Atlantic Computer Case Study

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Atlantic Computer is known for providing top-notch, highly reliable products and had developed a reputation for providing high quality, responsive post-sales assistance. Atlantic Computer has produced the ‘Atlantic Bundle’ (Tronn+ PESA), 4 times faster, to compete against Ontario’s Zink in the basic server market. The challenge is to get the right pricing strategy for the Atlantic bundle keeping in mind consumer behavior as well as reaction of competitors in the same market especially Ontario.
Competition Analysis
Ontario is a firm focused on the low-end server market with its Zink Product line. It currently claims 50% of the basic server market share. Performance of the Zink is approximately equivalent to that of the Tronn without PESA. Ontario’s mode of sales is mostly done online as their business model aims at providing leading technology to customers by way of the most flexible and innovative supply chain strategy possible. This has led to Ontario being able to drive out non value added costs and compete on price ($1,700) since it is able to produce at a lower cost ($1,214), indicating operational efficiency.
Pricing Strategy for Atlantic Bundle
After careful observations of the facts surrounding our competitor as well as consumer behavior in the target market segment (refer to Appendix 1), we hereby propose for Jower to give a price of $2,436 to Day Trader using the Value –in-use pricing strategy which is a method of setting prices in which an attempt is made to capture a portion of what a customer would save by buying Atlantic Bundle (refer to Appendix 2 for calculations). Atlantic Bundle at this Price would lead to a cost saving of $3,591.14 for should they purchase 2 Atlantic Bundles as against 4 basic web servers (Zink).
The basic assumptions made for this pricing strategy are as follows:
• A 50-50 sharing of the…...

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