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Marketing II Case 5

Atlantic Computer: A Bundle of Pricing Options

PGP1Section C

Group 05

Submitted by:

Aditi Royal Rebello 2013PGP016

Anjali Krishnanivas Chowdry 2013PGP043

Arjit Agarwal 2013PGP070

Ishan Gurg 2013PGP160

Khagen Hamirbhai Ravaliya 2013PGP318

Ravi Vinayak Chikkam 2013PGP320

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Value-in-use pricing

It defines the value of

the product or service

in terms of what the

consumer would lose,

or what the consumer

would have to pay, if

the product or service

was not available and

then share the savings

It will fullydemonstrate, in

monetary terms,

the true value of

the Atlantic

Bundle.

More profits asAtlantic Computers

will share savings of

customers

TOC for customer isless

Resistance fromsales team

Need for trainingthe sales team

New sales modelmay causecustomers to be

reluctant

$261,90,580

Recommendations

As per quantitative analysis, we would recommend Atlantic Computer to go for a Value-in-usepricing strategy for the Atlantic Bundle as it is providing maximum profits. (This is assuming,

that there is uniform demand across all pricing strategies and applying conservative approach of

comparing two basic servers loaded with PESA software tool versus four basic servers)

Qualitatively, there are some issues which Atlantic Computer will face while implementing theValue-in-Use pricing strategy:

Resistance from Sales teamas this pricing strategy is new to them as well as the market,which would reduce their sales and consequently their commissions

Atlantic Computer will need to train them Make them realise that the bundle is actually better positioned and more customers will

be willing to take it, thereby increasing their commission (70-30 compensation

structure).

Retaliation from Ontario They will try to imitate this strategy and lower prices/ givediscounts leading to a price war

Since the Value-in-use strategy leads to a saving of almost $8,800 for the customer,any retaliation from Ontario on price would not affect Atlantic Bundle much

Final Inference: Atlantic Computer to go for a Value-in-use pricing strategy for the Atlantic Bundle

with a proper training plan for the sales team and to effectively communicate the value proposition.

This will maximize profits as well as lead to smooth implementation of the strategy.