ATLANTIC COMPUTERS : A

BUNDLE OF PRICING OPTIONS

Submitted By - Group 10 (B2B - 1) :
Aman Jain 024006
Parichita Raghav 024033
Pulkit Dhanava 024036
Ronit Guha Roy 024042
Important facts
• Atlantic Computer largest player in the overall computer industry – 30 years
• Known for developing high end, top known products , providing great after sales
assistance and leverage upon product differentiation
• Key issue for Jason was to price the “TRONN “server and the “PESA” software or
overall the “Atlantic bundle “ .
• Overall market divided into two segments – high end servers and basic servers
• TRONN with PESA installed was believed to have computation as of 4 servers and
was designed to do routine tasks speedily
• Biggest competitor was Ontario Computer Inc. with Zink product line.
Available Routes
• Charge only for the hardware and give PESA tool for free ( tradition )
• Charge the customers equivalent to 4 Ontario Zink servers
• Charge using cost-plus approach to price PESA ( tracking all the development
costs)
• Charge a price using value-in-use pricing

• All the above strategies work on two step benefit

1. Purchase of fewer servers
2. Low running or operational charges
 Pricing comparison
Price per server $ Cost per Profit Additional Break even Break even
server $ Cost- R&D (units) Year
Status-quo 2000(charge for only 1538 462 2000000 4329 2003
Pricing Tronn)
Competition 6800 1538 5262 2000000 380 2001
based (one Tronn = 4 Zink
Pricing servers )
Cost-plus 2307.15 1538 769.15 2000000 2600 2002
Pricing ( assuming YOY
Growth of 5,10,15%)
Value-in-use 4200 1538 2662 2000000 752 2001
Pricing (2000+2200 –
calculates basis on
exhibit 4)
Recommendation
• Option 4 seems to be the most feasible option as the sales team can pitch to the
customers on the monetary benefits of choosing Atlantic Bundle along with speed
benefits
• Good revenue and lower no of units required to break even
• If Ontario responds with a lower pricing attack in the short term then a shift can be
made to the cost plus pricing which will still give revenues and profits
• In the long run as the market share for Atlantic Bundle eventually increase or a
new product is launched by Ontario then in the maturity state status quo pricing
can be used as the costs has been recovered
THANK YOU