ATLANTIS COMPUTERS

GROUP NO 2
ABDUL RASHID
HARSH VANDHANE
SWAPNIL GORE
TANMAY MONDAL
VIJUL DALEL
VIVEK JAIN

CASE ANALYSIS
Manufacturer of servers and high-tech computer products
Currently 2 market segments: traditional and basic server
markets

Market leader in traditional market with its product Radia

(Premier product)

For basic market, Tronn is developed. Also a software toll

PESA( Performance Enhancing Server Accelarator) is also
developed to make Tronn 4 times faster

 Main competitor in basic market is Ontario which commands

50% market share with its product ZINC

OBJECTIVE
Pricing strategy for Atlantic Bundle, which is Tronn server with
PESA tool, need to be determined

4 Options available:
Status Quo Pricing (PESA free with Tronn)
Competitive based pricing (Charging 4 times the ZINC servers)
Cost-plus pricing
Value-in-use pricing

OPTION 1
This option include charging Tronn server only and give

PESA

tool for free

Cost of Atlantic bundle = $2000

6 Servers= 2000*6= 12000

Atlantic will have to forego amount of R&D investments done

in PESA software here. This amounts to $2000000

OPTION 2
Competition based pricing
Tronn should be costing equal to 4 times ZINC servers.
Price of 4 ZINC server = 1700*4 = 6800
Cost of 6 Tronn servers = 6800*6= 40800
Price of Atlantic
Bundle

Conservative

Aggressive

3400

6800

VALUE-IN-USE PRICING
6 Tronn
server

12 ZINC
server

Remarks

Price of server 12000

20400

Electricity

1500

3000

250 per
server

s/w licenses
cost

4500

9000

750 per
server

Total
cost
32400
Total
cost of 618000
servers= 6000*6=
36000
Total savings=
7800*6= 46800
Savings
by
14400
0

32400-18000

tronn
50% of
savings

7200

50-50 cost
sharing

Final cost

19200

32400

(4000+2400)*

COST PLUS PRICING

Value

Remarks

Expected sales of Tronn

servers

21180

Expected no of PESA
installs

10590

50% of 21180

Cost of PESA per install

189

2000000/10590

Total cost of Atlantic

bundle

1727

1538+189

30& markup

518.1

0.3*1727

Final cost

2245.1

1727+518.1

Cost of 6 servers

13470.6

2245.1*6

PRICING AND PROMOTIONAL STRATEGIES

Pricing strategy:
Preferred method of setting the bundle price: Value-in-use

Possible for them to

further reduction im
cost
Effective supply chain
not being atlantics
core competency

Substantial
Decrease in profit
Only development
cost being
considered

Status quo pricing

50% Market Share of

Ontario

Cost plus pricing

Competition Based

strategy

Giving the software

away for free
Profit from product
innovation is lost
Scope of product
differentiation in a
highly competitive
market is lost

HOW COMPETITION WILL BE TAKEN CARE

OF

THANK YOU