Atlantic Computers Case Essay

1447 Words Nov 5th, 2008 6 Pages
Atlantic Computer Case

Introduction: Jason Jowers, 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
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This belief that the company should not stray from its traditional pricing strategy could be holding the company back. In addition, Jowers also knew that he had to keep the sales force in mind. The initial board meeting left the head of the sales division out, possibly because of his interest in sales commission. This indicates a possible lack of trust among the divisions because Cadena could probably provide insightful suggestions about the pricing strategy. In addition, Atlantic company was weaker than Ontario computers in supply chain strategy and in reducing overall costs. This made the pricing decision more difficult because in order to compete in price with Ontario, Atlantic would have to reduce profit margins as their overall costs were higher. On the other hand, Atlantic’s PESA software is very powerful and can be seen as a competitive advantage over Ontario. The PESA software, while initially more expensive, helped decrease overall after purchase costs and was best suited for the web-server and file sharing segments, which were two segments in the basic server market.

Alternative Courses of Action: Jowers can price the Atlantic bundle four different ways:
1. Stick with the company tradition by changing only for the hardware but giving the PESA software away for free
2. Charge a price equal to what the customer would pay for the comparable competitor’s product (Ontario’s Zinc).
3. Charge a price based on a

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