Assignment:
Discussion Questions for Atlantic Computer Case
The purpose of the Atlantic Computer case is to introduce students to the following commonly used approaches to determining price: (a) status-quo pricing, (b) comparative framing (or competition-based) pricing, (c) cost-plus pricing, and (d) value-based pricing. You are also asked to consider the reactions of competitors, customers, and internal stakeholders (e.g., salespeople) to different pricing approaches. After working on this case, you should have a firm grasp of basic pricing approaches and an appreciation for the many moving parts to be considered when setting price for a new product.
Please consider the following questions in preparing your class discussion.
1. What price should Jowers charge DayTraderJournal.com for the Atlantic Bundle (i.e., Tronn servers+PESA software tool)? do a Excel form!
2. Think broadly about the top-line revenue implications from each of the four alternative pricing strategies. Approximately how much money over the next three years will be "left on the table" if the firm were to give away the software tool away for free (i.e., status quo pricing) versus utilizing one of the other pricing approaches?
3. How is Matzer likely to react to your recommendations?
4. How is Cadena's sales force likely to react to your recommendation?
5. What can Jowers recommend to get Cadena's hardware-oriented sales force to understand and sell the value of the PESA software effectively?
6. How are customers in the firm's target market likely to react to your recommended pricing strategy? What response can be provided to overcome any objections?
7. How is Ontario Zink's senior management team likely to react to the Atlantic bundle?
Readings:
Atlantic Computer: A Bundle of Pricing Options
By Neeraj Bhardwaj and John B. Gordon