ATLANTIC BUNDLE CASE STUDY

GROUP-V1

GROUP MEMBERS: SHIVANI JAIN, SHOUNAK DEBROY, ISHAN SINGH, PRANSHU RASTOGI, DEEPTHY LAKSHMI JK

To determine the price of the server there are four strategies that we have to look through:

1. Status-Quo Pricing:

In this pricing strategy, the price will be basically the price of the server. PESA will be free of cost provided to the
customer.

The established price of the server= $2,000

Price of Atlantic Bundle would be = Price of Tronn+ Free PESA software = $2,000

2. Competitive-based Pricing

Tronn server with PESA is supposed to be 4 times efficient as Zink server.

Conservatively, 2 Tronn Servers are equal to 4 Zinc servers and Aggressively 1 Tronn Server is equal to 4 Zinc
Servers.

Price of 4 Zinc Server= $17,00*4 = $6,800

If we are going for conservative model, then the 2 tronn + PESA will be as efficient as 4 Zink server.

Price of 2 Tronn + Pesa = 4 Zink server = $ 6800.

Then price of a single tronn + pesa = $3400

Following the aggressive model-

1 Tronn + Pesa = 4 Zink server = $ 6800

3. Cost Plus Pricing Technique

If Atlantic decides to use the cost-plus pricing technique,

The expected sales in 3 years = (4*50000 + 9*70000+14* 92000)/100 =21180

Then 50 % is supposed to be only for Tronn and 50% for Tronn + PESA.

Cost of Tronn Server $1538

Cost of PESA for each server 2,000,000/10,590= $189
Total cost of Atlantic Bundle $1538+ $189= $1727
Mark up = 30% $1727*0.3= $518
Final Price 1727+$518 = $2,245
 4. Value- in -use Pricing Technique:
Using the conservative pricing :

2 Tronn Servers 4 Zinc Servers

Price of servers $2000 * 2 =4000 $6800
Electricity expenses $500 $1000 Cost is $250 per unit
Cost of license $1500 $3000 Cost is $750 per
server
Cost of Labour $4000 $8000
Total cost $10000 $18800 $2000 labour cost
per server
Savings: $8800 $0 $18800-$10000
50% of savings $4400 $0 50-50 cost sharing
Final Cost $4000+$4400 $18800
Final cost per $8400/2 = $4200
Atlantic bundle

Using the aggressive value in use pricing :

1 Tronn Servers 4 Zinc Servers

Price of servers $2000 * 1 =2000 $6800
Electricity expenses $250 $1000 Cost is $250 per unit
Cost of license $750 $3000 Cost is $750 per
server
Cost of labour $2000 $8000 $2000 labour cost
per server
Total cost $5000 $18800
Savings: $13800 $0 $18800-$5000
50% of savings $6900 $0 50-50 cost sharing
Final Cost $2000+$6900 $18800
Final cost per $8900
Atlantic bundle
SOLUTION

Jowers offered four options for creating a pricing strategy. The four alternatives have all been covered. The fourth
alternative, known as "Value in use," involved charging customers by dividing the money saved into two equal
portions. The fourth choice will make it easier for Atlantic Computers to capture market share and generate
revenue. This will bring in the PODs and attract the customer based on the PODs. This is a high-quality product
that Atlantic developed, they should charge more because eager buyers will do so. Longer term savings would
also benefit the customer.

The value-based pricing plan will also benefit from the fact that most customers will find it appealing because it is
focused on them and Atlantic

It is important to let sales force know about the advantages of value-based pricing like advantages should be
conveyed to customer that as comparing Atlantic bundle with Ontario’s Zink product, the Atlantic bundle is 2
times faster in file sharing performance and 4 times in web server performance at Atlantic’s SME booth. The
information gained by conveying to customers about benefits would allow Cadena to eventually develop a sales
script and other marketing collateral (e.g., sell sheets) that his sales staff and his third-party business partners
could use the same when offering the servers to small and medium sized business customers. This pricing means
a increase to sales which directly affects their profit and income. So the conservative approach of Value in use
should be implemented. It is profitable also and cost effective for customers also.

The selling price of Atlantic Bundle : $4200.