...Coca Cola y Pepsi tienen una ventaja competitiva sostenible; es decir, una ventaja competitiva que perdura por un espacio de tiempo significativo. Tanto para Coca Cola como para Pepsi, lo que representa una verdadera amenaza, son principalmente las acciones que pueda tomar una de ellas, las que erosionan el modelo de negocios de la competencia (Coca Cola en el caso de Pepsi y viceversa). Para luchar contra ello, una alternativa que se ve conveniente, para el caso de Coca Cola por ejemplo, es inventar algo que sea difícil de copiar; en el caso de Coca Cola, por ser la primera marca en el mercado de bebidas carbonadas (CSD), resulta ser la posición de mercado privilegiada que tiene, pese al cercano segundo lugar de Pepsi. Respecto a la guerra de precios, en el caso de este mercado, donde se ve un claro Oligopolio por parte de Coca Cola y Pepsi, considerando el reconocimiento de cada marca y el posicionamiento de cada una en la mente del consumidor, resulta perjudicial, ya que el consumidor se acostumbró a pagar por esos precios y por tanto, ambas resultarían perjudicadas y no una por sobre la otra. La estrategia que siguió Coca Cola tras la amenazante presencia de Pepsi (ventas), como un gran remedio a un gran mal, resultó un fracaso del que afortunadamente salió la empresa gracias a la solidez de la compañía, quien se permitió ese desacierto. Esta decisión evidentemente no había considerado que la bebida Coca Cola, en sí, representaba un intocable icono para los consumidores...
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...uCASE SUMMARY Atlantic Computers A Bundle of Pricing Options 4/4/2011 Atlantic Computers is a leading developer of high-tech servers. It has recently decided to expand its product line downwards in order to take advantage of an emerging market for basic servers. Before it can launch the “Atlantic Bundle”, Atlantic Computers must decide which pricing strategy to implement. Of the four options: Status Quo, Competition Based, Cost-Plus, and Value in Use pricing, I believe the best option is Value-in-Use pricing. ATLANTIC COMPUTER: A BUNDLE OF PRICING OPTIONS Summary of the Situation Analysis Atlantic Computer is a manufacturer of servers and high-tech products. Two market segments exist in the server industry: High performance and Basic Servers. Atlantic Computers has held a 20% share of the High Performance market with their Radia servers being their premier product. However, the market for Basic servers is growing and this has caused Atlantic Computers to develop and introduce a Basic Server called the Tronn and a software tool called the “Performance Enhancing Server Accelerator” (PESA). The Tronn was developed mainly for the emerging US market opportunity for basic servers. The PESA would allow the Tronn to perform up to four times faster than its standard speed and make frequently requested information more accessible. Thus, bundling the Tronn and PESA made more sense. Atlantic is not concerned that the Tronn will be considered a substitute for its High Performance...
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...Atlantic Computer: A Bundle of Pricing Options Case Assignment Benjamin Athens, Alayna Boyd, Amanda Ferguson, Jessica Harper, & Emily Wagman MKT370W 11:00 a.m. Introduction. Atlantic Computer, a large manufacturer of servers and other high-tech products, is currently feeling the pressure of developing a pricing strategy for their product offering the “Atlantic Bundle”. Two markets exist in the server selling industry: traditional and basic. Atlantic is already a market leader in the traditional market with its product Radia, a price premium product. Atlantic is now looking to enter the basic market with its bundle offering. The basic market is new and fast growing- an opportunity that Jason Jowers, product manager of the Atlantic Bundle, knows he cannot miss. For the basic market, Atlantic has specifically developed a new server, Tronn. While Tronn is expected to be a success for mass sales in the basic market, Atlantic believes the key to marketing Tronn will be in bundling the server with a new software tool. PESA, Performance Enhancing Serving Accelerator, is proven to enhance Tronn’s server speed by four times. Atlantic however faces a bit of a moral dilemma with bringing PESA to market. Traditionally, Atlantic Computer has offered all software tools for free when sold in conjunction with their servers. In this case, the value of PESA is too great for Atlantic to not charge for its capabilities. The Atlantic Bundle will feature these two new product...
