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Atlantic Computers A Bundle Of Pricing Essay

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Atlantic Computers: A Bundle of Pricing Options
Atlantic Computer deals in High End Server, however, due to a growing Basic Server market, Atlantic Computer has launched Tronn. The high end server market is expected to grow by 3% and have a demand of 200,000, whereas, the demand for basic server is expected to increase by 36% and result in a increase sales of 50,000 unit. Thus, company now plans at bundling Tronn and PESA together, since, PESA would allow Tronn to perform about four times faster than the standard Basic Servers. The big question now is, how to price the bundle, which would bring enough revenue to make a profit and keep the company competitive in the market.
The Pricing Decision
Traditionally, Atlantic computers focus on hardware only and bundle the software for free but now they are looking at the option of pricing the software as well. Hence,Atlantic Computers can base their pricing of four different types of pricing strategy each with its own specifications. These pricing strategies are to be centred on how customers react to their product bundling.
Competition Based Pricing
In competition based pricing the, the prices are based on competitor’s price instead of product. If Atlantic Computers opt for competitive …show more content…

Traditionally, Atlantic computers have only sold the hardware and provided the software for fee. However, if they follow this method of pricing for Tronn than they would be losing out on $200,000 of research and development cost incurred for developing PESA. Furthermore, without PESA to distinguish their product, Tronn might lose out to Zink as their cost is lower. Also, customers would prefer buying Zink as they would without a separate identify PESA would hold no value for the customers and Atlantic’s higher price will not be justified. Thus Atlantic computers, should carry on with their present pricing

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