Case # 4: Atlantic Computer: A Bundle of Pricing Options
Marketing Management II
2/11/2014

DayTraderJournal.com Price Recommendation The Value-in-Use (50/50) Pricing is the preferred pricing method to charge DayTraderJournal.com because it provides maximum profit to Atlantic while offering an extremely competitive product and value to the consumer. However, due to how conservative DayTraderJournal purchasers are, we recommend that this price is slightly reduced from $8,400 to $6,800 (profit-sharing becomes reduced to 78/22) for two Tronn/PESA bundles, to provide an equal acquisition cost of four Zinc servers. Even though two Tronn/PESA bundles provide twice as much capacity and significantly less possession costs, we believe that DayTraderJournal purchasers, who are most concerned about acquisition costs, DayTraderJournal purchasers will be turned off by a price that’s higher than the perceived competition’s ($6,800). Because the high value that the Tronn/PESA bundle provides is difficult to convey, the initial cost of the bundle should be reduced. Once Atlantic’s market share in the basic server industry becomes larger and the Tronn/PESA value is fully recognized by consumers, we believe that Atlantic can and should increase the price.
Even though we propose a Value-In-Use Pricing of 78/22 (78% of the savings is passed on to the customer and 22% is kept by Atlantic), Atlantic still maintains a good profit margin of roughly 70% while saving the customer $6,000 (or 32%) of the possession cost of a similar offering. Additionally, this pricing strategy could bolster Atlantic’s image of being responsible and ethical once customers understand that two Tronn/PESA bundles provide the processing capacity of eight Zinc servers, yet Atlantic charged a 50% reduction in price. Further, the decreased possession cost of this package will confirm Atlantic’s claims