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...ATLANTIC COMPUTER: A BUNDLE OF PRICING OPTIONS Situation Analysis Atlantic Computer is a manufacturer of servers and high-tech products. Two market segments exist in the server industry: High performance and Basic Servers. Atlantic Computers has held a 20% share of the High Performance market with their Radia servers being their premier product. However, the market for Basic servers is growing and this has caused Atlantic Computers to develop and introduce a Basic Server called the Tronn and a software tool called the “Performance Enhancing Server Accelerator” (PESA). The Tronn was developed mainly for the emerging US market opportunity for basic servers. The PESA would allow the Tronn to perform up to four times faster than its standard speed and make frequently requested information more accessible. Thus, bundling the Tronn and PESA made more sense. Atlantic is not concerned that the Tronn will be considered a substitute for its High Performance servers. Primary Concerns: What pricing strategy should Atlantic Computers implement to price the Atlantic Bundle? Model Customer In order to decide which pricing strategy to use, it is best to identify and use the basic server needs of a model customer. In this case, DayTraderJournal.com will be used as the model customer. DayTrader.com is seeking four basic servers for their new website where day traders will be able to review articles and relevant training information. Their top requirements for a basic server purchase...
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...who had recently been hired by the computer manufacturer, Atlantic Computer, needed to devise a pricing plan for the company’s newest products: The Atlantic Bundle. This bundle contained the Tronn server and its corresponding software, the PESA. After an initial marketing meeting with a few key players, Jowers had input from the head of the server division (Matzer), the director of the division’s R&D team (Jones), and the director of new product marketing (Fowler). In addition, Jowers also needs to take into consideration the thoughts of the sales department, lead by Jairo Cadena. Atlantic’s biggest competitor is Ontario Computer, Inc, which is a cost cutter in the industry, and Atlantic Computer needs to bear in mind the customers and products that Ontario is after as well. Problem Identification Jowers was faced with a challenge of recommending a right price for the new bundle that Atlantic was planning to launch. According to the Tronn performance test results, he knew that one Tronn server equipped with the PESA tool was equivalent to four Zink (competitor’s basic server). This, among other things, made Jowers’ decision extremely difficult. Jowers had four options in front of him. 1. Continue the company tradition of charging for the server and provide the PESA tool for free 2. Charge a price equivalent to four Zink servers 3. Charge a marked-up price based on development cost of PESA tool 4. Charge a price based on value-in-pricing Situation Analysis Continuing...
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...Executive summary Atlantic Computer is a firm that specializes in high performance servers and is known for selling top notch and highly reliable products. It has been the market leader of the high performance server segment with its Radia server for the last 30 years. However, the trend shows that the basic segment is growing significantly faster than the high performance segment in terms of growth. Now, this firm’s mail goal is to enter the basic segment by launching its new basic server “Tronn”. Ontario Computer, the leader of this market, with its basic server “Zink” is the main competitor. Ontario Computer has got 50% of the market share and offers lower prices. Atlantic computer’s basic server Tronn, when combined with the PESA software, performs four times faster than Zink. To enter this new market successfully, it is necessary to choose the right pricing strategy that is value in use pricing strategy, focus on target customer segment and use a proper marketing and promotion tactic. Problem statement Atlantic computers faces some issues before the launch of the product. These are which pricing strategy to use, the competition from Ontario Computer, difficulty of entering a new market, Matzer’s and sales force’s reaction to the pricing strategy, the customers’ perception in the target market and the competitor’s reaction. Situation Analysis Competition: Ontario holds 50% revenue market share of the basic server market. It has been able to drive out many non-value...
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...Atlantic computers are the largest manufacturer of servers and other high tech products with a 20% market revenue share in the segment. The company plans to launch a basic server TRONN and software PESA due to growth in demand for basic servers. Important Details * competitor: ONTARIO ZINK * CAGR: 3%(BS segment) * TRONN along with PESA works FOUR times more efficiently. * Value of 2 TRONNs = Value of 4 ZINKs Four types of pricing strategies: * Competition based pricing * Cost plus pricing * Charging only for TRON * Value in use pricing RECOMMENDATION: The company should adopt COST PLUS PRICING with a price of $2245.5 because: * Charging for PESA would increase its value and act as a key feature * Although revenues will not be the highest, but the possibility is that the customers might not be willing to pay a very high price as in case of value in use. * It has a 30% margin which means that the company will surely make 30% profit CALCULATING PRICE IN EACH MODEL(* all calculations done based on assumptions and figures given in case) MARKET SHARE | 2001 | 2002 | 2003 | Total | Basic server | 50000 | 70000 | 92000 | 212000 | Market share | 4% | 9% | 14% | | Share | 2000 | 6300 | 12880 | 21180 | 1. Competition based pricing Price for 2 TRONN = 2 * $2000 = $4000 Price for 4 ZINK = 4 * $1700 = $6800 Acc to competition based pricing, Price for 2 TRONN= $6800 Price for 1 TRONN= $ 3400 2. Charging only for TRONN Price for 1 TRONN= $2000 3. Cost...
