Atlantic’s four pricing methods

Atlantic’s four pricing methods prepared by Kyuseop Kwak Status-quo pricing – Current pricing practice. Traditional pricing suggested by MatzerCompetitor pricing – Use competitor price as…

Atlantic’s four pricing methods prepared by Kyuseop
Kwak

Status-quo pricing – Current pricing
practice. Traditional pricing suggested by MatzerCompetitor pricing – Use competitor
price as a reference. Match competitor (Ontrario Zink) price.Cost-plus pricing – Consider variable
cost and fixed costs per unit (total fixed cost divided by expected unit
sales). In the case, there are useful information to be used.Unit sales for basic segment
(and its projection) and Atlantic’s share of basic segment will give total unit
sales figure for Atlantic. Note that only 50% of units will have PESA.No variable costs involved
(simple installation)Total Fixed cost: R&D cost.
Markup margin = 30%Combining above information,
you should be able to compute how much the bundle should be.Value-in-use pricing – Compute savings,
i.e., economic value, achieved by purchasing Atlantic Tronn + PESA instead of
Ontrario Zink.Less number of servers (2 Tronn
servers versus 4 Ontario Zink)Less labour for each server
(each labour can manage 40 servers)Less electricityLess additional software
application licenses.Total savings are equal to
maximum value of PESA50-50 value sharing between Atlantic and customers. So, final pricing of PESA
euals to 50% of maximum economic value of PESA. This is additional value added
to hardware.
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