Atlantic Computer: A

Bundle of Pricing Options

B2B MARKETING CASE
Submitted By Group8:
28NMP50

ADITYA RAJAIN

28NMP58

DIWAKAR VERMA

28NMP78

RAJEEV KUMAR

28NMP79

RAVISH SEHGAL

15EM01 AKHILENDRA TIWARI

Case Snapshots

Atlantic manufactures servers and high tech products

Two market segments Traditional and Basic

For traditional market -> Radia Atlantic Premier product is the market
leader

For Basic market -> Tronn + PESA -> Newly developed Atlantic offering.
Ontarios Zink is current market leader.

PESA -> Performance Enhancing Server Accelerator Improves server

performance upto 4 times.

Pricing Options

Option 1 Status Quo Pricing :

Providing PESA free with TRONN server

Cost of Atlantic Bundle = $2000
Recovering R&D cost of PESA software will be difficult

Option 2 Competition based pricing :

Charging 4 times Ontarios Zink Server

As 1 Zink server costs around $1700, the Tronn Should cost around $6800
as it performs 4 times.

Pricing Options (Contd)

Option 3 - Cost-plus pricing

As per Exhibit 1, Basic Segment Expected sales are 50,000, 70000, 92000
respectively in the years 2001, 2002, 2003.
Out of this Tronns share would be 2000 + 6300 + 12880 = 21180 units (10590
PESA)
Cost Of Tronn = $ 1538 + (2000000/10590) = 1727 approx.

Option 4 Value-In-Use Pricing

Conservatively, 2 Tronn Server + PESA is equivalent for 4 Zink servers.

4 Zinc Servers + Electricity + License Cost = $10800
2 Tronn + PESA + Electricity + License Cost = $ 6400

Recommendations

It is recommended to go with Value In Use Pricing (using Exhibit 3).

Brings add on value to customer

Gives a holistic view to customer

Increase in sales will further add to profit sharing 50-50 model.

Training Sales People for Value In Use Pricing sales pitch.