Atlantic Computer Case Essay Example
October 18th 2011
Atlantic Computer Case
Section 1
1. The “Atlantic Bundle” should use a value-in-use pricing strategy.
2. $2,500 per Tronn server with PESA software
3. Sales force will have a tough time selling the increased cost of the servers to the end customer based on software; the standard in the marketplace is that this software should be free. Also, they will be concerned with a smaller commission with fewer servers being purchased by each customer. To motivate the sales force I would reiterate that this software option isn’t simply a unique tool, but has a real effect on the bottom line of a company in terms of financial savings. To motivate them regarding the smaller commission, reiterate that market share will increase which will increase commissions.
4. To basic computer server users, Tronn server with PESA software is the brand of basic computer servers that will reduce overall website management costs because fewer servers are required to perform the same amount of processing work.
Section 2
1. The “Atlantic Bundle” should use a value-in-use pricing strategy because of the ability to communicate the cost savings to the customer. While it is a software product added to the server, and it does cost more than the basic server without the software option, fewer server costs are involved which results in a real financial benefit for the customer ordering their product. Putting myself in the shoes of the customer, I would gladly pay more for a software add-on if it meant that I would pay much less, overall, to manage my servers.
2. I calculated this price by adding the annual electricity cost to the cost of application software ($250+$750=$1,000) and then divided this by two ($500) and added it to the cost of the basic Tronn server to get a total of $2,500. So not only does the customer have to buy half as many servers (being conservative) they will also save $500 in costs to run that additional server, netting
Atlantic Computer Case
Section 1
1. The “Atlantic Bundle” should use a value-in-use pricing strategy.
2. $2,500 per Tronn server with PESA software
3. Sales force will have a tough time selling the increased cost of the servers to the end customer based on software; the standard in the marketplace is that this software should be free. Also, they will be concerned with a smaller commission with fewer servers being purchased by each customer. To motivate the sales force I would reiterate that this software option isn’t simply a unique tool, but has a real effect on the bottom line of a company in terms of financial savings. To motivate them regarding the smaller commission, reiterate that market share will increase which will increase commissions.
4. To basic computer server users, Tronn server with PESA software is the brand of basic computer servers that will reduce overall website management costs because fewer servers are required to perform the same amount of processing work.
Section 2
1. The “Atlantic Bundle” should use a value-in-use pricing strategy because of the ability to communicate the cost savings to the customer. While it is a software product added to the server, and it does cost more than the basic server without the software option, fewer server costs are involved which results in a real financial benefit for the customer ordering their product. Putting myself in the shoes of the customer, I would gladly pay more for a software add-on if it meant that I would pay much less, overall, to manage my servers.
2. I calculated this price by adding the annual electricity cost to the cost of application software ($250+$750=$1,000) and then divided this by two ($500) and added it to the cost of the basic Tronn server to get a total of $2,500. So not only does the customer have to buy half as many servers (being conservative) they will also save $500 in costs to run that additional server, netting