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...There are four pricing strategies that Atlantic Computer can choose from, each of these alternatives have positive and negative aspects, so I’m going to evaluate the four of them: status-quo pricing, competition-based pricing, cost-plus pricing and value-in-use pricing. The final recommendation is based on the points of differentiation between the Atlantic Bundle and its competition Zink Server (Ontario Computer). a. Stick with the traditional approach, charging for hardware and give the PESA (Performance Enhancing Server Accelerator) software tool for free, status quo pricing. This first strategy is the same that Atlantic Computer and the hardware industry have used since the beginning. It is a strategy that is based on the fact that most of Atlantic servers are high-end performance servers (Radia) and the large enterprise market is buying complex servers to do, save and process large number of calculations and analysis. However, Atlantic has focused a marketplace opportunity in a new growing market, basic server segment, where simple processes and show website information on the internet are needed. For this reason Atlantic computer can charge for the hardware, but PESA is a great tool that customers can get more value from Atlantic Computer. It is not the best pricing strategy to differentiate from the competition and transmit the value proposition to the customer because it is the lowest priced option and it will need sell a large amount of servers to break even the cost...
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...ATLANTIC COMPUTER: A Bundle of Pricing Options Case# 4, Donny Hamilton June 29th, 2014 ATLANTIC COMPUTER: A Bundle of Pricing Options Case# 4, Donny Hamilton June 29th, 2014 Problem Definition: We need to develop a pricing strategy for our ‘Atlantic Bundle’ – the new Tronn Server and the PESA (Performance Enhancing Server Accelerator) software before the SME trade show.ATLANTIC COMPUTER: A Bundle of Pricing Options Case# 4, Donny Hamilton June 29th, 2014 ATLANTIC COMPUTER: A Bundle of Pricing Options Case# 4, Donny Hamilton June 29th, 2014 Basic Server Market Details: * Advent of Internet: Need of low end Performance servers or Basic Servers * Collection of these basic servers could support a company’s website * Market Demand expected to be 50,000 unit in 2001 Product: * Tronn: Server developed to cater to the Basic Server Market * We will bundle the products together! Alternative Development: Competitors: * Major Competitor: Ontario Computer Inc. * Low End Server Zink, currently 50% markets share in the basic server market * Majority Sales were generated online * Zink’s server performed at approximately the same level as Tronn’s * Rest of competitors were Local Vendors Key Factors Influencing the Pricing Strategy: * Status Quo Pricing: Matzer believed that as per the company’s traditional Software, should be given for free with the purchase of the hardware * Cost Plus Pricing: According to Matzer’s...
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...Atlantic Computers: A bundle of pricing options In the case, it mentioned that, conservatively, one Tronn server equals to two Zink servers; Aggressively, one Tronn equals to four Zink servers. Within the premise that Matzer and his colleagues were quite conservative, he decided to compare two basic servers loaded with the PESA versus four basic servers. In this case, therefore, we calculate the price of Atlantic Bundle with the assumption that two Atlantic Bundles is the equivalent of four Ontario Zink servers. 1. * Status-Quo Pricing This pricing strategy considers only the cost of server and gives PESA software tool away for free. Therefore, the price of two Atlantic Bundles is $4,000. ------------------------------------------------- Price of 1 Tronn server $2,000 ------------------------------------------------- 2 Tronn servers + PESA software (Free) $4,000 This pricing strategy gives the lowest price. However, by giving PESA for free, there is no substantial difference between Tronn and Zink. This would be difficult for Atlantic Computer to gain market shares in the basic servers segment. * Competition Based Pricing Using price of competing products as a benchmark instead of considering own costs or the customer demand, we price the Tronn server based on the price of competitive server, Zink by Ontario, rather than considering costs and give PESA away for free. ------------------------------------------------- ...
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...Atlantic Computer needs to make an important decision on the pricing strategy of its new product, the Atlantic Bundle. It is the development of a basic server model called The Tronn. Until now, Atlantic has been recognized, with a 20% of the market share, for the development and distribution of high performance servers. It is estimated that this market segment will keep growing around 3% annually in the next two years. However, with the growth of the Internet, it has become convenient for many companies to acquire a low-end system, and Atlantic wants to penetrate this market segment by the launching of The Tronn. In addition, it is estimated that the market segment for low-end servers will increasingly grow much faster (about 36% annually) than the market segment for high performance servers in the next two years. Nonetheless, since the two described types of servers are totally different and have different functions, they will have different market shares and I believe that there will be no cannibalization. In order to make a wise decision, it is important for the company to identify not only who the new customers will be but also what their needs are. Companies need a basic computer server that allows them to perform simple, repeatable tasks. To satisfy these needs, Atlantic is considering adding to the Trunn a software tool called PESA (Performance Enhancing Server Accelerator), which would allow the Trunn to perform up to four times faster than a standard basic server. According...
