The Atlantic Bundle
There are four pricing strategies where Atlantic computer can choose from. These strategies are: status-quo pricing, competition-based pricing, cost-plus pricing and value-in-use pricing. Each strategy has a calculation and a price outcome. Below I will describe all strategies and all advantages and disadvantages of that particular strategy.
1. Status-quo pricing: Status-quo pricing | Price of Tronn server | $2.000 | Price of PESA | FREE | $0 | Total price of Tronn with PESA | $2.000 | Price of ''Atlantic bundle'' | $4.000 |
In this case the Atlantic Computer company sticks to the tradition by charging only for the hardware, the Tronn …show more content…
The price of a ‘’Atlantic bundle’’ will be $4,490. But again it is hard to show the customer that 2 Tronn servers cost $4,490 dollar while 2 Zink servers cost $3,400 dollar.
4. Value-in-use pricing: Value-in-use pricing | | Tronn x 2 | Zink x 4 | Price of server | $4.000 | $6.800 | Electricity (annual cost) | $500 | $1.000 | Cost of application software licenses | $1.500 | $3.000 | Labour | $4.000 | $8.000 | Total | $10.000 | $18.800 | Total savings | $8.800 | Using 50-50 value pricing model | $4.400 | Price of 2 Tronn servers with PESA | $8.400 | Price of Tronn server (from Atlantic Computer) | $4.200 | Price of ''Atlantic bundle'' | $8.400 |
In the case of value in use pricing you will use the benefits that the customer will have from the products and use a 50-50 sharing of the savings that the customer will have. So by using the Tronn server you will save $250 per server compared to the Zink server. Also the cost of software licenses is lower because, because using a Tronn you only need half of the servers. The labour cost of an server also decrease by half. Total cost of use of the servers is for 2 Tronn servers $10,000 dollar and for the Zink computer $18,800. A price difference of $8,800 dollar. By using the 50-50 price sharing the customer will have a price benefit of $4,400 dollar, and Atlantic Computer likes to benefit from that deal as well and will take $4,400 dollar will to the profit. The price of the