Scribd Logo
Upload

Welcome to Scribd!

  • $6400, Which Is Less Than Competitor's 4 Zink Servers' Price-$6800

    Uploaded by

    Sowmya Namburu
    3 views1 page
    Matzer believes the key to success for the Atlantic Bundle is selling servers with new software for free, based on the company's tradition. However, recovering the $20 million software development costs requires pricing over 3 years. The value-in-use pricing meets Matzer's requirements by pricing the 2Tronn server lower than competitors, allowing customers to replace 4 servers with 2, saving on electricity and licenses, while also generating profits for the company. Matzer will likely react positively to this recommendation as it addresses his concerns around cost savings and aligns with the company's traditions.

    Original Description:

    this is solution to antlantic case.

    Original Title

    Q2

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    Matzer believes the key to success for the Atlantic Bundle is selling servers with new software for free, based on the company's tradition. However, recovering the $20 million software development costs requires pricing over 3 years. The value-in-use pricing meets Matzer's requirements by pricing the 2Tronn server lower than competitors, allowing customers to replace 4 servers with 2, saving on electricity and licenses, while also generating profits for the company. Matzer will likely react positively to this recommendation as it addresses his concerns around cost savings and aligns with the company's traditions.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    3 views1 page

    $6400, Which Is Less Than Competitor's 4 Zink Servers' Price-$6800

    Uploaded by

    Sowmya Namburu
    Matzer believes the key to success for the Atlantic Bundle is selling servers with new software for free, based on the company's tradition. However, recovering the $20 million software development costs requires pricing over 3 years. The value-in-use pricing meets Matzer's requirements by pricing the 2Tronn server lower than competitors, allowing customers to replace 4 servers with 2, saving on electricity and licenses, while also generating profits for the company. Matzer will likely react positively to this recommendation as it addresses his concerns around cost savings and aligns with the company's traditions.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Q2. How is Matzer likely to react to your recommendation?

    Matzer had made a statement that the key to make the Atlantic Bundle a success depends
    on ability to sell the server with the new software tool. According to Matzers belief, the companys
    tradition; software should be provided to customers for free. But Atlantic computer, Inc; could not
    recover its PESA software development costs of $20, 00,000 which should be paid off over 3 years.
    So, we didnt opt for status-quo pricing. According to Matzer customers will purchase fewer servers
    First order savings and they prefer the server which reduces their operational and license costs-
    second order savings.

    All these requirements were met in Value-in-use pricing.

    Price of 2Tronn with this alternative is $6400, which is less than competitors 4 Zink
    servers price-$6800.
    2 Tronn servers with PESA software replaces 4 Zink servers which satisfies the first order saving.
    By purchasing 2 Tronn servers customer can save $4800 on annual electricity charges and
    software license fees this satisfies second order savings concept of Matzer.
    And we gain profits with the actual value perceived by the customers.

    You might also like