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...Server Division, Atlantic Computer Subject: The Current Situation at Atlantic Computer Company Introduction Atlantic Computer Company is currently in a crisis, determining how to price the Atlantic bundle is a decision that is crucial at this time. Atlantic is a manufacturer of servers and highly technological products and is currently in the process of entering a market that is led by Ontario Computers. This market is within the basic server segment, where Ontario Computers has 50% market share, meaning that Atlantic has less experience and knowledge of the market in regards to what is valued and expected. A complete evaluation and analysis of the benefits and drawbacks of different pricing strategies will help determine the proper pricing strategy. In addition to the problem of the pricing strategy, Atlantic also has to determine the proper marketing approach for salespeople to utilize in order to communicate the reasoning behind this price. Atlantic will also have to take steps in regards to problems related to our marketing organization. With the upcoming Small and Medium-Sized Enterprise Systems Solution Trade show, Atlantic has the ability to communicate our pricing strategy for the PESA software to potential customers, gauge both the competition’s and customer’s reactions to the pricing strategy and organize the Salesforce and business model in a more effective and efficient manner. Problems * First Problem: Determining Price and Pricing Strategy Firstly...
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...Atlantic Computers Case Study Analysis: A Bundle of Pricing Options Margaret Bednarowicz MKT 520: Marketing Management Morris Graduate School of Management Robert Morris University Mr. William Briner January 29, 2011 Case Background Atlantic Computer is a company which specializes in high performance servers and high tech products. With its Radia server, the company is considered to be one of the most important competitors in the high performance server market. Market trends are showing, however, that basic server market is steadily growing, and faster than the high performance server market. The company’s objective is to enter the basic server market by introducing their new basic server called “Tronn. This new server will be combined with the PESA software which would allow the Tronn to improve its overall performance so it can successfully compete against the leader of the market, Ontario Computer, and their basic server “Zink. Problem Statement The key problem of this case is competition. Currently, the basic server market is dominated by Ontario Computer. This competitor holds 50% revenue market share of the basic server market. Ontario Computer has achieved this with cutting pricing and utilizing a flexible and innovative supply chain strategy. Besides competition, the following concerns need to be addressed when determining a pricing strategy such as: Price of the Tronn server is higher than Zink. The Zink server costs $1...
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...Individual’s Assignment Atlantic Computer: A Bundle of Pricing Options As Atlantic computer was largest manufacturer of servers and other hi-tech product, Jason Jowers has been assigned the task of developing the pricing structure for the Atlantic Bundle, a unique combination of the TRONN server along with the software tool - Performance Enhancing Server Accelerator – called PESA. The TRONN server has been specifically designed to address the current US market demand. In conjunction with the PESA, the TRONN ‘s performance capacity is four times faster than standard speed. Atlantic has continued to hold a significant portion (20% revenues) of the high-performance sector, but as the continual growth of the internet reached new heights, the demand of a basic server increasing rapidly. Hence, in order to meet the demand of market, the Atlantic company is planning to launch a basic server TRONN with a software tool PESA which will grow up the efficiency of server approximately four times. First of all, apart from choosing the suitable pricing method for Atlantic computers, the broad of this company also need to consider about the lifecycle of their product. Basing on the case of IBM HTTP Server or The server products of Microsoft, it seems that the lifecycle of high tech products is decreasing rapidly nowadays. According to some experts in this field, they believe that the average life expectancy of these products is around 3 or 4 years depending on many factors which include...
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...Case Study : Atlantic Computers Index: Topic Sequence Company Overview Price Strategy adopted..........................................................................1.0 Matzer's reaction to your recommendation...............................................2.0 Cadena's reaction to your recommendation..............................................3.0 Customer's reaction..............................................................................4.0 Responses to objections........................................................................5.0 Company Overview: * Atlantic Computers is a manufacturer of Servers and High-tech products. * It currently has a 20% market share in High Performance servers. * Observing the trend in the basic server market, Atlantic computers decided to launch a basic server "Tronn" in the market. * They also developed a PESA (optimising software application) which will increase the performance of server processing. * This case study is about developing a pricing strategy for 'Atlantic Bundle' - the new Tronn server with PESA software before the SME tradeshow. Questions: Q1: What price should Jowers charge Daytrade.com for the Atlantic Bundle. Think about the top-line revenue implications from each of the four alternative pricing strategies. Approximately how much money over the next three years will be "left on the table" it the firm were to give away the software tool for free versus...
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