Essay About Atlantic Bundle Atlantic Computers And New Software Pesa

Atlantic Computer Pricing
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ATLANTIC COMPUTERPricing Strategy for Atlantic Bundle Atlantic Computers is one of the strongest players in the servers and high tech product industry. Atlantic currently has 20% of the revenue market share, but that is expected to increase with our new “Atlantic Bundle”. Their new server, the Tronn and the new software PESA are going to help the company enter into a new market. The Tronn was developed mainly for the emerging US market opportunity for basic servers. The PESA would allow the Tronn to perform up to four times faster than its standard speed and make frequently requested information more accessible. Thus, bundling the Tronn and PESA made more sense. Atlantic’s main competitor in basic market segment is Ontario, which commands 50% market share with its product Zink.There are four method for pricing strategies which Atlantic Computers can choose :Atlantic Computers could stay with the status quo and offer software tools for free.Atlantic Computers could choose competitive based pricing.Atlantic Computers could choose from cost-plus pricing.Atlantic Computers could choose value-in use pricing.Atlantic Bundle = 1 Tronn Server + PESAMethod 1 : Status Quo PricingPrice per unit for 1 Tronn Server included PESA is $ 2.000This option incude charging for Tronn server only and they will give free for PESA tool software development. Neglected PESA software development costs is $ 2.000.000. And it will not be the best option, as the company will lose $2.000.000 R&D cost for PESA.Method 2 : Competition Based Pricing2 Tronn Server + PESA = 4 Zink Basic ServerPrice per unit for 1 Zink Basic Server is $ 1.700Pricing (competition based)4 Zink Basic Server$ 6.8002 Tronn Server + PESA$ 6.8001 Tronn Server + PESA$ 3.400Based on the calculation above from the competitor the price of Atlantic Bundle is $ 3.400.Method 3 : Cost Plus PricingAssumed market captured : 4% in 2001, 9% in 2002, and 14% in 2003Cost Plus Pricing where the price of the product and another tools is combined.Sales200120022003TotalMarket volume basic server$ 50.000$ 70.000$ 92.000$ 212.000Assumed total sale of Tronn$ 2.000$ 6.300$ 12.880$ 21.180Assumed total sale of PESA (50%)$ 1.000$ 3.150$ 6.440$ 10.590PESA software development cost $ 2.000.000 PESA cost per unit for 3 years $ 188,86 Cost per server $ 1.538 Total PESA cost per unit for 3 years + cost per server $ 1.727 Price, markup 30% cost for margin $ 2.244,91 Based on the calculation above from the competitor the price of Atlantic Bundle is $ 2.244,91  $ 2.245.[pic 2]Method 4 : Value In Use Pricing