was the use of traditional sales force that is linked to commission based criteria of the sales person. This would allow to increase the sales volume by offering the attractive commission offers to the sales force of the company.
The biggest weakness so far for the company is its inability to change the operational system due to the demand of the new product line……………………
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