Required

1. What price should be used for Option 1 (Status Quo Pricing)?

2. What price should be used for Option 2 (Competition-Based Pricing)?

3. What price should be used for Option 3 (Cost-Plus Pricing)?

4. What price should be used for Option 4 (Value-Based Pricing) IF Atlantic was aiming to capture all of the value?

5. What price should be used for Option 4 (Value-Based Pricing) IF Atlantic was aiming to capture 50% of the value and allow Daytraderjournal.com to retain 50% of the value?

Transcribed Image Text:

On an unseasonably cold afternoon in Amberville, New York, in early October 2000, Jason Jowers leaned forward in his chair, impatient for the meeting to end, so that he could get started. The youngest product manager at Atlantic Computer, a large manufacturer of servers and other high-tech products, Jowers had joined the company just four months ago as a newly minted MBA. Now, fresh from a management rotation that had included projects in product management, strategy, and business development, Jowers was getting his first shot at some real responsibility. He would be responsible for developing the pricing strategy for the "Atlantic Bundle" (i.e., the new Tronn server and the PESA software tool). Jowers knew that it would not be easy to find the sweet spot, but he was confident and eager for the challenge. There were just four of them at this marketing kick-off meeting: Jowers; Chris Matzer, head of the server division; Emily Jones, director of the division's R&D team; and Harry Fowler, director of new product marketing. Matzer had started the meeting with a brief overview of the new server. The Tronn, he explained, had been developed specifically to meet an emerging U.S. marketplace opportunity. "But," he had said, "We really feel that the key to making this product a success is going to be our ability to sell the server with our new software tool." Jones had taken it from there. The tool, called the "Performance Enhancing Server Accelerator," or PESA, would allow the Tronn to perform up to four times faster than its standard speed, she explained. It was specifically designed to make frequently requested information (e.g., files, data, pictures, etc.) extremely accessible. "The 'Atlantic Bundle' is the sale we want.' On an unseasonably cold afternoon in Amberville, New York, in early October 2000, Jason Jowers leaned forward in his chair, impatient for the meeting to end, so that he could get started. The youngest product manager at Atlantic Computer, a large manufacturer of servers and other high-tech products, Jowers had joined the company just four months ago as a newly minted MBA. Now, fresh from a management rotation that had included projects in product management, strategy, and business development, Jowers was getting his first shot at some real responsibility. He would be responsible for developing the pricing strategy for the "Atlantic Bundle" (i.e., the new Tronn server and the PESA software tool). Jowers knew that it would not be easy to find the sweet spot, but he was confident and eager for the challenge. There were just four of them at this marketing kick-off meeting: Jowers; Chris Matzer, head of the server division; Emily Jones, director of the division's R&D team; and Harry Fowler, director of new product marketing. Matzer had started the meeting with a brief overview of the new server. The Tronn, he explained, had been developed specifically to meet an emerging U.S. marketplace opportunity. "But," he had said, "We really feel that the key to making this product a success is going to be our ability to sell the server with our new software tool." Jones had taken it from there. The tool, called the "Performance Enhancing Server Accelerator," or PESA, would allow the Tronn to perform up to four times faster than its standard speed, she explained. It was specifically designed to make frequently requested information (e.g., files, data, pictures, etc.) extremely accessible. "The 'Atlantic Bundle' is the sale we want.'

Answer rating: 100% (QA)

To answer the questions regarding the pricing options for the Atlantic Bundle we need to analyze the information given in the case and the exhibits provided Lets take each option one by one 1 Status Q... View the full answer