Atlantic Computer

B2BM Case Study

 Context
• Atlantic Computers is a manufacturer of Servers and High-
tech products
• Atlantic has 20% market share in High Performance Servers
with Radia
• Company is known for providing top-notch, highly reliable
products and has a reputation for providing high quality,
responsive post sales assistance
• Strategy comprises Customer Intimacy and Product
differentiation
• Company has a new offering ‘Atlantic Bundle’ that it is
planning to launch in the up coming industry trade fair
 Problem
• Which Businesses are most likely to benefit from
‘Atlantic Bundle’
• How customers will react?
• How competitors will respond?
Develop pricing strategy for the ‘Atlantic Bundle’ for
the upcoming Small and Medium-Size Enterprise
Systems Solutions Trade Show (SME)
What is ‘Atlantic Bundle’?

+
Performance Enhancing
TROMM Server Accelerator
(PESA)
 Atlantic Bundle
• 2 main market segments
– Customers looking for High Performance servers
• Expected Demand – 2,00,000 (2001) and 3% annually
for next 2 years
• May cannabalize sales of Radia
– Customers looking for Basic servers
• Expected Demand – 50,000 (2001) and 36% annually
for next 2 years
• Main competitor product - Ontario Computer’s Zink
 Key factors influencing Pricing Strategy
• Matzer, 20 year old veteran in computer business,
believes that software tools should be provided for
free
• Using company standard cost-plus pricing strategy,
the basic server has been priced at $2,000
• PESA is best suited for web-server and file-sharing
application segment
• Convey to prospective customers – lower acquisition
& possession costs
• Sales force’s compensation structure
 Pricing Options

1 Status Quo - $2000 for basic server / Free

PESA
2 Competition-based pricing
• 2 x Price of Ontario Zink server = $3,400

3Cost-plus pricing
• Price server and PESA
4Value-in-use pricing
 Cost-plus Pricing
Year 2001 2002 2003 Total
Expected 50,000 70,000 92,000 2,12,000
Demand (Basic
Server

Estimated Total
Sale of