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Pricing Strategies for Tronn Server

The document discusses pricing strategies for Tronn, a new server tool being released by Atlantic Computer. It analyzes four potential pricing strategies: 1) Charging only for hardware and providing the software tool (PESA) for free, 2) Charging the price of four comparable servers from competitor Onterio Zink, 3) Charging based on cost-plus pricing for PESA, and 4) Charging based on the value-in-use of PESA to customers. The document then compares the expected profits and consumer impacts of each strategy, concluding that a cost-plus pricing strategy would be best as it provides good profit while also being consumer-oriented.

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Hitesh Diyora
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16 views2 pages

Pricing Strategies for Tronn Server

The document discusses pricing strategies for Tronn, a new server tool being released by Atlantic Computer. It analyzes four potential pricing strategies: 1) Charging only for hardware and providing the software tool (PESA) for free, 2) Charging the price of four comparable servers from competitor Onterio Zink, 3) Charging based on cost-plus pricing for PESA, and 4) Charging based on the value-in-use of PESA to customers. The document then compares the expected profits and consumer impacts of each strategy, concluding that a cost-plus pricing strategy would be best as it provides good profit while also being consumer-oriented.

Uploaded by

Hitesh Diyora
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Atlantic Computer

Case Summary
What should be the price of Tronn? And what will be reaction of consumers and How will be response of competitor on pricing strategy?

Analysis :
There are four strategy of fixing price of Tronn. They are as follow:
-->Stick with company tradition by charging only for hardware and give the PESA tool for free. -->Charge a price equal to what the customer would pay for four Onterio Zink servers. -->Charge price based on cost plus approach to pricing PESA. -->Charge a price based on value-in-use pricing.

Following factor influence the pricing strategy of Tronn:


-->The server division's traditional focus on hardware. Because server division has not given more emphasis on software tool. And that make Matzer to provide PESA free. -->Second is division has longly relied up on cost-plus pricing analysis.

-->Based on internal performance test results,customer in the web-server and file-sharing Applications appeared to be the ones that would benefit most from the tool.{PESA}.

Pricing Strategies
Charging for hardware and giving software for free Charge price according to four Onterio Zink Charge price based on cost plus approach.

Merits
Product will be successful because its success depends upon their ability to sell it with software tool. It will increase profit of company. Nominal price. Customer will get option to buy only basic server without PESA.

De-merits
Revenue willdecrease. Profit will also be low. Onterio may reduce Zinks price. Company will lose opportunity to earn high profits.

Atlantic Computer
Standard approach of pricing. Price is comparatively less as compared to other strategies. More opportunity to earn profit.

Charge price on basis of value-in-use.

It becomes costly from consumer point of view.

Pricing Strategies
Charging for hardware and giving software for free Charge price according to four Onterio Zink Charge price based on cost plus approach. Charge price on basis of value-in-use.

Selling price
2000

Cost price
1538

Profits(per unit)
462

Total profit(21180 units)


97,85,160

6800

1632

5168

10,94,58,240

2245/2000

1726/1538

519/462

54,96,210/48,92,580

4200

1632

2568

5,43,90,240

Interpretation:
According to my opinion Cost plus strategy is best because in this method there is a good profit and also it is consumer oriented. Both consumer and company will benifited by this method.

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