CompQuestion 1: What price should Jowers charge DayTraderJournal.com for the ‘’Atlantic Bundle’’?
There are four pricing strategies where Atlantic computer can choose from. These strategies are: status-quo pricing, competition-based pricing, cost-plus pricing and value-in-use pricing. Each strategy has a calculation and a price outcome. Below I will describe all strategies and all advantages and disadvantages of that particular strategy.
1. Status-quo pricing: Status-quo pricing | Price of Tronn server | $2.000 | Price of PESA | FREE | $0 | Total price of Tronn with PESA | $2.000 | Price of ''Atlantic bundle'' | $4.000 |
In this case the Atlantic Computer company sticks to the tradition by charging only for the hardware, the Tronn
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Value-in-use pricing the best method: From all the four price options this is the best one to choose. In table 2 you will see that this method will generate the highest profit. Because we show DayTraderJournal.com that they will get a lot of price benefits choosing the Tronn servers, instead of four Zink servers, they will likely choose for Atlantic Computer.
Question 2: How much money will be left on the table if the firm were to give away the software tool for free?
In table 1, we calculate the total purchases of Tronn servers from 2001 till 2003. The total purchases will be 21,180. If the company were to give away the software for free, they choose the status-quo pricing. With the total purchases we can calculate what the profit will be. In table 2 you will see that the total profit will be $7,785,160 dollar. If you compare that to the best option, which is value-in-use pricing, and has a total profit of $54,381,160 dollar. By subtracting the status-quo from value-in-use, makes the total amount of money left on the table. This amount is $46,596,000 dollar.
Question 3: How are your intended customers likely to react to your recommended pricing strategy?
The chosen price strategy is value-in-use, the customer will have benefits in the form of savings. The Tronn servers will supply the basic segment. But with the development of the PESA software, the performance of the Tronn will increase, specially on e-mail applications, file sharing and web servers. It is possible
In June 1744, the Iroquois and representatives from Virginia, Maryland, and Pennsylvania met in Lancaster, Pennsylvania to resolve conflicts and negotiate on agreements. These meetings were called the Covenant Chain.
A. If selling on low price, what is the implication for decisions you will make on spending (Advertising, PR, Branding, Channel Support, Quality, Efficiency, etc.)?
1. Cut down the 33.3% markup cost upto certain level and From past customer relationships use knowledge and contacts to persuade Konig about the importance of high quality to achieve bid.
The study of the Atlantic as an interwoven community is a relatively new theory. Historians are beginning to see Atlantic History as “a sudden and harsh encounter between two old worlds that transformed both and integrated them into a single New World” , and not just separate entities with detached pasts. Atlantic History: Concept and Contours by Bernard Bailyn lays the framework for what Atlantic History is and how it should be studied. Bailyn states that the reasoning behind writing the book is that previous historians focus too much on the imperial history of the Atlantic world, when in fact the colonized areas had just as much of an effect on European powers as Europe had on their colonies. In this concise two part book, Bailyn’s main argument is that the concept of Atlantic History was inevitable because it is impossible to look at any major event of this time period without seeing its effects ripple throughout the entire Atlantic world.
Alternative solutions: We studied four different alternatives: cost +, EVC, price differentiation and contingency pricing.
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Free PESA Software with Purchase. Rather than regarding the PESA R&D as a sunk cost, I chose to distribute the costs to every server. The price under this route was determined to be $2,122 (see Appendix B). The primary drawback is that a customer who would have normally purchased the Tronn without the software would be charged a higher price ($2,122 vs. $2,000). Continuing with the tradition and norm of free software, staff would not have to be retrained and customers will not feel alienated. Furthermore, the one-bundle price could easily be transitioned to on-line sales, and the low price will increase market share. The “free” software could create an illusion of low perceived value. Finally, the lower price will result in lower profit margins, and it does not take into consideration the value advantage received by the customer.
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